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(40 ILCS 5/7-205) (from Ch. 108 1/2, par. 7-205)
Sec. 7-205. Reserves for annuities. Appropriate reserves shall be created
for payment of all annuities
granted under this Article at the time such annuities are granted and in
amounts determined to be necessary under actuarial tables adopted by the
Board upon recommendation of the actuary of the fund. All annuities payable
shall be charged to the annuity reserve.
1. Amounts credited to annuity reserves shall be derived by transfer of
all the employee credits from the appropriate employee reserves and by
charges to the municipality reserve of those municipalities in which the
retiring employee has accumulated service. If a retiring employee has
accumulated service in more than one participating municipality or
participating instrumentality, the municipality charges for non-concurrent service shall be calculated as follows: (A) for purposes of calculating the annuity reserve, |
| an annuity will be calculated based on service and adjusted earnings with each employer (without regard to the vesting requirement contained in subsection (a) of Section 7-142); and
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(B) the difference between the municipality charges
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| for the actual annuity granted and the aggregation of the municipality charges based upon the ratio of each from those calculations to the aggregated total from paragraph (A) of this item 1.
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Aggregate municipality charges for concurrent service shall be prorated based on the employee's earnings. The municipality charges for retirement annuities calculated under subparagraph a. of paragraph 1. of subsection (a) of Section 7-142 shall be prorated based on actual contributions.
2. Supplemental annuities shall be handled as a separate annuity and
amounts to be credited to the annuity reserve therefor shall be derived in
the same manner as a regular annuity.
3. When a retirement annuity is granted to an employee with a spouse
eligible for a surviving spouse annuity, there shall be credited to the
annuity reserve an amount to fund the cost of both the retirement and
surviving spouse annuity as a joint and survivors annuity.
4. Beginning January 1, 1989, when a retirement annuity is awarded, an
amount equal to the present
value of the $3,000 death benefit payable upon the death of the annuitant
shall be transferred to the annuity reserve from the appropriate
municipality reserves in the same manner as the transfer for annuities.
5. All annuity reserves shall be revalued annually as of December 31.
Beginning as of December 31, 1973, adjustment required therein by such
revaluation shall be charged or credited to the earnings and experience
variation reserve.
6. There shall be credited to the annuity reserve all of the
payments
made by annuitants under Section 7-144.2, plus an
additional amount from the
earnings and experience variation reserve to fund the cost of the
incremental annuities granted to annuitants making these payments.
7. As of December 31, 1972, the excess in the annuity reserve shall be
transferred to the municipality reserves. An amount equal to the deficiency
in the reserve of participating municipalities and participating
instrumentalities which have no participating employees shall be allocated
to their reserves. The remainder shall be allocated in amounts
proportionate to the present value, as of January 1, 1972, of annuities of
annuitants of the remaining participating municipalities and participating
instrumentalities.
(Source: P.A. 97-319, eff. 1-1-12; 97-609, eff. 1-1-12; 97-813, eff. 7-13-12.)
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