100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3175

 

Introduced , by Rep. Nick Sauer

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-125.5 new
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-119 new
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
30 ILCS 805/8.41 new

    Amends the State Universities and Downstate Teacher Articles of the Illinois Pension Code. Provides that, for academic years beginning on or after July 1, 2017, if the amount of a participant's earnings for any academic year used to determine the final rate of earnings, determined on a full-time equivalent basis, exceeds the amount of his or her earnings with the same employer for the previous academic year, determined on a full-time equivalent basis, by more than the unadjusted percentage increase in the consumer price index-u for that year (rather than 6%), then the participant's employer shall pay to the applicable System, in addition to all other payments required and in accordance with guidelines established by that System, the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of the unadjusted percentage increase in the consumer price index-u for that year (rather than the present value of the increase in benefits resulting from the portion of the increase in earnings that is in excess of 6%). Defines "consumer price index-u". Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


LRB100 09843 RPS 20013 b

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

 

 

A BILL FOR

 

HB3175LRB100 09843 RPS 20013 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 15-155 and 16-158 and by adding Sections 15-125.5 and
616-119 as follows:
 
7    (40 ILCS 5/15-125.5 new)
8    Sec. 15-125.5. Consumer price index-u. "Consumer price
9index-u": The index published by the Bureau of Labor Statistics
10of the United States Department of Labor that measures the
11average change in prices of goods and services purchased by all
12urban consumers, United States city average, all items, 1982-84
13= 100.
 
14    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
15    Sec. 15-155. Employer contributions.
16    (a) The State of Illinois shall make contributions by
17appropriations of amounts which, together with the other
18employer contributions from trust, federal, and other funds,
19employee contributions, income from investments, and other
20income of this System, will be sufficient to meet the cost of
21maintaining and administering the System on a 90% funded basis
22in accordance with actuarial recommendations.

 

 

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1    The Board shall determine the amount of State contributions
2required for each fiscal year on the basis of the actuarial
3tables and other assumptions adopted by the Board and the
4recommendations of the actuary, using the formula in subsection
5(a-1).
6    (a-1) For State fiscal years 2012 through 2045, the minimum
7contribution to the System to be made by the State for each
8fiscal year shall be an amount determined by the System to be
9sufficient to bring the total assets of the System up to 90% of
10the total actuarial liabilities of the System by the end of
11State fiscal year 2045. In making these determinations, the
12required State contribution shall be calculated each year as a
13level percentage of payroll over the years remaining to and
14including fiscal year 2045 and shall be determined under the
15projected unit credit actuarial cost method.
16    For State fiscal years 1996 through 2005, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19so that by State fiscal year 2011, the State is contributing at
20the rate required under this Section.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2006 is
23$166,641,900.
24    Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2007 is
26$252,064,100.

 

 

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1    For each of State fiscal years 2008 through 2009, the State
2contribution to the System, as a percentage of the applicable
3employee payroll, shall be increased in equal annual increments
4from the required State contribution for State fiscal year
52007, so that by State fiscal year 2011, the State is
6contributing at the rate otherwise required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2010 is
9$702,514,000 and shall be made from the State Pensions Fund and
10proceeds of bonds sold in fiscal year 2010 pursuant to Section
117.2 of the General Obligation Bond Act, less (i) the pro rata
12share of bond sale expenses determined by the System's share of
13total bond proceeds, (ii) any amounts received from the General
14Revenue Fund in fiscal year 2010, (iii) any reduction in bond
15proceeds due to the issuance of discounted bonds, if
16applicable.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2011 is
19the amount recertified by the System on or before April 1, 2011
20pursuant to Section 15-165 and shall be made from the State
21Pensions Fund and proceeds of bonds sold in fiscal year 2011
22pursuant to Section 7.2 of the General Obligation Bond Act,
23less (i) the pro rata share of bond sale expenses determined by
24the System's share of total bond proceeds, (ii) any amounts
25received from the General Revenue Fund in fiscal year 2011, and
26(iii) any reduction in bond proceeds due to the issuance of

 

 

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1discounted bonds, if applicable.
2    Beginning in State fiscal year 2046, the minimum State
3contribution for each fiscal year shall be the amount needed to
4maintain the total assets of the System at 90% of the total
5actuarial liabilities of the System.
6    Amounts received by the System pursuant to Section 25 of
7the Budget Stabilization Act or Section 8.12 of the State
8Finance Act in any fiscal year do not reduce and do not
9constitute payment of any portion of the minimum State
10contribution required under this Article in that fiscal year.
11Such amounts shall not reduce, and shall not be included in the
12calculation of, the required State contributions under this
13Article in any future year until the System has reached a
14funding ratio of at least 90%. A reference in this Article to
15the "required State contribution" or any substantially similar
16term does not include or apply to any amounts payable to the
17System under Section 25 of the Budget Stabilization Act.
18    Notwithstanding any other provision of this Section, the
19required State contribution for State fiscal year 2005 and for
20fiscal year 2008 and each fiscal year thereafter, as calculated
21under this Section and certified under Section 15-165, shall
22not exceed an amount equal to (i) the amount of the required
23State contribution that would have been calculated under this
24Section for that fiscal year if the System had not received any
25payments under subsection (d) of Section 7.2 of the General
26Obligation Bond Act, minus (ii) the portion of the State's

 

 

HB3175- 5 -LRB100 09843 RPS 20013 b

1total debt service payments for that fiscal year on the bonds
2issued in fiscal year 2003 for the purposes of that Section
37.2, as determined and certified by the Comptroller, that is
4the same as the System's portion of the total moneys
5distributed under subsection (d) of Section 7.2 of the General
6Obligation Bond Act. In determining this maximum for State
7fiscal years 2008 through 2010, however, the amount referred to
8in item (i) shall be increased, as a percentage of the
9applicable employee payroll, in equal increments calculated
10from the sum of the required State contribution for State
11fiscal year 2007 plus the applicable portion of the State's
12total debt service payments for fiscal year 2007 on the bonds
13issued in fiscal year 2003 for the purposes of Section 7.2 of
14the General Obligation Bond Act, so that, by State fiscal year
152011, the State is contributing at the rate otherwise required
16under this Section.
17    (b) If an employee is paid from trust or federal funds, the
18employer shall pay to the Board contributions from those funds
19which are sufficient to cover the accruing normal costs on
20behalf of the employee. However, universities having employees
21who are compensated out of local auxiliary funds, income funds,
22or service enterprise funds are not required to pay such
23contributions on behalf of those employees. The local auxiliary
24funds, income funds, and service enterprise funds of
25universities shall not be considered trust funds for the
26purpose of this Article, but funds of alumni associations,

 

 

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1foundations, and athletic associations which are affiliated
2with the universities included as employers under this Article
3and other employers which do not receive State appropriations
4are considered to be trust funds for the purpose of this
5Article.
6    (b-1) The City of Urbana and the City of Champaign shall
7each make employer contributions to this System for their
8respective firefighter employees who participate in this
9System pursuant to subsection (h) of Section 15-107. The rate
10of contributions to be made by those municipalities shall be
11determined annually by the Board on the basis of the actuarial
12assumptions adopted by the Board and the recommendations of the
13actuary, and shall be expressed as a percentage of salary for
14each such employee. The Board shall certify the rate to the
15affected municipalities as soon as may be practical. The
16employer contributions required under this subsection shall be
17remitted by the municipality to the System at the same time and
18in the same manner as employee contributions.
19    (c) Through State fiscal year 1995: The total employer
20contribution shall be apportioned among the various funds of
21the State and other employers, whether trust, federal, or other
22funds, in accordance with actuarial procedures approved by the
23Board. State of Illinois contributions for employers receiving
24State appropriations for personal services shall be payable
25from appropriations made to the employers or to the System. The
26contributions for Class I community colleges covering earnings

 

 

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1other than those paid from trust and federal funds, shall be
2payable solely from appropriations to the Illinois Community
3College Board or the System for employer contributions.
4    (d) Beginning in State fiscal year 1996, the required State
5contributions to the System shall be appropriated directly to
6the System and shall be payable through vouchers issued in
7accordance with subsection (c) of Section 15-165, except as
8provided in subsection (g).
9    (e) The State Comptroller shall draw warrants payable to
10the System upon proper certification by the System or by the
11employer in accordance with the appropriation laws and this
12Code.
13    (f) Normal costs under this Section means liability for
14pensions and other benefits which accrues to the System because
15of the credits earned for service rendered by the participants
16during the fiscal year and expenses of administering the
17System, but shall not include the principal of or any
18redemption premium or interest on any bonds issued by the Board
19or any expenses incurred or deposits required in connection
20therewith.
21    (g) For academic years beginning on or after June 1, 2005
22and before July 1, 2017, if If the amount of a participant's
23earnings for any academic year used to determine the final rate
24of earnings, determined on a full-time equivalent basis,
25exceeds the amount of his or her earnings with the same
26employer for the previous academic year, determined on a

 

 

HB3175- 8 -LRB100 09843 RPS 20013 b

1full-time equivalent basis, by more than 6%, the participant's
2employer shall pay to the System, in addition to all other
3payments required under this Section and in accordance with
4guidelines established by the System, the present value of the
5increase in benefits resulting from the portion of the increase
6in earnings that is in excess of 6%. This present value shall
7be computed by the System on the basis of the actuarial
8assumptions and tables used in the most recent actuarial
9valuation of the System that is available at the time of the
10computation. The System may require the employer to provide any
11pertinent information or documentation.
12    Whenever it determines that a payment is or may be required
13under this subsection (g), the System shall calculate the
14amount of the payment and bill the employer for that amount.
15The bill shall specify the calculations used to determine the
16amount due. If the employer disputes the amount of the bill, it
17may, within 30 days after receipt of the bill, apply to the
18System in writing for a recalculation. The application must
19specify in detail the grounds of the dispute and, if the
20employer asserts that the calculation is subject to subsection
21(h) or (i) of this Section, must include an affidavit setting
22forth and attesting to all facts within the employer's
23knowledge that are pertinent to the applicability of subsection
24(h) or (i). Upon receiving a timely application for
25recalculation, the System shall review the application and, if
26appropriate, recalculate the amount due.

 

 

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1    The employer contributions required under this subsection
2(g) may be paid in the form of a lump sum within 90 days after
3receipt of the bill. If the employer contributions are not paid
4within 90 days after receipt of the bill, then interest will be
5charged at a rate equal to the System's annual actuarially
6assumed rate of return on investment compounded annually from
7the 91st day after receipt of the bill. Payments must be
8concluded within 3 years after the employer's receipt of the
9bill.
10    When assessing payment for any amount due under this
11subsection (g), the System shall include earnings, to the
12extent not established by a participant under Section 15-113.11
13or 15-113.12, that would have been paid to the participant had
14the participant not taken (i) periods of voluntary or
15involuntary furlough occurring on or after July 1, 2015 and on
16or before June 30, 2017 or (ii) periods of voluntary pay
17reduction in lieu of furlough occurring on or after July 1,
182015 and on or before June 30, 2017. Determining earnings that
19would have been paid to a participant had the participant not
20taken periods of voluntary or involuntary furlough or periods
21of voluntary pay reduction shall be the responsibility of the
22employer, and shall be reported in a manner prescribed by the
23System.
24    (g-1) For academic years beginning on or after July 1,
252017, if the amount of a participant's earnings for any
26academic year used to determine the final rate of earnings,

 

 

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1determined on a full-time equivalent basis, exceeds the amount
2of his or her earnings with the same employer for the previous
3academic year, determined on a full-time equivalent basis, by
4more than the unadjusted percentage increase in the consumer
5price index-u for that year, then the participant's employer
6shall pay to the System, in addition to all other payments
7required under this Section and in accordance with guidelines
8established by the System, the present value of the increase in
9benefits resulting from the portion of the increase in earnings
10that is in excess of the unadjusted percentage increase in the
11consumer price index-u for that year. This present value shall
12be computed by the System on the basis of the actuarial
13assumptions and tables used in the most recent actuarial
14valuation of the System that is available at the time of the
15computation. The System may require the employer to provide any
16pertinent information or documentation.
17    Whenever it determines that a payment is or may be required
18under this subsection (g-1), the System shall calculate the
19amount of the payment and bill the employer for that amount.
20The bill shall specify the calculations used to determine the
21amount due. If the employer disputes the amount of the bill, it
22may, within 30 days after receipt of the bill, apply to the
23System in writing for a recalculation. The application must
24specify in detail the grounds of the dispute and, if the
25employer asserts that the calculation is subject to subsection
26(i-1) of this Section, must include an affidavit setting forth

 

 

HB3175- 11 -LRB100 09843 RPS 20013 b

1and attesting to all facts within the employer's knowledge that
2are pertinent to the applicability of subsection (i-1). Upon
3receiving a timely application for recalculation, the System
4shall review the application and, if appropriate, recalculate
5the amount due.
6    The employer contributions required under this subsection
7(g-1) may be paid in the form of a lump sum within 90 days after
8receipt of the bill. If the employer contributions are not paid
9within 90 days after receipt of the bill, then interest shall
10be charged at a rate equal to the System's annual actuarially
11assumed rate of return on investment compounded annually from
12the 91st day after receipt of the bill. Payments must be
13concluded within 3 years after the employer's receipt of the
14bill.
15    (h) This subsection (h) applies only to payments made or
16salary increases given on or after June 1, 2005 but before July
171, 2011. The changes made by Public Act 94-1057 shall not
18require the System to refund any payments received before July
1931, 2006 (the effective date of Public Act 94-1057).
20    When assessing payment for any amount due under subsection
21(g), the System shall exclude earnings increases paid to
22participants under contracts or collective bargaining
23agreements entered into, amended, or renewed before June 1,
242005.
25    When assessing payment for any amount due under subsection
26(g), the System shall exclude earnings increases paid to a

 

 

HB3175- 12 -LRB100 09843 RPS 20013 b

1participant at a time when the participant is 10 or more years
2from retirement eligibility under Section 15-135.
3    When assessing payment for any amount due under subsection
4(g), the System shall exclude earnings increases resulting from
5overload work, including a contract for summer teaching, or
6overtime when the employer has certified to the System, and the
7System has approved the certification, that: (i) in the case of
8overloads (A) the overload work is for the sole purpose of
9academic instruction in excess of the standard number of
10instruction hours for a full-time employee occurring during the
11academic year that the overload is paid and (B) the earnings
12increases are equal to or less than the rate of pay for
13academic instruction computed using the participant's current
14salary rate and work schedule; and (ii) in the case of
15overtime, the overtime was necessary for the educational
16mission.
17    When assessing payment for any amount due under subsection
18(g), the System shall exclude any earnings increase resulting
19from (i) a promotion for which the employee moves from one
20classification to a higher classification under the State
21Universities Civil Service System, (ii) a promotion in academic
22rank for a tenured or tenure-track faculty position, or (iii) a
23promotion that the Illinois Community College Board has
24recommended in accordance with subsection (k) of this Section.
25These earnings increases shall be excluded only if the
26promotion is to a position that has existed and been filled by

 

 

HB3175- 13 -LRB100 09843 RPS 20013 b

1a member for no less than one complete academic year and the
2earnings increase as a result of the promotion is an increase
3that results in an amount no greater than the average salary
4paid for other similar positions.
5    (i) When assessing payment for any amount due under
6subsection (g), the System shall exclude any salary increase
7described in subsection (h) of this Section given on or after
8July 1, 2011 but before July 1, 2014 under a contract or
9collective bargaining agreement entered into, amended, or
10renewed on or after June 1, 2005 but before July 1, 2011.
11Notwithstanding any other provision of this Section, any
12payments made or salary increases given after June 30, 2014
13shall be used in assessing payment for any amount due under
14subsection (g) of this Section.
15    (i-1) When assessing payment for any amount due under
16subsection (g-1), the System shall exclude earnings increases
17paid to participants under contracts or collective bargaining
18agreements entered into, amended, or renewed before the
19effective date of this amendatory Act of the 100th General
20Assembly.
21    (j) The System shall prepare a report and file copies of
22the report with the Governor and the General Assembly by
23January 1, 2007 that contains all of the following information:
24        (1) The number of recalculations required by the
25    changes made to this Section by Public Act 94-1057 for each
26    employer.

 

 

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1        (2) The dollar amount by which each employer's
2    contribution to the System was changed due to
3    recalculations required by Public Act 94-1057.
4        (3) The total amount the System received from each
5    employer as a result of the changes made to this Section by
6    Public Act 94-4.
7        (4) The increase in the required State contribution
8    resulting from the changes made to this Section by Public
9    Act 94-1057.
10    (k) The Illinois Community College Board shall adopt rules
11for recommending lists of promotional positions submitted to
12the Board by community colleges and for reviewing the
13promotional lists on an annual basis. When recommending
14promotional lists, the Board shall consider the similarity of
15the positions submitted to those positions recognized for State
16universities by the State Universities Civil Service System.
17The Illinois Community College Board shall file a copy of its
18findings with the System. The System shall consider the
19findings of the Illinois Community College Board when making
20determinations under this Section. The System shall not exclude
21any earnings increases resulting from a promotion when the
22promotion was not submitted by a community college. Nothing in
23this subsection (k) shall require any community college to
24submit any information to the Community College Board.
25    (l) For purposes of determining the required State
26contribution to the System, the value of the System's assets

 

 

HB3175- 15 -LRB100 09843 RPS 20013 b

1shall be equal to the actuarial value of the System's assets,
2which shall be calculated as follows:
3    As of June 30, 2008, the actuarial value of the System's
4assets shall be equal to the market value of the assets as of
5that date. In determining the actuarial value of the System's
6assets for fiscal years after June 30, 2008, any actuarial
7gains or losses from investment return incurred in a fiscal
8year shall be recognized in equal annual amounts over the
95-year period following that fiscal year.
10    (m) For purposes of determining the required State
11contribution to the system for a particular year, the actuarial
12value of assets shall be assumed to earn a rate of return equal
13to the system's actuarially assumed rate of return.
14(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
1599-897, eff. 1-1-17.)
 
16    (40 ILCS 5/16-119 new)
17    Sec. 16-119. Consumer price index-u. "Consumer price
18index-u": The index published by the Bureau of Labor Statistics
19of the United States Department of Labor that measures the
20average change in prices of goods and services purchased by all
21urban consumers, United States city average, all items, 1982-84
22= 100.
 
23    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
24    (Text of Section WITHOUT the changes made by P.A. 98-599,

 

 

HB3175- 16 -LRB100 09843 RPS 20013 b

1which has been held unconstitutional)
2    Sec. 16-158. Contributions by State and other employing
3units.
4    (a) The State shall make contributions to the System by
5means of appropriations from the Common School Fund and other
6State funds of amounts which, together with other employer
7contributions, employee contributions, investment income, and
8other income, will be sufficient to meet the cost of
9maintaining and administering the System on a 90% funded basis
10in accordance with actuarial recommendations.
11    The Board shall determine the amount of State contributions
12required for each fiscal year on the basis of the actuarial
13tables and other assumptions adopted by the Board and the
14recommendations of the actuary, using the formula in subsection
15(b-3).
16    (a-1) Annually, on or before November 15 until November 15,
172011, the Board shall certify to the Governor the amount of the
18required State contribution for the coming fiscal year. The
19certification under this subsection (a-1) shall include a copy
20of the actuarial recommendations upon which it is based and
21shall specifically identify the System's projected State
22normal cost for that fiscal year.
23    On or before May 1, 2004, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2005, taking
26into account the amounts appropriated to and received by the

 

 

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1System under subsection (d) of Section 7.2 of the General
2Obligation Bond Act.
3    On or before July 1, 2005, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2006, taking
6into account the changes in required State contributions made
7by this amendatory Act of the 94th General Assembly.
8    On or before April 1, 2011, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2011, applying
11the changes made by Public Act 96-889 to the System's assets
12and liabilities as of June 30, 2009 as though Public Act 96-889
13was approved on that date.
14    (a-5) On or before November 1 of each year, beginning
15November 1, 2012, the Board shall submit to the State Actuary,
16the Governor, and the General Assembly a proposed certification
17of the amount of the required State contribution to the System
18for the next fiscal year, along with all of the actuarial
19assumptions, calculations, and data upon which that proposed
20certification is based. On or before January 1 of each year,
21beginning January 1, 2013, the State Actuary shall issue a
22preliminary report concerning the proposed certification and
23identifying, if necessary, recommended changes in actuarial
24assumptions that the Board must consider before finalizing its
25certification of the required State contributions. On or before
26January 15, 2013 and each January 15 thereafter, the Board

 

 

HB3175- 18 -LRB100 09843 RPS 20013 b

1shall certify to the Governor and the General Assembly the
2amount of the required State contribution for the next fiscal
3year. The Board's certification must note any deviations from
4the State Actuary's recommended changes, the reason or reasons
5for not following the State Actuary's recommended changes, and
6the fiscal impact of not following the State Actuary's
7recommended changes on the required State contribution.
8    (b) Through State fiscal year 1995, the State contributions
9shall be paid to the System in accordance with Section 18-7 of
10the School Code.
11    (b-1) Beginning in State fiscal year 1996, on the 15th day
12of each month, or as soon thereafter as may be practicable, the
13Board shall submit vouchers for payment of State contributions
14to the System, in a total monthly amount of one-twelfth of the
15required annual State contribution certified under subsection
16(a-1). From the effective date of this amendatory Act of the
1793rd General Assembly through June 30, 2004, the Board shall
18not submit vouchers for the remainder of fiscal year 2004 in
19excess of the fiscal year 2004 certified contribution amount
20determined under this Section after taking into consideration
21the transfer to the System under subsection (a) of Section
226z-61 of the State Finance Act. These vouchers shall be paid by
23the State Comptroller and Treasurer by warrants drawn on the
24funds appropriated to the System for that fiscal year.
25    If in any month the amount remaining unexpended from all
26other appropriations to the System for the applicable fiscal

 

 

HB3175- 19 -LRB100 09843 RPS 20013 b

1year (including the appropriations to the System under Section
28.12 of the State Finance Act and Section 1 of the State
3Pension Funds Continuing Appropriation Act) is less than the
4amount lawfully vouchered under this subsection, the
5difference shall be paid from the Common School Fund under the
6continuing appropriation authority provided in Section 1.1 of
7the State Pension Funds Continuing Appropriation Act.
8    (b-2) Allocations from the Common School Fund apportioned
9to school districts not coming under this System shall not be
10diminished or affected by the provisions of this Article.
11    (b-3) For State fiscal years 2012 through 2045, the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the System to be
14sufficient to bring the total assets of the System up to 90% of
15the total actuarial liabilities of the System by the end of
16State fiscal year 2045. In making these determinations, the
17required State contribution shall be calculated each year as a
18level percentage of payroll over the years remaining to and
19including fiscal year 2045 and shall be determined under the
20projected unit credit actuarial cost method.
21    For State fiscal years 1996 through 2005, the State
22contribution to the System, as a percentage of the applicable
23employee payroll, shall be increased in equal annual increments
24so that by State fiscal year 2011, the State is contributing at
25the rate required under this Section; except that in the
26following specified State fiscal years, the State contribution

 

 

HB3175- 20 -LRB100 09843 RPS 20013 b

1to the System shall not be less than the following indicated
2percentages of the applicable employee payroll, even if the
3indicated percentage will produce a State contribution in
4excess of the amount otherwise required under this subsection
5and subsection (a), and notwithstanding any contrary
6certification made under subsection (a-1) before the effective
7date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
8in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
92003; and 13.56% in FY 2004.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2006 is
12$534,627,700.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2007 is
15$738,014,500.
16    For each of State fiscal years 2008 through 2009, the State
17contribution to the System, as a percentage of the applicable
18employee payroll, shall be increased in equal annual increments
19from the required State contribution for State fiscal year
202007, so that by State fiscal year 2011, the State is
21contributing at the rate otherwise required under this Section.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2010 is
24$2,089,268,000 and shall be made from the proceeds of bonds
25sold in fiscal year 2010 pursuant to Section 7.2 of the General
26Obligation Bond Act, less (i) the pro rata share of bond sale

 

 

HB3175- 21 -LRB100 09843 RPS 20013 b

1expenses determined by the System's share of total bond
2proceeds, (ii) any amounts received from the Common School Fund
3in fiscal year 2010, and (iii) any reduction in bond proceeds
4due to the issuance of discounted bonds, if applicable.
5    Notwithstanding any other provision of this Article, the
6total required State contribution for State fiscal year 2011 is
7the amount recertified by the System on or before April 1, 2011
8pursuant to subsection (a-1) of this Section and shall be made
9from the proceeds of bonds sold in fiscal year 2011 pursuant to
10Section 7.2 of the General Obligation Bond Act, less (i) the
11pro rata share of bond sale expenses determined by the System's
12share of total bond proceeds, (ii) any amounts received from
13the Common School Fund in fiscal year 2011, and (iii) any
14reduction in bond proceeds due to the issuance of discounted
15bonds, if applicable. This amount shall include, in addition to
16the amount certified by the System, an amount necessary to meet
17employer contributions required by the State as an employer
18under paragraph (e) of this Section, which may also be used by
19the System for contributions required by paragraph (a) of
20Section 16-127.
21    Beginning in State fiscal year 2046, the minimum State
22contribution for each fiscal year shall be the amount needed to
23maintain the total assets of the System at 90% of the total
24actuarial liabilities of the System.
25    Amounts received by the System pursuant to Section 25 of
26the Budget Stabilization Act or Section 8.12 of the State

 

 

HB3175- 22 -LRB100 09843 RPS 20013 b

1Finance Act in any fiscal year do not reduce and do not
2constitute payment of any portion of the minimum State
3contribution required under this Article in that fiscal year.
4Such amounts shall not reduce, and shall not be included in the
5calculation of, the required State contributions under this
6Article in any future year until the System has reached a
7funding ratio of at least 90%. A reference in this Article to
8the "required State contribution" or any substantially similar
9term does not include or apply to any amounts payable to the
10System under Section 25 of the Budget Stabilization Act.
11    Notwithstanding any other provision of this Section, the
12required State contribution for State fiscal year 2005 and for
13fiscal year 2008 and each fiscal year thereafter, as calculated
14under this Section and certified under subsection (a-1), shall
15not exceed an amount equal to (i) the amount of the required
16State contribution that would have been calculated under this
17Section for that fiscal year if the System had not received any
18payments under subsection (d) of Section 7.2 of the General
19Obligation Bond Act, minus (ii) the portion of the State's
20total debt service payments for that fiscal year on the bonds
21issued in fiscal year 2003 for the purposes of that Section
227.2, as determined and certified by the Comptroller, that is
23the same as the System's portion of the total moneys
24distributed under subsection (d) of Section 7.2 of the General
25Obligation Bond Act. In determining this maximum for State
26fiscal years 2008 through 2010, however, the amount referred to

 

 

HB3175- 23 -LRB100 09843 RPS 20013 b

1in item (i) shall be increased, as a percentage of the
2applicable employee payroll, in equal increments calculated
3from the sum of the required State contribution for State
4fiscal year 2007 plus the applicable portion of the State's
5total debt service payments for fiscal year 2007 on the bonds
6issued in fiscal year 2003 for the purposes of Section 7.2 of
7the General Obligation Bond Act, so that, by State fiscal year
82011, the State is contributing at the rate otherwise required
9under this Section.
10    (c) Payment of the required State contributions and of all
11pensions, retirement annuities, death benefits, refunds, and
12other benefits granted under or assumed by this System, and all
13expenses in connection with the administration and operation
14thereof, are obligations of the State.
15    If members are paid from special trust or federal funds
16which are administered by the employing unit, whether school
17district or other unit, the employing unit shall pay to the
18System from such funds the full accruing retirement costs based
19upon that service, which, beginning July 1, 2014, shall be at a
20rate, expressed as a percentage of salary, equal to the total
21minimum contribution to the System to be made by the State for
22that fiscal year, including both normal cost and unfunded
23liability components, expressed as a percentage of payroll, as
24determined by the System under subsection (b-3) of this
25Section. Employer contributions, based on salary paid to
26members from federal funds, may be forwarded by the

 

 

HB3175- 24 -LRB100 09843 RPS 20013 b

1distributing agency of the State of Illinois to the System
2prior to allocation, in an amount determined in accordance with
3guidelines established by such agency and the System. Any
4contribution for fiscal year 2015 collected as a result of the
5change made by this amendatory Act of the 98th General Assembly
6shall be considered a State contribution under subsection (b-3)
7of this Section.
8    (d) Effective July 1, 1986, any employer of a teacher as
9defined in paragraph (8) of Section 16-106 shall pay the
10employer's normal cost of benefits based upon the teacher's
11service, in addition to employee contributions, as determined
12by the System. Such employer contributions shall be forwarded
13monthly in accordance with guidelines established by the
14System.
15    However, with respect to benefits granted under Section
1616-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
17of Section 16-106, the employer's contribution shall be 12%
18(rather than 20%) of the member's highest annual salary rate
19for each year of creditable service granted, and the employer
20shall also pay the required employee contribution on behalf of
21the teacher. For the purposes of Sections 16-133.4 and
2216-133.5, a teacher as defined in paragraph (8) of Section
2316-106 who is serving in that capacity while on leave of
24absence from another employer under this Article shall not be
25considered an employee of the employer from which the teacher
26is on leave.

 

 

HB3175- 25 -LRB100 09843 RPS 20013 b

1    (e) Beginning July 1, 1998, every employer of a teacher
2shall pay to the System an employer contribution computed as
3follows:
4        (1) Beginning July 1, 1998 through June 30, 1999, the
5    employer contribution shall be equal to 0.3% of each
6    teacher's salary.
7        (2) Beginning July 1, 1999 and thereafter, the employer
8    contribution shall be equal to 0.58% of each teacher's
9    salary.
10The school district or other employing unit may pay these
11employer contributions out of any source of funding available
12for that purpose and shall forward the contributions to the
13System on the schedule established for the payment of member
14contributions.
15    These employer contributions are intended to offset a
16portion of the cost to the System of the increases in
17retirement benefits resulting from this amendatory Act of 1998.
18    Each employer of teachers is entitled to a credit against
19the contributions required under this subsection (e) with
20respect to salaries paid to teachers for the period January 1,
212002 through June 30, 2003, equal to the amount paid by that
22employer under subsection (a-5) of Section 6.6 of the State
23Employees Group Insurance Act of 1971 with respect to salaries
24paid to teachers for that period.
25    The additional 1% employee contribution required under
26Section 16-152 by this amendatory Act of 1998 is the

 

 

HB3175- 26 -LRB100 09843 RPS 20013 b

1responsibility of the teacher and not the teacher's employer,
2unless the employer agrees, through collective bargaining or
3otherwise, to make the contribution on behalf of the teacher.
4    If an employer is required by a contract in effect on May
51, 1998 between the employer and an employee organization to
6pay, on behalf of all its full-time employees covered by this
7Article, all mandatory employee contributions required under
8this Article, then the employer shall be excused from paying
9the employer contribution required under this subsection (e)
10for the balance of the term of that contract. The employer and
11the employee organization shall jointly certify to the System
12the existence of the contractual requirement, in such form as
13the System may prescribe. This exclusion shall cease upon the
14termination, extension, or renewal of the contract at any time
15after May 1, 1998.
16    (f) For school years beginning on or after June 1, 2005 and
17before July 1, 2017, if If the amount of a teacher's salary for
18any school year used to determine final average salary exceeds
19the member's annual full-time salary rate with the same
20employer for the previous school year by more than 6%, the
21teacher's employer shall pay to the System, in addition to all
22other payments required under this Section and in accordance
23with guidelines established by the System, the present value of
24the increase in benefits resulting from the portion of the
25increase in salary that is in excess of 6%. This present value
26shall be computed by the System on the basis of the actuarial

 

 

HB3175- 27 -LRB100 09843 RPS 20013 b

1assumptions and tables used in the most recent actuarial
2valuation of the System that is available at the time of the
3computation. If a teacher's salary for the 2005-2006 school
4year is used to determine final average salary under this
5subsection (f), then the changes made to this subsection (f) by
6Public Act 94-1057 shall apply in calculating whether the
7increase in his or her salary is in excess of 6%. For the
8purposes of this Section, change in employment under Section
910-21.12 of the School Code on or after June 1, 2005 shall
10constitute a change in employer. The System may require the
11employer to provide any pertinent information or
12documentation. The changes made to this subsection (f) by this
13amendatory Act of the 94th General Assembly apply without
14regard to whether the teacher was in service on or after its
15effective date.
16    Whenever it determines that a payment is or may be required
17under this subsection, the System shall calculate the amount of
18the payment and bill the employer for that amount. The bill
19shall specify the calculations used to determine the amount
20due. If the employer disputes the amount of the bill, it may,
21within 30 days after receipt of the bill, apply to the System
22in writing for a recalculation. The application must specify in
23detail the grounds of the dispute and, if the employer asserts
24that the calculation is subject to subsection (g) or (h) of
25this Section, must include an affidavit setting forth and
26attesting to all facts within the employer's knowledge that are

 

 

HB3175- 28 -LRB100 09843 RPS 20013 b

1pertinent to the applicability of that subsection. Upon
2receiving a timely application for recalculation, the System
3shall review the application and, if appropriate, recalculate
4the amount due.
5    The employer contributions required under this subsection
6(f) may be paid in the form of a lump sum within 90 days after
7receipt of the bill. If the employer contributions are not paid
8within 90 days after receipt of the bill, then interest will be
9charged at a rate equal to the System's annual actuarially
10assumed rate of return on investment compounded annually from
11the 91st day after receipt of the bill. Payments must be
12concluded within 3 years after the employer's receipt of the
13bill.
14    (f-1) For school years beginning on or after July 1, 2017,
15if the amount of a teacher's salary for any school year used to
16determine final average salary exceeds the member's annual
17full-time salary rate with the same employer for the previous
18school year by more than the unadjusted percentage increase in
19the consumer price index-u for that year, then the teacher's
20employer shall pay to the System, in addition to all other
21payments required under this Section and in accordance with
22guidelines established by the System, the present value of the
23increase in benefits resulting from the portion of the increase
24in salary that is in excess of the unadjusted percentage
25increase in the consumer price index-u for that year. This
26present value shall be computed by the System on the basis of

 

 

HB3175- 29 -LRB100 09843 RPS 20013 b

1the actuarial assumptions and tables used in the most recent
2actuarial valuation of the System that is available at the time
3of the computation. The System may require the employer to
4provide any pertinent information or documentation.
5    Whenever it determines that a payment is or may be required
6under this subsection (f-1), the System shall calculate the
7amount of the payment and bill the employer for that amount.
8The bill shall specify the calculations used to determine the
9amount due. If the employer disputes the amount of the bill, it
10may, within 30 days after receipt of the bill, apply to the
11System in writing for a recalculation. The application must
12specify in detail the grounds of the dispute and, if the
13employer asserts that the calculation is subject to subsection
14(h-1) of this Section, must include an affidavit setting forth
15and attesting to all facts within the employer's knowledge that
16are pertinent to the applicability of subsection (h-1). Upon
17receiving a timely application for recalculation, the System
18shall review the application and, if appropriate, recalculate
19the amount due.
20    The employer contributions required under this subsection
21(f-1) may be paid in the form of a lump sum within 90 days after
22receipt of the bill. If the employer contributions are not paid
23within 90 days after receipt of the bill, then interest shall
24be charged at a rate equal to the System's annual actuarially
25assumed rate of return on investment compounded annually from
26the 91st day after receipt of the bill. Payments must be

 

 

HB3175- 30 -LRB100 09843 RPS 20013 b

1concluded within 3 years after the employer's receipt of the
2bill.
3    (g) This subsection (g) applies only to payments made or
4salary increases given on or after June 1, 2005 but before July
51, 2011. The changes made by Public Act 94-1057 shall not
6require the System to refund any payments received before July
731, 2006 (the effective date of Public Act 94-1057).
8    When assessing payment for any amount due under subsection
9(f), the System shall exclude salary increases paid to teachers
10under contracts or collective bargaining agreements entered
11into, amended, or renewed before June 1, 2005.
12    When assessing payment for any amount due under subsection
13(f), the System shall exclude salary increases paid to a
14teacher at a time when the teacher is 10 or more years from
15retirement eligibility under Section 16-132 or 16-133.2.
16    When assessing payment for any amount due under subsection
17(f), the System shall exclude salary increases resulting from
18overload work, including summer school, when the school
19district has certified to the System, and the System has
20approved the certification, that (i) the overload work is for
21the sole purpose of classroom instruction in excess of the
22standard number of classes for a full-time teacher in a school
23district during a school year and (ii) the salary increases are
24equal to or less than the rate of pay for classroom instruction
25computed on the teacher's current salary and work schedule.
26    When assessing payment for any amount due under subsection

 

 

HB3175- 31 -LRB100 09843 RPS 20013 b

1(f), the System shall exclude a salary increase resulting from
2a promotion (i) for which the employee is required to hold a
3certificate or supervisory endorsement issued by the State
4Teacher Certification Board that is a different certification
5or supervisory endorsement than is required for the teacher's
6previous position and (ii) to a position that has existed and
7been filled by a member for no less than one complete academic
8year and the salary increase from the promotion is an increase
9that results in an amount no greater than the lesser of the
10average salary paid for other similar positions in the district
11requiring the same certification or the amount stipulated in
12the collective bargaining agreement for a similar position
13requiring the same certification.
14    When assessing payment for any amount due under subsection
15(f), the System shall exclude any payment to the teacher from
16the State of Illinois or the State Board of Education over
17which the employer does not have discretion, notwithstanding
18that the payment is included in the computation of final
19average salary.
20    (h) When assessing payment for any amount due under
21subsection (f), the System shall exclude any salary increase
22described in subsection (g) of this Section given on or after
23July 1, 2011 but before July 1, 2014 under a contract or
24collective bargaining agreement entered into, amended, or
25renewed on or after June 1, 2005 but before July 1, 2011.
26Notwithstanding any other provision of this Section, any

 

 

HB3175- 32 -LRB100 09843 RPS 20013 b

1payments made or salary increases given after June 30, 2014
2shall be used in assessing payment for any amount due under
3subsection (f) of this Section.
4    (h-1) When assessing payment for any amount due under
5subsection (f-1), the System shall exclude earnings increases
6paid to participants under contracts or collective bargaining
7agreements entered into, amended, or renewed before the
8effective date of this amendatory Act of the 100th General
9Assembly.
10    (i) The System shall prepare a report and file copies of
11the report with the Governor and the General Assembly by
12January 1, 2007 that contains all of the following information:
13        (1) The number of recalculations required by the
14    changes made to this Section by Public Act 94-1057 for each
15    employer.
16        (2) The dollar amount by which each employer's
17    contribution to the System was changed due to
18    recalculations required by Public Act 94-1057.
19        (3) The total amount the System received from each
20    employer as a result of the changes made to this Section by
21    Public Act 94-4.
22        (4) The increase in the required State contribution
23    resulting from the changes made to this Section by Public
24    Act 94-1057.
25    (j) For purposes of determining the required State
26contribution to the System, the value of the System's assets

 

 

HB3175- 33 -LRB100 09843 RPS 20013 b

1shall be equal to the actuarial value of the System's assets,
2which shall be calculated as follows:
3    As of June 30, 2008, the actuarial value of the System's
4assets shall be equal to the market value of the assets as of
5that date. In determining the actuarial value of the System's
6assets for fiscal years after June 30, 2008, any actuarial
7gains or losses from investment return incurred in a fiscal
8year shall be recognized in equal annual amounts over the
95-year period following that fiscal year.
10    (k) For purposes of determining the required State
11contribution to the system for a particular year, the actuarial
12value of assets shall be assumed to earn a rate of return equal
13to the system's actuarially assumed rate of return.
14(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1596-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
166-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
 
17    Section 90. The State Mandates Act is amended by adding
18Section 8.41 as follows:
 
19    (30 ILCS 805/8.41 new)
20    Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
21of this Act, no reimbursement by the State is required for the
22implementation of any mandate created by this amendatory Act of
23the 100th General Assembly.
 
24    Section 99. Effective date. This Act takes effect upon

 

 

HB3175- 34 -LRB100 09843 RPS 20013 b

1becoming law.