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90_SB0498
40 ILCS 5/15-134 from Ch. 108 1/2, par. 15-134
40 ILCS 5/15-135 from Ch. 108 1/2, par. 15-135
40 ILCS 5/15-136 from Ch. 108 1/2, par. 15-136
40 ILCS 5/15-136.2 from Ch. 108 1/2, par. 15-136.2
40 ILCS 5/15-145 from Ch. 108 1/2, par. 15-145
40 ILCS 5/15-146 from Ch. 108 1/2, par. 15-146
40 ILCS 5/15-153.3 from Ch. 108 1/2, par. 15-153.3
Amends the State Universities Article of the Pension
Code. Provides a new flat rate retirement formula equal to
2.2% of the final rate of earnings for each year of service.
Increases the maximum retirement annuity from 75% to 80% of
the final rate of earnings. Extends the deadline for early
retirement without discount to September 1, 2002. Removes
the compensation limits for persons employed by more than one
employer. Changes the service requirement for retirement at
any age from 35 to 30 years. Allows a surviving spouse
without dependents to begin receiving survivor's benefits
before attaining age 50. Provides for a minimum survivor's
benefit based on the amount of service of the deceased
member. Extends the survivor's benefit for a dependent child
until age 23 if the child is a full-time student.
Accelerates the initial annual increase in disability
benefits. Effective immediately.
LRB9002320EGsb
LRB9002320EGsb
1 AN ACT to amend the Illinois Pension Code.
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
5 changing Sections 15-134, 15-135, 15-136, 15-136.2, 15-145,
6 15-146, and 15-153.3 as follows:
7 (40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)
8 Sec. 15-134. Participant.
9 (a) Each person shall, as a condition of employment,
10 become a participant and be subject to this Article on the
11 date that he or she becomes an employee.
12 An employee who becomes a participant shall continue to
13 be a participant until he or she becomes an annuitant, dies
14 or accepts a refund of contributions, except that a person
15 shall not be deemed a participant while participating in an
16 optional program for part-time workers established under
17 Section 15-158.1 or participating in an optional program for
18 employees established under Section 15-158.2.
19 (b) A person employed concurrently by 2 or more
20 employers is eligible to participate in the system on
21 compensation received from all employers; however, his or her
22 combined basic compensation and combined earnings shall not
23 exceed the basic compensation and earnings which would have
24 been payable for full-time employment by the employer under
25 which the employee's basic compensation is the highest.
26 However, effective for all employment on or after July 1,
27 1991, where a person is employed to render service to one
28 employer during an academic or summer term and is employed by
29 another employer to render service to it during the
30 succeeding, nonoverlapping academic or summer term, then
31 exclusively for the purposes of this Section, the person
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1 shall be considered to be successively employed by more than
2 one employer, rather than concurrently employed by 2 or more
3 employers.
4 (Source: P.A. 89-430, eff. 12-15-95.)
5 (40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
6 Sec. 15-135. Retirement annuities - Conditions. A
7 participant with 30 35 or more years of service is entitled
8 to a retirement annuity at any age.
9 A participant with 8 or more years of service after
10 September 1, 1941, is entitled to a retirement annuity on or
11 after attainment of age 55.
12 A participant with at least 5 but less than 8 years of
13 service after September 1, 1941, is entitled to a retirement
14 annuity on or after attainment of age 62.
15 A participant who has at least 25 years of service in
16 this system as a police officer or firefighter is entitled to
17 a retirement annuity on or after the attainment of age 50, if
18 Rule 4 of Section 15-136 is applicable to the participant.
19 The annuity payment period shall begin on the date
20 specified by the participant submitting a written
21 application, which date shall not be prior to termination of
22 employment or more than one year before the application is
23 received by the board; however, if the participant is not an
24 employee on April 1 following the attainment of age 70 1/2,
25 the annuity payment period shall begin on that date.
26 An annuity is not payable if the amount provided under
27 Section 15-136 is less than $10 per month.
28 (Source: P.A. 86-273.)
29 (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
30 Sec. 15-136. Retirement annuities - Amount.
31 (a) The amount of the retirement annuity shall be
32 determined by whichever of the following rules is applicable
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1 and provides the largest annuity:
2 Rule 1: The retirement annuity shall be 1.67% of final
3 rate of earnings for each of the first 10 years of service,
4 1.90% for each of the next 10 years of service, 2.10% for
5 each year of service in excess of 20 but not exceeding 30,
6 and 2.30% for each year in excess of 30; or for persons who
7 retire on or after the effective date of this amendatory Act
8 of 1997, 2.2% of the final rate of earnings for each year of
9 service.
10 Rule 2: The retirement annuity shall be the sum of the
11 following, determined from amounts credited to the
12 participant in accordance with the actuarial tables and the
13 prescribed rate of interest in effect at the time the
14 retirement annuity begins:
15 (i) The normal annuity which can be provided on an
16 actuarially actuarial equivalent basis, by the
17 accumulated normal contributions as of the date the
18 annuity begins; and
19 (ii) an annuity from employer contributions of an
20 amount which can be provided on an actuarially equivalent
21 basis from the accumulated normal contributions made by
22 the participant under Section 15-113.6 and Section
23 15-113.7 plus 1.4 times all other accumulated normal
24 contributions made by the participant.
25 Rule 3: The retirement annuity of a participant who is
26 employed at least one-half time during the period on which
27 his or her final rate of earnings is based, shall be equal to
28 the participant's years of service not to exceed 30,
29 multiplied by (1) $96 if the participant's final rate of
30 earnings is less than $3,500, (2) $108 if the final rate of
31 earnings is at least $3,500 but less than $4,500, (3) $120 if
32 the final rate of earnings is at least $4,500 but less than
33 $5,500, (4) $132 if the final rate of earnings is at least
34 $5,500 but less than $6,500, (5) $144 if the final rate of
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1 earnings is at least $6,500 but less than $7,500, (6) $156 if
2 the final rate of earnings is at least $7,500 but less than
3 $8,500, (7) $168 if the final rate of earnings is at least
4 $8,500 but less than $9,500, and (8) $180 if the final rate
5 of earnings is $9,500 or more.
6 Rule 4: A participant who is at least age 50 and has 25
7 or more years of service as a police officer or firefighter,
8 and a participant who is age 55 or over and has at least 20
9 but less than 25 years of service as a police officer or
10 firefighter, shall be entitled to a retirement annuity of 2
11 1/4% of the final rate of earnings for each of the first 10
12 years of service as a police officer or firefighter, 2 1/2%
13 for each of the next 10 years of service as a police officer
14 or firefighter, and 2 3/4% for each year of service as a
15 police officer or firefighter in excess of 20. The
16 retirement annuity for all other service shall be computed
17 under Rule 1.
18 (b) The retirement annuity provided under Rules 1 and 3
19 above shall be reduced by 1/2 of 1% for each month the
20 participant is under age 60 at the time of retirement.
21 However, this reduction shall not apply in the following
22 cases:
23 (1) For a disabled participant whose disability
24 benefits have been discontinued because he or she has
25 exhausted eligibility for disability benefits under
26 clause (6) (5) of Section 15-152;
27 (2) For a participant who has at least 35 years of
28 service; or
29 (3) For that portion of a retirement annuity which
30 has been provided on account of service of the
31 participant during periods when he or she performed the
32 duties of a police officer or firefighter, if these
33 duties were performed for at least 5 years immediately
34 preceding the date the retirement annuity is to begin.
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1 (c) The maximum retirement annuity provided under Rules
2 1, 2, and 4 shall be the lesser of (1) the annual limit of
3 benefits as specified in Section 415 of the Internal Revenue
4 Code of 1986, as such Section may be amended from time to
5 time and as such benefit limits shall be adjusted by the
6 Commissioner of Internal Revenue, and (2) 80% 75% of final
7 rate of earnings; however, this limitation of 75% of final
8 rate of earnings shall not apply to a person who is a
9 participant or annuitant on September 15, 1977 if it results
10 in a retirement annuity less than that which is payable to
11 the annuitant or which would have been payable to the
12 participant under the provisions of this Article in effect on
13 June 30, 1977.
14 (d) An annuitant whose status as an employee terminates
15 after August 14, 1969 shall receive automatic increases in
16 his or her retirement annuity as follows:
17 Effective January 1 immediately following the date the
18 retirement annuity begins, the annuitant shall receive an
19 increase in his or her monthly retirement annuity of 0.125%
20 of the monthly retirement annuity provided under Rule 1, Rule
21 2, Rule 3, or Rule 4, contained in this Section, multiplied
22 by the number of full months which elapsed from the date the
23 retirement annuity payments began to January 1, 1972, plus
24 0.1667% of such annuity, multiplied by the number of full
25 months which elapsed from January 1, 1972, or the date the
26 retirement annuity payments began, whichever is later, to
27 January 1, 1978, plus 0.25% of such annuity multiplied by the
28 number of full months which elapsed from January 1, 1978, or
29 the date the retirement annuity payments began, whichever is
30 later, to the effective date of the increase.
31 The annuitant shall receive an increase in his or her
32 monthly retirement annuity on each January 1 thereafter
33 during the annuitant's life of 3% of the monthly annuity
34 provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
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1 this Section. The change made under this subsection by P.A.
2 81-970 is effective January 1, 1980 and applies to each
3 annuitant whose status as an employee terminates before or
4 after that date.
5 Beginning January 1, 1990, all automatic annual increases
6 payable under this Section shall be calculated as a
7 percentage of the total annuity payable at the time of the
8 increase, including all increases previously granted under
9 this Article. The change made in this subsection by P.A.
10 85-1008 is effective January 26, 1988, and is applicable
11 without regard to whether status as an employee terminated
12 before that date.
13 (e) If, on January 1, 1987, or the date the retirement
14 annuity payment period begins, whichever is later, the sum of
15 the retirement annuity provided under Rule 1 or Rule 2 of
16 this Section and the automatic annual increases provided
17 under the preceding subsection or Section 15-136.1, amounts
18 to less than the retirement annuity which would be provided
19 by Rule 3, the retirement annuity shall be increased as of
20 January 1, 1987, or the date the retirement annuity payment
21 period begins, whichever is later, to the amount which would
22 be provided by Rule 3 of this Section. Such increased amount
23 shall be considered as the retirement annuity in determining
24 benefits provided under other Sections of this Article. This
25 paragraph applies without regard to whether status as an
26 employee terminated before the effective date of this
27 amendatory Act of 1987, provided that the annuitant was
28 employed at least one-half time during the period on which
29 the final rate of earnings was based.
30 (f) A participant is entitled to such additional annuity
31 as may be provided on an actuarial equivalent basis, by any
32 accumulated additional contributions to his or her credit.
33 However, the additional contributions made by the participant
34 toward the automatic increases in annuity provided under this
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1 Section shall not be taken into account in determining the
2 amount of such additional annuity.
3 (g) If, (1) by law, a function of a governmental unit,
4 as defined by Section 20-107 of this Code, is transferred in
5 whole or in part to an employer, and (2) a participant
6 transfers employment from such governmental unit to such
7 employer within 6 months after the transfer of the function,
8 and (3) the sum of (A) the annuity payable to the participant
9 under Rule 1, 2, or 3 of this Section (B) all proportional
10 annuities payable to the participant by all other retirement
11 systems covered by Article 20, and (C) the initial primary
12 insurance amount to which the participant is entitled under
13 the Social Security Act, is less than the retirement annuity
14 which would have been payable if all of the participant's
15 pension credits validated under Section 20-109 had been
16 validated under this system, a supplemental annuity equal to
17 the difference in such amounts shall be payable to the
18 participant.
19 (h) On January 1, 1981, an annuitant who was receiving a
20 retirement annuity on or before January 1, 1971 shall have
21 his or her retirement annuity then being paid increased $1
22 per month for each year of creditable service. On January 1,
23 1982, an annuitant whose retirement annuity began on or
24 before January 1, 1977, shall have his or her retirement
25 annuity then being paid increased $1 per month for each year
26 of creditable service.
27 (i) On January 1, 1987, any annuitant whose retirement
28 annuity began on or before January 1, 1977, shall have the
29 monthly retirement annuity increased by an amount equal to 8¢
30 per year of creditable service times the number of years that
31 have elapsed since the annuity began.
32 (Source: P.A. 86-272; 86-273; 86-1028; revised 5-17-96.)
33 (40 ILCS 5/15-136.2) (from Ch. 108 1/2, par. 15-136.2)
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1 Sec. 15-136.2. Early retirement without discount. A
2 participant whose retirement annuity begins after June 1,
3 1981 and on or before September 1, 2002 1997 and within six
4 months of the last day of employment for which retirement
5 contributions were required, may elect at the time of
6 application to make a one time employee contribution to the
7 System and thereby avoid the early retirement reduction in
8 retirement annuity specified under subsection (b) of Section
9 15-136. The exercise of the election shall obligate the last
10 employer to also make a one time non-refundable contribution
11 to the System.
12 The one time employee and employer contributions shall be
13 a percentage of the retiring participant's highest full time
14 annual salary rate during the academic years which were
15 considered in determining his or her final rate of earnings,
16 or if not full time then the full time equivalent. The
17 employee contribution rate shall be 7% multiplied by the
18 lesser of the following 2 sums: (1) the number of years that
19 the participant is less than age 60; or (2) the number of
20 years that the participant's creditable service is less than
21 35 years. The employer contribution shall be at the rate of
22 20% for each year the participant is less than age 60. The
23 employer shall pay the employer contribution from the same
24 source of funds which is used in paying earnings to
25 employees.
26 Upon receipt of the application and election, the System
27 shall determine the one time employee and employer
28 contributions. The provisions of this Section shall not be
29 applicable until all the above outlined contributions have
30 been received by the System; however, the date such
31 contributions are received shall not be considered in
32 determining the effective date of retirement.
33 For persons who apply to the Board after the effective
34 date of this amendatory Act of 1993 and before July 1, 1993,
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1 requesting a retirement annuity to begin no earlier than July
2 1, 1993 and no later than June 30, 1994, the employer shall
3 pay both the employee and employer contributions required
4 under this Section.
5 The number of employees retiring under this Section in
6 any fiscal year may be limited at the option of the employer
7 to no less than 15% of those eligible. The right to elect
8 early retirement without discount shall be allocated among
9 those applying on the basis of seniority in the service of
10 the last employer.
11 (Source: P.A. 87-794; 87-1265.)
12 (40 ILCS 5/15-145) (from Ch. 108 1/2, par. 15-145)
13 Sec. 15-145. Survivors insurance benefits; Conditions
14 and amounts.
15 (a) The survivors insurance benefits provided under this
16 Section shall be payable upon the death of (1) a
17 participating employee with at least 1 1/2 years of service,
18 (2) a participant who terminated employment with at least 10
19 years of service, and (3) an annuitant in receipt of a
20 retirement annuity or disability retirement annuity under
21 this Article.
22 Service under the State Employees' Retirement System of
23 Illinois, the Teachers' Retirement System of the State of
24 Illinois and the Public School Teacher's Pension and
25 Retirement Fund of Chicago shall be considered in determining
26 eligibility for survivors benefits under this Section.
27 If by law, a function of a governmental unit, as defined
28 by Section 20-107, is transferred in whole or in part to an
29 employer, and an employee transfers employment from this
30 governmental unit to such employer within 6 months after the
31 transfer of this function, the service credits in the
32 governmental unit's retirement system which have been
33 validated under Section 20-109 shall be considered in
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1 determining eligibility for survivors benefits under this
2 Section.
3 (b) A surviving spouse of a deceased participant, or of
4 a deceased annuitant who had a survivors insurance
5 beneficiary at the time of retirement, shall receive a
6 survivors annuity of 30% of the final rate of earnings.
7 Payments shall begin on the day following the participant's
8 or annuitant's death or the date the surviving spouse attains
9 age 50, whichever is later, and continue until the death of
10 the surviving spouse. The annuity shall be payable to the
11 surviving spouse prior to attainment of age 50 if the
12 surviving spouse has in his or her care a deceased
13 participant's or annuitant's dependent unmarried child under
14 age 18 who is eligible for a survivors annuity. Remarriage
15 of a surviving spouse prior to attainment of age 55 shall
16 disqualify him or her for the receipt of a survivors annuity.
17 (c) Each dependent unmarried child under age 18 (under
18 age 23 if a full-time student) of a deceased participant, or
19 of a deceased annuitant who had a survivors insurance
20 beneficiary at the time of his or her retirement, shall
21 receive a survivors annuity equal to the sum of (1) 20% of
22 the final rate of earnings, and (2) 10% of the final rate of
23 earnings divided by the number of children entitled to this
24 benefit. Payments shall begin on the day following the
25 participant's or annuitant's death and continue until the
26 child marries, dies or attains age 18 (age 23 if a full-time
27 student). If the child (under age 18) is in the care of a
28 surviving spouse who is eligible for survivors insurance
29 benefits, the child's benefit shall be paid to the surviving
30 spouse.
31 Each unmarried child over age 18 of a deceased
32 participant or of a deceased annuitant who had a survivor's
33 insurance beneficiary at the time of his or her retirement,
34 and who was dependent upon the participant or annuitant by
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1 reason of a physical or mental disability which began prior
2 to the date the child attained age 18, shall receive a
3 survivor's annuity equal to the sum of (1) 20% of the final
4 rate of earnings, and (2) 10% of the final rate of earnings
5 divided by the number of children entitled to survivors
6 benefits. Payments shall begin on the day following the
7 participant's or annuitant's death and continue until the
8 child marries, dies or is no longer disabled. If the child
9 is in the care of a surviving spouse who is eligible for
10 survivors insurance benefits, the child's benefit may be paid
11 to the surviving spouse. For the purposes of this Section,
12 disability means inability to engage in any substantial
13 gainful activity by reason of any medically determinable
14 physical or mental impairment that can be expected to result
15 in death or that has lasted or can be expected to last for a
16 continuous period of at least one year.
17 (d) Each dependent parent of a deceased participant, or
18 of a deceased annuitant who had a survivors insurance
19 beneficiary at the time of his or her retirement, shall
20 receive a survivors annuity equal to the sum of (1) 20% of
21 final rate of earnings, and (2) 10% of final rate of earnings
22 divided by the number of parents who qualify for the benefit.
23 Payments shall begin when the parent reaches age 55 or the
24 day following the participant's or annuitant's death,
25 whichever is later, and continue until the parent dies.
26 Remarriage of a parent prior to attainment of age 55 shall
27 disqualify the parent for the receipt of a survivors annuity.
28 (e) In addition to the survivors annuity provided above,
29 each survivors insurance beneficiary shall, upon death of the
30 participant or annuitant, receive a lump sum payment of
31 $1,000 divided by the number of such beneficiaries.
32 (f) The changes made in this Section by Public Act
33 81-712 pertaining to survivors annuities in cases of
34 remarriage prior to age 55 shall apply to each survivors
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1 insurance beneficiary who remarries after June 30, 1979,
2 regardless of the date that the participant or annuitant
3 terminated his employment or died.
4 (g) On January 1, 1981, any person who was receiving a
5 survivors annuity on or before January 1, 1971 shall have the
6 survivors annuity then being paid increased by 1% for each
7 full year which has elapsed from the date the annuity began.
8 On January 1, 1982, any survivor whose annuity began after
9 January 1, 1971, but before January 1, 1981, shall have the
10 survivor's annuity then being paid increased by 1% for each
11 year which has elapsed from the date the survivor's annuity
12 began. On January 1, 1987, any survivor who began receiving a
13 survivor's annuity on or before January 1, 1977, shall have
14 the monthly survivor's annuity increased by $1 for each full
15 year which has elapsed since the date the survivor's annuity
16 began.
17 (h) If the sum of the lump sum and total monthly
18 survivor benefits payable under this Section upon the death
19 of a participant amounts to less than the sum of the death
20 benefits payable under items (2) and (3) of Section 15-141,
21 the difference shall be paid in a lump sum to the beneficiary
22 of the participant who is living on the date that this
23 additional amount becomes payable.
24 (i) If the sum of the lump sum and total monthly
25 survivor benefits payable under this Section upon the death
26 of an annuitant receiving a retirement annuity or disability
27 retirement annuity amounts to less than the death benefit
28 payable under Section 15-142, the difference shall be paid to
29 the beneficiary of the annuitant who is living on the date
30 that this additional amount becomes payable.
31 (j) Effective on the later of (1) January 1, 1990, or
32 (2) the January 1 on or next after the date on which the
33 survivor annuity begins, if the deceased member died while
34 receiving a retirement annuity, or in all other cases the
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1 January 1 nearest the first anniversary of the date the
2 survivor annuity payments begin, every survivors insurance
3 beneficiary shall receive an increase in his or her monthly
4 survivors annuity of 3%. On each January 1 after the initial
5 increase, the monthly survivors annuity shall be increased by
6 3% of the total survivors annuity provided under this
7 Article, including previous increases provided by this
8 subsection. Such increases shall apply to the survivors
9 insurance beneficiaries of each participant and annuitant,
10 whether or not the employment status of the participant or
11 annuitant terminates before the effective date of this
12 amendatory Act of 1990.
13 (k) If the Internal Revenue Code of 1986, as amended,
14 requires that the survivors benefits be payable at an age
15 earlier than that specified in this Section the benefits
16 shall begin at the earlier age, in which event, the
17 survivor's beneficiary shall be entitled only to that amount
18 which is equal to the actuarial equivalent of the benefits
19 provided by this Section.
20 (Source: P.A. 86-272; 86-273; 86-1028; 86-1488.)
21 (40 ILCS 5/15-146) (from Ch. 108 1/2, par. 15-146)
22 Sec. 15-146. Survivors insurance benefits - Minimum
23 amounts. (a) The minimum total survivors annuity payable on
24 account of the death of a participant shall be 50% of the
25 retirement annuity which would have been provided under Rule
26 1, Rule 2, or Rule 3 of Section 15-136 upon the participant's
27 attainment of the minimum age at which the penalty for early
28 retirement would not be applicable or the date of the
29 participant's death, whichever is later, on the basis of
30 credits earned prior to the time of death.
31 (b) The minimum total survivors annuity payable on
32 account of the death of an annuitant shall be 50% of the
33 retirement annuity which is payable under Section 15-136 at
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1 the time of death or 50% of the disability retirement annuity
2 payable under Section 15-153.2. This minimum survivors
3 annuity shall apply to each participant and annuitant who
4 dies after September 16, 1979, whether or not his or her
5 employee status terminates before or after that date.
6 (c) If an annuitant has elected a reversionary annuity,
7 the retirement annuity referred to in this Section is that
8 which would have been payable had such election not been
9 filed.
10 (d) Beginning January 1, 1998, any person who is
11 receiving a survivors annuity under this Article which, after
12 inclusion of all one-time and automatic annual increases to
13 which the person is entitled, is less than the minimum
14 monthly survivors annuity amount specified in subsection (e)
15 of this Section, shall be entitled to a monthly supplemental
16 payment equal to the difference.
17 (e) For purposes of the calculation in subsection (d),
18 the minimum monthly survivors annuity amount is the sum of
19 $25 for each year of the deceased member's service credit, up
20 to a maximum of 30 years of service.
21 (Source: P.A. 83-1362; 83-1440.)
22 (40 ILCS 5/15-153.3) (from Ch. 108 1/2, par. 15-153.3)
23 Sec. 15-153.3. Automatic increase in disability benefit.
24 Each disability benefit payable under Section 15-150 and
25 calculated under Section 15-153 or 15-153.2 shall be
26 increased by 3% of the current amount of the benefit,
27 including prior increases under this Article, on January 1 of
28 each year 7% of the original fixed amount of such benefit on
29 January 1, 1991 or January 1 following the fourth anniversary
30 of the granting of the benefit, whichever occurs later. On
31 each January 1 following the 7% increase, the disability
32 benefit shall be increased by 3% of the current amount of the
33 benefit, including prior increases under this Article.
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1 (Source: P.A. 86-1488.)
2 Section 99. Effective date. This Act takes effect upon
3 becoming law.