HB3813ham003 97TH GENERAL ASSEMBLY

Rep. Tom Cross

Filed: 10/26/2011

09700HB3813ham003 LRB097 13613 JDS 59131 a

AMENDMENT TO HOUSE BILL 3813

AMENDMENT NO. ______. Amend House Bill 3813, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Pension Code is amended by changing Sections 1-114, 1-135, 7-132, 8-226, 11-215, 17-134, and 17-134.1 and by adding 3-110.12, 3-110.13, 3-110.14, 4-108.7, 4-108.8, 4-108.9, 5-212.1, 5-212.2, 5-212.3, 6-209.2, 6-209.3, 6-209.4, 8-117.1, 8-226.8, 11-116.1, 11-215.2, 15-113.12, 15-113.13, 15-113.14, 16-110.1, 16-110.2, 16-110.3, 17-109.3, and 17-134.2 as follows:

(40 ILCS 5/1-114) (from Ch. 108 1/2, par. 1-114)

Sec. 1-114. Liability for Breach of Fiduciary Duty. (a) Any person who is a fiduciary with respect to a retirement system or pension fund established under this Code who breaches any duty imposed upon fiduciaries by this Code, including, but not limited to, a failure to report a reasonable suspicion of a false statement specified in Section 1-135 of this Code, shall be personally liable to make good to such retirement system or pension fund any losses to it resulting from each such breach, and to restore to such retirement system or pension fund any profits of such fiduciary which have been made through use of assets of the retirement system or pension fund by the fiduciary, and shall be subject to such equitable or remedial relief as the court may deem appropriate, including the removal of such fiduciary.

(b) No person shall be liable with respect to a breach of fiduciary duty under this Code if such breach occurred before such person became a fiduciary or after such person ceased to be a fiduciary.

(Source: P.A. 82-960.)

(40 ILCS 5/1-135)

Sec. 1-135. Fraud. Any person who knowingly makes any false statement or falsifies or permits to be falsified any record of a retirement system or pension fund created under this Code or the Illinois State Board of Investment in an attempt to defraud the retirement system or pension fund created under this Code or the Illinois State Board of Investment is guilty of a Class 3 felony. Any reasonable suspicion by any appointed or elected commissioner, trustee, director, board member, or employee of a retirement system or pension fund created under this Code or the State Board of Investment of a false statement or falsified record being submitted or permitted by a person under this Code shall be immediately referred to the board of trustees of a retirement system or pension fund created under this Code or the State Board of Investment or the State's Attorney of the jurisdiction where the alleged fraudulent activity occurred. The board of trustees of a retirement system or pension fund created under this Code or the State Board of Investment shall immediately notify the State's Attorney of the jurisdiction where any alleged fraudulent activity occurred for investigation.

(Source: P.A. 96-6, eff. 4-3-09.)

(40 ILCS 5/3-110.12 new)

Sec. 3-110.12. Leaves of absence. For any leave of absence that is covered under subsection (c) of Section 3-110 and that is granted after the effective date of this amendatory Act of the 97th General Assembly, any pension credit earned in this Article shall be based on the participant's salary immediately before the leave of absence. The participant must contribute an amount equal to the actuarially determined normal cost of the benefit as calculated by the fund. The employer of the participant may elect to contribute all or a portion of the participant's required contribution.

(40 ILCS 5/3-110.13 new)

Sec. 3-110.13. Leave of absence benefit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, each fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of subsection (c) of Section 3-110 has created any additional unfunded liability to the fund. If it is determined by the fund that additional unfunded liability has been created, then the participant must remit the total cost to the fund, as determined by the fund, within one year.

(40 ILCS 5/3-110.14 new)

Sec. 3-110.14. Leaves of absence; computation of salary. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, takes a leave of absence covered by subsection (c) of Section 3-110, his or her average salary shall be based upon the regular salary rate received by the participant for his or her municipal employment immediately prior to that leave of absence.

(40 ILCS 5/4-108.7 new)

Sec. 4-108.7. Leaves of absence. For any leave of absence that is covered under subdivision (c)(3) of Section 4-108 and that is granted after the effective date of this amendatory Act of the 97th General Assembly, any pension credit earned in this Article shall be based on the participant's salary immediately before the leave of absence. The participant must contribute an amount equal to the actuarially determined normal cost of the benefit as calculated by the fund. The employer of the participant may elect to contribute all or a portion of the participant's required contribution.

(40 ILCS 5/4-108.8 new)

Sec. 4-108.8. Leave of absence benefit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, each fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of subdivision (c)(3) of Section 4-108 has created any additional unfunded liability to the fund. If it is determined by the fund that additional unfunded liability has been created, then the participant must remit the total cost to the fund, as determined by the fund, within one year.

(40 ILCS 5/4-108.9 new)

Sec. 4-108.9. Leaves of absence; computation of salary. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, takes a leave of absence covered by subdivision (c)(3) of Section 4-108, his or her average salary shall be based upon the regular salary rate received by the participant for his or her municipal employment immediately prior to that leave of absence.

(40 ILCS 5/5-212.1 new)

Sec. 5-212.1. Pension credit earned for other service. Any credit for other service that is covered under subdivision (b) of Section 5-214 and that is granted after the effective date of this amendatory Act of the 97th General Assembly shall be based on the participant's salary immediately before engaging in the type of employment specified in that provision. The participant must contribute an amount equal to the actuarially determined normal cost of the benefit as calculated by the fund. The employer of the participant may elect to contribute all or a portion of the participant's required contribution.

(40 ILCS 5/5-212.2 new)

Sec. 5-212.2. Credit for other service; recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of subdivision (b) of Section 5-214 has created any additional unfunded liability to the fund. If it is determined by the fund that additional unfunded liability has been created, then the participant must remit the total cost to the fund, as determined by the fund, within one year.

(40 ILCS 5/5-212.3 new)

Sec. 5-212.3. Salary for credit earned for other service. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, earns credit under subdivision (b) of Section 5-214, his or her average salary shall be based upon the regular salary rate received by the participant for his or her municipal employment immediately prior to that engaging in the type of employment specified in that provision.

(40 ILCS 5/6-209.2 new)

Sec. 6-209.2. Pension credit earned for other service. Any credit earned under item (f) of the second paragraph of Section 6-209 and that is granted after the effective date of this amendatory Act of the 97th General Assembly shall be based on the participant's salary immediately before engaging in the type of employment specified in that provision. The participant must contribute an amount equal to the actuarially determined normal cost of the benefit as calculated by the fund. The employer of the participant may elect to contribute all or a portion of the participant's required contribution.

(40 ILCS 5/6-209.3 new)

Sec. 6-209.3. Credit for other service; recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of item (f) of the second paragraph of Section 6-209 has created any additional unfunded liability to the fund. If it is determined by the fund that additional unfunded liability has been created, then the participant must remit the total cost to the fund, as determined by the fund, within one year.

(40 ILCS 5/6-209.4 new)

Sec. 6-209.4. Salary for credit earned for other service. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, has earned credit under item (f) of the second paragraph of Section 6-209, his or her average salary shall be based upon the regular salary rate received by the participant for his or her municipal employment immediately prior to that leave of absence.

(40 ILCS 5/7-132) (from Ch. 108 1/2, par. 7-132)

Sec. 7-132. Municipalities, instrumentalities and participating instrumentalities included and effective dates.

(A) Municipalities and their instrumentalities.

(a) The following described municipalities, but not including any with more than 1,000,000 inhabitants, and the instrumentalities thereof, shall be included within and be subject to this Article beginning upon the effective dates specified by the Board:

(1) Except as to the municipalities and instrumentalities thereof specifically excluded under this Article, every county shall be subject to this Article, and all cities, villages and incorporated towns having a population in excess of 5,000 inhabitants as determined by the last preceding decennial or subsequent federal census, shall be subject to this Article following publication of the census by the Bureau of the Census. Within 90 days after publication of the census, the Board shall notify any municipality that has become subject to this Article as a result of that census, and shall provide information to the corporate authorities of the municipality explaining the duties and consequences of participation. The notification shall also include a proposed date upon which participation by the municipality will commence.

However, for any city, village or incorporated town that attains a population over 5,000 inhabitants after having provided social security coverage for its employees under the Social Security Enabling Act, participation under this Article shall not be mandatory but may be elected in accordance with subparagraph (3) or (4) of this paragraph (a), whichever is applicable.

(2) School districts, other than those specifically excluded under this Article, shall be subject to this Article, without election, with respect to all employees thereof.

(3) Towns and all other bodies politic and corporate which are formed by vote of, or are subject to control by, the electors in towns and are located in towns which are not participating municipalities on the effective date of this Act, may become subject to this Article by election pursuant to Section 7-132.1.

(4) Any other municipality (together with its instrumentalities), other than those specifically excluded from participation and those described in paragraph (3) above, may elect to be included either by referendum under Section 7-134 or by the adoption of a resolution or ordinance by its governing body. A copy of such resolution or ordinance duly authenticated and certified by the clerk of the municipality or other appropriate official of its governing body shall constitute the required notice to the board of such action.

(b) A municipality that is about to begin participation shall submit to the Board an application to participate, in a form acceptable to the Board, not later than 90 days prior to the proposed effective date of participation. The Board shall act upon the application within 90 days, and if it finds that the application is in conformity with its requirements and the requirements of this Article, participation by the applicant shall commence on a date acceptable to the municipality and specified by the Board, but in no event more than one year from the date of application.

(c) A participating municipality which succeeds to the functions of a participating municipality which is dissolved or terminates its existence shall assume and be transferred the net accumulation balance in the municipality reserve and the municipality account receivable balance of the terminated municipality.

(d) In the case of a Veterans Assistance Commission whose employees were being treated by the Fund on January 1, 1990 as employees of the county served by the Commission, the Fund may continue to treat the employees of the Veterans Assistance Commission as county employees for the purposes of this Article, unless the Commission becomes a participating instrumentality in accordance with subsection (B) of this Section.

(B) Participating instrumentalities.

(a) The participating instrumentalities designated in paragraph (b) of this subsection shall be included within and be subject to this Article if:

(1) an application to participate, in a form acceptable to the Board and adopted by a two-thirds vote of the governing body, is presented to the Board not later than 90 days prior to the proposed effective date; and

(2) the Board finds that the application is in conformity with its requirements, that the applicant has reasonable expectation to continue as a political entity for a period of at least 10 years and has the prospective financial capacity to meet its current and future obligations to the Fund, and that the actuarial soundness of the Fund may be reasonably expected to be unimpaired by approval of participation by the applicant.

The Board shall notify the applicant of its findings within 90 days after receiving the application, and if the Board approves the application, participation by the applicant shall commence on the effective date specified by the Board.

(b) The following participating instrumentalities, so long as they meet the requirements of Section 7-108 and the area served by them or within their jurisdiction is not located entirely within a municipality having more than one million inhabitants, may be included hereunder:

i. Township School District Trustees.

ii. Multiple County and Consolidated Health Departments created under Division 5-25 of the Counties Code or its predecessor law.

iii. Public Building Commissions created under the Public Building Commission Act, and located in counties of less than 1,000,000 inhabitants.

iv. A multitype, consolidated or cooperative library system created under the Illinois Library System Act. Any library system created under the Illinois Library System Act that has one or more predecessors that participated in the Fund may participate in the Fund upon application. The Board shall establish procedures for implementing the transfer of rights and obligations from the predecessor system to the successor system.

v. Regional Planning Commissions created under Division 5-14 of the Counties Code or its predecessor law.

vi. Local Public Housing Authorities created under the Housing Authorities Act, located in counties of less than 1,000,000 inhabitants.

vii. Illinois Municipal League, for participants who first become participants before the effective date of this amendatory Act of the 97th General Assembly.

viii. Northeastern Illinois Metropolitan Area Planning Commission.

ix. Southwestern Illinois Metropolitan Area Planning Commission.

x. Illinois Association of Park Districts.

xi. Illinois Supervisors, County Commissioners and Superintendents of Highways Association.

xii. Tri-City Regional Port District.

xiii. An association, or not-for-profit corporation, membership in which is authorized under Section 85-15 of the Township Code.

xiv. Drainage Districts operating under the Illinois Drainage Code.

xv. Local mass transit districts created under the Local Mass Transit District Act.

xvi. Soil and water conservation districts created under the Soil and Water Conservation Districts Law.

xvii. Commissions created to provide water supply or sewer services or both under Division 135 or Division 136 of Article 11 of the Illinois Municipal Code.

xviii. Public water districts created under the Public Water District Act.

xix. Veterans Assistance Commissions established under Section 9 of the Military Veterans Assistance Act that serve counties with a population of less than 1,000,000.

xx. The governing body of an entity, other than a vocational education cooperative, created under an intergovernmental cooperative agreement established between participating municipalities under the Intergovernmental Cooperation Act, which by the terms of the agreement is the employer of the persons performing services under the agreement under the usual common law rules determining the employer-employee relationship. The governing body of such an intergovernmental cooperative entity established prior to July 1, 1988 may make participation retroactive to the effective date of the agreement and, if so, the effective date of participation shall be the date the required application is filed with the fund. If any such entity is unable to pay the required employer contributions to the fund, then the participating municipalities shall make payment of the required contributions and the payments shall be allocated as provided in the agreement or, if not so provided, equally among them.

xxi. The Illinois Municipal Electric Agency.

xxii. The Waukegan Port District.

xxiii. The Fox Waterway Agency created under the Fox Waterway Agency Act.

xxiv. The Illinois Municipal Gas Agency.

xxv. The Kaskaskia Regional Port District.

xxvi. The Southwestern Illinois Development Authority.

xxvii. The Cairo Public Utility Company.

xxviii. Except with respect to employees who elect to participate in the State Employees' Retirement System of Illinois under Section 14-104.13 of this Code, the Chicago Metropolitan Agency for Planning created under the Regional Planning Act, provided that, with respect to the benefits payable pursuant to Sections 7-146, 7-150, and 7-164 and the requirement that eligibility for such benefits is conditional upon satisfying a minimum period of service or a minimum contribution, any employee of the Chicago Metropolitan Agency for Planning that was immediately prior to such employment an employee of the Chicago Area Transportation Study or the Northeastern Illinois Planning Commission, such employee's service at the Chicago Area Transportation Study or the Northeastern Illinois Planning Commission and contributions to the State Employees' Retirement System of Illinois established under Article 14 and the Illinois Municipal Retirement Fund shall count towards the satisfaction of such requirements.

xxix. United Counties Council (formerly the Urban Counties Council), but only if the Council has a ruling from the United States Internal Revenue Service that it is a governmental entity.

xxx. The Will County Governmental League, but only if the League has a ruling from the United States Internal Revenue Service that it is a governmental entity and only for participants who first become participants before the effective date of this amendatory Act of the 97th General Assembly.

(c) The governing boards of special education joint agreements created under Section 10-22.31 of the School Code without designation of an administrative district shall be included within and be subject to this Article as participating instrumentalities when the joint agreement becomes effective. However, the governing board of any such special education joint agreement in effect before September 5, 1975 shall not be subject to this Article unless the joint agreement is modified by the school districts to provide that the governing board is subject to this Article, except as otherwise provided by this Section.

The governing board of the Special Education District of Lake County shall become subject to this Article as a participating instrumentality on July 1, 1997. Notwithstanding subdivision (a)1 of Section 7-139, on the effective date of participation, employees of the governing board of the Special Education District of Lake County shall receive creditable service for their prior service with that employer, up to a maximum of 5 years, without any employee contribution. Employees may establish creditable service for the remainder of their prior service with that employer, if any, by applying in writing and paying an employee contribution in an amount determined by the Fund, based on the employee contribution rates in effect at the time of application for the creditable service and the employee's salary rate on the effective date of participation for that employer, plus interest at the effective rate from the date of the prior service to the date of payment. Application for this creditable service must be made before July 1, 1998; the payment may be made at any time while the employee is still in service. The employer may elect to make the required contribution on behalf of the employee.

The governing board of a special education joint agreement created under Section 10-22.31 of the School Code for which an administrative district has been designated, if there are employees of the cooperative educational entity who are not employees of the administrative district, may elect to participate in the Fund and be included within this Article as a participating instrumentality, subject to such application procedures and rules as the Board may prescribe.

The Boards of Control of cooperative or joint educational programs or projects created and administered under Section 3-15.14 of the School Code, whether or not the Boards act as their own administrative district, shall be included within and be subject to this Article as participating instrumentalities when the agreement establishing the cooperative or joint educational program or project becomes effective.

The governing board of a special education joint agreement entered into after June 30, 1984 and prior to September 17, 1985 which provides for representation on the governing board by less than all the participating districts shall be included within and subject to this Article as a participating instrumentality. Such participation shall be effective as of the date the joint agreement becomes effective.

The governing boards of educational service centers established under Section 2-3.62 of the School Code shall be included within and subject to this Article as participating instrumentalities. The governing boards of vocational education cooperative agreements created under the Intergovernmental Cooperation Act and approved by the State Board of Education shall be included within and be subject to this Article as participating instrumentalities. If any such governing boards or boards of control are unable to pay the required employer contributions to the fund, then the school districts served by such boards shall make payment of required contributions as provided in Section 7-172. The payments shall be allocated among the several school districts in proportion to the number of students in average daily attendance for the last full school year for each district in relation to the total number of students in average attendance for such period for all districts served. If such educational service centers, vocational education cooperatives or cooperative or joint educational programs or projects created and administered under Section 3-15.14 of the School Code are dissolved, the assets and obligations shall be distributed among the districts in the same proportions unless otherwise provided.

The governing board of Paris Cooperative High School shall be included within and be subject to this Article as a participating instrumentality on the effective date of this amendatory Act of the 96th General Assembly. If the governing board of Paris Cooperative High School is unable to pay the required employer contributions to the fund, then the school districts served shall make payment of required contributions as provided in Section 7-172. The payments shall be allocated among the several school districts in proportion to the number of students in average daily attendance for the last full school year for each district in relation to the total number of students in average attendance for such period for all districts served. If Paris Cooperative High School is dissolved, then the assets and obligations shall be distributed among the districts in the same proportions unless otherwise provided.

Financial Oversight Panels established under Article 1H of the School Code shall be included within and be subject to this Article as a participating instrumentality on the effective date of this amendatory Act of the 97th General Assembly. If the Financial Oversight Panel is unable to pay the required employer contributions to the fund, then the school districts served shall make payment of required contributions as provided in Section 7-172. If the Financial Oversight Panel is dissolved, then the assets and obligations shall be distributed to the district served.

(d) The governing boards of special recreation joint agreements created under Section 8-10b of the Park District Code, operating without designation of an administrative district or an administrative municipality appointed to administer the program operating under the authority of such joint agreement shall be included within and be subject to this Article as participating instrumentalities when the joint agreement becomes effective. However, the governing board of any such special recreation joint agreement in effect before January 1, 1980 shall not be subject to this Article unless the joint agreement is modified, by the districts and municipalities which are parties to the agreement, to provide that the governing board is subject to this Article.

If the Board returns any employer and employee contributions to any employer which erroneously submitted such contributions on behalf of a special recreation joint agreement, the Board shall include interest computed from the end of each year to the date of payment, not compounded, at the rate of 7% per annum.

(e) Each multi-township assessment district, the board of trustees of which has adopted this Article by ordinance prior to April 1, 1982, shall be a participating instrumentality included within and subject to this Article effective December 1, 1981. The contributions required under Section 7-172 shall be included in the budget prepared under and allocated in accordance with Section 2-30 of the Property Tax Code.

(f) The Illinois Medical District Commission created under the Illinois Medical District Act may be included within and subject to this Article as a participating instrumentality, notwithstanding that the location of the District is entirely within the City of Chicago. To become a participating instrumentality, the Commission must apply to the Board in the manner set forth in paragraph (a) of this subsection (B). If the Board approves the application, under the criteria and procedures set forth in paragraph (a) and any other applicable rules, criteria, and procedures of the Board, participation by the Commission shall commence on the effective date specified by the Board.

(C) Prospective participants.

Beginning January 1, 1992, each prospective participating municipality or participating instrumentality shall pay to the Fund the cost, as determined by the Board, of a study prepared by the Fund or its actuary, detailing the prospective costs of participation in the Fund to be expected by the municipality or instrumentality.

(Source: P.A. 96-211, eff. 8-10-09; 96-551, eff. 8-17-09; 96-1000, eff. 7-2-10; 96-1046, eff. 7-14-10; 97-429, eff. 8-16-11.)

(40 ILCS 5/8-117.1 new)

Sec. 8-117.1. Leaves of absence; computation of salary. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, takes a leave of absence under subdivision (c) of Section 8-226, his or her highest average annual salary shall be based upon the regular salary rate received by the participant for his or her municipal employment immediately prior to that leave of absence.

(40 ILCS 5/8-226) (from Ch. 108 1/2, par. 8-226)

Sec. 8-226. Computation of service. In computing the term of service of an employee prior to the effective date, the entire period beginning on the date he was first appointed and ending on the day before the effective date, except any intervening period during which he was separated by withdrawal from service, shall be counted for all purposes of this Article, except that for any employee who was not in service on the day before the effective date, service rendered prior to such date shall not be considered for the purposes of Section 8-138.

For a person employed by an employer for whom this Article was in effect prior to January 1, 1950, from whose salary deductions are first made under this Article after December 31, 1949, any period of service rendered prior to the effective date, unless he was in service on the day before the effective date, shall not be counted as service.

The time a person was an employee of any territory annexed to the city prior to the effective date shall be counted as a period of service.

In computing the term of service of any employee subsequent to the day before the effective date, the following periods shall be counted as periods of service for age and service, widow's and child's annuity purposes:

(a) The time during which he performed the duties of his position;

(b) Vacations, leaves of absence with whole or part pay, and leaves of absence without pay not longer than 90 days;

(c) Leaves of absence without pay during which a participant is employed full-time by a local labor organization that represents municipal employees, provided that (1) the participant continues to make employee contributions to the Fund as though he were an active employee, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence (and in the case of such employment prior to December 9, 1987, pays to the Fund an amount equal to the employee contributions for such employment plus regular interest thereon as calculated by the board), and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 for leaves of absence before the effective date of this amendatory Act of the 97th General Assembly, and, for leaves of absence after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, (2) after January 1, 1989 the participant, or the labor organization on the participant's behalf, makes contributions to the Fund as though it were the employer, in the same amount and same manner as specified under this Article, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 for leaves of absence before the effective date of this amendatory Act of the 97th General Assembly, and, for leaves of absence after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and (3) the participant does not receive credit in any pension plan established by the local labor organization based on his employment by the organization, including, but not limited to, pension plans established by the local labor organization, the national labor organization, or the international labor organization;

(d) Any period of disability for which he received (i) a disability benefit under this Article, or (ii) a temporary total disability benefit under the Workers' Compensation Act if the disability results from a condition commonly termed heart attack or stroke or any other condition falling within the broad field of coronary involvement or heart disease, or (iii) whole or part pay;

(e) Any period for which contributions and service credit have been transferred to this Fund under subsection (d) of Section 9-121.1 or subsection (d) of Section 12-127.1 of this Code.

For a person employed by an employer in which the 1921 Act was in effect prior to January 1, 1950, from whose salary deductions are first made under the 1921 Act or this Article after December 31, 1949, any period of service rendered subsequent to the effective date and prior to the date he became an employee and contributor, shall not be counted as a period of service under this Article, except such period for which he made payment as provided in Section 8-230 of this Article, in which case such period shall be counted as a period of service for all annuity purposes hereunder.

In computing the term of service of an employee subsequent to the day before the effective date for ordinary disability benefit purposes, all periods described in the preceding paragraph, except any such period for which he receives ordinary disability benefit, shall be counted as periods of service; provided, that for any person employed by an employer in which this Article was in effect prior to January 1, 1950, from whose salary deductions are first made under this Article after December 31, 1949, any period of service rendered subsequent to the effective date and prior to the date he became an employee and contributor, shall not be counted as a period of service for ordinary disability benefit purposes, unless the person made payment for the period as provided in Section 8-230 of this Article, in which case the period shall be counted as a period of service for ordinary disability purposes for periods of disability on or after the effective date of this amendatory Act of 1997.

Overtime or extra service shall not be included in computing any term of service. Not more than 1 year of service shall be allowed for service rendered during any calendar year.

(Source: P.A. 90-511, eff. 8-22-97.)

(40 ILCS 5/8-226.8 new)

Sec. 8-226.8. Leave of absence benefit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of subdivision (c) of Section 8-226 has created any additional unfunded liability to the fund. If it is determined by the fund that additional unfunded liability has been created, then the participant must remit the total cost to the fund, as determined by the fund, within one year.

(40 ILCS 5/11-116.1 new)

Sec. 11-116.1. Leaves of absence; computation of salary. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, takes a leave of absence under paragraph (3) of subsection (c) of Section 11-215, his or her highest average annual salary shall be based upon the regular salary rate received by the participant for his or her municipal employment immediately prior to that leave of absence.

(40 ILCS 5/11-215) (from Ch. 108 1/2, par. 11-215)

Sec. 11-215. Computation of service.

(a) In computing the term of service of an employee prior to the effective date, the entire period beginning on the date he was first appointed and ending on the day before the effective date, except any intervening period during which he was separated by withdrawal from service, shall be counted for all purposes of this Article. Only the first year of each period of lay-off or leave of absence without pay, continuing or extending for a period in excess of one year, shall be counted as such service.

(b) For a person employed by an employer for whom this Article was in effect prior to August 1, 1949, from whose salary deductions are first made under this Article after July 31, 1949, any period of service rendered prior to the effective date, unless he was in service on the day before the effective date, shall not be counted as service.

(c) In computing the term of service of an employee subsequent to the day before the effective date, the following periods of time shall be counted as periods of service for annuity purposes:

(1) the time during which he performed the duties of his position;

(2) leaves of absence with whole or part pay, and leaves of absence without pay not longer than 90 days;

(3) leaves of absence without pay during which a participant is employed full-time by a local labor organization that represents municipal employees, provided that (A) the participant continues to make employee contributions to the Fund as though he were an active employee, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence (and in the case of such employment prior to December 9, 1987, pays to the Fund an amount equal to the employee contributions for such employment plus regular interest thereon as calculated by the board), and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 for leaves of absence before the effective date of this amendatory Act of the 97th General Assembly, and, for leaves of absence after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, (B) after January 1, 1989 the participant, or the labor organization on the participant's behalf, makes contributions to the Fund as though it were the employer, in the same amount and same manner as specified under this Article, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 and for leaves of absence before the effective date of this amendatory Act of the 97th General Assembly, and, for leaves of absence after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and (C) the participant does not receive credit in any pension plan established by the local labor organization based on his employment by the organization, including, but not limited to, pension plans established by the local labor organization, the national labor organization, or the international labor organization;

(4) any period of disability for which he received (i) a disability benefit under this Article, or (ii) a temporary total disability benefit under the Workers' Compensation Act if the disability results from a condition commonly termed heart attack or stroke or any other condition falling within the broad field of coronary involvement or heart disease, or (iii) whole or part pay.

(d) For a person employed by an employer, or the retirement board, in which "The 1935 Act" was in effect prior to August 1, 1949, from whose salary deductions are first made under "The 1935 Act" or this Article after July 31, 1949, any period of service rendered subsequent to the effective date and prior to August 1, 1949, shall not be counted as a period of service under this Article, except such period for which he made payment, as provided in Section 11-221 of this Article, in which case such period shall be counted as a period of service for all annuity purposes hereunder.

(e) In computing the term of service of an employee subsequent to the day before the effective date for ordinary disability benefit purposes, the following periods of time shall be counted as periods of service:

(1) any period during which he performed the duties of his position;

(2) leaves of absence with whole or part pay;

(3) any period of disability for which he received (i) a duty disability benefit under this Article, or (ii) a temporary total disability benefit under the Workers' Compensation Act if the disability results from a condition commonly termed heart attack or stroke or any other condition falling within the broad field of coronary involvement or heart disease, or (iii) whole or part pay.

However, any period of service rendered by an employee contributor prior to the date he became a contributor to the fund shall not be counted as a period of service for ordinary disability purposes, unless the person made payment for the period as provided in Section 11-221 of this Article, in which case the period shall be counted as a period of service for ordinary disability purposes for periods of disability on or after the effective date of this amendatory Act of 1997.

Overtime or extra service shall not be included in computing any term of service. Not more than 1 year of service shall be allowed for service rendered during any calendar year.

(Source: P.A. 90-511, eff. 8-22-97.)

(40 ILCS 5/11-215.2 new)

Sec. 11-215.2. Leave of absence benefit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of subdivision (c)(3) of Section 11-215 has created any additional unfunded liability to the fund. If it is determined by the fund that additional unfunded liability has been created, then the participant must remit the total cost to the fund, as determined by the fund, within one year.

(40 ILCS 5/15-113.12 new)

Sec. 15-113.12. Pension credit earned for employment with a teacher organization. Any credit earned under subsection (i) of Section 15-107 and that is granted after the effective date of this amendatory Act of the 97th General Assembly shall be based on the participant's salary immediately before engaging in the type of employment specified in that provision. The participant must contribute an amount equal to the actuarially determined normal cost of the benefit as calculated by the System. The employer of the participant may elect to contribute all or a portion of the participant's required contribution.

(40 ILCS 5/15-113.13 new)

Sec. 15-113.13. Credit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the System shall determine if any benefit earned by a participant who first becomes a participant on or after the effective date of this Section as a result of subsection (i) of Section 15-107 has created any additional unfunded liability to the System. If it is determined by the System that additional unfunded liability has been created, then the participant must remit the total cost to the System, as determined by the System, within one year.

(40 ILCS 5/15-113.14 new)

Sec. 15-113.14. Salary for credit earned for service to a teacher organization. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, earned credit under subsection (i) of Section 15-107, his or her average salary shall be based upon the regular salary rate received by the participant for his or her employment immediately prior to engaging in the type of employment specified in that provision.

(40 ILCS 5/16-110.1 new)

Sec. 16-110.1. Pension credit earned for employment with a teacher organization or a school board association. Any credit earned under item (4) or (8) of Section 16-106 and that is granted after the effective date of this amendatory Act of the 97th General Assembly shall be based on the participant's salary immediately before engaging in the type of employment specified in that provision. The participant must contribute an amount equal to the actuarially determined normal cost of the benefit as calculated by the System. The employer of the participant may elect to contribute all or a portion of the participant's required contribution.

(40 ILCS 5/16-110.2 new)

Sec. 16-110.2. Credit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the System shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of item (4) or (8) of Section 16-106 has created any additional unfunded liability to the System. If it is determined by the System that additional unfunded liability has been created, then the participant must remit the total cost to the System, as determined by the System, within one year.

(40 ILCS 5/16-110.3 new)

Sec. 16-110.3. Leaves of absence; computation of salary. For any participant who, on or after the effective date of this amendatory Act of the 97th General Assembly, has earned credit under item (4) or (8) of Section 16-106, his or her average salary shall be based upon the regular salary rate received by the participant for his or her employment immediately prior to that leave of absence.

(40 ILCS 5/17-109.3 new)

Sec. 17-109.3. Salary for credit earned for employment with a teacher organization or school board association. Any credit earned, on or after the effective date of this amendatory Act of the 97th General Assembly, under subdivision (4) of Section 17-134 or subsection (b) of Section 17-134.1, shall be based upon the regular salary rate received by the participant for his or her employment immediately before engaging in the type of employment specified in that provision.

(40 ILCS 5/17-134) (from Ch. 108 1/2, par. 17-134)

Sec. 17-134. Contributions for leaves of absence; military service; computing service. In computing service for pension purposes the following periods of service shall stand in lieu of a like number of years of teaching service upon payment therefor in the manner hereinafter provided: (a) time spent on a leave of absence granted by the employer; (b) service with teacher or labor organizations based upon special leaves of absence therefor granted by an Employer; (c) a maximum of 5 years spent in the military service of the United States, of which up to 2 years may have been served outside the pension period; (d) unused sick days at termination of service to a maximum of 244 days; (e) time lost due to layoff and curtailment of the school term from June 6 through June 21, 1976; and (f) time spent after June 30, 1982 as a member of the Board of Education, if required to resign from an administrative or teaching position in order to qualify as a member of the Board of Education.

(1) For time spent on or after September 6, 1948 on sabbatical leaves of absence or sick leaves, for which salaries are paid, an Employer shall make payroll deductions at the applicable rates in effect during such periods.

(2) For time spent on a leave of absence granted by the employer for which no salaries are paid, teachers desiring credit therefor shall pay the required contributions at the rates in effect during such periods as though they were in teaching service. If an Employer pays salary for vacations which occur during a teacher's sick leave or maternity or paternity leave without salary, vacation pay for which the teacher would have qualified while in active service shall be considered part of the teacher's total salary for pension purposes. No more than 36 months of leave credit may be allowed any person during the entire term of service. Sabbatical leave credit shall be limited to the time the person on leave without salary under an Employer's rules is allowed to engage in an activity for which he receives salary or compensation.

(3) For time spent prior to September 6, 1948, on sabbatical leaves of absence or sick leaves for which salaries were paid, teachers desiring service credit therefor shall pay the required contributions at the maximum applicable rates in effect during such periods.

(4) For service with teacher or labor organizations authorized by special leaves of absence, for which no payroll deductions are made by an Employer, teachers desiring service credit therefor shall contribute to the Fund upon the basis of the actual salary received from such organizations at the percentage rates in effect during such periods for certified positions with such Employer. To the extent the actual salary exceeds the regular salary, which shall be defined as the salary rate, as calculated by the Board, in effect for the teacher's regular position in teaching service on September 1, 1983 or on the effective date of the leave with the organization, whichever is later, the organization shall pay to the Fund the employer's normal cost as set by the Board on the increment. For leaves of absence after the effective date of this amendatory Act of the 97th General Assembly, contributions to the Fund under this subdivision (4) shall be based upon the teacher's regular salary as defined in this subdivision (4).

(5) For time spent in the military service, teachers entitled to and desiring credit therefor shall contribute the amount required for each year of service or fraction thereof at the rates in force (a) at the date of appointment, or (b) on return to teaching service as a regularly certified teacher, as the case may be; provided such rates shall not be less than $450 per year of service. These conditions shall apply unless an Employer elects to and does pay into the Fund the amount which would have been due from such person had he been employed as a teacher during such time. In the case of credit for military service not during the pension period, the teacher must also pay to the Fund an amount determined by the Board to be equal to the employer's normal cost of the benefits accrued from such service, plus interest thereon at 5% per year, compounded annually, from the date of appointment to the date of payment.

The changes to this Section made by Public Act 87-795 shall apply not only to persons who on or after its effective date are in service under the Fund, but also to persons whose status as a teacher terminated prior to that date, whether or not the person is an annuitant on that date. In the case of an annuitant who applies for credit allowable under this Section for a period of military service that did not immediately follow employment, and who has made the required contributions for such credit, the annuity shall be recalculated to include the additional service credit, with the increase taking effect on the date the Fund received written notification of the annuitant's intent to purchase the credit, if payment of all the required contributions is made within 60 days of such notice, or else on the first annuity payment date following the date of payment of the required contributions. In calculating the automatic annual increase for an annuity that has been recalculated under this Section, the increase attributable to the additional service allowable under this amendatory Act of 1991 shall be included in the calculation of automatic annual increases accruing after the effective date of the recalculation.

The total credit for military service shall not exceed 5 years, except that any teacher who on July 1, 1963, had validated credit for more than 5 years of military service shall be entitled to the total amount of such credit.

(6) A maximum of 244 unused sick days credited to his account by an Employer on the date of termination of employment. Members, upon verification of unused sick days, may add this service time to total creditable service.

(7) In all cases where time spent on leave is creditable and no payroll deductions therefor are made by an Employer, persons desiring service credit shall make the required contributions directly to the Fund.

(8) For time lost without pay due to layoff and curtailment of the school term from June 6 through June 21, 1976, as provided in item (e) of the first paragraph of this Section, persons who were contributors on the days immediately preceding such layoff shall receive credit upon paying to the Fund a contribution based on the rates of compensation and employee contributions in effect at the time of such layoff, together with an additional amount equal to 12.2% of the compensation computed for such period of layoff, plus interest on the entire amount at 5% per annum from January 1, 1978 to the date of payment. If such contribution is paid, salary for pension purposes for any year in which such a layoff occurred shall include the compensation recognized for purposes of computing that contribution.

(9) For time spent after June 30, 1982, as a nonsalaried member of the Board of Education, if required to resign from an administrative or teaching position in order to qualify as a member of the Board of Education, an administrator or teacher desiring credit therefor shall pay the required contributions at the rates and salaries in effect during such periods as though the member were in service.

Effective September 1, 1974, the interest charged for validation of service described in paragraphs (2) through (5) of this Section shall be compounded annually at a rate of 5% commencing one year after the termination of the leave or return to service.

(Source: P.A. 92-599, eff. 6-28-02.)

(40 ILCS 5/17-134.1)

Sec. 17-134.1. Labor organization employees.

(a) A former teacher who is employed by a teacher or labor organization and is not eligible to participate under subdivision (4) of Section 17-134 because he or she is not on a special leave of absence may elect to participate in the Fund for the duration of that employment by so notifying the Fund in writing. Participation shall be subject to the same conditions as are applicable to persons participating under that subdivision (4), and service credit shall be contingent upon the required contributions being received by the Fund.

(b) A person who participates in the Fund under subsection (a) may establish service credit for periods of such employment that took place before beginning participation under this Section by submitting a written application to the Fund. Credit shall be granted upon payment to the Fund of an amount to be determined by the Fund, equal to (i) the employee contributions that would have been paid if the person had participated under subdivision (4) of Section 17-134 during the period for which service credit is to be established, based on the actual salary received, plus (ii) the employer's normal cost associated with that service credit, plus (iii) interest on items (i) and (ii) at the rate of 6% per year, compounded annually, from the date of the service established to the date of payment. Service credit under this subsection shall not be granted until the required contribution has been paid in full; the contribution may be paid at any time before retirement. For leaves of absence after the effective date of this amendatory Act of the 97th General Assembly, contributions to the Fund under item (i) of this subsection (b) shall be based upon the teacher's regular salary as defined in subdivision (4) of Section 17-134.

(c) A person who participates in the Fund under subsection (a) may reestablish any service credits previously forfeited by acceptance of a refund by paying to the Fund the amount of the refund plus interest thereon at the rate of 5% per annum, compounded annually, from the date of the refund to the date of payment.

(d) Rollover contributions from other retirement plans qualified under the Internal Revenue Code of 1986 may be used to make the payments required under subsections (b) and (c).

(e) No service credit may be established under this Section for any period of employment for which the person receives service credit under any other provision of this Code.

(Source: P.A. 90-448, eff. 8-16-97.)

(40 ILCS 5/17-134.2 new)

Sec. 17-134.2. Credit recalculation. Every 3 years, beginning on or as soon as practical after the effective date of this amendatory Act of the 97th General Assembly, the Fund shall determine if any benefit earned by a participant who first earns credit on or after the effective date of this Section as a result of item (4) of Section 17-134 and Section 17-134.1 has created any additional unfunded liability to the Fund. If it is determined by the Fund that additional unfunded liability has been created, then the participant must remit the total cost to the Fund, as determined by the Fund, within one year.

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