99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB0449

 

Introduced 1/28/2015, by Sen. John J. Cullerton

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/2-124  from Ch. 108 1/2, par. 2-124

    Amends the General Assembly Article of the Illinois Pension Code. Makes a technical change in a Section concerning contributions by the State.


LRB099 03090 RPS 23098 b

PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0449LRB099 03090 RPS 23098 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Section 2-124 as follows:
 
6    (40 ILCS 5/2-124)  (from Ch. 108 1/2, par. 2-124)
7    Sec. 2-124. Contributions by State.
8    (a) The The State shall make contributions to the System by
9appropriations of amounts which, together with the
10contributions of participants, interest earned on investments,
11and other income will meet the cost of maintaining and
12administering the System on a 100% funded basis in accordance
13with actuarial recommendations by the end of State fiscal year
142044.
15    (b) The Board shall determine the amount of State
16contributions required for each fiscal year on the basis of the
17actuarial tables and other assumptions adopted by the Board and
18the prescribed rate of interest, using the formula in
19subsection (c).
20    (c) For State fiscal years 2015 through 2044, the minimum
21contribution to the System to be made by the State for each
22fiscal year shall be an amount determined by the System to be
23equal to the sum of (1) the State's portion of the projected

 

 

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1normal cost for that fiscal year, plus (2) an amount sufficient
2to bring the total assets of the System up to 100% of the total
3actuarial liabilities of the System by the end of State fiscal
4year 2044. In making these determinations, the required State
5contribution shall be calculated each year as a level
6percentage of payroll over the years remaining to and including
7fiscal year 2044 and shall be determined under the projected
8unit cost method for fiscal year 2015 and under the entry age
9normal actuarial cost method for fiscal years 2016 through
102044.
11    For State fiscal years 2012 through 2014, 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 90% of
15the total actuarial liabilities of the System by the end of
16State fiscal year 2045. In making these determinations, the
17required State contribution shall be calculated each year as a
18level percentage of payroll over the years remaining to and
19including fiscal year 2045 and shall be determined under the
20projected unit 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$4,157,000.
3    Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2007 is
5$5,220,300.
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$10,454,000 and shall be made from the proceeds of bonds sold
15in fiscal year 2010 pursuant to Section 7.2 of the General
16Obligation Bond Act, less (i) the pro rata share of bond sale
17expenses determined by the System's share of total bond
18proceeds, (ii) any amounts received from the General Revenue
19Fund in fiscal year 2010, and (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 2-134 and shall be made from the proceeds
26of bonds sold in fiscal year 2011 pursuant to Section 7.2 of

 

 

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1the General Obligation Bond Act, less (i) the pro rata share of
2bond sale expenses determined by the System's share of total
3bond proceeds, (ii) any amounts received from the General
4Revenue Fund in fiscal year 2011, and (iii) any reduction in
5bond proceeds due to the issuance of discounted bonds, if
6applicable.
7    Beginning in State fiscal year 2045, the minimum State
8contribution for each fiscal year shall be the amount needed to
9maintain the total assets of the System at 100% of the total
10actuarial liabilities of the System.
11    Amounts received by the System pursuant to Section 25 of
12the Budget Stabilization Act or Section 8.12 of the State
13Finance Act in any fiscal year do not reduce and do not
14constitute payment of any portion of the minimum State
15contribution required under this Article in that fiscal year.
16Such amounts shall not reduce, and shall not be included in the
17calculation of, the required State contributions under this
18Article in any future year until the System has reached a
19funding ratio of at least 100%. A reference in this Article to
20the "required State contribution" or any substantially similar
21term does not include or apply to any amounts payable to the
22System under Section 25 of the Budget Stabilization Act.
23    Notwithstanding any other provision of this Section, the
24required State contribution for State fiscal year 2005 and for
25fiscal year 2008 and each fiscal year thereafter through State
26fiscal year 2014, as calculated under this Section and

 

 

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1certified under Section 2-134, shall not exceed an amount equal
2to (i) the amount of the required State contribution that would
3have been calculated under this Section for that fiscal year if
4the System had not received any payments under subsection (d)
5of Section 7.2 of the General Obligation Bond Act, minus (ii)
6the portion of the State's total debt service payments for that
7fiscal year on the bonds issued in fiscal year 2003 for the
8purposes of that Section 7.2, as determined and certified by
9the Comptroller, that is the same as the System's portion of
10the total moneys distributed under subsection (d) of Section
117.2 of the General Obligation Bond Act. In determining this
12maximum for State fiscal years 2008 through 2010, however, the
13amount referred to in item (i) shall be increased, as a
14percentage of the applicable employee payroll, in equal
15increments calculated from the sum of the required State
16contribution for State fiscal year 2007 plus the applicable
17portion of the State's total debt service payments for fiscal
18year 2007 on the bonds issued in fiscal year 2003 for the
19purposes of Section 7.2 of the General Obligation Bond Act, so
20that, by State fiscal year 2011, the State is contributing at
21the rate otherwise required under this Section.
22    (d) 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

 

 

SB0449- 6 -LRB099 03090 RPS 23098 b

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    (e) 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; 98-599, eff. 6-1-14.)