Full Text of HB1456 099th General Assembly
HB1456 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 HB1456 Introduced 2/6/2015, by Rep. Elaine Nekritz SYNOPSIS AS INTRODUCED: |
| 40 ILCS 5/15-112 | from Ch. 108 1/2, par. 15-112 | 40 ILCS 5/15-126.2 new | | 40 ILCS 5/15-154 | from Ch. 108 1/2, par. 15-154 | 40 ILCS 5/15-157 | from Ch. 108 1/2, par. 15-157 |
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Amends the State Universities Article of the Illinois Pension Code. Adds a cross-reference to a provision relating to earnings for service before becoming a participant. Defines "plan year". In a provision concerning repayment of certain refunds, requires interest from the
date the refund was issued rather than the date it was received. Clarifies a provision relating to the purchase of service credit by inactive participants.
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| | | PENSION IMPACT NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning public employee benefits.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Pension Code is amended by changing | 5 | | Sections 15-112, 15-154, and 15-157 and adding Section 15-126.2 | 6 | | as follows:
| 7 | | (40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
| 8 | | Sec. 15-112. Final rate of earnings. "Final rate of | 9 | | earnings": | 10 | | (a) This subsection (a) applies only to a Tier 1 member. | 11 | | For an employee who is paid on an hourly basis or who | 12 | | receives an annual salary
in installments during 12 months of | 13 | | each academic year, the average annual
earnings during the 48 | 14 | | consecutive calendar month period ending with the last
day of | 15 | | final termination of employment or the 4 consecutive academic | 16 | | years of
service in which the employee's earnings were the | 17 | | highest, whichever is
greater.
For any other employee, the | 18 | | average annual earnings during the 4 consecutive
academic years | 19 | | of service in which his or her earnings were the highest.
For | 20 | | an employee with less than 48 months or 4 consecutive academic | 21 | | years of
service, the average earnings during his or her entire | 22 | | period of service.
The earnings of an employee with more than | 23 | | 36 months of service under item (a) of Section 15-113.1 prior |
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| 1 | | to the
date of becoming a participant are, for such period, | 2 | | considered equal to the
average earnings during the last 36 | 3 | | months of such service. | 4 | | (b) This subsection (b) applies to a Tier 2 member. | 5 | | For an employee who is paid on an hourly basis or who | 6 | | receives an annual salary in installments during 12 months of | 7 | | each academic year, the average annual earnings obtained by | 8 | | dividing by 8 the total earnings of the employee during the 96 | 9 | | consecutive months in which the total earnings were the highest | 10 | | within the last 120 months prior to termination. | 11 | | For any other employee, the average annual earnings during | 12 | | the 8 consecutive academic years within the 10 years prior to | 13 | | termination in which the employee's earnings were the highest. | 14 | | For an employee with less than 96 consecutive months or 8 | 15 | | consecutive academic years of service, whichever is necessary, | 16 | | the average earnings during his or her entire period of | 17 | | service. | 18 | | (c) For an
employee on leave of absence with pay, or on | 19 | | leave of absence without pay
who makes contributions during | 20 | | such leave, earnings are assumed to be equal
to the basic | 21 | | compensation on the date the leave began. | 22 | | (d) For an employee on
disability leave, earnings are | 23 | | assumed to be equal to the basic compensation
on the date | 24 | | disability occurs or the average earnings during the 24 months
| 25 | | immediately preceding the month in which disability occurs, | 26 | | whichever is
greater.
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| 1 | | (e) For a Tier 1 member who retires on or after the | 2 | | effective date of this
amendatory Act of 1997 with at least 20 | 3 | | years of service as a firefighter or
police officer under this | 4 | | Article, the final rate of earnings shall be the
annual rate of | 5 | | earnings received by the participant on his or her last day as | 6 | | a
firefighter or police officer under this Article, if that is | 7 | | greater than the
final rate of earnings as calculated under the | 8 | | other provisions of this
Section.
| 9 | | (f) If a Tier 1 member is an employee for at least
6 months | 10 | | during the academic year in which his or her employment
is | 11 | | terminated, the annual final rate of earnings shall be 25% of | 12 | | the sum
of (1) the annual basic compensation for that year, and | 13 | | (2) the amount
earned during the 36 months immediately | 14 | | preceding that year, if this is
greater than the final rate of | 15 | | earnings as calculated under the other
provisions of this | 16 | | Section.
| 17 | | (g) In the determination of the final rate of earnings for | 18 | | an employee, that
part of an employee's earnings for any | 19 | | academic year beginning after June 30,
1997, which exceeds the | 20 | | employee's earnings with that employer for the
preceding year | 21 | | by more than 20 percent shall be excluded; in the event
that an | 22 | | employee has more than one employer
this limitation shall be | 23 | | calculated separately for the earnings with
each employer. In | 24 | | making such calculation, only the basic compensation of
| 25 | | employees shall be considered, without regard to vacation or | 26 | | overtime or to
contracts for summer employment.
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| 1 | | (h) The following are not considered as earnings in | 2 | | determining final rate of
earnings: (1) severance or separation | 3 | | pay, (2) retirement pay, (3)
payment for unused sick leave, and | 4 | | (4) payments from an employer for
the period used in | 5 | | determining final rate of earnings for any purpose other
than | 6 | | (i) services rendered, (ii) leave of absence or vacation | 7 | | granted
during that period, and (iii) vacation of up to 56 work | 8 | | days allowed upon
termination of employment; except that, if | 9 | | the benefit has been collectively
bargained between the | 10 | | employer and the recognized collective bargaining agent
| 11 | | pursuant to the Illinois Educational Labor Relations Act, | 12 | | payment received
during a period of up to 2 academic years for | 13 | | unused sick leave may be
considered as earnings in accordance | 14 | | with the applicable collective bargaining
agreement, subject | 15 | | to the 20% increase limitation of this Section, and if the
| 16 | | person first becomes a participant on or after the effective | 17 | | date of this amendatory Act of the 98th General Assembly,
| 18 | | payments for unused sick or vacation time shall not be
| 19 | | considered as earnings. Any unused
sick leave considered as | 20 | | earnings under this Section shall not be taken into
account in | 21 | | calculating service credit under Section 15-113.4.
| 22 | | (i) Intermittent periods of service shall be considered as | 23 | | consecutive in
determining final rate of earnings.
| 24 | | (Source: P.A. 98-92, eff. 7-16-13; 98-599, eff. 6-1-14 .)
| 25 | | (40 ILCS 5/15-126.2 new) |
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| 1 | | Sec. 15-126.2. Plan year. "Plan year": The 12-month period | 2 | | beginning on July 1 in any year, and ending on June 30 of the | 3 | | succeeding year.
| 4 | | (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
| 5 | | Sec. 15-154. Refunds.
| 6 | | (a) A participant whose status as an employee is | 7 | | terminated, regardless of
cause, or who has been on lay off | 8 | | status for more than 120 days, and who is not
on leave of | 9 | | absence, is entitled to a refund of contributions upon | 10 | | application;
except that not more than one such refund | 11 | | application may be made during any
academic year.
| 12 | | Except as set forth in subsections (a-1) and (a-2), the | 13 | | refund shall
be the sum of the accumulated normal, additional, | 14 | | and survivors insurance
contributions, plus the entire | 15 | | contribution made by the participant under
Section 15-113.3, | 16 | | less the amount of interest credited on these contributions
| 17 | | each year in excess of 4 1/2% of the amount on which interest | 18 | | was calculated.
| 19 | | (a-1) A person who elects, in accordance with the | 20 | | requirements of Section
15-134.5, to participate in the | 21 | | portable benefit package and who becomes a
participating | 22 | | employee under that retirement program upon the conclusion of
| 23 | | the one-year waiting period applicable to the portable benefit | 24 | | package election
shall have his or her refund calculated in | 25 | | accordance with the provisions of
subsection (a-2).
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| 1 | | (a-2) The refund payable to a participant described in | 2 | | subsection (a-1)
shall be the sum of the participant's | 3 | | accumulated normal and additional
contributions, as defined in | 4 | | Sections 15-116 and 15-117, plus the entire
contribution made | 5 | | by the participant under Section 15-113.3. If the
participant | 6 | | terminates with 5 or more years of service for employment as
| 7 | | defined in Section 15-113.1, he or she shall also be entitled | 8 | | to a distribution
of employer contributions in an amount equal | 9 | | to the sum of the accumulated
normal and additional | 10 | | contributions, as defined in Sections 15-116 and 15-117.
| 11 | | (b) Upon acceptance of a refund, the participant forfeits | 12 | | all
accrued rights and credits in the System, and if | 13 | | subsequently reemployed, the
participant shall be considered a | 14 | | new employee subject to all the qualifying
conditions for | 15 | | participation and eligibility for benefits applicable to new
| 16 | | employees. If such person again becomes a participating | 17 | | employee and continues
as such for 2 years, or is employed by | 18 | | an employer and participates for at
least 2 years in the | 19 | | Federal Civil Service Retirement System, all such rights,
| 20 | | credits, and previous status as a participant shall be restored | 21 | | upon repayment
of the amount of the refund, together with | 22 | | compound interest thereon from the
date the refund was issued | 23 | | received to the date of repayment at the rate of 6% per
annum | 24 | | through August 31, 1982, and at the effective rates after that | 25 | | date.
When a participant in the portable benefit package who | 26 | | received a refund
which included a distribution of employer |
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| 1 | | contributions repays a refund
pursuant to this Section, | 2 | | one-half of the amount repaid shall be deemed the
member's | 3 | | reinstated accumulated normal and additional contributions and | 4 | | the
other half shall be allocated as an employer contribution | 5 | | to the System,
except that any amount repaid for previously | 6 | | purchased military service
credit under Section 15-113.3 shall | 7 | | be accounted for as such.
| 8 | | (c) If a participant covered under the traditional
benefit | 9 | | package has made survivors insurance contributions, but has no
| 10 | | survivors insurance beneficiary upon retirement, he or she | 11 | | shall be entitled
to elect a refund of the accumulated | 12 | | survivors insurance contributions, or to
elect an additional | 13 | | annuity the value of which is equal to the accumulated
| 14 | | survivors insurance contributions. This election must be made | 15 | | prior to the
date the person's retirement annuity is approved | 16 | | by the System.
| 17 | | (d) A participant, upon application, is entitled to a | 18 | | refund of his
or her accumulated additional contributions | 19 | | attributable to the additional
contributions described in the | 20 | | last sentence of subsection (c) of Section
15-157. Upon the | 21 | | acceptance of such a refund of accumulated additional
| 22 | | contributions, the participant forfeits all rights and credits | 23 | | which may
have accrued because of such contributions.
| 24 | | (e) A participant who terminates his or her employee status | 25 | | and elects to
waive service credit under Section 15-154.2, is | 26 | | entitled to a refund of the
accumulated normal, additional and |
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| 1 | | survivors insurance contributions, if any,
which were credited | 2 | | the participant for this service, or to an additional
annuity | 3 | | the value of which is equal to the accumulated normal, | 4 | | additional and
survivors insurance contributions, if any; | 5 | | except that not more than one such
refund application may be | 6 | | made during any academic year. Upon acceptance of
this refund, | 7 | | the participant forfeits all rights and credits accrued because
| 8 | | of this service.
| 9 | | (f) If a police officer or firefighter receives a | 10 | | retirement annuity
under Rule 1 or 3 of Section 15-136, he or | 11 | | she shall be entitled at
retirement to a refund of the | 12 | | difference between his or her accumulated
normal contributions | 13 | | and the normal contributions which would have
accumulated had | 14 | | such person filed a waiver of the retirement formula
provided | 15 | | by Rule 4 of Section 15-136.
| 16 | | (g) If, at the time of retirement, a participant would be | 17 | | entitled to
a retirement annuity under Rule 1, 2, 3, 4, or 5 of | 18 | | Section 15-136, or under
Section 15-136.4, that exceeds
the | 19 | | maximum specified in clause (1) of subsection (c) of Section | 20 | | 15-136, he
or she shall be entitled to a refund of the employee | 21 | | contributions, if any,
paid under Section 15-157 after the date | 22 | | upon which continuance of such
contributions would have | 23 | | otherwise caused the retirement annuity to exceed
this maximum, | 24 | | plus compound interest at the effective rates.
| 25 | | (Source: P.A. 92-16, eff. 6-28-01;
92-424, eff. 8-17-01; | 26 | | 93-347, eff. 7-24-03.)
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| 1 | | (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
| 2 | | Sec. 15-157. Employee contributions.
| 3 | | (a) Except as provided in subsection (a-5), each | 4 | | participating employee
shall make contributions towards the | 5 | | retirement
benefits payable under the retirement program | 6 | | applicable to the
employee from each payment
of earnings | 7 | | applicable to employment under this system on and after the
| 8 | | date of becoming a participant as follows: Prior to September | 9 | | 1, 1949,
3 1/2% of earnings; from September 1, 1949 to August | 10 | | 31, 1955, 5%; from
September 1, 1955 to August 31, 1969, 6%; | 11 | | from September 1, 1969, 6 1/2%.
These contributions are to be | 12 | | considered as normal contributions for purposes
of this | 13 | | Article.
| 14 | | Except as provided in subsection (a-5), each participant | 15 | | who is a police officer or firefighter shall make normal
| 16 | | contributions of 8% of each payment of earnings applicable to | 17 | | employment as a
police officer or firefighter under this system | 18 | | on or after September 1, 1981,
unless he or she files with the | 19 | | board within 60 days after the effective date
of this | 20 | | amendatory Act of 1991 or 60 days after the board receives | 21 | | notice that
he or she is employed as a police officer or | 22 | | firefighter, whichever is later,
a written notice waiving the | 23 | | retirement formula provided by Rule 4 of Section
15-136. This | 24 | | waiver shall be irrevocable. If a participant had met the
| 25 | | conditions set forth in Section 15-132.1 prior to the effective |
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| 1 | | date of this
amendatory Act of 1991 but failed to make the | 2 | | additional normal contributions
required by this paragraph, he | 3 | | or she may elect to pay the additional
contributions plus | 4 | | compound interest at the effective rate. If such payment
is | 5 | | received by the board, the service shall be considered as | 6 | | police officer
service in calculating the retirement annuity | 7 | | under Rule 4 of Section 15-136.
While performing service | 8 | | described in clause (i) or (ii) of Rule 4 of Section
15-136, a | 9 | | participating employee shall be deemed to be employed as a
| 10 | | firefighter for the purpose of determining the rate of employee | 11 | | contributions
under this Section.
| 12 | | (a-5) Beginning July 1, 2014, in lieu of the contribution | 13 | | otherwise required under subsection (a), each Tier 1 member, | 14 | | other than a Tier 1 member who is a police officer or | 15 | | firefighter, shall contribute 6% of earnings toward the | 16 | | retirement benefits payable under the retirement programs | 17 | | applicable to the employee from each payment of earnings | 18 | | applicable to employment under this system. | 19 | | Beginning July 1, 2014, in lieu of the contribution | 20 | | otherwise required under subsection (a), each Tier 1 member who | 21 | | is a police officer or firefighter shall contribute 7.5% of | 22 | | each payment of earnings applicable to employment as a police | 23 | | officer or firefighter under this system, unless he or she has | 24 | | filed a waiver with the board pursuant to subsection (a). | 25 | | The contributions required under this subsection (a-5) are | 26 | | to be considered normal contributions for the purposes of this |
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| 1 | | Article. | 2 | | (b) Starting September 1, 1969 and, in the case of Tier 1 | 3 | | members, ending on June 30, 2014, each participating employee | 4 | | shall make
additional contributions of 1/2 of 1% of earnings to | 5 | | finance a portion
of the cost of the annual increases in | 6 | | retirement annuity provided under
Section 15-136, except that | 7 | | with respect to participants in the
self-managed plan this | 8 | | additional contribution shall be used to finance the
benefits | 9 | | obtained under that retirement program.
| 10 | | (c) In addition to the amounts described in subsections (a) | 11 | | and (b) of this
Section, each participating employee shall make | 12 | | contributions of 1% of earnings
applicable under this system on | 13 | | and after August 1, 1959. The contributions
made under this | 14 | | subsection (c) shall be considered as survivor's insurance
| 15 | | contributions for purposes of this Article if the employee is | 16 | | covered under
the traditional benefit package, and such | 17 | | contributions shall be considered
as additional contributions | 18 | | for purposes of this Article if the employee is
participating | 19 | | in the self-managed plan or has elected to participate in the
| 20 | | portable benefit package and has completed the applicable | 21 | | one-year waiting
period. Contributions in excess of $80 during | 22 | | any fiscal year beginning before
August 31, 1969 and in excess | 23 | | of $120 during any fiscal year thereafter until
September 1, | 24 | | 1971 shall be considered as additional contributions for | 25 | | purposes
of this Article.
| 26 | | (d) If the board by board rule so permits and subject to |
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| 1 | | such conditions
and limitations as may be specified in its | 2 | | rules, a participant may make
other additional contributions of | 3 | | such percentage of earnings or amounts as
the participant shall | 4 | | elect in a written notice thereof received by the board.
| 5 | | (e) That fraction of a participant's total accumulated | 6 | | normal
contributions, the numerator of which is equal to the | 7 | | number of years of
service in excess of that which is required | 8 | | to qualify for the maximum
retirement annuity, and the | 9 | | denominator of which is equal to the total
service of the | 10 | | participant, shall be considered as accumulated additional
| 11 | | contributions. The determination of the applicable maximum | 12 | | annuity and
the adjustment in contributions required by this | 13 | | provision shall be made
as of the date of the participant's | 14 | | retirement.
| 15 | | (f) Notwithstanding the foregoing, a participating | 16 | | employee shall not
be required to make contributions under this | 17 | | Section after the date upon
which continuance of such | 18 | | contributions would otherwise cause his or her
retirement | 19 | | annuity to exceed the maximum retirement annuity as specified | 20 | | in
clause (1) of subsection (c) of Section 15-136.
| 21 | | (g) A participant participating employee may make | 22 | | contributions for the purchase of
service credit under this | 23 | | Article ; however, only a participating employee may make | 24 | | optional contributions under subsection (b) of Section | 25 | | 15-157.1 of this Article .
| 26 | | (h) A Tier 2 member shall not make contributions on |
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| 1 | | earnings that exceed the limitation as prescribed under | 2 | | subsection (b) of Section 15-111 of this Article. | 3 | | (Source: P.A. 98-92, eff. 7-16-13; 98-599, eff. 6-1-14 .)
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