State of Illinois
2015 and 2016


Introduced 2/18/2016, by Sen. Pamela J. Althoff


40 ILCS 5/7-144  from Ch. 108 1/2, par. 7-144
40 ILCS 5/7-172  from Ch. 108 1/2, par. 7-172
30 ILCS 805/8.40 new

    Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that if an employer fails to notify the Board to suspend the annuity of an annuitant who returns to service as a participating employee, the employer may be required to reimburse the Fund for an amount up to the total of any annuity payments made to the annuitant after the date the annuity should have been suspended, as determined by the Board, less any amount actually repaid by the annuitant. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

LRB099 18202 EFG 42570 b






SB2896LRB099 18202 EFG 42570 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 7-144 and 7-172 as follows:
6    (40 ILCS 5/7-144)  (from Ch. 108 1/2, par. 7-144)
7    Sec. 7-144. Retirement annuities - Suspended during
9    (a) If any person receiving any annuity again becomes an
10employee and receives earnings from employment in a position
11requiring him, or entitling him to elect, to become a
12participating employee, then the annuity payable to such
13employee shall be suspended as of the 1st day of the month
14coincidental with or next following the date upon which such
15person becomes such an employee, unless the person is
16authorized under subsection (b) of Section 7-137.1 of this Code
17to continue receiving a retirement annuity during that period.
18Upon proper qualification of the participating employee
19payment of such annuity may be resumed on the 1st day of the
20month following such qualification and upon proper application
21therefor. The participating employee in such case shall be
22entitled to a supplemental annuity arising from service and
23credits earned subsequent to such re-entry as a participating



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2    Notwithstanding any other provision of this Article, an
3annuitant shall be considered a participating employee if he or
4she returns to work as an employee with a participating
5employer and works more than 599 hours annually (or 999 hours
6annually with a participating employer that has adopted a
7resolution pursuant to subsection (e) of Section 7-137 of this
8Code). Each of these annual periods shall commence on the month
9and day upon which the annuitant is first employed with the
10participating employer following the effective date of the
12    (a-5) If any annuitant under this Article must be
13considered a participating employee per the provisions of
14subsection (a) of this Section, and the participating
15municipality or participating instrumentality that employs or
16re-employs that annuitant fails to notify the Board to suspend
17the annuity, the participating municipality or participating
18instrumentality may be required to reimburse the Fund for an
19amount up to the total of any annuity payments made to the
20annuitant after the date the annuity should have been
21suspended, as determined by the Board, less any amount actually
22repaid by the annuitant.
23    (b) Supplemental annuities to persons who return to service
24for less than 48 months shall be computed under the provisions
25of Sections 7-141, 7-142 and 7-143. In determining whether an
26employee is eligible for an annuity which requires a minimum



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1period of service, his entire period of service shall be taken
2into consideration but the supplemental annuity shall be based
3on earnings and service in the supplemental period only. The
4effective date of the suspended and supplemental annuity for
5the purpose of increases after retirement shall be considered
6to be the effective date of the suspended annuity.
7    (c) Supplemental annuities to persons who return to service
8for 48 months or more shall be a monthly amount determined as
10        (1) An amount shall be computed under subparagraph b of
11    paragraph (1) of subsection (a) of Section 7-142,
12    considering all of the service credits of the employee;
13        (2) The actuarial value in monthly payments for life of
14    the annuity payments made before suspension shall be
15    determined and subtracted from the amount determined in (1)
16    above;
17        (3) The monthly amount of the suspended annuity, with
18    any applicable increases after retirement computed from
19    the effective date to the date of reinstatement, shall be
20    subtracted from the amount determined in (2) above and the
21    remainder shall be the amount of the supplemental annuity
22    provided that this amount shall not be less than the amount
23    computed under subsection (b) of this Section.
24        (4) The suspended annuity shall be reinstated at an
25    amount including any increases after retirement from the
26    effective date to date of reinstatement.



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1        (5) The effective date of the combined suspended and
2    supplemental annuities for the purposes of increases after
3    retirement shall be considered to be the effective date of
4    the supplemental annuity.
5(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12;
698-389, eff. 8-16-13.)
7    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
8    Sec. 7-172. Contributions by participating municipalities
9and participating instrumentalities.
10    (a) Each participating municipality and each participating
11instrumentality shall make payment to the fund as follows:
12        1. municipality contributions in an amount determined
13    by applying the municipality contribution rate to each
14    payment of earnings paid to each of its participating
15    employees;
16        2. an amount equal to the employee contributions
17    provided by paragraph (a) of Section 7-173, whether or not
18    the employee contributions are withheld as permitted by
19    that Section;
20        3. all accounts receivable, together with interest
21    charged thereon, as provided in Section 7-209, and any
22    amounts due under subsection (a-5) of Section 7-144;
23        4. if it has no participating employees with current
24    earnings, an amount payable which, over a closed period of
25    20 years for participating municipalities and 10 years for



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1    participating instrumentalities, will amortize, at the
2    effective rate for that year, any unfunded obligation. The
3    unfunded obligation shall be computed as provided in
4    paragraph 2 of subsection (b);
5        5. if it has fewer than 7 participating employees or a
6    negative balance in its municipality reserve, the greater
7    of (A) an amount payable that, over a period of 20 years,
8    will amortize at the effective rate for that year any
9    unfunded obligation, computed as provided in paragraph 2 of
10    subsection (b) or (B) the amount required by paragraph 1 of
11    this subsection (a).
12    (b) A separate municipality contribution rate shall be
13determined for each calendar year for all participating
14municipalities together with all instrumentalities thereof.
15The municipality contribution rate shall be determined for
16participating instrumentalities as if they were participating
17municipalities. The municipality contribution rate shall be
18the sum of the following percentages:
19        1. The percentage of earnings of all the participating
20    employees of all participating municipalities and
21    participating instrumentalities which, if paid over the
22    entire period of their service, will be sufficient when
23    combined with all employee contributions available for the
24    payment of benefits, to provide all annuities for
25    participating employees, and the $3,000 death benefit
26    payable under Sections 7-158 and 7-164, such percentage to



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1    be known as the normal cost rate.
2        2. The percentage of earnings of the participating
3    employees of each participating municipality and
4    participating instrumentalities necessary to adjust for
5    the difference between the present value of all benefits,
6    excluding temporary and total and permanent disability and
7    death benefits, to be provided for its participating
8    employees and the sum of its accumulated municipality
9    contributions and the accumulated employee contributions
10    and the present value of expected future employee and
11    municipality contributions pursuant to subparagraph 1 of
12    this paragraph (b). This adjustment shall be spread over a
13    period determined by the Board, not to exceed 30 years for
14    participating municipalities or 10 years for participating
15    instrumentalities.
16        3. The percentage of earnings of the participating
17    employees of all municipalities and participating
18    instrumentalities necessary to provide the present value
19    of all temporary and total and permanent disability
20    benefits granted during the most recent year for which
21    information is available.
22        4. The percentage of earnings of the participating
23    employees of all participating municipalities and
24    participating instrumentalities necessary to provide the
25    present value of the net single sum death benefits expected
26    to become payable from the reserve established under



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1    Section 7-206 during the year for which this rate is fixed.
2        5. The percentage of earnings necessary to meet any
3    deficiency arising in the Terminated Municipality Reserve.
4    (c) A separate municipality contribution rate shall be
5computed for each participating municipality or participating
6instrumentality for its sheriff's law enforcement employees.
7    A separate municipality contribution rate shall be
8computed for the sheriff's law enforcement employees of each
9forest preserve district that elects to have such employees.
10For the period from January 1, 1986 to December 31, 1986, such
11rate shall be the forest preserve district's regular rate plus
13    In the event that the Board determines that there is an
14actuarial deficiency in the account of any municipality with
15respect to a person who has elected to participate in the Fund
16under Section 3-109.1 of this Code, the Board may adjust the
17municipality's contribution rate so as to make up that
18deficiency over such reasonable period of time as the Board may
20    (d) The Board may establish a separate municipality
21contribution rate for all employees who are program
22participants employed under the federal Comprehensive
23Employment Training Act by all of the participating
24municipalities and instrumentalities. The Board may also
25provide that, in lieu of a separate municipality rate for these
26employees, a portion of the municipality contributions for such



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1program participants shall be refunded or an extra charge
2assessed so that the amount of municipality contributions
3retained or received by the fund for all CETA program
4participants shall be an amount equal to that which would be
5provided by the separate municipality contribution rate for all
6such program participants. Refunds shall be made to prime
7sponsors of programs upon submission of a claim therefor and
8extra charges shall be assessed to participating
9municipalities and instrumentalities. In establishing the
10municipality contribution rate as provided in paragraph (b) of
11this Section, the use of a separate municipality contribution
12rate for program participants or the refund of a portion of the
13municipality contributions, as the case may be, may be
15    (e) Computations of municipality contribution rates for
16the following calendar year shall be made prior to the
17beginning of each year, from the information available at the
18time the computations are made, and on the assumption that the
19employees in each participating municipality or participating
20instrumentality at such time will continue in service until the
21end of such calendar year at their respective rates of earnings
22at such time.
23    (f) Any municipality which is the recipient of State
24allocations representing that municipality's contributions for
25retirement annuity purposes on behalf of its employees as
26provided in Section 12-21.16 of the Illinois Public Aid Code



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1shall pay the allocations so received to the Board for such
2purpose. Estimates of State allocations to be received during
3any taxable year shall be considered in the determination of
4the municipality's tax rate for that year under Section 7-171.
5If a special tax is levied under Section 7-171, none of the
6proceeds may be used to reimburse the municipality for the
7amount of State allocations received and paid to the Board. Any
8multiple-county or consolidated health department which
9receives contributions from a county under Section 11.2 of "An
10Act in relation to establishment and maintenance of county and
11multiple-county health departments", approved July 9, 1943, as
12amended, or distributions under Section 3 of the Department of
13Public Health Act, shall use these only for municipality
14contributions by the health department.
15    (g) Municipality contributions for the several purposes
16specified shall, for township treasurers and employees in the
17offices of the township treasurers who meet the qualifying
18conditions for coverage hereunder, be allocated among the
19several school districts and parts of school districts serviced
20by such treasurers and employees in the proportion which the
21amount of school funds of each district or part of a district
22handled by the treasurer bears to the total amount of all
23school funds handled by the treasurer.
24    From the funds subject to allocation among districts and
25parts of districts pursuant to the School Code, the trustees
26shall withhold the proportionate share of the liability for



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1municipality contributions imposed upon such districts by this
2Section, in respect to such township treasurers and employees
3and remit the same to the Board.
4    The municipality contribution rate for an educational
5service center shall initially be the same rate for each year
6as the regional office of education or school district which
7serves as its administrative agent. When actuarial data become
8available, a separate rate shall be established as provided in
9subparagraph (i) of this Section.
10    The municipality contribution rate for a public agency,
11other than a vocational education cooperative, formed under the
12Intergovernmental Cooperation Act shall initially be the
13average rate for the municipalities which are parties to the
14intergovernmental agreement. When actuarial data become
15available, a separate rate shall be established as provided in
16subparagraph (i) of this Section.
17    (h) Each participating municipality and participating
18instrumentality shall make the contributions in the amounts
19provided in this Section in the manner prescribed from time to
20time by the Board and all such contributions shall be
21obligations of the respective participating municipalities and
22participating instrumentalities to this fund. The failure to
23deduct any employee contributions shall not relieve the
24participating municipality or participating instrumentality of
25its obligation to this fund. Delinquent payments of
26contributions due under this Section may, with interest, be



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1recovered by civil action against the participating
2municipalities or participating instrumentalities.
3Municipality contributions, other than the amount necessary
4for employee contributions, for periods of service by employees
5from whose earnings no deductions were made for employee
6contributions to the fund, may be charged to the municipality
7reserve for the municipality or participating instrumentality.
8    (i) Contributions by participating instrumentalities shall
9be determined as provided herein except that the percentage
10derived under subparagraph 2 of paragraph (b) of this Section,
11and the amount payable under subparagraph 4 of paragraph (a) of
12this Section, shall be based on an amortization period of 10
14    (j) Notwithstanding the other provisions of this Section,
15the additional unfunded liability accruing as a result of this
16amendatory Act of the 94th General Assembly shall be amortized
17over a period of 30 years beginning on January 1 of the second
18calendar year following the calendar year in which this
19amendatory Act takes effect, except that the employer may
20provide for a longer amortization period by adopting a
21resolution or ordinance specifying a 35-year or 40-year period
22and submitting a certified copy of the ordinance or resolution
23to the fund no later than June 1 of the calendar year following
24the calendar year in which this amendatory Act takes effect.
25    (k) If the amount of a participating employee's reported
26earnings for any of the 12-month periods used to determine the



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1final rate of earnings exceeds the employee's 12 month reported
2earnings with the same employer for the previous year by the
3greater of 6% or 1.5 times the annual increase in the Consumer
4Price Index-U, as established by the United States Department
5of Labor for the preceding September, the participating
6municipality or participating instrumentality that paid those
7earnings shall pay to the Fund, in addition to any other
8contributions required under this Article, the present value of
9the increase in the pension resulting from the portion of the
10increase in salary that is in excess of the greater of 6% or
111.5 times the annual increase in the Consumer Price Index-U, as
12determined by the Fund. This present value shall be computed on
13the basis of the actuarial assumptions and tables used in the
14most recent actuarial valuation of the Fund that is available
15at the time of the computation.
16    Whenever it determines that a payment is or may be required
17under this subsection (k), the fund shall calculate the amount
18of the payment and bill the participating municipality or
19participating instrumentality for that amount. The bill shall
20specify the calculations used to determine the amount due. If
21the participating municipality or participating
22instrumentality disputes the amount of the bill, it may, within
2330 days after receipt of the bill, apply to the fund in writing
24for a recalculation. The application must specify in detail the
25grounds of the dispute. Upon receiving a timely application for
26recalculation, the fund shall review the application and, if



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1appropriate, recalculate the amount due. The participating
2municipality and participating instrumentality contributions
3required under this subsection (k) may be paid in the form of a
4lump sum within 90 days after receipt of the bill. If the
5participating municipality and participating instrumentality
6contributions are not paid within 90 days after receipt of the
7bill, then interest will be charged at a rate equal to the
8fund's annual actuarially assumed rate of return on investment
9compounded annually from the 91st day after receipt of the
10bill. Payments must be concluded within 3 years after receipt
11of the bill by the participating municipality or participating
13    When assessing payment for any amount due under this
14subsection (k), the fund shall exclude earnings increases
15resulting from overload or overtime earnings.
16    When assessing payment for any amount due under this
17subsection (k), the fund shall also exclude earnings increases
18attributable to standard employment promotions resulting in
19increased responsibility and workload.
20    This subsection (k) does not apply to earnings increases
21paid to individuals under contracts or collective bargaining
22agreements entered into, amended, or renewed before January 1,
232012 (the effective date of Public Act 97-609), earnings
24increases paid to members who are 10 years or more from
25retirement eligibility, or earnings increases resulting from
26an increase in the number of hours required to be worked.



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1    When assessing payment for any amount due under this
2subsection (k), the fund shall also exclude earnings
3attributable to personnel policies adopted before January 1,
42012 (the effective date of Public Act 97-609) as long as those
5policies are not applicable to employees who begin service on
6or after January 1, 2012 (the effective date of Public Act
8(Source: P.A. 97-333, eff. 8-12-11; 97-609, eff. 1-1-12;
997-933, eff. 8-10-12; 98-218, eff. 8-9-13.)
10    Section 90. The State Mandates Act is amended by adding
11Section 8.40 as follows:
12    (30 ILCS 805/8.40 new)
13    Sec. 8.40. Exempt mandate. Notwithstanding Sections 6 and 8
14of this Act, no reimbursement by the State is required for the
15implementation of any mandate created by this amendatory Act of
16the 99th General Assembly.
17    Section 99. Effective date. This Act takes effect upon
18becoming law.