Full Text of SB0449 098th General Assembly
SB0449 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 SB0449 Introduced 1/23/2013, by Sen. John J. Cullerton SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/7-139 | from Ch. 108 1/2, par. 7-139 |
| Amends the Illinois Municipal Retirement Fund Article of the Illinois Pension Code. Makes a technical change in a Section concerning credits and creditable service.
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| | | 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 | | Section 7-139 as follows:
| 6 | | (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
| 7 | | Sec. 7-139. Credits and creditable service to employees.
| 8 | | (a) Each participating employee shall be granted credits | 9 | | and
and creditable
service, for purposes of determining the | 10 | | amount of any annuity or benefit
to which he or a beneficiary | 11 | | is entitled, as follows:
| 12 | | 1. For prior service: Each participating employee who | 13 | | is an employee
of a participating municipality or | 14 | | participating instrumentality on the
effective date shall | 15 | | be granted creditable service, but no credits under
| 16 | | paragraph 2 of this subsection (a), for periods of prior | 17 | | service for which
credit has not been received under any | 18 | | other pension fund or retirement system
established under | 19 | | this Code, as follows:
| 20 | | If the effective date of participation for the | 21 | | participating municipality
or participating | 22 | | instrumentality is on or before January 1, 1998, creditable
| 23 | | service shall be granted for the entire period of prior |
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| 1 | | service with that
employer without any employee | 2 | | contribution.
| 3 | | If the effective date of participation for the | 4 | | participating municipality
or participating | 5 | | instrumentality is after January 1, 1998, creditable
| 6 | | service shall be granted for the last 20% of the period of | 7 | | prior service with
that employer, but no more than 5 years, | 8 | | without any employee contribution. A
participating | 9 | | employee may establish creditable service for the | 10 | | remainder of
the period of prior service with that employer | 11 | | by making an application in
writing, accompanied by payment | 12 | | of an employee contribution in an
amount determined by the | 13 | | Fund, based on the employee contribution rates in
effect at | 14 | | the time of application for the creditable service and the | 15 | | employee's
salary rate on the effective date of | 16 | | participation for that employer, plus
interest at the | 17 | | effective rate from the date of the prior service to the | 18 | | date
of payment. Application for this creditable service | 19 | | may be made at any time
while the employee is still in | 20 | | service.
| 21 | | A municipality that (i) has at least 35 employees; (ii) | 22 | | is located in a county with at least 2,000,000 inhabitants; | 23 | | and (iii) maintains an independent defined benefit pension | 24 | | plan for the benefit of its eligible employees may restrict | 25 | | creditable service in whole or in part for periods of prior | 26 | | service with the employer if the governing body of the |
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| 1 | | municipality adopts an irrevocable resolution to restrict | 2 | | that creditable service and files the resolution with the | 3 | | board before the municipality's effective date of | 4 | | participation.
| 5 | | Any person who has withdrawn from the service of a | 6 | | participating
municipality
or participating | 7 | | instrumentality prior to the effective date, who reenters
| 8 | | the service of the same municipality or participating | 9 | | instrumentality after
the effective date and becomes a | 10 | | participating employee is entitled to
creditable service | 11 | | for prior service as otherwise provided in this
subdivision | 12 | | (a)(1) only if he or she renders 2 years of service as a
| 13 | | participating employee after the effective date. | 14 | | Application
for such service must be made while in a | 15 | | participating status.
The salary rate to be used in the | 16 | | calculation of the required employee
contribution, if any, | 17 | | shall be the employee's salary rate at the time of first
| 18 | | reentering service with the employer after the employer's | 19 | | effective date of
participation.
| 20 | | 2. For current service, each participating employee | 21 | | shall be
credited with:
| 22 | | a. Additional credits of amounts equal to each | 23 | | payment of additional
contributions received from him | 24 | | under Section 7-173, as of the
date the corresponding | 25 | | payment of earnings is payable to him.
| 26 | | b. Normal credits of amounts equal to each payment |
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| 1 | | of normal
contributions received from him, as of the | 2 | | date the corresponding payment of
earnings is payable | 3 | | to him, and normal contributions made for the purpose | 4 | | of
establishing out-of-state service credits as | 5 | | permitted under the conditions set
forth in paragraph 6 | 6 | | of this subsection (a).
| 7 | | c. Municipality credits in an amount equal to 1.4 | 8 | | times the normal
credits, except those established by | 9 | | out-of-state service credits, as of
the date of | 10 | | computation of any benefit if these credits would | 11 | | increase
the benefit.
| 12 | | d. Survivor credits equal to each payment of | 13 | | survivor contributions
received from the participating | 14 | | employee as of the date the
corresponding payment of | 15 | | earnings is payable, and survivor contributions made
| 16 | | for the purpose of establishing out-of-state service | 17 | | credits.
| 18 | | 3. For periods of temporary and total and permanent | 19 | | disability
benefits, each employee receiving disability | 20 | | benefits shall be granted
creditable service for the period | 21 | | during which disability benefits are
payable. Normal and | 22 | | survivor credits, based upon the rate of earnings
applied | 23 | | for disability benefits, shall also be granted if such | 24 | | credits
would result in a higher benefit to any such | 25 | | employee or his
beneficiary.
| 26 | | 4. For authorized leave of absence without pay: A |
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| 1 | | participating
employee shall be granted credits and | 2 | | creditable service for periods of
authorized leave of | 3 | | absence without pay under the following
conditions:
| 4 | | a. An application for credits and creditable | 5 | | service is submitted to the
board while the employee is | 6 | | in a status of
active employment.
| 7 | | b. Not more than 12 complete months of creditable | 8 | | service
for authorized leave of absence without pay | 9 | | shall be counted for purposes of
determining any | 10 | | benefits payable under this Article.
| 11 | | c. Credits and creditable service shall be granted | 12 | | for leave of
absence only if such leave is approved by | 13 | | the governing body of the
municipality, including | 14 | | approval of the estimated cost thereof to the
| 15 | | municipality as determined by the fund, and employee | 16 | | contributions, plus
interest at the effective rate | 17 | | applicable for each year from the end of
the period of | 18 | | leave to date of payment, have been paid to the fund in
| 19 | | accordance with Section 7-173. The contributions shall | 20 | | be computed upon the
assumption earnings continued | 21 | | during the period of leave at the rate in
effect when | 22 | | the leave began.
| 23 | | d. Benefits under the provisions of Sections | 24 | | 7-141, 7-146, 7-150
and 7-163 shall become payable to | 25 | | employees on authorized leave of
absence, or their | 26 | | designated beneficiary, only if such leave of absence
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| 1 | | is creditable hereunder, and if the employee has at | 2 | | least one year of
creditable service other than the | 3 | | service granted for leave of absence.
Any employee | 4 | | contributions due may be deducted from any benefits
| 5 | | payable.
| 6 | | e. No credits or creditable service shall be | 7 | | allowed for leave of
absence without pay during any | 8 | | period of prior service.
| 9 | | 5. For military service: The governing body of a | 10 | | municipality or
participating instrumentality may elect to | 11 | | allow creditable service to
participating employees who | 12 | | leave their employment to serve in the armed
forces of the | 13 | | United States for all periods of such service, provided
| 14 | | that the person returns to active employment within 90 days | 15 | | after
completion
of full time active duty, but no | 16 | | creditable service shall be allowed such
person for any | 17 | | period that can be used in the computation of a pension
or | 18 | | any other pay or benefit, other than pay for active duty, | 19 | | for service
in any branch of the armed forces of the United | 20 | | States. If necessary to
the computation of any benefit, the | 21 | | board shall establish municipality
credits for | 22 | | participating employees under this paragraph on the
| 23 | | assumption that the employee received earnings at the rate | 24 | | received at
the time he left the employment to enter the | 25 | | armed forces. A
participating employee in the armed forces | 26 | | shall not be considered an
employee during such period of |
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| 1 | | service and no additional death and no
disability benefits | 2 | | are payable for death or disability during such period.
| 3 | | Any participating employee who left his employment | 4 | | with a
municipality or participating instrumentality to | 5 | | serve in the armed
forces of the United States and who | 6 | | again became a participating
employee within 90 days after | 7 | | completion of full time active duty by
entering the service | 8 | | of a different municipality or participating
| 9 | | instrumentality, which has elected to allow creditable | 10 | | service for
periods of military service under the preceding | 11 | | paragraph, shall also be
allowed creditable service for his | 12 | | period of military service on the
same terms that would | 13 | | apply if he had been employed, before entering
military | 14 | | service, by the municipality or instrumentality which | 15 | | employed
him after he left the military service and the | 16 | | employer costs arising in
relation to such grant of | 17 | | creditable service shall be charged to and
paid by that | 18 | | municipality or instrumentality.
| 19 | | Notwithstanding the foregoing, any participating | 20 | | employee
shall be entitled to creditable service as | 21 | | required by any federal law
relating to re-employment | 22 | | rights of persons who served in the United States
Armed | 23 | | Services. Such creditable service shall be granted upon | 24 | | payment by
the member of an amount equal to the employee | 25 | | contributions which would
have been required had the | 26 | | employee continued in service at the same
rate of earnings |
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| 1 | | during the military leave period, plus interest at
the | 2 | | effective rate.
| 3 | | 5.1. In addition to any creditable service established | 4 | | under
paragraph 5 of this subsection (a), creditable | 5 | | service may be granted for
up to 48 months of service in | 6 | | the armed forces of the United States.
| 7 | | In order to receive creditable service for military | 8 | | service under this
paragraph 5.1, a participating employee | 9 | | must (1) apply to the Fund
in writing and provide evidence | 10 | | of the military service that is satisfactory
to the Board; | 11 | | (2) obtain the written approval of the current employer; | 12 | | and (3)
make contributions to the Fund equal to (i)
the | 13 | | employee contributions that would have been required had | 14 | | the service been
rendered as a member, plus (ii) an amount | 15 | | determined by the board to be equal
to the employer's | 16 | | normal cost of the benefits accrued for that military
| 17 | | service, plus (iii) interest on items (i) and (ii) from the | 18 | | date of first
membership in the Fund to the date of | 19 | | payment. The required interest shall be
calculated at the | 20 | | regular interest rate.
| 21 | | The changes made to this paragraph 5.1 by Public Acts | 22 | | 95-483 and 95-486
apply only to participating employees in | 23 | | service on or after August 28, 2007 (the effective date of | 24 | | those Public Acts).
| 25 | | 6. For out-of-state service: Creditable service shall | 26 | | be granted for
service rendered to an out-of-state local |
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| 1 | | governmental body under the
following conditions: The | 2 | | employee had participated and has irrevocably
forfeited | 3 | | all rights to benefits in the out-of-state public employees
| 4 | | pension system; the governing body of his participating | 5 | | municipality or
instrumentality authorizes the employee to | 6 | | establish such service; the
employee has 2 years current | 7 | | service with this municipality or
participating | 8 | | instrumentality; the employee makes a payment of
| 9 | | contributions, which shall be computed at 8% (normal) plus | 10 | | 2% (survivor)
times length of service purchased times the | 11 | | average rate of earnings for the
first 2
years of service | 12 | | with the municipality or participating
instrumentality | 13 | | whose governing body authorizes the service established
| 14 | | plus interest at the effective rate on the date such | 15 | | credits are
established, payable from the date the employee | 16 | | completes the required 2
years of current service to date | 17 | | of payment. In no case shall more than
120 months of | 18 | | creditable service be granted under this provision.
| 19 | | 7. For retroactive service: Any employee who could have | 20 | | but did not
elect to become a participating employee, or | 21 | | who should have been a
participant in the Municipal Public | 22 | | Utilities Annuity and Benefit Fund
before that fund was | 23 | | superseded, may receive creditable service for the
period | 24 | | of service not to exceed 50 months; however, a current or | 25 | | former
elected or appointed official of a participating | 26 | | municipality may establish credit under this paragraph 7 |
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| 1 | | for more than 50
months of service as an official of that | 2 | | municipality, if the excess over 50 months is approved by | 3 | | resolution of the
governing body of the affected | 4 | | municipality filed with
the Fund before January 1, 2002.
| 5 | | Any employee who is a
participating employee on or | 6 | | after September 24, 1981 and who was
excluded from | 7 | | participation by the age restrictions removed by Public Act
| 8 | | 82-596 may receive creditable service for the period, on or | 9 | | after January
1, 1979, excluded by the age restriction and, | 10 | | in addition, if the governing
body of the participating | 11 | | municipality or participating instrumentality elects
to | 12 | | allow creditable service for all employees excluded by the | 13 | | age restriction
prior to January 1, 1979, for service | 14 | | during the period prior to that date
excluded by the age | 15 | | restriction. Any employee who was excluded from
| 16 | | participation by the age restriction removed by Public Act | 17 | | 82-596 and who is
not a participating employee on or after | 18 | | September 24, 1981 may receive
creditable service for | 19 | | service after January 1,
1979. Creditable service under | 20 | | this paragraph
shall be granted upon payment of the | 21 | | employee contributions
which would have been required had | 22 | | he participated, with interest at the
effective rate for | 23 | | each year from the end of the period of service
established | 24 | | to date of payment.
| 25 | | 8. For accumulated unused sick leave: A participating | 26 | | employee who is
applying for a retirement annuity shall be |
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| 1 | | entitled to creditable service
for that portion of the | 2 | | employee's accumulated unused sick leave
for which payment | 3 | | is not received, as follows:
| 4 | | a. Sick leave days shall be limited to those | 5 | | accumulated under a sick
leave plan established by a | 6 | | participating municipality or participating
| 7 | | instrumentality which is available to all employees or | 8 | | a class of employees.
| 9 | | b. Except as provided in item b-1, only sick leave | 10 | | days accumulated with a participating municipality or
| 11 | | participating instrumentality with which the employee | 12 | | was in service within
60 days of the effective date of | 13 | | his retirement annuity shall be credited;
If the | 14 | | employee was in service with more than one employer | 15 | | during this
period only the sick leave days with the | 16 | | employer with which the employee
has the greatest | 17 | | number of unpaid sick leave days shall be considered.
| 18 | | b-1. If the employee was in the service of more | 19 | | than one employer as defined in item (2) of paragraph | 20 | | (a) of subsection (A) of Section 7-132, then the sick | 21 | | leave days from all such employers shall be credited, | 22 | | as long as the creditable service attributed to those | 23 | | sick leave days does not exceed the limitation in item | 24 | | f of this paragraph 8. In calculating the creditable | 25 | | service under this item b-1, the sick leave days from | 26 | | the last employer shall be considered first, then the |
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| 1 | | remaining sick leave days shall be considered until | 2 | | there are no more days or the maximum creditable sick | 3 | | leave threshold under item f of this paragraph 8 has | 4 | | been reached.
| 5 | | c. The creditable service granted shall be | 6 | | considered solely for the
purpose of computing the | 7 | | amount of the retirement annuity and shall not be
used | 8 | | to establish any minimum service period required by any | 9 | | provision of the
Illinois Pension Code, the effective | 10 | | date of the retirement annuity, or the
final rate of | 11 | | earnings.
| 12 | | d. The creditable service shall be at the rate of | 13 | | 1/20 of a month for
each full sick day, provided that | 14 | | no more than 12 months may be credited
under this | 15 | | subdivision 8.
| 16 | | e. Employee contributions shall not be required | 17 | | for creditable service
under this subdivision 8.
| 18 | | f. Each participating municipality and | 19 | | participating instrumentality
with which an employee | 20 | | has service within 60 days of the effective date of
his | 21 | | retirement annuity shall certify to the board the | 22 | | number of accumulated
unpaid sick leave days credited | 23 | | to the employee at the time of termination
of service.
| 24 | | 9. For service transferred from another system: | 25 | | Credits and
creditable service shall be granted for service | 26 | | under Article 3, 4, 5, 8, 14,
or 16 of this Act, to any |
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| 1 | | active member of this Fund, and to any
inactive member who | 2 | | has been a county sheriff, upon
transfer of such credits | 3 | | pursuant to Section 3-110.3, 4-108.3, 5-235,
8-226.7,
| 4 | | 14-105.6, or 16-131.4, and payment by the member of the | 5 | | amount by
which (1) the employer and employee contributions | 6 | | that would have been required
if he had participated in | 7 | | this Fund as a sheriff's law enforcement employee
during | 8 | | the period for which credit is
being transferred, plus | 9 | | interest thereon at the effective rate for each
year, | 10 | | compounded annually, from the date of termination of the | 11 | | service for
which credit is being transferred to the date | 12 | | of payment, exceeds (2) the
amount actually transferred to | 13 | | the Fund.
Such transferred service shall be deemed to be | 14 | | service as a sheriff's law
enforcement employee for the | 15 | | purposes of Section 7-142.1.
| 16 | | 10. For service transferred from an Article 3 system | 17 | | under Section 3-110.8: Credits and
creditable service | 18 | | shall be granted for service under Article 3 of this Act as | 19 | | provided in Section 3-110.8, to any active member of this | 20 | | Fund upon
transfer of such credits pursuant to Section | 21 | | 3-110.8. If the amount by
which (1) the employer and | 22 | | employee contributions that would have been required
if he | 23 | | had participated in this Fund during the period for which | 24 | | credit is
being transferred, plus interest thereon at the | 25 | | effective rate for each
year, compounded annually, from the | 26 | | date of termination of the service for
which credit is |
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| 1 | | being transferred to the date of payment, exceeds (2) the
| 2 | | amount actually transferred to the Fund, then the amount of | 3 | | creditable service established under this paragraph 10 | 4 | | shall be reduced by a corresponding amount in accordance | 5 | | with the rules and procedures established under this | 6 | | paragraph 10.
| 7 | | The board shall establish by rule the manner of making | 8 | | the calculation required under
this paragraph 10, taking | 9 | | into account the appropriate actuarial
assumptions; the | 10 | | member's service, age, and salary history; the level
of | 11 | | funding of the employer; and
any other factors that the | 12 | | board determines to be relevant.
| 13 | | Until January 1, 2010, members who transferred service | 14 | | from an Article 3 system under the provisions of Public Act | 15 | | 94-356 may establish additional credit in this Fund, but | 16 | | only up to the amount of the service credit reduction in | 17 | | that transfer, as calculated under the actuarial | 18 | | assumptions. This credit may be established upon payment by | 19 | | the member of an amount to be determined by the board, | 20 | | equal to (1) the amount that would have been contributed as | 21 | | employee and employer contributions had all the service | 22 | | been as an employee under this Article, plus interest | 23 | | thereon compounded annually from the date of service to the | 24 | | date of transfer, less (2) the total amount transferred | 25 | | from the Article 3 system, plus (3) interest on the | 26 | | difference at the effective rate for each year, compounded |
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| 1 | | annually, from the date of the transfer to the date of | 2 | | payment. The additional service credit is allowed under | 3 | | this amendatory Act of the 95th General Assembly | 4 | | notwithstanding the provisions of Article 3 terminating | 5 | | all transferred credits on the date of transfer. | 6 | | (b) Creditable service - amount:
| 7 | | 1. One month of creditable service
shall be allowed for | 8 | | each month for which a participating employee made
| 9 | | contributions as required under Section 7-173, or for which | 10 | | creditable
service is otherwise granted hereunder. Not | 11 | | more than 1 month of
service shall be credited and counted | 12 | | for 1 calendar month, and not more
than 1 year of service | 13 | | shall be credited and counted for any calendar
year. A | 14 | | calendar month means a nominal month beginning on the first | 15 | | day
thereof, and a calendar year means a year beginning | 16 | | January 1 and ending
December 31.
| 17 | | 2. A seasonal employee shall be given 12 months of | 18 | | creditable
service if he renders the number of months of | 19 | | service normally required
by the position in a 12-month | 20 | | period and he remains in service for the
entire 12-month | 21 | | period. Otherwise a fractional year of service in the
| 22 | | number of months of service rendered shall be credited.
| 23 | | 3. An intermittent employee shall be given creditable | 24 | | service for
only those months in which a contribution is | 25 | | made under Section 7-173.
| 26 | | (c) No application for correction of credits or creditable |
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| 1 | | service shall
be considered unless the board receives an | 2 | | application for correction while
(1) the applicant is a | 3 | | participating employee and in active employment
with a | 4 | | participating municipality or instrumentality, or (2) while | 5 | | the
applicant is actively participating in a pension fund or | 6 | | retirement
system which is a participating system under the | 7 | | Retirement Systems
Reciprocal Act. A participating employee or | 8 | | other applicant shall not be
entitled to credits or creditable | 9 | | service unless the required employee
contributions are made in | 10 | | a lump sum or in installments made in accordance
with board | 11 | | rule.
| 12 | | (d) Upon the granting of a retirement, surviving spouse or | 13 | | child
annuity, a death benefit or a separation benefit, on | 14 | | account of any
employee, all individual accumulated credits | 15 | | shall thereupon terminate.
Upon the withdrawal of additional | 16 | | contributions, the credits applicable
thereto shall thereupon | 17 | | terminate. Terminated credits shall not be applied
to increase | 18 | | the benefits any remaining employee would otherwise receive | 19 | | under
this Article.
| 20 | | (Source: P.A. 96-299, eff. 8-11-09; 97-415, eff. 8-16-11.)
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