SB3651 EngrossedLRB102 22514 RPS 31655 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
5changing Section 7-172 as follows:
 
6    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
7    Sec. 7-172. Contributions by participating municipalities
8and participating instrumentalities.
9    (a) Each participating municipality and each participating
10instrumentality shall make payment to the fund as follows:
11        1. municipality contributions in an amount determined
12    by applying the municipality contribution rate to each
13    payment of earnings paid to each of its participating
14    employees;
15        2. an amount equal to the employee contributions
16    provided by paragraph (a) of Section 7-173, whether or not
17    the employee contributions are withheld as permitted by
18    that Section;
19        3. all accounts receivable, together with interest
20    charged thereon, as provided in Section 7-209, and any
21    amounts due under subsection (a-5) of Section 7-144;
22        4. if it has no participating employees with current
23    earnings, an amount payable which, over a closed period of

 

 

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1    20 years for participating municipalities and 10 years for
2    participating instrumentalities, will amortize, at the
3    effective rate for that year, any unfunded obligation. The
4    unfunded obligation shall be computed as provided in
5    paragraph 2 of subsection (b);
6        5. if it has fewer than 7 participating employees or a
7    negative balance in its municipality reserve, the greater
8    of (A) an amount payable that, over a period of 20 years,
9    will amortize at the effective rate for that year any
10    unfunded obligation, computed as provided in paragraph 2
11    of subsection (b) or (B) the amount required by paragraph
12    1 of this subsection (a).
13    (b) A separate municipality contribution rate shall be
14determined for each calendar year for all participating
15municipalities together with all instrumentalities thereof.
16The municipality contribution rate shall be determined for
17participating instrumentalities as if they were participating
18municipalities. The municipality contribution rate shall be
19the sum of the following percentages:
20        1. The percentage of earnings of all the participating
21    employees of all participating municipalities and
22    participating instrumentalities which, if paid over the
23    entire period of their service, will be sufficient when
24    combined with all employee contributions available for the
25    payment of benefits, to provide all annuities for
26    participating employees, and the $3,000 death benefit

 

 

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1    payable under Sections 7-158 and 7-164, such percentage to
2    be known as the normal cost rate.
3        2. The percentage of earnings of the participating
4    employees of each participating municipality and
5    participating instrumentalities necessary to adjust for
6    the difference between the present value of all benefits,
7    excluding temporary and total and permanent disability and
8    death benefits, to be provided for its participating
9    employees and the sum of its accumulated municipality
10    contributions and the accumulated employee contributions
11    and the present value of expected future employee and
12    municipality contributions pursuant to subparagraph 1 of
13    this paragraph (b). This adjustment shall be spread over a
14    period determined by the Board, not to exceed 30 years for
15    participating municipalities or 10 years for participating
16    instrumentalities.
17        3. The percentage of earnings of the participating
18    employees of all municipalities and participating
19    instrumentalities necessary to provide the present value
20    of all temporary and total and permanent disability
21    benefits granted during the most recent year for which
22    information is available.
23        4. The percentage of earnings of the participating
24    employees of all participating municipalities and
25    participating instrumentalities necessary to provide the
26    present value of the net single sum death benefits

 

 

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1    expected to become payable from the reserve established
2    under Section 7-206 during the year for which this rate is
3    fixed.
4        5. The percentage of earnings necessary to meet any
5    deficiency arising in the Terminated Municipality Reserve.
6    (c) A separate municipality contribution rate shall be
7computed for each participating municipality or participating
8instrumentality for its sheriff's law enforcement employees.
9    A separate municipality contribution rate shall be
10computed for the sheriff's law enforcement employees of each
11forest preserve district that elects to have such employees.
12For the period from January 1, 1986 to December 31, 1986, such
13rate shall be the forest preserve district's regular rate plus
142%.
15    In the event that the Board determines that there is an
16actuarial deficiency in the account of any municipality with
17respect to a person who has elected to participate in the Fund
18under Section 3-109.1 of this Code, the Board may adjust the
19municipality's contribution rate so as to make up that
20deficiency over such reasonable period of time as the Board
21may determine.
22    (d) The Board may establish a separate municipality
23contribution rate for all employees who are program
24participants employed under the federal Comprehensive
25Employment Training Act by all of the participating
26municipalities and instrumentalities. The Board may also

 

 

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1provide that, in lieu of a separate municipality rate for
2these employees, a portion of the municipality contributions
3for such program participants shall be refunded or an extra
4charge assessed so that the amount of municipality
5contributions retained or received by the fund for all CETA
6program participants shall be an amount equal to that which
7would be provided by the separate municipality contribution
8rate for all such program participants. Refunds shall be made
9to prime sponsors of programs upon submission of a claim
10therefor and extra charges shall be assessed to participating
11municipalities and instrumentalities. In establishing the
12municipality contribution rate as provided in paragraph (b) of
13this Section, the use of a separate municipality contribution
14rate for program participants or the refund of a portion of the
15municipality contributions, as the case may be, may be
16considered.
17    (e) Computations of municipality contribution rates for
18the following calendar year shall be made prior to the
19beginning of each year, from the information available at the
20time the computations are made, and on the assumption that the
21employees in each participating municipality or participating
22instrumentality at such time will continue in service until
23the end of such calendar year at their respective rates of
24earnings at such time.
25    (f) Any municipality which is the recipient of State
26allocations representing that municipality's contributions for

 

 

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1retirement annuity purposes on behalf of its employees as
2provided in Section 12-21.16 of the Illinois Public Aid Code
3shall pay the allocations so received to the Board for such
4purpose. Estimates of State allocations to be received during
5any taxable year shall be considered in the determination of
6the municipality's tax rate for that year under Section 7-171.
7If a special tax is levied under Section 7-171, none of the
8proceeds may be used to reimburse the municipality for the
9amount of State allocations received and paid to the Board.
10Any multiple-county or consolidated health department which
11receives contributions from a county under Section 11.2 of "An
12Act in relation to establishment and maintenance of county and
13multiple-county health departments", approved July 9, 1943, as
14amended, or distributions under Section 3 of the Department of
15Public Health Act, shall use these only for municipality
16contributions by the health department.
17    (g) Municipality contributions for the several purposes
18specified shall, for township treasurers and employees in the
19offices of the township treasurers who meet the qualifying
20conditions for coverage hereunder, be allocated among the
21several school districts and parts of school districts
22serviced by such treasurers and employees in the proportion
23which the amount of school funds of each district or part of a
24district handled by the treasurer bears to the total amount of
25all school funds handled by the treasurer.
26    From the funds subject to allocation among districts and

 

 

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1parts of districts pursuant to the School Code, the trustees
2shall withhold the proportionate share of the liability for
3municipality contributions imposed upon such districts by this
4Section, in respect to such township treasurers and employees
5and remit the same to the Board.
6    The municipality contribution rate for an educational
7service center shall initially be the same rate for each year
8as the regional office of education or school district which
9serves as its administrative agent. When actuarial data become
10available, a separate rate shall be established as provided in
11subparagraph (i) of this Section.
12    The municipality contribution rate for a public agency,
13other than a vocational education cooperative, formed under
14the Intergovernmental Cooperation Act shall initially be the
15average rate for the municipalities which are parties to the
16intergovernmental agreement. When actuarial data become
17available, a separate rate shall be established as provided in
18subparagraph (i) of this Section.
19    (h) Each participating municipality and participating
20instrumentality shall make the contributions in the amounts
21provided in this Section in the manner prescribed from time to
22time by the Board and all such contributions shall be
23obligations of the respective participating municipalities and
24participating instrumentalities to this fund. The failure to
25deduct any employee contributions shall not relieve the
26participating municipality or participating instrumentality of

 

 

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1its obligation to this fund. Delinquent payments of
2contributions due under this Section may, with interest, be
3recovered by civil action against the participating
4municipalities or participating instrumentalities.
5Municipality contributions, other than the amount necessary
6for employee contributions, for periods of service by
7employees from whose earnings no deductions were made for
8employee contributions to the fund, may be charged to the
9municipality reserve for the municipality or participating
10instrumentality.
11    (i) Contributions by participating instrumentalities shall
12be determined as provided herein except that the percentage
13derived under subparagraph 2 of paragraph (b) of this Section,
14and the amount payable under subparagraph 4 of paragraph (a)
15of this Section, shall be based on an amortization period of 10
16years.
17    (j) Notwithstanding the other provisions of this Section,
18the additional unfunded liability accruing as a result of
19Public Act 94-712 shall be amortized over a period of 30 years
20beginning on January 1 of the second calendar year following
21the calendar year in which Public Act 94-712 takes effect,
22except that the employer may provide for a longer amortization
23period by adopting a resolution or ordinance specifying a
2435-year or 40-year period and submitting a certified copy of
25the ordinance or resolution to the fund no later than June 1 of
26the calendar year following the calendar year in which Public

 

 

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1Act 94-712 takes effect.
2    (k) If the amount of a participating employee's reported
3earnings for any of the 12-month periods used to determine the
4final rate of earnings exceeds the employee's 12-month
5reported earnings with the same employer for the previous year
6by the greater of 6% or 1.5 times the annual increase in the
7Consumer Price Index-U, as established by the United States
8Department of Labor for the preceding September, the
9participating municipality or participating instrumentality
10that paid those earnings shall pay to the Fund, in addition to
11any other contributions required under this Article, the
12present value of the increase in the pension resulting from
13the portion of the increase in reported earnings that is in
14excess of the greater of 6% or 1.5 times the annual increase in
15the Consumer Price Index-U, as determined by the Fund. This
16present value shall be computed on the basis of the actuarial
17assumptions and tables used in the most recent actuarial
18valuation of the Fund that is available at the time of the
19computation.
20    Whenever it determines that a payment is or may be
21required under this subsection (k), the fund shall calculate
22the amount of the payment and bill the participating
23municipality or participating instrumentality for that amount.
24The bill shall specify the calculations used to determine the
25amount due. If the participating municipality or participating
26instrumentality disputes the amount of the bill, it may,

 

 

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1within 30 days after receipt of the bill, apply to the fund in
2writing for a recalculation. The application must specify in
3detail the grounds of the dispute. Upon receiving a timely
4application for recalculation, the fund shall review the
5application and, if appropriate, recalculate the amount due.
6The participating municipality and participating
7instrumentality contributions required under this subsection
8(k) may be paid in the form of a lump sum within 90 days after
9receipt of the bill. If the participating municipality and
10participating instrumentality contributions are not paid
11within 90 days after receipt of the bill, then interest will be
12charged at a rate equal to the fund's annual actuarially
13assumed rate of return on investment compounded annually from
14the 91st day after receipt of the bill. Payments must be
15concluded within 3 years after receipt of the bill by the
16participating municipality or participating instrumentality.
17    When assessing payment for any amount due under this
18subsection (k), the fund shall exclude earnings increases
19resulting from overload or overtime earnings.
20    When assessing payment for any amount due under this
21subsection (k), the fund shall exclude earnings increases
22resulting from payments for unused vacation time, but only for
23payments for unused vacation time made in the final 3 months of
24the final rate of earnings period.
25    When assessing payment for any amount due under this
26subsection (k), the fund shall also exclude earnings increases

 

 

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1attributable to standard employment promotions resulting in
2increased responsibility and workload.
3    When assessing payment for any amount due under this
4subsection (k), the fund shall exclude reportable earnings
5increases resulting from periods where the member was paid
6through workers' compensation.
7    This subsection (k) does not apply to earnings increases
8paid to individuals under contracts or collective bargaining
9agreements entered into, amended, or renewed before January 1,
102012 (the effective date of Public Act 97-609), earnings
11increases paid to members who are 10 years or more from
12retirement eligibility, or earnings increases resulting from
13an increase in the number of hours required to be worked.
14    When assessing payment for any amount due under this
15subsection (k), the fund shall also exclude earnings
16attributable to personnel policies adopted before January 1,
172012 (the effective date of Public Act 97-609) as long as those
18policies are not applicable to employees who begin service on
19or after January 1, 2012 (the effective date of Public Act
2097-609).
21    The change made to this Section by Public Act 100-139 is a
22clarification of existing law and is intended to be
23retroactive to January 1, 2012 (the effective date of Public
24Act 97-609).
25(Source: P.A. 99-745, eff. 8-5-16; 100-139, eff. 8-18-17;
26100-411, eff. 8-25-17; 100-863, eff. 8-14-18.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.