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Public Act 102-0850


 

Public Act 0850 102ND GENERAL ASSEMBLY

  
  
  

 


 
Public Act 102-0850
 
SB3652 EnrolledLRB102 22513 RPS 31654 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 7-141.1 as follows:
 
    (40 ILCS 5/7-141.1)
    (Text of Section before amendment by P.A. 102-210)
    Sec. 7-141.1. Early retirement incentive.
    (a) The General Assembly finds and declares that:
        (1) Units of local government across the State have
    been functioning under a financial crisis.
        (2) This financial crisis is expected to continue.
        (3) Units of local government must depend on
    additional sources of revenue and, when those sources are
    not forthcoming, must establish cost-saving programs.
        (4) An early retirement incentive designed
    specifically to target highly-paid senior employees could
    result in significant annual cost savings.
        (5) The early retirement incentive should be made
    available only to those units of local government that
    determine that an early retirement incentive is in their
    best interest.
        (6) A unit of local government adopting a program of
    early retirement incentives under this Section is
    encouraged to implement personnel procedures to prohibit,
    for at least 5 years, the rehiring (whether on payroll or
    by independent contract) of employees who receive early
    retirement incentives.
        (7) A unit of local government adopting a program of
    early retirement incentives under this Section is also
    encouraged to replace as few of the participating
    employees as possible and to hire replacement employees
    for salaries totaling no more than 80% of the total
    salaries formerly paid to the employees who participate in
    the early retirement program.
    It is the primary purpose of this Section to encourage
units of local government that can realize true cost savings,
or have determined that an early retirement program is in
their best interest, to implement an early retirement program.
    (b) Until the effective date of this amendatory Act of
1997, this Section does not apply to any employer that is a
city, village, or incorporated town, nor to the employees of
any such employer. Beginning on the effective date of this
amendatory Act of 1997, any employer under this Article,
including an employer that is a city, village, or incorporated
town, may establish an early retirement incentive program for
its employees under this Section. The decision of a city,
village, or incorporated town to consider or establish an
early retirement program is at the sole discretion of that
city, village, or incorporated town, and nothing in this
amendatory Act of 1997 limits or otherwise diminishes this
discretion. Nothing contained in this Section shall be
construed to require a city, village, or incorporated town to
establish an early retirement program and no city, village, or
incorporated town may be compelled to implement such a
program.
    The benefits provided in this Section are available only
to members employed by a participating employer that has filed
with the Board of the Fund a resolution or ordinance expressly
providing for the creation of an early retirement incentive
program under this Section for its employees and specifying
the effective date of the early retirement incentive program.
Subject to the limitation in subsection (h), an employer may
adopt a resolution or ordinance providing a program of early
retirement incentives under this Section at any time.
    The resolution or ordinance shall be in substantially the
following form:
 
RESOLUTION (ORDINANCE) NO. ....
A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
    WHEREAS, Section 7-141.1 of the Illinois Pension Code
provides that a participating employer may elect to adopt an
early retirement incentive program offered by the Illinois
Municipal Retirement Fund by adopting a resolution or
ordinance; and
    WHEREAS, The goal of adopting an early retirement program
is to realize a substantial savings in personnel costs by
offering early retirement incentives to employees who have
accumulated many years of service credit; and
    WHEREAS, Implementation of the early retirement program
will provide a budgeting tool to aid in controlling payroll
costs; and
    WHEREAS, The (name of governing body) has determined that
the adoption of an early retirement incentive program is in
the best interests of the (name of participating employer);
therefore be it
    RESOLVED (ORDAINED) by the (name of governing body) of
(name of participating employer) that:
    (1) The (name of participating employer) does hereby adopt
the Illinois Municipal Retirement Fund early retirement
incentive program as provided in Section 7-141.1 of the
Illinois Pension Code. The early retirement incentive program
shall take effect on (date).
    (2) In order to help achieve a true cost savings, a person
who retires under the early retirement incentive program shall
lose those incentives if he or she later accepts employment
with or enters into a personal services contract with any IMRF
employer in a position for which participation in IMRF is
required or is elected by the employee.
    (3) In order to utilize an early retirement incentive as a
budgeting tool, the (name of participating employer) will use
its best efforts either to limit the number of employees who
replace the employees who retire under the early retirement
program or to limit the salaries paid to the employees who
replace the employees who retire under the early retirement
program.
    (4) The effective date of each employee's retirement under
this early retirement program shall be set by (name of
employer) and shall be no earlier than the effective date of
the program and no later than one year after that effective
date; except that the employee may require that the retirement
date set by the employer be no later than the June 30 next
occurring after the effective date of the program and no
earlier than the date upon which the employee qualifies for
retirement.
    (5) To be eligible for the early retirement incentive
under this Section, the employee must have attained age 50 and
have at least 20 years of creditable service by his or her
retirement date.
    (6) The (clerk or secretary) shall promptly file a
certified copy of this resolution (ordinance) with the Board
of Trustees of the Illinois Municipal Retirement Fund.
CERTIFICATION
    I, (name), the (clerk or secretary) of the (name of
participating employer) of the County of (name), State of
Illinois, do hereby certify that I am the keeper of the books
and records of the (name of employer) and that the foregoing is
a true and correct copy of a resolution (ordinance) duly
adopted by the (governing body) at a meeting duly convened and
held on (date).
SEAL
(Signature of clerk or secretary)
 
    (c) To be eligible for the benefits provided under an
early retirement incentive program adopted under this Section,
a member must:
        (1) be a participating employee of this Fund who, on
    the effective date of the program, (i) is in active
    payroll status as an employee of a participating employer
    that has filed the required ordinance or resolution with
    the Board, (ii) is on layoff status from such a position
    with a right of re-employment or recall to service, (iii)
    is on a leave of absence from such a position, or (iv) is
    on disability but has not been receiving benefits under
    Section 7-146 or 7-150 for a period of more than 2 years
    from the date of application;
        (2) have never previously received a retirement
    annuity under this Article or under the Retirement Systems
    Reciprocal Act using service credit established under this
    Article;
        (3) (blank);
        (4) have at least 20 years of creditable service in
    the Fund by the date of retirement, without the use of any
    creditable service established under this Section;
        (5) have attained age 50 by the date of retirement,
    without the use of any age enhancement received under this
    Section; and
        (6) be eligible to receive a retirement annuity under
    this Article by the date of retirement, for which purpose
    the age enhancement and creditable service established
    under this Section may be considered.
    (d) The employer shall determine the retirement date for
each employee participating in the early retirement program
adopted under this Section. The retirement date shall be no
earlier than the effective date of the program and no later
than one year after that effective date, except that the
employee may require that the retirement date set by the
employer be no later than the June 30 next occurring after the
effective date of the program and no earlier than the date upon
which the employee qualifies for retirement. The employer
shall give each employee participating in the early retirement
program at least 30 days written notice of the employee's
designated retirement date, unless the employee waives this
notice requirement.
    (e) An eligible person may establish up to 5 years of
creditable service under this Section. In addition, for each
period of creditable service established under this Section, a
person shall have his or her age at retirement deemed enhanced
by an equivalent period.
    The creditable service established under this Section may
be used for all purposes under this Article and the Retirement
Systems Reciprocal Act, except for the computation of final
rate of earnings and the determination of earnings, salary, or
compensation under this or any other Article of the Code.
    The age enhancement established under this Section may be
used for all purposes under this Article (including
calculation of the reduction imposed under subdivision
(a)1b(iv) of Section 7-142), except for purposes of a
reversionary annuity under Section 7-145 and any distributions
required because of age. The age enhancement established under
this Section may be used in calculating a proportionate
annuity payable by this Fund under the Retirement Systems
Reciprocal Act, but shall not be used in determining benefits
payable under other Articles of this Code under the Retirement
Systems Reciprocal Act.
    (f) For all creditable service established under this
Section, the member must pay to the Fund an employee
contribution consisting of the total employee contribution
rate in effect at the time the member purchases the service for
the plan in which the member was participating with the
employer at that time multiplied by the member's highest
annual salary rate used in the determination of the final rate
of earnings for retirement annuity purposes for each year of
creditable service granted under this Section. Contributions
for fractions of a year of service shall be prorated. Any
amounts that are disregarded in determining the final rate of
earnings under subdivision (d)(5) of Section 7-116 (the 125%
rule) shall also be disregarded in determining the required
contribution under this subsection (f).
    The employee contribution shall be paid to the Fund as
follows: If the member is entitled to a lump sum payment for
accumulated vacation, sick leave, or personal leave upon
withdrawal from service, the employer shall deduct the
employee contribution from that lump sum and pay the deducted
amount directly to the Fund. If there is no such lump sum
payment or the required employee contribution exceeds the net
amount of the lump sum payment, then the remaining amount due,
at the option of the employee, may either be paid to the Fund
before the annuity commences or deducted from the retirement
annuity in 24 equal monthly installments.
    (g) An annuitant who has received any age enhancement or
creditable service under this Section and thereafter accepts
employment with or enters into a personal services contract
with an employer under this Article thereby forfeits that age
enhancement and creditable service; except that this
restriction does not apply to (1) service in an elective
office, so long as the annuitant does not participate in this
Fund with respect to that office, (2) a person appointed as an
officer under subsection (f) of Section 3-109 of this Code,
and (3) a person appointed as an auxiliary police officer
pursuant to Section 3.1-30-5 of the Illinois Municipal Code. A
person forfeiting early retirement incentives under this
subsection (i) must repay to the Fund that portion of the
retirement annuity already received which is attributable to
the early retirement incentives that are being forfeited, (ii)
shall not be eligible to participate in any future early
retirement program adopted under this Section, and (iii) is
entitled to a refund of the employee contribution paid under
subsection (f). The Board shall deduct the required repayment
from the refund and may impose a reasonable payment schedule
for repaying the amount, if any, by which the required
repayment exceeds the refund amount.
    (h) The additional unfunded liability accruing as a result
of the adoption of a program of early retirement incentives
under this Section by an employer shall be amortized over a
period of 10 years beginning on January 1 of the second
calendar year following the calendar year in which the latest
date for beginning to receive a retirement annuity under the
program (as determined by the employer under subsection (d) of
this Section) occurs; except that the employer may provide for
a shorter amortization period (of no less than 5 years) by
adopting an ordinance or resolution specifying the length of
the amortization period and submitting a certified copy of the
ordinance or resolution to the Fund no later than 6 months
after the effective date of the program. An employer, at its
discretion, may accelerate payments to the Fund.
    An employer may provide more than one early retirement
incentive program for its employees under this Section.
However, an employer that has provided an early retirement
incentive program for its employees under this Section may not
provide another early retirement incentive program under this
Section until the liability arising from the earlier program
has been fully paid to the Fund.
(Source: P.A. 99-382, eff. 8-17-15.)
 
    (Text of Section after amendment by P.A. 102-210)
    Sec. 7-141.1. Early retirement incentive.
    (a) The General Assembly finds and declares that:
        (1) Units of local government across the State have
    been functioning under a financial crisis.
        (2) This financial crisis is expected to continue.
        (3) Units of local government must depend on
    additional sources of revenue and, when those sources are
    not forthcoming, must establish cost-saving programs.
        (4) An early retirement incentive designed
    specifically to target highly-paid senior employees could
    result in significant annual cost savings.
        (5) The early retirement incentive should be made
    available only to those units of local government that
    determine that an early retirement incentive is in their
    best interest.
        (6) A unit of local government adopting a program of
    early retirement incentives under this Section is
    encouraged to implement personnel procedures to prohibit,
    for at least 5 years, the rehiring (whether on payroll or
    by independent contract) of employees who receive early
    retirement incentives.
        (7) A unit of local government adopting a program of
    early retirement incentives under this Section is also
    encouraged to replace as few of the participating
    employees as possible and to hire replacement employees
    for salaries totaling no more than 80% of the total
    salaries formerly paid to the employees who participate in
    the early retirement program.
    It is the primary purpose of this Section to encourage
units of local government that can realize true cost savings,
or have determined that an early retirement program is in
their best interest, to implement an early retirement program.
    (b) Until June 27, 1997 (the effective date of Public Act
90-32), this Section does not apply to any employer that is a
city, village, or incorporated town, nor to the employees of
any such employer. Beginning on June 27, 1997 (the effective
date of Public Act 90-32), any employer under this Article,
including an employer that is a city, village, or incorporated
town, may establish an early retirement incentive program for
its employees under this Section. The decision of a city,
village, or incorporated town to consider or establish an
early retirement program is at the sole discretion of that
city, village, or incorporated town, and nothing in Public Act
90-32 limits or otherwise diminishes this discretion. Nothing
contained in this Section shall be construed to require a
city, village, or incorporated town to establish an early
retirement program and no city, village, or incorporated town
may be compelled to implement such a program.
    The benefits provided in this Section are available only
to members employed by a participating employer that has filed
with the Board of the Fund a resolution or ordinance expressly
providing for the creation of an early retirement incentive
program under this Section for its employees and specifying
the effective date of the early retirement incentive program.
Subject to the limitation in subsection (h), an employer may
adopt a resolution or ordinance providing a program of early
retirement incentives under this Section at any time.
    The resolution or ordinance shall be in substantially the
following form:
 
RESOLUTION (ORDINANCE) NO. ....
A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
    WHEREAS, Section 7-141.1 of the Illinois Pension Code
provides that a participating employer may elect to adopt an
early retirement incentive program offered by the Illinois
Municipal Retirement Fund by adopting a resolution or
ordinance; and
    WHEREAS, The goal of adopting an early retirement program
is to realize a substantial savings in personnel costs by
offering early retirement incentives to employees who have
accumulated many years of service credit; and
    WHEREAS, Implementation of the early retirement program
will provide a budgeting tool to aid in controlling payroll
costs; and
    WHEREAS, The (name of governing body) has determined that
the adoption of an early retirement incentive program is in
the best interests of the (name of participating employer);
therefore be it
    RESOLVED (ORDAINED) by the (name of governing body) of
(name of participating employer) that:
    (1) The (name of participating employer) does hereby adopt
the Illinois Municipal Retirement Fund early retirement
incentive program as provided in Section 7-141.1 of the
Illinois Pension Code. The early retirement incentive program
shall take effect on (date).
    (2) In order to help achieve a true cost savings, a person
who retires under the early retirement incentive program shall
lose those incentives if he or she later accepts employment
with or enters into a personal services contract with any IMRF
employer in a position for which participation in IMRF is
required or is elected by the employee.
    (3) In order to utilize an early retirement incentive as a
budgeting tool, the (name of participating employer) will use
its best efforts either to limit the number of employees who
replace the employees who retire under the early retirement
program or to limit the salaries paid to the employees who
replace the employees who retire under the early retirement
program.
    (4) The effective date of each employee's retirement under
this early retirement program shall be set by (name of
employer) and shall be no earlier than the effective date of
the program and no later than one year after that effective
date; except that the employee may require that the retirement
date set by the employer be no later than the June 30 next
occurring after the effective date of the program and no
earlier than the date upon which the employee qualifies for
retirement.
    (5) To be eligible for the early retirement incentive
under this Section, the employee must have attained age 50 and
have at least 20 years of creditable service by his or her
retirement date.
    (6) The (clerk or secretary) shall promptly file a
certified copy of this resolution (ordinance) with the Board
of Trustees of the Illinois Municipal Retirement Fund.
CERTIFICATION
    I, (name), the (clerk or secretary) of the (name of
participating employer) of the County of (name), State of
Illinois, do hereby certify that I am the keeper of the books
and records of the (name of employer) and that the foregoing is
a true and correct copy of a resolution (ordinance) duly
adopted by the (governing body) at a meeting duly convened and
held on (date).
SEAL
(Signature of clerk or secretary)
 
    (c) To be eligible for the benefits provided under an
early retirement incentive program adopted under this Section,
a member must:
        (1) be a participating employee of this Fund who, on
    the effective date of the program, (i) is in active
    payroll status as an employee of a participating employer
    that has filed the required ordinance or resolution with
    the Board, (ii) is on layoff status from such a position
    with a right of re-employment or recall to service, (iii)
    is on a leave of absence from such a position, or (iv) is
    on disability but has not been receiving benefits under
    Section 7-146 or 7-150 for a period of more than 2 years
    from the date of application;
        (2) have never previously received a retirement
    annuity under this Article or under the Retirement Systems
    Reciprocal Act using service credit established under this
    Article;
        (3) (blank);
        (4) have at least 20 years of creditable service in
    the Fund by the date of retirement, without the use of any
    creditable service established under this Section;
        (5) have attained age 50 by the date of retirement if
    he or she is a Tier 1 regular employee or age 57 if he or
    she is a Tier 2 regular employee, without the use of any
    age enhancement received under this Section; and
        (6) be eligible to receive a retirement annuity under
    this Article by the date of retirement, for which purpose
    the age enhancement and creditable service established
    under this Section may be considered.
    (d) The employer shall determine the retirement date for
each employee participating in the early retirement program
adopted under this Section. The retirement date shall be no
earlier than the effective date of the program and no later
than one year after that effective date, except that the
employee may require that the retirement date set by the
employer be no later than the June 30 next occurring after the
effective date of the program and no earlier than the date upon
which the employee qualifies for retirement. The employer
shall give each employee participating in the early retirement
program at least 30 days written notice of the employee's
designated retirement date, unless the employee waives this
notice requirement.
    (e) An eligible person may establish up to 5 years of
creditable service under this Section. In addition, for each
period of creditable service established under this Section, a
person shall have his or her age at retirement deemed enhanced
by an equivalent period.
    The creditable service established under this Section may
be used for all purposes under this Article and the Retirement
Systems Reciprocal Act, except for the computation of final
rate of earnings and the determination of earnings, salary, or
compensation under this or any other Article of the Code.
    The age enhancement established under this Section may be
used for all purposes under this Article (including
calculation of the reduction imposed under subdivision
(a)1b(iv) of Section 7-142), except for purposes of a
reversionary annuity under Section 7-145 and any distributions
required because of age. The age enhancement established under
this Section may be used in calculating a proportionate
annuity payable by this Fund under the Retirement Systems
Reciprocal Act, but shall not be used in determining benefits
payable under other Articles of this Code under the Retirement
Systems Reciprocal Act.
    (f) For all creditable service established under this
Section, the member must pay to the Fund an employee
contribution consisting of the total employee contribution
rate in effect at the time the member purchases the service for
the plan in which the member was participating with the
employer at that time multiplied by the member's highest
annual salary rate used in the determination of the final rate
of earnings for retirement annuity purposes for each year of
creditable service granted under this Section. Contributions
for fractions of a year of service shall be prorated. Any
amounts that are disregarded in determining the final rate of
earnings under subdivision (d)(5) of Section 7-116 (the 125%
rule) shall also be disregarded in determining the required
contribution under this subsection (f).
    The employee contribution shall be paid to the Fund as
follows: If the member is entitled to a lump sum payment for
accumulated vacation, sick leave, or personal leave upon
withdrawal from service, the employer shall deduct the
employee contribution from that lump sum and pay the deducted
amount directly to the Fund. If there is no such lump sum
payment or the required employee contribution exceeds the net
amount of the lump sum payment, then the remaining amount due,
at the option of the employee, may either be paid to the Fund
before the annuity commences or deducted from the retirement
annuity in 24 equal monthly installments.
    (g) An annuitant who has received any age enhancement or
creditable service under this Section and thereafter accepts
employment with or enters into a personal services contract
with an employer under this Article thereby forfeits that age
enhancement and creditable service; except that this
restriction does not apply to (1) service in an elective
office, so long as the annuitant does not participate in this
Fund with respect to that office, (2) a person appointed as an
officer under subsection (f) of Section 3-109 of this Code,
and (3) a person appointed as an auxiliary police officer
pursuant to Section 3.1-30-5 of the Illinois Municipal Code. A
person forfeiting early retirement incentives under this
subsection (i) must repay to the Fund that portion of the
retirement annuity already received which is attributable to
the early retirement incentives that are being forfeited, (ii)
shall not be eligible to participate in any future early
retirement program adopted under this Section, and (iii) is
entitled to a refund of the employee contribution paid under
subsection (f). The Board shall deduct the required repayment
from the refund and may impose a reasonable payment schedule
for repaying the amount, if any, by which the required
repayment exceeds the refund amount.
    (h) The additional unfunded liability accruing as a result
of the adoption of a program of early retirement incentives
under this Section by an employer shall be amortized over a
period of 10 years beginning on January 1 of the second
calendar year following the calendar year in which the latest
date for beginning to receive a retirement annuity under the
program (as determined by the employer under subsection (d) of
this Section) occurs; except that the employer may provide for
a shorter amortization period (of no less than 5 years) by
adopting an ordinance or resolution specifying the length of
the amortization period and submitting a certified copy of the
ordinance or resolution to the Fund no later than 6 months
after the effective date of the program. An employer, at its
discretion, may accelerate payments to the Fund.
    An employer may provide more than one early retirement
incentive program for its employees under this Section.
However, an employer that has provided an early retirement
incentive program for its employees under this Section may not
provide another early retirement incentive program under this
Section until the liability arising from the earlier program
has been fully paid to the Fund.
(Source: P.A. 102-210, eff. 1-1-22.)
 
    Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text
that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 5/13/2022