95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB6714

 

Introduced , by Rep. Cynthia Soto

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/22-101B
30 ILCS 805/8.32 new

    If and only if Senate Bill 1920 of the 95th General Assembly becomes law, amends the Illinois Pension Code. In provisions concerning the health care benefits for retirees of the Chicago Transit Authority, provides that a retiree hired on or before September 5, 2001 who retires with 25 years or more of continuous service shall be eligible for retiree health care benefits upon retirement (formerly, retirees who retired prior to the effective date of Senate Bill 1920 with 25 years or more of continuous service or who retires within 90 days after that effective date or by January 1, 2009, whichever is later, with 25 years or more of continuous service were eligible). Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

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1     AN ACT concerning public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. If and only if Senate Bill 1920 of the 95th
5 General Assembly becomes law, the Illinois Pension Code is
6 amended by changing Section 22-101B as follows:
 
7     (40 ILCS 5/22-101B)
8     Sec. 22-101B. Health Care Benefits.
9     (a) The Chicago Transit Authority (hereinafter referred to
10 in this Section as the "Authority") shall take all actions
11 lawfully available to it to separate the funding of health care
12 benefits for retirees and their dependents and survivors from
13 the funding for its retirement system. The Authority shall
14 endeavor to achieve this separation as soon as possible, and in
15 any event no later than July 1, 2009.
16     (b) Effective 90 days after the effective date of this
17 amendatory Act of the 95th General Assembly, a Retiree Health
18 Care Trust is established for the purpose of providing health
19 care benefits to eligible retirees and their dependents and
20 survivors in accordance with the terms and conditions set forth
21 in this Section 22-101B. The Retiree Health Care Trust shall be
22 solely responsible for providing health care benefits to
23 eligible retirees and their dependents and survivors by no

 

 

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1 later than July 1, 2009, but no earlier than January 1, 2009.
2         (1) The Board of Trustees shall consist of 7 members
3     appointed as follows: (i) 3 trustees shall be appointed by
4     the Chicago Transit Board; (ii) one trustee shall be
5     appointed by an organization representing the highest
6     number of Chicago Transit Authority participants; (iii)
7     one trustee shall be appointed by an organization
8     representing the second-highest number of Chicago Transit
9     Authority participants; (iv) one trustee shall be
10     appointed by the recognized coalition representatives of
11     participants who are not represented by an organization
12     with the highest or second-highest number of Chicago
13     Transit Authority participants; and (v) one trustee shall
14     be selected by the Regional Transportation Authority Board
15     of Directors, and the trustee shall be a professional
16     fiduciary who has experience in the area of collectively
17     bargained retiree health plans. Trustees shall serve until
18     a successor has been appointed and qualified, or until
19     resignation, death, incapacity, or disqualification.
20         Any person appointed as a trustee of the board shall
21     qualify by taking an oath of office that he or she will
22     diligently and honestly administer the affairs of the
23     system, and will not knowingly violate or willfully permit
24     the violation of any of the provisions of law applicable to
25     the Plan, including Sections 1-109, 1-109.1, 1-109.2,
26     1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois

 

 

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1     Pension Code.
2         Each trustee shall cast individual votes, and a
3     majority vote shall be final and binding upon all
4     interested parties, provided that the Board of Trustees may
5     require a supermajority vote with respect to the investment
6     of the assets of the Retiree Health Care Trust, and may set
7     forth that requirement in the trust agreement or by-laws of
8     the Board of Trustees. Each trustee shall have the rights,
9     privileges, authority and obligations as are usual and
10     customary for such fiduciaries.
11         (2) The Board of Trustees shall establish and
12     administer a health care benefit program for eligible
13     retirees and their dependents and survivors. The health
14     care benefit program for eligible retirees and their
15     dependents and survivors shall not contain any plan which
16     provides for more than 90% coverage for in-network services
17     or 70% coverage for out-of-network services after any
18     deductible has been paid.
19         (3) The Retiree Health Care Trust shall be administered
20     by the Board of Trustees according to the following
21     requirements:
22             (i) The Board of Trustees may cause amounts on
23         deposit in the Retiree Health Care Trust to be invested
24         in those investments that are permitted investments
25         for the investment of moneys held under any one or more
26         of the pension or retirement systems of the State, any

 

 

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1         unit of local government or school district, or any
2         agency or instrumentality thereof. The Board, by a vote
3         of at least two-thirds of the trustees, may transfer
4         investment management to the Illinois State Board of
5         Investment, which is hereby authorized to manage these
6         investments when so requested by the Board of Trustees.
7             (ii) The Board of Trustees shall establish and
8         maintain an appropriate funding reserve level which
9         shall not be less than the amount of incurred and
10         unreported claims plus 12 months of expected claims and
11         administrative expenses.
12             (iii) The Board of Trustees shall make an annual
13         assessment of the funding levels of the Retiree Health
14         Care Trust and shall submit a report to the Auditor
15         General at least 90 days prior to the end of the fiscal
16         year. The report shall provide the following:
17                 (A) the actuarial present value of projected
18             benefits expected to be paid to current and future
19             retirees and their dependents and survivors;
20                 (B) the actuarial present value of projected
21             contributions and trust income plus assets;
22                 (C) the reserve required by subsection
23             (b)(3)(ii); and
24                 (D) an assessment of whether the actuarial
25             present value of projected benefits expected to be
26             paid to current and future retirees and their

 

 

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1             dependents and survivors exceeds or is less than
2             the actuarial present value of projected
3             contributions and trust income plus assets in
4             excess of the reserve required by subsection
5             (b)(3)(ii).
6             If the actuarial present value of projected
7         benefits expected to be paid to current and future
8         retirees and their dependents and survivors exceeds
9         the actuarial present value of projected contributions
10         and trust income plus assets in excess of the reserve
11         required by subsection (b)(3)(ii), then the report
12         shall provide a plan of increases in employee, retiree,
13         dependent, or survivor contribution levels, decreases
14         in benefit levels, or both, which is projected to cure
15         the shortfall over a period of not more than 10 years.
16         If the actuarial present value of projected benefits
17         expected to be paid to current and future retirees and
18         their dependents and survivors is less than the
19         actuarial present value of projected contributions and
20         trust income plus assets in excess of the reserve
21         required by subsection (b)(3)(ii), then the report may
22         provide a plan of decreases in employee, retiree,
23         dependent, or survivor contribution levels, increases
24         in benefit levels, or both, to the extent of the
25         surplus.
26             (iv) The Auditor General shall review the report

 

 

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1         and plan provided in subsection (b)(3)(iii) and issue a
2         determination within 90 days after receiving the
3         report and plan, with a copy of such determination
4         provided to the General Assembly and the Regional
5         Transportation Authority, as follows:
6                 (A) In the event of a projected shortfall, if
7             the Auditor General determines that the
8             assumptions stated in the report are not
9             unreasonable in the aggregate and that the plan of
10             increases in employee, retiree, dependent, or
11             survivor contribution levels, decreases in benefit
12             levels, or both, is reasonably projected to cure
13             the shortfall over a period of not more than 10
14             years, then the Board of Trustees shall implement
15             the plan. If the Auditor General determines that
16             the assumptions stated in the report are
17             unreasonable in the aggregate, or that the plan of
18             increases in employee, retiree, dependent, or
19             survivor contribution levels, decreases in benefit
20             levels, or both, is not reasonably projected to
21             cure the shortfall over a period of not more than
22             10 years, then the Board of Trustees shall not
23             implement the plan, the Auditor General shall
24             explain the basis for such determination to the
25             Board of Trustees, and the Auditor General may make
26             recommendations as to an alternative report and

 

 

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1             plan.
2                 (B) In the event of a projected surplus, if the
3             Auditor General determines that the assumptions
4             stated in the report are not unreasonable in the
5             aggregate and that the plan of decreases in
6             employee, retiree, dependent, or survivor
7             contribution levels, increases in benefit levels,
8             or both, is not unreasonable in the aggregate, then
9             the Board of Trustees shall implement the plan. If
10             the Auditor General determines that the
11             assumptions stated in the report are unreasonable
12             in the aggregate, or that the plan of decreases in
13             employee, retiree, dependent, or survivor
14             contribution levels, increases in benefit levels,
15             or both, is unreasonable in the aggregate, then the
16             Board of Trustees shall not implement the plan, the
17             Auditor General shall explain the basis for such
18             determination to the Board of Trustees, and the
19             Auditor General may make recommendations as to an
20             alternative report and plan.
21                 (C) The Board of Trustees shall submit an
22             alternative report and plan within 45 days after
23             receiving a rejection determination by the Auditor
24             General. A determination by the Auditor General on
25             any alternative report and plan submitted by the
26             Board of Trustees shall be made within 90 days

 

 

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1             after receiving the alternative report and plan,
2             and shall be accepted or rejected according to the
3             requirements of this subsection (b)(3)(iv). The
4             Board of Trustees shall continue to submit
5             alternative reports and plans to the Auditor
6             General, as necessary, until a favorable
7             determination is made by the Auditor General.
8         (4) For any retiree who first retires effective on or
9     after January 18, 2008, to be eligible for retiree health
10     care benefits upon retirement, the retiree must be at least
11     55 years of age, retire with 10 or more years of continuous
12     service and satisfy the preconditions established by
13     Public Act 95-708 in addition to any rules or regulations
14     promulgated by the Board of Trustees. Notwithstanding the
15     foregoing, any retiree hired on or before September 5, 2001
16     who retires who retired prior to the effective date of this
17     amendatory Act with 25 years or more of continuous service,
18     or who retires within 90 days after the effective date of
19     this amendatory Act or by January 1, 2009, whichever is
20     later, with 25 years or more of continuous service, shall
21     be eligible for retiree health care benefits upon
22     retirement in accordance with any rules or regulations
23     adopted by the Board of Trustees. This paragraph (4) shall
24     not apply to a disability allowance.
25         (5) Effective January 1, 2009, the aggregate amount of
26     retiree, dependent and survivor contributions to the cost

 

 

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1     of their health care benefits shall not exceed more than
2     45% of the total cost of such benefits. The Board of
3     Trustees shall have the discretion to provide different
4     contribution levels for retirees, dependents and survivors
5     based on their years of service, level of coverage or
6     Medicare eligibility, provided that the total contribution
7     from all retirees, dependents, and survivors shall be not
8     more than 45% of the total cost of such benefits. The term
9     "total cost of such benefits" for purposes of this
10     subsection shall be the total amount expended by the
11     retiree health benefit program in the prior plan year, as
12     calculated and certified in writing by the Retiree Health
13     Care Trust's enrolled actuary to be appointed and paid for
14     by the Board of Trustees.
15         (6) Effective January 18, 2008, all employees of the
16     Authority shall contribute to the Retiree Health Care Trust
17     in an amount not less than 3% of compensation.
18         (7) No earlier than January 1, 2009 and no later than
19     July 1, 2009 as the Retiree Health Care Trust becomes
20     solely responsible for providing health care benefits to
21     eligible retirees and their dependents and survivors in
22     accordance with subsection (b) of this Section 22-101B, the
23     Authority shall not have any obligation to provide health
24     care to current or future retirees and their dependents or
25     survivors. Employees, retirees, dependents, and survivors
26     who are required to make contributions to the Retiree

 

 

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1     Health Care Trust shall make contributions at the level set
2     by the Board of Trustees pursuant to the requirements of
3     this Section 22-101B.
4 (Source: P.A. 95-708, eff. 1-18-08; 95SB1920enr.)
 
5     Section 90. The State Mandates Act is amended by adding
6 Section 8.32 as follows:
 
7     (30 ILCS 805/8.32 new)
8     Sec. 8.32. Exempt mandate. Notwithstanding Sections 6 and 8
9 of this Act, no reimbursement by the State is required for the
10 implementation of any mandate created by this amendatory Act of
11 the 95th General Assembly.
 
12     Section 99. Effective date. This Act takes effect upon
13 becoming law.