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90_SB0665sam001
LRB9000602EGfgam01
1 AMENDMENT TO SENATE BILL 665
2 AMENDMENT NO. . Amend Senate Bill 665 by replacing
3 the title with the following:
4 "AN ACT in relation to public employee retirement
5 benefits."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 9. The State Salary and Annuity Withholding Act
9 is amended by changing Sections 2, 4, 8, and 9 as follows:
10 (5 ILCS 365/2) (from Ch. 127, par. 352)
11 Sec. 2. Definitions. As used in this Act, unless the
12 context otherwise requires:
13 "Office" means the State Comptroller, the Board of
14 Trustees of the State Universities Retirement System, or the
15 Board of Trustees of any of the following institutions: the
16 University of Illinois, the Board of Trustees of Southern
17 Illinois University, Chicago State University, Eastern
18 Illinois University, Governors State University, Illinois
19 State University, Northeastern Illinois University, Northern
20 Illinois University, and Western Illinois University the
21 Board of Governors of State Colleges and Universities and the
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1 universities and colleges under its jurisdiction and the
2 Board of Regents and the universities under its jurisdiction.
3 "Department" means any department, board, commission,
4 institution, officer, court, or any agency of the State
5 government, other than the University of Illinois, Southern
6 Illinois University, Chicago State University, Eastern
7 Illinois University, Governors State University, Illinois
8 State University, Northeastern Illinois University, Northern
9 Illinois University, and Western Illinois University,
10 receiving State appropriations and having the power to
11 certify payrolls to the Comptroller authorizing payments of
12 salary or wages from such appropriations from any State fund
13 or from trust funds held by the State Treasurer; and the
14 Board of Trustees of the General Assembly Retirement System,
15 the Board of Trustees of the State Employees' Retirement
16 System of Illinois, and the Board of Trustees of the Judges
17 Retirement System of Illinois created respectively by
18 Articles 2, 14, and 18 of the "Illinois Pension Code.",
19 approved March 18, 1963, as heretofore amended;
20 "Employee" means any regular officer or employee who
21 receives salary or wages for personal service rendered to the
22 State of Illinois and, for the purpose of deduction for the
23 purchase of United States Savings Bonds, includes any State
24 contractual employee.;
25 "Annuitant" means a person receiving a service retirement
26 annuity allowance or ordinary or accidental disability
27 benefits under Article 2, Article 14, 15, or Article 18 of
28 the "Illinois Pension Code.", approved March 18, 1963, as
29 heretofore and hereafter amended;
30 "Annuity" means the service retirement annuity allowance
31 or accidental disability benefits received by an annuitant.
32 (Source: P.A. 89-4, eff. 1-1-96; revised 2-7-97.)
33 (5 ILCS 365/4) (from Ch. 127, par. 354)
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1 Sec. 4. Authorization of withholding. An employee or
2 annuitant may authorize the withholding of a portion of his
3 salary, wages, or annuity for any one or more of the
4 following purposes:
5 (1) for purchase of United States Savings Bonds;
6 (2) for payment of premiums on life or accident and
7 health insurance as defined in Section 4 of the "Illinois
8 Insurance Code", approved June 29, 1937, as amended, and for
9 payment of premiums on policies of automobile insurance as
10 defined in Section 143.13 of the "Illinois Insurance Code",
11 as amended, and the personal multiperil coverages commonly
12 known as homeowner's insurance. However, no portion of
13 salaries, wages or annuities may be withheld to pay premiums
14 on automobile, homeowner's, life or accident and health
15 insurance policies issued by any one insurance company or
16 insurance service company unless a minimum of 100 employees
17 or annuitants insured by that company authorize the
18 withholding by an Office within 6 months after such
19 withholding begins. If such minimum is not satisfied the
20 Office may discontinue withholding for such company. For any
21 insurance company or insurance service company which has not
22 previously had withholding, the Office may allow withholding
23 for premiums, where less than 100 policies have been written,
24 to cover a probationary period. An insurance company which
25 has discontinued withholding may reinstate it upon
26 presentation of facts indicating new management or
27 re-organization satisfactory to the Office;
28 (3) for payment to any labor organization designated by
29 the employee;
30 (4) for payment of dues to any association the
31 membership of which consists of State employees and former
32 State employees;
33 (5) for deposit in any credit union, in which State
34 employees are within the field of membership as a result of
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1 their employment;
2 (6) for payment to or for the benefit of an institution
3 of higher education by an employee of that institution;
4 (7) for payment of parking fees at the underground
5 facility located south of the William G. Stratton State
6 Office Building in Springfield, the parking ramp located at
7 401 South College Street, west of the William G. Stratton
8 State Office Building in Springfield, or at the parking
9 facilities located on the Urbana-Champaign campus of the
10 University of Illinois;.
11 (8) for voluntary payment to the State of Illinois of
12 amounts then due and payable to the State;.
13 (9) for investment purchases made as a participant in
14 College Savings Programs established pursuant to Section
15 30-15.8a of the School Code;.
16 (10) for voluntary payment to the Illinois Department of
17 Revenue of amounts due or to become due under the Illinois
18 Income Tax Act;
19 (11) for payment of optional contributions to a
20 retirement system subject to the provisions of the Illinois
21 Pension Code.
22 (Source: P.A. 88-161.)
23 (5 ILCS 365/8) (from Ch. 127, par. 358)
24 Sec. 8. Payment of certain amounts withheld.
25 (a) If a withholding authorization is for the purpose of
26 payment of insurance premiums or for payment to a labor
27 union, each Office shall make payments, as soon as payroll
28 warrants are prepared and verified, on behalf of the employee
29 or annuitant to the payee named in the authorization the
30 amount specified in the authorization. Such payments shall
31 be made by warrants prepared at the time the payroll is
32 processed.
33 (b) If a withholding authorization is for the purpose of
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1 purchasing United States Savings Bonds, each Office, whenever
2 a sufficient sum has accumulated in the employee's account to
3 purchase a bond of the denomination directed by the employee
4 in his authorization, shall purchase such a United States
5 Savings Bond in the name designated by the employee and
6 deliver it to the employee.
7 (c) If a withholding authorization is for the purpose of
8 payment of parking fees pursuant to paragraph 7 of Section 4,
9 the State Comptroller shall deposit 80% of the amount
10 withheld in the Capital Development Bond Retirement and
11 Interest Fund in the State Treasury and 20% of the amount
12 withheld in the State Parking Facility Maintenance Fund in
13 the State Treasury.
14 (d) If a withholding authorization is for the purpose of
15 payment of amounts due or to become due under the Illinois
16 Income Tax Act, the Office shall pay the amounts withheld
17 without delay directly to the Department of Revenue or to a
18 depositary designated by the Department of Revenue.
19 (Source: P.A. 83-619.)
20 (5 ILCS 365/9) (from Ch. 127, par. 359)
21 Sec. 9. Any authorization to withhold from the salary,
22 wages or annuity of an employee or annuitant shall terminate
23 and such withholding shall cease upon the happening of any of
24 the following events:
25 (1) termination of employment or termination of payment
26 of an annuity, as the case may be;
27 (2) written notice by the employee or annuitant of
28 cancellation of such former authorization, except that an
29 authorization to withhold for the payment of optional
30 contributions to a retirement system through an employer
31 pickup is irrevocable;
32 (3) expiration of the time during which such withholding
33 was authorized;
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1 (4) when the total amount authorized to be withheld has
2 been so withheld.
3 Upon termination of authorization to purchase United
4 States Savings Bonds, any amount withheld from the salary or
5 wages of an employee for such purpose and which has not been
6 so used shall be immediately remitted by each Office to the
7 person from whose salary or wages such amount was withheld.
8 (Source: Laws 1965, p. 1244.)
9 Section 10. The Illinois Income Tax Act is amended by
10 changing Section 804 as follows:
11 (35 ILCS 5/804) (from Ch. 120, par. 8-804)
12 Sec. 804. Failure to Pay Estimated Tax.
13 (a) In general. In case of any underpayment of estimated
14 tax by a taxpayer, except as provided in subsection (d) or
15 (e), the taxpayer shall be liable to a penalty in an amount
16 determined at the rate prescribed by Section 3-3 of the
17 Uniform Penalty and Interest Act upon the amount of the
18 underpayment (determined under subsection (b)) for each
19 required installment.
20 (b) Amount of underpayment. For purposes of subsection
21 (a), the amount of the underpayment shall be the excess of:
22 (1) the amount of the installment which would be
23 required to be paid under subsection (c), over
24 (2) the amount, if any, of the installment paid on
25 or before the last date prescribed for payment.
26 (c) Amount of Required Installments.
27 (1) Amount.
28 (A) In General. Except as provided in
29 paragraph (2), the amount of any required
30 installment shall be 25% of the required annual
31 payment.
32 (B) Required Annual Payment. For purposes of
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1 subparagraph (A), the term "required annual payment"
2 means the lesser of
3 (i) 90% of the tax shown on the return
4 for the taxable year, or if no return is filed,
5 90% of the tax for such year, or
6 (ii) 100% of the tax shown on the return
7 of the taxpayer for the preceding taxable year
8 if a return showing a liability for tax was
9 filed by the taxpayer for the preceding taxable
10 year and such preceding year was a taxable year
11 of 12 months.
12 (2) Lower Required Installment where Annualized
13 Income Installment is Less Than Amount Determined Under
14 Paragraph (1).
15 (A) In General. In the case of any required
16 installment if a taxpayer establishes that the
17 annualized income installment is less than the
18 amount determined under paragraph (1),
19 (i) the amount of such required
20 installment shall be the annualized income
21 installment, and
22 (ii) any reduction in a required
23 installment resulting from the application of
24 this subparagraph shall be recaptured by
25 increasing the amount of the next required
26 installment determined under paragraph (1) by
27 the amount of such reduction, and by increasing
28 subsequent required installments to the extent
29 that the reduction has not previously been
30 recaptured under this clause.
31 (B) Determination of Annualized Income
32 Installment. In the case of any required
33 installment, the annualized income installment is
34 the excess, if any, of
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1 (i) an amount equal to the applicable
2 percentage of the tax for the taxable year
3 computed by placing on an annualized basis the
4 net income for months in the taxable year
5 ending before the due date for the installment,
6 over
7 (ii) the aggregate amount of any prior
8 required installments for the taxable year.
9 (C) Applicable Percentage.
10 In the case of the following The applicable
11 required installments: percentage is:
12 1st ............................... 22.5%
13 2nd ............................... 45%
14 3rd ............................... 67.5%
15 4th ............................... 90%
16 (D) Annualized Net Income; Individuals. For
17 individuals, net income shall be placed on an
18 annualized basis by:
19 (i) multiplying by 12, or in the case of
20 a taxable year of less than 12 months, by the
21 number of months in the taxable year, the net
22 income computed without regard to the standard
23 exemption for the months in the taxable year
24 ending before the month in which the
25 installment is required to be paid;
26 (ii) dividing the resulting amount by the
27 number of months in the taxable year ending
28 before the month in which such installment date
29 falls; and
30 (iii) deducting from such amount the
31 standard exemption allowable for the taxable
32 year, such standard exemption being determined
33 as of the last date prescribed for payment of
34 the installment.
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1 (E) Annualized Net Income; Corporations. For
2 corporations, net income shall be placed on an
3 annualized basis by multiplying by 12 the taxable
4 income
5 (i) for the first 3 months of the taxable
6 year, in the case of the installment required
7 to be paid in the 4th month,
8 (ii) for the first 3 months or for the
9 first 5 months of the taxable year, in the case
10 of the installment required to be paid in the
11 6th month,
12 (iii) for the first 6 months or for the
13 first 8 months of the taxable year, in the case
14 of the installment required to be paid in the
15 9th month, and
16 (iv) for the first 9 months or for the
17 first 11 months of the taxable year, in the
18 case of the installment required to be paid in
19 the 12th month of the taxable year,
20 then dividing the resulting amount by the number of
21 months in the taxable year (3, 5, 6, 8, 9, or 11 as
22 the case may be).
23 (d) Exceptions. Notwithstanding the provisions of the
24 preceding subsections, the penalty imposed by subsection (a)
25 shall not be imposed if the taxpayer was not required to file
26 an Illinois income tax return for the preceding taxable year,
27 or if the taxpayer has underpaid taxes solely because of the
28 increased rate in effect during the period from July 1, 1989
29 through December 1989, or, for individuals, if the taxpayer
30 had no tax liability for the preceding taxable year and such
31 year was a taxable year of 12 months.
32 (e) The penalty imposed for underpayment of estimated
33 tax by subsection (a) of this Section shall not be imposed to
34 the extent that the Department or his designate determines,
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1 pursuant to Section 3-8 of the Uniform Penalty and Interest
2 Act that the penalty should not be imposed.
3 (f) Definition of tax. For purposes of subsections (b)
4 and (c), the term "tax" means the excess of the tax imposed
5 under Article 2 of this Act, over the amounts credited
6 against such tax under Sections 601(b) (3) and (4).
7 (g) Application of Section in case of tax withheld on
8 compensation. For purposes of applying this Section in the
9 case of an individual, tax withheld under Article 7 for the
10 taxable year shall be deemed a payment of estimated tax, and
11 an equal part of such amount shall be deemed paid on each
12 installment date for such taxable year, unless the taxpayer
13 establishes the dates on which all amounts were actually
14 withheld, in which case the amounts so withheld shall be
15 deemed payments of estimated tax on the dates on which such
16 amounts were actually withheld.
17 (g-5) Amounts withheld under the State Salary and
18 Annuity Withholding Act. An individual who has amounts
19 withheld under paragraph (10) of Section 4 of the State
20 Salary and Annuity Withholding Act may elect to have those
21 amounts treated as payments of estimated tax made on the
22 dates on which those amounts are actually withheld.
23 (i) Short taxable year. The application of this Section
24 to taxable years of less than 12 months shall be in
25 accordance with regulations prescribed by the Department.
26 The changes in this Section made by Public Act 84-127
27 shall apply to taxable years ending on or after January 1,
28 1986.
29 (Source: P.A. 86-678; 86-953; 86-1028; 87-205.)
30 Section 15. The Illinois Pension Code is amended by
31 changing Sections 2-123, 2-126.1, 14-103.05, 14-108, 14-130,
32 14-133, 14-133.1, 15-157, 15-157.1, 15-185, 18-133.1, 21-103,
33 21-109, and 21-115 as follows:
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1 (40 ILCS 5/2-123) (from Ch. 108 1/2, par. 2-123)
2 Sec. 2-123. Refunds.
3 (a) A participant who ceases to be a member, other than
4 an annuitant, shall, upon written request, receive a refund
5 of his or her total contributions, without interest. The
6 refund shall include the additional contributions for the
7 automatic increase in retirement annuity. By accepting the
8 refund, a participant forfeits all accrued rights and
9 benefits in the System and loses credit for all service.
10 However, if he or she again becomes a member, he or she may
11 resume status as a participant and reestablish any forfeited
12 service credit by paying to the System the full amount
13 refunded, together with interest at 4% per annum from the
14 time the refund is paid to the date the member again becomes
15 a participant.
16 A former member of the General Assembly may reestablish
17 any service credit forfeited by acceptance of a refund by
18 paying to the System on or before February 1, 1993, the full
19 amount refunded, together with interest at 4% per annum from
20 the date of payment of the refund to the date of repayment.
21 When a member or former member owes money to the System,
22 interest at the rate of 4% per annum shall accrue and be
23 payable on such amounts owed beginning on the date of
24 termination of service as a member until the contributions
25 due have been paid in full.
26 (b) A participant who has no eligible survivor upon
27 becoming an annuitant or who terminates service with less
28 than 8 years of service is entitled to a refund of the
29 contributions for a survivor's annuity, without interest. If
30 such person later marries, a survivor's annuity shall not be
31 payable upon his or her death, unless the amount of such
32 refund is repaid to the System, together with interest at the
33 rate of 4% per year from the date of refund to the date of
34 repayment.
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1 (c) If at the date of retirement or death of a
2 participant who served as an officer of the General Assembly,
3 the total period of such service is less than 4 years, the
4 additional contributions made by such member on the
5 additional salary as an officer shall be refunded unless the
6 participant served as an officer for at least 2 years and has
7 contributed the amount he or she would have contributed if he
8 or she had served as an officer for 4 years as provided in
9 Section 2-126.
10 (d) Upon the termination of the last survivor's annuity
11 payable to a survivor of a deceased participant, the excess,
12 if any, of the total contributions made by the participant
13 for retirement and survivor's annuity, without interest, over
14 the total amount of retirement and survivor's annuity
15 payments received by the participant and the participant's
16 survivors shall be refunded upon request:
17 (i) if there was a surviving spouse of the deceased
18 participant who was eligible for a survivor's annuity, to
19 the designated beneficiary of that spouse or, if the
20 designated beneficiary is deceased or there is no
21 designated beneficiary, to that spouse's estate;
22 (ii) if there was no eligible surviving spouse of
23 the deceased participant, to the designated beneficiary
24 of the deceased participant or, if the designated
25 beneficiary is deceased or there is no designated
26 beneficiary, to the deceased participant's estate.
27 Upon death of the last survivor of a participant and his
28 or her spouse, a death benefit shall be payable consisting of
29 the excess, if any, of the contributions made by the
30 participant for retirement and survivor's annuity, without
31 interest, over the total amount of retirement and survivor's
32 annuity payments made by the System.
33 (e) Upon the death of a participant, if a survivor's
34 annuity is not payable under this Article, a beneficiary
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1 designated by the participant shall be entitled to a refund
2 of all contributions made by the participant. If the
3 participant has not designated a refund beneficiary, the
4 surviving spouse shall be entitled to the refund of
5 contributions; if there is no surviving spouse, the
6 contributions shall be refunded to the participant's
7 surviving children, if any, and if no children survive, the
8 refund payment shall be made to the participant's estate.
9 (Source: P.A. 86-273; 87-1265.)
10 (40 ILCS 5/2-126.1) (from Ch. 108 1/2, par. 2-126.1)
11 Sec. 2-126.1. Pickup Pick up of contributions.
12 (a) The State shall pick up the participant
13 contributions required under Section 2-126 for all salary
14 earned after December 31, 1981. The contributions so picked
15 up shall be treated as employer contributions in determining
16 tax treatment under the United States Internal Revenue Code.
17 The State shall pay these participant contributions from the
18 same source of funds which is used in paying salary to the
19 participant. The State may pick up these contributions by a
20 reduction in the cash salary of the participant. If
21 participant contributions are picked up they shall be treated
22 for all purposes of this Article 2 in the same manner as
23 participant contributions that were made prior to the date
24 that the pick up of contributions began.
25 (b) Subject to the requirements of federal law, a
26 participant may elect to have the employer pick up optional
27 contributions that the participant has elected to pay to the
28 System, and the contributions so picked up shall be treated
29 as employer contributions for the purposes of determining
30 federal tax treatment. The employer shall pick up the
31 contributions by a reduction in the cash salary of the
32 participant and shall pay the contributions from the same
33 fund that is used to pay earnings to the participant. The
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1 election to have optional contributions picked up is
2 irrevocable and the optional contributions may not thereafter
3 be prepaid, by direct payment or otherwise.
4 (Source: P.A. 83-1440.)
5 (40 ILCS 5/14-103.05) (from Ch. 108 1/2, par. 14-103.05)
6 Sec. 14-103.05. Employee. Any person employed by a
7 Department who receives salary for personal services rendered
8 to the Department on a warrant issued pursuant to a payroll
9 voucher certified by a Department and drawn by the State
10 Comptroller upon the State Treasurer, including an elected
11 official described in subparagraph (d) of Section 14-104,
12 shall become an employee for purpose of membership in the
13 Retirement System on the first day of such employment.
14 A person entering service on or after January 1, 1972 and
15 prior to January 1, 1984 shall become a member as a condition
16 of employment and shall begin making contributions as of the
17 first day of employment.
18 A person entering service on or after January 1, 1984
19 shall, upon completion of 6 months of continuous service
20 which is not interrupted by a break of more than 2 months,
21 become a member as a condition of employment. Contributions
22 shall begin the first of the month after completion of the
23 qualifying period.
24 The qualifying period of 6 months of service is not
25 applicable to: (1) a person who has been granted credit for
26 service in a position covered by the State Universities
27 Retirement System, the Teachers' Retirement System of the
28 State of Illinois, the General Assembly Retirement System, or
29 the Judges Retirement System of Illinois unless that service
30 has been forfeited under the laws of those systems; (2) a
31 person entering service on or after July 1, 1991 in a
32 noncovered position; or (3) a person to whom Section
33 14-108.2a or 14-108.2b applies.
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1 The term "employee" does not include the following:
2 (1) members of the State Legislature, and persons
3 electing to become members of the General Assembly
4 Retirement System pursuant to Section 2-105;
5 (2) incumbents of offices normally filled by vote
6 of the people;
7 (3) except as otherwise provided in this Section,
8 any person appointed by the Governor with the advice and
9 consent of the Senate unless that person elects to
10 participate in this system;
11 (4) except as provided in Section 14-108.2, any
12 person who is covered or eligible to be covered by the
13 Teachers' Retirement System of the State of Illinois, the
14 State Universities Retirement System, or the Judges
15 Retirement System of Illinois;
16 (5) an employee of a municipality or any other
17 political subdivision of the State;
18 (6) any person who becomes an employee after June
19 30, 1979 as a public service employment program
20 participant under the Federal Comprehensive Employment
21 and Training Act and whose wages or fringe benefits are
22 paid in whole or in part by funds provided under such
23 Act;
24 (7) enrollees of the Illinois Young Adult
25 Conservation Corps program, administered by the
26 Department of Natural Resources, authorized grantee
27 pursuant to Title VIII of the "Comprehensive Employment
28 and Training Act of 1973", 29 USC 993, as now or
29 hereafter amended;
30 (8) enrollees and temporary staff of programs
31 administered by the Department of Natural Resources under
32 the Youth Conservation Corps Act of 1970;
33 (9) any person who is a member of any professional
34 licensing or disciplinary board created under an Act
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1 administered by the Department of Professional Regulation
2 or a successor agency or created or re-created after the
3 effective date of this amendatory Act of 1997, and who
4 receives per diem compensation rather than a salary,
5 notwithstanding that such per diem compensation is paid
6 by warrant issued pursuant to a payroll voucher; such
7 persons have never been included in the membership of
8 this System, and this amendatory Act of 1987 (P.A.
9 84-1472) is not intended to effect any change in the
10 status of such persons;
11 (10) any person who is a member of the Illinois
12 Health Care Cost Containment Council, and receives per
13 diem compensation rather than a salary, notwithstanding
14 that such per diem compensation is paid by warrant issued
15 pursuant to a payroll voucher; such persons have never
16 been included in the membership of this System, and this
17 amendatory Act of 1987 is not intended to effect any
18 change in the status of such persons; or
19 (11) any person who is a member of the Oil and Gas
20 Board created by Section 1.2 of the Illinois Oil and Gas
21 Act, and receives per diem compensation rather than a
22 salary, notwithstanding that such per diem compensation
23 is paid by warrant issued pursuant to a payroll voucher.
24 (Source: P.A. 88-535; 89-246; eff. 8-4-95; 89-445, eff.
25 2-7-96.)
26 (40 ILCS 5/14-108) (from Ch. 108 1/2, par. 14-108)
27 (Text of Section before amendment by P.A. 89-507)
28 Sec. 14-108. Amount of retirement annuity. A member who
29 has contributed to the System for at least 12 months, shall
30 be entitled to a prior service annuity for each year of
31 certified prior service credited to him, except that a member
32 shall receive 1/3 of the prior service annuity for each year
33 of service for which contributions have been made and all of
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1 such annuity shall be payable after the member has made
2 contributions for a period of 3 years. Proportionate amounts
3 shall be payable for service of less than a full year after
4 completion of at least 12 months.
5 The total period of service to be considered in
6 establishing the measure of prior service annuity shall
7 include service credited in the Teachers' Retirement System
8 of the State of Illinois and the State Universities
9 Retirement System for which contributions have been made by
10 the member to such systems; provided that at least 1 year of
11 the total period of 3 years prescribed for the allowance of a
12 full measure of prior service annuity shall consist of
13 membership service in this system for which credit has been
14 granted.
15 (a) In the case of a member who is a noncovered
16 employee, the retirement annuity for membership service and
17 prior service shall be 1.67% of final average compensation
18 for each of the first 10 years of service; 1.90% for each of
19 the next 10 years of service; 2.10% for each year of service
20 in excess of 20 but not exceeding 30; and 2.30% for each year
21 in excess of 30. Any service credit established as a covered
22 employee shall be considered in determining the applicable
23 percentages and computed as stated in paragraph (b).
24 (b) In the case of a covered employee, the retirement
25 annuity for membership service and prior service shall be
26 computed as stated in paragraph (a) for all service credit
27 established as a noncovered employee; for service credit
28 established as a covered employee it shall be 1% for each of
29 the first 10 years of service; 1.10% for each of the next 10
30 years of service; 1.30% for each year of service in excess of
31 20 but not exceeding 30; and 1.50% for each year of service
32 in excess of 30. Any service credit established as a
33 noncovered employee shall be considered in determining the
34 applicable percentages.
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1 (c) For a member with 30 but less than 35 years of
2 creditable service retiring after attaining age 55 but before
3 age 60, the retirement annuity shall be reduced by 1/2 of 1%
4 for each month that the member's age is under age 60 at the
5 time of retirement.
6 (d) A retirement annuity shall not exceed 75% of final
7 average compensation, subject to such extension as may result
8 from the application of Section 14-114 or Section 14-115.
9 (e) The retirement annuity payable to any covered
10 employee who is a member of the System and in service on
11 January 1, 1969, or in service thereafter in 1969 as a result
12 of legislation enacted by the Illinois General Assembly
13 transferring the member to State employment from county
14 employment in a county Department of Public Aid in counties
15 of 3,000,000 or more population, under a plan of coordination
16 with the Old Age, Survivors and Disability provisions
17 thereof, if not fully insured for Old Age Insurance payments
18 under the Federal Old Age, Survivors and Disability Insurance
19 provisions at the date of acceptance of a retirement annuity,
20 shall not be less than the amount for which the member would
21 have been eligible if coordination were not applicable.
22 (f) The retirement annuity payable to any covered
23 employee who is a member of the System and in service on
24 January 1, 1969, or in service thereafter in 1969 as a result
25 of the legislation designated in the immediately preceding
26 paragraph, if fully insured for Old Age Insurance payments
27 under the Federal Social Security Act at the date of
28 acceptance of a retirement annuity, shall not be less than an
29 amount which when added to the Primary Insurance Benefit
30 payable to the member upon attainment of age 65 under such
31 Federal Act, will equal the annuity which would otherwise be
32 payable if the coordinated plan of coverage were not
33 applicable.
34 (g) In the case of a member who is a noncovered
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1 employee, the retirement annuity for membership service as a
2 full-time security employee of the Department of Corrections
3 or security employee of the Department of Mental Health and
4 Developmental Disabilities shall be 1.9% of final average
5 compensation for each of the first 10 years of service; 2.1%
6 for each of the next 10 years of service; 2.25% for each year
7 of service in excess of 20 but not exceeding 30; and 2.5% for
8 each year in excess of 30.
9 (h) In the case of a covered employee, the retirement
10 annuity for membership service as a full-time security
11 employee of the Department of Corrections or security
12 employee of the Department of Mental Health and Developmental
13 Disabilities shall be 1.67% of final average compensation for
14 each of the first 10 years of service; 1.90% for each of the
15 next 10 years of service; 2.10% for each year of service in
16 excess of 20 but not exceeding 30; and 2.30% for each year in
17 excess of 30.
18 (i) For the purposes of this Section and Section 14-133
19 of this Act, the term "security employee of the Department of
20 Corrections" and the term "security employee of the
21 Department of Mental Health and Developmental Disabilities"
22 shall have the meanings ascribed to them in subsection (c) of
23 Section 14-110.
24 (j) The retirement annuity computed pursuant to
25 paragraphs (g) or (h) shall be applicable only to those
26 security employees of the Department of Corrections and
27 security employees of the Department of Mental Health and
28 Developmental Disabilities who have at least 20 years of
29 membership service and who are not eligible for the
30 alternative retirement annuity provided under Section 14-110.
31 However, persons transferring to this System under Section
32 14-108.2 who have service credit under Article 16 of this
33 Code may count such service toward establishing their
34 eligibility under the 20-year service requirement of this
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1 subsection; but such service may be used only for
2 establishing such eligibility, and not for the purpose of
3 increasing or calculating any benefit.
4 (k) In the case of a member who has at least 10 years of
5 creditable service as a court reporter, the retirement
6 annuity for service as a court reporter shall be 2.2% of
7 final average compensation for each year of such service as a
8 noncovered employee, and 1.5% of final average compensation
9 for each year of such service as a covered employee.
10 (Source: P.A. 86-272; 86-273; 86-1028.)
11 (Text of Section after amendment by P.A. 89-507)
12 Sec. 14-108. Amount of retirement annuity. A member who
13 has contributed to the System for at least 12 months, shall
14 be entitled to a prior service annuity for each year of
15 certified prior service credited to him, except that a member
16 shall receive 1/3 of the prior service annuity for each year
17 of service for which contributions have been made and all of
18 such annuity shall be payable after the member has made
19 contributions for a period of 3 years. Proportionate amounts
20 shall be payable for service of less than a full year after
21 completion of at least 12 months.
22 The total period of service to be considered in
23 establishing the measure of prior service annuity shall
24 include service credited in the Teachers' Retirement System
25 of the State of Illinois and the State Universities
26 Retirement System for which contributions have been made by
27 the member to such systems; provided that at least 1 year of
28 the total period of 3 years prescribed for the allowance of a
29 full measure of prior service annuity shall consist of
30 membership service in this system for which credit has been
31 granted.
32 (a) In the case of a member who is a noncovered
33 employee, the retirement annuity for membership service and
34 prior service shall be 1.67% of final average compensation
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1 for each of the first 10 years of service; 1.90% for each of
2 the next 10 years of service; 2.10% for each year of service
3 in excess of 20 but not exceeding 30; and 2.30% for each year
4 in excess of 30. Any service credit established as a covered
5 employee shall be considered in determining the applicable
6 percentages and computed as stated in paragraph (b).
7 (b) In the case of a covered employee, the retirement
8 annuity for membership service and prior service shall be
9 computed as stated in paragraph (a) for all service credit
10 established as a noncovered employee; for service credit
11 established as a covered employee it shall be 1% for each of
12 the first 10 years of service; 1.10% for each of the next 10
13 years of service; 1.30% for each year of service in excess of
14 20 but not exceeding 30; and 1.50% for each year of service
15 in excess of 30. Any service credit established as a
16 noncovered employee shall be considered in determining the
17 applicable percentages.
18 (c) For a member with 30 but less than 35 years of
19 creditable service retiring after attaining age 55 but before
20 age 60, the retirement annuity shall be reduced by 1/2 of 1%
21 for each month that the member's age is under age 60 at the
22 time of retirement.
23 (d) A retirement annuity shall not exceed 75% of final
24 average compensation, subject to such extension as may result
25 from the application of Section 14-114 or Section 14-115.
26 (e) The retirement annuity payable to any covered
27 employee who is a member of the System and in service on
28 January 1, 1969, or in service thereafter in 1969 as a result
29 of legislation enacted by the Illinois General Assembly
30 transferring the member to State employment from county
31 employment in a county Department of Public Aid in counties
32 of 3,000,000 or more population, under a plan of coordination
33 with the Old Age, Survivors and Disability provisions
34 thereof, if not fully insured for Old Age Insurance payments
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1 under the Federal Old Age, Survivors and Disability Insurance
2 provisions at the date of acceptance of a retirement annuity,
3 shall not be less than the amount for which the member would
4 have been eligible if coordination were not applicable.
5 (f) The retirement annuity payable to any covered
6 employee who is a member of the System and in service on
7 January 1, 1969, or in service thereafter in 1969 as a result
8 of the legislation designated in the immediately preceding
9 paragraph, if fully insured for Old Age Insurance payments
10 under the Federal Social Security Act at the date of
11 acceptance of a retirement annuity, shall not be less than an
12 amount which when added to the Primary Insurance Benefit
13 payable to the member upon attainment of age 65 under such
14 Federal Act, will equal the annuity which would otherwise be
15 payable if the coordinated plan of coverage were not
16 applicable.
17 (g) In the case of a member who is a noncovered
18 employee, the retirement annuity for membership service as a
19 full-time security employee of the Department of Corrections
20 or security employee of the Department of Human Services
21 shall be 1.9% of final average compensation for each of the
22 first 10 years of service; 2.1% for each of the next 10 years
23 of service; 2.25% for each year of service in excess of 20
24 but not exceeding 30; and 2.5% for each year in excess of 30.
25 (h) In the case of a covered employee, the retirement
26 annuity for membership service as a full-time security
27 employee of the Department of Corrections or security
28 employee of the Department of Human Services shall be 1.67%
29 of final average compensation for each of the first 10 years
30 of service; 1.90% for each of the next 10 years of service;
31 2.10% for each year of service in excess of 20 but not
32 exceeding 30; and 2.30% for each year in excess of 30.
33 (i) For the purposes of this Section and Section 14-133
34 of this Act, the term "security employee of the Department of
-23- LRB9000602EGfgam01
1 Corrections" and the term "security employee of the
2 Department of Human Services" shall have the meanings
3 ascribed to them in subsection (c) of Section 14-110.
4 (j) The retirement annuity computed pursuant to
5 paragraphs (g) or (h) shall be applicable only to those
6 security employees of the Department of Corrections and
7 security employees of the Department of Human Services who
8 have at least 20 years of membership service and who are not
9 eligible for the alternative retirement annuity provided
10 under Section 14-110. However, persons transferring to this
11 System under Section 14-108.2 who have service credit under
12 Article 16 of this Code may count such service toward
13 establishing their eligibility under the 20-year service
14 requirement of this subsection; but such service may be used
15 only for establishing such eligibility, and not for the
16 purpose of increasing or calculating any benefit.
17 (k) In the case of a member who has at least 10 years of
18 creditable service as a court reporter, the retirement
19 annuity for service as a court reporter shall be 2.2% of
20 final average compensation for each year of such service as a
21 noncovered employee, and 1.5% of final average compensation
22 for each year of such service as a covered employee.
23 (Source: P.A. 89-507, eff. 7-1-97.)
24 (40 ILCS 5/14-130) (from Ch. 108 1/2, par. 14-130)
25 Sec. 14-130. Refunds; rules.
26 (a) Upon withdrawal a member is entitled to receive,
27 upon written request, a refund of the member's contributions,
28 including credits granted while in receipt of disability
29 benefits, without credited interest. The board, in its
30 discretion may withhold payment of the refund of a member's
31 contributions for a period not to exceed 1 year after the
32 member has ceased to be an employee.
33 For purposes of this Section, a member will be considered
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1 to have withdrawn from service if a change in, or transfer
2 of, his position results in his becoming ineligible for
3 continued membership in this System and eligible for
4 membership in another public retirement system under this
5 Act.
6 (b) A member receiving a refund forfeits and
7 relinquishes all accrued rights in the System, including all
8 accumulated creditable service. If the person again becomes
9 a member of the System and establishes at least 2 years of
10 creditable service, the member may repay the moneys
11 previously refunded. However, a former member may restore
12 credits previously forfeited by acceptance of a refund
13 without returning to service by applying in writing and
14 repaying to the System, by April 1, 1993, the amount of the
15 refund plus regular interest calculated from the date of
16 refund to the date of repayment.
17 The repayment of refunds issued prior to January 1, 1984
18 shall consist of the amount refunded plus 5% interest per
19 annum compounded annually for the period from the date of the
20 refund to the end of the month in which repayment is made.
21 The repayment of refunds issued after January 1, 1984 shall
22 consist of the amount refunded plus regular interest for the
23 period from the date of refund to the end of the month in
24 which repayment is made. However, in the case of a refund
25 that is repaid in a lump sum between January 1, 1991 and July
26 1, 1991, repayment shall consist of the amount refunded plus
27 interest at the rate of 2.5% per annum compounded annually
28 from the date of the refund to the end of the month in which
29 repayment is made.
30 Upon repayment, the member shall receive credit for the
31 service, member contributions and regular interest that was
32 forfeited by acceptance of the refund as well as regular
33 interest for the period of non-membership. Such repayment
34 shall be made in full before retirement either in a lump sum
-25- LRB9000602EGfgam01
1 or in installment payments in accordance with such rules as
2 may be adopted by the board.
3 (b-5) The Board may adopt rules governing the repayment
4 of refunds and establishment of credits in cases involving
5 awards of back pay or reinstatement. The rules may authorize
6 repayment of a refund in installment payments and may waive
7 the payment of interest on refund amounts repaid in full
8 within a specified period.
9 (c) A member who is unmarried on the date of retirement
10 or who does not have an eligible survivors annuity
11 beneficiary at that date is entitled to a refund of
12 contributions for widow's annuity or survivors annuity
13 purposes, or both, as the case may be, without interest.
14 (d) Any member who has service credit in any position
15 for which an alternative retirement annuity is provided and
16 in relation to which an increase in the rate of employee
17 contribution is required, shall be entitled to a refund,
18 without interest, of that part of the member's employee
19 contribution which results from that increase in the employee
20 rate if the member does not qualify for that alternative
21 retirement annuity at the time of retirement.
22 (Source: P.A. 86-1488; 87-1265.)
23 (40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
24 (Text of Section before amendment by P.A. 89-507)
25 Sec. 14-133. Contributions on behalf of members.
26 (a) Each participating employee shall make contributions
27 to the System, based on the employee's compensation, as
28 follows:
29 (1) Covered employees, except as indicated below,
30 3.5% 3 1/2% for retirement annuity, and 0.5% 1/2 of 1%
31 for a widow or survivors annuity;
32 (2) Noncovered employees, except as indicated
33 below, 7% for retirement annuity and 1% for a widow or
-26- LRB9000602EGfgam01
1 survivors annuity;
2 (3) Noncovered employees serving in a position in
3 which "eligible creditable service" as defined in Section
4 14-110 may be earned, 8.5% 8 1/2% for retirement annuity
5 and 1% for a widow or survivors annuity;
6 (4) Covered employees serving in a position in
7 which "eligible creditable service" as defined in Section
8 14-110 may be earned, 5% for retirement annuity and 0.5%
9 for a widow or survivors annuity;
10 (5) Each full-time security employee of the
11 Department of Corrections or of the Department of Mental
12 Health and Developmental Disabilities who is a covered
13 employee, 5% for retirement annuity and 0.5% 1/2 of 1%
14 for a widow or survivors annuity;
15 (6) Each full-time security employee of the
16 Department of Corrections or of the Department of Mental
17 Health and Developmental Disabilities who is not a
18 covered employee, 8.5% 8 1/2% for retirement annuity and
19 1% for a widow or survivors annuity.
20 (b) Contributions shall be in the form of a deduction
21 from compensation and shall be made notwithstanding that the
22 compensation paid in cash to the employee shall be reduced
23 thereby below the minimum prescribed by law or regulation.
24 Each member is deemed to consent and agree to the deductions
25 from compensation provided for in this Article, and shall
26 receipt in full for salary or compensation.
27 (Source: P.A. 86-273.)
28 (Text of Section after amendment by P.A. 89-507)
29 Sec. 14-133. Contributions on behalf of members.
30 (a) Each participating employee shall make contributions
31 to the System, based on the employee's compensation, as
32 follows:
33 (1) Covered employees, except as indicated below,
34 3.5% 3 1/2% for retirement annuity, and 0.5% 1/2 of 1%
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1 for a widow or survivors annuity;
2 (2) Noncovered employees, except as indicated
3 below, 7% for retirement annuity and 1% for a widow or
4 survivors annuity;
5 (3) Noncovered employees serving in a position in
6 which "eligible creditable service" as defined in Section
7 14-110 may be earned, 8.5% 8 1/2% for retirement annuity
8 and 1% for a widow or survivors annuity;
9 (4) Covered employees serving in a position in
10 which "eligible creditable service" as defined in Section
11 14-110 may be earned, 5% for retirement annuity and 0.5%
12 for a widow or survivors annuity;
13 (5) Each full-time security employee of the
14 Department of Corrections or of the Department of Human
15 Services who is a covered employee, 5% for retirement
16 annuity and 0.5% 1/2 of 1% for a widow or survivors
17 annuity;
18 (6) Each full-time security employee of the
19 Department of Corrections or of the Department of Human
20 Services who is not a covered employee, 8.5% 8 1/2% for
21 retirement annuity and 1% for a widow or survivors
22 annuity.
23 (b) Contributions shall be in the form of a deduction
24 from compensation and shall be made notwithstanding that the
25 compensation paid in cash to the employee shall be reduced
26 thereby below the minimum prescribed by law or regulation.
27 Each member is deemed to consent and agree to the deductions
28 from compensation provided for in this Article, and shall
29 receipt in full for salary or compensation.
30 (Source: P.A. 89-507, eff. 7-1-97.)
31 (40 ILCS 5/14-133.1) (from Ch. 108 1/2, par. 14-133.1)
32 Sec. 14-133.1. Pickup of contributions.
33 (a) Each department shall pick up the employee
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1 contributions required by Section 14-133 for all compensation
2 earned after December 31, 1981, and the contributions so
3 picked up shall be treated as employer contributions in
4 determining tax treatment under the United States Internal
5 Revenue Code; however, each department shall continue to
6 withhold federal and State income taxes based upon these
7 contributions until the Internal Revenue Service or the
8 federal courts rule that pursuant to Section 414(h) of the
9 United States Internal Revenue Code, these contributions
10 shall not be included as gross income of the employee until
11 such time as they are distributed or made available.
12 The department shall pay these employee contributions
13 from the same fund which is used in paying earnings to the
14 employee. The department may pick up these contributions by
15 a reduction in the cash salary of the employee or by an
16 offset against a future salary increase or by a combination
17 of a reduction in salary and offset against a future salary
18 increase. If employee contributions are picked up they shall
19 be treated for all purposes of this Article 14 in the same
20 manner and to the same extent as employee contributions made
21 prior to the date picked up.
22 (b) Subject to the requirements of federal law, an
23 employee of a department may elect to have the department
24 pick up optional contributions that the employee has elected
25 to pay to the System, and the contributions so picked up
26 shall be treated as employer contributions for the purposes
27 of determining federal tax treatment. The department shall
28 pick up the contributions by a reduction in the cash salary
29 of the employee and shall pay the contributions from the same
30 fund that is used to pay earnings to the employee. The
31 election to have optional contributions picked up is
32 irrevocable and the optional contributions may not thereafter
33 be prepaid, by direct payment or otherwise.
34 (Source: P.A. 87-14.)
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1 (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
2 Sec. 15-157. Employee Contributions.
3 (a) Each participating employee shall make contributions
4 towards the retirement annuity of each payment of earnings
5 applicable to employment under this system on and after the
6 date of becoming a participant as follows: Prior to
7 September 1, 1949, 3 1/2% of earnings; from September 1, 1949
8 to August 31, 1955, 5%; from September 1, 1955 to August 31,
9 1969, 6%; from September 1, 1969, 6 1/2%. These
10 contributions are to be considered as normal contributions
11 for purposes of this Article.
12 Each participant who is a police officer or firefighter
13 shall make normal contributions of 8% of each payment of
14 earnings applicable to employment as a police officer or
15 firefighter under this system on or after September 1, 1981,
16 unless he or she files with the board within 60 days after
17 the effective date of this amendatory Act of 1991 or 60 days
18 after the board receives notice that he or she is employed as
19 a police officer or firefighter, whichever is later, a
20 written notice waiving the retirement formula provided by
21 Rule 4 of Section 15-136. This waiver shall be irrevocable.
22 If a participant had met the conditions set forth in Section
23 15-132.1 prior to the effective date of this amendatory Act
24 of 1991 but failed to make the additional normal
25 contributions required by this paragraph, he or she may elect
26 to pay the additional contributions plus compound interest at
27 the effective rate. If such payment is received by the
28 board, the service shall be considered as police officer
29 service in calculating the retirement annuity under Rule 4 of
30 Section 15-136.
31 (b) Starting September 1, 1969, each participating
32 employee shall make additional contributions of 1/2 of 1% of
33 earnings to finance a portion of the cost of the annual
34 increases in retirement annuity provided under Section
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1 15-136.
2 (c) Each participating employee shall make survivors
3 insurance contributions of 1% of earnings applicable under
4 this system on and after August 1, 1959. Contributions in
5 excess of $80 during any fiscal year beginning August 31,
6 1969 and in excess of $120 during any fiscal year thereafter
7 until September 1, 1971 shall be considered as additional
8 contributions for purposes of this Article.
9 (d) If the board by board rule so permits and subject to
10 such conditions and limitations as may be specified in its
11 rules, a participant may make other additional contributions
12 of such percentage of earnings or amounts as the participant
13 shall elect in a written notice thereof received by the
14 board.
15 (e) That fraction of a participant's total accumulated
16 normal contributions, the numerator of which is equal to the
17 number of years of service in excess of that which is
18 required to qualify for the maximum retirement annuity, and
19 the denominator of which is equal to the total service of the
20 participant, shall be considered as accumulated additional
21 contributions. The determination of the applicable maximum
22 annuity and the adjustment in contributions required by this
23 provision shall be made as of the date of the participant's
24 retirement.
25 (f) Notwithstanding the foregoing, a participating
26 employee shall not be required to make contributions under
27 this Section after the date upon which continuance of such
28 contributions would otherwise cause his or her retirement
29 annuity to exceed the maximum retirement annuity as specified
30 in clause (1) of subsection (c) of Section 15-136.
31 (g) A participating employee may make contributions for
32 the purchase of service credit under this Article.
33 (Source: P.A. 86-272; 86-1488.)
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1 (40 ILCS 5/15-157.1) (from Ch. 108 1/2, par. 15-157.1)
2 Sec. 15-157.1. Pickup Pick up of employee contributions.
3 (a) Each employer shall pick up the employee
4 contributions required under subsections (a), (b), and (c) of
5 Section 15-157 for all earnings payments made on and after
6 January 1, 1981, and the contributions so picked up shall be
7 treated as employer contributions in determining tax
8 treatment under the United States Internal Revenue Code.
9 These contributions shall not be included as gross income of
10 the participant until such time as they are distributed or
11 made available. The employer shall pay these employee
12 contributions from the same source of funds which is used in
13 paying earnings to the employee. The employer may pick up
14 these contributions by a reduction in the cash salary of the
15 participants, or by an offset against a future salary
16 increase, or by a combination of a reduction in salary and
17 offset against a future salary increase.
18 (b) Subject to the requirements of federal law, a
19 participating employee may elect to have the employer pick up
20 optional contributions that the participant has elected to
21 pay to the System under Section 15-157(g), and the
22 contributions so picked up shall be treated as employer
23 contributions for the purposes of determining federal tax
24 treatment under the federal Internal Revenue Code of 1986.
25 These contributions shall not be included as gross income of
26 the participant until such time as they are distributed or
27 made available. The employer shall pick up the contributions
28 by a reduction in the cash salary of the participant and
29 shall pay the contributions from the same source of funds
30 that is used to pay earnings to the participant. The
31 election to have optional contributions picked up is
32 irrevocable.
33 (Source: P.A. 83-1440.)
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1 (40 ILCS 5/15-185) (from Ch. 108 1/2, par. 15-185)
2 Sec. 15-185. Annuities, etc., exempt. The accumulated
3 employee and employer contributions shall be held in trust
4 for each participant and annuitant, and this trust shall be
5 treated as a spendthrift trust. Except as provided in this
6 Article, all cash, securities and other property of this
7 system, all annuities and other benefits payable under this
8 Article and all accumulated credits of participants and
9 annuitants in this system and the right of any person to
10 receive an annuity or other benefit under this Article, or a
11 refund of contributions, shall not be subject to judgment,
12 execution, garnishment, attachment, or other seizure by
13 process, in bankruptcy or otherwise, nor to sale, pledge,
14 mortgage or other alienation, and shall not be assignable.
15 The board, however, may deduct from the benefits, refunds and
16 credits payable to the participant, annuitant or beneficiary,
17 amounts owed by the participant or annuitant to the system.
18 No attempted sale, transfer or assignment of any benefit,
19 refund or credit shall prevent the right of the board to make
20 the deduction and offset authorized in this Section. Any
21 participant or annuitant may authorize the board to deduct
22 from disability benefits or annuities, premiums due under any
23 group hospital-surgical insurance program which is sponsored
24 or approved by any employer; however, the deductions from
25 disability benefits may not begin prior to 6 months after the
26 disability occurs.
27 A person receiving an annuity or benefit under this
28 Article may authorize withholding from that annuity or
29 benefit in accordance with the provisions of the State Salary
30 and Annuity Withholding Act.
31 This amendatory Act of 1989 is a clarification of
32 existing law and shall be applicable to every participant and
33 annuitant without regard to whether status as an employee
34 terminates before the effective date of this amendatory Act
-33- LRB9000602EGfgam01
1 of 1989.
2 (Source: P.A. 86-273; 86-1488.)
3 (40 ILCS 5/18-133.1) (from Ch. 108 1/2, par. 18-133.1)
4 Sec. 18-133.1. Pickup Pick up of contributions.
5 (a) Each employer may pick up the participant
6 contributions required under Section 18-133 for all salary
7 earned after December 31, 1981. If an employer decides not
8 to pick up the contributions, the employee contributions
9 shall continue to be deducted from salary. If contributions
10 are picked up they shall be treated as employer contributions
11 in determining tax treatment under the United States Internal
12 Revenue Code. However, the employer shall continue to
13 withhold Federal and State income taxes based upon these
14 contributions until the Internal Revenue Service or the
15 Federal courts rule that pursuant to Section 414(h) of the
16 United States Internal Revenue Code, these contributions
17 shall not be included as gross income of the participant
18 until such time as they are distributed or made available.
19 The employer shall pay these participant contributions from
20 the same source of funds which is used in paying earnings to
21 the participant. The employer may pick up these
22 contributions by a reduction in the cash salary of the
23 participant or by an offset against a future salary increase
24 or by a combination of a reduction in salary and offset
25 against a future salary increase. If participant
26 contributions are picked up they shall be treated for all
27 purposes of this Article as participant contributions were
28 considered prior to the time they were picked up.
29 (b) Subject to the requirements of federal law, a
30 participant may elect to have the employer pick up optional
31 contributions that the participant has elected to pay to the
32 System, and the contributions so picked up shall be treated
33 as employer contributions for the purposes of determining
-34- LRB9000602EGfgam01
1 federal tax treatment. The employer shall pick up the
2 contributions by a reduction in the cash salary of the
3 participant and shall pay the contributions from the same
4 fund that is used to pay earnings to the participant. The
5 election to have optional contributions picked up is
6 irrevocable and the optional contributions may not thereafter
7 be prepaid, by direct payment or otherwise.
8 (Source: P.A. 83-1440.)
9 (40 ILCS 5/21-103) (from Ch. 108 1/2, par. 21-103)
10 Sec. 21-103. Political subdivision - election of
11 coverage.
12 (a) Any political subdivision other than a school
13 district and other than a political subdivision which is
14 participating in the Illinois Municipal Retirement Fund under
15 Article 7 of this Code may, by resolution of the governing
16 body (in the case of a township, at an annual town meeting or
17 at a special town meeting called for that purpose), or by
18 referendum, elect to have its employees covered by the Social
19 Security Act.
20 Whenever a petition requesting Social Security coverage
21 for employees, signed by not less than 5% of the legal voters
22 of the political subdivision, is presented to the governing
23 body, such governing body shall cause such proposition to be
24 certified to the proper election officials who shall submit
25 the proposition to the voters at the next appropriate
26 election in accordance with the general election law, or in
27 the case of a township at the next annual town meeting if the
28 petition is received more than 15 and less than 60 days
29 before the annual town meeting, or else at a special town
30 meeting called for that purpose. In the territory of the
31 political subdivision every elector may vote upon the
32 proposition stated in the petition. Such proposition shall
33 be in substantially the following form:
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1 -------------------------------------------------------------
2 Shall....(political subdivision)
3 enter into a coverage agreement with
4 the Social Security Division of YES
5 the State Employees' Retirement ----------------------
6 System for extension of Federal Social NO
7 Security coverage to employees
8 of....(political subdivision)?
9 -------------------------------------------------------------
10 If a majority of all of the votes cast upon the
11 proposition is in favor thereof, or if the governing body has
12 adopted a resolution or ordinance providing for coverage of
13 its employees, the governing body shall execute the coverage
14 agreement provided by the State Agency and submit such
15 coverage agreement to the State Agency for approval. The
16 coverage agreement shall be approved by the State Agency if
17 it meets the requirements of subsection (b).
18 (b) Each coverage agreement of a political subdivision
19 and any amendment thereof shall be approved by the State
20 Agency if it finds that such coverage agreement, or such
21 coverage agreement as amended, is in conformity with such
22 requirements as are provided in the regulations of the State
23 Agency, except that no such coverage agreement shall be
24 approved unless:
25 (1) it is in conformity with the requirements of
26 the Social Security Act and with the Federal-State
27 Agreement entered into under this Article;
28 (2) it provides that all services which constitute
29 employment and are performed in the employ of the
30 political subdivision by any employees thereof shall be
31 covered by the coverage agreement, except that such
32 agreement may, if the political subdivision so requests,
33 exclude all services in one or more classes of elective
34 positions, or positions the compensation for which is on
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1 a fee basis;
2 (3) it provides for such methods of administration
3 of the coverage agreement by the political subdivision as
4 are found by the State Agency to be necessary for the
5 proper and efficient administration of the coverage
6 agreement; and
7 (4) it provides for an effective date of coverage
8 not earlier than the first day of the fifth calendar year
9 preceding the year in which the resulting modification of
10 the Federal-State Agreement is agreed to by the Secretary
11 and the State.
12 (c) In addition to the requirements in subsection (b),
13 no coverage agreement which provides for an effective date of
14 coverage prior to January 1, 1987 shall be approved unless:
15 (1) it specifies the sources from which the funds
16 required of it by this Article are expected to be
17 derived, and contains reasonable assurance that such
18 sources will be adequate for such purpose;
19 (2) it contains a promise to deliver the proper
20 funds to the State Agency on or before the date requested
21 by the State Agency;
22 (3) it specifies some officer to act as custodian
23 of all funds collected and to be responsible to the State
24 Agency for the delivery of such funds;
25 (4) it provides that the political subdivision
26 shall pay into the Social Security Contribution Fund
27 contributions on covered wages at such times as the State
28 Agency may by regulations prescribe, in the amounts and
29 at the rates provided by this Article; and
30 (5) it provides that the political subdivision will
31 make such reports as the State Agency may from time to
32 time require, and comply with such provisions as the
33 State Agency or the Secretary may from time to time find
34 necessary.
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1 (Source: P.A. 85-442.)
2 (40 ILCS 5/21-109) (from Ch. 108 1/2, par. 21-109)
3 Sec. 21-109. Payment of Contributions.
4 (a) Absolute coverage group: Each political subdivision
5 which has established Social Security coverage for its
6 employees under this Article shall pay into the Social
7 Security Contribution Fund contributions on covered wages
8 paid prior to January 1, 1987 in the amounts and at the rates
9 prescribed by subchapters A and B of the Federal Insurance
10 Contributions Act at the times prescribed in the regulations
11 of the State Agency. Taxes due on wages covered under the
12 Social Security Coverage Agreement paid after December 31,
13 1986 shall be paid by each political subdivision to the
14 Internal Revenue Service in the amounts and at the rates
15 specified in the Federal Insurance Contributions Act and at
16 the times prescribed in the regulations of the Internal
17 Revenue Service.
18 Every political subdivision required to make payments is
19 authorized in consideration of the employee's retention in,
20 or entry upon, employment to impose upon each of its
21 employees, as to services which are covered by the coverage
22 agreement, a contribution with respect to wages computed by
23 applying the rates of contribution prescribed by Subchapter A
24 of the Federal Insurance Contributions Act, and to deduct the
25 amount of such contribution from such employee's wages when
26 paid.
27 Failure to deduct such contribution shall not relieve the
28 employee or employer of liability therefor.
29 (b) Retirement system coverage group: As a condition of
30 its coverage agreement, the governing body or board of
31 trustees of any retirement system which has adopted Social
32 Security coverage for its members under this Article shall
33 assume responsibility to the State Agency for the compiling
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1 of wage data, the collection of related contributions
2 prescribed by subchapters A and B of the Federal Insurance
3 Contributions Act, and the timely reporting and payment of
4 such items upon the wages of all covered employees paid prior
5 to January 1, 1987 in the manner and at the times prescribed
6 by the State Agency.
7 Coincident to the adoption of coverage, the governing
8 body or board of trustees of the retirement system shall
9 promulgate rules and regulations in conformity with federal
10 regulations, applicable to the State or local governmental
11 entities or to the agencies and employees participating
12 therein, to insure the correct application of coverage and
13 the timely and accurate reporting of wages and collection of
14 contributions.
15 In the event of failure by the retirement system or the
16 governmental entities or agencies participating therein to
17 comply with the timely reporting and payment requirements
18 imposed by this Section, the retirement system shall be
19 assessed any federal interest or late filing penalties
20 arising therefrom.
21 The contributions collected under this Section by any
22 retirement system which elects to adopt coverage shall be
23 remitted at such times as the State Agency shall prescribe
24 for deposit into the Social Security Contribution Fund.
25 The employees comprising the executive and administrative
26 staff of any retirement system which elects to adopt the
27 provisions of this Article shall have the contributions made
28 by the body employing them.
29 (c) If more or less than the correct amount of
30 contributions is paid to the State Agency, proper adjustment,
31 or refund without interest if adjustment is impractical,
32 shall be made in such manner and at such times as the State
33 Agency shall prescribe.
34 (Source: P.A. 85-442.)
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1 (40 ILCS 5/21-115) (from Ch. 108 1/2, par. 21-115)
2 Sec. 21-115. Special fund abolished; designation of
3 remittance agents.
4 (a) The Social Security Contribution Fund is abolished
5 at the close of business on June 30, 1997. Any balance then
6 remaining in that Fund shall be transferred to the Social
7 Security Administration Fund created under Section 21-109.1,
8 and any amounts thereafter designated for deposit into the
9 Social Security Contribution Fund shall instead be deposited
10 into the Social Security Administration Fund. There is
11 hereby established a special fund to be known as the Social
12 Security Contribution Fund. Such fund shall consist of and
13 there shall be deposited in such fund (1) all contributions,
14 interest, and penalties collected under this Article, except
15 as provided in subsection (f) of this Section, (2) all sums
16 recovered upon the bond of the custodian or otherwise for
17 losses sustained by the fund, (3) payments of Medicare taxes
18 in accordance with State Agency regulations, and (4) all
19 other moneys received for the fund from any other source. All
20 moneys in the fund shall be mingled and undivided. Subject to
21 the provisions of this Article, the State Agency is vested
22 with full power, authority and jurisdiction over the fund,
23 including all moneys and property or securities belonging
24 thereto, and may perform any and all acts whether or not
25 specifically designated, which are necessary to the
26 administration thereof.
27 (b) The Social Security Contribution Fund shall be
28 established and held separate and apart from any other funds
29 or moneys of the State of Illinois and shall be used and
30 administered exclusively for the purpose of this Article.
31 Withdrawals from such fund shall be made solely for the
32 following purposes:
33 (1) payment of amounts required to be paid to the
34 Secretary of the Treasury in relation to Social Security and
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1 Medicare coverage,
2 (2) payment of refunds for overpayments which are not
3 otherwise adjustable,
4 (3) payment into the General Revenue Fund of the amount
5 by which penalties collected pursuant to Section 21-112 of
6 this Article exceed the federal interest charges for the
7 corresponding period,
8 (4) payment into the General Revenue Fund of the
9 necessary expenses collected for the performance of tax
10 audits for failure to pay contributions pursuant to Section
11 21-113 of this Article,
12 (5) pursuant to recovery of Social Security
13 contributions paid to the Secretary of the Treasury for the
14 period from January 1, 1979 to June 30, 1981 on sick pay
15 excluded from wages pursuant to Section 209(b) of the Social
16 Security Act, (i) payment of a fee to a private vendor,
17 selected by competitive bidding in accordance with The
18 Illinois Purchasing Act, for the performance of all necessary
19 administrative actions required to obtain and distribute such
20 recovery, the fee to be contingent upon the amount of the
21 recovery and determined by contract, (ii) payment to the
22 Secretary of the Treasury of State Social Security
23 contributions for nonpayroll earnings received by court
24 reporters between January 1, 1977 and December 31, 1986, and
25 (iii) refund to the General Revenue Fund of the remainder of
26 the employer's share of the contributions so recovered,
27 (6) payment of reasonable expenses incurred in locating
28 former State employees for the purpose of refunding the
29 employees' share of Social Security contributions refunded to
30 the State as a result of the State's actions requesting
31 refunds of contributions paid to the Secretary of the
32 Treasury on sick pay as noted in item (5) and on the amount
33 of voluntary salary reductions by State employees
34 participating in the State's cafeteria plan of fringe
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1 benefits under Section 125 of the Internal Revenue Code,
2 (7) out of the employer's share of contributions
3 recovered as a result of the State's action to reduce
4 reported wages by the amount of voluntary salary reduction by
5 State employees participating in the State's cafeteria plan
6 of fringe benefits under Section 125 of the Internal Revenue
7 Code, (i) payment to the Secretary of the Treasury of State
8 Social Security contributions for nonpayroll earnings
9 received by court reporters between January 1, 1977 and
10 December 31, 1986, and (ii) payment of the remainder into the
11 General Revenue Fund, and
12 (8) payment into the Social Security Administration Fund
13 established by Section 21-109.1 of this Article to satisfy
14 the State's liability for Social Security and Medicare
15 contribution liability on wages paid after December 31, 1986,
16 and to dispose of any remaining balance in the Social
17 Security Contribution Fund not required to satisfy the
18 State's liability on wages paid prior to January 1, 1987.
19 (c) From the Social Security Contribution Fund the
20 custodian of the fund shall pay to the Secretary of the
21 Treasury such amounts at such times as may be directed by the
22 State Agency.
23 (d) The Treasurer of the State of Illinois shall be
24 ex-officio treasurer and custodian of the Social Security
25 Contribution Fund and shall administer such fund in
26 accordance with the provisions of this Article and the
27 directions of the State Agency, and shall pay all warrants of
28 the State Comptroller in accordance with the provisions of
29 this Section and with such regulations as the State Agency
30 may prescribe pursuant thereto.
31 (e) The Comptroller of the State of Illinois is
32 authorized and is directed to draw warrants upon the State
33 Treasurer payable from the Social Security Contribution Fund
34 for purposes provided for in this Article upon presentation
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1 of vouchers approved by the State Agency.
2 (b) (f) The State Agency is authorized to designate any
3 retirement system which has adopted coverage under this
4 Article to act as remittance agent on behalf of the State
5 Agency and to make payment of the Social Security
6 contributions collected upon the wages of employees within
7 the retirement system coverage group directly to the
8 designated Federal Reserve Bank without the necessity of
9 deposit or clearance of such collections through the Social
10 Security Contribution Fund. Any retirement system so
11 designated as a remittance agent shall continue to be subject
12 to the regulations of the State Agency with respect to
13 coverage determinations, wage reporting, corrective
14 adjustments, and accountability for tax collections in the
15 same manner as any other covered entity.
16 (Source: P.A. 86-272.)
17 Section 95. No acceleration or delay. Where this Act
18 makes changes in a statute that is represented in this Act by
19 text that is not yet or no longer in effect (for example, a
20 Section represented by multiple versions), the use of that
21 text does not accelerate or delay the taking effect of (i)
22 the changes made by this Act or (ii) provisions derived from
23 any other Public Act.
24 Section 99. Effective date. This Act takes effect upon
25 becoming law.".