Public Act 094-0004
 
SB0027 Enrolled LRB094 04055 AMC 34075 b

    AN ACT concerning public employee benefits.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Pension Code is amended by changing
Sections 2-124, 2-134, 14-108.3, 14-110, 14-131, 14-135.08,
15-125, 15-136, 15-155, 15-165, 16-128, 16-133, 16-133.2,
16-133.3, 16-152, 16-158, 16-176, 17-116.1, 18-131, and 18-140
and by adding Sections 1A-201, 2-162, 14-152.1, 15-198, 16-203,
and 18-169 as follows:
 
    (40 ILCS 5/1A-201 new)
    Sec. 1A-201. Advisory Commission on Pension Benefits.
    (a) There is created an Advisory Commission on Pension
Benefits. The Commission shall consist of 15 persons, of whom 8
shall be appointed by the Governor and one each shall be
appointed by the President and Minority Leader of the Senate
and the Speaker and Minority Leader of the House of
Representatives. Four of the persons appointed by the Governor
shall represent different statewide labor organizations, of
which 2 shall be organizations that represent primarily
teachers and 2 shall be organizations that represent primarily
State employees other than teachers. The Directors of the
retirement systems established under Articles 14, 15, and 16 of
this Code shall be ex officio members of the Commission.
    (b) The Commission shall consider and make its
recommendations concerning changing the age and service
requirements, automatic annual increase benefits, and employee
contribution rates of the State-funded retirement systems and
other pension-related issues as determined by the Commission.
On or before November 1, 2005, the Commission shall report its
findings and recommendations to the Governor and the General
Assembly.
    (c) The Commission may request actuarial data from any of
the 5 State-funded retirement systems established under this
Code. That data may include, but is not limited to, the dates
of birth, years of service, salaries, and life expectancies of
members. A retirement system shall provide the requested
information as soon as practical after the request is received,
but in no event later than any reasonable deadline imposed by
the Commission.
 
    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
    Sec. 2-124. Contributions by State.
    (a) The State shall make contributions to the System by
appropriations of amounts which, together with the
contributions of participants, interest earned on investments,
and other income will meet the cost of maintaining and
administering the System on a 90% funded basis in accordance
with actuarial recommendations.
    (b) The Board shall determine the amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board and
the prescribed rate of interest, using the formula in
subsection (c).
    (c) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$4,157,000.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$5,220,300.
    For each of State fiscal years 2008 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 2-134, shall not
exceed an amount equal to (i) the amount of the required State
contribution that would have been calculated under this Section
for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(Source: P.A. 93-2, eff. 4-7-03.)
 
    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
    Sec. 2-134. To certify required State contributions and
submit vouchers.
    (a) The Board shall certify to the Governor on or before
November 15 of each year the amount of the required State
contribution to the System for the next fiscal year. The
certification shall include a copy of the actuarial
recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
    (b) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month the Board shall
submit vouchers for payment of State contributions to the
System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a). From the effective date of this amendatory Act of the 93rd
General Assembly through June 30, 2004, the Board shall not
submit vouchers for the remainder of fiscal year 2004 in excess
of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (d) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year. If in
any month the amount remaining unexpended from all other
appropriations to the System for the applicable fiscal year
(including the appropriations to the System under Section 8.12
of the State Finance Act and Section 1 of the State Pension
Funds Continuing Appropriation Act) is less than the amount
lawfully vouchered under this Section, the difference shall be
paid from the General Revenue Fund under the continuing
appropriation authority provided in Section 1.1 of the State
Pension Funds Continuing Appropriation Act.
    (c) The full amount of any annual appropriation for the
System for State fiscal year 1995 shall be transferred and made
available to the System at the beginning of that fiscal year at
the request of the Board. Any excess funds remaining at the end
of any fiscal year from appropriations shall be retained by the
System as a general reserve to meet the System's accrued
liabilities.
(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04.)
 
    (40 ILCS 5/2-162 new)
    Sec. 2-162. Application and expiration of new benefit
increases.
    (a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly.
    (b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
    (d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
    (e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
 
    (40 ILCS 5/14-108.3)
    Sec. 14-108.3. Early retirement incentives.
    (a) To be eligible for the benefits provided in this
Section, a person must:
        (1) be a member of this System who, on any day during
    June, 2002, is (i) in active payroll status in a position
    of employment with a department and an active contributor
    to this System with respect to that employment, and
    terminates that employment before the retirement annuity
    under this Article begins, or (ii) on layoff status from
    such a position with a right of re-employment or recall to
    service, or (iii) receiving benefits under Section 14-123,
    14-123.1 or 14-124, but only if the member has not been
    receiving those benefits for a continuous period of more
    than 2 years as of the date of application;
        (2) not have received any retirement annuity under this
    Article beginning earlier than August 1, 2002;
        (3) file with the Board on or before December 31, 2002
    a written application requesting the benefits provided in
    this Section;
        (4) terminate employment under this Article no later
    than December 31, 2002 (or the date established under
    subsection (d), if applicable);
        (5) by the date of termination of service, have at
    least 8 years of creditable service under this Article,
    without the use of any creditable service established under
    this Section;
        (6) by the date of termination of service, have at
    least 5 years of membership service earned while an
    employee under this Article, which may include military
    service for which credit is established under Section
    14-105(b), service during the qualifying period for which
    credit is established under Section 14-104(a), and service
    for which credit has been established by repaying a refund
    under Section 14-130, but shall not include service for
    which any other optional service credit has been
    established; and
        (7) not receive any early retirement benefit under
    Section 16-133.3 of this Code.
    (b)   An eligible person may establish up to 5 years of
creditable service under this Article, in increments of one
month, by making the contributions specified in subsection (c).
In addition, for each month of creditable service established
under this Section, a person's age at retirement shall be
deemed to be one month older than it actually is.
    The creditable service established under this Section may
be used for all purposes under this Article and the Retirement
Systems Reciprocal Act, except for the computation of final
average compensation under Section 14-103.12 or the
determination of compensation under this or any other Article
of this Code.
    The age enhancement established under this Section may not
be used to enable any person to begin receiving a retirement
annuity calculated under Section 14-110 before actually
attaining age 50 (without any age enhancement under this
Section). The age enhancement established under this Section
may be used for all other purposes under this Article
(including calculation of a proportionate annuity payable by
this System under the Retirement Systems Reciprocal Act),
except for purposes of the level income option in Section
14-112, the reversionary annuity under Section 14-113, and the
required distributions under Section 14-121.1.
    The age enhancement established under this Section may be
used in determining benefits payable under Article 16 of this
Code under the Retirement Systems Reciprocal Act, if the person
has at least 5 years of service credit in the Article 16 system
that was earned while participating in that system as a teacher
(as defined in Section 16-106) employed by a department (as
defined in Section 14-103.04). Age enhancement established
under this Section shall not otherwise be used in determining
benefits payable under other Articles of this Code under the
Retirement Systems Reciprocal Act.
    (c) For all creditable service established under this
Section, a person must pay to the System an employee
contribution to be determined by the System, based on the
member's rate of compensation on June 1, 2002 (or the last date
before June 1, 2002 for which a rate can be determined) and the
retirement contribution rate in effect on June 1, 2002 for the
member (or for members with the same social security and
alternative formula status as the member).
    If the member receives a lump sum payment for accumulated
vacation, sick leave and personal leave upon withdrawal from
service, and the net amount of that lump sum payment is at
least as great as the amount of the contribution required under
this Section, the entire contribution must be paid by the
employee by payroll deduction. If there is no such lump sum
payment, or if it is less than the contribution required under
this Section, the member shall make an initial payment by
payroll deduction, equal to the net amount of the lump sum
payment for accumulated vacation, sick leave, and personal
leave, and have the remaining amount due treated as a reduction
from the retirement annuity in 24 equal monthly installments
beginning in the month in which the retirement annuity takes
effect. The required contribution may be paid as a pre-tax
deduction from earnings. For federal and Illinois tax purposes,
the monthly amount by which the annuitant's benefit is reduced
shall not be treated as a contribution by the annuitant, but
rather as a reduction of the annuitant's monthly benefit.
    (c-5) The reduction in retirement annuity provided in
subsection (c) of Section 14-108 does not apply to the annuity
of a person who retires under this Section. A person who has
received any age enhancement or creditable service under this
Section may begin to receive an unreduced retirement annuity
upon attainment of age 55 with at least 25 years of creditable
service (including any age enhancement and creditable service
established under this Section).
    (d) In order to ensure that the efficient operation of
State government is not jeopardized by the simultaneous
retirement of large numbers of key personnel, the director or
other head of a department may, for key employees of that
department, extend the December 31, 2002 deadline for
terminating employment under this Article established in
subdivision (a)(4) of this Section to a date not later than
April 30, 2003 by so notifying the System in writing by
December 31, 2002.
    (e) Notwithstanding Section 14-111, a person who has
received any age enhancement or creditable service under this
Section and who reenters service under this Article (or as an
employee of a department under Article 16) other than as a
temporary employee thereby forfeits that age enhancement and
creditable service and is entitled to a refund of the
contributions made pursuant to this Section.
    (f) The System shall determine the amount of the increase
in the present value of future benefits resulting from the
granting of early retirement incentives under this Section and
shall report that amount to the Governor and the Commission on
Government Forecasting and Accountability on or after the
effective date of this amendatory Act of the 93rd General
Assembly and on or before November 15, 2004. Beginning with
State fiscal year 2008, the The increase reported under this
subsection (f) shall not be included in the calculation of the
required State contribution under Section 14-131.
    (g) In addition to the contributions otherwise required
under this Article, the State shall appropriate and pay to the
System (1) an amount equal to $70,000,000 in State fiscal years
2004 and 2005 and (2) in each of State fiscal years 2006
through 2015, a level dollar-payment based upon the increase in
the present value of future benefits provided by the early
retirement incentives provided under this Section amortized at
8.5% interest.
    (h) The Commission on Government Forecasting and
Accountability (i) shall hold one or more hearings on or before
the last session day during the fall veto session of 2004 to
review recommendations relating to funding of early retirement
incentives under this Section and (ii) shall file its report
with the General Assembly on or before December 31, 2004 making
its recommendations relating to funding of early retirement
incentives under this Section; the Commission's report may
contain both majority recommendations and minority
recommendations. The System shall recalculate and recertify to
the Governor by January 31, 2005 the amount of the required
State contribution to the System for State fiscal year 2005
with respect to those incentives. The Pension Laws Commission
(or its successor, the Commission on Government Forecasting and
Accountability) shall determine and report to the General
Assembly, on or before January 1, 2004 and annually thereafter
through the year 2013, its estimate of (1) the annual amount of
payroll savings likely to be realized by the State as a result
of the early retirement of persons receiving early retirement
incentives under this Section and (2) the net annual savings or
cost to the State from the program of early retirement
incentives created under this Section.
    The System, the Department of Central Management Services,
the Governor's Office of Management and Budget (formerly Bureau
of the Budget), and all other departments shall provide to the
Commission any assistance that the Commission may request with
respect to its reports under this Section. The Commission may
require departments to provide it with any information that it
deems necessary or useful with respect to its reports under
this Section, including without limitation information about
(1) the final earnings of former department employees who
elected to receive benefits under this Section, (2) the
earnings of current department employees holding the positions
vacated by persons who elected to receive benefits under this
Section, and (3) positions vacated by persons who elected to
receive benefits under this Section that have not yet been
refilled.
    (i) The changes made to this Section by this amendatory Act
of the 92nd General Assembly do not apply to persons who
retired under this Section on or before May 1, 1992.
(Source: P.A. 92-566, eff. 6-25-02; 93-632, eff. 2-1-04;
93-839, eff. 7-30-04; 93-1067, eff. 1-15-05.)
 
    (40 ILCS 5/14-110)  (from Ch. 108 1/2, par. 14-110)
    Sec. 14-110. Alternative retirement annuity.
    (a) Any member who has withdrawn from service with not less
than 20 years of eligible creditable service and has attained
age 55, and any member who has withdrawn from service with not
less than 25 years of eligible creditable service and has
attained age 50, regardless of whether the attainment of either
of the specified ages occurs while the member is still in
service, shall be entitled to receive at the option of the
member, in lieu of the regular or minimum retirement annuity, a
retirement annuity computed as follows:
        (i) for periods of service as a noncovered employee: if
    retirement occurs on or after January 1, 2001, 3% of final
    average compensation for each year of creditable service;
    if retirement occurs before January 1, 2001, 2 1/4% of
    final average compensation for each of the first 10 years
    of creditable service, 2 1/2% for each year above 10 years
    to and including 20 years of creditable service, and 2 3/4%
    for each year of creditable service above 20 years; and
        (ii) for periods of eligible creditable service as a
    covered employee: if retirement occurs on or after January
    1, 2001, 2.5% of final average compensation for each year
    of creditable service; if retirement occurs before January
    1, 2001, 1.67% of final average compensation for each of
    the first 10 years of such service, 1.90% for each of the
    next 10 years of such service, 2.10% for each year of such
    service in excess of 20 but not exceeding 30, and 2.30% for
    each year in excess of 30.
    Such annuity shall be subject to a maximum of 75% of final
average compensation if retirement occurs before January 1,
2001 or to a maximum of 80% of final average compensation if
retirement occurs on or after January 1, 2001.
    These rates shall not be applicable to any service
performed by a member as a covered employee which is not
eligible creditable service. Service as a covered employee
which is not eligible creditable service shall be subject to
the rates and provisions of Section 14-108.
    (b) For the purpose of this Section, "eligible creditable
service" means creditable service resulting from service in one
or more of the following positions:
        (1) State policeman;
        (2) fire fighter in the fire protection service of a
    department;
        (3) air pilot;
        (4) special agent;
        (5) investigator for the Secretary of State;
        (6) conservation police officer;
        (7) investigator for the Department of Revenue;
        (8) security employee of the Department of Human
    Services;
        (9) Central Management Services security police
    officer;
        (10) security employee of the Department of
    Corrections;
        (11) dangerous drugs investigator;
        (12) investigator for the Department of State Police;
        (13) investigator for the Office of the Attorney
    General;
        (14) controlled substance inspector;
        (15) investigator for the Office of the State's
    Attorneys Appellate Prosecutor;
        (16) Commerce Commission police officer;
        (17) arson investigator;
        (18) State highway maintenance worker.
    A person employed in one of the positions specified in this
subsection is entitled to eligible creditable service for
service credit earned under this Article while undergoing the
basic police training course approved by the Illinois Law
Enforcement Training Standards Board, if completion of that
training is required of persons serving in that position. For
the purposes of this Code, service during the required basic
police training course shall be deemed performance of the
duties of the specified position, even though the person is not
a sworn peace officer at the time of the training.
    (c) For the purposes of this Section:
        (1) The term "state policeman" includes any title or
    position in the Department of State Police that is held by
    an individual employed under the State Police Act.
        (2) The term "fire fighter in the fire protection
    service of a department" includes all officers in such fire
    protection service including fire chiefs and assistant
    fire chiefs.
        (3) The term "air pilot" includes any employee whose
    official job description on file in the Department of
    Central Management Services, or in the department by which
    he is employed if that department is not covered by the
    Personnel Code, states that his principal duty is the
    operation of aircraft, and who possesses a pilot's license;
    however, the change in this definition made by this
    amendatory Act of 1983 shall not operate to exclude any
    noncovered employee who was an "air pilot" for the purposes
    of this Section on January 1, 1984.
        (4) The term "special agent" means any person who by
    reason of employment by the Division of Narcotic Control,
    the Bureau of Investigation or, after July 1, 1977, the
    Division of Criminal Investigation, the Division of
    Internal Investigation, the Division of Operations, or any
    other Division or organizational entity in the Department
    of State Police is vested by law with duties to maintain
    public order, investigate violations of the criminal law of
    this State, enforce the laws of this State, make arrests
    and recover property. The term "special agent" includes any
    title or position in the Department of State Police that is
    held by an individual employed under the State Police Act.
        (5) The term "investigator for the Secretary of State"
    means any person employed by the Office of the Secretary of
    State and vested with such investigative duties as render
    him ineligible for coverage under the Social Security Act
    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
    218(l)(1) of that Act.
        A person who became employed as an investigator for the
    Secretary of State between January 1, 1967 and December 31,
    1975, and who has served as such until attainment of age
    60, either continuously or with a single break in service
    of not more than 3 years duration, which break terminated
    before January 1, 1976, shall be entitled to have his
    retirement annuity calculated in accordance with
    subsection (a), notwithstanding that he has less than 20
    years of credit for such service.
        (6) The term "Conservation Police Officer" means any
    person employed by the Division of Law Enforcement of the
    Department of Natural Resources and vested with such law
    enforcement duties as render him ineligible for coverage
    under the Social Security Act by reason of Sections
    218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The
    term "Conservation Police Officer" includes the positions
    of Chief Conservation Police Administrator and Assistant
    Conservation Police Administrator.
        (7) The term "investigator for the Department of
    Revenue" means any person employed by the Department of
    Revenue and vested with such investigative duties as render
    him ineligible for coverage under the Social Security Act
    by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
    218(l)(1) of that Act.
        (8) The term "security employee of the Department of
    Human Services" means any person employed by the Department
    of Human Services who (i) is employed at the Chester Mental
    Health Center and has daily contact with the residents
    thereof, (ii) is employed within a security unit at a
    facility operated by the Department and has daily contact
    with the residents of the security unit, (iii) is employed
    at a facility operated by the Department that includes a
    security unit and is regularly scheduled to work at least
    50% of his or her working hours within that security unit,
    or (iv) is a mental health police officer. "Mental health
    police officer" means any person employed by the Department
    of Human Services in a position pertaining to the
    Department's mental health and developmental disabilities
    functions who is vested with such law enforcement duties as
    render the person ineligible for coverage under the Social
    Security Act by reason of Sections 218(d)(5)(A),
    218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
    means that portion of a facility that is devoted to the
    care, containment, and treatment of persons committed to
    the Department of Human Services as sexually violent
    persons, persons unfit to stand trial, or persons not
    guilty by reason of insanity. With respect to past
    employment, references to the Department of Human Services
    include its predecessor, the Department of Mental Health
    and Developmental Disabilities.
        The changes made to this subdivision (c)(8) by Public
    Act 92-14 apply to persons who retire on or after January
    1, 2001, notwithstanding Section 1-103.1.
        (9) "Central Management Services security police
    officer" means any person employed by the Department of
    Central Management Services who is vested with such law
    enforcement duties as render him ineligible for coverage
    under the Social Security Act by reason of Sections
    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
        (10) For a member who first became an employee under
    this Article before July 1, 2005, the The term "security
    employee of the Department of Corrections" means any
    employee of the Department of Corrections or the former
    Department of Personnel, and any member or employee of the
    Prisoner Review Board, who has daily contact with inmates
    by working within a correctional facility or who is a
    parole officer or an employee who has direct contact with
    committed persons in the performance of his or her job
    duties. For a member who first becomes an employee under
    this Article on or after July 1, 2005, the term means an
    employee of the Department of Corrections who is any of the
    following: (i) officially headquartered at a correctional
    facility, (ii) a parole officer, (iii) a member of the
    apprehension unit, (iv) a member of the intelligence unit,
    (v) a member of the sort team, or (vi) an investigator.
        (11) The term "dangerous drugs investigator" means any
    person who is employed as such by the Department of Human
    Services.
        (12) The term "investigator for the Department of State
    Police" means a person employed by the Department of State
    Police who is vested under Section 4 of the Narcotic
    Control Division Abolition Act with such law enforcement
    powers as render him ineligible for coverage under the
    Social Security Act by reason of Sections 218(d)(5)(A),
    218(d)(8)(D) and 218(l)(1) of that Act.
        (13) "Investigator for the Office of the Attorney
    General" means any person who is employed as such by the
    Office of the Attorney General and is vested with such
    investigative duties as render him ineligible for coverage
    under the Social Security Act by reason of Sections
    218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
    the period before January 1, 1989, the term includes all
    persons who were employed as investigators by the Office of
    the Attorney General, without regard to social security
    status.
        (14) "Controlled substance inspector" means any person
    who is employed as such by the Department of Professional
    Regulation and is vested with such law enforcement duties
    as render him ineligible for coverage under the Social
    Security Act by reason of Sections 218(d)(5)(A),
    218(d)(8)(D) and 218(l)(1) of that Act. The term
    "controlled substance inspector" includes the Program
    Executive of Enforcement and the Assistant Program
    Executive of Enforcement.
        (15) The term "investigator for the Office of the
    State's Attorneys Appellate Prosecutor" means a person
    employed in that capacity on a full time basis under the
    authority of Section 7.06 of the State's Attorneys
    Appellate Prosecutor's Act.
        (16) "Commerce Commission police officer" means any
    person employed by the Illinois Commerce Commission who is
    vested with such law enforcement duties as render him
    ineligible for coverage under the Social Security Act by
    reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
    218(l)(1) of that Act.
        (17) "Arson investigator" means any person who is
    employed as such by the Office of the State Fire Marshal
    and is vested with such law enforcement duties as render
    the person ineligible for coverage under the Social
    Security Act by reason of Sections 218(d)(5)(A),
    218(d)(8)(D), and 218(l)(1) of that Act. A person who was
    employed as an arson investigator on January 1, 1995 and is
    no longer in service but not yet receiving a retirement
    annuity may convert his or her creditable service for
    employment as an arson investigator into eligible
    creditable service by paying to the System the difference
    between the employee contributions actually paid for that
    service and the amounts that would have been contributed if
    the applicant were contributing at the rate applicable to
    persons with the same social security status earning
    eligible creditable service on the date of application.
        (18) The term "State highway maintenance worker" means
    a person who is either of the following:
            (i) A person employed on a full-time basis by the
        Illinois Department of Transportation in the position
        of highway maintainer, highway maintenance lead
        worker, highway maintenance lead/lead worker, heavy
        construction equipment operator, power shovel
        operator, or bridge mechanic; and whose principal
        responsibility is to perform, on the roadway, the
        actual maintenance necessary to keep the highways that
        form a part of the State highway system in serviceable
        condition for vehicular traffic.
            (ii) A person employed on a full-time basis by the
        Illinois State Toll Highway Authority in the position
        of equipment operator/laborer H-4, equipment
        operator/laborer H-6, welder H-4, welder H-6,
        mechanical/electrical H-4, mechanical/electrical H-6,
        water/sewer H-4, water/sewer H-6, sign maker/hanger
        H-4, sign maker/hanger H-6, roadway lighting H-4,
        roadway lighting H-6, structural H-4, structural H-6,
        painter H-4, or painter H-6; and whose principal
        responsibility is to perform, on the roadway, the
        actual maintenance necessary to keep the Authority's
        tollways in serviceable condition for vehicular
        traffic.
    (d) A security employee of the Department of Corrections,
and a security employee of the Department of Human Services who
is not a mental health police officer, shall not be eligible
for the alternative retirement annuity provided by this Section
unless he or she meets the following minimum age and service
requirements at the time of retirement:
        (i) 25 years of eligible creditable service and age 55;
    or
        (ii) beginning January 1, 1987, 25 years of eligible
    creditable service and age 54, or 24 years of eligible
    creditable service and age 55; or
        (iii) beginning January 1, 1988, 25 years of eligible
    creditable service and age 53, or 23 years of eligible
    creditable service and age 55; or
        (iv) beginning January 1, 1989, 25 years of eligible
    creditable service and age 52, or 22 years of eligible
    creditable service and age 55; or
        (v) beginning January 1, 1990, 25 years of eligible
    creditable service and age 51, or 21 years of eligible
    creditable service and age 55; or
        (vi) beginning January 1, 1991, 25 years of eligible
    creditable service and age 50, or 20 years of eligible
    creditable service and age 55.
    Persons who have service credit under Article 16 of this
Code for service as a security employee of the Department of
Corrections or the Department of Human Services in a position
requiring certification as a teacher may count such service
toward establishing their eligibility under the service
requirements of this Section; but such service may be used only
for establishing such eligibility, and not for the purpose of
increasing or calculating any benefit.
    (e) If a member enters military service while working in a
position in which eligible creditable service may be earned,
and returns to State service in the same or another such
position, and fulfills in all other respects the conditions
prescribed in this Article for credit for military service,
such military service shall be credited as eligible creditable
service for the purposes of the retirement annuity prescribed
in this Section.
    (f) For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before October 1, 1975 as a covered employee in the
position of special agent, conservation police officer, mental
health police officer, or investigator for the Secretary of
State, shall be deemed to have been service as a noncovered
employee, provided that the employee pays to the System prior
to retirement an amount equal to (1) the difference between the
employee contributions that would have been required for such
service as a noncovered employee, and the amount of employee
contributions actually paid, plus (2) if payment is made after
July 31, 1987, regular interest on the amount specified in item
(1) from the date of service to the date of payment.
    For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before January 1, 1982 as a covered employee in the
position of investigator for the Department of Revenue shall be
deemed to have been service as a noncovered employee, provided
that the employee pays to the System prior to retirement an
amount equal to (1) the difference between the employee
contributions that would have been required for such service as
a noncovered employee, and the amount of employee contributions
actually paid, plus (2) if payment is made after January 1,
1990, regular interest on the amount specified in item (1) from
the date of service to the date of payment.
    (g) A State policeman may elect, not later than January 1,
1990, to establish eligible creditable service for up to 10
years of his service as a policeman under Article 3, by filing
a written election with the Board, accompanied by payment of an
amount to be determined by the Board, equal to (i) the
difference between the amount of employee and employer
contributions transferred to the System under Section 3-110.5,
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
    Subject to the limitation in subsection (i), a State
policeman may elect, not later than July 1, 1993, to establish
eligible creditable service for up to 10 years of his service
as a member of the County Police Department under Article 9, by
filing a written election with the Board, accompanied by
payment of an amount to be determined by the Board, equal to
(i) the difference between the amount of employee and employer
contributions transferred to the System under Section 9-121.10
and the amounts that would have been contributed had those
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
    (h) Subject to the limitation in subsection (i), a State
policeman or investigator for the Secretary of State may elect
to establish eligible creditable service for up to 12 years of
his service as a policeman under Article 5, by filing a written
election with the Board on or before January 31, 1992, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 5-236, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
    Subject to the limitation in subsection (i), a State
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 10 years of service as a sheriff's
law enforcement employee under Article 7, by filing a written
election with the Board on or before January 31, 1993, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 7-139.7, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
    (i) The total amount of eligible creditable service
established by any person under subsections (g), (h), (j), (k),
and (l) of this Section shall not exceed 12 years.
    (j) Subject to the limitation in subsection (i), an
investigator for the Office of the State's Attorneys Appellate
Prosecutor or a controlled substance inspector may elect to
establish eligible creditable service for up to 10 years of his
service as a policeman under Article 3 or a sheriff's law
enforcement employee under Article 7, by filing a written
election with the Board, accompanied by payment of an amount to
be determined by the Board, equal to (1) the difference between
the amount of employee and employer contributions transferred
to the System under Section 3-110.6 or 7-139.8, and the amounts
that would have been contributed had such contributions been
made at the rates applicable to State policemen, plus (2)
interest thereon at the effective rate for each year,
compounded annually, from the date of service to the date of
payment.
    (k) Subject to the limitation in subsection (i) of this
Section, an alternative formula employee may elect to establish
eligible creditable service for periods spent as a full-time
law enforcement officer or full-time corrections officer
employed by the federal government or by a state or local
government located outside of Illinois, for which credit is not
held in any other public employee pension fund or retirement
system. To obtain this credit, the applicant must file a
written application with the Board by March 31, 1998,
accompanied by evidence of eligibility acceptable to the Board
and payment of an amount to be determined by the Board, equal
to (1) employee contributions for the credit being established,
based upon the applicant's salary on the first day as an
alternative formula employee after the employment for which
credit is being established and the rates then applicable to
alternative formula employees, plus (2) an amount determined by
the Board to be the employer's normal cost of the benefits
accrued for the credit being established, plus (3) regular
interest on the amounts in items (1) and (2) from the first day
as an alternative formula employee after the employment for
which credit is being established to the date of payment.
    (l) Subject to the limitation in subsection (i), a security
employee of the Department of Corrections may elect, not later
than July 1, 1998, to establish eligible creditable service for
up to 10 years of his or her service as a policeman under
Article 3, by filing a written election with the Board,
accompanied by payment of an amount to be determined by the
Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.5, and the amounts that would have been
contributed had such contributions been made at the rates
applicable to security employees of the Department of
Corrections, plus (ii) interest thereon at the effective rate
for each year, compounded annually, from the date of service to
the date of payment.
(Source: P.A. 91-357, eff. 7-29-99; 91-760, eff. 1-1-01; 92-14,
eff. 6-28-01; 92-257, eff. 8-6-01; 92-651, eff. 7-11-02.)
 
    (40 ILCS 5/14-131)   (from Ch. 108 1/2, par. 14-131)
    Sec. 14-131. Contributions by State.
    (a) The State shall make contributions to the System by
appropriations of amounts which, together with other employer
contributions from trust, federal, and other funds, employee
contributions, investment income, and other income, will be
sufficient to meet the cost of maintaining and administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
    For the purposes of this Section and Section 14-135.08,
references to State contributions refer only to employer
contributions and do not include employee contributions that
are picked up or otherwise paid by the State or a department on
behalf of the employee.
    (b) The Board shall determine the total amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board,
using the formula in subsection (e).
    The Board shall also determine a State contribution rate
for each fiscal year, expressed as a percentage of payroll,
based on the total required State contribution for that fiscal
year (less the amount received by the System from
appropriations under Section 8.12 of the State Finance Act and
Section 1 of the State Pension Funds Continuing Appropriation
Act, if any, for the fiscal year ending on the June 30
immediately preceding the applicable November 15 certification
deadline), the estimated payroll (including all forms of
compensation) for personal services rendered by eligible
employees, and the recommendations of the actuary.
    For the purposes of this Section and Section 14.1 of the
State Finance Act, the term "eligible employees" includes
employees who participate in the System, persons who may elect
to participate in the System but have not so elected, persons
who are serving a qualifying period that is required for
participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
    (c) Contributions shall be made by the several departments
for each pay period by warrants drawn by the State Comptroller
against their respective funds or appropriations based upon
vouchers stating the amount to be so contributed. These amounts
shall be based on the full rate certified by the Board under
Section 14-135.08 for that fiscal year. From the effective date
of this amendatory Act of the 93rd General Assembly through the
payment of the final payroll from fiscal year 2004
appropriations, the several departments shall not make
contributions for the remainder of fiscal year 2004 but shall
instead make payments as required under subsection (a-1) of
Section 14.1 of the State Finance Act. The several departments
shall resume those contributions at the commencement of fiscal
year 2005.
    (d) If an employee is paid from trust funds or federal
funds, the department or other employer shall pay employer
contributions from those funds to the System at the certified
rate, unless the terms of the trust or the federal-State
agreement preclude the use of the funds for that purpose, in
which case the required employer contributions shall be paid by
the State. From the effective date of this amendatory Act of
the 93rd General Assembly through the payment of the final
payroll from fiscal year 2004 appropriations, the department or
other employer shall not pay contributions for the remainder of
fiscal year 2004 but shall instead make payments as required
under subsection (a-1) of Section 14.1 of the State Finance
Act. The department or other employer shall resume payment of
contributions at the commencement of fiscal year 2005.
    (e) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that (i) for State
fiscal year 1998, for all purposes of this Code and any other
law of this State, the certified percentage of the applicable
employee payroll shall be 5.052% for employees earning eligible
creditable service under Section 14-110 and 6.500% for all
other employees, notwithstanding any contrary certification
made under Section 14-135.08 before the effective date of this
amendatory Act of 1997, and (ii) in the following specified
State fiscal years, the State contribution to the System shall
not be less than the following indicated percentages of the
applicable employee payroll, even if the indicated percentage
will produce a State contribution in excess of the amount
otherwise required under this subsection and subsection (a):
9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
2002; 10.6% in FY 2003; and 10.8% in FY 2004.
    Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2006 is $203,783,900.
    Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2007 is $344,164,400.
    For each of State fiscal years 2008 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 14-135.08, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
    (f) After the submission of all payments for eligible
employees from personal services line items in fiscal year 2004
have been made, the Comptroller shall provide to the System a
certification of the sum of all fiscal year 2004 expenditures
for personal services that would have been covered by payments
to the System under this Section if the provisions of this
amendatory Act of the 93rd General Assembly had not been
enacted. Upon receipt of the certification, the System shall
determine the amount due to the System based on the full rate
certified by the Board under Section 14-135.08 for fiscal year
2004 in order to meet the State's obligation under this
Section. The System shall compare this amount due to the amount
received by the System in fiscal year 2004 through payments
under this Section and under Section 6z-61 of the State Finance
Act. If the amount due is more than the amount received, the
difference shall be termed the "Fiscal Year 2004 Shortfall" for
purposes of this Section, and the Fiscal Year 2004 Shortfall
shall be satisfied under Section 1.2 of the State Pension Funds
Continuing Appropriation Act. If the amount due is less than
the amount received, the difference shall be termed the "Fiscal
Year 2004 Overpayment" for purposes of this Section, and the
Fiscal Year 2004 Overpayment shall be repaid by the System to
the Pension Contribution Fund as soon as practicable after the
certification.
(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04.)
 
    (40 ILCS 5/14-135.08)  (from Ch. 108 1/2, par. 14-135.08)
    Sec. 14-135.08. To certify required State contributions.
    (a) To certify to the Governor and to each department, on
or before November 15 of each year, the required rate for State
contributions to the System for the next State fiscal year, as
determined under subsection (b) of Section 14-131. The
certification to the Governor shall include a copy of the
actuarial recommendations upon which the rate is based.
    (b) The certification shall include an additional amount
necessary to pay all principal of and interest on those general
obligation bonds due the next fiscal year authorized by Section
7.2(a) of the General Obligation Bond Act and issued to provide
the proceeds deposited by the State with the System in July
2003, representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act. For State
fiscal year 2005, the Board shall make a supplemental
certification of the additional amount necessary to pay all
principal of and interest on those general obligation bonds due
in State fiscal years 2004 and 2005 authorized by Section
7.2(a) of the General Obligation Bond Act and issued to provide
the proceeds deposited by the State with the System in July
2003, representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act, as soon as
practical after the effective date of this amendatory Act of
the 93rd General Assembly.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System and the required
rates for State contributions to the System for State fiscal
year 2005, taking into account the amounts appropriated to and
received by the System under subsection (d) of Section 7.2 of
the General Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System and the required
rates for State contributions to the System for State fiscal
year 2006, taking into account the changes in required State
contributions made by this amendatory Act of the 94th General
Assembly.
(Source: P.A. 93-2, eff. 4-7-03; 93-839, eff. 7-30-04.)
 
    (40 ILCS 5/14-152.1 new)
    Sec. 14-152.1. Application and expiration of new benefit
increases.
    (a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly.
    (b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
    (d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
    (e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
 
    (40 ILCS 5/15-125)  (from Ch. 108 1/2, par. 15-125)
    Sec. 15-125. "Prescribed Rate of Interest; Effective Rate
of Interest":
    (1) "Prescribed rate of interest": The rate of interest to
be used in actuarial valuations and in development of actuarial
tables as determined by the board on the basis of the probable
average effective rate of interest on a long term basis.
    (2) "Effective rate of interest": The interest rate for all
or any part of a fiscal year that is determined by the board
based on factors including the system's past and expected
investment experience; historical and expected fluctuations in
the market value of investments; the desirability of minimizing
volatility in the effective rate of interest from year to year;
and the provision of reserves for anticipated losses upon
sales, redemptions, or other disposition of investments and for
variations in interest experience; except that for the purpose
of determining the accumulated normal contributions used in
calculating retirement annuities under Rule 2 of Section
15-136, the effective rate of interest shall be determined by
the State Comptroller rather than the board. The State
Comptroller shall determine the effective rate of interest to
be used for this purpose using the factors listed above, and
shall certify to the board and the Commission on Government
Forecasting and Accountability the rate to be used for this
purpose for fiscal year 2006 as soon as possible after the
effective date of this amendatory Act of the 94th General
Assembly, and for each fiscal year thereafter no later than the
September 1 immediately preceding the start of that fiscal
year.
    (3) The change made to this Section by Public Acts 90-65
and 90-511 This amendatory Act of 1997 is a clarification of
existing law.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
    Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
    (a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
    Rule 1: The retirement annuity shall be 1.67% of final rate
of earnings for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.
    Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the prescribed rate
of interest in effect at the time the retirement annuity
begins:
        (i) the normal annuity which can be provided on an
    actuarially equivalent basis, by the accumulated normal
    contributions as of the date the annuity begins;
        (ii) an annuity from employer contributions of an
    amount equal to that which can be provided on an
    actuarially equivalent basis from the accumulated normal
    contributions made by the participant under Section
    15-113.6 and Section 15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant;
    and
        (iii) the annuity that can be provided on an
    actuarially equivalent basis from the entire contribution
    made by the participant under Section 15-113.3.
    With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
    The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
    This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
    This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
    Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his
or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or
more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
    Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity
for all other service shall be computed under Rule 1.
    For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
        (i) service that is performed while the person is an
    employee under subsection (h) of Section 15-107; and
        (ii) in the case of an individual who was a
    participating employee employed in the fire department of
    the University of Illinois's Champaign-Urbana campus
    immediately prior to the elimination of that fire
    department and who immediately after the elimination of
    that fire department transferred to another job with the
    University of Illinois, service performed as an employee of
    the University of Illinois in a position other than police
    officer or firefighter, from the date of that transfer
    until the employee's next termination of service with the
    University of Illinois.
    Rule 5: The retirement annuity of a participant who elected
early retirement under the provisions of Section 15-136.2 and
who, on or before February 16, 1995, brought administrative
proceedings pursuant to the administrative rules adopted by the
System to challenge the calculation of his or her retirement
annuity shall be the sum of the following, determined from
amounts credited to the participant in accordance with the
actuarial tables and the prescribed rate of interest in effect
at the time the retirement annuity begins:
        (i) the normal annuity which can be provided on an
    actuarially equivalent basis, by the accumulated normal
    contributions as of the date the annuity begins; and
        (ii) an annuity from employer contributions of an
    amount equal to that which can be provided on an
    actuarially equivalent basis from the accumulated normal
    contributions made by the participant under Section
    15-113.6 and Section 15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant;
    and
        (iii) an annuity which can be provided on an
    actuarially equivalent basis from the employee
    contribution for early retirement under Section 15-136.2,
    and an annuity from employer contributions of an amount
    equal to that which can be provided on an actuarially
    equivalent basis from the employee contribution for early
    retirement under Section 15-136.2.
    In no event shall a retirement annuity under this Rule 5 be
lower than the amount obtained by adding (1) the monthly amount
obtained by dividing the combined employee and employer
contributions made under Section 15-136.2 by the System's
annuity factor for the age of the participant at the beginning
of the annuity payment period and (2) the amount equal to the
participant's annuity if calculated under Rule 1, reduced under
Section 15-136(b) as if no contributions had been made under
Section 15-136.2.
    With respect to a participant who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
    The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except as
provided in clause (iii) of this Rule 5, neither an employee
nor employer contribution for early retirement under Section
15-136.2, nor any other employer contribution, shall be used in
the calculation of the amount of a retirement annuity under
this Rule 5.
    The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General Assembly
in recognition that the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. might be deemed to give some right to the
plaintiff in that case. The changes made by Section 25 of this
amendatory Act of the 91st General Assembly are a legislative
implementation of the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. with respect to that plaintiff.
    The changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
    (b) The retirement annuity provided under Rules 1 and 3
above shall be reduced by 1/2 of 1% for each month the
participant is under age 60 at the time of retirement. However,
this reduction shall not apply in the following cases:
        (1) For a disabled participant whose disability
    benefits have been discontinued because he or she has
    exhausted eligibility for disability benefits under clause
    (6) of Section 15-152;
        (2) For a participant who has at least the number of
    years of service required to retire at any age under
    subsection (a) of Section 15-135; or
        (3) For that portion of a retirement annuity which has
    been provided on account of service of the participant
    during periods when he or she performed the duties of a
    police officer or firefighter, if these duties were
    performed for at least 5 years immediately preceding the
    date the retirement annuity is to begin.
    (c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
    (d) An annuitant whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in his
or her retirement annuity as follows:
    Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, Rule 4, or Rule 5, contained in this Section,
multiplied by the number of full months which elapsed from the
date the retirement annuity payments began to January 1, 1972,
plus 0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
    The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during
the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
this Section. The change made under this subsection by P.A.
81-970 is effective January 1, 1980 and applies to each
annuitant whose status as an employee terminates before or
after that date.
    Beginning January 1, 1990, all automatic annual increases
payable under this Section shall be calculated as a percentage
of the total annuity payable at the time of the increase,
including all increases previously granted under this Article.
    The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard to
whether status as an employee terminated before that date.
    (e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987, or
the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
    (f) A participant is entitled to such additional annuity as
may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
    (g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in whole
or in part to an employer, and (2) a participant transfers
employment from such governmental unit to such employer within
6 months after the transfer of the function, and (3) the sum of
(A) the annuity payable to the participant under Rule 1, 2, or
3 of this Section (B) all proportional annuities payable to the
participant by all other retirement systems covered by Article
20, and (C) the initial primary insurance amount to which the
participant is entitled under the Social Security Act, is less
than the retirement annuity which would have been payable if
all of the participant's pension credits validated under
Section 20-109 had been validated under this system, a
supplemental annuity equal to the difference in such amounts
shall be payable to the participant.
    (h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.
    (i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 92-16, eff. 6-28-01; 93-347, eff. 7-24-03.)
 
    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
    Sec. 15-155. Employer contributions.
    (a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
    The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
    (a-1) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.
    For each of State fiscal years 2008 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
    (b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the
purpose of this Article, but funds of alumni associations,
foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
    (b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this
System pursuant to subsection (h) of Section 15-107. The rate
of contributions to be made by those municipalities shall be
determined annually by the Board on the basis of the actuarial
assumptions adopted by the Board and the recommendations of the
actuary, and shall be expressed as a percentage of salary for
each such employee. The Board shall certify the rate to the
affected municipalities as soon as may be practical. The
employer contributions required under this subsection shall be
remitted by the municipality to the System at the same time and
in the same manner as employee contributions.
    (c) Through State fiscal year 1995: The total employer
contribution shall be apportioned among the various funds of
the State and other employers, whether trust, federal, or other
funds, in accordance with actuarial procedures approved by the
Board. State of Illinois contributions for employers receiving
State appropriations for personal services shall be payable
from appropriations made to the employers or to the System. The
contributions for Class I community colleges covering earnings
other than those paid from trust and federal funds, shall be
payable solely from appropriations to the Illinois Community
College Board or the System for employer contributions.
    (d) Beginning in State fiscal year 1996, the required State
contributions to the System shall be appropriated directly to
the System and shall be payable through vouchers issued in
accordance with subsection (c) of Section 15-165, except as
provided in subsection (g).
    (e) The State Comptroller shall draw warrants payable to
the System upon proper certification by the System or by the
employer in accordance with the appropriation laws and this
Code.
    (f) Normal costs under this Section means liability for
pensions and other benefits which accrues to the System because
of the credits earned for service rendered by the participants
during the fiscal year and expenses of administering the
System, but shall not include the principal of or any
redemption premium or interest on any bonds issued by the Board
or any expenses incurred or deposits required in connection
therewith.
    (g) If the amount of a participant's earnings for any
academic year used to determine the final rate of earnings
exceeds the amount of his or her earnings with the same
employer for the previous academic year by more than 6%, the
participant's employer shall pay to the System, in addition to
all other payments required under this Section and in
accordance with guidelines established by the System, the
present value of the increase in benefits resulting from the
portion of the increase in earnings that is in excess of 6%.
This present value shall be computed by the System on the basis
of the actuarial assumptions and tables used in the most recent
actuarial valuation of the System that is available at the time
of the computation. The employer contributions required under
this subsection (g) shall be paid in the form of a lump sum
within 30 days after receipt of the bill after the participant
begins receiving benefits under this Article.
    The provisions of this subsection (g) do not apply to
earnings increases paid to participants under contracts or
collective bargaining agreements entered into, amended, or
renewed before the effective date of this amendatory Act of the
94th General Assembly.
(Source: P.A. 93-2, eff. 4-7-03.)
 
    (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
    Sec. 15-165. To certify amounts and submit vouchers.
    (a) The Board shall certify to the Governor on or before
November 15 of each year the appropriation required from State
funds for the purposes of this System for the following fiscal
year. The certification shall include a copy of the actuarial
recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
    (b) The Board shall certify to the State Comptroller or
employer, as the case may be, from time to time, by its
president and secretary, with its seal attached, the amounts
payable to the System from the various funds.
    (c) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month the Board shall
submit vouchers for payment of State contributions to the
System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a). From the effective date of this amendatory Act of the 93rd
General Assembly through June 30, 2004, the Board shall not
submit vouchers for the remainder of fiscal year 2004 in excess
of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (b) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
    If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this Section, the difference
shall be paid from the General Revenue Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
    (d) So long as the payments received are the full amount
lawfully vouchered under this Section, payments received by the
System under this Section shall be applied first toward the
employer contribution to the self-managed plan established
under Section 15-158.2. Payments shall be applied second toward
the employer's portion of the normal costs of the System, as
defined in subsection (f) of Section 15-155. The balance shall
be applied toward the unfunded actuarial liabilities of the
System.
    (e) In the event that the System does not receive, as a
result of legislative enactment or otherwise, payments
sufficient to fully fund the employer contribution to the
self-managed plan established under Section 15-158.2 and to
fully fund that portion of the employer's portion of the normal
costs of the System, as calculated in accordance with Section
15-155(a-1), then any payments received shall be applied
proportionately to the optional retirement program established
under Section 15-158.2 and to the employer's portion of the
normal costs of the System, as calculated in accordance with
Section 15-155(a-1).
(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04.)
 
    (40 ILCS 5/15-198 new)
    Sec. 15-198. Application and expiration of new benefit
increases.
    (a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly.
    (b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
    (d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
    (e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
 
    (40 ILCS 5/16-128)  (from Ch. 108 1/2, par. 16-128)
    Sec. 16-128. Creditable service - required contributions.
    (a) In order to receive the creditable service specified
under subsection (b) of Section 16-127, a member is required to
make the following contributions: (i) an amount equal to the
contributions which would have been required had such service
been rendered as a member under this System; (ii) for military
service not immediately following employment and for service
established under subdivision (b)(10) of Section 16-127, an
amount determined by the Board to be equal to the employer's
normal cost of the benefits accrued for such service; and (iii)
interest from the date the contributions would have been due
(or, in the case of a person establishing credit for military
service under subdivision (b)(3) of Section 16-127, the date of
first membership in the System, if that date is later) to the
date of payment, at the following rate of interest, compounded
annually: for periods prior to July 1, 1965, regular interest;
from July 1, 1965 to June 30, 1977, 4% per year; on and after
July 1, 1977, regular interest.
    (b) In order to receive creditable service under paragraph
(2) of subsection (b) of Section 16-127 for those who were not
members on June 30, 1963, the minimum required contribution
shall be $420 per year of service together with interest at 4%
per year compounded annually from July 1, preceding the date of
membership until June 30, 1977 and at regular interest
compounded annually thereafter to the date of payment.
    (c) In determining the contribution required in order to
receive creditable service under paragraph (3) of subsection
(b) of Section 16-127, the salary rate for the remainder of the
school term in which a member enters military service shall be
assumed to be equal to the member's salary rate at the time of
entering military service. However, for military service not
immediately following employment, the salary rate on the last
date as a participating teacher prior to such military service,
or on the first date as a participating teacher after such
military service, whichever is greater, shall be assumed to be
equal to the member's salary rate at the time of entering
military service. For each school term thereafter, the member's
salary rate shall be assumed to be 5% higher than the salary
rate in the previous school term.
    (d) In determining the contribution required in order to
receive creditable service under paragraph (5) of subsection
(b) of Section 16-127, a member's salary rate during the period
for which credit is being established shall be assumed to be
equal to the member's last salary rate immediately preceding
that period.
    (d-5) For each year of service credit to be established
under subsection (b-1) of Section 16-127, a member is required
to contribute to the System (i) 16.5% of the annual salary rate
during the first year of full-time employment as a teacher
under this Article following the private school service, plus
(ii) interest thereon from the date of first full-time
employment as a teacher under this Article following the
private school service to the date of payment, compounded
annually, at the rate of 8.5% per year for periods before the
effective date of this amendatory Act of the 92nd General
Assembly, and for subsequent periods at a rate equal to the
System's actuarially assumed rate of return on investments.
    (d-10) For service credit established under paragraph (6)
of subsection (b) of Section 16-127 for days granted by an
employer in excess of the member's normal annual sick leave
allotment, the employer is required to pay the normal cost of
benefits based upon such service credit. This subsection (d-10)
does not apply to sick leave granted to teachers under
contracts or collective bargaining agreements entered into,
amended, or renewed before the effective date of this
amendatory Act of the 94th General Assembly.
    (e) The contributions required under this Section may be
made from the date the statement for such creditable service is
issued until retirement date. All such required contributions
must be made before any retirement annuity is granted.
(Source: P.A. 92-867, eff. 1-3-03.)
 
    (40 ILCS 5/16-133)  (from Ch. 108 1/2, par. 16-133)
    Sec. 16-133. Retirement annuity; amount.
    (a) The amount of the retirement annuity shall be (i) in
the case of a person who first became a teacher under this
Article before July 1, 2005, the larger of the amounts
determined under paragraphs (A) and (B) below, or (ii) in the
case of a person who first becomes a teacher under this Article
on or after July 1, 2005, the amount determined under the
applicable provisions of paragraph (B):
        (A) An amount consisting of the sum of the following:
            (1) An amount that can be provided on an
        actuarially equivalent basis by the member's
        accumulated contributions at the time of retirement;
        and
            (2) The sum of (i) the amount that can be provided
        on an actuarially equivalent basis by the member's
        accumulated contributions representing service prior
        to July 1, 1947, and (ii) the amount that can be
        provided on an actuarially equivalent basis by the
        amount obtained by multiplying 1.4 times the member's
        accumulated contributions covering service subsequent
        to June 30, 1947; and
            (3) If there is prior service, 2 times the amount
        that would have been determined under subparagraph (2)
        of paragraph (A) above on account of contributions
        which would have been made during the period of prior
        service creditable to the member had the System been in
        operation and had the member made contributions at the
        contribution rate in effect prior to July 1, 1947.
        This paragraph (A) does not apply to a person who first
    becomes a teacher under this Article on or after July 1,
    2005.
        (B) An amount consisting of the greater of the
    following:
            (1) For creditable service earned before July 1,
        1998 that has not been augmented under Section
        16-129.1: 1.67% of final average salary for each of the
        first 10 years of creditable service, 1.90% of final
        average salary for each year in excess of 10 but not
        exceeding 20, 2.10% of final average salary for each
        year in excess of 20 but not exceeding 30, and 2.30% of
        final average salary for each year in excess of 30; and
            For creditable service earned on or after July 1,
        1998 by a member who has at least 24 years of
        creditable service on July 1, 1998 and who does not
        elect to augment service under Section 16-129.1: 2.2%
        of final average salary for each year of creditable
        service earned on or after July 1, 1998 but before the
        member reaches a total of 30 years of creditable
        service and 2.3% of final average salary for each year
        of creditable service earned on or after July 1, 1998
        and after the member reaches a total of 30 years of
        creditable service; and
            For all other creditable service: 2.2% of final
        average salary for each year of creditable service; or
            (2) 1.5% of final average salary for each year of
        creditable service plus the sum $7.50 for each of the
        first 20 years of creditable service.
    The amount of the retirement annuity determined under this
    paragraph (B) shall be reduced by 1/2 of 1% for each month
    that the member is less than age 60 at the time the
    retirement annuity begins. However, this reduction shall
    not apply (i) if the member has at least 35 years of
    creditable service, or (ii) if the member retires on
    account of disability under Section 16-149.2 of this
    Article with at least 20 years of creditable service, or
    (iii) if the member (1) has earned during the period
    immediately preceding the last day of service at least one
    year of contributing creditable service as an employee of a
    department as defined in Section 14-103.04, (2) has earned
    at least 5 years of contributing creditable service as an
    employee of a department as defined in Section 14-103.04,
    (3) retires on or after January 1, 2001, and (4) retires
    having attained an age which, when added to the number of
    years of his or her total creditable service, equals at
    least 85. Portions of years shall be counted as decimal
    equivalents.
    (b) For purposes of this Section, final average salary
shall be the average salary for the highest 4 consecutive years
within the last 10 years of creditable service as determined
under rules of the board. The minimum final average salary
shall be considered to be $2,400 per year.
    In the determination of final average salary for members
other than elected officials and their appointees when such
appointees are allowed by statute, that part of a member's
salary for any year beginning after June 30, 1979 which exceeds
the member's annual full-time salary rate with the same
employer for the preceding year by more than 20% shall be
excluded. The exclusion shall not apply in any year in which
the member's creditable earnings are less than 50% of the
preceding year's mean salary for downstate teachers as
determined by the survey of school district salaries provided
in Section 2-3.103 of the School Code.
    (c) In determining the amount of the retirement annuity
under paragraph (B) of this Section, a fractional year shall be
granted proportional credit.
    (d) The retirement annuity determined under paragraph (B)
of this Section shall be available only to members who render
teaching service after July 1, 1947 for which member
contributions are required, and to annuitants who re-enter
under the provisions of Section 16-150.
    (e) The maximum retirement annuity provided under
paragraph (B) of this Section shall be 75% of final average
salary.
    (f) A member retiring after the effective date of this
amendatory Act of 1998 shall receive a pension equal to 75% of
final average salary if the member is qualified to receive a
retirement annuity equal to at least 74.6% of final average
salary under this Article or as proportional annuities under
Article 20 of this Code.
(Source: P.A. 90-582, eff. 5-27-98; 91-17, eff. 6-4-99; 91-887,
eff. 7-6-00; 91-927, eff. 12-14-00.)
 
    (40 ILCS 5/16-133.2)  (from Ch. 108 1/2, par. 16-133.2)
    Sec. 16-133.2. Early retirement without discount.
    (a) A member retiring after June 1, 1980 and on or before
June 30, 2005 (or as provided in subsection (b) of this
Section), and applying for a retirement annuity within 6 months
of the last day of teaching for which retirement contributions
were required, may elect at the time of application for a
retirement annuity, to make a one time member contribution to
the System and thereby avoid the reduction in the retirement
annuity for retirement before age 60 specified in paragraph (B)
of Section 16-133. The exercise of the election shall also
obligate the last employer to make a one time non-refundable
contribution to the System. Substitute teachers wishing to
exercise this election must teach 85 or more days in one school
term with one employer, who shall be deemed the last employer
for purposes of this Section. The last day of teaching with
that employer must be within 6 months of the date of
application for retirement. All substitute teaching credit
applied toward the required 85 days must be earned after June
30, 1990.
    The one time member and employer contributions shall be a
percentage of the retiring member's highest annual salary rate
used in the determination of the average salary for retirement
annuity purposes. However, when determining the one-time
member and employer contributions, that part of a member's
salary with the same employer which exceeds the annual salary
rate for the preceding year by more than 20% shall be excluded.
The member contribution shall be at the rate of 7% for the
lesser of the following 2 periods: (1) for each year that the
member is less than age 60; or (2) for each year that the
member's creditable service is less than 35 years. If a member
is at least age 55 and has at least 34 years of creditable
service, no member or employer contribution for the early
retirement option shall be required. The employer contribution
shall be at the rate of 20% for each year the member is under
age 60.
    Upon receipt of the application and election, the System
shall determine the one time employee and employer
contributions required. The member contribution shall be
credited to the individual account of the member and the
employer contribution shall be credited to the Benefit Trust
Reserve. The provisions of this subsection (a) providing for
the avoidance of the reduction in retirement annuity Section
shall not be applicable until the member's contribution, if
any, has been received by the System; however, the date such
contributions are received shall not be considered in
determining the effective date of retirement.
    The number of members working for a single employer who may
retire under this subsection or subsection (b) Section in any
year may be limited at the option of the employer to a
specified percentage of those eligible, not less than 30%, with
the right to participate to be allocated among those applying
on the basis of seniority in the service of the employer.
    (b) The provisions of subsection (a) of this Section shall
remain in effect for a member retiring after June 30, 2005 and
on or before July 1, 2007, provided that the member satisfies
both of the following requirements:
        (1) the member notified his or her employer of intent
    to retire under this Article on or before the effective
    date of this amendatory Act of the 94th General Assembly
    under the terms of a contract or collective bargaining
    agreement entered into, amended, or renewed with the
    employer on or before the effective date of this amendatory
    Act of the 94th General Assembly; and
        (2) the effective date of the member's retirement is on
    or before July 1, 2007.
    The member's employer must give evidence of the member's
notification by providing to the System:
        (i) a copy of the member's notification to the employer
    or the record of that notification;
        (ii) an affidavit signed by the member and the
    employer, verifying the notification; and
        (iii) any additional documentation that the System may
    require.
    (c) Except as otherwise provided in subsection (b), and
subject to the provisions of Section 16-176, a member retiring
on or after July 1, 2005, and applying for a retirement annuity
within 6 months of the last day of teaching for which
retirement contributions were required, may elect at the time
of application for a retirement annuity, to make a one-time
member contribution to the System and thereby avoid the
reduction in the retirement annuity for retirement before age
60 specified in paragraph (B) of Section 16-133. The exercise
of the election shall also obligate the last employer to make a
one-time nonrefundable contribution to the System. Substitute
teachers wishing to exercise this election must teach 85 or
more days in one school term with one employer, who shall be
deemed the last employer for purposes of this Section. The last
day of teaching with that employer must be within 6 months of
the date of application for retirement. All substitute teaching
credit applied toward the required 85 days must be earned after
June 30, 1990.
    The one-time member and employer contributions shall be a
percentage of the retiring member's highest annual salary rate
used in the determination of the average salary for retirement
annuity purposes. However, when determining the one-time
member and employer contributions, that part of a member's
salary with the same employer which exceeds the annual salary
rate for the preceding year by more than 20% shall be excluded.
The member contribution shall be at the rate of 11.5% for the
lesser of the following 2 periods: (1) for each year that the
member is less than age 60; or (2) for each year that the
member's creditable service is less than 35 years. The employer
contribution shall be at the rate of 23.5% for each year the
member is under age 60.
    Upon receipt of the application and election, the System
shall determine the one-time employee and employer
contributions required. The member contribution shall be
credited to the individual account of the member and the
employer contribution shall be credited to the Benefit Trust
Reserve. The avoidance of the reduction in retirement annuity
provided under this subsection (c) is not applicable until the
member's contribution, if any, has been received by the System;
however, the date that contribution is received shall not be
considered in determining the effective date of retirement.
    The number of members working for a single employer who may
retire under this subsection (c) in any year may be limited at
the option of the employer to a specified percentage of those
eligible, not less than 10%, with the right to participate to
be allocated among those applying on the basis of seniority in
the service of the employer.
(Source: P.A. 93-469, eff. 8-8-03.)
 
    (40 ILCS 5/16-133.3)  (from Ch. 108 1/2, par. 16-133.3)
    Sec. 16-133.3. Early retirement incentives for State
employees.
    (a) To be eligible for the benefits provided in this
Section, a person must:
        (1) be a member of this System who, on any day during
    June, 2002, is (i) in active payroll status as a full-time
    teacher employed by a department and an active contributor
    to this System with respect to that employment, or (ii) on
    layoff status from such a position with a right of
    re-employment or recall to service, or (iii) receiving a
    disability benefit under Section 16-149 or 16-149.1, but
    only if the member has not been receiving that benefit for
    a continuous period of more than 2 years as of the date of
    application;
        (2) not have received any retirement annuity under this
    Article beginning earlier than August 1, 2002;
        (3) file with the Board on or before December 31, 2002
    a written application requesting the benefits provided in
    this Section;
        (4) terminate employment under this Article no later
    than December 31, 2002 (or the date established under
    subsection (d), if applicable);
        (5) by the date of termination of service, have at
    least 8 years of creditable service under this Article,
    without the use of any creditable service established under
    this Section;
        (6) by the date of termination of service, have at
    least 5 years of service credit earned while participating
    in the System as a teacher employed by a department; and
        (7) not receive any early retirement benefit under
    Section 14-108.3 of this Code.
    For the purposes of this Section, "department" means a
department as defined in Section 14-103.04 that employs a
teacher as defined in this Article.
    (b) An eligible person may establish up to 5 years of
creditable service under this Article by making the
contributions specified in subsection (c). In addition, for
each period of creditable service established under this
Section, a person's age at retirement shall be deemed to be
enhanced by an equivalent period.
    The creditable service established under this Section may
be used for all purposes under this Article and the Retirement
Systems Reciprocal Act, except for the computation of final
average salary, the determination of salary or compensation
under this Article or any other Article of this Code, or the
determination of eligibility for or the computation of benefits
under Section 16-133.2.
    The age enhancement established under this Section may be
used for all purposes under this Article (including calculation
of a proportionate annuity payable by this System under the
Retirement Systems Reciprocal Act), except for purposes of a
retirement annuity under Section 16-133(a)(A), a reversionary
annuity under Section 16-136, the required distributions under
Section 16-142.3, and the determination of eligibility for or
the computation of benefits under Section 16-133.2. Age
enhancement established under this Section may be used in
determining benefits payable under Article 14 of this Code
under the Retirement Systems Reciprocal Act (subject to the
limitations on the use of age enhancement provided in Section
14-108.3); age enhancement established under this Section
shall not be used in determining benefits payable under other
Articles of this Code under the Retirement Systems Reciprocal
Act.
    (c) For all creditable service established under this
Section, a person must pay to the System an employee
contribution to be determined by the System, equal to 9.0% of
the member's highest annual salary rate that would be used in
the determination of the average salary for retirement annuity
purposes if the member retired immediately after withdrawal,
for each year of creditable service established under this
Section.
    If the member receives a lump sum payment for accumulated
vacation, sick leave, and personal leave upon withdrawal from
service, and the net amount of that lump sum payment is at
least as great as the amount of the contribution required under
this Section, the entire contribution must be paid by the
employee by payroll deduction. If there is no such lump sum
payment, or if it is less than the contribution required under
this Section, the member shall make an initial payment by
payroll deduction, equal to the net amount of the lump sum
payment for accumulated vacation, sick leave, and personal
leave, and have the remaining amount due treated as a reduction
from the retirement annuity in 24 equal monthly installments
beginning in the month in which the retirement annuity takes
effect. The required contribution may be paid as a pre-tax
deduction from earnings.
    (d) In order to ensure that the efficient operation of
State government is not jeopardized by the simultaneous
retirement of large numbers of key personnel, the director or
other head of a department may, for key employees of that
department, extend the December 31, 2002 deadline for
terminating employment under this Article established in
subdivision (a)(4) of this Section to a date not later than
April 30, 2003 by so notifying the System in writing by
December 31, 2002.
    (e) A person who has received any age enhancement or
creditable service under this Section and who reenters
contributing service under this Article or Article 14 shall
thereby forfeit that age enhancement and creditable service,
and become entitled to a refund of the contributions made
pursuant to this Section.
    (f) The System shall determine the amount of the increase
in the present value of future benefits resulting from the
granting of early retirement incentives under this Section and
shall report that amount to the Governor and the Commission on
Government Forecasting and Accountability on or after the
effective date of this amendatory Act of the 93rd General
Assembly and on or before November 15, 2004. Beginning with
State fiscal year 2008, the The increase in liability reported
under this subsection (f) shall not be included in the
calculation of the required State contribution under Section
16-158.
    (g) In addition to the contributions otherwise required
under this Article, the State shall appropriate and pay to the
System (1) an amount equal to $1,000,000 in State fiscal year
2004 and (2) in each of State fiscal years 2006 through 2015, a
level dollar-payment based upon the increase in the present
value of future benefits provided by the early retirement
incentives provided under this Section amortized at 8.5%
interest.
    (h) The Pension Laws Commission (or its successor, the
Commission on Government Forecasting and Accountability) shall
determine and report to the General Assembly, on or before
January 1, 2004 and annually thereafter through the year 2013,
its estimate of (1) the annual amount of payroll savings likely
to be realized by the State as a result of the early retirement
of persons receiving early retirement incentives under this
Section and (2) the net annual savings or cost to the State
from the program of early retirement incentives created under
this Section.
    The System, the Department of Central Management Services,
the Governor's Office of Management and Budget (formerly Bureau
of the Budget), and all other departments shall provide to the
Commission any assistance that the Commission may request with
respect to its reports under this Section. The Commission may
require departments to provide it with any information that it
deems necessary or useful with respect to its reports under
this Section, including without limitation information about
(1) the final earnings of former department employees who
elected to receive benefits under this Section, (2) the
earnings of current department employees holding the positions
vacated by persons who elected to receive benefits under this
Section, and (3) positions vacated by persons who elected to
receive benefits under this Section that have not yet been
refilled.
    (i) The changes made to this Section by this amendatory Act
of the 92nd General Assembly do not apply to persons who
retired under this Section on or before May 1, 1992.
(Source: P.A. 92-566, eff. 6-25-02; 93-632, eff. 2-1-04;
93-839, eff. 7-30-04; 93-1067, eff. 1-15-05.)
 
    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
    Sec. 16-152. Contributions by members.
    (a) Each member shall make contributions for membership
service to this System as follows:
        (1) Effective July 1, 1998, contributions of 7.50% of
    salary towards the cost of the retirement annuity. Such
    contributions shall be deemed "normal contributions".
        (2) Effective July 1, 1969, contributions of 1/2 of 1%
    of salary toward the cost of the automatic annual increase
    in retirement annuity provided under Section 16-133.1.
        (3) Effective July 24, 1959, contributions of 1% of
    salary towards the cost of survivor benefits. Such
    contributions shall not be credited to the individual
    account of the member and shall not be subject to refund
    except as provided under Section 16-143.2.
        (4) Effective July 1, 2005, contributions of 0.40% of
    salary toward the cost of the early retirement without
    discount option provided under Section 16-133.2. This
    contribution shall cease upon termination of the early
    retirement without discount option as provided in Section
    16-176.
    (b) The minimum required contribution for any year of
full-time teaching service shall be $192.
    (c) Contributions shall not be required of any annuitant
receiving a retirement annuity who is given employment as
permitted under Section 16-118 or 16-150.1.
    (d) A person who (i) was a member before July 1, 1998, (ii)
retires with more than 34 years of creditable service, and
(iii) does not elect to qualify for the augmented rate under
Section 16-129.1 shall be entitled, at the time of retirement,
to receive a partial refund of contributions made under this
Section for service occurring after the later of June 30, 1998
or attainment of 34 years of creditable service, in an amount
equal to 1.00% of the salary upon which those contributions
were based.
    (e) A member's contributions toward the cost of early
retirement without discount made under item (a)(4) of this
Section shall not be refunded if the member has elected early
retirement without discount under Section 16-133.2 and has
begun to receive a retirement annuity under this Article
calculated in accordance with that election. Otherwise, a
member's contributions toward the cost of early retirement
without discount made under item (a)(4) of this Section shall
be refunded according to whichever one of the following
circumstances occurs first:
        (1) The contributions shall be refunded to the member,
    without interest, within 120 days after the member's
    retirement annuity commences, if the member does not elect
    early retirement without discount under Section 16-133.2.
        (2) The contributions shall be included, without
    interest, in any refund claimed by the member under Section
    16-151.
        (3) The contributions shall be refunded to the member's
    designated beneficiary (or if there is no beneficiary, to
    the member's estate), without interest, if the member dies
    without having begun to receive a retirement annuity under
    this Article.
        (4) The contributions shall be refunded to the member,
    without interest, within 120 days after the early
    retirement without discount option provided under Section
    16-133.2 is terminated under Section 16-176.
(Source: P.A. 93-320, eff. 7-23-03.)
 
    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
    Sec. 16-158. Contributions by State and other employing
units.
    (a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
    The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(b-3).
    (a-1) Annually, on or before November 15, the Board shall
certify to the Governor the amount of the required State
contribution for the coming fiscal year. The certification
shall include a copy of the actuarial recommendations upon
which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
    (b) Through State fiscal year 1995, the State contributions
shall be paid to the System in accordance with Section 18-7 of
the School Code.
    (b-1) Beginning in State fiscal year 1996, on the 15th day
of each month, or as soon thereafter as may be practicable, the
Board shall submit vouchers for payment of State contributions
to the System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a-1). From the effective date of this amendatory Act of the
93rd General Assembly through June 30, 2004, the Board shall
not submit vouchers for the remainder of fiscal year 2004 in
excess of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (a) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
    If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
    (b-2) Allocations from the Common School Fund apportioned
to school districts not coming under this System shall not be
diminished or affected by the provisions of this Article.
    (b-3) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that in the
following specified State fiscal years, the State contribution
to the System shall not be less than the following indicated
percentages of the applicable employee payroll, even if the
indicated percentage will produce a State contribution in
excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary
certification made under subsection (a-1) before the effective
date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
2003; and 13.56% in FY 2004.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$534,627,700.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$738,014,500.
    For each of State fiscal years 2008 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under subsection (a-1), shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
    (c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and all
expenses in connection with the administration and operation
thereof, are obligations of the State.
    If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs based
upon that service, as determined by the System. Employer
contributions, based on salary paid to members from federal
funds, may be forwarded by the distributing agency of the State
of Illinois to the System prior to allocation, in an amount
determined in accordance with guidelines established by such
agency and the System.
    (d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be forwarded
monthly in accordance with guidelines established by the
System.
    However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
    (e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
        (1) Beginning July 1, 1998 through June 30, 1999, the
    employer contribution shall be equal to 0.3% of each
    teacher's salary.
        (2) Beginning July 1, 1999 and thereafter, the employer
    contribution shall be equal to 0.58% of each teacher's
    salary.
The school district or other employing unit may pay these
employer contributions out of any source of funding available
for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
    These employer contributions are intended to offset a
portion of the cost to the System of the increases in
retirement benefits resulting from this amendatory Act of 1998.
    Each employer of teachers is entitled to a credit against
the contributions required under this subsection (e) with
respect to salaries paid to teachers for the period January 1,
2002 through June 30, 2003, equal to the amount paid by that
employer under subsection (a-5) of Section 6.6 of the State
Employees Group Insurance Act of 1971 with respect to salaries
paid to teachers for that period.
    The additional 1% employee contribution required under
Section 16-152 by this amendatory Act of 1998 is the
responsibility of the teacher and not the teacher's employer,
unless the employer agrees, through collective bargaining or
otherwise, to make the contribution on behalf of the teacher.
    If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)
for the balance of the term of that contract. The employer and
the employee organization shall jointly certify to the System
the existence of the contractual requirement, in such form as
the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
    (f) If the amount of a teacher's salary for any school year
used to determine final average salary exceeds the amount of
his or her salary with the same employer for the previous
school year by more than 6%, the teacher's employer shall pay
to the System, in addition to all other payments required under
this Section and in accordance with guidelines established by
the System, the present value of the increase in benefits
resulting from the portion of the increase in salary that is in
excess of 6%. This present value shall be computed by the
System on the basis of the actuarial assumptions and tables
used in the most recent actuarial valuation of the System that
is available at the time of the computation. The employer
contributions required under this subsection (f) shall be paid
in the form of a lump sum within 30 days after receipt of the
bill after the teacher begins receiving benefits under this
Article.
    The provisions of this subsection (f) do not apply to
salary increases paid to teachers under contracts or collective
bargaining agreements entered into, amended, or renewed before
the effective date of this amendatory Act of the 94th General
Assembly.
(Source: P.A. 92-505, eff. 12-20-01; 93-2, eff. 4-7-03; 93-665,
eff. 3-5-04.)
 
    (40 ILCS 5/16-176)  (from Ch. 108 1/2, par. 16-176)
    Sec. 16-176. To adopt actuarial assumptions. For the 5-year
period ending June 30, 1997 and every 5 years thereafter, the
actuary, as technical advisor, shall make an actuarial
investigation into the mortality, service and compensation
experience of the members, annuitants, and beneficiaries of the
retirement system. Based upon the result of that investigation,
the board shall adopt such actuarial assumptions as it deems
appropriate.
    Beginning with the 5-year period ending June 30, 2012 and
every 5 years thereafter, the actuarial investigation required
under this Section shall include the System's experience under
the early retirement without discount option established in
Section 16-133.2, including consideration of the sufficiency
of the member and employer contributions under Section 16-133.2
and the active member contribution under Section 16-152 to
adequately fund the early retirement without discount option.
The Board shall promptly communicate the results of the
actuarial investigation to the Commission on Government
Forecasting and Accountability. Based on the actuarial
investigation, the Commission on Government Forecasting and
Accountability shall, no later than February 1 of the next
year, recommend to the General Assembly any proportional
adjustment in the amounts of the member and employer
contributions under Section 16-133.2 that it deems necessary.
If the General Assembly fails to adjust the member and employer
contributions under Section 16-133.2 in response to the
Commission's recommendations, then the early retirement
without discount option under Section 16-133.2 is terminated
and shall cease to be available at the end of the fiscal year
in which the Commission made its recommendation to the General
Assembly.
(Source: P.A. 89-136, eff. 7-14-95.)
 
    (40 ILCS 5/16-203 new)
    Sec. 16-203. Application and expiration of new benefit
increases.
    (a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly.
    (b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
    (d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
    (e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
 
    (40 ILCS 5/17-116.1)  (from Ch. 108 1/2, par. 17-116.1)
    Sec. 17-116.1. Early retirement without discount.
    (a) A member retiring after June 1, 1980 and before June
30, 1995 and within 6 months of the last day of teaching for
which retirement contributions were required, may elect at the
time of application to make a one time employee contribution to
the system and thereby avoid the early retirement reduction in
allowance specified in paragraph (4) of Section 17-116 of this
Article. The exercise of the election shall obligate the last
Employer to also make a one time non-refundable contribution to
the Fund.
    (b) Subject to authorization by the Employer as provided in
subsection (c), a member retiring on or after June 30, 1995 and
on or before June 30, 2010 2005 and within 6 months of the last
day of teaching for which retirement contributions were
required may elect at the time of application to make a
one-time employee contribution to the Fund and thereby avoid
the early retirement reduction in allowance specified in
paragraph (4) of Section 17-116. The exercise of the election
shall obligate the last Employer to also make a one-time
nonrefundable contribution to the Fund.
    (c) The benefits provided in subsection (b) are available
only to members who retire, during a specified period, from
employment with an Employer that has adopted and filed with the
Board a resolution expressly providing for the creation of an
early retirement without discount program under this Section
for that period.
    The Employer has the full discretion and authority to
determine whether an early retirement without discount program
is in its best interest and to provide such a program to its
eligible employees in accordance with this Section. The
Employer may decide to authorize such a program for one or more
of the following periods: for the period beginning July 1, 1997
and ending June 30, 1998, in which case the resolution must be
adopted by January 1, 1998; for the period beginning July 1,
1998 and ending June 30, 1999, in which case the resolution
must be adopted by March 31, 1998; for the period beginning
July 1, 1999 and ending June 30, 2000, in which case the
resolution must be adopted by March 31, 1999; for the period
beginning July 1, 2000 and ending June 30, 2001, in which case
the resolution must be adopted by March 31, 2000; for the
period beginning July 1, 2001 and ending June 30, 2002, in
which case the resolution must be adopted by March 31, 2001;
for the period beginning July 1, 2002 and ending June 30, 2003,
in which case the resolution must be adopted by March 31, 2002;
for the period beginning July 1, 2003 and ending June 30, 2004,
in which case the resolution must be adopted by March 31, 2003;
and for the period beginning July 1, 2004 and ending June 30,
2005, in which case the resolution must be adopted by March 31,
2004; for the period beginning July 1, 2005 and ending June 30,
2006, in which case the resolution must be adopted by August
31, 2005; for the period beginning July 1, 2006 and ending June
30, 2007, in which case the resolution must be adopted by June
30, 2006; for the period beginning July 1, 2007 and ending June
30, 2008, in which case the resolution must be adopted by June
30, 2007; for the period beginning July 1, 2008 and ending June
30, 2009, in which case the resolution must be adopted by June
30, 2008; and for the period beginning July 1, 2009 and ending
June 30, 2010, in which case the resolution must be adopted by
June 30, 2009. The resolution must be filed with the Board
within 10 days after it is adopted. A single resolution may
authorize an early retirement without discount program as
provided in this Section for more than one period.
    Notwithstanding Section 17-157, the Employer shall also
have full discretion and authority to determine whether to
allow its employees who withdrew from service on or after June
30, 1995 and before June 27, 1997 to participate in an early
retirement without discount program under subsection (b). An
early retirement without discount program for those who
withdrew from service on or after June 30, 1995 and before June
27, 1997 may be authorized only by a resolution of the Employer
that is adopted by January 1, 1998 and filed with the Board
within 10 days after its adoption. If such a resolution is duly
adopted and filed, a person who (i) withdrew from service with
the Employer on or after June 30, 1995 and before June 27,
1997, (ii) qualifies for early retirement without discount
under subsection (b), (iii) applies to the Fund within 90 days
after the authorizing resolution is adopted, and (iv) pays the
required employee contribution shall have his or her retirement
pension recalculated in accordance with subsection (b). The
resulting increase shall be effective retroactively to the
starting date of the retirement pension.
    (d) The one-time employee contribution shall be equal to 7%
of the retiring member's highest full-time annual salary rate
used in the determination of the average salary rate for
retirement pension, or if not full-time then the full-time
equivalent, multiplied by (1) the number of years the teacher
is under age 60, or (2) the number of years the employee's
creditable service is less than 34 years, whichever is less.
    The Employer contribution shall be 20% of such salary
multiplied by such number of years.
    (e) Upon receipt of the application and election, the Board
shall determine the one time employee and Employer
contributions. The provisions of this Section shall not be
applicable until the employee contribution, if any, has been
received by the Fund; however, the date that contribution is
received shall not be considered in determining the effective
date of retirement.
    (f) The number of employees who may retire under this
Section in any year may be limited at the option of the
Employer to a specified number percentage of those eligible,
not lower than 200, but the Employer and the collective
bargaining agent for teachers may agree upon a greater
limitation to the specified number of employees who may retire
under this Section in any year. The 30%, with the right to
participate in the early retirement without discount
authorized under this Section shall to be allocated among those
applying on the basis of seniority in the service of the
Employer or on such other basis for allocation as the Employer
and the collective bargaining agent for teachers agree, in
which case, such other basis may be employed among other
eligible employees as well.
(Source: P.A. 90-32, eff. 6-27-97; 90-448, eff. 8-16-97;
90-566, eff. 1-2-98; 91-17, eff. 6-4-99.)
 
    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
    Sec. 18-131. Financing; employer contributions.
    (a) The State of Illinois shall make contributions to this
System by appropriations of the amounts which, together with
the contributions of participants, net earnings on
investments, and other income, will meet the costs of
maintaining and administering this System on a 90% funded basis
in accordance with actuarial recommendations.
    (b) The Board shall determine the amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board and
the prescribed rate of interest, using the formula in
subsection (c).
    (c) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$29,189,400.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$35,236,800.
    For each of State fiscal years 2008 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 18-140, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(Source: P.A. 93-2, eff. 4-7-03.)
 
    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
    Sec. 18-140. To certify required State contributions and
submit vouchers.
    (a) The Board shall certify to the Governor, on or before
November 15 of each year, the amount of the required State
contribution to the System for the following fiscal year. The
certification shall include a copy of the actuarial
recommendations upon which it is based.
    On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
    On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
    (b) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month the Board shall
submit vouchers for payment of State contributions to the
System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a). From the effective date of this amendatory Act of the 93rd
General Assembly through June 30, 2004, the Board shall not
submit vouchers for the remainder of fiscal year 2004 in excess
of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (c) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
    If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this Section, the difference
shall be paid from the General Revenue Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04.)
 
    (40 ILCS 5/18-169 new)
    Sec. 18-169. Application and expiration of new benefit
increases.
    (a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly.
    (b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
    (c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
    Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
    (d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
    (e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
 
    Section 90. The State Mandates Act is amended by adding
Section 8.29 as follows:
 
    (30 ILCS 805/8.29 new)
    Sec. 8.29. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 94th General Assembly.
 
    Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.