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Public Act 102-0764


 

Public Act 0764 102ND GENERAL ASSEMBLY

  
  
  

 


 
Public Act 102-0764
 
HB4320 EnrolledLRB102 20083 RPS 28930 b

    AN ACT concerning public employee benefits.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Pension Code is amended by
changing Section 15-155 as follows:
 
    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
    Sec. 15-155. Employer contributions.
    (a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
    The Board shall determine the amount of State
contributions required for each fiscal year on the basis of
the actuarial tables and other assumptions adopted by the
Board and the recommendations of the actuary, using the
formula in subsection (a-1).
    (a-1) For State fiscal years 2012 through 2045, the
minimum contribution to the System to be made by the State for
each fiscal year shall be an amount determined by the System to
be sufficient to bring the total assets of the System up to 90%
of the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For each of State fiscal years 2018, 2019, and 2020, the
State shall make an additional contribution to the System
equal to 2% of the total payroll of each employee who is deemed
to have elected the benefits under Section 1-161 or who has
made the election under subsection (c) of Section 1-161.
    A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
    A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
        (i) as already applied in State fiscal years before
    2018; and
        (ii) in the portion of the 5-year period beginning in
    the State fiscal year in which the actuarial change first
    applied that occurs in State fiscal year 2018 or
    thereafter, by calculating the change in equal annual
    amounts over that 5-year period and then implementing it
    at the resulting annual rate in each of the remaining
    fiscal years in that 5-year period.
    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 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 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, 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.
    (a-2) Beginning in fiscal year 2018, each employer under
this Article shall pay to the System a required contribution
determined as a percentage of projected payroll and sufficient
to produce an annual amount equal to:
        (i) for each of fiscal years 2018, 2019, and 2020, the
    defined benefit normal cost of the defined benefit plan,
    less the employee contribution, for each employee of that
    employer who has elected or who is deemed to have elected
    the benefits under Section 1-161 or who has made the
    election under subsection (c) of Section 1-161; for fiscal
    year 2021 and each fiscal year thereafter, the defined
    benefit normal cost of the defined benefit plan, less the
    employee contribution, plus 2%, for each employee of that
    employer who has elected or who is deemed to have elected
    the benefits under Section 1-161 or who has made the
    election under subsection (c) of Section 1-161; plus
        (ii) the amount required for that fiscal year to
    amortize any unfunded actuarial accrued liability
    associated with the present value of liabilities
    attributable to the employer's account under Section
    15-155.2, determined as a level percentage of payroll over
    a 30-year rolling amortization period.
    In determining contributions required under item (i) of
this subsection, the System shall determine an aggregate rate
for all employers, expressed as a percentage of projected
payroll.
    In determining the contributions required under item (ii)
of this subsection, the amount 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 contributions required under this subsection (a-2)
shall be paid by an employer concurrently with that employer's
payroll payment period. The State, as the actual employer of
an employee, shall make the required contributions under this
subsection.
    As used in this subsection, "academic year" means the
12-month period beginning September 1.
    (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), (h-5), 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 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
(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.
    When assessing payment for any amount due under this
subsection (g), the System shall include earnings, to the
extent not established by a participant under Section
15-113.11 or 15-113.12, that would have been paid to the
participant had the participant not taken (i) periods of
voluntary or involuntary furlough occurring on or after July
1, 2015 and on or before June 30, 2017 or (ii) periods of
voluntary pay reduction in lieu of furlough occurring on or
after July 1, 2015 and on or before June 30, 2017. Determining
earnings that would have been paid to a participant had the
participant not taken periods of voluntary or involuntary
furlough or periods of voluntary pay reduction shall be the
responsibility of the employer, and shall be reported in a
manner prescribed by the System.
    This subsection (g) does not apply to (1) Tier 2 hybrid
plan members and (2) Tier 2 defined benefit members who first
participate under this Article on or after the implementation
date of the Optional Hybrid Plan.
    (g-1) (Blank).
    (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.
    (h-5) When assessing payment for any amount due under
subsection (g), the System shall exclude any earnings increase
paid in an academic year beginning on or after July 1, 2020
resulting from overload work performed in an academic year
subsequent to an academic year in which the employer was
unable to offer or allow to be conducted overload work due to
an emergency declaration limiting such activities.
    (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.
Except as provided in subsection (h-5) 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.
    (j-5) For State fiscal years beginning on or after July 1,
2017, if the amount of a participant's earnings for any State
fiscal year exceeds the amount of the salary set by law for the
Governor that is in effect on July 1 of that fiscal year, 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, an
amount determined by the System to be equal to the employer
normal cost, as established by the System and expressed as a
total percentage of payroll, multiplied by the amount of
earnings in excess of the amount of the salary set by law for
the Governor. This amount 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, the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculation 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. 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
may be paid in the form of a lump sum within 90 days after
issuance of the bill. If the employer contributions are not
paid within 90 days after issuance 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 issuance of the bill. All
payments must be received within 3 years after issuance of the
bill. If the employer fails to make complete payment,
including applicable interest, within 3 years, then the System
may, after giving notice to the employer, certify the
delinquent amount to the State Comptroller, and the
Comptroller shall thereupon deduct the certified delinquent
amount from State funds payable to the employer and pay them
instead to the System.
    This subsection (j-5) does not apply to a participant's
earnings to the extent an employer pays the employer normal
cost of such earnings.
    The changes made to this subsection (j-5) by Public Act
100-624 are intended to apply retroactively to July 6, 2017
(the effective date of Public Act 100-23).
    (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. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
102-16, eff. 6-17-21; 102-558, eff. 8-20-21.)
 
    Section 90. The State Mandates Act is amended by adding
Section 8.46 as follows:
 
    (30 ILCS 805/8.46 new)
    Sec. 8.46. 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 102nd General Assembly.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 5/13/2022