Illinois General Assembly - Full Text of SB0777
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Full Text of SB0777  99th General Assembly




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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 Illinois Pension Code is amended by changing
5Sections 15-112, 15-154, and 15-157 and adding Section 15-126.2
6as follows:
7    (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)
8    Sec. 15-112. Final rate of earnings. "Final rate of
10    (a) This subsection (a) applies only to a Tier 1 member.
11    For an employee who is paid on an hourly basis or who
12receives an annual salary in installments during 12 months of
13each academic year, the average annual earnings during the 48
14consecutive calendar month period ending with the last day of
15final termination of employment or the 4 consecutive academic
16years of service in which the employee's earnings were the
17highest, whichever is greater. For any other employee, the
18average annual earnings during the 4 consecutive academic years
19of service in which his or her earnings were the highest. For
20an employee with less than 48 months or 4 consecutive academic
21years of service, the average earnings during his or her entire
22period of service. The earnings of an employee with more than
2336 months of service under item (a) of Section 15-113.1 prior



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1to the date of becoming a participant are, for such period,
2considered equal to the average earnings during the last 36
3months of such service.
4    (b) This subsection (b) applies to a Tier 2 member.
5    For an employee who is paid on an hourly basis or who
6receives an annual salary in installments during 12 months of
7each academic year, the average annual earnings obtained by
8dividing by 8 the total earnings of the employee during the 96
9consecutive months in which the total earnings were the highest
10within the last 120 months prior to termination.
11    For any other employee, the average annual earnings during
12the 8 consecutive academic years within the 10 years prior to
13termination in which the employee's earnings were the highest.
14For an employee with less than 96 consecutive months or 8
15consecutive academic years of service, whichever is necessary,
16the average earnings during his or her entire period of
18    (c) For an employee on leave of absence with pay, or on
19leave of absence without pay who makes contributions during
20such leave, earnings are assumed to be equal to the basic
21compensation on the date the leave began.
22    (d) For an employee on disability leave, earnings are
23assumed to be equal to the basic compensation on the date
24disability occurs or the average earnings during the 24 months
25immediately preceding the month in which disability occurs,
26whichever is greater.



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1    (e) For a Tier 1 member who retires on or after the
2effective date of this amendatory Act of 1997 with at least 20
3years of service as a firefighter or police officer under this
4Article, the final rate of earnings shall be the annual rate of
5earnings received by the participant on his or her last day as
6a firefighter or police officer under this Article, if that is
7greater than the final rate of earnings as calculated under the
8other provisions of this Section.
9    (f) If a Tier 1 member is an employee for at least 6 months
10during the academic year in which his or her employment is
11terminated, the annual final rate of earnings shall be 25% of
12the sum of (1) the annual basic compensation for that year, and
13(2) the amount earned during the 36 months immediately
14preceding that year, if this is greater than the final rate of
15earnings as calculated under the other provisions of this
17    (g) In the determination of the final rate of earnings for
18an employee, that part of an employee's earnings for any
19academic year beginning after June 30, 1997, which exceeds the
20employee's earnings with that employer for the preceding year
21by more than 20 percent shall be excluded; in the event that an
22employee has more than one employer this limitation shall be
23calculated separately for the earnings with each employer. In
24making such calculation, only the basic compensation of
25employees shall be considered, without regard to vacation or
26overtime or to contracts for summer employment.



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1    (h) The following are not considered as earnings in
2determining final rate of earnings: (1) severance or separation
3pay, (2) retirement pay, (3) payment for unused sick leave, and
4(4) payments from an employer for the period used in
5determining final rate of earnings for any purpose other than
6(i) services rendered, (ii) leave of absence or vacation
7granted during that period, and (iii) vacation of up to 56 work
8days allowed upon termination of employment; except that, if
9the benefit has been collectively bargained between the
10employer and the recognized collective bargaining agent
11pursuant to the Illinois Educational Labor Relations Act,
12payment received during a period of up to 2 academic years for
13unused sick leave may be considered as earnings in accordance
14with the applicable collective bargaining agreement, subject
15to the 20% increase limitation of this Section, and if the
16person first becomes a participant on or after the effective
17date of this amendatory Act of the 98th General Assembly,
18payments for unused sick or vacation time shall not be
19considered as earnings. Any unused sick leave considered as
20earnings under this Section shall not be taken into account in
21calculating service credit under Section 15-113.4.
22    (i) Intermittent periods of service shall be considered as
23consecutive in determining final rate of earnings.
24(Source: P.A. 98-92, eff. 7-16-13; 98-599, eff. 6-1-14.)
25    (40 ILCS 5/15-126.2 new)



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1    Sec. 15-126.2. Plan year. "Plan year": The 12-month period
2beginning on July 1 in any year, and ending on June 30 of the
3succeeding year.
4    (40 ILCS 5/15-154)  (from Ch. 108 1/2, par. 15-154)
5    Sec. 15-154. Refunds.
6    (a) A participant whose status as an employee is
7terminated, regardless of cause, or who has been on lay off
8status for more than 120 days, and who is not on leave of
9absence, is entitled to a refund of contributions upon
10application; except that not more than one such refund
11application may be made during any academic year.
12    Except as set forth in subsections (a-1) and (a-2), the
13refund shall be the sum of the accumulated normal, additional,
14and survivors insurance contributions, plus the entire
15contribution made by the participant under Section 15-113.3,
16less the amount of interest credited on these contributions
17each year in excess of 4 1/2% of the amount on which interest
18was calculated.
19    (a-1) A person who elects, in accordance with the
20requirements of Section 15-134.5, to participate in the
21portable benefit package and who becomes a participating
22employee under that retirement program upon the conclusion of
23the one-year waiting period applicable to the portable benefit
24package election shall have his or her refund calculated in
25accordance with the provisions of subsection (a-2).



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1    (a-2) The refund payable to a participant described in
2subsection (a-1) shall be the sum of the participant's
3accumulated normal and additional contributions, as defined in
4Sections 15-116 and 15-117, plus the entire contribution made
5by the participant under Section 15-113.3. If the participant
6terminates with 5 or more years of service for employment as
7defined in Section 15-113.1, he or she shall also be entitled
8to a distribution of employer contributions in an amount equal
9to the sum of the accumulated normal and additional
10contributions, as defined in Sections 15-116 and 15-117.
11    (b) Upon acceptance of a refund, the participant forfeits
12all accrued rights and credits in the System, and if
13subsequently reemployed, the participant shall be considered a
14new employee subject to all the qualifying conditions for
15participation and eligibility for benefits applicable to new
16employees. If such person again becomes a participating
17employee and continues as such for 2 years, or is employed by
18an employer and participates for at least 2 years in the
19Federal Civil Service Retirement System, all such rights,
20credits, and previous status as a participant shall be restored
21upon repayment of the amount of the refund, together with
22compound interest thereon from the date the refund was issued
23received to the date of repayment at the rate of 6% per annum
24through August 31, 1982, and at the effective rates after that
25date. When a participant in the portable benefit package who
26received a refund which included a distribution of employer



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1contributions repays a refund pursuant to this Section,
2one-half of the amount repaid shall be deemed the member's
3reinstated accumulated normal and additional contributions and
4the other half shall be allocated as an employer contribution
5to the System, except that any amount repaid for previously
6purchased military service credit under Section 15-113.3 shall
7be accounted for as such.
8    (c) If a participant covered under the traditional benefit
9package has made survivors insurance contributions, but has no
10survivors insurance beneficiary upon retirement, he or she
11shall be entitled to elect a refund of the accumulated
12survivors insurance contributions, or to elect an additional
13annuity the value of which is equal to the accumulated
14survivors insurance contributions. This election must be made
15prior to the date the person's retirement annuity is approved
16by the System.
17    (d) A participant, upon application, is entitled to a
18refund of his or her accumulated additional contributions
19attributable to the additional contributions described in the
20last sentence of subsection (c) of Section 15-157. Upon the
21acceptance of such a refund of accumulated additional
22contributions, the participant forfeits all rights and credits
23which may have accrued because of such contributions.
24    (e) A participant who terminates his or her employee status
25and elects to waive service credit under Section 15-154.2, is
26entitled to a refund of the accumulated normal, additional and



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1survivors insurance contributions, if any, which were credited
2the participant for this service, or to an additional annuity
3the value of which is equal to the accumulated normal,
4additional and survivors insurance contributions, if any;
5except that not more than one such refund application may be
6made during any academic year. Upon acceptance of this refund,
7the participant forfeits all rights and credits accrued because
8of this service.
9    (f) If a police officer or firefighter receives a
10retirement annuity under Rule 1 or 3 of Section 15-136, he or
11she shall be entitled at retirement to a refund of the
12difference between his or her accumulated normal contributions
13and the normal contributions which would have accumulated had
14such person filed a waiver of the retirement formula provided
15by Rule 4 of Section 15-136.
16    (g) If, at the time of retirement, a participant would be
17entitled to a retirement annuity under Rule 1, 2, 3, 4, or 5 of
18Section 15-136, or under Section 15-136.4, that exceeds the
19maximum specified in clause (1) of subsection (c) of Section
2015-136, he or she shall be entitled to a refund of the employee
21contributions, if any, paid under Section 15-157 after the date
22upon which continuance of such contributions would have
23otherwise caused the retirement annuity to exceed this maximum,
24plus compound interest at the effective rates.
25(Source: P.A. 92-16, eff. 6-28-01; 92-424, eff. 8-17-01;
2693-347, eff. 7-24-03.)



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1    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)
2    Sec. 15-157. Employee contributions.
3    (a) Except as provided in subsection (a-5), each
4participating employee shall make contributions towards the
5retirement benefits payable under the retirement program
6applicable to the employee from each payment of earnings
7applicable to employment under this system on and after the
8date of becoming a participant as follows: Prior to September
91, 1949, 3 1/2% of earnings; from September 1, 1949 to August
1031, 1955, 5%; from September 1, 1955 to August 31, 1969, 6%;
11from September 1, 1969, 6 1/2%. These contributions are to be
12considered as normal contributions for purposes of this
14    Except as provided in subsection (a-5), each participant
15who is a police officer or firefighter shall make normal
16contributions of 8% of each payment of earnings applicable to
17employment as a police officer or firefighter under this system
18on or after September 1, 1981, unless he or she files with the
19board within 60 days after the effective date of this
20amendatory Act of 1991 or 60 days after the board receives
21notice that he or she is employed as a police officer or
22firefighter, whichever is later, a written notice waiving the
23retirement formula provided by Rule 4 of Section 15-136. This
24waiver shall be irrevocable. If a participant had met the
25conditions set forth in Section 15-132.1 prior to the effective



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1date of this amendatory Act of 1991 but failed to make the
2additional normal contributions required by this paragraph, he
3or she may elect to pay the additional contributions plus
4compound interest at the effective rate. If such payment is
5received by the board, the service shall be considered as
6police officer service in calculating the retirement annuity
7under Rule 4 of Section 15-136. While performing service
8described in clause (i) or (ii) of Rule 4 of Section 15-136, a
9participating employee shall be deemed to be employed as a
10firefighter for the purpose of determining the rate of employee
11contributions under this Section.
12    (a-5) Beginning July 1, 2014, in lieu of the contribution
13otherwise required under subsection (a), each Tier 1 member,
14other than a Tier 1 member who is a police officer or
15firefighter, shall contribute 6% of earnings toward the
16retirement benefits payable under the retirement programs
17applicable to the employee from each payment of earnings
18applicable to employment under this system.
19    Beginning July 1, 2014, in lieu of the contribution
20otherwise required under subsection (a), each Tier 1 member who
21is a police officer or firefighter shall contribute 7.5% of
22each payment of earnings applicable to employment as a police
23officer or firefighter under this system, unless he or she has
24filed a waiver with the board pursuant to subsection (a).
25    The contributions required under this subsection (a-5) are
26to be considered normal contributions for the purposes of this



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2    (b) Starting September 1, 1969 and, in the case of Tier 1
3members, ending on June 30, 2014, each participating employee
4shall make additional contributions of 1/2 of 1% of earnings to
5finance a portion of the cost of the annual increases in
6retirement annuity provided under Section 15-136, except that
7with respect to participants in the self-managed plan this
8additional contribution shall be used to finance the benefits
9obtained under that retirement program.
10    (c) In addition to the amounts described in subsections (a)
11and (b) of this Section, each participating employee shall make
12contributions of 1% of earnings applicable under this system on
13and after August 1, 1959. The contributions made under this
14subsection (c) shall be considered as survivor's insurance
15contributions for purposes of this Article if the employee is
16covered under the traditional benefit package, and such
17contributions shall be considered as additional contributions
18for purposes of this Article if the employee is participating
19in the self-managed plan or has elected to participate in the
20portable benefit package and has completed the applicable
21one-year waiting period. Contributions in excess of $80 during
22any fiscal year beginning before August 31, 1969 and in excess
23of $120 during any fiscal year thereafter until September 1,
241971 shall be considered as additional contributions for
25purposes of this Article.
26    (d) If the board by board rule so permits and subject to



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1such conditions and limitations as may be specified in its
2rules, a participant may make other additional contributions of
3such percentage of earnings or amounts as the participant shall
4elect in a written notice thereof received by the board.
5    (e) That fraction of a participant's total accumulated
6normal contributions, the numerator of which is equal to the
7number of years of service in excess of that which is required
8to qualify for the maximum retirement annuity, and the
9denominator of which is equal to the total service of the
10participant, shall be considered as accumulated additional
11contributions. The determination of the applicable maximum
12annuity and the adjustment in contributions required by this
13provision shall be made as of the date of the participant's
15    (f) Notwithstanding the foregoing, a participating
16employee shall not be required to make contributions under this
17Section after the date upon which continuance of such
18contributions would otherwise cause his or her retirement
19annuity to exceed the maximum retirement annuity as specified
20in clause (1) of subsection (c) of Section 15-136.
21    (g) A participant participating employee may make
22contributions for the purchase of service credit under this
23Article; however, only a participating employee may make
24optional contributions under subsection (b) of Section
2515-157.1 of this Article.
26    (h) A Tier 2 member shall not make contributions on



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1earnings that exceed the limitation as prescribed under
2subsection (b) of Section 15-111 of this Article.
3(Source: P.A. 98-92, eff. 7-16-13; 98-599, eff. 6-1-14.)