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Rep. Marcus C. Evans, Jr.
Filed: 3/22/2021
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1 | | AMENDMENT TO HOUSE BILL 1428
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2 | | AMENDMENT NO. ______. Amend House Bill 1428 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The Illinois Pension Code is amended by |
5 | | changing Section 22-101B as follows: |
6 | | (40 ILCS 5/22-101B) |
7 | | Sec. 22-101B. Health Care Benefits. |
8 | | (a) The Chicago Transit Authority (hereinafter referred to |
9 | | in this Section as the "Authority") shall take all actions |
10 | | lawfully available to it to separate the funding of health |
11 | | care benefits for retirees and their dependents and survivors |
12 | | from the funding for its retirement system. The Authority |
13 | | shall endeavor to achieve this separation as soon as possible, |
14 | | and in any event no later than July 1, 2009. |
15 | | (b) Effective 90 days after the effective date of this |
16 | | amendatory Act of the 95th General Assembly, a Retiree Health |
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1 | | Care Trust is established for the purpose of providing health |
2 | | care benefits to eligible retirees and their dependents and |
3 | | survivors in accordance with the terms and conditions set |
4 | | forth in this Section 22-101B. The Retiree Health Care Trust |
5 | | shall be solely responsible for providing health care benefits |
6 | | to eligible retirees and their dependents and survivors upon |
7 | | the exhaustion of the account established by the Retirement |
8 | | Plan for Chicago Transit Authority Employees pursuant to |
9 | | Section 401(h) of the Internal Revenue Code of 1986, but no |
10 | | earlier than January 1, 2009 and no later than July 1, 2009.
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11 | | (1) The Board of Trustees shall consist of 7 members |
12 | | appointed as follows: (i) 3 trustees shall be appointed by |
13 | | the Chicago Transit Board; (ii) one trustee shall be |
14 | | appointed by an organization representing the highest |
15 | | number of Chicago Transit Authority participants; (iii) |
16 | | one trustee shall be appointed by an organization |
17 | | representing the second-highest number of Chicago Transit |
18 | | Authority participants; (iv) one trustee shall be |
19 | | appointed by the recognized coalition representatives of |
20 | | participants who are not represented by an organization |
21 | | with the highest or second-highest number of Chicago |
22 | | Transit Authority participants; and (v) one trustee shall |
23 | | be selected by the Regional Transportation Authority Board |
24 | | of Directors, and the trustee shall be a professional |
25 | | fiduciary who has experience in the area of collectively |
26 | | bargained retiree health plans. Trustees shall serve until |
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1 | | a successor has been appointed and qualified, or until |
2 | | resignation, death, incapacity, or disqualification.
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3 | | Any person appointed as a trustee of the board shall |
4 | | qualify by taking an oath of office that he or she will |
5 | | diligently and honestly administer the affairs of the |
6 | | system, and will not knowingly violate or willfully permit |
7 | | the violation of any of the provisions of law applicable |
8 | | to the Plan, including Sections 1-109, 1-109.1, 1-109.2, |
9 | | 1-110, 1-111, 1-114, and 1-115 of Article 1 of the |
10 | | Illinois Pension Code.
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11 | | Each trustee shall cast individual votes, and a |
12 | | majority vote shall be final and binding upon all |
13 | | interested parties, provided that the Board of Trustees |
14 | | may require a supermajority vote with respect to the |
15 | | investment of the assets of the Retiree Health Care Trust, |
16 | | and may set forth that requirement in the trust agreement |
17 | | or by-laws of the Board of Trustees. Each trustee shall |
18 | | have the rights, privileges, authority and obligations as |
19 | | are usual and customary for such fiduciaries.
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20 | | (2) The Board of Trustees shall establish and |
21 | | administer a health care benefit program for eligible |
22 | | retirees and their dependents and survivors. Any health |
23 | | care benefit program established by the Board of Trustees |
24 | | for eligible retirees and their dependents and survivors |
25 | | effective on or after July 1, 2009 shall not contain any |
26 | | plan which provides for more than 90% coverage for |
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1 | | in-network services or 70% coverage for out-of-network |
2 | | services after any deductible has been paid, except that |
3 | | coverage through a health maintenance organization ("HMO") |
4 | | may be provided at 100%.
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5 | | (2.5) The Board of Trustees may also establish and |
6 | | administer a health reimbursement arrangement for retirees |
7 | | and for former employees of the Authority or the |
8 | | Retirement Plan, and their survivors, who have contributed |
9 | | to the Retiree Health Care Trust but do not satisfy the |
10 | | years of service requirement of subdivision (b)(4) and the |
11 | | terms of the retiree health care plan; or for those who do |
12 | | satisfy the requirements of subdivision (b)(4) and the |
13 | | terms of the retiree health care plan but who decline |
14 | | coverage under the plan prior to retirement. Any such |
15 | | health reimbursement arrangement may provide that: the |
16 | | retirees or former employees of the Authority or the |
17 | | Retirement Plan, and their survivors, must have reached |
18 | | age 65 to be eligible to participate in the health |
19 | | reimbursement arrangement; contributions by the retirees |
20 | | or former employees of the Authority or the Retirement |
21 | | Plan to the Retiree Health Care Trust shall be considered |
22 | | assets of the Retiree Health Care Trust only; |
23 | | contributions shall not accrue interest for the benefit of |
24 | | the retiree or former employee of the Authority or the |
25 | | Retirement Plan or survivor; benefits shall be payable in |
26 | | accordance with the Internal Revenue Code of 1986; the |
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1 | | amounts paid to or on account of the retiree or former |
2 | | employee of the Authority or the Retirement Plan or |
3 | | survivor shall not exceed the total amount which the |
4 | | retiree or former employee of the Authority or the |
5 | | Retirement Plan contributed to the Retiree Health Care |
6 | | Trust; the Retiree Health Care Trust may charge a |
7 | | reasonable administrative fee for processing the benefits. |
8 | | The Board of Trustees of the Retiree Health Care Trust may |
9 | | establish such rules, limitations and requirements as the |
10 | | Board of Trustees deems appropriate. |
11 | | (3) The Retiree Health Care Trust shall be |
12 | | administered by the Board of Trustees according to the |
13 | | following requirements:
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14 | | (i) The Board of Trustees may cause amounts on |
15 | | deposit in the Retiree Health Care Trust to be |
16 | | invested in those investments that are permitted |
17 | | investments for the investment of moneys held under |
18 | | any one or more of the pension or retirement systems of |
19 | | the State, any unit of local government or school |
20 | | district, or any agency or instrumentality thereof. |
21 | | The Board, by a vote of at least two-thirds of the |
22 | | trustees, may transfer investment management to the |
23 | | Illinois State Board of Investment, which is hereby |
24 | | authorized to manage these investments when so |
25 | | requested by the Board of Trustees.
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26 | | (ii) The Board of Trustees shall establish and |
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1 | | maintain an appropriate funding reserve level which |
2 | | shall not be less than the amount of incurred and |
3 | | unreported claims plus 12 months of expected claims |
4 | | and administrative expenses.
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5 | | (iii) The Board of Trustees shall make an annual |
6 | | assessment of the funding levels of the Retiree Health |
7 | | Care Trust and shall submit a report to the Auditor |
8 | | General at least 90 days prior to the end of the fiscal |
9 | | year. The report shall provide the following: |
10 | | (A) the actuarial present value of projected |
11 | | benefits expected to be paid to current and future |
12 | | retirees and their dependents and survivors; |
13 | | (B) the actuarial present value of projected |
14 | | contributions and trust income plus assets; |
15 | | (C) the reserve required by subsection |
16 | | (b)(3)(ii); and |
17 | | (D) an assessment of whether the actuarial |
18 | | present value of projected benefits expected to be |
19 | | paid to current and future retirees and their |
20 | | dependents and survivors exceeds or is less than |
21 | | the actuarial present value of projected |
22 | | contributions and trust income plus assets in |
23 | | excess of the reserve required by subsection |
24 | | (b)(3)(ii). |
25 | | If the actuarial present value of projected |
26 | | benefits expected to be paid to current and future |
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1 | | retirees and their dependents and survivors exceeds |
2 | | the actuarial present value of projected contributions |
3 | | and trust income plus assets in excess of the reserve |
4 | | required by subsection (b)(3)(ii), then the report |
5 | | shall provide a plan, to be implemented over a period |
6 | | of not more than 10 years from each valuation date, |
7 | | which would make the actuarial present value of |
8 | | projected contributions and trust income plus assets |
9 | | equal to or exceed the actuarial present value of |
10 | | projected benefits expected to be paid to current and |
11 | | future retirees and their dependents and survivors. |
12 | | The plan may consist of increases in employee, |
13 | | retiree, dependent, or survivor contribution levels, |
14 | | decreases in benefit levels, or other plan changes or |
15 | | any combination thereof. If the actuarial present |
16 | | value of projected benefits expected to be paid to |
17 | | current and future retirees and their dependents and |
18 | | survivors is less than the actuarial present value of |
19 | | projected contributions and trust income plus assets |
20 | | in excess of the reserve required by subsection |
21 | | (b)(3)(ii), then the report may provide a plan of |
22 | | decreases in employee, retiree, dependent, or survivor |
23 | | contribution levels, increases in benefit levels, or |
24 | | other plan changes, or any combination thereof, to the |
25 | | extent of the surplus. |
26 | | (iv) The Auditor General shall review the report |
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1 | | and plan provided in subsection (b)(3)(iii) and issue |
2 | | a determination within 90 days after receiving the |
3 | | report and plan, with a copy of such determination |
4 | | provided to the General Assembly and the Regional |
5 | | Transportation Authority, as follows: |
6 | | (A) In the event of a projected shortfall, if |
7 | | the Auditor General determines that the |
8 | | assumptions stated in the report are not |
9 | | unreasonable in the aggregate and that the plan of |
10 | | increases in employee, retiree, dependent, or |
11 | | survivor contribution levels, decreases in benefit |
12 | | levels, or other plan changes, or any combination |
13 | | thereof, to be implemented over a period of not |
14 | | more than 10 years from each valuation date, is |
15 | | reasonably projected to make the actuarial present |
16 | | value of projected contributions and trust income |
17 | | plus assets equal to or in excess of the actuarial |
18 | | present value of projected benefits expected to be |
19 | | paid to current and future retirees and their |
20 | | dependents and survivors, then the Board of |
21 | | Trustees shall implement the plan. If the Auditor |
22 | | General determines that the assumptions stated in |
23 | | the report are unreasonable in the aggregate, or |
24 | | that the plan of increases in employee, retiree, |
25 | | dependent, or survivor contribution levels, |
26 | | decreases in benefit levels, or other plan changes |
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1 | | to be implemented over a period of not more than 10 |
2 | | years from each valuation date, is not reasonably |
3 | | projected to make the actuarial present value of |
4 | | projected contributions and trust income plus |
5 | | assets equal to or in excess of the actuarial |
6 | | present value of projected benefits expected to be |
7 | | paid to current and future retirees and their |
8 | | dependents and survivors, then the Board of |
9 | | Trustees shall not implement the plan, the Auditor |
10 | | General shall explain the basis for such |
11 | | determination to the Board of Trustees, and the |
12 | | Auditor General may make recommendations as to an |
13 | | alternative report and plan. |
14 | | (B) In the event of a projected surplus, if |
15 | | the Auditor General determines that the |
16 | | assumptions stated in the report are not |
17 | | unreasonable in the aggregate and that the plan of |
18 | | decreases in employee, retiree, dependent, or |
19 | | survivor contribution levels, increases in benefit |
20 | | levels, or both, is not unreasonable in the |
21 | | aggregate, then the Board of Trustees shall |
22 | | implement the plan. If the Auditor General |
23 | | determines that the assumptions stated in the |
24 | | report are unreasonable in the aggregate, or that |
25 | | the plan of decreases in employee, retiree, |
26 | | dependent, or survivor contribution levels, |
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1 | | increases in benefit levels, or both, is |
2 | | unreasonable in the aggregate, then the Board of |
3 | | Trustees shall not implement the plan, the Auditor |
4 | | General shall explain the basis for such |
5 | | determination to the Board of Trustees, and the |
6 | | Auditor General may make recommendations as to an |
7 | | alternative report and plan. |
8 | | (C) The Board of Trustees shall submit an |
9 | | alternative report and plan within 45 days after |
10 | | receiving a rejection determination by the Auditor |
11 | | General. A determination by the Auditor General on |
12 | | any alternative report and plan submitted by the |
13 | | Board of Trustees shall be made within 90 days |
14 | | after receiving the alternative report and plan, |
15 | | and shall be accepted or rejected according to the |
16 | | requirements of this subsection (b)(3)(iv). The |
17 | | Board of Trustees shall continue to submit |
18 | | alternative reports and plans to the Auditor |
19 | | General, as necessary, until a favorable |
20 | | determination is made by the Auditor General.
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21 | | (4) For any retiree who first retires effective on or |
22 | | after January 18, 2008, to be eligible for retiree health |
23 | | care benefits upon retirement, the retiree must be at |
24 | | least 55 years of age, retire with 10 or more years of |
25 | | continuous service and satisfy the preconditions |
26 | | established by Public Act 95-708 in addition to any rules |
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1 | | or regulations promulgated by the Board of Trustees. |
2 | | Notwithstanding the foregoing, any retiree hired on or |
3 | | before September 5, 2001 who retires with 25 years or more |
4 | | of continuous service shall be eligible for retiree health |
5 | | care benefits upon retirement in accordance with any rules |
6 | | or regulations adopted by the Board of Trustees; provided |
7 | | he or she retires prior to the full execution of the |
8 | | successor collective bargaining agreement to the |
9 | | collective bargaining agreement that became effective |
10 | | January 1, 2007 between the Authority and the |
11 | | organizations representing the highest and second-highest |
12 | | number of Chicago Transit Authority participants. This |
13 | | paragraph (4) shall not apply to a disability allowance.
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14 | | (5) Effective January 1, 2009, the aggregate amount of |
15 | | retiree, dependent and survivor contributions to the cost |
16 | | of their health care benefits shall not exceed more than |
17 | | 45% of the total cost of such benefits. The Board of |
18 | | Trustees shall have the discretion to provide different |
19 | | contribution levels for retirees, dependents and survivors |
20 | | based on their years of service, level of coverage or |
21 | | Medicare eligibility, provided that the total contribution |
22 | | from all retirees, dependents, and survivors shall be not |
23 | | more than 45% of the total cost of such benefits. The term |
24 | | "total cost of such benefits" for purposes of this |
25 | | subsection shall be the total amount expended by the |
26 | | retiree health benefit program in the prior plan year, as |
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1 | | calculated and certified in writing by the Retiree Health |
2 | | Care Trust's enrolled actuary to be appointed and paid for |
3 | | by the Board of Trustees.
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4 | | (6) Effective January 1, 2022 January 18, 2008 , all |
5 | | employees of the Authority shall contribute to the Retiree |
6 | | Health Care Trust in an amount not less than 1% 3% of |
7 | | compensation.
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8 | | (7) No earlier than January 1, 2009 and no later than |
9 | | July 1, 2009 as the Retiree Health Care Trust becomes |
10 | | solely responsible for providing health care benefits to |
11 | | eligible retirees and their dependents and survivors in |
12 | | accordance with subsection (b) of this Section 22-101B, |
13 | | the Authority shall not have any obligation to provide |
14 | | health care to current or future retirees and their |
15 | | dependents or survivors. Employees, retirees, dependents, |
16 | | and survivors who are required to make contributions to |
17 | | the Retiree Health Care Trust shall make contributions at |
18 | | the level set by the Board of Trustees pursuant to the |
19 | | requirements of this Section 22-101B.
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20 | | (Source: P.A. 98-1164, eff. 6-1-15 .)".
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