SB0038 94TH GENERAL ASSEMBLY

LRB094 03439 LRD 33442 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB0038

Introduced 1/26/2005, by Sen. James A. DeLeo

SYNOPSIS AS INTRODUCED:

40 ILCS 5/17-121	from Ch. 108 1/2, par. 17-121
40 ILCS 5/17-122	from Ch. 108 1/2, par. 17-122
40 ILCS 5/17-124	from Ch. 108 1/2, par. 17-124
40 ILCS 5/17-125	from Ch. 108 1/2, par. 17-125
30 ILCS 805/8.29 new

Amends the Chicago Teachers Article of the Illinois Pension Code. Provides that attainment of age 18 does not terminate the children's pension of a child who is disabled and was dependent upon a deceased teacher at the time of his or her death. Provides that, if there is no eligible surviving spouse or eligible child of a deceased teacher, his or her parent is entitled to a survivor's pension if he or she was dependent upon the deceased teacher at the time of his or her death. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT in relation to 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 17-121, 17-122, 17-124, and 17-125 as follows:

(40 ILCS 5/17-121) (from Ch. 108 1/2, par. 17-121)

Sec. 17-121. Survivor's pensions - Eligibility.

(a) A surviving spouse of a teacher shall be entitled to a survivor's pension only if the surviving spouse was married to the teacher for at least one year immediately prior to the teacher's death.

The changes made to this subsection (a) by this amendatory Act of the 92nd General Assembly apply (i) only to the surviving spouse of a person who dies on or after the effective date of this amendatory Act, and only if the amount of any refund of contributions for survivor's pension is repaid with interest in accordance with subsection (f), and (ii) notwithstanding Section 17-157 and without regard to whether the deceased person was in service on or after the effective date of this amendatory Act.

(b) If the surviving spouse is under age 50 and there are no eligible minor children born to or legally adopted by the contributor and his or her surviving spouse, payment of the survivor's pension shall begin when the surviving spouse attains age 50.

(c) Beginning January 1, 2003, the remarriage of a surviving spouse at any age does not terminate his or her survivor's pension.

A surviving spouse whose survivor's pension (or expectation of a survivor's pension upon attainment of age 50) was terminated before January 1, 2003 due to remarriage and who applies for reinstatement of that pension and repays the amount of any refund of contributions for survivor's pension with interest in accordance with subsection (f) shall be entitled to have the survivor's pension (or expectation of a survivor's pension upon attainment of age 50) reinstated. The reinstated pension shall begin to accrue on the first day of the month following the month in which the application and repayment, if any, are received by the Fund, but in no event sooner than January 1, 2003 and, if subsection (b) applies, no sooner than upon attainment of age 50. The reinstated pension shall include any one-time or annual increases in the survivor's pension received prior to the date of termination, but not any increases that would otherwise have accrued from the date of termination to the date of reinstatement.

This subsection (c) applies notwithstanding Section 17-157 and without regard to whether the deceased teacher was in service on or after the effective date of this amendatory Act of the 92nd General Assembly.

(d) Except as provided in subsection (c), remarriage of the surviving spouse prior to September 1, 1983 while in receipt of a survivor's pension shall permanently terminate payment thereof, regardless of any subsequent change in marital status; however, beginning September 1, 1983, remarriage of a surviving spouse after attainment of age 55 shall not terminate the survivor's pension.

A surviving spouse whose pension was terminated on or after September 1, 1983 due to remarriage after attainment of age 55, and who applies for reinstatement of that pension before January 1, 1990, shall be entitled to have the pension reinstated effective January 1, 1990.

(e) A surviving spouse of a member or annuitant under this Fund who is also a dependent beneficiary under the provisions of Section 16-140 is eligible for a reciprocal survivor's pension, provided that any refund of survivor's pension contributions is repaid to the Fund and application is made within 30 days after the effective date of this amendatory Act of the 92nd General Assembly.

(f) If a refund of contributions for survivor's pension has been paid, a person choosing to establish or reestablish the right to receive a survivor's pension pursuant to the changes made to this Section by this amendatory Act of the 92nd General Assembly must first repay to the Fund the amount of the refund of contributions for survivor's pension, together with interest thereon at the rate of 5% per year, compounded annually, from the date of the refund to the date of repayment.

(Source: P.A. 92-416, eff. 8-17-01; 92-599, eff. 6-28-02.)

(40 ILCS 5/17-122) (from Ch. 108 1/2, par. 17-122)

Sec. 17-122. Survivor's and children's pensions - Amount. Upon the death of a teacher who has completed at least 1 1/2 years of contributing service with either this Fund or the State Universities Retirement System or the Teachers' Retirement System of the State of Illinois, provided his death occurred while (a) in active service covered by the Fund or during his first 18 months of continuous employment without a break in service under any other participating system as defined in the Illinois Retirement Systems Reciprocal Act except the State Universities Retirement System and the Teachers' Retirement System of the State of Illinois, (b) on a creditable leave of absence, (c) on a noncreditable leave of absence of no more than one year, or (d) a pension was deferred or pending provided the teacher had at least 10 years of validated service credit, or upon the death of a pensioner otherwise qualified for such benefit, the surviving spouse, eligible and unmarried minor children of the deceased teacher under age 18, and dependent parents of the deceased teacher shall be entitled to pensions, under the conditions stated hereinafter. Such survivor's and children's pensions shall be based on the average of the 4 highest consecutive years of salary in the last 10 years of service or on the average salary for total service, if total service has been less than 4 years, according to the following percentages:

30% of average salary or 50% of the retirement pension earned by the teacher, whichever is larger, subject to the prescribed maximum monthly payment, for a surviving spouse alone on attainment of age 50;

60% of average salary for a surviving spouse and eligible minor children of the deceased teacher.

If no eligible spouse survives, or the surviving spouse remarries, or the parent of the children of the deceased member is otherwise ineligible for a survivor's pension, a children's pension for eligible minor children under age 18 shall be paid to their parent or legal guardian for their benefit according to the following percentages:

30% of average salary for one child;

60% of average salary for 2 or more children.

A disabled child who was dependent upon a deceased teacher at the time of his or her death whose children's pension was terminated due to attainment of age 18 may apply to the Fund for reinstatement of that pension. An application for reinstatement shall be accompanied by the payment of an amount equal to (1) the amount of any refund received by the deceased teacher under Section 17-125 and (2) interest thereon from the date of the payment of the refund to the date of application for reinstatement at the rate of 5% per year. The reinstated pension shall begin to accrue on the first day of the month following the month the application is received by the Fund, but in no event sooner than January 1, 2006. However, if the pension is payable to anyone else, the pension shall not be reinstated until the pension is no longer payable to any eligible surviving spouse or other eligible children. A reinstated annuity shall include any one-time or annual increases received prior to the date of termination, as well as any increases that would otherwise have accrued from the date of termination to the date of reinstatement.

The changes made to this Section by this amendatory Act of the 94th General Assembly pertaining to reinstatement of a children's pension apply notwithstanding Section 17-157 and without regard to whether the deceased teacher was in service on or after the effective date of this amendatory Act.

If there is no eligible spouse and no eligible child, then a pension shall be paid to the eligible parents of the deceased teacher, if any, according to the following percentages:

30% of average salary for one eligible parent;

60% of average salary for 2 eligible parents.

On January 1, 1981, any survivor or child who was receiving a survivor's or children's pension on or before January 1, 1971, shall have his survivor's or children's pension then being paid increased by 1% for each full year which has elapsed from the date the pension began. On January 1, 1982, any survivor or child whose pension began after January 1, 1971, but before January 1, 1981, shall have his survivor's or children's pension then being paid increased 1% for each full year which has elapsed from the date the pension began. On January 1, 1987, any survivor or child whose pension began on or before January 1, 1977, shall have the monthly survivor's or children's pension increased by $1 for each full year which has elapsed since the pension began.

Beginning January 1, 1990, every survivor's and children's pension shall be increased (1) on each January 1 occurring on or after the commencement of the pension if the deceased teacher died while receiving a retirement pension, or (2) in other cases, on each January 1 occurring on or after the first anniversary of the commencement of the pension, by an amount equal to 3% of the current amount of the pension, including all increases previously granted under this Article, notwithstanding Section 17-157. Such increases shall apply without regard to whether the deceased teacher was in service on or after the effective date of this amendatory Act of 1991, but shall not accrue for any period prior to January 1, 1990.

Subject to the minimum established below, the maximum amount of pension for a surviving spouse alone or one minor child shall be $400 per month, and the maximum combined pensions for a surviving spouse and children of the deceased teacher shall be $600 per month, with individual pensions adjusted for all beneficiaries pro rata to conform with this limitation. If proration is unnecessary the minimum survivor's and children's pensions shall be $40 per month. The minimum total survivor's and children's pension payable upon the death of a contributor or annuitant which occurs after December 31, 1986, shall be 50% of the earned retirement pension of such contributor or annuitant, calculated without early retirement discount in the case of death in service.

On death after retirement, the total survivor's and children's pensions shall not exceed the monthly retirement or disability pension paid to the deceased retirant. Survivor's and children's benefits described in this Section shall apply to all service and disability pensioners eligible for a pension as of July 1, 1981.

For the purposes of this Section, the term "eligible child" means an unmarried minor child of a deceased teacher who is under 18 years of age or a child of a deceased teacher who is disabled and was dependent upon the deceased teacher at the time of his or her death.

For the purposes of this Section, the term "eligible parent" means a parent of a deceased teacher who was dependent upon the teacher at the time of his or her death.

In this Article, the term "survivor's and children's benefits" includes benefits paid to an eligible parent and the term "survivor's and children's pension" includes a pension paid to an eligible parent, unless the context requires otherwise.

(Source: P.A. 90-32, eff. 6-27-97; 90-566, eff. 1-2-98.)

(40 ILCS 5/17-124) (from Ch. 108 1/2, par. 17-124)

Sec. 17-124. Death Benefits - Death on pension. On written application to the Board, there shall be paid to the estate of a deceased teacher-pensioner pension payments, accrued, temporarily withheld or represented by checks uncashed at the date of his death and the excess, if any, of an amount equal to his refundable contributions for service or disability retirement pension over pension to the date of death; provided, that if there be filed with the Board prior to the death of the pensioner his written direction, signed and acknowledged before an officer authorized to take acknowledgments, that such payments be paid to designated beneficiaries, they shall be so paid on written application therefor to the Board. If none of several named beneficiaries survives the pensioner and no directive was furnished by the member to cover this contingency, the deceased beneficiary's share shall be paid to the estate of the pensioner.

If a reversionary pension is payable upon death of a pensioner, the determination and payment of any refund of contributions payable under this Section shall be made upon death of the reversionary pensioner. At such time a refund of contributions less (1) the amount contributed for annual increases in pension and (2) total pension payments to the teacher-pensioner and survivor shall be paid in the manner provided in this Section to the designated beneficiaries, or estate of the deceased survivor.

If a pension is payable to a surviving spouse, eligible child, or an eligible parent and/or minor children upon death of a pensioner, the determination of any refund of contributions payable under this Section shall be made when the last of those pensions is no longer payable upon death of the survivor and marriage or attainment of age 18 of minor children. At that time a refund of contributions for retirement and survivors' and children's pensions less total pension payments to the teacher-pensioner, surviving spouse, eligible survivor and minor children, and eligible parents shall be paid in the manner provided in this Section to the designated beneficiaries, or estate of the deceased survivor.

If eligible beneficiaries for survivors' or children's benefits existed at the time of a pensioner's retirement but not on the date of his death thereafter, the excess of total contributions for retirement and survivors' and children's pensions over pensions paid shall be determined upon death of the pensioner and paid in the manner provided in this Section to the designated beneficiaries, or estate of the deceased teacher-pensioner.

Reversionary or survivor's pension payments accrued, temporarily withheld, or represented by uncashed checks to the date of death shall be paid to the reversionary pensioner's or survivor's designated beneficiaries, or estate in the manner provided in this Section.

On death of a retired teacher whose death occurs on or after the effective date of this amendatory Act of 1991, there shall be payable a lump sum death benefit equal to 6 times the teacher's salary rate for his last month of service or $10,000, whichever is less, upon death during the first year on pension minus 1/5 of the death benefit, as defined herein, for each year or fraction thereof on pension after the first full year, to a minimum of $5,000.

Notwithstanding Section 17-157, the changes made in this Section and Section 17-123 by this amendatory Act of 1991 shall apply to teachers dying on or after the effective date of this amendatory Act of 1991 without regard to whether service terminated prior to that date.

(Source: P.A. 90-566, eff. 1-2-98.)

(40 ILCS 5/17-125) (from Ch. 108 1/2, par. 17-125)

Sec. 17-125. Refund of contributions. Upon certification by the Employer of his resignation or cancellation of his teaching certificate prior to completion of the minimum term of service required to establish eligibility for a pension and on written application therefor, a teacher shall be paid a refund of all the amounts he has contributed to the Fund, less any former refund that has not been repaid.

Upon certification by the Employer of his resignation or cancellation of his teaching certificate after completion of the minimum term of service required to establish eligibility for a pension and on written application therefor, a teacher shall be paid a refund of all the amounts he has contributed, less (1) any former refund that has not been repaid, and (2) pension payments received, provided he has executed and delivered to the Board his written receipt and release in that behalf. Thereupon, he shall have no further interest in or claim against the Fund.

A request for refund under either of the preceding paragraphs shall be considered valid if withdrawal from service occurred at least 2 months prior to the filing of such request.

Upon retirement of a teacher either on immediate or deferred pension, if the teacher is not then married, or if his spouse, or children, or parents do not meet the qualifying conditions for survivor's or children's pensions, the total amount contributed by him or otherwise paid by deductions from salary for survivor's pension, shall be refunded to him, without interest. No survivor's or children's pension rights shall be effective thereafter in such a case.

During a teacher's term of service, no refund is payable except contributions made in error.

(Source: P.A. 90-566, eff. 1-2-98.)

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

(30 ILCS 805/8.29 new)

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

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