State of Illinois
90th General Assembly
Legislation

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90_SB1951

      40 ILCS 5/15-136.4
      40 ILCS 5/15-158.2
      40 ILCS 5/20-121          from Ch. 108 1/2, par. 20-121
      40 ILCS 5/20-123          from Ch. 108 1/2, par. 20-123
      40 ILCS 5/20-124          from Ch. 108 1/2, par. 20-124
      40 ILCS 5/20-125          from Ch. 108 1/2, par. 20-125
      40 ILCS 5/20-131          from Ch. 108 1/2, par. 20-131
          Amends the Illinois  Pension  Code  in  relation  to  the
      optional  retirement  plans offered by the State Universities
      Retirement System.  Changes the way in which  the  Retirement
      Systems   Reciprocal  Act  applies  to  participants  in  the
      self-managed plan and the portable  benefit  package.   Makes
      other changes.  Effective immediately.
                                                     LRB9012398EGfg
                                               LRB9012398EGfg
 1        AN ACT to amend the Illinois Pension Code.
 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:
 4        Section 5.  The  Illinois  Pension  Code  is  amended  by
 5    changing Sections 15-136.4, 15-158.2, 20-121, 20-123, 20-124,
 6    20-125, and 20-131 as follows:
 7        (40 ILCS 5/15-136.4)
 8        Sec.  15-136.4.  Retirement  and  Survivor Benefits Under
 9    Portable Benefit Package.
10        (a)  This Section 15-136.4 describes the form of  annuity
11    and  survivor  benefits  available  to  a participant who has
12    elected the portable benefit package and  has  completed  the
13    one-year  waiting  period  required  under  subsection (e) of
14    Section 15-134.5.  For purposes of  this  Section,  the  term
15    "eligible  spouse" means the husband or wife of a participant
16    to  whom  the  participant  is  married  on  the   date   the
17    participant's  retirement  annuity  begins, provided however,
18    that if the participant should die prior to the  commencement
19    of  retirement annuity benefits, then "eligible spouse" means
20    the husband or wife, if any,  to  whom  the  participant  was
21    married  throughout the one-year period preceding the date of
22    his or her death.
23        (b)  This subsection (b) describes  the  normal  form  of
24    annuity  payable  to  a  participant  subject to this Section
25    15-136.4.  If the participant is unmarried on the date his or
26    her annuity payments  commence,  then  the  annuity  payments
27    shall  be  made  in  the  form  of  a  single-life annuity as
28    described in Section 15-118.  If the participant  is  married
29    on  the  date  his or her annuity payments commence, then the
30    annuity payments shall be paid in the  form  of  a  qualified
31    joint  and  survivor annuity that is the actuarial equivalent
                            -2-                LRB9012398EGfg
 1    of the single-life annuity.  Under the "qualified  joint  and
 2    survivor  annuity",  a  reduced  amount  shall be paid to the
 3    participant for his or her lifetime and his or  her  eligible
 4    spouse,  if  surviving  at  the participant's death, shall be
 5    entitled  to  receive  thereafter  a  lifetime   survivorship
 6    annuity  in  a  monthly  amount  equal  to 50% of the reduced
 7    monthly amount that was payable to the participant.  The last
 8    payment of a qualified joint and survivor  annuity  shall  be
 9    made  as  of the first day of the month in which the death of
10    the survivor occurs.
11        (c)  Instead of the normal form of annuity that would  be
12    paid under subsection (b), a participant may elect in writing
13    within the 90-day period prior to the date his or her annuity
14    payments commence to waive the normal form of annuity payment
15    and  receive  an  optional  form  of  annuity as described in
16    subsection (h).  If the participant is married and elects  an
17    optional  form  of  annuity under subsection (h) other than a
18    joint  and  survivor  annuity  with   the   eligible   spouse
19    designated  as  the  contingent annuitant, then such election
20    shall require the consent of his or her  eligible  spouse  in
21    the  manner  described in subsection (d).  At any time during
22    the  90-day  period  preceding  the  date  the  participant's
23    annuity commences, the participant may  revoke  the  optional
24    form elected under this subsection (c) and reinstate coverage
25    under  the  qualified  joint and survivor annuity without the
26    spouse's consent, but an election to revoke the optional form
27    elected  and  elect  a  new  optional  form  or  designate  a
28    different contingent annuitant shall not be effective without
29    the eligible spouse's consent.
30        (d)   The eligible spouse's consent to any election  made
31    pursuant  to this Section that requires the eligible spouse's
32    consent shall be in writing and shall acknowledge the  effect
33    of the consent.  In addition, the eligible spouse's signature
34    on  the written consent must be witnessed by a notary public.
                            -3-                LRB9012398EGfg
 1    The eligible spouse's consent need not  be  obtained  if  the
 2    system  is  satisfied  that there is no eligible spouse, that
 3    the eligible spouse cannot be  located,  or  because  of  any
 4    other  relevant  circumstances.  An eligible spouse's consent
 5    under  this  Section  is  valid  only  with  respect  to  the
 6    specified  optional  form  of  payment  and,  if  applicable,
 7    contingent annuitant designated by the participant.   If  the
 8    optional  form  of  payment  or  the  contingent annuitant is
 9    subsequently changed (other  than  by  a  revocation  of  the
10    optional  form  and  reinstatement of the qualified joint and
11    survivor annuity), a new consent by the  eligible  spouse  is
12    required.   The eligible spouse's consent to an election made
13    by a participant pursuant to this Section, once made, may not
14    be revoked by the eligible spouse.
15        (e)   Within a reasonable period of  time  preceding  the
16    date  a  participant's annuity commences, a participant shall
17    be supplied with a written explanation of (1) the  terms  and
18    conditions   of  the  normal  form  single-life  annuity  and
19    qualified joint and survivor annuity, (2)  the  participant's
20    right  to  elect a single-life annuity or an optional form of
21    payment under subsection (h) subject to his or  her  eligible
22    spouse's  consent,  if  applicable, and (3) the participant's
23    right to reinstate coverage under  the  qualified  joint  and
24    survivor  annuity  prior  to  his or her annuity commencement
25    date by revoking an election of an optional form  of  benefit
26    under subsection (h).
27        (f)  If  a  married  participant with at least 5 years of
28    service dies prior to commencing retirement annuity  payments
29    and prior to taking a refund under Section 15-154, his or her
30    eligible  spouse  is  entitled  to  receive  a pre-retirement
31    survivor annuity, if there is not then in effect a waiver  of
32    the  pre-retirement  survivor  annuity.   The  pre-retirement
33    survivor  annuity  payable  under  this subsection shall be a
34    monthly annuity  payable  for  the  eligible  spouse's  life,
                            -4-                LRB9012398EGfg
 1    commencing  as  of  the beginning of the month next following
 2    the later of the date of the participant's death or the  date
 3    the   participant   would  have  first  met  the  eligibility
 4    requirements  for  retirement,  and  continuing  through  the
 5    beginning of the month in which the  death  of  the  eligible
 6    spouse  occurs.   The  monthly  amount  payable to the spouse
 7    under the pre-retirement survivor annuity shall be  equal  to
 8    the  monthly  amount  that  would  be  payable  as a survivor
 9    annuity  under  the  qualified  joint  and  survivor  annuity
10    described in  subsection  (b)  if:  (1)  in  the  case  of  a
11    participant  who  dies  on  or  after  the  date on which the
12    participant  has  met  the   eligibility   requirements   for
13    retirement,  the  participant  had  retired with an immediate
14    qualified joint and survivor annuity on the  day  before  the
15    participant's  date   of  death;  or  (2)  in  the  case of a
16    participant who dies before the earliest date  on  which  the
17    participant  would  have met the eligibility requirements for
18    retirement age, the participant had separated from service on
19    the date of death, survived to the  earliest  retirement  age
20    based  on  service prior to his or her death, retired with an
21    immediate  qualified  joint  and  survivor  annuity  at   the
22    earliest retirement age, and died on the day after the day on
23    which  the  participant  would  have  attained  the  earliest
24    retirement age.
25        (g)  A  married participant who has not retired may elect
26    at any time to  waive  the  pre-retirement  survivor  annuity
27    described in subsection (f).  Any such election shall require
28    the  consent  of  the  participant's  eligible  spouse in the
29    manner  described  in  subsection  (e).   A  waiver  of   the
30    pre-retirement  survivor  annuity shall increase the lump sum
31    death benefit payable under subsection (b) of Section 15-141.
32    Prior to electing any waiver of the  pre-retirement  survivor
33    annuity,  the  participant  shall  be provided with a written
34    explanation  of  (1)  the  terms  and   conditions   of   the
                            -5-                LRB9012398EGfg
 1    pre-retirement   survivor  annuity  and  the  death  benefits
 2    payable  from  the  system  both   with   and   without   the
 3    pre-retirement  survivor annuity, (2) the participant's right
 4    to elect a waiver  of  the  pre-retirement  survivor  annuity
 5    coverage  subject to his or her spouse's consent, and (3) the
 6    participant's  right  to  reinstate  pre-retirement  survivor
 7    annuity coverage at any time by revoking a  prior  waiver  of
 8    such coverage.
 9        (h)  By  filing  a  timely  election  with  the system, a
10    participant who will be  eligible  to  receive  a  retirement
11    annuity  under  this  Section  may  waive  the normal form of
12    annuity payment  described  in  subsection  (b),  subject  to
13    obtaining  the  consent  of  his  or  her eligible spouse, if
14    applicable, and elect to receive any  one  of  the  following
15    optional annuity forms:
16             (1)   Joint   and  Survivor  Annuity  Options:   The
17        participant  may  elect  to  receive  a  reduced  annuity
18        payable for his or  her  life  and  to  have  a  lifetime
19        survivorship  annuity  in  a monthly amount equal to 50%,
20        75%, or 100% (as elected  by  the  participant)  of  that
21        reduced   monthly   amount,   to   be   paid   after  the
22        participant's death to his or her  contingent  annuitant,
23        if  the  contingent annuitant is alive at the time of the
24        participant's death.
25             (2)  Single-Life  Annuity   Option   (optional   for
26        married  participants).   The  participant  may  elect to
27        receive a single-life annuity payable for his or her life
28        only.
29    All optional  forms  shall  be  in  an  amount  that  is  the
30    actuarial equivalent of the single-life annuity.
31        For  the  purposes  of this Section, the term "contingent
32    annuitant" means the  beneficiary  who  is  designated  by  a
33    participant  at  the  time the participant elects a joint and
34    survivor annuity to receive the lifetime survivorship annuity
                            -6-                LRB9012398EGfg
 1    in the event the beneficiary survives the participant at  the
 2    participant's death.
 3        (i)  Under  no  circumstances  may  an option be elected,
 4    changed,  or  revoked  after  the  date   the   participant's
 5    retirement annuity commences.
 6        (j)  An  election  made  pursuant to subsection (h) shall
 7    become inoperative  if  the  participant  or  the  contingent
 8    annuitant  dies  before  the  date  the participant's annuity
 9    payments commence, or if the  eligible  spouse's  consent  is
10    required and not given.
11        (k)  For  purposes  of applying the provisions of Section
12    20-123 of this Code, the portable benefit  package  shall  be
13    treated as if it were provided by a participating system that
14    has no survivor's annuity benefit.
15    (Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)
16        (40 ILCS 5/15-158.2)
17        Sec. 15-158.2. Self-managed plan.
18        (a)  Purpose.   The  General  Assembly  finds  that it is
19    important for colleges and universities to be able to attract
20    and retain the most qualified employees and that in order  to
21    attract and retain these employees, colleges and universities
22    should have the flexibility to provide a defined contribution
23    plan  as  an alternative for eligible employees who elect not
24    to  participate  in  a  defined  benefit  retirement  program
25    provided  under  this   Article.   Accordingly,   the   State
26    Universities   Retirement  System  is  hereby  authorized  to
27    establish and administer a  self-managed  plan,  which  shall
28    offer  participating  employees the opportunity to accumulate
29    assets for retirement through a combination of  employee  and
30    employer  contributions that may be invested in mutual funds,
31    collective investment funds, or other investment products and
32    used to purchase annuity contracts, either fixed or  variable
33    or  a  combination thereof.  The plan must be qualified under
                            -7-                LRB9012398EGfg
 1    the Internal Revenue Code of 1986.
 2        (b)  Adoption by employers.   Each  employer  subject  to
 3    this  Article  may  elect  to  adopt  the  self-managed  plan
 4    established under this Section; this election is irrevocable.
 5    An  employer's  election to adopt the self-managed plan makes
 6    available to the eligible  employees  of  that  employer  the
 7    elections described in Section 15-134.5.
 8        The  State  Universities  Retirement  System shall be the
 9    plan sponsor for the self-managed plan and  shall  prepare  a
10    plan  document and prescribe such rules and procedures as are
11    considered necessary or desirable for the  administration  of
12    the self-managed plan.  Consistent with its fiduciary duty to
13    the  participants and beneficiaries of the self-managed plan,
14    the Board of Trustees of the System may delegate  aspects  of
15    plan administration as it sees fit to companies authorized to
16    do  business  in  this  State,  to  the  employers,  or  to a
17    combination of both.
18        (c)  Selection of service providers and funding vehicles.
19    The System, in consultation with the employers, shall solicit
20    proposals to  provide  administrative  services  and  funding
21    vehicles for the self-managed plan from insurance and annuity
22    companies  and mutual fund companies, banks, trust companies,
23    or other financial institutions authorized to do business  in
24    this   State.    In  reviewing  the  proposals  received  and
25    approving and contracting with no fewer than 2  and  no  more
26    than  7  companies, at least 2 of which must be insurance and
27    annuity companies, the Board of Trustees of the System  shall
28    consider, among other things, the following criteria:
29             (1)  the  nature  and  extent  of  the benefits that
30        would be provided to the participants;
31             (2)  the reasonableness of the benefits in  relation
32        to the premium charged;
33             (3)  the  suitability  of  the benefits to the needs
34        and interests of  the  participating  employees  and  the
                            -8-                LRB9012398EGfg
 1        employer;
 2             (4)  the  ability of the company to provide benefits
 3        under the contract and the  financial  stability  of  the
 4        company; and
 5             (5)  the efficacy of the contract in the recruitment
 6        and retention of employees.
 7        The  System,  in  consultation  with the employers, shall
 8    periodically review each approved  company.   A  company  may
 9    continue  to  provide  administrative  services  and  funding
10    vehicles  for  the  self-managed  plan  only  so  long  as it
11    continues to be an approved company under contract  with  the
12    Board.
13        (d)  Employee Direction.  Employees who are participating
14    in  the  program  must  be  allowed to direct the transfer of
15    their account balances among the various  investment  options
16    offered,  subject  to applicable contractual provisions.  The
17    participant shall not be deemed  a  fiduciary  by  reason  of
18    providing  such  investment  direction.   A  person  who is a
19    fiduciary shall not be liable for  any  loss  resulting  from
20    such  investment  direction  and  shall not be deemed to have
21    breached any fiduciary duty by acting in accordance with that
22    direction.  Neither the System nor  the  employer  guarantees
23    any of the investments in the employee's account balances.
24        (e)  Participation.   An employee eligible to participate
25    in the self-managed plan must  make  a  written  election  in
26    accordance  with  the  provisions of Section 15-134.5 and the
27    procedures established by the System.  Participation  in  the
28    self-managed  plan by an electing employee shall begin on the
29    first day of the first pay period following the later of  the
30    date  the employee's election is filed with the System or the
31    effective date as of which the employee's employer begins  to
32    offer  participation in the self-managed plan.  Employers may
33    not make the self-managed plan available earlier than January
34    1, 1998.  An employee's participation in any other retirement
                            -9-                LRB9012398EGfg
 1    program administered by the System under this  Article  shall
 2    terminate  on the date that participation in the self-managed
 3    plan begins.
 4        An  employee  who  has  elected  to  participate  in  the
 5    self-managed  plan   under   this   Section   must   continue
 6    participation while employed in an eligible position, and may
 7    not  participate in any other retirement program administered
 8    by the System under  this  Article  while  employed  by  that
 9    employer   or   any  other  employer  that  has  adopted  the
10    self-managed plan, unless the self-managed plan is terminated
11    in accordance with subsection (i).
12        Participation in the self-managed plan under this Section
13    shall  constitute  membership  in  the   State   Universities
14    Retirement System.
15        A participant under this Section shall be entitled to the
16    benefits  of Article 20 of this Code. modified to reflect the
17    following principles:
18             (1)  The amount of any retirement annuities  payable
19        under  this  Section  depend  solely  on the value of the
20        participant's vested account balances and are not subject
21        to a maximum annuity benefit limitation or any adjustment
22        pursuant   to   the   proportional   retirement   annuity
23        provisions of  Article  20.   If  a  participant  in  the
24        self-managed  plan under this Section elects to apply the
25        provisions of  Article  20,  the  dollar  amount  of  the
26        proportional  retirement  annuity payable from the System
27        shall be deemed to be zero  and  the  provisions  of  the
28        second  paragraph  of Section 20-131 shall not apply with
29        respect to the retirement annuity benefits payable to the
30        participant under this Section.
31             (2)  For purposes of Section 20-123  of  this  Code,
32        the  self-managed  plan  shall  be  treated as if it were
33        provided by a participating system that has no survivor's
34        annuity benefit.
                            -10-               LRB9012398EGfg
 1             (3)  Notwithstanding Section 20-125  of  this  Code,
 2        upon  reemployment by a participating system of a retired
 3        participant in  the  self-managed  plan,  the  retirement
 4        annuity payment made to such participant from any annuity
 5        contracts  acquired  from  the participant's self-managed
 6        plan account balances shall not be suspended.
 7        (f)  Establishment of Initial Account Balance.  If at the
 8    time an employee elects to participate  in  the  self-managed
 9    plan  he  or  she has rights and credits in the System due to
10    previous participation in the  traditional  benefit  package,
11    the  System  shall  establish  for  the  employee  an opening
12    account balance in the self-managed plan, equal to the amount
13    of contribution refund that the employee would be eligible to
14    receive under  Section  15-154  if  the  employee  terminated
15    employment   on   that   date   and   elected   a  refund  of
16    contributions, except that  this  hypothetical  refund  shall
17    include  interest  at  the  effective rate for the respective
18    years.  The System shall transfer  assets  from  the  defined
19    benefit retirement program to the self-managed plan, as a tax
20    free  transfer  in  accordance  with Internal Revenue Service
21    guidelines, for purposes of funding  the  employee's  opening
22    account balance.
23        (g)  No  Duplication  of Service Credit.  Notwithstanding
24    any other provision of this  Article,  an  employee  may  not
25    purchase  or  receive service or service credit applicable to
26    any other retirement program administered by the System under
27    this Article for any period during which the employee  was  a
28    participant  in  the self-managed plan established under this
29    Section.
30        (h)  Contributions.   The  self-managed  plan  shall   be
31    funded  by  contributions from employees participating in the
32    self-managed plan and employer contributions as  provided  in
33    this Section.
34        The  contribution rate for employees participating in the
                            -11-               LRB9012398EGfg
 1    self-managed plan under this Section shall be  equal  to  the
 2    employee  contribution  rate  for  other  participants in the
 3    System,  as  provided  in  Section  15-157.   This   required
 4    contribution  shall  be  made  as an "employer pick-up" under
 5    Section 414(h) of the Internal Revenue Code of  1986  or  any
 6    successor Section thereof.  Any employee participating in the
 7    System's  traditional  benefit  package  prior  to his or her
 8    election  to  participate  in  the  self-managed  plan  shall
 9    continue to have  the  employer  pick  up  the  contributions
10    required  under  Section 15-157.  However, the amounts picked
11    up after the election  of  the  self-managed  plan  shall  be
12    remitted  to  and treated as assets of the self-managed plan.
13    In no event shall an employee have  an  option  of  receiving
14    these   amounts  in  cash.   Employees  may  make  additional
15    contributions to the self-managed  plan  in  accordance  with
16    procedures  prescribed by the System, to the extent permitted
17    under rules prescribed by the System.
18        The program shall provide for employer  contributions  to
19    be  credited  to each self-managed plan participant at a rate
20    of 7.6% of the  participating  employee's  salary,  less  the
21    amount  used by the System to provide disability benefits for
22    the employee.  The amounts so credited shall be paid into the
23    participant's self-managed plan accounts in a  manner  to  be
24    prescribed by the System.
25        An  amount  of employer contribution, not exceeding 1% of
26    the participating employee's salary, shall be  used  for  the
27    purpose of providing the disability benefits of the System to
28    the employee.  Prior to the beginning of each plan year under
29    the self-managed plan, the Board of Trustees shall determine,
30    as   a   percentage   of   salary,  the  amount  of  employer
31    contributions to be  allocated  during  that  plan  year  for
32    providing   disability   benefits   for   employees   in  the
33    self-managed plan.
34        The  State  of  Illinois  shall  make  contributions   by
                            -12-               LRB9012398EGfg
 1    appropriations  to  the  System of the employer contributions
 2    required for employees who participate  in  the  self-managed
 3    plan  under  this  Section.    The  amount  required shall be
 4    certified by the Board of Trustees of the System and paid  by
 5    the  State  in  accordance  with  Section 15-165.  The System
 6    shall  not  be  obligated  to  remit  the  required  employer
 7    contributions to any of the insurance and annuity  companies,
 8    mutual  fund  companies,  banks,  trust  companies, financial
 9    institutions,  or  other  sponsors  of  any  of  the  funding
10    vehicles offered under the self-managed  plan  until  it  has
11    received  the required employer contributions from the State.
12    In  the  event  of  a  deficiency  in  the  amount  of  State
13    contributions, the System shall  implement  those  procedures
14    described  in  subsection (c) of Section 15-165 to obtain the
15    required funding from the General Revenue Fund.
16        (i)  Termination.  The self-managed plan authorized under
17    this Section may be terminated by the System, subject to  the
18    terms of any relevant contracts, and the System shall have no
19    obligation  to  reestablish  the self-managed plan under this
20    Section.  This Section does not create a right  to  continued
21    participation  in  any self-managed plan set up by the System
22    under this Section.  If the self-managed plan is  terminated,
23    the  participants  shall have the right to participate in one
24    of the other retirement programs offered by  the  System  and
25    receive  service  credit in such other retirement program for
26    any years of employment following the termination.
27        (j)  Vesting;   Withdrawal;   Return   to   Service.    A
28    participant in the self-managed plan becomes  vested  in  the
29    employer contributions credited to his or her accounts in the
30    self-managed  plan on the earliest to occur of the following:
31    (1) completion  of  5  years  of  service  with  an  employer
32    described   in   Section   15-106;   (2)  the  death  of  the
33    participating  employee  while  employed   by   an   employer
34    described in Section 15-106, if the participant has completed
                            -13-               LRB9012398EGfg
 1    at  least  1 1/2  years  of service; or (3) the participant's
 2    election to retire and apply  the  reciprocal  provisions  of
 3    Article 20 of this Code.
 4        A  participant  in  the  self-managed plan who receives a
 5    distribution  of  his  or  her  vested   amounts   from   the
 6    self-managed plan while not yet eligible for retirement under
 7    this  Article  (and  Article 20, if applicable) upon or after
 8    termination of employment shall forfeit  all  service  credit
 9    and   accrued   rights   in   the   System;  if  subsequently
10    re-employed,  the  participant  shall  be  considered  a  new
11    employee.   If  a  former   participant   again   becomes   a
12    participating    employee   (or   becomes   employed   by   a
13    participating system under  Article  20  of  this  Code)  and
14    continues  as  such  for  at  least 2 years, all such rights,
15    service credits, and previous status as a  participant  shall
16    be restored upon repayment of the amount of the distribution,
17    without interest.
18        (k)  Benefit  amounts.   If  an employee who is vested in
19    employer contributions terminates  employment,  the  employee
20    shall  be entitled to a benefit which is based on the account
21    values   attributable   to   both   employer   and   employee
22    contributions and any investment return thereon.
23        If  an  employee  who   is   not   vested   in   employer
24    contributions  terminates  employment,  the employee shall be
25    entitled to a benefit based  solely  on  the  account  values
26    attributable   to   the   employee's  contributions  and  any
27    investment return thereon, and the employer contributions and
28    any  investment  return  thereon  shall  be  forfeited.   Any
29    employer contributions which are forfeited shall be  held  in
30    escrow by the company investing those contributions and shall
31    be  used  as directed by the System for future allocations of
32    employer contributions or  for  the  restoration  of  amounts
33    previously  forfeited by former participants who again become
34    participating employees.
                            -14-               LRB9012398EGfg
 1    (Source: P.A. 89-430, eff. 12-15-95;  90-448,  eff.  8-16-97;
 2    90-576, eff. 3-31-98; 90-766, eff. 8-14-98.)
 3        (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
 4        Sec.   20-121.  Calculation  of  proportional  retirement
 5    annuities.  Upon retirement of the employee,  a  proportional
 6    retirement  annuity  shall  be computed by each participating
 7    system in which pension credit has been  established  on  the
 8    basis  of pension credits under each system.  The computation
 9    shall be in accordance with the formula or method  prescribed
10    by  each  participating system which is in effect at the date
11    of the employee's latest withdrawal from service  covered  by
12    any  of  the systems in which he has pension credits which he
13    elects to have considered under this Article.   However,  the
14    amount   of   any   retirement   annuity  payable  under  the
15    self-managed plan established under Section 15-158.2 of  this
16    Code  depends solely on the value of the participant's vested
17    account balances and  is  not  subject  to  any  proportional
18    adjustment under this Section.
19        Combined  pension  credit  under  all  retirement systems
20    subject to this Article shall be  considered  in  determining
21    whether  the  minimum  qualification  has  been  met  and the
22    formula or method of computation which shall be applied.   If
23    a  system  has  a  step-rate  formula  for calculation of the
24    retirement annuity, pension credits covering previous service
25    which have been established under  another  system  shall  be
26    considered  in  determining  which  range  or  ranges  of the
27    step-rate formula are to be applicable to the employee.
28        Interest on pension credit shall continue  to  accumulate
29    in  accordance  with  the provisions of the law governing the
30    retirement system in which  the  same  has  been  established
31    during  the  time  an  employee  is in the service of another
32    employer, on  the  assumption  such  employee,  for  interest
33    purposes  for  pension  credit,  is continuing in the service
                            -15-               LRB9012398EGfg
 1    covered by such retirement system.
 2    (Source: P.A. 79-782.)
 3        (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
 4        Sec.  20-123.   Survivor's   annuity.    The   provisions
 5    governing  a  retirement  annuity  shall  be  applicable to a
 6    survivor's annuity.  Appropriate credits shall be established
 7    for  survivor's  annuity  purposes  in  those   participating
 8    systems  which provide survivor's annuities, according to the
 9    same conditions and  subject  to  the  same  limitations  and
10    restrictions  herein prescribed for a retirement annuity.  If
11    a participating system has no survivor's annuity benefit,  or
12    if  the  survivor's  annuity  benefit  under  that  system is
13    waived, pension credit established in that this system  shall
14    not  be  considered  in  determining  eligibility  for or the
15    amount of the survivor's annuity which may be payable by  any
16    other participating system.
17        For  persons  who  participate  in  the self-managed plan
18    established under Section 15-158.2 or  the  portable  benefit
19    package  established  under  Section 15-136.4, pension credit
20    established under Article 15 may be considered in determining
21    eligibility for or the amount of the survivor's annuity  that
22    is  payable  by  any  other participating system, but pension
23    credit established in any other system shall  not  result  in
24    any  right  to  a  survivor's  annuity  under  the Article 15
25    system.
26    (Source: P.A. 79-782.)
27        (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
28        Sec. 20-124.  Maximum benefits.  In no  event  shall  the
29    combined retirement or survivors annuities exceed the highest
30    annuity  which  would  have been payable by any participating
31    system in which the employee has pension credits, if  all  of
32    his pension credits had been validated in that system.
                            -16-               LRB9012398EGfg
 1        If  the  combined  annuities  should  exceed  the highest
 2    maximum as determined in accordance with  this  Section,  the
 3    respective   annuities   shall   be  reduced  proportionately
 4    according to the ratio which the amount of each  proportional
 5    annuity bears to the aggregate of all such annuities.
 6        In  the  case  of  a participant in the self-managed plan
 7    established under Section 15-158.2 of this Code to  whom  the
 8    provisions of this Article apply:
 9             (i)  For   purposes   of  calculating  the  combined
10        retirement annuity and the  proportionate  reduction,  if
11        any, in a retirement annuity other than one payable under
12        the  self-managed  plan,  the  amount  of  the Article 15
13        retirement annuity shall be  deemed  to  be  the  highest
14        annuity  to  which the annuitant would have been entitled
15        if he or she had participated in the traditional  benefit
16        package  as  defined  in Section 15-103.1 rather than the
17        self-managed plan.
18             (ii)  For  purposes  of  calculating  the   combined
19        survivor's  annuity  and  the proportionate reduction, if
20        any, in a survivor's annuity other than one payable under
21        the self-managed plan,  the  amount  of  the  Article  15
22        survivor's  annuity  shall  be  deemed  to be the highest
23        survivor's annuity to which the survivor would have  been
24        entitled if the deceased employee had participated in the
25        traditional   benefit   package  as  defined  in  Section
26        15-103.1 rather than the self-managed plan.
27             (iii)  Benefits payable under the self-managed  plan
28        are  not  subject  to  proportionate reduction under this
29        Section.
30    (Source: P.A. 79-782.)
31        (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
32        Sec.  20-125.   Return  to  employment  -  suspension  of
33    benefits.  If a retired employee returns to employment  which
                            -17-               LRB9012398EGfg
 1    is  covered  by  a  system  from  which  he  is  receiving  a
 2    proportional  annuity  under  this  Article, his proportional
 3    annuity from all participating  systems  shall  be  suspended
 4    during   the   period  of  re-employment,  except  that  this
 5    suspension does not apply to any distributions payable  under
 6    the  self-managed  plan established under Section 15-158.2 of
 7    this Code.
 8        The provisions of the Article under which such employment
 9    would be covered shall govern the  determination  of  whether
10    the  employee  has  returned to employment, and if applicable
11    the exemption  of  temporary  employment  or  employment  not
12    exceeding   a   specified  duration  or  frequency,  for  all
13    participating systems from  which  the  retired  employee  is
14    receiving   a   proportional   annuity  under  this  Article,
15    notwithstanding any contrary provisions in the other Articles
16    governing such systems.
17    (Source: P.A. 85-1008.)
18        (40 ILCS 5/20-131) (from Ch. 108 1/2, par. 20-131)
19        Sec.  20-131.    Retirement   Annuities   and   Survivors
20    Annuities - Guarantees.
21        (a)  This  amendatory Act of 1975 (P.A. 79-782) shall not
22    be  applied  to  deprive  any  person  or  his  survivor   of
23    eligibility  for  an  annuity  or to reduce the annuity or to
24    deprive such person of rights to which  he  or  his  survivor
25    would  have  been entitled under the provisions of Article 20
26    which were in effect immediately prior to September 5,  1975,
27    if he was an employee immediately prior to that date.
28        (b)  If the combined retirement annuity benefits provided
29    under Public Act 79-782 are less than the combined retirement
30    annuity  benefits  that  would  have  been  payable under the
31    alternative formula of Section 20-122, the system under which
32    retirement  would  have  occurred,  as  provided  by  Section
33    20-122, shall increase the proportional retirement annuity by
                            -18-               LRB9012398EGfg
 1    an amount equal to the difference.
 2        (c)  Subsection (b) of this Section does not apply to the
 3    retirement annuity benefits payable  under  the  self-managed
 4    plan established under Section 15-158.2 of this Code.
 5    (Source: P.A. 86-820.)
 6        Section  99.  Effective date.  This Act takes effect upon
 7    becoming law.

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