093_HB0045ham001
LRB093 00004 EFG 11555 a
1 AMENDMENT TO HOUSE BILL 45
2 AMENDMENT NO. . Amend House Bill 45 by replacing the
3 title with the following:
4 "AN ACT in relation to public employee benefits."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 5. The Illinois Pension Code is amended by
8 changing Section 7-141.1 as follows:
9 (40 ILCS 5/7-141.1)
10 Sec. 7-141.1. Early retirement incentive.
11 (a) The General Assembly finds and declares that:
12 (1) Units of local government across the State have
13 been functioning under a financial crisis.
14 (2) This financial crisis is expected to continue.
15 (3) Units of local government must depend on
16 additional sources of revenue and, when those sources are
17 not forthcoming, must establish cost-saving programs.
18 (4) An early retirement incentive designed
19 specifically to target highly-paid senior employees could
20 result in significant annual cost savings.
21 (5) The early retirement incentive should be made
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1 available only to those units of local government that
2 determine that an early retirement incentive is in their
3 best interest.
4 (6) A unit of local government adopting a program
5 of early retirement incentives under this Section is
6 encouraged to implement personnel procedures to prohibit,
7 for at least 5 years, the rehiring (whether on payroll or
8 by independent contract) of employees who receive early
9 retirement incentives.
10 (7) A unit of local government adopting a program
11 of early retirement incentives under this Section is also
12 encouraged to replace as few of the participating
13 employees as possible and to hire replacement employees
14 for salaries totaling no more than 80% of the total
15 salaries formerly paid to the employees who participate
16 in the early retirement program.
17 It is the primary purpose of this Section to encourage
18 units of local government that can realize true cost savings,
19 or have determined that an early retirement program is in
20 their best interest, to implement an early retirement
21 program.
22 (b) Until the effective date of this amendatory Act of
23 1997, this Section does not apply to any employer that is a
24 city, village, or incorporated town, nor to the employees of
25 any such employer. Beginning on the effective date of this
26 amendatory Act of 1997, any employer under this Article,
27 including an employer that is a city, village, or
28 incorporated town, may establish an early retirement
29 incentive program for its employees under this Section. The
30 decision of a city, village, or incorporated town to consider
31 or establish an early retirement program is at the sole
32 discretion of that city, village, or incorporated town, and
33 nothing in this amendatory Act of 1997 limits or otherwise
34 diminishes this discretion. Nothing contained in this
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1 Section shall be construed to require a city, village, or
2 incorporated town to establish an early retirement program
3 and no city, village, or incorporated town may be compelled
4 to implement such a program.
5 The benefits provided in this Section are available only
6 to members employed by a participating employer that has
7 filed with the Board of the Fund a resolution or ordinance
8 expressly providing for the creation of an early retirement
9 incentive program under this Section for its employees and
10 specifying the effective date of the early retirement
11 incentive program. Subject to the limitation in subsection
12 (h), an employer may adopt a resolution or ordinance
13 providing a program of early retirement incentives under this
14 Section at any time.
15 The resolution or ordinance shall be in substantially the
16 following form:
17 RESOLUTION (ORDINANCE) NO. ....
18 A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
19 RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
20 IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
21 WHEREAS, Section 7-141.1 of the Illinois Pension Code
22 provides that a participating employer may elect to adopt an
23 early retirement incentive program offered by the Illinois
24 Municipal Retirement Fund by adopting a resolution or
25 ordinance; and
26 WHEREAS, The goal of adopting an early retirement program
27 is to realize a substantial savings in personnel costs by
28 offering early retirement incentives to employees who have
29 accumulated many years of service credit; and
30 WHEREAS, Implementation of the early retirement program
31 will provide a budgeting tool to aid in controlling payroll
32 costs; and
33 WHEREAS, The (name of governing body) has determined that
34 the adoption of an early retirement incentive program is in
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1 the best interests of the (name of participating employer);
2 therefore be it
3 RESOLVED (ORDAINED) by the (name of governing body) of
4 (name of participating employer) that:
5 (1) The (name of participating employer) does hereby
6 adopt the Illinois Municipal Retirement Fund early retirement
7 incentive program as provided in Section 7-141.1 of the
8 Illinois Pension Code. The early retirement incentive
9 program shall take effect on (date).
10 (2) In order to help achieve a true cost savings, a
11 person who retires under the early retirement incentive
12 program shall lose those incentives if he or she later
13 accepts employment with any IMRF employer in a position for
14 which participation in IMRF is required or is elected by the
15 employee.
16 (3) In order to utilize an early retirement incentive as
17 a budgeting tool, the (name of participating employer) will
18 use its best efforts either to limit the number of employees
19 who replace the employees who retire under the early
20 retirement program or to limit the salaries paid to the
21 employees who replace the employees who retire under the
22 early retirement program.
23 (4) The effective date of each employee's retirement
24 under this early retirement program shall be set by (name of
25 employer) and shall be no earlier than the effective date of
26 the program and no later than one year after that effective
27 date; except that the employee may require that the
28 retirement date set by the employer be no later than the June
29 30 next occurring after the effective date of the program and
30 no earlier than the date upon which the employee qualifies
31 for retirement.
32 (5) To be eligible for the early retirement incentive
33 under this Section, the employee must have attained age 50
34 and have at least 20 years of creditable service by his or
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1 her retirement date.
2 (6) The (clerk or secretary) shall promptly file a
3 certified copy of this resolution (ordinance) with the Board
4 of Trustees of the Illinois Municipal Retirement Fund.
5 CERTIFICATION
6 I, (name), the (clerk or secretary) of the (name of
7 participating employer) of the County of (name), State of
8 Illinois, do hereby certify that I am the keeper of the books
9 and records of the (name of employer) and that the foregoing
10 is a true and correct copy of a resolution (ordinance) duly
11 adopted by the (governing body) at a meeting duly convened
12 and held on (date).
13 SEAL
14 (Signature of clerk or secretary)
15 (c) To be eligible for the benefits provided under an
16 early retirement incentive program adopted under this
17 Section, a member must:
18 (1) be a participating employee of this Fund who,
19 on the effective date of the program, (i) is in active
20 payroll status as an employee of a participating employer
21 that has filed the required ordinance or resolution with
22 the Board, (ii) is on layoff status from such a position
23 with a right of re-employment or recall to service, (iii)
24 is on a leave of absence from such a position, or (iv) is
25 on disability but has not been receiving benefits under
26 Section 7-146 or 7-150 for a period of more than 2 years
27 from the date of application;
28 (2) have never previously received a retirement
29 annuity under this Article or under the Retirement
30 Systems Reciprocal Act using service credit established
31 under this Article;
32 (3) (blank);
33 (4) have at least 20 years of creditable service in
34 the Fund by the date of retirement, without the use of
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1 any creditable service established under this Section;
2 (5) have attained age 50 by the date of retirement,
3 without the use of any age enhancement received under
4 this Section; and
5 (6) be eligible to receive a retirement annuity
6 under this Article by the date of retirement, for which
7 purpose the age enhancement and creditable service
8 established under this Section may be considered.
9 (d) The employer shall determine the retirement date for
10 each employee participating in the early retirement program
11 adopted under this Section. The retirement date shall be no
12 earlier than the effective date of the program and no later
13 than one year after that effective date, except that the
14 employee may require that the retirement date set by the
15 employer be no later than the June 30 next occurring after
16 the effective date of the program and no earlier than the
17 date upon which the employee qualifies for retirement. The
18 employer shall give each employee participating in the early
19 retirement program at least 30 days written notice of the
20 employee's designated retirement date, unless the employee
21 waives this notice requirement.
22 (e) An eligible person may establish up to 5 years of
23 creditable service under this Section. In addition, for each
24 period of creditable service established under this Section,
25 a person shall have his or her age at retirement deemed
26 enhanced by an equivalent period.
27 The creditable service established under this Section may
28 be used for all purposes under this Article and the
29 Retirement Systems Reciprocal Act, except for the computation
30 of final rate of earnings and the determination of earnings,
31 salary, or compensation under this or any other Article of
32 the Code.
33 The age enhancement established under this Section may be
34 used for all purposes under this Article (including
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1 calculation of the reduction imposed under subdivision
2 (a)1b(iv) of Section 7-142), except for purposes of a
3 reversionary annuity under Section 7-145 and any
4 distributions required because of age. The age enhancement
5 established under this Section may be used in calculating a
6 proportionate annuity payable by this Fund under the
7 Retirement Systems Reciprocal Act, but shall not be used in
8 determining benefits payable under other Articles of this
9 Code under the Retirement Systems Reciprocal Act.
10 (f) For all creditable service established under this
11 Section, the member must pay to the Fund an employee
12 contribution consisting of 4.5% of the member's highest
13 annual salary rate used in the determination of the final
14 rate of earnings for retirement annuity purposes for each
15 year of creditable service granted under this Section. For
16 creditable service established under this Section by a person
17 who is a sheriff's law enforcement employee to be deemed
18 service as a sheriff's law enforcement employee, the employee
19 contribution shall be at the rate of 6.5% of highest annual
20 salary per year of creditable service granted. Contributions
21 for fractions of a year of service shall be prorated. Any
22 amounts that are disregarded in determining the final rate of
23 earnings under subdivision (d)(5) of Section 7-116 (the 125%
24 rule) shall also be disregarded in determining the required
25 contribution under this subsection (f).
26 The employee contribution shall be paid to the Fund as
27 follows: If the member is entitled to a lump sum payment for
28 accumulated vacation, sick leave, or personal leave upon
29 withdrawal from service, the employer shall deduct the
30 employee contribution from that lump sum and pay the deducted
31 amount directly to the Fund. If there is no such lump sum
32 payment or the required employee contribution exceeds the net
33 amount of the lump sum payment, then the remaining amount
34 due, at the option of the employee, may either be paid to the
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1 Fund before the annuity commences or deducted from the
2 retirement annuity in 24 equal monthly installments.
3 (g) An annuitant who has received any age enhancement or
4 creditable service under this Section and thereafter accepts
5 employment with or enters into a personal services contract
6 with an employer under this Article thereby forfeits that age
7 enhancement and creditable service; except that beginning on
8 the effective date of this amendatory Act of the 93rd General
9 Assembly, this prohibition applies only to (1) employment for
10 which the person is required (or is allowed and has elected)
11 to participate in this Fund and (2) contractual personal
12 services which, if performed as an employee, would require
13 the employee to participate in this Fund.
14 A person forfeiting early retirement incentives under
15 this subsection (i) must repay to the Fund that portion of
16 the retirement annuity already received which is attributable
17 to the early retirement incentives that are being forfeited,
18 (ii) shall not be eligible to participate in any future early
19 retirement program adopted under this Section, and (iii) is
20 entitled to a refund of the employee contribution paid under
21 subsection (f). The Board shall deduct the required
22 repayment from the refund and may impose a reasonable payment
23 schedule for repaying the amount, if any, by which the
24 required repayment exceeds the refund amount.
25 The change made to this subsection by this amendatory Act
26 of the 93rd General Assembly is not limited to persons in
27 service on or after its effective date, but it does not
28 restore eligibility for early retirement benefits to any
29 person who has previously forfeited those benefits due to
30 employment accepted (or a contract entered into) before that
31 effective date.
32 (h) The additional unfunded liability accruing as a
33 result of the adoption of a program of early retirement
34 incentives under this Section by an employer shall be
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1 amortized over a period of 10 years beginning on January 1 of
2 the second calendar year following the calendar year in which
3 the latest date for beginning to receive a retirement annuity
4 under the program (as determined by the employer under
5 subsection (d) of this Section) occurs; except that the
6 employer may provide for a shorter amortization period (of no
7 less than 5 years) by adopting an ordinance or resolution
8 specifying the length of the amortization period and
9 submitting a certified copy of the ordinance or resolution to
10 the Fund no later than 6 months after the effective date of
11 the program. An employer, at its discretion, may accelerate
12 payments to the Fund.
13 An employer may provide more than one early retirement
14 incentive program for its employees under this Section.
15 However, an employer that has provided an early retirement
16 incentive program for its employees under this Section may
17 not provide another early retirement incentive program under
18 this Section until the liability arising from the earlier
19 program has been fully paid to the Fund.
20 (Source: P.A. 90-32, eff. 6-27-97; 91-887, eff. 7-6-00.)
21 Section 90. The State Mandates Act is amended by adding
22 Section 8.27 as follows:
23 (30 ILCS 805/8.27 new)
24 Sec. 8.27. Exempt mandate. Notwithstanding Sections 6
25 and 8 of this Act, no reimbursement by the State is required
26 for the implementation of any mandate created by this
27 amendatory Act of the 93rd General Assembly.
28 Section 99. Effective date. This Act takes effect upon
29 becoming law.".