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91_SB0061 LRB9100889EGfg 1 AN ACT to amend the Illinois Pension Code by changing 2 Sections 5-167.1 and 5-167.2 and to amend the State Mandates 3 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 5-167.1 and 5-167.2 as follows: 8 (40 ILCS 5/5-167.1) (from Ch. 108 1/2, par. 5-167.1) 9 Sec. 5-167.1. Automatic increase in annuity; retirement 10 from service after September 1, 1967. 11 (a) A policeman who retires from service after September 12 1, 1967 with at least 20 years of service credit shall, upon 13 either the first of the month following the first anniversary 14 of his date of retirement if he is age 60 (age 55 if born 15 before January 1, 1945) or over on that anniversary date, or 16 upon the first of the month following his attainment of age 17 60 (age 55 if born before January 1, 1945) if it occurs after 18 the first anniversary of his retirement date, have his then 19 fixed and payable monthly annuity increased by 1 1/2% and 20 such first fixed annuity as granted at retirement increased 21 by an additional 1 1/2% in January of each year thereafter up 22 to a maximum increase of 30%. Beginning January 1, 1983 for 23 policemen born before January 1, 1930, and beginning January 24 1, 1988 for policemen born on or after January 1, 1930 but 25 before January 1, 1940, and beginning January 1, 1996 for 26 policemen born on or after January 1, 1940 but before January 27 1, 1945, such increases shall be 3% and such policemen shall 28 not be subject to the 30% maximum increase. 29 Beginning January 1, 2000, all annual increases under 30 this subsection shall be at the rate of 3% of the current 31 amount of the annuity, including any previous increases -2- LRB9100889EGfg 1 granted under this Article, and the 30% maximum no longer 2 applies. The change made to this Section by this amendatory 3 Act of the 91st General Assembly is not limited to persons in 4 service on or after its effective date. 5 Any policeman born before January 1, 1945 who qualifies 6 for a minimum annuity and retires after September 1, 1967 but 7 has not received the initial increase under this subsection 8 before January 1, 1996 is entitled to receive the initial 9 increase under this subsection on (1) January 1, 1996, (2) 10 the first anniversary of the date of retirement, or (3) 11 attainment of age 55, whichever occurs last. The changes to 12 this Section made by this amendatory Act of 1995 apply 13 beginning January 1, 1996 and without regard to whether the 14 policeman or annuitant terminated service before the 15 effective date of this amendatory Act of 1995. 16 (b) Subsection (a) of this Section is not applicable to 17 an employee receiving a term annuity. 18 (c) To help defray the cost of such increases in 19 annuity, there shall be deducted, beginning September 1, 20 1967, from each payment of salary to a policeman, 1/2 of 1% 21 of each salary payment concurrently with and in addition to 22 the salary deductions otherwise made for annuity purposes. 23 The city, in addition to the contributions otherwise made 24 by it for annuity purposes under other provisions of this 25 Article, shall make matching contributions concurrently with 26 such salary deductions. 27 Each such 1/2 of 1% deduction from salary and each such 28 contribution by the city of 1/2 of 1% of salary shall be 29 credited to the Automatic Increase Reserve, to be used to 30 defray the cost of the 1 1/2% annuity increase provided by 31 this Section. Any balance in such reserve as of the 32 beginning of each calendar year shall be credited with 33 interest at the rate of 3% per annum. 34 Such deductions from salary and city contributions shall -3- LRB9100889EGfg 1 continue while the policeman is in service. 2 The salary deductions provided in this Section are not 3 subject to refund, except to the policeman himself, in any 4 case in which a policeman withdraws prior to qualification 5 for minimum annuity and applies for refund or applies for 6 annuity, and also where a term annuity becomes payable. In 7 such cases, the total of such salary deductions shall be 8 refunded to the policeman, without interest, and charged to 9 the Automatic Increase Reserve. 10 (Source: P.A. 89-12, eff. 4-20-95.) 11 (40 ILCS 5/5-167.2) (from Ch. 108 1/2, par. 5-167.2) 12 Sec. 5-167.2. Retirement before September 1, 1967. A 13 retired policeman, qualifying for minimum annuity or who 14 retired from service with 20 or more years of service, before 15 September 1, 1967, shall, in January of the year following 16 the year he attains the age of 65, or in January of the year 17 1970, if then more than 65 years of age, have his then fixed 18 and payable monthly annuity increased by an amount equal to 19 2% of the original grant of annuity, for each year the 20 policeman was in receipt of annuity payments after the year 21 in which he attains, or did attain the age of 63. An 22 additional 2% increase in such then fixed and payable 23 original granted annuity shall accrue in each January 24 thereafter. Beginning January 1, 1986, the rate of such 25 increase shall be 3% instead of 2%. Beginning January 1, 26 2000, all annual increases under this paragraph shall be at 27 the rate of 3% of the current amount of the annuity, 28 including any previous increases granted under this Article. 29 The change made to this Section by this amendatory Act of the 30 91st General Assembly is not limited to persons in service on 31 or after its effective date. 32 The provisions of the preceding paragraph of this Section 33 apply only to a retired policeman eligible for such increases -4- LRB9100889EGfg 1 in his annuity who contributes to the Fund a sum equal to $5 2 for each full year of credited service upon which his annuity 3 was computed. All such sums contributed shall be placed in a 4 Supplementary Payment Reserve and shall be used for the 5 purposes of such Fund account. 6 Beginning with the monthly annuity payment due in July, 7 1982, the fixed and granted monthly annuity payment for any 8 policeman who retired from the service, before September 1, 9 1976, at age 50 or over with 20 or more years of service and 10 entitled to an annuity on January 1, 1974, shall be not less 11 than $400. It is the intent of the General Assembly that the 12 change made in this Section by this amendatory Act of 1982 13 shall apply retroactively to July 1, 1982. 14 Beginning with the monthly annuity payment due on January 15 1, 1986, the fixed and granted monthly annuity payment for 16 any policeman who retired from the service before January 1, 17 1986, at age 50 or over with 20 or more years of service, or 18 any policeman who retired from service due to termination of 19 disability and who is entitled to an annuity on January 1, 20 1986, shall be not less than $475. 21 Beginning with the monthly annuity payment due on January 22 1, 1992, the fixed and granted monthly annuity payment for 23 any policeman who retired from the service before January 1, 24 1992, at age 50 or over with 20 or more years of service, and 25 for any policeman who retired from service due to termination 26 of disability and who is entitled to an annuity on January 1, 27 1992, shall be not less than $650. 28 Beginning with the monthly annuity payment due on January 29 1, 1993, the fixed and granted monthly annuity payment for 30 any policeman who retired from the service before January 1, 31 1993, at age 50 or over with 20 or more years of service, and 32 for any policeman who retired from service due to termination 33 of disability and who is entitled to an annuity on January 1, 34 1993, shall be not less than $750. -5- LRB9100889EGfg 1 Beginning with the monthly annuity payment due on January 2 1, 1994, the fixed and granted monthly annuity payment for 3 any policeman who retired from the service before January 1, 4 1994, at age 50 or over with 20 or more years of service, and 5 for any policeman who retired from service due to termination 6 of disability and who is entitled to an annuity on January 1, 7 1994, shall be not less than $850. 8 The difference in amount between the original fixed and 9 granted monthly annuity of any such policeman on the date of 10 his retirement from the service and the monthly annuity 11 provided for in the immediately preceding paragraph shall be 12 paid as a supplement in the manner set forth in the 13 immediately following paragraph. 14 To defray the annual cost of the increases indicated in 15 the preceding part of this Section, the annual interest 16 income accruing from investments held by this Fund, exclusive 17 of gains or losses on sales or exchanges of assets during the 18 year, over and above 4% a year shall be used to the extent 19 necessary and available to finance the cost of such increases 20 for the following year and such amount shall be transferred 21 as of the end of each year beginning with the year 1969 to a 22 Fund account designated as the Supplementary Payment Reserve 23 from the Interest and Investment Reserve set forth in Section 24 5-2075-167.2. 25 In the event the funds in the Supplementary Payment 26 Reserve in any year arising from: (1) the interest income 27 accruing in the preceding year above 4% a year and (2) the 28 contributions by retired persons are insufficient to make the 29 total payments to all persons entitled to the annuity 30 specified in this Section and (3) any interest earnings over 31 4% a year beginning with the year 1969 which were not 32 previously used to finance such increases and which were 33 transferred to the Prior Service Annuity Reserve, may be used 34 to the extent necessary and available to provide sufficient -6- LRB9100889EGfg 1 funds to finance such increases for the current year and such 2 sums shall be transferred from the Prior Service Annuity 3 Reserve. In the event the total money available in the 4 Supplementary Payment Reserve from such sources are 5 insufficient to make the total payments to all persons 6 entitled to such increases for the year, a proportionate 7 amount computed as the ratio of the money available to the 8 total of the total payments specified for that year shall be 9 paid to each person for that year. 10 The Fund shall be obligated for the payment of the 11 increases in annuity as provided for in this Section only to 12 the extent that the assets for such purpose are available. 13 (Source: P.A. 87-849; 87-1265; revised 10-31-98.) 14 Section 90. The State Mandates Act is amended by adding 15 Section 8.23 as follows: 16 (30 ILCS 805/8.23 new) 17 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6 18 and 8 of this Act, no reimbursement by the State is required 19 for the implementation of any mandate created by this 20 amendatory Act of the 91st General Assembly. 21 Section 99. Effective date. This Act takes effect upon 22 becoming law.