HB5803 102ND GENERAL ASSEMBLY

LRB102 28632 RPS 40515 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5803

Introduced 11/16/2022, by Rep. Katie Stuart

SYNOPSIS AS INTRODUCED:

40 ILCS 5/14-104	from Ch. 108 1/2, par. 14-104
40 ILCS 5/14-135.13 new

Amends the State Employee Article of the Illinois Pension Code. Provides that certain contributions for service must be paid in full before retirement either in a lump sum or in installment payments over a period not to exceed 5 years (instead of in a lump sum or in installment payments) in accordance with such rules as may be adopted by the Board of Trustees of the System. Sets forth provisions concerning written appeals, hearings, rehearings, and written reappeals. Effective immediately.

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 14-104 and by adding Section 14-135.13 as follows:

(40 ILCS 5/14-104) (from Ch. 108 1/2, par. 14-104)

Sec. 14-104. Service for which contributions permitted. Contributions provided for in this Section shall cover the period of service granted. Except as otherwise provided in this Section, the contributions shall be based upon the employee's compensation and contribution rate in effect on the date he last became a member of the System; provided that for all employment prior to January 1, 1969 the contribution rate shall be that in effect for a noncovered employee on the date he last became a member of the System. Except as otherwise provided in this Section, contributions permitted under this Section shall include regular interest from the date an employee last became a member of the System to the date of payment.

These contributions must be paid in full before retirement either in a lump sum or in installment payments over a period not to exceed 5 years in accordance with such rules as may be adopted by the board.

(a) Any member may make contributions as required in this Section for any period of service, subsequent to the date of establishment, but prior to the date of membership.

(b) Any employee who had been previously excluded from membership because of age at entry and subsequently became eligible may elect to make contributions as required in this Section for the period of service during which he was ineligible.

(c) An employee of the Department of Insurance who, after January 1, 1944 but prior to becoming eligible for membership, received salary from funds of insurance companies in the process of rehabilitation, liquidation, conservation or dissolution, may elect to make contributions as required in this Section for such service.

(d) Any employee who rendered service in a State office to which he was elected, or rendered service in the elective office of Clerk of the Appellate Court prior to the date he became a member, may make contributions for such service as required in this Section. Any member who served by appointment of the Governor under the Civil Administrative Code of Illinois and did not participate in this System may make contributions as required in this Section for such service.

(e) Any person employed by the United States government or any instrumentality or agency thereof from January 1, 1942 through November 15, 1946 as the result of a transfer from State service by executive order of the President of the United States shall be entitled to prior service credit covering the period from January 1, 1942 through December 31, 1943 as provided for in this Article and to membership service credit for the period from January 1, 1944 through November 15, 1946 by making the contributions required in this Section. A person so employed on January 1, 1944 but whose employment began after January 1, 1942 may qualify for prior service and membership service credit under the same conditions.

(f) An employee of the Department of Labor of the State of Illinois who performed services for and under the supervision of that Department prior to January 1, 1944 but who was compensated for those services directly by federal funds and not by a warrant of the Auditor of Public Accounts paid by the State Treasurer may establish credit for such employment by making the contributions required in this Section. An employee of the Department of Agriculture of the State of Illinois, who performed services for and under the supervision of that Department prior to June 1, 1963, but was compensated for those services directly by federal funds and not paid by a warrant of the Auditor of Public Accounts paid by the State Treasurer, and who did not contribute to any other public employee retirement system for such service, may establish credit for such employment by making the contributions required in this Section.

(g) Any employee who executed a waiver of membership within 60 days prior to January 1, 1944 may, at any time while in the service of a department, file with the board a rescission of such waiver. Upon making the contributions required by this Section, the member shall be granted the creditable service that would have been received if the waiver had not been executed.

(h) Until May 1, 1990, an employee who was employed on a full-time basis by a regional planning commission for at least 5 continuous years may establish creditable service for such employment by making the contributions required under this Section, provided that any credits earned by the employee in the commission's retirement plan have been terminated.

(i) Any person who rendered full time contractual services to the General Assembly as a member of a legislative staff may establish service credit for up to 8 years of such services by making the contributions required under this Section, provided that application therefor is made not later than July 1, 1991.

(j) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, but with all of the interest calculated from the date the employee last became a member of the System or November 19, 1991, whichever is later, to the date of payment, an employee may establish service credit for a period of up to 4 years spent in active military service for which he does not qualify for credit under Section 14-105, provided that (1) he was not dishonorably discharged from such military service, and (2) the amount of service credit established by a member under this subsection (j), when added to the amount of military service credit granted to the member under subsection (b) of Section 14-105, shall not exceed 5 years. The change in the manner of calculating interest under this subsection (j) made by this amendatory Act of the 92nd General Assembly applies to credit purchased by an employee on or after its effective date and does not entitle any person to a refund of contributions or interest already paid. In compliance with Section 14-152.1 of this Act concerning new benefit increases, any new benefit increase as a result of the changes to this subsection (j) made by Public Act 95-483 is funded through the employee contributions provided for in this subsection (j). Any new benefit increase as a result of the changes made to this subsection (j) by Public Act 95-483 is exempt from the provisions of subsection (d) of Section 14-152.1.

(k) An employee who was employed on a full-time basis by the Illinois State's Attorneys Association Statewide Appellate Assistance Service LEAA-ILEC grant project prior to the time that project became the State's Attorneys Appellate Service Commission, now the Office of the State's Attorneys Appellate Prosecutor, an agency of State government, may establish creditable service for not more than 60 months service for such employment by making contributions required under this Section.

(l) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, a member may establish service credit for periods of less than one year spent on authorized leave of absence from service, provided that (1) the period of leave began on or after January 1, 1982 and (2) any credit established by the member for the period of leave in any other public employee retirement system has been terminated. A member may establish service credit under this subsection for more than one period of authorized leave, and in that case the total period of service credit established by the member under this subsection may exceed one year. In determining the contributions required for establishing service credit under this subsection, the interest shall be calculated from the beginning of the leave of absence to the date of payment.

(l-5) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, a member may establish service credit for periods of up to 2 years spent on authorized leave of absence from service, provided that during that leave the member represented or was employed as an officer or employee of a statewide labor organization that represents members of this System. In determining the contributions required for establishing service credit under this subsection, the interest shall be calculated from the beginning of the leave of absence to the date of payment.

(m) Any person who rendered contractual services to a member of the General Assembly as a worker in the member's district office may establish creditable service for up to 3 years of those contractual services by making the contributions required under this Section. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. To establish credit under this subsection, the applicant must apply to the System by March 1, 1998.

(n) Any person who rendered contractual services to a member of the General Assembly as a worker providing constituent services to persons in the member's district may establish creditable service for up to 8 years of those contractual services by making the contributions required under this Section. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. To establish credit under this subsection, the applicant must apply to the System by March 1, 1998.

(o) A member who participated in the Illinois Legislative Staff Internship Program may establish creditable service for up to one year of that participation by making the contribution required under this Section. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. Credit may not be established under this subsection for any period for which service credit is established under any other provision of this Code.

(p) By paying the contributions otherwise required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, a member may establish service credit for a period of up to 8 years during which he or she was employed by the Visually Handicapped Managers of Illinois in a vending program operated under a contractual agreement with the Department of Rehabilitation Services or its successor agency.

This subsection (p) applies without regard to whether the person was in service on or after the effective date of this amendatory Act of the 94th General Assembly. In the case of a person who is receiving a retirement annuity on that effective date, the increase, if any, shall begin to accrue on the first annuity payment date following receipt by the System of the contributions required under this subsection (p).

(q) By paying the required contributions under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest, an employee who was laid off but returned to any State employment may establish creditable service for the period of the layoff, provided that (1) the applicant applies for the creditable service under this subsection (q) within 6 months after July 27, 2010 (the effective date of Public Act 96-1320), (2) the applicant does not receive credit for that period under any other provision of this Code, (3) at the time of the layoff, the applicant is not in an initial probationary status consistent with the rules of the Department of Central Management Services, and (4) the total amount of creditable service established by the applicant under this subsection (q) does not exceed 3 years. For service established under this subsection (q), the required employee contribution shall be based on the rate of compensation earned by the employee on the date of returning to employment after the layoff and the contribution rate then in effect, and the required interest shall be calculated at the actuarially assumed rate from the date of returning to employment after the layoff to the date of payment. Funding for any new benefit increase, as defined in Section 14-152.1 of this Act, that is created under this subsection (q) will be provided by the employee contributions required under this subsection (q).

(r) A member who participated in the University of Illinois Government Public Service Internship Program (GPSI) may establish creditable service for up to 2 years of that participation by making the contribution required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest. The System shall determine a full-time salary equivalent for the purpose of calculating the required contribution. Credit may not be established under this subsection for any period for which service credit is established under any other provision of this Code.

(s) A member who worked as a nurse under a contractual agreement for the Department of Public Aid, or its successor agency, the Department of Human Services, in the Client Assessment Unit and was subsequently determined to be a State employee by the United States Internal Revenue Service and the Illinois Labor Relations Board may establish creditable service for those contractual services by making the contributions required under this Section. To establish credit under this subsection, the applicant must apply to the System by July 1, 2008.

The Department of Human Services shall pay an employer contribution based upon an amount determined by the Board to be equal to the employer's normal cost of the benefit, plus interest.

In compliance with Section 14-152.1 added by Public Act 94-4, the cost of the benefits provided by Public Act 95-583 are offset by the required employee and employer contributions.

(t) Any person who rendered contractual services on a full-time basis to the Illinois Institute of Natural Resources and the Illinois Department of Energy and Natural Resources may establish creditable service for up to 4 years of those contractual services by making the contributions required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit plus interest at the actuarially assumed rate from the first day of the service for which credit is being established to the date of payment. To establish credit under this subsection (t), the applicant must apply to the System within 6 months after July 27, 2010 (the effective date of Public Act 96-1320).

(u) By paying the required contributions under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit, plus interest, a member may establish creditable service and earnings credit for periods of furlough beginning on or after July 1, 2008. To receive this credit, the participant must (i) apply in writing to the System before December 31, 2011 and (ii) not receive compensation for the furlough period. For service established under this subsection, the required employee contribution shall be based on the rate of compensation earned by the employee immediately following the date of the first furlough day in the time period specified in this subsection (u), and the required interest shall be calculated at the actuarially assumed rate from the date of the furlough to the date of payment.

(v) Any member who rendered full-time contractual services to an Illinois Veterans Home operated by the Department of Veterans' Affairs may establish service credit for up to 8 years of such services by making the contributions required under this Section, plus an amount determined by the Board to be equal to the employer's normal cost of the benefit, plus interest at the actuarially assumed rate. To establish credit under this subsection, the applicant must apply to the System no later than 6 months after July 27, 2010 (the effective date of Public Act 96-1320).

(Source: P.A. 96-97, eff. 7-27-09; 96-718, eff. 8-25-09; 96-775, eff. 8-28-09; 96-961, eff. 7-2-10; 96-1000, eff. 7-2-10; 96-1320, eff. 7-27-10; 96-1535, eff. 3-4-11; 97-333, 8-12-11.)

(40 ILCS 5/14-135.13 new)

Sec. 14-135.13. Written appeals and hearings.

(a) Definitions. In this Section:

"Authorized representative" means a person representing a petitioner in a written appeal or hearing.

"Executive Committee" means a committee consisting of one member of the Board, the Chairperson of the Board or his or her designee, and the Executive Secretary of the System or his or her designee, which shall meet periodically for the purpose of hearing all administrative contested matters and making recommendations to the Board who shall make the final decision. At any time, the Chairperson of the Board or the Executive Secretary of the System may appoint an alternate designee to serve on the committee in place of the designee that he or she has previously appointed.

"Executive Secretary of the System" means the person designated as the official custodian of all papers and documents filed in proceedings before the Executive Committee.

"Hearing" means the reconsideration by the Executive Committee of the initial disposition of a claim, at which the petitioner appears in person or by an authorized representative, either at the hearing or by video or audio conference.

"Hearing officer" means a member of the Executive Committee or an attorney retained by the Executive Committee for the purpose of conducting hearings and communicating the Executive Committee's findings of fact, conclusions of law, and recommendation to the Board.

"Legal action" means any action, following the final denial by the Board, in which a member is seeking relief in State or federal court for a disputed claim.

"Petition" means a written request made by a petitioner or authorized representative for a hearing, a written appeal, a rehearing, or a written reappeal before the Executive Committee.

"Petitioner" means an individual who requests (1) by petition a hearing or a written appeal before the Executive Committee for reconsideration of the initial disposition of a claim or (2) a rehearing or written reappeal before the Executive Committee for reconsideration of the disposition of a hearing or written appeal.

"Rehearing" means the reconsideration by the Executive Committee of the disposition of a hearing or written appeal, at which the petitioner appears in person or by an authorized representative, either at the hearing or by video or audio conference.

"Video or audio conference" means a hearing or rehearing before the Executive Committee for which the petitioner or authorized representative is not physically present and the proceeding before the Executive Committee is conducted through video or audio technology.

"Written appeal" means the reconsideration by the Executive Committee, based upon written evidence, of the initial disposition of a petitioner's claim, at which the petitioner does not appear either in person or by an authorized representative.

"Written reappeal" means the reconsideration by the Executive Committee, based upon written evidence, of the disposition of a hearing or written appeal, at which the petitioner does not appear either in person or by an authorized representative.

(b) Administrative determination. The administrative staff of the System shall be responsible for the daily functioning of the System, including the processing of all claims for benefits payable by the System, all claims for service credits granted by the System, and all claims against or relating to the System.

(c) Right of appeal. Any member, annuitant, or beneficiary adversely affected by the initial disposition of a claim by the System's staff may have the disposition of the claim reconsidered either at a hearing before the Executive Committee or by filing a written appeal with the Executive Committee.

(d) Written appeals to the Executive Committee.

(1) All petitions for written appeal shall be directed to the Executive Secretary of the System at its Springfield office and must be received within 30 days following the notification of the initial disposition of the claim.

(2) Form of written appeal. A petition for a written appeal shall set forth the name and address of the petitioner; the name and address of the petitioner's authorized representative, if applicable; a brief statement of the facts forming the basis of the written appeal, which must include any new or additional evidence; and the relief sought.

(3) Disposition of written appeal.

(A) The Executive Committee shall consider written appeals at the next regular meeting of the Executive Committee more than 15 days after the receipt of the petition.

(B) Following the written appeal and the receipt of all supplemental material requested, the recommendation of the Executive Committee shall be communicated in writing to the petitioner and authorized representative, if applicable, and the appropriate action shall be implemented by the Executive Committee subject to the approval of the Board.

(4) Continuances and extensions of time. Continuances and extensions of time shall be granted by the Executive Committee or the examiner when it is demonstrated that obtaining and presenting additional evidence is necessary to render a fair and equitable decision on the written appeal before the Committee.

(5) Minutes and records of written appeals.

(A) Minutes of every meeting of the Executive Committee and a record of all written appeals before the Executive Committee shall be kept by the Executive Secretary of the System at its Springfield office.

(B) The Executive Secretary of the System shall be the official custodian of all papers and documents filed in proceedings before the Executive Committee.

(e) Hearings before the Executive Committee.

(1) All petitions for hearings shall be made to the Executive Secretary of the System at its Springfield Office and must be received within 30 days following the notification of the initial disposition of the claim.

(2) Any petitioner or authorized representative may appear at a hearing before the Executive Committee, either in person or by video or audio conference.

(3) Petitions may be informal or formal and shall be presented by letter or other writing. A petition shall set forth the name and address of the petitioner; the name and address of the authorized representative, if applicable; a brief statement of the facts forming the basis of the petition, which must include any new or additional evidence; and the relief sought.

(4) Upon scheduling of a hearing before the Executive Committee, a petitioner shall be provided with written notice of: the date, time, and place of the hearing; the subject matter of the hearing; and the relevant procedural and substantive statutory and regulatory provisions. Notice of the hearing shall also inform the petitioner that he or she will be afforded the opportunity to provide a statement of his or her position, present oral evidence, and conduct examination and cross-examination of witnesses as necessary for full and true disclosure of the facts. In the absence of the petitioner, the Executive Committee shall consider the petitioner's petition and such other matters as may be properly brought before it at the hearing.

(5) Prehearing conferences.

(A) Upon written request by the Executive Committee or a petitioner or authorized representative, a conference shall be conducted for the purpose of formulating issues and considering:

(i) the simplification of issues;

(ii) the amendment of pleadings;

(iii) the making of admissions of facts or stipulations for the purpose of avoiding the unnecessary introduction of evidence;

(iv) the procedure at the hearing;

(v) the limitation of the number of witnesses; and

(vi) such other matters as may aid in the simplification of the evidence and disposition of the proceeding.

(B) The persons attending the prehearing conference may enter into a written stipulation as to matters decided in the prehearing conference.

(C) No minutes shall be kept of the prehearing conference. Facts disclosed in the course of the prehearing conferences are privileged and, except by agreement, shall not be used against the petitioner or any other party attending the prehearing conference either before the Executive Committee or elsewhere unless fully substantiated by other evidence.

(6) Conduct of hearings.

(A) Hearings shall be conducted before the Executive Committee by the hearing officer and shall be of an informal nature.

(B) The hearing officer shall direct all parties to enter their appearances on the record. The hearing officer shall conduct a full and fair hearing, receive testimony of the claimant, admit exhibits into evidence, avoid delay, maintain order, and make a sufficient record for a full and true disclosure of the facts and issues. To accomplish these ends, the hearing officer shall make all procedural and evidentiary rulings necessary for the conduct of the hearing.

(C) Parties may, by written stipulation, agree upon any facts involved in the proceeding. The facts stipulated shall be considered as evidence in the proceeding.

(D) Irrelevant material or unduly repetitious evidence shall be excluded.

(7) Documentary evidence. Whenever possible, documents and exhibits shall be introduced by stipulation of the parties. Originals of documents shall be introduced into evidence with leave of the hearing officer to substitute the originals with copies. Whenever possible, the parties shall interchange copies of exhibits or other pertinent material before the hearing at which they are to be offered.

(8) Briefs and oral arguments. Written briefs and oral arguments shall be allowed at the request of the petitioner. The time limitations upon the oral argument shall be determined by the hearing officer having regard to the magnitude and complexity of the issues involved and the other business of the Executive Committee. All testimony shall be taken under oath before an officer authorized to administer oaths by the laws of this State, of the United States, or of the place where the testimony is to be given.

(9) Disposition of hearing. Following the hearing and receipt of all supplemental material requested, the Executive Committee, following its next scheduled meeting, shall communicate its recommendation in writing to the petitioner and authorized representative, if applicable. The recommendation shall contain a sufficient statement of the facts, all necessary findings of fact and conclusions of law, and a suggested decision or decisions of the Board. The appropriate action shall be implemented by the Executive Committee subject to the approval of the Board.

(10) Continuances and extensions of time. Continuances and extensions of time shall be granted by the Executive Committee or the hearing officer when it is demonstrated that obtaining and presenting additional evidence or witnesses is necessary to render a fair and equitable decision on the hearing before the Executive Committee.

(11) Minutes and record of hearing.

(A) Minutes of every meeting of the Executive Committee and a record of all hearings before the Executive Committee shall be kept by the Executive Secretary of the System at its Springfield office.

(B) Two records of proceedings shall be kept that shall be in the form of a nonverbatim bystander's record of the proceedings and either a stenographic transcription or a tape recording. The record shall be available to the petitioner or authorized representative prior to the Executive Committee making its recommendations.

(C) The Executive Secretary of the System shall be the official custodian of all papers and documents filed in proceedings before the Executive Committee.

(12) Disqualification; ex parte communications.

(A) Disqualification.

(i) A hearing officer or other member of the Executive Committee may be disqualified on grounds of bias or conflict of interest. A motion to disqualify a hearing officer or other member of the Executive Committee for bias or conflict of interest should be made to the hearing officer by any party to the hearing at least one week prior to the commencement of the hearing. The motion shall be heard, considered, and ruled upon by the hearing officer at or prior to the commencement of the hearing. The movant shall have the burden of proof with respect to the motion to disqualify. Either an adverse ruling or the fact that a hearing officer or other member of the Executive Committee is an employee of the System or has a contract with the System, standing alone, shall not constitute bias or conflict of interest.

(ii) The Executive Secretary of the System may not be called as a witness unless it is demonstrated that the Executive Secretary of the System has relevant noncumulative personal knowledge of facts bearing upon the claim. The Executive Secretary of the System may not be disqualified as a member of the Executive Committee on the basis that the Executive Secretary of the System is responsible for the overall administration of the System.

(iii) If the Executive Committee is reduced to fewer than 2 members, the President of the Board may appoint another person to the Executive Committee.

(B) Ex parte communications prohibited. Except in the disposition of matters that the System is authorized by law to entertain or dispose of on an ex parte basis, the members of the Executive Committee shall not, after receiving notice of a hearing in a contested matter, communicate, directly or indirectly, in connection with any issue of fact, with any party, or in connection with any other issue with any party, or the representative of any party, except upon notice and opportunity for all parties to participate. However, an employee of the System may communicate with other employees of the System and an employee of the System or member of the Executive Committee may have the aid and advice of one or more assistants. An ex parte communication received by any member of the Executive Committee shall be made a part of the record of the pending matter, including all written communications, all written responses to the communications, and a memorandum stating the substance of all oral communications and all responses made and the identity of each person from whom the ex parte communication was received. Communications regarding matters of procedure and practice, such as the format of pleadings, number of copies required, manner of service, and status of proceedings, are not considered ex parte communications.

(f) Rehearings and written reappeals.

(1) Purpose of rehearing and written reappeal. Any member of the Executive Committee may grant a rehearing or written reappeal only for the purpose of considering new or additional evidence not previously available.

(2) Procedures for rehearing. The procedures set forth in subsection (e) shall apply to rehearings, except that a petition for a rehearing must be received within 90 days following the notification of the final decision of the Board with respect to the recommendation of the Executive Committee.

(3) Procedures for written reappeal. The procedures set forth in subsection (d) shall apply to written reappeals, except that a petition for a written reappeal must be received within 90 days following the notification of the final decision of the Board with respect to the recommendation of the Executive Committee.

(g) Decisions of the Board.

(1) Decisions of the Board are final administrative decisions subject to the provisions of the Administrative Review Law.

(2) The decision of the Board shall be communicated in writing to the petitioner and authorized representative, if applicable.

(h) Request for retirement annuity or refund of contributions. A request for a retirement annuity or a refund of contributions shall be granted when legal action is pending on a disputed disability claim. If the member receives a favorable decision on the legal action against the System and requests additional disability benefits with regard to the disputed claim for a period beyond the effective date the retirement annuity or refund of contributions, the member must repay all retirement benefits or refund of contributions within 30 days after notification by the System of the amount due.

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