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90_HB0160
40 ILCS 5/8-137 from Ch. 108 1/2, par. 8-137
40 ILCS 5/8-137.1 from Ch. 108 1/2, par. 8-137.1
40 ILCS 5/8-138 from Ch. 108 1/2, par. 8-138
40 ILCS 5/8-244.1 from Ch. 108 1/2, par. 8-244.1
30 ILCS 805/8.21 new
Amends the Chicago Municipal Article of the Pension Code
to compound the 3% automatic annual increase in retirement
pension. Provides a minimum retirement annuity for persons
retiring with at least 10 years of service. Authorizes
withholding of labor organization dues from annuities, and
grants labor organizations access to a mailing list of the
Fund's annuitants. Also makes technical changes. Amends the
State Mandates Act to require implementation without
reimbursement. Effective immediately.
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1 AN ACT to amend the Illinois Pension Code by changing
2 Sections 8-137, 8-137.1, 8-138, and 8-244.1 and to amend the
3 State Mandates Act.
4 Be it enacted by the People of the State of Illinois,
5 represented in the General Assembly:
6 Section 5. The Illinois Pension Code is amended by
7 changing Sections 8-137, 8-137.1, 8-138, and 8-244.1 as
8 follows:
9 (40 ILCS 5/8-137) (from Ch. 108 1/2, par. 8-137)
10 Sec. 8-137. Automatic increase in annuity.
11 (a) An employee who retired or retires from service
12 after December 31, 1959 and before January 1, 1987, having
13 attained age 60 or more, shall, in January of the year after
14 the year in which the first anniversary of retirement occurs,
15 have the amount of his then fixed and payable monthly annuity
16 increased by 1.5% 1 1/2%, and such first fixed annuity as
17 granted at retirement shall be increased by a further 1.5% 1
18 1/2% in January of each year thereafter. Beginning in with
19 January of the year 1972, such increases shall be at the rate
20 of 2% in lieu of the aforesaid specified 1 1/2%, and
21 beginning in with January of the year 1984, such increases
22 shall be at the rate of 3%. Beginning in January of 1998,
23 such increases shall be at the rate of 3% of the currently
24 payable monthly annuity, including any increases previously
25 granted under this Article. An such employee who retires on
26 annuity after December 31, 1959 and before January 1, 1987,
27 but before attaining age 60, shall receive such increases
28 beginning in January of the year after the year in which he
29 attains age 60.
30 An employee who retires from service on or after January
31 1, 1987 shall, upon the first annuity payment date following
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1 the first anniversary of the date of retirement, or upon the
2 first annuity payment date following attainment of age 60,
3 whichever occurs later, have his then fixed and payable
4 monthly annuity increased by 3%, and the such annuity shall
5 be increased by an additional 3% of the original fixed
6 annuity on the same date each year thereafter. Beginning
7 January 1, 1998, such increases shall be at the rate of 3% of
8 the currently payable monthly annuity, including any
9 increases previously granted under this Article.
10 (b) Subsection (a) The foregoing provision is not
11 applicable to an employee retiring and receiving a term
12 annuity., as herein defined, nor
13 Subsection (a) is not applicable to any otherwise
14 qualified employee who retires before he makes the employee
15 contributions specified in subsection (c) (at the 1/2 of 1%
16 rate as provided in this Act) for this additional annuity for
17 not less than the equivalent of one full year, unless the.
18 Such employee arranges at the time of retirement to pay,
19 however, shall make arrangement to pay to the Fund an amount,
20 a balance of such 1/2 of 1% contributions, based on his final
21 salary and, as will bring such 1/2 of 1% contributions,
22 computed without interest, that will bring his contributions
23 under subsection (c) to the equivalent of or completion of
24 one year's contributions.
25 (c) Beginning with January, 1960, each employee shall
26 contribute by means of salary deductions 0.5% 1/2 of 1% of
27 each salary payment, concurrently with and in addition to the
28 employee contributions otherwise made for annuity purposes.
29 Each such additional contribution shall be credited to an
30 account in the Prior Service Annuity Reserve, to be used,
31 together with city contributions, to defray the cost of the
32 specified annuity increments. Any balance in such account At
33 the beginning of each calendar year, the account shall be
34 credited with interest at the rate of 3% per annum.
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1 Such additional employee contributions are not
2 refundable, except to an employee who withdraws and applies
3 for a refund under this Article, and in cases where a term
4 annuity becomes payable. In such cases the employee's his
5 contributions shall be refunded, without interest, and
6 charged to the such account in the Prior Service Annuity
7 Reserve.
8 (Source: P.A. 84-1472.)
9 (40 ILCS 5/8-137.1) (from Ch. 108 1/2, par. 8-137.1)
10 Sec. 8-137.1. Automatic increases in annuity for certain
11 heretofore retired participants. A retired municipal
12 employee who (a) is receiving a retirement annuity based on a
13 service credit of 20 or more years of service credit
14 regardless of age at retirement, or based on a service credit
15 of 15 or more years of service credit with retirement at age
16 55 or over, and (b) does not qualify for the automatic
17 increases in annuity provided for in Section 8-137 of this
18 Article, and (c) elects to contribute make a contribution to
19 the Fund, at a time and in a manner prescribed by the
20 Retirement Board, of a sum equal to 1% of the amount of final
21 monthly salary times the number of full years of service on
22 which the annuity was based in those cases where the annuity
23 was computed on the money purchase formula, or and in those
24 cases in which the annuity was computed under the minimum
25 annuity formula provisions of this Article a sum equal to 1%
26 of the average monthly salary on which the annuity was based
27 times the such number of full years of service, shall have
28 his or her original fixed and payable monthly amount of
29 annuity increased in January of the year following the year
30 in which he attains the age of 65 years, if that such age of
31 65 years is attained in the year 1969 or later, by an amount
32 equal to 1.5% 1 1/2%, and by an equal additional 1.5% 1 1/2%
33 in January of each year thereafter. Beginning in with
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1 January of the year 1972, such increases shall be at the rate
2 of 2% in lieu of the aforesaid specified 1 1/2%, and
3 beginning in January of the year 1984, such increases shall
4 be at the rate of 3%. Beginning in January of 1998, such
5 increases shall be at the rate of 3% of the currently payable
6 monthly annuity, including any increases previously granted
7 under this Article.
8 A Whenever the retired municipal employee who is
9 receiving a retirement annuity and who has attained the age
10 of 66 or more in 1969 or before, he shall have the such
11 annuity increased in January, 1970 by an amount equal to 1.5%
12 of the originally granted annuity 1 1/2% multiplied by the
13 number of years that have elapsed equal to the number of
14 months of January elapsing from and including January of the
15 year immediately following the year he or she attained the
16 age of 65 if the employee retired at or before age 65, or
17 from and including January of the year immediately following
18 the year of retirement if the employee retired at an age
19 greater than 65, to and including January, 1970, and by an
20 equal additional 1.5% 1-1/2% in January of each year
21 thereafter. Beginning in with January of the year 1972, such
22 increases shall be at the rate of 2% in lieu of the aforesaid
23 specified 1 1/2%, and beginning in January of the year 1984,
24 such increases shall be at the rate of 3%. Beginning in
25 January of 1998, these increases shall be at the rate of 3%
26 of the currently payable monthly annuity, including any
27 increases previously granted under this Article.
28 To defray the annual cost of these such increases, the
29 annual interest income of the Fund, accruing from investments
30 held by the Fund, exclusive of gains or losses on sales or
31 exchanges of assets during the year, over and above 4% a
32 year, shall be used to the extent necessary and available to
33 finance the cost of the such increases for the following
34 year, and such amount shall be transferred as of the end of
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1 each year, beginning with the year 1969, to a Fund account
2 designated as the Supplementary Payment Reserve from the
3 Investment and Interest Reserve set forth in Section 8-221.
4 The sums contributed by annuitants under as provided for in
5 this Section shall also be placed in the aforesaid
6 Supplementary Payment Reserve and shall be applied and used
7 for the purposes of that such Fund account, together with the
8 aforesaid interest.
9 If In the event the monies in the Supplementary Payment
10 Reserve in any year arising from: (1) the available interest
11 income as defined hereinbefore and accruing in the preceding
12 year over above 4% a year and (2) the contributions by
13 retired persons, as set forth hereinbefore, are insufficient
14 to make the total payments to all persons estimated to be
15 entitled to the annuity increases specified in this Section
16 hereinbefore, then (3) any interest earnings over 4% a year
17 earned in beginning with the year 1969 or later that which
18 were not previously used to finance such increases and that
19 have been which were transferred to the Prior Service Annuity
20 Reserve may be used to the extent necessary and available to
21 provide sufficient funds to finance such increases for the
22 current year, and such sums shall be transferred to the
23 Supplementary Payment Reserve from the Prior Service Annuity
24 Reserve.
25 If In the event the total monies available in the
26 Supplementary Payment Reserve from the preceding indicated
27 sources are insufficient to make the total payments to all
28 persons entitled to such increases for the year, a
29 proportionate amount computed as the ratio of the monies
30 available to the total of the total payments for that year
31 shall be paid to each person for that year.
32 The Fund shall be obligated for the payment of the
33 increases in annuity under as provided for in this Section
34 only to the extent that the assets for such purpose, as
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1 specified herein, are available.
2 (Source: P.A. 83-802.)
3 (40 ILCS 5/8-138) (from Ch. 108 1/2, par. 8-138)
4 Sec. 8-138. Minimum annuities - Additional provisions.
5 (a) An employee who withdraws after age 65 or more with
6 at least 20 years of service, for whom the amount of age and
7 service and prior service annuity combined is less than the
8 amount stated in this Section, shall from the date of
9 withdrawal, instead of all annuities otherwise provided, be
10 entitled to receive an annuity for life of $150 a year, plus
11 1 1/2% for each year of service, to and including 20 years,
12 and 1 2/3% for each year of service over 20 years, of his
13 highest average annual salary for any 4 consecutive years
14 within the last 10 years of service immediately preceding the
15 date of withdrawal.
16 An employee who withdraws after 20 or more years of
17 service, before age 65, shall be entitled to such annuity, to
18 begin not earlier than upon attained age of 55 years if under
19 such age at withdrawal, reduced by 2% for each full year or
20 fractional part thereof that his attained age is less than
21 65, plus an additional 2% reduction for each full year or
22 fractional part thereof that his attained age when annuity is
23 to begin is less than 60 so that the total reduction at age
24 55 shall be 30%.
25 (b) An employee who withdraws after July 1, 1957, at age
26 60 or over, with 20 or more years of service, for whom the
27 age and service and prior service annuity combined, is less
28 than the amount stated in this paragraph, shall, from the
29 date of withdrawal, instead of such annuities, be entitled to
30 receive an annuity for life equal to 1 2/3% for each year of
31 service, of the highest average annual salary for any 5
32 consecutive years within the last 10 years of service
33 immediately preceding the date of withdrawal; provided, that
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1 in the case of any employee who withdraws on or after July 1,
2 1971, such employee age 60 or over with 20 or more years of
3 service, shall receive an annuity for life equal to 1.67% for
4 each of the first 10 years of service; 1.90% for each of the
5 next 10 years of service; 2.10% for each year of service in
6 excess of 20 but not exceeding 30; and 2.30% for each year of
7 service in excess of 30, based on the highest average annual
8 salary for any 4 consecutive years within the last 10 years
9 of service immediately preceding the date of withdrawal.
10 An employee who withdraws after July 1, 1957 and before
11 January 1, 1988, with 20 or more years of service, before
12 age 60 years is entitled to annuity, to begin not earlier
13 than upon attained age of 55 years, if under such age at
14 withdrawal, as computed in the last preceding paragraph,
15 reduced 0.25% for each full month or fractional part thereof
16 that his attained age when annuity is to begin is less than
17 60 if the employee was born before January 1, 1936, or 0.5%
18 for each such month if the employee was born on or after
19 January 1, 1936.
20 Any employee born before January 1, 1936, who withdraws
21 with 20 or more years of service, and any employee with 20 or
22 more years of service who withdraws on or after January 1,
23 1988, may elect to receive, in lieu of any other employee
24 annuity provided in this Section, an annuity for life equal
25 to 1.80% for each of the first 10 years of service, 2.00% for
26 each of the next 10 years of service, 2.20% for each year of
27 service in excess of 20 but not exceeding 30, and 2.40% for
28 each year of service in excess of 30, of the highest average
29 annual salary for any 4 consecutive years within the last 10
30 years of service immediately preceding the date of
31 withdrawal, to begin not earlier than upon attained age of 55
32 years, if under such age at withdrawal, reduced 0.25% for
33 each full month or fractional part thereof that his attained
34 age when annuity is to begin is less than 60; except that an
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1 employee retiring on or after January 1, 1988, at age 55 or
2 over but less than age 60, having at least 35 years of
3 service, or an employee retiring on or after July 1, 1990, at
4 age 55 or over but less than age 60, having at least 30 years
5 of service, shall not be subject to the reduction in
6 retirement annuity because of retirement below age 60.
7 However, in the case of an employee who retired on or
8 after January 1, 1985 but before January 1, 1988, at age 55
9 or older and with at least 35 years of service, and who was
10 subject under this subsection (b) to the reduction in
11 retirement annuity because of retirement below age 60, that
12 reduction shall cease to be effective January 1, 1991, and
13 the retirement annuity shall be recalculated accordingly.
14 Any employee who withdraws on or after July 1, 1990, with
15 20 or more years of service, may elect to receive, in lieu of
16 any other employee annuity provided in this Section, an
17 annuity for life equal to 2.20% for each year of service of
18 the highest average annual salary for any 4 consecutive years
19 within the last 10 years of service immediately preceding the
20 date of withdrawal, to begin not earlier than upon attained
21 age of 55 years, if under such age at withdrawal, reduced
22 0.25% for each full month or fractional part thereof that his
23 attained age when annuity is to begin is less than 60; except
24 that an employee retiring at age 55 or over but less than age
25 60, having at least 30 years of service, shall not be subject
26 to the reduction in retirement annuity because of retirement
27 below age 60.
28 The maximum annuity payable under part (a) and (b) of
29 this Section shall not exceed 70% of highest average annual
30 salary in the case of an employee who withdraws prior to July
31 1, 1971, and 75% if withdrawal takes place on or after July
32 1, 1971. For the purpose of the minimum annuity provided in
33 this Section $1,500 is considered the minimum annual salary
34 for any year; and the maximum annual salary for the
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1 computation of such annuity is $4,800 for any year before
2 1953, $6000 for the years 1953 to 1956, inclusive, and the
3 actual annual salary, as salary is defined in this Article,
4 for any year thereafter.
5 To preserve rights existing on December 31, 1959, for
6 participants and contributors on that date to the fund
7 created by the Court and Law Department Employees' Annuity
8 Act, who became participants in the fund provided for on
9 January 1, 1960, the maximum annual salary to be considered
10 for such persons for the years 1955 and 1956 is $7,500.
11 (c) For an employee receiving disability benefit, his
12 salary for annuity purposes under paragraphs (a) and (b) of
13 this Section, for all periods of disability benefit
14 subsequent to the year 1956, is the amount on which his
15 disability benefit was based.
16 (d) An employee with 20 or more years of service, whose
17 entire disability benefit credit period expires before
18 attainment of age 55 while still disabled for service is
19 entitled upon withdrawal to the larger of (1) the minimum
20 annuity provided above, assuming he is then age 55, and
21 reducing such annuity to its actuarial equivalent as of his
22 attained age on such date or (2) the annuity provided from
23 his age and service and prior service annuity credits.
24 (e) The minimum annuity provisions do not apply to any
25 former municipal employee receiving an annuity from the fund
26 who re-enters service as a municipal employee, unless he
27 renders at least 3 years of additional service after the date
28 of re-entry.
29 (f) An employee in service on July 1, 1947, or who
30 became a contributor after July 1, 1947 and before attainment
31 of age 70, who withdraws after age 65, with less than 20
32 years of service for whom the annuity has been fixed under
33 this Article shall, instead of the annuity so fixed, receive
34 an annuity as follows:
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1 Such amount as he could have received had the accumulated
2 amounts for annuity been improved with interest at the
3 effective rate to the date of his withdrawal, or to
4 attainment of age 70, whichever is earlier, and had the city
5 contributed to such earlier date for age and service annuity
6 the amount that it would have contributed had he been under
7 age 65, after the date his annuity was fixed in accordance
8 with this Article, and assuming his annuity were computed
9 from such accumulations as of his age on such earlier date.
10 The annuity so computed shall not exceed the annuity which
11 would be payable under the other provisions of this Section
12 if the employee was credited with 20 years of service and
13 would qualify for annuity thereunder.
14 (g) Instead of the annuity provided in this Article, an
15 employee having attained age 65 with at least 15 years of
16 service who withdraws from service on or after July 1, 1971
17 and whose annuity computed under other provisions of this
18 Article is less than the amount provided under this
19 paragraph, is entitled to a minimum annuity for life equal to
20 1% of the highest average annual salary, as salary is defined
21 and limited in this Section for any 4 consecutive years
22 within the last 10 years of service for each year of service,
23 plus the sum of $25 for each year of service. The annuity
24 shall not exceed 60% of such highest average annual salary.
25 (h) Instead of any other retirement annuity provided in
26 this Article, an employee who has at least 10 years of
27 service and withdraws from service on or after January 1,
28 1998, may elect to receive a retirement annuity for life,
29 beginning no earlier than upon attainment of age 50, equal to
30 2.2% of final average salary for each year of service,
31 subject to a maximum of 75% of final average salary. If the
32 annuitant is less than age 60 when the annuity begins, it
33 shall be reduced by 0.25% for each year that the annuitant is
34 less than age 60, unless the annuitant has at least 30 years
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1 of service. For the purpose of calculating this annuity,
2 "final average salary" means the highest average annual
3 salary for any 4 consecutive years in the last 10 years of
4 service.
5 (i) The minimum annuities provided under this Section
6 shall be paid in equal monthly installments.
7 (j) (i) The amendatory provisions of part (b) and (g) of
8 this Section shall be effective July 1, 1971 and apply in the
9 case of every qualifying employee withdrawing on or after
10 July 1, 1971.
11 (j) The amendatory provisions of this amendatory Act of
12 1985 (P.A. 84-23) relating to the discount of annuity because
13 of retirement prior to attainment of age 60, and to the
14 retirement formula, for those born before January 1, 1936,
15 shall apply only to qualifying employees withdrawing on or
16 after July 18, 1985.
17 (k) Beginning January 1, 1991, the minimum amount of
18 employee's annuity shall be $350 per month for life for the
19 following classes of employees, without regard to the fact
20 that withdrawal occurred prior to January 1, 1991:
21 (1) any employee annuitant alive and receiving a
22 life annuity on January 1, 1991, except a reciprocal
23 annuity;
24 (2) any employee annuitant alive and receiving a
25 term annuity on January 1, 1991, except a reciprocal
26 annuity;
27 (3) any employee annuitant alive and receiving a
28 reciprocal annuity on January 1, 1991, whose service in
29 this fund is at least 5 years;
30 (4) any employee annuitant withdrawing after age 60
31 on or after January 1, 1991, with at least 10 years of
32 service in this fund.
33 The increases granted under items (1), (2) and (3) of
34 this subsection (k) shall not be limited by any other Section
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1 of this Act.
2 (Source: P.A. 85-964; 86-1488.)
3 (40 ILCS 5/8-244.1) (from Ch. 108 1/2, par. 8-244.1)
4 Sec. 8-244.1. Payment of annuity other than direct.
5 (a) The board, at the written direction and request of
6 any annuitant, may, solely as an accommodation to such
7 annuitant, pay the annuity due him to a bank, savings and
8 loan association or any other financial institution insured
9 by an agency of the Federal Government, for deposit to his
10 account, or to a bank or trust company for deposit in a trust
11 established by him for his benefit with such bank, savings
12 and loan association or trust company, and such annuitant may
13 withdraw such direction at any time. The board may also, in
14 the case of any disability beneficiary or annuitant for whom
15 no estate guardian has been appointed and who is confined in
16 a publicly owned and operated mental institution, pay such
17 disability benefit or annuity due such person to the
18 Superintendent or other head of such institution or hospital
19 for deposit to such person's trust fund account maintained
20 for him by such institution or hospital, if by law such trust
21 fund accounts are authorized or recognized.
22 (b) An annuitant may authorize the withholding of a
23 portion of his or her annuity for payment of dues to any
24 labor organization designated by the annuitant; however, no
25 portion of annuities may be withheld under this subsection
26 for payment to any one labor organization unless a minimum of
27 100 annuitants authorize the withholding, except that the
28 Board may allow withholding for less than 100 annuitants
29 during a probationary period of between 3 and 6 months, as
30 determined by the Board. The Board shall prescribe a form
31 for the authorization of withholding, and shall provide such
32 forms to employees, annuitants, and labor organizations upon
33 request. Amounts withheld by the Board under this subsection
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1 shall be promptly paid over to the designated organizations.
2 Any such labor organization shall have access to the
3 Fund's mailing list of annuitants, upon such terms as the
4 Board may approve. The expenses of any mailing conducted by
5 the labor organization shall be borne by the labor
6 organization.
7 (Source: P.A. 83-1362.)
8 Section 10. The State Mandates Act is amended by adding
9 Section 8.21 as follows:
10 (30 ILCS 805/8.21 new)
11 Sec. 8.21. Exempt mandate. Notwithstanding Sections 6
12 and 8 of this Act, no reimbursement by the State is required
13 for the implementation of any mandate created by this
14 amendatory Act of 1997.
15 Section 99. Effective date. This Act takes effect upon
16 becoming law.