Full Text of HB3066 98th General Assembly
HB3066ham001 98TH GENERAL ASSEMBLY | Rep. Mike Fortner Filed: 3/19/2013
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| 1 | | AMENDMENT TO HOUSE BILL 3066
| 2 | | AMENDMENT NO. ______. Amend House Bill 3066 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 3. The Budget Stabilization Act is amended by | 5 | | changing Sections 20 and 25 as follows: | 6 | | (30 ILCS 122/20) | 7 | | Sec. 20. Pension Stabilization Fund. | 8 | | (a) The Pension Stabilization Fund is hereby created as a | 9 | | special fund in the State treasury. Moneys in the fund shall be | 10 | | used for the sole purpose of making payments to the designated | 11 | | retirement systems as provided in Section 25.
| 12 | | (b) For each fiscal year when the General Assembly's
| 13 | | appropriations and transfers or diversions as required by law
| 14 | | from general funds do not exceed 99% of the
estimated general | 15 | | funds revenues pursuant to subsection (a)
of Section 10, the | 16 | | Comptroller shall transfer from the
General Revenue Fund as |
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| 1 | | provided by this Section a total
amount equal to 0.5% of the | 2 | | estimated general funds revenues
to the Pension Stabilization | 3 | | Fund. | 4 | | (c) For each fiscal year through Fiscal Year 2013, when the | 5 | | General Assembly's
appropriations and transfers or diversions | 6 | | as required by law
from general funds do not exceed 98% of the
| 7 | | estimated general funds revenues pursuant to subsection (b)
of | 8 | | Section 10, the Comptroller shall transfer from the
General | 9 | | Revenue Fund as provided by this Section a total
amount equal | 10 | | to 1.0% of the estimated general funds revenues
to the Pension | 11 | | Stabilization Fund. | 12 | | (c-5) In Fiscal Year 2014, the State Comptroller shall | 13 | | order transferred and the State Treasurer shall transfer | 14 | | $4,100,000,000 from the General Revenue Fund to the Pension | 15 | | Stabilization Fund. In each fiscal year thereafter, the State | 16 | | Comptroller shall order transferred and the State Treasurer | 17 | | shall transfer from the General Revenue Fund to the Pension | 18 | | Stabilization Fund the amount transferred under this | 19 | | subsection (c-5) in the previous fiscal year increased by | 20 | | 2.25%. | 21 | | (c-10) In addition, in Fiscal Year 2016 and each fiscal | 22 | | year thereafter, the State Comptroller shall order transferred | 23 | | and the State Treasurer shall transfer $693,500,000 from the | 24 | | General Revenue Fund to the Pension Stabilization Fund. | 25 | | (c-15) In addition, in Fiscal Year 2020 and each fiscal | 26 | | year thereafter, the State Comptroller shall order transferred |
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| 1 | | and the State Treasurer shall transfer $900,000,000 from the | 2 | | General Revenue Fund to the Pension Stabilization Fund. | 3 | | (c-20) In addition, in Fiscal Year 2034 and each fiscal | 4 | | year thereafter, the State Comptroller shall order transferred | 5 | | and the State Treasurer shall transfer $1,100,000,000 from the | 6 | | General Revenue Fund to the Pension Stabilization Fund. | 7 | | (c-25) The transfers made pursuant to subsections (c-5) | 8 | | through (c-20) of this Section shall continue until Fiscal Year | 9 | | 2045 or until each of the designated retirement systems, as | 10 | | defined in Section 25, has achieved a funding ratio of at least | 11 | | 100%, whichever occurs first. | 12 | | (d) The Comptroller shall transfer 1/12 of the total
amount | 13 | | to be transferred each fiscal year under this Section
into the | 14 | | Pension Stabilization Fund on the first day of each
month of | 15 | | that fiscal year or as soon thereafter as possible; except that | 16 | | the final transfer of the fiscal year shall be made as soon as | 17 | | practical after the August 31 following the end of the fiscal | 18 | | year. | 19 | | Until Fiscal Year 2014, before Before the final transfer | 20 | | for a fiscal year is made, the Comptroller shall reconcile the | 21 | | estimated general funds revenues used in calculating the other | 22 | | transfers under this Section for that fiscal year with the | 23 | | actual general funds revenues for that fiscal year. The
final | 24 | | transfer for the fiscal year shall be adjusted so that the
| 25 | | total amount transferred under this Section for that fiscal | 26 | | year is equal to the percentage specified in subsection
(b) or |
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| 1 | | (c) of this Section, whichever is applicable, of the actual
| 2 | | general funds revenues for that fiscal year. The actual general | 3 | | funds revenues for the fiscal year shall be calculated in a | 4 | | manner consistent with subsection (c) of
Section 10 of this | 5 | | Act.
| 6 | | (Source: P.A. 94-839, eff. 6-6-06.) | 7 | | (30 ILCS 122/25)
| 8 | | Sec. 25. Transfers from the Pension Stabilization Fund. | 9 | | (a) As used in this Section, "designated retirement | 10 | | systems" means: | 11 | | (1) the State Employees' Retirement System of
| 12 | | Illinois; | 13 | | (2) (blank) the Teachers' Retirement System of the | 14 | | State of
Illinois ; | 15 | | (3) the Illinois Teachers' Retirement Fund State | 16 | | Universities Retirement System ; | 17 | | (4) the Judges Retirement System of Illinois; and | 18 | | (5) the General Assembly Retirement System. | 19 | | (b) As soon as may be practical after any money is | 20 | | deposited into the Pension Stabilization Fund, the State | 21 | | Comptroller shall apportion the deposited amount among the | 22 | | designated retirement systems and the State Comptroller and | 23 | | State Treasurer shall pay the apportioned amounts to the | 24 | | designated retirement systems. The amount deposited shall be | 25 | | apportioned among the designated retirement systems in |
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| 1 | | proportion to their respective certified State contributions | 2 | | for the State fiscal year in which the payment is made to those | 3 | | systems in the same proportion as their respective portions of | 4 | | the
total actuarial reserve deficiency of the designated | 5 | | retirement systems, as most
recently determined by the | 6 | | Governor's Office of Management and
Budget . Amounts received by | 7 | | a designated retirement system under this Section shall be used | 8 | | for funding the unfunded liabilities of the retirement system. | 9 | | Payments under this Section are authorized by the continuing | 10 | | appropriation under Section 1.7 of the State Pension Funds | 11 | | Continuing Appropriation Act. The total amount transferred to | 12 | | the designated retirement systems in Fiscal Year 2014 shall not | 13 | | be less than $4,100,000,000. In each Fiscal Year thereafter, | 14 | | the total amount transferred to the designated retirement | 15 | | systems shall not be less than the total amount transferred in | 16 | | the previous fiscal year. | 17 | | (c) At the request of the State Comptroller, the Governor's | 18 | | Office of Management and Budget shall
determine the individual | 19 | | and total actuarial reserve deficiencies of the
designated | 20 | | retirement systems. For this purpose, the
Governor's Office of | 21 | | Management and Budget shall consider the
latest available audit | 22 | | and actuarial reports of each of the
retirement systems and the | 23 | | relevant reports and statistics of
the Public Pension Division | 24 | | of the Department of
Financial and Professional Regulation. | 25 | | (d) Payments to the designated retirement systems under | 26 | | this Section shall be in addition to, and not in lieu of, any |
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| 1 | | State contributions required under Section 2-124, 14-131, | 2 | | 15-155, 16-158, or 18-131 of the Illinois Pension Code.
| 3 | | (Source: P.A. 94-839, eff. 6-6-06.) | 4 | | Section 5. The Illinois Pension Code is amended by changing | 5 | | Sections 15-101, 15-103, 15-111, 15-155, 15-157, 15-158.2, | 6 | | 16-101, and 17-101 and adding Sections 15-112.1, 15-155.1, | 7 | | 15-159.1, and 15-165.1 as follows:
| 8 | | (40 ILCS 5/15-101) (from Ch. 108 1/2, par. 15-101)
| 9 | | Sec. 15-101. Creation of system. | 10 | | (a) Until July 1, 2013, a A
retirement system is created to | 11 | | provide
retirement annuities and other benefits for employees,
| 12 | | as defined in this
Article, and their dependents.
| 13 | | The system shall be known and may be cited as State | 14 | | Universities Retirement
System. All the business of the system
| 15 | | shall be transacted in that name.
| 16 | | (b) On July 1, 2013, the retirement system established | 17 | | under this Article is merged and consolidated with the Article | 18 | | 16 and 17 retirement systems into a single retirement fund, to | 19 | | be known as the Illinois Teachers' Retirement Fund, which shall | 20 | | be established and administered as prescribed in this Article. | 21 | | (c) In preparation for that consolidation, the Board of | 22 | | this System shall cooperate with the boards of trustees of the | 23 | | Article 16 and 17 retirement systems. | 24 | | (d) At the time of consolidation, or as otherwise directed |
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| 1 | | by the Board of the Illinois Teachers' Retirement Fund, all | 2 | | assets and liabilities belonging to the System established | 3 | | under this Article shall become the assets and liabilities of | 4 | | the Illinois Teachers' Retirement Fund, and all current or | 5 | | former members and beneficiaries of the System established | 6 | | under this Article shall be deemed current or former | 7 | | participants and beneficiaries of the Illinois Teachers' | 8 | | Retirement Fund. | 9 | | (e) The Illinois Teachers' Retirement Fund shall be the | 10 | | legal successor to the System established under this Article | 11 | | and it may exercise any of the rights and powers and perform | 12 | | any of the duties of that System. The Illinois Teachers' | 13 | | Retirement Fund may, in its discretion, either continue, | 14 | | renegotiate, or terminate any personnel, service contract, | 15 | | lease, or other contract of any of the retirement systems | 16 | | consolidated under this Article. | 17 | | (f) The consolidation of the System established under this | 18 | | Article shall not diminish or impair the benefits of any person | 19 | | who participated in that System, or of any such person's | 20 | | surviving spouse,
children, or other dependents. | 21 | | Benefits already payable by the System on June 30, 2013 | 22 | | shall become payable from the Illinois Teachers' Retirement | 23 | | Fund beginning on July 1, 2013, and shall not be subject to | 24 | | recalculation or combination due to the consolidation. | 25 | | Benefits that first become payable on or after July 1, 2013 | 26 | | shall be calculated and paid as provided in this Article 15. |
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| 1 | | The consolidation of the System established under this | 2 | | Article does not entitle any person to a recalculation of any | 3 | | benefit previously granted or a refund of any contribution | 4 | | previously paid. | 5 | | (Source: P.A. 83-1440.)
| 6 | | (40 ILCS 5/15-103) (from Ch. 108 1/2, par. 15-103)
| 7 | | Sec. 15-103. System. "System": Until July 1, 2013, the The | 8 | | State Universities Retirement System.
| 9 | | Beginning July 1, 2013, "system" or "fund" means the | 10 | | Illinois Teachers' Retirement Fund created under this Article | 11 | | to consolidate the retirement systems previously established | 12 | | under this Article and Articles 16 and 17 of this Code; | 13 | | depending on the context, the terms may include one or more of | 14 | | those previously established retirement systems. | 15 | | (Source: P.A. 83-1440.)
| 16 | | (40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
| 17 | | Sec. 15-111. Earnings.
"Earnings": An amount paid for | 18 | | personal services equal to the sum of
the basic compensation | 19 | | plus extra compensation for summer teaching,
overtime or other | 20 | | extra service. For periods for which an employee receives
| 21 | | service credit under subsection (c) of Section 15-113.1 or | 22 | | Section 15-113.2,
earnings are equal to the basic compensation | 23 | | on which contributions are
paid by the employee during such | 24 | | periods. Compensation for employment which is
irregular, |
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| 1 | | intermittent and temporary shall not be considered earnings, | 2 | | unless
the participant is also receiving earnings from the | 3 | | employer as an employee
under Section 15-107.
| 4 | | With respect to transition pay paid by the University of | 5 | | Illinois to a
person who was a participating employee employed | 6 | | in the fire department of
the University of Illinois's | 7 | | Champaign-Urbana campus immediately prior to
the elimination | 8 | | of that fire department:
| 9 | | (1) "Earnings" includes transition pay paid to the | 10 | | employee on or after
the effective date of this amendatory | 11 | | Act of the 91st General Assembly.
| 12 | | (2) "Earnings" includes transition pay paid to the | 13 | | employee before the
effective date of this amendatory Act | 14 | | of the 91st General Assembly only if (i)
employee | 15 | | contributions under Section 15-157 have been withheld from | 16 | | that
transition pay or (ii) the employee pays to the System | 17 | | before January 1, 2001
an amount representing employee | 18 | | contributions under Section 15-157 on that
transition pay. | 19 | | Employee contributions under item (ii) may be paid in a | 20 | | lump
sum, by withholding from additional transition pay | 21 | | accruing before January 1,
2001, or in any other manner | 22 | | approved by the System. Upon payment of the
employee | 23 | | contributions on transition pay, the corresponding | 24 | | employer
contributions become an obligation of the State.
| 25 | | Notwithstanding any other provision of this Section, | 26 | | "earnings", except as used in Section 15-158.2, does not |
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| 1 | | include any future increase in income due to a provision in a | 2 | | collectively bargained contract that grants an increase in | 3 | | earnings based on an employee's expected date of retirement. | 4 | | The changes made to this Section by this amendatory Act of the | 5 | | 98th General Assembly do not apply to an employee who is | 6 | | covered by a collective bargaining agreement or employment | 7 | | contract that is in effect on the effective date of this | 8 | | amendatory Act of the 98th General Assembly and that provides | 9 | | for such increases, until that agreement or contract expires or | 10 | | is amended or renewed. | 11 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 12 | | (40 ILCS 5/15-112.1 new) | 13 | | Sec. 15-112.1. Limitation on earnings and required | 14 | | participation in the self-managed plan. | 15 | | (a) For the purpose of calculating traditional benefit | 16 | | package benefits and contributions, the annual earnings, | 17 | | salary, or wages of a participant shall not exceed the greater | 18 | | of (i) the amount specified under subsection (b-5) of Section | 19 | | 1-160 or (ii) the annual earnings of the participant during the | 20 | | 365 days immediately before the effective date of this Section. | 21 | | If, however, an employment contract that is in place on or | 22 | | before the effective date of this Section authorizes an | 23 | | increase in earnings, salary, or wages on or after the | 24 | | effective date of this Section, then the annual earnings, | 25 | | salary, or wages of the participant during the 365 days that |
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| 1 | | immediately precede the date that the contract expires may be | 2 | | used in lieu of the amount specified in item (ii) of this | 3 | | Section. | 4 | | (b) Notwithstanding any other provision of this Code, (i) | 5 | | for a participant who does not make an election under Section | 6 | | 15-134.5, any portion of his or her earnings that exceeds the | 7 | | limit specified in subsection (a) of this Section for that year | 8 | | shall be subject to the self-managed plan and (ii) for a | 9 | | participant who makes an election under Section 15-134.5, the | 10 | | entirety of the participant's earnings shall, after the date of | 11 | | the election, be subject to the self-managed plan created under | 12 | | this Section, as is provided in Section 15-158.2.
| 13 | | (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
| 14 | | Sec. 15-155. Employer contributions.
| 15 | | (a) The State of Illinois shall make contributions by | 16 | | appropriations of
amounts which, together with the other | 17 | | employer contributions from trust,
federal, and other funds, | 18 | | employee contributions, income from investments,
and other | 19 | | income of this System, will be sufficient to meet the cost of
| 20 | | maintaining and administering the System on a 100% 90% funded | 21 | | basis in accordance
with actuarial recommendations.
| 22 | | The Board shall determine the amount of State contributions | 23 | | required for
each fiscal year on the basis of the actuarial | 24 | | tables and other assumptions
adopted by the Board and the | 25 | | recommendations of the actuary, using the formula
in subsection |
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| 1 | | (a-1).
| 2 | | (a-1) For State fiscal years 2012 and 2013 through 2045 , | 3 | | the minimum contribution
to the System to be made by the State | 4 | | for each fiscal year shall be an amount
determined by the | 5 | | System to be sufficient to bring the total assets of the
System | 6 | | up to 90% of the total actuarial liabilities of the System by | 7 | | the end of
State fiscal year 2045. In making these | 8 | | determinations, the required State
contribution shall be | 9 | | calculated each year as a level percentage of payroll
over the | 10 | | years remaining to and including fiscal year 2045 and shall be
| 11 | | determined under the projected unit credit actuarial cost | 12 | | method.
| 13 | | Beginning July 1, 2013, the assets and liabilities of the | 14 | | Article 16 and 17 retirement systems shall be calculated as | 15 | | assets and liabilities of the Illinois Teachers' Retirement | 16 | | Fund under this Article. | 17 | | For State fiscal years 2014 through 2045 or until the State | 18 | | has amortized 100% of the total cost of benefits accrued by | 19 | | July 1, 2013, whichever is earlier, in addition to any employer | 20 | | contributions required from the State as an employer, the | 21 | | minimum contribution to the Fund to be made by the State for | 22 | | each fiscal year shall be an amount determined by the Board to | 23 | | be sufficient to amortize, by the end of State fiscal year | 24 | | 2045, the total cost of the benefits of the Fund arising before | 25 | | July 1, 2013. In making these determinations, the required | 26 | | State contribution shall be calculated each year as a level |
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| 1 | | percentage of payroll over the years remaining to and including | 2 | | fiscal year 2045 and shall be determined under the projected | 3 | | unit credit actuarial cost method. | 4 | | Beginning with State fiscal year 2014, the minimum required | 5 | | contribution of employers under this Article shall be | 6 | | determined as a percentage of projected payroll, and shall be | 7 | | sufficient to produce an annual amount equal to the employer's | 8 | | normal cost for that fiscal year and any unfunded accrued | 9 | | liability assigned to the employer that year arising from | 10 | | benefits accrued after July 1,2013. | 11 | | For use in determining the employer's contribution for | 12 | | unfunded accrued liability the Fund shall maintain a separate | 13 | | account for each employer. The separate account shall be | 14 | | maintained in such form and detail as the Fund determines to be | 15 | | appropriate. The separate account shall reflect the following | 16 | | items to the extent that they are attributable to that employer | 17 | | and arise on or after July 1, 2013: employer contributions, | 18 | | employee contributions, investment returns, payments of | 19 | | benefits, and that employer's proportionate share of the Fund's | 20 | | administrative expenses.
In the event that the Board determines | 21 | | that there is a deficiency or surplus in the account of an | 22 | | employer, the Board shall determine the employer's | 23 | | contribution rate so as to address that deficiency or surplus | 24 | | over a reasonable period of time as determined by the Board, | 25 | | which shall be no more than 10 years. | 26 | | The State shall also be required to make an annual |
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| 1 | | contribution to each employer of a member who would have been | 2 | | considered a member of Article 15 or 16 before the effective | 3 | | date of this amendatory Act of the 98th General Assembly of the | 4 | | total employer normal cost as determined by the system for | 5 | | FY14. Every 5 years the Commission on Government Forecasting | 6 | | and Accountability shall review the contribution in this | 7 | | paragraph and the total current employer normal cost and submit | 8 | | the findings to the General Assembly. | 9 | | For State fiscal years 1996 through 2005, the State | 10 | | contribution to
the System, as a percentage of the applicable | 11 | | employee payroll, shall be
increased in equal annual increments | 12 | | so that by State fiscal year 2011, the
State is contributing at | 13 | | the rate required under this Section.
| 14 | | Notwithstanding any other provision of this Article, the | 15 | | total required State
contribution for State fiscal year 2006 is | 16 | | $166,641,900.
| 17 | | Notwithstanding any other provision of this Article, the | 18 | | total required State
contribution for State fiscal year 2007 is | 19 | | $252,064,100.
| 20 | | For each of State fiscal years 2008 through 2009, the State | 21 | | contribution to
the System, as a percentage of the applicable | 22 | | employee payroll, shall be
increased in equal annual increments | 23 | | from the required State contribution for State fiscal year | 24 | | 2007, so that by State fiscal year 2011, the
State is | 25 | | contributing at the rate otherwise required under this Section.
| 26 | | Notwithstanding any other provision of this Article, the |
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| 1 | | total required State contribution for State fiscal year 2010 is | 2 | | $702,514,000 and shall be made from the State Pensions Fund and | 3 | | proceeds of bonds sold in fiscal year 2010 pursuant to Section | 4 | | 7.2 of the General Obligation Bond Act, less (i) the pro rata | 5 | | share of bond sale expenses determined by the System's share of | 6 | | total bond proceeds, (ii) any amounts received from the General | 7 | | Revenue Fund in fiscal year 2010, (iii) any reduction in bond | 8 | | proceeds due to the issuance of discounted bonds, if | 9 | | applicable. | 10 | | Notwithstanding any other provision of this Article, the
| 11 | | total required State contribution for State fiscal year 2011 is
| 12 | | the amount recertified by the System on or before April 1, 2011 | 13 | | pursuant to Section 15-165 and shall be made from the State | 14 | | Pensions Fund and
proceeds of bonds sold in fiscal year 2011 | 15 | | pursuant to Section
7.2 of the General Obligation Bond Act, | 16 | | less (i) the pro rata
share of bond sale expenses determined by | 17 | | the System's share of
total bond proceeds, (ii) any amounts | 18 | | received from the General
Revenue Fund in fiscal year 2011, and | 19 | | (iii) any reduction in bond
proceeds due to the issuance of | 20 | | discounted bonds, if
applicable. | 21 | | Beginning in State fiscal year 2046, the minimum State | 22 | | contribution for
each fiscal year shall be the amount needed to | 23 | | maintain the total assets of
the System at 100% 90% of the | 24 | | total actuarial liabilities of the System.
| 25 | | Amounts received by the System pursuant to Section 25 of | 26 | | the Budget Stabilization Act or Section 8.12 of the State |
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| 1 | | Finance Act in any fiscal year do not reduce and do not | 2 | | constitute payment of any portion of the minimum State | 3 | | contribution required under this Article in that fiscal year. | 4 | | Such amounts shall not reduce, and shall not be included in the | 5 | | calculation of, the required State contributions under this | 6 | | Article in any future year until the System has reached a | 7 | | funding ratio of at least 90%. A reference in this Article to | 8 | | the "required State contribution" or any substantially similar | 9 | | term does not include or apply to any amounts payable to the | 10 | | System under Section 25 of the Budget Stabilization Act. | 11 | | Notwithstanding any other provision of this Section, the | 12 | | required State
contribution for State fiscal year 2005 and for | 13 | | fiscal year 2008 and each fiscal year thereafter, as
calculated | 14 | | under this Section and
certified under Section 15-165, shall | 15 | | not exceed an amount equal to (i) the
amount of the required | 16 | | State contribution that would have been calculated under
this | 17 | | Section for that fiscal year if the System had not received any | 18 | | payments
under subsection (d) of Section 7.2 of the General | 19 | | Obligation Bond Act, minus
(ii) the portion of the State's | 20 | | total debt service payments for that fiscal
year on the bonds | 21 | | issued in fiscal year 2003 for the purposes of that Section | 22 | | 7.2, as determined
and certified by the Comptroller, that is | 23 | | the same as the System's portion of
the total moneys | 24 | | distributed under subsection (d) of Section 7.2 of the General
| 25 | | Obligation Bond Act. In determining this maximum for State | 26 | | fiscal years 2008 through 2010, however, the amount referred to |
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| 1 | | in item (i) shall be increased, as a percentage of the | 2 | | applicable employee payroll, in equal increments calculated | 3 | | from the sum of the required State contribution for State | 4 | | fiscal year 2007 plus the applicable portion of the State's | 5 | | total debt service payments for fiscal year 2007 on the bonds | 6 | | issued in fiscal year 2003 for the purposes of Section 7.2 of | 7 | | the General
Obligation Bond Act, so that, by State fiscal year | 8 | | 2011, the
State is contributing at the rate otherwise required | 9 | | under this Section.
| 10 | | (a-5) Pursuant to Article XIII of the 1970 Constitution of | 11 | | the State of Illinois, beginning on July 1, 2013, the State | 12 | | shall, as a retirement benefit to each participant and | 13 | | annuitant of the System be contractually obligated to the | 14 | | System (as a fiduciary and trustee of the participants and | 15 | | annuitants) to pay the Annual Required State Contribution, as | 16 | | determined by the Board of the System using generally accepted | 17 | | actuarial principles, as is necessary to bring the total assets | 18 | | of the System up to 100% of the total actuarial liabilities of | 19 | | the System by the end of State fiscal year 2045. As a further | 20 | | retirement benefit and contractual obligation, each fiscal | 21 | | year, the State shall pay to each designated retirement system | 22 | | the Annual Required State Contribution certified by the Board | 23 | | for that fiscal year. Payments of the Annual Required State | 24 | | Contribution for each fiscal year shall be made in equal | 25 | | monthly installments. This Section, and the security it | 26 | | provides to participants and annuitants is intended to be, and |
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| 1 | | is, a contractual right that is part of the pension benefits | 2 | | provided to the participants and annuitants. Notwithstanding | 3 | | anything to the contrary in the Court of Claims Act or any | 4 | | other law, a designated retirement system has the exclusive | 5 | | right to and shall bring a Mandamus action in the Circuit Court | 6 | | of Champaign County against the State to compel the State to | 7 | | make any installment of the Annual Required State Contribution | 8 | | required by this Section, irrespective of other remedies that | 9 | | may be available to the System. Each member or annuitant of the | 10 | | System has the right to bring a Mandamus action against the | 11 | | System in the Circuit Court in any judicial district in which | 12 | | the System maintains an office if the System fails to bring an | 13 | | action specified in this Section, irrespective of other | 14 | | remedies that may be available to the member or annuitant. | 15 | | (b) If an employee is paid from trust or federal funds, the | 16 | | employer
shall pay to the Board contributions from those funds | 17 | | which are
sufficient to cover the accruing normal costs on | 18 | | behalf of the employee.
However, universities having employees | 19 | | who are compensated out of local
auxiliary funds, income funds, | 20 | | or service enterprise funds are not required
to pay such | 21 | | contributions on behalf of those employees. The local auxiliary
| 22 | | funds, income funds, and service enterprise funds of | 23 | | universities shall not be
considered trust funds for the | 24 | | purpose of this Article, but funds of alumni
associations, | 25 | | foundations, and athletic associations which are affiliated | 26 | | with
the universities included as employers under this Article |
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| 1 | | and other employers
which do not receive State appropriations | 2 | | are considered to be trust funds for
the purpose of this | 3 | | Article.
| 4 | | (b-1) The City of Urbana and the City of Champaign shall | 5 | | each make
employer contributions to this System for their | 6 | | respective firefighter
employees who participate in this | 7 | | System pursuant to subsection (h) of Section
15-107. The rate | 8 | | of contributions to be made by those municipalities shall
be | 9 | | determined annually by the Board on the basis of the actuarial | 10 | | assumptions
adopted by the Board and the recommendations of the | 11 | | actuary, and shall be
expressed as a percentage of salary for | 12 | | each such employee. The Board shall
certify the rate to the | 13 | | affected municipalities as soon as may be practical.
The | 14 | | employer contributions required under this subsection shall be | 15 | | remitted by
the municipality to the System at the same time and | 16 | | in the same manner as
employee contributions.
| 17 | | (c) Through State fiscal year 1995: The total employer | 18 | | contribution shall
be apportioned among the various funds of | 19 | | the State and other employers,
whether trust, federal, or other | 20 | | funds, in accordance with actuarial procedures
approved by the | 21 | | Board. State of Illinois contributions for employers receiving
| 22 | | State appropriations for personal services shall be payable | 23 | | from appropriations
made to the employers or to the System. The | 24 | | contributions for Class I
community colleges covering earnings | 25 | | other than those paid from trust and
federal funds, shall be | 26 | | payable solely from appropriations to the Illinois
Community |
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| 1 | | College Board or the System for employer contributions.
| 2 | | (d) Beginning in State fiscal year 1996, the required State | 3 | | contributions
to the System shall be appropriated directly to | 4 | | the System and shall be payable
through vouchers issued in | 5 | | accordance with subsection (c) of Section 15-165, except as | 6 | | provided in subsection (g).
| 7 | | (e) The State Comptroller shall draw warrants payable to | 8 | | the System upon
proper certification by the System or by the | 9 | | employer in accordance with the
appropriation laws and this | 10 | | Code.
| 11 | | (f) Normal costs under this Section means liability for
| 12 | | pensions and other benefits which accrues to the System because | 13 | | of the
credits earned for service rendered by the participants | 14 | | during the
fiscal year and expenses of administering the | 15 | | System, but shall not
include the principal of or any | 16 | | redemption premium or interest on any bonds
issued by the Board | 17 | | or any expenses incurred or deposits required in
connection | 18 | | therewith.
| 19 | | (g) If the amount of a participant's earnings for any | 20 | | academic year used to determine the final rate of earnings, | 21 | | determined on a full-time equivalent basis, exceeds the amount | 22 | | of his or her earnings with the same employer for the previous | 23 | | academic year, determined on a full-time equivalent basis, by | 24 | | more than 6%, the participant's employer shall pay to the | 25 | | System, in addition to all other payments required under this | 26 | | Section and in accordance with guidelines established by the |
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| 1 | | System, the present value of the increase in benefits resulting | 2 | | from the portion of the increase in earnings that is in excess | 3 | | of 6%. This present value shall be computed by the System on | 4 | | the basis of the actuarial assumptions and tables used in the | 5 | | most recent actuarial valuation of the System that is available | 6 | | at the time of the computation. The System may require the | 7 | | employer to provide any pertinent information or | 8 | | documentation. | 9 | | Whenever it determines that a payment is or may be required | 10 | | under this subsection (g), the System shall calculate the | 11 | | amount of the payment and bill the employer for that amount. | 12 | | The bill shall specify the calculations used to determine the | 13 | | amount due. If the employer disputes the amount of the bill, it | 14 | | may, within 30 days after receipt of the bill, apply to the | 15 | | System in writing for a recalculation. The application must | 16 | | specify in detail the grounds of the dispute and, if the | 17 | | employer asserts that the calculation is subject to subsection | 18 | | (h) or (i) of this Section, must include an affidavit setting | 19 | | forth and attesting to all facts within the employer's | 20 | | knowledge that are pertinent to the applicability of subsection | 21 | | (h) or (i). Upon receiving a timely application for | 22 | | recalculation, the System shall review the application and, if | 23 | | appropriate, recalculate the amount due.
| 24 | | The employer contributions required under this subsection | 25 | | (g) (f) may be paid in the form of a lump sum within 90 days | 26 | | after receipt of the bill. If the employer contributions are |
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| 1 | | not paid within 90 days after receipt of the bill, then | 2 | | interest will be charged at a rate equal to the System's annual | 3 | | actuarially assumed rate of return on investment compounded | 4 | | annually from the 91st day after receipt of the bill. Payments | 5 | | must be concluded within 3 years after the employer's receipt | 6 | | of the bill. | 7 | | (h) This subsection (h) applies only to payments made or | 8 | | salary increases given on or after June 1, 2005 but before July | 9 | | 1, 2011. The changes made by Public Act 94-1057 shall not | 10 | | require the System to refund any payments received before July | 11 | | 31, 2006 (the effective date of Public Act 94-1057). | 12 | | When assessing payment for any amount due under subsection | 13 | | (g), the System shall exclude earnings increases paid to | 14 | | participants under contracts or collective bargaining | 15 | | agreements entered into, amended, or renewed before June 1, | 16 | | 2005.
| 17 | | When assessing payment for any amount due under subsection | 18 | | (g), the System shall exclude earnings increases paid to a | 19 | | participant at a time when the participant is 10 or more years | 20 | | from retirement eligibility under Section 15-135.
| 21 | | When assessing payment for any amount due under subsection | 22 | | (g), the System shall exclude earnings increases resulting from | 23 | | overload work, including a contract for summer teaching, or | 24 | | overtime when the employer has certified to the System, and the | 25 | | System has approved the certification, that: (i) in the case of | 26 | | overloads (A) the overload work is for the sole purpose of |
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| 1 | | academic instruction in excess of the standard number of | 2 | | instruction hours for a full-time employee occurring during the | 3 | | academic year that the overload is paid and (B) the earnings | 4 | | increases are equal to or less than the rate of pay for | 5 | | academic instruction computed using the participant's current | 6 | | salary rate and work schedule; and (ii) in the case of | 7 | | overtime, the overtime was necessary for the educational | 8 | | mission. | 9 | | When assessing payment for any amount due under subsection | 10 | | (g), the System shall exclude any earnings increase resulting | 11 | | from (i) a promotion for which the employee moves from one | 12 | | classification to a higher classification under the State | 13 | | Universities Civil Service System, (ii) a promotion in academic | 14 | | rank for a tenured or tenure-track faculty position, or (iii) a | 15 | | promotion that the Illinois Community College Board has | 16 | | recommended in accordance with subsection (k) of this Section. | 17 | | These earnings increases shall be excluded only if the | 18 | | promotion is to a position that has existed and been filled by | 19 | | a member for no less than one complete academic year and the | 20 | | earnings increase as a result of the promotion is an increase | 21 | | that results in an amount no greater than the average salary | 22 | | paid for other similar positions. | 23 | | (i) When assessing payment for any amount due under | 24 | | subsection (g), the System shall exclude any salary increase | 25 | | described in subsection (h) of this Section given on or after | 26 | | July 1, 2011 but before July 1, 2014 under a contract or |
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| 1 | | collective bargaining agreement entered into, amended, or | 2 | | renewed on or after June 1, 2005 but before July 1, 2011. | 3 | | Notwithstanding any other provision of this Section, any | 4 | | payments made or salary increases given after June 30, 2014 | 5 | | shall be used in assessing payment for any amount due under | 6 | | subsection (g) of this Section.
| 7 | | (j) The System shall prepare a report and file copies of | 8 | | the report with the Governor and the General Assembly by | 9 | | January 1, 2007 that contains all of the following information: | 10 | | (1) The number of recalculations required by the | 11 | | changes made to this Section by Public Act 94-1057 for each | 12 | | employer. | 13 | | (2) The dollar amount by which each employer's | 14 | | contribution to the System was changed due to | 15 | | recalculations required by Public Act 94-1057. | 16 | | (3) The total amount the System received from each | 17 | | employer as a result of the changes made to this Section by | 18 | | Public Act 94-4. | 19 | | (4) The increase in the required State contribution | 20 | | resulting from the changes made to this Section by Public | 21 | | Act 94-1057. | 22 | | (k) The Illinois Community College Board shall adopt rules | 23 | | for recommending lists of promotional positions submitted to | 24 | | the Board by community colleges and for reviewing the | 25 | | promotional lists on an annual basis. When recommending | 26 | | promotional lists, the Board shall consider the similarity of |
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| 1 | | the positions submitted to those positions recognized for State | 2 | | universities by the State Universities Civil Service System. | 3 | | The Illinois Community College Board shall file a copy of its | 4 | | findings with the System. The System shall consider the | 5 | | findings of the Illinois Community College Board when making | 6 | | determinations under this Section. The System shall not exclude | 7 | | any earnings increases resulting from a promotion when the | 8 | | promotion was not submitted by a community college. Nothing in | 9 | | this subsection (k) shall require any community college to | 10 | | submit any information to the Community College Board.
| 11 | | (l) For purposes of determining the required State | 12 | | contribution to the System, the value of the System's assets | 13 | | shall be equal to the actuarial value of the System's assets, | 14 | | which shall be calculated as follows: | 15 | | As of June 30, 2008, the actuarial value of the System's | 16 | | assets shall be equal to the market value of the assets as of | 17 | | that date. In determining the actuarial value of the System's | 18 | | assets for fiscal years after June 30, 2008, any actuarial | 19 | | gains or losses from investment return incurred in a fiscal | 20 | | year shall be recognized in equal annual amounts over the | 21 | | 5-year period following that fiscal year. | 22 | | (m) For purposes of determining the required State | 23 | | contribution to the system for a particular year, the actuarial | 24 | | value of assets shall be assumed to earn a rate of return equal | 25 | | to the system's actuarially assumed rate of return. | 26 | | (Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; |
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| 1 | | 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff. | 2 | | 7-13-12; revised 10-17-12.)
| 3 | | (40 ILCS 5/15-155.1 new) | 4 | | Sec. 15-155.1. Actions to enforce payments by employers | 5 | | other than the State. Any employer, other than the State, that | 6 | | fails to transmit to the System contributions required of
it | 7 | | under this Article or contributions required of employees, for | 8 | | more
than 90 days after such contributions are due, is subject | 9 | | to the following:
after giving notice to the employer, the | 10 | | System may certify
to the State Comptroller or the Illinois | 11 | | Community College Board, whichever is applicable, the
amounts | 12 | | of such delinquent payments and the State Comptroller or the | 13 | | Illinois Community College Board, whichever is applicable, | 14 | | shall deduct the amounts so certified
or any part thereof from | 15 | | any State funds to be remitted
to the employer and shall
pay | 16 | | the amount so deducted to the System. If State funds from which
| 17 | | such deductions may be made are not available, the System may | 18 | | proceed
against the employer to recover the
amounts of such | 19 | | delinquent payments in the appropriate circuit court. | 20 | | The System may provide for an
audit of the records of an | 21 | | employer, other than the State, as
may be required to establish | 22 | | the amounts of required contributions.
The employer shall make | 23 | | its records
available to the System for the purpose of such | 24 | | audit. The cost of such
audit shall be added to the amount of | 25 | | the delinquent payments and may
be recovered by the System from |
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| 1 | | the employer at the same time and in the same manner as the | 2 | | delinquent payments
are recovered.
| 3 | | (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
| 4 | | Sec. 15-157. Employee Contributions.
| 5 | | (a) Each participating employee
shall make contributions | 6 | | towards the retirement
benefits payable under the retirement | 7 | | program applicable to the
employee from each payment
of | 8 | | earnings applicable to employment under this system on and | 9 | | after the
date of becoming a participant as follows: Prior to | 10 | | September 1, 1949,
3 1/2% of earnings; from September 1, 1949 | 11 | | to August 31, 1955, 5%; from
September 1, 1955 to August 31, | 12 | | 1969, 6%; from September 1, 1969, 6 1/2%.
These contributions | 13 | | are to be considered as normal contributions for purposes
of | 14 | | this Article.
| 15 | | Each participant who is a police officer or firefighter | 16 | | shall make normal
contributions of 8% of each payment of | 17 | | earnings applicable to employment as a
police officer or | 18 | | firefighter under this system on or after September 1, 1981,
| 19 | | unless he or she files with the board within 60 days after the | 20 | | effective date
of this amendatory Act of 1991 or 60 days after | 21 | | the board receives notice that
he or she is employed as a | 22 | | police officer or firefighter, whichever is later,
a written | 23 | | notice waiving the retirement formula provided by Rule 4 of | 24 | | Section
15-136. This waiver shall be irrevocable. If a | 25 | | participant had met the
conditions set forth in Section |
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| 1 | | 15-132.1 prior to the effective date of this
amendatory Act of | 2 | | 1991 but failed to make the additional normal contributions
| 3 | | required by this paragraph, he or she may elect to pay the | 4 | | additional
contributions plus compound interest at the | 5 | | effective rate. If such payment
is received by the board, the | 6 | | service shall be considered as police officer
service in | 7 | | calculating the retirement annuity under Rule 4 of Section | 8 | | 15-136.
While performing service described in clause (i) or | 9 | | (ii) of Rule 4 of Section
15-136, a participating employee | 10 | | shall be deemed to be employed as a
firefighter for the purpose | 11 | | of determining the rate of employee contributions
under this | 12 | | Section.
| 13 | | (b) Starting September 1, 1969, each participating | 14 | | employee shall make
additional contributions of 1/2 of 1% of | 15 | | earnings to finance a portion
of the cost of the annual | 16 | | increases in retirement annuity provided under
Section 15-136, | 17 | | except that with respect to participants in the
self-managed | 18 | | plan this additional contribution shall be used to finance the
| 19 | | benefits obtained under that retirement program.
| 20 | | (c) In addition to the amounts described in subsections (a) | 21 | | and (b) of this
Section, each participating employee shall make | 22 | | contributions of 1% of earnings
applicable under this system on | 23 | | and after August 1, 1959. The contributions
made under this | 24 | | subsection (c) shall be considered as survivor's insurance
| 25 | | contributions for purposes of this Article if the employee is | 26 | | covered under
the traditional benefit package, and such |
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| 1 | | contributions shall be considered
as additional contributions | 2 | | for purposes of this Article if the employee is
participating | 3 | | in the self-managed plan or has elected to participate in the
| 4 | | portable benefit package and has completed the applicable | 5 | | one-year waiting
period. Contributions in excess of $80 during | 6 | | any fiscal year beginning before
August 31, 1969 and in excess | 7 | | of $120 during any fiscal year thereafter until
September 1, | 8 | | 1971 shall be considered as additional contributions for | 9 | | purposes
of this Article.
| 10 | | (d) If the board by board rule so permits and subject to | 11 | | such conditions
and limitations as may be specified in its | 12 | | rules, a participant may make
other additional contributions of | 13 | | such percentage of earnings or amounts as
the participant shall | 14 | | elect in a written notice thereof received by the board.
| 15 | | (e) That fraction of a participant's total accumulated | 16 | | normal
contributions, the numerator of which is equal to the | 17 | | number of years of
service in excess of that which is required | 18 | | to qualify for the maximum
retirement annuity, and the | 19 | | denominator of which is equal to the total
service of the | 20 | | participant, shall be considered as accumulated additional
| 21 | | contributions. The determination of the applicable maximum | 22 | | annuity and
the adjustment in contributions required by this | 23 | | provision shall be made
as of the date of the participant's | 24 | | retirement.
| 25 | | (f) Notwithstanding the foregoing, a participating | 26 | | employee shall not
be required to make contributions under this |
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| 1 | | Section after the date upon
which continuance of such | 2 | | contributions would otherwise cause his or her
retirement | 3 | | annuity to exceed the maximum retirement annuity as specified | 4 | | in
clause (1) of subsection (c) of Section 15-136.
| 5 | | (g) A participating employee may make contributions for the | 6 | | purchase of
service credit under this Article.
| 7 | | (h) Notwithstanding any provision of this Code to the | 8 | | contrary, (i) for a member who does not file an election under | 9 | | subsection (e) of Section 15-158.2, any contributions on | 10 | | amounts of earnings in excess of the limit specified in Section | 11 | | 15-112.1 for that year shall instead be used to finance | 12 | | self-managed plan benefits and (ii) for a member who files an | 13 | | election under subsection (e) of Section 15-158.2, any | 14 | | contributions made after the date of the election, including | 15 | | the contributions for a survivor's annuity, shall be used to | 16 | | finance the benefits under Section 15-158.2. Notwithstanding | 17 | | any provision of this Code to the contrary, a member who does | 18 | | not file an election under subsection (a-5) of Section 15-158.2 | 19 | | shall contribute towards the traditional benefit package a | 20 | | percentage of earnings equal to the greater of (i) one-half of | 21 | | the normal cost of the traditional benefit package or (ii) 6% | 22 | | of earnings.
| 23 | | (Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448, | 24 | | eff. 8-16-97;
90-511, eff. 8-22-97; 90-576, eff. 3-31-98; | 25 | | 90-655, eff. 7-30-98; 90-766, eff.
8-14-98.)
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| 1 | | (40 ILCS 5/15-158.2)
| 2 | | Sec. 15-158.2. Self-managed plan.
| 3 | | (a) Purpose. The General Assembly finds that it is | 4 | | important for colleges
and universities to be able to attract | 5 | | and retain the most qualified employees
and that in order to | 6 | | attract and retain these employees, colleges and
universities | 7 | | should have the flexibility to provide a defined contribution
| 8 | | plan as an alternative for eligible employees who elect not to | 9 | | participate
in a defined benefit retirement program provided | 10 | | under this Article.
Accordingly, the State Universities | 11 | | Retirement System is hereby authorized to
establish and | 12 | | administer a self-managed plan, which shall offer | 13 | | participating
employees the opportunity to accumulate assets | 14 | | for retirement through a
combination of employee and employer | 15 | | contributions that may be invested in
mutual funds, collective | 16 | | investment funds, or other investment products and
used to | 17 | | purchase annuity contracts, either fixed or variable or a | 18 | | combination
thereof. The plan must be qualified under the | 19 | | Internal Revenue Code of 1986.
| 20 | | (b) Adoption by employers. Each employer subject to this | 21 | | Article may
elect to adopt the self-managed plan established | 22 | | under this Section; this
election is irrevocable. An employer's | 23 | | election to adopt the self-managed
plan makes available to the | 24 | | eligible employees of that employer the elections
described in | 25 | | Section 15-134.5.
| 26 | | The State Universities Retirement System shall be the plan |
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| 1 | | sponsor for the
self-managed plan and shall prepare a plan | 2 | | document and prescribe such rules
and procedures as are | 3 | | considered necessary or desirable for the administration
of the | 4 | | self-managed plan. Consistent with its fiduciary duty to the
| 5 | | participants and beneficiaries of the self-managed plan, the | 6 | | Board of Trustees
of the System may delegate aspects of plan | 7 | | administration as it sees fit to
companies authorized to do | 8 | | business in this State, to the employers, or to a
combination | 9 | | of both.
| 10 | | (c) Selection of service providers and funding vehicles. | 11 | | The System, in
consultation with the employers, shall solicit | 12 | | proposals to provide
administrative services and funding | 13 | | vehicles for the self-managed plan from
insurance and annuity | 14 | | companies and mutual fund companies, banks, trust
companies, or | 15 | | other financial institutions authorized to do business in this
| 16 | | State. In reviewing the proposals received and approving and | 17 | | contracting with
no fewer than 2 and no more than 7 companies, | 18 | | the Board of Trustees of the System shall
consider, among other | 19 | | things, the following criteria:
| 20 | | (1) the nature and extent of the benefits that would be | 21 | | provided
to the participants;
| 22 | | (2) the reasonableness of the benefits in relation to | 23 | | the premium
charged;
| 24 | | (3) the suitability of the benefits to the needs and
| 25 | | interests of the participating employees and the employer;
| 26 | | (4) the ability of the company to provide benefits |
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| 1 | | under the contract and
the financial stability of the | 2 | | company; and
| 3 | | (5) the efficacy of the contract in the recruitment and | 4 | | retention of
employees.
| 5 | | The System, in consultation with the employers, shall | 6 | | periodically review
each approved company. A company may | 7 | | continue to provide administrative
services and funding | 8 | | vehicles for the self-managed plan only so long as
it continues | 9 | | to be an approved company under contract with the Board.
| 10 | | (d) Employee Direction. Employees who are participating in | 11 | | the program
must be allowed to direct the transfer of their | 12 | | account balances among the
various investment options offered, | 13 | | subject to applicable contractual
provisions.
The participant | 14 | | shall not be deemed a fiduciary by reason of providing such
| 15 | | investment direction. A person who is a fiduciary shall not be | 16 | | liable for any
loss resulting from such investment direction | 17 | | and shall not be deemed to have
breached any fiduciary duty by | 18 | | acting in accordance with that direction.
Neither the System | 19 | | nor the employer guarantees any of the investments in the
| 20 | | employee's account balances.
| 21 | | (e) Participation. An employee eligible to participate in | 22 | | the
self-managed plan must make a written election in | 23 | | accordance with the
provisions of Section 15-134.5 and the | 24 | | procedures established by the System or become subject to the | 25 | | limitation specified in Section 15-112.1 .
Participation in the | 26 | | self-managed plan by an electing employee shall begin
on the |
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| 1 | | first day of the first pay period following the later of the | 2 | | date the
employee's election is filed with the System , or the | 3 | | effective date as of
which the employee's employer begins to | 4 | | offer participation in the self-managed
plan , or the date the | 5 | | participant's annual earnings exceeds the limitation specified | 6 | | in Section 15-112.1 . Employers may not make the self-managed | 7 | | plan available earlier than
January 1, 1998. An employee's | 8 | | participation in any other retirement program
administered by | 9 | | the System under this Article shall terminate on the date that
| 10 | | participation in the self-managed plan begins.
| 11 | | An employee who participates has elected to participate in | 12 | | the self-managed plan under
this Section must continue | 13 | | participation while employed in an eligible
position, and may | 14 | | not participate in any other retirement program administered
by | 15 | | the System under this Article while employed by that employer | 16 | | or any other
employer that has adopted the self-managed plan, | 17 | | unless the self-managed plan
is terminated in accordance with | 18 | | subsection (i).
| 19 | | Participation in the self-managed plan under this Section | 20 | | shall constitute
membership in the State Universities | 21 | | Retirement System.
| 22 | | A participant under this Section shall be entitled to the | 23 | | benefits of
Article 20 of this Code.
| 24 | | (f) Establishment of Initial Account Balance. If at the | 25 | | time an employee
elects to participate in the self-managed plan | 26 | | he or she has rights and credits
in the System due to previous |
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| 1 | | participation in the traditional benefit package,
the System | 2 | | shall establish for the employee an opening account balance in | 3 | | the
self-managed plan, equal to the amount of contribution | 4 | | refund that the employee
would be eligible to receive under | 5 | | Section 15-154 if the employee terminated
employment on that | 6 | | date and elected a refund of contributions, except that this
| 7 | | hypothetical refund shall include interest at the effective | 8 | | rate for the
respective years. The System shall transfer assets | 9 | | from the defined benefit
retirement program to the self-managed | 10 | | plan, as a tax free transfer in
accordance with Internal | 11 | | Revenue Service guidelines, for purposes of funding
the | 12 | | employee's opening account balance.
| 13 | | (g) No Duplication of Service Credit. Notwithstanding any | 14 | | other provision
of this Article, an employee may not purchase | 15 | | or receive service or service
credit applicable to any other | 16 | | retirement program administered by the System
under this | 17 | | Article for any period during which the employee was a | 18 | | participant
in the self-managed plan established under this | 19 | | Section.
| 20 | | (h) Contributions. | 21 | | (1) The self-managed plan shall be funded by | 22 | | contributions
from employees participating in the | 23 | | self-managed plan and employer
contributions as provided | 24 | | in this Section.
| 25 | | (A) Before the effective date of this amendatory | 26 | | Act of the 98th General Assembly, the The contribution |
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| 1 | | rate for employees participating in the self-managed | 2 | | plan
under this Section shall be equal to the employee | 3 | | contribution rate for other
participants in the | 4 | | System, as provided in Section 15-157. This required
| 5 | | contribution shall be made as an "employer pick-up" | 6 | | under Section 414(h) of the
Internal Revenue Code of | 7 | | 1986 or any successor Section thereof. Any employee
| 8 | | participating in the System's traditional benefit | 9 | | package prior to his or her
election to participate in | 10 | | the self-managed plan shall continue to have the
| 11 | | employer pick up the contributions required under | 12 | | Section 15-157. However, the
amounts picked up after | 13 | | the election of the self-managed plan shall be remitted
| 14 | | to and treated as assets of the self-managed plan. In | 15 | | no event shall an
employee have an option of receiving | 16 | | these amounts in cash. Employees may make
additional | 17 | | contributions to the
self-managed plan in accordance | 18 | | with procedures prescribed by the System, to
the extent | 19 | | permitted under rules prescribed by the System.
| 20 | | (B) On and after the effective date of this | 21 | | amendatory Act of the 98th General Assembly, the | 22 | | contribution rate for participants in the self-managed | 23 | | plan
shall be, (i) for a participant who does not file | 24 | | an election under subsection (e) of this Section, 6% of | 25 | | the amount of earnings in excess of the limit specified | 26 | | in 15-112.1 for that year, in addition to the amount |
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| 1 | | specified under subsection (h) of Section 15-157 for | 2 | | that year and (ii) for a participant who files an | 3 | | election under subsection (e) of this Section, 8% of | 4 | | any amount of earnings up to and including the limit | 5 | | specified in Section 15-112.1 for that year and 6% of | 6 | | any amount of earnings in excess of that limit for that | 7 | | year. This required
contribution shall be made as an | 8 | | employer pick-up under Section 414(h) of the
Internal | 9 | | Revenue Code of 1986 or any successor Section thereof. | 10 | | Any participant in the System's traditional benefit | 11 | | package prior to his or her
election to participate in | 12 | | the self-managed plan shall continue to have the
| 13 | | employer pick up the contributions required under | 14 | | Section 15-157. However, the
amounts picked up after | 15 | | the election of the self-managed plan shall be remitted
| 16 | | to and treated as assets of the self-managed plan. In | 17 | | no event shall a participant have the option of | 18 | | receiving these amounts in cash. Participants may make
| 19 | | additional contributions to the
self-managed plan in | 20 | | accordance with procedures prescribed by the System, | 21 | | to
the extent permitted under rules adopted by the | 22 | | System.
| 23 | | (2) The program shall provide for employer and State | 24 | | contributions to the self-managed plan in the following | 25 | | amounts: (i) for a member who does not file an election | 26 | | under subsection (e) of this Section, 3% of the amount of |
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| 1 | | earnings in excess of the limit specified in Section | 2 | | 15-112.1 for that year, to be paid by the actual employer, | 3 | | and (ii) for a member who files an election under | 4 | | subsection (e) of this Section, 7.1% of any amount of | 5 | | earnings up to and including the limit specified in Section | 6 | | 15-112.1 for that year, to be paid by the State, and 3% of | 7 | | any amount of earnings in excess of that limit for that | 8 | | year, to be paid by the actual employer.
| 9 | | The program shall provide for these employer and State | 10 | | contributions to be credited to each
self-managed plan | 11 | | participant at a rate of 7.6%
of the participating | 12 | | employee's salary , less the amount used by
the System to | 13 | | provide disability benefits for the employee.
The amounts | 14 | | so credited
shall be paid into the participant's | 15 | | self-managed plan accounts in a manner
to be prescribed by | 16 | | the System.
| 17 | | (3) An amount of employer contribution, not exceeding | 18 | | 1% of the participating
employee's salary, shall be used | 19 | | for the purpose of providing the disability
benefits of the | 20 | | System to the employee. Prior to the beginning of each plan
| 21 | | year under the self-managed plan, the Board of Trustees | 22 | | shall determine, as a
percentage of salary, the amount of | 23 | | employer contributions to be allocated
during that plan | 24 | | year for providing disability benefits for employees in the
| 25 | | self-managed plan.
| 26 | | (4) The State of Illinois shall make contributions by |
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| 1 | | appropriations to the
System of the employer contributions | 2 | | required for employees who participate in
the self-managed | 3 | | plan under this Section.
The amount required shall
be | 4 | | certified by the Board of Trustees of the System and paid | 5 | | by the State in
accordance with Section 15-165. The System | 6 | | shall not be obligated to remit the
required employer | 7 | | contributions to any of the insurance and annuity
| 8 | | companies, mutual fund
companies, banks, trust companies, | 9 | | financial institutions, or other sponsors
of any of the | 10 | | funding vehicles offered under the self-managed plan
until | 11 | | it has received the required employer contributions from | 12 | | the State. In
the event of a deficiency in the amount of | 13 | | State contributions, the System
shall implement those | 14 | | procedures described in subsection (c) of Section 15-165
to | 15 | | obtain the required funding from the General Revenue
Fund.
| 16 | | (i) Termination. The self-managed plan authorized under | 17 | | this
Section may be terminated by the System, subject to the | 18 | | terms
of any relevant
contracts, and the System shall have no | 19 | | obligation to
reestablish the self-managed plan under this | 20 | | Section. This Section does not
create a right
to continued | 21 | | participation in any self-managed plan set up by the System | 22 | | under
this Section. If the self-managed plan is terminated,
the | 23 | | participants shall have the right to participate in one of the | 24 | | other
retirement programs offered by the System and receive | 25 | | service credit in such
other retirement program for any years | 26 | | of employment following the termination.
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| 1 | | (j) Vesting; Withdrawal; Return to Service. A participant | 2 | | in the
self-managed plan becomes vested in the employer | 3 | | contributions credited to his
or her accounts in the | 4 | | self-managed plan on the earliest to occur of the
following: | 5 | | (1) completion of 5 years of service with an employer described | 6 | | in
Section 15-106; (2) the death of the participating employee | 7 | | while employed by
an employer described in Section 15-106, if | 8 | | the participant has completed at
least 1 1/2 years of service; | 9 | | or (3) the participant's election to retire and
apply the | 10 | | reciprocal provisions of Article 20 of this Code.
| 11 | | A participant in the self-managed plan who receives a | 12 | | distribution of his or
her vested amounts from the self-managed | 13 | | plan
while not yet eligible for retirement under this Article
| 14 | | (and Article 20, if applicable) shall forfeit all service | 15 | | credit
and accrued rights in the System; if subsequently | 16 | | re-employed, the participant
shall be considered a new
| 17 | | employee. If a former participant again becomes a participating | 18 | | employee (or
becomes employed by a participating system under | 19 | | Article 20 of this Code) and
continues as such for at least 2 | 20 | | years, all such rights, service credits, and
previous status as | 21 | | a participant shall be restored upon repayment of the amount
of | 22 | | the distribution, without interest.
| 23 | | (k) Benefit amounts. If an employee who is vested in | 24 | | employer
contributions terminates employment, the employee | 25 | | shall be entitled to a
benefit which is based on the
account | 26 | | values attributable to both employer and
employee |
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| 1 | | contributions and any
investment return thereon.
| 2 | | If an employee who is not vested in employer contributions | 3 | | terminates
employment, the employee shall be entitled to a | 4 | | benefit based solely on the
account values attributable to the | 5 | | employee's contributions and any investment
return thereon, | 6 | | and the employer contributions and any investment return
| 7 | | thereon shall be forfeited. Any employer contributions which | 8 | | are forfeited
shall be held in escrow by the
company investing | 9 | | those contributions and shall be used as directed by the
System | 10 | | for future allocations of employer contributions or for the | 11 | | restoration
of amounts previously forfeited by former | 12 | | participants who again become
participating employees.
| 13 | | (Source: P.A. 93-347, eff. 7-24-03.)
| 14 | | (40 ILCS 5/15-159.1 new)
| 15 | | Sec. 15-159.1. New Board created.
| 16 | | (a) Beginning July 1, 2014, the Board created under Section | 17 | | 15-159 is abolished and a board of 8 members shall
constitute | 18 | | the Board of Trustees authorized to carry out the provisions of
| 19 | | this Article. Each trustee shall be a participating employee of | 20 | | a
participating employer or an annuitant
of the Fund and no | 21 | | person shall be eligible to become a trustee after January
1, | 22 | | 1979 who does not have at least 8 years of creditable service.
| 23 | | (b) The board shall consist of representatives of various | 24 | | groups as
follows:
| 25 | | (1) Four trustees shall be a chief executive officer, |
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| 1 | | chief finance
officer, or other officer, executive or | 2 | | department head of a
participating employer, and each
such | 3 | | trustee shall be designated as an executive trustee.
| 4 | | (2) Three trustees shall be employees of a | 5 | | participating employer and each such trustee shall be | 6 | | designated
as an employee trustee.
| 7 | | (3) One trustee shall be an annuitant of the Fund, who | 8 | | shall be
designated the annuitant trustee.
| 9 | | (c) A person elected as a trustee shall qualify as a | 10 | | trustee, after
declaration by the Board that he has been duly | 11 | | elected, upon taking and
subscribing to the constitutional oath | 12 | | of office and filing same in the
office of the Fund.
| 13 | | (d) The term of office of each trustee shall begin upon | 14 | | January 1 of
the year following the year in which he is elected | 15 | | and shall continue
for a period of 5 years and until a | 16 | | successor has been elected and
qualified, or until prior | 17 | | resignation, death, incapacity or
disqualification.
| 18 | | (e) Any elected trustee (other than the annuitant trustee) | 19 | | shall be
disqualified immediately upon termination of | 20 | | employment with all participating
municipalities and | 21 | | instrumentalities thereof or upon any change in status which
| 22 | | removes any such trustee from all employments within the group | 23 | | he represents.
The annuitant trustee shall be disqualified upon | 24 | | termination of his or her
annuity.
| 25 | | (f) The trustees shall fill any vacancy in the Board by | 26 | | appointment,
for the period until the next election of |
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| 1 | | trustees, or, if the remaining
term is less than 2 years, for | 2 | | the remainder of the term, and until his
successor has been | 3 | | elected and qualified.
| 4 | | (g) Trustees shall serve without compensation, but shall be
| 5 | | reimbursed for any reasonable expenses incurred in attending | 6 | | meetings of
the Board and in performing duties on behalf of the | 7 | | Fund and for the
amount of any earnings withheld by any | 8 | | participating employer because of attendance at any Board
| 9 | | meeting.
| 10 | | (h) Each trustee shall be entitled to
one vote on any and | 11 | | all actions before the Board. At least 5 concurring votes
shall | 12 | | be necessary for every decision or action by the Board at any | 13 | | of its
meetings. No decision or action shall become effective | 14 | | unless presented and so
approved at a regular or duly called | 15 | | special meeting of the Board.
| 16 | | (40 ILCS 5/15-165.1 new) | 17 | | Sec. 15-165.1. To calculate the normal cost of benefits. To | 18 | | calculate the normal cost of each plan offered by the system as | 19 | | a percentage of earnings and to update those amounts at least | 20 | | every 3 years.
| 21 | | (40 ILCS 5/16-101) (from Ch. 108 1/2, par. 16-101)
| 22 | | Sec. 16-101. Creation of system ; consolidation . | 23 | | (a) Effective July 1, 1939 and until July 1, 2013 ,
there is | 24 | | created the "Teachers' Retirement System of the State of
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| 1 | | Illinois" for the purpose of providing retirement annuities and | 2 | | other
benefits for teachers, annuitants and beneficiaries. All | 3 | | of its business
shall be transacted, its funds invested, and | 4 | | its assets held in such name.
| 5 | | (b) On July 1, 2013, the retirement system established | 6 | | under this Article is merged and consolidated into a single | 7 | | retirement fund, to be known as the Illinois Teachers' | 8 | | Retirement Fund, which shall be established and administered as | 9 | | prescribed in Article 15 of this Code. | 10 | | (c) In preparation for that consolidation, the Board of | 11 | | Education and the City shall cooperate with the Board of | 12 | | Trustees of the Illinois Teachers' Retirement Fund. | 13 | | (d) At the time of consolidation, or as otherwise directed | 14 | | by the Board of the Illinois Teachers' Retirement Fund, all | 15 | | assets and liabilities belonging to the System established | 16 | | under this Article shall become the assets and liabilities of | 17 | | the Illinois Teachers' Retirement Fund, and all current or | 18 | | former members and beneficiaries of the System established | 19 | | under this Article shall be deemed current or former | 20 | | participants and beneficiaries of the Illinois Teachers' | 21 | | Retirement Fund. | 22 | | (e) The Illinois Teachers' Retirement Fund shall be the | 23 | | legal successor to the System established under this Article | 24 | | and it may exercise any of the rights and powers and perform | 25 | | any of the duties of that System. The Illinois Teachers' | 26 | | Retirement Fund may, in its discretion, either continue, |
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| 1 | | renegotiate, or terminate any personnel, service contract, | 2 | | lease, or other contract of the System established under this | 3 | | Article. | 4 | | (f) The consolidation of the System established under this | 5 | | Article shall not diminish or impair the benefits of any person | 6 | | who participated in that System, or of any such person's | 7 | | surviving spouse,
children, or other dependents. | 8 | | Benefits already payable by the System on June 30, 2013 | 9 | | shall become payable from the Illinois Teachers' Retirement | 10 | | Fund beginning on July 1, 2013, and shall not be subject to | 11 | | recalculation or combination due to the consolidation. | 12 | | Benefits that first become payable on or after July 1, 2013 | 13 | | shall be calculated and paid as provided in Article 15. | 14 | | The consolidation of the System established under this | 15 | | Article does not entitle any person to a recalculation of any | 16 | | benefit previously granted or a refund of any contribution | 17 | | previously paid. | 18 | | (Source: P.A. 83-1440.)
| 19 | | (40 ILCS 5/17-101) (from Ch. 108 1/2, par. 17-101)
| 20 | | Sec. 17-101. Creation of fund ; consolidation .
| 21 | | Until July 1, 2013, in In each city with a population over | 22 | | 500,000, there is created a Public
School Teachers' Pension and | 23 | | Retirement Fund to be maintained and
administered in the manner | 24 | | prescribed in this Article and to be known as
the Public School | 25 | | Teachers' Pension and Retirement Fund of ....(city).
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| 1 | | (b) On July 1, 2013, the Fund established under this | 2 | | Article is merged and consolidated into a single retirement | 3 | | fund, to be known as the Illinois Teachers' Retirement Fund, | 4 | | which shall be established and administered as prescribed in | 5 | | Article 15 of this Code. | 6 | | (c) In preparation for that consolidation, the Board of | 7 | | Education and the City shall cooperate with the Board of | 8 | | Trustees of the Illinois Teachers' Retirement Fund. | 9 | | (d) At the time of consolidation, or as otherwise directed | 10 | | by the Board of the Illinois Teachers' Retirement Fund, all | 11 | | assets and liabilities belonging to the Fund established under | 12 | | this Article shall become the assets and liabilities of the | 13 | | Illinois Teachers' Retirement Fund, and all current or former | 14 | | members and beneficiaries of the Fund established under this | 15 | | Article shall be deemed current or former participants and | 16 | | beneficiaries of the Illinois Teachers' Retirement Fund. | 17 | | (e) The Illinois Teachers' Retirement Fund shall be the | 18 | | legal successor to the Fund established under this Article and | 19 | | it may exercise any of the rights and powers and perform any of | 20 | | the duties of that pension fund. The Illinois Teachers' | 21 | | Retirement Fund may, in its discretion, either continue, | 22 | | renegotiate, or terminate any personnel, service contract, | 23 | | lease, or other contract of the Fund established under this | 24 | | Article. | 25 | | (f) The consolidation of the pension fund established under | 26 | | this Article shall not diminish or impair the benefits of any |
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| 1 | | person who participated in that pension fund, or of any such | 2 | | person's surviving spouse,
children, or other dependents. | 3 | | Benefits already payable by this Fund on June 30, 2013 | 4 | | shall become payable from the Illinois Teachers' Retirement | 5 | | Fund beginning on July 1, 2013, and shall not be subject to | 6 | | recalculation or combination due to the consolidation. | 7 | | Benefits that first become payable on or after July 1, 2013 | 8 | | shall be calculated as provided in Article 15. | 9 | | The consolidation of the pension fund established under | 10 | | this Article does not entitle any person to a recalculation of | 11 | | any benefit previously granted or a refund of any contribution | 12 | | previously paid. | 13 | | (Source: Laws 1963, p. 161.)
| 14 | | Section 90. The State Mandates Act is amended by adding | 15 | | Section 8.37 as follows: | 16 | | (30 ILCS 805/8.37 new) | 17 | | Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8 | 18 | | of this Act, no reimbursement by the State is required for the | 19 | | implementation of any mandate created by this amendatory Act of | 20 | | the 98th General Assembly. | 21 | | Section 97. Inseverability. The provisions of this Act are | 22 | | inseverable.
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| 1 | | Section 99. Effective date. This Act takes effect upon | 2 | | becoming law.".
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