Full Text of SB0470 98th General Assembly
SB0470 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 SB0470 Introduced 1/23/2013, by Sen. John J. Cullerton SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/15-155 | from Ch. 108 1/2, par. 15-155 |
| Amends the State Universities Article of the Illinois Pension Code. Makes technical changes in a Section concerning employer contributions.
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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 15-155 as follows:
| 6 | | (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
| 7 | | Sec. 15-155. Employer contributions.
| 8 | | (a) The
The State of Illinois shall make contributions by | 9 | | appropriations of
amounts which, together with the other | 10 | | employer contributions from trust,
federal, and other funds, | 11 | | employee contributions, income from investments,
and other | 12 | | income of this System, will be sufficient to meet the cost of
| 13 | | maintaining and administering the System on a 90% funded basis | 14 | | in accordance
with actuarial recommendations. | 15 | | The Board shall determine the amount of State contributions | 16 | | required for
each fiscal year on the basis of the actuarial | 17 | | tables and other assumptions
adopted by the Board and the | 18 | | recommendations of the actuary, using the formula
in subsection | 19 | | (a-1).
| 20 | | (a-1) For State fiscal years 2012 through 2045, the minimum | 21 | | contribution
to the System to be made by the State for each | 22 | | fiscal year shall be an amount
determined by the System to be | 23 | | sufficient to bring the total assets of the
System up to 90% of |
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| 1 | | the total actuarial liabilities of the System by the end of
| 2 | | State fiscal year 2045. In making these determinations, the | 3 | | required State
contribution shall be calculated each year as a | 4 | | level percentage of payroll
over the years remaining to and | 5 | | including fiscal year 2045 and shall be
determined under the | 6 | | projected unit credit actuarial cost method.
| 7 | | For State fiscal years 1996 through 2005, the State | 8 | | contribution to
the System, as a percentage of the applicable | 9 | | employee payroll, shall be
increased in equal annual increments | 10 | | so that by State fiscal year 2011, the
State is contributing at | 11 | | the rate required under this Section.
| 12 | | Notwithstanding any other provision of this Article, the | 13 | | total required State
contribution for State fiscal year 2006 is | 14 | | $166,641,900.
| 15 | | Notwithstanding any other provision of this Article, the | 16 | | total required State
contribution for State fiscal year 2007 is | 17 | | $252,064,100.
| 18 | | For each of State fiscal years 2008 through 2009, the State | 19 | | contribution to
the System, as a percentage of the applicable | 20 | | employee payroll, shall be
increased in equal annual increments | 21 | | from the required State contribution for State fiscal year | 22 | | 2007, so that by State fiscal year 2011, the
State is | 23 | | contributing at the rate otherwise required under this Section.
| 24 | | Notwithstanding any other provision of this Article, the | 25 | | total required State contribution for State fiscal year 2010 is | 26 | | $702,514,000 and shall be made from the State Pensions Fund and |
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| 1 | | proceeds of bonds sold in fiscal year 2010 pursuant to Section | 2 | | 7.2 of the General Obligation Bond Act, less (i) the pro rata | 3 | | share of bond sale expenses determined by the System's share of | 4 | | total bond proceeds, (ii) any amounts received from the General | 5 | | Revenue Fund in fiscal year 2010, (iii) any reduction in bond | 6 | | proceeds due to the issuance of discounted bonds, if | 7 | | applicable. | 8 | | Notwithstanding any other provision of this Article, the
| 9 | | total required State contribution for State fiscal year 2011 is
| 10 | | the amount recertified by the System on or before April 1, 2011 | 11 | | pursuant to Section 15-165 and shall be made from the State | 12 | | Pensions Fund and
proceeds of bonds sold in fiscal year 2011 | 13 | | pursuant to Section
7.2 of the General Obligation Bond Act, | 14 | | less (i) the pro rata
share of bond sale expenses determined by | 15 | | the System's share of
total bond proceeds, (ii) any amounts | 16 | | received from the General
Revenue Fund in fiscal year 2011, and | 17 | | (iii) any reduction in bond
proceeds due to the issuance of | 18 | | discounted bonds, if
applicable. | 19 | | Beginning in State fiscal year 2046, the minimum State | 20 | | contribution for
each fiscal year shall be the amount needed to | 21 | | maintain the total assets of
the System at 90% of the total | 22 | | actuarial liabilities of the System.
| 23 | | Amounts received by the System pursuant to Section 25 of | 24 | | the Budget Stabilization Act or Section 8.12 of the State | 25 | | Finance Act in any fiscal year do not reduce and do not | 26 | | constitute payment of any portion of the minimum State |
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| 1 | | contribution required under this Article in that fiscal year. | 2 | | Such amounts shall not reduce, and shall not be included in the | 3 | | calculation of, the required State contributions under this | 4 | | Article in any future year until the System has reached a | 5 | | funding ratio of at least 90%. A reference in this Article to | 6 | | the "required State contribution" or any substantially similar | 7 | | term does not include or apply to any amounts payable to the | 8 | | System under Section 25 of the Budget Stabilization Act. | 9 | | Notwithstanding any other provision of this Section, the | 10 | | required State
contribution for State fiscal year 2005 and for | 11 | | fiscal year 2008 and each fiscal year thereafter, as
calculated | 12 | | under this Section and
certified under Section 15-165, shall | 13 | | not exceed an amount equal to (i) the
amount of the required | 14 | | State contribution that would have been calculated under
this | 15 | | Section for that fiscal year if the System had not received any | 16 | | payments
under subsection (d) of Section 7.2 of the General | 17 | | Obligation Bond Act, minus
(ii) the portion of the State's | 18 | | total debt service payments for that fiscal
year on the bonds | 19 | | issued in fiscal year 2003 for the purposes of that Section | 20 | | 7.2, as determined
and certified by the Comptroller, that is | 21 | | the same as the System's portion of
the total moneys | 22 | | distributed under subsection (d) of Section 7.2 of the General
| 23 | | Obligation Bond Act. In determining this maximum for State | 24 | | fiscal years 2008 through 2010, however, the amount referred to | 25 | | in item (i) shall be increased, as a percentage of the | 26 | | applicable employee payroll, in equal increments calculated |
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| 1 | | from the sum of the required State contribution for State | 2 | | fiscal year 2007 plus the applicable portion of the State's | 3 | | total debt service payments for fiscal year 2007 on the bonds | 4 | | issued in fiscal year 2003 for the purposes of Section 7.2 of | 5 | | the General
Obligation Bond Act, so that, by State fiscal year | 6 | | 2011, the
State is contributing at the rate otherwise required | 7 | | under this Section.
| 8 | | (b) If an employee is paid from trust or federal funds, the | 9 | | employer
shall pay to the Board contributions from those funds | 10 | | which are
sufficient to cover the accruing normal costs on | 11 | | behalf of the employee.
However, universities having employees | 12 | | who are compensated out of local
auxiliary funds, income funds, | 13 | | or service enterprise funds are not required
to pay such | 14 | | contributions on behalf of those employees. The local auxiliary
| 15 | | funds, income funds, and service enterprise funds of | 16 | | universities shall not be
considered trust funds for the | 17 | | purpose of this Article, but funds of alumni
associations, | 18 | | foundations, and athletic associations which are affiliated | 19 | | with
the universities included as employers under this Article | 20 | | and other employers
which do not receive State appropriations | 21 | | are considered to be trust funds for
the purpose of this | 22 | | Article.
| 23 | | (b-1) The City of Urbana and the City of Champaign shall | 24 | | each make
employer contributions to this System for their | 25 | | respective firefighter
employees who participate in this | 26 | | System pursuant to subsection (h) of Section
15-107. The rate |
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| 1 | | of contributions to be made by those municipalities shall
be | 2 | | determined annually by the Board on the basis of the actuarial | 3 | | assumptions
adopted by the Board and the recommendations of the | 4 | | actuary, and shall be
expressed as a percentage of salary for | 5 | | each such employee. The Board shall
certify the rate to the | 6 | | affected municipalities as soon as may be practical.
The | 7 | | employer contributions required under this subsection shall be | 8 | | remitted by
the municipality to the System at the same time and | 9 | | in the same manner as
employee contributions.
| 10 | | (c) Through State fiscal year 1995: The total employer | 11 | | contribution shall
be apportioned among the various funds of | 12 | | the State and other employers,
whether trust, federal, or other | 13 | | funds, in accordance with actuarial procedures
approved by the | 14 | | Board. State of Illinois contributions for employers receiving
| 15 | | State appropriations for personal services shall be payable | 16 | | from appropriations
made to the employers or to the System. The | 17 | | contributions for Class I
community colleges covering earnings | 18 | | other than those paid from trust and
federal funds, shall be | 19 | | payable solely from appropriations to the Illinois
Community | 20 | | College Board or the System for employer contributions.
| 21 | | (d) Beginning in State fiscal year 1996, the required State | 22 | | contributions
to the System shall be appropriated directly to | 23 | | the System and shall be payable
through vouchers issued in | 24 | | accordance with subsection (c) of Section 15-165, except as | 25 | | provided in subsection (g).
| 26 | | (e) The State Comptroller shall draw warrants payable to |
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| 1 | | the System upon
proper certification by the System or by the | 2 | | employer in accordance with the
appropriation laws and this | 3 | | Code.
| 4 | | (f) Normal costs under this Section means liability for
| 5 | | pensions and other benefits which accrues to the System because | 6 | | of the
credits earned for service rendered by the participants | 7 | | during the
fiscal year and expenses of administering the | 8 | | System, but shall not
include the principal of or any | 9 | | redemption premium or interest on any bonds
issued by the Board | 10 | | or any expenses incurred or deposits required in
connection | 11 | | therewith.
| 12 | | (g) If the amount of a participant's earnings for any | 13 | | academic year used to determine the final rate of earnings, | 14 | | determined on a full-time equivalent basis, exceeds the amount | 15 | | of his or her earnings with the same employer for the previous | 16 | | academic year, determined on a full-time equivalent basis, by | 17 | | more than 6%, the participant's employer shall pay to the | 18 | | System, in addition to all other payments required under this | 19 | | Section and in accordance with guidelines established by the | 20 | | System, the present value of the increase in benefits resulting | 21 | | from the portion of the increase in earnings that is in excess | 22 | | of 6%. This present value shall be computed by the System on | 23 | | the basis of the actuarial assumptions and tables used in the | 24 | | most recent actuarial valuation of the System that is available | 25 | | at the time of the computation. The System may require the | 26 | | employer to provide any pertinent information or |
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| 1 | | documentation. | 2 | | Whenever it determines that a payment is or may be required | 3 | | under this subsection (g), the System shall calculate the | 4 | | amount of the payment and bill the employer for that amount. | 5 | | The bill shall specify the calculations used to determine the | 6 | | amount due. If the employer disputes the amount of the bill, it | 7 | | may, within 30 days after receipt of the bill, apply to the | 8 | | System in writing for a recalculation. The application must | 9 | | specify in detail the grounds of the dispute and, if the | 10 | | employer asserts that the calculation is subject to subsection | 11 | | (h) or (i) of this Section, must include an affidavit setting | 12 | | forth and attesting to all facts within the employer's | 13 | | knowledge that are pertinent to the applicability of subsection | 14 | | (h) or (i). Upon receiving a timely application for | 15 | | recalculation, the System shall review the application and, if | 16 | | appropriate, recalculate the amount due.
| 17 | | The employer contributions required under this subsection | 18 | | (g)
(f) may be paid in the form of a lump sum within 90 days | 19 | | after receipt of the bill. If the employer contributions are | 20 | | not paid within 90 days after receipt of the bill, then | 21 | | interest will be charged at a rate equal to the System's annual | 22 | | actuarially assumed rate of return on investment compounded | 23 | | annually from the 91st day after receipt of the bill. Payments | 24 | | must be concluded within 3 years after the employer's receipt | 25 | | of the bill. | 26 | | (h) This subsection (h) applies only to payments made or |
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| 1 | | salary increases given on or after June 1, 2005 but before July | 2 | | 1, 2011. The changes made by Public Act 94-1057 shall not | 3 | | require the System to refund any payments received before July | 4 | | 31, 2006 (the effective date of Public Act 94-1057). | 5 | | When assessing payment for any amount due under subsection | 6 | | (g), the System shall exclude earnings increases paid to | 7 | | participants under contracts or collective bargaining | 8 | | agreements entered into, amended, or renewed before June 1, | 9 | | 2005.
| 10 | | When assessing payment for any amount due under subsection | 11 | | (g), the System shall exclude earnings increases paid to a | 12 | | participant at a time when the participant is 10 or more years | 13 | | from retirement eligibility under Section 15-135.
| 14 | | When assessing payment for any amount due under subsection | 15 | | (g), the System shall exclude earnings increases resulting from | 16 | | overload work, including a contract for summer teaching, or | 17 | | overtime when the employer has certified to the System, and the | 18 | | System has approved the certification, that: (i) in the case of | 19 | | overloads (A) the overload work is for the sole purpose of | 20 | | academic instruction in excess of the standard number of | 21 | | instruction hours for a full-time employee occurring during the | 22 | | academic year that the overload is paid and (B) the earnings | 23 | | increases are equal to or less than the rate of pay for | 24 | | academic instruction computed using the participant's current | 25 | | salary rate and work schedule; and (ii) in the case of | 26 | | overtime, the overtime was necessary for the educational |
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| 1 | | mission. | 2 | | When assessing payment for any amount due under subsection | 3 | | (g), the System shall exclude any earnings increase resulting | 4 | | from (i) a promotion for which the employee moves from one | 5 | | classification to a higher classification under the State | 6 | | Universities Civil Service System, (ii) a promotion in academic | 7 | | rank for a tenured or tenure-track faculty position, or (iii) a | 8 | | promotion that the Illinois Community College Board has | 9 | | recommended in accordance with subsection (k) of this Section. | 10 | | These earnings increases shall be excluded only if the | 11 | | promotion is to a position that has existed and been filled by | 12 | | a member for no less than one complete academic year and the | 13 | | earnings increase as a result of the promotion is an increase | 14 | | that results in an amount no greater than the average salary | 15 | | paid for other similar positions. | 16 | | (i) When assessing payment for any amount due under | 17 | | subsection (g), the System shall exclude any salary increase | 18 | | described in subsection (h) of this Section given on or after | 19 | | July 1, 2011 but before July 1, 2014 under a contract or | 20 | | collective bargaining agreement entered into, amended, or | 21 | | renewed on or after June 1, 2005 but before July 1, 2011. | 22 | | Notwithstanding any other provision of this Section, any | 23 | | payments made or salary increases given after June 30, 2014 | 24 | | shall be used in assessing payment for any amount due under | 25 | | subsection (g) of this Section.
| 26 | | (j) The System shall prepare a report and file copies of |
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| 1 | | the report with the Governor and the General Assembly by | 2 | | January 1, 2007 that contains all of the following information: | 3 | | (1) The number of recalculations required by the | 4 | | changes made to this Section by Public Act 94-1057 for each | 5 | | employer. | 6 | | (2) The dollar amount by which each employer's | 7 | | contribution to the System was changed due to | 8 | | recalculations required by Public Act 94-1057. | 9 | | (3) The total amount the System received from each | 10 | | employer as a result of the changes made to this Section by | 11 | | Public Act 94-4. | 12 | | (4) The increase in the required State contribution | 13 | | resulting from the changes made to this Section by Public | 14 | | Act 94-1057. | 15 | | (k) The Illinois Community College Board shall adopt rules | 16 | | for recommending lists of promotional positions submitted to | 17 | | the Board by community colleges and for reviewing the | 18 | | promotional lists on an annual basis. When recommending | 19 | | promotional lists, the Board shall consider the similarity of | 20 | | the positions submitted to those positions recognized for State | 21 | | universities by the State Universities Civil Service System. | 22 | | The Illinois Community College Board shall file a copy of its | 23 | | findings with the System. The System shall consider the | 24 | | findings of the Illinois Community College Board when making | 25 | | determinations under this Section. The System shall not exclude | 26 | | any earnings increases resulting from a promotion when the |
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| 1 | | promotion was not submitted by a community college. Nothing in | 2 | | this subsection (k) shall require any community college to | 3 | | submit any information to the Community College Board.
| 4 | | (l) For purposes of determining the required State | 5 | | contribution to the System, the value of the System's assets | 6 | | shall be equal to the actuarial value of the System's assets, | 7 | | which shall be calculated as follows: | 8 | | As of June 30, 2008, the actuarial value of the System's | 9 | | assets shall be equal to the market value of the assets as of | 10 | | that date. In determining the actuarial value of the System's | 11 | | assets for fiscal years after June 30, 2008, any actuarial | 12 | | gains or losses from investment return incurred in a fiscal | 13 | | year shall be recognized in equal annual amounts over the | 14 | | 5-year period following that fiscal year. | 15 | | (m) For purposes of determining the required State | 16 | | contribution to the system for a particular year, the actuarial | 17 | | value of assets shall be assumed to earn a rate of return equal | 18 | | to the system's actuarially assumed rate of return. | 19 | | (Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; | 20 | | 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff. | 21 | | 7-13-12; revised 10-17-12.)
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