SB0662 100TH GENERAL ASSEMBLY

LRB100 06396 RPS 16435 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0662

Introduced 1/25/2017, by Sen. Michael E. Hastings

SYNOPSIS AS INTRODUCED:

See Index

Creates the Pension Buyout Act. Authorizes the Department of Central Management Services to enter into contracts with approved vendors to provide pension buyout payments to eligible retirees in the General Assembly, State Employee, State Universities, and Judges Retirement Systems. Requires the Illinois Finance Authority to issue bonds if the amount appropriated to implement the pension buyout option is less than the amount necessary for the Department to pay the approved vendor the amount required under a contract between the Department and the approved vendor for any fiscal year. Provides that the contract entered into by the Department shall be subject to the applicable requirements of the Illinois Procurement Code. Amends the General Assembly, State Employee, State Universities, and Judges Articles of the Illinois Pension Code. Provides that an eligible retiree may relinquish his or her right to receive any benefits from the system in exchange for a lump sum payment made by an approved vendor that is equal to the present value of the retirement annuity. Provides that a person who participates in the pension buyout option shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to. Contains provisions concerning the form of the contract; rulemaking; notice to the System; certification to the Department of the amount of lump sum payments made; and qualified plan status. Amends the State Employees Group Insurance Act of 1971, the Department of Central Management Services Law of the Civil Administrative Code of Illinois, the Illinois Procurement Code, and the Illinois Finance Authority Act to make related changes. Effective July 1, 2018.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE DEBT IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning public employee benefits.

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

Section 1. Short title. This Act may be cited as the Pension Buyout Act.

Section 5. Definitions. As used in this Act:

"Approved vendor" means a vendor who has entered into a contract with the Department to provide lump sum payments to eligible retirees pursuant to a pension buyout option.

"Authority" means the Illinois Finance Authority.

"Chief procurement officer" means the chief procurement officer appointed under paragraph (4) of subsection (a) of Section 10-20 of the Illinois Procurement Code.

"Department" means the Department of Central Management Services.

"Director" means the Director of Central Management Services.

"Pension buyout option" means a plan under Section 2-154.5, 14-147.5, 15-185.5, 16-190.5, or 18-161.5 of the Illinois Pension Code.

"Retirement system" means a retirement system established under Article 2, 14, 15, 16, or 18 of the Illinois Pension Code.

Section 10. Pension buyout option administration.

(a) The Department, on behalf of the State, may enter into contracts with approved vendors who will provide lump sum payments to eligible retirees pursuant to a pension buyout option. The contract shall be subject to the applicable requirements of the Illinois Procurement Code. The Department shall only enter into the contract after an open and competitive bidding process and the process shall comply with the procedures established by the chief procurement officer pursuant to Section 45-32 of the Illinois Procurement Code.

The contract entered into by the Department shall:

(1) not interfere with the ability of each retirement system to include any safeguards or other provisions that the retirement system may require to be included in the standardized form contract approved by the retirement system; and

(2) require the approved vendor to provide, at no cost to the eligible retiree, a minimum amount of certified financial planning services to the eligible retiree before he or she makes an election pursuant to a pension buyout option.

(b) The Department shall establish by rule dates by which the Board of Trustees of each retirement system must certify the amount of lump sum payments made under the pension buyout option for that retirement system. The Department shall establish by rule the minimum amount of certified financial planning services that the approved vendor must provide to each eligible retiree at no cost to the eligible retiree.

(c) If in any fiscal year the amount appropriated for all pension buyout options is less than the amount necessary for the Department to pay the amount required for that fiscal year under a contract between the Department and an approved vendor, the Director shall certify to the Authority the additional amount required for that fiscal year. The Authority shall issue bonds in the amount certified by the Director. The proceeds from the bonds issued under this Act shall only be used by the Department to pay an approved vendor the amount required for that fiscal year.

Section 15. Bond authorization. The Authority shall not have outstanding at any one time bonds for any of the purposes of this Act in an aggregate principal amount exceeding $500,000,000, excluding bonds issued to refund outstanding bonds.

Section 900. The State Employees Group Insurance Act of 1971 is amended by changing Sections 3 and 10 as follows:

(5 ILCS 375/3) (from Ch. 127, par. 523)

Sec. 3. Definitions. Unless the context otherwise requires, the following words and phrases as used in this Act shall have the following meanings. The Department may define these and other words and phrases separately for the purpose of implementing specific programs providing benefits under this Act.

(a) "Administrative service organization" means any person, firm or corporation experienced in the handling of claims which is fully qualified, financially sound and capable of meeting the service requirements of a contract of administration executed with the Department.

(b) "Annuitant" means (1) an employee who retires, or has retired, on or after January 1, 1966 on an immediate annuity under the provisions of Articles 2 (including an employee who, in lieu of receiving an annuity under that Article, has elected to participate in the pension buyout option under Section 2-154.5 of that Article), 14 (including an employee who has elected to receive an alternative retirement cancellation payment under Section 14-108.5 of the Illinois Pension Code in lieu of an annuity or who, in lieu of receiving an annuity under that Article, has elected to participate in the pension buyout option under Section 14-147.5 of that Article), 15 (including an employee who has retired under the optional retirement program established under Section 15-158.2 or who, in lieu of receiving an annuity under that Article, has elected to participate in the pension buyout option under Section 15-185.5 of the Article), paragraphs (2), (3), or (5) of Section 16-106 (including an employee who, in lieu of receiving an annuity under that Article, has elected to participate in the pension buyout option under Section 16-190.5 of the Illinois Pension Code), or Article 18 (including an employee who, in lieu of receiving an annuity under that Article, has elected to participate in the pension buyout option under Section 18-161.5 of that Article) of the Illinois Pension Code; (2) any person who was receiving group insurance coverage under this Act as of March 31, 1978 by reason of his status as an annuitant, even though the annuity in relation to which such coverage was provided is a proportional annuity based on less than the minimum period of service required for a retirement annuity in the system involved; (3) any person not otherwise covered by this Act who has retired as a participating member under Article 2 of the Illinois Pension Code but is ineligible for the retirement annuity under Section 2-119 of the Illinois Pension Code; (4) the spouse of any person who is receiving a retirement annuity under Article 18 of the Illinois Pension Code and who is covered under a group health insurance program sponsored by a governmental employer other than the State of Illinois and who has irrevocably elected to waive his or her coverage under this Act and to have his or her spouse considered as the "annuitant" under this Act and not as a "dependent"; or (5) an employee who retires, or has retired, from a qualified position, as determined according to rules promulgated by the Director, under a qualified local government, a qualified rehabilitation facility, a qualified domestic violence shelter or service, or a qualified child advocacy center. (For definition of "retired employee", see (p) post).

(b-5) (Blank).

(b-6) (Blank).

(b-7) (Blank).

(c) "Carrier" means (1) an insurance company, a corporation organized under the Limited Health Service Organization Act or the Voluntary Health Services Plan Act, a partnership, or other nongovernmental organization, which is authorized to do group life or group health insurance business in Illinois, or (2) the State of Illinois as a self-insurer.

(d) "Compensation" means salary or wages payable on a regular payroll by the State Treasurer on a warrant of the State Comptroller out of any State, trust or federal fund, or by the Governor of the State through a disbursing officer of the State out of a trust or out of federal funds, or by any Department out of State, trust, federal or other funds held by the State Treasurer or the Department, to any person for personal services currently performed, and ordinary or accidental disability benefits under Articles 2, 14, 15 (including ordinary or accidental disability benefits under the optional retirement program established under Section 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of the Illinois Pension Code, for disability incurred after January 1, 1966, or benefits payable under the Workers' Compensation or Occupational Diseases Act or benefits payable under a sick pay plan established in accordance with Section 36 of the State Finance Act. "Compensation" also means salary or wages paid to an employee of any qualified local government, qualified rehabilitation facility, qualified domestic violence shelter or service, or qualified child advocacy center.

(e) "Commission" means the State Employees Group Insurance Advisory Commission authorized by this Act. Commencing July 1, 1984, "Commission" as used in this Act means the Commission on Government Forecasting and Accountability as established by the Legislative Commission Reorganization Act of 1984.

(f) "Contributory", when referred to as contributory coverage, shall mean optional coverages or benefits elected by the member toward the cost of which such member makes contribution, or which are funded in whole or in part through the acceptance of a reduction in earnings or the foregoing of an increase in earnings by an employee, as distinguished from noncontributory coverage or benefits which are paid entirely by the State of Illinois without reduction of the member's salary.

(g) "Department" means any department, institution, board, commission, officer, court or any agency of the State government receiving appropriations and having power to certify payrolls to the Comptroller authorizing payments of salary and wages against such appropriations as are made by the General Assembly from any State fund, or against trust funds held by the State Treasurer and includes boards of trustees of the retirement systems created by Articles 2, 14, 15, 16 and 18 of the Illinois Pension Code. "Department" also includes the Illinois Comprehensive Health Insurance Board, the Board of Examiners established under the Illinois Public Accounting Act, and the Illinois Finance Authority.

(h) "Dependent", when the term is used in the context of the health and life plan, means a member's spouse and any child (1) from birth to age 26 including an adopted child, a child who lives with the member from the time of the filing of a petition for adoption until entry of an order of adoption, a stepchild or adjudicated child, or a child who lives with the member if such member is a court appointed guardian of the child or (2) age 19 or over who has a mental or physical disability from a cause originating prior to the age of 19 (age 26 if enrolled as an adult child dependent). For the health plan only, the term "dependent" also includes (1) any person enrolled prior to the effective date of this Section who is dependent upon the member to the extent that the member may claim such person as a dependent for income tax deduction purposes and (2) any person who has received after June 30, 2000 an organ transplant and who is financially dependent upon the member and eligible to be claimed as a dependent for income tax purposes. A member requesting to cover any dependent must provide documentation as requested by the Department of Central Management Services and file with the Department any and all forms required by the Department.

(i) "Director" means the Director of the Illinois Department of Central Management Services.

(j) "Eligibility period" means the period of time a member has to elect enrollment in programs or to select benefits without regard to age, sex or health.

(k) "Employee" means and includes each officer or employee in the service of a department who (1) receives his compensation for service rendered to the department on a warrant issued pursuant to a payroll certified by a department or on a warrant or check issued and drawn by a department upon a trust, federal or other fund or on a warrant issued pursuant to a payroll certified by an elected or duly appointed officer of the State or who receives payment of the performance of personal services on a warrant issued pursuant to a payroll certified by a Department and drawn by the Comptroller upon the State Treasurer against appropriations made by the General Assembly from any fund or against trust funds held by the State Treasurer, and (2) is employed full-time or part-time in a position normally requiring actual performance of duty during not less than 1/2 of a normal work period, as established by the Director in cooperation with each department, except that persons elected by popular vote will be considered employees during the entire term for which they are elected regardless of hours devoted to the service of the State, and (3) except that "employee" does not include any person who is not eligible by reason of such person's employment to participate in one of the State retirement systems under Articles 2, 14, 15 (either the regular Article 15 system or the optional retirement program established under Section 15-158.2) or 18, or under paragraph (2), (3), or (5) of Section 16-106, of the Illinois Pension Code, but such term does include persons who are employed during the 6 month qualifying period under Article 14 of the Illinois Pension Code. Such term also includes any person who (1) after January 1, 1966, is receiving ordinary or accidental disability benefits under Articles 2, 14, 15 (including ordinary or accidental disability benefits under the optional retirement program established under Section 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of the Illinois Pension Code, for disability incurred after January 1, 1966, (2) receives total permanent or total temporary disability under the Workers' Compensation Act or Occupational Disease Act as a result of injuries sustained or illness contracted in the course of employment with the State of Illinois, or (3) is not otherwise covered under this Act and has retired as a participating member under Article 2 of the Illinois Pension Code but is ineligible for the retirement annuity under Section 2-119 of the Illinois Pension Code. However, a person who satisfies the criteria of the foregoing definition of "employee" except that such person is made ineligible to participate in the State Universities Retirement System by clause (4) of subsection (a) of Section 15-107 of the Illinois Pension Code is also an "employee" for the purposes of this Act. "Employee" also includes any person receiving or eligible for benefits under a sick pay plan established in accordance with Section 36 of the State Finance Act. "Employee" also includes (i) each officer or employee in the service of a qualified local government, including persons appointed as trustees of sanitary districts regardless of hours devoted to the service of the sanitary district, (ii) each employee in the service of a qualified rehabilitation facility, (iii) each full-time employee in the service of a qualified domestic violence shelter or service, and (iv) each full-time employee in the service of a qualified child advocacy center, as determined according to rules promulgated by the Director.

(l) "Member" means an employee, annuitant, retired employee or survivor. In the case of an annuitant or retired employee who first becomes an annuitant or retired employee on or after the effective date of this amendatory Act of the 97th General Assembly, the individual must meet the minimum vesting requirements of the applicable retirement system in order to be eligible for group insurance benefits under that system. In the case of a survivor who first becomes a survivor on or after the effective date of this amendatory Act of the 97th General Assembly, the deceased employee, annuitant, or retired employee upon whom the annuity is based must have been eligible to participate in the group insurance system under the applicable retirement system in order for the survivor to be eligible for group insurance benefits under that system.

(m) "Optional coverages or benefits" means those coverages or benefits available to the member on his or her voluntary election, and at his or her own expense.

(n) "Program" means the group life insurance, health benefits and other employee benefits designed and contracted for by the Director under this Act.

(o) "Health plan" means a health benefits program offered by the State of Illinois for persons eligible for the plan.

(p) "Retired employee" means any person who would be an annuitant as that term is defined herein but for the fact that such person retired prior to January 1, 1966. Such term also includes any person formerly employed by the University of Illinois in the Cooperative Extension Service who would be an annuitant but for the fact that such person was made ineligible to participate in the State Universities Retirement System by clause (4) of subsection (a) of Section 15-107 of the Illinois Pension Code.

(q) "Survivor" means a person receiving an annuity as a survivor of an employee or of an annuitant. "Survivor" also includes: (1) the surviving dependent of a person who satisfies the definition of "employee" except that such person is made ineligible to participate in the State Universities Retirement System by clause (4) of subsection (a) of Section 15-107 of the Illinois Pension Code; (2) the surviving dependent of any person formerly employed by the University of Illinois in the Cooperative Extension Service who would be an annuitant except for the fact that such person was made ineligible to participate in the State Universities Retirement System by clause (4) of subsection (a) of Section 15-107 of the Illinois Pension Code; and (3) the surviving dependent of a person who was an annuitant under this Act by virtue of receiving an alternative retirement cancellation payment under Section 14-108.5 of the Illinois Pension Code.

(q-2) "SERS" means the State Employees' Retirement System of Illinois, created under Article 14 of the Illinois Pension Code.

(q-3) "SURS" means the State Universities Retirement System, created under Article 15 of the Illinois Pension Code.

(q-4) "TRS" means the Teachers' Retirement System of the State of Illinois, created under Article 16 of the Illinois Pension Code.

(q-5) (Blank).

(q-6) (Blank).

(q-7) (Blank).

(r) "Medical services" means the services provided within the scope of their licenses by practitioners in all categories licensed under the Medical Practice Act of 1987.

(s) "Unit of local government" means any county, municipality, township, school district (including a combination of school districts under the Intergovernmental Cooperation Act), special district or other unit, designated as a unit of local government by law, which exercises limited governmental powers or powers in respect to limited governmental subjects, any not-for-profit association with a membership that primarily includes townships and township officials, that has duties that include provision of research service, dissemination of information, and other acts for the purpose of improving township government, and that is funded wholly or partly in accordance with Section 85-15 of the Township Code; any not-for-profit corporation or association, with a membership consisting primarily of municipalities, that operates its own utility system, and provides research, training, dissemination of information, or other acts to promote cooperation between and among municipalities that provide utility services and for the advancement of the goals and purposes of its membership; the Southern Illinois Collegiate Common Market, which is a consortium of higher education institutions in Southern Illinois; the Illinois Association of Park Districts; and any hospital provider that is owned by a county that has 100 or fewer hospital beds and has not already joined the program. "Qualified local government" means a unit of local government approved by the Director and participating in a program created under subsection (i) of Section 10 of this Act.

(t) "Qualified rehabilitation facility" means any not-for-profit organization that is accredited by the Commission on Accreditation of Rehabilitation Facilities or certified by the Department of Human Services (as successor to the Department of Mental Health and Developmental Disabilities) to provide services to persons with disabilities and which receives funds from the State of Illinois for providing those services, approved by the Director and participating in a program created under subsection (j) of Section 10 of this Act.

(u) "Qualified domestic violence shelter or service" means any Illinois domestic violence shelter or service and its administrative offices funded by the Department of Human Services (as successor to the Illinois Department of Public Aid), approved by the Director and participating in a program created under subsection (k) of Section 10.

(v) "TRS benefit recipient" means a person who:

(1) is not a "member" as defined in this Section; and

(2) is receiving a monthly benefit or retirement annuity under Article 16 of the Illinois Pension Code; and

(3) either (i) has at least 8 years of creditable service under Article 16 of the Illinois Pension Code, or (ii) was enrolled in the health insurance program offered under that Article on January 1, 1996, or (iii) is the survivor of a benefit recipient who had at least 8 years of creditable service under Article 16 of the Illinois Pension Code or was enrolled in the health insurance program offered under that Article on the effective date of this amendatory Act of 1995, or (iv) is a recipient or survivor of a recipient of a disability benefit under Article 16 of the Illinois Pension Code.

(w) "TRS dependent beneficiary" means a person who:

(1) is not a "member" or "dependent" as defined in this Section; and

(2) is a TRS benefit recipient's: (A) spouse, (B) dependent parent who is receiving at least half of his or her support from the TRS benefit recipient, or (C) natural, step, adjudicated, or adopted child who is (i) under age 26, (ii) was, on January 1, 1996, participating as a dependent beneficiary in the health insurance program offered under Article 16 of the Illinois Pension Code, or (iii) age 19 or over who has a mental or physical disability from a cause originating prior to the age of 19 (age 26 if enrolled as an adult child).

"TRS dependent beneficiary" does not include, as indicated under paragraph (2) of this subsection (w), a dependent of the survivor of a TRS benefit recipient who first becomes a dependent of a survivor of a TRS benefit recipient on or after the effective date of this amendatory Act of the 97th General Assembly unless that dependent would have been eligible for coverage as a dependent of the deceased TRS benefit recipient upon whom the survivor benefit is based.

(x) "Military leave" refers to individuals in basic training for reserves, special/advanced training, annual training, emergency call up, activation by the President of the United States, or any other training or duty in service to the United States Armed Forces.

(y) (Blank).

(z) "Community college benefit recipient" means a person who:

(1) is not a "member" as defined in this Section; and

(2) is receiving a monthly survivor's annuity or retirement annuity under Article 15 of the Illinois Pension Code; and

(3) either (i) was a full-time employee of a community college district or an association of community college boards created under the Public Community College Act (other than an employee whose last employer under Article 15 of the Illinois Pension Code was a community college district subject to Article VII of the Public Community College Act) and was eligible to participate in a group health benefit plan as an employee during the time of employment with a community college district (other than a community college district subject to Article VII of the Public Community College Act) or an association of community college boards, or (ii) is the survivor of a person described in item (i).

(aa) "Community college dependent beneficiary" means a person who:

(1) is not a "member" or "dependent" as defined in this Section; and

(2) is a community college benefit recipient's: (A) spouse, (B) dependent parent who is receiving at least half of his or her support from the community college benefit recipient, or (C) natural, step, adjudicated, or adopted child who is (i) under age 26, or (ii) age 19 or over and has a mental or physical disability from a cause originating prior to the age of 19 (age 26 if enrolled as an adult child).

"Community college dependent beneficiary" does not include, as indicated under paragraph (2) of this subsection (aa), a dependent of the survivor of a community college benefit recipient who first becomes a dependent of a survivor of a community college benefit recipient on or after the effective date of this amendatory Act of the 97th General Assembly unless that dependent would have been eligible for coverage as a dependent of the deceased community college benefit recipient upon whom the survivor annuity is based.

(bb) "Qualified child advocacy center" means any Illinois child advocacy center and its administrative offices funded by the Department of Children and Family Services, as defined by the Children's Advocacy Center Act (55 ILCS 80/), approved by the Director and participating in a program created under subsection (n) of Section 10.

(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)

(5 ILCS 375/10) (from Ch. 127, par. 530)

Sec. 10. Contributions by the State and members.

(a) The State shall pay the cost of basic non-contributory group life insurance and, subject to member paid contributions set by the Department or required by this Section and except as provided in this Section, the basic program of group health benefits on each eligible member, except a member, not otherwise covered by this Act, who has retired as a participating member under Article 2 of the Illinois Pension Code but is ineligible for the retirement annuity under Section 2-119 of the Illinois Pension Code, and part of each eligible member's and retired member's premiums for health insurance coverage for enrolled dependents as provided by Section 9. The State shall pay the cost of the basic program of group health benefits only after benefits are reduced by the amount of benefits covered by Medicare for all members and dependents who are eligible for benefits under Social Security or the Railroad Retirement system or who had sufficient Medicare-covered government employment, except that such reduction in benefits shall apply only to those members and dependents who (1) first become eligible for such Medicare coverage on or after July 1, 1992; or (2) are Medicare-eligible members or dependents of a local government unit which began participation in the program on or after July 1, 1992; or (3) remain eligible for, but no longer receive Medicare coverage which they had been receiving on or after July 1, 1992. The Department may determine the aggregate level of the State's contribution on the basis of actual cost of medical services adjusted for age, sex or geographic or other demographic characteristics which affect the costs of such programs.

The cost of participation in the basic program of group health benefits for the dependent or survivor of a living or deceased retired employee who was formerly employed by the University of Illinois in the Cooperative Extension Service and would be an annuitant but for the fact that he or she was made ineligible to participate in the State Universities Retirement System by clause (4) of subsection (a) of Section 15-107 of the Illinois Pension Code shall not be greater than the cost of participation that would otherwise apply to that dependent or survivor if he or she were the dependent or survivor of an annuitant under the State Universities Retirement System.

(a-1) (Blank).

(a-2) (Blank).

(a-3) (Blank).

(a-4) (Blank).

(a-5) (Blank).

(a-6) (Blank).

(a-7) (Blank).

(a-8) Any annuitant, survivor, or retired employee may waive or terminate coverage in the program of group health benefits. Any such annuitant, survivor, or retired employee who has waived or terminated coverage may enroll or re-enroll in the program of group health benefits only during the annual benefit choice period, as determined by the Director; except that in the event of termination of coverage due to nonpayment of premiums, the annuitant, survivor, or retired employee may not re-enroll in the program.

(a-8.5) Beginning on the effective date of this amendatory Act of the 97th General Assembly, the Director of Central Management Services shall, on an annual basis, determine the amount that the State shall contribute toward the basic program of group health benefits on behalf of annuitants (including individuals who (i) participated in the General Assembly Retirement System, the State Employees' Retirement System of Illinois, the State Universities Retirement System, the Teachers' Retirement System of the State of Illinois, or the Judges Retirement System of Illinois and (ii) qualify as annuitants under subsection (b) of Section 3 of this Act), survivors (including individuals who (i) receive an annuity as a survivor of an individual who participated in the General Assembly Retirement System, the State Employees' Retirement System of Illinois, the State Universities Retirement System, the Teachers' Retirement System of the State of Illinois, or the Judges Retirement System of Illinois and (ii) qualify as survivors under subsection (q) of Section 3 of this Act), and retired employees (as defined in subsection (p) of Section 3 of this Act). The remainder of the cost of coverage for each annuitant, survivor, or retired employee, as determined by the Director of Central Management Services, shall be the responsibility of that annuitant, survivor, or retired employee.

Contributions required of annuitants, survivors, and retired employees shall be the same for all retirement systems and shall also be based on whether an individual has made an election under Section 15-135.1 of the Illinois Pension Code. Contributions may be based on annuitants', survivors', or retired employees' Medicare eligibility, but may not be based on Social Security eligibility.

(a-9) No later than May 1 of each calendar year, the Director of Central Management Services shall certify in writing to the Executive Secretary of the State Employees' Retirement System of Illinois the amounts of the Medicare supplement health care premiums and the amounts of the health care premiums for all other retirees who are not Medicare eligible.

A separate calculation of the premiums based upon the actual cost of each health care plan shall be so certified.

The Director of Central Management Services shall provide to the Executive Secretary of the State Employees' Retirement System of Illinois such information, statistics, and other data as he or she may require to review the premium amounts certified by the Director of Central Management Services.

The Department of Central Management Services, or any successor agency designated to procure healthcare contracts pursuant to this Act, is authorized to establish funds, separate accounts provided by any bank or banks as defined by the Illinois Banking Act, or separate accounts provided by any savings and loan association or associations as defined by the Illinois Savings and Loan Act of 1985 to be held by the Director, outside the State treasury, for the purpose of receiving the transfer of moneys from the Local Government Health Insurance Reserve Fund. The Department may promulgate rules further defining the methodology for the transfers. Any interest earned by moneys in the funds or accounts shall inure to the Local Government Health Insurance Reserve Fund. The transferred moneys, and interest accrued thereon, shall be used exclusively for transfers to administrative service organizations or their financial institutions for payments of claims to claimants and providers under the self-insurance health plan. The transferred moneys, and interest accrued thereon, shall not be used for any other purpose including, but not limited to, reimbursement of administration fees due the administrative service organization pursuant to its contract or contracts with the Department.

(a-10) Any credit terminated as part of a pension buyout option under Article 2, 14, 15, 16, or 18 shall be included in determining an employee's creditable service for the purposes of this Act.

(b) State employees who become eligible for this program on or after January 1, 1980 in positions normally requiring actual performance of duty not less than 1/2 of a normal work period but not equal to that of a normal work period, shall be given the option of participating in the available program. If the employee elects coverage, the State shall contribute on behalf of such employee to the cost of the employee's benefit and any applicable dependent supplement, that sum which bears the same percentage as that percentage of time the employee regularly works when compared to normal work period.

(c) The basic non-contributory coverage from the basic program of group health benefits shall be continued for each employee not in pay status or on active service by reason of (1) leave of absence due to illness or injury, (2) authorized educational leave of absence or sabbatical leave, or (3) military leave. This coverage shall continue until expiration of authorized leave and return to active service, but not to exceed 24 months for leaves under item (1) or (2). This 24-month limitation and the requirement of returning to active service shall not apply to persons receiving ordinary or accidental disability benefits or retirement benefits through the appropriate State retirement system or benefits under the Workers' Compensation or Occupational Disease Act.

(d) The basic group life insurance coverage shall continue, with full State contribution, where such person is (1) absent from active service by reason of disability arising from any cause other than self-inflicted, (2) on authorized educational leave of absence or sabbatical leave, or (3) on military leave.

(e) Where the person is in non-pay status for a period in excess of 30 days or on leave of absence, other than by reason of disability, educational or sabbatical leave, or military leave, such person may continue coverage only by making personal payment equal to the amount normally contributed by the State on such person's behalf. Such payments and coverage may be continued: (1) until such time as the person returns to a status eligible for coverage at State expense, but not to exceed 24 months or (2) until such person's employment or annuitant status with the State is terminated (exclusive of any additional service imposed pursuant to law).

(f) The Department shall establish by rule the extent to which other employee benefits will continue for persons in non-pay status or who are not in active service.

(g) The State shall not pay the cost of the basic non-contributory group life insurance, program of health benefits and other employee benefits for members who are survivors as defined by paragraphs (1) and (2) of subsection (q) of Section 3 of this Act. The costs of benefits for these survivors shall be paid by the survivors or by the University of Illinois Cooperative Extension Service, or any combination thereof. However, the State shall pay the amount of the reduction in the cost of participation, if any, resulting from the amendment to subsection (a) made by this amendatory Act of the 91st General Assembly.

(h) Those persons occupying positions with any department as a result of emergency appointments pursuant to Section 8b.8 of the Personnel Code who are not considered employees under this Act shall be given the option of participating in the programs of group life insurance, health benefits and other employee benefits. Such persons electing coverage may participate only by making payment equal to the amount normally contributed by the State for similarly situated employees. Such amounts shall be determined by the Director. Such payments and coverage may be continued until such time as the person becomes an employee pursuant to this Act or such person's appointment is terminated.

(i) Any unit of local government within the State of Illinois may apply to the Director to have its employees, annuitants, and their dependents provided group health coverage under this Act on a non-insured basis. To participate, a unit of local government must agree to enroll all of its employees, who may select coverage under either the State group health benefits plan or a health maintenance organization that has contracted with the State to be available as a health care provider for employees as defined in this Act. A unit of local government must remit the entire cost of providing coverage under the State group health benefits plan or, for coverage under a health maintenance organization, an amount determined by the Director based on an analysis of the sex, age, geographic location, or other relevant demographic variables for its employees, except that the unit of local government shall not be required to enroll those of its employees who are covered spouses or dependents under this plan or another group policy or plan providing health benefits as long as (1) an appropriate official from the unit of local government attests that each employee not enrolled is a covered spouse or dependent under this plan or another group policy or plan, and (2) at least 50% of the employees are enrolled and the unit of local government remits the entire cost of providing coverage to those employees, except that a participating school district must have enrolled at least 50% of its full-time employees who have not waived coverage under the district's group health plan by participating in a component of the district's cafeteria plan. A participating school district is not required to enroll a full-time employee who has waived coverage under the district's health plan, provided that an appropriate official from the participating school district attests that the full-time employee has waived coverage by participating in a component of the district's cafeteria plan. For the purposes of this subsection, "participating school district" includes a unit of local government whose primary purpose is education as defined by the Department's rules.

Employees of a participating unit of local government who are not enrolled due to coverage under another group health policy or plan may enroll in the event of a qualifying change in status, special enrollment, special circumstance as defined by the Director, or during the annual Benefit Choice Period. A participating unit of local government may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with the costs paid by the unit of local government, its employees, or some combination of the two as determined by the unit of local government. The unit of local government shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine monthly rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages, or contributed by the State for basic insurance coverages on behalf of its employees, adjusted for differences between State employees and employees of the local government in age, sex, geographic location or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the unit of local government and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the unit of local government.

In the case of coverage of local government employees under a health maintenance organization, the Director shall annually determine for each participating unit of local government the maximum monthly amount the unit may contribute toward that coverage, based on an analysis of (i) the age, sex, geographic location, and other relevant demographic variables of the unit's employees and (ii) the cost to cover those employees under the State group health benefits plan. The Director may similarly determine the maximum monthly amount each unit of local government may contribute toward coverage of its employees' dependents under a health maintenance organization.

Monthly payments by the unit of local government or its employees for group health benefits plan or health maintenance organization coverage shall be deposited in the Local Government Health Insurance Reserve Fund.

The Local Government Health Insurance Reserve Fund is hereby created as a nonappropriated trust fund to be held outside the State Treasury, with the State Treasurer as custodian. The Local Government Health Insurance Reserve Fund shall be a continuing fund not subject to fiscal year limitations. The Local Government Health Insurance Reserve Fund is not subject to administrative charges or charge-backs, including but not limited to those authorized under Section 8h of the State Finance Act. All revenues arising from the administration of the health benefits program established under this Section shall be deposited into the Local Government Health Insurance Reserve Fund. Any interest earned on moneys in the Local Government Health Insurance Reserve Fund shall be deposited into the Fund. All expenditures from this Fund shall be used for payments for health care benefits for local government and rehabilitation facility employees, annuitants, and dependents, and to reimburse the Department or its administrative service organization for all expenses incurred in the administration of benefits. No other State funds may be used for these purposes.

A local government employer's participation or desire to participate in a program created under this subsection shall not limit that employer's duty to bargain with the representative of any collective bargaining unit of its employees.

(j) Any rehabilitation facility within the State of Illinois may apply to the Director to have its employees, annuitants, and their eligible dependents provided group health coverage under this Act on a non-insured basis. To participate, a rehabilitation facility must agree to enroll all of its employees and remit the entire cost of providing such coverage for its employees, except that the rehabilitation facility shall not be required to enroll those of its employees who are covered spouses or dependents under this plan or another group policy or plan providing health benefits as long as (1) an appropriate official from the rehabilitation facility attests that each employee not enrolled is a covered spouse or dependent under this plan or another group policy or plan, and (2) at least 50% of the employees are enrolled and the rehabilitation facility remits the entire cost of providing coverage to those employees. Employees of a participating rehabilitation facility who are not enrolled due to coverage under another group health policy or plan may enroll in the event of a qualifying change in status, special enrollment, special circumstance as defined by the Director, or during the annual Benefit Choice Period. A participating rehabilitation facility may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with the costs paid by the rehabilitation facility, its employees, or some combination of the 2 as determined by the rehabilitation facility. The rehabilitation facility shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine quarterly rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages on behalf of its employees, adjusted for differences between State employees and employees of the rehabilitation facility in age, sex, geographic location or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the rehabilitation facility and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the rehabilitation facility.

Monthly payments by the rehabilitation facility or its employees for group health benefits shall be deposited in the Local Government Health Insurance Reserve Fund.

(k) Any domestic violence shelter or service within the State of Illinois may apply to the Director to have its employees, annuitants, and their dependents provided group health coverage under this Act on a non-insured basis. To participate, a domestic violence shelter or service must agree to enroll all of its employees and pay the entire cost of providing such coverage for its employees. The domestic violence shelter shall not be required to enroll those of its employees who are covered spouses or dependents under this plan or another group policy or plan providing health benefits as long as (1) an appropriate official from the domestic violence shelter attests that each employee not enrolled is a covered spouse or dependent under this plan or another group policy or plan and (2) at least 50% of the employees are enrolled and the domestic violence shelter remits the entire cost of providing coverage to those employees. Employees of a participating domestic violence shelter who are not enrolled due to coverage under another group health policy or plan may enroll in the event of a qualifying change in status, special enrollment, or special circumstance as defined by the Director or during the annual Benefit Choice Period. A participating domestic violence shelter may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with employees, or some combination of the 2 as determined by the domestic violence shelter or service. The domestic violence shelter or service shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages on behalf of its employees, adjusted for differences between State employees and employees of the domestic violence shelter or service in age, sex, geographic location or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the domestic violence shelter or service and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the domestic violence shelter or service.

Monthly payments by the domestic violence shelter or service or its employees for group health insurance shall be deposited in the Local Government Health Insurance Reserve Fund.

(l) A public community college or entity organized pursuant to the Public Community College Act may apply to the Director initially to have only annuitants not covered prior to July 1, 1992 by the district's health plan provided health coverage under this Act on a non-insured basis. The community college must execute a 2-year contract to participate in the Local Government Health Plan. Any annuitant may enroll in the event of a qualifying change in status, special enrollment, special circumstance as defined by the Director, or during the annual Benefit Choice Period.

The Director shall annually determine monthly rates of payment subject to the following constraints: for those community colleges with annuitants only enrolled, first year rates shall be equal to the average cost to cover claims for a State member adjusted for demographics, Medicare participation, and other factors; and in the second year, a further adjustment of rates shall be made to reflect the actual first year's claims experience of the covered annuitants.

(l-5) The provisions of subsection (l) become inoperative on July 1, 1999.

(m) The Director shall adopt any rules deemed necessary for implementation of this amendatory Act of 1989 (Public Act 86-978).

(n) Any child advocacy center within the State of Illinois may apply to the Director to have its employees, annuitants, and their dependents provided group health coverage under this Act on a non-insured basis. To participate, a child advocacy center must agree to enroll all of its employees and pay the entire cost of providing coverage for its employees. The child advocacy center shall not be required to enroll those of its employees who are covered spouses or dependents under this plan or another group policy or plan providing health benefits as long as (1) an appropriate official from the child advocacy center attests that each employee not enrolled is a covered spouse or dependent under this plan or another group policy or plan and (2) at least 50% of the employees are enrolled and the child advocacy center remits the entire cost of providing coverage to those employees. Employees of a participating child advocacy center who are not enrolled due to coverage under another group health policy or plan may enroll in the event of a qualifying change in status, special enrollment, or special circumstance as defined by the Director or during the annual Benefit Choice Period. A participating child advocacy center may also elect to cover its annuitants. Dependent coverage shall be offered on an optional basis, with the costs paid by the child advocacy center, its employees, or some combination of the 2 as determined by the child advocacy center. The child advocacy center shall be responsible for timely collection and transmission of dependent premiums.

The Director shall annually determine rates of payment, subject to the following constraints:

(1) In the first year of coverage, the rates shall be equal to the amount normally charged to State employees for elected optional coverages or for enrolled dependents coverages or other contributory coverages on behalf of its employees, adjusted for differences between State employees and employees of the child advocacy center in age, sex, geographic location, or other relevant demographic variables, plus an amount sufficient to pay for the additional administrative costs of providing coverage to employees of the child advocacy center and their dependents.

(2) In subsequent years, a further adjustment shall be made to reflect the actual prior years' claims experience of the employees of the child advocacy center.

Monthly payments by the child advocacy center or its employees for group health insurance shall be deposited into the Local Government Health Insurance Reserve Fund.

(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)

Section 905. The Department of Central Management Services Law of the Civil Administrative Code of Illinois is amended by adding Section 405-298 as follows:

(20 ILCS 405/405-298 new)

Sec. 405-298. Pension buyout option. To enter into contracts with approved vendors under the Pension Buyout Act and to adopt those rules needed to implement the provisions of the Pension Buyout Act.

Section 910. The Illinois Finance Authority Act is amended by changing Section 801-40 as follows:

(20 ILCS 3501/801-40)

Sec. 801-40. In addition to the powers otherwise authorized by law and in addition to the foregoing general corporate powers, the Authority shall also have the following additional specific powers to be exercised in furtherance of the purposes of this Act.

(a) The Authority shall have power (i) to accept grants, loans or appropriations from the federal government or the State, or any agency or instrumentality thereof, to be used for the operating expenses of the Authority, or for any purposes of the Authority, including the making of direct loans of such funds with respect to projects, and (ii) to enter into any agreement with the federal government or the State, or any agency or instrumentality thereof, in relationship to such grants, loans or appropriations.

(b) The Authority shall have power to procure and enter into contracts for any type of insurance and indemnity agreements covering loss or damage to property from any cause, including loss of use and occupancy, or covering any other insurable risk.

(c) The Authority shall have the continuing power to issue bonds for its corporate purposes. Bonds may be issued by the Authority in one or more series and may provide for the payment of any interest deemed necessary on such bonds, of the costs of issuance of such bonds, of any premium on any insurance, or of the cost of any guarantees, letters of credit or other similar documents, may provide for the funding of the reserves deemed necessary in connection with such bonds, and may provide for the refunding or advance refunding of any bonds or for accounts deemed necessary in connection with any purpose of the Authority. The bonds may bear interest payable at any time or times and at any rate or rates, notwithstanding any other provision of law to the contrary, and such rate or rates may be established by an index or formula which may be implemented or established by persons appointed or retained therefor by the Authority, or may bear no interest or may bear interest payable at maturity or upon redemption prior to maturity, may bear such date or dates, may be payable at such time or times and at such place or places, may mature at any time or times not later than 40 years from the date of issuance, may be sold at public or private sale at such time or times and at such price or prices, may be secured by such pledges, reserves, guarantees, letters of credit, insurance contracts or other similar credit support or liquidity instruments, may be executed in such manner, may be subject to redemption prior to maturity, may provide for the registration of the bonds, and may be subject to such other terms and conditions all as may be provided by the resolution or indenture authorizing the issuance of such bonds. The holder or holders of any bonds issued by the Authority may bring suits at law or proceedings in equity to compel the performance and observance by any person or by the Authority or any of its agents or employees of any contract or covenant made with the holders of such bonds and to compel such person or the Authority and any of its agents or employees to perform any duties required to be performed for the benefit of the holders of any such bonds by the provision of the resolution authorizing their issuance, and to enjoin such person or the Authority and any of its agents or employees from taking any action in conflict with any such contract or covenant. Notwithstanding the form and tenor of any such bonds and in the absence of any express recital on the face thereof that it is non-negotiable, all such bonds shall be negotiable instruments. Pending the preparation and execution of any such bonds, temporary bonds may be issued as provided by the resolution. The bonds shall be sold by the Authority in such manner as it shall determine. The bonds may be secured as provided in the authorizing resolution by the receipts, revenues, income and other available funds of the Authority and by any amounts derived by the Authority from the loan agreement or lease agreement with respect to the project or projects; and bonds may be issued as general obligations of the Authority payable from such revenues, funds and obligations of the Authority as the bond resolution shall provide, or may be issued as limited obligations with a claim for payment solely from such revenues, funds and obligations as the bond resolution shall provide. The Authority may grant a specific pledge or assignment of and lien on or security interest in such rights, revenues, income, or amounts and may grant a specific pledge or assignment of and lien on or security interest in any reserves, funds or accounts established in the resolution authorizing the issuance of bonds. Any such pledge, assignment, lien or security interest for the benefit of the holders of the Authority's bonds shall be valid and binding from the time the bonds are issued without any physical delivery or further act, and shall be valid and binding as against and prior to the claims of all other parties having claims against the Authority or any other person irrespective of whether the other parties have notice of the pledge, assignment, lien or security interest. As evidence of such pledge, assignment, lien and security interest, the Authority may execute and deliver a mortgage, trust agreement, indenture or security agreement or an assignment thereof. A remedy for any breach or default of the terms of any such agreement by the Authority may be by mandamus proceedings in any court of competent jurisdiction to compel the performance and compliance therewith, but the agreement may prescribe by whom or on whose behalf such action may be instituted. It is expressly understood that the Authority may, but need not, acquire title to any project with respect to which it exercises its authority.

(c-5) The Authority shall have the power to issue bonds under subsection (c) of Section 10 of the Pension Buyout Act and to adopt those rules needed to implement the provisions of the Pension Buyout Act.

(d) With respect to the powers granted by this Act, the Authority may adopt rules and regulations prescribing the procedures by which persons may apply for assistance under this Act. Nothing herein shall be deemed to preclude the Authority, prior to the filing of any formal application, from conducting preliminary discussions and investigations with respect to the subject matter of any prospective application.

(e) The Authority shall have power to acquire by purchase, lease, gift or otherwise any property or rights therein from any person useful for its purposes, whether improved for the purposes of any prospective project, or unimproved. The Authority may also accept any donation of funds for its purposes from any such source. The Authority shall have no independent power of condemnation but may acquire any property or rights therein obtained upon condemnation by any other authority, governmental entity or unit of local government with such power.

(f) The Authority shall have power to develop, construct and improve either under its own direction, or through collaboration with any approved applicant, or to acquire through purchase or otherwise, any project, using for such purpose the proceeds derived from the sale of its bonds or from governmental loans or grants, and to hold title in the name of the Authority to such projects.

(g) The Authority shall have power to lease pursuant to a lease agreement any project so developed and constructed or acquired to the approved tenant on such terms and conditions as may be appropriate to further the purposes of this Act and to maintain the credit of the Authority. Any such lease may provide for either the Authority or the approved tenant to assume initially, in whole or in part, the costs of maintenance, repair and improvements during the leasehold period. In no case, however, shall the total rentals from any project during any initial leasehold period or the total loan repayments to be made pursuant to any loan agreement, be less than an amount necessary to return over such lease or loan period (1) all costs incurred in connection with the development, construction, acquisition or improvement of the project and for repair, maintenance and improvements thereto during the period of the lease or loan; provided, however, that the rentals or loan repayments need not include costs met through the use of funds other than those obtained by the Authority through the issuance of its bonds or governmental loans; (2) a reasonable percentage additive to be agreed upon by the Authority and the borrower or tenant to cover a properly allocable portion of the Authority's general expenses, including, but not limited to, administrative expenses, salaries and general insurance, and (3) an amount sufficient to pay when due all principal of, interest and premium, if any on, any bonds issued by the Authority with respect to the project. The portion of total rentals payable under clause (3) of this subsection (g) shall be deposited in such special accounts, including all sinking funds, acquisition or construction funds, debt service and other funds as provided by any resolution, mortgage or trust agreement of the Authority pursuant to which any bond is issued.

(h) The Authority has the power, upon the termination of any leasehold period of any project, to sell or lease for a further term or terms such project on such terms and conditions as the Authority shall deem reasonable and consistent with the purposes of the Act. The net proceeds from all such sales and the revenues or income from such leases shall be used to satisfy any indebtedness of the Authority with respect to such project and any balance may be used to pay any expenses of the Authority or be used for the further development, construction, acquisition or improvement of projects. In the event any project is vacated by a tenant prior to the termination of the initial leasehold period, the Authority shall sell or lease the facilities of the project on the most advantageous terms available. The net proceeds of any such disposition shall be treated in the same manner as the proceeds from sales or the revenues or income from leases subsequent to the termination of any initial leasehold period.

(i) The Authority shall have the power to make loans to persons to finance a project, to enter into loan agreements with respect thereto, and to accept guarantees from persons of its loans or the resultant evidences of obligations of the Authority.

(j) The Authority may fix, determine, charge and collect any premiums, fees, charges, costs and expenses, including, without limitation, any application fees, commitment fees, program fees, financing charges or publication fees from any person in connection with its activities under this Act.

(k) In addition to the funds established as provided herein, the Authority shall have the power to create and establish such reserve funds and accounts as may be necessary or desirable to accomplish its purposes under this Act and to deposit its available monies into the funds and accounts.

(l) At the request of the governing body of any unit of local government, the Authority is authorized to market such local government's revenue bond offerings by preparing bond issues for sale, advertising for sealed bids, receiving bids at its offices, making the award to the bidder that offers the most favorable terms or arranging for negotiated placements or underwritings of such securities. The Authority may, at its discretion, offer for concurrent sale the revenue bonds of several local governments. Sales by the Authority of revenue bonds under this Section shall in no way imply State guarantee of such debt issue. The Authority may require such financial information from participating local governments as it deems necessary in order to carry out the purposes of this subsection (1).

(m) The Authority may make grants to any county to which Division 5-37 of the Counties Code is applicable to assist in the financing of capital development, construction and renovation of new or existing facilities for hospitals and health care facilities under that Act. Such grants may only be made from funds appropriated for such purposes from the Build Illinois Bond Fund.

(n) The Authority may establish an urban development action grant program for the purpose of assisting municipalities in Illinois which are experiencing severe economic distress to help stimulate economic development activities needed to aid in economic recovery. The Authority shall determine the types of activities and projects for which the urban development action grants may be used, provided that such projects and activities are broadly defined to include all reasonable projects and activities the primary objectives of which are the development of viable urban communities, including decent housing and a suitable living environment, and expansion of economic opportunity, principally for persons of low and moderate incomes. The Authority shall enter into grant agreements from monies appropriated for such purposes from the Build Illinois Bond Fund. The Authority shall monitor the use of the grants, and shall provide for audits of the funds as well as recovery by the Authority of any funds determined to have been spent in violation of this subsection (n) or any rule or regulation promulgated hereunder. The Authority shall provide technical assistance with regard to the effective use of the urban development action grants. The Authority shall file an annual report to the General Assembly concerning the progress of the grant program.

(o) The Authority may establish a Housing Partnership Program whereby the Authority provides zero-interest loans to municipalities for the purpose of assisting in the financing of projects for the rehabilitation of affordable multi-family housing for low and moderate income residents. The Authority may provide such loans only upon a municipality's providing evidence that it has obtained private funding for the rehabilitation project. The Authority shall provide 3 State dollars for every 7 dollars obtained by the municipality from sources other than the State of Illinois. The loans shall be made from monies appropriated for such purpose from the Build Illinois Bond Fund. The total amount of loans available under the Housing Partnership Program shall not exceed $30,000,000. State loan monies under this subsection shall be used only for the acquisition and rehabilitation of existing buildings containing 4 or more dwelling units. The terms of any loan made by the municipality under this subsection shall require repayment of the loan to the municipality upon any sale or other transfer of the project.

(p) The Authority may award grants to universities and research institutions, research consortiums and other not-for-profit entities for the purposes of: remodeling or otherwise physically altering existing laboratory or research facilities, expansion or physical additions to existing laboratory or research facilities, construction of new laboratory or research facilities or acquisition of modern equipment to support laboratory or research operations provided that such grants (i) be used solely in support of project and equipment acquisitions which enhance technology transfer, and (ii) not constitute more than 60 percent of the total project or acquisition cost.

(q) Grants may be awarded by the Authority to units of local government for the purpose of developing the appropriate infrastructure or defraying other costs to the local government in support of laboratory or research facilities provided that such grants may not exceed 40% of the cost to the unit of local government.

(r) The Authority may establish a Direct Loan Program to make loans to individuals, partnerships or corporations for the purpose of an industrial project, as defined in Section 801-10 of this Act. For the purposes of such program and not by way of limitation on any other program of the Authority, the Authority shall have the power to issue bonds, notes, or other evidences of indebtedness including commercial paper for purposes of providing a fund of capital from which it may make such loans. The Authority shall have the power to use any appropriations from the State made especially for the Authority's Direct Loan Program for additional capital to make such loans or for the purposes of reserve funds or pledged funds which secure the Authority's obligations of repayment of any bond, note or other form of indebtedness established for the purpose of providing capital for which it intends to make such loans under the Direct Loan Program. For the purpose of obtaining such capital, the Authority may also enter into agreements with financial institutions and other persons for the purpose of selling loans and developing a secondary market for such loans. Loans made under the Direct Loan Program may be in an amount not to exceed $300,000 and shall be made for a portion of an industrial project which does not exceed 50% of the total project. No loan may be made by the Authority unless approved by the affirmative vote of at least 8 members of the board. The Authority shall establish procedures and publish rules which shall provide for the submission, review, and analysis of each direct loan application and which shall preserve the ability of each board member to reach an individual business judgment regarding the propriety of making each direct loan. The collective discretion of the board to approve or disapprove each loan shall be unencumbered. The Authority may establish and collect such fees and charges, determine and enforce such terms and conditions, and charge such interest rates as it determines to be necessary and appropriate to the successful administration of the Direct Loan Program. The Authority may require such interests in collateral and such guarantees as it determines are necessary to project the Authority's interest in the repayment of the principal and interest of each loan made under the Direct Loan Program.

(s) The Authority may guarantee private loans to third parties up to a specified dollar amount in order to promote economic development in this State.

(t) The Authority may adopt rules and regulations as may be necessary or advisable to implement the powers conferred by this Act.

(u) The Authority shall have the power to issue bonds, notes or other evidences of indebtedness, which may be used to make loans to units of local government which are authorized to enter into loan agreements and other documents and to issue bonds, notes and other evidences of indebtedness for the purpose of financing the protection of storm sewer outfalls, the construction of adequate storm sewer outfalls, and the provision for flood protection of sanitary sewage treatment plans, in counties that have established a stormwater management planning committee in accordance with Section 5-1062 of the Counties Code. Any such loan shall be made by the Authority pursuant to the provisions of Section 820-5 to 820-60 of this Act. The unit of local government shall pay back to the Authority the principal amount of the loan, plus annual interest as determined by the Authority. The Authority shall have the power, subject to appropriations by the General Assembly, to subsidize or buy down a portion of the interest on such loans, up to 4% per annum.

(v) The Authority may accept security interests as provided in Sections 11-3 and 11-3.3 of the Illinois Public Aid Code.

(w) Moral Obligation. In the event that the Authority determines that monies of the Authority will not be sufficient for the payment of the principal of and interest on its bonds during the next State fiscal year, the Chairperson, as soon as practicable, shall certify to the Governor the amount required by the Authority to enable it to pay such principal of and interest on the bonds. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. This subsection shall apply only to any bonds or notes as to which the Authority shall have determined, in the resolution authorizing the issuance of the bonds or notes, that this subsection shall apply. Whenever the Authority makes such a determination, that fact shall be plainly stated on the face of the bonds or notes and that fact shall also be reported to the Governor. In the event of a withdrawal of moneys from a reserve fund established with respect to any issue or issues of bonds of the Authority to pay principal or interest on those bonds, the Chairperson of the Authority, as soon as practicable, shall certify to the Governor the amount required to restore the reserve fund to the level required in the resolution or indenture securing those bonds. The Governor shall submit the amount so certified to the General Assembly as soon as practicable, but no later than the end of the current State fiscal year. The Authority shall obtain written approval from the Governor for any bonds and notes to be issued under this Section. In addition to any other bonds authorized to be issued under Sections 825-60, 825-65(e), 830-25 and 845-5, the principal amount of Authority bonds outstanding issued under this Section 801-40(w) or under 20 ILCS 3850/1-80 or 30 ILCS 360/2-6(c), which have been assumed by the Authority, shall not exceed $150,000,000. This subsection (w) shall in no way be applied to any bonds issued by the Authority on behalf of the Illinois Power Agency under Section 825-90 of this Act.

(x) The Authority may enter into agreements or contracts with any person necessary or appropriate to place the payment obligations of the Authority under any of its bonds in whole or in part on any interest rate basis, cash flow basis, or other basis desired by the Authority, including without limitation agreements or contracts commonly known as "interest rate swap agreements", "forward payment conversion agreements", and "futures", or agreements or contracts to exchange cash flows or a series of payments, or agreements or contracts, including without limitation agreements or contracts commonly known as "options", "puts", or "calls", to hedge payment, rate spread, or similar exposure; provided that any such agreement or contract shall not constitute an obligation for borrowed money and shall not be taken into account under Section 845-5 of this Act or any other debt limit of the Authority or the State of Illinois.

(y) The Authority shall publish summaries of projects and actions approved by the members of the Authority on its website. These summaries shall include, but not be limited to, information regarding the:

(1) project;

(2) Board's action or actions;

(3) purpose of the project;

(4) Authority's program and contribution;

(5) volume cap;

(6) jobs retained;

(7) projected new jobs;

(8) construction jobs created;

(9) estimated sources and uses of funds;

(10) financing summary;

(11) project summary;

(12) business summary;

(13) ownership or economic disclosure statement;

(14) professional and financial information;

(15) service area; and

(16) legislative district.

The disclosure of information pursuant to this subsection shall comply with the Freedom of Information Act.

(Source: P.A. 95-470, eff. 8-27-07; 95-481, eff. 8-28-07; 95-876, eff. 8-21-08; 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective date of changes made by P.A. 96-795).)

Section 915. The Illinois Procurement Code is amended by adding Section 45-32 as follows:

(30 ILCS 500/45-32 new)

Sec. 45-32. Pension buyout option. The chief procurement officer appointed pursuant to paragraph (4) of subsection (a) of Section 10-20 shall determine for the Department of Central Management Services which vendors are approved to provide lump sum payments pursuant to a pension buyout option under Article 2, 14, 15, 16, or 18 of the Illinois Pension Code and the Pension Buyout Act. The chief procurement officer appointed pursuant to paragraph (4) of subsection (a) of Section 10-20 shall develop and distribute to the Department of Central Management Services a listing of all procedures for implementing this Section.

Section 920. The Illinois Pension Code is amended by changing Sections 2-154, 14-147, 15-185, 16-190, and 18-161 and by adding Sections 2-154.5, 14-147.5, 15-185.5, 16-190.5, and 18-161.5 as follows:

(40 ILCS 5/2-154) (from Ch. 108 1/2, par. 2-154)

Sec. 2-154. Assignment. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of participants in this system, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. However, a person may relinquish his or her creditable service under this Article and all rights arising from his or her service under this Article in accordance with Section 2-154.5. However, a person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the "State Salary and Annuity Withholding Act", approved August 21, 1961, as now or hereafter amended.

The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.

(Source: P.A. 86-273.)

(40 ILCS 5/2-154.5 new)

Sec. 2-154.5. Pension buyout option.

(a) As used in this Section:

"Approved vendor" means a vendor that has entered into a contract with the Department of Central Management Services to provide lump sum payments under this Section.

"Eligible retiree" means a person who (i) has made the election to receive a retirement annuity; (ii) is eligible to receive a retirement annuity; (iii) has terminated service; (iv) is not subject to a QILDRO under this Article; and (v) has received at least the minimum amount of certified financial planning services, in accordance with rules adopted by the Department of Central Management Services, provided by the approved vendor.

"Pension buyout option" means a plan that authorizes an eligible retiree to relinquish all rights and benefits under this Article and this Code (to the extent that the provisions of this Code relate to benefits under this Article), including, but not limited to, a survivor's annuity, a retirement annuity, and a refund of contributions, and shall be deemed to have no service credit established under this Article in exchange for a lump sum payment equal to the present value of the retirement annuity as calculated by the System using the actuarial tables and other assumptions adopted by the Board.

"Standardized form contract" means the contract approved by the System in accordance with subsection (c).

(b) In the event that the Department of Central Management Services enters into a contract with an approved vendor and implements a pension buyout option:

(1) An eligible retiree may make the election authorized under this Section at any time after he or she has elected to retire and has terminated service. However, a retiree who has elected to proceed under the Retirement Systems Reciprocal Act is not eligible to elect the pension buyout option under this Section.

(2) An eligible retiree who wishes to participate in the pension buyout option may request that the System determine the dollar amount that the eligible retiree would receive under the pension buyout option.

(3) After the System determines the dollar amount that the eligible retiree would receive under the pension buyout option, an eligible retiree who wishes to participate in the pension buyout option shall do so by (i) notifying the approved vendor and the System and (ii) executing the standardized form contract with the approved vendor. As soon as practical after the execution of the standardized form contract, the approved vendor shall notify the System that the eligible retiree executed the standardized form contract. The System shall adopt rules concerning the notice requirements.

(4) On the first day of the month following the execution of the standardized form contract between the approved vendor and the eligible retiree, the eligible retiree shall have no rights or benefits under this Article and this Code (to the extent that the provisions of this Code relate to the eligible retiree's rights under this Article) and shall be deemed to have no service credit established under this Article. However, an eligible retiree who receives a pension buyout payment under this Section shall be deemed to be an annuitant for the purposes of the State Employees Group Insurance Act of 1971 and shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to.

(c) The System shall approve a standardized form contract. The System may by rule specify provisions that must be included in the standardized form contract.

(d) Any reduction in the System's liability arising from the pension buyout option shall not be included in the calculation or certification of required State contributions sooner than the next certification following the exercise of the pension buyout option. The calculation of required State contributions under this Article shall not include any reduction in the System's liability due to anticipated pension buyout under this Section that has not yet been made.

(e) In accordance with rules adopted by the Department of Central Management Services, the Board shall certify to the Department of Central Management Services the amount of lump sum payments made under this Section by an approved vendor.

(f) The Board shall adopt rules necessary to implement this Section.

(g) No provision of this Section shall be interpreted in a way that would cause the applicable System to cease to be a qualified plan under the Internal Revenue Code of 1986.

(40 ILCS 5/14-147) (from Ch. 108 1/2, par. 14-147)

Sec. 14-147. Annuities, etc. - Exempt. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of employees in this System, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. However, a person may relinquish his or her creditable service under this Article and all rights arising from his or her service under this Article in accordance with Section 14-147.5. A person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the "State Salary and Annuity Withholding Act", approved August 21, 1961, as now or hereafter amended.

The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.

(Source: P.A. 86-273.)

(40 ILCS 5/14-147.5 new)

Sec. 14-147.5. Pension buyout option.

(a) As used in this Section:

"Approved vendor" means a vendor that has entered into a contract with the Department of Central Management Services to provide lump sum payments under this Section.

"Eligible retiree" means a person who (i) has made the election to receive a retirement annuity; (ii) is eligible to receive a retirement annuity; (iii) has terminated service; (iv) is not subject to a QILDRO under this Article; and (v) has received at least the minimum amount of certified financial planning services, in accordance with rules adopted by the Department of Central Management Services, provided by the approved vendor.

"Pension buyout option" means a plan that authorizes an eligible retiree to relinquish all rights and benefits under this Article and this Code (to the extent that the provisions of this Code relate to benefits under this Article), including, but not limited to, a survivor's annuity, a retirement annuity, and a refund of contributions, and shall be deemed to have no service credit established under this Article in exchange for a lump sum payment equal to the present value of the retirement annuity as calculated by the System using the actuarial tables and other assumptions adopted by the Board.

"Standardized form contract" means the contract approved by the System in accordance with subsection (c).

(b) In the event that the Department of Central Management Services enters into a contract with an approved vendor and implements a pension buyout option:

(1) An eligible retiree may make the election authorized under this Section at any time after he or she has elected to retire and has terminated service. However, a retiree who has elected to proceed under the Retirement Systems Reciprocal Act is not eligible to elect the pension buyout option under this Section.

(2) An eligible retiree who wishes to participate in the pension buyout option may request that the System determine the dollar amount that the eligible retiree would receive under the pension buyout option.

(3) After the System determines the dollar amount that the eligible retiree would receive under the pension buyout option, an eligible retiree who wishes to participate in the pension buyout option shall do so by (i) notifying the approved vendor and the System and (ii) executing the standardized form contract with the approved vendor. As soon as practical after the execution of the standardized form contract, the approved vendor shall notify the System that the eligible retiree executed the standardized form contract. The System shall adopt rules concerning the notice requirements.

(4) On the first day of the month following the execution of the standardized form contract between the approved vendor and the eligible retiree, the eligible retiree shall have no rights or benefits under this Article and this Code (to the extent that the provisions of this Code relate to the eligible retiree's rights under this Article) and shall be deemed to have no service credit established under this Article. However, an eligible retiree who receives a pension buyout payment under this Section shall be deemed to be an annuitant for the purposes of the State Employees Group Insurance Act of 1971 and shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to.

(c) The System shall approve a standardized form contract. The System may by rule specify provisions that must be included in the standardized form contract.

(d) Any reduction in the System's liability arising from the pension buyout option shall not be included in the calculation or certification of required State contributions sooner than the next certification following the exercise of the pension buyout option. The calculation of required State contributions under this Article shall not include any reduction in the System's liability due to any anticipated pension buyout under this Section that has not yet been made.

(e) In accordance with rules adopted by the Department of Central Management Services, the Board shall certify to the Department of Central Management Services the amount of lump sum payments made under this Section by an approved vendor.

(f) The Board shall adopt rules necessary to implement this Section.

(g) No provision of this Section shall be interpreted in a way that would cause the System to cease to be a qualified plan under the Internal Revenue Code of 1986.

(40 ILCS 5/15-185) (from Ch. 108 1/2, par. 15-185)

Sec. 15-185. Annuities, etc., exempt. The accumulated employee and employer contributions shall be held in trust for each participant and annuitant, and this trust shall be treated as a spendthrift trust. Except as provided in this Article, all cash, securities and other property of this system, all annuities and other benefits payable under this Article and all accumulated credits of participants and annuitants in this system and the right of any person to receive an annuity or other benefit under this Article, or a refund of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. However, a person may relinquish his or her creditable service under this Article and all rights arising from his or her service under this Article in accordance with Section 15-185.5. The board, however, may deduct from the benefits, refunds and credits payable to the participant, annuitant or beneficiary, amounts owed by the participant or annuitant to the system. No attempted sale, transfer or assignment of any benefit, refund or credit shall prevent the right of the board to make the deduction and offset authorized in this Section. Any participant or annuitant may authorize the board to deduct from disability benefits or annuities, premiums due under any group hospital-surgical insurance program which is sponsored or approved by any employer; however, the deductions from disability benefits may not begin prior to 6 months after the disability occurs.

A person receiving an annuity or benefit under this Article may also authorize withholding from that annuity or benefit for the purposes enumerated in and in accordance with the provisions of the State Salary and Annuity Withholding Act.

This Section is not intended to, and does not, affect the calculation of any benefit under this Article or dictate how or to what extent employee or employer contributions are to be taken into account in calculating benefits. This amendatory Act of the 91st General Assembly is a clarification of existing law and applies to every participant and annuitant without regard to whether status as an employee terminates before the effective date of this amendatory Act.

Public Act 86-273 is a clarification of existing law and shall be applicable to every participant and annuitant without regard to whether status as an employee terminates before the effective date of that Act.

(Source: P.A. 90-65, eff. 7-7-97; 90-448, eff. 8-16-97; 90-511, eff. 8-22-97; 90-655, eff. 7-30-98; 91-887, eff. 7-6-00.)

(40 ILCS 5/15-185.5 new)

Sec. 15-185.5. Pension buyout option.

(a) As used in this Section:

"Approved vendor" means a vendor that has entered into a contract with the Department of Central Management Services to provide lump sum payments under this Section.

"Eligible retiree" means a person who (i) has made the election to receive a retirement annuity; (ii) is eligible to receive a retirement annuity; (iii) has terminated service; (iv) is not subject to a QILDRO under this Article; (v) is not a participant in the self-managed plan; and (vi) has received at least the minimum amount of certified financial planning services, in accordance with rules adopted by the Department of Central Management Services, provided by the approved vendor.

"Pension buyout option" means a plan that authorizes an eligible retiree to relinquish all rights and benefits under this Article and this Code (to the extent that the provisions of this Code relate to benefits under this Article), including, but not limited to, a survivor's annuity, a retirement annuity, and a refund of contributions, and shall be deemed to have no service credit established under this Article in exchange for a lump sum payment equal to the present value of the retirement annuity as calculated by the System using the actuarial tables and other assumptions adopted by the Board.

"Standardized form contract" means the contract approved by the System in accordance with subsection (c).

(b) In the event that the Department of Central Management Services enters into a contract with an approved vendor and implements a pension buyout option:

(1) An eligible retiree may make the election authorized under this Section at any time after he or she has elected to retire and has terminated service. However, a retiree who has elected to proceed under the Retirement Systems Reciprocal Act is not eligible to elect the pension buyout option under this Section.

(2) An eligible retiree who wishes to participate in the pension buyout option may request that the System determine the dollar amount that the eligible retiree would receive under the pension buyout option.

(3) After the System determines the dollar amount that the eligible retiree would receive under the pension buyout option, an eligible retiree who wishes to participate in the pension buyout option shall do so by (i) notifying the approved vendor and the System and (ii) executing the standardized form contract with the approved vendor. As soon as practical after the execution of the standardized form contract, the approved vendor shall notify the System that the eligible retiree executed the standardized form contract. The System shall adopt rules concerning the notice requirements.

(4) On the first day of the month following the execution of the standardized form contract between the approved vendor and the eligible retiree, the eligible retiree shall have no rights or benefits under this Article and this Code (to the extent that the provisions of this Code relate to the eligible retiree's rights under this Article) and shall be deemed to have no service credit established under this Article. However, an eligible retiree who receives a pension buyout payment under this Section shall be deemed to be an annuitant for the purposes of the State Employees Group Insurance Act of 1971 and shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to.

(c) The System shall approve a standardized form contract. The System may by rule specify provisions that must be included in the standardized form contract.

(d) Any reduction in the System's liability arising from the pension buyout option shall not be included in the calculation or certification of required State contributions sooner than the next certification following the exercise of the pension buyout option. The calculation of required State contributions under this Article shall not include any reduction in the System's liability due to any anticipated pension buyout under this Section that have not yet been made.

(e) In accordance with rules adopted by the Department of Central Management Services, the Board shall certify to the Department of Central Management Services the amount of lump sum payments made under this Section by an approved vendor.

(f) The Board shall adopt rules necessary to implement this Section.

(g) No provision of this Section shall be interpreted in a way that would cause the applicable System to cease to be a qualified plan under the Internal Revenue Code of 1986.

(40 ILCS 5/16-190) (from Ch. 108 1/2, par. 16-190)

Sec. 16-190. Annuities, etc., - exempt. The right of a person to a retirement annuity or other benefit, to the return of contributions, the retirement annuity or other benefit itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this Article, and the moneys in the fund created by this Article, shall be subject neither to attachment, garnishment, execution, or other seizure by process, nor to sale, pledge, mortgage or other alienation, and shall not be assignable except as in this Article provided. However, a person may relinquish his or her creditable service under this Article and all rights arising from his or her service under this Article in accordance with Section 16-190.5. A person receiving an annuity or benefit may authorize withholding from such annuity or benefit for the purposes enumerated in the "State Salary and Annuity Withholding Act", approved August 21, 1961, as now or hereafter amended. The moneys in the fund are exempt from any state or municipal tax.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-190.5 new)

Sec. 16-190.5. Pension buyout option.

(a) As used in this Section:

"Approved vendor" means a vendor that has entered into a contract with the Department of Central Management Services to provide lump sum payments under this Section.

"Eligible retiree" means a person who (i) has made the election to receive a retirement annuity; (ii) is eligible to receive a retirement annuity; (iii) has terminated service; (iv) is not subject to a QILDRO under this Article; and (v) has received at least the minimum amount of certified financial planning services, in accordance with rules adopted by the Department of Central Management Services, provided by the approved vendor.

"Pension buyout option" means a plan that authorizes an eligible retiree to relinquish all rights and benefits under this Article and this Code (to the extent that the provisions of this Code relate to benefits under this Article), including, but not limited to, a survivor's annuity, a retirement annuity, and a refund of contributions, and shall be deemed to have no service credit established under this Article in exchange for a lump sum payment equal to the present value of the retirement annuity as calculated by the System using the actuarial tables and other assumptions adopted by the Board.

"Standardized form contract" means the contract approved by the System in accordance with subsection (c).

(b) In the event that the Department of Central Management Services enters into a contract with an approved vendor and implements a pension buyout option:

(1) An eligible retiree may make the election authorized under this Section at any time after he or she has elected to retire and has terminated service. However, a retiree who has elected to proceed under the Retirement Systems Reciprocal Act is not eligible to elect the pension buyout option under this Section.

(2) An eligible retiree who wishes to participate in the pension buyout option may request that the System determine the dollar amount that the eligible retiree would receive under the pension buyout option.

(3) After the System determines the dollar amount that the eligible retiree would receive under the pension buyout option, an eligible retiree who wishes to participate in the pension buyout option shall do so by (i) notifying the approved vendor and the System and (ii) executing the standardized form contract with the approved vendor. As soon as practical after the execution of the standardized form contract, the approved vendor shall notify the System that the eligible retiree executed the standardized form contract. The System shall adopt rules concerning the notice requirements.

(4) On the first day of the month following the execution of the standardized form contract between the approved vendor and the eligible retiree, the eligible retiree shall have no rights or benefits under this Article and this Code (to the extent that the provisions of this Code relate to the eligible retiree's rights under this Article) and shall be deemed to have no service credit established under this Article. However, an eligible retiree who receives a pension buyout payment under this Section shall be deemed to be an annuitant for the purposes of the State Employees Group Insurance Act of 1971 and shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to.

(c) The System shall approve a standardized form contract. The System may by rule specify provisions that must be included in the standardized form contract.

(d) Any reduction in the System's liability arising from the pension buyout option shall not be included in the calculation or certification of required State contributions sooner than the next certification following the exercise of the pension buyout option. The calculation of required State contributions under this Article shall not include any reduction in the System's liability due to any anticipated pension buyout under this Section that has not yet been made.

(e) In accordance with rules adopted by the Department of Central Management Services, the Board shall certify to the Department of Central Management Services the amount of lump sum payments made under this Section by an approved vendor.

(f) The Board shall adopt rules necessary to implement this Section.

(g) No provision of this Section shall be interpreted in a way that would cause the System to cease to be a qualified plan under the Internal Revenue Code of 1986.

(40 ILCS 5/18-161) (from Ch. 108 1/2, par. 18-161)

Sec. 18-161. Annuities, etc. - exempt. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of participants in this System, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. However, a person may relinquish his or her creditable service under this Article and all rights arising from his or her service under this Article in accordance with Section 18-161.5. A person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the "State Salary and Annuity Withholding Act", approved August 21, 1961, as now or hereafter amended.

The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.

(Source: P.A. 86-273.)

(40 ILCS 5/18-161.5 new)

Sec. 18-161.5. Pension buyout option.

(a) As used in this Section:

"Approved vendor" means a vendor that has entered into a contract with the Department of Central Management Services to provide lump sum payments under this Section.

"Eligible retiree" means a person who (i) has made the election to receive a retirement annuity; (ii) is eligible to receive a retirement annuity; (iii) has terminated service; (iv) is not subject to a QILDRO under this Article; and (v) has received at least the minimum amount of certified financial planning services, in accordance with rules adopted by the Department of Central Management Services, provided by the approved vendor.

"Pension buyout option" means a plan that authorizes an eligible retiree to relinquish all rights and benefits under this Article and this Code (to the extent that the provisions of this Code relate to benefits under this Article), including, but not limited to, a survivor's annuity, a retirement annuity, and a refund of contributions, and shall be deemed to have no service credit established under this Article in exchange for a lump sum payment equal to the present value of the retirement annuity as calculated by the System using the actuarial tables and other assumptions adopted by the Board.

"Standardized form contract" means the contract approved by the System in accordance with subsection (c).

(b) In the event that the Department of Central Management Services enters into a contract with an approved vendor and implements a pension buyout option:

(1) An eligible retiree may make the election authorized under this Section at any time after he or she has elected to retire and has terminated service. However, a retiree who has elected to proceed under the Retirement Systems Reciprocal Act is not eligible to elect the pension buyout option under this Section.

(2) An eligible retiree who wishes to participate in the pension buyout option may request that the System determine the dollar amount that the eligible retiree would receive under the pension buyout option.

(3) After the System determines the dollar amount that the eligible retiree would receive under the pension buyout option, an eligible retiree who wishes to participate in the pension buyout option shall do so by (i) notifying the approved vendor and the System and (ii) executing the standardized form contract with the approved vendor. As soon as practical after the execution of the standardized form contract, the approved vendor shall notify the System that the eligible retiree executed the standardized form contract. The System shall adopt rules concerning the notice requirements.

(4) On the first day of the month following the execution of the standardized form contract between the approved vendor and the eligible retiree, the eligible retiree shall have no rights or benefits under this Article and this Code (to the extent that the provisions of this Code relate to the eligible retiree's rights under this Article) and shall be deemed to have no service credit established under this Article. However, an eligible retiree who receives a pension buyout payment under this Section shall be deemed to be an annuitant for the purposes of the State Employees Group Insurance Act of 1971 and shall be entitled to any benefits under the State Employees Group Insurance Act of 1971 that he or she would have otherwise been entitled to.

(c) The System shall approve a standardized form contract. The System may by rule specify provisions that must be included in the standardized form contract.

(d) Any reduction in the System's liability arising from the pension buyout option shall not be included in the calculation or certification of required State contributions sooner than the next certification following the exercise of the pension buyout option. The calculation of required State contributions under this Article shall not include any reduction in the System's liability due to any anticipated pension buyout under this Section that has not yet been made.

(e) In accordance with rules adopted by the Department of Central Management Services, the Board shall certify to the Department of Central Management Services the amount of lump sum payments made under this Section by an approved vendor.

(f) The Board shall adopt rules necessary to implement this Section.

(g) No provision of this Section shall be interpreted in a way that would cause the System to cease to be a qualified plan under the Internal Revenue Code of 1986.

Section 999. Effective date. This Act takes effect July 1, 2018.