Full Text of SB2933 98th General Assembly
SB2933ham001 98TH GENERAL ASSEMBLY | Rep. Michael J. Madigan Filed: 11/12/2014
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| 1 | | AMENDMENT TO SENATE BILL 2933
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2933 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Pension Code is amended by | 5 | | changing Section 22-101B as follows: | 6 | | (40 ILCS 5/22-101B)
| 7 | | Sec. 22-101B. Health Care Benefits. | 8 | | (a) The Chicago Transit Authority (hereinafter referred to | 9 | | in this Section as the "Authority") shall take all actions | 10 | | lawfully available to it to separate the funding of health care | 11 | | benefits for retirees and their dependents and survivors from | 12 | | the funding for its retirement system. The Authority shall | 13 | | endeavor to achieve this separation as soon as possible, and in | 14 | | any event no later than July 1, 2009. | 15 | | (b) Effective 90 days after the effective date of this | 16 | | amendatory Act of the 95th General Assembly, a Retiree Health |
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| 1 | | Care Trust is established for the purpose of providing health | 2 | | care benefits to eligible retirees and their dependents and | 3 | | survivors in accordance with the terms and conditions set forth | 4 | | in this Section 22-101B. The Retiree Health Care Trust shall be | 5 | | solely responsible for providing health care benefits to | 6 | | eligible retirees and their dependents and survivors upon the | 7 | | exhaustion of the account established by the Retirement Plan | 8 | | for Chicago Transit Authority Employees pursuant to Section | 9 | | 401(h) of the Internal Revenue Code of 1986 , but no earlier | 10 | | than January 1, 2009 and no later than July 1, 2009.
| 11 | | (1) The Board of Trustees shall consist of 7 members | 12 | | appointed as follows: (i) 3 trustees shall be appointed by | 13 | | the Chicago Transit Board; (ii) one trustee shall be | 14 | | appointed by an organization representing the highest | 15 | | number of Chicago Transit Authority participants; (iii) | 16 | | one trustee shall be appointed by an organization | 17 | | representing the second-highest number of Chicago Transit | 18 | | Authority participants; (iv) one trustee shall be | 19 | | appointed by the recognized coalition representatives of | 20 | | participants who are not represented by an organization | 21 | | with the highest or second-highest number of Chicago | 22 | | Transit Authority participants; and (v) one trustee shall | 23 | | be selected by the Regional Transportation Authority Board | 24 | | of Directors, and the trustee shall be a professional | 25 | | fiduciary who has experience in the area of collectively | 26 | | bargained retiree health plans. Trustees shall serve until |
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| 1 | | a successor has been appointed and qualified, or until | 2 | | resignation, death, incapacity, or disqualification.
| 3 | | Any person appointed as a trustee of the board shall | 4 | | qualify by taking an oath of office that he or she will | 5 | | diligently and honestly administer the affairs of the | 6 | | system, and will not knowingly violate or willfully permit | 7 | | the violation of any of the provisions of law applicable to | 8 | | the Plan, including Sections 1-109, 1-109.1, 1-109.2, | 9 | | 1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois | 10 | | Pension Code.
| 11 | | Each trustee shall cast individual votes, and a | 12 | | majority vote shall be final and binding upon all | 13 | | interested parties, provided that the Board of Trustees may | 14 | | require a supermajority vote with respect to the investment | 15 | | of the assets of the Retiree Health Care Trust, and may set | 16 | | forth that requirement in the trust agreement or by-laws of | 17 | | the Board of Trustees. Each trustee shall have the rights, | 18 | | privileges, authority and obligations as are usual and | 19 | | customary for such fiduciaries.
| 20 | | (2) The Board of Trustees shall establish and | 21 | | administer a health care benefit program for eligible | 22 | | retirees and their dependents and survivors. Any health | 23 | | care benefit program established by the Board of Trustees | 24 | | for eligible retirees and their dependents and survivors | 25 | | effective on or after July 1, 2009 shall not contain any | 26 | | plan which provides for more than 90% coverage for |
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| 1 | | in-network services or 70% coverage for out-of-network | 2 | | services after any deductible has been paid, except that | 3 | | coverage through a health maintenance organization ("HMO") | 4 | | may be provided at 100%.
| 5 | | (2.5) The Board of Trustees may also establish and | 6 | | administer a health reimbursement arrangement for retirees | 7 | | and for former employees of the Authority or the Retirement | 8 | | Plan, and their survivors, who have contributed to the | 9 | | Retiree Health Care Trust but do not satisfy the years of | 10 | | service requirement of subdivision (b)(4) and the terms of | 11 | | the retiree health care plan; or for those who do satisfy | 12 | | the requirements of subdivision (b)(4) and the terms of the | 13 | | retiree health care plan but who decline coverage under the | 14 | | plan prior to retirement. Any such health reimbursement | 15 | | arrangement may provide that: the retirees or former | 16 | | employees of the Authority or the Retirement Plan, and | 17 | | their survivors, must have reached age 65 to be eligible to | 18 | | participate in the health reimbursement arrangement; | 19 | | contributions by the retirees or former employees of the | 20 | | Authority or the Retirement Plan to the Retiree Health Care | 21 | | Trust shall be considered assets of the Retiree Health Care | 22 | | Trust only; contributions shall not accrue interest for the | 23 | | benefit of the retiree or former employee of the Authority | 24 | | or the Retirement Plan or survivor; benefits shall be | 25 | | payable in accordance with the Internal Revenue Code of | 26 | | 1986; the amounts paid to or on account of the retiree or |
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| 1 | | former employee of the Authority or the Retirement Plan or | 2 | | survivor shall not exceed the total amount which the | 3 | | retiree or former employee of the Authority or the | 4 | | Retirement Plan contributed to the Retiree Health Care | 5 | | Trust; the Retiree Health Care Trust may charge a | 6 | | reasonable administrative fee for processing the benefits. | 7 | | The Board of Trustees of the Retiree Health Care Trust may | 8 | | establish such rules, limitations and requirements as the | 9 | | Board of Trustees deems appropriate. | 10 | | (3) The Retiree Health Care Trust shall be administered | 11 | | by the Board of Trustees according to the following | 12 | | requirements:
| 13 | | (i) The Board of Trustees may cause amounts on | 14 | | deposit in the Retiree Health Care Trust to be invested | 15 | | in those investments that are permitted investments | 16 | | for the investment of moneys held under any one or more | 17 | | of the pension or retirement systems of the State, any | 18 | | unit of local government or school district, or any | 19 | | agency or instrumentality thereof. The Board, by a vote | 20 | | of at least two-thirds of the trustees, may transfer | 21 | | investment management to the Illinois State Board of | 22 | | Investment, which is hereby authorized to manage these | 23 | | investments when so requested by the Board of Trustees.
| 24 | | (ii) The Board of Trustees shall establish and | 25 | | maintain an appropriate funding reserve level which | 26 | | shall not be less than the amount of incurred and |
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| 1 | | unreported claims plus 12 months of expected claims and | 2 | | administrative expenses.
| 3 | | (iii) The Board of Trustees shall make an annual | 4 | | assessment of the funding levels of the Retiree Health | 5 | | Care Trust and shall submit a report to the Auditor | 6 | | General at least 90 days prior to the end of the fiscal | 7 | | year. The report shall provide the following: | 8 | | (A) the actuarial present value of projected | 9 | | benefits expected to be paid to current and future | 10 | | retirees and their dependents and survivors; | 11 | | (B) the actuarial present value of projected | 12 | | contributions and trust income plus assets; | 13 | | (C) the reserve required by subsection | 14 | | (b)(3)(ii); and | 15 | | (D) an assessment of whether the actuarial | 16 | | present value of projected benefits expected to be | 17 | | paid to current and future retirees and their | 18 | | dependents and survivors exceeds or is less than | 19 | | the actuarial present value of projected | 20 | | contributions and trust income plus assets in | 21 | | excess of the reserve required by subsection | 22 | | (b)(3)(ii). | 23 | | If the actuarial present value of projected | 24 | | benefits expected to be paid to current and future | 25 | | retirees and their dependents and survivors exceeds | 26 | | the actuarial present value of projected contributions |
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| 1 | | and trust income plus assets in excess of the reserve | 2 | | required by subsection (b)(3)(ii), then the report | 3 | | shall provide a plan, to be implemented over a period | 4 | | of not more than 10 years from each valuation date, | 5 | | which would make the actuarial present value of | 6 | | projected contributions and trust income plus assets | 7 | | equal to or exceed the actuarial present value of | 8 | | projected benefits expected to be paid to current and | 9 | | future retirees and their dependents and survivors. | 10 | | The plan may consist of increases in employee, retiree, | 11 | | dependent, or survivor contribution levels, decreases | 12 | | in benefit levels, or other plan changes or any | 13 | | combination thereof. If the actuarial present value of | 14 | | projected benefits expected to be paid to current and | 15 | | future retirees and their dependents and survivors is | 16 | | less than the actuarial present value of projected | 17 | | contributions and trust income plus assets in excess of | 18 | | the reserve required by subsection (b)(3)(ii), then | 19 | | the report may provide a plan of decreases in employee, | 20 | | retiree, dependent, or survivor contribution levels, | 21 | | increases in benefit levels, or other plan changes, or | 22 | | any combination thereof, to the extent of the surplus. | 23 | | (iv) The Auditor General shall review the report | 24 | | and plan provided in subsection (b)(3)(iii) and issue a | 25 | | determination within 90 days after receiving the | 26 | | report and plan, with a copy of such determination |
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| 1 | | provided to the General Assembly and the Regional | 2 | | Transportation Authority, as follows: | 3 | | (A) In the event of a projected shortfall, if | 4 | | the Auditor General determines that the | 5 | | assumptions stated in the report are not | 6 | | unreasonable in the aggregate and that the plan of | 7 | | increases in employee, retiree, dependent, or | 8 | | survivor contribution levels, decreases in benefit | 9 | | levels, or other plan changes, or any combination | 10 | | thereof, to be implemented over a period of not | 11 | | more than 10 years from each valuation date, is | 12 | | reasonably projected to make the actuarial present | 13 | | value of projected contributions and trust income | 14 | | plus assets equal to or in excess of the actuarial | 15 | | present value of projected benefits expected to be | 16 | | paid to current and future retirees and their | 17 | | dependents and survivors, then the Board of | 18 | | Trustees shall implement the plan. If the Auditor | 19 | | General determines that the assumptions stated in | 20 | | the report are unreasonable in the aggregate, or | 21 | | that the plan of increases in employee, retiree, | 22 | | dependent, or survivor contribution levels, | 23 | | decreases in benefit levels, or other plan changes | 24 | | to be implemented over a period of not more than 10 | 25 | | years from each valuation date, is not reasonably | 26 | | projected to make the actuarial present value of |
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| 1 | | projected contributions and trust income plus | 2 | | assets equal to or in excess of the actuarial | 3 | | present value of projected benefits expected to be | 4 | | paid to current and future retirees and their | 5 | | dependents and survivors, then the Board of | 6 | | Trustees shall not implement the plan, the Auditor | 7 | | General shall explain the basis for such | 8 | | determination to the Board of Trustees, and the | 9 | | Auditor General may make recommendations as to an | 10 | | alternative report and plan. | 11 | | (B) In the event of a projected surplus, if the | 12 | | Auditor General determines that the assumptions | 13 | | stated in the report are not unreasonable in the | 14 | | aggregate and that the plan of decreases in | 15 | | employee, retiree, dependent, or survivor | 16 | | contribution levels, increases in benefit levels, | 17 | | or both, is not unreasonable in the aggregate, then | 18 | | the Board of Trustees shall implement the plan. If | 19 | | the Auditor General determines that the | 20 | | assumptions stated in the report are unreasonable | 21 | | in the aggregate, or that the plan of decreases in | 22 | | employee, retiree, dependent, or survivor | 23 | | contribution levels, increases in benefit levels, | 24 | | or both, is unreasonable in the aggregate, then the | 25 | | Board of Trustees shall not implement the plan, the | 26 | | Auditor General shall explain the basis for such |
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| 1 | | determination to the Board of Trustees, and the | 2 | | Auditor General may make recommendations as to an | 3 | | alternative report and plan. | 4 | | (C) The Board of Trustees shall submit an | 5 | | alternative report and plan within 45 days after | 6 | | receiving a rejection determination by the Auditor | 7 | | General. A determination by the Auditor General on | 8 | | any alternative report and plan submitted by the | 9 | | Board of Trustees shall be made within 90 days | 10 | | after receiving the alternative report and plan, | 11 | | and shall be accepted or rejected according to the | 12 | | requirements of this subsection (b)(3)(iv). The | 13 | | Board of Trustees shall continue to submit | 14 | | alternative reports and plans to the Auditor | 15 | | General, as necessary, until a favorable | 16 | | determination is made by the Auditor General.
| 17 | | (4) For any retiree who first retires effective on or | 18 | | after January 18, 2008, to be eligible for retiree health | 19 | | care benefits upon retirement, the retiree must be at least | 20 | | 55 years of age, retire with 10 or more years of continuous | 21 | | service and satisfy the preconditions established by | 22 | | Public Act 95-708 in addition to any rules or regulations | 23 | | promulgated by the Board of Trustees. Notwithstanding the | 24 | | foregoing, any retiree hired on or before September 5, 2001 | 25 | | who retires with 25 years or more of continuous service | 26 | | shall be eligible for retiree health care benefits upon |
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| 1 | | retirement in accordance with any rules or regulations | 2 | | adopted by the Board of Trustees; provided he or she | 3 | | retires prior to the full execution of the successor | 4 | | collective bargaining agreement to the collective | 5 | | bargaining agreement that became effective January 1, 2007 | 6 | | between the Authority and the organizations representing | 7 | | the highest and second-highest number of Chicago Transit | 8 | | Authority participants. This paragraph (4) shall not apply | 9 | | to a disability allowance.
| 10 | | (5) Effective January 1, 2009, the aggregate amount of | 11 | | retiree, dependent and survivor contributions to the cost | 12 | | of their health care benefits shall not exceed more than | 13 | | 45% of the total cost of such benefits. The Board of | 14 | | Trustees shall have the discretion to provide different | 15 | | contribution levels for retirees, dependents and survivors | 16 | | based on their years of service, level of coverage or | 17 | | Medicare eligibility, provided that the total contribution | 18 | | from all retirees, dependents, and survivors shall be not | 19 | | more than 45% of the total cost of such benefits. The term | 20 | | "total cost of such benefits" for purposes of this | 21 | | subsection shall be the total amount expended by the | 22 | | retiree health benefit program in the prior plan year, as | 23 | | calculated and certified in writing by the Retiree Health | 24 | | Care Trust's enrolled actuary to be appointed and paid for | 25 | | by the Board of Trustees.
| 26 | | (6) Effective January 18, 2008, all employees of the |
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| 1 | | Authority shall contribute to the Retiree Health Care Trust | 2 | | in an amount not less than 3% of compensation.
| 3 | | (7) No earlier than January 1, 2009 and no later than | 4 | | July 1, 2009 as the Retiree Health Care Trust becomes | 5 | | solely responsible for providing health care benefits to | 6 | | eligible retirees and their dependents and survivors in | 7 | | accordance with subsection (b) of this Section 22-101B, the | 8 | | Authority shall not have any obligation to provide health | 9 | | care to current or future retirees and their dependents or | 10 | | survivors. Employees, retirees, dependents, and survivors | 11 | | who are required to make contributions to the Retiree | 12 | | Health Care Trust shall make contributions at the level set | 13 | | by the Board of Trustees pursuant to the requirements of | 14 | | this Section 22-101B.
| 15 | | (Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08; | 16 | | 96-1254, eff. 7-23-10.)".
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