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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by changing | ||||||||||||||||||||||||||
5 | Sections 3-125 and 4-118 as follows:
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6 | (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
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7 | Sec. 3-125. Financing. | ||||||||||||||||||||||||||
8 | (a) The city council or the board of trustees of
the | ||||||||||||||||||||||||||
9 | municipality shall annually levy a tax upon all
the taxable | ||||||||||||||||||||||||||
10 | property of the municipality at the rate on the dollar which
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11 | will produce an amount which, when added to the deductions from | ||||||||||||||||||||||||||
12 | the salaries
or wages of police officers, and revenues
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13 | available from other
sources, will equal a sum sufficient to | ||||||||||||||||||||||||||
14 | meet
the annual requirements of the police pension fund. The | ||||||||||||||||||||||||||
15 | annual
requirements to be provided by such tax levy are equal
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16 | to (1) the normal cost of the pension fund for the year | ||||||||||||||||||||||||||
17 | involved, plus
(2) an amount sufficient to bring the total | ||||||||||||||||||||||||||
18 | assets of the pension fund up to 90% of the total actuarial | ||||||||||||||||||||||||||
19 | liabilities of the pension fund by the end of municipal fiscal | ||||||||||||||||||||||||||
20 | year 2040, as annually updated and determined by an enrolled | ||||||||||||||||||||||||||
21 | actuary employed by the Illinois Department of Insurance or by | ||||||||||||||||||||||||||
22 | an enrolled actuary retained by the pension fund or the | ||||||||||||||||||||||||||
23 | municipality. In making these determinations, the required |
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1 | minimum employer contribution shall be calculated each year as | ||||||
2 | a level percentage of payroll over the years remaining up to | ||||||
3 | and including fiscal year 2040 and shall be determined under | ||||||
4 | the projected unit credit actuarial cost method. The tax shall | ||||||
5 | be levied and
collected in the same manner as the general taxes
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6 | of the municipality, and in addition to all other taxes now or | ||||||
7 | hereafter authorized to
be levied upon all property within the | ||||||
8 | municipality, and shall be in
addition to the amount authorized | ||||||
9 | to be levied for general purposes as
provided by Section 8-3-1 | ||||||
10 | of the Illinois Municipal Code, approved May
29, 1961, as | ||||||
11 | amended. The tax shall be forwarded directly to the treasurer | ||||||
12 | of the board within 30 business days after receipt by the | ||||||
13 | county.
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14 | (b) For purposes of determining the required employer | ||||||
15 | contribution to a pension fund, the value of the pension fund's | ||||||
16 | assets shall be equal to the actuarial value of the pension | ||||||
17 | fund's assets, which shall be calculated as follows: | ||||||
18 | (1) On March 30, 2011, the actuarial value of a pension | ||||||
19 | fund's assets shall be equal to the market value of the | ||||||
20 | assets as of that date. | ||||||
21 | (2) In determining the actuarial value of the System's | ||||||
22 | assets for fiscal years after March 30, 2011, any actuarial | ||||||
23 | gains or losses from investment return incurred in a fiscal | ||||||
24 | year shall be recognized in equal annual amounts over the | ||||||
25 | 5-year period following that fiscal year. | ||||||
26 | (c) Except as provided in subsection (c-5), if If a |
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1 | participating municipality fails to transmit to the fund | ||||||
2 | contributions required of it under this Article for more than | ||||||
3 | 90 days after the payment of those contributions is due, the | ||||||
4 | fund may, after giving notice to the municipality, certify to | ||||||
5 | the State Comptroller the amounts of the delinquent payments in | ||||||
6 | accordance with any applicable rules of the Comptroller, and | ||||||
7 | the Comptroller must, beginning in fiscal year 2016, deduct and | ||||||
8 | remit to the fund the certified amounts or a portion of those | ||||||
9 | amounts from the following proportions of payments of State | ||||||
10 | funds to the municipality: | ||||||
11 | (1) in fiscal year 2016, one-third of the total amount | ||||||
12 | of any payments of State funds to the municipality; | ||||||
13 | (2) in fiscal year 2017, two-thirds of the total amount | ||||||
14 | of any payments of State funds to the municipality; and | ||||||
15 | (3) in fiscal year 2018 and each fiscal year | ||||||
16 | thereafter, the total amount of any payments of State funds | ||||||
17 | to the municipality. | ||||||
18 | The State Comptroller may not deduct from any payments of | ||||||
19 | State funds to the municipality more than the amount of | ||||||
20 | delinquent payments certified to the State Comptroller by the | ||||||
21 | fund. | ||||||
22 | (c-5) Notwithstanding subsection (c), if a participating | ||||||
23 | municipality fails to transmit to the fund contributions | ||||||
24 | required of it under this Article for more than 90 days after | ||||||
25 | the payment of those contributions is due and if the fund's | ||||||
26 | assets in trust exceed 5 years of current liabilities of the |
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1 | pension fund, the fund may, after giving notice to the | ||||||
2 | municipality, certify to the State Comptroller the amounts of | ||||||
3 | the delinquent payments in accordance with any applicable rules | ||||||
4 | of the Comptroller, and the Comptroller must, beginning in | ||||||
5 | fiscal year 2021, deduct and remit to the fund the certified | ||||||
6 | amounts or a portion of those amounts from the following | ||||||
7 | proportions of payments of State funds to the municipality: | ||||||
8 | (1) in fiscal year 2021, one-tenth of the total amount | ||||||
9 | of any payments of State funds to the municipality; | ||||||
10 | (2) in fiscal year 2022, one-fifth of the total amount | ||||||
11 | of any payments of State funds to the municipality; and | ||||||
12 | (3) in fiscal year 2023, three-tenths of the total | ||||||
13 | amount of any payments of State funds to the municipality; | ||||||
14 | and | ||||||
15 | (4) in fiscal year 2024, two-fifths of the total amount | ||||||
16 | of any payments of State funds to the municipality; and | ||||||
17 | (5) in fiscal year 2025 and each fiscal year | ||||||
18 | thereafter, one-half the total amount of any payments of | ||||||
19 | State funds to the municipality. | ||||||
20 | The State Comptroller may not deduct from any payments of | ||||||
21 | State funds to the municipality more than the amount of | ||||||
22 | delinquent payments certified to the State Comptroller by the | ||||||
23 | fund. | ||||||
24 | (d) The police pension fund shall consist of the following | ||||||
25 | moneys which
shall be set apart by the treasurer of the | ||||||
26 | municipality:
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1 | (1) All moneys derived from the taxes levied hereunder;
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2 | (2) Contributions by police officers under Section | ||||||
3 | 3-125.1;
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4 | (3) All moneys accumulated by the municipality under | ||||||
5 | any previous
legislation establishing a fund for the | ||||||
6 | benefit of disabled or retired
police officers;
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7 | (4) Donations, gifts or other transfers authorized by | ||||||
8 | this
Article.
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9 | (e) The Commission on Government Forecasting and
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10 | Accountability shall conduct a study of all funds established
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11 | under this Article and shall report its findings to the General
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12 | Assembly on or before January 1, 2013. To the fullest extent | ||||||
13 | possible, the study shall include, but not be limited to, the | ||||||
14 | following: | ||||||
15 | (1) fund balances; | ||||||
16 | (2) historical employer contribution rates for each
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17 | fund; | ||||||
18 | (3) the actuarial formulas used as a basis for employer
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19 | contributions, including the actual assumed rate of return
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20 | for each year, for each fund; | ||||||
21 | (4) available contribution funding sources; | ||||||
22 | (5) the impact of any revenue limitations caused by
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23 | PTELL and employer home rule or non-home rule status; and | ||||||
24 | (6) existing statutory funding compliance procedures
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25 | and funding enforcement mechanisms for all municipal
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26 | pension funds. |
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1 | (Source: P.A. 99-8, eff. 7-9-15.)
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2 | (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
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3 | Sec. 4-118. Financing.
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4 | (a) The city council or the board of trustees
of the | ||||||
5 | municipality shall annually levy a tax upon all the taxable | ||||||
6 | property
of the municipality at the rate on the dollar which | ||||||
7 | will produce an amount
which, when added to the deductions from | ||||||
8 | the salaries or wages of
firefighters and revenues available | ||||||
9 | from other sources, will equal a sum
sufficient to meet the | ||||||
10 | annual actuarial requirements of the pension fund,
as | ||||||
11 | determined by an enrolled actuary employed by the Illinois | ||||||
12 | Department of
Insurance or by an enrolled actuary retained by | ||||||
13 | the pension fund or
municipality. For the purposes of this | ||||||
14 | Section, the annual actuarial
requirements of the pension fund | ||||||
15 | are equal to (1) the normal cost of the
pension fund, or 17.5% | ||||||
16 | of the salaries and wages to be paid to firefighters
for the | ||||||
17 | year involved, whichever is greater, plus (2) an annual amount
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18 | sufficient to bring the total assets of the pension fund up to | ||||||
19 | 90% of the total actuarial liabilities of the pension fund by | ||||||
20 | the end of municipal fiscal year 2040, as annually updated and | ||||||
21 | determined by an enrolled actuary employed by the Illinois | ||||||
22 | Department of Insurance or by an enrolled actuary retained by | ||||||
23 | the pension fund or the municipality. In making these | ||||||
24 | determinations, the required minimum employer contribution | ||||||
25 | shall be calculated each year as a level percentage of payroll |
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1 | over the years remaining up to and including fiscal year 2040 | ||||||
2 | and shall be determined under the projected unit credit | ||||||
3 | actuarial cost method. The amount
to be applied towards the | ||||||
4 | amortization of the unfunded accrued liability in any
year | ||||||
5 | shall not be less than the annual amount required to amortize | ||||||
6 | the unfunded
accrued liability, including interest, as a level | ||||||
7 | percentage of payroll over
the number of years remaining in the | ||||||
8 | 40 year amortization period.
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9 | (a-5) For purposes of determining the required employer | ||||||
10 | contribution to a pension fund, the value of the pension fund's | ||||||
11 | assets shall be equal to the actuarial value of the pension | ||||||
12 | fund's assets, which shall be calculated as follows: | ||||||
13 | (1) On March 30, 2011, the actuarial value of a pension | ||||||
14 | fund's assets shall be equal to the market value of the | ||||||
15 | assets as of that date. | ||||||
16 | (2) In determining the actuarial value of the pension | ||||||
17 | fund's assets for fiscal years after March 30, 2011, any | ||||||
18 | actuarial gains or losses from investment return incurred | ||||||
19 | in a fiscal year shall be recognized in equal annual | ||||||
20 | amounts over the 5-year period following that fiscal year. | ||||||
21 | (b) The tax shall be levied and collected in the same | ||||||
22 | manner
as the general taxes of the municipality, and shall be | ||||||
23 | in addition
to all other taxes now or hereafter authorized to | ||||||
24 | be levied upon all
property within the municipality, and in | ||||||
25 | addition to the amount authorized
to be levied for general | ||||||
26 | purposes, under Section 8-3-1 of the Illinois
Municipal Code or |
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1 | under Section 14 of the Fire Protection District Act. The
tax | ||||||
2 | shall be forwarded directly to the treasurer of the board | ||||||
3 | within 30
business days of receipt by the county
(or, in the | ||||||
4 | case of amounts
added to the tax levy under subsection (f), | ||||||
5 | used by the municipality to pay the
employer contributions | ||||||
6 | required under subsection (b-1) of Section 15-155 of
this | ||||||
7 | Code).
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8 | (b-5) Except as provided in subsection (b-10), if If a | ||||||
9 | participating municipality fails to transmit to the fund | ||||||
10 | contributions required of it under this Article for more than | ||||||
11 | 90 days after the payment of those contributions is due, the | ||||||
12 | fund may, after giving notice to the municipality, certify to | ||||||
13 | the State Comptroller the amounts of the delinquent payments in | ||||||
14 | accordance with any applicable rules of the Comptroller, and | ||||||
15 | the Comptroller must, beginning in fiscal year 2016, deduct and | ||||||
16 | remit to the fund the certified amounts or a portion of those | ||||||
17 | amounts from the following proportions of payments of State | ||||||
18 | funds to the municipality: | ||||||
19 | (1) in fiscal year 2016, one-third of the total amount | ||||||
20 | of any payments of State funds to the municipality; | ||||||
21 | (2) in fiscal year 2017, two-thirds of the total amount | ||||||
22 | of any payments of State funds to the municipality; and | ||||||
23 | (3) in fiscal year 2018 and each fiscal year | ||||||
24 | thereafter, the total amount of any payments of State funds | ||||||
25 | to the municipality. | ||||||
26 | The State Comptroller may not deduct from any payments of |
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1 | State funds to the municipality more than the amount of | ||||||
2 | delinquent payments certified to the State Comptroller by the | ||||||
3 | fund. | ||||||
4 | (b-10) Notwithstanding subsection (b-5), if a | ||||||
5 | participating municipality fails to transmit to the fund | ||||||
6 | contributions required of it under this Article for more than | ||||||
7 | 90 days after the payment of those contributions is due and if | ||||||
8 | the fund's assets in trust exceed 5 years of current | ||||||
9 | liabilities of the pension fund, the fund may, after giving | ||||||
10 | notice to the municipality, certify to the State Comptroller | ||||||
11 | the amounts of the delinquent payments in accordance with any | ||||||
12 | applicable rules of the Comptroller, and the Comptroller must, | ||||||
13 | beginning in fiscal year 2021, deduct and remit to the fund the | ||||||
14 | certified amounts or a portion of those amounts from the | ||||||
15 | following proportions of payments of State funds to the | ||||||
16 | municipality: | ||||||
17 | (1) in fiscal year 2021, one-tenth of the total amount | ||||||
18 | of any payments of State funds to the municipality; | ||||||
19 | (2) in fiscal year 2022, one-fifth of the total amount | ||||||
20 | of any payments of State funds to the municipality; and | ||||||
21 | (3) in fiscal year 2023, three-tenths of the total | ||||||
22 | amount of any payments of State funds to the municipality; | ||||||
23 | and | ||||||
24 | (4) in fiscal year 2024, two-fifths of the total amount | ||||||
25 | of any payments of State funds to the municipality; and | ||||||
26 | (5) in fiscal year 2025 and each fiscal year |
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1 | thereafter, one-half the total amount of any payments of | ||||||
2 | State funds to the municipality. | ||||||
3 | The State Comptroller may not deduct from any payments of | ||||||
4 | State funds to the municipality more than the amount of | ||||||
5 | delinquent payments certified to the State Comptroller by the | ||||||
6 | fund. | ||||||
7 | (c) The board shall make available to the membership and | ||||||
8 | the general public
for inspection and copying at reasonable | ||||||
9 | times the most recent Actuarial
Valuation Balance Sheet and Tax | ||||||
10 | Levy Requirement issued to the fund by the
Department of | ||||||
11 | Insurance.
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12 | (d) The firefighters' pension fund shall consist of the | ||||||
13 | following moneys
which shall be set apart by the treasurer of | ||||||
14 | the municipality: (1) all
moneys derived from the taxes levied | ||||||
15 | hereunder; (2) contributions
by firefighters as provided under | ||||||
16 | Section 4-118.1; (3) all
rewards in money, fees, gifts, and | ||||||
17 | emoluments that may be paid or given
for or on account of | ||||||
18 | extraordinary service by the fire department or any
member | ||||||
19 | thereof, except when allowed to be retained by competitive | ||||||
20 | awards;
and (4) any money, real estate or personal property | ||||||
21 | received by the board.
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22 | (e) For the purposes of this Section, "enrolled actuary" | ||||||
23 | means an actuary:
(1) who is a member of the Society of | ||||||
24 | Actuaries or the American
Academy of Actuaries; and (2) who is | ||||||
25 | enrolled under Subtitle
C of Title III of the Employee | ||||||
26 | Retirement Income Security Act of 1974, or
who has been engaged |
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1 | in providing actuarial services to one or more public
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2 | retirement systems for a period of at least 3 years as of July | ||||||
3 | 1, 1983.
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4 | (f) The corporate authorities of a municipality that | ||||||
5 | employs a person
who is described in subdivision (d) of Section | ||||||
6 | 4-106 may add to the tax levy
otherwise provided for in this | ||||||
7 | Section an amount equal to the projected cost of
the employer | ||||||
8 | contributions required to be paid by the municipality to the | ||||||
9 | State
Universities Retirement System under subsection (b-1) of | ||||||
10 | Section 15-155 of this
Code. | ||||||
11 | (g) The Commission on Government Forecasting and
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12 | Accountability shall conduct a study of all funds established
| ||||||
13 | under this Article and shall report its findings to the General
| ||||||
14 | Assembly on or before January 1, 2013. To the fullest extent | ||||||
15 | possible, the study shall include, but not be limited to, the | ||||||
16 | following: | ||||||
17 | (1) fund balances; | ||||||
18 | (2) historical employer contribution rates for each
| ||||||
19 | fund; | ||||||
20 | (3) the actuarial formulas used as a basis for employer
| ||||||
21 | contributions, including the actual assumed rate of return
| ||||||
22 | for each year, for each fund; | ||||||
23 | (4) available contribution funding sources; | ||||||
24 | (5) the impact of any revenue limitations caused by
| ||||||
25 | PTELL and employer home rule or non-home rule status; and | ||||||
26 | (6) existing statutory funding compliance procedures
|
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| |||||||
1 | and funding enforcement mechanisms for all municipal
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2 | pension funds.
| ||||||
3 | (Source: P.A. 99-8, eff. 7-9-15.)
| ||||||
4 | Section 99. Effective date. This Act takes effect upon | ||||||
5 | becoming law.
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