Public Act 098-0599
 
SB0001 EnrolledLRB098 05457 JDS 35491 b


  
    AN ACT concerning public employee benefits.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
    Section 1. Legislative statement.
    At the time of passage of this amendatory Act of the 98th 
General Assembly, Illinois has both  atypically large debts and 
structural budgetary imbalances that will, unless addressed by 
the General Assembly, lead to even greater and rapidly growing 
debts and deficits. Already, Illinois has the lowest credit 
rating of any state, and it faces the prospect of future credit 
downgrades that will further increase the high cost of 
borrowing.
    The State has taken significant action to address these 
fiscal troubles, including, but not limited to, increasing the 
income tax and reducing pension benefits for future employees. 
Further, the State has enacted a series of budgets over the 
last several fiscal years that resulted in deep cuts to 
important discretionary programs that are essential to the 
people of Illinois.
    At the time of passage of this amendatory Act of the 98th 
General Assembly, the State's retirement systems have unfunded 
actuarially accrued liabilities of approximately $100 billion. 
Meanwhile, the State's annual pension contribution has 
substantially increased in recent years, and will continue to 
increase in coming years. The General Assembly recognizes that 
without significant pension reform, the unfunded liability and 
the State's pension contribution will continue to grow, and 
further burden the fiscal stability of both the State and its 
retirement systems.
    This amendatory Act of the 98th General Assembly is 
intended to address the fiscal issues facing the State and its 
retirement systems in a manner that is feasible, consistent 
with the Illinois Constitution, and advantageous to both the 
taxpayers and employees impacted by these changes. Having 
considered other alternatives that would not involve changes to 
the retirement systems, the General Assembly has determined 
that the fiscal problems facing the State and its retirement 
systems cannot be solved without making some changes to the 
structure of the retirement systems. As a result, this 
amendatory Act requires more fiscal responsibility of the 
State, while minimizing the impact on current and retired State 
employees.
    Going forward, the automatic annual increase in retirement 
annuity will be based on a participant's years of service to 
the State and inflation, which more accurately reflects changes 
in the cost of living. For participants who have yet to receive 
an annuity, a pensionable salary cap will be imposed; however, 
it will only impact future salary increases that exceed a cap. 
Those workers 45 years of age and younger will be required to 
work an additional 4 months for each year under 46, which 
results in a minimal increase in retirement age given that the 
life expectancy for a 45 year old is 87 years of age. Current 
employees will receive a 1% reduction in required employee 
contributions. With these changes, the State can adopt an 
actuarially sound funding formula that will result in the 
pension systems achieving 100% funding no later than 2044. The 
State will also make additional contributions that will 
considerably aid in reducing the unfunded actuarially accrued 
liability.
    The General Assembly finds that this amendatory Act of the 
98th General Assembly will lead to fiscal stability for the 
State and its pension systems.
 
    Section 3. The Illinois Public Labor Relations Act is 
amended by changing Sections 4 and 15 and adding Section 7.5 as 
follows:
 
    (5 ILCS 315/4)  (from Ch. 48, par. 1604)

    Sec. 4. Management Rights.    Employers shall not be 
required to bargain
over matters of inherent managerial policy, 
which shall include such areas
of discretion or policy as the 
functions of the employer, standards of
services,
its overall 
budget, the organizational structure and selection of new

employees, examination techniques
and direction of employees.  
Employers, however, shall be required to bargain
collectively 
with regard to
policy matters directly affecting wages, hours 
and terms and conditions of employment
as well as the impact 
thereon upon request by employee representatives, except as 
provided in Section 7.5.


    To preserve the rights of employers and exclusive 
representatives which
have established collective bargaining 
relationships or negotiated collective
bargaining agreements 
prior to the effective date of this Act, employers
shall be 
required to bargain collectively with regard to any matter 
concerning
wages, hours or conditions of employment about which 
they have bargained
for and agreed to in a collective 
bargaining agreement
prior to the effective date of this Act, 
except as provided in Section 7.5.


    The chief judge of the judicial circuit that employs a 
public employee who
is
a court reporter, as defined in the 
Court Reporters Act, has the authority to
hire, appoint, 
promote, evaluate, discipline, and discharge court reporters

within that judicial circuit.


    Nothing in this amendatory Act of the 94th General Assembly 
shall
be construed to intrude upon the judicial functions of 
any court. This
amendatory Act of the 94th General Assembly 
applies only to nonjudicial
administrative matters relating to 
the collective bargaining rights of court
reporters.


(Source: P.A. 94-98, eff. 7-1-05.)

 
    (5 ILCS 315/7.5 new)
    Sec. 7.5. Duty to bargain regarding pension amendments.
    (a) Notwithstanding any provision of this Act, employers 
shall not be required to bargain over matters affected by the 
changes, the impact of changes, and the implementation of 
changes made to Article 14, 15, or 16 of the Illinois Pension 
Code, or Article 1 of that Code as it applies to those 
Articles, made by this amendatory Act of the 98th General 
Assembly, or over any other provision of Article 14, 15, or 16 
of the Illinois Pension Code, or of Article 1 of that Code as 
it applies to those Articles, which are prohibited subjects of 
bargaining; nor shall the changes, the impact of changes, or 
the implementation of changes made to Article 14, 15, or 16 of 
the Illinois Pension Code, or to Article 1 of that Code as it 
applies to those Articles, by this amendatory Act of the 98th 
General Assembly or any other provision of Article 14, 15, or 
16 of the Illinois Pension Code, or of Article 1 of that Code 
as it applies to those Articles, be subject to interest 
arbitration or any award issued pursuant to interest 
arbitration.  The provisions of this Section shall not apply to 
an employment contract or collective bargaining agreement that 
is in effect on the effective date of this amendatory Act of 
the 98th General Assembly.  However, any such contract or 
agreement that is subsequently modified, amended, or renewed 
shall be subject to the provisions of this Section.  The 
provisions of this Section shall also not apply to the ability 
of an employer and employee representative to bargain 
collectively with regard to the pick up of employee 
contributions pursuant to Section 14-133.1, 15-157.1, or 
16-152.1 of the Illinois Pension Code.
    (b) Nothing in this Section, however, shall be construed as 
otherwise limiting any of the obligations and requirements 
applicable to each employer under any of the provisions of this 
Act, including, but not limited to, the requirement to bargain 
collectively with regard to policy matters directly affecting 
wages, hours and terms and conditions of employment as well as 
the impact thereon upon request by employee representatives, 
except for the matters deemed prohibited subjects of bargaining 
under subsection (a) of this Section.  Nothing in this Section 
shall further be construed as otherwise limiting any of the 
rights of employees or employee representatives under the 
provisions of this Act, except for matters deemed prohibited 
subjects of bargaining under subsection (a) of this Section. 
    (c) In case of any conflict between this Section and any 
other provisions of this Act or any other law, the provisions 
of this Section shall control. 
 


    (5 ILCS 315/15)  (from Ch. 48, par. 1615)




    Sec. 15. Act Takes Precedence. 
    (a) In case of any conflict between the
provisions of this 
Act and any other law (other than Section 5 of the State 
Employees Group Insurance Act of 1971 and other than the 
changes made to the Illinois Pension Code by Public Act 96-889 
and other than as provided in Section 7.5 this amendatory Act 
of the 96th General Assembly), executive order or 
administrative
regulation relating to wages, hours and 
conditions of employment and employment
relations, the 
provisions of this Act or any collective bargaining agreement

negotiated thereunder shall prevail and control.
Nothing in 
this Act shall be construed to replace or diminish the
rights 
of employees established by Sections 28 and 28a of the 
Metropolitan
Transit Authority Act, Sections 2.15 through 2.19 
of the Regional Transportation
Authority Act. The provisions of 
this Act are subject to Section 7.5 of this Act and Section 5 
of the State Employees Group Insurance Act of 1971. Nothing in 
this Act shall be construed to replace the necessity of 
complaints against a sworn peace officer, as defined in Section 
2(a) of the Uniform Peace Officer Disciplinary Act, from having 
a complaint supported by a sworn affidavit.


    (b) Except as provided in subsection (a) above, any 
collective bargaining
contract between a public employer and a 
labor organization executed pursuant
to this Act shall 
supersede any contrary statutes, charters, ordinances, rules

or regulations relating to wages, hours and conditions of 
employment and
employment relations adopted by the public 
employer or its agents.  Any collective
bargaining agreement 
entered into prior to the effective date of this Act
shall 
remain in full force during its duration.

    (c) It is the public policy of this State, pursuant to 
paragraphs (h)
and (i) of Section 6 of Article VII of the 
Illinois Constitution, that the
provisions of this Act are the 
exclusive exercise by the State of powers
and functions which 
might otherwise be exercised by home rule units.  Such
powers 
and functions may not be exercised concurrently, either 
directly
or indirectly, by any unit of local government, 
including any home rule
unit, except as otherwise authorized by 
this Act.

(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)

 
    Section 5. The Governor's Office of Management and Budget 
Act is amended by changing Sections 7 and  8 as follows:
 



    (20 ILCS 3005/7)  (from Ch. 127, par. 417)



    Sec. 7. 
All statements and estimates of expenditures 
submitted to the
Office in connection with the preparation of a 
State budget, and any other
estimates of expenditures, 
supporting requests for appropriations, shall be
formulated 
according to the various functions and activities for which the

respective department, office or institution of the State 
government
(including the elective officers in the executive 
department and including
the University of Illinois and the 
judicial department) is responsible.  All
such statements and 
estimates of expenditures relating to a particular
function or 
activity shall be further formulated or subject to analysis in

accordance with the following classification of objects:

    (1) Personal services

    (2) State contribution for employee group insurance

    (3) Contractual services

    (4) Travel

    (5) Commodities

    (6) Equipment

    (7) Permanent improvements

    (8) Land

    (9) Electronic Data Processing

    (10) Telecommunication services

    (11) Operation of Automotive Equipment

    (12) Contingencies

    (13) Reserve

    (14) Interest

    (15) Awards and Grants

    (16) Debt Retirement

    (17) Non-cost Charges.

    (18) State retirement contribution for annual normal cost 
    (19) State retirement contribution for unfunded accrued 
liability. 
(Source: P.A. 93-25, eff. 6-20-03.)

 



    (20 ILCS 3005/8)  (from Ch. 127, par. 418)



    Sec. 8. 
When used in connection with a State budget or 
expenditure or
estimate, items (1) through (16) in the 
classification of objects stated in
Section 7 shall have the 
meanings ascribed to those items in Sections 14
through 24.7, 
respectively, of the State Finance Act. "An Act in relation to 
State finance",
approved June 10, 1919, as amended.

    When used in connection with a State budget or expenditure 
or
estimate, items (18) and (19) in the classification of 
objects stated in
Section 7 shall have the meanings ascribed to 
those items in Sections 24.12 and 24.13, respectively, of the 
State Finance Act. 
(Source: P.A. 82-325.)

 
    Section 7. The State Finance Act is amended by changing 
Section 13 and by adding Sections 24.12 and 24.13  as follows:
 



    (30 ILCS 105/13)  (from Ch. 127, par. 149)



    Sec. 13. 
The objects and purposes for which appropriations 
are made
are classified and standardized by items as follows:

    (1) Personal services;

    (2) State contribution for employee group insurance;

    (3) Contractual services;

    (4) Travel;

    (5) Commodities;

    (6) Equipment;

    (7) Permanent improvements;

    (8) Land;

    (9) Electronic Data Processing;

    (10) Operation of automotive equipment;

    (11) Telecommunications services;

    (12) Contingencies;

    (13) Reserve;

    (14) Interest;

    (15) Awards and Grants;

    (16) Debt Retirement;

    (17) Non-Cost Charges;

    (18) State retirement contribution for annual normal cost; 
    (19) State retirement contribution for unfunded accrued 
liability; 
    (20) (18) Purchase Contract for Real Estate.

    When an appropriation is made to an officer, department, 
institution,
board, commission or other agency, or to a private 
association or
corporation, in one or more of the items above 
specified, such
appropriation shall be construed in accordance 
with the definitions and
limitations specified in this Act, 
unless the appropriation act
otherwise provides.

    An appropriation for a purpose other than one specified and 
defined
in this Act may be made only as an additional, separate 
and distinct
item, specifically stating the object and purpose 
thereof.

(Source: P.A. 84-263; 84-264.)

 
    (30 ILCS 105/24.12 new)
    Sec. 24.12. "State retirement contribution for annual 
normal cost" defined. The term "State retirement contribution 
for annual normal cost" means the portion of the total required 
State contribution to a retirement system for a fiscal year 
that represents the State's portion of the System's projected 
normal cost for that fiscal year, as determined and certified 
by the board of trustees of the retirement system in 
conformance with the applicable provisions of the Illinois 
Pension Code.
 
    (30 ILCS 105/24.13 new)
    Sec. 24.13. "State retirement contribution for unfunded 
accrued liability" defined. The term "State retirement 
contribution for unfunded accrued liability" means  the portion 
of the total required State contribution to a retirement system 
for a fiscal year that is not included in the State retirement 
contribution for annual normal cost.
 
    Section 10. The Budget Stabilization Act is amended  by 
changing Sections 20 and 25 as follows:
 
    (30 ILCS 122/20)
    Sec. 20. Pension Stabilization Fund.
    (a) The Pension Stabilization Fund is hereby created as a 
special fund in the State treasury. Moneys in the fund shall be 
used for the sole purpose of making payments to the designated  
retirement systems as provided in Section 25.

    (b) For each fiscal year through State fiscal year 2014, 
when the General Assembly's
appropriations and transfers or 
diversions as required by law
from general funds do not exceed 
99% of the
estimated general funds revenues pursuant to 
subsection (a)
of Section 10, the Comptroller shall transfer 
from the
General Revenue Fund as provided by this Section a 
total
amount equal to 0.5% of the estimated general funds 
revenues
to the Pension Stabilization Fund.
    (c) For each fiscal year through State fiscal year 2014, 
when the General Assembly's
appropriations and transfers or 
diversions as required by law
from general funds do not exceed 
98% of the
estimated general funds revenues pursuant to 
subsection (b)
of Section 10, the Comptroller shall transfer 
from the
General Revenue Fund as provided by this Section a 
total
amount equal to 1.0% of the estimated general funds 
revenues
to the Pension Stabilization Fund. 
    (c-5)  In addition to any other amounts required to be 
transferred under this Section, in State fiscal year 2016 and 
each fiscal year thereafter through State fiscal year 2045,  or 
when each of the designated retirement systems, as
defined in 
Section 25, has achieved 100% funding, whichever occurs
first,  
the State Comptroller shall order transferred and the State 
Treasurer shall transfer from the General Revenue Fund to the 
Pension Stabilization Fund an amount  equal to 10% of (1) the 
sum of the amounts certified by the designated retirement 
systems under subsection (a-5) of Section 2-134, subsection 
(a-10) of Section 14-135.08, subsection (a-10) of Section 
15-165, and subsection (a-10) of Section 16-158 of this Code 
for that fiscal year minus (2) the sum of (i) the transfer 
required under subsection (c-10) of this Section for that 
fiscal year and (ii) the sum of the required State 
contributions certified by the retirement systems under 
subsection (a) of Section 2-134, subsection (a-5) of Section 
14-135.08, subsection (a-5) of Section 15-165, and subsection 
(a-5) of Section 16-158 of this Code for that fiscal year. The 
transferred amount is intended to  represent one-tenth of the 
annual savings to the State resulting from the enactment of 
this amendatory Act of the 98th General Assembly. 
    (c-10)  In State fiscal year 2019, the State Comptroller 
shall order transferred and the State Treasurer shall transfer 
$364,000,000 from the General Revenue Fund to the Pension 
Stabilization Fund. In State fiscal year 2020 and each fiscal 
year thereafter until terminated under subsection (c-15), the 
State Comptroller shall order transferred and the State 
Treasurer shall transfer $1,000,000,000 from the General 
Revenue Fund to the Pension Stabilization Fund. 
    (c-15)  The transfers made beginning in State fiscal year 
2020  pursuant to subsection (c-10) of
this Section shall 
terminate at the end of State fiscal year
2045 or when each of 
the designated retirement systems, as
defined in Section 25, 
has achieved 100% funding, whichever occurs
first. 
    (d) The Comptroller shall transfer 1/12 of the total
amount 
to be transferred each fiscal year under this Section
into the 
Pension Stabilization Fund on the first day of each
month of 
that fiscal year or as soon thereafter as possible; except that 
the final transfer of the fiscal year shall be made as soon as 
practical after the August 31 following the end of the  fiscal 
year.
    Until State fiscal year 2015, before Before the final 
transfer for a fiscal year is made, the Comptroller shall 
reconcile the estimated general funds revenues used in 
calculating the other transfers under this Section for that 
fiscal year with the actual general funds revenues for that 
fiscal year. The
final transfer for the fiscal year shall be 
adjusted so that the
total amount transferred under this 
Section for that fiscal year is equal to the percentage 
specified in subsection
(b) or (c) of this Section, whichever 
is applicable, of the actual
general funds revenues for that 
fiscal year.  The actual general funds revenues for the fiscal 
year shall be calculated in a manner consistent with subsection 
(c) of
Section 10 of this Act.


(Source: P.A. 94-839, eff. 6-6-06.)
 
    (30 ILCS 122/25)

    Sec. 25. Transfers from the Pension Stabilization Fund.
    (a) As used in this Section, "designated retirement 
systems" means:
        (1) the State Employees' Retirement System of
    
    Illinois;
        (2) the Teachers' Retirement System of the State of

    
    Illinois;
        (3) the State Universities Retirement System;
        (4) the Judges Retirement System of Illinois; and
        (5) the General Assembly Retirement System.
    (b) As soon as may be practical after any money is 
deposited into the Pension Stabilization Fund, the State 
Comptroller shall apportion the deposited  amount among the 
designated retirement systems and the State Comptroller and 
State Treasurer shall pay the apportioned amounts to the 
designated retirement systems.  The amount deposited shall be 
apportioned among the designated retirement systems in the same 
proportion as their respective portions of the
total actuarial 
reserve deficiency of the designated retirement systems, as 
most
recently determined by the Governor's Office of Management 
and
Budget. Amounts received by a designated retirement system 
under this Section shall be used for funding the unfunded 
liabilities of the retirement system. Payments under this 
Section are authorized by the continuing appropriation under 
Section 1.7 of the State Pension Funds Continuing Appropriation 
Act.
    (c) At the request of the State Comptroller, the Governor's 
Office of Management and Budget shall
determine the individual 
and total actuarial reserve deficiencies of the
designated 
retirement systems. For this purpose, the
Governor's Office of 
Management and Budget shall consider  the
latest available audit 
and actuarial reports of each of the
retirement systems and the 
relevant reports and statistics of

the Public Pension Division 
of the Department of
Insurance Financial and Professional 
Regulation.
    (d) Payments to the designated retirement systems  under 
this Section shall be in addition to, and not in lieu of, any 
State contributions required under Section 2-124, 14-131, 
15-155, 16-158, or 18-131 of the Illinois Pension Code.

    Payments to the designated retirement systems under this 
Section received after the effective date of this amendatory 
Act of the 98th General Assembly, and any investment earnings 
attributable to such payments, do not reduce and do not 
constitute payment of any portion of the required State 
contribution under Article 2, 14, 15, 16, or 18 of the Illinois 
Pension Code in the current fiscal year. Such amounts shall not 
reduce, and shall not be included in the calculation of, the 
required State contribution under Article 2, 14, 15, 16, or 18 
of the Illinois Pension Code in any future fiscal year, until 
the designated retirement system has reached the targeted 
funding ratio as prescribed by law for that retirement system. 
Such payments may be invested in the same manner as other 
assets of the designated retirement system and shall be used in 
the calculation of the system's funding ratio for the purposes 
of this Section and Section 20 of this Act. Payments under this 
Section may be used for any associated administrative costs. 
(Source: P.A. 94-839, eff. 6-6-06.)
 
    Section 15. The Illinois Pension Code is amended by 
changing Sections 1-103.3, 2-108, 2-108.1, 2-119, 2-119.1, 
2-124, 2-125, 2-126, 2-134, 2-162, 7-109, 7-114, 7-116, 7-139, 
9-219, 9-220, 14-103.10, 14-104.3, 14-106, 14-107, 14-108, 
14-110, 14-114, 14-115, 14-131, 14-132, 14-133, 14-135.08, 
14-152.1,  15-106, 15-107, 15-111, 15-112, 15-113.4, 15-125,   
15-135, 15-136,  15-155, 15-156,  15-157, 15-165, 15-198, 
16-106, 16-112, 16-121, 16-127,  16-132, 16-133, 16-133.1, 
16-133.2, 16-136.1, 16-152, 16-158, 16-203, 17-116, 17-134, 
20-106, 20-121, 20-123, 20-124, and 20-125 and by adding 
Sections 2-105.1, 2-105.2, 2-126.5,  2-165, 2-166, 14-103.40, 
14-133.5, 14-155, 14-156, 15-157.5, 15-200, 15-201, 16-106.4, 
16-152.5, 16-158.2, 16-205, and 16-206 as follows:
 



    (40 ILCS 5/1-103.3)



    Sec. 1-103.3. Application of 1994 amendment; funding 
standard. 

    (a) The provisions of Public Act 88-593 this amendatory Act 
of 1994 that change the method of
calculating, certifying, and 
paying the required State contributions to the
retirement 
systems established under Articles 2, 14, 15, 16, and 18 shall

first apply to the State contributions required for State 
fiscal year 1996.

    (b) (Blank) The General Assembly declares that a funding 
ratio (the ratio of a
retirement system's total assets to its 
total actuarial liabilities) of 90% is
an appropriate goal for 
State-funded retirement systems in Illinois, and it
finds that 
a funding ratio of 90% is now the generally-recognized norm

throughout the nation for public employee retirement systems 
that are
considered to be financially secure and funded in an 
appropriate and
responsible manner.

    (c) Every 5 years, beginning in 1999, the Commission on 
Government Forecasting and Accountability, in consultation 
with the affected retirement systems and the
Governor's Office 
of Management and Budget (formerly
Bureau
of the Budget), shall 
consider and determine whether the funding goals 90% funding 
ratio
adopted in Articles 2, 14, 15, 16, and 18 of this Code 
continue subsection (b) continues to represent an appropriate 
funding goals goal for
those State-funded retirement systems in 
Illinois, and it shall report its findings
and recommendations 
on this subject to the Governor and the General Assembly.

(Source: P.A. 93-1067, eff. 1-15-05.)

 
    (40 ILCS 5/2-105.1 new)
    Sec. 2-105.1. Tier 1 participant; Tier 2 participant.
    "Tier 1 participant": A participant who first became a 
participant before January 1, 2011.
    "Tier 2 participant": A participant who first became a 
participant on or after January 1, 2011.
 
    (40 ILCS 5/2-105.2 new)
    Sec. 2-105.2. Tier 1 retiree. "Tier 1 retiree" means a 
former Tier 1 participant who has made the election to  retire 
and has terminated service.
 



    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)



    Sec. 2-108. Salary. "Salary": (1) For members of the 
General Assembly,
the total compensation paid to the member by 
the State for one
year of service, including the additional 
amounts, if any, paid to
the member as an officer pursuant to 
Section 1 of "An Act
in relation to the compensation and 
emoluments of the members of the
General Assembly", approved 
December 6, 1907, as now or hereafter
amended.

    (2) For the State executive officers specified
in Section 
2-105, the total compensation paid to the member for one year

of service.

    (3) For members of the System who are participants under 
Section
2-117.1, or who are serving as Clerk or Assistant Clerk 
of the House of
Representatives or Secretary or Assistant 
Secretary of the Senate, the
total compensation paid to the 
member for one year of service, but not to
exceed the salary of 
the highest salaried officer of the General Assembly.

    However, in the event that federal law results in any 
participant
receiving imputed income based on the value of 
group term life insurance
provided by the State, such imputed 
income shall not be included in salary
for the purposes of this 
Article.

    Notwithstanding any other provision of this Code, the

annual salary of a Tier 1 participant for the purposes of this 
Code shall not
exceed, for periods of service in a term of 
office beginning on
or after the effective date of this 
amendatory Act of the 98th
General Assembly, the greater of (i) 
the annual limitation determined
from time to time under 
subsection (b-5) of Section 1-160 of
this Code or (ii) the

annualized salary of the participant on the last day of that 
participant's last term of office beginning before that 
effective date. 
(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)

 


    (40 ILCS 5/2-108.1)  (from Ch. 108 1/2, par. 2-108.1)




    Sec. 2-108.1. Highest salary for annuity purposes. 

    (a) "Highest salary for annuity purposes" means whichever 
of
the following is applicable to the participant:

    For a participant who first becomes a participant of this 
System before August 10, 2009 (the effective date of Public Act 
96-207): 

        (1) For a participant who is a member of the General 
    Assembly on his
or her last day of service: the highest 
    salary that is prescribed by law,
on the participant's last 
    day of service, for a member of the General
Assembly who is 
    not an officer; plus, if the participant was elected or

    appointed to serve as an officer of the General Assembly 
    for 2 or more
years and has made contributions as required 
    under subsection (d) of
Section 2-126, the highest 
    additional amount of compensation prescribed by
law, at the 
    time of the participant's service as an officer, for 
    members of
the General Assembly who serve in that office.


        (2) For a participant who holds one of the State 
    executive offices
specified in Section 2-105 on his or her 
    last day of service: the highest
salary prescribed by law 
    for service in that office on the participant's
last day of 
    service.


        (3) For a participant who is Clerk or Assistant Clerk 
    of the House of Representatives or Secretary or Assistant 
    Secretary of the Senate
on his or her last day of service: 
    the salary received for service in that
capacity on the 
    last day of service, but not to exceed the highest salary

    (including additional compensation for service as an 
    officer) that is
prescribed by law on the participant's 
    last day of service for the highest
paid officer of the 
    General Assembly.


        (4) For a participant who is a continuing participant 
    under Section
2-117.1 on his or her last day of service: 
    the salary received for service
in that capacity on the 
    last day of service, but not to exceed the highest
salary 
    (including additional compensation for service as an 
    officer) that
is prescribed by law on the participant's 
    last day of service for the
highest paid officer of the 
    General Assembly.

    For a participant who first becomes a participant of this 
System on or after August 10, 2009 (the effective date of 
Public Act 96-207) and before January 1, 2011 (the effective 
date of Public Act 96-889), the average monthly salary obtained 
by dividing the total salary of the participant during the 
period of: (1) the 48 consecutive months of service within the 
last 120 months of service in which the total compensation was 
the highest, or (2) the total period of service, if less than 
48 months, by the number of months of service in that period. 
    Except as otherwise provided below, for a Tier 2 For a 
participant who first becomes a participant of this System on 
or after January 1, 2011 (the effective date of Public Act 
96-889), the average monthly salary obtained by dividing the 
total salary of the participant during the 96 consecutive 
months of service within the last 120 months of service in 
which the total compensation was the highest by the number of 
months of service in that period; however, for periods of  
service in a term of office beginning on or after January 1, 
2011 and before the effective date of this amendatory Act of 
the 98th General Assembly, the highest salary for annuity 
purposes may not exceed $106,800, except that that amount shall 
annually thereafter be increased by the lesser of (i) 3% of 
that amount, including all previous adjustments, or (ii) the 
annual unadjusted percentage increase (but not less than zero) 
in the consumer price index-u
for the 12 months ending with the 
September preceding each November 1.  "Consumer price index-u" 
means
the index published by the Bureau of Labor Statistics of 
the United States
Department of Labor that measures the average 
change in prices of goods and
services purchased by all urban 
consumers, United States city average, all
items, 1982-84 = 
100.  The new amount resulting from each annual adjustment
shall 
be determined by the Public Pension Division of the Department 
of Insurance and made available to the Board by November 1 of 
each year until there is no longer any such participant who is 
in service in a term of office that began before the effective 
date of this amendatory Act of the 98th General Assembly. 
    Notwithstanding any other provision of this Section, in 
determining the highest salary for annuity purposes of a Tier 2 
participant who is in service in a term of office beginning on 
or after the effective date of this amendatory Act of the 98th 
General Assembly,  the Tier 2 participant's salary for periods 
of service in a term of office beginning on or after that 
effective date shall not exceed the limitation on salary 
determined from time to time under subsection (b-5) of Section 
1-160 of this Code. 
    (b) The earnings limitations of subsection (a) apply to 
earnings
under any other participating system under the 
Retirement Systems Reciprocal
Act that are considered in 
calculating a proportional annuity under this
Article, except 
in the case of a person who first became a member of this

System before August 22,
1994 and has not, on or after the 
effective date of this amendatory Act of the 97th General 
Assembly, irrevocably elected to have those limitations apply. 
The limitations of subsection (a) shall apply, however, to 
earnings
under any other participating system under the 
Retirement Systems Reciprocal
Act that are considered in 
calculating the proportional annuity of a person who first 
became a member of this
System before August 22,
1994 if, on or 
after the effective date of this amendatory Act of the 97th 
General Assembly, that member irrevocably elects to have those 
limitations apply.

    (c) In calculating the subsection (a) earnings limitation 
to be applied to
earnings under any other participating system 
under the Retirement Systems
Reciprocal Act for the purpose of 
calculating a proportional annuity under this
Article, the 
participant's last day of service shall be deemed to mean the 
last
day of service in any participating system from which the 
person has applied
for a proportional annuity under the 
Retirement Systems Reciprocal Act.

(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11; 
96-1490, eff. 1-1-11; 97-967, eff. 8-16-12.)

 


    (40 ILCS 5/2-119)  (from Ch. 108 1/2, par. 2-119)




    Sec. 2-119. Retirement annuity - conditions for 
eligibility. 
    (a)
A participant whose service as a
member is terminated, 
regardless of age or cause, is entitled to a retirement
annuity 
beginning on the date specified by the participant in
a written 
application subject to the following conditions:

        1.  The date the annuity begins does not precede
the 
    date of final
termination of service, or is not more than 
    30 days before the receipt
of the application
by the board 
    in the case of annuities based on disability or one year 
    before
the receipt of the application in the case of 
    annuities
based on attained age;

        2.  The participant meets one of the following 
    eligibility requirements:
        For a participant who first becomes a participant of 
    this System before January 1, 2011 (the effective date of 
    Public Act 96-889): 

            (A) He or she has attained age 55 and has at least 
        8 years of service credit;

            (B) He or she has attained age 62 and terminated 
        service after July 1,
1971 with at least 4 years of 
        service credit; or

            (C) He or she has completed 8 years of service and 
        has become
permanently disabled and as a consequence, 
        is unable to perform the duties
of his or her office.

        For a participant who first becomes a participant of 
    this System on or after January 1, 2011 (the effective date 
    of Public Act 96-889),  he or she has attained age 67 and 
    has at least 8 years of service credit. 
    (a-1) Notwithstanding subsection (a) of this Section, for a 
Tier 1 participant who begins receiving a retirement annuity 
under this Section on or after July 1, 2014, the required 
retirement age under subsection (a) is increased as follows, 
based on the Tier 1 participant's age on June 1, 2014: 
        (1) If he or she is at least age 46  on June 1, 2014, 
    then the required retirement ages under subsection (a) 
    remain unchanged.
        (2) If he or she is at least age 45 but less than age 46 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 4 months.
        (3) If he or she is at least age 44 but less than age 45 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 8 months.
        (4) If he or she is at least age 43 but less than age 44 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 12 months.
        (5) If he or she is at least age 42 but less than age 43 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 16 months.
        (6) If he or she is at least age 41 but less than age 42 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 20 months.
        (7) If he or she is at least age 40 but less than age 41 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 24 months.
        (8) If he or she is at least age 39 but less than age 40 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 28 months.
        (9) If he or she is at least age 38 but less than age 39 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 32 months.
        (10) If he or she is at least age 37 but less than age 
    38 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 36 months.
        (11) If he or she is at least age 36 but less than age 
    37 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 40 months.
        (12) If he or she is at least age 35 but less than age 
    36 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 44 months.
        (13) If he or she is at least age 34 but less than age 
    35 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 48 months.
        (14) If he or she is at least age 33 but less than age 
    34 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 52 months.
        (15) If he or she is at least age 32 but less than age 
    33 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 56 months.
        (16) If he or she is less than age 32 on June 1, 2014, 
    then the required retirement ages under subsection (a) are 
    increased by 60 months.
    Notwithstanding Section 1-103.1, this subsection (a-1) 
applies without regard to whether or not the Tier 1 participant 
is in active service under this Article on or after  the 
effective date of this amendatory Act of the 98th General 
Assembly. 
    (a-5) A participant who first becomes a participant of this 
System on or after January 1, 2011 (the effective date of 
Public Act 96-889) who has attained age 62 and has at least 8 
years of service credit may elect to receive the lower 
retirement annuity provided
in paragraph (c) of Section 
2-119.01 of this Code. 
    (b) A participant shall be considered permanently disabled 
only if:
(1) disability occurs while in service and is
of such 
a nature
as to prevent him or her from reasonably performing 
the duties of his
or her office at
the time; and (2) the board 
has received a written certificate by at
least 2 licensed 
physicians appointed by the board stating that the member is

disabled and that the disability is likely to be permanent.

(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

 


    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)




    Sec. 2-119.1. Automatic increase in retirement annuity. 

    (a) Except as otherwise provided in this Section, a A 
participant who retires after June 30, 1967, and who has not

received an initial increase under this Section before the 
effective date
of this amendatory Act of 1991, shall, in 
January or July next following
the first anniversary of 
retirement, whichever occurs first, and in the same
month of 
each year thereafter, but in no event prior to age 60, have the 
amount
of the originally granted retirement annuity increased 
as follows:  for each
year through 1971, 1 1/2%; for each year 
from 1972 through 1979, 2%; and for
1980 and each year 
thereafter, 3%.  Annuitants who have received an initial

increase under this subsection prior to the effective date of 
this amendatory
Act of 1991 shall continue to receive their 
annual increases in the same month
as the initial increase.

    (a-1) Notwithstanding subsection (a), but subject to the 
provisions of subsection (a-2), for a Tier 1  retiree, all 
automatic increases payable under subsection (a) on or after 
the effective date of this amendatory Act of the 98th General 
Assembly shall be calculated as 3% of the lesser of (1) the 
total annuity
payable at the time of the increase, including 
previous
increases granted, or (2) $1,000 multiplied by the 
number of years of creditable service upon which the annuity is 
based. 
    Beginning January 1, 2016, the $1,000 referred to in item 
(2) of this subsection (a-1) shall be increased on each January 
1 by the annual unadjusted percentage increase (but not less 
than zero) in the consumer price index-u for the 12 months 
ending with the preceding September; these adjustments shall be 
cumulative and compounded.
For the purposes of this subsection 
(a-1), "consumer price index-u" means the index published by 
the Bureau of Labor Statistics of the United States Department 
of Labor that measures the average change in prices of goods 
and services purchased by all urban consumers, United States 
city average, all items, 1982-84 = 100. The new dollar amount 
resulting from each annual adjustment shall be determined by 
the Public Pension Division of the Department of Insurance and 
made available to the System by November 1 of each year. 
    This subsection (a-1) is applicable without regard to 
whether the person is in service on or after the effective date 
of  this amendatory Act of the 98th General Assembly. 
    (a-2) Notwithstanding subsections (a) and (a-1), for an 
active or inactive Tier 1 participant who has not begun to 
receive a retirement annuity under this Article before July 1, 
2014:
        (1) the second automatic annual increase payable under 
    subsection (a) shall be at the rate of 0% of the total 
    annuity payable at the time of the increase if he or she is 
    at least age 50 on the effective date of this amendatory 
    Act; 
        (2) the second, fourth,  and sixth automatic annual 
    increases payable under subsection (a) shall be at the rate 
    of 0% of the total annuity payable at the time of the 
    increase if he or she is at least age 47 but less than age 
    50 on the effective date of this amendatory Act;
        (3) the second, fourth, sixth, and eighth automatic 
    annual increases payable under subsection (a) shall be at 
    the rate of 0% of the total annuity payable at the time of 
    the increase if he or she is at least age 44 but less than 
    age 47 on the effective date of this amendatory Act; and
        (4) the second, fourth, sixth, eighth, and tenth 
    automatic annual increases payable under subsection (a) 
    shall be at the rate of 0% of the total annuity payable at 
    the time of the increase if he or she is less than age 44 on 
    the effective date of this amendatory Act. 
    For the purposes of Section 1-103.1, this subsection (a-2) 
is applicable without regard to whether the person is in 
service on or after the effective date of  this amendatory Act 
of the 98th General Assembly. 
    (b) Beginning January 1, 1990, for eligible participants 
who remain
in service after attaining 20 years of creditable 
service, the 3% increases
provided under subsection (a) shall 
begin to accrue on the January 1 next
following the date upon 
which the participant (1) attains age 55, or (2)
attains 20 
years of creditable service, whichever occurs later, and shall

continue to accrue while the participant remains in service; 
such increases
shall become payable on January 1 or July 1, 
whichever occurs first, next
following the first anniversary of 
retirement.  For any person who has service
credit in the System 
for the entire period from January 15, 1969 through
December 
31, 1992, regardless of the date of termination of service, the

reference to age 55 in clause (1) of this subsection (b) shall 
be deemed to
mean age 50. The increases accruing under this 
subsection (b) after the effective date of this amendatory Act 
of the 98th General Assembly shall accrue at the rate provided 
in subsection (a-1). 

    This subsection (b) does not apply to any person who first 
becomes a
member of the System after the effective date of this 
amendatory Act of
the 93rd General Assembly.

    (b-5) Notwithstanding any other provision of this Section 
Article, a participant who first becomes a participant on or 
after January 1, 2011 (the effective date of Public Act 96-889) 
shall, in January or July next following the first anniversary 
of retirement, whichever occurs first, and in the same month of 
each year thereafter, but in no event prior to age 67, have the 
amount of the retirement annuity then being paid increased by 
an amount calculated as a percentage of the originally granted 
retirement annuity, equal to 3% or one-half of the annual 
unadjusted percentage increase (but not less than zero) in the 
Consumer Price Index for All Urban Consumers for the 12 months 
ending with the preceding September, as determined by the 
Public Pension Division of the Department of Insurance and 
reported to the System by November 1 of each year under 
subsection (a) of Section 2-108.1, whichever is less. 
    The changes made to this subsection (b-5) by this 
amendatory Act  of the 98th General Assembly shall apply to 
increases provided under this subsection on or after the 
effective date of this amendatory Act without regard to whether 
service
terminated before that effective date. 
    (c) The foregoing provisions relating to automatic 
increases are not
applicable to a participant who retires 
before having made contributions
(at the rate prescribed in 
Section 2-126) for automatic increases for less
than the 
equivalent of one full year.  However, in order to be eligible 
for
the automatic increases, such a participant may make 
arrangements to pay
to the system the amount required to bring 
the total contributions for the
automatic increase to the 
equivalent of one year's contributions based upon
his or her 
last salary.

    (d) A participant who terminated service prior to July 1, 
1967, with at
least 14 years of service is entitled to an 
increase in retirement annuity
beginning January, 1976, and to 
additional increases in January of each
year thereafter.

    The initial increase shall be 1 1/2% of the originally 
granted retirement
annuity multiplied by the number of full 
years that the  annuitant was in
receipt of such annuity prior 
to January 1, 1972, plus 2% of the originally
granted 
retirement annuity for each year after that date.  The 
subsequent
annual increases shall be at the rate of 2% of the 
originally granted
retirement annuity for each year through 
1979 and at the rate of 3% for
1980 and thereafter. The 
increases provided under this subsection (d) on or after the 
effective date of this amendatory Act of the 98th General 
Assembly shall be at the rate provided in subsection (a-1), 
notwithstanding that service
terminated before that effective 
date.

    (e) Except as may be provided in subsection (b-5), 
beginning 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 previous increases granted
under this 
Article.

(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

 



    (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 100% 90%
funded basis in 
accordance with actuarial recommendations by the end of State 
fiscal year 2044.

    (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 2015 through 2044, 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 
equal to the sum of (1) the State's portion of the projected 
normal cost for that fiscal year, plus (2) an amount sufficient 
to bring the total assets of the
System up to 100% of the total 
actuarial liabilities of the System by the end of
State fiscal 
year 2044.  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 2044 and shall be
determined under the projected 
unit cost method for fiscal year 2015 and under the entry age 
normal actuarial cost method for fiscal years 2016 through 
2044.
    For State fiscal years 2012 through 2014 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, 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 2009, 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.

    Notwithstanding any other provision of this Article, the 
total required State contribution for State fiscal year 2010 is 
$10,454,000 and shall be made from the proceeds of bonds sold 
in fiscal year 2010 pursuant to Section 7.2 of the General 
Obligation Bond Act, less (i) the pro rata share of bond sale 
expenses determined by the System's share of total bond 
proceeds, (ii) any amounts received from the General Revenue 
Fund in fiscal year 2010, and (iii) any reduction in bond 
proceeds due to the issuance of discounted bonds, if 
applicable. 
    Notwithstanding any other provision of this Article, the

total required State contribution for State fiscal year 2011 is

the amount recertified by the System on or before April 1, 2011 
pursuant to Section 2-134 and shall be made from the proceeds 
of bonds sold
in fiscal year 2011 pursuant to Section 7.2 of 
the General
Obligation Bond Act, less (i) the pro rata share of 
bond sale
expenses determined by the System's share of total 
bond
proceeds, (ii) any amounts received from the General 
Revenue
Fund in fiscal year 2011, and (iii) any reduction in 
bond
proceeds due to the issuance of discounted bonds, if

applicable. 
    Beginning in State fiscal year 2045, the minimum State 
contribution for each fiscal year shall be the amount needed to 
maintain the total assets of the System at 100% of the total 
actuarial liabilities of the System. 
    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.

    Amounts received by the System pursuant to Section 25 of 
the Budget Stabilization Act or Section 8.12 of the State 
Finance Act in any fiscal year do not reduce and do not 
constitute payment of any portion of the minimum State 
contribution required under this Article in that fiscal year.  
Such amounts shall not reduce, and shall not be included in the 
calculation of, the required State contributions under this 
Article in any future year until the System has reached a 
funding ratio of at least 100% 90%.  A reference in this Article 
to the "required State contribution" or any substantially 
similar term does not include or apply to any amounts payable 
to the System under  Section 25 of the Budget Stabilization Act.

    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 through State 
fiscal year 2014, 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 in fiscal year 2003 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 in fiscal year 2003 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.


    (d) For purposes of determining the required State 
contribution to the System, the value of the System's assets 
shall be equal to the actuarial value of the System's assets, 
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's 
assets shall be equal to the market value of the assets as of 
that date.  In determining the actuarial value of the System's 
assets for fiscal years after June 30, 2008, any actuarial 
gains or losses from investment return incurred in a fiscal 
year shall be recognized in equal annual amounts over the 
5-year period following that fiscal year. 
    (e) For purposes of determining the required State 
contribution to the system for a particular year, the actuarial 
value of assets shall be assumed to earn a rate of return equal 
to the system's actuarially assumed rate of return. 
(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 
96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff. 
7-13-12.)

 



    (40 ILCS 5/2-125)  (from Ch. 108 1/2, par. 2-125)



    Sec. 2-125. Obligations of State; funding guarantee. 
    (a) The payment of (1) the required State contributions, 
(2) all benefits
granted under this system and (3) all expenses 
of administration and
operation are obligations of the State to 
the extent specified in this
Article.

    (b) All income, interest and dividends derived from 
deposits and investments
shall be credited to the account of 
the system in the State Treasury and
used to pay benefits under 
this Article.

    (c) Beginning July 1, 2014, the State shall be obligated to 
contribute to the System in each State fiscal year an amount 
not less than the sum of (i) the State's normal cost for the 
year and (ii) the portion of the unfunded accrued liability 
assigned to that year by law. Notwithstanding any other 
provision of  law, if the State fails to pay an amount required 
under this subsection, it shall be the obligation of the Board 
to seek payment of the required amount in compliance with the 
provisions of this Section and, if the amount remains unpaid, 
to bring a mandamus action in the Supreme Court of Illinois to 
compel the State to make the required payment. 
    If the System submits a voucher for contributions  required 
under Section 2-124 and the State fails to pay that voucher 
within 90 days of its receipt, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State, 
if the amount remains unpaid the Board shall commence a 
mandamus action in the Supreme Court of Illinois to compel the 
Comptroller to satisfy the voucher. 
    This subsection (c) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to pay a voucher for the 
contributions required under Section 2-124.
    (d) Beginning in State fiscal year 2016, the State shall be 
obligated to make the transfers set forth in subsections (c-5) 
and (c-10) of Section 20 of the Budget Stabilization Act and to 
pay to the System its proportionate share of the transferred 
amounts in accordance with Section 25 of the Budget 
Stabilization Act.  Notwithstanding any other provision of  law, 
if the State fails to transfer an amount required under this 
subsection or to pay to the System its proportionate share of 
the transferred amount in accordance with Section 25 of the 
Budget Stabilization Act, it shall be the obligation of the 
Board to seek transfer or payment of the required amount in 
compliance with the provisions of this Section and,  if the 
required amount remains untransferred or the required payment 
remains unpaid, to bring a mandamus action in the Supreme Court 
of Illinois to compel the State to make the required transfer 
or payment or both, as the case may be. 
    If the State fails to make a transfer  required under 
subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act or a payment to the System required under 
Section 25 of that Act, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State,  
if the required amount remains untransferred or the required 
payment remains unpaid, the Board shall commence a mandamus 
action in the Supreme Court of Illinois to compel the 
Comptroller to make the required transfer or payment or both, 
as the case may be. 
    This subsection (d) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to make a transfer required 
under subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act and to pay to the System its proportionate 
share of the transferred amount in accordance with Section 25 
of the Budget Stabilization Act.
    The obligations created by this subsection (d) expire when 
all of the requirements of subsections  (c-5) and (c-10) of 
Section 20 of the Budget Stabilization Act and Section 25 of 
the Budget Stabilization Act have been met. 
    (e) Any payments and transfers required to be made by the 
State pursuant to subsection (c) or (d) are expressly 
subordinate to the payment of the principal, interest, and 
premium, if any, on any bonded debt obligation of the State or 
any other State-created entity, either currently outstanding 
or to be issued, for which the source of repayment or security 
thereon is derived directly or indirectly from tax revenues 
collected by the State or any other State-created entity. 
Payments on such bonded obligations include any statutory fund 
transfers or other prefunding mechanisms or formulas set forth, 
now or hereafter, in State law or bond indentures, into debt 
service funds or accounts of the State related to such bond 
obligations, consistent with the payment schedules associated 
with such obligations.
(Source: P.A. 83-1440.)

 



    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)



    Sec. 2-126. Contributions by participants. 

    (a) Each participant shall contribute toward the cost of 
his or her
retirement annuity a percentage of each payment of 
salary received by him or
her for service as a member as 
follows:  for service between October 31, 1947
and January 1, 
1959, 5%; for service between January 1, 1959 and June 30, 
1969,
6%; for service between July 1, 1969 and January 10, 
1973, 6 1/2%; for service
after January 10, 1973, 7%; for 
service after December 31, 1981, 8 1/2%.

    (b) Beginning August 2, 1949, each male participant, and 
from July 1,
1971, each female participant shall contribute 
towards the cost of the
survivor's annuity 2% of salary.

    A participant who has no eligible survivor's annuity 
beneficiary may elect
to cease making contributions for 
survivor's annuity under this subsection.
A survivor's annuity 
shall not be payable upon the death of a person who has
made 
this election, unless prior to that death the election has been 
revoked
and the amount of the contributions that would have 
been paid under this
subsection in the absence of the election 
is paid to the System, together
with interest at the rate of 4% 
per year from the date the contributions
would have been made 
to the date of payment.

    (c) Beginning July 1, 1967 and, in the case of Tier 1 
participants, ending on June 30, 2014, each participant shall 
contribute 1% of
salary towards the cost of automatic increase 
in annuity provided in
Section 2-119.1.  These contributions 
shall be made concurrently with
contributions for retirement 
annuity purposes.

    (d) In addition, each participant serving as an officer of 
the General
Assembly shall contribute, for the same purposes 
and at the same rates
as are required of a regular participant, 
on each additional payment
received as an officer.  If the 
participant serves as an
officer for at least 2 but less than 4 
years, he or she shall
contribute an amount equal to the amount 
that would have been contributed
had the participant served as 
an officer for 4 years.  Persons who serve
as officers in the 
87th General Assembly but cannot receive the additional
payment 
to officers because of the ban on increases in salary during 
their
terms may nonetheless make contributions based on those 
additional payments
for the purpose of having the additional 
payments included in their highest
salary for annuity purposes; 
however, persons electing to make these
additional 
contributions must also pay an amount representing the

corresponding employer contributions, as calculated by the 
System.

    (e) Notwithstanding any other provision of this Article, 
the required contribution      of a participant who first becomes a 
participant on or after January 1, 2011 shall not exceed  the 
contribution that would be due under this Article if that  
participant's highest salary for annuity purposes were 
$106,800, plus any increases in that amount under Section 
2-108.1. 
(Source: P.A. 96-1490, eff. 1-1-11.)

 
    (40 ILCS 5/2-126.5 new)
    Sec. 2-126.5. Use of contributions for health care 
subsidies. The System shall not use any contribution received 
by the System under this Article to provide a subsidy for the 
cost of participation in a retiree health care program.
 



    (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 
December 15 of each
year until December 15, 2011 the amount of 
the required State contribution to the System for the next

fiscal year and shall specifically identify the System's 
projected State normal cost for that fiscal year.  The 
certification shall include a copy of the actuarial

recommendations upon which it is based and shall specifically 
identify the System's projected State normal cost for that 
fiscal year.

    On or before November 1 of each year, beginning November 1, 
2012, the Board shall submit to the State Actuary, the 
Governor, and the General Assembly a proposed certification of 
the amount of the required State contribution to the System for 
the next fiscal year, along with all of the actuarial 
assumptions, calculations, and data upon which that proposed 
certification is based. On or before January 1 of each year 
beginning January 1, 2013, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification of the required State contributions. On or before 
January 15, 2013 and every January 15 thereafter, the Board 
shall certify to the Governor and the General Assembly the 
amount of the required State contribution for the next fiscal 
year. The Board's certification must note any deviations from 
the State Actuary's recommended changes, the reason or reasons 
for not following the State Actuary's recommended changes, and 
the fiscal impact of not following the State Actuary's 
recommended changes on the required State contribution. 
    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.

    On or before April 1, 2011, the Board shall recalculate and 
recertify to the Governor the amount of the required State 
contribution to the System for State fiscal year 2011, applying 
the changes made by Public Act 96-889 to the System's assets 
and liabilities as of June 30, 2009 as though Public Act 96-889 
was approved on that date. 
    (a-5) For purposes of Section (c-5) of Section 20 of the 
Budget Stabilization Act, on or before November 1 of each year 
beginning November 1, 2014, the Board shall determine the 
amount of the State contribution to the System that would have 
been required for the next fiscal year if this amendatory Act 
of the 98th General Assembly had not taken effect, using the 
best and most recent available data but based on the law in 
effect on May 31, 2014.  The Board shall submit to the State 
Actuary, the Governor, and the General Assembly a proposed 
certification, along with the relevant law, actuarial 
assumptions, calculations, and data upon which that 
certification is based.  On or before January 1, 2015 and every 
January 1 thereafter, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification.  On or before January 15, 2015 and every January 
1 thereafter, the Board shall certify to the Governor and the 
General Assembly the amount of the State contribution to the 
System that would have been required for the next fiscal year 
if this amendatory Act of the 98th General Assembly had not 
taken effect, using the best and most recent available data but 
based on the law in effect on May 31, 2014.  The Board's 
certification must note any deviations from the State Actuary's 
recommended changes, the reason or reasons for not following 
the State Actuary's recommended changes, and the impact of not 
following the State Actuary's recommended changes. 
    (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. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 
97-694, eff. 6-18-12.)

 
    (40 ILCS 5/2-162)

    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. "New benefit 
increase", however, does not include any benefit increase 
resulting from the changes made to this Article by this 
amendatory Act of the 98th 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 Insurance 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.

(Source: P.A. 94-4, eff. 6-1-05.)
 
    (40 ILCS 5/2-165 new)
    Sec. 2-165. Defined contribution plan.
    (a) By July 1, 2015, the  System shall prepare and implement 
a voluntary  defined contribution plan for up to 5% of eligible 
active Tier 1 participants. The System shall determine the 5% 
cap by the number of active Tier 1 participants on the 
effective date of this Section. The defined contribution plan 
developed under this Section shall be a plan that aggregates 
employer and employee contributions in individual participant 
accounts which, after meeting any other requirements, are used 
for payouts after retirement in accordance with this Section 
and any other applicable laws. 
    As used in this Section, "defined benefit plan" means the 
retirement plan available under this Article to Tier 1 
participants who have not made the election authorized under 
this Section.
        (1) Under the defined contribution plan,  an active Tier 
    1 participant of this System could elect to cease accruing 
    benefits in the defined benefit plan under this Article and 
    begin accruing benefits for future service in the defined 
    contribution plan. Service credit under the defined 
    contribution plan may be used for determining retirement 
    eligibility under the defined benefit plan.
        (2) Participants in the defined contribution plan  
    shall pay employee contributions at the same rate as Tier 1 
    participants in this System who do not participate in the 
    defined contribution plan. 
        (3) State contributions shall be paid into the accounts 
    of all participants in the defined contribution plan at a 
    uniform rate,  expressed as a percentage of compensation and 
    determined for each year. This rate shall  be no higher than 
    the employer's normal cost for Tier 1 participants in the 
    defined benefit plan for that year, as determined by the 
    System and expressed as a percentage of compensation, and 
    shall be no lower than 3% of compensation.  The State shall 
    adjust this rate annually. 
        (4) The defined contribution plan shall require 5 years 
    of participation in the defined contribution plan before 
    vesting in State contributions.  If the participant fails to 
    vest in them, the State contributions, and the earnings 
    thereon, shall be forfeited.
        (5) The defined contribution plan may provide for 
    participants in the plan to be eligible for defined 
    disability benefits. If it does, the System shall reduce 
    the employee contributions credited to the participant's 
    defined contribution plan account  by an amount determined 
    by the System to cover the cost of offering such benefits.
        (6) The defined contribution plan shall provide a 
    variety of options for investments.  These options shall 
    include investments handled by the Illinois State Board of 
    Investment as well as private sector investment options.
        (7)   The defined contribution plan shall provide a 
    variety of options for payouts to retirees and their 
    survivors.
        (8)  To the extent authorized under federal law and as 
    authorized by the System, the plan shall allow former 
    participants in the plan to transfer or roll over employee 
    and vested State contributions, and the earnings thereon, 
    into other qualified retirement plans.
        (9)  The System shall reduce the employee contributions 
    credited to the participant's defined contribution plan 
    account  by an amount determined by the System to cover the 
    cost of offering these benefits and any applicable 
    administrative fees. 
    (b)  Only persons who are active Tier 1 participants of the 
System on the effective date of this Section are eligible to 
participate in the defined contribution plan. Participation in 
the defined contribution plan shall be limited to the first 5% 
of eligible persons  who elect to participate. The election to 
participate in the defined contribution plan is voluntary and 
irrevocable.
    (c) An eligible active Tier 1 participant may irrevocably 
elect to participate in the defined contribution plan by filing 
with the System a written application to participate that is 
received by the System prior to its determination that 5% of 
eligible persons have elected to participate in the defined 
contribution plan.
    When the System first determines that 5% of eligible 
persons have elected to participate in the defined contribution 
plan, the System shall provide notice to previously eligible 
employees that the plan is no longer available and shall  cease 
accepting applications to participate. 
    (d) The System shall make a good faith effort to contact 
each active Tier 1 participant who is eligible to participate 
in the defined contribution plan.  The System shall mail 
information describing the option to join the defined 
contribution plan to each of these employees to his or her last 
known address on file with the System.  If the employee is not 
responsive to other means of contact, it is sufficient for the 
System to publish the details of the option on its website.
    Upon request for further information describing the 
option, the System shall provide employees with information 
from the System before exercising the option to join the plan, 
including information on the impact to their vested benefits or 
non-vested service. The individual consultation shall include 
projections of the participant's defined benefits at 
retirement or earlier termination of service and the value of 
the participant's account at retirement or earlier termination 
of service.  The System shall not provide advice or counseling 
with respect to whether the employee should exercise the 
option.  The System shall inform Tier 1 participants who are 
eligible to participate in the defined contribution plan that 
they may also wish to obtain information and counsel relating 
to their option from any other available source, including but 
not limited to labor organizations, private counsel, and 
financial advisors. 
    (e) In no event shall the System, its staff, its authorized 
representatives, or the Board be liable for any information 
given to an employee under this Section.  The System may 
coordinate with the Illinois Department of Central Management 
Services and other retirement systems administering a defined 
contribution plan in accordance with this amendatory Act of the 
98th General Assembly to provide information concerning the 
impact of the option set forth in this Section. 
    (f) Notwithstanding any other provision of this Section, no 
person shall begin participating in the defined contribution 
plan until it has attained qualified plan status and received 
all necessary approvals from the U.S. Internal Revenue Service. 
    (g) The System shall report on its progress under this 
Section, including the available details of the defined 
contribution plan and the System's plans for informing eligible 
Tier 1 participants about the plan, to the Governor and the 
General Assembly on or before January 15, 2015. 
    (h) The Illinois State Board of Investments shall be the 
plan sponsor for the defined contribution plan established 
under this Section. 
    (i) The intent of this amendatory Act of the 98th General 
Assembly is to ensure that the State's normal cost  of 
participation in the defined contribution plan is similar, and 
if possible equal, to the State's normal cost  of participation 
in the defined benefit plan, unless a lower State's normal cost 
is necessary to ensure cost neutrality. 
 
    (40 ILCS 5/2-166 new)
    Sec. 2-166. Defined contribution plan; termination. If the 
defined contribution plan is terminated or becomes inoperative 
pursuant to law, then each participant in the plan shall 
automatically be deemed to have been a contributing Tier 1 
participant in the System's defined benefit plan during the 
time in which he or she participated in the defined 
contribution plan, and for that purpose  the System shall be 
entitled to recover the amounts in the participant's defined 
contribution accounts.
 



    (40 ILCS 5/7-109)  (from Ch. 108 1/2, par. 7-109)



    Sec. 7-109. Employee. 

    (1) "Employee" means any person who:


        (a) 1. Receives earnings as payment for the performance 
        of personal
services or official duties out of the 
        general fund of a municipality,
or out of any special 
        fund or funds controlled by a municipality, or by
an 
        instrumentality thereof, or a participating 
        instrumentality, including,
in counties, the fees or 
        earnings of any county fee office; and


            2.  Under the usual common law rules applicable in 
        determining the
employer-employee relationship, has 
        the status of an employee with a
municipality, or any 
        instrumentality thereof, or a participating

        instrumentality, including aldermen, county 
        supervisors and other
persons (excepting those 
        employed as independent contractors) who are
paid 
        compensation, fees, allowances or other emolument for 
        official
duties, and, in counties, the several county 
        fee offices.


        (b) Serves as a township treasurer appointed under the 
    School
Code, as heretofore or hereafter amended, and
who 
    receives for such services regular compensation as 
    distinguished
from per diem compensation, and any regular 
    employee in the office of
any township treasurer whether or 
    not his earnings are paid from the
income of the permanent 
    township fund or from funds subject to
distribution to the 
    several school districts and parts of school
districts as 
    provided in the School Code, or from both such sources; or 
    is the chief executive officer, chief educational officer, 
    chief fiscal officer, or other employee of a Financial 
    Oversight Panel established pursuant to Article 1H of the 
    School Code, other than a superintendent or certified 
    school business official, except that such person shall not 
    be treated as an employee under this Section if that person 
    has negotiated with the Financial Oversight Panel, in 
    conjunction with the school district, a contractual 
    agreement for exclusion from this Section.


        (c) Holds an elective office in a municipality, 
    instrumentality
thereof or participating instrumentality.

    (2) "Employee" does not include persons who:


        (a) Are eligible for inclusion under any of the 
    following laws:


            1. "An Act in relation to an Illinois State 
        Teachers' Pension and
Retirement Fund", approved May 
        27, 1915, as amended;


            2. Articles 15 and 16 of this Code.


        However, such persons shall be included as employees to 
    the extent of
earnings that are not eligible for inclusion 
    under the foregoing laws
for services not of an 
    instructional nature of any kind.


        However, any member of the armed forces who is employed 
    as a teacher
of subjects in the Reserve Officers Training 
    Corps of any school and who
is not certified under the law 
    governing the certification of teachers
shall be included 
    as an employee.


        (b) Are designated by the governing body of a 
    municipality in which a
pension fund is required by law to 
    be established for policemen or
firemen, respectively, as 
    performing police or fire protection duties,
except that 
    when such persons are the heads of the police or fire

    department and are not eligible to be included within any 
    such pension
fund, they shall be included within this 
    Article; provided, that such
persons shall not be excluded 
    to the extent of concurrent service and
earnings not 
    designated as being for police or fire protection duties.

    However, (i) any head of a police department who was a 
    participant under this
Article immediately before October 
    1, 1977 and did not elect, under Section
3-109 of this Act, 
    to participate in a police pension fund shall be an

    "employee", and (ii) any chief of police who elects to 
    participate in this
Fund under Section 3-109.1 of this 
    Code, regardless of whether such person
continues to be 
    employed as chief of police or is employed in some other

    rank or capacity within the police department, shall be an 
    employee under
this Article for so long as such person is 
    employed to perform police
duties by a participating 
    municipality and has not lawfully rescinded that
election.
        (c) After August 26, 2011 (the effective date of Public 
    Act 97-609), are contributors to or eligible to contribute 
    to a Taft-Hartley pension plan established on or before 
    June 1, 2011 and are employees of a theatre, arena, or 
    convention center that is located in a municipality located 
    in a county with a population greater than 5,000,000, and 
    to which the participating municipality is required to 
    contribute as the person's employer based on earnings from 
    the municipality.  Nothing in this paragraph shall affect 
    service credit or creditable service for any period of 
    service prior to August 26, 2011, and this paragraph shall 
    not apply to individuals who are participating in the Fund 
    prior to August 26, 2011. 

        (d) Become an employee of any of the following 
    participating instrumentalities on or after the effective 
    date of this amendatory Act of the 98th General Assembly: 
    the Illinois Municipal League; the Illinois Association of 
    Park Districts; the Illinois Supervisors, County 
    Commissioners and Superintendents of Highways Association; 
    an association, or not-for-profit corporation, membership 
    in which is authorized under Section 85-15 of the Township 
    Code; the United Counties Council; or the Will County 
    Governmental League. 
    (3) All persons, including, without limitation, public 
defenders and
probation officers, who receive earnings from 
general or special funds
of a county for performance of 
personal services or official duties
within the territorial 
limits of the county, are employees of the county
(unless 
excluded by subsection (2) of this Section) notwithstanding 
that
they may be appointed by and are subject to the direction 
of a person or
persons other than a county board or a county 
officer.  It is hereby
established that an employer-employee 
relationship under the usual
common law rules exists between 
such employees and the county paying
their salaries by reason 
of the fact that the county boards fix their
rates of 
compensation, appropriate funds for payment of their earnings

and otherwise exercise control over them.  This finding and this

amendatory Act shall apply to all such employees from the date 
of
appointment whether such date is prior to or after the 
effective date of
this amendatory Act and is intended to 
clarify existing law pertaining
to their status as 
participating employees in the Fund.

(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11; 
97-813, eff. 7-13-12.)

 



    (40 ILCS 5/7-114)  (from Ch. 108 1/2, par. 7-114)



    Sec. 7-114. Earnings. "Earnings":

    (a) An amount to be determined by the board, equal to the 
sum of:


        1. The total amount of money paid to an employee for 
    personal
services or official duties as an employee (except 
    those employed as
independent contractors) paid out of the 
    general fund, or out of any
special funds controlled by the 
    municipality, or by any instrumentality
thereof, or 
    participating instrumentality, including compensation, 
    fees,
allowances, or other emolument paid for official 
    duties (but not
including automobile maintenance, travel 
    expense, or reimbursements for
expenditures incurred in 
    the performance of duties or, in the case of a person who

    first becomes a participant on or after the effective date

    of this amendatory Act of the 98th General Assembly,

    payments for unused sick or vacation time) and, for fee

    offices, the fees or earnings of the offices to the extent 
    such fees are
paid out of funds controlled by the 
    municipality, or instrumentality or
participating 
    instrumentality; and


        2. The money value, as determined by rules prescribed 
    by the
governing body of the municipality, or 
    instrumentality thereof, of any
board, lodging, fuel, 
    laundry, and other allowances provided an employee
in lieu 
    of money.

    (b) For purposes of determining benefits payable under this 
fund
payments to a person who is engaged in an independently 
established
trade, occupation, profession or business and who 
is paid for his
service on a basis other than a monthly or 
other regular salary, are not
earnings.

    (c) If a disabled participating employee is eligible to 
receive Workers'
Compensation for an accidental injury and the 
participating municipality or
instrumentality which employed 
the participating employee when injured
continues to pay the 
participating employee regular salary or other
compensation or 
pays the employee an amount in excess of the Workers'

Compensation amount, then earnings shall be deemed to be the 
total payments,
including an amount equal to the Workers' 
Compensation payments.  These
payments shall be subject to 
employee contributions and allocated as if paid to
the 
participating employee when the regular payroll amounts would 
have been
paid if the participating employee had continued 
working, and creditable
service shall be awarded for this 
period.

    (d) If an elected official who is a participating employee 
becomes disabled
but does not resign and is not removed from 
office, then earnings shall include
all salary payments made 
for the remainder of that term of office and the
official shall 
be awarded creditable service for the term of office.

    (e) If a participating employee is paid pursuant to "An Act 
to provide for
the continuation of compensation for law 
enforcement officers, correctional
officers and firemen who 
suffer disabling injury in the line of duty", approved

September 6, 1973, as amended, the payments shall be deemed 
earnings, and the
participating employee shall be awarded 
creditable service for this period.

    (f) Additional compensation received by a person while 
serving as a
supervisor of assessments, assessor, deputy 
assessor or member of a board of
review from the State of 
Illinois pursuant to Section 4-10 or 4-15 of the
Property Tax 
Code shall not be
earnings for purposes of this Article and 
shall not be included in the
contribution formula or 
calculation of benefits for such person pursuant to
this 
Article.

(Source: P.A. 87-740; 88-670, eff. 12-2-94.)

 



    (40 ILCS 5/7-116)  (from Ch. 108 1/2, par. 7-116)



    Sec. 7-116. "Final rate of earnings": 

    (a) For retirement and survivor annuities, the monthly 
earnings obtained
by dividing the total earnings received by 
the employee during the period of
either (1) the 48 consecutive 
months of service within the last 120 months of
service in 
which his total earnings were the highest or (2) the
employee's 
total period of service, by the number of months
of service in 
such period.

    (b) For death benefits, the higher of the rate determined 
under
paragraph (a) of this Section or total earnings received 
in the last 12 months
of service divided by twelve.  If the 
deceased employee has less than 12 months
of service, the 
monthly final rate shall be the monthly rate of pay the

employee was receiving when he began service.

    (c) For disability benefits, the total earnings of a 
participating
employee in the last 12 calendar months of 
service prior to the date he
becomes disabled divided by 12.

    (d) In computing the final rate of earnings: (1) the 
earnings rate for
all periods of prior service shall be 
considered equal to the average
earnings rate for the last 3 
calendar years of prior service for
which creditable service is 
received under Section 7-139 or, if there is less than 3 years 
of
creditable prior service, the average for the total prior 
service period
for which creditable service is received under 
Section 7-139; (2) for out
of state service and authorized

leave, the earnings rate shall be the rate upon which service 
credits are
granted; (3) periods of military leave shall not be 
considered; (4) the
earnings rate for all periods of disability 
shall be considered equal to
the rate of earnings upon which 
the employee's disability benefits are
computed for such 
periods; (5) the earnings to be considered for each of
the 
final three months of the final earnings period for persons who 
first became participants before January 1, 2012  and the 
earnings to be considered for each of the final 24 months for 
participants who first become participants on or after January 
1, 2012 shall not exceed 125%
of the highest earnings of any 
other month in the final earnings period;
and (6) the annual 
amount of final rate of earnings shall be the monthly
amount 
multiplied by the number of months of service normally required 
by
the position in a year; and (7) in the case of a person who

first becomes a participant on or after the effective date of

this amendatory Act of the 98th General Assembly, payments for

unused sick or vacation time shall not be considered.

(Source: P.A. 97-609, eff. 1-1-12.)

 



    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)


    Sec. 7-139. Credits and creditable service to employees. 

    (a) Each participating employee shall be granted credits 
and creditable
service, for purposes of determining the amount 
of any annuity or benefit
to which he or a beneficiary is 
entitled, as follows:


        1. For prior service: Each participating employee who 
    is an employee
of a participating municipality or 
    participating instrumentality on the
effective date shall 
    be granted creditable service, but no credits under

    paragraph 2 of this subsection (a), for periods of prior 
    service for which
credit has not been received under any 
    other pension fund or retirement system
established under 
    this Code, as follows:


        If the effective date of participation for the 
    participating municipality
or participating 
    instrumentality is on or before January 1, 1998, creditable

    service shall be granted for the entire period of prior 
    service with that
employer without any employee 
    contribution.


        If the effective date of participation for the 
    participating municipality
or participating 
    instrumentality is after January 1, 1998, creditable

    service shall be granted for the last 20% of the period of 
    prior service with
that employer, but no more than 5 years, 
    without any employee contribution.  A
participating 
    employee may establish creditable service for the 
    remainder of
the period of prior service with that employer 
    by making an application in
writing, accompanied by payment 
    of an employee contribution in an
amount determined by the 
    Fund, based on the employee contribution rates in
effect at 
    the time of application for the creditable service and the 
    employee's
salary rate on the effective date of 
    participation for that employer, plus
interest at the 
    effective rate from the date of the prior service to the 
    date
of payment.  Application for this creditable service 
    may be made at any time
while the employee is still in 
    service.

        A municipality that (i) has at least 35 employees; (ii) 
    is located in a county with at least 2,000,000 inhabitants;  
    and (iii) maintains an independent defined benefit pension 
    plan for the benefit of its eligible employees may restrict 
    creditable service in whole or in part for periods of prior 
    service with the employer if the governing body of the 
    municipality adopts an irrevocable resolution to restrict 
    that creditable service and files the resolution with the 
    board before the municipality's effective date of 
    participation.


        Any person who has withdrawn from the service of a 
    participating
municipality
or participating 
    instrumentality prior to the effective date, who reenters

    the service of the same municipality or participating 
    instrumentality after
the effective date and becomes a 
    participating employee is entitled to
creditable service 
    for prior service as otherwise provided in this
subdivision 
    (a)(1) only if he or she renders 2 years of service as a

    participating employee after the effective date.  
    Application
for such service must be made while in a 
    participating status.
The salary rate to be used in the 
    calculation of the required employee
contribution, if any, 
    shall be the employee's salary rate at the time of first

    reentering service with the employer after the employer's 
    effective date of
participation.


        2. For current service, each participating employee 
    shall be
credited with:


            a. Additional credits of amounts equal to each 
        payment of additional
contributions received from him 
        under Section 7-173, as of the
date the corresponding 
        payment of earnings is payable to him.


            b. Normal credits of amounts equal to each payment 
        of normal
contributions received from him, as of the 
        date the corresponding payment of
earnings is payable 
        to him, and normal contributions made for the purpose 
        of
establishing out-of-state service credits as 
        permitted under the conditions set
forth in paragraph 6 
        of this subsection (a).


            c. Municipality credits in an amount equal to 1.4 
        times the normal
credits, except those established by 
        out-of-state service credits, as of
the date of 
        computation of any benefit if these credits would 
        increase
the benefit.


            d. Survivor credits equal to each payment of 
        survivor contributions
received from the participating 
        employee as of the date the
corresponding payment of 
        earnings is payable, and survivor contributions made

        for the purpose of establishing out-of-state service 
        credits.


        3. For periods of temporary and total and permanent 
    disability
benefits, each employee receiving disability 
    benefits shall be granted
creditable service for the period 
    during which disability benefits are
payable.  Normal and 
    survivor credits, based upon the rate of earnings
applied 
    for disability benefits, shall also be granted if such 
    credits
would result in a higher benefit to any such 
    employee or his
beneficiary.


        4. For authorized leave of absence without pay:  A 
    participating
employee shall be granted credits and 
    creditable service for periods of
authorized leave of 
    absence without pay under the following
conditions:


            a. An application for credits and creditable 
        service is submitted to the
board while the employee is 
        in a status of
active employment.


            b. Not more than 12 complete months of creditable 
        service
for authorized leave of absence without pay 
        shall be counted for purposes of
determining any 
        benefits payable under this Article.


            c. Credits and creditable service shall be granted 
        for leave of
absence only if such leave is approved by 
        the governing body of the
municipality, including 
        approval of the estimated cost thereof to the

        municipality as determined by the fund, and employee 
        contributions, plus
interest at the effective rate 
        applicable for each year from the end of
the period of 
        leave to date of payment, have been paid to the fund in

        accordance with Section 7-173.  The contributions shall 
        be computed upon the
assumption earnings continued 
        during the period of leave at the rate in
effect when 
        the leave began.


            d. Benefits under the provisions of Sections 
        7-141, 7-146, 7-150
and 7-163 shall become payable to 
        employees on authorized leave of
absence, or their 
        designated beneficiary, only if such leave of absence

        is creditable hereunder, and if the employee has at 
        least one year of
creditable service other than the 
        service granted for leave of absence.
Any employee 
        contributions due may be deducted from any benefits

        payable.


            e. No credits or creditable service shall be 
        allowed for leave of
absence without pay during any 
        period of prior service.


        5. For military service: The governing body of a 
    municipality or
participating instrumentality may elect to 
    allow creditable service to
participating employees who 
    leave their employment to serve in the armed
forces of the 
    United States for all periods of such service, provided

    that the person returns to active employment within 90 days 
    after
completion
of full time active duty, but no 
    creditable service shall be allowed such
person for any 
    period that can be used in the computation of a pension
or 
    any other pay or benefit, other than pay for active duty, 
    for service
in any branch of the armed forces of the United 
    States.  If necessary to
the computation of any benefit, the 
    board shall establish municipality
credits for 
    participating employees under this paragraph on the

    assumption that the employee received earnings at the rate 
    received at
the time he left the employment to enter the 
    armed forces.  A
participating employee in the armed forces 
    shall not be considered an
employee during such period of 
    service and no additional death and no
disability benefits 
    are payable for death or disability during such period.


        Any participating employee who left his employment 
    with a
municipality or participating instrumentality to 
    serve in the armed
forces of the United States and who 
    again became a participating
employee within 90 days after 
    completion of full time active duty by
entering the service 
    of a different municipality or participating

    instrumentality, which has elected to allow creditable 
    service for
periods of military service under the preceding 
    paragraph, shall also be
allowed creditable service for his 
    period of military service on the
same terms that would 
    apply if he had been employed, before entering
military 
    service, by the municipality or instrumentality which 
    employed
him after he left the military service and the 
    employer costs arising in
relation to such grant of 
    creditable service shall be charged to and
paid by that 
    municipality or instrumentality.


        Notwithstanding the foregoing, any participating 
    employee
shall be entitled to creditable service as 
    required by any federal law
relating to re-employment 
    rights of persons who served in the United States
Armed 
    Services.  Such creditable service shall be granted upon 
    payment by
the member of an amount equal to the employee 
    contributions which would
have been required had the 
    employee continued in service at the same
rate of earnings 
    during the military leave period, plus interest at
the 
    effective rate.


        5.1. In addition to any creditable service established 
    under
paragraph 5 of this subsection (a), creditable 
    service may be granted for
up to 48 months of service in 
    the armed forces of the United States.


        In order to receive creditable service for military 
    service under this
paragraph 5.1, a participating employee 
    must (1) apply to the Fund
in writing and provide evidence 
    of the military service that is satisfactory
to the Board; 
    (2) obtain the written approval of the current employer; 
    and (3)
make contributions to the Fund equal to (i)
the 
    employee contributions that would have been required had 
    the service been
rendered as a member, plus (ii) an amount 
    determined by the board to be equal
to the employer's 
    normal cost of the benefits accrued for that military

    service, plus (iii) interest on items (i) and (ii) from the 
    date of first
membership in the Fund to the date of 
    payment.  The required interest shall be
calculated at the 
    regular interest rate.

        The changes made to this paragraph 5.1 by Public Acts 
    95-483 and 95-486
 apply only to participating employees in 
    service on or after August 28, 2007 (the effective date of 
    those Public Acts).


        6. For out-of-state service: Creditable service shall 
    be granted for
service rendered to an out-of-state local 
    governmental body under the
following conditions: The 
    employee had participated and has irrevocably
forfeited 
    all rights to benefits in the out-of-state public employees

    pension system; the governing body of his participating 
    municipality or
instrumentality authorizes the employee to 
    establish such service; the
employee has 2 years current 
    service with this municipality or
participating 
    instrumentality; the employee makes a payment of

    contributions, which shall be computed at 8% (normal) plus 
    2% (survivor)
times length of service purchased times the 
    average rate of earnings for the
first 2
years of service 
    with the municipality or participating
instrumentality 
    whose governing body authorizes the service established

    plus interest at the effective rate on the date such 
    credits are
established, payable from the date the employee 
    completes the required 2
years of current service to date 
    of payment.  In no case shall more than
120 months of 
    creditable service be granted under this provision.


        7. For retroactive service:  Any employee who could have 
    but did not
elect to become a participating employee, or 
    who should have been a
participant in the Municipal Public 
    Utilities Annuity and Benefit Fund
before that fund was 
    superseded, may receive creditable service for the
period 
    of service not to exceed 50 months; however, a current or 
    former
elected or appointed official of a participating 
    municipality may establish credit under this paragraph 7 
    for more than 50
months of service as an official of that 
    municipality, if the excess over 50 months is approved by 
    resolution of the
governing body of the affected 
    municipality filed with
the Fund before January 1, 2002.


        Any employee who is a
participating employee on or 
    after September 24, 1981 and who was
excluded from 
    participation by the age restrictions removed by Public Act

    82-596 may receive creditable service for the period, on or 
    after January
1, 1979, excluded by the age restriction and, 
    in addition, if the governing
body of the participating 
    municipality or participating instrumentality elects
to 
    allow creditable service for all employees excluded by the 
    age restriction
prior to January 1, 1979, for service 
    during the period prior to that date
excluded by the age 
    restriction.  Any employee who was excluded from

    participation by the age restriction removed by Public Act 
    82-596 and who is
not a participating employee on or after 
    September 24, 1981 may receive
creditable service for 
    service after January 1,
1979. Creditable service under 
    this paragraph
shall be granted upon payment of the 
    employee contributions
which would have been required had 
    he participated, with interest at the
effective rate for 
    each year from the end of the period of service
established 
    to date of payment.


        8. For accumulated unused sick leave:  A participating 
    employee who first becomes a participating employee before 
    the effective date of this amendatory Act of the 98th 
    General Assembly and who is
applying for a retirement 
    annuity shall be entitled to creditable service
for that 
    portion of the employee's accumulated unused sick leave
for 
    which payment is not received, as follows:


            a. Sick leave days shall be limited to those 
        accumulated under a sick
leave plan established by a 
        participating municipality or participating

        instrumentality which is available to all employees or 
        a class of employees.


            b. Except as provided in item b-1, only sick leave 
        days accumulated with a participating municipality or

        participating instrumentality with which the employee 
        was in service within
60 days of the effective date of 
        his retirement annuity shall be credited;
If the 
        employee was in service with more than one employer 
        during this
period only the sick leave days with the 
        employer with which the employee
has the greatest 
        number of unpaid sick leave days shall be considered.

            b-1. If the employee was in the service of more 
        than one  employer as defined in item (2) of paragraph 
        (a) of subsection (A) of Section 7-132, then the sick 
        leave days from all such employers shall be credited, 
        as long as the creditable service attributed to those 
        sick leave days does not exceed the limitation in item 
        f of this paragraph 8. In calculating the creditable 
        service under this item b-1, the sick leave days from 
        the last employer shall be considered first, then the 
        remaining sick leave days shall be considered until 
        there are no more days or the maximum creditable sick 
        leave threshold under item f of this paragraph 8 has 
        been reached. 

            c. The creditable service granted shall be 
        considered solely for the
purpose of computing the 
        amount of the retirement annuity and shall not be
used 
        to establish any minimum service period required by any 
        provision of the
Illinois Pension Code, the effective 
        date of the retirement annuity, or the
final rate of 
        earnings.


            d. The creditable service shall be at the rate of 
        1/20 of a month for
each full sick day, provided that 
        no more than 12 months may be credited
under this 
        subdivision 8.


            e. Employee contributions shall not be required 
        for creditable service
under this subdivision 8.


            f. Each participating municipality and 
        participating instrumentality
with which an employee 
        has service within 60 days of the effective date of
his 
        retirement annuity shall certify to the board the 
        number of accumulated
unpaid sick leave days credited 
        to the employee at the time of termination
of service.


        9. For service transferred from another system:  
    Credits and
creditable service shall be granted for service 
    under Article 4, 5, 8, 14,
or 16 of this Act, to any active 
    member of this Fund, and to any
inactive member who has 
    been a county sheriff, upon
transfer of such credits 
    pursuant to Section 4-108.3, 5-235,
8-226.7,
14-105.6, or 
    16-131.4, and payment by the member of the amount by
which 
    (1) the employer and employee contributions that would have 
    been required
if he had participated in this Fund as a 
    sheriff's law enforcement employee
during the period for 
    which credit is
being transferred, plus interest thereon at 
    the effective rate for each
year,  compounded annually, from 
    the date of termination of the service for
which credit is 
    being transferred to the date of payment, exceeds (2) the

    amount actually transferred to the Fund.
Such transferred 
    service shall be deemed to be service as a sheriff's law

    enforcement employee for the purposes of Section 7-142.1.

        10. For service transferred from an Article 3 system 
    under Section 3-110.8:  Credits and
creditable service 
    shall be granted for service under Article 3 of this Act as 
    provided in Section 3-110.8, to any active member of this 
    Fund upon
transfer of such credits pursuant to Section 
    3-110.8. If the amount by
which (1) the employer and 
    employee contributions that would have been required
if he 
    had participated in this Fund during the period for which 
    credit is
being transferred, plus interest thereon at the 
    effective rate for each
year,  compounded annually, from the 
    date of termination of the service for
which credit is 
    being transferred to the date of payment, exceeds (2) the

    amount actually transferred to the Fund, then the amount of 
    creditable service established under this paragraph 10 
    shall be reduced by a corresponding amount in accordance 
    with the rules and procedures established under this 
    paragraph 10.

        The board shall establish by rule the manner of making 
    the calculation required under
this paragraph 10, taking 
    into account the appropriate actuarial
assumptions; the 
    member's service, age, and salary history; the level
of 
    funding of the employer; and
any other factors that the 
    board determines to be relevant.

        Until January 1, 2010, members who transferred service 
    from an Article 3 system under the provisions of Public Act 
    94-356 may establish additional credit in this Fund, but 
    only up to the amount of the service credit reduction in 
    that transfer, as calculated under the actuarial 
    assumptions. This credit may be established upon payment by 
    the member of an amount to be determined by the board, 
    equal to (1) the amount that would have been contributed as 
    employee and employer contributions had all the service 
    been as an employee under this Article, plus interest 
    thereon compounded annually from the date of service to the 
    date of transfer, less (2) the total amount transferred 
    from the Article 3 system, plus (3) interest on the 
    difference at the effective rate for each year, compounded 
    annually, from the date of the transfer to the date of 
    payment.  The additional service credit is allowed under 
    this amendatory Act of the 95th General Assembly 
    notwithstanding the provisions of Article 3 terminating 
    all transferred credits on the date of transfer. 
        11. For service transferred from an Article 3 system 
    under Section 3-110.3: Credits and creditable service 
    shall be granted for service under Article 3 of this Act as 
    provided in Section 3-110.3, to any active member of this 
    Fund, upon transfer of such credits pursuant to Section 
    3-110.3. If the board determines that the amount 
    transferred is less than the true cost to the Fund of 
    allowing that creditable service to be established, then in 
    order to establish that creditable service, the member must 
    pay to the Fund an additional contribution equal to the 
    difference, as determined by the board in accordance with 
    the rules and procedures adopted under this paragraph. If 
    the member does not make the full additional payment as 
    required by this paragraph prior to termination of his 
    participation with that employer, then his or her 
    creditable service shall be reduced by an amount equal to 
    the difference between the amount transferred under 
    Section 3-110.3, including any payments made by the member 
    under this paragraph prior to termination, and the true 
    cost to the Fund of allowing that creditable service to be 
    established, as determined by the board in accordance with 
    the rules and procedures adopted under this paragraph.
        The board shall establish by rule the manner of making 
    the calculation required under this paragraph 11, taking 
    into account the appropriate actuarial assumptions; the 
    member's service, age, and salary history, and any other 
    factors that the board determines to be relevant. 
    (b) Creditable service - amount:


        1. One month of creditable service
shall be allowed for 
    each month for which a participating employee made

    contributions as required under Section 7-173, or for which 
    creditable
service is otherwise granted hereunder.  Not 
    more than 1 month of
service shall be credited and counted 
    for 1 calendar month, and not more
than 1 year of service 
    shall be credited and counted for any calendar
year.  A 
    calendar month means a nominal month beginning on the first 
    day
thereof, and a calendar year means a year beginning 
    January 1 and ending
December 31.


        2. A seasonal employee shall be given 12 months of 
    creditable
service if he renders the number of months of 
    service normally required
by the position in a 12-month 
    period and he remains in service for the
entire 12-month 
    period.  Otherwise a fractional year of service in the

    number of months of service rendered shall be credited.


        3. An intermittent employee shall be given creditable 
    service for
only those months in which a contribution is 
    made under Section 7-173.

    (c) No application for correction of credits or creditable 
service shall
be considered unless the board receives an 
application for correction while
(1) the applicant is a 
participating employee and in active employment
with a 
participating municipality or instrumentality, or (2) while 
the
applicant is actively participating in a pension fund or 
retirement
system which is a participating system under the 
Retirement Systems
Reciprocal Act.  A participating employee or 
other applicant shall not be
entitled to credits or creditable 
service unless the required employee
contributions are made in 
a lump sum or in installments made in accordance
with board 
rule.

    (d) Upon the granting of a retirement, surviving spouse or 
child
annuity, a death benefit or a separation benefit, on 
account of any
employee, all individual accumulated credits 
shall thereupon terminate.
Upon the withdrawal of additional 
contributions, the credits applicable
thereto shall thereupon 
terminate.  Terminated credits shall not be applied
to increase 
the benefits any remaining employee would otherwise receive 
under
this Article.

(Source: P.A. 97-415, eff. 8-16-11; 98-439, eff. 8-16-13.)

 



    (40 ILCS 5/9-219)  (from Ch. 108 1/2, par. 9-219)



    Sec. 9-219. Computation of service. 

    (1) In computing the term of service of an employee prior 
to the effective
date, the entire period beginning on the date 
he was first appointed and
ending on the day before the 
effective date, except any intervening period
during which he 
was separated by withdrawal from service, shall be counted
for 
all purposes of this Article.

    (2) In computing the term of service of any employee on or 
after the
effective date, the following periods of time shall 
be counted as periods
of service for age and service, widow's 
and child's annuity purposes:


        (a) The time during which he performed the duties of 
    his position.


        (b) Vacations, leaves of absence with whole or part 
    pay, and leaves of
absence without pay not longer than 90 
    days.


        (c) For an employee who is a member of a county police 
    department or a
correctional officer with the county 
    department of corrections, approved
leaves of absence 
    without pay during which the
employee serves as a full-time 
    officer or employee of an employee
association, the 
    membership of which consists of other participants in the

    Fund, provided that the employee contributes to the
Fund 
    (1) the amount that he would have contributed had he 
    remained an active
employee in the position he
occupied at 
    the time the leave of absence was granted, (2) an amount 
    calculated
by the Board representing employer 
    contributions, and (3) regular interest
thereon from the 
    date of service to the date of payment.  However, if the

    employee's application to establish credit under this 
    subsection is received
by the Fund on or after July 1, 2002 
    and before July 1, 2003, the amount
representing employer 
    contributions specified in item (2) shall be waived.


        For a former member of a county police department who 
    has received a
refund under Section 9-164, periods during 
    which the employee serves as
head of an employee 
    association, the membership of which consists of other

    police officers, provided that the employee contributes to 
    the Fund (1) the
amount that he would have contributed had 
    he remained an active member of
the county police 
    department in the position he occupied at the time he
left 
    service, (2) an amount calculated by the Board representing 
    employer
contributions, and (3) regular interest thereon 
    from the date of service to
the date of payment.  However, 
    if the former member of the county police
department 
    retires on or after January 1, 1993 but no later than March 
    1,
1993, the amount representing employer contributions 
    specified in item (2)
shall be waived.

        For leaves of absence to which this item (c) applies 
    and for other periods to which this item (c) applies, 
    including those leaves of absence and other periods of 
    service beginning before January 5, 2012 (the effective 
    date of Public Act 97-651) this amendatory Act of the 97th 
    General Assembly, the employee or former member must 
    continue to remain in sworn status, subject to the 
    professional standards of the public employer or those 
    terms established in statute. 

        (d) Any period of disability for which he received 
    disability benefit or
whole or part pay.


        (e) For a person who first becomes an employee before

    the effective date of this amendatory Act of the 98th

    General Assembly, accumulated Accumulated vacation or 
    other time for which an employee who
retires on or after 
    November 1, 1990 receives a lump sum payment at the
time of 
    retirement, provided that contributions were made to the 
    fund at
the time such lump sum payment was received.  The 
    service granted for the
lump sum payment shall not change 
    the employee's date of withdrawal for
computing the 
    effective date of the annuity.


        (f) An employee who first becomes an employee before

    the effective date of this amendatory Act of the 98th

    General Assembly may receive service credit for annuity 
    purposes for
accumulated sick leave as of the date of the 
    employee's withdrawal from
service, not to exceed a total 
    of 180 days, provided that the amount of
such accumulated 
    sick leave is certified by the County Comptroller to the

    Board and the employee pays an amount equal to 8.5% (9% for 
    members
of the County Police Department who are eligible to 
    receive an annuity
under Section 9-128.1) of the amount 
    that would have been paid had such
accumulated sick leave 
    been paid at the employee's final rate of salary.
Such 
    payment shall be made within 30 days after the date of 
    withdrawal and
prior to receipt of the first annuity check.  
    The service credit granted
for such accumulated sick leave 
    shall not change the employee's date of
withdrawal for the 
    purpose of computing the effective date of the annuity.

    (3) In computing the term of service of an employee on or 
after the
effective date for ordinary disability benefit 
purposes, the following
periods of time shall be counted as 
periods of service:


        (a) Unless otherwise specified in Section 9-157, the 
    time during which
he performed the duties of his position.


        (b) Paid vacations and leaves of absence with whole or 
    part pay.


        (c) Any period for which he received duty disability 
    benefit.


        (d) Any period of disability for which he received 
    whole or part pay.

    (4) For an employee who on January 1, 1958, was transferred 
by Act
of the 70th General Assembly from his position in a 
department of welfare
of any city located in the county in 
which this Article is in force and
effect to a similar position 
in a department of such county, service shall
also be credited 
for ordinary disability benefit and child's annuity for
such 
period of department of welfare service during which period he 
was a
contributor to a statutory annuity and benefit fund in 
such city and for
which purposes service credit would otherwise 
not be credited by virtue of
such involuntary transfer.

    (5) An employee described in subsection (e) of Section 
9-108 shall receive
credit for child's annuity and ordinary 
disability benefit for the period of
time for which he was 
credited with service in the fund from which he was

involuntarily separated through class or group transfer; 
provided, that no such
credit shall be allowed to the extent 
that it results in a duplication of
credits or benefits, and 
neither shall such credit be allowed to the extent
that it was 
or may be forfeited by the application for and acceptance of a

refund from the fund from which the employee was transferred.

    (6) Overtime or extra service shall not be included in 
computing
service.  Not more than 1 year of service shall be 
allowed for service
rendered during any calendar year.

    (7) Unused sick or vacation time shall not be used to

compute the service of an employee who first becomes an

employee on or after the effective date of this amendatory Act

of the 98th General Assembly. 
(Source: P.A. 97-651, eff. 1-5-12.)

 



    (40 ILCS 5/9-220)  (from Ch. 108 1/2, par. 9-220)



    Sec. 9-220. Basis of service credit. 

    (a) In computing the period of service of any employee for 
annuity
purposes under Section 9-134, the following provisions 
shall govern:


        (1) All periods prior to the effective date shall be 
    computed in
accordance with the provisions governing the 
    computation of such
service.


        (2) Service on or after the effective date shall 
    include:


            (i) The actual period of time the employee 
        contributes or has
contributed to the fund for service 
        rendered to age 65 plus the actual
period of time after 
        age 65 for which the employee performs the duties of

        his position or performs such duties and is given a 
        county contribution for
age and service annuity or 
        minimum annuity purposes.


            (ii) Leaves of absence from duty, or vacation, for 
        which an
employee receives all or part of his salary.


            (iii) For a person who first becomes an employee 
        before
the effective date of this amendatory Act of the 
        98th
General Assembly, accumulated Accumulated 
        vacation or other time for which an employee who

        retires on or after November 1, 1990 receives a lump 
        sum payment at the
time of retirement, provided that 
        contributions were made to the fund at
the time such 
        lump sum payment was received.  The service granted for 
        the
lump sum payment shall not change the employee's 
        date of withdrawal for
computing the effective date of 
        the annuity.


            (iv) For a person who first becomes an employee 
        before
the effective date of this amendatory Act of the 
        98th
General Assembly, accumulated Accumulated sick 
        leave as of the date of the employee's
withdrawal from 
        service, not to exceed a total of 180 days, provided 
        that
the amount of such accumulated sick leave is 
        certified by the County
Comptroller to the Board and 
        the employee pays an amount equal to 8.5% (9%
for 
        members of the County Police Department who are 
        eligible to receive an
annuity under Section 9-128.1) 
        of the amount that would have been paid had
such 
        accumulated sick leave been paid at the employee's 
        final rate of
salary.  Such payment shall be made within 
        30 days after the date of
withdrawal and prior to 
        receipt of the first annuity check.  The service
credit 
        granted for such accumulated sick leave shall not 
        change the
employee's date of withdrawal for the 
        purpose of computing the effective
date of the annuity.


            (v) Periods during which the employee has had 
        contributions for
annuity purposes made for him in 
        accordance with law while on military
leave of absence 
        during World War II.


            (vi) Periods during which the employee receives a

        disability benefit under this Article.
            (vii) For any person who first becomes a member on 
        or after January 1, 2011, the actual period of time the 
        employee contributes or has contributed to the fund for 
        service rendered up to the limitation on salary in 
        subsection (b-5) of Section 1-160 plus the actual 
        period of time thereafter for which the employee 
        performs the duties of his position and ceased 
        contributing due to the salary limitation in 
        subsection (b-5) of Section 1-160. 


        (3) The right to have certain periods of time

    considered as service as stated in paragraph (2) of Section 
    9-164 shall
not apply for annuity purposes unless the 
    refunds shall have been repaid
in accordance with this 
    Article.


        (4) All service shall be computed
in whole calendar 
    months, and at least 15 days of service in any one
calendar 
    month shall constitute one calendar month of service, and 1

    year of service shall be equal to the number of months, 
    days or hours
for which an appropriation was made in the 
    annual appropriation
ordinance for the position held by the 
    employee.

        (5) Unused sick or vacation time shall not be used to

    compute the service of an employee who first becomes an

    employee on or after the effective date of this amendatory 
    Act
of the 98th General Assembly. 
    (b) For all other annuity purposes of this Article the 
following
schedule shall govern the computation of a year of 
service of an
employee whose salary or wages is on the basis 
stated, and any
fractional part of a year of service shall be 
determined according to
said schedule:

    Annual or Monthly Basis: Service during 4 months in any 1 
calendar
year;

    Weekly Basis: Service during any 17 weeks of any 1 calendar 
year, and
service during any week shall constitute a week of 
service;

    Daily Basis: Service during 100 days in any 1 calendar 
year, and
service during any day shall constitute a day of 
service;

    Hourly Basis: Service during 800 hours in any 1 calendar 
year, and
service during any hour shall constitute an hour of 
service.

(Source: P.A. 96-1490, eff. 1-1-11.)

 



    (40 ILCS 5/14-103.10)  (from Ch. 108 1/2, par. 14-103.10)



    Sec. 14-103.10. Compensation. 

    (a) For periods of service prior to January 1, 1978, the 
full rate of salary
or wages payable to an employee for 
personal services performed if he worked
the full normal 
working period for his position, subject to the following

maximum amounts: (1) prior to July 1, 1951, $400 per month or 
$4,800 per year;
(2) between July 1, 1951 and June 30, 1957 
inclusive, $625 per month or $7,500
per year; (3) beginning 
July 1, 1957, no limitation.

    In the case of service of an employee in a position 
involving
part-time employment, compensation shall be 
determined according to the
employees' earnings record.

    (b) For periods of service on and after January 1, 1978, 
all
remuneration for personal services performed defined as 
"wages" under
the Social Security Enabling Act, including that 
part of such
remuneration which is in excess of any maximum 
limitation provided in
such Act, and including any benefits 
received by an employee under a sick
pay plan in effect before 
January 1, 1981, but excluding lump sum salary
payments:


        (1) for vacation,


        (2) for accumulated unused sick leave,



        (3) upon discharge or dismissal,


        (4) for approved holidays.

    (c) For periods of service on or after December 16, 1978, 
compensation
also includes any benefits, other than lump sum 
salary payments made at
termination of employment, which an 
employee receives or is eligible to
receive under a sick pay 
plan authorized by law.

    (d) For periods of service after September 30, 1985, 
compensation also
includes any remuneration for personal 
services not included as "wages"
under the Social Security 
Enabling Act, which is deducted for purposes of
participation 
in a program established pursuant to Section 125 of the

Internal Revenue Code or its successor laws.

    (e) For members for which Section 1-160 applies for periods 
of service on and after January 1, 2011, all remuneration for 
personal services performed defined as "wages" under the Social 
Security Enabling Act, excluding remuneration that is in excess 
of the annual earnings, salary, or wages of a member or 
participant, as provided in subsection (b-5) of Section 1-160, 
but including any benefits received by an employee under a sick 
pay plan in effect before January 1, 1981.
Compensation shall 
exclude lump sum salary payments:
        (1) for vacation;
        (2) for accumulated unused sick leave;
        (3) upon discharge or dismissal; and
        (4) for approved holidays. 
    (f) Notwithstanding the other provisions of this Section, 
for service on or after July 1, 2013, "compensation"
does not 
include any stipend payable to an employee for service on a 
board or commission. 
    (g) Notwithstanding any other provision of this Section,

for an employee who first becomes a participant on or after the

effective date of this amendatory Act of the 98th General

Assembly, "compensation" does not include any payments or

reimbursements for travel vouchers submitted more than 30 days

after the last day of travel for which the voucher is

submitted. 
    (h) Notwithstanding any other provision of this Code, the

annual compensation of a Tier 1 member for the purposes of this 
Code
shall not exceed, for periods of service on or after the

effective date of this amendatory Act of the 98th General

Assembly, the greater of (i) the annual limitation determined 
from
time to time under subsection (b-5) of Section 1-160 of 
this
Code, (ii) the annualized compensation of the Tier 1 
member as of that effective date, or (iii) the annualized 
compensation of the Tier 1 member immediately preceding the 
expiration, renewal, or amendment of an employment contract or 
collective bargaining agreement in effect on that effective 
date. 
(Source: P.A. 98-449, eff. 8-16-13.)

 
    (40 ILCS 5/14-103.40 new)
    Sec. 14-103.40.  Tier 1 member. "Tier 1 member": A member 
of this System who first became a member or participant before 
January 1, 2011 under any reciprocal retirement system or 
pension fund established under this Code other than a 
retirement system or pension fund established under Article 2, 
3, 4, 5, 6, or 18 of this Code.
 



    (40 ILCS 5/14-104.3)  (from Ch. 108 1/2, par. 14-104.3)



    Sec. 14-104.3. 
Notwithstanding provisions contained in

Section 14-103.10, any person who first becomes a member before

the effective date of this amendatory Act of the 98th General

Assembly and who at the time of retirement and after December

6, 1983 receives compensation
in a lump sum for accumulated 
vacation, sickness, or personal business may
receive service 
credit for such periods by making contributions within 90
days 
of withdrawal, based on the rate of compensation in effect 
immediately
prior to retirement and the contribution rate then 
in effect. Any person who first becomes a member on or after

the effective date of this amendatory Act of the 98th General 
Assembly and who receives compensation in a lump sum for

accumulated vacation, sickness, or personal business may not

receive service credit for such periods.  Exercising
the option 
provided in
this Section shall not change a member's date of 
withdrawal or final average
compensation for purposes of 
computing the amount or effective date of a
retirement annuity.  
Any annuitant who establishes service credit as herein
provided 
shall have his retirement annuity adjusted retroactively to the

date of retirement.

(Source: P.A. 83-1362.)

 



    (40 ILCS 5/14-106)  (from Ch. 108 1/2, par. 14-106)



    Sec. 14-106. Membership service credit. 

    (a) After January 1, 1944, all
service of a member since he 
last became a member with respect to which
contributions are 
made shall count as membership service; provided, that
for 
service on and after July 1, 1950, 12 months of service shall

constitute a year of membership service, the completion of 15 
days or
more of service during any month shall constitute 1 
month of membership
service, 8 to 15 days shall constitute 1/2 
month of membership service
and less than 8 days shall 
constitute 1/4 month of membership service.
The payroll record 
of each department shall constitute conclusive
evidence of the 
record of service rendered by a member.

    (b) For a member who is employed and paid on an 
academic-year basis
rather than on a 12-month annual basis, 
employment for a full academic year
shall constitute a full 
year of membership service, except that the member
shall not 
receive more than one year of membership service credit (plus 
any
additional service credit granted for unused sick leave) 
for service during
any 12-month period.  This subsection (b) 
applies to all such service for which
the member has not begun 
to receive a retirement annuity before January 1,
2001.

    (c) A person who first becomes a member before
the 
effective date of this amendatory Act of the 98th General

Assembly shall be entitled to additional service credit, under

rules prescribed by the Board, for accumulated unused sick 
leave credited
to his account in the last Department on the 
date of withdrawal from
service or for any period for which he 
would have been eligible to receive
benefits under a sick pay 
plan authorized by law, if he had suffered a
sickness or 
accident on the date of withdrawal from service.  It shall be 
the
responsibility of the last Department to certify to the 
Board the length of
time salary or benefits would have been 
paid to the member based upon the
accumulated unused sick leave 
or the applicable sick pay plan if he had
become entitled 
thereto because of sickness on the date that his status as
an 
employee terminated.  This period of service credit granted 
under this
paragraph shall not be considered in determining the 
date the retirement
annuity is to begin, or final average 
compensation.

    (d) A person who first becomes a member on or after the 
effective date of this amendatory Act of the 98th General

Assembly shall not be entitled to additional service credit for

accumulated unused sick leave. 
(Source: P.A. 92-14, eff. 6-28-01.)

 



    (40 ILCS 5/14-107)  (from Ch. 108 1/2, par. 14-107)



    Sec. 14-107. Retirement annuity - service and age - 
conditions.  
    (a) A member is entitled to a retirement annuity after 
having at least 8 years of
creditable service.

    (b) A member who has at least 35 years of creditable 
service may claim his
or her retirement annuity at any age.
A 
member having at least 8 years of creditable service but less 
than 35 may
claim his or her retirement annuity upon or after 
attainment of age 60
or, beginning January 1, 2001, any lesser 
age which, when added to the
number of years of his or her 
creditable service, equals at least 85.
A member upon or after 
attainment of age 55 having at least 25 years of creditable 
service (30 years if retirement is before
January 1, 2001) may 
elect to receive the lower retirement annuity provided
in 
paragraph (c) of Section 14-108 of this Code.  For purposes of 
the rule
of 85, portions of years shall be counted in whole 
months.

    (c) Notwithstanding subsection (b) of this Section, for a 
Tier 1 member who begins receiving a retirement annuity under 
this Section on or after July 1, 2014, the required retirement 
age under subsection (b) is increased as follows, based on the 
Tier 1 member's age on June 1, 2014: 
        (1) If he or she is at least age 46  on June 1, 2014, 
    then the required retirement ages under subsection (b) 
    remain unchanged.
        (2) If he or she is at least age 45 but less than age 46 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 4 months.
        (3) If he or she is at least age 44 but less than age 45 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 8 months.
        (4) If he or she is at least age 43 but less than age 44 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 12 months.
        (5) If he or she is at least age 42 but less than age 43 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 16 months.
        (6) If he or she is at least age 41 but less than age 42 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 20 months.
        (7) If he or she is at least age 40 but less than age 41 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 24 months.
        (8) If he or she is at least age 39 but less than age 40 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 28 months.
        (9) If he or she is at least age 38 but less than age 39 
    on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 32 months.
        (10) If he or she is at least age 37 but less than age 
    38 on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 36 months.
        (11) If he or she is at least age 36 but less than age 
    37 on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 40 months.
        (12) If he or she is at least age 35 but less than age 
    36 on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 44 months.
        (13) If he or she is at least age 34 but less than age 
    35 on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 48 months.
        (14) If he or she is at least age 33 but less than age 
    34 on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 52 months.
        (15) If he or she is at least age 32 but less than age 
    33 on June 1, 2014, then the required retirement ages under 
    subsection (b) are increased by 56 months.
        (16) If he or she is less than age 32 on June 1, 2014, 
    then the required retirement ages under subsection (b) are 
    increased by 60 months.
    Notwithstanding Section 1-103.1, this subsection (c) 
applies without regard to whether or not the Tier 1 member is 
in active service under this Article on or after  the effective 
date of this amendatory Act of the 98th General Assembly. 
    (d) The allowance shall begin with the first full calendar 
month specified in the
member's application therefor, the first 
day of which shall not be before the
date of withdrawal as 
approved by the board.  Regardless of the date of
withdrawal, 
the allowance need not begin within one year of application

therefor.

(Source: P.A. 91-927, eff. 12-14-00.)

 



    (40 ILCS 5/14-108)  (from Ch. 108 1/2, par. 14-108)



    Sec. 14-108.  Amount of retirement annuity. A member who 
has contributed to the System for at least 12 months shall
be 
entitled to a prior service annuity for each year of certified 
prior
service credited to him, except that a member shall 
receive 1/3 of the prior
service annuity for each year of 
service for which contributions have been
made and all of such 
annuity shall be payable after the member has made

contributions for a period of 3 years.  Proportionate amounts 
shall be payable
for service of less than a full year after 
completion of at least 12 months.

    The total period of service to be considered in 
establishing the measure
of prior service annuity shall include 
service credited in the Teachers'
Retirement System of the 
State of Illinois and the State Universities
Retirement System 
for which contributions have been made by the member to
such 
systems; provided that at least 1 year of the total period of 3 
years
prescribed for the allowance of a full measure of prior 
service annuity
shall consist of membership service in this 
system for which credit has been
granted.

    (a) In the case of a member who retires on or after January 
1, 1998 and
is a noncovered employee, the retirement annuity 
for membership service and
prior service shall be 2.2% of final 
average compensation for each year of
service.  Any service 
credit established as a covered employee shall be
computed as 
stated in
paragraph (b).

    (b) In the case of a member who retires on or after January 
1, 1998
and is a covered employee, the retirement annuity for 
membership
service and prior service shall be computed as 
stated in paragraph (a) for
all service credit established as a 
noncovered employee; for service credit
established as a 
covered employee it shall be 1.67% of final average

compensation for each year of service.

    (c) For a member
retiring after attaining age 55 but before 
age 60 with at least 30 but less
than 35 years of creditable 
service if retirement is before January 1, 2001, or
with at 
least 25 but less than 30 years of creditable service if 
retirement is
on or after January 1, 2001, the retirement 
annuity shall be reduced by 1/2
of 1% for each month that the 
member's age is under age 60 at the time of
retirement. For 
members to whom subsection (c) of Section 14-107 applies, the 
references to age 55 and 60 in this subsection (c) are 
increased as provided in subsection (c) of Section 14-107. 

    (d) A retirement annuity shall not exceed 75% of final 
average compensation,
subject to such extension as may result 
from the application of Section 14-114
or Section 14-115.

    (e) The retirement annuity payable to any covered employee 
who is a member
of the System and in service on January 1, 
1969, or in service thereafter
in 1969 as a result of 
legislation enacted by the Illinois General Assembly

transferring the member to State employment from county 
employment in a
county Department of Public Aid in counties of 
3,000,000 or more population,
under a plan of coordination with 
the Old Age, Survivors and Disability
provisions thereof, if 
not fully insured for Old Age Insurance payments
under the 
Federal Old Age, Survivors and Disability Insurance provisions

at the date of acceptance of a retirement annuity, shall not be 
less than
the amount for which the member would have been 
eligible if coordination
were not applicable.

    (f) The retirement annuity payable to any covered employee 
who is a member
of the System and in service on January 1, 
1969, or in service thereafter
in 1969 as a result of the 
legislation designated in the immediately preceding
paragraph, 
if fully insured for Old Age Insurance payments under the 
Federal
Social Security Act at the date of acceptance of a 
retirement annuity, shall
not be less than an amount which when 
added to the Primary Insurance Benefit
payable to the member 
upon attainment of age 65 under such Federal Act,
will equal 
the annuity which would otherwise be payable if the coordinated

plan of coverage were not applicable.

    (g) In the case of a member who is a noncovered employee, 
the retirement
annuity for membership service as a security 
employee of the Department of
Corrections or security employee 
of the Department of Human Services shall
be:  if retirement 
occurs on or after January 1, 2001, 3% of final average

compensation for each year of creditable service; or if 
retirement occurs
before January 1, 2001, 1.9% of final average 
compensation for each of the
first 10 years of service, 2.1% 
for each of the next 10 years of
service, 2.25% for each year 
of service in excess of 20 but not
exceeding 30, and 2.5% for 
each year in excess of 30; except that the
annuity may be 
calculated under subsection (a) rather than this subsection (g)

if the resulting annuity is greater.

    (h) In the case of a member who is a covered employee, the 
retirement
annuity for membership service as a security 
employee of the Department of
Corrections or security employee 
of the Department of Human Services shall
be:  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 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.

    (i) For the purposes of this Section and Section 14-133 of 
this Act,
the term "security employee of the Department of 
Corrections" and the term
"security employee of the Department 
of Human Services" shall have the
meanings ascribed to them in 
subsection (c) of Section 14-110.

    (j) The retirement annuity computed pursuant to paragraphs 
(g) or (h)
shall be applicable only to those security employees 
of the Department of
Corrections and security employees of the 
Department of Human Services who
have at least 20 years of 
membership service and who are not eligible for
the alternative 
retirement annuity provided under Section 14-110.  However,

persons transferring to this System under Section 14-108.2 or 
14-108.2c
who have service credit under Article 16 of this Code 
may count such service
toward establishing their eligibility 
under the 20-year service requirement of
this subsection; but 
such service may be used only for establishing such

eligibility, and not for the purpose of increasing or 
calculating any benefit.

    (k) (Blank).

    (l) The changes to this Section made by this amendatory Act 
of 1997
(changing certain retirement annuity formulas from a 
stepped rate to a flat
rate) apply to members who retire on or 
after January 1, 1998, without regard
to whether employment 
terminated before the effective date of this amendatory
Act of 
1997.  An annuity shall not be calculated in steps by using the 
new flat
rate for some steps and the superseded stepped rate 
for other steps of the same
type of service.

(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)

 


    (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.

    (a-5) Notwithstanding subsection (a) of this Section, for a 
Tier 1 member who begins receiving a retirement annuity under 
this Section on or after July 1, 2014, the required retirement 
age under subsection (a) is increased as follows, based on the 
Tier 1 member's age on June 1, 2014: 
        (1) If he or she is at least age 46  on June 1, 2014, 
    then the required retirement ages under subsection (a) 
    remain unchanged.
        (2) If he or she is at least age 45 but less than age 46 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 4 months.
        (3) If he or she is at least age 44 but less than age 45 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 8 months.
        (4) If he or she is at least age 43 but less than age 44 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 12 months.
        (5) If he or she is at least age 42 but less than age 43 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 16 months.
        (6) If he or she is at least age 41 but less than age 42 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 20 months.
        (7) If he or she is at least age 40 but less than age 41 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 24 months.
        (8) If he or she is at least age 39 but less than age 40 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 28 months.
        (9) If he or she is at least age 38 but less than age 39 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 32 months.
        (10) If he or she is at least age 37 but less than age 
    38 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 36 months.
        (11) If he or she is at least age 36 but less than age 
    37 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 40 months.
        (12) If he or she is at least age 35 but less than age 
    36 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 44 months.
        (13) If he or she is at least age 34 but less than age 
    35 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 48 months.
        (14) If he or she is at least age 33 but less than age 
    34 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 52 months.
        (15) If he or she is at least age 32 but less than age 
    33 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 56 months.
        (16) If he or she is less than age 32 on June 1, 2014, 
    then the required retirement ages under subsection (a) are 
    increased by 60 months.
    Notwithstanding Section 1-103.1, this subsection (a-5) 
applies without regard to whether or not the Tier 1 member is 
in active service under this Article on or after  the effective 
date of this amendatory Act of the 98th General Assembly. 
    (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 or the 
    Illinois Gaming Board;


        (8) security employee of the Department of Human 
    Services;


        (9) Central Management Services security police 
    officer;


        (10) security employee of the Department of 
    Corrections or the Department of Juvenile Justice;


        (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.

        The term "investigator for the Illinois Gaming Board" 
    means any
person employed as such by the Illinois Gaming 
    Board and vested with such
peace officer 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.


        (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 term "security 
    employee of the Department of Corrections or the Department 
    of Juvenile Justice"
means any employee of the Department 
    of Corrections or the Department of Juvenile Justice or the 
    former
Department of Personnel, and any member or employee 
    of the Prisoner
Review Board, who has daily contact with 
    inmates or youth by working within a
correctional facility 
    or Juvenile facility operated by the Department of Juvenile 
    Justice 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 or 
    the Department of Juvenile Justice who is any of the 
    following: (i) officially headquartered at a correctional 
    facility or Juvenile facility operated by the Department of 
    Juvenile Justice, (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 or 
the Department of Juvenile Justice, 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.

    For members to whom subsection (a-5) of this Section 
applies, the references to age 50 and 55 in item (vi) of this 
subsection are increased as provided in subsection (a-5). 
    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 Juvenile Justice, 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.

    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 5 years of
service as a police 
officer under Article 3, a policeman under Article 5, a 
sheriff's law enforcement employee under Article 7, a member of 
the county police department under Article 9, or a police 
officer under Article 15 by filing
a written election with the 
Board and paying
to the System 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
3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4 
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), an 
investigator for the Office of the Attorney General, or an 
investigator for the Department of Revenue, may elect to 
establish eligible creditable service for up to 5 years of 
service as a police officer under Article 3, a policeman under 
Article 5, a sheriff's law enforcement employee under Article 
7, or a member of the county police department under Article 9 
by filing a written election with the Board within 6 months  
after August 25, 2009 (the effective date of Public Act 96-745) 
and paying to the System 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 3-110.6, 5-236, 7-139.8, or 9-121.10 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 actuarially assumed 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, investigator for the 
Office of the Attorney General, an investigator for the 
Department of Revenue, or investigator for the Secretary of 
State may elect to establish eligible creditable service for up 
to 5 years of service as a person employed by a participating 
municipality to perform police duties, or law enforcement 
officer employed on a full-time basis by a forest preserve 
district under Article 7, a county corrections officer, or a 
court services officer under Article 9, by filing a written 
election with the Board within 6 months after August 25, 2009 
(the effective date of Public Act 96-745)  and paying to the 
System 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 Sections 7-139.8 
and 9-121.10 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 actuarially 
assumed 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.

    (m) The amendatory changes to this Section made by this 
amendatory Act of the 94th General Assembly apply only to: (1) 
security employees of the Department of Juvenile Justice 
employed by the Department of Corrections before the effective 
date of this amendatory Act of the 94th General Assembly and 
transferred to the Department of Juvenile Justice by this 
amendatory Act of the 94th General Assembly; and (2) persons 
employed by the Department of Juvenile Justice on or after the 
effective date of this amendatory Act of the 94th General 
Assembly who are required by subsection (b) of Section 3-2.5-15 
of the Unified Code of Corrections to have a bachelor's or 
advanced degree from an accredited college or university with a 
specialization in criminal justice, education, psychology, 
social work, or a closely related social science or, in the 
case of persons who provide vocational training, who are 
required to have adequate knowledge in the skill for which they 
are providing the vocational training.

    (n) A person employed in a position under subsection (b) of 
this Section who has purchased service credit under subsection 
(j) of Section 14-104 or subsection (b) of Section 14-105 in 
any other capacity under this Article may convert up to 5 years 
of that service credit into service credit covered under this 
Section by paying to the Fund an amount equal to (1) the 
additional employee contribution required under Section 
14-133, plus (2) the additional employer contribution required 
under Section 14-131, plus (3) interest on items (1) and (2) at 
the actuarially assumed rate from the date of the service to 
the date of payment. 
(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09; 
96-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff. 
7-2-10.)

 



    (40 ILCS 5/14-114)  (from Ch. 108 1/2, par. 14-114)



    Sec. 14-114. Automatic increase in retirement annuity. 

    (a) This subsection (a) is subject to subsections (a-1) and 
(a-2) of this Section. Any person receiving a retirement 
annuity under this Article who
retires having attained age 60, 
or who retires before age 60 having at
least 35 years of 
creditable service, or who retires on or after January
1, 2001 
at an age which, when added to the number of years of his or her

creditable service, equals at least 85, shall, on January 1 
next
following the first full year of retirement, have the 
amount of the then fixed
and payable monthly retirement annuity 
increased 3%.   Any person receiving a
retirement annuity under 
this Article who retires before attainment of age 60
and with 
less than (i) 35 years of creditable service if retirement
is 
before January 1, 2001, or (ii) the number of years of 
creditable service
which, when added to the member's age, would 
equal 85, if retirement is on
or after January 1, 2001, shall 
have the amount of the fixed and payable
retirement annuity 
increased by 3% on the January 1 occurring on or next
following 
(1) attainment of age 60, or (2) the first anniversary of 
retirement,
whichever occurs later.  However, for persons who 
receive the alternative
retirement annuity under Section 
14-110, references in this subsection (a) to
attainment of age 
60 shall be deemed to refer to attainment of age 55.  For a

person receiving early retirement incentives under Section 
14-108.3 whose
retirement annuity began after January 1, 1992 
pursuant to an extension granted
under subsection (e) of that 
Section, the first anniversary of retirement shall
be deemed to 
be January 1, 1993.
For a person who retires on or after June 
28, 2001 and on or before October 1, 2001,
and whose retirement 
annuity is calculated, in whole or in part, under Section

14-110 or subsection (g) or (h) of Section 14-108, the first 
anniversary of
retirement shall be deemed to be January 1, 
2002.

    On each January 1 following the date of the initial 
increase under this
subsection, the employee's monthly 
retirement annuity shall be increased
by an additional 3%.

    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 previous increases granted
under this Article.

    (a-1) Notwithstanding subsection (a), but subject to the 
provisions of subsection (a-2), all automatic increases 
payable under subsection (a) on or after the effective date of 
this amendatory Act of the 98th General Assembly shall be 
calculated as 3% of the lesser of (1) the total annuity
payable 
at the time of the increase, including previous
increases 
granted, or (2) $800 ($1,000 for portions of the annuity based

on service as a noncovered employee) multiplied by
the number 
of years of creditable service upon which the
annuity is based. 
    Beginning January 1, 2016, the $800 ($1,000 for portions of 
the annuity based
on service as a noncovered employee) referred 
in item (2) of this subsection (a-1) shall be increased on each 
January 1 by the annual unadjusted percentage increase (but not 
less than zero) in the consumer price index-u for the 12 months 
ending with the preceding September; these adjustments shall be 
cumulative and compounded.
For the purposes of this subsection 
(a-1), "consumer price index-u" means the index published by 
the Bureau of Labor Statistics of the United States Department 
of Labor that measures the average change in prices of goods 
and services purchased by all urban consumers, United States 
city average, all items, 1982-84 = 100. The new dollar amount 
resulting from each annual adjustment shall be determined by 
the Public Pension Division of the Department of Insurance and 
made available to the System by November 1 of each year. 
    This subsection (a-1) is applicable without regard to 
whether the person is in service on or after the effective date 
of  this amendatory Act of the 98th General Assembly. 
    (a-2) Notwithstanding subsections (a) and (a-1), for an 
active or inactive Tier 1 member who has not begun to receive a 
retirement annuity under this Article before July 1, 2014:
        (1) the second automatic annual increase payable under 
    subsection (a) shall be at the rate of 0% of the total 
    annuity payable at the time of the increase if he or she is 
    at least age 50 on the effective date of this amendatory 
    Act; 
        (2) the second, fourth,  and sixth automatic annual 
    increases payable under subsection (a) shall be at the rate 
    of 0% of the total annuity payable at the time of the 
    increase if he or she is at least age 47 but less than age 
    50 on the effective date of this amendatory Act;
        (3) the second, fourth, sixth, and eighth automatic 
    annual increases payable under subsection (a) shall be at 
    the rate of 0% of the total annuity payable at the time of 
    the increase if he or she is at least age 44 but less than 
    age 47 on the effective date of this amendatory Act; and
        (4) the second, fourth, sixth, eighth, and tenth 
    automatic annual increases payable under subsection (a) 
    shall be at the rate of 0% of the total annuity payable at 
    the time of the increase if he or she is less than age 44 on 
    the effective date of this amendatory Act. 
    For the purposes of Section 1-103.1, this subsection (a-2) 
is applicable without regard to whether the person is in 
service on or after the effective date of  this amendatory Act 
of the 98th General Assembly. 
    (b) The provisions of subsection (a) of this Section shall 
be
applicable to an employee only if the employee makes the 
additional
contributions required after December 31, 1969 for 
the purpose of the
automatic increases for not less than the 
equivalent of one full year.
If an employee becomes an 
annuitant before his additional contributions
equal one full 
year's contributions based on his salary at the date of

retirement, the employee may pay the necessary balance of the

contributions to the system, without interest, and be eligible 
for the
increasing annuity authorized by this Section.

    (c) The provisions of subsection (a) of this Section shall 
not be
applicable to any annuitant who is on retirement on 
December 31, 1969, and
thereafter returns to State service, 
unless the member has established at
least one year of 
additional creditable service following reentry into service.

    (d) In addition to other increases which may be provided by 
this Section,
on January 1, 1981 any annuitant who was 
receiving a retirement annuity
on or before January 1, 1971 
shall have his retirement annuity then being
paid increased $1 
per month for each year of creditable service.  On January
1, 
1982, any annuitant who began receiving a retirement annuity on 
or
before January 1, 1977, shall have his retirement annuity 
then being paid
increased $1 per month for each year of 
creditable service.

    On January 1, 1987, any annuitant who began receiving a 
retirement
annuity 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.

    (e) Every person who receives the alternative retirement 
annuity under
Section 14-110 and who is eligible to receive the 
3% increase under subsection
(a) on January 1, 1986, shall also 
receive on that date a one-time increase
in retirement annuity 
equal to the difference between (1) his actual
retirement 
annuity on that date, including any increases received under

subsection (a), and (2) the amount of retirement annuity he 
would have
received on that date if the amendments to 
subsection (a) made by Public
Act 84-162 had been in effect 
since the date of his retirement.

(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;

92-651, eff. 7-11-02.)

 



    (40 ILCS 5/14-115)  (from Ch. 108 1/2, par. 14-115)



    Sec. 14-115. Supplemental Annuity. 
    (a) Each annuitant, who retired at age
55 or over and after 
the completion of at least 15 years of creditable
service, 
whose status as an employee terminated before January 1, 1970,

is entitled to a monthly supplemental annuity effective January 
1, 1970,
or on January 1 nearest the annuitant's 65th birthday, 
whichever is
later. Such supplemental annuity shall be 1-1/2% 
of the monthly
retirement annuity, multiplied by the number of 
full years which elapsed
from the date of the member's latest 
retirement to the effective date of
the supplemental annuity. 
This monthly supplemental annuity shall be
increased on each 
January 1 thereafter during the lifetime of the
annuitant by 
1-1/2% of the monthly retirement annuity disregarding any

supplemental annuity previously granted. Beginning January 1, 
1972, the
rate of increase in the supplemental annuity shall be 
2%.  Beginning January
1, 1979, the rate of increase in the 
supplemental annuity shall be 3%.

    The supplemental annuity under this subsection is payable 
only if the
annuitant pays to the System, in a single sum, an 
amount equal to 1% of his
monthly final average compensation 
multiplied by the number of full years
of creditable service.

    (b) Any member who retired with less than 15 years of 
creditable service
whose status as an employee terminated 
before January 1, 1970, shall be
entitled to an increase of 3% 
of the original monthly retirement allowance,
effective 
January 1, 1982, or on January 1 nearest the annuitant's 65th

birthday, whichever is later.  On each January 1 thereafter 
during the lifetime
of the member, he shall be entitled to an 
additional increase of 3% of the
original monthly retirement 
allowance.  No qualifying contribution is required
for the 
supplemental annuity under this subsection.

    (c) Beginning January 1, 1990, all automatic annual 
increases payable
under this Section shall be calculated as a 
percentage of the total monthly
amount of annuity payable at 
the time of the increase, including any
supplemental annuity or 
other increase previously granted under this Article.

    (d) Notwithstanding any other provision of this Section, 
all increases payable under this Section on or after the 
effective date of this amendatory Act of the 98th General 
Assembly shall be calculated as 3% of the lesser of (1) the 
total annuity
payable at the time of the increase, including 
previous
increases granted, or (2) $800 ($1,000 for portions of 
the annuity based
on service as a noncovered employee) 
multiplied by
the number of years of creditable service upon 
which the
annuity is based. 
    Beginning January 1, 2016, the $800 ($1,000 for portions of 
the annuity based
on service as a noncovered employee) referred 
in item (2) of this subsection (d) shall be increased on each 
January 1 by the annual unadjusted percentage increase (but not 
less than zero) in the consumer price index-u for the 12 months 
ending with the preceding September; these adjustments shall be 
cumulative and compounded.
For the purposes of this subsection 
(d), "consumer price index-u" means the index published by the 
Bureau of Labor Statistics of the United States Department of 
Labor that measures the average change in prices of goods and 
services purchased by all urban consumers, United States city 
average, all items, 1982-84 = 100. The new dollar amount 
resulting from each annual adjustment shall be determined by 
the Public Pension Division of the Department of Insurance and 
made available to the System by November 1 of each year. 
    This subsection (d) is applicable without regard to whether 
the person is in service on or after the effective date of  this 
amendatory Act of the 98th General Assembly. 
(Source: P.A. 86-273.)

 
 

    (40 ILCS 5/14-131)

 
    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 100% 90% funded basis in accordance with 
actuarial recommendations  by the end of State fiscal year 2044.

    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.

    (c-1)  Notwithstanding subsection (c) of this Section, for 
fiscal years 2010, 2012, 2013, and 2014 only, contributions by 
the several departments are not required to be made for General 
Revenue Funds payrolls processed by the Comptroller.  Payrolls 
paid by the several departments from all other State funds must 
continue to be processed pursuant to subsection (c) of this 
Section.
    (c-2) For State fiscal years 2010, 2012, 2013, and 2014 
only, 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 fiscal year General Revenue Fund 
contribution as certified by the System pursuant to Section 
14-135.08 of the Illinois Pension Code. 
    (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 2015 through 2044, 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 
equal to the sum of (1) the State's portion of the projected 
normal cost for that fiscal year, plus (2) an amount sufficient 
to bring the total assets of the
System up to 100% of the total 
actuarial liabilities of the System by the end of
State fiscal 
year 2044.  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 2044 and shall be
determined under the projected 
unit cost method for fiscal year 2015 and under the entry age 
normal actuarial cost method for fiscal years 2016 through 
2044.
    For State fiscal years 2012 through 2014 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, 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 2009, 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.

    Notwithstanding any other provision of this Article, the 
total required State General Revenue Fund contribution for 
State fiscal year 2010 is $723,703,100 and shall be made from 
the proceeds of bonds sold in fiscal year 2010 pursuant to 
Section 7.2 of the General Obligation Bond Act, less (i) the 
pro rata share of bond sale expenses determined by the System's 
share of total bond proceeds, (ii) any amounts received from 
the General Revenue Fund in fiscal year 2010, and (iii) any 
reduction in bond proceeds due to the issuance of discounted 
bonds, if applicable. 
    Notwithstanding any other provision of this Article, the

total required State General Revenue Fund contribution for

State fiscal year 2011 is the amount recertified by the System 
on or before April 1, 2011 pursuant to Section 14-135.08 and 
shall be made from
the proceeds of bonds sold in fiscal year 
2011 pursuant to
Section 7.2 of the General Obligation Bond 
Act, less (i) the
pro rata share of bond sale expenses 
determined by the System's
share of total bond proceeds, (ii) 
any amounts received from
the General Revenue Fund in fiscal 
year 2011, and (iii) any
reduction in bond proceeds due to the 
issuance of discounted
bonds, if applicable. 
    Beginning in State fiscal year 2045, the minimum State 
contribution for each fiscal year shall be the amount needed to 
maintain the total assets of the System at 100% of the total 
actuarial liabilities of the System. 
    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.

    Amounts received by the System pursuant to Section 25 of 
the Budget Stabilization Act or Section 8.12 of the State 
Finance Act in any fiscal year do not reduce and do not 
constitute payment of any portion of the minimum State 
contribution required under this Article in that fiscal year.  
Such amounts shall not reduce, and shall not be included in the 
calculation of, the required State contributions under this 
Article in any future year until the System has reached a 
funding ratio of at least 100%  90%.  A reference in this Article 
to the "required State contribution" or any substantially 
similar term does not include or apply to any amounts payable 
to the System under  Section 25 of the Budget Stabilization Act.

    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 through State 
fiscal year 2014, 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 in fiscal 
year 2003 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 in fiscal year 2003 
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.

    (g) For purposes of determining the required State 
contribution to the System, the value of the System's assets 
shall be equal to the actuarial value of the System's assets, 
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's 
assets shall be equal to the market value of the assets as of 
that date.  In determining the actuarial value of the System's 
assets for fiscal years after June 30, 2008, any actuarial 
gains or losses from investment return incurred in a fiscal 
year shall be recognized in equal annual amounts over the 
5-year period following that fiscal year. 
    (h) For purposes of determining the required State 
contribution to the System for a particular year, the actuarial 
value of assets shall be assumed to earn a rate of return equal 
to the System's actuarially assumed rate of return. 
    (i)  After the submission of all payments for eligible 
employees from personal services line items paid from the 
General Revenue Fund in fiscal year 2010 have been made, the 
Comptroller shall provide to the System a certification of the 
sum of all fiscal year 2010 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 
96th 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 2010 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 2010 through payments under this Section. If the amount 
due is more than the amount received, the difference shall be 
termed the "Fiscal Year 2010 Shortfall" for purposes of this 
Section, and the Fiscal Year 2010 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 2010 
Overpayment" for purposes of this Section, and the Fiscal Year 
2010 Overpayment shall be repaid by the System to the General 
Revenue Fund as soon as practicable after the certification.
    (j) After the submission of all payments for eligible 
employees from personal services line items paid from the 
General Revenue Fund in fiscal year 2011 have been made, the 
Comptroller shall provide to the System a certification of the 
sum of all fiscal year 2011 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 
96th 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 2011 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 2011 through payments under this Section. If the amount 
due is more than the amount received, the difference shall be 
termed the "Fiscal Year 2011 Shortfall" for purposes of this 
Section, and the Fiscal Year 2011 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 2011 
Overpayment" for purposes of this Section, and the Fiscal Year 
2011 Overpayment shall be repaid by the System to the General 
Revenue Fund as soon as practicable after the certification.
    (k) For fiscal years 2012 through 2014 only, after the 
submission of all payments for eligible employees from personal 
services line items paid from the General Revenue Fund in the 
fiscal year have been made, the Comptroller shall provide to 
the System a certification of the sum of all expenditures in 
the fiscal year for personal services. 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 the fiscal year 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 for the 
fiscal year. If the amount due is more than the amount 
received, the difference shall be termed the "Prior Fiscal Year 
Shortfall" for purposes of this Section, and the Prior Fiscal 
Year  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 "Prior Fiscal Year Overpayment" for purposes of this 
Section, and the Prior Fiscal Year Overpayment shall be repaid 
by the System to the General Revenue Fund as soon as 
practicable after the certification. 
(Source: P.A. 97-72, eff. 7-1-11; 97-732, eff. 6-30-12; 98-24, 
eff. 6-19-13.)

  
 



    (40 ILCS 5/14-132)  (from Ch. 108 1/2, par. 14-132)



    Sec. 14-132. Obligations of State; funding guarantee. 
    (a) The payment of the required department
contributions, 
all allowances,
annuities, benefits granted under this 
Article, and all expenses of
administration of the system are 
obligations of the State of Illinois to
the extent specified in 
this Article.

    (b) All income of the system
shall be credited to a 
separate account for this system in the State
treasury and 
shall be used to pay allowances, annuities, benefits and

administration expense.

    (c) Beginning July 1, 2014, the State shall be obligated to 
contribute to the System in each State fiscal year an amount 
not less than the sum of (i) the State's normal cost for the 
year and (ii) the portion of the unfunded accrued liability 
assigned to that year by law. Notwithstanding any other 
provision of  law, if the State fails to pay an amount required 
under this subsection, it shall be the obligation of the Board 
to seek payment of the required amount in compliance with the 
provisions of this Section and, if the amount remains unpaid, 
to bring a mandamus action in the Supreme Court of Illinois to 
compel the State to make the required payment. 
    If the System submits a voucher for contributions  required 
under Section 14-131 and the State fails to pay that voucher 
within 90 days of its receipt, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State, 
if the amount remains unpaid the Board shall commence a 
mandamus action in the Supreme Court of Illinois to compel the 
Comptroller to satisfy the voucher. 
    This subsection (c) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to pay a voucher for the 
contributions required under Section 14-131.
    (d) Beginning in State fiscal year 2016, the State shall be 
obligated to make the transfers set forth in subsections (c-5) 
and (c-10) of Section 20 of the Budget Stabilization Act and to 
pay to the System its proportionate share of the transferred 
amounts in accordance with Section 25 of the Budget 
Stabilization Act.  Notwithstanding any other provision of  law, 
if the State fails to transfer an amount required under this 
subsection or to pay to the System its proportionate share of 
the transferred amount in accordance with Section 25 of the 
Budget Stabilization Act, it shall be the obligation of the 
Board to seek transfer or payment of the required amount in 
compliance with the provisions of this Section and,  if the 
required amount remains untransferred or the required payment 
remains unpaid, to bring a mandamus action in the Supreme Court 
of Illinois to compel the State to make the required transfer 
or payment or both, as the case may be. 
    If the State fails to make a transfer  required under 
subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act or a payment to the System required under 
Section 25 of that Act, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State,  
if the required amount remains untransferred or the required 
payment remains unpaid, the Board shall commence a mandamus 
action in the Supreme Court of Illinois to compel the 
Comptroller to make the required transfer or payment or both, 
as the case may be. 
    This subsection (d) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to make a transfer required 
under subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act and to pay to the System its proportionate 
share of the transferred amount in accordance with Section 25 
of the Budget Stabilization Act.
    The obligations created by this subsection (d) expire when 
all of the requirements of subsections  (c-5) and (c-10) of 
Section 20 of the Budget Stabilization Act and Section 25 of 
the Budget Stabilization Act have been met. 
    (e) Any payments and transfers required to be made by the 
State pursuant to subsection (c) or (d) are expressly 
subordinate to the payment of the principal, interest, and 
premium, if any, on any bonded debt obligation of the State or 
any other State-created entity, either currently outstanding 
or to be issued, for which the source of repayment or security 
thereon is derived directly or indirectly from tax revenues 
collected by the State or any other State-created entity. 
Payments on such bonded obligations include any statutory fund 
transfers or other prefunding mechanisms or formulas set forth, 
now or hereafter, in State law or bond indentures, into debt 
service funds or accounts of the State related to such bond 
obligations, consistent with the payment schedules associated 
with such obligations.
(Source: P.A. 80-841.)

 



    (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)



    Sec. 14-133. Contributions on behalf of members. 

    (a) Except as provided in subsection (a-5), each Each 
participating employee shall make contributions to the System,

based on the employee's compensation, as follows:


        (1) Covered employees, except as indicated below, 3.5% 
    for
retirement annuity, and 0.5% for a widow or survivors

    annuity;


        (2) Noncovered employees, except as indicated below, 
    7% for retirement
annuity and 1% for a widow or survivors 
    annuity;


        (3) Noncovered employees serving in a position in which 
    "eligible
creditable service" as defined in Section 14-110 
    may be earned, 1% for a widow
or survivors annuity
plus the 
    following amount for retirement annuity: 8.5% through 
    December 31,
2001; 9.5% in 2002; 10.5% in 2003; and 11.5% 
    in 2004 and thereafter;


        (4) Covered employees serving in a position in which 
    "eligible creditable
service" as defined in Section 14-110 
    may be earned, 0.5% for a widow or survivors annuity
plus 
    the following amount for retirement annuity: 5% through 
    December 31,
2001; 6% in 2002; 7% in 2003; and 8% in 2004 
    and thereafter;


        (5) Each security employee of the Department of 
    Corrections
or of the Department of Human Services who is a 
    covered employee, 0.5% for a widow or survivors annuity

    plus the following amount for retirement annuity: 5% 
    through December 31,
2001; 6% in 2002; 7% in 2003; and 8% 
    in 2004 and thereafter;


        (6) Each security employee of the Department of 
    Corrections
or of the Department of Human Services who is 
    not a covered employee, 1% for a widow or survivors annuity

    plus the following amount for retirement annuity: 8.5% 
    through December 31,
2001; 9.5% in 2002; 10.5% in 2003; and 
    11.5% in 2004 and thereafter.

    (a-5) Beginning July 1, 2014, in lieu of the contributions 
otherwise required under subsection (a), each Tier 1 member who 
is a participating employee shall make contributions to the 
System,
based on his or her  compensation, as follows:
        (1) Covered employees, except as indicated below, 2.5% 
    for
retirement annuity, and 0.5% for a widow or survivors

    annuity;
        (2) Noncovered employees, except as indicated below, 
    6% for retirement
annuity and 1% for a widow or survivors 
    annuity;
        (3) Noncovered employees serving in a position in which 
    "eligible
creditable service" as defined in Section 14-110 
    may be earned, 10.5% for retirement annuity and 1% for a 
    widow
or survivors annuity;
        (4) Covered employees serving in a position in which 
    "eligible creditable
service" as defined in Section 14-110 
    may be earned, 7% for retirement annuity and  0.5% for a 
    widow or survivors annuity;
        (5) Each security employee of the Department of 
    Corrections
or of the Department of Human Services who is a 
    covered employee, 7% for retirement annuity and  0.5% for a 
    widow or survivors annuity;
        (6) Each security employee of the Department of 
    Corrections
or of the Department of Human Services who is 
    not a covered employee, 10.5% for retirement annuity and  1% 
    for a widow or survivors annuity. 
    (b) Contributions shall be in the form of a deduction from

compensation and shall be made notwithstanding that the 
compensation
paid in cash to the employee shall be reduced 
thereby below the minimum
prescribed by law or regulation.  Each 
member is deemed to consent and
agree to the deductions from 
compensation provided for in this Article,
and shall receipt in 
full for salary or compensation.

(Source: P.A. 92-14, eff. 6-28-01.)

 
    (40 ILCS 5/14-133.5 new)
    Sec. 14-133.5. Use of contributions for health care 
subsidies. The System shall not use any contribution received 
by the System under this Article to provide a subsidy for the 
cost of participation in a retiree health care program.
 



    (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 until November 15, 2011, 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 under this 
subsection (a) shall include a copy of the
actuarial 
recommendations upon which the rate is based and shall 
specifically identify the System's projected State normal cost 
for that fiscal year.

    (a-5) On or before November 1 of each year, beginning 
November 1, 2012, the Board shall submit to the State Actuary, 
the Governor, and the General Assembly a proposed certification 
of the amount of the required State contribution to the System 
for the next fiscal year, along with all of the actuarial 
assumptions, calculations, and data upon which that proposed 
certification is based. On or before January 1 of each year 
beginning January 1, 2013, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification of the required State contributions. On or before 
January 15, 2013 and each January 15 thereafter, the Board 
shall certify to the Governor and the General Assembly the 
amount of the required State contribution for the next fiscal 
year. The Board's certification must note any deviations from 
the State Actuary's recommended changes, the reason or reasons 
for not following the State Actuary's recommended changes, and 
the fiscal impact of not following the State Actuary's 
recommended changes on the required State contribution. 
    (a-10) For purposes of Section (c-5) of Section 20 of the 
Budget Stabilization Act, on or before November 1 of each year 
beginning November 1, 2014, the Board shall determine the 
amount of the State contribution to the System that would have 
been required for the next fiscal year if this amendatory Act 
of the 98th General Assembly had not taken effect, using the 
best and most recent available data but based on the law in 
effect on May 31, 2014.  The Board shall submit to the State 
Actuary, the Governor, and the General Assembly a proposed 
certification, along with the relevant law, actuarial 
assumptions, calculations, and data upon which that 
certification is based.  On or before January 1, 2015 and every 
January 1 thereafter, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification.  On or before January 15, 2015 and every January 
1 thereafter, the Board shall certify to the Governor and the 
General Assembly the amount of the State contribution to the 
System that would have been required for the next fiscal year 
if this amendatory Act of the 98th General Assembly had not 
taken effect, using the best and most recent available data but 
based on the law in effect on May 31, 2014.  The Board's 
certification must note any deviations from the State Actuary's 
recommended changes, the reason or reasons for not following 
the State Actuary's recommended changes, and the impact of not 
following the State Actuary's recommended changes. 
    (b) The certifications under subsections (a) and (a-5) 
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.

    On or before April 1, 2011, the Board shall recalculate and 
recertify to the Governor and to each department the amount of 
the required State contribution to the System for State fiscal 
year 2011, applying the changes made by Public Act 96-889 to 
the System's assets and liabilities as of June 30, 2009 as 
though Public Act 96-889 was approved on that date. 
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 
97-694, eff. 6-18-12.)

 
    (40 ILCS 5/14-152.1)

    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 June 1, 2005 (the 
effective date of Public Act 94-4). "New benefit increase", 
however, does not include any benefit increase resulting from 
the changes made to this Article by Public Act 96-37 or by this 
amendatory Act of the 98th 96th 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 Insurance 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.

(Source: P.A. 96-37, eff. 7-13-09.)
 
    (40 ILCS 5/14-155 new)
    Sec. 14-155. Defined contribution plan.
    (a) By July 1, 2015, the  System shall prepare and implement 
a voluntary  defined contribution plan for up to 5% of eligible 
active Tier 1 members. The System shall determine the 5% cap by 
the number of active Tier 1 members on the effective date of 
this Section. The defined contribution plan developed under 
this Section shall be a plan that aggregates employer and 
employee contributions in individual participant accounts 
which, after meeting any other requirements, are used for 
payouts after retirement in accordance with this Section and 
any other applicable laws. 
    As used in this Section, "defined benefit plan" means the 
retirement plan available under this Article to Tier 1 members 
who have not made the election authorized under this Section.
        (1) Under the defined contribution plan,  an active Tier 
    1 member of this System could elect to cease accruing 
    benefits in the defined benefit plan under this Article and 
    begin accruing benefits for future service in the defined 
    contribution plan. Service credit under the defined 
    contribution plan may be used for determining retirement 
    eligibility under the defined benefit plan.
        (2) Participants in the defined contribution plan  
    shall pay employee contributions at the same rate as Tier 1 
    members in this System who do not participate in the 
    defined contribution plan. 
        (3) State contributions shall be paid into the accounts 
    of all participants in the defined contribution plan at a 
    uniform rate,  expressed as a percentage of compensation and 
    determined for each year. This rate shall  be no higher than 
    the employer's normal cost for Tier 1 members in the 
    defined benefit plan for that year, as determined by the 
    System and expressed as a percentage of compensation, and 
    shall be no lower than 3% of compensation.  The State shall 
    adjust this rate annually. 
        (4) The defined contribution plan shall require 5 years 
    of participation in the defined contribution plan before 
    vesting in State contributions.  If the participant fails to 
    vest in them, the State contributions, and the earnings 
    thereon, shall be forfeited.
        (5) The defined contribution plan may provide for 
    participants in the plan to be eligible for the defined 
    disability benefits available to other participants under 
    this Article. If it does, the System shall reduce the 
    employee contributions credited to the member's defined 
    contribution plan account  by an amount determined by the 
    System to cover the cost of offering such benefits.
        (6) The defined contribution plan shall provide a 
    variety of options for investments.  These options shall 
    include investments handled by the Illinois State Board of 
    Investment as well as private sector investment options.
        (7)   The defined contribution plan shall provide a 
    variety of options for payouts to retirees and their 
    survivors.
        (8)  To the extent authorized under federal law and as 
    authorized by the System, the plan shall allow former 
    participants in the plan to transfer or roll over employee 
    and vested State contributions, and the earnings thereon, 
    into other qualified retirement plans.
        (9)  The System shall reduce the employee contributions 
    credited to the member's defined contribution plan account  
    by an amount determined by the System to cover the cost of 
    offering these benefits and any applicable administrative 
    fees. 
    (b)  Only persons who are active Tier 1 members of the 
System on the effective date of this Section are eligible to 
participate in the defined contribution plan. Participation in 
the defined contribution plan shall be limited to the first 5% 
of eligible persons  who elect to participate. The election to 
participate in the defined contribution plan is voluntary and 
irrevocable.
    (c) An eligible Tier 1 employee may irrevocably elect to 
participate in the defined contribution plan by filing with the 
System a written application to participate that is received by 
the System prior to its determination that 5% of eligible 
persons have elected to participate in the defined contribution 
plan.
    When the System first determines that 5% of eligible 
persons have elected to participate in the defined contribution 
plan, the System shall provide notice to previously eligible 
employees that the plan is no longer available and shall  cease 
accepting applications to participate. 
    (d) The System shall make a good faith effort to contact 
each active Tier 1 member who is eligible to participate in the 
defined contribution plan.  The System shall mail information 
describing the option to join the defined contribution plan to 
each of these employees to his or her last known address on 
file with the System.  If the employee is not responsive to 
other means of contact, it is sufficient for the System to 
publish the details of the option on its website.
    Upon request for further information describing the 
option, the System shall provide employees with information 
from the System before exercising the option to join the plan, 
including information on the impact to their vested benefits or 
non-vested service. The individual consultation shall include 
projections of the member's defined benefits at retirement or 
earlier termination of service and the value of the member's 
account at retirement or earlier termination of service.  The 
System shall not provide advice or counseling with respect to 
whether the employee should exercise the option.  The System 
shall inform Tier 1 employees who are eligible to participate 
in the defined contribution plan that they may also wish to 
obtain information and counsel relating to their option from 
any other available source, including but not limited to labor 
organizations, private counsel, and financial advisors. 
    (e) In no event shall the System, its staff, its authorized 
representatives, or the Board be liable for any information 
given to an employee under this Section.  The System may 
coordinate with the Illinois Department of Central Management 
Services and other retirement systems administering a defined 
contribution plan in accordance with this amendatory Act of the 
98th General Assembly to provide information concerning the 
impact of the option set forth in this Section. 
    (f) Notwithstanding any other provision of this Section, no 
person shall begin participating in the defined contribution 
plan until it has attained qualified plan status and received 
all necessary approvals from the U.S. Internal Revenue Service. 
    (g) The System shall report on its progress under this 
Section, including the available details of the defined 
contribution plan and the System's plans for informing eligible 
Tier 1 members about the plan, to the Governor and the General 
Assembly on or before January 15, 2015. 
    (h) The Illinois State Board of Investments shall be the 
plan sponsor for the defined contribution plan established 
under this Section.
    (i) The intent of this amendatory Act of the 98th General 
Assembly is to ensure that the State's normal cost  of 
participation in the defined contribution plan is similar, and 
if possible equal, to the State's normal cost  of participation 
in the defined benefit plan, unless a lower State's normal cost 
is necessary to ensure cost neutrality. 
 
    (40 ILCS 5/14-156 new)
    Sec. 14-156. Defined contribution plan; termination. If 
the defined contribution plan is terminated or becomes 
inoperative pursuant to law, then each participant in the plan 
shall automatically be deemed to have been a contributing Tier 
1 member in the System's defined benefit plan during the time 
in which he or she participated in the defined contribution 
plan, and for that purpose  the System shall be entitled to 
recover the amounts in the participant's defined contribution 
accounts.
 



    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)



    Sec. 15-106. Employer. "Employer": The University of 
Illinois, Southern
Illinois University, Chicago State 
University, Eastern Illinois University,
Governors State 
University, Illinois State University, Northeastern Illinois

University, Northern Illinois University, Western Illinois 
University, the
State Board of Higher Education, the Illinois 
Mathematics and Science Academy,
 the University Civil Service 
Merit Board, the Board of
Trustees of the State Universities 
Retirement System, the Illinois Community
College Board, 
community college
boards, any association of community college 
boards organized under Section
3-55 of the Public Community 
College Act, the Board of Examiners established
under the 
Illinois Public Accounting Act, and, only during the period for 
which
employer contributions required under Section 15-155 are 
paid, the following
organizations: the alumni associations, 
the foundations and the athletic
associations which are 
affiliated with the universities and colleges included
in this 
Section as employers.  An individual that begins employment 
after the effective date of this amendatory Act of the 98th 
General Assembly with an entity not defined as an employer in 
this Section shall not be deemed an employee for the purposes 
of this Article with respect to that employment and shall not 
be eligible to participate in the System with respect to that 
employment; provided, however, that those individuals who are 
both employed and already participants in the System on the 
effective date of this amendatory Act of the 98th General 
Assembly shall be allowed to continue as participants in the 
System for the duration of that employment and continue to earn 
service credit. 
    Notwithstanding any provision of law to the contrary, an 
individual who begins employment with any of the following 
employers on or after the effective date of this amendatory Act 
of the 98th General Assembly shall not be deemed an employee 
and shall not be eligible to participate in the System with 
respect to that employment: any association of community 
college boards organized under Section
3-55 of the Public 
Community College Act, the Association of Illinois 
Middle-Grade Schools, the Illinois Association of School 
Administrators, the Illinois Association for Supervision and 
Curriculum Development, the Illinois Principals Association, 
the Illinois Association of School Business Officials, or the 
Illinois Special Olympics; provided, however, that those 
individuals who are both employed and  already participants in 
the System on the effective date of this amendatory Act of the 
98th General Assembly shall be allowed to continue as 
participants in the System for the duration of that employment 
and continue to earn service credit. 
    A department as defined in Section 14-103.04 is
an employer 
for any person appointed by the Governor under the Civil

Administrative Code of Illinois who is a participating employee 
as defined in
Section 15-109.  The Department of Central 
Management Services is an employer with respect to persons 
employed by the State Board of Higher Education in positions 
with the Illinois Century Network as of June 30, 2004 who 
remain continuously employed after that date by the Department 
of Central Management Services in positions with the Illinois 
Century Network, the Bureau of Communication and Computer 
Services, or, if applicable, any successor bureau.

    The cities of Champaign and Urbana shall be considered

employers, but only during the period for which contributions 
are required to
be made under subsection (b-1) of Section 
15-155 and only with respect to
individuals described in 
subsection (h) of Section 15-107.

(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See 
Sec. 999.)

 



    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)



    Sec. 15-107. Employee. 

    (a) "Employee" means any member of the educational, 
administrative,
secretarial, clerical, mechanical, labor or 
other staff of an employer
whose employment is permanent and 
continuous or who is employed in a
position in which services 
are expected to be rendered on a continuous
basis for at least 
4 months or one academic term, whichever is less, who
(A) 
receives payment for personal services on a warrant issued 
pursuant to
a payroll voucher certified by an employer and 
drawn by the State
Comptroller upon the State Treasurer or by 
an employer upon trust, federal
or other funds, or (B) is on a 
leave of absence without pay.  Employment
which is irregular, 
intermittent or temporary shall not be considered
continuous 
for purposes of this paragraph.

    However, a person is not an "employee" if he or she:


        (1) is a student enrolled in and regularly attending 
    classes in a
college or university which is an employer, 
    and is employed on a temporary
basis at less than full 
    time;


        (2) is currently receiving a retirement annuity or a 
    disability
retirement annuity under Section 15-153.2 from 
    this System;


        (3) is on a military leave of absence;


        (4) is eligible to participate in the Federal Civil 
    Service Retirement
System and is currently making 
    contributions to that system based upon
earnings paid by an 
    employer;


        (5) is on leave of absence without pay for more than 60 
    days
immediately following termination of disability 
    benefits under this
Article;


        (6) is hired after June 30, 1979 as a public service 
    employment program
participant under the Federal 
    Comprehensive Employment and Training Act
and receives 
    earnings in whole or in part from funds provided under that

    Act; or


        (7) is employed on or after July 1, 1991 to perform 
    services that
are excluded by subdivision (a)(7)(f) or 
    (a)(19) of Section 210 of the
federal Social Security Act 
    from the definition of employment given in that
Section (42 
    U.S.C. 410).

    (b) Any employer may, by filing a written notice with the 
board, exclude
from the definition of "employee" all persons 
employed pursuant to a federally
funded contract entered into 
after July 1, 1982 with a federal military
department in a 
program providing training in military courses to federal

military personnel on a military site owned by the United 
States Government,
if this exclusion is not prohibited by the 
federally funded contract or
federal laws or rules governing 
the administration of the contract.

    (c) Any person appointed by the Governor under the Civil 
Administrative
Code of the State is an employee, if he or she 
is a participant in this
system on the effective date of the 
appointment.

    (d) A participant on lay-off status under civil service 
rules is
considered an employee for not more than 120 days from 
the date of the lay-off.

    (e) A participant is considered an employee during (1) the 
first 60 days
of disability leave, (2) the period, not to 
exceed one year, in which his
or her eligibility for disability 
benefits is being considered by the board
or reviewed by the 
courts, and (3) the period he or she receives disability

benefits under the provisions of Section 15-152, workers' 
compensation or
occupational disease benefits, or disability 
income under an insurance
contract financed wholly or partially 
by the employer.

    (f) Absences without pay, other than formal leaves of 
absence, of less
than 30 calendar days, are not considered as 
an interruption of a person's
status as an employee.  If such 
absences during any period of 12 months
exceed 30 work days, 
the employee status of the person is considered as
interrupted 
as of the 31st work day.

    (g) A staff member whose employment contract requires 
services during
an academic term is to be considered an 
employee during the summer and
other vacation periods, unless 
he or she declines an employment contract
for the succeeding 
academic term or his or her employment status is
otherwise 
terminated, and he or she receives no earnings during these 
periods.

    (h) 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 became employed by the fire 
department of
the City of Urbana or the City of Champaign shall 
continue to be considered as
an employee for purposes of this 
Article for so long as the individual remains
employed as a 
firefighter by the City of Urbana or the City of Champaign.  The

individual shall cease to be considered an employee under this 
subsection (h)
upon the first termination of the individual's 
employment as a firefighter by
the City of Urbana or the City 
of Champaign.

    (i) An individual who is employed on a full-time basis as 
an officer
or employee of a statewide teacher organization that 
serves System
participants or an officer of a national teacher 
organization that serves
System participants may participate 
in the System and shall be deemed an
employee, provided that 
(1) the individual has previously earned
creditable service 
under this Article, (2) the individual files with the
System an 
irrevocable election to become a participant before the 
effective date of this amendatory Act of the 97th General 
Assembly, (3) the
individual does not receive credit for that 
employment under any other Article
of this Code, and (4) the 
individual first became a full-time employee  of the teacher 
organization and becomes a participant before the effective 
date of this amendatory Act of the 97th General Assembly.  An 
employee under this subsection (i) is responsible for paying
to 
the System both (A) employee contributions based on the actual 
compensation
received for service with the teacher 
organization and (B) employer
contributions equal to the normal 
costs (as defined in Section 15-155)
resulting from that 
service; all or any part of these contributions may be
paid on 
the employee's behalf or picked up for tax purposes (if 
authorized
under federal law) by the teacher organization.

    A person who is an employee as defined in this subsection 
(i) may establish
service credit for similar employment prior 
to becoming an employee under this
subsection by paying to the 
System for that employment the contributions
specified in this 
subsection, plus interest at the effective rate from the
date 
of service to the date of payment.  However, credit shall not be 
granted
under this subsection for any such prior employment for 
which the applicant
received credit under any other provision 
of this Code, or during which
the applicant was on a leave of 
absence under Section 15-113.2.

    (j) A person employed by the State Board of Higher 
Education in a position with the Illinois Century Network as of 
June 30, 2004 shall be considered to be an employee for so long 
as he or she remains continuously employed after that date by 
the Department of Central Management Services in a position 
with the Illinois Century Network, the Bureau of Communication 
and Computer Services, or, if applicable, any successor bureau

and meets the requirements of subsection (a).

    (k) In the case of doubt as to whether any person is an 
employee within the meaning of this Section, the decision of 
the Board shall be final. 
(Source: P.A. 97-651, eff. 1-5-12.)

 



    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)



    Sec. 15-111. Earnings. 

    (a) "Earnings": An amount paid for personal services equal 
to the sum of
the basic compensation plus extra compensation 
for summer teaching,
overtime or other extra service.  For 
periods for which an employee receives
service credit under 
subsection (c) of Section 15-113.1 or Section 15-113.2,

earnings are equal to the basic compensation on which 
contributions are
paid by the employee during such periods.  
Compensation for employment which is
irregular, intermittent 
and temporary shall not be considered earnings, unless
the 
participant is also receiving earnings from the employer as an 
employee
under Section 15-107.

    With respect to transition pay paid by the University of 
Illinois to a
person 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:


        (1) "Earnings" includes transition pay paid to the 
    employee on or after
the effective date of this amendatory 
    Act of the 91st General Assembly.


        (2) "Earnings" includes transition pay paid to the 
    employee before the
effective date of this amendatory Act 
    of the 91st General Assembly only if (i)
employee 
    contributions under Section 15-157 have been withheld from 
    that
transition pay or (ii) the employee pays to the System 
    before January 1, 2001
an amount representing employee 
    contributions under Section 15-157 on that
transition pay.  
    Employee contributions under item (ii) may be paid in a 
    lump
sum, by withholding from additional transition pay 
    accruing before January 1,
2001, or in any other manner 
    approved by the System.  Upon payment of the
employee 
    contributions on transition pay, the corresponding 
    employer
contributions become an obligation of the State.

    (b) For a Tier 2 member, the annual earnings shall not 
exceed $106,800; however, that amount shall annually 
thereafter be increased by the lesser of (i) 3% of that amount, 
including all previous adjustments, or (ii) one half the annual 
unadjusted percentage increase (but not less than zero) in the 
consumer price index-u for the 12 months ending with the 
September preceding each November 1, including all previous 
adjustments. 
    For the purposes of this Section, "consumer price index u" 
means the index published by the Bureau of Labor Statistics of 
the United States Department of Labor that measures the average 
change in prices of goods and services purchased by all urban 
consumers, United States city average, all items, 1982-84 = 
100. The new amount resulting from each annual adjustment shall 
be determined by the Public Pension Division of the Department 
of Insurance and made available to the boards of the retirement 
systems and pension funds by November 1 of each year. 
    (c) Notwithstanding any other provision of this Code, the

annual earnings of a Tier 1 member for the purposes of this 
Code
shall not exceed, for periods of service on or after the

effective date of this amendatory Act of the 98th General

Assembly, the greater of (i) the annual limitation determined 
from
time to time under subsection (b-5) of Section 1-160 of 
this
Code, (ii) the annualized rate of earnings of the Tier 1 
member as of that effective date, or (iii) the annualized rate 
of earnings of the Tier 1 member immediately preceding the 
expiration, renewal, or amendment of an employment contract or 
collective bargaining agreement in effect on that effective 
date. 
(Source: P.A. 98-92, eff. 7-16-13.)

 



    (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)



    Sec. 15-112. Final rate of earnings. "Final rate of 
earnings":
    (a) This subsection (a) applies only to a Tier 1 member. 
    For an employee who is paid on an hourly basis or who 
receives an annual salary
in installments during 12 months of 
each academic year, the average annual
earnings during the 48 
consecutive calendar month period ending with the last
day of 
final termination of employment or the 4 consecutive academic 
years of
service in which the employee's earnings were the 
highest, whichever is
greater.
For any other employee, the 
average annual earnings during the 4 consecutive
academic years 
of service in which his or her earnings were the highest.
For 
an employee with less than 48 months or 4 consecutive academic 
years of
service, the average earnings during his or her entire 
period of service.
The earnings of an employee with more than 
36 months of service prior to the
date of becoming a 
participant are, for such period, considered equal to the

average earnings during the last 36 months of such service.
    (b)  This subsection (b) applies to a Tier 2 member.
    For an employee who is paid on an hourly basis or who 
receives an annual salary in installments during 12 months of 
each academic year, the average annual earnings obtained by 
dividing by 8 the total earnings of the employee during the 96 
consecutive months in which the total earnings were the highest 
within the last 120 months prior to termination.
    For any other employee, the average annual earnings during 
the 8 consecutive academic years within the 10 years prior to 
termination in which the employee's earnings were the highest. 
For an employee with less than 96 consecutive months or 8 
consecutive academic years of service, whichever is necessary, 
the average earnings during his or her entire period of 
service.  
    (c) For an
employee on leave of absence with pay, or on 
leave of absence without pay
who makes contributions during 
such leave, earnings are assumed to be equal
to the basic 
compensation on the date the leave began.
    (d)  For an employee on
disability leave, earnings are 
assumed to be equal to the basic compensation
on the date 
disability occurs or the average earnings during the 24 months

immediately preceding the month in which disability occurs, 
whichever is
greater.

    (e) For a Tier 1 member who retires on or after the 
effective date of this
amendatory Act of 1997 with at least 20 
years of service as a firefighter or
police officer under this 
Article, the final rate of earnings shall be the
annual rate of 
earnings received by the participant on his or her last day as 
a
firefighter or police officer under this Article, if that is 
greater than the
final rate of earnings as calculated under the 
other provisions of this
Section.

    (f) If a Tier 1 member is an employee for at least
6 months 
during the academic year in which his or her employment
is 
terminated, the annual final rate of earnings shall be 25% of 
the sum
of (1) the annual basic compensation for that year, and 
(2) the amount
earned during the 36 months immediately 
preceding that year, if this is
greater than the final rate of 
earnings as calculated under the other
provisions of this 
Section.

    (g) In the determination of the final rate of earnings for 
an employee, that
part of an employee's earnings for any 
academic year beginning after June 30,
1997, which exceeds the 
employee's earnings with that employer for the
preceding year 
by more than 20 percent shall be excluded; in the event
that an 
employee has more than one employer
this limitation shall be 
calculated separately for the earnings with
each employer.  In 
making such calculation, only the basic compensation of

employees shall be considered, without regard to vacation or 
overtime or to
contracts for summer employment.

    (h) The following are not considered as earnings in 
determining final rate of
earnings: (1) severance or separation 
pay, (2) retirement pay, (3)
payment for unused sick leave, and 
(4) payments from an employer for
the period used in 
determining final rate of earnings for any purpose other
than 
(i) services rendered, (ii) leave of absence or vacation 
granted
during that period, and (iii) vacation of up to 56 work 
days allowed upon
termination of employment; except that, if 
the benefit has been collectively
bargained between the 
employer and the recognized collective bargaining agent

pursuant to the Illinois Educational Labor Relations Act, 
payment received
during a period of up to 2 academic years for 
unused sick leave may be
considered as earnings in accordance 
with the applicable collective bargaining
agreement, subject 
to the 20% increase limitation of this Section, and if the

person first becomes a participant on or after the effective 
date of this amendatory Act of the 98th General Assembly,

payments for unused sick or vacation time shall not be

considered as earnings.  Any unused
sick leave considered as 
earnings under this Section shall not be taken into
account in 
calculating service credit under Section 15-113.4.

    (i) Intermittent periods of service shall be considered as 
consecutive in
determining final rate of earnings.

(Source: P.A. 98-92, eff. 7-16-13.)

 



    (40 ILCS 5/15-113.4)  (from Ch. 108 1/2, par. 15-113.4)



    Sec. 15-113.4. Service for unused sick leave. "Service for 
unused
sick leave":  A person who first becomes a participant 
before the effective date of this amendatory Act of the 98th

General Assembly and who is an employee under this System or 
one of
the other systems subject to Article 20 of this Code 
within 60 days
immediately preceding the date on which his or 
her retirement annuity
begins, is entitled to credit for 
service for that portion of unused sick
leave earned in the 
course of employment with an employer and  credited on
the date 
of termination of employment by an employer for which payment 
is
not received, in accordance with the following schedule:  30 
through 90
full calendar days and 20 through 59 full work days 
of unused sick leave,
1/4 of a year of service; 91 through 180 
full calendar days and 60 through
119 full work days, 1/2 of a 
year of service; 181 through 270 full calendar
days and 120 
through 179 full work days, 3/4 of a year of service;  271

through 360 full calendar days and 180 through 240 full work 
days, one year
of service.
Only uncompensated, unused sick 
leave earned in accordance with an
employer's sick leave 
accrual policy generally applicable to employees or a
class of 
employees shall be taken into account in calculating service 
credit
under this Section.  Any uncompensated, unused sick leave 
granted by an
employer to facilitate the hiring, retirement, 
termination, or other special
circumstances of an employee 
shall not be taken into account in calculating
service credit 
under this Section.
If a participant transfers from one 
employer to another, the
unused sick leave credited by the 
previous employer shall be considered in
determining service to 
be credited under this Section, even if the
participant 
terminated service prior to the effective date of P.A. 86-272

(August 23, 1989); if necessary, the retirement annuity shall 
be
recalculated to reflect such sick leave credit.  Each 
employer shall
certify to the board the number of days of 
unused sick leave accrued to the
participant's credit on the 
date that the participant's status as an
employee terminated.  
This period of unused sick leave shall not be
considered in 
determining the date the retirement annuity begins. A person

who first becomes a participant on or after the effective date

of this amendatory Act of the 98th General Assembly shall not

receive service credit for unused sick leave.

(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)

 



    (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, based 
on factors including the expected investment experience; 
historical and expected fluctuations in the market value of 
investments; the desirability of minimizing volatility in the 
rate of investment earnings 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.

    (2) "Effective rate of interest": For a fiscal year 
concluding no later than June 30, 2014, the 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. For a fiscal year 
concluding no later than June 30, 2014, the  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 
January 31 immediately preceding the start of that fiscal year.  
    For a fiscal year that begins on or after July 1, 2014, the 
effective rate of interest for a given fiscal year shall be 
equal to the interest rate of 30-year United States Treasury 
bonds as of the beginning of that given fiscal year, plus 75 
basis points.  This effective rate of interest shall not be used 
in determining the prescribed rate of interest as defined in 
paragraph (1) of this Section. 
    (3) The change made to this Section by Public Acts 90-65 
and 90-511 is a clarification of existing law.

(Source: P.A. 94-4, eff. 6-1-05; 94-982, eff. 6-30-06.)

 



    (40 ILCS 5/15-135)  (from Ch. 108 1/2, par. 15-135)



    Sec. 15-135. Retirement annuities - Conditions. 

    (a) This subsection (a) applies only to a Tier 1 member. A 
participant who retires in one of the following specified years 
with
the specified amount of service is entitled to a 
retirement annuity at any age
under the retirement program 
applicable to the participant:


        35 years if retirement is in 1997 or before;


        34 years if retirement is in 1998;


        33 years if retirement is in 1999;


        32 years if retirement is in 2000;


        31 years if retirement is in 2001;


        30 years if retirement is in 2002 or later.


    A participant with 8 or more years of service after 
September 1, 1941, is
entitled to a retirement annuity on or 
after attainment of age 55.

    A participant with at least 5 but less than 8 years
of 
service after September 1, 1941, is entitled to a retirement 
annuity on
or after attainment of age 62.

    A participant who has at least 25 years of service in this 
system as a
police officer or firefighter is entitled to a 
retirement
annuity on or after the attainment of age 50, if 
Rule 4 of Section
15-136 is applicable to the participant.

    (a-3) Notwithstanding subsection (a) of this Section, for a 
Tier 1 member who begins receiving a retirement annuity under 
this Section on or after July 1, 2014, the required retirement 
age under subsection (a) is increased as follows, based on the 
Tier 1 member's age on June 1, 2014: 
        (1) If he or she is at least age 46  on June 1, 2014, 
    then the required retirement ages under subsection (a) 
    remain unchanged.
        (2) If he or she is at least age 45 but less than age 46 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 4 months.
        (3) If he or she is at least age 44 but less than age 45 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 8 months.
        (4) If he or she is at least age 43 but less than age 44 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 12 months.
        (5) If he or she is at least age 42 but less than age 43 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 16 months.
        (6) If he or she is at least age 41 but less than age 42 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 20 months.
        (7) If he or she is at least age 40 but less than age 41 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 24 months.
        (8) If he or she is at least age 39 but less than age 40 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 28 months.
        (9) If he or she is at least age 38 but less than age 39 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 32 months.
        (10) If he or she is at least age 37 but less than age 
    38 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 36 months.
        (11) If he or she is at least age 36 but less than age 
    37 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 40 months.
        (12) If he or she is at least age 35 but less than age 
    36 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 44 months.
        (13) If he or she is at least age 34 but less than age 
    35 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 48 months.
        (14) If he or she is at least age 33 but less than age 
    34 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 52 months.
        (15) If he or she is at least age 32 but less than age 
    33 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 56 months.
        (16) If he or she is less than age 32 on June 1, 2014, 
    then the required retirement ages under subsection (a) are 
    increased by 60 months.
    Notwithstanding Section 1-103.1, this subsection (a-3) 
applies without regard to whether or not the Tier 1 member is 
in active service under this Article on or after  the effective 
date of this amendatory Act of the 98th General Assembly. 
    (a-5)  A Tier 2 member is entitled to a retirement annuity 
upon written application if he or she has attained age 67 and 
has at least 10 years of service credit and is otherwise 
eligible under the requirements of this Article. A Tier 2 
member who has attained age 62 and has at least 10 years of 
service credit and is otherwise eligible under the requirements 
of this Article may elect to receive the lower retirement 
annuity provided in subsection (b-5) of Section 15-136 of this 
Article. 
    (b) The annuity payment period shall begin on the date 
specified by the
participant or the recipient of a disability 
retirement annuity submitting a written application, which 
date shall not be prior
to termination of employment or more 
than one year before the application is
received by the board; 
however, if the participant is not an employee of an
employer 
participating in this System or in a participating system as 
defined
in Article 20 of this Code on April 1 of the calendar 
year next following
the calendar year in which the participant 
attains age 70 1/2, the annuity
payment period shall begin on 
that date regardless of whether an application
has been filed.

    (c) An annuity is not payable if the amount provided under 
Section
15-136 is less than $10 per month.

(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12; 
98-92, eff. 7-16-13.)

 



    (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 effective 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 (using the effective rate of 
    interest in effect at the time of retirement for 
    retirements occurring on or after July 1, 2014), 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 (using the effective rate of 
    interest in effect at the time of retirement for 
    retirements occurring on or after July 1, 2014) 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
(using the effective rate of 
    interest in effect at the time of retirement for 
    retirements occurring on or after July 1, 2014) from the 
    entire contribution made by the participant under Section 
    15-113.3.

    Notwithstanding any other provision of this Rule 2, a 
participant's retirement annuity calculated under this Rule 2 
shall not be less than the retirement annuity that participant 
would have received under this Rule 2 had he or she retired 
during the fiscal year preceding the effective date of this 
amendatory Act of the 98th General Assembly. 
    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. A Tier 2 
member is eligible for a retirement annuity calculated under 
Rule 4 only if that Tier 2 member meets the service 
requirements for that benefit calculation as prescribed under 
this Rule 4 in addition to the applicable age requirement under 
subsection (a-5) of Section 15-135.

    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.










    (b) For a Tier 1 member, 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.

    (b-5)  The retirement annuity of a Tier 2 member who is 
retiring after attaining age 62 with at least 10 years of 
service credit shall be reduced by 1/2 of 1% for each full 
month that the member's age is under age 67. 
    (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) This subsection (d) is subject to subsections (d-1) and 
(d-2). A Tier 1 member 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, or Rule 4 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, or Rule 4 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.

    (d-1) Notwithstanding subsection (d), but subject to the 
provisions of subsection (d-2), all automatic increases 
payable under subsection (d) on or after the effective date of 
this amendatory Act of the 98th General Assembly shall be 
calculated as 3% of the lesser of (1) the total annuity
payable 
at the time of the increase, including previous
increases 
granted, or (2) $1,000 multiplied by the number of years of 
creditable service upon which the annuity is based; however, in 
the case of an initial increase subject to this subsection, the 
amount of that increase shall be prorated if less than one year 
has elapsed since retirement.
    Beginning January 1, 2016, the $1,000 referred to in item 
(2) of this subsection (d-1) shall be increased on each January 
1 by the annual unadjusted percentage increase (but not less 
than zero) in the consumer price index-u for the 12 months 
ending with the preceding September; these adjustments shall be 
cumulative and compounded.
For the purposes of this subsection 
(d-1), "consumer price index-u" means the index published by 
the Bureau of Labor Statistics of the United States Department 
of Labor that measures the average change in prices of goods 
and services purchased by all urban consumers, United States 
city average, all items, 1982-84 = 100. The new dollar amount 
resulting from each annual adjustment shall be determined by 
the Public Pension Division of the Department of Insurance and 
made available to the System by November 1 of each year. 
    This subsection (d-1) is applicable without regard to 
whether the person is in service on or after the effective date 
of  this amendatory Act of the 98th General Assembly. 
    (d-2) Notwithstanding subsections (d) and (d-1), for an 
active or inactive Tier 1 member who has not begun to receive a 
retirement annuity under this Article before July 1, 2014:
        (1) the automatic annual increase payable under 
    subsection (d) the second January following the date the 
    retirement annuity begins shall be equal to 0% of the total 
    annuity payable at the time of the increase, if he or she 
    is at least age 50 on the effective date of this amendatory 
    Act; 
        (2) the automatic annual increase payable under 
    subsection (d) the second, fourth,  and sixth January 
    following the date the retirement annuity begins shall be 
    equal to 0% of the total annuity payable at the time of the 
    increase, if he or she is at least age 47 but less than age 
    50 on the effective date of this amendatory Act; 
        (3) the automatic annual increase payable under 
    subsection (d) the second, fourth,  sixth, and eighth 
    January following the date the retirement annuity begins 
    shall be equal to 0% of the total annuity payable at the 
    time of the increase, if he or she is at least age 44 but 
    less than age 47 on the effective date of this amendatory 
    Act; 
        (4) the automatic annual increase payable under 
    subsection (d) the second, fourth,  sixth, eighth, and tenth 
    January following the date the retirement annuity begins 
    shall be equal to 0% of the total annuity payable at the 
    time of the increase, if he or she is less than age 44 on 
    the effective date of this amendatory Act. 
    (d-5)  A retirement annuity of a Tier 2 member shall receive 
annual increases on the January 1 occurring either on or after 
the attainment of age 67 or the first anniversary of the 
annuity start date, whichever is later. Each annual increase 
shall be calculated at 3% or one half the annual unadjusted 
percentage increase (but not less than zero) in the consumer 
price index-u for the 12 months ending with the September 
preceding each November 1, whichever is less, of the originally 
granted retirement annuity. If the annual unadjusted 
percentage change in the consumer price index-u for the 12 
months ending with the September preceding each November 1 is 
zero or there is a decrease, then the annuity shall not be 
increased. 
    (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.

    (j) For participants to whom subsection (a-3) of Section 
15-135 applies, the references to age 50, 55, and 62 in this 
Section are increased as provided in subsection (a-3) of 
Section 15-135. 
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12; 
98-92, eff. 7-16-13.)

 



    (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 100% 90% funded 
basis in accordance
with actuarial recommendations by the end 
of State fiscal year 2044.

    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 2015 through 2044, 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 
equal to the sum of (1) the State's portion of the projected 
normal cost for that fiscal year, plus (2) an amount sufficient 
to bring the total assets of the System up to 100% of the total 
actuarial liabilities of the System by the end of the State 
fiscal year 2044. 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 2044 and shall be determined under the projected 
unit cost method for fiscal year 2015 and under the entry age 
normal actuarial cost method for fiscal years 2016 through 
2044. 
    For State fiscal years 2012 through 2014 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, 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 2009, 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.

    Notwithstanding any other provision of this Article, the 
total required State contribution for State fiscal year 2010 is 
$702,514,000 and shall be made from the State Pensions Fund and 
proceeds of bonds sold in fiscal year 2010 pursuant to Section 
7.2 of the General Obligation Bond Act, less (i) the pro rata 
share of bond sale expenses determined by the System's share of 
total bond proceeds, (ii) any amounts received from the General 
Revenue Fund in fiscal year 2010, (iii) any reduction in bond 
proceeds due to the issuance of discounted bonds, if 
applicable. 
    Notwithstanding any other provision of this Article, the

total required State contribution for State fiscal year 2011 is

the amount recertified by the System on or before April 1, 2011 
pursuant to Section 15-165 and shall be made from the State 
Pensions Fund and
proceeds of bonds sold in fiscal year 2011 
pursuant to Section
7.2 of the General Obligation Bond Act, 
less (i) the pro rata
share of bond sale expenses determined by 
the System's share of
total bond proceeds, (ii) any amounts 
received from the General
Revenue Fund in fiscal year 2011, and 
(iii) any reduction in bond
proceeds due to the issuance of 
discounted bonds, if
applicable. 
    Beginning in State fiscal year 2045, the minimum 
contribution
for each fiscal year shall be the amount
needed to 
maintain the total assets of the System at 100% of the  total 
liabilities of the System. 
    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.

    Amounts received by the System pursuant to Section 25 of 
the Budget Stabilization Act or Section 8.12 of the State 
Finance Act in any fiscal year do not reduce and do not 
constitute payment of any portion of the minimum State 
contribution required under this Article in that fiscal year.  
Such amounts shall not reduce, and shall not be included in the 
calculation of, the required State contributions under this 
Article in any future year until the System has reached a 
funding ratio of at least 100% 90%.  A reference in this Article 
to the "required State contribution" or any substantially 
similar term does not include or apply to any amounts payable 
to the System under  Section 25 of the Budget Stabilization Act.
    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 through State 
fiscal year 2014, 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 in fiscal 
year 2003 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 in fiscal year 2003 
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, 
determined on a full-time equivalent basis, exceeds the amount 
of his or her earnings with the same employer for the previous 
academic year, determined on a full-time equivalent basis, 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 System may require the 
employer to provide any pertinent information or 
documentation.
    Whenever it determines that a payment is or may be required 
under this subsection (g), the System shall calculate the 
amount of the payment and bill the employer for that amount. 
The bill shall specify the calculations used to determine the 
amount due. If the employer disputes the amount of the bill, it 
may, within 30 days after receipt of the bill, apply to the 
System in writing for a recalculation. The application must 
specify in detail the grounds of the dispute and, if the 
employer asserts that the calculation is subject to subsection 
(h) or (i) of this Section, must include an affidavit setting 
forth and attesting to all facts within the employer's 
knowledge that are pertinent to the applicability of subsection 
(h) or (i). Upon receiving a timely application for 
recalculation, the System shall review the application and, if 
appropriate, recalculate the amount due.

    The employer contributions required under this subsection 
(g) may be paid in the form of a lump sum within 90 days after 
receipt of the bill. If the employer contributions are not paid 
within 90 days after receipt of the bill, then interest will be 
charged at a rate equal to the System's annual actuarially 
assumed rate of return on investment compounded annually from 
the 91st day after receipt of the bill. Payments must be 
concluded within 3 years after the employer's receipt of the 
bill.
    (h) This subsection (h) applies only to payments made or 
salary increases given on or after June 1, 2005 but before July 
1, 2011. The changes made by Public Act 94-1057 shall not 
require the System to refund any payments received before July 
31, 2006 (the effective date of Public Act 94-1057).
    When assessing payment for any amount due under subsection 
(g), the System shall exclude earnings increases paid to 
participants under contracts or collective bargaining 
agreements entered into, amended, or renewed before June 1, 
2005.

    When assessing payment for any amount due under subsection 
(g), the System shall exclude earnings increases paid to a 
participant  at a time when the participant is 10 or more years 
from retirement eligibility under Section 15-135.

    When assessing payment for any amount due under subsection 
(g), the System shall exclude earnings increases resulting from 
overload work, including a contract for summer teaching, or 
overtime when the employer has certified to the System, and the 
System has approved the certification, that: (i) in the case of 
overloads (A) the overload work is for the sole purpose of 
academic instruction in excess of the standard number of 
instruction hours for a full-time employee occurring during the 
academic year that the overload is paid and (B) the earnings 
increases are equal to or less than the rate of pay for 
academic instruction computed using the participant's current 
salary rate and work schedule; and (ii) in the case of 
overtime, the overtime was necessary for the educational 
mission.
    When assessing payment for any amount due under subsection 
(g), the System shall exclude any earnings increase resulting 
from (i) a promotion for which the employee moves from one 
classification to a higher classification under the State 
Universities Civil Service System, (ii) a promotion in academic 
rank for a tenured or tenure-track faculty position, or (iii) a 
promotion that the Illinois Community College Board has 
recommended in accordance with subsection (k) of this Section. 
These earnings increases shall be excluded only if the 
promotion is to a position that has existed and been filled by 
a member for no less than one complete academic year and the 
earnings increase as a result of the promotion is an increase 
that results in an amount no greater than the average salary 
paid for other similar positions.
    (i) When assessing payment for any amount due under 
subsection (g), the System shall exclude any salary increase  
described in subsection (h) of this Section given on or after  
July 1, 2011 but before July 1, 2014 under a contract or 
collective bargaining agreement entered into, amended, or 
renewed on or after June 1, 2005 but before July 1, 2011. 
Notwithstanding any other provision of this Section, any 
payments made or salary increases given after June 30, 2014 
shall be used in assessing payment for any amount due under 
subsection (g) of this Section.

    (j) The System shall prepare a report and file copies of 
the report with the Governor and the General Assembly by 
January 1, 2007 that contains all of the following information:
        (1) The number of recalculations required by the 
    changes made to this Section by Public Act 94-1057 for each 
    employer.
        (2) The dollar amount by which each employer's 
    contribution to the System was changed due to 
    recalculations required by Public Act 94-1057.
        (3) The total amount the System received from each 
    employer as a result of the changes made to this Section by 
    Public Act 94-4.
        (4) The increase in the required State contribution 
    resulting from the changes made to this Section by Public 
    Act 94-1057.
    (k) The Illinois Community College Board shall adopt rules 
for recommending lists of promotional positions submitted to 
the Board by community colleges and for reviewing the 
promotional lists on an annual basis. When recommending 
promotional lists, the Board shall consider the similarity of 
the positions submitted to those positions recognized for State 
universities by the State Universities Civil Service System. 
The Illinois Community College Board shall file a copy of its 
findings with the System. The System shall consider the 
findings of the Illinois Community College Board when making 
determinations under this Section. The System shall not exclude 
any earnings increases resulting from a promotion when the 
promotion was not submitted by a community college. Nothing in 
this subsection (k) shall require any community college to 
submit any information to the Community College Board.

    (l) For purposes of determining the required State 
contribution to the System, the value of the System's assets 
shall be equal to the actuarial value of the System's assets, 
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's 
assets shall be equal to the market value of the assets as of 
that date.  In determining the actuarial value of the System's 
assets for fiscal years after June 30, 2008, any actuarial 
gains or losses from investment return incurred in a fiscal 
year shall be recognized in equal annual amounts over the 
5-year period following that fiscal year. 
    (m) For purposes of determining the required State 
contribution to the system for a particular year, the actuarial 
value of assets shall be assumed to earn a rate of return equal 
to the system's actuarially assumed rate of return. 
(Source: P.A. 97-813, eff. 7-13-12; 98-92, eff. 7-16-13; 
98-463, eff. 8-16-13.)

 



    (40 ILCS 5/15-156)  (from Ch. 108 1/2, par. 15-156)



    Sec. 15-156. Obligations of State; funding guarantees.  
    (a) The payment of (1) the
required State contributions, 
(2) all benefits
granted under this system and (3) all expenses 
in connection with the
administration and operation thereof are 
obligations of the State of
Illinois to the extent specified in 
this Article. The accumulated
employee normal, additional and 
survivors insurance contributions
credited to the accounts of 
active and inactive participants
shall not be used to pay the 
State's share of the obligations.

    (b) Beginning July 1, 2014, the State shall be obligated to 
contribute to the System in each State fiscal year an amount 
not less than the sum of (i) the State's normal cost for the 
year and (ii) the portion of the unfunded accrued liability 
assigned to that year by law. Notwithstanding any other 
provision of  law, if the State fails to pay an amount required 
under this subsection, it shall be the obligation of the Board 
to seek payment of the required amount in compliance with the 
provisions of this Section and, if the amount remains unpaid, 
to bring a mandamus action in the Supreme Court of Illinois to 
compel the State to make the required payment. 
    If the System submits a voucher for contributions  required 
under Section 15-155 and the State fails to pay that voucher 
within 90 days of its receipt, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State, 
if the amount remains unpaid the Board shall commence a 
mandamus action in the Supreme Court of Illinois to compel the 
Comptroller to satisfy the voucher. 
    This subsection (b) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to pay a voucher for the 
contributions required under Section 15-155.
    (c) Beginning in State fiscal year 2016, the State shall be 
obligated to make the transfers set forth in subsections  (c-5) 
and (c-10) of Section 20 of the Budget Stabilization Act and to 
pay to the System its proportionate share of the transferred 
amounts in accordance with Section 25 of the Budget 
Stabilization Act.  Notwithstanding any other provision of  law, 
if the State fails to transfer an amount required under this 
subsection or to pay to the System its proportionate share of 
the transferred amount in accordance with Section 25 of the 
Budget Stabilization Act, it shall be the obligation of the 
Board to seek transfer or payment of the required amount in 
compliance with the provisions of this Section and,  if the 
required amount remains untransferred or the required payment 
remains unpaid, to bring a mandamus action in the Supreme Court 
of Illinois to compel the State to make the required transfer 
or payment or both, as the case may be. 
    If the State fails to make a transfer  required under 
subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act or a payment to the System required under 
Section 25 of that Act, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State,  
if the required amount remains untransferred or the required 
payment remains unpaid, the Board shall commence a mandamus 
action in the Supreme Court of Illinois to compel the 
Comptroller to make the required transfer or payment or both, 
as the case may be. 
    This subsection (c) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to make a transfer required 
under subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act and to pay to the System its proportionate 
share of the transferred amount in accordance with Section 25 
of the Budget Stabilization Act.
    The obligations created by this subsection (c) expire when 
all of the requirements of subsections  (c-5) and (c-10) of 
Section 20 of the Budget Stabilization Act and Section 25 of 
the Budget Stabilization Act have been met. 
    (d) Any payments and transfers required to be made by the 
State pursuant to subsection (b) or (c) are expressly 
subordinate to the payment of the principal, interest, and 
premium, if any, on any bonded debt obligation of the State or 
any other State-created entity, either currently outstanding 
or to be issued, for which the source of repayment or security 
thereon is derived directly or indirectly from tax revenues 
collected by the State or any other State-created entity. 
Payments on such bonded obligations include any statutory fund 
transfers or other prefunding mechanisms or formulas set forth, 
now or hereafter, in State law or bond indentures, into debt 
service funds or accounts of the State related to such bond 
obligations, consistent with the payment schedules associated 
with such obligations.
(Source: P.A. 83-1440.)

 



    (40 ILCS 5/15-157)  (from Ch. 108 1/2, par. 15-157)



    Sec. 15-157. Employee Contributions. 

    (a) Except as provided in subsection (a-5), each Each 
participating employee
shall make contributions towards the 
retirement
benefits payable under the retirement program 
applicable to the
employee from each payment
of earnings 
applicable to employment under this system on and after the

date of becoming a participant as follows:  Prior to September 
1, 1949,
3 1/2% of earnings; from September 1, 1949 to August 
31, 1955, 5%; from
September 1, 1955 to August 31, 1969, 6%; 
from September 1, 1969, 6 1/2%.
These contributions are to be 
considered as normal contributions for purposes
of this 
Article.

    Except as provided in subsection (a-5), each Each 
participant who is a police officer or firefighter shall make 
normal
contributions of 8% of each payment of earnings 
applicable to employment as a
police officer or firefighter 
under this system on or after September 1, 1981,
unless he or 
she files with the board within 60 days after the effective 
date
of this amendatory Act of 1991 or 60 days after the board 
receives notice that
he or she is employed as a police officer 
or firefighter, whichever is later,
a written notice waiving 
the retirement formula provided by Rule 4 of Section
15-136.  
This waiver shall be irrevocable.  If a participant had met the

conditions set forth in Section 15-132.1 prior to the effective 
date of this
amendatory Act of 1991 but failed to make the 
additional normal contributions
required by this paragraph, he 
or she may elect to pay the additional
contributions plus 
compound interest at the effective rate.  If such payment
is 
received by the board, the service shall be considered as 
police officer
service in calculating the retirement annuity 
under Rule 4 of Section 15-136.
While performing service 
described in clause (i) or (ii) of Rule 4 of Section
15-136, a 
participating employee shall be deemed to be employed as a

firefighter for the purpose of determining the rate of employee 
contributions
under this Section.

    (a-5) Beginning July 1, 2014, in lieu of the contribution 
otherwise required under subsection (a), each Tier 1 member, 
other than a Tier 1 member who is a police officer  or 
firefighter, shall contribute 6% of earnings toward the 
retirement benefits payable under the retirement programs 
applicable to the employee from each payment of earnings 
applicable to employment under this system.
    Beginning July 1, 2014, in lieu of the contribution 
otherwise required under subsection (a), each Tier 1 member who 
is a police officer or firefighter shall contribute 7.5% of 
each payment of earnings applicable to employment as a police 
officer or firefighter under this system, unless he or she has 
filed a waiver with the board pursuant to subsection (a).
    The contributions required under this subsection (a-5) are 
to be considered normal contributions for the purposes of this 
Article. 
    (b) Starting September 1, 1969 and, in the case of Tier 1 
members, ending on June 30, 2014, each participating employee 
shall make
additional contributions of 1/2 of 1% of earnings to 
finance a portion
of the cost of the annual increases in 
retirement annuity provided under
Section 15-136, except that  
with respect to participants in the
self-managed plan this 
additional contribution shall be used to finance the
benefits 
obtained under that retirement program. 

    (c) In addition to the amounts described in subsections (a) 
and (b) of this
Section, each participating employee shall make 
contributions of 1% of earnings
applicable under this system on 
and after August 1, 1959.  The contributions
made under this 
subsection (c) shall be considered as survivor's insurance

contributions for purposes of this Article if the employee is 
covered under
the traditional benefit package, and such 
contributions shall be considered
as additional contributions 
for purposes of this Article if the employee is
participating 
in the self-managed plan or has elected to participate in the

portable benefit package and has completed the applicable 
one-year waiting
period.  Contributions in excess of $80 during 
any fiscal year beginning before
August 31, 1969 and in excess 
of $120 during any fiscal year thereafter until
September 1, 
1971 shall be considered as additional contributions for 
purposes
of this Article.

    (d) If the board by board rule so permits and subject to 
such conditions
and limitations as may be specified in its 
rules, a participant may make
other additional contributions of 
such percentage of earnings or amounts as
the participant shall 
elect in a written notice thereof received by the board.

    (e) That fraction of a participant's total accumulated 
normal
contributions, the numerator of which is equal to the 
number of years of
service in excess of that which is required 
to qualify for the maximum
retirement annuity, and the 
denominator of which is equal to the total
service of the 
participant, shall be considered as accumulated additional

contributions.  The determination of the applicable maximum 
annuity and
the adjustment in contributions required by this 
provision shall be made
as of the date of the participant's 
retirement.

    (f) Notwithstanding the foregoing, a participating 
employee shall not
be required to make contributions under this 
Section after the date upon
which continuance of such 
contributions would otherwise cause his or her
retirement 
annuity to exceed the maximum retirement annuity as specified 
in
clause (1) of subsection (c) of Section 15-136.

    (g) A participating employee may make contributions for the 
purchase of
service credit under this Article.

    (h) A Tier 2 member shall not make contributions on 
earnings that exceed the limitation as prescribed under 
subsection (b) of Section 15-111 of this Article. 
(Source: P.A. 98-92, eff. 7-16-13.)
 
 
    (40 ILCS 5/15-157.5 new)
    Sec. 15-157.5. Use of contributions for health care 
subsidies. The System shall not use any contribution received 
by the System under this Article to provide a subsidy for the 
cost of participation in a retiree health care program.
 



    (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 until November 15, 2011 the 
appropriation required from State funds for the purposes of 
this
System for the following fiscal year.  The certification 
under this subsection (a) shall include a copy
of the actuarial 
recommendations upon which it is based and shall specifically 
identify the System's projected State normal cost for that 
fiscal year and the projected State cost for the self-managed 
plan for that fiscal year.

    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.

    On or before April 1, 2011, the Board shall recalculate and 
recertify to the Governor the amount of the required State 
contribution to the System for State fiscal year 2011, applying 
the changes made by Public Act 96-889 to the System's assets 
and liabilities as of June 30, 2009 as though Public Act 96-889 
was approved on that date. 
    (a-5) On or before November 1 of each year, beginning 
November 1, 2012, the Board shall submit to the State Actuary, 
the Governor, and the General Assembly a proposed certification 
of the amount of the required State contribution to the System 
for the next fiscal year, along with all of the actuarial 
assumptions, calculations, and data upon which that proposed 
certification is based. On or before January 1 of each year, 
beginning January 1, 2013, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification of the required State contributions. On or before 
January 15, 2013 and each January 15 thereafter, the Board 
shall certify to the Governor and the General Assembly the 
amount of the required State contribution for the next fiscal 
year. The Board's certification must note, in a written 
response to the State Actuary, any deviations from the State 
Actuary's recommended changes, the reason or reasons for not 
following the State Actuary's recommended changes, and the 
fiscal impact of not following the State Actuary's recommended 
changes on the required State contribution. 
    (a-10) For purposes of Section (c-5) of Section 20 of the 
Budget Stabilization Act, on or before November 1 of each year 
beginning November 1, 2014, the Board shall determine the 
amount of the State contribution to the System that would have 
been required for the next fiscal year if this amendatory Act 
of the 98th General Assembly had not taken effect, using the 
best and most recent available data but based on the law in 
effect on May 31, 2014.  The Board shall submit to the State 
Actuary, the Governor, and the General Assembly a proposed 
certification, along with the relevant law, actuarial 
assumptions, calculations, and data upon which that 
certification is based.  On or before January 1, 2015 and every 
January 1 thereafter, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification.  On or before January 15, 2015 and every January 
1 thereafter, the Board shall certify to the Governor and the 
General Assembly the amount of the State contribution to the 
System that would have been required for the next fiscal year 
if this amendatory Act of the 98th General Assembly had not 
taken effect, using the best and most recent available data but 
based on the law in effect on May 31, 2014.  The Board's 
certification must note any deviations from the State Actuary's 
recommended changes, the reason or reasons for not following 
the State Actuary's recommended changes, and the impact of not 
following the State Actuary's recommended changes. 
    (b) The Board shall certify to the State Comptroller or 
employer, as the
case may be, from time to time, by its 
chairperson 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. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)

 
    (40 ILCS 5/15-198)

    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. "New benefit 
increase", however, does not include any benefit increase 
resulting from the changes made by this amendatory Act of the 
98th 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 Insurance 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.

(Source: P.A. 94-4, eff. 6-1-05.)
 
    (40 ILCS 5/15-200 new)
    Sec. 15-200. Defined contribution plan.
    (a) By July 1, 2015, the  System shall prepare and implement 
a voluntary  defined contribution plan for up to 5% of eligible 
active Tier 1 members. The System shall determine the 5% cap by 
the number of active Tier 1 members on the effective date of 
this Section. The defined contribution plan developed under 
this Section shall be a plan that aggregates employer and 
employee contributions in individual participant accounts 
which, after meeting any other requirements, are used for 
payouts after retirement in accordance with this Section and 
any other applicable laws. 
    As used in this Section, "defined benefit plan" means the 
retirement plan available under this Article to Tier 1 members 
who have not made the election authorized under this Section.
        (1) Under the defined contribution plan,  an active Tier 
    1 member of this System could elect to cease accruing 
    benefits in the defined benefit plan under this Article and 
    begin accruing benefits for future service in the defined 
    contribution plan. Service credit under the defined 
    contribution plan may be used for determining retirement 
    eligibility under the defined benefit plan. An active Tier 
    1 member who elects to cease accruing benefits in his or 
    her defined benefit plan shall be prohibited from 
    purchasing service credit on or after the date of his or 
    her election.  A Tier 1 member making the irrevocable 
    election provided under this Section shall not receive 
    interest accruals to his or her Rule 2 benefit on or after 
    the date of his or her election.
        (2) Participants in the defined contribution plan  
    shall pay employee contributions at the same rate as  other 
    participants under this Article as determined by the 
    System. 
        (3) State contributions shall be paid into the accounts 
    of all participants in the defined contribution plan at a 
    uniform rate,  expressed as a percentage of earnings and 
    determined for each year. This rate shall  be no higher than 
    the employer's normal cost for Tier 1 members in the 
    defined benefit plan for that year, as determined by the 
    System and expressed as a percentage of earnings, and shall 
    be no lower than 3% of earnings.  The State shall adjust 
    this rate annually. 
        (4) The defined contribution plan shall require 5 years 
    of participation in the defined contribution plan before 
    vesting in State contributions.  If the participant fails to 
    vest in them, the State contributions, and the earnings 
    thereon, shall be forfeited.
        (5) The defined contribution plan may provide for 
    participants in the plan to be eligible for the defined 
    disability benefits available to other participants under 
    this Article. If it does, the System shall reduce the 
    employee contributions credited to the member's defined 
    contribution plan account  by an amount determined by the 
    System to cover the cost of offering such benefits.
        (6) The defined contribution plan shall provide a 
    variety of options for investments.  These options shall 
    include investments handled by the System as well as 
    private sector investment options.
        (7)   The defined contribution plan shall provide a 
    variety of options for payouts to retirees and their 
    survivors.
        (8)  To the extent authorized under federal law and as 
    authorized by the System, the plan shall allow former 
    participants in the plan to transfer or roll over employee 
    and vested State contributions, and the earnings thereon, 
    into other qualified retirement plans.
        (9)  The System shall reduce the employee contributions 
    credited to the member's defined contribution plan account  
    by an amount determined by the System to cover the cost of 
    offering these benefits and any applicable administrative 
    fees. 
    (b)  Only persons who are active Tier 1 members of the 
System on the effective date of this Section are eligible to 
participate in the defined contribution plan. Participation in 
the defined contribution plan shall be limited to the first 5% 
of eligible persons  who elect to participate. The election to 
participate in the defined contribution plan is voluntary and 
irrevocable.
    (c) An eligible Tier 1 employee may irrevocably elect to 
participate in the defined contribution plan by filing with the 
System a written application to participate that is received by 
the System prior to its determination that 5% of eligible 
persons have elected to participate in the defined contribution 
plan.
    When the System first determines that 5% of eligible 
persons have elected to participate in the defined contribution 
plan, the System shall provide notice to previously eligible 
employees that the plan is no longer available and shall  cease 
accepting applications to participate. 
    (d) The System shall make a good faith effort to contact 
each active Tier 1 member who is eligible to participate in the 
defined contribution plan.  The System shall mail information 
describing the option to join the defined contribution plan to 
each of these employees to his or her last known address on 
file with the System.  If the employee is not responsive to 
other means of contact, it is sufficient for the System to 
publish the details of the option on its website.
    Upon request for further information describing the 
option, the System shall provide employees with information 
from the System before exercising the option to join the plan, 
including information on the impact to their vested benefits or 
non-vested service. The individual consultation shall include 
projections of the member's defined benefits at retirement or 
earlier termination of service and the value of the member's 
account at retirement or earlier termination of service.  The 
System shall not provide advice or counseling with respect to 
whether the employee should exercise the option.  The System 
shall inform Tier 1 employees who are eligible to participate 
in the defined contribution plan that they may also wish to 
obtain information and counsel relating to their option from 
any other available source, including but not limited to labor 
organizations, private counsel, and financial advisors. 
    (e) In no event shall the System, its staff, its authorized 
representatives, or the Board be liable for any information 
given to an employee under this Section.  The System may 
coordinate with the Illinois Department of Central Management 
Services and other retirement systems administering a defined 
contribution plan in accordance with this amendatory Act of the 
98th General Assembly to provide information concerning the 
impact of the option set forth in this Section. 
    (f) Notwithstanding any other provision of this Section, no 
person shall begin participating in the defined contribution 
plan until it has attained qualified plan status and received 
all necessary approvals from the U.S. Internal Revenue Service. 
    (g) The System shall report on its progress under this 
Section, including the available details of the defined 
contribution plan and the System's plans for informing eligible 
Tier 1 members about the plan, to the Governor and the General 
Assembly on or before January 15, 2015. 
    (h) If an active Tier 1 member has not made an election 
under Section 15-134.5 of this Code, then the plan prescribed 
under this Section shall not apply to that Tier 1 member and 
that Tier 1 member shall remain eligible to make the election 
prescribed under Section 15-134.5. 
    (i) The intent of this amendatory Act of the 98th General 
Assembly is to ensure that the State's normal cost  of 
participation in the defined contribution plan is similar, and 
if possible equal, to the State's normal cost  of participation 
in the defined benefit plan, unless a lower State's normal cost 
is necessary to ensure cost neutrality. 
 
    (40 ILCS 5/15-201 new)
    Sec. 15-201. Defined contribution plan; termination. If 
the defined contribution plan is terminated or becomes 
inoperative pursuant to law, then each participant in the plan 
shall automatically be deemed to have been a contributing Tier 
1 member participating in the System's defined benefit plan 
during the time in which he or she participated in the defined 
contribution plan, and for that purpose  the System shall be 
entitled to recover the amounts in the participant's defined 
contribution accounts.
 



    (40 ILCS 5/16-106)  (from Ch. 108 1/2, par. 16-106)



    Sec. 16-106. Teacher. "Teacher": The following 
individuals, provided
that, for employment prior to July 1, 
1990, they are employed on a
full-time basis, or if not 
full-time, on a permanent and continuous basis
in a position in 
which services are expected to be rendered for at least
one 
school term:


        (1) Any educational, administrative, professional or 
    other staff employed
in the public common schools included 
    within this system in a position
requiring certification 
    under the law governing the certification of
teachers;


        (2) Any educational, administrative, professional or 
    other staff employed
in any facility of the Department of 
    Children and Family Services or the
Department of Human 
    Services, in a position requiring certification under
the 
    law governing the certification of teachers, and any person 
    who (i)
works in such a position for the Department of 
    Corrections, (ii) was a member
of this System on May 31, 
    1987, and (iii) did not elect to become a member of
the 
    State Employees' Retirement System pursuant to Section 
    14-108.2 of this
Code; except that "teacher" does not 
    include any person who (A) becomes
a security employee of 
    the Department of Human Services, as defined in
Section 
    14-110, after June 28, 2001 (the effective date of Public 
    Act
92-14), or (B) becomes a member of the State Employees'

    Retirement System pursuant to Section 14-108.2c of this 
    Code;


        (3) Any regional superintendent of schools, assistant 
    regional
superintendent of schools, State Superintendent 
    of Education; any person
employed by the State Board of 
    Education as an executive; any executive of
the boards 
    engaged in the service of public common school education in

    school districts covered under this system of which the 
    State
Superintendent of Education is an ex-officio member;


        (4) Any employee of a school board association 
    operating in compliance
with Article 23 of the School Code 
    who is certificated under the law
governing the 
    certification of teachers, provided that he or she becomes 
    such an employee before the effective date of this 
    amendatory Act of the 98th General Assembly;


        (5) Any person employed by the retirement system
who:


            (i) was an employee of and a participant in the 
        system on August 17,
2001 (the effective date of Public 
        Act 92-416), or


            (ii) becomes an employee of the system on or after 
        August 17, 2001;


        (6) Any educational, administrative, professional or 
    other staff
employed by and under the supervision and 
    control of a regional
superintendent of schools, provided 
    such employment position requires the
person to be 
    certificated under the law governing the certification of

    teachers and is in an educational program serving 2 or more 
    districts in
accordance with a joint agreement authorized 
    by the School Code or by federal
legislation;


        (7) Any educational, administrative, professional or 
    other staff employed
in  an educational program serving 2 or 
    more school districts in accordance
with a joint agreement 
    authorized by the School Code or by federal
legislation and 
    in a position requiring certification under the laws

    governing the certification of teachers;


        (8) Any officer or employee of a statewide teacher 
    organization or
officer of a national teacher organization 
    who is certified under the law
governing certification of 
    teachers, provided: (i) the individual had
previously 
    established creditable service under this Article, (ii) 
    the
individual files with the system an irrevocable 
    election to become a member before the effective date of 
    this amendatory Act of the 97th General Assembly,
 (iii) the 
    individual does not receive credit for such service under 
    any
other Article of this Code, and (iv) the individual 
    first became an officer or employee of the teacher 
    organization and becomes a member before the effective date 
    of this amendatory Act of the 97th General Assembly;


        (9) Any educational, administrative, professional, or 
    other staff
employed in a charter school operating in 
    compliance with the Charter
Schools Law who is certificated 
    under the law governing the certification
of teachers;

        (10) Any person employed, on the effective date of this 
    amendatory Act of the 94th General Assembly, by the 
    Macon-Piatt Regional Office of Education in a 
    birth-through-age-three pilot program receiving funds 
    under Section 2-389 of the School Code who is required by 
    the Macon-Piatt Regional Office of Education to hold a 
    teaching certificate, provided that the Macon-Piatt 
    Regional Office of Education makes an election, within 6 
    months after the effective date of this amendatory Act of 
    the 94th General Assembly,  to have the person participate 
    in the system. Any service established prior to the 
    effective date of this amendatory Act of the 94th General 
    Assembly for service as an employee of the Macon-Piatt 
    Regional Office of Education in a birth-through-age-three 
    pilot program receiving funds under Section 2-389 of the 
    School Code shall be considered service as a teacher if 
    employee and employer contributions have been received by 
    the system and the system has not refunded those 
    contributions.

    An annuitant receiving a retirement annuity under this 
Article or under
Article 17 of this Code who is employed by a 
board of education
or other employer as permitted under Section 
16-118
or 16-150.1 is not a "teacher" for purposes of this 
Article.  A person who
has received a single-sum retirement 
benefit under Section 16-136.4 of this
Article is not a 
"teacher" for purposes of this Article.

(Source: P.A. 97-651, eff. 1-5-12; 98-463, eff. 8-16-13.)

 
    (40 ILCS 5/16-106.4 new)
    Sec. 16-106.4. Tier 1 member. "Tier 1 member": A member 
under this Article who first became a member or participant 
before January 1, 2011 under any reciprocal retirement system 
or pension fund established under this Code other than a 
retirement system or pension fund established under Article 2, 
3, 4, 5, 6, or 18 of this Code.
 



    (40 ILCS 5/16-112)  (from Ch. 108 1/2, par. 16-112)



    Sec. 16-112. Regular interest. 
"Regular interest": 
    (a) For computations
based upon prior service credits, 
interest at the following rates compounded
annually:  For 
periods prior to July 1, 1947, 4% per year; for periods from

July 1, 1947 through June 30, 1971, 3% per year; for periods 
from July 1,
1971 through June 30, 1977 at the rate of 4% per 
year; for periods from
July 1, 1977 through June 30, 1981, 5% 
per year; for periods after June
30, 1981 through June 30, 
2014, 6% per year.

    (b) For computations based upon membership service 
credits, interest at
the following rates, compounded annually:  
For periods prior to July 1,
1971, 3% per year; for periods 
from July 1, 1971 through June 30, 1977, 4%
per year; for 
periods from July 1, 1977 through June 30, 1981, 5% per year;

for periods after June 30, 1981 through June 30, 2014, 6% per 
year.

    (c) For a fiscal year that begins on or after July 1, 2014, 
for all computations, the interest rate of 30-year United 
States Treasury bonds on July 1  of that given fiscal year, plus 
75 basis points. 
(Source: P.A. 83-1440.)

 



    (40 ILCS 5/16-121)  (from Ch. 108 1/2, par. 16-121)



    Sec. 16-121. Salary. "Salary": The actual compensation 
received by a teacher during any
school year and recognized by 
the system in accordance with
rules of the board. For purposes 
of this Section, "school year" includes
the regular school term 
plus any additional period for which a teacher is
compensated 
and such compensation is recognized by the rules of the board.

    In the case of a person who first becomes a member on or 
after
the effective date of this amendatory Act of the 98th 
General
Assembly, "salary" shall not include any payment for 
unused
sick or vacation time.
    Notwithstanding any other provision of this Code, the

annual salary of a Tier 1 member for the purposes of this Code 
shall
not exceed, for periods of service on or after the 
effective
date of this amendatory Act of the 98th General 
Assembly, the
greater of (i) the annual limitation determined 
from time to time
under subsection (b-5) of Section 1-160 of 
this Code, (ii) the annualized
salary of the Tier 1 member on 
that effective date, or (iii) the annualized salary of the Tier 
1 member immediately preceding the expiration, renewal, or 
amendment of an employment contract or collective bargaining 
agreement in effect on that effective date. 
(Source: P.A. 84-1028.)

 



    (40 ILCS 5/16-127)  (from Ch. 108 1/2, par. 16-127)



    Sec. 16-127. Computation of creditable service. 

    (a) Each member shall receive regular credit for all

service as a teacher from the date membership begins, for which

satisfactory evidence is supplied and all contributions have 
been paid.

    (b) The following periods of service shall earn optional 
credit and
each member shall receive credit for all such 
service for which
satisfactory evidence is supplied and all 
contributions have been paid as
of the date specified:


        (1) Prior service as a teacher.


        (2) Service in a capacity essentially similar or 
    equivalent to that of a
teacher, in the public common 
    schools in school districts in this State not
included 
    within the provisions of this System, or of any other 
    State,
territory, dependency or possession of the United 
    States, or in schools
operated by or under the auspices of 
    the United States, or under the
auspices of any agency or 
    department of any other State, and service during
any 
    period of professional speech correction or special 
    education
experience for a public agency within this State 
    or any other State,
territory, dependency or possession of 
    the United States, and service prior
to February 1, 1951 as 
    a recreation worker for the Illinois Department of
Public 
    Safety, for a period not exceeding the lesser of 2/5 of the 
    total
creditable service of the member or 10 years.  The 
    maximum service of 10
years which is allowable under this 
    paragraph shall be reduced by the
service credit which is 
    validated by other retirement systems under
paragraph (i) 
    of Section 15-113 and paragraph 1 of Section 17-133.  Credit

    granted under this paragraph may not be used in 
    determination of a
retirement annuity or disability 
    benefits unless the member has at least 5
years of 
    creditable service earned subsequent to this employment 
    with one
or more of the following systems: Teachers' 
    Retirement System of the State
of Illinois, State 
    Universities Retirement System, and the Public School

    Teachers' Pension and Retirement Fund of Chicago.  Whenever 
    such service
credit exceeds the maximum allowed for all 
    purposes of this Article, the
first service rendered in 
    point of time shall be considered.
The changes to this 
    subdivision (b)(2) made by Public Act 86-272 shall
apply 
    not only to persons who on or after its effective date 
    (August 23,
1989) are in service as a teacher under the 
    System, but also to persons
whose status as such a teacher 
    terminated prior to such effective date,
whether or not 
    such person is an annuitant on that date.


        (3) Any periods immediately following teaching 
    service, under this
System or under Article 17, (or 
    immediately following service prior to
February 1, 1951 as 
    a recreation worker for the Illinois Department of
Public 
    Safety) spent in active service with the military forces of 
    the
United States; periods spent in educational programs 
    that prepare for
return to teaching sponsored by the 
    federal government following such
active military service; 
    if a teacher returns to teaching service within
one 
    calendar year after discharge or after the completion of 
    the
educational program, a further period, not exceeding 
    one calendar year,
between time spent in military service 
    or in such educational programs and
the return to 
    employment as a teacher under this System; and a period of 
    up
to 2 years of active military service not immediately 
    following employment
as a teacher.


        The changes to this Section and Section 16-128 relating 
    to military
service made by P.A. 87-794 shall apply not 
    only to persons who on or after its
effective date are in 
    service as a teacher under the System, but also to
persons 
    whose status as a teacher terminated prior to that date, 
    whether or not
the person is an annuitant on that date.  In 
    the case of an annuitant who
applies for credit allowable 
    under this Section for a period of military
service that 
    did not immediately follow employment, and who has made the

    required contributions for such credit, the annuity shall 
    be recalculated to
include the additional service credit, 
    with the increase taking effect on the
date the System 
    received written notification of the annuitant's intent to

    purchase the credit, if payment of all the required 
    contributions is made
within 60 days of such notice, or 
    else on the first annuity payment date
following the date 
    of payment of the required contributions.  In calculating

    the automatic annual increase for an annuity that has been 
    recalculated under
this Section, the increase attributable 
    to the additional service allowable
under P.A. 87-794 shall 
    be included in the calculation of automatic annual

    increases accruing after the effective date of the 
    recalculation.


        Credit for military service shall be determined as 
    follows: if entry
occurs during the months of July, August, 
    or September and the member was a
teacher at the end of the 
    immediately preceding school term, credit shall
be granted 
    from July 1 of the year in which he or she entered service; 
    if
entry occurs during the school term and the teacher was 
    in teaching service
at the beginning of the school term, 
    credit shall be granted from July 1 of
such year. In all 
    other cases where credit for military service is allowed,

    credit shall be granted from the date of entry into the 
    service.


        The total period of military service for which credit 
    is granted shall
not exceed 5 years for any member unless 
    the service:  (A) is validated
before July 1, 1964, and (B) 
    does not extend beyond July 1, 1963.  Credit
for military 
    service shall be granted under this Section only if not 
    more
than 5 years of the military service for which credit 
    is granted under this
Section is used by the member to 
    qualify for a military retirement
allotment from any branch 
    of the armed forces of the United States. The
changes to 
    this subdivision (b)(3) made by Public Act 86-272 shall 
    apply
not only to persons who on or after its effective 
    date (August 23, 1989)
are in service as a teacher under 
    the System, but also to persons whose
status as such a 
    teacher terminated prior to such effective date, whether
or 
    not such person is an annuitant on that date.


        (4) Any periods served as a member of the General 
    Assembly.


        (5)(i) Any periods for which a teacher, as defined in 
    Section
16-106, is granted a leave of absence, provided he 
    or she returns to teaching
service creditable under this 
    System or the State Universities Retirement
System 
    following the leave; (ii) periods during which a teacher is

    involuntarily laid off from teaching, provided he or she 
    returns to teaching
following the lay-off; (iii) periods 
    prior to July 1, 1983 during which
a teacher ceased covered 
    employment due to pregnancy, provided that the teacher

    returned to teaching service creditable under this System 
    or the State
Universities Retirement System following the 
    pregnancy and submits evidence
satisfactory to the Board 
    documenting that the employment ceased due to
pregnancy; 
    and (iv) periods prior to July 1, 1983 during which a 
    teacher
ceased covered employment for the purpose of 
    adopting an infant under 3 years
of age or caring for a 
    newly adopted infant under 3 years of age, provided that

    the teacher returned to teaching service creditable under 
    this System or the
State Universities Retirement System 
    following the adoption and submits
evidence satisfactory 
    to the Board documenting that the employment ceased for
the 
    purpose of adopting an infant under 3 years of age or 
    caring for a newly
adopted infant under 3 years of age.  
    However, total credit under this
paragraph (5) may not 
    exceed 3 years.


        Any qualified member or annuitant may apply for credit 
    under item (iii)
or (iv) of this paragraph (5) without 
    regard to whether service was
terminated before the 
    effective date of this amendatory Act of 1997.  In the case 
    of an annuitant who establishes credit under item (iii)
or 
    (iv), the annuity shall be recalculated to include the 
    additional
service credit.  The increase in annuity shall 
    take effect on the date the
System receives written 
    notification of the annuitant's intent to purchase the

    credit, if the required evidence is submitted and the 
    required contribution
paid within 60 days of that 
    notification, otherwise on the first annuity
payment date 
    following the System's receipt of the required evidence and

    contribution.  The increase in an annuity recalculated 
    under this provision
shall be included in the calculation 
    of automatic annual increases in the
annuity accruing after 
    the effective date of the recalculation.


        Optional credit may be purchased under this subsection 
    (b)(5) for
periods during which a teacher has been granted 
    a leave of absence pursuant
to Section 24-13 of the School 
    Code.  A teacher whose service under this
Article terminated 
    prior to the effective date of P.A. 86-1488 shall be

    eligible to purchase such optional credit.  If a teacher who 
    purchases this
optional credit is already receiving a 
    retirement annuity under this Article,
the annuity shall be 
    recalculated as if the annuitant had applied for the leave

    of absence credit at the time of retirement.  The difference 
    between the
entitled annuity and the actual annuity shall 
    be credited to the purchase of
the optional credit.  The 
    remainder of the purchase cost of the optional credit
shall 
    be paid on or before April 1, 1992.


        The change in this paragraph made by Public Act 86-273 
    shall
be applicable to teachers who retire after June 1, 
    1989, as well as to
teachers who are in service on that 
    date.


        (6) For a person who first becomes a member before the

    effective date of this amendatory Act of the 98th General

    Assembly, any Any days of unused and uncompensated 
    accumulated sick leave earned
by a teacher.  The service 
    credit granted under this paragraph shall be the
ratio of 
    the number of unused and uncompensated accumulated sick 
    leave days
to 170 days, subject to a maximum of 2 years of 
    service
credit.  Prior to the member's retirement, each 
    former employer shall
certify to the System the number of 
    unused and uncompensated accumulated
sick leave days 
    credited to the member at the time of termination of 
    service.
The period of unused sick leave shall not be 
    considered in determining
the effective date of 
    retirement.  A member is not required to make
contributions 
    in order to obtain service credit for unused sick leave.


        Credit for sick leave shall, at retirement, be granted 
    by the System
for any retiring regional or assistant 
    regional superintendent of schools who first becomes a

    member before the effective date of this amendatory Act of

    the 98th General Assembly
at the rate of 6 days per year of 
    creditable service or portion thereof
established while 
    serving as such superintendent or assistant

    superintendent.


        (7) Periods prior to February 1, 1987 served as an 
    employee of the
Illinois Mathematics and Science Academy 
    for which credit has not been
terminated under Section 
    15-113.9 of this Code.


        (8) Service as a substitute teacher for work performed

    prior to July 1, 1990.


        (9) Service as a part-time teacher for work performed

    prior to July 1, 1990.


        (10) Up to 2 years of employment with Southern Illinois 
    University -
Carbondale from September 1, 1959 to August 
    31, 1961, or with Governors
State University from September 
    1, 1972 to August 31, 1974, for which the
teacher has no 
    credit under Article 15.  To receive credit under this item

    (10), a teacher must apply in writing to the Board and pay 
    the required
contributions before May 1, 1993 and have at 
    least 12 years of service
credit under this Article.

    (b-1) A member may establish optional credit for up to 2 
years of service
as a teacher or administrator employed by a 
private school recognized by the
Illinois State Board of 
Education, provided that the teacher (i) was certified
under 
the law governing the certification of teachers at the time the 
service
was rendered, (ii) applies in writing on or after 
August 1, 2009 and on or before
August 1, 2012, (iii) supplies 
satisfactory evidence of the employment, (iv)
completes at 
least 10 years of contributing service as a teacher as defined 
in
Section 16-106, and (v) pays the contribution required in 
subsection (d-5) of
Section 16-128.  The member may apply for 
credit under this subsection and pay
the required contribution 
before completing the 10 years of contributing
service required 
under item (iv), but the credit may not be used until the
item 
(iv) contributing service requirement has been met.

    (c) The service credits specified in this Section shall be 
granted only
if: (1) such service credits are not used for 
credit in any other statutory
tax-supported public employee 
retirement system other than the federal Social
Security 
program; and (2) the member makes the required contributions as

specified in Section 16-128.  Except as provided in subsection 
(b-1) of
this Section, the service credit shall be effective as 
of the date the
required contributions are completed.

    Any service credits granted under this Section shall 
terminate upon
cessation of membership for any cause.

    Credit may not be granted under this Section covering any 
period for
which an age retirement or disability retirement 
allowance has been paid.

(Source: P.A. 96-546, eff. 8-17-09.)

 



    (40 ILCS 5/16-132)  (from Ch. 108 1/2, par. 16-132)



    Sec. 16-132. Retirement annuity eligibility.  
    (a) A member who has at least 20 years of creditable 
service is entitled to a
retirement annuity upon or after 
attainment of age 55.
A member who has at least 10 but less 
than 20 years of creditable service is
entitled to a retirement 
annuity upon or after attainment of age 60.
A member who has at 
least 5 but less than 10 years of creditable service is

entitled to a retirement annuity upon or after attainment of 
age 62.
A member who (i) 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, (ii) has earned at

least 5 years of contributing creditable service as an employee 
of a department
as defined in Section 14-103.04, and (iii) 
retires on or after January 1, 2001
is entitled to a retirement 
annuity upon or after attainment of 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.

    A member who is eligible to receive a retirement annuity of 
at least 74.6% of
final average salary and will attain age 55 
on or before December 31 during the
year which commences on 
July 1 shall be deemed to attain age 55 on the
preceding June 
1.

    (b) Notwithstanding subsection (a) of this Section, for a 
Tier 1 member who begins receiving a retirement annuity under 
this Section on or after July 1, 2014, the required retirement 
age under subsection (a) is increased as follows, based on the 
Tier 1 member's age on June 1, 2014: 
        (1) If he or she is at least age 46  on June 1, 2014, 
    then the required retirement ages under subsection (a) 
    remain unchanged.
        (2) If he or she is at least age 45 but less than age 46 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 4 months.
        (3) If he or she is at least age 44 but less than age 45 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 8 months.
        (4) If he or she is at least age 43 but less than age 44 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 12 months.
        (5) If he or she is at least age 42 but less than age 43 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 16 months.
        (6) If he or she is at least age 41 but less than age 42 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 20 months.
        (7) If he or she is at least age 40 but less than age 41 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 24 months.
        (8) If he or she is at least age 39 but less than age 40 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 28 months.
        (9) If he or she is at least age 38 but less than age 39 
    on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 32 months.
        (10) If he or she is at least age 37 but less than age 
    38 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 36 months.
        (11) If he or she is at least age 36 but less than age 
    37 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 40 months.
        (12) If he or she is at least age 35 but less than age 
    36 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 44 months.
        (13) If he or she is at least age 34 but less than age 
    35 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 48 months.
        (14) If he or she is at least age 33 but less than age 
    34 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 52 months.
        (15) If he or she is at least age 32 but less than age 
    33 on June 1, 2014, then the required retirement ages under 
    subsection (a) are increased by 56 months.
        (16) If he or she is less than age 32 on June 1, 2014, 
    then the required retirement ages under subsection (a) are 
    increased by 60 months.
    Notwithstanding Section 1-103.1, this subsection (b) 
applies without regard to whether or not the Tier 1 member is 
in active service under this Article on or after  the effective 
date of this amendatory Act of the 98th General Assembly. 
    (c) A member meeting the above eligibility conditions is 
entitled to a retirement
annuity upon written application to 
the board setting forth the date the member
wishes the 
retirement annuity to commence.  However, the effective date of 
the
retirement annuity shall be no earlier than the day 
following the last day of
creditable service, regardless of the 
date of official termination of
employment.

    (d) To be eligible for a retirement annuity, a member shall 
not be employed
as a teacher in the schools included under this 
System or under Article 17,
except (i) as provided in Section 
16-118 or 16-150.1, (ii) if
the member is disabled (in which 
event, eligibility for salary must cease),
or (iii) if the 
System is required by federal law to commence
payment due to 
the member's age; the changes to this sentence made by Public 
Act 93-320 this
amendatory Act of the 93rd General Assembly 
apply without
regard to whether the member terminated 
employment before or after its
effective date.

(Source: P.A. 93-320, eff. 7-23-03.)

 



    (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
(using the rate of 
        regular interest in effect at the time of retirement 
        for retirements occurring on or after July 1, 2014) 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 (using the rate of 
        regular interest in effect at the time of retirement 
        for retirements occurring on or after July 1, 2014) 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 
        (using the rate of regular interest in effect at the 
        time of retirement for retirements occurring on or 
        after July 1, 2014) 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.

        Notwithstanding any other provision of this paragraph 
    (A), a teacher's retirement annuity calculated under this 
    paragraph (A) shall not be less than the retirement annuity 
    that teacher would have received under this paragraph (A) 
    had he or she retired during the fiscal year preceding the 
    effective date of this amendatory Act of the 98th General 
    Assembly. 
        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. 94-4, eff. 6-1-05.)

 



    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)



    Sec. 16-133.1. Automatic annual increase in annuity. 

    (a) This subsection (a) is subject to subsections (a-1) and 
(a-2). Each member with creditable service and retiring on or 
after August 26,
1969 is entitled to the automatic annual 
increases in annuity provided under
this Section while 
receiving a retirement annuity or disability retirement

annuity from the system.

    An annuitant shall first be entitled to an initial increase 
under this
Section on the January 1 next following the first 
anniversary of retirement,
or January 1 of the year next 
following attainment of age 61, whichever is
later.  At such 
time, the system shall pay an initial increase determined as

follows:


        (1) 1.5% of the originally granted retirement annuity 
    or disability
retirement annuity multiplied by the number 
    of years elapsed, if any, from the date of retirement
until 
    January 1, 1972, plus


        (2) 2% of the originally granted annuity multiplied by 
    the number of
years elapsed, if any, from the date of 
    retirement or January
1, 1972, whichever is later, until 
    January 1, 1978, plus


        (3) 3% of the originally granted annuity multiplied by 
    the number
of years elapsed from the date of retirement or 
    January 1,
1978, whichever is later, until the effective 
    date of the initial
increase.

However, the initial annual increase calculated under this 
Section for the
recipient of a disability retirement annuity 
granted under Section 16-149.2
shall be reduced by an amount 
equal to the total of all increases in that
annuity received 
under Section 16-149.5 (but not exceeding 100% of the amount
of 
the initial increase otherwise provided under this Section).

    Following the initial increase, automatic annual increases 
in annuity shall
be payable on each January 1 thereafter during 
the lifetime of the annuitant,
determined as a percentage of 
the originally granted retirement annuity
or disability 
retirement annuity for increases granted prior to January
1, 
1990, and calculated as a percentage of the total amount of 
annuity,
including previous increases under this Section, for 
increases granted on
or after January 1, 1990, as follows:  1.5% 
for periods prior to January 1,
1972, 2% for periods after 
December 31, 1971 and prior to January 1, 1978,
and 3% for 
periods after December 31, 1977.

    (a-1) Notwithstanding subsection (a), but subject to the 
provisions of subsection (a-2), all automatic increases 
payable under subsection (a) on or after the effective date of 
this amendatory Act of the 98th General Assembly shall be 
calculated as 3% of the lesser of (1) the total annuity
payable 
at the time of the increase, including previous
increases 
granted, or (2) $1,000 multiplied by the number of years of 
creditable service upon which the annuity is based; however, in 
the case of an initial increase under subsection (a)  that is 
subject to this subsection:
        (i) if more than one year has elapsed from the date of 
    retirement to the effective date of the initial
increase 
    under this Section, the applicable percentage shall be the 
    sum of the percentages for each such elapsed year; and
        (ii) in the case of a disability retirement annuity 
    granted under Section 16-149.2,  the initial increase shall 
    be   subject to the reduction provided in subsection (a) for 
    increases previously received   under Section 16-149.5. 
    Beginning January 1, 2016, the $1,000 referred to in item 
(2) of this subsection (a-1) shall be increased on each January 
1 by the annual unadjusted percentage increase (but not less 
than zero) in the consumer price index-u for the 12 months 
ending with the preceding September; these adjustments shall be 
cumulative and compounded.
For the purposes of this subsection 
(a-1), "consumer price index-u" means the index published by 
the Bureau of Labor Statistics of the United States Department 
of Labor that measures the average change in prices of goods 
and services purchased by all urban consumers, United States 
city average, all items, 1982-84 = 100. The new dollar amount 
resulting from each annual adjustment shall be determined by 
the Public Pension Division of the Department of Insurance and 
made available to the System by November 1 of each year. 
    This subsection (a-1) is applicable without regard to 
whether the person is in service on or after the effective date 
of  this amendatory Act of the 98th General Assembly. 
    (a-2) Notwithstanding subsections (a) and (a-1), for an 
active or inactive Tier 1 member who has not begun to receive a 
retirement annuity under this Article before July 1, 2014:
        (1) the second automatic annual increase payable under 
    subsection (a) shall be at the rate of 0% of the total 
    annuity payable at the time of the increase if he or she is 
    at least age 50 on the effective date of this amendatory 
    Act; 
        (2) the second, fourth,  and sixth automatic annual 
    increases payable under subsection (a) shall be at the rate 
    of 0% of the total annuity payable at the time of the 
    increase if he or she is at least age 47 but less than age 
    50 on the effective date of this amendatory Act;
        (3) the second, fourth, sixth, and eighth automatic 
    annual increases payable under subsection (a) shall be at 
    the rate of 0% of the total annuity payable at the time of 
    the increase if he or she is at least age 44 but less than 
    age 47 on the effective date of this amendatory Act; and
        (4) the second, fourth, sixth, eighth, and tenth 
    automatic annual increases payable under subsection (a) 
    shall be at the rate of 0% of the total annuity payable at 
    the time of the increase if he or she is less than age 44 on 
    the effective date of this amendatory Act. 
    For the purposes of Section 1-103.1, this subsection (a-2) 
is applicable without regard to whether the person is in 
service on or after the effective date of  this amendatory Act 
of the 98th General Assembly. 
    (b) The automatic annual increases in annuity provided 
under this Section
shall not be applicable unless a member has 
made contributions toward such
increases for a period 
equivalent to one full year of creditable service.
If a member 
contributes for service performed after August 26, 1969 but
the 
member becomes an annuitant before such contributions amount to 
one
full year's contributions based on the salary at the date 
of retirement,
he or she may pay the necessary balance of the 
contributions to the system
and be eligible for the automatic 
annual increases in annuity provided under
this Section.

    (c) Each member shall make contributions toward the cost of 
the automatic
annual increases in annuity as provided under 
Section 16-152.

    (d) An annuitant receiving a retirement annuity or 
disability retirement
annuity on July 1, 1969, who subsequently 
re-enters service as a teacher
is eligible for the automatic 
annual increases in annuity provided under
this Section if he 
or she renders at least one year of creditable service

following the latest re-entry.

    (e) In addition to the automatic annual increases in 
annuity provided
under this Section, an annuitant who meets the 
service requirements of this
Section and whose retirement 
annuity or disability retirement annuity began
on or before 
January 1, 1971 shall receive, on January 1, 1981, an increase

in the annuity then being paid of one dollar per month for each 
year of
creditable service.  On January 1, 1982, an annuitant 
whose retirement
annuity or disability retirement annuity 
began on or before January 1, 1977
shall receive an increase in 
the annuity then being paid of one dollar per
month for each 
year of creditable service. 

    On January 1, 1987, any annuitant whose retirement annuity 
began
on or before January 1, 1977, shall receive an increase 
in the monthly
retirement annuity equal to 8¢ per year of 
creditable service times the
number of years that have elapsed 
since the annuity began.

(Source: P.A. 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 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) 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 on or before June 30, 2013 (or 
January 1, 2014 in the case of a member who has filed a notice 
of intent to retire with his or her employer on or before June 
30, 2013 and attains age 55 during the period July 1, 2013 
through December 31, 2013), and applying for a retirement 
annuity within 6 months of the last day of teaching for which 
retirement contributions were required, and whose last day of 
teaching is on or before June 30, 2013, 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.
    For persons not qualifying for the early retirement without 
discount option under this subsection (c), the option is 
extended for 3 years under subsection (d), but subject to the 
changes in eligibility, conditions, and required contributions 
provided in that subsection. 
    (d) A member who is not eligible for the early retirement 
without discount option under subsection (c) may qualify  for 
the early retirement without discount option under this 
subsection (d) if the member (1) retires on or after July 1, 
2013 and before July 1, 2016, (2) applies for a retirement 
annuity within 6 months of the last day of teaching for which 
retirement contributions were required, and (3)  receives a 
certification of eligibility under this subsection from the 
member's last employer. 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.
    A qualifying member 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 this election shall also 
obligate the last employer to make a one-time nonrefundable 
contribution to the System.
    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 14.4% 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 29.3% for each year the 
member is under age 60.
    Upon receipt of the application, election, and  
certification of eligibility, 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 (d)  is not 
applicable until the member's contribution has been received by 
the System; however, the date that contribution is received 
shall not be considered in determining the effective date of 
retirement.
    Eligibility to  retire under this subsection (d) shall 
require the approval of  the member's last employer under this 
Article, granted in accordance with criteria adopted by that  
employer with the mutual consent of the bargaining agent of a 
majority of the members employed by that employer. If the 
employer grants its approval for a member to retire under this 
subsection (d), the employer shall submit a certification of 
eligibility for the member in a manner prescribed by the 
System. 
    The early retirement without discount option under this 
subsection (d) terminates on July 1, 2016. 
    For participants to whom subsection (b) of Section 16-132 
applies, the references to age 60 in this subsection are 
increased as provided in subsection (b) of Section 16-132. 
(Source: P.A. 98-42, eff. 6-28-13.)

 



    (40 ILCS 5/16-136.1)  (from Ch. 108 1/2, par. 16-136.1)



    Sec. 16-136.1. Annual increase for certain annuitants. (a) 
Any annuitant receiving a retirement annuity on June 30, 1969 
and
any member retiring after June 30, 1969 shall be eligible 
for the annual
increases provided under this Section provided 
the annuitant is ineligible
for the automatic annual increase 
in annuity provided under Section
16-133.1, and provided 
further that (1) retirement occurred at age 55 or over
and was 
based on 5 or more years of creditable service or (2) if

retirement occurred prior to age 55, the retirement annuity
was 
based on 20 or more years of creditable service.

    (b) This subsection (b) is subject to subsections (b-1) and 
(b-2). An annuitant entitled to increases under this Section 
shall be entitled
to the initial increase as of the later of: 
(1) January 1 following
attainment of age 65, (2) January 1 
following the first anniversary
of retirement, or (3) the first 
day of the month following receipt of
the required qualifying 
contribution from the annuitant.  The initial monthly
increase 
shall be computed on the basis of the period elapsed between

the later of the date of last retirement or attainment of age 
50 and the
date of qualification for the initial increase, at 
the rate of 1 1/2% of
the original monthly retirement annuity 
per year for periods
prior to September 1, 1971, and at the 
rate of 2% per year for periods between
September 1, 1971 and 
September 1, 1978, and at the rate of 3% per year
for periods 
thereafter.

    An annuitant who has received an initial increase under 
this Section,
shall be entitled, on each January 1 following 
the granting of the
initial increase, to an increase of 3% of 
the original monthly retirement
annuity for increases granted 
prior to January 1, 1990, and equal to 3%
of the total annuity, 
including previous increases under this Section, for
increases 
granted on or after January 1, 1990.  The original monthly

retirement annuity for computations under this subsection
(b) 
shall be considered to be $83.34 for any annuitant entitled to 
benefits
under Section 16-134. The minimum original disability 
retirement annuity
for computations under this subsection (b) 
shall be considered to be
$33.34 per month for any annuitant 
retired on account of disability.

    (b-1) Notwithstanding subsection (b), but subject to the 
provisions of subsection (b-2), all automatic increases 
payable under subsection (b) on or after the effective date of 
this amendatory Act of the 98th General Assembly shall be 
calculated as 3% of the lesser of (1) the total annuity
payable 
at the time of the increase, including previous
increases 
granted, or (2) $1,000 multiplied by the number of years of 
creditable service upon which the annuity is based; however, in 
the case of an initial increase under subsection (b)  that is 
subject to this subsection, if more than one year has elapsed 
from the date of retirement to the effective date of the 
initial
increase under this Section, the applicable percentage 
shall be the sum of the percentages for each such elapsed year.
    Beginning January 1, 2016, the $1,000 referred to in item 
(2) of this subsection (b-1) shall be increased on each January 
1 by the annual unadjusted percentage increase (but not less 
than zero) in the consumer price index-u for the 12 months 
ending with the preceding September; these adjustments shall be 
cumulative and compounded.
For the purposes of this subsection 
(b-1), "consumer price index-u" means the index published by 
the Bureau of Labor Statistics of the United States Department 
of Labor that measures the average change in prices of goods 
and services purchased by all urban consumers, United States 
city average, all items, 1982-84 = 100. The new dollar amount 
resulting from each annual adjustment shall be determined by 
the Public Pension Division of the Department of Insurance and 
made available to the System by November 1 of each year. 
    This subsection (b-1) is applicable without regard to 
whether the person is in service on or after the effective date 
of  this amendatory Act of the 98th General Assembly. 
    (b-2) Notwithstanding subsections (b) and (b-1), for an 
active or inactive Tier 1 member who is subject to this Section 
and has not begun to receive a retirement annuity under this 
Article before July 1, 2014:
        (1) the second automatic annual increase payable under 
    subsection (b) shall be at the rate of 0% of the total 
    annuity payable at the time of the increase if he or she is 
    at least age 50 on the effective date of this amendatory 
    Act; 
        (2) the second, fourth,  and sixth automatic annual 
    increases payable under subsection (b) shall be at the rate 
    of 0% of the total annuity payable at the time of the 
    increase if he or she is at least age 47 but less than age 
    50 on the effective date of this amendatory Act;
        (3) the second, fourth, sixth, and eighth automatic 
    annual increases payable under subsection (b) shall be at 
    the rate of 0% of the total annuity payable at the time of 
    the increase if he or she is at least age 44 but less than 
    age 47 on the effective date of this amendatory Act; and
        (4) the second, fourth, sixth, eighth, and tenth 
    automatic annual increases payable under subsection (b) 
    shall be at the rate of 0% of the total annuity payable at 
    the time of the increase if he or she is less than age 44 on 
    the effective date of this amendatory Act. 
    For the purposes of Section 1-103.1, this subsection (b-2) 
is applicable without regard to whether the person is in 
service on or after the effective date of  this amendatory Act 
of the 98th General Assembly. 
    (c) An annuitant who otherwise qualifies for annual

increases under this Section must make a one-time payment of
1% 
of the monthly final average salary for each full year of the 
creditable
service forming the basis of the retirement annuity 
or, if the
retirement annuity was not computed using final 
average salary, 1% of the
original monthly retirement annuity 
for each full year of service
forming the basis of the 
retirement annuity.

    (d) In addition to other increases which may be provided by 
this Section,
regardless of creditable service, annuitants not 
meeting
the service requirements of Section 16-133.1 and whose 
retirement annuity
began on or before January 1, 1971 shall 
receive, on January
1, 1981, an increase in the retirement 
annuity then being paid
of one dollar per month for each year 
of creditable service forming
the basis of the retirement 
allowance.  On January 1, 1982, annuitants
whose retirement 
annuity began on or before January 1, 1977, shall receive
an 
increase in the retirement annuity then being paid of one 
dollar per
month for each year of creditable service.

    On January 1, 1987, any annuitant whose retirement annuity 
began
on or before January 1, 1977, shall receive an increase 
in the monthly
retirement annuity equal to 8¢ per year of 
creditable service times the
number of years that have elapsed 
since the annuity began.

(Source: P.A. 86-273.)

 



    (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)



    Sec. 16-152. Contributions by members. 

    (a) Except as provided in subsection (a-5), each 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 and, in the case of Tier 1 
    members, ending on June 30, 2014, 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 
    16-133.2.

    (a-5) Beginning July 1, 2014, in lieu of the contribution  
otherwise required under paragraph (1) of subsection (a), each 
Tier 1 member shall contribute 7% of salary towards the cost of 
the retirement annuity. Contributions made pursuant to this 
subsection (a-5) shall be deemed "normal contributions".
    (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,  if the early retirement without discount 
    option provided under subsection (d) of Section 16-133.2 is 
    terminated. In that event, the System shall provide to the 
    member, within 120 days after the option is terminated, an 
    application for a refund of those contributions.
(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; revised 
7-23-13.)

 
    (40 ILCS 5/16-152.5 new)
    Sec. 16-152.5. Use of contributions for health care 
subsidies. The System shall not use any contribution received 
by the System under this Article to provide a subsidy for the 
cost of participation in a retiree health care program.
 



    (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 100% 90% funded 
basis in accordance
with actuarial recommendations by the end 
of State fiscal year 2044.

    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  through until 
November 15, 2011, the Board shall certify to the
Governor the 
amount of the required State contribution for the coming fiscal

year.  The certification under this subsection (a-1) shall 
include a copy of the actuarial recommendations
upon which it 
is based and shall specifically identify the System's projected 
State normal cost for that fiscal year.

    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.

    On or before April 1, 2011, the Board shall recalculate and 
recertify to the Governor the amount of the required State 
contribution to the System for State fiscal year 2011, applying 
the changes made by Public Act 96-889 to the System's assets 
and liabilities as of June 30, 2009 as though Public Act 96-889 
was approved on that date. 
    (a-5) On or before November 1 of each year, beginning 
November 1, 2012, the Board shall submit to the State Actuary, 
the Governor, and the General Assembly a proposed certification 
of the amount of the required State contribution to the System 
for the next fiscal year, along with all of the actuarial 
assumptions, calculations, and data upon which that proposed 
certification is based. On or before January 1 of each year, 
beginning January 1, 2013, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification of the required State contributions.
    On or before January 15, 2013 and each January 15 
thereafter, the Board shall certify to the Governor and the 
General Assembly the amount of the required State contribution 
for the next fiscal year. The certification shall include a 
copy of the actuarial
recommendations upon which it is based 
and shall specifically identify the System's projected State 
normal cost for that fiscal year. The Board's certification 
must note any deviations from the State Actuary's recommended 
changes, the reason or reasons for not following the State 
Actuary's recommended changes, and the fiscal impact of not 
following the State Actuary's recommended changes on the 
required State contribution. 
    (a-10) For purposes of Section (c-5) of Section 20 of the 
Budget Stabilization Act, on or before November 1 of each year 
beginning November 1, 2014, the Board shall determine the 
amount of the State contribution to the System that would have 
been required for the next fiscal year if this amendatory Act 
of the 98th General Assembly had not taken effect, using the 
best and most recent available data but based on the law in 
effect on May 31, 2014.  The Board shall submit to the State 
Actuary, the Governor, and the General Assembly a proposed 
certification, along with the relevant law, actuarial 
assumptions, calculations, and data upon which that 
certification is based.  On or before January 1, 2015 and every 
January 1 thereafter, the State Actuary shall issue a 
preliminary report concerning the proposed certification and 
identifying, if necessary, recommended changes in actuarial 
assumptions that the Board must consider before finalizing its 
certification.  On or before January 15, 2015 and every January 
1 thereafter, the Board shall certify to the Governor and the 
General Assembly the amount of the State contribution to the 
System that would have been required for the next fiscal year 
if this amendatory Act of the 98th General Assembly had not 
taken effect, using the best and most recent available data but 
based on the law in effect on May 31, 2014.  The Board's 
certification must note any deviations from the State Actuary's 
recommended changes, the reason or reasons for not following 
the State Actuary's recommended changes, and the impact of not 
following the State Actuary's recommended changes. 
    (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 2015 through 2044, 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 
equal to the sum of (1) the State's portion of the projected 
normal cost for that fiscal year, plus (2) an amount sufficient 
to bring the total assets of the
System up to 100% of the total 
actuarial liabilities of the System by the end of
State fiscal 
year 2044.  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 2044 and shall be
determined under the projected 
unit cost method for fiscal year 2015 and under the entry age 
normal actuarial cost method for fiscal years 2016 through 
2044.
    For State fiscal years 2012 through 2014 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, 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 2009, 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.

    Notwithstanding any other provision of this Article, the 
total required State contribution for State fiscal year 2010 is 
$2,089,268,000 and shall be made from the proceeds of bonds 
sold in fiscal year 2010 pursuant to Section 7.2 of the General 
Obligation Bond Act, less (i) the pro rata share of bond sale 
expenses determined by the System's share of total bond 
proceeds, (ii) any amounts received from the Common School Fund 
in fiscal year 2010, and (iii) any reduction in bond proceeds 
due to the issuance of discounted bonds, if applicable. 
    Notwithstanding any other provision of this Article, the

total required State contribution for State fiscal year 2011 is

the amount recertified by the System on or before April 1, 2011 
pursuant to subsection (a-1) of this Section and shall be made 
from the proceeds of bonds
sold in fiscal year 2011 pursuant to 
Section 7.2 of the General
Obligation Bond Act, less (i) the 
pro rata share of bond sale
expenses determined by the System's 
share of total bond
proceeds, (ii) any amounts received from 
the Common School Fund
in fiscal year 2011, and (iii) any 
reduction in bond proceeds
due to the issuance of discounted 
bonds, if applicable.  This amount shall include, in addition to 
the amount certified by the System, an amount necessary to meet 
employer contributions required by the State as an employer 
under paragraph (e) of this Section, which may also be used by 
the System for contributions required by paragraph (a) of 
Section 16-127. 
    Beginning in State fiscal year 2045, the minimum State 
contribution for each fiscal year shall be the amount needed to 
maintain the total assets of the System at 100% of the total 
actuarial liabilities of the System. 
    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.

    Amounts received by the System pursuant to Section 25 of 
the Budget Stabilization Act or Section 8.12 of the State 
Finance Act in any fiscal year do not reduce and do not 
constitute payment of any portion of the minimum State 
contribution required under this Article in that fiscal year.  
Such amounts shall not reduce, and shall not be included in the 
calculation of, the required State contributions under this 
Article in any future year until the System has reached a 
funding ratio of at least 100% 90%.  A reference in this Article 
to the "required State contribution" or any substantially 
similar term does not include or apply to any amounts payable 
to the System under  Section 25 of the Budget Stabilization Act.
    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 through State 
fiscal year 2014, 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 in fiscal 
year 2003 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 in fiscal year 2003 
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 member's 
annual full-time salary rate 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. If a 
teacher's salary for the 2005-2006 school year is used to 
determine final average salary under this subsection (f), then 
the changes made to this subsection (f) by Public Act 94-1057 
shall apply in calculating whether the increase in his or her 
salary is in excess of 6%. For the purposes of this Section, 
change in employment under Section 10-21.12 of the School Code 
on or after June 1, 2005 shall constitute a change in employer. 
The System may require the employer to provide any pertinent 
information or documentation.
The changes made to this 
subsection (f) by this amendatory Act of the 94th General 
Assembly apply without regard to whether the teacher was in 
service on or after its effective date.

    Whenever it determines that a payment is or may be required 
under this subsection, the System shall calculate the amount of 
the payment  and bill the employer for that amount.  The bill 
shall specify the calculations used to determine the amount 
due. If the employer disputes the amount of the bill, it may, 
within 30 days after receipt of the bill, apply to the System 
in writing  for a recalculation. The application must specify in 
detail the grounds of the dispute and, if the employer asserts 
that the calculation is subject to subsection (g) or (h) of 
this Section, must include an affidavit setting forth and 
attesting to all facts within the employer's knowledge that are 
pertinent to the applicability of that subsection. Upon 
receiving a timely application for recalculation,  the System 
shall review the application and, if appropriate, recalculate 
the amount due.


    The employer contributions required under this subsection 
(f) may be paid in the form of a lump sum within 90 days after 
receipt of the bill. If the employer contributions are not paid 
within 90 days after receipt of the bill, then interest will be 
charged at a rate equal to the System's annual actuarially 
assumed rate of return on investment compounded annually from 
the 91st day after receipt of the bill. Payments must be 
concluded within 3 years after the employer's receipt of the 
bill.


    (g) This subsection (g) applies only to payments made or 
salary increases given on or after June 1, 2005 but before July 
1, 2011.  The changes made by Public Act 94-1057 shall not 
require the System to refund any payments received before
July 
31, 2006 (the effective date of Public Act 94-1057).
    When assessing payment for any amount due under subsection 
(f), the System shall exclude salary increases paid to teachers 
under contracts or collective bargaining agreements entered 
into, amended, or renewed before June 1, 2005.

    When assessing payment for any amount due under subsection 
(f), the System shall exclude salary increases paid to a 
teacher at a time when the teacher is 10 or more years from 
retirement eligibility under Section 16-132 or 16-133.2.

    When assessing payment for any amount due under subsection 
(f), the System shall exclude salary increases resulting from 
overload work, including summer school, when the school 
district has certified to the System, and the System  has 
approved the certification, that (i) the overload work is for 
the sole purpose of classroom instruction in excess of the 
standard number of classes for a full-time teacher in a school 
district during a school year and (ii) the salary increases are 
equal to or less than the rate of pay for classroom instruction 
computed on the teacher's current salary and work schedule.

    When assessing payment for any amount due under subsection 
(f), the System shall exclude a salary increase resulting from 
a promotion (i) for which the employee is required to hold a 
certificate or supervisory endorsement issued by the State 
Teacher Certification Board that is a different certification 
or supervisory endorsement than is required for the teacher's 
previous position and (ii) to a position that has existed and 
been filled by a member for no less than one complete academic 
year and the salary increase from the promotion is an increase 
that results in an amount no greater than the lesser of the 
average salary paid for other similar positions in the district 
requiring the same certification or the amount stipulated in 
the collective bargaining agreement for a similar position 
requiring the same certification.

    When assessing payment for any amount due under subsection 
(f), the System shall exclude any payment to the teacher from 
the State of Illinois or the State Board of Education over 
which the employer does not have discretion, notwithstanding 
that the payment is included in the computation of final 
average salary.

    (h) When assessing payment for any amount due under 
subsection (f), the System shall exclude any salary increase  
described in subsection (g) of this Section given on or after  
July 1, 2011 but before July 1, 2014 under a contract or 
collective bargaining agreement entered into, amended, or 
renewed on or after June 1, 2005 but before July 1, 2011. 
Notwithstanding any other provision of this Section, any 
payments made or salary increases given after June 30, 2014 
shall be used in assessing payment for any amount due under 
subsection (f) of this Section.

    (i) The System shall prepare a report and file copies of 
the report with the Governor and the General Assembly by 
January 1, 2007 that contains all of the following information:
        (1) The number of recalculations required by the 
    changes made to this Section by Public Act 94-1057 for each 
    employer.
        (2) The dollar amount by which each employer's 
    contribution to the System was changed due to 
    recalculations required by Public Act 94-1057.
        (3) The total amount the System received from each 
    employer as a result of the changes made to this Section by 
    Public Act 94-4.
        (4) The increase in the required State contribution 
    resulting from the changes made to this Section by Public 
    Act 94-1057.

    (j) For purposes of determining the required State 
contribution to the System, the value of the System's assets 
shall be equal to the actuarial value of the System's assets, 
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's 
assets shall be equal to the market value of the assets as of 
that date.  In determining the actuarial value of the System's 
assets for fiscal years after June 30, 2008, any actuarial 
gains or losses from investment return incurred in a fiscal 
year shall be recognized in equal annual amounts over the 
5-year period following that fiscal year. 
    (k) For purposes of determining the required State 
contribution to the system for a particular year, the actuarial 
value of assets shall be assumed to earn a rate of return equal 
to the system's actuarially assumed rate of return. 
(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 
96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff. 
6-18-12; 97-813, eff. 7-13-12.)

 
    (40 ILCS 5/16-158.2 new)
    Sec. 16-158.2. Obligations of State; funding guarantee.
    (a) Beginning July 1, 2014, the State shall be obligated to 
contribute to the System in each State fiscal year an amount 
not less than the sum of (i) the State's normal cost for the 
year and (ii) the portion of the unfunded accrued liability 
assigned to that year by law. Notwithstanding any other 
provision of  law, if the State fails to pay an amount required 
under this subsection, it shall be the obligation of the Board 
to seek payment of the required amount in compliance with the 
provisions of this Section and, if the amount remains unpaid, 
to bring a mandamus action in the Supreme Court of Illinois to 
compel the State to make the required payment. 
    If the System submits a voucher for contributions  required 
under Section 16-158 and the State fails to pay that voucher 
within 90 days of its receipt, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State, 
if the amount remains unpaid the Board shall commence a 
mandamus action in the Supreme Court of Illinois to compel the 
Comptroller to satisfy the voucher. 
    This subsection (a) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to pay a voucher for the 
contributions required under Section 16-158.
    (b) Beginning in State fiscal year 2016, the State shall be 
obligated to make the transfers set forth in subsections (c-5) 
and (c-10) of Section 20 of the Budget Stabilization Act and to 
pay to the System its proportionate share of the transferred 
amounts in accordance with Section 25 of the Budget 
Stabilization Act.  Notwithstanding any other provision of  law, 
if the State fails to transfer an amount required under this 
subsection or to pay to the System its proportionate share of 
the transferred amount in accordance with Section 25 of the 
Budget Stabilization Act, it shall be the obligation of the 
Board to seek transfer or payment of the required amount in 
compliance with the provisions of this Section and,  if the 
required amount remains untransferred or the required payment 
remains unpaid, to bring a mandamus action in the Supreme Court 
of Illinois to compel the State to make the required transfer 
or payment or both, as the case may be. 
    If the State fails to make a transfer  required under 
subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act or a payment to the System required under 
Section 25 of that Act, the Board shall submit a written 
request to the Comptroller seeking payment. A copy of the 
request shall be filed with the Secretary of State, and the 
Secretary of State shall provide a copy to the Governor and 
General Assembly. No earlier than the 16th day after the System 
files the request with the Comptroller and Secretary of State,  
if the required amount remains untransferred or the required 
payment remains unpaid, the Board shall commence a mandamus 
action in the Supreme Court of Illinois to compel the 
Comptroller to make the required transfer or payment or both, 
as the case may be. 
    This subsection (b) constitutes an express waiver of the 
State's sovereign immunity solely to the extent that it permits 
the Board to commence a mandamus action in the Supreme Court of 
Illinois to compel the Comptroller to make a transfer required 
under subsection (c-5) or (c-10) of Section 20 of the Budget 
Stabilization Act and to pay to the System its proportionate 
share of the transferred amount in accordance with Section 25 
of the Budget Stabilization Act.
    The obligations created by this subsection (b) expire when 
all of the requirements of subsections  (c-5) and (c-10) of 
Section 20 of the Budget Stabilization Act and Section 25 of 
the Budget Stabilization Act have been met. 
    (c) Any payments and transfers required to be made by the 
State pursuant to subsection (a) or (b) are expressly 
subordinate to the payment of the principal, interest, and 
premium, if any, on any bonded debt obligation of the State or 
any other State-created entity, either currently outstanding 
or to be issued, for which the source of repayment or security 
thereon is derived directly or indirectly from tax revenues 
collected by the State or any other State-created entity. 
Payments on such bonded obligations include any statutory fund 
transfers or other prefunding mechanisms or formulas set forth, 
now or hereafter, in State law or bond indentures, into debt 
service funds or accounts of the State related to such bond 
obligations, consistent with the payment schedules associated 
with such obligations.
 
    (40 ILCS 5/16-203)

    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 June 1, 2005 (the 
effective date of Public Act 94-4). "New benefit increase", 
however, does not include any benefit increase resulting from 
the changes made to this Article by Public Act 95-910 or by 
this amendatory Act of the 98th 95th 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 Insurance 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.

(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
 
    (40 ILCS 5/16-205 new)
    Sec. 16-205. Defined contribution plan.
    (a) By July 1, 2015, the  System shall prepare and implement 
a voluntary  defined contribution plan for up to 5% of eligible 
active Tier 1 members. The System shall determine the 5% cap by 
the number of active Tier 1 members on the effective date of 
this Section. The defined contribution plan developed under 
this Section shall be a plan that aggregates employer and 
employee contributions in individual participant accounts 
which, after meeting any other requirements, are used for 
payouts after retirement in accordance with this Section and 
any other applicable laws. 
    As used in this Section, "defined benefit plan" means the 
retirement plan available under this Article to Tier 1 members 
who have not made the election authorized under this Section.
        (1) Under the defined contribution plan,  an active Tier 
    1 member of this System could elect to cease accruing 
    benefits in the defined benefit plan under this Article and 
    begin accruing benefits for future service in the defined 
    contribution plan. Service credit under the defined 
    contribution plan may be used for determining retirement 
    eligibility under the defined benefit plan. An active Tier 
    1 member who elects to cease accruing benefits in his or 
    her defined benefit plan shall be prohibited from 
    purchasing service credit on or after the date of his or 
    her election.  A Tier 1 member making the irrevocable 
    election provided under this Section shall not receive 
    interest accruals to his or her benefit under paragraph (A) 
    of subsection (a) of Section 16-133 on or after the date of 
    his or her election.
        (2) Participants in the defined contribution plan  
    shall pay employee contributions at the same rate as Tier 1 
    members in this System who do not participate in the 
    defined contribution plan. 
        (3) State contributions shall be paid into the accounts 
    of all participants in the defined contribution plan at a 
    uniform rate,  expressed as a percentage of salary and 
    determined for each year. This rate shall  be no higher than 
    the employer's normal cost for Tier 1 members in the 
    defined benefit plan for that year, as determined by the 
    System and expressed as a percentage of salary, and shall 
    be no lower than 0% of salary.  The State shall adjust this 
    rate annually. 
        (4) The defined contribution plan shall require 5 years 
    of participation in the defined contribution plan before 
    vesting in State contributions.  If the participant fails to 
    vest in them, the State contributions, and the earnings 
    thereon, shall be forfeited.
        (5) The defined contribution plan may provide for 
    participants in the plan to be eligible for the defined 
    disability benefits available to other participants under 
    this Article. If it does, the System shall reduce the 
    employee contributions credited to the member's defined 
    contribution plan account  by an amount determined by the 
    System to cover the cost of offering such benefits.
        (6) The defined contribution plan shall provide a 
    variety of options for investments.  These options shall 
    include investments in a fund created by the System and 
    managed in accordance with legal and fiduciary standards, 
    as well as investment options otherwise available.
        (7)   The defined contribution plan shall provide a 
    variety of options for payouts to retirees and their 
    survivors.
        (8)  To the extent authorized under federal law and as 
    authorized by the System, the plan shall allow former 
    participants in the plan to transfer or roll over employee 
    and vested State contributions, and the earnings thereon, 
    into other qualified retirement plans.
        (9)  The System shall reduce the employee contributions 
    credited to the member's defined contribution plan account  
    by an amount determined by the System to cover the cost of 
    offering these benefits and any applicable administrative 
    fees. 
    (b)  Only persons who are active Tier 1 members of the 
System on the effective date of this Section are eligible to 
participate in the defined contribution plan. Participation in 
the defined contribution plan shall be limited to the first 5% 
of eligible persons  who elect to participate. The election to 
participate in the defined contribution plan is voluntary and 
irrevocable.
    (c) An eligible Tier 1 employee may irrevocably elect to 
participate in the defined contribution plan by filing with the 
System a written application to participate that is received by 
the System prior to its determination that 5% of eligible 
persons have elected to participate in the defined contribution 
plan.
    When the System first determines that 5% of eligible 
persons have elected to participate in the defined contribution 
plan, the System shall provide notice to previously eligible 
employees that the plan is no longer available and shall  cease 
accepting applications to participate. 
    (d) The System shall make a good faith effort to contact 
each active Tier 1 member who is eligible to participate in the 
defined contribution plan.  The System shall mail information 
describing the option to join the defined contribution plan to 
each of these employees to his or her last known address on 
file with the System.  If the employee is not responsive to 
other means of contact, it is sufficient for the System to 
publish the details of the option on its website.
    Upon request for further information describing the 
option, the System shall provide employees with information 
from the System before exercising the option to join the plan, 
including information on the impact to their vested benefits or 
non-vested service. The individual consultation shall include 
projections of the member's defined benefits at retirement or 
earlier termination of service and the value of the member's 
account at retirement or earlier termination of service.  The 
System shall not provide advice or counseling with respect to 
whether the employee should exercise the option.  The System 
shall inform Tier 1 employees who are eligible to participate 
in the defined contribution plan that they may also wish to 
obtain information and counsel relating to their option from 
any other available source, including but not limited to labor 
organizations, private counsel, and financial advisors. 
    (e) In no event shall the System, its staff, its authorized 
representatives, or the Board be liable for any information 
given to an employee under this Section.  The System may 
coordinate with the Illinois Department of Central Management 
Services and other retirement systems administering a defined 
contribution plan in accordance with this amendatory Act of the 
98th General Assembly to provide information concerning the 
impact of the option set forth in this Section. 
    (f) Notwithstanding any other provision of this Section, no 
person shall begin participating in the defined contribution 
plan until it has attained qualified plan status and received 
all necessary approvals from the U.S. Internal Revenue Service. 
    (g) The System shall report on its progress under this 
Section, including the available details of the defined 
contribution plan and the System's plans for informing eligible 
Tier 1 members about the plan, to the Governor and the General 
Assembly on or before January 15, 2015. 
    (h) The intent of this amendatory Act of the 98th General 
Assembly is to ensure that the State's normal cost  of 
participation in the defined contribution plan is similar, and 
if possible equal, to the State's normal cost  of participation 
in the defined benefit plan, unless a lower State's normal cost 
is necessary to ensure cost neutrality. 
 
    (40 ILCS 5/16-206 new)
    Sec. 16-206. Defined contribution plan; termination. If 
the defined contribution plan is terminated or becomes 
inoperative pursuant to law, then each participant in the plan 
shall automatically be deemed to have been a contributing Tier 
1 member in the System's defined benefit plan during the time 
in which he or she participated in the defined contribution 
plan, and for that purpose  the System shall be entitled to 
recover the amounts in the participant's defined contribution 
accounts.
 



    (40 ILCS 5/17-116)  (from Ch. 108 1/2, par. 17-116)



    Sec. 17-116. Service retirement pension. 

    (a) Each teacher having 20 years of service upon attainment 
of age 55,
or who thereafter attains age 55 shall be entitled 
to a service retirement
pension upon or after attainment of age 
55; and each teacher in service on or
after July 1, 1971, with 
5 or more but less than 20 years of service shall be
entitled 
to receive a service retirement pension upon or after 
attainment of
age 62. 

    (b) The service retirement pension
for a teacher who 
retires on or after June 25, 1971, at age
60 or over, shall be 
calculated as follows:


        (1) For creditable service earned before July 1, 1998 
    that has not been
augmented under Section 17-119.1: 1.67% 
    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 of service in excess of 30, based upon average 
    salary as
herein defined.


        (2) For creditable service earned on or after July 1, 
    1998 by a member
who has at least 30 years of creditable 
    service on July 1, 1998 and who does
not elect to augment 
    service under Section 17-119.1:  2.3% of average salary
for 
    each year of creditable service earned on or after July 1, 
    1998.


        (3) For all other creditable service:  2.2% of average 
    salary
for each year of creditable service.

    (c) When computing such service retirement pensions, the

following conditions shall apply:


        1. Average salary shall consist of the average annual 
    rate of salary
for the 4 consecutive years of validated 
    service within the last 10 years
of service when such 
    average annual rate was highest.  In the determination
of 
    average salary for retirement allowance purposes, for 
    members who
commenced employment after August 31, 1979, 
    that part of the salary for any
year shall be excluded 
    which exceeds the annual full-time salary rate for
the 
    preceding year by more than 20%.  In the case of a member 
    who commenced
employment before August 31, 1979 and who 
    receives salary during any year
after September 1, 1983 
    which exceeds the annual full time salary rate for
the 
    preceding year by more than 20%,
an Employer and other 
    employers of
eligible contributors as defined in Section 
    17-106
shall pay to the Fund an amount equal to the present 
    value of the
additional service retirement pension 
    resulting from such excess salary.
The present value of the 
    additional service retirement pension shall be
computed by 
    the Board on the basis of actuarial tables adopted by the

    Board.  If a member elects to receive a pension from this 
    Fund
provided by
Section 20-121, his salary under the State 
    Universities Retirement System
and the Teachers' 
    Retirement System of the State of Illinois shall be

    considered in determining such average salary.  Amounts 
    paid after the
effective date of this amendatory Act of 
    1991 for unused vacation time
earned after that effective 
    date shall not under any circumstances be
included in the 
    calculation of average salary or the annual rate of salary

    for the purposes of this Article.


        2. Proportionate credit shall be given for validated 
    service of less
than one year.


        3. For retirement at age 60 or over the pension shall 
    be payable at
the full rate.


        4. For separation from service below age 60 to a 
    minimum age of 55,
the pension shall be discounted at the 
    rate of 1/2 of one per cent for
each month that the age of 
    the contributor is less than 60, but a
teacher may elect to 
    defer the effective date of pension in order to
eliminate 
    or reduce this discount.  This discount shall not be 
    applicable
to any participant who has at least 34 years of 
    service or a
retirement pension of at least 74.6% of 
    average salary on the date the
retirement annuity begins.


        5. No additional pension shall be granted for service 
    exceeding 45
years.  Beginning June 26, 1971 no pension 
    shall exceed the greater of
$1,500 per month or 75% of 
    average salary as herein defined.


        6. Service retirement pensions shall begin on the 
    effective date of
resignation, retirement, the day 
    following the close of the payroll
period for which service 
    credit was validated, or the time the person
resigning or 
    retiring attains age 55, or on a date elected by the

    teacher, whichever shall be latest.


        7. A member who is eligible to receive a retirement 
    pension of at least
74.6% of average salary and will attain 
    age 55 on or before December 31
during the year which 
    commences on July 1 shall be deemed to attain age 55 on
the 
    preceding June 1.


        8. A member retiring after the effective date of this 
    amendatory Act
of 1998 shall receive a pension equal to 75% 
    of average salary if the
member is qualified to receive a 
    retirement pension equal to at least 74.6%
of average 
    salary under this Article or as proportional annuities 
    under
Article 20 of this Code.

        9. In the case of a person who first becomes a 
    participant on or after the effective date of this 
    amendatory Act of the 98th General Assembly, payments for 
    unused sick or vacation time shall not be used in the 
    calculation of average salary. 
(Source: P.A. 90-566, eff. 1-2-98; 90-582, eff. 5-27-98.)

 



    (40 ILCS 5/17-134)  (from Ch. 108 1/2, par. 17-134)



    Sec. 17-134. Contributions for leaves of absence; military 
service;
computing service.   In computing service for pension 
purposes the following
periods of service shall stand in lieu 
of a like number of years of teaching
service upon payment 
therefor in the manner hereinafter provided: (a) time
spent on 
a leave of absence granted by the
employer;
(b) service with 
teacher or labor organizations based upon special
leaves of 
absence therefor granted by an Employer; (c) a maximum of 5 
years
spent in the military service of the United States, of 
which up to 2 years
may have been served outside the pension 
period; (d) unused sick days at
termination of service to a 
maximum of 244 days; (e) time lost due
to layoff and 
curtailment of the school term from June 6 through June 21, 
1976;
and (f) time spent after June 30, 1982 as a member of the 
Board of Education,
if required to resign from an 
administrative or teaching  position in order to
qualify as a 
member of the Board of Education.


        (1) For time spent on or after September 6, 1948 on 
    sabbatical
leaves of absence or sick leaves, for which 
    salaries are paid, an Employer
shall make payroll 
    deductions at the applicable rates in effect
during such 
    periods.


        (2) For time spent on a leave of absence granted by the 
    employer for which no salaries are paid,
teachers desiring 
    credit therefor shall pay the required contributions at the

    rates in effect during such periods as though they were in 
    teaching service.
If an Employer pays salary for vacations 
    which occur during a teacher's sick
leave or maternity or 
    paternity leave without salary, vacation pay for which
the 
    teacher would have qualified while in active service shall 
    be considered
part of the teacher's total salary for 
    pension purposes.  No more than 36 months of leave credit 
    may be
allowed any person during the entire term of 
    service.  Sabbatical leave credit
shall be limited to the 
    time the person on leave without salary under an
Employer's 
    rules is allowed to engage in an activity for which he 
    receives
salary or compensation.


        (3) For time spent prior to September 6, 1948, on 
    sabbatical
leaves of absence or sick leaves for which 
    salaries were paid, teachers
desiring service credit 
    therefor shall pay the required contributions at the

    maximum applicable rates in effect during such periods.


        (4) For service with teacher or labor organizations 
    authorized by special
leaves of absence, for which no 
    payroll deductions are made by an Employer,
teachers 
    desiring service credit therefor shall contribute to the 
    Fund upon
the basis of the actual salary received from such 
    organizations at the
percentage rates in effect during such 
    periods for certified positions with
such Employer.  To the 
    extent the actual salary exceeds the regular salary,
which 
    shall be defined as the salary rate, as calculated by the 
    Board, in
effect for the teacher's regular position in 
    teaching service on September 1,
1983 or on the effective 
    date of the leave with the organization, whichever is

    later, the organization shall pay to the Fund the 
    employer's normal cost as set
by the Board on the 
    increment. Notwithstanding any other provision of this 
    subdivision (4), teachers are only eligible for credit for 
    service under this subdivision (4) if the special leave of 
    absence begins  before January 5, 2012 (the effective date 
    of Public Act 97-651) this amendatory Act of the 97th 
    General Assembly. 


        (5) For time spent in the military service, teachers 
    entitled to and
desiring credit therefor shall contribute 
    the amount required for each year
of service or fraction 
    thereof at the rates in force (a) at the date of

    appointment, or (b) on return to teaching service as a 
    regularly certified
teacher, as the case may be; provided 
    such rates shall not be less than $450
per year of service.  
    These conditions shall apply unless an Employer elects
to 
    and does pay into the Fund the amount which would have been 
    due from such
person had he been employed as a teacher 
    during such time.  In the case of
credit for military 
    service not during the pension period, the teacher must

    also pay to the Fund an amount determined by the Board to 
    be equal to the
employer's normal cost of the benefits 
    accrued from such service, plus interest
thereon at 5% per 
    year, compounded annually, from the date of appointment to

    the date of payment.


        The changes to this Section made by Public Act 87-795 
    shall apply
not only to persons who on or after its 
    effective
date are in service under the Fund, but also to 
    persons whose status as a
teacher terminated prior to that 
    date, whether or not the person is an
annuitant on that 
    date.  In the case of an annuitant who applies for credit

    allowable under this Section for a period of military 
    service that did not
immediately follow employment, and who 
    has made the required contributions for
such credit, the 
    annuity shall be recalculated to include the additional

    service credit, with the increase taking effect on the date 
    the Fund received
written notification of the annuitant's 
    intent to purchase the credit, if
payment of all the 
    required contributions is made within 60 days of such

    notice, or else on the first annuity payment date following 
    the date of
payment of the required contributions.  In 
    calculating the automatic annual
increase for an annuity 
    that has been recalculated under this Section, the
increase 
    attributable to the additional service allowable under 
    this
amendatory Act of 1991 shall be included in the 
    calculation of automatic
annual increases accruing after 
    the effective date of the recalculation.


        The total credit for military service shall not exceed 
    5 years, except
that any teacher who on July 1, 1963, had 
    validated credit for more than 5
years of military service 
    shall be entitled to the total amount of such credit.


        (6) For persons who first become teachers before the

    effective date of this amendatory Act of the 98th General

    Assembly, a A maximum of 244 unused sick days credited to 
    his account
by an Employer on the date of termination of 
    employment.  Members, upon
verification of unused sick 
    days, may add this service time to total creditable

    service.


        (7) In all cases where time spent on leave is 
    creditable and
no payroll deductions therefor are made by 
    an Employer, persons
desiring service credit shall make the 
    required contributions directly to
the Fund.


        (8) For time lost without pay due to layoff and 
    curtailment of
the school term from June 6 through June 21, 
    1976, as provided in item (e) of
the first paragraph of 
    this Section, persons who were contributors on
the days 
    immediately preceding such layoff shall receive credit 
    upon
paying to the Fund a contribution based on the rates 
    of compensation and
employee contributions in effect at the 
    time of such layoff, together
with an additional amount 
    equal to 12.2% of the compensation computed
for such period 
    of layoff, plus interest on the entire amount at 5% per

    annum from January 1, 1978 to the date of payment.  If such 
    contribution
is paid, salary for pension purposes for any 
    year in which such a layoff
occurred shall include the 
    compensation recognized for purposes of
computing that 
    contribution.


        (9) For time spent after June 30, 1982, as a 
    nonsalaried member
of the Board of Education, if required 
    to resign from an administrative or
teaching position in 
    order to qualify as a member of the Board of
Education, an 
    administrator or teacher desiring credit therefor shall 
    pay
the required contributions at the rates and salaries in 
    effect during such
periods as though the member were in 
    service.

    Effective September 1, 1974, the interest charged for 
validation of
service described in paragraphs (2) through (5) 
of this Section shall be
compounded annually at a rate of 5% 
commencing one
year after the termination of the leave or 
return to service.

(Source: P.A. 97-651, eff. 1-5-12.)

 



    (40 ILCS 5/20-106)  (from Ch. 108 1/2, par. 20-106)



    Sec. 20-106. Final average salary. 

    (a) "Final average salary":  The average (or other) salary 
which is
considered by a participating system in determining 
the amount of the
retirement annuity or survivor's annuity.

    (b) Earnings credits under all participating systems shall 
be
considered by each system in determining final average 
salary, but subject to the limitations imposed  by this 
amendatory Act of the 98th General Assembly for a participant 
in a defined contribution plan established under Article 2, 14, 
15, or 16 of this Code.  In
calculating a proportional 
retirement or survivor's annuity based on these
earnings 
credits, the participating system shall apply any limitations 
on
earnings for annuity purposes that are imposed by the 
Article governing the
system.

(Source: P.A. 88-593, eff. 8-22-94.)

 



    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)



    Sec. 20-121. Calculation of proportional retirement 
annuities. 
    (a) Upon
retirement of the employee, a proportional 
retirement annuity shall be computed
by each participating 
system in which pension credit has been established on
the 
basis of pension credits under each system.  The computation 
shall be in
accordance with the formula or method prescribed by 
each participating system
which is in effect at the date of the 
employee's latest withdrawal from service
covered by any of the 
systems in which he has pension credits which he elects
to have 
considered under this Article.  However, the amount of any 
retirement
annuity payable under the self-managed plan 
established under Section 15-158.2
of this Code or under the 
defined contribution plan established under Article 2, 14, 15, 
or 16 of this Code depends solely on the value of the 
participant's vested account
balances and is not subject to any 
proportional adjustment under this
Section.

    (a-5) For persons who participate in  a defined contribution 
plan established under Article 2, 14, 15, or 16 of this Code to 
whom the provisions of this Article apply, the pension credits 
established under the defined contribution plan may be 
considered in
determining eligibility for or the amount of the 
defined benefit retirement annuity that is
payable by any other 
participating system.
    (b) Combined pension credit under all retirement systems 
subject to this
Article shall be considered in determining 
whether the minimum qualification
has been met and the formula 
or method of computation which shall be applied, except as may 
be otherwise provided with respect to vesting in State or 
employer contributions in a defined contribution plan.
If a 
system has a step-rate formula for calculation of the 
retirement annuity,
pension credits covering previous service 
which have been established under
another system shall be 
considered in determining which range or ranges of
the 
step-rate formula are to be applicable to the employee.

    (c) Interest on pension credit shall continue to accumulate 
in accordance with
the provisions of the law governing the 
retirement system in which the same
has been established during 
the time an employee is in the service of another
employer, on 
the assumption such employee, for interest purposes for pension

credit, is continuing in the service covered by such retirement 
system.

(Source: P.A. 91-887, eff. 7-6-00.)

 



    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)



    Sec. 20-123. Survivor's annuity. The provisions governing 
a retirement
annuity shall be applicable to a survivor's 
annuity.  Appropriate credits shall
be established for 
survivor's annuity purposes in those participating systems

which provide survivor's annuities, according to the same 
conditions and
subject to the same limitations and restrictions 
herein prescribed for a
retirement annuity.  If a participating 
system has no survivor's annuity
benefit, or if the survivor's 
annuity benefit under that system is waived,
pension credit 
established in that system shall not be considered
in 
determining eligibility for or the amount of the survivor's 
annuity which
may be payable by any other participating system.

    For persons who participate in  the self-managed plan 
established under
Section 15-158.2 or the portable benefit 
package established under Section
15-136.4,  pension credit 
established under Article 15 may be considered in
determining 
eligibility for or the amount of the survivor's annuity that is

payable by any other participating system, but pension credit 
established in
any other system shall not result in any right 
to a survivor's annuity under
the Article 15 system.

    For persons who participate in  a defined contribution plan 
established under Article 2, 14, 15, or 16 of this Code to whom 
the provisions of this Article apply, the pension credits 
established under the defined contribution plan may be 
considered in
determining eligibility for or the amount of the 
defined benefit survivor's annuity that is
payable by any other 
participating system, but pension credits established in
any 
other system shall not result in any right to or increase in 
the value of a survivor's annuity under
the defined 
contribution plan, which depends solely on the options chosen 
and the value of the participant's vested account
balances and 
is not subject to any proportional adjustment under this

Section. 
(Source: P.A. 91-887, eff. 7-6-00.)

 



    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)



    Sec. 20-124. Maximum benefits. 
    (a) In no event shall the combined retirement
or survivors 
annuities exceed the highest annuity which would have been 
payable
by any participating system in which the employee has 
pension credits, if all
of his pension credits had been 
validated in that system.

    If the combined annuities should exceed the highest maximum 
as determined
in accordance with this Section, the respective 
annuities shall be reduced
proportionately according to the 
ratio which the amount of each proportional
annuity bears to 
the aggregate of all such annuities.

    (b) In the case of a participant in the self-managed plan 
established under
Section 15-158.2 of this Code to whom the 
provisions of this Article apply:


        (i) For purposes of calculating the combined 
    retirement annuity and
the proportionate reduction, if 
    any, in a retirement annuity other than one
payable under 
    the self-managed plan, the amount of the Article 15 
    retirement
annuity shall be deemed to be the highest 
    annuity to which the annuitant would
have been entitled if 
    he or she had participated in the traditional benefit

    package as defined in Section 15-103.1 rather than the 
    self-managed plan.


        (ii) For purposes of calculating the combined 
    survivor's annuity and
the proportionate reduction, if 
    any, in a survivor's annuity other than one
payable under 
    the self-managed plan, the amount of the Article 15 
    survivor's
annuity shall be deemed to be the highest 
    survivor's annuity to which the
survivor would have been 
    entitled if the deceased employee had participated in
the 
    traditional benefit package as defined in Section 15-103.1 
    rather than the
self-managed plan.


        (iii) Benefits payable under the self-managed plan are 
    not subject to
proportionate reduction under this Section.

    (c) In the case of a participant in a defined contribution 
plan established under
Article 2, 14, 15, or 16 of this Code to 
whom the provisions of this Article apply: 
        (i) For purposes of calculating the combined 
    retirement annuity and
the proportionate reduction, if 
    any, in a defined benefit retirement annuity, any benefit 
    payable under the defined contribution plan shall not be 
    considered. 
        (ii) For purposes of calculating the combined 
    survivor's annuity and
the proportionate reduction, if 
    any, in a defined benefit survivor's annuity, any benefit 
    payable under the defined contribution plan shall not be 
    considered. 
        (iii) Benefits payable under a defined contribution 
    plan established under Article 2, 14, 15, or 16 of this 
    Code are not subject to
proportionate reduction under this 
    Section. 
(Source: P.A. 91-887, eff. 7-6-00.)

 



    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)



    Sec. 20-125.  Return to employment - suspension of 
benefits. If a retired
employee returns to employment which is 
covered by a system from which he is
receiving a proportional 
annuity under this Article, his proportional annuity
from all 
participating systems shall be suspended during the period of

re-employment, except that this suspension does not apply to 
any
distributions payable under the self-managed plan 
established under Section
15-158.2 or under a defined 
contribution plan established under Article 2, 14, 15, or 16 of 
this Code.

    The provisions of the Article under which such employment 
would be
covered shall govern the determination of whether the 
employee has returned
to employment, and if applicable the 
exemption of temporary employment or
employment not exceeding a 
specified duration or frequency, for all
participating systems 
from which the retired employee is receiving a
proportional 
annuity under this Article, notwithstanding any contrary

provisions in the other Articles governing such systems.

(Source: P.A. 91-887, eff. 7-6-00.)

  
 
    Section 20.  The Illinois Educational Labor Relations Act 
is amended by changing Sections 4 and 17 and by adding Section 
10.5 as follows:
 



    (115 ILCS 5/4)  (from Ch. 48, par. 1704)



    Sec. 4.  Employer rights. Employers shall not be required 
to bargain over matters of inherent
managerial policy, which 
shall include such areas of discretion or policy
as the 
functions of the employer, standards of services, its overall

budget, the organizational structure and selection of new 
employees and
direction of employees.  Employers, however, 
shall be required to bargain
collectively with regard to policy 
matters directly affecting wages, hours
and terms and 
conditions of employment as well as the impact thereon upon

request by employee representatives, except as provided in 
Section 10.5. To preserve the rights of employers
and exclusive 
representatives which have established collective bargaining

relationships or negotiated collective bargaining agreements 
prior to the
effective date of this Act, employers shall be 
required to bargain
collectively with regard to any matter 
concerning wages, hours or
conditions of employment about which 
they have bargained for and agreed to
in a collective 
bargaining agreement prior to the effective date of this Act, 
except as provided in Section 10.5.

(Source: P.A. 83-1014.)

 
    (115 ILCS 5/10.5 new)
    Sec. 10.5. Duty to bargain regarding pension amendments.
    (a) Notwithstanding any provision of this Act, employers 
shall not be required to bargain over matters affected by the 
changes, the impact of changes, and the implementation of 
changes made to Article 14, 15, or 16 of the Illinois Pension 
Code, or Article 1 of that Code as it applies to those 
Articles, made by this amendatory Act of the 98th General 
Assembly, or over any other provision of Article 14, 15, or 16 
of the Illinois Pension Code, or of Article 1 of that Code as 
it applies to those Articles, which are prohibited subjects of 
bargaining; nor shall the changes, the impact of changes, or 
the implementation of changes made to Article 14, 15, or 16 of 
the Illinois Pension Code, or to Article 1 of that Code as it 
applies to those Articles, by this amendatory Act of the 98th 
General Assembly or any other provision of Article 14, 15, or 
16 of the Illinois Pension Code, or of Article 1 of that Code 
as it applies to those Articles, be subject to interest 
arbitration or any award issued pursuant to interest 
arbitration.  The provisions of this Section shall not apply to 
an employment contract or collective bargaining agreement that 
is in effect on the effective date of this amendatory Act of 
the 98th General Assembly.  However, any such contract or 
agreement that is subsequently modified, amended, or renewed 
shall be subject to the provisions of this Section.  The 
provisions of this Section shall also not apply to the ability 
of an employer and employee representative to bargain 
collectively with regard to the pick up of employee 
contributions pursuant to Section 14-133.1, 15-157.1, or 
16-152.1 of the Illinois Pension Code.
    (b) Nothing in this Section, however, shall be construed as 
otherwise limiting any of the obligations and requirements 
applicable to each employer under any of the provisions of this 
Act, including, but not limited to, the requirement to bargain 
collectively with regard to policy matters directly affecting 
wages, hours and terms and conditions of employment as well as 
the impact thereon upon request by employee representatives, 
except for the matters deemed prohibited subjects of bargaining 
under subsection (a) of this Section.  Nothing in this Section 
shall further be construed as otherwise limiting any of the 
rights of employees or employee representatives under the 
provisions of this Act, except for matters deemed prohibited 
subjects of bargaining under subsection (a) of this Section. 
    (c) In case of any conflict between this Section and any 
other provisions of this Act or any other law, the provisions 
of this Section shall control. 
 



    (115 ILCS 5/17)  (from Ch. 48, par. 1717)



    Sec. 17. Effect on other laws.  Except as provided in 
Section 10.5, in In case of any conflict between the
provisions 
of this Act and any other law, executive order or 
administrative
regulation, the provisions of this Act shall 
prevail and control.
 Except as provided in Section 10.5, 
nothing Nothing in this Act shall be construed to replace or 
diminish the rights
of employees established by Section 36d of 
"An Act to create the State Universities
Civil Service System", 
approved May 11, 1905, as amended or modified.

(Source: P.A. 83-1014.)

 
    Section 95. The State Mandates Act is amended by adding 
Section 8.37 as follows:
 
    (30 ILCS 805/8.37 new)
    Sec. 8.37.  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 98th General Assembly.
 
    Section 97. Severability and inseverability.  The 
provisions of this Act are severable under Section 1.31 of the 
Statute on Statutes, except that the changes made to Sections 
20 and 25 of the Budget Stabilization Act and to   subsections 
(a), (a-1), (a-2), (b), and (d) of Section 2-119.1,  subsections 
(d), (d-1), and (d-2) of Section 15-136, subsection (a-10) of 
Section 16-158, and Sections 2-124, 2-125, 2-126,  2-134,
2-165, 
14-114, 14-115,  14-131, 14-132, 14-133, 14-135.08, 14-155, 
15-155, 15-156, 15-157, 15-165, 15-200, 16-133.1, 16-136.1, 
16-152, 16-158, 16-158.2, 16-205, 20-106, 20-121, 20-123, 
20-124, and 20-125 of the Illinois Pension Code are mutually 
dependent and inseverable from one another but are severable 
from any other provision of this Act.