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90_HB0593eng
40 ILCS 5/3-109 from Ch. 108 1/2, par. 3-109
40 ILCS 5/3-109.1 from Ch. 108 1/2, par. 3-109.1
40 ILCS 5/3-110 from Ch. 108 1/2, par. 3-110
40 ILCS 5/3-110.7 new
40 ILCS 5/3-111 from Ch. 108 1/2, par. 3-111
40 ILCS 5/7-109 from Ch. 108 1/2, par. 7-109
40 ILCS 5/7-139.9 new
30 ILCS 805/8.21 new
Amends the Illinois Pension Code to allow active members
to transfer credits between downstate police pension funds.
Requires payment of any resulting additional cost to the
fund. Allows a person with less than 8 years of creditable
service to receive a retirement pension from a police pension
fund, if the person has at least 8 years of credit in another
police pension fund and is receiving a retirement pension.
Allows reinstatement of service terminated by refund. Allows
chiefs who have elected to participate in IMRF to rescind
that election until January 1, 1999 and to transfer certain
credits back to the police pension fund. 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 3-109, 3-109.1, 3-110, 3-111, and 7-109 and adding
3 Sections 3-110.7 and 7-139.9 and to amend the State Mandates
4 Act.
5 Be it enacted by the People of the State of Illinois,
6 represented in the General Assembly:
7 Section 5. The Illinois Pension Code is amended by
8 changing Sections 3-109, 3-109.1, 3-110, 3-111, and 7-109 and
9 adding Sections 3-110.7 and 7-139.9 as follows:
10 (40 ILCS 5/3-109) (from Ch. 108 1/2, par. 3-109)
11 Sec. 3-109. Persons excluded.
12 (a) The following persons shall not be eligible to
13 participate in a fund created under this Article:
14 (1) part-time police officers, special police
15 officers, night watchmen, temporary employees, traffic
16 guards or so-called auxiliary police officers specially
17 appointed to aid or direct traffic at or near schools or
18 public functions, or to aid in civil defense, municipal
19 parking lot attendants, clerks or other civilian
20 employees of a police department who perform clerical
21 duties exclusively;
22 (2) any police officer who fails to pay the
23 contributions required under Section 3-125.1, computed
24 (i) for funds established prior to August 5, 1963, from
25 the date the municipality established the fund or the
26 date of a police officer's first appointment (including
27 an appointment on probation), whichever is later, or
28 (ii) for funds established after August 5, 1963, from the
29 date, as determined from the statistics or census
30 provided in Section 3-103, the municipality became
31 subject to this Article by attaining the minimum
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1 population or by referendum, or the date of a police
2 officer's first appointment (including an appointment on
3 probation), whichever is later, and continuing during his
4 or her entire service as a police officer; and
5 (3) any person who has elected under Section 3-109.1
6 to participate in the Illinois Municipal Retirement Fund
7 rather than in a fund established under this Article,
8 without regard to whether the person continues to be
9 employed as chief of police or is employed in some other
10 rank or capacity within the police department, unless the
11 person has lawfully rescinded that election.
12 (b) A police officer who is reappointed shall, before
13 being declared eligible to participate in the pension fund,
14 repay to the fund as required by Section 3-124 any refund
15 received thereunder.
16 (c) Any person otherwise qualified to participate who
17 was excluded from participation by reason of the age
18 restriction removed by Public Act 79-1165 may elect to
19 participate by making a written application to the Board
20 before January 1, 1990. Persons so electing shall begin
21 participation on the first day of the month following the
22 date of application. Such persons may also elect to
23 establish creditable service for periods of employment as a
24 police officer during which they did not participate by
25 paying into the police pension fund, before January 1, 1990,
26 the amount that the person would have contributed had
27 deductions from salary been made for such purpose at the time
28 such service was rendered, together with interest thereon at
29 6% per annum from the time such service was rendered until
30 the date the payment is made.
31 (d) A person otherwise qualified to participate who was
32 excluded from participation by reason of the fitness
33 requirement removed by this amendatory Act of 1995 may elect
34 to participate by making a written application to the Board
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1 before July 1, 1996. Persons so electing shall begin
2 participation on the first day of the month following the
3 month in which the application is received by the Board.
4 These persons may also elect to establish creditable service
5 for periods of employment as a police officer during which
6 they did not participate by paying into the police pension
7 fund, before January 1, 1997, the amount that the person
8 would have contributed had deductions from salary been made
9 for this purpose at the time the service was rendered,
10 together with interest thereon at 6% per annum, compounded
11 annually, from the time the service was rendered until the
12 date of payment.
13 (Source: P.A. 89-52, eff. 6-30-95.)
14 (40 ILCS 5/3-109.1) (from Ch. 108 1/2, par. 3-109.1)
15 Sec. 3-109.1. Chief of police.
16 (a) Beginning January 1, 1990, any person who is
17 employed as the chief of police of a "participating
18 municipality" as defined in Section 7-106 of this Code, may
19 elect to participate in the Illinois Municipal Retirement
20 Fund rather than in a fund created under this Article 3.
21 Except as provided in subsection (b), this Such election
22 shall be irrevocable, and shall be filed in writing with the
23 Board of the Illinois Municipal Retirement Fund.
24 (b) Until January 1, 1999, a chief of police who has
25 elected under this Section to participate in IMRF rather than
26 a fund created under this Article may elect to rescind that
27 election and transfer his or her participation to the police
28 pension fund established under this Article by the employing
29 municipality. The chief must notify the boards of trustees
30 of both funds in writing of his or her decision to rescind
31 the election and transfer participation. A chief of police
32 who transfers participation under this subsection (b) shall
33 not be deemed ineligible to participate in the police pension
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1 fund by reason of having failed to apply within the 3-month
2 period specified in Section 3-106.
3 (Source: P.A. 86-273.)
4 (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
5 Sec. 3-110. Creditable service.
6 (a) "Creditable service" is the time served by a police
7 officer as a member of a regularly constituted police force
8 of a municipality. In computing creditable service furloughs
9 without pay exceeding 30 days shall not be counted, but all
10 leaves of absence for illness or accident, regardless of
11 length, and all periods of disability retirement for which a
12 police officer has received no disability pension payments
13 under this Article shall be counted.
14 (b) Creditable service includes all periods of service
15 in the military, naval or air forces of the United States
16 entered upon while an active police officer of a
17 municipality, provided that upon applying for a permanent
18 pension, and in accordance with the rules of the board, the
19 police officer pays into the fund the amount the officer
20 would have contributed if he or she had been a regular
21 contributor during such period, to the extent that the
22 municipality which the police officer served has not made
23 such contributions in the officer's behalf. The total amount
24 of such creditable service shall not exceed 5 years, except
25 that any police officer who on July 1, 1973 had more than 5
26 years of such creditable service shall receive the total
27 amount thereof.
28 (c) Creditable service also includes service rendered by
29 a police officer while on leave of absence from a police
30 department to serve as an executive of an organization whose
31 membership consists of members of a police department,
32 subject to the following conditions: (i) the police officer
33 is a participant of a fund established under this Article
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1 with at least 10 years of service as a police officer; (ii)
2 the police officer received no credit for such service under
3 any other retirement system, pension fund, or annuity and
4 benefit fund included in this Code; (iii) pursuant to the
5 rules of the board the police officer pays to the fund the
6 amount he or she would have contributed had the officer been
7 an active member of the police department; and (iv) the
8 organization pays a contribution equal to the municipality's
9 normal cost for that period of service.
10 (d)(1) Creditable service also includes periods of
11 service originally established in another police pension fund
12 under this Article or in the Fund established under Article 7
13 of this Code for which (i) the contributions have been
14 transferred under Section 3-110.7 or Section 7-139.9 and (ii)
15 any additional contribution required under paragraph (2) of
16 this subsection has been paid in full in accordance with the
17 requirements of this subsection (d).
18 (2) If the board of the pension fund to which creditable
19 service and related contributions are transferred under
20 Section 3-110.7 or 7-139.9 determines that the amount
21 transferred is less than the true cost to the pension fund of
22 allowing that creditable service to be established, then in
23 order to establish that creditable service the police officer
24 must pay to the pension fund, within the payment period
25 specified in paragraph (3) of this subsection, an additional
26 contribution equal to the difference, as determined by the
27 board in accordance with the rules and procedures adopted
28 under paragraph (6) of this subsection.
29 (3) Except as provided in paragraph (4), the additional
30 contribution must be paid to the board (i) within 5 years
31 from the date of the transfer of contributions under Section
32 3-110.7 or 7-139.9 and (ii) before the police officer
33 terminates service with the fund. The additional
34 contribution may be paid in a lump sum or in accordance with
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1 a schedule of installment payments authorized by the board.
2 (4) If the police officer dies in service before payment
3 in full has been made and before the expiration of the 5-year
4 payment period, the surviving spouse of the officer may elect
5 to pay the unpaid amount on the officer's behalf within 6
6 months after the date of death, in which case the creditable
7 service shall be granted as though the deceased police
8 officer had paid the remaining balance on the day before the
9 date of death.
10 (5) If the additional contribution is not paid in full
11 within the required time, the creditable service shall not be
12 granted and the police officer (or the officer's surviving
13 spouse or estate) shall be entitled to receive a refund of
14 (i) any partial payment of the additional contribution that
15 has been made by the police officer and (ii) those portions
16 of the amounts transferred under subdivision (a)(1) of
17 Section 3-110.7 or subdivisions (a)(1) and (a)(3) of Section
18 7-139.9 that represent employee contributions paid by the
19 police officer (but not the accumulated interest on those
20 contributions) and interest paid by the police officer to the
21 prior pension fund in order to reinstate service terminated
22 by acceptance of a refund.
23 Transferred credit that is not granted due to failure to
24 pay the additional contribution within the required time is
25 lost; it may not be transferred to another pension fund and
26 may not be reinstated in the pension fund from which it was
27 transferred.
28 (6) The Public Employee Pension Fund Division of the
29 Department of Insurance shall establish by rule the manner of
30 making the calculation required under paragraph (2) of this
31 subsection, taking into account the appropriate actuarial
32 assumptions; the police officer's service, age, and salary
33 history; the level of funding of the pension fund to which
34 the credits are being transferred; and any other factors that
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1 the Division determines to be relevant. The rules may
2 require that all calculations made under paragraph (2) be
3 reported to the Division by the board performing the
4 calculation, together with documentation of the creditable
5 service to be transferred, the amounts of contributions and
6 interest to be transferred, the manner in which the
7 calculation was performed, the numbers relied upon in making
8 the calculation, the results of the calculation, and any
9 other information the Division may deem useful.
10 (Source: P.A. 89-52, eff. 6-30-95.)
11 (40 ILCS 5/3-110.7 new)
12 Sec. 3-110.7. Transfer between Article 3 funds.
13 (a) An active member of a pension fund established under
14 this Article may apply for transfer to that fund of his or
15 her creditable service and related contributions accumulated
16 in any other police pension fund established under this
17 Article, except that a police officer may not transfer
18 creditable service under this Section from the pension fund
19 established by the municipality that was his or her first
20 police employer unless (i) the police officer actively served
21 in the police department of that municipality for at least 4
22 years or (ii) the police officer is not in service with that
23 employer on or after the effective date of this Section.
24 Upon receiving the application, that other pension fund shall
25 transfer to the pension fund in which the applicant currently
26 participates an amount equal to:
27 (1) the amounts actually contributed by or on
28 behalf of the applicant to the fund as employee
29 contributions (including any interest paid by the
30 applicant in order to reinstate service), plus interest
31 on those amounts at the rate of 6% per year, compounded
32 annually, from the date of contribution to the date of
33 transfer; plus
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1 (2) an amount representing employer contributions,
2 equal to the total amount determined under subdivision
3 (1).
4 Participation in that other pension fund shall terminate on
5 the date of transfer.
6 (b) An active member of a pension fund established under
7 this Article may reinstate service in any other pension fund
8 established under this Article that was terminated by receipt
9 of a refund, by paying to that other pension fund the amount
10 of the refund plus interest thereon at the rate of 6% per
11 year, compounded annually, from the date of refund to the
12 date of payment.
13 (40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111)
14 Sec. 3-111. Pension.
15 (a) A police officer age 50 or more with 20 or more
16 years of creditable service, who is no longer in service as a
17 police officer, shall receive a pension of 1/2 of the salary
18 attached to the rank held by the officer on the police force
19 for one year immediately prior to retirement or, beginning
20 July 1, 1987 for persons terminating service on or after that
21 date, the salary attached to the rank held on the last day of
22 service or for one year prior to the last day, whichever is
23 greater. The pension shall be increased by 2% of such salary
24 for each additional year of service over 20 years, up to 30
25 years, and 1% of such salary for each additional year of
26 service over 30 years, to a maximum of 75% of such salary.
27 No pension in effect on or granted after June 30, l973 shall
28 be less than $200 per month. Beginning July 1, 1987, the
29 minimum retirement pension for a police officer having at
30 least 20 years of creditable service shall be $400 per month,
31 without regard to whether or not retirement occurred prior to
32 that date.
33 (b) A police officer mandatorily retired from service
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1 due to age by operation of law, having at least 8 but less
2 than 20 years of creditable service, shall receive a pension
3 equal to 2 1/2% of the salary attached to the rank he or she
4 held on the police force for one year immediately prior to
5 retirement or, beginning July 1, 1987 for persons terminating
6 service on or after that date, the salary attached to the
7 rank held on the last day of service or for one year prior to
8 the last day, whichever is greater, for each year of
9 creditable service.
10 A police officer who retires or is separated from service
11 having at least 8 years but less than 20 years of creditable
12 service, who is not mandatorily retired due to age by
13 operation of law, and who does not apply for a refund of
14 contributions at his or her last separation from police
15 service, shall receive a pension upon attaining age 60 equal
16 to 2.5% of the salary attached to the rank held by the police
17 officer on the police force for one year immediately prior to
18 retirement or, beginning July 1, 1987 for persons terminating
19 service on or after that date, the salary attached to the
20 rank held on the last day of service or for one year prior to
21 the last day, whichever is greater, for each year of
22 creditable service.
23 (c) A police officer no longer in service who has at
24 least one but less than 8 years of creditable service in a
25 police pension fund but meets the requirements of this
26 subsection (c) shall be eligible to receive a pension from
27 that fund equal to 2.5% of the salary attached to the rank
28 held on the last day of service under that fund or for one
29 year prior to that last day, whichever is greater, for each
30 year of creditable service in that fund. The pension shall
31 begin no earlier than upon attainment of age 60 (or upon
32 mandatory retirement from the fund by operation of law due to
33 age, if that occurs before age 60) and in no event before the
34 effective date of this amendatory Act of 1997.
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1 In order to be eligible for a pension under this
2 subsection (c), the police officer must have at least 8 years
3 of creditable service in a second police pension fund under
4 this Article and be receiving a pension under subsection (a)
5 or (b) of this Section from that second fund. The police
6 officer need not be in service on or after the effective date
7 of this amendatory Act of 1997.
8 (Source: P.A. 85-941.)
9 (40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
10 Sec. 7-109. Employee.
11 (1) "Employee" means any person who:
12 (a) 1. Receives earnings as payment for the
13 performance of personal services or official duties
14 out of the general fund of a municipality, or out of
15 any special fund or funds controlled by a
16 municipality, or by an instrumentality thereof, or a
17 participating instrumentality, including, in
18 counties, the fees or earnings of any county fee
19 office; and
20 2. Under the usual common law rules applicable
21 in determining the employer-employee relationship,
22 has the status of an employee with a municipality,
23 or any instrumentality thereof, or a participating
24 instrumentality, including aldermen, county
25 supervisors and other persons (excepting those
26 employed as independent contractors) who are paid
27 compensation, fees, allowances or other emolument
28 for official duties, and, in counties, the several
29 county fee offices.
30 (b) Serves as a township treasurer appointed under
31 the School Code, as heretofore or hereafter amended, and
32 who receives for such services regular compensation as
33 distinguished from per diem compensation, and any regular
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1 employee in the office of any township treasurer whether
2 or not his earnings are paid from the income of the
3 permanent township fund or from funds subject to
4 distribution to the several school districts and parts of
5 school districts as provided in the School Code, or from
6 both such sources.
7 (c) Holds an elective office in a municipality,
8 instrumentality thereof or participating instrumentality.
9 (2) "Employee" does not include persons who:
10 (a) Are eligible for inclusion under any of the
11 following laws:
12 1. "An Act in relation to an Illinois State
13 Teachers' Pension and Retirement Fund", approved May
14 27, 1915, as amended;
15 2. Articles 15 and 16 of this Code.
16 However, such persons shall be included as employees
17 to the extent of earnings that are not eligible for
18 inclusion under the foregoing laws for services not of an
19 instructional nature of any kind.
20 However, any member of the armed forces who is
21 employed as a teacher of subjects in the Reserve Officers
22 Training Corps of any school and who is not certified
23 under the law governing the certification of teachers
24 shall be included as an employee.
25 (b) Are designated by the governing body of a
26 municipality in which a pension fund is required by law
27 to be established for policemen or firemen, respectively,
28 as performing police or fire protection duties, except
29 that when such persons are the heads of the police or
30 fire department and are not eligible to be included
31 within any such pension fund, they shall be included
32 within this Article; provided, that such persons shall
33 not be excluded to the extent of concurrent service and
34 earnings not designated as being for police or fire
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1 protection duties. However, (i) any head of a police
2 department who was a participant under this Article
3 immediately before October 1, 1977 and did not elect,
4 under Section 3-109 of this Act, to participate in a
5 police pension fund shall be an "employee", and (ii) any
6 chief of police who elects to participate in this Fund
7 under Section 3-109.1 of this Code, regardless of whether
8 such person continues to be employed as chief of police
9 or is employed in some other rank or capacity within the
10 police department, shall be an employee under this
11 Article for so long as such person is employed to perform
12 police duties by a participating municipality and has not
13 lawfully rescinded that election.
14 (3) All persons, including, without limitation, public
15 defenders and probation officers, who receive earnings from
16 general or special funds of a county for performance of
17 personal services or official duties within the territorial
18 limits of the county, are employees of the county (unless
19 excluded by subsection (2) of this Section) notwithstanding
20 that they may be appointed by and are subject to the
21 direction of a person or persons other than a county board or
22 a county officer. It is hereby established that an
23 employer-employee relationship under the usual common law
24 rules exists between such employees and the county paying
25 their salaries by reason of the fact that the county boards
26 fix their rates of compensation, appropriate funds for
27 payment of their earnings and otherwise exercise control over
28 them. This finding and this amendatory Act shall apply to
29 all such employees from the date of appointment whether such
30 date is prior to or after the effective date of this
31 amendatory Act and is intended to clarify existing law
32 pertaining to their status as participating employees in the
33 Fund.
34 (Source: P.A. 86-273; 86-820; 86-1028.)
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1 (40 ILCS 5/7-139.9 new)
2 Sec. 7-139.9. Transfer to Article 3 pension fund.
3 (a) Until January 1, 1999, a person who has lawfully
4 rescinded an election to participate in this Fund under
5 Section 3-109.1 and has become an active participant in a
6 police pension fund established under Article 3 of this Code
7 may apply for transfer to that Article 3 fund of his or her
8 creditable service accumulated under this Article for
9 municipal law enforcement service. At the time of the
10 transfer the Fund shall pay to the police pension fund an
11 amount equal to:
12 (1) the amounts accumulated to the credit of the
13 applicant for municipal law enforcement service,
14 including interest; and
15 (2) the municipality credits based on that service,
16 including interest; and
17 (3) any interest paid by the applicant in order to
18 reinstate that service.
19 Participation in this Fund with respect to the transferred
20 credits shall terminate on the date of transfer.
21 For the purposes of this Section, "municipal law
22 enforcement service" means service with the police department
23 of a participating municipality for which the applicant
24 established creditable service under this Article as a result
25 of an election under Section 3-109.1 of this Code.
26 (b) An active member of a pension fund established under
27 Article 3 of this Code may reinstate municipal law
28 enforcement service under this Article that was terminated by
29 receipt of a refund, by paying to the Fund the amount of the
30 refund plus interest thereon at the rate of 6% per year,
31 compounded annually, from the date of refund to the date of
32 payment.
33 (c) A chief of police who participates in this Fund as a
34 result of an election under Section 3-109.1 may rescind that
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1 election and transfer his or her participation from this Fund
2 to a police pension fund established under Article 3 of this
3 Code in which he or she is eligible to participate, as
4 provided in Section 3-109.1(b). A transfer of participation
5 under this subsection (c) and Section 3-109.1(b) is
6 irrevocable.
7 Section 90. The State Mandates Act is amended by adding
8 Section 8.21 as follows:
9 (30 ILCS 805/8.21 new)
10 Sec. 8.21. Exempt mandate. Notwithstanding Sections 6
11 and 8 of this Act, no reimbursement by the State is required
12 for the implementation of any mandate created by this
13 amendatory Act of 1997.
14 Section 99. Effective date. This Act takes effect upon
15 becoming law.