103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1825

 

Introduced 2/9/2023, by Sen. Karina Villa

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/7-141  from Ch. 108 1/2, par. 7-141
40 ILCS 5/7-144  from Ch. 108 1/2, par. 7-144
30 ILCS 805/8.47 new

    Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that if any annuitant under the Article must be considered a participating employee because there was not a separation from service and the participating municipality or participating instrumentality that employs or re-employs that annuitant knowingly fails to notify the Board to suspend the annuity, the participating municipality or participating instrumentality may be required to reimburse the Fund for an amount up to the total (instead of one-half of the total) of any annuity payments made to the annuitant after the date the annuity should have been suspended, as determined by the Board, less any amount actually repaid by the annuitant. Removes language providing that the provisions shall not apply if the annuitant returned to work for the employer for less than 12 months. Adds similar provisions to a provision concerning separation from service and entitlement to a retirement annuity. Effective January 1, 2024.


LRB103 24928 RPS 51262 b

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY

 

 

A BILL FOR

 

SB1825LRB103 24928 RPS 51262 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
5changing Sections 7-141 and 7-144 as follows:
 
6    (40 ILCS 5/7-141)  (from Ch. 108 1/2, par. 7-141)
7    Sec. 7-141. Retirement annuities; conditions. Retirement
8annuities shall be payable as hereinafter set forth:
9    (a) A participating employee who, regardless of cause, is
10separated from the service of all participating municipalities
11and instrumentalities thereof and participating
12instrumentalities shall be entitled to a retirement annuity
13provided:
14        1. He is at least age 55 if he is a Tier 1 regular
15    employee, he is age 62 if he is a Tier 2 regular employee,
16    or, in the case of a person who is eligible to have his
17    annuity calculated under Section 7-142.1, he is at least
18    age 50;
19        2. He is not entitled to receive earnings for
20    employment in a position requiring him, or entitling him
21    to elect, to be a participating employee;
22        3. The amount of his annuity, before the application
23    of paragraph (b) of Section 7-142 is at least $10 per

 

 

SB1825- 2 -LRB103 24928 RPS 51262 b

1    month;
2        4. If he first became a participating employee after
3    December 31, 1961 and is a Tier 1 regular employee, he has
4    at least 8 years of service, or, if he is a Tier 2 regular
5    member, he has at least 10 years of service. This service
6    requirement shall not apply to any participating employee,
7    regardless of participation date, if the General Assembly
8    terminates the Fund.
9    (a-5) If any annuitant under this Article must be
10considered a participating employee because there was not a
11separation from service as required by subsection (a) of this
12Section and the participating municipality or participating
13instrumentality that employs or re-employs that annuitant
14knowingly fails to notify the Board to suspend the annuity,
15the participating municipality or participating
16instrumentality may be required to reimburse the Fund for an
17amount up to the total of any annuity payments made to the
18annuitant after the date the annuity should have been
19suspended, as determined by the Board, less any amount
20actually repaid by the annuitant. In no case shall the total
21amount repaid by the annuitant plus any amount reimbursed by
22the employer to the Fund be more than the total of all annuity
23payments made to the annuitant after the date the annuity
24should have been suspended.
25    (b) Retirement annuities shall be payable:
26        1. As provided in Section 7-119;

 

 

SB1825- 3 -LRB103 24928 RPS 51262 b

1        2. Except as provided in item 3, upon receipt by the
2    fund of a written application. The effective date may be
3    not more than one year prior to the date of the receipt by
4    the fund of the application;
5        3. Upon attainment of the required age of distribution
6    under Section 401(a)(9) of the Internal Revenue Code of
7    1986, as amended, if the member (i) is no longer in
8    service, and (ii) is otherwise entitled to an annuity
9    under this Article;
10        4. To the beneficiary of the deceased annuitant for
11    the unpaid amount accrued to date of death, if any.
12(Source: P.A. 102-210, Article 5, Section 5-5, eff. 7-30-21;
13102-210, Article 10, Section 10-5, eff. 1-1-22; 102-813, eff.
145-13-22.)
 
15    (40 ILCS 5/7-144)  (from Ch. 108 1/2, par. 7-144)
16    Sec. 7-144. Retirement annuities; suspended annuities -
17suspended during employment.
18    (a) If any person receiving any annuity again becomes an
19employee and receives earnings from employment in a position
20requiring him, or entitling him to elect, to become a
21participating employee, then the annuity payable to such
22employee shall be suspended as of the first 1st day of the
23month coincidental with or next following the date upon which
24such person becomes such an employee, unless the person is
25authorized under subsection (b) of Section 7-137.1 of this

 

 

SB1825- 4 -LRB103 24928 RPS 51262 b

1Code to continue receiving a retirement annuity during that
2period. Upon proper qualification of the participating
3employee payment of such annuity may be resumed on the first
41st day of the month following such qualification and upon
5proper application therefor. The participating employee in
6such case shall be entitled to a supplemental annuity arising
7from service and credits earned subsequent to such re-entry as
8a participating employee.
9    Notwithstanding any other provision of this Article, an
10annuitant shall be considered a participating employee if he
11or she returns to work as an employee with a participating
12employer and works more than 599 hours annually (or 999 hours
13annually with a participating employer that has adopted a
14resolution pursuant to subsection (e) of Section 7-137 of this
15Code). Each of these annual periods shall commence on the
16month and day upon which the annuitant is first employed with
17the participating employer following the effective date of the
18annuity.
19    (a-5) If any annuitant under this Article must be
20considered a participating employee per the provisions of
21subsection (a) of this Section, and the participating
22municipality or participating instrumentality that employs or
23re-employs that annuitant knowingly fails to notify the Board
24to suspend the annuity, the participating municipality or
25participating instrumentality may be required to reimburse the
26Fund for an amount up to one-half of the total of any annuity

 

 

SB1825- 5 -LRB103 24928 RPS 51262 b

1payments made to the annuitant after the date the annuity
2should have been suspended, as determined by the Board, less
3any amount actually repaid by the annuitant. In no case shall
4the total amount repaid by the annuitant plus any amount
5reimbursed by the employer to the Fund be more than the total
6of all annuity payments made to the annuitant after the date
7the annuity should have been suspended. This subsection shall
8not apply if the annuitant returned to work for the employer
9for less than 12 months.
10    The Fund shall notify all annuitants that they must notify
11the Fund immediately if they return to work for any
12participating employer. The notification by the Fund shall
13occur upon retirement and no less than annually thereafter in
14a format determined by the Fund. The Fund shall also develop
15and maintain a system to track annuitants who have returned to
16work and notify the participating employer and annuitant at
17least annually of the limitations on returning to work under
18this Section.
19    (b) Supplemental annuities to persons who return to
20service for less than 48 months shall be computed under the
21provisions of Sections 7-141, 7-142, and 7-143. In determining
22whether an employee is eligible for an annuity which requires
23a minimum period of service, his entire period of service
24shall be taken into consideration but the supplemental annuity
25shall be based on earnings and service in the supplemental
26period only. The effective date of the suspended and

 

 

SB1825- 6 -LRB103 24928 RPS 51262 b

1supplemental annuity for the purpose of increases after
2retirement shall be considered to be the effective date of the
3suspended annuity.
4    (c) Supplemental annuities to persons who return to
5service for 48 months or more shall be a monthly amount
6determined as follows:
7        (1) An amount shall be computed under subparagraph b
8    of paragraph (1) of subsection (a) of Section 7-142,
9    considering all of the service credits of the employee. ;
10        (2) The actuarial value in monthly payments for life
11    of the annuity payments made before suspension shall be
12    determined and subtracted from the amount determined in
13    paragraph (1) above. ;
14        (3) The monthly amount of the suspended annuity, with
15    any applicable increases after retirement computed from
16    the effective date to the date of reinstatement, shall be
17    subtracted from the amount determined in paragraph (2)
18    above and the remainder shall be the amount of the
19    supplemental annuity provided that this amount shall not
20    be less than the amount computed under subsection (b) of
21    this Section.
22        (4) The suspended annuity shall be reinstated at an
23    amount including any increases after retirement from the
24    effective date to date of reinstatement.
25        (5) The effective date of the combined suspended and
26    supplemental annuities for the purposes of increases after

 

 

SB1825- 7 -LRB103 24928 RPS 51262 b

1    retirement shall be considered to be the effective date of
2    the supplemental annuity.
3    (d) If a Tier 2 regular employee becomes a member or
4participant under any other system or fund created by this
5Code and is employed on a full-time basis, except for those
6members or participants exempted from the provisions of
7subsection (a) of Section 1-160 of this Code (other than a
8participating employee under this Article), then the person's
9retirement annuity shall be suspended during that employment.
10Upon termination of that employment, the person's retirement
11annuity shall resume and be recalculated as required by this
12Section.
13    (e) If a Tier 2 regular employee first began participation
14on or after January 1, 2012 and is receiving a retirement
15annuity and accepts on a contractual basis a position to
16provide services to a governmental entity from which he or she
17has retired, then that person's annuity or retirement pension
18shall be suspended during that contractual service,
19notwithstanding the provisions of any other Section in this
20Article. Such annuitant shall notify the Fund, as well as his
21or her contractual employer, of his or her retirement status
22before accepting contractual employment. A person who fails to
23submit such notification shall be guilty of a Class A
24misdemeanor and required to pay a fine of $1,000. Upon
25termination of that contractual employment, the person's
26retirement annuity shall resume and be recalculated as

 

 

SB1825- 8 -LRB103 24928 RPS 51262 b

1required by this Section.
2(Source: P.A. 102-210, eff. 1-1-22; revised 8-19-22.)
 
3    Section 90. The State Mandates Act is amended by adding
4Section 8.47 as follows:
 
5    (30 ILCS 805/8.47 new)
6    Sec. 8.47. Exempt mandate. Notwithstanding Sections 6 and
78 of this Act, no reimbursement by the State is required for
8the implementation of any mandate created by this amendatory
9Act of the 103rd General Assembly.
 
10    Section 99. Effective date. This Act takes effect January
111, 2024.