Public Act 097-0442
 
HB3591 EnrolledLRB097 10786 JDS 51220 b

    AN ACT concerning 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 22-101 and 22-103 as follows:
 
    (40 ILCS 5/22-101)  (from Ch. 108 1/2, par. 22-101)
    Sec. 22-101. Retirement Plan for Chicago Transit Authority
Employees.
    (a) There shall be established and maintained by the
Authority created by the "Metropolitan Transit Authority Act",
approved April 12, 1945, as amended, (referred to in this
Section as the "Authority") a financially sound pension and
retirement system adequate to provide for all payments when due
under such established system or as modified from time to time
by ordinance of the Chicago Transit Board or collective
bargaining agreement. For this purpose, the Board must make
contributions to the established system as required under this
Section and may make any additional contributions provided for
by Board ordinance or collective bargaining agreement. The
participating employees shall make such periodic payments to
the established system as required under this Section and may
make any additional contributions provided for by Board
ordinance or collective bargaining agreement.
    Provisions shall be made by the Board for all officers and
employees of the Authority appointed pursuant to the
"Metropolitan Transit Authority Act" to become, subject to
reasonable rules and regulations, participants of the pension
or retirement system with uniform rights, privileges,
obligations and status as to the class in which such officers
and employees belong. The terms, conditions and provisions of
any pension or retirement system or of any amendment or
modification thereof affecting employees who are members of any
labor organization may be established, amended or modified by
agreement with such labor organization, provided the terms,
conditions and provisions must be consistent with this Act, the
annual funding levels for the retirement system established by
law must be met and the benefits paid to future participants in
the system may not exceed the benefit ceilings set for future
participants under this Act and the contribution levels
required by the Authority and its employees may not be less
than the contribution levels established under this Act.
    (b) The Board of Trustees shall consist of 11 members
appointed as follows: (i) 5 trustees shall be appointed by the
Chicago Transit Board; (ii) 3 trustees shall be appointed by an
organization representing the highest number of Chicago
Transit Authority participants; (iii) one trustee shall be
appointed by an organization representing the second-highest
number of Chicago Transit Authority participants; (iv) one
trustee shall be appointed by the recognized coalition
representatives of participants who are not represented by an
organization with the highest or second-highest number of
Chicago Transit Authority participants; and (v) one trustee
shall be selected by the Regional Transportation Authority
Board of Directors, and the trustee shall be a professional
fiduciary who has experience in the area of collectively
bargained pension plans. Trustees shall serve until a successor
has been appointed and qualified, or until resignation, death,
incapacity, or disqualification.
    Any person appointed as a trustee of the board shall
qualify by taking an oath of office that he or she will
diligently and honestly administer the affairs of the system
and will not knowingly violate or willfully permit the
violation of any of the provisions of law applicable to the
Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110,
1-111, 1-114, and 1-115 of the Illinois Pension Code.
    Each trustee shall cast individual votes, and a majority
vote shall be final and binding upon all interested parties,
provided that the Board of Trustees may require a supermajority
vote with respect to the investment of the assets of the
Retirement Plan, and may set forth that requirement in the
Retirement Plan documents, by-laws, or rules of the Board of
Trustees. Each trustee shall have the rights, privileges,
authority, and obligations as are usual and customary for such
fiduciaries.
    The Board of Trustees may cause amounts on deposit in the
Retirement Plan to be invested in those investments that are
permitted investments for the investment of moneys held under
any one or more of the pension or retirement systems of the
State, any unit of local government or school district, or any
agency or instrumentality thereof. The Board, by a vote of at
least two-thirds of the trustees, may transfer investment
management to the Illinois State Board of Investment, which is
hereby authorized to manage these investments when so requested
by the Board of Trustees.
    (c) All individuals who were previously participants in the
Retirement Plan for Chicago Transit Authority Employees shall
remain participants, and shall receive the same benefits
established by the Retirement Plan for Chicago Transit
Authority Employees, except as provided in this amendatory Act
or by subsequent legislative enactment or amendment to the
Retirement Plan. For Authority employees hired on or after the
effective date of this amendatory Act of the 95th General
Assembly, the Retirement Plan for Chicago Transit Authority
Employees shall be the exclusive retirement plan and such
employees shall not be eligible for any supplemental plan,
except for a deferred compensation plan funded only by employee
contributions.
    For all Authority employees who are first hired on or after
the effective date of this amendatory Act of the 95th General
Assembly and are participants in the Retirement Plan for
Chicago Transit Authority Employees, the following terms,
conditions and provisions with respect to retirement shall be
applicable:
        (1) Such participant shall be eligible for an unreduced
    retirement allowance for life upon the attainment of age 64
    with 25 years of continuous service.
        (2) Such participant shall be eligible for a reduced
    retirement allowance for life upon the attainment of age 55
    with 10 years of continuous service.
        (3) For the purpose of determining the retirement
    allowance to be paid to a retiring employee, the term
    "Continuous Service" as used in the Retirement Plan for
    Chicago Transit Authority Employees shall also be deemed to
    include all pension credit for service with any retirement
    system established under Article 8 or Article 11 of this
    Code, provided that the employee forfeits and relinquishes
    all pension credit under Article 8 or Article 11 of this
    Code, and the contribution required under this subsection
    is made by the employee. The Retirement Plan's actuary
    shall determine the contribution paid by the employee as an
    amount equal to the normal cost of the benefit accrued, had
    the service been rendered as an employee, plus interest per
    annum from the time such service was rendered until the
    date the payment is made.
    (d) From the effective date of this amendatory Act through
December 31, 2008, all participating employees shall
contribute to the Retirement Plan in an amount not less than 6%
of compensation, and the Authority shall contribute to the
Retirement Plan in an amount not less than 12% of compensation.
    (e)(1) Beginning January 1, 2009 the Authority shall make
contributions to the Retirement Plan in an amount equal to
twelve percent (12%) of compensation and participating
employees shall make contributions to the Retirement Plan in an
amount equal to six percent (6%) of compensation. These
contributions may be paid by the Authority and participating
employees on a payroll or other periodic basis, but shall in
any case be paid to the Retirement Plan at least monthly.
    (2) For the period ending December 31, 2040, the amount
paid by the Authority in any year with respect to debt service
on bonds issued for the purposes of funding a contribution to
the Retirement Plan under Section 12c of the Metropolitan
Transit Authority Act, other than debt service paid with the
proceeds of bonds or notes issued by the Authority for any year
after calendar year 2008, shall be treated as a credit against
the amount of required contribution to the Retirement Plan by
the Authority under subsection (e)(1) for the following year up
to an amount not to exceed 6% of compensation paid by the
Authority in that following year.
    (3) By September 15 of each year beginning in 2009 and
ending on December 31, 2039, on the basis of a report prepared
by an enrolled actuary retained by the Plan, the Board of
Trustees of the Retirement Plan shall determine the estimated
funded ratio of the total assets of the Retirement Plan to its
total actuarially determined liabilities. A report containing
that determination and the actuarial assumptions on which it is
based shall be filed with the Authority, the representatives of
its participating employees, the Auditor General of the State
of Illinois, and the Regional Transportation Authority. If the
funded ratio is projected to decline below 60% in any year
before 2040, the Board of Trustees shall also determine the
increased contribution required each year as a level percentage
of payroll over the years remaining until 2040 using the
projected unit credit actuarial cost method so the funded ratio
does not decline below 60% and include that determination in
its report. If the actual funded ratio declines below 60% in
any year prior to 2040, the Board of Trustees shall also
determine the increased contribution required each year as a
level percentage of payroll during the years after the then
current year using the projected unit credit actuarial cost
method so the funded ratio is projected to reach at least 60%
no later than 10 years after the then current year and include
that determination in its report. Within 60 days after
receiving the report, the Auditor General shall review the
determination and the assumptions on which it is based, and if
he finds that the determination and the assumptions on which it
is based are unreasonable in the aggregate, he shall issue a
new determination of the funded ratio, the assumptions on which
it is based and the increased contribution required each year
as a level percentage of payroll over the years remaining until
2040 using the projected unit credit actuarial cost method so
the funded ratio does not decline below 60%, or, in the event
of an actual decline below 60%, so the funded ratio is
projected to reach 60% by no later than 10 years after the then
current year. If the Board of Trustees or the Auditor General
determine that an increased contribution is required to meet
the funded ratio required by the subsection, effective January
1 following the determination or 30 days after such
determination, whichever is later, one-third of the increased
contribution shall be paid by participating employees and
two-thirds by the Authority, in addition to the contributions
required by this subsection (1).
    (4) For the period beginning 2040, the minimum contribution
to the Retirement Plan for each fiscal year shall be an amount
determined by the Board of Trustees of the Retirement Plan to
be sufficient to bring the total assets of the Retirement Plan
up to 90% of its total actuarial liabilities by the end of
2059. Participating employees shall be responsible for
one-third of the required contribution and the Authority shall
be responsible for two-thirds of the required contribution. In
making these determinations, the Board of Trustees shall
calculate the required contribution each year as a level
percentage of payroll over the years remaining to and including
fiscal year 2059 using the projected unit credit actuarial cost
method. A report containing that determination and the
actuarial assumptions on which it is based shall be filed by
September 15 of each year with the Authority, the
representatives of its participating employees, the Auditor
General of the State of Illinois and the Regional
Transportation Authority. If the funded ratio is projected to
fail to reach 90% by December 31, 2059, the Board of Trustees
shall also determine the increased contribution required each
year as a level percentage of payroll over the years remaining
until December 31, 2059 using the projected unit credit
actuarial cost method so the funded ratio will meet 90% by
December 31, 2059 and include that determination in its report.
Within 60 days after receiving the report, the Auditor General
shall review the determination and the assumptions on which it
is based and if he finds that the determination and the
assumptions on which it is based are unreasonable in the
aggregate, he shall issue a new determination of the funded
ratio, the assumptions on which it is based and the increased
contribution required each year as a level percentage of
payroll over the years remaining until December 31, 2059 using
the projected unit credit actuarial cost method so the funded
ratio reaches no less than 90% by December 31, 2059. If the
Board of Trustees or the Auditor General determine that an
increased contribution is required to meet the funded ratio
required by this subsection, effective January 1 following the
determination or 30 days after such determination, whichever is
later, one-third of the increased contribution shall be paid by
participating employees and two-thirds by the Authority, in
addition to the contributions required by subsection (e)(1).
    (5) Beginning in 2060, the minimum contribution for each
year shall be the amount needed to maintain the total assets of
the Retirement Plan at 90% of the total actuarial liabilities
of the Plan, and the contribution shall be funded two-thirds by
the Authority and one-third by the participating employees in
accordance with this subsection.
    (f) The Authority shall take the steps necessary to comply
with Section 414(h)(2) of the Internal Revenue Code of 1986, as
amended, to permit the pick-up of employee contributions under
subsections (d) and (e) on a tax-deferred basis.
    (g) The Board of Trustees shall certify to the Governor,
the General Assembly, the Auditor General, the Board of the
Regional Transportation Authority, and the Authority at least
90 days prior to the end of each fiscal year the amount of the
required contributions to the retirement system for the next
retirement system fiscal year under this Section. The
certification shall include a copy of the actuarial
recommendations upon which it is based. In addition, copies of
the certification shall be sent to the Commission on Government
Forecasting and Accountability and the Mayor of Chicago.
    (h)(1) As to an employee who first becomes entitled to a
retirement allowance commencing on or after November 30, 1989,
the retirement allowance shall be the amount determined in
accordance with the following formula:
        (A) One percent (1%) of his "Average Annual
    Compensation in the highest four (4) completed Plan Years"
    for each full year of continuous service from the date of
    original employment to the effective date of the Plan; plus
        (B) One and seventy-five hundredths percent (1.75%) of
    his "Average Annual Compensation in the highest four (4)
    completed Plan Years" for each year (including fractions
    thereof to completed calendar months) of continuous
    service as provided for in the Retirement Plan for Chicago
    Transit Authority Employees.
Provided, however that:
    (2) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 1993,
the retirement allowance shall be the amount determined in
accordance with the following formula:
        (A) One percent (1%) of his "Average Annual
    Compensation in the highest four (4) completed Plan Years"
    for each full year of continuous service from the date of
    original employment to the effective date of the Plan; plus
        (B) One and eighty hundredths percent (1.80%) of his
    "Average Annual Compensation in the highest four (4)
    completed Plan Years" for each year (including fractions
    thereof to completed calendar months) of continuous
    service as provided for in the Retirement Plan for Chicago
    Transit Authority Employees.
Provided, however that:
    (3) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 1994,
the retirement allowance shall be the amount determined in
accordance with the following formula:
        (A) One percent (1%) of his "Average Annual
    Compensation in the highest four (4) completed Plan Years"
    for each full year of continuous service from the date of
    original employment to the effective date of the Plan; plus
        (B) One and eighty-five hundredths percent (1.85%) of
    his "Average Annual Compensation in the highest four (4)
    completed Plan Years" for each year (including fractions
    thereof to completed calendar months) of continuous
    service as provided for in the Retirement Plan for Chicago
    Transit Authority Employees.
Provided, however that:
    (4) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 2000,
the retirement allowance shall be the amount determined in
accordance with the following formula:
        (A) One percent (1%) of his "Average Annual
    Compensation in the highest four (4) completed Plan Years"
    for each full year of continuous service from the date of
    original employment to the effective date of the Plan; plus
        (B) Two percent (2%) of his "Average Annual
    Compensation in the highest four (4) completed Plan Years"
    for each year (including fractions thereof to completed
    calendar months) of continuous service as provided for in
    the Retirement Plan for Chicago Transit Authority
    Employees.
Provided, however that:
    (5) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 2001,
the retirement allowance shall be the amount determined in
accordance with the following formula:
        (A) One percent (1%) of his "Average Annual
    Compensation in the highest four (4) completed Plan Years"
    for each full year of continuous service from the date of
    original employment to the effective date of the Plan; plus
        (B) Two and fifteen hundredths percent (2.15%) of his
    "Average Annual Compensation in the highest four (4)
    completed Plan Years" for each year (including fractions
    thereof to completed calendar months) of continuous
    service as provided for in the Retirement Plan for Chicago
    Transit Authority Employees.
    The changes made by this amendatory Act of the 95th General
Assembly, to the extent that they affect the rights or
privileges of Authority employees that are currently the
subject of collective bargaining, have been agreed to between
the authorized representatives of these employees and of the
Authority prior to enactment of this amendatory Act, as
evidenced by a Memorandum of Understanding between these
representatives that will be filed with the Secretary of State
Index Department and designated as "95-GA-C05". The General
Assembly finds and declares that those changes are consistent
with 49 U.S.C. 5333(b) (also known as Section 13(c) of the
Federal Transit Act) because of this agreement between
authorized representatives of these employees and of the
Authority, and that any future amendments to the provisions of
this amendatory Act of the 95th General Assembly, to the extent
those amendments would affect the rights and privileges of
Authority employees that are currently the subject of
collective bargaining, would be consistent with 49 U.S.C.
5333(b) if and only if those amendments were agreed to between
these authorized representatives prior to enactment.
    (i) Early retirement incentive plan; funded ratio.
        (1) Beginning on the effective date of this Section, no
    early retirement incentive shall be offered to
    participants of the Plan unless the Funded Ratio of the
    Plan is at least 80% or more.
        (2) For the purposes of this Section, the Funded Ratio
    shall be the Adjusted Assets divided by the Actuarial
    Accrued Liability developed in accordance with Statement
    #25 promulgated by the Government Accounting Standards
    Board and the actuarial assumptions described in the Plan.
    The Adjusted Assets shall be calculated based on the
    methodology described in the Plan.
    (j) Nothing in this amendatory Act of the 95th General
Assembly shall impair the rights or privileges of Authority
employees under any other law.
    (k) Any individual who, on or after the effective date of
this amendatory Act of the 97th General Assembly, first becomes
a participant of the Retirement Plan shall not be paid any of
the benefits provided under this Code if he or she is convicted
of a felony relating to, arising out of, or in connection with
his or her service as a participant.
    This subsection (k) shall not operate to impair any
contract or vested right acquired before the effective date of
this amendatory Act of the 97th General Assembly under any law
or laws continued in this Code, and it shall not preclude the
right to refund.
(Source: P.A. 94-839, eff. 6-6-06; 95-708, eff. 1-18-08.)
 
    (40 ILCS 5/22-103)
    Sec. 22-103. Regional Transportation Authority and related
pension plans.
    (a) As used in this Section:
    "Affected pension plan" means a defined-benefit pension
plan supported in whole or in part by employer contributions
and maintained by the Regional Transportation Authority, the
Suburban Bus Division, or the Commuter Rail Division, or any
combination thereof, under the general authority of the
Regional Transportation Authority Act, including but not
limited to any such plan that has been established under or is
subject to a collective bargaining agreement or is limited to
employees covered by a collective bargaining agreement.
"Affected pension plan" does not include any pension fund or
retirement system subject to Section 22-101 of this Section.
    "Authority" means the Regional Transportation Authority
created under the Regional Transportation Authority Act.
    "Contributing employer" means an employer that is required
to make contributions to an affected pension plan under the
terms of that plan.
    "Funding ratio" means the ratio of an affected pension
plan's assets to the present value of its actuarial
liabilities, as determined at its latest actuarial valuation in
accordance with applicable actuarial assumptions and
recommendations.
    "Under-funded pension plan" or "under-funded" means an
affected pension plan that, at the time of its last actuarial
valuation, has a funding ratio of less than 90%.
    (b) The contributing employers of each affected pension
plan have a general duty to make the required employer
contributions to the affected pension plan in a timely manner
in accordance with the terms of the plan. A contributing
employer must make contributions to the affected pension plan
as required under this subsection and, if applicable,
subsection (c); a contributing employer may make any additional
contributions provided for by the board of the employer or
collective bargaining agreement.
    (c) In the case of an affected pension plan that is
under-funded on January 1, 2009 or becomes under-funded at any
time after that date, the contributing employers shall
contribute to the affected pension plan, in addition to all
amounts otherwise required, amounts sufficient to bring the
funding ratio of the affected pension plan up to 90% in
accordance with an amortization schedule adopted jointly by the
contributing employers and the trustee of the affected pension
plan. The amortization schedule may extend for any period up to
a maximum of 50 years and shall provide for additional employer
contributions in substantially equal annual amounts over the
selected period. If the contributing employers and the trustee
of the affected pension plan do not agree on an appropriate
period for the amortization schedule within 6 months of the
date of determination that the plan is under-funded, then the
amortization schedule shall be based on a period of 50 years.
    In the case of an affected pension plan that has more than
one contributing employer, each contributing employer's share
of the total additional employer contributions required under
this subsection shall be determined: (i) in proportion to the
amounts, if any, by which the respective contributing employers
have failed to meet their contribution obligations under the
terms of the affected pension plan; or (ii) if all of the
contributing employers have met their contribution obligations
under the terms of the affected pension plan, then in the same
proportion as they are required to contribute under the terms
of that plan. In the case of an affected pension plan that has
only one contributing employer, that contributing employer is
responsible for all of the additional employer contributions
required under this subsection.
    If an under-funded pension plan is determined to have
achieved a funding ratio of at least 90% during the period when
an amortization schedule is in force under this Section, the
contributing employers and the trustee of the affected pension
plan, acting jointly, may cancel the amortization schedule and
the contributing employers may cease making additional
contributions under this subsection for as long as the affected
pension plan retains a funding ratio of at least 90%.
    (d) Beginning January 1, 2009, if the Authority fails to
pay to an affected pension fund within 30 days after it is due
(i) any employer contribution that it is required to make as a
contributing employer, (ii) any additional employer
contribution that it is required to pay under subsection (c),
or (iii) any payment that it is required to make under Section
4.02a or 4.02b of the Regional Transportation Authority Act,
the trustee of the affected pension fund shall promptly so
notify the Commission on Government Forecasting and
Accountability, the Mayor of Chicago, the Governor, and the
General Assembly.
    (e) For purposes of determining employer contributions,
assets, and actuarial liabilities under this subsection,
contributions, assets, and liabilities relating to health care
benefits shall not be included.
    (f) This amendatory Act of the 94th General Assembly does
not affect or impair the right of any contributing employer or
its employees to collectively bargain the amount or level of
employee contributions to an affected pension plan, to the
extent that the plan includes employees subject to collective
bargaining.
    (g) Any individual who, on or after the effective date of
this amendatory Act of the 97th General Assembly, first becomes
a participant of an affected pension plan shall not be paid any
of the benefits provided under this Code if he or she is
convicted of a felony relating to, arising out of, or in
connection with his or her service as a participant.
    This subsection shall not operate to impair any contract or
vested right acquired before the effective date of this
amendatory Act of the 97th General Assembly under any law or
laws continued in this Code, and it shall not preclude the
right to refund.
(Source: P.A. 94-839, eff. 6-6-06.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.