97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2686

 

Introduced 1/18/2012, by Sen. John J. Cullerton

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/14-131

    Amends the State Employee Article of the Illinois Pension Code. Makes a technical change in a Section concerning contributions by the State.


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PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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
5Section 14-131 as follows:
 
6    (40 ILCS 5/14-131)
7    Sec. 14-131. Contributions by State.
8    (a) The The State shall make contributions to the System by
9appropriations of amounts which, together with other employer
10contributions from trust, federal, and other funds, employee
11contributions, investment income, and other income, will be
12sufficient to meet the cost of maintaining and administering
13the System on a 90% funded basis in accordance with actuarial
14recommendations.
15    For the purposes of this Section and Section 14-135.08,
16references to State contributions refer only to employer
17contributions and do not include employee contributions that
18are picked up or otherwise paid by the State or a department on
19behalf of the employee.
20    (b) The Board shall determine the total amount of State
21contributions required for each fiscal year on the basis of the
22actuarial tables and other assumptions adopted by the Board,
23using the formula in subsection (e).

 

 

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1    The Board shall also determine a State contribution rate
2for each fiscal year, expressed as a percentage of payroll,
3based on the total required State contribution for that fiscal
4year (less the amount received by the System from
5appropriations under Section 8.12 of the State Finance Act and
6Section 1 of the State Pension Funds Continuing Appropriation
7Act, if any, for the fiscal year ending on the June 30
8immediately preceding the applicable November 15 certification
9deadline), the estimated payroll (including all forms of
10compensation) for personal services rendered by eligible
11employees, and the recommendations of the actuary.
12    For the purposes of this Section and Section 14.1 of the
13State Finance Act, the term "eligible employees" includes
14employees who participate in the System, persons who may elect
15to participate in the System but have not so elected, persons
16who are serving a qualifying period that is required for
17participation, and annuitants employed by a department as
18described in subdivision (a)(1) or (a)(2) of Section 14-111.
19    (c) Contributions shall be made by the several departments
20for each pay period by warrants drawn by the State Comptroller
21against their respective funds or appropriations based upon
22vouchers stating the amount to be so contributed. These amounts
23shall be based on the full rate certified by the Board under
24Section 14-135.08 for that fiscal year. From the effective date
25of this amendatory Act of the 93rd General Assembly through the
26payment of the final payroll from fiscal year 2004

 

 

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1appropriations, the several departments shall not make
2contributions for the remainder of fiscal year 2004 but shall
3instead make payments as required under subsection (a-1) of
4Section 14.1 of the State Finance Act. The several departments
5shall resume those contributions at the commencement of fiscal
6year 2005.
7    (c-1) Notwithstanding subsection (c) of this Section, for
8fiscal years 2010 and 2012 only, contributions by the several
9departments are not required to be made for General Revenue
10Funds payrolls processed by the Comptroller. Payrolls paid by
11the several departments from all other State funds must
12continue to be processed pursuant to subsection (c) of this
13Section.
14    (c-2) For State fiscal years 2010 and 2012 only, on or as
15soon as possible after the 15th day of each month, the Board
16shall submit vouchers for payment of State contributions to the
17System, in a total monthly amount of one-twelfth of the fiscal
18year General Revenue Fund contribution as certified by the
19System pursuant to Section 14-135.08 of the Illinois Pension
20Code.
21    (d) If an employee is paid from trust funds or federal
22funds, the department or other employer shall pay employer
23contributions from those funds to the System at the certified
24rate, unless the terms of the trust or the federal-State
25agreement preclude the use of the funds for that purpose, in
26which case the required employer contributions shall be paid by

 

 

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1the State. From the effective date of this amendatory Act of
2the 93rd General Assembly through the payment of the final
3payroll from fiscal year 2004 appropriations, the department or
4other employer shall not pay contributions for the remainder of
5fiscal year 2004 but shall instead make payments as required
6under subsection (a-1) of Section 14.1 of the State Finance
7Act. The department or other employer shall resume payment of
8contributions at the commencement of fiscal year 2005.
9    (e) For State fiscal years 2012 through 2045, the minimum
10contribution to the System to be made by the State for each
11fiscal year shall be an amount determined by the System to be
12sufficient to bring the total assets of the System up to 90% of
13the total actuarial liabilities of the System by the end of
14State fiscal year 2045. In making these determinations, the
15required State contribution shall be calculated each year as a
16level percentage of payroll over the years remaining to and
17including fiscal year 2045 and shall be determined under the
18projected unit credit actuarial cost method.
19    For State fiscal years 1996 through 2005, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22so that by State fiscal year 2011, the State is contributing at
23the rate required under this Section; except that (i) for State
24fiscal year 1998, for all purposes of this Code and any other
25law of this State, the certified percentage of the applicable
26employee payroll shall be 5.052% for employees earning eligible

 

 

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1creditable service under Section 14-110 and 6.500% for all
2other employees, notwithstanding any contrary certification
3made under Section 14-135.08 before the effective date of this
4amendatory Act of 1997, and (ii) in the following specified
5State fiscal years, the State contribution to the System shall
6not be less than the following indicated percentages of the
7applicable employee payroll, even if the indicated percentage
8will produce a State contribution in excess of the amount
9otherwise required under this subsection and subsection (a):
109.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
112002; 10.6% in FY 2003; and 10.8% in FY 2004.
12    Notwithstanding any other provision of this Article, the
13total required State contribution to the System for State
14fiscal year 2006 is $203,783,900.
15    Notwithstanding any other provision of this Article, the
16total required State contribution to the System for State
17fiscal year 2007 is $344,164,400.
18    For each of State fiscal years 2008 through 2009, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21from the required State contribution for State fiscal year
222007, so that by State fiscal year 2011, the State is
23contributing at the rate otherwise required under this Section.
24    Notwithstanding any other provision of this Article, the
25total required State General Revenue Fund contribution for
26State fiscal year 2010 is $723,703,100 and shall be made from

 

 

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1the proceeds of bonds sold in fiscal year 2010 pursuant to
2Section 7.2 of the General Obligation Bond Act, less (i) the
3pro rata share of bond sale expenses determined by the System's
4share of total bond proceeds, (ii) any amounts received from
5the General Revenue Fund in fiscal year 2010, and (iii) any
6reduction in bond proceeds due to the issuance of discounted
7bonds, if applicable.
8    Notwithstanding any other provision of this Article, the
9total required State General Revenue Fund contribution for
10State fiscal year 2011 is the amount recertified by the System
11on or before April 1, 2011 pursuant to Section 14-135.08 and
12shall be made from the proceeds of bonds sold in fiscal year
132011 pursuant to Section 7.2 of the General Obligation Bond
14Act, less (i) the pro rata share of bond sale expenses
15determined by the System's share of total bond proceeds, (ii)
16any amounts received from the General Revenue Fund in fiscal
17year 2011, and (iii) any reduction in bond proceeds due to the
18issuance of discounted bonds, if applicable.
19    Beginning in State fiscal year 2046, the minimum State
20contribution for each fiscal year shall be the amount needed to
21maintain the total assets of the System at 90% of the total
22actuarial liabilities of the System.
23    Amounts received by the System pursuant to Section 25 of
24the Budget Stabilization Act or Section 8.12 of the State
25Finance Act in any fiscal year do not reduce and do not
26constitute payment of any portion of the minimum State

 

 

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1contribution required under this Article in that fiscal year.
2Such amounts shall not reduce, and shall not be included in the
3calculation of, the required State contributions under this
4Article in any future year until the System has reached a
5funding ratio of at least 90%. A reference in this Article to
6the "required State contribution" or any substantially similar
7term does not include or apply to any amounts payable to the
8System under Section 25 of the Budget Stabilization Act.
9    Notwithstanding any other provision of this Section, the
10required State contribution for State fiscal year 2005 and for
11fiscal year 2008 and each fiscal year thereafter, as calculated
12under this Section and certified under Section 14-135.08, shall
13not exceed an amount equal to (i) the amount of the required
14State contribution that would have been calculated under this
15Section for that fiscal year if the System had not received any
16payments under subsection (d) of Section 7.2 of the General
17Obligation Bond Act, minus (ii) the portion of the State's
18total debt service payments for that fiscal year on the bonds
19issued in fiscal year 2003 for the purposes of that Section
207.2, as determined and certified by the Comptroller, that is
21the same as the System's portion of the total moneys
22distributed under subsection (d) of Section 7.2 of the General
23Obligation Bond Act. In determining this maximum for State
24fiscal years 2008 through 2010, however, the amount referred to
25in item (i) shall be increased, as a percentage of the
26applicable employee payroll, in equal increments calculated

 

 

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1from the sum of the required State contribution for State
2fiscal year 2007 plus the applicable portion of the State's
3total debt service payments for fiscal year 2007 on the bonds
4issued in fiscal year 2003 for the purposes of Section 7.2 of
5the General Obligation Bond Act, so that, by State fiscal year
62011, the State is contributing at the rate otherwise required
7under this Section.
8    (f) After the submission of all payments for eligible
9employees from personal services line items in fiscal year 2004
10have been made, the Comptroller shall provide to the System a
11certification of the sum of all fiscal year 2004 expenditures
12for personal services that would have been covered by payments
13to the System under this Section if the provisions of this
14amendatory Act of the 93rd General Assembly had not been
15enacted. Upon receipt of the certification, the System shall
16determine the amount due to the System based on the full rate
17certified by the Board under Section 14-135.08 for fiscal year
182004 in order to meet the State's obligation under this
19Section. The System shall compare this amount due to the amount
20received by the System in fiscal year 2004 through payments
21under this Section and under Section 6z-61 of the State Finance
22Act. If the amount due is more than the amount received, the
23difference shall be termed the "Fiscal Year 2004 Shortfall" for
24purposes of this Section, and the Fiscal Year 2004 Shortfall
25shall be satisfied under Section 1.2 of the State Pension Funds
26Continuing Appropriation Act. If the amount due is less than

 

 

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1the amount received, the difference shall be termed the "Fiscal
2Year 2004 Overpayment" for purposes of this Section, and the
3Fiscal Year 2004 Overpayment shall be repaid by the System to
4the Pension Contribution Fund as soon as practicable after the
5certification.
6    (g) For purposes of determining the required State
7contribution to the System, the value of the System's assets
8shall be equal to the actuarial value of the System's assets,
9which shall be calculated as follows:
10    As of June 30, 2008, the actuarial value of the System's
11assets shall be equal to the market value of the assets as of
12that date. In determining the actuarial value of the System's
13assets for fiscal years after June 30, 2008, any actuarial
14gains or losses from investment return incurred in a fiscal
15year shall be recognized in equal annual amounts over the
165-year period following that fiscal year.
17    (h) For purposes of determining the required State
18contribution to the System for a particular year, the actuarial
19value of assets shall be assumed to earn a rate of return equal
20to the System's actuarially assumed rate of return.
21    (i) After the submission of all payments for eligible
22employees from personal services line items paid from the
23General Revenue Fund in fiscal year 2010 have been made, the
24Comptroller shall provide to the System a certification of the
25sum of all fiscal year 2010 expenditures for personal services
26that would have been covered by payments to the System under

 

 

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1this Section if the provisions of this amendatory Act of the
296th General Assembly had not been enacted. Upon receipt of the
3certification, the System shall determine the amount due to the
4System based on the full rate certified by the Board under
5Section 14-135.08 for fiscal year 2010 in order to meet the
6State's obligation under this Section. The System shall compare
7this amount due to the amount received by the System in fiscal
8year 2010 through payments under this Section. If the amount
9due is more than the amount received, the difference shall be
10termed the "Fiscal Year 2010 Shortfall" for purposes of this
11Section, and the Fiscal Year 2010 Shortfall shall be satisfied
12under Section 1.2 of the State Pension Funds Continuing
13Appropriation Act. If the amount due is less than the amount
14received, the difference shall be termed the "Fiscal Year 2010
15Overpayment" for purposes of this Section, and the Fiscal Year
162010 Overpayment shall be repaid by the System to the General
17Revenue Fund as soon as practicable after the certification.
18    (j) After the submission of all payments for eligible
19employees from personal services line items paid from the
20General Revenue Fund in fiscal year 2011 have been made, the
21Comptroller shall provide to the System a certification of the
22sum of all fiscal year 2011 expenditures for personal services
23that would have been covered by payments to the System under
24this Section if the provisions of this amendatory Act of the
2596th General Assembly had not been enacted. Upon receipt of the
26certification, the System shall determine the amount due to the

 

 

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1System based on the full rate certified by the Board under
2Section 14-135.08 for fiscal year 2011 in order to meet the
3State's obligation under this Section. The System shall compare
4this amount due to the amount received by the System in fiscal
5year 2011 through payments under this Section. If the amount
6due is more than the amount received, the difference shall be
7termed the "Fiscal Year 2011 Shortfall" for purposes of this
8Section, and the Fiscal Year 2011 Shortfall shall be satisfied
9under Section 1.2 of the State Pension Funds Continuing
10Appropriation Act. If the amount due is less than the amount
11received, the difference shall be termed the "Fiscal Year 2011
12Overpayment" for purposes of this Section, and the Fiscal Year
132011 Overpayment shall be repaid by the System to the General
14Revenue Fund as soon as practicable after the certification.
15    (k) For fiscal year 2012 only, after the submission of all
16payments for eligible employees from personal services line
17items paid from the General Revenue Fund in the fiscal year
18have been made, the Comptroller shall provide to the System a
19certification of the sum of all expenditures in the fiscal year
20for personal services. Upon receipt of the certification, the
21System shall determine the amount due to the System based on
22the full rate certified by the Board under Section 14-135.08
23for the fiscal year in order to meet the State's obligation
24under this Section. The System shall compare this amount due to
25the amount received by the System for the fiscal year. If the
26amount due is more than the amount received, the difference

 

 

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1shall be termed the "Fiscal Year Shortfall" for purposes of
2this Section, and the Fiscal Year Shortfall shall be satisfied
3under Section 1.2 of the State Pension Funds Continuing
4Appropriation Act. If the amount due is less than the amount
5received, the difference shall be termed the "Fiscal Year
6Overpayment" for purposes of this Section, and the Fiscal Year
7Overpayment shall be repaid by the System to the General
8Revenue Fund as soon as practicable after the certification.
9(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
1096-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
111-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11.)