State of Illinois
92nd General Assembly

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 1        AN ACT in relation to public employee benefits.

 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 Section 3-110 as follows:

 6        (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
 7        Sec. 3-110.  Creditable service.
 8        (a)  "Creditable  service" is the time served by a police
 9    officer as a member of a regularly constituted  police  force
10    of a municipality.  In computing creditable service furloughs
11    without  pay  exceeding 30 days shall not be counted, but all
12    leaves of absence for  illness  or  accident,  regardless  of
13    length,  and all periods of disability retirement for which a
14    police officer has received no  disability  pension  payments
15    under this Article shall be counted.
16        (a-5)  Up  to  3  years  of  time during which the police
17    officer receives a disability pension under Section  3-114.1,
18    3-114.2,  3-114.3,  or 3-114.6 shall be counted as creditable
19    service, provided that (i)  the  police  officer  returns  to
20    active  service  after  the  disability for a period at least
21    equal to the period for which credit is to be established and
22    (ii) the police officer makes contributions to the fund based
23    on the rates specified in Section 3-125.1 and the salary upon
24    which the disability pension is based.   These  contributions
25    may  be  paid  at  any  time  prior  to the commencement of a
26    retirement pension.  The police officer may,  but  need  not,
27    elect  to have the contributions deducted from the disability
28    pension or to pay them in installments on a schedule approved
29    by the board.  If not deducted from the  disability  pension,
30    the  contributions  shall  include interest at the rate of 6%
31    per year,  compounded  annually,  from  the  date  for  which
                            -2-                LRB9208044EGfg
 1    service  credit  is being established to the date of payment.
 2    If contributions are paid  under  this  subsection  (a-5)  in
 3    excess  of  those  needed to establish the credit, the excess
 4    shall be refunded.  This subsection (a-5) applies to  persons
 5    receiving   a   disability  pension  under  Section  3-114.1,
 6    3-114.2, 3-114.3, or 3-114.6 on the effective  date  of  this
 7    amendatory  Act  of  the  91st  General  Assembly, as well as
 8    persons who begin to receive such a disability pension  after
 9    that date.
10        (b)  Creditable  service  includes all periods of service
11    in the military, naval or air forces  of  the  United  States
12    entered   upon   while   an   active   police  officer  of  a
13    municipality, provided that upon  applying  for  a  permanent
14    pension,  and  in accordance with the rules of the board, the
15    police officer pays into the  fund  the  amount  the  officer
16    would  have  contributed  if  he  or  she  had been a regular
17    contributor during  such  period,  to  the  extent  that  the
18    municipality  which  the  police  officer served has not made
19    such contributions in the officer's behalf.  The total amount
20    of such creditable service shall not exceed 5  years,  except
21    that  any  police officer who on July 1, 1973 had more than 5
22    years of such creditable  service  shall  receive  the  total
23    amount thereof.
24        (b-1)  In  addition to any creditable service established
25    under subsection (b), creditable service may be  granted  for
26    up  to 24 months of service in the armed forces of the United
27    States that was not immediately preceded by employment  as  a
28    police  officer.   In order to receive creditable service for
29    military  service  under  this  subsection  (b-1),  a  police
30    officer must (1) apply to the Fund  in  writing  and  provide
31    evidence  of the military service that is satisfactory to the
32    Board and (2) make contributions to the Fund equal to (i) the
33    employee contributions that would have been required had  the
34    service  been  rendered  as  a  member,  plus  (ii) an amount
                            -3-                LRB9208044EGfg
 1    determined by the board to be equal to the employer's  normal
 2    cost  of the benefits accrued for that military service, plus
 3    (iii) interest on items (i) and (ii) from the date  of  first
 4    membership in the Fund to the date of payment.  If payment is
 5    made during the 6-month period that begins 3 months after the
 6    effective  date  of  this  amendatory Act of the 92nd General
 7    Assembly, the required interest shall be at the rate of  2.5%
 8    per   year,  compounded  annually;  otherwise,  the  required
 9    interest shall be calculated at the  rate  of  6%  per  year,
10    compounded annually.
11        (c)  Creditable service also includes service rendered by
12    a  police  officer  while  on  leave of absence from a police
13    department to serve as an executive of an organization  whose
14    membership  consists  of  members  of  a  police  department,
15    subject  to the following conditions:  (i) the police officer
16    is a participant of a fund  established  under  this  Article
17    with  at  least 10 years of service as a police officer; (ii)
18    the police officer received no credit for such service  under
19    any  other  retirement  system,  pension fund, or annuity and
20    benefit fund included in this Code;  (iii)  pursuant  to  the
21    rules  of  the  board the police officer pays to the fund the
22    amount he or she would have contributed had the officer  been
23    an  active  member  of  the  police  department; and (iv) the
24    organization pays a contribution equal to the  municipality's
25    normal cost for that period of service.
26          (d)(1)  Creditable  service  also  includes  periods of
27        service originally established in another police  pension
28        fund  under this Article or in the Fund established under
29        Article 7 of this Code for which  (i)  the  contributions
30        have  been  transferred  under Section 3-110.7 or Section
31        7-139.9 and (ii)  any  additional  contribution  required
32        under  paragraph  (2) of this subsection has been paid in
33        full  in  accordance  with  the  requirements   of   this
34        subsection (d).
                            -4-                LRB9208044EGfg
 1             (2)  If  the  board  of  the  pension  fund to which
 2        creditable  service   and   related   contributions   are
 3        transferred  under  Section 3-110.7 or 7-139.9 determines
 4        that the amount transferred is less than the true cost to
 5        the pension fund of allowing that creditable  service  to
 6        be   established,   then   in  order  to  establish  that
 7        creditable service the police officer  must  pay  to  the
 8        pension  fund,  within  the  payment  period specified in
 9        paragraph  (3)  of   this   subsection,   an   additional
10        contribution  equal  to  the difference, as determined by
11        the board in accordance with  the  rules  and  procedures
12        adopted under paragraph (6) of this subsection.
13             (3)  Except   as  provided  in  paragraph  (4),  the
14        additional contribution must be paid  to  the  board  (i)
15        within   5  years  from  the  date  of  the  transfer  of
16        contributions under Section 3-110.7 or 7-139.9  and  (ii)
17        before  the  police  officer  terminates service with the
18        fund.  The additional contribution may be paid in a  lump
19        sum  or  in  accordance  with  a  schedule of installment
20        payments authorized by the board.
21             (4)  If the police officer dies  in  service  before
22        payment  in  full has been made and before the expiration
23        of the 5-year payment period, the surviving spouse of the
24        officer may  elect  to  pay  the  unpaid  amount  on  the
25        officer's behalf within 6 months after the date of death,
26        in  which case the creditable service shall be granted as
27        though the deceased police officer had paid the remaining
28        balance on the day before the date of death.
29             (5)  If the additional contribution is not  paid  in
30        full  within  the  required  time, the creditable service
31        shall not be granted  and  the  police  officer  (or  the
32        officer's  surviving  spouse or estate) shall be entitled
33        to receive a refund of (i) any  partial  payment  of  the
34        additional  contribution that has been made by the police
                            -5-                LRB9208044EGfg
 1        officer  and  (ii)  those   portions   of   the   amounts
 2        transferred  under  subdivision (a)(1) of Section 3-110.7
 3        or subdivisions (a)(1) and (a)(3) of Section 7-139.9 that
 4        represent  employee  contributions  paid  by  the  police
 5        officer  (but  not  the  accumulated  interest  on  those
 6        contributions) and interest paid by the police officer to
 7        the prior pension fund  in  order  to  reinstate  service
 8        terminated by acceptance of a refund.
 9             At  the time of paying a refund under this item (5),
10        the pension fund shall also repay  to  the  pension  fund
11        from  which  the  contributions  were  transferred  under
12        Section   3-110.7   or   7-139.9  the  amount  originally
13        transferred under subdivision  (a)(2)  of  that  Section,
14        plus  interest  at  the  rate  of 6% per year, compounded
15        annually, from the date of the original transfer  to  the
16        date  of repayment.  Amounts repaid to the Article 7 fund
17        under this provision shall be credited to the appropriate
18        municipality.
19             Transferred  credit  that  is  not  granted  due  to
20        failure to pay the  additional  contribution  within  the
21        required  time  is  lost;  it  may  not be transferred to
22        another pension fund and may not  be  reinstated  in  the
23        pension fund from which it was transferred.
24             (6)  The  Public  Employee  Pension Fund Division of
25        the Department of Insurance shall establish by  rule  the
26        manner of making the calculation required under paragraph
27        (2)   of   this   subsection,  taking  into  account  the
28        appropriate actuarial assumptions; the  police  officer's
29        service, age, and salary history; the level of funding of
30        the   pension   fund  to  which  the  credits  are  being
31        transferred; and any  other  factors  that  the  Division
32        determines  to  be  relevant.  The rules may require that
33        all calculations made under paragraph (2) be reported  to
34        the  Division  by  the  board performing the calculation,
                            -6-                LRB9208044EGfg
 1        together with documentation of the creditable service  to
 2        be transferred, the amounts of contributions and interest
 3        to  be  transferred,  the manner in which the calculation
 4        was performed, the numbers  relied  upon  in  making  the
 5        calculation,  the  results  of  the  calculation, and any
 6        other information the Division may deem useful.
 7    (Source: P.A. 90-460,  eff.  8-17-97;  91-887,  eff.  7-6-00;
 8    91-939, eff. 2-1-01.)

 9        Section  90.  The State Mandates Act is amended by adding
10    Section 8.25 as follows:

11        (30 ILCS 805/8.25 new)
12        Sec. 8.25. Exempt mandate.   Notwithstanding  Sections  6
13    and  8 of this Act, no reimbursement by the State is required
14    for  the  implementation  of  any  mandate  created  by  this
15    amendatory Act of the 92nd General Assembly.

16        Section 99. Effective date.  This Act takes  effect  upon
17    becoming law.

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