Illinois General Assembly - Full Text of Public Act 093-0347
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Public Act 093-0347


 

Public Act 93-0347 of the 93rd General Assembly


Public Act 93-0347

HB3183 Enrolled                      LRB093 07931 EFG 08122 b

    AN ACT in relation to public employee benefits.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.   The  Illinois  Pension  Code  is amended by
changing Sections 1-119, 15-107,  15-112,  15-113.3,  15-134,
15-136,  15-153,  15-154,  15-158.2,  15-186.1,  15-187,  and
15-190 as follows:

    (40 ILCS 5/1-119)
    Sec.   1-119.    Qualified  Illinois  Domestic  Relations
Orders.
    (a)  For the purposes of this Section:
         (1)  "Alternate  payee"  means  the  spouse,  former
    spouse,  child,  or  other  dependent  of  a  member,  as
    designated in a QILDRO.
         (2)  "Death benefit" means any  nonperiodic  benefit
    payable  upon  the death of a member to a survivor of the
    member  or  to  the   member's   estate   or   designated
    beneficiary,   including   any  refund  of  contributions
    following the member's death, whether or not the  benefit
    is so called under the applicable Article of this Code.
         (3)  "Disability  benefit"  means  any  periodic  or
    nonperiodic benefit payable to a disabled member based on
    occupational  or  nonoccupational  disability or disease,
    including any periodic or nonperiodic  increases  in  the
    benefit,  whether  or  not the benefit is so called under
    the applicable Article of this Code.
         (4)  "Member" means any person who  participates  in
    or  has service credits in a retirement system, including
    a person who is receiving or is  eligible  to  receive  a
    retirement  or  disability  benefit,  without  regard  to
    whether the person has withdrawn from service.
         (5)  "Member's  refund"  means  a return of all or a
    portion of a member's contributions that  is  elected  by
    the  member  (or  provided  by  operation  of law) and is
    payable before the member's death.
         (6)  "Qualified Illinois Domestic  Relations  Order"
    or "QILDRO" means an Illinois court order that creates or
    recognizes the existence of an alternate payee's right to
    receive  all  or a portion of a member's accrued benefits
    in a  retirement  system,  is  issued  pursuant  to  this
    Section  and  Section  503(b)(2) of the Illinois Marriage
    and  Dissolution  of  Marriage   Act,   and   meets   the
    requirements  of  this Section.  A QILDRO is not the same
    as a qualified domestic relations order  or  QDRO  issued
    pursuant  to  Section 414(p) of the Internal Revenue Code
    of 1986.  The requirements of paragraphs (2) and  (3)  of
    that  Section  do  not  apply to orders issued under this
    Section  and  shall  not  be  deemed  a  guide   to   the
    interpretation  of  this Section; a QILDRO is intended to
    be a domestic  relations  order  within  the  meaning  of
    paragraph (11) of that Section.
         (7)  "Regular  payee"  means  the  person  to whom a
    benefit would be payable in the absence of  an  effective
    QILDRO.
         (8)  "Retirement  benefit"  means  any  periodic  or
    nonperiodic  benefit payable to a retired member based on
    age or service, or on  the  amounts  accumulated  to  the
    credit  of  the member for retirement purposes, including
    any periodic or nonperiodic  increases  in  the  benefit,
    whether  or  not  the  benefit  is  so  called  under the
    applicable Article of this Code.
         (9)  "Retirement  system"  or  "system"  means   any
    retirement system, pension fund, or other public employee
    retirement benefit plan that is maintained or established
    under any of Articles 2 through 18 of this Code.
         (10)  "Surviving  spouse"  means  the  spouse  of  a
    member at the time of the member's death.
         (11)  "Survivor's   benefit"   means   any  periodic
    benefit payable to a surviving spouse, child, parent,  or
    other  survivor  of  a  deceased  member,  including  any
    periodic or nonperiodic increases in the benefit, whether
    or  not  the  benefit  is  so called under the applicable
    Article of this Code.
    (b) (1)  An Illinois court of competent jurisdiction in a
proceeding for declaration of invalidity of  marriage,  legal
separation,  or dissolution of marriage that provides for the
distribution of property,  or  any  proceeding  to  amend  or
enforce  such  a property distribution, may order that all or
any part of any  (i)  retirement  benefit  or  (ii)  member's
refund  payable to or on behalf of the member be instead paid
by the retirement system to a designated alternate payee.
    (2)  An order issued under this Section provides only for
the diversion to  an  alternate  payee  of  certain  benefits
otherwise   payable   by  the  retirement  system  under  the
provisions of this Code.  The existence of a QILDRO shall not
cause the retirement system to pay any benefit, or any amount
of benefit, to an alternate payee that would  not  have  been
payable  by  the  system to a regular payee in the absence of
the QILDRO.
    (3)  A QILDRO shall not affect the vesting,  accrual,  or
amount  of any benefit, nor the date or conditions upon which
any benefit becomes payable, nor the right of the  member  or
the   member's  survivors  to  make  any  election  otherwise
authorized under this Code, except as provided in subsections
(i) and (j).
    (4)  A QILDRO shall not apply to or affect the payment of
any survivor's benefit, death  benefit,  disability  benefit,
life insurance benefit, or health insurance benefit.
    (c) (1)  A   QILDRO  must  contain  the  name,  residence
address, and social security number of the member and of  the
alternate  payee  and  must identify the retirement system to
which it is directed and the court issuing the order.
    (2)  A QILDRO must  specify  each  benefit  to  which  it
applies,  and it must specify the amount of the benefit to be
paid  to  the  alternate  payee,  which  in  the  case  of  a
nonperiodic benefit shall be expressed  as  a  dollar  amount
(except  that  a  nonperiodic benefit payable to an alternate
payee of a participant in the  self-managed  plan  authorized
under  Article  15  of this Code may be expressed as a dollar
amount or as a percentage of the participant's account),  and
in  the  case  of  a periodic benefit shall be expressed as a
dollar amount per month.
    (3)  With respect to each benefit to which it applies,  a
QILDRO  must specify when the order will take effect.  In the
case of a periodic benefit that is being paid at the time the
order is received, a QILDRO shall take effect immediately  or
on a specified later date; if it takes effect immediately, it
shall  become  effective  on  the  first benefit payment date
occurring at least 30 days after the order is received by the
retirement system.  In the  case  of  any  other  benefit,  a
QILDRO  shall  take  effect when the benefit becomes payable,
except that a lump-sum benefit payable to an alternate  payee
of  a  participant  in the self-managed plan authorized under
Article 15 of this Code may be paid upon the request  of  the
alternate  payee.   However, in no event shall a QILDRO apply
to any benefit paid by the retirement system before or within
30 days after the order is received.  A retirement system may
adopt rules to prorate the amount  of  the  first  and  final
periodic payments to an alternate payee.
    (4)  A  QILDRO  must also contain any provisions required
under subsection (n) or (p).
    (d) (1)  An order issued under this Section shall not  be
implemented  unless  a  certified  copy of the order has been
filed with the retirement system.  The system shall  promptly
notify the member and the alternate payee by first class mail
of its receipt of the order.
    (2)  Neither  the  retirement  system, nor its board, nor
any of its employees shall  be  liable  to  the  member,  the
regular  payee,  or  any  other  person  for  any amount of a
benefit that is paid in good faith to an alternate  payee  in
accordance with a QILDRO.
    (3)  At the time the order is submitted to the retirement
system,  it  shall  be  accompanied  by  a  nonrefundable $50
processing fee payable to the retirement system, to  be  used
by  the  system to defer any administrative costs arising out
of the implementation of the QILDRO.
    (e) (1)  Each  alternate   payee   is   responsible   for
maintaining  a  current  residence  address  on file with the
retirement system.  The retirement system shall have no  duty
to  attempt  to locate any alternate payee by any means other
than sending written notice to the last known address of  the
alternate payee on file with the system.
    (2)  In  the  event  that  the  system  cannot  locate an
alternate payee when a benefit becomes  payable,  the  system
shall hold the amount of the benefit payable to the alternate
payee and make payment to the alternate payee if he or she is
located  within  the  following  180  days.  If the alternate
payee has not been located within 180 days from the date  the
benefit becomes payable, the system shall pay the benefit and
the  amounts  held  to  the  regular payee.  If the alternate
payee is subsequently located,  the  system  shall  thereupon
implement the QILDRO, but the interest of the alternate payee
in  any  amounts  already  paid to the regular payee shall be
extinguished.  Amounts held under this subsection  shall  not
bear interest.
    (f) (1)  If  the amount of a benefit that is specified in
a QILDRO  for payment  to  an  alternate  payee  exceeds  the
actual  amount  of  that  benefit  payable  by the retirement
system, the excess  shall  be  disregarded.   The  retirement
system  shall have no liability to any alternate payee or any
other person for the disregarded amounts.
    (2)  In the event of multiple QILDROs against  a  member,
the  retirement  system shall honor all of the QILDROs to the
extent possible.  However, if the total amount of  a  benefit
to  be  paid  to alternate payees under all QILDROs in effect
against the member exceeds the actual amount of that  benefit
payable  by the system, the QILDROs shall be satisfied in the
order of their receipt by the system until the amount of  the
benefit  is  exhausted,  and  shall not be adjusted pro rata.
Any amounts that cannot be paid  due  to  exhaustion  of  the
benefit  shall remain unpaid, and the retirement system shall
have no liability to any alternate payee or any other  person
for such amounts.
    (3)  A  modification  of a QILDRO shall be filed with the
retirement system in the same manner  as  a  new  QILDRO.   A
modification that does not increase the amount of any benefit
payable  to  the  alternate  payee,  and  does not expand the
QILDRO to affect any benefit not affected by  the  unmodified
QILDRO,  does  not  affect  the  priority  of  payment  under
subdivision  (f)(2); the priority of payment of a QILDRO that
has been modified to  increase  the  amount  of  any  benefit
payable  to  the  alternate payee, or to expand the QILDRO to
affect a benefit not affected by the unmodified QILDRO, shall
be based on  the  date  on  which  the  system  receives  the
modification of the QILDRO.
    (g) (1)  Upon  the  death  of the alternate payee under a
QILDRO, the QILDRO shall expire and cease  to  be  effective,
and  in  the  absence of another QILDRO, the right to receive
any affected benefit shall revert to the regular payee.
    (2)  All QILDROs relating to a member's participation  in
a  particular  retirement system shall expire and cease to be
effective  upon  the  issuance  of  a  member's  refund  that
terminates the  member's  participation  in  that  retirement
system,  without regard to whether the refund was paid to the
member or to an alternate payee under a QILDRO.   An  expired
QILDRO  shall  not be automatically revived by any subsequent
return by the member to service under that retirement system.
    (h) (1)  Within 45 days after receiving a  subpoena  from
any  party  to  a proceeding for declaration of invalidity of
marriage, legal separation, or  dissolution  of  marriage  in
which  a  QILDRO  may be issued, or after receiving a request
from the member, a retirement system shall issue a  statement
of  a  member's  accumulated contributions, accrued benefits,
and  other  interests  in  the  plan  administered   by   the
retirement  system  based on the data on file with the system
on the date the subpoena is received,  and  of  any  relevant
procedures,  rules, or modifications to the model QILDRO form
that have been adopted by the retirement system.
    (2)  In no event shall the retirement system be  required
to  furnish  to  any  person  an  actuarial opinion as to the
present value of the member's benefits or other interests.
    (3)  The papers, entries, and records, or parts  thereof,
of  any  retirement  system  may be proved by a copy thereof,
certified under the signature of the secretary of the  system
or  other  duly appointed keeper of the records of the system
and the corporate seal, if any.
    (i)  In  a  retirement  system  in  which  a  member   or
beneficiary is required to apply to the system for payment of
a  benefit,  the  required  application  may  be  made  by an
alternate payee who is entitled to all of that benefit  under
a   QILDRO,   provided  that  all  other  qualifications  and
requirements have been met.  However, the alternate payee may
not make the required application for a member's refund or  a
retirement  benefit  if  the  member  is in active service or
below  the  minimum  age  for   receiving   an   undiscounted
retirement annuity in the retirement system that has received
the  QILDRO  or  in  any other retirement system in which the
member has creditable  service  and  in  which  the  member's
rights  under  the Retirement Systems Reciprocal Act would be
affected as a result of the alternate payee's application for
a member's refund or retirement benefit.
    (j) (1)  So long as there is in effect a QILDRO  relating
to a member's retirement benefit, the affected member may not
elect  a  form  of payment that has the effect of diminishing
the amount of the payment to which  any  alternate  payee  is
entitled,  unless  the  alternate  payee has consented to the
election in writing and this consent has been filed with  the
retirement system.
    (2)  If  a member attempts to make an election prohibited
under subdivision (j)(1), the retirement system shall  reject
the  election and advise the member of the need to obtain the
alternate payee's consent.
    (3)  If  a  retirement  system  discovers  that  it   has
mistakenly  allowed  an election prohibited under subdivision
(j)(1),  it  shall  thereupon  disallow  that  election   and
recalculate  any  benefits  affected  thereby.  If the system
determines that an amount paid to a regular payee should have
been paid  to  an  alternate  payee,  the  system  shall,  if
possible, recoup the amounts as provided in subsection (k) of
this Section.
    (k)  In  the  event  that a regular payee or an alternate
payee is overpaid, the retirement  system  shall  recoup  the
amounts by deducting the overpayment from future payments and
making  payment  to  the  other  payee.   The system may make
deductions for recoupment over a period of time in  the  same
manner  as  is  provided by law or rule for the recoupment of
other  amounts  incorrectly  disbursed  by  the   system   in
instances  not  involving  a  QILDRO.   The retirement system
shall incur no liability to either the alternate payee or the
regular payee as a result of any payment made in good  faith,
regardless  of  whether  the  system  is  able  to accomplish
recoupment.
    (l) (1)  A  retirement  system  that  has,   before   the
effective  date  of  this Section, received and implemented a
domestic relations order that directs payment of a benefit to
a person  other  than  the  regular  payee  may  continue  to
implement  that order, and shall not be liable to the regular
payee for any amounts paid in good faith to that other person
in accordance with the order.
    (2)  A domestic relations order directing  payment  of  a
benefit  to  a  person  other than the regular payee that was
issued by a court but not implemented by a retirement  system
prior  to  the  effective date of this Section shall be void.
However, a person who is the beneficiary or  alternate  payee
of  a  domestic  relations  order that is rendered void under
this subsection may petition the court that issued the  order
for an amended order that complies with this Section.
    (m) (1)  In  accordance  with  Article XIII, Section 5 of
the Illinois Constitution, which prohibits the impairment  or
diminishment  of  benefits  granted under this Code, a QILDRO
issued against a member of a  retirement  system  established
under  an  Article  of  this Code that exempts the payment of
benefits or refunds from attachment, garnishment, judgment or
other legal  process  shall  not  be  effective  without  the
written   consent   of   the   member  if  the  member  began
participating in the  retirement  system  on  or  before  the
effective  date  of  this Section.  That consent must specify
the retirement system, the court case number, and  the  names
and  social  security numbers of the member and the alternate
payee.  The consent must accompany  the  QILDRO  when  it  is
filed   with   the   retirement   system,   and  must  be  in
substantially the following form:

                CONSENT TO ISSUANCE OF QILDRO
Court Case Number: ....................
Member's Social Security Number: ........................
Alternate payee's Social Security Number: ...............
    I, (name), a member of the  (retirement  system),  hereby
consent  to  the  issuance  of  a Qualified Illinois Domestic
Relations Order.  I understand that under the Order,  certain
benefits  that  would  otherwise  be  payable to me, or to my
surviving spouse or estate, will instead be payable to  (name
of  alternate  payee).   I  also  understand that my right to
elect certain forms of payment of my  retirement  benefit  or
member's refund may be limited as a result of the Order.
    DATED:.......................
    SIGNED:......................

    (2)  A member's consent to the issuance of a QILDRO shall
be  irrevocable,  and shall apply to any QILDRO that pertains
to the alternate payee and retirement  system  named  in  the
consent.
    (n)  An  order  issued  under  this  Section  shall be in
substantially the following  form  (omitting  any  provisions
that are not applicable):

         QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER

    THIS CAUSE coming before the Court for the purpose of the
entry  of a Qualified Illinois Domestic Relations Order under
the provisions of Section 1-119 of the Illinois Pension Code,
the Court  having  jurisdiction  over  the  parties  and  the
subject  matter  hereof;   the  Court finding that one of the
parties to this proceeding is a member of a retirement system
subject to Section 1-119 of the Illinois Pension  Code,  this
Order  is  entered  to  implement  a division of that party's
interest in the retirement system; and the Court being  fully
advised;
    IT IS HEREBY ORDERED AS FOLLOWS:
    (1)  The  definitions  and  other  provisions  of Section
1-119 of the Illinois Pension Code are adopted  by  reference
and made a part of this Order.
    (2)  Identification of Retirement System and parties:
         Retirement System: (name and address)
         Member: (name, residence address and social security
    number)
         Alternate payee: (name, residence address and social
    security number)
    (3)  The   Retirement  System  shall  pay  the  indicated
amounts of the following specified benefits to the  alternate
payee under the following terms and conditions:
         (i)  Of   the   member's   retirement  benefit,  the
    Retirement  System  shall  pay  to  the  alternate  payee
    $...... per month, beginning (if the benefit  is  already
    being  paid,  either  immediately or on a specified later
    date; otherwise,  on  the  date  the  retirement  benefit
    commences),  and  ending  upon  the  termination  of  the
    retirement  benefit  or the death of the alternate payee,
    whichever occurs first.
         (ii)  Of any member's refund that  becomes  payable,
    the  Retirement  System  shall pay to the alternate payee
    $...... when the member's refund becomes payable.
    (4)  In accordance with subsection (j) of  Section  1-119
of  the  Illinois  Pension Code, so long as this QILDRO is in
effect, the member may not elect a form  of  payment  of  the
retirement  benefit  that  has  the effect of diminishing the
amount of  the  payment  to  which  the  alternate  payee  is
entitled,  unless  the  alternate  payee has consented to the
election in writing and this consent has been filed with  the
retirement system.
    (5)  If  the member began participating in the Retirement
System before the effective date of this Section, this  Order
shall  not  take  effect  unless  accompanied  by the written
consent of the member as required  under  subsection  (m)  of
Section 1-119 of the Illinois Pension Code.
    (6)  The Court retains jurisdiction to modify this Order.

    DATED:.......................

    SIGNED:......................

    (o) (1)  A  court  in  Illinois  that has issued a QILDRO
shall retain jurisdiction  of  all  issues  relating  to  the
modification  of  the  QILDRO.  The Administrative Review Law
and the rules adopted pursuant thereto shall govern and apply
to   all   proceedings   for   judicial   review   of   final
administrative decisions of the  board  of  trustees  of  the
retirement system arising under this Section.
    (2)  The  term "administrative decision" is defined as in
Section 3-101 of the Code of Civil Procedure.  The venue  for
review  under the Administrative Review Law shall be the same
as  is  provided  by  law  for  judicial  review   of   other
administrative decisions of the retirement system.
    (p) (1)  Each  retirement system may adopt any procedures
or  rules  that  it  deems  necessary  or  useful   for   the
implementation of this Section.
    (2)  Each  retirement system may by rule modify the model
QILDRO form  provided  in  subsection  (n)  or  require  that
additional  information  be  included in QILDROs presented to
the system, as may be necessary to  meet  the  needs  of  the
retirement system.
(Source: P.A. 90-731, eff. 7-1-99.)

    (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).; or
         (8)  participates  in  an   optional   program   for
    part-time workers under Section 15-158.1.
    (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,  and  (3) the individual does not receive credit
for that employment under any other Article of this Code.  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.
(Source: P.A. 90-448, eff.  8-16-97;  90-576,  eff.  3-31-98;
90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)

    (40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
    Sec.  15-112.   Final  rate  of earnings.  "Final rate of
earnings": 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.  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.   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.
    For  a  participant 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.
    If a participant 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.
    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.
    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.  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.
    Intermittent periods of service shall  be  considered  as
consecutive in determining final rate of earnings.
(Source: P.A. 91-887, eff. 7-6-00; 92-599, eff. 6-28-02.)

    (40 ILCS 5/15-113.3) (from Ch. 108 1/2, par. 15-113.3)
    Sec.  15-113.3.  Service for periods of military service.
"Service for periods of military  service":   Those  periods,
not  exceeding  5  years, during which a person served in the
armed forces of the United States, of which all but  2  years
must have immediately followed a period of employment with an
employer under this System or the State Employees' Retirement
System  of  Illinois;  provided  that  the  person received a
discharge  other  than  dishonorable  and  again  became   an
employee  under  this System within one year after discharge.
However, for the up  to  2  years  of  military  service  not
immediately  following  employment,  the  applicant must make
contributions to the System equal to (1) 8% of at  the  rates
provided  in  Section  15-157 based upon the employee's basic
compensation on the last date  as  a  participating  employee
prior  to  such  military  service, or on the first date as a
participating employee after such military service, whichever
is greater, plus (2) an amount determined by the board to  be
equal  to  the employer's normal cost of the benefits accrued
for such military service, plus (3) interest on items (1) and
(2) at the effective rate from the later of the date of first
membership in  the  System  or  the  date  of  conclusion  of
military  service  to the date of payment.  The change in the
required contribution for purchased military credit  made  by
this  amendatory Act of 1993 does not entitle any person to a
refund of contributions already paid.  The contributions paid
under this Section are not normal contributions as defined in
Section 15-114 or  additional  contributions  as  defined  in
Section 15-115.
    The  changes  to this Section made by this amendatory Act
of 1991 shall apply not only to persons who on or  after  its
effective  date  are in service under the System, but also to
persons whose  employment  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 this amendatory Act of 1991 shall be included
in the calculation of  automatic  annual  increases  accruing
after the effective date of the recalculation.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)

    (40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)
    Sec. 15-134.  Participant.
    (a)  Each  person  shall,  as  a condition of employment,
become a participant and be subject to this  Article  on  the
date that he or she becomes an employee, makes an election to
participate  in, or otherwise becomes a participant in one of
the retirement programs offered under this Article, whichever
date is later.
    An employee who becomes a participant shall  continue  to
be  a  participant until he or she becomes an annuitant, dies
or accepts a refund of contributions, except  that  a  person
shall  not  be deemed a participant while participating in an
optional program  for  part-time  workers  established  under
Section 15-158.1.
    (b)  A   person   employed  concurrently  by  2  or  more
employers  is  eligible  to  participate  in  the  system  on
compensation received from all employers.
(Source: P.A. 89-430,  eff.  12-15-95;  90-65,  eff.  7-7-97;
90-448, eff. 8-16-97; 90-655, eff. 7-30-98.)

    (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
    Sec.   15-136.  Retirement   annuities   -  Amount.   The
provisions  of  this  Section  15-136  apply  only  to  those
participants who are participating in the traditional benefit
package or the portable benefit package and do not  apply  to
participants who are participating in the self-managed plan.
    (a)  The  amount  of  a participant's retirement annuity,
expressed in the form of  a  single-life  annuity,  shall  be
determined  by whichever of the following rules is applicable
and provides the largest annuity:
    Rule 1:  The retirement annuity shall be 1.67%  of  final
rate  of  earnings for each of the first 10 years of service,
1.90% for each of the next 10 years  of  service,  2.10%  for
each  year  of  service in excess of 20 but not exceeding 30,
and 2.30% for each year in excess of 30; or for  persons  who
retire on or after January 1, 1998, 2.2% of the final rate of
earnings for each year of service.
    Rule  2:  The  retirement annuity shall be the sum of the
following,  determined   from   amounts   credited   to   the
participant  in  accordance with the actuarial tables and the
prescribed rate  of  interest  in  effect  at  the  time  the
retirement annuity begins:
         (i)  the  normal annuity which can be provided on an
    actuarially equivalent basis, by the  accumulated  normal
    contributions as of the date the annuity begins; and
         (ii)  an  annuity  from employer contributions of an
    amount  equal  to  that  which  can  be  provided  on  an
    actuarially equivalent basis from the accumulated  normal
    contributions  made  by  the  participant  under  Section
    15-113.6  and  Section  15-113.7 plus 1.4 times all other
    accumulated normal contributions made by the participant;
    and
         (iii)  the  annuity  that  can  be  provided  on  an
    actuarially equivalent basis from the entire contribution
    made by the participant under Section 15-113.3.
    With respect to  a  police  officer  or  firefighter  who
retires  on  or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i)  and  (ii)
of   this   Rule   2  shall  include  the  additional  normal
contributions made by the police officer or firefighter under
Section 15-157(a).
    The amount of a retirement annuity calculated under  this
Rule  2  shall  be  computed  solely  on  the  basis  of  the
participant's  accumulated normal contributions, as specified
in this Rule  and  defined  in  Section  15-116.  Neither  an
employee  or employer contribution for early retirement under
Section 15-136.2 nor any other employer contribution shall be
used in the calculation of the amount of a retirement annuity
under this Rule 2.
    This amendatory Act of the 91st  General  Assembly  is  a
clarification   of   existing   law   and  applies  to  every
participant and annuitant without regard to whether status as
an employee terminates before  the  effective  date  of  this
amendatory Act.
    Rule  3:  The  retirement annuity of a participant who is
employed at least one-half time during the  period  on  which
his or her final rate of earnings is based, shall be equal to
the   participant's  years  of  service  not  to  exceed  30,
multiplied by (1) $96 if  the  participant's  final  rate  of
earnings  is  less than $3,500, (2) $108 if the final rate of
earnings is at least $3,500 but less than $4,500, (3) $120 if
the final rate of earnings is at least $4,500 but  less  than
$5,500,  (4)  $132  if the final rate of earnings is at least
$5,500 but less than $6,500, (5) $144 if the  final  rate  of
earnings is at least $6,500 but less than $7,500, (6) $156 if
the  final  rate of earnings is at least $7,500 but less than
$8,500, (7) $168 if the final rate of earnings  is  at  least
$8,500  but  less than $9,500, and (8) $180 if the final rate
of earnings is $9,500 or more, except that  the  annuity  for
those   persons   having   made  an  election  under  Section
15-154(a-1)  shall  be  calculated  and  payable  under   the
portable   retirement   benefit   program   pursuant  to  the
provisions of Section 15-136.4.
    Rule 4:  A participant who is at least age 50 and has  25
or  more years of service as a police officer or firefighter,
and a participant who is age 55 or over and has at  least  20
but  less  than  25  years  of service as a police officer or
firefighter, shall be entitled to  a  retirement  annuity  of
2 1/4% of the final rate of earnings for each of the first 10
years  of  service as a police officer or firefighter, 2 1/2%
for each of the next 10 years of service as a police  officer
or  firefighter,  and  2 3/4%  for  each year of service as a
police  officer  or  firefighter  in  excess  of   20.    The
retirement  annuity  for  all other service shall be computed
under Rule 1.
    For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
         (i)  service that is performed while the  person  is
    an employee under subsection (h) of Section 15-107; and
         (ii)  in  the  case  of  an  individual  who  was  a
    participating employee employed in the fire department of
    the  University  of  Illinois's  Champaign-Urbana  campus
    immediately   prior  to  the  elimination  of  that  fire
    department and who immediately after the  elimination  of
    that  fire department transferred to another job with the
    University of Illinois, service performed as an  employee
    of  the  University  of Illinois in a position other than
    police officer or firefighter,  from  the  date  of  that
    transfer until the employee's next termination of service
    with the University of Illinois.
    Rule  5:  The  retirement  annuity  of  a participant who
elected early retirement  under  the  provisions  of  Section
15-136.2  and  who,  on  or before February 16, 1995, brought
administrative proceedings  pursuant  to  the  administrative
rules  adopted  by the System to challenge the calculation of
his or her  retirement  annuity  shall  be  the  sum  of  the
following,   determined   from   amounts   credited   to  the
participant in accordance with the actuarial tables  and  the
prescribed  rate  of  interest  in  effect  at  the  time the
retirement annuity begins:
         (i)  the normal annuity which can be provided on  an
    actuarially  equivalent  basis, by the accumulated normal
    contributions as of the date the annuity begins; and
         (ii)  an annuity from employer contributions  of  an
    amount  equal  to  that  which  can  be  provided  on  an
    actuarially  equivalent basis from the accumulated normal
    contributions  made  by  the  participant  under  Section
    15-113.6 and Section 15-113.7 plus 1.4  times  all  other
    accumulated normal contributions made by the participant;
    and
         (iii)  an  annuity  which  can  be  provided  on  an
    actuarially    equivalent   basis   from   the   employee
    contribution for early retirement under Section 15-136.2,
    and an annuity from employer contributions of  an  amount
    equal  to  that  which  can be provided on an actuarially
    equivalent basis from the employee contribution for early
    retirement under Section 15-136.2.
    In no event shall a retirement annuity under this Rule  5
be  lower  than the amount obtained by adding (1) the monthly
amount  obtained  by  dividing  the  combined  employee   and
employer  contributions  made  under  Section 15-136.2 by the
System's annuity factor for the age of the participant at the
beginning of the annuity payment period and  (2)  the  amount
equal  to  the participant's annuity if calculated under Rule
1, reduced under Section 15-136(b) as if no contributions had
been made under Section 15-136.2.
    With respect to a participant  who  is  qualified  for  a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st  General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and  shall  pay  any
additional  amounts  due  in  the  manner provided in Section
15-186.1 for benefits mistakenly set too low.
    The amount of a retirement annuity calculated under  this
Rule  5  shall  be  computed  solely  on  the  basis of those
contributions specifically set forth in this Rule 5.   Except
as  provided  in  clause  (iii)  of  this  Rule 5, neither an
employee nor employer contribution for early retirement under
Section 15-136.2, nor any other employer contribution,  shall
be  used  in  the  calculation  of the amount of a retirement
annuity under this Rule 5.
    The General Assembly has adopted the changes set forth in
Section 25  of  this  amendatory  Act  of  the  91st  General
Assembly  in  recognition  that the decision of the Appellate
Court for the Fourth District in Mattis v. State Universities
Retirement System et al. might be deemed to give  some  right
to  the  plaintiff in that case.  The changes made by Section
25 of this amendatory Act of the 91st General Assembly are  a
legislative  implementation  of the decision of the Appellate
Court for the Fourth District in Mattis v. State Universities
Retirement System et al. with respect to that plaintiff.
    The changes made by Section 25 of this amendatory Act  of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
    (b)  The  retirement annuity provided under Rules 1 and 3
above shall be reduced by  1/2  of  1%  for  each  month  the
participant  is  under  age  60  at  the  time of retirement.
However, this reduction shall  not  apply  in  the  following
cases:
         (1)  For  a  disabled  participant  whose disability
    benefits have been discontinued because  he  or  she  has
    exhausted   eligibility  for  disability  benefits  under
    clause (6) of Section 15-152;
         (2)  For a participant who has at least  the  number
    of  years  of service required to retire at any age under
    subsection (a) of Section 15-135; or
         (3)  For that portion of a retirement annuity  which
    has   been   provided   on  account  of  service  of  the
    participant during periods when he or she  performed  the
    duties  of  a  police  officer  or  firefighter, if these
    duties were performed for at least  5  years  immediately
    preceding the date the retirement annuity is to begin.
    (c)  The  maximum retirement annuity provided under Rules
1, 2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal  Revenue
Code  of  1986,  as  such Section may be amended from time to
time and as such benefit limits  shall  be  adjusted  by  the
Commissioner  of  Internal Revenue, and (2) 80% of final rate
of earnings.
    (d)  An annuitant whose status as an employee  terminates
after  August  14,  1969 shall receive automatic increases in
his or her retirement annuity as follows:
    Effective January 1 immediately following  the  date  the
retirement  annuity  begins,  the  annuitant shall receive an
increase in his or her monthly retirement annuity  of  0.125%
of the monthly retirement annuity provided under Rule 1, Rule
2,  Rule  3,  Rule  4,  or Rule 5, contained in this Section,
multiplied by the number of full months  which  elapsed  from
the  date the retirement annuity payments began to January 1,
1972, plus 0.1667% of such annuity, multiplied by the  number
of  full  months  which  elapsed from January 1, 1972, or the
date the retirement  annuity  payments  began,  whichever  is
later,  to  January  1,  1978,  plus  0.25%  of  such annuity
multiplied by the number of full months  which  elapsed  from
January  1, 1978, or the date the retirement annuity payments
began, whichever is later,  to  the  effective  date  of  the
increase.
    The  annuitant  shall  receive  an increase in his or her
monthly retirement  annuity  on  each  January  1  thereafter
during  the  annuitant's  life  of  3% of the monthly annuity
provided under Rule 1, Rule 2, Rule 3,  Rule  4,  or  Rule  5
contained  in  this  Section.   The  change  made  under this
subsection by P.A. 81-970 is effective January  1,  1980  and
applies  to  each  annuitant  whose  status  as  an  employee
terminates before or after that date.
    Beginning January 1, 1990, all automatic annual increases
payable   under   this  Section  shall  be  calculated  as  a
percentage of the total annuity payable at the  time  of  the
increase,  including  all  increases previously granted under
this Article.
    The change made in this subsection  by  P.A.  85-1008  is
effective  January 26, 1988, and is applicable without regard
to whether status as an employee terminated before that date.
    (e)  If, on January 1, 1987, or the date  the  retirement
annuity payment period begins, whichever is later, the sum of
the  retirement  annuity  provided  under Rule 1 or Rule 2 of
this Section and  the  automatic  annual  increases  provided
under  the  preceding subsection or Section 15-136.1, amounts
to less than the retirement annuity which would  be  provided
by  Rule  3,  the retirement annuity shall be increased as of
January 1, 1987, or the date the retirement  annuity  payment
period  begins, whichever is later, to the amount which would
be provided by Rule 3 of this Section. Such increased  amount
shall  be considered as the retirement annuity in determining
benefits provided under other Sections of this Article.  This
paragraph  applies  without  regard  to  whether status as an
employee  terminated  before  the  effective  date  of   this
amendatory  Act  of  1987,  provided  that  the annuitant was
employed at least one-half time during the  period  on  which
the final rate of earnings was based.
    (f)  A participant is entitled to such additional annuity
as may be provided on an actuarially equivalent basis, by any
accumulated  additional  contributions  to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account  in  determining  the
amount of such additional annuity.
    (g)  If,  (1)  by law, a function of a governmental unit,
as defined by Section 20-107 of this Code, is transferred  in
whole  or  in  part  to  an  employer,  and (2) a participant
transfers employment from  such  governmental  unit  to  such
employer  within 6 months after the transfer of the function,
and (3) the sum of (A) the annuity payable to the participant
under Rule 1, 2, or 3 of this Section  (B)  all  proportional
annuities  payable to the participant by all other retirement
systems covered by Article 20, and (C)  the  initial  primary
insurance  amount  to which the participant is entitled under
the Social Security Act, is less than the retirement  annuity
which  would  have  been  payable if all of the participant's
pension credits  validated  under  Section  20-109  had  been
validated  under this system, a supplemental annuity equal to
the difference in  such  amounts  shall  be  payable  to  the
participant.
    (h)  On January 1, 1981, an annuitant who was receiving a
retirement  annuity  on  or before January 1, 1971 shall have
his or her retirement annuity then being  paid  increased  $1
per  month for each year of creditable service. On January 1,
1982, an annuitant  whose  retirement  annuity  began  on  or
before  January  1,  1977,  shall  have his or her retirement
annuity then being paid increased $1 per month for each  year
of creditable service.
    (i)  On  January  1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977,  shall  have  the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source:  P.A.  91-887  (Sections  20  and  25), eff. 7-6-00;
92-16, eff. 6-28-01.)

    (40 ILCS 5/15-153) (from Ch. 108 1/2, par. 15-153)
    Sec.  15-153.   Disability   benefits   -   Amount.   The
disability  benefit  shall  be  the greater of (1) 50% of the
basic  compensation  which  would  have  been  paid  had  the
participant continued in service for the entire period during
which disability benefits  are  payable,  excluding  wage  or
salary  increases  subsequent  to  the  date of disability or
extra prospective earnings on a summer teaching  contract  or
other  extra  service  not yet entered upon or (2) 50% of the
participant's  average  earnings   during   the   24   months
immediately  preceding  the month in which disability occurs.
In determining the disability benefit, the basic compensation
of a participating employee on leave of absence or on lay-off
status shall be assumed to be  equal  to  his  or  her  basic
compensation  on  the  date  the  leave of absence or lay-off
begins.
    If the disability benefit is 50% of  basic  compensation,
payments  during  the  academic fiscal year shall accrue over
the period that the basic compensation would have  been  paid
had  the participant continued in service.  If the disability
benefit is 50% of the average  earnings  of  the  participant
during the 24 months immediately preceding the month in which
disability occurs, payments during the year shall accrue over
a  period  of 12 months. Disability benefits shall be paid as
of the end of  each  calendar  month  during  which  payments
accrue.  Payments  for  fractional  parts of a month shall be
determined by prorating the total amount payable for the full
month on the basis of days elapsing during  the  month.   Any
disability  benefit  accrued  but  unpaid  on  the death of a
participant shall be paid to the participant's beneficiary.
(Source: P.A. 84-1472.)
    (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
    Sec. 15-154.  Refunds.
    (a)  A  participant  whose  status  as  an  employee   is
terminated,  regardless  of cause, or who has been on lay off
status for more than 120 days, and who is  not  on  leave  of
absence,  is  entitled  to  a  refund  of  contributions upon
application; except  that  not  more  than  one  such  refund
application may be made during any academic year.
    Except  as  set forth in subsections (a-1) and (a-2), the
refund  shall  be  the  sum  of   the   accumulated   normal,
additional,  and  survivors insurance contributions, plus the
entire contribution made by  the  participant  under  Section
15-113.3,  less  the  amount  of  interest  credited on these
contributions each year in excess of 4 1/2% of the amount  on
which interest was calculated.
    (a-1)  A  person  who  elects,  in  accordance  with  the
requirements  of  Section  15-134.5,  to  participate  in the
portable benefit package  and  who  becomes  a  participating
employee under that retirement program upon the conclusion of
the  one-year  waiting  period  applicable  to  the  portable
benefit  package  election  shall  have  his  or  her  refund
calculated  in  accordance  with the provisions of subsection
(a-2).
    (a-2)  The refund payable to a participant  described  in
subsection  (a-1)  shall  be  the  sum  of  the participant's
accumulated normal and additional contributions,  as  defined
in  Sections  15-116 and 15-117, plus the entire contribution
made by the  participant  under  Section  15-113.3.   If  the
participant  terminates  with  5 or more years of service for
employment as defined in Section 15-113.1, he  or  she  shall
also  be entitled to a distribution of employer contributions
in an amount equal to the sum of the accumulated  normal  and
additional  contributions,  as defined in Sections 15-116 and
15-117.
    (b)  Upon  acceptance  of  a  refund,   the   participant
forfeits all accrued rights and credits in the System, and if
subsequently  reemployed, the participant shall be considered
a new employee subject to all the qualifying  conditions  for
participation  and eligibility for benefits applicable to new
employees.  If such  person  again  becomes  a  participating
employee and continues as such for 2 years, or is employed by
an  employer  and  participates  for  at least 2 years in the
Federal Civil Service Retirement  System,  all  such  rights,
credits,  and  previous  status  as  a  participant  shall be
restored upon repayment of the amount of the refund, together
with compound interest thereon from the date the  refund  was
received to the date of repayment at the rate of 6% per annum
through  August  31,  1982,  and at the effective rates after
that date.   When  a  participant  in  the  portable  benefit
package  who  received a refund which included a distribution
of employer contributions repays a refund  pursuant  to  this
Section,  one-half  of  the amount repaid shall be deemed the
member's  reinstated  accumulated   normal   and   additional
contributions  and  the  other  half shall be allocated as an
employer contribution to the System, except that  any  amount
repaid for previously purchased military service credit under
Section   15-113.3   shall   be   accounted   for   as  such.
Notwithstanding Section 1-103.1 and the other  provisions  of
this  Section,  a  person who was a participant in the System
from February 14, 1966  until  March  13,  1981  may  restore
credits  previously  forfeited  by  acceptance  of  a refund,
without returning to service,  by  applying  in  writing  and
repaying  to  the  System  by  July 1, 2002 the amount of the
refund plus interest at the effective  rate  calculated  from
the date of the refund to the date of repayment.
    (c)  If  a  participant  covered  under  the  traditional
benefit  package  has made survivors insurance contributions,
but has no survivors insurance beneficiary  upon  retirement,
he  or  she  shall  be  entitled  to  elect  a  refund of the
accumulated survivors insurance contributions, or to elect an
additional annuity  the  value  of  which  is  equal  to  the
accumulated survivors insurance contributions.  This election
must  be  made  prior  to  the  date  the person's retirement
annuity is approved by the System Board of Trustees.
    (d)  A participant, upon application, is  entitled  to  a
refund  of  his  or  her accumulated additional contributions
attributable to the additional contributions described in the
last sentence of subsection (c) of Section 15-157.  Upon  the
acceptance   of  such  a  refund  of  accumulated  additional
contributions,  the  participant  forfeits  all  rights   and
credits which may have accrued because of such contributions.
    (e)  A  participant  who  terminates  his or her employee
status and elects  to  waive  service  credit  under  Section
15-154.2,  is entitled to a refund of the accumulated normal,
additional and survivors  insurance  contributions,  if  any,
which  were  credited the participant for this service, or to
an additional annuity the value of  which  is  equal  to  the
accumulated   normal,   additional  and  survivors  insurance
contributions, if any; except that not  more  than  one  such
refund application may be made during any academic year. Upon
acceptance  of  this  refund,  the  participant  forfeits all
rights and credits accrued because of this service.
    (f)  If  a  police  officer  or  firefighter  receives  a
retirement annuity under Rule 1 or 3 of Section 15-136, he or
she shall be entitled  at  retirement  to  a  refund  of  the
difference    between   his   or   her   accumulated   normal
contributions and the normal contributions which  would  have
accumulated  had such person filed a waiver of the retirement
formula provided by Rule 4 of Section 15-136.
    (g)  If, at the time of retirement, a  participant  would
be entitled to a retirement annuity under Rule 1, 2, 3, 4, or
5 of Section 15-136, or under Section 15-136.4,  that exceeds
the  maximum  specified  in  clause  (1) of subsection (c) of
Section 15-136, he or she shall be entitled to  a  refund  of
the employee contributions, if any, paid under Section 15-157
after  the  date upon which continuance of such contributions
would have otherwise caused the retirement annuity to  exceed
this maximum, plus compound interest at the effective rates.
(Source: P.A.  91-887  (Sections  10  and  25),  eff. 7-6-00;
92-16, eff. 6-28-01; 92-424, eff. 8-17-01.)

    (40 ILCS 5/15-158.2)
    Sec. 15-158.2. Self-managed plan.
    (a)  Purpose.  The General  Assembly  finds  that  it  is
important for colleges and universities to be able to attract
and  retain the most qualified employees and that in order to
attract and retain these employees, colleges and universities
should have the flexibility to provide a defined contribution
plan as an alternative for eligible employees who  elect  not
to  participate  in  a  defined  benefit  retirement  program
provided   under   this  Article.    Accordingly,  the  State
Universities  Retirement  System  is  hereby  authorized   to
establish  and  administer  a  self-managed plan, which shall
offer participating employees the opportunity  to  accumulate
assets  for  retirement through a combination of employee and
employer contributions that may be invested in mutual  funds,
collective investment funds, or other investment products and
used  to purchase annuity contracts, either fixed or variable
or a combination thereof.  The plan must be  qualified  under
the Internal Revenue Code of 1986.
    (b)  Adoption  by  employers.   Each  employer subject to
this  Article  may  elect  to  adopt  the  self-managed  plan
established under this Section; this election is irrevocable.
An employer's election to adopt the self-managed  plan  makes
available  to  the  eligible  employees  of that employer the
elections described in Section 15-134.5.
    The State Universities Retirement  System  shall  be  the
plan  sponsor  for  the self-managed plan and shall prepare a
plan document and prescribe such rules and procedures as  are
considered  necessary  or desirable for the administration of
the self-managed plan.  Consistent with its fiduciary duty to
the participants and beneficiaries of the self-managed  plan,
the  Board  of Trustees of the System may delegate aspects of
plan administration as it sees fit to companies authorized to
do business  in  this  State,  to  the  employers,  or  to  a
combination of both.
    (c)  Selection of service providers and funding vehicles.
The System, in consultation with the employers, shall solicit
proposals  to  provide  administrative  services  and funding
vehicles for the self-managed plan from insurance and annuity
companies and mutual fund companies, banks, trust  companies,
or  other financial institutions authorized to do business in
this  State.   In  reviewing  the  proposals   received   and
approving  and  contracting  with no fewer than 2 and no more
than 7 companies, at least 2 of which must be  insurance  and
annuity  companies, the Board of Trustees of the System shall
consider, among other things, the following criteria:
         (1)  the nature and  extent  of  the  benefits  that
    would be provided to the participants;
         (2)  the  reasonableness of the benefits in relation
    to the premium charged;
         (3)  the suitability of the benefits  to  the  needs
    and  interests  of  the  participating  employees and the
    employer;
         (4)  the ability of the company to provide  benefits
    under  the  contract  and  the financial stability of the
    company; and
         (5)  the efficacy of the contract in the recruitment
    and retention of employees.
    The System, in consultation  with  the  employers,  shall
periodically  review  each  approved  company.  A company may
continue  to  provide  administrative  services  and  funding
vehicles for  the  self-managed  plan  only  so  long  as  it
continues  to  be an approved company under contract with the
Board.
    (d)  Employee Direction.  Employees who are participating
in the program must be allowed  to  direct  the  transfer  of
their  account  balances among the various investment options
offered, subject to applicable contractual provisions.    The
participant  shall  not  be  deemed  a fiduciary by reason of
providing such investment  direction.   A  person  who  is  a
fiduciary  shall  not  be  liable for any loss resulting from
such investment direction and shall not  be  deemed  to  have
breached any fiduciary duty by acting in accordance with that
direction.    Neither  the System nor the employer guarantees
any of the investments in the employee's account balances.
    (e)  Participation.  An employee eligible to  participate
in  the  self-managed  plan  must  make a written election in
accordance with the provisions of Section  15-134.5  and  the
procedures  established  by the System.  Participation in the
self-managed plan by an electing employee shall begin on  the
first  day of the first pay period following the later of the
date the employee's election is filed with the System or  the
effective  date as of which the employee's employer begins to
offer participation in the self-managed plan.  Employers  may
not make the self-managed plan available earlier than January
1, 1998.  An employee's participation in any other retirement
program  administered  by the System under this Article shall
terminate on the date that participation in the  self-managed
plan begins.
    An  employee  who  has  elected  to  participate  in  the
self-managed   plan   under   this   Section   must  continue
participation while employed in an eligible position, and may
not participate in any other retirement program  administered
by  the  System  under  this  Article  while employed by that
employer  or  any  other  employer  that  has   adopted   the
self-managed plan, unless the self-managed plan is terminated
in accordance with subsection (i).
    Participation in the self-managed plan under this Section
shall   constitute   membership  in  the  State  Universities
Retirement System.
    A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
    (f)  Establishment of Initial Account Balance.  If at the
time an employee elects to participate  in  the  self-managed
plan  he  or  she has rights and credits in the System due to
previous participation in the  traditional  benefit  package,
the  System  shall  establish  for  the  employee  an opening
account balance in the self-managed plan, equal to the amount
of contribution refund that the employee would be eligible to
receive under  Section  15-154  if  the  employee  terminated
employment   on   that   date   and   elected   a  refund  of
contributions, except that  this  hypothetical  refund  shall
include  interest  at  the  effective rate for the respective
years.  The System shall transfer  assets  from  the  defined
benefit retirement program to the self-managed plan, as a tax
free  transfer  in  accordance  with Internal Revenue Service
guidelines, for purposes of funding  the  employee's  opening
account balance.
    (g)  No  Duplication  of Service Credit.  Notwithstanding
any other provision of this  Article,  an  employee  may  not
purchase  or  receive service or service credit applicable to
any other retirement program administered by the System under
this Article for any period during which the employee  was  a
participant  in  the self-managed plan established under this
Section.
    (h)  Contributions.   The  self-managed  plan  shall   be
funded  by  contributions from employees participating in the
self-managed plan and employer contributions as  provided  in
this Section.
    The  contribution rate for employees participating in the
self-managed plan under this Section shall be  equal  to  the
employee  contribution  rate  for  other  participants in the
System,  as  provided  in  Section  15-157.   This   required
contribution  shall  be  made  as an "employer pick-up" under
Section 414(h) of the Internal Revenue Code of  1986  or  any
successor Section thereof.  Any employee participating in the
System's  traditional  benefit  package  prior  to his or her
election  to  participate  in  the  self-managed  plan  shall
continue to have  the  employer  pick  up  the  contributions
required  under  Section 15-157.  However, the amounts picked
up after the election  of  the  self-managed  plan  shall  be
remitted  to  and treated as assets of the self-managed plan.
In no event shall an employee have  an  option  of  receiving
these   amounts  in  cash.   Employees  may  make  additional
contributions to the self-managed  plan  in  accordance  with
procedures  prescribed by the System, to the extent permitted
under rules prescribed by the System.
    The program shall provide for employer  contributions  to
be  credited  to each self-managed plan participant at a rate
of 7.6% of the  participating  employee's  salary,  less  the
amount  used by the System to provide disability benefits for
the employee.  The amounts so credited shall be paid into the
participant's self-managed plan accounts in a  manner  to  be
prescribed by the System.
    An  amount  of employer contribution, not exceeding 1% of
the participating employee's salary, shall be  used  for  the
purpose of providing the disability benefits of the System to
the employee.  Prior to the beginning of each plan year under
the self-managed plan, the Board of Trustees shall determine,
as   a   percentage   of   salary,  the  amount  of  employer
contributions to be  allocated  during  that  plan  year  for
providing   disability   benefits   for   employees   in  the
self-managed plan.
    The  State  of  Illinois  shall  make  contributions   by
appropriations  to  the  System of the employer contributions
required for employees who participate  in  the  self-managed
plan  under  this  Section.    The  amount  required shall be
certified by the Board of Trustees of the System and paid  by
the  State  in  accordance  with  Section 15-165.  The System
shall  not  be  obligated  to  remit  the  required  employer
contributions to any of the insurance and annuity  companies,
mutual  fund  companies,  banks,  trust  companies, financial
institutions,  or  other  sponsors  of  any  of  the  funding
vehicles offered under the self-managed  plan  until  it  has
received  the required employer contributions from the State.
In  the  event  of  a  deficiency  in  the  amount  of  State
contributions, the System shall  implement  those  procedures
described  in  subsection (c) of Section 15-165 to obtain the
required funding from the General Revenue Fund.
    (i)  Termination.  The self-managed plan authorized under
this Section may be terminated by the System, subject to  the
terms of any relevant contracts, and the System shall have no
obligation  to  reestablish  the self-managed plan under this
Section.  This Section does not create a right  to  continued
participation  in  any self-managed plan set up by the System
under this Section.  If the self-managed plan is  terminated,
the  participants  shall have the right to participate in one
of the other retirement programs offered by  the  System  and
receive  service  credit in such other retirement program for
any years of employment following the termination.
    (j)  Vesting;   Withdrawal;   Return   to   Service.    A
participant in the self-managed plan becomes  vested  in  the
employer contributions credited to his or her accounts in the
self-managed  plan on the earliest to occur of the following:
(1) completion  of  5  years  of  service  with  an  employer
described   in   Section   15-106;   (2)  the  death  of  the
participating  employee  while  employed   by   an   employer
described in Section 15-106, if the participant has completed
at  least  1 1/2  years  of service; or (3) the participant's
election to retire and apply  the  reciprocal  provisions  of
Article 20 of this Code.
    A  participant  in  the  self-managed plan who receives a
distribution  of  his  or  her  vested   amounts   from   the
self-managed plan while not yet eligible for retirement under
this  Article  (and  Article 20, if applicable) shall forfeit
all service credit and  accrued  rights  in  the  System;  if
subsequently re-employed, the participant shall be considered
a  new  employee.   If  a  former participant again becomes a
participating   employee   (or   becomes   employed   by    a
participating  system  under  Article  20  of  this Code) and
continues as such for at least  2  years,  all  such  rights,
service  credits,  and previous status as a participant shall
be restored upon repayment of the amount of the distribution,
without interest.
    (k)  Benefit amounts.  If an employee who  is  vested  in
employer  contributions  terminates  employment, the employee
shall be entitled to a benefit which is based on the  account
values   attributable   to   both   employer   and   employee
contributions and any investment return thereon.
    If   an   employee   who   is   not  vested  in  employer
contributions terminates employment, the  employee  shall  be
entitled  to  a  benefit  based  solely on the account values
attributable  to  the  employee's   contributions   and   any
investment return thereon, and the employer contributions and
any  investment  return  thereon  shall  be  forfeited.   Any
employer  contributions  which are forfeited shall be held in
escrow by the company investing those contributions and shall
be used as directed by the System for future  allocations  of
employer  contributions  or  for  the  restoration of amounts
previously forfeited by former participants who again  become
participating employees.
(Source:  P.A.  90-448,  eff.  8-16-97; 90-576, eff. 3-31-98;
90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)

    (40 ILCS 5/15-186.1) (from Ch. 108 1/2, par. 15-186.1)
    Sec.  15-186.1.   Mistake  in  benefit.   If  the  System
mistakenly sets any benefit at an incorrect amount, it  shall
recalculate  the  benefit as soon as may be practicable after
the mistake is discovered.
    If the benefit was mistakenly set  too  low,  the  System
shall  make  a lump sum payment to the recipient of an amount
equal to the difference between the benefits that should have
been paid and those  actually  paid,  plus  interest  at  the
effective  rate  from  the date the unpaid amounts accrued to
the date of payment.
    If the benefit was mistakenly set too  high,  the  System
may  recover  the amount overpaid from the recipient thereof,
plus  interest  at  the  effective  rate  from  the  date  of
overpayment to the date of recovery, either  directly  or  by
deducting  such amount from the remaining benefits payable to
the recipient.  However, if (1) the amount of the benefit was
mistakenly set too high, and (2) the error  was  undiscovered
for  3  years or longer, and (3) the error was not the result
of incorrect information supplied by the affected  member  or
beneficiary,  then  upon discovery of the mistake the benefit
shall be adjusted to the correct level, but the recipient  of
the  benefit  need not repay to the System the excess amounts
received in error.
(Source: P.A. 85-1008.)

    (40 ILCS 5/15-187) (from Ch. 108 1/2, par. 15-187)
    Sec. 15-187. Felony conviction.   None  of  the  benefits
provided  under  this Article shall be paid to any person who
is convicted of any felony relating to or arising out  of  or
in connection with the person's service as an employee.
    This  Section shall not operate to impair any contract or
vested right  heretofore  acquired  under  any  law  or  laws
continued  in  this  Article,  nor to preclude the right to a
refund.   No refund paid to any person who is convicted of  a
felony  relating  to  or arising out of or in connection with
the person's service as an employee  shall  include  employer
contributions or interest or, in the case of the self-managed
plan   authorized   under   Section  15-158.2,  any  employer
contributions  or  investment   return   on   such   employer
contributions.
    All  persons  entering service subsequent to July 9, 1955
shall be deemed to have consented to the provisions  of  this
Section as a condition of coverage.
(Source: P.A. 83-1440.)

    (40 ILCS 5/15-190) (from Ch. 108 1/2, par. 15-190)
    Sec. 15-190. Persons under legal disability.  If a person
is under legal disability when any right or privilege accrues
to him or her under this Article, a guardian may be appointed
pursuant to law, and may, on behalf of such person, claim and
exercise  any such right or privilege with the same force and
effect as if the person had not been under a legal disability
and had claimed or exercised such right or privilege.
    If a person's application for benefits or  a  physician's
certificate  on  file with the board shows that the person is
under a legal disability, and no guardian has been  appointed
for  his  or  her  estate,  the  benefits  payable under this
Article may be paid (1) directly to the  person  under  legal
disability,  (2)  to any person who has legally qualified and
is acting as guardian of the property  of  the  person  under
legal  disability,  (3)  to either parent of the person under
legal disability or any adult person  with  whom  the  person
under  legal  disability  may at the time be living, provided
only that such parent or adult person to whom any  amount  is
to  be paid shall have advised the board in writing that such
amount will be held or used for the  benefit  of  the  person
under  legal  disability,  or  (4)  (3) to the trustee of any
trust created for the sole benefit of the person under  legal
disability  while  that  person is living, provided only that
the trustee of such trust to whom any amount is  to  be  paid
shall have advised the board in writing that such amount will
be  held  or  used  for the benefit of the person under legal
disability.  The system shall not be  required  to  determine
the  validity  of the trust or any of the terms thereof.  The
representation of  the  trustee  that  the  trust  meets  the
requirements  of  this  Section shall be conclusive as to the
system.  The  written  receipt  of  the  person  under  legal
disability  or  the  other  person  who receives such payment
shall be an absolute discharge of the system's  liability  in
respect of the amount so paid.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)

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

Effective Date: 07/24/03