HB3632 98TH GENERAL ASSEMBLY

LRB098 12142 EFG 46061 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3632

Introduced , by Rep. Dan Brady

SYNOPSIS AS INTRODUCED:

See Index

Amends the Judges Article of the Illinois Pension Code. Defines terms. Requires Tier I employees to elect (i) to have the amount of their automatic annual increases reduced and to waive their eligibility for automatic annual increases for 2 years, (ii) to make additional employee contributions and to waive their eligibility for automatic annual increases for 3 years, or (iii) to maintain their current benefit package. Specifies that a Tier I employee who has elected either item (i) or (ii) is entitled to have future increases in income treated as pensionable income and remains eligible to participate in the State-sponsored program of health benefits during retirement. Specifies that a Tier I employee who has elected item (iii) is not eligible for any of these benefits. Requires Tier I retirees to elect (i) to delay their eligibility for automatic annual increases or (ii) to maintain their current benefit package. Specifies that a Tier I retiree who elects item (ii) becomes ineligible to participate in the State-sponsored program of health benefits during retirement. Makes conforming changes in the State Employees Group Insurance Act of 1971. Includes an inseverability provision. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning public employe benefits.

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

Section 5. The State Employees Group Insurance Act of 1971 is amended by adding Section 6.16 as follows:

(5 ILCS 375/6.16 new)

Sec. 6.16. Health benefit election for Tier I employees and Tier I retirees.

(a) For purposes of this Section:

"Eligible Tier I employee" means, except as provided in subsection (g) of this Section, an individual who makes or is deemed to have made an election under paragraph (1) of subsection (a) of Section 18-120.5 of the Illinois Pension Code.

"Eligible Tier I retiree" means, except as provided in subsection (g) of this Section, an individual who makes or is deemed to have made an election under paragraph (1) of subsection (a-5) of Section 18-120.5 of the Illinois Pension Code.

"Program of health benefits" means (i) a health plan, as defined in subsection (o) of Section 3 of this Act, that is designed and contracted for by the Director under this Act or any successor Act or (ii) if administration of that health plan is transferred to a trust established by the State or an independent Board in order to provide health benefits to a class of a persons that includes eligible Tier I retirees, then the plan of health benefits provided through that trust.

(b) As adequate and legal consideration for making an election under paragraph (1) of subsection (a) or (a-5) of Section 18-120.5 of the Illinois Pension Code, as the case may be, each eligible Tier I employee and each eligible Tier I retiree shall receive a vested and enforceable contractual right to participate in a program of health benefits while he or she qualifies as an annuitant or retired employee. That right also extends to such a person's dependents and survivors who are eligible under the applicable program of health benefits.

(c) Notwithstanding subsection (b), eligible Tier I employees and eligible Tier I retirees may be required to make contributions toward the cost of coverage under a program of health benefits.

(d) The vested and enforceable contractual right to a program of health benefits is not offered as, and shall not be considered, a pension or retirement benefit under Article XIII, Section 5 of the Illinois Constitution, the Illinois Pension Code, or any subsequent or successor enactment providing pension benefits.

(e) Notwithstanding any other provision of law, except subsection (g) of this Section, a Tier I employee or Tier I retiree who has made an election under paragraph (2) of subsection (a) or (a-5) of Section 18-120.5 of the Illinois Pension Code, as the case may be, shall not be entitled to participate in any program of health benefits under this Act as an annuitant or retired employee receiving a retirement annuity, regardless of any contrary election pursuant to any of those Sections under any other retirement system.

Notwithstanding any other provision of law, except subsection (g) of this Section, a Tier I employee who is not entitled to participate in the program of health benefits as an annuitant or retired employee receiving a retirement annuity, due to an election under paragraph (2) of subsection (a) or (a-5) of Section 18-120.5 of the Illinois Pension Code, as the case may be, shall not be required to make contributions toward the program of health benefits while he or she is an employee or active contributor. However, an active employee may be required to make contributions toward health benefits he or she receives during active service.

(f) The Department shall coordinate with each retirement system administering an election in accordance with this amendatory Act of the 98th General Assembly to provide information concerning the impact of the election of health benefits. Each System shall include information prepared by the Department in the required election packet. The Department shall make information available to Tier I employees and Tier I retirees through video materials, group presentations, consultation by telephone or other electronic means, or any combination of these methods. The information in the election packet shall include a notice that states: "YOU ARE HEREBY ADVISED THAT THE PROGRAM OF HEALTH BENEFITS OFFERED IS FOR ACCESS TO A GROUP HEALTHCARE PLAN ADMINISTERED BY THE DEPARTMENT, AND YOU MAY BE REQUIRED TO PAY FOR THE FULL COST OF COVERAGE PROVIDED BY THE PLAN, INCLUDING ALL PREMIUM, DEDUCTIBLE, AND COPAY AMOUNTS."

(g) Nothing in this Section shall be construed as applying to a person who is eligible to make or who made the election under Section 15-135.1 of the Illinois Pension Code.

Section 10. The Illinois Pension Code is amended by changing Sections 18-111, 18-125.1, 18-132, 18-133, 18-140, and 18-169 and adding Sections 18-110.1, 18-110.2, 18-110.9, and 18-120.5 as follows:

"(40 ILCS 5/18-110.1 new)

Sec. 18-110.1. Tier I employee. "Tier I employee": A participant who first became a participant before January 1, 2011.

(40 ILCS 5/18-110.2 new)

Sec. 18-110.2. Tier I retiree. "Tier I retiree" means a former Tier I employee who is receiving a retirement annuity.

(40 ILCS 5/18-110.9 new)

Sec. 18-110.9. Future increase in income. "Future increase in income": Any increase in income in any form offered for service as a judge under this Article after June 30, 2014 that would qualify as "salary", as defined in Section 18-111, but for the fact that the increase in income was offered to the judge on the condition that it not qualify as salary and was accepted by the judge subject to that condition.

(40 ILCS 5/18-111) (from Ch. 108 1/2, par. 18-111)

Sec. 18-111. Salary. "Salary": The total compensation paid for personal services as a judge, by the State, or by the State and a county as authorized by law. However, in the event that federal law results in any judge receiving imputed income based on the value of group term life insurance provided by the State, such imputed income shall not be included in salary for the purposes of this Article.

Notwithstanding any other provision of this Section, "salary" does not include any future increase in income that is offered for service as a judge under this Article pursuant to the requirements of subsection (c) of Section 18-120.5 and accepted by a Tier I employee, or a Tier I retiree returning to active service, who has made the election under paragraph (2) of subsection (a) or (a-5) of Section 18-120.5.

(Source: P.A. 86-273.)

(40 ILCS 5/18-120.5 new)

Sec. 18-120.5. Election by Tier I employees and Tier I retirees.

(a) Each Tier I employee shall make an irrevocable election either:

(1) to agree to item (i) or (ii) as set forth in this paragraph (1):

(i) to have the amount of the automatic annual increases in his or her retirement annuity that are otherwise provided for in this Article calculated, instead, as provided in subsection (a-1) of Section 18-125.1, and to waive his or her eligibility for 2 automatic annual increases in retirement annuity as provided in subsection (a-2) of Section 18-125.1; or

(ii) to waive his or her eligibility for 3 automatic annual increases in retirement annuity, as provided in subsection (a-3) of Section 18-125.1, and to make the contributions set forth in subsection (a-5) of Section 18-133; or

(2) to not agree to item (i) or (ii) as set forth in paragraph (1) of this subsection.

The election required under this subsection (a) shall be made by each Tier I employee no earlier than February 1, 2014 and no later than May 31, 2014, except that:

(i) a person who becomes a Tier I employee under this Article on or after February 1, 2014 must make the election under this subsection (a) within 60 days after becoming a Tier I employee;

(ii) a person who returns to active service as a Tier I employee under this Article on or after February 1, 2014 and has not yet made an election under this Section must make the election under this subsection (a) within 60 days after returning to active service as a Tier I employee; and

(iii) a person who made the election under subsection (a-5) as a Tier I retiree remains bound by that election and shall not make a later election under this subsection (a).

If a Tier I employee fails for any reason to make a required election under this subsection within the time specified, then the employee shall be deemed to have made the election under paragraph (2) of this subsection.

(a-5) Each Tier I retiree shall make an irrevocable election either:

(1) to agree to the following:

(i) to have the amount of the automatic annual increases in his or her retirement annuity calculated without regard to subsection (a-1), (a-2), or (a-3) of Section 18-125.1; and

(ii) to waive his or her eligibility for 2 automatic annual increases in retirement annuity as provided in subsection (a-4) of Section 18-125.1; or

(2) to not agree to items (i) and (ii) as set forth in paragraph (1) of this subsection.

The election required under this subsection (a-5) shall be made by each Tier I retiree no earlier than February 1, 2014 and no later than May 31, 2014, except that:

(i) a person who becomes a Tier I retiree under this Article on or after February 1, 2014 must make the election under this subsection (a-5) within 60 days after becoming a Tier I retiree; and

(ii) a person who made the election under subsection (a) as a Tier I employee remains bound by that election and shall not make a later election under this subsection (a-5).

If a Tier I retiree fails for any reason to make a required election under this subsection within the time specified, then the Tier I retiree shall be deemed to have made the election under paragraph (2) of this subsection.

(a-10) All elections under subsection (a) or (a-5) that are made or deemed to be made before June 1, 2014 shall take effect on July 1, 2014. Elections that are made or deemed to be made on or after June 1, 2014 shall take effect on the first day of the month following the month in which the election is made or deemed to be made.

(b) As adequate and legal consideration provided under this amendatory Act of the 98th General Assembly for making an election under paragraph (1) of subsection (a) of this Section, any future increases in income offered for service as a judge under this Article to a Tier I employee who has made an election under paragraph (1) of subsection (a) of this Section shall be offered expressly and irrevocably as constituting salary under Section 18-111.

As adequate and legal consideration provided under this amendatory Act of the 98th General Assembly for making an election under paragraph (1) of subsection (a-5) of this Section, any future increases in income offered for service as a judge under this Article to a Tier I retiree who returns to active service after having made an election under paragraph (1) of subsection (a-5) of this Section shall be offered expressly and irrevocably as constituting salary under Section 18-111.

(c) A Tier I employee who makes the election under paragraph (2) of subsection (a) of this Section shall not be subject to either item (i) or (ii) set forth in paragraph (1) of subsection (a) of this Section. However, any future increases in income offered for service as a judge under this Article to a Tier I employee who has made the election under paragraph (2) of subsection (a) of this Section shall be offered expressly and irrevocably as not constituting salary under Section 18-111, and the judge may not accept any future increase in income that is offered in violation of this requirement.

A Tier I retiree who makes the election under paragraph (2) of subsection (a-5) of this Section shall not be subject to either item (i) or (ii) set forth in paragraph (1) of subsection (a-5) of this Section. However, any future increases in income offered for service as a judge under this Article to a Tier I retiree who returns to active service and has made the election under paragraph (2) of subsection (a-5) of this Section shall be offered expressly and irrevocably as not constituting salary under Section 18-111, and the judge may not accept any future increase in income that is offered in violation of this requirement.

(d) The System shall make a good faith effort to contact each Tier I employee and Tier I retiree subject to this Section. The System shall mail information describing the required election to each Tier I employee and Tier I retiree by United States Postal Service mail to his or her last known address on file with the System. If the Tier I employee or Tier I retiree is not responsive to other means of contact, it is sufficient for the System to publish the details of any required elections on its website or to publish those details in a regularly published newsletter or other existing public forum.

Tier I employees and Tier I retirees who are subject to this Section shall be provided with an election packet containing information regarding their options, as well as the forms necessary to make the required election. Upon request, the System shall offer Tier I employees and Tier I retirees an opportunity to receive information from the System before making the required election. The information may be provided through video materials, group presentations, individual consultation with a judge by an authorized representative of the System in person or by telephone or other electronic means, or any combination of those methods. The System shall not provide advice or counseling with respect to which election a Tier I employee or Tier I retiree should make or specific to the legal or tax circumstances of or consequences to the Tier I employee or Tier I retiree.

The System shall inform Tier I employees and Tier I retirees in the election packet required under this subsection that the Tier I employee or Tier I retiree may also wish to obtain information and counsel relating to the election required under this Section from any other available source, including but not limited to labor organizations and private counsel.

In no event shall the System, its staff, or the Board be held liable for any information given to a participant, beneficiary, or annuitant regarding the elections under this Section. The System shall coordinate with the Illinois Department of Central Management Services and each other retirement system administering an election in accordance with this amendatory Act of the 98th General Assembly to provide information concerning the impact of the election set forth in this Section.

(e) Notwithstanding any other provision of law, any future increases in income offered for service as a judge must be offered expressly and irrevocably as not constituting "salary" under Section 18-111 to any Tier I employee, or Tier I retiree returning to active service, who has made an election under paragraph (2) of subsection (a) or (a-5) of this Section 18-120.5. A Tier I employee, or Tier I retiree returning to active service, who has made an election under paragraph (2) of subsection (a) or (a-5) of this Section 18-120.5 shall not accept any future increase in income that is offered for service as a judge under this Article in violation of the requirement set forth in this subsection.

(f) An election under this Section is not a prohibited election under subdivision (j)(1) of Section 1-119 of this Code.

(g) No provision of this Section shall be interpreted in a way that would cause the System to cease to be a qualified plan under Section 401(a) of the Internal Revenue Code of 1986.

(h) If this Section is determined to be unconstitutional or otherwise invalid by a final unappealable decision of an Illinois court or a court of competent jurisdiction as applied to Tier I employees but not as applied to Tier I retirees, then this Section and the changes deriving from the election required under this Section shall be null and void as applied to Tier I employees but shall remain in full effect for Tier I retirees.

(i) If this Section is determined to be unconstitutional or otherwise invalid by a final unappealable decision of an Illinois court or a court of competent jurisdiction as applied to Tier I retirees but not as applied to Tier I employees, then this Section and the changes deriving from the election required under this Section shall be null and void as applied to Tier I retirees but shall remain in full effect for Tier I employees.

(j) If an election created by this amendatory Act in any other Article of this Code or any change deriving from that election is determined to be unconstitutional or otherwise invalid by a final unappealable decision of an Illinois court or a court of competent jurisdiction, the invalidity of that provision shall not in any way affect the validity of this Section or the changes deriving from the election required under this Section.

(40 ILCS 5/18-125.1) (from Ch. 108 1/2, par. 18-125.1)

Sec. 18-125.1. Automatic increase in retirement annuity.

(a) Except as provided in subsections (a-1), (a-2), (a-3), and (a-4), a A participant who retires from service after June 30, 1969, shall, in January of the year next following the year in which the first anniversary of retirement occurs, and in January of each year thereafter, have the amount of his or her originally granted retirement annuity increased as follows: for each year up to and including 1971, 1 1/2%; for each year from 1972 through 1979 inclusive, 2%; and for 1980 and each year thereafter, 3%.

(a-1) Notwithstanding any other provision of this Article, for a Tier I employee who made the election under item (i) of paragraph (1) of subsection (a) of Section 18-120.5, the amount of each automatic annual increase in retirement annuity occurring on or after the effective date of that election, other than the initial increase, shall be 3% of the originally granted retirement annuity.

(a-2) Notwithstanding any other provision of this Article, for a Tier I employee who made the election under item (i) of paragraph (1) of subsection (a) of Section 18-120.5, once the first annual increase under this Section has been granted, the next 2 scheduled annual increases after the effective date of that election shall be skipped, and thereafter all annual increases shall be granted.

(a-3) Notwithstanding any other provision of this Article, for a Tier I employee who made the election under item (ii) of paragraph (1) of subsection (a) of Section 18-120.5, once the first annual increase under this Section has been granted, the next 3 scheduled annual increases after the effective date of that election shall be skipped, and thereafter all annual increases shall be granted.

(a-4) Notwithstanding any other provision of this Article, for a Tier I retiree who made the election under paragraph (1) of subsection (a-5) of Section 18-120.5:

(1) if the Tier I retiree has not received the first annual increase under this Section as of the effective date of that election, then once the first annual increase under this Section has been granted, the next scheduled annual increase shall be skipped, the following annual increase shall be granted, the next annual increase shall be skipped, and thereafter all annual increases shall be granted; and

(2) if the Tier I retiree has received the first annual increase under this Section as of the effective date of that election, then the next annual increase after that effective date shall be skipped, the following annual increase shall be granted, the next annual increase shall be skipped, and thereafter all annual increases shall be granted.

(b) Notwithstanding subsections (a) and (e) of this Section any other provision of this Article, a retirement annuity for a participant who first serves as a judge on or after January 1, 2011 (the effective date of Public Act 96-889) shall be increased in January of the year next following the year in which the first anniversary of retirement occurs, but in no event prior to age 67, and in January of each year thereafter, by an amount equal to 3% or the annual percentage increase in the consumer price index-u as determined by the Public Pension Division of the Department of Insurance under subsection (b-5) of Section 18-125, whichever is less, of the retirement annuity then being paid.

(c) This Section is not applicable to a participant who retires before he or she has made contributions at the rate prescribed in Section 18-133 for automatic increases for not less than the equivalent of one full year, unless such a participant arranges to pay the system the amount required to bring the total contributions for the automatic increase to the equivalent of one year's contribution based upon his or her last year's salary.

This Section is applicable to all participants in service after June 30, 1969 unless a participant has elected, prior to September 1, 1969, in a written direction filed with the board not to be subject to the provisions of this Section. Any participant in service on or after July 1, 1992 shall have the option of electing prior to April 1, 1993, in a written direction filed with the board, to be covered by the provisions of the 1969 amendatory Act. Such participant shall be required to make the aforesaid additional contributions with compound interest at 4% per annum.

(d) Except as provided in subsections (a-1), (a-2), (a-3), and (a-4), any Any participant who has become eligible to receive the maximum rate of annuity and who resumes service as a judge after receiving a retirement annuity under this Article shall have the amount of his or her retirement annuity increased by 3% of the originally granted annuity amount for each year of such resumed service, beginning in January of the year next following the date of such resumed service, upon subsequent termination of such resumed service.

(e) Beginning January 1, 1990, and except as provided in subsections (a-1) and (b), all automatic annual increases payable under this Section shall be calculated as a percentage of the total annuity payable at the time of the increase, including previous increases granted under this Article.

(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

(40 ILCS 5/18-132) (from Ch. 108 1/2, par. 18-132)

Sec. 18-132. Obligations of State; funding guarantee.

(a) The payment of (1) the required State contributions, (2) all benefits granted under this system and (3) all expenses in connection with the administration and operation thereof are the obligations of the State to the extent specified in this Article.

(b) The State shall be contractually obligated to contribute to the System in each State fiscal year an amount not less than the sum required in Section 18-131 as that Section existed prior to the effective date of this amendatory Act of the 98th General Assembly.

The obligations created under this subsection (b) are contractual obligations protected and enforceable under Article I, Section 16 and Article XIII, Section 5 of the Illinois Constitution.

Notwithstanding any other provision of law, if the State fails to pay in a State fiscal year the amount guaranteed under this subsection (b), the System may bring a mandamus action in the Circuit Court of Sangamon County to compel the State to make that payment, irrespective of other remedies that may be available to the System. It shall be the mandatory fiduciary obligation of the Board of the System to bring that action if the State fails to pay in the fiscal year the amount guaranteed under this subsection (b). Before commencing that action, the Board shall submit a voucher for contributions required under Section 18-140. If the State fails to pay a vouchered amount within 90 days after receiving a voucher for that amount, then the Board shall submit a written request to the Comptroller seeking payment of that amount. A copy of the request shall be filed with the Secretary of State, and the Secretary of State shall provide copies of the request to the Governor and General Assembly. No earlier than the 16th day after filing a request with the Secretary, but no later than the 21st day after filing that request, the Board may commence such an action in the Circuit Court. If the Board fails to commence such action on or before the 21st day after filing the request with the Secretary of State, then any Tier I employee or Tier I retiree who made an election under paragraph (1) of subsection (a) or (a-5) of Section 18-120.5 may file a mandamus action against the Board to compel the Board to commence its mandamus action against the State. This subsection (b) constitutes an express waiver of the State's sovereign immunity. In ordering the State to make the required payment, the court may order a reasonable payment schedule to enable the State to make the required payment. The obligations and causes of action created under this subsection (b) shall be in addition to any other right or remedy otherwise accorded by common law, or State or federal law, and nothing in this subsection (b) shall be construed to deny, abrogate, impair, or waive any such common law or statutory right or remedy.

Any payments required to be made by the State pursuant to this subsection (b) are expressly subordinated to the payment of the principal, interest, and premium, if any, on any bonded debt obligation of the State or any other State-created entity, either currently outstanding or to be issued, for which the source of repayment or security thereon is derived directly or indirectly from tax revenues collected by the State or any other State-created entity. Payments on such bonded obligations include any statutory fund transfers or other prefunding mechanisms or formulas set forth, now or hereafter, in State law or bond indentures, into debt service funds or accounts of the State related to such bonded obligations, consistent with the payment schedules associated with such obligations.

(Source: P.A. 83-1440.)

(40 ILCS 5/18-133) (from Ch. 108 1/2, par. 18-133)

Sec. 18-133. Financing; employee contributions.

(a) Effective July 1, 1967, each participant is required to contribute 7 1/2% of each payment of salary toward the retirement annuity. Such contributions shall continue during the entire time the participant is in service, with the following exceptions:

(1) Contributions for the retirement annuity are not required on salary received after 18 years of service by persons who were participants before January 2, 1954.

(2) A participant who continues to serve as a judge after becoming eligible to receive the maximum rate of annuity may elect, through a written direction filed with the Board, to discontinue contributing to the System. Any such option elected by a judge shall be irrevocable unless prior to January 1, 2000, and while continuing to serve as judge, the judge (A) files with the Board a letter cancelling the direction to discontinue contributing to the System and requesting that such contributing resume, and (B) pays into the System an amount equal to the total of the discontinued contributions plus interest thereon at 5% per annum. Service credits earned in any other "participating system" as defined in Article 20 of this Code shall be considered for purposes of determining a judge's eligibility to discontinue contributions under this subdivision (a)(2).

(3) A participant who (i) has attained age 60, (ii) continues to serve as a judge after becoming eligible to receive the maximum rate of annuity, and (iii) has not elected to discontinue contributing to the System under subdivision (a)(2) of this Section (or has revoked any such election) may elect, through a written direction filed with the Board, to make contributions to the System based only on the amount of the increases in salary received by the judge on or after the date of the election, rather than the total salary received. If a judge who is making contributions to the System on the effective date of this amendatory Act of the 91st General Assembly makes an election to limit contributions under this subdivision (a)(3) within 90 days after that effective date, the election shall be deemed to become effective on that effective date and the judge shall be entitled to receive a refund of any excess contributions paid to the System during that 90-day period; any other election under this subdivision (a)(3) becomes effective on the first of the month following the date of the election. An election to limit contributions under this subdivision (a)(3) is irrevocable. Service credits earned in any other participating system as defined in Article 20 of this Code shall be considered for purposes of determining a judge's eligibility to make an election under this subdivision (a)(3).

(a-5) In addition to the contributions otherwise required under this Article, and notwithstanding the provisions of and any election under subsection (a) of this Section, each Tier I employee who made the election under item (ii) of paragraph (1) of subsection (a) of Section 18-120.5 shall also make the following contributions toward the cost of his or her retirement annuity from each payment of salary received by him or her for service as a judge:

(1) beginning July 1, 2014 and through June 30, 2015, 1% of salary; and

(2) beginning on July 1, 2015, 2% of salary.

(b) Beginning July 1, 1969, each participant is required to contribute 1% of each payment of salary towards the automatic increase in annuity provided in Section 18-125.1. However, such contributions need not be made by any participant who has elected prior to September 15, 1969, not to be subject to the automatic increase in annuity provisions.

(c) Effective July 13, 1953, each married participant subject to the survivor's annuity provisions is required to contribute 2 1/2% of each payment of salary, whether or not he or she is required to make any other contributions under this Section. Such contributions shall be made concurrently with the contributions made for annuity purposes.

(d) Notwithstanding any other provision of this Article, the required contributions for a participant shall not be based on any salary in excess of the salary limitation applicable to that participant under Section 18-111 or subsection (b-5) of Section who first becomes a participant on or after January 1, 2011 shall not exceed the contributions that would be due under this Article if that participant's highest salary for annuity purposes were $106,800, plus any increase in that amount under Section 18-125.

(Source: P.A. 96-1490, eff. 1-1-11.)

(40 ILCS 5/18-140) (from Ch. 108 1/2, par. 18-140)

Sec. 18-140. To certify required State contributions and submit vouchers.

(a) The Board shall certify to the Governor, on or before November 15 of each year through until November 15, 2011, the amount of the required State contribution to the System for the following fiscal year and shall specifically identify the System's projected State normal cost for that fiscal year. The certification under this subsection (a) shall include a copy of the actuarial recommendations upon which it is based and shall specifically identify the System's projected State normal cost for that fiscal year.

(a-5) On or before November 1 of each year, beginning November 1, 2012, the Board shall submit to the State Actuary, the Governor, and the General Assembly a proposed certification of the amount of the required State contribution to the System for the next fiscal year, along with all of the actuarial assumptions, calculations, and data upon which that proposed certification is based. On or before January 1 of each year, beginning January 1, 2013, the State Actuary shall issue a preliminary report concerning the proposed certification and identifying, if necessary, recommended changes in actuarial assumptions that the Board must consider before finalizing its certification of the required State contributions.

On or before January 15, 2013 and every January 15 thereafter, the Board shall certify to the Governor and the General Assembly the amount of the required State contribution for the next fiscal year. The certification shall include a copy of the actuarial recommendations upon which it is based and shall specifically identify the System's projected State normal cost for that fiscal year. The Board's certification must note any deviations from the State Actuary's recommended changes, the reason or reasons for not following the State Actuary's recommended changes, and the fiscal impact of not following the State Actuary's recommended changes on the required State contribution.

(a-7) On or before May 1, 2004, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2005, taking into account the amounts appropriated to and received by the System under subsection (d) of Section 7.2 of the General Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by this amendatory Act of the 94th General Assembly.

On or before April 1, 2011, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2011, applying the changes made by Public Act 96-889 to the System's assets and liabilities as of June 30, 2009 as though Public Act 96-889 was approved on that date.

(b) Beginning in State fiscal year 1996, on or as soon as possible after the 15th day of each month the Board shall submit vouchers for payment of State contributions to the System, in a total monthly amount of one-twelfth of the required annual State contribution certified under subsection (a). From the effective date of this amendatory Act of the 93rd General Assembly through June 30, 2004, the Board shall not submit vouchers for the remainder of fiscal year 2004 in excess of the fiscal year 2004 certified contribution amount determined under this Section after taking into consideration the transfer to the System under subsection (c) of Section 6z-61 of the State Finance Act. These vouchers shall be paid by the State Comptroller and Treasurer by warrants drawn on the funds appropriated to the System for that fiscal year.

If in any month the amount remaining unexpended from all other appropriations to the System for the applicable fiscal year (including the appropriations to the System under Section 8.12 of the State Finance Act and Section 1 of the State Pension Funds Continuing Appropriation Act) is less than the amount lawfully vouchered under this Section, the difference shall be paid from the General Revenue Fund under the continuing appropriation authority provided in Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 97-694, eff. 6-18-12.)

(40 ILCS 5/18-169)

Sec. 18-169. Application and expiration of new benefit increases.

(a) As used in this Section, "new benefit increase" means an increase in the amount of any benefit provided under this Article, or an expansion of the conditions of eligibility for any benefit under this Article, that results from an amendment to this Code that takes effect after the effective date of this amendatory Act of the 94th General Assembly. "New benefit increase", however, does not include any benefit increase resulting from the changes made to this Article by this amendatory Act of the 98th General Assembly.

(b) Notwithstanding any other provision of this Code or any subsequent amendment to this Code, every new benefit increase is subject to this Section and shall be deemed to be granted only in conformance with and contingent upon compliance with the provisions of this Section.

(c) The Public Act enacting a new benefit increase must identify and provide for payment to the System of additional funding at least sufficient to fund the resulting annual increase in cost to the System as it accrues.

Every new benefit increase is contingent upon the General Assembly providing the additional funding required under this subsection. The Commission on Government Forecasting and Accountability shall analyze whether adequate additional funding has been provided for the new benefit increase and shall report its analysis to the Public Pension Division of the Department of Financial and Professional Regulation. A new benefit increase created by a Public Act that does not include the additional funding required under this subsection is null and void. If the Public Pension Division determines that the additional funding provided for a new benefit increase under this subsection is or has become inadequate, it may so certify to the Governor and the State Comptroller and, in the absence of corrective action by the General Assembly, the new benefit increase shall expire at the end of the fiscal year in which the certification is made.

(d) Every new benefit increase shall expire 5 years after its effective date or on such earlier date as may be specified in the language enacting the new benefit increase or provided under subsection (c). This does not prevent the General Assembly from extending or re-creating a new benefit increase by law.

(e) Except as otherwise provided in the language creating the new benefit increase, a new benefit increase that expires under this Section continues to apply to persons who applied and qualified for the affected benefit while the new benefit increase was in effect and to the affected beneficiaries and alternate payees of such persons, but does not apply to any other person, including without limitation a person who continues in service after the expiration date and did not apply and qualify for the affected benefit while the new benefit increase was in effect.

(Source: P.A. 94-4, eff. 6-1-05.)

Section 97. Severability.

(a) Except as otherwise provided in this Act, and except as provided in subsection (b), the provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

(b) If any benefit change made by this amendatory Act Article 18 of the Illinois Pension Code is determined to be unconstitutional or otherwise invalid by a final unappealable decision of an Illinois court or a court of competent jurisdiction, then the State funding guarantee provisions added to that Article by this amendatory Act shall also be invalid, and those funding guarantee provisions shall be contingent upon and inseverable from those benefit changes.

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