98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5557

 

Introduced , by Rep. Thomas Morrison

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-161 new
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124
40 ILCS 5/14-131
40 ILCS 5/15-155  from Ch. 108 1/2, par. 15-155
40 ILCS 5/16-158  from Ch. 108 1/2, par. 16-158
40 ILCS 5/18-131  from Ch. 108 1/2, par. 18-131

    Amends the Illinois Pension Code. With respect to the 5 State-funded retirement systems: Provides a new funding formula for State contributions, with a funding goal of 100% for fiscal years 2016 through 2047 and 90% thereafter. Provides that no additional service credit may be accrued and no automatic increase in a retirement annuity shall be received. Provides that the pensionable salary of an active participant may not exceed that individual's pensionable salary as of the effective date. Provides that State-funded retirement systems shall establish self-directed retirement plans for all active participants and all employees hired on or after the effective date. Provides that all active participants shall have the option of participating in a self-directed retirement plan. Provides that these changes are controlling over any other law. In the Sections that were amended by Public Act 98-599, deletes the changes made by Public Act 98-599.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

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
5Sections 2-124, 14-131, 15-155, 16-158, and 18-131 and by
6adding Section 1-161 as follows:
 
7    (40 ILCS 5/1-161 new)
8    Sec. 1-161. Pension benefits, end of service credit;
9self-directed retirement plans.
10    (a) For the purposes of this Section:
11        "Active participant" means a participant in a
12    State-funded retirement system who does not receive an
13    annuity from a State-funded retirement system.
14        "Annuitant" means a participant in a State-funded
15    retirement system who receives an annuity from a
16    State-funded retirement system.
17        "Automatic increase in retirement annuity" means an
18    automatic increase in retirement annuity granted under
19    Section 1-160 or Article 2, 14, 15, 16, or 18 of this Code.
20        "Consumer price index-u" means the index published by
21    the Bureau of Labor Statistics of the United States
22    Department of Labor that measures the average change in
23    prices of goods and services purchased by all urban

 

 

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1    consumers, United States city average, all items, 1982-84 =
2    100.
3        "Pensionable salary" means the amount of salary,
4    compensation, or earnings used by the applicable
5    State-funded retirement system to calculate the amount of
6    an individual's retirement annuity.
7        "State-funded retirement system" means a retirement
8    system established under Article 2, 14, 15, 16, or 18 of
9    this Code.
10    (b) No active participant may accrue service credit in a
11State-funded retirement system on or after the effective date
12of this amendatory Act of the 98th General Assembly.
13    (c) The pensionable salary of an active participant shall
14not exceed the pensionable salary of that participant as of the
15effective date of this amendatory Act of the 98th General
16Assembly.
17    (d) An annuitant shall not receive an automatic increase in
18retirement annuity on or after the effective date of this
19Section.
20    (e) The retirement age of active participants who are
21ineligible to retire as of the effective date of this
22amendatory Act of the 98th General Assembly shall be increased
23according to a schedule developed by the Public Pension
24Division of the Department of Insurance as soon as practicable
25after the effective date of this amendatory Act of the 98th
26General Assembly. The schedule of retirement ages adopted by

 

 

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1administrative rule of the Division shall, at a minimum, ensure
2(i) that persons who first become active participants on or
3after the effective date of this amendatory Act of the 98th
4General Assembly are not eligible to retire until reaching the
5Social Security Normal Retirement Age and (ii) that persons who
6are active participants but ineligible to retire as of the
7effective date of this amendatory Act of the 98th General
8Assembly remain ineligible to retire until reaching age 59. The
9Division's schedule shall also provide for the adjustment of
10retirement ages using a matrix that accounts for the current
11statutory retirement age for various classes of persons and
12service credit accrued by those persons as of the effective
13date of this amendatory Act of the 98th General Assembly.
14    (f) As soon as practicable after the effective date of this
15amendatory Act of the 98th General Assembly, each State-funded
16retirement system shall establish a self-directed retirement
17plan that allows individuals who are active participants and
18individuals who become active participants on or after the
19effective date of this amendatory Act of the 98th General
20Assembly the opportunity to accumulate assets for retirement
21through a combination of employee and employer contributions
22that may be invested in mutual funds, collective investment
23funds, or other investment products and used to purchase
24annuity contracts, either fixed or variable or a combination
25thereof. The plan must be qualified under the Internal Revenue
26Code of 1986. Participants in the retirement system established

 

 

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1under Article 15 may participate in the self-managed plan
2established under Section 15-158.2 in lieu of participating in
3a self-directed retirement plan created under this subsection
4(f).
5    (g) Each active participant in the retirement system
6established under Article 14 of this Code who is a noncovered
7employee and each active participant in a retirement system
8established under Article 15, 16, or 18 of this Code, except
9for a participant in the self-managed plan established under
10Section 15-158.2, shall participate in the self-directed
11retirement plan established under subsection (f) and
12contribute 8% of his or her salary, earnings, or compensation,
13whichever is applicable, to the plan. The employer of each of
14those active participants shall contribute 7% of salary,
15earnings, or compensation, whichever is applicable, to that
16plan on behalf of the participant.
17    Each active participant in the retirement system
18established under Article 14 who is a covered employee shall
19participate in the self-directed retirement plan established
20under subsection (f) and shall contribute 3% of compensation to
21the plan. The employer of each of those participants shall
22contribute 3% of compensation to the self-directed retirement
23plan on behalf of the participant.
24    Each active participant in the retirement system
25established under Article 2 of this Code shall have the option
26of participating in the self-directed retirement plan

 

 

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1established under subsection (f) and shall be entitled to
2contribute as much to the plan as is authorized by federal law.
3However, no employer contribution to the self-directed plan
4shall be made on behalf of active participants in the
5retirement system established under Article 2 of this Code.
6    For the purposes of this subsection (g), salary, earnings,
7or compensation shall not exceed $110,100. However, that amount
8shall be increased on January 1, 2017 and each January 1
9thereafter by the lesser of (i) 3% of that amount or (ii)
10one-half the annual unadjusted percentage increase (but not
11less than zero) in the consumer price index-u for the 12 months
12ending with the September preceding each November 1, as
13calculated by the Public Pension Division of the Department of
14Insurance and made available to the boards of the State-funded
15retirement systems by November 1, 2015 and each November 1
16thereafter.
17    (h) The provisions of this amendatory Act of the 98th
18General Assembly apply notwithstanding any other law,
19including Section 1-160 of this Code. If there is a conflict
20between the provisions of this amendatory Act of the 98th
21General Assembly and any other law, the provisions of this
22Section shall control.
 
23    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
24    Sec. 2-124. Contributions by State.
25    (a) The State shall make contributions to the System by

 

 

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1appropriations of amounts which, together with the
2contributions of participants, interest earned on investments,
3and other income will meet the cost of maintaining and
4administering the System on a 100% 90% funded basis in
5accordance with actuarial recommendations by the end of State
6fiscal year 2044.
7    (b) The Board shall determine the amount of State
8contributions required for each fiscal year on the basis of the
9actuarial tables and other assumptions adopted by the Board and
10the prescribed rate of interest, using the formula in
11subsection (c).
12    (c) For State fiscal years 2015 through 2044, the minimum
13contribution to the System to be made by the State for each
14fiscal year shall be an amount determined by the System to be
15equal to the sum of (1) the State's portion of the projected
16normal cost for that fiscal year, plus (2) an amount sufficient
17to bring the total assets of the System up to 100% of the total
18actuarial liabilities of the System by the end of State fiscal
19year 2044. In making these determinations, the required State
20contribution shall be calculated each year as a level
21percentage of payroll over the years remaining to and including
22fiscal year 2044 and shall be determined under the projected
23unit cost method for fiscal year 2015 and under the entry age
24normal actuarial cost method for fiscal years 2016 through
252044.
26    For State fiscal years 2012 through 2015 2014, the minimum

 

 

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1contribution to the System to be made by the State for each
2fiscal year shall be an amount determined by the System to be
3sufficient to bring the total assets of the System up to 90% of
4the total actuarial liabilities of the System by the end of
5State fiscal year 2045. In making these determinations, the
6required State contribution shall be calculated each year as a
7level percentage of payroll over the years remaining to and
8including fiscal year 2045 and shall be determined under the
9projected unit credit actuarial cost method.
10    For State fiscal years 2016 through 2047, the minimum
11contribution to the System to be made by the State for each
12fiscal year shall be an amount determined by the System to be
13sufficient to bring the total assets of the System up to 100%
14of the total actuarial liabilities of the System by the end of
15State fiscal year 2047. In making these determinations, the
16required State contribution shall be calculated each year as a
17level dollar amount over the years remaining to and including
18fiscal year 2047 and shall be determined under the projected
19unit credit actuarial cost method.
20    For State fiscal years 1996 through 2005, the State
21contribution to the System, as a percentage of the applicable
22employee payroll, shall be increased in equal annual increments
23so that by State fiscal year 2011, the State is contributing at
24the rate required under this Section.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2006 is

 

 

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1$4,157,000.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2007 is
4$5,220,300.
5    For each of State fiscal years 2008 through 2009, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8from the required State contribution for State fiscal year
92007, so that by State fiscal year 2011, the State is
10contributing at the rate otherwise required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2010 is
13$10,454,000 and shall be made from the proceeds of bonds sold
14in fiscal year 2010 pursuant to Section 7.2 of the General
15Obligation Bond Act, less (i) the pro rata share of bond sale
16expenses determined by the System's share of total bond
17proceeds, (ii) any amounts received from the General Revenue
18Fund in fiscal year 2010, and (iii) any reduction in bond
19proceeds due to the issuance of discounted bonds, if
20applicable.
21    Notwithstanding any other provision of this Article, the
22total required State contribution for State fiscal year 2011 is
23the amount recertified by the System on or before April 1, 2011
24pursuant to Section 2-134 and shall be made from the proceeds
25of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
26the General Obligation Bond Act, less (i) the pro rata share of

 

 

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1bond sale expenses determined by the System's share of total
2bond proceeds, (ii) any amounts received from the General
3Revenue Fund in fiscal year 2011, and (iii) any reduction in
4bond proceeds due to the issuance of discounted bonds, if
5applicable.
6    Beginning in State fiscal year 2045, the minimum State
7contribution for each fiscal year shall be the amount needed to
8maintain the total assets of the System at 100% of the total
9actuarial liabilities of the System.
10    Beginning in State fiscal year 2048, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14    Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 100% 90%. A reference in this Article
23to the "required State contribution" or any substantially
24similar term does not include or apply to any amounts payable
25to the System under Section 25 of the Budget Stabilization Act.
26    Notwithstanding any other provision of this Section, the

 

 

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1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter through State
3fiscal year 2014, as calculated under this Section and
4certified under Section 2-134, shall not exceed an amount equal
5to (i) the amount of the required State contribution that would
6have been calculated under this Section for that fiscal year if
7the System had not received any payments under subsection (d)
8of Section 7.2 of the General Obligation Bond Act, minus (ii)
9the portion of the State's total debt service payments for that
10fiscal year on the bonds issued in fiscal year 2003 for the
11purposes of that Section 7.2, as determined and certified by
12the Comptroller, that is the same as the System's portion of
13the total moneys distributed under subsection (d) of Section
147.2 of the General Obligation Bond Act. In determining this
15maximum for State fiscal years 2008 through 2010, however, the
16amount referred to in item (i) shall be increased, as a
17percentage of the applicable employee payroll, in equal
18increments calculated from the sum of the required State
19contribution for State fiscal year 2007 plus the applicable
20portion of the State's total debt service payments for fiscal
21year 2007 on the bonds issued in fiscal year 2003 for the
22purposes of Section 7.2 of the General Obligation Bond Act, so
23that, by State fiscal year 2011, the State is contributing at
24the rate otherwise required under this Section.
25    (d) For purposes of determining the required State
26contribution to the System, the value of the System's assets

 

 

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1shall be equal to the actuarial value of the System's assets,
2which shall be calculated as follows:
3    As of June 30, 2008, the actuarial value of the System's
4assets shall be equal to the market value of the assets as of
5that date. In determining the actuarial value of the System's
6assets for fiscal years after June 30, 2008, any actuarial
7gains or losses from investment return incurred in a fiscal
8year shall be recognized in equal annual amounts over the
95-year period following that fiscal year.
10    (e) For purposes of determining the required State
11contribution to the system for a particular year, the actuarial
12value of assets shall be assumed to earn a rate of return equal
13to the system's actuarially assumed rate of return.
14(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1596-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
167-13-12; 98-599, eff. 6-1-14.)
 
17    (40 ILCS 5/14-131)
18    Sec. 14-131. Contributions by State.
19    (a) The State shall make contributions to the System by
20appropriations of amounts which, together with other employer
21contributions from trust, federal, and other funds, employee
22contributions, investment income, and other income, will be
23sufficient to meet the cost of maintaining and administering
24the System on a 100% 90% funded basis in accordance with
25actuarial recommendations by the end of State fiscal year 2044.

 

 

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1    For the purposes of this Section and Section 14-135.08,
2references to State contributions refer only to employer
3contributions and do not include employee contributions that
4are picked up or otherwise paid by the State or a department on
5behalf of the employee.
6    (b) The Board shall determine the total amount of State
7contributions required for each fiscal year on the basis of the
8actuarial tables and other assumptions adopted by the Board,
9using the formula in subsection (e).
10    The Board shall also determine a State contribution rate
11for each fiscal year, expressed as a percentage of payroll,
12based on the total required State contribution for that fiscal
13year (less the amount received by the System from
14appropriations under Section 8.12 of the State Finance Act and
15Section 1 of the State Pension Funds Continuing Appropriation
16Act, if any, for the fiscal year ending on the June 30
17immediately preceding the applicable November 15 certification
18deadline), the estimated payroll (including all forms of
19compensation) for personal services rendered by eligible
20employees, and the recommendations of the actuary.
21    For the purposes of this Section and Section 14.1 of the
22State Finance Act, the term "eligible employees" includes
23employees who participate in the System, persons who may elect
24to participate in the System but have not so elected, persons
25who are serving a qualifying period that is required for
26participation, and annuitants employed by a department as

 

 

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1described in subdivision (a)(1) or (a)(2) of Section 14-111.
2    (c) Contributions shall be made by the several departments
3for each pay period by warrants drawn by the State Comptroller
4against their respective funds or appropriations based upon
5vouchers stating the amount to be so contributed. These amounts
6shall be based on the full rate certified by the Board under
7Section 14-135.08 for that fiscal year. From the effective date
8of this amendatory Act of the 93rd General Assembly through the
9payment of the final payroll from fiscal year 2004
10appropriations, the several departments shall not make
11contributions for the remainder of fiscal year 2004 but shall
12instead make payments as required under subsection (a-1) of
13Section 14.1 of the State Finance Act. The several departments
14shall resume those contributions at the commencement of fiscal
15year 2005.
16    (c-1) Notwithstanding subsection (c) of this Section, for
17fiscal years 2010, 2012, 2013, and 2014 only, contributions by
18the several departments are not required to be made for General
19Revenue Funds payrolls processed by the Comptroller. Payrolls
20paid by the several departments from all other State funds must
21continue to be processed pursuant to subsection (c) of this
22Section.
23    (c-2) For State fiscal years 2010, 2012, 2013, and 2014
24only, on or as soon as possible after the 15th day of each
25month, the Board shall submit vouchers for payment of State
26contributions to the System, in a total monthly amount of

 

 

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1one-twelfth of the fiscal year General Revenue Fund
2contribution as certified by the System pursuant to Section
314-135.08 of the Illinois Pension Code.
4    (d) If an employee is paid from trust funds or federal
5funds, the department or other employer shall pay employer
6contributions from those funds to the System at the certified
7rate, unless the terms of the trust or the federal-State
8agreement preclude the use of the funds for that purpose, in
9which case the required employer contributions shall be paid by
10the State. From the effective date of this amendatory Act of
11the 93rd General Assembly through the payment of the final
12payroll from fiscal year 2004 appropriations, the department or
13other employer shall not pay contributions for the remainder of
14fiscal year 2004 but shall instead make payments as required
15under subsection (a-1) of Section 14.1 of the State Finance
16Act. The department or other employer shall resume payment of
17contributions at the commencement of fiscal year 2005.
18    (e) For State fiscal years 2015 through 2044, the minimum
19contribution to the System to be made by the State for each
20fiscal year shall be an amount determined by the System to be
21equal to the sum of (1) the State's portion of the projected
22normal cost for that fiscal year, plus (2) an amount sufficient
23to bring the total assets of the System up to 100% of the total
24actuarial liabilities of the System by the end of State fiscal
25year 2044. In making these determinations, the required State
26contribution shall be calculated each year as a level

 

 

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1percentage of payroll over the years remaining to and including
2fiscal year 2044 and shall be determined under the projected
3unit cost method for fiscal year 2015 and under the entry age
4normal actuarial cost method for fiscal years 2016 through
52044.
6    For State fiscal years 2012 through 2015 2014, the minimum
7contribution to the System to be made by the State for each
8fiscal year shall be an amount determined by the System to be
9sufficient to bring the total assets of the System up to 90% of
10the total actuarial liabilities of the System by the end of
11State fiscal year 2045. In making these determinations, the
12required State contribution shall be calculated each year as a
13level percentage of payroll over the years remaining to and
14including fiscal year 2045 and shall be determined under the
15projected unit credit actuarial cost method.
16    For State fiscal years 2016 through 2047, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 100%
20of the total actuarial liabilities of the System by the end of
21State fiscal year 2047. In making these determinations, the
22required State contribution shall be calculated each year as a
23level dollar amount over the years remaining to and including
24fiscal year 2047 and shall be determined under the projected
25unit credit actuarial cost method.
26    For State fiscal years 1996 through 2005, the State

 

 

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1contribution to the System, as a percentage of the applicable
2employee payroll, shall be increased in equal annual increments
3so that by State fiscal year 2011, the State is contributing at
4the rate required under this Section; except that (i) for State
5fiscal year 1998, for all purposes of this Code and any other
6law of this State, the certified percentage of the applicable
7employee payroll shall be 5.052% for employees earning eligible
8creditable service under Section 14-110 and 6.500% for all
9other employees, notwithstanding any contrary certification
10made under Section 14-135.08 before the effective date of this
11amendatory Act of 1997, and (ii) in the following specified
12State fiscal years, the State contribution to the System shall
13not be less than the following indicated percentages of the
14applicable employee payroll, even if the indicated percentage
15will produce a State contribution in excess of the amount
16otherwise required under this subsection and subsection (a):
179.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
182002; 10.6% in FY 2003; and 10.8% in FY 2004.
19    Notwithstanding any other provision of this Article, the
20total required State contribution to the System for State
21fiscal year 2006 is $203,783,900.
22    Notwithstanding any other provision of this Article, the
23total required State contribution to the System for State
24fiscal year 2007 is $344,164,400.
25    For each of State fiscal years 2008 through 2009, the State
26contribution to the System, as a percentage of the applicable

 

 

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1employee payroll, shall be increased in equal annual increments
2from the required State contribution for State fiscal year
32007, so that by State fiscal year 2011, the State is
4contributing at the rate otherwise required under this Section.
5    Notwithstanding any other provision of this Article, the
6total required State General Revenue Fund contribution for
7State fiscal year 2010 is $723,703,100 and shall be made from
8the proceeds of bonds sold in fiscal year 2010 pursuant to
9Section 7.2 of the General Obligation Bond Act, less (i) the
10pro rata share of bond sale expenses determined by the System's
11share of total bond proceeds, (ii) any amounts received from
12the General Revenue Fund in fiscal year 2010, and (iii) any
13reduction in bond proceeds due to the issuance of discounted
14bonds, if applicable.
15    Notwithstanding any other provision of this Article, the
16total required State General Revenue Fund contribution for
17State fiscal year 2011 is the amount recertified by the System
18on or before April 1, 2011 pursuant to Section 14-135.08 and
19shall be made from the proceeds of bonds sold in fiscal year
202011 pursuant to Section 7.2 of the General Obligation Bond
21Act, less (i) the pro rata share of bond sale expenses
22determined by the System's share of total bond proceeds, (ii)
23any amounts received from the General Revenue Fund in fiscal
24year 2011, and (iii) any reduction in bond proceeds due to the
25issuance of discounted bonds, if applicable.
26    Beginning in State fiscal year 2045, the minimum State

 

 

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1contribution for each fiscal year shall be the amount needed to
2maintain the total assets of the System at 100% of the total
3actuarial liabilities of the System.
4    Beginning in State fiscal year 2048, the minimum State
5contribution for each fiscal year shall be the amount needed to
6maintain the total assets of the System at 90% of the total
7actuarial liabilities of the System.
8    Amounts received by the System pursuant to Section 25 of
9the Budget Stabilization Act or Section 8.12 of the State
10Finance Act in any fiscal year do not reduce and do not
11constitute payment of any portion of the minimum State
12contribution required under this Article in that fiscal year.
13Such amounts shall not reduce, and shall not be included in the
14calculation of, the required State contributions under this
15Article in any future year until the System has reached a
16funding ratio of at least 100% 90%. A reference in this Article
17to the "required State contribution" or any substantially
18similar term does not include or apply to any amounts payable
19to the System under Section 25 of the Budget Stabilization Act.
20    Notwithstanding any other provision of this Section, the
21required State contribution for State fiscal year 2005 and for
22fiscal year 2008 and each fiscal year thereafter through State
23fiscal year 2014, as calculated under this Section and
24certified under Section 14-135.08, shall not exceed an amount
25equal to (i) the amount of the required State contribution that
26would have been calculated under this Section for that fiscal

 

 

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1year if the System had not received any payments under
2subsection (d) of Section 7.2 of the General Obligation Bond
3Act, minus (ii) the portion of the State's total debt service
4payments for that fiscal year on the bonds issued in fiscal
5year 2003 for the purposes of that Section 7.2, as determined
6and certified by the Comptroller, that is the same as the
7System's portion of the total moneys distributed under
8subsection (d) of Section 7.2 of the General Obligation Bond
9Act. In determining this maximum for State fiscal years 2008
10through 2010, however, the amount referred to in item (i) shall
11be increased, as a percentage of the applicable employee
12payroll, in equal increments calculated from the sum of the
13required State contribution for State fiscal year 2007 plus the
14applicable portion of the State's total debt service payments
15for fiscal year 2007 on the bonds issued in fiscal year 2003
16for the purposes of Section 7.2 of the General Obligation Bond
17Act, so that, by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    (f) After the submission of all payments for eligible
20employees from personal services line items in fiscal year 2004
21have been made, the Comptroller shall provide to the System a
22certification of the sum of all fiscal year 2004 expenditures
23for personal services that would have been covered by payments
24to the System under this Section if the provisions of this
25amendatory Act of the 93rd General Assembly had not been
26enacted. Upon receipt of the certification, the System shall

 

 

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1determine the amount due to the System based on the full rate
2certified by the Board under Section 14-135.08 for fiscal year
32004 in order to meet the State's obligation under this
4Section. The System shall compare this amount due to the amount
5received by the System in fiscal year 2004 through payments
6under this Section and under Section 6z-61 of the State Finance
7Act. If the amount due is more than the amount received, the
8difference shall be termed the "Fiscal Year 2004 Shortfall" for
9purposes of this Section, and the Fiscal Year 2004 Shortfall
10shall be satisfied under Section 1.2 of the State Pension Funds
11Continuing Appropriation Act. If the amount due is less than
12the amount received, the difference shall be termed the "Fiscal
13Year 2004 Overpayment" for purposes of this Section, and the
14Fiscal Year 2004 Overpayment shall be repaid by the System to
15the Pension Contribution Fund as soon as practicable after the
16certification.
17    (g) For purposes of determining the required State
18contribution to the System, the value of the System's assets
19shall be equal to the actuarial value of the System's assets,
20which shall be calculated as follows:
21    As of June 30, 2008, the actuarial value of the System's
22assets shall be equal to the market value of the assets as of
23that date. In determining the actuarial value of the System's
24assets for fiscal years after June 30, 2008, any actuarial
25gains or losses from investment return incurred in a fiscal
26year shall be recognized in equal annual amounts over the

 

 

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15-year period following that fiscal year.
2    (h) For purposes of determining the required State
3contribution to the System for a particular year, the actuarial
4value of assets shall be assumed to earn a rate of return equal
5to the System's actuarially assumed rate of return.
6    (i) After the submission of all payments for eligible
7employees from personal services line items paid from the
8General Revenue Fund in fiscal year 2010 have been made, the
9Comptroller shall provide to the System a certification of the
10sum of all fiscal year 2010 expenditures for personal services
11that would have been covered by payments to the System under
12this Section if the provisions of this amendatory Act of the
1396th General Assembly had not been enacted. Upon receipt of the
14certification, the System shall determine the amount due to the
15System based on the full rate certified by the Board under
16Section 14-135.08 for fiscal year 2010 in order to meet the
17State's obligation under this Section. The System shall compare
18this amount due to the amount received by the System in fiscal
19year 2010 through payments under this Section. If the amount
20due is more than the amount received, the difference shall be
21termed the "Fiscal Year 2010 Shortfall" for purposes of this
22Section, and the Fiscal Year 2010 Shortfall shall be satisfied
23under Section 1.2 of the State Pension Funds Continuing
24Appropriation Act. If the amount due is less than the amount
25received, the difference shall be termed the "Fiscal Year 2010
26Overpayment" for purposes of this Section, and the Fiscal Year

 

 

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12010 Overpayment shall be repaid by the System to the General
2Revenue Fund as soon as practicable after the certification.
3    (j) After the submission of all payments for eligible
4employees from personal services line items paid from the
5General Revenue Fund in fiscal year 2011 have been made, the
6Comptroller shall provide to the System a certification of the
7sum of all fiscal year 2011 expenditures for personal services
8that would have been covered by payments to the System under
9this Section if the provisions of this amendatory Act of the
1096th General Assembly had not been enacted. Upon receipt of the
11certification, the System shall determine the amount due to the
12System based on the full rate certified by the Board under
13Section 14-135.08 for fiscal year 2011 in order to meet the
14State's obligation under this Section. The System shall compare
15this amount due to the amount received by the System in fiscal
16year 2011 through payments under this Section. If the amount
17due is more than the amount received, the difference shall be
18termed the "Fiscal Year 2011 Shortfall" for purposes of this
19Section, and the Fiscal Year 2011 Shortfall shall be satisfied
20under Section 1.2 of the State Pension Funds Continuing
21Appropriation Act. If the amount due is less than the amount
22received, the difference shall be termed the "Fiscal Year 2011
23Overpayment" for purposes of this Section, and the Fiscal Year
242011 Overpayment shall be repaid by the System to the General
25Revenue Fund as soon as practicable after the certification.
26    (k) For fiscal years 2012 through 2014 only, after the

 

 

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1submission of all payments for eligible employees from personal
2services line items paid from the General Revenue Fund in the
3fiscal year have been made, the Comptroller shall provide to
4the System a certification of the sum of all expenditures in
5the fiscal year for personal services. Upon receipt of the
6certification, the System shall determine the amount due to the
7System based on the full rate certified by the Board under
8Section 14-135.08 for the fiscal year in order to meet the
9State's obligation under this Section. The System shall compare
10this amount due to the amount received by the System for the
11fiscal year. If the amount due is more than the amount
12received, the difference shall be termed the "Prior Fiscal Year
13Shortfall" for purposes of this Section, and the Prior Fiscal
14Year Shortfall shall be satisfied under Section 1.2 of the
15State Pension Funds Continuing Appropriation Act. If the amount
16due is less than the amount received, the difference shall be
17termed the "Prior Fiscal Year Overpayment" for purposes of this
18Section, and the Prior Fiscal Year Overpayment shall be repaid
19by the System to the General Revenue Fund as soon as
20practicable after the certification.
21(Source: P.A. 97-72, eff. 7-1-11; 97-732, eff. 6-30-12; 98-24,
22eff. 6-19-13; 98-599, eff. 6-1-14.)
 
23    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
24    Sec. 15-155. Employer contributions.
25    (a) The State of Illinois shall make contributions by

 

 

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1appropriations of amounts which, together with the other
2employer contributions from trust, federal, and other funds,
3employee contributions, income from investments, and other
4income of this System, will be sufficient to meet the cost of
5maintaining and administering the System on a 100% 90% funded
6basis in accordance with actuarial recommendations by the end
7of State fiscal year 2044.
8    The Board shall determine the amount of State contributions
9required for each fiscal year on the basis of the actuarial
10tables and other assumptions adopted by the Board and the
11recommendations of the actuary, using the formula in subsection
12(a-1).
13    (a-1) For State fiscal years 2015 through 2044, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16equal to the sum of (1) the State's portion of the projected
17normal cost for that fiscal year, plus (2) an amount sufficient
18to bring the total assets of the System up to 100% of the total
19actuarial liabilities of the System by the end of the State
20fiscal year 2044. In making these determinations, the required
21State contribution shall be calculated each year as a level
22percentage of payroll over the years remaining to and including
23fiscal year 2044 and shall be determined under the projected
24unit cost method for fiscal year 2015 and under the entry age
25normal actuarial cost method for fiscal years 2016 through
262044.

 

 

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1    For State fiscal years 2012 through 2015 2014, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of payroll over the years remaining to and
9including fiscal year 2045 and shall be determined under the
10projected unit credit actuarial cost method.
11    For State fiscal years 2016 through 2047, the minimum
12contribution to the System to be made by the State for each
13fiscal year shall be an amount determined by the System to be
14sufficient to bring the total assets of the System up to 100%
15of the total actuarial liabilities of the System by the end of
16State fiscal year 2047. In making these determinations, the
17required State contribution shall be calculated each year as a
18level dollar amount over the years remaining to and including
19fiscal year 2047 and shall be determined under the projected
20unit credit actuarial cost method.
21    For State fiscal years 1996 through 2005, the State
22contribution to the System, as a percentage of the applicable
23employee payroll, shall be increased in equal annual increments
24so that by State fiscal year 2011, the State is contributing at
25the rate required under this Section.
26    Notwithstanding any other provision of this Article, the

 

 

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1total required State contribution for State fiscal year 2006 is
2$166,641,900.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2007 is
5$252,064,100.
6    For each of State fiscal years 2008 through 2009, the State
7contribution to the System, as a percentage of the applicable
8employee payroll, shall be increased in equal annual increments
9from the required State contribution for State fiscal year
102007, so that by State fiscal year 2011, the State is
11contributing at the rate otherwise required under this Section.
12    Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2010 is
14$702,514,000 and shall be made from the State Pensions Fund and
15proceeds of bonds sold in fiscal year 2010 pursuant to Section
167.2 of the General Obligation Bond Act, less (i) the pro rata
17share of bond sale expenses determined by the System's share of
18total bond proceeds, (ii) any amounts received from the General
19Revenue Fund in fiscal year 2010, (iii) any reduction in bond
20proceeds due to the issuance of discounted bonds, if
21applicable.
22    Notwithstanding any other provision of this Article, the
23total required State contribution for State fiscal year 2011 is
24the amount recertified by the System on or before April 1, 2011
25pursuant to Section 15-165 and shall be made from the State
26Pensions Fund and proceeds of bonds sold in fiscal year 2011

 

 

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1pursuant to Section 7.2 of the General Obligation Bond Act,
2less (i) the pro rata share of bond sale expenses determined by
3the System's share of total bond proceeds, (ii) any amounts
4received from the General Revenue Fund in fiscal year 2011, and
5(iii) any reduction in bond proceeds due to the issuance of
6discounted bonds, if applicable.
7    Beginning in State fiscal year 2045, the minimum
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 100% of the total
10liabilities of the System.
11    Beginning in State fiscal year 2048, the minimum State
12contribution for each fiscal year shall be the amount needed to
13maintain the total assets of the System at 90% of the total
14actuarial liabilities of the System.
15    Amounts received by the System pursuant to Section 25 of
16the Budget Stabilization Act or Section 8.12 of the State
17Finance Act in any fiscal year do not reduce and do not
18constitute payment of any portion of the minimum State
19contribution required under this Article in that fiscal year.
20Such amounts shall not reduce, and shall not be included in the
21calculation of, the required State contributions under this
22Article in any future year until the System has reached a
23funding ratio of at least 100% 90%. A reference in this Article
24to the "required State contribution" or any substantially
25similar term does not include or apply to any amounts payable
26to the System under Section 25 of the Budget Stabilization Act.

 

 

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1    Notwithstanding any other provision of this Section, the
2required State contribution for State fiscal year 2005 and for
3fiscal year 2008 and each fiscal year thereafter through State
4fiscal year 2014, as calculated under this Section and
5certified under Section 15-165, shall not exceed an amount
6equal to (i) the amount of the required State contribution that
7would have been calculated under this Section for that fiscal
8year if the System had not received any payments under
9subsection (d) of Section 7.2 of the General Obligation Bond
10Act, minus (ii) the portion of the State's total debt service
11payments for that fiscal year on the bonds issued in fiscal
12year 2003 for the purposes of that Section 7.2, as determined
13and certified by the Comptroller, that is the same as the
14System's portion of the total moneys distributed under
15subsection (d) of Section 7.2 of the General Obligation Bond
16Act. In determining this maximum for State fiscal years 2008
17through 2010, however, the amount referred to in item (i) shall
18be increased, as a percentage of the applicable employee
19payroll, in equal increments calculated from the sum of the
20required State contribution for State fiscal year 2007 plus the
21applicable portion of the State's total debt service payments
22for fiscal year 2007 on the bonds issued in fiscal year 2003
23for the purposes of Section 7.2 of the General Obligation Bond
24Act, so that, by State fiscal year 2011, the State is
25contributing at the rate otherwise required under this Section.
26    (b) If an employee is paid from trust or federal funds, the

 

 

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1employer shall pay to the Board contributions from those funds
2which are sufficient to cover the accruing normal costs on
3behalf of the employee. However, universities having employees
4who are compensated out of local auxiliary funds, income funds,
5or service enterprise funds are not required to pay such
6contributions on behalf of those employees. The local auxiliary
7funds, income funds, and service enterprise funds of
8universities shall not be considered trust funds for the
9purpose of this Article, but funds of alumni associations,
10foundations, and athletic associations which are affiliated
11with the universities included as employers under this Article
12and other employers which do not receive State appropriations
13are considered to be trust funds for the purpose of this
14Article.
15    (b-1) The City of Urbana and the City of Champaign shall
16each make employer contributions to this System for their
17respective firefighter employees who participate in this
18System pursuant to subsection (h) of Section 15-107. The rate
19of contributions to be made by those municipalities shall be
20determined annually by the Board on the basis of the actuarial
21assumptions adopted by the Board and the recommendations of the
22actuary, and shall be expressed as a percentage of salary for
23each such employee. The Board shall certify the rate to the
24affected municipalities as soon as may be practical. The
25employer contributions required under this subsection shall be
26remitted by the municipality to the System at the same time and

 

 

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1in the same manner as employee contributions.
2    (c) Through State fiscal year 1995: The total employer
3contribution shall be apportioned among the various funds of
4the State and other employers, whether trust, federal, or other
5funds, in accordance with actuarial procedures approved by the
6Board. State of Illinois contributions for employers receiving
7State appropriations for personal services shall be payable
8from appropriations made to the employers or to the System. The
9contributions for Class I community colleges covering earnings
10other than those paid from trust and federal funds, shall be
11payable solely from appropriations to the Illinois Community
12College Board or the System for employer contributions.
13    (d) Beginning in State fiscal year 1996, the required State
14contributions to the System shall be appropriated directly to
15the System and shall be payable through vouchers issued in
16accordance with subsection (c) of Section 15-165, except as
17provided in subsection (g).
18    (e) The State Comptroller shall draw warrants payable to
19the System upon proper certification by the System or by the
20employer in accordance with the appropriation laws and this
21Code.
22    (f) Normal costs under this Section means liability for
23pensions and other benefits which accrues to the System because
24of the credits earned for service rendered by the participants
25during the fiscal year and expenses of administering the
26System, but shall not include the principal of or any

 

 

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1redemption premium or interest on any bonds issued by the Board
2or any expenses incurred or deposits required in connection
3therewith.
4    (g) If the amount of a participant's earnings for any
5academic year used to determine the final rate of earnings,
6determined on a full-time equivalent basis, exceeds the amount
7of his or her earnings with the same employer for the previous
8academic year, determined on a full-time equivalent basis, by
9more than 6%, the participant's employer shall pay to the
10System, in addition to all other payments required under this
11Section and in accordance with guidelines established by the
12System, the present value of the increase in benefits resulting
13from the portion of the increase in earnings that is in excess
14of 6%. This present value shall be computed by the System on
15the basis of the actuarial assumptions and tables used in the
16most recent actuarial valuation of the System that is available
17at the time of the computation. The System may require the
18employer to provide any pertinent information or
19documentation.
20    Whenever it determines that a payment is or may be required
21under this subsection (g), the System shall calculate the
22amount of the payment and bill the employer for that amount.
23The bill shall specify the calculations used to determine the
24amount due. If the employer disputes the amount of the bill, it
25may, within 30 days after receipt of the bill, apply to the
26System in writing for a recalculation. The application must

 

 

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1specify in detail the grounds of the dispute and, if the
2employer asserts that the calculation is subject to subsection
3(h) or (i) of this Section, must include an affidavit setting
4forth and attesting to all facts within the employer's
5knowledge that are pertinent to the applicability of subsection
6(h) or (i). Upon receiving a timely application for
7recalculation, the System shall review the application and, if
8appropriate, recalculate the amount due.
9    The employer contributions required under this subsection
10(g) may be paid in the form of a lump sum within 90 days after
11receipt of the bill. If the employer contributions are not paid
12within 90 days after receipt of the bill, then interest will be
13charged at a rate equal to the System's annual actuarially
14assumed rate of return on investment compounded annually from
15the 91st day after receipt of the bill. Payments must be
16concluded within 3 years after the employer's receipt of the
17bill.
18    (h) This subsection (h) applies only to payments made or
19salary increases given on or after June 1, 2005 but before July
201, 2011. The changes made by Public Act 94-1057 shall not
21require the System to refund any payments received before July
2231, 2006 (the effective date of Public Act 94-1057).
23    When assessing payment for any amount due under subsection
24(g), the System shall exclude earnings increases paid to
25participants under contracts or collective bargaining
26agreements entered into, amended, or renewed before June 1,

 

 

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12005.
2    When assessing payment for any amount due under subsection
3(g), the System shall exclude earnings increases paid to a
4participant at a time when the participant is 10 or more years
5from retirement eligibility under Section 15-135.
6    When assessing payment for any amount due under subsection
7(g), the System shall exclude earnings increases resulting from
8overload work, including a contract for summer teaching, or
9overtime when the employer has certified to the System, and the
10System has approved the certification, that: (i) in the case of
11overloads (A) the overload work is for the sole purpose of
12academic instruction in excess of the standard number of
13instruction hours for a full-time employee occurring during the
14academic year that the overload is paid and (B) the earnings
15increases are equal to or less than the rate of pay for
16academic instruction computed using the participant's current
17salary rate and work schedule; and (ii) in the case of
18overtime, the overtime was necessary for the educational
19mission.
20    When assessing payment for any amount due under subsection
21(g), the System shall exclude any earnings increase resulting
22from (i) a promotion for which the employee moves from one
23classification to a higher classification under the State
24Universities Civil Service System, (ii) a promotion in academic
25rank for a tenured or tenure-track faculty position, or (iii) a
26promotion that the Illinois Community College Board has

 

 

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1recommended in accordance with subsection (k) of this Section.
2These earnings increases shall be excluded only if the
3promotion is to a position that has existed and been filled by
4a member for no less than one complete academic year and the
5earnings increase as a result of the promotion is an increase
6that results in an amount no greater than the average salary
7paid for other similar positions.
8    (i) When assessing payment for any amount due under
9subsection (g), the System shall exclude any salary increase
10described in subsection (h) of this Section given on or after
11July 1, 2011 but before July 1, 2014 under a contract or
12collective bargaining agreement entered into, amended, or
13renewed on or after June 1, 2005 but before July 1, 2011.
14Notwithstanding any other provision of this Section, any
15payments made or salary increases given after June 30, 2014
16shall be used in assessing payment for any amount due under
17subsection (g) of this Section.
18    (j) The System shall prepare a report and file copies of
19the report with the Governor and the General Assembly by
20January 1, 2007 that contains all of the following information:
21        (1) The number of recalculations required by the
22    changes made to this Section by Public Act 94-1057 for each
23    employer.
24        (2) The dollar amount by which each employer's
25    contribution to the System was changed due to
26    recalculations required by Public Act 94-1057.

 

 

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1        (3) The total amount the System received from each
2    employer as a result of the changes made to this Section by
3    Public Act 94-4.
4        (4) The increase in the required State contribution
5    resulting from the changes made to this Section by Public
6    Act 94-1057.
7    (k) The Illinois Community College Board shall adopt rules
8for recommending lists of promotional positions submitted to
9the Board by community colleges and for reviewing the
10promotional lists on an annual basis. When recommending
11promotional lists, the Board shall consider the similarity of
12the positions submitted to those positions recognized for State
13universities by the State Universities Civil Service System.
14The Illinois Community College Board shall file a copy of its
15findings with the System. The System shall consider the
16findings of the Illinois Community College Board when making
17determinations under this Section. The System shall not exclude
18any earnings increases resulting from a promotion when the
19promotion was not submitted by a community college. Nothing in
20this subsection (k) shall require any community college to
21submit any information to the Community College Board.
22    (l) For purposes of determining the required State
23contribution to the System, the value of the System's assets
24shall be equal to the actuarial value of the System's assets,
25which shall be calculated as follows:
26    As of June 30, 2008, the actuarial value of the System's

 

 

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1assets shall be equal to the market value of the assets as of
2that date. In determining the actuarial value of the System's
3assets for fiscal years after June 30, 2008, any actuarial
4gains or losses from investment return incurred in a fiscal
5year shall be recognized in equal annual amounts over the
65-year period following that fiscal year.
7    (m) For purposes of determining the required State
8contribution to the system for a particular year, the actuarial
9value of assets shall be assumed to earn a rate of return equal
10to the system's actuarially assumed rate of return.
11(Source: P.A. 97-813, eff. 7-13-12; 98-92, eff. 7-16-13;
1298-463, eff. 8-16-13; 98-599, eff. 6-1-14.)
 
13    (40 ILCS 5/16-158)   (from Ch. 108 1/2, par. 16-158)
14    Sec. 16-158. Contributions by State and other employing
15units.
16    (a) The State shall make contributions to the System by
17means of appropriations from the Common School Fund and other
18State funds of amounts which, together with other employer
19contributions, employee contributions, investment income, and
20other income, will be sufficient to meet the cost of
21maintaining and administering the System on a 100% 90% funded
22basis in accordance with actuarial recommendations by the end
23of State fiscal year 2044.
24    The Board shall determine the amount of State contributions
25required for each fiscal year on the basis of the actuarial

 

 

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1tables and other assumptions adopted by the Board and the
2recommendations of the actuary, using the formula in subsection
3(b-3).
4    (a-1) Annually, on or before November 15 through November
515, 2011, the Board shall certify to the Governor the amount of
6the required State contribution for the coming fiscal year. The
7certification under this subsection (a-1) shall include a copy
8of the actuarial recommendations upon which it is based.
9    On or before May 1, 2004, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2005, taking
12into account the amounts appropriated to and received by the
13System under subsection (d) of Section 7.2 of the General
14Obligation Bond Act.
15    On or before July 1, 2005, the Board shall recalculate and
16recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2006, taking
18into account the changes in required State contributions made
19by this amendatory Act of the 94th General Assembly.
20    On or before April 1, 2011, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2011, applying
23the changes made by Public Act 96-889 to the System's assets
24and liabilities as of June 30, 2009 as though Public Act 96-889
25was approved on that date.
26    (a-5) On or before November 1 of each year, beginning

 

 

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1November 1, 2012, the Board shall submit to the State Actuary,
2the Governor, and the General Assembly a proposed certification
3of the amount of the required State contribution to the System
4for the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year,
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions.
12    On or before January 15, 2013 and each January 15
13thereafter, the Board shall certify to the Governor and the
14General Assembly the amount of the required State contribution
15for the next fiscal year. The certification shall include a
16copy of the actuarial recommendations upon which it is based
17and shall specifically identify the System's projected State
18normal cost for that fiscal year. The Board's certification
19must note any deviations from the State Actuary's recommended
20changes, the reason or reasons for not following the State
21Actuary's recommended changes, and the fiscal impact of not
22following the State Actuary's recommended changes on the
23required State contribution.
24    (a-10) For purposes of Section (c-5) of Section 20 of the
25Budget Stabilization Act, on or before November 1 of each year
26beginning November 1, 2014, the Board shall determine the

 

 

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1amount of the State contribution to the System that would have
2been required for the next fiscal year if this amendatory Act
3of the 98th General Assembly had not taken effect, using the
4best and most recent available data but based on the law in
5effect on May 31, 2014. The Board shall submit to the State
6Actuary, the Governor, and the General Assembly a proposed
7certification, along with the relevant law, actuarial
8assumptions, calculations, and data upon which that
9certification is based. On or before January 1, 2015 and every
10January 1 thereafter, the State Actuary shall issue a
11preliminary report concerning the proposed certification and
12identifying, if necessary, recommended changes in actuarial
13assumptions that the Board must consider before finalizing its
14certification. On or before January 15, 2015 and every January
151 thereafter, the Board shall certify to the Governor and the
16General Assembly the amount of the State contribution to the
17System that would have been required for the next fiscal year
18if this amendatory Act of the 98th General Assembly had not
19taken effect, using the best and most recent available data but
20based on the law in effect on May 31, 2014. The Board's
21certification must note any deviations from the State Actuary's
22recommended changes, the reason or reasons for not following
23the State Actuary's recommended changes, and the impact of not
24following the State Actuary's recommended changes.
25    (b) Through State fiscal year 1995, the State contributions
26shall be paid to the System in accordance with Section 18-7 of

 

 

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1the School Code.
2    (b-1) Beginning in State fiscal year 1996, on the 15th day
3of each month, or as soon thereafter as may be practicable, the
4Board shall submit vouchers for payment of State contributions
5to the System, in a total monthly amount of one-twelfth of the
6required annual State contribution certified under subsection
7(a-1). From the effective date of this amendatory Act of the
893rd General Assembly through June 30, 2004, the Board shall
9not submit vouchers for the remainder of fiscal year 2004 in
10excess of the fiscal year 2004 certified contribution amount
11determined under this Section after taking into consideration
12the transfer to the System under subsection (a) of Section
136z-61 of the State Finance Act. These vouchers shall be paid by
14the State Comptroller and Treasurer by warrants drawn on the
15funds appropriated to the System for that fiscal year.
16    If in any month the amount remaining unexpended from all
17other appropriations to the System for the applicable fiscal
18year (including the appropriations to the System under Section
198.12 of the State Finance Act and Section 1 of the State
20Pension Funds Continuing Appropriation Act) is less than the
21amount lawfully vouchered under this subsection, the
22difference shall be paid from the Common School Fund under the
23continuing appropriation authority provided in Section 1.1 of
24the State Pension Funds Continuing Appropriation Act.
25    (b-2) Allocations from the Common School Fund apportioned
26to school districts not coming under this System shall not be

 

 

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1diminished or affected by the provisions of this Article.
2    (b-3) For State fiscal years 2015 through 2044, the minimum
3contribution to the System to be made by the State for each
4fiscal year shall be an amount determined by the System to be
5equal to the sum of (1) the State's portion of the projected
6normal cost for that fiscal year, plus (2) an amount sufficient
7to bring the total assets of the System up to 100% of the total
8actuarial liabilities of the System by the end of State fiscal
9year 2044. In making these determinations, the required State
10contribution shall be calculated each year as a level
11percentage of payroll over the years remaining to and including
12fiscal year 2044 and shall be determined under the projected
13unit cost method for fiscal year 2015 and under the entry age
14normal actuarial cost method for fiscal years 2016 through
152044.
16    For State fiscal years 2012 through 2015 2014, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of payroll over the years remaining to and
24including fiscal year 2045 and shall be determined under the
25projected unit credit actuarial cost method.
26    For State fiscal years 2016 through 2047, the minimum

 

 

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1contribution to the System to be made by the State for each
2fiscal year shall be an amount determined by the System to be
3sufficient to bring the total assets of the System up to 100%
4of the total actuarial liabilities of the System by the end of
5State fiscal year 2047. In making these determinations, the
6required State contribution shall be calculated each year as a
7level dollar amount over the years remaining to and including
8fiscal year 2047 and shall be determined under the projected
9unit credit actuarial cost method.
10    For State fiscal years 1996 through 2005, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13so that by State fiscal year 2011, the State is contributing at
14the rate required under this Section; except that in the
15following specified State fiscal years, the State contribution
16to the System shall not be less than the following indicated
17percentages of the applicable employee payroll, even if the
18indicated percentage will produce a State contribution in
19excess of the amount otherwise required under this subsection
20and subsection (a), and notwithstanding any contrary
21certification made under subsection (a-1) before the effective
22date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
23in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
242003; and 13.56% in FY 2004.
25    Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2006 is

 

 

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1$534,627,700.
2    Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2007 is
4$738,014,500.
5    For each of State fiscal years 2008 through 2009, the State
6contribution to the System, as a percentage of the applicable
7employee payroll, shall be increased in equal annual increments
8from the required State contribution for State fiscal year
92007, so that by State fiscal year 2011, the State is
10contributing at the rate otherwise required under this Section.
11    Notwithstanding any other provision of this Article, the
12total required State contribution for State fiscal year 2010 is
13$2,089,268,000 and shall be made from the proceeds of bonds
14sold in fiscal year 2010 pursuant to Section 7.2 of the General
15Obligation Bond Act, less (i) the pro rata share of bond sale
16expenses determined by the System's share of total bond
17proceeds, (ii) any amounts received from the Common School Fund
18in fiscal year 2010, and (iii) any reduction in bond proceeds
19due to the issuance of discounted bonds, if applicable.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2011 is
22the amount recertified by the System on or before April 1, 2011
23pursuant to subsection (a-1) of this Section and shall be made
24from the proceeds of bonds sold in fiscal year 2011 pursuant to
25Section 7.2 of the General Obligation Bond Act, less (i) the
26pro rata share of bond sale expenses determined by the System's

 

 

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1share of total bond proceeds, (ii) any amounts received from
2the Common School Fund in fiscal year 2011, and (iii) any
3reduction in bond proceeds due to the issuance of discounted
4bonds, if applicable. This amount shall include, in addition to
5the amount certified by the System, an amount necessary to meet
6employer contributions required by the State as an employer
7under paragraph (e) of this Section, which may also be used by
8the System for contributions required by paragraph (a) of
9Section 16-127.
10    Beginning in State fiscal year 2045, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 100% of the total
13actuarial liabilities of the System.
14    Beginning in State fiscal year 2048, the minimum State
15contribution for each fiscal year shall be the amount needed to
16maintain the total assets of the System at 90% of the total
17actuarial liabilities of the System.
18    Amounts received by the System pursuant to Section 25 of
19the Budget Stabilization Act or Section 8.12 of the State
20Finance Act in any fiscal year do not reduce and do not
21constitute payment of any portion of the minimum State
22contribution required under this Article in that fiscal year.
23Such amounts shall not reduce, and shall not be included in the
24calculation of, the required State contributions under this
25Article in any future year until the System has reached a
26funding ratio of at least 100% 90%. A reference in this Article

 

 

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1to the "required State contribution" or any substantially
2similar term does not include or apply to any amounts payable
3to the System under Section 25 of the Budget Stabilization Act.
4    Notwithstanding any other provision of this Section, the
5required State contribution for State fiscal year 2005 and for
6fiscal year 2008 and each fiscal year thereafter through State
7fiscal year 2014, as calculated under this Section and
8certified under subsection (a-1), shall not exceed an amount
9equal to (i) the amount of the required State contribution that
10would have been calculated under this Section for that fiscal
11year if the System had not received any payments under
12subsection (d) of Section 7.2 of the General Obligation Bond
13Act, minus (ii) the portion of the State's total debt service
14payments for that fiscal year on the bonds issued in fiscal
15year 2003 for the purposes of that Section 7.2, as determined
16and certified by the Comptroller, that is the same as the
17System's portion of the total moneys distributed under
18subsection (d) of Section 7.2 of the General Obligation Bond
19Act. In determining this maximum for State fiscal years 2008
20through 2010, however, the amount referred to in item (i) shall
21be increased, as a percentage of the applicable employee
22payroll, in equal increments calculated from the sum of the
23required State contribution for State fiscal year 2007 plus the
24applicable portion of the State's total debt service payments
25for fiscal year 2007 on the bonds issued in fiscal year 2003
26for the purposes of Section 7.2 of the General Obligation Bond

 

 

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1Act, so that, by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    (c) Payment of the required State contributions and of all
4pensions, retirement annuities, death benefits, refunds, and
5other benefits granted under or assumed by this System, and all
6expenses in connection with the administration and operation
7thereof, are obligations of the State.
8    If members are paid from special trust or federal funds
9which are administered by the employing unit, whether school
10district or other unit, the employing unit shall pay to the
11System from such funds the full accruing retirement costs based
12upon that service, as determined by the System. Employer
13contributions, based on salary paid to members from federal
14funds, may be forwarded by the distributing agency of the State
15of Illinois to the System prior to allocation, in an amount
16determined in accordance with guidelines established by such
17agency and the System.
18    (d) Effective July 1, 1986, any employer of a teacher as
19defined in paragraph (8) of Section 16-106 shall pay the
20employer's normal cost of benefits based upon the teacher's
21service, in addition to employee contributions, as determined
22by the System. Such employer contributions shall be forwarded
23monthly in accordance with guidelines established by the
24System.
25    However, with respect to benefits granted under Section
2616-133.4 or 16-133.5 to a teacher as defined in paragraph (8)

 

 

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1of Section 16-106, the employer's contribution shall be 12%
2(rather than 20%) of the member's highest annual salary rate
3for each year of creditable service granted, and the employer
4shall also pay the required employee contribution on behalf of
5the teacher. For the purposes of Sections 16-133.4 and
616-133.5, a teacher as defined in paragraph (8) of Section
716-106 who is serving in that capacity while on leave of
8absence from another employer under this Article shall not be
9considered an employee of the employer from which the teacher
10is on leave.
11    (e) Beginning July 1, 1998, every employer of a teacher
12shall pay to the System an employer contribution computed as
13follows:
14        (1) Beginning July 1, 1998 through June 30, 1999, the
15    employer contribution shall be equal to 0.3% of each
16    teacher's salary.
17        (2) Beginning July 1, 1999 and thereafter, the employer
18    contribution shall be equal to 0.58% of each teacher's
19    salary.
20The school district or other employing unit may pay these
21employer contributions out of any source of funding available
22for that purpose and shall forward the contributions to the
23System on the schedule established for the payment of member
24contributions.
25    These employer contributions are intended to offset a
26portion of the cost to the System of the increases in

 

 

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1retirement benefits resulting from this amendatory Act of 1998.
2    Each employer of teachers is entitled to a credit against
3the contributions required under this subsection (e) with
4respect to salaries paid to teachers for the period January 1,
52002 through June 30, 2003, equal to the amount paid by that
6employer under subsection (a-5) of Section 6.6 of the State
7Employees Group Insurance Act of 1971 with respect to salaries
8paid to teachers for that period.
9    The additional 1% employee contribution required under
10Section 16-152 by this amendatory Act of 1998 is the
11responsibility of the teacher and not the teacher's employer,
12unless the employer agrees, through collective bargaining or
13otherwise, to make the contribution on behalf of the teacher.
14    If an employer is required by a contract in effect on May
151, 1998 between the employer and an employee organization to
16pay, on behalf of all its full-time employees covered by this
17Article, all mandatory employee contributions required under
18this Article, then the employer shall be excused from paying
19the employer contribution required under this subsection (e)
20for the balance of the term of that contract. The employer and
21the employee organization shall jointly certify to the System
22the existence of the contractual requirement, in such form as
23the System may prescribe. This exclusion shall cease upon the
24termination, extension, or renewal of the contract at any time
25after May 1, 1998.
26    (f) If the amount of a teacher's salary for any school year

 

 

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1used to determine final average salary exceeds the member's
2annual full-time salary rate with the same employer for the
3previous school year by more than 6%, the teacher's employer
4shall pay to the System, in addition to all other payments
5required under this Section and in accordance with guidelines
6established by the System, the present value of the increase in
7benefits resulting from the portion of the increase in salary
8that is in excess of 6%. This present value shall be computed
9by the System on the basis of the actuarial assumptions and
10tables used in the most recent actuarial valuation of the
11System that is available at the time of the computation. If a
12teacher's salary for the 2005-2006 school year is used to
13determine final average salary under this subsection (f), then
14the changes made to this subsection (f) by Public Act 94-1057
15shall apply in calculating whether the increase in his or her
16salary is in excess of 6%. For the purposes of this Section,
17change in employment under Section 10-21.12 of the School Code
18on or after June 1, 2005 shall constitute a change in employer.
19The System may require the employer to provide any pertinent
20information or documentation. The changes made to this
21subsection (f) by this amendatory Act of the 94th General
22Assembly apply without regard to whether the teacher was in
23service on or after its effective date.
24    Whenever it determines that a payment is or may be required
25under this subsection, the System shall calculate the amount of
26the payment and bill the employer for that amount. The bill

 

 

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1shall specify the calculations used to determine the amount
2due. If the employer disputes the amount of the bill, it may,
3within 30 days after receipt of the bill, apply to the System
4in writing for a recalculation. The application must specify in
5detail the grounds of the dispute and, if the employer asserts
6that the calculation is subject to subsection (g) or (h) of
7this Section, must include an affidavit setting forth and
8attesting to all facts within the employer's knowledge that are
9pertinent to the applicability of that subsection. Upon
10receiving a timely application for recalculation, the System
11shall review the application and, if appropriate, recalculate
12the amount due.
13    The employer contributions required under this subsection
14(f) may be paid in the form of a lump sum within 90 days after
15receipt of the bill. If the employer contributions are not paid
16within 90 days after receipt of the bill, then interest will be
17charged at a rate equal to the System's annual actuarially
18assumed rate of return on investment compounded annually from
19the 91st day after receipt of the bill. Payments must be
20concluded within 3 years after the employer's receipt of the
21bill.
22    (g) This subsection (g) applies only to payments made or
23salary increases given on or after June 1, 2005 but before July
241, 2011. The changes made by Public Act 94-1057 shall not
25require the System to refund any payments received before July
2631, 2006 (the effective date of Public Act 94-1057).

 

 

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1    When assessing payment for any amount due under subsection
2(f), the System shall exclude salary increases paid to teachers
3under contracts or collective bargaining agreements entered
4into, amended, or renewed before June 1, 2005.
5    When assessing payment for any amount due under subsection
6(f), the System shall exclude salary increases paid to a
7teacher at a time when the teacher is 10 or more years from
8retirement eligibility under Section 16-132 or 16-133.2.
9    When assessing payment for any amount due under subsection
10(f), the System shall exclude salary increases resulting from
11overload work, including summer school, when the school
12district has certified to the System, and the System has
13approved the certification, that (i) the overload work is for
14the sole purpose of classroom instruction in excess of the
15standard number of classes for a full-time teacher in a school
16district during a school year and (ii) the salary increases are
17equal to or less than the rate of pay for classroom instruction
18computed on the teacher's current salary and work schedule.
19    When assessing payment for any amount due under subsection
20(f), the System shall exclude a salary increase resulting from
21a promotion (i) for which the employee is required to hold a
22certificate or supervisory endorsement issued by the State
23Teacher Certification Board that is a different certification
24or supervisory endorsement than is required for the teacher's
25previous position and (ii) to a position that has existed and
26been filled by a member for no less than one complete academic

 

 

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1year and the salary increase from the promotion is an increase
2that results in an amount no greater than the lesser of the
3average salary paid for other similar positions in the district
4requiring the same certification or the amount stipulated in
5the collective bargaining agreement for a similar position
6requiring the same certification.
7    When assessing payment for any amount due under subsection
8(f), the System shall exclude any payment to the teacher from
9the State of Illinois or the State Board of Education over
10which the employer does not have discretion, notwithstanding
11that the payment is included in the computation of final
12average salary.
13    (h) When assessing payment for any amount due under
14subsection (f), the System shall exclude any salary increase
15described in subsection (g) of this Section given on or after
16July 1, 2011 but before July 1, 2014 under a contract or
17collective bargaining agreement entered into, amended, or
18renewed on or after June 1, 2005 but before July 1, 2011.
19Notwithstanding any other provision of this Section, any
20payments made or salary increases given after June 30, 2014
21shall be used in assessing payment for any amount due under
22subsection (f) of this Section.
23    (i) The System shall prepare a report and file copies of
24the report with the Governor and the General Assembly by
25January 1, 2007 that contains all of the following information:
26        (1) The number of recalculations required by the

 

 

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1    changes made to this Section by Public Act 94-1057 for each
2    employer.
3        (2) The dollar amount by which each employer's
4    contribution to the System was changed due to
5    recalculations required by Public Act 94-1057.
6        (3) The total amount the System received from each
7    employer as a result of the changes made to this Section by
8    Public Act 94-4.
9        (4) The increase in the required State contribution
10    resulting from the changes made to this Section by Public
11    Act 94-1057.
12    (j) For purposes of determining the required State
13contribution to the System, the value of the System's assets
14shall be equal to the actuarial value of the System's assets,
15which shall be calculated as follows:
16    As of June 30, 2008, the actuarial value of the System's
17assets shall be equal to the market value of the assets as of
18that date. In determining the actuarial value of the System's
19assets for fiscal years after June 30, 2008, any actuarial
20gains or losses from investment return incurred in a fiscal
21year shall be recognized in equal annual amounts over the
225-year period following that fiscal year.
23    (k) For purposes of determining the required State
24contribution to the system for a particular year, the actuarial
25value of assets shall be assumed to earn a rate of return equal
26to the system's actuarially assumed rate of return.

 

 

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1(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
36-18-12; 97-813, eff. 7-13-12; 98-599, eff. 6-1-14.)
 
4    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
5    Sec. 18-131. Financing; employer contributions.
6    (a) The State of Illinois shall make contributions to this
7System by appropriations of the amounts which, together with
8the contributions of participants, net earnings on
9investments, and other income, will meet the costs of
10maintaining and administering this System on a 90% funded basis
11in accordance with actuarial recommendations.
12    (b) The Board shall determine the amount of State
13contributions required for each fiscal year on the basis of the
14actuarial tables and other assumptions adopted by the Board and
15the prescribed rate of interest, using the formula in
16subsection (c).
17    (c) For State fiscal years 2012 through 2015 2045, the
18minimum contribution to the System to be made by the State for
19each fiscal year shall be an amount determined by the System to
20be sufficient to bring the total assets of the System up to 90%
21of the total actuarial liabilities of the System by the end of
22State fiscal year 2045. In making these determinations, the
23required State contribution shall be calculated each year as a
24level percentage of payroll over the years remaining to and
25including fiscal year 2045 and shall be determined under the

 

 

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1projected unit credit actuarial cost method.
2    For State fiscal years 2016 through 2047, the minimum
3contribution to the System to be made by the State for each
4fiscal year shall be an amount determined by the System to be
5sufficient to bring the total assets of the System up to 100%
6of the total actuarial liabilities of the System by the end of
7State fiscal year 2047. In making these determinations, the
8required State contribution shall be calculated each year as a
9level dollar amount over the years remaining to and including
10fiscal year 2047 and shall be determined under the projected
11unit credit actuarial cost method.
12    For State fiscal years 1996 through 2005, the State
13contribution to the System, as a percentage of the applicable
14employee payroll, shall be increased in equal annual increments
15so that by State fiscal year 2011, the State is contributing at
16the rate required under this Section.
17    Notwithstanding any other provision of this Article, the
18total required State contribution for State fiscal year 2006 is
19$29,189,400.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2007 is
22$35,236,800.
23    For each of State fiscal years 2008 through 2009, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26from the required State contribution for State fiscal year

 

 

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12007, so that by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2010 is
5$78,832,000 and shall be made from the proceeds of bonds sold
6in fiscal year 2010 pursuant to Section 7.2 of the General
7Obligation Bond Act, less (i) the pro rata share of bond sale
8expenses determined by the System's share of total bond
9proceeds, (ii) any amounts received from the General Revenue
10Fund in fiscal year 2010, and (iii) any reduction in bond
11proceeds due to the issuance of discounted bonds, if
12applicable.
13    Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2011 is
15the amount recertified by the System on or before April 1, 2011
16pursuant to Section 18-140 and shall be made from the proceeds
17of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
18the General Obligation Bond Act, less (i) the pro rata share of
19bond sale expenses determined by the System's share of total
20bond proceeds, (ii) any amounts received from the General
21Revenue Fund in fiscal year 2011, and (iii) any reduction in
22bond proceeds due to the issuance of discounted bonds, if
23applicable.
24    Beginning in State fiscal year 2048 2046, the minimum State
25contribution for each fiscal year shall be the amount needed to
26maintain the total assets of the System at 90% of the total

 

 

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1actuarial liabilities of the System.
2    Amounts received by the System pursuant to Section 25 of
3the Budget Stabilization Act or Section 8.12 of the State
4Finance Act in any fiscal year do not reduce and do not
5constitute payment of any portion of the minimum State
6contribution required under this Article in that fiscal year.
7Such amounts shall not reduce, and shall not be included in the
8calculation of, the required State contributions under this
9Article in any future year until the System has reached a
10funding ratio of at least 90%. A reference in this Article to
11the "required State contribution" or any substantially similar
12term does not include or apply to any amounts payable to the
13System under Section 25 of the Budget Stabilization Act.
14    Notwithstanding any other provision of this Section, the
15required State contribution for State fiscal year 2005 and for
16fiscal year 2008 and each fiscal year thereafter, as calculated
17under this Section and certified under Section 18-140, shall
18not exceed an amount equal to (i) the amount of the required
19State contribution that would have been calculated under this
20Section for that fiscal year if the System had not received any
21payments under subsection (d) of Section 7.2 of the General
22Obligation Bond Act, minus (ii) the portion of the State's
23total debt service payments for that fiscal year on the bonds
24issued in fiscal year 2003 for the purposes of that Section
257.2, as determined and certified by the Comptroller, that is
26the same as the System's portion of the total moneys

 

 

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1distributed under subsection (d) of Section 7.2 of the General
2Obligation Bond Act. In determining this maximum for State
3fiscal years 2008 through 2010, however, the amount referred to
4in item (i) shall be increased, as a percentage of the
5applicable employee payroll, in equal increments calculated
6from the sum of the required State contribution for State
7fiscal year 2007 plus the applicable portion of the State's
8total debt service payments for fiscal year 2007 on the bonds
9issued in fiscal year 2003 for the purposes of Section 7.2 of
10the General Obligation Bond Act, so that, by State fiscal year
112011, the State is contributing at the rate otherwise required
12under this Section.
13    (d) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17    As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24    (e) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

 

 

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1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
47-13-12.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.