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91_SB1263
LRB9108056LDmbA
1 AN ACT to amend the Illinois Pension Code by changing
2 Sections 15-136 and 15-136.2 and amending 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 15-136 and 15-136.2 as follows:
8 (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
9 Sec. 15-136. Retirement annuities - Amount. The
10 provisions of this Section 15-136 apply only to those
11 participants who are participating in the traditional benefit
12 package or the portable benefit package and do not apply to
13 participants who are participating in the self-managed plan.
14 (a) The amount of a participant's retirement annuity,
15 expressed in the form of a single-life annuity, shall be
16 determined by whichever of the following rules is applicable
17 and provides the largest annuity:
18 Rule 1: The retirement annuity shall be 1.67% of final
19 rate of earnings for each of the first 10 years of service,
20 1.90% for each of the next 10 years of service, 2.10% for
21 each year of service in excess of 20 but not exceeding 30,
22 and 2.30% for each year in excess of 30; or for persons who
23 retire on or after January 1, 1998, 2.2% of the final rate of
24 earnings for each year of service.
25 Rule 2: The retirement annuity shall be the sum of the
26 following, determined from amounts credited to the
27 participant in accordance with the actuarial tables and the
28 prescribed rate of interest in effect at the time the
29 retirement annuity begins:
30 (i) the normal annuity which can be provided on an
31 actuarially equivalent basis, by the accumulated normal
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1 contributions as of the date the annuity begins; and
2 (ii) an annuity from employer contributions of an
3 amount equal to that which can be provided on an
4 actuarially equivalent basis from the accumulated normal
5 contributions made by the participant under Section
6 15-113.6 and Section 15-113.7 and the employee
7 contribution made under Section 15-136.2; and
8 (iii) an annuity from employer contributions of an
9 amount equal to that which can be provided on an
10 actuarially equivalent basis from plus 1.4 times all
11 other accumulated normal contributions made by the
12 participant other than contributions made under Section
13 15-113.6, 15-113.7, or 15-136.2 and multiplied by 1.4.
14 The employee contribution made under Section 15-136.2 shall
15 be treated as a normal contribution for purposes of this Rule
16 2 only (regardless of whether that employee contribution was
17 paid by the employer on behalf of the participant).
18 With respect to any retirement annuity that began before
19 the effective date of this amendatory Act of the 91st General
20 Assembly and for which an employee contribution was made
21 under Section 15-136.2, the System shall recalculate the
22 retirement annuity and shall pay the amounts thus due in the
23 manner provided in Section 15-186.1 for benefits mistakenly
24 set too low.
25 In no event shall an increased Rule 2 retirement annuity
26 otherwise resulting from this amendatory Act of the 91st
27 General Assembly be lower than the amount obtained by adding
28 (1) the monthly amount obtained by dividing the combined
29 employee and employer contributions made under Section
30 15-136.2 by the System's annuity factor for the age of the
31 participant at the beginning of the annuity payment period
32 and (2) the amount equal to the participant's annuity if
33 calculated under Rule 1, reduced under Section 15-136(b) as
34 if no contributions had been made under Section 15-136.2.
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1 The changes made by this amendatory Act of the 91st
2 General Assembly are a legislative response to and
3 implementation of the Fourth District Appellate Court
4 decision in Mattis v. State Universities Retirement System et
5 al. The changes made by this amendatory Act of the 91st
6 General Assembly apply without regard to whether the person
7 is in service as an employee on or after its effective date.
8 With respect to a police officer or firefighter who retires
9 on or after August 14, the effective date of this amendatory
10 Act of 1998, the accumulated normal contributions taken into
11 account under clauses (i) and (ii) of this Rule 2 shall
12 include the additional normal contributions made by the
13 police officer or firefighter under Section 15-157(a).
14 Rule 3: The retirement annuity of a participant who is
15 employed at least one-half time during the period on which
16 his or her final rate of earnings is based, shall be equal to
17 the participant's years of service not to exceed 30,
18 multiplied by (1) $96 if the participant's final rate of
19 earnings is less than $3,500, (2) $108 if the final rate of
20 earnings is at least $3,500 but less than $4,500, (3) $120 if
21 the final rate of earnings is at least $4,500 but less than
22 $5,500, (4) $132 if the final rate of earnings is at least
23 $5,500 but less than $6,500, (5) $144 if the final rate of
24 earnings is at least $6,500 but less than $7,500, (6) $156 if
25 the final rate of earnings is at least $7,500 but less than
26 $8,500, (7) $168 if the final rate of earnings is at least
27 $8,500 but less than $9,500, and (8) $180 if the final rate
28 of earnings is $9,500 or more, except that the annuity for
29 those persons having made an election under Section
30 15-154(a-1) shall be calculated and payable under the
31 portable retirement benefit program pursuant to the
32 provisions of Section 15-136.4.
33 Rule 4: A participant who is at least age 50 and has 25
34 or more years of service as a police officer or firefighter,
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1 and a participant who is age 55 or over and has at least 20
2 but less than 25 years of service as a police officer or
3 firefighter, shall be entitled to a retirement annuity of
4 2 1/4% of the final rate of earnings for each of the first 10
5 years of service as a police officer or firefighter, 2 1/2%
6 for each of the next 10 years of service as a police officer
7 or firefighter, and 2 3/4% for each year of service as a
8 police officer or firefighter in excess of 20. The
9 retirement annuity for all other service shall be computed
10 under Rule 1.
11 For purposes of this Rule 4, a participant's service as a
12 firefighter shall also include the following:
13 (i) service that is performed while the person is
14 an employee under subsection (h) of Section 15-107; and
15 (ii) in the case of an individual who was a
16 participating employee employed in the fire department of
17 the University of Illinois's Champaign-Urbana campus
18 immediately prior to the elimination of that fire
19 department and who immediately after the elimination of
20 that fire department transferred to another job with the
21 University of Illinois, service performed as an employee
22 of the University of Illinois in a position other than
23 police officer or firefighter, from the date of that
24 transfer until the employee's next termination of service
25 with the University of Illinois.
26 (b) The retirement annuity provided under Rules 1 and 3
27 above shall be reduced by 1/2 of 1% for each month the
28 participant is under age 60 at the time of retirement.
29 However, this reduction shall not apply in the following
30 cases:
31 (1) For a disabled participant whose disability
32 benefits have been discontinued because he or she has
33 exhausted eligibility for disability benefits under
34 clause (6) of Section 15-152;
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1 (2) For a participant who has at least the number
2 of years of service required to retire at any age under
3 subsection (a) of Section 15-135; or
4 (3) For that portion of a retirement annuity which
5 has been provided on account of service of the
6 participant during periods when he or she performed the
7 duties of a police officer or firefighter, if these
8 duties were performed for at least 5 years immediately
9 preceding the date the retirement annuity is to begin.
10 (c) The maximum retirement annuity provided under Rules
11 1, 2, and 4 shall be the lesser of (1) the annual limit of
12 benefits as specified in Section 415 of the Internal Revenue
13 Code of 1986, as such Section may be amended from time to
14 time and as such benefit limits shall be adjusted by the
15 Commissioner of Internal Revenue, and (2) 80% of final rate
16 of earnings.
17 (d) An annuitant whose status as an employee terminates
18 after August 14, 1969 shall receive automatic increases in
19 his or her retirement annuity as follows:
20 Effective January 1 immediately following the date the
21 retirement annuity begins, the annuitant shall receive an
22 increase in his or her monthly retirement annuity of 0.125%
23 of the monthly retirement annuity provided under Rule 1, Rule
24 2, Rule 3, or Rule 4, contained in this Section, multiplied
25 by the number of full months which elapsed from the date the
26 retirement annuity payments began to January 1, 1972, plus
27 0.1667% of such annuity, multiplied by the number of full
28 months which elapsed from January 1, 1972, or the date the
29 retirement annuity payments began, whichever is later, to
30 January 1, 1978, plus 0.25% of such annuity multiplied by the
31 number of full months which elapsed from January 1, 1978, or
32 the date the retirement annuity payments began, whichever is
33 later, to the effective date of the increase.
34 The annuitant shall receive an increase in his or her
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1 monthly retirement annuity on each January 1 thereafter
2 during the annuitant's life of 3% of the monthly annuity
3 provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
4 this Section. The change made under this subsection by P.A.
5 81-970 is effective January 1, 1980 and applies to each
6 annuitant whose status as an employee terminates before or
7 after that date.
8 Beginning January 1, 1990, all automatic annual increases
9 payable under this Section shall be calculated as a
10 percentage of the total annuity payable at the time of the
11 increase, including all increases previously granted under
12 this Article.
13 The change made in this subsection by P.A. 85-1008 is
14 effective January 26, 1988, and is applicable without regard
15 to whether status as an employee terminated before that date.
16 (e) If, on January 1, 1987, or the date the retirement
17 annuity payment period begins, whichever is later, the sum of
18 the retirement annuity provided under Rule 1 or Rule 2 of
19 this Section and the automatic annual increases provided
20 under the preceding subsection or Section 15-136.1, amounts
21 to less than the retirement annuity which would be provided
22 by Rule 3, the retirement annuity shall be increased as of
23 January 1, 1987, or the date the retirement annuity payment
24 period begins, whichever is later, to the amount which would
25 be provided by Rule 3 of this Section. Such increased amount
26 shall be considered as the retirement annuity in determining
27 benefits provided under other Sections of this Article. This
28 paragraph applies without regard to whether status as an
29 employee terminated before the effective date of this
30 amendatory Act of 1987, provided that the annuitant was
31 employed at least one-half time during the period on which
32 the final rate of earnings was based.
33 (f) A participant is entitled to such additional annuity
34 as may be provided on an actuarially equivalent basis, by any
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1 accumulated additional contributions to his or her credit.
2 However, the additional contributions made by the participant
3 toward the automatic increases in annuity provided under this
4 Section shall not be taken into account in determining the
5 amount of such additional annuity.
6 (g) If, (1) by law, a function of a governmental unit,
7 as defined by Section 20-107 of this Code, is transferred in
8 whole or in part to an employer, and (2) a participant
9 transfers employment from such governmental unit to such
10 employer within 6 months after the transfer of the function,
11 and (3) the sum of (A) the annuity payable to the participant
12 under Rule 1, 2, or 3 of this Section (B) all proportional
13 annuities payable to the participant by all other retirement
14 systems covered by Article 20, and (C) the initial primary
15 insurance amount to which the participant is entitled under
16 the Social Security Act, is less than the retirement annuity
17 which would have been payable if all of the participant's
18 pension credits validated under Section 20-109 had been
19 validated under this system, a supplemental annuity equal to
20 the difference in such amounts shall be payable to the
21 participant.
22 (h) On January 1, 1981, an annuitant who was receiving a
23 retirement annuity on or before January 1, 1971 shall have
24 his or her retirement annuity then being paid increased $1
25 per month for each year of creditable service. On January 1,
26 1982, an annuitant whose retirement annuity began on or
27 before January 1, 1977, shall have his or her retirement
28 annuity then being paid increased $1 per month for each year
29 of creditable service.
30 (i) On January 1, 1987, any annuitant whose retirement
31 annuity began on or before January 1, 1977, shall have the
32 monthly retirement annuity increased by an amount equal to 8¢
33 per year of creditable service times the number of years that
34 have elapsed since the annuity began.
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1 (Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
2 eff. 8-16-97; 90-576, eff. 3-31-98; 90-655, eff. 7-30-98;
3 90-766, eff. 8-14-98.)
4 (40 ILCS 5/15-136.2) (from Ch. 108 1/2, par. 15-136.2)
5 Sec. 15-136.2. Early retirement without discount.
6 (a) A participant whose retirement annuity begins after
7 June 1, 1981 and on or before September 1, 2002 and within
8 six months of the last day of employment for which retirement
9 contributions were required, may elect at the time of
10 application to make a one time employee contribution to the
11 System and thereby avoid the early retirement reduction in
12 retirement annuity specified under subsection (b) of Section
13 15-136. The exercise of the election shall obligate the last
14 employer to also make a one time non-refundable contribution
15 to the System.
16 Unless otherwise contractually waived by agreement with
17 the employer, any person who began to receive a retirement
18 annuity on or after October 6, 1998 and such retirement
19 annuity (i) began within 6 months of the last day of
20 employment for which retirement contributions were required
21 and (ii) was reduced under Section 15-136(b) due to
22 retirement below age 60, may elect, within 6 months after the
23 effective date of this amendatory Act of the 91st General
24 Assembly, to make a one-time employee contribution to the
25 System under this Section and have the retirement annuity
26 recalculated in accordance with Rule 2 of Section 15-136.
27 The exercise of this election obligates the last employer to
28 also make a one-time contribution to the System.
29 (b) The one time employee and employer contributions
30 shall be a percentage of the retiring participant's highest
31 full time annual salary rate during the academic years which
32 were considered in determining his or her final rate of
33 earnings, or if not full time then the full time equivalent.
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1 The employee contribution rate shall be 7% multiplied by the
2 lesser of the following 2 sums: (1) the number of years that
3 the participant is less than age 60; or (2) the number of
4 years that the participant's creditable service is less than
5 35 years. The employer contribution shall be at the rate of
6 20% for each year the participant is less than age 60. The
7 employer shall pay the employer contribution from the same
8 source of funds which is used in paying earnings to
9 employees.
10 Upon receipt of the application and election, the System
11 shall determine the one time employee and employer
12 contributions. The provisions of this Section shall not be
13 applicable until all the above outlined contributions have
14 been received by the System; however, the date such
15 contributions are received shall not be considered in
16 determining the effective date of retirement.
17 For persons who apply to the Board after the effective
18 date of this amendatory Act of 1993 and before July 1, 1993,
19 requesting a retirement annuity to begin no earlier than July
20 1, 1993 and no later than June 30, 1994, the employer shall
21 pay both the employee and employer contributions required
22 under this Section.
23 (c) The number of employees making a contribution
24 retiring under this Section in any fiscal year may be limited
25 at the option of the employer to no less than 15% of those
26 eligible. The right to elect to make a contribution under
27 this Section early retirement without discount shall be
28 allocated among those applying on the basis of seniority in
29 the service of the last employer.
30 (Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
31 Section 10. The State Mandates Act is amended by adding
32 Section 8.24 as follows:
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1 (30 ILCS 805/8.24 new)
2 Sec. 8.24. Exempt mandate. Notwithstanding Sections 6
3 and 8 of this Act, no reimbursement by the State is required
4 for the implementation of any mandate created by this
5 amendatory Act of the 91st General Assembly.
6 Section 99. Effective date. This Act takes effect upon
7 becoming law.