HB1605sam003 97TH GENERAL ASSEMBLY

Sen. Don Harmon

Filed: 5/8/2012

09700HB1605sam003 LRB097 07147 EFG 69027 a

AMENDMENT TO HOUSE BILL 1605

AMENDMENT NO. ______. Amend House Bill 1605 AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Pension Code is amended by changing Sections 1-160, 3-106, 3-124.1, 4-106, 4-117, and 7-144 and by adding Sections 3-124.3, 4-117.2, and 7-144.1 as follows:

(40 ILCS 5/1-160)

Sec. 1-160. Provisions applicable to new hires.

(a) The provisions of this Section apply to a person who, on or after January 1, 2011, first becomes a member or a participant under any reciprocal retirement system or pension fund established under this Code, other than a retirement system or pension fund established under Article 2, 3, 4, 5, 6, or 18 of this Code, notwithstanding any other provision of this Code to the contrary, but do not apply to any self-managed plan established under this Code, to any person with respect to service as a sheriff's law enforcement employee under Article 7, or to any participant of the retirement plan established under Section 22-101.

(b) "Final average salary" means the average monthly (or annual) salary obtained by dividing the total salary or earnings calculated under the Article applicable to the member or participant during the 96 consecutive months (or 8 consecutive years) of service within the last 120 months (or 10 years) of service in which the total salary or earnings calculated under the applicable Article was the highest by the number of months (or years) of service in that period. For the purposes of a person who first becomes a member or participant of any retirement system or pension fund to which this Section applies on or after January 1, 2011, in this Code, "final average salary" shall be substituted for the following:

(1) In Articles 7 (except for service as sheriff's law enforcement employees) and 15, "final rate of earnings".

(2) In Articles 8, 9, 10, 11, and 12, "highest average annual salary for any 4 consecutive years within the last 10 years of service immediately preceding the date of withdrawal".

(3) In Article 13, "average final salary".

(4) In Article 14, "final average compensation".

(5) In Article 17, "average salary".

(6) In Section 22-207, "wages or salary received by him at the date of retirement or discharge".

(b-5) Beginning on January 1, 2011, for all purposes under this Code (including without limitation the calculation of benefits and employee contributions), the annual earnings, salary, or wages (based on the plan year) of a member or participant to whom this Section applies shall not exceed $106,800; however, that amount shall annually thereafter be increased by the lesser of (i) 3% of that amount, including all previous adjustments, or (ii) one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments.

For the purposes of this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the boards of the retirement systems and pension funds by November 1 of each year.

(c) A member or participant is entitled to a retirement annuity upon written application if he or she has attained age 67 and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article.

A member or participant who has attained age 62 and has at least 10 years of service credit and is otherwise eligible under the requirements of the applicable Article may elect to receive the lower retirement annuity provided in subsection (d) of this Section.

(d) The retirement annuity of a member or participant who is retiring after attaining age 62 with at least 10 years of service credit shall be reduced by one-half of 1% for each full month that the member's age is under age 67.

(e) Any retirement annuity or supplemental annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted retirement annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(f) The initial survivor's or widow's annuity of an otherwise eligible survivor or widow of a retired member or participant who first became a member or participant on or after January 1, 2011 shall be in the amount of 66 2/3% of the retired member's or participant's retirement annuity at the date of death. In the case of the death of a member or participant who has not retired and who first became a member or participant on or after January 1, 2011, eligibility for a survivor's or widow's annuity shall be determined by the applicable Article of this Code. The initial benefit shall be 66 2/3% of the earned annuity without a reduction due to age. A child's annuity of an otherwise eligible child shall be in the amount prescribed under each Article if applicable. Any survivor's or widow's annuity shall be increased (1) on each January 1 occurring on or after the commencement of the annuity if the deceased member died while receiving a retirement annuity or (2) in other cases, on each January 1 occurring after the first anniversary of the commencement of the annuity. Each annual increase shall be calculated at 3% or one-half the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, whichever is less, of the originally granted survivor's annuity. If the annual unadjusted percentage change in the consumer price index-u for the 12 months ending with the September preceding each November 1 is zero or there is a decrease, then the annuity shall not be increased.

(g) The benefits in Section 14-110 apply only if the person is a State policeman, a fire fighter in the fire protection service of a department, or a security employee of the Department of Corrections or the Department of Juvenile Justice, as those terms are defined in subsection (b) of Section 14-110. A person who meets the requirements of this Section is entitled to an annuity calculated under the provisions of Section 14-110, in lieu of the regular or minimum retirement annuity, only if the person has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 60, regardless of whether the attainment of age 60 occurs while the person is still in service.

(h) If a person who first becomes a member or a participant of a retirement system or pension fund subject to this Section on or after January 1, 2011 is receiving a retirement annuity or retirement pension under that system or fund and becomes a member or participant under any other system or fund created by this Code and is employed on a full-time basis, except for those members or participants exempted from the provisions of this Section under subsection (a) of this Section, then the person's retirement annuity or retirement pension under that system or fund shall be suspended during that employment. Upon termination of that employment, the person's retirement annuity or retirement pension payments shall resume and be recalculated if recalculation is provided for under the applicable Article of this Code.

If a person who first becomes a member of a retirement system or pension fund subject to this Section on or after January 1, 2012 and is receiving a retirement annuity or retirement pension under that system or fund and accepts on a contractual basis a position to provide services to a governmental entity from which he or she has retired, then that person's annuity or retirement pension earned as an active employee of the employer shall be suspended during that contractual service. A person receiving an annuity or retirement pension under this Code shall notify the pension fund or retirement system from which he or she is receiving an annuity or retirement pension, as well as his or her contractual employer, of his or her retirement status before accepting contractual employment. A person who fails to submit such notification shall be guilty of a Class A misdemeanor and required to pay a fine of $1,000. Upon termination of that contractual employment, the person's retirement annuity or retirement pension payments shall resume and, if appropriate, be recalculated under the applicable provisions of this Code.

This subsection (h) shall not affect any person receiving a retirement annuity under the fund created by Article 7 of this Code who accepts a position described in Section 7-144.1 of this Code.

(i) Notwithstanding any other provision of this Section, a person who first becomes a participant of the retirement system established under Article 15 on or after January 1, 2011 shall have the option to enroll in the self-managed plan created under Section 15-158.2 of this Code.

(j) In the case of a conflict between the provisions of this Section and any other provision of this Code, the provisions of this Section shall control.

(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11; 97-609, eff. 1-1-12.)

(40 ILCS 5/3-106) (from Ch. 108 1/2, par. 3-106)

Sec. 3-106. Police officer, officer. "Police officer" or "officer": Any person who (1) is appointed to the police force of a police department and sworn and commissioned to perform police duties; and (2) within 3 months after receiving his or her first appointment and, if reappointed, within 3 months thereafter, or as otherwise provided in Section 3-109, makes written application to the board to come under the provisions of this Article.

Police officers serving initial probationary periods, if otherwise eligible, shall be police officers within the meaning of this Section.

Any person employed as the chief of police, deputy chief of police, superintendent of a police department or deputy superintendent of a police department shall be a police officer within the meaning of this Section.

(Source: P.A. 89-52, eff. 6-30-95.)

(40 ILCS 5/3-124.1) (from Ch. 108 1/2, par. 3-124.1)

Sec. 3-124.1. Re-entry into active service.

(a) If a police officer who is receiving pension payments other than as provided in Section 3-109.3 or Section 3-124.3 re-enters active service, pension payment shall be suspended while he or she is in service. When he or she again retires, pension payments shall be resumed. If the police officer remains in service after re-entry for a period of less than 5 years, the pension shall be the same as upon first retirement. If the officer's service after re-entry is at least 5 years and the officer makes the required contributions during the period of re-entry, his or her pension shall be recomputed by taking into account the additional period of service and salary.

(b) A retired police officer who accepts temporary employment for a period not exceeding 75 working days in any calendar year is not considered to make a re-entry into active service within the meaning of this Section. Any part of a day on temporary employment is considered a full day of employment. Employee contributions under Section 3-125.1 shall not be deducted nor shall creditable service time be granted during the period of temporary employment.

(Source: P.A. 91-939, eff. 2-1-01.)

(40 ILCS 5/3-124.3 new)

Sec. 3-124.3. Pension payments during contractual return to active service.

(a) Notwithstanding any other provisions of this Code, if a police officer receiving pension payments accepts on a contractual basis a position to provide services to a municipality from which he or she has retired, then that police officer shall continue to receive the pension payments earned during active service, provided:

(1) he or she is at least age 55 and has at least 30 years of service;

(2) his or her annual salary during the period of contractual service is not more than 50% of his or her salary from the last 12 months preceding retirement; and

(3) his or her salary did not increase by more than 10% per year during the 2 years preceding retirement.

(b) The municipality shall pay to the pension fund an amount equal to 14% of the annual salary of the police officer during each calendar year, or portion thereof, that he or she is performing contractual service as described in subsection (a).

(c) Except as set forth in subsection (b) of this Section, no employer contribution shall be required from a municipality for any police officer providing contractual service as described in subsection (a) of this Section. No contribution shall be required pursuant to Section 3-125.1 from any police officer performing contractual service as described in subsection (a) of this Section.

(d) The period of contractual service described in subsection (a) of this Section shall not provide a basis for the recomputation of the police officer's pension.

(40 ILCS 5/4-106) (from Ch. 108 1/2, par. 4-106)

Sec. 4-106. Firefighter, firefighters. "Firefighter, firefighters":

(a) In municipalities which have adopted Division 1 of Article 10 of the Illinois Municipal Code, any person employed in the municipality's fire service as a firefighter, fire engineer, marine engineer, fire pilot, bomb technician or scuba diver; and in any of these positions where such person's duties also include those of a firefighter as classified by the Civil Service Commission of that city, and whose duty is to participate in the work of controlling and extinguishing fires at the location of any such fires.

(b) In municipalities which are subject to Division 2.1 of Article 10 of the Illinois Municipal Code, any person employed by a city in its fire service as a firefighter, fire engineer, marine engineer, fire pilot, bomb technician, or scuba diver; and, in any of these positions whose duties also include those of a firefighter and are certified in the same manner as a firefighter in that city.

(c) In municipalities which are subject to neither Division 1 nor Division 2.1 of Article 10 of the Illinois Municipal Code, any person who would have been included as a firefighter under sub-paragraph (a) or (b) above except that he served as a de facto and not as a de jure firefighter.

(d) Notwithstanding the other provisions of this Section, "firefighter" does not include any person who is actively participating in the State Universities Retirement System under subsection (h) of Section 15-107 with respect to the employment for which he or she is a participating employee in that System.

(e) This amendatory Act of 1977 does not affect persons covered by this Article prior to September 22, 1977.

(f) Any person employed by a municipality as the chief, deputy chief, superintendent, deputy superintendent, fire marshal or assistant fire marshal of the fire department shall be a firefighter within the meaning of this Section.

(Source: P.A. 90-576, eff. 3-31-98.)

(40 ILCS 5/4-117) (from Ch. 108 1/2, par. 4-117)

Sec. 4-117. Reentry into active service.

(a) Except as set forth in Section 4-117.2, if If a firefighter receiving pension payments reenters active service, pension payments shall be suspended while he or she is in service. If the firefighter again retires or is discharged, his or her monthly pension shall be resumed in the same amount as was paid upon first retirement or discharge unless he or she remained in active service 3 or more years after re-entry in which case the monthly pension shall be based on the salary attached to the firefighter's rank at the date of last retirement.

(b) If a deferred pensioner re-enters active service, and again retires or is discharged from the fire service, his or her pension shall be based on the salary attached to the rank held in the fire service at the date of earlier retirement, unless the firefighter remains in active service for 3 or more years after re-entry, in which case the monthly pension shall be based on the salary attached to the firefighter's rank at the date of last retirement.

(c) If a pensioner or deferred pensioner re-enters or is recalled to active service and is thereafter injured, and the injury is not related to an injury for which he or she was previously receiving a disability pension, the 3 year service requirement shall not apply in order for the firefighter to qualify for the increased pension based on the rate of pay at the time of the new injury.

(d) A retired firefighter who accepts temporary employment for a period not exceeding 75 working days in any calendar year is not considered to make a re-entry into active service within the meaning of this Section. Any part of a day on temporary employment is considered a full day of employment. Employee contributions under Section 4-118.1 shall not be deducted nor shall creditable service time be granted during the period of temporary employment.

(Source: P.A. 83-1440.)

(40 ILCS 5/4-117.2 new)

Sec. 4-117.2. Pension payments during contractual return to active service.

(a) Notwithstanding any other provisions of this Code, if a firefighter receiving pension payments accepts on a contractual basis a position to provide services to a municipality from which he or she has retired, then that firefighter shall continue to receive the pension payments earned during active service, provided:

(1) he or she is at least age 55 and has at least 30 years of service;

(2) his or her annual salary during the period of contractual service is not more than 50% of his or her salary from the last 12 months preceding retirement; and

(3) his or her salary did not increase by more than 10% per year during the 2 years preceding retirement.

(b) The municipality shall pay to the pension fund an amount equal to 14% of the annual salary of the firefighter during each calendar year, or portion thereof, that he or she is performing contractual service as described in subsection (a).

(c) Except as set forth in subsection (b) of this Section, no employer contribution shall be required from a municipality for any firefighter providing contractual service as described in subsection (a) of this Section. No contribution shall be required pursuant to Section 4-118.1 from any firefighter performing contractual service as described in subsection (a) of this Section

(d) The period of contractual service described in subsection (a) of this Section shall not provide a basis for the recomputation of the firefighter's pension.

(40 ILCS 5/7-144) (from Ch. 108 1/2, par. 7-144)

Sec. 7-144. Retirement annuities-Suspended during employment.

(a) Except as set forth in Section 7-144.1, if If any person receiving any annuity again becomes an employee and receives earnings from employment in a position requiring him, or entitling him to elect, to become a participating employee, then the annuity payable to such employee shall be suspended as of the 1st day of the month coincidental with or next following the date upon which such person becomes such an employee. Upon proper qualification of the participating employee payment of such annuity may be resumed on the 1st day of the month following such qualification and upon proper application therefor. The participating employee in such case shall be entitled to a supplemental annuity arising from service and credits earned subsequent to such re-entry as a participating employee.

(b) Supplemental annuities to persons who return to service for less than 48 months shall be computed under the provisions of Sections 7-141, 7-142 and 7-143. In determining whether an employee is eligible for an annuity which requires a minimum period of service, his entire period of service shall be taken into consideration but the supplemental annuity shall be based on earnings and service in the supplemental period only. The effective date of the suspended and supplemental annuity for the purpose of increases after retirement shall be considered to be the effective date of the suspended annuity.

(c) Supplemental annuities to persons who return to service for 48 months or more shall be a monthly amount determined as follows:

(1) An amount shall be computed under subparagraph b of paragraph (1) of subsection (a) of Section 7-142, considering all of the service credits of the employee;

(2) The actuarial value in monthly payments for life of the annuity payments made before suspension shall be determined and subtracted from the amount determined in (1) above;

(3) The monthly amount of the suspended annuity, with any applicable increases after retirement computed from the effective date to the date of reinstatement, shall be subtracted from the amount determined in (2) above and the remainder shall be the amount of the supplemental annuity provided that this amount shall not be less than the amount computed under subsection (b) of this Section.

(4) The suspended annuity shall be reinstated at an amount including any increases after retirement from the effective date to date of reinstatement.

(5) The effective date of the combined suspended and supplemental annuities for the purposes of increases after retirement shall be considered to be the effective date of the supplemental annuity.

(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12.)

(40 ILCS 5/7-144.1 new)

Sec. 7-144.1. Retirement annuities - Payable during contractual return to service.

(a) Notwithstanding any other provisions of this Code, if any person receiving a retirement annuity accepts on a contractual basis a position to provide services to a participating municipality or participating instrumentality from which he or she has retired, then that person shall continue to receive the retirement annuity earned as an active employee, provided:

(1) he or she is at least age 55 and has at least 30 years of service;

(2) his or her annual earnings during the period of contractual service are not more than 50% of his or her earnings from the last 12 months preceding separation from service of all participating municipalities and instrumentalities thereof and participating instrumentalities; and

(3) his or her earnings did not increase by more than 10% per year during the 2 years preceding separation from service of all participating municipalities and instrumentalities thereof and participating instrumentalities.

(b) The participating municipality or participating instrumentality shall pay to the Fund an amount equal to 14% of the annual earnings of the person during each calendar year, or portion thereof, that he or she is performing contractual service as described in subsection (a).

(c) No contribution shall be required from a participating municipality or participating instrumentality pursuant to Section 7-172 for any person performing contractual service as described in subsection (a) of this Section. No contribution shall be required pursuant to Section 7-173 from any person performing contractual service as described in subsection (a) of this Section.

(d) No person shall be eligible for a supplemental annuity based on a period of contractual service described in subsection (a) of this Section.".