HB2974 102ND GENERAL ASSEMBLY

LRB102 14901 RPS 20255 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB2974

Introduced 2/19/2021, by Rep. Thomas Morrison

SYNOPSIS AS INTRODUCED:

40 ILCS 5/16-152.1

from Ch. 108 1/2, par. 16-152.1

Amends the Downstate Teachers Article of the Illinois Pension Code. Prohibits an employer from making employee contributions on behalf of an employee, except for the sole purpose of allowing an employee to make pre-tax contributions. Provides that employment contracts or collective bargaining agreements in effect on the effective date of the amendatory Act are not subject to the prohibition, but any such contract or collective bargaining agreement that is subsequently modified, amended, or renewed or that is in effect 3 or more years after the effective date of the amendatory Act shall be subject to the prohibition. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

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 changing Section 16-152.1 as follows:

(40 ILCS 5/16-152.1) (from Ch. 108 1/2, par. 16-152.1)

Sec. 16-152.1. Pickup of contributions.

(a) Each employer may pick up the member contributions required under Section 16-152 for all salary earned after December 31, 1981. If an employer decides not to pick up the member contributions, the amount that would have been picked up shall continue to be deducted from salary. If contributions are picked up, they shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code. The employer shall pay these member contributions from the same source of funds which is used in paying salary to the member. The employer may pick up these contributions by a reduction in the cash salary of the member or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase. If member contributions are picked up, they shall be treated for all purposes of this Article 16 in the same manner as member contributions made prior to the date the pick up began.

(b) The State Board of Education shall pick up the contributions of regional superintendents required under Section 16-152 for all salary earned for the 1982 calendar year and thereafter.

(c) Effective July 1, 1983, each employer shall pick up the member contributions required under Section 16-152 for all salary earned after such date. Contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code. The employer shall pay these member contributions from the same source of funds which is used in paying salary to the member. The employer may pick up these contributions by a reduction in the cash salary of the member or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase. Member contributions so picked up shall be treated for all purposes of this Article 16 in the same manner as member contributions made prior to the date the pick up began.

(d) Subject to the requirements of federal law and the rules of the board, beginning July 1, 1998 a member who is employed on a full-time basis may elect to have the employer pick up optional contributions that the member has elected to pay to the System, and the contributions so picked up shall be treated as employer contributions for the purposes of determining federal tax treatment. The election to have optional contributions picked up is irrevocable. At the time of making the election, the member shall execute a binding, irrevocable payroll deduction authorization. Upon receiving notice of the election, the employer shall pick up the contributions by a reduction in the cash salary of the member and shall pay the contributions from the same source of funds that is used to pay earnings to the member.

(e) Beginning on the effective date of this amendatory Act of the 102nd General Assembly, no employer shall pay employee contributions on behalf of an employee, except for the sole purpose of allowing the employee to make pre-tax contributions as provided in this Section. The provisions of this subsection (e) do not apply to an employment contract or collective bargaining agreement that is in effect on the effective date of this amendatory Act of the 102nd General Assembly. However, any such contract or agreement that is subsequently modified, amended, or renewed or that is in effect 3 or more years after the effective date of this amendatory Act of the 102nd General Assembly shall be subject to the provisions of this subsection (e).

(Source: P.A. 90-448, eff. 8-16-97.)

Section 99. Effective date. This Act takes effect upon becoming law.