Full Text of HB3256 101st General Assembly
HB3256 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 HB3256 Introduced , by Rep. Dan Brady SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/15-135 | from Ch. 108 1/2, par. 15-135 | 40 ILCS 5/15-136 | from Ch. 108 1/2, par. 15-136 |
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Amends the State Universities Article of the Illinois Pension Code. Provides that a Tier 2 member is entitled to a retirement annuity upon written application if he or she has at least 10 years of service credit as a police officer, has attained age 55, and is otherwise eligible under the requirements of the Article. Provides that a Tier 2 member who has attained age 50, has at least 10 years of service credit as a police officer, and is otherwise eligible under the requirements of the Article may elect to receive a retirement annuity that is reduced by 6% for each year that member is under the age of 55. Effective immediately.
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| | FISCAL NOTE ACT MAY APPLY | | 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 | | Sections 15-135 and 15-136 as follows:
| 6 | | (40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
| 7 | | Sec. 15-135. Retirement annuities - Conditions.
| 8 | | (a) This subsection (a) applies only to a Tier 1 member. A | 9 | | participant who retires in one of the following specified years | 10 | | with
the specified amount of service is entitled to a | 11 | | retirement annuity at any age
under the retirement program | 12 | | applicable to the participant:
| 13 | | 35 years if retirement is in 1997 or before;
| 14 | | 34 years if retirement is in 1998;
| 15 | | 33 years if retirement is in 1999;
| 16 | | 32 years if retirement is in 2000;
| 17 | | 31 years if retirement is in 2001;
| 18 | | 30 years if retirement is in 2002 or later.
| 19 | | A participant with 8 or more years of service after | 20 | | September 1, 1941, is
entitled to a retirement annuity on or | 21 | | after attainment of age 55.
| 22 | | A participant with at least 5 but less than 8 years
of | 23 | | service after September 1, 1941, is entitled to a retirement |
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| 1 | | annuity on
or after attainment of age 62.
| 2 | | A participant who has at least 25 years of service in this | 3 | | system as a
police officer or firefighter is entitled to a | 4 | | retirement
annuity on or after the attainment of age 50, if | 5 | | Rule 4 of Section
15-136 is applicable to the participant.
| 6 | | (a-5) A Tier 2 member is entitled to a retirement annuity | 7 | | upon written application if he or she has attained age 67 and | 8 | | has at least 10 years of service credit and is otherwise | 9 | | eligible under the requirements of this Article. A Tier 2 | 10 | | member who has attained age 62 and has at least 10 years of | 11 | | service credit and is otherwise eligible under the requirements | 12 | | of this Article may elect to receive the lower retirement | 13 | | annuity provided in subsection (b-5) of Section 15-136 of this | 14 | | Article. | 15 | | (a-10) A Tier 2 member is entitled to a retirement annuity | 16 | | upon written application if he or she has at least 10 years of | 17 | | service credit as a police officer, has attained age 55, and is | 18 | | otherwise eligible under the requirements of this Article. A | 19 | | Tier 2 member who has attained age 50, has at least 10 years of | 20 | | service credit as a police officer, and is otherwise eligible | 21 | | under the requirements of this Article may elect to receive the | 22 | | lower retirement annuity provided in subsection (b-10) of | 23 | | Section 15-136. | 24 | | (b) The annuity payment period shall begin on the date | 25 | | specified by the
participant or the recipient of a disability | 26 | | retirement annuity submitting a written application. For a |
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| 1 | | participant, the date on which the annuity payment period | 2 | | begins shall not be prior
to termination of employment or more | 3 | | than one year before the application is
received by the board; | 4 | | however, if the participant is not an employee of an
employer | 5 | | participating in this System or in a participating system as | 6 | | defined
in Article 20 of this Code on April 1 of the calendar | 7 | | year next following
the calendar year in which the participant | 8 | | attains age 70 1/2, the annuity
payment period shall begin on | 9 | | that date regardless of whether an application
has been filed. | 10 | | For a recipient of a disability retirement annuity, the date on | 11 | | which the annuity payment period begins shall not be prior to | 12 | | the discontinuation of the disability retirement annuity under | 13 | | Section 15-153.2.
| 14 | | (c) An annuity is not payable if the amount provided under | 15 | | Section
15-136 is less than $10 per month.
| 16 | | (Source: P.A. 100-556, eff. 12-8-17.)
| 17 | | (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
| 18 | | (Text of Section WITHOUT the changes made by P.A. 98-599, | 19 | | which has been held unconstitutional)
| 20 | | Sec. 15-136. Retirement annuities - Amount. The provisions | 21 | | of this
Section 15-136 apply only to those participants who are | 22 | | participating in the
traditional benefit package or the | 23 | | portable benefit package and do not
apply to participants who | 24 | | are participating in the self-managed plan.
| 25 | | (a) The amount of a participant's retirement annuity, |
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| 1 | | expressed in the form
of a single-life annuity, shall be | 2 | | determined by whichever of the following
rules is applicable | 3 | | and provides the largest annuity:
| 4 | | Rule 1: The retirement annuity shall be 1.67% of final rate | 5 | | of earnings for
each of the first 10 years of service, 1.90% | 6 | | for each of the next 10 years of
service, 2.10% for each year | 7 | | of service in excess of 20 but not exceeding 30,
and 2.30% for | 8 | | each year in excess of 30; or for persons who retire on or
| 9 | | after January 1, 1998, 2.2% of the final rate of earnings for | 10 | | each year of
service.
| 11 | | Rule 2: The retirement annuity shall be the sum of the | 12 | | following,
determined from amounts credited to the participant | 13 | | in accordance with the
actuarial tables and the effective rate | 14 | | of interest in effect at the
time the retirement annuity | 15 | | begins:
| 16 | | (i) the normal annuity which can be provided on an | 17 | | actuarially
equivalent basis, by the accumulated normal | 18 | | contributions as of
the date the annuity begins;
| 19 | | (ii) an annuity from employer contributions of an | 20 | | amount equal to that
which can be provided on an | 21 | | actuarially equivalent basis from the accumulated
normal | 22 | | contributions made by the participant under Section | 23 | | 15-113.6 and Section
15-113.7 plus 1.4 times all other | 24 | | accumulated normal contributions made by
the participant; | 25 | | and
| 26 | | (iii) the annuity that can be provided on an |
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| 1 | | actuarially equivalent basis
from the entire contribution | 2 | | made by the participant under Section 15-113.3.
| 3 | | With respect to a police officer or firefighter who retires | 4 | | on or after
August 14, 1998, the accumulated normal | 5 | | contributions taken into account under
clauses (i) and (ii) of | 6 | | this Rule 2 shall include the additional normal
contributions | 7 | | made by the police officer or firefighter under Section
| 8 | | 15-157(a).
| 9 | | The amount of a retirement annuity calculated under this | 10 | | Rule 2 shall
be computed solely on the basis of the | 11 | | participant's accumulated normal
contributions, as specified | 12 | | in this Rule and defined in Section 15-116.
Neither an employee | 13 | | or employer contribution for early retirement under
Section | 14 | | 15-136.2 nor any other employer contribution shall be used in | 15 | | the
calculation of the amount of a retirement annuity under | 16 | | this Rule 2.
| 17 | | This amendatory Act of the 91st General Assembly is a | 18 | | clarification of
existing law and applies to every participant | 19 | | and annuitant without regard to
whether status as an employee | 20 | | terminates before the effective date of this
amendatory Act.
| 21 | | This Rule 2 does not apply to a person who first becomes an | 22 | | employee under this Article on or after July 1, 2005.
| 23 | | Rule 3: The retirement annuity of a participant who is | 24 | | employed
at least one-half time during the period on which his | 25 | | or her final rate of
earnings is based, shall be equal to the | 26 | | participant's years of service
not to exceed 30, multiplied by |
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| 1 | | (1) $96 if the participant's final rate
of earnings is less | 2 | | than $3,500, (2) $108 if the final rate of earnings is
at least | 3 | | $3,500 but less than $4,500, (3) $120 if the final rate of | 4 | | earnings
is at least $4,500 but less than $5,500, (4) $132 if | 5 | | the final rate
of earnings is at least $5,500 but less than | 6 | | $6,500, (5)
$144 if the final rate of earnings is at least | 7 | | $6,500 but less than
$7,500, (6) $156 if the final rate of | 8 | | earnings is at least $7,500 but less
than $8,500, (7) $168 if | 9 | | the final rate of earnings is at least $8,500 but
less than | 10 | | $9,500, and (8) $180 if the final rate of earnings is $9,500 or
| 11 | | more, except that the annuity for those persons having made an | 12 | | election under
Section 15-154(a-1) shall be calculated and | 13 | | payable under the portable
retirement benefit program pursuant | 14 | | to the provisions of Section 15-136.4.
| 15 | | Rule 4: A participant who is at least age 50 and has 25 or | 16 | | more years of
service as a police officer or firefighter, and a | 17 | | participant who is age 55 or
over and has at least 20 but less | 18 | | than 25 years of service as a police officer
or firefighter, | 19 | | shall be entitled to a retirement annuity of 2 1/4% of the
| 20 | | final rate of earnings for each of the first 10 years of | 21 | | service as a police
officer or firefighter, 2 1/2% for each of | 22 | | the next 10 years of service as a
police officer or | 23 | | firefighter, and 2 3/4% for each year of service as a police
| 24 | | officer or firefighter in excess of 20. The retirement annuity | 25 | | for all other
service shall be computed under Rule 1. A Tier 2 | 26 | | member is eligible for a retirement annuity calculated under |
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| 1 | | Rule 4 only if that Tier 2 member meets the service | 2 | | requirements for that benefit calculation as prescribed under | 3 | | this Rule 4 in addition to the applicable age requirement under | 4 | | subsection (a-5) of Section 15-135.
| 5 | | For purposes of this Rule 4, a participant's service as a | 6 | | firefighter
shall also include the following:
| 7 | | (i) service that is performed while the person is an | 8 | | employee under
subsection (h) of Section 15-107; and
| 9 | | (ii) in the case of an individual who was a | 10 | | participating employee
employed in the fire department of | 11 | | the University of Illinois's
Champaign-Urbana campus | 12 | | immediately prior to the elimination of that fire
| 13 | | department and who immediately after the elimination of | 14 | | that fire department
transferred to another job with the | 15 | | University of Illinois, service performed
as an employee of | 16 | | the University of Illinois in a position other than police
| 17 | | officer or firefighter, from the date of that transfer | 18 | | until the employee's
next termination of service with the | 19 | | University of Illinois.
| 20 | | (b) For a Tier 1 member, the retirement annuity provided | 21 | | under Rules 1 and 3 above shall be
reduced by 1/2 of 1% for each | 22 | | month the participant is under age 60 at the
time of | 23 | | retirement. However, this reduction shall not apply in the | 24 | | following
cases:
| 25 | | (1) For a disabled participant whose disability | 26 | | benefits have been
discontinued because he or she has |
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| 1 | | exhausted eligibility for disability
benefits under clause | 2 | | (6) of Section 15-152;
| 3 | | (2) For a participant who has at least the number of | 4 | | years of service
required to retire at any age under | 5 | | subsection (a) of Section 15-135; or
| 6 | | (3) For that portion of a retirement annuity which has | 7 | | been provided on
account of service of the participant | 8 | | during periods when he or she performed
the duties of a | 9 | | police officer or firefighter, if these duties were | 10 | | performed
for at least 5 years immediately preceding the | 11 | | date the retirement annuity
is to begin.
| 12 | | (b-5) The retirement annuity of a Tier 2 member who is | 13 | | retiring after attaining age 62 with at least 10 years of | 14 | | service credit shall be reduced by 1/2 of 1% for each full | 15 | | month that the member's age is under age 67. | 16 | | (b-10) The retirement annuity of a Tier 2 member who is | 17 | | retiring after attaining age 50 with at least 10 years of | 18 | | service credit as a police officer shall be reduced by 6% for | 19 | | each year that the member's age is under age 55. | 20 | | (c) The maximum retirement annuity provided under Rules 1, | 21 | | 2, 4,
and 5
shall be the lesser of (1) the annual limit of | 22 | | benefits as specified in
Section 415 of the Internal Revenue | 23 | | Code of 1986, as such Section may be
amended from time to time | 24 | | and as such benefit limits shall be adjusted by
the | 25 | | Commissioner of Internal Revenue, and (2) 80% of final rate of
| 26 | | earnings.
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| 1 | | (d) A Tier 1 member whose status as an employee terminates | 2 | | after August 14,
1969 shall receive automatic increases in his | 3 | | or her retirement annuity as
follows:
| 4 | | Effective January 1 immediately following the date the | 5 | | retirement annuity
begins, the annuitant shall receive an | 6 | | increase in his or her monthly
retirement annuity of 0.125% of | 7 | | the monthly retirement annuity provided under
Rule 1, Rule 2, | 8 | | Rule 3, or Rule 4 contained in this
Section, multiplied by
the | 9 | | number of full months which elapsed from the date the | 10 | | retirement annuity
payments began to January 1, 1972, plus | 11 | | 0.1667% of such annuity, multiplied by
the number of full | 12 | | months which elapsed from January 1, 1972, or the date the
| 13 | | retirement annuity payments began, whichever is later, to | 14 | | January 1, 1978, plus
0.25% of such annuity multiplied by the | 15 | | number of full months which elapsed
from January 1, 1978, or | 16 | | the date the retirement annuity payments began,
whichever is | 17 | | later, to the effective date of the increase.
| 18 | | The annuitant shall receive an increase in his or her | 19 | | monthly retirement
annuity on each January 1 thereafter during | 20 | | the annuitant's life of 3% of
the monthly annuity provided | 21 | | under Rule 1, Rule 2, Rule 3, or Rule 4 contained
in this | 22 | | Section. The change made under this subsection by P.A. 81-970 | 23 | | is
effective January 1, 1980 and applies to each annuitant | 24 | | whose status as
an employee terminates before or after that | 25 | | date.
| 26 | | Beginning January 1, 1990, all automatic annual increases |
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| 1 | | payable under
this Section shall be calculated as a percentage | 2 | | of the total annuity
payable at the time of the increase, | 3 | | including all increases previously
granted under this Article.
| 4 | | The change made in this subsection by P.A. 85-1008 is | 5 | | effective January
26, 1988, and is applicable without regard to | 6 | | whether status as an employee
terminated before that date.
| 7 | | (d-5) A retirement annuity of a Tier 2 member shall receive | 8 | | annual increases on the January 1 occurring either on or after | 9 | | the attainment of age 67 or the first anniversary of the | 10 | | annuity start date, whichever is later. Each annual increase | 11 | | shall be calculated at 3% or one half the annual unadjusted | 12 | | percentage increase (but not less than zero) in the consumer | 13 | | price index-u for the 12 months ending with the September | 14 | | preceding each November 1, whichever is less, of the originally | 15 | | granted retirement annuity. If the annual unadjusted | 16 | | percentage change in the consumer price index-u for the 12 | 17 | | months ending with the September preceding each November 1 is | 18 | | zero or there is a decrease, then the annuity shall not be | 19 | | increased. | 20 | | (e) If, on January 1, 1987, or the date the retirement | 21 | | annuity payment
period begins, whichever is later, the sum of | 22 | | the retirement annuity
provided under Rule 1 or Rule 2 of this | 23 | | Section
and the automatic annual increases provided under the | 24 | | preceding subsection
or Section 15-136.1, amounts to less than | 25 | | the retirement
annuity which would be provided by Rule 3, the | 26 | | retirement
annuity shall be increased as of January 1, 1987, or |
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| 1 | | the date the
retirement annuity payment period begins, | 2 | | whichever is later, to the amount
which would be provided by | 3 | | Rule 3 of this Section. Such increased
amount shall be | 4 | | considered as the retirement annuity in determining
benefits | 5 | | provided under other Sections of this Article. This paragraph
| 6 | | applies without regard to whether status as an employee | 7 | | terminated before the
effective date of this amendatory Act of | 8 | | 1987, provided that the annuitant was
employed at least | 9 | | one-half time during the period on which the final rate of
| 10 | | earnings was based.
| 11 | | (f) A participant is entitled to such additional annuity as | 12 | | may be provided
on an actuarially equivalent basis, by any | 13 | | accumulated
additional contributions to his or her credit. | 14 | | However,
the additional contributions made by the participant | 15 | | toward the automatic
increases in annuity provided under this | 16 | | Section shall not be taken into
account in determining the | 17 | | amount of such additional annuity.
| 18 | | (g) If, (1) by law, a function of a governmental unit, as | 19 | | defined by Section
20-107 of this Code, is transferred in whole | 20 | | or in part to an employer, and (2)
a participant transfers | 21 | | employment from such governmental unit to such employer
within | 22 | | 6 months after the transfer of the function, and (3) the sum of | 23 | | (A) the
annuity payable to the participant under Rule 1, 2, or | 24 | | 3 of this Section (B)
all proportional annuities payable to the | 25 | | participant by all other retirement
systems covered by Article | 26 | | 20, and (C) the initial primary insurance amount to
which the |
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| 1 | | participant is entitled under the Social Security Act, is less | 2 | | than
the retirement annuity which would have been payable if | 3 | | all of the
participant's pension credits validated under | 4 | | Section 20-109 had been validated
under this system, a | 5 | | supplemental annuity equal to the difference in such
amounts | 6 | | shall be payable to the participant.
| 7 | | (h) On January 1, 1981, an annuitant who was receiving
a | 8 | | retirement annuity on or before January 1, 1971 shall have his | 9 | | or her
retirement annuity then being paid increased $1 per | 10 | | month for
each year of creditable service. On January 1, 1982, | 11 | | an annuitant whose
retirement annuity began on or before | 12 | | January 1, 1977, shall have his or her
retirement annuity then | 13 | | being paid increased $1 per month for each year of
creditable | 14 | | service.
| 15 | | (i) On January 1, 1987, any annuitant whose retirement | 16 | | annuity began on or
before January 1, 1977, shall have the | 17 | | monthly retirement annuity increased by
an amount equal to 8˘ | 18 | | per year of creditable service times the number of years
that | 19 | | have elapsed since the annuity began.
| 20 | | (Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12; | 21 | | 98-92, eff. 7-16-13.)
| 22 | | Section 99. Effective date. This Act takes effect upon | 23 | | becoming law.
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