093_HB1544

 
                                     LRB093 06266 EFG 06379 b

 1        AN ACT in relation to public employee benefits.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The  Illinois  Pension  Code  is  amended  by
 5    changing Sections 15-136 and 15-157 as follows:

 6        (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
 7        Sec.   15-136.  Retirement   annuities   -  Amount.   The
 8    provisions  of  this  Section  15-136  apply  only  to  those
 9    participants who are participating in the traditional benefit
10    package or the portable benefit package and do not  apply  to
11    participants who are participating in the self-managed plan.
12        (a)  The  amount  of  a participant's retirement annuity,
13    expressed in the form of  a  single-life  annuity,  shall  be
14    determined  by whichever of the following rules is applicable
15    and provides the largest annuity:
16        Rule 1:  The retirement annuity shall be 1.67%  of  final
17    rate  of  earnings for each of the first 10 years of service,
18    1.90% for each of the next 10 years  of  service,  2.10%  for
19    each  year  of  service in excess of 20 but not exceeding 30,
20    and 2.30% for each year in excess of 30; or for  persons  who
21    retire on or after January 1, 1998, 2.2% of the final rate of
22    earnings for each year of service.
23        Rule  2:  The  retirement annuity shall be the sum of the
24    following,  determined   from   amounts   credited   to   the
25    participant  in  accordance with the actuarial tables and the
26    prescribed rate  of  interest  in  effect  at  the  time  the
27    retirement annuity begins:
28             (i)  the  normal annuity which can be provided on an
29        actuarially equivalent basis, by the  accumulated  normal
30        contributions as of the date the annuity begins; and
31             (ii)  an  annuity  from employer contributions of an
 
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 1        amount  equal  to  that  which  can  be  provided  on  an
 2        actuarially equivalent basis from the accumulated  normal
 3        contributions  made  by  the  participant  under  Section
 4        15-113.6  and  Section  15-113.7 plus 1.4 times all other
 5        accumulated normal contributions made by the participant.
 6        With respect to  a  police  officer  or  firefighter  who
 7    retires  on  or after August 14, 1998, the accumulated normal
 8    contributions taken into account under clauses (i)  and  (ii)
 9    of   this   Rule   2  shall  include  the  additional  normal
10    contributions made by the police officer or firefighter under
11    Section 15-157(a).
12        The amount of a retirement annuity calculated under  this
13    Rule  2  shall  be  computed  solely  on  the  basis  of  the
14    participant's  accumulated normal contributions, as specified
15    in this Rule  and  defined  in  Section  15-116.  Neither  an
16    employee  or employer contribution for early retirement under
17    Section 15-136.2 nor any other employer contribution shall be
18    used in the calculation of the amount of a retirement annuity
19    under this Rule 2.
20        This amendatory Act of the 91st  General  Assembly  is  a
21    clarification   of   existing   law   and  applies  to  every
22    participant and annuitant without regard to whether status as
23    an employee terminates before  the  effective  date  of  this
24    amendatory Act.
25        Rule  3:  The  retirement annuity of a participant who is
26    employed at least one-half time during the  period  on  which
27    his or her final rate of earnings is based, shall be equal to
28    the   participant's  years  of  service  not  to  exceed  30,
29    multiplied by (1) $96 if  the  participant's  final  rate  of
30    earnings  is  less than $3,500, (2) $108 if the final rate of
31    earnings is at least $3,500 but less than $4,500, (3) $120 if
32    the final rate of earnings is at least $4,500 but  less  than
33    $5,500,  (4)  $132  if the final rate of earnings is at least
34    $5,500 but less than $6,500, (5) $144 if the  final  rate  of
 
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 1    earnings is at least $6,500 but less than $7,500, (6) $156 if
 2    the  final  rate of earnings is at least $7,500 but less than
 3    $8,500, (7) $168 if the final rate of earnings  is  at  least
 4    $8,500  but  less than $9,500, and (8) $180 if the final rate
 5    of earnings is $9,500 or more, except that  the  annuity  for
 6    those   persons   having   made  an  election  under  Section
 7    15-154(a-1)  shall  be  calculated  and  payable  under   the
 8    portable   retirement   benefit   program   pursuant  to  the
 9    provisions of Section 15-136.4.
10        Rule 4:  A participant who is at least age 50 and has  25
11    or  more years of service as a police officer or firefighter,
12    and a participant who is age 55 or over and has at  least  20
13    but  less  than  25  years  of service as a police officer or
14    firefighter, shall be entitled to a retirement annuity of  3%
15    2 1/4% of the final rate of earnings for each of the first 10
16    years  of  service as a police officer or firefighter, 2 1/2%
17    for each of the next 10 years of service as a police  officer
18    or  firefighter,  and  2 3/4%  for  each year of service as a
19    police  officer  or  firefighter  in  excess  of   20.    The
20    retirement  annuity  for  all other service shall be computed
21    under Rule 1.
22        For purposes of this Rule 4, a participant's service as a
23    firefighter shall also include the following:
24             (i)  service that is performed while the  person  is
25        an employee under subsection (h) of Section 15-107; and
26             (ii)  in  the  case  of  an  individual  who  was  a
27        participating employee employed in the fire department of
28        the  University  of  Illinois's  Champaign-Urbana  campus
29        immediately   prior  to  the  elimination  of  that  fire
30        department and who immediately after the  elimination  of
31        that  fire department transferred to another job with the
32        University of Illinois, service performed as an  employee
33        of  the  University  of Illinois in a position other than
34        police officer or firefighter,  from  the  date  of  that
 
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 1        transfer until the employee's next termination of service
 2        with the University of Illinois.
 3        Rule  5:  The  retirement  annuity  of  a participant who
 4    elected early retirement  under  the  provisions  of  Section
 5    15-136.2  and  who,  on  or before February 16, 1995, brought
 6    administrative proceedings  pursuant  to  the  administrative
 7    rules  adopted  by the System to challenge the calculation of
 8    his or her  retirement  annuity  shall  be  the  sum  of  the
 9    following,   determined   from   amounts   credited   to  the
10    participant in accordance with the actuarial tables  and  the
11    prescribed  rate  of  interest  in  effect  at  the  time the
12    retirement annuity begins:
13             (i)  the normal annuity which can be provided on  an
14        actuarially  equivalent  basis, by the accumulated normal
15        contributions as of the date the annuity begins; and
16             (ii)  an annuity from employer contributions  of  an
17        amount  equal  to  that  which  can  be  provided  on  an
18        actuarially  equivalent basis from the accumulated normal
19        contributions  made  by  the  participant  under  Section
20        15-113.6 and Section 15-113.7 plus 1.4  times  all  other
21        accumulated normal contributions made by the participant;
22        and
23             (iii)  an  annuity  which  can  be  provided  on  an
24        actuarially    equivalent   basis   from   the   employee
25        contribution for early retirement under Section 15-136.2,
26        and an annuity from employer contributions of  an  amount
27        equal  to  that  which  can be provided on an actuarially
28        equivalent basis from the employee contribution for early
29        retirement under Section 15-136.2.
30        In no event shall a retirement annuity under this Rule  5
31    be  lower  than the amount obtained by adding (1) the monthly
32    amount  obtained  by  dividing  the  combined  employee   and
33    employer  contributions  made  under  Section 15-136.2 by the
34    System's annuity factor for the age of the participant at the
 
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 1    beginning of the annuity payment period and  (2)  the  amount
 2    equal  to  the participant's annuity if calculated under Rule
 3    1, reduced under Section 15-136(b) as if no contributions had
 4    been made under Section 15-136.2.
 5        With respect to a participant  who  is  qualified  for  a
 6    retirement annuity under this Rule 5 whose retirement annuity
 7    began before the effective date of this amendatory Act of the
 8    91st  General Assembly, and for whom an employee contribution
 9    was made under Section 15-136.2, the System shall recalculate
10    the retirement annuity under this Rule 5 and  shall  pay  any
11    additional  amounts  due  in  the  manner provided in Section
12    15-186.1 for benefits mistakenly set too low.
13        The amount of a retirement annuity calculated under  this
14    Rule  5  shall  be  computed  solely  on  the  basis of those
15    contributions specifically set forth in this Rule 5.   Except
16    as  provided  in  clause  (iii)  of  this  Rule 5, neither an
17    employee nor employer contribution for early retirement under
18    Section 15-136.2, nor any other employer contribution,  shall
19    be  used  in  the  calculation  of the amount of a retirement
20    annuity under this Rule 5.
21        The General Assembly has adopted the changes set forth in
22    Section 25  of  this  amendatory  Act  of  the  91st  General
23    Assembly  in  recognition  that the decision of the Appellate
24    Court for the Fourth District in Mattis v. State Universities
25    Retirement System et al. might be deemed to give  some  right
26    to  the  plaintiff in that case.  The changes made by Section
27    25 of this amendatory Act of the 91st General Assembly are  a
28    legislative  implementation  of the decision of the Appellate
29    Court for the Fourth District in Mattis v. State Universities
30    Retirement System et al. with respect to that plaintiff.
31        The changes made by Section 25 of this amendatory Act  of
32    the 91st General Assembly apply without regard to whether the
33    person is in service as an employee on or after its effective
34    date.
 
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 1        (b)  The  retirement annuity provided under Rules 1 and 3
 2    above shall be reduced by  1/2  of  1%  for  each  month  the
 3    participant  is  under  age  60  at  the  time of retirement.
 4    However, this reduction shall  not  apply  in  the  following
 5    cases:
 6             (1)  For  a  disabled  participant  whose disability
 7        benefits have been discontinued because  he  or  she  has
 8        exhausted   eligibility  for  disability  benefits  under
 9        clause (6) of Section 15-152;
10             (2)  For a participant who has at least  the  number
11        of  years  of service required to retire at any age under
12        subsection (a) of Section 15-135; or
13             (3)  For that portion of a retirement annuity  which
14        has   been   provided   on  account  of  service  of  the
15        participant during periods when he or she  performed  the
16        duties  of  a  police  officer  or  firefighter, if these
17        duties were performed for at least  5  years  immediately
18        preceding the date the retirement annuity is to begin.
19        (c)  The  maximum retirement annuity provided under Rules
20    1, 2, 4, and 5 shall be the lesser of (1) the annual limit of
21    benefits as specified in Section 415 of the Internal  Revenue
22    Code  of  1986,  as  such Section may be amended from time to
23    time and as such benefit limits  shall  be  adjusted  by  the
24    Commissioner  of  Internal Revenue, and (2) 80% of final rate
25    of earnings.
26        (d)  An annuitant whose status as an employee  terminates
27    after  August  14,  1969 shall receive automatic increases in
28    his or her retirement annuity as follows:
29        Effective January 1 immediately following  the  date  the
30    retirement  annuity  begins,  the  annuitant shall receive an
31    increase in his or her monthly retirement annuity  of  0.125%
32    of the monthly retirement annuity provided under Rule 1, Rule
33    2,  Rule  3,  Rule  4,  or Rule 5, contained in this Section,
34    multiplied by the number of full months  which  elapsed  from
 
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 1    the  date the retirement annuity payments began to January 1,
 2    1972, plus 0.1667% of such annuity, multiplied by the  number
 3    of  full  months  which  elapsed from January 1, 1972, or the
 4    date the retirement  annuity  payments  began,  whichever  is
 5    later,  to  January  1,  1978,  plus  0.25%  of  such annuity
 6    multiplied by the number of full months  which  elapsed  from
 7    January  1, 1978, or the date the retirement annuity payments
 8    began, whichever is later,  to  the  effective  date  of  the
 9    increase.
10        The  annuitant  shall  receive  an increase in his or her
11    monthly retirement  annuity  on  each  January  1  thereafter
12    during  the  annuitant's  life  of  3% of the monthly annuity
13    provided under Rule 1, Rule 2, Rule 3,  Rule  4,  or  Rule  5
14    contained  in  this  Section.   The  change  made  under this
15    subsection by P.A. 81-970 is effective January  1,  1980  and
16    applies  to  each  annuitant  whose  status  as  an  employee
17    terminates before or after that date.
18        Beginning January 1, 1990, all automatic annual increases
19    payable   under   this  Section  shall  be  calculated  as  a
20    percentage of the total annuity payable at the  time  of  the
21    increase,  including  all  increases previously granted under
22    this Article.
23        The change made in this subsection  by  P.A.  85-1008  is
24    effective  January 26, 1988, and is applicable without regard
25    to whether status as an employee terminated before that date.
26        (e)  If, on January 1, 1987, or the date  the  retirement
27    annuity payment period begins, whichever is later, the sum of
28    the  retirement  annuity  provided  under Rule 1 or Rule 2 of
29    this Section and  the  automatic  annual  increases  provided
30    under  the  preceding subsection or Section 15-136.1, amounts
31    to less than the retirement annuity which would  be  provided
32    by  Rule  3,  the retirement annuity shall be increased as of
33    January 1, 1987, or the date the retirement  annuity  payment
34    period  begins, whichever is later, to the amount which would
 
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 1    be provided by Rule 3 of this Section. Such increased  amount
 2    shall  be considered as the retirement annuity in determining
 3    benefits provided under other Sections of this Article.  This
 4    paragraph  applies  without  regard  to  whether status as an
 5    employee  terminated  before  the  effective  date  of   this
 6    amendatory  Act  of  1987,  provided  that  the annuitant was
 7    employed at least one-half time during the  period  on  which
 8    the final rate of earnings was based.
 9        (f)  A participant is entitled to such additional annuity
10    as may be provided on an actuarially equivalent basis, by any
11    accumulated  additional  contributions  to his or her credit.
12    However, the additional contributions made by the participant
13    toward the automatic increases in annuity provided under this
14    Section shall not be taken into account  in  determining  the
15    amount of such additional annuity.
16        (g)  If,  (1)  by law, a function of a governmental unit,
17    as defined by Section 20-107 of this Code, is transferred  in
18    whole  or  in  part  to  an  employer,  and (2) a participant
19    transfers employment from  such  governmental  unit  to  such
20    employer  within 6 months after the transfer of the function,
21    and (3) the sum of (A) the annuity payable to the participant
22    under Rule 1, 2, or 3 of this Section  (B)  all  proportional
23    annuities  payable to the participant by all other retirement
24    systems covered by Article 20, and (C)  the  initial  primary
25    insurance  amount  to which the participant is entitled under
26    the Social Security Act, is less than the retirement  annuity
27    which  would  have  been  payable if all of the participant's
28    pension credits  validated  under  Section  20-109  had  been
29    validated  under this system, a supplemental annuity equal to
30    the difference in  such  amounts  shall  be  payable  to  the
31    participant.
32        (h)  On January 1, 1981, an annuitant who was receiving a
33    retirement  annuity  on  or before January 1, 1971 shall have
34    his or her retirement annuity then being  paid  increased  $1
 
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 1    per  month for each year of creditable service. On January 1,
 2    1982, an annuitant  whose  retirement  annuity  began  on  or
 3    before  January  1,  1977,  shall  have his or her retirement
 4    annuity then being paid increased $1 per month for each  year
 5    of creditable service.
 6        (i)  On  January  1, 1987, any annuitant whose retirement
 7    annuity began on or before January 1, 1977,  shall  have  the
 8    monthly retirement annuity increased by an amount equal to 8¢
 9    per year of creditable service times the number of years that
10    have elapsed since the annuity began.
11    (Source:  P.A.  91-887  (Sections  20  and  25), eff. 7-6-00;
12    92-16, eff. 6-28-01.)

13        (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
14        Sec. 15-157.  Employee Contributions.
15        (a)  Each participating employee shall make contributions
16    towards the retirement benefits payable under the  retirement
17    program  applicable  to  the  employee  from  each payment of
18    earnings applicable to employment under this  system  on  and
19    after  the  date of becoming a participant as follows:  Prior
20    to September 1, 1949, 3 1/2% of earnings; from  September  1,
21    1949 to August 31, 1955, 5%; from September 1, 1955 to August
22    31,  1969,  6%;  from  September  1,  1969,  6  1/2%.   These
23    contributions are to be considered  as  normal  contributions
24    for purposes of this Article.
25        Each  participant  who is a police officer or firefighter
26    shall make normal contributions of 8%  through  December  31,
27    2003,  9%  in  2004,  10%  in  2005,  and  11%  in  2006  and
28    thereafter,   of  each  payment  of  earnings  applicable  to
29    employment as a police  officer  or  firefighter  under  this
30    system  on or after September 1, 1981, unless he or she files
31    with the board within 60 days after  the  effective  date  of
32    this  amendatory  Act  of  1991  or  60  days after the board
33    receives notice that he  or  she  is  employed  as  a  police
 
                            -10-     LRB093 06266 EFG 06379 b
 1    officer  or firefighter, whichever is later, a written notice
 2    waiving the retirement formula provided by Rule 4 of  Section
 3    15-136.   This waiver shall be irrevocable.  If a participant
 4    had met the conditions set forth in Section 15-132.1 prior to
 5    the effective date of this amendatory Act of 1991 but  failed
 6    to  make the additional normal contributions required by this
 7    paragraph,  he  or  she  may  elect  to  pay  the  additional
 8    contributions plus compound interest at the  effective  rate.
 9    If  such  payment is received by the board, the service shall
10    be considered as police officer service  in  calculating  the
11    retirement  annuity  under  Rule  4 of Section 15-136.  While
12    performing service described in clause (i) or (ii) of Rule  4
13    of  Section  15-136, a participating employee shall be deemed
14    to  be  employed  as  a  firefighter  for  the   purpose   of
15    determining  the  rate  of  employee contributions under this
16    Section.
17        (b)  Starting  September  1,  1969,  each   participating
18    employee  shall make additional contributions of 1/2 of 1% of
19    earnings to finance a portion  of  the  cost  of  the  annual
20    increases   in  retirement  annuity  provided  under  Section
21    15-136, except that  with  respect  to  participants  in  the
22    self-managed  plan this additional contribution shall be used
23    to  finance  the  benefits  obtained  under  that  retirement
24    program.
25        (c)  In addition to the amounts described in  subsections
26    (a)  and  (b)  of  this  Section, each participating employee
27    shall make contributions of 1% of earnings  applicable  under
28    this  system  on and after August 1, 1959.  The contributions
29    made  under  this  subsection  (c)  shall  be  considered  as
30    survivor's  insurance  contributions  for  purposes  of  this
31    Article if the employee  is  covered  under  the  traditional
32    benefit  package,  and such contributions shall be considered
33    as additional contributions for purposes of this  Article  if
34    the employee is participating in the self-managed plan or has
 
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 1    elected  to  participate  in the portable benefit package and
 2    has  completed  the  applicable  one-year   waiting   period.
 3    Contributions  in  excess  of  $80  during  any  fiscal  year
 4    beginning before August 31, 1969 and in excess of $120 during
 5    any  fiscal  year thereafter until September 1, 1971 shall be
 6    considered as additional contributions for purposes  of  this
 7    Article.
 8        (d)  If the board by board rule so permits and subject to
 9    such  conditions  and  limitations as may be specified in its
10    rules, a participant may make other additional  contributions
11    of  such percentage of earnings or amounts as the participant
12    shall elect in a  written  notice  thereof  received  by  the
13    board.
14        (e)  That  fraction  of a participant's total accumulated
15    normal contributions, the numerator of which is equal to  the
16    number  of  years  of  service  in  excess  of  that which is
17    required to qualify for the maximum retirement  annuity,  and
18    the denominator of which is equal to the total service of the
19    participant,  shall  be  considered as accumulated additional
20    contributions.  The determination of the  applicable  maximum
21    annuity  and the adjustment in contributions required by this
22    provision shall be made as of the date of  the  participant's
23    retirement.
24        (f)  Notwithstanding   the   foregoing,  a  participating
25    employee shall not be required to  make  contributions  under
26    this  Section  after  the date upon which continuance of such
27    contributions would otherwise cause  his  or  her  retirement
28    annuity to exceed the maximum retirement annuity as specified
29    in clause (1) of subsection (c) of Section 15-136.
30        (g)  A  participating employee may make contributions for
31    the purchase of service credit under this Article.
32    (Source:  P.A.  90-32,  eff.  6-27-97;  90-65,  eff.  7-7-97;
33    90-448, eff. 8-16-97;  90-511,  eff.  8-22-97;  90-576,  eff.
34    3-31-98; 90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
 
                            -12-     LRB093 06266 EFG 06379 b
 1        Section  99.  Effective date.  This Act takes effect upon
 2    becoming law.