96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB6961

 

Introduced , by Rep. Karen May

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
40 ILCS 5/1-170 new
40 ILCS 5/7-116  from Ch. 108 1/2, par. 7-116
30 ILCS 805/8.34 new

    Amends the Illinois Pension Code. Provides that if certain persons are receiving a retirement annuity or pension and accept a contractual position covered under the Code, then their annuity or pension will be suspended. In provisions concerning the Illinois Municipal Retirement Fund, prohibits overtime, vehicle allowances, and lump sum payments for sick or vacation time from being considered in the final rate of earnings. Amends the State Mandates Act to require implementation without reimbursement. Effective January 1, 2012.


LRB096 24794 JDS 44931 b

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

 

 

A BILL FOR

 

HB6961LRB096 24794 JDS 44931 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 1-160 and 7-116 and by adding Section 1-170 as
6follows:
 
7    (40 ILCS 5/1-160)
8    Sec. 1-160. Provisions applicable to new hires.
9    (a) The provisions of this Section apply to a person who,
10on or after January 1, 2011, first becomes a member or a
11participant under any reciprocal retirement system or pension
12fund established under this Code, other than a retirement
13system or pension fund established under Article 2, 3, 4, 5, 6,
14or 18 of this Code, notwithstanding any other provision of this
15Code to the contrary, but do not apply to any self-managed plan
16established under this Code, to any person with respect to
17service as a sheriff's law enforcement employee under Article
187, or to any participant of the retirement plan established
19under Section 22-101.
20    (b) "Final average salary" means the average monthly (or
21annual) salary obtained by dividing the total salary or
22earnings calculated under the Article applicable to the member
23or participant during the 96 consecutive months (or 8

 

 

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1consecutive years) of service within the last 120 months (or 10
2years) of service in which the total salary or earnings
3calculated under the applicable Article was the highest by the
4number of months (or years) of service in that period. For the
5purposes of a person who first becomes a member or participant
6of any retirement system or pension fund to which this Section
7applies on or after January 1, 2011, in this Code, "final
8average salary" shall be substituted for the following:
9        (1) In Articles 7 (except for service as sheriff's law
10    enforcement employees) and 15, "final rate of earnings".
11        (2) In Articles 8, 9, 10, 11, and 12, "highest average
12    annual salary for any 4 consecutive years within the last
13    10 years of service immediately preceding the date of
14    withdrawal".
15        (3) In Article 13, "average final salary".
16        (4) In Article 14, "final average compensation".
17        (5) In Article 17, "average salary".
18        (6) In Section 22-207, "wages or salary received by him
19    at the date of retirement or discharge".
20    (b-5) Beginning on January 1, 2011, for all purposes under
21this Code (including without limitation the calculation of
22benefits and employee contributions), the annual earnings,
23salary, or wages (based on the plan year) of a member or
24participant to whom this Section applies shall not exceed
25$106,800; however, that amount shall annually thereafter be
26increased by the lesser of (i) 3% of that amount, including all

 

 

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1previous adjustments, or (ii) one-half the annual unadjusted
2percentage increase (but not less than zero) in the consumer
3price index-u for the 12 months ending with the September
4preceding each November 1, including all previous adjustments.
5    For the purposes of this Section, "consumer price index-u"
6means the index published by the Bureau of Labor Statistics of
7the United States Department of Labor that measures the average
8change in prices of goods and services purchased by all urban
9consumers, United States city average, all items, 1982-84 =
10100. The new amount resulting from each annual adjustment shall
11be determined by the Public Pension Division of the Department
12of Insurance and made available to the boards of the retirement
13systems and pension funds by November 1 of each year.
14    (c) A member or participant is entitled to a retirement
15annuity upon written application if he or she has attained age
1667 and has at least 10 years of service credit and is otherwise
17eligible under the requirements of the applicable Article.
18    A member or participant who has attained age 62 and has at
19least 10 years of service credit and is otherwise eligible
20under the requirements of the applicable Article may elect to
21receive the lower retirement annuity provided in subsection (d)
22of this Section.
23    (d) The retirement annuity of a member or participant who
24is retiring after attaining age 62 with at least 10 years of
25service credit shall be reduced by one-half of 1% for each full
26month that the member's age is under age 67.

 

 

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1    (e) Any retirement annuity or supplemental annuity shall be
2subject to annual increases on the January 1 occurring either
3on or after the attainment of age 67 or the first anniversary
4of the annuity start date, whichever is later. Each annual
5increase shall be calculated at 3% or one-half the annual
6unadjusted percentage increase (but not less than zero) in the
7consumer price index-u for the 12 months ending with the
8September preceding each November 1, whichever is less, of the
9originally granted retirement annuity. If the annual
10unadjusted percentage change in the consumer price index-u for
11the 12 months ending with the September preceding each November
121 is zero or there is a decrease, then the annuity shall not be
13increased.
14    (f) The initial survivor's or widow's annuity of an
15otherwise eligible survivor or widow of a retired member or
16participant who first became a member or participant on or
17after January 1, 2011 shall be in the amount of 66 2/3% of the
18retired member's or participant's retirement annuity at the
19date of death. In the case of the death of a member or
20participant who has not retired and who first became a member
21or participant on or after January 1, 2011, eligibility for a
22survivor's or widow's annuity shall be determined by the
23applicable Article of this Code. The initial benefit shall be
2466 2/3% of the earned annuity without a reduction due to age. A
25child's annuity of an otherwise eligible child shall be in the
26amount prescribed under each Article if applicable. Any

 

 

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1survivor's or widow's annuity shall be increased (1) on each
2January 1 occurring on or after the commencement of the annuity
3if the deceased member died while receiving a retirement
4annuity or (2) in other cases, on each January 1 occurring
5after the first anniversary of the commencement of the annuity.
6Each annual increase shall be calculated at 3% or one-half the
7annual unadjusted percentage increase (but not less than zero)
8in the consumer price index-u for the 12 months ending with the
9September preceding each November 1, whichever is less, of the
10originally granted survivor's annuity. If the annual
11unadjusted percentage change in the consumer price index-u for
12the 12 months ending with the September preceding each November
131 is zero or there is a decrease, then the annuity shall not be
14increased.
15    (g) The benefits in Section 14-110 apply only if the person
16is a State policeman, a fire fighter in the fire protection
17service of a department, or a security employee of the
18Department of Corrections or the Department of Juvenile
19Justice, as those terms are defined in subsection (b) of
20Section 14-110. A person who meets the requirements of this
21Section is entitled to an annuity calculated under the
22provisions of Section 14-110, in lieu of the regular or minimum
23retirement annuity, only if the person has withdrawn from
24service with not less than 20 years of eligible creditable
25service and has attained age 60, regardless of whether the
26attainment of age 60 occurs while the person is still in

 

 

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1service.
2    (h) If a person who first becomes a member or a participant
3of a retirement system or pension fund subject to this Section
4on or after January 1, 2011 is receiving a retirement annuity
5or retirement pension under that system or fund and becomes a
6member or participant under any other system or fund created by
7this Code and is employed on a full-time basis, except for
8those members or participants exempted from the provisions of
9this Section under subsection (a) of this Section, then the
10person's retirement annuity or retirement pension under that
11system or fund shall be suspended during that employment. Upon
12termination of that employment, the person's retirement
13annuity or retirement pension payments shall resume and be
14recalculated if recalculation is provided for under the
15applicable Article of this Code.
16    If a person who first becomes a member of a retirement
17system or pension fund subject to this Section on or after the
18effective date of this amendatory Act of the 96th General
19Assembly is receiving a retirement annuity or retirement
20pension under that system or fund and accepts on a contractual
21basis a position covered under the same Article or any other
22Article of this Code, then the person's retirement annuity or
23retirement pension under that system or fund shall be suspended
24during that employment. Upon termination of that employment,
25the person's retirement annuity or retirement pension payments
26shall resume and, if appropriate, be recalculated under the

 

 

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1applicable provisions of this Code.
2    (i) Notwithstanding any other provision of this Section, a
3person who first becomes a participant of the retirement system
4established under Article 15 on or after January 1, 2011 shall
5have the option to enroll in the self-managed plan created
6under Section 15-158.2 of this Code.
7    (j) In the case of a conflict between the provisions of
8this Section and any other provision of this Code, the
9provisions of this Section shall control.
10(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
11    (40 ILCS 5/1-170 new)
12    Sec. 1-170. Suspension of annuity. If a person who is a
13member or a participant under any reciprocal retirement system
14or pension fund established under this Code (other than a
15retirement system or pension fund established under Article 2,
163, 4, 5, 6, or 18 of this Code), except a sheriff's law
17enforcement employee under Article 7 or any participant of the
18retirement plan established under Section 22-101, is receiving
19a retirement annuity or retirement pension under that system or
20fund and accepts on a contractual basis a position covered
21under the same Article or any other Article of this Code, then
22the person's retirement annuity or retirement pension under
23that system or fund shall be suspended during that employment.
24Upon termination of that employment, the person's retirement
25annuity or retirement pension payments shall resume and, if

 

 

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1appropriate, be recalculated under the applicable provisions
2of this Code.
 
3    (40 ILCS 5/7-116)  (from Ch. 108 1/2, par. 7-116)
4    Sec. 7-116. "Final rate of earnings":
5    (a) For retirement and survivor annuities, the monthly
6earnings obtained by dividing the total earnings received by
7the employee during the period of either (1) the 48 consecutive
8months of service within the last 120 months of service in
9which his total earnings were the highest or (2) the employee's
10total period of service, by the number of months of service in
11such period.
12    (b) For death benefits, the higher of the rate determined
13under paragraph (a) of this Section or total earnings received
14in the last 12 months of service divided by twelve. If the
15deceased employee has less than 12 months of service, the
16monthly final rate shall be the monthly rate of pay the
17employee was receiving when he began service.
18    (c) For disability benefits, the total earnings of a
19participating employee in the last 12 calendar months of
20service prior to the date he becomes disabled divided by 12.
21    (d) In computing the final rate of earnings: (1) the
22earnings rate for all periods of prior service shall be
23considered equal to the average earnings rate for the last 3
24calendar years of prior service for which creditable service is
25received under Section 7-139 or, if there is less than 3 years

 

 

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1of creditable prior service, the average for the total prior
2service period for which creditable service is received under
3Section 7-139; (2) for out of state service and authorized
4leave, the earnings rate shall be the rate upon which service
5credits are granted; (3) periods of military leave shall not be
6considered; (4) the earnings rate for all periods of disability
7shall be considered equal to the rate of earnings upon which
8the employee's disability benefits are computed for such
9periods; (5) the earnings to be considered for each of the
10final three months of the final earnings period shall not
11exceed 125% of the highest earnings of any other month in the
12final earnings period; and (6) the annual amount of final rate
13of earnings shall be the monthly amount multiplied by the
14number of months of service normally required by the position
15in a year; and (7) overtime, vehicle allowances, and lump sum
16payments for sick or vacation time shall not be considered.
17(Source: P.A. 90-448, eff. 8-16-97.)
 
18    Section 90. The State Mandates Act is amended by adding
19Section 8.34 as follows:
 
20    (30 ILCS 805/8.34 new)
21    Sec. 8.34. Exempt mandate. Notwithstanding Sections 6 and 8
22of this Act, no reimbursement by the State is required for the
23implementation of any mandate created by this amendatory Act of
24the 96th General Assembly.
 

 

 

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1    Section 99. Effective date. This Act takes effect January
21, 2012.