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90_HB3814sam002
LRB9011161EGfgam01
1 AMENDMENT TO HOUSE BILL 3814
2 AMENDMENT NO. . Amend House Bill 3814 in the title,
3 by deleting "by changing Section 2-120"; and
4 by replacing everything after the enacting clause with the
5 following:
6 "Section 5. The Illinois Pension Code is amended by
7 changing Sections 1-115, 15-111, 15-136, 15-136.4, 15-139,
8 15-158.2, 15-186.1, 20-121, 20-123, 20-124, 20-125, and
9 20-131 as follows:
10 (40 ILCS 5/1-115) (from Ch. 108 1/2, par. 1-115)
11 Sec. 1-115. Civil Enforcement.
12 (1) A civil action may be brought by the Attorney
13 General or by a participant, beneficiary or fiduciary in
14 order to:
15 (a) Obtain appropriate relief under Section 1-114
16 of this Code;
17 (b) Enjoin any act or practice which violates any
18 provision of this Code; or
19 (c) Obtain other appropriate equitable relief to
20 redress any such violation or to enforce any such
21 provision.
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1 (2) If a court determines that an action brought against
2 a pension fund or retirement system established under this
3 Code, or against a trustee or fiduciary of such a pension
4 fund or retirement system, is frivolous or was brought in bad
5 faith, the court may award attorneys' fees and costs to the
6 pension fund or retirement system, trustee, or fiduciary.
7 (Source: P.A. 82-960.)
8 (40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
9 Sec. 15-111. Earnings. "Earnings": An amount paid for
10 personal services equal to the sum of the basic compensation
11 plus extra compensation for summer teaching, overtime or
12 other extra service. For periods for which an employee
13 receives service credit under subsection (c) of Section
14 15-113.1 or Section 15-113.2, earnings are equal to the basic
15 compensation on which contributions are paid by the employee
16 during such periods. Compensation for employment which is
17 irregular, intermittent and temporary shall not be considered
18 earnings, unless the participant is also receiving earnings
19 from the employer as an employee under Section 15-107.
20 With respect to transition pay paid by the University of
21 Illinois to a person who was a participating employee
22 employed in the fire department of the University of
23 Illinois's Champaign-Urbana campus immediately prior to the
24 elimination of that fire department:
25 (1) "Earnings" includes transition pay paid to the
26 employee on or after the effective date of this
27 amendatory Act of 1998.
28 (2) "Earnings" includes transition pay paid to the
29 employee before the effective date of this amendatory Act
30 of 1998 only if (i) employee contributions under Section
31 15-157 have been withheld from that transition pay or
32 (ii) the employee pays to the System before January 1,
33 2000 an amount representing employee contributions under
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1 Section 15-157 on that transition pay. Employee
2 contributions under item (ii) may be paid in a lump sum,
3 by withholding from additional transition pay accruing
4 before January 1, 2000, or in any other manner approved
5 by the System. Upon payment of the employee
6 contributions on transition pay, the corresponding
7 employer contributions become an obligation of the State.
8 (Source: P.A. 87-8.)
9 (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
10 Sec. 15-136. Retirement annuities - Amount. The
11 provisions of this Section 15-136 apply only to those
12 participants who are participating in the traditional benefit
13 package or the portable benefit package and do not apply to
14 participants who are participating in the self-managed plan.
15 (a) The amount of a participant's retirement annuity,
16 expressed in the form of a single-life annuity, shall be
17 determined by whichever of the following rules is applicable
18 and provides the largest annuity:
19 Rule 1: The retirement annuity shall be 1.67% of final
20 rate of earnings for each of the first 10 years of service,
21 1.90% for each of the next 10 years of service, 2.10% for
22 each year of service in excess of 20 but not exceeding 30,
23 and 2.30% for each year in excess of 30; or for persons who
24 retire on or after January 1, 1998, 2.2% of the final rate of
25 earnings for each year of service.
26 Rule 2: The retirement annuity shall be the sum of the
27 following, determined from amounts credited to the
28 participant in accordance with the actuarial tables and the
29 prescribed rate of interest in effect at the time the
30 retirement annuity begins:
31 (i) the normal annuity which can be provided on an
32 actuarially equivalent basis, by the accumulated normal
33 contributions as of the date the annuity begins; and
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1 (ii) an annuity from employer contributions of an
2 amount which can be provided on an actuarially equivalent
3 basis from the accumulated normal contributions made by
4 the participant under Section 15-113.6 and Section
5 15-113.7 plus 1.4 times all other accumulated normal
6 contributions made by the participant.
7 With respect to a police officer or firefighter who
8 retires on or after August 14, the effective date of this
9 amendatory Act of 1998, the accumulated normal contributions
10 taken into account under clauses (i) and (ii) of this Rule 2
11 shall include the additional normal contributions made by the
12 police officer or firefighter under Section 15-157(a).
13 The amount of a retirement annuity calculated under this
14 Rule 2 shall be computed solely on the basis of the
15 participant's accumulated normal contributions, as specified
16 in this Rule and defined in Section 15-116. Although the
17 portion of the annuity provided in clause (ii) of this Rule
18 is payable from employer contributions, it is nevertheless to
19 be calculated on the basis of participant (rather than
20 employer) contributions, as specified in that clause.
21 Neither an employee or employer contribution for early
22 retirement under Section 15-136.2, nor any other employer
23 contribution, shall be used in the calculation of the amount
24 of a retirement annuity under this Rule 2. Insofar as the
25 Trustees of the System, in their discretion, interpret or
26 have interpreted this Section in conformity with this
27 paragraph, the General Assembly declares that interpretation
28 to be within the scope of the Board's discretion. This
29 paragraph applies to all persons and not only to persons
30 described in Section 1-103.1 of this Code.
31 Rule 3: The retirement annuity of a participant who is
32 employed at least one-half time during the period on which
33 his or her final rate of earnings is based, shall be equal to
34 the participant's years of service not to exceed 30,
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1 multiplied by (1) $96 if the participant's final rate of
2 earnings is less than $3,500, (2) $108 if the final rate of
3 earnings is at least $3,500 but less than $4,500, (3) $120 if
4 the final rate of earnings is at least $4,500 but less than
5 $5,500, (4) $132 if the final rate of earnings is at least
6 $5,500 but less than $6,500, (5) $144 if the final rate of
7 earnings is at least $6,500 but less than $7,500, (6) $156 if
8 the final rate of earnings is at least $7,500 but less than
9 $8,500, (7) $168 if the final rate of earnings is at least
10 $8,500 but less than $9,500, and (8) $180 if the final rate
11 of earnings is $9,500 or more, except that the annuity for
12 those persons having made an election under Section
13 15-154(a-1) shall be calculated and payable under the
14 portable retirement benefit program pursuant to the
15 provisions of Section 15-136.4.
16 Rule 4: A participant who is at least age 50 and has 25
17 or more years of service as a police officer or firefighter,
18 and a participant who is age 55 or over and has at least 20
19 but less than 25 years of service as a police officer or
20 firefighter, shall be entitled to a retirement annuity of
21 2 1/4% of the final rate of earnings for each of the first 10
22 years of service as a police officer or firefighter, 2 1/2%
23 for each of the next 10 years of service as a police officer
24 or firefighter, and 2 3/4% for each year of service as a
25 police officer or firefighter in excess of 20. The
26 retirement annuity for all other service shall be computed
27 under Rule 1.
28 For purposes of this Rule 4, a participant's service as a
29 firefighter shall also include the following:
30 (i) service that is performed while the person is
31 an employee under subsection (h) of Section 15-107; and
32 (ii) in the case of an individual who was a
33 participating employee employed in the fire department of
34 the University of Illinois's Champaign-Urbana campus
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1 immediately prior to the elimination of that fire
2 department and who immediately after the elimination of
3 that fire department transferred to another job with the
4 University of Illinois, service performed as an employee
5 of the University of Illinois in a position other than
6 police officer or firefighter, from the date of that
7 transfer until the employee's next termination of service
8 with the University of Illinois.
9 (b) The retirement annuity provided under Rules 1 and 3
10 above shall be reduced by 1/2 of 1% for each month the
11 participant is under age 60 at the time of retirement.
12 However, this reduction shall not apply in the following
13 cases:
14 (1) For a disabled participant whose disability
15 benefits have been discontinued because he or she has
16 exhausted eligibility for disability benefits under
17 clause (6) of Section 15-152;
18 (2) For a participant who has at least the number
19 of years of service required to retire at any age under
20 subsection (a) of Section 15-135; or
21 (3) For that portion of a retirement annuity which
22 has been provided on account of service of the
23 participant during periods when he or she performed the
24 duties of a police officer or firefighter, if these
25 duties were performed for at least 5 years immediately
26 preceding the date the retirement annuity is to begin.
27 (c) The maximum retirement annuity provided under Rules
28 1, 2, and 4 shall be the lesser of (1) the annual limit of
29 benefits as specified in Section 415 of the Internal Revenue
30 Code of 1986, as such Section may be amended from time to
31 time and as such benefit limits shall be adjusted by the
32 Commissioner of Internal Revenue, and (2) 80% of final rate
33 of earnings.
34 (d) An annuitant whose status as an employee terminates
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1 after August 14, 1969 shall receive automatic increases in
2 his or her retirement annuity as follows:
3 Effective January 1 immediately following the date the
4 retirement annuity begins, the annuitant shall receive an
5 increase in his or her monthly retirement annuity of 0.125%
6 of the monthly retirement annuity provided under Rule 1, Rule
7 2, Rule 3, or Rule 4, contained in this Section, multiplied
8 by the number of full months which elapsed from the date the
9 retirement annuity payments began to January 1, 1972, plus
10 0.1667% of such annuity, multiplied by the number of full
11 months which elapsed from January 1, 1972, or the date the
12 retirement annuity payments began, whichever is later, to
13 January 1, 1978, plus 0.25% of such annuity multiplied by the
14 number of full months which elapsed from January 1, 1978, or
15 the date the retirement annuity payments began, whichever is
16 later, to the effective date of the increase.
17 The annuitant shall receive an increase in his or her
18 monthly retirement annuity on each January 1 thereafter
19 during the annuitant's life of 3% of the monthly annuity
20 provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
21 this Section. The change made under this subsection by P.A.
22 81-970 is effective January 1, 1980 and applies to each
23 annuitant whose status as an employee terminates before or
24 after that date.
25 Beginning January 1, 1990, all automatic annual increases
26 payable under this Section shall be calculated as a
27 percentage of the total annuity payable at the time of the
28 increase, including all increases previously granted under
29 this Article.
30 The change made in this subsection by P.A. 85-1008 is
31 effective January 26, 1988, and is applicable without regard
32 to whether status as an employee terminated before that date.
33 (e) If, on January 1, 1987, or the date the retirement
34 annuity payment period begins, whichever is later, the sum of
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1 the retirement annuity provided under Rule 1 or Rule 2 of
2 this Section and the automatic annual increases provided
3 under the preceding subsection or Section 15-136.1, amounts
4 to less than the retirement annuity which would be provided
5 by Rule 3, the retirement annuity shall be increased as of
6 January 1, 1987, or the date the retirement annuity payment
7 period begins, whichever is later, to the amount which would
8 be provided by Rule 3 of this Section. Such increased amount
9 shall be considered as the retirement annuity in determining
10 benefits provided under other Sections of this Article. This
11 paragraph applies without regard to whether status as an
12 employee terminated before the effective date of this
13 amendatory Act of 1987, provided that the annuitant was
14 employed at least one-half time during the period on which
15 the final rate of earnings was based.
16 (f) A participant is entitled to such additional annuity
17 as may be provided on an actuarially equivalent basis, by any
18 accumulated additional contributions to his or her credit.
19 However, the additional contributions made by the participant
20 toward the automatic increases in annuity provided under this
21 Section shall not be taken into account in determining the
22 amount of such additional annuity.
23 (g) If, (1) by law, a function of a governmental unit,
24 as defined by Section 20-107 of this Code, is transferred in
25 whole or in part to an employer, and (2) a participant
26 transfers employment from such governmental unit to such
27 employer within 6 months after the transfer of the function,
28 and (3) the sum of (A) the annuity payable to the participant
29 under Rule 1, 2, or 3 of this Section (B) all proportional
30 annuities payable to the participant by all other retirement
31 systems covered by Article 20, and (C) the initial primary
32 insurance amount to which the participant is entitled under
33 the Social Security Act, is less than the retirement annuity
34 which would have been payable if all of the participant's
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1 pension credits validated under Section 20-109 had been
2 validated under this system, a supplemental annuity equal to
3 the difference in such amounts shall be payable to the
4 participant.
5 (h) On January 1, 1981, an annuitant who was receiving a
6 retirement annuity on or before January 1, 1971 shall have
7 his or her retirement annuity then being paid increased $1
8 per month for each year of creditable service. On January 1,
9 1982, an annuitant whose retirement annuity began on or
10 before January 1, 1977, shall have his or her retirement
11 annuity then being paid increased $1 per month for each year
12 of creditable service.
13 (i) On January 1, 1987, any annuitant whose retirement
14 annuity began on or before January 1, 1977, shall have the
15 monthly retirement annuity increased by an amount equal to 8¢
16 per year of creditable service times the number of years that
17 have elapsed since the annuity began.
18 (Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
19 eff. 8-16-97; 90-576, eff. 3-31-98; 90-655, eff. 7-30-98;
20 90-766, eff. 8-14-98.)
21 (40 ILCS 5/15-136.4)
22 Sec. 15-136.4. Retirement and Survivor Benefits Under
23 Portable Benefit Package.
24 (a) This Section 15-136.4 describes the form of annuity
25 and survivor benefits available to a participant who has
26 elected the portable benefit package and has completed the
27 one-year waiting period required under subsection (e) of
28 Section 15-134.5. For purposes of this Section, the term
29 "eligible spouse" means the husband or wife of a participant
30 to whom the participant is married on the date the
31 participant's retirement annuity begins, provided however,
32 that if the participant should die prior to the commencement
33 of retirement annuity benefits, then "eligible spouse" means
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1 the husband or wife, if any, to whom the participant was
2 married throughout the one-year period preceding the date of
3 his or her death.
4 (b) This subsection (b) describes the normal form of
5 annuity payable to a participant subject to this Section
6 15-136.4. If the participant is unmarried on the date his or
7 her annuity payments commence, then the annuity payments
8 shall be made in the form of a single-life annuity as
9 described in Section 15-118. If the participant is married
10 on the date his or her annuity payments commence, then the
11 annuity payments shall be paid in the form of a qualified
12 joint and survivor annuity that is the actuarial equivalent
13 of the single-life annuity. Under the "qualified joint and
14 survivor annuity", a reduced amount shall be paid to the
15 participant for his or her lifetime and his or her eligible
16 spouse, if surviving at the participant's death, shall be
17 entitled to receive thereafter a lifetime survivorship
18 annuity in a monthly amount equal to 50% of the reduced
19 monthly amount that was payable to the participant. The last
20 payment of a qualified joint and survivor annuity shall be
21 made as of the first day of the month in which the death of
22 the survivor occurs.
23 (c) Instead of the normal form of annuity that would be
24 paid under subsection (b), a participant may elect in writing
25 within the 90-day period prior to the date his or her annuity
26 payments commence to waive the normal form of annuity payment
27 and receive an optional form of annuity as described in
28 subsection (h). If the participant is married and elects an
29 optional form of annuity under subsection (h) other than a
30 joint and survivor annuity with the eligible spouse
31 designated as the contingent annuitant, then such election
32 shall require the consent of his or her eligible spouse in
33 the manner described in subsection (d). At any time during
34 the 90-day period preceding the date the participant's
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1 annuity commences, the participant may revoke the optional
2 form elected under this subsection (c) and reinstate coverage
3 under the qualified joint and survivor annuity without the
4 spouse's consent, but an election to revoke the optional form
5 elected and elect a new optional form or designate a
6 different contingent annuitant shall not be effective without
7 the eligible spouse's consent.
8 (d) The eligible spouse's consent to any election made
9 pursuant to this Section that requires the eligible spouse's
10 consent shall be in writing and shall acknowledge the effect
11 of the consent. In addition, the eligible spouse's signature
12 on the written consent must be witnessed by a notary public.
13 The eligible spouse's consent need not be obtained if the
14 system is satisfied that there is no eligible spouse, that
15 the eligible spouse cannot be located, or because of any
16 other relevant circumstances. An eligible spouse's consent
17 under this Section is valid only with respect to the
18 specified optional form of payment and, if applicable,
19 contingent annuitant designated by the participant. If the
20 optional form of payment or the contingent annuitant is
21 subsequently changed (other than by a revocation of the
22 optional form and reinstatement of the qualified joint and
23 survivor annuity), a new consent by the eligible spouse is
24 required. The eligible spouse's consent to an election made
25 by a participant pursuant to this Section, once made, may not
26 be revoked by the eligible spouse.
27 (e) Within a reasonable period of time preceding the
28 date a participant's annuity commences, a participant shall
29 be supplied with a written explanation of (1) the terms and
30 conditions of the normal form single-life annuity and
31 qualified joint and survivor annuity, (2) the participant's
32 right to elect a single-life annuity or an optional form of
33 payment under subsection (h) subject to his or her eligible
34 spouse's consent, if applicable, and (3) the participant's
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1 right to reinstate coverage under the qualified joint and
2 survivor annuity prior to his or her annuity commencement
3 date by revoking an election of an optional form of benefit
4 under subsection (h).
5 (f) If a married participant with at least 5 years of
6 service dies prior to commencing retirement annuity payments
7 and prior to taking a refund under Section 15-154, his or her
8 eligible spouse is entitled to receive a pre-retirement
9 survivor annuity, if there is not then in effect a waiver of
10 the pre-retirement survivor annuity. The pre-retirement
11 survivor annuity payable under this subsection shall be a
12 monthly annuity payable for the eligible spouse's life,
13 commencing as of the beginning of the month next following
14 the later of the date of the participant's death or the date
15 the participant would have first met the eligibility
16 requirements for retirement, and continuing through the
17 beginning of the month in which the death of the eligible
18 spouse occurs. The monthly amount payable to the spouse
19 under the pre-retirement survivor annuity shall be equal to
20 the monthly amount that would be payable as a survivor
21 annuity under the qualified joint and survivor annuity
22 described in subsection (b) if: (1) in the case of a
23 participant who dies on or after the date on which the
24 participant has met the eligibility requirements for
25 retirement, the participant had retired with an immediate
26 qualified joint and survivor annuity on the day before the
27 participant's date of death; or (2) in the case of a
28 participant who dies before the earliest date on which the
29 participant would have met the eligibility requirements for
30 retirement age, the participant had separated from service on
31 the date of death, survived to the earliest retirement age
32 based on service prior to his or her death, retired with an
33 immediate qualified joint and survivor annuity at the
34 earliest retirement age, and died on the day after the day on
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1 which the participant would have attained the earliest
2 retirement age.
3 (g) A married participant who has not retired may elect
4 at any time to waive the pre-retirement survivor annuity
5 described in subsection (f). Any such election shall require
6 the consent of the participant's eligible spouse in the
7 manner described in subsection (e). A waiver of the
8 pre-retirement survivor annuity shall increase the lump sum
9 death benefit payable under subsection (b) of Section 15-141.
10 Prior to electing any waiver of the pre-retirement survivor
11 annuity, the participant shall be provided with a written
12 explanation of (1) the terms and conditions of the
13 pre-retirement survivor annuity and the death benefits
14 payable from the system both with and without the
15 pre-retirement survivor annuity, (2) the participant's right
16 to elect a waiver of the pre-retirement survivor annuity
17 coverage subject to his or her spouse's consent, and (3) the
18 participant's right to reinstate pre-retirement survivor
19 annuity coverage at any time by revoking a prior waiver of
20 such coverage.
21 (h) By filing a timely election with the system, a
22 participant who will be eligible to receive a retirement
23 annuity under this Section may waive the normal form of
24 annuity payment described in subsection (b), subject to
25 obtaining the consent of his or her eligible spouse, if
26 applicable, and elect to receive any one of the following
27 optional annuity forms:
28 (1) Joint and Survivor Annuity Options: The
29 participant may elect to receive a reduced annuity
30 payable for his or her life and to have a lifetime
31 survivorship annuity in a monthly amount equal to 50%,
32 75%, or 100% (as elected by the participant) of that
33 reduced monthly amount, to be paid after the
34 participant's death to his or her contingent annuitant,
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1 if the contingent annuitant is alive at the time of the
2 participant's death.
3 (2) Single-Life Annuity Option (optional for
4 married participants). The participant may elect to
5 receive a single-life annuity payable for his or her life
6 only.
7 All optional forms shall be in an amount that is the
8 actuarial equivalent of the single-life annuity.
9 For the purposes of this Section, the term "contingent
10 annuitant" means the beneficiary who is designated by a
11 participant at the time the participant elects a joint and
12 survivor annuity to receive the lifetime survivorship annuity
13 in the event the beneficiary survives the participant at the
14 participant's death.
15 (i) Under no circumstances may an option be elected,
16 changed, or revoked after the date the participant's
17 retirement annuity commences.
18 (j) An election made pursuant to subsection (h) shall
19 become inoperative if the participant or the contingent
20 annuitant dies before the date the participant's annuity
21 payments commence, or if the eligible spouse's consent is
22 required and not given.
23 (k) For purposes of applying the provisions of Section
24 20-123 of this Code, the portable benefit package shall be
25 treated as if it were provided by a participating system that
26 has no survivor's annuity benefit.
27 (Source: P.A. 90-448, eff. 8-16-97; 90-766, eff. 8-14-98.)
28 (40 ILCS 5/15-139) (from Ch. 108 1/2, par. 15-139)
29 Sec. 15-139. Retirement annuities; cancellation;
30 suspended during employment.
31 (a) If an annuitant returns to employment for an
32 employer within 60 days after the beginning of the retirement
33 annuity payment period, the retirement annuity shall be
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1 cancelled, and the annuitant shall refund to the System the
2 total amount of the retirement annuity payments which he or
3 she received. If the retirement annuity is cancelled, the
4 participant shall continue to participate in the System.
5 (b) If an annuitant retires prior to age 60 and receives
6 or becomes entitled to receive during any month compensation
7 in excess of the monthly retirement annuity for services
8 performed after the date of retirement for any employer under
9 this System, the State Employees' Retirement System of
10 Illinois, or the Teachers' Retirement System of the State of
11 Illinois, that portion of the monthly retirement annuity
12 provided by employer contributions shall not be payable.
13 If an annuitant retires at age 60 or over and receives or
14 becomes entitled to receive during any academic year
15 compensation in excess of the difference between his or her
16 highest annual earnings prior to retirement and his or her
17 annual retirement annuity computed under Rule 1, Rule 2, Rule
18 3 or Rule 4 of Section 15-136 for services performed after
19 the date of retirement for any employer under this System,
20 that portion of the monthly retirement annuity provided by
21 employer contributions shall be reduced by an amount equal to
22 the compensation that exceeds such difference.
23 However, any remuneration received for serving as a
24 member of the Illinois Educational Labor Relations Board
25 shall be excluded from "compensation" for the purposes of
26 this subsection (b), and serving as a member of the Illinois
27 Educational Labor Relations Board shall not be deemed to be a
28 return to employment for the purposes of this Section. This
29 provision applies without regard to whether service was
30 terminated prior to the effective date of this amendatory Act
31 of 1991.
32 (c) If an employer certifies that an annuitant has been
33 reemployed on a permanent and continuous basis or in a
34 position in which the annuitant is expected to serve for at
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1 least 9 months, the annuitant shall resume his or her status
2 as a participating employee and shall be entitled to all
3 rights applicable to participating employees upon filing with
4 the board an election to forego all annuity payments during
5 the period of reemployment. Upon subsequent retirement, the
6 retirement annuity shall consist of the annuity which was
7 terminated by the reemployment, plus the additional
8 retirement annuity based upon service granted during the
9 period of reemployment, but the combined retirement annuity
10 shall not exceed the maximum annuity applicable on the date
11 of the last retirement.
12 The total service and earnings credited before and after
13 the initial date of retirement shall be considered in
14 determining eligibility of the employee or the employee's
15 beneficiary to benefits under this Article, and in
16 calculating final rate of earnings.
17 In determining the death benefit payable to a beneficiary
18 of an annuitant who again becomes a participating employee
19 under this Section, accumulated normal and additional
20 contributions shall be considered as the sum of the
21 accumulated normal and additional contributions at the date
22 of initial retirement and the accumulated normal and
23 additional contributions credited after that date, less the
24 sum of the annuity payments received by the annuitant.
25 The survivors insurance benefits provided under Section
26 15-145 shall not be applicable to an annuitant who resumes
27 his or her status as a participating employee, unless the
28 annuitant, at the time of initial retirement, has a survivors
29 insurance beneficiary who could qualify for such benefits.
30 If the annuitant's employment is terminated because of
31 circumstances other than death before 9 months from the date
32 of reemployment, the provisions of this Section regarding
33 resumption of status as a participating employee shall not
34 apply. The normal and survivors insurance contributions which
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1 are deducted during this period shall be refunded to the
2 annuitant without interest, and subsequent benefits under
3 this Article shall be the same as those which were applicable
4 prior to the date the annuitant resumed employment.
5 (Source: P.A. 86-1488.)
6 (40 ILCS 5/15-158.2)
7 Sec. 15-158.2. Self-managed plan.
8 (a) Purpose. The General Assembly finds that it is
9 important for colleges and universities to be able to attract
10 and retain the most qualified employees and that in order to
11 attract and retain these employees, colleges and universities
12 should have the flexibility to provide a defined contribution
13 plan as an alternative for eligible employees who elect not
14 to participate in a defined benefit retirement program
15 provided under this Article. Accordingly, the State
16 Universities Retirement System is hereby authorized to
17 establish and administer a self-managed plan, which shall
18 offer participating employees the opportunity to accumulate
19 assets for retirement through a combination of employee and
20 employer contributions that may be invested in mutual funds,
21 collective investment funds, or other investment products and
22 used to purchase annuity contracts, either fixed or variable
23 or a combination thereof. The plan must be qualified under
24 the Internal Revenue Code of 1986.
25 (b) Adoption by employers. Each employer subject to
26 this Article may elect to adopt the self-managed plan
27 established under this Section; this election is irrevocable.
28 An employer's election to adopt the self-managed plan makes
29 available to the eligible employees of that employer the
30 elections described in Section 15-134.5.
31 The State Universities Retirement System shall be the
32 plan sponsor for the self-managed plan and shall prepare a
33 plan document and prescribe such rules and procedures as are
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1 considered necessary or desirable for the administration of
2 the self-managed plan. Consistent with its fiduciary duty to
3 the participants and beneficiaries of the self-managed plan,
4 the Board of Trustees of the System may delegate aspects of
5 plan administration as it sees fit to companies authorized to
6 do business in this State, to the employers, or to a
7 combination of both.
8 (c) Selection of service providers and funding vehicles.
9 The System, in consultation with the employers, shall solicit
10 proposals to provide administrative services and funding
11 vehicles for the self-managed plan from insurance and annuity
12 companies and mutual fund companies, banks, trust companies,
13 or other financial institutions authorized to do business in
14 this State. In reviewing the proposals received and
15 approving and contracting with no fewer than 2 and no more
16 than 7 companies, at least 2 of which must be insurance and
17 annuity companies, the Board of Trustees of the System shall
18 consider, among other things, the following criteria:
19 (1) the nature and extent of the benefits that
20 would be provided to the participants;
21 (2) the reasonableness of the benefits in relation
22 to the premium charged;
23 (3) the suitability of the benefits to the needs
24 and interests of the participating employees and the
25 employer;
26 (4) the ability of the company to provide benefits
27 under the contract and the financial stability of the
28 company; and
29 (5) the efficacy of the contract in the recruitment
30 and retention of employees.
31 The System, in consultation with the employers, shall
32 periodically review each approved company. A company may
33 continue to provide administrative services and funding
34 vehicles for the self-managed plan only so long as it
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1 continues to be an approved company under contract with the
2 Board.
3 (d) Employee Direction. Employees who are participating
4 in the program must be allowed to direct the transfer of
5 their account balances among the various investment options
6 offered, subject to applicable contractual provisions. The
7 participant shall not be deemed a fiduciary by reason of
8 providing such investment direction. A person who is a
9 fiduciary shall not be liable for any loss resulting from
10 such investment direction and shall not be deemed to have
11 breached any fiduciary duty by acting in accordance with that
12 direction. Neither the System nor the employer guarantees
13 any of the investments in the employee's account balances.
14 (e) Participation. An employee eligible to participate
15 in the self-managed plan must make a written election in
16 accordance with the provisions of Section 15-134.5 and the
17 procedures established by the System. Participation in the
18 self-managed plan by an electing employee shall begin on the
19 first day of the first pay period following the later of the
20 date the employee's election is filed with the System or the
21 effective date as of which the employee's employer begins to
22 offer participation in the self-managed plan. Employers may
23 not make the self-managed plan available earlier than January
24 1, 1998. An employee's participation in any other retirement
25 program administered by the System under this Article shall
26 terminate on the date that participation in the self-managed
27 plan begins.
28 An employee who has elected to participate in the
29 self-managed plan under this Section must continue
30 participation while employed in an eligible position, and may
31 not participate in any other retirement program administered
32 by the System under this Article while employed by that
33 employer or any other employer that has adopted the
34 self-managed plan, unless the self-managed plan is terminated
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1 in accordance with subsection (i).
2 Participation in the self-managed plan under this Section
3 shall constitute membership in the State Universities
4 Retirement System.
5 A participant under this Section shall be entitled to the
6 benefits of Article 20 of this Code. modified to reflect the
7 following principles:
8 (1) The amount of any retirement annuities payable
9 under this Section depend solely on the value of the
10 participant's vested account balances and are not subject
11 to a maximum annuity benefit limitation or any adjustment
12 pursuant to the proportional retirement annuity
13 provisions of Article 20. If a participant in the
14 self-managed plan under this Section elects to apply the
15 provisions of Article 20, the dollar amount of the
16 proportional retirement annuity payable from the System
17 shall be deemed to be zero and the provisions of the
18 second paragraph of Section 20-131 shall not apply with
19 respect to the retirement annuity benefits payable to the
20 participant under this Section.
21 (2) For purposes of Section 20-123 of this Code,
22 the self-managed plan shall be treated as if it were
23 provided by a participating system that has no survivor's
24 annuity benefit.
25 (3) Notwithstanding Section 20-125 of this Code,
26 upon reemployment by a participating system of a retired
27 participant in the self-managed plan, the retirement
28 annuity payment made to such participant from any annuity
29 contracts acquired from the participant's self-managed
30 plan account balances shall not be suspended.
31 (f) Establishment of Initial Account Balance. If at the
32 time an employee elects to participate in the self-managed
33 plan he or she has rights and credits in the System due to
34 previous participation in the traditional benefit package,
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1 the System shall establish for the employee an opening
2 account balance in the self-managed plan, equal to the amount
3 of contribution refund that the employee would be eligible to
4 receive under Section 15-154 if the employee terminated
5 employment on that date and elected a refund of
6 contributions, except that this hypothetical refund shall
7 include interest at the effective rate for the respective
8 years. The System shall transfer assets from the defined
9 benefit retirement program to the self-managed plan, as a tax
10 free transfer in accordance with Internal Revenue Service
11 guidelines, for purposes of funding the employee's opening
12 account balance.
13 (g) No Duplication of Service Credit. Notwithstanding
14 any other provision of this Article, an employee may not
15 purchase or receive service or service credit applicable to
16 any other retirement program administered by the System under
17 this Article for any period during which the employee was a
18 participant in the self-managed plan established under this
19 Section.
20 (h) Contributions. The self-managed plan shall be
21 funded by contributions from employees participating in the
22 self-managed plan and employer contributions as provided in
23 this Section.
24 The contribution rate for employees participating in the
25 self-managed plan under this Section shall be equal to the
26 employee contribution rate for other participants in the
27 System, as provided in Section 15-157. This required
28 contribution shall be made as an "employer pick-up" under
29 Section 414(h) of the Internal Revenue Code of 1986 or any
30 successor Section thereof. Any employee participating in the
31 System's traditional benefit package prior to his or her
32 election to participate in the self-managed plan shall
33 continue to have the employer pick up the contributions
34 required under Section 15-157. However, the amounts picked
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1 up after the election of the self-managed plan shall be
2 remitted to and treated as assets of the self-managed plan.
3 In no event shall an employee have an option of receiving
4 these amounts in cash. Employees may make additional
5 contributions to the self-managed plan in accordance with
6 procedures prescribed by the System, to the extent permitted
7 under rules prescribed by the System.
8 The program shall provide for employer contributions to
9 be credited to each self-managed plan participant at a rate
10 of 7.6% of the participating employee's salary, less the
11 amount used by the System to provide disability benefits for
12 the employee. The amounts so credited shall be paid into the
13 participant's self-managed plan accounts in a manner to be
14 prescribed by the System.
15 An amount of employer contribution, not exceeding 1% of
16 the participating employee's salary, shall be used for the
17 purpose of providing the disability benefits of the System to
18 the employee. Prior to the beginning of each plan year under
19 the self-managed plan, the Board of Trustees shall determine,
20 as a percentage of salary, the amount of employer
21 contributions to be allocated during that plan year for
22 providing disability benefits for employees in the
23 self-managed plan.
24 The State of Illinois shall make contributions by
25 appropriations to the System of the employer contributions
26 required for employees who participate in the self-managed
27 plan under this Section. The amount required shall be
28 certified by the Board of Trustees of the System and paid by
29 the State in accordance with Section 15-165. The System
30 shall not be obligated to remit the required employer
31 contributions to any of the insurance and annuity companies,
32 mutual fund companies, banks, trust companies, financial
33 institutions, or other sponsors of any of the funding
34 vehicles offered under the self-managed plan until it has
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1 received the required employer contributions from the State.
2 In the event of a deficiency in the amount of State
3 contributions, the System shall implement those procedures
4 described in subsection (c) of Section 15-165 to obtain the
5 required funding from the General Revenue Fund.
6 (i) Termination. The self-managed plan authorized under
7 this Section may be terminated by the System, subject to the
8 terms of any relevant contracts, and the System shall have no
9 obligation to reestablish the self-managed plan under this
10 Section. This Section does not create a right to continued
11 participation in any self-managed plan set up by the System
12 under this Section. If the self-managed plan is terminated,
13 the participants shall have the right to participate in one
14 of the other retirement programs offered by the System and
15 receive service credit in such other retirement program for
16 any years of employment following the termination.
17 (j) Vesting; Withdrawal; Return to Service. A
18 participant in the self-managed plan becomes vested in the
19 employer contributions credited to his or her accounts in the
20 self-managed plan on the earliest to occur of the following:
21 (1) completion of 5 years of service with an employer
22 described in Section 15-106; (2) the death of the
23 participating employee while employed by an employer
24 described in Section 15-106, if the participant has completed
25 at least 1 1/2 years of service; or (3) the participant's
26 election to retire and apply the reciprocal provisions of
27 Article 20 of this Code.
28 A participant in the self-managed plan who receives a
29 distribution of his or her vested amounts from the
30 self-managed plan while not yet eligible for retirement under
31 this Article (and Article 20, if applicable) upon or after
32 termination of employment shall forfeit all service credit
33 and accrued rights in the System; if subsequently
34 re-employed, the participant shall be considered a new
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1 employee. If a former participant again becomes a
2 participating employee (or becomes employed by a
3 participating system under Article 20 of this Code) and
4 continues as such for at least 2 years, all such rights,
5 service credits, and previous status as a participant shall
6 be restored upon repayment of the amount of the distribution,
7 without interest.
8 (k) Benefit amounts. If an employee who is vested in
9 employer contributions terminates employment, the employee
10 shall be entitled to a benefit which is based on the account
11 values attributable to both employer and employee
12 contributions and any investment return thereon.
13 If an employee who is not vested in employer
14 contributions terminates employment, the employee shall be
15 entitled to a benefit based solely on the account values
16 attributable to the employee's contributions and any
17 investment return thereon, and the employer contributions and
18 any investment return thereon shall be forfeited. Any
19 employer contributions which are forfeited shall be held in
20 escrow by the company investing those contributions and shall
21 be used as directed by the System for future allocations of
22 employer contributions or for the restoration of amounts
23 previously forfeited by former participants who again become
24 participating employees.
25 (Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97;
26 90-576, eff. 3-31-98; 90-766, eff. 8-14-98.)
27 (40 ILCS 5/15-186.1) (from Ch. 108 1/2, par. 15-186.1)
28 Sec. 15-186.1. Mistake in benefit.
29 (a) If the System mistakenly sets any benefit at an
30 incorrect amount, it shall recalculate the benefit as soon as
31 may be practicable after the mistake is discovered.
32 If the benefit was mistakenly set too low, the System
33 shall make a lump sum payment to the recipient of an amount
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1 equal to the difference between the benefits that should have
2 been paid and those actually paid, plus interest at the
3 effective rate from the date the unpaid amounts accrued to
4 the date of payment.
5 If the benefit was mistakenly set too high, the System
6 may recover the amount overpaid from the recipient thereof,
7 either directly or by deducting such amount from the
8 remaining benefits payable to the recipient. However, if (1)
9 the amount of the benefit was mistakenly set too high, and
10 (2) the error was undiscovered for 3 years or longer, and (3)
11 the error was not the result of incorrect information
12 supplied by the affected member or beneficiary, then upon
13 discovery of the mistake the benefit shall be adjusted to the
14 correct level, but the recipient of the benefit need not
15 repay to the System the excess amounts received in error.
16 (b) A benefit that was calculated in accordance with the
17 System's administrative interpretation of this Code at the
18 time the benefit was calculated shall not be deemed to have
19 been mistakenly set at an incorrect amount for the purposes
20 of subsection (a) on the sole basis of an adverse ruling in a
21 lawsuit brought to challenge that interpretation, unless the
22 person eligible to receive the benefit was a party to the
23 lawsuit or, in the case of a class action, a member of the
24 certified class, at the time of the adverse ruling.
25 (Source: P.A. 85-1008.)
26 (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
27 Sec. 20-121. Calculation of proportional retirement
28 annuities. Upon retirement of the employee, a proportional
29 retirement annuity shall be computed by each participating
30 system in which pension credit has been established on the
31 basis of pension credits under each system. The computation
32 shall be in accordance with the formula or method prescribed
33 by each participating system which is in effect at the date
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1 of the employee's latest withdrawal from service covered by
2 any of the systems in which he has pension credits which he
3 elects to have considered under this Article. However, the
4 amount of any retirement annuity payable under the
5 self-managed plan established under Section 15-158.2 of this
6 Code depends solely on the value of the participant's vested
7 account balances and is not subject to any proportional
8 adjustment under this Section.
9 Combined pension credit under all retirement systems
10 subject to this Article shall be considered in determining
11 whether the minimum qualification has been met and the
12 formula or method of computation which shall be applied. If
13 a system has a step-rate formula for calculation of the
14 retirement annuity, pension credits covering previous service
15 which have been established under another system shall be
16 considered in determining which range or ranges of the
17 step-rate formula are to be applicable to the employee.
18 Interest on pension credit shall continue to accumulate
19 in accordance with the provisions of the law governing the
20 retirement system in which the same has been established
21 during the time an employee is in the service of another
22 employer, on the assumption such employee, for interest
23 purposes for pension credit, is continuing in the service
24 covered by such retirement system.
25 (Source: P.A. 79-782.)
26 (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
27 Sec. 20-123. Survivor's annuity. The provisions
28 governing a retirement annuity shall be applicable to a
29 survivor's annuity. Appropriate credits shall be established
30 for survivor's annuity purposes in those participating
31 systems which provide survivor's annuities, according to the
32 same conditions and subject to the same limitations and
33 restrictions herein prescribed for a retirement annuity. If
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1 a participating system has no survivor's annuity benefit, or
2 if the survivor's annuity benefit under that system is
3 waived, pension credit established in that this system shall
4 not be considered in determining eligibility for or the
5 amount of the survivor's annuity which may be payable by any
6 other participating system.
7 For persons who participate in the self-managed plan
8 established under Section 15-158.2 or the portable benefit
9 package established under Section 15-136.4, pension credit
10 established under Article 15 may be considered in determining
11 eligibility for or the amount of the survivor's annuity that
12 is payable by any other participating system, but pension
13 credit established in any other system shall not result in
14 any right to a survivor's annuity under the Article 15
15 system.
16 (Source: P.A. 79-782.)
17 (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
18 Sec. 20-124. Maximum benefits. In no event shall the
19 combined retirement or survivors annuities exceed the highest
20 annuity which would have been payable by any participating
21 system in which the employee has pension credits, if all of
22 his pension credits had been validated in that system.
23 If the combined annuities should exceed the highest
24 maximum as determined in accordance with this Section, the
25 respective annuities shall be reduced proportionately
26 according to the ratio which the amount of each proportional
27 annuity bears to the aggregate of all such annuities.
28 In the case of a participant in the self-managed plan
29 established under Section 15-158.2 of this Code to whom the
30 provisions of this Article apply:
31 (i) For purposes of calculating the combined
32 retirement annuity and the proportionate reduction, if
33 any, in a retirement annuity other than one payable under
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1 the self-managed plan, the amount of the Article 15
2 retirement annuity shall be deemed to be the highest
3 annuity to which the annuitant would have been entitled
4 if he or she had participated in the traditional benefit
5 package as defined in Section 15-103.1 rather than the
6 self-managed plan.
7 (ii) For purposes of calculating the combined
8 survivor's annuity and the proportionate reduction, if
9 any, in a survivor's annuity other than one payable under
10 the self-managed plan, the amount of the Article 15
11 survivor's annuity shall be deemed to be the highest
12 survivor's annuity to which the survivor would have been
13 entitled if the deceased employee had participated in the
14 traditional benefit package as defined in Section
15 15-103.1 rather than the self-managed plan.
16 (iii) Benefits payable under the self-managed plan
17 are not subject to proportionate reduction under this
18 Section.
19 (Source: P.A. 79-782.)
20 (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
21 Sec. 20-125. Return to employment - suspension of
22 benefits. If a retired employee returns to employment which
23 is covered by a system from which he is receiving a
24 proportional annuity under this Article, his proportional
25 annuity from all participating systems shall be suspended
26 during the period of re-employment, except that this
27 suspension does not apply to any distributions payable under
28 the self-managed plan established under Section 15-158.2 of
29 this Code.
30 The provisions of the Article under which such employment
31 would be covered shall govern the determination of whether
32 the employee has returned to employment, and if applicable
33 the exemption of temporary employment or employment not
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1 exceeding a specified duration or frequency, for all
2 participating systems from which the retired employee is
3 receiving a proportional annuity under this Article,
4 notwithstanding any contrary provisions in the other Articles
5 governing such systems.
6 (Source: P.A. 85-1008.)
7 (40 ILCS 5/20-131) (from Ch. 108 1/2, par. 20-131)
8 Sec. 20-131. Retirement Annuities and Survivors
9 Annuities - Guarantees.
10 (a) This amendatory Act of 1975 (P.A. 79-782) shall not
11 be applied to deprive any person or his survivor of
12 eligibility for an annuity or to reduce the annuity or to
13 deprive such person of rights to which he or his survivor
14 would have been entitled under the provisions of Article 20
15 which were in effect immediately prior to September 5, 1975,
16 if he was an employee immediately prior to that date.
17 (b) If the combined retirement annuity benefits provided
18 under Public Act 79-782 are less than the combined retirement
19 annuity benefits that would have been payable under the
20 alternative formula of Section 20-122, the system under which
21 retirement would have occurred, as provided by Section
22 20-122, shall increase the proportional retirement annuity by
23 an amount equal to the difference.
24 (c) Subsection (b) of this Section does not apply to the
25 retirement annuity benefits payable under the self-managed
26 plan established under Section 15-158.2 of this Code.
27 (Source: P.A. 86-820.)
28 Section 99. Effective date. This Act takes effect upon
29 becoming law.".