102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3877

 

Introduced 1/21/2022, by Sen. Rachelle Crowe

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/3-110.13 new
40 ILCS 5/7-139  from Ch. 108 1/2, par. 7-139
40 ILCS 5/7-139.1a new
30 ILCS 805/8.46 new

    Amends the Downstate Police and Illinois Municipal Retirement Fund (IMRF) Articles of the Illinois Pension Code. Provides that a participant who is actively employed as a sheriff's law enforcement employee may make an election to transfer up to 10 years of creditable service from a fund established under the Downstate Police Article to IMRF. Provides that upon receiving a written election under the provisions, the fund shall transfer the employee and employer contributions to IMRF as soon as is practicable. Provides that the service shall accrue to the employee with the benefits of service credit that was otherwise earned as service credit under the sheriff's law enforcement employee provisions. Provides that in order to transfer the service credit, the employee must: make a written election for a refund of the employee and employer contributions for the corresponding service credit under the Downstate Police Article; make a written election to the Fund to purchase an amount of service credit that is not greater than the term of service credited; and make payment of the amount determined by the Fund to represent the actual costs of the benefits as established by the Fund minus the amounts received from the fund established under the Downstate Police Article. Makes conforming changes. Amends the State Mandates Act to require implementation without reimbursement by the State.


LRB102 24360 RPS 33594 b

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
MAY APPLY

 

 

A BILL FOR

 

SB3877LRB102 24360 RPS 33594 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 adding
5Sections 3-110.13 and 7-139.1a and by changing Section 7-139
6as follows:
 
7    (40 ILCS 5/3-110.13 new)
8    Sec. 3-110.13. Transfer to Article 7. A participant who is
9actively employed as a sheriff's law enforcement employee may
10make an election to transfer up to 10 years of creditable
11service from a fund established under this Article to the
12Illinois Municipal Retirement Fund established under Article
137. Upon receiving a written election by a participant under
14this Section, the fund shall transfer the employee and
15employer contributions to the Illinois Municipal Retirement
16Fund as soon as is practicable. Participation in the police
17pension fund with respect to the service to be transferred
18shall terminate on the date of transfer.
 
19    (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
20    Sec. 7-139. Credits and creditable service to employees.
21    (a) Each participating employee shall be granted credits
22and creditable service, for purposes of determining the amount

 

 

SB3877- 2 -LRB102 24360 RPS 33594 b

1of any annuity or benefit to which he or a beneficiary is
2entitled, as follows:
3        1. For prior service: Each participating employee who
4    is an employee of a participating municipality or
5    participating instrumentality on the effective date shall
6    be granted creditable service, but no credits under
7    paragraph 2 of this subsection (a), for periods of prior
8    service for which credit has not been received under any
9    other pension fund or retirement system established under
10    this Code, as follows:
11        If the effective date of participation for the
12    participating municipality or participating
13    instrumentality is on or before January 1, 1998,
14    creditable service shall be granted for the entire period
15    of prior service with that employer without any employee
16    contribution.
17        If the effective date of participation for the
18    participating municipality or participating
19    instrumentality is after January 1, 1998, creditable
20    service shall be granted for the last 20% of the period of
21    prior service with that employer, but no more than 5
22    years, without any employee contribution. A participating
23    employee may establish creditable service for the
24    remainder of the period of prior service with that
25    employer by making an application in writing, accompanied
26    by payment of an employee contribution in an amount

 

 

SB3877- 3 -LRB102 24360 RPS 33594 b

1    determined by the Fund, based on the employee contribution
2    rates in effect at the time of application for the
3    creditable service and the employee's salary rate on the
4    effective date of participation for that employer, plus
5    interest at the effective rate from the date of the prior
6    service to the date of payment. Application for this
7    creditable service may be made at any time while the
8    employee is still in service.
9        A municipality that (i) has at least 35 employees;
10    (ii) is located in a county with at least 2,000,000
11    inhabitants; and (iii) maintains an independent defined
12    benefit pension plan for the benefit of its eligible
13    employees may restrict creditable service in whole or in
14    part for periods of prior service with the employer if the
15    governing body of the municipality adopts an irrevocable
16    resolution to restrict that creditable service and files
17    the resolution with the board before the municipality's
18    effective date of participation.
19        Any person who has withdrawn from the service of a
20    participating municipality or participating
21    instrumentality prior to the effective date, who reenters
22    the service of the same municipality or participating
23    instrumentality after the effective date and becomes a
24    participating employee is entitled to creditable service
25    for prior service as otherwise provided in this
26    subdivision (a)(1) only if he or she renders 2 years of

 

 

SB3877- 4 -LRB102 24360 RPS 33594 b

1    service as a participating employee after the effective
2    date. Application for such service must be made while in a
3    participating status. The salary rate to be used in the
4    calculation of the required employee contribution, if any,
5    shall be the employee's salary rate at the time of first
6    reentering service with the employer after the employer's
7    effective date of participation.
8        2. For current service, each participating employee
9    shall be credited with:
10            a. Additional credits of amounts equal to each
11        payment of additional contributions received from him
12        under Section 7-173, as of the date the corresponding
13        payment of earnings is payable to him.
14            b. Normal credits of amounts equal to each payment
15        of normal contributions received from him, as of the
16        date the corresponding payment of earnings is payable
17        to him, and normal contributions made for the purpose
18        of establishing out-of-state service credits as
19        permitted under the conditions set forth in paragraph
20        6 of this subsection (a).
21            c. Municipality credits in an amount equal to 1.4
22        times the normal credits, except those established by
23        out-of-state service credits, as of the date of
24        computation of any benefit if these credits would
25        increase the benefit.
26            d. Survivor credits equal to each payment of

 

 

SB3877- 5 -LRB102 24360 RPS 33594 b

1        survivor contributions received from the participating
2        employee as of the date the corresponding payment of
3        earnings is payable, and survivor contributions made
4        for the purpose of establishing out-of-state service
5        credits.
6        3. For periods of temporary and total and permanent
7    disability benefits, each employee receiving disability
8    benefits shall be granted creditable service for the
9    period during which disability benefits are payable.
10    Normal and survivor credits, based upon the rate of
11    earnings applied for disability benefits, shall also be
12    granted if such credits would result in a higher benefit
13    to any such employee or his beneficiary.
14        4. For authorized leave of absence without pay: A
15    participating employee shall be granted credits and
16    creditable service for periods of authorized leave of
17    absence without pay under the following conditions:
18            a. An application for credits and creditable
19        service is submitted to the board while the employee
20        is in a status of active employment.
21            b. Not more than 12 complete months of creditable
22        service for authorized leave of absence without pay
23        shall be counted for purposes of determining any
24        benefits payable under this Article.
25            c. Credits and creditable service shall be granted
26        for leave of absence only if such leave is approved by

 

 

SB3877- 6 -LRB102 24360 RPS 33594 b

1        the governing body of the municipality, including
2        approval of the estimated cost thereof to the
3        municipality as determined by the fund, and employee
4        contributions, plus interest at the effective rate
5        applicable for each year from the end of the period of
6        leave to date of payment, have been paid to the fund in
7        accordance with Section 7-173. The contributions shall
8        be computed upon the assumption earnings continued
9        during the period of leave at the rate in effect when
10        the leave began.
11            d. Benefits under the provisions of Sections
12        7-141, 7-146, 7-150 and 7-163 shall become payable to
13        employees on authorized leave of absence, or their
14        designated beneficiary, only if such leave of absence
15        is creditable hereunder, and if the employee has at
16        least one year of creditable service other than the
17        service granted for leave of absence. Any employee
18        contributions due may be deducted from any benefits
19        payable.
20            e. No credits or creditable service shall be
21        allowed for leave of absence without pay during any
22        period of prior service.
23        5. For military service: The governing body of a
24    municipality or participating instrumentality may elect to
25    allow creditable service to participating employees who
26    leave their employment to serve in the armed forces of the

 

 

SB3877- 7 -LRB102 24360 RPS 33594 b

1    United States for all periods of such service, provided
2    that the person returns to active employment within 90
3    days after completion of full time active duty, but no
4    creditable service shall be allowed such person for any
5    period that can be used in the computation of a pension or
6    any other pay or benefit, other than pay for active duty,
7    for service in any branch of the armed forces of the United
8    States. If necessary to the computation of any benefit,
9    the board shall establish municipality credits for
10    participating employees under this paragraph on the
11    assumption that the employee received earnings at the rate
12    received at the time he left the employment to enter the
13    armed forces. A participating employee in the armed forces
14    shall not be considered an employee during such period of
15    service and no additional death and no disability benefits
16    are payable for death or disability during such period.
17        Any participating employee who left his employment
18    with a municipality or participating instrumentality to
19    serve in the armed forces of the United States and who
20    again became a participating employee within 90 days after
21    completion of full time active duty by entering the
22    service of a different municipality or participating
23    instrumentality, which has elected to allow creditable
24    service for periods of military service under the
25    preceding paragraph, shall also be allowed creditable
26    service for his period of military service on the same

 

 

SB3877- 8 -LRB102 24360 RPS 33594 b

1    terms that would apply if he had been employed, before
2    entering military service, by the municipality or
3    instrumentality which employed him after he left the
4    military service and the employer costs arising in
5    relation to such grant of creditable service shall be
6    charged to and paid by that municipality or
7    instrumentality.
8        Notwithstanding the foregoing, any participating
9    employee shall be entitled to creditable service as
10    required by any federal law relating to re-employment
11    rights of persons who served in the United States Armed
12    Services. Such creditable service shall be granted upon
13    payment by the member of an amount equal to the employee
14    contributions which would have been required had the
15    employee continued in service at the same rate of earnings
16    during the military leave period, plus interest at the
17    effective rate.
18        5.1. In addition to any creditable service established
19    under paragraph 5 of this subsection (a), creditable
20    service may be granted for up to 48 months of service in
21    the armed forces of the United States.
22        In order to receive creditable service for military
23    service under this paragraph 5.1, a participating employee
24    must (1) apply to the Fund in writing and provide evidence
25    of the military service that is satisfactory to the Board;
26    (2) obtain the written approval of the current employer;

 

 

SB3877- 9 -LRB102 24360 RPS 33594 b

1    and (3) make contributions to the Fund equal to (i) the
2    employee contributions that would have been required had
3    the service been rendered as a member, plus (ii) an amount
4    determined by the board to be equal to the employer's
5    normal cost of the benefits accrued for that military
6    service, plus (iii) interest on items (i) and (ii) from
7    the date of first membership in the Fund to the date of
8    payment. The required interest shall be calculated at the
9    regular interest rate.
10        The changes made to this paragraph 5.1 by Public Acts
11    95-483 and 95-486 apply only to participating employees in
12    service on or after August 28, 2007 (the effective date of
13    those Public Acts).
14        6. For out-of-state service: Creditable service shall
15    be granted for service rendered to an out-of-state local
16    governmental body under the following conditions: The
17    employee had participated and has irrevocably forfeited
18    all rights to benefits in the out-of-state public
19    employees pension system; the governing body of his
20    participating municipality or instrumentality authorizes
21    the employee to establish such service; the employee has 2
22    years current service with this municipality or
23    participating instrumentality; the employee makes a
24    payment of contributions, which shall be computed at 8%
25    (normal) plus 2% (survivor) times length of service
26    purchased times the average rate of earnings for the first

 

 

SB3877- 10 -LRB102 24360 RPS 33594 b

1    2 years of service with the municipality or participating
2    instrumentality whose governing body authorizes the
3    service established plus interest at the effective rate on
4    the date such credits are established, payable from the
5    date the employee completes the required 2 years of
6    current service to date of payment. In no case shall more
7    than 120 months of creditable service be granted under
8    this provision.
9        7. For retroactive service: Any employee who could
10    have but did not elect to become a participating employee,
11    or who should have been a participant in the Municipal
12    Public Utilities Annuity and Benefit Fund before that fund
13    was superseded, may receive creditable service for the
14    period of service not to exceed 50 months; however, a
15    current or former elected or appointed official of a
16    participating municipality may establish credit under this
17    paragraph 7 for more than 50 months of service as an
18    official of that municipality, if the excess over 50
19    months is approved by resolution of the governing body of
20    the affected municipality filed with the Fund before
21    January 1, 2002.
22        Any employee who is a participating employee on or
23    after September 24, 1981 and who was excluded from
24    participation by the age restrictions removed by Public
25    Act 82-596 may receive creditable service for the period,
26    on or after January 1, 1979, excluded by the age

 

 

SB3877- 11 -LRB102 24360 RPS 33594 b

1    restriction and, in addition, if the governing body of the
2    participating municipality or participating
3    instrumentality elects to allow creditable service for all
4    employees excluded by the age restriction prior to January
5    1, 1979, for service during the period prior to that date
6    excluded by the age restriction. Any employee who was
7    excluded from participation by the age restriction removed
8    by Public Act 82-596 and who is not a participating
9    employee on or after September 24, 1981 may receive
10    creditable service for service after January 1, 1979.
11    Creditable service under this paragraph shall be granted
12    upon payment of the employee contributions which would
13    have been required had he participated, with interest at
14    the effective rate for each year from the end of the period
15    of service established to date of payment.
16        8. For accumulated unused sick leave: A participating
17    employee who is applying for a retirement annuity shall be
18    entitled to creditable service for that portion of the
19    employee's accumulated unused sick leave for which payment
20    is not received, as follows:
21            a. Sick leave days shall be limited to those
22        accumulated under a sick leave plan established by a
23        participating municipality or participating
24        instrumentality which is available to all employees or
25        a class of employees.
26            b. Except as provided in item b-1, only sick leave

 

 

SB3877- 12 -LRB102 24360 RPS 33594 b

1        days accumulated with a participating municipality or
2        participating instrumentality with which the employee
3        was in service within 60 days of the effective date of
4        his retirement annuity shall be credited; If the
5        employee was in service with more than one employer
6        during this period only the sick leave days with the
7        employer with which the employee has the greatest
8        number of unpaid sick leave days shall be considered.
9            b-1. If the employee was in the service of more
10        than one employer as defined in item (2) of paragraph
11        (a) of subsection (A) of Section 7-132, then the sick
12        leave days from all such employers shall be credited,
13        as long as the creditable service attributed to those
14        sick leave days does not exceed the limitation in item
15        d of this paragraph 8. If the employee was in the
16        service of more than one employer described in
17        paragraph (c) of subsection (B) of Section 7-132 on or
18        after the effective date of this amendatory Act of the
19        101st General Assembly, then the sick leave days from
20        all such employers, except for employers from which
21        the employee terminated service before the effective
22        date of this amendatory Act of the 101st General
23        Assembly, shall be credited, as long as the creditable
24        service attributed to those sick leave days does not
25        exceed the limitation in item d of this paragraph 8. In
26        calculating the creditable service under this item

 

 

SB3877- 13 -LRB102 24360 RPS 33594 b

1        b-1, the sick leave days from the last employer shall
2        be considered first, then the remaining sick leave
3        days shall be considered until there are no more days
4        or the maximum creditable sick leave threshold under
5        item d of this paragraph 8 has been reached.
6            c. The creditable service granted shall be
7        considered solely for the purpose of computing the
8        amount of the retirement annuity and shall not be used
9        to establish any minimum service period required by
10        any provision of the Illinois Pension Code, the
11        effective date of the retirement annuity, or the final
12        rate of earnings.
13            d. The creditable service shall be at the rate of
14        1/20 of a month for each full sick day, provided that
15        no more than 12 months may be credited under this
16        subdivision 8.
17            e. Employee contributions shall not be required
18        for creditable service under this subdivision 8.
19            f. Each participating municipality and
20        participating instrumentality with which an employee
21        has service within 60 days of the effective date of his
22        retirement annuity shall certify to the board the
23        number of accumulated unpaid sick leave days credited
24        to the employee at the time of termination of service.
25        9. For service transferred from another system:
26    Credits and creditable service shall be granted for

 

 

SB3877- 14 -LRB102 24360 RPS 33594 b

1    service under Article 4, 5, 8, 14, or 16 of this Act, to
2    any active member of this Fund, and to any inactive member
3    who has been a county sheriff, upon transfer of such
4    credits pursuant to Section 4-108.3, 5-235, 8-226.7,
5    14-105.6, or 16-131.4, and payment by the member of the
6    amount by which (1) the employer and employee
7    contributions that would have been required if he had
8    participated in this Fund as a sheriff's law enforcement
9    employee during the period for which credit is being
10    transferred, plus interest thereon at the effective rate
11    for each year, compounded annually, from the date of
12    termination of the service for which credit is being
13    transferred to the date of payment, exceeds (2) the amount
14    actually transferred to the Fund. Such transferred service
15    shall be deemed to be service as a sheriff's law
16    enforcement employee for the purposes of Section 7-142.1.
17        10. (Blank).
18        11. For service transferred from an Article 3 system
19    under Section 3-110.3: Credits and creditable service
20    shall be granted for service under Article 3 of this Act as
21    provided in Section 3-110.3, to any active member of this
22    Fund, upon transfer of such credits pursuant to Section
23    3-110.3. If the board determines that the amount
24    transferred is less than the true cost to the Fund of
25    allowing that creditable service to be established, then
26    in order to establish that creditable service, the member

 

 

SB3877- 15 -LRB102 24360 RPS 33594 b

1    must pay to the Fund an additional contribution equal to
2    the difference, as determined by the board in accordance
3    with the rules and procedures adopted under this
4    paragraph. If the member does not make the full additional
5    payment as required by this paragraph prior to termination
6    of his participation with that employer, then his or her
7    creditable service shall be reduced by an amount equal to
8    the difference between the amount transferred under
9    Section 3-110.3, including any payments made by the member
10    under this paragraph prior to termination, and the true
11    cost to the Fund of allowing that creditable service to be
12    established, as determined by the board in accordance with
13    the rules and procedures adopted under this paragraph.
14        The board shall establish by rule the manner of making
15    the calculation required under this paragraph 11, taking
16    into account the appropriate actuarial assumptions; the
17    member's service, age, and salary history, and any other
18    factors that the board determines to be relevant.
19        12. For omitted service: Any employee who was employed
20    by a participating employer in a position that required
21    participation, but who was not enrolled in the Fund, may
22    establish such credits under the following conditions:
23            a. Application for such credits is received by the
24        Board while the employee is an active participant of
25        the Fund or a reciprocal retirement system.
26            b. Eligibility for participation and earnings are

 

 

SB3877- 16 -LRB102 24360 RPS 33594 b

1        verified by the Authorized Agent of the participating
2        employer for which the service was rendered.
3        Creditable service under this paragraph shall be
4    granted upon payment of the employee contributions that
5    would have been required had he participated, which shall
6    be calculated by the Fund using the member contribution
7    rate in effect during the period that the service was
8    rendered.
9        13. For service transferred under Section 7-139.1a.
10    (b) Creditable service - amount:
11        1. One month of creditable service shall be allowed
12    for each month for which a participating employee made
13    contributions as required under Section 7-173, or for
14    which creditable service is otherwise granted hereunder.
15    Not more than 1 month of service shall be credited and
16    counted for 1 calendar month, and not more than 1 year of
17    service shall be credited and counted for any calendar
18    year. A calendar month means a nominal month beginning on
19    the first day thereof, and a calendar year means a year
20    beginning January 1 and ending December 31.
21        2. A seasonal employee shall be given 12 months of
22    creditable service if he renders the number of months of
23    service normally required by the position in a 12-month
24    period and he remains in service for the entire 12-month
25    period. Otherwise a fractional year of service in the
26    number of months of service rendered shall be credited.

 

 

SB3877- 17 -LRB102 24360 RPS 33594 b

1        3. An intermittent employee shall be given creditable
2    service for only those months in which a contribution is
3    made under Section 7-173.
4    (c) No application for correction of credits or creditable
5service shall be considered unless the board receives an
6application for correction while (1) the applicant is a
7participating employee and in active employment with a
8participating municipality or instrumentality, or (2) while
9the applicant is actively participating in a pension fund or
10retirement system which is a participating system under the
11Retirement Systems Reciprocal Act. A participating employee or
12other applicant shall not be entitled to credits or creditable
13service unless the required employee contributions are made in
14a lump sum or in installments made in accordance with board
15rule. Payments made to establish service credit under
16paragraph 1, 4, 5, 5.1, 6, 7, or 12 of subsection (a) of this
17Section must be received by the Board while the applicant is an
18active participant in the Fund or a reciprocal retirement
19system, except that an applicant may make one payment after
20termination of active participation in the Fund or a
21reciprocal retirement system.
22    (d) Upon the granting of a retirement, surviving spouse or
23child annuity, a death benefit or a separation benefit, on
24account of any employee, all individual accumulated credits
25shall thereupon terminate. Upon the withdrawal of additional
26contributions, the credits applicable thereto shall thereupon

 

 

SB3877- 18 -LRB102 24360 RPS 33594 b

1terminate. Terminated credits shall not be applied to increase
2the benefits any remaining employee would otherwise receive
3under this Article.
4(Source: P.A. 100-148, eff. 8-18-17; 101-492, eff. 8-23-19.)
 
5    (40 ILCS 5/7-139.1a new)
6    Sec. 7-139.1a. Transfer from Article 3. A person who is a
7sheriff's law enforcement employee may elect to transfer up to
810 years of service credit to the Fund. The service shall
9accrue to the employee with the benefits of service credit
10that was otherwise earned as service credit under Section
117-142.1. In order to transfer the service credit, the employee
12must: (1) make a written election for a refund of the employee
13and employer contributions for the corresponding service
14credit under Article 3; (2) make a written election to the Fund
15to purchase an amount of service credit that is not greater
16than the term of service credited under item (1); and (3) make
17payment of the amount determined by the Fund to represent the
18actual costs of the benefits as established by the Fund minus
19the amounts received from the fund established under Article
203.
 
21    Section 90. The State Mandates Act is amended by adding
22Section 8.46 as follows:
 
23    (30 ILCS 805/8.46 new)

 

 

SB3877- 19 -LRB102 24360 RPS 33594 b

1    Sec. 8.46. Exempt mandate. Notwithstanding Sections 6 and
28 of this Act, no reimbursement by the State is required for
3the implementation of any mandate created by this amendatory
4Act of the 102nd General Assembly.