Full Text of HB0751 100th General Assembly
HB0751sam001 100TH GENERAL ASSEMBLY | Sen. Linda Holmes Filed: 5/15/2018
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| 1 | | AMENDMENT TO HOUSE BILL 751
| 2 | | AMENDMENT NO. ______. Amend House Bill 751 on page 1, line | 3 | | 5, by replacing "16-150.1 and" with "7-141.1, 16-150.1, and"; | 4 | | and | 5 | | on page 1, immediately below line 5, by inserting the | 6 | | following: | 7 | | "(40 ILCS 5/7-141.1)
| 8 | | Sec. 7-141.1. Early retirement incentive.
| 9 | | (a) The General Assembly finds and declares that:
| 10 | | (1) Units of local government across the State have | 11 | | been functioning
under a financial crisis.
| 12 | | (2) This financial crisis is expected to continue.
| 13 | | (3) Units of local government must depend on additional | 14 | | sources of
revenue and, when those sources are not | 15 | | forthcoming, must establish
cost-saving programs.
| 16 | | (4) An early retirement incentive designed |
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| 1 | | specifically to target
highly-paid senior employees could | 2 | | result in significant annual cost
savings.
| 3 | | (5) The early retirement incentive should be made | 4 | | available only to
those units of local government that | 5 | | determine that an early retirement
incentive is in their | 6 | | best interest.
| 7 | | (6) A unit of local government adopting a program of | 8 | | early retirement
incentives under this Section is | 9 | | encouraged to implement personnel procedures
to prohibit, | 10 | | for at least 5 years, the rehiring (whether on payroll or | 11 | | by
independent contract) of employees who receive early | 12 | | retirement incentives.
| 13 | | (7) A unit of local government adopting a program of | 14 | | early retirement
incentives under this Section is also | 15 | | encouraged to replace as few of the
participating employees | 16 | | as possible and to hire replacement employees for
salaries | 17 | | totaling no more than 80% of the total salaries formerly | 18 | | paid to the
employees who participate in the early | 19 | | retirement program.
| 20 | | It is the primary purpose of this Section to encourage | 21 | | units of local
government that can realize true cost savings, | 22 | | or have determined that an early
retirement program is in their | 23 | | best interest, to implement an early retirement
program.
| 24 | | (b) Until the effective date of this amendatory Act of | 25 | | 1997, this
Section does not apply to any employer that is a | 26 | | city, village, or incorporated
town, nor to the employees of |
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| 1 | | any such employer. Beginning on the effective
date of this | 2 | | amendatory Act of 1997, any employer under this Article, | 3 | | including
an employer that is a city, village, or incorporated | 4 | | town, may establish an
early retirement incentive program for | 5 | | its employees under this Section. The
decision of a city, | 6 | | village, or incorporated town to consider or establish an
early | 7 | | retirement program is at the sole discretion of that city, | 8 | | village, or
incorporated town, and nothing in this amendatory | 9 | | Act of 1997 limits or
otherwise diminishes this discretion. | 10 | | Nothing contained in this Section shall
be construed to require | 11 | | a city, village, or incorporated town to establish an
early | 12 | | retirement program and no city, village, or incorporated town | 13 | | may be
compelled to implement such a program.
| 14 | | The benefits provided in this Section are available only to | 15 | | members
employed by a participating employer that has filed | 16 | | with the Board of the
Fund a resolution or ordinance expressly | 17 | | providing for the creation of an
early retirement incentive | 18 | | program under this Section for its employees and
specifying the | 19 | | effective date of the early retirement incentive program.
| 20 | | Subject to the limitation in subsection (h), an employer may | 21 | | adopt a resolution
or ordinance providing a program of early | 22 | | retirement incentives under this
Section at any time.
| 23 | | The resolution or ordinance shall be in substantially the | 24 | | following form:
| 25 | | RESOLUTION (ORDINANCE) NO. ....
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| 1 | | A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
| 2 | | RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
| 3 | | IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
| 4 | | WHEREAS, Section 7-141.1 of the Illinois Pension Code | 5 | | provides that a
participating employer may elect to adopt an | 6 | | early retirement
incentive program offered by the Illinois | 7 | | Municipal Retirement Fund by
adopting a resolution or | 8 | | ordinance; and
| 9 | | WHEREAS, The goal of adopting an early retirement program | 10 | | is
to realize a substantial savings in personnel costs by | 11 | | offering early
retirement incentives to employees who have | 12 | | accumulated many years of
service credit; and
| 13 | | WHEREAS, Implementation of the early retirement program | 14 | | will provide a
budgeting tool to aid in controlling payroll | 15 | | costs; and
| 16 | | WHEREAS, The (name of governing body) has determined that | 17 | | the adoption of an
early retirement incentive program is in the | 18 | | best interests of the (name of
participating employer); | 19 | | therefore be it
| 20 | | RESOLVED (ORDAINED) by the (name of governing body) of | 21 | | (name of
participating employer) that:
| 22 | | (1) The (name of participating employer) does hereby adopt | 23 | | the Illinois
Municipal Retirement Fund early retirement | 24 | | incentive program as provided in
Section 7-141.1 of the | 25 | | Illinois Pension Code. The early retirement incentive
program | 26 | | shall take effect on (date).
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| 1 | | (2) In order to help achieve a true cost savings, a person | 2 | | who retires under
the early retirement incentive program shall | 3 | | lose those incentives if he or she
later accepts employment | 4 | | with any IMRF employer in a position for which
participation in | 5 | | IMRF is required or is elected by the employee.
| 6 | | (3) In order to utilize an early retirement incentive as a | 7 | | budgeting
tool, the (name of participating employer) will use | 8 | | its best efforts either
to limit the number of employees who | 9 | | replace the employees who retire under
the early retirement | 10 | | program or to limit the salaries paid to the employees who
| 11 | | replace the employees who retire under the early retirement | 12 | | program.
| 13 | | (4) The effective date of each employee's retirement under | 14 | | this early
retirement program shall be set by (name of | 15 | | employer) and shall be no
earlier than the effective date of | 16 | | the program and no later than one year after
that effective | 17 | | date; except that the employee may require that the retirement
| 18 | | date set by the employer be no later than the June 30 next | 19 | | occurring after the
effective date of the program and no | 20 | | earlier than the date upon which the
employee qualifies for | 21 | | retirement.
| 22 | | (5) To be eligible for the early retirement incentive under | 23 | | this Section,
the employee must have attained age 50 and have | 24 | | at least 20 years of creditable
service by his or her | 25 | | retirement date.
| 26 | | (6) The (clerk or secretary) shall promptly file a |
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| 1 | | certified copy of
this resolution (ordinance) with the Board of | 2 | | Trustees of the Illinois
Municipal Retirement Fund.
| 3 | | CERTIFICATION
| 4 | | I, (name), the (clerk or secretary) of the (name of | 5 | | participating
employer) of the County of (name), State of | 6 | | Illinois, do hereby certify
that I am the keeper of the books | 7 | | and records of the (name of employer)
and that the foregoing is | 8 | | a true and correct copy of a resolution
(ordinance) duly | 9 | | adopted by the (governing body) at a meeting duly convened
and | 10 | | held on (date).
| 11 | | SEAL
| 12 | | (Signature of clerk or secretary)
| 13 | | (c) To be eligible for the benefits provided under an early | 14 | | retirement
incentive program adopted under this Section, a | 15 | | member must:
| 16 | | (1) be a participating employee of this Fund who, on | 17 | | the effective date of
the program, (i) is in active payroll | 18 | | status as an employee of a participating
employer that has | 19 | | filed the required ordinance or resolution with the Board,
| 20 | | (ii) is on layoff status from such a position with a right | 21 | | of re-employment or
recall to service, (iii) is on a leave | 22 | | of absence from such a position, or (iv)
is on disability | 23 | | but has not been receiving benefits under Section 7-146 or
| 24 | | 7-150 for a period of more than 2 years from the date of | 25 | | application;
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| 1 | | (2) have never previously received a retirement | 2 | | annuity under
this Article or under the Retirement Systems | 3 | | Reciprocal Act using service
credit established under this | 4 | | Article;
| 5 | | (3) (blank);
| 6 | | (4) have at least 20 years of creditable service in the | 7 | | Fund by the date
of retirement, without the use of any | 8 | | creditable service established under this
Section;
| 9 | | (5) have attained age 50 by the date of retirement, | 10 | | without the use of any
age enhancement received under this | 11 | | Section; and
| 12 | | (6) be eligible to receive a retirement annuity under | 13 | | this Article by the
date of retirement, for which purpose | 14 | | the age enhancement and creditable
service established | 15 | | under this Section may be considered.
| 16 | | (d) The employer shall determine the retirement date for | 17 | | each employee
participating in the early retirement program | 18 | | adopted under this Section. The
retirement date shall be no | 19 | | earlier than the effective date of the program and
no later | 20 | | than one year after that effective date, except that the | 21 | | employee may
require that the retirement date set by the | 22 | | employer be no later than the June
30 next occurring after the | 23 | | effective date of the program and no earlier than
the date upon | 24 | | which the employee qualifies for retirement. The employer shall
| 25 | | give each employee participating in the early retirement | 26 | | program at least 30
days written notice of the employee's |
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| 1 | | designated retirement date, unless the
employee waives this | 2 | | notice requirement.
| 3 | | (e) An eligible person may establish up to 5 years of | 4 | | creditable service
under this Section. In addition, for each | 5 | | period of creditable service
established under this Section, a | 6 | | person shall have his or her age at
retirement deemed enhanced | 7 | | by an equivalent period.
| 8 | | The creditable service established under this Section may | 9 | | be used for all
purposes under this Article and the Retirement | 10 | | Systems Reciprocal Act,
except for the computation of final | 11 | | rate of earnings and the determination
of earnings, salary, or | 12 | | compensation under this or any other Article of the
Code.
| 13 | | The age enhancement established under this Section may be | 14 | | used for all
purposes under this Article (including calculation | 15 | | of the reduction imposed
under subdivision (a)1b(iv) of Section | 16 | | 7-142), except for purposes of a
reversionary annuity under | 17 | | Section 7-145 and any distributions required because
of age. | 18 | | The age enhancement established under this Section may be used | 19 | | in
calculating a proportionate annuity payable by this Fund | 20 | | under the Retirement
Systems Reciprocal Act, but shall not be | 21 | | used in determining benefits payable
under other Articles of | 22 | | this Code under the Retirement Systems Reciprocal Act.
| 23 | | (f) For all creditable service established under this | 24 | | Section, the
member must pay to the Fund an employee | 25 | | contribution consisting of the total employee contribution | 26 | | rate in effect at the time the member purchases the service for |
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| 1 | | the plan in which the member was participating with the | 2 | | employer at that time multiplied by the member's highest annual | 3 | | salary rate used in the determination of the
final rate of | 4 | | earnings for retirement annuity purposes for each year of
| 5 | | creditable service granted under this Section.
Contributions | 6 | | for fractions of a year of service shall be prorated.
Any | 7 | | amounts that are disregarded in determining the final rate of | 8 | | earnings
under subdivision (d)(5) of Section 7-116 (the 125% | 9 | | rule) shall also be
disregarded in determining the required | 10 | | contribution under this subsection (f).
| 11 | | The employee contribution shall be paid to the Fund as | 12 | | follows: If the
member is entitled to a lump sum payment for | 13 | | accumulated vacation, sick leave,
or personal leave upon | 14 | | withdrawal from service, the employer shall deduct the
employee | 15 | | contribution from that lump sum and pay the deducted amount | 16 | | directly
to the Fund. If there is no such lump sum payment or | 17 | | the required employee
contribution exceeds the net amount of | 18 | | the lump sum payment, then the remaining
amount due, at the | 19 | | option of the employee, may either be paid to the Fund
before | 20 | | the annuity commences or deducted from the retirement annuity | 21 | | in 24
equal monthly installments.
| 22 | | (g) An annuitant who has received any age enhancement or | 23 | | creditable service
under this Section and thereafter accepts | 24 | | employment with or enters into a
personal services contract | 25 | | with an employer under this Article thereby forfeits
that age | 26 | | enhancement and creditable service; except that this |
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| 1 | | restriction
does not apply to (1) service in an elective | 2 | | office, so long as the annuitant
does not participate in this | 3 | | Fund with respect to that office, (2) a person appointed as an | 4 | | officer under subsection (f) of Section 3-109 of this Code, and | 5 | | (3) a person appointed as an auxiliary police officer pursuant | 6 | | to Section 3.1-30-5 of the Illinois Municipal Code , and (4) a | 7 | | person who, on or after the effective date of this amendatory | 8 | | Act of the 100th General Assembly and before July 1, 2020, | 9 | | participates in the system under Article 16 of this Code as a | 10 | | substitute teacher, as defined under Section 16-106.3 . A person
| 11 | | forfeiting early retirement incentives under this subsection | 12 | | (i) must repay to
the Fund that portion of the retirement | 13 | | annuity already received which is
attributable to the early | 14 | | retirement incentives that are being forfeited, (ii)
shall not | 15 | | be eligible to participate in any future early retirement | 16 | | program
adopted under this Section, and (iii) is entitled to a | 17 | | refund of the employee
contribution paid under subsection (f). | 18 | | The Board shall deduct the required
repayment from the refund | 19 | | and may impose a reasonable payment schedule for
repaying the | 20 | | amount, if any, by which the required repayment exceeds the | 21 | | refund
amount.
| 22 | | (h) The additional unfunded liability accruing as a result | 23 | | of the adoption
of a program of early retirement incentives | 24 | | under this Section by an employer
shall be amortized over a | 25 | | period of 10 years beginning on January 1 of the
second | 26 | | calendar year following the calendar year in which the latest |
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| 1 | | date for
beginning to receive a retirement annuity under the | 2 | | program (as determined by
the employer under subsection (d) of | 3 | | this Section) occurs; except that the
employer may provide for | 4 | | a shorter amortization period (of no less than 5
years) by | 5 | | adopting an ordinance or resolution specifying the length of | 6 | | the
amortization period and submitting a certified copy of the | 7 | | ordinance or
resolution to the Fund no later than 6 months | 8 | | after the effective date of the
program. An employer, at its | 9 | | discretion, may accelerate payments to the Fund.
| 10 | | An employer may provide more than one early retirement | 11 | | incentive program
for its employees under this Section. | 12 | | However, an employer that has provided
an early retirement | 13 | | incentive program for its employees under this Section may
not | 14 | | provide another early retirement incentive program under this | 15 | | Section until the liability arising from the earlier program | 16 | | has been fully paid to
the Fund.
| 17 | | (Source: P.A. 99-382, eff. 8-17-15.)".
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