Full Text of HB3707 100th General Assembly
HB3707 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 HB3707 Introduced , by Rep. Sheri Jesiel SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/2-105.3 new | | 40 ILCS 5/2-167 new | | 40 ILCS 5/2-105.1 rep. | |
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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.
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| | FISCAL NOTE ACT MAY APPLY | | PENSION IMPACT NOTE ACT MAY APPLY |
| | A BILL FOR |
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| | | HB3707 | | LRB100 11379 RPS 21776 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 adding | 5 | | Sections 2-105.3 and 2-167 as follows: | 6 | | (40 ILCS 5/2-105.3 new) | 7 | | Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier | 8 | | 3 participant. | 9 | | "Tier 1 participant": A participant who first became a | 10 | | participant before January 1, 2011. | 11 | | In the case of a Tier 1 participant who elects to | 12 | | participate in the self-directed retirement plan under Section | 13 | | 2-167, that participant shall be deemed a Tier 1 participant | 14 | | only with respect to service performed or established before | 15 | | the effective date of that election. | 16 | | "Tier 2 participant": A participant who first became a | 17 | | participant on or after January 1, 2011 and before the | 18 | | effective date of this amendatory Act of the 100th General | 19 | | Assembly. | 20 | | In the case of a Tier 2 participant who elects to | 21 | | participate in the self-directed retirement plan under Section | 22 | | 2-167, that participant shall be deemed a Tier 2 participant | 23 | | only with respect to service performed or established before |
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| 1 | | the effective date of that election. | 2 | | "Tier 3 participant": A participant who first becomes a | 3 | | participant on or after the effective date of this amendatory | 4 | | Act of the 100th General Assembly; or a Tier 1 or Tier 2 | 5 | | participant who elects to participate in the self-directed | 6 | | retirement under Section 2-167 of this Code, but only with | 7 | | respect to service performed or established on or after the | 8 | | effective date of that election. | 9 | | (40 ILCS 5/2-167 new) | 10 | | Sec. 2-167. Self-directed retirement plan. | 11 | | (a) For the purposes of this Section: | 12 | | "Active participant" means a participant who is in | 13 | | active service in the System. | 14 | | "Consumer price index-u" means the index published by | 15 | | the Bureau of Labor Statistics of the United States | 16 | | Department of Labor that measures the average change in | 17 | | prices of goods and services purchased by all urban | 18 | | consumers, United States city average, all items, 1982-84 = | 19 | | 100. | 20 | | "Defined benefit plan" means the retirement plan | 21 | | available under this Article to Tier 1 or Tier 2 | 22 | | participants who have not made the election authorized | 23 | | under this Section. | 24 | | "Employer" means the State. | 25 | | "Pensionable salary" means the amount of salary used by |
| | | HB3707 | - 3 - | LRB100 11379 RPS 21776 b |
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| 1 | | the System to calculate the amount of an individual's | 2 | | retirement annuity. | 3 | | (b) On and after the effective date of this amendatory Act | 4 | | of the 100th General Assembly, a Tier 3 participant's | 5 | | participation in the System shall be limited to participation | 6 | | in the self-directed retirement plan established under | 7 | | subsection (d) of this Section. | 8 | | An active Tier 1 or Tier 2 participant of this System may | 9 | | elect to cease accruing benefits in the defined benefit plan | 10 | | and begin accruing benefits for future service in the | 11 | | self-directed retirement plan established under subsection | 12 | | (d). The election to participate in the self-directed | 13 | | retirement plan is voluntary and irrevocable. | 14 | | For an active Tier 1 or Tier 2 participant who elects to | 15 | | participate in the self-directed retirement plan, all service | 16 | | credit under the System (including service under any | 17 | | participating system if the participant elects to use the | 18 | | reciprocal provisions of Article 20) shall be considered for | 19 | | purposes of vesting in the benefits provided prior to the | 20 | | effective date of this Section, but only service earned and | 21 | | contributions made before that effective date shall be | 22 | | considered in determining the amount of those benefits. In lieu | 23 | | of receiving any such benefits, an active Tier 1 or Tier 2 | 24 | | participant who elects to participate in the self-directed | 25 | | retirement plan may elect to have an account balance | 26 | | established in his or her self-directed retirement plan account |
| | | HB3707 | - 4 - | LRB100 11379 RPS 21776 b |
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| 1 | | in an amount equal to the amount of the contribution refund | 2 | | that the participant would be eligible to receive if he or she | 3 | | withdrew from service on the effective date of this Section and | 4 | | elected a refund of contributions, except that this | 5 | | hypothetical refund shall include interest at the effective | 6 | | rate for the respective years. The System shall make these | 7 | | transfers of assets to the self-directed plan as tax-free | 8 | | transfers in accordance with Internal Revenue Service | 9 | | guidelines. | 10 | | (c) The pensionable salary of an active participant shall | 11 | | be equal to the average final monthly salary of the | 12 | | participant. For a participant who first becomes a participant | 13 | | of this System on or after the effective date of this | 14 | | amendatory Act of the 100th General Assembly, the average final | 15 | | monthly salary determined by dividing the total salary of the | 16 | | participant during the 96 consecutive months of service within | 17 | | the last 120 months of service in which the total compensation | 18 | | was the highest by the number of months of service in that | 19 | | period; however, the highest salary for annuity purposes may | 20 | | not exceed $106,800, except that that amount shall annually | 21 | | thereafter be increased by the lesser of (i) 3% of that amount, | 22 | | including all previous adjustments, or (ii) the annual | 23 | | unadjusted percentage increase (but not less than zero) in the | 24 | | consumer price index-u for the 12 months ending with the | 25 | | September preceding each November 1. The new amount resulting | 26 | | from each annual adjustment shall be determined by the Public |
| | | HB3707 | - 5 - | LRB100 11379 RPS 21776 b |
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| 1 | | Pension Division of the Department of Insurance and made | 2 | | available to the Board by November 1 of each year. | 3 | | (d) As soon as practicable after the effective date of this | 4 | | amendatory Act of the 100th General Assembly, the System shall | 5 | | establish a self-directed retirement plan that allows Tier 3 | 6 | | participants the opportunity to accumulate assets for | 7 | | retirement through a combination of employee and employer | 8 | | contributions that may be invested in mutual funds, collective | 9 | | investment funds, or other investment products and used to | 10 | | purchase annuity contracts, either fixed or variable or a | 11 | | combination thereof. The plan must be qualified under the | 12 | | Internal Revenue Code of 1986. | 13 | | At any time after withdrawal from service, a participant in | 14 | | the self-directed plan shall be entitled to a benefit that is | 15 | | based on the account values attributable to his or her | 16 | | participant contributions and the employer contributions, as | 17 | | well as any investment returns attributable to those | 18 | | contributions. Upon a participant's first day of participation | 19 | | in the self-directed retirement plan, the participant becomes | 20 | | vested in his or her contributions to the self-directed | 21 | | retirement plan, the employer's contributions to the | 22 | | self-directed retirement plan, and the investment returns | 23 | | attributable to those contributions credited to his or her | 24 | | account. | 25 | | (e) All persons who begin to participate in this System on | 26 | | or after the effective date of this amendatory Act of the 100th |
| | | HB3707 | - 6 - | LRB100 11379 RPS 21776 b |
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| 1 | | General Assembly and any active Tier 1 or Tier 2 participant | 2 | | who makes the election provided in subsection (b) shall | 3 | | participate in the self-directed retirement plan established | 4 | | under subsection (d) and, in lieu of the contributions | 5 | | otherwise provided for in this Article, shall contribute 8% of | 6 | | salary to the plan. The employer of each of those participants | 7 | | shall contribute 7% of salary to that plan on behalf of the | 8 | | participant. | 9 | | (f) The provisions of this amendatory Act of the 100th | 10 | | General Assembly apply notwithstanding any other law, | 11 | | including Section 1-160 of this Code. If there is a conflict | 12 | | between the provisions of this amendatory Act of the 100th | 13 | | General Assembly and any other law, the provisions of this | 14 | | Section shall control.
| 15 | | (40 ILCS 5/2-105.1 rep.) | 16 | | Section 10. The Illinois Pension Code is amended by | 17 | | repealing Section 2-105.1.
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