SB2433 93RD GENERAL ASSEMBLY

LRB093 20500 LRD 46292 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2433

Introduced 2/3/2004, by Vince Demuzio

SYNOPSIS AS INTRODUCED:

40 ILCS 5/16-106	from Ch. 108 1/2, par. 16-106
40 ILCS 5/16-118	from Ch. 108 1/2, par. 16-118
40 ILCS 5/16-133.3	from Ch. 108 1/2, par. 16-133.3

Amends the Illinois Pension Code. Provides that an annuitant may accept employment as a teacher with the Illinois School for the Deaf or the Illinois School for the Visually Impaired for an unlimited period without impairing his or her status as a retired teacher if (1) the annuitant accepts that employment in order to fill a vacancy caused by a lack of qualified applicants for teaching positions at either of those schools and (2) the annuitant is qualified to fill that vacancy. 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 Sections 16-106, 16-118 and 16-133.3 as follows:

(40 ILCS 5/16-106) (from Ch. 108 1/2, par. 16-106)

Sec. 16-106. Teacher. "Teacher": The following individuals, provided that, for employment prior to July 1, 1990, they are employed on a full-time basis, or if not full-time, on a permanent and continuous basis in a position in which services are expected to be rendered for at least one school term:

(1) Any educational, administrative, professional or other staff employed in the public common schools included within this system in a position requiring certification under the law governing the certification of teachers;

(2) Any educational, administrative, professional or other staff employed in any facility of the Department of Children and Family Services or the Department of Human Services, in a position requiring certification under the law governing the certification of teachers, and any person who (i) works in such a position for the Department of Corrections, (ii) was a member of this System on May 31, 1987, and (iii) did not elect to become a member of the State Employees' Retirement System pursuant to Section 14-108.2 of this Code; except that "teacher" does not include any person who (A) becomes a security employee of the Department of Human Services, as defined in Section 14-110, after June 28, 2001 (the effective date of Public Act 92-14), or (B) becomes a member of the State Employees' Retirement System pursuant to Section 14-108.2c of this Code;

(3) Any regional superintendent of schools, assistant regional superintendent of schools, State Superintendent of Education; any person employed by the State Board of Education as an executive; any executive of the boards engaged in the service of public common school education in school districts covered under this system of which the State Superintendent of Education is an ex-officio member;

(4) Any employee of a school board association operating in compliance with Article 23 of the School Code who is certificated under the law governing the certification of teachers;

(5) Any person employed by the retirement system who:

(i) was an employee of and a participant in the system on August 17, 2001 (the effective date of Public Act 92-416), or

(ii) becomes an employee of the system on or after August 17, 2001;

(6) Any educational, administrative, professional or other staff employed by and under the supervision and control of a regional superintendent of schools, provided such employment position requires the person to be certificated under the law governing the certification of teachers and is in an educational program serving 2 or more districts in accordance with a joint agreement authorized by the School Code or by federal legislation;

(7) Any educational, administrative, professional or other staff employed in an educational program serving 2 or more school districts in accordance with a joint agreement authorized by the School Code or by federal legislation and in a position requiring certification under the laws governing the certification of teachers;

(8) Any officer or employee of a statewide teacher organization or officer of a national teacher organization who is certified under the law governing certification of teachers, provided: (i) the individual had previously established creditable service under this Article, (ii) the individual files with the system an irrevocable election to become a member, and (iii) the individual does not receive credit for such service under any other Article of this Code;

(9) Any educational, administrative, professional, or other staff employed in a charter school operating in compliance with the Charter Schools Law who is certificated under the law governing the certification of teachers.

An annuitant receiving a retirement annuity under this Article or under Article 17 of this Code who is employed by a board of education or other employer as permitted under Section 16-118 or 16-150.1 is not a "teacher" for purposes of this Article. A person who has received a single-sum retirement benefit under Section 16-136.4 of this Article is not a "teacher" for purposes of this Article. An annuitant receiving a retirement annuity who accepts employment as a teacher with the Illinois School for the Deaf or the Illinois School for the Visually Impaired to fill a vacancy caused by a lack of qualified applicants for teaching positions at either of those schools and who is qualified to fill that vacancy and who is authorized under subsection (a) of Section 16-118 to accept that employment without impairing his or her status as a retired teacher is not a "teacher" for purposes of this Article with respect to that employment.

(Source: P.A. 92-14, eff. 6-28-01; 92-416, eff. 8-17-01; 92-651, eff. 7-11-02; 93-320, eff. 7-23-03.)

(40 ILCS 5/16-118) (from Ch. 108 1/2, par. 16-118)

Sec. 16-118. Retirement. "Retirement": Entry upon a retirement annuity or receipt of a single-sum retirement benefit granted under this Article after termination of active service as a teacher.

(a) An annuitant receiving a retirement annuity other than a disability retirement annuity may accept employment as a teacher from a school board or other employer specified in Section 16-106 without impairing retirement status, if that employment: (1) is not within the school year during which service was terminated; and (2) does not exceed 100 paid days or 500 paid hours in any school year (during the period beginning July 1, 2001 through June 30, 2006, 120 paid days or 600 paid hours in each school year). Where such permitted employment is partly on a daily and partly on an hourly basis, a day shall be considered as 5 hours. Notwithstanding any provision in this subsection (a) to the contrary, the limitations in items (1) and (2) of this subsection (a) do not apply to an annuitant receiving a retirement annuity, including an annuitant who took advantage of the program of early retirement benefits provided under Section 16-133.3, but not including an annuitant receiving a disability retirement annuity, if (i) the annuitant accepts employment as a teacher with the Illinois School for the Deaf or the Illinois School for the Visually Impaired to fill a vacancy caused by a lack of qualified applicants for teaching positions at either of those schools and (ii) the annuitant is qualified to fill that vacancy.

(b) Subsection (a) does not apply to an annuitant who returns to teaching under the program established in Section 16-150.1, for the duration of his or her participation in that program.

(Source: P.A. 92-416, eff. 8-17-01; 93-320, eff. 7-23-03.)

(40 ILCS 5/16-133.3) (from Ch. 108 1/2, par. 16-133.3)

Sec. 16-133.3. Early retirement incentives for State employees.

(a) To be eligible for the benefits provided in this Section, a person must:

(1) be a member of this System who, on any day during June, 2002, is (i) in active payroll status as a full-time teacher employed by a department and an active contributor to this System with respect to that employment, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) receiving a disability benefit under Section 16-149 or 16-149.1, but only if the member has not been receiving that benefit for a continuous period of more than 2 years as of the date of application;

(2) not have received any retirement annuity under this Article beginning earlier than August 1, 2002;

(3) file with the Board on or before December 31, 2002 a written application requesting the benefits provided in this Section;

(4) terminate employment under this Article no later than December 31, 2002 (or the date established under subsection (d), if applicable);

(5) by the date of termination of service, have at least 8 years of creditable service under this Article, without the use of any creditable service established under this Section;

(6) by the date of termination of service, have at least 5 years of service credit earned while participating in the System as a teacher employed by a department; and

(7) not receive any early retirement benefit under Section 14-108.3 of this Code.

For the purposes of this Section, "department" means a department as defined in Section 14-103.04 that employs a teacher as defined in this Article.

(b) An eligible person may establish up to 5 years of creditable service under this Article by making the contributions specified in subsection (c). In addition, for each period of creditable service established under this Section, a person's age at retirement shall be deemed to be enhanced by an equivalent period.

The creditable service established under this Section may be used for all purposes under this Article and the Retirement Systems Reciprocal Act, except for the computation of final average salary, the determination of salary or compensation under this Article or any other Article of this Code, or the determination of eligibility for or the computation of benefits under Section 16-133.2.

The age enhancement established under this Section may be used for all purposes under this Article (including calculation of a proportionate annuity payable by this System under the Retirement Systems Reciprocal Act), except for purposes of a retirement annuity under Section 16-133(a)(A), a reversionary annuity under Section 16-136, the required distributions under Section 16-142.3, and the determination of eligibility for or the computation of benefits under Section 16-133.2. Age enhancement established under this Section may be used in determining benefits payable under Article 14 of this Code under the Retirement Systems Reciprocal Act (subject to the limitations on the use of age enhancement provided in Section 14-108.3); age enhancement established under this Section shall not be used in determining benefits payable under other Articles of this Code under the Retirement Systems Reciprocal Act.

(c) For all creditable service established under this Section, a person must pay to the System an employee contribution to be determined by the System, equal to 9.0% of the member's highest annual salary rate that would be used in the determination of the average salary for retirement annuity purposes if the member retired immediately after withdrawal, for each year of creditable service established under this Section.

If the member receives a lump sum payment for accumulated vacation, sick leave, and personal leave upon withdrawal from service, and the net amount of that lump sum payment is at least as great as the amount of the contribution required under this Section, the entire contribution must be paid by the employee by payroll deduction. If there is no such lump sum payment, or if it is less than the contribution required under this Section, the member shall make an initial payment by payroll deduction, equal to the net amount of the lump sum payment for accumulated vacation, sick leave, and personal leave, and have the remaining amount due treated as a reduction from the retirement annuity in 24 equal monthly installments beginning in the month in which the retirement annuity takes effect. The required contribution may be paid as a pre-tax deduction from earnings.

(d) In order to ensure that the efficient operation of State government is not jeopardized by the simultaneous retirement of large numbers of key personnel, the director or other head of a department may, for key employees of that department, extend the December 31, 2002 deadline for terminating employment under this Article established in subdivision (a)(4) of this Section to a date not later than April 30, 2003 by so notifying the System in writing by December 31, 2002.

(e) Except as otherwise provided in Section 16-118, a A person who has received any age enhancement or creditable service under this Section and who reenters contributing service under this Article or Article 14 shall thereby forfeit that age enhancement and creditable service, and become entitled to a refund of the contributions made pursuant to this Section.

(f) The System shall determine the amount of the increase in unfunded accrued liability resulting from the granting of early retirement incentives under this Section and shall report that amount to the Governor and the Pension Laws Commission (or its successor, the Economic and Fiscal Commission) on or before November 15, 2003. The increase in liability reported under this subsection (f) shall not be included in the calculation of the required State contribution under Section 16-158.

(g) The System shall determine the amount of the annual State contribution necessary to amortize on a level dollar-payment basis, over a period of 10 years at 8.5% interest, compounded annually, an amount equal to the increase in unfunded accrued liability determined under subsection (f) minus $1,000,000. The System shall certify the amount of this annual State contribution to the Governor, the State Comptroller, the Governor's Office of Management and Budget (formerly Bureau of the Budget), and the Pension Laws Commission (or its successor, the Economic and Fiscal Commission) on or before November 15, 2003.

In addition to the contributions otherwise required under this Article, the State shall appropriate and pay to the System (1) an amount equal to $1,000,000 in State fiscal year 2004 and (2) in each of State fiscal years 2005 through 2013, an amount equal to the annual State contribution certified by the System under this subsection (g).

(h) The Pension Laws Commission (or its successor, the Economic and Fiscal Commission) shall determine and report to the General Assembly, on or before January 1, 2004 and annually thereafter through the year 2013, its estimate of (1) the annual amount of payroll savings likely to be realized by the State as a result of the early retirement of persons receiving early retirement incentives under this Section and (2) the net annual savings or cost to the State from the program of early retirement incentives created under this Section.

The System, the Department of Central Management Services, the Governor's Office of Management and Budget (formerly Bureau of the Budget), and all other departments shall provide to the Commission any assistance that the Commission may request with respect to its reports under this Section. The Commission may require departments to provide it with any information that it deems necessary or useful with respect to its reports under this Section, including without limitation information about (1) the final earnings of former department employees who elected to receive benefits under this Section, (2) the earnings of current department employees holding the positions vacated by persons who elected to receive benefits under this Section, and (3) positions vacated by persons who elected to receive benefits under this Section that have not yet been refilled.

(i) The changes made to this Section by this amendatory Act of the 92nd General Assembly do not apply to persons who retired under this Section on or before May 1, 1992.

(Source: P.A. 92-566, eff. 6-25-02; 93-632, eff. 2-1-04.)

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