Sen. Pamela J. Althoff

Filed: 4/15/2016





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2    AMENDMENT NO. ______. Amend Senate Bill 2896 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Illinois Pension Code is amended by
5changing Sections 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



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1to continue receiving a retirement annuity during that period.
2Upon proper qualification of the participating employee
3payment of such annuity may be resumed on the 1st day of the
4month following such qualification and upon proper application
5therefor. The participating employee in such case shall be
6entitled to a supplemental annuity arising from service and
7credits earned subsequent to such re-entry as a participating
9    Notwithstanding any other provision of this Article, an
10annuitant shall be considered a participating employee if he or
11she returns to work as an employee with a participating
12employer and works more than 599 hours annually (or 999 hours
13annually with a participating employer that has adopted a
14resolution pursuant to subsection (e) of Section 7-137 of this
15Code). Each of these annual periods shall commence on the month
16and day upon which the annuitant is first employed with the
17participating employer following the effective date of the
19    (a-5) If any annuitant under this Article must be
20considered a participating employee per the provisions of
21subsection (a) of this Section, and the participating
22municipality or participating instrumentality that employs or
23re-employs that annuitant fails to notify the Board to suspend
24the annuity, the participating municipality or participating
25instrumentality may be required to reimburse the Fund for an
26amount up to one-half of the total of any annuity payments made



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1to the annuitant after the date the annuity should have been
2suspended, as determined by the Board. In no case shall the
3total amount repaid by the annuitant plus any amount reimbursed
4by the employer to the Fund be more than the total of all
5annuity payments made to the annuitant after the date the
6annuity should have been suspended. This subsection shall not
7apply if the annuitant returned to work for the employer for
8less than 12 months.
9    The Fund shall notify all annuitants that they must notify
10the Fund immediately if they return to work for any
11participating employer. The notification by the Fund shall
12occur upon retirement and no less than annually thereafter in a
13format determined by the Fund. The Fund shall also develop and
14maintain a system to track annuitants who have returned to work
15and notify the participating employer and annuitant at least
16annually of the limitations on returning to work under this
18    (b) Supplemental annuities to persons who return to service
19for less than 48 months shall be computed under the provisions
20of Sections 7-141, 7-142 and 7-143. In determining whether an
21employee is eligible for an annuity which requires a minimum
22period of service, his entire period of service shall be taken
23into consideration but the supplemental annuity shall be based
24on earnings and service in the supplemental period only. The
25effective date of the suspended and supplemental annuity for
26the purpose of increases after retirement shall be considered



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1to be the effective date of the suspended annuity.
2    (c) Supplemental annuities to persons who return to service
3for 48 months or more shall be a monthly amount determined as
5        (1) An amount shall be computed under subparagraph b of
6    paragraph (1) of subsection (a) of Section 7-142,
7    considering all of the service credits of the employee;
8        (2) The actuarial value in monthly payments for life of
9    the annuity payments made before suspension shall be
10    determined and subtracted from the amount determined in (1)
11    above;
12        (3) The monthly amount of the suspended annuity, with
13    any applicable increases after retirement computed from
14    the effective date to the date of reinstatement, shall be
15    subtracted from the amount determined in (2) above and the
16    remainder shall be the amount of the supplemental annuity
17    provided that this amount shall not be less than the amount
18    computed under subsection (b) of this Section.
19        (4) The suspended annuity shall be reinstated at an
20    amount including any increases after retirement from the
21    effective date to date of reinstatement.
22        (5) The effective date of the combined suspended and
23    supplemental annuities for the purposes of increases after
24    retirement shall be considered to be the effective date of
25    the supplemental annuity.
26(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12;



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198-389, eff. 8-16-13.)
2    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
3    Sec. 7-172. Contributions by participating municipalities
4and participating instrumentalities.
5    (a) Each participating municipality and each participating
6instrumentality shall make payment to the fund as follows:
7        1. municipality contributions in an amount determined
8    by applying the municipality contribution rate to each
9    payment of earnings paid to each of its participating
10    employees;
11        2. an amount equal to the employee contributions
12    provided by paragraph (a) of Section 7-173, whether or not
13    the employee contributions are withheld as permitted by
14    that Section;
15        3. all accounts receivable, together with interest
16    charged thereon, as provided in Section 7-209, and any
17    amounts due under subsection (a-5) of Section 7-144;
18        4. if it has no participating employees with current
19    earnings, an amount payable which, over a closed period of
20    20 years for participating municipalities and 10 years for
21    participating instrumentalities, will amortize, at the
22    effective rate for that year, any unfunded obligation. The
23    unfunded obligation shall be computed as provided in
24    paragraph 2 of subsection (b);
25        5. if it has fewer than 7 participating employees or a



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



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1    excluding temporary and total and permanent disability and
2    death benefits, to be provided for its participating
3    employees and the sum of its accumulated municipality
4    contributions and the accumulated employee contributions
5    and the present value of expected future employee and
6    municipality contributions pursuant to subparagraph 1 of
7    this paragraph (b). This adjustment shall be spread over a
8    period determined by the Board, not to exceed 30 years for
9    participating municipalities or 10 years for participating
10    instrumentalities.
11        3. The percentage of earnings of the participating
12    employees of all municipalities and participating
13    instrumentalities necessary to provide the present value
14    of all temporary and total and permanent disability
15    benefits granted during the most recent year for which
16    information is available.
17        4. The percentage of earnings of the participating
18    employees of all participating municipalities and
19    participating instrumentalities necessary to provide the
20    present value of the net single sum death benefits expected
21    to become payable from the reserve established under
22    Section 7-206 during the year for which this rate is fixed.
23        5. The percentage of earnings necessary to meet any
24    deficiency arising in the Terminated Municipality Reserve.
25    (c) A separate municipality contribution rate shall be
26computed for each participating municipality or participating



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1instrumentality for its sheriff's law enforcement employees.
2    A separate municipality contribution rate shall be
3computed for the sheriff's law enforcement employees of each
4forest preserve district that elects to have such employees.
5For the period from January 1, 1986 to December 31, 1986, such
6rate shall be the forest preserve district's regular rate plus
8    In the event that the Board determines that there is an
9actuarial deficiency in the account of any municipality with
10respect to a person who has elected to participate in the Fund
11under Section 3-109.1 of this Code, the Board may adjust the
12municipality's contribution rate so as to make up that
13deficiency over such reasonable period of time as the Board may
15    (d) The Board may establish a separate municipality
16contribution rate for all employees who are program
17participants employed under the federal Comprehensive
18Employment Training Act by all of the participating
19municipalities and instrumentalities. The Board may also
20provide that, in lieu of a separate municipality rate for these
21employees, a portion of the municipality contributions for such
22program participants shall be refunded or an extra charge
23assessed so that the amount of municipality contributions
24retained or received by the fund for all CETA program
25participants shall be an amount equal to that which would be
26provided by the separate municipality contribution rate for all



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1such program participants. Refunds shall be made to prime
2sponsors of programs upon submission of a claim therefor and
3extra charges shall be assessed to participating
4municipalities and instrumentalities. In establishing the
5municipality contribution rate as provided in paragraph (b) of
6this Section, the use of a separate municipality contribution
7rate for program participants or the refund of a portion of the
8municipality contributions, as the case may be, may be
10    (e) Computations of municipality contribution rates for
11the following calendar year shall be made prior to the
12beginning of each year, from the information available at the
13time the computations are made, and on the assumption that the
14employees in each participating municipality or participating
15instrumentality at such time will continue in service until the
16end of such calendar year at their respective rates of earnings
17at such time.
18    (f) Any municipality which is the recipient of State
19allocations representing that municipality's contributions for
20retirement annuity purposes on behalf of its employees as
21provided in Section 12-21.16 of the Illinois Public Aid Code
22shall pay the allocations so received to the Board for such
23purpose. Estimates of State allocations to be received during
24any taxable year shall be considered in the determination of
25the municipality's tax rate for that year under Section 7-171.
26If a special tax is levied under Section 7-171, none of the



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1proceeds may be used to reimburse the municipality for the
2amount of State allocations received and paid to the Board. Any
3multiple-county or consolidated health department which
4receives contributions from a county under Section 11.2 of "An
5Act in relation to establishment and maintenance of county and
6multiple-county health departments", approved July 9, 1943, as
7amended, or distributions under Section 3 of the Department of
8Public Health Act, shall use these only for municipality
9contributions by the health department.
10    (g) Municipality contributions for the several purposes
11specified shall, for township treasurers and employees in the
12offices of the township treasurers who meet the qualifying
13conditions for coverage hereunder, be allocated among the
14several school districts and parts of school districts serviced
15by such treasurers and employees in the proportion which the
16amount of school funds of each district or part of a district
17handled by the treasurer bears to the total amount of all
18school funds handled by the treasurer.
19    From the funds subject to allocation among districts and
20parts of districts pursuant to the School Code, the trustees
21shall withhold the proportionate share of the liability for
22municipality contributions imposed upon such districts by this
23Section, in respect to such township treasurers and employees
24and remit the same to the Board.
25    The municipality contribution rate for an educational
26service center shall initially be the same rate for each year



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1as the regional office of education or school district which
2serves as its administrative agent. When actuarial data become
3available, a separate rate shall be established as provided in
4subparagraph (i) of this Section.
5    The municipality contribution rate for a public agency,
6other than a vocational education cooperative, formed under the
7Intergovernmental Cooperation Act shall initially be the
8average rate for the municipalities which are parties to the
9intergovernmental agreement. When actuarial data become
10available, a separate rate shall be established as provided in
11subparagraph (i) of this Section.
12    (h) Each participating municipality and participating
13instrumentality shall make the contributions in the amounts
14provided in this Section in the manner prescribed from time to
15time by the Board and all such contributions shall be
16obligations of the respective participating municipalities and
17participating instrumentalities to this fund. The failure to
18deduct any employee contributions shall not relieve the
19participating municipality or participating instrumentality of
20its obligation to this fund. Delinquent payments of
21contributions due under this Section may, with interest, be
22recovered by civil action against the participating
23municipalities or participating instrumentalities.
24Municipality contributions, other than the amount necessary
25for employee contributions, for periods of service by employees
26from whose earnings no deductions were made for employee



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1contributions to the fund, may be charged to the municipality
2reserve for the municipality or participating instrumentality.
3    (i) Contributions by participating instrumentalities shall
4be determined as provided herein except that the percentage
5derived under subparagraph 2 of paragraph (b) of this Section,
6and the amount payable under subparagraph 4 of paragraph (a) of
7this Section, shall be based on an amortization period of 10
9    (j) Notwithstanding the other provisions of this Section,
10the additional unfunded liability accruing as a result of this
11amendatory Act of the 94th General Assembly shall be amortized
12over a period of 30 years beginning on January 1 of the second
13calendar year following the calendar year in which this
14amendatory Act takes effect, except that the employer may
15provide for a longer amortization period by adopting a
16resolution or ordinance specifying a 35-year or 40-year period
17and submitting a certified copy of the ordinance or resolution
18to the fund no later than June 1 of the calendar year following
19the calendar year in which this amendatory Act takes effect.
20    (k) If the amount of a participating employee's reported
21earnings for any of the 12-month periods used to determine the
22final rate of earnings exceeds the employee's 12 month reported
23earnings with the same employer for the previous year by the
24greater of 6% or 1.5 times the annual increase in the Consumer
25Price Index-U, as established by the United States Department
26of Labor for the preceding September, the participating



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1municipality or participating instrumentality that paid those
2earnings shall pay to the Fund, in addition to any other
3contributions required under this Article, the present value of
4the increase in the pension resulting from the portion of the
5increase in salary that is in excess of the greater of 6% or
61.5 times the annual increase in the Consumer Price Index-U, as
7determined by the Fund. This present value shall be computed on
8the basis of the actuarial assumptions and tables used in the
9most recent actuarial valuation of the Fund that is available
10at the time of the computation.
11    Whenever it determines that a payment is or may be required
12under this subsection (k), the fund shall calculate the amount
13of the payment and bill the participating municipality or
14participating instrumentality for that amount. The bill shall
15specify the calculations used to determine the amount due. If
16the participating municipality or participating
17instrumentality disputes the amount of the bill, it may, within
1830 days after receipt of the bill, apply to the fund in writing
19for a recalculation. The application must specify in detail the
20grounds of the dispute. Upon receiving a timely application for
21recalculation, the fund shall review the application and, if
22appropriate, recalculate the amount due. The participating
23municipality and participating instrumentality contributions
24required under this subsection (k) may be paid in the form of a
25lump sum within 90 days after receipt of the bill. If the
26participating municipality and participating instrumentality



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1contributions are not paid within 90 days after receipt of the
2bill, then interest will be charged at a rate equal to the
3fund's annual actuarially assumed rate of return on investment
4compounded annually from the 91st day after receipt of the
5bill. Payments must be concluded within 3 years after receipt
6of the bill by the participating municipality or participating
8    When assessing payment for any amount due under this
9subsection (k), the fund shall exclude earnings increases
10resulting from overload or overtime earnings.
11    When assessing payment for any amount due under this
12subsection (k), the fund shall also exclude earnings increases
13attributable to standard employment promotions resulting in
14increased responsibility and workload.
15    This subsection (k) does not apply to earnings increases
16paid to individuals under contracts or collective bargaining
17agreements entered into, amended, or renewed before January 1,
182012 (the effective date of Public Act 97-609), earnings
19increases paid to members who are 10 years or more from
20retirement eligibility, or earnings increases resulting from
21an increase in the number of hours required to be worked.
22    When assessing payment for any amount due under this
23subsection (k), the fund shall also exclude earnings
24attributable to personnel policies adopted before January 1,
252012 (the effective date of Public Act 97-609) as long as those
26policies are not applicable to employees who begin service on



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1or after January 1, 2012 (the effective date of Public Act
3(Source: P.A. 97-333, eff. 8-12-11; 97-609, eff. 1-1-12;
497-933, eff. 8-10-12; 98-218, eff. 8-9-13.)
5    Section 90. The State Mandates Act is amended by adding
6Section 8.40 as follows:
7    (30 ILCS 805/8.40 new)
8    Sec. 8.40. Exempt mandate. Notwithstanding Sections 6 and 8
9of this Act, no reimbursement by the State is required for the
10implementation of any mandate created by this amendatory Act of
11the 99th General Assembly.
12    Section 99. Effective date. This Act takes effect upon
13becoming law.".