97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB4458

 

Introduced 1/30/2012, by Rep. Dan Brady

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/3-110  from Ch. 108 1/2, par. 3-110
40 ILCS 5/3-110.6  from Ch. 108 1/2, par. 3-110.6
40 ILCS 5/15-113  from Ch. 108 1/2, par. 15-113
40 ILCS 5/15-113.12 new
40 ILCS 5/15-134.4  from Ch. 108 1/2, par. 15-134.4
30 ILCS 805/8.36 new

    Amends the Illinois Pension Code. For a period of 6 months, allows a police officer to transfer up to 10 years of creditable service in either direction between a downstate police pension fund and the State Universities Retirement System. Applies only to service as a police officer. Requires payment by the police officer of the difference between the amount of contributions transferred and the true cost of allowing the creditable service to be established. Authorizes reinstatement of transferable credits. 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

 

 

A BILL FOR

 

HB4458LRB097 17197 EFG 62397 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 3-110, 3-110.6, 15-113, and 15-134.4 and by adding
6Section 15-113.12 as follows:
 
7    (40 ILCS 5/3-110)  (from Ch. 108 1/2, par. 3-110)
8    Sec. 3-110. Creditable service.
9    (a) "Creditable service" is the time served by a police
10officer as a member of a regularly constituted police force of
11a municipality. In computing creditable service furloughs
12without pay exceeding 30 days shall not be counted, but all
13leaves of absence for illness or accident, regardless of
14length, and all periods of disability retirement for which a
15police officer has received no disability pension payments
16under this Article shall be counted.
17    (a-5) Up to 3 years of time during which the police officer
18receives a disability pension under Section 3-114.1, 3-114.2,
193-114.3, or 3-114.6 shall be counted as creditable service,
20provided that (i) the police officer returns to active service
21after the disability for a period at least equal to the period
22for which credit is to be established and (ii) the police
23officer makes contributions to the fund based on the rates

 

 

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1specified in Section 3-125.1 and the salary upon which the
2disability pension is based. These contributions may be paid at
3any time prior to the commencement of a retirement pension. The
4police officer may, but need not, elect to have the
5contributions deducted from the disability pension or to pay
6them in installments on a schedule approved by the board. If
7not deducted from the disability pension, the contributions
8shall include interest at the rate of 6% per year, compounded
9annually, from the date for which service credit is being
10established to the date of payment. If contributions are paid
11under this subsection (a-5) in excess of those needed to
12establish the credit, the excess shall be refunded. This
13subsection (a-5) applies to persons receiving a disability
14pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
15the effective date of this amendatory Act of the 91st General
16Assembly, as well as persons who begin to receive such a
17disability pension after that date.
18    (b) Creditable service includes all periods of service in
19the military, naval or air forces of the United States entered
20upon while an active police officer of a municipality, provided
21that upon applying for a permanent pension, and in accordance
22with the rules of the board, the police officer pays into the
23fund the amount the officer would have contributed if he or she
24had been a regular contributor during such period, to the
25extent that the municipality which the police officer served
26has not made such contributions in the officer's behalf. The

 

 

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1total amount of such creditable service shall not exceed 5
2years, except that any police officer who on July 1, 1973 had
3more than 5 years of such creditable service shall receive the
4total amount thereof.
5    (b-5) Creditable service includes all periods of service in
6the military, naval, or air forces of the United States entered
7upon before beginning service as an active police officer of a
8municipality, provided that, in accordance with the rules of
9the board, the police officer pays into the fund the amount the
10police officer would have contributed if he or she had been a
11regular contributor during such period, plus an amount
12determined by the Board to be equal to the municipality's
13normal cost of the benefit, plus interest at the actuarially
14assumed rate calculated from the date the employee last became
15a police officer under this Article. The total amount of such
16creditable service shall not exceed 2 years.
17    (c) Creditable service also includes service rendered by a
18police officer while on leave of absence from a police
19department to serve as an executive of an organization whose
20membership consists of members of a police department, subject
21to the following conditions: (i) the police officer is a
22participant of a fund established under this Article with at
23least 10 years of service as a police officer; (ii) the police
24officer received no credit for such service under any other
25retirement system, pension fund, or annuity and benefit fund
26included in this Code; (iii) pursuant to the rules of the board

 

 

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1the police officer pays to the fund the amount he or she would
2have contributed had the officer been an active member of the
3police department; (iv) the organization pays a contribution
4equal to the municipality's normal cost for that period of
5service; and (v) for all leaves of absence under this
6subsection (c), including those beginning before the effective
7date of this amendatory Act of the 97th General Assembly, the
8police officer continues to remain in sworn status, subject to
9the professional standards of the public employer or those
10terms established in statute.
11        (d)(1) Creditable service also includes periods of
12    service originally established in another police pension
13    fund under this Article or in the Fund or System
14    established under Article 7 or 15 of this Code for which
15    (i) the contributions have been transferred under Section
16    3-110.7, or Section 7-139.9, or 15-134.4 and (ii) any
17    additional contribution required under paragraph (2) of
18    this subsection has been paid in full in accordance with
19    the requirements of this subsection (d).
20        (2) If the board of the pension fund to which
21    creditable service and related contributions are
22    transferred under Section 7-139.9 or 15-134.4 determines
23    that the amount transferred is less than the true cost to
24    the pension fund of allowing that creditable service to be
25    established, then in order to establish that creditable
26    service the police officer must pay to the pension fund,

 

 

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1    within the payment period specified in paragraph (3) of
2    this subsection, an additional contribution equal to the
3    difference, as determined by the board in accordance with
4    the rules and procedures adopted under paragraph (6) of
5    this subsection.
6        If the board of the pension fund to which creditable
7    service and related contributions are transferred under
8    Section 3-110.7 determines that the amount transferred is
9    less than the true cost to the pension fund of allowing
10    that creditable service to be established, then the police
11    officer may elect (A) to establish that creditable service
12    by paying to the pension fund, within the payment period
13    specified in paragraph (3) of this subsection (d), an
14    additional contribution equal to the difference, as
15    determined by the board in accordance with the rules and
16    procedures adopted under paragraph (6) of this subsection
17    (d) or (B) to have his or her creditable service reduced by
18    an amount equal to the difference between the amount
19    transferred under Section 3-110.7 and the true cost to the
20    pension fund of allowing that creditable service to be
21    established, as determined by the board in accordance with
22    the rules and procedures adopted under paragraph (6) of
23    this subsection (d).
24        (3) Except as provided in paragraph (4), the additional
25    contribution that is required or elected under paragraph
26    (2) of this subsection (d) must be paid to the board (i)

 

 

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1    within 5 years from the date of the transfer of
2    contributions under Section 3-110.7, or 7-139.9, or
3    15-134.4 and (ii) before the police officer terminates
4    service with the fund. The additional contribution may be
5    paid in a lump sum or in accordance with a schedule of
6    installment payments authorized by the board.
7        (4) If the police officer dies in service before
8    payment in full has been made and before the expiration of
9    the 5-year payment period, the surviving spouse of the
10    officer may elect to pay the unpaid amount on the officer's
11    behalf within 6 months after the date of death, in which
12    case the creditable service shall be granted as though the
13    deceased police officer had paid the remaining balance on
14    the day before the date of death.
15        (5) If the additional contribution that is required or
16    elected under paragraph (2) of this subsection (d) is not
17    paid in full within the required time, the creditable
18    service shall not be granted and the police officer (or the
19    officer's surviving spouse or estate) shall be entitled to
20    receive a refund of (i) any partial payment of the
21    additional contribution that has been made by the police
22    officer and (ii) those portions of the amounts transferred
23    under subdivision (a)(1) of Section 3-110.7 or
24    subdivisions (a)(1) and (a)(3) of Section 7-139.9 or
25    subdivisions (b-5)(1) and (b-5)(3) of Section 15-134.4
26    that represent employee contributions paid by the police

 

 

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1    officer (but not the accumulated interest on those
2    contributions) and interest paid by the police officer to
3    the prior pension fund in order to reinstate service
4    terminated by acceptance of a refund.
5        At the time of paying a refund under this item (5), the
6    pension fund shall also repay to the pension fund from
7    which the contributions were transferred under Section
8    3-110.7, or 7-139.9, or 15-134.4 the amount originally
9    transferred under subdivision (a)(2) of that Section, plus
10    interest at the rate of 6% per year, compounded annually,
11    from the date of the original transfer to the date of
12    repayment. Amounts repaid to the Article 7 fund under this
13    provision shall be credited to the appropriate
14    municipality.
15        Transferred credit that is not granted due to failure
16    to pay the additional contribution within the required time
17    is lost; it may not be transferred to another pension fund
18    and may not be reinstated in the pension fund from which it
19    was transferred.
20        (6) The Public Employee Pension Fund Division of the
21    Department of Insurance shall establish by rule the manner
22    of making the calculation required under paragraph (2) of
23    this subsection, taking into account the appropriate
24    actuarial assumptions; the police officer's service, age,
25    and salary history; the level of funding of the pension
26    fund to which the credits are being transferred; and any

 

 

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1    other factors that the Division determines to be relevant.
2    The rules may require that all calculations made under
3    paragraph (2) be reported to the Division by the board
4    performing the calculation, together with documentation of
5    the creditable service to be transferred, the amounts of
6    contributions and interest to be transferred, the manner in
7    which the calculation was performed, the numbers relied
8    upon in making the calculation, the results of the
9    calculation, and any other information the Division may
10    deem useful.
11        (e)(1) Creditable service also includes periods of
12    service originally established in the Fund established
13    under Article 7 of this Code for which the contributions
14    have been transferred under Section 7-139.11.
15        (2) If the board of the pension fund to which
16    creditable service and related contributions are
17    transferred under Section 7-139.11 determines that the
18    amount transferred is less than the true cost to the
19    pension fund of allowing that creditable service to be
20    established, then the amount of creditable service the
21    police officer may establish under this subsection (e)
22    shall be reduced by an amount equal to the difference, as
23    determined by the board in accordance with the rules and
24    procedures adopted under paragraph (3) of this subsection.
25        (3) The Public Pension Division of the Department of
26    Financial and Professional Regulation shall establish by

 

 

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1    rule the manner of making the calculation required under
2    paragraph (2) of this subsection, taking into account the
3    appropriate actuarial assumptions; the police officer's
4    service, age, and salary history; the level of funding of
5    the pension fund to which the credits are being
6    transferred; and any other factors that the Division
7    determines to be relevant. The rules may require that all
8    calculations made under paragraph (2) be reported to the
9    Division by the board performing the calculation, together
10    with documentation of the creditable service to be
11    transferred, the amounts of contributions and interest to
12    be transferred, the manner in which the calculation was
13    performed, the numbers relied upon in making the
14    calculation, the results of the calculation, and any other
15    information the Division may deem useful.
16        (4) Until January 1, 2010, a police officer who
17    transferred service from the Fund established under
18    Article 7 of this Code under the provisions of Public Act
19    94-356 may establish additional credit, but only for the
20    amount of the service credit reduction in that transfer, as
21    calculated under paragraph (3) of this subsection (e). This
22    credit may be established upon payment by the police
23    officer of an amount to be determined by the board, equal
24    to (1) the amount that would have been contributed as
25    employee and employer contributions had all of the service
26    been as an employee under this Article, plus interest

 

 

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1    thereon at the rate of 6% per year, compounded annually
2    from the date of service to the date of transfer, less (2)
3    the total amount transferred from the Article 7 Fund, plus
4    (3) interest on the difference at the rate of 6% per year,
5    compounded annually, from the date of the transfer to the
6    date of payment. The additional service credit is allowed
7    under this amendatory Act of the 95th General Assembly
8    notwithstanding the provisions of Article 7 terminating
9    all transferred credits on the date of transfer.
10(Source: P.A. 96-297, eff. 8-11-09; 96-1260, eff. 7-23-10;
1197-651, eff. 1-5-12.)
 
12    (40 ILCS 5/3-110.6)  (from Ch. 108 1/2, par. 3-110.6)
13    Sec. 3-110.6. Transfer to Article 14 or 15 System.
14    (a) Any active member of the State Employees' Retirement
15System who is a State policeman, an investigator for the
16Secretary of State, a conservation police officer, an
17investigator for the Office of the Attorney General, an
18investigator for the Department of Revenue, an investigator for
19the Office of the State's Attorneys Appellate Prosecutor, or a
20controlled substance inspector may apply for transfer of some
21or all of his or her creditable service accumulated in any
22police pension fund under this Article to the State Employees'
23Retirement System in accordance with Section 14-110. The
24creditable service shall be transferred only upon payment by
25the police pension fund to the State Employees' Retirement

 

 

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1System of an amount equal to:
2        (1) the amounts accumulated to the credit of the
3    applicant for the service to be transferred on the books of
4    the fund on the date of transfer; and
5        (2) employer contributions in an amount equal to the
6    amount determined under subparagraph (1); and
7        (3) any interest paid by the applicant in order to
8    reinstate service to be transferred.
9Participation in the police pension fund with respect to the
10service to be transferred shall terminate on the date of
11transfer.
12    (a-5) No later than 6 months after the effective date of
13this amendatory Act of the 97th General Assembly, any active
14member of the State Universities Retirement System who is a
15police officer under that System may apply for transfer of up
16to 10 years of his or her creditable service accumulated in any
17police pension fund under this Article to the State
18Universities Retirement System in accordance with Section
1915-113.12. The creditable service shall be transferred only
20upon payment by the police pension fund to the State
21Universities Retirement System of an amount equal to:
22        (1) the amounts accumulated to the credit of the
23    applicant for the service to be transferred on the books of
24    the fund on the date of transfer; and
25        (2) employer contributions in an amount equal to the
26    amount determined under subparagraph (1); and

 

 

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1        (3) any interest paid by the applicant in order to
2    reinstate service to be transferred.
3Participation in the police pension fund with respect to the
4service to be transferred shall terminate on the date of
5transfer.
6    (b) Any person applying to transfer service under this
7Section may reinstate transferable service that was terminated
8by receipt of a refund, by paying to the police pension fund
9the amount of the refund with interest thereon at the
10actuarially assumed rate of interest, compounded annually,
11from the date of refund to the date of payment.
12(Source: P.A. 95-530, eff. 8-28-07; 96-745, eff. 8-25-09.)
 
13    (40 ILCS 5/15-113)  (from Ch. 108 1/2, par. 15-113)
14    Sec. 15-113. Service. "Service": The periods defined in
15Sections 15-113.1 through 15-113.12 15-113.9.
16(Source: P.A. 84-1472.)
 
17    (40 ILCS 5/15-113.12 new)
18    Sec. 15-113.12. Transfer of creditable service from
19Article 3 police pension fund.
20    (a) For a period of 6 months after the effective date of
21this Section, a participant who is a police officer may
22transfer to the System up to 10 years of creditable service
23accumulated under any police pension fund established under
24Article 3 of this Code upon payment to the System of an amount

 

 

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1to be determined by the Board, equal to the difference between
2the amount transferred to the System under Section 3-110.6 and
3the true cost to the System of allowing that creditable service
4to be established, as determined by the Board. The total amount
5of creditable service established under this Section by a
6participant shall not exceed 10 years.
7    (b) Creditable service established under this Section by a
8participant shall be deemed to be service as a police officer
9for the purposes of this Article, unless the participant has
10filed a written notice under Section 15-157 waiving the
11retirement formula provided by Rule 4 of Section 15-136.
 
12    (40 ILCS 5/15-134.4)  (from Ch. 108 1/2, par. 15-134.4)
13    Sec. 15-134.4. Transfer of creditable service as a police
14officer or criminal justice teacher to the Article 5 Pension
15Fund or Article 14 System.
16    (a) An active member of the Pension Fund established under
17Article 5 of this Code may apply, not later than January 1,
181990, to transfer his or her credits and creditable service
19accumulated under this System for service with the City
20Colleges of Chicago teaching in the Criminal Justice Program,
21to the Article 5 Fund. Such credits and creditable service
22shall be transferred forthwith.
23    Payment by this System to the Article 5 Fund shall be made
24at the same time and shall consist of:
25        (1) the amounts credited to the applicant for such

 

 

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1    service through employee contributions, including
2    interest, as of the date of transfer; and
3        (2) employer contributions equal in amount to the
4    accumulated employee contributions as determined in item
5    (1).
6Participation in this System with respect to such credits shall
7terminate on the date of transfer.
8    (b) Any active member of the State Employees' Retirement
9System who is a State policeman, an investigator for the
10Secretary of State, or a conservation police officer may apply
11for transfer of some or all of his or her creditable service
12accumulated in this System for service as a police officer to
13the State Employees' Retirement System in accordance with
14Section 14-110. The creditable service shall be transferred
15only upon payment by this System to the State Employees'
16Retirement System of an amount equal to:
17        (1) the amounts accumulated to the credit of the
18    applicant for the service to be transferred, including
19    interest, as of the date of transfer; and
20        (2) employer contributions equal in amount to the
21    accumulated employee contributions as determined in item
22    (1); and
23        (3) any interest paid by the applicant to reinstate
24    such service.
25Participation in this System as to any credits transferred
26under this subsection (b) Section shall terminate on the date

 

 

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1of transfer.
2    (b-5) No later than 6 months after the effective date of
3this amendatory Act of the 97th General Assembly, any active
4member of a police pension fund established under Article 3 of
5this Code may apply for transfer of up to 10 years of his or her
6creditable service accumulated in this System for service as a
7police officer to that police pension fund in accordance with
8subsection (d) of Section 3-110. The creditable service shall
9be transferred only upon payment by this System to that police
10pension fund of an amount equal to:
11        (1) the amounts accumulated to the credit of the
12    applicant for the service to be transferred, including
13    interest, as of the date of transfer; and
14        2) employer contributions equal in amount to the
15    accumulated employee contributions as determined in item
16    (1); and
17        (3) any interest paid by the applicant to reinstate
18    such service.
19Participation in this System as to any credits transferred
20under this subsection (b-5) shall terminate on the date of
21transfer.
22    (c) Any person applying to transfer service under
23subsection (b) or (b-5) may reinstate transferable credits and
24creditable service terminated upon receipt of a refund by
25paying to the System the amount of the refund plus interest
26thereon at the rate of 6% per year from the date of the refund

 

 

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1to the date of payment.
2(Source: P.A. 95-530, eff. 8-28-07.)
 
3    Section 90. The State Mandates Act is amended by adding
4Section 8.36 as follows:
 
5    (30 ILCS 805/8.36 new)
6    Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8
7of this Act, no reimbursement by the State is required for the
8implementation of any mandate created by this amendatory Act of
9the 97th General Assembly.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.