94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB0035


 
Introduced 1/26/2005, by Sen. Iris Y. Martinez
 
SYNOPSIS AS INTRODUCED:
 		















40 ILCS 5/17-116
  from Ch. 108 1/2, par. 17-116



40 ILCS 5/17-119.1





30 ILCS 805/8.29 new










    Amends the Chicago Teacher Article of the Illinois Pension Code. Provides that the service retirement pension for a teacher who retires on or after the effective date of this amendatory Act shall be 2.4% (now 2.2%) of
average salary for each year of creditable service.  Eliminates the required contribution for converting past service to
the augmented retirement formula, and provides for a refund of such
contributions already paid.  Also provides for recalculation of the
pension and a lump sum payment of the difference between the augmented
and unaugmented rates for certain pensioners.  Amends the State Mandates
Act to require implementation without reimbursement.  Effective immediately.
















LRB094 03457 LRD 33460 b

















FISCAL NOTE ACT MAY APPLY


PENSION IMPACT NOTE ACT MAY APPLY


STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
















 


 


A BILL FOR









 











SB0035

LRB094 03457 LRD 33460 b






1
    AN ACT in relation to public employee benefits. 

 
2
    Be it enacted by the People of the State of Illinois, 
3
represented in the General Assembly: 


 
4
    Section 5. The Illinois Pension Code is amended by changing 
5
Sections 17-116 and
17-119.1 as follows:


 



6
    (40 ILCS 5/17-116)  (from Ch. 108 1/2, par. 17-116)


7
    Sec. 17-116. Service retirement pension. 

8
    (a) Each teacher having 20 years of service upon attainment 
9
of age 55,
or who thereafter attains age 55 shall be entitled 
10
to a service retirement
pension upon or after attainment of age 
11
55; and each teacher in service on or
after July 1, 1971, with 
12
5 or more but less than 20 years of service shall be
entitled 
13
to receive a service retirement pension upon or after 
14
attainment of
age 62. 

15
    (b) The service retirement pension
for a teacher who 
16
retires on or after June 25, 1971, at age
60 or over, shall be 
17
calculated as follows:


18
        (1) For creditable service earned before July 1, 1998 
19
    that has not been
augmented under Section 17-119.1: 1.67% 
20
    for each of the first 10 years
of service; 1.90% for each 
21
    of the next 10 years of service; 2.10% for
each year of 
22
    service in excess of 20 but not exceeding 30; and 2.30% for

23
    each year of service in excess of 30, based upon average 
24
    salary as
herein defined.


25
        (2) For creditable service earned on or after July 1, 
26
    1998 by a member
who has at least 30 years of creditable 
27
    service on July 1, 1998 and who does
not elect to augment 
28
    service under Section 17-119.1:  2.3% of average salary
for 
29
    each year of creditable service earned on or after July 1, 
30
    1998.


31
        (3) For all other creditable service: for persons who 
32
    retire before the effective date of this amendatory Act of 
 


 






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    the 94th General Assembly,  2.2% of average salary
for each 
2
    year of creditable service, for persons who retire on or 
3
    after the effective date of this amendatory Act of the 94th 
4
    General Assembly, 2.4% of average salary
for each year of 
5
    creditable service.

6
    (c) When computing such service retirement pensions, the

7
following conditions shall apply:


8
        1. Average salary shall consist of the average annual 
9
    rate of salary
for the 4 consecutive years of validated 
10
    service within the last 10 years
of service when such 
11
    average annual rate was highest.  In the determination
of 
12
    average salary for retirement allowance purposes, for 
13
    members who
commenced employment after August 31, 1979, 
14
    that part of the salary for any
year shall be excluded 
15
    which exceeds the annual full-time salary rate for
the 
16
    preceding year by more than 20%.  In the case of a member 
17
    who commenced
employment before August 31, 1979 and who 
18
    receives salary during any year
after September 1, 1983 
19
    which exceeds the annual full time salary rate for
the 
20
    preceding year by more than 20%,
an Employer and other 
21
    employers of
eligible contributors as defined in Section 
22
    17-106
shall pay to the Fund an amount equal to the present 
23
    value of the
additional service retirement pension 
24
    resulting from such excess salary.
The present value of the 
25
    additional service retirement pension shall be
computed by 
26
    the Board on the basis of actuarial tables adopted by the

27
    Board.  If a member elects to receive a pension from this 
28
    Fund
provided by
Section 20-121, his salary under the State 
29
    Universities Retirement System
and the Teachers' 
30
    Retirement System of the State of Illinois shall be

31
    considered in determining such average salary.  Amounts 
32
    paid after the
effective date of this amendatory Act of 
33
    1991 for unused vacation time
earned after that effective 
34
    date shall not under any circumstances be
included in the 
35
    calculation of average salary or the annual rate of salary

36
    for the purposes of this Article.


 


 






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        2. Proportionate credit shall be given for validated 
2
    service of less
than one year.


3
        3. For retirement at age 60 or over the pension shall 
4
    be payable at
the full rate.


5
        4. For separation from service below age 60 to a 
6
    minimum age of 55,
the pension shall be discounted at the 
7
    rate of 1/2 of one per cent for
each month that the age of 
8
    the contributor is less than 60, but a
teacher may elect to 
9
    defer the effective date of pension in order to
eliminate 
10
    or reduce this discount.  This discount shall not be 
11
    applicable
to any participant who has at least 34 years of 
12
    service or a
retirement pension of at least 74.6% of 
13
    average salary on the date the
retirement annuity begins.


14
        5. No additional pension shall be granted for service 
15
    exceeding 45
years.  Beginning June 26, 1971 no pension 
16
    shall exceed the greater of
$1,500 per month or 75% of 
17
    average salary as herein defined.


18
        6. Service retirement pensions shall begin on the 
19
    effective date of
resignation, retirement, the day 
20
    following the close of the payroll
period for which service 
21
    credit was validated, or the time the person
resigning or 
22
    retiring attains age 55, or on a date elected by the

23
    teacher, whichever shall be latest.


24
        7. A member who is eligible to receive a retirement 
25
    pension of at least
74.6% of average salary and will attain 
26
    age 55 on or before December 31
during the year which 
27
    commences on July 1 shall be deemed to attain age 55 on
the 
28
    preceding June 1.


29
        8. A member retiring after the effective date of this 
30
    amendatory Act
of 1998 shall receive a pension equal to 75% 
31
    of average salary if the
member is qualified to receive a 
32
    retirement pension equal to at least 74.6%
of average 
33
    salary under this Article or as proportional annuities 
34
    under
Article 20 of this Code.

35
(Source: P.A. 90-566, eff. 1-2-98; 90-582, eff. 5-27-98.)


 
 


 






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    (40 ILCS 5/17-119.1)

2
    Sec. 17-119.1. Optional increase in retirement annuity.


3
    (a) Beginning on the effective date of this amendatory Act 
4
of the 94th
General Assembly, a member of the Fund shall
may 
5
qualify for the
augmented rate
under subdivision (b)(3) of 
6
Section 17-116 for all years of creditable service
without

7
earned before July 1, 1998
by making any
the optional

8
contribution.  Any such contribution already paid under this 
9
Section shall
be refunded by the Fund to the teacher or 
10
pensioner (or, if deceased, to the
teacher or pensioner's 
11
survivor, beneficiary, or estate), together with
interest at 
12
the rate of 5%, compounded annually, from the date of payment 
13
of
the contribution to the date of refund; except that any such 
14
contribution that
has been paid by an employer under subsection 
15
(e) shall be refunded to the
employer.
specified in subsection 
16
(b); except that a member who retires
on or after July 1, 1998 
17
with at least 30 years of creditable service at
retirement 
18
qualifies for the augmented rate without making any 
19
contribution
under subsection (b).


20
    Any member who retires on or after July 1, 1998 and before 
21
the effective
date of this amendatory Act of the 94th
92nd 
22
General Assembly and
whose pension was calculated using an 
23
unaugmented rate may elect to have the
pension recalculated 
24
using the applicable augmented rate and to
with at
least 30 
25
years of creditable service shall be paid a lump sum equal to 
26
the
amount he or she would have received under the augmented 
27
rate minus the amount
he or she actually received prior to the 
28
effective date of the
recalculation.


29
    The changes to this Section made by this amendatory Act of 
30
the 94th
General Assembly apply without regard to whether the 
31
member was in service
on or after its effective date and 
32
notwithstanding Section 17-157.


33
    A member may not elect to qualify for the augmented rate 
34
for only
a portion of his or her creditable service earned 
35
before July 1, 1998.


36
    (b) (Blank).
The contribution shall be an amount equal to 
 


 






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1.0% of the
member's
highest salary rate in the 4 consecutive 
2
school years immediately prior to but
not including the school 
3
year in which the application occurs, multiplied by
the number 
4
of years of creditable service earned by the member before July 
5
1,
1998 or 20, whichever is less.  This contribution shall be 
6
reduced by 1.0% of
that salary rate for every 3 full years of 
7
creditable service earned by the
member after June 30, 1998.  
8
The contribution shall be further reduced at
the rate of 25% of 
9
the contribution (as reduced for service after June 30,
1998) 
10
for each year of the member's total creditable service in 
11
excess of 34
years.  The contribution shall not in any event 
12
exceed 20% of that salary
rate.

13
    The member shall pay to the Fund the amount of the 
14
contribution as
calculated at the time of application under 
15
this Section.  The amount of the
contribution determined under 
16
this subsection shall be recalculated at the time
of 
17
retirement, and if the Fund determines that the amount paid by 
18
the member
exceeds the recalculated amount, the Fund shall 
19
refund the difference to the
member with regular interest from 
20
the date of payment to the date of refund.

21
    The contribution required by this subsection shall be paid 
22
in one of the
following ways or in a combination of the 
23
following ways that does not extend
over more than 5 years:

24
        (i) in a lump sum on or before the date of retirement;

25
        (ii) in substantially equal installments over a period 
26
    of time not to
exceed 5 years, as a deduction from salary 
27
    in accordance with Section 17-130.2;

28
        (iii) in
substantially equal monthly installments over 
29
    a 24-month period, by a
deduction from the annuitant's 
30
    monthly benefit.


31
    (c) (Blank).
If the member fails to make the full 
32
contribution under
this Section
in a timely fashion, the 
33
payments made under this Section shall be refunded
to the 
34
member, without interest.  If the member (including a member who 
35
has
become an annuitant) dies before making the full

36
contribution, the payments made under this Section shall be 
 


 






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refunded to the
member's designated beneficiary if there is no 
2
survivor's or children's
pension benefit payable.  If there is a 
3
survivor's or children's benefit
payable, then all payments 
4
made under this Section shall be retained by the
Fund and all 
5
such survivor's or children's benefits payable shall be 
6
calculated
as if all contributions required under this Section 
7
have been paid in full.


8
    (d) (Blank).
For purposes of this Section and subsection 
9
(b) of
Section 17-116, optional creditable service established 
10
by a member shall be
deemed to have been earned at the time of 
11
the employment or other qualifying
event upon which the service 
12
is based, rather than at the time the credit was
established in 
13
this Fund.


14
    (e) (Blank).
The contributions required under this Section 
15
are the
responsibility of the teacher and not the teacher's 
16
employer.  However, an
employer of teachers may, after the 
17
effective date of this amendatory Act of
1998, specifically 
18
agree, through collective bargaining or otherwise, to make
the 
19
contributions required by this Section on behalf of those 
20
teachers.


21
(Source: P.A. 91-17, eff. 6-4-99; 92-416, eff. 8-17-01; 92-599, 
22
eff. 6-28-02;
92-651, eff. 7-11-02.)


 
23
    Section 90. The State Mandates Act is amended by adding 
24
Section 8.29 as
follows:


 
25
    (30 ILCS 805/8.29 new)

26
    Sec. 8.29. Exempt mandate. Notwithstanding Sections 6 and 8 
27
of this
Act, no reimbursement by the State is required for the 
28
implementation of
any mandate created by this amendatory Act of 
29
the 94th General Assembly.

 
30
    Section 99. Effective date.   This Act takes effect upon 
31
becoming law.