Public Act 90-0576 of the 90th General Assembly
Public Act 90-0576
SB1270 Enrolled LRB9008486EGfg
AN ACT to amend certain Acts in relation to pensions.
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 4-106, 4-107, 4-118, 15-106, 15-107,
15-136, 15-154, 15-155, 15-157, 15-158.2, and 15-181 as
follows:
(40 ILCS 5/4-106) (from Ch. 108 1/2, par. 4-106)
Sec. 4-106. Firefighter, firefighters. "Firefighter,
firefighters":
(a) In municipalities which have adopted Division 1 of
Article 10 of the Illinois Municipal Code, any person
employed in the municipality's fire service as a firefighter,
fire engineer, marine engineer, fire pilot, bomb technician
or scuba diver; and in any of these positions where such
person's duties also include those of a firefighter as
classified by the Civil Service Commission of that city, and
whose duty is to participate in the work of controlling and
extinguishing fires at the location of any such fires.; and
(b) In municipalities which are subject to Division 2.1
of Article 10 of the Illinois Municipal Code, any person
employed by a city in its fire service as a firefighter, fire
engineer, marine engineer, fire pilot, bomb technician, or
scuba diver; and, in any of these positions whose duties also
include those of a firefighter and are certified in the same
manner as a firefighter in that city.; and
(c) In municipalities which are subject to neither
Division 1 nor Division 2.1 of Article 10 of the Illinois
Municipal Code, any person who would have been included as a
firefighter under sub-paragraph (a) or (b) above except that
he served as a de facto and not as a de jure firefighter.
(d) Notwithstanding the other provisions of this
Section, "firefighter" does not include any person who is
actively participating in the State Universities Retirement
System under subsection (h) of Section 15-107 with respect to
the employment for which he or she is a participating
employee in that System.
(e) This amendatory Act of 1977 does not affect persons
covered by this Article prior to September 22, 1977.
(Source: P.A. 83-1440.)
(40 ILCS 5/4-107) (from Ch. 108 1/2, par. 4-107)
Sec. 4-107. Qualifications.
(a) A firefighter who has not contributed to the fund
during the entire period of service, to be entitled to the
benefits of this Article, must contribute to the fund the
amount he or she would have paid had deductions been made
from his or her salary during the entire period of his or her
creditable service.
(b) Any person appointed as a firefighter in a
municipality shall, within 3 months after receiving his or
her first appointment and within 3 months after any
reappointment make written application to the board to come
under the provisions of this Article.
(c) A person otherwise qualified to participate who was
excluded from participation by reason of the age or fitness
requirements removed by this amendatory Act of 1995 may elect
to participate by making a written application to the Board
before July 1, 1996. Persons so electing shall begin
participation on the first day of the month following the
month in which the application is received by the Board.
These persons may also elect to establish creditable service
for periods of employment as a firefighter during which they
did not participate by paying into the pension fund, before
January 1, 1997, the amount that the person would have
contributed had deductions from salary been made for this
purpose at the time the service was rendered, together with
interest thereon at 6% per annum, compounded annually, from
the time the service was rendered until the date of payment.
(d) A person described in subsection (h) of Section
15-107 shall not participate in any pension fund established
under this Article with respect to employment for which he or
she is a participating employee in the State Universities
Retirement System.
(Source: P.A. 89-52, eff. 6-30-95.)
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
Sec. 4-118. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions
from the salaries or wages of firefighters and revenues
available from other sources, will equal a sum sufficient to
meet the annual actuarial requirements of the pension fund,
as determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or municipality. For the purposes of this
Section, the annual actuarial requirements of the pension
fund are equal to (1) the normal cost of the pension fund, or
17.5% of the salaries and wages to be paid to firefighters
for the year involved, whichever is greater, plus (2) the
annual amount necessary to amortize the fund's unfunded
accrued liabilities over a period of 40 years from July 1,
1993, as annually updated and determined by an enrolled
actuary employed by the Illinois Department of Insurance or
by an enrolled actuary retained by the pension fund or the
municipality. The amount to be applied towards the
amortization of the unfunded accrued liability in any year
shall not be less than the annual amount required to amortize
the unfunded accrued liability, including interest, as a
level percentage of payroll over the number of years
remaining in the 40 year amortization period.
(b) The tax shall be levied and collected in the same
manner as the general taxes of the municipality, and shall be
in addition to all other taxes now or hereafter authorized to
be levied upon all property within the municipality, and in
addition to the amount authorized to be levied for general
purposes, under Section 8-3-1 of the Illinois Municipal Code
or under Section 14 of the Fire Protection District Act. The
tax shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the municipality (or,
in the case of amounts added to the tax levy under subsection
(f), used by the municipality to pay the employer
contributions required under subsection (b-1) of Section
15-155 of this Code).
(c) The board shall make available to the membership and
the general public for inspection and copying at reasonable
times the most recent Actuarial Valuation Balance Sheet and
Tax Levy Requirement issued to the fund by the Department of
Insurance.
(d) The firefighters' pension fund shall consist of the
following moneys which shall be set apart by the treasurer of
the municipality: (1) all moneys derived from the taxes
levied hereunder; (2) contributions by firefighters as
provided under Section 4-118.1; (3) all rewards in money,
fees, gifts, and emoluments that may be paid or given for or
on account of extraordinary service by the fire department or
any member thereof, except when allowed to be retained by
competitive awards; and (4) any money, real estate or
personal property received by the board.
(e) For the purposes of this Section, "enrolled actuary"
means an actuary: (1) who is a member of the Society of
Actuaries or the American Academy of Actuaries; and (2) who
is enrolled under Subtitle C of Title III of the Employee
Retirement Income Security Act of 1974, or who has been
engaged in providing actuarial services to one or more public
retirement systems for a period of at least 3 years as of
July 1, 1983.
(f) The corporate authorities of a municipality that
employs a person who is described in subdivision (d) of
Section 4-106 may add to the tax levy otherwise provided for
in this Section an amount equal to the projected cost of the
employer contributions required to be paid by the
municipality to the State Universities Retirement System
under subsection (b-1) of Section 15-155 of this Code.
(Source: P.A. 87-1265.)
(40 ILCS 5/15-106) (from Ch. 108 1/2, par. 15-106)
Sec. 15-106. Employer. "Employer": The University of
Illinois, Southern Illinois University, Chicago State
University, Eastern Illinois University, Governors State
University, Illinois State University, Northeastern Illinois
University, Northern Illinois University, Western Illinois
University, the State Board of Higher Education, the Illinois
Mathematics and Science Academy, the State Geological Survey
Division of the Department of Natural Resources, the State
Natural History Survey Division of the Department of Natural
Resources, the State Water Survey Division of the Department
of Natural Resources, the Waste Management and Research
Center of the Department of Natural Resources, the University
Civil Service Merit Board, the Board of Trustees of the State
Universities Retirement System, the Illinois Community
College Board, State Community College of East St. Louis,
community college boards, any association of community
college boards organized under Section 3-55 of the Public
Community College Act, the Board of Examiners established
under the Illinois Public Accounting Act, and, only during
the period for which employer contributions required under
Section 15-155 are paid, the following organizations: the
alumni associations, the foundations and the athletic
associations which are affiliated with the universities and
colleges included in this Section as employers. A department
as defined in Section 14-103.04 is an employer for any person
appointed by the Governor under the Civil Administrative Code
of Illinois who is a participating employee as defined in
Section 15-109. The cities of Champaign and Urbana shall be
considered employers, but only during the period for which
contributions are required to be made under subsection (b-1)
of Section 15-155 and only with respect to individuals
described in subsection (h) of Section 15-107.
(Source: P.A. 89-4, eff. 1-1-96; 89-445, eff. 2-7-96; 90-490,
eff. 8-17-97; 90-511, eff. 8-22-97; revised 11-17-97.)
(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;
(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.
(Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97.)
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
Sec. 15-136. Retirement annuities - Amount.
(a) The amount of the retirement 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. However, 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 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 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, 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 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, 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. The retirement annuity for
all other service shall be computed under Rule 1, payable
under the portable retirement benefit program pursuant to the
provisions of Section 15-136.4, if applicable.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is
an employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of
the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee
of the University of Illinois in a position other than
police officer or firefighter, from the date of that
transfer until the employee's next termination of service
with the University of Illinois.
(b) 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, and 4 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, or Rule 4, contained in this Section, multiplied
by the number of full months which elapsed from the date the
retirement annuity payments began to January 1, 1972, plus
0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter
during the annuitant's life of 3% of the monthly annuity
provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
this Section. The change made under this subsection by P.A.
81-970 is effective January 1, 1980 and applies to each
annuitant whose status as an employee terminates before or
after that date.
Beginning January 1, 1990, all automatic annual increases
payable under this Section shall be calculated as a
percentage of the total annuity payable at the time of the
increase, including all increases previously granted under
this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard
to whether status as an employee terminated before that date.
(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. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; revised 8-21-97.)
(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, 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) Every person who becomes an eligible employee as
described in Section 15-158.2 a participating employee after
the date on which his or her employer first offers an
optional retirement program under Section 15-158.2 may elect
within 60 days of becoming a participant to have any refund
calculated pursuant to subsection (a-2) by forgoing all
survivors insurance benefits to which the person's survivors
would otherwise be entitled under this Article. This
election is irrevocable and may be made by filing an election
with the system on such form as the Executive Director shall
prescribe.
Each person who is an eligible employee as described in
Section 15-158.2 a participating employee on the date on
which his or her employer first offers an optional retirement
program under Section 15-158.2 shall have a one-time option
to elect to have his or her refund calculated pursuant to
subsection (a-2), by forgoing all survivors insurance
benefits to which the person's survivors would otherwise be
entitled under this Article. The election will not be
effective until one year after the election is filed with the
system. This election is irrevocable and may be made by
filing an election with the system, on such form as the
Executive Director shall prescribe, within one year after the
date on which his or her employer first offers an optional
retirement program under Section 15-158.2.
A person may make the one-time irrevocable election
authorized under this Section or the election authorized
under Section 15-158.2(g), but may not make both elections.
Any person interested in electing the portable retirement
benefit program provided under this Section and Section
15-136.4 must be given a consultation with the State
Universities Retirement System before making that election.
(a-2) The refund elected under 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. 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 refund 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.
(c) If a participant has made survivors insurance
contributions, but has no survivors insurance beneficiary
upon retirement, he or she shall be entitled to a refund of
the accumulated survivors insurance contributions, or to an
additional annuity the value of which is equal to the
accumulated survivors insurance contributions.
(d) A participant, upon application, is entitled to a
refund of his or her accumulated additional contributions
except those covering the cost of the annual increase in the
retirement annuity provided under Section 15-136. 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, 2, 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 or 4
of Section 15-136 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. 90-448, eff. 8-16-97.)
(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
Sec. 15-155. Employer contributions.
(a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded
basis in accordance with actuarial recommendations.
The Board shall determine the amount of State
contributions required for each fiscal year on the basis of
the actuarial tables and other assumptions adopted by the
Board and the recommendations of the actuary, using the
formula in subsection (a-1).
(a-1) For State fiscal years 2011 through 2045, the
minimum contribution to the System to be made by the State
for each fiscal year shall be an amount determined by the
System to be sufficient to bring the total assets of the
System up to 90% of the total actuarial liabilities of the
System by the end of State fiscal year 2045. In making these
determinations, the required State contribution shall be
calculated each year as a level percentage of payroll over
the years remaining to and including fiscal year 2045 and
shall be determined under the projected unit credit actuarial
cost method.
For State fiscal years 1996 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual
increments so that by State fiscal year 2011, the State is
contributing at the rate required under this Section.
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.
(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.
(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.
(Source: P.A. 88-593, eff. 8-22-94; 89-602, eff. 8-2-96.)
(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
Sec. 15-157. Employee Contributions.
(a) Each participating employee shall make contributions
towards the retirement annuity of each payment of earnings
applicable to employment under this system on and after the
date of becoming a participant as follows: Prior to
September 1, 1949, 3 1/2% of earnings; from September 1, 1949
to August 31, 1955, 5%; from September 1, 1955 to August 31,
1969, 6%; from September 1, 1969, 6 1/2%. These
contributions are to be considered as normal contributions
for purposes of this Article.
Each participant who is a police officer or firefighter
shall make normal contributions of 8% of each payment of
earnings applicable to employment as a police officer or
firefighter under this system on or after September 1, 1981,
unless he or she files with the board within 60 days after
the effective date of this amendatory Act of 1991 or 60 days
after the board receives notice that he or she is employed as
a police officer or firefighter, whichever is later, a
written notice waiving the retirement formula provided by
Rule 4 of Section 15-136. This waiver shall be irrevocable.
If a participant had met the conditions set forth in Section
15-132.1 prior to the effective date of this amendatory Act
of 1991 but failed to make the additional normal
contributions required by this paragraph, he or she may elect
to pay the additional contributions plus compound interest at
the effective rate. If such payment is received by the
board, the service shall be considered as police officer
service in calculating the retirement annuity under Rule 4 of
Section 15-136. While performing service described in clause
(i) or (ii) of Rule 4 of Section 15-136, a participating
employee shall be deemed to be employed as a firefighter for
the purpose of determining the rate of employee contributions
under this Section.
(b) Starting September 1, 1969, each participating
employee shall make additional contributions of 1/2 of 1% of
earnings to finance a portion of the cost of the annual
increases in retirement annuity provided under Section
15-136.
(c) Each participating employee shall make additional
contributions of 1% of earnings applicable under this system
on and after August 1, 1959. The contribution made under
this subsection shall be used to finance survivors insurance
benefits, unless the participant has made an election under
Section 15-154(a-1), in which case the contribution made
under this subsection shall be used to finance the benefits
obtained under that election. Contributions in excess of $80
during any fiscal year beginning before August 31, 1969 and
in excess of $120 during any fiscal year thereafter until
September 1, 1971 shall be considered as additional
contributions for purposes of this Article.
(d) If the board by board rule so permits and subject to
such conditions and limitations as may be specified in its
rules, a participant may make other additional contributions
of such percentage of earnings or amounts as the participant
shall elect in a written notice thereof received by the
board.
(e) That fraction of a participant's total accumulated
normal contributions, the numerator of which is equal to the
number of years of service in excess of that which is
required to qualify for the maximum retirement annuity, and
the denominator of which is equal to the total service of the
participant, shall be considered as accumulated additional
contributions. The determination of the applicable maximum
annuity and the adjustment in contributions required by this
provision shall be made as of the date of the participant's
retirement.
(f) Notwithstanding the foregoing, a participating
employee shall not be required to make contributions under
this Section after the date upon which continuance of such
contributions would otherwise cause his or her retirement
annuity to exceed the maximum retirement annuity as specified
in clause (1) of subsection (c) of Section 15-136.
(g) A participating employee may make contributions for
the purchase of service credit under this Article.
(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97;
90-448, eff. 8-16-97; 90-511, eff. 8-22-97; revised
11-14-97.)
(40 ILCS 5/15-158.2)
Sec. 15-158.2. Optional retirement program for
educational employees.
(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 an alternative
retirement program for eligible employees who elect not to
participate in the other retirement programs provided under
this Article.
(b) Definitions. For the purposes of this Section,
"eligible employee" means an employee (other than an employee
performing service described in clause (i) or (ii) of Rule 4
of Section 15-136) who is eligible to participate in the
State Universities Retirement System and who does not have
sufficient age and service to qualify for a retirement
annuity under Section 15-135. A "currently eligible
employee" is an employee who becomes an eligible employee on
the effective date of the optional retirement program
established by the employee's employer. A "newly eligible
employee" is an employee who becomes an eligible employee
after the effective date of the optional retirement program
established by the employee's employer.
(c) Program. Each employer subject to this Article may
elect to establish an optional retirement program under this
Section for the eligible employees whom it employs. The
optional retirement program shall provide retirement benefits
for participating employees through the purchase of annuity
contracts, either fixed or variable or a combination thereof,
through the purchase of mutual funds, or through both and
shall also provide for disability benefits.
The State Universities Retirement System shall be the
plan sponsor for the program. Consistent with its fiduciary
duty to the participants and beneficiaries of the program,
the Board of Trustees of the System may delegate aspects of
program administration as it sees fit to companies authorized
to do business in this State, to the employers, or to a
combination of both.
The plan must be qualified under the Internal Revenue
Code of 1986.
(d) Proposals. The System, in consultation with the
employers, shall solicit proposals to participate in the
program from insurance and annuity companies and mutual fund
companies 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.
An employer that elects to offer an optional retirement
program under subsection (c) may only select for
participation in the program 2 or more of the companies
approved by the Board of Trustees of the System. The System,
in consultation with the employers, shall periodically review
each approved company; a company may continue to participate
in the program only so long as it continues to be an approved
company under contract with the Board.
(e) System Conflict of Interest. In order to preclude
any conflict of interest by the System, only insurance and
annuity companies and mutual fund companies that are
authorized to do business in this State may be approved, in
accordance with the procedures of subsection (d), to
participate in this program and offer investment options for
program participants.
(f) Account Balance Transfers. Employees who are
participating in the program must be allowed to transfer
their account balances from the investment options offered by
one of the companies selected by the employer to the
investment options offered by another company so selected,
subject to applicable contractual provisions.
(g) Participation. Any eligible employee may elect to
participate in the optional retirement program offered by the
employer under subsection (c). The election must be made in
writing and in the manner prescribed by the System. A
currently eligible employee must make this election within
one year after the effective date of the employer's optional
retirement program. A newly eligible employee must make this
election within 60 days after becoming an eligible employee.
A person may make the one-time irrevocable election
authorized under this Section or the election authorized
under Section 15-154(a-1), but may not make both elections.
The employer shall not remit contributions on behalf of a
newly eligible employee to the State Universities Retirement
System until the 60-day period has run unless an election by
the employee has been made earlier. Any eligible employee
interested in electing the optional retirement program
provided under this Section must be given a consultation with
the State Universities Retirement System before making that
election.
Participation in the optional retirement program shall
begin on the first day of the first pay period following the
date of election, but no earlier than January 1, 1998. The
employee's participation in any other retirement program
administered by the System under this Article shall terminate
on the date that participation in the optional retirement
program begins, and the employee shall thereby be deemed to
have elected to receive a refund of contributions as provided
in Section 15-154, except that such deemed refund shall
include interest at the effective rate for the respective
years, and except that any funds which would have been
received shall instead be transferred directly to the
optional retirement program as a tax free transfer in
accordance with Internal Revenue Service guidelines.
Notwithstanding any other provision of this Code, 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 optional
retirement program established under this Section.
An employee who has elected to participate in the
optional retirement program 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, unless the optional retirement program is
terminated in accordance with subsection (i).
Participation in the optional retirement program under
this Section shall constitute membership in the State
Universities Retirement System, although a participant under
this Section shall not be entitled to receive any benefits
under any other provisions of Article 15 or of Article 20.
An employee who receives a disability benefit or a retirement
benefit under this Section or an employee who receives a lump
sum distribution from a mutual fund company under this
Section and uses the lump sum to purchase an annuity shall be
considered an employee or an annuitant under Article 15 for
purposes of the State Employees Group Insurance Act of 1971.
Participation in the optional retirement program under this
Section creates a contractual relationship with respect to
the investment of the employee's account balance between the
employee and the company providing the investment options for
the employee's account balance. Participation does not
create a contractual relationship between the employee and
the System or between the employee and his or her employer.
(h) Contributions. The contribution rate for employees
participating in the optional retirement program under this
Section shall be equal to the employee contribution rate for
other participants in the System. This required contribution
may be made as an "employer pick-up" under Section 414(h) of
the Internal Revenue Code of 1986 or any successor Section.
Any employee participating in the System or who elects to
participate in the optional retirement program shall continue
to have the employer "pick-up" the contribution. However,
amounts picked up after the election of the optional
retirement program shall be remitted to the optional
retirement plan. In no event shall an employee have an
option of receiving these amounts in cash. The program shall
provide for employer contributions at a rate of no more than
7.6% of the participating employee's salary. The optional
retirement program shall be funded by contributions from
employees participating in the program and employer
contributions as required by the plan. The plan shall be
funded in a manner consistent with the requirements of
Internal Revenue Code Section 412, and regulations
promulgated thereunder, as that Section applies to money
purchase plans.
The State of Illinois shall make contributions by
appropriations to the System of the employer contributions
required for employees who participate in the optional
retirement program 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 insurance and annuity and mutual fund
companies participating in the optional retirement program
under subsection (d) 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.
The contributions and interest thereon, and any benefits
based upon them, shall be treated as provided in the funding
vehicles for this plan. An amount of up to 1% of each
participating employee's salary shall be taken from the
employer contribution to the optional retirement program and
shall be contributed, on the employee's behalf, to a plan
which the System offers to provide for disability benefits.
(i) Termination. An optional retirement program
authorized under this Section may be terminated by the
employer, subject to the terms of any relevant contracts, and
the employer shall have no obligation to reestablish an
optional retirement program under this Section. This Section
does not create a right to continued participation in any
optional retirement program set up by an employer under this
Section. If an optional retirement program 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. Employer contributions shall be vested
after five years of employment. If an employee terminates
employment prior to completing five years of service, the
employee shall be entitled to a benefit in accordance with
the terms of the employer's retirement plan which is based on
the accumulation value attributable to the employee's
contributions and any investment return thereon. Benefits
for employees who terminate with at least five years of
service shall be in accordance with the terms of the optional
retirement plan and based on the accumulation value
attributable to both the employer and the employee's
contributions and any investment return thereon. Any
employer contributions which are forfeited shall be held in
escrow by the company investing those contributions and shall
be used to reduce the next premium payment due from the
employer.
(Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97.)
(40 ILCS 5/15-181) (from Ch. 108 1/2, par. 15-181)
Sec. 15-181. Duties of employers.
(a) Each employer, in preparing payroll vouchers for
participating employees, shall indicate, in addition to other
information: (1) the amount of employee contributions and
survivors insurance contributions required under Section
15-157, (2) the gross earnings payable to each employee, and
(3) the total of all contributions required under Section
15-157. An additional certified copy of each payroll
certified by each employer shall be forwarded along with the
original payroll to the Director of Central Management
Services, State Comptroller, and other officer receiving the
original certified payroll for transmittal to the board.
(b) Each employer, in drawing warrants or checks against
trust or federal funds for items of salary on payroll
vouchers certified by employers, shall draw such warrants or
checks to participating employees for the amount of cash
salary or wages specified for the period, and shall draw a
warrant or check to this system for the total of the
contributions required under Section 15-157. The warrant or
check drawn to this system, together with the additional copy
of the payroll supplied by the employer, shall be transmitted
immediately to the board.
(c) The City of Champaign and the City of Urbana, as
employers of persons who participate in this System pursuant
to subsection (h) of Section 15-107, shall each collect and
transmit to the System from each payroll the employee
contributions required under Section 15-157, together with
such payroll documentation as the Board may require, at the
time that the payroll is paid.
(Source: P.A. 83-1440.)
Section 90. The State Mandates Act is amended by adding
Section 8.22 as follows:
(30 ILCS 805/8.22 new)
Sec. 8.22. 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 1998.
Section 99. Effective date. This Act takes effect upon
becoming law.