HB3938 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3938

 

Introduced 2/22/2021, by Rep. Tony McCombie

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/1-160
40 ILCS 5/14-152.1

    Amends the General Provisions and State Employees Articles of the Illinois Pension Code. Provides that a Tier 2 participant who is employed as an investigator for the Secretary of State on the effective date of the amendatory Act, has accrued not less than 10 years of credit for such service, and has attained age 60 shall be entitled to an annuity calculated under the alternative retirement annuity provisions of the State Employees Article, in lieu of a regular or minimum retirement annuity, notwithstanding that he or she has accrued less than 20 years of eligible creditable service. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming changes. Effective immediately.


LRB102 13789 RPS 19139 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3938LRB102 13789 RPS 19139 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
5changing Sections 1-160 and 14-152.1 as follows:
 
6    (40 ILCS 5/1-160)
7    Sec. 1-160. Provisions applicable to new hires.
8    (a) The provisions of this Section apply to a person who,
9on or after January 1, 2011, first becomes a member or a
10participant under any reciprocal retirement system or pension
11fund established under this Code, other than a retirement
12system or pension fund established under Article 2, 3, 4, 5, 6,
1315 or 18 of this Code, notwithstanding any other provision of
14this Code to the contrary, but do not apply to any self-managed
15plan established under this Code, to any person with respect
16to service as a sheriff's law enforcement employee under
17Article 7, or to any participant of the retirement plan
18established under Section 22-101. Notwithstanding anything to
19the contrary in this Section, for purposes of this Section, a
20person who participated in a retirement system under Article
2115 prior to January 1, 2011 shall be deemed a person who first
22became a member or participant prior to January 1, 2011 under
23any retirement system or pension fund subject to this Section.

 

 

HB3938- 2 -LRB102 13789 RPS 19139 b

1The changes made to this Section by Public Act 98-596 are a
2clarification of existing law and are intended to be
3retroactive to January 1, 2011 (the effective date of Public
4Act 96-889), notwithstanding the provisions of Section 1-103.1
5of this Code.
6    This Section does not apply to a person who first becomes a
7noncovered employee under Article 14 on or after the
8implementation date of the plan created under Section 1-161
9for that Article, unless that person elects under subsection
10(b) of Section 1-161 to instead receive the benefits provided
11under this Section and the applicable provisions of that
12Article.
13    This Section does not apply to a person who first becomes a
14member or participant under Article 16 on or after the
15implementation date of the plan created under Section 1-161
16for that Article, unless that person elects under subsection
17(b) of Section 1-161 to instead receive the benefits provided
18under this Section and the applicable provisions of that
19Article.
20    This Section does not apply to a person who elects under
21subsection (c-5) of Section 1-161 to receive the benefits
22under Section 1-161.
23    This Section does not apply to a person who first becomes a
24member or participant of an affected pension fund on or after 6
25months after the resolution or ordinance date, as defined in
26Section 1-162, unless that person elects under subsection (c)

 

 

HB3938- 3 -LRB102 13789 RPS 19139 b

1of Section 1-162 to receive the benefits provided under this
2Section and the applicable provisions of the Article under
3which he or she is a member or participant.
4    (b) "Final average salary" means the average monthly (or
5annual) salary obtained by dividing the total salary or
6earnings calculated under the Article applicable to the member
7or participant during the 96 consecutive months (or 8
8consecutive years) of service within the last 120 months (or
910 years) of service in which the total salary or earnings
10calculated under the applicable Article was the highest by the
11number of months (or years) of service in that period. For the
12purposes of a person who first becomes a member or participant
13of any retirement system or pension fund to which this Section
14applies on or after January 1, 2011, in this Code, "final
15average salary" shall be substituted for the following:
16        (1) In Article 7 (except for service as sheriff's law
17    enforcement employees), "final rate of earnings".
18        (2) In Articles 8, 9, 10, 11, and 12, "highest average
19    annual salary for any 4 consecutive years within the last
20    10 years of service immediately preceding the date of
21    withdrawal".
22        (3) In Article 13, "average final salary".
23        (4) In Article 14, "final average compensation".
24        (5) In Article 17, "average salary".
25        (6) In Section 22-207, "wages or salary received by
26    him at the date of retirement or discharge".

 

 

HB3938- 4 -LRB102 13789 RPS 19139 b

1    (b-5) Beginning on January 1, 2011, for all purposes under
2this Code (including without limitation the calculation of
3benefits and employee contributions), the annual earnings,
4salary, or wages (based on the plan year) of a member or
5participant to whom this Section applies shall not exceed
6$106,800; however, that amount shall annually thereafter be
7increased by the lesser of (i) 3% of that amount, including all
8previous adjustments, or (ii) one-half the annual unadjusted
9percentage increase (but not less than zero) in the consumer
10price index-u for the 12 months ending with the September
11preceding each November 1, including all previous adjustments.
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
15average change in prices of goods and services purchased by
16all urban consumers, United States city average, all items,
171982-84 = 100. The new amount resulting from each annual
18adjustment shall be determined by the Public Pension Division
19of the Department of Insurance and made available to the
20boards of the retirement systems and pension funds by November
211 of each year.
22    (c) A member or participant is entitled to a retirement
23annuity upon written application if he or she has attained age
2467 (beginning January 1, 2015, age 65 with respect to service
25under Article 12 of this Code that is subject to this Section)
26and has at least 10 years of service credit and is otherwise

 

 

HB3938- 5 -LRB102 13789 RPS 19139 b

1eligible under the requirements of the applicable Article.
2    A member or participant who has attained age 62 (beginning
3January 1, 2015, age 60 with respect to service under Article
412 of this Code that is subject to this Section) and has at
5least 10 years of service credit and is otherwise eligible
6under the requirements of the applicable Article may elect to
7receive the lower retirement annuity provided in subsection
8(d) of this Section.
9    (c-5) A person who first becomes a member or a participant
10subject to this Section on or after July 6, 2017 (the effective
11date of Public Act 100-23), notwithstanding any other
12provision of this Code to the contrary, is entitled to a
13retirement annuity under Article 8 or Article 11 upon written
14application if he or she has attained age 65 and has at least
1510 years of service credit and is otherwise eligible under the
16requirements of Article 8 or Article 11 of this Code,
17whichever is applicable.
18    (d) The retirement annuity of a member or participant who
19is retiring after attaining age 62 (beginning January 1, 2015,
20age 60 with respect to service under Article 12 of this Code
21that is subject to this Section) with at least 10 years of
22service credit shall be reduced by one-half of 1% for each full
23month that the member's age is under age 67 (beginning January
241, 2015, age 65 with respect to service under Article 12 of
25this Code that is subject to this Section).
26    (d-5) The retirement annuity payable under Article 8 or

 

 

HB3938- 6 -LRB102 13789 RPS 19139 b

1Article 11 to an eligible person subject to subsection (c-5)
2of this Section who is retiring at age 60 with at least 10
3years of service credit shall be reduced by one-half of 1% for
4each full month that the member's age is under age 65.
5    (d-10) Each person who first became a member or
6participant under Article 8 or Article 11 of this Code on or
7after January 1, 2011 and prior to the effective date of this
8amendatory Act of the 100th General Assembly shall make an
9irrevocable election either:
10        (i) to be eligible for the reduced retirement age
11    provided in subsections (c-5) and (d-5) of this Section,
12    the eligibility for which is conditioned upon the member
13    or participant agreeing to the increases in employee
14    contributions for age and service annuities provided in
15    subsection (a-5) of Section 8-174 of this Code (for
16    service under Article 8) or subsection (a-5) of Section
17    11-170 of this Code (for service under Article 11); or
18        (ii) to not agree to item (i) of this subsection
19    (d-10), in which case the member or participant shall
20    continue to be subject to the retirement age provisions in
21    subsections (c) and (d) of this Section and the employee
22    contributions for age and service annuity as provided in
23    subsection (a) of Section 8-174 of this Code (for service
24    under Article 8) or subsection (a) of Section 11-170 of
25    this Code (for service under Article 11).
26    The election provided for in this subsection shall be made

 

 

HB3938- 7 -LRB102 13789 RPS 19139 b

1between October 1, 2017 and November 15, 2017. A person
2subject to this subsection who makes the required election
3shall remain bound by that election. A person subject to this
4subsection who fails for any reason to make the required
5election within the time specified in this subsection shall be
6deemed to have made the election under item (ii).
7    (e) Any retirement annuity or supplemental annuity shall
8be subject to annual increases on the January 1 occurring
9either on or after the attainment of age 67 (beginning January
101, 2015, age 65 with respect to service under Article 12 of
11this Code that is subject to this Section and beginning on the
12effective date of this amendatory Act of the 100th General
13Assembly, age 65 with respect to service under Article 8 or
14Article 11 for eligible persons who: (i) are subject to
15subsection (c-5) of this Section; or (ii) made the election
16under item (i) of subsection (d-10) of this Section) or the
17first anniversary of the annuity start date, whichever is
18later. Each annual increase shall be calculated at 3% or
19one-half the annual unadjusted percentage increase (but not
20less than zero) in the consumer price index-u for the 12 months
21ending with the September preceding each November 1, whichever
22is less, of the originally granted retirement annuity. If the
23annual unadjusted percentage change in the consumer price
24index-u for the 12 months ending with the September preceding
25each November 1 is zero or there is a decrease, then the
26annuity shall not be increased.

 

 

HB3938- 8 -LRB102 13789 RPS 19139 b

1    For the purposes of Section 1-103.1 of this Code, the
2changes made to this Section by this amendatory Act of the
3100th General Assembly are applicable without regard to
4whether the employee was in active service on or after the
5effective date of this amendatory Act of the 100th General
6Assembly.
7    (f) The initial survivor's or widow's annuity of an
8otherwise eligible survivor or widow of a retired member or
9participant who first became a member or participant on or
10after January 1, 2011 shall be in the amount of 66 2/3% of the
11retired member's or participant's retirement annuity at the
12date of death. In the case of the death of a member or
13participant who has not retired and who first became a member
14or participant on or after January 1, 2011, eligibility for a
15survivor's or widow's annuity shall be determined by the
16applicable Article of this Code. The initial benefit shall be
1766 2/3% of the earned annuity without a reduction due to age. A
18child's annuity of an otherwise eligible child shall be in the
19amount prescribed under each Article if applicable. Any
20survivor's or widow's annuity shall be increased (1) on each
21January 1 occurring on or after the commencement of the
22annuity if the deceased member died while receiving a
23retirement annuity or (2) in other cases, on each January 1
24occurring after the first anniversary of the commencement of
25the annuity. Each annual increase shall be calculated at 3% or
26one-half the annual unadjusted percentage increase (but not

 

 

HB3938- 9 -LRB102 13789 RPS 19139 b

1less than zero) in the consumer price index-u for the 12 months
2ending with the September preceding each November 1, whichever
3is less, of the originally granted survivor's annuity. If the
4annual unadjusted percentage change in the consumer price
5index-u for the 12 months ending with the September preceding
6each November 1 is zero or there is a decrease, then the
7annuity shall not be increased.
8    (g) The benefits in Section 14-110 apply only if the
9person is a State policeman, a fire fighter in the fire
10protection service of a department, a conservation police
11officer, an investigator for the Secretary of State, an arson
12investigator, a Commerce Commission police officer,
13investigator for the Department of Revenue or the Illinois
14Gaming Board, a security employee of the Department of
15Corrections or the Department of Juvenile Justice, or a
16security employee of the Department of Innovation and
17Technology, as those terms are defined in subsection (b) and
18subsection (c) of Section 14-110. Except as otherwise provided
19in subsection (g-5) of this Section, a A person who meets the
20requirements of this Section is entitled to an annuity
21calculated under the provisions of Section 14-110, in lieu of
22the regular or minimum retirement annuity, only if the person
23has withdrawn from service with not less than 20 years of
24eligible creditable service and has attained age 60,
25regardless of whether the attainment of age 60 occurs while
26the person is still in service.

 

 

HB3938- 10 -LRB102 13789 RPS 19139 b

1    (g-5) A person who (i) is subject to this Section, (ii) is
2employed as an investigator for the Secretary of State on the
3effective date of this amendatory Act of the 102nd General
4Assembly, (iii) has accrued not less than 10 years of credit
5for such service, and (iv) has attained age 60 shall be
6entitled to an annuity calculated under the provisions of
7Section 14-110, in lieu of a regular or minimum retirement
8annuity, notwithstanding that he or she has accrued less than
920 years of eligible creditable service.
10    (h) If a person who first becomes a member or a participant
11of a retirement system or pension fund subject to this Section
12on or after January 1, 2011 is receiving a retirement annuity
13or retirement pension under that system or fund and becomes a
14member or participant under any other system or fund created
15by this Code and is employed on a full-time basis, except for
16those members or participants exempted from the provisions of
17this Section under subsection (a) of this Section, then the
18person's retirement annuity or retirement pension under that
19system or fund shall be suspended during that employment. Upon
20termination of that employment, the person's retirement
21annuity or retirement pension payments shall resume and be
22recalculated if recalculation is provided for under the
23applicable Article of this Code.
24    If a person who first becomes a member of a retirement
25system or pension fund subject to this Section on or after
26January 1, 2012 and is receiving a retirement annuity or

 

 

HB3938- 11 -LRB102 13789 RPS 19139 b

1retirement pension under that system or fund and accepts on a
2contractual basis a position to provide services to a
3governmental entity from which he or she has retired, then
4that person's annuity or retirement pension earned as an
5active employee of the employer shall be suspended during that
6contractual service. A person receiving an annuity or
7retirement pension under this Code shall notify the pension
8fund or retirement system from which he or she is receiving an
9annuity or retirement pension, as well as his or her
10contractual employer, of his or her retirement status before
11accepting contractual employment. A person who fails to submit
12such notification shall be guilty of a Class A misdemeanor and
13required to pay a fine of $1,000. Upon termination of that
14contractual employment, the person's retirement annuity or
15retirement pension payments shall resume and, if appropriate,
16be recalculated under the applicable provisions of this Code.
17    (i) (Blank).
18    (j) In the case of a conflict between the provisions of
19this Section and any other provision of this Code, the
20provisions of this Section shall control.
21(Source: P.A. 100-23, eff. 7-6-17; 100-201, eff. 8-18-17;
22100-563, eff. 12-8-17; 100-611, eff. 7-20-18; 100-1166, eff.
231-4-19; 101-610, eff. 1-1-20.)
 
24    (40 ILCS 5/14-152.1)
25    Sec. 14-152.1. Application and expiration of new benefit

 

 

HB3938- 12 -LRB102 13789 RPS 19139 b

1increases.
2    (a) As used in this Section, "new benefit increase" means
3an increase in the amount of any benefit provided under this
4Article, or an expansion of the conditions of eligibility for
5any benefit under this Article, that results from an amendment
6to this Code that takes effect after June 1, 2005 (the
7effective date of Public Act 94-4). "New benefit increase",
8however, does not include any benefit increase resulting from
9the changes made to Article 1 or this Article by Public Act
1096-37, Public Act 100-23, Public Act 100-587, Public Act
11100-611, Public Act 101-10, Public Act 101-610, or this
12amendatory Act of the 102nd General Assembly or this
13amendatory Act of the 101st General Assembly.
14    (b) Notwithstanding any other provision of this Code or
15any subsequent amendment to this Code, every new benefit
16increase is subject to this Section and shall be deemed to be
17granted only in conformance with and contingent upon
18compliance with the provisions of this Section.
19    (c) The Public Act enacting a new benefit increase must
20identify and provide for payment to the System of additional
21funding at least sufficient to fund the resulting annual
22increase in cost to the System as it accrues.
23    Every new benefit increase is contingent upon the General
24Assembly providing the additional funding required under this
25subsection. The Commission on Government Forecasting and
26Accountability shall analyze whether adequate additional

 

 

HB3938- 13 -LRB102 13789 RPS 19139 b

1funding has been provided for the new benefit increase and
2shall report its analysis to the Public Pension Division of
3the Department of Insurance. A new benefit increase created by
4a Public Act that does not include the additional funding
5required under this subsection is null and void. If the Public
6Pension Division determines that the additional funding
7provided for a new benefit increase under this subsection is
8or has become inadequate, it may so certify to the Governor and
9the State Comptroller and, in the absence of corrective action
10by the General Assembly, the new benefit increase shall expire
11at the end of the fiscal year in which the certification is
12made.
13    (d) Every new benefit increase shall expire 5 years after
14its effective date or on such earlier date as may be specified
15in the language enacting the new benefit increase or provided
16under subsection (c). This does not prevent the General
17Assembly from extending or re-creating a new benefit increase
18by law.
19    (e) Except as otherwise provided in the language creating
20the new benefit increase, a new benefit increase that expires
21under this Section continues to apply to persons who applied
22and qualified for the affected benefit while the new benefit
23increase was in effect and to the affected beneficiaries and
24alternate payees of such persons, but does not apply to any
25other person, including, without limitation, a person who
26continues in service after the expiration date and did not

 

 

HB3938- 14 -LRB102 13789 RPS 19139 b

1apply and qualify for the affected benefit while the new
2benefit increase was in effect.
3(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
4100-611, eff. 7-20-18; 101-10, eff. 6-5-19; 101-81, eff.
57-12-19; 101-610, eff. 1-1-20.)
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.