101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2910

 

Introduced , by Rep. Robert Martwick

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the State Universities and Downstate Teacher Articles of the Illinois Pension Code. Provides that a Tier 1 member who is at least 55 years of age and meets other specified requirements may elect to receive an age enhancement and additional creditable service in an amount equal to the applicable minimum age for an undiscounted retirement annuity (based on the amount of creditable service the member has on the effective date of the election) minus the member's actual age on the effective date of the election and additional creditable service equal to the amount of the age enhancement. Provides that the amount of the age enhancement and creditable service granted may not exceed 5 years. Provides that a member who elects the age enhancement and additional creditable service shall have any automatic annual increase in his or her retirement annuity and survivor's annuity payable to his or her beneficiary calculated at 3% or the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u, whichever is less, of the originally granted annuity. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming changes. Effective immediately.


LRB101 08042 RPS 53104 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2910LRB101 08042 RPS 53104 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 15-136, 15-136.4, 15-145, 15-185.5, 15-185.6, 15-198,
616-133.1, 16-143.1, 16-190.5, 16-190.6, and 16-203 and by
7adding Sections 15-136.5 and 16-133.6 as follows:
 
8    (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 15-136. Retirement annuities - Amount. The provisions
12of this Section 15-136 apply only to those participants who are
13participating in the traditional benefit package or the
14portable benefit package and do not apply to participants who
15are participating in the self-managed plan.
16    (a) The amount of a participant's retirement annuity,
17expressed in the form of a single-life annuity, shall be
18determined by whichever of the following rules is applicable
19and provides the largest annuity:
20    Rule 1: The retirement annuity shall be 1.67% of final rate
21of earnings for each of the first 10 years of service, 1.90%
22for each of the next 10 years of service, 2.10% for each year
23of service in excess of 20 but not exceeding 30, and 2.30% for

 

 

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1each year in excess of 30; or for persons who retire on or
2after January 1, 1998, 2.2% of the final rate of earnings for
3each year of service.
4    Rule 2: The retirement annuity shall be the sum of the
5following, determined from amounts credited to the participant
6in accordance with the actuarial tables and the effective rate
7of interest in effect at the time the retirement annuity
8begins:
9        (i) the normal annuity which can be provided on an
10    actuarially equivalent basis, by the accumulated normal
11    contributions as of the date the annuity begins;
12        (ii) an annuity from employer contributions of an
13    amount equal to that which can be provided on an
14    actuarially equivalent basis from the accumulated normal
15    contributions made by the participant under Section
16    15-113.6 and Section 15-113.7 plus 1.4 times all other
17    accumulated normal contributions made by the participant;
18    and
19        (iii) the annuity that can be provided on an
20    actuarially equivalent basis from the entire contribution
21    made by the participant under Section 15-113.3.
22    With respect to a police officer or firefighter who retires
23on or after August 14, 1998, the accumulated normal
24contributions taken into account under clauses (i) and (ii) of
25this Rule 2 shall include the additional normal contributions
26made by the police officer or firefighter under Section

 

 

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115-157(a).
2    The amount of a retirement annuity calculated under this
3Rule 2 shall be computed solely on the basis of the
4participant's accumulated normal contributions, as specified
5in this Rule and defined in Section 15-116. Neither an employee
6or employer contribution for early retirement under Section
715-136.2 nor any other employer contribution shall be used in
8the calculation of the amount of a retirement annuity under
9this Rule 2.
10    This amendatory Act of the 91st General Assembly is a
11clarification of existing law and applies to every participant
12and annuitant without regard to whether status as an employee
13terminates before the effective date of this amendatory Act.
14    This Rule 2 does not apply to a person who first becomes an
15employee under this Article on or after July 1, 2005.
16    Rule 3: The retirement annuity of a participant who is
17employed at least one-half time during the period on which his
18or her final rate of earnings is based, shall be equal to the
19participant's years of service not to exceed 30, multiplied by
20(1) $96 if the participant's final rate of earnings is less
21than $3,500, (2) $108 if the final rate of earnings is at least
22$3,500 but less than $4,500, (3) $120 if the final rate of
23earnings is at least $4,500 but less than $5,500, (4) $132 if
24the final rate of earnings is at least $5,500 but less than
25$6,500, (5) $144 if the final rate of earnings is at least
26$6,500 but less than $7,500, (6) $156 if the final rate of

 

 

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1earnings is at least $7,500 but less than $8,500, (7) $168 if
2the final rate of earnings is at least $8,500 but less than
3$9,500, and (8) $180 if the final rate of earnings is $9,500 or
4more, except that the annuity for those persons having made an
5election under Section 15-154(a-1) shall be calculated and
6payable under the portable retirement benefit program pursuant
7to the provisions of Section 15-136.4.
8    Rule 4: A participant who is at least age 50 and has 25 or
9more years of service as a police officer or firefighter, and a
10participant who is age 55 or over and has at least 20 but less
11than 25 years of service as a police officer or firefighter,
12shall be entitled to a retirement annuity of 2 1/4% of the
13final rate of earnings for each of the first 10 years of
14service as a police officer or firefighter, 2 1/2% for each of
15the next 10 years of service as a police officer or
16firefighter, and 2 3/4% for each year of service as a police
17officer or firefighter in excess of 20. The retirement annuity
18for all other service shall be computed under Rule 1. A Tier 2
19member is eligible for a retirement annuity calculated under
20Rule 4 only if that Tier 2 member meets the service
21requirements for that benefit calculation as prescribed under
22this Rule 4 in addition to the applicable age requirement under
23subsection (a-5) of Section 15-135.
24    For purposes of this Rule 4, a participant's service as a
25firefighter shall also include the following:
26        (i) service that is performed while the person is an

 

 

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1    employee under subsection (h) of Section 15-107; and
2        (ii) in the case of an individual who was a
3    participating employee employed in the fire department of
4    the University of Illinois's Champaign-Urbana campus
5    immediately prior to the elimination of that fire
6    department and who immediately after the elimination of
7    that fire department transferred to another job with the
8    University of Illinois, service performed as an employee of
9    the University of Illinois in a position other than police
10    officer or firefighter, from the date of that transfer
11    until the employee's next termination of service with the
12    University of Illinois.
13    (b) For a Tier 1 member, the retirement annuity provided
14under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
15month the participant is under age 60 at the time of
16retirement. However, this reduction shall not apply in the
17following cases:
18        (1) For a disabled participant whose disability
19    benefits have been discontinued because he or she has
20    exhausted eligibility for disability benefits under clause
21    (6) of Section 15-152;
22        (2) For a participant who has at least the number of
23    years of service required to retire at any age under
24    subsection (a) of Section 15-135; or
25        (3) For that portion of a retirement annuity which has
26    been provided on account of service of the participant

 

 

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1    during periods when he or she performed the duties of a
2    police officer or firefighter, if these duties were
3    performed for at least 5 years immediately preceding the
4    date the retirement annuity is to begin.
5    (b-5) The retirement annuity of a Tier 2 member who is
6retiring after attaining age 62 with at least 10 years of
7service credit shall be reduced by 1/2 of 1% for each full
8month that the member's age is under age 67.
9    (c) The maximum retirement annuity provided under Rules 1,
102, 4, and 5 shall be the lesser of (1) the annual limit of
11benefits as specified in Section 415 of the Internal Revenue
12Code of 1986, as such Section may be amended from time to time
13and as such benefit limits shall be adjusted by the
14Commissioner of Internal Revenue, and (2) 80% of final rate of
15earnings.
16    (d) A Tier 1 member whose status as an employee terminates
17after August 14, 1969 shall receive automatic increases in his
18or her retirement annuity as follows:
19    Effective January 1 immediately following the date the
20retirement annuity begins, the annuitant shall receive an
21increase in his or her monthly retirement annuity of 0.125% of
22the monthly retirement annuity provided under Rule 1, Rule 2,
23Rule 3, or Rule 4 contained in this Section, multiplied by the
24number of full months which elapsed from the date the
25retirement annuity payments began to January 1, 1972, plus
260.1667% of such annuity, multiplied by the number of full

 

 

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1months which elapsed from January 1, 1972, or the date the
2retirement annuity payments began, whichever is later, to
3January 1, 1978, plus 0.25% of such annuity multiplied by the
4number of full months which elapsed from January 1, 1978, or
5the date the retirement annuity payments began, whichever is
6later, to the effective date of the increase.
7    The annuitant shall receive an increase in his or her
8monthly retirement annuity on each January 1 thereafter during
9the annuitant's life of 3% of the monthly annuity provided
10under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
11Section. The change made under this subsection by P.A. 81-970
12is effective January 1, 1980 and applies to each annuitant
13whose status as an employee terminates before or after that
14date.
15    Beginning January 1, 1990, all automatic annual increases
16payable under this Section shall be calculated as a percentage
17of the total annuity payable at the time of the increase,
18including all increases previously granted under this Article.
19    The change made in this subsection by P.A. 85-1008 is
20effective January 26, 1988, and is applicable without regard to
21whether status as an employee terminated before that date.
22    (d-1) Notwithstanding any other provision of this Article
23to the contrary, the automatic annual increase in retirement
24annuity for a Tier 1 member who elects the early retirement
25incentive under Section 15-136.5 shall be calculated at 3% or
26the annual unadjusted percentage increase (but not less than

 

 

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1zero) in the consumer price index-u for the 12 months ending
2with the September preceding each November 1, whichever is
3less, of the originally granted retirement annuity. If the
4annual unadjusted percentage change in the consumer price
5index-u for the 12 months ending with the September preceding
6each November 1 is zero or there is a decrease, then the
7annuity shall not be increased.
8    (d-5) A retirement annuity of a Tier 2 member shall receive
9annual increases on the January 1 occurring either on or after
10the attainment of age 67 or the first anniversary of the
11annuity start date, whichever is later. Each annual increase
12shall be calculated at 3% or one half the annual unadjusted
13percentage increase (but not less than zero) in the consumer
14price index-u for the 12 months ending with the September
15preceding each November 1, whichever is less, of the originally
16granted retirement annuity. If the annual unadjusted
17percentage change in the consumer price index-u for the 12
18months ending with the September preceding each November 1 is
19zero or there is a decrease, then the annuity shall not be
20increased.
21    (e) If, on January 1, 1987, or the date the retirement
22annuity payment period begins, whichever is later, the sum of
23the retirement annuity provided under Rule 1 or Rule 2 of this
24Section and the automatic annual increases provided under the
25preceding subsection or Section 15-136.1, amounts to less than
26the retirement annuity which would be provided by Rule 3, the

 

 

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1retirement annuity shall be increased as of January 1, 1987, or
2the date the retirement annuity payment period begins,
3whichever is later, to the amount which would be provided by
4Rule 3 of this Section. Such increased amount shall be
5considered as the retirement annuity in determining benefits
6provided under other Sections of this Article. This paragraph
7applies without regard to whether status as an employee
8terminated before the effective date of this amendatory Act of
91987, provided that the annuitant was employed at least
10one-half time during the period on which the final rate of
11earnings was based.
12    (f) A participant is entitled to such additional annuity as
13may be provided on an actuarially equivalent basis, by any
14accumulated additional contributions to his or her credit.
15However, the additional contributions made by the participant
16toward the automatic increases in annuity provided under this
17Section shall not be taken into account in determining the
18amount of such additional annuity.
19    (g) If, (1) by law, a function of a governmental unit, as
20defined by Section 20-107 of this Code, is transferred in whole
21or in part to an employer, and (2) a participant transfers
22employment from such governmental unit to such employer within
236 months after the transfer of the function, and (3) the sum of
24(A) the annuity payable to the participant under Rule 1, 2, or
253 of this Section (B) all proportional annuities payable to the
26participant by all other retirement systems covered by Article

 

 

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120, and (C) the initial primary insurance amount to which the
2participant is entitled under the Social Security Act, is less
3than the retirement annuity which would have been payable if
4all of the participant's pension credits validated under
5Section 20-109 had been validated under this system, a
6supplemental annuity equal to the difference in such amounts
7shall be payable to the participant.
8    (h) On January 1, 1981, an annuitant who was receiving a
9retirement annuity on or before January 1, 1971 shall have his
10or her retirement annuity then being paid increased $1 per
11month for each year of creditable service. On January 1, 1982,
12an annuitant whose retirement annuity began on or before
13January 1, 1977, shall have his or her retirement annuity then
14being paid increased $1 per month for each year of creditable
15service.
16    (i) On January 1, 1987, any annuitant whose retirement
17annuity began on or before January 1, 1977, shall have the
18monthly retirement annuity increased by an amount equal to 8¢
19per year of creditable service times the number of years that
20have elapsed since the annuity began.
21(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
2298-92, eff. 7-16-13.)
 
23    (40 ILCS 5/15-136.4)
24    Sec. 15-136.4. Retirement and Survivor Benefits Under
25Portable Benefit Package.

 

 

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1    (a) This Section 15-136.4 describes the form of annuity and
2survivor benefits available to a participant who has elected
3the portable benefit package and has completed the one-year
4waiting period required under subsection (e) of Section
515-134.5. For purposes of this Section, the term "eligible
6spouse" means the husband or wife of a participant to whom the
7participant is married on the date the participant's annuity
8payment period begins, provided however, that if the
9participant should die prior to the commencement of retirement
10annuity benefits, then "eligible spouse" means the husband or
11wife, if any, to whom the participant was married throughout
12the one-year period preceding the date of his or her death.
13    (b) This subsection (b) describes the normal form of
14annuity payable to a participant subject to this Section
1515-136.4. If the participant is unmarried on the date his or
16her annuity payment period begins, then the annuity payments
17shall be made in the form of a single-life annuity as described
18in Section 15-118. If the participant is married on the date
19his or her annuity payments commence, then the annuity payments
20shall be paid in the form of a qualified joint and survivor
21annuity that is the actuarial equivalent of the single-life
22annuity. Under the "qualified joint and survivor annuity", a
23reduced amount shall be paid to the participant for his or her
24lifetime and his or her eligible spouse, if surviving at the
25participant's death, shall be entitled to receive thereafter a
26lifetime survivorship annuity in a monthly amount equal to 50%

 

 

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1of the reduced monthly amount that was payable to the
2participant. The last payment of a qualified joint and survivor
3annuity shall be made as of the first day of the month in which
4the death of the survivor occurs.
5    (c) Instead of the normal form of annuity that would be
6paid under subsection (b), a participant may elect in writing
7within the 180-day period prior to the date his or her annuity
8payments commence to waive the normal form of annuity payment
9and receive an optional form of payment as described in
10subsection (h). If the participant is married and elects an
11optional form of payment under subsection (h) other than a
12joint and survivor annuity with the eligible spouse designated
13as the contingent annuitant, then such election shall require
14the consent of his or her eligible spouse in the manner
15described in subsection (d). At any time during the 180-day
16period preceding the date the participant's payment period
17begins, the participant may revoke the optional form of payment
18elected under this subsection (c) and reinstate coverage under
19the qualified joint and survivor annuity without the spouse's
20consent, but an election to revoke the optional form elected
21and elect a new optional form of payment or designate a
22different contingent annuitant shall not be effective without
23the eligible spouse's consent.
24    (d) The eligible spouse's consent to any election made
25pursuant to this Section that requires the eligible spouse's
26consent shall be in writing and shall acknowledge the effect of

 

 

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1the consent. In addition, the eligible spouse's signature on
2the written consent must be witnessed by a notary public. The
3eligible spouse's consent need not be obtained if the system is
4satisfied that there is no eligible spouse, that the eligible
5spouse cannot be located, or because of any other relevant
6circumstances. An eligible spouse's consent under this Section
7is valid only with respect to the specified optional form of
8payment and, if applicable, contingent annuitant designated by
9the participant. If the optional form of payment or the
10contingent annuitant is subsequently changed (other than by a
11revocation of the optional form of payment and reinstatement of
12the qualified joint and survivor annuity), a new consent by the
13eligible spouse is required. The eligible spouse's consent to
14an election made by a participant pursuant to this Section,
15once made, may not be revoked by the eligible spouse.
16    (e) Within a reasonable period of time preceding the date a
17participant's annuity commences, a participant shall be
18supplied with a written explanation of (1) the terms and
19conditions of the normal form single-life annuity and qualified
20joint and survivor annuity, (2) the participant's right to
21elect a single-life annuity or an optional form of payment
22under subsection (h) subject to his or her eligible spouse's
23consent, if applicable, and (3) the participant's right to
24reinstate coverage under the qualified joint and survivor
25annuity prior to his or her annuity commencement date by
26revoking an election of an optional form of payment under

 

 

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1subsection (h).
2    (f) If a married participant with at least 1.5 years of
3service dies prior to commencing retirement annuity payments
4and prior to taking a refund under Section 15-154, his or her
5eligible spouse is entitled to receive a pre-retirement
6survivor annuity, if there is not then in effect a waiver of
7the pre-retirement survivor annuity. The pre-retirement
8survivor annuity payable under this subsection shall be a
9monthly annuity payable for the eligible spouse's life,
10commencing as of the beginning of the month next following the
11later of the date of the participant's death or the date the
12participant would have first met the eligibility requirements
13for retirement, and continuing through the beginning of the
14month in which the death of the eligible spouse occurs. The
15monthly amount payable to the spouse under the pre-retirement
16survivor annuity shall be equal to the monthly amount that
17would be payable as a survivor annuity under the qualified
18joint and survivor annuity described in subsection (b) if: (1)
19in the case of a participant who dies on or after the date on
20which the participant has met the eligibility requirements for
21retirement, the participant had retired with an immediate
22qualified joint and survivor annuity on the day before the
23participant's date of death; or (2) in the case of a
24participant who dies before the earliest date on which the
25participant would have met the eligibility requirements for
26retirement age, the participant had separated from service on

 

 

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1the date of death, survived to the earliest retirement age
2based on service prior to his or her death, retired with an
3immediate qualified joint and survivor annuity at the earliest
4retirement age, and died on the day after the day on which the
5participant would have attained the earliest retirement age.
6    (g) A married participant who has not retired may elect at
7any time to waive the pre-retirement survivor annuity described
8in subsection (f). Any such election shall require the consent
9of the participant's eligible spouse in the manner described in
10subsection (d). A waiver of the pre-retirement survivor annuity
11shall increase the lump sum death benefit payable under
12subsection (b) of Section 15-141. Prior to electing any waiver
13of the pre-retirement survivor annuity, the participant shall
14be provided with a written explanation of (1) the terms and
15conditions of the pre-retirement survivor annuity and the death
16benefits payable from the system both with and without the
17pre-retirement survivor annuity, (2) the participant's right
18to elect a waiver of the pre-retirement survivor annuity
19coverage subject to his or her spouse's consent, and (3) the
20participant's right to reinstate pre-retirement survivor
21annuity coverage at any time by revoking a prior waiver of such
22coverage.
23    (h) By filing a timely election with the system, a
24participant who will be eligible to receive a retirement
25annuity under this Section may waive the normal form of annuity
26payment described in subsection (b), subject to obtaining the

 

 

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1consent of his or her eligible spouse, if applicable, and elect
2to receive any one of the following optional forms of payment:
3        (1) Joint and Survivor Annuity Options: The
4    participant may elect to receive a reduced annuity payable
5    for his or her life and to have a lifetime survivorship
6    annuity in a monthly amount equal to 50%, 75%, or 100% (as
7    elected by the participant) of that reduced monthly amount,
8    to be paid after the participant's death to his or her
9    contingent annuitant, if the contingent annuitant is alive
10    at the time of the participant's death.
11        (2) Single-Life Annuity Option (optional for married
12    participants). The participant may elect to receive a
13    single-life annuity payable for his or her life only.
14        (3) Lump sum retirement benefit. The participant may
15    elect to receive a lump sum retirement benefit that is
16    equal to the amount of a refund payable under Section
17    15-154(a-2).
18All joint and survivor annuity forms shall be in an amount that
19is the actuarial equivalent of the single-life annuity.
20    For the purposes of this Section, the term "contingent
21annuitant" means the beneficiary who is designated by a
22participant at the time the participant elects a joint and
23survivor annuity to receive the lifetime survivorship annuity
24in the event the beneficiary survives the participant at the
25participant's death.
26    (i) Under no circumstances may an option be elected,

 

 

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1changed, or revoked after the date the participant's retirement
2annuity commences.
3    (j) An election made pursuant to subsection (h) shall
4become inoperative if the participant or the contingent
5annuitant dies before the date the participant's annuity
6payments commence, or if the eligible spouse's consent is
7required and not given.
8    (k) (Blank).
9    (l) The automatic annual increases described in subsection
10(d) of Section 15-136 shall apply to retirement benefits under
11the portable benefit package and the automatic annual increases
12described in subsection (j) of Section 15-145 shall apply to
13survivor benefits under the portable benefit package; however,
14for a Tier 1 member in the portable benefit package who elected
15the early retirement incentive under Section 15-136.5, the
16automatic annual increases described in subsection (d-1) of
17Section 15-136 shall apply to his or her retirement benefits
18under the portable benefit package and the automatic annual
19increases described in subsection (j-5) of Section 15-145 shall
20apply to the survivor benefits under the portable benefit
21package.
22(Source: P.A. 96-586, eff. 8-18-09; 97-933, eff. 8-10-12;
2397-968, eff. 8-16-12.)
 
24    (40 ILCS 5/15-136.5 new)
25    Sec. 15-136.5. Early retirement incentive for certain Tier

 

 

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11 members.
2    (a) This Section provides an age enhancement and additional
3service credit as an early retirement incentive for certain
4Tier 1 members who elect to have their automatic annual
5increase in retirement annuity determined in accordance with
6subsection (d-1) of Section 15-136 and any annual increase in
7survivor benefits payable to their beneficiaries determined in
8the manner provided in subsection (j-5) of Section 15-145. To
9be eligible for the age enhancement and additional service
10credit, a person must:
11        (1) be a Tier 1 member of this System who, on or after
12    the effective date of this amendatory Act of the 101st
13    General Assembly, is (i) participating in this System as a
14    full-time employee, (ii) on layoff status from such a
15    position with a right of re-employment or recall to
16    service, or (iii) on disability or a leave of absence from
17    such a position, but only if the member is not receiving a
18    disability retirement annuity under Section 15-153.2;
19        (2) not be a participant in the self-managed plan;
20        (3) have never previously received a retirement
21    annuity under this Article, except that receipt of a
22    disability retirement annuity does not disqualify a member
23    if the annuity has been terminated and the member has
24    returned to full-time employment under this Article before
25    the effective date of his or her election under subsection
26    (b);

 

 

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1        (4) not have a Qualified Illinois Domestic Relations
2    Order in effect against him or her;
3        (5) file with the Board and the employer a written
4    application electing to receive the age enhancement and
5    additional service credit under this Section and a notice
6    of resignation from employment, which resignation must
7    take effect no later than the effective date of that
8    election;
9        (6) have accrued sufficient service credit to be
10    eligible to receive a retirement annuity under this
11    Article;
12        (7) have attained age 55 (without the use of any age
13    enhancement to be received under this Section) at the time
14    of filing an application requesting an age enhancement
15    under this Section; and
16        (8) not have made the election under Section 15-185.5
17    or 15-185.6.
18    (b) For an eligible member who elects to receive the age
19enhancement and additional service credit under this Section,
20the amount of age enhancement shall be equal to the applicable
21minimum age for an undiscounted retirement annuity (based on
22the amount of creditable service the member has on the
23effective date of the election) minus the member's actual age
24on the effective date of the election. The amount of service
25credit established shall be equal to the amount of the age
26enhancement granted. The amount of service credit under this

 

 

HB2910- 20 -LRB101 08042 RPS 53104 b

1Section shall not exceed 5 years, and the amount of age
2enhancement under this Section shall not exceed 5 years.
3    The service credit established under this Section may be
4used for all purposes under this Article and the Retirement
5Systems Reciprocal Act, except for the computation of final
6rate of earnings, or the determination of earnings or
7compensation under this or any other Article of the Code.
8    The age enhancement established under this Section may be
9used for all purposes under this Article (including calculation
10of a proportionate annuity payable by this System under the
11Retirement Systems Reciprocal Act), except for purposes of a
12reversionary annuity under Section 15-140 and the retirement
13annuity under Rule 2 of Section 15-136. Age enhancement
14established under this Section shall not be used in determining
15benefits payable by any other participating system under the
16Retirement Systems Reciprocal Act.
17    (c) Notwithstanding Sections 15-136, 15-136.4, and 15-145,
18in exchange for the age enhancement and additional service
19credit under this Section, a member who elects the age
20enhancement and service credit under this Section agrees to
21have his or her annual increases in retirement annuity
22determined in the manner provided in subsection (d-1) of
23Section 15-136 and any increase in survivor benefits payable to
24his or her beneficiary determined in the manner provided in
25subsection (j-5) of Section 15-145.
26    (d) An employer may offer additional incentives to induce a

 

 

HB2910- 21 -LRB101 08042 RPS 53104 b

1member to elect the age enhancement and additional service
2credit under this Section. However, any such incentive shall
3not be included in the determination of earnings for the
4purposes of this Article.
5    (e) A person who returns to service under this Article
6after receiving any age enhancement or service credit under
7this Section thereby irrevocably forfeits that age enhancement
8and service credit and remains ineligible for any other early
9retirement benefit under this Article.
10    (f) The Board may adopt rules to implement this Section.
 
11    (40 ILCS 5/15-145)  (from Ch. 108 1/2, par. 15-145)
12    Sec. 15-145. Survivors insurance benefits; conditions and
13amounts.
14    (a) The survivors insurance benefits provided under this
15Section shall be payable to the eligible survivors of a Tier 1
16member covered under the traditional benefit package upon the
17death of (1) a participating employee with at least 1 1/2 years
18of service, (2) a participant who terminated employment with at
19least 10 years of service, and (3) an annuitant in receipt of a
20retirement annuity or disability retirement annuity under this
21Article.
22    Service under the State Employees' Retirement System of
23Illinois, the Teachers' Retirement System of the State of
24Illinois and the Public School Teachers' Pension and Retirement
25Fund of Chicago shall be considered in determining eligibility

 

 

HB2910- 22 -LRB101 08042 RPS 53104 b

1for survivors benefits under this Section.
2    If by law, a function of a governmental unit, as defined by
3Section 20-107, is transferred in whole or in part to an
4employer, and an employee transfers employment from this
5governmental unit to such employer within 6 months after the
6transfer of this function, the service credits in the
7governmental unit's retirement system which have been
8validated under Section 20-109 shall be considered in
9determining eligibility for survivors benefits under this
10Section.
11    (b) A surviving spouse of a deceased participant, or of a
12deceased annuitant who did not take a refund or additional
13annuity consisting of accumulated survivors insurance
14contributions or who repaid the refund or additional annuity,
15shall receive a survivors annuity of 30% of the final rate of
16earnings. Payments shall begin on the day following the
17participant's or annuitant's death or the date the surviving
18spouse attains age 50, whichever is later, and continue until
19the death of the surviving spouse. The annuity shall be payable
20to the surviving spouse prior to attainment of age 50 if the
21surviving spouse has in his or her care a deceased
22participant's or annuitant's dependent unmarried child under
23age 18 (under age 22 if a full-time student) who is eligible
24for a survivors annuity.
25    Remarriage of a surviving spouse prior to attainment of age
2655 that occurs before the effective date of this amendatory Act

 

 

HB2910- 23 -LRB101 08042 RPS 53104 b

1of the 91st General Assembly shall disqualify him or her for
2the receipt of a survivors annuity until July 6, 2000.
3    A surviving spouse whose survivors annuity has been
4terminated due to remarriage may apply for reinstatement of
5that annuity. The reinstated annuity shall begin to accrue on
6July 6, 2000, except that if, on July 6, 2000, the annuity is
7payable to an eligible surviving child or parent, payment of
8the annuity to the surviving spouse shall not be reinstated
9until the annuity is no longer payable to any eligible
10surviving child or parent. The reinstated annuity shall include
11any one-time or annual increases received prior to the date of
12termination, as well as any increases that would otherwise have
13accrued from the date of termination to the date of
14reinstatement. An eligible surviving spouse whose expectation
15of receiving a survivors annuity was lost due to remarriage
16before attainment of age 50 shall also be entitled to
17reinstatement under this subsection, but the resulting
18survivors annuity shall not begin to accrue sooner than upon
19the surviving spouse's attainment of age 50.
20    The changes made to this subsection by this amendatory Act
21of the 92nd General Assembly (pertaining to remarriage prior to
22age 55 or 50) apply without regard to whether the deceased
23participant or annuitant was in service on or after the
24effective date of this amendatory Act.
25    (c) Each dependent unmarried child under age 18 (under age
2622 if a full-time student) of a deceased participant, or of a

 

 

HB2910- 24 -LRB101 08042 RPS 53104 b

1deceased annuitant who did not take a refund or additional
2annuity consisting of accumulated survivors insurance
3contributions or who repaid the refund or additional annuity,
4shall receive a survivors annuity equal to the sum of (1) 20%
5of the final rate of earnings, and (2) 10% of the final rate of
6earnings divided by the number of children entitled to this
7benefit. Payments shall begin on the day following the
8participant's or annuitant's death and continue until the child
9marries, dies, or attains age 18 (age 22 if a full-time
10student). If the child is in the care of a surviving spouse who
11is eligible for survivors insurance benefits, the child's
12benefit shall be paid to the surviving spouse.
13    Each unmarried child over age 18 of a deceased participant
14or of a deceased annuitant who had a survivor's insurance
15beneficiary at the time of his or her retirement, and who was
16dependent upon the participant or annuitant by reason of a
17physical or mental disability which began prior to the date the
18child attained age 18 (age 22 if a full-time student), shall
19receive a survivor's annuity equal to the sum of (1) 20% of the
20final rate of earnings, and (2) 10% of the final rate of
21earnings divided by the number of children entitled to
22survivors benefits. Payments shall begin on the day following
23the participant's or annuitant's death and continue until the
24child marries, dies, or is no longer disabled. If the child is
25in the care of a surviving spouse who is eligible for survivors
26insurance benefits, the child's benefit may be paid to the

 

 

HB2910- 25 -LRB101 08042 RPS 53104 b

1surviving spouse. For the purposes of this Section, disability
2means inability to engage in any substantial gainful activity
3by reason of any medically determinable physical or mental
4impairment that can be expected to result in death or that has
5lasted or can be expected to last for a continuous period of at
6least one year.
7    (d) Each dependent parent of a deceased participant, or of
8a deceased annuitant who did not take a refund or additional
9annuity consisting of accumulated survivors insurance
10contributions or who repaid the refund or additional annuity,
11shall receive a survivors annuity equal to the sum of (1) 20%
12of final rate of earnings, and (2) 10% of final rate of
13earnings divided by the number of parents who qualify for the
14benefit. Payments shall begin when the parent reaches age 55 or
15the day following the participant's or annuitant's death,
16whichever is later, and continue until the parent dies.
17Remarriage of a parent prior to attainment of age 55 shall
18disqualify the parent for the receipt of a survivors annuity.
19    (e) In addition to the survivors annuity provided above,
20each survivors insurance beneficiary shall, upon death of the
21participant or annuitant, receive a lump sum payment of $1,000
22divided by the number of such beneficiaries.
23    (f) The changes made in this Section by Public Act 81-712
24pertaining to survivors annuities in cases of remarriage prior
25to age 55 shall apply to each survivors insurance beneficiary
26who remarries after June 30, 1979, regardless of the date that

 

 

HB2910- 26 -LRB101 08042 RPS 53104 b

1the participant or annuitant terminated his employment or died.
2    The change made to this Section by this amendatory Act of
3the 91st General Assembly, pertaining to remarriage prior to
4age 55, applies without regard to whether the deceased
5participant or annuitant was in service on or after the
6effective date of this amendatory Act of the 91st General
7Assembly.
8    (g) On January 1, 1981, any person who was receiving a
9survivors annuity on or before January 1, 1971 shall have the
10survivors annuity then being paid increased by 1% for each full
11year which has elapsed from the date the annuity began. On
12January 1, 1982, any survivor whose annuity began after January
131, 1971, but before January 1, 1981, shall have the survivor's
14annuity then being paid increased by 1% for each year which has
15elapsed from the date the survivor's annuity began. On January
161, 1987, any survivor who began receiving a survivor's annuity
17on or before January 1, 1977, shall have the monthly survivor's
18annuity increased by $1 for each full year which has elapsed
19since the date the survivor's annuity began.
20    (h) If the sum of the lump sum and total monthly survivor
21benefits payable under this Section upon the death of a
22participant amounts to less than the sum of the death benefits
23payable under items (2) and (3) of Section 15-141, the
24difference shall be paid in a lump sum to the beneficiary of
25the participant who is living on the date that this additional
26amount becomes payable.

 

 

HB2910- 27 -LRB101 08042 RPS 53104 b

1    (i) If the sum of the lump sum and total monthly survivor
2benefits payable under this Section upon the death of an
3annuitant receiving a retirement annuity or disability
4retirement annuity amounts to less than the death benefit
5payable under Section 15-142, the difference shall be paid to
6the beneficiary of the annuitant who is living on the date that
7this additional amount becomes payable.
8    (j) Effective on the later of (1) January 1, 1990, or (2)
9the January 1 on or next after the date on which the survivor
10annuity begins, if the deceased member died while receiving a
11retirement annuity, or in all other cases the January 1 nearest
12the first anniversary of the date the survivor annuity payments
13begin, every survivors insurance beneficiary shall receive an
14increase in his or her monthly survivors annuity of 3%. On each
15January 1 after the initial increase, the monthly survivors
16annuity shall be increased by 3% of the total survivors annuity
17provided under this Article, including previous increases
18provided by this subsection. Such increases shall apply to the
19survivors insurance beneficiaries of each participant and
20annuitant, whether or not the employment status of the
21participant or annuitant terminates before the effective date
22of this amendatory Act of 1990. This subsection (j) also
23applies to persons receiving a survivor annuity under the
24portable benefit package.
25    (j-5) Notwithstanding any other provision of this Article
26to the contrary, the automatic annual increase in the survivors

 

 

HB2910- 28 -LRB101 08042 RPS 53104 b

1annuity for the survivor of a deceased Tier 1 member who
2elected the early retirement incentive under Section 15-136.5
3shall be calculated at 3% or the annual unadjusted percentage
4increase (but not less than zero) in the consumer price index-u
5for the 12 months ending with the September preceding each
6November 1, whichever is less, of the originally granted
7retirement annuity. If the annual unadjusted percentage change
8in the consumer price index-u for the 12 months ending with the
9September preceding each November 1 is zero or there is a
10decrease, then the annuity shall not be increased.
11    (k) If the Internal Revenue Code of 1986, as amended,
12requires that the survivors benefits be payable at an age
13earlier than that specified in this Section the benefits shall
14begin at the earlier age, in which event, the survivor's
15beneficiary shall be entitled only to that amount which is
16equal to the actuarial equivalent of the benefits provided by
17this Section.
18    (l) The changes made to this Section and Section 15-131 by
19this amendatory Act of 1997, relating to benefits for certain
20unmarried children who are full-time students under age 22,
21apply without regard to whether the deceased member was in
22service on or after the effective date of this amendatory Act
23of 1997. These changes do not authorize the repayment of a
24refund or a re-election of benefits, and any benefit or
25increase in benefits resulting from these changes is not
26payable retroactively for any period before the effective date

 

 

HB2910- 29 -LRB101 08042 RPS 53104 b

1of this amendatory Act of 1997.
2(Source: P.A. 98-92, eff. 7-16-13; 99-682, eff. 7-29-16.)
 
3    (40 ILCS 5/15-185.5)
4    Sec. 15-185.5. Accelerated pension benefit payment in lieu
5of any pension benefit.
6    (a) As used in this Section:
7    "Eligible person" means a person who:
8        (1) has terminated service;
9        (2) has accrued sufficient service credit to be
10    eligible to receive a retirement annuity under this
11    Article;
12        (3) has not received any retirement annuity under this
13    Article;
14        (4) has not made the election under Section 15-136.5 or
15    15-185.6; and
16        (5) is not a participant in the self-managed plan under
17    Section 15-158.2.
18    "Implementation date" means the earliest date upon which
19the Board authorizes eligible persons to begin irrevocably
20electing the accelerated pension benefit payment option under
21this Section. The Board shall endeavor to make such
22participation available as soon as possible after the effective
23date of this amendatory Act of the 100th General Assembly and
24shall establish an implementation date by Board resolution.
25    "Pension benefit" means the benefits under this Article, or

 

 

HB2910- 30 -LRB101 08042 RPS 53104 b

1Article 1 as it relates to those benefits, including any
2anticipated annual increases, that an eligible person is
3entitled to upon attainment of the applicable retirement age.
4"Pension benefit" also includes applicable survivors benefits,
5disability benefits, or disability retirement annuity
6benefits.
7    (b) Beginning on the implementation date, the System shall
8offer each eligible person the opportunity to irrevocably elect
9to receive an amount determined by the System to be equal to
1060% of the present value of his or her pension benefits in lieu
11of receiving any pension benefit. The System shall calculate,
12using actuarial tables and other assumptions adopted by the
13Board, the present value of pension benefits for each eligible
14person upon his or her request in writing to the System. The
15System shall not perform more than one calculation per eligible
16member in a State fiscal year. The offer shall specify the
17dollar amount that the eligible person will receive if he or
18she so elects and shall expire when a subsequent offer is made
19to an eligible person. The System shall make a good faith
20effort to contact every eligible person to notify him or her of
21the election.
22    Beginning on the implementation date and until June 30,
232021, an eligible person may irrevocably elect to receive an
24accelerated pension benefit payment in the amount that the
25System offers under this subsection in lieu of receiving any
26pension benefit. A person who elects to receive an accelerated

 

 

HB2910- 31 -LRB101 08042 RPS 53104 b

1pension benefit payment under this Section may not elect to
2proceed under the Retirement Systems Reciprocal Act with
3respect to service under this Article.
4    (c) Upon payment of an accelerated pension benefit payment
5under this Section, the person forfeits all accrued rights and
6credits in the System and no other benefit shall be paid under
7this Article based on those forfeited rights and credits,
8including any retirement, survivor, or other benefit; except
9that to the extent that participation, benefits, or premiums
10under the State Employees Group Insurance Act of 1971 are based
11on the amount of service credit, the terminated service credit
12shall be used for that purpose.
13    (d) If a person who has received an accelerated pension
14benefit payment under this Section returns to participation
15under this Article, any benefits under the System earned as a
16result of that return to participation shall be based solely on
17the person's credits and creditable service arising from the
18return to participation. Upon return to participation, the
19person shall be considered a new employee subject to all the
20qualifying conditions for participation and eligibility for
21benefits applicable to new employees.
22    (d-5) The accelerated pension benefit payment may not be
23repaid to the System, and the forfeited rights and credits may
24not under any circumstances be reinstated.
25    (e) As a condition of receiving an accelerated pension
26benefit payment, the accelerated pension benefit payment must

 

 

HB2910- 32 -LRB101 08042 RPS 53104 b

1be deposited into a tax qualified retirement plan or account
2identified by the eligible person at the time of the election.
3The accelerated pension benefit payment under this Section may
4be subject to withholding or payment of applicable taxes, but
5to the extent permitted by federal law, a person who receives
6an accelerated pension benefit payment under this Section must
7direct the System to pay all of that payment as a rollover into
8another retirement plan or account qualified under the Internal
9Revenue Code of 1986, as amended.
10    (f) The System shall submit vouchers to the State
11Comptroller for the payment of accelerated pension benefit
12payments under this Section. The State Comptroller shall pay
13the amounts of the vouchers from the State Pension Obligation
14Acceleration Bond Fund to the System, and the System shall
15deposit the amounts into the applicable tax qualified plans or
16accounts.
17    (g) The Board shall adopt any rules, including emergency
18rules, necessary to implement this Section.
19    (h) No provision of this Section shall be interpreted in a
20way that would cause the System to cease to be a qualified plan
21under the Internal Revenue Code of 1986.
22(Source: P.A. 100-587, eff. 6-4-18.)
 
23    (40 ILCS 5/15-185.6)
24    Sec. 15-185.6. Accelerated pension benefit payment for a
25reduction in an annual increase to a retirement annuity and an

 

 

HB2910- 33 -LRB101 08042 RPS 53104 b

1annuity benefit payable as a result of death.
2    (a) As used in this Section:
3    "Accelerated pension benefit payment" means a lump sum
4payment equal to 70% of the difference of: (i) the present
5value of the automatic annual increases to a Tier 1 member's
6retirement annuity, including any increases to any annuity
7benefit payable as a result of his or her death, using the
8formula applicable to the Tier 1 member; and (ii) the present
9value of the automatic annual increases to the Tier 1 member's
10retirement annuity, including any increases to any annuity
11benefit payable as a result of his or her death, using the
12formula provided under subsection (b-5).
13    "Eligible person" means a person who:
14        (1) is a Tier 1 member;
15        (2) has submitted an application for a retirement
16    annuity under this Article;
17        (3) meets the age and service requirements for
18    receiving a retirement annuity under this Article;
19        (4) has not received any retirement annuity under this
20    Article;
21        (5) has not made the election under Section 15-136.5 or
22    15-185.5; and
23        (6) is not a participant in the self-managed plan under
24    Section 15-158.2.
25    "Implementation date" means the earliest date upon which
26the Board authorizes eligible persons to begin irrevocably

 

 

HB2910- 34 -LRB101 08042 RPS 53104 b

1electing the accelerated pension benefit payment option under
2this Section. The Board shall endeavor to make such
3participation available as soon as possible after the effective
4date of this amendatory Act of the 100th General Assembly and
5shall establish an implementation date by Board resolution.
6    (b) Beginning on the implementation date and until June 30,
72021, the System shall implement an accelerated pension benefit
8payment option for eligible persons. The System shall
9calculate, using actuarial tables and other assumptions
10adopted by the Board, an accelerated pension benefit payment
11amount for an eligible person upon his or her request in
12writing to the System and shall offer that eligible person the
13opportunity to irrevocably elect to have his or her automatic
14annual increases in retirement annuity and any annuity benefit
15payable as a result of his or her death calculated in
16accordance with the formula provided in subsection (b-5) in
17exchange for the accelerated pension benefit payment. The
18System shall not perform more than one calculation under this
19Section per eligible person in a State fiscal year. The
20election under this subsection must be made before any
21retirement annuity is paid to the eligible person, and the
22eligible survivor, spouse, or contingent annuitant, as
23applicable, must consent to the election under this subsection.
24    (b-5) Notwithstanding any other provision of law, the
25retirement annuity of a person who made the election under
26subsection (b) shall be increased annually beginning on the

 

 

HB2910- 35 -LRB101 08042 RPS 53104 b

1January 1 occurring either on or after the attainment of age 67
2or the first anniversary of the annuity start date, whichever
3is later, and any annuity benefit payable as a result of his or
4her death shall be increased annually beginning on: (1) the
5January 1 occurring on or after the commencement of the annuity
6if the deceased Tier 1 member died while receiving a retirement
7annuity; or (2) the January 1 occurring after the first
8anniversary of the commencement of the benefit. Each annual
9increase shall be calculated at 1.5% of the originally granted
10retirement annuity or annuity benefit payable as a result of
11the Tier 1 member's death.
12    (c) If an annuitant who has received an accelerated pension
13benefit payment returns to participation under this Article,
14the calculation of any future automatic annual increase in
15retirement annuity under subsection (c) of Section 15-139 shall
16be calculated in accordance with the formula provided in
17subsection (b-5).
18    (c-5) The accelerated pension benefit payment may not be
19repaid to the System.
20    (d) As a condition of receiving an accelerated pension
21benefit payment, the accelerated pension benefit payment must
22be deposited into a tax qualified retirement plan or account
23identified by the eligible person at the time of election. The
24accelerated pension benefit payment under this Section may be
25subject to withholding or payment of applicable taxes, but to
26the extent permitted by federal law, a person who receives an

 

 

HB2910- 36 -LRB101 08042 RPS 53104 b

1accelerated pension benefit payment under this Section must
2direct the System to pay all of that payment as a rollover into
3another retirement plan or account qualified under the Internal
4Revenue Code of 1986, as amended.
5    (d-5) The System shall submit vouchers to the State
6Comptroller for the payment of accelerated pension benefit
7payments under this Section. The State Comptroller shall pay
8the amounts of the vouchers from the State Pension Obligation
9Acceleration Bond Fund to the System, and the System shall
10deposit the amounts into the applicable tax qualified plans or
11accounts.
12    (e) The Board shall adopt any rules, including emergency
13rules, necessary to implement this Section.
14    (f) No provision of this Section shall be interpreted in a
15way that would cause the System to cease to be a qualified plan
16under the Internal Revenue Code of 1986.
17(Source: P.A. 100-587, eff. 6-4-18.)
 
18    (40 ILCS 5/15-198)
19    Sec. 15-198. Application and expiration of new benefit
20increases.
21    (a) As used in this Section, "new benefit increase" means
22an increase in the amount of any benefit provided under this
23Article, or an expansion of the conditions of eligibility for
24any benefit under this Article, that results from an amendment
25to this Code that takes effect after the effective date of this

 

 

HB2910- 37 -LRB101 08042 RPS 53104 b

1amendatory Act of the 94th General Assembly. "New benefit
2increase", however, does not include any benefit increase
3resulting from the changes made to Article 1 or this Article by
4Public Act 100-23, Public Act 100-587, Public Act 100-769, or
5this amendatory Act of the 101st General Assembly or this
6amendatory Act of the 100th General Assembly.
7    (b) Notwithstanding any other provision of this Code or any
8subsequent amendment to this Code, every new benefit increase
9is subject to this Section and shall be deemed to be granted
10only in conformance with and contingent upon compliance with
11the provisions of this Section.
12    (c) The Public Act enacting a new benefit increase must
13identify and provide for payment to the System of additional
14funding at least sufficient to fund the resulting annual
15increase in cost to the System as it accrues.
16    Every new benefit increase is contingent upon the General
17Assembly providing the additional funding required under this
18subsection. The Commission on Government Forecasting and
19Accountability shall analyze whether adequate additional
20funding has been provided for the new benefit increase and
21shall report its analysis to the Public Pension Division of the
22Department of Insurance. A new benefit increase created by a
23Public Act that does not include the additional funding
24required under this subsection is null and void. If the Public
25Pension Division determines that the additional funding
26provided for a new benefit increase under this subsection is or

 

 

HB2910- 38 -LRB101 08042 RPS 53104 b

1has become inadequate, it may so certify to the Governor and
2the State Comptroller and, in the absence of corrective action
3by the General Assembly, the new benefit increase shall expire
4at the end of the fiscal year in which the certification is
5made.
6    (d) Every new benefit increase shall expire 5 years after
7its effective date or on such earlier date as may be specified
8in the language enacting the new benefit increase or provided
9under subsection (c). This does not prevent the General
10Assembly from extending or re-creating a new benefit increase
11by law.
12    (e) Except as otherwise provided in the language creating
13the new benefit increase, a new benefit increase that expires
14under this Section continues to apply to persons who applied
15and qualified for the affected benefit while the new benefit
16increase was in effect and to the affected beneficiaries and
17alternate payees of such persons, but does not apply to any
18other person, including without limitation a person who
19continues in service after the expiration date and did not
20apply and qualify for the affected benefit while the new
21benefit increase was in effect.
22(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
23100-769, eff. 8-10-18; revised 9-26-18.)
 
24    (40 ILCS 5/16-133.1)  (from Ch. 108 1/2, par. 16-133.1)
25    (Text of Section WITHOUT the changes made by P.A. 98-599,

 

 

HB2910- 39 -LRB101 08042 RPS 53104 b

1which has been held unconstitutional)
2    Sec. 16-133.1. Automatic annual increase in annuity.
3    (a) Each member with creditable service and retiring on or
4after August 26, 1969 is entitled to the automatic annual
5increases in annuity provided under this Section while
6receiving a retirement annuity or disability retirement
7annuity from the system.
8    An annuitant shall first be entitled to an initial increase
9under this Section on the January 1 next following the first
10anniversary of retirement, or January 1 of the year next
11following attainment of age 61, whichever is later. At such
12time, the system shall pay an initial increase determined as
13follows:
14        (1) 1.5% of the originally granted retirement annuity
15    or disability retirement annuity multiplied by the number
16    of years elapsed, if any, from the date of retirement until
17    January 1, 1972, plus
18        (2) 2% of the originally granted annuity multiplied by
19    the number of years elapsed, if any, from the date of
20    retirement or January 1, 1972, whichever is later, until
21    January 1, 1978, plus
22        (3) 3% of the originally granted annuity multiplied by
23    the number of years elapsed from the date of retirement or
24    January 1, 1978, whichever is later, until the effective
25    date of the initial increase.
26However, the initial annual increase calculated under this

 

 

HB2910- 40 -LRB101 08042 RPS 53104 b

1Section for the recipient of a disability retirement annuity
2granted under Section 16-149.2 shall be reduced by an amount
3equal to the total of all increases in that annuity received
4under Section 16-149.5 (but not exceeding 100% of the amount of
5the initial increase otherwise provided under this Section).
6    Following the initial increase, automatic annual increases
7in annuity shall be payable on each January 1 thereafter during
8the lifetime of the annuitant, determined as a percentage of
9the originally granted retirement annuity or disability
10retirement annuity for increases granted prior to January 1,
111990, and calculated as a percentage of the total amount of
12annuity, including previous increases under this Section, for
13increases granted on or after January 1, 1990, as follows: 1.5%
14for periods prior to January 1, 1972, 2% for periods after
15December 31, 1971 and prior to January 1, 1978, and 3% for
16periods after December 31, 1977.
17    (a-5) Notwithstanding any other provision of this Article
18to the contrary, the automatic annual increase in annuity for a
19Tier 1 member who elects the early retirement incentive under
20Section 16-133.6 shall be calculated at 3% or the annual
21unadjusted percentage increase (but not less than zero) in the
22consumer price index-u for the 12 months ending with the
23September preceding each November 1, whichever is less, of the
24originally granted retirement annuity. If the annual
25unadjusted percentage change in the consumer price index-u for
26the 12 months ending with the September preceding each November

 

 

HB2910- 41 -LRB101 08042 RPS 53104 b

11 is zero or there is a decrease, then the annuity shall not be
2increased.
3    For the purposes of this subsection, "consumer price
4index-u" means the index published by the Bureau of Labor
5Statistics of the United States Department of Labor that
6measures the average change in prices of goods and services
7purchased by all urban consumers, United States city average,
8all items, 1982-84 = 100. The new amount resulting from each
9annual adjustment shall be determined by the Public Pension
10Division of the Department of Insurance and made available to
11the boards of the retirement systems and pension funds by
12November 1 of each year.
13    (b) The automatic annual increases in annuity provided
14under this Section shall not be applicable unless a member has
15made contributions toward such increases for a period
16equivalent to one full year of creditable service. If a member
17contributes for service performed after August 26, 1969 but the
18member becomes an annuitant before such contributions amount to
19one full year's contributions based on the salary at the date
20of retirement, he or she may pay the necessary balance of the
21contributions to the system and be eligible for the automatic
22annual increases in annuity provided under this Section.
23    (c) Each member shall make contributions toward the cost of
24the automatic annual increases in annuity as provided under
25Section 16-152.
26    (d) An annuitant receiving a retirement annuity or

 

 

HB2910- 42 -LRB101 08042 RPS 53104 b

1disability retirement annuity on July 1, 1969, who subsequently
2re-enters service as a teacher is eligible for the automatic
3annual increases in annuity provided under this Section if he
4or she renders at least one year of creditable service
5following the latest re-entry.
6    (e) In addition to the automatic annual increases in
7annuity provided under this Section, an annuitant who meets the
8service requirements of this Section and whose retirement
9annuity or disability retirement annuity began on or before
10January 1, 1971 shall receive, on January 1, 1981, an increase
11in the annuity then being paid of one dollar per month for each
12year of creditable service. On January 1, 1982, an annuitant
13whose retirement annuity or disability retirement annuity
14began on or before January 1, 1977 shall receive an increase in
15the annuity then being paid of one dollar per month for each
16year of creditable service.
17    On January 1, 1987, any annuitant whose retirement annuity
18began on or before January 1, 1977, shall receive an increase
19in the monthly retirement annuity equal to 8¢ per year of
20creditable service times the number of years that have elapsed
21since the annuity began.
22(Source: P.A. 91-927, eff. 12-14-00.)
 
23    (40 ILCS 5/16-133.6 new)
24    Sec. 16-133.6. Early retirement incentive for certain Tier
251 members.

 

 

HB2910- 43 -LRB101 08042 RPS 53104 b

1    (a) This Section provides an age enhancement and additional
2creditable service as an early retirement incentive for certain
3Tier 1 members who elect to have their automatic annual
4increase in retirement annuity determined in accordance with
5subsection (a-5) of Section 16-133.1 and any annual increase in
6a survivor's benefit payable to their beneficiaries determined
7in the manner provided in subsection (a-5) of Section 16-143.1.
8To be eligible for the age enhancement and additional
9creditable service, a person must:
10        (1) be a Tier 1 member of this System who, on or after
11    the effective date of this amendatory Act of the 101st
12    General Assembly, is (i) in active payroll status as a
13    full-time teacher employed by an employer under this
14    Article, (ii) on layoff status from such a position with a
15    right of re-employment or recall to service, or (iii) on
16    disability or a leave of absence from such a position, but
17    only if the member is not receiving benefits under Section
18    16-149 or 16-149.1;
19        (2) have never previously received a retirement
20    annuity under this Article, except that receipt of a
21    disability retirement annuity does not disqualify a member
22    if the annuity has been terminated and the member has
23    returned to full-time employment under this Article before
24    the effective date of his or her election under subsection
25    (b);
26        (3) not have a Qualified Illinois Domestic Relations

 

 

HB2910- 44 -LRB101 08042 RPS 53104 b

1    Order in effect against him or her;
2        (4) file with the Board and the employer a written
3    application electing to receive the age enhancement and
4    additional creditable service under this Section and a
5    notice of resignation from employment, which resignation
6    must take effect no later than the effective date of that
7    election;
8        (5) have accrued sufficient creditable service to be
9    eligible to receive a retirement annuity under this
10    Article;
11        (6) have attained age 55 (without the use of any age
12    enhancement to be received under this Section) at the time
13    of filing an application requesting an age enhancement and
14    additional creditable service under this Section;
15        (7) not receive any other early retirement incentive
16    under Section 16-133.2, 16-133.3, 16-133.4, or 16-133.5 of
17    this Article; and
18        (8) not have made the election under Section 16-190.5
19    or 16-190.6.
20    (b) For an eligible member who elects to receive the age
21enhancement and additional creditable service under this
22Section, the amount of age enhancement shall be equal to the
23applicable minimum age for an undiscounted retirement annuity
24(based on the amount of creditable service the member has on
25the effective date of the election) minus the member's actual
26age on the effective date of the election. The amount of

 

 

HB2910- 45 -LRB101 08042 RPS 53104 b

1creditable service established shall be equal to the amount of
2the age enhancement granted. The amount of creditable service
3under this Section shall not exceed 5 years, and the amount of
4age enhancement under this Section shall not exceed 5 years.
5    The creditable service established under this Section may
6be used for all purposes under this Article and the Retirement
7Systems Reciprocal Act, except for the computation of final
8average salary and the determination of salary or compensation
9under this or any other Article of the Code.
10    The age enhancement established under this Section may be
11used for all purposes under this Article (including calculation
12of a proportionate annuity payable by this System under the
13Retirement Systems Reciprocal Act), except for purposes of a
14reversionary annuity under Section 16-136, the retirement
15annuity under subdivision (a)(A) of Section 16-133, and the
16required distributions under Section 16-142.3. Age enhancement
17established under this Section shall not be used in determining
18benefits payable by any other participating system under the
19Retirement Systems Reciprocal Act.
20    (c) Notwithstanding Sections 16-133.1, 16-136.1, and
2116-143.1, in exchange for the age enhancement and creditable
22service under this Section, a member who elects the age
23enhancement and creditable service under this Section agrees to
24have his or her annual increases in retirement annuity
25determined in the manner provided in subsection (a-5) of
26Section 16-133.1 and any annual increases in a survivor's

 

 

HB2910- 46 -LRB101 08042 RPS 53104 b

1benefit payable to his or her survivor's beneficiary determined
2in the manner provided in subsection (a-5) of Section 16-143.1.
3    (d) An employer may offer additional incentives to induce a
4member to elect the age enhancement and additional creditable
5service under this Section. However, any such incentive shall
6not be included in the determination of salary for the purposes
7of this Article.
8    (e) A person who returns to service under this Article
9after receiving any age enhancement or creditable service under
10this Section thereby irrevocably forfeits that age enhancement
11and creditable service and remains ineligible for any other
12early retirement benefit under this Article.
13    (f) The Board may adopt rules to implement this Section.
 
14    (40 ILCS 5/16-143.1)  (from Ch. 108 1/2, par. 16-143.1)
15    Sec. 16-143.1. Increase in survivor benefits.
16    (a) Beginning January 1, 1990, each survivor's benefit and
17each reversionary annuity payable under Section 16-136 shall be
18increased by 3% of the currently payable amount thereof (1) on
19each January 1 occurring on or after the commencement of the
20annuity if the deceased teacher died while receiving a
21retirement or disability retirement annuity, or (2) in other
22cases, on each January 1 occurring on or after the first
23anniversary of the granting of the benefit, without regard to
24whether the deceased teacher was in service on or after the
25effective date of this amendatory Act of 1991, but such

 

 

HB2910- 47 -LRB101 08042 RPS 53104 b

1increases shall not accrue for any period prior to January 1,
21990.
3    (a-5) Notwithstanding any other provision of this Article
4to the contrary, the automatic annual increase in the
5survivor's benefit for the survivor of a deceased Tier 1 member
6who elected the early retirement incentive under Section
715-136.5 shall be calculated at 3% or the annual unadjusted
8percentage increase (but not less than zero) in the consumer
9price index-u for the 12 months ending with the September
10preceding each November 1, whichever is less, of the originally
11granted retirement annuity. If the annual unadjusted
12percentage change in the consumer price index-u for the 12
13months ending with the September preceding each November 1 is
14zero or there is a decrease, then the annuity shall not be
15increased.
16    For the purposes of this subsection, "consumer price
17index-u" means the index published by the Bureau of Labor
18Statistics of the United States Department of Labor that
19measures the average change in prices of goods and services
20purchased by all urban consumers, United States city average,
21all items, 1982-84 = 100. The new amount resulting from each
22annual adjustment shall be determined by the Public Pension
23Division of the Department of Insurance and made available to
24the boards of the retirement systems and pension funds by
25November 1 of each year.
26    (b) On January 1, 1981, any beneficiary who was receiving a

 

 

HB2910- 48 -LRB101 08042 RPS 53104 b

1survivor's monthly benefit on or before January 1, 1971, shall
2have the benefit then being paid increased by 1% for each full
3year elapsed from the date the survivor's benefit began. On
4January 1, 1982, any beneficiary who began receiving a
5survivor's monthly benefit after January 1, 1971, but before
6January 1, 1981 shall have the benefit then being paid
7increased by 1% for each year elapsed from the date the
8survivor's benefit began.
9    On January 1, 1987, any beneficiary whose monthly
10survivor's benefit began on or before January 1, 1977, shall
11have the monthly survivor's benefit increased by $1 for each
12full year which has elapsed since the date the survivor's
13benefit began.
14(Source: P.A. 86-273; 86-1488.)
 
15    (40 ILCS 5/16-190.5)
16    Sec. 16-190.5. Accelerated pension benefit payment in lieu
17of any pension benefit.
18    (a) As used in this Section:
19    "Eligible person" means a person who:
20        (1) has terminated service;
21        (2) has accrued sufficient service credit to be
22    eligible to receive a retirement annuity under this
23    Article;
24        (3) has not received any retirement annuity under this
25    Article; and

 

 

HB2910- 49 -LRB101 08042 RPS 53104 b

1        (4) has not made the election under Section 16-133.6 or
2    16-190.6.
3    "Pension benefit" means the benefits under this Article, or
4Article 1 as it relates to those benefits, including any
5anticipated annual increases, that an eligible person is
6entitled to upon attainment of the applicable retirement age.
7"Pension benefit" also includes applicable survivor's or
8disability benefits.
9    (b) As soon as practical after the effective date of this
10amendatory Act of the 100the General Assembly, the System shall
11calculate, using actuarial tables and other assumptions
12adopted by the Board, the present value of pension benefits for
13each eligible person who requests that information and shall
14offer each eligible person the opportunity to irrevocably elect
15to receive an amount determined by the System to be equal to
1660% of the present value of his or her pension benefits in lieu
17of receiving any pension benefit. The offer shall specify the
18dollar amount that the eligible person will receive if he or
19she so elects and shall expire when a subsequent offer is made
20to an eligible person. The System shall make a good faith
21effort to contact every eligible person to notify him or her of
22the election.
23    Until June 30, 2021, an eligible person may irrevocably
24elect to receive an accelerated pension benefit payment in the
25amount that the System offers under this subsection in lieu of
26receiving any pension benefit. A person who elects to receive

 

 

HB2910- 50 -LRB101 08042 RPS 53104 b

1an accelerated pension benefit payment under this Section may
2not elect to proceed under the Retirement Systems Reciprocal
3Act with respect to service under this Article.
4    (c) A person's creditable service under this Article shall
5be terminated upon the person's receipt of an accelerated
6pension benefit payment under this Section, and no other
7benefit shall be paid under this Article based on the
8terminated creditable service, including any retirement,
9survivor, or other benefit; except that to the extent that
10participation, benefits, or premiums under the State Employees
11Group Insurance Act of 1971 are based on the amount of service
12credit, the terminated service credit shall be used for that
13purpose.
14    (d) If a person who has received an accelerated pension
15benefit payment under this Section returns to active service
16under this Article, then:
17        (1) Any benefits under the System earned as a result of
18    that return to active service shall be based solely on the
19    person's creditable service arising from the return to
20    active service.
21        (2) The accelerated pension benefit payment may not be
22    repaid to the System, and the terminated creditable service
23    may not under any circumstances be reinstated.
24    (e) As a condition of receiving an accelerated pension
25benefit payment, the accelerated pension benefit payment must
26be transferred into a tax qualified retirement plan or account.

 

 

HB2910- 51 -LRB101 08042 RPS 53104 b

1The accelerated pension benefit payment under this Section may
2be subject to withholding or payment of applicable taxes, but
3to the extent permitted by federal law, a person who receives
4an accelerated pension benefit payment under this Section must
5direct the System to pay all of that payment as a rollover into
6another retirement plan or account qualified under the Internal
7Revenue Code of 1986, as amended.
8    (f) Upon receipt of a member's irrevocable election to
9receive an accelerated pension benefit payment under this
10Section, the System shall submit a voucher to the Comptroller
11for payment of the member's accelerated pension benefit
12payment. The Comptroller shall transfer the amount of the
13voucher from the State Pension Obligation Acceleration Bond
14Fund to the System, and the System shall transfer the amount
15into the member's eligible retirement plan or qualified
16account.
17    (g) The Board shall adopt any rules, including emergency
18rules, necessary to implement this Section.
19    (h) No provision of this amendatory Act of the 100th
20General Assembly shall be interpreted in a way that would cause
21the applicable System to cease to be a qualified plan under the
22Internal Revenue Code of 1986.
23(Source: P.A. 100-587, eff. 6-4-18.)
 
24    (40 ILCS 5/16-190.6)
25    Sec. 16-190.6. Accelerated pension benefit payment for a

 

 

HB2910- 52 -LRB101 08042 RPS 53104 b

1reduction in annual retirement annuity and survivor's annuity
2increases.
3    (a) As used in this Section:
4    "Accelerated pension benefit payment" means a lump sum
5payment equal to 70% of the difference of the present value of
6the automatic annual increases to a Tier 1 member's retirement
7annuity and survivor's annuity using the formula applicable to
8the Tier 1 member and the present value of the automatic annual
9increases to the Tier 1 member's retirement annuity using the
10formula provided under subsection (b-5) and the survivor's
11annuity using the formula provided under subsection (b-6).
12    "Eligible person" means a person who:
13        (1) is a Tier 1 member;
14        (2) has submitted an application for a retirement
15    annuity under this Article;
16        (3) meets the age and service requirements for
17    receiving a retirement annuity under this Article;
18        (4) has not received any retirement annuity under this
19    Article; and
20        (5) has not made the election under Section 16-133.6 or
21    16-190.5.
22    (b) As soon as practical after the effective date of this
23amendatory Act of the 100th General Assembly and until June 30,
242021, the System shall implement an accelerated pension benefit
25payment option for eligible persons. Upon the request of an
26eligible person, the System shall calculate, using actuarial

 

 

HB2910- 53 -LRB101 08042 RPS 53104 b

1tables and other assumptions adopted by the Board, an
2accelerated pension benefit payment amount and shall offer that
3eligible person the opportunity to irrevocably elect to have
4his or her automatic annual increases in retirement annuity
5calculated in accordance with the formula provided under
6subsection (b-5) and any increases in survivor's annuity
7payable to his or her survivor's annuity beneficiary calculated
8in accordance with the formula provided under subsection (b-6)
9in exchange for the accelerated pension benefit payment. The
10election under this subsection must be made before the eligible
11person receives the first payment of a retirement annuity
12otherwise payable under this Article.
13    (b-5) Notwithstanding any other provision of law, the
14retirement annuity of a person who made the election under
15subsection (b) shall be subject to annual increases on the
16January 1 occurring either on or after the attainment of age 67
17or the first anniversary of the annuity start date, whichever
18is later. Each annual increase shall be calculated at 1.5% of
19the originally granted retirement annuity.
20    (b-6) Notwithstanding any other provision of law, a
21survivor's annuity payable to a survivor's annuity beneficiary
22of a person who made the election under subsection (b) shall be
23subject to annual increases on the January 1 occurring on or
24after the first anniversary of the commencement of the annuity.
25Each annual increase shall be calculated at 1.5% of the
26originally granted survivor's annuity.

 

 

HB2910- 54 -LRB101 08042 RPS 53104 b

1    (c) If a person who has received an accelerated pension
2benefit payment returns to active service under this Article,
3then:
4        (1) the calculation of any future automatic annual
5    increase in retirement annuity shall be calculated in
6    accordance with the formula provided in subsection (b-5);
7    and
8        (2) the accelerated pension benefit payment may not be
9    repaid to the System.
10    (d) As a condition of receiving an accelerated pension
11benefit payment, the accelerated pension benefit payment must
12be transferred into a tax qualified retirement plan or account.
13The accelerated pension benefit payment under this Section may
14be subject to withholding or payment of applicable taxes, but
15to the extent permitted by federal law, a person who receives
16an accelerated pension benefit payment under this Section must
17direct the System to pay all of that payment as a rollover into
18another retirement plan or account qualified under the Internal
19Revenue Code of 1986, as amended.
20    (d-5) Upon receipt of a member's irrevocable election to
21receive an accelerated pension benefit payment under this
22Section, the System shall submit a voucher to the Comptroller
23for payment of the member's accelerated pension benefit
24payment. The Comptroller shall transfer the amount of the
25voucher from the State Pension Obligation Acceleration Bond
26Fund to the System, and the System shall transfer the amount

 

 

HB2910- 55 -LRB101 08042 RPS 53104 b

1into the member's eligible retirement plan or qualified
2account.
3    (e) The Board shall adopt any rules, including emergency
4rules, necessary to implement this Section.
5    (f) No provision of this Section shall be interpreted in a
6way that would cause the applicable System to cease to be a
7qualified plan under the Internal Revenue Code of 1986.
8(Source: P.A. 100-587, eff. 6-4-18.)
 
9    (40 ILCS 5/16-203)
10    Sec. 16-203. Application and expiration of new benefit
11increases.
12    (a) As used in this Section, "new benefit increase" means
13an increase in the amount of any benefit provided under this
14Article, or an expansion of the conditions of eligibility for
15any benefit under this Article, that results from an amendment
16to this Code that takes effect after June 1, 2005 (the
17effective date of Public Act 94-4). "New benefit increase",
18however, does not include any benefit increase resulting from
19the changes made to Article 1 or this Article by Public Act
2095-910, Public Act 100-23, Public Act 100-587, Public Act
21100-743, Public Act 100-769, or this amendatory Act of the
22101st General Assembly or by this amendatory Act of the 100th
23General Assembly.
24    (b) Notwithstanding any other provision of this Code or any
25subsequent amendment to this Code, every new benefit increase

 

 

HB2910- 56 -LRB101 08042 RPS 53104 b

1is subject to this Section and shall be deemed to be granted
2only in conformance with and contingent upon compliance with
3the provisions of this Section.
4    (c) The Public Act enacting a new benefit increase must
5identify and provide for payment to the System of additional
6funding at least sufficient to fund the resulting annual
7increase in cost to the System as it accrues.
8    Every new benefit increase is contingent upon the General
9Assembly providing the additional funding required under this
10subsection. The Commission on Government Forecasting and
11Accountability shall analyze whether adequate additional
12funding has been provided for the new benefit increase and
13shall report its analysis to the Public Pension Division of the
14Department of Insurance. A new benefit increase created by a
15Public Act that does not include the additional funding
16required under this subsection is null and void. If the Public
17Pension Division determines that the additional funding
18provided for a new benefit increase under this subsection is or
19has become inadequate, it may so certify to the Governor and
20the State Comptroller and, in the absence of corrective action
21by the General Assembly, the new benefit increase shall expire
22at the end of the fiscal year in which the certification is
23made.
24    (d) Every new benefit increase shall expire 5 years after
25its effective date or on such earlier date as may be specified
26in the language enacting the new benefit increase or provided

 

 

HB2910- 57 -LRB101 08042 RPS 53104 b

1under subsection (c). This does not prevent the General
2Assembly from extending or re-creating a new benefit increase
3by law.
4    (e) Except as otherwise provided in the language creating
5the new benefit increase, a new benefit increase that expires
6under this Section continues to apply to persons who applied
7and qualified for the affected benefit while the new benefit
8increase was in effect and to the affected beneficiaries and
9alternate payees of such persons, but does not apply to any
10other person, including without limitation a person who
11continues in service after the expiration date and did not
12apply and qualify for the affected benefit while the new
13benefit increase was in effect.
14(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
15100-743, eff. 8-10-18; 100-769, eff. 8-10-18; revised
1610-15-18.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.

 

 

HB2910- 58 -LRB101 08042 RPS 53104 b

1 INDEX
2 Statutes amended in order of appearance
3    40 ILCS 5/15-136from Ch. 108 1/2, par. 15-136
4    40 ILCS 5/15-136.4
5    40 ILCS 5/15-136.5 new
6    40 ILCS 5/15-145from Ch. 108 1/2, par. 15-145
7    40 ILCS 5/15-185.5
8    40 ILCS 5/15-185.6
9    40 ILCS 5/15-198
10    40 ILCS 5/16-133.1from Ch. 108 1/2, par. 16-133.1
11    40 ILCS 5/16-133.6 new
12    40 ILCS 5/16-143.1from Ch. 108 1/2, par. 16-143.1
13    40 ILCS 5/16-190.5
14    40 ILCS 5/16-190.6
15    40 ILCS 5/16-203