94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB0461

 

Introduced 2/16/2005, by Sen. Richard J. Winkel, Jr.

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-112   from Ch. 108 1/2, par. 15-112
40 ILCS 5/15-113.6   from Ch. 108 1/2, par. 15-113.6
40 ILCS 5/15-113.7   from Ch. 108 1/2, par. 15-113.7
40 ILCS 5/15-136   from Ch. 108 1/2, par. 15-136
40 ILCS 5/15-139   from Ch. 108 1/2, par. 15-139
40 ILCS 5/15-154   from Ch. 108 1/2, par. 15-154
40 ILCS 5/15-158.2
40 ILCS 5/15-187   from Ch. 108 1/2, par. 15-187
40 ILCS 5/15-190   from Ch. 108 1/2, par. 15-190
40 ILCS 5/15-191   from Ch. 108 1/2, par. 15-191

    Amends the State Universities Article of the Illinois Pension Code. Provides that, for an employee whose final rate of earnings period includes March 2005, the final rate of earnings means the average annual earnings during the 48 consecutive calendar month period ending with the last day of final termination of employment or the 4 consecutive academic years of service in which the employee's earnings were the highest, whichever is greater. In provisions concerning service for employment in public schools and service for other public employment, removes references to payment of 50% of the actuarial value of the increase in the retirement annuity provided by the service. In provisions concerning retirement annuities, provides that any retirement benefit accrued but unpaid on the death of an annuitant shall be paid to the annuitant's beneficiary. Makes changes concerning annuitants who return to employment for an employer. Provides that the 5 or more years of service after which a participant shall also be entitled to a distribution of employer contributions in a specified amount may include service for unused sick leave or reciprocal service from the participant's election to retire and apply the reciprocal provisions contained in the Code. Provides that certain military service shall be counted in determining when a self-managed plan becomes vested. Removes the requirement that, with respect to payment of benefits to persons under legal disability or minors, the receipt of payment be written for the purpose of the absolute discharge of the system's liability. Makes other changes. Effective immediately.


LRB094 10644 AMC 40998 b

PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0461 LRB094 10644 AMC 40998 b

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 Sections 15-112, 15-113.6, 15-113.7, 15-136, 15-139, 15-154,
6 15-158.2, 15-187, 15-190, and 15-191 as follows:
 
7     (40 ILCS 5/15-112)  (from Ch. 108 1/2, par. 15-112)
8     Sec. 15-112. Final rate of earnings. "Final rate of
9 earnings": For an employee who is paid on an hourly basis or
10 who receives an annual salary in installments during 12 months
11 of each academic year or whose final rate of earnings period
12 includes March 1, 2005, the average annual earnings during the
13 48 consecutive calendar month period ending with the last day
14 of final termination of employment or the 4 consecutive
15 academic years of service in which the employee's earnings were
16 the highest, whichever is greater. For any other employee, the
17 average annual earnings during the 4 consecutive academic years
18 of service in which his or her earnings were the highest. For
19 an employee with less than 48 months or 4 consecutive academic
20 years of service, the average earnings during his or her entire
21 period of service. The earnings of an employee with more than
22 36 months of service prior to the date of becoming a
23 participant are, for such period, considered equal to the
24 average earnings during the last 36 months of such service. For
25 an employee on leave of absence with pay, or on leave of
26 absence without pay who makes contributions during such leave,
27 earnings are assumed to be equal to the basic compensation on
28 the date the leave began. For an employee on disability leave,
29 earnings are assumed to be equal to the basic compensation on
30 the date disability occurs or the average earnings during the
31 24 months immediately preceding the month in which disability
32 occurs, whichever is greater.

 

 

SB0461 - 2 - LRB094 10644 AMC 40998 b

1     For a participant who retires on or after the effective
2 date of this amendatory Act of 1997 with at least 20 years of
3 service as a firefighter or police officer under this Article,
4 the final rate of earnings shall be the annual rate of earnings
5 received by the participant on his or her last day as a
6 firefighter or police officer under this Article, if that is
7 greater than the final rate of earnings as calculated under the
8 other provisions of this Section.
9     If a participant is an employee for at least 6 months
10 during the academic year in which his or her employment is
11 terminated, the annual final rate of earnings shall be 25% of
12 the sum of (1) the annual basic compensation for that year, and
13 (2) the amount earned during the 36 months immediately
14 preceding that year, if this is greater than the final rate of
15 earnings as calculated under the other provisions of this
16 Section.
17     In the determination of the final rate of earnings for an
18 employee, that part of an employee's earnings for any academic
19 year beginning after June 30, 1997, which exceeds the
20 employee's earnings with that employer for the preceding year
21 by more than 20 percent shall be excluded; in the event that an
22 employee has more than one employer this limitation shall be
23 calculated separately for the earnings with each employer. In
24 making such calculation, only the basic compensation of
25 employees shall be considered, without regard to vacation or
26 overtime or to contracts for summer employment.
27     The following are not considered as earnings in determining
28 final rate of earnings: (1) severance or separation pay, (2)
29 retirement pay, (3) payment for unused sick leave, and (4)
30 payments from an employer for the period used in determining
31 final rate of earnings for any purpose other than (i) services
32 rendered, (ii) leave of absence or vacation granted during that
33 period, and (iii) vacation of up to 56 work days allowed upon
34 termination of employment; except that, if the benefit has been
35 collectively bargained between the employer and the recognized
36 collective bargaining agent pursuant to the Illinois

 

 

SB0461 - 3 - LRB094 10644 AMC 40998 b

1 Educational Labor Relations Act, payment received during a
2 period of up to 2 academic years for unused sick leave may be
3 considered as earnings in accordance with the applicable
4 collective bargaining agreement, subject to the 20% increase
5 limitation of this Section. Any unused sick leave considered as
6 earnings under this Section shall not be taken into account in
7 calculating service credit under Section 15-113.4.
8     Intermittent periods of service shall be considered as
9 consecutive in determining final rate of earnings.
10 (Source: P.A. 92-599, eff. 6-28-02; 93-347, eff. 7-24-03.)
 
11     (40 ILCS 5/15-113.6)  (from Ch. 108 1/2, par. 15-113.6)
12     Sec. 15-113.6. Service for employment in public schools.
13 "Service for employment in public schools": Includes those
14 periods not exceeding the lesser of 10 years or 2/3 of the
15 service granted under other Sections of this Article dealing
16 with service credit, during which a person who entered the
17 system after September 1, 1974 was employed full time by a
18 public common school, public college and public university, or
19 by an agency or instrumentality of any of the foregoing, of any
20 state, territory, dependency or possession of the United States
21 of America, including the Philippine Islands, or a school
22 operated by or under the auspices of any agency or department
23 of any other state, if the person (1) cannot qualify for a
24 retirement pension or other benefit based upon employer
25 contributions from another retirement system, exclusive of
26 federal social security, based in whole or in part upon this
27 employment, and (2) pays the lesser of (A) an amount equal to
28 8% of his or her annual basic compensation on the date of
29 becoming a participating employee subsequent to this service
30 multiplied by the number of years of such service, together
31 with compound interest from the date participation begins to
32 the date payment is received by the board at the rate of 6% per
33 annum through August 31, 1982, and at the effective rates after
34 that date, and (B) 50% of the actuarial value of the increase
35 in the retirement annuity provided by this service, and (3)

 

 

SB0461 - 4 - LRB094 10644 AMC 40998 b

1 contributes for at least 5 years subsequent to this employment
2 to one or more of the following systems: the State Universities
3 Retirement System, the Teachers' Retirement System of the State
4 of Illinois, and the Public School Teachers' Pension and
5 Retirement Fund of Chicago.
6     The service granted under this Section shall not be
7 considered in determining whether the person has the minimum of
8 8 years of service required to qualify for a retirement annuity
9 at age 55 or the 5 years of service required to qualify for a
10 retirement annuity at age 62, as provided in Section 15-135.
11 The maximum allowable service of 10 years for this governmental
12 employment shall be reduced by the service credit which is
13 validated under paragraph (3) of Section 16-127 and paragraph 1
14 of Section 17-133.
15 (Source: P.A. 91-357, eff. 7-29-99.)
 
16     (40 ILCS 5/15-113.7)  (from Ch. 108 1/2, par. 15-113.7)
17     Sec. 15-113.7. Service for other public employment.
18 "Service for other public employment": Includes those periods
19 not exceeding the lesser of 10 years or 2/3 of the service
20 granted under other Sections of this Article dealing with
21 service credit, during which a person was employed full time by
22 the United States government, or by the government of a state,
23 or by a political subdivision of a state, or by an agency or
24 instrumentality of any of the foregoing, if the person (1)
25 cannot qualify for a retirement pension or other benefit based
26 upon employer contributions from another retirement system,
27 exclusive of federal social security, based in whole or in part
28 upon this employment, and (2) pays the lesser of (A) an amount
29 equal to 8% of his or her annual basic compensation on the date
30 of becoming a participating employee subsequent to this service
31 multiplied by the number of years of such service, together
32 with compound interest from the date participation begins to
33 the date payment is received by the board at the rate of 6% per
34 annum through August 31, 1982, and at the effective rates after
35 that date, and (B) 50% of the actuarial value of the increase

 

 

SB0461 - 5 - LRB094 10644 AMC 40998 b

1 in the retirement annuity provided by this service, and (3)
2 contributes for at least 5 years subsequent to this employment
3 to one or more of the following systems: the State Universities
4 Retirement System, the Teachers' Retirement System of the State
5 of Illinois, and the Public School Teachers' Pension and
6 Retirement Fund of Chicago. If a function of a governmental
7 unit as defined by Section 20-107 is transferred by law, in
8 whole or in part to an employer, and an employee transfers
9 employment from this governmental unit to such employer within
10 6 months of the transfer of the function, the payment for
11 service authorized under this Section shall not exceed the
12 amount which would have been payable for this service to the
13 retirement system covering the governmental unit from which the
14 function was transferred.
15     The service granted under this Section shall not be
16 considered in determining whether the person has the minimum of
17 8 years of service required to qualify for a retirement annuity
18 at age 55 or the 5 years of service required to qualify for a
19 retirement annuity at age 62, as provided in Section 15-135.
20 The maximum allowable service of 10 years for this governmental
21 employment shall be reduced by the service credit which is
22 validated under paragraph (3) of Section 16-127 and paragraph
23 one of Section 17-133.
24     Except as hereinafter provided, this Section shall not
25 apply to persons who become participants in the system after
26 September 1, 1974.
27 (Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
28     (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
29     Sec. 15-136. Retirement annuities - Amount. The provisions
30 of this Section 15-136 apply only to those participants who are
31 participating in the traditional benefit package or the
32 portable benefit package and do not apply to participants who
33 are participating in the self-managed plan.
34     (a) The amount of a participant's retirement annuity,
35 expressed in the form of a single-life annuity, shall be

 

 

SB0461 - 6 - LRB094 10644 AMC 40998 b

1 determined by whichever of the following rules is applicable
2 and provides the largest annuity:
3     Rule 1: The retirement annuity shall be 1.67% of final rate
4 of earnings for each of the first 10 years of service, 1.90%
5 for each of the next 10 years of service, 2.10% for each year
6 of service in excess of 20 but not exceeding 30, and 2.30% for
7 each year in excess of 30; or for persons who retire on or
8 after January 1, 1998, 2.2% of the final rate of earnings for
9 each year of service.
10     Rule 2: The retirement annuity shall be the sum of the
11 following, determined from amounts credited to the participant
12 in accordance with the actuarial tables and the prescribed rate
13 of interest in effect at the time the retirement annuity
14 begins:
15         (i) the normal annuity which can be provided on an
16     actuarially equivalent basis, by the accumulated normal
17     contributions as of the date the annuity begins;
18         (ii) an annuity from employer contributions of an
19     amount equal to that which can be provided on an
20     actuarially equivalent basis from the accumulated normal
21     contributions made by the participant under Section
22     15-113.6 and Section 15-113.7 plus 1.4 times all other
23     accumulated normal contributions made by the participant;
24     and
25         (iii) the annuity that can be provided on an
26     actuarially equivalent basis from the entire contribution
27     made by the participant under Section 15-113.3.
28     With respect to a police officer or firefighter who retires
29 on or after August 14, 1998, the accumulated normal
30 contributions taken into account under clauses (i) and (ii) of
31 this Rule 2 shall include the additional normal contributions
32 made by the police officer or firefighter under Section
33 15-157(a).
34     The amount of a retirement annuity calculated under this
35 Rule 2 shall be computed solely on the basis of the
36 participant's accumulated normal contributions, as specified

 

 

SB0461 - 7 - LRB094 10644 AMC 40998 b

1 in this Rule and defined in Section 15-116. Neither an employee
2 or employer contribution for early retirement under Section
3 15-136.2 nor any other employer contribution shall be used in
4 the calculation of the amount of a retirement annuity under
5 this Rule 2.
6     This amendatory Act of the 91st General Assembly is a
7 clarification of existing law and applies to every participant
8 and annuitant without regard to whether status as an employee
9 terminates before the effective date of this amendatory Act.
10     Rule 3: The retirement annuity of a participant who is
11 employed at least one-half time during the period on which his
12 or her final rate of earnings is based, shall be equal to the
13 participant's years of service not to exceed 30, multiplied by
14 (1) $96 if the participant's final rate of earnings is less
15 than $3,500, (2) $108 if the final rate of earnings is at least
16 $3,500 but less than $4,500, (3) $120 if the final rate of
17 earnings is at least $4,500 but less than $5,500, (4) $132 if
18 the final rate of earnings is at least $5,500 but less than
19 $6,500, (5) $144 if the final rate of earnings is at least
20 $6,500 but less than $7,500, (6) $156 if the final rate of
21 earnings is at least $7,500 but less than $8,500, (7) $168 if
22 the final rate of earnings is at least $8,500 but less than
23 $9,500, and (8) $180 if the final rate of earnings is $9,500 or
24 more, except that the annuity for those persons having made an
25 election under Section 15-154(a-1) shall be calculated and
26 payable under the portable retirement benefit program pursuant
27 to the provisions of Section 15-136.4.
28     Rule 4: A participant who is at least age 50 and has 25 or
29 more years of service as a police officer or firefighter, and a
30 participant who is age 55 or over and has at least 20 but less
31 than 25 years of service as a police officer or firefighter,
32 shall be entitled to a retirement annuity of 2 1/4% of the
33 final rate of earnings for each of the first 10 years of
34 service as a police officer or firefighter, 2 1/2% for each of
35 the next 10 years of service as a police officer or
36 firefighter, and 2 3/4% for each year of service as a police

 

 

SB0461 - 8 - LRB094 10644 AMC 40998 b

1 officer or firefighter in excess of 20. The retirement annuity
2 for all other service shall be computed under Rule 1.
3     For purposes of this Rule 4, a participant's service as a
4 firefighter shall also include the following:
5         (i) service that is performed while the person is an
6     employee under subsection (h) of Section 15-107; and
7         (ii) in the case of an individual who was a
8     participating employee employed in the fire department of
9     the University of Illinois's Champaign-Urbana campus
10     immediately prior to the elimination of that fire
11     department and who immediately after the elimination of
12     that fire department transferred to another job with the
13     University of Illinois, service performed as an employee of
14     the University of Illinois in a position other than police
15     officer or firefighter, from the date of that transfer
16     until the employee's next termination of service with the
17     University of Illinois.
18     Rule 5: The retirement annuity of a participant who elected
19 early retirement under the provisions of Section 15-136.2 and
20 who, on or before February 16, 1995, brought administrative
21 proceedings pursuant to the administrative rules adopted by the
22 System to challenge the calculation of his or her retirement
23 annuity shall be the sum of the following, determined from
24 amounts credited to the participant in accordance with the
25 actuarial tables and the prescribed rate of interest in effect
26 at the time the retirement annuity begins:
27         (i) the normal annuity which can be provided on an
28     actuarially equivalent basis, by the accumulated normal
29     contributions as of the date the annuity begins; and
30         (ii) an annuity from employer contributions of an
31     amount equal to that which can be provided on an
32     actuarially equivalent basis from the accumulated normal
33     contributions made by the participant under Section
34     15-113.6 and Section 15-113.7 plus 1.4 times all other
35     accumulated normal contributions made by the participant;
36     and

 

 

SB0461 - 9 - LRB094 10644 AMC 40998 b

1         (iii) an annuity which can be provided on an
2     actuarially equivalent basis from the employee
3     contribution for early retirement under Section 15-136.2,
4     and an annuity from employer contributions of an amount
5     equal to that which can be provided on an actuarially
6     equivalent basis from the employee contribution for early
7     retirement under Section 15-136.2.
8     In no event shall a retirement annuity under this Rule 5 be
9 lower than the amount obtained by adding (1) the monthly amount
10 obtained by dividing the combined employee and employer
11 contributions made under Section 15-136.2 by the System's
12 annuity factor for the age of the participant at the beginning
13 of the annuity payment period and (2) the amount equal to the
14 participant's annuity if calculated under Rule 1, reduced under
15 Section 15-136(b) as if no contributions had been made under
16 Section 15-136.2.
17     With respect to a participant who is qualified for a
18 retirement annuity under this Rule 5 whose retirement annuity
19 began before the effective date of this amendatory Act of the
20 91st General Assembly, and for whom an employee contribution
21 was made under Section 15-136.2, the System shall recalculate
22 the retirement annuity under this Rule 5 and shall pay any
23 additional amounts due in the manner provided in Section
24 15-186.1 for benefits mistakenly set too low.
25     The amount of a retirement annuity calculated under this
26 Rule 5 shall be computed solely on the basis of those
27 contributions specifically set forth in this Rule 5. Except as
28 provided in clause (iii) of this Rule 5, neither an employee
29 nor employer contribution for early retirement under Section
30 15-136.2, nor any other employer contribution, shall be used in
31 the calculation of the amount of a retirement annuity under
32 this Rule 5.
33     The General Assembly has adopted the changes set forth in
34 Section 25 of this amendatory Act of the 91st General Assembly
35 in recognition that the decision of the Appellate Court for the
36 Fourth District in Mattis v. State Universities Retirement

 

 

SB0461 - 10 - LRB094 10644 AMC 40998 b

1 System et al. might be deemed to give some right to the
2 plaintiff in that case. The changes made by Section 25 of this
3 amendatory Act of the 91st General Assembly are a legislative
4 implementation of the decision of the Appellate Court for the
5 Fourth District in Mattis v. State Universities Retirement
6 System et al. with respect to that plaintiff.
7     The changes made by Section 25 of this amendatory Act of
8 the 91st General Assembly apply without regard to whether the
9 person is in service as an employee on or after its effective
10 date.
11     (b) The retirement annuity provided under Rules 1 and 3
12 above shall be reduced by 1/2 of 1% for each month the
13 participant is under age 60 at the time of retirement. However,
14 this reduction shall not apply in the following cases:
15         (1) For a disabled participant whose disability
16     benefits have been discontinued because he or she has
17     exhausted eligibility for disability benefits under clause
18     (6) of Section 15-152;
19         (2) For a participant who has at least the number of
20     years of service required to retire at any age under
21     subsection (a) of Section 15-135; or
22         (3) For that portion of a retirement annuity which has
23     been provided on account of service of the participant
24     during periods when he or she performed the duties of a
25     police officer or firefighter, if these duties were
26     performed for at least 5 years immediately preceding the
27     date the retirement annuity is to begin.
28     (c) The maximum retirement annuity provided under Rules 1,
29 2, 4, and 5 shall be the lesser of (1) the annual limit of
30 benefits as specified in Section 415 of the Internal Revenue
31 Code of 1986, as such Section may be amended from time to time
32 and as such benefit limits shall be adjusted by the
33 Commissioner of Internal Revenue, and (2) 80% of final rate of
34 earnings.
35     (d) An annuitant whose status as an employee terminates
36 after August 14, 1969 shall receive automatic increases in his

 

 

SB0461 - 11 - LRB094 10644 AMC 40998 b

1 or her retirement annuity as follows:
2     Effective January 1 immediately following the date the
3 retirement annuity begins, the annuitant shall receive an
4 increase in his or her monthly retirement annuity of 0.125% of
5 the monthly retirement annuity provided under Rule 1, Rule 2,
6 Rule 3, Rule 4, or Rule 5, contained in this Section,
7 multiplied by the number of full months which elapsed from the
8 date the retirement annuity payments began to January 1, 1972,
9 plus 0.1667% of such annuity, multiplied by the number of full
10 months which elapsed from January 1, 1972, or the date the
11 retirement annuity payments began, whichever is later, to
12 January 1, 1978, plus 0.25% of such annuity multiplied by the
13 number of full months which elapsed from January 1, 1978, or
14 the date the retirement annuity payments began, whichever is
15 later, to the effective date of the increase.
16     The annuitant shall receive an increase in his or her
17 monthly retirement annuity on each January 1 thereafter during
18 the annuitant's life of 3% of the monthly annuity provided
19 under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
20 this Section. The change made under this subsection by P.A.
21 81-970 is effective January 1, 1980 and applies to each
22 annuitant whose status as an employee terminates before or
23 after that date.
24     Beginning January 1, 1990, all automatic annual increases
25 payable under this Section shall be calculated as a percentage
26 of the total annuity payable at the time of the increase,
27 including all increases previously granted under this Article.
28     The change made in this subsection by P.A. 85-1008 is
29 effective January 26, 1988, and is applicable without regard to
30 whether status as an employee terminated before that date.
31     (e) If, on January 1, 1987, or the date the retirement
32 annuity payment period begins, whichever is later, the sum of
33 the retirement annuity provided under Rule 1 or Rule 2 of this
34 Section and the automatic annual increases provided under the
35 preceding subsection or Section 15-136.1, amounts to less than
36 the retirement annuity which would be provided by Rule 3, the

 

 

SB0461 - 12 - LRB094 10644 AMC 40998 b

1 retirement annuity shall be increased as of January 1, 1987, or
2 the date the retirement annuity payment period begins,
3 whichever is later, to the amount which would be provided by
4 Rule 3 of this Section. Such increased amount shall be
5 considered as the retirement annuity in determining benefits
6 provided under other Sections of this Article. This paragraph
7 applies without regard to whether status as an employee
8 terminated before the effective date of this amendatory Act of
9 1987, provided that the annuitant was employed at least
10 one-half time during the period on which the final rate of
11 earnings was based.
12     (f) A participant is entitled to such additional annuity as
13 may be provided on an actuarially equivalent basis, by any
14 accumulated additional contributions to his or her credit.
15 However, the additional contributions made by the participant
16 toward the automatic increases in annuity provided under this
17 Section shall not be taken into account in determining the
18 amount of such additional annuity.
19     (g) If, (1) by law, a function of a governmental unit, as
20 defined by Section 20-107 of this Code, is transferred in whole
21 or in part to an employer, and (2) a participant transfers
22 employment from such governmental unit to such employer within
23 6 months after the transfer of the function, and (3) the sum of
24 (A) the annuity payable to the participant under Rule 1, 2, or
25 3 of this Section (B) all proportional annuities payable to the
26 participant by all other retirement systems covered by Article
27 20, and (C) the initial primary insurance amount to which the
28 participant is entitled under the Social Security Act, is less
29 than the retirement annuity which would have been payable if
30 all of the participant's pension credits validated under
31 Section 20-109 had been validated under this system, a
32 supplemental annuity equal to the difference in such amounts
33 shall be payable to the participant.
34     (h) On January 1, 1981, an annuitant who was receiving a
35 retirement annuity on or before January 1, 1971 shall have his
36 or her retirement annuity then being paid increased $1 per

 

 

SB0461 - 13 - LRB094 10644 AMC 40998 b

1 month for each year of creditable service. On January 1, 1982,
2 an annuitant whose retirement annuity began on or before
3 January 1, 1977, shall have his or her retirement annuity then
4 being paid increased $1 per month for each year of creditable
5 service.
6     (i) On January 1, 1987, any annuitant whose retirement
7 annuity began on or before January 1, 1977, shall have the
8 monthly retirement annuity increased by an amount equal to 8¢
9 per year of creditable service times the number of years that
10 have elapsed since the annuity began.
11     (j) Any retirement benefit accrued but unpaid on the death
12 of an annuitant shall be paid to the annuitant's beneficiary.
13 (Source: P.A. 92-16, eff. 6-28-01; 93-347, eff. 7-24-03.)
 
14     (40 ILCS 5/15-139)  (from Ch. 108 1/2, par. 15-139)
15     Sec. 15-139. Retirement annuities; cancellation; suspended
16 during employment.
17     (a) If an annuitant returns to employment for an employer
18 within 2 months 60 days after the beginning of the retirement
19 annuity payment period, the retirement annuity shall be
20 cancelled, and the annuitant shall refund to the System the
21 total amount of the retirement annuity payments which he or she
22 received. If the retirement annuity is cancelled, the
23 participant shall continue to participate in the System.
24     (b) If an annuitant retires prior to age 60 and receives or
25 becomes entitled to receive during any month compensation in
26 excess of the monthly retirement annuity (including any
27 automatic annual increases) for services performed after the
28 date of retirement for any employer under this System, that
29 portion of the monthly retirement annuity provided by employer
30 contributions shall not be payable.
31     If an annuitant retires at age 60 or over and receives or
32 becomes entitled to receive during any academic year
33 compensation in excess of the difference between his or her
34 highest annual earnings prior to retirement and his or her
35 annual retirement annuity computed under Rule 1, Rule 2, Rule

 

 

SB0461 - 14 - LRB094 10644 AMC 40998 b

1 3, Rule 4, or Rule 5 of Section 15-136, or under Section
2 15-136.4, for services performed after the date of retirement
3 for any employer under this System, that portion of the monthly
4 retirement annuity provided by employer contributions shall be
5 reduced by an amount equal to the compensation that exceeds
6 such difference.
7     However, any remuneration received for serving as a member
8 of the Illinois Educational Labor Relations Board shall be
9 excluded from "compensation" for the purposes of this
10 subsection (b), and serving as a member of the Illinois
11 Educational Labor Relations Board shall not be deemed to be a
12 return to employment for the purposes of this Section. This
13 provision applies without regard to whether service was
14 terminated prior to the effective date of this amendatory Act
15 of 1991.
16     (c) If an employer certifies that an annuitant has been
17 reemployed on a permanent and continuous basis or in a position
18 in which the annuitant is expected to serve for at least 9
19 months, the annuitant shall resume his or her status as a
20 participating employee and shall be entitled to all rights
21 applicable to participating employees upon filing with the
22 board an election to forego all annuity payments during the
23 period of reemployment. Upon subsequent retirement, the
24 retirement annuity shall consist of the annuity which was
25 terminated by the reemployment, plus the additional retirement
26 annuity based upon service granted during the period of
27 reemployment, but the combined retirement annuity shall not
28 exceed the maximum annuity applicable on the date of the last
29 retirement.
30     The total service and earnings credited before and after
31 the initial date of retirement shall be considered in
32 determining eligibility of the employee or the employee's
33 beneficiary to benefits under this Article, and in calculating
34 final rate of earnings.
35     In determining the death benefit payable to a beneficiary
36 of an annuitant who again becomes a participating employee

 

 

SB0461 - 15 - LRB094 10644 AMC 40998 b

1 under this Section, accumulated normal and additional
2 contributions shall be considered as the sum of the accumulated
3 normal and additional contributions at the date of initial
4 retirement and the accumulated normal and additional
5 contributions credited after that date, less the sum of the
6 annuity payments received by the annuitant.
7     The survivors insurance benefits provided under Section
8 15-145 shall not be applicable to an annuitant who resumes his
9 or her status as a participating employee, unless the
10 annuitant, at the time of initial retirement, either: (1) has a
11 survivors insurance beneficiary who could qualify for such
12 benefits; or (2) elected not to receive a refund of survivors
13 insurance contributions. A portable benefit package lump-sum
14 retirement benefit recipient may elect to receive an optional
15 form of retirement annuity pursuant to the provisions of
16 subsection (h) of Section 15-136.4, but only with respect to
17 the additional retirement annuity earned during the period of
18 reemployment.
19     If the annuitant's employment is terminated because of
20 circumstances other than death before 9 months from the date of
21 reemployment, the provisions of this Section regarding
22 resumption of status as a participating employee shall not
23 apply. The normal and survivors insurance contributions which
24 are deducted during this period shall be refunded to the
25 annuitant without interest, and subsequent benefits under this
26 Article shall be the same as those which were applicable prior
27 to the date the annuitant resumed employment.
28     The amendments made to this Section by this amendatory Act
29 of the 91st General Assembly apply without regard to whether
30 the annuitant was in service on or after the effective date of
31 this amendatory Act.
32 (Source: P.A. 91-887 (Sections 10 and 25), eff. 7-6-00; 92-16,
33 eff. 6-28-01.)
 
34     (40 ILCS 5/15-154)  (from Ch. 108 1/2, par. 15-154)
35     Sec. 15-154. Refunds.

 

 

SB0461 - 16 - LRB094 10644 AMC 40998 b

1     (a) A participant whose status as an employee is
2 terminated, regardless of cause, or who has been on lay off
3 status for more than 120 days, and who is not on leave of
4 absence, is entitled to a refund of contributions upon
5 application; except that not more than one such refund
6 application may be made during any academic year.
7     Except as set forth in subsections (a-1) and (a-2), the
8 refund shall be the sum of the accumulated normal, additional,
9 and survivors insurance contributions, plus the entire
10 contribution made by the participant under Section 15-113.3,
11 less the amount of interest credited on these contributions
12 each year in excess of 4 1/2% of the amount on which interest
13 was calculated.
14     (a-1) A person who elects, in accordance with the
15 requirements of Section 15-134.5, to participate in the
16 portable benefit package and who becomes a participating
17 employee under that retirement program upon the conclusion of
18 the one-year waiting period applicable to the portable benefit
19 package election shall have his or her refund calculated in
20 accordance with the provisions of subsection (a-2).
21     (a-2) The refund payable to a participant described in
22 subsection (a-1) shall be the sum of the participant's
23 accumulated normal and additional contributions, as defined in
24 Sections 15-116 and 15-117, plus the entire contribution made
25 by the participant under Section 15-113.3. If the participant
26 terminates with 5 or more years of service from one or more of:
27 (1) for employment as defined in Section 15-113.1, (2) service
28 creditable under Section 15-113.4, or (3) reciprocal service
29 from the participant's election to retire and apply the
30 reciprocal provisions of Article 20 of this Code, then he or
31 she shall also be entitled to a distribution of employer
32 contributions in an amount equal to the sum of the accumulated
33 normal and additional contributions, as defined in Sections
34 15-116 and 15-117.
35     (b) Upon acceptance of a refund, the participant forfeits
36 all accrued rights and credits in the System, and if

 

 

SB0461 - 17 - LRB094 10644 AMC 40998 b

1 subsequently reemployed, the participant shall be considered a
2 new employee subject to all the qualifying conditions for
3 participation and eligibility for benefits applicable to new
4 employees. If such person again becomes a participating
5 employee and continues as such for 2 years, or is employed by
6 an employer and participates for at least 2 years in the
7 Federal Civil Service Retirement System, all such rights,
8 credits, and previous status as a participant shall be restored
9 upon repayment of the amount of the refund, together with
10 compound interest thereon from the date the refund was received
11 to the date of repayment at the rate of 6% per annum through
12 August 31, 1982, and at the effective rates after that date.
13 When a participant in the portable benefit package who received
14 a refund which included a distribution of employer
15 contributions repays a refund pursuant to this Section,
16 one-half of the amount repaid shall be deemed the member's
17 reinstated accumulated normal and additional contributions and
18 the other half shall be allocated as an employer contribution
19 to the System, except that any amount repaid for previously
20 purchased military service credit under Section 15-113.3 shall
21 be accounted for as such.
22     (c) If a participant covered under the traditional benefit
23 package has made survivors insurance contributions, but has no
24 survivors insurance beneficiary upon retirement, he or she
25 shall be entitled to elect a refund of the accumulated
26 survivors insurance contributions, or to elect an additional
27 annuity the value of which is equal to the accumulated
28 survivors insurance contributions. This election must be made
29 prior to the date the person's retirement annuity is approved
30 by the System.
31     (d) A participant, upon application, is entitled to a
32 refund of his or her accumulated additional contributions
33 attributable to the additional contributions described in the
34 last sentence of subsection (c) of Section 15-157. Upon the
35 acceptance of such a refund of accumulated additional
36 contributions, the participant forfeits all rights and credits

 

 

SB0461 - 18 - LRB094 10644 AMC 40998 b

1 which may have accrued because of such contributions.
2     (e) A participant who terminates his or her employee status
3 and elects to waive service credit under Section 15-154.2, is
4 entitled to a refund of the accumulated normal, additional and
5 survivors insurance contributions, if any, which were credited
6 the participant for this service, or to an additional annuity
7 the value of which is equal to the accumulated normal,
8 additional and survivors insurance contributions, if any;
9 except that not more than one such refund application may be
10 made during any academic year. Upon acceptance of this refund,
11 the participant forfeits all rights and credits accrued because
12 of this service.
13     (f) If a police officer or firefighter receives a
14 retirement annuity under Rule 1 or 3 of Section 15-136, he or
15 she shall be entitled at retirement to a refund of the
16 difference between his or her accumulated normal contributions
17 and the normal contributions which would have accumulated had
18 such person filed a waiver of the retirement formula provided
19 by Rule 4 of Section 15-136.
20     (g) If, at the time of retirement, a participant would be
21 entitled to a retirement annuity under Rule 1, 2, 3, 4, or 5 of
22 Section 15-136, or under Section 15-136.4, that exceeds the
23 maximum specified in clause (1) of subsection (c) of Section
24 15-136, he or she shall be entitled to a refund of the employee
25 contributions, if any, paid under Section 15-157 after the date
26 upon which continuance of such contributions would have
27 otherwise caused the retirement annuity to exceed this maximum,
28 plus compound interest at the effective rates.
29 (Source: P.A. 92-16, eff. 6-28-01; 92-424, eff. 8-17-01;
30 93-347, eff. 7-24-03.)
 
31     (40 ILCS 5/15-158.2)
32     Sec. 15-158.2. Self-managed plan.
33     (a) Purpose. The General Assembly finds that it is
34 important for colleges and universities to be able to attract
35 and retain the most qualified employees and that in order to

 

 

SB0461 - 19 - LRB094 10644 AMC 40998 b

1 attract and retain these employees, colleges and universities
2 should have the flexibility to provide a defined contribution
3 plan as an alternative for eligible employees who elect not to
4 participate in a defined benefit retirement program provided
5 under this Article. Accordingly, the State Universities
6 Retirement System is hereby authorized to establish and
7 administer a self-managed plan, which shall offer
8 participating employees the opportunity to accumulate assets
9 for retirement through a combination of employee and employer
10 contributions that may be invested in mutual funds, collective
11 investment funds, or other investment products and used to
12 purchase annuity contracts, either fixed or variable or a
13 combination thereof. The plan must be qualified under the
14 Internal Revenue Code of 1986.
15     (b) Adoption by employers. Each employer subject to this
16 Article may elect to adopt the self-managed plan established
17 under this Section; this election is irrevocable. An employer's
18 election to adopt the self-managed plan makes available to the
19 eligible employees of that employer the elections described in
20 Section 15-134.5.
21     The State Universities Retirement System shall be the plan
22 sponsor for the self-managed plan and shall prepare a plan
23 document and prescribe such rules and procedures as are
24 considered necessary or desirable for the administration of the
25 self-managed plan. Consistent with its fiduciary duty to the
26 participants and beneficiaries of the self-managed plan, the
27 Board of Trustees of the System may delegate aspects of plan
28 administration as it sees fit to companies authorized to do
29 business in this State, to the employers, or to a combination
30 of both.
31     (c) Selection of service providers and funding vehicles.
32 The System, in consultation with the employers, shall solicit
33 proposals to provide administrative services and funding
34 vehicles for the self-managed plan from insurance and annuity
35 companies and mutual fund companies, banks, trust companies, or
36 other financial institutions authorized to do business in this

 

 

SB0461 - 20 - LRB094 10644 AMC 40998 b

1 State. In reviewing the proposals received and approving and
2 contracting with no fewer than 2 and no more than 7 companies,
3 the Board of Trustees of the System shall consider, among other
4 things, the following criteria:
5         (1) the nature and extent of the benefits that would be
6     provided to the participants;
7         (2) the reasonableness of the benefits in relation to
8     the premium charged;
9         (3) the suitability of the benefits to the needs and
10     interests of the participating employees and the employer;
11         (4) the ability of the company to provide benefits
12     under the contract and the financial stability of the
13     company; and
14         (5) the efficacy of the contract in the recruitment and
15     retention of employees.
16     The System, in consultation with the employers, shall
17 periodically review each approved company. A company may
18 continue to provide administrative services and funding
19 vehicles for the self-managed plan only so long as it continues
20 to be an approved company under contract with the Board.
21     (d) Employee Direction. Employees who are participating in
22 the program must be allowed to direct the transfer of their
23 account balances among the various investment options offered,
24 subject to applicable contractual provisions. The participant
25 shall not be deemed a fiduciary by reason of providing such
26 investment direction. A person who is a fiduciary shall not be
27 liable for any loss resulting from such investment direction
28 and shall not be deemed to have breached any fiduciary duty by
29 acting in accordance with that direction. Neither the System
30 nor the employer guarantees any of the investments in the
31 employee's account balances.
32     (e) Participation. An employee eligible to participate in
33 the self-managed plan must make a written election in
34 accordance with the provisions of Section 15-134.5 and the
35 procedures established by the System. Participation in the
36 self-managed plan by an electing employee shall begin on the

 

 

SB0461 - 21 - LRB094 10644 AMC 40998 b

1 first day of the first pay period following the later of the
2 date the employee's election is filed with the System or the
3 effective date as of which the employee's employer begins to
4 offer participation in the self-managed plan. Employers may not
5 make the self-managed plan available earlier than January 1,
6 1998. An employee's participation in any other retirement
7 program administered by the System under this Article shall
8 terminate on the date that participation in the self-managed
9 plan begins.
10     An employee who has elected to participate in the
11 self-managed plan under this Section must continue
12 participation while employed in an eligible position, and may
13 not participate in any other retirement program administered by
14 the System under this Article while employed by that employer
15 or any other employer that has adopted the self-managed plan,
16 unless the self-managed plan is terminated in accordance with
17 subsection (i).
18     Participation in the self-managed plan under this Section
19 shall constitute membership in the State Universities
20 Retirement System.
21     A participant under this Section shall be entitled to the
22 benefits of Article 20 of this Code.
23     (f) Establishment of Initial Account Balance. If at the
24 time an employee elects to participate in the self-managed plan
25 he or she has rights and credits in the System due to previous
26 participation in the traditional benefit package, the System
27 shall establish for the employee an opening account balance in
28 the self-managed plan, equal to the amount of contribution
29 refund that the employee would be eligible to receive under
30 Section 15-154 if the employee terminated employment on that
31 date and elected a refund of contributions, except that this
32 hypothetical refund shall include interest at the effective
33 rate for the respective years. The System shall transfer assets
34 from the defined benefit retirement program to the self-managed
35 plan, as a tax free transfer in accordance with Internal
36 Revenue Service guidelines, for purposes of funding the

 

 

SB0461 - 22 - LRB094 10644 AMC 40998 b

1 employee's opening account balance.
2     (g) No Duplication of Service Credit. Notwithstanding any
3 other provision of this Article, an employee may not purchase
4 or receive service or service credit applicable to any other
5 retirement program administered by the System under this
6 Article for any period during which the employee was a
7 participant in the self-managed plan established under this
8 Section.
9     (h) Contributions. The self-managed plan shall be funded by
10 contributions from employees participating in the self-managed
11 plan and employer contributions as provided in this Section.
12     The contribution rate for employees participating in the
13 self-managed plan under this Section shall be equal to the
14 employee contribution rate for other participants in the
15 System, as provided in Section 15-157. This required
16 contribution shall be made as an "employer pick-up" under
17 Section 414(h) of the Internal Revenue Code of 1986 or any
18 successor Section thereof. Any employee participating in the
19 System's traditional benefit package prior to his or her
20 election to participate in the self-managed plan shall continue
21 to have the employer pick up the contributions required under
22 Section 15-157. However, the amounts picked up after the
23 election of the self-managed plan shall be remitted to and
24 treated as assets of the self-managed plan. In no event shall
25 an employee have an option of receiving these amounts in cash.
26 Employees may make additional contributions to the
27 self-managed plan in accordance with procedures prescribed by
28 the System, to the extent permitted under rules prescribed by
29 the System.
30     The program shall provide for employer contributions to be
31 credited to each self-managed plan participant at a rate of
32 7.6% of the participating employee's salary, less the amount
33 used by the System to provide disability benefits for the
34 employee. The amounts so credited shall be paid into the
35 participant's self-managed plan accounts in a manner to be
36 prescribed by the System.

 

 

SB0461 - 23 - LRB094 10644 AMC 40998 b

1     An amount of employer contribution, not exceeding 1% of the
2 participating employee's salary, shall be used for the purpose
3 of providing the disability benefits of the System to the
4 employee. Prior to the beginning of each plan year under the
5 self-managed plan, the Board of Trustees shall determine, as a
6 percentage of salary, the amount of employer contributions to
7 be allocated during that plan year for providing disability
8 benefits for employees in the self-managed plan.
9     The State of Illinois shall make contributions by
10 appropriations to the System of the employer contributions
11 required for employees who participate in the self-managed plan
12 under this Section. The amount required shall be certified by
13 the Board of Trustees of the System and paid by the State in
14 accordance with Section 15-165. The System shall not be
15 obligated to remit the required employer contributions to any
16 of the insurance and annuity companies, mutual fund companies,
17 banks, trust companies, financial institutions, or other
18 sponsors of any of the funding vehicles offered under the
19 self-managed plan until it has received the required employer
20 contributions from the State. In the event of a deficiency in
21 the amount of State contributions, the System shall implement
22 those procedures described in subsection (c) of Section 15-165
23 to obtain the required funding from the General Revenue Fund.
24     (i) Termination. The self-managed plan authorized under
25 this Section may be terminated by the System, subject to the
26 terms of any relevant contracts, and the System shall have no
27 obligation to reestablish the self-managed plan under this
28 Section. This Section does not create a right to continued
29 participation in any self-managed plan set up by the System
30 under this Section. If the self-managed plan is terminated, the
31 participants shall have the right to participate in one of the
32 other retirement programs offered by the System and receive
33 service credit in such other retirement program for any years
34 of employment following the termination.
35     (j) Vesting; Withdrawal; Return to Service. A participant
36 in the self-managed plan becomes vested in the employer

 

 

SB0461 - 24 - LRB094 10644 AMC 40998 b

1 contributions credited to his or her accounts in the
2 self-managed plan on the earliest to occur of the following:
3 (1) completion of 5 years of service, counting service with an
4 employer described in Section 15-106 or military service
5 established under Section 15-113.3; (2) the death of the
6 participating employee while employed by an employer described
7 in Section 15-106, if the participant has completed at least 1
8 1/2 years of service; or (3) the participant's election to
9 retire and apply the reciprocal provisions of Article 20 of
10 this Code.
11     A participant in the self-managed plan who receives a
12 distribution of his or her vested amounts from the self-managed
13 plan while not yet eligible for retirement under this Article
14 (and Article 20, if applicable) shall forfeit all service
15 credit and accrued rights in the System; if subsequently
16 re-employed, the participant shall be considered a new
17 employee. If a former participant again becomes a participating
18 employee (or becomes employed by a participating system under
19 Article 20 of this Code) and continues as such for at least 2
20 years, all such rights, service credits, and previous status as
21 a participant shall be restored upon repayment of the amount of
22 the distribution, without interest.
23     (k) Benefit amounts. If an employee who is vested in
24 employer contributions terminates employment, the employee
25 shall be entitled to a benefit which is based on the account
26 values attributable to both employer and employee
27 contributions and any investment return thereon.
28     If an employee who is not vested in employer contributions
29 terminates employment, the employee shall be entitled to a
30 benefit based solely on the account values attributable to the
31 employee's contributions and any investment return thereon,
32 and the employer contributions and any investment return
33 thereon shall be forfeited. Any employer contributions which
34 are forfeited shall be held in escrow by the company investing
35 those contributions and shall be used as directed by the System
36 for future allocations of employer contributions or for the

 

 

SB0461 - 25 - LRB094 10644 AMC 40998 b

1 restoration of amounts previously forfeited by former
2 participants who again become participating employees.
3 (Source: P.A. 93-347, eff. 7-24-03.)
 
4     (40 ILCS 5/15-187)  (from Ch. 108 1/2, par. 15-187)
5     Sec. 15-187. Felony conviction. None of the benefits
6 provided under this Article shall be paid to any person who is
7 convicted of any felony relating to or arising out of or in
8 connection with the person's service as an employee.
9     This Section shall not operate to impair any contract or
10 vested right heretofore acquired under any law or laws
11 continued in this Article, nor to preclude the right to a
12 refund. No refund paid to any person who is convicted of a
13 felony relating to or arising out of or in connection with the
14 person's service as an employee shall include employer
15 contributions or interest thereon or, in the case of the
16 self-managed plan authorized under Section 15-158.2, any
17 employer contributions or investment return on such employer
18 contributions.
19     All persons entering service subsequent to July 9, 1955
20 shall be deemed to have consented to the provisions of this
21 Section as a condition of coverage.
22 (Source: P.A. 93-347, eff. 7-24-03.)
 
23     (40 ILCS 5/15-190)  (from Ch. 108 1/2, par. 15-190)
24     Sec. 15-190. Persons under legal disability. If a person is
25 under legal disability when any right or privilege accrues to
26 him or her under this Article, a guardian may be appointed
27 pursuant to law, and may, on behalf of such person, claim and
28 exercise any such right or privilege with the same force and
29 effect as if the person had not been under a legal disability
30 and had claimed or exercised such right or privilege.
31     If a person's application for benefits or a physician's
32 certificate on file with the board shows that the person is
33 under a legal disability, the benefits payable under this
34 Article may be paid (1) directly to the person under legal

 

 

SB0461 - 26 - LRB094 10644 AMC 40998 b

1 disability, (2) to any person who has legally qualified and is
2 acting as guardian of the property of the person under legal
3 disability, (3) to either parent of the person under legal
4 disability or any adult person with whom the person under legal
5 disability may at the time be living, provided only that such
6 parent or adult person to whom any amount is to be paid shall
7 have advised the board in writing that such amount will be held
8 or used for the benefit of the person under legal disability,
9 or (4) to the trustee of any trust created for the sole benefit
10 of the person under legal disability while that person is
11 living, provided only that the trustee of such trust to whom
12 any amount is to be paid shall have advised the board in
13 writing that such amount will be held or used for the benefit
14 of the person under legal disability. The system shall not be
15 required to determine the validity of the trust or any of the
16 terms thereof. The representation of the trustee that the trust
17 meets the requirements of this Section shall be conclusive as
18 to the system. The written receipt of the payment by the person
19 under legal disability or by the other person who receives such
20 payment shall be an absolute discharge of the system's
21 liability in respect of the amount so paid.
22 (Source: P.A. 93-347, eff. 7-24-03.)
 
23     (40 ILCS 5/15-191)  (from Ch. 108 1/2, par. 15-191)
24     Sec. 15-191. Payment of benefits to minors. If any benefits
25 under this Article become payable to a minor, the board may
26 make payment (1) directly to the minor, (2) to any person who
27 has legally qualified and is acting as guardian of the minor's
28 person or property in any jurisdiction, (3) to either parent of
29 the minor or to any adult person with whom the minor may at the
30 time be living, provided only that the parent or other person
31 to whom any amount is to be paid shall have advised the board
32 in writing that such amount will be held or used for the
33 benefit of the minor, or (4) to the trustee of any trust
34 created for the sole benefit of the minor while that minor is
35 living, provided only that the trustee of such trust to whom

 

 

SB0461 - 27 - LRB094 10644 AMC 40998 b

1 any amount is to be paid shall have advised the board in
2 writing that such amount will be held or used for the benefit
3 of the minor. The system shall not be required to determine the
4 validity of the trust or any of the terms thereof. The
5 representation of the trustee that the trust meets the
6 requirements of this Section shall be conclusive as to the
7 system. The written receipt of the payment by the minor,
8 parent, trustee, or other person who receives such payment
9 shall be an absolute discharge of the system's liability in
10 respect of the amount so paid.
11 (Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
 
12     Section 99. Effective date. This Act takes effect upon
13 becoming law.