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.