State of Illinois
90th General Assembly
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90_HB2636

      40 ILCS 5/4-106           from Ch. 108 1/2, par. 4-106
      40 ILCS 5/4-107           from Ch. 108 1/2, par. 4-107
      40 ILCS 5/4-118           from Ch. 108 1/2, par. 4-118
      40 ILCS 5/15-106          from Ch. 108 1/2, par. 15-106
      40 ILCS 5/15-107          from Ch. 108 1/2, par. 15-107
      40 ILCS 5/15-136          from Ch. 108 1/2, par. 15-136
      40 ILCS 5/15-154          from Ch. 108 1/2, par. 15-154
      40 ILCS 5/15-155          from Ch. 108 1/2, par. 15-155
      40 ILCS 5/15-157          from Ch. 108 1/2, par. 15-157
      40 ILCS 5/15-158.2
      40 ILCS 5/15-181          from Ch. 108 1/2, par. 15-181
      30 ILCS 805/8.22 new
          Amends the Illinois Pension  Code.   Provides  that  upon
      elimination  of  the  University of Illinois Fire Department,
      its firefighters may continue to  participate  in  the  State
      Universities  Retirement  System and earn firefighter service
      credit so long as they are continuously employed (i)  in  any
      capacity   by   the   University   of  Illinois  or  (ii)  as
      firefighters by the City of Champaign or the City of  Urbana,
      in  which  case  the  city  is  obligated  to  make  employer
      contributions  to  the System.  Amends the State Mandates Act
      to require implementation without reimbursement.    Effective
      immediately.
                                                     LRB9008485EGfg
                                               LRB9008485EGfg
 1        AN ACT to amend certain Acts in relation to pensions.
 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
 5    changing   Sections  4-106,  4-107,  4-118,  15-106,  15-107,
 6    15-136, 15-154,  15-155,  15-157,  15-158.2,  and  15-181  as
 7    follows:
 8        (40 ILCS 5/4-106) (from Ch. 108 1/2, par. 4-106)
 9        Sec.  4-106.   Firefighter,  firefighters.  "Firefighter,
10    firefighters":
11        (a)  In municipalities which have adopted Division  1  of
12    Article  10  of  the  Illinois  Municipal  Code,  any  person
13    employed in the municipality's fire service as a firefighter,
14    fire  engineer,  marine engineer, fire pilot, bomb technician
15    or scuba diver; and in any  of  these  positions  where  such
16    person's  duties  also  include  those  of  a  firefighter as
17    classified by the Civil Service Commission of that city,  and
18    whose  duty  is to participate in the work of controlling and
19    extinguishing fires at the location of any such fires.; and
20        (b)  In municipalities which are subject to Division  2.1
21    of  Article  10  of  the  Illinois Municipal Code, any person
22    employed by a city in its fire service as a firefighter, fire
23    engineer, marine engineer, fire pilot,  bomb  technician,  or
24    scuba diver; and, in any of these positions whose duties also
25    include  those of a firefighter and are certified in the same
26    manner as a firefighter in that city.; and
27        (c)  In  municipalities  which  are  subject  to  neither
28    Division 1 nor Division 2.1 of Article  10  of  the  Illinois
29    Municipal  Code, any person who would have been included as a
30    firefighter under sub-paragraph (a) or (b) above except  that
31    he served as a de facto and not as a de jure firefighter.
                            -2-                LRB9008485EGfg
 1        (d)  Notwithstanding   the   other   provisions  of  this
 2    Section, "firefighter" does not include  any  person  who  is
 3    actively  participating  in the State Universities Retirement
 4    System under subsection (h) of Section 15-107 with respect to
 5    the employment  for  which  he  or  she  is  a  participating
 6    employee in that System.
 7        (e)  This  amendatory Act of 1977 does not affect persons
 8    covered by this Article prior to September 22, 1977.
 9    (Source: P.A. 83-1440.)
10        (40 ILCS 5/4-107) (from Ch. 108 1/2, par. 4-107)
11        Sec. 4-107.  Qualifications.
12        (a)  A firefighter who has not contributed  to  the  fund
13    during  the  entire  period of service, to be entitled to the
14    benefits of this Article, must contribute  to  the  fund  the
15    amount  he  or  she  would have paid had deductions been made
16    from his or her salary during the entire period of his or her
17    creditable service.
18        (b)  Any  person  appointed  as  a   firefighter   in   a
19    municipality  shall,  within  3 months after receiving his or
20    her  first  appointment  and  within  3  months   after   any
21    reappointment  make  written application to the board to come
22    under the provisions of this Article.
23        (c)  A person otherwise qualified to participate who  was
24    excluded  from  participation by reason of the age or fitness
25    requirements removed by this amendatory Act of 1995 may elect
26    to participate by making a written application to  the  Board
27    before  July  1,  1996.   Persons  so  electing  shall  begin
28    participation  on  the  first  day of the month following the
29    month in which the application  is  received  by  the  Board.
30    These  persons may also elect to establish creditable service
31    for periods of employment as a firefighter during which  they
32    did  not  participate by paying into the pension fund, before
33    January 1, 1997,  the  amount  that  the  person  would  have
                            -3-                LRB9008485EGfg
 1    contributed  had  deductions  from  salary been made for this
 2    purpose at the time the service was rendered,  together  with
 3    interest  thereon  at 6% per annum, compounded annually, from
 4    the time the service was rendered until the date of payment.
 5        (d)  A person described  in  subsection  (h)  of  Section
 6    15-107  shall not participate in any pension fund established
 7    under this Article with respect to employment for which he or
 8    she is a participating employee  in  the  State  Universities
 9    Retirement System.
10    (Source: P.A. 89-52, eff. 6-30-95.)
11        (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
12        Sec. 4-118.  Financing.
13        (a)  The  city  council  or  the board of trustees of the
14    municipality shall annually levy a tax upon all  the  taxable
15    property  of the municipality at the rate on the dollar which
16    will produce an amount which, when added  to  the  deductions
17    from  the  salaries  or  wages  of  firefighters and revenues
18    available from other sources, will equal a sum sufficient  to
19    meet  the  annual actuarial requirements of the pension fund,
20    as determined by an enrolled actuary employed by the Illinois
21    Department of Insurance or by an enrolled actuary retained by
22    the pension fund or municipality.  For the purposes  of  this
23    Section,  the  annual  actuarial  requirements of the pension
24    fund are equal to (1) the normal cost of the pension fund, or
25    17.5% of the salaries and wages to be  paid  to  firefighters
26    for  the  year  involved,  whichever is greater, plus (2) the
27    annual amount  necessary  to  amortize  the  fund's  unfunded
28    accrued  liabilities  over  a period of 40 years from July 1,
29    1993, as annually  updated  and  determined  by  an  enrolled
30    actuary  employed  by the Illinois Department of Insurance or
31    by an enrolled actuary retained by the pension  fund  or  the
32    municipality.    The   amount   to  be  applied  towards  the
33    amortization of the unfunded accrued liability  in  any  year
                            -4-                LRB9008485EGfg
 1    shall not be less than the annual amount required to amortize
 2    the  unfunded  accrued  liability,  including  interest, as a
 3    level  percentage  of  payroll  over  the  number  of   years
 4    remaining in the 40 year amortization period.
 5        (b)  The  tax  shall  be levied and collected in the same
 6    manner as the general taxes of the municipality, and shall be
 7    in addition to all other taxes now or hereafter authorized to
 8    be levied upon all property within the municipality,  and  in
 9    addition  to  the  amount authorized to be levied for general
10    purposes, under Section 8-3-1 of the Illinois Municipal  Code
11    or under Section 14 of the Fire Protection District Act.  The
12    tax shall be forwarded directly to the treasurer of the board
13    within  30  business days of receipt by the municipality (or,
14    in the case of amounts added to the tax levy under subsection
15    (f),  used  by  the  municipality   to   pay   the   employer
16    contributions  required  under  subsection  (b-1)  of Section
17    15-155 of this Code).
18        (c)  The board shall make available to the membership and
19    the general public for inspection and copying  at  reasonable
20    times  the  most recent Actuarial Valuation Balance Sheet and
21    Tax Levy Requirement issued to the fund by the Department  of
22    Insurance.
23        (d)  The  firefighters' pension fund shall consist of the
24    following moneys which shall be set apart by the treasurer of
25    the municipality: (1)  all  moneys  derived  from  the  taxes
26    levied   hereunder;  (2)  contributions  by  firefighters  as
27    provided under Section 4-118.1; (3)  all  rewards  in  money,
28    fees,  gifts, and emoluments that may be paid or given for or
29    on account of extraordinary service by the fire department or
30    any member thereof, except when allowed  to  be  retained  by
31    competitive  awards;  and  (4)  any  money,  real  estate  or
32    personal property received by the board.
33        (e)  For the purposes of this Section, "enrolled actuary"
34    means  an  actuary:  (1)  who  is  a member of the Society of
                            -5-                LRB9008485EGfg
 1    Actuaries or the American Academy of Actuaries; and  (2)  who
 2    is  enrolled  under  Subtitle  C of Title III of the Employee
 3    Retirement Income Security Act  of  1974,  or  who  has  been
 4    engaged in providing actuarial services to one or more public
 5    retirement  systems  for  a  period of at least 3 years as of
 6    July 1, 1983.
 7        (f)  The corporate authorities  of  a  municipality  that
 8    employs  a  person  who  is  described  in subdivision (d) of
 9    Section 4-106 may add to the tax levy otherwise provided  for
10    in  this Section an amount equal to the projected cost of the
11    employer  contributions  required   to   be   paid   by   the
12    municipality  to  the  State  Universities  Retirement System
13    under subsection (b-1) of Section 15-155 of this Code.
14    (Source: P.A. 87-1265.)
15        (40 ILCS 5/15-106) (from Ch. 108 1/2, par. 15-106)
16        Sec. 15-106.  Employer.  "Employer":  The  University  of
17    Illinois,   Southern   Illinois   University,  Chicago  State
18    University,  Eastern  Illinois  University,  Governors  State
19    University, Illinois State University, Northeastern  Illinois
20    University,  Northern  Illinois  University, Western Illinois
21    University, the State Board of Higher Education, the Illinois
22    Mathematics and Science Academy, the State Geological  Survey
23    Division  of  the  Department of Natural Resources, the State
24    Natural History Survey Division of the Department of  Natural
25    Resources,  the State Water Survey Division of the Department
26    of Natural  Resources,  the  Waste  Management  and  Research
27    Center of the Department of Natural Resources, the University
28    Civil Service Merit Board, the Board of Trustees of the State
29    Universities   Retirement   System,  the  Illinois  Community
30    College Board, State Community College  of  East  St.  Louis,
31    community   college  boards,  any  association  of  community
32    college boards organized under Section  3-55  of  the  Public
33    Community  College  Act,  the  Board of Examiners established
                            -6-                LRB9008485EGfg
 1    under the Illinois Public Accounting Act,  and,  only  during
 2    the  period  for  which employer contributions required under
 3    Section 15-155 are paid,  the  following  organizations:  the
 4    alumni   associations,   the  foundations  and  the  athletic
 5    associations which are affiliated with the  universities  and
 6    colleges included in this Section as employers.  A department
 7    as defined in Section 14-103.04 is an employer for any person
 8    appointed by the Governor under the Civil Administrative Code
 9    of  Illinois  who  is  a participating employee as defined in
10    Section 15-109.  The cities of Champaign and Urbana shall  be
11    considered  employers,  but  only during the period for which
12    contributions are required to be made under subsection  (b-1)
13    of  Section  15-155  and  only  with  respect  to individuals
14    described in subsection (h) of Section 15-107.
15    (Source: P.A. 89-4, eff. 1-1-96; 89-445, eff. 2-7-96; 90-490,
16    eff. 8-17-97; 90-511, eff. 8-22-97; revised 11-17-97.)
17        (40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
18        Sec. 15-107.  Employee.
19        (a)  "Employee" means  any  member  of  the  educational,
20    administrative,  secretarial,  clerical, mechanical, labor or
21    other staff of an employer whose employment is permanent  and
22    continuous or who is employed in a position in which services
23    are  expected  to  be  rendered  on a continuous basis for at
24    least 4 months or one academic term, whichever is  less,  who
25    (A)  receives  payment  for  personal  services  on a warrant
26    issued pursuant to a payroll voucher certified by an employer
27    and drawn by the State Comptroller upon the  State  Treasurer
28    or  by an employer upon trust, federal or other funds, or (B)
29    is on a leave of absence without pay.   Employment  which  is
30    irregular,  intermittent or temporary shall not be considered
31    continuous for purposes of this paragraph.
32        However, a person is not an "employee" if he or she:
33             (1)  is  a  student  enrolled   in   and   regularly
                            -7-                LRB9008485EGfg
 1        attending  classes in a college or university which is an
 2        employer, and is employed on a temporary  basis  at  less
 3        than full time;
 4             (2)  is  currently receiving a retirement annuity or
 5        a disability retirement annuity  under  Section  15-153.2
 6        from this System;
 7             (3)  is on a military leave of absence;
 8             (4)  is eligible to participate in the Federal Civil
 9        Service   Retirement   System  and  is  currently  making
10        contributions to that system based upon earnings paid  by
11        an employer;
12             (5)  is  on  leave  of  absence without pay for more
13        than  60  days  immediately  following   termination   of
14        disability benefits under this Article;
15             (6)  is  hired  after  June  30,  1979  as  a public
16        service employment program participant under the  Federal
17        Comprehensive  Employment  and  Training Act and receives
18        earnings in whole or in part from  funds  provided  under
19        that Act;
20             (7)  is employed on or after July 1, 1991 to perform
21        services  that  are  excluded by subdivision (a)(7)(f) or
22        (a)(19) of Section 210 of the federal Social Security Act
23        from the definition of employment given in  that  Section
24        (42 U.S.C. 410); or
25             (8)  participates   in   an   optional  program  for
26        part-time workers under Section 15-158.1.
27        (b)  Any employer may, by filing a  written  notice  with
28    the  board,  exclude  from  the  definition of "employee" all
29    persons employed pursuant  to  a  federally  funded  contract
30    entered  into  after  July  1,  1982  with a federal military
31    department  in  a  program  providing  training  in  military
32    courses to federal military  personnel  on  a  military  site
33    owned  by  the United States Government, if this exclusion is
34    not prohibited by the federally funded  contract  or  federal
                            -8-                LRB9008485EGfg
 1    laws or rules governing the administration of the contract.
 2        (c)  Any person appointed by the Governor under the Civil
 3    Administrative Code of the State is an employee, if he or she
 4    is  a participant in this system on the effective date of the
 5    appointment.
 6        (d)  A participant on lay-off status under civil  service
 7    rules  is  considered  an employee for not more than 120 days
 8    from the date of the lay-off.
 9        (e)  A participant is considered an employee  during  (1)
10    the first 60 days of disability leave, (2) the period, not to
11    exceed  one  year,  in  which  his  or  her  eligibility  for
12    disability  benefits  is  being  considered  by  the board or
13    reviewed by the courts, and (3) the period he or she receives
14    disability benefits under the provisions of  Section  15-152,
15    workers'  compensation  or  occupational disease benefits, or
16    disability income under an insurance contract financed wholly
17    or partially by the employer.
18        (f)  Absences without pay, other than  formal  leaves  of
19    absence, of less than 30 calendar days, are not considered as
20    an interruption of a person's status as an employee.  If such
21    absences  during any period of 12 months exceed 30 work days,
22    the  employee  status  of  the  person   is   considered   as
23    interrupted as of the 31st work day.
24        (g)  A  staff  member  whose employment contract requires
25    services during an academic  term  is  to  be  considered  an
26    employee during the summer and other vacation periods, unless
27    he  or she declines an employment contract for the succeeding
28    academic term or his or her employment  status  is  otherwise
29    terminated,  and  he or she receives no earnings during these
30    periods.
31        (h)  An  individual  who  was  a  participating  employee
32    employed  in  the  fire  department  of  the  University   of
33    Illinois's  Champaign-Urbana  campus immediately prior to the
34    elimination of that fire department and who immediately after
                            -9-                LRB9008485EGfg
 1    the elimination of that fire department  became  employed  by
 2    the  fire  department  of  the  City of Urbana or the City of
 3    Champaign shall continue to be considered as an employee  for
 4    purposes  of  this  Article  for  so  long  as the individual
 5    remains employed as a firefighter by the City  of  Urbana  or
 6    the  City  of  Champaign.   The  individual shall cease to be
 7    considered an employee under this  subsection  (h)  upon  the
 8    first   termination  of  the  individual's  employment  as  a
 9    firefighter by the City of Urbana or the City of Champaign.
10    (Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97.)
11        (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
12        Sec. 15-136.  Retirement annuities - Amount.
13        (a)  The  amount  of  the  retirement  annuity  shall  be
14    determined by whichever of the following rules is  applicable
15    and provides the largest annuity:
16        Rule  1:  The  retirement annuity shall be 1.67% of final
17    rate of earnings for each of the first 10 years  of  service,
18    1.90%  for  each  of  the next 10 years of service, 2.10% for
19    each year of service in excess of 20 but  not  exceeding  30,
20    and  2.30%  for each year in excess of 30; or for persons who
21    retire on or after January 1, 1998, 2.2% of the final rate of
22    earnings for each year of service.  However, except that  the
23    annuity  for  those  persons  having  made  an election under
24    Section 15-154(a-1) shall be calculated and payable under the
25    portable  retirement  benefit   program   pursuant   to   the
26    provisions of Section 15-136.4.
27        Rule  2:  The  retirement annuity shall be the sum of the
28    following,  determined   from   amounts   credited   to   the
29    participant  in  accordance with the actuarial tables and the
30    prescribed rate  of  interest  in  effect  at  the  time  the
31    retirement annuity begins:
32             (i)  The  normal annuity which can be provided on an
33        actuarially equivalent basis, by the  accumulated  normal
                            -10-               LRB9008485EGfg
 1        contributions as of the date the annuity begins; and
 2             (ii)  an  annuity  from employer contributions of an
 3        amount which can be provided on an actuarially equivalent
 4        basis from the accumulated normal contributions  made  by
 5        the   participant  under  Section  15-113.6  and  Section
 6        15-113.7 plus 1.4  times  all  other  accumulated  normal
 7        contributions  made  by  the participant, except that the
 8        annuity for those persons having made an  election  under
 9        Section 15-154(a-1) shall be calculated and payable under
10        the  portable  retirement benefit program pursuant to the
11        provisions of Section 15-136.4.
12        Rule 3:  The retirement annuity of a participant  who  is
13    employed  at  least  one-half time during the period on which
14    his or her final rate of earnings is based, shall be equal to
15    the  participant's  years  of  service  not  to  exceed   30,
16    multiplied  by  (1)  $96  if  the participant's final rate of
17    earnings is less than $3,500, (2) $108 if the final  rate  of
18    earnings is at least $3,500 but less than $4,500, (3) $120 if
19    the  final  rate of earnings is at least $4,500 but less than
20    $5,500, (4) $132 if the final rate of earnings  is  at  least
21    $5,500  but  less  than $6,500, (5) $144 if the final rate of
22    earnings is at least $6,500 but less than $7,500, (6) $156 if
23    the final rate of earnings is at least $7,500 but  less  than
24    $8,500,  (7)  $168  if the final rate of earnings is at least
25    $8,500 but less than $9,500, and (8) $180 if the  final  rate
26    of  earnings  is  $9,500 or more, except that the annuity for
27    those  persons  having  made  an   election   under   Section
28    15-154(a-1)   shall  be  calculated  and  payable  under  the
29    portable  retirement  benefit   program   pursuant   to   the
30    provisions of Section 15-136.4.
31        Rule  4:  A participant who is at least age 50 and has 25
32    or more years of service as a police officer or  firefighter,
33    and  a  participant who is age 55 or over and has at least 20
34    but less than 25 years of service  as  a  police  officer  or
                            -11-               LRB9008485EGfg
 1    firefighter,  shall  be  entitled  to a retirement annuity of
 2    2 1/4% of the final rate of earnings for each of the first 10
 3    years of service as a police officer or  firefighter,  2 1/2%
 4    for  each of the next 10 years of service as a police officer
 5    or firefighter, and 2 3/4% for each  year  of  service  as  a
 6    police  officer  or  firefighter in excess of 20, except that
 7    the annuity for those persons having made an  election  under
 8    Section 15-154(a-1) shall be calculated and payable under the
 9    portable   retirement   benefit   program   pursuant  to  the
10    provisions of Section 15-136.4.  The retirement  annuity  for
11    all  other  service  shall  be computed under Rule 1, payable
12    under the portable retirement benefit program pursuant to the
13    provisions of Section 15-136.4, if applicable.
14        For purposes of this Rule 4, a participant's service as a
15    firefighter shall also include the following:
16             (i)  service that is performed while the  person  is
17        an employee under subsection (h) of Section 15-107; and
18             (ii)  in  the  case  of  an  individual  who  was  a
19        participating employee employed in the fire department of
20        the  University  of  Illinois's  Champaign-Urbana  campus
21        immediately   prior  to  the  elimination  of  that  fire
22        department and who immediately after the  elimination  of
23        that  fire department transferred to another job with the
24        University of Illinois, service performed as an  employee
25        of  the  University  of Illinois in a position other than
26        police officer or firefighter,  from  the  date  of  that
27        transfer until the employee's next termination of service
28        with the University of Illinois.
29        (b)  The  retirement annuity provided under Rules 1 and 3
30    above shall be reduced by  1/2  of  1%  for  each  month  the
31    participant  is  under  age  60  at  the  time of retirement.
32    However, this reduction shall  not  apply  in  the  following
33    cases:
34             (1)  For  a  disabled  participant  whose disability
                            -12-               LRB9008485EGfg
 1        benefits have been discontinued because  he  or  she  has
 2        exhausted   eligibility  for  disability  benefits  under
 3        clause (6) of Section 15-152;
 4             (2)  For a participant who has at least  the  number
 5        of  years  of service required to retire at any age under
 6        subsection (a) of Section 15-135; or
 7             (3)  For that portion of a retirement annuity  which
 8        has   been   provided   on  account  of  service  of  the
 9        participant during periods when he or she  performed  the
10        duties  of  a  police  officer  or  firefighter, if these
11        duties were performed for at least  5  years  immediately
12        preceding the date the retirement annuity is to begin.
13        (c)  The  maximum retirement annuity provided under Rules
14    1, 2, and 4 shall be the lesser of (1) the  annual  limit  of
15    benefits  as specified in Section 415 of the Internal Revenue
16    Code of 1986, as such Section may be  amended  from  time  to
17    time  and  as  such  benefit  limits shall be adjusted by the
18    Commissioner of Internal Revenue, and (2) 80% of  final  rate
19    of earnings.
20        (d)  An  annuitant whose status as an employee terminates
21    after August 14, 1969 shall receive  automatic  increases  in
22    his or her retirement annuity as follows:
23        Effective  January  1  immediately following the date the
24    retirement annuity begins, the  annuitant  shall  receive  an
25    increase  in  his or her monthly retirement annuity of 0.125%
26    of the monthly retirement annuity provided under Rule 1, Rule
27    2, Rule 3, or Rule 4, contained in this  Section,  multiplied
28    by  the number of full months which elapsed from the date the
29    retirement annuity payments began to January  1,  1972,  plus
30    0.1667%  of  such  annuity,  multiplied by the number of full
31    months which elapsed from January 1, 1972, or  the  date  the
32    retirement  annuity  payments  began,  whichever is later, to
33    January 1, 1978, plus 0.25% of such annuity multiplied by the
34    number of full months which elapsed from January 1, 1978,  or
                            -13-               LRB9008485EGfg
 1    the  date the retirement annuity payments began, whichever is
 2    later, to the effective date of the increase.
 3        The annuitant shall receive an increase  in  his  or  her
 4    monthly  retirement  annuity  on  each  January  1 thereafter
 5    during the annuitant's life of  3%  of  the  monthly  annuity
 6    provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
 7    this  Section.  The change made under this subsection by P.A.
 8    81-970 is effective January  1,  1980  and  applies  to  each
 9    annuitant  whose  status  as an employee terminates before or
10    after that date.
11        Beginning January 1, 1990, all automatic annual increases
12    payable  under  this  Section  shall  be  calculated   as   a
13    percentage  of  the  total annuity payable at the time of the
14    increase, including all increases  previously  granted  under
15    this Article.
16        The  change  made  in  this subsection by P.A. 85-1008 is
17    effective January 26, 1988, and is applicable without  regard
18    to whether status as an employee terminated before that date.
19        (e)  If,  on  January 1, 1987, or the date the retirement
20    annuity payment period begins, whichever is later, the sum of
21    the retirement annuity provided under Rule 1  or  Rule  2  of
22    this  Section  and  the  automatic  annual increases provided
23    under the preceding subsection or Section  15-136.1,  amounts
24    to  less  than the retirement annuity which would be provided
25    by Rule 3, the retirement annuity shall be  increased  as  of
26    January  1,  1987, or the date the retirement annuity payment
27    period begins, whichever is later, to the amount which  would
28    be  provided by Rule 3 of this Section. Such increased amount
29    shall be considered as the retirement annuity in  determining
30    benefits  provided under other Sections of this Article. This
31    paragraph applies without regard  to  whether  status  as  an
32    employee   terminated  before  the  effective  date  of  this
33    amendatory Act of  1987,  provided  that  the  annuitant  was
34    employed  at  least  one-half time during the period on which
                            -14-               LRB9008485EGfg
 1    the final rate of earnings was based.
 2        (f)  A participant is entitled to such additional annuity
 3    as may be provided on an actuarially equivalent basis, by any
 4    accumulated additional contributions to his  or  her  credit.
 5    However, the additional contributions made by the participant
 6    toward the automatic increases in annuity provided under this
 7    Section  shall  not  be taken into account in determining the
 8    amount of such additional annuity.
 9        (g)  If, (1) by law, a function of a  governmental  unit,
10    as  defined by Section 20-107 of this Code, is transferred in
11    whole or in part  to  an  employer,  and  (2)  a  participant
12    transfers  employment  from  such  governmental  unit to such
13    employer within 6 months after the transfer of the  function,
14    and (3) the sum of (A) the annuity payable to the participant
15    under  Rule  1,  2, or 3 of this Section (B) all proportional
16    annuities payable to the participant by all other  retirement
17    systems  covered  by  Article 20, and (C) the initial primary
18    insurance amount to which the participant is  entitled  under
19    the  Social Security Act, is less than the retirement annuity
20    which would have been payable if  all  of  the  participant's
21    pension  credits  validated  under  Section  20-109  had been
22    validated under this system, a supplemental annuity equal  to
23    the  difference  in  such  amounts  shall  be  payable to the
24    participant.
25        (h)  On January 1, 1981, an annuitant who was receiving a
26    retirement annuity on or before January 1,  1971  shall  have
27    his  or  her  retirement annuity then being paid increased $1
28    per month for each year of creditable service. On January  1,
29    1982,  an  annuitant  whose  retirement  annuity  began on or
30    before January 1, 1977, shall  have  his  or  her  retirement
31    annuity  then being paid increased $1 per month for each year
32    of creditable service.
33        (i)  On January 1, 1987, any annuitant  whose  retirement
34    annuity  began  on  or before January 1, 1977, shall have the
                            -15-               LRB9008485EGfg
 1    monthly retirement annuity increased by an amount equal to 8¢
 2    per year of creditable service times the number of years that
 3    have elapsed since the annuity began.
 4    (Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
 5    eff. 8-16-97; revised 8-21-97.)
 6        (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
 7        Sec. 15-154.  Refunds.
 8        (a)  A  participant  whose  status  as  an  employee   is
 9    terminated,  regardless  of cause, or who has been on lay off
10    status for more than 120 days, and who is  not  on  leave  of
11    absence,  is  entitled  to  a  refund  of  contributions upon
12    application; except  that  not  more  than  one  such  refund
13    application may be made during any academic year.
14        Except  as  set forth in subsections (a-1) and (a-2), the
15    refund shall be the sum of the accumulated normal, additional
16    and survivors insurance contributions,  less  the  amount  of
17    interest  credited on these contributions each year in excess
18    of 4 1/2% of the amount on which interest was calculated.
19        (a-1)  Every person who becomes an eligible  employee  as
20    described  in Section 15-158.2 a participating employee after
21    the date on  which  his  or  her  employer  first  offers  an
22    optional  retirement program under Section 15-158.2 may elect
23    within 60 days of becoming a participant to have  any  refund
24    calculated  pursuant  to  subsection  (a-2)  by  forgoing all
25    survivors insurance benefits to which the person's  survivors
26    would   otherwise  be  entitled  under  this  Article.   This
27    election is irrevocable and may be made by filing an election
28    with the system on such form as the Executive Director  shall
29    prescribe.
30        Each  person  who is an eligible employee as described in
31    Section 15-158.2 a participating  employee  on  the  date  on
32    which his or her employer first offers an optional retirement
33    program  under  Section 15-158.2 shall have a one-time option
                            -16-               LRB9008485EGfg
 1    to elect to have his or her  refund  calculated  pursuant  to
 2    subsection   (a-2),   by  forgoing  all  survivors  insurance
 3    benefits to which the person's survivors would  otherwise  be
 4    entitled  under  this  Article.    The  election  will not be
 5    effective until one year after the election is filed with the
 6    system.  This election is irrevocable  and  may  be  made  by
 7    filing  an  election  with  the  system,  on such form as the
 8    Executive Director shall prescribe, within one year after the
 9    date on which his or her employer first  offers  an  optional
10    retirement program under Section 15-158.2.
11        A  person  may  make  the  one-time  irrevocable election
12    authorized under this  Section  or  the  election  authorized
13    under  Section  15-158.2(g), but may not make both elections.
14    Any person interested in  electing  the  portable  retirement
15    benefit  program  provided  under  this  Section  and Section
16    15-136.4  must  be  given  a  consultation  with  the   State
17    Universities Retirement System before making that election.
18        (a-2)  The refund elected under subsection (a-1) shall be
19    the   sum   of   the  participant's  accumulated  normal  and
20    additional contributions, as defined in Sections  15-116  and
21    15-117.   If  the participant terminates with 5 or more years
22    of service for employment as defined in Section 15-113.1,  he
23    or  she  shall  also  be  entitled  to  a  refund of employer
24    contributions  in  an  amount  equal  to  the  sum   of   the
25    accumulated  normal  and additional contributions, as defined
26    in Sections 15-116 and 15-117.
27        (b)  Upon  acceptance  of  a  refund,   the   participant
28    forfeits all accrued rights and credits in the System, and if
29    subsequently  reemployed, the participant shall be considered
30    a new employee subject to all the qualifying  conditions  for
31    participation  and eligibility for benefits applicable to new
32    employees. If  such  person  again  becomes  a  participating
33    employee and continues as such for 2 years, or is employed by
34    an  employer  and  participates  for  at least 2 years in the
                            -17-               LRB9008485EGfg
 1    Federal Civil Service Retirement  System,  all  such  rights,
 2    credits,  and  previous  status  as  a  participant  shall be
 3    restored upon repayment of the amount of the refund, together
 4    with compound interest thereon from the date the  refund  was
 5    received to the date of repayment at the rate of 6% per annum
 6    through  August  31,  1982,  and at the effective rates after
 7    that date.
 8        (c)  If  a  participant  has  made  survivors   insurance
 9    contributions,  but  has  no  survivors insurance beneficiary
10    upon retirement, he or she shall be entitled to a  refund  of
11    the  accumulated  survivors insurance contributions, or to an
12    additional annuity  the  value  of  which  is  equal  to  the
13    accumulated survivors insurance contributions.
14        (d)  A  participant,  upon  application, is entitled to a
15    refund of his or  her  accumulated  additional  contributions
16    except  those covering the cost of the annual increase in the
17    retirement annuity provided under Section  15-136.  Upon  the
18    acceptance   of  such  a  refund  of  accumulated  additional
19    contributions,  the  participant  forfeits  all  rights   and
20    credits which may have accrued because of such contributions.
21        (e)  A  participant  who  terminates  his or her employee
22    status and elects  to  waive  service  credit  under  Section
23    15-154.2,  is entitled to a refund of the accumulated normal,
24    additional and survivors  insurance  contributions,  if  any,
25    which  were  credited the participant for this service, or to
26    an additional annuity the value of  which  is  equal  to  the
27    accumulated   normal,   additional  and  survivors  insurance
28    contributions, if any; except that not  more  than  one  such
29    refund application may be made during any academic year. Upon
30    acceptance  of  this  refund,  the  participant  forfeits all
31    rights and credits accrued because of this service.
32        (f)  If  a  police  officer  or  firefighter  receives  a
33    retirement annuity under Rule 1, 2, or 3 of  Section  15-136,
34    he  or she shall be entitled at retirement to a refund of the
                            -18-               LRB9008485EGfg
 1    difference   between   his   or   her   accumulated    normal
 2    contributions  and  the normal contributions which would have
 3    accumulated had such person filed a waiver of the  retirement
 4    formula provided by Rule 4 of Section 15-136.
 5        (g)  If,  at  the time of retirement, a participant would
 6    be entitled to a retirement annuity under Rule 1, 2, 3  or  4
 7    of  Section  15-136  that  exceeds  the  maximum specified in
 8    clause (1) of subsection (c) of Section  15-136,  he  or  she
 9    shall  be entitled to a refund of the employee contributions,
10    if any, paid under Section 15-157 after the date  upon  which
11    continuance of such contributions would have otherwise caused
12    the  retirement annuity to exceed this maximum, plus compound
13    interest at the effective rates.
14    (Source: P.A. 90-448, eff. 8-16-97.)
15        (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
16        Sec. 15-155.  Employer contributions.
17        (a)  The State of Illinois shall  make  contributions  by
18    appropriations  of  amounts  which,  together  with the other
19    employer contributions from trust, federal, and other  funds,
20    employee  contributions,  income  from investments, and other
21    income of this System, will be sufficient to meet the cost of
22    maintaining and administering the  System  on  a  90%  funded
23    basis in accordance with actuarial recommendations.
24        The   Board   shall   determine   the   amount  of  State
25    contributions required for each fiscal year on the  basis  of
26    the  actuarial  tables  and  other assumptions adopted by the
27    Board and the  recommendations  of  the  actuary,  using  the
28    formula in subsection (a-1).
29        (a-1)  For  State  fiscal  years  2011  through 2045, the
30    minimum contribution to the System to be made  by  the  State
31    for  each  fiscal  year  shall be an amount determined by the
32    System to be sufficient to bring  the  total  assets  of  the
33    System  up  to  90% of the total actuarial liabilities of the
                            -19-               LRB9008485EGfg
 1    System by the end of State fiscal year 2045.  In making these
 2    determinations, the  required  State  contribution  shall  be
 3    calculated  each  year  as a level percentage of payroll over
 4    the years remaining to and including  fiscal  year  2045  and
 5    shall be determined under the projected unit credit actuarial
 6    cost method.
 7        For  State  fiscal  years  1996  through  2010, the State
 8    contribution to the System, as a percentage of the applicable
 9    employee  payroll,  shall  be  increased  in   equal   annual
10    increments  so  that  by State fiscal year 2011, the State is
11    contributing at the rate required under this Section.
12        Beginning in State fiscal year 2046,  the  minimum  State
13    contribution  for each fiscal year shall be the amount needed
14    to maintain the total assets of the  System  at  90%  of  the
15    total actuarial liabilities of the System.
16        (b)  If  an employee is paid from trust or federal funds,
17    the employer shall pay to the Board contributions from  those
18    funds which are sufficient to cover the accruing normal costs
19    on  behalf  of  the  employee.   However, universities having
20    employees who are compensated out of local  auxiliary  funds,
21    income funds, or service enterprise funds are not required to
22    pay  such  contributions  on  behalf of those employees.  The
23    local auxiliary funds, income funds, and  service  enterprise
24    funds of universities shall not be considered trust funds for
25    the   purpose   of   this   Article,   but  funds  of  alumni
26    associations, foundations, and  athletic  associations  which
27    are  affiliated  with  the universities included as employers
28    under this Article and other employers which do  not  receive
29    State appropriations are considered to be trust funds for the
30    purpose of this Article.
31        (b-1)  The City of Urbana and the City of Champaign shall
32    each  make  employer  contributions  to this System for their
33    respective firefighter  employees  who  participate  in  this
34    System  pursuant  to  subsection  (h) of Section 15-107.  The
                            -20-               LRB9008485EGfg
 1    rate of contributions to  be  made  by  those  municipalities
 2    shall be determined annually by the Board on the basis of the
 3    actuarial   assumptions   adopted   by   the  Board  and  the
 4    recommendations of the actuary, and shall be expressed  as  a
 5    percentage of salary for each such employee.  The Board shall
 6    certify  the  rate  to the affected municipalities as soon as
 7    may be practical.  The employer contributions required  under
 8    this  subsection shall be remitted by the municipality to the
 9    System at the same time and in the same  manner  as  employee
10    contributions.
11        (c)  Through  State  fiscal year 1995: The total employer
12    contribution shall be apportioned among the various funds  of
13    the  State  and  other  employers, whether trust, federal, or
14    other funds, in accordance with actuarial procedures approved
15    by the board.  State of Illinois contributions for  employers
16    receiving State appropriations for personal services shall be
17    payable  from  appropriations made to the employers or to the
18    System.  The contributions for  Class  I  community  colleges
19    covering  earnings  other  than  those  paid  from  trust and
20    federal funds, shall be payable solely from appropriations to
21    the Illinois  Community  College  Board  or  the  System  for
22    employer contributions.
23        (d)  Beginning  in  State  fiscal year 1996, the required
24    State contributions  to  the  System  shall  be  appropriated
25    directly  to the System and shall be payable through vouchers
26    issued in accordance with subsection (c) of Section 15-165.
27        (e)  The State Comptroller shall draw warrants payable to
28    the System upon proper certification by the System or by  the
29    employer  in  accordance with the appropriation laws and this
30    Code.
31        (f)  Normal costs under this Section means liability  for
32    pensions  and  other  benefits  which  accrues  to the System
33    because of the credits earned for  service  rendered  by  the
34    participants   during   the   fiscal  year  and  expenses  of
                            -21-               LRB9008485EGfg
 1    administering the System, but shall not include the principal
 2    of or any redemption premium or interest on any bonds  issued
 3    by the board or any expenses incurred or deposits required in
 4    connection therewith.
 5    (Source: P.A. 88-593, eff. 8-22-94; 89-602, eff. 8-2-96.)
 6        (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
 7        Sec. 15-157.  Employee Contributions.
 8        (a)  Each participating employee shall make contributions
 9    towards  the  retirement  annuity of each payment of earnings
10    applicable to employment under this system on and  after  the
11    date   of  becoming  a  participant  as  follows:   Prior  to
12    September 1, 1949, 3 1/2% of earnings; from September 1, 1949
13    to August 31, 1955, 5%; from September 1, 1955 to August  31,
14    1969,   6%;   from   September   1,  1969,  6  1/2%.    These
15    contributions are to be considered  as  normal  contributions
16    for purposes of this Article.
17        Each  participant  who is a police officer or firefighter
18    shall make normal contributions of  8%  of  each  payment  of
19    earnings  applicable  to  employment  as  a police officer or
20    firefighter under this system on or after September 1,  1981,
21    unless  he  or  she files with the board within 60 days after
22    the effective date of this amendatory Act of 1991 or 60  days
23    after the board receives notice that he or she is employed as
24    a  police  officer  or  firefighter,  whichever  is  later, a
25    written notice waiving the  retirement  formula  provided  by
26    Rule  4 of Section 15-136.  This waiver shall be irrevocable.
27    If a participant had met the conditions set forth in  Section
28    15-132.1  prior  to the effective date of this amendatory Act
29    of  1991  but  failed   to   make   the   additional   normal
30    contributions required by this paragraph, he or she may elect
31    to pay the additional contributions plus compound interest at
32    the  effective  rate.   If  such  payment  is received by the
33    board, the service shall  be  considered  as  police  officer
                            -22-               LRB9008485EGfg
 1    service in calculating the retirement annuity under Rule 4 of
 2    Section 15-136.  While performing service described in clause
 3    (i)  or  (ii)  of  Rule  4 of Section 15-136, a participating
 4    employee shall be deemed to be employed as a firefighter  for
 5    the purpose of determining the rate of employee contributions
 6    under this Section.
 7        (b)  Starting   September  1,  1969,  each  participating
 8    employee shall make additional contributions of 1/2 of 1%  of
 9    earnings  to  finance  a  portion  of  the cost of the annual
10    increases  in  retirement  annuity  provided  under   Section
11    15-136.
12        (c)  Each  participating  employee  shall make additional
13    contributions of 1% of earnings applicable under this  system
14    on  and  after  August  1, 1959.  The contribution made under
15    this subsection shall be used to finance survivors  insurance
16    benefits,  unless  the participant has made an election under
17    Section 15-154(a-1), in  which  case  the  contribution  made
18    under  this  subsection shall be used to finance the benefits
19    obtained under that election.  Contributions in excess of $80
20    during any fiscal year beginning before August 31,  1969  and
21    in  excess  of  $120  during any fiscal year thereafter until
22    September  1,  1971  shall  be   considered   as   additional
23    contributions for purposes of this Article.
24        (d)  If the board by board rule so permits and subject to
25    such  conditions  and  limitations as may be specified in its
26    rules, a participant may make other additional  contributions
27    of  such percentage of earnings or amounts as the participant
28    shall elect in a  written  notice  thereof  received  by  the
29    board.
30        (e)  That  fraction  of a participant's total accumulated
31    normal contributions, the numerator of which is equal to  the
32    number  of  years  of  service  in  excess  of  that which is
33    required to qualify for the maximum retirement  annuity,  and
34    the denominator of which is equal to the total service of the
                            -23-               LRB9008485EGfg
 1    participant,  shall  be  considered as accumulated additional
 2    contributions.  The determination of the  applicable  maximum
 3    annuity  and the adjustment in contributions required by this
 4    provision shall be made as of the date of  the  participant's
 5    retirement.
 6        (f)  Notwithstanding   the   foregoing,  a  participating
 7    employee shall not be required to  make  contributions  under
 8    this  Section  after  the date upon which continuance of such
 9    contributions would otherwise cause  his  or  her  retirement
10    annuity to exceed the maximum retirement annuity as specified
11    in clause (1) of subsection (c) of Section 15-136.
12        (g)  A  participating employee may make contributions for
13    the purchase of service credit under this Article.
14    (Source:  P.A.  90-32,  eff.  6-27-97;  90-65,  eff.  7-7-97;
15    90-448,  eff.  8-16-97;   90-511,   eff.   8-22-97;   revised
16    11-14-97.)
17        (40 ILCS 5/15-158.2)
18        Sec.    15-158.2.   Optional   retirement   program   for
19    educational employees.
20        (a)  Purpose.  The General  Assembly  finds  that  it  is
21    important for colleges and universities to be able to attract
22    and  retain the most qualified employees and that in order to
23    attract and retain these employees, colleges and universities
24    should  have  the  flexibility  to  provide  an   alternative
25    retirement  program  for  eligible employees who elect not to
26    participate in the other retirement programs  provided  under
27    this Article.
28        (b)  Definitions.   For  the  purposes  of  this Section,
29    "eligible employee" means an employee (other than an employee
30    performing service described in clause (i) or (ii) of Rule  4
31    of  Section  15-136)  who  is  eligible to participate in the
32    State Universities Retirement System and who  does  not  have
33    sufficient  age  and  service  to  qualify  for  a retirement
                            -24-               LRB9008485EGfg
 1    annuity  under  Section  15-135.    A   "currently   eligible
 2    employee"  is an employee who becomes an eligible employee on
 3    the  effective  date  of  the  optional  retirement   program
 4    established  by  the  employee's employer.  A "newly eligible
 5    employee" is an employee who  becomes  an  eligible  employee
 6    after  the  effective date of the optional retirement program
 7    established by the employee's employer.
 8        (c)  Program.  Each employer subject to this Article  may
 9    elect  to establish an optional retirement program under this
10    Section for the eligible  employees  whom  it  employs.   The
11    optional retirement program shall provide retirement benefits
12    for  participating  employees through the purchase of annuity
13    contracts, either fixed or variable or a combination thereof,
14    through the purchase of mutual funds,  or  through  both  and
15    shall also provide for disability benefits.
16        The  State  Universities  Retirement  System shall be the
17    plan sponsor for the program.  Consistent with its  fiduciary
18    duty  to  the  participants and beneficiaries of the program,
19    the Board of Trustees of the System may delegate  aspects  of
20    program administration as it sees fit to companies authorized
21    to  do  business  in  this  State,  to the employers, or to a
22    combination of both.
23        The plan must be qualified  under  the  Internal  Revenue
24    Code of 1986.
25        (d)  Proposals.   The  System,  in  consultation with the
26    employers, shall solicit  proposals  to  participate  in  the
27    program  from insurance and annuity companies and mutual fund
28    companies authorized to  do  business  in  this  State.    In
29    reviewing   the   proposals   received   and   approving  and
30    contracting  with  no  fewer  than  2  and  no  more  than  7
31    companies, at least 2 of which must be insurance and  annuity
32    companies,   the  Board  of  Trustees  of  the  System  shall
33    consider, among other things, the following criteria:
34             (1)  the nature and  extent  of  the  benefits  that
                            -25-               LRB9008485EGfg
 1        would be provided to the participants;
 2             (2)  the  reasonableness of the benefits in relation
 3        to the premium charged;
 4             (3)  the suitability of the benefits  to  the  needs
 5        and  interests  of  the  participating  employees and the
 6        employer;
 7             (4)  the ability of the company to provide  benefits
 8        under  the  contract  and  the financial stability of the
 9        company; and
10             (5)  the efficacy of the contract in the recruitment
11        and retention of employees.
12        An employer that elects to offer an  optional  retirement
13    program   under   subsection   (c)   may   only   select  for
14    participation in the program  2  or  more  of  the  companies
15    approved by the Board of Trustees of the System.  The System,
16    in consultation with the employers, shall periodically review
17    each  approved company; a company may continue to participate
18    in the program only so long as it continues to be an approved
19    company under contract with the Board.
20        (e)  System Conflict of Interest.  In order  to  preclude
21    any  conflict  of  interest by the System, only insurance and
22    annuity  companies  and  mutual  fund  companies   that   are
23    authorized  to  do business in this State may be approved, in
24    accordance  with  the  procedures  of  subsection   (d),   to
25    participate  in this program and offer investment options for
26    program participants.
27        (f)  Account  Balance  Transfers.   Employees   who   are
28    participating  in  the  program  must  be allowed to transfer
29    their account balances from the investment options offered by
30    one  of  the  companies  selected  by  the  employer  to  the
31    investment options offered by another  company  so  selected,
32    subject to applicable contractual provisions.
33        (g)  Participation.   Any  eligible employee may elect to
34    participate in the optional retirement program offered by the
                            -26-               LRB9008485EGfg
 1    employer under subsection (c).  The election must be made  in
 2    writing  and  in  the  manner  prescribed  by  the System.  A
 3    currently eligible employee must make  this  election  within
 4    one  year after the effective date of the employer's optional
 5    retirement program.  A newly eligible employee must make this
 6    election within 60 days after becoming an eligible  employee.
 7    A   person   may   make  the  one-time  irrevocable  election
 8    authorized under this  Section  or  the  election  authorized
 9    under  Section  15-154(a-1), but may not make both elections.
10    The employer shall not remit contributions  on  behalf  of  a
11    newly  eligible employee to the State Universities Retirement
12    System until the 60-day period has run unless an election  by
13    the  employee  has  been made earlier.  Any eligible employee
14    interested  in  electing  the  optional  retirement   program
15    provided under this Section must be given a consultation with
16    the  State  Universities Retirement System before making that
17    election.
18        Participation in the optional  retirement  program  shall
19    begin  on the first day of the first pay period following the
20    date of election, but no earlier than January 1,  1998.   The
21    employee's  participation  in  any  other  retirement program
22    administered by the System under this Article shall terminate
23    on the date that participation  in  the  optional  retirement
24    program  begins,  and the employee shall thereby be deemed to
25    have elected to receive a refund of contributions as provided
26    in Section 15-154,  except  that  such  deemed  refund  shall
27    include  interest  at  the  effective rate for the respective
28    years, and except  that  any  funds  which  would  have  been
29    received   shall  instead  be  transferred  directly  to  the
30    optional  retirement  program  as  a  tax  free  transfer  in
31    accordance with Internal Revenue Service guidelines.
32        Notwithstanding any other  provision  of  this  Code,  an
33    employee  may  not  purchase  or  receive  service or service
34    credit   applicable   to   any   other   retirement   program
                            -27-               LRB9008485EGfg
 1    administered by the System under this Article for any  period
 2    during  which  the employee was a participant in the optional
 3    retirement program established under this Section.
 4        An  employee  who  has  elected  to  participate  in  the
 5    optional retirement program under this Section must  continue
 6    participation while employed in an eligible position, and may
 7    not  participate in any other retirement program administered
 8    by the System under  this  Article  while  employed  by  that
 9    employer,   unless   the   optional   retirement  program  is
10    terminated in accordance with subsection (i).
11        Participation in the optional  retirement  program  under
12    this   Section  shall  constitute  membership  in  the  State
13    Universities Retirement System, although a participant  under
14    this  Section  shall  not be entitled to receive any benefits
15    under any other provisions of Article 15 or  of  Article  20.
16    An employee who receives a disability benefit or a retirement
17    benefit under this Section or an employee who receives a lump
18    sum  distribution  from  a  mutual  fund  company  under this
19    Section and uses the lump sum to purchase an annuity shall be
20    considered an employee or an annuitant under Article  15  for
21    purposes  of the State Employees Group Insurance Act of 1971.
22    Participation in the optional retirement program  under  this
23    Section  creates  a  contractual relationship with respect to
24    the investment of the employee's account balance between  the
25    employee and the company providing the investment options for
26    the  employee's  account  balance.   Participation  does  not
27    create  a  contractual  relationship between the employee and
28    the System or between the employee and his or her employer.
29        (h)  Contributions.  The contribution rate for  employees
30    participating  in  the optional retirement program under this
31    Section shall be equal to the employee contribution rate  for
32    other participants in the System.  This required contribution
33    may  be made as an "employer pick-up" under Section 414(h) of
34    the Internal Revenue Code of 1986 or any  successor  Section.
                            -28-               LRB9008485EGfg
 1    Any  employee  participating  in  the System or who elects to
 2    participate in the optional retirement program shall continue
 3    to have the employer "pick-up"  the  contribution.   However,
 4    amounts   picked  up  after  the  election  of  the  optional
 5    retirement  program  shall  be  remitted  to   the   optional
 6    retirement  plan.   In  no  event  shall  an employee have an
 7    option of receiving these amounts in cash.  The program shall
 8    provide for employer contributions at a rate of no more  than
 9    7.6%  of  the  participating employee's salary.  The optional
10    retirement program shall  be  funded  by  contributions  from
11    employees   participating   in   the   program  and  employer
12    contributions as required by the plan.   The  plan  shall  be
13    funded  in  a  manner  consistent  with  the  requirements of
14    Internal  Revenue   Code   Section   412,   and   regulations
15    promulgated  thereunder,  as  that  Section  applies to money
16    purchase plans.
17        The  State  of  Illinois  shall  make  contributions   by
18    appropriations  to  the  System of the employer contributions
19    required  for  employees  who  participate  in  the  optional
20    retirement program under this Section.  The  amount  required
21    shall be certified by the Board of Trustees of the System and
22    paid  by  the  State  in accordance with Section 15-165.  The
23    System shall not be obligated to remit the required  employer
24    contributions  to  any  insurance and annuity and mutual fund
25    companies participating in the  optional  retirement  program
26    under  subsection  (d)  until  it  has  received the required
27    employer contributions from the State.  In  the  event  of  a
28    deficiency  in  the amount of State contributions, the System
29    shall implement those procedures described in subsection  (c)
30    of  Section  15-165  to  obtain the required funding from the
31    General Revenue Fund.
32        The contributions and interest thereon, and any  benefits
33    based  upon them, shall be treated as provided in the funding
34    vehicles for this plan.  An  amount  of  up  to  1%  of  each
                            -29-               LRB9008485EGfg
 1    participating  employee's  salary  shall  be  taken  from the
 2    employer contribution to the optional retirement program  and
 3    shall  be  contributed,  on  the employee's behalf, to a plan
 4    which the System offers to provide for disability benefits.
 5        (i)  Termination.    An   optional   retirement   program
 6    authorized under  this  Section  may  be  terminated  by  the
 7    employer, subject to the terms of any relevant contracts, and
 8    the  employer  shall  have  no  obligation  to reestablish an
 9    optional retirement program under this Section.  This Section
10    does not create a right to  continued  participation  in  any
11    optional  retirement program set up by an employer under this
12    Section.  If an optional retirement  program  is  terminated,
13    the  participants  shall have the right to participate in one
14    of the other retirement programs offered by  the  System  and
15    receive  service  credit in such other retirement program for
16    any years of employment following the termination.
17        (j)  Vesting.  Employer  contributions  shall  be  vested
18    after  five  years  of employment.  If an employee terminates
19    employment prior to completing five  years  of  service,  the
20    employee  shall  be  entitled to a benefit in accordance with
21    the terms of the employer's retirement plan which is based on
22    the  accumulation  value  attributable  to   the   employee's
23    contributions  and  any  investment return thereon.  Benefits
24    for employees who terminate  with  at  least  five  years  of
25    service shall be in accordance with the terms of the optional
26    retirement   plan   and   based  on  the  accumulation  value
27    attributable  to  both  the  employer  and   the   employee's
28    contributions   and  any  investment  return  thereon.    Any
29    employer contributions which are forfeited shall be  held  in
30    escrow by the company investing those contributions and shall
31    be  used  to  reduce  the  next  premium payment due from the
32    employer.
33    (Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97.)
                            -30-               LRB9008485EGfg
 1        (40 ILCS 5/15-181) (from Ch. 108 1/2, par. 15-181)
 2        Sec. 15-181. Duties of employers.
 3        (a)  Each employer, in  preparing  payroll  vouchers  for
 4    participating employees, shall indicate, in addition to other
 5    information:  (1)  the  amount  of employee contributions and
 6    survivors  insurance  contributions  required  under  Section
 7    15-157, (2) the gross earnings payable to each employee,  and
 8    (3)  the  total  of  all contributions required under Section
 9    15-157.   An  additional  certified  copy  of  each   payroll
10    certified  by each employer shall be forwarded along with the
11    original  payroll  to  the  Director  of  Central  Management
12    Services, State Comptroller, and other officer receiving  the
13    original certified payroll for transmittal to the board.
14        (b)  Each employer, in drawing warrants or checks against
15    trust  or  federal  funds  for  items  of  salary  on payroll
16    vouchers certified by employers, shall draw such warrants  or
17    checks  to  participating  employees  for  the amount of cash
18    salary or wages specified for the period, and  shall  draw  a
19    warrant  or  check  to  this  system  for  the  total  of the
20    contributions required under Section 15-157.  The warrant  or
21    check drawn to this system, together with the additional copy
22    of the payroll supplied by the employer, shall be transmitted
23    immediately to the board.
24        (c)  The  City  of  Champaign  and the City of Urbana, as
25    employers of persons who participate in this System  pursuant
26    to  subsection  (h) of Section 15-107, shall each collect and
27    transmit  to  the  System  from  each  payroll  the  employee
28    contributions required under Section  15-157,  together  with
29    such  payroll  documentation as the Board may require, at the
30    time that the payroll is paid.
31    (Source: P.A. 83-1440.)
32        Section 90.  The State Mandates Act is amended by  adding
33    Section 8.22 as follows:
                            -31-               LRB9008485EGfg
 1        (30 ILCS 805/8.22 new)
 2        Sec.  8.22.  Exempt  mandate.  Notwithstanding Sections 6
 3    and 8 of this Act, no reimbursement by the State is  required
 4    for  the  implementation  of  any  mandate  created  by  this
 5    amendatory Act of 1998.
 6        Section  99.  Effective date.  This Act takes effect upon
 7    becoming law.

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