Full Text of HB1678 98th General Assembly
HB1678ham001 98TH GENERAL ASSEMBLY | Rep. Joe Sosnowski Filed: 3/22/2013
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| 1 | | AMENDMENT TO HOUSE BILL 1678
| 2 | | AMENDMENT NO. ______. Amend House Bill 1678 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 3. The State Employees Group Insurance Act of 1971 | 5 | | is amended by changing Section 3 as follows:
| 6 | | (5 ILCS 375/3) (from Ch. 127, par. 523)
| 7 | | Sec. 3. Definitions. Unless the context otherwise | 8 | | requires, the
following words and phrases as used in this Act | 9 | | shall have the following
meanings. The Department may define | 10 | | these and other words and phrases
separately for the purpose of | 11 | | implementing specific programs providing benefits
under this | 12 | | Act.
| 13 | | (a) "Administrative service organization" means any | 14 | | person, firm or
corporation experienced in the handling of | 15 | | claims which is
fully qualified, financially sound and capable | 16 | | of meeting the service
requirements of a contract of |
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| 1 | | administration executed with the Department.
| 2 | | (b) "Annuitant" means (1) an employee who retires, or has | 3 | | retired,
on or after January 1, 1966 on an immediate annuity | 4 | | under the provisions
of Article Articles 2 (including an | 5 | | employee who has retired under the self-managed plan) , 14 | 6 | | ( including an employee who has retired under the self-managed | 7 | | plan and including an employee who has elected to receive an | 8 | | alternative retirement cancellation payment under Section | 9 | | 14-108.5 of the Illinois Pension Code in lieu of an annuity), | 10 | | or 15 (including an employee who has retired under the optional
| 11 | | retirement program established under Section 15-158.2),
or | 12 | | under paragraphs (2), (3), or (5) of Section 16-106 of Article | 13 | | 16 (including an employee who has retired under the | 14 | | self-managed plan) , or
under Article 18 (including an employee | 15 | | who has retired under the self-managed plan) of the Illinois | 16 | | Pension Code; (2) any person who was receiving
group insurance | 17 | | coverage under this Act as of March 31, 1978 by
reason of his | 18 | | status as an annuitant, even though the annuity in relation
to | 19 | | which such coverage was provided is a proportional annuity | 20 | | based on less
than the minimum period of service required for a | 21 | | retirement annuity in
the system involved; (3) any person not | 22 | | otherwise covered by this Act
who has retired as a | 23 | | participating member under Article 2 of the Illinois
Pension | 24 | | Code but is ineligible for the retirement annuity under Section
| 25 | | 2-119 of the Illinois Pension Code; (4) the spouse of any | 26 | | person who
is receiving a retirement annuity under Article 18 |
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| 1 | | of the Illinois Pension
Code and who is covered under a group | 2 | | health insurance program sponsored
by a governmental employer | 3 | | other than the State of Illinois and who has
irrevocably | 4 | | elected to waive his or her coverage under this Act and to have
| 5 | | his or her spouse considered as the "annuitant" under this Act | 6 | | and not as
a "dependent"; or (5) an employee who retires, or | 7 | | has retired, from a
qualified position, as determined according | 8 | | to rules promulgated by the
Director, under a qualified local | 9 | | government, a qualified rehabilitation
facility, a qualified | 10 | | domestic violence shelter or service, or a qualified child | 11 | | advocacy center. (For definition
of "retired employee", see (p) | 12 | | post).
| 13 | | (b-5) (Blank).
| 14 | | (b-6) (Blank).
| 15 | | (b-7) (Blank).
| 16 | | (c) "Carrier" means (1) an insurance company, a corporation | 17 | | organized
under the Limited Health Service Organization Act or | 18 | | the Voluntary Health
Services Plan Act, a partnership, or other | 19 | | nongovernmental organization,
which is authorized to do group | 20 | | life or group health insurance business in
Illinois, or (2) the | 21 | | State of Illinois as a self-insurer.
| 22 | | (d) "Compensation" means salary or wages payable on a | 23 | | regular
payroll by the State Treasurer on a warrant of the | 24 | | State Comptroller out
of any State, trust or federal fund, or | 25 | | by the Governor of the State
through a disbursing officer of | 26 | | the State out of a trust or out of
federal funds, or by any |
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| 1 | | Department out of State, trust, federal or
other funds held by | 2 | | the State Treasurer or the Department, to any person
for | 3 | | personal services currently performed, and ordinary or | 4 | | accidental
disability benefits under Articles 2, 14, 15 | 5 | | (including ordinary or accidental
disability benefits under | 6 | | the optional retirement program established under
Section | 7 | | 15-158.2), paragraphs (2), (3), or (5) of
Section 16-106 of | 8 | | Article 16 , or Article 18 of the Illinois Pension Code, for | 9 | | disability
incurred after January 1, 1966, or benefits payable | 10 | | under the Workers'
Compensation or Occupational Diseases Act or | 11 | | benefits payable under a sick
pay plan established in | 12 | | accordance with Section 36 of the State Finance Act.
| 13 | | "Compensation" also means salary or wages paid to an employee | 14 | | of any
qualified local government, qualified rehabilitation | 15 | | facility,
qualified domestic violence shelter or service, or | 16 | | qualified child advocacy center.
| 17 | | (e) "Commission" means the State Employees Group Insurance | 18 | | Advisory
Commission authorized by this Act. Commencing July 1, | 19 | | 1984, "Commission"
as used in this Act means the Commission on | 20 | | Government Forecasting and Accountability as
established by | 21 | | the Legislative Commission Reorganization Act of 1984.
| 22 | | (f) "Contributory", when referred to as contributory | 23 | | coverage, shall
mean optional coverages or benefits elected by | 24 | | the member toward the cost of
which such member makes | 25 | | contribution, or which are funded in whole or in part
through | 26 | | the acceptance of a reduction in earnings or the foregoing of |
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| 1 | | an
increase in earnings by an employee, as distinguished from | 2 | | noncontributory
coverage or benefits which are paid entirely by | 3 | | the State of Illinois
without reduction of the member's salary.
| 4 | | (g) "Department" means any department, institution, board,
| 5 | | commission, officer, court or any agency of the State | 6 | | government
receiving appropriations and having power to | 7 | | certify payrolls to the
Comptroller authorizing payments of | 8 | | salary and wages against such
appropriations as are made by the | 9 | | General Assembly from any State fund, or
against trust funds | 10 | | held by the State Treasurer and includes boards of
trustees of | 11 | | the retirement systems created by Articles 2, 14, 15, 16 and
18 | 12 | | of the Illinois Pension Code. "Department" also includes the | 13 | | Illinois
Comprehensive Health Insurance Board, the Board of | 14 | | Examiners established under
the Illinois Public Accounting | 15 | | Act, and the Illinois Finance Authority.
| 16 | | (h) "Dependent", when the term is used in the context of | 17 | | the health
and life plan, means a member's spouse and any child | 18 | | (1) from
birth to age 26 including an adopted child, a child | 19 | | who lives with the
member from the time of the filing of a | 20 | | petition for adoption until entry
of an order of adoption, a | 21 | | stepchild or adjudicated child, or a child who lives with the | 22 | | member
if such member is a court appointed guardian of the | 23 | | child or (2)
age 19 or over who is mentally
or physically | 24 | | disabled from a cause originating prior to the age of 19 (age | 25 | | 26 if enrolled as an adult child dependent). For
the health | 26 | | plan only, the term "dependent" also includes (1) any person
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| 1 | | enrolled prior to the effective date of this Section who is | 2 | | dependent upon
the member to the extent that the member may | 3 | | claim such person as a
dependent for income tax deduction | 4 | | purposes and (2) any person who
has received after June 30, | 5 | | 2000 an organ transplant and who is financially
dependent upon | 6 | | the member and eligible to be claimed as a dependent for income
| 7 | | tax purposes. A member requesting to cover any dependent must | 8 | | provide documentation as requested by the Department of Central | 9 | | Management Services and file with the Department any and all | 10 | | forms required by the Department.
| 11 | | (i) "Director" means the Director of the Illinois | 12 | | Department of Central
Management Services or of any successor | 13 | | agency designated to administer this Act.
| 14 | | (j) "Eligibility period" means the period of time a member | 15 | | has to
elect enrollment in programs or to select benefits | 16 | | without regard to
age, sex or health.
| 17 | | (k) "Employee" means and includes each officer or employee | 18 | | in the
service of a department who (1) receives his | 19 | | compensation for
service rendered to the department on a | 20 | | warrant issued pursuant to a payroll
certified by a department | 21 | | or on a warrant or check issued and drawn by a
department upon | 22 | | a trust, federal or other fund or on a warrant issued
pursuant | 23 | | to a payroll certified by an elected or duly appointed officer
| 24 | | of the State or who receives payment of the performance of | 25 | | personal
services on a warrant issued pursuant to a payroll | 26 | | certified by a
Department and drawn by the Comptroller upon the |
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| 1 | | State Treasurer against
appropriations made by the General | 2 | | Assembly from any fund or against
trust funds held by the State | 3 | | Treasurer, and (2) is employed full-time or
part-time in a | 4 | | position normally requiring actual performance of duty
during | 5 | | not less than 1/2 of a normal work period, as established by | 6 | | the
Director in cooperation with each department, except that | 7 | | persons elected
by popular vote will be considered employees | 8 | | during the entire
term for which they are elected regardless of | 9 | | hours devoted to the
service of the State, and (3) except that | 10 | | "employee" does not include any
person who is not eligible by | 11 | | reason of such person's employment to
participate in one of the | 12 | | State retirement systems under Articles 2, 14, 15
(either the | 13 | | regular Article 15 system or the optional retirement program
| 14 | | established under Section 15-158.2) or 18, or under paragraph | 15 | | (2), (3), or
(5) of Section 16-106, of the Illinois
Pension | 16 | | Code, but such term does include persons who are employed | 17 | | during
the 6 month qualifying period under Article 14 of the | 18 | | Illinois Pension
Code. Such term also includes any person who | 19 | | (1) after January 1, 1966,
is receiving ordinary or accidental | 20 | | disability benefits under Articles
2, 14, 15 (including | 21 | | ordinary or accidental disability benefits under the
optional | 22 | | retirement program established under Section 15-158.2), | 23 | | paragraphs
(2), (3), or (5) of Section 16-106, or Article 18 of | 24 | | the
Illinois Pension Code, for disability incurred after | 25 | | January 1, 1966, (2)
receives total permanent or total | 26 | | temporary disability under the Workers'
Compensation Act or |
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| 1 | | Occupational Disease Act as a result of injuries
sustained or | 2 | | illness contracted in the course of employment with the
State | 3 | | of Illinois, or (3) is not otherwise covered under this Act and | 4 | | has
retired as a participating member under Article 2 of the | 5 | | Illinois Pension
Code but is ineligible for the retirement | 6 | | annuity under Section 2-119 of
the Illinois Pension Code. | 7 | | However, a person who satisfies the criteria
of the foregoing | 8 | | definition of "employee" except that such person is made
| 9 | | ineligible to participate in the State Universities Retirement | 10 | | System by
clause (4) of subsection (a) of Section 15-107 of the | 11 | | Illinois Pension
Code is also an "employee" for the purposes of | 12 | | this Act. "Employee" also
includes any person receiving or | 13 | | eligible for benefits under a sick pay
plan established in | 14 | | accordance with Section 36 of the State Finance Act.
"Employee" | 15 | | also includes (i) each officer or employee in the service of a
| 16 | | qualified local government, including persons appointed as | 17 | | trustees of
sanitary districts regardless of hours devoted to | 18 | | the service of the
sanitary district, (ii) each employee in the | 19 | | service of a qualified
rehabilitation facility, (iii) each | 20 | | full-time employee in the service of a
qualified domestic | 21 | | violence shelter or service, and (iv) each full-time employee | 22 | | in the service of a qualified child advocacy center, as | 23 | | determined according to
rules promulgated by the Director.
| 24 | | (l) "Member" means an employee, annuitant, retired | 25 | | employee or survivor. In the case of an annuitant or retired | 26 | | employee who first becomes an annuitant or retired employee on |
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| 1 | | or after the effective date of this amendatory Act of the 97th | 2 | | General Assembly, the individual must meet the minimum vesting | 3 | | requirements of the applicable retirement system in order to be | 4 | | eligible for group insurance benefits under that system. In the | 5 | | case of a survivor who first becomes a survivor on or after the | 6 | | effective date of this amendatory Act of the 97th General | 7 | | Assembly, the deceased employee, annuitant, or retired | 8 | | employee upon whom the annuity is based must have been eligible | 9 | | to participate in the group insurance system under the | 10 | | applicable retirement system in order for the survivor to be | 11 | | eligible for group insurance benefits under that system.
| 12 | | (m) "Optional coverages or benefits" means those coverages | 13 | | or
benefits available to the member on his or her voluntary | 14 | | election, and at
his or her own expense.
| 15 | | (n) "Program" means the group life insurance, health | 16 | | benefits and other
employee benefits designed and contracted | 17 | | for by the Director under this Act.
| 18 | | (o) "Health plan" means a health benefits
program offered
| 19 | | by the State of Illinois for persons eligible for the plan.
| 20 | | (p) "Retired employee" means any person who would be an | 21 | | annuitant as
that term is defined herein but for the fact that | 22 | | such person retired prior to
January 1, 1966. Such term also | 23 | | includes any person formerly employed by
the University of | 24 | | Illinois in the Cooperative Extension Service who would
be an | 25 | | annuitant but for the fact that such person was made ineligible | 26 | | to
participate in the State Universities Retirement System by |
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| 1 | | clause (4) of
subsection (a) of Section 15-107 of the Illinois
| 2 | | Pension Code.
| 3 | | (q) "Survivor" means a person receiving an annuity as a | 4 | | survivor of an
employee or of an annuitant. "Survivor" also | 5 | | includes: (1) the surviving
dependent of a person who satisfies | 6 | | the definition of "employee" except that
such person is made | 7 | | ineligible to participate in the State Universities
Retirement | 8 | | System by clause (4) of subsection (a)
of Section 15-107 of the | 9 | | Illinois Pension Code; (2) the surviving
dependent of any | 10 | | person formerly employed by the University of Illinois in
the | 11 | | Cooperative Extension Service who would be an annuitant except | 12 | | for the
fact that such person was made ineligible to | 13 | | participate in the State
Universities Retirement System by | 14 | | clause (4) of subsection (a) of Section
15-107 of the Illinois | 15 | | Pension Code; and (3) the surviving dependent of a person who | 16 | | was an annuitant under this Act by virtue of receiving an | 17 | | alternative retirement cancellation payment under Section | 18 | | 14-108.5 of the Illinois Pension Code.
| 19 | | (q-2) "SERS" means the State Employees' Retirement System | 20 | | of Illinois, created under Article 14 of the Illinois Pension | 21 | | Code.
| 22 | | (q-3) "SURS" means the State Universities Retirement | 23 | | System, created under Article 15 of the Illinois Pension Code.
| 24 | | (q-4) "TRS" means the Teachers' Retirement System of the | 25 | | State of Illinois, created under Article 16 of the Illinois | 26 | | Pension Code.
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| 1 | | (q-5) (Blank).
| 2 | | (q-6) (Blank).
| 3 | | (q-7) (Blank).
| 4 | | (r) "Medical services" means the services provided within | 5 | | the scope
of their licenses by practitioners in all categories | 6 | | licensed under the
Medical Practice Act of 1987.
| 7 | | (s) "Unit of local government" means any county, | 8 | | municipality,
township, school district (including a | 9 | | combination of school districts under
the Intergovernmental | 10 | | Cooperation Act), special district or other unit,
designated as | 11 | | a
unit of local government by law, which exercises limited | 12 | | governmental
powers or powers in respect to limited | 13 | | governmental subjects, any
not-for-profit association with a | 14 | | membership that primarily includes
townships and township | 15 | | officials, that has duties that include provision of
research | 16 | | service, dissemination of information, and other acts for the
| 17 | | purpose of improving township government, and that is funded | 18 | | wholly or
partly in accordance with Section 85-15 of the | 19 | | Township Code; any
not-for-profit corporation or association, | 20 | | with a membership consisting
primarily of municipalities, that | 21 | | operates its own utility system, and
provides research, | 22 | | training, dissemination of information, or other acts to
| 23 | | promote cooperation between and among municipalities that | 24 | | provide utility
services and for the advancement of the goals | 25 | | and purposes of its
membership;
the Southern Illinois | 26 | | Collegiate Common Market, which is a consortium of higher
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| 1 | | education institutions in Southern Illinois; the Illinois | 2 | | Association of
Park Districts; and any hospital provider that | 3 | | is owned by a county that has 100 or fewer hospital beds and | 4 | | has not already joined the program. "Qualified
local | 5 | | government" means a unit of local government approved by the | 6 | | Director and
participating in a program created under | 7 | | subsection (i) of Section 10 of this
Act.
| 8 | | (t) "Qualified rehabilitation facility" means any | 9 | | not-for-profit
organization that is accredited by the | 10 | | Commission on Accreditation of
Rehabilitation Facilities or | 11 | | certified by the Department
of Human Services (as successor to | 12 | | the Department of Mental Health
and Developmental | 13 | | Disabilities) to provide services to persons with
disabilities
| 14 | | and which receives funds from the State of Illinois for | 15 | | providing those
services, approved by the Director and | 16 | | participating in a program created
under subsection (j) of | 17 | | Section 10 of this Act.
| 18 | | (u) "Qualified domestic violence shelter or service" means | 19 | | any Illinois
domestic violence shelter or service and its | 20 | | administrative offices funded
by the Department of Human | 21 | | Services (as successor to the Illinois Department of
Public | 22 | | Aid),
approved by the Director and
participating in a program | 23 | | created under subsection (k) of Section 10.
| 24 | | (v) "TRS benefit recipient" means a person who:
| 25 | | (1) is not a "member" as defined in this Section; and
| 26 | | (2) is receiving a monthly benefit or retirement |
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| 1 | | annuity (which may include an annuity or other benefit | 2 | | under the self-managed plan)
under Article 16 of the | 3 | | Illinois Pension Code; and
| 4 | | (3) either (i) has at least 8 years of creditable | 5 | | service under Article
16 of the Illinois Pension Code, or | 6 | | (ii) was enrolled in the health insurance
program offered | 7 | | under that Article on January 1, 1996, or (iii) is the | 8 | | survivor
of a benefit recipient who had at least 8
years of | 9 | | creditable service under Article 16 of the Illinois Pension | 10 | | Code or
was enrolled in the health insurance program | 11 | | offered under that Article on
the effective date of this | 12 | | amendatory Act of 1995, or (iv) is a recipient or
survivor | 13 | | of a recipient of a disability benefit under Article 16 of | 14 | | the
Illinois Pension Code.
| 15 | | (w) "TRS dependent beneficiary" means a person who:
| 16 | | (1) is not a "member" or "dependent" as defined in this | 17 | | Section; and
| 18 | | (2) is a TRS benefit recipient's: (A) spouse, (B) | 19 | | dependent parent who
is receiving at least half of his or | 20 | | her support from the TRS benefit
recipient, or (C) natural, | 21 | | step, adjudicated, or adopted child who is (i) under age | 22 | | 26, (ii) was, on January 1, 1996, participating as a | 23 | | dependent
beneficiary in the health insurance program | 24 | | offered under Article 16 of the
Illinois Pension Code, or | 25 | | (iii) age 19 or over who is mentally or physically disabled | 26 | | from a cause originating prior to the age of 19 (age 26 if |
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| 1 | | enrolled as an adult child).
| 2 | | "TRS dependent beneficiary" does not include, as indicated | 3 | | under paragraph (2) of this subsection (w), a dependent of the | 4 | | survivor of a TRS benefit recipient who first becomes a | 5 | | dependent of a survivor of a TRS benefit recipient on or after | 6 | | the effective date of this amendatory Act of the 97th General | 7 | | Assembly unless that dependent would have been eligible for | 8 | | coverage as a dependent of the deceased TRS benefit recipient | 9 | | upon whom the survivor benefit is based. | 10 | | (x) "Military leave" refers to individuals in basic
| 11 | | training for reserves, special/advanced training, annual | 12 | | training, emergency
call up, activation by the President of the | 13 | | United States, or any other training or duty in service to the | 14 | | United States Armed Forces.
| 15 | | (y) (Blank).
| 16 | | (z) "Community college benefit recipient" means a person | 17 | | who:
| 18 | | (1) is not a "member" as defined in this Section; and
| 19 | | (2) is receiving a monthly survivor's annuity or | 20 | | retirement annuity (which may include an annuity or other | 21 | | benefit under the self-managed plan)
under Article 15 of | 22 | | the Illinois Pension Code; and
| 23 | | (3) either (i) was a full-time employee of a community | 24 | | college district or
an association of community college | 25 | | boards created under the Public Community
College Act | 26 | | (other than an employee whose last employer under Article |
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| 1 | | 15 of the
Illinois Pension Code was a community college | 2 | | district subject to Article VII
of the Public Community | 3 | | College Act) and was eligible to participate in a group
| 4 | | health benefit plan as an employee during the time of | 5 | | employment with a
community college district (other than a | 6 | | community college district subject to
Article VII of the | 7 | | Public Community College Act) or an association of | 8 | | community
college boards, or (ii) is the survivor of a | 9 | | person described in item (i).
| 10 | | (aa) "Community college dependent beneficiary" means a | 11 | | person who:
| 12 | | (1) is not a "member" or "dependent" as defined in this | 13 | | Section; and
| 14 | | (2) is a community college benefit recipient's: (A) | 15 | | spouse, (B) dependent
parent who is receiving at least half | 16 | | of his or her support from the community
college benefit | 17 | | recipient, or (C) natural, step, adjudicated, or adopted | 18 | | child who is (i)
under age 26, or (ii)
age 19 or over and | 19 | | mentally or physically disabled from a cause originating | 20 | | prior to the age of 19 (age 26 if enrolled as an adult | 21 | | child).
| 22 | | "Community college dependent beneficiary" does not | 23 | | include, as indicated under paragraph (2) of this subsection | 24 | | (aa), a dependent of the survivor of a community college | 25 | | benefit recipient who first becomes a dependent of a survivor | 26 | | of a community college benefit recipient on or after the |
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| 1 | | effective date of this amendatory Act of the 97th General | 2 | | Assembly unless that dependent would have been eligible for | 3 | | coverage as a dependent of the deceased community college | 4 | | benefit recipient upon whom the survivor annuity is based. | 5 | | (bb) "Qualified child advocacy center" means any Illinois | 6 | | child advocacy center and its administrative offices funded by | 7 | | the Department of Children and Family Services, as defined by | 8 | | the Children's Advocacy Center Act (55 ILCS 80/), approved by | 9 | | the Director and participating in a program created under | 10 | | subsection (n) of Section 10.
| 11 | | (Source: P.A. 96-756, eff. 1-1-10; 96-1519, eff. 2-4-11; | 12 | | 97-668, eff. 1-13-12; 97-695, eff. 7-1-12.)
| 13 | | Section 5. The Illinois Pension Code is amended by changing | 14 | | Sections 1-160, 2-126, 2-162, 14-133, 14-152.1, 16-152, | 15 | | 16-203, 18-133, 18-169, 20-121, 20-123, and 20-124 and adding | 16 | | Sections 2-107.5, 2-107.6, 2-123.5, 2-123.6, 14-103.40, | 17 | | 14-103.41, 14-130.5, 14-130.6, 16-115.1 16-115.2, 16-151.5, | 18 | | 16-151.6, 18-110.1, 18-110.2, 18-130.1, and 18-130.2 as | 19 | | follows: | 20 | | (40 ILCS 5/1-160) | 21 | | Sec. 1-160. Provisions applicable to new hires. | 22 | | (a) The provisions of this Section apply to a person who, | 23 | | on or after January 1, 2011, first becomes a member or a | 24 | | participant under any reciprocal retirement system or pension |
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| 1 | | fund established under this Code, other than a retirement | 2 | | system or pension fund established under Article 2, 3, 4, 5, 6, | 3 | | or 18 of this Code, notwithstanding any other provision of this | 4 | | Code to the contrary, but do not apply to any self-managed plan | 5 | | established under this Code, to any person with respect to | 6 | | service as a sheriff's law enforcement employee under Article | 7 | | 7, or to any participant of the retirement plan established | 8 | | under Section 22-101. | 9 | | (b) "Final average salary" means the average monthly (or | 10 | | annual) salary obtained by dividing the total salary or | 11 | | earnings calculated under the Article applicable to the member | 12 | | or participant during the 96 consecutive months (or 8 | 13 | | consecutive years) of service within the last 120 months (or 10 | 14 | | years) of service in which the total salary or earnings | 15 | | calculated under the applicable Article was the highest by the | 16 | | number of months (or years) of service in that period. For the | 17 | | purposes of a person who first becomes a member or participant | 18 | | of any retirement system or pension fund to which this Section | 19 | | applies on or after January 1, 2011, in this Code, "final | 20 | | average salary" shall be substituted for the following: | 21 | | (1) In Articles 7 (except for service as sheriff's law | 22 | | enforcement employees) and 15, "final rate of earnings". | 23 | | (2) In Articles 8, 9, 10, 11, and 12, "highest average | 24 | | annual salary for any 4 consecutive years within the last | 25 | | 10 years of service immediately preceding the date of | 26 | | withdrawal". |
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| 1 | | (3) In Article 13, "average final salary". | 2 | | (4) In Article 14, "final average compensation". | 3 | | (5) In Article 17, "average salary". | 4 | | (6) In Section 22-207, "wages or salary received by him | 5 | | at the date of retirement or discharge". | 6 | | (b-5) Beginning on January 1, 2011, for all purposes under | 7 | | this Code (including without limitation the calculation of | 8 | | benefits and employee contributions), the annual earnings, | 9 | | salary, or wages (based on the plan year) of a member or | 10 | | participant to whom this Section applies shall not exceed | 11 | | $106,800; however, that amount shall annually thereafter be | 12 | | increased by the lesser of (i) 3% of that amount, including all | 13 | | previous adjustments, or (ii) one-half the annual unadjusted | 14 | | percentage increase (but not less than zero) in the consumer | 15 | | price index-u
for the 12 months ending with the September | 16 | | preceding each November 1, including all previous adjustments. | 17 | | For the purposes of this Section, "consumer price index-u" | 18 | | means
the index published by the Bureau of Labor Statistics of | 19 | | the United States
Department of Labor that measures the average | 20 | | change in prices of goods and
services purchased by all urban | 21 | | consumers, United States city average, all
items, 1982-84 = | 22 | | 100. The new amount resulting from each annual adjustment
shall | 23 | | be determined by the Public Pension Division of the Department | 24 | | of Insurance and made available to the boards of the retirement | 25 | | systems and pension funds by November 1 of each year. | 26 | | (c) A member or participant is entitled to a retirement
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| 1 | | annuity upon written application if he or she has attained age | 2 | | 67 and has at least 10 years of service credit and is otherwise | 3 | | eligible under the requirements of the applicable Article. | 4 | | A member or participant who has attained age 62 and has at | 5 | | least 10 years of service credit and is otherwise eligible | 6 | | under the requirements of the applicable Article may elect to | 7 | | receive the lower retirement annuity provided
in subsection (d) | 8 | | of this Section. | 9 | | (d) The retirement annuity of a member or participant who | 10 | | is retiring after attaining age 62 with at least 10 years of | 11 | | service credit shall be reduced by one-half
of 1% for each full | 12 | | month that the member's age is under age 67. | 13 | | (e) Any retirement annuity or supplemental annuity shall be | 14 | | subject to annual increases on the January 1 occurring either | 15 | | on or after the attainment of age 67 or the first anniversary | 16 | | of the annuity start date, whichever is later. Each annual | 17 | | increase shall be calculated at 3% or one-half the annual | 18 | | unadjusted percentage increase (but not less than zero) in the | 19 | | consumer price index-u for the 12 months ending with the | 20 | | September preceding each November 1, whichever is less, of the | 21 | | originally granted retirement annuity. If the annual | 22 | | unadjusted percentage change in the consumer price index-u for | 23 | | the 12 months ending with the September preceding each November | 24 | | 1 is zero or there is a decrease, then the annuity shall not be | 25 | | increased. | 26 | | (f) The initial survivor's or widow's annuity of an |
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| 1 | | otherwise eligible survivor or widow of a retired member or | 2 | | participant who first became a member or participant on or | 3 | | after January 1, 2011 shall be in the amount of 66 2/3% of the | 4 | | retired member's or participant's retirement annuity at the | 5 | | date of death. In the case of the death of a member or | 6 | | participant who has not retired and who first became a member | 7 | | or participant on or after January 1, 2011, eligibility for a | 8 | | survivor's or widow's annuity shall be determined by the | 9 | | applicable Article of this Code. The initial benefit shall be | 10 | | 66 2/3% of the earned annuity without a reduction due to age. A | 11 | | child's annuity of an otherwise eligible child shall be in the | 12 | | amount prescribed under each Article if applicable. Any | 13 | | survivor's or widow's annuity shall be increased (1) on each | 14 | | January 1 occurring on or after the commencement of the annuity | 15 | | if
the deceased member died while receiving a retirement | 16 | | annuity or (2) in
other cases, on each January 1 occurring | 17 | | after the first anniversary
of the commencement of the annuity. | 18 | | Each annual increase shall be calculated at 3% or one-half the | 19 | | annual unadjusted percentage increase (but not less than zero) | 20 | | in the consumer price index-u for the 12 months ending with the | 21 | | September preceding each November 1, whichever is less, of the | 22 | | originally granted survivor's annuity. If the annual | 23 | | unadjusted percentage change in the consumer price index-u for | 24 | | the 12 months ending with the September preceding each November | 25 | | 1 is zero or there is a decrease, then the annuity shall not be | 26 | | increased. |
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| 1 | | (g) The benefits in Section 14-110 apply only if the person | 2 | | is a State policeman, a fire fighter in the fire protection | 3 | | service of a department, or a security employee of the | 4 | | Department of Corrections or the Department of Juvenile | 5 | | Justice, as those terms are defined in subsection (b) of | 6 | | Section 14-110. A person who meets the requirements of this | 7 | | Section is entitled to an annuity calculated under the | 8 | | provisions of Section 14-110, in lieu of the regular or minimum | 9 | | retirement annuity, only if the person has withdrawn from | 10 | | service with not less than 20
years of eligible creditable | 11 | | service and has attained age 60, regardless of whether
the | 12 | | attainment of age 60 occurs while the person is
still in | 13 | | service. | 14 | | (h) If a person who first becomes a member or a participant | 15 | | of a retirement system or pension fund subject to this Section | 16 | | on or after January 1, 2011 is receiving a retirement annuity | 17 | | or retirement pension under that system or fund and becomes a | 18 | | member or participant under any other system or fund created by | 19 | | this Code and is employed on a full-time basis, except for | 20 | | those members or participants exempted from the provisions of | 21 | | this Section under subsection (a) of this Section, then the | 22 | | person's retirement annuity or retirement pension under that | 23 | | system or fund shall be suspended during that employment. Upon | 24 | | termination of that employment, the person's retirement | 25 | | annuity or retirement pension payments shall resume and be | 26 | | recalculated if recalculation is provided for under the |
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| 1 | | applicable Article of this Code. | 2 | | If a person who first becomes a member of a retirement | 3 | | system or pension fund subject to this Section on or after | 4 | | January 1, 2012 and is receiving a retirement annuity or | 5 | | retirement pension under that system or fund and accepts on a | 6 | | contractual basis a position to provide services to a | 7 | | governmental entity from which he or she has retired, then that | 8 | | person's annuity or retirement pension earned as an active | 9 | | employee of the employer shall be suspended during that | 10 | | contractual service. A person receiving an annuity or | 11 | | retirement pension under this Code shall notify the pension | 12 | | fund or retirement system from which he or she is receiving an | 13 | | annuity or retirement pension, as well as his or her | 14 | | contractual employer, of his or her retirement status before | 15 | | accepting contractual employment. A person who fails to submit | 16 | | such notification shall be guilty of a Class A misdemeanor and | 17 | | required to pay a fine of $1,000. Upon termination of that | 18 | | contractual employment, the person's retirement annuity or | 19 | | retirement pension payments shall resume and, if appropriate, | 20 | | be recalculated under the applicable provisions of this Code. | 21 | | (i) Notwithstanding any other provision of this Section, a | 22 | | person who first becomes a participant of the retirement system | 23 | | established under Article 15 on or after January 1, 2011 shall | 24 | | have the option to enroll in the self-managed plan created | 25 | | under Section 15-158.2 of this Code. | 26 | | Notwithstanding any other provision of this Section, a |
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| 1 | | person who first becomes a participant of a retirement system | 2 | | established under Article 14 or 16 on or after January 1, 2011 | 3 | | shall have the option to enroll in the self-managed plan | 4 | | created under the applicable Article. | 5 | | (j) In the case of a conflict between the provisions of | 6 | | this Section and any other provision of this Code, the | 7 | | provisions of this Section shall control.
| 8 | | (Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11; | 9 | | 97-609, eff. 1-1-12.) | 10 | | (40 ILCS 5/2-107.5 new) | 11 | | Sec. 2-107.5. Defined benefit package. | 12 | | "Defined benefit package" means either the traditional | 13 | | benefit package or the reformed benefit package, whichever | 14 | | would apply to a participant if he or she does not participate | 15 | | in the self-managed plan. | 16 | | "Traditional benefit
package" means the benefits provided | 17 | | under this Article, other than the self-managed plan, for | 18 | | persons who first became participants of the System before | 19 | | January 1, 2011. | 20 | | "Reformed benefit
package" means the traditional benefit | 21 | | package as modified for persons who first become participants | 22 | | of the System on or after January 1, 2011. | 23 | | (40 ILCS 5/2-107.6 new) | 24 | | Sec. 2-107.6. Self-managed plan. "Self-managed plan" means |
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| 1 | | the defined
contribution retirement program maintained by the | 2 | | System and established under
Section 2-123.5. The self-managed | 3 | | plan does not
include any annuity or refund payable directly by | 4 | | the System under the defined benefit package. | 5 | | (40 ILCS 5/2-123.5 new)
| 6 | | Sec. 2-123.5. Self-managed plan. | 7 | | (a) The General Assembly finds that the System should | 8 | | provide a defined contribution
(self-managed) plan for | 9 | | eligible participants.
Accordingly, the System is hereby | 10 | | directed to
establish and administer a self-managed plan, which | 11 | | shall offer participants the opportunity to accumulate assets | 12 | | for retirement through a
combination of participant and | 13 | | employer contributions that may be invested in
mutual funds, | 14 | | collective investment funds, or other investment products and
| 15 | | used to purchase annuity contracts that are fixed, variable, or | 16 | | a combination of fixed and variable. The plan must be qualified | 17 | | under the Internal Revenue Code of 1986. | 18 | | (b) The Board shall
make the self-managed plan established | 19 | | under this Section available to eligible participants under | 20 | | this Article within 6 months after the effective date of this | 21 | | amendatory Act of the 98th General Assembly. The adoption of | 22 | | the self-managed
plan makes available to the eligible | 23 | | participants under this Article the election
described in | 24 | | Section 2-123.6.
| 25 | | The System shall be the plan sponsor for the
self-managed |
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| 1 | | plan and shall prepare a plan document and adopt any rules
and | 2 | | procedures that are considered necessary or desirable for the | 3 | | administration
of the self-managed plan. Consistent with its | 4 | | fiduciary duty to the
participants and beneficiaries of the | 5 | | self-managed plan, the Board of Trustees
of the System may | 6 | | delegate aspects of plan administration as it sees fit to
| 7 | | companies authorized to do business in this State.
| 8 | | (c) The System shall solicit proposals to provide
| 9 | | administrative services and funding vehicles for the | 10 | | self-managed plan from
insurance and annuity companies, mutual | 11 | | fund companies, banks, trust
companies, or other financial | 12 | | institutions authorized to do business in this
State. In | 13 | | reviewing the proposals received and approving and contracting | 14 | | with
no fewer than 2 and no more than 7 companies, the Board of | 15 | | Trustees of the System shall
consider, among other things, the | 16 | | following criteria:
| 17 | | (1) the nature and extent of the benefits that would be | 18 | | provided
to the participants;
| 19 | | (2) the reasonableness of the benefits in relation to | 20 | | the premium
charged;
| 21 | | (3) the suitability of the benefits to the needs and
| 22 | | interests of the participants and the employers; and | 23 | | (4) the ability of the company to provide benefits | 24 | | under the contract and
the financial stability of the | 25 | | company.
| 26 | | The System shall periodically review
each approved |
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| 1 | | company. A company may continue to provide administrative
| 2 | | services and funding vehicles for the self-managed plan only so | 3 | | long as
it continues to be an approved company under contract | 4 | | with the Board.
| 5 | | In addition to the companies approved by the System under | 6 | | this subsection (c), the System may offer its participants an | 7 | | investment fund managed by the Illinois State Board of | 8 | | Investment.
| 9 | | (d) Participants in the program
must be allowed to direct | 10 | | the transfer of their account balances among the
various | 11 | | investment options offered, subject to applicable contractual
| 12 | | provisions.
The participant shall not be deemed a fiduciary by | 13 | | reason of providing such
investment direction. A person who is | 14 | | a fiduciary shall not be liable for any
loss resulting from | 15 | | that investment direction and shall not be deemed to have
| 16 | | breached any fiduciary duty by acting in accordance with that | 17 | | direction.
Neither the System nor the State shall guarantee any | 18 | | of the investments in the
participant's account balances.
| 19 | | (e) In order to participate in the
self-managed plan, an | 20 | | eligible participant, as defined in Section 2-123.6, must make | 21 | | a written election in accordance with the
provisions of that | 22 | | Section and the procedures established by the System.
| 23 | | Participation in the self-managed plan shall begin
on the first | 24 | | day of the month immediately following the month in which the
| 25 | | participant's election is filed with the System, but not sooner | 26 | | than the effective date of
the self-managed
plan. A person's |
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| 1 | | participation in the defined benefit package under this Article | 2 | | shall terminate on the date that
participation in the | 3 | | self-managed plan begins.
| 4 | | A person who has elected to participate in the self-managed | 5 | | plan under
this Section must continue participation while he or | 6 | | she remains a participant under this Article, and may not | 7 | | participate in the defined benefit package.
| 8 | | Participation in the self-managed plan under this Section | 9 | | shall constitute
participation in the System.
| 10 | | Notwithstanding any other provision
of this Article, a | 11 | | participant in the self-managed plan may not purchase or | 12 | | receive service
credit applicable to the defined benefit | 13 | | package
under this Article for any period during which the | 14 | | participant was a participant
in the self-managed plan | 15 | | established under this Section.
| 16 | | A participant under this Section shall be entitled to the | 17 | | benefits of
Article 20 of this Code.
| 18 | | (f) If, at the time a participant
begins to participate in | 19 | | the self-managed plan, the participant has rights and credits
| 20 | | in the System due to previous participation in the defined | 21 | | benefit package,
the System shall establish for the participant | 22 | | an opening account balance in the
self-managed plan, equal to | 23 | | (1) the amount of the refund that the participant
would be | 24 | | eligible to receive if the participant terminated
employment on | 25 | | that date and elected a refund and (2) an amount, representing | 26 | | employer contributions, equal to the amount of participant |
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| 1 | | contributions, plus interest. The interest used in this | 2 | | subsection (f) shall be calculated using the actual annual | 3 | | rates of return that the System has earned during the time | 4 | | period corresponding to the actual investment of the | 5 | | contributions being transferred. The System shall transfer | 6 | | assets to the self-managed plan as a tax-free transfer in
| 7 | | accordance with Internal Revenue Service guidelines, for | 8 | | purposes of funding
the participant's opening account balance.
| 9 | | (g) In lieu of a disability benefit, in the event that a | 10 | | participant in the self-managed plan has completed 8 years of | 11 | | service and has become
permanently disabled and, as a | 12 | | consequence, is unable to perform the duties
of his or her | 13 | | office, the participant may elect to receive benefits from the
| 14 | | self-managed plan at any age. | 15 | | (h) The self-managed plan shall be funded by contributions
| 16 | | from participants in the self-managed plan and employer
| 17 | | contributions as provided in this Section.
| 18 | | The contribution rate for participants in the self-managed | 19 | | plan
under this Section shall be equal to the member | 20 | | contribution rate for other
participants in the System, as | 21 | | provided in Section 2-126. This required
contribution shall be | 22 | | made as an employer pick-up under Section 414(h) of the
| 23 | | Internal Revenue Code of 1986 or any successor Section thereof. | 24 | | Any participant in the System's defined benefit package before | 25 | | his or her
election to participate in the self-managed plan | 26 | | shall continue to have the
employer pick up the contributions |
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| 1 | | required under Section 2-126. However, the
amounts picked up | 2 | | after beginning participation in the self-managed plan shall be | 3 | | remitted
to and treated as assets of the self-managed plan. In | 4 | | no event shall a participant have the option of receiving these | 5 | | amounts in cash. Participants may make
additional | 6 | | contributions to the
self-managed plan in accordance with | 7 | | procedures prescribed by the System, to
the extent permitted | 8 | | under rules adopted by the System.
| 9 | | The plan shall provide for employer contributions to be | 10 | | credited to each self-managed plan participant
in an amount | 11 | | equal to the participant contributions.
The amounts so credited
| 12 | | shall be paid into the participant's self-managed plan accounts | 13 | | in a manner
to be prescribed by the System.
| 14 | | Employer contributions for participants in
the | 15 | | self-managed plan shall be paid to the System by the State and | 16 | | shall be included in the calculation of required State | 17 | | contributions under Section 2-124. The System shall not be | 18 | | obligated to remit the
required employer contributions to any | 19 | | of the insurance and annuity
companies, mutual fund
companies, | 20 | | banks, trust companies, financial institutions, or other | 21 | | sponsors
of any of the funding vehicles offered under the | 22 | | self-managed plan
until it has received the required employer | 23 | | contributions from the State.
| 24 | | (i) A participant in the
self-managed plan becomes vested | 25 | | in the employer contributions credited to his
or her accounts | 26 | | in the self-managed plan on the earliest to occur of the
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| 1 | | following: (1) attainment of 4 years of service credit; (2) the | 2 | | death of the participant while employed under this Article, if | 3 | | the participant has completed at
least 1.5 years of service; or | 4 | | (3) the participant's election to retire and
apply the | 5 | | reciprocal provisions of Article 20 of this Code.
| 6 | | A participant in the self-managed plan who receives a | 7 | | distribution of his or
her vested amounts from the self-managed | 8 | | plan
while not yet eligible for retirement under this Article
| 9 | | (including subsection (g) of this Section and Article 20, if | 10 | | applicable) shall forfeit all service credit
and accrued rights | 11 | | in the System; if he or she subsequently becomes a participant | 12 | | under this Article again, he or she
shall be considered a new
| 13 | | participant. If a former participant again becomes a | 14 | | participant (or
becomes employed by a participating system | 15 | | under Article 20 of this Code) and
continues as such for at | 16 | | least 2 years, all rights, service credits, and
previous status | 17 | | as a participant shall be restored upon repayment of the amount
| 18 | | of the distribution, with interest at the actuarially assumed | 19 | | rate from the date of distribution to the date of payment.
| 20 | | (j) If a participant in the self-managed plan who is vested | 21 | | in employer
contributions terminates employment, the | 22 | | participant shall be entitled to a
benefit that is based on the
| 23 | | account values attributable to both employer and
participant | 24 | | contributions and any
investment return thereon.
| 25 | | If a participant in the self-managed plan who is not vested | 26 | | in employer contributions terminates
employment, the |
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| 1 | | participant shall be entitled to a benefit based solely on the
| 2 | | account values attributable to the participant's contributions | 3 | | and any investment
return thereon, and the employer | 4 | | contributions and any investment return
thereon shall be | 5 | | forfeited. Any employer contributions that are forfeited
shall | 6 | | be held in escrow by the
company investing those contributions | 7 | | and shall be used, as directed by the
System, for future | 8 | | allocations of employer contributions or for the restoration
of | 9 | | amounts previously forfeited.
| 10 | | (40 ILCS 5/2-123.6 new)
| 11 | | Sec. 2-123.6. Election to participate in the self-managed | 12 | | plan. | 13 | | (a) For the purposes of this Section and Section 2-123.5: | 14 | | "Eligible participant" means either a currently eligible | 15 | | participant or a newly eligible
participant of the System. | 16 | | "Currently eligible participant"
means a person who is a | 17 | | participant under this Article before the day on which the | 18 | | System first offers the
self-managed plan as an alternative to | 19 | | the defined benefit package. | 20 | | "Newly
eligible participant" means a person who first | 21 | | becomes a participant
under this Article on or after the date | 22 | | on which the System first offers the self-managed plan as an | 23 | | alternative to the defined benefit package.
| 24 | | (b) Each eligible participant shall be
given an opportunity | 25 | | to elect to
participate in the self-managed plan rather than |
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| 1 | | the defined benefit package. An election to participate in the | 2 | | self-managed plan applies to all periods of employment under | 3 | | this System, including employment occurring on,
before, and | 4 | | after the effective date of the participant's election. An | 5 | | eligible participant who does not make an election under this | 6 | | Section shall, by default,
participate in the defined benefit | 7 | | package. | 8 | | An election to participate in the self-managed plan is | 9 | | irrevocable. If an eligible participant who participates in the | 10 | | defined benefit package terminates employment under this | 11 | | Article, then the participant, upon his or her subsequent
| 12 | | re-employment under this Article, may make an election under | 13 | | this Section. | 14 | | (c) The election must be made in writing, in the
manner | 15 | | prescribed by the System, and within the required time period. | 16 | | A currently eligible participant may make the election within | 17 | | one year
after the day on which the System first offers the
| 18 | | self-managed plan. A newly eligible participant may make the | 19 | | election within 60 days after first becoming a participant | 20 | | under this Article. An eligible participant who terminates | 21 | | employment under this Article without having made an election | 22 | | to participate in the self-managed plan and later returns to | 23 | | employment under this Article may make the election within 60 | 24 | | days after returning to employment under this Article.
| 25 | | (d) If an eligible participant elects to participate in the | 26 | | self-managed plan, the System shall fund his or her account as |
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| 1 | | stated in subsection (f) of Section 2-123.5.
| 2 | | (e) An eligible participant shall be provided with written | 3 | | information prepared
or prescribed by the System that describes | 4 | | the participant's retirement program
choices. The eligible | 5 | | participant shall be offered an opportunity to
receive | 6 | | counseling from the System before making his or her election. | 7 | | This
counseling may consist of videotaped materials, group | 8 | | presentations, individual
consultation with an employee or | 9 | | authorized representative of the System in
person or by | 10 | | telephone or other electronic means, or any combination of | 11 | | these
methods.
| 12 | | (40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)
| 13 | | Sec. 2-126. Contributions by participants.
| 14 | | (a) Each participant shall contribute toward the cost of | 15 | | his or her
retirement annuity a percentage of each payment of | 16 | | salary received by him or
her for service as a member as | 17 | | follows: for service between October 31, 1947
and January 1, | 18 | | 1959, 5%; for service between January 1, 1959 and June 30, | 19 | | 1969,
6%; for service between July 1, 1969 and January 10, | 20 | | 1973, 6 1/2%; for service
after January 10, 1973, 7%; for | 21 | | service after December 31, 1981, 8 1/2%.
| 22 | | (b) Beginning August 2, 1949, each male participant, and | 23 | | from July 1,
1971, each female participant shall contribute | 24 | | towards the cost of the
survivor's annuity 2% of salary.
| 25 | | A participant who has no eligible survivor's annuity |
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| 1 | | beneficiary may elect
to cease making contributions for | 2 | | survivor's annuity under this subsection.
A survivor's annuity | 3 | | shall not be payable upon the death of a person who has
made | 4 | | this election, unless prior to that death the election has been | 5 | | revoked
and the amount of the contributions that would have | 6 | | been paid under this
subsection in the absence of the election | 7 | | is paid to the System, together
with interest at the rate of 4% | 8 | | per year from the date the contributions
would have been made | 9 | | to the date of payment.
| 10 | | (c) Beginning July 1, 1967, each participant shall | 11 | | contribute 1% of
salary towards the cost of automatic increase | 12 | | in annuity provided in
Section 2-119.1. These contributions | 13 | | shall be made concurrently with
contributions for retirement | 14 | | annuity purposes.
| 15 | | (d) In addition, each participant serving as an officer of | 16 | | the General
Assembly shall contribute, for the same purposes | 17 | | and at the same rates
as are required of a regular participant, | 18 | | on each additional payment
received as an officer. If the | 19 | | participant serves as an
officer for at least 2 but less than 4 | 20 | | years, he or she shall
contribute an amount equal to the amount | 21 | | that would have been contributed
had the participant served as | 22 | | an officer for 4 years. Persons who serve
as officers in the | 23 | | 87th General Assembly but cannot receive the additional
payment | 24 | | to officers because of the ban on increases in salary during | 25 | | their
terms may nonetheless make contributions based on those | 26 | | additional payments
for the purpose of having the additional |
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| 1 | | payments included in their highest
salary for annuity purposes; | 2 | | however, persons electing to make these
additional | 3 | | contributions must also pay an amount representing the
| 4 | | corresponding employer contributions, as calculated by the | 5 | | System.
| 6 | | (e) Notwithstanding any other provision of this Article, | 7 | | the required contribution of a participant who first becomes a | 8 | | participant on or after January 1, 2011 shall not exceed the | 9 | | contribution that would be due under this Article if that | 10 | | participant's highest salary for annuity purposes were | 11 | | $106,800, plus any increases in that amount under Section | 12 | | 2-108.1. This subsection (e) does not apply to participants in | 13 | | the self-managed plan. | 14 | | (f) In the case of a participant who participates in the | 15 | | self-managed plan under Section 2-123.5, the contributions | 16 | | required under this Section shall instead be used to finance | 17 | | the benefits available under the self-managed plan. | 18 | | (Source: P.A. 96-1490, eff. 1-1-11.)
| 19 | | (40 ILCS 5/2-162)
| 20 | | Sec. 2-162. Application and expiration of new benefit | 21 | | increases. | 22 | | (a) As used in this Section, "new benefit increase" means | 23 | | an increase in the amount of any benefit provided under this | 24 | | Article, or an expansion of the conditions of eligibility for | 25 | | any benefit under this Article, that results from an amendment |
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| 1 | | to this Code that takes effect after the effective date of this | 2 | | amendatory Act of the 94th General Assembly. "New benefit | 3 | | increase", however, does not include any benefit increase | 4 | | resulting from the changes made to this Article by this | 5 | | amendatory Act of the 98th General Assembly. | 6 | | (b) Notwithstanding any other provision of this Code or any | 7 | | subsequent amendment to this Code, every new benefit increase | 8 | | is subject to this Section and shall be deemed to be granted | 9 | | only in conformance with and contingent upon compliance with | 10 | | the provisions of this Section.
| 11 | | (c) The Public Act enacting a new benefit increase must | 12 | | identify and provide for payment to the System of additional | 13 | | funding at least sufficient to fund the resulting annual | 14 | | increase in cost to the System as it accrues. | 15 | | Every new benefit increase is contingent upon the General | 16 | | Assembly providing the additional funding required under this | 17 | | subsection. The Commission on Government Forecasting and | 18 | | Accountability shall analyze whether adequate additional | 19 | | funding has been provided for the new benefit increase and | 20 | | shall report its analysis to the Public Pension Division of the | 21 | | Department of Financial and Professional Regulation. A new | 22 | | benefit increase created by a Public Act that does not include | 23 | | the additional funding required under this subsection is null | 24 | | and void. If the Public Pension Division determines that the | 25 | | additional funding provided for a new benefit increase under | 26 | | this subsection is or has become inadequate, it may so certify |
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| 1 | | to the Governor and the State Comptroller and, in the absence | 2 | | of corrective action by the General Assembly, the new benefit | 3 | | increase shall expire at the end of the fiscal year in which | 4 | | the certification is made.
| 5 | | (d) Every new benefit increase shall expire 5 years after | 6 | | its effective date or on such earlier date as may be specified | 7 | | in the language enacting the new benefit increase or provided | 8 | | under subsection (c). This does not prevent the General | 9 | | Assembly from extending or re-creating a new benefit increase | 10 | | by law. | 11 | | (e) Except as otherwise provided in the language creating | 12 | | the new benefit increase, a new benefit increase that expires | 13 | | under this Section continues to apply to persons who applied | 14 | | and qualified for the affected benefit while the new benefit | 15 | | increase was in effect and to the affected beneficiaries and | 16 | | alternate payees of such persons, but does not apply to any | 17 | | other person, including without limitation a person who | 18 | | continues in service after the expiration date and did not | 19 | | apply and qualify for the affected benefit while the new | 20 | | benefit increase was in effect.
| 21 | | (Source: P.A. 94-4, eff. 6-1-05.) | 22 | | (40 ILCS 5/14-103.40 new) | 23 | | Sec. 14-103.40. Defined benefit package. | 24 | | "Defined benefit package" means either the traditional | 25 | | benefit package or the reformed benefit package, whichever |
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| 1 | | would apply to an employee if he or she does not participate in | 2 | | the self-managed plan. | 3 | | "Traditional benefit
package" means the benefits provided | 4 | | under this Article, other than the self-managed plan, without | 5 | | modification by Section 1-160 of this Code. | 6 | | "Reformed benefit
package" means the traditional benefit | 7 | | package as modified by Section 1-160 of this Code for certain | 8 | | persons who first become participants of the System on or after | 9 | | January 1, 2011. | 10 | | (40 ILCS 5/14-103.41 new) | 11 | | Sec. 14-103.41. Self-managed plan. "Self-managed plan" | 12 | | means the defined
contribution retirement program maintained | 13 | | by the System and established under
Section 14-130.5. The | 14 | | self-managed plan includes disability benefits, but does not
| 15 | | include any other annuity or refund payable directly by the | 16 | | System under the defined benefit package. | 17 | | (40 ILCS 5/14-130.5 new)
| 18 | | Sec. 14-130.5. Self-managed plan. | 19 | | (a) The General Assembly finds that the System should | 20 | | provide a defined contribution
(self-managed) plan for | 21 | | eligible participants.
Accordingly, the System is hereby | 22 | | directed to
establish and administer a self-managed plan, which | 23 | | shall offer participants the opportunity to accumulate assets | 24 | | for retirement through a
combination of participant and |
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| 1 | | employer contributions that may be invested in
mutual funds, | 2 | | collective investment funds, or other investment products and
| 3 | | used to purchase annuity contracts that are fixed, variable, or | 4 | | a combination of fixed and variable. The plan must be qualified | 5 | | under the Internal Revenue Code of 1986. | 6 | | (b) The Board shall
make the self-managed plan established | 7 | | under this Section available to eligible participants under | 8 | | this Article within 6 months after the effective date of this | 9 | | amendatory Act of the 98th General Assembly. The adoption of | 10 | | the self-managed
plan makes available to eligible participants | 11 | | under this Article the election
described in Section 14-130.6.
| 12 | | The System shall be the plan sponsor for the
self-managed | 13 | | plan and shall prepare a plan document and adopt any rules
and | 14 | | procedures that are considered necessary or desirable for the | 15 | | administration
of the self-managed plan. Consistent with its | 16 | | fiduciary duty to the
participants and beneficiaries of the | 17 | | self-managed plan, the Board of Trustees
of the System may | 18 | | delegate aspects of plan administration as it sees fit to
| 19 | | companies authorized to do business in this State.
| 20 | | (c) The System shall solicit proposals to provide
| 21 | | administrative services and funding vehicles for the | 22 | | self-managed plan from
insurance and annuity companies, mutual | 23 | | fund companies, banks, trust
companies, or other financial | 24 | | institutions authorized to do business in this
State. In | 25 | | reviewing the proposals received and approving and contracting | 26 | | with
no fewer than 2 and no more than 7 companies, the Board of |
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| 1 | | Trustees of the System shall
consider, among other things, the | 2 | | following criteria:
| 3 | | (1) the nature and extent of the benefits that would be | 4 | | provided
to the participants;
| 5 | | (2) the reasonableness of the benefits in relation to | 6 | | the premium
charged;
| 7 | | (3) the suitability of the benefits to the needs and
| 8 | | interests of the participants and the employers; and | 9 | | (4) the ability of the company to provide benefits | 10 | | under the contract and
the financial stability of the | 11 | | company.
| 12 | | The System shall periodically review
each approved | 13 | | company. A company may continue to provide administrative
| 14 | | services and funding vehicles for the self-managed plan only so | 15 | | long as
it continues to be an approved company under contract | 16 | | with the Board.
| 17 | | In addition to the companies approved by the System under | 18 | | this subsection (c), the System may offer its participants an | 19 | | investment fund managed by the Illinois State Board of | 20 | | Investment.
| 21 | | (d) Participants in the program
must be allowed to direct | 22 | | the transfer of their account balances among the
various | 23 | | investment options offered, subject to applicable contractual
| 24 | | provisions.
The participant shall not be deemed a fiduciary by | 25 | | reason of providing such
investment direction. A person who is | 26 | | a fiduciary shall not be liable for any
loss resulting from |
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| 1 | | that investment direction and shall not be deemed to have
| 2 | | breached any fiduciary duty by acting in accordance with that | 3 | | direction.
Neither the System nor the State shall guarantee any | 4 | | of the investments in the
participant's account balances.
| 5 | | (e) In order to participate in the
self-managed plan, an | 6 | | eligible participant, as defined in Section 7-140.5, must make | 7 | | a written election in accordance with the
provisions of that | 8 | | Section and the procedures established by the System.
| 9 | | Participation in the self-managed plan shall begin
on the first | 10 | | day of the month immediately following the month in which the
| 11 | | participant's election is filed with the System, but not sooner | 12 | | than the effective date of
the self-managed
plan. A person's | 13 | | participation in the defined benefit package under this Article | 14 | | shall terminate on the date that
participation in the | 15 | | self-managed plan begins.
| 16 | | A person who has elected to participate in the self-managed | 17 | | plan under
this Section must continue participation while he or | 18 | | she remains a participant under this Article, and may not | 19 | | participate in the defined benefit package.
| 20 | | Participation in the self-managed plan under this Section | 21 | | shall constitute
participation in the System.
| 22 | | Notwithstanding any other provision
of this Article, a | 23 | | participant in the self-managed plan may not purchase or | 24 | | receive service
credit applicable to the defined benefit | 25 | | package
under this Article for any period during which the | 26 | | employee was a participant
in the self-managed plan established |
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| 1 | | under this Section.
| 2 | | A participant under this Section shall be entitled to the | 3 | | benefits of
Article 20 of this Code.
| 4 | | (f) If, at the time a participant
begins to participate in | 5 | | the self-managed plan, the participant has rights and credits
| 6 | | in the System due to previous participation in the defined | 7 | | benefit package,
the System shall establish for the participant | 8 | | an opening account balance in the
self-managed plan, equal to | 9 | | (1) the amount of the refund that the participant
would be | 10 | | eligible to receive if the participant terminated
employment on | 11 | | that date and elected a refund and (2) an amount, representing | 12 | | employer contributions, equal to the amount of employee | 13 | | contributions, plus interest. The interest used in this | 14 | | subsection (f) shall be calculated using the actual annual | 15 | | rates of return that the System has earned during the time | 16 | | period corresponding to the actual investment of the | 17 | | contributions being transferred. The System shall transfer | 18 | | assets to the self-managed plan as a tax-free transfer in
| 19 | | accordance with Internal Revenue Service guidelines, for | 20 | | purposes of funding
the participant's opening account balance.
| 21 | | (g) A participant in the self-managed plan is covered by | 22 | | the disability
benefits of the System. An amount of employer | 23 | | contribution, not exceeding 1% of the participating
employee's | 24 | | salary, shall be used for the purpose of providing the | 25 | | disability
benefits of the System to the participant. Prior to | 26 | | the beginning of each plan
year under the self-managed plan, |
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| 1 | | the Board of Trustees shall determine, as a
percentage of | 2 | | salary, the amount of employer contributions to be allocated
| 3 | | during that plan year for providing disability benefits for | 4 | | employees in the
self-managed plan. | 5 | | (h) The self-managed plan shall be funded by contributions
| 6 | | from participants in the self-managed plan and employer
| 7 | | contributions as provided in this Section.
| 8 | | The contribution rate for participants in the self-managed | 9 | | plan
under this Section shall be equal to the member | 10 | | contribution rate for other
participants in the System, as | 11 | | provided in Section 14-133. This required
contribution shall be | 12 | | made as an employer pick-up under Section 414(h) of the
| 13 | | Internal Revenue Code of 1986 or any successor Section thereof. | 14 | | Any participant in the System's defined benefit package before | 15 | | his or her
election to participate in the self-managed plan | 16 | | shall continue to have the
employer pick up the contributions | 17 | | required under Section 14-133. However, the
amounts picked up | 18 | | after beginning participation in the self-managed plan shall be | 19 | | remitted
to and treated as assets of the self-managed plan. In | 20 | | no event shall a participant have the option of receiving these | 21 | | amounts in cash. Participants may make
additional | 22 | | contributions to the
self-managed plan in accordance with | 23 | | procedures prescribed by the System, to
the extent permitted | 24 | | under rules adopted by the System.
| 25 | | The plan shall provide for employer contributions to be | 26 | | credited to each self-managed plan participant
in an amount |
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| 1 | | equal to the employee contributions, less the amount used by
| 2 | | the System to provide disability benefits for the employee.
The | 3 | | amounts so credited
shall be paid into the participant's | 4 | | self-managed plan accounts in a manner
to be prescribed by the | 5 | | System.
| 6 | | Employer contributions for participants in
the | 7 | | self-managed plan shall be paid to the System by the State and | 8 | | shall be included in the calculation of required State | 9 | | contributions under Section 14-131. The System shall not be | 10 | | obligated to remit the
required employer contributions to any | 11 | | of the insurance and annuity
companies, mutual fund
companies, | 12 | | banks, trust companies, financial institutions, or other | 13 | | sponsors
of any of the funding vehicles offered under the | 14 | | self-managed plan
until it has received the required employer | 15 | | contributions from the State.
| 16 | | (i) A participant in the
self-managed plan becomes vested | 17 | | in the employer contributions credited to his
or her accounts | 18 | | in the self-managed plan on the earliest to occur of the
| 19 | | following: (1) attainment of 5 years of service credit; (2) the | 20 | | death of the participating member while employed under this | 21 | | Article, if the member has completed at
least 1.5 years of | 22 | | service; or (3) the member's election to retire and
apply the | 23 | | reciprocal provisions of Article 20 of this Code.
| 24 | | A participant in the self-managed plan who receives a | 25 | | distribution of his or
her vested amounts from the self-managed | 26 | | plan
while not yet eligible for retirement under this Article
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| 1 | | (and Article 20, if applicable) shall forfeit all service | 2 | | credit
and accrued rights in the System; if he or she | 3 | | subsequently becomes a participant under this Article again, he | 4 | | or she
shall be considered a new
participant. If a former | 5 | | participant again becomes a participant (or
becomes employed by | 6 | | a participating system under Article 20 of this Code) and
| 7 | | continues as such for at least 2 years, all rights, service | 8 | | credits, and
previous status as a participant shall be restored | 9 | | upon repayment of the amount
of the distribution, with interest | 10 | | at the actuarially assumed rate from the date of distribution | 11 | | to the date of payment.
| 12 | | (j) If a participant in the self-managed plan who is vested | 13 | | in employer
contributions terminates employment, the | 14 | | participant shall be entitled to a
benefit that is based on the
| 15 | | account values attributable to both employer and
employee | 16 | | contributions and any
investment return thereon.
| 17 | | If a participant in the self-managed plan who is not vested | 18 | | in employer contributions terminates
employment, the | 19 | | participant shall be entitled to a benefit based solely on the
| 20 | | account values attributable to the participant's contributions | 21 | | and any investment
return thereon, and the employer | 22 | | contributions and any investment return
thereon shall be | 23 | | forfeited. Any employer contributions that are forfeited
shall | 24 | | be held in escrow by the
company investing those contributions | 25 | | and shall be used, as directed by the
System, for future | 26 | | allocations of employer contributions or for the restoration
of |
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| 1 | | amounts previously forfeited.
| 2 | | (40 ILCS 5/14-130.6 new)
| 3 | | Sec. 14-130.6. Election to participate in the self-managed | 4 | | plan. | 5 | | (a) For the purposes of this Section and Section 14-130.5: | 6 | | "Eligible participant" means either a currently eligible | 7 | | participant or a newly eligible
participant of the System. | 8 | | "Currently eligible participant"
means a person who is a | 9 | | participant under this Article before the day on which the | 10 | | System first offers the
self-managed plan as an alternative to | 11 | | the defined benefit package. | 12 | | "Newly
eligible participant" means a person who first | 13 | | becomes a participant
under this Article on or after the date | 14 | | on which the System first offers the self-managed plan as an | 15 | | alternative to the defined benefit package.
| 16 | | (b) Each eligible participant shall be
given an opportunity | 17 | | to elect to
participate in the self-managed plan rather than | 18 | | the defined benefit package. An election to participate in the | 19 | | self-managed plan applies to all periods of employment under | 20 | | this System, including employment occurring on,
before, and | 21 | | after the effective date of the participant's election. An | 22 | | eligible participant who does not make an election under this | 23 | | Section shall, by default,
participate in the defined benefit | 24 | | package. | 25 | | An election to participate in the self-managed plan is |
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| 1 | | irrevocable. If an eligible participant who participates in the | 2 | | defined benefit package terminates employment under this | 3 | | Article, then the participant, upon his or her subsequent
| 4 | | re-employment under this Article, may make an election under | 5 | | this Section. | 6 | | (c) The election must be made in writing, in the
manner | 7 | | prescribed by the System, and within the required time period. | 8 | | A currently eligible participant may make the election within | 9 | | one year
after the day on which the System first offers the
| 10 | | self-managed plan. A newly eligible participant may make the | 11 | | election within 60 days after first becoming a participant | 12 | | under this Article. An eligible participant who terminates | 13 | | employment under this Article without having made an election | 14 | | to participate in the self-managed plan and later returns to | 15 | | employment under this Article may make the election within 60 | 16 | | days after returning to employment under this Article.
| 17 | | (d) If an eligible participant elects to participate in the | 18 | | self-managed plan, the System shall fund his or her account as | 19 | | stated in subsection (f) of Section 14-130.5.
| 20 | | (e) An eligible participant shall be provided with written | 21 | | information prepared
or prescribed by the System that describes | 22 | | the participant's retirement program
choices. The eligible | 23 | | participant shall be offered an opportunity to
receive | 24 | | counseling from the System before making his or her election. | 25 | | This
counseling may consist of videotaped materials, group | 26 | | presentations, individual
consultation with an employee or |
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| 1 | | authorized representative of the System in
person or by | 2 | | telephone or other electronic means, or any combination of | 3 | | these
methods.
| 4 | | (40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
| 5 | | Sec. 14-133. Contributions on behalf of members.
| 6 | | (a) Each participating employee shall make contributions | 7 | | to the System,
based on the employee's compensation, as | 8 | | follows:
| 9 | | (1) Covered employees, except as indicated below, 3.5% | 10 | | for
retirement annuity, and 0.5% for a widow or survivors
| 11 | | annuity;
| 12 | | (2) Noncovered employees, except as indicated below, | 13 | | 7% for retirement
annuity and 1% for a widow or survivors | 14 | | annuity;
| 15 | | (3) Noncovered employees serving in a position in which | 16 | | "eligible
creditable service" as defined in Section 14-110 | 17 | | may be earned, 1% for a widow
or survivors annuity
plus the | 18 | | following amount for retirement annuity: 8.5% through | 19 | | December 31,
2001; 9.5% in 2002; 10.5% in 2003; and 11.5% | 20 | | in 2004 and thereafter;
| 21 | | (4) Covered employees serving in a position in which | 22 | | "eligible creditable
service" as defined in Section 14-110 | 23 | | may be earned, 0.5% for a widow or survivors annuity
plus | 24 | | the following amount for retirement annuity: 5% through | 25 | | December 31,
2001; 6% in 2002; 7% in 2003; and 8% in 2004 |
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| 1 | | and thereafter;
| 2 | | (5) Each security employee of the Department of | 3 | | Corrections
or of the Department of Human Services who is a | 4 | | covered employee, 0.5% for a widow or survivors annuity
| 5 | | plus the following amount for retirement annuity: 5% | 6 | | through December 31,
2001; 6% in 2002; 7% in 2003; and 8% | 7 | | in 2004 and thereafter;
| 8 | | (6) Each security employee of the Department of | 9 | | Corrections
or of the Department of Human Services who is | 10 | | not a covered employee, 1% for a widow or survivors annuity
| 11 | | plus the following amount for retirement annuity: 8.5% | 12 | | through December 31,
2001; 9.5% in 2002; 10.5% in 2003; and | 13 | | 11.5% in 2004 and thereafter.
| 14 | | (a-5) In the case of an employee who participates in the | 15 | | self-managed plan under Section 14-130.5, the contributions | 16 | | required under this Section shall instead be used to finance | 17 | | the benefits available under the self-managed plan. | 18 | | (b) Contributions shall be in the form of a deduction from
| 19 | | compensation and shall be made notwithstanding that the | 20 | | compensation
paid in cash to the employee shall be reduced | 21 | | thereby below the minimum
prescribed by law or regulation. Each | 22 | | member is deemed to consent and
agree to the deductions from | 23 | | compensation provided for in this Article,
and shall receipt in | 24 | | full for salary or compensation.
| 25 | | (Source: P.A. 92-14, eff. 6-28-01.)
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| 1 | | (40 ILCS 5/14-152.1)
| 2 | | Sec. 14-152.1. Application and expiration of new benefit | 3 | | increases. | 4 | | (a) As used in this Section, "new benefit increase" means | 5 | | an increase in the amount of any benefit provided under this | 6 | | Article, or an expansion of the conditions of eligibility for | 7 | | any benefit under this Article, that results from an amendment | 8 | | to this Code that takes effect after June 1, 2005 (the | 9 | | effective date of Public Act 94-4). "New benefit increase", | 10 | | however, does not include any benefit increase resulting from | 11 | | the changes made to this Article by Public Act 96-37 or by this | 12 | | amendatory Act of the 98th 96th General Assembly.
| 13 | | (b) Notwithstanding any other provision of this Code or any | 14 | | subsequent amendment to this Code, every new benefit increase | 15 | | is subject to this Section and shall be deemed to be granted | 16 | | only in conformance with and contingent upon compliance with | 17 | | the provisions of this Section.
| 18 | | (c) The Public Act enacting a new benefit increase must | 19 | | identify and provide for payment to the System of additional | 20 | | funding at least sufficient to fund the resulting annual | 21 | | increase in cost to the System as it accrues. | 22 | | Every new benefit increase is contingent upon the General | 23 | | Assembly providing the additional funding required under this | 24 | | subsection. The Commission on Government Forecasting and | 25 | | Accountability shall analyze whether adequate additional | 26 | | funding has been provided for the new benefit increase and |
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| 1 | | shall report its analysis to the Public Pension Division of the | 2 | | Department of Financial and Professional Regulation. A new | 3 | | benefit increase created by a Public Act that does not include | 4 | | the additional funding required under this subsection is null | 5 | | and void. If the Public Pension Division determines that the | 6 | | additional funding provided for a new benefit increase under | 7 | | this subsection is or has become inadequate, it may so certify | 8 | | to the Governor and the State Comptroller and, in the absence | 9 | | of corrective action by the General Assembly, the new benefit | 10 | | increase shall expire at the end of the fiscal year in which | 11 | | the certification is made.
| 12 | | (d) Every new benefit increase shall expire 5 years after | 13 | | its effective date or on such earlier date as may be specified | 14 | | in the language enacting the new benefit increase or provided | 15 | | under subsection (c). This does not prevent the General | 16 | | Assembly from extending or re-creating a new benefit increase | 17 | | by law. | 18 | | (e) Except as otherwise provided in the language creating | 19 | | the new benefit increase, a new benefit increase that expires | 20 | | under this Section continues to apply to persons who applied | 21 | | and qualified for the affected benefit while the new benefit | 22 | | increase was in effect and to the affected beneficiaries and | 23 | | alternate payees of such persons, but does not apply to any | 24 | | other person, including without limitation a person who | 25 | | continues in service after the expiration date and did not | 26 | | apply and qualify for the affected benefit while the new |
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| 1 | | benefit increase was in effect.
| 2 | | (Source: P.A. 96-37, eff. 7-13-09.) | 3 | | (40 ILCS 5/16-115.1 new) | 4 | | Sec. 16-115.1. Defined benefit package. | 5 | | "Defined benefit package" means either the traditional | 6 | | benefit package or the reformed benefit package, whichever | 7 | | would apply to an employee if he or she does not participate in | 8 | | the self-managed plan. | 9 | | "Traditional benefit
package" means the benefits provided | 10 | | under this Article, other than the self-managed plan, without | 11 | | modification by Section 1-160 of this Code. | 12 | | "Reformed benefit
package" means the traditional benefit | 13 | | package as modified by Section 1-160 of this Code for certain | 14 | | persons who first become participants of the System on or after | 15 | | January 1, 2011. | 16 | | (40 ILCS 5/16-115.2 new) | 17 | | Sec. 16-115.2. Self-managed plan. "Self-managed plan" | 18 | | means the defined
contribution retirement program maintained | 19 | | by the System and established under
Section 16-151.5. The | 20 | | self-managed plan includes disability benefits, but does not
| 21 | | include any other annuity or refund payable directly by the | 22 | | System under the defined benefit package. | 23 | | (40 ILCS 5/16-151.5 new)
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| 1 | | Sec. 16-151.5. Self-managed plan. | 2 | | (a) The General Assembly finds that the System should | 3 | | provide a defined contribution
(self-managed) plan for | 4 | | eligible participants.
Accordingly, the System is hereby | 5 | | directed to
establish and administer a self-managed plan, which | 6 | | shall offer participants the opportunity to accumulate assets | 7 | | for retirement through a
combination of participant and | 8 | | employer contributions that may be invested in
mutual funds, | 9 | | collective investment funds, or other investment products and
| 10 | | used to purchase annuity contracts that are fixed, variable, or | 11 | | a combination of fixed and variable. The plan must be qualified | 12 | | under the Internal Revenue Code of 1986. | 13 | | (b) The Board shall
make the self-managed plan established | 14 | | under this Section available to eligible participants under | 15 | | this Article within 6 months after the effective date of this | 16 | | amendatory Act of the 98th General Assembly. The adoption of | 17 | | the self-managed
plan makes available to eligible participants | 18 | | under this Article the election
described in Section 16-151.6.
| 19 | | The System shall be the plan sponsor for the
self-managed | 20 | | plan and shall prepare a plan document and adopt any rules
and | 21 | | procedures that are considered necessary or desirable for the | 22 | | administration
of the self-managed plan. Consistent with its | 23 | | fiduciary duty to the
participants and beneficiaries of the | 24 | | self-managed plan, the Board of Trustees
of the System may | 25 | | delegate aspects of plan administration as it sees fit to
| 26 | | companies authorized to do business in this State.
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| 1 | | (c) The System shall solicit proposals to provide
| 2 | | administrative services and funding vehicles for the | 3 | | self-managed plan from
insurance and annuity companies, mutual | 4 | | fund companies, banks, trust
companies, or other financial | 5 | | institutions authorized to do business in this
State. In | 6 | | reviewing the proposals received and approving and contracting | 7 | | with
no fewer than 2 and no more than 7 companies, the Board of | 8 | | Trustees of the System shall
consider, among other things, the | 9 | | following criteria:
| 10 | | (1) the nature and extent of the benefits that would be | 11 | | provided
to the participants;
| 12 | | (2) the reasonableness of the benefits in relation to | 13 | | the premium
charged;
| 14 | | (3) the suitability of the benefits to the needs and
| 15 | | interests of the participants and the employers; and | 16 | | (4) the ability of the company to provide benefits | 17 | | under the contract and
the financial stability of the | 18 | | company.
| 19 | | The System shall periodically review
each approved | 20 | | company. A company may continue to provide administrative
| 21 | | services and funding vehicles for the self-managed plan only so | 22 | | long as
it continues to be an approved company under contract | 23 | | with the Board.
| 24 | | In addition to the companies approved by the System under | 25 | | this subsection (c), the System may offer its participants an | 26 | | investment fund managed by the Illinois State Board of |
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| 1 | | Investment.
| 2 | | (d) Participants in the program
must be allowed to direct | 3 | | the transfer of their account balances among the
various | 4 | | investment options offered, subject to applicable contractual
| 5 | | provisions.
The participant shall not be deemed a fiduciary by | 6 | | reason of providing such
investment direction. A person who is | 7 | | a fiduciary shall not be liable for any
loss resulting from | 8 | | that investment direction and shall not be deemed to have
| 9 | | breached any fiduciary duty by acting in accordance with that | 10 | | direction.
Neither the System nor the State shall guarantee any | 11 | | of the investments in the
participant's account balances.
| 12 | | (e) In order to participate in the
self-managed plan, an | 13 | | eligible participant, as defined in Section 7-140.5, must make | 14 | | a written election in accordance with the
provisions of that | 15 | | Section and the procedures established by the System.
| 16 | | Participation in the self-managed plan shall begin
on the first | 17 | | day of the month immediately following the month in which the
| 18 | | participant's election is filed with the System, but not sooner | 19 | | than the effective date of
the self-managed
plan. A person's | 20 | | participation in the defined benefit package under this Article | 21 | | shall terminate on the date that
participation in the | 22 | | self-managed plan begins.
| 23 | | A person who has elected to participate in the self-managed | 24 | | plan under
this Section must continue participation while he or | 25 | | she remains a participant under this Article, and may not | 26 | | participate in the defined benefit package.
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| 1 | | Participation in the self-managed plan under this Section | 2 | | shall constitute
participation in the System.
| 3 | | Notwithstanding any other provision
of this Article, a | 4 | | participant in the self-managed plan may not purchase or | 5 | | receive service
credit applicable to the defined benefit | 6 | | package
under this Article for any period during which the | 7 | | employee was a participant
in the self-managed plan established | 8 | | under this Section.
| 9 | | A participant under this Section shall be entitled to the | 10 | | benefits of
Article 20 of this Code.
| 11 | | (f) If, at the time a participant
begins to participate in | 12 | | the self-managed plan, the participant has rights and credits
| 13 | | in the System due to previous participation in the defined | 14 | | benefit package,
the System shall establish for the participant | 15 | | an opening account balance in the
self-managed plan, equal to | 16 | | (1) the amount of the refund that the participant
would be | 17 | | eligible to receive if the participant terminated
employment on | 18 | | that date and elected a refund and (2) an amount, representing | 19 | | employer contributions, equal to the amount of employee | 20 | | contributions, plus interest. The interest used in this | 21 | | subsection (f) shall be calculated using the actual annual | 22 | | rates of return that the System has earned during the time | 23 | | period corresponding to the actual investment of the | 24 | | contributions being transferred. The System shall transfer | 25 | | assets to the self-managed plan as a tax-free transfer in
| 26 | | accordance with Internal Revenue Service guidelines, for |
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| 1 | | purposes of funding
the participant's opening account balance.
| 2 | | (g) A participant in the self-managed plan is covered by | 3 | | the disability
benefits of the System. An amount of employer | 4 | | contribution, not exceeding 1% of the participating
employee's | 5 | | salary, shall be used for the purpose of providing the | 6 | | disability
benefits of the System to the participant. Prior to | 7 | | the beginning of each plan
year under the self-managed plan, | 8 | | the Board of Trustees shall determine, as a
percentage of | 9 | | salary, the amount of employer contributions to be allocated
| 10 | | during that plan year for providing disability benefits for | 11 | | employees in the
self-managed plan. | 12 | | (h) The self-managed plan shall be funded by contributions
| 13 | | from participants in the self-managed plan and employer
| 14 | | contributions as provided in this Section.
| 15 | | The contribution rate for participants in the self-managed | 16 | | plan
under this Section shall be equal to the member | 17 | | contribution rate for other
participants in the System, as | 18 | | provided in Section 16-152. This required
contribution shall be | 19 | | made as an employer pick-up under Section 414(h) of the
| 20 | | Internal Revenue Code of 1986 or any successor Section thereof. | 21 | | Any participant in the System's defined benefit package before | 22 | | his or her
election to participate in the self-managed plan | 23 | | shall continue to have the
employer pick up the contributions | 24 | | required under Section 16-158. However, the
amounts picked up | 25 | | after beginning participation in the self-managed plan shall be | 26 | | remitted
to and treated as assets of the self-managed plan. In |
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| 1 | | no event shall a participant have the option of receiving these | 2 | | amounts in cash. Participants may make
additional | 3 | | contributions to the
self-managed plan in accordance with | 4 | | procedures prescribed by the System, to
the extent permitted | 5 | | under rules adopted by the System.
| 6 | | The plan shall provide for employer contributions to be | 7 | | credited to each self-managed plan participant
in an amount | 8 | | equal to the employee contributions, less the amount used by
| 9 | | the System to provide disability benefits for the employee.
The | 10 | | amounts so credited
shall be paid into the participant's | 11 | | self-managed plan accounts in a manner
to be prescribed by the | 12 | | System.
| 13 | | Employer contributions for participants in
the | 14 | | self-managed plan shall be paid to the System by the State and | 15 | | shall be included in the calculation of required State | 16 | | contributions under Section 16-158. The System shall not be | 17 | | obligated to remit the
required employer contributions to any | 18 | | of the insurance and annuity
companies, mutual fund
companies, | 19 | | banks, trust companies, financial institutions, or other | 20 | | sponsors
of any of the funding vehicles offered under the | 21 | | self-managed plan
until it has received the required employer | 22 | | contributions from the State.
| 23 | | (i) A participant in the
self-managed plan becomes vested | 24 | | in the employer contributions credited to his
or her accounts | 25 | | in the self-managed plan on the earliest to occur of the
| 26 | | following: (1) attainment of 5 years of service credit; (2) the |
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| 1 | | death of the participating member while employed under this | 2 | | Article, if the member has completed at
least 1.5 years of | 3 | | service; or (3) the member's election to retire and
apply the | 4 | | reciprocal provisions of Article 20 of this Code.
| 5 | | A participant in the self-managed plan who receives a | 6 | | distribution of his or
her vested amounts from the self-managed | 7 | | plan
while not yet eligible for retirement under this Article
| 8 | | (and Article 20, if applicable) shall forfeit all service | 9 | | credit
and accrued rights in the System; if he or she | 10 | | subsequently becomes a participant under this Article again, he | 11 | | or she
shall be considered a new
participant. If a former | 12 | | participant again becomes a participant (or
becomes employed by | 13 | | a participating system under Article 20 of this Code) and
| 14 | | continues as such for at least 2 years, all rights, service | 15 | | credits, and
previous status as a participant shall be restored | 16 | | upon repayment of the amount
of the distribution, with interest | 17 | | at the actuarially assumed rate from the date of distribution | 18 | | to the date of payment.
| 19 | | (j) If a participant in the self-managed plan who is vested | 20 | | in employer
contributions terminates employment, the | 21 | | participant shall be entitled to a
benefit that is based on the
| 22 | | account values attributable to both employer and
employee | 23 | | contributions and any
investment return thereon.
| 24 | | If a participant in the self-managed plan who is not vested | 25 | | in employer contributions terminates
employment, the | 26 | | participant shall be entitled to a benefit based solely on the
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| 1 | | account values attributable to the participant's contributions | 2 | | and any investment
return thereon, and the employer | 3 | | contributions and any investment return
thereon shall be | 4 | | forfeited. Any employer contributions that are forfeited
shall | 5 | | be held in escrow by the
company investing those contributions | 6 | | and shall be used, as directed by the
System, for future | 7 | | allocations of employer contributions or for the restoration
of | 8 | | amounts previously forfeited.
| 9 | | (40 ILCS 5/16-151.6 new)
| 10 | | Sec. 16-151.6. Election to participate in the self-managed | 11 | | plan. | 12 | | (a) For the purposes of this Section and Section 16-151.5: | 13 | | "Eligible participant" means either a currently eligible | 14 | | participant or a newly eligible
participant of the System. | 15 | | "Currently eligible participant"
means a person who is a | 16 | | participant under this Article before the day on which the | 17 | | System first offers the
self-managed plan as an alternative to | 18 | | the defined benefit package. | 19 | | "Newly
eligible participant" means a person who first | 20 | | becomes a participant
under this Article on or after the date | 21 | | on which the System first offers the self-managed plan as an | 22 | | alternative to the defined benefit package.
| 23 | | (b) Each eligible participant shall be
given an opportunity | 24 | | to elect to
participate in the self-managed plan rather than | 25 | | the defined benefit package. An election to participate in the |
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| 1 | | self-managed plan applies to all periods of employment under | 2 | | this System, including employment occurring on,
before, and | 3 | | after the effective date of the participant's election. An | 4 | | eligible participant who does not make an election under this | 5 | | Section shall, by default,
participate in the defined benefit | 6 | | package. | 7 | | An election to participate in the self-managed plan is | 8 | | irrevocable. If an eligible participant who participates in the | 9 | | defined benefit package terminates employment under this | 10 | | Article, then the participant, upon his or her subsequent
| 11 | | re-employment under this Article, may make an election under | 12 | | this Section. | 13 | | (c) The election must be made in writing, in the
manner | 14 | | prescribed by the System, and within the required time period. | 15 | | A currently eligible participant may make the election within | 16 | | one year
after the day on which the System first offers the
| 17 | | self-managed plan. A newly eligible participant may make the | 18 | | election within 60 days after first becoming a participant | 19 | | under this Article. An eligible participant who terminates | 20 | | employment under this Article without having made an election | 21 | | to participate in the self-managed plan and later returns to | 22 | | employment under this Article may make the election within 60 | 23 | | days after returning to employment under this Article.
| 24 | | (d) If an eligible participant elects to participate in the | 25 | | self-managed plan, the System shall fund his or her account as | 26 | | stated in subsection (f) of Section 16-151.5.
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| 1 | | (e) An eligible participant shall be provided with written | 2 | | information prepared
or prescribed by the System that describes | 3 | | the participant's retirement program
choices. The eligible | 4 | | participant shall be offered an opportunity to
receive | 5 | | counseling from the System before making his or her election. | 6 | | This
counseling may consist of videotaped materials, group | 7 | | presentations, individual
consultation with an employee or | 8 | | authorized representative of the System in
person or by | 9 | | telephone or other electronic means, or any combination of | 10 | | these
methods.
| 11 | | (40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
| 12 | | Sec. 16-152. Contributions by members.
| 13 | | (a) Each member shall make contributions for membership | 14 | | service to this
System as follows:
| 15 | | (1) Effective July 1, 1998, contributions of 7.50% of | 16 | | salary towards the
cost of the retirement annuity. Such | 17 | | contributions shall be deemed "normal
contributions".
| 18 | | (2) Effective July 1, 1969, contributions of 1/2 of 1% | 19 | | of salary toward
the cost of the automatic annual increase | 20 | | in retirement annuity provided
under Section 16-133.1.
| 21 | | (3) Effective July 24, 1959, contributions of 1% of | 22 | | salary towards the
cost of survivor benefits. Such | 23 | | contributions shall not be credited to
the individual | 24 | | account of the member and shall not be subject to refund
| 25 | | except as provided under Section 16-143.2.
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| 1 | | (4) Effective July 1, 2005, contributions of 0.40% of | 2 | | salary toward the cost of the early retirement without | 3 | | discount option provided under Section 16-133.2. This | 4 | | contribution shall cease upon termination of the early | 5 | | retirement without discount option as provided in Section | 6 | | 16-176.
| 7 | | (b) The minimum required contribution for any year of | 8 | | full-time
teaching service shall be $192.
| 9 | | (c) Contributions shall not be required of any annuitant | 10 | | receiving
a retirement annuity who is given employment as | 11 | | permitted under Section 16-118 or 16-150.1.
| 12 | | (d) A person who (i) was a member before July 1, 1998, (ii) | 13 | | retires with
more than 34 years of creditable service, and | 14 | | (iii) does not elect to qualify
for the augmented rate under | 15 | | Section 16-129.1 shall be entitled, at the time
of retirement, | 16 | | to receive a partial refund of contributions made under this
| 17 | | Section for service occurring after the later of June 30, 1998 | 18 | | or attainment
of 34 years of creditable service, in an amount | 19 | | equal to 1.00% of the salary
upon which those contributions | 20 | | were based.
| 21 | | (e) A member's contributions toward the cost of early | 22 | | retirement without discount made under item (a)(4) of this | 23 | | Section shall not be refunded if the member has elected early | 24 | | retirement without discount under Section 16-133.2 and has | 25 | | begun to receive a retirement annuity under this Article | 26 | | calculated in accordance with that election. Otherwise, a |
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| 1 | | member's contributions toward the cost of early retirement | 2 | | without discount made under item (a)(4) of this Section shall | 3 | | be refunded according to whichever one of the following | 4 | | circumstances occurs first: | 5 | | (1) The contributions shall be refunded to the member, | 6 | | without interest, within 120 days after the member's | 7 | | retirement annuity commences, if the member does not elect | 8 | | early retirement without discount under Section 16-133.2. | 9 | | (2) The contributions shall be included, without | 10 | | interest, in any refund claimed by the member under Section | 11 | | 16-151. | 12 | | (3) The contributions shall be refunded to the member's | 13 | | designated beneficiary (or if there is no beneficiary, to | 14 | | the member's estate), without interest, if the member dies | 15 | | without having begun to receive a retirement annuity under | 16 | | this Article. | 17 | | (4) The contributions shall be refunded to the member, | 18 | | without interest, within 120 days after the early | 19 | | retirement without discount option provided under Section | 20 | | 16-133.2 is terminated under Section 16-176.
| 21 | | (f) In the case of a member who participates in the | 22 | | self-managed plan under Section 16-151.5, the contributions | 23 | | required under this Section shall instead be used to finance | 24 | | the benefits available under the self-managed plan. | 25 | | (Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
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| 1 | | (40 ILCS 5/16-203)
| 2 | | Sec. 16-203. Application and expiration of new benefit | 3 | | increases. | 4 | | (a) As used in this Section, "new benefit increase" means | 5 | | an increase in the amount of any benefit provided under this | 6 | | Article, or an expansion of the conditions of eligibility for | 7 | | any benefit under this Article, that results from an amendment | 8 | | to this Code that takes effect after June 1, 2005 (the | 9 | | effective date of Public Act 94-4). "New benefit increase", | 10 | | however, does not include any benefit increase resulting from | 11 | | the changes made to this Article by public Act 95-910 or by | 12 | | this amendatory Act of the 98th 95th General Assembly. | 13 | | (b) Notwithstanding any other provision of this Code or any | 14 | | subsequent amendment to this Code, every new benefit increase | 15 | | is subject to this Section and shall be deemed to be granted | 16 | | only in conformance with and contingent upon compliance with | 17 | | the provisions of this Section.
| 18 | | (c) The Public Act enacting a new benefit increase must | 19 | | identify and provide for payment to the System of additional | 20 | | funding at least sufficient to fund the resulting annual | 21 | | increase in cost to the System as it accrues. | 22 | | Every new benefit increase is contingent upon the General | 23 | | Assembly providing the additional funding required under this | 24 | | subsection. The Commission on Government Forecasting and | 25 | | Accountability shall analyze whether adequate additional | 26 | | funding has been provided for the new benefit increase and |
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| 1 | | shall report its analysis to the Public Pension Division of the | 2 | | Department of Financial and Professional Regulation. A new | 3 | | benefit increase created by a Public Act that does not include | 4 | | the additional funding required under this subsection is null | 5 | | and void. If the Public Pension Division determines that the | 6 | | additional funding provided for a new benefit increase under | 7 | | this subsection is or has become inadequate, it may so certify | 8 | | to the Governor and the State Comptroller and, in the absence | 9 | | of corrective action by the General Assembly, the new benefit | 10 | | increase shall expire at the end of the fiscal year in which | 11 | | the certification is made.
| 12 | | (d) Every new benefit increase shall expire 5 years after | 13 | | its effective date or on such earlier date as may be specified | 14 | | in the language enacting the new benefit increase or provided | 15 | | under subsection (c). This does not prevent the General | 16 | | Assembly from extending or re-creating a new benefit increase | 17 | | by law. | 18 | | (e) Except as otherwise provided in the language creating | 19 | | the new benefit increase, a new benefit increase that expires | 20 | | under this Section continues to apply to persons who applied | 21 | | and qualified for the affected benefit while the new benefit | 22 | | increase was in effect and to the affected beneficiaries and | 23 | | alternate payees of such persons, but does not apply to any | 24 | | other person, including without limitation a person who | 25 | | continues in service after the expiration date and did not | 26 | | apply and qualify for the affected benefit while the new |
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| 1 | | benefit increase was in effect.
| 2 | | (Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.) | 3 | | (40 ILCS 5/18-110.1 new) | 4 | | Sec. 18-110.1. Defined benefit package. | 5 | | "Defined benefit package" means either the traditional | 6 | | benefit package or the reformed benefit package, whichever | 7 | | would apply to a participant if he or she does not participate | 8 | | in the self-managed plan. | 9 | | "Traditional benefit
package" means the benefits provided | 10 | | under this Article, other than the self-managed plan, for | 11 | | persons who first became participants of the System before | 12 | | January 1, 2011. | 13 | | "Reformed benefit
package" means the traditional benefit | 14 | | package as modified for persons who first become participants | 15 | | of the System on or after January 1, 2011. | 16 | | (40 ILCS 5/18-110.2 new) | 17 | | Sec. 18-110.2. Self-managed plan. "Self-managed plan" | 18 | | means the defined
contribution retirement program maintained | 19 | | by the System and established under
Section 18-130.1. The | 20 | | self-managed plan includes disability benefits, but does not
| 21 | | include any other annuity or refund payable directly by the | 22 | | System under the defined benefit package. | 23 | | (40 ILCS 5/18-130.1 new)
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| 1 | | Sec. 18-130.1. Self-managed plan. | 2 | | (a) The General Assembly finds that the System should | 3 | | provide a defined contribution
(self-managed) plan for | 4 | | eligible participants.
Accordingly, the System is hereby | 5 | | directed to
establish and administer a self-managed plan, which | 6 | | shall offer participants the opportunity to accumulate assets | 7 | | for retirement through a
combination of participant and | 8 | | employer contributions that may be invested in
mutual funds, | 9 | | collective investment funds, or other investment products and
| 10 | | used to purchase annuity contracts that are fixed, variable, or | 11 | | a combination of fixed and variable. The plan must be qualified | 12 | | under the Internal Revenue Code of 1986. | 13 | | (b) The Board shall
make the self-managed plan established | 14 | | under this Section available to eligible participants under | 15 | | this Article within 6 months after the effective date of this | 16 | | amendatory Act of the 98th General Assembly. The adoption of | 17 | | the self-managed
plan makes available to eligible participants | 18 | | under this Article the election
described in Section 18-130.2.
| 19 | | The System shall be the plan sponsor for the
self-managed | 20 | | plan and shall prepare a plan document and adopt any rules
and | 21 | | procedures that are considered necessary or desirable for the | 22 | | administration
of the self-managed plan. Consistent with its | 23 | | fiduciary duty to the
participants and beneficiaries of the | 24 | | self-managed plan, the Board of Trustees
of the System may | 25 | | delegate aspects of plan administration as it sees fit to
| 26 | | companies authorized to do business in this State.
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| 1 | | (c) The System shall solicit proposals to provide
| 2 | | administrative services and funding vehicles for the | 3 | | self-managed plan from
insurance and annuity companies, mutual | 4 | | fund companies, banks, trust
companies, or other financial | 5 | | institutions authorized to do business in this
State. In | 6 | | reviewing the proposals received and approving and contracting | 7 | | with
no fewer than 2 and no more than 7 companies, the Board of | 8 | | Trustees of the System shall
consider, among other things, the | 9 | | following criteria:
| 10 | | (1) the nature and extent of the benefits that would be | 11 | | provided
to the participants;
| 12 | | (2) the reasonableness of the benefits in relation to | 13 | | the premium
charged;
| 14 | | (3) the suitability of the benefits to the needs and
| 15 | | interests of the participants and the employers; and | 16 | | (4) the ability of the company to provide benefits | 17 | | under the contract and
the financial stability of the | 18 | | company.
| 19 | | The System shall periodically review
each approved | 20 | | company. A company may continue to provide administrative
| 21 | | services and funding vehicles for the self-managed plan only so | 22 | | long as
it continues to be an approved company under contract | 23 | | with the Board.
| 24 | | In addition to the companies approved by the System under | 25 | | this subsection (c), the System may offer its participants an | 26 | | investment fund managed by the Illinois State Board of |
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| 1 | | Investment.
| 2 | | (d) Participants in the program
must be allowed to direct | 3 | | the transfer of their account balances among the
various | 4 | | investment options offered, subject to applicable contractual
| 5 | | provisions.
The participant shall not be deemed a fiduciary by | 6 | | reason of providing such
investment direction. A person who is | 7 | | a fiduciary shall not be liable for any
loss resulting from | 8 | | that investment direction and shall not be deemed to have
| 9 | | breached any fiduciary duty by acting in accordance with that | 10 | | direction.
Neither the System nor the State shall guarantee any | 11 | | of the investments in the
participant's account balances.
| 12 | | (e) In order to participate in the
self-managed plan, an | 13 | | eligible participant, as defined in Section 7-140.5, must make | 14 | | a written election in accordance with the
provisions of that | 15 | | Section and the procedures established by the System.
| 16 | | Participation in the self-managed plan shall begin
on the first | 17 | | day of the month immediately following the month in which the
| 18 | | participant's election is filed with the System, but not sooner | 19 | | than the effective date of
the self-managed
plan. A person's | 20 | | participation in the defined benefit package under this Article | 21 | | shall terminate on the date that
participation in the | 22 | | self-managed plan begins.
| 23 | | A person who has elected to participate in the self-managed | 24 | | plan under
this Section must continue participation while he or | 25 | | she remains a participant under this Article, and may not | 26 | | participate in the defined benefit package.
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| 1 | | Participation in the self-managed plan under this Section | 2 | | shall constitute
participation in the System.
| 3 | | Notwithstanding any other provision
of this Article, a | 4 | | participant in the self-managed plan may not purchase or | 5 | | receive service
credit applicable to the defined benefit | 6 | | package
under this Article for any period during which the | 7 | | employee was a participant
in the self-managed plan established | 8 | | under this Section.
| 9 | | A participant under this Section shall be entitled to the | 10 | | benefits of
Article 20 of this Code.
| 11 | | (f) If, at the time a participant
begins to participate in | 12 | | the self-managed plan, the participant has rights and credits
| 13 | | in the System due to previous participation in the defined | 14 | | benefit package,
the System shall establish for the participant | 15 | | an opening account balance in the
self-managed plan, equal to | 16 | | (1) the amount of the refund that the participant
would be | 17 | | eligible to receive if the participant terminated
employment on | 18 | | that date and elected a refund and (2) an amount, representing | 19 | | employer contributions, equal to the amount of employee | 20 | | contributions, plus interest. The interest used in this | 21 | | subsection (f) shall be calculated using the actual annual | 22 | | rates of return that the System has earned during the time | 23 | | period corresponding to the actual investment of the | 24 | | contributions being transferred. The System shall transfer | 25 | | assets to the self-managed plan as a tax-free transfer in
| 26 | | accordance with Internal Revenue Service guidelines, for |
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| 1 | | purposes of funding
the participant's opening account balance.
| 2 | | (g) A participant in the self-managed plan is covered by | 3 | | the disability
benefits of the System. An amount of employer | 4 | | contribution, not exceeding 1% of the participating
employee's | 5 | | salary, shall be used for the purpose of providing the | 6 | | disability
benefits of the System to the participant. Prior to | 7 | | the beginning of each plan
year under the self-managed plan, | 8 | | the Board of Trustees shall determine, as a
percentage of | 9 | | salary, the amount of employer contributions to be allocated
| 10 | | during that plan year for providing disability benefits for | 11 | | employees in the
self-managed plan. | 12 | | (h) The self-managed plan shall be funded by contributions
| 13 | | from participants in the self-managed plan and employer
| 14 | | contributions as provided in this Section.
| 15 | | The contribution rate for participants in the self-managed | 16 | | plan
under this Section shall be equal to the member | 17 | | contribution rate for other
participants in the System, as | 18 | | provided in Section 18-133. This required
contribution shall be | 19 | | made as an employer pick-up under Section 414(h) of the
| 20 | | Internal Revenue Code of 1986 or any successor Section thereof. | 21 | | Any participant in the System's defined benefit package before | 22 | | his or her
election to participate in the self-managed plan | 23 | | shall continue to have the
employer pick up the contributions | 24 | | required under Section 18-133. However, the
amounts picked up | 25 | | after beginning participation in the self-managed plan shall be | 26 | | remitted
to and treated as assets of the self-managed plan. In |
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| 1 | | no event shall a participant have the option of receiving these | 2 | | amounts in cash. Participants may make
additional | 3 | | contributions to the
self-managed plan in accordance with | 4 | | procedures prescribed by the System, to
the extent permitted | 5 | | under rules adopted by the System.
| 6 | | The plan shall provide for employer contributions to be | 7 | | credited to each self-managed plan participant
in an amount | 8 | | equal to the employee contributions, less the amount used by
| 9 | | the System to provide disability benefits for the employee.
The | 10 | | amounts so credited
shall be paid into the participant's | 11 | | self-managed plan accounts in a manner
to be prescribed by the | 12 | | System.
| 13 | | Employer contributions for participants in
the | 14 | | self-managed plan shall be paid to the System by the State and | 15 | | shall be included in the calculation of required State | 16 | | contributions under Section 18-131. The System shall not be | 17 | | obligated to remit the
required employer contributions to any | 18 | | of the insurance and annuity
companies, mutual fund
companies, | 19 | | banks, trust companies, financial institutions, or other | 20 | | sponsors
of any of the funding vehicles offered under the | 21 | | self-managed plan
until it has received the required employer | 22 | | contributions from the State.
| 23 | | (i) A participant in the
self-managed plan becomes vested | 24 | | in the employer contributions credited to his
or her accounts | 25 | | in the self-managed plan on the earliest to occur of the
| 26 | | following: (1) attainment of 5 years of service credit; (2) the |
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| 1 | | death of the participating member while employed under this | 2 | | Article, if the member has completed at
least 1.5 years of | 3 | | service; or (3) the member's election to retire and
apply the | 4 | | reciprocal provisions of Article 20 of this Code.
| 5 | | A participant in the self-managed plan who receives a | 6 | | distribution of his or
her vested amounts from the self-managed | 7 | | plan
while not yet eligible for retirement under this Article
| 8 | | (and Article 20, if applicable) shall forfeit all service | 9 | | credit
and accrued rights in the System; if he or she | 10 | | subsequently becomes a participant under this Article again, he | 11 | | or she
shall be considered a new
participant. If a former | 12 | | participant again becomes a participant (or
becomes employed by | 13 | | a participating system under Article 20 of this Code) and
| 14 | | continues as such for at least 2 years, all rights, service | 15 | | credits, and
previous status as a participant shall be restored | 16 | | upon repayment of the amount
of the distribution, with interest | 17 | | at the actuarially assumed rate from the date of distribution | 18 | | to the date of payment.
| 19 | | (j) If a participant in the self-managed plan who is vested | 20 | | in employer
contributions terminates employment, the | 21 | | participant shall be entitled to a
benefit that is based on the
| 22 | | account values attributable to both employer and
employee | 23 | | contributions and any
investment return thereon.
| 24 | | If a participant in the self-managed plan who is not vested | 25 | | in employer contributions terminates
employment, the | 26 | | participant shall be entitled to a benefit based solely on the
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| 1 | | account values attributable to the participant's contributions | 2 | | and any investment
return thereon, and the employer | 3 | | contributions and any investment return
thereon shall be | 4 | | forfeited. Any employer contributions that are forfeited
shall | 5 | | be held in escrow by the
company investing those contributions | 6 | | and shall be used, as directed by the
System, for future | 7 | | allocations of employer contributions or for the restoration
of | 8 | | amounts previously forfeited.
| 9 | | (40 ILCS 5/18-130.2 new)
| 10 | | Sec. 18-130.2. Election to participate in the self-managed | 11 | | plan. | 12 | | (a) For the purposes of this Section and Section 18-130.1: | 13 | | "Eligible participant" means either a currently eligible | 14 | | participant or a newly eligible
participant of the System. | 15 | | "Currently eligible participant"
means a person who is a | 16 | | participant under this Article before the day on which the | 17 | | System first offers the
self-managed plan as an alternative to | 18 | | the defined benefit package. | 19 | | "Newly
eligible participant" means a person who first | 20 | | becomes a participant
under this Article on or after the date | 21 | | on which the System first offers the self-managed plan as an | 22 | | alternative to the defined benefit package.
| 23 | | (b) Each eligible participant shall be
given an opportunity | 24 | | to elect to
participate in the self-managed plan rather than | 25 | | the defined benefit package. An election to participate in the |
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| 1 | | self-managed plan applies to all periods of employment under | 2 | | this System, including employment occurring on,
before, and | 3 | | after the effective date of the participant's election. An | 4 | | eligible participant who does not make an election under this | 5 | | Section shall, by default,
participate in the defined benefit | 6 | | package. | 7 | | An election to participate in the self-managed plan is | 8 | | irrevocable. If an eligible participant who participates in the | 9 | | defined benefit package terminates employment under this | 10 | | Article, then the participant, upon his or her subsequent
| 11 | | re-employment under this Article, may make an election under | 12 | | this Section. | 13 | | (c) The election must be made in writing, in the
manner | 14 | | prescribed by the System, and within the required time period. | 15 | | A currently eligible participant may make the election within | 16 | | one year
after the day on which the System first offers the
| 17 | | self-managed plan. A newly eligible participant may make the | 18 | | election within 60 days after first becoming a participant | 19 | | under this Article. An eligible participant who terminates | 20 | | employment under this Article without having made an election | 21 | | to participate in the self-managed plan and later returns to | 22 | | employment under this Article may make the election within 60 | 23 | | days after returning to employment under this Article.
| 24 | | (d) If an eligible participant elects to participate in the | 25 | | self-managed plan, the System shall fund his or her account as | 26 | | stated in subsection (f) of Section 18-130.1.
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| 1 | | (e) An eligible participant shall be provided with written | 2 | | information prepared
or prescribed by the System that describes | 3 | | the participant's retirement program
choices. The eligible | 4 | | participant shall be offered an opportunity to
receive | 5 | | counseling from the System before making his or her election. | 6 | | This
counseling may consist of videotaped materials, group | 7 | | presentations, individual
consultation with an employee or | 8 | | authorized representative of the System in
person or by | 9 | | telephone or other electronic means, or any combination of | 10 | | these
methods.
| 11 | | (40 ILCS 5/18-133) (from Ch. 108 1/2, par. 18-133)
| 12 | | Sec. 18-133. Financing; employee contributions.
| 13 | | (a) Effective July 1, 1967, each participant is required to | 14 | | contribute
7 1/2% of each payment of salary toward the | 15 | | retirement annuity. Such
contributions shall continue during | 16 | | the entire time the participant is in
service, with the | 17 | | following exceptions:
| 18 | | (1) Contributions for the retirement annuity are not | 19 | | required on salary
received after 18 years of service by | 20 | | persons who were participants before
January 2, 1954.
| 21 | | (2) A participant who continues to serve as a judge | 22 | | after becoming
eligible to receive the maximum rate of | 23 | | annuity may elect, through a written
direction filed with | 24 | | the Board, to discontinue contributing to the System.
Any | 25 | | such option elected by a judge shall be irrevocable unless |
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| 1 | | prior to
January 1, 2000, and while continuing to
serve as | 2 | | judge, the judge (A) files with the Board a letter | 3 | | cancelling the
direction to discontinue contributing to | 4 | | the System and requesting that such
contributing resume, | 5 | | and (B) pays into the System an amount equal to the total
| 6 | | of the discontinued contributions plus interest thereon at | 7 | | 5% per annum.
Service credits earned in any other | 8 | | "participating system" as defined in
Article 20 of this | 9 | | Code shall be considered for purposes of determining a
| 10 | | judge's eligibility to discontinue contributions under | 11 | | this subdivision
(a)(2).
| 12 | | (3) A participant who (i) has attained age 60, (ii) | 13 | | continues to serve
as a judge after becoming eligible to | 14 | | receive the maximum rate of annuity,
and (iii) has not | 15 | | elected to discontinue contributing to the System under
| 16 | | subdivision (a)(2) of this Section (or has revoked any such | 17 | | election) may
elect, through a written direction filed with | 18 | | the Board, to make contributions
to the System based only | 19 | | on the amount of the increases in salary received by
the | 20 | | judge on or after the date of the election, rather than the | 21 | | total salary
received. If a judge who is making | 22 | | contributions to the System on the
effective date of this | 23 | | amendatory Act of the 91st General Assembly makes an
| 24 | | election to limit contributions under this subdivision | 25 | | (a)(3) within 90 days
after that effective date, the | 26 | | election shall be deemed to become
effective on that |
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| 1 | | effective date and the judge shall be entitled to receive a
| 2 | | refund of any excess contributions paid to the System | 3 | | during that 90-day
period; any other election under this | 4 | | subdivision (a)(3) becomes effective
on the first of the | 5 | | month following the date of the election. An election to
| 6 | | limit contributions under this subdivision (a)(3) is | 7 | | irrevocable. Service
credits earned in any other | 8 | | participating system as defined in Article 20 of
this Code | 9 | | shall be considered for purposes of determining a judge's | 10 | | eligibility
to make an election under this subdivision | 11 | | (a)(3).
| 12 | | (b) Beginning July 1, 1969, each participant is required to | 13 | | contribute
1% of each payment of salary towards the automatic | 14 | | increase in annuity
provided in Section 18-125.1. However, such | 15 | | contributions need not be made
by any participant who has | 16 | | elected prior to September 15, 1969, not to be
subject to the | 17 | | automatic increase in annuity provisions.
| 18 | | (c) Effective July 13, 1953, each married participant | 19 | | subject to the
survivor's annuity provisions is required to | 20 | | contribute 2 1/2% of each
payment of salary, whether or not he | 21 | | or she is required to make any other
contributions under this | 22 | | Section. Such contributions shall be made
concurrently with the | 23 | | contributions made for annuity purposes.
| 24 | | (d) Notwithstanding any other provision of this Article, | 25 | | the required contributions for a participant who first becomes | 26 | | a participant on or after January 1, 2011 shall not exceed the |
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| 1 | | contributions that would be due under this Article if that | 2 | | participant's highest salary for annuity purposes were | 3 | | $106,800, plus any increase in that amount under Section | 4 | | 18-125. This subsection (d) does not apply to participants in | 5 | | the self-managed plan. | 6 | | (e) In the case of a participant who participates in the | 7 | | self-managed plan under Section 18-130.1, the contributions | 8 | | required under this Section shall instead be used to finance | 9 | | the benefits available under the self-managed plan. | 10 | | (Source: P.A. 96-1490, eff. 1-1-11.)
| 11 | | (40 ILCS 5/18-169)
| 12 | | Sec. 18-169. Application and expiration of new benefit | 13 | | increases. | 14 | | (a) As used in this Section, "new benefit increase" means | 15 | | an increase in the amount of any benefit provided under this | 16 | | Article, or an expansion of the conditions of eligibility for | 17 | | any benefit under this Article, that results from an amendment | 18 | | to this Code that takes effect after the effective date of this | 19 | | amendatory Act of the 94th General Assembly. "New benefit | 20 | | increase", however, does not include any benefit increase | 21 | | resulting from the changes made to this Article by this | 22 | | amendatory Act of the 98th General Assembly. | 23 | | (b) Notwithstanding any other provision of this Code or any | 24 | | subsequent amendment to this Code, every new benefit increase | 25 | | is subject to this Section and shall be deemed to be granted |
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| 1 | | only in conformance with and contingent upon compliance with | 2 | | the provisions of this Section.
| 3 | | (c) The Public Act enacting a new benefit increase must | 4 | | identify and provide for payment to the System of additional | 5 | | funding at least sufficient to fund the resulting annual | 6 | | increase in cost to the System as it accrues. | 7 | | Every new benefit increase is contingent upon the General | 8 | | Assembly providing the additional funding required under this | 9 | | subsection. The Commission on Government Forecasting and | 10 | | Accountability shall analyze whether adequate additional | 11 | | funding has been provided for the new benefit increase and | 12 | | shall report its analysis to the Public Pension Division of the | 13 | | Department of Financial and Professional Regulation. A new | 14 | | benefit increase created by a Public Act that does not include | 15 | | the additional funding required under this subsection is null | 16 | | and void. If the Public Pension Division determines that the | 17 | | additional funding provided for a new benefit increase under | 18 | | this subsection is or has become inadequate, it may so certify | 19 | | to the Governor and the State Comptroller and, in the absence | 20 | | of corrective action by the General Assembly, the new benefit | 21 | | increase shall expire at the end of the fiscal year in which | 22 | | the certification is made.
| 23 | | (d) Every new benefit increase shall expire 5 years after | 24 | | its effective date or on such earlier date as may be specified | 25 | | in the language enacting the new benefit increase or provided | 26 | | under subsection (c). This does not prevent the General |
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| 1 | | Assembly from extending or re-creating a new benefit increase | 2 | | by law. | 3 | | (e) Except as otherwise provided in the language creating | 4 | | the new benefit increase, a new benefit increase that expires | 5 | | under this Section continues to apply to persons who applied | 6 | | and qualified for the affected benefit while the new benefit | 7 | | increase was in effect and to the affected beneficiaries and | 8 | | alternate payees of such persons, but does not apply to any | 9 | | other person, including without limitation a person who | 10 | | continues in service after the expiration date and did not | 11 | | apply and qualify for the affected benefit while the new | 12 | | benefit increase was in effect.
| 13 | | (Source: P.A. 94-4, eff. 6-1-05.)
| 14 | | (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
| 15 | | Sec. 20-121. Calculation of proportional retirement | 16 | | annuities. Upon
retirement of the employee, a proportional | 17 | | retirement annuity shall be computed
by each participating | 18 | | system in which pension credit has been established on
the | 19 | | basis of pension credits under each system. The computation | 20 | | shall be in
accordance with the formula or method prescribed by | 21 | | each participating system
which is in effect at the date of the | 22 | | employee's latest withdrawal from service
covered by any of the | 23 | | systems in which he has pension credits which he elects
to have | 24 | | considered under this Article. However, the amount of any | 25 | | retirement
annuity payable under the self-managed plan |
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| 1 | | established under Section 2-135.5, 14-130.5, 15-158.2 , | 2 | | 16-151.5, or 18-130.1
of this Code depends solely on the value | 3 | | of the participant's vested account
balances and is not subject | 4 | | to any proportional adjustment under this
Section.
| 5 | | Combined pension credit under all retirement systems | 6 | | subject to this
Article shall be considered in determining | 7 | | whether the minimum qualification
has been met and the formula | 8 | | or method of computation which shall be applied.
If a system | 9 | | has a step-rate formula for calculation of the retirement | 10 | | annuity,
pension credits covering previous service which have | 11 | | been established under
another system shall be considered in | 12 | | determining which range or ranges of
the step-rate formula are | 13 | | to be applicable to the employee.
| 14 | | Interest on pension credit shall continue to accumulate in | 15 | | accordance with
the provisions of the law governing the | 16 | | retirement system in which the same
has been established during | 17 | | the time an employee is in the service of another
employer, on | 18 | | the assumption such employee, for interest purposes for pension
| 19 | | credit, is continuing in the service covered by such retirement | 20 | | system.
| 21 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 22 | | (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
| 23 | | Sec. 20-123. Survivor's annuity. The provisions governing | 24 | | a retirement
annuity shall be applicable to a survivor's | 25 | | annuity. Appropriate credits shall
be established for |
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| 1 | | survivor's annuity purposes in those participating systems
| 2 | | which provide survivor's annuities, according to the same | 3 | | conditions and
subject to the same limitations and restrictions | 4 | | herein prescribed for a
retirement annuity. If a participating | 5 | | system has no survivor's annuity
benefit, or if the survivor's | 6 | | annuity benefit under that system is waived,
pension credit | 7 | | established in that system shall not be considered
in | 8 | | determining eligibility for or the amount of the survivor's | 9 | | annuity which
may be payable by any other participating system.
| 10 | | For persons who participate in a self-managed plan | 11 | | established under
Section 2-135.5, 14-130.5, 16-151.5, or | 12 | | 18-130.1, pension credit established under the Article | 13 | | governing that self-managed plan may be considered in
| 14 | | determining eligibility for or the amount of the survivor's | 15 | | annuity that is
payable by any other participating system, but | 16 | | pension credit established in
any other system shall not result | 17 | | in any right to a survivor's annuity under
the Article | 18 | | governing that self-managed. | 19 | | For persons who participate in the self-managed plan | 20 | | established under
Section 15-158.2 or the portable benefit | 21 | | package established under Section
15-136.4, pension credit | 22 | | established under Article 15 may be considered in
determining | 23 | | eligibility for or the amount of the survivor's annuity that is
| 24 | | payable by any other participating system, but pension credit | 25 | | established in
any other system shall not result in any right | 26 | | to a survivor's annuity under
the Article 15 system.
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| 1 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 2 | | (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
| 3 | | Sec. 20-124. Maximum benefits. | 4 | | (a) In no event shall the combined retirement
or survivors | 5 | | annuities exceed the highest annuity which would have been | 6 | | payable
by any participating system in which the employee has | 7 | | pension credits, if all
of his pension credits had been | 8 | | validated in that system.
| 9 | | If the combined annuities should exceed the highest maximum | 10 | | as determined
in accordance with this Section, the respective | 11 | | annuities shall be reduced
proportionately according to the | 12 | | ratio which the amount of each proportional
annuity bears to | 13 | | the aggregate of all such annuities.
| 14 | | (b) In the case of a participant in the self-managed plan | 15 | | established under
Section 2-135.5, 14-130.5, 16-151.5, or | 16 | | 18-130.1 of this Code to whom the provisions of this Article | 17 | | apply: | 18 | | (i) For purposes of calculating the combined | 19 | | retirement annuity and
the proportionate reduction, if | 20 | | any, in a retirement annuity other than one
payable under a | 21 | | self-managed plan, the amount of the retirement
annuity | 22 | | under the Article governing the self-managed plan shall be | 23 | | deemed to be the highest annuity to which the annuitant | 24 | | would
have been entitled if he or she had participated in | 25 | | the defined benefit package instead of in the self-managed |
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| 1 | | plan. | 2 | | (ii) For purposes of calculating the combined | 3 | | survivor's annuity and
the proportionate reduction, if | 4 | | any, in a survivor's annuity other than one
payable under a | 5 | | self-managed plan, the amount of the survivor's
annuity | 6 | | under the Article governing the self-managed plan shall be | 7 | | deemed to be the highest survivor's annuity to which the
| 8 | | survivor would have been entitled if the deceased person | 9 | | had participated in the defined benefit package instead of | 10 | | in the self-managed plan. | 11 | | (iii) Benefits payable under the self-managed plan are | 12 | | not subject to
proportionate reduction under this Section. | 13 | | (c) In the case of a participant in the self-managed plan | 14 | | established under
Section 15-158.2 of this Code to whom the | 15 | | provisions of this Article apply:
| 16 | | (i) For purposes of calculating the combined | 17 | | retirement annuity and
the proportionate reduction, if | 18 | | any, in a retirement annuity other than one
payable under | 19 | | the self-managed plan, the amount of the Article 15 | 20 | | retirement
annuity shall be deemed to be the highest | 21 | | annuity to which the annuitant would
have been entitled if | 22 | | he or she had participated in the traditional benefit
| 23 | | package as defined in Section 15-103.1 rather than the | 24 | | self-managed plan.
| 25 | | (ii) For purposes of calculating the combined | 26 | | survivor's annuity and
the proportionate reduction, if |
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| 1 | | any, in a survivor's annuity other than one
payable under | 2 | | the self-managed plan, the amount of the Article 15 | 3 | | survivor's
annuity shall be deemed to be the highest | 4 | | survivor's annuity to which the
survivor would have been | 5 | | entitled if the deceased employee had participated in
the | 6 | | traditional benefit package as defined in Section 15-103.1 | 7 | | rather than the
self-managed plan.
| 8 | | (iii) Benefits payable under the self-managed plan are | 9 | | not subject to
proportionate reduction under this Section.
| 10 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 11 | | Section 99. Effective date. This Act takes effect upon | 12 | | becoming law.".
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