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90_SB0312
5 ILCS 365/4 from Ch. 127, par. 354
5 ILCS 365/9 from Ch. 127, par. 359
40 ILCS 5/2-126.1 from Ch. 108 1/2, par. 2-126.1
40 ILCS 5/14-133.1 from Ch. 108 1/2, par. 14-133.1
40 ILCS 5/18-133.1 from Ch. 108 1/2, par. 18-133.1
Amends the State Salary and Annuity Withholding Act and
the Illinois Pension Code. Authorizes withholding for
payment of optional contributions to public employee
retirement systems. For participants in the General
Assembly, State Employee, and Judges Retirement Systems,
authorizes pickup of optional contributions by the employer
for federal tax purposes. Effective immediately.
LRB9001495EGfgA
LRB9001495EGfgA
1 AN ACT in relation to certain public employee pension
2 contributions, 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 Salary and Annuity Withholding Act
6 is amended by changing Sections 4 and 9 as follows:
7 (5 ILCS 365/4) (from Ch. 127, par. 354)
8 Sec. 4. An employee or annuitant may authorize the
9 withholding of a portion of his salary, wages, or annuity for
10 any one or more of the following purposes:
11 (1) for purchase of United States Savings Bonds;
12 (2) for payment of premiums on life or accident and
13 health insurance as defined in Section 4 of the "Illinois
14 Insurance Code", approved June 29, 1937, as amended, and for
15 payment of premiums on policies of automobile insurance as
16 defined in Section 143.13 of the "Illinois Insurance Code",
17 as amended, and the personal multiperil coverages commonly
18 known as homeowner's insurance. However, no portion of
19 salaries, wages or annuities may be withheld to pay premiums
20 on automobile, homeowner's, life or accident and health
21 insurance policies issued by any one insurance company or
22 insurance service company unless a minimum of 100 employees
23 or annuitants insured by that company authorize the
24 withholding by an Office within 6 months after such
25 withholding begins. If such minimum is not satisfied the
26 Office may discontinue withholding for such company. For any
27 insurance company or insurance service company which has not
28 previously had withholding, the Office may allow withholding
29 for premiums, where less than 100 policies have been written,
30 to cover a probationary period. An insurance company which
31 has discontinued withholding may reinstate it upon
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1 presentation of facts indicating new management or
2 re-organization satisfactory to the Office;
3 (3) for payment to any labor organization designated by
4 the employee;
5 (4) for payment of dues to any association the
6 membership of which consists of State employees and former
7 State employees;
8 (5) for deposit in any credit union, in which State
9 employees are within the field of membership as a result of
10 their employment;
11 (6) for payment to or for the benefit of an institution
12 of higher education by an employee of that institution;
13 (7) for payment of parking fees at the underground
14 facility located south of the William G. Stratton State
15 Office Building in Springfield, the parking ramp located at
16 401 South College Street, west of the William G. Stratton
17 State Office Building in Springfield, or at the parking
18 facilities located on the Urbana-Champaign campus of the
19 University of Illinois;.
20 (8) for voluntary payment to the State of Illinois of
21 amounts then due and payable to the State;.
22 (9) for investment purchases made as a participant in
23 College Savings Programs established pursuant to Section
24 30-15.8a of the School Code;
25 (10) for payment of optional contributions to a
26 retirement system subject to the provisions of the Illinois
27 Pension Code.
28 (Source: P.A. 88-161.)
29 (5 ILCS 365/9) (from Ch. 127, par. 359)
30 Sec. 9. Any authorization to withhold from the salary,
31 wages or annuity of an employee or annuitant shall terminate
32 and such withholding shall cease upon the happening of any of
33 the following events:
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1 (1) termination of employment or termination of payment
2 of an annuity, as the case may be;
3 (2) written notice by the employee or annuitant of
4 cancellation of such former authorization, except that an
5 authorization to withhold for the payment of optional
6 contributions to a retirement system through an employer
7 pickup is irrevocable;
8 (3) expiration of the time during which such withholding
9 was authorized;
10 (4) when the total amount authorized to be withheld has
11 been so withheld.
12 Upon termination of authorization to purchase United
13 States Savings Bonds, any amount withheld from the salary or
14 wages of an employee for such purpose and which has not been
15 so used shall be immediately remitted by each Office to the
16 person from whose salary or wages such amount was withheld.
17 (Source: Laws 1965, p. 1244.)
18 Section 10. The Illinois Pension Code is amended by
19 changing Sections 2-126.1, 14-133.1, and 18-133.1 as follows:
20 (40 ILCS 5/2-126.1) (from Ch. 108 1/2, par. 2-126.1)
21 Sec. 2-126.1. Pickup Pick up of contributions.
22 (a) The State shall pick up the participant
23 contributions required under Section 2-126 for all salary
24 earned after December 31, 1981. The contributions so picked
25 up shall be treated as employer contributions in determining
26 tax treatment under the United States Internal Revenue Code.
27 The State shall pay these participant contributions from the
28 same source of funds which is used in paying salary to the
29 participant. The State may pick up these contributions by a
30 reduction in the cash salary of the participant. If
31 participant contributions are picked up they shall be treated
32 for all purposes of this Article 2 in the same manner as
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1 participant contributions that were made prior to the date
2 that the pick up of contributions began.
3 (b) Subject to the requirements of federal law, a
4 participant may elect to have the employer pick up optional
5 contributions that the participant has elected to pay to the
6 System, and the contributions so picked up shall be treated
7 as employer contributions for the purposes of determining
8 federal tax treatment. The employer shall pick up the
9 contributions by a reduction in the cash salary of the
10 participant and shall pay the contributions from the same
11 fund that is used to pay earnings to the participant. The
12 election to have optional contributions picked up is
13 irrevocable and the optional contributions may not thereafter
14 be prepaid, by direct payment or otherwise.
15 (Source: P.A. 83-1440.)
16 (40 ILCS 5/14-133.1) (from Ch. 108 1/2, par. 14-133.1)
17 Sec. 14-133.1. Pickup of contributions.
18 (a) Each department shall pick up the employee
19 contributions required by Section 14-133 for all compensation
20 earned after December 31, 1981, and the contributions so
21 picked up shall be treated as employer contributions in
22 determining tax treatment under the United States Internal
23 Revenue Code; however, each department shall continue to
24 withhold federal and State income taxes based upon these
25 contributions until the Internal Revenue Service or the
26 federal courts rule that pursuant to Section 414(h) of the
27 United States Internal Revenue Code, these contributions
28 shall not be included as gross income of the employee until
29 such time as they are distributed or made available.
30 The department shall pay these employee contributions
31 from the same fund which is used in paying earnings to the
32 employee. The department may pick up these contributions by
33 a reduction in the cash salary of the employee or by an
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1 offset against a future salary increase or by a combination
2 of a reduction in salary and offset against a future salary
3 increase. If employee contributions are picked up they shall
4 be treated for all purposes of this Article 14 in the same
5 manner and to the same extent as employee contributions made
6 prior to the date picked up.
7 (b) Subject to the requirements of federal law, an
8 employee of a department may elect to have the department
9 pick up optional contributions that the employee has elected
10 to pay to the System, and the contributions so picked up
11 shall be treated as employer contributions for the purposes
12 of determining federal tax treatment. The department shall
13 pick up the contributions by a reduction in the cash salary
14 of the employee and shall pay the contributions from the same
15 fund that is used to pay earnings to the employee. The
16 election to have optional contributions picked up is
17 irrevocable and the optional contributions may not thereafter
18 be prepaid, by direct payment or otherwise.
19 (Source: P.A. 87-14.)
20 (40 ILCS 5/18-133.1) (from Ch. 108 1/2, par. 18-133.1)
21 Sec. 18-133.1. Pickup Pick up of contributions.
22 (a) Each employer may pick up the participant
23 contributions required under Section 18-133 for all salary
24 earned after December 31, 1981. If an employer decides not
25 to pick up the contributions, the employee contributions
26 shall continue to be deducted from salary. If contributions
27 are picked up they shall be treated as employer contributions
28 in determining tax treatment under the United States Internal
29 Revenue Code. However, the employer shall continue to
30 withhold Federal and State income taxes based upon these
31 contributions until the Internal Revenue Service or the
32 Federal courts rule that pursuant to Section 414(h) of the
33 United States Internal Revenue Code, these contributions
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1 shall not be included as gross income of the participant
2 until such time as they are distributed or made available.
3 The employer shall pay these participant contributions from
4 the same source of funds which is used in paying earnings to
5 the participant. The employer may pick up these
6 contributions by a reduction in the cash salary of the
7 participant or by an offset against a future salary increase
8 or by a combination of a reduction in salary and offset
9 against a future salary increase. If participant
10 contributions are picked up they shall be treated for all
11 purposes of this Article as participant contributions were
12 considered prior to the time they were picked up.
13 (b) Subject to the requirements of federal law, a
14 participant may elect to have the employer pick up optional
15 contributions that the participant has elected to pay to the
16 System, and the contributions so picked up shall be treated
17 as employer contributions for the purposes of determining
18 federal tax treatment. The employer shall pick up the
19 contributions by a reduction in the cash salary of the
20 participant and shall pay the contributions from the same
21 fund that is used to pay earnings to the participant. The
22 election to have optional contributions picked up is
23 irrevocable and the optional contributions may not thereafter
24 be prepaid, by direct payment or otherwise.
25 (Source: P.A. 83-1440.)
26 Section 99. Effective date. This Act takes effect upon
27 becoming law.