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90_SB0311
40 ILCS 5/15-157 from Ch. 108 1/2, par. 15-157
40 ILCS 5/15-157.1 from Ch. 108 1/2, par. 15-157.1
Amends the State Universities Article of the Pension
Code. Authorizes participating employees to make
contributions for the purchase of service credit. Authorizes
pickup of optional contributions by the employer for federal
tax purposes. Effective immediately.
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1 AN ACT to amend the Illinois Pension Code by changing
2 Sections 15-157 and 15-157.1.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Pension Code is amended by
6 changing Sections 15-157 and 15-157.1 as follows:
7 (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
8 Sec. 15-157. Employee Contributions.
9 (a) Each participating employee shall make contributions
10 towards the retirement annuity of each payment of earnings
11 applicable to employment under this system on and after the
12 date of becoming a participant as follows: Prior to
13 September 1, 1949, 3 1/2% of earnings; from September 1, 1949
14 to August 31, 1955, 5%; from September 1, 1955 to August 31,
15 1969, 6%; from September 1, 1969, 6 1/2%. These
16 contributions are to be considered as normal contributions
17 for purposes of this Article.
18 Each participant who is a police officer or firefighter
19 shall make normal contributions of 8% of each payment of
20 earnings applicable to employment as a police officer or
21 firefighter under this system on or after September 1, 1981,
22 unless he or she files with the board within 60 days after
23 the effective date of this amendatory Act of 1991 or 60 days
24 after the board receives notice that he or she is employed as
25 a police officer or firefighter, whichever is later, a
26 written notice waiving the retirement formula provided by
27 Rule 4 of Section 15-136. This waiver shall be irrevocable.
28 If a participant had met the conditions set forth in Section
29 15-132.1 prior to the effective date of this amendatory Act
30 of 1991 but failed to make the additional normal
31 contributions required by this paragraph, he or she may elect
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1 to pay the additional contributions plus compound interest at
2 the effective rate. If such payment is received by the
3 board, the service shall be considered as police officer
4 service in calculating the retirement annuity under Rule 4 of
5 Section 15-136.
6 (b) Starting September 1, 1969, each participating
7 employee shall make additional contributions of 1/2 of 1% of
8 earnings to finance a portion of the cost of the annual
9 increases in retirement annuity provided under Section
10 15-136.
11 (c) Each participating employee shall make survivors
12 insurance contributions of 1% of earnings applicable under
13 this system on and after August 1, 1959. Contributions in
14 excess of $80 during any fiscal year beginning August 31,
15 1969 and in excess of $120 during any fiscal year thereafter
16 until September 1, 1971 shall be considered as additional
17 contributions for purposes of this Article.
18 (d) If the board by board rule so permits and subject to
19 such conditions and limitations as may be specified in its
20 rules, a participant may make other additional contributions
21 of such percentage of earnings or amounts as the participant
22 shall elect in a written notice thereof received by the
23 board.
24 (e) That fraction of a participant's total accumulated
25 normal contributions, the numerator of which is equal to the
26 number of years of service in excess of that which is
27 required to qualify for the maximum retirement annuity, and
28 the denominator of which is equal to the total service of the
29 participant, shall be considered as accumulated additional
30 contributions. The determination of the applicable maximum
31 annuity and the adjustment in contributions required by this
32 provision shall be made as of the date of the participant's
33 retirement.
34 (f) Notwithstanding the foregoing, a participating
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1 employee shall not be required to make contributions under
2 this Section after the date upon which continuance of such
3 contributions would otherwise cause his or her retirement
4 annuity to exceed the maximum retirement annuity as specified
5 in clause (1) of subsection (c) of Section 15-136.
6 (g) A participating employee may make contributions for
7 the purchase of service credit under this Article.
8 (Source: P.A. 86-272; 86-1488.)
9 (40 ILCS 5/15-157.1) (from Ch. 108 1/2, par. 15-157.1)
10 Sec. 15-157.1. Pickup Pick up of employee contributions.
11 (a) Each employer shall pick up the employee
12 contributions required under subsections (a), (b), and (c) of
13 Section 15-157 for all earnings payments made on and after
14 January 1, 1981, and the contributions so picked up shall be
15 treated as employer contributions in determining tax
16 treatment under the United States Internal Revenue Code.
17 These contributions shall not be included as gross income of
18 the participant until such time as they are distributed or
19 made available. The employer shall pay these employee
20 contributions from the same source of funds which is used in
21 paying earnings to the employee. The employer may pick up
22 these contributions by a reduction in the cash salary of the
23 participants, or by an offset against a future salary
24 increase, or by a combination of a reduction in salary and
25 offset against a future salary increase.
26 (b) Subject to the requirements of federal law, a
27 participating employee may elect to have the employer pick up
28 optional contributions that the participant has elected to
29 pay to the System under Section 15-157(g), and the
30 contributions so picked up shall be treated as employer
31 contributions for the purposes of determining federal tax
32 treatment under the federal Internal Revenue Code of 1986.
33 These contributions shall not be included as gross income of
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1 the participant until such time as they are distributed or
2 made available. The employer shall pick up the contributions
3 by a reduction in the cash salary of the participant and
4 shall pay the contributions from the same source of funds
5 that is used to pay earnings to the participant. The
6 election to have optional contributions picked up is
7 irrevocable.
8 (Source: P.A. 83-1440.)
9 Section 99. Effective date. This Act takes effect upon
10 becoming law.