SB2404 98TH GENERAL ASSEMBLY

  
  

 


 
98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2404

 

Introduced 2/15/2013, by Sen. Linda Holmes

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Budget Stabilization Act. Provides for transfers from the General Revenue Fund to the Pension Stabilization Fund according to a specified schedule beginning in FY 2016 and continuing until FY 2045 or until the retirement funds have achieved a 100% funding ratio, whichever is earlier. Amends the General Assembly, State Employee, State Universities and Downstate Teacher Articles of the Illinois Pension Code. Changes the manner in which the annual required State contribution is calculated so that the the affected systems are 100% funded by 2045. Provides that employee contributions to the retirement systems are increased an additional 1% on July 1, 2013 and 2% on July 1, 2014. Provides that the State is contractually obligated to each retirement plan participant and retiree to provide funding to the retirement systems according to the specified amortization schedule beginning in FY 2016 and continuing until FY 2045 or until the retirement funds have achieved a 100% funding ratio, whichever is earlier, in addition to the annual required State contribution certified by the Board for each fiscal year. Provides that each retirement system has the right to bring a mandamus action against the State to compel the State to make any installment of the annual required State contribution certified by the Board and the transfers required under the Budget Stabilization Act. Further provides that if a retirement system shall fail to bring a mandamus action against the State to compel the State to make any required installment, then any participant or retiree may bring such a mandamus action. Effective July 1, 2013.


LRB098 09018 EFG 39154 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Budget Stabilization Act is amended by
5changing 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
9special fund in the State treasury. Moneys in the fund shall be
10used for the sole purpose of making payments to the designated
11retirement systems as provided in Section 25.
12    (b) For each fiscal year when the General Assembly's
13appropriations and transfers or diversions as required by law
14from general funds do not exceed 99% of the estimated general
15funds revenues pursuant to subsection (a) of Section 10, the
16Comptroller shall transfer from the General Revenue Fund as
17provided by this Section a total amount equal to 0.5% of the
18estimated general funds revenues to the Pension Stabilization
19Fund.
20    (c) For each fiscal year through Fiscal Year 2013 when the
21General Assembly's appropriations and transfers or diversions
22as required by law from general funds do not exceed 98% of the
23estimated general funds revenues pursuant to subsection (b) of

 

 

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1Section 10, the Comptroller shall transfer from the General
2Revenue Fund as provided by this Section a total amount equal
3to 1.0% of the estimated general funds revenues to the Pension
4Stabilization Fund.
5    (c-5) In Fiscal Year 2016 and each fiscal year thereafter,
6the State Comptroller shall order transferred and the State
7Treasurer shall transfer the following amounts from the General
8Revenue Fund to the Pension Stabilization Fund:
9    in Fiscal Year 2016, $441,429,372;
10    in Fiscal Year 2017, $150,545,372;
11    in Fiscal Year 2018, $179,267,872;
12    in Fiscal Year 2019, $211,777,872;
13    in Fiscal Year 2020, $1,123,333,372;
14    in Fiscal Year 2021, $1,084,470,872;
15    in Fiscal Year 2022, $1,048,083,372;
16    in Fiscal Year 2023, $1,014,170,872;
17    in Fiscal Year 2024, $957,733,372;
18    in Fiscal Year 2025, $905,683,372;
19    in Fiscal Year 2026, $882,458,372;
20    in Fiscal Year 2027, $861,783,372;
21    in Fiscal Year 2028, $818,658,372;
22    in Fiscal Year 2029, $779,358,372;
23    in Fiscal Year 2030, $718,883,372;
24    in Fiscal Year 2031, $663,508,372;
25    in Fiscal Year 2032, $638,233,372;
26    in Fiscal Year 2033, $641,783,372;

 

 

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1    in Fiscal Year 2034, $1,797,883,372;
2    in Fiscal Year 2035, $1,797,883,372;
3    in Fiscal Year 2036, $1,797,883,372;
4    in Fiscal Year 2037, $1,797,883,372;
5    in Fiscal Year 2038, $1,797,883,372;
6    in Fiscal Year 2039, $1,797,883,372;
7    in Fiscal Year 2040, $1,797,883,372;
8    in Fiscal Year 2041, $1,797,883,372;
9    in Fiscal Year 2042, $1,797,883,372;
10    in Fiscal Year 2043, $1,797,883,372;
11    in Fiscal Year 2044, $1,797,883,372; and
12    in Fiscal Year 2045, $1,797,883,372.
13    (c-10) The transfers made pursuant to subsection (c-5) of
14this Section shall continue until Fiscal Year 2045 or until
15each of the designated retirement systems, as defined in
16Section 25, has achieved a funding ratio of at least 100%,
17whichever occurs first.
18    (d) The Comptroller shall transfer 1/12 of the total amount
19to be transferred each fiscal year under this Section into the
20Pension Stabilization Fund on the first day of each month of
21that fiscal year or as soon thereafter as possible; except that
22the final transfer of the fiscal year shall be made as soon as
23practical after the August 31 following the end of the fiscal
24year.
25    Until Fiscal Year 2014, before Before the final transfer
26for a fiscal year is made, the Comptroller shall reconcile the

 

 

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1estimated general funds revenues used in calculating the other
2transfers under this Section for that fiscal year with the
3actual general funds revenues for that fiscal year. The final
4transfer for the fiscal year shall be adjusted so that the
5total amount transferred under this Section for that fiscal
6year is equal to the percentage specified in subsection (b) or
7(c) of this Section, whichever is applicable, of the actual
8general funds revenues for that fiscal year. The actual general
9funds revenues for the fiscal year shall be calculated in a
10manner consistent with subsection (c) of Section 10 of this
11Act.
12(Source: P.A. 94-839, eff. 6-6-06.)
 
13    (30 ILCS 122/25)
14    Sec. 25. Transfers from the Pension Stabilization Fund.
15    (a) As used in this Section, "designated retirement
16systems" means:
17        (1) the State Employees' Retirement System of
18    Illinois;
19        (2) the Teachers' Retirement System of the State of
20    Illinois;
21        (3) the State Universities Retirement System;
22        (4) the Judges Retirement System of Illinois; and
23        (5) the General Assembly Retirement System.
24    (b) As soon as may be practical after any money is
25deposited into the Pension Stabilization Fund, the State

 

 

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1Comptroller shall apportion the deposited amount among the
2designated retirement systems and the State Comptroller and
3State Treasurer shall pay the apportioned amounts to the
4designated retirement systems. The amount deposited shall be
5apportioned among the designated retirement systems in
6proportion to their respective certified State contributions
7for the State fiscal year in which the payment is made to those
8systems in the same proportion as their respective portions of
9the total actuarial reserve deficiency of the designated
10retirement systems, as most recently determined by the
11Governor's Office of Management and Budget. Amounts received by
12a designated retirement system under this Section shall be used
13for funding the unfunded liabilities of the retirement system.
14Payments under this Section are authorized by the continuing
15appropriation under Section 1.7 of the State Pension Funds
16Continuing Appropriation Act.
17    (c) At the request of the State Comptroller, the Governor's
18Office of Management and Budget shall determine the individual
19and total actuarial reserve deficiencies of the designated
20retirement systems. For this purpose, the Governor's Office of
21Management and Budget shall consider the latest available audit
22and actuarial reports of each of the retirement systems and the
23relevant reports and statistics of the Public Pension Division
24of the Department of Financial and Professional Regulation.
25    (d) Payments to the designated retirement systems under
26this Section shall be in addition to, and not in lieu of, any

 

 

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1State contributions required under Section 2-124, 14-131,
215-155, 16-158, or 18-131 of the Illinois Pension Code.
3(Source: P.A. 94-839, eff. 6-6-06.)
 
4    Section 15. The Illinois Pension Code is amended by adding
5Sections 2-105.1, 2-105.2, 14-103.40, 14-103.41, 15-107.1,
615-107.2, 16-106.4, 16-106.5, and 16-158.2 and changing
7Sections 1-103.3, 2-124, 2-125, 2-126, 14-131, 14-132, 14-133,
815-136, 15-155, 15-156, 15-157, 16-133, 16-152, and 16-158 as
9follows:
 
10    (40 ILCS 5/1-103.3)
11    Sec. 1-103.3. Application of 1994 amendment; funding
12standard.
13    (a) The provisions of Public Act 88-593 this amendatory Act
14of 1994 that change the method of calculating, certifying, and
15paying the required State contributions to the retirement
16systems established under Articles 2, 14, 15, 16, and 18 shall
17first apply to the State contributions required for State
18fiscal year 1996.
19    (b) (Blank) The General Assembly declares that a funding
20ratio (the ratio of a retirement system's total assets to its
21total actuarial liabilities) of 90% is an appropriate goal for
22State-funded retirement systems in Illinois, and it finds that
23a funding ratio of 90% is now the generally-recognized norm
24throughout the nation for public employee retirement systems

 

 

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1that are considered to be financially secure and funded in an
2appropriate and responsible manner.
3    (c) Every 5 years, beginning in 1999, the Commission on
4Government Forecasting and Accountability, in consultation
5with the affected retirement systems and the Governor's Office
6of Management and Budget (formerly Bureau of the Budget), shall
7consider and determine whether the funding goals 90% funding
8ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
9continue subsection (b) continues to represent an appropriate
10funding goals goal for those State-funded retirement systems in
11Illinois, and it shall report its findings and recommendations
12on this subject to the Governor and the General Assembly.
13(Source: P.A. 93-1067, eff. 1-15-05.)
 
14    (40 ILCS 5/2-105.1 new)
15    Sec. 2-105.1. Tier I participant."Tier I participant": A
16participant who first became a participant before January 1,
172011 and who is not a Tier I retiree.
 
18    (40 ILCS 5/2-105.2 new)
19    Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
20former Tier I participant who is receiving a retirement
21annuity.
 
22    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
23    Sec. 2-124. Contributions by State.

 

 

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1    (a) The State shall make contributions to the System by
2appropriations of amounts which, together with the
3contributions of participants, interest earned on investments,
4and other income will meet the cost of maintaining and
5administering the System on a 100% 90% funded basis in
6accordance with actuarial recommendations.
7    (b) The Board shall determine the amount of State
8contributions required for each fiscal year on the basis of the
9actuarial tables and other assumptions adopted by the Board and
10the prescribed rate of interest, using the formula in
11subsection (c).
12    (c) For State fiscal years 2015 through 2045, the minimum
13contribution to the System to be made by the State for each
14fiscal year shall be an amount determined by the System to be
15sufficient to bring the total assets of the System up to 100%
16of the total actuarial liabilities of the System by the end of
17State fiscal year 2045. In making these determinations, the
18required State contribution shall be calculated each year as a
19level percentage of payroll over the years remaining to and
20including fiscal year 2045 and shall be determined under the
21projected unit credit actuarial cost method.
22    For State fiscal years 2012 through 2014 2045, the minimum
23contribution to the System to be made by the State for each
24fiscal year shall be an amount determined by the System to be
25sufficient to bring the total assets of the System up to 90% of
26the total actuarial liabilities of the System by the end of

 

 

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1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of payroll over the years remaining to and
4including fiscal year 2045 and shall be determined under the
5projected unit credit actuarial cost method.
6    For State fiscal years 1996 through 2005, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9so that by State fiscal year 2011, the State is contributing at
10the rate required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2006 is
13$4,157,000.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2007 is
16$5,220,300.
17    For each of State fiscal years 2008 through 2009, the State
18contribution to the System, as a percentage of the applicable
19employee payroll, shall be increased in equal annual increments
20from the required State contribution for State fiscal year
212007, so that by State fiscal year 2011, the State is
22contributing at the rate otherwise required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2010 is
25$10,454,000 and shall be made from the proceeds of bonds sold
26in fiscal year 2010 pursuant to Section 7.2 of the General

 

 

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1Obligation Bond Act, less (i) the pro rata share of bond sale
2expenses determined by the System's share of total bond
3proceeds, (ii) any amounts received from the General Revenue
4Fund in fiscal year 2010, and (iii) any reduction in bond
5proceeds due to the issuance of discounted bonds, if
6applicable.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011 is
9the amount recertified by the System on or before April 1, 2011
10pursuant to Section 2-134 and shall be made from the proceeds
11of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
12the General Obligation Bond Act, less (i) the pro rata share of
13bond sale expenses determined by the System's share of total
14bond proceeds, (ii) any amounts received from the General
15Revenue Fund in fiscal year 2011, and (iii) any reduction in
16bond proceeds due to the issuance of discounted bonds, if
17applicable.
18    Beginning in State fiscal year 2046, the minimum State
19contribution for each fiscal year shall be the amount needed to
20maintain the total assets of the System at 100% 90% of the
21total actuarial liabilities of the System.
22    Amounts received by the System pursuant to Section 25 of
23the Budget Stabilization Act or Section 8.12 of the State
24Finance Act in any fiscal year do not reduce and do not
25constitute payment of any portion of the minimum State
26contribution required under this Article in that fiscal year.

 

 

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1Such amounts shall not reduce, and shall not be included in the
2calculation of, the required State contributions under this
3Article in any future year until the System has reached a
4funding ratio of at least 80% 90%. A reference in this Article
5to the "required State contribution" or any substantially
6similar term does not include or apply to any amounts payable
7to the System under Section 25 of the Budget Stabilization Act.
8    Notwithstanding any other provision of this Code or the
9Budget Stabilization Act, amounts transferred to the System
10pursuant to the Budget Stabilization Act after the effective
11date of this amendatory Act of the 98th General Assembly do not
12reduce and do not constitute payment of any portion of the
13required State contribution under this Article in that fiscal
14year. Such amounts shall not reduce, and shall not be included
15in the calculation of, the required State contributions under
16this Article in any future year until the System has received
17payment of contributions pursuant to the Budget Stabilization
18Act.
19    Notwithstanding any other provision of this Section, the
20required State contribution for State fiscal year 2005 and for
21fiscal year 2008 and each fiscal year thereafter through State
22fiscal year 2014, as calculated under this Section and
23certified under Section 2-134, shall not exceed an amount equal
24to (i) the amount of the required State contribution that would
25have been calculated under this Section for that fiscal year if
26the System had not received any payments under subsection (d)

 

 

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1of Section 7.2 of the General Obligation Bond Act, minus (ii)
2the portion of the State's total debt service payments for that
3fiscal year on the bonds issued in fiscal year 2003 for the
4purposes of that Section 7.2, as determined and certified by
5the Comptroller, that is the same as the System's portion of
6the total moneys distributed under subsection (d) of Section
77.2 of the General Obligation Bond Act. In determining this
8maximum for State fiscal years 2008 through 2010, however, the
9amount referred to in item (i) shall be increased, as a
10percentage of the applicable employee payroll, in equal
11increments calculated from the sum of the required State
12contribution for State fiscal year 2007 plus the applicable
13portion of the State's total debt service payments for fiscal
14year 2007 on the bonds issued in fiscal year 2003 for the
15purposes of Section 7.2 of the General Obligation Bond Act, so
16that, by State fiscal year 2011, the State is contributing at
17the rate otherwise required under this Section.
18    (d) For purposes of determining the required State
19contribution to the System, the value of the System's assets
20shall be equal to the actuarial value of the System's assets,
21which shall be calculated as follows:
22    As of June 30, 2008, the actuarial value of the System's
23assets shall be equal to the market value of the assets as of
24that date. In determining the actuarial value of the System's
25assets for fiscal years after June 30, 2008, any actuarial
26gains or losses from investment return incurred in a fiscal

 

 

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1year shall be recognized in equal annual amounts over the
25-year period following that fiscal year.
3    (e) For purposes of determining the required State
4contribution to the system for a particular year, the actuarial
5value of assets shall be assumed to earn a rate of return equal
6to the system's actuarially assumed rate of return.
7(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
896-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
97-13-12.)
 
10    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)
11    Sec. 2-125. Obligations of State; funding guarantee.
12    (a) The payment of (1) the required State contributions,
13(2) all benefits granted under this system and (3) all expenses
14of administration and operation are obligations of the State to
15the extent specified in this Article.
16    (b) All income, interest and dividends derived from
17deposits and investments shall be credited to the account of
18the system in the State Treasury and used to pay benefits under
19this Article.
20    (c) Pursuant to Article XIII, Section 5 of the 1970
21Constitution of the State of Illinois, beginning on July 1,
222013, the State shall, as a retirement benefit to each
23participant and annuitant of the System be contractually
24obligated to the System (as a fiduciary and trustee of the
25participants and annuitants) to pay the annual required State

 

 

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1contribution, as determined by the Board of the System using
2generally accepted actuarial principles, as is necessary to
3bring the total assets of the System up to 100% of the total
4actuarial liabilities of the System by the end of State fiscal
5year 2045. As a further retirement benefit and contractual
6obligation, each fiscal year, the State shall pay to each
7designated retirement system the annual required State
8contribution certified by the Board for that fiscal year.
9Payments of the annual required State contribution for each
10fiscal year shall be made in equal monthly installments.
11Additionally, beginning in fiscal year 2014, State transfers to
12the Pension Stabilization Fund pursuant to Section 20 of the
13Budget Stabilization Act and payments to the System pursuant to
14Section 25 of the Budget Stabilization Act shall be further
15retirement benefits and contractual obligations. The transfers
16and payments prescribed in Sections 20 and 25 of the Budget
17Stabilization Act shall not be used by the retirement system
18when calculation any pension payment until the System has
19reached a funded level of 100%. This Section and the security
20it provides to participants and annuitants is intended to be,
21and is, a contractual right that is part of the pension
22benefits provided to the participants and annuitants.
23Notwithstanding anything to the contrary in the Court of Claims
24Act or any other law, a designated retirement system has the
25exclusive right to and shall bring a mandamus action in the
26Circuit Court of Sangamon County against the State to compel

 

 

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1the State to make any installment of the annual required State
2contribution required by this Section, irrespective of other
3remedies that may be available to the System. Each member or
4annuitant of the System has the right to in any judicial
5district in which the System maintains an office if the System
6fails to bring an action specified in this Section,
7irrespective of other remedies that may be available to the
8member or annuitant. In making these determinations, the
9required State contribution shall be calculated each year as a
10level percentage of payroll over the years remaining to and
11including fiscal year 2045 and shall be determined under the
12projected unit credit actuarial cost method.
13(Source: P.A. 83-1440.)
 
14    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
15    Sec. 2-126. Contributions by participants.
16    (a) Each participant shall contribute toward the cost of
17his or her retirement annuity a percentage of each payment of
18salary received by him or her for service as a member as
19follows: for service between October 31, 1947 and January 1,
201959, 5%; for service between January 1, 1959 and June 30,
211969, 6%; for service between July 1, 1969 and January 10,
221973, 6 1/2%; for service after January 10, 1973, 7%; for
23service after December 31, 1981, 8 1/2%.
24    (a-5) In addition to the contributions otherwise required
25under this Article, each Tier I participant shall also make the

 

 

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1following contributions toward the cost of his or her
2retirement annuity from each payment of salary received by him
3or her for service as a member:
4        (1) beginning July 1, 2013 and through June 30, 2014,
5    1% of salary; and
6        (2) beginning on July 1, 2014, 2% of salary.
7    (b) Beginning August 2, 1949, each male participant, and
8from July 1, 1971, each female participant shall contribute
9towards the cost of the survivor's annuity 2% of salary.
10    A participant who has no eligible survivor's annuity
11beneficiary may elect to cease making contributions for
12survivor's annuity under this subsection. A survivor's annuity
13shall not be payable upon the death of a person who has made
14this election, unless prior to that death the election has been
15revoked and the amount of the contributions that would have
16been paid under this subsection in the absence of the election
17is paid to the System, together with interest at the rate of 4%
18per year from the date the contributions would have been made
19to the date of payment.
20    (c) Beginning July 1, 1967, each participant shall
21contribute 1% of salary towards the cost of automatic increase
22in annuity provided in Section 2-119.1. These contributions
23shall be made concurrently with contributions for retirement
24annuity purposes.
25    (d) In addition, each participant serving as an officer of
26the General Assembly shall contribute, for the same purposes

 

 

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1and at the same rates as are required of a regular participant,
2on each additional payment received as an officer. If the
3participant serves as an officer for at least 2 but less than 4
4years, he or she shall contribute an amount equal to the amount
5that would have been contributed had the participant served as
6an officer for 4 years. Persons who serve as officers in the
787th General Assembly but cannot receive the additional payment
8to officers because of the ban on increases in salary during
9their terms may nonetheless make contributions based on those
10additional payments for the purpose of having the additional
11payments included in their highest salary for annuity purposes;
12however, persons electing to make these additional
13contributions must also pay an amount representing the
14corresponding employer contributions, as calculated by the
15System.
16    (e) Notwithstanding any other provision of this Article,
17the required contribution of a participant who first becomes a
18participant on or after January 1, 2011 shall not exceed the
19contribution that would be due under this Article if that
20participant's highest salary for annuity purposes were
21$106,800, plus any increases in that amount under Section
222-108.1.
23(Source: P.A. 96-1490, eff. 1-1-11.)
 
24    (40 ILCS 5/14-103.40 new)
25    Sec. 14-103.40. Tier I member. "Tier I member": A member of

 

 

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1this System who first became a member or participant before
2January 1, 2011 under any reciprocal retirement system or
3pension fund established under this Code other than a
4retirement system or pension fund established under Article 2,
53, 4, 5, 6, or 18 of this Code and who is not a Tier I retiree.
 
6    (40 ILCS 5/14-103.41 new)
7    Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
8Tier I member who is receiving a retirement annuity.
 
9    (40 ILCS 5/14-131)
10    Sec. 14-131. Contributions by State.
11    (a) The State shall make contributions to the System by
12appropriations of amounts which, together with other employer
13contributions from trust, federal, and other funds, employee
14contributions, investment income, and other income, will be
15sufficient to meet the cost of maintaining and administering
16the System on a 100% 90% funded basis in accordance with
17actuarial recommendations.
18    For the purposes of this Section and Section 14-135.08,
19references to State contributions refer only to employer
20contributions and do not include employee contributions that
21are picked up or otherwise paid by the State or a department on
22behalf of the employee.
23    (b) The Board shall determine the total amount of State
24contributions required for each fiscal year on the basis of the

 

 

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1actuarial tables and other assumptions adopted by the Board,
2using the formula in subsection (e).
3    The Board shall also determine a State contribution rate
4for each fiscal year, expressed as a percentage of payroll,
5based on the total required State contribution for that fiscal
6year (less the amount received by the System from
7appropriations under Section 8.12 of the State Finance Act and
8Section 1 of the State Pension Funds Continuing Appropriation
9Act, if any, for the fiscal year ending on the June 30
10immediately preceding the applicable November 15 certification
11deadline), the estimated payroll (including all forms of
12compensation) for personal services rendered by eligible
13employees, and the recommendations of the actuary.
14    For the purposes of this Section and Section 14.1 of the
15State Finance Act, the term "eligible employees" includes
16employees who participate in the System, persons who may elect
17to participate in the System but have not so elected, persons
18who are serving a qualifying period that is required for
19participation, and annuitants employed by a department as
20described in subdivision (a)(1) or (a)(2) of Section 14-111.
21    (c) Contributions shall be made by the several departments
22for each pay period by warrants drawn by the State Comptroller
23against their respective funds or appropriations based upon
24vouchers stating the amount to be so contributed. These amounts
25shall be based on the full rate certified by the Board under
26Section 14-135.08 for that fiscal year. From the effective date

 

 

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1of this amendatory Act of the 93rd General Assembly through the
2payment of the final payroll from fiscal year 2004
3appropriations, the several departments shall not make
4contributions for the remainder of fiscal year 2004 but shall
5instead make payments as required under subsection (a-1) of
6Section 14.1 of the State Finance Act. The several departments
7shall resume those contributions at the commencement of fiscal
8year 2005.
9    (c-1) Notwithstanding subsection (c) of this Section, for
10fiscal years 2010, 2012, and 2013 only, contributions by the
11several departments are not required to be made for General
12Revenue Funds payrolls processed by the Comptroller. Payrolls
13paid by the several departments from all other State funds must
14continue to be processed pursuant to subsection (c) of this
15Section.
16    (c-2) For State fiscal years 2010, 2012, and 2013 only, on
17or as soon as possible after the 15th day of each month, the
18Board shall submit vouchers for payment of State contributions
19to the System, in a total monthly amount of one-twelfth of the
20fiscal year General Revenue Fund contribution as certified by
21the System pursuant to Section 14-135.08 of the Illinois
22Pension Code.
23    (d) If an employee is paid from trust funds or federal
24funds, the department or other employer shall pay employer
25contributions from those funds to the System at the certified
26rate, unless the terms of the trust or the federal-State

 

 

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1agreement preclude the use of the funds for that purpose, in
2which case the required employer contributions shall be paid by
3the State. From the effective date of this amendatory Act of
4the 93rd General Assembly through the payment of the final
5payroll from fiscal year 2004 appropriations, the department or
6other employer shall not pay contributions for the remainder of
7fiscal year 2004 but shall instead make payments as required
8under subsection (a-1) of Section 14.1 of the State Finance
9Act. The department or other employer shall resume payment of
10contributions at the commencement of fiscal year 2005.
11    (e) For State fiscal years 2015 through 2045, the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the System to be
14sufficient to bring the total assets of the System up to 100%
15of the total actuarial liabilities of the System by the end of
16State fiscal year 2045. In making these determinations, the
17required State contribution shall be calculated each year as a
18level percentage of payroll over the years remaining to and
19including fiscal year 2045 and shall be determined under the
20projected unit credit actuarial cost method.
21    For State fiscal years 2012 through 2014 2045, the minimum
22contribution to the System to be made by the State for each
23fiscal year shall be an amount determined by the System to be
24sufficient to bring the total assets of the System up to 90% of
25the total actuarial liabilities of the System by the end of
26State fiscal year 2045. In making these determinations, the

 

 

SB2404- 22 -LRB098 09018 EFG 39154 b

1required State contribution shall be calculated each year as a
2level percentage of payroll over the years remaining to and
3including fiscal year 2045 and shall be determined under the
4projected unit credit actuarial cost method.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8so that by State fiscal year 2011, the State is contributing at
9the rate required under this Section; except that (i) for State
10fiscal year 1998, for all purposes of this Code and any other
11law of this State, the certified percentage of the applicable
12employee payroll shall be 5.052% for employees earning eligible
13creditable service under Section 14-110 and 6.500% for all
14other employees, notwithstanding any contrary certification
15made under Section 14-135.08 before the effective date of this
16amendatory Act of 1997, and (ii) in the following specified
17State fiscal years, the State contribution to the System shall
18not be less than the following indicated percentages of the
19applicable employee payroll, even if the indicated percentage
20will produce a State contribution in excess of the amount
21otherwise required under this subsection and subsection (a):
229.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
232002; 10.6% in FY 2003; and 10.8% in FY 2004.
24    Notwithstanding any other provision of this Article, the
25total required State contribution to the System for State
26fiscal year 2006 is $203,783,900.

 

 

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1    Notwithstanding any other provision of this Article, the
2total required State contribution to the System for State
3fiscal year 2007 is $344,164,400.
4    For each of State fiscal years 2008 through 2009, the State
5contribution to the System, as a percentage of the applicable
6employee payroll, shall be increased in equal annual increments
7from the required State contribution for State fiscal year
82007, so that by State fiscal year 2011, the State is
9contributing at the rate otherwise required under this Section.
10    Notwithstanding any other provision of this Article, the
11total required State General Revenue Fund contribution for
12State fiscal year 2010 is $723,703,100 and shall be made from
13the proceeds of bonds sold in fiscal year 2010 pursuant to
14Section 7.2 of the General Obligation Bond Act, less (i) the
15pro rata share of bond sale expenses determined by the System's
16share of total bond proceeds, (ii) any amounts received from
17the General Revenue Fund in fiscal year 2010, and (iii) any
18reduction in bond proceeds due to the issuance of discounted
19bonds, if applicable.
20    Notwithstanding any other provision of this Article, the
21total required State General Revenue Fund contribution for
22State fiscal year 2011 is the amount recertified by the System
23on or before April 1, 2011 pursuant to Section 14-135.08 and
24shall be made from the proceeds of bonds sold in fiscal year
252011 pursuant to Section 7.2 of the General Obligation Bond
26Act, less (i) the pro rata share of bond sale expenses

 

 

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1determined by the System's share of total bond proceeds, (ii)
2any amounts received from the General Revenue Fund in fiscal
3year 2011, and (iii) any reduction in bond proceeds due to the
4issuance of discounted bonds, if applicable.
5    Beginning in State fiscal year 2046, the minimum State
6contribution for each fiscal year shall be the amount needed to
7maintain the total assets of the System at 90% of the total
8actuarial liabilities of the System.
9    Amounts received by the System pursuant to Section 25 of
10the Budget Stabilization Act or Section 8.12 of the State
11Finance Act in any fiscal year do not reduce and do not
12constitute payment of any portion of the minimum State
13contribution required under this Article in that fiscal year.
14Such amounts shall not reduce, and shall not be included in the
15calculation of, the required State contributions under this
16Article in any future year until the System has reached a
17funding ratio of at least 100% 90%. A reference in this Article
18to the "required State contribution" or any substantially
19similar term does not include or apply to any amounts payable
20to the System under Section 25 of the Budget Stabilization Act.
21    Notwithstanding any other provision of this Code or the
22Budget Stabilization Act, amounts transferred to the System
23pursuant to the Budget Stabilization Act after the effective
24date of this amendatory Act of the 98th General Assembly do not
25reduce and do not constitute payment of any portion of the
26required State contribution under this Article in that fiscal

 

 

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1year. Such amounts shall not reduce, and shall not be included
2in the calculation of, the required State contributions under
3this Article in any future year until the System has received
4payment of contributions pursuant to the Budget Stabilization
5Act.
6    Notwithstanding any other provision of this Section, the
7required State contribution for State fiscal year 2005 and for
8fiscal year 2008 and each fiscal year thereafter through State
9fiscal year 2014, as calculated under this Section and
10certified under Section 14-135.08, shall not exceed an amount
11equal to (i) the amount of the required State contribution that
12would have been calculated under this Section for that fiscal
13year if the System had not received any payments under
14subsection (d) of Section 7.2 of the General Obligation Bond
15Act, minus (ii) the portion of the State's total debt service
16payments for that fiscal year on the bonds issued in fiscal
17year 2003 for the purposes of that Section 7.2, as determined
18and certified by the Comptroller, that is the same as the
19System's portion of the total moneys distributed under
20subsection (d) of Section 7.2 of the General Obligation Bond
21Act. In determining this maximum for State fiscal years 2008
22through 2010, however, the amount referred to in item (i) shall
23be increased, as a percentage of the applicable employee
24payroll, in equal increments calculated from the sum of the
25required State contribution for State fiscal year 2007 plus the
26applicable portion of the State's total debt service payments

 

 

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1for fiscal year 2007 on the bonds issued in fiscal year 2003
2for the purposes of Section 7.2 of the General Obligation Bond
3Act, so that, by State fiscal year 2011, the State is
4contributing at the rate otherwise required under this Section.
5    (f) After the submission of all payments for eligible
6employees from personal services line items in fiscal year 2004
7have been made, the Comptroller shall provide to the System a
8certification of the sum of all fiscal year 2004 expenditures
9for personal services that would have been covered by payments
10to the System under this Section if the provisions of this
11amendatory Act of the 93rd General Assembly had not been
12enacted. Upon receipt of the certification, the System shall
13determine the amount due to the System based on the full rate
14certified by the Board under Section 14-135.08 for fiscal year
152004 in order to meet the State's obligation under this
16Section. The System shall compare this amount due to the amount
17received by the System in fiscal year 2004 through payments
18under this Section and under Section 6z-61 of the State Finance
19Act. If the amount due is more than the amount received, the
20difference shall be termed the "Fiscal Year 2004 Shortfall" for
21purposes of this Section, and the Fiscal Year 2004 Shortfall
22shall be satisfied under Section 1.2 of the State Pension Funds
23Continuing Appropriation Act. If the amount due is less than
24the amount received, the difference shall be termed the "Fiscal
25Year 2004 Overpayment" for purposes of this Section, and the
26Fiscal Year 2004 Overpayment shall be repaid by the System to

 

 

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1the Pension Contribution Fund as soon as practicable after the
2certification.
3    (g) For purposes of determining the required State
4contribution to the System, the value of the System's assets
5shall be equal to the actuarial value of the System's assets,
6which shall be calculated as follows:
7    As of June 30, 2008, the actuarial value of the System's
8assets shall be equal to the market value of the assets as of
9that date. In determining the actuarial value of the System's
10assets for fiscal years after June 30, 2008, any actuarial
11gains or losses from investment return incurred in a fiscal
12year shall be recognized in equal annual amounts over the
135-year period following that fiscal year.
14    (h) For purposes of determining the required State
15contribution to the System for a particular year, the actuarial
16value of assets shall be assumed to earn a rate of return equal
17to the System's actuarially assumed rate of return.
18    (i) After the submission of all payments for eligible
19employees from personal services line items paid from the
20General Revenue Fund in fiscal year 2010 have been made, the
21Comptroller shall provide to the System a certification of the
22sum of all fiscal year 2010 expenditures for personal services
23that would have been covered by payments to the System under
24this Section if the provisions of this amendatory Act of the
2596th General Assembly had not been enacted. Upon receipt of the
26certification, the System shall determine the amount due to the

 

 

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1System based on the full rate certified by the Board under
2Section 14-135.08 for fiscal year 2010 in order to meet the
3State's obligation under this Section. The System shall compare
4this amount due to the amount received by the System in fiscal
5year 2010 through payments under this Section. If the amount
6due is more than the amount received, the difference shall be
7termed the "Fiscal Year 2010 Shortfall" for purposes of this
8Section, and the Fiscal Year 2010 Shortfall shall be satisfied
9under Section 1.2 of the State Pension Funds Continuing
10Appropriation Act. If the amount due is less than the amount
11received, the difference shall be termed the "Fiscal Year 2010
12Overpayment" for purposes of this Section, and the Fiscal Year
132010 Overpayment shall be repaid by the System to the General
14Revenue Fund as soon as practicable after the certification.
15    (j) After the submission of all payments for eligible
16employees from personal services line items paid from the
17General Revenue Fund in fiscal year 2011 have been made, the
18Comptroller shall provide to the System a certification of the
19sum of all fiscal year 2011 expenditures for personal services
20that would have been covered by payments to the System under
21this Section if the provisions of this amendatory Act of the
2296th General Assembly had not been enacted. Upon receipt of the
23certification, the System shall determine the amount due to the
24System based on the full rate certified by the Board under
25Section 14-135.08 for fiscal year 2011 in order to meet the
26State's obligation under this Section. The System shall compare

 

 

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1this amount due to the amount received by the System in fiscal
2year 2011 through payments under this Section. If the amount
3due is more than the amount received, the difference shall be
4termed the "Fiscal Year 2011 Shortfall" for purposes of this
5Section, and the Fiscal Year 2011 Shortfall shall be satisfied
6under Section 1.2 of the State Pension Funds Continuing
7Appropriation Act. If the amount due is less than the amount
8received, the difference shall be termed the "Fiscal Year 2011
9Overpayment" for purposes of this Section, and the Fiscal Year
102011 Overpayment shall be repaid by the System to the General
11Revenue Fund as soon as practicable after the certification.
12    (k) For fiscal years 2012 and 2013 only, after the
13submission of all payments for eligible employees from personal
14services line items paid from the General Revenue Fund in the
15fiscal year have been made, the Comptroller shall provide to
16the System a certification of the sum of all expenditures in
17the fiscal year for personal services. Upon receipt of the
18certification, the System shall determine the amount due to the
19System based on the full rate certified by the Board under
20Section 14-135.08 for the fiscal year in order to meet the
21State's obligation under this Section. The System shall compare
22this amount due to the amount received by the System for the
23fiscal year. If the amount due is more than the amount
24received, the difference shall be termed the "Prior Fiscal Year
25Shortfall" for purposes of this Section, and the Prior Fiscal
26Year Shortfall shall be satisfied under Section 1.2 of the

 

 

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1State Pension Funds Continuing Appropriation Act. If the amount
2due is less than the amount received, the difference shall be
3termed the "Prior Fiscal Year Overpayment" for purposes of this
4Section, and the Prior Fiscal Year Overpayment shall be repaid
5by the System to the General Revenue Fund as soon as
6practicable after the certification.
7(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
896-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
91-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
10eff. 6-30-12.)
 
11    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)
12    Sec. 14-132. Obligations of State; funding guarantee.
13    (a) The payment of the required department contributions,
14all allowances, annuities, benefits granted under this
15Article, and all expenses of administration of the system are
16obligations of the State of Illinois to the extent specified in
17this Article.
18    (b) All income of the system shall be credited to a
19separate account for this system in the State treasury and
20shall be used to pay allowances, annuities, benefits and
21administration expense.
22    (c) Pursuant to Article XIII, Section 5 of the 1970
23Constitution of the State of Illinois, beginning on July 1,
242013, the State shall, as a retirement benefit to each
25participant and annuitant of the System be contractually

 

 

SB2404- 31 -LRB098 09018 EFG 39154 b

1obligated to the System (as a fiduciary and trustee of the
2participants and annuitants) to pay the annual required State
3contribution, as determined by the Board of the System using
4generally accepted actuarial principles, as is necessary to
5bring the total assets of the System up to 100% of the total
6actuarial liabilities of the System by the end of State fiscal
7year 2045. As a further retirement benefit and contractual
8obligation, each fiscal year, the State shall pay to each
9designated retirement system the annual required State
10contribution certified by the Board for that fiscal year.
11Payments of the annual required State contribution for each
12fiscal year shall be made in equal monthly installments.
13Additionally, beginning in fiscal year 2014, State transfers to
14the Pension Stabilization Fund pursuant to Section 20 of the
15Budget Stabilization Act and payments to the System pursuant to
16Section 25 of the Budget Stabilization Act shall be further
17retirement benefits and contractual obligations. The transfers
18and payments prescribed in Sections 20 and 25 of the Budget
19Stabilization Act shall not be used by the retirement system
20when calculation any pension payment until the System has
21reached a funded level of 100%. This Section and the security
22it provides to participants and annuitants is intended to be,
23and is, a contractual right that is part of the pension
24benefits provided to the participants and annuitants.
25Notwithstanding anything to the contrary in the Court of Claims
26Act or any other law, a designated retirement system has the

 

 

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1exclusive right to and shall bring a mandamus action in the
2Circuit Court of Sangamon County against the State to compel
3the State to make any installment of the annual required State
4contribution required by this Section, irrespective of other
5remedies that may be available to the System. Each member or
6annuitant of the System has the right to in any judicial
7district in which the System maintains an office if the System
8fails to bring an action specified in this Section,
9irrespective of other remedies that may be available to the
10member or annuitant. In making these determinations, the
11required State contribution shall be calculated each year as a
12level percentage of payroll over the years remaining to and
13including fiscal year 2045 and shall be determined under the
14projected unit credit actuarial cost method.
15(Source: P.A. 80-841.)
 
16    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
17    Sec. 14-133. Contributions on behalf of members.
18    (a) Each participating employee shall make contributions
19to the System, based on the employee's compensation, as
20follows:
21        (1) Covered employees, except as indicated below, 3.5%
22    for retirement annuity, and 0.5% for a widow or survivors
23    annuity;
24        (2) Noncovered employees, except as indicated below,
25    7% for retirement annuity and 1% for a widow or survivors

 

 

SB2404- 33 -LRB098 09018 EFG 39154 b

1    annuity;
2        (3) Noncovered employees serving in a position in which
3    "eligible creditable service" as defined in Section 14-110
4    may be earned, 1% for a widow or survivors annuity plus the
5    following amount for retirement annuity: 8.5% through
6    December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
7    in 2004 and thereafter;
8        (4) Covered employees serving in a position in which
9    "eligible creditable service" as defined in Section 14-110
10    may be earned, 0.5% for a widow or survivors annuity plus
11    the following amount for retirement annuity: 5% through
12    December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
13    and thereafter;
14        (5) Each security employee of the Department of
15    Corrections or of the Department of Human Services who is a
16    covered employee, 0.5% for a widow or survivors annuity
17    plus the following amount for retirement annuity: 5%
18    through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
19    in 2004 and thereafter;
20        (6) Each security employee of the Department of
21    Corrections or of the Department of Human Services who is
22    not a covered employee, 1% for a widow or survivors annuity
23    plus the following amount for retirement annuity: 8.5%
24    through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
25    11.5% in 2004 and thereafter.
26    (a-5) In addition to the contributions otherwise required

 

 

SB2404- 34 -LRB098 09018 EFG 39154 b

1under this Article, each Tier I participant shall also make the
2following contributions toward the cost of his or her
3retirement annuity from each payment of salary received by him
4or her for service as a member:
5        (1) beginning July 1, 2013 and through June 30, 2014,
6    1% of compensation; and
7        (2) beginning on July 1, 2014, 2% of compensation.
8    (b) Contributions shall be in the form of a deduction from
9compensation and shall be made notwithstanding that the
10compensation paid in cash to the employee shall be reduced
11thereby below the minimum prescribed by law or regulation. Each
12member is deemed to consent and agree to the deductions from
13compensation provided for in this Article, and shall receipt in
14full for salary or compensation.
15(Source: P.A. 92-14, eff. 6-28-01.)
 
16    (40 ILCS 5/15-107.1 new)
17    Sec. 15-107.1. Tier I participant. "Tier I participant": A
18participant under this Article, other than a participant in the
19self-managed plan under Section 15-158.2, who first became a
20member or participant before January 1, 2011 under any
21reciprocal retirement system or pension fund established under
22this Code other than a retirement system or pension fund
23established under Article 2, 3, 4, 5, 6, or 18 of this Code and
24who is not a Tier I retiree.
 

 

 

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1    (40 ILCS 5/15-107.2 new)
2    Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
3Tier I participant who is receiving a retirement annuity.
 
4    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
5    Sec. 15-136. Retirement annuities - Amount. The provisions
6of this Section 15-136 apply only to those participants who are
7participating in the traditional benefit package or the
8portable benefit package and do not apply to participants who
9are participating in the self-managed plan.
10    (a) The amount of a participant's retirement annuity,
11expressed in the form of a single-life annuity, shall be
12determined by whichever of the following rules is applicable
13and provides the largest annuity:
14    Rule 1: The retirement annuity shall be 1.67% of final rate
15of earnings for each of the first 10 years of service, 1.90%
16for each of the next 10 years of service, 2.10% for each year
17of service in excess of 20 but not exceeding 30, and 2.30% for
18each year in excess of 30; or for persons who retire on or
19after January 1, 1998, 2.2% of the final rate of earnings for
20each year of service.
21    Rule 2: The retirement annuity shall be the sum of the
22following, determined from amounts credited to the participant
23in accordance with the actuarial tables and the effective rate
24of interest in effect at the time the retirement annuity
25begins:

 

 

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1        (i) the normal annuity which can be provided on an
2    actuarially equivalent basis, by the accumulated normal
3    contributions as of the date the annuity begins;
4        (ii) an annuity from employer contributions of an
5    amount equal to that which can be provided on an
6    actuarially equivalent basis from the accumulated normal
7    contributions made by the participant under Section
8    15-113.6 and Section 15-113.7 plus 1.4 times all other
9    accumulated normal contributions made by the participant;
10    and
11        (iii) the annuity that can be provided on an
12    actuarially equivalent basis from the entire contribution
13    made by the participant under Section 15-113.3.
14    For the purpose of calculating an annuity under this Rule
152, the contribution required under subsection (c-5) of Section
1615-157 shall not be considered when determining the
17participant's accumulated normal contributions under clause
18(i) or the employer contribution under clause (ii).
19    With respect to a police officer or firefighter who retires
20on or after August 14, 1998, the accumulated normal
21contributions taken into account under clauses (i) and (ii) of
22this Rule 2 shall include the additional normal contributions
23made by the police officer or firefighter under Section
2415-157(a).
25    The amount of a retirement annuity calculated under this
26Rule 2 shall be computed solely on the basis of the

 

 

SB2404- 37 -LRB098 09018 EFG 39154 b

1participant's accumulated normal contributions, as specified
2in this Rule and defined in Section 15-116. Neither an employee
3or employer contribution for early retirement under Section
415-136.2 nor any other employer contribution shall be used in
5the calculation of the amount of a retirement annuity under
6this Rule 2.
7    This amendatory Act of the 91st General Assembly is a
8clarification of existing law and applies to every participant
9and annuitant without regard to whether status as an employee
10terminates before the effective date of this amendatory Act.
11    This Rule 2 does not apply to a person who first becomes an
12employee under this Article on or after July 1, 2005.
13    Rule 3: The retirement annuity of a participant who is
14employed at least one-half time during the period on which his
15or her final rate of earnings is based, shall be equal to the
16participant's years of service not to exceed 30, multiplied by
17(1) $96 if the participant's final rate of earnings is less
18than $3,500, (2) $108 if the final rate of earnings is at least
19$3,500 but less than $4,500, (3) $120 if the final rate of
20earnings is at least $4,500 but less than $5,500, (4) $132 if
21the final rate of earnings is at least $5,500 but less than
22$6,500, (5) $144 if the final rate of earnings is at least
23$6,500 but less than $7,500, (6) $156 if the final rate of
24earnings is at least $7,500 but less than $8,500, (7) $168 if
25the final rate of earnings is at least $8,500 but less than
26$9,500, and (8) $180 if the final rate of earnings is $9,500 or

 

 

SB2404- 38 -LRB098 09018 EFG 39154 b

1more, except that the annuity for those persons having made an
2election under Section 15-154(a-1) shall be calculated and
3payable under the portable retirement benefit program pursuant
4to the provisions of Section 15-136.4.
5    Rule 4: A participant who is at least age 50 and has 25 or
6more years of service as a police officer or firefighter, and a
7participant who is age 55 or over and has at least 20 but less
8than 25 years of service as a police officer or firefighter,
9shall be entitled to a retirement annuity of 2 1/4% of the
10final rate of earnings for each of the first 10 years of
11service as a police officer or firefighter, 2 1/2% for each of
12the next 10 years of service as a police officer or
13firefighter, and 2 3/4% for each year of service as a police
14officer or firefighter in excess of 20. The retirement annuity
15for all other service shall be computed under Rule 1.
16    For purposes of this Rule 4, a participant's service as a
17firefighter shall also include the following:
18        (i) service that is performed while the person is an
19    employee under subsection (h) of Section 15-107; and
20        (ii) in the case of an individual who was a
21    participating employee employed in the fire department of
22    the University of Illinois's Champaign-Urbana campus
23    immediately prior to the elimination of that fire
24    department and who immediately after the elimination of
25    that fire department transferred to another job with the
26    University of Illinois, service performed as an employee of

 

 

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1    the University of Illinois in a position other than police
2    officer or firefighter, from the date of that transfer
3    until the employee's next termination of service with the
4    University of Illinois.
5    Rule 5: The retirement annuity of a participant who elected
6early retirement under the provisions of Section 15-136.2 and
7who, on or before February 16, 1995, brought administrative
8proceedings pursuant to the administrative rules adopted by the
9System to challenge the calculation of his or her retirement
10annuity shall be the sum of the following, determined from
11amounts credited to the participant in accordance with the
12actuarial tables and the prescribed rate of interest in effect
13at the time the retirement annuity begins:
14        (i) the normal annuity which can be provided on an
15    actuarially equivalent basis, by the accumulated normal
16    contributions as of the date the annuity begins; and
17        (ii) an annuity from employer contributions of an
18    amount equal to that which can be provided on an
19    actuarially equivalent basis from the accumulated normal
20    contributions made by the participant under Section
21    15-113.6 and Section 15-113.7 plus 1.4 times all other
22    accumulated normal contributions made by the participant;
23    and
24        (iii) an annuity which can be provided on an
25    actuarially equivalent basis from the employee
26    contribution for early retirement under Section 15-136.2,

 

 

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1    and an annuity from employer contributions of an amount
2    equal to that which can be provided on an actuarially
3    equivalent basis from the employee contribution for early
4    retirement under Section 15-136.2.
5    In no event shall a retirement annuity under this Rule 5 be
6lower than the amount obtained by adding (1) the monthly amount
7obtained by dividing the combined employee and employer
8contributions made under Section 15-136.2 by the System's
9annuity factor for the age of the participant at the beginning
10of the annuity payment period and (2) the amount equal to the
11participant's annuity if calculated under Rule 1, reduced under
12Section 15-136(b) as if no contributions had been made under
13Section 15-136.2.
14    With respect to a participant who is qualified for a
15retirement annuity under this Rule 5 whose retirement annuity
16began before the effective date of this amendatory Act of the
1791st General Assembly, and for whom an employee contribution
18was made under Section 15-136.2, the System shall recalculate
19the retirement annuity under this Rule 5 and shall pay any
20additional amounts due in the manner provided in Section
2115-186.1 for benefits mistakenly set too low.
22    The amount of a retirement annuity calculated under this
23Rule 5 shall be computed solely on the basis of those
24contributions specifically set forth in this Rule 5. Except as
25provided in clause (iii) of this Rule 5, neither an employee
26nor employer contribution for early retirement under Section

 

 

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115-136.2, nor any other employer contribution, shall be used in
2the calculation of the amount of a retirement annuity under
3this Rule 5.
4    The General Assembly has adopted the changes set forth in
5Section 25 of this amendatory Act of the 91st General Assembly
6in recognition that the decision of the Appellate Court for the
7Fourth District in Mattis v. State Universities Retirement
8System et al. might be deemed to give some right to the
9plaintiff in that case. The changes made by Section 25 of this
10amendatory Act of the 91st General Assembly are a legislative
11implementation of the decision of the Appellate Court for the
12Fourth District in Mattis v. State Universities Retirement
13System et al. with respect to that plaintiff.
14    The changes made by Section 25 of this amendatory Act of
15the 91st General Assembly apply without regard to whether the
16person is in service as an employee on or after its effective
17date.
18    (b) The retirement annuity provided under Rules 1 and 3
19above shall be reduced by 1/2 of 1% for each month the
20participant is under age 60 at the time of retirement. However,
21this reduction shall not apply in the following cases:
22        (1) For a disabled participant whose disability
23    benefits have been discontinued because he or she has
24    exhausted eligibility for disability benefits under clause
25    (6) of Section 15-152;
26        (2) For a participant who has at least the number of

 

 

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1    years of service required to retire at any age under
2    subsection (a) of Section 15-135; or
3        (3) For that portion of a retirement annuity which has
4    been provided on account of service of the participant
5    during periods when he or she performed the duties of a
6    police officer or firefighter, if these duties were
7    performed for at least 5 years immediately preceding the
8    date the retirement annuity is to begin.
9    (c) The maximum retirement annuity provided under Rules 1,
102, 4, and 5 shall be the lesser of (1) the annual limit of
11benefits as specified in Section 415 of the Internal Revenue
12Code of 1986, as such Section may be amended from time to time
13and as such benefit limits shall be adjusted by the
14Commissioner of Internal Revenue, and (2) 80% of final rate of
15earnings.
16    (d) An annuitant whose status as an employee terminates
17after August 14, 1969 shall receive automatic increases in his
18or her retirement annuity as follows:
19    Effective January 1 immediately following the date the
20retirement annuity begins, the annuitant shall receive an
21increase in his or her monthly retirement annuity of 0.125% of
22the monthly retirement annuity provided under Rule 1, Rule 2,
23Rule 3, Rule 4, or Rule 5, contained in this Section,
24multiplied by the number of full months which elapsed from the
25date the retirement annuity payments began to January 1, 1972,
26plus 0.1667% of such annuity, multiplied by the number of full

 

 

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1months which elapsed from January 1, 1972, or the date the
2retirement annuity payments began, whichever is later, to
3January 1, 1978, plus 0.25% of such annuity multiplied by the
4number of full months which elapsed from January 1, 1978, or
5the date the retirement annuity payments began, whichever is
6later, to the effective date of the increase.
7    The annuitant shall receive an increase in his or her
8monthly retirement annuity on each January 1 thereafter during
9the annuitant's life of 3% of the monthly annuity provided
10under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
11this Section. The change made under this subsection by P.A.
1281-970 is effective January 1, 1980 and applies to each
13annuitant whose status as an employee terminates before or
14after that date.
15    Beginning January 1, 1990, all automatic annual increases
16payable under this Section shall be calculated as a percentage
17of the total annuity payable at the time of the increase,
18including all increases previously granted under this Article.
19    The change made in this subsection by P.A. 85-1008 is
20effective January 26, 1988, and is applicable without regard to
21whether status as an employee terminated before that date.
22    (e) If, on January 1, 1987, or the date the retirement
23annuity payment period begins, whichever is later, the sum of
24the retirement annuity provided under Rule 1 or Rule 2 of this
25Section and the automatic annual increases provided under the
26preceding subsection or Section 15-136.1, amounts to less than

 

 

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1the retirement annuity which would be provided by Rule 3, the
2retirement annuity shall be increased as of January 1, 1987, or
3the date the retirement annuity payment period begins,
4whichever is later, to the amount which would be provided by
5Rule 3 of this Section. Such increased amount shall be
6considered as the retirement annuity in determining benefits
7provided under other Sections of this Article. This paragraph
8applies without regard to whether status as an employee
9terminated before the effective date of this amendatory Act of
101987, provided that the annuitant was employed at least
11one-half time during the period on which the final rate of
12earnings was based.
13    (f) A participant is entitled to such additional annuity as
14may be provided on an actuarially equivalent basis, by any
15accumulated additional contributions to his or her credit.
16However, the additional contributions made by the participant
17toward the automatic increases in annuity provided under this
18Section and the contributions made under subsection (c-5) of
19Section 15-157 by this amendatory Act of the 98th General
20Assembly shall not be taken into account in determining the
21amount of such additional annuity.
22    (g) If, (1) by law, a function of a governmental unit, as
23defined by Section 20-107 of this Code, is transferred in whole
24or in part to an employer, and (2) a participant transfers
25employment from such governmental unit to such employer within
266 months after the transfer of the function, and (3) the sum of

 

 

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1(A) the annuity payable to the participant under Rule 1, 2, or
23 of this Section (B) all proportional annuities payable to the
3participant by all other retirement systems covered by Article
420, and (C) the initial primary insurance amount to which the
5participant is entitled under the Social Security Act, is less
6than the retirement annuity which would have been payable if
7all of the participant's pension credits validated under
8Section 20-109 had been validated under this system, a
9supplemental annuity equal to the difference in such amounts
10shall be payable to the participant.
11    (h) On January 1, 1981, an annuitant who was receiving a
12retirement annuity on or before January 1, 1971 shall have his
13or her retirement annuity then being paid increased $1 per
14month for each year of creditable service. On January 1, 1982,
15an annuitant whose retirement annuity began on or before
16January 1, 1977, shall have his or her retirement annuity then
17being paid increased $1 per month for each year of creditable
18service.
19    (i) On January 1, 1987, any annuitant whose retirement
20annuity began on or before January 1, 1977, shall have the
21monthly retirement annuity increased by an amount equal to 8
22per year of creditable service times the number of years that
23have elapsed since the annuity began.
24(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
 
25    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)

 

 

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1    Sec. 15-155. Employer contributions.
2    (a) The State of Illinois shall make contributions by
3appropriations of amounts which, together with the other
4employer contributions from trust, federal, and other funds,
5employee contributions, income from investments, and other
6income of this System, will be sufficient to meet the cost of
7maintaining and administering the System on a 100% 90% funded
8basis in accordance with actuarial recommendations.
9    The Board shall determine the amount of State contributions
10required for each fiscal year on the basis of the actuarial
11tables and other assumptions adopted by the Board and the
12recommendations of the actuary, using the formula in subsection
13(a-1).
14    (a-1) For State fiscal years 2015 through 2045, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the System to be
17sufficient to bring the total assets of the System up to 100%
18of the total actuarial liabilities of the System by the end of
19State fiscal year 2045. In making these determinations, the
20required State contribution shall be calculated each year as a
21level percentage of payroll over the years remaining to and
22including fiscal year 2045 and shall be determined under the
23projected unit credit actuarial cost method.
24    For State fiscal years 2012 through 2014 2045, the minimum
25contribution to the System to be made by the State for each
26fiscal year shall be an amount determined by the System to be

 

 

SB2404- 47 -LRB098 09018 EFG 39154 b

1sufficient to bring the total assets of the System up to 90% of
2the total actuarial liabilities of the System by the end of
3State fiscal year 2045. In making these determinations, the
4required State contribution shall be calculated each year as a
5level percentage of payroll over the years remaining to and
6including fiscal year 2045 and shall be determined under the
7projected unit credit actuarial cost method.
8    For State fiscal years 1996 through 2005, the State
9contribution to the System, as a percentage of the applicable
10employee payroll, shall be increased in equal annual increments
11so that by State fiscal year 2011, the State is contributing at
12the rate required under this Section.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2006 is
15$166,641,900.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2007 is
18$252,064,100.
19    For each of State fiscal years 2008 through 2009, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22from the required State contribution for State fiscal year
232007, so that by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2010 is

 

 

SB2404- 48 -LRB098 09018 EFG 39154 b

1$702,514,000 and shall be made from the State Pensions Fund and
2proceeds of bonds sold in fiscal year 2010 pursuant to Section
37.2 of the General Obligation Bond Act, less (i) the pro rata
4share of bond sale expenses determined by the System's share of
5total bond proceeds, (ii) any amounts received from the General
6Revenue Fund in fiscal year 2010, (iii) any reduction in bond
7proceeds due to the issuance of discounted bonds, if
8applicable.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2011 is
11the amount recertified by the System on or before April 1, 2011
12pursuant to Section 15-165 and shall be made from the State
13Pensions Fund and proceeds of bonds sold in fiscal year 2011
14pursuant to Section 7.2 of the General Obligation Bond Act,
15less (i) the pro rata share of bond sale expenses determined by
16the System's share of total bond proceeds, (ii) any amounts
17received from the General Revenue Fund in fiscal year 2011, and
18(iii) any reduction in bond proceeds due to the issuance of
19discounted bonds, if applicable.
20    Beginning in State fiscal year 2046, the minimum State
21contribution for each fiscal year shall be the amount needed to
22maintain the total assets of the System at 90% of the total
23actuarial liabilities of the System.
24    Amounts received by the System pursuant to Section 25 of
25the Budget Stabilization Act or Section 8.12 of the State
26Finance Act in any fiscal year do not reduce and do not

 

 

SB2404- 49 -LRB098 09018 EFG 39154 b

1constitute payment of any portion of the minimum State
2contribution required under this Article in that fiscal year.
3Such amounts shall not reduce, and shall not be included in the
4calculation of, the required State contributions under this
5Article in any future year until the System has reached a
6funding ratio of at least 100% 90%. A reference in this Article
7to the "required State contribution" or any substantially
8similar term does not include or apply to any amounts payable
9to the System under Section 25 of the Budget Stabilization Act.
10    Notwithstanding any other provision of this Code or the
11Budget Stabilization Act, amounts transferred to the System
12pursuant to the Budget Stabilization Act after the effective
13date of this amendatory Act of the 98th General Assembly do not
14reduce and do not constitute payment of any portion of the
15required State contribution under this Article in that fiscal
16year. Such amounts shall not reduce, and shall not be included
17in the calculation of, the required State contributions under
18this Article in any future year until the System has received
19payment of contributions pursuant to the Budget Stabilization
20Act.
21    Notwithstanding any other provision of this Section, the
22required State contribution for State fiscal year 2005 and for
23fiscal year 2008 and each fiscal year thereafter through State
24fiscal year 2014, as calculated under this Section and
25certified under Section 15-165, shall not exceed an amount
26equal to (i) the amount of the required State contribution that

 

 

SB2404- 50 -LRB098 09018 EFG 39154 b

1would have been calculated under this Section for that fiscal
2year if the System had not received any payments under
3subsection (d) of Section 7.2 of the General Obligation Bond
4Act, minus (ii) the portion of the State's total debt service
5payments for that fiscal year on the bonds issued in fiscal
6year 2003 for the purposes of that Section 7.2, as determined
7and certified by the Comptroller, that is the same as the
8System's portion of the total moneys distributed under
9subsection (d) of Section 7.2 of the General Obligation Bond
10Act. In determining this maximum for State fiscal years 2008
11through 2010, however, the amount referred to in item (i) shall
12be increased, as a percentage of the applicable employee
13payroll, in equal increments calculated from the sum of the
14required State contribution for State fiscal year 2007 plus the
15applicable portion of the State's total debt service payments
16for fiscal year 2007 on the bonds issued in fiscal year 2003
17for the purposes of Section 7.2 of the General Obligation Bond
18Act, so that, by State fiscal year 2011, the State is
19contributing at the rate otherwise required under this Section.
20    (b) If an employee is paid from trust or federal funds, the
21employer shall pay to the Board contributions from those funds
22which are sufficient to cover the accruing normal costs on
23behalf of the employee. However, universities having employees
24who are compensated out of local auxiliary funds, income funds,
25or service enterprise funds are not required to pay such
26contributions on behalf of those employees. The local auxiliary

 

 

SB2404- 51 -LRB098 09018 EFG 39154 b

1funds, income funds, and service enterprise funds of
2universities shall not be considered trust funds for the
3purpose of this Article, but funds of alumni associations,
4foundations, and athletic associations which are affiliated
5with the universities included as employers under this Article
6and other employers which do not receive State appropriations
7are considered to be trust funds for the purpose of this
8Article.
9    (b-1) The City of Urbana and the City of Champaign shall
10each make employer contributions to this System for their
11respective firefighter employees who participate in this
12System pursuant to subsection (h) of Section 15-107. The rate
13of contributions to be made by those municipalities shall be
14determined annually by the Board on the basis of the actuarial
15assumptions adopted by the Board and the recommendations of the
16actuary, and shall be expressed as a percentage of salary for
17each such employee. The Board shall certify the rate to the
18affected municipalities as soon as may be practical. The
19employer contributions required under this subsection shall be
20remitted by the municipality to the System at the same time and
21in the same manner as employee contributions.
22    (c) Through State fiscal year 1995: The total employer
23contribution shall be apportioned among the various funds of
24the State and other employers, whether trust, federal, or other
25funds, in accordance with actuarial procedures approved by the
26Board. State of Illinois contributions for employers receiving

 

 

SB2404- 52 -LRB098 09018 EFG 39154 b

1State appropriations for personal services shall be payable
2from appropriations made to the employers or to the System. The
3contributions for Class I community colleges covering earnings
4other than those paid from trust and federal funds, shall be
5payable solely from appropriations to the Illinois Community
6College Board or the System for employer contributions.
7    (d) Beginning in State fiscal year 1996, the required State
8contributions to the System shall be appropriated directly to
9the System and shall be payable through vouchers issued in
10accordance with subsection (c) of Section 15-165, except as
11provided in subsection (g).
12    (e) The State Comptroller shall draw warrants payable to
13the System upon proper certification by the System or by the
14employer in accordance with the appropriation laws and this
15Code.
16    (f) Normal costs under this Section means liability for
17pensions and other benefits which accrues to the System because
18of the credits earned for service rendered by the participants
19during the fiscal year and expenses of administering the
20System, but shall not include the principal of or any
21redemption premium or interest on any bonds issued by the Board
22or any expenses incurred or deposits required in connection
23therewith.
24    (g) If the amount of a participant's earnings for any
25academic year used to determine the final rate of earnings,
26determined on a full-time equivalent basis, exceeds the amount

 

 

SB2404- 53 -LRB098 09018 EFG 39154 b

1of his or her earnings with the same employer for the previous
2academic year, determined on a full-time equivalent basis, by
3more than 6%, the participant's employer shall pay to the
4System, in addition to all other payments required under this
5Section and in accordance with guidelines established by the
6System, the present value of the increase in benefits resulting
7from the portion of the increase in earnings that is in excess
8of 6%. This present value shall be computed by the System on
9the basis of the actuarial assumptions and tables used in the
10most recent actuarial valuation of the System that is available
11at the time of the computation. The System may require the
12employer to provide any pertinent information or
13documentation.
14    Whenever it determines that a payment is or may be required
15under this subsection (g), the System shall calculate the
16amount of the payment and bill the employer for that amount.
17The bill shall specify the calculations used to determine the
18amount due. If the employer disputes the amount of the bill, it
19may, within 30 days after receipt of the bill, apply to the
20System in writing for a recalculation. The application must
21specify in detail the grounds of the dispute and, if the
22employer asserts that the calculation is subject to subsection
23(h) or (i) of this Section, must include an affidavit setting
24forth and attesting to all facts within the employer's
25knowledge that are pertinent to the applicability of subsection
26(h) or (i). Upon receiving a timely application for

 

 

SB2404- 54 -LRB098 09018 EFG 39154 b

1recalculation, the System shall review the application and, if
2appropriate, recalculate the amount due.
3    The employer contributions required under this subsection
4(g) (f) may be paid in the form of a lump sum within 90 days
5after receipt of the bill. If the employer contributions are
6not paid within 90 days after receipt of the bill, then
7interest will be charged at a rate equal to the System's annual
8actuarially assumed rate of return on investment compounded
9annually from the 91st day after receipt of the bill. Payments
10must be concluded within 3 years after the employer's receipt
11of the bill.
12    (h) This subsection (h) applies only to payments made or
13salary increases given on or after June 1, 2005 but before July
141, 2011. The changes made by Public Act 94-1057 shall not
15require the System to refund any payments received before July
1631, 2006 (the effective date of Public Act 94-1057).
17    When assessing payment for any amount due under subsection
18(g), the System shall exclude earnings increases paid to
19participants under contracts or collective bargaining
20agreements entered into, amended, or renewed before June 1,
212005.
22    When assessing payment for any amount due under subsection
23(g), the System shall exclude earnings increases paid to a
24participant at a time when the participant is 10 or more years
25from retirement eligibility under Section 15-135.
26    When assessing payment for any amount due under subsection

 

 

SB2404- 55 -LRB098 09018 EFG 39154 b

1(g), the System shall exclude earnings increases resulting from
2overload work, including a contract for summer teaching, or
3overtime when the employer has certified to the System, and the
4System has approved the certification, that: (i) in the case of
5overloads (A) the overload work is for the sole purpose of
6academic instruction in excess of the standard number of
7instruction hours for a full-time employee occurring during the
8academic year that the overload is paid and (B) the earnings
9increases are equal to or less than the rate of pay for
10academic instruction computed using the participant's current
11salary rate and work schedule; and (ii) in the case of
12overtime, the overtime was necessary for the educational
13mission.
14    When assessing payment for any amount due under subsection
15(g), the System shall exclude any earnings increase resulting
16from (i) a promotion for which the employee moves from one
17classification to a higher classification under the State
18Universities Civil Service System, (ii) a promotion in academic
19rank for a tenured or tenure-track faculty position, or (iii) a
20promotion that the Illinois Community College Board has
21recommended in accordance with subsection (k) of this Section.
22These earnings increases shall be excluded only if the
23promotion is to a position that has existed and been filled by
24a member for no less than one complete academic year and the
25earnings increase as a result of the promotion is an increase
26that results in an amount no greater than the average salary

 

 

SB2404- 56 -LRB098 09018 EFG 39154 b

1paid for other similar positions.
2    (i) When assessing payment for any amount due under
3subsection (g), the System shall exclude any salary increase
4described in subsection (h) of this Section given on or after
5July 1, 2011 but before July 1, 2014 under a contract or
6collective bargaining agreement entered into, amended, or
7renewed on or after June 1, 2005 but before July 1, 2011.
8Notwithstanding any other provision of this Section, any
9payments made or salary increases given after June 30, 2014
10shall be used in assessing payment for any amount due under
11subsection (g) of this Section.
12    (j) The System shall prepare a report and file copies of
13the report with the Governor and the General Assembly by
14January 1, 2007 that contains all of the following information:
15        (1) The number of recalculations required by the
16    changes made to this Section by Public Act 94-1057 for each
17    employer.
18        (2) The dollar amount by which each employer's
19    contribution to the System was changed due to
20    recalculations required by Public Act 94-1057.
21        (3) The total amount the System received from each
22    employer as a result of the changes made to this Section by
23    Public Act 94-4.
24        (4) The increase in the required State contribution
25    resulting from the changes made to this Section by Public
26    Act 94-1057.

 

 

SB2404- 57 -LRB098 09018 EFG 39154 b

1    (k) The Illinois Community College Board shall adopt rules
2for recommending lists of promotional positions submitted to
3the Board by community colleges and for reviewing the
4promotional lists on an annual basis. When recommending
5promotional lists, the Board shall consider the similarity of
6the positions submitted to those positions recognized for State
7universities by the State Universities Civil Service System.
8The Illinois Community College Board shall file a copy of its
9findings with the System. The System shall consider the
10findings of the Illinois Community College Board when making
11determinations under this Section. The System shall not exclude
12any earnings increases resulting from a promotion when the
13promotion was not submitted by a community college. Nothing in
14this subsection (k) shall require any community college to
15submit any information to the Community College Board.
16    (l) For purposes of determining the required State
17contribution to the System, the value of the System's assets
18shall be equal to the actuarial value of the System's assets,
19which shall be calculated as follows:
20    As of June 30, 2008, the actuarial value of the System's
21assets shall be equal to the market value of the assets as of
22that date. In determining the actuarial value of the System's
23assets for fiscal years after June 30, 2008, any actuarial
24gains or losses from investment return incurred in a fiscal
25year shall be recognized in equal annual amounts over the
265-year period following that fiscal year.

 

 

SB2404- 58 -LRB098 09018 EFG 39154 b

1    (m) For purposes of determining the required State
2contribution to the system for a particular year, the actuarial
3value of assets shall be assumed to earn a rate of return equal
4to the system's actuarially assumed rate of return.
5(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
696-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
77-13-12; revised 10-17-12.)
 
8    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)
9    Sec. 15-156. Obligations of State; funding guarantees.
10    (a) The payment of (1) the required State contributions,
11(2) all benefits granted under this system and (3) all expenses
12in connection with the administration and operation thereof are
13obligations of the State of Illinois to the extent specified in
14this Article. The accumulated employee normal, additional and
15survivors insurance contributions credited to the accounts of
16active and inactive participants shall not be used to pay the
17State's share of the obligations.
18    (c) Pursuant to Article XIII, Section 5 of the 1970
19Constitution of the State of Illinois, beginning on July 1,
202013, the State shall, as a retirement benefit to each
21participant and annuitant of the System be contractually
22obligated to the System (as a fiduciary and trustee of the
23participants and annuitants) to pay the annual required State
24contribution, as determined by the Board of the System using
25generally accepted actuarial principles, as is necessary to

 

 

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1bring the total assets of the System up to 100% of the total
2actuarial liabilities of the System by the end of State fiscal
3year 2045. As a further retirement benefit and contractual
4obligation, each fiscal year, the State shall pay to each
5designated retirement system the annual required State
6contribution certified by the Board for that fiscal year.
7Payments of the annual required State contribution for each
8fiscal year shall be made in equal monthly installments.
9Additionally, beginning in fiscal year 2014, State transfers to
10the Pension Stabilization Fund pursuant to Section 20 of the
11Budget Stabilization Act and payments to the System pursuant to
12Section 25 of the Budget Stabilization Act shall be further
13retirement benefits and contractual obligations. The transfers
14and payments prescribed in Sections 20 and 25 of the Budget
15Stabilization Act shall not be used by the retirement system
16when calculation any pension payment until the System has
17reached a funded level of 100%. This Section and the security
18it provides to participants and annuitants is intended to be,
19and is, a contractual right that is part of the pension
20benefits provided to the participants and annuitants.
21Notwithstanding anything to the contrary in the Court of Claims
22Act or any other law, a designated retirement system has the
23exclusive right to and shall bring a mandamus action in the
24Circuit Court of Champaign County against the State to compel
25the State to make any installment of the annual required State
26contribution required by this Section, irrespective of other

 

 

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1remedies that may be available to the System. Each member or
2annuitant of the System has the right to in any judicial
3district in which the System maintains an office if the System
4fails to bring an action specified in this Section,
5irrespective of other remedies that may be available to the
6member or annuitant. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of payroll over the years remaining to and
9including fiscal year 2045 and shall be determined under the
10projected unit credit actuarial cost method.
11(Source: P.A. 83-1440.)
 
12    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
13    Sec. 15-157. Employee Contributions.
14    (a) Each participating employee shall make contributions
15towards the retirement benefits payable under the retirement
16program applicable to the employee from each payment of
17earnings applicable to employment under this system on and
18after the date of becoming a participant as follows: Prior to
19September 1, 1949, 3 1/2% of earnings; from September 1, 1949
20to August 31, 1955, 5%; from September 1, 1955 to August 31,
211969, 6%; from September 1, 1969, 6 1/2%. These contributions
22are to be considered as normal contributions for purposes of
23this Article.
24    Each participant who is a police officer or firefighter
25shall make normal contributions of 8% of each payment of

 

 

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1earnings applicable to employment as a police officer or
2firefighter under this system on or after September 1, 1981,
3unless he or she files with the board within 60 days after the
4effective date of this amendatory Act of 1991 or 60 days after
5the board receives notice that he or she is employed as a
6police officer or firefighter, whichever is later, a written
7notice waiving the retirement formula provided by Rule 4 of
8Section 15-136. This waiver shall be irrevocable. If a
9participant had met the conditions set forth in Section
1015-132.1 prior to the effective date of this amendatory Act of
111991 but failed to make the additional normal contributions
12required by this paragraph, he or she may elect to pay the
13additional contributions plus compound interest at the
14effective rate. If such payment is received by the board, the
15service shall be considered as police officer service in
16calculating the retirement annuity under Rule 4 of Section
1715-136. While performing service described in clause (i) or
18(ii) of Rule 4 of Section 15-136, a participating employee
19shall be deemed to be employed as a firefighter for the purpose
20of determining the rate of employee contributions under this
21Section.
22    (b) Starting September 1, 1969, each participating
23employee shall make additional contributions of 1/2 of 1% of
24earnings to finance a portion of the cost of the annual
25increases in retirement annuity provided under Section 15-136,
26except that with respect to participants in the self-managed

 

 

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1plan this additional contribution shall be used to finance the
2benefits obtained under that retirement program.
3    (c) In addition to the amounts described in subsections (a)
4and (b) of this Section, each participating employee shall make
5contributions of 1% of earnings applicable under this system on
6and after August 1, 1959. The contributions made under this
7subsection (c) shall be considered as survivor's insurance
8contributions for purposes of this Article if the employee is
9covered under the traditional benefit package, and such
10contributions shall be considered as additional contributions
11for purposes of this Article if the employee is participating
12in the self-managed plan or has elected to participate in the
13portable benefit package and has completed the applicable
14one-year waiting period. Contributions in excess of $80 during
15any fiscal year beginning before August 31, 1969 and in excess
16of $120 during any fiscal year thereafter until September 1,
171971 shall be considered as additional contributions for
18purposes of this Article.
19    (c-5) In addition to the contributions otherwise required
20under this Article, each Tier I participant shall also make the
21following contributions toward the cost of his or her
22retirement annuity from each payment of salary received by him
23or her for service as a member:
24        (1) beginning July 1, 2013 and through June 30, 2014,
25    1% of earnings; and
26        (2) beginning on July 1, 2014, 2% of earnings.

 

 

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1    Except as otherwise specified, these contributions are to
2be considered as normal contributions for purposes of this
3Article.
4    (d) If the board by board rule so permits and subject to
5such conditions and limitations as may be specified in its
6rules, a participant may make other additional contributions of
7such percentage of earnings or amounts as the participant shall
8elect in a written notice thereof received by the board.
9    (e) That fraction of a participant's total accumulated
10normal contributions, the numerator of which is equal to the
11number of years of service in excess of that which is required
12to qualify for the maximum retirement annuity, and the
13denominator of which is equal to the total service of the
14participant, shall be considered as accumulated additional
15contributions. The determination of the applicable maximum
16annuity and the adjustment in contributions required by this
17provision shall be made as of the date of the participant's
18retirement.
19    (f) Notwithstanding the foregoing, a participating
20employee shall not be required to make contributions under this
21Section after the date upon which continuance of such
22contributions would otherwise cause his or her retirement
23annuity to exceed the maximum retirement annuity as specified
24in clause (1) of subsection (c) of Section 15-136.
25    (g) A participating employee may make contributions for the
26purchase of service credit under this Article.

 

 

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1(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
2eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
390-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
4    (40 ILCS 5/16-106.4 new)
5    Sec. 16-106.4. Tier I member. "Tier I member": A member
6under this Article who first became a member or participant
7before January 1, 2011 under any reciprocal retirement system
8or pension fund established under this Code other than a
9retirement system or pension fund established under Article 2,
103, 4, 5, 6, or 18 of this Code and who is not a Tier I retiree.
 
11    (40 ILCS 5/16-106.5 new)
12    Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
13Tier I member who is receiving a retirement annuity.
 
14    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
15    Sec. 16-133. Retirement annuity; amount.
16    (a) The amount of the retirement annuity shall be (i) in
17the case of a person who first became a teacher under this
18Article before July 1, 2005, the larger of the amounts
19determined under paragraphs (A) and (B) below, or (ii) in the
20case of a person who first becomes a teacher under this Article
21on or after July 1, 2005, the amount determined under the
22applicable provisions of paragraph (B):
23        (A) An amount consisting of the sum of the following:

 

 

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1            (1) An amount that can be provided on an
2        actuarially equivalent basis by the member's
3        accumulated contributions at the time of retirement;
4        and
5            (2) The sum of (i) the amount that can be provided
6        on an actuarially equivalent basis by the member's
7        accumulated contributions representing service prior
8        to July 1, 1947, and (ii) the amount that can be
9        provided on an actuarially equivalent basis by the
10        amount obtained by multiplying 1.4 times the member's
11        accumulated contributions covering service subsequent
12        to June 30, 1947; and
13            (3) If there is prior service, 2 times the amount
14        that would have been determined under subparagraph (2)
15        of paragraph (A) above on account of contributions
16        which would have been made during the period of prior
17        service creditable to the member had the System been in
18        operation and had the member made contributions at the
19        contribution rate in effect prior to July 1, 1947.
20        For the purpose of calculating the sum provided under
21    this paragraph (A), the contribution required under
22    subsection (a-5) of Section 16-152 shall not be considered
23    when determining the amount of the member's accumulated
24    contributions under subparagraph (1) or (2).
25        This paragraph (A) does not apply to a person who first
26    becomes a teacher under this Article on or after July 1,

 

 

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1    2005.
2        (B) An amount consisting of the greater of the
3    following:
4            (1) For creditable service earned before July 1,
5        1998 that has not been augmented under Section
6        16-129.1: 1.67% of final average salary for each of the
7        first 10 years of creditable service, 1.90% of final
8        average salary for each year in excess of 10 but not
9        exceeding 20, 2.10% of final average salary for each
10        year in excess of 20 but not exceeding 30, and 2.30% of
11        final average salary for each year in excess of 30; and
12            For creditable service earned on or after July 1,
13        1998 by a member who has at least 24 years of
14        creditable service on July 1, 1998 and who does not
15        elect to augment service under Section 16-129.1: 2.2%
16        of final average salary for each year of creditable
17        service earned on or after July 1, 1998 but before the
18        member reaches a total of 30 years of creditable
19        service and 2.3% of final average salary for each year
20        of creditable service earned on or after July 1, 1998
21        and after the member reaches a total of 30 years of
22        creditable service; and
23            For all other creditable service: 2.2% of final
24        average salary for each year of creditable service; or
25            (2) 1.5% of final average salary for each year of
26        creditable service plus the sum $7.50 for each of the

 

 

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1        first 20 years of creditable service.
2    The amount of the retirement annuity determined under this
3    paragraph (B) shall be reduced by 1/2 of 1% for each month
4    that the member is less than age 60 at the time the
5    retirement annuity begins. However, this reduction shall
6    not apply (i) if the member has at least 35 years of
7    creditable service, or (ii) if the member retires on
8    account of disability under Section 16-149.2 of this
9    Article with at least 20 years of creditable service, or
10    (iii) if the member (1) has earned during the period
11    immediately preceding the last day of service at least one
12    year of contributing creditable service as an employee of a
13    department as defined in Section 14-103.04, (2) has earned
14    at least 5 years of contributing creditable service as an
15    employee of a department as defined in Section 14-103.04,
16    (3) retires on or after January 1, 2001, and (4) retires
17    having attained an age which, when added to the number of
18    years of his or her total creditable service, equals at
19    least 85. Portions of years shall be counted as decimal
20    equivalents.
21    (b) For purposes of this Section, final average salary
22shall be the average salary for the highest 4 consecutive years
23within the last 10 years of creditable service as determined
24under rules of the board. The minimum final average salary
25shall be considered to be $2,400 per year.
26    In the determination of final average salary for members

 

 

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1other than elected officials and their appointees when such
2appointees are allowed by statute, that part of a member's
3salary for any year beginning after June 30, 1979 which exceeds
4the member's annual full-time salary rate with the same
5employer for the preceding year by more than 20% shall be
6excluded. The exclusion shall not apply in any year in which
7the member's creditable earnings are less than 50% of the
8preceding year's mean salary for downstate teachers as
9determined by the survey of school district salaries provided
10in Section 2-3.103 of the School Code.
11    (c) In determining the amount of the retirement annuity
12under paragraph (B) of this Section, a fractional year shall be
13granted proportional credit.
14    (d) The retirement annuity determined under paragraph (B)
15of this Section shall be available only to members who render
16teaching service after July 1, 1947 for which member
17contributions are required, and to annuitants who re-enter
18under the provisions of Section 16-150.
19    (e) The maximum retirement annuity provided under
20paragraph (B) of this Section shall be 75% of final average
21salary.
22    (f) A member retiring after the effective date of this
23amendatory Act of 1998 shall receive a pension equal to 75% of
24final average salary if the member is qualified to receive a
25retirement annuity equal to at least 74.6% of final average
26salary under this Article or as proportional annuities under

 

 

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1Article 20 of this Code.
2(Source: P.A. 94-4, eff. 6-1-05.)
 
3    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
4    Sec. 16-152. Contributions by members.
5    (a) Each member shall make contributions for membership
6service to this System as follows:
7        (1) Effective July 1, 1998, contributions of 7.50% of
8    salary towards the cost of the retirement annuity. Such
9    contributions shall be deemed "normal contributions".
10        (2) Effective July 1, 1969, contributions of 1/2 of 1%
11    of salary toward the cost of the automatic annual increase
12    in retirement annuity provided under Section 16-133.1.
13        (3) Effective July 24, 1959, contributions of 1% of
14    salary towards the cost of survivor benefits. Such
15    contributions shall not be credited to the individual
16    account of the member and shall not be subject to refund
17    except as provided under Section 16-143.2.
18        (4) Effective July 1, 2005, contributions of 0.40% of
19    salary toward the cost of the early retirement without
20    discount option provided under Section 16-133.2. This
21    contribution shall cease upon termination of the early
22    retirement without discount option as provided in Section
23    16-176.
24    (a-5) In addition to the contributions otherwise required
25under this Article, each Tier I participant shall also make the

 

 

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1following contributions toward the cost of his or her
2retirement annuity from each payment of salary received by him
3or her for service as a member:
4        (1) beginning July 1, 2013 and through June 30, 2014,
5    1% of salary; and
6        (2) beginning on July 1, 2014, 2% of salary.
7    Except as otherwise specified, these contributions are to
8be considered as normal contributions for purposes of this
9Article.
10    (b) The minimum required contribution for any year of
11full-time teaching service shall be $192.
12    (c) Contributions shall not be required of any annuitant
13receiving a retirement annuity who is given employment as
14permitted under Section 16-118 or 16-150.1.
15    (d) A person who (i) was a member before July 1, 1998, (ii)
16retires with more than 34 years of creditable service, and
17(iii) does not elect to qualify for the augmented rate under
18Section 16-129.1 shall be entitled, at the time of retirement,
19to receive a partial refund of contributions made under this
20Section for service occurring after the later of June 30, 1998
21or attainment of 34 years of creditable service, in an amount
22equal to 1.00% of the salary upon which those contributions
23were based.
24    (e) A member's contributions toward the cost of early
25retirement without discount made under item (a)(4) of this
26Section shall not be refunded if the member has elected early

 

 

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1retirement without discount under Section 16-133.2 and has
2begun to receive a retirement annuity under this Article
3calculated in accordance with that election. Otherwise, a
4member's contributions toward the cost of early retirement
5without discount made under item (a)(4) of this Section shall
6be refunded according to whichever one of the following
7circumstances occurs first:
8        (1) The contributions shall be refunded to the member,
9    without interest, within 120 days after the member's
10    retirement annuity commences, if the member does not elect
11    early retirement without discount under Section 16-133.2.
12        (2) The contributions shall be included, without
13    interest, in any refund claimed by the member under Section
14    16-151.
15        (3) The contributions shall be refunded to the member's
16    designated beneficiary (or if there is no beneficiary, to
17    the member's estate), without interest, if the member dies
18    without having begun to receive a retirement annuity under
19    this Article.
20        (4) The contributions shall be refunded to the member,
21    without interest, within 120 days after the early
22    retirement without discount option provided under Section
23    16-133.2 is terminated under Section 16-176.
24(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 
25    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)

 

 

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1    Sec. 16-158. Contributions by State and other employing
2units.
3    (a) The State shall make contributions to the System by
4means of appropriations from the Common School Fund and other
5State funds of amounts which, together with other employer
6contributions, employee contributions, investment income, and
7other income, will be sufficient to meet the cost of
8maintaining and administering the System on a 100% 90% funded
9basis in accordance with actuarial recommendations.
10    The Board shall determine the amount of State contributions
11required for each fiscal year on the basis of the actuarial
12tables and other assumptions adopted by the Board and the
13recommendations of the actuary, using the formula in subsection
14(b-3).
15    (a-1) Annually, on or before November 15 until November 15,
162011, the Board shall certify to the Governor the amount of the
17required State contribution for the coming fiscal year. The
18certification under this subsection (a-1) shall include a copy
19of the actuarial recommendations upon which it is based and
20shall specifically identify the System's projected State
21normal cost for that fiscal year.
22    On or before May 1, 2004, the Board shall recalculate and
23recertify to the Governor the amount of the required State
24contribution to the System for State fiscal year 2005, taking
25into account the amounts appropriated to and received by the
26System under subsection (d) of Section 7.2 of the General

 

 

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1Obligation Bond Act.
2    On or before July 1, 2005, the Board shall recalculate and
3recertify to the Governor the amount of the required State
4contribution to the System for State fiscal year 2006, taking
5into account the changes in required State contributions made
6by this amendatory Act of the 94th General Assembly.
7    On or before April 1, 2011, the Board shall recalculate and
8recertify to the Governor the amount of the required State
9contribution to the System for State fiscal year 2011, applying
10the changes made by Public Act 96-889 to the System's assets
11and liabilities as of June 30, 2009 as though Public Act 96-889
12was approved on that date.
13    (a-5) On or before November 1 of each year, beginning
14November 1, 2012, the Board shall submit to the State Actuary,
15the Governor, and the General Assembly a proposed certification
16of the amount of the required State contribution to the System
17for the next fiscal year, along with all of the actuarial
18assumptions, calculations, and data upon which that proposed
19certification is based. On or before January 1 of each year,
20beginning January 1, 2013, the State Actuary shall issue a
21preliminary report concerning the proposed certification and
22identifying, if necessary, recommended changes in actuarial
23assumptions that the Board must consider before finalizing its
24certification of the required State contributions. On or before
25January 15, 2013 and each January 15 thereafter, the Board
26shall certify to the Governor and the General Assembly the

 

 

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1amount of the required State contribution for the next fiscal
2year. The Board's certification must note any deviations from
3the State Actuary's recommended changes, the reason or reasons
4for not following the State Actuary's recommended changes, and
5the fiscal impact of not following the State Actuary's
6recommended changes on the required State contribution.
7    (b) Through State fiscal year 1995, the State contributions
8shall be paid to the System in accordance with Section 18-7 of
9the School Code.
10    (b-1) Beginning in State fiscal year 1996, on the 15th day
11of each month, or as soon thereafter as may be practicable, the
12Board shall submit vouchers for payment of State contributions
13to the System, in a total monthly amount of one-twelfth of the
14required annual State contribution certified under subsection
15(a-1). From the effective date of this amendatory Act of the
1693rd General Assembly through June 30, 2004, the Board shall
17not submit vouchers for the remainder of fiscal year 2004 in
18excess of the fiscal year 2004 certified contribution amount
19determined under this Section after taking into consideration
20the transfer to the System under subsection (a) of Section
216z-61 of the State Finance Act. These vouchers shall be paid by
22the State Comptroller and Treasurer by warrants drawn on the
23funds appropriated to the System for that fiscal year.
24    If in any month the amount remaining unexpended from all
25other appropriations to the System for the applicable fiscal
26year (including the appropriations to the System under Section

 

 

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18.12 of the State Finance Act and Section 1 of the State
2Pension Funds Continuing Appropriation Act) is less than the
3amount lawfully vouchered under this subsection, the
4difference shall be paid from the Common School Fund under the
5continuing appropriation authority provided in Section 1.1 of
6the State Pension Funds Continuing Appropriation Act.
7    (b-2) Allocations from the Common School Fund apportioned
8to school districts not coming under this System shall not be
9diminished or affected by the provisions of this Article.
10    (b-3) For State fiscal years 2015 through 2045, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13sufficient to bring the total assets of the System up to 100%
14of the total actuarial liabilities of the System by the end of
15State fiscal year 2045. In making these determinations, the
16required State contribution shall be calculated each year as a
17level percentage of payroll over the years remaining to and
18including fiscal year 2045 and shall be determined under the
19projected unit credit actuarial cost method.
20    For State fiscal years 2012 through 2014 2045, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23sufficient to bring the total assets of the System up to 90% of
24the total actuarial liabilities of the System by the end of
25State fiscal year 2045. In making these determinations, the
26required State contribution shall be calculated each year as a

 

 

SB2404- 76 -LRB098 09018 EFG 39154 b

1level percentage of payroll over the years remaining to and
2including fiscal year 2045 and shall be determined under the
3projected unit credit actuarial cost method.
4    For State fiscal years 1996 through 2005, the State
5contribution to the System, as a percentage of the applicable
6employee payroll, shall be increased in equal annual increments
7so that by State fiscal year 2011, the State is contributing at
8the rate required under this Section; except that in the
9following specified State fiscal years, the State contribution
10to the System shall not be less than the following indicated
11percentages of the applicable employee payroll, even if the
12indicated percentage will produce a State contribution in
13excess of the amount otherwise required under this subsection
14and subsection (a), and notwithstanding any contrary
15certification made under subsection (a-1) before the effective
16date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
17in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
182003; and 13.56% in FY 2004.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2006 is
21$534,627,700.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2007 is
24$738,014,500.
25    For each of State fiscal years 2008 through 2009, the State
26contribution to the System, as a percentage of the applicable

 

 

SB2404- 77 -LRB098 09018 EFG 39154 b

1employee payroll, shall be increased in equal annual increments
2from the required State contribution for State fiscal year
32007, so that by State fiscal year 2011, the State is
4contributing at the rate otherwise required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2010 is
7$2,089,268,000 and shall be made from the proceeds of bonds
8sold in fiscal year 2010 pursuant to Section 7.2 of the General
9Obligation Bond Act, less (i) the pro rata share of bond sale
10expenses determined by the System's share of total bond
11proceeds, (ii) any amounts received from the Common School Fund
12in fiscal year 2010, and (iii) any reduction in bond proceeds
13due to the issuance of discounted bonds, if applicable.
14    Notwithstanding any other provision of this Article, the
15total required State contribution for State fiscal year 2011 is
16the amount recertified by the System on or before April 1, 2011
17pursuant to subsection (a-1) of this Section and shall be made
18from the proceeds of bonds sold in fiscal year 2011 pursuant to
19Section 7.2 of the General Obligation Bond Act, less (i) the
20pro rata share of bond sale expenses determined by the System's
21share of total bond proceeds, (ii) any amounts received from
22the Common School Fund in fiscal year 2011, and (iii) any
23reduction in bond proceeds due to the issuance of discounted
24bonds, if applicable. This amount shall include, in addition to
25the amount certified by the System, an amount necessary to meet
26employer contributions required by the State as an employer

 

 

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1under paragraph (e) of this Section, which may also be used by
2the System for contributions required by paragraph (a) of
3Section 16-127.
4    Beginning in State fiscal year 2046, the minimum State
5contribution for each fiscal year shall be the amount needed to
6maintain the total assets of the System at 90% of the total
7actuarial liabilities of the System.
8    Amounts received by the System pursuant to Section 25 of
9the Budget Stabilization Act or Section 8.12 of the State
10Finance Act in any fiscal year do not reduce and do not
11constitute payment of any portion of the minimum State
12contribution required under this Article in that fiscal year.
13Such amounts shall not reduce, and shall not be included in the
14calculation of, the required State contributions under this
15Article in any future year until the System has reached a
16funding ratio of at least 100% 90%. A reference in this Article
17to the "required State contribution" or any substantially
18similar term does not include or apply to any amounts payable
19to the System under Section 25 of the Budget Stabilization Act.
20    Notwithstanding any other provision of this Code or the
21Budget Stabilization Act, amounts transferred to the System
22pursuant to the Budget Stabilization Act after the effective
23date of this amendatory Act of the 98th General Assembly do not
24reduce and do not constitute payment of any portion of the
25required State contribution under this Article in that fiscal
26year. Such amounts shall not reduce, and shall not be included

 

 

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1in the calculation of, the required State contributions under
2this Article in any future year until the System has received
3payment of contributions pursuant to the Budget Stabilization
4Act.
5    Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter through State
8fiscal year 2014, as calculated under this Section and
9certified under subsection (a-1), shall not exceed an amount
10equal to (i) the amount of the required State contribution that
11would have been calculated under this Section for that fiscal
12year if the System had not received any payments under
13subsection (d) of Section 7.2 of the General Obligation Bond
14Act, minus (ii) the portion of the State's total debt service
15payments for that fiscal year on the bonds issued in fiscal
16year 2003 for the purposes of that Section 7.2, as determined
17and certified by the Comptroller, that is the same as the
18System's portion of the total moneys distributed under
19subsection (d) of Section 7.2 of the General Obligation Bond
20Act. In determining this maximum for State fiscal years 2008
21through 2010, however, the amount referred to in item (i) shall
22be increased, as a percentage of the applicable employee
23payroll, in equal increments calculated from the sum of the
24required State contribution for State fiscal year 2007 plus the
25applicable portion of the State's total debt service payments
26for fiscal year 2007 on the bonds issued in fiscal year 2003

 

 

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1for the purposes of Section 7.2 of the General Obligation Bond
2Act, so that, by State fiscal year 2011, the State is
3contributing at the rate otherwise required under this Section.
4    (c) Payment of the required State contributions and of all
5pensions, retirement annuities, death benefits, refunds, and
6other benefits granted under or assumed by this System, and all
7expenses in connection with the administration and operation
8thereof, are obligations of the State.
9    If members are paid from special trust or federal funds
10which are administered by the employing unit, whether school
11district or other unit, the employing unit shall pay to the
12System from such funds the full accruing retirement costs based
13upon that service, as determined by the System. Employer
14contributions, based on salary paid to members from federal
15funds, may be forwarded by the distributing agency of the State
16of Illinois to the System prior to allocation, in an amount
17determined in accordance with guidelines established by such
18agency and the System.
19    (d) Effective July 1, 1986, any employer of a teacher as
20defined in paragraph (8) of Section 16-106 shall pay the
21employer's normal cost of benefits based upon the teacher's
22service, in addition to employee contributions, as determined
23by the System. Such employer contributions shall be forwarded
24monthly in accordance with guidelines established by the
25System.
26    However, with respect to benefits granted under Section

 

 

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116-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
2of Section 16-106, the employer's contribution shall be 12%
3(rather than 20%) of the member's highest annual salary rate
4for each year of creditable service granted, and the employer
5shall also pay the required employee contribution on behalf of
6the teacher. For the purposes of Sections 16-133.4 and
716-133.5, a teacher as defined in paragraph (8) of Section
816-106 who is serving in that capacity while on leave of
9absence from another employer under this Article shall not be
10considered an employee of the employer from which the teacher
11is on leave.
12    (e) Beginning July 1, 1998, every employer of a teacher
13shall pay to the System an employer contribution computed as
14follows:
15        (1) Beginning July 1, 1998 through June 30, 1999, the
16    employer contribution shall be equal to 0.3% of each
17    teacher's salary.
18        (2) Beginning July 1, 1999 and thereafter, the employer
19    contribution shall be equal to 0.58% of each teacher's
20    salary.
21The school district or other employing unit may pay these
22employer contributions out of any source of funding available
23for that purpose and shall forward the contributions to the
24System on the schedule established for the payment of member
25contributions.
26    These employer contributions are intended to offset a

 

 

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1portion of the cost to the System of the increases in
2retirement benefits resulting from this amendatory Act of 1998.
3    Each employer of teachers is entitled to a credit against
4the contributions required under this subsection (e) with
5respect to salaries paid to teachers for the period January 1,
62002 through June 30, 2003, equal to the amount paid by that
7employer under subsection (a-5) of Section 6.6 of the State
8Employees Group Insurance Act of 1971 with respect to salaries
9paid to teachers for that period.
10    The additional 1% employee contribution required under
11Section 16-152 by this amendatory Act of 1998 is the
12responsibility of the teacher and not the teacher's employer,
13unless the employer agrees, through collective bargaining or
14otherwise, to make the contribution on behalf of the teacher.
15    If an employer is required by a contract in effect on May
161, 1998 between the employer and an employee organization to
17pay, on behalf of all its full-time employees covered by this
18Article, all mandatory employee contributions required under
19this Article, then the employer shall be excused from paying
20the employer contribution required under this subsection (e)
21for the balance of the term of that contract. The employer and
22the employee organization shall jointly certify to the System
23the existence of the contractual requirement, in such form as
24the System may prescribe. This exclusion shall cease upon the
25termination, extension, or renewal of the contract at any time
26after May 1, 1998.

 

 

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1    (f) If the amount of a teacher's salary for any school year
2used to determine final average salary exceeds the member's
3annual full-time salary rate with the same employer for the
4previous school year by more than 6%, the teacher's employer
5shall pay to the System, in addition to all other payments
6required under this Section and in accordance with guidelines
7established by the System, the present value of the increase in
8benefits resulting from the portion of the increase in salary
9that is in excess of 6%. This present value shall be computed
10by the System on the basis of the actuarial assumptions and
11tables used in the most recent actuarial valuation of the
12System that is available at the time of the computation. If a
13teacher's salary for the 2005-2006 school year is used to
14determine final average salary under this subsection (f), then
15the changes made to this subsection (f) by Public Act 94-1057
16shall apply in calculating whether the increase in his or her
17salary is in excess of 6%. For the purposes of this Section,
18change in employment under Section 10-21.12 of the School Code
19on or after June 1, 2005 shall constitute a change in employer.
20The System may require the employer to provide any pertinent
21information or documentation. The changes made to this
22subsection (f) by this amendatory Act of the 94th General
23Assembly apply without regard to whether the teacher was in
24service on or after its effective date.
25    Whenever it determines that a payment is or may be required
26under this subsection, the System shall calculate the amount of

 

 

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1the payment and bill the employer for that amount. The bill
2shall specify the calculations used to determine the amount
3due. If the employer disputes the amount of the bill, it may,
4within 30 days after receipt of the bill, apply to the System
5in writing for a recalculation. The application must specify in
6detail the grounds of the dispute and, if the employer asserts
7that the calculation is subject to subsection (g) or (h) of
8this Section, must include an affidavit setting forth and
9attesting to all facts within the employer's knowledge that are
10pertinent to the applicability of that subsection. Upon
11receiving a timely application for recalculation, the System
12shall review the application and, if appropriate, recalculate
13the amount due.
14    The employer contributions required under this subsection
15(f) may be paid in the form of a lump sum within 90 days after
16receipt of the bill. If the employer contributions are not paid
17within 90 days after receipt of the bill, then interest will be
18charged at a rate equal to the System's annual actuarially
19assumed rate of return on investment compounded annually from
20the 91st day after receipt of the bill. Payments must be
21concluded within 3 years after the employer's receipt of the
22bill.
23    (g) This subsection (g) applies only to payments made or
24salary increases given on or after June 1, 2005 but before July
251, 2011. The changes made by Public Act 94-1057 shall not
26require the System to refund any payments received before July

 

 

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131, 2006 (the effective date of Public Act 94-1057).
2    When assessing payment for any amount due under subsection
3(f), the System shall exclude salary increases paid to teachers
4under contracts or collective bargaining agreements entered
5into, amended, or renewed before June 1, 2005.
6    When assessing payment for any amount due under subsection
7(f), the System shall exclude salary increases paid to a
8teacher at a time when the teacher is 10 or more years from
9retirement eligibility under Section 16-132 or 16-133.2.
10    When assessing payment for any amount due under subsection
11(f), the System shall exclude salary increases resulting from
12overload work, including summer school, when the school
13district has certified to the System, and the System has
14approved the certification, that (i) the overload work is for
15the sole purpose of classroom instruction in excess of the
16standard number of classes for a full-time teacher in a school
17district during a school year and (ii) the salary increases are
18equal to or less than the rate of pay for classroom instruction
19computed on the teacher's current salary and work schedule.
20    When assessing payment for any amount due under subsection
21(f), the System shall exclude a salary increase resulting from
22a promotion (i) for which the employee is required to hold a
23certificate or supervisory endorsement issued by the State
24Teacher Certification Board that is a different certification
25or supervisory endorsement than is required for the teacher's
26previous position and (ii) to a position that has existed and

 

 

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1been filled by a member for no less than one complete academic
2year and the salary increase from the promotion is an increase
3that results in an amount no greater than the lesser of the
4average salary paid for other similar positions in the district
5requiring the same certification or the amount stipulated in
6the collective bargaining agreement for a similar position
7requiring the same certification.
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude any payment to the teacher from
10the State of Illinois or the State Board of Education over
11which the employer does not have discretion, notwithstanding
12that the payment is included in the computation of final
13average salary.
14    (h) When assessing payment for any amount due under
15subsection (f), the System shall exclude any salary increase
16described in subsection (g) of this Section given on or after
17July 1, 2011 but before July 1, 2014 under a contract or
18collective bargaining agreement entered into, amended, or
19renewed on or after June 1, 2005 but before July 1, 2011.
20Notwithstanding any other provision of this Section, any
21payments made or salary increases given after June 30, 2014
22shall be used in assessing payment for any amount due under
23subsection (f) of this Section.
24    (i) The System shall prepare a report and file copies of
25the report with the Governor and the General Assembly by
26January 1, 2007 that contains all of the following information:

 

 

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1        (1) The number of recalculations required by the
2    changes made to this Section by Public Act 94-1057 for each
3    employer.
4        (2) The dollar amount by which each employer's
5    contribution to the System was changed due to
6    recalculations required by Public Act 94-1057.
7        (3) The total amount the System received from each
8    employer as a result of the changes made to this Section by
9    Public Act 94-4.
10        (4) The increase in the required State contribution
11    resulting from the changes made to this Section by Public
12    Act 94-1057.
13    (j) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (k) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

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1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
46-18-12; 97-813, eff. 7-13-12.)
 
5    (40 ILCS 5/16-158.2 new)
6    Sec. 16-158.2. Obligations of State; funding guarantee.
7Pursuant to Article XIII, Section 5 of the 1970 Constitution of
8the State of Illinois, beginning on July 1, 2013, the State
9shall, as a retirement benefit to each participant and
10annuitant of the System be contractually obligated to the
11System (as a fiduciary and trustee of the participants and
12annuitants) to pay the annual required State contribution, as
13determined by the Board of the System using generally accepted
14actuarial principles, as is necessary to bring the total assets
15of the System up to 100% of the total actuarial liabilities of
16the System by the end of State fiscal year 2045. As a further
17retirement benefit and contractual obligation, each fiscal
18year, the State shall pay to each designated retirement system
19the annual required State contribution certified by the Board
20for that fiscal year. Payments of the annual required State
21contribution for each fiscal year shall be made in equal
22monthly installments. Additionally, beginning in fiscal year
232014, State transfers to the Pension Stabilization Fund
24pursuant to Section 20 of the Budget Stabilization Act and
25payments to the System pursuant to Section 25 of the Budget

 

 

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1Stabilization Act shall be further retirement benefits and
2contractual obligations. The transfers and payments prescribed
3in Sections 20 and 25 of the Budget Stabilization Act shall not
4be used by the retirement system when calculation any pension
5payment until the System has reached a funded level of 100%.
6This Section and the security it provides to participants and
7annuitants is intended to be, and is, a contractual right that
8is part of the pension benefits provided to the participants
9and annuitants. Notwithstanding anything to the contrary in the
10Court of Claims Act or any other law, a designated retirement
11system has the exclusive right to and shall bring a mandamus
12action in the Circuit Court of Sangamon County against the
13State to compel the State to make any installment of the annual
14required State contribution required by this Section,
15irrespective of other remedies that may be available to the
16System. Each member or annuitant of the System has the right to
17in any judicial district in which the System maintains an
18office if the System fails to bring an action specified in this
19Section, irrespective of other remedies that may be available
20to the member or annuitant. In making these determinations, the
21required State contribution shall be calculated each year as a
22level percentage of payroll over the years remaining to and
23including fiscal year 2045 and shall be determined under the
24projected unit credit actuarial cost method.
 
25    Section 99. Effective date. This Act takes effect July 1,
262013.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    30 ILCS 122/20
4    30 ILCS 122/25
5    40 ILCS 5/1-103.3
6    40 ILCS 5/2-105.1 new
7    40 ILCS 5/2-105.2 new
8    40 ILCS 5/2-124from Ch. 108 1/2, par. 2-124
9    40 ILCS 5/2-125from Ch. 108 1/2, par. 2-125
10    40 ILCS 5/2-126from Ch. 108 1/2, par. 2-126
11    40 ILCS 5/14-103.40 new
12    40 ILCS 5/14-103.41 new
13    40 ILCS 5/14-131
14    40 ILCS 5/14-132from Ch. 108 1/2, par. 14-132
15    40 ILCS 5/14-133from Ch. 108 1/2, par. 14-133
16    40 ILCS 5/15-107.1 new
17    40 ILCS 5/15-107.2 new
18    40 ILCS 5/15-136from Ch. 108 1/2, par. 15-136
19    40 ILCS 5/15-155from Ch. 108 1/2, par. 15-155
20    40 ILCS 5/15-156from Ch. 108 1/2, par. 15-156
21    40 ILCS 5/15-157from Ch. 108 1/2, par. 15-157
22    40 ILCS 5/16-106.4 new
23    40 ILCS 5/16-106.5 new
24    40 ILCS 5/16-133from Ch. 108 1/2, par. 16-133
25    40 ILCS 5/16-152from Ch. 108 1/2, par. 16-152

 

 

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1    40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158
2    40 ILCS 5/16-158.2 new