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-                LRB9208135EGfg
 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,  but  only if the governing authority of the
29    municipality has adopted a resolution or ordinance  approving
30    the establishment of creditable service under this subsection
31    (b-1) by police officers of the municipality.
32        In  order  to  receive  creditable  service  for military
33    service under this subsection (b-1), a  police  officer  must
34    (1)  apply to the Fund in writing and provide evidence of the
                            -3-                LRB9208135EGfg
 1    military service that is satisfactory to the  Board  and  (2)
 2    make  contributions  to  the  Fund  equal to (i) the employee
 3    contributions that would have been required had  the  service
 4    been  rendered as a member, plus (ii) an amount determined by
 5    the board to be equal to the employer's normal  cost  of  the
 6    benefits  accrued  for  that  military  service,  plus  (iii)
 7    interest  on  items  (i)  and  (ii)  from  the  date of first
 8    membership in the Fund to the date of payment.  If payment is
 9    made during the 6-month period that begins 3 months after the
10    effective date of this amendatory Act  of  the  92nd  General
11    Assembly,  the required interest shall be at the rate of 2.5%
12    per  year,  compounded  annually;  otherwise,  the   required
13    interest  shall  be  calculated  at  the rate of 6% per year,
14    compounded annually.
15        (c)  Creditable service also includes service rendered by
16    a police officer while on leave  of  absence  from  a  police
17    department  to serve as an executive of an organization whose
18    membership  consists  of  members  of  a  police  department,
19    subject to the following conditions:  (i) the police  officer
20    is  a  participant  of  a fund established under this Article
21    with at least 10 years of service as a police  officer;  (ii)
22    the  police officer received no credit for such service under
23    any other retirement system, pension  fund,  or  annuity  and
24    benefit  fund  included  in  this Code; (iii) pursuant to the
25    rules of the board the police officer pays to  the  fund  the
26    amount  he or she would have contributed had the officer been
27    an active member of  the  police  department;  and  (iv)  the
28    organization  pays a contribution equal to the municipality's
29    normal cost for that period of service.
30          (d)(1)  Creditable service  also  includes  periods  of
31        service  originally established in another police pension
32        fund under this Article or in the Fund established  under
33        Article  7  of  this Code for which (i) the contributions
34        have been transferred under Section  3-110.7  or  Section
                            -4-                LRB9208135EGfg
 1        7-139.9  and  (ii)  any  additional contribution required
 2        under paragraph (2) of this subsection has been  paid  in
 3        full   in   accordance  with  the  requirements  of  this
 4        subsection (d).
 5             (2)  If the board  of  the  pension  fund  to  which
 6        creditable   service   and   related   contributions  are
 7        transferred under Section 3-110.7 or  7-139.9  determines
 8        that the amount transferred is less than the true cost to
 9        the  pension  fund of allowing that creditable service to
10        be  established,  then  in  order   to   establish   that
11        creditable  service  the  police  officer must pay to the
12        pension fund, within  the  payment  period  specified  in
13        paragraph   (3)   of   this   subsection,  an  additional
14        contribution equal to the difference,  as  determined  by
15        the  board  in  accordance  with the rules and procedures
16        adopted under paragraph (6) of this subsection.
17             (3)  Except  as  provided  in  paragraph  (4),   the
18        additional  contribution  must  be  paid to the board (i)
19        within  5  years  from  the  date  of  the  transfer   of
20        contributions  under  Section 3-110.7 or 7-139.9 and (ii)
21        before the police officer  terminates  service  with  the
22        fund.   The additional contribution may be paid in a lump
23        sum or in  accordance  with  a  schedule  of  installment
24        payments authorized by the board.
25             (4)  If  the  police  officer dies in service before
26        payment in full has been made and before  the  expiration
27        of the 5-year payment period, the surviving spouse of the
28        officer  may  elect  to  pay  the  unpaid  amount  on the
29        officer's behalf within 6 months after the date of death,
30        in which case the creditable service shall be granted  as
31        though the deceased police officer had paid the remaining
32        balance on the day before the date of death.
33             (5)  If  the  additional contribution is not paid in
34        full within the required  time,  the  creditable  service
                            -5-                LRB9208135EGfg
 1        shall  not  be  granted  and  the  police officer (or the
 2        officer's surviving spouse or estate) shall  be  entitled
 3        to  receive  a  refund  of (i) any partial payment of the
 4        additional contribution that has been made by the  police
 5        officer   and   (ii)   those   portions  of  the  amounts
 6        transferred under subdivision (a)(1) of  Section  3-110.7
 7        or subdivisions (a)(1) and (a)(3) of Section 7-139.9 that
 8        represent  employee  contributions  paid  by  the  police
 9        officer  (but  not  the  accumulated  interest  on  those
10        contributions) and interest paid by the police officer to
11        the  prior  pension  fund  in  order to reinstate service
12        terminated by acceptance of a refund.
13             At the time of paying a refund under this item  (5),
14        the  pension  fund  shall  also repay to the pension fund
15        from  which  the  contributions  were  transferred  under
16        Section  3-110.7  or  7-139.9   the   amount   originally
17        transferred  under  subdivision  (a)(2)  of that Section,
18        plus interest at the rate  of  6%  per  year,  compounded
19        annually,  from  the date of the original transfer to the
20        date of repayment.  Amounts repaid to the Article 7  fund
21        under this provision shall be credited to the appropriate
22        municipality.
23             Transferred  credit  that  is  not  granted  due  to
24        failure  to  pay  the  additional contribution within the
25        required time is lost;  it  may  not  be  transferred  to
26        another  pension  fund  and  may not be reinstated in the
27        pension fund from which it was transferred.
28             (6)  The Public Employee Pension  Fund  Division  of
29        the  Department  of Insurance shall establish by rule the
30        manner of making the calculation required under paragraph
31        (2)  of  this  subsection,  taking   into   account   the
32        appropriate  actuarial  assumptions; the police officer's
33        service, age, and salary history; the level of funding of
34        the  pension  fund  to  which  the  credits   are   being
                            -6-                LRB9208135EGfg
 1        transferred;  and  any  other  factors  that the Division
 2        determines to be relevant.  The rules  may  require  that
 3        all  calculations made under paragraph (2) be reported to
 4        the Division by the  board  performing  the  calculation,
 5        together  with documentation of the creditable service to
 6        be transferred, the amounts of contributions and interest
 7        to be transferred, the manner in  which  the  calculation
 8        was  performed,  the  numbers  relied  upon in making the
 9        calculation, the results  of  the  calculation,  and  any
10        other information the Division may deem useful.
11    (Source:  P.A.  90-460,  eff.  8-17-97;  91-887, eff. 7-6-00;
12    91-939, eff. 2-1-01.)

13        Section 99. Effective date.  This Act takes  effect  upon
14    becoming law.

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