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91_HB1225
LRB9104301EGfg
1 AN ACT to amend the Illinois Pension Code by changing
2 Sections 16-129.1, 16-133, and 16-133.2.
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 16-129.1, 16-133, and 16-133.2 as follows:
7 (40 ILCS 5/16-129.1)
8 Sec. 16-129.1. Optional increase in retirement annuity.
9 (a) A member of the System may qualify for the augmented
10 rate under subdivision (a)(B)(1) of Section 16-133 for all
11 years of creditable service earned before July 1, 1998 by
12 making the optional contribution specified in subsection (b).
13 A member may not elect to qualify for the augmented rate for
14 only a portion of his or her creditable service earned before
15 July 1, 1998.
16 (b) The contribution shall be an amount equal to 1.0% of
17 the member's highest salary rate in the 4 consecutive school
18 years immediately prior to but not including the school year
19 in which the application occurs, multiplied by the number of
20 years of creditable service earned by the member before July
21 1, 1998 or 20, whichever is less. This contribution shall be
22 reduced by 1.0% of that salary rate for every 3 full years of
23 creditable service earned by the member after June 30, 1998.
24 The contribution shall be further reduced at the rate of 25%
25 of the contribution (as reduced for service after June 30,
26 1998) for each year of the member's total creditable service
27 in excess of 34 years. The contribution shall not in any
28 event exceed 20% of that salary rate.
29 The member shall pay to the System the amount of the
30 contribution as calculated at the time of application under
31 this Section. The amount of the contribution determined
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1 under this subsection shall be recalculated at the time of
2 retirement, and if the System determines that the amount paid
3 by the member exceeds the recalculated amount, the System
4 shall refund the difference to the member with regular
5 interest from the date of payment to the date of refund.
6 The contribution required by this subsection shall be
7 paid in one of the following ways or in a combination of the
8 following ways that does not extend over more than 5 years:
9 (i) in a lump sum on or before the date of
10 retirement;
11 (ii) in substantially equal installments over a
12 period of time not to exceed 5 years, as a deduction from
13 salary in accordance with subsection (b) of Section
14 16-154;
15 (iii) if the member becomes an annuitant before
16 June 30, 2003, in substantially equal monthly
17 installments over a 24-month period, by reducing the
18 annuitant's monthly benefit over a 24-month period by the
19 amount of the otherwise applicable contribution. For
20 federal and Illinois tax purposes, the monthly amount by
21 which the annuitant's benefit is reduced shall not be
22 treated as a contribution by the annuitant, but rather as
23 a reduction of 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, together
29 with regular interest thereon, shall be refunded to the
30 member's designated beneficiary for benefits under Section
31 16-138.
32 (d) For purposes of this Section and subdivision
33 (a)(B)(1) of Section 16-133, optional creditable service
34 established by a member shall be deemed to have been earned
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1 at the time of the employment or other qualifying event upon
2 which the service is based, rather than at the time the
3 credit was established in this System.
4 (e) The contributions required under this Section are
5 the responsibility of the teacher and not the teacher's
6 employer. However, an employer of teachers may, after the
7 effective date of this amendatory Act of 1998, specifically
8 agree, through collective bargaining or otherwise, to make
9 the contributions required by this Section on behalf of those
10 teachers.
11 (Source: P.A. 90-582, eff. 5-27-98.)
12 (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
13 Sec. 16-133. Retirement annuity; amount.
14 (a) The amount of the retirement annuity shall be the
15 larger of the amounts determined under paragraphs (A) and (B)
16 below:
17 (A) An amount consisting of the sum of the
18 following:
19 (1) An amount that can be provided on an
20 actuarially equivalent basis by the member's
21 accumulated contributions at the time of retirement;
22 and
23 (2) The sum of (i) the amount that can be
24 provided on an actuarially equivalent basis by the
25 member's accumulated contributions representing
26 service prior to July 1, 1947, and (ii) the amount
27 that can be provided on an actuarially equivalent
28 basis by the amount obtained by multiplying 1.4
29 times the member's accumulated contributions
30 covering service subsequent to June 30, 1947; and
31 (3) If there is prior service, 2 times the
32 amount that would have been determined under
33 subparagraph (2) of paragraph (A) above on account
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1 of contributions which would have been made during
2 the period of prior service creditable to the member
3 had the System been in operation and had the member
4 made contributions at the contribution rate in
5 effect prior to July 1, 1947.
6 (B) An amount consisting of the greater of the
7 following:
8 (1) For creditable service earned before July
9 1, 1998 that has not been augmented under Section
10 16-129.1: 1.67% of final average salary for each of
11 the first 10 years of creditable service, 1.90% of
12 final average salary for each year in excess of 10
13 but not exceeding 20, 2.10% of final average salary
14 for each year in excess of 20 but not exceeding 30,
15 and 2.30% of final average salary for each year in
16 excess of 30; and
17 For creditable service earned on or after July
18 1, 1998 by a member who has at least 24 30 years of
19 creditable service on July 1, 1998 and who does not
20 elect to augment service under Section 16-129.1:
21 2.2% of final average salary for each year of
22 creditable service earned on or after July 1, 1998
23 but before the member reaches a total of 30 years of
24 creditable service and 2.3% of final average salary
25 for each year of creditable service earned on or
26 after July 1, 1998 and after the member reaches a
27 total of 30 years of creditable service; and
28 For all other creditable service: 2.2% of
29 final average salary for each year of creditable
30 service; or
31 (2) 1.5% of final average salary for each year
32 of creditable service plus the sum $7.50 for each of
33 the first 20 years of creditable service.
34 The amount of the retirement annuity determined under
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1 this paragraph (B) shall be reduced by 1/2 of 1% for each
2 month that the member is less than age 60 at the time the
3 retirement annuity begins. However, this reduction shall
4 not apply (i) if the member has at least 35 years of
5 creditable service, or (ii) if the member retires on
6 account of disability under Section 16-149.2 of this
7 Article with at least 20 years of creditable service.
8 (b) For purposes of this Section, final average salary
9 shall be the average salary for the highest 4 consecutive
10 years within the last 10 years of creditable service as
11 determined under rules of the board. The minimum final
12 average salary shall be considered to be $2,400 per year.
13 In the determination of final average salary for members
14 other than elected officials and their appointees when such
15 appointees are allowed by statute, that part of a member's
16 salary for any year beginning after June 30, 1979 which
17 exceeds the member's annual full-time salary rate with the
18 same employer for the preceding year by more than 20% shall
19 be excluded.
20 (c) In determining the amount of the retirement annuity
21 under paragraph (B) of this Section, a fractional year shall
22 be granted proportional credit.
23 (d) The retirement annuity determined under paragraph
24 (B) of this Section shall be available only to members who
25 render teaching service after July 1, 1947 for which member
26 contributions are required, and to annuitants who re-enter
27 under the provisions of Section 16-150.
28 (e) The maximum retirement annuity provided under
29 paragraph (B) of this Section shall be 75% of final average
30 salary.
31 (f) A member retiring after the effective date of this
32 amendatory Act of 1998 shall receive a pension equal to 75%
33 of final average salary if the member is qualified to receive
34 a retirement annuity equal to at least 74.6% of final average
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1 salary under this Article or as proportional annuities under
2 Article 20 of this Code.
3 (Source: P.A. 90-582, eff. 5-27-98.)
4 (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
5 Sec. 16-133.2. Early retirement without discount. A
6 member retiring after June 1, 1980 and on or before June 30,
7 2005 2000, and applying for a retirement annuity within 6
8 months of the last day of teaching for which retirement
9 contributions were required, may elect at the time of
10 application for a retirement annuity, to make a one time
11 member contribution to the System and thereby avoid the
12 reduction in the retirement annuity for retirement before age
13 60 specified in paragraph (B) of Section 16-133. The
14 exercise of the election shall also obligate the last
15 employer to make a one time non-refundable contribution to
16 the System. Substitute teachers wishing to exercise this
17 election must teach 85 or more days in one school term with
18 one employer, who shall be deemed the last employer for
19 purposes of this Section. The last day of teaching with that
20 employer must be within 6 months of the date of application
21 for retirement. All substitute teaching credit applied
22 toward the required 85 days must be earned after June 30,
23 1990.
24 The one time member and employer contributions shall be a
25 percentage of the retiring member's highest annual salary
26 rate used in the determination of the average salary for
27 retirement annuity purposes. However, when determining the
28 one-time member and employer contributions, that part of a
29 member's salary with the same employer which exceeds the
30 annual salary rate for the preceding year by more than 20%
31 shall be excluded. The member contribution shall be at the
32 rate of 7% for the lesser of the following 2 periods: (1)
33 for each year that the member is less than age 60; or (2) for
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1 each year that the member's creditable service is less than
2 35 years. If a member is at least age 55 and has at least 34
3 years of creditable service, no member or employer
4 contribution for the early retirement option shall be
5 required. The employer contribution shall be at the rate of
6 20% for each year the member is under age 60.
7 Upon receipt of the application and election, the System
8 shall determine the one time employee and employer
9 contributions required. The member contribution shall be
10 credited to the individual account of the member and the
11 employer contribution shall be credited to the Employer's
12 Contribution Reserve. The provisions of this Section shall
13 not be applicable until the member's contribution, if any,
14 has all the above outlined contributions have been received
15 by the System; however, the date such contributions are
16 received shall not be considered in determining the effective
17 date of retirement.
18 The number of members working for a single employer who
19 may retire under this Section in any year may be limited at
20 the option of the employer to a specified percentage of those
21 eligible, not less than 30%, with the right to participate to
22 be allocated among those applying on the basis of seniority
23 in the service of the employer.
24 (Source: P.A. 89-10, eff. 3-31-95; 90-582, eff. 5-27-98.)
25 Section 99. Effective date. This Act takes effect upon
26 becoming law.