Public Act 90-0460 of the 90th General Assembly
Public Act 90-0460
HB0593 Enrolled LRB9001461EGfg
AN ACT to amend the Illinois Pension Code by changing
Sections 3-109, 3-109.1, 3-110, 3-111, 7-109, and 9-179.3 and
adding Sections 3-110.7 and 7-139.9 and to amend the State
Mandates Act.
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 3-109, 3-109.1, 3-110, 3-111, 7-109, and
9-179.3 and adding Sections 3-110.7 and 7-139.9 as follows:
(40 ILCS 5/3-109) (from Ch. 108 1/2, par. 3-109)
Sec. 3-109. Persons excluded.
(a) The following persons shall not be eligible to
participate in a fund created under this Article:
(1) part-time police officers, special police
officers, night watchmen, temporary employees, traffic
guards or so-called auxiliary police officers specially
appointed to aid or direct traffic at or near schools or
public functions, or to aid in civil defense, municipal
parking lot attendants, clerks or other civilian
employees of a police department who perform clerical
duties exclusively;
(2) any police officer who fails to pay the
contributions required under Section 3-125.1, computed
(i) for funds established prior to August 5, 1963, from
the date the municipality established the fund or the
date of a police officer's first appointment (including
an appointment on probation), whichever is later, or
(ii) for funds established after August 5, 1963, from the
date, as determined from the statistics or census
provided in Section 3-103, the municipality became
subject to this Article by attaining the minimum
population or by referendum, or the date of a police
officer's first appointment (including an appointment on
probation), whichever is later, and continuing during his
or her entire service as a police officer; and
(3) any person who has elected under Section 3-109.1
to participate in the Illinois Municipal Retirement Fund
rather than in a fund established under this Article,
without regard to whether the person continues to be
employed as chief of police or is employed in some other
rank or capacity within the police department, unless the
person has lawfully rescinded that election.
(b) A police officer who is reappointed shall, before
being declared eligible to participate in the pension fund,
repay to the fund as required by Section 3-124 any refund
received thereunder.
(c) Any person otherwise qualified to participate who
was excluded from participation by reason of the age
restriction removed by Public Act 79-1165 may elect to
participate by making a written application to the Board
before January 1, 1990. Persons so electing shall begin
participation on the first day of the month following the
date of application. Such persons may also elect to
establish creditable service for periods of employment as a
police officer during which they did not participate by
paying into the police pension fund, before January 1, 1990,
the amount that the person would have contributed had
deductions from salary been made for such purpose at the time
such service was rendered, together with interest thereon at
6% per annum from the time such service was rendered until
the date the payment is made.
(d) A person otherwise qualified to participate who was
excluded from participation by reason of the fitness
requirement removed by this amendatory Act of 1995 may elect
to participate by making a written application to the Board
before July 1, 1996. Persons so electing shall begin
participation on the first day of the month following the
month in which the application is received by the Board.
These persons may also elect to establish creditable service
for periods of employment as a police officer during which
they did not participate by paying into the police pension
fund, before January 1, 1997, the amount that the person
would have contributed had deductions from salary been made
for this purpose at the time the service was rendered,
together with interest thereon at 6% per annum, compounded
annually, from the time the service was rendered until the
date of payment.
(Source: P.A. 89-52, eff. 6-30-95.)
(40 ILCS 5/3-109.1) (from Ch. 108 1/2, par. 3-109.1)
Sec. 3-109.1. Chief of police.
(a) Beginning January 1, 1990, any person who is
employed as the chief of police of a "participating
municipality" as defined in Section 7-106 of this Code, may
elect to participate in the Illinois Municipal Retirement
Fund rather than in a fund created under this Article 3.
Except as provided in subsection (b), this Such election
shall be irrevocable, and shall be filed in writing with the
Board of the Illinois Municipal Retirement Fund.
(b) Until January 1, 1999, a chief of police who has
elected under this Section to participate in IMRF rather than
a fund created under this Article may elect to rescind that
election and transfer his or her participation to the police
pension fund established under this Article by the employing
municipality. The chief must notify the boards of trustees
of both funds in writing of his or her decision to rescind
the election and transfer participation. A chief of police
who transfers participation under this subsection (b) shall
not be deemed ineligible to participate in the police pension
fund by reason of having failed to apply within the 3-month
period specified in Section 3-106.
(Source: P.A. 86-273.)
(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.
(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.
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.
(Source: P.A. 89-52, eff. 6-30-95.)
(40 ILCS 5/3-110.7 new)
Sec. 3-110.7. Transfer between Article 3 funds.
(a) An active member of a pension fund established under
this Article may apply for transfer to that fund of his or
her creditable service and related contributions accumulated
in any other police pension fund established under this
Article, except that a police officer may not transfer
creditable service under this Section from a pension fund
unless (i) the police officer actively served in the police
department under that fund for at least 2 years, (ii) the
police officer actively served in the police department under
that fund for less than 2 years but was laid off or otherwise
involuntarily terminated for a reason other than the fault of
the officer, or (iii) the police officer was not in service
in the police department under that fund on or after the
effective date of this Section. Upon receiving the
application, that other pension fund shall transfer to the
pension fund in which the applicant currently participates an
amount equal to:
(1) the amounts actually contributed by or on
behalf of the applicant to the fund as employee
contributions (including any interest paid by the
applicant in order to reinstate service), plus interest
on those amounts at the rate of 6% per year, compounded
annually, from the date of contribution to the date of
transfer; plus
(2) an amount representing employer contributions,
equal to the total amount determined under subdivision
(1).
Participation in that other pension fund shall terminate on
the date of transfer.
(b) An active member of a pension fund established under
this Article may reinstate service in any other pension fund
established under this Article that was terminated by receipt
of a refund, by paying to that other pension 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.
(40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111)
Sec. 3-111. Pension.
(a) A police officer age 50 or more with 20 or more
years of creditable service, who is no longer in service as a
police officer, shall receive a pension of 1/2 of the salary
attached to the rank held by the officer on the police force
for one year immediately prior to retirement or, beginning
July 1, 1987 for persons terminating service on or after that
date, the salary attached to the rank held on the last day of
service or for one year prior to the last day, whichever is
greater. The pension shall be increased by 2% of such salary
for each additional year of service over 20 years, up to 30
years, and 1% of such salary for each additional year of
service over 30 years, to a maximum of 75% of such salary.
No pension in effect on or granted after June 30, l973 shall
be less than $200 per month. Beginning July 1, 1987, the
minimum retirement pension for a police officer having at
least 20 years of creditable service shall be $400 per month,
without regard to whether or not retirement occurred prior to
that date.
(b) A police officer mandatorily retired from service
due to age by operation of law, having at least 8 but less
than 20 years of creditable service, shall receive a pension
equal to 2 1/2% of the salary attached to the rank he or she
held on the police force for one year immediately prior to
retirement or, beginning July 1, 1987 for persons terminating
service on or after that date, the salary attached to the
rank held on the last day of service or for one year prior to
the last day, whichever is greater, for each year of
creditable service.
A police officer who retires or is separated from service
having at least 8 years but less than 20 years of creditable
service, who is not mandatorily retired due to age by
operation of law, and who does not apply for a refund of
contributions at his or her last separation from police
service, shall receive a pension upon attaining age 60 equal
to 2.5% of the salary attached to the rank held by the police
officer on the police force for one year immediately prior to
retirement or, beginning July 1, 1987 for persons terminating
service on or after that date, the salary attached to the
rank held on the last day of service or for one year prior to
the last day, whichever is greater, for each year of
creditable service.
(c) A police officer no longer in service who has at
least one but less than 8 years of creditable service in a
police pension fund but meets the requirements of this
subsection (c) shall be eligible to receive a pension from
that fund equal to 2.5% of the salary attached to the rank
held on the last day of service under that fund or for one
year prior to that last day, whichever is greater, for each
year of creditable service in that fund. The pension shall
begin no earlier than upon attainment of age 60 (or upon
mandatory retirement from the fund by operation of law due to
age, if that occurs before age 60) and in no event before the
effective date of this amendatory Act of 1997.
In order to be eligible for a pension under this
subsection (c), the police officer must have at least 8 years
of creditable service in a second police pension fund under
this Article and be receiving a pension under subsection (a)
or (b) of this Section from that second fund. The police
officer need not be in service on or after the effective date
of this amendatory Act of 1997.
(Source: P.A. 85-941.)
(40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
Sec. 7-109. Employee.
(1) "Employee" means any person who:
(a) 1. Receives earnings as payment for the
performance of personal services or official duties
out of the general fund of a municipality, or out of
any special fund or funds controlled by a
municipality, or by an instrumentality thereof, or a
participating instrumentality, including, in
counties, the fees or earnings of any county fee
office; and
2. Under the usual common law rules applicable
in determining the employer-employee relationship,
has the status of an employee with a municipality,
or any instrumentality thereof, or a participating
instrumentality, including aldermen, county
supervisors and other persons (excepting those
employed as independent contractors) who are paid
compensation, fees, allowances or other emolument
for official duties, and, in counties, the several
county fee offices.
(b) Serves as a township treasurer appointed under
the School Code, as heretofore or hereafter amended, and
who receives for such services regular compensation as
distinguished from per diem compensation, and any regular
employee in the office of any township treasurer whether
or not his earnings are paid from the income of the
permanent township fund or from funds subject to
distribution to the several school districts and parts of
school districts as provided in the School Code, or from
both such sources.
(c) Holds an elective office in a municipality,
instrumentality thereof or participating instrumentality.
(2) "Employee" does not include persons who:
(a) Are eligible for inclusion under any of the
following laws:
1. "An Act in relation to an Illinois State
Teachers' Pension and Retirement Fund", approved May
27, 1915, as amended;
2. Articles 15 and 16 of this Code.
However, such persons shall be included as employees
to the extent of earnings that are not eligible for
inclusion under the foregoing laws for services not of an
instructional nature of any kind.
However, any member of the armed forces who is
employed as a teacher of subjects in the Reserve Officers
Training Corps of any school and who is not certified
under the law governing the certification of teachers
shall be included as an employee.
(b) Are designated by the governing body of a
municipality in which a pension fund is required by law
to be established for policemen or firemen, respectively,
as performing police or fire protection duties, except
that when such persons are the heads of the police or
fire department and are not eligible to be included
within any such pension fund, they shall be included
within this Article; provided, that such persons shall
not be excluded to the extent of concurrent service and
earnings not designated as being for police or fire
protection duties. However, (i) any head of a police
department who was a participant under this Article
immediately before October 1, 1977 and did not elect,
under Section 3-109 of this Act, to participate in a
police pension fund shall be an "employee", and (ii) any
chief of police who elects to participate in this Fund
under Section 3-109.1 of this Code, regardless of whether
such person continues to be employed as chief of police
or is employed in some other rank or capacity within the
police department, shall be an employee under this
Article for so long as such person is employed to perform
police duties by a participating municipality and has not
lawfully rescinded that election.
(3) All persons, including, without limitation, public
defenders and probation officers, who receive earnings from
general or special funds of a county for performance of
personal services or official duties within the territorial
limits of the county, are employees of the county (unless
excluded by subsection (2) of this Section) notwithstanding
that they may be appointed by and are subject to the
direction of a person or persons other than a county board or
a county officer. It is hereby established that an
employer-employee relationship under the usual common law
rules exists between such employees and the county paying
their salaries by reason of the fact that the county boards
fix their rates of compensation, appropriate funds for
payment of their earnings and otherwise exercise control over
them. This finding and this amendatory Act shall apply to
all such employees from the date of appointment whether such
date is prior to or after the effective date of this
amendatory Act and is intended to clarify existing law
pertaining to their status as participating employees in the
Fund.
(Source: P.A. 86-273; 86-820; 86-1028.)
(40 ILCS 5/7-139.9 new)
Sec. 7-139.9. Transfer to Article 3 pension fund.
(a) Until January 1, 1999, a person who has lawfully
rescinded an election to participate in this Fund under
Section 3-109.1 and 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 for
municipal law enforcement service. 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 for municipal law enforcement service,
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.
For the purposes of this Section, "municipal law
enforcement service" means service with the police department
of a participating municipality for which the applicant
established creditable service under this Article as a result
of an election under Section 3-109.1 of this Code.
(b) An active member of a pension fund established under
Article 3 of this Code may reinstate municipal law
enforcement 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.
(c) A chief of police who participates in this Fund as a
result of an election under Section 3-109.1 may rescind that
election and transfer his or her participation from this Fund
to a police pension fund established under Article 3 of this
Code in which he or she is eligible to participate, as
provided in Section 3-109.1(b). A transfer of participation
under this subsection (c) and Section 3-109.1(b) is
irrevocable.
(40 ILCS 5/9-179.3) (from Ch. 108 1/2, par. 9-179.3)
Sec. 9-179.3. Optional plan of additional benefits and
contributions.
(a) While this plan is in effect, an employee may
establish additional optional credit for additional optional
benefits by electing in writing at any time to make
additional optional contributions. The employee may
discontinue making the additional optional contributions at
any time by notifying the fund in writing.
(b) Additional optional contributions for the additional
optional benefits shall be as follows:
(1) For service after the option is elected, an
additional contribution of 3% of salary shall be
contributed to the fund on the same basis and under the
same conditions as contributions required under Sections
9-170 and 9-176.
(2) For service before the option is elected, an
additional contribution of 3% of the salary for the
applicable period of service, plus interest at the
effective rate from the date of service to the date of
payment. All payments for past service must be paid in
full before credit is given. No additional optional
contributions may be made for any period of service for
which credit has been previously forfeited by acceptance
of a refund, unless the refund is repaid in full with
interest at the effective rate from the date of refund to
the date of repayment.
(c) Additional optional benefits shall accrue for all
periods of eligible service for which additional
contributions are paid in full. The additional benefit shall
consist of an additional 1% for each year of service for
which optional contributions have been paid, based on the
highest average annual salary for any 4 consecutive years
within the last 10 years of service immediately preceding the
date of withdrawal, to be added to the employee retirement
annuity benefits as otherwise computed under this Article.
The calculation of these additional benefits shall be subject
to the same terms and conditions as are used in the
calculation of retirement annuity under Section 9-134. The
additional benefit shall be included in the calculation of
the automatic annual increase in annuity, and in the
calculation of widow's annuity, where applicable. However no
additional benefits will be granted which produce a total
annuity greater than the applicable maximum established for
that type of annuity in this Article, and additional benefits
shall not apply to any benefit computed under Section
9-128.1.
(d) Refunds of additional optional contributions shall
be made on the same basis and under the same conditions as
provided under Sections 9-164, 9-166 and 9-167. Interest
shall be credited at the effective rate on the same basis and
under the same conditions as for other contributions.
(e) Optional contributions shall be accounted for in a
separate Optional Contribution Reserve.
(f) The tax levy, computed under Section 9-169, shall be
based on employee contributions including the amount of
optional additional employee contributions.
(g) Service eligible under this Section may include only
service as an employee of the County as defined in Section
9-108, and subject to Sections 9-219 and 9-220. No service
granted under Section 9-121.1, 9-121.4 or 9-179.2 shall be
eligible for optional service credit. No optional service
credit may be established for any military service, or for
any service under any other Article of this Code. Optional
service credit may be established for any period of
disability paid from this fund, if the employee makes
additional optional contributions for such periods of
disability.
(h) This plan of optional benefits and contributions
shall not apply to any former county employee receiving an
annuity from the fund, who re-enters service as a County
employee, unless he renders at least 3 years of additional
service after the date of re-entry.
(i) The effective date of the optional plan of
additional benefits and contributions shall be July 1, 1985,
or the date upon which approval is received from the Internal
Revenue Service, whichever is later.
(j) This plan of additional benefits and contributions
shall expire July 1, 2002 1997. No additional contributions
may be made after that date, and no additional benefits will
accrue after that date.
(Source: P.A. 86-1027; 87-794.)
Section 90. The State Mandates Act is amended by adding
Section 8.21 as follows:
(30 ILCS 805/8.21 new)
Sec. 8.21. Exempt mandate. Notwithstanding Sections 6
and 8 of this Act, no reimbursement by the State is required
for the implementation of any mandate created by this
amendatory Act of 1997.
Section 99. Effective date. This Act takes effect upon
becoming law.