Illinois General Assembly - Full Text of SB1824
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Full Text of SB1824  103rd General Assembly




SB1824 EnrolledLRB103 24922 RPS 51256 b

1    AN ACT concerning public employee benefits.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Pension Code is amended by
5changing Sections 1-109, 7-105, 7-135, 7-172, and 7-174 as
7    (40 ILCS 5/1-109)  (from Ch. 108 1/2, par. 1-109)
8    Sec. 1-109. Duties of fiduciaries. A fiduciary with
9respect to a retirement system or pension fund established
10under this Code shall discharge his or her duties with respect
11to the retirement system or pension fund solely in the
12interest of the participants and beneficiaries and:
13        (a) for the exclusive purpose of:
14            (1) providing benefits to participants and their
15        beneficiaries; and
16            (2) defraying reasonable expenses of administering
17        the retirement system or pension fund;
18        (b) with the care, skill, prudence and diligence under
19    the circumstances then prevailing that a prudent person
20    man acting in a like capacity and familiar with such
21    matters would use in the conduct of an enterprise of a like
22    character with like aims;
23        (c) by diversifying the investments of the retirement



SB1824 Enrolled- 2 -LRB103 24922 RPS 51256 b

1    system or pension fund so as to minimize the risk of large
2    losses, unless under the circumstances it is clearly
3    prudent not to do so; and
4        (d) in accordance with the provisions of the Article
5    of this Code governing the retirement system or pension
6    fund.
7(Source: P.A. 102-558, eff. 8-20-21.)
8    (40 ILCS 5/7-105)  (from Ch. 108 1/2, par. 7-105)
9    Sec. 7-105. "Municipality": A city, village, incorporated
10town, county, township; a Financial Oversight Panel
11established pursuant to Article 1H of the School Code; and any
12school, park, sanitary, road, forest preserve, water, fire
13protection, public health, river conservancy, mosquito
14abatement, tuberculosis sanitarium, public community college
15district, or other local district with general continuous
16power to levy taxes on the property within such district; now
17existing or hereafter created within the State; and, for the
18purposes of providing annuities and benefits to its employees,
19the fund itself.
20(Source: P.A. 97-429, eff. 8-16-11.)
21    (40 ILCS 5/7-135)  (from Ch. 108 1/2, par. 7-135)
22    Sec. 7-135. Authorized agents.
23    (a) Each participating municipality and participating
24instrumentality shall appoint an authorized agent who shall



SB1824 Enrolled- 3 -LRB103 24922 RPS 51256 b

1have the powers and duties set forth in this section. In
2absence of such appointment, the duties of the authorized
3agent shall devolve upon the clerk or secretary of the
4municipality or instrumentality, the township supervisor in
5the case of a township, and in the case of township school
6trustees upon the township school treasurer.
7    (b) The authorized agent shall have the following powers
8and duties:
9        1. To certify to the fund whether or not a given person
10    is authorized to participate in the fund;
11        2. To certify to the fund when a participating
12    employee is on a leave of absence authorized by the
13    municipality;
14        3. To request the proper officer to cause employee
15    contributions to be withheld from earnings and transmitted
16    to the fund;
17        4. To request the proper officer to cause municipality
18    contributions to be forwarded to the fund promptly;
19        5. To forward promptly to all participating employees
20    any communications from the fund for such employees;
21        6. To forward promptly to the fund all applications,
22    claims, reports and other communications delivered to him
23    by participating employees;
24        7. To perform all duties related to the administration
25    of this retirement system as requested by the fund and the
26    governing body of his municipality.



SB1824 Enrolled- 4 -LRB103 24922 RPS 51256 b

1    (c) The governing body of each participating municipality
2and participating instrumentality may delegate any or all of
3the following powers and duties to its authorized agent:
4        1. To file a petition for nomination of an executive
5    trustee of the fund.
6        2. To cast the ballot for election of an executive
7    trustee of the fund.
8    If a governing body does not authorize its agent to
9perform the powers and duties set forth in this paragraph (c),
10they shall be performed by the governing body itself, unless
11the governing body by resolution duly certified to the fund
12delegates them to some other officer or employee.
13    (d) The delivery of any communication or document by an
14employee or a participating municipality or participating
15instrumentality to its authorized agent shall not constitute
16delivery to the fund.
17    (e) All authorized agents appointed on or after the
18effective date of this amendatory Act of the 103rd General
19Assembly must complete a course of training regarding the
20duties and responsibilities of being an authorized agent no
21less than 3 months after his or her initial appointment. Such
22training must be provided by the Fund and made available
23online to all authorized agents no less than quarterly at no
24cost to the authorized agent or his or her employer.
25(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12;
2698-218, eff. 8-9-13.)



SB1824 Enrolled- 5 -LRB103 24922 RPS 51256 b

1    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
2    Sec. 7-172. Contributions by participating municipalities
3and participating instrumentalities.
4    (a) Each participating municipality and each participating
5instrumentality shall make payment to the fund as follows:
6        1. municipality contributions in an amount determined
7    by applying the municipality contribution rate to each
8    payment of earnings paid to each of its participating
9    employees;
10        2. an amount equal to the employee contributions
11    provided by paragraph (a) of Section 7-173, whether or not
12    the employee contributions are withheld as permitted by
13    that Section;
14        3. all accounts receivable, together with interest
15    charged thereon, as provided in Section 7-209, and any
16    amounts due under subsection (a-5) of Section 7-144;
17        4. if it has no participating employees with current
18    earnings, an amount payable which, over a closed period of
19    20 years for participating municipalities and 10 years for
20    participating instrumentalities, will amortize, at the
21    effective rate for that year, any unfunded obligation. The
22    unfunded obligation shall be computed as provided in
23    paragraph 2 of subsection (b);
24        5. if it has fewer than 7 participating employees or a
25    negative balance in its municipality reserve, the greater



SB1824 Enrolled- 6 -LRB103 24922 RPS 51256 b

1    of (A) an amount payable that, over a period of 20 years,
2    will amortize at the effective rate for that year any
3    unfunded obligation, computed as provided in paragraph 2
4    of subsection (b) or (B) the amount required by paragraph
5    1 of this subsection (a).
6    (b) A separate municipality contribution rate shall be
7determined for each calendar year for all participating
8municipalities together with all instrumentalities thereof.
9The municipality contribution rate shall be determined for
10participating instrumentalities as if they were participating
11municipalities. The municipality contribution rate shall be
12the sum of the following percentages:
13        1. The percentage of earnings of all the participating
14    employees of all participating municipalities and
15    participating instrumentalities which, if paid over the
16    entire period of their service, will be sufficient when
17    combined with all employee contributions available for the
18    payment of benefits, to provide all annuities for
19    participating employees, and the $3,000 death benefit
20    payable under Sections 7-158 and 7-164, such percentage to
21    be known as the normal cost rate.
22        2. The percentage of earnings of the participating
23    employees of each participating municipality and
24    participating instrumentalities necessary to adjust for
25    the difference between the present value of all benefits,
26    excluding temporary and total and permanent disability and



SB1824 Enrolled- 7 -LRB103 24922 RPS 51256 b

1    death benefits, to be provided for its participating
2    employees and the sum of its accumulated municipality
3    contributions and the accumulated employee contributions
4    and the present value of expected future employee and
5    municipality contributions pursuant to subparagraph 1 of
6    this paragraph (b). This adjustment shall be spread over a
7    period determined by the Board, not to exceed 30 years for
8    participating municipalities or 10 years for participating
9    instrumentalities.
10        3. The percentage of earnings of the participating
11    employees of all municipalities and participating
12    instrumentalities necessary to provide the present value
13    of all temporary and total and permanent disability
14    benefits granted during the most recent year for which
15    information is available.
16        4. The percentage of earnings of the participating
17    employees of all participating municipalities and
18    participating instrumentalities necessary to provide the
19    present value of the net single sum death benefits
20    expected to become payable from the reserve established
21    under Section 7-206 during the year for which this rate is
22    fixed.
23        5. The percentage of earnings necessary to meet any
24    deficiency arising in the Terminated Municipality Reserve.
25    (c) A separate municipality contribution rate shall be
26computed for each participating municipality or participating



SB1824 Enrolled- 8 -LRB103 24922 RPS 51256 b

1instrumentality for its sheriff's law enforcement employees.
2    A separate municipality contribution rate shall be
3computed for the sheriff's law enforcement employees of each
4forest preserve district that elects to have such employees.
5For the period from January 1, 1986 to December 31, 1986, such
6rate shall be the forest preserve district's regular rate plus
8    In the event that the Board determines that there is an
9actuarial deficiency in the account of any municipality with
10respect to a person who has elected to participate in the Fund
11under Section 3-109.1 of this Code, the Board may adjust the
12municipality's contribution rate so as to make up that
13deficiency over such reasonable period of time as the Board
14may determine.
15    (d) The Board may establish a separate municipality
16contribution rate for all employees who are program
17participants employed under the federal Comprehensive
18Employment Training Act by all of the participating
19municipalities and instrumentalities. The Board may also
20provide that, in lieu of a separate municipality rate for
21these employees, a portion of the municipality contributions
22for such program participants shall be refunded or an extra
23charge assessed so that the amount of municipality
24contributions retained or received by the fund for all CETA
25program participants shall be an amount equal to that which
26would be provided by the separate municipality contribution



SB1824 Enrolled- 9 -LRB103 24922 RPS 51256 b

1rate for all such program participants. Refunds shall be made
2to prime sponsors of programs upon submission of a claim
3therefor and extra charges shall be assessed to participating
4municipalities and instrumentalities. In establishing the
5municipality contribution rate as provided in paragraph (b) of
6this Section, the use of a separate municipality contribution
7rate for program participants or the refund of a portion of the
8municipality contributions, as the case may be, may be
10    (e) Computations of municipality contribution rates for
11the following calendar year shall be made prior to the
12beginning of each year, from the information available at the
13time the computations are made, and on the assumption that the
14employees in each participating municipality or participating
15instrumentality at such time will continue in service until
16the end of such calendar year at their respective rates of
17earnings at such time.
18    (f) Any municipality which is the recipient of State
19allocations representing that municipality's contributions for
20retirement annuity purposes on behalf of its employees as
21provided in Section 12-21.16 of the Illinois Public Aid Code
22shall pay the allocations so received to the Board for such
23purpose. Estimates of State allocations to be received during
24any taxable year shall be considered in the determination of
25the municipality's tax rate for that year under Section 7-171.
26If a special tax is levied under Section 7-171, none of the



SB1824 Enrolled- 10 -LRB103 24922 RPS 51256 b

1proceeds may be used to reimburse the municipality for the
2amount of State allocations received and paid to the Board.
3Any multiple-county or consolidated health department which
4receives contributions from a county under Section 11.2 of "An
5Act in relation to establishment and maintenance of county and
6multiple-county health departments", approved July 9, 1943, as
7amended, or distributions under Section 3 of the Department of
8Public Health Act, shall use these only for municipality
9contributions by the health department.
10    (g) Municipality contributions for the several purposes
11specified shall, for township treasurers and employees in the
12offices of the township treasurers who meet the qualifying
13conditions for coverage hereunder, be allocated among the
14several school districts and parts of school districts
15serviced by such treasurers and employees in the proportion
16which the amount of school funds of each district or part of a
17district handled by the treasurer bears to the total amount of
18all school funds handled by the treasurer.
19    From the funds subject to allocation among districts and
20parts of districts pursuant to the School Code, the trustees
21shall withhold the proportionate share of the liability for
22municipality contributions imposed upon such districts by this
23Section, in respect to such township treasurers and employees
24and remit the same to the Board.
25    The municipality contribution rate for an educational
26service center shall initially be the same rate for each year



SB1824 Enrolled- 11 -LRB103 24922 RPS 51256 b

1as the regional office of education or school district which
2serves as its administrative agent. When actuarial data become
3available, a separate rate shall be established as provided in
4subparagraph (i) of this Section.
5    The municipality contribution rate for a public agency,
6other than a vocational education cooperative, formed under
7the Intergovernmental Cooperation Act shall initially be the
8average rate for the municipalities which are parties to the
9intergovernmental agreement. When actuarial data become
10available, a separate rate shall be established as provided in
11subparagraph (i) of this Section.
12    (h) Each participating municipality and participating
13instrumentality shall make the contributions in the amounts
14provided in this Section in the manner prescribed from time to
15time by the Board and all such contributions shall be
16obligations of the respective participating municipalities and
17participating instrumentalities to this fund. The failure to
18deduct any employee contributions shall not relieve the
19participating municipality or participating instrumentality of
20its obligation to this fund. Delinquent payments of
21contributions due under this Section may, with interest, be
22recovered by civil action against the participating
23municipalities or participating instrumentalities.
24Municipality contributions, other than the amount necessary
25for employee contributions, for periods of service by
26employees from whose earnings no deductions were made for



SB1824 Enrolled- 12 -LRB103 24922 RPS 51256 b

1employee contributions to the fund, may be charged to the
2municipality reserve for the municipality or participating
4    (i) Contributions by participating instrumentalities shall
5be determined as provided herein except that the percentage
6derived under subparagraph 2 of paragraph (b) of this Section,
7and the amount payable under subparagraph 4 of paragraph (a)
8of this Section, shall be based on an amortization period of 10
10    (j) Notwithstanding the other provisions of this Section,
11the additional unfunded liability accruing as a result of
12Public Act 94-712 shall be amortized over a period of 30 years
13beginning on January 1 of the second calendar year following
14the calendar year in which Public Act 94-712 takes effect,
15except that the employer may provide for a longer amortization
16period by adopting a resolution or ordinance specifying a
1735-year or 40-year period and submitting a certified copy of
18the ordinance or resolution to the fund no later than June 1 of
19the calendar year following the calendar year in which Public
20Act 94-712 takes effect.
21    (k) If the amount of a participating employee's reported
22earnings for any of the 12-month periods used to determine the
23final rate of earnings exceeds the employee's 12-month
24reported earnings with the same employer for the previous year
25by the greater of 6% or 1.5 times the annual increase in the
26Consumer Price Index-U, as established by the United States



SB1824 Enrolled- 13 -LRB103 24922 RPS 51256 b

1Department of Labor for the preceding September, the
2participating municipality or participating instrumentality
3that paid those earnings shall pay to the Fund, in addition to
4any other contributions required under this Article, the
5present value of the increase in the pension resulting from
6the portion of the increase in reported earnings that is in
7excess of the greater of 6% or 1.5 times the annual increase in
8the Consumer Price Index-U, as determined by the Fund. This
9present value shall be computed on the basis of the actuarial
10assumptions and tables used in the most recent actuarial
11valuation of the Fund that is available at the time of the
13    Whenever it determines that a payment is or may be
14required under this subsection (k), the fund shall calculate
15the amount of the payment and bill the participating
16municipality or participating instrumentality for that amount.
17The bill shall specify the calculations used to determine the
18amount due. If the participating municipality or participating
19instrumentality disputes the amount of the bill, it may,
20within 30 days after receipt of the bill, apply to the fund in
21writing for a recalculation. The application must specify in
22detail the grounds of the dispute. Upon receiving a timely
23application for recalculation, the fund shall review the
24application and, if appropriate, recalculate the amount due.
25The participating municipality and participating
26instrumentality contributions required under this subsection



SB1824 Enrolled- 14 -LRB103 24922 RPS 51256 b

1(k) may be paid in the form of a lump sum within 90 days after
2receipt of the bill. If the participating municipality and
3participating instrumentality contributions are not paid
4within 90 days after receipt of the bill, then interest will be
5charged at a rate equal to the fund's annual actuarially
6assumed rate of return on investment compounded annually from
7the 91st day after receipt of the bill. Payments must be
8concluded within 3 years after receipt of the bill by the
9participating municipality or participating instrumentality.
10    When assessing payment for any amount due under this
11subsection (k), the fund shall exclude earnings increases
12resulting from overload or overtime earnings.
13    When assessing payment for any amount due under this
14subsection (k), the fund shall exclude earnings increases
15resulting from payments for unused vacation time, but only for
16payments for unused vacation time made in the final 3 months of
17the final rate of earnings period.
18    When assessing payment for any amount due under this
19subsection (k), the fund shall also exclude earnings increases
20attributable to standard employment promotions resulting in
21increased responsibility and workload.
22    When assessing payment for any amount due under this
23subsection (k), the fund shall exclude reportable earnings
24increases resulting from periods where the member was paid
25through workers' compensation.
26    This subsection (k) does not apply to earnings increases



SB1824 Enrolled- 15 -LRB103 24922 RPS 51256 b

1due to amounts paid as required by federal or State law or
2court mandate or to earnings increases due to the
3participating employee returning to the regular number of
4hours worked after having a temporary reduction in the number
5of hours worked.
6    This subsection (k) does not apply to earnings increases
7paid to individuals under contracts or collective bargaining
8agreements entered into, amended, or renewed before January 1,
92012 (the effective date of Public Act 97-609), earnings
10increases paid to members who are 10 years or more from
11retirement eligibility, or earnings increases resulting from
12an increase in the number of hours required to be worked.
13    When assessing payment for any amount due under this
14subsection (k), the fund shall also exclude earnings
15attributable to personnel policies adopted before January 1,
162012 (the effective date of Public Act 97-609) as long as those
17policies are not applicable to employees who begin service on
18or after January 1, 2012 (the effective date of Public Act
20    The change made to this Section by Public Act 100-139 is a
21clarification of existing law and is intended to be
22retroactive to January 1, 2012 (the effective date of Public
23Act 97-609).
24(Source: P.A. 102-849, eff. 5-13-22.)
25    (40 ILCS 5/7-174)  (from Ch. 108 1/2, par. 7-174)



SB1824 Enrolled- 16 -LRB103 24922 RPS 51256 b

1    Sec. 7-174. Board created.
2    (a) A board of 8 members shall constitute a board of
3trustees authorized to carry out the provisions of this
4Article. Each trustee shall be a participating employee of a
5participating municipality or participating instrumentality or
6an annuitant of the Fund and no person shall be eligible to
7become a trustee after January 1, 1979 who does not have the
8minimum service credit in this Fund to qualify for a pension.
9    (b) The board shall consist of representatives of various
10groups as follows:
11        1. 4 trustees shall be a chief executive officer,
12    chief finance officer, or other officer, executive or
13    department head of a participating municipality or
14    participating instrumentality, and each such trustee shall
15    be designated as an executive trustee.
16        2. 3 trustees shall be employees of a participating
17    municipality or participating instrumentality and each
18    such trustee shall be designated as an employee trustee. A
19    person who meets the criteria to be an executive trustee
20    may not serve as an employee trustee.
21        3. One trustee shall be an annuitant of the Fund, who
22    shall be designated the annuitant trustee.
23    (c) A person elected as a trustee shall qualify as a
24trustee, after declaration by the board that he has been duly
25elected, upon taking and subscribing to the constitutional
26oath of office and filing same in the office of the Fund.



SB1824 Enrolled- 17 -LRB103 24922 RPS 51256 b

1    (d) The term of office of each trustee shall begin upon
2January 1 of the year following the year in which he is elected
3and shall continue for a period of 5 years and until a
4successor has been elected and qualified, or until prior
5resignation, death, incapacity or disqualification.
6    (e) Any elected trustee (other than the annuitant trustee)
7shall be disqualified immediately upon termination of
8employment with all participating municipalities and
9instrumentalities thereof or upon any change in status which
10removes any such trustee from all employments within the group
11he represents. The annuitant trustee shall be disqualified
12upon termination of his or her annuity.
13    (e-5) Notwithstanding any other provision, an elected
14trustee shall not be considered disqualified due to
15termination of participation under subsection (e) if:
16        (1) he or she thereafter begins participation with a
17    different participating employer;
18        (2) there is no gap in service credit established
19    under this Article; and
20        (3) the trustee continues to meet all eligibility
21    requirements under subsection (b) for the same type of
22    trustee position.
23    (f) The trustees shall fill any vacancy in the board by
24appointment, for the period until the next election of
25trustees, or, if the remaining term is less than 2 years, for
26the remainder of the term, and until his successor has been



SB1824 Enrolled- 18 -LRB103 24922 RPS 51256 b

1elected and qualified.
2    (g) Trustees shall serve without compensation, but shall
3be reimbursed for any reasonable expenses incurred in
4attending meetings of the board and in performing duties on
5behalf of the Fund and for the amount of any earnings withheld
6by any employing municipality or participating instrumentality
7because of attendance at any board meeting.
8    (h) Each trustee shall be entitled to one vote on any and
9all actions before the board. At least 5 concurring votes
10shall be necessary for every decision or action by the board at
11any of its meetings. No decision or action shall become
12effective unless presented and so approved at a regular or
13duly called special meeting of the board.
14(Source: P.A. 102-479, eff. 8-20-21.)
15    Section 99. Effective date. This Act takes effect upon
16becoming law, except that the changes to Section 7-135 of the
17Illinois Pension Code take effect January 1, 2024.