Personnel and Pensions Committee

Filed: 3/11/2010

 

 


 

 


 
09600HB5872ham001 LRB096 20604 AMC 37580 a

1
AMENDMENT TO HOUSE BILL 5872

2     AMENDMENT NO. ______. Amend House Bill 5872 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Illinois Pension Code is amended by adding
5 Sections 2-103.1, 2-103.2, 2-126.2, 14-103.40, 14-103.41,
6 14-133.2, 16-122.2, 16-122.3, 16-158.2, 18-118.1, 18-118.2,
7 and 18-133.2 and changing Sections 2-126, 14-133, 15-158.2,
8 16-152, and 18-133 as follows:
 
9     (40 ILCS 5/2-103.1 new)
10     Sec. 2-103.1. Traditional benefit package. "Traditional
11 benefit package" means the defined benefit retirement program
12 maintained by the System, which includes retirement annuities
13 payable directly from the System, as provided in Sections
14 2-119, 2-119.01, 2-119.1, and 2-120; survivor's annuities
15 payable directly from the System, as provided in Sections
16 2-121, 2-121.1, 2-121.2, and 2-121.3; and contribution

 

 

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1 refunds, as provided in Section 2-123.
 
2     (40 ILCS 5/2-103.2 new)
3     Sec. 2-103.2. Self-managed plan. "Self-managed plan" means
4 the defined contribution retirement program maintained by the
5 System, as described in Section 2-126.2. The self-managed plan
6 does not include retirement annuities or survivor's benefits
7 payable directly from the System, as provided in Sections
8 2-119, 2-119.01, 2-119.1, 2-120, 2-121, 2-121.1, 2-121.2, and
9 2-121.3 or refunds determined under Section 2-123.
 
10     (40 ILCS 5/2-126)  (from Ch. 108 1/2, par. 2-126)
11     Sec. 2-126. Contributions by participants.
12     (a) Each participant shall contribute toward the cost of
13 his or her retirement annuity a percentage of each payment of
14 salary received by him or her for service as a member as
15 follows: for service between October 31, 1947 and January 1,
16 1959, 5%; for service between January 1, 1959 and June 30,
17 1969, 6%; for service between July 1, 1969 and January 10,
18 1973, 6 1/2%; for service after January 10, 1973, 7%; for
19 service after December 31, 1981, 8 1/2%.
20     (b) Beginning August 2, 1949, each male participant, and
21 from July 1, 1971, each female participant shall contribute
22 towards the cost of the survivor's annuity 2% of salary.
23     A participant who has no eligible survivor's annuity
24 beneficiary may elect to cease making contributions for

 

 

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1 survivor's annuity under this subsection. A survivor's annuity
2 shall not be payable upon the death of a person who has made
3 this election, unless prior to that death the election has been
4 revoked and the amount of the contributions that would have
5 been paid under this subsection in the absence of the election
6 is paid to the System, together with interest at the rate of 4%
7 per year from the date the contributions would have been made
8 to the date of payment.
9     (c) Beginning July 1, 1967, each participant shall
10 contribute 1% of salary towards the cost of automatic increase
11 in annuity provided in Section 2-119.1. These contributions
12 shall be made concurrently with contributions for retirement
13 annuity purposes.
14     (d) In addition, each participant serving as an officer of
15 the General Assembly shall contribute, for the same purposes
16 and at the same rates as are required of a regular participant,
17 on each additional payment received as an officer. If the
18 participant serves as an officer for at least 2 but less than 4
19 years, he or she shall contribute an amount equal to the amount
20 that would have been contributed had the participant served as
21 an officer for 4 years. Persons who serve as officers in the
22 87th General Assembly but cannot receive the additional payment
23 to officers because of the ban on increases in salary during
24 their terms may nonetheless make contributions based on those
25 additional payments for the purpose of having the additional
26 payments included in their highest salary for annuity purposes;

 

 

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1 however, persons electing to make these additional
2 contributions must also pay an amount representing the
3 corresponding employer contributions, as calculated by the
4 System.
5     (e) Notwithstanding any provision in this Section to the
6 contrary, for a participant who first becomes a participant
7 under this Article after January 1, 2011, any contributions on
8 amounts in excess of the Social Security Covered Wage Base for
9 that year, including the contributions for a survivor's
10 annuity, shall instead be used to finance the benefits under
11 Section 2-126.2.
12 (Source: P.A. 90-766, eff. 8-14-98.)
 
13     (40 ILCS 5/2-126.2 new)
14     Sec. 2-126.2. Self-managed plan.
15     (a) The General Assembly Retirement System must establish
16 and administer a self-managed plan that shall offer
17 participants the opportunity to accumulate assets for
18 retirement through a combination of participant and State
19 contributions that may be invested in mutual funds, collective
20 investment funds, or other investment products and used to
21 purchase annuity contracts, either fixed or variable or a
22 combination of fixed and variable. The plan must be qualified
23 under the Internal Revenue Code of 1986.
24     The General Assembly Retirement System shall be the plan
25 sponsor for the self-managed plan and shall prepare a plan

 

 

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1 document and adopt any rules and procedures as are considered
2 necessary or desirable for the administration of the
3 self-managed plan. Consistent with its fiduciary duty to the
4 participants and beneficiaries of the self-managed plan, the
5 Board of Trustees of the System may delegate aspects of plan
6 administration as it sees fit to companies authorized to do
7 business in this State.
8     (b) Notwithstanding any other provision of this Article,
9 for a participant who first becomes a participant under this
10 Article after January 1, 2011, any portion of the participant's
11 yearly salary that exceeds the Social Security Covered Wage
12 Base for that year shall be subject to the self-managed plan
13 created under this Section.
14     (c) The System shall solicit proposals to provide
15 administrative services and funding vehicles for the
16 self-managed plan from insurance and annuity companies and
17 mutual fund companies, banks, trust companies, or other
18 financial institutions authorized to do business in this State.
19 In reviewing the proposals received and approving and
20 contracting with no fewer than 2 and no more than 7 companies,
21 the Board of Trustees of the System shall consider, among other
22 things, the following criteria:
23         (1) the nature and extent of the benefits that would be
24     provided to the participants;
25         (2) the reasonableness of the benefits in relation to
26     the premium charged;

 

 

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1         (3) the suitability of the benefits to the needs and
2     interests of the participants and the State; and
3         (4) the ability of the company to provide benefits
4     under the contract and the financial stability of the
5     company.
6     The System shall periodically review each approved
7 company. A company may continue to provide administrative
8 services and funding vehicles for the self-managed plan only so
9 long as it continues to be an approved company under contract
10 with the Board.
11     In addition to the companies approved by the System under
12 this subsection (c), the System may offer its participants an
13 investment fund managed by the Illinois State Board of
14 Investment.
15     (d) Participants in the program must be allowed to direct
16 the transfer of their account balances among the various
17 investment options offered, subject to applicable contractual
18 provisions. The participant shall not be deemed a fiduciary by
19 reason of providing such investment direction. A person who is
20 a fiduciary shall not be liable for any loss resulting from
21 that investment direction and shall not be deemed to have
22 breached any fiduciary duty by acting in accordance with that
23 direction. Neither the System nor the State shall guarantee any
24 of the investments in the participant's account balances.
25     (e) Participation in the self-managed plan under this
26 Section shall constitute participation in the General Assembly

 

 

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1 Retirement System.
2     (f) The self-managed plan shall be funded by contributions
3 from participants in the self-managed plan and State
4 contributions as provided in this Section.
5     The contribution rate for participants in the self-managed
6 plan under this Section shall be equal to the member
7 contribution rate for other participants in the System, as
8 provided in Section 2-126. This required contribution shall be
9 made as an employer pick-up under Section 414(h) of the
10 Internal Revenue Code of 1986 or any successor Section thereof.
11 Any participant in the System's traditional benefit package
12 prior to his or her election to participate in the self-managed
13 plan shall continue to have the employer pick up the
14 contributions required under Section 2-126. However, the
15 amounts picked up after the election of the self-managed plan
16 shall be remitted to and treated as assets of the self-managed
17 plan. In no event shall a participant have the option of
18 receiving these amounts in cash. Participants may make
19 additional contributions to the self-managed plan in
20 accordance with procedures prescribed by the System, to the
21 extent permitted under rules adopted by the System.
22     The program shall provide for State contributions to be
23 credited to each self-managed plan participant in an amount
24 equal to the employee contributions required under this
25 Section.
26     The State of Illinois shall make contributions by

 

 

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1 appropriations to the System for participants in the
2 self-managed plan under this Section. The amount required shall
3 be certified by the Board of Trustees of the System and paid by
4 the State in accordance with Section 2-134. The System shall
5 not be obligated to remit the required State contributions to
6 any of the insurance and annuity companies, mutual fund
7 companies, banks, trust companies, financial institutions, or
8 other sponsors of any of the funding vehicles offered under the
9 self-managed plan until it has received the required State
10 contributions from the State.
11     (g) If a participant in the self-managed plan who is
12 otherwise vested under this Article terminates employment, the
13 participant shall be entitled to a benefit that is based on the
14 account values attributable to both State and member
15 contributions and any investment return thereon.
16     If a participant in the self-managed plan who is not
17 otherwise vested under this Article terminates employment, the
18 participant shall be entitled to a benefit based solely on the
19 account values attributable to the participant's contributions
20 and any investment return thereon, and the State contributions
21 and any investment return thereon shall be forfeited. Any State
22 contributions that are forfeited shall be held in escrow by the
23 company investing those contributions and shall be used, as
24 directed by the System, for future allocations of State
25 contributions.
 

 

 

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1     (40 ILCS 5/14-103.40 new)
2     Sec. 14-103.40. Traditional benefit package. "Traditional
3 benefit package" means the defined benefit retirement program
4 maintained by the System, which includes retirement annuities
5 payable directly from the System, as provided in Sections
6 14-107, 14-108, 14-113, and 14-114; survivor's annuities
7 payable directly from the System, as provided in Sections
8 14-120, 14-121, and 14-121.1; and contribution refunds, as
9 provided in Section 14-130.
 
10     (40 ILCS 5/14-103.41 new)
11     Sec. 14-103.41. Self-managed plan. "Self-managed plan"
12 means the defined contribution retirement program maintained
13 by the System, as described in Section 14-133.2. The
14 self-managed plan does not include retirement annuities or
15 survivor's benefits payable directly from the System, as
16 provided in Sections 14-107, 14-108, 14-113, 14-114, 14-120,
17 14-121, and 14-121.1 or refunds determined under Section
18 14-130.
 
19     (40 ILCS 5/14-133)  (from Ch. 108 1/2, par. 14-133)
20     Sec. 14-133. Contributions on behalf of members.
21     (a) Each participating employee shall make contributions
22 to the System, based on the employee's compensation, as
23 follows:
24         (1) Covered employees, except as indicated below, 3.5%

 

 

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1     for retirement annuity, and 0.5% for a widow or survivors
2     annuity;
3         (2) Noncovered employees, except as indicated below,
4     7% for retirement annuity and 1% for a widow or survivors
5     annuity;
6         (3) Noncovered employees serving in a position in which
7     "eligible creditable service" as defined in Section 14-110
8     may be earned, 1% for a widow or survivors annuity plus the
9     following amount for retirement annuity: 8.5% through
10     December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
11     in 2004 and thereafter;
12         (4) Covered employees serving in a position in which
13     "eligible creditable service" as defined in Section 14-110
14     may be earned, 0.5% for a widow or survivors annuity plus
15     the following amount for retirement annuity: 5% through
16     December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
17     and thereafter;
18         (5) Each security employee of the Department of
19     Corrections or of the Department of Human Services who is a
20     covered employee, 0.5% for a widow or survivors annuity
21     plus the following amount for retirement annuity: 5%
22     through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
23     in 2004 and thereafter;
24         (6) Each security employee of the Department of
25     Corrections or of the Department of Human Services who is
26     not a covered employee, 1% for a widow or survivors annuity

 

 

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1     plus the following amount for retirement annuity: 8.5%
2     through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
3     11.5% in 2004 and thereafter.
4     (b) Contributions shall be in the form of a deduction from
5 compensation and shall be made notwithstanding that the
6 compensation paid in cash to the employee shall be reduced
7 thereby below the minimum prescribed by law or regulation. Each
8 member is deemed to consent and agree to the deductions from
9 compensation provided for in this Article, and shall receipt in
10 full for salary or compensation.
11     (c) Notwithstanding any provision in this Section to the
12 contrary, for an employee who (1) first becomes an employee
13 under this Article after January 1, 2011 or (2) is a member of
14 the System on January 1, 2011 and becomes employed in a
15 double-exempt position, as defined in subsection (b) of Section
16 14-133.2, after January 1, 2011, any contributions on amounts
17 in excess of the Social Security Covered Wage Base for that
18 year, including the contributions for a survivor's annuity,
19 shall instead be used to finance the benefits under Section
20 14-133.2.
21 (Source: P.A. 92-14, eff. 6-28-01.)
 
22     (40 ILCS 5/14-133.2 new)
23     Sec. 14-133.2. Self-managed plan.
24     (a) The State Employees' Retirement System of Illinois must
25 establish and administer a self-managed plan that shall offer

 

 

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1 participants the opportunity to accumulate assets for
2 retirement through a combination of participant and State
3 contributions that may be invested in mutual funds, collective
4 investment funds, or other investment products and used to
5 purchase annuity contracts, either fixed or variable or a
6 combination of fixed and variable. The plan must be qualified
7 under the Internal Revenue Code of 1986.
8     The State Employees' Retirement System of Illinois shall be
9 the plan sponsor for the self-managed plan and shall prepare a
10 plan document and adopt any rules and procedures as are
11 considered necessary or desirable for the administration of the
12 self-managed plan. Consistent with its fiduciary duty to the
13 participants and beneficiaries of the self-managed plan, the
14 Board of Trustees of the System may delegate aspects of plan
15 administration as it sees fit to companies authorized to do
16 business in this State.
17     (b) Notwithstanding any other provision of this Article,
18 for an employee who (1) first becomes an employee under this
19 Article after January 1, 2011 or (2) is a member of the System
20 on January 1, 2011 and becomes employed in a double-exempt
21 position after January 1, 2011, any portion of the employee's
22 yearly salary that exceeds the Social Security Covered Wage
23 Base for that year shall be subject to the self-managed plan
24 created under this Section.
25     For the purposes of this Section, (i) "double-exempt
26 position" means a position that is both Rutan-exempt and exempt

 

 

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1 from the Personnel Code under Section 4(d)(1) or Section
2 4(d)(3) of that Code and (ii) "Rutan" means the opinion of the
3 United States Supreme Court in Rutan v. Republican Party of
4 Illinois, 497 U.S. 62 (1990).
5     (c) The System shall solicit proposals to provide
6 administrative services and funding vehicles for the
7 self-managed plan from insurance and annuity companies and
8 mutual fund companies, banks, trust companies, or other
9 financial institutions authorized to do business in this State.
10 In reviewing the proposals received and approving and
11 contracting with no fewer than 2 and no more than 7 companies,
12 the Board of Trustees of the System shall consider, among other
13 things, the following criteria:
14         (1) the nature and extent of the benefits that would be
15     provided to the participants;
16         (2) the reasonableness of the benefits in relation to
17     the premium charged;
18         (3) the suitability of the benefits to the needs and
19     interests of the participants and the State; and
20         (4) the ability of the company to provide benefits
21     under the contract and the financial stability of the
22     company.
23     The System shall periodically review each approved
24 company. A company may continue to provide administrative
25 services and funding vehicles for the self-managed plan only so
26 long as it continues to be an approved company under contract

 

 

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1 with the Board.
2     In addition to the companies approved by the System under
3 this subsection (c), the System may offer its participants an
4 investment fund managed by the Illinois State Board of
5 Investment.
6     (d) Participants in the program must be allowed to direct
7 the transfer of their account balances among the various
8 investment options offered, subject to applicable contractual
9 provisions. The participant shall not be deemed a fiduciary by
10 reason of providing such investment direction. A person who is
11 a fiduciary shall not be liable for any loss resulting from
12 that investment direction and shall not be deemed to have
13 breached any fiduciary duty by acting in accordance with that
14 direction. Neither the System nor the State shall guarantee any
15 of the investments in the participant's account balances.
16     (e) Participation in the self-managed plan under this
17 Section shall constitute participation in the State Employees'
18 Retirement System of Illinois.
19     (f) The self-managed plan shall be funded by contributions
20 from participants in the self-managed plan and State
21 contributions as provided in this Section.
22     The contribution rate for participants in the self-managed
23 plan under this Section shall be equal to the member
24 contribution rate for other participants in the System, as
25 provided in Section 14-133. This required contribution shall be
26 made as an employer pick-up under Section 414(h) of the

 

 

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1 Internal Revenue Code of 1986 or any successor Section thereof.
2 Any participant in the System's traditional benefit package
3 prior to his or her election to participate in the self-managed
4 plan shall continue to have the employer pick up the
5 contributions required under Section 14-133. However, the
6 amounts picked up after the election of the self-managed plan
7 shall be remitted to and treated as assets of the self-managed
8 plan. In no event shall a participant have the option of
9 receiving these amounts in cash. Participants may make
10 additional contributions to the self-managed plan in
11 accordance with procedures prescribed by the System, to the
12 extent permitted under rules adopted by the System.
13     The program shall provide for State contributions to be
14 credited to each self-managed plan participant in an amount
15 equal to the employee contributions required under this
16 Section.
17     The State of Illinois shall make contributions by
18 appropriations to the System for participants in the
19 self-managed plan under this Section. The amount required shall
20 be certified by the Board of Trustees of the System and paid by
21 the State in accordance with Sections 14-132 and 14-135.08. The
22 System shall not be obligated to remit the required State
23 contributions to any of the insurance and annuity companies,
24 mutual fund companies, banks, trust companies, financial
25 institutions, or other sponsors of any of the funding vehicles
26 offered under the self-managed plan until it has received the

 

 

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1 required State contributions from the State.
2     (g) If a participant in the self-managed plan who is
3 otherwise vested under this Article terminates employment, the
4 participant shall be entitled to a benefit that is based on the
5 account values attributable to both State and member
6 contributions and any investment return thereon.
7     If a participant in the self-managed plan who is not
8 otherwise vested under this Article terminates employment, the
9 participant shall be entitled to a benefit based solely on the
10 account values attributable to the participant's contributions
11 and any investment return thereon, and the State contributions
12 and any investment return thereon shall be forfeited. Any State
13 contributions that are forfeited shall be held in escrow by the
14 company investing those contributions and shall be used, as
15 directed by the System, for future allocations of State
16 contributions.
 
17     (40 ILCS 5/15-158.2)
18     Sec. 15-158.2. Self-managed plan.
19     (a) Purpose. The General Assembly finds that it is
20 important for colleges and universities to be able to attract
21 and retain the most qualified employees and that in order to
22 attract and retain these employees, colleges and universities
23 should have the flexibility to provide a defined contribution
24 plan as an alternative for eligible employees who elect not to
25 participate in a defined benefit retirement program provided

 

 

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1 under this Article. Accordingly, the State Universities
2 Retirement System is hereby authorized to establish and
3 administer a self-managed plan, which shall offer
4 participating employees the opportunity to accumulate assets
5 for retirement through a combination of employee and employer
6 contributions that may be invested in mutual funds, collective
7 investment funds, or other investment products and used to
8 purchase annuity contracts, either fixed or variable or a
9 combination thereof. The plan must be qualified under the
10 Internal Revenue Code of 1986.
11     (b) Adoption by employers. Each employer subject to this
12 Article must may elect to adopt the self-managed plan
13 established under this Section; this election is irrevocable.
14 An employer's election to adopt the self-managed plan makes
15 available to the eligible employees of that employer the
16 elections described in Section 15-134.5.
17     The State Universities Retirement System shall be the plan
18 sponsor for the self-managed plan and shall prepare a plan
19 document and prescribe such rules and procedures as are
20 considered necessary or desirable for the administration of the
21 self-managed plan. Consistent with its fiduciary duty to the
22 participants and beneficiaries of the self-managed plan, the
23 Board of Trustees of the System may delegate aspects of plan
24 administration as it sees fit to companies authorized to do
25 business in this State, to the employers, or to a combination
26 of both.

 

 

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1     (c) Selection of service providers and funding vehicles.
2 The System, in consultation with the employers, shall solicit
3 proposals to provide administrative services and funding
4 vehicles for the self-managed plan from insurance and annuity
5 companies and mutual fund companies, banks, trust companies, or
6 other financial institutions authorized to do business in this
7 State. In reviewing the proposals received and approving and
8 contracting with no fewer than 2 and no more than 7 companies,
9 the Board of Trustees of the System shall consider, among other
10 things, the following criteria:
11         (1) the nature and extent of the benefits that would be
12     provided to the participants;
13         (2) the reasonableness of the benefits in relation to
14     the premium charged;
15         (3) the suitability of the benefits to the needs and
16     interests of the participating employees and the employer;
17         (4) the ability of the company to provide benefits
18     under the contract and the financial stability of the
19     company; and
20         (5) the efficacy of the contract in the recruitment and
21     retention of employees.
22     The System, in consultation with the employers, shall
23 periodically review each approved company. A company may
24 continue to provide administrative services and funding
25 vehicles for the self-managed plan only so long as it continues
26 to be an approved company under contract with the Board.

 

 

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1     (d) Employee Direction. Employees who are participating in
2 the program must be allowed to direct the transfer of their
3 account balances among the various investment options offered,
4 subject to applicable contractual provisions. The participant
5 shall not be deemed a fiduciary by reason of providing such
6 investment direction. A person who is a fiduciary shall not be
7 liable for any loss resulting from such investment direction
8 and shall not be deemed to have breached any fiduciary duty by
9 acting in accordance with that direction. Neither the System
10 nor the employer guarantees any of the investments in the
11 employee's account balances.
12     (e) Participation. An employee eligible to participate in
13 the self-managed plan must make a written election in
14 accordance with the provisions of Section 15-134.5 and the
15 procedures established by the System. Participation in the
16 self-managed plan by an electing employee shall begin on the
17 first day of the first pay period following the later of the
18 date the employee's election is filed with the System or the
19 effective date as of which the employee's employer begins to
20 offer participation in the self-managed plan. Employers may not
21 make the self-managed plan available earlier than January 1,
22 1998. An employee's participation in any other retirement
23 program administered by the System under this Article shall
24 terminate on the date that participation in the self-managed
25 plan begins.
26     An employee who has elected to participate in the

 

 

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1 self-managed plan under this Section must continue
2 participation while employed in an eligible position, and may
3 not participate in any other retirement program administered by
4 the System under this Article while employed by that employer
5 or any other employer that has adopted the self-managed plan,
6 unless the self-managed plan is terminated in accordance with
7 subsection (i).
8     Notwithstanding any other provision of this Article, for a
9 participant who first becomes a participant under this Article
10 after January 1, 2011, any portion of the participant's yearly
11 salary that exceeds the Social Security Covered Wage Base for
12 that year shall be subject to the self-managed plan created
13 under this Section.
14     Participation in the self-managed plan under this Section
15 shall constitute membership in the State Universities
16 Retirement System.
17     A participant under this Section shall be entitled to the
18 benefits of Article 20 of this Code.
19     (f) Establishment of Initial Account Balance. If at the
20 time an employee elects to participate in the self-managed plan
21 he or she has rights and credits in the System due to previous
22 participation in the traditional benefit package, the System
23 shall establish for the employee an opening account balance in
24 the self-managed plan, equal to the amount of contribution
25 refund that the employee would be eligible to receive under
26 Section 15-154 if the employee terminated employment on that

 

 

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1 date and elected a refund of contributions, except that this
2 hypothetical refund shall include interest at the effective
3 rate for the respective years. The System shall transfer assets
4 from the defined benefit retirement program to the self-managed
5 plan, as a tax free transfer in accordance with Internal
6 Revenue Service guidelines, for purposes of funding the
7 employee's opening account balance.
8     (g) No Duplication of Service Credit. Notwithstanding any
9 other provision of this Article, an employee may not purchase
10 or receive service or service credit applicable to any other
11 retirement program administered by the System under this
12 Article for any period during which the employee was a
13 participant in the self-managed plan established under this
14 Section.
15     (h) Contributions. The self-managed plan shall be funded by
16 contributions from employees participating in the self-managed
17 plan and employer contributions as provided in this Section.
18     The contribution rate for employees participating in the
19 self-managed plan under this Section shall be equal to the
20 employee contribution rate for other participants in the
21 System, as provided in Section 15-157. This required
22 contribution shall be made as an "employer pick-up" under
23 Section 414(h) of the Internal Revenue Code of 1986 or any
24 successor Section thereof. Any employee participating in the
25 System's traditional benefit package prior to his or her
26 election to participate in the self-managed plan shall continue

 

 

09600HB5872ham001 - 22 - LRB096 20604 AMC 37580 a

1 to have the employer pick up the contributions required under
2 Section 15-157. However, the amounts picked up after the
3 election of the self-managed plan shall be remitted to and
4 treated as assets of the self-managed plan. In no event shall
5 an employee have an option of receiving these amounts in cash.
6 Employees may make additional contributions to the
7 self-managed plan in accordance with procedures prescribed by
8 the System, to the extent permitted under rules prescribed by
9 the System.
10     The program shall provide for employer contributions to be
11 credited to each self-managed plan participant at a rate of
12 7.6% of the participating employee's salary, less the amount
13 used by the System to provide disability benefits for the
14 employee. The amounts so credited shall be paid into the
15 participant's self-managed plan accounts in a manner to be
16 prescribed by the System.
17     An amount of employer contribution, not exceeding 1% of the
18 participating employee's salary, shall be used for the purpose
19 of providing the disability benefits of the System to the
20 employee. Prior to the beginning of each plan year under the
21 self-managed plan, the Board of Trustees shall determine, as a
22 percentage of salary, the amount of employer contributions to
23 be allocated during that plan year for providing disability
24 benefits for employees in the self-managed plan.
25     The State of Illinois shall make contributions by
26 appropriations to the System of the employer contributions

 

 

09600HB5872ham001 - 23 - LRB096 20604 AMC 37580 a

1 required for employees who participate in the self-managed plan
2 under this Section. The amount required shall be certified by
3 the Board of Trustees of the System and paid by the State in
4 accordance with Section 15-165. The System shall not be
5 obligated to remit the required employer contributions to any
6 of the insurance and annuity companies, mutual fund companies,
7 banks, trust companies, financial institutions, or other
8 sponsors of any of the funding vehicles offered under the
9 self-managed plan until it has received the required employer
10 contributions from the State. In the event of a deficiency in
11 the amount of State contributions, the System shall implement
12 those procedures described in subsection (c) of Section 15-165
13 to obtain the required funding from the General Revenue Fund.
14     (i) Termination. The self-managed plan authorized under
15 this Section may be terminated by the System, subject to the
16 terms of any relevant contracts, and the System shall have no
17 obligation to reestablish the self-managed plan under this
18 Section. This Section does not create a right to continued
19 participation in any self-managed plan set up by the System
20 under this Section. If the self-managed plan is terminated, the
21 participants shall have the right to participate in one of the
22 other retirement programs offered by the System and receive
23 service credit in such other retirement program for any years
24 of employment following the termination.
25     (j) Vesting; Withdrawal; Return to Service. A participant
26 in the self-managed plan becomes vested in the employer

 

 

09600HB5872ham001 - 24 - LRB096 20604 AMC 37580 a

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

 

 

09600HB5872ham001 - 25 - LRB096 20604 AMC 37580 a

1 terminates employment, the employee shall be entitled to a
2 benefit based solely on the account values attributable to the
3 employee's contributions and any investment return thereon,
4 and the employer contributions and any investment return
5 thereon shall be forfeited. Any employer contributions which
6 are forfeited shall be held in escrow by the company investing
7 those contributions and shall be used as directed by the System
8 for future allocations of employer contributions or for the
9 restoration of amounts previously forfeited by former
10 participants who again become participating employees.
11 (Source: P.A. 93-347, eff. 7-24-03.)
 
12     (40 ILCS 5/16-122.2 new)
13     Sec. 16-122.2. Traditional benefit package. "Traditional
14 benefit package" means the defined benefit retirement program
15 maintained by the System, which includes retirement annuities
16 payable directly from the System, as provided in Sections
17 16-132, 16-133, 16-133.1, and 16-136; survivor's annuities
18 payable directly from the System, as provided in Sections
19 16-140, 16-141, 16-142, 16-142.1, 16-142.2, 16-142.3, 16-143,
20 and 16-143.1; and contribution refunds, as provided in Section
21 16-151.
 
22     (40 ILCS 5/16-122.3 new)
23     Sec. 16-122.3. Self-managed plan. "Self-managed plan"
24 means the defined contribution retirement program maintained

 

 

09600HB5872ham001 - 26 - LRB096 20604 AMC 37580 a

1 by the System, as described in Section 16-158.2. The
2 self-managed plan does not include retirement annuities or
3 survivor's benefits payable directly from the System, as
4 provided in Sections 16-132, 16-133, 16-133.1, 16-136, 16-140,
5 16-141, 16-142, 16-142.1, 16-142.2, 16-142.3, 16-143, and
6 16-143.1 or refunds determined under Section 16-151.
 
7     (40 ILCS 5/16-152)  (from Ch. 108 1/2, par. 16-152)
8     Sec. 16-152. Contributions by members.
9     (a) Each member shall make contributions for membership
10 service to this System as follows:
11         (1) Effective July 1, 1998, contributions of 7.50% of
12     salary towards the cost of the retirement annuity. Such
13     contributions shall be deemed "normal contributions".
14         (2) Effective July 1, 1969, contributions of 1/2 of 1%
15     of salary toward the cost of the automatic annual increase
16     in retirement annuity provided under Section 16-133.1.
17         (3) Effective July 24, 1959, contributions of 1% of
18     salary towards the cost of survivor benefits. Such
19     contributions shall not be credited to the individual
20     account of the member and shall not be subject to refund
21     except as provided under Section 16-143.2.
22         (4) Effective July 1, 2005, contributions of 0.40% of
23     salary toward the cost of the early retirement without
24     discount option provided under Section 16-133.2. This
25     contribution shall cease upon termination of the early

 

 

09600HB5872ham001 - 27 - LRB096 20604 AMC 37580 a

1     retirement without discount option as provided in Section
2     16-176.
3     (b) The minimum required contribution for any year of
4 full-time teaching service shall be $192.
5     (c) Contributions shall not be required of any annuitant
6 receiving a retirement annuity who is given employment as
7 permitted under Section 16-118 or 16-150.1.
8     (d) A person who (i) was a member before July 1, 1998, (ii)
9 retires with more than 34 years of creditable service, and
10 (iii) does not elect to qualify for the augmented rate under
11 Section 16-129.1 shall be entitled, at the time of retirement,
12 to receive a partial refund of contributions made under this
13 Section for service occurring after the later of June 30, 1998
14 or attainment of 34 years of creditable service, in an amount
15 equal to 1.00% of the salary upon which those contributions
16 were based.
17     (e) A member's contributions toward the cost of early
18 retirement without discount made under item (a)(4) of this
19 Section shall not be refunded if the member has elected early
20 retirement without discount under Section 16-133.2 and has
21 begun to receive a retirement annuity under this Article
22 calculated in accordance with that election. Otherwise, a
23 member's contributions toward the cost of early retirement
24 without discount made under item (a)(4) of this Section shall
25 be refunded according to whichever one of the following
26 circumstances occurs first:

 

 

09600HB5872ham001 - 28 - LRB096 20604 AMC 37580 a

1         (1) The contributions shall be refunded to the member,
2     without interest, within 120 days after the member's
3     retirement annuity commences, if the member does not elect
4     early retirement without discount under Section 16-133.2.
5         (2) The contributions shall be included, without
6     interest, in any refund claimed by the member under Section
7     16-151.
8         (3) The contributions shall be refunded to the member's
9     designated beneficiary (or if there is no beneficiary, to
10     the member's estate), without interest, if the member dies
11     without having begun to receive a retirement annuity under
12     this Article.
13         (4) The contributions shall be refunded to the member,
14     without interest, within 120 days after the early
15     retirement without discount option provided under Section
16     16-133.2 is terminated under Section 16-176.
17     (c) Notwithstanding any provision in this Section to the
18 contrary, for a member who (1) first becomes a member under
19 this Article after January 1, 2011 or (2) is a member of the
20 System on January 1, 2011 and becomes employed in a contractual
21 position with the governing board after January 1, 2011, any
22 contributions on amounts in excess of the Social Security
23 Covered Wage Base for that year, including the contributions
24 for a survivor's annuity, shall instead be used to finance the
25 benefits under Section 16-158.2.
26 (Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
 

 

 

09600HB5872ham001 - 29 - LRB096 20604 AMC 37580 a

1     (40 ILCS 5/16-158.2 new)
2     Sec. 16-158.2. Self-managed plan.
3     (a) The Teachers' Retirement System of the State of
4 Illinois must establish and administer a self-managed plan that
5 shall offer participants the opportunity to accumulate assets
6 for retirement through a combination of participant and State
7 contributions that may be invested in mutual funds, collective
8 investment funds, or other investment products and used to
9 purchase annuity contracts, either fixed or variable or a
10 combination of fixed and variable. The plan must be qualified
11 under the Internal Revenue Code of 1986.
12     The Teachers' Retirement System of the State of Illinois
13 shall be the plan sponsor for the self-managed plan and shall
14 prepare a plan document and adopt any rules and procedures as
15 are considered necessary or desirable for the administration of
16 the self-managed plan. Consistent with its fiduciary duty to
17 the participants and beneficiaries of the self-managed plan,
18 the Board of Trustees of the System may delegate aspects of
19 plan administration as it sees fit to companies authorized to
20 do business in this State.
21     (b) Notwithstanding any other provision of this Article,
22 for a member who (1) first becomes a member under this Article
23 after January 1, 2011 or (2) is a member of the System on
24 January 1, 2011 and becomes employed in a contractual position
25 with the governing board after January 1, 2011, any portion of

 

 

09600HB5872ham001 - 30 - LRB096 20604 AMC 37580 a

1 the member's yearly salary that exceeds the Social Security
2 Covered Wage Base for that year shall be subject to the
3 self-managed plan created under this Section.
4     (c) The System shall solicit proposals to provide
5 administrative services and funding vehicles for the
6 self-managed plan from insurance and annuity companies and
7 mutual fund companies, banks, trust companies, or other
8 financial institutions authorized to do business in this State.
9 In reviewing the proposals received and approving and
10 contracting with no fewer than 2 and no more than 7 companies,
11 the Board of Trustees of the System shall consider, among other
12 things, the following criteria:
13         (1) the nature and extent of the benefits that would be
14     provided to the participants;
15         (2) the reasonableness of the benefits in relation to
16     the premium charged;
17         (3) the suitability of the benefits to the needs and
18     interests of the participants and the State; and
19         (4) the ability of the company to provide benefits
20     under the contract and the financial stability of the
21     company.
22     The System shall periodically review each approved
23 company. A company may continue to provide administrative
24 services and funding vehicles for the self-managed plan only so
25 long as it continues to be an approved company under contract
26 with the Board.

 

 

09600HB5872ham001 - 31 - LRB096 20604 AMC 37580 a

1     In addition to the companies approved by the System under
2 this subsection (c), the System may offer its participants an
3 investment fund managed by the Illinois State Board of
4 Investment.
5     (d) Participants in the program must be allowed to direct
6 the transfer of their account balances among the various
7 investment options offered, subject to applicable contractual
8 provisions. The participant shall not be deemed a fiduciary by
9 reason of providing such investment direction. A person who is
10 a fiduciary shall not be liable for any loss resulting from
11 that investment direction and shall not be deemed to have
12 breached any fiduciary duty by acting in accordance with that
13 direction. Neither the System nor the State shall guarantee any
14 of the investments in the participant's account balances.
15     (e) Participation in the self-managed plan under this
16 Section shall constitute participation in the Teachers'
17 Retirement System of the State of Illinois.
18     (f) The self-managed plan shall be funded by contributions
19 from participants in the self-managed plan and State
20 contributions as provided in this Section.
21     The contribution rate for participants in the self-managed
22 plan under this Section shall be equal to the member
23 contribution rate for other participants in the System, as
24 provided in Section 16-152. This required contribution shall be
25 made as an employer pick-up under Section 414(h) of the
26 Internal Revenue Code of 1986 or any successor Section thereof.

 

 

09600HB5872ham001 - 32 - LRB096 20604 AMC 37580 a

1 Any participant in the System's traditional benefit package
2 prior to his or her election to participate in the self-managed
3 plan shall continue to have the employer pick up the
4 contributions required under Section 16-152. However, the
5 amounts picked up after the election of the self-managed plan
6 shall be remitted to and treated as assets of the self-managed
7 plan. In no event shall a participant have the option of
8 receiving these amounts in cash. Participants may make
9 additional contributions to the self-managed plan in
10 accordance with procedures prescribed by the System, to the
11 extent permitted under rules adopted by the System.
12     The program shall provide for State contributions to be
13 credited to each self-managed plan participant in an amount
14 equal to the employee contributions required under this
15 Section.
16     The State of Illinois shall make contributions by
17 appropriations to the System for participants in the
18 self-managed plan under this Section. The amount required shall
19 be certified by the Board of Trustees of the System and paid by
20 the State in accordance with Section 16-158. The System shall
21 not be obligated to remit the required State contributions to
22 any of the insurance and annuity companies, mutual fund
23 companies, banks, trust companies, financial institutions, or
24 other sponsors of any of the funding vehicles offered under the
25 self-managed plan until it has received the required State
26 contributions from the State.

 

 

09600HB5872ham001 - 33 - LRB096 20604 AMC 37580 a

1     (g) If a participant in the self-managed plan who is
2 otherwise vested under this Article terminates employment, the
3 participant shall be entitled to a benefit that is based on the
4 account values attributable to both State and member
5 contributions and any investment return thereon.
6     If a participant in the self-managed plan who is not
7 otherwise vested under this Article terminates employment, the
8 participant shall be entitled to a benefit based solely on the
9 account values attributable to the participant's contributions
10 and any investment return thereon, and the State contributions
11 and any investment return thereon shall be forfeited. Any State
12 contributions that are forfeited shall be held in escrow by the
13 company investing those contributions and shall be used, as
14 directed by the System, for future allocations of State
15 contributions.
 
16     (40 ILCS 5/18-118.1 new)
17     Sec. 18-118.1. Traditional benefit package. "Traditional
18 benefit package" means the defined benefit retirement program
19 maintained by the System, which includes retirement annuities
20 payable directly from the System, as provided in Sections
21 18-124, 18-125, and 18-125.1; survivor's annuities payable
22 directly from the System, as provided in Sections 18-128,
23 18-128.01, 18-128.1, 18-128.1, and 18-128.3; and contribution
24 refunds, as provided in Section 18-129.
 

 

 

09600HB5872ham001 - 34 - LRB096 20604 AMC 37580 a

1     (40 ILCS 5/18-118.2 new)
2     Sec. 18-118.2. Self-managed plan. "Self-managed plan"
3 means the defined contribution retirement program maintained
4 by the System, as described in Section 18-133.2. The
5 self-managed plan does not include retirement annuities or
6 survivor's benefits payable directly from the System, as
7 provided in Sections 18-124, 18-125, 18-125.1, 18-128,
8 18-128.01, 18-128.1, 18-128.1, and 18-128.3 or refunds
9 determined under Section 18-129.
 
10     (40 ILCS 5/18-133)  (from Ch. 108 1/2, par. 18-133)
11     Sec. 18-133. Financing; employee contributions.
12     (a) Effective July 1, 1967, each participant is required to
13 contribute 7 1/2% of each payment of salary toward the
14 retirement annuity. Such contributions shall continue during
15 the entire time the participant is in service, with the
16 following exceptions:
17         (1) Contributions for the retirement annuity are not
18     required on salary received after 18 years of service by
19     persons who were participants before January 2, 1954.
20         (2) A participant who continues to serve as a judge
21     after becoming eligible to receive the maximum rate of
22     annuity may elect, through a written direction filed with
23     the Board, to discontinue contributing to the System. Any
24     such option elected by a judge shall be irrevocable unless
25     prior to January 1, 2000, and while continuing to serve as

 

 

09600HB5872ham001 - 35 - LRB096 20604 AMC 37580 a

1     judge, the judge (A) files with the Board a letter
2     cancelling the direction to discontinue contributing to
3     the System and requesting that such contributing resume,
4     and (B) pays into the System an amount equal to the total
5     of the discontinued contributions plus interest thereon at
6     5% per annum. Service credits earned in any other
7     "participating system" as defined in Article 20 of this
8     Code shall be considered for purposes of determining a
9     judge's eligibility to discontinue contributions under
10     this subdivision (a)(2).
11         (3) A participant who (i) has attained age 60, (ii)
12     continues to serve as a judge after becoming eligible to
13     receive the maximum rate of annuity, and (iii) has not
14     elected to discontinue contributing to the System under
15     subdivision (a)(2) of this Section (or has revoked any such
16     election) may elect, through a written direction filed with
17     the Board, to make contributions to the System based only
18     on the amount of the increases in salary received by the
19     judge on or after the date of the election, rather than the
20     total salary received. If a judge who is making
21     contributions to the System on the effective date of this
22     amendatory Act of the 91st General Assembly makes an
23     election to limit contributions under this subdivision
24     (a)(3) within 90 days after that effective date, the
25     election shall be deemed to become effective on that
26     effective date and the judge shall be entitled to receive a

 

 

09600HB5872ham001 - 36 - LRB096 20604 AMC 37580 a

1     refund of any excess contributions paid to the System
2     during that 90-day period; any other election under this
3     subdivision (a)(3) becomes effective on the first of the
4     month following the date of the election. An election to
5     limit contributions under this subdivision (a)(3) is
6     irrevocable. Service credits earned in any other
7     participating system as defined in Article 20 of this Code
8     shall be considered for purposes of determining a judge's
9     eligibility to make an election under this subdivision
10     (a)(3).
11     (b) Beginning July 1, 1969, each participant is required to
12 contribute 1% of each payment of salary towards the automatic
13 increase in annuity provided in Section 18-125.1. However, such
14 contributions need not be made by any participant who has
15 elected prior to September 15, 1969, not to be subject to the
16 automatic increase in annuity provisions.
17     (c) Effective July 13, 1953, each married participant
18 subject to the survivor's annuity provisions is required to
19 contribute 2 1/2% of each payment of salary, whether or not he
20 or she is required to make any other contributions under this
21 Section. Such contributions shall be made concurrently with the
22 contributions made for annuity purposes.
23     (d) Notwithstanding any provision in this Section to the
24 contrary, for a participant who first becomes a participant
25 under this Article after January 1, 2011, any contributions on
26 amounts in excess of the Social Security Covered Wage Base for

 

 

09600HB5872ham001 - 37 - LRB096 20604 AMC 37580 a

1 that year, including the contributions for a survivor's
2 annuity, shall instead be used to finance the benefits under
3 Section 18-133.2.
4 (Source: P.A. 91-653, eff. 12-10-99.)
 
5     (40 ILCS 5/18-133.2 new)
6     Sec. 18-133.2. Self-managed plan.
7     (a) The Judges Retirement System of Illinois must establish
8 and administer a self-managed plan that shall offer
9 participants the opportunity to accumulate assets for
10 retirement through a combination of participant and State
11 contributions that may be invested in mutual funds, collective
12 investment funds, or other investment products and used to
13 purchase annuity contracts, either fixed or variable or a
14 combination of fixed and variable. The plan must be qualified
15 under the Internal Revenue Code of 1986.
16     The Judges Retirement System of Illinois shall be the plan
17 sponsor for the self-managed plan and shall prepare a plan
18 document and adopt any rules and procedures as are considered
19 necessary or desirable for the administration of the
20 self-managed plan. Consistent with its fiduciary duty to the
21 participants and beneficiaries of the self-managed plan, the
22 Board of Trustees of the System may delegate aspects of plan
23 administration as it sees fit to companies authorized to do
24 business in this State.
25     (b) Notwithstanding any other provision of this Article,

 

 

09600HB5872ham001 - 38 - LRB096 20604 AMC 37580 a

1 for a participant who first becomes a participant under this
2 Article after January 1, 2011, any portion of the participant's
3 yearly salary that exceeds the Social Security Covered Wage
4 Base for that year shall be subject to the self-managed plan
5 created under this Section.
6     (c) The System shall solicit proposals to provide
7 administrative services and funding vehicles for the
8 self-managed plan from insurance and annuity companies and
9 mutual fund companies, banks, trust companies, or other
10 financial institutions authorized to do business in this State.
11 In reviewing the proposals received and approving and
12 contracting with no fewer than 2 and no more than 7 companies,
13 the Board of Trustees of the System shall consider, among other
14 things, the following criteria:
15         (1) the nature and extent of the benefits that would be
16     provided to the participants;
17         (2) the reasonableness of the benefits in relation to
18     the premium charged;
19         (3) the suitability of the benefits to the needs and
20     interests of the participants and the State; and
21         (4) the ability of the company to provide benefits
22     under the contract and the financial stability of the
23     company.
24     The System shall periodically review each approved
25 company. A company may continue to provide administrative
26 services and funding vehicles for the self-managed plan only so

 

 

09600HB5872ham001 - 39 - LRB096 20604 AMC 37580 a

1 long as it continues to be an approved company under contract
2 with the Board.
3     In addition to the companies approved by the System under
4 this subsection (c), the System may offer its participants an
5 investment fund managed by the Illinois State Board of
6 Investment.
7     (d) Participants in the program must be allowed to direct
8 the transfer of their account balances among the various
9 investment options offered, subject to applicable contractual
10 provisions. The participant shall not be deemed a fiduciary by
11 reason of providing such investment direction. A person who is
12 a fiduciary shall not be liable for any loss resulting from
13 that investment direction and shall not be deemed to have
14 breached any fiduciary duty by acting in accordance with that
15 direction. Neither the System nor the State shall guarantee any
16 of the investments in the participant's account balances.
17     (e) Participation in the self-managed plan under this
18 Section shall constitute participation in the Judges
19 Retirement System of Illinois.
20     (f) The self-managed plan shall be funded by contributions
21 from participants in the self-managed plan and State
22 contributions as provided in this Section.
23     The contribution rate for participants in the self-managed
24 plan under this Section shall be equal to the member
25 contribution rate for other participants in the System, as
26 provided in Section 18-133. This required contribution shall be

 

 

09600HB5872ham001 - 40 - LRB096 20604 AMC 37580 a

1 made as an employer pick-up under Section 414(h) of the
2 Internal Revenue Code of 1986 or any successor Section thereof.
3 Any participant in the System's traditional benefit package
4 prior to his or her election to participate in the self-managed
5 plan shall continue to have the employer pick up the
6 contributions required under Section 18-133. However, the
7 amounts picked up after the election of the self-managed plan
8 shall be remitted to and treated as assets of the self-managed
9 plan. In no event shall a participant have the option of
10 receiving these amounts in cash. Participants may make
11 additional contributions to the self-managed plan in
12 accordance with procedures prescribed by the System, to the
13 extent permitted under rules adopted by the System.
14     The program shall provide for State contributions to be
15 credited to each self-managed plan participant in an amount
16 equal to the employee contributions required under this
17 Section.
18     The State of Illinois shall make contributions by
19 appropriations to the System for participants in the
20 self-managed plan under this Section. The amount required shall
21 be certified by the Board of Trustees of the System and paid by
22 the State in accordance with Sections 18-132 and 18-140. The
23 System shall not be obligated to remit the required State
24 contributions to any of the insurance and annuity companies,
25 mutual fund companies, banks, trust companies, financial
26 institutions, or other sponsors of any of the funding vehicles

 

 

09600HB5872ham001 - 41 - LRB096 20604 AMC 37580 a

1 offered under the self-managed plan until it has received the
2 required State contributions from the State.
3     (g) If a participant in the self-managed plan who is
4 otherwise vested under this Article terminates employment, the
5 participant shall be entitled to a benefit that is based on the
6 account values attributable to both State and member
7 contributions and any investment return thereon.
8     If a participant in the self-managed plan who is not
9 otherwise vested under this Article terminates employment, the
10 participant shall be entitled to a benefit based solely on the
11 account values attributable to the participant's contributions
12 and any investment return thereon, and the State contributions
13 and any investment return thereon shall be forfeited. Any State
14 contributions that are forfeited shall be held in escrow by the
15 company investing those contributions and shall be used, as
16 directed by the System, for future allocations of State
17 contributions.
 
18     Section 99. Effective date. This Act takes effect upon
19 becoming law.".