Public Act 93-0469

SB820 Enrolled                       LRB093 11011 EFG 11672 b

    AN ACT in relation to public employee benefits.

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

    Section  5.   The  Illinois  Pension  Code  is amended by
changing  Sections  16-113,  16-129.1,  16-133.2,   16-149.2,
16-150,  16-151,  16-182,  16-184,  16-185,  and  16-186.3 as
follows:

    (40 ILCS 5/16-113) (from Ch. 108 1/2, par. 16-113)
    Sec. 16-113.  Accumulated  contributions.    "Accumulated
contributions":  The  sum of all contributions to this System
made by or on behalf of a member  in  respect  to  membership
service  and  credited  to  his or her account in the Benefit
Trust Reserve Members' Contribution  Reserve,  together  with
regular interest thereon.
(Source: P.A. 83-1440.)

    (40 ILCS 5/16-129.1)
    Sec. 16-129.1.  Optional increase in retirement annuity.
    (a)  A member of the System may qualify for the augmented
rate  under  subdivision  (a)(B)(1) of Section 16-133 for all
years of creditable service earned before  July  1,  1998  by
making the optional contribution specified in subsection (b).
A  member may not elect to qualify for the augmented rate for
only a portion of his or her creditable service earned before
July 1, 1998.
    (b)  The contribution shall be an amount equal to 1.0% of
the member's highest salary rate in the 4 consecutive  school
years  immediately prior to but not including the school year
in which the application occurs, multiplied by the number  of
years  of creditable service earned by the member before July
1, 1998 or 20, whichever is less.  This contribution shall be
reduced by 1.0% of that salary rate for every 3 full years of
creditable service earned by the member after June 30,  1998.
The  contribution shall be further reduced at the rate of 25%
of the contribution (as reduced for service  after  June  30,
1998)  for each year of the member's total creditable service
in excess of 34 years.  The contribution  shall  not  in  any
event exceed 20% of that salary rate.
    The  member  shall  pay  to  the System the amount of the
contribution as calculated at the time of  application  under
this  Section.   The  amount  of  the contribution determined
under this subsection shall be recalculated at  the  time  of
retirement, and if the System determines that the amount paid
by  the  member  exceeds  the recalculated amount, the System
shall refund  the  difference  to  the  member  with  regular
interest from the date of payment to the date of refund.
    The  contribution  required  by  this subsection shall be
paid in one of the following ways or in a combination of  the
following ways that does not extend over more than 5 years:
         (i)  in  a  lump  sum  on  or  before  the  date  of
    retirement;
         (ii)  in  substantially  equal  installments  over a
    period of time not to exceed 5 years, as a deduction from
    salary in  accordance  with  subsection  (b)  of  Section
    16-154;
         (iii)  if  the  member  becomes  an annuitant before
    June   30,   2003,   in   substantially   equal   monthly
    installments over a  24-month  period,  by  reducing  the
    annuitant's monthly benefit over a 24-month period by the
    amount  of  the  otherwise  applicable contribution.  For
    federal and Illinois tax purposes, the monthly amount  by
    which  the  annuitant's  benefit  is reduced shall not be
    treated as a contribution by the annuitant, but rather as
    a reduction of the annuitant's monthly benefit.
    (c)  If the member fails to make  the  full  contribution
under  this  Section  in  a timely fashion, the payments made
under this Section shall be refunded to the  member,  without
interest.    If  the  member  dies  before  making  the  full
contribution, the payments made under this Section,  together
with  regular  interest  thereon,  shall  be  refunded to the
member's designated beneficiary for  benefits  under  Section
16-138.
    (d)  For   purposes   of  this  Section  and  subdivision
(a)(B)(1) of  Section  16-133,  optional  creditable  service
established  by  a member shall be deemed to have been earned
at the time of the employment or other qualifying event  upon
which  the  service  is  based,  rather  than at the time the
credit was established in this System.
    (e)  The contributions required under  this  Section  are
the  responsibility  of  the  teacher  and  not the teacher's
employer.  However, an employer of teachers  may,  after  the
effective  date  of this amendatory Act of 1998, specifically
agree, through collective bargaining or  otherwise,  to  make
the contributions required by this Section on behalf of those
teachers.
    (f)  A  person  who,  on or after July 1, 1998 and before
June 4, 1999, began receiving a retirement annuity calculated
at the augmented rate  may  apply  in  writing  to  have  the
annuity  recalculated  to reflect the changes to this Section
and Section 16-133 that were enacted  in  Public  Act  91-17.
The   amount  of  any  resulting  decrease  in  the  optional
contribution shall be  refunded  to  the  annuitant,  without
interest.  Any resulting increase in retirement annuity shall
take  effect  on  the next annuity payment date following the
date of application under this subsection.
(Source: P.A. 91-17, eff. 6-4-99; 92-416, eff. 8-17-01.)

    (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
    Sec. 16-133.2.  Early  retirement  without  discount.   A
member  retiring after June 1, 1980 and on or before June 30,
2005, and applying for a retirement annuity within  6  months
of   the   last   day   of   teaching  for  which  retirement
contributions  were  required,  may  elect  at  the  time  of
application for a retirement annuity,  to  make  a  one  time
member  contribution  to  the  System  and  thereby avoid the
reduction in the retirement annuity for retirement before age
60  specified  in  paragraph  (B)  of  Section  16-133.   The
exercise  of  the  election  shall  also  obligate  the  last
employer to make a one time  non-refundable  contribution  to
the  System.   Substitute  teachers  wishing to exercise this
election must teach 85 or more days in one school  term  with
one  employer,  who  shall  be  deemed  the last employer for
purposes of this Section.  The last day of teaching with that
employer must be within 6 months of the date  of  application
for  retirement.   All  substitute  teaching  credit  applied
toward  the  required  85  days must be earned after June 30,
1990.
    The one time member and employer contributions shall be a
percentage of the retiring  member's  highest  annual  salary
rate  used  in  the  determination  of the average salary for
retirement annuity purposes.  However, when  determining  the
one-time  member  and  employer contributions, that part of a
member's salary with the  same  employer  which  exceeds  the
annual  salary  rate  for the preceding year by more than 20%
shall be excluded.  The member contribution shall be  at  the
rate  of  7%  for the lesser of the following 2 periods:  (1)
for each year that the member is less than age 60; or (2) for
each year that the member's creditable service is  less  than
35 years.  If a member is at least age 55 and has at least 34
years   of   creditable   service,   no  member  or  employer
contribution  for  the  early  retirement  option  shall   be
required.   The employer contribution shall be at the rate of
20% for each year the member is under age 60.
    Upon receipt of the application and election, the  System
shall   determine   the   one   time  employee  and  employer
contributions required.  The  member  contribution  shall  be
credited  to  the  individual  account  of the member and the
employer contribution shall be credited to the Benefit  Trust
Reserve  Employer's  Contribution Reserve.  The provisions of
this Section shall  not  be  applicable  until  the  member's
contribution,  if  any,  has  been  received  by  the System;
however, the date such contributions are received  shall  not
be   considered   in   determining   the  effective  date  of
retirement.
    The number of members working for a single  employer  who
may  retire  under this Section in any year may be limited at
the option of the employer to a specified percentage of those
eligible, not less than 30%, with the right to participate to
be allocated among those applying on the basis  of  seniority
in the service of the employer.
(Source: P.A. 90-582, eff. 5-27-98; 91-17, eff. 6-4-99.)

    (40 ILCS 5/16-149.2) (from Ch. 108 1/2, par. 16-149.2)
    Sec. 16-149.2.  Disability retirement annuity.
    (a)  A   member   whose   disability   benefit  has  been
terminated under the provisions  of  Section  16-149  may  be
retired  on a disability retirement annuity payable effective
the  day  following  such  termination  provided  the  member
remains disabled under the standard of disability provided in
Section 16-149.
    The disability retirement annuity shall be  payable  upon
receipt  of  written  certificates  from  at least 2 licensed
physicians   designated   by   the   System   verifying   the
continuation  of  the  disability  condition.  A   disability
retirement  annuity  shall  not be paid during any period for
which the member  receives  benefits  under  Section  16-133,
Section 16-149, or Section 16-149.1 or has a right to receive
a  salary  as  a teacher, or is employed in any capacity as a
teacher by the employers included under this System or in  an
equivalent  capacity  in  any other public or private school,
college or university.
    (b)  The disability retirement annuity shall be equal  to
the  larger  of:   (1) 35% of the most recent annual contract
salary rate or for part-time  and  substitute  members  after
June 30, 1990, the most recent annualized salary rate; or (2)
if  disability  commences prior to the member's attainment of
age 55,  the  amount  computed  in  accordance  with  Section
16-133,  provided  the amount computed under paragraph (B) of
Section 16-133 shall be reduced by 1/2 of 1% for  each  month
that  the  member  is  less than age 55; or (3) if disability
commences after the member's attainment of age  55,  and  the
member  is  not  receiving a retirement annuity under Section
16-133,  the  amount  computed  in  accordance  with  Section
16-133.
    Prior to July 1, 1990,  if  the  most  recent  period  of
service  of  any  member  eligible  to  receive  a disability
retirement annuity was rendered on a less than full-time  but
not  less  than half-time basis, the amount of the disability
retirement annuity payable shall be computed on the basis  of
the salary received by such member for the member's last year
of  service  on  a full-time basis if such salary was greater
than the member's most recent salary.
    (c)  If an annuitant receiving  a  disability  retirement
annuity under this Section is engaged in or able to engage in
gainful  employment  paying  more than the difference between
the disability retirement annuity and the  salary  rate  upon
which  the  disability benefit is based, with no salary to be
considered less than the minimum prescribed in  Section  24-8
of  the  School Code, the disability retirement annuity shall
be reduced to an amount which together with the amount earned
by the annuitant, equals  the  salary  rate  upon  which  the
disability  benefit  is  based.  However, for the purposes of
this subsection (c) only, the  salary  rate  upon  which  the
benefit  is  based  shall be deemed to increase by 15% on the
tenth anniversary of the commencement of the annuity.
    Once  each  year  during  the  first  5  years  following
retirement on a disability retirement annuity,  and  once  in
every  3-year  period  thereafter,  the System may require an
annuitant to undergo a medical examination, by a physician or
physicians  designated  by  the  System.   If  the  annuitant
refuses to submit to such medical  examination,  the  annuity
shall  be  discontinued  until  such  time  as  the annuitant
consents to the examination, and if refusal continues for one
year, all the rights to the annuity shall be revoked.
    (d)  If  an  annuitant  in  receipt   of   a   disability
retirement  annuity returns to active service as a teacher or
is no longer disabled,  such  annuity  shall  cease  and  the
annuitant  shall  again  become  a  member  of the Retirement
System and, if in active service as  a  teacher,  shall  make
regular    contributions.       The   remaining   accumulated
contributions  shall   be   transferred   to   the   Members'
Contribution   Reserve   from   the  Employer's  Contribution
Reserve.  All service for which the annuitant had  credit  on
the date of disability shall be properly reestablished.
    An  annuitant  in  receipt  of  a  disability  retirement
annuity  who  returns  to active service as a teacher and who
again  becomes  disabled  shall  not   be   entitled   to   a
recomputation  of  the disability retirement annuity based on
amendments enacted while the annuitant was in receipt of  the
annuity  unless  at  least  one year of creditable service is
rendered after the latest re-entry into service.
    (e)  An annuitant in receipt of a  disability  retirement
annuity  may,  upon  reaching  retirement age as specified in
Section 16-132, apply for a retirement annuity which is to be
calculated as specified in Section  16-133.   The  disability
retirement annuity shall be discontinued upon commencement of
the retirement annuity.
    (f)  The   board  shall  prescribe  rules  governing  the
filing, investigation, control, and supervision of disability
retirement  claims.   The  rules   shall   include   specific
standards  to  be  used  when  requesting  additional medical
examinations, hospital records or other  data  necessary  for
determining  the  employment  capacity  and  condition of the
annuitant.  Costs incurred by a claimant in  connection  with
completing  a  claim for disability benefits shall be paid by
the claimant.
    The changes to this Section made by this  amendatory  Act
of  1991  shall apply not only to persons who on or after its
effective date are in service as a teacher under the  System,
but  also  to  persons  whose  status as a teacher terminated
prior to that date, whether or not the person is an annuitant
on that date.
(Source: P.A. 86-273; 86-1488; 87-794.)

    (40 ILCS 5/16-150) (from Ch. 108 1/2, par. 16-150)
    Sec. 16-150.   Re-entry.   If  an  annuitant  under  this
System is again employed as a teacher for an aggregate period
exceeding  that  permitted  by  Section  16-118,  his  or her
retirement annuity shall  be  terminated  and  the  annuitant
shall  thereupon  be  regarded  as  an  active  member.   The
annuitant's  remaining  accumulated  contributions  shall  be
transferred  to  the  Members'  Contribution Reserve from the
Employer's Contribution Reserve.
    Such annuitant is not entitled to a recomputation of  his
or  her  retirement  annuity unless at least one full year of
creditable service is rendered after the latest re-entry into
service and the annuitant must have rendered at least 3 years
of creditable service after last  re-entry  into  service  to
qualify  for  a recomputation of the retirement annuity based
on amendments  enacted  while  in  receipt  of  a  retirement
annuity, except when retirement was due to disability.
    However,  regardless of age, an annuitant in receipt of a
retirement annuity may be given  temporary  employment  by  a
school  board  not  exceeding  that  permitted  under Section
16-118 and continue to receive the retirement annuity.
    Unless  retirement  was  necessitated  by  disability,  a
retirement shall be considered cancelled and  the  retirement
allowance must be repaid in full if the annuitant is employed
as  a teacher within the school year during which service was
terminated.
    An annuitant's retirement which does not include a period
of at least one  full  and  complete  school  year  shall  be
considered  cancelled  and  the  retirement  annuity  must be
repaid in full unless such  retirement  was  necessitated  by
disability.
(Source: P.A. 86-273; 87-794.)

    (40 ILCS 5/16-151) (from Ch. 108 1/2, par. 16-151)
    Sec. 16-151. Refund.  Upon termination of employment as a
teacher  for  any  cause  other  than  death or retirement, a
member shall be paid the following amount upon demand made at
least 4 months after ceasing to teach:
         (1)  from  the  Benefit   Trust   Reserve   Members'
    Contribution Reserve, the actual total contributions paid
    by  or  on  behalf  of  the member for membership service
    which have not been previously  refunded  and  which  are
    then  credited  to the member's individual account in the
    Benefit  Trust  Reserve  Members'  Contribution  Reserve,
    without interest thereon, and
         (2)  from  the  Benefit  Trust  Reserve   Employer's
    Contribution   Reserve,   the  actual  contributions  not
    previously refunded, paid by or on behalf of  the  member
    for  prior  service and towards the cost of the automatic
    annual increase in retirement annuity as  provided  under
    Section 16-152, without interest thereon.
    Any  such amounts may be paid to the member either in one
sum or,  at  the  election  of  the  board,  in  4  quarterly
payments.
    Contributions   credited  to  a  member  for  periods  of
disability as provided in Sections 16-149  and  16-149.1  are
not refundable.
    Upon  acceptance  of  a  refund,  all  accrued rights and
credits in the System are forfeited  and  may  be  reinstated
only  if the refund is repaid together with interest from the
date of the refund to the date of repayment at the  following
rates  compounded  annually:   for  periods  prior to July 1,
1965, regular interest; for periods from July 1, 1965 to June
30, 1977, 4% per year; for periods on and after July 1, 1977,
regular interest. Repayment shall be permitted upon return to
membership; however, service credit previously forfeited by a
refund and subsequently reinstated may not be used as a basis
for  the  payment  of  benefits,  other  than  a  refund   of
contributions,  prior  to  the  completion  of  one  year  of
creditable   service   following   the  refund,  except  when
repayment  is  permitted  under   the   provisions   of   the
"Retirement Systems Reciprocal Act" contained in Article 20.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/16-182) (from Ch. 108 1/2, par. 16-182)
    Sec. 16-182.  Members' Contribution Reserve.
    (a)  On  July  1, 2003, the Members' Contribution Reserve
is abolished and the remaining balance shall  be  transferred
from  that  Reserve to the Benefit Trust Reserve.  A Members'
Contribution Reserve shall be established for the purpose  of
accumulating  with  regular  interest  the  contributions  of
members made prior to retirement.
    This Reserve shall be credited with:
         (1)  The   total   accumulated   contributions   for
    membership  service,  as  of  the  date  this  reserve is
    established,  exclusive  of  contributions   for   annual
    increases in retirement annuity and survivor benefits.
         (2)  The member contributions received under Section
    16-133.2.
         (3)  The  normal  contributions under Section 16-128
    and Section 16-131.2 together with regular interest.
         (4)  The total of all normal contributions for  each
    fiscal year as of the end of the fiscal year.
         (5)  The  excess of the accumulated contributions of
    an annuitant at retirement over  the  retirement  annuity
    payments  received,  to  be  computed  upon re-entry into
    service after termination  of  a  retirement  annuity  as
    provided  in  Section  16-150,  or after termination of a
    disability retirement  annuity  as  provided  in  Section
    16-149.2.
         (6)  Regular    interest    on    the    accumulated
    contributions  in the members' contribution reserve as of
    the end of the previous fiscal year, credited to the date
    of retirement or death for those retiring or dying during
    the fiscal year, and to the end of the  fiscal  year  for
    all other members.
    (b)  This Reserve shall be charged with:
         (1)  The   accumulated   contributions   of  members
    retired under the provisions of Sections 16-133, 16-136.4
    and 16-149.2.
         (2)  The  accumulated   contributions   of   members
    granted a refund under the provisions of Section 16-151.
         (3)  The   accumulated   contributions  of  deceased
    members upon payment of a refund as provided  in  Section
    16-138.
         (4)  The  accumulated  contributions  together  with
    regular interest as provided in Section 16-131.1.
    (c)  Upon  the  granting  of  a retirement annuity or the
payment of a single-sum retirement  benefit  or  a  death  or
refund  benefit,  all  individual  accumulated credits of the
member concerned shall be terminated.
    (d)  Amounts credited to the account of  a  member  under
this  Reserve  shall  not  be  used  until  such member dies,
retires,  accepts  a  refund,  or  requests  a  transfer   of
contributions.
(Source: P.A. 87-11.)

    (40 ILCS 5/16-184) (from Ch. 108 1/2, par. 16-184)
    Sec. 16-184.  Supplementary Annuity Reserve.
    (a)  Except  as  provided in subsection (b), a Reserve to
be known as the Supplementary Annuity Reserve is  established
for  the  purpose  of  crediting  funds received and charging
disbursements made for supplementary annuities under  Section
16-135 and Section 16-149.4.
    This Reserve shall be credited with:
         (1)  The   total   of   all  contributions  made  by
    annuitants to qualify for supplementary annuities.
         (2)  Amounts contributed to the System by the  State
    of  Illinois that are sufficient to assure payment of the
    supplementary annuities.
         (3)  Regular  interest  computed  annually  on   the
    average balance in this reserve.
    This  Reserve  shall  be  charged  with  all supplemental
annuity payments under Section 16-135 and Section 16-149.4.
    (b)  On  the  July  1,  2003  next  occurring  after  the
effective date of this amendatory Act  of  the  91st  General
Assembly,  the  Supplemental Annuity Reserve is abolished and
any remaining balance shall be transferred from that  Reserve
to the Benefit Trust Reserve Employer's Contribution Reserve.
(Source: P.A. 91-887, eff. 7-6-00.)
    (40 ILCS 5/16-185) (from Ch. 108 1/2, par. 16-185)
    Sec.   16-185.   Benefit  Trust  Employer's  Contribution
Reserve.
    (a)  On July 1, 2003, the Employer's Contribution Reserve
shall be renamed the  Benefit  Trust  Reserve.   The  Benefit
Trust  Reserve  shall  serve as a clearing account for income
and expenses of the System as well as transfers to  and  from
the other reserve accounts established under this Article and
adjustments thereto.
    (b)  This    Reserve   shall   be   credited   with   all
contributions, investment income, and other  income  received
by the System, except as otherwise required by this Article.:
         (1)  All  amounts  contributed  by the State, except
    those credited to other reserve accounts as  provided  in
    this Article.
         (2)  The  total  member  and  employer contributions
    except those required by other reserve accounts.
         (3)  The total income from invested  assets  of  the
    System, and other miscellaneous income.
         (4)  The   interest   portion   of  the  accumulated
    contributions of members granted refunds.
         (5)  Contributions made by annuitants to qualify for
    automatic  annual  increases  in  annuity,  except  those
    required by other reserve accounts.
    (c)  This Reserve shall be charged with all benefits  and
refunds  paid and all other expenses of the System, except as
otherwise required under this Article.:
         (1)  All amounts necessary to be transferred to  the
    Members' Contribution Reserve.
         (2)  All  retirement  annuity, single-sum retirement
    benefit  and  disability  retirement  annuity   payments,
    including automatic annual increases in annuities, except
    as provided by other reserve accounts.
         (3)  All   amounts   necessary  to  be  refunded  to
    withdrawing members except as provided  by  the  Members'
    Contribution Reserve.
         (4)  All    benefits    paid   to   temporarily   or
    accidentally disabled members of  this  System,  and  all
    amounts credited to the accounts of such disabled members
    in lieu of contributions.
         (5)  All amounts payable as death benefits except as
    provided by the Members' Contribution Reserve.
         (6)  All  amounts necessary for the payment of costs
    for the health insurance program as provided  under  this
    Article.
         (7)  All  survivor benefit contributions refunded to
    an annuitant as provided under Section 16-143.2.
         (8)  All amounts paid  in  accordance  with  Section
    16-131.1  except as provided by the Members' Contribution
    Reserve.
         (9)  Interest  to  be  credited  to  other   reserve
    accounts as specified in this Article.
         (10)  Recognition  of  unrealized gains or losses in
    market  value,  upon  adoption  of   generally   accepted
    accounting principles that allow for such recognition.
(Source: P.A. 89-235, eff. 8-4-95; 90-448, eff. 8-16-97.)

    (40 ILCS 5/16-186.3) (from Ch. 108 1/2, par. 16-186.3)
    Sec. 16-186.3.  Reserve for minimum retirement annuity.
    (a)  A  Minimum Retirement Annuity Reserve is established
for the purpose of  crediting  funds  received  and  charging
disbursements  for  minimum retirement annuity payments under
Section 16-136.2 and Section 16-136.3.
    This Reserve shall be credited with:
         (1)  The  total  of  all   contributions   made   by
    annuitants to qualify for the minimum retirement annuity.
         (2)  Amounts  contributed to the System by the State
    of Illinois that are sufficient to assure payment of  the
    minimum   retirement   annuity   payments  under  Section
    16-136.2 and Section 16-136.3.
         (3)  Regular  interest  computed  annually  on   the
    average balance in this Reserve.
    This Reserve shall be charged with all minimum retirement
annuity payments under Section 16-136.2 and Section 16-136.3.
    (b)  After  all  minimum retirement annuity payments have
been completed, any remaining funds shall be transferred from
this  Reserve  to  the  Benefit  Trust   Reserve   Employer's
Contribution Reserve.
(Source: P.A. 88-593, eff. 8-22-94.)

    Section  99.  Effective date.  This Act takes effect upon
becoming law.