94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB0217

 

Introduced 2/2/2005, by Sen. John M. Sullivan

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/7-139   from Ch. 108 1/2, par. 7-139
30 ILCS 805/8.29 new

    Amends the IMRF Article of the Illinois Pension Code. Allows certain former employees who have not yet begun to receive a retirement annuity to purchase service credit for certain military service. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


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

 

 

A BILL FOR

 

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1     AN ACT concerning public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Pension Code is amended by changing
5 Section 7-139 as follows:
 
6     (40 ILCS 5/7-139)  (from Ch. 108 1/2, par. 7-139)
7     Sec. 7-139. Credits and creditable service to employees.
8     (a) Each participating employee shall be granted credits
9 and creditable service, for purposes of determining the amount
10 of any annuity or benefit to which he or a beneficiary is
11 entitled, as follows:
12         1. For prior service: Each participating employee who
13     is an employee of a participating municipality or
14     participating instrumentality on the effective date shall
15     be granted creditable service, but no credits under
16     paragraph 2 of this subsection (a), for periods of prior
17     service for which credit has not been received under any
18     other pension fund or retirement system established under
19     this Code, as follows:
20         If the effective date of participation for the
21     participating municipality or participating
22     instrumentality is on or before January 1, 1998, creditable
23     service shall be granted for the entire period of prior
24     service with that employer without any employee
25     contribution.
26         If the effective date of participation for the
27     participating municipality or participating
28     instrumentality is after January 1, 1998, creditable
29     service shall be granted for the last 20% of the period of
30     prior service with that employer, but no more than 5 years,
31     without any employee contribution. A participating
32     employee may establish creditable service for the

 

 

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

 

 

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1         2. For current service, each participating employee
2     shall be credited with:
3             a. Additional credits of amounts equal to each
4         payment of additional contributions received from him
5         under Section 7-173, as of the date the corresponding
6         payment of earnings is payable to him.
7             b. Normal credits of amounts equal to each payment
8         of normal contributions received from him, as of the
9         date the corresponding payment of earnings is payable
10         to him, and normal contributions made for the purpose
11         of establishing out-of-state service credits as
12         permitted under the conditions set forth in paragraph 6
13         of this subsection (a).
14             c. Municipality credits in an amount equal to 1.4
15         times the normal credits, except those established by
16         out-of-state service credits, as of the date of
17         computation of any benefit if these credits would
18         increase the benefit.
19             d. Survivor credits equal to each payment of
20         survivor contributions received from the participating
21         employee as of the date the corresponding payment of
22         earnings is payable, and survivor contributions made
23         for the purpose of establishing out-of-state service
24         credits.
25         3. For periods of temporary and total and permanent
26     disability benefits, each employee receiving disability
27     benefits shall be granted creditable service for the period
28     during which disability benefits are payable. Normal and
29     survivor credits, based upon the rate of earnings applied
30     for disability benefits, shall also be granted if such
31     credits would result in a higher benefit to any such
32     employee or his beneficiary.
33         4. For authorized leave of absence without pay: A
34     participating employee shall be granted credits and
35     creditable service for periods of authorized leave of
36     absence without pay under the following conditions:

 

 

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1             a. An application for credits and creditable
2         service is submitted to the board while the employee is
3         in a status of active employment, and within 2 years
4         after termination of the leave of absence period for
5         which credits and creditable service are sought.
6             b. Not more than 12 complete months of creditable
7         service for authorized leave of absence without pay
8         shall be counted for purposes of determining any
9         benefits payable under this Article.
10             c. Credits and creditable service shall be granted
11         for leave of absence only if such leave is approved by
12         the governing body of the municipality, including
13         approval of the estimated cost thereof to the
14         municipality as determined by the fund, and employee
15         contributions, plus interest at the effective rate
16         applicable for each year from the end of the period of
17         leave to date of payment, have been paid to the fund in
18         accordance with Section 7-173. The contributions shall
19         be computed upon the assumption earnings continued
20         during the period of leave at the rate in effect when
21         the leave began.
22             d. Benefits under the provisions of Sections
23         7-141, 7-146, 7-150 and 7-163 shall become payable to
24         employees on authorized leave of absence, or their
25         designated beneficiary, only if such leave of absence
26         is creditable hereunder, and if the employee has at
27         least one year of creditable service other than the
28         service granted for leave of absence. Any employee
29         contributions due may be deducted from any benefits
30         payable.
31             e. No credits or creditable service shall be
32         allowed for leave of absence without pay during any
33         period of prior service.
34         5. For military service: The governing body of a
35     municipality or participating instrumentality may elect to
36     allow creditable service to participating employees who

 

 

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1     leave their employment to serve in the armed forces of the
2     United States for all periods of such service, provided
3     that the person returns to active employment within 90 days
4     after completion of full time active duty, but no
5     creditable service shall be allowed such person for any
6     period that can be used in the computation of a pension or
7     any other pay or benefit, other than pay for active duty,
8     for service in any branch of the armed forces of the United
9     States. If necessary to the computation of any benefit, the
10     board shall establish municipality credits for
11     participating employees under this paragraph on the
12     assumption that the employee received earnings at the rate
13     received at the time he left the employment to enter the
14     armed forces. A participating employee in the armed forces
15     shall not be considered an employee during such period of
16     service and no additional death and no disability benefits
17     are payable for death or disability during such period.
18         Any participating employee who left his employment
19     with a municipality or participating instrumentality to
20     serve in the armed forces of the United States and who
21     again became a participating employee within 90 days after
22     completion of full time active duty by entering the service
23     of a different municipality or participating
24     instrumentality, which has elected to allow creditable
25     service for periods of military service under the preceding
26     paragraph, shall also be allowed creditable service for his
27     period of military service on the same terms that would
28     apply if he had been employed, before entering military
29     service, by the municipality or instrumentality which
30     employed him after he left the military service and the
31     employer costs arising in relation to such grant of
32     creditable service shall be charged to and paid by that
33     municipality or instrumentality.
34         Notwithstanding the foregoing, any participating
35     employee shall be entitled to creditable service as
36     required by any federal law relating to re-employment

 

 

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1     rights of persons who served in the United States Armed
2     Services. Such creditable service shall be granted upon
3     payment by the member of an amount equal to the employee
4     contributions which would have been required had the
5     employee continued in service at the same rate of earnings
6     during the military leave period, plus interest at the
7     effective rate.
8         5.1. In addition to any creditable service established
9     under paragraph 5 of this subsection (a), creditable
10     service may be granted for up to 24 months of service in
11     the armed forces of the United States.
12         In order to receive creditable service for military
13     service under this paragraph 5.1, a participating employee
14     must (1) apply to the Fund in writing and provide evidence
15     of the military service that is satisfactory to the Board;
16     (2) obtain the written approval of the current employer;
17     and (3) make contributions to the Fund equal to (i) the
18     employee contributions that would have been required had
19     the service been rendered as a member, plus (ii) an amount
20     determined by the board to be equal to the employer's
21     normal cost of the benefits accrued for that military
22     service, plus (iii) interest on items (i) and (ii) from the
23     date of first membership in the Fund to the date of
24     payment. If payment is made during the 6-month period that
25     begins 3 months after the effective date of this amendatory
26     Act of 1997, the required interest shall be at the rate of
27     2.5% per year, compounded annually; otherwise, the
28     required interest shall be calculated at the regular
29     interest rate.
30         5.2. In lieu of establishing any creditable service
31     under paragraph 5.1, a person who (A) has creditable
32     service in this Fund but is no longer actively employed
33     under this Fund and has not yet begun to receive a
34     retirement annuity under this Article and (B) is an active
35     participant in the Article 16 retirement system may
36     establish creditable service in this Fund for up to 24

 

 

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1     months of service in the armed forces of the United States,
2     subject to the following requirements:
3             a. The person must apply to the Fund in writing
4         within 60 days after the effective date of this
5         amendatory Act of the 94th General Assembly and provide
6         evidence of eligibility and military service that is
7         satisfactory to the Board.
8             b. The person must contribute to the Fund before
9         retirement an amount to be determined by the Board,
10         equal to (i) the employee contributions that would have
11         been required had the service been rendered as a
12         participating employee, plus (ii) an amount determined
13         by the Board to be equal to the employer's normal cost
14         of the benefits accrued for that military service, plus
15         (iii) regular interest on items (i) and (ii) from the
16         date of first membership in the Fund to the date of
17         payment.
18             c. The person must not have established creditable
19         service under this or any other Article of this Code
20         for that same period of military service (but may have
21         established creditable service for other periods of
22         military service under other provisions of this Code).
23         6. For out-of-state service: Creditable service shall
24     be granted for service rendered to an out-of-state local
25     governmental body under the following conditions: The
26     employee had participated and has irrevocably forfeited
27     all rights to benefits in the out-of-state public employees
28     pension system; the governing body of his participating
29     municipality or instrumentality authorizes the employee to
30     establish such service; the employee has 2 years current
31     service with this municipality or participating
32     instrumentality; the employee makes a payment of
33     contributions, which shall be computed at 8% (normal) plus
34     2% (survivor) times length of service purchased times the
35     average rate of earnings for the first 2 years of service
36     with the municipality or participating instrumentality

 

 

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1     whose governing body authorizes the service established
2     plus interest at the effective rate on the date such
3     credits are established, payable from the date the employee
4     completes the required 2 years of current service to date
5     of payment. In no case shall more than 120 months of
6     creditable service be granted under this provision.
7         7. For retroactive service: Any employee who could have
8     but did not elect to become a participating employee, or
9     who should have been a participant in the Municipal Public
10     Utilities Annuity and Benefit Fund before that fund was
11     superseded, may receive creditable service for the period
12     of service not to exceed 50 months; however, a current or
13     former elected or appointed official of a participating
14     municipality may establish credit under this paragraph 7
15     for more than 50 months of service as an official of that
16     municipality, if the excess over 50 months is approved by
17     resolution of the governing body of the affected
18     municipality filed with the Fund before January 1, 2002.
19         Any employee who is a participating employee on or
20     after September 24, 1981 and who was excluded from
21     participation by the age restrictions removed by Public Act
22     82-596 may receive creditable service for the period, on or
23     after January 1, 1979, excluded by the age restriction and,
24     in addition, if the governing body of the participating
25     municipality or participating instrumentality elects to
26     allow creditable service for all employees excluded by the
27     age restriction prior to January 1, 1979, for service
28     during the period prior to that date excluded by the age
29     restriction. Any employee who was excluded from
30     participation by the age restriction removed by Public Act
31     82-596 and who is not a participating employee on or after
32     September 24, 1981 may receive creditable service for
33     service after January 1, 1979. Creditable service under
34     this paragraph shall be granted upon payment of the
35     employee contributions which would have been required had
36     he participated, with interest at the effective rate for

 

 

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1     each year from the end of the period of service established
2     to date of payment.
3         8. For accumulated unused sick leave: A participating
4     employee who is applying for a retirement annuity shall be
5     entitled to creditable service for that portion of the
6     employee's accumulated unused sick leave for which payment
7     is not received, as follows:
8             a. Sick leave days shall be limited to those
9         accumulated under a sick leave plan established by a
10         participating municipality or participating
11         instrumentality which is available to all employees or
12         a class of employees.
13             b. Only sick leave days accumulated with a
14         participating municipality or participating
15         instrumentality with which the employee was in service
16         within 60 days of the effective date of his retirement
17         annuity shall be credited; If the employee was in
18         service with more than one employer during this period
19         only the sick leave days with the employer with which
20         the employee has the greatest number of unpaid sick
21         leave days shall be considered.
22             c. The creditable service granted shall be
23         considered solely for the purpose of computing the
24         amount of the retirement annuity and shall not be used
25         to establish any minimum service period required by any
26         provision of the Illinois Pension Code, the effective
27         date of the retirement annuity, or the final rate of
28         earnings.
29             d. The creditable service shall be at the rate of
30         1/20 of a month for each full sick day, provided that
31         no more than 12 months may be credited under this
32         subdivision 8.
33             e. Employee contributions shall not be required
34         for creditable service under this subdivision 8.
35             f. Each participating municipality and
36         participating instrumentality with which an employee

 

 

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1         has service within 60 days of the effective date of his
2         retirement annuity shall certify to the board the
3         number of accumulated unpaid sick leave days credited
4         to the employee at the time of termination of service.
5         9. For service transferred from another system:
6     Credits and creditable service shall be granted for service
7     under Article 3, 4, 5, 14 or 16 of this Act, to any active
8     member of this Fund, and to any inactive member who has
9     been a county sheriff, upon transfer of such credits
10     pursuant to Section 3-110.3, 4-108.3, 5-235, 14-105.6 or
11     16-131.4, and payment by the member of the amount by which
12     (1) the employer and employee contributions that would have
13     been required if he had participated in this Fund as a
14     sheriff's law enforcement employee during the period for
15     which credit is being transferred, plus interest thereon at
16     the effective rate for each year, compounded annually, from
17     the date of termination of the service for which credit is
18     being transferred to the date of payment, exceeds (2) the
19     amount actually transferred to the Fund. Such transferred
20     service shall be deemed to be service as a sheriff's law
21     enforcement employee for the purposes of Section 7-142.1.
22     (b) Creditable service - amount:
23         1. One month of creditable service shall be allowed for
24     each month for which a participating employee made
25     contributions as required under Section 7-173, or for which
26     creditable service is otherwise granted hereunder. Not
27     more than 1 month of service shall be credited and counted
28     for 1 calendar month, and not more than 1 year of service
29     shall be credited and counted for any calendar year. A
30     calendar month means a nominal month beginning on the first
31     day thereof, and a calendar year means a year beginning
32     January 1 and ending December 31.
33         2. A seasonal employee shall be given 12 months of
34     creditable service if he renders the number of months of
35     service normally required by the position in a 12-month
36     period and he remains in service for the entire 12-month

 

 

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1     period. Otherwise a fractional year of service in the
2     number of months of service rendered shall be credited.
3         3. An intermittent employee shall be given creditable
4     service for only those months in which a contribution is
5     made under Section 7-173.
6     (c) No application for correction of credits or creditable
7 service shall be considered unless the board receives an
8 application for correction while (1) the applicant is a
9 participating employee and in active employment with a
10 participating municipality or instrumentality, or (2) while
11 the applicant is actively participating in a pension fund or
12 retirement system which is a participating system under the
13 Retirement Systems Reciprocal Act. A participating employee or
14 other applicant shall not be entitled to credits or creditable
15 service unless the required employee contributions are made in
16 a lump sum or in installments made in accordance with board
17 rule.
18     (d) Upon the granting of a retirement, surviving spouse or
19 child annuity, a death benefit or a separation benefit, on
20 account of any employee, all individual accumulated credits
21 shall thereupon terminate. Upon the withdrawal of additional
22 contributions, the credits applicable thereto shall thereupon
23 terminate. Terminated credits shall not be applied to increase
24 the benefits any remaining employee would otherwise receive
25 under this Article.
26 (Source: P.A. 92-424, eff. 8-17-01; 93-933, eff. 8-13-04.)
 
27     Section 90. The State Mandates Act is amended by adding
28 Section 8.29 as follows:
 
29     (30 ILCS 805/8.29 new)
30     Sec. 8.29. Exempt mandate. Notwithstanding Sections 6 and 8
31 of this Act, no reimbursement by the State is required for the
32 implementation of any mandate created by this amendatory Act of
33 the 94th General Assembly.
 

 

 

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