SB3687 101ST GENERAL ASSEMBLY

LRB101 15657 RPS 65006 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3687

Introduced 2/14/2020, by Sen. Donald P. DeWitte

SYNOPSIS AS INTRODUCED:

See Index

Amends the Downstate Police Article of the Illinois Pension Code. Provides that an eligible police officer may elect to receive a retirement pension from each pension fund under the Article in which the police officer has at least one year of service credit, but has not received a refund, by applying in writing and paying a specified contribution. Provides that from each such pension fund other than the last pension fund, in lieu of any retirement pension otherwise payable, an eligible police officer may elect to receive a monthly pension of 1/12th of 2.5% of his or her final monthly salary under that fund for each month of service in that fund, subject to a maximum of 75% of that final monthly salary. Provides that the retirement pension from the last pension fund shall be the retirement pension that would be payable to the police officer if he or she had participated in that last pension fund for his or her entire period of service under all pension funds, minus the amounts of the retirement pensions payable to the police officer by all other pension funds. Provides that a police officer must pay to each pension fund from which he or she has elected to receive a pension a contribution equal to 1% of monthly salary for each month of service credit that the police officer has in that fund (other than service credit for which the police officer has already paid a specified additional contribution), together with interest thereon at the rate of 6% per annum, compounded annually. Contains provisions concerning eligibility for the benefit; contributions; refunds; reinstatement of terminated credits; automatic annual increases; and occupational disease disability pensions. Makes conforming and other changes. Amends the State Mandates Act to require implementation without reimbursement.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning public employee benefits.

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

Section 5. The Illinois Pension Code is amended by adding Section 3-111.2 and changing Sections 3-125.1 and 3-144.6 as follows:

(40 ILCS 5/3-111.2 new)

Sec. 3-111.2. Employee creditable service.

(a) As used in this Section:

"Final monthly salary" means the monthly salary attached to the rank held by the police officer at the time of his or her last withdrawal from service under a particular pension fund.

"Last pension fund" means the pension fund in which the police officer was participating at the time of his or her last withdrawal from service.

(b) The benefits provided under this Section are available only to a police officer who:

(1) is a police officer at the time of withdrawal from the last pension fund and for at least the final 3 years of employment prior to that withdrawal;

(2) has established service credit with at least one pension fund established under this Article other than the last pension fund;

(3) has a total of at least 20 years of service under the various pension funds established under this Article and has attained age 50; and

(4) is in service on or after the effective date of this amendatory Act of the 101st General Assembly.

(c) A police officer who is eligible for benefits under this Section may elect to receive a retirement pension from each pension fund under this Article in which the police officer has at least one year of service credit, but has not received a refund under Section 3-124 (unless the police officer repays that refund under subsection (g)) or subsection (b) of Section 3-125.1, by applying in writing and paying the contribution required under subsection (i).

(d) From each such pension fund other than the last pension fund, in lieu of any retirement pension otherwise payable under this Article, a police officer to whom this Section applies may elect to receive a monthly pension of 1/12th of 2.5% of his or her final monthly salary under that fund for each month of service in that fund, subject to a maximum of 75% of that final monthly salary.

(e) From the last pension fund, in lieu of any retirement pension otherwise payable under this Article, a police officer to whom this Section applies may elect to receive a monthly pension calculated as follows:

The last pension fund shall calculate the retirement pension that would be payable to the police officer under Section 3-111 as if he or she had participated in that last pension fund during his or her entire period of service under all pension funds established under this Article (excluding any period of service for which the police officer has received a refund under Section 3-124, unless the police officer repays that refund under subsection (g), or for which the police officer has received a refund under subsection (b) of Section 3-125.1). From this hypothetical pension there shall be subtracted the original amounts of the retirement pensions payable to the police officer by all other pension funds under subsection (d). The remainder is the retirement pension payable to the police officer by the last pension fund under this subsection (e).

(f) Pensions elected under this Section shall be subject to increases as provided in Section 3-111.1.

(g) A current police officer may reinstate creditable service in a pension fund established under this Article that was terminated upon receipt of a refund, by payment to that pension fund of the amount of the refund together with interest thereon at the rate of 6% per year, compounded annually, from the date of the refund to the date of payment. A repayment of a refund under this Section may be made in equal installments over a period of up to 10 years, but must be paid in full prior to retirement.

(h) As a condition of being eligible for the benefits provided in this Section, a person who is hired to a position as a police officer on or after July 1, 2021 must, within 21 months after being hired, notify the new employer, all of his or her previous employers under this Article, and the Public Pension Division of the Department of Insurance of his or her intent to receive the benefits provided under this Section.

(i) In order to receive a pension under this Section or an occupational disease disability pension for which he or she becomes eligible due to the application of subsection (m) of this Section, a police officer must pay to each pension fund from which he or she has elected to receive a pension under this Section a contribution equal to 1% of monthly salary for each month of service credit that the police officer has in that fund (other than service credit for which the police officer has already paid the additional contribution required under subsection (b) of Section 3-125.1), together with interest thereon at the rate of 6% per annum, compounded annually, from the police officer's first day of employment with that fund or the first day of the fiscal year of that fund that immediately precedes the police officer's first day of employment with that fund, whichever is earlier.

(j) A retired police officer who is receiving pension payments under Section 3-111 may reenter active service under this Article. Subject to the provisions of Section 3-124.1, the police officer may receive credit for service performed after the reentry if the police officer (1) applies to receive credit for that service, (2) suspends his or her pensions under this Section, and (3) makes the contributions required under subsection (i).

(k) A police officer who is newly hired or promoted to a position as a police officer shall not be denied participation in a fund under this Article based on his or her age.

(l) If a police officer who elects to make contributions under subsection (b) of Section 3-125.1 for the pension benefits provided under this Section becomes entitled to a disability pension under Section 3-114.1, the last pension fund is responsible for paying that disability pension and the amount of that disability pension shall be based only on the police officer's service with the last pension fund.

(m) Notwithstanding any provision in Section 3-114.6 to the contrary, if a police officer who elects to make contributions under subsection (b) of Section 3-125.1 for the pension benefits provided under this Section becomes entitled to an occupational disease disability pension under Section 3-114.6, each pension fund to which the police officer has made contributions under subsection (b) of Section 3-125.1 must pay a portion of that occupational disease disability pension equal to the proportion that the police officer's service credit with that pension fund for which the contributions under subsection (b) of Section 3-125.1 have been made bears to the police officer's total service credit with all of the pension funds for which the contributions under subsection (b) of Section 3-125.1 have been made. A police officer who has made contributions under subsection (b) of Section 3-125.1 for at least 5 years of creditable service shall be deemed to have met the 5-year creditable service requirement under Section 3-114.6, regardless of whether the police officer has 5 years of creditable service with the last pension fund.

(n) If a police officer who elects to make contributions under subsection (b) of Section 3-125.1 for the pension benefits provided under this Section becomes entitled to a disability pension under Section 3-114.2, the last pension fund is responsible for paying that disability pension if the police officer has at least 7 years of creditable service with the last pension fund. If a police officer began employment with a new employer as a result of an intergovernmental agreement that resulted in the elimination of the previous employer's police department, the police officer shall not be required to have 7 years of creditable service with the last pension fund to qualify for a disability pension under Section 3-114.2. Under this circumstance, a police officer shall be required to have 7 years of total combined creditable service time to qualify for a disability pension under Section 3-114.2. The disability pension received pursuant to this Section shall be paid by the previous employer and new employer in proportion to the police officer's years of service with each employer.

(40 ILCS 5/3-125.1) (from Ch. 108 1/2, par. 3-125.1)

Sec. 3-125.1. Contributions by police officers.

(a) Each police officer shall contribute to the pension fund the following percentages of salary for the periods stated: Beginning July 1, 1909 and prior to July 23, 1943, 1% (except that prior to July 1, 1921 not more than one dollar per month shall be deducted, and except that beginning July 1, 1921 and prior to July 1, 1927 not more than $2 per month shall be deducted); beginning July 23, 1943 and prior to July 20, 1949, 3%; beginning July 20, 1949 and prior to July 17, 1959, 5%; beginning July 17, 1959 and prior to July 1, 1971, 7%; beginning July 1, 1971 and prior to July 1, 1975, 7 1/2%; beginning July 1, 1975 and prior to January 1, 1987, 8 1/2%; beginning January 1, 1987 and prior to January 1, 2001, 9%; and beginning January 1, 2001, 9.91%. Such sums shall be paid or deducted monthly. Contribution to the self-managed plan shall be no less than 10% of salary.

(b) Each police officer who elects to receive a pension under Section 3-111.2 and who has participated in at least one other pension fund under this Article for a period of at least one year shall contribute an additional 1% of salary toward the cost of the increase in pensions provided in Section 3-111.2.

If a police officer does not elect to receive a retirement pension provided under Section 3-111.2 from one or more of the pension funds in which the police officer has credit, he or she shall, upon withdrawal from the last pension fund as defined in Section 3-111.2, be entitled to receive, from each such fund to which he or she has paid additional contributions under this subsection (b) and from which he or she does not receive a refund under Section 3-124, a refund of those contributions without interest.

A refund of total contributions to a particular police officer pension fund under Section 3-124 shall include any refund of additional contributions paid to that fund under this subsection (b), but a police officer who accepts a refund from a pension fund under Section 3-124 is thereafter ineligible to receive a pension provided under Section 3-111.2 from that fund. A police officer who meets the eligibility requirements of Section 3-111.2 may receive a pension under Section 3-111.2 from any pension fund from which the police officer has not received a refund under Section 3-124 or under this subsection (b).

(c) "Salary" means the annual salary, including longevity, attached to the police officer's rank, as established by the municipality's appropriation ordinance, including any compensation for overtime which is included in the salary so established, but excluding any "overtime pay", "holiday pay", "bonus pay", "merit pay", or any other cash benefit not included in the salary so established.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-144.6)

Sec. 3-144.6. Dissolution and reestablishment of inactive police pension funds. The corporate authorities of a municipality for which a pension fund has been established under this Article may, by resolution or ordinance, dissolve the fund if an independent auditor has certified to the authorities that the fund has no liabilities, participants, or beneficiaries entitled to benefits, and the authorities shall reestablish the fund if a police officer of the municipality seeks to establish service credit in the fund or if reestablishment of the fund is required upon a former police officer's reinstatement of creditable service under subsection (b) of Section 3-110.7 or subsection (g) of Section 3-111.2 of this Code.

The Public Pension Division of the Department of Insurance shall adopt rules regarding the process and procedures for (i) dissolving a pension fund under this Section and (ii) redistributing assets and reestablishing the fund if reestablishment of the fund is necessary.

(Source: P.A. 97-99, eff. 1-1-12.)

Section 90. The State Mandates Act is amended by adding Section 8.44 as follows:

(30 ILCS 805/8.44 new)

Sec. 8.44. Exempt mandate. Notwithstanding Sections 6 and 8 of this Act, no reimbursement by the State is required for the implementation of any mandate created by this amendatory Act of the 101st General Assembly.