Rep. Bill Mitchell

Filed: 4/17/2015

 

 


 

 


 
09900HB1725ham001LRB099 07914 RPS 34398 a

1
AMENDMENT TO HOUSE BILL 1725

2    AMENDMENT NO. ______. Amend House Bill 1725 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 18-111, 18-124, 18-125, 18-125.1, 18-127,
618-128.01, 18-131, 18-132, 18-133, 18-140, 18-169, 20-106,
720-121, 20-123, 20-124, and 20-125 and by adding Sections
818-110.1, 18-110.2, 18-133.5, 18-175, and 18-176 as follows:
 
9    (40 ILCS 5/18-110.1 new)
10    Sec. 18-110.1. Tier 1 participant; Tier 2 participant.
11    "Tier 1 participant": A participant who first became a
12participant before January 1, 2011.
13    "Tier 2 participant": A participant who first became a
14participant on or after January 1, 2011.
 
15    (40 ILCS 5/18-110.2 new)

 

 

09900HB1725ham001- 2 -LRB099 07914 RPS 34398 a

1    Sec. 18-110.2. Tier 1 retiree. "Tier 1 retiree" means a
2former Tier 1 participant who has made the election to retire
3and has terminated service.
 
4    (40 ILCS 5/18-111)  (from Ch. 108 1/2, par. 18-111)
5    Sec. 18-111. Salary. "Salary": The total compensation paid
6for personal services as a judge, by the State, or by the State
7and a county as authorized by law. However, in the event that
8federal law results in any judge receiving imputed income based
9on the value of group term life insurance provided by the
10State, such imputed income shall not be included in salary for
11the purposes of this Article.
12    Notwithstanding any other provision of this Code, the
13annual salary of a Tier 1 participant for the purposes of this
14Code shall not exceed, for periods of service in a term of
15office beginning on or after the effective date of this
16amendatory Act of the 99th General Assembly, the greater of (i)
17the annual limitation determined from time to time under
18subsection (b-5) of Section 1-160 of this Code or (ii) the
19annualized salary of the participant on the last day of that
20participant's last term of office beginning before that
21effective date.
22(Source: P.A. 86-273.)
 
23    (40 ILCS 5/18-124)  (from Ch. 108 1/2, par. 18-124)
24    Sec. 18-124. Retirement annuities - conditions for

 

 

09900HB1725ham001- 3 -LRB099 07914 RPS 34398 a

1eligibility.
2    (a) This subsection (a) applies only to a Tier 1
3participant who first serves as a judge before the effective
4date of this amendatory Act of the 96th General Assembly.
5    A participant whose employment as a judge is terminated,
6regardless of age or cause is entitled to a retirement annuity
7beginning on the date specified in a written application
8subject to the following:
9        (1) the date the annuity begins is subsequent to the
10    date of final termination of employment, or the date 30
11    days prior to the receipt of the application by the board
12    for annuities based on disability, or one year before the
13    receipt of the application by the board for annuities based
14    on attained age;
15        (2) the participant is at least age 55, or has become
16    permanently disabled and as a consequence is unable to
17    perform the duties of his or her office;
18        (3) the participant has at least 10 years of service
19    credit except that a participant terminating service after
20    June 30 1975, with at least 6 years of service credit,
21    shall be entitled to a retirement annuity at age 62 or
22    over;
23        (4) the participant is not receiving or entitled to
24    receive, at the date of retirement, any salary from an
25    employer for service currently performed.
26    (a-1) Notwithstanding subsection (a) of this Section, for a

 

 

09900HB1725ham001- 4 -LRB099 07914 RPS 34398 a

1Tier 1 participant who begins receiving a retirement annuity
2under this Section on or after July 1, 2016, the required
3retirement age under subsection (a) is increased as follows,
4based on the Tier 1 participant's age on June 1, 2016:
5        (1) If he or she is at least age 46 on June 1, 2016,
6    then the required retirement ages under subsection (a)
7    remain unchanged.
8        (2) If he or she is at least age 45 but less than age 46
9    on June 1, 2016, then the required retirement ages under
10    subsection (a) are increased by 4 months.
11        (3) If he or she is at least age 44 but less than age 45
12    on June 1, 2016, then the required retirement ages under
13    subsection (a) are increased by 8 months.
14        (4) If he or she is at least age 43 but less than age 44
15    on June 1, 2016, then the required retirement ages under
16    subsection (a) are increased by 12 months.
17        (5) If he or she is at least age 42 but less than age 43
18    on June 1, 2016, then the required retirement ages under
19    subsection (a) are increased by 16 months.
20        (6) If he or she is at least age 41 but less than age 42
21    on June 1, 2016, then the required retirement ages under
22    subsection (a) are increased by 20 months.
23        (7) If he or she is at least age 40 but less than age 41
24    on June 1, 2016, then the required retirement ages under
25    subsection (a) are increased by 24 months.
26        (8) If he or she is at least age 39 but less than age 40

 

 

09900HB1725ham001- 5 -LRB099 07914 RPS 34398 a

1    on June 1, 2016, then the required retirement ages under
2    subsection (a) are increased by 28 months.
3        (9) If he or she is at least age 38 but less than age 39
4    on June 1, 2016, then the required retirement ages under
5    subsection (a) are increased by 32 months.
6        (10) If he or she is at least age 37 but less than age
7    38 on June 1, 2016, then the required retirement ages under
8    subsection (a) are increased by 36 months.
9        (11) If he or she is at least age 36 but less than age
10    37 on June 1, 2016, then the required retirement ages under
11    subsection (a) are increased by 40 months.
12        (12) If he or she is at least age 35 but less than age
13    36 on June 1, 2016, then the required retirement ages under
14    subsection (a) are increased by 44 months.
15        (13) If he or she is at least age 34 but less than age
16    35 on June 1, 2016, then the required retirement ages under
17    subsection (a) are increased by 48 months.
18        (14) If he or she is at least age 33 but less than age
19    34 on June 1, 2016, then the required retirement ages under
20    subsection (a) are increased by 52 months.
21        (15) If he or she is at least age 32 but less than age
22    33 on June 1, 2016, then the required retirement ages under
23    subsection (a) are increased by 56 months.
24        (16) If he or she is less than age 32 on June 1, 2016,
25    then the required retirement ages under subsection (a) are
26    increased by 60 months.

 

 

09900HB1725ham001- 6 -LRB099 07914 RPS 34398 a

1    Notwithstanding Section 1-103.1, this subsection (a-1)
2applies without regard to whether or not the Tier 1 participant
3is in active service under this Article on or after the
4effective date of this amendatory Act of the 99th General
5Assembly.
6    (b) This subsection (b) applies only to a Tier 2
7participant who first serves as a judge on or after the
8effective date of this amendatory Act of the 96th General
9Assembly.
10    A participant who has at least 8 years of creditable
11service is entitled to a retirement annuity when he or she has
12attained age 67.
13    A member who has attained age 62 and has at least 8 years
14of service credit may elect to receive the lower retirement
15annuity provided in subsection (d) of Section 18-125 of this
16Code.
17(Source: P.A. 96-889, eff. 1-1-11.)
 
18    (40 ILCS 5/18-125)  (from Ch. 108 1/2, par. 18-125)
19    Sec. 18-125. Retirement annuity amount.
20    (a) The annual retirement annuity for a participant who
21terminated service as a judge prior to July 1, 1971 shall be
22based on the law in effect at the time of termination of
23service.
24    (b) Except as provided in subsection (b-5), effective July
251, 1971, the retirement annuity for any participant in service

 

 

09900HB1725ham001- 7 -LRB099 07914 RPS 34398 a

1on or after such date shall be 3 1/2% of final average salary,
2as defined in this Section, for each of the first 10 years of
3service, and 5% of such final average salary for each year of
4service on excess of 10.
5    For purposes of this Section, final average salary for a
6Tier 1 participant who first serves as a judge before August
710, 2009 (the effective date of Public Act 96-207) shall be:
8        (1) the average salary for the last 4 years of credited
9    service as a judge for a participant who terminates service
10    before July 1, 1975.
11        (2) for a participant who terminates service after June
12    30, 1975 and before July 1, 1982, the salary on the last
13    day of employment as a judge.
14        (3) for any participant who terminates service after
15    June 30, 1982 and before January 1, 1990, the average
16    salary for the final year of service as a judge.
17        (4) for a participant who terminates service on or
18    after January 1, 1990 but before the effective date of this
19    amendatory Act of 1995, the salary on the last day of
20    employment as a judge.
21        (5) for a participant who terminates service on or
22    after the effective date of this amendatory Act of 1995,
23    the salary on the last day of employment as a judge, or the
24    highest salary received by the participant for employment
25    as a judge in a position held by the participant for at
26    least 4 consecutive years, whichever is greater.

 

 

09900HB1725ham001- 8 -LRB099 07914 RPS 34398 a

1    However, in the case of a participant who elects to
2discontinue contributions as provided in subdivision (a)(2) of
3Section 18-133, the time of such election shall be considered
4the last day of employment in the determination of final
5average salary under this subsection.
6    For a Tier 1 participant who first serves as a judge on or
7after August 10, 2009 (the effective date of Public Act 96-207)
8and before January 1, 2011 (the effective date of Public Act
996-889), final average salary shall be the average monthly
10salary obtained by dividing the total salary of the participant
11during the period of: (1) the 48 consecutive months of service
12within the last 120 months of service in which the total
13compensation was the highest, or (2) the total period of
14service, if less than 48 months, by the number of months of
15service in that period.
16    The maximum retirement annuity for any participant shall be
1785% of final average salary.
18    (b-5) Notwithstanding any other provision of this Article,
19for a Tier 2 participant who first serves as a judge on or
20after January 1, 2011 (the effective date of Public Act
2196-889), the annual retirement annuity is 3% of the
22participant's final average salary for each year of service.
23The maximum retirement annuity payable shall be 60% of the
24participant's final average salary.
25    Except as otherwise provided below, for a Tier 2 For a
26participant who first serves as a judge on or after January 1,

 

 

09900HB1725ham001- 9 -LRB099 07914 RPS 34398 a

12011 (the effective date of Public Act 96-889), final average
2salary shall be the average monthly salary obtained by dividing
3the total salary of the judge during the 96 consecutive months
4of service within the last 120 months of service in which the
5total salary was the highest by the number of months of service
6in that period; however, for periods of service in a term of
7office beginning on or after January 1, 2011 and before the
8effective date of this amendatory Act of the 99th General
9Assembly, the annual salary may not exceed $106,800, except
10that that amount shall annually thereafter be increased by the
11lesser of (i) 3% of that amount, including all previous
12adjustments, or (ii) the annual unadjusted percentage increase
13(but not less than zero) in the consumer price index-u for the
1412 months ending with the September preceding each November 1.
15"Consumer price index-u" means the index published by the
16Bureau of Labor Statistics of the United States Department of
17Labor that measures the average change in prices of goods and
18services purchased by all urban consumers, United States city
19average, all items, 1982-84 = 100. The new amount resulting
20from each annual adjustment shall be determined by the Public
21Pension Division of the Department of Insurance and made
22available to the Board by November 1st of each year until there
23is no longer any such participant who is in service in a term
24of office that began before the effective date of this
25amendatory Act of the 99th General Assembly.
26    Notwithstanding any other provision of this Section, in

 

 

09900HB1725ham001- 10 -LRB099 07914 RPS 34398 a

1determining the final average salary of a Tier 2 participant
2who is in service in a term of office beginning on or after the
3effective date of this amendatory Act of the 99th General
4Assembly, the Tier 2 participant's salary for periods of
5service in a term of office beginning on or after that
6effective date shall not exceed the limitation on salary
7determined from time to time under subsection (b-5) of Section
81-160 of this Code.
9    (c) The retirement annuity for a participant who retires
10prior to age 60 with less than 28 years of service in the
11System shall be reduced 1/2 of 1% for each month that the
12participant's age is under 60 years at the time the annuity
13commences. However, for a participant who retires on or after
14the effective date of this amendatory Act of the 91st General
15Assembly, the percentage reduction in retirement annuity
16imposed under this subsection shall be reduced by 5/12 of 1%
17for every month of service in this System in excess of 20
18years, and therefore a participant with at least 26 years of
19service in this System may retire at age 55 without any
20reduction in annuity.
21    The reduction in retirement annuity imposed by this
22subsection shall not apply in the case of retirement on account
23of disability.
24    (d) Notwithstanding any other provision of this Article,
25for a Tier 2 participant who first serves as a judge on or
26after January 1, 2011 (the effective date of Public Act 96-889)

 

 

09900HB1725ham001- 11 -LRB099 07914 RPS 34398 a

1and who is retiring after attaining age 62, the retirement
2annuity shall be reduced by 1/2 of 1% for each month that the
3participant's age is under age 67 at the time the annuity
4commences.
5(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11;
696-1000, eff. 7-2-10; 96-1490, eff. 1-1-11.)
 
7    (40 ILCS 5/18-125.1)  (from Ch. 108 1/2, par. 18-125.1)
8    Sec. 18-125.1. Automatic increase in retirement annuity.
9    (a) Except as otherwise provided in this Section, a Tier 1
10A participant who retires from service after June 30, 1969,
11shall, in January of the year next following the year in which
12the first anniversary of retirement occurs, and in January of
13each year thereafter, have the amount of his or her originally
14granted retirement annuity increased as follows: for each year
15up to and including 1971, 1 1/2%; for each year from 1972
16through 1979 inclusive, 2%; and for 1980 and each year
17thereafter, 3%.
18    (a-1) Notwithstanding subsection (a), but subject to the
19provisions of subsection (a-2), for a Tier 1 retiree, all
20automatic increases payable under subsection (a) on or after
21the effective date of this amendatory Act of the 99th General
22Assembly shall be calculated as 3% of the lesser of (1) the
23total annuity payable at the time of the increase, including
24previous increases granted, or (2) $1,000 multiplied by the
25number of years of creditable service upon which the annuity is

 

 

09900HB1725ham001- 12 -LRB099 07914 RPS 34398 a

1based.
2    Beginning January 1, 2017, the $1,000 referred to in item
3(2) of this subsection (a-1) shall be increased on each January
41 by the annual unadjusted percentage increase (but not less
5than zero) in the consumer price index-u for the 12 months
6ending with the preceding September; these adjustments shall be
7cumulative and compounded. For the purposes of this subsection
8(a-1), "consumer price index-u" means the index published by
9the Bureau of Labor Statistics of the United States Department
10of Labor that measures the average change in prices of goods
11and services purchased by all urban consumers, United States
12city average, all items, 1982-84 = 100. The new dollar amount
13resulting from each annual adjustment shall be determined by
14the Public Pension Division of the Department of Insurance and
15made available to the System by November 1 of each year.
16    This subsection (a-1) is applicable without regard to
17whether the person is in service on or after the effective date
18of this amendatory Act of the 99th General Assembly.
19    (a-2) Notwithstanding subsections (a) and (a-1), for an
20active or inactive Tier 1 participant who has not begun to
21receive a retirement annuity under this Article before July 1,
222016:
23        (1) the second automatic annual increase payable under
24    subsection (a) shall be at the rate of 0% of the total
25    annuity payable at the time of the increase if he or she is
26    at least age 50 on the effective date of this amendatory

 

 

09900HB1725ham001- 13 -LRB099 07914 RPS 34398 a

1    Act;
2        (2) the second, fourth, and sixth automatic annual
3    increases payable under subsection (a) shall be at the rate
4    of 0% of the total annuity payable at the time of the
5    increase if he or she is at least age 47 but less than age
6    50 on the effective date of this amendatory Act;
7        (3) the second, fourth, sixth, and eighth automatic
8    annual increases payable under subsection (a) shall be at
9    the rate of 0% of the total annuity payable at the time of
10    the increase if he or she is at least age 44 but less than
11    age 47 on the effective date of this amendatory Act; and
12        (4) the second, fourth, sixth, eighth, and tenth
13    automatic annual increases payable under subsection (a)
14    shall be at the rate of 0% of the total annuity payable at
15    the time of the increase if he or she is less than age 44 on
16    the effective date of this amendatory Act.
17    For the purposes of Section 1-103.1, this subsection (a-2)
18is applicable without regard to whether the person is in
19service on or after the effective date of this amendatory Act
20of the 99th General Assembly.
21    (b) Notwithstanding any other provision of this Section
22Article, a retirement annuity for a Tier 2 participant who
23first serves as a judge on or after January 1, 2011 (the
24effective date of Public Act 96-889) shall be increased in
25January of the year next following the year in which the first
26anniversary of retirement occurs, but in no event prior to age

 

 

09900HB1725ham001- 14 -LRB099 07914 RPS 34398 a

167, and in January of each year thereafter, by an amount
2calculated as a percentage of the originally granted retirement
3annuity, equal to 3% or one-half of the annual percentage
4increase (but not less than zero) in the consumer price index-u
5for the 12 months ending with the preceding September, as
6determined by the Public Pension Division of the Department of
7Insurance and reported to the System by November 1 of each year
8under subsection (b-5) of Section 18-125, whichever is less, of
9the retirement annuity then being paid.
10    The changes made to this subsection (b) by this amendatory
11Act of the 99th General Assembly shall apply to increases
12provided under this subsection on or after the effective date
13of this amendatory Act without regard to whether service
14terminated before that effective date.
15    (c) This Section is not applicable to a participant who
16retires before he or she has made contributions at the rate
17prescribed in Section 18-133 for automatic increases for not
18less than the equivalent of one full year, unless such a
19participant arranges to pay the system the amount required to
20bring the total contributions for the automatic increase to the
21equivalent of one year's contribution based upon his or her
22last year's salary.
23    This Section is applicable to all participants in service
24after June 30, 1969 unless a participant has elected, prior to
25September 1, 1969, in a written direction filed with the board
26not to be subject to the provisions of this Section. Any

 

 

09900HB1725ham001- 15 -LRB099 07914 RPS 34398 a

1participant in service on or after July 1, 1992 shall have the
2option of electing prior to April 1, 1993, in a written
3direction filed with the board, to be covered by the provisions
4of the 1969 amendatory Act. Such participant shall be required
5to make the aforesaid additional contributions with compound
6interest at 4% per annum.
7    (d) Any Tier 1 participant who has become eligible to
8receive the maximum rate of annuity and who resumes service as
9a judge after receiving a retirement annuity under this Article
10shall have the amount of his or her retirement annuity
11increased by 3% of the originally granted annuity amount for
12each year of such resumed service, beginning in January of the
13year next following the date of such resumed service, upon
14subsequent termination of such resumed service. The increases
15accruing under this subsection (d) after the effective date of
16this amendatory Act of the 99th General Assembly shall accrue
17at the rate provided in subsection (a-1).
18    (e) Beginning January 1, 1990 and until the effective date
19of this amendatory Act of the 99th General Assembly, all
20automatic annual increases payable under this Section shall be
21calculated as a percentage of the total annuity payable at the
22time of the increase, including previous increases granted
23under this Article.
24(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
25    (40 ILCS 5/18-127)  (from Ch. 108 1/2, par. 18-127)

 

 

09900HB1725ham001- 16 -LRB099 07914 RPS 34398 a

1    Sec. 18-127. Retirement annuity - suspension on
2reemployment.
3    (a) A participant receiving a retirement annuity who is
4regularly employed for compensation by an employer other than a
5county, in any capacity, shall have his or her retirement
6annuity payments suspended during such employment. Upon
7termination of such employment, retirement annuity payments at
8the previous rate shall be resumed.
9    If such a participant resumes service as a judge, he or she
10shall receive credit for any additional service. Upon
11subsequent retirement, his or her retirement annuity shall be
12the amount previously granted, plus the amount earned by the
13additional judicial service under the provisions in effect
14during the period of such additional service. However, if the
15participant was receiving the maximum rate of annuity at the
16time of re-employment, he or she may elect, in a written
17direction filed with the board, not to receive any additional
18service credit during the period of re-employment. In such
19case, contributions shall not be required during the period of
20re-employment. Any such election shall be irrevocable.
21    (b) Beginning January 1, 1991, any participant receiving a
22retirement annuity who accepts temporary employment from an
23employer other than a county for a period not exceeding 75
24working days in any calendar year shall not be deemed to be
25regularly employed for compensation or to have resumed service
26as a judge for the purposes of this Article. A day shall be

 

 

09900HB1725ham001- 17 -LRB099 07914 RPS 34398 a

1considered a working day if the annuitant performs on it any of
2his duties under the temporary employment agreement.
3    (c) Except as provided in subsection (a), beginning January
41, 1993, retirement annuities shall not be subject to
5suspension upon resumption of employment for an employer, and
6any retirement annuity that is then so suspended shall be
7reinstated on that date.
8    (d) The changes made in this Section by this amendatory Act
9of 1993 shall apply to judges no longer in service on its
10effective date, as well as to judges serving on or after that
11date.
12    (e) A participant receiving a retirement annuity under this
13Article who serves as a part-time employee in any of the
14following positions: Legislative Inspector General, Special
15Legislative Inspector General, employee of the Office of the
16Legislative Inspector General, Executive Director of the
17Legislative Ethics Commission, or staff of the Legislative
18Ethics Commission, but has not elected to participate in the
19Article 14 System with respect to that service, shall not be
20deemed to be regularly employed for compensation by an employer
21other than a county, nor to have resumed service as a judge, on
22the basis of that service, and the retirement annuity payments
23and other benefits of that person under this Code shall not be
24suspended, diminished, or otherwise impaired solely as a
25consequence of that service. This subsection (e) applies
26without regard to whether the person is in service as a judge

 

 

09900HB1725ham001- 18 -LRB099 07914 RPS 34398 a

1under this Article on or after the effective date of this
2amendatory Act of the 93rd General Assembly. In this
3subsection, a "part-time employee" is a person who is not
4required to work at least 35 hours per week.
5    (f) A participant receiving a retirement annuity under this
6Article who has made an election under Section 1-123 and who is
7serving either as legal counsel in the Office of the Governor
8or as Chief Deputy Attorney General shall not be deemed to be
9regularly employed for compensation by an employer other than a
10county, nor to have resumed service as a judge, on the basis of
11that service, and the retirement annuity payments and other
12benefits of that person under this Code shall not be suspended,
13diminished, or otherwise impaired solely as a consequence of
14that service. This subsection (f) applies without regard to
15whether the person is in service as a judge under this Article
16on or after the effective date of this amendatory Act of the
1793rd General Assembly.
18    (g) Notwithstanding any other provision of this Article, if
19a former Tier 2 person who first becomes a participant under
20this System on or after January 1, 2011 (the effective date of
21this amendatory Act of the 96th General Assembly) is receiving
22a retirement annuity under this Article and becomes a member or
23participant under this Article or any other Article of this
24Code and is employed on a full-time basis, then the person's
25retirement annuity under this System shall be suspended during
26that employment. Upon termination of that employment, the

 

 

09900HB1725ham001- 19 -LRB099 07914 RPS 34398 a

1person's retirement annuity shall resume and, if appropriate,
2be recalculated under the applicable provisions of this
3Article.
4(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
5    (40 ILCS 5/18-128.01)  (from Ch. 108 1/2, par. 18-128.01)
6    Sec. 18-128.01. Amount of survivor's annuity.
7    (a) Upon the death of an annuitant, his or her surviving
8spouse shall be entitled to a survivor's annuity of 66 2/3% of
9the annuity the annuitant was receiving immediately prior to
10his or her death, inclusive of annual increases in the
11retirement annuity to the date of death.
12    (b) Upon the death of an active participant, his or her
13surviving spouse shall receive a survivor's annuity of 66 2/3%
14of the annuity earned by the participant as of the date of his
15or her death, determined without regard to whether the
16participant had attained age 60 as of that time, or 7 1/2% of
17the last salary of the decedent, whichever is greater.
18    (c) Upon the death of a participant who had terminated
19service with at least 10 years of service, his or her surviving
20spouse shall be entitled to a survivor's annuity of 66 2/3% of
21the annuity earned by the deceased participant at the date of
22death.
23    (d) Upon the death of an annuitant, active participant, or
24participant who had terminated service with at least 10 years
25of service, each surviving child under the age of 18 or

 

 

09900HB1725ham001- 20 -LRB099 07914 RPS 34398 a

1disabled as defined in Section 18-128 shall be entitled to a
2child's annuity in an amount equal to 5% of the decedent's
3final salary, not to exceed in total for all such children the
4greater of 20% of the decedent's last salary or 66 2/3% of the
5annuity received or earned by the decedent as provided under
6subsections (a) and (b) of this Section. This child's annuity
7shall be paid whether or not a survivor's annuity was elected
8under Section 18-123.
9    (e) The changes made in the survivor's annuity provisions
10by Public Act 82-306 shall apply to the survivors of a deceased
11participant or annuitant whose death occurs on or after August
1221, 1981.
13    (f) Beginning January 1, 1990, every survivor's annuity
14shall be increased (1) on each January 1 occurring on or after
15the commencement of the annuity if the deceased member died
16while receiving a retirement annuity, or (2) in other cases, on
17each January 1 occurring on or after the first anniversary of
18the commencement of the annuity, by an amount equal to 3% of
19the current amount of the annuity, including any previous
20increases under this Article. Such increases shall apply
21without regard to whether the deceased member was in service on
22or after the effective date of this amendatory Act of 1991, but
23shall not accrue for any period prior to January 1, 1990.
24    (g) Notwithstanding any other provision of this Article,
25the initial survivor's annuity for a survivor of a Tier 2
26participant who first serves as a judge after January 1, 2011

 

 

09900HB1725ham001- 21 -LRB099 07914 RPS 34398 a

1(the effective date of Public Act 96-889) shall be in the
2amount of 66 2/3% of the annuity received or earned by the
3decedent, and shall be increased (1) on each January 1
4occurring on or after the commencement of the annuity if the
5deceased participant died while receiving a retirement
6annuity, or (2) in other cases, on each January 1 occurring on
7or after the first anniversary of the commencement of the
8annuity, but in no event prior to age 67, by an amount equal to
93% or the annual unadjusted percentage increase in the consumer
10price index-u as determined by the Public Pension Division of
11the Department of Insurance under subsection (b-5) of Section
1218-125, whichever is less, of the survivor's annuity then being
13paid.
14(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
 
15    (40 ILCS 5/18-131)  (from Ch. 108 1/2, par. 18-131)
16    Sec. 18-131. Financing; employer contributions.
17    (a) The State of Illinois shall make contributions to this
18System by appropriations of the amounts which, together with
19the contributions of participants, net earnings on
20investments, and other income, will meet the costs of
21maintaining and administering this System on a 100% 90% funded
22basis in accordance with actuarial recommendations by the end
23of State fiscal year 2046.
24    (b) The Board shall determine the amount of State
25contributions required for each fiscal year on the basis of the

 

 

09900HB1725ham001- 22 -LRB099 07914 RPS 34398 a

1actuarial tables and other assumptions adopted by the Board and
2the prescribed rate of interest, using the formula in
3subsection (c).
4    (c) For State fiscal years 2017 through 2046, the minimum
5contribution to the System to be made by the State for each
6fiscal year shall be an amount determined by the System to be
7equal to the sum of (1) the State's portion of the projected
8normal cost for that fiscal year, plus (2) an amount sufficient
9to bring the total assets of the System up to 100% of the total
10actuarial liabilities of the System by the end of State fiscal
11year 2046. In making these determinations, the required State
12contribution shall be calculated each year as a level
13percentage of payroll over the years remaining to and including
14fiscal year 2046 and shall be determined under the projected
15unit cost method for fiscal year 2017 and under the entry age
16normal actuarial cost method for fiscal years 2018 through
172046.
18    For State fiscal years 2012 through 2016 2045, 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
21sufficient to bring the total assets of the System up to 90% of
22the total actuarial liabilities of the System by the end of
23State fiscal year 2045. In making these determinations, the
24required State contribution shall be calculated each year as a
25level percentage of payroll over the years remaining to and
26including fiscal year 2045 and shall be determined under the

 

 

09900HB1725ham001- 23 -LRB099 07914 RPS 34398 a

1projected unit credit actuarial cost method.
2    For State fiscal years 1996 through 2005, the State
3contribution to the System, as a percentage of the applicable
4employee payroll, shall be increased in equal annual increments
5so that by State fiscal year 2011, the State is contributing at
6the rate required under this Section.
7    Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2006 is
9$29,189,400.
10    Notwithstanding any other provision of this Article, the
11total required State contribution for State fiscal year 2007 is
12$35,236,800.
13    For each of State fiscal years 2008 through 2009, the State
14contribution to the System, as a percentage of the applicable
15employee payroll, shall be increased in equal annual increments
16from the required State contribution for State fiscal year
172007, so that by State fiscal year 2011, the State is
18contributing at the rate otherwise required under this Section.
19    Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2010 is
21$78,832,000 and shall be made from the proceeds of bonds sold
22in fiscal year 2010 pursuant to Section 7.2 of the General
23Obligation Bond Act, less (i) the pro rata share of bond sale
24expenses determined by the System's share of total bond
25proceeds, (ii) any amounts received from the General Revenue
26Fund in fiscal year 2010, and (iii) any reduction in bond

 

 

09900HB1725ham001- 24 -LRB099 07914 RPS 34398 a

1proceeds due to the issuance of discounted bonds, if
2applicable.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2011 is
5the amount recertified by the System on or before April 1, 2011
6pursuant to Section 18-140 and shall be made from the proceeds
7of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
8the General Obligation Bond Act, less (i) the pro rata share of
9bond sale expenses determined by the System's share of total
10bond proceeds, (ii) any amounts received from the General
11Revenue Fund in fiscal year 2011, and (iii) any reduction in
12bond proceeds due to the issuance of discounted bonds, if
13applicable.
14    Beginning in State fiscal year 2048 2046, the minimum State
15contribution for each fiscal year shall be the amount needed to
16maintain the total assets of the System at 100% 90% of the
17total actuarial 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

 

 

09900HB1725ham001- 25 -LRB099 07914 RPS 34398 a

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 2016, as calculated under this Section and
8certified under Section 18-140, 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

 

 

09900HB1725ham001- 26 -LRB099 07914 RPS 34398 a

1Act, so that, by State fiscal year 2011, the State is
2contributing at the rate otherwise required under this Section.
3    (d) For purposes of determining the required State
4contribution to the System, the value of the System's assets
5shall be equal to the actuarial value of the System's assets,
6which shall be calculated as follows:
7    As of June 30, 2008, the actuarial value of the System's
8assets shall be equal to the market value of the assets as of
9that date. In determining the actuarial value of the System's
10assets for fiscal years after June 30, 2008, any actuarial
11gains or losses from investment return incurred in a fiscal
12year shall be recognized in equal annual amounts over the
135-year period following that fiscal year.
14    (e) For purposes of determining the required State
15contribution to the system for a particular year, the actuarial
16value of assets shall be assumed to earn a rate of return equal
17to the system's actuarially assumed rate of return.
18(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1996-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
207-13-12.)
 
21    (40 ILCS 5/18-132)  (from Ch. 108 1/2, par. 18-132)
22    Sec. 18-132. Obligations of State; funding guarantee.
23    (a) The payment of (1) the required State contributions,
24(2) all benefits granted under this system, and (3) all
25expenses in connection with the administration and operation

 

 

09900HB1725ham001- 27 -LRB099 07914 RPS 34398 a

1thereof are the obligations of the State to the extent
2specified in this Article.
3    (b) Beginning July 1, 2016, the State shall be obligated to
4contribute to the System in each State fiscal year an amount
5not less than the sum of (i) the State's normal cost for the
6year and (ii) the portion of the unfunded accrued liability
7assigned to that year by law. Notwithstanding any other
8provision of law, if the State fails to pay an amount required
9under this subsection, it shall be the obligation of the Board
10to seek payment of the required amount in compliance with the
11provisions of this Section and, if the amount remains unpaid,
12to bring a mandamus action in the Supreme Court of Illinois to
13compel the State to make the required payment.
14    If the System submits a voucher for contributions required
15under Section 18-131 and the State fails to pay that voucher
16within 90 days of its receipt, the Board shall submit a written
17request to the Comptroller seeking payment. A copy of the
18request shall be filed with the Secretary of State, and the
19Secretary of State shall provide a copy to the Governor and
20General Assembly. No earlier than the 16th day after the System
21files the request with the Comptroller and Secretary of State,
22if the amount remains unpaid the Board shall commence a
23mandamus action in the Supreme Court of Illinois to compel the
24Comptroller to satisfy the voucher.
25    This subsection (b) constitutes an express waiver of the
26State's sovereign immunity solely to the extent that it permits

 

 

09900HB1725ham001- 28 -LRB099 07914 RPS 34398 a

1the Board to commence a mandamus action in the Supreme Court of
2Illinois to compel the Comptroller to pay a voucher for the
3contributions required under Section 18-131.
4    (c) Beginning in State fiscal year 2017, the State shall be
5obligated to make the transfers set forth in subsections (c-5)
6and (c-10) of Section 20 of the Budget Stabilization Act and to
7pay to the System its proportionate share of the transferred
8amounts in accordance with Section 25 of the Budget
9Stabilization Act. Notwithstanding any other provision of law,
10if the State fails to transfer an amount required under this
11subsection or to pay to the System its proportionate share of
12the transferred amount in accordance with Section 25 of the
13Budget Stabilization Act, it shall be the obligation of the
14Board to seek transfer or payment of the required amount in
15compliance with the provisions of this Section and, if the
16required amount remains untransferred or the required payment
17remains unpaid, to bring a mandamus action in the Supreme Court
18of Illinois to compel the State to make the required transfer
19or payment or both, as the case may be.
20    If the State fails to make a transfer required under
21subsection (c-5) or (c-10) of Section 20 of the Budget
22Stabilization Act or a payment to the System required under
23Section 25 of that Act, the Board shall submit a written
24request to the Comptroller seeking payment. A copy of the
25request shall be filed with the Secretary of State, and the
26Secretary of State shall provide a copy to the Governor and

 

 

09900HB1725ham001- 29 -LRB099 07914 RPS 34398 a

1General Assembly. No earlier than the 16th day after the System
2files the request with the Comptroller and Secretary of State,
3if the required amount remains untransferred or the required
4payment remains unpaid, the Board shall commence a mandamus
5action in the Supreme Court of Illinois to compel the
6Comptroller to make the required transfer or payment or both,
7as the case may be.
8    This subsection (c) constitutes an express waiver of the
9State's sovereign immunity solely to the extent that it permits
10the Board to commence a mandamus action in the Supreme Court of
11Illinois to compel the Comptroller to make a transfer required
12under subsection (c-5) or (c-10) of Section 20 of the Budget
13Stabilization Act and to pay to the System its proportionate
14share of the transferred amount in accordance with Section 25
15of the Budget Stabilization Act.
16    The obligations created by this subsection (c) expire when
17all of the requirements of subsections (c-5) and (c-10) of
18Section 20 of the Budget Stabilization Act and Section 25 of
19the Budget Stabilization Act have been met.
20    (e) Any payments and transfers required to be made by the
21State pursuant to subsection (b) or (c) are expressly
22subordinate to the payment of the principal, interest, and
23premium, if any, on any bonded debt obligation of the State or
24any other State-created entity, either currently outstanding
25or to be issued, for which the source of repayment or security
26thereon is derived directly or indirectly from tax revenues

 

 

09900HB1725ham001- 30 -LRB099 07914 RPS 34398 a

1collected by the State or any other State-created entity.
2Payments on such bonded obligations include any statutory fund
3transfers or other prefunding mechanisms or formulas set forth,
4now or hereafter, in State law or bond indentures, into debt
5service funds or accounts of the State related to such bond
6obligations, consistent with the payment schedules associated
7with such obligations.
8(Source: P.A. 83-1440.)
 
9    (40 ILCS 5/18-133)  (from Ch. 108 1/2, par. 18-133)
10    Sec. 18-133. Financing; employee contributions.
11    (a) Effective July 1, 1967, each participant is required to
12contribute 7 1/2% of each payment of salary toward the
13retirement annuity. Such contributions shall continue during
14the entire time the participant is in service, with the
15following exceptions:
16        (1) Contributions for the retirement annuity are not
17    required on salary received after 18 years of service by
18    persons who were participants before January 2, 1954.
19        (2) A participant who continues to serve as a judge
20    after becoming eligible to receive the maximum rate of
21    annuity may elect, through a written direction filed with
22    the Board, to discontinue contributing to the System. Any
23    such option elected by a judge shall be irrevocable unless
24    prior to January 1, 2000, and while continuing to serve as
25    judge, the judge (A) files with the Board a letter

 

 

09900HB1725ham001- 31 -LRB099 07914 RPS 34398 a

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

 

 

09900HB1725ham001- 32 -LRB099 07914 RPS 34398 a

1    during that 90-day period; any other election under this
2    subdivision (a)(3) becomes effective on the first of the
3    month following the date of the election. An election to
4    limit contributions under this subdivision (a)(3) is
5    irrevocable. Service credits earned in any other
6    participating system as defined in Article 20 of this Code
7    shall be considered for purposes of determining a judge's
8    eligibility to make an election under this subdivision
9    (a)(3).
10    (b) Beginning July 1, 1969 and, in the case of Tier 1
11participants, ending on June 30, 2016, each participant is
12required to contribute 1% of each payment of salary towards the
13automatic increase in annuity provided in Section 18-125.1.
14However, such contributions need not be made by any participant
15who has elected prior to September 15, 1969, not to be subject
16to the automatic increase in annuity provisions.
17    (c) Effective July 13, 1953, each married participant
18subject to the survivor's annuity provisions is required to
19contribute 2 1/2% of each payment of salary, whether or not he
20or she is required to make any other contributions under this
21Section. Such contributions shall be made concurrently with the
22contributions made for annuity purposes.
23    (d) Notwithstanding any other provision of this Article,
24the required contributions for a Tier 2 participant who first
25becomes a participant on or after January 1, 2011 shall not
26exceed the contributions that would be due under this Article

 

 

09900HB1725ham001- 33 -LRB099 07914 RPS 34398 a

1if that participant's highest salary for annuity purposes were
2$106,800, plus any increase in that amount under Section
318-125.
4(Source: P.A. 96-1490, eff. 1-1-11.)
 
5    (40 ILCS 5/18-133.5 new)
6    Sec. 18-133.5. Use of contributions for health care
7subsidies. The System shall not use any contribution received
8by the System under this Article to provide a subsidy for the
9cost of participation in a retiree health care program.
 
10    (40 ILCS 5/18-140)   (from Ch. 108 1/2, par. 18-140)
11    Sec. 18-140. To certify required State contributions and
12submit vouchers.
13    (a) The Board shall certify to the Governor, on or before
14November 15 of each year until November 15, 2011, the amount of
15the required State contribution to the System for the following
16fiscal year and shall specifically identify the System's
17projected State normal cost for that fiscal year. The
18certification shall include a copy of the actuarial
19recommendations upon which it is based and shall specifically
20identify the System's projected State normal cost for that
21fiscal year.
22    On or before November 1 of each year, beginning November 1,
232012, the Board shall submit to the State Actuary, the
24Governor, and the General Assembly a proposed certification of

 

 

09900HB1725ham001- 34 -LRB099 07914 RPS 34398 a

1the amount of the required State contribution to the System for
2the next fiscal year, along with all of the actuarial
3assumptions, calculations, and data upon which that proposed
4certification is based. On or before January 1 of each year
5beginning January 1, 2013, the State Actuary shall issue a
6preliminary report concerning the proposed certification and
7identifying, if necessary, recommended changes in actuarial
8assumptions that the Board must consider before finalizing its
9certification of the required State contributions. On or before
10January 15, 2013 and every January 15 thereafter, the Board
11shall certify to the Governor and the General Assembly the
12amount of the required State contribution for the next fiscal
13year. The Board's certification must note any deviations from
14the State Actuary's recommended changes, the reason or reasons
15for not following the State Actuary's recommended changes, and
16the fiscal impact of not following the State Actuary's
17recommended changes on the required State contribution.
18    On or before May 1, 2004, the Board shall recalculate and
19recertify to the Governor the amount of the required State
20contribution to the System for State fiscal year 2005, taking
21into account the amounts appropriated to and received by the
22System under subsection (d) of Section 7.2 of the General
23Obligation Bond Act.
24    On or before July 1, 2005, the Board shall recalculate and
25recertify to the Governor the amount of the required State
26contribution to the System for State fiscal year 2006, taking

 

 

09900HB1725ham001- 35 -LRB099 07914 RPS 34398 a

1into account the changes in required State contributions made
2by this amendatory Act of the 94th General Assembly.
3    On or before April 1, 2011, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2011, applying
6the changes made by Public Act 96-889 to the System's assets
7and liabilities as of June 30, 2009 as though Public Act 96-889
8was approved on that date.
9    (a-5) For purposes of Section (c-5) of Section 20 of the
10Budget Stabilization Act, on or before November 1 of each year,
11and as soon as possible after November 1, 2015, the Board shall
12determine the amount of the State contribution to the System
13that would have been required for the next fiscal year if this
14amendatory Act of the 99th General Assembly had not taken
15effect, using the best and most recent available data but based
16on the law in effect on May 31, 2014. The Board shall submit to
17the State Actuary, the Governor, and the General Assembly a
18proposed certification, along with the relevant law, actuarial
19assumptions, calculations, and data upon which that
20certification is based.
21    On or before January 1 of each year, and as soon as
22possible in 2016, the State Actuary shall issue a preliminary
23report concerning the proposed certification and identifying,
24if necessary, recommended changes in actuarial assumptions
25that the Board must consider before finalizing its
26certification.

 

 

09900HB1725ham001- 36 -LRB099 07914 RPS 34398 a

1    On or before January 15 of each year, and as soon as
2possible in 2016, the Board shall certify to the Governor and
3the General Assembly the amount of the State contribution to
4the System that would have been required for the next fiscal
5year if this amendatory Act of the 99th General Assembly had
6not taken effect, using the best and most recent available data
7but based on the law in effect on May 31, 2014. The Board's
8certification must note any deviations from the State Actuary's
9recommended changes, the reason or reasons for not following
10the State Actuary's recommended changes, and the impact of not
11following the State Actuary's recommended changes.
12    (b) Beginning in State fiscal year 1996, on or as soon as
13possible after the 15th day of each month the Board shall
14submit vouchers for payment of State contributions to the
15System, in a total monthly amount of one-twelfth of the
16required annual State contribution certified under subsection
17(a). From the effective date of this amendatory Act of the 93rd
18General Assembly through June 30, 2004, the Board shall not
19submit vouchers for the remainder of fiscal year 2004 in excess
20of the fiscal year 2004 certified contribution amount
21determined under this Section after taking into consideration
22the transfer to the System under subsection (c) of Section
236z-61 of the State Finance Act. These vouchers shall be paid by
24the State Comptroller and Treasurer by warrants drawn on the
25funds appropriated to the System for that fiscal year.
26    If in any month the amount remaining unexpended from all

 

 

09900HB1725ham001- 37 -LRB099 07914 RPS 34398 a

1other appropriations to the System for the applicable fiscal
2year (including the appropriations to the System under Section
38.12 of the State Finance Act and Section 1 of the State
4Pension Funds Continuing Appropriation Act) is less than the
5amount lawfully vouchered under this Section, the difference
6shall be paid from the General Revenue Fund under the
7continuing appropriation authority provided in Section 1.1 of
8the State Pension Funds Continuing Appropriation Act.
9(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1097-694, eff. 6-18-12.)
 
11    (40 ILCS 5/18-169)
12    Sec. 18-169. Application and expiration of new benefit
13increases.
14    (a) As used in this Section, "new benefit increase" means
15an increase in the amount of any benefit provided under this
16Article, or an expansion of the conditions of eligibility for
17any benefit under this Article, that results from an amendment
18to this Code that takes effect after the effective date of this
19amendatory Act of the 94th General Assembly. "New benefit
20increase", however, does not include any benefit increase
21resulting from the changes made to this Article or Article 20
22of this Code by this amendatory Act of the 99th General
23Assembly.
24    (b) Notwithstanding any other provision of this Code or any
25subsequent amendment to this Code, every new benefit increase

 

 

09900HB1725ham001- 38 -LRB099 07914 RPS 34398 a

1is subject to this Section and shall be deemed to be granted
2only in conformance with and contingent upon compliance with
3the provisions of this Section.
4    (c) The Public Act enacting a new benefit increase must
5identify and provide for payment to the System of additional
6funding at least sufficient to fund the resulting annual
7increase in cost to the System as it accrues.
8    Every new benefit increase is contingent upon the General
9Assembly providing the additional funding required under this
10subsection. The Commission on Government Forecasting and
11Accountability shall analyze whether adequate additional
12funding has been provided for the new benefit increase and
13shall report its analysis to the Public Pension Division of the
14Department of Insurance Financial and Professional Regulation.
15A new benefit increase created by a Public Act that does not
16include the additional funding required under this subsection
17is null and void. If the Public Pension Division determines
18that the additional funding provided for a new benefit increase
19under this subsection is or has become inadequate, it may so
20certify to the Governor and the State Comptroller and, in the
21absence of corrective action by the General Assembly, the new
22benefit increase shall expire at the end of the fiscal year in
23which the certification is made.
24    (d) Every new benefit increase shall expire 5 years after
25its effective date or on such earlier date as may be specified
26in the language enacting the new benefit increase or provided

 

 

09900HB1725ham001- 39 -LRB099 07914 RPS 34398 a

1under subsection (c). This does not prevent the General
2Assembly from extending or re-creating a new benefit increase
3by law.
4    (e) Except as otherwise provided in the language creating
5the new benefit increase, a new benefit increase that expires
6under this Section continues to apply to persons who applied
7and qualified for the affected benefit while the new benefit
8increase was in effect and to the affected beneficiaries and
9alternate payees of such persons, but does not apply to any
10other person, including without limitation a person who
11continues in service after the expiration date and did not
12apply and qualify for the affected benefit while the new
13benefit increase was in effect.
14(Source: P.A. 94-4, eff. 6-1-05.)
 
15    (40 ILCS 5/18-175 new)
16    Sec. 18-175. Defined contribution plan.
17    (a) By July 1, 2017, the System shall prepare and implement
18a voluntary defined contribution plan for up to 5% of eligible
19active Tier 1 participants. The System shall determine the 5%
20cap by the number of active Tier 1 participants on the
21effective date of this Section. The defined contribution plan
22developed under this Section shall be a plan that aggregates
23employer and employee contributions in individual participant
24accounts which, after meeting any other requirements, are used
25for payouts after retirement in accordance with this Section

 

 

09900HB1725ham001- 40 -LRB099 07914 RPS 34398 a

1and any other applicable laws.
2    As used in this Section, "defined benefit plan" means the
3retirement plan available under this Article to Tier 1
4participants who have not made the election authorized under
5this Section.
6        (1) Under the defined contribution plan, an active Tier
7    1 participant of this System could elect to cease accruing
8    benefits in the defined benefit plan under this Article and
9    begin accruing benefits for future service in the defined
10    contribution plan. Service credit under the defined
11    contribution plan may be used for determining retirement
12    eligibility under the defined benefit plan.
13        (2) Participants in the defined contribution plan
14    shall pay employee contributions at the same rate as Tier 1
15    participants in this System who do not participate in the
16    defined contribution plan.
17        (3) State contributions shall be paid into the accounts
18    of all participants in the defined contribution plan at a
19    uniform rate, expressed as a percentage of compensation and
20    determined for each year. This rate shall be no higher than
21    the employer's normal cost for Tier 1 participants in the
22    defined benefit plan for that year, as determined by the
23    System and expressed as a percentage of compensation, and
24    shall be no lower than 3% of compensation. The State shall
25    adjust this rate annually.
26        (4) The defined contribution plan shall require 5 years

 

 

09900HB1725ham001- 41 -LRB099 07914 RPS 34398 a

1    of participation in the defined contribution plan before
2    vesting in State contributions. If the participant fails to
3    vest in them, the State contributions, and the earnings
4    thereon, shall be forfeited.
5        (5) The defined contribution plan may provide for
6    participants in the plan to be eligible for defined
7    disability benefits. If it does, the System shall reduce
8    the employee contributions credited to the participant's
9    defined contribution plan account by an amount determined
10    by the System to cover the cost of offering such benefits.
11        (6) The defined contribution plan shall provide a
12    variety of options for investments. These options shall
13    include investments handled by the Illinois State Board of
14    Investment as well as private sector investment options.
15        (7) The defined contribution plan shall provide a
16    variety of options for payouts to retirees and their
17    survivors.
18        (8) To the extent authorized under federal law and as
19    authorized by the System, the plan shall allow former
20    participants in the plan to transfer or roll over employee
21    and vested State contributions, and the earnings thereon,
22    into other qualified retirement plans.
23        (9) The System shall reduce the employee contributions
24    credited to the participant's defined contribution plan
25    account by an amount determined by the System to cover the
26    cost of offering these benefits and any applicable

 

 

09900HB1725ham001- 42 -LRB099 07914 RPS 34398 a

1    administrative fees.
2    (b) Only persons who are active Tier 1 participants of the
3System on the effective date of this Section are eligible to
4participate in the defined contribution plan. Participation in
5the defined contribution plan shall be limited to the first 5%
6of eligible persons who elect to participate. The election to
7participate in the defined contribution plan is voluntary and
8irrevocable.
9    (c) An eligible active Tier 1 participant may irrevocably
10elect to participate in the defined contribution plan by filing
11with the System a written application to participate that is
12received by the System prior to its determination that 5% of
13eligible persons have elected to participate in the defined
14contribution plan.
15    When the System first determines that 5% of eligible
16persons have elected to participate in the defined contribution
17plan, the System shall provide notice to previously eligible
18employees that the plan is no longer available and shall cease
19accepting applications to participate.
20    (d) The System shall make a good faith effort to contact
21each active Tier 1 participant who is eligible to participate
22in the defined contribution plan. The System shall mail
23information describing the option to join the defined
24contribution plan to each of these employees to his or her last
25known address on file with the System. If the employee is not
26responsive to other means of contact, it is sufficient for the

 

 

09900HB1725ham001- 43 -LRB099 07914 RPS 34398 a

1System to publish the details of the option on its website.
2    Upon request for further information describing the
3option, the System shall provide employees with information
4from the System before exercising the option to join the plan,
5including information on the impact to their vested benefits or
6non-vested service. The individual consultation shall include
7projections of the participant's defined benefits at
8retirement or earlier termination of service and the value of
9the participant's account at retirement or earlier termination
10of service. The System shall not provide advice or counseling
11with respect to whether the employee should exercise the
12option. The System shall inform Tier 1 participants who are
13eligible to participate in the defined contribution plan that
14they may also wish to obtain information and counsel relating
15to their option from any other available source, including but
16not limited to labor organizations, private counsel, and
17financial advisors.
18    (e) In no event shall the System, its staff, its authorized
19representatives, or the Board be liable for any information
20given to an employee under this Section. The System may
21coordinate with the Illinois Department of Central Management
22Services and other retirement systems administering a defined
23contribution plan in accordance with this amendatory Act of the
2499th General Assembly to provide information concerning the
25impact of the option set forth in this Section.
26    (f) Notwithstanding any other provision of this Section, no

 

 

09900HB1725ham001- 44 -LRB099 07914 RPS 34398 a

1person shall begin participating in the defined contribution
2plan until it has attained qualified plan status and received
3all necessary approvals from the U.S. Internal Revenue Service.
4    (g) The System shall report on its progress under this
5Section, including the available details of the defined
6contribution plan and the System's plans for informing eligible
7Tier 1 participants about the plan, to the Governor and the
8General Assembly on or before January 15, 2018.
9    (h) The Illinois State Board of Investments shall be the
10plan sponsor for the defined contribution plan established
11under this Section.
12    (i) The intent of this amendatory Act of the 99th General
13Assembly is to ensure that the State's normal cost of
14participation in the defined contribution plan is similar, and
15if possible equal, to the State's normal cost of participation
16in the defined benefit plan, unless a lower State's normal cost
17is necessary to ensure cost neutrality.
 
18    (40 ILCS 5/18-176 new)
19    Sec. 18-176. Defined contribution plan; termination. If
20the defined contribution plan is terminated or becomes
21inoperative pursuant to law, then each participant in the plan
22shall automatically be deemed to have been a contributing Tier
231 participant in the System's defined benefit plan during the
24time in which he or she participated in the defined
25contribution plan, and for that purpose the System shall be

 

 

09900HB1725ham001- 45 -LRB099 07914 RPS 34398 a

1entitled to recover the amounts in the participant's defined
2contribution accounts.
 
3    (40 ILCS 5/20-106)  (from Ch. 108 1/2, par. 20-106)
4    Sec. 20-106. Final average salary.
5    (a) "Final average salary": The average (or other) salary
6which is considered by a participating system in determining
7the amount of the retirement annuity or survivor's annuity.
8    (b) Earnings credits under all participating systems shall
9be considered by each system in determining final average
10salary, but subject to the limitations imposed by this
11amendatory Act of the 98th General Assembly for a participant
12in a defined contribution plan established under Article 2, 14,
1315, or 16, or 18 of this Code. In calculating a proportional
14retirement or survivor's annuity based on these earnings
15credits, the participating system shall apply any limitations
16on earnings for annuity purposes that are imposed by the
17Article governing the system.
18(Source: P.A. 98-599, eff. 6-1-14.)
 
19    (40 ILCS 5/20-121)  (from Ch. 108 1/2, par. 20-121)
20    Sec. 20-121. Calculation of proportional retirement
21annuities.
22    (a) Upon retirement of the employee, a proportional
23retirement annuity shall be computed by each participating
24system in which pension credit has been established on the

 

 

09900HB1725ham001- 46 -LRB099 07914 RPS 34398 a

1basis of pension credits under each system. The computation
2shall be in accordance with the formula or method prescribed by
3each participating system which is in effect at the date of the
4employee's latest withdrawal from service covered by any of the
5systems in which he has pension credits which he elects to have
6considered under this Article. However, the amount of any
7retirement annuity payable under the self-managed plan
8established under Section 15-158.2 of this Code or under the
9defined contribution plan established under Article 2, 14, 15,
10or 16, or 18 of this Code depends solely on the value of the
11participant's vested account balances and is not subject to any
12proportional adjustment under this Section.
13    (a-5) For persons who participate in a defined contribution
14plan established under Article 2, 14, 15, or 16, or 18 of this
15Code to whom the provisions of this Article apply, the pension
16credits established under the defined contribution plan may be
17considered in determining eligibility for or the amount of the
18defined benefit retirement annuity that is payable by any other
19participating system.
20    (b) Combined pension credit under all retirement systems
21subject to this Article shall be considered in determining
22whether the minimum qualification has been met and the formula
23or method of computation which shall be applied, except as may
24be otherwise provided with respect to vesting in State or
25employer contributions in a defined contribution plan. If a
26system has a step-rate formula for calculation of the

 

 

09900HB1725ham001- 47 -LRB099 07914 RPS 34398 a

1retirement annuity, pension credits covering previous service
2which have been established under another system shall be
3considered in determining which range or ranges of the
4step-rate formula are to be applicable to the employee.
5    (c) Interest on pension credit shall continue to accumulate
6in accordance with the provisions of the law governing the
7retirement system in which the same has been established during
8the time an employee is in the service of another employer, on
9the assumption such employee, for interest purposes for pension
10credit, is continuing in the service covered by such retirement
11system.
12(Source: P.A. 98-599, eff. 6-1-14.)
 
13    (40 ILCS 5/20-123)  (from Ch. 108 1/2, par. 20-123)
14    Sec. 20-123. Survivor's annuity. The provisions governing
15a retirement annuity shall be applicable to a survivor's
16annuity. Appropriate credits shall be established for
17survivor's annuity purposes in those participating systems
18which provide survivor's annuities, according to the same
19conditions and subject to the same limitations and restrictions
20herein prescribed for a retirement annuity. If a participating
21system has no survivor's annuity benefit, or if the survivor's
22annuity benefit under that system is waived, pension credit
23established in that system shall not be considered in
24determining eligibility for or the amount of the survivor's
25annuity which may be payable by any other participating system.

 

 

09900HB1725ham001- 48 -LRB099 07914 RPS 34398 a

1    For persons who participate in the self-managed plan
2established under Section 15-158.2 or the portable benefit
3package established under Section 15-136.4, pension credit
4established under Article 15 may be considered in determining
5eligibility for or the amount of the survivor's annuity that is
6payable by any other participating system, but pension credit
7established in any other system shall not result in any right
8to a survivor's annuity under the Article 15 system.
9    For persons who participate in a defined contribution plan
10established under Article 2, 14, 15, or 16, or 18 of this Code
11to whom the provisions of this Article apply, the pension
12credits established under the defined contribution plan may be
13considered in determining eligibility for or the amount of the
14defined benefit survivor's annuity that is payable by any other
15participating system, but pension credits established in any
16other system shall not result in any right to or increase in
17the value of a survivor's annuity under the defined
18contribution plan, which depends solely on the options chosen
19and the value of the participant's vested account balances and
20is not subject to any proportional adjustment under this
21Section.
22(Source: P.A. 98-599, eff. 6-1-14.)
 
23    (40 ILCS 5/20-124)  (from Ch. 108 1/2, par. 20-124)
24    Sec. 20-124. Maximum benefits.
25    (a) In no event shall the combined retirement or survivors

 

 

09900HB1725ham001- 49 -LRB099 07914 RPS 34398 a

1annuities exceed the highest annuity which would have been
2payable by any participating system in which the employee has
3pension credits, if all of his pension credits had been
4validated in that system.
5    If the combined annuities should exceed the highest maximum
6as determined in accordance with this Section, the respective
7annuities shall be reduced proportionately according to the
8ratio which the amount of each proportional annuity bears to
9the aggregate of all such annuities.
10    (b) In the case of a participant in the self-managed plan
11established under Section 15-158.2 of this Code to whom the
12provisions of this Article apply:
13        (i) For purposes of calculating the combined
14    retirement annuity and the proportionate reduction, if
15    any, in a retirement annuity other than one payable under
16    the self-managed plan, the amount of the Article 15
17    retirement annuity shall be deemed to be the highest
18    annuity to which the annuitant would have been entitled if
19    he or she had participated in the traditional benefit
20    package as defined in Section 15-103.1 rather than the
21    self-managed plan.
22        (ii) For purposes of calculating the combined
23    survivor's annuity and the proportionate reduction, if
24    any, in a survivor's annuity other than one payable under
25    the self-managed plan, the amount of the Article 15
26    survivor's annuity shall be deemed to be the highest

 

 

09900HB1725ham001- 50 -LRB099 07914 RPS 34398 a

1    survivor's annuity to which the survivor would have been
2    entitled if the deceased employee had participated in the
3    traditional benefit package as defined in Section 15-103.1
4    rather than the self-managed plan.
5        (iii) Benefits payable under the self-managed plan are
6    not subject to proportionate reduction under this Section.
7    (c) In the case of a participant in a defined contribution
8plan established under Article 2, 14, 15, or 16, or 18 of this
9Code to whom the provisions of this Article apply:
10        (i) For purposes of calculating the combined
11    retirement annuity and the proportionate reduction, if
12    any, in a defined benefit retirement annuity, any benefit
13    payable under the defined contribution plan shall not be
14    considered.
15        (ii) For purposes of calculating the combined
16    survivor's annuity and the proportionate reduction, if
17    any, in a defined benefit survivor's annuity, any benefit
18    payable under the defined contribution plan shall not be
19    considered.
20        (iii) Benefits payable under a defined contribution
21    plan established under Article 2, 14, 15, or 16, or 18 of
22    this Code are not subject to proportionate reduction under
23    this Section.
24(Source: P.A. 98-599, eff. 6-1-14.)
 
25    (40 ILCS 5/20-125)  (from Ch. 108 1/2, par. 20-125)

 

 

09900HB1725ham001- 51 -LRB099 07914 RPS 34398 a

1    Sec. 20-125. Return to employment - suspension of benefits.
2If a retired employee returns to employment which is covered by
3a system from which he is receiving a proportional annuity
4under this Article, his proportional annuity from all
5participating systems shall be suspended during the period of
6re-employment, except that this suspension does not apply to
7any distributions payable under the self-managed plan
8established under Section 15-158.2 or under a defined
9contribution plan established under Article 2, 14, 15, or 16,
10or 18 of this Code.
11    The provisions of the Article under which such employment
12would be covered shall govern the determination of whether the
13employee has returned to employment, and if applicable the
14exemption of temporary employment or employment not exceeding a
15specified duration or frequency, for all participating systems
16from which the retired employee is receiving a proportional
17annuity under this Article, notwithstanding any contrary
18provisions in the other Articles governing such systems.
19(Source: P.A. 98-599, eff. 6-1-14.)
 
20    Section 97. Severability and inseverability. The
21provisions of this Act are severable under Section 1.31 of the
22Statute on Statutes, except that the changes made to
23subsections (a), (a-1), (a-2), (d), and (e) of Section 18-125.1
24and Sections 18-131, 18-132, 18-133, 18-140, 18-175, 20-106,
2520-121, 20-123, 20-124, and 20-125 of the Illinois Pension Code

 

 

09900HB1725ham001- 52 -LRB099 07914 RPS 34398 a

1are mutually dependent and inseverable from one another but are
2severable from any other provision of this Act.
 
3    Section 99. Effective date. This Act takes effect January
41, 2016.".