101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2901

 

Introduced , by Rep. Jay Hoffman

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
40 ILCS 5/14-152.1

    Amends the General Provisions Article of the Illinois Pension Code. Provides that a State policeman who meets the requirements of the Tier 2 provisions is entitled to an annuity calculated under the alternative retirement annuity provisions of the State Employee Article of the Code in lieu of the regular or minimum retirement annuity only if the person has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 50 (instead of age 60), regardless of whether the attainment of age 50 (instead of age 60) occurs while the person is still in service. Provides that the changes made by the amendatory Act apply without regard to whether a person is in active service on or after the effective date of the amendatory Act. Excludes a benefit increase resulting from the amendatory Act from the definition of "new benefit increase". Effective immediately.


LRB101 09758 RPS 54859 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2901LRB101 09758 RPS 54859 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 1-160 and 14-152.1 as follows:
 
6    (40 ILCS 5/1-160)
7    Sec. 1-160. Provisions applicable to new hires.
8    (a) The provisions of this Section apply to a person who,
9on or after January 1, 2011, first becomes a member or a
10participant under any reciprocal retirement system or pension
11fund established under this Code, other than a retirement
12system or pension fund established under Article 2, 3, 4, 5, 6,
1315 or 18 of this Code, notwithstanding any other provision of
14this Code to the contrary, but do not apply to any self-managed
15plan established under this Code, to any person with respect to
16service as a sheriff's law enforcement employee under Article
177, or to any participant of the retirement plan established
18under Section 22-101. Notwithstanding anything to the contrary
19in this Section, for purposes of this Section, a person who
20participated in a retirement system under Article 15 prior to
21January 1, 2011 shall be deemed a person who first became a
22member or participant prior to January 1, 2011 under any
23retirement system or pension fund subject to this Section. The

 

 

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1changes made to this Section by Public Act 98-596 are a
2clarification of existing law and are intended to be
3retroactive to January 1, 2011 (the effective date of Public
4Act 96-889), notwithstanding the provisions of Section 1-103.1
5of this Code.
6    This Section does not apply to a person who first becomes a
7noncovered employee under Article 14 on or after the
8implementation date of the plan created under Section 1-161 for
9that Article, unless that person elects under subsection (b) of
10Section 1-161 to instead receive the benefits provided under
11this Section and the applicable provisions of that Article.
12    This Section does not apply to a person who first becomes a
13member or participant under Article 16 on or after the
14implementation date of the plan created under Section 1-161 for
15that Article, unless that person elects under subsection (b) of
16Section 1-161 to instead receive the benefits provided under
17this Section and the applicable provisions of that Article.
18    This Section does not apply to a person who elects under
19subsection (c-5) of Section 1-161 to receive the benefits under
20Section 1-161.
21    This Section does not apply to a person who first becomes a
22member or participant of an affected pension fund on or after 6
23months after the resolution or ordinance date, as defined in
24Section 1-162, unless that person elects under subsection (c)
25of Section 1-162 to receive the benefits provided under this
26Section and the applicable provisions of the Article under

 

 

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1which he or she is a member or participant.
2    (b) "Final average salary" means the average monthly (or
3annual) salary obtained by dividing the total salary or
4earnings calculated under the Article applicable to the member
5or participant during the 96 consecutive months (or 8
6consecutive years) of service within the last 120 months (or 10
7years) of service in which the total salary or earnings
8calculated under the applicable Article was the highest by the
9number of months (or years) of service in that period. For the
10purposes of a person who first becomes a member or participant
11of any retirement system or pension fund to which this Section
12applies on or after January 1, 2011, in this Code, "final
13average salary" shall be substituted for the following:
14        (1) In Article 7 (except for service as sheriff's law
15    enforcement employees), "final rate of earnings".
16        (2) In Articles 8, 9, 10, 11, and 12, "highest average
17    annual salary for any 4 consecutive years within the last
18    10 years of service immediately preceding the date of
19    withdrawal".
20        (3) In Article 13, "average final salary".
21        (4) In Article 14, "final average compensation".
22        (5) In Article 17, "average salary".
23        (6) In Section 22-207, "wages or salary received by him
24    at the date of retirement or discharge".
25    (b-5) Beginning on January 1, 2011, for all purposes under
26this Code (including without limitation the calculation of

 

 

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1benefits and employee contributions), the annual earnings,
2salary, or wages (based on the plan year) of a member or
3participant to whom this Section applies shall not exceed
4$106,800; however, that amount shall annually thereafter be
5increased by the lesser of (i) 3% of that amount, including all
6previous adjustments, or (ii) one-half the annual unadjusted
7percentage increase (but not less than zero) in the consumer
8price index-u for the 12 months ending with the September
9preceding each November 1, including all previous adjustments.
10    For the purposes of this Section, "consumer price index-u"
11means the index published by the Bureau of Labor Statistics of
12the United States Department of Labor that measures the average
13change in prices of goods and services purchased by all urban
14consumers, United States city average, all items, 1982-84 =
15100. The new amount resulting from each annual adjustment shall
16be determined by the Public Pension Division of the Department
17of Insurance and made available to the boards of the retirement
18systems and pension funds by November 1 of each year.
19    (c) A member or participant is entitled to a retirement
20annuity upon written application if he or she has attained age
2167 (beginning January 1, 2015, age 65 with respect to service
22under Article 12 of this Code that is subject to this Section)
23and has at least 10 years of service credit and is otherwise
24eligible under the requirements of the applicable Article.
25    A member or participant who has attained age 62 (beginning
26January 1, 2015, age 60 with respect to service under Article

 

 

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112 of this Code that is subject to this Section) and has at
2least 10 years of service credit and is otherwise eligible
3under the requirements of the applicable Article may elect to
4receive the lower retirement annuity provided in subsection (d)
5of this Section.
6    (c-5) A person who first becomes a member or a participant
7subject to this Section on or after July 6, 2017 (the effective
8date of Public Act 100-23), notwithstanding any other provision
9of this Code to the contrary, is entitled to a retirement
10annuity under Article 8 or Article 11 upon written application
11if he or she has attained age 65 and has at least 10 years of
12service credit and is otherwise eligible under the requirements
13of Article 8 or Article 11 of this Code, whichever is
14applicable.
15    (d) The retirement annuity of a member or participant who
16is retiring after attaining age 62 (beginning January 1, 2015,
17age 60 with respect to service under Article 12 of this Code
18that is subject to this Section) with at least 10 years of
19service credit shall be reduced by one-half of 1% for each full
20month that the member's age is under age 67 (beginning January
211, 2015, age 65 with respect to service under Article 12 of
22this Code that is subject to this Section).
23    (d-5) The retirement annuity payable under Article 8 or
24Article 11 to an eligible person subject to subsection (c-5) of
25this Section who is retiring at age 60 with at least 10 years
26of service credit shall be reduced by one-half of 1% for each

 

 

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1full month that the member's age is under age 65.
2    (d-10) Each person who first became a member or participant
3under Article 8 or Article 11 of this Code on or after January
41, 2011 and prior to the effective date of this amendatory Act
5of the 100th General Assembly shall make an irrevocable
6election either:
7        (i) to be eligible for the reduced retirement age
8    provided in subsections (c-5) and (d-5) of this Section,
9    the eligibility for which is conditioned upon the member or
10    participant agreeing to the increases in employee
11    contributions for age and service annuities provided in
12    subsection (a-5) of Section 8-174 of this Code (for service
13    under Article 8) or subsection (a-5) of Section 11-170 of
14    this Code (for service under Article 11); or
15        (ii) to not agree to item (i) of this subsection
16    (d-10), in which case the member or participant shall
17    continue to be subject to the retirement age provisions in
18    subsections (c) and (d) of this Section and the employee
19    contributions for age and service annuity as provided in
20    subsection (a) of Section 8-174 of this Code (for service
21    under Article 8) or subsection (a) of Section 11-170 of
22    this Code (for service under Article 11).
23    The election provided for in this subsection shall be made
24between October 1, 2017 and November 15, 2017. A person subject
25to this subsection who makes the required election shall remain
26bound by that election. A person subject to this subsection who

 

 

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1fails for any reason to make the required election within the
2time specified in this subsection shall be deemed to have made
3the election under item (ii).
4    (e) Any retirement annuity or supplemental annuity shall be
5subject to annual increases on the January 1 occurring either
6on or after the attainment of age 67 (beginning January 1,
72015, age 65 with respect to service under Article 12 of this
8Code that is subject to this Section and beginning on the
9effective date of this amendatory Act of the 100th General
10Assembly, age 65 with respect to service under Article 8 or
11Article 11 for eligible persons who: (i) are subject to
12subsection (c-5) of this Section; or (ii) made the election
13under item (i) of subsection (d-10) of this Section) or the
14first anniversary of the annuity start date, whichever is
15later. Each annual increase shall be calculated at 3% or
16one-half the annual unadjusted percentage increase (but not
17less than zero) in the consumer price index-u for the 12 months
18ending with the September preceding each November 1, whichever
19is less, of the originally granted retirement annuity. If the
20annual unadjusted percentage change in the consumer price
21index-u for the 12 months ending with the September preceding
22each November 1 is zero or there is a decrease, then the
23annuity shall not be increased.
24    For the purposes of Section 1-103.1 of this Code, the
25changes made to this Section by this amendatory Act of the
26100th General Assembly are applicable without regard to whether

 

 

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1the employee was in active service on or after the effective
2date of this amendatory Act of the 100th General Assembly.
3    (f) The initial survivor's or widow's annuity of an
4otherwise eligible survivor or widow of a retired member or
5participant who first became a member or participant on or
6after January 1, 2011 shall be in the amount of 66 2/3% of the
7retired member's or participant's retirement annuity at the
8date of death. In the case of the death of a member or
9participant who has not retired and who first became a member
10or participant on or after January 1, 2011, eligibility for a
11survivor's or widow's annuity shall be determined by the
12applicable Article of this Code. The initial benefit shall be
1366 2/3% of the earned annuity without a reduction due to age. A
14child's annuity of an otherwise eligible child shall be in the
15amount prescribed under each Article if applicable. Any
16survivor's or widow's annuity shall be increased (1) on each
17January 1 occurring on or after the commencement of the annuity
18if the deceased member died while receiving a retirement
19annuity or (2) in other cases, on each January 1 occurring
20after the first anniversary of the commencement of the annuity.
21Each annual increase shall be calculated at 3% or one-half the
22annual unadjusted percentage increase (but not less than zero)
23in the consumer price index-u for the 12 months ending with the
24September preceding each November 1, whichever is less, of the
25originally granted survivor's annuity. If the annual
26unadjusted percentage change in the consumer price index-u for

 

 

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1the 12 months ending with the September preceding each November
21 is zero or there is a decrease, then the annuity shall not be
3increased.
4    (g) The benefits in Section 14-110 apply only if the person
5is a State policeman, a fire fighter in the fire protection
6service of a department, a security employee of the Department
7of Corrections or the Department of Juvenile Justice, or a
8security employee of the Department of Innovation and
9Technology, as those terms are defined in subsection (b) and
10subsection (c) of Section 14-110. Except for a State policeman,
11a A person who meets the requirements of this Section is
12entitled to an annuity calculated under the provisions of
13Section 14-110, in lieu of the regular or minimum retirement
14annuity, only if the person has withdrawn from service with not
15less than 20 years of eligible creditable service and has
16attained age 60, regardless of whether the attainment of age 60
17occurs while the person is still in service. A State policeman
18who meets the requirements of this Section is entitled to an
19annuity calculated under the provisions of Section 14-110 in
20lieu of the regular or minimum retirement annuity only if the
21person has withdrawn from service with not less than 20 years
22of eligible creditable service and has attained age 50,
23regardless of whether the attainment of age 50 occurs while the
24person is still in service.
25    The changes made to this Section apply without regard to
26whether the person is in active service on or after the

 

 

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1effective date of this amendatory Act of the 101st General
2Assembly.
3    (h) If a person who first becomes a member or a participant
4of a retirement system or pension fund subject to this Section
5on or after January 1, 2011 is receiving a retirement annuity
6or retirement pension under that system or fund and becomes a
7member or participant under any other system or fund created by
8this Code and is employed on a full-time basis, except for
9those members or participants exempted from the provisions of
10this Section under subsection (a) of this Section, then the
11person's retirement annuity or retirement pension under that
12system or fund shall be suspended during that employment. Upon
13termination of that employment, the person's retirement
14annuity or retirement pension payments shall resume and be
15recalculated if recalculation is provided for under the
16applicable Article of this Code.
17    If a person who first becomes a member of a retirement
18system or pension fund subject to this Section on or after
19January 1, 2012 and is receiving a retirement annuity or
20retirement pension under that system or fund and accepts on a
21contractual basis a position to provide services to a
22governmental entity from which he or she has retired, then that
23person's annuity or retirement pension earned as an active
24employee of the employer shall be suspended during that
25contractual service. A person receiving an annuity or
26retirement pension under this Code shall notify the pension

 

 

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1fund or retirement system from which he or she is receiving an
2annuity or retirement pension, as well as his or her
3contractual employer, of his or her retirement status before
4accepting contractual employment. A person who fails to submit
5such notification shall be guilty of a Class A misdemeanor and
6required to pay a fine of $1,000. Upon termination of that
7contractual employment, the person's retirement annuity or
8retirement pension payments shall resume and, if appropriate,
9be recalculated under the applicable provisions of this Code.
10    (i) (Blank).
11    (j) In the case of a conflict between the provisions of
12this Section and any other provision of this Code, the
13provisions of this Section shall control.
14(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17;
15100-563, eff. 12-8-17; 100-611, eff. 7-20-18; 100-1166, eff.
161-4-19.)
 
17    (40 ILCS 5/14-152.1)
18    Sec. 14-152.1. Application and expiration of new benefit
19increases.
20    (a) As used in this Section, "new benefit increase" means
21an increase in the amount of any benefit provided under this
22Article, or an expansion of the conditions of eligibility for
23any benefit under this Article, that results from an amendment
24to this Code that takes effect after June 1, 2005 (the
25effective date of Public Act 94-4). "New benefit increase",

 

 

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1however, does not include any benefit increase resulting from
2the changes made to Article 1 or this Article by Public Act
396-37, Public Act 100-23, Public Act 100-587, Public Act
4100-611, or this amendatory Act of the 101st General Assembly
5or this amendatory Act of the 100th General Assembly.
6    (b) Notwithstanding any other provision of this Code or any
7subsequent amendment to this Code, every new benefit increase
8is subject to this Section and shall be deemed to be granted
9only in conformance with and contingent upon compliance with
10the provisions of this Section.
11    (c) The Public Act enacting a new benefit increase must
12identify and provide for payment to the System of additional
13funding at least sufficient to fund the resulting annual
14increase in cost to the System as it accrues.
15    Every new benefit increase is contingent upon the General
16Assembly providing the additional funding required under this
17subsection. The Commission on Government Forecasting and
18Accountability shall analyze whether adequate additional
19funding has been provided for the new benefit increase and
20shall report its analysis to the Public Pension Division of the
21Department of Insurance. A new benefit increase created by a
22Public Act that does not include the additional funding
23required under this subsection is null and void. If the Public
24Pension Division determines that the additional funding
25provided for a new benefit increase under this subsection is or
26has become inadequate, it may so certify to the Governor and

 

 

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1the State Comptroller and, in the absence of corrective action
2by the General Assembly, the new benefit increase shall expire
3at the end of the fiscal year in which the certification is
4made.
5    (d) Every new benefit increase shall expire 5 years after
6its effective date or on such earlier date as may be specified
7in the language enacting the new benefit increase or provided
8under subsection (c). This does not prevent the General
9Assembly from extending or re-creating a new benefit increase
10by law.
11    (e) Except as otherwise provided in the language creating
12the new benefit increase, a new benefit increase that expires
13under this Section continues to apply to persons who applied
14and qualified for the affected benefit while the new benefit
15increase was in effect and to the affected beneficiaries and
16alternate payees of such persons, but does not apply to any
17other person, including without limitation a person who
18continues in service after the expiration date and did not
19apply and qualify for the affected benefit while the new
20benefit increase was in effect.
21(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
22100-611, eff. 7-20-18; revised 7-25-18.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.