Illinois General Assembly - Full Text of SB2156
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Full Text of SB2156  99th General Assembly

SB2156enr 99TH GENERAL ASSEMBLY

  
  
  

 


 
SB2156 EnrolledLRB099 13062 RPS 36944 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by changing
5Sections 15-106, 15-107, 15-110, 15-111, 15-113.11, 15-155,
615-158.2, 15-168, and 15-168.2 and by adding Sections 15-111.5
7and 15-113.12 as follows:
 
8    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
9    (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11    Sec. 15-106. Employer. "Employer": The University of
12Illinois, Southern Illinois University, Chicago State
13University, Eastern Illinois University, Governors State
14University, Illinois State University, Northeastern Illinois
15University, Northern Illinois University, Western Illinois
16University, the State Board of Higher Education, the Illinois
17Mathematics and Science Academy, the University Civil Service
18Merit Board, the Board of Trustees of the State Universities
19Retirement System, the Illinois Community College Board,
20community college boards, any association of community college
21boards organized under Section 3-55 of the Public Community
22College Act, the Board of Examiners established under the
23Illinois Public Accounting Act, and, only during the period for

 

 

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1which employer contributions required under Section 15-155 are
2paid, the following organizations: the alumni associations,
3the foundations and the athletic associations which are
4affiliated with the universities and colleges included in this
5Section as employers. An individual who begins employment on or
6after the effective date of this amendatory Act of the 99th
7General Assembly with any association of community college
8boards organized under Section 3-55 of the Public Community
9College Act, the Association of Illinois Middle-Grade Schools,
10the Illinois Association of School Administrators, the
11Illinois Association for Supervision and Curriculum
12Development, the Illinois Principals Association, the Illinois
13Association of School Business Officials, the Illinois Special
14Olympics, or an entity not defined as an employer in this
15Section shall not be deemed an employee for the purposes of
16this Article with respect to that employment and shall not be
17eligible to participate in the System with respect to that
18employment; provided, however, that those individuals who are
19both employed by such an entity and are participating in the
20System with respect to that employment on the effective date of
21this amendatory Act of the 99th General Assembly shall be
22allowed to continue as participants in the System for the
23duration of that employment.
24    A department as defined in Section 14-103.04 is an employer
25for any person appointed by the Governor under the Civil
26Administrative Code of Illinois who is a participating employee

 

 

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1as defined in Section 15-109. The Department of Central
2Management Services is an employer with respect to persons
3employed by the State Board of Higher Education in positions
4with the Illinois Century Network as of June 30, 2004 who
5remain continuously employed after that date by the Department
6of Central Management Services in positions with the Illinois
7Century Network, the Bureau of Communication and Computer
8Services, or, if applicable, any successor bureau.
9    The cities of Champaign and Urbana shall be considered
10employers, but only during the period for which contributions
11are required to be made under subsection (b-1) of Section
1215-155 and only with respect to individuals described in
13subsection (h) of Section 15-107.
14(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
15Sec. 999.)
 
16    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 15-107. Employee.
20    (a) "Employee" means any member of the educational,
21administrative, secretarial, clerical, mechanical, labor or
22other staff of an employer whose employment is permanent and
23continuous or who is employed in a position in which services
24are expected to be rendered on a continuous basis for at least
254 months or one academic term, whichever is less, who (A)

 

 

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1receives payment for personal services on a warrant issued
2pursuant to a payroll voucher certified by an employer and
3drawn by the State Comptroller upon the State Treasurer or by
4an employer upon trust, federal or other funds, or (B) is on a
5leave of absence without pay. Employment which is irregular,
6intermittent or temporary shall not be considered continuous
7for purposes of this paragraph.
8    However, a person is not an "employee" if he or she:
9        (1) is a student enrolled in and regularly attending
10    classes in a college or university which is an employer,
11    and is employed on a temporary basis at less than full
12    time;
13        (2) is currently receiving a retirement annuity or a
14    disability retirement annuity under Section 15-153.2 from
15    this System;
16        (3) is on a military leave of absence;
17        (4) is eligible to participate in the Federal Civil
18    Service Retirement System and is currently making
19    contributions to that system based upon earnings paid by an
20    employer;
21        (5) is on leave of absence without pay for more than 60
22    days immediately following termination of disability
23    benefits under this Article;
24        (6) is hired after June 30, 1979 as a public service
25    employment program participant under the Federal
26    Comprehensive Employment and Training Act and receives

 

 

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1    earnings in whole or in part from funds provided under that
2    Act; or
3        (7) is employed on or after July 1, 1991 to perform
4    services that are excluded by subdivision (a)(7)(f) or
5    (a)(19) of Section 210 of the federal Social Security Act
6    from the definition of employment given in that Section (42
7    U.S.C. 410).
8    (b) Any employer may, by filing a written notice with the
9board, exclude from the definition of "employee" all persons
10employed pursuant to a federally funded contract entered into
11after July 1, 1982 with a federal military department in a
12program providing training in military courses to federal
13military personnel on a military site owned by the United
14States Government, if this exclusion is not prohibited by the
15federally funded contract or federal laws or rules governing
16the administration of the contract.
17    (c) Any person appointed by the Governor under the Civil
18Administrative Code of the State is an employee, if he or she
19is a participant in this system on the effective date of the
20appointment.
21    (d) A participant on lay-off status under civil service
22rules is considered an employee for not more than 120 days from
23the date of the lay-off.
24    (e) A participant is considered an employee during (1) the
25first 60 days of disability leave, (2) the period, not to
26exceed one year, in which his or her eligibility for disability

 

 

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1benefits is being considered by the board or reviewed by the
2courts, and (3) the period he or she receives disability
3benefits under the provisions of Section 15-152, workers'
4compensation or occupational disease benefits, or disability
5income under an insurance contract financed wholly or partially
6by the employer.
7    (f) Absences without pay, other than formal leaves of
8absence, of less than 30 calendar days, are not considered as
9an interruption of a person's status as an employee. If such
10absences during any period of 12 months exceed 30 work days,
11the employee status of the person is considered as interrupted
12as of the 31st work day.
13    (g) A staff member whose employment contract requires
14services during an academic term is to be considered an
15employee during the summer and other vacation periods, unless
16he or she declines an employment contract for the succeeding
17academic term or his or her employment status is otherwise
18terminated, and he or she receives no earnings during these
19periods.
20    (h) An individual who was a participating employee employed
21in the fire department of the University of Illinois's
22Champaign-Urbana campus immediately prior to the elimination
23of that fire department and who immediately after the
24elimination of that fire department became employed by the fire
25department of the City of Urbana or the City of Champaign shall
26continue to be considered as an employee for purposes of this

 

 

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1Article for so long as the individual remains employed as a
2firefighter by the City of Urbana or the City of Champaign. The
3individual shall cease to be considered an employee under this
4subsection (h) upon the first termination of the individual's
5employment as a firefighter by the City of Urbana or the City
6of Champaign.
7    (i) An individual who is employed on a full-time basis as
8an officer or employee of a statewide teacher organization that
9serves System participants or an officer of a national teacher
10organization that serves System participants may participate
11in the System and shall be deemed an employee, provided that
12(1) the individual has previously earned creditable service
13under this Article, (2) the individual files with the System an
14irrevocable election to become a participant before the
15effective date of this amendatory Act of the 97th General
16Assembly, (3) the individual does not receive credit for that
17employment under any other Article of this Code, and (4) the
18individual first became a full-time employee of the teacher
19organization and becomes a participant before the effective
20date of this amendatory Act of the 97th General Assembly. An
21employee under this subsection (i) is responsible for paying to
22the System both (A) employee contributions based on the actual
23compensation received for service with the teacher
24organization and (B) employer contributions equal to the normal
25costs (as defined in Section 15-155) resulting from that
26service; all or any part of these contributions may be paid on

 

 

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1the employee's behalf or picked up for tax purposes (if
2authorized under federal law) by the teacher organization.
3    A person who is an employee as defined in this subsection
4(i) may establish service credit for similar employment prior
5to becoming an employee under this subsection by paying to the
6System for that employment the contributions specified in this
7subsection, plus interest at the effective rate from the date
8of service to the date of payment. However, credit shall not be
9granted under this subsection for any such prior employment for
10which the applicant received credit under any other provision
11of this Code, or during which the applicant was on a leave of
12absence under Section 15-113.2.
13    (j) A person employed by the State Board of Higher
14Education in a position with the Illinois Century Network as of
15June 30, 2004 shall be considered to be an employee for so long
16as he or she remains continuously employed after that date by
17the Department of Central Management Services in a position
18with the Illinois Century Network, the Bureau of Communication
19and Computer Services, or, if applicable, any successor bureau
20and meets the requirements of subsection (a).
21    (k) The Board shall promulgate rules with respect to
22determining whether any person is an employee within the
23meaning of this Section. In the case of doubt as to whether any
24person is an employee within the meaning of this Section or any
25rule adopted by the Board, the decision of the Board shall be
26final.

 

 

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1(Source: P.A. 97-651, eff. 1-5-12.)
 
2    (40 ILCS 5/15-110)  (from Ch. 108 1/2, par. 15-110)
3    Sec. 15-110. Basic compensation. "Basic compensation":
4Subject to Section 15-111.5, the The gross basic rate of salary
5or wages payable by an employer, including:
6        (1) the value of maintenance, board, living quarters,
7    personal laundry, or other allowances furnished in lieu of
8    salary which are considered gross income under the federal
9    Federal Internal Revenue Code of 1986, as amended; ,
10        (2) the employee contributions required under Section
11    15-157; , and
12        (3) the amount paid by any employer to a custodial
13    account for investment in regulated investment company
14    stocks for the benefit of the employee pursuant to the
15    University Employees Custodial Accounts Act; "An Act in
16    relation to payments to custodial accounts for the benefit
17    of employees of public institutions of higher education",
18    approved September 9, 1983, and
19        (4) the amount of the premium payable by any employer
20    to an insurance company or companies on an annuity
21    contract, pursuant to the employee's election to accept a
22    reduction in earnings or forego an increase in earnings
23    under Section 30c of the State Finance Act "An Act in
24    relation to State Finance," approved June 10, 1919, as
25    amended, or a tax-sheltered annuity plan approved by any

 

 

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1    employer; and
2        (5) the amount of any elective deferral to a deferred
3    compensation plan established under Article 24 of this Code
4    pursuant to Section 457(b) of the federal Internal Revenue
5    Code of 1986, as amended.
6    Basic compensation does not include (1) salary or wages for
7overtime or other extra service; (2) prospective salary or
8wages under a summer teaching contract not yet entered upon;
9and (3) overseas differential allowances, quarters allowances,
10post allowances, educational allowances and transportation
11allowances paid by an employer under a contract with the
12federal government or its agencies for services rendered in
13other countries. If an employee elects to receive in lieu of
14cash salary or wages, fringe benefits which are not taxable
15under the federal Federal Internal Revenue Code of 1986, as
16amended, the amount of the cash salary or wages which is waived
17shall be included in determining basic compensation.
18(Source: P.A. 84-1308.)
 
19    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
20    (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22    Sec. 15-111. Earnings.
23    (a) "Earnings": Subject to Section 15-111.5, an An amount
24paid for personal services equal to the sum of the basic
25compensation plus extra compensation for summer teaching,

 

 

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1overtime or other extra service. For periods for which an
2employee receives service credit under subsection (c) of
3Section 15-113.1 or Section 15-113.2, earnings are equal to the
4basic compensation on which contributions are paid by the
5employee during such periods. Compensation for employment
6which is irregular, intermittent and temporary shall not be
7considered earnings, unless the participant is also receiving
8earnings from the employer as an employee under Section 15-107.
9    With respect to transition pay paid by the University of
10Illinois to a person who was a participating employee employed
11in the fire department of the University of Illinois's
12Champaign-Urbana campus immediately prior to the elimination
13of that fire department:
14        (1) "Earnings" includes transition pay paid to the
15    employee on or after the effective date of this amendatory
16    Act of the 91st General Assembly.
17        (2) "Earnings" includes transition pay paid to the
18    employee before the effective date of this amendatory Act
19    of the 91st General Assembly only if (i) employee
20    contributions under Section 15-157 have been withheld from
21    that transition pay or (ii) the employee pays to the System
22    before January 1, 2001 an amount representing employee
23    contributions under Section 15-157 on that transition pay.
24    Employee contributions under item (ii) may be paid in a
25    lump sum, by withholding from additional transition pay
26    accruing before January 1, 2001, or in any other manner

 

 

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1    approved by the System. Upon payment of the employee
2    contributions on transition pay, the corresponding
3    employer contributions become an obligation of the State.
4    (b) For a Tier 2 member, the annual earnings shall not
5exceed $106,800; however, that amount shall annually
6thereafter be increased by the lesser of (i) 3% of that amount,
7including all previous adjustments, or (ii) one half the annual
8unadjusted percentage increase (but not less than zero) in the
9consumer price index-u for the 12 months ending with the
10September preceding each November 1, including all previous
11adjustments.
12    For the purposes of this Section, "consumer price index u"
13means the index published by the Bureau of Labor Statistics of
14the United States Department of Labor that measures the average
15change in prices of goods and services purchased by all urban
16consumers, United States city average, all items, 1982-84 =
17100. The new amount resulting from each annual adjustment shall
18be determined by the Public Pension Division of the Department
19of Insurance and made available to the boards of the retirement
20systems and pension funds by November 1 of each year.
21    (c) With each submission of payroll information in the
22manner prescribed by the System, the employer shall certify
23that the payroll information is correct and complies with all
24applicable State and federal laws.
25(Source: P.A. 98-92, eff. 7-16-13.)
 

 

 

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1    (40 ILCS 5/15-111.5 new)
2    Sec. 15-111.5. Basic compensation and earnings
3restrictions. For an employee who first becomes a participant
4on or after the effective date of this amendatory Act of the
599th General Assembly, basic compensation under Section 15-110
6and earnings under Section 15-111 shall not include bonuses,
7housing allowances, vehicle allowances, social club dues, or
8athletic club dues.
 
9    (40 ILCS 5/15-113.11)
10    Sec. 15-113.11. Service for periods of voluntary or
11involuntary furlough.
12    (a) A participant may establish creditable service and
13earnings credit for periods of furlough beginning on or after
14July 1, 2009 and ending on or before June 30, 2011. To receive
15this credit, the participant must (i) apply in writing to the
16System before December 31, 2011; (ii) not receive compensation
17from an employer for any furlough period; and (iii) make, on an
18after-tax basis, employee contributions required under Section
1915-157 based on the rate of basic compensation during the
20periods of furlough, plus an amount determined by the Board to
21be equal to the employer's normal cost of the benefit, plus
22compounded interest at the actuarially assumed rate from the
23date of voluntary or involuntary furlough to the date of
24payment. The participant shall provide, at the time of
25application, written certification from the employer providing

 

 

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1the total number of furlough days a participant has been
2required to take.
3    (b) A participant may establish creditable service and
4earnings credit for periods of furlough beginning on or after
5July 1, 2015 and ending on or before June 30, 2017. To receive
6this credit, the participant must (i) apply in writing to the
7System before December 31, 2018; (ii) not receive compensation
8from an employer for any furlough period; and (iii) make, on an
9after-tax basis, employee contributions required under Section
1015-157 based on the rate of basic compensation during the
11periods of furlough, plus an amount determined by the Board to
12be equal to the employer's normal cost of the benefit, plus
13compounded interest at the actuarially assumed rate from the
14date of voluntary or involuntary furlough to the date of
15payment. The participant shall provide, at the time of
16application, written certification from the employer providing
17the total number of furlough days a participant has been
18required to take.
19(Source: P.A. 96-961, eff. 7-2-10.)
 
20    (40 ILCS 5/15-113.12 new)
21    Sec. 15-113.12. Earnings for periods of voluntary pay
22reduction taken in lieu of furlough. A participant may
23establish earnings credit for periods of voluntary pay
24reduction, taken in lieu of furlough, beginning on or after
25July 1, 2015 and ending on or before June 30, 2017. To receive

 

 

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1this credit, the participant must: (1) apply in writing to the
2System before December 31, 2018; and (2) make, on an after-tax
3basis, employee contributions required under Section 15-157
4based on the voluntary reduction in pay, plus an amount
5determined by the Board to be equal to the employer's normal
6cost of the benefit, plus compounded interest at the
7actuarially assumed rate from the date of voluntary reduction
8in pay to the date of payment. The participant shall provide,
9at the time of application, (i) written certification from the
10employer providing the total voluntary reduction in pay per pay
11period for each pay period with a voluntary reduction in pay
12and (ii) written certification from the employer stating that
13the voluntary reduction in pay was taken in lieu of furlough.
 
14    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
15    (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17    Sec. 15-155. Employer contributions.
18    (a) The State of Illinois shall make contributions by
19appropriations of amounts which, together with the other
20employer contributions from trust, federal, and other funds,
21employee contributions, income from investments, and other
22income of this System, will be sufficient to meet the cost of
23maintaining and administering the System on a 90% funded basis
24in accordance with actuarial recommendations.
25    The Board shall determine the amount of State contributions

 

 

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1required for each fiscal year on the basis of the actuarial
2tables and other assumptions adopted by the Board and the
3recommendations of the actuary, using the formula in subsection
4(a-1).
5    (a-1) For State fiscal years 2012 through 2045, the minimum
6contribution to the System to be made by the State for each
7fiscal year shall be an amount determined by the System to be
8sufficient to bring the total assets of the System up to 90% of
9the total actuarial liabilities of the System by the end of
10State fiscal year 2045. In making these determinations, the
11required State contribution shall be calculated each year as a
12level percentage of payroll over the years remaining to and
13including fiscal year 2045 and shall be determined under the
14projected unit credit actuarial cost method.
15    For State fiscal years 1996 through 2005, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18so that by State fiscal year 2011, the State is contributing at
19the rate required under this Section.
20    Notwithstanding any other provision of this Article, the
21total required State contribution for State fiscal year 2006 is
22$166,641,900.
23    Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2007 is
25$252,064,100.
26    For each of State fiscal years 2008 through 2009, 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
3from the required State contribution for State fiscal year
42007, so that by State fiscal year 2011, the State is
5contributing at the rate otherwise required under this Section.
6    Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2010 is
8$702,514,000 and shall be made from the State Pensions Fund and
9proceeds of bonds sold in fiscal year 2010 pursuant to Section
107.2 of the General Obligation Bond Act, less (i) the pro rata
11share of bond sale expenses determined by the System's share of
12total bond proceeds, (ii) any amounts received from the General
13Revenue Fund in fiscal year 2010, (iii) any reduction in bond
14proceeds due to the issuance of discounted bonds, if
15applicable.
16    Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2011 is
18the amount recertified by the System on or before April 1, 2011
19pursuant to Section 15-165 and shall be made from the State
20Pensions Fund and proceeds of bonds sold in fiscal year 2011
21pursuant to Section 7.2 of the General Obligation Bond Act,
22less (i) the pro rata share of bond sale expenses determined by
23the System's share of total bond proceeds, (ii) any amounts
24received from the General Revenue Fund in fiscal year 2011, and
25(iii) any reduction in bond proceeds due to the issuance of
26discounted bonds, if applicable.

 

 

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1    Beginning in State fiscal year 2046, the minimum State
2contribution for each fiscal year shall be the amount needed to
3maintain the total assets of the System at 90% of the total
4actuarial liabilities of the System.
5    Amounts received by the System pursuant to Section 25 of
6the Budget Stabilization Act or Section 8.12 of the State
7Finance Act in any fiscal year do not reduce and do not
8constitute payment of any portion of the minimum State
9contribution required under this Article in that fiscal year.
10Such amounts shall not reduce, and shall not be included in the
11calculation of, the required State contributions under this
12Article in any future year until the System has reached a
13funding ratio of at least 90%. A reference in this Article to
14the "required State contribution" or any substantially similar
15term does not include or apply to any amounts payable to the
16System under Section 25 of the Budget Stabilization Act.
17    Notwithstanding any other provision of this Section, the
18required State contribution for State fiscal year 2005 and for
19fiscal year 2008 and each fiscal year thereafter, as calculated
20under this Section and certified under Section 15-165, shall
21not exceed an amount equal to (i) the amount of the required
22State contribution that would have been calculated under this
23Section for that fiscal year if the System had not received any
24payments under subsection (d) of Section 7.2 of the General
25Obligation Bond Act, minus (ii) the portion of the State's
26total debt service payments for that fiscal year on the bonds

 

 

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1issued in fiscal year 2003 for the purposes of that Section
27.2, as determined and certified by the Comptroller, that is
3the same as the System's portion of the total moneys
4distributed under subsection (d) of Section 7.2 of the General
5Obligation Bond Act. In determining this maximum for State
6fiscal years 2008 through 2010, however, the amount referred to
7in item (i) shall be increased, as a percentage of the
8applicable employee payroll, in equal increments calculated
9from the sum of the required State contribution for State
10fiscal year 2007 plus the applicable portion of the State's
11total debt service payments for fiscal year 2007 on the bonds
12issued in fiscal year 2003 for the purposes of Section 7.2 of
13the General Obligation Bond Act, so that, by State fiscal year
142011, the State is contributing at the rate otherwise required
15under this Section.
16    (b) If an employee is paid from trust or federal funds, the
17employer shall pay to the Board contributions from those funds
18which are sufficient to cover the accruing normal costs on
19behalf of the employee. However, universities having employees
20who are compensated out of local auxiliary funds, income funds,
21or service enterprise funds are not required to pay such
22contributions on behalf of those employees. The local auxiliary
23funds, income funds, and service enterprise funds of
24universities shall not be considered trust funds for the
25purpose of this Article, but funds of alumni associations,
26foundations, and athletic associations which are affiliated

 

 

SB2156 Enrolled- 20 -LRB099 13062 RPS 36944 b

1with the universities included as employers under this Article
2and other employers which do not receive State appropriations
3are considered to be trust funds for the purpose of this
4Article.
5    (b-1) The City of Urbana and the City of Champaign shall
6each make employer contributions to this System for their
7respective firefighter employees who participate in this
8System pursuant to subsection (h) of Section 15-107. The rate
9of contributions to be made by those municipalities shall be
10determined annually by the Board on the basis of the actuarial
11assumptions adopted by the Board and the recommendations of the
12actuary, and shall be expressed as a percentage of salary for
13each such employee. The Board shall certify the rate to the
14affected municipalities as soon as may be practical. The
15employer contributions required under this subsection shall be
16remitted by the municipality to the System at the same time and
17in the same manner as employee contributions.
18    (c) Through State fiscal year 1995: The total employer
19contribution shall be apportioned among the various funds of
20the State and other employers, whether trust, federal, or other
21funds, in accordance with actuarial procedures approved by the
22Board. State of Illinois contributions for employers receiving
23State appropriations for personal services shall be payable
24from appropriations made to the employers or to the System. The
25contributions for Class I community colleges covering earnings
26other than those paid from trust and federal funds, shall be

 

 

SB2156 Enrolled- 21 -LRB099 13062 RPS 36944 b

1payable solely from appropriations to the Illinois Community
2College Board or the System for employer contributions.
3    (d) Beginning in State fiscal year 1996, the required State
4contributions to the System shall be appropriated directly to
5the System and shall be payable through vouchers issued in
6accordance with subsection (c) of Section 15-165, except as
7provided in subsection (g).
8    (e) The State Comptroller shall draw warrants payable to
9the System upon proper certification by the System or by the
10employer in accordance with the appropriation laws and this
11Code.
12    (f) Normal costs under this Section means liability for
13pensions and other benefits which accrues to the System because
14of the credits earned for service rendered by the participants
15during the fiscal year and expenses of administering the
16System, but shall not include the principal of or any
17redemption premium or interest on any bonds issued by the Board
18or any expenses incurred or deposits required in connection
19therewith.
20    (g) If the amount of a participant's earnings for any
21academic year used to determine the final rate of earnings,
22determined on a full-time equivalent basis, exceeds the amount
23of his or her earnings with the same employer for the previous
24academic year, determined on a full-time equivalent basis, by
25more than 6%, the participant's employer shall pay to the
26System, in addition to all other payments required under this

 

 

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1Section and in accordance with guidelines established by the
2System, the present value of the increase in benefits resulting
3from the portion of the increase in earnings that is in excess
4of 6%. This present value shall be computed by the System on
5the basis of the actuarial assumptions and tables used in the
6most recent actuarial valuation of the System that is available
7at the time of the computation. The System may require the
8employer to provide any pertinent information or
9documentation.
10    Whenever it determines that a payment is or may be required
11under this subsection (g), the System shall calculate the
12amount of the payment and bill the employer for that amount.
13The bill shall specify the calculations used to determine the
14amount due. If the employer disputes the amount of the bill, it
15may, within 30 days after receipt of the bill, apply to the
16System in writing for a recalculation. The application must
17specify in detail the grounds of the dispute and, if the
18employer asserts that the calculation is subject to subsection
19(h) or (i) of this Section, must include an affidavit setting
20forth and attesting to all facts within the employer's
21knowledge that are pertinent to the applicability of subsection
22(h) or (i). Upon receiving a timely application for
23recalculation, the System shall review the application and, if
24appropriate, recalculate the amount due.
25    The employer contributions required under this subsection
26(g) may be paid in the form of a lump sum within 90 days after

 

 

SB2156 Enrolled- 23 -LRB099 13062 RPS 36944 b

1receipt of the bill. If the employer contributions are not paid
2within 90 days after receipt of the bill, then interest will be
3charged at a rate equal to the System's annual actuarially
4assumed rate of return on investment compounded annually from
5the 91st day after receipt of the bill. Payments must be
6concluded within 3 years after the employer's receipt of the
7bill.
8    When assessing payment for any amount due under this
9subsection (g), the System shall include earnings, to the
10extent not established by a participant under Section 15-113.11
11or 15-113.12, that would have been paid to the participant had
12the participant not taken (i) periods of voluntary or
13involuntary furlough occurring on or after July 1, 2015 and on
14or before June 30, 2017 or (ii) periods of voluntary pay
15reduction in lieu of furlough occurring on or after July 1,
162015 and on or before June 30, 2017. Determining earnings that
17would have been paid to a participant had the participant not
18taken periods of voluntary or involuntary furlough or periods
19of voluntary pay reduction shall be the responsibility of the
20employer, and shall be reported in a manner prescribed by the
21System.
22    (h) This subsection (h) 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).

 

 

SB2156 Enrolled- 24 -LRB099 13062 RPS 36944 b

1    When assessing payment for any amount due under subsection
2(g), the System shall exclude earnings increases paid to
3participants under contracts or collective bargaining
4agreements entered into, amended, or renewed before June 1,
52005.
6    When assessing payment for any amount due under subsection
7(g), the System shall exclude earnings increases paid to a
8participant at a time when the participant is 10 or more years
9from retirement eligibility under Section 15-135.
10    When assessing payment for any amount due under subsection
11(g), the System shall exclude earnings increases resulting from
12overload work, including a contract for summer teaching, or
13overtime when the employer has certified to the System, and the
14System has approved the certification, that: (i) in the case of
15overloads (A) the overload work is for the sole purpose of
16academic instruction in excess of the standard number of
17instruction hours for a full-time employee occurring during the
18academic year that the overload is paid and (B) the earnings
19increases are equal to or less than the rate of pay for
20academic instruction computed using the participant's current
21salary rate and work schedule; and (ii) in the case of
22overtime, the overtime was necessary for the educational
23mission.
24    When assessing payment for any amount due under subsection
25(g), the System shall exclude any earnings increase resulting
26from (i) a promotion for which the employee moves from one

 

 

SB2156 Enrolled- 25 -LRB099 13062 RPS 36944 b

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

 

 

SB2156 Enrolled- 26 -LRB099 13062 RPS 36944 b

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

 

 

SB2156 Enrolled- 27 -LRB099 13062 RPS 36944 b

1contribution to the System, the value of the System's assets
2shall be equal to the actuarial value of the System's assets,
3which shall be calculated as follows:
4    As of June 30, 2008, the actuarial value of the System's
5assets shall be equal to the market value of the assets as of
6that date. In determining the actuarial value of the System's
7assets for fiscal years after June 30, 2008, any actuarial
8gains or losses from investment return incurred in a fiscal
9year shall be recognized in equal annual amounts over the
105-year period following that fiscal year.
11    (m) For purposes of determining the required State
12contribution to the system for a particular year, the actuarial
13value of assets shall be assumed to earn a rate of return equal
14to the system's actuarially assumed rate of return.
15(Source: P.A. 97-813, eff. 7-13-12; 98-92, eff. 7-16-13;
1698-463, eff. 8-16-13.)
 
17    (40 ILCS 5/15-158.2)
18    Sec. 15-158.2. Self-managed plan.
19    (a) Purpose. The General Assembly finds that it is
20important for colleges and universities to be able to attract
21and retain the most qualified employees and that in order to
22attract and retain these employees, colleges and universities
23should have the flexibility to provide a defined contribution
24plan as an alternative for eligible employees who elect not to
25participate in a defined benefit retirement program provided

 

 

SB2156 Enrolled- 28 -LRB099 13062 RPS 36944 b

1under this Article. Accordingly, the State Universities
2Retirement System is hereby authorized to establish and
3administer a self-managed plan, which shall offer
4participating employees the opportunity to accumulate assets
5for retirement through a combination of employee and employer
6contributions that may be invested in mutual funds, collective
7investment funds, or other investment products and used to
8purchase annuity contracts, either fixed or variable or a
9combination thereof. The plan must be qualified under the
10Internal Revenue Code of 1986.
11    (b) Adoption by employers. Each employer subject to this
12Article may elect to adopt the self-managed plan established
13under this Section; this election is irrevocable. An employer's
14election to adopt the self-managed plan makes available to the
15eligible employees of that employer the elections described in
16Section 15-134.5.
17    The State Universities Retirement System shall be the plan
18sponsor for the self-managed plan and shall prepare a plan
19document and prescribe such rules and procedures as are
20considered necessary or desirable for the administration of the
21self-managed plan. Consistent with its fiduciary duty to the
22participants and beneficiaries of the self-managed plan, the
23Board of Trustees of the System may delegate aspects of plan
24administration as it sees fit to companies authorized to do
25business in this State, to the employers, or to a combination
26of both.

 

 

SB2156 Enrolled- 29 -LRB099 13062 RPS 36944 b

1    (c) Selection of service providers and funding vehicles.
2The System, in consultation with the employers, shall solicit
3proposals to provide administrative services and funding
4vehicles for the self-managed plan from insurance and annuity
5companies and mutual fund companies, banks, trust companies, or
6other financial institutions authorized to do business in this
7State. In reviewing the proposals received and approving and
8contracting with no fewer than 2 and no more than 7 companies,
9the Board of Trustees of the System shall consider, among other
10things, the following criteria:
11        (1) the nature and extent of the benefits that would be
12    provided to the participants;
13        (2) the reasonableness of the benefits in relation to
14    the premium charged;
15        (3) the suitability of the benefits to the needs and
16    interests of the participating employees and the employer;
17        (4) the ability of the company to provide benefits
18    under the contract and the financial stability of the
19    company; and
20        (5) the efficacy of the contract in the recruitment and
21    retention of employees.
22    The System, in consultation with the employers, shall
23periodically review each approved company. A company may
24continue to provide administrative services and funding
25vehicles for the self-managed plan only so long as it continues
26to be an approved company under contract with the Board.

 

 

SB2156 Enrolled- 30 -LRB099 13062 RPS 36944 b

1    (d) Employee Direction. Employees who are participating in
2the program must be allowed to direct the transfer of their
3account balances among the various investment options offered,
4subject to applicable contractual provisions. The participant
5shall not be deemed a fiduciary by reason of providing such
6investment direction. A person who is a fiduciary shall not be
7liable for any loss resulting from such investment direction
8and shall not be deemed to have breached any fiduciary duty by
9acting in accordance with that direction. The System shall
10provide advance notice to the participant of the participant's
11obligation to direct the investment of employee and employer
12contributions into one or more investment funds selected by the
13System at the time he or she makes his or her initial
14retirement plan selection. If a participant fails to direct the
15investment of employee and employer contributions into the
16various investment options offered to the participant when
17making his or her initial retirement election choice, that
18failure shall require the System to invest the employee and
19employer contributions in a default investment fund on behalf
20of the participant, and the investment shall be deemed to have
21been made at the participant's investment direction. The
22participant has the right to transfer account balances out of
23the default investment fund during time periods designated by
24the System. Neither the System nor the employer guarantees any
25of the investments in the employee's account balances.
26    (e) Participation. An employee eligible to participate in

 

 

SB2156 Enrolled- 31 -LRB099 13062 RPS 36944 b

1the self-managed plan must make a written election in
2accordance with the provisions of Section 15-134.5 and the
3procedures established by the System. Participation in the
4self-managed plan by an electing employee shall begin on the
5first day of the first pay period following the later of the
6date the employee's election is filed with the System or the
7effective date as of which the employee's employer begins to
8offer participation in the self-managed plan. Employers may not
9make the self-managed plan available earlier than January 1,
101998. An employee's participation in any other retirement
11program administered by the System under this Article shall
12terminate on the date that participation in the self-managed
13plan begins.
14    An employee who has elected to participate in the
15self-managed plan under this Section must continue
16participation while employed in an eligible position, and may
17not participate in any other retirement program administered by
18the System under this Article while employed by that employer
19or any other employer that has adopted the self-managed plan,
20unless the self-managed plan is terminated in accordance with
21subsection (i).
22    Notwithstanding any other provision of this Article, a Tier
232 member shall have the option to enroll in the self-managed
24plan.
25    Participation in the self-managed plan under this Section
26shall constitute membership in the State Universities

 

 

SB2156 Enrolled- 32 -LRB099 13062 RPS 36944 b

1Retirement System.
2    A participant under this Section shall be entitled to the
3benefits of Article 20 of this Code.
4    (f) Establishment of Initial Account Balance. If at the
5time an employee elects to participate in the self-managed plan
6he or she has rights and credits in the System due to previous
7participation in the traditional benefit package, the System
8shall establish for the employee an opening account balance in
9the self-managed plan, equal to the amount of contribution
10refund that the employee would be eligible to receive under
11Section 15-154 if the employee terminated employment on that
12date and elected a refund of contributions, except that this
13hypothetical refund shall include interest at the effective
14rate for the respective years. The System shall transfer assets
15from the defined benefit retirement program to the self-managed
16plan, as a tax free transfer in accordance with Internal
17Revenue Service guidelines, for purposes of funding the
18employee's opening account balance.
19    (g) No Duplication of Service Credit. Notwithstanding any
20other provision of this Article, an employee may not purchase
21or receive service or service credit applicable to any other
22retirement program administered by the System under this
23Article for any period during which the employee was a
24participant in the self-managed plan established under this
25Section.
26    (h) Contributions. The self-managed plan shall be funded by

 

 

SB2156 Enrolled- 33 -LRB099 13062 RPS 36944 b

1contributions from employees participating in the self-managed
2plan and employer contributions as provided in this Section.
3    The contribution rate for employees participating in the
4self-managed plan under this Section shall be equal to the
5employee contribution rate for other participants in the
6System, as provided in Section 15-157. This required
7contribution shall be made as an "employer pick-up" under
8Section 414(h) of the Internal Revenue Code of 1986 or any
9successor Section thereof. Any employee participating in the
10System's traditional benefit package prior to his or her
11election to participate in the self-managed plan shall continue
12to have the employer pick up the contributions required under
13Section 15-157. However, the amounts picked up after the
14election of the self-managed plan shall be remitted to and
15treated as assets of the self-managed plan. In no event shall
16an employee have an option of receiving these amounts in cash.
17Employees may make additional contributions to the
18self-managed plan in accordance with procedures prescribed by
19the System, to the extent permitted under rules prescribed by
20the System.
21    The program shall provide for employer contributions to be
22credited to each self-managed plan participant at a rate of
237.6% of the participating employee's salary, less the amount
24used by the System to provide disability benefits for the
25employee. The amounts so credited shall be paid into the
26participant's self-managed plan accounts in a manner to be

 

 

SB2156 Enrolled- 34 -LRB099 13062 RPS 36944 b

1prescribed by the System.
2    An amount of employer contribution, not exceeding 1% of the
3participating employee's salary, shall be used for the purpose
4of providing the disability benefits of the System to the
5employee. Prior to the beginning of each plan year under the
6self-managed plan, the Board of Trustees shall determine, as a
7percentage of salary, the amount of employer contributions to
8be allocated during that plan year for providing disability
9benefits for employees in the self-managed plan.
10    The State of Illinois shall make contributions by
11appropriations to the System of the employer contributions
12required for employees who participate in the self-managed plan
13under this Section. The amount required shall be certified by
14the Board of Trustees of the System and paid by the State in
15accordance with Section 15-165. The System shall not be
16obligated to remit the required employer contributions to any
17of the insurance and annuity companies, mutual fund companies,
18banks, trust companies, financial institutions, or other
19sponsors of any of the funding vehicles offered under the
20self-managed plan until it has received the required employer
21contributions from the State. In the event of a deficiency in
22the amount of State contributions, the System shall implement
23those procedures described in subsection (c) of Section 15-165
24to obtain the required funding from the General Revenue Fund.
25    (i) Termination. The self-managed plan authorized under
26this Section may be terminated by the System, subject to the

 

 

SB2156 Enrolled- 35 -LRB099 13062 RPS 36944 b

1terms of any relevant contracts, and the System shall have no
2obligation to reestablish the self-managed plan under this
3Section. This Section does not create a right to continued
4participation in any self-managed plan set up by the System
5under this Section. If the self-managed plan is terminated, the
6participants shall have the right to participate in one of the
7other retirement programs offered by the System and receive
8service credit in such other retirement program for any years
9of employment following the termination.
10    (j) Vesting; Withdrawal; Return to Service. A participant
11in the self-managed plan becomes vested in the employer
12contributions credited to his or her accounts in the
13self-managed plan on the earliest to occur of the following:
14(1) completion of 5 years of service with an employer described
15in Section 15-106; (2) the death of the participating employee
16while employed by an employer described in Section 15-106, if
17the participant has completed at least 1 1/2 years of service;
18or (3) the participant's election to retire and apply the
19reciprocal provisions of Article 20 of this Code.
20    A participant in the self-managed plan who receives a
21distribution of his or her vested amounts from the self-managed
22plan while not yet eligible for retirement under this Article
23(and Article 20, if applicable) shall forfeit all service
24credit and accrued rights in the System; if subsequently
25re-employed, the participant shall be considered a new
26employee. If a former participant again becomes a participating

 

 

SB2156 Enrolled- 36 -LRB099 13062 RPS 36944 b

1employee (or becomes employed by a participating system under
2Article 20 of this Code) and continues as such for at least 2
3years, all such rights, service credits, and previous status as
4a participant shall be restored upon repayment of the amount of
5the distribution, without interest.
6    (k) Benefit amounts. If an employee who is vested in
7employer contributions terminates employment, the employee
8shall be entitled to a benefit which is based on the account
9values attributable to both employer and employee
10contributions and any investment return thereon.
11    If an employee who is not vested in employer contributions
12terminates employment, the employee shall be entitled to a
13benefit based solely on the account values attributable to the
14employee's contributions and any investment return thereon,
15and the employer contributions and any investment return
16thereon shall be forfeited. Any employer contributions which
17are forfeited shall be held in escrow by the company investing
18those contributions and shall be used as directed by the System
19for future allocations of employer contributions or for the
20restoration of amounts previously forfeited by former
21participants who again become participating employees.
22(Source: P.A. 98-92, eff. 7-16-13.)
 
23    (40 ILCS 5/15-168)  (from Ch. 108 1/2, par. 15-168)
24    Sec. 15-168. To require information.
25    (a) To require such information as shall be necessary for

 

 

SB2156 Enrolled- 37 -LRB099 13062 RPS 36944 b

1the proper operation of the system from any participant or
2beneficiary or annuitant benefit recipient or from any current
3or former employer of a participant or annuitant. Such
4information may include, but is not limited to, employment
5contracts current or former participant.
6    (b) When the System submits a request for information under
7subsection (a) of this Section, the employer shall respond
8within 90 calendar days of the System's request. Beginning on
9the 91st calendar day after the System's request, the System
10may assess a penalty of $250 per calendar day until receipt of
11the information by the System, with a maximum penalty of
12$25,000. All payments must be received within one calendar year
13after receipt of the information by the System or one calendar
14year of reaching the maximum penalty of $25,000, whichever
15occurs earlier. If the employer fails to make complete payment
16within the applicable timeframe, then the System may, after
17giving notice to the employer, certify the delinquent amount to
18the State Comptroller, and the Comptroller shall thereupon
19deduct the certified delinquent amount from State funds payable
20to the employer and pay them instead to the System.
21    (c) If a participant, beneficiary, or annuitant fails to
22provide any information that is necessary for the calculation,
23payment, or finalization of any benefit under this Article
24within 90 calendar days of the date of the System's request
25under subsection (a) of this Section, then the System may
26immediately cease processing the benefit and may not pay any

 

 

SB2156 Enrolled- 38 -LRB099 13062 RPS 36944 b

1additional benefit payment to the participant, beneficiary, or
2annuitant until the requested information is provided.
3(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
4    (40 ILCS 5/15-168.2)
5    Sec. 15-168.2. Audit of employers.
6    (a) Beginning August 1, 2013, the System may audit the
7employment records and payroll records of all employers. When
8the System audits an employer, it shall specify the exact
9information it requires, which may include but need not be
10limited to the names, titles, and earnings history of every
11individual receiving compensation from the employer. If an
12employer is audited by the System, then the employer must
13provide to the System all necessary documents and records
14within 60 calendar days after receiving notification from the
15System. When the System audits an employer, it shall send
16related correspondence by certified mail.
17    (b) When the System submits a request for information under
18subsection (a) of this Section, the employer shall respond
19within 60 calendar days of the System's request. Beginning on
20the 61st calendar day after the System's request, the System
21may assess a penalty of $250 per calendar day until receipt of
22the information by the System, with a maximum penalty of
23$25,000. All payments must be received by the System within one
24calendar year after receipt of the information by the System or
25one calendar year after reaching the maximum penalty of

 

 

SB2156 Enrolled- 39 -LRB099 13062 RPS 36944 b

1$25,000, whichever occurs earlier. If the employer fails to
2make complete payment within the applicable timeframe, then the
3System may, after giving notice to the employer, certify the
4delinquent amount to the State Comptroller, and the Comptroller
5shall thereupon deduct the certified delinquent amount from
6State funds payable to the employer and pay them instead to the
7System.
8(Source: P.A. 97-968, eff. 8-16-12.)