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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB0647
Introduced 2/8/2007, by Sen. A. J. Wilhelmi SYNOPSIS AS INTRODUCED: |
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40 ILCS 5/7-139 |
from Ch. 108 1/2, par. 7-139 |
30 ILCS 805/8.31 new |
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Amends the IMRF Article of the Illinois Pension Code. Increases the amount of creditable service a participating employee may be granted for service in the armed forces of the United States from 24 months to 48 months. Provides that, if payment is made during
the 6-month period that begins one month after the effective date, the required interest shall be at the rate of 2.5%
per year, compounded annually; otherwise, the required interest shall be
calculated at the regular interest rate. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
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FISCAL NOTE ACT MAY APPLY |
PENSION IMPACT NOTE ACT MAY APPLY |
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT |
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A BILL FOR
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| AN ACT concerning public employee benefits.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Pension Code is amended by changing |
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| Section 7-139 as follows:
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| (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
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| Sec. 7-139. Credits and creditable service to employees.
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| (a) Each participating employee shall be granted credits |
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| and creditable
service, for purposes of determining the amount |
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| of any annuity or benefit
to which he or a beneficiary is |
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| entitled, as follows:
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| 1. For prior service: Each participating employee who |
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| is an employee
of a participating municipality or |
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| participating instrumentality on the
effective date shall |
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| be granted creditable service, but no credits under
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| paragraph 2 of this subsection (a), for periods of prior |
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| service for which
credit has not been received under any |
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| other pension fund or retirement system
established under |
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| this Code, as follows:
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| If the effective date of participation for the |
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| participating municipality
or participating |
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| instrumentality is on or before January 1, 1998, creditable
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| service shall be granted for the entire period of prior |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| service with that
employer without any employee |
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| contribution.
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| If the effective date of participation for the |
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| participating municipality
or participating |
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| instrumentality is after January 1, 1998, creditable
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| service shall be granted for the last 20% of the period of |
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| prior service with
that employer, but no more than 5 years, |
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| without any employee contribution. A
participating |
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| employee may establish creditable service for the |
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| remainder of
the period of prior service with that employer |
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| by making an application in
writing, accompanied by payment |
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| of an employee contribution in an
amount determined by the |
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| Fund, based on the employee contribution rates in
effect at |
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| the time of application for the creditable service and the |
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| employee's
salary rate on the effective date of |
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| participation for that employer, plus
interest at the |
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| effective rate from the date of the prior service to the |
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| date
of payment. Application for this creditable service |
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| may be made at any time
while the employee is still in |
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| service.
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| A municipality that (i) has at least 35 employees; (ii) |
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| is located in a county with at least 2,000,000 inhabitants; |
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| and (iii) maintains an independent defined benefit pension |
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| plan for the benefit of its eligible employees may restrict |
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| creditable service in whole or in part for periods of prior |
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| service with the employer if the governing body of the |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| municipality adopts an irrevocable resolution to restrict |
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| that creditable service and files the resolution with the |
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| board before the municipality's effective date of |
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| participation.
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| Any person who has withdrawn from the service of a |
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| participating
municipality
or participating |
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| instrumentality prior to the effective date, who reenters
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| the service of the same municipality or participating |
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| instrumentality after
the effective date and becomes a |
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| participating employee is entitled to
creditable service |
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| for prior service as otherwise provided in this
subdivision |
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| (a)(1) only if he or she renders 2 years of service as a
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| participating employee after the effective date. |
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| Application
for such service must be made while in a |
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| participating status.
The salary rate to be used in the |
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| calculation of the required employee
contribution, if any, |
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| shall be the employee's salary rate at the time of first
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| reentering service with the employer after the employer's |
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| effective date of
participation.
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| 2. For current service, each participating employee |
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| shall be
credited with:
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| a. Additional credits of amounts equal to each |
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| payment of additional
contributions received from him |
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| under Section 7-173, as of the
date the corresponding |
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| payment of earnings is payable to him.
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| b. Normal credits of amounts equal to each payment |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| of normal
contributions received from him, as of the |
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| date the corresponding payment of
earnings is payable |
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| to him, and normal contributions made for the purpose |
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| of
establishing out-of-state service credits as |
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| permitted under the conditions set
forth in paragraph 6 |
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| of this subsection (a).
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| c. Municipality credits in an amount equal to 1.4 |
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| times the normal
credits, except those established by |
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| out-of-state service credits, as of
the date of |
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| computation of any benefit if these credits would |
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| increase
the benefit.
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| d. Survivor credits equal to each payment of |
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| survivor contributions
received from the participating |
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| employee as of the date the
corresponding payment of |
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| earnings is payable, and survivor contributions made
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| for the purpose of establishing out-of-state service |
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| credits.
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| 3. For periods of temporary and total and permanent |
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| disability
benefits, each employee receiving disability |
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| benefits shall be granted
creditable service for the period |
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| during which disability benefits are
payable. Normal and |
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| survivor credits, based upon the rate of earnings
applied |
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| for disability benefits, shall also be granted if such |
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| credits
would result in a higher benefit to any such |
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| employee or his
beneficiary.
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| 4. For authorized leave of absence without pay: A |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| participating
employee shall be granted credits and |
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| creditable service for periods of
authorized leave of |
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| absence without pay under the following
conditions:
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| a. An application for credits and creditable |
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| service is submitted to the
board while the employee is |
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| in a status of
active employment, and within 2 years |
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| after termination of the
leave of absence period for |
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| which credits and creditable service are
sought.
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| b. Not more than 12 complete months of creditable |
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| service
for authorized leave of absence without pay |
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| shall be counted for purposes of
determining any |
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| benefits payable under this Article.
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| c. Credits and creditable service shall be granted |
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| for leave of
absence only if such leave is approved by |
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| the governing body of the
municipality, including |
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| approval of the estimated cost thereof to the
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| municipality as determined by the fund, and employee |
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| contributions, plus
interest at the effective rate |
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| applicable for each year from the end of
the period of |
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| leave to date of payment, have been paid to the fund in
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| accordance with Section 7-173. The contributions shall |
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| be computed upon the
assumption earnings continued |
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| during the period of leave at the rate in
effect when |
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| the leave began.
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| d. Benefits under the provisions of Sections |
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| 7-141, 7-146, 7-150
and 7-163 shall become payable to |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| employees on authorized leave of
absence, or their |
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| designated beneficiary, only if such leave of absence
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| is creditable hereunder, and if the employee has at |
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| least one year of
creditable service other than the |
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| service granted for leave of absence.
Any employee |
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| contributions due may be deducted from any benefits
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| payable.
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| e. No credits or creditable service shall be |
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| allowed for leave of
absence without pay during any |
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| period of prior service.
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| 5. For military service: The governing body of a |
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| municipality or
participating instrumentality may elect to |
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| allow creditable service to
participating employees who |
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| leave their employment to serve in the armed
forces of the |
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| United States for all periods of such service, provided
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| that the person returns to active employment within 90 days |
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| after
completion
of full time active duty, but no |
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| creditable service shall be allowed such
person for any |
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| period that can be used in the computation of a pension
or |
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| any other pay or benefit, other than pay for active duty, |
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| for service
in any branch of the armed forces of the United |
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| States. If necessary to
the computation of any benefit, the |
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| board shall establish municipality
credits for |
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| participating employees under this paragraph on the
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| assumption that the employee received earnings at the rate |
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| received at
the time he left the employment to enter the |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| armed forces. A
participating employee in the armed forces |
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| shall not be considered an
employee during such period of |
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| service and no additional death and no
disability benefits |
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| are payable for death or disability during such period.
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| Any participating employee who left his employment |
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| with a
municipality or participating instrumentality to |
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| serve in the armed
forces of the United States and who |
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| again became a participating
employee within 90 days after |
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| completion of full time active duty by
entering the service |
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| of a different municipality or participating
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| instrumentality, which has elected to allow creditable |
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| service for
periods of military service under the preceding |
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| paragraph, shall also be
allowed creditable service for his |
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| period of military service on the
same terms that would |
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| apply if he had been employed, before entering
military |
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| service, by the municipality or instrumentality which |
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| employed
him after he left the military service and the |
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| employer costs arising in
relation to such grant of |
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| creditable service shall be charged to and
paid by that |
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| municipality or instrumentality.
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| Notwithstanding the foregoing, any participating |
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| employee
shall be entitled to creditable service as |
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| required by any federal law
relating to re-employment |
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| rights of persons who served in the United States
Armed |
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| Services. Such creditable service shall be granted upon |
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| payment by
the member of an amount equal to the employee |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| contributions which would
have been required had the |
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| employee continued in service at the same
rate of earnings |
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| during the military leave period, plus interest at
the |
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| effective rate.
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| 5.1. In addition to any creditable service established |
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| under
paragraph 5 of this subsection (a), creditable |
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| service may be granted for
up to 48
24 months of service in |
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| the armed forces of the United States.
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| In order to receive creditable service for military |
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| service under this
paragraph 5.1, a participating employee |
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| must (1) apply to the Fund
in writing and provide evidence |
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| of the military service that is satisfactory
to the Board; |
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| (2) obtain the written approval of the current employer; |
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| and (3)
make contributions to the Fund equal to (i)
the |
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| employee contributions that would have been required had |
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| the service been
rendered as a member, plus (ii) an amount |
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| determined by the board to be equal
to the employer's |
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| normal cost of the benefits accrued for that military
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| service, plus (iii) interest on items (i) and (ii) from the |
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| date of first
membership in the Fund to the date of |
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| payment. If payment is made during
the 6-month period that |
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| begins one month
3 months after the effective date of this
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| amendatory Act of the 95th General Assembly
1997 , the |
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| required interest shall be at the rate of 2.5%
per year, |
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| compounded annually; otherwise, the required interest |
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| shall be
calculated at the regular interest rate.
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| The changes made to this paragraph 5.1 by this |
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| amendatory Act of the 95th General Assembly apply only to |
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| participating employees in service on or after its |
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| effective date.
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| 6. For out-of-state service: Creditable service shall |
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| be granted for
service rendered to an out-of-state local |
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| governmental body under the
following conditions: The |
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| employee had participated and has irrevocably
forfeited |
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| all rights to benefits in the out-of-state public employees
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| pension system; the governing body of his participating |
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| municipality or
instrumentality authorizes the employee to |
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| establish such service; the
employee has 2 years current |
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| service with this municipality or
participating |
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| instrumentality; the employee makes a payment of
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| contributions, which shall be computed at 8% (normal) plus |
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| 2% (survivor)
times length of service purchased times the |
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| average rate of earnings for the
first 2
years of service |
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| with the municipality or participating
instrumentality |
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| whose governing body authorizes the service established
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| plus interest at the effective rate on the date such |
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| credits are
established, payable from the date the employee |
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| completes the required 2
years of current service to date |
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| of payment. In no case shall more than
120 months of |
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| creditable service be granted under this provision.
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| 7. For retroactive service: Any employee who could have |
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| but did not
elect to become a participating employee, or |
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LRB095 10937 AMC 31230 b |
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| who should have been a
participant in the Municipal Public |
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| Utilities Annuity and Benefit Fund
before that fund was |
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| superseded, may receive creditable service for the
period |
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| of service not to exceed 50 months; however, a current or |
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| former
elected or appointed official of a participating |
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| municipality may establish credit under this paragraph 7 |
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| for more than 50
months of service as an official of that |
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| municipality, if the excess over 50 months is approved by |
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| resolution of the
governing body of the affected |
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| municipality filed with
the Fund before January 1, 2002.
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| Any employee who is a
participating employee on or |
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| after September 24, 1981 and who was
excluded from |
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| participation by the age restrictions removed by Public Act
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| 82-596 may receive creditable service for the period, on or |
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| after January
1, 1979, excluded by the age restriction and, |
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| in addition, if the governing
body of the participating |
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| municipality or participating instrumentality elects
to |
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| allow creditable service for all employees excluded by the |
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| age restriction
prior to January 1, 1979, for service |
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| during the period prior to that date
excluded by the age |
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| restriction. Any employee who was excluded from
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| participation by the age restriction removed by Public Act |
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| 82-596 and who is
not a participating employee on or after |
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| September 24, 1981 may receive
creditable service for |
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| service after January 1,
1979. Creditable service under |
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| this paragraph
shall be granted upon payment of the |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| employee contributions
which would have been required had |
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| he participated, with interest at the
effective rate for |
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| each year from the end of the period of service
established |
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| to date of payment.
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| 8. For accumulated unused sick leave: A participating |
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| employee who is
applying for a retirement annuity shall be |
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| entitled to creditable service
for that portion of the |
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| employee's accumulated unused sick leave
for which payment |
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| is not received, as follows:
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| a. Sick leave days shall be limited to those |
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| accumulated under a sick
leave plan established by a |
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| participating municipality or participating
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| instrumentality which is available to all employees or |
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| a class of employees.
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| b. Only sick leave days accumulated with a |
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| participating municipality or
participating |
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| instrumentality with which the employee was in service |
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| within
60 days of the effective date of his retirement |
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| annuity shall be credited;
If the employee was in |
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| service with more than one employer during this
period |
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| only the sick leave days with the employer with which |
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| the employee
has the greatest number of unpaid sick |
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| leave days shall be considered.
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| c. The creditable service granted shall be |
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| considered solely for the
purpose of computing the |
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| amount of the retirement annuity and shall not be
used |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| to establish any minimum service period required by any |
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| provision of the
Illinois Pension Code, the effective |
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| date of the retirement annuity, or the
final rate of |
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| earnings.
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| d. The creditable service shall be at the rate of |
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| 1/20 of a month for
each full sick day, provided that |
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| no more than 12 months may be credited
under this |
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| subdivision 8.
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| e. Employee contributions shall not be required |
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| for creditable service
under this subdivision 8.
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| f. Each participating municipality and |
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| participating instrumentality
with which an employee |
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| has service within 60 days of the effective date of
his |
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| retirement annuity shall certify to the board the |
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| number of accumulated
unpaid sick leave days credited |
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| to the employee at the time of termination
of service.
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| 9. For service transferred from another system: |
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| Credits and
creditable service shall be granted for service |
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| under Article 3, 4, 5, 14
or 16 of this Act, to any active |
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| member of this Fund, and to any
inactive member who has |
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| been a county sheriff, upon
transfer of such credits |
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| pursuant to Section 3-110.3, 4-108.3, 5-235,
14-105.6 or |
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| 16-131.4, and payment by the member of the amount by
which |
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| (1) the employer and employee contributions that would have |
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| been required
if he had participated in this Fund as a |
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| sheriff's law enforcement employee
during the period for |
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LRB095 10937 AMC 31230 b |
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| which credit is
being transferred, plus interest thereon at |
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| the effective rate for each
year, compounded annually, from |
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| the date of termination of the service for
which credit is |
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| being transferred to the date of payment, exceeds (2) the
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| amount actually transferred to the Fund.
Such transferred |
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| service shall be deemed to be service as a sheriff's law
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| enforcement employee for the purposes of Section 7-142.1.
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| 10. For service transferred from an Article 3 system |
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| under Section 3-110.8: Credits and
creditable service |
10 |
| shall be granted for service under Article 3 of this Act as |
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| provided in Section 3-110.8, to any active member of this |
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| Fund upon
transfer of such credits pursuant to Section |
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| 3-110.8. If the amount by
which (1) the employer and |
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| employee contributions that would have been required
if he |
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| had participated in this Fund during the period for which |
16 |
| credit is
being transferred, plus interest thereon at the |
17 |
| effective rate for each
year, compounded annually, from the |
18 |
| date of termination of the service for
which credit is |
19 |
| being transferred to the date of payment, exceeds (2) the
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| amount actually transferred to the Fund, then the amount of |
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| creditable service established under this paragraph 10 |
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| shall be reduced by a corresponding amount in accordance |
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| with the rules and procedures established under this |
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| paragraph 10.
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| The board shall establish by rule the manner of making |
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| the calculation required under
this paragraph 10, taking |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| into account the appropriate actuarial
assumptions; the |
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| member's service, age, and salary history; the level
of |
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| funding of the employer; and
any other factors that the |
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| board determines to be relevant.
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| (b) Creditable service - amount:
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| 1. One month of creditable service
shall be allowed for |
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| each month for which a participating employee made
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| contributions as required under Section 7-173, or for which |
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| creditable
service is otherwise granted hereunder. Not |
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| more than 1 month of
service shall be credited and counted |
11 |
| for 1 calendar month, and not more
than 1 year of service |
12 |
| shall be credited and counted for any calendar
year. A |
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| calendar month means a nominal month beginning on the first |
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| day
thereof, and a calendar year means a year beginning |
15 |
| January 1 and ending
December 31.
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16 |
| 2. A seasonal employee shall be given 12 months of |
17 |
| creditable
service if he renders the number of months of |
18 |
| service normally required
by the position in a 12-month |
19 |
| period and he remains in service for the
entire 12-month |
20 |
| period. Otherwise a fractional year of service in the
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21 |
| number of months of service rendered shall be credited.
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| 3. An intermittent employee shall be given creditable |
23 |
| service for
only those months in which a contribution is |
24 |
| made under Section 7-173.
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| (c) No application for correction of credits or creditable |
26 |
| service shall
be considered unless the board receives an |
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SB0647 |
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LRB095 10937 AMC 31230 b |
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| application for correction while
(1) the applicant is a |
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| participating employee and in active employment
with a |
3 |
| participating municipality or instrumentality, or (2) while |
4 |
| the
applicant is actively participating in a pension fund or |
5 |
| retirement
system which is a participating system under the |
6 |
| Retirement Systems
Reciprocal Act. A participating employee or |
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| other applicant shall not be
entitled to credits or creditable |
8 |
| service unless the required employee
contributions are made in |
9 |
| a lump sum or in installments made in accordance
with board |
10 |
| rule.
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| (d) Upon the granting of a retirement, surviving spouse or |
12 |
| child
annuity, a death benefit or a separation benefit, on |
13 |
| account of any
employee, all individual accumulated credits |
14 |
| shall thereupon terminate.
Upon the withdrawal of additional |
15 |
| contributions, the credits applicable
thereto shall thereupon |
16 |
| terminate. Terminated credits shall not be applied
to increase |
17 |
| the benefits any remaining employee would otherwise receive |
18 |
| under
this Article.
|
19 |
| (Source: P.A. 93-933, eff. 8-13-04; 94-356, eff. 7-29-05.)
|
20 |
| Section 90. The State Mandates Act is amended by adding |
21 |
| Section 8.31 as follows: |
22 |
| (30 ILCS 805/8.31 new) |
23 |
| Sec. 8.31. Exempt mandate. Notwithstanding Sections 6 and 8 |
24 |
| of this Act, no reimbursement by the State is required for the |