92_HB0478enr

HB0478 Enrolled                                LRB9203724EGfg

 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  Sections  1-113, 13-213, 13-302, 13-306, and 13-308
 6    as follows:

 7        (40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113)
 8        Sec.  1-113.  Investment  authority  of  certain  pension
 9    funds, not including those established under Article 3 or  4.
10    The  investment  authority  of  a  board  of  trustees  of  a
11    retirement system or pension fund established under this Code
12    shall,  if  so  provided  in  the  Article  establishing such
13    retirement system or  pension  fund,  embrace  the  following
14    investments:
15        (1)  Bonds,  notes  and  other  direct obligations of the
16    United States Government; bonds, notes and other  obligations
17    of  any  United  States Government agency or instrumentality,
18    whether or not guaranteed; and obligations the principal  and
19    interest  of  which  are  guaranteed  unconditionally  by the
20    United States Government or by an agency  or  instrumentality
21    thereof.
22        (2)  Obligations  of the Inter-American Development Bank,
23    the International Bank for  Reconstruction  and  Development,
24    the  African  Development  Bank,  the  International  Finance
25    Corporation, and the Asian Development Bank.
26        (3)  Obligations  of  any  state,  or  of  any  political
27    subdivision  in  Illinois,  or  of  any county or city in any
28    other state having a population as shown by the last  federal
29    census of not less than 30,000 inhabitants provided that such
30    political  subdivision  is  not  permitted  by  law to become
31    indebted in excess  of  10%  of  the  assessed  valuation  of
 
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 1    property  therein  and  has not defaulted for a period longer
 2    than 30 days in the payment of interest and principal on  any
 3    of its general obligations or indebtedness during a period of
 4    10 calendar years immediately preceding such investment.
 5        (4)  Nonconvertible  bonds,  debentures,  notes and other
 6    corporate obligations of any corporation created or  existing
 7    under the laws of the United States or any state, district or
 8    territory  thereof, provided there has been no default on the
 9    obligations of the corporation or its  predecessor(s)  during
10    the  5 calendar years immediately preceding the purchase.  Up
11    to 5% of the assets  of  a  pension  fund  established  under
12    Article  9  of  this  Code  may be invested in nonconvertible
13    bonds, debentures, notes, and other corporate obligations  of
14    corporations  created or existing under the laws of a foreign
15    country,  provided  there  has  been  no   default   on   the
16    obligations of the corporation or its predecessors during the
17    5 calendar years immediately preceding the date of purchase.
18        (5)  Obligations  guaranteed by the Government of Canada,
19    or by any Province of Canada, or by any Canadian city with  a
20    population of not less than 150,000 inhabitants, provided (a)
21    they  are  payable  in  United States currency and are exempt
22    from any Canadian withholding tax; (b) the investment in  any
23    one  issue  of  bonds  shall  not  exceed  10%  of the amount
24    outstanding; and (c) the total investments at book  value  in
25    Canadian  securities  shall  be  limited  to  5% of the total
26    investment account of the board at book value.
27        (5.1)  Direct obligations of the State of Israel for  the
28    payment  of  money,  or  obligations for the payment of money
29    which are guaranteed as  to  the  payment  of  principal  and
30    interest by the State of Israel, or common or preferred stock
31    or  notes issued by a bank owned or controlled in whole or in
32    part by the State of Israel, on the following conditions:
33             (a)  The total investments in such obligations shall
34        not  exceed  5%  of  the  book  value  of  the  aggregate
 
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 1        investments owned by the board;
 2             (b)  The State of Israel shall not be in default  in
 3        the payment of principal or interest on any of its direct
 4        general obligations on the date of such investment;
 5             (c)  The bonds, stock or notes, and interest thereon
 6        shall be payable in currency of the United States;
 7             (d)  The  bonds  shall (1) contain an option for the
 8        redemption thereof after 90 days from date of purchase or
 9        (2) either become due 5 years  from  the  date  of  their
10        purchase  or  be subject to redemption 120 days after the
11        date of notice for redemption;
12             (e)  The investment in these  obligations  has  been
13        approved in writing by investment counsel employed by the
14        board, which counsel shall be a national or state bank or
15        trust  company  authorized  to do a trust business in the
16        State of Illinois, or  an  investment  advisor  qualified
17        under  the  Federal  Investment  Advisors Act of 1940 and
18        registered under the Illinois Securities Act of 1953;
19             (f)  The fund or system making the investment  shall
20        have at least $5,000,000 of net present assets.
21        (6)  Notes  secured by mortgages under Sections 203, 207,
22    220 and 221 of the National Housing Act which are insured  by
23    the  Federal  Housing Commissioner, or his successor assigns,
24    or  debentures  issued  by  such  Commissioner,   which   are
25    guaranteed  as  to  principal  and  interest  by  the Federal
26    Housing  Administration,  or  agency  of  the  United  States
27    Government,  provided  the  aggregate  investment  shall  not
28    exceed 20% of the total investment account of  the  board  at
29    book  value, and provided further that the investment in such
30    notes under Sections 220 and 221 shall  in  no  event  exceed
31    one-half  of  the  maximum  investment  in  notes  under this
32    paragraph.
33        (7)  Loans to veterans guaranteed in whole or part by the
34    United States Government pursuant to Title III of the Act  of
 
HB0478 Enrolled             -4-                LRB9203724EGfg
 1    Congress  known  as  the  "Servicemen's  Readjustment  Act of
 2    1944,"  58  Stat.  284,  38  U.S.C.  693,   as   amended   or
 3    supplemented  from  time  to  time,  provided such guaranteed
 4    loans are liens upon real estate.
 5        (8)  Common and preferred  stocks  and  convertible  debt
 6    securities authorized for investment of trust funds under the
 7    laws of the State of Illinois, provided:
 8             (a)  the   common  stocks,  except  as  provided  in
 9        subparagraph (g), are listed  on  a  national  securities
10        exchange  or  board  of  trade, as defined in the federal
11        Securities  Exchange  Act  of  1934,  or  quoted  in  the
12        National  Association  of  Securities  Dealers  Automated
13        Quotation System (NASDAQ);
14             (b)  the securities are of a corporation created  or
15        existing  under  the  laws  of  the  United States or any
16        state, district or territory thereof, except that  up  to
17        5%  of  the  assets  of  a pension fund established under
18        Article 9 of this Code  may  be  invested  in  securities
19        issued by corporations created or existing under the laws
20        of  a  foreign country, if those securities are otherwise
21        in conformance with this paragraph (8);
22             (c)  the corporation is not in arrears on payment of
23        dividends on its preferred stock;
24             (d)  the  total  book  value  of  all   stocks   and
25        convertible  debt owned by any pension fund or retirement
26        system shall not exceed 40% of the aggregate  book  value
27        of  all  investments  of  such pension fund or retirement
28        system, except for a pension fund  or  retirement  system
29        governed  by Article 9, 13, or 17, where the total of all
30        stocks and convertible debt shall not exceed 50%  of  the
31        aggregate  book value of all fund investments, and except
32        for a pension  fund  or  retirement  system  governed  by
33        Article  13,  where  the total market value of all stocks
34        and  convertible  debt  shall  not  exceed  65%  of   the
 
HB0478 Enrolled             -5-                LRB9203724EGfg
 1        aggregate market value of all fund investments;
 2             (e)  the  book  value  of stock and convertible debt
 3        investments in any one corporation shall not exceed 5% of
 4        the total investment account at book value in which  such
 5        securities  are  held,  determined  as of the date of the
 6        investment, and the investments in the stock of  any  one
 7        corporation  shall not exceed 5% of the total outstanding
 8        stock of such corporation, and  the  investments  in  the
 9        convertible  debt of any one corporation shall not exceed
10        5%  of  the  total  amount  of  such  debt  that  may  be
11        outstanding;
12             (f)  the straight preferred  stocks  or  convertible
13        preferred  stocks  and  convertible  debt  securities are
14        issued or guaranteed by a corporation whose common  stock
15        qualifies for investment by the board; and
16             (g)  that  any common stocks not listed or quoted as
17        provided in subdivision 8(a)  above  be  limited  to  the
18        following  types of institutions: (a) any bank which is a
19        member  of  the  Federal  Deposit  Insurance  Corporation
20        having  capital  funds  represented  by  capital   stock,
21        surplus  and  undivided  profits of at least $20,000,000;
22        (b) any  life  insurance  company  having  capital  funds
23        represented  by  capital stock, special surplus funds and
24        unassigned surplus totalling at  least  $50,000,000;  and
25        (c)   any  fire  or  casualty  insurance  company,  or  a
26        combination thereof, having capital funds represented  by
27        capital  stock,  net surplus and voluntary reserves of at
28        least $50,000,000.
29        (9)  Withdrawable accounts of State chartered and federal
30    chartered  savings  and  loan  associations  insured  by  the
31    Federal Savings and Loan Insurance Corporation;  deposits  or
32    certificates  of  deposit in State and national banks insured
33    by the  Federal  Deposit  Insurance  Corporation;  and  share
34    accounts  or share certificate accounts in a State or federal
 
HB0478 Enrolled             -6-                LRB9203724EGfg
 1    credit union, the accounts of which are insured  as  required
 2    by  the Illinois Credit Union Act or the Federal Credit Union
 3    Act, as applicable.
 4        No bank or savings and  loan  association  shall  receive
 5    investment  funds as permitted by this subsection (9), unless
 6    it has complied with the requirements established pursuant to
 7    Section 6 of the Public Funds Investment Act.
 8        (10)  Trading, purchase or  sale  of  listed  options  on
 9    underlying securities owned by the board.
10        (11)  Contracts   and   agreements  supplemental  thereto
11    providing for investments in the general account  of  a  life
12    insurance company authorized to do business in Illinois.
13        (12)  Conventional mortgage pass-through securities which
14    are   evidenced   by  interests  in  Illinois  owner-occupied
15    residential mortgages, having not less  than  an  "A"  rating
16    from  at  least  one national securities rating service. Such
17    mortgages may have loan-to-value ratios up to  95%,  provided
18    that  any  amount  over  80%  is  insured by private mortgage
19    insurance.  The pool of such mortgages shall  be  insured  by
20    mortgage guaranty or equivalent insurance, in accordance with
21    industry standards.
22        (13)  Pooled or commingled funds managed by a national or
23    State  bank which is authorized to do a trust business in the
24    State of Illinois, shares of registered investment  companies
25    as  defined  in  the  federal  Investment Company Act of 1940
26    which are registered under that Act, and separate accounts of
27    a  life  insurance  company  authorized  to  do  business  in
28    Illinois, where such pooled or commingled funds,  shares,  or
29    separate  accounts  are  comprised  of  common  or  preferred
30    stocks, bonds, or money market instruments.
31        (14)  Pooled or commingled funds managed by a national or
32    state  bank which is authorized to do a trust business in the
33    State of  Illinois,  separate  accounts  managed  by  a  life
34    insurance  company authorized to do business in Illinois, and
 
HB0478 Enrolled             -7-                LRB9203724EGfg
 1    commingled group trusts  managed  by  an  investment  adviser
 2    registered  under the federal Investment Advisors Act of 1940
 3    (15 U.S.C. 80b-1 et seq.) and under the  Illinois  Securities
 4    Law  of 1953, where such pooled or commingled funds, separate
 5    accounts or commingled group trusts  are  comprised  of  real
 6    estate  or  loans upon real estate secured by first or second
 7    mortgages.  The total investment in such pooled or commingled
 8    funds, commingled group trusts and  separate  accounts  shall
 9    not exceed 10% of the aggregate book value of all investments
10    owned by the fund.
11        (15)  Investment  companies  which  (a) are registered as
12    such under the  Investment  Company  Act  of  1940,  (b)  are
13    diversified, open-end management investment companies and (c)
14    invest only in money market instruments.
15        (16)  Up to 10% of the assets of the fund may be invested
16    in investments not included in paragraphs (1) through (15) of
17    this  Section, provided that such investments comply with the
18    requirements and restrictions set forth  in  Sections  1-109,
19    1-109.1, 1-109.2, 1-110 and 1-111 of this Code.
20        The  board  shall  have  the authority to enter into such
21    agreements and to execute such documents as it determines  to
22    be necessary to complete any investment transaction.
23        Any limitations herein set forth shall be applicable only
24    at the time of purchase and shall not require the liquidation
25    of any investment at any time.
26        All  investments  shall be clearly held and accounted for
27    to indicate ownership by such board. Such  board  may  direct
28    the registration of securities in its own name or in the name
29    of  a nominee created for the express purpose of registration
30    of securities by a national or state bank  or  trust  company
31    authorized  to  conduct  a  trust  business  in  the State of
32    Illinois.
33        Investments shall be  carried  at  cost  or  at  a  value
34    determined  in  accordance with generally accepted accounting
 
HB0478 Enrolled             -8-                LRB9203724EGfg
 1    principles and accounting procedures approved by such board.
 2    (Source: P.A. 90-12,  eff.  6-13-97;  90-507,  eff.  8-22-97;
 3    90-511, eff. 8-22-97; 90-655, eff. 7-30-98.)

 4        (40 ILCS 5/13-213) (from Ch. 108 1/2, par. 13-213)
 5        Sec. 13-213.  "Contributions": Any moneys paid or payable
 6    to  into  the Fund by the District or by any employee, or any
 7    salary deduction hereunder.
 8    (Source: P.A. 87-794.)

 9        (40 ILCS 5/13-302) (from Ch. 108 1/2, par. 13-302)
10        Sec. 13-302.  Computation of retirement annuity.
11        (a)  Computation of annuity.  An employee  who  withdraws
12    from service on or after July 1, 1989 and who has met the age
13    and service requirements and other conditions for eligibility
14    set  forth  in  Section 13-301 of this Article is entitled to
15    receive a retirement  annuity  for  life  equal  to  2.2%  of
16    average  final  salary  for  each  of  the  first 20 years of
17    service, and 2.4% of average final salary for  each  year  of
18    service  in  excess  of 20.  The retirement annuity shall not
19    exceed 80% of average final salary.
20        (b)  Early retirement discount.  If an  employee  retires
21    prior  to  attainment  of  age  60 with less than 30 years of
22    service, the annuity computed above shall be reduced  by  1/2
23    of 1% for each full month between the date the annuity begins
24    and  attainment  of  age  60, or each full month by which the
25    employee's service is less than 30 years, whichever is less.
26    However, where the employee first enters service  after  June
27    13,  1997  the  effective date of this amendatory Act of 1997
28    and does not have at least 10 years of service  exclusive  of
29    credit  under Article 20, the annuity computed above shall be
30    reduced by 1/2 of 1% for each full month between the date the
31    annuity begins and attainment of age 60.
32        (c)  (Blank).  Early  retirement  without  discount.   An
 
HB0478 Enrolled             -9-                LRB9203724EGfg
 1    employee  who  has attained age 50 and retires after December
 2    31, 1987 and before June 30, 1997, and who retires  within  6
 3    months  of  the  last  day for which retirement contributions
 4    were required, may elect at the time of application to make a
 5    one-time employee contribution to the Fund and thereby  avoid
 6    the  early  retirement reduction specified in subsection (b).
 7    The exercise of the election shall also obligate the employer
 8    to make a one-time nonrefundable contribution to the Fund.
 9        The one-time employee and employer contributions shall be
10    a percentage of the retiring employee's last full-time annual
11    salary, calculated as the total amount paid during  the  last
12    260 work days immediately prior to the date of withdrawal, or
13    if  not full-time then the full time equivalent, and based on
14    the employee's age and service at retirement.   The  employee
15    contribution rate shall be 7% multiplied by the lesser of the
16    following  2  numbers:  (1)  the  number of years, or portion
17    thereof, that the employee is less than age 60;  or  (2)  the
18    number  of  years,  or  portion  thereof, that the employee's
19    service is less than 30  years.   The  employer  contribution
20    shall  be  at  the  rate  of  20%  for  each year, or portion
21    thereof, that the participant is less than age 60.
22        Upon  receipt  of  the  application,  the   Board   shall
23    determine    the    corresponding   employee   and   employer
24    contributions.  The annuity shall not be payable  under  this
25    subsection  until  both  the required contributions have been
26    received by the Fund.  However, the  date  the  contributions
27    are  received  shall  not  be  considered  in determining the
28    effective date of retirement.
29        The number of employees who may retire under this Section
30    in any year may be limited at the option of the District to a
31    specified percentage of those eligible, not lower  than  30%,
32    with  the  right  to  participate to be allocated among those
33    applying on the basis of seniority  in  the  service  of  the
34    employer.
 
HB0478 Enrolled             -10-               LRB9203724EGfg
 1        An   employee   who   has   terminated   employment   and
 2    subsequently re-enters service shall not be entitled to early
 3    retirement  without discount under this subsection unless the
 4    employee continues in service for  at  least  4  years  after
 5    re-entry.
 6        (c-1)  Early   retirement  without  discount;  retirement
 7    after June 29, 1997.  An employee who (i) has attained age 55
 8    (age 50 if the employee first entered service before June 13,
 9    1997) the effective date of this  amendatory  Act  of  1997),
10    (ii)  has  at  least  10 years of service exclusive of credit
11    under Article 20, (iii)  retires  after  June  29,  1997  and
12    before  January  1, 2003, and (iv) retires within 6 months of
13    the  last  day  for  which  retirement   contributions   were
14    required,  may  elect  at  the  time of application to make a
15    one-time employee contribution to the Fund and thereby  avoid
16    the  early  retirement reduction specified in subsection (b).
17    The exercise of the election shall also obligate the employer
18    to make a one-time nonrefundable contribution to the Fund.
19        The one-time employee and employer contributions shall be
20    a percentage of the  retiring  employee's  highest  full-time
21    annual  salary,  calculated  as  the  total  amount of salary
22    included in the highest 26 consecutive pay periods as used in
23    the average  final  salary  calculation,  and  based  on  the
24    employee's  age and service at retirement.  The employee rate
25    shall be 7% multiplied by  the  lesser  of  the  following  2
26    numbers:  (1)  the  number of years, or portion thereof, that
27    the employee is less than age 60; or (2) the number of years,
28    or portion thereof, that the employee's service is less  than
29    30  years.  The employer contribution shall be at the rate of
30    20% for each year, or portion thereof, that  the  participant
31    is less than age 60.
32        Upon   receipt   of  the  application,  the  Board  shall
33    determine   the   corresponding   employee    and    employer
34    contributions.   The  annuity shall not be payable under this
 
HB0478 Enrolled             -11-               LRB9203724EGfg
 1    subsection until both the required  contributions  have  been
 2    received  by  the  Fund.  However, the date the contributions
 3    are received shall  not  be  considered  in  determining  the
 4    effective date of retirement.
 5        The number of employees who may retire under this Section
 6    in any year may be limited at the option of the District to a
 7    specified  percentage  of those eligible, not lower than 30%,
 8    with the right to participate to  be  allocated  among  those
 9    applying  on  the  basis  of  seniority in the service of the
10    employer.
11        An   employee   who   has   terminated   employment   and
12    subsequently re-enters service shall not be entitled to early
13    retirement without discount under this subsection unless  the
14    employee  continues  in  service  for  at least 4 years after
15    re-entry.
16        (d)  Annual increase.  Except for employees retiring  and
17    receiving a term annuity, an employee who retires on or after
18    July 1, 1985 but before the effective date of this amendatory
19    Act  of  the  92nd  General  Assembly  shall,  upon the first
20    payment date following the first anniversary of the  date  of
21    retirement,  have  the monthly annuity increased by 3% of the
22    amount  of  the  monthly  annuity  fixed  at  the   date   of
23    retirement.    Except  for employees retiring and receiving a
24    term annuity,  an  employee  who  retires  on  or  after  the
25    effective  date  of  this  amendatory Act of the 92nd General
26    Assembly shall, on the first day of the month  in  which  the
27    first  anniversary of the date of retirement occurs, have the
28    monthly annuity increased by 3% of the amount of the  monthly
29    annuity fixed at the date of retirement.  The monthly annuity
30    shall  be increased by an additional 3% on the same date each
31    year thereafter.   Beginning  January  1,  1993,  all  annual
32    increases  payable  under this subsection (or any predecessor
33    provision, regardless of the date  of  retirement)  shall  be
34    calculated  at  the rate of 3% of the monthly annuity payable
 
HB0478 Enrolled             -12-               LRB9203724EGfg
 1    at  the  time  of  the  increase,  including  any   increases
 2    previously granted under this Article.
 3        Any  employee who (i) retired before July 1, 1985 with at
 4    least 10 years of creditable service,  (ii)  is  receiving  a
 5    retirement  annuity  under  this  Article,  other than a term
 6    annuity, and (iii) has not received any annual increase under
 7    this subsection, shall begin receiving the  annual  increases
 8    provided  under  this  subsection  (d)  beginning on the next
 9    annuity payment date following the  effective  date  of  this
10    amendatory Act of 1997.
11        (e)  Minimum  retirement  annuity.   Beginning January 1,
12    1993, the minimum monthly retirement annuity  shall  be  $500
13    for  any  annuitant having at least 10 years of service under
14    this Article, other than a term annuitant or an annuitant who
15    began receiving the annuity before  attaining  age  60.   Any
16    such  annuitant  who  is  receiving a monthly annuity of less
17    than $500 shall have the annuity increased to  $500  on  that
18    date.
19        Beginning January 1, 1993, the minimum monthly retirement
20    annuity shall be $250 for any annuitant (other than a term or
21    reciprocal  annuitant or an annuitant under subsection (d) of
22    Section 13-301) having less than 10 years  of  service  under
23    this  Article,  and  for  any  annuitant  (other  than a term
24    annuitant) having at least 10 years  of  service  under  this
25    Article  who began receiving the annuity before attaining age
26    60.  Any such annuitant who is receiving a monthly annuity of
27    less than $250 shall have the annuity increased  to  $250  on
28    that date.
29        Beginning  on  the  first  day of the month following the
30    month in which  this  amendatory  Act  of  the  92nd  General
31    Assembly  takes  effect  (and  without  regard to whether the
32    annuitant was in service on or after  that  effective  date),
33    the  minimum  monthly  retirement  annuity  for any annuitant
34    having at least 10 years of service, other than an  annuitant
 
HB0478 Enrolled             -13-               LRB9203724EGfg
 1    whose  annuity  is  subject  to an early retirement discount,
 2    shall be $500 plus $25 for each year of service in excess  of
 3    10, not to exceed $750 for an annuitant with 20 or more years
 4    of  service.    In  the  case  of  a reciprocal annuity, this
 5    minimum shall apply only if the annuitant  has  at  least  10
 6    years  of  service  under this Article, and the amount of the
 7    minimum annuity shall be  reduced  by  the  sum  of  all  the
 8    reciprocal  annuities  payable  to  the  annuitant  by  other
 9    participating systems under Article 20 of this Code.
10        Notwithstanding  any  other provision of this subsection,
11    beginning on the first annuity  payment  date  following  the
12    effective  date  of  this  amendatory Act of the 92nd General
13    Assembly, an employee who retired before August 23, 1989 with
14    at least 10 years of service under this  Article  but  before
15    attaining  age  60  (regardless  of  whether  the  retirement
16    annuity was subject to an early retirement discount) shall be
17    entitled to the same minimum monthly retirement annuity under
18    this  subsection  as an employee who retired with at least 10
19    years of service under this Article and after  attaining  age
20    60.
21    (Source: P.A. 90-12, eff. 6-13-97.)

22        (40 ILCS 5/13-306) (from Ch. 108 1/2, par. 13-306)
23        Sec. 13-306.  Computation of surviving spouse's annuity.
24        (a)  Computation  of the annuity.  The surviving spouse's
25    annuity shall be equal  to  60%  of  the  retirement  annuity
26    earned  and  accrued  to the credit of the deceased employee,
27    whether death occurs while in service  or  after  withdrawal,
28    plus  1%  for each year of total service of the employee to a
29    maximum of 85%; provided, however,  that  if  the  employee's
30    death  arises  out  of  and  in  the course of the employee's
31    service to the employer and is compensable under  either  the
32    Illinois  Workers'  Compensation  Act  or  Illinois  Workers'
33    Occupational  Diseases Act, the surviving spouse's annuity is
 
HB0478 Enrolled             -14-               LRB9203724EGfg
 1    payable regardless of the employee's length  of  service  and
 2    shall  be  not  less than 50% of the employee's salary at the
 3    date of death.
 4        For any death in service the  early  retirement  discount
 5    required  under  Section  13-302(b)  shall  not be applied in
 6    computing the retirement annuity  upon  which  is  based  the
 7    surviving spouse's annuity.
 8        (b)  Reciprocal  service.   For any employee or annuitant
 9    who retires on or after July 1, 1985 and whose  death  occurs
10    after  January  1,  1991, having at least 15 years of service
11    with the employer under this Article, and who was eligible at
12    the time of death or elected at the  time  of  retirement  to
13    have  his or her retirement annuity calculated as provided in
14    Section 20-131 of this Code,  the  surviving  spouse  benefit
15    shall be calculated as of the date of the employee's death as
16    indicated in subsection (a) as a percentage of the employee's
17    total  benefit  as if all service had been with the employer.
18    That benefit shall then be reduced by the amounts payable  by
19    each  of the reciprocal funds as of the date of death so that
20    the total surviving spouse benefit at that date will be equal
21    to the benefit which would have been payable had all  service
22    been with the employer under this Article.
23        (c)  Discount  for  age  differential.  The annuity for a
24    surviving spouse shall be discounted by 0.25% for  each  full
25    month  that the spouse is younger than the employee as of the
26    date of withdrawal from service or  death  in  service  to  a
27    maximum  discount  of  60% of the surviving spouse annuity as
28    calculated under  subsections  (a),  (b),  and  (e)  of  this
29    Section.   The discount shall be reduced by 10% for each full
30    year the marriage has been in continuous  effect  as  of  the
31    date  of  withdrawal  or death in service.  There shall be no
32    discount if the marriage has been in continuous effect for 10
33    full years or more at the time  of  withdrawal  or  death  in
34    service.
 
HB0478 Enrolled             -15-               LRB9203724EGfg
 1        (d)  Annual  increase.  On the first day of each calendar
 2    month in which there occurs an anniversary of the  employee's
 3    date  of  retirement  or  date  of  death, whichever occurred
 4    first, the surviving spouse's  annuity,  other  than  a  term
 5    annuity under Section 13-307, shall be increased by an amount
 6    equal  to 3% of the amount of the annuity.  Beginning January
 7    1, 1993, all annual increases payable under  this  subsection
 8    (or  any  predecessor  provision  of  this  Article) shall be
 9    calculated at the rate of 3% of the monthly  annuity  payable
10    at   the  time  of  the  increase,  including  any  increases
11    previously granted under this Article.
12        Beginning January 1, 1993,  surviving  spouse  annuitants
13    whose  deceased spouse died, retired or withdrew from service
14    before August 23, 1989 with at  least  10  years  of  service
15    under this Article shall be eligible for the annual increases
16    provided under this subsection.
17        (e)  Minimum surviving spouse's annuity.
18        (1)  Beginning  January  1,  1993,  the  minimum  monthly
19    surviving  spouse's  annuity  shall be $500 for any annuitant
20    whose deceased spouse had at least 10 years of service  under
21    this  Article,  other  than  a surviving spouse who is a term
22    annuitant  or  whose  deceased  spouse  began   receiving   a
23    retirement  annuity  under  this Article before attainment of
24    age 60.  Any such surviving spouse annuitant who is receiving
25    a monthly annuity of less than $500 shall  have  the  annuity
26    increased to $500 on that date.
27        Beginning  January 1, 1993, the minimum monthly surviving
28    spouse's annuity shall be $250 for any annuitant (other  than
29    a term or reciprocal annuitant or an annuitant survivor under
30    subsection  (d)  of Section 13-301) whose deceased spouse had
31    less than 10 years of service under this Article, and for any
32    annuitant (other than a term annuitant) whose deceased spouse
33    had at least 10 years of service under this Article and began
34    receiving a retirement  annuity  under  this  Article  before
 
HB0478 Enrolled             -16-               LRB9203724EGfg
 1    attainment  of  age  60.  Any such surviving spouse annuitant
 2    who is receiving a monthly annuity of less  than  $250  shall
 3    have the annuity increased to $250 on that date.
 4        (2)  Beginning  on  the  first day of the month following
 5    the month in which this amendatory Act of  the  92nd  General
 6    Assembly  takes  effect  (and  without  regard to whether the
 7    deceased spouse was in service on  or  after  that  effective
 8    date), the minimum monthly surviving spouse's annuity for any
 9    annuitant  whose  deceased  spouse  had  at least 10 years of
10    service shall be the greater of the following:
11             (A)  An amount equal to $500, plus $25 for each year
12        of the deceased spouse's service in excess of 10, not  to
13        exceed $750 for an annuitant whose deceased spouse had 20
14        or  more  years  of service.  This subdivision (A) is not
15        applicable if the deceased spouse received  a  retirement
16        annuity that was subject to an early retirement discount.
17             (B)  An  amount  equal  to (i) 50% of the retirement
18        annuity earned and accrued to the credit of the  deceased
19        spouse  at the time of death, plus (ii) the amount of any
20        annual increases applicable  to  the  surviving  spouse's
21        annuity   (including   the  amount  of  any  reversionary
22        annuity) under subsection (d) before the  effective  date
23        of  this amendatory Act of the 92nd General Assembly.  In
24        any case in which a refund of  excess  contributions  for
25        the  surviving  spouse  annuity has been paid by the Fund
26        and the surviving spouse annuity is increased due to  the
27        application  of  this subdivision (B), the amount of that
28        refund shall be  recovered  by  the  Fund  as  an  offset
29        against  the  amount  of  the increase in annuity arising
30        from the application of this subdivision (B).
31        In the case of a reciprocal annuity, the minimum  annuity
32    calculated  under this subdivision (e)(2) shall apply only if
33    the deceased spouse of the annuitant had at least 10 years of
34    service under this Article, and the  amount  of  the  minimum
 
HB0478 Enrolled             -17-               LRB9203724EGfg
 1    annuity  shall  be  reduced  by the sum of all the reciprocal
 2    annuities payable to the  annuitant  by  other  participating
 3    systems under Article 20 of this Code.
 4        The  minimum  annuity  calculated  under this subdivision
 5    (e)(2) is in addition  to  the  amount  of  any  reversionary
 6    annuity that may be payable.
 7        (3)  Beginning  on  the  first day of the month following
 8    the month in which this amendatory Act of  the  92nd  General
 9    Assembly  takes  effect  (and  without  regard to whether the
10    deceased spouse was in service on  or  after  that  effective
11    date),  any  surviving spouse who is receiving a term annuity
12    under Section 13-307 or any  predecessor  provision  of  this
13    Article may have that term annuity recalculated and converted
14    to  a  minimum surviving spouse annuity under this subsection
15    (e).
16        (4)  Notwithstanding  any   other   provision   of   this
17    subsection,  beginning  on  the  first  annuity  payment date
18    following the effective date of this amendatory  Act  of  the
19    92nd  General  Assembly,  an  annuitant whose deceased spouse
20    retired before August 23, 1989 with  at  least  10  years  of
21    service  under  this  Article  but  before  attaining  age 60
22    (regardless of whether the retirement annuity was subject  to
23    an  early  retirement discount) shall be entitled to the same
24    minimum  monthly  surviving  spouse's  annuity   under   this
25    subsection as an annuitant whose deceased spouse retired with
26    at  least  10  years  of service under this Article and after
27    attaining age 60.
28        (5)  The minimum annuity provided under  this  subsection
29    (e)  shall  be  subject  to  the  age discount provided under
30    subsection (c) of this Section.
31    (Source: P.A. 90-12, eff. 6-13-97.)

32        (40 ILCS 5/13-308) (from Ch. 108 1/2, par. 13-308)
33        Sec. 13-308.  Child's annuity.
 
HB0478 Enrolled             -18-               LRB9203724EGfg
 1        (a)  Eligibility.  A child's annuity  shall  be  provided
 2    for  each  unmarried  child  under  the age of 18 years whose
 3    employee parent dies while  in  service,  or  whose  deceased
 4    parent  is  an  annuitant or former employee with at least 10
 5    years of creditable service who did  not  take  a  refund  of
 6    employee contributions.
 7        For  purposes  of  this  Section,  "employee"  includes a
 8    former employee, and "child" means the issue of an  employee,
 9    or  a  child  adopted  by  an employee if the proceedings for
10    adoption were instituted at  least  one  year  prior  to  the
11    employee's death.
12        Payments  shall  cease when a child attains the age of 18
13    years or marries, whichever first occurs.  The annuity  shall
14    not  be  payable  unless the employee has been employed as an
15    employee for  at  least  36  months  from  the  date  of  the
16    employee's original entry into service (at least 24 months in
17    the  case of an employee who first entered service before the
18    effective date of this amendatory Act of 1997) and  at  least
19    12  months  from  the  date of the employee's latest re-entry
20    into service; provided, however, that if death arises out  of
21    and  in  the  course  of  service  to  the  employer  and  is
22    compensable  under  either the Illinois Workers' Compensation
23    Act or  Illinois  Workers'  Occupational  Diseases  Act,  the
24    annuity  is  payable  regardless  of the employee's length of
25    service.
26        (b)  Amount.  A child's annuity shall be  $500  $250  per
27    month  for  one  child and $350 per month for each additional
28    child, up to a maximum of $2,500 per month for  all  children
29    of  the employee, as provided in this Section, if a parent of
30    the child is living.  The child's annuity shall be $1,000 per
31    month for one  child,  and  $500  $350  per  month  for  each
32    additional  child, up to a maximum of $2,500 for all children
33    of the employee, when neither parent  is  alive.   The  total
34    amount  payable  to  all  children  of  the employee shall be
 
HB0478 Enrolled             -19-               LRB9203724EGfg
 1    divided equally among those children.   Any  child's  annuity
 2    which   commenced   prior  to  the  effective  date  of  this
 3    amendatory Act of the 92nd General  Assembly  1991  shall  be
 4    increased upon the first day of the month following the month
 5    in  which  that  the effective date occurs, to the amount set
 6    forth herein.
 7        (c)  Payment.  A child's annuity shall  be  paid  to  the
 8    child's parent or other person who shall be providing for the
 9    child  without  requiring  formal  letters  of  guardianship,
10    unless another person shall be appointed by a court of law as
11    guardian.
12    (Source: P.A. 90-12, eff. 6-13-97.)

13        Section  90.  The State Mandates Act is amended by adding
14    Section 8.25 as follows:

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

20        Section 99. Effective date.  This Act takes  effect  upon
21    becoming law.