State of Illinois
92nd General Assembly

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 1        AN ACT in relation to public employee benefits.

 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 Section 3-110 as follows:

 6        (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
 7        Sec. 3-110.  Creditable service.
 8        (a)  "Creditable  service" is the time served by a police
 9    officer as a member of a regularly constituted  police  force
10    of  a municipality. In computing creditable service furloughs
11    without pay exceeding 30 days shall not be counted,  but  all
12    leaves  of  absence  for  illness  or accident, regardless of
13    length, and all periods of disability retirement for which  a
14    police  officer  has  received no disability pension payments
15    under this Article shall be counted.
16        (b)  Creditable service includes all periods  of  service
17    in  the  military,  naval  or air forces of the United States
18    entered  upon  while  an   active   police   officer   of   a
19    municipality,  provided  that  upon  applying for a permanent
20    pension, and in accordance with the rules of the  board,  the
21    police  officer  pays  into  the  fund the amount the officer
22    would have contributed if  he  or  she  had  been  a  regular
23    contributor  during  such  period,  to  the  extent  that the
24    municipality which the police officer  served  has  not  made
25    such contributions in the officer's behalf.  The total amount
26    of  such  creditable service shall not exceed 5 years, except
27    that any police officer who on July 1, 1973 had more  than  5
28    years  of  such  creditable  service  shall receive the total
29    amount thereof.
30        (b-1)  In addition to any creditable service  established
31    under  subsection  (b), creditable service may be granted for
                            -2-                LRB9203791EGfg
 1    up to 24 months of service in the armed forces of the  United
 2    States  that  was not immediately preceded by employment as a
 3    police officer.  In order to receive creditable  service  for
 4    military  service  under  this  subsection  (b-1),  a  police
 5    officer  must  (1)  apply  to the Fund in writing and provide
 6    evidence of the military service that is satisfactory to  the
 7    Board and (2) make contributions to the Fund equal to (i) the
 8    employee  contributions that would have been required had the
 9    service been rendered  as  a  member,  plus  (ii)  an  amount
10    determined  by the board to be equal to the employer's normal
11    cost of the benefits accrued for that military service,  plus
12    (iii)  interest  on items (i) and (ii) from the date of first
13    membership in the Fund to the date of payment.  If payment is
14    made during the 6-month period that begins 3 months after the
15    effective date of this amendatory Act  of  the  92nd  General
16    Assembly,  the required interest shall be at the rate of 2.5%
17    per  year,  compounded  annually;  otherwise,  the   required
18    interest  shall  be  calculated  at  the rate of 6% per year,
19    compounded annually.
20        (c)  Creditable service also includes service rendered by
21    a police officer while on leave  of  absence  from  a  police
22    department  to serve as an executive of an organization whose
23    membership  consists  of  members  of  a  police  department,
24    subject to the following conditions:  (i) the police  officer
25    is  a  participant  of  a fund established under this Article
26    with at least 10 years of service as a police  officer;  (ii)
27    the  police officer received no credit for such service under
28    any other retirement system, pension  fund,  or  annuity  and
29    benefit  fund  included  in  this Code; (iii) pursuant to the
30    rules of the board the police officer pays to  the  fund  the
31    amount  he or she would have contributed had the officer been
32    an active member of  the  police  department;  and  (iv)  the
33    organization  pays a contribution equal to the municipality's
34    normal cost for that period of service.
                            -3-                LRB9203791EGfg
 1        (d)(1)  Creditable  service  also  includes  periods   of
 2    service originally established in another police pension fund
 3    under this Article or in the Fund established under Article 7
 4    of  this  Code  for  which  (i)  the  contributions have been
 5    transferred under Section 3-110.7 or Section 7-139.9 and (ii)
 6    any additional contribution required under paragraph  (2)  of
 7    this  subsection has been paid in full in accordance with the
 8    requirements of this subsection (d).
 9        (2)  If the board of the pension fund to which creditable
10    service  and  related  contributions  are  transferred  under
11    Section  3-110.7  or  7-139.9  determines  that  the   amount
12    transferred is less than the true cost to the pension fund of
13    allowing  that  creditable service to be established, then in
14    order to establish that creditable service the police officer
15    must pay to the  pension  fund,  within  the  payment  period
16    specified  in paragraph (3) of this subsection, an additional
17    contribution equal to the difference, as  determined  by  the
18    board  in  accordance  with  the rules and procedures adopted
19    under paragraph (6) of this subsection.
20        (3)  Except as provided in paragraph (4), the  additional
21    contribution  must  be  paid  to the board (i) within 5 years
22    from the date of the transfer of contributions under  Section
23    3-110.7  or  7-139.9  and  (ii)  before  the  police  officer
24    terminates   service   with   the   fund.    The   additional
25    contribution  may be paid in a lump sum or in accordance with
26    a schedule of installment payments authorized by the board.
27        (4)  If the police officer dies in service before payment
28    in full has been made and before the expiration of the 5-year
29    payment period, the surviving spouse of the officer may elect
30    to pay the unpaid amount on the  officer's  behalf  within  6
31    months  after the date of death, in which case the creditable
32    service shall  be  granted  as  though  the  deceased  police
33    officer  had paid the remaining balance on the day before the
34    date of death.
                            -4-                LRB9203791EGfg
 1        (5)  If the additional contribution is not paid  in  full
 2    within the required time, the creditable service shall not be
 3    granted  and  the  police officer (or the officer's surviving
 4    spouse or estate) shall be entitled to receive  a  refund  of
 5    (i)  any  partial payment of the additional contribution that
 6    has been made by the police officer and (ii)  those  portions
 7    of  the  amounts  transferred  under  subdivision  (a)(1)  of
 8    Section  3-110.7 or subdivisions (a)(1) and (a)(3) of Section
 9    7-139.9 that represent employee  contributions  paid  by  the
10    police  officer  (but  not  the accumulated interest on those
11    contributions) and interest paid by the police officer to the
12    prior pension fund in order to reinstate  service  terminated
13    by acceptance of a refund.
14        At  the  time of paying a refund under this item (5), the
15    pension fund shall also repay to the pension fund from  which
16    the  contributions  were transferred under Section 3-110.7 or
17    7-139.9 the amount originally transferred  under  subdivision
18    (a)(2)  of  that Section, plus interest at the rate of 6% per
19    year, compounded annually, from  the  date  of  the  original
20    transfer  to  the  date  of repayment.  Amounts repaid to the
21    Article 7 fund under this provision shall be credited to  the
22    appropriate municipality.
23        Transferred  credit that is not granted due to failure to
24    pay the additional contribution within the required  time  is
25    lost;  it  may not be transferred to another pension fund and
26    may not be reinstated in the pension fund from which  it  was
27    transferred.
28        (6)  The  Public  Employee  Pension  Fund Division of the
29    Department of Insurance shall establish by rule the manner of
30    making the calculation required under paragraph (2)  of  this
31    subsection,  taking  into  account  the appropriate actuarial
32    assumptions; the police officer's service,  age,  and  salary
33    history;  the  level  of funding of the pension fund to which
34    the credits are being transferred; and any other factors that
                            -5-                LRB9203791EGfg
 1    the Division  determines  to  be  relevant.   The  rules  may
 2    require  that  all  calculations  made under paragraph (2) be
 3    reported  to  the  Division  by  the  board  performing   the
 4    calculation,  together  with  documentation of the creditable
 5    service to be transferred, the amounts of  contributions  and
 6    interest   to   be  transferred,  the  manner  in  which  the
 7    calculation was performed, the numbers relied upon in  making
 8    the  calculation,  the  results  of  the calculation, and any
 9    other information the Division may deem useful.
10    (Source: P.A. 90-460, eff. 8-17-97; 91-887, eff. 7-6-00.)

11        Section 90.  The State Mandates Act is amended by  adding
12    Section 8.25 as follows:

13        (30 ILCS 805/8.25 new)
14        Sec.  8.25.  Exempt  mandate.  Notwithstanding Sections 6
15    and 8 of this Act, no reimbursement by the State is  required
16    for  the  implementation  of  any  mandate  created  by  this
17    amendatory Act of the 92nd General Assembly.

18        Section  99.  Effective date.  This Act takes effect upon
19    becoming law.

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