Public Act 099-0897
 
SB2156 EnrolledLRB099 13062 RPS 36944 b

    AN ACT concerning public employee benefits.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Pension Code is amended by changing
Sections 15-106, 15-107, 15-110, 15-111, 15-113.11, 15-155,
15-158.2, 15-168, and 15-168.2 and by adding Sections 15-111.5
and 15-113.12 as follows:
 
    (40 ILCS 5/15-106)  (from Ch. 108 1/2, par. 15-106)
    (Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
    Sec. 15-106. Employer. "Employer": The University of
Illinois, Southern Illinois University, Chicago State
University, Eastern Illinois University, Governors State
University, Illinois State University, Northeastern Illinois
University, Northern Illinois University, Western Illinois
University, the State Board of Higher Education, the Illinois
Mathematics and Science Academy, the University Civil Service
Merit Board, the Board of Trustees of the State Universities
Retirement System, the Illinois Community College Board,
community college boards, any association of community college
boards organized under Section 3-55 of the Public Community
College Act, the Board of Examiners established under the
Illinois Public Accounting Act, and, only during the period for
which employer contributions required under Section 15-155 are
paid, the following organizations: the alumni associations,
the foundations and the athletic associations which are
affiliated with the universities and colleges included in this
Section as employers. An individual who begins employment on or
after the effective date of this amendatory Act of the 99th
General Assembly with any association of community college
boards organized under Section 3-55 of the Public Community
College Act, the Association of Illinois Middle-Grade Schools,
the Illinois Association of School Administrators, the
Illinois Association for Supervision and Curriculum
Development, the Illinois Principals Association, the Illinois
Association of School Business Officials, the Illinois Special
Olympics, or an entity not defined as an employer in this
Section shall not be deemed an employee for the purposes of
this Article with respect to that employment and shall not be
eligible to participate in the System with respect to that
employment; provided, however, that those individuals who are
both employed by such an entity and are participating in the
System with respect to that employment on the effective date of
this amendatory Act of the 99th General Assembly shall be
allowed to continue as participants in the System for the
duration of that employment.
    A department as defined in Section 14-103.04 is an employer
for any person appointed by the Governor under the Civil
Administrative Code of Illinois who is a participating employee
as defined in Section 15-109. The Department of Central
Management Services is an employer with respect to persons
employed by the State Board of Higher Education in positions
with the Illinois Century Network as of June 30, 2004 who
remain continuously employed after that date by the Department
of Central Management Services in positions with the Illinois
Century Network, the Bureau of Communication and Computer
Services, or, if applicable, any successor bureau.
    The cities of Champaign and Urbana shall be considered
employers, but only during the period for which contributions
are required to be made under subsection (b-1) of Section
15-155 and only with respect to individuals described in
subsection (h) of Section 15-107.
(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
Sec. 999.)
 
    (40 ILCS 5/15-107)  (from Ch. 108 1/2, par. 15-107)
    (Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
    Sec. 15-107. Employee.
    (a) "Employee" means any member of the educational,
administrative, secretarial, clerical, mechanical, labor or
other staff of an employer whose employment is permanent and
continuous or who is employed in a position in which services
are expected to be rendered on a continuous basis for at least
4 months or one academic term, whichever is less, who (A)
receives payment for personal services on a warrant issued
pursuant to a payroll voucher certified by an employer and
drawn by the State Comptroller upon the State Treasurer or by
an employer upon trust, federal or other funds, or (B) is on a
leave of absence without pay. Employment which is irregular,
intermittent or temporary shall not be considered continuous
for purposes of this paragraph.
    However, a person is not an "employee" if he or she:
        (1) is a student enrolled in and regularly attending
    classes in a college or university which is an employer,
    and is employed on a temporary basis at less than full
    time;
        (2) is currently receiving a retirement annuity or a
    disability retirement annuity under Section 15-153.2 from
    this System;
        (3) is on a military leave of absence;
        (4) is eligible to participate in the Federal Civil
    Service Retirement System and is currently making
    contributions to that system based upon earnings paid by an
    employer;
        (5) is on leave of absence without pay for more than 60
    days immediately following termination of disability
    benefits under this Article;
        (6) is hired after June 30, 1979 as a public service
    employment program participant under the Federal
    Comprehensive Employment and Training Act and receives
    earnings in whole or in part from funds provided under that
    Act; or
        (7) is employed on or after July 1, 1991 to perform
    services that are excluded by subdivision (a)(7)(f) or
    (a)(19) of Section 210 of the federal Social Security Act
    from the definition of employment given in that Section (42
    U.S.C. 410).
    (b) Any employer may, by filing a written notice with the
board, exclude from the definition of "employee" all persons
employed pursuant to a federally funded contract entered into
after July 1, 1982 with a federal military department in a
program providing training in military courses to federal
military personnel on a military site owned by the United
States Government, if this exclusion is not prohibited by the
federally funded contract or federal laws or rules governing
the administration of the contract.
    (c) Any person appointed by the Governor under the Civil
Administrative Code of the State is an employee, if he or she
is a participant in this system on the effective date of the
appointment.
    (d) A participant on lay-off status under civil service
rules is considered an employee for not more than 120 days from
the date of the lay-off.
    (e) A participant is considered an employee during (1) the
first 60 days of disability leave, (2) the period, not to
exceed one year, in which his or her eligibility for disability
benefits is being considered by the board or reviewed by the
courts, and (3) the period he or she receives disability
benefits under the provisions of Section 15-152, workers'
compensation or occupational disease benefits, or disability
income under an insurance contract financed wholly or partially
by the employer.
    (f) Absences without pay, other than formal leaves of
absence, of less than 30 calendar days, are not considered as
an interruption of a person's status as an employee. If such
absences during any period of 12 months exceed 30 work days,
the employee status of the person is considered as interrupted
as of the 31st work day.
    (g) A staff member whose employment contract requires
services during an academic term is to be considered an
employee during the summer and other vacation periods, unless
he or she declines an employment contract for the succeeding
academic term or his or her employment status is otherwise
terminated, and he or she receives no earnings during these
periods.
    (h) An individual who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department and who immediately after the
elimination of that fire department became employed by the fire
department of the City of Urbana or the City of Champaign shall
continue to be considered as an employee for purposes of this
Article for so long as the individual remains employed as a
firefighter by the City of Urbana or the City of Champaign. The
individual shall cease to be considered an employee under this
subsection (h) upon the first termination of the individual's
employment as a firefighter by the City of Urbana or the City
of Champaign.
    (i) An individual who is employed on a full-time basis as
an officer or employee of a statewide teacher organization that
serves System participants or an officer of a national teacher
organization that serves System participants may participate
in the System and shall be deemed an employee, provided that
(1) the individual has previously earned creditable service
under this Article, (2) the individual files with the System an
irrevocable election to become a participant before the
effective date of this amendatory Act of the 97th General
Assembly, (3) the individual does not receive credit for that
employment under any other Article of this Code, and (4) the
individual first became a full-time employee of the teacher
organization and becomes a participant before the effective
date of this amendatory Act of the 97th General Assembly. An
employee under this subsection (i) is responsible for paying to
the System both (A) employee contributions based on the actual
compensation received for service with the teacher
organization and (B) employer contributions equal to the normal
costs (as defined in Section 15-155) resulting from that
service; all or any part of these contributions may be paid on
the employee's behalf or picked up for tax purposes (if
authorized under federal law) by the teacher organization.
    A person who is an employee as defined in this subsection
(i) may establish service credit for similar employment prior
to becoming an employee under this subsection by paying to the
System for that employment the contributions specified in this
subsection, plus interest at the effective rate from the date
of service to the date of payment. However, credit shall not be
granted under this subsection for any such prior employment for
which the applicant received credit under any other provision
of this Code, or during which the applicant was on a leave of
absence under Section 15-113.2.
    (j) A person employed by the State Board of Higher
Education in a position with the Illinois Century Network as of
June 30, 2004 shall be considered to be an employee for so long
as he or she remains continuously employed after that date by
the Department of Central Management Services in a position
with the Illinois Century Network, the Bureau of Communication
and Computer Services, or, if applicable, any successor bureau
and meets the requirements of subsection (a).
    (k) The Board shall promulgate rules with respect to
determining whether any person is an employee within the
meaning of this Section. In the case of doubt as to whether any
person is an employee within the meaning of this Section or any
rule adopted by the Board, the decision of the Board shall be
final.
(Source: P.A. 97-651, eff. 1-5-12.)
 
    (40 ILCS 5/15-110)  (from Ch. 108 1/2, par. 15-110)
    Sec. 15-110. Basic compensation. "Basic compensation":
Subject to Section 15-111.5, the The gross basic rate of salary
or wages payable by an employer, including:
        (1) the value of maintenance, board, living quarters,
    personal laundry, or other allowances furnished in lieu of
    salary which are considered gross income under the federal
    Federal Internal Revenue Code of 1986, as amended; ,
        (2) the employee contributions required under Section
    15-157; , and
        (3) the amount paid by any employer to a custodial
    account for investment in regulated investment company
    stocks for the benefit of the employee pursuant to the
    University Employees Custodial Accounts Act; "An Act in
    relation to payments to custodial accounts for the benefit
    of employees of public institutions of higher education",
    approved September 9, 1983, and
        (4) the amount of the premium payable by any employer
    to an insurance company or companies on an annuity
    contract, pursuant to the employee's election to accept a
    reduction in earnings or forego an increase in earnings
    under Section 30c of the State Finance Act "An Act in
    relation to State Finance," approved June 10, 1919, as
    amended, or a tax-sheltered annuity plan approved by any
    employer; and
        (5) the amount of any elective deferral to a deferred
    compensation plan established under Article 24 of this Code
    pursuant to Section 457(b) of the federal Internal Revenue
    Code of 1986, as amended.
    Basic compensation does not include (1) salary or wages for
overtime or other extra service; (2) prospective salary or
wages under a summer teaching contract not yet entered upon;
and (3) overseas differential allowances, quarters allowances,
post allowances, educational allowances and transportation
allowances paid by an employer under a contract with the
federal government or its agencies for services rendered in
other countries. If an employee elects to receive in lieu of
cash salary or wages, fringe benefits which are not taxable
under the federal Federal Internal Revenue Code of 1986, as
amended, the amount of the cash salary or wages which is waived
shall be included in determining basic compensation.
(Source: P.A. 84-1308.)
 
    (40 ILCS 5/15-111)  (from Ch. 108 1/2, par. 15-111)
    (Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
    Sec. 15-111. Earnings.
    (a) "Earnings": Subject to Section 15-111.5, an An amount
paid for personal services equal to the sum of the basic
compensation plus extra compensation for summer teaching,
overtime or other extra service. For periods for which an
employee receives service credit under subsection (c) of
Section 15-113.1 or Section 15-113.2, earnings are equal to the
basic compensation on which contributions are paid by the
employee during such periods. Compensation for employment
which is irregular, intermittent and temporary shall not be
considered earnings, unless the participant is also receiving
earnings from the employer as an employee under Section 15-107.
    With respect to transition pay paid by the University of
Illinois to a person who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department:
        (1) "Earnings" includes transition pay paid to the
    employee on or after the effective date of this amendatory
    Act of the 91st General Assembly.
        (2) "Earnings" includes transition pay paid to the
    employee before the effective date of this amendatory Act
    of the 91st General Assembly only if (i) employee
    contributions under Section 15-157 have been withheld from
    that transition pay or (ii) the employee pays to the System
    before January 1, 2001 an amount representing employee
    contributions under Section 15-157 on that transition pay.
    Employee contributions under item (ii) may be paid in a
    lump sum, by withholding from additional transition pay
    accruing before January 1, 2001, or in any other manner
    approved by the System. Upon payment of the employee
    contributions on transition pay, the corresponding
    employer contributions become an obligation of the State.
    (b) For a Tier 2 member, the annual earnings shall not
exceed $106,800; however, that amount shall annually
thereafter be increased by the lesser of (i) 3% of that amount,
including all previous adjustments, or (ii) one half the annual
unadjusted percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, including all previous
adjustments.
    For the purposes of this Section, "consumer price index u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the boards of the retirement
systems and pension funds by November 1 of each year.
    (c) With each submission of payroll information in the
manner prescribed by the System, the employer shall certify
that the payroll information is correct and complies with all
applicable State and federal laws.
(Source: P.A. 98-92, eff. 7-16-13.)
 
    (40 ILCS 5/15-111.5 new)
    Sec. 15-111.5. Basic compensation and earnings
restrictions. For an employee who first becomes a participant
on or after the effective date of this amendatory Act of the
99th General Assembly, basic compensation under Section 15-110
and earnings under Section 15-111 shall not include bonuses,
housing allowances, vehicle allowances, social club dues, or
athletic club dues.
 
    (40 ILCS 5/15-113.11)
    Sec. 15-113.11. Service for periods of voluntary or
involuntary furlough.
    (a) A participant may establish creditable service and
earnings credit for periods of furlough beginning on or after
July 1, 2009 and ending on or before June 30, 2011. To receive
this credit, the participant must (i) apply in writing to the
System before December 31, 2011; (ii) not receive compensation
from an employer for any furlough period; and (iii) make, on an
after-tax basis, employee contributions required under Section
15-157 based on the rate of basic compensation during the
periods of furlough, plus an amount determined by the Board to
be equal to the employer's normal cost of the benefit, plus
compounded interest at the actuarially assumed rate from the
date of voluntary or involuntary furlough to the date of
payment. The participant shall provide, at the time of
application, written certification from the employer providing
the total number of furlough days a participant has been
required to take.
    (b) A participant may establish creditable service and
earnings credit for periods of furlough beginning on or after
July 1, 2015 and ending on or before June 30, 2017. To receive
this credit, the participant must (i) apply in writing to the
System before December 31, 2018; (ii) not receive compensation
from an employer for any furlough period; and (iii) make, on an
after-tax basis, employee contributions required under Section
15-157 based on the rate of basic compensation during the
periods of furlough, plus an amount determined by the Board to
be equal to the employer's normal cost of the benefit, plus
compounded interest at the actuarially assumed rate from the
date of voluntary or involuntary furlough to the date of
payment. The participant shall provide, at the time of
application, written certification from the employer providing
the total number of furlough days a participant has been
required to take.
(Source: P.A. 96-961, eff. 7-2-10.)
 
    (40 ILCS 5/15-113.12 new)
    Sec. 15-113.12. Earnings for periods of voluntary pay
reduction taken in lieu of furlough. A participant may
establish earnings credit for periods of voluntary pay
reduction, taken in lieu of furlough, beginning on or after
July 1, 2015 and ending on or before June 30, 2017. To receive
this credit, the participant must: (1) apply in writing to the
System before December 31, 2018; and (2) make, on an after-tax
basis, employee contributions required under Section 15-157
based on the voluntary reduction in pay, plus an amount
determined by the Board to be equal to the employer's normal
cost of the benefit, plus compounded interest at the
actuarially assumed rate from the date of voluntary reduction
in pay to the date of payment. The participant shall provide,
at the time of application, (i) written certification from the
employer providing the total voluntary reduction in pay per pay
period for each pay period with a voluntary reduction in pay
and (ii) written certification from the employer stating that
the voluntary reduction in pay was taken in lieu of furlough.
 
    (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
    (Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
    Sec. 15-155. Employer contributions.
    (a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
    The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
    (a-1) For State fiscal years 2012 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
    For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.
    For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$702,514,000 and shall be made from the State Pensions Fund and
proceeds of bonds sold in fiscal year 2010 pursuant to Section
7.2 of the General Obligation Bond Act, less (i) the pro rata
share of bond sale expenses determined by the System's share of
total bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2010, (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
    Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 15-165 and shall be made from the State
Pensions Fund and proceeds of bonds sold in fiscal year 2011
pursuant to Section 7.2 of the General Obligation Bond Act,
less (i) the pro rata share of bond sale expenses determined by
the System's share of total bond proceeds, (ii) any amounts
received from the General Revenue Fund in fiscal year 2011, and
(iii) any reduction in bond proceeds due to the issuance of
discounted bonds, if applicable.
    Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
    Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
    Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
    (b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the
purpose of this Article, but funds of alumni associations,
foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
    (b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this
System pursuant to subsection (h) of Section 15-107. The rate
of contributions to be made by those municipalities shall be
determined annually by the Board on the basis of the actuarial
assumptions adopted by the Board and the recommendations of the
actuary, and shall be expressed as a percentage of salary for
each such employee. The Board shall certify the rate to the
affected municipalities as soon as may be practical. The
employer contributions required under this subsection shall be
remitted by the municipality to the System at the same time and
in the same manner as employee contributions.
    (c) Through State fiscal year 1995: The total employer
contribution shall be apportioned among the various funds of
the State and other employers, whether trust, federal, or other
funds, in accordance with actuarial procedures approved by the
Board. State of Illinois contributions for employers receiving
State appropriations for personal services shall be payable
from appropriations made to the employers or to the System. The
contributions for Class I community colleges covering earnings
other than those paid from trust and federal funds, shall be
payable solely from appropriations to the Illinois Community
College Board or the System for employer contributions.
    (d) Beginning in State fiscal year 1996, the required State
contributions to the System shall be appropriated directly to
the System and shall be payable through vouchers issued in
accordance with subsection (c) of Section 15-165, except as
provided in subsection (g).
    (e) The State Comptroller shall draw warrants payable to
the System upon proper certification by the System or by the
employer in accordance with the appropriation laws and this
Code.
    (f) Normal costs under this Section means liability for
pensions and other benefits which accrues to the System because
of the credits earned for service rendered by the participants
during the fiscal year and expenses of administering the
System, but shall not include the principal of or any
redemption premium or interest on any bonds issued by the Board
or any expenses incurred or deposits required in connection
therewith.
    (g) If the amount of a participant's earnings for any
academic year used to determine the final rate of earnings,
determined on a full-time equivalent basis, exceeds the amount
of his or her earnings with the same employer for the previous
academic year, determined on a full-time equivalent basis, by
more than 6%, the participant's employer shall pay to the
System, in addition to all other payments required under this
Section and in accordance with guidelines established by the
System, the present value of the increase in benefits resulting
from the portion of the increase in earnings that is in excess
of 6%. This present value shall be computed by the System on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the System that is available
at the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
    Whenever it determines that a payment is or may be required
under this subsection (g), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection
(h) or (i) of this Section, must include an affidavit setting
forth and attesting to all facts within the employer's
knowledge that are pertinent to the applicability of subsection
(h) or (i). Upon receiving a timely application for
recalculation, the System shall review the application and, if
appropriate, recalculate the amount due.
    The employer contributions required under this subsection
(g) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
    When assessing payment for any amount due under this
subsection (g), the System shall include earnings, to the
extent not established by a participant under Section 15-113.11
or 15-113.12, that would have been paid to the participant had
the participant not taken (i) periods of voluntary or
involuntary furlough occurring on or after July 1, 2015 and on
or before June 30, 2017 or (ii) periods of voluntary pay
reduction in lieu of furlough occurring on or after July 1,
2015 and on or before June 30, 2017. Determining earnings that
would have been paid to a participant had the participant not
taken periods of voluntary or involuntary furlough or periods
of voluntary pay reduction shall be the responsibility of the
employer, and shall be reported in a manner prescribed by the
System.
    (h) This subsection (h) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
    When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to
participants under contracts or collective bargaining
agreements entered into, amended, or renewed before June 1,
2005.
    When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to a
participant at a time when the participant is 10 or more years
from retirement eligibility under Section 15-135.
    When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases resulting from
overload work, including a contract for summer teaching, or
overtime when the employer has certified to the System, and the
System has approved the certification, that: (i) in the case of
overloads (A) the overload work is for the sole purpose of
academic instruction in excess of the standard number of
instruction hours for a full-time employee occurring during the
academic year that the overload is paid and (B) the earnings
increases are equal to or less than the rate of pay for
academic instruction computed using the participant's current
salary rate and work schedule; and (ii) in the case of
overtime, the overtime was necessary for the educational
mission.
    When assessing payment for any amount due under subsection
(g), the System shall exclude any earnings increase resulting
from (i) a promotion for which the employee moves from one
classification to a higher classification under the State
Universities Civil Service System, (ii) a promotion in academic
rank for a tenured or tenure-track faculty position, or (iii) a
promotion that the Illinois Community College Board has
recommended in accordance with subsection (k) of this Section.
These earnings increases shall be excluded only if the
promotion is to a position that has existed and been filled by
a member for no less than one complete academic year and the
earnings increase as a result of the promotion is an increase
that results in an amount no greater than the average salary
paid for other similar positions.
    (i) When assessing payment for any amount due under
subsection (g), the System shall exclude any salary increase
described in subsection (h) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (g) of this Section.
    (j) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
        (1) The number of recalculations required by the
    changes made to this Section by Public Act 94-1057 for each
    employer.
        (2) The dollar amount by which each employer's
    contribution to the System was changed due to
    recalculations required by Public Act 94-1057.
        (3) The total amount the System received from each
    employer as a result of the changes made to this Section by
    Public Act 94-4.
        (4) The increase in the required State contribution
    resulting from the changes made to this Section by Public
    Act 94-1057.
    (k) The Illinois Community College Board shall adopt rules
for recommending lists of promotional positions submitted to
the Board by community colleges and for reviewing the
promotional lists on an annual basis. When recommending
promotional lists, the Board shall consider the similarity of
the positions submitted to those positions recognized for State
universities by the State Universities Civil Service System.
The Illinois Community College Board shall file a copy of its
findings with the System. The System shall consider the
findings of the Illinois Community College Board when making
determinations under this Section. The System shall not exclude
any earnings increases resulting from a promotion when the
promotion was not submitted by a community college. Nothing in
this subsection (k) shall require any community college to
submit any information to the Community College Board.
    (l) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
    As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
    (m) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 97-813, eff. 7-13-12; 98-92, eff. 7-16-13;
98-463, eff. 8-16-13.)
 
    (40 ILCS 5/15-158.2)
    Sec. 15-158.2. Self-managed plan.
    (a) Purpose. The General Assembly finds that it is
important for colleges and universities to be able to attract
and retain the most qualified employees and that in order to
attract and retain these employees, colleges and universities
should have the flexibility to provide a defined contribution
plan as an alternative for eligible employees who elect not to
participate in a defined benefit retirement program provided
under this Article. Accordingly, the State Universities
Retirement System is hereby authorized to establish and
administer a self-managed plan, which shall offer
participating employees the opportunity to accumulate assets
for retirement through a combination of employee and employer
contributions that may be invested in mutual funds, collective
investment funds, or other investment products and used to
purchase annuity contracts, either fixed or variable or a
combination thereof. The plan must be qualified under the
Internal Revenue Code of 1986.
    (b) Adoption by employers. Each employer subject to this
Article may elect to adopt the self-managed plan established
under this Section; this election is irrevocable. An employer's
election to adopt the self-managed plan makes available to the
eligible employees of that employer the elections described in
Section 15-134.5.
    The State Universities Retirement System shall be the plan
sponsor for the self-managed plan and shall prepare a plan
document and prescribe such rules and procedures as are
considered necessary or desirable for the administration of the
self-managed plan. Consistent with its fiduciary duty to the
participants and beneficiaries of the self-managed plan, the
Board of Trustees of the System may delegate aspects of plan
administration as it sees fit to companies authorized to do
business in this State, to the employers, or to a combination
of both.
    (c) Selection of service providers and funding vehicles.
The System, in consultation with the employers, shall solicit
proposals to provide administrative services and funding
vehicles for the self-managed plan from insurance and annuity
companies and mutual fund companies, banks, trust companies, or
other financial institutions authorized to do business in this
State. In reviewing the proposals received and approving and
contracting with no fewer than 2 and no more than 7 companies,
the Board of Trustees of the System shall consider, among other
things, the following criteria:
        (1) the nature and extent of the benefits that would be
    provided to the participants;
        (2) the reasonableness of the benefits in relation to
    the premium charged;
        (3) the suitability of the benefits to the needs and
    interests of the participating employees and the employer;
        (4) the ability of the company to provide benefits
    under the contract and the financial stability of the
    company; and
        (5) the efficacy of the contract in the recruitment and
    retention of employees.
    The System, in consultation with the employers, shall
periodically review each approved company. A company may
continue to provide administrative services and funding
vehicles for the self-managed plan only so long as it continues
to be an approved company under contract with the Board.
    (d) Employee Direction. Employees who are participating in
the program must be allowed to direct the transfer of their
account balances among the various investment options offered,
subject to applicable contractual provisions. The participant
shall not be deemed a fiduciary by reason of providing such
investment direction. A person who is a fiduciary shall not be
liable for any loss resulting from such investment direction
and shall not be deemed to have breached any fiduciary duty by
acting in accordance with that direction. The System shall
provide advance notice to the participant of the participant's
obligation to direct the investment of employee and employer
contributions into one or more investment funds selected by the
System at the time he or she makes his or her initial
retirement plan selection. If a participant fails to direct the
investment of employee and employer contributions into the
various investment options offered to the participant when
making his or her initial retirement election choice, that
failure shall require the System to invest the employee and
employer contributions in a default investment fund on behalf
of the participant, and the investment shall be deemed to have
been made at the participant's investment direction. The
participant has the right to transfer account balances out of
the default investment fund during time periods designated by
the System. Neither the System nor the employer guarantees any
of the investments in the employee's account balances.
    (e) Participation. An employee eligible to participate in
the self-managed plan must make a written election in
accordance with the provisions of Section 15-134.5 and the
procedures established by the System. Participation in the
self-managed plan by an electing employee shall begin on the
first day of the first pay period following the later of the
date the employee's election is filed with the System or the
effective date as of which the employee's employer begins to
offer participation in the self-managed plan. Employers may not
make the self-managed plan available earlier than January 1,
1998. An employee's participation in any other retirement
program administered by the System under this Article shall
terminate on the date that participation in the self-managed
plan begins.
    An employee who has elected to participate in the
self-managed plan under this Section must continue
participation while employed in an eligible position, and may
not participate in any other retirement program administered by
the System under this Article while employed by that employer
or any other employer that has adopted the self-managed plan,
unless the self-managed plan is terminated in accordance with
subsection (i).
    Notwithstanding any other provision of this Article, a Tier
2 member shall have the option to enroll in the self-managed
plan.
    Participation in the self-managed plan under this Section
shall constitute membership in the State Universities
Retirement System.
    A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
    (f) Establishment of Initial Account Balance. If at the
time an employee elects to participate in the self-managed plan
he or she has rights and credits in the System due to previous
participation in the traditional benefit package, the System
shall establish for the employee an opening account balance in
the self-managed plan, equal to the amount of contribution
refund that the employee would be eligible to receive under
Section 15-154 if the employee terminated employment on that
date and elected a refund of contributions, except that this
hypothetical refund shall include interest at the effective
rate for the respective years. The System shall transfer assets
from the defined benefit retirement program to the self-managed
plan, as a tax free transfer in accordance with Internal
Revenue Service guidelines, for purposes of funding the
employee's opening account balance.
    (g) No Duplication of Service Credit. Notwithstanding any
other provision of this Article, an employee may not purchase
or receive service or service credit applicable to any other
retirement program administered by the System under this
Article for any period during which the employee was a
participant in the self-managed plan established under this
Section.
    (h) Contributions. The self-managed plan shall be funded by
contributions from employees participating in the self-managed
plan and employer contributions as provided in this Section.
    The contribution rate for employees participating in the
self-managed plan under this Section shall be equal to the
employee contribution rate for other participants in the
System, as provided in Section 15-157. This required
contribution shall be made as an "employer pick-up" under
Section 414(h) of the Internal Revenue Code of 1986 or any
successor Section thereof. Any employee participating in the
System's traditional benefit package prior to his or her
election to participate in the self-managed plan shall continue
to have the employer pick up the contributions required under
Section 15-157. However, the amounts picked up after the
election of the self-managed plan shall be remitted to and
treated as assets of the self-managed plan. In no event shall
an employee have an option of receiving these amounts in cash.
Employees may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules prescribed by
the System.
    The program shall provide for employer contributions to be
credited to each self-managed plan participant at a rate of
7.6% of the participating employee's salary, less the amount
used by the System to provide disability benefits for the
employee. The amounts so credited shall be paid into the
participant's self-managed plan accounts in a manner to be
prescribed by the System.
    An amount of employer contribution, not exceeding 1% of the
participating employee's salary, shall be used for the purpose
of providing the disability benefits of the System to the
employee. Prior to the beginning of each plan year under the
self-managed plan, the Board of Trustees shall determine, as a
percentage of salary, the amount of employer contributions to
be allocated during that plan year for providing disability
benefits for employees in the self-managed plan.
    The State of Illinois shall make contributions by
appropriations to the System of the employer contributions
required for employees who participate in the self-managed plan
under this Section. The amount required shall be certified by
the Board of Trustees of the System and paid by the State in
accordance with Section 15-165. The System shall not be
obligated to remit the required employer contributions to any
of the insurance and annuity companies, mutual fund companies,
banks, trust companies, financial institutions, or other
sponsors of any of the funding vehicles offered under the
self-managed plan until it has received the required employer
contributions from the State. In the event of a deficiency in
the amount of State contributions, the System shall implement
those procedures described in subsection (c) of Section 15-165
to obtain the required funding from the General Revenue Fund.
    (i) Termination. The self-managed plan authorized under
this Section may be terminated by the System, subject to the
terms of any relevant contracts, and the System shall have no
obligation to reestablish the self-managed plan under this
Section. This Section does not create a right to continued
participation in any self-managed plan set up by the System
under this Section. If the self-managed plan is terminated, the
participants shall have the right to participate in one of the
other retirement programs offered by the System and receive
service credit in such other retirement program for any years
of employment following the termination.
    (j) Vesting; Withdrawal; Return to Service. A participant
in the self-managed plan becomes vested in the employer
contributions credited to his or her accounts in the
self-managed plan on the earliest to occur of the following:
(1) completion of 5 years of service with an employer described
in Section 15-106; (2) the death of the participating employee
while employed by an employer described in Section 15-106, if
the participant has completed at least 1 1/2 years of service;
or (3) the participant's election to retire and apply the
reciprocal provisions of Article 20 of this Code.
    A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the self-managed
plan while not yet eligible for retirement under this Article
(and Article 20, if applicable) shall forfeit all service
credit and accrued rights in the System; if subsequently
re-employed, the participant shall be considered a new
employee. If a former participant again becomes a participating
employee (or becomes employed by a participating system under
Article 20 of this Code) and continues as such for at least 2
years, all such rights, service credits, and previous status as
a participant shall be restored upon repayment of the amount of
the distribution, without interest.
    (k) Benefit amounts. If an employee who is vested in
employer contributions terminates employment, the employee
shall be entitled to a benefit which is based on the account
values attributable to both employer and employee
contributions and any investment return thereon.
    If an employee who is not vested in employer contributions
terminates employment, the employee shall be entitled to a
benefit based solely on the account values attributable to the
employee's contributions and any investment return thereon,
and the employer contributions and any investment return
thereon shall be forfeited. Any employer contributions which
are forfeited shall be held in escrow by the company investing
those contributions and shall be used as directed by the System
for future allocations of employer contributions or for the
restoration of amounts previously forfeited by former
participants who again become participating employees.
(Source: P.A. 98-92, eff. 7-16-13.)
 
    (40 ILCS 5/15-168)  (from Ch. 108 1/2, par. 15-168)
    Sec. 15-168. To require information.
    (a) To require such information as shall be necessary for
the proper operation of the system from any participant or
beneficiary or annuitant benefit recipient or from any current
or former employer of a participant or annuitant. Such
information may include, but is not limited to, employment
contracts current or former participant.
    (b) When the System submits a request for information under
subsection (a) of this Section, the employer shall respond
within 90 calendar days of the System's request. Beginning on
the 91st calendar day after the System's request, the System
may assess a penalty of $250 per calendar day until receipt of
the information by the System, with a maximum penalty of
$25,000. All payments must be received within one calendar year
after receipt of the information by the System or one calendar
year of reaching the maximum penalty of $25,000, whichever
occurs earlier. If the employer fails to make complete payment
within the applicable timeframe, then the System may, after
giving notice to the employer, certify the delinquent amount to
the State Comptroller, and the Comptroller shall thereupon
deduct the certified delinquent amount from State funds payable
to the employer and pay them instead to the System.
    (c) If a participant, beneficiary, or annuitant fails to
provide any information that is necessary for the calculation,
payment, or finalization of any benefit under this Article
within 90 calendar days of the date of the System's request
under subsection (a) of this Section, then the System may
immediately cease processing the benefit and may not pay any
additional benefit payment to the participant, beneficiary, or
annuitant until the requested information is provided.
(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
 
    (40 ILCS 5/15-168.2)
    Sec. 15-168.2. Audit of employers.
    (a) Beginning August 1, 2013, the System may audit the
employment records and payroll records of all employers. When
the System audits an employer, it shall specify the exact
information it requires, which may include but need not be
limited to the names, titles, and earnings history of every
individual receiving compensation from the employer. If an
employer is audited by the System, then the employer must
provide to the System all necessary documents and records
within 60 calendar days after receiving notification from the
System. When the System audits an employer, it shall send
related correspondence by certified mail.
    (b) When the System submits a request for information under
subsection (a) of this Section, the employer shall respond
within 60 calendar days of the System's request. Beginning on
the 61st calendar day after the System's request, the System
may assess a penalty of $250 per calendar day until receipt of
the information by the System, with a maximum penalty of
$25,000. All payments must be received by the System within one
calendar year after receipt of the information by the System or
one calendar year after reaching the maximum penalty of
$25,000, whichever occurs earlier. If the employer fails to
make complete payment within the applicable timeframe, then the
System may, after giving notice to the employer, certify the
delinquent amount to the State Comptroller, and the Comptroller
shall thereupon deduct the certified delinquent amount from
State funds payable to the employer and pay them instead to the
System.
(Source: P.A. 97-968, eff. 8-16-12.)