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91_HB1114
LRB9103320EGfg
1 AN ACT to amend the Illinois Pension Code by changing
2 Sections 16-129.1, 16-133, 16-133.2, 17-116.1, and 17-119.1
3 and to amend the State Mandates Act.
4 Be it enacted by the People of the State of Illinois,
5 represented in the General Assembly:
6 Section 5. The Illinois Pension Code is amended by
7 changing Sections 16-129.1, 16-133, 16-133.2, 17-116.1, and
8 17-119.1 as follows:
9 (40 ILCS 5/16-129.1)
10 Sec. 16-129.1. Optional increase in retirement annuity.
11 (a) A member of the System may qualify for the augmented
12 rate under subdivision (a)(B)(1) of Section 16-133 for all
13 years of creditable service earned before July 1, 1998 by
14 making the optional contribution specified in subsection (b).
15 A member may not elect to qualify for the augmented rate for
16 only a portion of his or her creditable service earned before
17 July 1, 1998.
18 (b) The contribution shall be an amount equal to 1.0% of
19 the member's highest salary rate in the 4 consecutive school
20 years immediately prior to but not including the school year
21 in which the application occurs, multiplied by the number of
22 years of creditable service earned by the member before July
23 1, 1998 or 20, whichever is less. This contribution shall be
24 reduced by 1.0% of that salary rate for every 3 full years of
25 creditable service earned by the member after June 30, 1998.
26 The contribution shall be further reduced at the rate of 25%
27 of the contribution (as reduced for service after June 30,
28 1998) for each year of the member's total creditable service
29 in excess of 34 years. The contribution shall not in any
30 event exceed 20% of that salary rate.
31 The member shall pay to the System the amount of the
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1 contribution as calculated at the time of application under
2 this Section. The amount of the contribution determined
3 under this subsection shall be recalculated at the time of
4 retirement, and if the System determines that the amount paid
5 by the member exceeds the recalculated amount, the System
6 shall refund the difference to the member with regular
7 interest from the date of payment to the date of refund.
8 The contribution required by this subsection shall be
9 paid in one of the following ways or in a combination of the
10 following ways that does not extend over more than 5 years:
11 (i) in a lump sum on or before the date of
12 retirement;
13 (ii) in substantially equal installments over a
14 period of time not to exceed 5 years, as a deduction from
15 salary in accordance with subsection (b) of Section
16 16-154;
17 (iii) if the member becomes an annuitant before
18 June 30, 2003, in substantially equal monthly
19 installments over a 24-month period, by reducing the
20 annuitant's monthly benefit over a 24-month period by the
21 amount of the otherwise applicable contribution. For
22 federal and Illinois tax purposes, the monthly amount by
23 which the annuitant's benefit is reduced shall not be
24 treated as a contribution by the annuitant, but rather as
25 a reduction of the annuitant's monthly benefit.
26 (c) If the member fails to make the full contribution
27 under this Section in a timely fashion, the payments made
28 under this Section shall be refunded to the member, without
29 interest. If the member dies before making the full
30 contribution, the payments made under this Section, together
31 with regular interest thereon, shall be refunded to the
32 member's designated beneficiary for benefits under Section
33 16-138.
34 (d) For purposes of this Section and subdivision
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1 (a)(B)(1) of Section 16-133, optional creditable service
2 established by a member shall be deemed to have been earned
3 at the time of the employment or other qualifying event upon
4 which the service is based, rather than at the time the
5 credit was established in this System.
6 (e) The contributions required under this Section are
7 the responsibility of the teacher and not the teacher's
8 employer. However, an employer of teachers may, after the
9 effective date of this amendatory Act of 1998, specifically
10 agree, through collective bargaining or otherwise, to make
11 the contributions required by this Section on behalf of those
12 teachers.
13 (Source: P.A. 90-582, eff. 5-27-98.)
14 (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
15 Sec. 16-133. Retirement annuity; amount.
16 (a) The amount of the retirement annuity shall be the
17 larger of the amounts determined under paragraphs (A) and (B)
18 below:
19 (A) An amount consisting of the sum of the
20 following:
21 (1) An amount that can be provided on an
22 actuarially equivalent basis by the member's
23 accumulated contributions at the time of retirement;
24 and
25 (2) The sum of (i) the amount that can be
26 provided on an actuarially equivalent basis by the
27 member's accumulated contributions representing
28 service prior to July 1, 1947, and (ii) the amount
29 that can be provided on an actuarially equivalent
30 basis by the amount obtained by multiplying 1.4
31 times the member's accumulated contributions
32 covering service subsequent to June 30, 1947; and
33 (3) If there is prior service, 2 times the
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1 amount that would have been determined under
2 subparagraph (2) of paragraph (A) above on account
3 of contributions which would have been made during
4 the period of prior service creditable to the member
5 had the System been in operation and had the member
6 made contributions at the contribution rate in
7 effect prior to July 1, 1947.
8 (B) An amount consisting of the greater of the
9 following:
10 (1) For creditable service earned before July
11 1, 1998 that has not been augmented under Section
12 16-129.1: 1.67% of final average salary for each of
13 the first 10 years of creditable service, 1.90% of
14 final average salary for each year in excess of 10
15 but not exceeding 20, 2.10% of final average salary
16 for each year in excess of 20 but not exceeding 30,
17 and 2.30% of final average salary for each year in
18 excess of 30; and
19 For creditable service earned on or after July
20 1, 1998 by a member who has at least 24 30 years of
21 creditable service on July 1, 1998 and who does not
22 elect to augment service under Section 16-129.1:
23 2.2% of final average salary for each year of
24 creditable service earned on or after July 1, 1998
25 but before the member reaches a total of 30 years of
26 creditable service and 2.3% of final average salary
27 for each year of creditable service earned on or
28 after July 1, 1998 and after the member reaches a
29 total of 30 years of creditable service; and
30 For all other creditable service: 2.2% of
31 final average salary for each year of creditable
32 service; or
33 (2) 1.5% of final average salary for each year
34 of creditable service plus the sum $7.50 for each of
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1 the first 20 years of creditable service.
2 The amount of the retirement annuity determined under
3 this paragraph (B) shall be reduced by 1/2 of 1% for each
4 month that the member is less than age 60 at the time the
5 retirement annuity begins. However, this reduction shall
6 not apply (i) if the member has at least 35 years of
7 creditable service, or (ii) if the member retires on
8 account of disability under Section 16-149.2 of this
9 Article with at least 20 years of creditable service.
10 (b) For purposes of this Section, final average salary
11 shall be the average salary for the highest 4 consecutive
12 years within the last 10 years of creditable service as
13 determined under rules of the board. The minimum final
14 average salary shall be considered to be $2,400 per year.
15 In the determination of final average salary for members
16 other than elected officials and their appointees when such
17 appointees are allowed by statute, that part of a member's
18 salary for any year beginning after June 30, 1979 which
19 exceeds the member's annual full-time salary rate with the
20 same employer for the preceding year by more than 20% shall
21 be excluded.
22 (c) In determining the amount of the retirement annuity
23 under paragraph (B) of this Section, a fractional year shall
24 be granted proportional credit.
25 (d) The retirement annuity determined under paragraph
26 (B) of this Section shall be available only to members who
27 render teaching service after July 1, 1947 for which member
28 contributions are required, and to annuitants who re-enter
29 under the provisions of Section 16-150.
30 (e) The maximum retirement annuity provided under
31 paragraph (B) of this Section shall be 75% of final average
32 salary.
33 (f) A member retiring after the effective date of this
34 amendatory Act of 1998 shall receive a pension equal to 75%
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1 of final average salary if the member is qualified to receive
2 a retirement annuity equal to at least 74.6% of final average
3 salary under this Article or as proportional annuities under
4 Article 20 of this Code.
5 (Source: P.A. 90-582, eff. 5-27-98.)
6 (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
7 Sec. 16-133.2. Early retirement without discount. A
8 member retiring after June 1, 1980 and on or before June 30,
9 2005 2000, and applying for a retirement annuity within 6
10 months of the last day of teaching for which retirement
11 contributions were required, may elect at the time of
12 application for a retirement annuity, to make a one time
13 member contribution to the System and thereby avoid the
14 reduction in the retirement annuity for retirement before age
15 60 specified in paragraph (B) of Section 16-133. The
16 exercise of the election shall also obligate the last
17 employer to make a one time non-refundable contribution to
18 the System. Substitute teachers wishing to exercise this
19 election must teach 85 or more days in one school term with
20 one employer, who shall be deemed the last employer for
21 purposes of this Section. The last day of teaching with that
22 employer must be within 6 months of the date of application
23 for retirement. All substitute teaching credit applied
24 toward the required 85 days must be earned after June 30,
25 1990.
26 The one time member and employer contributions shall be a
27 percentage of the retiring member's highest annual salary
28 rate used in the determination of the average salary for
29 retirement annuity purposes. However, when determining the
30 one-time member and employer contributions, that part of a
31 member's salary with the same employer which exceeds the
32 annual salary rate for the preceding year by more than 20%
33 shall be excluded. The member contribution shall be at the
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1 rate of 7% for the lesser of the following 2 periods: (1)
2 for each year that the member is less than age 60; or (2) for
3 each year that the member's creditable service is less than
4 35 years. If a member is at least age 55 and has at least 34
5 years of creditable service, no member or employer
6 contribution for the early retirement option shall be
7 required. The employer contribution shall be at the rate of
8 20% for each year the member is under age 60.
9 Upon receipt of the application and election, the System
10 shall determine the one time employee and employer
11 contributions required. The member contribution shall be
12 credited to the individual account of the member and the
13 employer contribution shall be credited to the Employer's
14 Contribution Reserve. The provisions of this Section shall
15 not be applicable until the member's contribution, if any,
16 has all the above outlined contributions have been received
17 by the System; however, the date such contributions are
18 received shall not be considered in determining the effective
19 date of retirement.
20 The number of members working for a single employer who
21 may retire under this Section in any year may be limited at
22 the option of the employer to a specified percentage of those
23 eligible, not less than 30%, with the right to participate to
24 be allocated among those applying on the basis of seniority
25 in the service of the employer.
26 (Source: P.A. 89-10, eff. 3-31-95; 90-582, eff. 5-27-98.)
27 (40 ILCS 5/17-116.1) (from Ch. 108 1/2, par. 17-116.1)
28 Sec. 17-116.1. Early retirement without discount.
29 (a) A member retiring after June 1, 1980 and before June
30 30, 1995, or after June 30, 2000 and on or before June 30,
31 2005, and within 6 months of the last day of teaching for
32 which retirement contributions were required, may elect at
33 the time of application to make a one time employee
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1 contribution to the system and thereby avoid the early
2 retirement reduction in allowance specified in paragraph (4)
3 of Section 17-116 of this Article. The exercise of the
4 election shall obligate the last Employer to also make a one
5 time non-refundable contribution to the Fund.
6 (b) Subject to authorization by the Employer as provided
7 in subsection (c), A member retiring on or after June 30,
8 1995 and on or before June 30, 2000 and within 6 months of
9 the last day of teaching for which retirement contributions
10 were required may elect at the time of application to make a
11 one-time employee contribution to the Fund and thereby avoid
12 the early retirement reduction in allowance specified in
13 paragraph (4) of Section 17-116. The exercise of the
14 election shall obligate the last Employer to also make a
15 one-time nonrefundable contribution to the Fund.
16 (c) (Blank). The benefits provided in subsection (b) are
17 available only to members who retire, during a specified
18 period, from employment with an Employer that has adopted and
19 filed with the Board a resolution expressly providing for the
20 creation of an early retirement without discount program
21 under this Section for that period.
22 The Employer has the full discretion and authority to
23 determine whether an early retirement without discount
24 program is in its best interest and to provide such a program
25 to its eligible employees in accordance with this Section.
26 The Employer may decide to authorize such a program for one
27 or more of the following periods: for the period beginning
28 July 1, 1997 and ending June 30, 1998, in which case the
29 resolution must be adopted by January 1, 1998; for the period
30 beginning July 1, 1998 and ending June 30, 1999, in which
31 case the resolution must be adopted by March 31, 1998; and
32 for the period beginning July 1, 1999 and ending June 30,
33 2000, in which case the resolution must be adopted by March
34 31, 1999. The resolution must be filed with the Board within
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1 10 days after it is adopted. A single resolution may
2 authorize an early retirement without discount program as
3 provided in this Section for more than one period.
4 Notwithstanding Section 17-157, the Employer shall also
5 have full discretion and authority to determine whether to
6 allow its employees who withdrew from service on or after
7 June 30, 1995 and before June 27, 1997 to participate in an
8 early retirement without discount program under subsection
9 (b). An early retirement without discount program for those
10 who withdrew from service on or after June 30, 1995 and
11 before June 27, 1997 may be authorized only by a resolution
12 of the Employer that is adopted by January 1, 1998 and filed
13 with the Board within 10 days after its adoption. If such a
14 resolution is duly adopted and filed, a person who (i)
15 withdrew from service with the Employer on or after June 30,
16 1995 and before June 27, 1997, (ii) qualifies for early
17 retirement without discount under subsection (b), (iii)
18 applies to the Fund within 90 days after the authorizing
19 resolution is adopted, and (iv) pays the required employee
20 contribution shall have his or her retirement pension
21 recalculated in accordance with subsection (b). The
22 resulting increase shall be effective retroactively to the
23 starting date of the retirement pension.
24 (d) The one-time employee contribution shall be equal to
25 7% of the retiring member's highest full-time annual salary
26 rate used in the determination of the average salary rate for
27 retirement pension, or if not full-time then the full-time
28 equivalent, multiplied by (1) the number of years the teacher
29 is under age 60, or (2) the number of years the employee's
30 creditable service is less than 34 35 years, whichever is
31 less. The Employer contribution shall be 20% of such salary
32 multiplied by such number of years.
33 (e) Upon receipt of the application and election, the
34 Board shall determine the one time employee and Employer
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1 contributions. The provisions of this Section shall not be
2 applicable until the member's contribution, if any, has all
3 the above outlined contributions have been received by the
4 Fund; however, the date such contributions are received shall
5 not be considered in determining the effective date of
6 retirement.
7 (f) The number of employees who may retire under this
8 Section in any year may be limited at the option of the
9 Employer to a specified percentage of those eligible, not
10 lower than 30%, with the right to participate to be allocated
11 among those applying on the basis of seniority in the service
12 of the Employer.
13 (Source: P.A. 90-32, eff. 6-27-97; 90-448, eff. 8-16-97;
14 90-566, eff. 1-2-98.)
15 (40 ILCS 5/17-119.1)
16 Sec. 17-119.1. Optional increase in retirement annuity.
17 (a) A member of the Fund may qualify for the augmented
18 rate under subdivision (b)(3) of Section 17-116 for all years
19 of creditable service earned before July 1, 1998 by making
20 the optional contribution specified in subsection (b). A
21 member may not elect to qualify for the augmented rate for
22 only a portion of his or her creditable service earned before
23 July 1, 1998.
24 (b) The contribution shall be an amount equal to 1.0% of
25 the member's highest salary rate in the 4 consecutive school
26 years immediately prior to but not including the school year
27 in which the application occurs, multiplied by the number of
28 years of creditable service earned by the member before July
29 1, 1998 or 20, whichever is less. This contribution shall be
30 reduced by 1.0% of that salary rate for every 3 full years of
31 creditable service earned by the member after June 30, 1998.
32 The contribution shall be further reduced at the rate of 25%
33 of the contribution (as reduced for service after June 30,
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1 1998) for each year of the member's total creditable service
2 in excess of 34 years. The contribution shall not in any
3 event exceed 20% of that salary rate.
4 The member shall pay to the Fund the amount of the
5 contribution as calculated at the time of application under
6 this Section. The amount of the contribution determined
7 under this subsection shall be recalculated at the time of
8 retirement, and if the Fund determines that the amount paid
9 by the member exceeds the recalculated amount, the Fund shall
10 refund the difference to the member with regular interest
11 from the date of payment to the date of refund.
12 The contribution required by this subsection shall be
13 paid in one of the following ways or in a combination of the
14 following ways that does not extend over more than 5 years:
15 (i) in a lump sum on or before the date of
16 retirement;
17 (ii) in substantially equal installments over a
18 period of time not to exceed 5 years, as a deduction from
19 salary in accordance with Section 17-130.2;
20 (iii) if the member becomes an annuitant before
21 June 30, 2003, in substantially equal monthly
22 installments over a 24-month period, by a deduction from
23 the annuitant's monthly benefit.
24 (c) If the member fails to make the full contribution
25 under this Section in a timely fashion, the payments made
26 under this Section shall be refunded to the member, without
27 interest. If the member dies before making the full
28 contribution, the payments made under this Section shall be
29 refunded to the member's designated beneficiary.
30 (d) For purposes of this Section and subsection (b) of
31 Section 17-116, optional creditable service established by a
32 member shall be deemed to have been earned at the time of the
33 employment or other qualifying event upon which the service
34 is based, rather than at the time the credit was established
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1 in this Fund.
2 (e) The contributions required under this Section are
3 the responsibility of the teacher and not the teacher's
4 employer. However, an employer of teachers may, after the
5 effective date of this amendatory Act of 1998, specifically
6 agree, through collective bargaining or otherwise, to make
7 the contributions required by this Section on behalf of those
8 teachers.
9 (Source: P.A. 90-582, eff. 5-27-98.)
10 Section 90. The State Mandates Act is amended by adding
11 Section 8.23 as follows:
12 (30 ILCS 805/8.23 new)
13 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
14 and 8 of this Act, no reimbursement by the State is required
15 for the implementation of any mandate created by this
16 amendatory Act of the 91st General Assembly.
17 Section 99. Effective date. This Act takes effect upon
18 becoming law.