Illinois General Assembly - Full Text of SB1056
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Full Text of SB1056  102nd General Assembly

SB1056 102ND GENERAL ASSEMBLY


 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1056

 

Introduced 2/25/2021, by Sen. Don Harmon

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/14-131

    Amends the State Employee Article of the Illinois Pension Code. Makes a technical change in a Section concerning contributions by the State.


LRB102 04871 RPS 14890 b

PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1056LRB102 04871 RPS 14890 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by
5changing Section 14-131 as follows:
 
6    (40 ILCS 5/14-131)
7    Sec. 14-131. Contributions by State.
8    (a) The The State shall make contributions to the System
9by appropriations of amounts which, together with other
10employer contributions from trust, federal, and other funds,
11employee contributions, investment income, and other income,
12will be sufficient to meet the cost of maintaining and
13administering the System on a 90% funded basis in accordance
14with actuarial recommendations.
15    For the purposes of this Section and Section 14-135.08,
16references to State contributions refer only to employer
17contributions and do not include employee contributions that
18are picked up or otherwise paid by the State or a department on
19behalf of the employee.
20    (b) The Board shall determine the total amount of State
21contributions required for each fiscal year on the basis of
22the actuarial tables and other assumptions adopted by the
23Board, using the formula in subsection (e).

 

 

SB1056- 2 -LRB102 04871 RPS 14890 b

1    The Board shall also determine a State contribution rate
2for each fiscal year, expressed as a percentage of payroll,
3based on the total required State contribution for that fiscal
4year (less the amount received by the System from
5appropriations under Section 8.12 of the State Finance Act and
6Section 1 of the State Pension Funds Continuing Appropriation
7Act, if any, for the fiscal year ending on the June 30
8immediately preceding the applicable November 15 certification
9deadline), the estimated payroll (including all forms of
10compensation) for personal services rendered by eligible
11employees, and the recommendations of the actuary.
12    For the purposes of this Section and Section 14.1 of the
13State Finance Act, the term "eligible employees" includes
14employees who participate in the System, persons who may elect
15to participate in the System but have not so elected, persons
16who are serving a qualifying period that is required for
17participation, and annuitants employed by a department as
18described in subdivision (a)(1) or (a)(2) of Section 14-111.
19    (c) Contributions shall be made by the several departments
20for each pay period by warrants drawn by the State Comptroller
21against their respective funds or appropriations based upon
22vouchers stating the amount to be so contributed. These
23amounts shall be based on the full rate certified by the Board
24under Section 14-135.08 for that fiscal year. From March 5,
252004 (the effective date of Public Act 93-665) through the
26payment of the final payroll from fiscal year 2004

 

 

SB1056- 3 -LRB102 04871 RPS 14890 b

1appropriations, the several departments shall not make
2contributions for the remainder of fiscal year 2004 but shall
3instead make payments as required under subsection (a-1) of
4Section 14.1 of the State Finance Act. The several departments
5shall resume those contributions at the commencement of fiscal
6year 2005.
7    (c-1) Notwithstanding subsection (c) of this Section, for
8fiscal years 2010, 2012, and each fiscal year thereafter,
9contributions by the several departments are not required to
10be made for General Revenue Funds payrolls processed by the
11Comptroller. Payrolls paid by the several departments from all
12other State funds must continue to be processed pursuant to
13subsection (c) of this Section.
14    (c-2) For State fiscal years 2010, 2012, and each fiscal
15year thereafter, on or as soon as possible after the 15th day
16of each month, the Board shall submit vouchers for payment of
17State contributions to the System, in a total monthly amount
18of one-twelfth of the fiscal year General Revenue Fund
19contribution as certified by the System pursuant to Section
2014-135.08 of the Illinois Pension Code.
21    (d) If an employee is paid from trust funds or federal
22funds, the department or other employer shall pay employer
23contributions from those funds to the System at the certified
24rate, unless the terms of the trust or the federal-State
25agreement preclude the use of the funds for that purpose, in
26which case the required employer contributions shall be paid

 

 

SB1056- 4 -LRB102 04871 RPS 14890 b

1by the State.
2    (e) For State fiscal years 2012 through 2045, the minimum
3contribution to the System to be made by the State for each
4fiscal year shall be an amount determined by the System to be
5sufficient to bring the total assets of the System up to 90% of
6the total actuarial liabilities of the System by the end of
7State fiscal year 2045. In making these determinations, the
8required State contribution shall be calculated each year as a
9level percentage of payroll over the years remaining to and
10including fiscal year 2045 and shall be determined under the
11projected unit credit actuarial cost method.
12    A change in an actuarial or investment assumption that
13increases or decreases the required State contribution and
14first applies in State fiscal year 2018 or thereafter shall be
15implemented in equal annual amounts over a 5-year period
16beginning in the State fiscal year in which the actuarial
17change first applies to the required State contribution.
18    A change in an actuarial or investment assumption that
19increases or decreases the required State contribution and
20first applied to the State contribution in fiscal year 2014,
212015, 2016, or 2017 shall be implemented:
22        (i) as already applied in State fiscal years before
23    2018; and
24        (ii) in the portion of the 5-year period beginning in
25    the State fiscal year in which the actuarial change first
26    applied that occurs in State fiscal year 2018 or

 

 

SB1056- 5 -LRB102 04871 RPS 14890 b

1    thereafter, by calculating the change in equal annual
2    amounts over that 5-year period and then implementing it
3    at the resulting annual rate in each of the remaining
4    fiscal years in that 5-year period.
5    For State fiscal years 1996 through 2005, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual
8increments so that by State fiscal year 2011, the State is
9contributing at the rate required under this Section; except
10that (i) for State fiscal year 1998, for all purposes of this
11Code and any other law of this State, the certified percentage
12of the applicable employee payroll shall be 5.052% for
13employees earning eligible creditable service under Section
1414-110 and 6.500% for all other employees, notwithstanding any
15contrary certification made under Section 14-135.08 before
16July 7, 1997 (the effective date of Public Act 90-65), and (ii)
17in the following specified State fiscal years, the State
18contribution to the System shall not be less than the
19following indicated percentages of the applicable employee
20payroll, even if the indicated percentage will produce a State
21contribution in excess of the amount otherwise required under
22this subsection and subsection (a): 9.8% in FY 1999; 10.0% in
23FY 2000; 10.2% in FY 2001; 10.4% in FY 2002; 10.6% in FY 2003;
24and 10.8% in FY 2004.
25    Beginning in State fiscal year 2046, the minimum State
26contribution for each fiscal year shall be the amount needed

 

 

SB1056- 6 -LRB102 04871 RPS 14890 b

1to maintain the total assets of the System at 90% of the total
2actuarial liabilities of the System.
3    Amounts received by the System pursuant to Section 25 of
4the Budget Stabilization Act or Section 8.12 of the State
5Finance Act in any fiscal year do not reduce and do not
6constitute payment of any portion of the minimum State
7contribution required under this Article in that fiscal year.
8Such amounts shall not reduce, and shall not be included in the
9calculation of, the required State contributions under this
10Article in any future year until the System has reached a
11funding ratio of at least 90%. A reference in this Article to
12the "required State contribution" or any substantially similar
13term does not include or apply to any amounts payable to the
14System under Section 25 of the Budget Stabilization Act.
15    Notwithstanding any other provision of this Section, the
16required State contribution for State fiscal year 2005 and for
17fiscal year 2008 and each fiscal year thereafter, as
18calculated under this Section and certified under Section
1914-135.08, shall not exceed an amount equal to (i) the amount
20of the required State contribution that would have been
21calculated under this Section for that fiscal year if the
22System had not received any payments under subsection (d) of
23Section 7.2 of the General Obligation Bond Act, minus (ii) the
24portion of the State's total debt service payments for that
25fiscal year on the bonds issued in fiscal year 2003 for the
26purposes of that Section 7.2, as determined and certified by

 

 

SB1056- 7 -LRB102 04871 RPS 14890 b

1the Comptroller, that is the same as the System's portion of
2the total moneys distributed under subsection (d) of Section
37.2 of the General Obligation Bond Act.
4    (f) (Blank).
5    (g) For purposes of determining the required State
6contribution to the System, the value of the System's assets
7shall be equal to the actuarial value of the System's assets,
8which shall be calculated as follows:
9    As of June 30, 2008, the actuarial value of the System's
10assets shall be equal to the market value of the assets as of
11that date. In determining the actuarial value of the System's
12assets for fiscal years after June 30, 2008, any actuarial
13gains or losses from investment return incurred in a fiscal
14year shall be recognized in equal annual amounts over the
155-year period following that fiscal year.
16    (h) For purposes of determining the required State
17contribution to the System for a particular year, the
18actuarial value of assets shall be assumed to earn a rate of
19return equal to the System's actuarially assumed rate of
20return.
21    (i) (Blank).
22    (j) (Blank).
23    (k) For fiscal year 2012 and each fiscal year thereafter,
24after the submission of all payments for eligible employees
25from personal services line items paid from the General
26Revenue Fund in the fiscal year have been made, the

 

 

SB1056- 8 -LRB102 04871 RPS 14890 b

1Comptroller shall provide to the System a certification of the
2sum of all expenditures in the fiscal year for personal
3services. Upon receipt of the certification, the System shall
4determine the amount due to the System based on the full rate
5certified by the Board under Section 14-135.08 for the fiscal
6year in order to meet the State's obligation under this
7Section. The System shall compare this amount due to the
8amount received by the System for the fiscal year. If the
9amount due is more than the amount received, the difference
10shall be termed the "Prior Fiscal Year Shortfall" for purposes
11of this Section, and the Prior Fiscal Year Shortfall shall be
12satisfied under Section 1.2 of the State Pension Funds
13Continuing Appropriation Act. If the amount due is less than
14the amount received, the difference shall be termed the "Prior
15Fiscal Year Overpayment" for purposes of this Section, and the
16Prior Fiscal Year Overpayment shall be repaid by the System to
17the General Revenue Fund as soon as practicable after the
18certification.
19(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
20101-10, eff. 6-5-19.)