Public Act 094-0356
Public Act 0356 94TH GENERAL ASSEMBLY
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Public Act 094-0356
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| HB0373 Enrolled |
LRB094 02486 LRD 32487 b |
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| 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 3-110 and 7-139 and adding Sections 3-110.8 and | 7-139.11 as follows:
| (40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
| Sec. 3-110. Creditable service.
| (a) "Creditable service" is the time served by a police | officer as a member
of a regularly constituted police force of | a municipality. In computing
creditable service furloughs | without pay exceeding 30 days shall not be
counted, but all | leaves of absence for illness or accident, regardless of
| length, and all periods of disability retirement for which a | police officer has
received no disability pension payments | under this Article shall be counted.
| (a-5) Up to 3 years of time during which the police officer | receives
a disability pension under Section 3-114.1, 3-114.2, | 3-114.3, or 3-114.6
shall be counted as creditable service, | provided that
(i) the police officer returns to active service | after the disability for a
period at least equal to the period | for which credit is to be established and
(ii) the police | officer makes contributions to the fund based on the rates
| specified in Section 3-125.1 and the salary upon which the | disability pension
is based. These contributions may be paid at | any time prior to the
commencement of a retirement pension. The | police officer may, but need not,
elect to have the | contributions deducted from the disability pension or to
pay | them in installments on a schedule approved by the board. If | not
deducted from the disability pension, the contributions | shall include
interest at the rate of 6% per year, compounded | annually, from the date
for which service credit is being |
| established to the date of payment. If
contributions are paid | under this subsection (a-5) in excess of those
needed to | establish the credit, the excess shall be refunded. This
| subsection (a-5) applies to persons receiving a disability | pension under
Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on | the effective date of this
amendatory Act of the 91st General | Assembly, as well as persons who begin to
receive such a | disability pension after that date.
| (b) Creditable service includes all periods of service in | the military,
naval or air forces of the United States entered | upon while an active police
officer of a municipality, provided | that upon applying for a permanent pension,
and in accordance | with the rules of the board, the police officer pays into the
| fund the amount the officer would have contributed if he or she | had been a
regular contributor during such period, to the | extent that the municipality
which the police officer served | has not made such contributions in the
officer's behalf. The | total amount of such creditable service shall not
exceed 5 | years, except that any police officer who on July 1, 1973 had | more
than 5 years of such creditable service shall receive the | total amount thereof.
| (c) Creditable service also includes service rendered by a | police
officer while on leave of absence from a police | department to serve as an
executive of an organization whose | membership consists of members of a
police department, subject | to the following conditions: (i) the police
officer is a | participant of a fund established under this Article with at
| least 10 years of service as a police officer; (ii) the police | officer
received no credit for such service under any other | retirement system,
pension fund, or annuity and benefit fund | included in this Code; (iii)
pursuant to the rules of the board | the police officer pays to the fund the
amount he or she would | have contributed had the officer been an active
member of the | police department; and (iv) the organization pays a
| contribution equal to the municipality's normal cost for that
| period of service.
|
| (d)(1) Creditable service also includes periods of | service originally
established in another police pension | fund under this Article or in the Fund
established under | Article 7 of this Code for which (i) the contributions have
| been transferred under Section 3-110.7 or Section 7-139.9 | and (ii) any
additional contribution required under | paragraph (2) of this subsection has
been paid in full in | accordance with the requirements of this subsection (d).
| (2) If the board of the pension fund to which | creditable service and
related
contributions are | transferred under Section 3-110.7 or 7-139.9 determines | that
the amount transferred is less than the true cost to | the pension fund of
allowing that creditable service to be | established, then in order to establish
that creditable | service the police officer must pay to the pension fund, | within
the payment period specified in paragraph (3) of | this subsection, an additional
contribution equal to the | difference, as determined by the board in accordance
with | the rules and procedures adopted under paragraph (6) of | this subsection.
| (3) Except as provided in paragraph (4), the additional
| contribution must be paid to the board (i) within 5 years | from the date of the
transfer of contributions under | Section 3-110.7 or 7-139.9 and (ii) before the
police | officer terminates service with the fund. The additional | contribution
may be paid in a lump sum or in accordance | with a schedule of installment
payments authorized by the | board.
| (4) If the police officer dies in service before | payment in full has been
made and before the expiration of | the 5-year payment period, the surviving
spouse of the | officer may elect to pay the unpaid amount on the officer's
| behalf within 6 months after the date of death, in which | case the creditable
service shall be granted as though the | deceased police officer had paid the
remaining balance on | the day before the date of death.
|
| (5) If the additional contribution is not paid in full | within the
required time, the creditable service shall not | be granted and the
police officer (or the officer's | surviving spouse or estate) shall be entitled
to receive a | refund of (i) any partial payment of the additional | contribution
that has been made by the police officer and | (ii) those portions of the amounts
transferred under | subdivision (a)(1) of Section 3-110.7 or subdivisions | (a)(1)
and (a)(3) of Section 7-139.9 that represent | employee contributions paid by the
police officer (but not | the accumulated interest on those contributions) and
| interest paid by the police officer to the prior pension | fund in order to
reinstate service terminated by acceptance | of a refund.
| At the time of paying a refund under this item (5), the | pension fund
shall also repay to the pension fund from | which the contributions were
transferred under Section | 3-110.7 or 7-139.9 the amount originally transferred
under | subdivision (a)(2) of that Section, plus interest at the | rate of 6% per
year, compounded annually, from the date of | the original transfer to the date
of repayment. Amounts | repaid to the Article 7 fund under this provision shall
be | credited to the appropriate municipality.
| Transferred credit that is not granted due to failure | to pay the additional
contribution within the required time | is lost; it may not be transferred to
another pension fund | and may not be reinstated in the pension fund from which
it | was transferred.
| (6) The Public Employee Pension Fund Division of the | Department of
Insurance
shall establish by rule the manner | of making the calculation required under
paragraph (2) of | this subsection, taking into account the appropriate | actuarial
assumptions; the police officer's service, age, | and salary history; the level
of funding of the pension | fund to which the credits are being transferred; and
any | other factors that the Division determines to be relevant. |
| The rules may
require that all calculations made under | paragraph (2) be reported to the
Division by the board | performing the calculation, together with documentation
of | the creditable service to be transferred, the amounts of | contributions and
interest to be transferred, the manner in | which the calculation was performed,
the numbers relied | upon in making the calculation, the results of the
| calculation, and any other information the Division may | deem useful.
| (e)(1) Creditable service also includes periods of | service originally
established in the Fund
established | under Article 7 of this Code for which the contributions | have
been transferred under Section 7-139.11.
| (2) If the board of the pension fund to which | creditable service and
related
contributions are | transferred under Section 7-139.11 determines that
the | amount transferred is less than the true cost to the | pension fund of
allowing that creditable service to be | established, then the amount of creditable service the | police officer may establish under this subsection (e) | shall be reduced by an amount equal to the difference, as | determined by the board in accordance
with the rules and | procedures adopted under paragraph (3) of this subsection.
| (3) The Public Pension Division of the Department of
| Financial and Professional Regulation
shall establish by | rule the manner of making the calculation required under
| paragraph (2) of this subsection, taking into account the | appropriate actuarial
assumptions; the police officer's | service, age, and salary history; the level
of funding of | the pension fund to which the credits are being | transferred; and
any other factors that the Division | determines to be relevant. The rules may
require that all | calculations made under paragraph (2) be reported to the
| Division by the board performing the calculation, together | with documentation
of the creditable service to be | transferred, the amounts of contributions and
interest to |
| be transferred, the manner in which the calculation was | performed,
the numbers relied upon in making the | calculation, the results of the
calculation, and any other | information the Division may deem useful.
| (Source: P.A. 90-460, eff. 8-17-97; 91-887, eff. 7-6-00; | 91-939, eff.
2-1-01.)
| (40 ILCS 5/3-110.8 new)
| Sec. 3-110.8. Transfer to IMRF. | (a) Until January 1, 2006, any active member of the | Illinois Municipal Retirement Fund who
has less than 8 years of | creditable service in a police pension fund under this Article, | may apply for transfer of his creditable service accumulated
in | that fund to the Illinois Municipal
Retirement Fund. The | creditable service shall be transferred upon payment by
the | police pension fund to the Illinois Municipal Retirement Fund | of an amount
equal to: | (1) the amounts accumulated to the credit of the | applicant on the books
of the fund on the date of transfer; | and
| (2) employer contributions in an amount equal to the | amount determined
under subparagraph (1); and
| (3) any interest paid by the applicant in order to | reinstate service.
| Participation in this Fund shall terminate on the date of | transfer.
| (b) Until January 1, 2006, any member under subsection (a) | may reinstate service which was
terminated by receipt of a | refund, by payment to the police pension fund of the
amount of | the refund with interest thereon at the rate of 6% per year,
| compounded annually, from the date of refund to the date of | payment.
| (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
| Sec. 7-139. Credits and creditable service to employees.
| (a) Each participating employee shall be granted credits |
| and creditable
service, for purposes of determining the amount | of any annuity or benefit
to which he or a beneficiary is | entitled, as follows:
| 1. For prior service: Each participating employee who | is an employee
of a participating municipality or | participating instrumentality on the
effective date shall | be granted creditable service, but no credits under
| paragraph 2 of this subsection (a), for periods of prior | service for which
credit has not been received under any | other pension fund or retirement system
established under | this Code, as follows:
| If the effective date of participation for the | participating municipality
or participating | instrumentality is on or before January 1, 1998, creditable
| service shall be granted for the entire period of prior | service with that
employer without any employee | contribution.
| If the effective date of participation for the | participating municipality
or participating | instrumentality is after January 1, 1998, creditable
| service shall be granted for the last 20% of the period of | prior service with
that employer, but no more than 5 years, | without any employee contribution. A
participating | employee may establish creditable service for the | remainder of
the period of prior service with that employer | by making an application in
writing, accompanied by payment | of an employee contribution in an
amount determined by the | Fund, based on the employee contribution rates in
effect at | the time of application for the creditable service and the | employee's
salary rate on the effective date of | participation for that employer, plus
interest at the | effective rate from the date of the prior service to the | date
of payment. Application for this creditable service | may be made at any time
while the employee is still in | service.
| A municipality that (i) has at least 35 employees; (ii) |
| is located in a county with at least 2,000,000 inhabitants; | and (iii) maintains an independent defined benefit pension | plan for the benefit of its eligible employees may restrict | creditable service in whole or in part for periods of prior | service with the employer if the governing body of the | municipality adopts an irrevocable resolution to restrict | that creditable service and files the resolution with the | board before the municipality's effective date of | participation.
| Any person who has withdrawn from the service of a | participating
municipality
or participating | instrumentality prior to the effective date, who reenters
| the service of the same municipality or participating | instrumentality after
the effective date and becomes a | participating employee is entitled to
creditable service | for prior service as otherwise provided in this
subdivision | (a)(1) only if he or she renders 2 years of service as a
| participating employee after the effective date. | Application
for such service must be made while in a | participating status.
The salary rate to be used in the | calculation of the required employee
contribution, if any, | shall be the employee's salary rate at the time of first
| reentering service with the employer after the employer's | effective date of
participation.
| 2. For current service, each participating employee | shall be
credited with:
| a. Additional credits of amounts equal to each | payment of additional
contributions received from him | under Section 7-173, as of the
date the corresponding | payment of earnings is payable to him.
| b. Normal credits of amounts equal to each payment | of normal
contributions received from him, as of the | date the corresponding payment of
earnings is payable | to him, and normal contributions made for the purpose | of
establishing out-of-state service credits as | permitted under the conditions set
forth in paragraph 6 |
| of this subsection (a).
| c. Municipality credits in an amount equal to 1.4 | times the normal
credits, except those established by | out-of-state service credits, as of
the date of | computation of any benefit if these credits would | increase
the benefit.
| d. Survivor credits equal to each payment of | survivor contributions
received from the participating | employee as of the date the
corresponding payment of | earnings is payable, and survivor contributions made
| for the purpose of establishing out-of-state service | credits.
| 3. For periods of temporary and total and permanent | disability
benefits, each employee receiving disability | benefits shall be granted
creditable service for the period | during which disability benefits are
payable. Normal and | survivor credits, based upon the rate of earnings
applied | for disability benefits, shall also be granted if such | credits
would result in a higher benefit to any such | employee or his
beneficiary.
| 4. For authorized leave of absence without pay: A | participating
employee shall be granted credits and | creditable service for periods of
authorized leave of | absence without pay under the following
conditions:
| a. An application for credits and creditable | service is submitted to the
board while the employee is | in a status of
active employment, and within 2 years | after termination of the
leave of absence period for | which credits and creditable service are
sought.
| b. Not more than 12 complete months of creditable | service
for authorized leave of absence without pay | shall be counted for purposes of
determining any | benefits payable under this Article.
| c. Credits and creditable service shall be granted | for leave of
absence only if such leave is approved by | the governing body of the
municipality, including |
| approval of the estimated cost thereof to the
| municipality as determined by the fund, and employee | contributions, plus
interest at the effective rate | applicable for each year from the end of
the period of | leave to date of payment, have been paid to the fund in
| accordance with Section 7-173. The contributions shall | be computed upon the
assumption earnings continued | during the period of leave at the rate in
effect when | the leave began.
| d. Benefits under the provisions of Sections | 7-141, 7-146, 7-150
and 7-163 shall become payable to | employees on authorized leave of
absence, or their | designated beneficiary, only if such leave of absence
| is creditable hereunder, and if the employee has at | least one year of
creditable service other than the | service granted for leave of absence.
Any employee | contributions due may be deducted from any benefits
| payable.
| e. No credits or creditable service shall be | allowed for leave of
absence without pay during any | period of prior service.
| 5. For military service: The governing body of a | municipality or
participating instrumentality may elect to | allow creditable service to
participating employees who | leave their employment to serve in the armed
forces of the | United States for all periods of such service, provided
| that the person returns to active employment within 90 days | after
completion
of full time active duty, but no | creditable service shall be allowed such
person for any | period that can be used in the computation of a pension
or | any other pay or benefit, other than pay for active duty, | for service
in any branch of the armed forces of the United | States. If necessary to
the computation of any benefit, the | board shall establish municipality
credits for | participating employees under this paragraph on the
| assumption that the employee received earnings at the rate |
| received at
the time he left the employment to enter the | armed forces. A
participating employee in the armed forces | shall not be considered an
employee during such period of | service and no additional death and no
disability benefits | are payable for death or disability during such period.
| Any participating employee who left his employment | with a
municipality or participating instrumentality to | serve in the armed
forces of the United States and who | again became a participating
employee within 90 days after | completion of full time active duty by
entering the service | of a different municipality or participating
| instrumentality, which has elected to allow creditable | service for
periods of military service under the preceding | paragraph, shall also be
allowed creditable service for his | period of military service on the
same terms that would | apply if he had been employed, before entering
military | service, by the municipality or instrumentality which | employed
him after he left the military service and the | employer costs arising in
relation to such grant of | creditable service shall be charged to and
paid by that | municipality or instrumentality.
| Notwithstanding the foregoing, any participating | employee
shall be entitled to creditable service as | required by any federal law
relating to re-employment | rights of persons who served in the United States
Armed | Services. Such creditable service shall be granted upon | payment by
the member of an amount equal to the employee | contributions which would
have been required had the | employee continued in service at the same
rate of earnings | during the military leave period, plus interest at
the | effective rate.
| 5.1. In addition to any creditable service established | under
paragraph 5 of this subsection (a), creditable | service may be granted for
up to 24 months of service in | the armed forces of the United States.
| In order to receive creditable service for military |
| service under this
paragraph 5.1, a participating employee | must (1) apply to the Fund
in writing and provide evidence | of the military service that is satisfactory
to the Board; | (2) obtain the written approval of the current employer; | and (3)
make contributions to the Fund equal to (i)
the | employee contributions that would have been required had | the service been
rendered as a member, plus (ii) an amount | determined by the board to be equal
to the employer's | normal cost of the benefits accrued for that military
| service, plus (iii) interest on items (i) and (ii) from the | date of first
membership in the Fund to the date of | payment. If payment is made during
the 6-month period that | begins 3 months after the effective date of this
amendatory | Act of 1997, the required interest shall be at the rate of | 2.5%
per year, compounded annually; otherwise, the | required interest shall be
calculated at the regular | interest rate.
| 6. For out-of-state service: Creditable service shall | be granted for
service rendered to an out-of-state local | governmental body under the
following conditions: The | employee had participated and has irrevocably
forfeited | all rights to benefits in the out-of-state public employees
| pension system; the governing body of his participating | municipality or
instrumentality authorizes the employee to | establish such service; the
employee has 2 years current | service with this municipality or
participating | instrumentality; the employee makes a payment of
| contributions, which shall be computed at 8% (normal) plus | 2% (survivor)
times length of service purchased times the | average rate of earnings for the
first 2
years of service | with the municipality or participating
instrumentality | whose governing body authorizes the service established
| plus interest at the effective rate on the date such | credits are
established, payable from the date the employee | completes the required 2
years of current service to date | of payment. In no case shall more than
120 months of |
| creditable service be granted under this provision.
| 7. For retroactive service: Any employee who could have | but did not
elect to become a participating employee, or | who should have been a
participant in the Municipal Public | Utilities Annuity and Benefit Fund
before that fund was | superseded, may receive creditable service for the
period | of service not to exceed 50 months; however, a current or | former
elected or appointed official of a participating | municipality may establish credit under this paragraph 7 | for more than 50
months of service as an official of that | municipality, if the excess over 50 months is approved by | resolution of the
governing body of the affected | municipality filed with
the Fund before January 1, 2002.
| Any employee who is a
participating employee on or | after September 24, 1981 and who was
excluded from | participation by the age restrictions removed by Public Act
| 82-596 may receive creditable service for the period, on or | after January
1, 1979, excluded by the age restriction and, | in addition, if the governing
body of the participating | municipality or participating instrumentality elects
to | allow creditable service for all employees excluded by the | age restriction
prior to January 1, 1979, for service | during the period prior to that date
excluded by the age | restriction. Any employee who was excluded from
| participation by the age restriction removed by Public Act | 82-596 and who is
not a participating employee on or after | September 24, 1981 may receive
creditable service for | service after January 1,
1979. Creditable service under | this paragraph
shall be granted upon payment of the | employee contributions
which would have been required had | he participated, with interest at the
effective rate for | each year from the end of the period of service
established | to date of payment.
| 8. For accumulated unused sick leave: A participating | employee who is
applying for a retirement annuity shall be | entitled to creditable service
for that portion of the |
| employee's accumulated unused sick leave
for which payment | is not received, as follows:
| a. Sick leave days shall be limited to those | accumulated under a sick
leave plan established by a | participating municipality or participating
| instrumentality which is available to all employees or | a class of employees.
| b. Only sick leave days accumulated with a | participating municipality or
participating | instrumentality with which the employee was in service | within
60 days of the effective date of his retirement | annuity shall be credited;
If the employee was in | service with more than one employer during this
period | only the sick leave days with the employer with which | the employee
has the greatest number of unpaid sick | leave days shall be considered.
| c. The creditable service granted shall be | considered solely for the
purpose of computing the | amount of the retirement annuity and shall not be
used | to establish any minimum service period required by any | provision of the
Illinois Pension Code, the effective | date of the retirement annuity, or the
final rate of | earnings.
| d. The creditable service shall be at the rate of | 1/20 of a month for
each full sick day, provided that | no more than 12 months may be credited
under this | subdivision 8.
| e. Employee contributions shall not be required | for creditable service
under this subdivision 8.
| f. Each participating municipality and | participating instrumentality
with which an employee | has service within 60 days of the effective date of
his | retirement annuity shall certify to the board the | number of accumulated
unpaid sick leave days credited | to the employee at the time of termination
of service.
| 9. For service transferred from another system: |
| Credits and
creditable service shall be granted for service | under Article 3, 4, 5, 14
or 16 of this Act, to any active | member of this Fund, and to any
inactive member who has | been a county sheriff, upon
transfer of such credits | pursuant to Section 3-110.3, 4-108.3, 5-235,
14-105.6 or | 16-131.4, and payment by the member of the amount by
which | (1) the employer and employee contributions that would have | been required
if he had participated in this Fund as a | sheriff's law enforcement employee
during the period for | which credit is
being transferred, plus interest thereon at | the effective rate for each
year, compounded annually, from | the date of termination of the service for
which credit is | being transferred to the date of payment, exceeds (2) the
| amount actually transferred to the Fund.
Such transferred | service shall be deemed to be service as a sheriff's law
| enforcement employee for the purposes of Section 7-142.1.
| 10. For service transferred from an Article 3 system | under Section 3-110.8: Credits and
creditable service | shall be granted for service under Article 3 of this Act as | provided in Section 3-110.8, to any active member of this | Fund upon
transfer of such credits pursuant to Section | 3-110.8. If the amount by
which (1) the employer and | employee contributions that would have been required
if he | had participated in this Fund during the period for which | credit is
being transferred, plus interest thereon at the | effective rate for each
year, compounded annually, from the | date of termination of the service for
which credit is | being transferred to the date of payment, exceeds (2) the
| amount actually transferred to the Fund, then the amount of | creditable service established under this paragraph 10 | shall be reduced by a corresponding amount in accordance | with the rules and procedures established under this | paragraph 10.
| The board shall establish by rule the manner of making | the calculation required under
this paragraph 10, taking | into account the appropriate actuarial
assumptions; the |
| member's service, age, and salary history; the level
of | funding of the employer; and
any other factors that the | board determines to be relevant.
| (b) Creditable service - amount:
| 1. One month of creditable service
shall be allowed for | each month for which a participating employee made
| contributions as required under Section 7-173, or for which | creditable
service is otherwise granted hereunder. Not | more than 1 month of
service shall be credited and counted | for 1 calendar month, and not more
than 1 year of service | shall be credited and counted for any calendar
year. A | calendar month means a nominal month beginning on the first | day
thereof, and a calendar year means a year beginning | January 1 and ending
December 31.
| 2. A seasonal employee shall be given 12 months of | creditable
service if he renders the number of months of | service normally required
by the position in a 12-month | period and he remains in service for the
entire 12-month | period. Otherwise a fractional year of service in the
| number of months of service rendered shall be credited.
| 3. An intermittent employee shall be given creditable | service for
only those months in which a contribution is | made under Section 7-173.
| | (c) No application for correction of credits or creditable | service shall
be considered unless the board receives an | application for correction while
(1) the applicant is a | participating employee and in active employment
with a | participating municipality or instrumentality, or (2) while | the
applicant is actively participating in a pension fund or | retirement
system which is a participating system under the | Retirement Systems
Reciprocal Act. A participating employee or | other applicant shall not be
entitled to credits or creditable | service unless the required employee
contributions are made in | a lump sum or in installments made in accordance
with board | rule.
|
| (d) Upon the granting of a retirement, surviving spouse or | child
annuity, a death benefit or a separation benefit, on | account of any
employee, all individual accumulated credits | shall thereupon terminate.
Upon the withdrawal of additional | contributions, the credits applicable
thereto shall thereupon | terminate. Terminated credits shall not be applied
to increase | the benefits any remaining employee would otherwise receive | under
this Article.
| (Source: P.A. 92-424, eff. 8-17-01; 93-933, eff. 8-13-04.)
| (40 ILCS 5/7-139.11 new)
| Sec. 7-139.11. Transfer to Article 3 pension fund. | (a) Until January 1, 2006, a person who has less than 8 | years of creditable service under this Article and who has | become an active
participant in a police pension fund | established under Article 3 of this Code
may apply for transfer | to that Article 3 fund of his or her creditable service
| accumulated under this Article. At the
time of the transfer the | Fund shall pay to the police pension fund an amount
equal to: | (1) the amounts accumulated to the credit of the | applicant under this Article, including interest; and
| (2) the municipality credits based on that service, | including interest;
and
| (3) any interest paid by the applicant in order to | reinstate that service.
| Participation in this Fund with respect to the transferred | credits shall
terminate on the date of transfer.
| (b) An active member of a pension fund established under | Article 3
of this Code may reinstate creditable service
under | this Article that was terminated by receipt of a refund, by | paying to the
Fund the amount of the refund plus interest | thereon at the rate of 6% per year,
compounded annually, from | the date of refund to the date of payment.
| Section 99. Effective date. This Act takes effect upon | becoming law.
|
Effective Date: 7/29/2005
|
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