Full Text of SB0809 95th General Assembly
SB0809sam001 95TH GENERAL ASSEMBLY
|
Sen. David Koehler
Filed: 3/20/2007
|
|
09500SB0809sam001 |
|
LRB095 05513 AMC 34005 a |
|
| 1 |
| AMENDMENT TO SENATE BILL 809
| 2 |
| AMENDMENT NO. ______. Amend Senate Bill 809 by replacing | 3 |
| everything after the enacting clause with the following:
| 4 |
| "Section 5. The Illinois Pension Code is amended by | 5 |
| changing Section
7-141.1 as follows:
| 6 |
| (40 ILCS 5/7-141.1)
| 7 |
| Sec. 7-141.1. Early retirement incentive.
| 8 |
| (a) The General Assembly finds and declares that:
| 9 |
| (1) Units of local government across the State have | 10 |
| been functioning
under a financial crisis.
| 11 |
| (2) This financial crisis is expected to continue.
| 12 |
| (3) Units of local government must depend on additional | 13 |
| sources of
revenue and, when those sources are not | 14 |
| forthcoming, must establish
cost-saving programs.
| 15 |
| (4) An early retirement incentive designed | 16 |
| specifically to target
highly-paid senior employees could |
|
|
|
09500SB0809sam001 |
- 2 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| result in significant annual cost
savings.
| 2 |
| (5) The early retirement incentive should be made | 3 |
| available only to
those units of local government that | 4 |
| determine that an early retirement
incentive is in their | 5 |
| best interest.
| 6 |
| (6) A unit of local government adopting a program of | 7 |
| early retirement
incentives under this Section is | 8 |
| encouraged to implement personnel procedures
to prohibit, | 9 |
| for at least 5 years, the rehiring (whether on payroll or | 10 |
| by
independent contract) of employees who receive early | 11 |
| retirement incentives.
| 12 |
| (7) A unit of local government adopting a program of | 13 |
| early retirement
incentives under this Section is also | 14 |
| encouraged to replace as few of the
participating employees | 15 |
| as possible and to hire replacement employees for
salaries | 16 |
| totaling no more than 80% of the total salaries formerly | 17 |
| paid to the
employees who participate in the early | 18 |
| retirement program.
| 19 |
| It is the primary purpose of this Section to encourage | 20 |
| units of local
government that can realize true cost savings, | 21 |
| or have determined that an early
retirement program is in their | 22 |
| best interest, to implement an early retirement
program.
| 23 |
| (b) Until the effective date of this amendatory Act of | 24 |
| 1997, this
Section does not apply to any employer that is a | 25 |
| city, village, or incorporated
town, nor to the employees of | 26 |
| any such employer. Beginning on the effective
date of this |
|
|
|
09500SB0809sam001 |
- 3 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| amendatory Act of 1997, any employer under this Article, | 2 |
| including
an employer that is a city, village, or incorporated | 3 |
| town, may establish an
early retirement incentive program for | 4 |
| its employees under this Section. The
decision of a city, | 5 |
| village, or incorporated town to consider or establish an
early | 6 |
| retirement program is at the sole discretion of that city, | 7 |
| village, or
incorporated town, and nothing in this amendatory | 8 |
| Act of 1997 limits or
otherwise diminishes this discretion. | 9 |
| Nothing contained in this Section shall
be construed to require | 10 |
| a city, village, or incorporated town to establish an
early | 11 |
| retirement program and no city, village, or incorporated town | 12 |
| may be
compelled to implement such a program.
| 13 |
| The benefits provided in this Section are available only to | 14 |
| members
employed by a participating employer that has filed | 15 |
| with the Board of the
Fund a resolution or ordinance expressly | 16 |
| providing for the creation of an
early retirement incentive | 17 |
| program under this Section for its employees and
specifying the | 18 |
| effective date of the early retirement incentive program.
| 19 |
| Subject to the limitation in subsection (h), an employer may | 20 |
| adopt a resolution
or ordinance providing a program of early | 21 |
| retirement incentives under this
Section at any time.
| 22 |
| The resolution or ordinance shall be in substantially the | 23 |
| following form:
| 24 |
| RESOLUTION (ORDINANCE) NO. ....
| 25 |
| A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
|
|
|
|
09500SB0809sam001 |
- 4 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
| 2 |
| IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
| 3 |
| WHEREAS, Section 7-141.1 of the Illinois Pension Code | 4 |
| provides that a
participating employer may elect to adopt an | 5 |
| early retirement
incentive program offered by the Illinois | 6 |
| Municipal Retirement Fund by
adopting a resolution or | 7 |
| ordinance; and
| 8 |
| WHEREAS, The goal of adopting an early retirement program | 9 |
| is
to realize a substantial savings in personnel costs by | 10 |
| offering early
retirement incentives to employees who have | 11 |
| accumulated many years of
service credit; and
| 12 |
| WHEREAS, Implementation of the early retirement program | 13 |
| will provide a
budgeting tool to aid in controlling payroll | 14 |
| costs; and
| 15 |
| WHEREAS, The (name of governing body) has determined that | 16 |
| the adoption of an
early retirement incentive program is in the | 17 |
| best interests of the (name of
participating employer); | 18 |
| therefore be it
| 19 |
| RESOLVED (ORDAINED) by the (name of governing body) of | 20 |
| (name of
participating employer) that:
| 21 |
| (1) The (name of participating employer) does hereby adopt | 22 |
| the Illinois
Municipal Retirement Fund early retirement | 23 |
| incentive program as provided in
Section 7-141.1 of the | 24 |
| Illinois Pension Code. The early retirement incentive
program | 25 |
| shall take effect on (date).
| 26 |
| (2) In order to help achieve a true cost savings, a person |
|
|
|
09500SB0809sam001 |
- 5 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| who retires under
the early retirement incentive program shall | 2 |
| lose those incentives if he or she
later accepts employment | 3 |
| with any IMRF employer in a position for which
participation in | 4 |
| IMRF is required or is elected by the employee.
| 5 |
| (3) In order to utilize an early retirement incentive as a | 6 |
| budgeting
tool, the (name of participating employer) will use | 7 |
| its best efforts either
to limit the number of employees who | 8 |
| replace the employees who retire under
the early retirement | 9 |
| program or to limit the salaries paid to the employees who
| 10 |
| replace the employees who retire under the early retirement | 11 |
| program.
| 12 |
| (4) The effective date of each employee's retirement under | 13 |
| this early
retirement program shall be set by (name of | 14 |
| employer) and shall be no
earlier than the effective date of | 15 |
| the program and no later than one year after
that effective | 16 |
| date; except that the employee may require that the retirement
| 17 |
| date set by the employer be no later than the June 30 next | 18 |
| occurring after the
effective date of the program and no | 19 |
| earlier than the date upon which the
employee qualifies for | 20 |
| retirement.
| 21 |
| (5) To be eligible for the early retirement incentive under | 22 |
| this Section,
the employee must have attained age 50 and have | 23 |
| at least 20 years of creditable
service by his or her | 24 |
| retirement date.
| 25 |
| (6) The (clerk or secretary) shall promptly file a | 26 |
| certified copy of
this resolution (ordinance) with the Board of |
|
|
|
09500SB0809sam001 |
- 6 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| Trustees of the Illinois
Municipal Retirement Fund.
| 2 |
| CERTIFICATION
| 3 |
| I, (name), the (clerk or secretary) of the (name of | 4 |
| participating
employer) of the County of (name), State of | 5 |
| Illinois, do hereby certify
that I am the keeper of the books | 6 |
| and records of the (name of employer)
and that the foregoing is | 7 |
| a true and correct copy of a resolution
(ordinance) duly | 8 |
| adopted by the (governing body) at a meeting duly convened
and | 9 |
| held on (date).
| 10 |
| SEAL
| 11 |
| (Signature of clerk or secretary)
| 12 |
| (c) To be eligible for the benefits provided under an early | 13 |
| retirement
incentive program adopted under this Section, a | 14 |
| member must:
| 15 |
| (1) be a participating employee of this Fund who, on | 16 |
| the effective date of
the program, (i) is in active payroll | 17 |
| status as an employee of a participating
employer that has | 18 |
| filed the required ordinance or resolution with the Board,
| 19 |
| (ii) is on layoff status from such a position with a right | 20 |
| of re-employment or
recall to service, (iii) is on a leave | 21 |
| of absence from such a position, or (iv)
is on disability | 22 |
| but has not been receiving benefits under Section 7-146 or
| 23 |
| 7-150 for a period of more than 2 years from the date of | 24 |
| application;
| 25 |
| (2) have never previously received a retirement |
|
|
|
09500SB0809sam001 |
- 7 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| annuity under
this Article or under the Retirement Systems | 2 |
| Reciprocal Act using service
credit established under this | 3 |
| Article;
| 4 |
| (3) (blank);
| 5 |
| (4) have at least 20 years of creditable service in the | 6 |
| Fund by the date
of retirement, without the use of any | 7 |
| creditable service established under this
Section;
| 8 |
| (5) have attained age 50 by the date of retirement, | 9 |
| without the use of any
age enhancement received under this | 10 |
| Section; and
| 11 |
| (6) be eligible to receive a retirement annuity under | 12 |
| this Article by the
date of retirement, for which purpose | 13 |
| the age enhancement and creditable
service established | 14 |
| under this Section may be considered.
| 15 |
| (d) The employer shall determine the retirement date for | 16 |
| each employee
participating in the early retirement program | 17 |
| adopted under this Section. The
retirement date shall be no | 18 |
| earlier than the effective date of the program and
no later | 19 |
| than one year after that effective date, except that the | 20 |
| employee may
require that the retirement date set by the | 21 |
| employer be no later than the June
30 next occurring after the | 22 |
| effective date of the program and no earlier than
the date upon | 23 |
| which the employee qualifies for retirement. The employer shall
| 24 |
| give each employee participating in the early retirement | 25 |
| program at least 30
days written notice of the employee's | 26 |
| designated retirement date, unless the
employee waives this |
|
|
|
09500SB0809sam001 |
- 8 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| notice requirement.
| 2 |
| (e) An eligible person may establish up to 5 years of | 3 |
| creditable service
under this Section. In addition, for each | 4 |
| period of creditable service
established under this Section, a | 5 |
| person shall have his or her age at
retirement deemed enhanced | 6 |
| by an equivalent period.
| 7 |
| The creditable service established under this Section may | 8 |
| be used for all
purposes under this Article and the Retirement | 9 |
| Systems Reciprocal Act,
except for the computation of final | 10 |
| rate of earnings and the determination
of earnings, salary, or | 11 |
| compensation under this or any other Article of the
Code.
| 12 |
| The age enhancement established under this Section may be | 13 |
| used for all
purposes under this Article (including calculation | 14 |
| of the reduction imposed
under subdivision (a)1b(iv) of Section | 15 |
| 7-142), except for purposes of a
reversionary annuity under | 16 |
| Section 7-145 and any distributions required because
of age. | 17 |
| The age enhancement established under this Section may be used | 18 |
| in
calculating a proportionate annuity payable by this Fund | 19 |
| under the Retirement
Systems Reciprocal Act, but shall not be | 20 |
| used in determining benefits payable
under other Articles of | 21 |
| this Code under the Retirement Systems Reciprocal Act.
| 22 |
| (f) For all creditable service established under this | 23 |
| Section, the
member must pay to the Fund an employee | 24 |
| contribution consisting of 4.5%
of the member's highest annual | 25 |
| salary rate used in the determination of the
final rate of | 26 |
| earnings for retirement annuity purposes for each year of
|
|
|
|
09500SB0809sam001 |
- 9 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| creditable service granted under this Section. For creditable | 2 |
| service
established under this Section by a person who is a | 3 |
| sheriff's law
enforcement employee to be deemed service as a | 4 |
| sheriff's law enforcement
employee, the employee contribution | 5 |
| shall be at the rate of 6.5%
of highest annual salary per year | 6 |
| of creditable service granted.
Contributions for fractions of a | 7 |
| year of service shall be prorated.
Any amounts that are | 8 |
| disregarded in determining the final rate of earnings
under | 9 |
| subdivision (d)(5) of Section 7-116 (the 125% rule) shall also | 10 |
| be
disregarded in determining the required contribution under | 11 |
| this subsection (f).
| 12 |
| The employee contribution shall be paid to the Fund as | 13 |
| follows: If the
member is entitled to a lump sum payment for | 14 |
| accumulated vacation, sick leave,
or personal leave upon | 15 |
| withdrawal from service, the employer shall deduct the
employee | 16 |
| contribution from that lump sum and pay the deducted amount | 17 |
| directly
to the Fund. If there is no such lump sum payment or | 18 |
| the required employee
contribution exceeds the net amount of | 19 |
| the lump sum payment, then the remaining
amount due, at the | 20 |
| option of the employee, may either be paid to the Fund
before | 21 |
| the annuity commences or deducted from the retirement annuity | 22 |
| in 24
equal monthly installments.
| 23 |
| (g) An annuitant who has received any age enhancement or | 24 |
| creditable service
under this Section and thereafter accepts | 25 |
| employment with or enters into a
personal services contract | 26 |
| with an employer under this Article thereby forfeits
that age |
|
|
|
09500SB0809sam001 |
- 10 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| enhancement and creditable service; except that beginning
on | 2 |
| the effective date of this amendatory Act of the 95th General | 3 |
| Assembly, this
prohibition applies only to (1) employment for | 4 |
| which the person is required (or
is allowed and has elected) to | 5 |
| participate in this Fund and (2) contractual
personal services | 6 |
| that, if performed as an employee, would require the
employee | 7 |
| to participate in this Fund
except that this restriction
does | 8 |
| not apply to service in an elective office, so long as the | 9 |
| annuitant
does not participate in this Fund with respect to | 10 |
| that office . | 11 |
| A person
forfeiting early retirement incentives under this | 12 |
| subsection (i) must repay to
the Fund that portion of the | 13 |
| retirement annuity already received which is
attributable to | 14 |
| the early retirement incentives that are being forfeited, (ii)
| 15 |
| shall not be eligible to participate in any future early | 16 |
| retirement program
adopted under this Section, and (iii) is | 17 |
| entitled to a refund of the employee
contribution paid under | 18 |
| subsection (f). The Board shall deduct the required
repayment | 19 |
| from the refund and may impose a reasonable payment schedule | 20 |
| for
repaying the amount, if any, by which the required | 21 |
| repayment exceeds the refund
amount.
| 22 |
| The change made to this subsection by this amendatory Act | 23 |
| of the 95th
General Assembly is not limited to persons in | 24 |
| service on or after its effective
date, but it does not restore | 25 |
| eligibility for early retirement benefits to any
person who has | 26 |
| previously forfeited those benefits due to employment accepted
|
|
|
|
09500SB0809sam001 |
- 11 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| (or a contract entered into) before that effective date. | 2 |
| (h) The additional unfunded liability accruing as a result | 3 |
| of the adoption
of a program of early retirement incentives | 4 |
| under this Section by an employer
shall be amortized over a | 5 |
| period of 10 years beginning on January 1 of the
second | 6 |
| calendar year following the calendar year in which the latest | 7 |
| date for
beginning to receive a retirement annuity under the | 8 |
| program (as determined by
the employer under subsection (d) of | 9 |
| this Section) occurs; except that the
employer may provide for | 10 |
| a shorter amortization period (of no less than 5
years) by | 11 |
| adopting an ordinance or resolution specifying the length of | 12 |
| the
amortization period and submitting a certified copy of the | 13 |
| ordinance or
resolution to the Fund no later than 6 months | 14 |
| after the effective date of the
program. An employer, at its | 15 |
| discretion, may accelerate payments to the Fund.
| 16 |
| An employer may provide more than one early retirement | 17 |
| incentive program
for its employees under this Section. | 18 |
| However, an employer that has provided
an early retirement | 19 |
| incentive program for its employees under this Section may
not | 20 |
| provide another early retirement incentive program under this | 21 |
| Section until the liability arising from the earlier program | 22 |
| has been fully paid to
the Fund.
| 23 |
| (Source: P.A. 94-456, eff. 8-4-05.)
| 24 |
| Section 90. The State Mandates Act is amended by adding | 25 |
| Section 8.31 as follows: |
|
|
|
09500SB0809sam001 |
- 12 - |
LRB095 05513 AMC 34005 a |
|
| 1 |
| (30 ILCS 805/8.31 new) | 2 |
| Sec. 8.31. Exempt mandate. Notwithstanding Sections 6 and 8 | 3 |
| of this Act, no reimbursement by the State is required for the | 4 |
| implementation of any mandate created by this amendatory Act of | 5 |
| the 95th General Assembly. | 6 |
| Section 99. Effective date. This Act takes effect upon | 7 |
| becoming law.".
|
|