Full Text of SB2284 100th General Assembly
SB2284 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB2284 Introduced 1/10/2018, by Sen. Chuck Weaver SYNOPSIS AS INTRODUCED: |
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Amends the General Assembly Article of the Illinois Pension Code. Requires the General Assembly Retirement System to establish a self-directed retirement plan. Provides that for persons who become a participant on or after the effective date of the amendatory Act, participation in the System shall be limited to participation in the self-directed retirement plan. Allows a Tier 1 or Tier 2 participant to make an irrevocable election to participate in the self-directed retirement plan instead of the defined benefit plan. Makes changes to the pensionable salary for active participants. Provides that upon a participant's first day of participation in the self-directed retirement plan, the participant becomes vested in his or her contributions to the self-directed retirement plan, the employer's contributions to the self-directed retirement plan, and the investment returns attributable to those contributions credited to his or her account. Provides that a member who has filed notice of an election not to participate may become a Tier 3 participant without making a specified required contribution by filing with the board a written rescission of the election not to participate if he or she elects to participate in the self-directed retirement plan. Provides that a member who files the written rescission without making the required contribution and only participates in the self-directed retirement plan may not receive credit for service as a member prior to the date of the rescission. Repeals a provision added by Public Act 98-599, which has been held unconstitutional, that defines "Tier 1 participant" and "Tier 2 participant".
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| | FISCAL NOTE ACT MAY APPLY | | PENSION IMPACT NOTE ACT MAY APPLY |
| | A BILL FOR |
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| | | SB2284 | | LRB100 13770 RPS 28492 b |
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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 2-117 and by adding Sections 2-105.3 and 2-167 as | 6 | | follows: | 7 | | (40 ILCS 5/2-105.3 new) | 8 | | Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier | 9 | | 3 participant. | 10 | | "Tier 1 participant": A participant who first became a | 11 | | participant before January 1, 2011. | 12 | | In the case of a Tier 1 participant who elects to | 13 | | participate in the self-directed retirement plan under Section | 14 | | 2-167, that participant shall be deemed a Tier 1 participant | 15 | | only with respect to service performed or established before | 16 | | the effective date of that election. | 17 | | "Tier 2 participant": A participant who first became a | 18 | | participant on or after January 1, 2011 and before the | 19 | | effective date of this amendatory Act of the 100th General | 20 | | Assembly. | 21 | | In the case of a Tier 2 participant who elects to | 22 | | participate in the self-directed retirement plan under Section | 23 | | 2-167, that participant shall be deemed a Tier 2 participant |
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| 1 | | only with respect to service performed or established before | 2 | | the effective date of that election. | 3 | | "Tier 3 participant": A participant who first becomes a | 4 | | participant on or after the effective date of this amendatory | 5 | | Act of the 100th General Assembly; or a Tier 1 or Tier 2 | 6 | | participant who elects to participate in the self-directed | 7 | | retirement plan under Section 2-167 of this Code, but only with | 8 | | respect to service performed or established on or after the | 9 | | effective date of that election.
| 10 | | (40 ILCS 5/2-117) (from Ch. 108 1/2, par. 2-117)
| 11 | | Sec. 2-117. Participants - Election not to participate.
| 12 | | (a) Every person who was a member on November 1, 1947, or | 13 | | in military
service on such date, is subject to the provisions | 14 | | of this system beginning
upon such date, unless prior to such | 15 | | date he or she filed with the board a
written notice of | 16 | | election not to participate.
| 17 | | Every person who becomes a member after November 1, 1947, | 18 | | and who is
then not a participant becomes a participant | 19 | | beginning upon the date of
becoming a member unless, within 24 | 20 | | months from that date, he or she has
filed with the board a | 21 | | written notice of election not to participate.
| 22 | | (b) A member who has filed notice of an election not to | 23 | | participate
(and a former member who has not yet begun to | 24 | | receive a retirement
annuity under this Article) may become a | 25 | | participant with respect to the period
for which the member |
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| 1 | | elected not to participate upon filing with the board,
before | 2 | | April 1, 1993, a written rescission of the election not to | 3 | | participate.
Upon contributing an amount equal to the | 4 | | contributions he or she would have
made as a participant from | 5 | | November 1, 1947, or the date of becoming a member,
whichever | 6 | | is later, to the date of becoming a participant, with interest | 7 | | at the
rate of 4% per annum until the contributions are paid, | 8 | | the participant shall
receive credit for service as a member | 9 | | prior to the date of the rescission,
both before and after | 10 | | November 1, 1947. The required contributions shall be
made | 11 | | before commencement of the retirement annuity; otherwise no | 12 | | credit for
service prior to the date of participation shall be | 13 | | granted.
| 14 | | (c) A member who has filed notice of an election not to | 15 | | participate may become a Tier 3 participant without making a | 16 | | contribution under subsection (b) by filing with the board a | 17 | | written rescission of the election not to participate if he or | 18 | | she elects to participate in the self-directed retirement plan | 19 | | under subsection (d) of Section 2-167. A member who files the | 20 | | written rescission pursuant to this subsection may not receive | 21 | | credit for service as a member prior to the date of the | 22 | | rescission. | 23 | | (Source: P.A. 86-273; 87-1265.)
| 24 | | (40 ILCS 5/2-167 new) | 25 | | Sec. 2-167. Self-directed retirement plan. |
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| 1 | | (a) For the purposes of this Section: | 2 | | "Active participant" means a participant who is in | 3 | | active service in the System. | 4 | | "Consumer price index-u" means the index published by | 5 | | the Bureau of Labor Statistics of the United States | 6 | | Department of Labor that measures the average change in | 7 | | prices of goods and services purchased by all urban | 8 | | consumers, United States city average, all items, 1982-84 = | 9 | | 100. | 10 | | "Defined benefit plan" means the retirement plan | 11 | | available under this Article to Tier 1 or Tier 2 | 12 | | participants who have not made the election authorized | 13 | | under this Section. | 14 | | "Employer" means the State. | 15 | | "Pensionable salary" means the amount of salary used by | 16 | | the System to calculate the amount of an individual's | 17 | | retirement annuity. | 18 | | (b) On and after the effective date of this amendatory Act | 19 | | of the 100th General Assembly, a Tier 3 participant's | 20 | | participation in the System shall be limited to participation | 21 | | in the self-directed retirement plan established under | 22 | | subsection (d) of this Section. | 23 | | An active Tier 1 or Tier 2 participant of this System may | 24 | | elect to cease accruing benefits in the defined benefit plan | 25 | | and begin accruing benefits for future service in the | 26 | | self-directed retirement plan established under subsection |
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| 1 | | (d). The election to participate in the self-directed | 2 | | retirement plan is voluntary and irrevocable. | 3 | | For an active Tier 1 or Tier 2 participant who elects to | 4 | | participate in the self-directed retirement plan, all service | 5 | | credit under the System (including service under any | 6 | | participating system if the participant elects to use the | 7 | | reciprocal provisions of Article 20) shall be considered for | 8 | | purposes of vesting in the benefits provided prior to the | 9 | | effective date of this Section, but only service earned and | 10 | | contributions made before that effective date shall be | 11 | | considered in determining the amount of those benefits. In lieu | 12 | | of receiving any such benefits, an active Tier 1 or Tier 2 | 13 | | participant who elects to participate in the self-directed | 14 | | retirement plan may elect to have an account balance | 15 | | established in his or her self-directed retirement plan account | 16 | | in an amount equal to the amount of the contribution refund | 17 | | that the participant would be eligible to receive if he or she | 18 | | withdrew from service on the effective date of this Section and | 19 | | elected a refund of contributions, except that this | 20 | | hypothetical refund shall include interest at the effective | 21 | | rate for the respective years. The System shall make these | 22 | | transfers of assets to the self-directed plan as tax-free | 23 | | transfers in accordance with Internal Revenue Service | 24 | | guidelines. | 25 | | (c) The pensionable salary of an active participant shall | 26 | | be equal to the average final monthly salary of the |
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| 1 | | participant. For a participant who first becomes a participant | 2 | | of this System on or after the effective date of this | 3 | | amendatory Act of the 100th General Assembly, the average final | 4 | | monthly salary determined by dividing the total salary of the | 5 | | participant during the 96 consecutive months of service within | 6 | | the last 120 months of service in which the total compensation | 7 | | was the highest by the number of months of service in that | 8 | | period; however, the highest salary for annuity purposes may | 9 | | not exceed $106,800, except that that amount shall annually | 10 | | thereafter be increased by the lesser of (i) 3% of that amount, | 11 | | including all previous adjustments, or (ii) the annual | 12 | | unadjusted percentage increase (but not less than zero) in the | 13 | | consumer price index-u for the 12 months ending with the | 14 | | September preceding each November 1. The new amount resulting | 15 | | from each annual adjustment shall be determined by the Public | 16 | | Pension Division of the Department of Insurance and made | 17 | | available to the Board by November 1 of each year. | 18 | | (d) As soon as practicable after the effective date of this | 19 | | amendatory Act of the 100th General Assembly, the System shall | 20 | | establish a self-directed retirement plan that allows Tier 3 | 21 | | participants the opportunity to accumulate assets for | 22 | | retirement through a combination of employee and employer | 23 | | contributions that may be invested in mutual funds, collective | 24 | | investment funds, or other investment products and used to | 25 | | purchase annuity contracts, either fixed or variable or a | 26 | | combination thereof. The plan must be qualified under the |
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| 1 | | Internal Revenue Code of 1986. | 2 | | At any time after withdrawal from service, a participant in | 3 | | the self-directed plan shall be entitled to a benefit that is | 4 | | based on the account values attributable to his or her | 5 | | participant contributions and the employer contributions, as | 6 | | well as any investment returns attributable to those | 7 | | contributions. Upon a participant's first day of participation | 8 | | in the self-directed retirement plan, the participant becomes | 9 | | vested in his or her contributions to the self-directed | 10 | | retirement plan, the employer's contributions to the | 11 | | self-directed retirement plan, and the investment returns | 12 | | attributable to those contributions credited to his or her | 13 | | account. | 14 | | (e) All persons who begin to participate in this System on | 15 | | or after the effective date of this amendatory Act of the 100th | 16 | | General Assembly and any active Tier 1 or Tier 2 participant | 17 | | who makes the election provided in subsection (b) shall | 18 | | participate in the self-directed retirement plan established | 19 | | under subsection (d) and, in lieu of the contributions | 20 | | otherwise provided for in this Article, shall contribute 8% of | 21 | | salary to the plan. The employer of each of those participants | 22 | | shall contribute 7% of salary to that plan on behalf of the | 23 | | participant. | 24 | | (f) The provisions of this amendatory Act of the 100th | 25 | | General Assembly apply notwithstanding any other law, | 26 | | including Section 1-160 of this Code. If there is a conflict |
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| 1 | | between the provisions of this amendatory Act of the 100th | 2 | | General Assembly and any other law, the provisions of this | 3 | | Section shall control.
| 4 | | (40 ILCS 5/2-105.1 rep.) | 5 | | Section 10. The Illinois Pension Code is amended by | 6 | | repealing Section 2-105.1.
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INDEX
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Statutes amended in order of appearance
| | 3 | | 40 ILCS 5/2-105.3 new | | | 4 | | 40 ILCS 5/2-117 | from Ch. 108 1/2, par. 2-117 | | 5 | | 40 ILCS 5/2-167 new | | | 6 | | 40 ILCS 5/2-105.1 rep. | |
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