Full Text of SB3786 103rd General Assembly
SB3786 103RD GENERAL ASSEMBLY | | | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 SB3786 Introduced 2/9/2024, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED: | | 40 ILCS 5/7-172 | from Ch. 108 1/2, par. 7-172 |
| Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. In a provision requiring a participating municipality or participating instrumentality to pay an additional contribution to the Fund for certain earnings increases above 6% or 1.5 times the annual increase in the consumer price index-u, whichever is greater, provides that the payments must be concluded within 7 years (instead of 3 years) after receipt of the bill by the participating municipality or participating instrumentality. Effective immediately. |
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| | A BILL FOR |
| | | | SB3786 | | LRB103 38767 RPS 68904 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 | 5 | | changing Section 7-172 as follows: | 6 | | (40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172) | 7 | | Sec. 7-172. Contributions by participating municipalities | 8 | | and participating instrumentalities. | 9 | | (a) Each participating municipality and each participating | 10 | | instrumentality shall make payment to the fund as follows: | 11 | | 1. municipality contributions in an amount determined | 12 | | by applying the municipality contribution rate to each | 13 | | payment of earnings paid to each of its participating | 14 | | employees; | 15 | | 2. an amount equal to the employee contributions | 16 | | provided by paragraph (a) of Section 7-173, whether or not | 17 | | the employee contributions are withheld as permitted by | 18 | | that Section; | 19 | | 3. all accounts receivable, together with interest | 20 | | charged thereon, as provided in Section 7-209, and any | 21 | | amounts due under subsection (a-5) of Section 7-144; | 22 | | 4. if it has no participating employees with current | 23 | | earnings, an amount payable which, over a closed period of |
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| 1 | | 20 years for participating municipalities and 10 years for | 2 | | participating instrumentalities, will amortize, at the | 3 | | effective rate for that year, any unfunded obligation. The | 4 | | unfunded obligation shall be computed as provided in | 5 | | paragraph 2 of subsection (b); | 6 | | 5. if it has fewer than 7 participating employees or a | 7 | | negative balance in its municipality reserve, the greater | 8 | | of (A) an amount payable that, over a period of 20 years, | 9 | | will amortize at the effective rate for that year any | 10 | | unfunded obligation, computed as provided in paragraph 2 | 11 | | of subsection (b) or (B) the amount required by paragraph | 12 | | 1 of this subsection (a). | 13 | | (b) A separate municipality contribution rate shall be | 14 | | determined for each calendar year for all participating | 15 | | municipalities together with all instrumentalities thereof. | 16 | | The municipality contribution rate shall be determined for | 17 | | participating instrumentalities as if they were participating | 18 | | municipalities. The municipality contribution rate shall be | 19 | | the sum of the following percentages: | 20 | | 1. The percentage of earnings of all the participating | 21 | | employees of all participating municipalities and | 22 | | participating instrumentalities which, if paid over the | 23 | | entire period of their service, will be sufficient when | 24 | | combined with all employee contributions available for the | 25 | | payment of benefits, to provide all annuities for | 26 | | participating employees, and the $3,000 death benefit |
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| 1 | | payable under Sections 7-158 and 7-164, such percentage to | 2 | | be known as the normal cost rate. | 3 | | 2. The percentage of earnings of the participating | 4 | | employees of each participating municipality and | 5 | | participating instrumentalities necessary to adjust for | 6 | | the difference between the present value of all benefits, | 7 | | excluding temporary and total and permanent disability and | 8 | | death benefits, to be provided for its participating | 9 | | employees and the sum of its accumulated municipality | 10 | | contributions and the accumulated employee contributions | 11 | | and the present value of expected future employee and | 12 | | municipality contributions pursuant to subparagraph 1 of | 13 | | this paragraph (b). This adjustment shall be spread over a | 14 | | period determined by the Board, not to exceed 30 years for | 15 | | participating municipalities or 10 years for participating | 16 | | instrumentalities. | 17 | | 3. The percentage of earnings of the participating | 18 | | employees of all municipalities and participating | 19 | | instrumentalities necessary to provide the present value | 20 | | of all temporary and total and permanent disability | 21 | | benefits granted during the most recent year for which | 22 | | information is available. | 23 | | 4. The percentage of earnings of the participating | 24 | | employees of all participating municipalities and | 25 | | participating instrumentalities necessary to provide the | 26 | | present value of the net single sum death benefits |
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| 1 | | expected to become payable from the reserve established | 2 | | under Section 7-206 during the year for which this rate is | 3 | | fixed. | 4 | | 5. The percentage of earnings necessary to meet any | 5 | | deficiency arising in the Terminated Municipality Reserve. | 6 | | (c) A separate municipality contribution rate shall be | 7 | | computed for each participating municipality or participating | 8 | | instrumentality for its sheriff's law enforcement employees. | 9 | | A separate municipality contribution rate shall be | 10 | | computed for the sheriff's law enforcement employees of each | 11 | | forest preserve district that elects to have such employees. | 12 | | For the period from January 1, 1986 to December 31, 1986, such | 13 | | rate shall be the forest preserve district's regular rate plus | 14 | | 2%. | 15 | | In the event that the Board determines that there is an | 16 | | actuarial deficiency in the account of any municipality with | 17 | | respect to a person who has elected to participate in the Fund | 18 | | under Section 3-109.1 of this Code, the Board may adjust the | 19 | | municipality's contribution rate so as to make up that | 20 | | deficiency over such reasonable period of time as the Board | 21 | | may determine. | 22 | | (d) The Board may establish a separate municipality | 23 | | contribution rate for all employees who are program | 24 | | participants employed under the federal Comprehensive | 25 | | Employment Training Act by all of the participating | 26 | | municipalities and instrumentalities. The Board may also |
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| 1 | | provide that, in lieu of a separate municipality rate for | 2 | | these employees, a portion of the municipality contributions | 3 | | for such program participants shall be refunded or an extra | 4 | | charge assessed so that the amount of municipality | 5 | | contributions retained or received by the fund for all CETA | 6 | | program participants shall be an amount equal to that which | 7 | | would be provided by the separate municipality contribution | 8 | | rate for all such program participants. Refunds shall be made | 9 | | to prime sponsors of programs upon submission of a claim | 10 | | therefor and extra charges shall be assessed to participating | 11 | | municipalities and instrumentalities. In establishing the | 12 | | municipality contribution rate as provided in paragraph (b) of | 13 | | this Section, the use of a separate municipality contribution | 14 | | rate for program participants or the refund of a portion of the | 15 | | municipality contributions, as the case may be, may be | 16 | | considered. | 17 | | (e) Computations of municipality contribution rates for | 18 | | the following calendar year shall be made prior to the | 19 | | beginning of each year, from the information available at the | 20 | | time the computations are made, and on the assumption that the | 21 | | employees in each participating municipality or participating | 22 | | instrumentality at such time will continue in service until | 23 | | the end of such calendar year at their respective rates of | 24 | | earnings at such time. | 25 | | (f) Any municipality which is the recipient of State | 26 | | allocations representing that municipality's contributions for |
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| 1 | | retirement annuity purposes on behalf of its employees as | 2 | | provided in Section 12-21.16 of the Illinois Public Aid Code | 3 | | shall pay the allocations so received to the Board for such | 4 | | purpose. Estimates of State allocations to be received during | 5 | | any taxable year shall be considered in the determination of | 6 | | the municipality's tax rate for that year under Section 7-171. | 7 | | If a special tax is levied under Section 7-171, none of the | 8 | | proceeds may be used to reimburse the municipality for the | 9 | | amount of State allocations received and paid to the Board. | 10 | | Any multiple-county or consolidated health department which | 11 | | receives contributions from a county under Section 11.2 of "An | 12 | | Act in relation to establishment and maintenance of county and | 13 | | multiple-county health departments", approved July 9, 1943, as | 14 | | amended, or distributions under Section 3 of the Department of | 15 | | Public Health Act, shall use these only for municipality | 16 | | contributions by the health department. | 17 | | (g) Municipality contributions for the several purposes | 18 | | specified shall, for township treasurers and employees in the | 19 | | offices of the township treasurers who meet the qualifying | 20 | | conditions for coverage hereunder, be allocated among the | 21 | | several school districts and parts of school districts | 22 | | serviced by such treasurers and employees in the proportion | 23 | | which the amount of school funds of each district or part of a | 24 | | district handled by the treasurer bears to the total amount of | 25 | | all school funds handled by the treasurer. | 26 | | From the funds subject to allocation among districts and |
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| 1 | | parts of districts pursuant to the School Code, the trustees | 2 | | shall withhold the proportionate share of the liability for | 3 | | municipality contributions imposed upon such districts by this | 4 | | Section, in respect to such township treasurers and employees | 5 | | and remit the same to the Board. | 6 | | The municipality contribution rate for an educational | 7 | | service center shall initially be the same rate for each year | 8 | | as the regional office of education or school district which | 9 | | serves as its administrative agent. When actuarial data become | 10 | | available, a separate rate shall be established as provided in | 11 | | subparagraph (i) of this Section. | 12 | | The municipality contribution rate for a public agency, | 13 | | other than a vocational education cooperative, formed under | 14 | | the Intergovernmental Cooperation Act shall initially be the | 15 | | average rate for the municipalities which are parties to the | 16 | | intergovernmental agreement. When actuarial data become | 17 | | available, a separate rate shall be established as provided in | 18 | | subparagraph (i) of this Section. | 19 | | (h) Each participating municipality and participating | 20 | | instrumentality shall make the contributions in the amounts | 21 | | provided in this Section in the manner prescribed from time to | 22 | | time by the Board and all such contributions shall be | 23 | | obligations of the respective participating municipalities and | 24 | | participating instrumentalities to this fund. The failure to | 25 | | deduct any employee contributions shall not relieve the | 26 | | participating municipality or participating instrumentality of |
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| 1 | | its obligation to this fund. Delinquent payments of | 2 | | contributions due under this Section may, with interest, be | 3 | | recovered by civil action against the participating | 4 | | municipalities or participating instrumentalities. | 5 | | Municipality contributions, other than the amount necessary | 6 | | for employee contributions, for periods of service by | 7 | | employees from whose earnings no deductions were made for | 8 | | employee contributions to the fund, may be charged to the | 9 | | municipality reserve for the municipality or participating | 10 | | instrumentality. | 11 | | (i) Contributions by participating instrumentalities shall | 12 | | be determined as provided herein except that the percentage | 13 | | derived under subparagraph 2 of paragraph (b) of this Section, | 14 | | and the amount payable under subparagraph 4 of paragraph (a) | 15 | | of this Section, shall be based on an amortization period of 10 | 16 | | years. | 17 | | (j) Notwithstanding the other provisions of this Section, | 18 | | the additional unfunded liability accruing as a result of | 19 | | Public Act 94-712 shall be amortized over a period of 30 years | 20 | | beginning on January 1 of the second calendar year following | 21 | | the calendar year in which Public Act 94-712 takes effect, | 22 | | except that the employer may provide for a longer amortization | 23 | | period by adopting a resolution or ordinance specifying a | 24 | | 35-year or 40-year period and submitting a certified copy of | 25 | | the ordinance or resolution to the fund no later than June 1 of | 26 | | the calendar year following the calendar year in which Public |
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| 1 | | Act 94-712 takes effect. | 2 | | (k) If the amount of a participating employee's reported | 3 | | earnings for any of the 12-month periods used to determine the | 4 | | final rate of earnings exceeds the employee's 12-month | 5 | | reported earnings with the same employer for the previous year | 6 | | by the greater of 6% or 1.5 times the annual increase in the | 7 | | Consumer Price Index-U, as established by the United States | 8 | | Department of Labor for the preceding September, the | 9 | | participating municipality or participating instrumentality | 10 | | that paid those earnings shall pay to the Fund, in addition to | 11 | | any other contributions required under this Article, the | 12 | | present value of the increase in the pension resulting from | 13 | | the portion of the increase in reported earnings that is in | 14 | | excess of the greater of 6% or 1.5 times the annual increase in | 15 | | the Consumer Price Index-U, as determined by the Fund. This | 16 | | present value shall be computed on the basis of the actuarial | 17 | | assumptions and tables used in the most recent actuarial | 18 | | valuation of the Fund that is available at the time of the | 19 | | computation. | 20 | | Whenever it determines that a payment is or may be | 21 | | required under this subsection (k), the fund shall calculate | 22 | | the amount of the payment and bill the participating | 23 | | municipality or participating instrumentality for that amount. | 24 | | The bill shall specify the calculations used to determine the | 25 | | amount due. If the participating municipality or participating | 26 | | instrumentality disputes the amount of the bill, it may, |
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| 1 | | within 30 days after receipt of the bill, apply to the fund in | 2 | | writing for a recalculation. The application must specify in | 3 | | detail the grounds of the dispute. Upon receiving a timely | 4 | | application for recalculation, the fund shall review the | 5 | | application and, if appropriate, recalculate the amount due. | 6 | | The participating municipality and participating | 7 | | instrumentality contributions required under this subsection | 8 | | (k) may be paid in the form of a lump sum within 90 days after | 9 | | receipt of the bill. If the participating municipality and | 10 | | participating instrumentality contributions are not paid | 11 | | within 90 days after receipt of the bill, then interest will be | 12 | | charged at a rate equal to the fund's annual actuarially | 13 | | assumed rate of return on investment compounded annually from | 14 | | the 91st day after receipt of the bill. Payments must be | 15 | | concluded within 7 3 years after receipt of the bill by the | 16 | | participating municipality or participating instrumentality. | 17 | | When assessing payment for any amount due under this | 18 | | subsection (k), the fund shall exclude earnings increases | 19 | | resulting from overload or overtime earnings. | 20 | | When assessing payment for any amount due under this | 21 | | subsection (k), the fund shall exclude earnings increases | 22 | | resulting from payments for unused vacation time, but only for | 23 | | payments for unused vacation time made in the final 3 months of | 24 | | the final rate of earnings period. | 25 | | When assessing payment for any amount due under this | 26 | | subsection (k), the fund shall also exclude earnings increases |
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| 1 | | attributable to standard employment promotions resulting in | 2 | | increased responsibility and workload. | 3 | | When assessing payment for any amount due under this | 4 | | subsection (k), the fund shall exclude reportable earnings | 5 | | increases resulting from periods where the member was paid | 6 | | through workers' compensation. | 7 | | This subsection (k) does not apply to earnings increases | 8 | | due to amounts paid as required by federal or State law or | 9 | | court mandate or to earnings increases due to the | 10 | | participating employee returning to the regular number of | 11 | | hours worked after having a temporary reduction in the number | 12 | | of hours worked. | 13 | | This subsection (k) does not apply to earnings increases | 14 | | paid to individuals under contracts or collective bargaining | 15 | | agreements entered into, amended, or renewed before January 1, | 16 | | 2012 (the effective date of Public Act 97-609), earnings | 17 | | increases paid to members who are 10 years or more from | 18 | | retirement eligibility, or earnings increases resulting from | 19 | | an increase in the number of hours required to be worked. | 20 | | When assessing payment for any amount due under this | 21 | | subsection (k), the fund shall also exclude earnings | 22 | | attributable to personnel policies adopted before January 1, | 23 | | 2012 (the effective date of Public Act 97-609) as long as those | 24 | | policies are not applicable to employees who begin service on | 25 | | or after January 1, 2012 (the effective date of Public Act | 26 | | 97-609). |
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| 1 | | The change made to this Section by Public Act 100-139 is a | 2 | | clarification of existing law and is intended to be | 3 | | retroactive to January 1, 2012 (the effective date of Public | 4 | | Act 97-609). | 5 | | (Source: P.A. 102-849, eff. 5-13-22; 103-464, eff. 8-4-23.) | 6 | | Section 99. Effective date. This Act takes effect upon | 7 | | becoming law. |
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