Full Text of HB5506 96th General Assembly
HB5506 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 HB5506
Introduced 2/5/2010, by Rep. Renée Kosel SYNOPSIS AS INTRODUCED: |
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40 ILCS 5/2-108.1 |
from Ch. 108 1/2, par. 2-108.1 |
40 ILCS 5/14-103.12 |
from Ch. 108 1/2, par. 14-103.12 |
40 ILCS 5/15-112 |
from Ch. 108 1/2, par. 15-112 |
40 ILCS 5/16-133 |
from Ch. 108 1/2, par. 16-133 |
40 ILCS 5/18-125 |
from Ch. 108 1/2, par. 18-125 |
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Amends the General Assembly, State Employee, State Universities, Downstate Teacher, and Judges Articles of the Illinois Pension Code. Caps the salary, earnings, or compensation used in determining retirement annuities for persons who first enter the systems on or after July 1, 2010 at the Governor's salary on the date of the participant's retirement. Effective immediately.
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FISCAL NOTE ACT MAY APPLY | |
PENSION IMPACT NOTE ACT MAY APPLY |
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A BILL FOR
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HB5506 |
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| AN ACT concerning public employee benefits.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Pension Code is amended by changing | 5 |
| Sections 2-108.1, 14-103.12, 15-112, 16-133, and 18-125 as | 6 |
| follows:
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| (40 ILCS 5/2-108.1) (from Ch. 108 1/2, par. 2-108.1)
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| Sec. 2-108.1. Highest salary for annuity purposes.
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| (a) "Highest salary for annuity purposes" means whichever | 10 |
| of
the following is applicable to the participant:
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| For a participant who first becomes a participant of this | 12 |
| System before the effective date of this amendatory Act of the | 13 |
| 96th General Assembly:
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| (1) For a participant who is a member of the General | 15 |
| Assembly on his
or her last day of service: the highest | 16 |
| salary that is prescribed by law,
on the participant's last | 17 |
| day of service, for a member of the General
Assembly who is | 18 |
| not an officer; plus, if the participant was elected or
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| appointed to serve as an officer of the General Assembly | 20 |
| for 2 or more
years and has made contributions as required | 21 |
| under subsection (d) of
Section 2-126, the highest | 22 |
| additional amount of compensation prescribed by
law, at the | 23 |
| time of the participant's service as an officer, for |
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| members of
the General Assembly who serve in that office.
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| (2) For a participant who holds one of the State | 3 |
| executive offices
specified in Section 2-105 on his or her | 4 |
| last day of service: the highest
salary prescribed by law | 5 |
| for service in that office on the participant's
last day of | 6 |
| service.
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| (3) For a participant who is Clerk or Assistant Clerk | 8 |
| of the House of Representatives or Secretary or Assistant | 9 |
| Secretary of the Senate
on his or her last day of service: | 10 |
| the salary received for service in that
capacity on the | 11 |
| last day of service, but not to exceed the highest salary
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| (including additional compensation for service as an | 13 |
| officer) that is
prescribed by law on the participant's | 14 |
| last day of service for the highest
paid officer of the | 15 |
| General Assembly.
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| (4) For a participant who is a continuing participant | 17 |
| under Section
2-117.1 on his or her last day of service: | 18 |
| the salary received for service
in that capacity on the | 19 |
| last day of service, but not to exceed the highest
salary | 20 |
| (including additional compensation for service as an | 21 |
| officer) that
is prescribed by law on the participant's | 22 |
| last day of service for the
highest paid officer of the | 23 |
| General Assembly.
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| For a participant who first becomes a participant of this | 25 |
| System on or after the effective date of this amendatory Act of | 26 |
| the 96th General Assembly, the average monthly salary obtained |
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| by dividing the total salary of the participant during the | 2 |
| period of: (1) the 48 consecutive months of service within the | 3 |
| last 120 months of service in which the total compensation was | 4 |
| the highest, or (2) the total period of service, if less than | 5 |
| 48 months, by the number of months of service in that period. | 6 |
| Notwithstanding any other provision of this Article to the | 7 |
| contrary, for a person who first becomes a participant of the | 8 |
| System on or after July 1, 2010, a participant's highest annual | 9 |
| salary for annuity purposes may not exceed the Governor's | 10 |
| salary on the date of the participant's retirement. | 11 |
| (b) The earnings limitations of subsection (a) apply to | 12 |
| earnings
under any other participating system under the | 13 |
| Retirement Systems Reciprocal
Act that are considered in | 14 |
| calculating a proportional annuity under this
Article, except | 15 |
| in the case of a person who first became a member of this
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| System before August 22,
1994.
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| (c) In calculating the subsection (a) earnings limitation | 18 |
| to be applied to
earnings under any other participating system | 19 |
| under the Retirement Systems
Reciprocal Act for the purpose of | 20 |
| calculating a proportional annuity under this
Article, the | 21 |
| participant's last day of service shall be deemed to mean the | 22 |
| last
day of service in any participating system from which the | 23 |
| person has applied
for a proportional annuity under the | 24 |
| Retirement Systems Reciprocal Act.
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| (Source: P.A. 96-207, eff. 8-10-09.)
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| (40 ILCS 5/14-103.12) (from Ch. 108 1/2, par. 14-103.12)
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| Sec. 14-103.12. Final average compensation.
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| (a) For retirement and
survivor annuities, "final average | 4 |
| compensation" means the monthly
compensation obtained by | 5 |
| dividing the total compensation of an employee
during the | 6 |
| period of: (1) the 48 consecutive months of service within the
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| last 120 months of service in which the total compensation was | 8 |
| the highest,
or (2) the total period of service, if less than | 9 |
| 48 months, by the number
of months of service in such period; | 10 |
| provided that for purposes of
a retirement annuity the average | 11 |
| compensation for the last 12 months of the
48-month period | 12 |
| shall not exceed the final average compensation by more than
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| 25%.
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| Notwithstanding any other provision of this Article to the | 15 |
| contrary, for a person who first becomes an employee under the | 16 |
| System on or after July 1, 2010, an employee's final average | 17 |
| compensation may not exceed the Governor's salary on the date | 18 |
| of the employee's retirement. | 19 |
| (b) For death and disability benefits, in the case of a | 20 |
| full-time
employee, "final average compensation" means the | 21 |
| greater of (1) the rate
of compensation of the employee at the | 22 |
| date of death or disability
multiplied by 1 in the case of a | 23 |
| salaried employee, by 174 in the case of
an hourly employee, | 24 |
| and by 22 in the case of a per diem employee, or (2)
for | 25 |
| benefits commencing on or after January 1, 1991, final average
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| compensation as determined under subsection (a).
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| For purposes of this paragraph, full or part-time status | 2 |
| shall be
certified by the employing agency. Final rate of | 3 |
| compensation for a
part-time employee shall be the total | 4 |
| compensation earned during the last
full calendar month prior | 5 |
| to the date of death or disability.
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| (c) Notwithstanding the provisions of subsection (a), for | 7 |
| the purpose
of calculating retirement and survivor annuities of | 8 |
| persons with at least
20 years of eligible creditable service | 9 |
| as defined in Section 14-110, "final average compensation" | 10 |
| means the monthly rate of
compensation received by the person | 11 |
| on the last day of eligible creditable
service (but not to | 12 |
| exceed 115% of the average monthly compensation received
by the | 13 |
| person for the last 24 months of service, unless the person was | 14 |
| in
service as a State policeman before the effective date of | 15 |
| this amendatory
Act of 1997), or the average monthly | 16 |
| compensation received by the person for
the last 48 months of | 17 |
| service prior to retirement, whichever is greater.
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| (d) Notwithstanding the provisions of subsection (a), for a | 19 |
| person who
was receiving, on the date of retirement or death, a | 20 |
| disability benefit
calculated under subdivision (b)(2) of this | 21 |
| Section, the final average
compensation used to calculate the | 22 |
| disability benefit may be used for
purposes of calculating the | 23 |
| retirement and survivor annuities.
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| (e) In computing the final average compensation, periods of | 25 |
| military leave
shall not be considered.
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| (f) The changes to this Section made by this amendatory Act |
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| of 1997
(redefining final average compensation for members | 2 |
| under the alternative
formula) apply to members who retire on | 3 |
| or after January 1, 1998, without
regard to whether employment | 4 |
| terminated before the effective date of this
amendatory Act of | 5 |
| 1997.
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| (g) For a member on leave of absence without pay who | 7 |
| purchases service credit for such period of leave pursuant to | 8 |
| subsection (l) of Section 14-104, earnings are assumed to be | 9 |
| equal to the rate of compensation in effect immediately prior | 10 |
| to the leave. If no contributions are required to establish | 11 |
| service credit for the period of leave, the member may elect to | 12 |
| establish earnings credit for the leave period within 48 months | 13 |
| after returning to work by making the employee and employer | 14 |
| contributions required by subsection (l) of Section 14-104, | 15 |
| based on the rate of compensation in effect immediately prior | 16 |
| to the leave, plus interest at the actuarially assumed rate. In | 17 |
| determining the contributions required for establishing | 18 |
| service credit under this subsection (g), the interest shall be | 19 |
| calculated from the beginning of the leave of absence to the | 20 |
| date of payment. | 21 |
| (Source: P.A. 96-525, eff. 8-14-09.)
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| (40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
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| Sec. 15-112. Final rate of earnings. "Final rate of | 24 |
| earnings":
For an employee who is paid on an hourly basis or | 25 |
| who receives an annual salary
in installments during 12 months |
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| of each academic year, the average annual
earnings during the | 2 |
| 48 consecutive calendar month period ending with the last
day | 3 |
| of final termination of employment or the 4 consecutive | 4 |
| academic years of
service in which the employee's earnings were | 5 |
| the highest, whichever is
greater.
For any other employee, the | 6 |
| average annual earnings during the 4 consecutive
academic years | 7 |
| of service in which his or her earnings were the highest.
For | 8 |
| an employee with less than 48 months or 4 consecutive academic | 9 |
| years of
service, the average earnings during his or her entire | 10 |
| period of service.
The earnings of an employee with more than | 11 |
| 36 months of service prior to the
date of becoming a | 12 |
| participant are, for such period, considered equal to the
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| average earnings during the last 36 months of such service. For | 14 |
| an
employee on leave of absence with pay, or on leave of | 15 |
| absence without pay
who makes contributions during such leave, | 16 |
| earnings are assumed to be equal
to the basic compensation on | 17 |
| the date the leave began. For an employee on
disability leave, | 18 |
| earnings are assumed to be equal to the basic compensation
on | 19 |
| the date disability occurs or the average earnings during the | 20 |
| 24 months
immediately preceding the month in which disability | 21 |
| occurs, whichever is
greater.
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| For a participant who retires on or after the effective | 23 |
| date of this
amendatory Act of 1997 with at least 20 years of | 24 |
| service as a firefighter or
police officer under this Article, | 25 |
| the final rate of earnings shall be the
annual rate of earnings | 26 |
| received by the participant on his or her last day as a
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| firefighter or police officer under this Article, if that is | 2 |
| greater than the
final rate of earnings as calculated under the | 3 |
| other provisions of this
Section.
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| If a participant is an employee for at least
6 months | 5 |
| during the academic year in which his or her employment
is | 6 |
| terminated, the annual final rate of earnings shall be 25% of | 7 |
| the sum
of (1) the annual basic compensation for that year, and | 8 |
| (2) the amount
earned during the 36 months immediately | 9 |
| preceding that year, if this is
greater than the final rate of | 10 |
| earnings as calculated under the other
provisions of this | 11 |
| Section.
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| In the determination of the final rate of earnings for an | 13 |
| employee, that
part of an employee's earnings for any academic | 14 |
| year beginning after June 30,
1997, which exceeds the | 15 |
| employee's earnings with that employer for the
preceding year | 16 |
| by more than 20 percent shall be excluded; in the event
that an | 17 |
| employee has more than one employer
this limitation shall be | 18 |
| calculated separately for the earnings with
each employer. In | 19 |
| making such calculation, only the basic compensation of
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| employees shall be considered, without regard to vacation or | 21 |
| overtime or to
contracts for summer employment.
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| The following are not considered as earnings in determining | 23 |
| final rate of
earnings: (1) severance or separation pay, (2) | 24 |
| retirement pay, (3)
payment for unused sick leave, and (4) | 25 |
| payments from an employer for
the period used in determining | 26 |
| final rate of earnings for any purpose other
than (i) services |
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| rendered, (ii) leave of absence or vacation granted
during that | 2 |
| period, and (iii) vacation of up to 56 work days allowed upon
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| termination of employment; except that, if the benefit has been | 4 |
| collectively
bargained between the employer and the recognized | 5 |
| collective bargaining agent
pursuant to the Illinois | 6 |
| Educational Labor Relations Act, payment received
during a | 7 |
| period of up to 2 academic years for unused sick leave may be
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| considered as earnings in accordance with the applicable | 9 |
| collective bargaining
agreement, subject to the 20% increase | 10 |
| limitation of this Section. Any unused
sick leave considered as | 11 |
| earnings under this Section shall not be taken into
account in | 12 |
| calculating service credit under Section 15-113.4.
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| Notwithstanding any other provision of this Article to the | 14 |
| contrary, for a person who first becomes an employee under the | 15 |
| System on or after July 1, 2010, an employee's final rate of | 16 |
| earnings may not exceed the Governor's salary on the date of | 17 |
| the employee's retirement. | 18 |
| Intermittent periods of service shall be considered as | 19 |
| consecutive in
determining final rate of earnings.
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| (Source: P.A. 92-599, eff. 6-28-02; 93-347, eff. 7-24-03.)
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| (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
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| Sec. 16-133. Retirement annuity; amount.
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| (a) The amount of the retirement annuity shall be (i) in | 24 |
| the case of a person who first became a teacher under this | 25 |
| Article before July 1, 2005, the larger of the
amounts |
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| determined under paragraphs (A) and (B) below, or (ii) in the | 2 |
| case of a person who first becomes a teacher under this Article | 3 |
| on or after July 1, 2005, the amount determined under the | 4 |
| applicable provisions of paragraph (B):
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| (A) An amount consisting of the sum of the following:
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| (1) An amount that can be provided on an | 7 |
| actuarially equivalent basis
by the member's | 8 |
| accumulated contributions at the time of retirement; | 9 |
| and
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| (2) The sum of (i) the amount that can be provided | 11 |
| on an actuarially
equivalent basis by the member's | 12 |
| accumulated contributions representing
service prior | 13 |
| to July 1, 1947, and (ii) the amount that can be | 14 |
| provided on
an actuarially equivalent basis by the | 15 |
| amount obtained by multiplying 1.4
times the member's | 16 |
| accumulated contributions covering service subsequent | 17 |
| to
June 30, 1947; and
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| (3) If there is prior service, 2 times the amount | 19 |
| that would have been
determined under subparagraph (2) | 20 |
| of paragraph (A) above on account of
contributions | 21 |
| which would have been made during the period of prior | 22 |
| service
creditable to the member had the System been in | 23 |
| operation and had the
member made contributions at the | 24 |
| contribution rate in effect prior to
July 1, 1947.
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| This paragraph (A) does not apply to a person who first | 26 |
| becomes a teacher under this Article on or after July 1, |
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| 2005.
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| (B) An amount consisting of the greater of the | 3 |
| following:
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| (1) For creditable service earned before July 1, | 5 |
| 1998 that has not
been augmented under Section | 6 |
| 16-129.1: 1.67% of final average salary for
each of the | 7 |
| first 10 years of creditable service, 1.90% of final | 8 |
| average salary
for each year in excess of 10 but not | 9 |
| exceeding 20, 2.10% of final average
salary for each | 10 |
| year in excess of 20 but not exceeding 30, and 2.30% of | 11 |
| final
average salary for each year in excess of 30; and
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| For creditable service earned on or after July 1, | 13 |
| 1998 by a member who
has at least 24 years of | 14 |
| creditable service on July 1, 1998 and who
does not | 15 |
| elect to augment service under Section 16-129.1: 2.2% | 16 |
| of final
average salary for each year of creditable | 17 |
| service earned on or after July 1,
1998 but before the | 18 |
| member reaches a total of 30 years of creditable | 19 |
| service
and 2.3% of final average salary for each year | 20 |
| of creditable service earned
on or after July 1, 1998 | 21 |
| and after the member reaches a total of 30 years of
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| creditable service; and
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| For all other creditable service: 2.2% of final | 24 |
| average salary
for each year of creditable service; or
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| (2) 1.5% of final average salary for each year of
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| creditable service plus the sum $7.50 for each of the |
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| first 20 years of
creditable service.
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| The amount of the retirement annuity determined under this | 3 |
| paragraph (B)
shall be reduced by 1/2 of 1% for each month | 4 |
| that the member is less than
age 60 at the time the | 5 |
| retirement annuity begins. However, this reduction
shall | 6 |
| not apply (i) if the member has at least 35 years of | 7 |
| creditable service,
or (ii) if the member retires on | 8 |
| account of disability under Section 16-149.2
of this | 9 |
| Article with at least 20 years of creditable service, or | 10 |
| (iii) if
the member (1) has earned during the period | 11 |
| immediately preceding the last
day of service at least one | 12 |
| year of contributing creditable service as an
employee of a | 13 |
| department as defined in Section 14-103.04, (2) has earned | 14 |
| at
least 5 years of contributing creditable service as an | 15 |
| employee of a department
as defined in Section 14-103.04, | 16 |
| (3) retires on or after January 1, 2001, and
(4) retires | 17 |
| having attained an age which, when added to the number of | 18 |
| years of
his or her total creditable service, equals at | 19 |
| least 85. Portions of years
shall be counted as decimal | 20 |
| equivalents.
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| (b) For purposes of this Section, final average salary | 22 |
| shall be the
average salary for the highest 4 consecutive years | 23 |
| within the last 10 years
of creditable service as determined | 24 |
| under rules of the board. The minimum
final average salary | 25 |
| shall be considered to be $2,400 per year.
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| Notwithstanding any other provision of this Article to the |
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| contrary, for a person who first becomes a member of the System | 2 |
| on or after July 1, 2010, a member's final average salary may | 3 |
| not exceed the Governor's salary on the date of the member's | 4 |
| retirement. | 5 |
| In the determination of final average salary for members | 6 |
| other than
elected officials and their appointees when such | 7 |
| appointees are allowed by
statute, that part of a member's | 8 |
| salary for any year beginning after June
30, 1979 which exceeds | 9 |
| the member's annual full-time salary rate with the
same | 10 |
| employer for the preceding year by more than 20% shall be | 11 |
| excluded.
The exclusion shall not apply in any year in which | 12 |
| the member's creditable
earnings are less than 50% of the | 13 |
| preceding year's mean salary for downstate
teachers as | 14 |
| determined by the survey of school district salaries provided | 15 |
| in
Section 2-3.103 of the School Code.
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| (c) In determining the amount of the retirement annuity | 17 |
| under paragraph
(B) of this Section, a fractional year shall be | 18 |
| granted proportional credit.
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| (d) The retirement annuity determined under paragraph (B) | 20 |
| of this Section
shall be available only to members who render | 21 |
| teaching service after July
1, 1947 for which member | 22 |
| contributions are required, and to annuitants who
re-enter | 23 |
| under the provisions of Section 16-150.
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| (e) The maximum retirement annuity provided under | 25 |
| paragraph (B) of this
Section shall be 75% of final average | 26 |
| salary.
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| (f) A member retiring after the effective date of this | 2 |
| amendatory Act
of 1998 shall receive a pension equal to 75% of | 3 |
| final average salary if the
member is qualified to receive a | 4 |
| retirement annuity equal to at least 74.6%
of final average | 5 |
| salary under this Article or as proportional annuities under
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| Article 20 of this Code.
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| (Source: P.A. 94-4, eff. 6-1-05.)
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| (40 ILCS 5/18-125) (from Ch. 108 1/2, par. 18-125)
| 9 |
| Sec. 18-125. Retirement annuity amount.
| 10 |
| (a) The annual retirement annuity for a participant who | 11 |
| terminated
service as a judge prior to July 1, 1971 shall be | 12 |
| based on the law in
effect at the time of termination of | 13 |
| service.
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| (b) Effective July 1, 1971, the retirement annuity for any | 15 |
| participant
in service on or after such date shall be 3 1/2% of | 16 |
| final average salary,
as defined in this Section, for each of | 17 |
| the first 10 years of service, and
5% of such final average | 18 |
| salary for each year of service on excess of 10.
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| For purposes of this Section, final average salary for a | 20 |
| participant who first serves as a judge before August 10, 2009 | 21 |
| ( the effective date of Public Act 96-207) this amendatory Act | 22 |
| of the 96th General Assembly shall be:
| 23 |
| (1) the average salary for the last 4 years of credited | 24 |
| service as a
judge for a participant who terminates service | 25 |
| before July 1, 1975.
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| (2) for a participant who terminates service after June | 2 |
| 30, 1975
and before July 1, 1982, the salary on the last | 3 |
| day of employment as a judge.
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| (3) for any participant who terminates service after | 5 |
| June 30, 1982 and
before January 1, 1990, the average | 6 |
| salary for the final year of service as
a judge.
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| (4) for a participant who terminates service on or | 8 |
| after January 1,
1990 but before the effective date of this | 9 |
| amendatory Act of 1995, the
salary on the last day of | 10 |
| employment as a judge.
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| (5) for a participant who terminates service on or | 12 |
| after the effective
date of this amendatory Act of 1995, | 13 |
| the salary on the last day of employment
as a judge, or the | 14 |
| highest salary received by the participant for employment | 15 |
| as
a judge in a position held by the participant for at | 16 |
| least 4 consecutive years,
whichever is greater.
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| However, in the case of a participant who elects to | 18 |
| discontinue contributions
as provided in subdivision (a)(2) of | 19 |
| Section 18-133, the time of such
election shall be considered | 20 |
| the last day of employment in the determination
of final | 21 |
| average salary under this subsection.
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| For a participant who first serves as a judge on or after | 23 |
| August 10, 2009 ( the effective date of Public Act 96-207) this | 24 |
| amendatory Act of the 96th General Assembly , final average | 25 |
| salary shall be the average monthly salary obtained by dividing | 26 |
| the total salary of the participant during the period of: (1) |
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LRB096 20152 AMC 35697 b |
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| the 48 consecutive months of service within the last 120 months | 2 |
| of service in which the total compensation was the highest, or | 3 |
| (2) the total period of service, if less than 48 months, by the | 4 |
| number of months of service in that period. | 5 |
| The maximum retirement annuity for any participant shall be | 6 |
| 85% of final
average salary.
| 7 |
| Notwithstanding any other provision of this Article to the | 8 |
| contrary, for a person who first becomes a participant of the | 9 |
| System on or after July 1, 2010, a participant's final average | 10 |
| salary may not exceed the Governor's salary on the date of the | 11 |
| participant's retirement. | 12 |
| (c) The retirement annuity for a participant who retires | 13 |
| prior to age 60
with less than 28 years of service in the | 14 |
| System shall be reduced 1/2 of 1%
for each month that the | 15 |
| participant's age is under 60 years at the time the
annuity | 16 |
| commences. However, for a participant who retires on or after | 17 |
| the
effective date of this amendatory Act of the 91st General | 18 |
| Assembly, the
percentage reduction in retirement annuity | 19 |
| imposed under this subsection shall
be reduced by 5/12 of 1% | 20 |
| for every month of service in this System in excess of
20 | 21 |
| years, and therefore a participant with at least 26 years of | 22 |
| service in this
System may retire at age 55 without any | 23 |
| reduction in annuity.
| 24 |
| The reduction in retirement annuity imposed by this | 25 |
| subsection shall not
apply in the case of retirement on account | 26 |
| of disability.
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LRB096 20152 AMC 35697 b |
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| 1 |
| (Source: P.A. 96-207, eff. 8-10-09; revised 10-30-09.)
| 2 |
| Section 99. Effective date. This Act takes effect upon | 3 |
| becoming law.
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