Full Text of HB5644 97th General Assembly
HB5644 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB5644 Introduced 2/15/2012, by Rep. David R. Leitch SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/3-125 | from Ch. 108 1/2, par. 3-125 | 40 ILCS 5/4-118 | from Ch. 108 1/2, par. 4-118 |
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Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Authorizes the corporate authorities of a participating municipality to elect, by a duly authorized resolution or ordinance, to calculate actuarial liabilities using a 30-year rolling amortization period.
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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 3-125 and 4-118 as follows:
| 6 | | (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
| 7 | | Sec. 3-125. Financing. | 8 | | (a) The city council or the board of trustees of
the | 9 | | municipality shall annually levy a tax upon all
the taxable | 10 | | property of the municipality at the rate on the dollar which
| 11 | | will produce an amount which, when added to the deductions from | 12 | | the salaries
or wages of police officers, and revenues
| 13 | | available from other
sources, will equal a sum sufficient to | 14 | | meet
the annual requirements of the police pension fund. The | 15 | | annual
requirements to be provided by such tax levy are equal
| 16 | | to (1) the normal cost of the pension fund for the year | 17 | | involved, plus
(2) either (i) in the case of a participating | 18 | | municipality that has elected a 30-year rolling amortization | 19 | | period pursuant to subsection (f) of this Section, an amount | 20 | | sufficient to bring the total assets of the pension fund up to | 21 | | 90% of the total actuarial liabilities of the pension fund | 22 | | within 30 years, as annually updated and determined by an | 23 | | enrolled actuary employed by the Illinois Department of |
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| 1 | | Insurance or by an enrolled actuary retained by the pension | 2 | | fund or the municipality, or (ii) in all other cases, an amount | 3 | | sufficient to bring the total assets of the pension fund up to | 4 | | 90% of the total actuarial liabilities of the pension fund by | 5 | | the end of municipal fiscal year 2040, as annually updated and | 6 | | determined by an enrolled actuary employed by the Illinois | 7 | | Department of Insurance or by an enrolled actuary retained by | 8 | | the pension fund or the municipality. In making these | 9 | | determinations, the required minimum employer contribution | 10 | | shall be calculated each year as a level percentage of payroll | 11 | | over the years remaining up to and including fiscal year 2040 | 12 | | and shall be determined under the projected unit credit | 13 | | actuarial cost method. The tax shall be levied and
collected in | 14 | | the same manner as the general taxes
of the municipality, and | 15 | | in addition to all other taxes now or hereafter authorized to
| 16 | | be levied upon all property within the municipality, and shall | 17 | | be in
addition to the amount authorized to be levied for | 18 | | general purposes as
provided by Section 8-3-1 of the Illinois | 19 | | Municipal Code, approved May
29, 1961, as amended. The tax | 20 | | shall be forwarded directly to the treasurer of the board | 21 | | within 30 business days after receipt by the county.
| 22 | | (b) For purposes of determining the required employer | 23 | | contribution to a pension fund, the value of the pension fund's | 24 | | assets shall be equal to the actuarial value of the pension | 25 | | fund's assets, which shall be calculated as follows: | 26 | | (1) On March 30, 2011, the actuarial value of a pension |
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| 1 | | fund's assets shall be equal to the market value of the | 2 | | assets as of that date. | 3 | | (2) In determining the actuarial value of the System's | 4 | | assets for fiscal years after March 30, 2011, any actuarial | 5 | | gains or losses from investment return incurred in a fiscal | 6 | | year shall be recognized in equal annual amounts over the | 7 | | 5-year period following that fiscal year. | 8 | | (c) If a participating municipality fails to transmit to | 9 | | the fund contributions required of it under this Article for | 10 | | more than 90 days after the payment of those contributions is | 11 | | due, the fund may, after giving notice to the municipality, | 12 | | certify to the State Comptroller the amounts of the delinquent | 13 | | payments, and the Comptroller must, beginning in fiscal year | 14 | | 2016, deduct and deposit into the fund the certified amounts or | 15 | | a portion of those amounts from the following proportions of | 16 | | grants of State funds to the municipality: | 17 | | (1) in fiscal year 2016, one-third of the total amount | 18 | | of any grants of State funds to the municipality; | 19 | | (2) in fiscal year 2017, two-thirds of the total amount | 20 | | of any grants of State funds to the municipality; and | 21 | | (3) in fiscal year 2018 and each fiscal year | 22 | | thereafter, the total amount of any grants of State funds | 23 | | to the municipality. | 24 | | The State Comptroller may not deduct from any grants of | 25 | | State funds to the municipality more than the amount of | 26 | | delinquent payments certified to the State Comptroller by the |
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| 1 | | fund. | 2 | | (d) The police pension fund shall consist of the following | 3 | | moneys which
shall be set apart by the treasurer of the | 4 | | municipality:
| 5 | | (1) All moneys derived from the taxes levied hereunder;
| 6 | | (2) Contributions by police officers under Section | 7 | | 3-125.1;
| 8 | | (3) All moneys accumulated by the municipality under | 9 | | any previous
legislation establishing a fund for the | 10 | | benefit of disabled or retired
police officers;
| 11 | | (4) Donations, gifts or other transfers authorized by | 12 | | this
Article.
| 13 | | (e) The Commission on Government Forecasting and
| 14 | | Accountability shall conduct a study of all funds established
| 15 | | under this Article and shall report its findings to the General
| 16 | | Assembly on or before January 1, 2013. To the fullest extent | 17 | | possible, the study shall include, but not be limited to, the | 18 | | following: | 19 | | (1) fund balances; | 20 | | (2) historical employer contribution rates for each
| 21 | | fund; | 22 | | (3) the actuarial formulas used as a basis for employer
| 23 | | contributions, including the actual assumed rate of return
| 24 | | for each year, for each fund; | 25 | | (4) available contribution funding sources; | 26 | | (5) the impact of any revenue limitations caused by
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| 1 | | PTELL and employer home rule or non-home rule status; and | 2 | | (6) existing statutory funding compliance procedures
| 3 | | and funding enforcement mechanisms for all municipal
| 4 | | pension funds. | 5 | | (f) Beginning on the effective date of this amendatory Act | 6 | | of the 97th General Assembly, the corporate authorities of a | 7 | | participating municipality may, by a duly authorized | 8 | | resolution or ordinance, elect to use a 30-year rolling | 9 | | amortization period to calculate actuarial liabilities under | 10 | | subsection (a) of this Section. | 11 | | (Source: P.A. 95-530, eff. 8-28-07; 96-1495, eff. 1-1-11.)
| 12 | | (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
| 13 | | Sec. 4-118. Financing.
| 14 | | (a) The city council or the board of trustees
of the | 15 | | municipality shall annually levy a tax upon all the taxable | 16 | | property
of the municipality at the rate on the dollar which | 17 | | will produce an amount
which, when added to the deductions from | 18 | | the salaries or wages of
firefighters and revenues available | 19 | | from other sources, will equal a sum
sufficient to meet the | 20 | | annual actuarial requirements of the pension fund,
as | 21 | | determined by an enrolled actuary employed by the Illinois | 22 | | Department of
Insurance or by an enrolled actuary retained by | 23 | | the pension fund or
municipality. For the purposes of this | 24 | | Section, the annual actuarial
requirements of the pension fund | 25 | | are equal to (1) the normal cost of the
pension fund, or 17.5% |
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| 1 | | of the salaries and wages to be paid to firefighters
for the | 2 | | year involved, whichever is greater, plus (2) either (i) in the | 3 | | case of a participating municipality that has elected a 30-year | 4 | | rolling amortization period pursuant to subsection (h) of this | 5 | | Section, an amount sufficient to bring the total assets of the | 6 | | pension fund up to 90% of the total actuarial liabilities of | 7 | | the pension fund within 30 years, as annually updated and | 8 | | determined by an enrolled actuary employed by the Illinois | 9 | | Department of Insurance or by an enrolled actuary retained by | 10 | | the pension fund or the municipality, or (ii) in all other | 11 | | cases, an annual amount
sufficient to bring the total assets of | 12 | | the pension fund up to 90% of the total actuarial liabilities | 13 | | of the pension fund by the end of municipal fiscal year 2040, | 14 | | as annually updated and determined by an enrolled actuary | 15 | | employed by the Illinois Department of Insurance or by an | 16 | | enrolled actuary retained by the pension fund or the | 17 | | municipality. In making these determinations, the required | 18 | | minimum employer contribution shall be calculated each year as | 19 | | a level percentage of payroll over the years remaining up to | 20 | | and including fiscal year 2040 and shall be determined under | 21 | | the projected unit credit actuarial cost method. The amount
to | 22 | | be applied towards the amortization of the unfunded accrued | 23 | | liability in any
year shall not be less than the annual amount | 24 | | required to amortize the unfunded
accrued liability, including | 25 | | interest, as a level percentage of payroll over
the number of | 26 | | years remaining in the 40 year amortization period.
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| 1 | | (a-5) For purposes of determining the required employer | 2 | | contribution to a pension fund, the value of the pension fund's | 3 | | assets shall be equal to the actuarial value of the pension | 4 | | fund's assets, which shall be calculated as follows: | 5 | | (1) On March 30, 2011, the actuarial value of a pension | 6 | | fund's assets shall be equal to the market value of the | 7 | | assets as of that date. | 8 | | (2) In determining the actuarial value of the pension | 9 | | fund's assets for fiscal years after March 30, 2011, any | 10 | | actuarial gains or losses from investment return incurred | 11 | | in a fiscal year shall be recognized in equal annual | 12 | | amounts over the 5-year period following that fiscal year. | 13 | | (b) The tax shall be levied and collected in the same | 14 | | manner
as the general taxes of the municipality, and shall be | 15 | | in addition
to all other taxes now or hereafter authorized to | 16 | | be levied upon all
property within the municipality, and in | 17 | | addition to the amount authorized
to be levied for general | 18 | | purposes, under Section 8-3-1 of the Illinois
Municipal Code or | 19 | | under Section 14 of the Fire Protection District Act. The
tax | 20 | | shall be forwarded directly to the treasurer of the board | 21 | | within 30
business days of receipt by the county
(or, in the | 22 | | case of amounts
added to the tax levy under subsection (f), | 23 | | used by the municipality to pay the
employer contributions | 24 | | required under subsection (b-1) of Section 15-155 of
this | 25 | | Code).
| 26 | | (b-5) If a participating municipality fails to transmit to |
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| 1 | | the fund contributions required of it under this Article for | 2 | | more than 90 days after the payment of those contributions is | 3 | | due, the fund may, after giving notice to the municipality, | 4 | | certify to the State Comptroller the amounts of the delinquent | 5 | | payments, and the Comptroller must, beginning in fiscal year | 6 | | 2016, deduct and deposit into the fund the certified amounts or | 7 | | a portion of those amounts from the following proportions of | 8 | | grants of State funds to the municipality: | 9 | | (1) in fiscal year 2016, one-third of the total amount | 10 | | of any grants of State funds to the municipality; | 11 | | (2) in fiscal year 2017, two-thirds of the total amount | 12 | | of any grants of State funds to the municipality; and | 13 | | (3) in fiscal year 2018 and each fiscal year | 14 | | thereafter, the total amount of any grants of State funds | 15 | | to the municipality. | 16 | | The State Comptroller may not deduct from any grants of | 17 | | State funds to the municipality more than the amount of | 18 | | delinquent payments certified to the State Comptroller by the | 19 | | fund. | 20 | | (c) The board shall make available to the membership and | 21 | | the general public
for inspection and copying at reasonable | 22 | | times the most recent Actuarial
Valuation Balance Sheet and Tax | 23 | | Levy Requirement issued to the fund by the
Department of | 24 | | Insurance.
| 25 | | (d) The firefighters' pension fund shall consist of the | 26 | | following moneys
which shall be set apart by the treasurer of |
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| 1 | | the municipality: (1) all
moneys derived from the taxes levied | 2 | | hereunder; (2) contributions
by firefighters as provided under | 3 | | Section 4-118.1; (3) all
rewards in money, fees, gifts, and | 4 | | emoluments that may be paid or given
for or on account of | 5 | | extraordinary service by the fire department or any
member | 6 | | thereof, except when allowed to be retained by competitive | 7 | | awards;
and (4) any money, real estate or personal property | 8 | | received by the board.
| 9 | | (e) For the purposes of this Section, "enrolled actuary" | 10 | | means an actuary:
(1) who is a member of the Society of | 11 | | Actuaries or the American
Academy of Actuaries; and (2) who is | 12 | | enrolled under Subtitle
C of Title III of the Employee | 13 | | Retirement Income Security Act of 1974, or
who has been engaged | 14 | | in providing actuarial services to one or more public
| 15 | | retirement systems for a period of at least 3 years as of July | 16 | | 1, 1983.
| 17 | | (f) The corporate authorities of a municipality that | 18 | | employs a person
who is described in subdivision (d) of Section | 19 | | 4-106 may add to the tax levy
otherwise provided for in this | 20 | | Section an amount equal to the projected cost of
the employer | 21 | | contributions required to be paid by the municipality to the | 22 | | State
Universities Retirement System under subsection (b-1) of | 23 | | Section 15-155 of this
Code. | 24 | | (g) The Commission on Government Forecasting and
| 25 | | Accountability shall conduct a study of all funds established
| 26 | | under this Article and shall report its findings to the General
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| 1 | | Assembly on or before January 1, 2013. To the fullest extent | 2 | | possible, the study shall include, but not be limited to, the | 3 | | following: | 4 | | (1) fund balances; | 5 | | (2) historical employer contribution rates for each
| 6 | | fund; | 7 | | (3) the actuarial formulas used as a basis for employer
| 8 | | contributions, including the actual assumed rate of return
| 9 | | for each year, for each fund; | 10 | | (4) available contribution funding sources; | 11 | | (5) the impact of any revenue limitations caused by
| 12 | | PTELL and employer home rule or non-home rule status; and | 13 | | (6) existing statutory funding compliance procedures
| 14 | | and funding enforcement mechanisms for all municipal
| 15 | | pension funds.
| 16 | | (h) Beginning on the effective date of this amendatory Act | 17 | | of the 97th General Assembly, the corporate authorities of a | 18 | | participating municipality may, by a duly authorized | 19 | | resolution or ordinance, elect to use a 30-year rolling | 20 | | amortization period to calculate actuarial liabilities under | 21 | | subsection (a) of this Section. | 22 | | (Source: P.A. 96-1495, eff. 1-1-11.)
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