101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1924

 

Introduced 2/15/2019, by Sen. Chuck Weaver

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the General Assembly Article of the Illinois Pension Code. Requires the System to prepare and implement a Tier 3 plan by July 1, 2020 that aggregates State and employee contributions in individual participant accounts which are used for payouts after retirement. Provides that a person who becomes a participant on or after July 1, 2020 shall participate in the Tier 3 plan. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the Tier 3 plan instead of the defined benefit plan; makes conforming changes. Authorizes a Tier 1 or Tier 2 participant who elects to participate in the Tier 3 plan to elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the Tier 3 plan. Requires the System to report on its progress in establishing the Tier 3 plan to the Governor and the General Assembly by January 15, 2020. Excludes the amendatory Act from the new benefit increase restrictions. Authorizes a participant to terminate his or her participation in the System. Makes related changes in the Retirement Systems Reciprocal Act (Article 20 of the Code) and the State Employees Group Insurance Act of 1971. Effective immediately.


LRB101 11021 RPS 56220 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1924LRB101 11021 RPS 56220 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 State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
 
6    (5 ILCS 375/3)  (from Ch. 127, par. 523)
7    Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose of
11implementing specific programs providing benefits under this
12Act.
13    (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18    (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Article Articles 2 (including an
21employee who, in lieu of receiving an annuity under that
22Article, has retired under the Tier 3 plan established under
23Section 2-165.5 of that Article), 14 (including an employee who

 

 

SB1924- 2 -LRB101 11021 RPS 56220 b

1has elected to receive an alternative retirement cancellation
2payment under Section 14-108.5 of the Illinois Pension Code in
3lieu of an annuity or who meets the criteria for retirement,
4but in lieu of receiving an annuity under that Article has
5elected to receive an accelerated pension benefit payment under
6Section 14-147.5 of that Article), 15 (including an employee
7who has retired under the optional retirement program
8established under Section 15-158.2 or who meets the criteria
9for retirement but in lieu of receiving an annuity under that
10Article has elected to receive an accelerated pension benefit
11payment under Section 15-185.5 of the Article), paragraphs (2),
12(3), or (5) of Section 16-106 (including an employee who meets
13the criteria for retirement, but in lieu of receiving an
14annuity under that Article has elected to receive an
15accelerated pension benefit payment under Section 16-190.5 of
16the Illinois Pension Code), or Article 18 of the Illinois
17Pension Code; (2) any person who was receiving group insurance
18coverage under this Act as of March 31, 1978 by reason of his
19status as an annuitant, even though the annuity in relation to
20which such coverage was provided is a proportional annuity
21based on less than the minimum period of service required for a
22retirement annuity in the system involved; (3) any person not
23otherwise covered by this Act who has retired as a
24participating member under Article 2 of the Illinois Pension
25Code but is ineligible for the retirement annuity under Section
262-119 of the Illinois Pension Code; (4) the spouse of any

 

 

SB1924- 3 -LRB101 11021 RPS 56220 b

1person who is receiving a retirement annuity under Article 18
2of the Illinois Pension Code and who is covered under a group
3health insurance program sponsored by a governmental employer
4other than the State of Illinois and who has irrevocably
5elected to waive his or her coverage under this Act and to have
6his or her spouse considered as the "annuitant" under this Act
7and not as a "dependent"; or (5) an employee who retires, or
8has retired, from a qualified position, as determined according
9to rules promulgated by the Director, under a qualified local
10government, a qualified rehabilitation facility, a qualified
11domestic violence shelter or service, or a qualified child
12advocacy center. (For definition of "retired employee", see (p)
13post).
14    (b-5) (Blank).
15    (b-6) (Blank).
16    (b-7) (Blank).
17    (c) "Carrier" means (1) an insurance company, a corporation
18organized under the Limited Health Service Organization Act or
19the Voluntary Health Services Plan Act, a partnership, or other
20nongovernmental organization, which is authorized to do group
21life or group health insurance business in Illinois, or (2) the
22State of Illinois as a self-insurer.
23    (d) "Compensation" means salary or wages payable on a
24regular payroll by the State Treasurer on a warrant of the
25State Comptroller out of any State, trust or federal fund, or
26by the Governor of the State through a disbursing officer of

 

 

SB1924- 4 -LRB101 11021 RPS 56220 b

1the State out of a trust or out of federal funds, or by any
2Department out of State, trust, federal or other funds held by
3the State Treasurer or the Department, to any person for
4personal services currently performed, and ordinary or
5accidental disability benefits under Articles 2, 14, 15
6(including ordinary or accidental disability benefits under
7the optional retirement program established under Section
815-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
9Article 18 of the Illinois Pension Code, for disability
10incurred after January 1, 1966, or benefits payable under the
11Workers' Compensation or Occupational Diseases Act or benefits
12payable under a sick pay plan established in accordance with
13Section 36 of the State Finance Act. "Compensation" also means
14salary or wages paid to an employee of any qualified local
15government, qualified rehabilitation facility, qualified
16domestic violence shelter or service, or qualified child
17advocacy center.
18    (e) "Commission" means the State Employees Group Insurance
19Advisory Commission authorized by this Act. Commencing July 1,
201984, "Commission" as used in this Act means the Commission on
21Government Forecasting and Accountability as established by
22the Legislative Commission Reorganization Act of 1984.
23    (f) "Contributory", when referred to as contributory
24coverage, shall mean optional coverages or benefits elected by
25the member toward the cost of which such member makes
26contribution, or which are funded in whole or in part through

 

 

SB1924- 5 -LRB101 11021 RPS 56220 b

1the acceptance of a reduction in earnings or the foregoing of
2an increase in earnings by an employee, as distinguished from
3noncontributory coverage or benefits which are paid entirely by
4the State of Illinois without reduction of the member's salary.
5    (g) "Department" means any department, institution, board,
6commission, officer, court or any agency of the State
7government receiving appropriations and having power to
8certify payrolls to the Comptroller authorizing payments of
9salary and wages against such appropriations as are made by the
10General Assembly from any State fund, or against trust funds
11held by the State Treasurer and includes boards of trustees of
12the retirement systems created by Articles 2, 14, 15, 16 and 18
13of the Illinois Pension Code. "Department" also includes the
14Illinois Comprehensive Health Insurance Board, the Board of
15Examiners established under the Illinois Public Accounting
16Act, and the Illinois Finance Authority.
17    (h) "Dependent", when the term is used in the context of
18the health and life plan, means a member's spouse and any child
19(1) from birth to age 26 including an adopted child, a child
20who lives with the member from the time of the placement for
21adoption until entry of an order of adoption, a stepchild or
22adjudicated child, or a child who lives with the member if such
23member is a court appointed guardian of the child or (2) age 19
24or over who has a mental or physical disability from a cause
25originating prior to the age of 19 (age 26 if enrolled as an
26adult child dependent). For the health plan only, the term

 

 

SB1924- 6 -LRB101 11021 RPS 56220 b

1"dependent" also includes (1) any person enrolled prior to the
2effective date of this Section who is dependent upon the member
3to the extent that the member may claim such person as a
4dependent for income tax deduction purposes and (2) any person
5who has received after June 30, 2000 an organ transplant and
6who is financially dependent upon the member and eligible to be
7claimed as a dependent for income tax purposes. A member
8requesting to cover any dependent must provide documentation as
9requested by the Department of Central Management Services and
10file with the Department any and all forms required by the
11Department.
12    (i) "Director" means the Director of the Illinois
13Department of Central Management Services.
14    (j) "Eligibility period" means the period of time a member
15has to elect enrollment in programs or to select benefits
16without regard to age, sex or health.
17    (k) "Employee" means and includes each officer or employee
18in the service of a department who (1) receives his
19compensation for service rendered to the department on a
20warrant issued pursuant to a payroll certified by a department
21or on a warrant or check issued and drawn by a department upon
22a trust, federal or other fund or on a warrant issued pursuant
23to a payroll certified by an elected or duly appointed officer
24of the State or who receives payment of the performance of
25personal services on a warrant issued pursuant to a payroll
26certified by a Department and drawn by the Comptroller upon the

 

 

SB1924- 7 -LRB101 11021 RPS 56220 b

1State Treasurer against appropriations made by the General
2Assembly from any fund or against trust funds held by the State
3Treasurer, and (2) is employed full-time or part-time in a
4position normally requiring actual performance of duty during
5not less than 1/2 of a normal work period, as established by
6the Director in cooperation with each department, except that
7persons elected by popular vote will be considered employees
8during the entire term for which they are elected regardless of
9hours devoted to the service of the State, and (3) except that
10"employee" does not include any person who is not eligible by
11reason of such person's employment to participate in one of the
12State retirement systems under Articles 2, 14, 15 (either the
13regular Article 15 system or the optional retirement program
14established under Section 15-158.2) or 18, or under paragraph
15(2), (3), or (5) of Section 16-106, of the Illinois Pension
16Code, but such term does include persons who are employed
17during the 6 month qualifying period under Article 14 of the
18Illinois Pension Code. Such term also includes any person who
19(1) after January 1, 1966, is receiving ordinary or accidental
20disability benefits under Articles 2, 14, 15 (including
21ordinary or accidental disability benefits under the optional
22retirement program established under Section 15-158.2),
23paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
24the Illinois Pension Code, for disability incurred after
25January 1, 1966, (2) receives total permanent or total
26temporary disability under the Workers' Compensation Act or

 

 

SB1924- 8 -LRB101 11021 RPS 56220 b

1Occupational Disease Act as a result of injuries sustained or
2illness contracted in the course of employment with the State
3of Illinois, or (3) is not otherwise covered under this Act and
4has retired as a participating member under Article 2 of the
5Illinois Pension Code but is ineligible for the retirement
6annuity under Section 2-119 of the Illinois Pension Code.
7However, a person who satisfies the criteria of the foregoing
8definition of "employee" except that such person is made
9ineligible to participate in the State Universities Retirement
10System by clause (4) of subsection (a) of Section 15-107 of the
11Illinois Pension Code is also an "employee" for the purposes of
12this Act. "Employee" also includes any person receiving or
13eligible for benefits under a sick pay plan established in
14accordance with Section 36 of the State Finance Act. "Employee"
15also includes (i) each officer or employee in the service of a
16qualified local government, including persons appointed as
17trustees of sanitary districts regardless of hours devoted to
18the service of the sanitary district, (ii) each employee in the
19service of a qualified rehabilitation facility, (iii) each
20full-time employee in the service of a qualified domestic
21violence shelter or service, and (iv) each full-time employee
22in the service of a qualified child advocacy center, as
23determined according to rules promulgated by the Director.
24    (l) "Member" means an employee, annuitant, retired
25employee or survivor. In the case of an annuitant or retired
26employee who first becomes an annuitant or retired employee on

 

 

SB1924- 9 -LRB101 11021 RPS 56220 b

1or after the effective date of this amendatory Act of the 97th
2General Assembly, the individual must meet the minimum vesting
3requirements of the applicable retirement system in order to be
4eligible for group insurance benefits under that system. In the
5case of a survivor who first becomes a survivor on or after the
6effective date of this amendatory Act of the 97th General
7Assembly, the deceased employee, annuitant, or retired
8employee upon whom the annuity is based must have been eligible
9to participate in the group insurance system under the
10applicable retirement system in order for the survivor to be
11eligible for group insurance benefits under that system.
12    (m) "Optional coverages or benefits" means those coverages
13or benefits available to the member on his or her voluntary
14election, and at his or her own expense.
15    (n) "Program" means the group life insurance, health
16benefits and other employee benefits designed and contracted
17for by the Director under this Act.
18    (o) "Health plan" means a health benefits program offered
19by the State of Illinois for persons eligible for the plan.
20    (p) "Retired employee" means any person who would be an
21annuitant as that term is defined herein but for the fact that
22such person retired prior to January 1, 1966. Such term also
23includes any person formerly employed by the University of
24Illinois in the Cooperative Extension Service who would be an
25annuitant but for the fact that such person was made ineligible
26to participate in the State Universities Retirement System by

 

 

SB1924- 10 -LRB101 11021 RPS 56220 b

1clause (4) of subsection (a) of Section 15-107 of the Illinois
2Pension Code.
3    (q) "Survivor" means a person receiving an annuity as a
4survivor of an employee or of an annuitant. "Survivor" also
5includes: (1) the surviving dependent of a person who satisfies
6the definition of "employee" except that such person is made
7ineligible to participate in the State Universities Retirement
8System by clause (4) of subsection (a) of Section 15-107 of the
9Illinois Pension Code; (2) the surviving dependent of any
10person formerly employed by the University of Illinois in the
11Cooperative Extension Service who would be an annuitant except
12for the fact that such person was made ineligible to
13participate in the State Universities Retirement System by
14clause (4) of subsection (a) of Section 15-107 of the Illinois
15Pension Code; and (3) the surviving dependent of a person who
16was an annuitant under this Act by virtue of receiving an
17alternative retirement cancellation payment under Section
1814-108.5 of the Illinois Pension Code.
19    (q-2) "SERS" means the State Employees' Retirement System
20of Illinois, created under Article 14 of the Illinois Pension
21Code.
22    (q-3) "SURS" means the State Universities Retirement
23System, created under Article 15 of the Illinois Pension Code.
24    (q-4) "TRS" means the Teachers' Retirement System of the
25State of Illinois, created under Article 16 of the Illinois
26Pension Code.

 

 

SB1924- 11 -LRB101 11021 RPS 56220 b

1    (q-5) (Blank).
2    (q-6) (Blank).
3    (q-7) (Blank).
4    (r) "Medical services" means the services provided within
5the scope of their licenses by practitioners in all categories
6licensed under the Medical Practice Act of 1987.
7    (s) "Unit of local government" means any county,
8municipality, township, school district (including a
9combination of school districts under the Intergovernmental
10Cooperation Act), special district or other unit, designated as
11a unit of local government by law, which exercises limited
12governmental powers or powers in respect to limited
13governmental subjects, any not-for-profit association with a
14membership that primarily includes townships and township
15officials, that has duties that include provision of research
16service, dissemination of information, and other acts for the
17purpose of improving township government, and that is funded
18wholly or partly in accordance with Section 85-15 of the
19Township Code; any not-for-profit corporation or association,
20with a membership consisting primarily of municipalities, that
21operates its own utility system, and provides research,
22training, dissemination of information, or other acts to
23promote cooperation between and among municipalities that
24provide utility services and for the advancement of the goals
25and purposes of its membership; the Southern Illinois
26Collegiate Common Market, which is a consortium of higher

 

 

SB1924- 12 -LRB101 11021 RPS 56220 b

1education institutions in Southern Illinois; the Illinois
2Association of Park Districts; and any hospital provider that
3is owned by a county that has 100 or fewer hospital beds and
4has not already joined the program. "Qualified local
5government" means a unit of local government approved by the
6Director and participating in a program created under
7subsection (i) of Section 10 of this Act.
8    (t) "Qualified rehabilitation facility" means any
9not-for-profit organization that is accredited by the
10Commission on Accreditation of Rehabilitation Facilities or
11certified by the Department of Human Services (as successor to
12the Department of Mental Health and Developmental
13Disabilities) to provide services to persons with disabilities
14and which receives funds from the State of Illinois for
15providing those services, approved by the Director and
16participating in a program created under subsection (j) of
17Section 10 of this Act.
18    (u) "Qualified domestic violence shelter or service" means
19any Illinois domestic violence shelter or service and its
20administrative offices funded by the Department of Human
21Services (as successor to the Illinois Department of Public
22Aid), approved by the Director and participating in a program
23created under subsection (k) of Section 10.
24    (v) "TRS benefit recipient" means a person who:
25        (1) is not a "member" as defined in this Section; and
26        (2) is receiving a monthly benefit or retirement

 

 

SB1924- 13 -LRB101 11021 RPS 56220 b

1    annuity under Article 16 of the Illinois Pension Code; and
2        (3) either (i) has at least 8 years of creditable
3    service under Article 16 of the Illinois Pension Code, or
4    (ii) was enrolled in the health insurance program offered
5    under that Article on January 1, 1996, or (iii) is the
6    survivor of a benefit recipient who had at least 8 years of
7    creditable service under Article 16 of the Illinois Pension
8    Code or was enrolled in the health insurance program
9    offered under that Article on the effective date of this
10    amendatory Act of 1995, or (iv) is a recipient or survivor
11    of a recipient of a disability benefit under Article 16 of
12    the Illinois Pension Code.
13    (w) "TRS dependent beneficiary" means a person who:
14        (1) is not a "member" or "dependent" as defined in this
15    Section; and
16        (2) is a TRS benefit recipient's: (A) spouse, (B)
17    dependent parent who is receiving at least half of his or
18    her support from the TRS benefit recipient, or (C) natural,
19    step, adjudicated, or adopted child who is (i) under age
20    26, (ii) was, on January 1, 1996, participating as a
21    dependent beneficiary in the health insurance program
22    offered under Article 16 of the Illinois Pension Code, or
23    (iii) age 19 or over who has a mental or physical
24    disability from a cause originating prior to the age of 19
25    (age 26 if enrolled as an adult child).
26    "TRS dependent beneficiary" does not include, as indicated

 

 

SB1924- 14 -LRB101 11021 RPS 56220 b

1under paragraph (2) of this subsection (w), a dependent of the
2survivor of a TRS benefit recipient who first becomes a
3dependent of a survivor of a TRS benefit recipient on or after
4the effective date of this amendatory Act of the 97th General
5Assembly unless that dependent would have been eligible for
6coverage as a dependent of the deceased TRS benefit recipient
7upon whom the survivor benefit is based.
8    (x) "Military leave" refers to individuals in basic
9training for reserves, special/advanced training, annual
10training, emergency call up, activation by the President of the
11United States, or any other training or duty in service to the
12United States Armed Forces.
13    (y) (Blank).
14    (z) "Community college benefit recipient" means a person
15who:
16        (1) is not a "member" as defined in this Section; and
17        (2) is receiving a monthly survivor's annuity or
18    retirement annuity under Article 15 of the Illinois Pension
19    Code; and
20        (3) either (i) was a full-time employee of a community
21    college district or an association of community college
22    boards created under the Public Community College Act
23    (other than an employee whose last employer under Article
24    15 of the Illinois Pension Code was a community college
25    district subject to Article VII of the Public Community
26    College Act) and was eligible to participate in a group

 

 

SB1924- 15 -LRB101 11021 RPS 56220 b

1    health benefit plan as an employee during the time of
2    employment with a community college district (other than a
3    community college district subject to Article VII of the
4    Public Community College Act) or an association of
5    community college boards, or (ii) is the survivor of a
6    person described in item (i).
7    (aa) "Community college dependent beneficiary" means a
8person who:
9        (1) is not a "member" or "dependent" as defined in this
10    Section; and
11        (2) is a community college benefit recipient's: (A)
12    spouse, (B) dependent parent who is receiving at least half
13    of his or her support from the community college benefit
14    recipient, or (C) natural, step, adjudicated, or adopted
15    child who is (i) under age 26, or (ii) age 19 or over and
16    has a mental or physical disability from a cause
17    originating prior to the age of 19 (age 26 if enrolled as
18    an adult child).
19    "Community college dependent beneficiary" does not
20include, as indicated under paragraph (2) of this subsection
21(aa), a dependent of the survivor of a community college
22benefit recipient who first becomes a dependent of a survivor
23of a community college benefit recipient on or after the
24effective date of this amendatory Act of the 97th General
25Assembly unless that dependent would have been eligible for
26coverage as a dependent of the deceased community college

 

 

SB1924- 16 -LRB101 11021 RPS 56220 b

1benefit recipient upon whom the survivor annuity is based.
2    (bb) "Qualified child advocacy center" means any Illinois
3child advocacy center and its administrative offices funded by
4the Department of Children and Family Services, as defined by
5the Children's Advocacy Center Act (55 ILCS 80/), approved by
6the Director and participating in a program created under
7subsection (n) of Section 10.
8    (cc) "Placement for adoption" means the assumption and
9retention by a member of a legal obligation for total or
10partial support of a child in anticipation of adoption of the
11child. The child's placement with the member terminates upon
12the termination of such legal obligation.
13(Source: P.A. 99-143, eff. 7-27-15; 100-355, eff. 1-1-18;
14100-587, eff. 6-4-18.)
 
15    (5 ILCS 375/10)  (from Ch. 127, par. 530)
16    Sec. 10. Contributions by the State and members.
17    (a) The State shall pay the cost of basic non-contributory
18group life insurance and, subject to member paid contributions
19set by the Department or required by this Section and except as
20provided in this Section, the basic program of group health
21benefits on each eligible member, except a member, not
22otherwise covered by this Act, who has retired as a
23participating member under Article 2 of the Illinois Pension
24Code but is ineligible for the retirement annuity under Section
252-119 of the Illinois Pension Code, and part of each eligible

 

 

SB1924- 17 -LRB101 11021 RPS 56220 b

1member's and retired member's premiums for health insurance
2coverage for enrolled dependents as provided by Section 9. The
3State shall pay the cost of the basic program of group health
4benefits only after benefits are reduced by the amount of
5benefits covered by Medicare for all members and dependents who
6are eligible for benefits under Social Security or the Railroad
7Retirement system or who had sufficient Medicare-covered
8government employment, except that such reduction in benefits
9shall apply only to those members and dependents who (1) first
10become eligible for such Medicare coverage on or after July 1,
111992; or (2) are Medicare-eligible members or dependents of a
12local government unit which began participation in the program
13on or after July 1, 1992; or (3) remain eligible for, but no
14longer receive Medicare coverage which they had been receiving
15on or after July 1, 1992. The Department may determine the
16aggregate level of the State's contribution on the basis of
17actual cost of medical services adjusted for age, sex or
18geographic or other demographic characteristics which affect
19the costs of such programs.
20    The cost of participation in the basic program of group
21health benefits for the dependent or survivor of a living or
22deceased retired employee who was formerly employed by the
23University of Illinois in the Cooperative Extension Service and
24would be an annuitant but for the fact that he or she was made
25ineligible to participate in the State Universities Retirement
26System by clause (4) of subsection (a) of Section 15-107 of the

 

 

SB1924- 18 -LRB101 11021 RPS 56220 b

1Illinois Pension Code shall not be greater than the cost of
2participation that would otherwise apply to that dependent or
3survivor if he or she were the dependent or survivor of an
4annuitant under the State Universities Retirement System.
5    (a-1) (Blank).
6    (a-2) (Blank).
7    (a-3) (Blank).
8    (a-4) (Blank).
9    (a-5) (Blank).
10    (a-6) (Blank).
11    (a-7) (Blank).
12    (a-8) Any annuitant, survivor, or retired employee may
13waive or terminate coverage in the program of group health
14benefits. Any such annuitant, survivor, or retired employee who
15has waived or terminated coverage may enroll or re-enroll in
16the program of group health benefits only during the annual
17benefit choice period, as determined by the Director; except
18that in the event of termination of coverage due to nonpayment
19of premiums, the annuitant, survivor, or retired employee may
20not re-enroll in the program.
21    (a-8.5) Beginning on the effective date of this amendatory
22Act of the 97th General Assembly, the Director of Central
23Management Services shall, on an annual basis, determine the
24amount that the State shall contribute toward the basic program
25of group health benefits on behalf of annuitants (including
26individuals who (i) participated in the General Assembly

 

 

SB1924- 19 -LRB101 11021 RPS 56220 b

1Retirement System, the State Employees' Retirement System of
2Illinois, the State Universities Retirement System, the
3Teachers' Retirement System of the State of Illinois, or the
4Judges Retirement System of Illinois and (ii) qualify as
5annuitants under subsection (b) of Section 3 of this Act),
6survivors (including individuals who (i) receive an annuity as
7a survivor of an individual who participated in the General
8Assembly Retirement System, the State Employees' Retirement
9System of Illinois, the State Universities Retirement System,
10the Teachers' Retirement System of the State of Illinois, or
11the Judges Retirement System of Illinois and (ii) qualify as
12survivors under subsection (q) of Section 3 of this Act), and
13retired employees (as defined in subsection (p) of Section 3 of
14this Act). The remainder of the cost of coverage for each
15annuitant, survivor, or retired employee, as determined by the
16Director of Central Management Services, shall be the
17responsibility of that annuitant, survivor, or retired
18employee.
19    Contributions required of annuitants, survivors, and
20retired employees shall be the same for all retirement systems
21and shall also be based on whether an individual has made an
22election under Section 15-135.1 of the Illinois Pension Code.
23Contributions may be based on annuitants', survivors', or
24retired employees' Medicare eligibility, but may not be based
25on Social Security eligibility.
26    (a-9) No later than May 1 of each calendar year, the

 

 

SB1924- 20 -LRB101 11021 RPS 56220 b

1Director of Central Management Services shall certify in
2writing to the Executive Secretary of the State Employees'
3Retirement System of Illinois the amounts of the Medicare
4supplement health care premiums and the amounts of the health
5care premiums for all other retirees who are not Medicare
6eligible.
7    A separate calculation of the premiums based upon the
8actual cost of each health care plan shall be so certified.
9    The Director of Central Management Services shall provide
10to the Executive Secretary of the State Employees' Retirement
11System of Illinois such information, statistics, and other data
12as he or she may require to review the premium amounts
13certified by the Director of Central Management Services.
14    The Department of Central Management Services, or any
15successor agency designated to procure healthcare contracts
16pursuant to this Act, is authorized to establish funds,
17separate accounts provided by any bank or banks as defined by
18the Illinois Banking Act, or separate accounts provided by any
19savings and loan association or associations as defined by the
20Illinois Savings and Loan Act of 1985 to be held by the
21Director, outside the State treasury, for the purpose of
22receiving the transfer of moneys from the Local Government
23Health Insurance Reserve Fund. The Department may promulgate
24rules further defining the methodology for the transfers. Any
25interest earned by moneys in the funds or accounts shall inure
26to the Local Government Health Insurance Reserve Fund. The

 

 

SB1924- 21 -LRB101 11021 RPS 56220 b

1transferred moneys, and interest accrued thereon, shall be used
2exclusively for transfers to administrative service
3organizations or their financial institutions for payments of
4claims to claimants and providers under the self-insurance
5health plan. The transferred moneys, and interest accrued
6thereon, shall not be used for any other purpose including, but
7not limited to, reimbursement of administration fees due the
8administrative service organization pursuant to its contract
9or contracts with the Department.
10    (a-10) To the extent that participation, benefits, or
11premiums under this Act are based on a person's service credit
12under an Article of the Illinois Pension Code, service credit
13terminated in exchange for an accelerated pension benefit
14payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
15Code shall be included in determining a person's service credit
16for the purposes of this Act.
17    (a-15) For purposes of determining State contributions
18under this Section, service established under a Tier 3 plan
19under Article 2 of the Illinois Pension Code shall be included
20in determining an employee's creditable service. Any credit
21terminated as part of a transfer of contributions to a Tier 3
22plan under Article 2 of the Illinois Pension Code shall also be
23included in determining an employee's creditable service.
24    (b) State employees who become eligible for this program on
25or after January 1, 1980 in positions normally requiring actual
26performance of duty not less than 1/2 of a normal work period

 

 

SB1924- 22 -LRB101 11021 RPS 56220 b

1but not equal to that of a normal work period, shall be given
2the option of participating in the available program. If the
3employee elects coverage, the State shall contribute on behalf
4of such employee to the cost of the employee's benefit and any
5applicable dependent supplement, that sum which bears the same
6percentage as that percentage of time the employee regularly
7works when compared to normal work period.
8    (c) The basic non-contributory coverage from the basic
9program of group health benefits shall be continued for each
10employee not in pay status or on active service by reason of
11(1) leave of absence due to illness or injury, (2) authorized
12educational leave of absence or sabbatical leave, or (3)
13military leave. This coverage shall continue until expiration
14of authorized leave and return to active service, but not to
15exceed 24 months for leaves under item (1) or (2). This
1624-month limitation and the requirement of returning to active
17service shall not apply to persons receiving ordinary or
18accidental disability benefits or retirement benefits through
19the appropriate State retirement system or benefits under the
20Workers' Compensation or Occupational Disease Act.
21    (d) The basic group life insurance coverage shall continue,
22with full State contribution, where such person is (1) absent
23from active service by reason of disability arising from any
24cause other than self-inflicted, (2) on authorized educational
25leave of absence or sabbatical leave, or (3) on military leave.
26    (e) Where the person is in non-pay status for a period in

 

 

SB1924- 23 -LRB101 11021 RPS 56220 b

1excess of 30 days or on leave of absence, other than by reason
2of disability, educational or sabbatical leave, or military
3leave, such person may continue coverage only by making
4personal payment equal to the amount normally contributed by
5the State on such person's behalf. Such payments and coverage
6may be continued: (1) until such time as the person returns to
7a status eligible for coverage at State expense, but not to
8exceed 24 months or (2) until such person's employment or
9annuitant status with the State is terminated (exclusive of any
10additional service imposed pursuant to law).
11    (f) The Department shall establish by rule the extent to
12which other employee benefits will continue for persons in
13non-pay status or who are not in active service.
14    (g) The State shall not pay the cost of the basic
15non-contributory group life insurance, program of health
16benefits and other employee benefits for members who are
17survivors as defined by paragraphs (1) and (2) of subsection
18(q) of Section 3 of this Act. The costs of benefits for these
19survivors shall be paid by the survivors or by the University
20of Illinois Cooperative Extension Service, or any combination
21thereof. However, the State shall pay the amount of the
22reduction in the cost of participation, if any, resulting from
23the amendment to subsection (a) made by this amendatory Act of
24the 91st General Assembly.
25    (h) Those persons occupying positions with any department
26as a result of emergency appointments pursuant to Section 8b.8

 

 

SB1924- 24 -LRB101 11021 RPS 56220 b

1of the Personnel Code who are not considered employees under
2this Act shall be given the option of participating in the
3programs of group life insurance, health benefits and other
4employee benefits. Such persons electing coverage may
5participate only by making payment equal to the amount normally
6contributed by the State for similarly situated employees. Such
7amounts shall be determined by the Director. Such payments and
8coverage may be continued until such time as the person becomes
9an employee pursuant to this Act or such person's appointment
10is terminated.
11    (i) Any unit of local government within the State of
12Illinois may apply to the Director to have its employees,
13annuitants, and their dependents provided group health
14coverage under this Act on a non-insured basis. To participate,
15a unit of local government must agree to enroll all of its
16employees, who may select coverage under either the State group
17health benefits plan or a health maintenance organization that
18has contracted with the State to be available as a health care
19provider for employees as defined in this Act. A unit of local
20government must remit the entire cost of providing coverage
21under the State group health benefits plan or, for coverage
22under a health maintenance organization, an amount determined
23by the Director based on an analysis of the sex, age,
24geographic location, or other relevant demographic variables
25for its employees, except that the unit of local government
26shall not be required to enroll those of its employees who are

 

 

SB1924- 25 -LRB101 11021 RPS 56220 b

1covered spouses or dependents under this plan or another group
2policy or plan providing health benefits as long as (1) an
3appropriate official from the unit of local government attests
4that each employee not enrolled is a covered spouse or
5dependent under this plan or another group policy or plan, and
6(2) at least 50% of the employees are enrolled and the unit of
7local government remits the entire cost of providing coverage
8to those employees, except that a participating school district
9must have enrolled at least 50% of its full-time employees who
10have not waived coverage under the district's group health plan
11by participating in a component of the district's cafeteria
12plan. A participating school district is not required to enroll
13a full-time employee who has waived coverage under the
14district's health plan, provided that an appropriate official
15from the participating school district attests that the
16full-time employee has waived coverage by participating in a
17component of the district's cafeteria plan. For the purposes of
18this subsection, "participating school district" includes a
19unit of local government whose primary purpose is education as
20defined by the Department's rules.
21    Employees of a participating unit of local government who
22are not enrolled due to coverage under another group health
23policy or plan may enroll in the event of a qualifying change
24in status, special enrollment, special circumstance as defined
25by the Director, or during the annual Benefit Choice Period. A
26participating unit of local government may also elect to cover

 

 

SB1924- 26 -LRB101 11021 RPS 56220 b

1its annuitants. Dependent coverage shall be offered on an
2optional basis, with the costs paid by the unit of local
3government, its employees, or some combination of the two as
4determined by the unit of local government. The unit of local
5government shall be responsible for timely collection and
6transmission of dependent premiums.
7    The Director shall annually determine monthly rates of
8payment, subject to the following constraints:
9        (1) In the first year of coverage, the rates shall be
10    equal to the amount normally charged to State employees for
11    elected optional coverages or for enrolled dependents
12    coverages or other contributory coverages, or contributed
13    by the State for basic insurance coverages on behalf of its
14    employees, adjusted for differences between State
15    employees and employees of the local government in age,
16    sex, geographic location or other relevant demographic
17    variables, plus an amount sufficient to pay for the
18    additional administrative costs of providing coverage to
19    employees of the unit of local government and their
20    dependents.
21        (2) In subsequent years, a further adjustment shall be
22    made to reflect the actual prior years' claims experience
23    of the employees of the unit of local government.
24    In the case of coverage of local government employees under
25a health maintenance organization, the Director shall annually
26determine for each participating unit of local government the

 

 

SB1924- 27 -LRB101 11021 RPS 56220 b

1maximum monthly amount the unit may contribute toward that
2coverage, based on an analysis of (i) the age, sex, geographic
3location, and other relevant demographic variables of the
4unit's employees and (ii) the cost to cover those employees
5under the State group health benefits plan. The Director may
6similarly determine the maximum monthly amount each unit of
7local government may contribute toward coverage of its
8employees' dependents under a health maintenance organization.
9    Monthly payments by the unit of local government or its
10employees for group health benefits plan or health maintenance
11organization coverage shall be deposited in the Local
12Government Health Insurance Reserve Fund.
13    The Local Government Health Insurance Reserve Fund is
14hereby created as a nonappropriated trust fund to be held
15outside the State Treasury, with the State Treasurer as
16custodian. The Local Government Health Insurance Reserve Fund
17shall be a continuing fund not subject to fiscal year
18limitations. The Local Government Health Insurance Reserve
19Fund is not subject to administrative charges or charge-backs,
20including but not limited to those authorized under Section 8h
21of the State Finance Act. All revenues arising from the
22administration of the health benefits program established
23under this Section shall be deposited into the Local Government
24Health Insurance Reserve Fund. Any interest earned on moneys in
25the Local Government Health Insurance Reserve Fund shall be
26deposited into the Fund. All expenditures from this Fund shall

 

 

SB1924- 28 -LRB101 11021 RPS 56220 b

1be used for payments for health care benefits for local
2government and rehabilitation facility employees, annuitants,
3and dependents, and to reimburse the Department or its
4administrative service organization for all expenses incurred
5in the administration of benefits. No other State funds may be
6used for these purposes.
7    A local government employer's participation or desire to
8participate in a program created under this subsection shall
9not limit that employer's duty to bargain with the
10representative of any collective bargaining unit of its
11employees.
12    (j) Any rehabilitation facility within the State of
13Illinois may apply to the Director to have its employees,
14annuitants, and their eligible dependents provided group
15health coverage under this Act on a non-insured basis. To
16participate, a rehabilitation facility must agree to enroll all
17of its employees and remit the entire cost of providing such
18coverage for its employees, except that the rehabilitation
19facility shall not be required to enroll those of its employees
20who are covered spouses or dependents under this plan or
21another group policy or plan providing health benefits as long
22as (1) an appropriate official from the rehabilitation facility
23attests that each employee not enrolled is a covered spouse or
24dependent under this plan or another group policy or plan, and
25(2) at least 50% of the employees are enrolled and the
26rehabilitation facility remits the entire cost of providing

 

 

SB1924- 29 -LRB101 11021 RPS 56220 b

1coverage to those employees. Employees of a participating
2rehabilitation facility who are not enrolled due to coverage
3under another group health policy or plan may enroll in the
4event of a qualifying change in status, special enrollment,
5special circumstance as defined by the Director, or during the
6annual Benefit Choice Period. A participating rehabilitation
7facility may also elect to cover its annuitants. Dependent
8coverage shall be offered on an optional basis, with the costs
9paid by the rehabilitation facility, its employees, or some
10combination of the 2 as determined by the rehabilitation
11facility. The rehabilitation facility shall be responsible for
12timely collection and transmission of dependent premiums.
13    The Director shall annually determine quarterly rates of
14payment, subject to the following constraints:
15        (1) In the first year of coverage, the rates shall be
16    equal to the amount normally charged to State employees for
17    elected optional coverages or for enrolled dependents
18    coverages or other contributory coverages on behalf of its
19    employees, adjusted for differences between State
20    employees and employees of the rehabilitation facility in
21    age, sex, geographic location or other relevant
22    demographic variables, plus an amount sufficient to pay for
23    the additional administrative costs of providing coverage
24    to employees of the rehabilitation facility and their
25    dependents.
26        (2) In subsequent years, a further adjustment shall be

 

 

SB1924- 30 -LRB101 11021 RPS 56220 b

1    made to reflect the actual prior years' claims experience
2    of the employees of the rehabilitation facility.
3    Monthly payments by the rehabilitation facility or its
4employees for group health benefits shall be deposited in the
5Local Government Health Insurance Reserve Fund.
6    (k) Any domestic violence shelter or service within the
7State of Illinois may apply to the Director to have its
8employees, annuitants, and their dependents provided group
9health coverage under this Act on a non-insured basis. To
10participate, a domestic violence shelter or service must agree
11to enroll all of its employees and pay the entire cost of
12providing such coverage for its employees. The domestic
13violence shelter shall not be required to enroll those of its
14employees who are covered spouses or dependents under this plan
15or another group policy or plan providing health benefits as
16long as (1) an appropriate official from the domestic violence
17shelter attests that each employee not enrolled is a covered
18spouse or dependent under this plan or another group policy or
19plan and (2) at least 50% of the employees are enrolled and the
20domestic violence shelter remits the entire cost of providing
21coverage to those employees. Employees of a participating
22domestic violence shelter who are not enrolled due to coverage
23under another group health policy or plan may enroll in the
24event of a qualifying change in status, special enrollment, or
25special circumstance as defined by the Director or during the
26annual Benefit Choice Period. A participating domestic

 

 

SB1924- 31 -LRB101 11021 RPS 56220 b

1violence shelter may also elect to cover its annuitants.
2Dependent coverage shall be offered on an optional basis, with
3employees, or some combination of the 2 as determined by the
4domestic violence shelter or service. The domestic violence
5shelter or service shall be responsible for timely collection
6and transmission of dependent premiums.
7    The Director shall annually determine rates of payment,
8subject to the following constraints:
9        (1) In the first year of coverage, the rates shall be
10    equal to the amount normally charged to State employees for
11    elected optional coverages or for enrolled dependents
12    coverages or other contributory coverages on behalf of its
13    employees, adjusted for differences between State
14    employees and employees of the domestic violence shelter or
15    service in age, sex, geographic location or other relevant
16    demographic variables, plus an amount sufficient to pay for
17    the additional administrative costs of providing coverage
18    to employees of the domestic violence shelter or service
19    and their dependents.
20        (2) In subsequent years, a further adjustment shall be
21    made to reflect the actual prior years' claims experience
22    of the employees of the domestic violence shelter or
23    service.
24    Monthly payments by the domestic violence shelter or
25service or its employees for group health insurance shall be
26deposited in the Local Government Health Insurance Reserve

 

 

SB1924- 32 -LRB101 11021 RPS 56220 b

1Fund.
2    (l) A public community college or entity organized pursuant
3to the Public Community College Act may apply to the Director
4initially to have only annuitants not covered prior to July 1,
51992 by the district's health plan provided health coverage
6under this Act on a non-insured basis. The community college
7must execute a 2-year contract to participate in the Local
8Government Health Plan. Any annuitant may enroll in the event
9of a qualifying change in status, special enrollment, special
10circumstance as defined by the Director, or during the annual
11Benefit Choice Period.
12    The Director shall annually determine monthly rates of
13payment subject to the following constraints: for those
14community colleges with annuitants only enrolled, first year
15rates shall be equal to the average cost to cover claims for a
16State member adjusted for demographics, Medicare
17participation, and other factors; and in the second year, a
18further adjustment of rates shall be made to reflect the actual
19first year's claims experience of the covered annuitants.
20    (l-5) The provisions of subsection (l) become inoperative
21on July 1, 1999.
22    (m) The Director shall adopt any rules deemed necessary for
23implementation of this amendatory Act of 1989 (Public Act
2486-978).
25    (n) Any child advocacy center within the State of Illinois
26may apply to the Director to have its employees, annuitants,

 

 

SB1924- 33 -LRB101 11021 RPS 56220 b

1and their dependents provided group health coverage under this
2Act on a non-insured basis. To participate, a child advocacy
3center must agree to enroll all of its employees and pay the
4entire cost of providing coverage for its employees. The child
5advocacy center shall not be required to enroll those of its
6employees who are covered spouses or dependents under this plan
7or another group policy or plan providing health benefits as
8long as (1) an appropriate official from the child advocacy
9center attests that each employee not enrolled is a covered
10spouse or dependent under this plan or another group policy or
11plan and (2) at least 50% of the employees are enrolled and the
12child advocacy center remits the entire cost of providing
13coverage to those employees. Employees of a participating child
14advocacy center who are not enrolled due to coverage under
15another group health policy or plan may enroll in the event of
16a qualifying change in status, special enrollment, or special
17circumstance as defined by the Director or during the annual
18Benefit Choice Period. A participating child advocacy center
19may also elect to cover its annuitants. Dependent coverage
20shall be offered on an optional basis, with the costs paid by
21the child advocacy center, its employees, or some combination
22of the 2 as determined by the child advocacy center. The child
23advocacy center shall be responsible for timely collection and
24transmission of dependent premiums.
25    The Director shall annually determine rates of payment,
26subject to the following constraints:

 

 

SB1924- 34 -LRB101 11021 RPS 56220 b

1        (1) In the first year of coverage, the rates shall be
2    equal to the amount normally charged to State employees for
3    elected optional coverages or for enrolled dependents
4    coverages or other contributory coverages on behalf of its
5    employees, adjusted for differences between State
6    employees and employees of the child advocacy center in
7    age, sex, geographic location, or other relevant
8    demographic variables, plus an amount sufficient to pay for
9    the additional administrative costs of providing coverage
10    to employees of the child advocacy center and their
11    dependents.
12        (2) In subsequent years, a further adjustment shall be
13    made to reflect the actual prior years' claims experience
14    of the employees of the child advocacy center.
15    Monthly payments by the child advocacy center or its
16employees for group health insurance shall be deposited into
17the Local Government Health Insurance Reserve Fund.
18(Source: P.A. 100-587, eff. 6-4-18.)
 
19    Section 10. The Illinois Pension Code is amended by
20changing Sections 2-105.1, 2-117, 2-162, 20-121, 20-123,
2120-124, and 20-125 and by adding Sections 2-105.3 and 2-165.5
22as follows:
 
23    (40 ILCS 5/2-105.3 new)
24    Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier

 

 

SB1924- 35 -LRB101 11021 RPS 56220 b

13 participant.
2    "Tier 1 participant": A participant who first became a
3participant before January 1, 2011.
4    In the case of a Tier 1 participant who elects to
5participate in the Tier 3 plan under Section 2-165.5 of this
6Code, that participant shall be deemed a Tier 1 participant
7only with respect to service performed or established before
8the effective date of that election.
9    "Tier 2 participant": A participant who first became a
10participant on or after January 1, 2011.
11    In the case of a Tier 2 participant who elects to
12participate in the Tier 3 plan under Section 2-165.5 of this
13Code, that Tier 2 participant shall be deemed a Tier 2
14participant only with respect to service performed or
15established before the effective date of that election.
16    "Tier 3 participant": A participant who becomes a
17participant on or after July 1, 2020; or a Tier 1 or Tier 2
18participant who elects to participate in the Tier 3 plan under
19Section 2-165.5 of this Code, but only with respect to service
20performed on or after the effective date of that election.
 
21    (40 ILCS 5/2-117)  (from Ch. 108 1/2, par. 2-117)
22    Sec. 2-117. Participants - Election not to participate.
23    (a) Except as provided in subsection (c), every Every
24person who was a member on November 1, 1947, or in military
25service on such date, is subject to the provisions of this

 

 

SB1924- 36 -LRB101 11021 RPS 56220 b

1system beginning upon such date, unless prior to such date he
2or she filed with the board a written notice of election not to
3participate.
4    Every person who becomes a member after November 1, 1947,
5and who is then not a participant becomes a participant
6beginning upon the date of becoming a member unless, within 24
7months from that date, he or she has filed with the board a
8written notice of election not to participate.
9    (b) A member who has filed notice of an election not to
10participate (and a former member who has not yet begun to
11receive a retirement annuity under this Article) may become a
12participant with respect to the period for which the member
13elected not to participate upon filing with the board, before
14April 1, 1993, a written rescission of the election not to
15participate. Upon contributing an amount equal to the
16contributions he or she would have made as a participant from
17November 1, 1947, or the date of becoming a member, whichever
18is later, to the date of becoming a participant, with interest
19at the rate of 4% per annum until the contributions are paid,
20the participant shall receive credit for service as a member
21prior to the date of the rescission, both before and after
22November 1, 1947. The required contributions shall be made
23before commencement of the retirement annuity; otherwise no
24credit for service prior to the date of participation shall be
25granted.
26    (c) Notwithstanding any other provision of this Article, an

 

 

SB1924- 37 -LRB101 11021 RPS 56220 b

1active participant may terminate his or her participation in
2this System (including active participation in the Tier 3 plan,
3if applicable) by notifying the System in writing. An active
4participant terminating participation in this System under
5this subsection shall be entitled to a refund of his or her
6contributions (other than contributions to the Tier 3 plan
7under Section 2-165.5) minus the benefits received prior to the
8termination of participation.
9(Source: P.A. 86-273; 87-1265.)
 
10    (40 ILCS 5/2-162)
11    (Text of Section WITHOUT the changes made by P.A. 98-599,
12which has been held unconstitutional)
13    Sec. 2-162. Application and expiration of new benefit
14increases.
15    (a) As used in this Section, "new benefit increase" means
16an increase in the amount of any benefit provided under this
17Article, or an expansion of the conditions of eligibility for
18any benefit under this Article, that results from an amendment
19to this Code that takes effect after the effective date of this
20amendatory Act of the 94th General Assembly. "New benefit
21increase", however, does not include any benefit increase
22resulting from the changes made to this Article by this
23amendatory Act of the 101st General Assembly.
24    (b) Notwithstanding any other provision of this Code or any
25subsequent amendment to this Code, every new benefit increase

 

 

SB1924- 38 -LRB101 11021 RPS 56220 b

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

 

 

SB1924- 39 -LRB101 11021 RPS 56220 b

1under subsection (c). This does not prevent the General
2Assembly from extending or re-creating a new benefit increase
3by law.
4    (e) Except as otherwise provided in the language creating
5the new benefit increase, a new benefit increase that expires
6under this Section continues to apply to persons who applied
7and qualified for the affected benefit while the new benefit
8increase was in effect and to the affected beneficiaries and
9alternate payees of such persons, but does not apply to any
10other person, including without limitation a person who
11continues in service after the expiration date and did not
12apply and qualify for the affected benefit while the new
13benefit increase was in effect.
14(Source: P.A. 94-4, eff. 6-1-05.)
 
15    (40 ILCS 5/2-165.5 new)
16    Sec. 2-165.5. Tier 3 plan.
17    (a) By July 1, 2020, the System shall prepare and implement
18a Tier 3 plan. The Tier 3 plan developed under this Section
19shall be a plan that aggregates State and employee
20contributions in individual participant accounts which, after
21meeting any other requirements, are used for payouts after
22retirement in accordance with this Section and any other
23applicable laws.
24    As used in this Section, "defined benefit plan" means the
25retirement plan available under this Article to Tier 1 or Tier

 

 

SB1924- 40 -LRB101 11021 RPS 56220 b

12 participants who have not made the election authorized under
2this Section.
3        (1) All persons who begin to participate in this System
4    on or after July 1, 2020 shall participate in the Tier 3
5    plan rather than the defined benefit plan.
6        (2) A participant in the Tier 3 plan shall pay
7    participant contributions at a rate determined by the
8    participant, but not less than 3% of salary and not more
9    than a percentage of salary determined by the Board in
10    accordance with the requirements of State and federal law.
11        (3) State contributions shall be paid into the accounts
12    of all participants in the Tier 3 plan at a uniform rate,
13    expressed as a percentage of salary and determined for each
14    year. This rate shall be no higher than 7.6% of salary and
15    shall be no lower than 3% of salary. The State shall adjust
16    this rate annually.
17        (4) The Tier 3 plan shall require 5 years of
18    participation in the Tier 3 plan before vesting in State
19    contributions. If the participant fails to vest in them,
20    the State contributions, and the earnings thereon, shall be
21    forfeited.
22        (5) The Tier 3 plan shall provide a variety of options
23    for investments. These options shall include investments
24    handled by the Illinois State Board of Investment as well
25    as private sector investment options.
26        (6) The Tier 3 plan shall provide a variety of options

 

 

SB1924- 41 -LRB101 11021 RPS 56220 b

1    for payouts to participants in the Tier 3 plan who are no
2    longer active in the System and their survivors.
3        (7) To the extent authorized under federal law and as
4    authorized by the System, the plan shall allow former
5    participants in the plan to transfer or roll over
6    participant and vested State contributions, and the
7    earnings thereon, from the Tier 3 plan into other qualified
8    retirement plans.
9        (8) The System shall reduce the participant
10    contributions credited to the participant's Tier 3 plan
11    account by an amount determined by the System to cover the
12    cost of offering these benefits and any applicable
13    administrative fees.
14    (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
15participant of this System may elect, in writing, to cease
16accruing benefits in the defined benefit plan and begin
17accruing benefits for future service in the Tier 3 plan. The
18election to participate in the Tier 3 plan is voluntary and
19irrevocable.
20        (1) Service credit under the Tier 3 plan may be used
21    for determining retirement eligibility under the defined
22    benefit plan.
23        (2) The System shall make a good faith effort to
24    contact all active Tier 1 and Tier 2 participants who are
25    eligible to participate in the Tier 3 plan. The System
26    shall mail information describing the option to join the

 

 

SB1924- 42 -LRB101 11021 RPS 56220 b

1    Tier 3 plan to each of these participants to his or her
2    last known address on file with the System. If the
3    participant is not responsive to other means of contact, it
4    is sufficient for the System to publish the details of the
5    option on its website.
6        (3) Upon request for further information describing
7    the option, the System shall provide participants with
8    information from the System before exercising the option to
9    join the plan, including information on the impact to their
10    benefits and service. The individual consultation shall
11    include projections of the participant's defined benefits
12    at retirement or earlier termination of service and the
13    value of the participant's account at retirement or earlier
14    termination of service. The System shall not provide advice
15    or counseling with respect to whether the participant
16    should exercise the option. The System shall inform Tier 1
17    and Tier 2 participants who are eligible to participate in
18    the Tier 3 plan that they may also wish to obtain
19    information and counsel relating to their option from any
20    other available source, including but not limited to
21    private counsel and financial advisors.
22    (b-5) A Tier 1 or Tier 2 participant who elects to
23participate in the Tier 3 plan may irrevocably elect to
24terminate all participation in the defined benefit plan. Upon
25that election, the System shall transfer to the participant's
26individual account an amount equal to the amount of

 

 

SB1924- 43 -LRB101 11021 RPS 56220 b

1contribution refund that the participant would be eligible to
2receive if the member terminated employment on that date and
3elected a refund of contributions, including the prescribed
4rate of interest for the respective years. The System shall
5make the transfer as a tax-free transfer in accordance with
6Internal Revenue Service guidelines, for purposes of funding
7the amount credited to the participant's individual account.
8    (c) In no event shall the System, its staff, its authorized
9representatives, or the Board be liable for any information
10given to a participant under this Section. The System may
11coordinate with the Illinois Department of Central Management
12Services and other retirement systems administering a Tier 3
13plan in accordance with this amendatory Act of the 101st
14General Assembly to provide information concerning the impact
15of the Tier 3 plan set forth in this Section.
16    (d) Notwithstanding any other provision of this Section, no
17person shall begin participating in the Tier 3 plan until it
18has attained qualified plan status and received all necessary
19approvals from the U.S. Internal Revenue Service.
20    (e) The System shall report on its progress under this
21Section, including the available details of the Tier 3 plan and
22the System's plans for informing eligible Tier 1 and Tier 2
23participants about the plan, to the Governor and the General
24Assembly on or before January 15, 2020.
25    (f) The Illinois State Board of Investment shall be the
26plan sponsor for the Tier 3 plan established under this

 

 

SB1924- 44 -LRB101 11021 RPS 56220 b

1Section.
2    (g) The intent of this amendatory Act of the 101st General
3Assembly is to ensure that the State's normal cost of
4participation in the Tier 3 plan is similar, and if possible
5equal, to the State's normal cost of participation in the
6defined benefit plan, unless a lower State's normal cost is
7necessary to ensure cost neutrality.
 
8    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 20-121. Calculation of proportional retirement
12annuities.
13    (a) Upon retirement of the employee, a proportional
14retirement annuity shall be computed by each participating
15system in which pension credit has been established on the
16basis of pension credits under each system. The computation
17shall be in accordance with the formula or method prescribed by
18each participating system which is in effect at the date of the
19employee's latest withdrawal from service covered by any of the
20systems in which he has pension credits which he elects to have
21considered under this Article. However, the amount of any
22retirement annuity payable under the self-managed plan
23established under Section 15-158.2 of this Code depends solely
24on the value of the participant's vested account balances and
25is not subject to any proportional adjustment under this

 

 

SB1924- 45 -LRB101 11021 RPS 56220 b

1Section.
2    (a-5) For persons who participate in a Tier 3 plan
3established under Article 2 of this Code to whom the provisions
4of this Article apply, the pension credits established under
5the Tier 3 plan may be considered in determining eligibility
6for or the amount of the defined benefit retirement annuity
7that is payable by any other participating system, but pension
8credits established in any other system shall not result in any
9right to or increase in the value of a retirement annuity under
10the Tier 3 plan, which depends solely on the options chosen and
11the value of the participant's vested account balances and is
12not subject to any proportional adjustment under this Section.
13    (b) Combined pension credit under all retirement systems
14subject to this Article shall be considered in determining
15whether the minimum qualification has been met and the formula
16or method of computation which shall be applied, except as may
17be otherwise provided with respect to vesting in State or
18employer contributions in a Tier 3 plan. If a system has a
19step-rate formula for calculation of the retirement annuity,
20pension credits covering previous service which have been
21established under another system shall be considered in
22determining which range or ranges of the step-rate formula are
23to be applicable to the employee.
24    (c) Interest on pension credit shall continue to accumulate
25in accordance with the provisions of the law governing the
26retirement system in which the same has been established during

 

 

SB1924- 46 -LRB101 11021 RPS 56220 b

1the time an employee is in the service of another employer, on
2the assumption such employee, for interest purposes for pension
3credit, is continuing in the service covered by such retirement
4system.
5(Source: P.A. 91-887, eff. 7-6-00.)
 
6    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
7    (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9    Sec. 20-123. Survivor's annuity. The provisions governing
10a retirement annuity shall be applicable to a survivor's
11annuity. Appropriate credits shall be established for
12survivor's annuity purposes in those participating systems
13which provide survivor's annuities, according to the same
14conditions and subject to the same limitations and restrictions
15herein prescribed for a retirement annuity. If a participating
16system has no survivor's annuity benefit, or if the survivor's
17annuity benefit under that system is waived, pension credit
18established in that system shall not be considered in
19determining eligibility for or the amount of the survivor's
20annuity which may be payable by any other participating system.
21    For persons who participate in the self-managed plan
22established under Section 15-158.2 or the portable benefit
23package established under Section 15-136.4, pension credit
24established under Article 15 may be considered in determining
25eligibility for or the amount of the survivor's annuity that is

 

 

SB1924- 47 -LRB101 11021 RPS 56220 b

1payable by any other participating system, but pension credit
2established in any other system shall not result in any right
3to a survivor's annuity under the Article 15 system.
4    For persons who participate in a Tier 3 plan established
5under Article 2 of this Code to whom the provisions of this
6Article apply, the pension credits established under the Tier 3
7plan may be considered in determining eligibility for or the
8amount of the defined benefit survivor's annuity that is
9payable by any other participating system, but pension credits
10established in any other system shall not result in any right
11to or increase in the value of a survivor's annuity under the
12Tier 3 plan, which depends solely on the options chosen and the
13value of the participant's vested account balances and is not
14subject to any proportional adjustment under this Section.
15(Source: P.A. 91-887, eff. 7-6-00.)
 
16    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 20-124. Maximum benefits.
20    (a) In no event shall the combined retirement or survivors
21annuities exceed the highest annuity which would have been
22payable by any participating system in which the employee has
23pension credits, if all of his pension credits had been
24validated in that system.
25    If the combined annuities should exceed the highest maximum

 

 

SB1924- 48 -LRB101 11021 RPS 56220 b

1as determined in accordance with this Section, the respective
2annuities shall be reduced proportionately according to the
3ratio which the amount of each proportional annuity bears to
4the aggregate of all such annuities.
5    (b) In the case of a participant in the self-managed plan
6established under Section 15-158.2 of this Code to whom the
7provisions of this Article apply:
8        (i) For purposes of calculating the combined
9    retirement annuity and the proportionate reduction, if
10    any, in a retirement annuity other than one payable under
11    the self-managed plan, the amount of the Article 15
12    retirement annuity shall be deemed to be the highest
13    annuity to which the annuitant would have been entitled if
14    he or she had participated in the traditional benefit
15    package as defined in Section 15-103.1 rather than the
16    self-managed plan.
17        (ii) For purposes of calculating the combined
18    survivor's annuity and the proportionate reduction, if
19    any, in a survivor's annuity other than one payable under
20    the self-managed plan, the amount of the Article 15
21    survivor's annuity shall be deemed to be the highest
22    survivor's annuity to which the survivor would have been
23    entitled if the deceased employee had participated in the
24    traditional benefit package as defined in Section 15-103.1
25    rather than the self-managed plan.
26        (iii) Benefits payable under the self-managed plan are

 

 

SB1924- 49 -LRB101 11021 RPS 56220 b

1    not subject to proportionate reduction under this Section.
2    (c) In the case of a participant in a Tier 3 plan
3established under Article 2 of this Code to whom the provisions
4of this Article apply:
5        (i) For purposes of calculating the combined
6    retirement annuity and the proportionate reduction, if
7    any, in a defined benefit retirement annuity, any benefit
8    payable under the Tier 3 plan shall not be considered.
9        (ii) For purposes of calculating the combined
10    survivor's annuity and the proportionate reduction, if
11    any, in a defined benefit survivor's annuity, any benefit
12    payable under the Tier 3 plan shall not be considered.
13        (iii) Benefits payable under a Tier 3 plan established
14    under Article 2 of this Code are not subject to
15    proportionate reduction under this Section.
16(Source: P.A. 91-887, eff. 7-6-00.)
 
17    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)
18    (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20    Sec. 20-125. Return to employment - suspension of benefits.
21If a retired employee returns to employment which is covered by
22a system from which he is receiving a proportional annuity
23under this Article, his proportional annuity from all
24participating systems shall be suspended during the period of
25re-employment, except that this suspension does not apply to

 

 

SB1924- 50 -LRB101 11021 RPS 56220 b

1any distributions payable under the self-managed plan
2established under Section 15-158.2 of this Code or under a Tier
33 plan established under Article 2 of this Code.
4    The provisions of the Article under which such employment
5would be covered shall govern the determination of whether the
6employee has returned to employment, and if applicable the
7exemption of temporary employment or employment not exceeding a
8specified duration or frequency, for all participating systems
9from which the retired employee is receiving a proportional
10annuity under this Article, notwithstanding any contrary
11provisions in the other Articles governing such systems.
12(Source: P.A. 91-887, eff. 7-6-00.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.

 

 

SB1924- 51 -LRB101 11021 RPS 56220 b

1 INDEX
2 Statutes amended in order of appearance
3    5 ILCS 375/3from Ch. 127, par. 523
4    5 ILCS 375/10from Ch. 127, par. 530
5    40 ILCS 5/2-105.3 new
6    40 ILCS 5/2-117from Ch. 108 1/2, par. 2-117
7    40 ILCS 5/2-162
8    40 ILCS 5/2-165.5 new
9    40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121
10    40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123
11    40 ILCS 5/20-124from Ch. 108 1/2, par. 20-124
12    40 ILCS 5/20-125from Ch. 108 1/2, par. 20-125