State of Illinois
90th General Assembly
Legislation

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90_SB0210

      5 ILCS 375/3              from Ch. 127, par. 523
      40 ILCS 5/15-107          from Ch. 108 1/2, par. 15-107
      40 ILCS 5/15-134          from Ch. 108 1/2, par. 15-134
      40 ILCS 5/15-136          from Ch. 108 1/2, par. 15-136
      40 ILCS 5/15-136.4 new
      40 ILCS 5/15-146          from Ch. 108 1/2, par. 15-146
      40 ILCS 5/15-154          from Ch. 108 1/2, par. 15-154
      40 ILCS 5/15-157          from Ch. 108 1/2, par. 15-157
      40 ILCS 5/15-158.2
      40 ILCS 5/15-165          from Ch. 108 1/2, par. 15-165
      40 ILCS 15/1.1
          Amends the State Universities Article of the Pension Code
      to provide for another optional retirement program.    Amends
      the  State  Employees  Group Insurance Act to make changes in
      definitions.  Also makes other  changes.   Amends  the  State
      Pension  Funds  Continuing Appropriation Act to make a change
      in the continuing appropriation for  the  State  Universities
      Retirement System.  Effective immediately.
                                                     LRB9001294EGfg
                                               LRB9001294EGfg
 1        AN   ACT   in  relation  to  public  employee  retirement
 2    benefits, amending named Acts.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  5.   The  State Employees Group Insurance Act of
 6    1971 is amended by changing Section 3 as follows:
 7        (5 ILCS 375/3) (from Ch. 127, par. 523)
 8        (Text of Section before amendment by P.A. 89-507)
 9        Sec.  3.  Definitions.   Unless  the  context   otherwise
10    requires, the following words and phrases as used in this Act
11    shall have the following meanings.  The Department may define
12    these  and other words and phrases separately for the purpose
13    of implementing specific programs  providing  benefits  under
14    this Act.
15        (a)  "Administrative   service  organization"  means  any
16    person, firm or corporation experienced in  the  handling  of
17    claims  which  is  fully  qualified,  financially  sound  and
18    capable  of meeting the service requirements of a contract of
19    administration executed with the Department.
20        (b)  "Annuitant" means (1) an employee  who  retires,  or
21    has  retired,  on  or  after  January 1, 1966 on an immediate
22    annuity under the provisions of Articles 2, 14, 15 (including
23    an employee who has retired and  is  receiving  a  retirement
24    annuity  under the an optional retirement program established
25    under Section 15-158.2 and who would also be eligible  for  a
26    retirement  annuity had that person been a participant in the
27    State University Retirement System), paragraphs (b) or (c) of
28    Section 16-106, or Article 18 of the Illinois  Pension  Code;
29    (2)  any  person  who  was receiving group insurance coverage
30    under this Act as of March 31, 1978 by reason of  his  status
31    as an annuitant, even though the annuity in relation to which
                            -2-                LRB9001294EGfg
 1    such coverage was provided is a proportional annuity based on
 2    less  than  the  minimum  period  of  service  required for a
 3    retirement annuity in the system involved; (3) any person not
 4    otherwise  covered  by  this  Act  who  has  retired   as   a
 5    participating  member under Article 2 of the Illinois Pension
 6    Code but is  ineligible  for  the  retirement  annuity  under
 7    Section 2-119 of the Illinois Pension Code; (4) the spouse of
 8    any  person  who  is  receiving  a  retirement  annuity under
 9    Article 18 of the Illinois Pension Code and  who  is  covered
10    under  a  group  health  insurance  program  sponsored  by  a
11    governmental  employer  other  than the State of Illinois and
12    who has irrevocably elected to  waive  his  or  her  coverage
13    under  this  Act  and to have his or her spouse considered as
14    the "annuitant" under this Act and not as a  "dependent";  or
15    (5) an employee who retires, or has retired, from a qualified
16    position, as determined according to rules promulgated by the
17    Director,  under  a qualified local government or a qualified
18    rehabilitation facility  or  a  qualified  domestic  violence
19    shelter  or  service.  (For definition of "retired employee",
20    see (p) post).
21        (c)  "Carrier"  means  (1)  an   insurance   company,   a
22    corporation   organized  under  the  Limited  Health  Service
23    Organization Act or the Voluntary Health Services Plan Act, a
24    partnership, or other nongovernmental organization, which  is
25    authorized  to  do  group  life  or  group  health  insurance
26    business  in  Illinois,  or  (2)  the  State of Illinois as a
27    self-insurer.
28        (d)  "Compensation" means salary or wages  payable  on  a
29    regular  payroll  by  the State Treasurer on a warrant of the
30    State Comptroller out of any State, trust or federal fund, or
31    by the Governor of the State through a disbursing officer  of
32    the  State  out of a trust or out of federal funds, or by any
33    Department out of State, trust, federal or other  funds  held
34    by  the  State Treasurer or the Department, to any person for
                            -3-                LRB9001294EGfg
 1    personal  services  currently  performed,  and  ordinary   or
 2    accidental  disability  benefits  under  Articles  2,  14, 15
 3    (including ordinary or accidental disability  benefits  under
 4    the  an optional retirement program established under Section
 5    15-158.2), paragraphs  (b)  or  (c)  of  Section  16-106,  or
 6    Article  18  of  the  Illinois  Pension  Code, for disability
 7    incurred after January 1, 1966, or benefits payable under the
 8    Workers'  Compensation  or  Occupational  Diseases   Act   or
 9    benefits  payable  under  a  sick  pay  plan  established  in
10    accordance   with  Section  36  of  the  State  Finance  Act.
11    "Compensation" also means salary or wages paid to an employee
12    of any qualified local government or qualified rehabilitation
13    facility or a qualified domestic violence shelter or service.
14        (e)  "Commission"  means  the   State   Employees   Group
15    Insurance   Advisory   Commission  authorized  by  this  Act.
16    Commencing July 1, 1984, "Commission" as  used  in  this  Act
17    means   the   Illinois  Economic  and  Fiscal  Commission  as
18    established by the Legislative Commission Reorganization  Act
19    of 1984.
20        (f)  "Contributory",  when  referred  to  as contributory
21    coverage, shall mean optional coverages or  benefits  elected
22    by  the  member  toward  the  cost of which such member makes
23    contribution, or which are funded in whole or in part through
24    the acceptance of a reduction in earnings or the foregoing of
25    an increase in earnings by an employee, as distinguished from
26    noncontributory coverage or benefits which are paid  entirely
27    by  the  State  of Illinois without reduction of the member's
28    salary.
29        (g)  "Department"  means  any  department,   institution,
30    board,  commission, officer, court or any agency of the State
31    government  receiving  appropriations  and  having  power  to
32    certify payrolls to the Comptroller authorizing  payments  of
33    salary  and  wages against such appropriations as are made by
34    the General Assembly from any State fund,  or  against  trust
                            -4-                LRB9001294EGfg
 1    funds  held  by  the  State  Treasurer and includes boards of
 2    trustees of the retirement systems created by Articles 2, 14,
 3    15, 16 and 18 of the  Illinois  Pension  Code.   "Department"
 4    also  includes  the  Illinois  Comprehensive Health Insurance
 5    Board and the Illinois Rural Bond Bank.
 6        (h)  "Dependent", when the term is used in the context of
 7    the health and life plan, means a  member's  spouse  and  any
 8    unmarried child (1) from birth to age 19 including an adopted
 9    child, a child who lives with the member from the time of the
10    filing  of a petition for adoption until entry of an order of
11    adoption, a stepchild or recognized child who lives with  the
12    member  in  a parent-child relationship, or a child who lives
13    with the member if such member is a court appointed  guardian
14    of  the  child,  or  (2) age 19 to 23 enrolled as a full-time
15    student in any accredited school, financially dependent  upon
16    the  member,  and  eligible as a dependent for Illinois State
17    income tax purposes, or (3) age 19 or over who is mentally or
18    physically handicapped as defined in the  Illinois  Insurance
19    Code.  For  the  health  plan only, the term "dependent" also
20    includes any person enrolled prior to the effective  date  of
21    this  Section  who is dependent upon the member to the extent
22    that the member may claim such  person  as  a  dependent  for
23    Illinois  State  income tax deduction purposes; no other such
24    person may be enrolled.
25        (i)  "Director"  means  the  Director  of  the   Illinois
26    Department of Central Management Services.
27        (j)  "Eligibility  period"  means  the  period  of time a
28    member has to elect  enrollment  in  programs  or  to  select
29    benefits without regard to age, sex or health.
30        (k)  "Employee"   means  and  includes  each  officer  or
31    employee in the service of a department who (1) receives  his
32    compensation  for  service  rendered  to  the department on a
33    warrant  issued  pursuant  to  a  payroll  certified   by   a
34    department  or  on  a  warrant or check issued and drawn by a
                            -5-                LRB9001294EGfg
 1    department upon a trust,  federal  or  other  fund  or  on  a
 2    warrant  issued pursuant to a payroll certified by an elected
 3    or duly appointed  officer  of  the  State  or  who  receives
 4    payment  of the performance of personal services on a warrant
 5    issued pursuant to a payroll certified by  a  Department  and
 6    drawn  by  the  Comptroller  upon the State Treasurer against
 7    appropriations made by the General Assembly from any fund  or
 8    against  trust  funds held by the State Treasurer, and (2) is
 9    employed  full-time  or  part-time  in  a  position  normally
10    requiring actual performance of duty during not less than 1/2
11    of a normal work period, as established by  the  Director  in
12    cooperation with each department, except that persons elected
13    by  popular  vote  will  be  considered  employees during the
14    entire term for which they are elected  regardless  of  hours
15    devoted  to  the  service  of  the State, and (3) except that
16    "employee" does not include any person who is not eligible by
17    reason of such person's employment to participate in  one  of
18    the State retirement systems under Articles 2, 14, 15 (either
19    the  regular  Article 15 system or the an optional retirement
20    program established under Section 15-158.2) or 18,  or  under
21    paragraph  (b)  or  (c)  of  Section  16-106, of the Illinois
22    Pension Code, but such term  does  include  persons  who  are
23    employed  during  the 6 month qualifying period under Article
24    14 of the Illinois Pension Code.  Such term also includes any
25    person who (1) after January 1, 1966, is  receiving  ordinary
26    or  accidental  disability  benefits under Articles 2, 14, 15
27    (including ordinary or accidental disability  benefits  under
28    the  an optional retirement program established under Section
29    15-158.2), paragraphs  (b)  or  (c)  of  Section  16-106,  or
30    Article  18  of  the  Illinois  Pension  Code, for disability
31    incurred after January 1, 1966, (2) receives total  permanent
32    or total temporary disability under the Workers' Compensation
33    Act  or  Occupational  Disease  Act  as  a result of injuries
34    sustained or illness contracted in the course  of  employment
                            -6-                LRB9001294EGfg
 1    with  the  State of Illinois, or (3) is not otherwise covered
 2    under this Act and has  retired  as  a  participating  member
 3    under   Article  2  of  the  Illinois  Pension  Code  but  is
 4    ineligible for the retirement annuity under Section 2-119  of
 5    the  Illinois  Pension Code.  However, a person who satisfies
 6    the criteria of the foregoing definition of "employee" except
 7    that such person is made ineligible  to  participate  in  the
 8    State  Universities  Retirement  System  by clause (4) of the
 9    first paragraph of Section 15-107  of  the  Illinois  Pension
10    Code  is  also  an  "employee"  for the purposes of this Act.
11    "Employee" also includes any person receiving or eligible for
12    benefits under a sick pay plan established in accordance with
13    Section 36 of the State Finance Act. "Employee" also includes
14    each officer or employee in the service of a qualified  local
15    government,   including  persons  appointed  as  trustees  of
16    sanitary districts regardless of hours devoted to the service
17    of the sanitary district, and each employee in the service of
18    a  qualified  rehabilitation  facility  and  each   full-time
19    employee  in  the  service  of  a qualified domestic violence
20    shelter  or  service,  as  determined  according   to   rules
21    promulgated by the Director.
22        (l)  "Member"   means  an  employee,  annuitant,  retired
23    employee or survivor.
24        (m)  "Optional  coverages  or   benefits"   means   those
25    coverages  or  benefits available to the member on his or her
26    voluntary election, and at his or her own expense.
27        (n)  "Program" means the  group  life  insurance,  health
28    benefits  and other employee benefits designed and contracted
29    for by the Director under this Act.
30        (o)  "Health plan" means a self-insured health  insurance
31    program  offered by the State of Illinois for the purposes of
32    benefiting employees by means  of  providing,  among  others,
33    wellness  programs,  utilization reviews, second opinions and
34    medical fee reviews, as well as for paying for  hospital  and
                            -7-                LRB9001294EGfg
 1    medical care up to the maximum coverage provided by the plan,
 2    to its members and their dependents.
 3        (p)  "Retired  employee" means any person who would be an
 4    annuitant as that term is defined herein  but  for  the  fact
 5    that such person retired prior to January 1, 1966.  Such term
 6    also  includes any person formerly employed by the University
 7    of Illinois in the Cooperative Extension Service who would be
 8    an annuitant but for the  fact  that  such  person  was  made
 9    ineligible   to   participate   in   the  State  Universities
10    Retirement System by clause (4) of  the  first  paragraph  of
11    Section 15-107 of the Illinois Pension Code.
12        (q)  "Survivor"  means a person receiving an annuity as a
13    survivor of an employee or of an annuitant.  "Survivor"  also
14    includes:  (1)  the  surviving  dependent  of  a  person  who
15    satisfies  the  definition  of  "employee"  except  that such
16    person  is  made  ineligible  to  participate  in  the  State
17    Universities Retirement System by clause  (4)  of  the  first
18    paragraph of Section 15-107 of the Illinois Pension Code; and
19    (2)  the  surviving dependent of any person formerly employed
20    by the University of Illinois in  the  Cooperative  Extension
21    Service  who  would  be an annuitant except for the fact that
22    such person was made ineligible to participate in  the  State
23    Universities  Retirement  System  by  clause (4) of the first
24    paragraph of Section 15-107 of the Illinois Pension Code.
25        (r)  "Medical  services"  means  the  services   provided
26    within  the  scope  of their licenses by practitioners in all
27    categories licensed under the Medical Practice Act of 1987.
28        (s)  "Unit  of  local  government"  means   any   county,
29    municipality,  township, school district, special district or
30    other unit, designated as a unit of local government by  law,
31    which  exercises  limited  governmental  powers  or powers in
32    respect to limited governmental subjects, any  not-for-profit
33    association   with   a  membership  that  primarily  includes
34    townships  and  township  officials,  that  has  duties  that
                            -8-                LRB9001294EGfg
 1    include  provision  of  research  service,  dissemination  of
 2    information, and other acts  for  the  purpose  of  improving
 3    township  government,  and that is funded wholly or partly in
 4    accordance with Section  85-15  of  the  Township  Code;  any
 5    not-for-profit  corporation or association, with a membership
 6    consisting primarily of municipalities, that operates its own
 7    utility   system,   and    provides    research,    training,
 8    dissemination  of  information,  or  other  acts  to  promote
 9    cooperation  between  and  among  municipalities that provide
10    utility services and for the advancement  of  the  goals  and
11    purposes  of  its membership; and the Illinois Association of
12    Park Districts.  "Qualified local government" means a unit of
13    local government approved by the Director  and  participating
14    in  a  program  created under subsection (i) of Section 10 of
15    this Act.
16        (t)  "Qualified  rehabilitation   facility"   means   any
17    not-for-profit   organization   that  is  accredited  by  the
18    Commission on Accreditation of Rehabilitation  Facilities  or
19    certified   by   the   Department     of  Mental  Health  and
20    Developmental Disabilities to  provide  services  to  persons
21    with  disabilities and which receives funds from the State of
22    Illinois  for  providing  those  services,  approved  by  the
23    Director  and  participating  in  a  program  created   under
24    subsection (j) of Section 10 of this Act.
25        (u)  "Qualified  domestic  violence  shelter  or service"
26    means any Illinois domestic violence shelter or  service  and
27    its  administrative offices funded by the Illinois Department
28    of Public Aid, approved by the Director and participating  in
29    a program created under subsection (k) of Section 10.
30        (v)  "TRS benefit recipient" means a person who:
31             (1)  is  not  a "member" as defined in this Section;
32        and
33             (2)  is receiving a monthly  benefit  or  retirement
34        annuity  under  Article  16 of the Illinois Pension Code;
                            -9-                LRB9001294EGfg
 1        and
 2             (3)  either (i) has at least 8 years  of  creditable
 3        service under Article 16 of the Illinois Pension Code, or
 4        (ii) was enrolled in the health insurance program offered
 5        under  that  Article  on January 1, 1996, or (iii) is the
 6        survivor of a benefit recipient who had at least 8  years
 7        of  creditable  service  under Article 16 of the Illinois
 8        Pension Code or was  enrolled  in  the  health  insurance
 9        program  offered under that Article on the effective date
10        of this amendatory Act of 1995, or (iv) is a recipient or
11        survivor of a recipient of  a  disability  benefit  under
12        Article 16 of the Illinois Pension Code.
13        (w)  "TRS dependent beneficiary" means a person who:
14             (1)  is  not a "member" or "dependent" as defined in
15        this Section; and
16             (2)  is a TRS benefit recipient's: (A)  spouse,  (B)
17        dependent parent who is receiving at least half of his or
18        her  support  from  the  TRS  benefit  recipient,  or (C)
19        unmarried natural or adopted child who is (i)  under  age
20        19,  or  (ii)  enrolled  as  a  full-time  student  in an
21        accredited school, financially  dependent  upon  the  TRS
22        benefit  recipient,  eligible as a dependent for Illinois
23        State income tax purposes, and either is under age 24  or
24        was,  on  January  1,  1996, participating as a dependent
25        beneficiary in the health insurance program offered under
26        Article 16 of the Illinois Pension Code, or (iii) age  19
27        or  over  who  is  mentally  or physically handicapped as
28        defined in the Illinois Insurance Code.
29        (x)  "Military leave with pay  and  benefits"  refers  to
30    individuals  in basic training for reserves, special/advanced
31    training, annual training, emergency call up,  or  activation
32    by  the  President of the United States with approved pay and
33    benefits.
34        (y)  "Military leave without pay and benefits" refers  to
                            -10-               LRB9001294EGfg
 1    individuals who enlist for active duty in a regular component
 2    of  the  U.S.  Armed  Forces  or  other duty not specified or
 3    authorized under military leave with pay and benefits.
 4    (Source: P.A. 88-670,  eff.  12-2-94;  89-21,  eff.  6-21-95;
 5    89-25,   eff.  6-21-95;  89-76,  eff.  7-1-95;  89-324,  eff.
 6    8-13-95; 89-430, eff. 12-15-95; 89-502, eff. 7-1-96;  89-628,
 7    eff. 8-9-96; revised 8-23-96.)
 8        (Text of Section after amendment by P.A. 89-507)
 9        Sec.   3.  Definitions.   Unless  the  context  otherwise
10    requires, the following words and phrases as used in this Act
11    shall have the following meanings.  The Department may define
12    these and other words and phrases separately for the  purpose
13    of  implementing  specific  programs providing benefits under
14    this Act.
15        (a)  "Administrative  service  organization"  means   any
16    person,  firm  or  corporation experienced in the handling of
17    claims  which  is  fully  qualified,  financially  sound  and
18    capable of meeting the service requirements of a contract  of
19    administration executed with the Department.
20        (b)  "Annuitant"  means  (1)  an employee who retires, or
21    has retired, on or after January  1,  1966  on  an  immediate
22    annuity under the provisions of Articles 2, 14, 15 (including
23    an  employee  who  has  retired and is receiving a retirement
24    annuity under the an optional retirement program  established
25    under  Section  15-158.2 and who would also be eligible for a
26    retirement annuity had that person been a participant in  the
27    State University Retirement System), paragraphs (b) or (c) of
28    Section  16-106,  or Article 18 of the Illinois Pension Code;
29    (2) any person who was  receiving  group  insurance  coverage
30    under  this  Act as of March 31, 1978 by reason of his status
31    as an annuitant, even though the annuity in relation to which
32    such coverage was provided is a proportional annuity based on
33    less than the  minimum  period  of  service  required  for  a
34    retirement annuity in the system involved; (3) any person not
                            -11-               LRB9001294EGfg
 1    otherwise   covered   by  this  Act  who  has  retired  as  a
 2    participating member under Article 2 of the Illinois  Pension
 3    Code  but  is  ineligible  for  the  retirement annuity under
 4    Section 2-119 of the Illinois Pension Code; (4) the spouse of
 5    any person  who  is  receiving  a  retirement  annuity  under
 6    Article  18  of  the Illinois Pension Code and who is covered
 7    under  a  group  health  insurance  program  sponsored  by  a
 8    governmental employer other than the State  of  Illinois  and
 9    who  has  irrevocably  elected  to  waive his or her coverage
10    under this Act and to have his or her  spouse  considered  as
11    the  "annuitant"  under this Act and not as a "dependent"; or
12    (5) an employee who retires, or has retired, from a qualified
13    position, as determined according to rules promulgated by the
14    Director, under a qualified local government or  a  qualified
15    rehabilitation  facility  or  a  qualified  domestic violence
16    shelter or service. (For definition  of  "retired  employee",
17    see (p) post).
18        (c)  "Carrier"   means   (1)   an  insurance  company,  a
19    corporation  organized  under  the  Limited  Health   Service
20    Organization Act or the Voluntary Health Services Plan Act, a
21    partnership,  or other nongovernmental organization, which is
22    authorized  to  do  group  life  or  group  health  insurance
23    business in Illinois, or (2)  the  State  of  Illinois  as  a
24    self-insurer.
25        (d)  "Compensation"  means  salary  or wages payable on a
26    regular payroll by the State Treasurer on a  warrant  of  the
27    State Comptroller out of any State, trust or federal fund, or
28    by  the Governor of the State through a disbursing officer of
29    the State out of a trust or out of federal funds, or  by  any
30    Department  out  of State, trust, federal or other funds held
31    by the State Treasurer or the Department, to any  person  for
32    personal   services  currently  performed,  and  ordinary  or
33    accidental disability  benefits  under  Articles  2,  14,  15
34    (including  ordinary  or accidental disability benefits under
                            -12-               LRB9001294EGfg
 1    the an optional retirement program established under  Section
 2    15-158.2),  paragraphs  (b)  or  (c)  of  Section  16-106, or
 3    Article 18 of  the  Illinois  Pension  Code,  for  disability
 4    incurred after January 1, 1966, or benefits payable under the
 5    Workers'   Compensation   or  Occupational  Diseases  Act  or
 6    benefits  payable  under  a  sick  pay  plan  established  in
 7    accordance  with  Section  36  of  the  State  Finance   Act.
 8    "Compensation" also means salary or wages paid to an employee
 9    of any qualified local government or qualified rehabilitation
10    facility or a qualified domestic violence shelter or service.
11        (e)  "Commission"   means   the   State  Employees  Group
12    Insurance  Advisory  Commission  authorized  by   this   Act.
13    Commencing  July  1,  1984,  "Commission" as used in this Act
14    means  the  Illinois  Economic  and  Fiscal   Commission   as
15    established  by the Legislative Commission Reorganization Act
16    of 1984.
17        (f)  "Contributory", when  referred  to  as  contributory
18    coverage,  shall  mean optional coverages or benefits elected
19    by the member toward the cost  of  which  such  member  makes
20    contribution, or which are funded in whole or in part through
21    the acceptance of a reduction in earnings or the foregoing of
22    an increase in earnings by an employee, as distinguished from
23    noncontributory  coverage or benefits which are paid entirely
24    by the State of Illinois without reduction  of  the  member's
25    salary.
26        (g)  "Department"   means  any  department,  institution,
27    board, commission, officer, court or any agency of the  State
28    government  receiving  appropriations  and  having  power  to
29    certify  payrolls  to the Comptroller authorizing payments of
30    salary and wages against such appropriations as are  made  by
31    the  General  Assembly  from any State fund, or against trust
32    funds held by the State  Treasurer  and  includes  boards  of
33    trustees of the retirement systems created by Articles 2, 14,
34    15,  16  and  18  of the Illinois Pension Code.  "Department"
                            -13-               LRB9001294EGfg
 1    also includes the  Illinois  Comprehensive  Health  Insurance
 2    Board and the Illinois Rural Bond Bank.
 3        (h)  "Dependent", when the term is used in the context of
 4    the  health  and  life  plan, means a member's spouse and any
 5    unmarried child (1) from birth to age 19 including an adopted
 6    child, a child who lives with the member from the time of the
 7    filing of a petition for adoption until entry of an order  of
 8    adoption,  a stepchild or recognized child who lives with the
 9    member in a parent-child relationship, or a child  who  lives
10    with  the member if such member is a court appointed guardian
11    of the child, or (2) age 19 to 23  enrolled  as  a  full-time
12    student  in any accredited school, financially dependent upon
13    the member, and eligible as a dependent  for  Illinois  State
14    income tax purposes, or (3) age 19 or over who is mentally or
15    physically  handicapped  as defined in the Illinois Insurance
16    Code. For the health plan only,  the  term  "dependent"  also
17    includes  any  person enrolled prior to the effective date of
18    this Section who is dependent upon the member to  the  extent
19    that  the  member  may  claim  such person as a dependent for
20    Illinois State income tax deduction purposes; no  other  such
21    person may be enrolled.
22        (i)  "Director"   means  the  Director  of  the  Illinois
23    Department of Central Management Services.
24        (j)  "Eligibility period" means  the  period  of  time  a
25    member  has  to  elect  enrollment  in  programs or to select
26    benefits without regard to age, sex or health.
27        (k)  "Employee"  means  and  includes  each  officer   or
28    employee  in the service of a department who (1) receives his
29    compensation for service rendered  to  the  department  on  a
30    warrant   issued   pursuant  to  a  payroll  certified  by  a
31    department or on a warrant or check issued  and  drawn  by  a
32    department  upon  a  trust,  federal  or  other  fund or on a
33    warrant issued pursuant to a payroll certified by an  elected
34    or  duly  appointed  officer  of  the  State  or who receives
                            -14-               LRB9001294EGfg
 1    payment of the performance of personal services on a  warrant
 2    issued  pursuant  to  a payroll certified by a Department and
 3    drawn by the Comptroller upon  the  State  Treasurer  against
 4    appropriations  made by the General Assembly from any fund or
 5    against trust funds held by the State Treasurer, and  (2)  is
 6    employed  full-time  or  part-time  in  a  position  normally
 7    requiring actual performance of duty during not less than 1/2
 8    of  a  normal  work period, as established by the Director in
 9    cooperation with each department, except that persons elected
10    by popular vote  will  be  considered  employees  during  the
11    entire  term  for  which they are elected regardless of hours
12    devoted to the service of the  State,  and  (3)  except  that
13    "employee" does not include any person who is not eligible by
14    reason  of  such person's employment to participate in one of
15    the State retirement systems under Articles 2, 14, 15 (either
16    the regular Article 15 system or the an  optional  retirement
17    program  established  under Section 15-158.2) or 18, or under
18    paragraph (b) or (c)  of  Section  16-106,  of  the  Illinois
19    Pension  Code,  but  such  term  does include persons who are
20    employed during the 6 month qualifying period  under  Article
21    14 of the Illinois Pension Code.  Such term also includes any
22    person  who  (1) after January 1, 1966, is receiving ordinary
23    or accidental disability benefits under Articles  2,  14,  15
24    (including  ordinary  or accidental disability benefits under
25    the an optional retirement program established under  Section
26    15-158.2),  paragraphs  (b)  or  (c)  of  Section  16-106, or
27    Article 18 of  the  Illinois  Pension  Code,  for  disability
28    incurred  after January 1, 1966, (2) receives total permanent
29    or total temporary disability under the Workers' Compensation
30    Act or Occupational Disease  Act  as  a  result  of  injuries
31    sustained  or  illness contracted in the course of employment
32    with the State of Illinois, or (3) is not  otherwise  covered
33    under  this  Act  and  has  retired as a participating member
34    under  Article  2  of  the  Illinois  Pension  Code  but   is
                            -15-               LRB9001294EGfg
 1    ineligible  for the retirement annuity under Section 2-119 of
 2    the Illinois Pension Code.  However, a person  who  satisfies
 3    the criteria of the foregoing definition of "employee" except
 4    that  such  person  is  made ineligible to participate in the
 5    State Universities Retirement System by  clause  (4)  of  the
 6    first  paragraph  of  Section  15-107 of the Illinois Pension
 7    Code is also an "employee" for  the  purposes  of  this  Act.
 8    "Employee" also includes any person receiving or eligible for
 9    benefits under a sick pay plan established in accordance with
10    Section 36 of the State Finance Act. "Employee" also includes
11    each  officer or employee in the service of a qualified local
12    government,  including  persons  appointed  as  trustees   of
13    sanitary districts regardless of hours devoted to the service
14    of the sanitary district, and each employee in the service of
15    a   qualified  rehabilitation  facility  and  each  full-time
16    employee in the service  of  a  qualified  domestic  violence
17    shelter   or   service,  as  determined  according  to  rules
18    promulgated by the Director.
19        (l)  "Member"  means  an  employee,  annuitant,   retired
20    employee or survivor.
21        (m)  "Optional   coverages   or   benefits"  means  those
22    coverages or benefits available to the member on his  or  her
23    voluntary election, and at his or her own expense.
24        (n)  "Program"  means  the  group  life insurance, health
25    benefits and other employee benefits designed and  contracted
26    for by the Director under this Act.
27        (o)  "Health  plan" means a self-insured health insurance
28    program offered by the State of Illinois for the purposes  of
29    benefiting  employees  by  means  of providing, among others,
30    wellness programs, utilization reviews, second  opinions  and
31    medical  fee  reviews, as well as for paying for hospital and
32    medical care up to the maximum coverage provided by the plan,
33    to its members and their dependents.
34        (p)  "Retired employee" means any person who would be  an
                            -16-               LRB9001294EGfg
 1    annuitant  as  that  term  is defined herein but for the fact
 2    that such person retired prior to January 1, 1966.  Such term
 3    also includes any person formerly employed by the  University
 4    of Illinois in the Cooperative Extension Service who would be
 5    an  annuitant  but  for  the  fact  that such person was made
 6    ineligible  to  participate   in   the   State   Universities
 7    Retirement  System  by  clause  (4) of the first paragraph of
 8    Section 15-107 of the Illinois Pension Code.
 9        (q)  "Survivor" means a person receiving an annuity as  a
10    survivor  of  an employee or of an annuitant. "Survivor" also
11    includes:  (1)  the  surviving  dependent  of  a  person  who
12    satisfies the  definition  of  "employee"  except  that  such
13    person  is  made  ineligible  to  participate  in  the  State
14    Universities  Retirement  System  by  clause (4) of the first
15    paragraph of Section 15-107 of the Illinois Pension Code; and
16    (2) the surviving dependent of any person  formerly  employed
17    by  the  University  of Illinois in the Cooperative Extension
18    Service who would be an annuitant except for  the  fact  that
19    such  person  was made ineligible to participate in the State
20    Universities Retirement System by clause  (4)  of  the  first
21    paragraph of Section 15-107 of the Illinois Pension Code.
22        (r)  "Medical   services"  means  the  services  provided
23    within the scope of their licenses by  practitioners  in  all
24    categories licensed under the Medical Practice Act of 1987.
25        (s)  "Unit   of   local  government"  means  any  county,
26    municipality, township, school district, special district  or
27    other  unit, designated as a unit of local government by law,
28    which exercises limited  governmental  powers  or  powers  in
29    respect  to limited governmental subjects, any not-for-profit
30    association  with  a  membership  that   primarily   includes
31    townships  and  township  officials,  that  has  duties  that
32    include  provision  of  research  service,  dissemination  of
33    information,  and  other  acts  for  the purpose of improving
34    township government, and that is funded wholly or  partly  in
                            -17-               LRB9001294EGfg
 1    accordance  with  Section  85-15  of  the  Township Code; any
 2    not-for-profit corporation or association, with a  membership
 3    consisting primarily of municipalities, that operates its own
 4    utility    system,    and    provides   research,   training,
 5    dissemination  of  information,  or  other  acts  to  promote
 6    cooperation between and  among  municipalities  that  provide
 7    utility  services  and  for  the advancement of the goals and
 8    purposes of its membership; and the Illinois  Association  of
 9    Park Districts.  "Qualified local government" means a unit of
10    local  government  approved by the Director and participating
11    in a program created under subsection (i) of  Section  10  of
12    this Act.
13        (t)  "Qualified   rehabilitation   facility"   means  any
14    not-for-profit  organization  that  is  accredited   by   the
15    Commission  on  Accreditation of Rehabilitation Facilities or
16    certified by the Department of Human Services  (as  successor
17    to   the   Department  of  Mental  Health  and  Developmental
18    Disabilities)   to   provide   services   to   persons   with
19    disabilities and which  receives  funds  from  the  State  of
20    Illinois  for  providing  those  services,  approved  by  the
21    Director   and  participating  in  a  program  created  under
22    subsection (j) of Section 10 of this Act.
23        (u)  "Qualified domestic  violence  shelter  or  service"
24    means  any  Illinois domestic violence shelter or service and
25    its administrative offices funded by the Department of  Human
26    Services  (as  successor to the Illinois Department of Public
27    Aid), approved by the Director and participating in a program
28    created under subsection (k) of Section 10.
29        (v)  "TRS benefit recipient" means a person who:
30             (1)  is not a "member" as defined in  this  Section;
31        and
32             (2)  is  receiving  a  monthly benefit or retirement
33        annuity under Article 16 of the  Illinois  Pension  Code;
34        and
                            -18-               LRB9001294EGfg
 1             (3)  either  (i)  has at least 8 years of creditable
 2        service under Article 16 of the Illinois Pension Code, or
 3        (ii) was enrolled in the health insurance program offered
 4        under that Article on January 1, 1996, or  (iii)  is  the
 5        survivor  of a benefit recipient who had at least 8 years
 6        of creditable service under Article 16  of  the  Illinois
 7        Pension  Code  or  was  enrolled  in the health insurance
 8        program offered under that Article on the effective  date
 9        of this amendatory Act of 1995, or (iv) is a recipient or
10        survivor  of  a  recipient  of a disability benefit under
11        Article 16 of the Illinois Pension Code.
12        (w)  "TRS dependent beneficiary" means a person who:
13             (1)  is not a "member" or "dependent" as defined  in
14        this Section; and
15             (2)  is  a  TRS benefit recipient's: (A) spouse, (B)
16        dependent parent who is receiving at least half of his or
17        her support  from  the  TRS  benefit  recipient,  or  (C)
18        unmarried  natural  or adopted child who is (i) under age
19        19, or  (ii)  enrolled  as  a  full-time  student  in  an
20        accredited  school,  financially  dependent  upon the TRS
21        benefit recipient, eligible as a dependent  for  Illinois
22        State  income tax purposes, and either is under age 24 or
23        was, on January 1, 1996,  participating  as  a  dependent
24        beneficiary in the health insurance program offered under
25        Article  16 of the Illinois Pension Code, or (iii) age 19
26        or over who is  mentally  or  physically  handicapped  as
27        defined in the Illinois Insurance Code.
28        (x)  "Military  leave  with  pay  and benefits" refers to
29    individuals in basic training for reserves,  special/advanced
30    training,  annual  training, emergency call up, or activation
31    by the President of the United States with approved  pay  and
32    benefits.
33        (y)  "Military  leave without pay and benefits" refers to
34    individuals who enlist for active duty in a regular component
                            -19-               LRB9001294EGfg
 1    of the U.S. Armed Forces  or  other  duty  not  specified  or
 2    authorized under military leave with pay and benefits.
 3    (Source:  P.A.  88-670,  eff.  12-2-94;  89-21, eff. 6-21-95;
 4    89-25,  eff.  6-21-95;  89-76,  eff.  7-1-95;  89-324,   eff.
 5    8-13-95;  89-430, eff. 12-15-95; 89-502, eff. 7-1-96; 89-507,
 6    eff. 7-1-97; 89-628, eff. 8-9-96; revised 8-23-96.)
 7        Section 10.  The Illinois  Pension  Code  is  amended  by
 8    changing  Sections  15-107,  15-134,  15-136, 15-146, 15-154,
 9    15-157, 15-158.2, and 15-165 and adding Section  15-136.4  as
10    follows:
11        (40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
12        Sec. 15-107.  Employee.
13        (a)  "Employee"  means  any  member  of  the educational,
14    administrative, secretarial, clerical, mechanical,  labor  or
15    other  staff of an employer whose employment is permanent and
16    continuous or who is employed in a position in which services
17    are expected to be rendered on  a  continuous  basis  for  at
18    least  4  months or one academic term, whichever is less, who
19    (A) receives payment  for  personal  services  on  a  warrant
20    issued pursuant to a payroll voucher certified by an employer
21    and  drawn  by the State Comptroller upon the State Treasurer
22    or by an employer upon trust, federal or other funds, or  (B)
23    is  on  a  leave of absence without pay.  Employment which is
24    irregular, intermittent or temporary shall not be  considered
25    continuous for purposes of this paragraph.
26        However, a person is not an "employee" if he or she:
27             (1)  is   a   student   enrolled  in  and  regularly
28        attending classes in a college or university which is  an
29        employer,  and  is  employed on a temporary basis at less
30        than full time;
31             (2)  is currently receiving a retirement annuity  or
32        a  disability  retirement  annuity under Section 15-153.2
                            -20-               LRB9001294EGfg
 1        from this System;
 2             (3)  is on a military leave of absence;
 3             (4)  is eligible to participate in the Federal Civil
 4        Service  Retirement  System  and  is   currently   making
 5        contributions  to that system based upon earnings paid by
 6        an employer;
 7             (5)  is on leave of absence  without  pay  for  more
 8        than   60   days  immediately  following  termination  of
 9        disability benefits under this Article;
10             (6)  is hired  after  June  30,  1979  as  a  public
11        service  employment program participant under the Federal
12        Comprehensive Employment and Training  Act  and  receives
13        earnings  in  whole  or in part from funds provided under
14        that Act;
15             (7)  is employed on or after July 1, 1991 to perform
16        services that are excluded by  subdivision  (a)(7)(f)  or
17        (a)(19) of Section 210 of the federal Social Security Act
18        from  the  definition of employment given in that Section
19        (42 U.S.C. 410); or
20             (8)  participates  in  an   optional   program   for
21        part-time workers under Section 15-158.1.; or
22             (9)  participates   in   an   optional  program  for
23        employees under Section 15-158.2.
24        (b)  Any employer may, by filing a  written  notice  with
25    the  board,  exclude  from  the  definition of "employee" all
26    persons employed pursuant  to  a  federally  funded  contract
27    entered  into  after  July  1,  1982  with a federal military
28    department  in  a  program  providing  training  in  military
29    courses to federal military  personnel  on  a  military  site
30    owned  by  the United States Government, if this exclusion is
31    not prohibited by the federally funded  contract  or  federal
32    laws or rules governing the administration of the contract.
33        (c)  Any person appointed by the Governor under the Civil
34    Administrative Code of the State is an employee, if he or she
                            -21-               LRB9001294EGfg
 1    is  a participant in this system on the effective date of the
 2    appointment.
 3        (d)  A participant on lay-off status under civil  service
 4    rules  is  considered  an employee for not more than 120 days
 5    from the date of the lay-off.
 6        (e)  A participant is considered an employee  during  (1)
 7    the first 60 days of disability leave, (2) the period, not to
 8    exceed  one  year,  in  which  his  or  her  eligibility  for
 9    disability  benefits  is  being  considered  by  the board or
10    reviewed by the courts, and (3) the period he or she receives
11    disability benefits under the provisions of  Section  15-152,
12    workers'  compensation  or  occupational disease benefits, or
13    disability income under an insurance contract financed wholly
14    or partially by the employer.
15        (f)  Absences without pay, other than  formal  leaves  of
16    absence, of less than 30 calendar days, are not considered as
17    an interruption of a person's status as an employee.  If such
18    absences  during any period of 12 months exceed 30 work days,
19    the  employee  status  of  the  person   is   considered   as
20    interrupted as of the 31st work day.
21        (g)  A  staff  member  whose employment contract requires
22    services during an academic  term  is  to  be  considered  an
23    employee during the summer and other vacation periods, unless
24    he  or she declines an employment contract for the succeeding
25    academic term or his or her employment  status  is  otherwise
26    terminated,  and  he or she receives no earnings during these
27    periods.
28    (Source: P.A. 89-430, eff. 12-15-95.)
29        (40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)
30        Sec. 15-134.  Participant.
31        (a)  Each person shall, as  a  condition  of  employment,
32    become  a  participant  and be subject to this Article on the
33    date that he or she becomes an employee, makes an election to
                            -22-               LRB9001294EGfg
 1    participate in, or otherwise becomes a participant in one  of
 2    the retirement programs offered under this Article, whichever
 3    date is later.
 4        An  employee  who becomes a participant shall continue to
 5    be a participant until he or she becomes an  annuitant,  dies
 6    or  accepts  a  refund of contributions, except that a person
 7    shall not be deemed a participant while participating  in  an
 8    optional  program  for  part-time  workers  established under
 9    Section 15-158.1 or participating in an optional program  for
10    employees established under Section 15-158.2.
11        (b)  A   person   employed  concurrently  by  2  or  more
12    employers  is  eligible  to  participate  in  the  system  on
13    compensation received from all employers; however, his or her
14    combined basic compensation and combined earnings  shall  not
15    exceed  the  basic compensation and earnings which would have
16    been payable for full-time employment by the  employer  under
17    which  the  employee's  basic  compensation  is  the highest.
18    However, effective for all employment on  or  after  July  1,
19    1991,  where  a  person  is employed to render service to one
20    employer during an academic or summer term and is employed by
21    another  employer  to  render  service  to  it   during   the
22    succeeding,  nonoverlapping  academic  or  summer  term, then
23    exclusively for the purposes  of  this  Section,  the  person
24    shall  be considered to be successively employed by more than
25    one employer, rather than concurrently employed by 2 or  more
26    employers.
27    (Source: P.A. 89-430, eff. 12-15-95.)
28        (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
29        Sec. 15-136.  Retirement annuities - Amount.
30        (a)  The  amount  of  the  retirement  annuity  shall  be
31    determined  by whichever of the following rules is applicable
32    and provides the largest annuity:
33        Rule 1:  The retirement annuity shall be 1.67%  of  final
                            -23-               LRB9001294EGfg
 1    rate  of  earnings for each of the first 10 years of service,
 2    1.90% for each of the next 10 years  of  service,  2.10%  for
 3    each  year  of  service in excess of 20 but not exceeding 30,
 4    and 2.30% for each year in excess  of  30,  except  that  the
 5    annuity  for  those  persons  having  made  an election under
 6    Section 15-154(a-1) shall be calculated and payable under the
 7    portable  retirement  benefit   program   pursuant   to   the
 8    provisions of Section 15-136.4.
 9        Rule  2:  The  retirement annuity shall be the sum of the
10    following,  determined   from   amounts   credited   to   the
11    participant  in  accordance with the actuarial tables and the
12    prescribed rate  of  interest  in  effect  at  the  time  the
13    retirement annuity begins:
14        (i)  The  normal  annuity  which  can  be  provided on an
15    actuarially actuarial equivalent basis,  by  the  accumulated
16    normal contributions as of the date the annuity begins; and
17        (ii)  an annuity from employer contributions of an amount
18    which can be provided on an actuarially equivalent basis from
19    the  accumulated normal contributions made by the participant
20    under Section 15-113.6 and Section 15-113.7  plus  1.4  times
21    all  other  accumulated  normal  contributions  made  by  the
22    participant, except that the annuity for those persons having
23    made   an   election   under  Section  15-154(a-1)  shall  be
24    calculated and payable under the portable retirement  benefit
25    program pursuant to the provisions of Section 15-136.4.
26        Rule  3:  The  retirement annuity of a participant who is
27    employed at least one-half time during the  period  on  which
28    his or her final rate of earnings is based, shall be equal to
29    the   participant's  years  of  service  not  to  exceed  30,
30    multiplied by (1) $96 if  the  participant's  final  rate  of
31    earnings  is  less than $3,500, (2) $108 if the final rate of
32    earnings is at least $3,500 but less than $4,500, (3) $120 if
33    the final rate of earnings is at least $4,500 but  less  than
34    $5,500,  (4)  $132  if the final rate of earnings is at least
                            -24-               LRB9001294EGfg
 1    $5,500 but less than $6,500, (5) $144 if the  final  rate  of
 2    earnings is at least $6,500 but less than $7,500, (6) $156 if
 3    the  final  rate of earnings is at least $7,500 but less than
 4    $8,500, (7) $168 if the final rate of earnings  is  at  least
 5    $8,500  but  less than $9,500, and (8) $180 if the final rate
 6    of earnings is $9,500 or more, except that  the  annuity  for
 7    those   persons   having   made  an  election  under  Section
 8    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.
11        Rule 4:  A participant who is at least age 50 and has  25
12    or  more years of service as a police officer or firefighter,
13    and a participant who is age 55 or over and has at  least  20
14    but  less  than  25  years  of service as a police officer or
15    firefighter, shall be entitled to a retirement annuity  of  2
16    1/4%  of  the final rate of earnings for each of the first 10
17    years of service as a police officer or firefighter,  2  1/2%
18    for  each of the next 10 years of service as a police officer
19    or firefighter, and 2 3/4% for each  year  of  service  as  a
20    police  officer  or  firefighter in excess of 20, except that
21    the annuity for those persons have  made  an  election  under
22    Section 15-154(a-1) shall be calculated and payable under the
23    portable   retirement   benefit   program   pursuant  to  the
24    provisions of Section 15-136.4.  The retirement  annuity  for
25    all  other  service  shall  be computed under Rule 1, payable
26    under the portable retirement benefit program pursuant to the
27    provisions of Section 15-136.4, if applicable.
28        (b)  The retirement annuity provided under Rules 1 and  3
29    above  shall  be  reduced  by  1/2  of  1% for each month the
30    participant is under  age  60  at  the  time  of  retirement.
31    However,  this  reduction  shall  not  apply in the following
32    cases:
33             (1)  For a  disabled  participant  whose  disability
34        benefits  have  been  discontinued  because he or she has
                            -25-               LRB9001294EGfg
 1        exhausted  eligibility  for  disability  benefits   under
 2        clause (6) (5) of Section 15-152;
 3             (2)  For  a participant who has at least 35 years of
 4        service; or
 5             (3)  For that portion of a retirement annuity  which
 6        has   been   provided   on  account  of  service  of  the
 7        participant during periods when he or she  performed  the
 8        duties  of  a  police  officer  or  firefighter, if these
 9        duties were performed for at least  5  years  immediately
10        preceding the date the retirement annuity is to begin.
11        (c)  The  maximum retirement annuity provided under Rules
12    1, 2, and 4 shall be the lesser of (1) the  annual  limit  of
13    benefits  as specified in Section 415 of the Internal Revenue
14    Code of 1986, as such Section may be  amended  from  time  to
15    time  and  as  such  benefit  limits shall be adjusted by the
16    Commissioner of Internal Revenue, and (2) 75% of  final  rate
17    of earnings; however, this limitation of 75% of final rate of
18    earnings  shall not apply to a person who is a participant or
19    annuitant on September 15, 1977 if it results in a retirement
20    annuity less than that which is payable to the  annuitant  or
21    which  would  have  been payable to the participant under the
22    provisions of this Article in effect on June 30, 1977.
23        (d)  An annuitant whose status as an employee  terminates
24    after  August  14,  1969 shall receive automatic increases in
25    his or her retirement annuity as follows:
26        Effective January 1 immediately following  the  date  the
27    retirement  annuity  begins,  the  annuitant shall receive an
28    increase in his or her monthly retirement annuity  of  0.125%
29    of the monthly retirement annuity provided under Rule 1, Rule
30    2,  Rule  3, or Rule 4, contained in this Section, multiplied
31    by the number of full months which elapsed from the date  the
32    retirement  annuity  payments  began to January 1, 1972, plus
33    0.1667% of such annuity, multiplied by  the  number  of  full
34    months  which  elapsed  from January 1, 1972, or the date the
                            -26-               LRB9001294EGfg
 1    retirement annuity payments began,  whichever  is  later,  to
 2    January 1, 1978, plus 0.25% of such annuity multiplied by the
 3    number  of full months which elapsed from January 1, 1978, or
 4    the date the retirement annuity payments began, whichever  is
 5    later, to the effective date of the increase.
 6        The  annuitant  shall  receive  an increase in his or her
 7    monthly retirement  annuity  on  each  January  1  thereafter
 8    during  the  annuitant's  life  of  3% of the monthly annuity
 9    provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
10    this Section.  The change made under this subsection by  P.A.
11    81-970  is  effective  January  1,  1980  and applies to each
12    annuitant whose status as an employee  terminates  before  or
13    after that date.
14        Beginning January 1, 1990, all automatic annual increases
15    payable   under   this  Section  shall  be  calculated  as  a
16    percentage of the total annuity payable at the  time  of  the
17    increase,  including  all  increases previously granted under
18    this Article.      The change made in this subsection by P.A.
19    85-1008 is effective January  26,  1988,  and  is  applicable
20    without  regard  to  whether status as an employee terminated
21    before that date.
22        (e)  If, on January 1, 1987, or the date  the  retirement
23    annuity payment period begins, whichever is later, the sum of
24    the  retirement  annuity  provided  under Rule 1 or Rule 2 of
25    this Section and  the  automatic  annual  increases  provided
26    under  the  preceding subsection or Section 15-136.1, amounts
27    to less than the retirement annuity which would  be  provided
28    by  Rule  3,  the retirement annuity shall be increased as of
29    January 1, 1987, or the date the retirement  annuity  payment
30    period  begins, whichever is later, to the amount which would
31    be provided by Rule 3 of this Section. Such increased  amount
32    shall  be considered as the retirement annuity in determining
33    benefits provided under other Sections of this Article.  This
34    paragraph  applies  without  regard  to  whether status as an
                            -27-               LRB9001294EGfg
 1    employee  terminated  before  the  effective  date  of   this
 2    amendatory  Act  of  1987,  provided  that  the annuitant was
 3    employed at least one-half time during the  period  on  which
 4    the final rate of earnings was based.
 5        (f)  A participant is entitled to such additional annuity
 6    as  may  be  provided  on an actuarially actuarial equivalent
 7    basis, by any accumulated additional contributions to his  or
 8    her  credit.   However,  the additional contributions made by
 9    the participant toward the  automatic  increases  in  annuity
10    provided  under  this Section shall not be taken into account
11    in determining the amount of such additional annuity.
12        (g)  If, (1) by law, a function of a  governmental  unit,
13    as  defined by Section 20-107 of this Code, is transferred in
14    whole or in part  to  an  employer,  and  (2)  a  participant
15    transfers  employment  from  such  governmental  unit to such
16    employer within 6 months after the transfer of the  function,
17    and (3) the sum of (A) the annuity payable to the participant
18    under  Rule  1,  2, or 3 of this Section (B) all proportional
19    annuities payable to the participant by all other  retirement
20    systems  covered  by  Article 20, and (C) the initial primary
21    insurance amount to which the participant is  entitled  under
22    the  Social Security Act, is less than the retirement annuity
23    which would have been payable if  all  of  the  participant's
24    pension  credits  validated  under  Section  20-109  had been
25    validated under this system, a supplemental annuity equal  to
26    the  difference  in  such  amounts  shall  be  payable to the
27    participant.
28        (h)  On January 1, 1981, an annuitant who was receiving a
29    retirement annuity on or before January 1,  1971  shall  have
30    his  or  her  retirement annuity then being paid increased $1
31    per month for each year of creditable service. On January  1,
32    1982,  an  annuitant  whose  retirement  annuity  began on or
33    before January 1, 1977, shall  have  his  or  her  retirement
34    annuity  then being paid increased $1 per month for each year
                            -28-               LRB9001294EGfg
 1    of creditable service.
 2        (i)  On January 1, 1987, any annuitant  whose  retirement
 3    annuity  began  on  or before January 1, 1977, shall have the
 4    monthly retirement annuity increased by an amount equal to 8¢
 5    per year of creditable service times the number of years that
 6    have elapsed since the annuity began.
 7    (Source: P.A. 86-272; 86-273; 86-1028; revised 5-17-96.)
 8        (40 ILCS 5/15-136.4 new)
 9        Sec. 15-136.4.  Portable Retirement Benefit Program.
10        (a)  For purposes  of  this  Section,  "eligible  spouse"
11    means  the  husband  or  wife  of  a  participant to whom the
12    participant is married on the date the participant's  annuity
13    begins.   However, if the participant should die prior to the
14    date the annuity would have  begun,  then  "eligible  spouse"
15    means  the  husband  or wife, if any, to whom the participant
16    was married throughout the one-year period preceding the date
17    of his or her death.
18        (b)  If a participant has an eligible spouse on the  date
19    his  or  her  annuity payments commence, the annuity shall be
20    paid in the form of a 50% joint and survivor  annuity  unless
21    the  participant  elects  otherwise in writing and his or her
22    eligible spouse consents to that election.  Under a 50% joint
23    and survivor annuity, a reduced amount shall be paid  to  the
24    participant  for  his or her lifetime and his or her eligible
25    spouse, if surviving at the  participant's  death,  shall  be
26    entitled   to  receive  thereafter  a  lifetime  survivorship
27    annuity in a monthly amount  equal  to  50%  of  the  reduced
28    monthly  amount  that  was  payable  to the participant.  The
29    reduced amount payable to the participant under the 50% joint
30    and  survivor  annuity  shall  be  determined  so  that   the
31    aggregate  of the annuity payments expected to be made to the
32    participant and his or her eligible spouse is  the  actuarial
33    equivalent  of  a single-life annuity.  The last payment of a
                            -29-               LRB9001294EGfg
 1    50% joint and survivor annuity shall be made as of the  first
 2    day of the month in which the death of the survivor occurs.
 3        (c)  Instead  of  the  50%  joint and survivor annuity, a
 4    participant may elect in writing, within  the  90-day  period
 5    prior  to  the date his or her annuity payments commence, and
 6    only with the consent of  his  or  her  eligible  spouse,  to
 7    receive  a  monthly  amount  in  the  form  of  a single-life
 8    annuity.  A participant may also elect  instead  an  optional
 9    form  of  benefit  under  subsection  (k).    However, if the
10    participant does elect an  optional  form  of  benefit  under
11    subsection  (k)  and  if  the  contingent annuitant under the
12    option is not the participant's  eligible  spouse,  then  the
13    optional  election shall be canceled and the annuity shall be
14    paid in the form of a 50% joint and survivor annuity  unless,
15    within  the  90-day period preceding the annuity commencement
16    date, the eligible spouse consents to the optional election.
17        (d)  A participant may  also  revoke  any  election  made
18    under  this  Section  at  any  time  during the 90-day period
19    preceding the date the participant's annuity commences if the
20    purpose of such revocation is to reinstate coverage under the
21    50% joint and survivor annuity.
22        (e)  The eligible spouse's consent to any  election  made
23    pursuant  to this Section that requires the eligible spouse's
24    consent shall be in writing and shall acknowledge the  effect
25    of the consent.  In addition, the eligible spouse's signature
26    on  the written consent must be witnessed by a notary public.
27    The eligible spouse's consent need not  be  obtained  if  the
28    system  is  satisfied  that there is no eligible spouse, that
29    the eligible spouse cannot be  located,  or  because  of  any
30    other  relevant  circumstances.  An eligible spouse's consent
31    under  this  Section  is  valid  only  with  respect  to  the
32    specified alternate contingent annuitant  designated  by  the
33    participant.    If  the  alternate  contingent  annuitant  is
34    subsequently changed, a new consent by the eligible spouse is
                            -30-               LRB9001294EGfg
 1    required.  The eligible spouse's consent to an election  made
 2    by a participant pursuant to this Section, once made, may not
 3    be revoked by the eligible spouse.
 4        (f)  Within  a  reasonable  period  of time preceding the
 5    date a participant's annuity commences, a  participant  shall
 6    be  supplied  with a written explanation of (1) the terms and
 7    conditions of the 50% joint and  survivor  annuity,  (2)  the
 8    participant's  right,  if any, to elect a single-life annuity
 9    or an optional form of payment under subsection (k)  in  lieu
10    of the 50% joint and survivor annuity and subject, in certain
11    cases,  to  his or her eligible spouse's consent, and (3) the
12    participant's right to reinstate coverage under the 50% joint
13    and survivor annuity prior to his or her annuity commencement
14    date by revoking an election of a single-life annuity  or  an
15    optional form of benefit under subsection (k).
16        (g)  If  a  participant does not have  an eligible spouse
17    on the  date  his  or  her  annuity  payments  commence,  the
18    participant  shall  receive a single-life annuity, subject to
19    his or her right, if  any,  to  elect  an  optional  form  of
20    benefit. The last payment of the single-life annuity shall be
21    made  as  of the first day of the month in which the death of
22    the participant occurs.
23        (h)  A participant with a least 5 years of service  whose
24    employment  has  not  terminated  shall be covered by the 50%
25    joint and survivor annuity provisions so that if  he  or  she
26    dies  prior to termination of employment, his or her eligible
27    spouse will be entitled to receive an  annuity.  The  annuity
28    payable  under  this  subsection  (h)  to the eligible spouse
29    shall be actuarially equivalent to the amount that  would  be
30    payable  as a survivor annuity under subsection (b) if (1) in
31    the case of a participant who dies after the  date  on  which
32    the  participant  attained  the  earliest retirement age, the
33    participant had retired with an immediate qualified joint and
34    survivor annuity on the day before the participant's date  of
                            -31-               LRB9001294EGfg
 1    death; or (2) in the case of a participant  who  dies  on  or
 2    before  the date on which the participant would have attained
 3    the earliest retirement age, the  participant  had  separated
 4    from  service  on the date of death, survived to the earliest
 5    retirement age, retired with an immediate qualified joint and
 6    survivor annuity at the earliest retirement age, and died  on
 7    the  day  after  the  day on which the participant would have
 8    attained the earliest retirement age.
 9        The  annuity  payable  to  an  eligible   spouse   of   a
10    participant  shall  commence as of the beginning of the month
11    next following the later of the date of death or the date the
12    participant would have met the eligibility  requirements  for
13    an  annuity  and  shall continue through the beginning of the
14    month in which the death of the eligible spouse occurs.
15        No benefit shall be payable under this subsection (h) for
16    death during employment after the participant  has  satisfied
17    the  requirements  for  retirement  if an option is effective
18    under subsection (k).
19        (i)  A participant who (1) has terminated employment with
20    at least 5 years of service,  (2)  has  not  begun  receiving
21    annuity  payments,  (3)  has not taken a refund under Section
22    15-154(a-2), and (4) has  not  elected  an  effective  option
23    under  subsection  (k), shall be covered by the 50% joint and
24    survivor annuity provisions of subsection (b) until the  date
25    his  or  her  annuity  payments commence.  If the participant
26    dies before the date his or her  annuity  payments  commence,
27    the  participant's surviving eligible spouse shall receive an
28    annuity computed in accordance with the applicable provisions
29    of this Section as if the participant's annuity payments  had
30    commenced  on  the  first day of the month coincident with or
31    next following the later of his or her date of death  or  the
32    date   the   participant  would  have  been  eligible  for  a
33    retirement annuity based on  service  prior  to  his  or  her
34    death.   The annuity payable to such an eligible spouse shall
                            -32-               LRB9001294EGfg
 1    commence on the first day of the  month  coincident  with  or
 2    next  following  the later of the participant's date of death
 3    or the date the participant would have been  eligible  for  a
 4    retirement  annuity  based  on service prior to his death and
 5    shall continue through the beginning of the  month  in  which
 6    the death of the eligible spouse occurs.
 7        (j)  The  provisions  of  subsection (i) shall not affect
 8    the right of a participant to elect  a  single-life  annuity,
 9    pursuant to the provisions of subsection (b).
10        (k)  By  filing  a  timely  election  with  the system, a
11    participant who will be  eligible  to  receive  a  retirement
12    annuity under this Section may designate his or her spouse or
13    any  person  approved  by the system as his or her contingent
14    annuitant  and  elect  to  receive  an  annuity  payable   in
15    accordance  with one of the following options, instead of the
16    annuity to which he or she may otherwise become entitled:
17             Option 1:  The participant shall receive  a  reduced
18        annuity  payable  for life, and payments in the amount of
19        100%  of   such   reduced   amount   shall,   after   the
20        participant's  death,  be  continued  to  the  contingent
21        annuitant during the latter's lifetime.
22             Option  2:  The  participant shall receive a reduced
23        annuity payable for life, and payments in the  amount  of
24        75%   of   such   reduced   annuity   shall,   after  the
25        participant's  death,  be  continued  to  the  contingent
26        annuitant during the latter's lifetime.
27             Option 3:  The participant shall receive  a  reduced
28        annuity  payable  for life, and payments in the amount of
29        50%  of   such   reduced   annuity   shall,   after   the
30        participant's  death,  be  continued  to  the  contingent
31        annuitant during the latter's lifetime.
32        The aggregate of the annuity payments expected to be paid
33    to  a  participant  and his contingent annuitant under any of
34    the above options shall be the actuarial  equivalent  of  the
                            -33-               LRB9001294EGfg
 1    annuity that the participant is otherwise entitled to receive
 2    upon retirement.
 3        Under no circumstances may an option be elected, changed,
 4    or   revoked   after   the  date  the  participant's  annuity
 5    commences.  An option in favor of a contingent annuitant  who
 6    is  not  the  participant's eligible spouse may be revoked at
 7    any time prior to the date the participant's annuity payments
 8    commence.  If the  contingent  annuitant  under  the  elected
 9    option  is  not  the  participant's eligible spouse, then the
10    election is valid only if the eligible spouse consents to the
11    participant's  optional  election   and   to   the   specific
12    contingent  annuitant  within the 90-day period preceding the
13    date the participant's annuity commences.
14        An election made pursuant to this  subsection  (k)  shall
15    become inoperative if the participant's employment terminates
16    before  he or she is eligible for a retirement annuity, or if
17    the participant or the contingent annuitant dies  before  the
18    date  the  participant's annuity payments commence, or if the
19    eligible spouse's consent is  required  and  not  given.   An
20    effective option under this subsection (k) takes the place of
21    any  benefit  otherwise  payable  under this Section, and the
22    form made available by the system for election of the  option
23    shall so specify.
24        (1)  Within   the  appropriate  applicable  period  under
25    Section 417 of the Internal Revenue Code of 1986, as  amended
26    from  time  to  time,  a participant shall be supplied with a
27    written explanation of (1) the terms and  conditions  of  the
28    preretirement survivor annuity under subsections (h) and (i),
29    (2)  the  participant's right, if any, to elect a single-life
30    annuity or an optional form of payment under  subsection  (k)
31    in lieu of the preretirement survivor annuity and subject, in
32    certain  cases,  to his or her eligible spouse's consent, and
33    (3) the participant's right to reinstate coverage  under  the
34    preretirement  survivor  annuity by revoking an election of a
                            -34-               LRB9001294EGfg
 1    single-life annuity or an  optional  form  of  benefit  under
 2    subsection (k).
 3        (40 ILCS 5/15-146) (from Ch. 108 1/2, par. 15-146)
 4        Sec.  15-146.   Survivors  insurance  benefits  - Minimum
 5    amounts.
 6        (a)  The  minimum  total  survivors  annuity  payable  on
 7    account of the death of a participant shall  be  50%  of  the
 8    retirement  annuity which would have been provided under Rule
 9    1, Rule 2, or Rule 3 of Section 15-136 upon the participant's
10    attainment of the minimum age at which the penalty for  early
11    retirement  would  not  be  applicable  or  the  date  of the
12    participant's death, whichever is  later,  on  the  basis  of
13    credits earned prior to the time of death.
14        (b)  The  minimum  total  survivors  annuity  payable  on
15    account  of  the  death  of  an annuitant shall be 50% of the
16    retirement annuity which is payable under Section  15-136  at
17    the time of death or 50% of the disability retirement annuity
18    payable   under  Section  15-153.2.  This  minimum  survivors
19    annuity shall apply to each  participant  and  annuitant  who
20    dies  after  September  16,  1979,  whether or not his or her
21    employee status terminates before or after that date.
22        (c)  If an annuitant has elected a reversionary  annuity,
23    the  retirement  annuity  referred to in this Section is that
24    which would have been payable  had  such  election  not  been
25    filed.
26        (d)  If  a participant has made the election provided for
27    under Section 15-154(a-1), the minimum survivor benefit shall
28    be determined under Section 15-136.4.
29    (Source: P.A. 83-1362; 83-1440.)
30        (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
31        Sec. 15-154.  Refunds.
32        (a)  A  participant  whose  status  as  an  employee   is
                            -35-               LRB9001294EGfg
 1    terminated,  regardless  of cause, or who has been on lay off
 2    status for more than 120 days, and who is  not  on  leave  of
 3    absence,  is  entitled  to  a  refund  of  contributions upon
 4    application; except  that  not  more  than  one  such  refund
 5    application may be made during any academic year.
 6        Except  as  set forth in subsections (a-1) and (a-2), the
 7    refund shall be the sum of the accumulated normal, additional
 8    and survivors insurance contributions,  less  the  amount  of
 9    interest  credited on these contributions each year in excess
10    of 4 1/2% of the amount on which interest was calculated.
11        (a-1)  Every person who becomes a participating  employee
12    after  the  effective date of this amendatory Act of 1997 may
13    elect within 60 days of becoming a participant  to  have  any
14    refund  calculated  pursuant  to subsection (a-2) by forgoing
15    all  survivors  insurance  benefits  to  which  the  person's
16    survivors would otherwise be entitled under this Article  and
17    by  forgoing  the  death  benefits  under Sections 15-141 and
18    15-142.  This election is irrevocable  and  may  be  made  by
19    filing  an  election  with  the  system  on  such form as the
20    Executive Director shall prescribe.
21        Each person  who  is  a  participating  employee  on  the
22    effective  date  of  this amendatory Act of 1997 shall have a
23    one-time option to elect to have his or her refund calculated
24    pursuant to  subsection  (a-2),  by  forgoing  all  survivors
25    insurance  benefits  to  which  the  person's survivors would
26    otherwise be entitled under this Article and by forgoing  the
27    death   benefits  under  Sections  15-141  and  15-142.   The
28    election will not be  effective  until  one  year  after  the
29    election   is  filed  with  the  system.   This  election  is
30    irrevocable and may be made by filing an  election  with  the
31    system,   on  such  form  as  the  Executive  Director  shall
32    prescribe, within one year of  the  effective  date  of  this
33    amendatory Act of 1997.
34        A  person  may  make  the  one-time  irrevocable election
                            -36-               LRB9001294EGfg
 1    authorized under this  Section  or  the  election  authorized
 2    under  Section  15-158.2(g), but may not make both elections.
 3    Any person interested in  electing  the  portable  retirement
 4    benefit  program  provided  under  this  Section  and Section
 5    15-136.4  must  be  given  a  consultation  with  the   State
 6    Universities Retirement System before making that election.
 7        (a-2)  The refund elected under subsection (a-1) shall be
 8    the   sum   of   the  participant's  accumulated  normal  and
 9    additional contributions, as defined in Sections  15-116  and
10    15-117.   If  the participant terminates with 5 or more years
11    of service for employment as defined in Section 15-113.1,  he
12    or  she  shall  also  be  entitled  to  a  refund of employer
13    contributions  in  an  amount  equal  to  the  sum   of   the
14    accumulated  normal  and additional contributions, as defined
15    in Sections 15-116 and 15-117.
16        (b)  Upon  acceptance  of  a  refund,   the   participant
17    forfeits all accrued rights and credits in the System, and if
18    subsequently  reemployed, the participant shall be considered
19    a new employee subject to all the qualifying  conditions  for
20    participation  and eligibility for benefits applicable to new
21    employees. If  such  person  again  becomes  a  participating
22    employee and continues as such for 2 years, or is employed by
23    an  employer  and  participates  for  at least 2 years in the
24    Federal Civil Service Retirement  System,  all  such  rights,
25    credits,  and  previous  status  as  a  participant  shall be
26    restored upon repayment of the amount of the refund, together
27    with compound interest thereon from the date the  refund  was
28    received to the date of repayment at the rate of 6% per annum
29    through  August  31,  1982,  and at the effective rates after
30    that date.
31        (c)  If  a  participant  has  made  survivors   insurance
32    contributions,  but  has  no  survivors insurance beneficiary
33    upon retirement, he or she shall be entitled to a  refund  of
34    the  accumulated  survivors insurance contributions, or to an
                            -37-               LRB9001294EGfg
 1    additional annuity  the  value  of  which  is  equal  to  the
 2    accumulated survivors insurance contributions.
 3        (d)  A  participant,  upon  application, is entitled to a
 4    refund of his or  her  accumulated  additional  contributions
 5    except  those covering the cost of the annual increase in the
 6    retirement annuity provided under Section  15-136.  Upon  the
 7    acceptance   of  such  a  refund  of  accumulated  additional
 8    contributions,  the  participant  forfeits  all  rights   and
 9    credits which may have accrued because of such contributions.
10        (e)  A  participant  who  terminates  his or her employee
11    status and elects  to  waive  service  credit  under  Section
12    15-154.2,  is entitled to a refund of the accumulated normal,
13    additional and survivors  insurance  contributions,  if  any,
14    which  were  credited the participant for this service, or to
15    an additional annuity the value of  which  is  equal  to  the
16    accumulated   normal,   additional  and  survivors  insurance
17    contributions, if any; except that not  more  than  one  such
18    refund application may be made during any academic year. Upon
19    acceptance  of  this  refund,  the  participant  forfeits all
20    rights and credits accrued because of this service.
21        (f)  If  a  police  officer  or  firefighter  receives  a
22    retirement annuity under Rule 1, 2, or 3 of  Section  15-136,
23    he  or she shall be entitled at retirement to a refund of the
24    difference   between   his   or   her   accumulated    normal
25    contributions  and  the normal contributions which would have
26    accumulated had such person filed a waiver of the  retirement
27    formula provided by Rule 4 of Section 15-136.
28        (g)  If,  at  the time of retirement, a participant would
29    be entitled to a retirement annuity under Rule 1, 2, 3  or  4
30    of  Section  15-136  that  exceeds  the  maximum specified in
31    clause (1) of subsection (c) of Section  15-136,  he  or  she
32    shall  be entitled to a refund of the employee contributions,
33    if any, paid under Section 15-157 after the date  upon  which
34    continuance of such contributions would have otherwise caused
                            -38-               LRB9001294EGfg
 1    the  retirement annuity to exceed this maximum, plus compound
 2    interest at the effective rates.
 3    (Source: P.A. 87-8; 87-794; 87-895; 87-1265; 88-45.)
 4        (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
 5        Sec. 15-157.  Employee Contributions.
 6        (a)  Each participating employee shall make contributions
 7    towards the retirement annuity of each  payment  of  earnings
 8    applicable  to  employment under this system on and after the
 9    date  of  becoming  a  participant  as  follows:   Prior   to
10    September 1, 1949, 3 1/2% of earnings; from September 1, 1949
11    to  August 31, 1955, 5%; from September 1, 1955 to August 31,
12    1969,  6%;  from  September  1,  1969,   6   1/2%.      These
13    contributions  are  to  be considered as normal contributions
14    for purposes of this Article.
15        Each participant who is a police officer  or  firefighter
16    shall  make  normal  contributions  of  8% of each payment of
17    earnings applicable to employment  as  a  police  officer  or
18    firefighter  under this system on or after September 1, 1981,
19    unless he or she files with the board within  60  days  after
20    the  effective date of this amendatory Act of 1991 or 60 days
21    after the board receives notice that he or she is employed as
22    a police  officer  or  firefighter,  whichever  is  later,  a
23    written  notice  waiving  the  retirement formula provided by
24    Rule 4 of Section 15-136.  This waiver shall be  irrevocable.
25    If  a participant had met the conditions set forth in Section
26    15-132.1 prior to the effective date of this  amendatory  Act
27    of   1991   but   failed   to   make  the  additional  normal
28    contributions required by this paragraph, he or she may elect
29    to pay the additional contributions plus compound interest at
30    the effective rate.  If  such  payment  is  received  by  the
31    board,  the  service  shall  be  considered as police officer
32    service in calculating the retirement annuity under Rule 4 of
33    Section 15-136.
                            -39-               LRB9001294EGfg
 1        (b)  Starting  September  1,  1969,  each   participating
 2    employee  shall make additional contributions of 1/2 of 1% of
 3    earnings to finance a portion  of  the  cost  of  the  annual
 4    increases   in  retirement  annuity  provided  under  Section
 5    15-136.
 6        (c)  Each participating  employee  shall  make  survivors
 7    insurance  contributions  of  1% of earnings applicable under
 8    this system on and after August 1,  1959.   The  contribution
 9    made under this subsection shall be used to finance survivors
10    insurance  benefits,  unless  the  participant  has  made  an
11    election   under  Section  15-154(a-1),  in  which  case  the
12    contribution made under this  subsection  shall  be  used  to
13    finance   the   benefits   obtained   under   that  election.
14    Contributions  in  excess  of  $80  during  any  fiscal  year
15    beginning August 31, 1969 and in excess of  $120  during  any
16    fiscal  year  thereafter  until  September  1,  1971 shall be
17    considered as additional contributions for purposes  of  this
18    Article.
19        (d)  If the board by board rule so permits and subject to
20    such  conditions  and  limitations as may be specified in its
21    rules, a participant may make other additional  contributions
22    of  such percentage of earnings or amounts as the participant
23    shall elect in a  written  notice  thereof  received  by  the
24    board.
25        (e)  That  fraction  of a participant's total accumulated
26    normal contributions, the numerator of which is equal to  the
27    number  of  years  of  service  in  excess  of  that which is
28    required to qualify for the maximum retirement  annuity,  and
29    the denominator of which is equal to the total service of the
30    participant,  shall  be  considered as accumulated additional
31    contributions.  The determination of the  applicable  maximum
32    annuity  and the adjustment in contributions required by this
33    provision shall be made as of the date of  the  participant's
34    retirement.
                            -40-               LRB9001294EGfg
 1        (f)  Notwithstanding   the   foregoing,  a  participating
 2    employee shall not be required to  make  contributions  under
 3    this  Section  after  the date upon which continuance of such
 4    contributions would otherwise cause  his  or  her  retirement
 5    annuity to exceed the maximum retirement annuity as specified
 6    in clause (1) of subsection (c) of Section 15-136.
 7    (Source: P.A. 86-272; 86-1488.)
 8        (40 ILCS 5/15-158.2)
 9        Sec.    15-158.2.   Optional   retirement   program   for
10    educational employees.
11        (a)  Purpose.  The General  Assembly  finds  that  it  is
12    important for colleges and universities to be able to attract
13    and  retain the most qualified employees and that in order to
14    attract and retain these employees, colleges and universities
15    should  have  the  flexibility  to  provide  an   alternative
16    retirement  program  for eligible employees persons who elect
17    not to participate in the other retirement programs  plan  of
18    contributions  and  benefits  otherwise  provided  under this
19    Article.
20        (b)  Definitions.  For  the  purposes  of  this  Section,
21    "eligible employee person" means an employee who is  eligible
22    to   participate   in   the   State  Universities  University
23    Retirement System without respect to Section 15-107(a)(9) and
24    who does not have sufficient age and service to qualify for a
25    retirement  annuity  under  Section  15-135.   A   "currently
26    eligible employee person" is an employee a person who becomes
27    an  eligible  employee  person  on  the effective date of the
28    optional retirement program  established  by  the  employee's
29    person's  employer.  A "newly eligible employee person" is an
30    employee a person who becomes  an  eligible  employee  person
31    after  the  effective date of the optional retirement program
32    established by the employee's person's employer.
33        (c)  Program.  Each employer subject to this Article  may
                            -41-               LRB9001294EGfg
 1    elect  to establish an optional retirement program under this
 2    Section for the  eligible  employees  whom  persons  that  it
 3    employs.   The  optional  retirement  program  shall  provide
 4    retirement   benefits  for  participating  employees  persons
 5    through the purchase of annuity contracts,  either  fixed  or
 6    variable  or  a  combination thereof, through the purchase of
 7    mutual funds, or through both and shall may also provide  for
 8    death and disability benefits.
 9        The  State  Universities  Retirement  System shall be the
10    plan sponsor for the program.  Consistent with its  fiduciary
11    duty  to  the  participants and beneficiaries of the program,
12    the Board of Trustees of the System may delegate  aspects  of
13    program  administration  as  it  sees  fit to The program may
14    provide  for  administration  of  the  program  by  companies
15    authorized to do business in this State, to or the employers,
16    employer or to a combination of both, but shall  not  require
17    any action by the State Universities Retirement System or its
18    Board  of  Trustees.    Two  or  more  employers may agree to
19    establish a joint program under this Section.
20        The plan program must be  qualified  under  the  Internal
21    Revenue Code of 1986.
22        (d)  Proposals.   The  System,  in  consultation with the
23    employers, An  employer  under  this  Section  shall  solicit
24    proposals  to  participate  in the program from insurance and
25    annuity companies and mutual fund companies authorized to  do
26    conduct  such  business  in  this  State.   In  reviewing the
27    proposals received and  approving  and  contracting  with  no
28    fewer  than  2  and  no  more than 7 companies, at least 2 of
29    which must be insurance and annuity companies, the  Board  of
30    Trustees  of  the System deciding to implement a program, the
31    employer shall consider, among other  things,  the  following
32    criteria:
33             (1)  the  nature  and  extent  of  the benefits that
34        would be provided to the participants;
                            -42-               LRB9001294EGfg
 1             (2)  the reasonableness of the benefits in  relation
 2        to the premium charged;
 3             (3)  the  suitability  of  the benefits to the needs
 4        and interests of the participating employees persons  and
 5        the employer;
 6             (4)  the  ability of the company to provide benefits
 7        under the contract and the  financial  stability  of  the
 8        company; and
 9             (5)  the efficacy of the contract in the recruitment
10        and retention of employees.
11        An  employer  that elects to offer an optional retirement
12    program  under   subsection   (c)   may   only   select   for
13    participation  in  the  program  2  or  more of the companies
14    approved by the Board of Trustees of the System.  The System,
15    in consultation with the employers, shall periodically review
16    each approved company; a company may continue to  participate
17    in the program only so long as it continues to be an approved
18    company under contract with the Board.
19        (e)  System  Conflict  of Interest.  In order to preclude
20    any conflict of interest by the System,  only  insurance  and
21    annuity   companies   and  mutual  fund  companies  that  are
22    authorized to do business in this State may be  approved,  in
23    accordance   with   the  procedures  of  subsection  (d),  to
24    participate in this program and offer investment options  for
25    program participants.
26        (f)  Account   Balance   Transfers.   Employees  who  are
27    participating in the program  must  be  allowed  to  transfer
28    their account balances from the investment options offered by
29    one  of  the  companies  selected  by  the  employer  to  the
30    investment  options  offered  by another company so selected,
31    subject to applicable contractual provisions.
32        (g) (e)  Participation.   Any  eligible  employee  person
33    employed  by  an  employer  may  elect  to participate in the
34    optional retirement program offered  by  the  employer  under
                            -43-               LRB9001294EGfg
 1    subsection  (c)  that employer's optional retirement program.
 2    The election must be  made  in  writing  and  in  the  manner
 3    prescribed  by  the  System  employer.   A currently eligible
 4    employee person must make take this election within one  year
 5    after   the   effective   date  of  the  employer's  optional
 6    retirement program.  A newly eligible  employee  person  must
 7    make  take  this  election  within  60 days after becoming an
 8    eligible employee person.  A person  may  make  the  one-time
 9    irrevocable  election  authorized  under  this Section or the
10    election authorized under Section 15-154(a-1),  but  may  not
11    make   both   elections.    The   employer  shall  not  remit
12    contributions on behalf  of  a  newly  eligible  employee  to
13    either  the  optional  retirement  program  or  to  the State
14    Universities Retirement System until the  60-day  period  has
15    run unless an election by the employee has been made earlier.
16    Any  eligible  employee  person  interested  in  electing the
17    optional retirement program provided under this Section  must
18    be   given   a   consultation  with  the  State  Universities
19    Retirement System before making that an election.
20        Participation in the optional  retirement  program  shall
21    begin  on the first day of the first pay period following the
22    date of election, but no earlier than January 1, 1998 July 1,
23    1996.  The employee's person's  participation  in  any  other
24    retirement  program  administered  by  the  System under this
25    Article the System, if any, with respect  to  the  qualifying
26    employment  shall terminate on the date that participation in
27    the optional retirement  program  begins,  and  the  employee
28    person  shall  thereby be deemed to have elected to receive a
29    refund of contributions as provided in Section 15-154, except
30    that  such  deemed  refund  shall  include  interest  at  the
31    effective rate for the respective years, and except that  any
32    funds  which  would  have  been  received  shall  instead  be
33    transferred  directly to the optional retirement program as a
34    tax free transfer in accordance with Internal Revenue Service
                            -44-               LRB9001294EGfg
 1    guidelines.
 2        Notwithstanding any other  provision  of  this  Code,  an
 3    employee  a  person  may  not  purchase or receive service or
 4    service credit applicable to  any  other  retirement  program
 5    administered  by the System under this Article in this System
 6    for any period during which the employee  was  a  participant
 7    person was not a participant in the System due to an election
 8    to   participate   in  the  an  optional  retirement  program
 9    established under this Section.
10        An employee A person who has elected  to  participate  in
11    the  an  optional  retirement program under this Section must
12    continue  participation  while  employed   in   an   eligible
13    position,  and  may  not  participate in any other retirement
14    program administered by the System under this Article  return
15    to  participation  in  this  System  while  employed  by that
16    employer,  unless  the   optional   retirement   program   is
17    terminated in accordance with subsection (i) (g).
18        Participation  in  the  optional retirement program under
19    this  Section  shall  constitute  membership  in  the   State
20    Universities  Retirement System, although a participant under
21    this Section shall not be entitled to  receive  any  benefits
22    under  any  other  provisions of Article 15 or of Article 20.
23    An employee who receives a disability benefit or a retirement
24    benefit under this Section or an employee who receives a lump
25    sum distribution  from  a  mutual  fund  company  under  this
26    Section and uses the lump sum to purchase an annuity shall be
27    considered  an  employee or an annuitant under Article 15 for
28    purposes of the State Employees Group Insurance Act of  1971.
29    Participation  in  the optional retirement program under this
30    Section creates a contractual relationship  with  respect  to
31    the  investment of the employee's account balance between the
32    employee and the company providing the investment options for
33    the  employee's  account  balance.   Participation  does  not
34    create a contractual relationship between  the  employee  and
                            -45-               LRB9001294EGfg
 1    the System or between the employee and his or her employer.
 2        Participation   in   an   optional   retirement   program
 3    established under this Section does not constitute membership
 4    or  participation in the State Universities Retirement System
 5    or any other pension fund or retirement system of the  State.
 6    Participation  in  an optional retirement program established
 7    under this Section creates a  contractual  relationship  only
 8    between  the  person  and  the company providing the optional
 9    retirement program, and not between the person and the System
10    or the person's employer.
11        (h)  (f)  Contributions.   The  contribution   rate   for
12    employees persons participating in the an optional retirement
13    program  under  this  Section  shall be equal to the employee
14    contribution rate for other participants in the System.  This
15    required contribution may be made as  an  "employer  pick-up"
16    under  Section 414(h) of the Internal Revenue Code of 1986 or
17    any successor Section.  Any employee person participating  in
18    the  System  or  who  elects  to  participate in the optional
19    retirement  program  shall  continue  to  have  the  employer
20    "pick-up" the contribution.  However, amounts picked up after
21    the election of the  optional  retirement  program  shall  be
22    remitted  to the optional retirement plan.  In no event shall
23    an employee have an option  of  receiving  these  amounts  in
24    cash.   The  program shall provide for employer contributions
25    at  a  rate  of  no  more  than  7.6%  of  the  participating
26    employee's  person's  salary.   The  An  optional  retirement
27    program shall  be  funded  by  contributions  from  employees
28    persons   participating   in   the   program   and   employer
29    contributions  as  required  by  the plan.  The plan shall be
30    funded in a manner consistent with the  requirements  of  the
31    Internal   Revenue   Code   Section   412,   and  regulations
32    promulgated thereunder, and Proposed  Regulation  412(b)-1(a)
33    as  that  Section  applies  those  Sections  apply  to  money
34    purchase plans.
                            -46-               LRB9001294EGfg
 1        The   State  of  Illinois  shall  make  contributions  by
 2    appropriations to the System of  the  employer  contributions
 3    required  for  employees  who  participate  in  the  optional
 4    retirement  program  under this Section.  The amount required
 5    shall be certified by the Board of Trustees of the System and
 6    paid by the State in accordance  with  Section  15-165.   The
 7    System  shall not be obligated to remit the required employer
 8    contributions to any insurance and annuity  and  mutual  fund
 9    companies  participating  in  the optional retirement program
10    under subsection (d)  until  it  has  received  the  required
11    employer  contributions  from  the  State.  In the event of a
12    deficiency in the amount of State contributions,  the  System
13    shall  implement those procedures described in subsection (c)
14    of Section 15-165 to obtain the  required  funding  from  the
15    General Revenue Fund.
16        The  contributions and interest thereon, and any benefits
17    based upon them, shall be treated as provided in the  funding
18    vehicles  for  this  plan.   An  amount  of  up to 1% of each
19    participating employee's participant's salary  shall  may  be
20    taken   from   the  employer  contribution  to  the  optional
21    retirement program and  shall  may  be  contributed,  on  the
22    employee's  participant's  behalf, to a plan which the System
23    offers employer sets up to provide  for  life  or  disability
24    benefits.
25        (i)  (g)  Termination.   An  optional  retirement program
26    authorized established under this Section may  be  terminated
27    by  the  employer,  subject  to  the  terms  of  any relevant
28    contracts, and the  employer  shall  have  no  obligation  to
29    reestablish  an  optional  retirement  renew  any contract or
30    program established under this Section.   This  Section  does
31    not create a right to continued continue participation in any
32    optional retirement program set up by an employer established
33    under  this  Section.   If  an optional retirement program is
34    terminated,  the  participants  shall  have  the   right   to
                            -47-               LRB9001294EGfg
 1    participate  in  one of the other retirement programs offered
 2    by the System  and  receive  service  credit  in  such  other
 3    retirement  program for any years of employment following the
 4    termination.
 5        (j) (h)  Vesting.  Employer contributions shall be vested
 6    after five years of employment.  If an employee a participant
 7    terminates employment  prior  to  completing  five  years  of
 8    service,  the  employee  participant  shall  be entitled to a
 9    benefit in  accordance  with  the  terms  of  the  employer's
10    retirement  plan  which  is  based  on the accumulation value
11    attributable to the  employee's  participant's  contributions
12    and  any  investment return experience thereon.  Benefits for
13    employees participants who terminate with at least five years
14    of service shall be in  accordance  with  the  terms  of  the
15    optional   employer's   retirement  plan  and  based  on  the
16    accumulation value attributable to both the employer and  the
17    employee's  participant's  contributions  and  any investment
18    return experience thereon.  Any employer contributions  which
19    are  forfeited shall be held in escrow by the funding company
20    investing those contributions and shall be used to reduce the
21    next premium payment due from the employer.
22    (Source: P.A. 89-430, eff. 12-15-95.)
23        (40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
24        Sec. 15-165.  To certify amounts and submit vouchers.
25        (a)  The Board shall certify to the Governor on or before
26    November 15 of each  year  the  appropriation  required  from
27    State funds for the purposes of this System for the following
28    fiscal  year.   The certification shall include a copy of the
29    actuarial recommendations upon which it is based.
30        (b)  The Board shall certify to the State Comptroller  or
31    employer,  as  the  case  may  be,  from time to time, by its
32    president and secretary, with its seal attached, the  amounts
33    payable to the System from the various funds.
                            -48-               LRB9001294EGfg
 1        (c)  Beginning  in  State fiscal year 1996, on or as soon
 2    as possible after the 15th day of each month the Board  shall
 3    submit  vouchers  for  payment  of State contributions to the
 4    System, in a total  monthly  amount  of  one-twelfth  of  the
 5    required annual State contribution certified under subsection
 6    (a).   These  vouchers shall be paid by the State Comptroller
 7    and Treasurer by warrants drawn on the funds appropriated  to
 8    the System for that fiscal year.
 9        If  in any month the amount remaining unexpended from all
10    other appropriations to the System for the applicable  fiscal
11    year  (including  the  appropriations  to  the  System  under
12    Section  8.12  of  the State Finance Act and Section 1 of the
13    State Pension Funds Continuing  Appropriation  Act)  is  less
14    than  the  amount  lawfully vouchered under this Section, the
15    difference shall be paid from the General Revenue Fund  under
16    the  continuing  appropriation  authority provided in Section
17    1.1 of the State Pension Funds Continuing Appropriation Act.
18        (d)  So long as the payments received are the full amount
19    lawfully vouchered under this Section, payments  received  by
20    the  System  under this Section shall be applied first toward
21    the employer contribution to the optional retirement  program
22    established   under  Section  15-158.2.   Payments  shall  be
23    applied second toward the employer's portion  of  the  normal
24    costs  of the System, as defined in subsection (f) of Section
25    15-155.  The balance shall be  applied  toward  the  unfunded
26    actuarial liabilities of the System.
27        (e)  In  the event that the System does not receive, as a
28    result  of  legislative  enactment  or  otherwise,   payments
29    sufficient  to  fully  fund  the employer contribution to the
30    optional  retirement  program   established   under   Section
31    15-158.2  and  to  fully  fund that portion of the employer's
32    portion of the normal costs of the System, as  calculated  in
33    accordance   with  Section  15-155(a-1),  then  any  payments
34    received shall be applied  proportionately  to  the  optional
                            -49-               LRB9001294EGfg
 1    retirement  program established under Section 15-158.2 and to
 2    the employer's portion of the normal costs of the System,  as
 3    calculated in accordance with Section 15-155(a-1).
 4    (Source: P.A. 88-593, eff. 8-22-94.)
 5        Section   15.    The   State   Pension  Funds  Continuing
 6    Appropriation Act is  amended  by  changing  Section  1.1  as
 7    follows:
 8        (40 ILCS 15/1.1)
 9        Sec. 1.1. Appropriations to certain retirement systems.
10        (a)  There   is  hereby  appropriated  from  the  General
11    Revenue Fund to the General Assembly Retirement System, on  a
12    continuing  monthly  basis,  the amount, if any, by which the
13    total available amount of all other  appropriations  to  that
14    retirement  system  for the payment of State contributions is
15    less than the total amount of the vouchers for required State
16    contributions lawfully submitted by the retirement system for
17    that month under Section 2-134 of the Illinois Pension Code.
18        (b)  There  is  hereby  appropriated  from  the   General
19    Revenue  Fund to the State Universities Retirement System, on
20    a continuing monthly basis, the amount, if any, by which  the
21    total  available  amount  of all other appropriations to that
22    retirement system for the  payment  of  State  contributions,
23    including any deficiency in the required contributions of the
24    optional   retirement   program   established  under  Section
25    15-158.2 of the Illinois Pension Code, is less than the total
26    amount of  the  vouchers  for  required  State  contributions
27    lawfully  submitted  by  the retirement system for that month
28    under Section 15-165 of the Illinois Pension Code.
29        (c)  There is hereby appropriated from the Common  School
30    Fund  to  the  Teachers'  Retirement  System  of the State of
31    Illinois, on a continuing monthly basis, the amount, if  any,
32    by   which   the   total   available   amount  of  all  other
                            -50-               LRB9001294EGfg
 1    appropriations to that retirement system for the  payment  of
 2    State  contributions  is  less  than  the total amount of the
 3    vouchers for required State contributions lawfully  submitted
 4    by  the retirement system for that month under Section 16-158
 5    of the Illinois Pension Code.
 6        (d)  There  is  hereby  appropriated  from  the   General
 7    Revenue  Fund to the Judges Retirement System of Illinois, on
 8    a continuing monthly basis, the amount, if any, by which  the
 9    total  available  amount  of all other appropriations to that
10    retirement system for the payment of State  contributions  is
11    less than the total amount of the vouchers for required State
12    contributions lawfully submitted by the retirement system for
13    that month under Section 18-140 of the Illinois Pension Code.
14        (e)  The   continuing  appropriations  provided  by  this
15    Section shall first be available in State fiscal year 1996.
16    (Source: P.A. 88-593, eff. 8-22-94.)
17        Section 95.  No acceleration or delay.   Where  this  Act
18    makes changes in a statute that is represented in this Act by
19    text  that  is not yet or no longer in effect (for example, a
20    Section represented by multiple versions), the  use  of  that
21    text  does  not  accelerate or delay the taking effect of (i)
22    the changes made by this Act or (ii) provisions derived  from
23    any other Public Act.
24        Section  99.  Effective date.  This Act takes effect upon
25    becoming law.

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