101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5354

 

Introduced , by Rep. Jim Durkin

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/2-105.3 new
40 ILCS 5/2-107.9 new
40 ILCS 5/2-107.10 new
40 ILCS 5/2-108  from Ch. 108 1/2, par. 2-108
40 ILCS 5/2-110.3 new
40 ILCS 5/2-119.1  from Ch. 108 1/2, par. 2-119.1
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/2-126  from Ch. 108 1/2, par. 2-126
40 ILCS 5/2-134  from Ch. 108 1/2, par. 2-134
40 ILCS 5/2-162
40 ILCS 15/1.10 new

    Amends the General Assembly Article of the Illinois Pension Code. Requires active Tier 1 employees to elect either to (i) have automatic annual increases in retirement and survivor's annuities delayed and reduced or (ii) not agree to the delay and reduction. Provides that a Tier 1 employee who elects to have automatic annual increases in retirement and survivor's annuities delayed and reduced is entitled to have future increases in income treated as pensionable income, have contributions reduced to a specified rate, and receive a consideration payment of 10% of contributions made prior to the election. Provides that a Tier 1 employee who elects to not agree to the delay and reduction is not eligible to have future increases in income treated as pensionable income. Makes funding changes. Makes other changes. Amends the State Pension Funds Continuing Appropriation Act to provide a continuing appropriation for the amounts of the consideration payments. Effective immediately.


LRB101 18247 RPS 67689 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5354LRB101 18247 RPS 67689 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 2-108, 2-119.1, 2-124, 2-126, 2-134, and 2-162 and by
6adding Sections 2-105.3, 2-107.9, 2-107.10, and 2-110.3 as
7follows:
 
8    (40 ILCS 5/2-105.3 new)
9    Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
10participant who first became a participant before January 1,
112011.
 
12    (40 ILCS 5/2-107.9 new)
13    Sec. 2-107.9. Future increase in income. "Future increase
14in income" means an increase to a Tier 1 employee's base pay
15that is offered to the Tier 1 employee for service under this
16Article after June 30, 2021 that qualifies as "salary", as
17defined in Section 2-108, or would qualify as "salary" but for
18the fact that it was offered to and accepted by the Tier 1
19employee under the condition set forth in subsection (c) of
20Section 2-110.3.
 
21    (40 ILCS 5/2-107.10 new)

 

 

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1    Sec. 2-107.10. Base pay. As used in Section 2-107.9 of
2this Code, "base pay" means the Tier 1 employee's annualized
3rate of salary as of June 30, 2021. For a person returning to
4active service as a Tier 1 employee after June 30, 2021,
5however, "base pay" means the employee's annualized rate of
6salary as of the employee's last date of service prior to July
71, 2021. The System shall calculate the base pay of each Tier 1
8employee pursuant to this Section.
 
9    (40 ILCS 5/2-108)  (from Ch. 108 1/2, par. 2-108)
10    (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12    Sec. 2-108. Salary. "Salary":
13    (1) For members of the General Assembly, the total
14compensation paid to the member by the State for one year of
15service, including the additional amounts, if any, paid to the
16member as an officer pursuant to Section 1 of "An Act in
17relation to the compensation and emoluments of the members of
18the General Assembly", approved December 6, 1907, as now or
19hereafter amended.
20    (2) For the State executive officers specified in Section
212-105, the total compensation paid to the member for one year
22of service.
23    (3) For members of the System who are participants under
24Section 2-117.1, or who are serving as Clerk or Assistant Clerk
25of the House of Representatives or Secretary or Assistant

 

 

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1Secretary of the Senate, the total compensation paid to the
2member for one year of service, but not to exceed the salary of
3the highest salaried officer of the General Assembly.
4    However, in the event that federal law results in any
5participant receiving imputed income based on the value of
6group term life insurance provided by the State, such imputed
7income shall not be included in salary for the purposes of this
8Article.
9    Notwithstanding any other provision of this Section,
10"salary" does not include any future increase in income that is
11offered for service to a Tier 1 employee under this Article
12pursuant to the condition set forth in subsection (c) of
13Section 2-110.3 and accepted under that condition by a Tier 1
14employee who has made the election under paragraph (2) of
15subsection (a) of Section 2-110.3.
16    Notwithstanding any other provision of this Section,
17"salary" does not include any consideration payment made to a
18Tier 1 employee.
19(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
 
20    (40 ILCS 5/2-110.3 new)
21    Sec. 2-110.3. Election by Tier 1 employees.
22    (a) Each active Tier 1 employee shall make an irrevocable
23election either:
24        (1) to agree to delay his or her eligibility for
25    automatic annual increases in retirement annuity as

 

 

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1    provided in subsection (a-1) of Section 2-119.1 and to have
2    the amount of the automatic annual increases in his or her
3    retirement annuity and survivor's annuity that are
4    otherwise provided for in this Article calculated,
5    instead, as provided in subsection (a-1) of Section
6    2-119.1; or
7        (2) to not agree to paragraph (1) of this subsection.
8    The election required under this subsection (a) shall be
9made by each active Tier 1 employee no earlier than January 1,
102021 and no later than March 31, 2021, except that a person who
11returns to active service as a Tier 1 employee under this
12Article on or after January 1, 2021 and has not yet made an
13election under this Section must make the election under this
14subsection (a) within 60 days after returning to active service
15as a Tier 1 employee.
16    If a Tier 1 employee fails for any reason to make a
17required election under this subsection within the time
18specified, then the employee shall be deemed to have made the
19election under paragraph (2) of this subsection.
20    (a-5) If this Section is enjoined or stayed by an Illinois
21court or a court of competent jurisdiction pending the entry of
22a final and unappealable decision, and this Section is
23determined to be constitutional or otherwise valid by a final
24unappealable decision of an Illinois court or a court of
25competent jurisdiction, then the election procedure set forth
26in subsection (a) of this Section shall commence on the 180th

 

 

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1calendar day after the date of the issuance of the final
2unappealable decision and shall conclude at the end of the
3270th calendar day after that date.
4    (a-10) All elections under subsection (a) that are made or
5deemed to be made before July 1, 2021 shall take effect on July
61, 2021. Elections that are made or deemed to be made on or
7after July 1, 2021 shall take effect on the first day of the
8month following the month in which the election is made or
9deemed to be made.
10    (b) As adequate and legal consideration provided under this
11amendatory Act of the 101st General Assembly for making an
12election under paragraph (1) of subsection (a) of this Section,
13the State of Illinois shall be expressly and irrevocably
14prohibited from offering any future increases in income to a
15Tier 1 employee who has made an election under paragraph (1) of
16subsection (a) of this Section on the condition of not
17constituting salary under Section 2-108.
18    As adequate and legal consideration provided under this
19amendatory Act of the 101st General Assembly for making an
20election under paragraph (1) of subsection (a) of this Section,
21each Tier 1 employee who has made an election under paragraph
22(1) of subsection (a) of this Section shall receive a
23consideration payment equal to 10% of the contributions made by
24or on behalf of the employee under Section 2-126 before the
25effective date of that election. The State Comptroller shall
26pay the consideration payment to the Tier 1 employee out of

 

 

HB5354- 6 -LRB101 18247 RPS 67689 b

1funds appropriated for that purpose under Section 1.10 of the
2State Pension Funds Continuing Appropriation Act. The System
3shall calculate the amount of each consideration payment and,
4by July 1, 2021, shall certify to the State Comptroller the
5amount of the consideration payment, together with the name,
6address, and any other available payment information of the
7Tier 1 employee as found in the records of the System. The
8System shall make additional calculations and certifications
9of consideration payments to the State Comptroller as the
10System deems necessary.
11    (c) A Tier 1 employee who makes the election under
12paragraph (2) of subsection (a) of this Section shall not be
13subject to paragraph (1) of subsection (a) of this Section.
14However, each future increase in income offered for service as
15a member under this Article to a Tier 1 employee who has made
16the election under paragraph (2) of subsection (a) of this
17Section shall be offered expressly and irrevocably on the
18condition of not constituting salary under Section 2-108 and
19that the Tier 1 employee's acceptance of the offered future
20increase in income shall constitute his or her agreement to
21that condition.
22    (d) The System shall make a good faith effort to contact
23each Tier 1 employee subject to this Section. The System shall
24mail information describing the required election to each Tier
251 employee by United States Postal Service mail to his or her
26last known address on file with the System. If the Tier 1

 

 

HB5354- 7 -LRB101 18247 RPS 67689 b

1employee is not responsive to other means of contact, it is
2sufficient for the System to publish the details of any
3required elections on its website or to publish those details
4in a regularly published newsletter or other existing public
5forum.
6    Tier 1 employees who are subject to this Section shall be
7provided with an election packet containing information
8regarding their options, as well as the forms necessary to make
9the required election. Upon request, the System shall offer
10Tier 1 employees an opportunity to receive information from the
11System before making the required election. The information may
12be provided through video materials, group presentations,
13individual consultation with a member or authorized
14representative of the System in person or by telephone or other
15electronic means, or any combination of those methods. The
16System shall not provide advice or counseling with respect to
17which election a Tier 1 employee should make or specific to the
18legal or tax circumstances of or consequences to the Tier 1
19employee.
20    The System shall inform Tier 1 employees in the election
21packet required under this subsection that the Tier 1 employee
22may also wish to obtain information and counsel relating to the
23election required under this Section from any other available
24source, including, but not limited to, labor organizations and
25private counsel.
26    In no event shall the System, its staff, or the Board be

 

 

HB5354- 8 -LRB101 18247 RPS 67689 b

1held liable for any information given to a member regarding the
2elections under this Section. The System shall coordinate with
3the Illinois Department of Central Management Services and each
4other retirement system administering an election in
5accordance with this amendatory Act of the 101st General
6Assembly to provide information concerning the impact of the
7election set forth in this Section.
8    (e) Notwithstanding any other provision of law, each future
9increase in income offered by the State of Illinois for service
10as a member must be offered expressly and irrevocably on the
11condition of not constituting "salary" under Section 2-108 to
12any Tier 1 employee who has made an election under paragraph
13(2) of subsection (a) of this Section. The offer shall also
14provide that the Tier 1 employee's acceptance of the offered
15future increase in income shall constitute his or her agreement
16to the condition set forth in this subsection.
17    For purposes of legislative intent, the condition set forth
18in this subsection shall be construed in a manner that ensures
19that the condition is not violated or circumvented through any
20contrivance of any kind.
21    (f) A member's election under this Section is not a
22prohibited election under subdivision (j)(1) of Section 1-119
23of this Code.
24    (g) No provision of this Section shall be interpreted in a
25way that would cause the System to cease to be a qualified plan
26under Section 401(a) of the Internal Revenue Code of 1986. The

 

 

HB5354- 9 -LRB101 18247 RPS 67689 b

1provisions of this Section shall be subject to and implemented
2in a manner that complies with Section 11 of Article IV of the
3Illinois Constitution.
 
4    (40 ILCS 5/2-119.1)  (from Ch. 108 1/2, par. 2-119.1)
5    (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7    Sec. 2-119.1. Automatic increase in retirement annuity.
8    (a) Except as provided in subsection (a-1), a A participant
9who retires after June 30, 1967, and who has not received an
10initial increase under this Section before the effective date
11of this amendatory Act of 1991, shall, in January or July next
12following the first anniversary of retirement, whichever
13occurs first, and in the same month of each year thereafter,
14but in no event prior to age 60, have the amount of the
15originally granted retirement annuity increased as follows:
16for each year through 1971, 1 1/2%; for each year from 1972
17through 1979, 2%; and for 1980 and each year thereafter, 3%.
18Annuitants who have received an initial increase under this
19subsection prior to the effective date of this amendatory Act
20of 1991 shall continue to receive their annual increases in the
21same month as the initial increase.
22    (a-1) Notwithstanding any other provision of this Article,
23for a Tier 1 employee who made the election under paragraph (1)
24of subsection (a) of Section 2-110.3:
25        (1) The initial increase in retirement annuity under

 

 

HB5354- 10 -LRB101 18247 RPS 67689 b

1    this Section shall occur on the January 1 occurring either
2    on or after the attainment of age 67 or the fifth
3    anniversary of the annuity start date, whichever is
4    earlier.
5        (2) The amount of each automatic annual increase in
6    retirement annuity or survivor's annuity occurring on or
7    after the effective date of that election shall be
8    calculated as a percentage of the originally granted
9    retirement annuity or survivor's annuity, equal to 3% or
10    one-half the annual unadjusted percentage increase (but
11    not less than zero) in the consumer price index-u for the
12    12 months ending with the September preceding each November
13    1, whichever is less. If the annual unadjusted percentage
14    change in the consumer price index-u for the 12 months
15    ending with the September preceding each November 1 is zero
16    or there is a decrease, then the annuity shall not be
17    increased.
18    For the purposes of this Section, "consumer price index-u"
19means the index published by the Bureau of Labor Statistics of
20the United States Department of Labor that measures the average
21change in prices of goods and services purchased by all urban
22consumers, United States city average, all items, 1982-84 =
23100. The new amount resulting from each annual adjustment shall
24be determined by the Public Pension Division of the Department
25of Insurance and made available to the board of the retirement
26system by November 1 of each year.

 

 

HB5354- 11 -LRB101 18247 RPS 67689 b

1    (b) Beginning January 1, 1990, for eligible participants
2who remain in service after attaining 20 years of creditable
3service, the 3% increases provided under subsection (a) shall
4begin to accrue on the January 1 next following the date upon
5which the participant (1) attains age 55, or (2) attains 20
6years of creditable service, whichever occurs later, and shall
7continue to accrue while the participant remains in service;
8such increases shall become payable on January 1 or July 1,
9whichever occurs first, next following the first anniversary of
10retirement. For any person who has service credit in the System
11for the entire period from January 15, 1969 through December
1231, 1992, regardless of the date of termination of service, the
13reference to age 55 in clause (1) of this subsection (b) shall
14be deemed to mean age 50.
15    This subsection (b) does not apply to any person who first
16becomes a member of the System after August 8, 2003 (the
17effective date of Public Act 93-494) this amendatory Act of the
1893rd General Assembly.
19    (b-5) Notwithstanding any other provision of this Article,
20a participant who first becomes a participant on or after
21January 1, 2011 (the effective date of Public Act 96-889)
22shall, in January or July next following the first anniversary
23of retirement, whichever occurs first, and in the same month of
24each year thereafter, but in no event prior to age 67, have the
25amount of the retirement annuity then being paid increased by
263% or the annual unadjusted percentage increase in the Consumer

 

 

HB5354- 12 -LRB101 18247 RPS 67689 b

1Price Index for All Urban Consumers as determined by the Public
2Pension Division of the Department of Insurance under
3subsection (a) of Section 2-108.1, whichever is less.
4    (c) The foregoing provisions relating to automatic
5increases are not applicable to a participant who retires
6before having made contributions (at the rate prescribed in
7Section 2-126) for automatic increases for less than the
8equivalent of one full year. However, in order to be eligible
9for the automatic increases, such a participant may make
10arrangements to pay to the system the amount required to bring
11the total contributions for the automatic increase to the
12equivalent of one year's contributions based upon his or her
13last salary.
14    (d) A participant who terminated service prior to July 1,
151967, with at least 14 years of service is entitled to an
16increase in retirement annuity beginning January, 1976, and to
17additional increases in January of each year thereafter.
18    The initial increase shall be 1 1/2% of the originally
19granted retirement annuity multiplied by the number of full
20years that the annuitant was in receipt of such annuity prior
21to January 1, 1972, plus 2% of the originally granted
22retirement annuity for each year after that date. The
23subsequent annual increases shall be at the rate of 2% of the
24originally granted retirement annuity for each year through
251979 and at the rate of 3% for 1980 and thereafter.
26    (e) Beginning January 1, 1990, and except as provided in

 

 

HB5354- 13 -LRB101 18247 RPS 67689 b

1subsection (a-1), all automatic annual increases payable under
2this Section shall be calculated as a percentage of the total
3annuity payable at the time of the increase, including previous
4increases granted under this Article.
5(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
6    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
7    Sec. 2-124. Contributions by State.
8    (a) The State shall make contributions to the System by
9appropriations of amounts which, together with the
10contributions of participants, interest earned on investments,
11and other income will meet the cost of maintaining and
12administering the System on a 90% funded basis in accordance
13with actuarial recommendations.
14    (b) The Board shall determine the amount of State
15contributions required for each fiscal year on the basis of the
16actuarial tables and other assumptions adopted by the Board and
17the prescribed rate of interest, using the formula in
18subsection (c).
19    (c) For State fiscal years 2012 through 2045 (except as
20otherwise provided for fiscal year 2022), the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23sufficient to bring the total assets of the System up to 90% of
24the total actuarial liabilities of the System by the end of
25State fiscal year 2045. In making these determinations, the

 

 

HB5354- 14 -LRB101 18247 RPS 67689 b

1required State contribution shall be calculated each year as a
2level percentage of payroll over the years remaining to and
3including fiscal year 2045 and shall be determined under the
4projected unit credit actuarial cost method.
5    For State fiscal year 2022:
6        (1) The initial calculation and certification shall be
7    based on the amount determined above.
8        (2) For purposes of the recertification due on or
9    before May 1, 2021, the recalculation of the required State
10    contribution for fiscal year 2022 shall take into account
11    the effect on the System's liabilities of the elections
12    made under Section 2-110.3.
13        (3) For purposes of the recertification due on or
14    before October 1, 2021, the total required State
15    contribution for fiscal year 2022 shall be reduced by the
16    amount of the consideration payments made to Tier 1
17    employees who made the election under paragraph (1) of
18    subsection (a) of Section 2-110.3.
19    If Section 2-110.3 is determined to be unconstitutional or
20otherwise invalid by a final unappealable decision of an
21Illinois court or a court of competent jurisdiction, then the
22changes made to this Section by this amendatory Act of the
23101st General Assembly shall not take effect and are repealed
24by operation of law.
25    A change in an actuarial or investment assumption that
26increases or decreases the required State contribution and

 

 

HB5354- 15 -LRB101 18247 RPS 67689 b

1first applies in State fiscal year 2018 or thereafter shall be
2implemented in equal annual amounts over a 5-year period
3beginning in the State fiscal year in which the actuarial
4change first applies to the required State contribution.
5    A change in an actuarial or investment assumption that
6increases or decreases the required State contribution and
7first applied to the State contribution in fiscal year 2014,
82015, 2016, or 2017 shall be implemented:
9        (i) as already applied in State fiscal years before
10    2018; and
11        (ii) in the portion of the 5-year period beginning in
12    the State fiscal year in which the actuarial change first
13    applied that occurs in State fiscal year 2018 or
14    thereafter, by calculating the change in equal annual
15    amounts over that 5-year period and then implementing it at
16    the resulting annual rate in each of the remaining fiscal
17    years in that 5-year period.
18    For State fiscal years 1996 through 2005, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21so that by State fiscal year 2011, the State is contributing at
22the rate required under this Section.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2006 is
25$4,157,000.
26    Notwithstanding any other provision of this Article, the

 

 

HB5354- 16 -LRB101 18247 RPS 67689 b

1total required State contribution for State fiscal year 2007 is
2$5,220,300.
3    For each of State fiscal years 2008 through 2009, the State
4contribution to the System, as a percentage of the applicable
5employee payroll, shall be increased in equal annual increments
6from the required State contribution for State fiscal year
72007, so that by State fiscal year 2011, the State is
8contributing at the rate otherwise required under this Section.
9    Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2010 is
11$10,454,000 and shall be made from the proceeds of bonds sold
12in fiscal year 2010 pursuant to Section 7.2 of the General
13Obligation Bond Act, less (i) the pro rata share of bond sale
14expenses determined by the System's share of total bond
15proceeds, (ii) any amounts received from the General Revenue
16Fund in fiscal year 2010, and (iii) any reduction in bond
17proceeds due to the issuance of discounted bonds, if
18applicable.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2011 is
21the amount recertified by the System on or before April 1, 2011
22pursuant to Section 2-134 and shall be made from the proceeds
23of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
24the General Obligation Bond Act, less (i) the pro rata share of
25bond sale expenses determined by the System's share of total
26bond proceeds, (ii) any amounts received from the General

 

 

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1Revenue Fund in fiscal year 2011, and (iii) any reduction in
2bond proceeds due to the issuance of discounted bonds, if
3applicable.
4    Beginning in State fiscal year 2046, the minimum State
5contribution for each fiscal year shall be the amount needed to
6maintain the total assets of the System at 90% of the total
7actuarial liabilities of the System.
8    Amounts received by the System pursuant to Section 25 of
9the Budget Stabilization Act or Section 8.12 of the State
10Finance Act in any fiscal year do not reduce and do not
11constitute payment of any portion of the minimum State
12contribution required under this Article in that fiscal year.
13Such amounts shall not reduce, and shall not be included in the
14calculation of, the required State contributions under this
15Article in any future year until the System has reached a
16funding ratio of at least 90%. A reference in this Article to
17the "required State contribution" or any substantially similar
18term does not include or apply to any amounts payable to the
19System under Section 25 of the Budget Stabilization Act.
20    Notwithstanding any other provision of this Section, the
21required State contribution for State fiscal year 2005 and for
22fiscal year 2008 and each fiscal year thereafter, as calculated
23under this Section and certified under Section 2-134, shall not
24exceed an amount equal to (i) the amount of the required State
25contribution that would have been calculated under this Section
26for that fiscal year if the System had not received any

 

 

HB5354- 18 -LRB101 18247 RPS 67689 b

1payments under subsection (d) of Section 7.2 of the General
2Obligation Bond Act, minus (ii) the portion of the State's
3total debt service payments for that fiscal year on the bonds
4issued in fiscal year 2003 for the purposes of that Section
57.2, as determined and certified by the Comptroller, that is
6the same as the System's portion of the total moneys
7distributed under subsection (d) of Section 7.2 of the General
8Obligation Bond Act. In determining this maximum for State
9fiscal years 2008 through 2010, however, the amount referred to
10in item (i) shall be increased, as a percentage of the
11applicable employee payroll, in equal increments calculated
12from the sum of the required State contribution for State
13fiscal year 2007 plus the applicable portion of the State's
14total debt service payments for fiscal year 2007 on the bonds
15issued in fiscal year 2003 for the purposes of Section 7.2 of
16the General Obligation Bond Act, so that, by State fiscal year
172011, the State is contributing at the rate otherwise required
18under this Section.
19    (d) For purposes of determining the required State
20contribution to the System, the value of the System's assets
21shall be equal to the actuarial value of the System's assets,
22which shall be calculated as follows:
23    As of June 30, 2008, the actuarial value of the System's
24assets shall be equal to the market value of the assets as of
25that date. In determining the actuarial value of the System's
26assets for fiscal years after June 30, 2008, any actuarial

 

 

HB5354- 19 -LRB101 18247 RPS 67689 b

1gains or losses from investment return incurred in a fiscal
2year shall be recognized in equal annual amounts over the
35-year period following that fiscal year.
4    (e) For purposes of determining the required State
5contribution to the system for a particular year, the actuarial
6value of assets shall be assumed to earn a rate of return equal
7to the system's actuarially assumed rate of return.
8(Source: P.A. 100-23, eff. 7-6-17.)
 
9    (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
10    (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12    Sec. 2-126. Contributions by participants.
13    (a) Each participant shall contribute toward the cost of
14his or her retirement annuity a percentage of each payment of
15salary received by him or her for service as a member as
16follows: for service between October 31, 1947 and January 1,
171959, 5%; for service between January 1, 1959 and June 30,
181969, 6%; for service between July 1, 1969 and January 10,
191973, 6 1/2%; for service after January 10, 1973, 7%; for
20service after December 31, 1981, 8 1/2%.
21    (b) Beginning August 2, 1949, each male participant, and
22from July 1, 1971, each female participant shall contribute
23towards the cost of the survivor's annuity 2% of salary.
24    A participant who has no eligible survivor's annuity
25beneficiary may elect to cease making contributions for

 

 

HB5354- 20 -LRB101 18247 RPS 67689 b

1survivor's annuity under this subsection. A survivor's annuity
2shall not be payable upon the death of a person who has made
3this election, unless prior to that death the election has been
4revoked and the amount of the contributions that would have
5been paid under this subsection in the absence of the election
6is paid to the System, together with interest at the rate of 4%
7per year from the date the contributions would have been made
8to the date of payment.
9    (c) Beginning July 1, 1967, each participant shall
10contribute 1% of salary towards the cost of automatic increase
11in annuity provided in Section 2-119.1. These contributions
12shall be made concurrently with contributions for retirement
13annuity purposes.
14    (d) In addition, each participant serving as an officer of
15the General Assembly shall contribute, for the same purposes
16and at the same rates as are required of a regular participant,
17on each additional payment received as an officer. If the
18participant serves as an officer for at least 2 but less than 4
19years, he or she shall contribute an amount equal to the amount
20that would have been contributed had the participant served as
21an officer for 4 years. Persons who serve as officers in the
2287th General Assembly but cannot receive the additional payment
23to officers because of the ban on increases in salary during
24their terms may nonetheless make contributions based on those
25additional payments for the purpose of having the additional
26payments included in their highest salary for annuity purposes;

 

 

HB5354- 21 -LRB101 18247 RPS 67689 b

1however, persons electing to make these additional
2contributions must also pay an amount representing the
3corresponding employer contributions, as calculated by the
4System.
5    (e) Notwithstanding any other provision of this Article,
6the required contribution of a participant who first becomes a
7participant on or after January 1, 2011 shall not exceed the
8contribution that would be due under this Article if that
9participant's highest salary for annuity purposes were
10$106,800, plus any increases in that amount under Section
112-108.1.
12    (f) Beginning July 1, 2021 or the effective date of the
13Tier 1 employee's election under paragraph (1) of subsection
14(a) of Section 2-110.3, whichever is later, in lieu of the
15contributions otherwise required under this Section, each Tier
161 employee who made the election under paragraph (1) of
17subsection (a) of Section 2-110.3 shall contribute 8.5% of each
18payment of salary toward the cost of his or her retirement
19annuity and 1.85% of each payment of salary toward the cost of
20the survivor's annuity.
21    (g) Notwithstanding subsection (f) of this Section,
22beginning July 1, 2021 or the effective date of the Tier 1
23employee's election under paragraph (1) of subsection (a) of
24Section 2-110.3, whichever is later, in lieu of the
25contributions otherwise required under this Section, each Tier
261 employee who made the election under paragraph (1) of

 

 

HB5354- 22 -LRB101 18247 RPS 67689 b

1subsection (a) of Section 2-110.3 and has elected to cease
2making contributions for survivor's annuity under subsection
3(b) of this Section, shall contribute 8.55% of each payment of
4salary toward the cost of his or her retirement annuity.
5(Source: P.A. 96-1490, eff. 1-1-11.)
 
6    (40 ILCS 5/2-134)   (from Ch. 108 1/2, par. 2-134)
7    Sec. 2-134. To certify required State contributions and
8submit vouchers.
9    (a) The Board shall certify to the Governor on or before
10December 15 of each year until December 15, 2011 the amount of
11the required State contribution to the System for the next
12fiscal year and shall specifically identify the System's
13projected State normal cost for that fiscal year. The
14certification shall include a copy of the actuarial
15recommendations upon which it is based and shall specifically
16identify the System's projected State normal cost for that
17fiscal year.
18    On or before November 1 of each year, beginning November 1,
192012, the Board shall submit to the State Actuary, the
20Governor, and the General Assembly a proposed certification of
21the amount of the required State contribution to the System for
22the next fiscal year, along with all of the actuarial
23assumptions, calculations, and data upon which that proposed
24certification is based. On or before January 1 of each year
25beginning January 1, 2013, the State Actuary shall issue a

 

 

HB5354- 23 -LRB101 18247 RPS 67689 b

1preliminary report concerning the proposed certification and
2identifying, if necessary, recommended changes in actuarial
3assumptions that the Board must consider before finalizing its
4certification of the required State contributions. On or before
5January 15, 2013 and every January 15 thereafter, the Board
6shall certify to the Governor and the General Assembly the
7amount of the required State contribution for the next fiscal
8year. The Board's certification must note any deviations from
9the State Actuary's recommended changes, the reason or reasons
10for not following the State Actuary's recommended changes, and
11the fiscal impact of not following the State Actuary's
12recommended changes on the required State contribution.
13    On or before May 1, 2004, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2005, taking
16into account the amounts appropriated to and received by the
17System under subsection (d) of Section 7.2 of the General
18Obligation Bond Act.
19    On or before July 1, 2005, the Board shall recalculate and
20recertify to the Governor the amount of the required State
21contribution to the System for State fiscal year 2006, taking
22into account the changes in required State contributions made
23by this amendatory Act of the 94th General Assembly.
24    On or before April 1, 2011, the Board shall recalculate and
25recertify to the Governor the amount of the required State
26contribution to the System for State fiscal year 2011, applying

 

 

HB5354- 24 -LRB101 18247 RPS 67689 b

1the changes made by Public Act 96-889 to the System's assets
2and liabilities as of June 30, 2009 as though Public Act 96-889
3was approved on that date.
4    By November 1, 2017, the Board shall recalculate and
5recertify to the State Actuary, the Governor, and the General
6Assembly the amount of the State contribution to the System for
7State fiscal year 2018, taking into account the changes in
8required State contributions made by this amendatory Act of the
9100th General Assembly. The State Actuary shall review the
10assumptions and valuations underlying the Board's revised
11certification and issue a preliminary report concerning the
12proposed recertification and identifying, if necessary,
13recommended changes in actuarial assumptions that the Board
14must consider before finalizing its certification of the
15required State contributions. The Board's final certification
16must note any deviations from the State Actuary's recommended
17changes, the reason or reasons for not following the State
18Actuary's recommended changes, and the fiscal impact of not
19following the State Actuary's recommended changes on the
20required State contribution.
21    On or before May 1, 2021, the Board shall recalculate and
22recertify to the Governor and the General Assembly the amount
23of the required State contribution to the System for State
24fiscal year 2022, taking into account the effect on the
25System's liabilities of the elections made under Section
262-110.3.

 

 

HB5354- 25 -LRB101 18247 RPS 67689 b

1    On or before October 1, 2021, the Board shall recalculate
2and recertify to the Governor and the General Assembly the
3amount of the required State contribution to the System for
4State fiscal year 2022, taking into account the reduction
5specified under item (3) of subsection (c) of Section 2-124.
6    (b) Beginning in State fiscal year 1996, on or as soon as
7possible after the 15th day of each month the Board shall
8submit vouchers for payment of State contributions to the
9System, in a total monthly amount of one-twelfth of the
10required annual State contribution certified under subsection
11(a). From the effective date of this amendatory Act of the 93rd
12General Assembly through June 30, 2004, the Board shall not
13submit vouchers for the remainder of fiscal year 2004 in excess
14of the fiscal year 2004 certified contribution amount
15determined under this Section after taking into consideration
16the transfer to the System under subsection (d) of Section
176z-61 of the State Finance Act. These vouchers shall be paid by
18the State Comptroller and Treasurer by warrants drawn on the
19funds appropriated to the System for that fiscal year. If in
20any month the amount remaining unexpended from all other
21appropriations to the System for the applicable fiscal year
22(including the appropriations to the System under Section 8.12
23of the State Finance Act and Section 1 of the State Pension
24Funds Continuing Appropriation Act) is less than the amount
25lawfully vouchered under this Section, the difference shall be
26paid from the General Revenue Fund under the continuing

 

 

HB5354- 26 -LRB101 18247 RPS 67689 b

1appropriation authority provided in Section 1.1 of the State
2Pension Funds Continuing Appropriation Act.
3    (c) The full amount of any annual appropriation for the
4System for State fiscal year 1995 shall be transferred and made
5available to the System at the beginning of that fiscal year at
6the request of the Board. Any excess funds remaining at the end
7of any fiscal year from appropriations shall be retained by the
8System as a general reserve to meet the System's accrued
9liabilities.
10(Source: P.A. 100-23, eff. 7-6-17.)
 
11    (40 ILCS 5/2-162)
12    (Text of Section WITHOUT the changes made by P.A. 98-599,
13which has been held unconstitutional)
14    Sec. 2-162. Application and expiration of new benefit
15increases.
16    (a) As used in this Section, "new benefit increase" means
17an increase in the amount of any benefit provided under this
18Article, or an expansion of the conditions of eligibility for
19any benefit under this Article, that results from an amendment
20to this Code that takes effect after the effective date of this
21amendatory Act of the 94th General Assembly. "New benefit
22increase", however, does not include any benefit increase
23resulting from the changes made to this Article by this
24amendatory Act of the 101st General Assembly.
25    (b) Notwithstanding any other provision of this Code or any

 

 

HB5354- 27 -LRB101 18247 RPS 67689 b

1subsequent amendment to this Code, every new benefit increase
2is subject to this Section and shall be deemed to be granted
3only in conformance with and contingent upon compliance with
4the provisions of this Section.
5    (c) The Public Act enacting a new benefit increase must
6identify and provide for payment to the System of additional
7funding at least sufficient to fund the resulting annual
8increase in cost to the System as it accrues.
9    Every new benefit increase is contingent upon the General
10Assembly providing the additional funding required under this
11subsection. The Commission on Government Forecasting and
12Accountability shall analyze whether adequate additional
13funding has been provided for the new benefit increase and
14shall report its analysis to the Public Pension Division of the
15Department of Insurance Financial and Professional Regulation.
16A new benefit increase created by a Public Act that does not
17include the additional funding required under this subsection
18is null and void. If the Public Pension Division determines
19that the additional funding provided for a new benefit increase
20under this subsection is or has become inadequate, it may so
21certify to the Governor and the State Comptroller and, in the
22absence of corrective action by the General Assembly, the new
23benefit increase shall expire at the end of the fiscal year in
24which the certification is made.
25    (d) Every new benefit increase shall expire 5 years after
26its effective date or on such earlier date as may be specified

 

 

HB5354- 28 -LRB101 18247 RPS 67689 b

1in the language enacting the new benefit increase or provided
2under subsection (c). This does not prevent the General
3Assembly from extending or re-creating a new benefit increase
4by law.
5    (e) Except as otherwise provided in the language creating
6the new benefit increase, a new benefit increase that expires
7under this Section continues to apply to persons who applied
8and qualified for the affected benefit while the new benefit
9increase was in effect and to the affected beneficiaries and
10alternate payees of such persons, but does not apply to any
11other person, including without limitation a person who
12continues in service after the expiration date and did not
13apply and qualify for the affected benefit while the new
14benefit increase was in effect.
15(Source: P.A. 94-4, eff. 6-1-05.)
 
16    Section 10. The State Pension Funds Continuing
17Appropriation Act is amended by adding Section 1.10 as follows:
 
18    (40 ILCS 15/1.10 new)
19    Sec. 1.10. Appropriation for consideration payment. There
20is hereby appropriated from the General Revenue Fund to the
21State Comptroller, on a continuing basis, all amounts necessary
22for the payment of consideration payments under subsection (b)
23of Section 2-110.3 of the Illinois Pension Code in the amounts
24certified to the State Comptroller by the General Assembly

 

 

HB5354- 29 -LRB101 18247 RPS 67689 b

1Retirement System.
 
2    Section 970. Severability. Except as otherwise provided in
3this Act, the provisions of this Act are severable under
4Section 1.31 of the Statute on Statutes.
 
5    Section 999. Effective date. This Act takes effect upon
6becoming law.