Illinois General Assembly - Full Text of HB1428
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Full Text of HB1428  102nd General Assembly

HB1428ham001 102ND GENERAL ASSEMBLY

Rep. Marcus C. Evans, Jr.

Filed: 3/22/2021

 

 


 

 


 
10200HB1428ham001LRB102 03444 RPS 24094 a

1
AMENDMENT TO HOUSE BILL 1428

2    AMENDMENT NO. ______. Amend House Bill 1428 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Section 22-101B as follows:
 
6    (40 ILCS 5/22-101B)
7    Sec. 22-101B. Health Care Benefits.
8    (a) The Chicago Transit Authority (hereinafter referred to
9in this Section as the "Authority") shall take all actions
10lawfully available to it to separate the funding of health
11care benefits for retirees and their dependents and survivors
12from the funding for its retirement system. The Authority
13shall endeavor to achieve this separation as soon as possible,
14and in any event no later than July 1, 2009.
15    (b) Effective 90 days after the effective date of this
16amendatory Act of the 95th General Assembly, a Retiree Health

 

 

10200HB1428ham001- 2 -LRB102 03444 RPS 24094 a

1Care Trust is established for the purpose of providing health
2care benefits to eligible retirees and their dependents and
3survivors in accordance with the terms and conditions set
4forth in this Section 22-101B. The Retiree Health Care Trust
5shall be solely responsible for providing health care benefits
6to eligible retirees and their dependents and survivors upon
7the exhaustion of the account established by the Retirement
8Plan for Chicago Transit Authority Employees pursuant to
9Section 401(h) of the Internal Revenue Code of 1986, but no
10earlier than January 1, 2009 and no later than July 1, 2009.
11        (1) The Board of Trustees shall consist of 7 members
12    appointed as follows: (i) 3 trustees shall be appointed by
13    the Chicago Transit Board; (ii) one trustee shall be
14    appointed by an organization representing the highest
15    number of Chicago Transit Authority participants; (iii)
16    one trustee shall be appointed by an organization
17    representing the second-highest number of Chicago Transit
18    Authority participants; (iv) one trustee shall be
19    appointed by the recognized coalition representatives of
20    participants who are not represented by an organization
21    with the highest or second-highest number of Chicago
22    Transit Authority participants; and (v) one trustee shall
23    be selected by the Regional Transportation Authority Board
24    of Directors, and the trustee shall be a professional
25    fiduciary who has experience in the area of collectively
26    bargained retiree health plans. Trustees shall serve until

 

 

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1    a successor has been appointed and qualified, or until
2    resignation, death, incapacity, or disqualification.
3        Any person appointed as a trustee of the board shall
4    qualify by taking an oath of office that he or she will
5    diligently and honestly administer the affairs of the
6    system, and will not knowingly violate or willfully permit
7    the violation of any of the provisions of law applicable
8    to the Plan, including Sections 1-109, 1-109.1, 1-109.2,
9    1-110, 1-111, 1-114, and 1-115 of Article 1 of the
10    Illinois Pension Code.
11        Each trustee shall cast individual votes, and a
12    majority vote shall be final and binding upon all
13    interested parties, provided that the Board of Trustees
14    may require a supermajority vote with respect to the
15    investment of the assets of the Retiree Health Care Trust,
16    and may set forth that requirement in the trust agreement
17    or by-laws of the Board of Trustees. Each trustee shall
18    have the rights, privileges, authority and obligations as
19    are usual and customary for such fiduciaries.
20        (2) The Board of Trustees shall establish and
21    administer a health care benefit program for eligible
22    retirees and their dependents and survivors. Any health
23    care benefit program established by the Board of Trustees
24    for eligible retirees and their dependents and survivors
25    effective on or after July 1, 2009 shall not contain any
26    plan which provides for more than 90% coverage for

 

 

10200HB1428ham001- 4 -LRB102 03444 RPS 24094 a

1    in-network services or 70% coverage for out-of-network
2    services after any deductible has been paid, except that
3    coverage through a health maintenance organization ("HMO")
4    may be provided at 100%.
5        (2.5) The Board of Trustees may also establish and
6    administer a health reimbursement arrangement for retirees
7    and for former employees of the Authority or the
8    Retirement Plan, and their survivors, who have contributed
9    to the Retiree Health Care Trust but do not satisfy the
10    years of service requirement of subdivision (b)(4) and the
11    terms of the retiree health care plan; or for those who do
12    satisfy the requirements of subdivision (b)(4) and the
13    terms of the retiree health care plan but who decline
14    coverage under the plan prior to retirement. Any such
15    health reimbursement arrangement may provide that: the
16    retirees or former employees of the Authority or the
17    Retirement Plan, and their survivors, must have reached
18    age 65 to be eligible to participate in the health
19    reimbursement arrangement; contributions by the retirees
20    or former employees of the Authority or the Retirement
21    Plan to the Retiree Health Care Trust shall be considered
22    assets of the Retiree Health Care Trust only;
23    contributions shall not accrue interest for the benefit of
24    the retiree or former employee of the Authority or the
25    Retirement Plan or survivor; benefits shall be payable in
26    accordance with the Internal Revenue Code of 1986; the

 

 

10200HB1428ham001- 5 -LRB102 03444 RPS 24094 a

1    amounts paid to or on account of the retiree or former
2    employee of the Authority or the Retirement Plan or
3    survivor shall not exceed the total amount which the
4    retiree or former employee of the Authority or the
5    Retirement Plan contributed to the Retiree Health Care
6    Trust; the Retiree Health Care Trust may charge a
7    reasonable administrative fee for processing the benefits.
8    The Board of Trustees of the Retiree Health Care Trust may
9    establish such rules, limitations and requirements as the
10    Board of Trustees deems appropriate.
11        (3) The Retiree Health Care Trust shall be
12    administered by the Board of Trustees according to the
13    following requirements:
14            (i) The Board of Trustees may cause amounts on
15        deposit in the Retiree Health Care Trust to be
16        invested in those investments that are permitted
17        investments for the investment of moneys held under
18        any one or more of the pension or retirement systems of
19        the State, any unit of local government or school
20        district, or any agency or instrumentality thereof.
21        The Board, by a vote of at least two-thirds of the
22        trustees, may transfer investment management to the
23        Illinois State Board of Investment, which is hereby
24        authorized to manage these investments when so
25        requested by the Board of Trustees.
26            (ii) The Board of Trustees shall establish and

 

 

10200HB1428ham001- 6 -LRB102 03444 RPS 24094 a

1        maintain an appropriate funding reserve level which
2        shall not be less than the amount of incurred and
3        unreported claims plus 12 months of expected claims
4        and administrative expenses.
5            (iii) The Board of Trustees shall make an annual
6        assessment of the funding levels of the Retiree Health
7        Care Trust and shall submit a report to the Auditor
8        General at least 90 days prior to the end of the fiscal
9        year. The report shall provide the following:
10                (A) the actuarial present value of projected
11            benefits expected to be paid to current and future
12            retirees and their dependents and survivors;
13                (B) the actuarial present value of projected
14            contributions and trust income plus assets;
15                (C) the reserve required by subsection
16            (b)(3)(ii); and
17                (D) an assessment of whether the actuarial
18            present value of projected benefits expected to be
19            paid to current and future retirees and their
20            dependents and survivors exceeds or is less than
21            the actuarial present value of projected
22            contributions and trust income plus assets in
23            excess of the reserve required by subsection
24            (b)(3)(ii).
25            If the actuarial present value of projected
26        benefits expected to be paid to current and future

 

 

10200HB1428ham001- 7 -LRB102 03444 RPS 24094 a

1        retirees and their dependents and survivors exceeds
2        the actuarial present value of projected contributions
3        and trust income plus assets in excess of the reserve
4        required by subsection (b)(3)(ii), then the report
5        shall provide a plan, to be implemented over a period
6        of not more than 10 years from each valuation date,
7        which would make the actuarial present value of
8        projected contributions and trust income plus assets
9        equal to or exceed the actuarial present value of
10        projected benefits expected to be paid to current and
11        future retirees and their dependents and survivors.
12        The plan may consist of increases in employee,
13        retiree, dependent, or survivor contribution levels,
14        decreases in benefit levels, or other plan changes or
15        any combination thereof. If the actuarial present
16        value of projected benefits expected to be paid to
17        current and future retirees and their dependents and
18        survivors is less than the actuarial present value of
19        projected contributions and trust income plus assets
20        in excess of the reserve required by subsection
21        (b)(3)(ii), then the report may provide a plan of
22        decreases in employee, retiree, dependent, or survivor
23        contribution levels, increases in benefit levels, or
24        other plan changes, or any combination thereof, to the
25        extent of the surplus.
26            (iv) The Auditor General shall review the report

 

 

10200HB1428ham001- 8 -LRB102 03444 RPS 24094 a

1        and plan provided in subsection (b)(3)(iii) and issue
2        a determination within 90 days after receiving the
3        report and plan, with a copy of such determination
4        provided to the General Assembly and the Regional
5        Transportation Authority, as follows:
6                (A) In the event of a projected shortfall, if
7            the Auditor General determines that the
8            assumptions stated in the report are not
9            unreasonable in the aggregate and that the plan of
10            increases in employee, retiree, dependent, or
11            survivor contribution levels, decreases in benefit
12            levels, or other plan changes, or any combination
13            thereof, to be implemented over a period of not
14            more than 10 years from each valuation date, is
15            reasonably projected to make the actuarial present
16            value of projected contributions and trust income
17            plus assets equal to or in excess of the actuarial
18            present value of projected benefits expected to be
19            paid to current and future retirees and their
20            dependents and survivors, then the Board of
21            Trustees shall implement the plan. If the Auditor
22            General determines that the assumptions stated in
23            the report are unreasonable in the aggregate, or
24            that the plan of increases in employee, retiree,
25            dependent, or survivor contribution levels,
26            decreases in benefit levels, or other plan changes

 

 

10200HB1428ham001- 9 -LRB102 03444 RPS 24094 a

1            to be implemented over a period of not more than 10
2            years from each valuation date, is not reasonably
3            projected to make the actuarial present value of
4            projected contributions and trust income plus
5            assets equal to or in excess of the actuarial
6            present value of projected benefits expected to be
7            paid to current and future retirees and their
8            dependents and survivors, then the Board of
9            Trustees shall not implement the plan, the Auditor
10            General shall explain the basis for such
11            determination to the Board of Trustees, and the
12            Auditor General may make recommendations as to an
13            alternative report and plan.
14                (B) In the event of a projected surplus, if
15            the Auditor General determines that the
16            assumptions stated in the report are not
17            unreasonable in the aggregate and that the plan of
18            decreases in employee, retiree, dependent, or
19            survivor contribution levels, increases in benefit
20            levels, or both, is not unreasonable in the
21            aggregate, then the Board of Trustees shall
22            implement the plan. If the Auditor General
23            determines that the assumptions stated in the
24            report are unreasonable in the aggregate, or that
25            the plan of decreases in employee, retiree,
26            dependent, or survivor contribution levels,

 

 

10200HB1428ham001- 10 -LRB102 03444 RPS 24094 a

1            increases in benefit levels, or both, is
2            unreasonable in the aggregate, then the Board of
3            Trustees shall not implement the plan, the Auditor
4            General shall explain the basis for such
5            determination to the Board of Trustees, and the
6            Auditor General may make recommendations as to an
7            alternative report and plan.
8                (C) The Board of Trustees shall submit an
9            alternative report and plan within 45 days after
10            receiving a rejection determination by the Auditor
11            General. A determination by the Auditor General on
12            any alternative report and plan submitted by the
13            Board of Trustees shall be made within 90 days
14            after receiving the alternative report and plan,
15            and shall be accepted or rejected according to the
16            requirements of this subsection (b)(3)(iv). The
17            Board of Trustees shall continue to submit
18            alternative reports and plans to the Auditor
19            General, as necessary, until a favorable
20            determination is made by the Auditor General.
21        (4) For any retiree who first retires effective on or
22    after January 18, 2008, to be eligible for retiree health
23    care benefits upon retirement, the retiree must be at
24    least 55 years of age, retire with 10 or more years of
25    continuous service and satisfy the preconditions
26    established by Public Act 95-708 in addition to any rules

 

 

10200HB1428ham001- 11 -LRB102 03444 RPS 24094 a

1    or regulations promulgated by the Board of Trustees.
2    Notwithstanding the foregoing, any retiree hired on or
3    before September 5, 2001 who retires with 25 years or more
4    of continuous service shall be eligible for retiree health
5    care benefits upon retirement in accordance with any rules
6    or regulations adopted by the Board of Trustees; provided
7    he or she retires prior to the full execution of the
8    successor collective bargaining agreement to the
9    collective bargaining agreement that became effective
10    January 1, 2007 between the Authority and the
11    organizations representing the highest and second-highest
12    number of Chicago Transit Authority participants. This
13    paragraph (4) shall not apply to a disability allowance.
14        (5) Effective January 1, 2009, the aggregate amount of
15    retiree, dependent and survivor contributions to the cost
16    of their health care benefits shall not exceed more than
17    45% of the total cost of such benefits. The Board of
18    Trustees shall have the discretion to provide different
19    contribution levels for retirees, dependents and survivors
20    based on their years of service, level of coverage or
21    Medicare eligibility, provided that the total contribution
22    from all retirees, dependents, and survivors shall be not
23    more than 45% of the total cost of such benefits. The term
24    "total cost of such benefits" for purposes of this
25    subsection shall be the total amount expended by the
26    retiree health benefit program in the prior plan year, as

 

 

10200HB1428ham001- 12 -LRB102 03444 RPS 24094 a

1    calculated and certified in writing by the Retiree Health
2    Care Trust's enrolled actuary to be appointed and paid for
3    by the Board of Trustees.
4        (6) Effective January 1, 2022 January 18, 2008, all
5    employees of the Authority shall contribute to the Retiree
6    Health Care Trust in an amount not less than 1% 3% of
7    compensation.
8        (7) No earlier than January 1, 2009 and no later than
9    July 1, 2009 as the Retiree Health Care Trust becomes
10    solely responsible for providing health care benefits to
11    eligible retirees and their dependents and survivors in
12    accordance with subsection (b) of this Section 22-101B,
13    the Authority shall not have any obligation to provide
14    health care to current or future retirees and their
15    dependents or survivors. Employees, retirees, dependents,
16    and survivors who are required to make contributions to
17    the Retiree Health Care Trust shall make contributions at
18    the level set by the Board of Trustees pursuant to the
19    requirements of this Section 22-101B.
20(Source: P.A. 98-1164, eff. 6-1-15.)".