Full Text of SB1763 100th General Assembly
SB1763 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB1763 Introduced 2/9/2017, by Sen. William E. Brady - Neil Anderson - Tom Rooney - Sue Rezin, Paul Schimpf, et al. SYNOPSIS AS INTRODUCED: |
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Amends the General Assembly Article of the Illinois Pension Code. Requires active Tier 1 employees to elect either to (i) have automatic annual increases in retirement annuity and survivor's annuity delayed and reduced or (ii) maintain the current benefit package with additional limitations on pensionable salary. Provides that a Tier 1 employee who elects item (i) is entitled to have future increases in income treated as pensionable income, have contributions reduced to a specified rate, and receive a consideration payment of 10% of contributions made prior to the election. Provides that a Tier 1 employee who elects item (ii) is not eligible to have future increases in income treated as pensionable income. Makes funding changes and requires recertification of State contributions for fiscal years 2018 and 2019. Establishes a voluntary defined contribution plan for certain eligible Tier 1 participants and repeals provisions concerning the defined contribution plan added by Public Act 98-599, which has been held unconstitutional. Makes conforming changes in the Retirement Systems Reciprocal Act (Article 20 of the Code). Restricts participation in the System to persons who became participants before the effective date. Amends the State Pension Funds Continuing Appropriation Act to provide a continuing appropriation for the amounts of the consideration payments. Effective immediately.
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| | 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,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Pension Code is amended by changing | 5 | | Sections 2-101, 2-105, 2-107, 2-108, 2-119.1, 2-124, 2-126, | 6 | | 2-134, 2-162, 20-121, 20-123, 20-124, and 20-125 and by adding | 7 | | Sections 2-105.3, 2-107.9, 2-107.10, 2-110.3, 2-165.1, and | 8 | | 2-166.1 as follows: | 9 | | (40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
| 10 | | Sec. 2-101. Creation of system. A retirement system is | 11 | | created to provide
retirement annuities, survivor's annuities | 12 | | and other benefits for certain
members of the General Assembly, | 13 | | certain elected state officials , and their
beneficiaries.
| 14 | | The system shall be known as the "General Assembly | 15 | | Retirement System".
All its funds and property shall be a trust | 16 | | separate from all other
entities, maintained for the purpose of | 17 | | securing payment of annuities and
benefits under this Article.
| 18 | | Participation in the retirement system created under this | 19 | | Article is
restricted to persons who became participants before | 20 | | the effective date of this amendatory Act of the 100th General | 21 | | Assembly.
Beginning on that date, the System shall not accept | 22 | | any new participants.
| 23 | | (Source: P.A. 83-1440.)
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| 1 | | (40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
| 2 | | Sec. 2-105. Member. "Member": Members of the General | 3 | | Assembly of this
State , including persons who enter military | 4 | | service while a member of the
General Assembly , and any person | 5 | | serving as Governor, Lieutenant Governor,
Secretary of State, | 6 | | Treasurer, Comptroller, or Attorney General for the period
of | 7 | | service in such office.
| 8 | | Any person who has served for 10 or more years as Clerk or | 9 | | Assistant Clerk
of the House of Representatives, Secretary or | 10 | | Assistant Secretary of the
Senate, or any combination thereof, | 11 | | may elect to become a member
of this system while thenceforth | 12 | | engaged in such service by filing a
written election with the | 13 | | board. Any person so electing shall be
deemed an active member | 14 | | of the General Assembly for the purpose of validating
and | 15 | | transferring any service credits earned under any of the funds | 16 | | and systems
established under Articles 3 through 18 of this | 17 | | Code.
| 18 | | However, notwithstanding any other provision of this | 19 | | Article, a person
shall not be deemed a member for the purposes | 20 | | of this Article unless he or she
became a participant of the | 21 | | System before the effective date of this amendatory Act of the | 22 | | 100th General Assembly.
| 23 | | (Source: P.A. 85-1008.)
| 24 | | (40 ILCS 5/2-105.3 new) |
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| 1 | | Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A | 2 | | participant who first became a participant before January 1, | 3 | | 2011.
| 4 | | (40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
| 5 | | Sec. 2-107. Participant. "Participant": Any member who | 6 | | elects to
participate; and any former member who elects to | 7 | | continue participation
under Section 2-117.1, for the duration | 8 | | of such continued participation. However, notwithstanding any | 9 | | other provision of this Article, a person
shall not be deemed a | 10 | | participant for the purposes of this Article unless he or she
| 11 | | became a participant of the System before the effective date of | 12 | | this amendatory Act of the 100th General Assembly.
| 13 | | (Source: P.A. 86-1488.)
| 14 | | (40 ILCS 5/2-107.9 new) | 15 | | Sec. 2-107.9. Future increase in income. "Future increase | 16 | | in income" means an increase to a Tier 1 employee's base pay | 17 | | that is offered to the Tier 1 employee for service under this | 18 | | Article after June 30, 2018 that qualifies as "salary", as | 19 | | defined in Section 2-108, or would qualify as "salary" but for | 20 | | the fact that it was offered to and accepted by the Tier 1 | 21 | | employee under the condition set forth in subsection (c) of | 22 | | Section 2-110.3. | 23 | | (40 ILCS 5/2-107.10 new) |
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| 1 | | Sec. 2-107.10. Base pay. As used in Section 2-107.9 of | 2 | | this Code, "base pay" means the Tier 1 employee's annualized | 3 | | rate of salary as of June 30, 2018. For a person returning to | 4 | | active service as a Tier 1 employee after June 30, 2018, | 5 | | however, "base pay" means the employee's annualized rate of | 6 | | salary as of the employee's last date of service prior to July | 7 | | 1, 2018. The System shall calculate the base pay of each Tier 1 | 8 | | employee pursuant to this Section.
| 9 | | (40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
| 10 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 11 | | which has been
held unconstitutional)
| 12 | | Sec. 2-108. Salary. "Salary": | 13 | | (1) For members of the General Assembly,
the total | 14 | | compensation paid to the member by the State for one
year of | 15 | | service, including the additional amounts, if any, paid to
the | 16 | | member as an officer pursuant to Section 1 of "An Act
in | 17 | | relation to the compensation and emoluments of the members of | 18 | | the
General Assembly", approved December 6, 1907, as now or | 19 | | hereafter
amended.
| 20 | | (2) For the State executive officers specified
in Section | 21 | | 2-105, the total compensation paid to the member for one year
| 22 | | of service.
| 23 | | (3) For members of the System who are participants under | 24 | | Section
2-117.1, or who are serving as Clerk or Assistant Clerk | 25 | | of the House of
Representatives or Secretary or Assistant |
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| 1 | | Secretary of the Senate, the
total compensation paid to the | 2 | | member for one year of service, but not to
exceed the salary of | 3 | | the highest salaried officer of the General Assembly.
| 4 | | However, in the event that federal law results in any | 5 | | participant
receiving imputed income based on the value of | 6 | | group term life insurance
provided by the State, such imputed | 7 | | income shall not be included in salary
for the purposes of this | 8 | | Article.
| 9 | | Notwithstanding any other provision of this Section, | 10 | | "salary" does not include any future increase in income that is | 11 | | offered for service to a Tier 1 employee under this Article | 12 | | pursuant to the condition set forth in subsection (c) of | 13 | | Section 2-110.3 and accepted under that condition by a Tier 1 | 14 | | employee who has made the election under paragraph (2) of | 15 | | subsection (a) of Section 2-110.3. | 16 | | Notwithstanding any other provision of this Section, | 17 | | "salary" does not include any consideration payment made to a | 18 | | Tier 1 employee. | 19 | | (Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
| 20 | | (40 ILCS 5/2-110.3 new) | 21 | | Sec. 2-110.3. Election by Tier 1 employees. | 22 | | (a) Each active Tier 1 employee shall make an irrevocable | 23 | | election either: | 24 | | (1) to agree to delay his or her eligibility for | 25 | | automatic annual increases in retirement annuity as |
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| 1 | | provided in subsection (a-1) of Section 2-119.1 and to have | 2 | | the amount of the automatic annual increases in his or her | 3 | | retirement annuity and survivor's annuity that are | 4 | | otherwise provided for in this Article calculated, | 5 | | instead, as provided in subsection (a-1) of Section | 6 | | 2-119.1; or | 7 | | (2) to not agree to paragraph (1) of this subsection. | 8 | | The election required under this subsection (a) shall be | 9 | | made by each active Tier 1 employee no earlier than January 1, | 10 | | 2018 and no later than March 31, 2018, except that a person who | 11 | | returns to active service as a Tier 1 employee under this | 12 | | Article on or after January 1, 2018 and has not yet made an | 13 | | election under this Section must make the election under this | 14 | | subsection (a) within 60 days after returning to active service | 15 | | as a Tier 1 employee. | 16 | | If a Tier 1 employee fails for any reason to make a | 17 | | required election under this subsection within the time | 18 | | specified, then the employee shall be deemed to have made the | 19 | | election under paragraph (2) of this subsection. | 20 | | (a-5) If this Section is enjoined or stayed by an Illinois | 21 | | court or a court of competent jurisdiction pending the entry of | 22 | | a final and unappealable decision, and this Section is | 23 | | determined to be constitutional or otherwise valid by a final | 24 | | unappealable decision of an Illinois court or a court of | 25 | | competent jurisdiction, then the election procedure set forth | 26 | | in subsection (a) of this Section shall commence on the 180th |
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| 1 | | calendar day after the date of the issuance of the final | 2 | | unappealable decision and shall conclude at the end of the | 3 | | 270th calendar day after that date. | 4 | | (a-10) All elections under subsection (a) that are made or | 5 | | deemed to be made before July 1, 2018 shall take effect on July | 6 | | 1, 2018. Elections that are made or deemed to be made on or | 7 | | after July 1, 2018 shall take effect on the first day of the | 8 | | month following the month in which the election is made or | 9 | | deemed to be made. | 10 | | (b) As adequate and legal consideration provided under this | 11 | | amendatory Act of the 100th General Assembly for making an | 12 | | election under paragraph (1) of subsection (a) of this Section, | 13 | | the State of Illinois shall be expressly and irrevocably | 14 | | prohibited from offering any future increases in income to a | 15 | | Tier 1 employee who has made an election under paragraph (1) of | 16 | | subsection (a) of this Section on the condition of not | 17 | | constituting salary under Section 2-108. | 18 | | As adequate and legal consideration provided under this | 19 | | amendatory Act of the 100th General Assembly for making an | 20 | | election under paragraph (1) of subsection (a) of this Section, | 21 | | each Tier 1 employee who has made an election under paragraph | 22 | | (1) of subsection (a) of this Section shall receive a | 23 | | consideration payment equal to 10% of the contributions made by | 24 | | or on behalf of the employee under Section 2-126 before the | 25 | | effective date of that election. The State Comptroller shall | 26 | | pay the consideration payment to the Tier 1 employee out of |
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| 1 | | funds appropriated for that purpose under Section 1.9 of the | 2 | | State Pension Funds Continuing Appropriation Act. The System | 3 | | shall calculate the amount of each consideration payment and, | 4 | | by July 1, 2018, shall certify to the State Comptroller the | 5 | | amount of the consideration payment, together with the name, | 6 | | address, and any other available payment information of the | 7 | | Tier 1 employee as found in the records of the System. The | 8 | | System shall make additional calculations and certifications | 9 | | of consideration payments to the State Comptroller as the | 10 | | System deems necessary. | 11 | | (c) A Tier 1 employee who makes the election under | 12 | | paragraph (2) of subsection (a) of this Section shall not be | 13 | | subject to paragraph (1) of subsection (a) of this Section. | 14 | | However, each future increase in income offered for service as | 15 | | a member under this Article to a Tier 1 employee who has made | 16 | | the election under paragraph (2) of subsection (a) of this | 17 | | Section shall be offered expressly and irrevocably on the | 18 | | condition of not constituting salary under Section 2-108 and | 19 | | that the Tier 1 employee's acceptance of the offered future | 20 | | increase in income shall constitute his or her agreement to | 21 | | that condition. | 22 | | (d) The System shall make a good faith effort to contact | 23 | | each Tier 1 employee subject to this Section. The System shall | 24 | | mail information describing the required election to each Tier | 25 | | 1 employee by United States Postal Service mail to his or her | 26 | | last known address on file with the System. If the Tier 1 |
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| 1 | | employee is not responsive to other means of contact, it is | 2 | | sufficient for the System to publish the details of any | 3 | | required elections on its website or to publish those details | 4 | | in a regularly published newsletter or other existing public | 5 | | forum. | 6 | | Tier 1 employees who are subject to this Section shall be | 7 | | provided with an election packet containing information | 8 | | regarding their options, as well as the forms necessary to make | 9 | | the required election. Upon request, the System shall offer | 10 | | Tier 1 employees an opportunity to receive information from the | 11 | | System before making the required election. The information may | 12 | | be provided through video materials, group presentations, | 13 | | individual consultation with a member or authorized | 14 | | representative of the System in person or by telephone or other | 15 | | electronic means, or any combination of those methods. The | 16 | | System shall not provide advice or counseling with respect to | 17 | | which election a Tier 1 employee should make or specific to the | 18 | | legal or tax circumstances of or consequences to the Tier 1 | 19 | | employee. | 20 | | The System shall inform Tier 1 employees in the election | 21 | | packet required under this subsection that the Tier 1 employee | 22 | | may also wish to obtain information and counsel relating to the | 23 | | election required under this Section from any other available | 24 | | source, including, but not limited to, labor organizations and | 25 | | private counsel. | 26 | | In no event shall the System, its staff, or the Board be |
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| 1 | | held liable for any information given to a member regarding the | 2 | | elections under this Section. The System shall coordinate with | 3 | | the Illinois Department of Central Management Services and each | 4 | | other retirement system administering an election in | 5 | | accordance with this amendatory Act of the 100th General | 6 | | Assembly to provide information concerning the impact of the | 7 | | election set forth in this Section. | 8 | | (e) Notwithstanding any other provision of law, each future | 9 | | increase in income offered by the State of Illinois for service | 10 | | as a member must be offered expressly and irrevocably on the | 11 | | condition of not constituting "salary" under Section 2-108 to | 12 | | any Tier 1 employee who has made an election under paragraph | 13 | | (2) of subsection (a) of this Section. The offer shall also | 14 | | provide that the Tier 1 employee's acceptance of the offered | 15 | | future increase in income shall constitute his or her agreement | 16 | | to the condition set forth in this subsection. | 17 | | For purposes of legislative intent, the condition set forth | 18 | | in this subsection shall be construed in a manner that ensures | 19 | | that the condition is not violated or circumvented through any | 20 | | contrivance of any kind. | 21 | | (f) A member's election under this Section is not a | 22 | | prohibited election under subdivision (j)(1) of Section 1-119 | 23 | | of this Code. | 24 | | (g) No provision of this Section shall be interpreted in a | 25 | | way that would cause the System to cease to be a qualified plan | 26 | | under Section 401(a) of the Internal Revenue Code of 1986. The |
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| 1 | | provisions of this Section shall be subject to and implemented | 2 | | in a manner that complies with Section 11 of Article IV of the | 3 | | Illinois Constitution. | 4 | | (h) If an election created by this amendatory Act in any | 5 | | other Article of this Code or any change deriving from that | 6 | | election is determined to be unconstitutional or otherwise | 7 | | invalid by a final unappealable decision of an Illinois court | 8 | | or a court of competent jurisdiction, the invalidity of that | 9 | | provision shall not in any way affect the validity of this | 10 | | Section or the changes deriving from the election required | 11 | | under this Section.
| 12 | | (40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
| 13 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 14 | | which has been
held unconstitutional)
| 15 | | Sec. 2-119.1. Automatic increase in retirement annuity.
| 16 | | (a) Except as provided in subsection (a-1), a A participant | 17 | | who retires after June 30, 1967, and who has not
received an | 18 | | initial increase under this Section before the effective date
| 19 | | of this amendatory Act of 1991, shall, in January or July next | 20 | | following
the first anniversary of retirement, whichever | 21 | | occurs first, and in the same
month of each year thereafter, | 22 | | but in no event prior to age 60, have the amount
of the | 23 | | originally granted retirement annuity increased as follows: | 24 | | for each
year through 1971, 1 1/2%; for each year from 1972 | 25 | | through 1979, 2%; and for
1980 and each year thereafter, 3%. |
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| 1 | | Annuitants who have received an initial
increase under this | 2 | | subsection prior to the effective date of this amendatory
Act | 3 | | of 1991 shall continue to receive their annual increases in the | 4 | | same month
as the initial increase.
| 5 | | (a-1) Notwithstanding any other provision of this Article, | 6 | | for a Tier 1 employee who made the election under paragraph (1) | 7 | | of subsection (a) of Section 2-110.3: | 8 | | (1) The initial increase in retirement annuity under | 9 | | this Section shall occur on the January 1 occurring either | 10 | | on or after the attainment of age 67 or the fifth | 11 | | anniversary of the annuity start date, whichever is | 12 | | earlier. | 13 | | (2) The amount of each automatic annual increase in | 14 | | retirement annuity or survivor's annuity occurring on or | 15 | | after the effective date of that election shall be | 16 | | calculated as a percentage of the originally granted | 17 | | retirement annuity or survivor's annuity, equal to 3% or | 18 | | one-half the annual unadjusted percentage increase (but | 19 | | not less than zero) in the consumer price index-u for the | 20 | | 12 months ending with the September preceding each November | 21 | | 1, whichever is less. If the annual unadjusted percentage | 22 | | change in the consumer price index-u for the 12 months | 23 | | ending with the September preceding each November 1 is zero | 24 | | or there is a decrease, then the annuity shall not be | 25 | | increased. | 26 | | For the purposes of this Section, "consumer price index-u" |
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| 1 | | means
the index published by the Bureau of Labor Statistics of | 2 | | the United States
Department of Labor that measures the average | 3 | | change in prices of goods and
services purchased by all urban | 4 | | consumers, United States city average, all
items, 1982-84 = | 5 | | 100. The new amount resulting from each annual adjustment
shall | 6 | | be determined by the Public Pension Division of the Department | 7 | | of Insurance and made available to the board of the retirement | 8 | | system by November 1 of each year. | 9 | | (b) Beginning January 1, 1990, for eligible participants | 10 | | who remain
in service after attaining 20 years of creditable | 11 | | service, the 3% increases
provided under subsection (a) shall | 12 | | begin to accrue on the January 1 next
following the date upon | 13 | | which the participant (1) attains age 55, or (2)
attains 20 | 14 | | years of creditable service, whichever occurs later, and shall
| 15 | | continue to accrue while the participant remains in service; | 16 | | such increases
shall become payable on January 1 or July 1, | 17 | | whichever occurs first, next
following the first anniversary of | 18 | | retirement. For any person who has service
credit in the System | 19 | | for the entire period from January 15, 1969 through
December | 20 | | 31, 1992, regardless of the date of termination of service, the
| 21 | | reference to age 55 in clause (1) of this subsection (b) shall | 22 | | be deemed to
mean age 50.
| 23 | | This subsection (b) does not apply to any person who first | 24 | | becomes a
member of the System after August 8, 2003 ( the | 25 | | effective date of Public Act 93-494) this amendatory Act of
the | 26 | | 93rd General Assembly .
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| 1 | | (b-5) Notwithstanding any other provision of this Article, | 2 | | a participant who first becomes a participant on or after | 3 | | January 1, 2011 (the effective date of Public Act 96-889) | 4 | | shall, in January or July next following the first anniversary | 5 | | of retirement, whichever occurs first, and in the same month of | 6 | | each year thereafter, but in no event prior to age 67, have the | 7 | | amount of the retirement annuity then being paid increased by | 8 | | 3% or the annual unadjusted percentage increase in the Consumer | 9 | | Price Index for All Urban Consumers as determined by the Public | 10 | | Pension Division of the Department of Insurance under | 11 | | subsection (a) of Section 2-108.1, whichever is less. | 12 | | (c) The foregoing provisions relating to automatic | 13 | | increases are not
applicable to a participant who retires | 14 | | before having made contributions
(at the rate prescribed in | 15 | | Section 2-126) for automatic increases for less
than the | 16 | | equivalent of one full year. However, in order to be eligible | 17 | | for
the automatic increases, such a participant may make | 18 | | arrangements to pay
to the system the amount required to bring | 19 | | the total contributions for the
automatic increase to the | 20 | | equivalent of one year's contributions based upon
his or her | 21 | | last salary.
| 22 | | (d) A participant who terminated service prior to July 1, | 23 | | 1967, with at
least 14 years of service is entitled to an | 24 | | increase in retirement annuity
beginning January, 1976, and to | 25 | | additional increases in January of each
year thereafter.
| 26 | | The initial increase shall be 1 1/2% of the originally |
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| 1 | | granted retirement
annuity multiplied by the number of full | 2 | | years that the annuitant was in
receipt of such annuity prior | 3 | | to January 1, 1972, plus 2% of the originally
granted | 4 | | retirement annuity for each year after that date. The | 5 | | subsequent
annual increases shall be at the rate of 2% of the | 6 | | originally granted
retirement annuity for each year through | 7 | | 1979 and at the rate of 3% for
1980 and thereafter.
| 8 | | (e) Beginning January 1, 1990, and except as provided in | 9 | | subsection (a-1), all automatic annual increases payable
under | 10 | | this Section shall be calculated as a percentage of the total | 11 | | annuity
payable at the time of the increase, including previous | 12 | | increases granted
under this Article.
| 13 | | (Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
| 14 | | (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
| 15 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 16 | | which has been
held unconstitutional)
| 17 | | Sec. 2-124. Contributions by State.
| 18 | | (a) The State shall make contributions to the System by
| 19 | | appropriations of amounts which, together with the | 20 | | contributions of
participants, interest earned on investments, | 21 | | and other income
will meet the cost of maintaining and | 22 | | administering the System on a 90%
funded basis in accordance | 23 | | with actuarial recommendations.
| 24 | | (b) The Board shall determine the amount of State
| 25 | | contributions required for each fiscal year on the basis of the
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| 1 | | actuarial tables and other assumptions adopted by the Board and | 2 | | the
prescribed rate of interest, using the formula in | 3 | | subsection (c).
| 4 | | (c) For State fiscal years 2018 through 2045 (except as | 5 | | otherwise provided for fiscal year 2019), the minimum | 6 | | contribution to the System to be made by the State for each | 7 | | fiscal year shall be an amount determined by the System to be | 8 | | sufficient to bring the total assets of the System up to 90% of | 9 | | the total actuarial liabilities of the System by the end of | 10 | | State fiscal year 2045. In making these determinations, the | 11 | | required State contribution shall be calculated each year as a | 12 | | level percentage of total payroll, including payroll that is | 13 | | not deemed pensionable, but excluding payroll attributable to | 14 | | participants in the defined contribution plan under Section | 15 | | 2-165.1, over the years remaining to and including fiscal year | 16 | | 2045 and shall be determined under the projected unit credit | 17 | | actuarial cost method. | 18 | | For State fiscal year 2019: | 19 | | (1) The initial calculation and certification shall be | 20 | | based on the amount determined above. | 21 | | (2) For purposes of the recertification due on or | 22 | | before May 1, 2018, the recalculation of the required State | 23 | | contribution for fiscal year 2019 shall take into account | 24 | | the effect on the System's liabilities of the elections | 25 | | made under Section 2-110.3. | 26 | | (3) For purposes of the recertification due on or |
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| 1 | | before October 1, 2018, the total required State | 2 | | contribution for fiscal year 2019 shall be reduced by the | 3 | | amount of the consideration payments made to Tier 1 | 4 | | employees who made the election under paragraph (1) of | 5 | | subsection (a) of Section 2-110.3. | 6 | | Beginning in State fiscal year 2018, any increase or | 7 | | decrease in State contribution over the prior fiscal year due | 8 | | exclusively to changes in actuarial or investment assumptions | 9 | | adopted by the Board shall be included in the State | 10 | | contribution to the System, as a percentage of the applicable | 11 | | employee payroll, and shall be increased in equal annual | 12 | | increments so that by the State fiscal year occurring 5 years | 13 | | after the adoption of the actuarial or investment assumptions, | 14 | | the State is contributing at the rate otherwise required under | 15 | | this Section. | 16 | | If Section 2-110.3 is determined to be unconstitutional or | 17 | | otherwise invalid by a final unappealable decision of an | 18 | | Illinois court
or a court of competent jurisdiction, then the | 19 | | changes made to this Section by this amendatory Act of the | 20 | | 100th General Assembly shall not take effect and are repealed | 21 | | by operation of law. | 22 | | For State fiscal years 2012 through 2017 2045 , the minimum | 23 | | contribution
to the System to be made by the State for each | 24 | | fiscal year shall be an amount
determined by the System to be | 25 | | sufficient to bring the total assets of the
System up to 90% of | 26 | | the total actuarial liabilities of the System by the end of
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| 1 | | State fiscal year 2045. In making these determinations, the | 2 | | required State
contribution shall be calculated each year as a | 3 | | level percentage of payroll
over the years remaining to and | 4 | | including fiscal year 2045 and shall be
determined under the | 5 | | projected unit credit actuarial cost method.
| 6 | | For State fiscal years 1996 through 2005, the State | 7 | | contribution to
the System, as a percentage of the applicable | 8 | | employee payroll, shall be
increased in equal annual increments | 9 | | so that by State fiscal year 2011, the
State is contributing at | 10 | | the rate required under this Section.
| 11 | | Notwithstanding any other provision of this Article, the | 12 | | total required State
contribution for State fiscal year 2006 is | 13 | | $4,157,000.
| 14 | | Notwithstanding any other provision of this Article, the | 15 | | total 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 | 18 | | contribution to
the System, as a percentage of the applicable | 19 | | employee payroll, shall be
increased in equal annual increments | 20 | | from the required State contribution for State fiscal year | 21 | | 2007, so that by State fiscal year 2011, the
State is | 22 | | contributing at the rate otherwise required under this Section.
| 23 | | Notwithstanding any other provision of this Article, the | 24 | | total required State contribution for State fiscal year 2010 is | 25 | | $10,454,000 and shall be made from the proceeds of bonds sold | 26 | | in fiscal year 2010 pursuant to Section 7.2 of the General |
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| 1 | | Obligation Bond Act, less (i) the pro rata share of bond sale | 2 | | expenses determined by the System's share of total bond | 3 | | proceeds, (ii) any amounts received from the General Revenue | 4 | | Fund in fiscal year 2010, and (iii) any reduction in bond | 5 | | proceeds due to the issuance of discounted bonds, if | 6 | | applicable. | 7 | | Notwithstanding any other provision of this Article, the
| 8 | | total required State contribution for State fiscal year 2011 is
| 9 | | the amount recertified by the System on or before April 1, 2011 | 10 | | pursuant to Section 2-134 and shall be made from the proceeds | 11 | | of bonds sold
in fiscal year 2011 pursuant to Section 7.2 of | 12 | | the General
Obligation Bond Act, less (i) the pro rata share of | 13 | | bond sale
expenses determined by the System's share of total | 14 | | bond
proceeds, (ii) any amounts received from the General | 15 | | Revenue
Fund in fiscal year 2011, and (iii) any reduction in | 16 | | bond
proceeds due to the issuance of discounted bonds, if
| 17 | | applicable. | 18 | | Beginning in State fiscal year 2046, the minimum State | 19 | | contribution for
each fiscal year shall be the amount needed to | 20 | | maintain the total assets of
the System at 90% of the total | 21 | | actuarial liabilities of the System.
| 22 | | Amounts received by the System pursuant to Section 25 of | 23 | | the Budget Stabilization Act or Section 8.12 of the State | 24 | | Finance Act in any fiscal year do not reduce and do not | 25 | | constitute payment of any portion of the minimum State | 26 | | contribution required under this Article in that fiscal year. |
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| 1 | | Such amounts shall not reduce, and shall not be included in the | 2 | | calculation of, the required State contributions under this | 3 | | Article in any future year until the System has reached a | 4 | | funding ratio of at least 90%. A reference in this Article to | 5 | | the "required State contribution" or any substantially similar | 6 | | term does not include or apply to any amounts payable to the | 7 | | System under Section 25 of the Budget Stabilization Act.
| 8 | | Notwithstanding any other provision of this Section, the | 9 | | required State
contribution for State fiscal year 2005 and for | 10 | | fiscal year 2008 and each fiscal year thereafter, as
calculated | 11 | | under this Section and
certified under Section 2-134, shall not | 12 | | exceed an amount equal to (i) the
amount of the required State | 13 | | contribution that would have been calculated under
this Section | 14 | | for that fiscal year if the System had not received any | 15 | | payments
under subsection (d) of Section 7.2 of the General | 16 | | Obligation Bond Act, minus
(ii) the portion of the State's | 17 | | total debt service payments for that fiscal
year on the bonds | 18 | | issued in fiscal year 2003 for the purposes of that Section | 19 | | 7.2, as determined
and certified by the Comptroller, that is | 20 | | the same as the System's portion of
the total moneys | 21 | | distributed under subsection (d) of Section 7.2 of the General
| 22 | | Obligation Bond Act. In determining this maximum for State | 23 | | fiscal years 2008 through 2010, however, the amount referred to | 24 | | in item (i) shall be increased, as a percentage of the | 25 | | applicable employee payroll, in equal increments calculated | 26 | | from the sum of the required State contribution for State |
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| 1 | | fiscal year 2007 plus the applicable portion of the State's | 2 | | total debt service payments for fiscal year 2007 on the bonds | 3 | | issued in fiscal year 2003 for the purposes of Section 7.2 of | 4 | | the General
Obligation Bond Act, so that, by State fiscal year | 5 | | 2011, the
State is contributing at the rate otherwise required | 6 | | under this Section.
| 7 | | (d) For purposes of determining the required State | 8 | | contribution to the System, the value of the System's assets | 9 | | shall be equal to the actuarial value of the System's assets, | 10 | | which shall be calculated as follows: | 11 | | As of June 30, 2008, the actuarial value of the System's | 12 | | assets shall be equal to the market value of the assets as of | 13 | | that date. In determining the actuarial value of the System's | 14 | | assets for fiscal years after June 30, 2008, any actuarial | 15 | | gains or losses from investment return incurred in a fiscal | 16 | | year shall be recognized in equal annual amounts over the | 17 | | 5-year period following that fiscal year. | 18 | | (e) For purposes of determining the required State | 19 | | contribution to the system for a particular year, the actuarial | 20 | | value of assets shall be assumed to earn a rate of return equal | 21 | | to the system's actuarially assumed rate of return. | 22 | | (Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; | 23 | | 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff. | 24 | | 7-13-12.)
| 25 | | (40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)
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| 1 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 2 | | which has been
held unconstitutional)
| 3 | | Sec. 2-126. Contributions by participants.
| 4 | | (a) Each participant shall contribute toward the cost of | 5 | | his or her
retirement annuity a percentage of each payment of | 6 | | salary received by him or
her for service as a member as | 7 | | follows: for service between October 31, 1947
and January 1, | 8 | | 1959, 5%; for service between January 1, 1959 and June 30, | 9 | | 1969,
6%; for service between July 1, 1969 and January 10, | 10 | | 1973, 6 1/2%; for service
after January 10, 1973, 7%; for | 11 | | service after December 31, 1981, 8 1/2%.
| 12 | | (b) Beginning August 2, 1949, each male participant, and | 13 | | from July 1,
1971, each female participant shall contribute | 14 | | towards the cost of the
survivor's annuity 2% of salary.
| 15 | | A participant who has no eligible survivor's annuity | 16 | | beneficiary may elect
to cease making contributions for | 17 | | survivor's annuity under this subsection.
A survivor's annuity | 18 | | shall not be payable upon the death of a person who has
made | 19 | | this election, unless prior to that death the election has been | 20 | | revoked
and the amount of the contributions that would have | 21 | | been paid under this
subsection in the absence of the election | 22 | | is paid to the System, together
with interest at the rate of 4% | 23 | | per year from the date the contributions
would have been made | 24 | | to the date of payment.
| 25 | | (c) Beginning July 1, 1967, each participant shall | 26 | | contribute 1% of
salary towards the cost of automatic increase |
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| 1 | | in annuity provided in
Section 2-119.1. These contributions | 2 | | shall be made concurrently with
contributions for retirement | 3 | | annuity purposes.
| 4 | | (d) In addition, each participant serving as an officer of | 5 | | the General
Assembly shall contribute, for the same purposes | 6 | | and at the same rates
as are required of a regular participant, | 7 | | on each additional payment
received as an officer. If the | 8 | | participant serves as an
officer for at least 2 but less than 4 | 9 | | years, he or she shall
contribute an amount equal to the amount | 10 | | that would have been contributed
had the participant served as | 11 | | an officer for 4 years. Persons who serve
as officers in the | 12 | | 87th General Assembly but cannot receive the additional
payment | 13 | | to officers because of the ban on increases in salary during | 14 | | their
terms may nonetheless make contributions based on those | 15 | | additional payments
for the purpose of having the additional | 16 | | payments included in their highest
salary for annuity purposes; | 17 | | however, persons electing to make these
additional | 18 | | contributions must also pay an amount representing the
| 19 | | corresponding employer contributions, as calculated by the | 20 | | System.
| 21 | | (e) Notwithstanding any other provision of this Article, | 22 | | the required contribution of a participant who first becomes a | 23 | | participant on or after January 1, 2011 shall not exceed the | 24 | | contribution that would be due under this Article if that | 25 | | participant's highest salary for annuity purposes were | 26 | | $106,800, plus any increases in that amount under Section |
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| 1 | | 2-108.1. | 2 | | (f) Beginning July 1, 2018 or the effective date of the | 3 | | Tier 1 employee's election under paragraph (1) of subsection | 4 | | (a) of Section 2-110.3, whichever is later, in lieu of the | 5 | | contributions otherwise required under this Section, each Tier | 6 | | 1 employee who made the election under paragraph (1) of | 7 | | subsection (a) of Section 2-110.3 shall contribute 8.5% of each | 8 | | payment of salary toward the cost of his or her retirement | 9 | | annuity and 1.85% of each payment of salary toward the cost of | 10 | | the survivor's annuity. | 11 | | (g) Notwithstanding subsection (f) of this Section, | 12 | | beginning July 1, 2018 or the effective date of the Tier 1 | 13 | | employee's election under paragraph (1) of subsection (a) of | 14 | | Section 2-110.3, whichever is later, in lieu of the | 15 | | contributions otherwise required under this Section, each Tier | 16 | | 1 employee who made the election under paragraph (1) of | 17 | | subsection (a) of Section 2-110.3 and has elected to cease | 18 | | making contributions for survivor's annuity under subsection | 19 | | (b) of this Section, shall contribute 8.55% of each payment of | 20 | | salary toward the cost of his or her retirement annuity. | 21 | | (Source: P.A. 96-1490, eff. 1-1-11.)
| 22 | | (40 ILCS 5/2-134)
(from Ch. 108 1/2, par. 2-134)
| 23 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 24 | | which has been
held unconstitutional)
| 25 | | Sec. 2-134. To certify required State contributions and |
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| 1 | | submit vouchers.
| 2 | | (a) The Board shall certify to the Governor on or before | 3 | | December 15 of each
year until December 15, 2011 the amount of | 4 | | the required State contribution to the System for the next
| 5 | | fiscal year and shall specifically identify the System's | 6 | | projected State normal cost for that fiscal year. The | 7 | | certification shall include a copy of the actuarial
| 8 | | recommendations upon which it is based and shall specifically | 9 | | identify the System's projected State normal cost for that | 10 | | fiscal year.
| 11 | | On or before November 1 of each year, beginning November 1, | 12 | | 2012, the Board shall submit to the State Actuary, the | 13 | | Governor, and the General Assembly a proposed certification of | 14 | | the amount of the required State contribution to the System for | 15 | | the next fiscal year, along with all of the actuarial | 16 | | assumptions, calculations, and data upon which that proposed | 17 | | certification is based. On or before January 1 of each year | 18 | | beginning January 1, 2013, the State Actuary shall issue a | 19 | | preliminary report concerning the proposed certification and | 20 | | identifying, if necessary, recommended changes in actuarial | 21 | | assumptions that the Board must consider before finalizing its | 22 | | certification of the required State contributions. On or before | 23 | | January 15, 2013 and every January 15 thereafter, the Board | 24 | | shall certify to the Governor and the General Assembly the | 25 | | amount of the required State contribution for the next fiscal | 26 | | year. The Board's certification must note any deviations from |
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| 1 | | the State Actuary's recommended changes, the reason or reasons | 2 | | for not following the State Actuary's recommended changes, and | 3 | | the fiscal impact of not following the State Actuary's | 4 | | recommended changes on the required State contribution. | 5 | | On or before May 1, 2004, the Board shall recalculate and | 6 | | recertify to
the Governor the amount of the required State | 7 | | contribution to the System for
State fiscal year 2005, taking | 8 | | into account the amounts appropriated to and
received by the | 9 | | System under subsection (d) of Section 7.2 of the General
| 10 | | Obligation Bond Act.
| 11 | | On or before July 1, 2005, the Board shall recalculate and | 12 | | recertify
to the Governor the amount of the required State
| 13 | | contribution to the System for State fiscal year 2006, taking | 14 | | into account the changes in required State contributions made | 15 | | by this amendatory Act of the 94th General Assembly.
| 16 | | On or before April 1, 2011, the Board shall recalculate and | 17 | | recertify to the Governor the amount of the required State | 18 | | contribution to the System for State fiscal year 2011, applying | 19 | | the changes made by Public Act 96-889 to the System's assets | 20 | | and liabilities as of June 30, 2009 as though Public Act 96-889 | 21 | | was approved on that date. | 22 | | As soon as practical after the effective date of this | 23 | | amendatory Act of the 100th General Assembly, the State Actuary | 24 | | and the Board shall recalculate and recertify to the Governor | 25 | | and the General Assembly the amount of the State contribution | 26 | | to the System for State fiscal year 2018, taking into account |
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| 1 | | the changes in required State contributions made by this | 2 | | amendatory Act of the 100th General Assembly. | 3 | | On or before May 1, 2018, the Board shall recalculate and | 4 | | recertify
to the Governor and the General Assembly the amount | 5 | | of the required State
contribution to the System for State | 6 | | fiscal year 2019, taking into account the effect on the | 7 | | System's liabilities of the elections made under Section | 8 | | 2-110.3. | 9 | | On or before October 1, 2018, the Board shall recalculate | 10 | | and recertify to the Governor and the General Assembly the | 11 | | amount of the required State contribution to the System for | 12 | | State fiscal year 2019, taking into account the reduction | 13 | | specified under item (3) of subsection (c) of Section 2-124. | 14 | | (b) Beginning in State fiscal year 1996, on or as soon as | 15 | | possible after the
15th day of each month the Board shall | 16 | | submit vouchers for payment of State
contributions to the | 17 | | System, in a total monthly amount of one-twelfth of the
| 18 | | required annual State contribution certified under subsection | 19 | | (a).
From the effective date of this amendatory Act
of the 93rd | 20 | | General Assembly through June 30, 2004, the Board shall not
| 21 | | submit vouchers for the remainder of fiscal year 2004 in excess | 22 | | of the
fiscal year 2004 certified contribution amount | 23 | | determined
under this Section after taking into consideration | 24 | | the transfer to the
System under subsection (d) of Section | 25 | | 6z-61 of the State Finance Act.
These
vouchers shall be paid by | 26 | | the State Comptroller and Treasurer by warrants drawn
on the |
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| 1 | | funds appropriated to the System for that fiscal year. If in | 2 | | any month
the amount remaining unexpended from all other | 3 | | appropriations to the System for
the applicable fiscal year | 4 | | (including the appropriations to the System under
Section 8.12 | 5 | | of the State Finance Act and Section 1 of the State Pension | 6 | | Funds
Continuing Appropriation Act) is less than the amount | 7 | | lawfully vouchered under
this Section, the difference shall be | 8 | | paid from the General Revenue Fund under
the continuing | 9 | | appropriation authority provided in Section 1.1 of the State
| 10 | | Pension Funds Continuing Appropriation Act.
| 11 | | (c) The full amount of any annual appropriation for the | 12 | | System for
State fiscal year 1995 shall be transferred and made | 13 | | available to the System
at the beginning of that fiscal year at | 14 | | the request of the Board.
Any excess funds remaining at the end | 15 | | of any fiscal year from appropriations
shall be retained by the | 16 | | System as a general reserve to meet the System's
accrued | 17 | | liabilities.
| 18 | | (Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; | 19 | | 97-694, eff. 6-18-12.)
| 20 | | (40 ILCS 5/2-162) | 21 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 22 | | which has been
held unconstitutional)
| 23 | | Sec. 2-162. Application and expiration of new benefit | 24 | | increases. | 25 | | (a) As used in this Section, "new benefit increase" means |
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| 1 | | an increase in the amount of any benefit provided under this | 2 | | Article, or an expansion of the conditions of eligibility for | 3 | | any benefit under this Article, that results from an amendment | 4 | | to this Code that takes effect after the effective date of this | 5 | | amendatory Act of the 94th General Assembly. "New benefit | 6 | | increase", however, does not include any benefit increase | 7 | | resulting from the changes made to this Article by this | 8 | | amendatory Act of the 100th General Assembly. | 9 | | (b) Notwithstanding any other provision of this Code or any | 10 | | subsequent amendment to this Code, every new benefit increase | 11 | | is subject to this Section and shall be deemed to be granted | 12 | | only in conformance with and contingent upon compliance with | 13 | | the provisions of this Section.
| 14 | | (c) The Public Act enacting a new benefit increase must | 15 | | identify and provide for payment to the System of additional | 16 | | funding at least sufficient to fund the resulting annual | 17 | | increase in cost to the System as it accrues. | 18 | | Every new benefit increase is contingent upon the General | 19 | | Assembly providing the additional funding required under this | 20 | | subsection. The Commission on Government Forecasting and | 21 | | Accountability shall analyze whether adequate additional | 22 | | funding has been provided for the new benefit increase and | 23 | | shall report its analysis to the Public Pension Division of the | 24 | | Department of Insurance Financial and Professional Regulation . | 25 | | A new benefit increase created by a Public Act that does not | 26 | | include the additional funding required under this subsection |
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| 1 | | is null and void. If the Public Pension Division determines | 2 | | that the additional funding provided for a new benefit increase | 3 | | under this subsection is or has become inadequate, it may so | 4 | | certify to the Governor and the State Comptroller and, in the | 5 | | absence of corrective action by the General Assembly, the new | 6 | | benefit increase shall expire at the end of the fiscal year in | 7 | | which the certification is made.
| 8 | | (d) Every new benefit increase shall expire 5 years after | 9 | | its effective date or on such earlier date as may be specified | 10 | | in the language enacting the new benefit increase or provided | 11 | | under subsection (c). This does not prevent the General | 12 | | Assembly from extending or re-creating a new benefit increase | 13 | | by law. | 14 | | (e) Except as otherwise provided in the language creating | 15 | | the new benefit increase, a new benefit increase that expires | 16 | | under this Section continues to apply to persons who applied | 17 | | and qualified for the affected benefit while the new benefit | 18 | | increase was in effect and to the affected beneficiaries and | 19 | | alternate payees of such persons, but does not apply to any | 20 | | other person, including without limitation a person who | 21 | | continues in service after the expiration date and did not | 22 | | apply and qualify for the affected benefit while the new | 23 | | benefit increase was in effect.
| 24 | | (Source: P.A. 94-4, eff. 6-1-05.) | 25 | | (40 ILCS 5/2-165.1 new) |
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| 1 | | Sec. 2-165.1. Defined contribution plan. | 2 | | (a) By July 1, 2018, the System shall prepare and implement | 3 | | a voluntary defined contribution plan for up to 5% of eligible | 4 | | active Tier 1 employees. The System shall determine the 5% cap | 5 | | by the number of active Tier 1 employees on the effective date | 6 | | of this Section. The defined contribution plan developed under | 7 | | this Section shall be a plan that aggregates employer and | 8 | | employee contributions in individual participant accounts | 9 | | which, after meeting any other requirements, are used for | 10 | | payouts after retirement in accordance with this Section and | 11 | | any other applicable laws. | 12 | | As used in this Section, "defined benefit plan" means the | 13 | | retirement plan available under this Article to Tier 1 | 14 | | employees who have not made the election authorized under this | 15 | | Section. | 16 | | (1) Under the defined contribution plan, an active
Tier | 17 | | 1 employee of this System could elect to cease accruing | 18 | | benefits in the defined benefit plan under this Article and | 19 | | begin accruing benefits for future service in the defined | 20 | | contribution plan. Service credit under the defined | 21 | | contribution plan may be used for determining retirement | 22 | | eligibility under the defined benefit plan. | 23 | | (2) Participants in the defined contribution plan
| 24 | | shall pay employee contributions at the same rate as Tier 1 | 25 | | employees in this System who do not participate in the | 26 | | defined contribution plan. |
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| 1 | | (3) State contributions shall be paid into the
accounts | 2 | | of all participants in the defined contribution plan at a | 3 | | uniform rate, expressed as a percentage of compensation and | 4 | | determined for each year. This rate shall be no higher than | 5 | | the employer's normal cost for Tier 1 employees in the | 6 | | defined benefit plan for that year, as determined by the | 7 | | System and expressed as a percentage of compensation, and | 8 | | shall be no lower than 3% of compensation. The State shall | 9 | | adjust this rate annually. | 10 | | (4) The defined contribution plan shall require 5
years | 11 | | of participation in the defined contribution plan before | 12 | | vesting in State contributions. If the participant fails to | 13 | | vest in them, the State contributions, and the earnings | 14 | | thereon, shall be forfeited. | 15 | | (5) The defined contribution plan may provide for
| 16 | | participants in the plan to be eligible for defined | 17 | | disability benefits. If it does, the System shall reduce | 18 | | the employee contributions credited to the participant's | 19 | | defined contribution plan account by an amount determined | 20 | | by the System to cover the cost of offering such benefits. | 21 | | (6) The defined contribution plan shall provide a
| 22 | | variety of options for investments. These options shall | 23 | | include investments handled by the Illinois State Board of | 24 | | Investment as well as private sector investment options. | 25 | | (7) The defined contribution plan shall provide a
| 26 | | variety of options for payouts to retirees and their |
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| 1 | | survivors. | 2 | | (8) To the extent authorized under federal law and
as | 3 | | authorized by the System, the plan shall allow former | 4 | | participants in the plan to transfer or roll over employee | 5 | | and vested State contributions, and the earnings thereon, | 6 | | into other qualified retirement plans. | 7 | | (9) The System shall reduce the employee
contributions | 8 | | credited to the participant's defined contribution plan | 9 | | account by an amount determined by the System to cover the | 10 | | cost of offering these benefits and any applicable | 11 | | administrative fees. | 12 | | (b) Only persons who are active Tier 1 employees of the | 13 | | System on the effective date of this Section are eligible to | 14 | | participate in the defined contribution plan. Participation in | 15 | | the defined contribution plan shall be limited to the first 5% | 16 | | of eligible persons who elect to participate. The election to | 17 | | participate in the defined contribution plan is voluntary and | 18 | | irrevocable. | 19 | | (c) An eligible active Tier 1 employee may irrevocably | 20 | | elect to participate in the defined contribution plan by filing | 21 | | with the System a written application to participate that is | 22 | | received by the System prior to its determination that 5% of | 23 | | eligible persons have elected to participate in the defined | 24 | | contribution plan. | 25 | | When the System first determines that 5% of eligible | 26 | | persons have elected to participate in the defined contribution |
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| 1 | | plan, the System shall provide notice to previously eligible | 2 | | employees that the plan is no longer available and shall cease | 3 | | accepting applications to participate. | 4 | | (d) The System shall make a good faith effort to contact | 5 | | each active Tier 1 employee who is eligible to participate in | 6 | | the defined contribution plan. The System shall mail | 7 | | information describing the option to join the defined | 8 | | contribution plan to each of these employees to his or her last | 9 | | known address on file with the System. If the employee is not | 10 | | responsive to other means of contact, it is sufficient for the | 11 | | System to publish the details of the option on its website. | 12 | | Upon request for further information describing the | 13 | | option, the System shall provide employees with information | 14 | | from the System before exercising the option to join the plan, | 15 | | including information on the impact to their vested benefits or | 16 | | non-vested service. The individual consultation shall include | 17 | | projections of the participant's defined benefits at | 18 | | retirement or earlier termination of service and the value of | 19 | | the participant's account at retirement or earlier termination | 20 | | of service. The System shall not provide advice or counseling | 21 | | with respect to whether the employee should exercise the | 22 | | option. The System shall inform Tier 1 employees who are | 23 | | eligible to participate in the defined contribution plan that | 24 | | they may also wish to obtain information and counsel relating | 25 | | to their option from any other available source, including but | 26 | | not limited to labor organizations, private counsel, and |
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| 1 | | financial advisors. | 2 | | (e) In no event shall the System, its staff, its authorized | 3 | | representatives, or the Board be liable for any information | 4 | | given to an employee under this Section. The System may | 5 | | coordinate with the Illinois Department of Central Management | 6 | | Services and other retirement systems administering a defined | 7 | | contribution plan in accordance with this amendatory Act of the | 8 | | 100th General Assembly to provide information concerning the | 9 | | impact of the option set forth in this Section. | 10 | | (f) Notwithstanding any other provision of this Section, no | 11 | | person shall begin participating in the defined contribution | 12 | | plan until it has attained qualified plan status and received | 13 | | all necessary approvals from the U.S. Internal Revenue Service. | 14 | | (g) The System shall report on its progress under this | 15 | | Section, including the available details of the defined | 16 | | contribution plan and the System's plans for informing eligible | 17 | | Tier 1 employees about the plan, to the Governor and the | 18 | | General Assembly on or before January 15, 2018. | 19 | | (h) The Illinois State Board of Investments shall be the | 20 | | plan sponsor for the defined contribution plan established | 21 | | under this Section. | 22 | | (i) The intent of this amendatory Act of the 100th General | 23 | | Assembly is to ensure that the State's normal cost of | 24 | | participation in the defined contribution plan is similar, and | 25 | | if possible equal, to the State's normal cost of participation | 26 | | in the defined benefit plan, unless a lower State's normal cost |
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| 1 | | is necessary to ensure cost neutrality. | 2 | | (j) If Section 2-110.3 is determined to be unconstitutional | 3 | | or otherwise invalid by a final unappealable decision of an | 4 | | Illinois court
or a court of competent jurisdiction, then this | 5 | | Section shall not take effect and is repealed by operation of | 6 | | law. | 7 | | (40 ILCS 5/2-166.1 new) | 8 | | Sec. 2-166.1. Defined contribution plan; termination. If | 9 | | the defined contribution plan is terminated or becomes | 10 | | inoperative pursuant to law, then each participant in the plan | 11 | | shall automatically be deemed to have been a contributing Tier | 12 | | 1 employee in the System's defined benefit plan during the time | 13 | | in which he or she participated in the defined contribution | 14 | | plan, and for that purpose the System shall be entitled to | 15 | | recover the amounts in the participant's defined contribution | 16 | | accounts.
| 17 | | (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
| 18 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 19 | | which has been held unconstitutional)
| 20 | | Sec. 20-121. Calculation of proportional retirement | 21 | | annuities. | 22 | | (a) Upon
retirement of the employee, a proportional | 23 | | retirement annuity shall be computed
by each participating | 24 | | system in which pension credit has been established on
the |
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| 1 | | basis of pension credits under each system. The computation | 2 | | shall be in
accordance with the formula or method prescribed by | 3 | | each participating system
which is in effect at the date of the | 4 | | employee's latest withdrawal from service
covered by any of the | 5 | | systems in which he has pension credits which he elects
to have | 6 | | considered under this Article. However, the amount of any | 7 | | retirement
annuity payable under the self-managed plan | 8 | | established under Section 15-158.2
of this Code or under the | 9 | | defined contribution plan established under Article 2 of this | 10 | | Code depends solely on the value of the participant's vested | 11 | | account
balances and is not subject to any proportional | 12 | | adjustment under this
Section.
| 13 | | (a-5) For persons who participate in a defined contribution | 14 | | plan established under Article 2 of this Code to whom the | 15 | | provisions of this Article apply, the pension credits | 16 | | established under the defined contribution plan may be | 17 | | considered in
determining eligibility for or the amount of the | 18 | | defined benefit retirement annuity that is
payable by any other | 19 | | participating system. | 20 | | (b) Combined pension credit under all retirement systems | 21 | | subject to this
Article shall be considered in determining | 22 | | whether the minimum qualification
has been met and the formula | 23 | | or method of computation which shall be applied , except as may | 24 | | be otherwise provided with respect to vesting in State or | 25 | | employer contributions in a defined contribution plan .
If a | 26 | | system has a step-rate formula for calculation of the |
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| 1 | | retirement annuity,
pension credits covering previous service | 2 | | which have been established under
another system shall be | 3 | | considered in determining which range or ranges of
the | 4 | | step-rate formula are to be applicable to the employee.
| 5 | | (c) Interest on pension credit shall continue to accumulate | 6 | | in accordance with
the provisions of the law governing the | 7 | | retirement system in which the same
has been established during | 8 | | the time an employee is in the service of another
employer, on | 9 | | the assumption such employee, for interest purposes for pension
| 10 | | credit, is continuing in the service covered by such retirement | 11 | | system.
| 12 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 13 | | (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
| 14 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 15 | | which has been held unconstitutional)
| 16 | | Sec. 20-123. Survivor's annuity. The provisions governing | 17 | | a retirement
annuity shall be applicable to a survivor's | 18 | | annuity. Appropriate credits shall
be established for | 19 | | survivor's annuity purposes in those participating systems
| 20 | | which provide survivor's annuities, according to the same | 21 | | conditions and
subject to the same limitations and restrictions | 22 | | herein prescribed for a
retirement annuity. If a participating | 23 | | system has no survivor's annuity
benefit, or if the survivor's | 24 | | annuity benefit under that system is waived,
pension credit | 25 | | established in that system shall not be considered
in |
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| 1 | | determining eligibility for or the amount of the survivor's | 2 | | annuity which
may be payable by any other participating system.
| 3 | | For persons who participate in the self-managed plan | 4 | | established under
Section 15-158.2 or the portable benefit | 5 | | package established under Section
15-136.4, pension credit | 6 | | established under Article 15 may be considered in
determining | 7 | | eligibility for or the amount of the survivor's annuity that is
| 8 | | payable by any other participating system, but pension credit | 9 | | established in
any other system shall not result in any right | 10 | | to a survivor's annuity under
the Article 15 system.
| 11 | | For persons who participate in a defined contribution plan | 12 | | established under Article 2 of this Code to whom the provisions | 13 | | of this Article apply, the pension credits established under | 14 | | the defined contribution plan may be considered in
determining | 15 | | eligibility for or the amount of the defined benefit survivor's | 16 | | annuity that is
payable by any other participating system, but | 17 | | pension credits established in
any other system shall not | 18 | | result in any right to or increase in the value of a survivor's | 19 | | annuity under
the defined contribution plan, which depends | 20 | | solely on the options chosen and the value of the participant's | 21 | | vested account
balances and is not subject to any proportional | 22 | | adjustment under this
Section. | 23 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 24 | | (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
| 25 | | (Text of Section WITHOUT the changes made by P.A. 98-599, |
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| 1 | | which has been held unconstitutional)
| 2 | | Sec. 20-124. Maximum benefits. | 3 | | (a) In no event shall the combined retirement
or survivors | 4 | | annuities exceed the highest annuity which would have been | 5 | | payable
by any participating system in which the employee has | 6 | | pension credits, if all
of his pension credits had been | 7 | | validated in that system.
| 8 | | If the combined annuities should exceed the highest maximum | 9 | | as determined
in accordance with this Section, the respective | 10 | | annuities shall be reduced
proportionately according to the | 11 | | ratio which the amount of each proportional
annuity bears to | 12 | | the aggregate of all such annuities.
| 13 | | (b) In the case of a participant in the self-managed plan | 14 | | established under
Section 15-158.2 of this Code to whom the | 15 | | provisions of this Article apply:
| 16 | | (i) For purposes of calculating the combined | 17 | | retirement annuity and
the proportionate reduction, if | 18 | | any, in a retirement annuity other than one
payable under | 19 | | the self-managed plan, the amount of the Article 15 | 20 | | retirement
annuity shall be deemed to be the highest | 21 | | annuity to which the annuitant would
have been entitled if | 22 | | he or she had participated in the traditional benefit
| 23 | | package as defined in Section 15-103.1 rather than the | 24 | | self-managed plan.
| 25 | | (ii) For purposes of calculating the combined | 26 | | survivor's annuity and
the proportionate reduction, if |
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| 1 | | any, in a survivor's annuity other than one
payable under | 2 | | the self-managed plan, the amount of the Article 15 | 3 | | survivor's
annuity shall be deemed to be the highest | 4 | | survivor's annuity to which the
survivor would have been | 5 | | entitled if the deceased employee had participated in
the | 6 | | traditional benefit package as defined in Section 15-103.1 | 7 | | rather than the
self-managed plan.
| 8 | | (iii) Benefits payable under the self-managed plan are | 9 | | not subject to
proportionate reduction under this Section.
| 10 | | (c) In the case of a participant in a defined contribution | 11 | | plan established under
Article 2 of this Code to whom the | 12 | | provisions of this Article apply: | 13 | | (i) For purposes of calculating the combined | 14 | | retirement annuity and
the proportionate reduction, if | 15 | | any, in a defined benefit retirement annuity, any benefit | 16 | | payable under the defined contribution plan shall not be | 17 | | considered. | 18 | | (ii) For purposes of calculating the combined | 19 | | survivor's annuity and
the proportionate reduction, if | 20 | | any, in a defined benefit survivor's annuity, any benefit | 21 | | payable under the defined contribution plan shall not be | 22 | | considered. | 23 | | (iii) Benefits payable under a defined contribution | 24 | | plan established under Article 2 of this Code are not | 25 | | subject to
proportionate reduction under this Section. | 26 | | (Source: P.A. 91-887, eff. 7-6-00.)
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| 1 | | (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
| 2 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 3 | | which has been held unconstitutional)
| 4 | | Sec. 20-125. Return to employment - suspension of benefits. | 5 | | If a retired
employee returns to employment which is covered by | 6 | | a system from which he is
receiving a proportional annuity | 7 | | under this Article, his proportional annuity
from all | 8 | | participating systems shall be suspended during the period of
| 9 | | re-employment, except that this suspension does not apply to | 10 | | any
distributions payable under the self-managed plan | 11 | | established under Section
15-158.2 or under a defined | 12 | | contribution plan established under Article 2 of this Code.
| 13 | | The provisions of the Article under which such employment | 14 | | would be
covered shall govern the determination of whether the | 15 | | employee has returned
to employment, and if applicable the | 16 | | exemption of temporary employment or
employment not exceeding a | 17 | | specified duration or frequency, for all
participating systems | 18 | | from which the retired employee is receiving a
proportional | 19 | | annuity under this Article, notwithstanding any contrary
| 20 | | provisions in the other Articles governing such systems.
| 21 | | (Source: P.A. 91-887, eff. 7-6-00.)
| 22 | | (40 ILCS 5/2-165 rep.) | 23 | | (40 ILCS 5/2-166 rep.) | 24 | | Section 10. The Illinois Pension Code is amended by |
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| 1 | | repealing Sections 2-165 and 2-166. | 2 | | Section 15. The State Pension Funds Continuing | 3 | | Appropriation Act is amended by adding Section 1.9 as follows: | 4 | | (40 ILCS 15/1.9 new) | 5 | | Sec. 1.9. Appropriation for consideration payment. There | 6 | | is hereby appropriated from the General Revenue Fund to the | 7 | | State Comptroller, on a continuing basis, all amounts necessary | 8 | | for the payment of consideration payments under subsection (b) | 9 | | of Section 2-110.3 of the Illinois Pension Code, in the amounts | 10 | | certified to the State Comptroller by the retirement system. | 11 | | Section 97. Severability. Except as otherwise provided in | 12 | | this Act, the provisions of this Act are severable under | 13 | | Section 1.31 of the Statute on Statutes. | 14 | | Section 99. Effective date. This Act takes effect upon
| 15 | | becoming law. | | | | SB1763 | - 44 - | LRB100 11311 RPS 21675 b |
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| 1 | |
INDEX
| 2 | |
Statutes amended in order of appearance
| | 3 | | 40 ILCS 5/2-101 | from Ch. 108 1/2, par. 2-101 | | 4 | | 40 ILCS 5/2-105 | from Ch. 108 1/2, par. 2-105 | | 5 | | 40 ILCS 5/2-105.3 new | | | 6 | | 40 ILCS 5/2-107 | from Ch. 108 1/2, par. 2-107 | | 7 | | 40 ILCS 5/2-107.9 new | | | 8 | | 40 ILCS 5/2-107.10 new | | | 9 | | 40 ILCS 5/2-108 | from Ch. 108 1/2, par. 2-108 | | 10 | | 40 ILCS 5/2-110.3 new | | | 11 | | 40 ILCS 5/2-119.1 | from Ch. 108 1/2, par. 2-119.1 | | 12 | | 40 ILCS 5/2-124 | from Ch. 108 1/2, par. 2-124 | | 13 | | 40 ILCS 5/2-126 | from Ch. 108 1/2, par. 2-126 | | 14 | | 40 ILCS 5/2-134 | from Ch. 108 1/2, par. 2-134 | | 15 | | 40 ILCS 5/2-162 | | | 16 | | 40 ILCS 5/2-165.1 new | | | 17 | | 40 ILCS 5/2-166.1 new | | | 18 | | 40 ILCS 5/20-121 | from Ch. 108 1/2, par. 20-121 | | 19 | | 40 ILCS 5/20-123 | from Ch. 108 1/2, par. 20-123 | | 20 | | 40 ILCS 5/20-124 | from Ch. 108 1/2, par. 20-124 | | 21 | | 40 ILCS 5/20-125 | from Ch. 108 1/2, par. 20-125 | | 22 | | 40 ILCS 5/2-165 rep. | | | 23 | | 40 ILCS 5/2-166 rep. | | | 24 | | 40 ILCS 15/1.9 new | |
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