97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5063

 

Introduced 2/7/2012, by Rep. Raymond Poe

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
30 ILCS 805/8.36 new

    Amends the General Provisions Article of the Illinois Pension Code. In provisions that are applicable to certain new hires: (i) reduces the minimum age at which a participant is entitled to an unreduced retirement annuity and the annual increases in retirement annuity from 67 to 62, and (ii) removes provisions concerning entitlement to a reduced retirement annuity at age 62. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.


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

 

 

A BILL FOR

 

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1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Section 1-160 as follows:
 
6    (40 ILCS 5/1-160)
7    Sec. 1-160. Provisions applicable to new hires.
8    (a) The provisions of this Section apply to a person who,
9on or after January 1, 2011, first becomes a member or a
10participant under any reciprocal retirement system or pension
11fund established under this Code, other than a retirement
12system or pension fund established under Article 2, 3, 4, 5, 6,
13or 18 of this Code, notwithstanding any other provision of this
14Code to the contrary, but do not apply to any self-managed plan
15established under this Code, to any person with respect to
16service as a sheriff's law enforcement employee under Article
177, or to any participant of the retirement plan established
18under Section 22-101.
19    (b) "Final average salary" means the average monthly (or
20annual) salary obtained by dividing the total salary or
21earnings calculated under the Article applicable to the member
22or participant during the 96 consecutive months (or 8
23consecutive years) of service within the last 120 months (or 10

 

 

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

 

 

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1percentage increase (but not less than zero) in the consumer
2price index-u for the 12 months ending with the September
3preceding each November 1, including all previous adjustments.
4    For the purposes of this Section, "consumer price index-u"
5means the index published by the Bureau of Labor Statistics of
6the United States Department of Labor that measures the average
7change in prices of goods and services purchased by all urban
8consumers, United States city average, all items, 1982-84 =
9100. The new amount resulting from each annual adjustment shall
10be determined by the Public Pension Division of the Department
11of Insurance and made available to the boards of the retirement
12systems and pension funds by November 1 of each year.
13    (c) A member or participant is entitled to a retirement
14annuity upon written application if he or she has attained age
1562 67 and has at least 10 years of service credit and is
16otherwise eligible under the requirements of the applicable
17Article.
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) (Blank). The retirement annuity of a member or
24participant who is retiring after attaining age 62 with at
25least 10 years of service credit shall be reduced by one-half
26of 1% for each full month that the member's age is under age

 

 

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167.
2    (e) Any retirement annuity or supplemental annuity shall be
3subject to annual increases on the January 1 occurring either
4on or after the attainment of age 62 67 or the first
5anniversary of the annuity start date, whichever is later. Each
6annual 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 retirement 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    (f) The initial survivor's or widow's annuity of an
16otherwise eligible survivor or widow of a retired member or
17participant who first became a member or participant on or
18after January 1, 2011 shall be in the amount of 66 2/3% of the
19retired member's or participant's retirement annuity at the
20date of death. In the case of the death of a member or
21participant who has not retired and who first became a member
22or participant on or after January 1, 2011, eligibility for a
23survivor's or widow's annuity shall be determined by the
24applicable Article of this Code. The initial benefit shall be
2566 2/3% of the earned annuity without a reduction due to age. A
26child's annuity of an otherwise eligible child shall be in the

 

 

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1amount prescribed under each Article if applicable. Any
2survivor's or widow's annuity shall be increased (1) on each
3January 1 occurring on or after the commencement of the annuity
4if the deceased member died while receiving a retirement
5annuity or (2) in other cases, on each January 1 occurring
6after the first anniversary of the commencement of the annuity.
7Each annual increase shall be calculated at 3% or one-half the
8annual unadjusted percentage increase (but not less than zero)
9in the consumer price index-u for the 12 months ending with the
10September preceding each November 1, whichever is less, of the
11originally granted survivor's annuity. If the annual
12unadjusted percentage change in the consumer price index-u for
13the 12 months ending with the September preceding each November
141 is zero or there is a decrease, then the annuity shall not be
15increased.
16    (g) The benefits in Section 14-110 apply only if the person
17is a State policeman, a fire fighter in the fire protection
18service of a department, or a security employee of the
19Department of Corrections or the Department of Juvenile
20Justice, as those terms are defined in subsection (b) of
21Section 14-110. A person who meets the requirements of this
22Section is entitled to an annuity calculated under the
23provisions of Section 14-110, in lieu of the regular or minimum
24retirement annuity, only if the person has withdrawn from
25service with not less than 20 years of eligible creditable
26service and has attained age 60, regardless of whether the

 

 

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1attainment of age 60 occurs while the person is still in
2service.
3    (h) If a person who first becomes a member or a participant
4of a retirement system or pension fund subject to this Section
5on or after January 1, 2011 is receiving a retirement annuity
6or retirement pension under that system or fund and becomes a
7member or participant under any other system or fund created by
8this Code and is employed on a full-time basis, except for
9those members or participants exempted from the provisions of
10this Section under subsection (a) of this Section, then the
11person's retirement annuity or retirement pension under that
12system or fund shall be suspended during that employment. Upon
13termination of that employment, the person's retirement
14annuity or retirement pension payments shall resume and be
15recalculated if recalculation is provided for under the
16applicable Article of this Code.
17    If a person who first becomes a member of a retirement
18system or pension fund subject to this Section on or after
19January 1, 2012 and is receiving a retirement annuity or
20retirement pension under that system or fund and accepts on a
21contractual basis a position to provide services to a
22governmental entity from which he or she has retired, then that
23person's annuity or retirement pension earned as an active
24employee of the employer shall be suspended during that
25contractual service. A person receiving an annuity or
26retirement pension under this Code shall notify the pension

 

 

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1fund or retirement system from which he or she is receiving an
2annuity or retirement pension, as well as his or her
3contractual employer, of his or her retirement status before
4accepting contractual employment. A person who fails to submit
5such notification shall be guilty of a Class A misdemeanor and
6required to pay a fine of $1,000. Upon termination of that
7contractual employment, the person's retirement annuity or
8retirement pension payments shall resume and, if appropriate,
9be recalculated under the applicable provisions of this Code.
10    (i) Notwithstanding any other provision of this Section, a
11person who first becomes a participant of the retirement system
12established under Article 15 on or after January 1, 2011 shall
13have the option to enroll in the self-managed plan created
14under Section 15-158.2 of this Code.
15    (j) In the case of a conflict between the provisions of
16this Section and any other provision of this Code, the
17provisions of this Section shall control.
18(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
1997-609, eff. 1-1-12.)
 
20    Section 90. The State Mandates Act is amended by adding
21Section 8.36 as follows:
 
22    (30 ILCS 805/8.36 new)
23    Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8
24of this Act, no reimbursement by the State is required for the

 

 

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1implementation of any mandate created by this amendatory Act of
2the 97th General Assembly.
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.