Public Act 098-1164
 
SB2933 EnrolledLRB098 19649 RPM 54852 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
Section 22-101B as follows:
 
    (40 ILCS 5/22-101B)
    Sec. 22-101B. Health Care Benefits.
    (a) The Chicago Transit Authority (hereinafter referred to
in this Section as the "Authority") shall take all actions
lawfully available to it to separate the funding of health care
benefits for retirees and their dependents and survivors from
the funding for its retirement system. The Authority shall
endeavor to achieve this separation as soon as possible, and in
any event no later than July 1, 2009.
    (b) Effective 90 days after the effective date of this
amendatory Act of the 95th General Assembly, a Retiree Health
Care Trust is established for the purpose of providing health
care benefits to eligible retirees and their dependents and
survivors in accordance with the terms and conditions set forth
in this Section 22-101B. The Retiree Health Care Trust shall be
solely responsible for providing health care benefits to
eligible retirees and their dependents and survivors upon the
exhaustion of the account established by the Retirement Plan
for Chicago Transit Authority Employees pursuant to Section
401(h) of the Internal Revenue Code of 1986, but no earlier
than January 1, 2009 and no later than July 1, 2009.
        (1) The Board of Trustees shall consist of 7 members
    appointed as follows: (i) 3 trustees shall be appointed by
    the Chicago Transit Board; (ii) one trustee 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 retiree health 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 Article 1 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 Retiree Health Care Trust, and may set
    forth that requirement in the trust agreement or by-laws of
    the Board of Trustees. Each trustee shall have the rights,
    privileges, authority and obligations as are usual and
    customary for such fiduciaries.
        (2) The Board of Trustees shall establish and
    administer a health care benefit program for eligible
    retirees and their dependents and survivors. Any health
    care benefit program established by the Board of Trustees
    for eligible retirees and their dependents and survivors
    effective on or after July 1, 2009 shall not contain any
    plan which provides for more than 90% coverage for
    in-network services or 70% coverage for out-of-network
    services after any deductible has been paid, except that
    coverage through a health maintenance organization ("HMO")
    may be provided at 100%.
        (2.5) The Board of Trustees may also establish and
    administer a health reimbursement arrangement for retirees
    and for former employees of the Authority or the Retirement
    Plan, and their survivors, who have contributed to the
    Retiree Health Care Trust but do not satisfy the years of
    service requirement of subdivision (b)(4) and the terms of
    the retiree health care plan; or for those who do satisfy
    the requirements of subdivision (b)(4) and the terms of the
    retiree health care plan but who decline coverage under the
    plan prior to retirement. Any such health reimbursement
    arrangement may provide that: the retirees or former
    employees of the Authority or the Retirement Plan, and
    their survivors, must have reached age 65 to be eligible to
    participate in the health reimbursement arrangement;
    contributions by the retirees or former employees of the
    Authority or the Retirement Plan to the Retiree Health Care
    Trust shall be considered assets of the Retiree Health Care
    Trust only; contributions shall not accrue interest for the
    benefit of the retiree or former employee of the Authority
    or the Retirement Plan or survivor; benefits shall be
    payable in accordance with the Internal Revenue Code of
    1986; the amounts paid to or on account of the retiree or
    former employee of the Authority or the Retirement Plan or
    survivor shall not exceed the total amount which the
    retiree or former employee of the Authority or the
    Retirement Plan contributed to the Retiree Health Care
    Trust; the Retiree Health Care Trust may charge a
    reasonable administrative fee for processing the benefits.
    The Board of Trustees of the Retiree Health Care Trust may
    establish such rules, limitations and requirements as the
    Board of Trustees deems appropriate.
        (3) The Retiree Health Care Trust shall be administered
    by the Board of Trustees according to the following
    requirements:
            (i) The Board of Trustees may cause amounts on
        deposit in the Retiree Health Care Trust 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.
            (ii) The Board of Trustees shall establish and
        maintain an appropriate funding reserve level which
        shall not be less than the amount of incurred and
        unreported claims plus 12 months of expected claims and
        administrative expenses.
            (iii) The Board of Trustees shall make an annual
        assessment of the funding levels of the Retiree Health
        Care Trust and shall submit a report to the Auditor
        General at least 90 days prior to the end of the fiscal
        year. The report shall provide the following:
                (A) the actuarial present value of projected
            benefits expected to be paid to current and future
            retirees and their dependents and survivors;
                (B) the actuarial present value of projected
            contributions and trust income plus assets;
                (C) the reserve required by subsection
            (b)(3)(ii); and
                (D) an assessment of whether the actuarial
            present value of projected benefits expected to be
            paid to current and future retirees and their
            dependents and survivors exceeds or is less than
            the actuarial present value of projected
            contributions and trust income plus assets in
            excess of the reserve required by subsection
            (b)(3)(ii).
            If the actuarial present value of projected
        benefits expected to be paid to current and future
        retirees and their dependents and survivors exceeds
        the actuarial present value of projected contributions
        and trust income plus assets in excess of the reserve
        required by subsection (b)(3)(ii), then the report
        shall provide a plan, to be implemented over a period
        of not more than 10 years from each valuation date,
        which would make the actuarial present value of
        projected contributions and trust income plus assets
        equal to or exceed the actuarial present value of
        projected benefits expected to be paid to current and
        future retirees and their dependents and survivors.
        The plan may consist of increases in employee, retiree,
        dependent, or survivor contribution levels, decreases
        in benefit levels, or other plan changes or any
        combination thereof. If the actuarial present value of
        projected benefits expected to be paid to current and
        future retirees and their dependents and survivors is
        less than the actuarial present value of projected
        contributions and trust income plus assets in excess of
        the reserve required by subsection (b)(3)(ii), then
        the report may provide a plan of decreases in employee,
        retiree, dependent, or survivor contribution levels,
        increases in benefit levels, or other plan changes, or
        any combination thereof, to the extent of the surplus.
            (iv) The Auditor General shall review the report
        and plan provided in subsection (b)(3)(iii) and issue a
        determination within 90 days after receiving the
        report and plan, with a copy of such determination
        provided to the General Assembly and the Regional
        Transportation Authority, as follows:
                (A) In the event of a projected shortfall, if
            the Auditor General determines that the
            assumptions stated in the report are not
            unreasonable in the aggregate and that the plan of
            increases in employee, retiree, dependent, or
            survivor contribution levels, decreases in benefit
            levels, or other plan changes, or any combination
            thereof, to be implemented over a period of not
            more than 10 years from each valuation date, is
            reasonably projected to make the actuarial present
            value of projected contributions and trust income
            plus assets equal to or in excess of the actuarial
            present value of projected benefits expected to be
            paid to current and future retirees and their
            dependents and survivors, then the Board of
            Trustees shall implement the plan. If the Auditor
            General determines that the assumptions stated in
            the report are unreasonable in the aggregate, or
            that the plan of increases in employee, retiree,
            dependent, or survivor contribution levels,
            decreases in benefit levels, or other plan changes
            to be implemented over a period of not more than 10
            years from each valuation date, is not reasonably
            projected to make the actuarial present value of
            projected contributions and trust income plus
            assets equal to or in excess of the actuarial
            present value of projected benefits expected to be
            paid to current and future retirees and their
            dependents and survivors, then the Board of
            Trustees shall not implement the plan, the Auditor
            General shall explain the basis for such
            determination to the Board of Trustees, and the
            Auditor General may make recommendations as to an
            alternative report and plan.
                (B) In the event of a projected surplus, if the
            Auditor General determines that the assumptions
            stated in the report are not unreasonable in the
            aggregate and that the plan of decreases in
            employee, retiree, dependent, or survivor
            contribution levels, increases in benefit levels,
            or both, is not unreasonable in the aggregate, then
            the Board of Trustees shall implement the plan. If
            the Auditor General determines that the
            assumptions stated in the report are unreasonable
            in the aggregate, or that the plan of decreases in
            employee, retiree, dependent, or survivor
            contribution levels, increases in benefit levels,
            or both, is unreasonable in the aggregate, then the
            Board of Trustees shall not implement the plan, the
            Auditor General shall explain the basis for such
            determination to the Board of Trustees, and the
            Auditor General may make recommendations as to an
            alternative report and plan.
                (C) The Board of Trustees shall submit an
            alternative report and plan within 45 days after
            receiving a rejection determination by the Auditor
            General. A determination by the Auditor General on
            any alternative report and plan submitted by the
            Board of Trustees shall be made within 90 days
            after receiving the alternative report and plan,
            and shall be accepted or rejected according to the
            requirements of this subsection (b)(3)(iv). The
            Board of Trustees shall continue to submit
            alternative reports and plans to the Auditor
            General, as necessary, until a favorable
            determination is made by the Auditor General.
        (4) For any retiree who first retires effective on or
    after January 18, 2008, to be eligible for retiree health
    care benefits upon retirement, the retiree must be at least
    55 years of age, retire with 10 or more years of continuous
    service and satisfy the preconditions established by
    Public Act 95-708 in addition to any rules or regulations
    promulgated by the Board of Trustees. Notwithstanding the
    foregoing, any retiree hired on or before September 5, 2001
    who retires with 25 years or more of continuous service
    shall be eligible for retiree health care benefits upon
    retirement in accordance with any rules or regulations
    adopted by the Board of Trustees; provided he or she
    retires prior to the full execution of the successor
    collective bargaining agreement to the collective
    bargaining agreement that became effective January 1, 2007
    between the Authority and the organizations representing
    the highest and second-highest number of Chicago Transit
    Authority participants. This paragraph (4) shall not apply
    to a disability allowance.
        (5) Effective January 1, 2009, the aggregate amount of
    retiree, dependent and survivor contributions to the cost
    of their health care benefits shall not exceed more than
    45% of the total cost of such benefits. The Board of
    Trustees shall have the discretion to provide different
    contribution levels for retirees, dependents and survivors
    based on their years of service, level of coverage or
    Medicare eligibility, provided that the total contribution
    from all retirees, dependents, and survivors shall be not
    more than 45% of the total cost of such benefits. The term
    "total cost of such benefits" for purposes of this
    subsection shall be the total amount expended by the
    retiree health benefit program in the prior plan year, as
    calculated and certified in writing by the Retiree Health
    Care Trust's enrolled actuary to be appointed and paid for
    by the Board of Trustees.
        (6) Effective January 18, 2008, all employees of the
    Authority shall contribute to the Retiree Health Care Trust
    in an amount not less than 3% of compensation.
        (7) No earlier than January 1, 2009 and no later than
    July 1, 2009 as the Retiree Health Care Trust becomes
    solely responsible for providing health care benefits to
    eligible retirees and their dependents and survivors in
    accordance with subsection (b) of this Section 22-101B, the
    Authority shall not have any obligation to provide health
    care to current or future retirees and their dependents or
    survivors. Employees, retirees, dependents, and survivors
    who are required to make contributions to the Retiree
    Health Care Trust shall make contributions at the level set
    by the Board of Trustees pursuant to the requirements of
    this Section 22-101B.
(Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08;
96-1254, eff. 7-23-10.)