Illinois General Assembly - Full Text of SB2896
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Full Text of SB2896  99th General Assembly




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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 knowingly fails to notify the Board
17to suspend the annuity, the participating municipality or
18participating instrumentality may be required to reimburse the
19Fund for an amount up to one-half of the total of any annuity
20payments made to the annuitant after the date the annuity
21should have been suspended, as determined by the Board. In no
22case shall the total amount repaid by the annuitant plus any
23amount reimbursed by the employer to the Fund be more than the
24total of all annuity payments made to the annuitant after the
25date the annuity should have been suspended. This subsection
26shall not apply if the annuitant returned to work for the



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1employer for less than 12 months.
2    The Fund shall notify all annuitants that they must notify
3the Fund immediately if they return to work for any
4participating employer. The notification by the Fund shall
5occur upon retirement and no less than annually thereafter in a
6format determined by the Fund. The Fund shall also develop and
7maintain a system to track annuitants who have returned to work
8and notify the participating employer and annuitant at least
9annually of the limitations on returning to work under this
11    (b) Supplemental annuities to persons who return to service
12for less than 48 months shall be computed under the provisions
13of Sections 7-141, 7-142 and 7-143. In determining whether an
14employee is eligible for an annuity which requires a minimum
15period of service, his entire period of service shall be taken
16into consideration but the supplemental annuity shall be based
17on earnings and service in the supplemental period only. The
18effective date of the suspended and supplemental annuity for
19the purpose of increases after retirement shall be considered
20to be the effective date of the suspended annuity.
21    (c) Supplemental annuities to persons who return to service
22for 48 months or more shall be a monthly amount determined as
24        (1) An amount shall be computed under subparagraph b of
25    paragraph (1) of subsection (a) of Section 7-142,
26    considering all of the service credits of the employee;



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1        (2) The actuarial value in monthly payments for life of
2    the annuity payments made before suspension shall be
3    determined and subtracted from the amount determined in (1)
4    above;
5        (3) The monthly amount of the suspended annuity, with
6    any applicable increases after retirement computed from
7    the effective date to the date of reinstatement, shall be
8    subtracted from the amount determined in (2) above and the
9    remainder shall be the amount of the supplemental annuity
10    provided that this amount shall not be less than the amount
11    computed under subsection (b) of this Section.
12        (4) The suspended annuity shall be reinstated at an
13    amount including any increases after retirement from the
14    effective date to date of reinstatement.
15        (5) The effective date of the combined suspended and
16    supplemental annuities for the purposes of increases after
17    retirement shall be considered to be the effective date of
18    the supplemental annuity.
19(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12;
2098-389, eff. 8-16-13.)
21    (40 ILCS 5/7-172)  (from Ch. 108 1/2, par. 7-172)
22    Sec. 7-172. Contributions by participating municipalities
23and participating instrumentalities.
24    (a) Each participating municipality and each participating
25instrumentality shall make payment to the fund as follows:



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1        1. municipality contributions in an amount determined
2    by applying the municipality contribution rate to each
3    payment of earnings paid to each of its participating
4    employees;
5        2. an amount equal to the employee contributions
6    provided by paragraph (a) of Section 7-173, whether or not
7    the employee contributions are withheld as permitted by
8    that Section;
9        3. all accounts receivable, together with interest
10    charged thereon, as provided in Section 7-209, and any
11    amounts due under subsection (a-5) of Section 7-144;
12        4. if it has no participating employees with current
13    earnings, an amount payable which, over a closed period of
14    20 years for participating municipalities and 10 years for
15    participating instrumentalities, will amortize, at the
16    effective rate for that year, any unfunded obligation. The
17    unfunded obligation shall be computed as provided in
18    paragraph 2 of subsection (b);
19        5. if it has fewer than 7 participating employees or a
20    negative balance in its municipality reserve, the greater
21    of (A) an amount payable that, over a period of 20 years,
22    will amortize at the effective rate for that year any
23    unfunded obligation, computed as provided in paragraph 2 of
24    subsection (b) or (B) the amount required by paragraph 1 of
25    this subsection (a).
26    (b) A separate municipality contribution rate shall be



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1determined for each calendar year for all participating
2municipalities together with all instrumentalities thereof.
3The municipality contribution rate shall be determined for
4participating instrumentalities as if they were participating
5municipalities. The municipality contribution rate shall be
6the sum of the following percentages:
7        1. The percentage of earnings of all the participating
8    employees of all participating municipalities and
9    participating instrumentalities which, if paid over the
10    entire period of their service, will be sufficient when
11    combined with all employee contributions available for the
12    payment of benefits, to provide all annuities for
13    participating employees, and the $3,000 death benefit
14    payable under Sections 7-158 and 7-164, such percentage to
15    be known as the normal cost rate.
16        2. The percentage of earnings of the participating
17    employees of each participating municipality and
18    participating instrumentalities necessary to adjust for
19    the difference between the present value of all benefits,
20    excluding temporary and total and permanent disability and
21    death benefits, to be provided for its participating
22    employees and the sum of its accumulated municipality
23    contributions and the accumulated employee contributions
24    and the present value of expected future employee and
25    municipality contributions pursuant to subparagraph 1 of
26    this paragraph (b). This adjustment shall be spread over a



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1    period determined by the Board, not to exceed 30 years for
2    participating municipalities or 10 years for participating
3    instrumentalities.
4        3. The percentage of earnings of the participating
5    employees of all municipalities and participating
6    instrumentalities necessary to provide the present value
7    of all temporary and total and permanent disability
8    benefits granted during the most recent year for which
9    information is available.
10        4. The percentage of earnings of the participating
11    employees of all participating municipalities and
12    participating instrumentalities necessary to provide the
13    present value of the net single sum death benefits expected
14    to become payable from the reserve established under
15    Section 7-206 during the year for which this rate is fixed.
16        5. The percentage of earnings necessary to meet any
17    deficiency arising in the Terminated Municipality Reserve.
18    (c) A separate municipality contribution rate shall be
19computed for each participating municipality or participating
20instrumentality for its sheriff's law enforcement employees.
21    A separate municipality contribution rate shall be
22computed for the sheriff's law enforcement employees of each
23forest preserve district that elects to have such employees.
24For the period from January 1, 1986 to December 31, 1986, such
25rate shall be the forest preserve district's regular rate plus



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1    In the event that the Board determines that there is an
2actuarial deficiency in the account of any municipality with
3respect to a person who has elected to participate in the Fund
4under Section 3-109.1 of this Code, the Board may adjust the
5municipality's contribution rate so as to make up that
6deficiency over such reasonable period of time as the Board may
8    (d) The Board may establish a separate municipality
9contribution rate for all employees who are program
10participants employed under the federal Comprehensive
11Employment Training Act by all of the participating
12municipalities and instrumentalities. The Board may also
13provide that, in lieu of a separate municipality rate for these
14employees, a portion of the municipality contributions for such
15program participants shall be refunded or an extra charge
16assessed so that the amount of municipality contributions
17retained or received by the fund for all CETA program
18participants shall be an amount equal to that which would be
19provided by the separate municipality contribution rate for all
20such program participants. Refunds shall be made to prime
21sponsors of programs upon submission of a claim therefor and
22extra charges shall be assessed to participating
23municipalities and instrumentalities. In establishing the
24municipality contribution rate as provided in paragraph (b) of
25this Section, the use of a separate municipality contribution
26rate for program participants or the refund of a portion of the



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1municipality contributions, as the case may be, may be
3    (e) Computations of municipality contribution rates for
4the following calendar year shall be made prior to the
5beginning of each year, from the information available at the
6time the computations are made, and on the assumption that the
7employees in each participating municipality or participating
8instrumentality at such time will continue in service until the
9end of such calendar year at their respective rates of earnings
10at such time.
11    (f) Any municipality which is the recipient of State
12allocations representing that municipality's contributions for
13retirement annuity purposes on behalf of its employees as
14provided in Section 12-21.16 of the Illinois Public Aid Code
15shall pay the allocations so received to the Board for such
16purpose. Estimates of State allocations to be received during
17any taxable year shall be considered in the determination of
18the municipality's tax rate for that year under Section 7-171.
19If a special tax is levied under Section 7-171, none of the
20proceeds may be used to reimburse the municipality for the
21amount of State allocations received and paid to the Board. Any
22multiple-county or consolidated health department which
23receives contributions from a county under Section 11.2 of "An
24Act in relation to establishment and maintenance of county and
25multiple-county health departments", approved July 9, 1943, as
26amended, or distributions under Section 3 of the Department of



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1Public Health Act, shall use these only for municipality
2contributions by the health department.
3    (g) Municipality contributions for the several purposes
4specified shall, for township treasurers and employees in the
5offices of the township treasurers who meet the qualifying
6conditions for coverage hereunder, be allocated among the
7several school districts and parts of school districts serviced
8by such treasurers and employees in the proportion which the
9amount of school funds of each district or part of a district
10handled by the treasurer bears to the total amount of all
11school funds handled by the treasurer.
12    From the funds subject to allocation among districts and
13parts of districts pursuant to the School Code, the trustees
14shall withhold the proportionate share of the liability for
15municipality contributions imposed upon such districts by this
16Section, in respect to such township treasurers and employees
17and remit the same to the Board.
18    The municipality contribution rate for an educational
19service center shall initially be the same rate for each year
20as the regional office of education or school district which
21serves as its administrative agent. When actuarial data become
22available, a separate rate shall be established as provided in
23subparagraph (i) of this Section.
24    The municipality contribution rate for a public agency,
25other than a vocational education cooperative, formed under the
26Intergovernmental Cooperation Act shall initially be the



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1average rate for the municipalities which are parties to the
2intergovernmental agreement. When actuarial data become
3available, a separate rate shall be established as provided in
4subparagraph (i) of this Section.
5    (h) Each participating municipality and participating
6instrumentality shall make the contributions in the amounts
7provided in this Section in the manner prescribed from time to
8time by the Board and all such contributions shall be
9obligations of the respective participating municipalities and
10participating instrumentalities to this fund. The failure to
11deduct any employee contributions shall not relieve the
12participating municipality or participating instrumentality of
13its obligation to this fund. Delinquent payments of
14contributions due under this Section may, with interest, be
15recovered by civil action against the participating
16municipalities or participating instrumentalities.
17Municipality contributions, other than the amount necessary
18for employee contributions, for periods of service by employees
19from whose earnings no deductions were made for employee
20contributions to the fund, may be charged to the municipality
21reserve for the municipality or participating instrumentality.
22    (i) Contributions by participating instrumentalities shall
23be determined as provided herein except that the percentage
24derived under subparagraph 2 of paragraph (b) of this Section,
25and the amount payable under subparagraph 4 of paragraph (a) of
26this Section, shall be based on an amortization period of 10



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2    (j) Notwithstanding the other provisions of this Section,
3the additional unfunded liability accruing as a result of this
4amendatory Act of the 94th General Assembly shall be amortized
5over a period of 30 years beginning on January 1 of the second
6calendar year following the calendar year in which this
7amendatory Act takes effect, except that the employer may
8provide for a longer amortization period by adopting a
9resolution or ordinance specifying a 35-year or 40-year period
10and submitting a certified copy of the ordinance or resolution
11to the fund no later than June 1 of the calendar year following
12the calendar year in which this amendatory Act takes effect.
13    (k) If the amount of a participating employee's reported
14earnings for any of the 12-month periods used to determine the
15final rate of earnings exceeds the employee's 12 month reported
16earnings with the same employer for the previous year by the
17greater of 6% or 1.5 times the annual increase in the Consumer
18Price Index-U, as established by the United States Department
19of Labor for the preceding September, the participating
20municipality or participating instrumentality that paid those
21earnings shall pay to the Fund, in addition to any other
22contributions required under this Article, the present value of
23the increase in the pension resulting from the portion of the
24increase in salary that is in excess of the greater of 6% or
251.5 times the annual increase in the Consumer Price Index-U, as
26determined by the Fund. This present value shall be computed on



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1the basis of the actuarial assumptions and tables used in the
2most recent actuarial valuation of the Fund that is available
3at the time of the computation.
4    Whenever it determines that a payment is or may be required
5under this subsection (k), the fund shall calculate the amount
6of the payment and bill the participating municipality or
7participating instrumentality for that amount. The bill shall
8specify the calculations used to determine the amount due. If
9the participating municipality or participating
10instrumentality disputes the amount of the bill, it may, within
1130 days after receipt of the bill, apply to the fund in writing
12for a recalculation. The application must specify in detail the
13grounds of the dispute. Upon receiving a timely application for
14recalculation, the fund shall review the application and, if
15appropriate, recalculate the amount due. The participating
16municipality and participating instrumentality contributions
17required under this subsection (k) may be paid in the form of a
18lump sum within 90 days after receipt of the bill. If the
19participating municipality and participating instrumentality
20contributions are not paid within 90 days after receipt of the
21bill, then interest will be charged at a rate equal to the
22fund's annual actuarially assumed rate of return on investment
23compounded annually from the 91st day after receipt of the
24bill. Payments must be concluded within 3 years after receipt
25of the bill by the participating municipality or participating



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1    When assessing payment for any amount due under this
2subsection (k), the fund shall exclude earnings increases
3resulting from overload or overtime earnings.
4    When assessing payment for any amount due under this
5subsection (k), the fund shall also exclude earnings increases
6attributable to standard employment promotions resulting in
7increased responsibility and workload.
8    This subsection (k) does not apply to earnings increases
9paid to individuals under contracts or collective bargaining
10agreements entered into, amended, or renewed before January 1,
112012 (the effective date of Public Act 97-609), earnings
12increases paid to members who are 10 years or more from
13retirement eligibility, or earnings increases resulting from
14an increase in the number of hours required to be worked.
15    When assessing payment for any amount due under this
16subsection (k), the fund shall also exclude earnings
17attributable to personnel policies adopted before January 1,
182012 (the effective date of Public Act 97-609) as long as those
19policies are not applicable to employees who begin service on
20or after January 1, 2012 (the effective date of Public Act
22(Source: P.A. 97-333, eff. 8-12-11; 97-609, eff. 1-1-12;
2397-933, eff. 8-10-12; 98-218, eff. 8-9-13.)
24    Section 90. The State Mandates Act is amended by adding
25Section 8.40 as follows:



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1    (30 ILCS 805/8.40 new)
2    Sec. 8.40. Exempt mandate. Notwithstanding Sections 6 and 8
3of this Act, no reimbursement by the State is required for the
4implementation of any mandate created by this amendatory Act of
5the 99th General Assembly.
6    Section 99. Effective date. This Act takes effect upon
7becoming law.