Public Act 90-0576 of the 90th General Assembly

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Public Act 90-0576

SB1270 Enrolled                                LRB9008486EGfg

    AN ACT to amend certain Acts in relation to pensions.

    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  4-106,  4-107,  4-118,  15-106,   15-107,
15-136,  15-154,  15-155,  15-157,  15-158.2,  and  15-181 as
follows:

    (40 ILCS 5/4-106) (from Ch. 108 1/2, par. 4-106)
    Sec. 4-106.   Firefighter,  firefighters.   "Firefighter,
firefighters":
    (a)  In  municipalities  which have adopted Division 1 of
Article  10  of  the  Illinois  Municipal  Code,  any  person
employed in the municipality's fire service as a firefighter,
fire engineer, marine engineer, fire pilot,  bomb  technician
or  scuba  diver;  and  in  any of these positions where such
person's duties  also  include  those  of  a  firefighter  as
classified  by the Civil Service Commission of that city, and
whose duty is to participate in the work of  controlling  and
extinguishing fires at the location of any such fires.; and
    (b)  In  municipalities which are subject to Division 2.1
of Article 10 of the  Illinois  Municipal  Code,  any  person
employed by a city in its fire service as a firefighter, fire
engineer,  marine  engineer,  fire pilot, bomb technician, or
scuba diver; and, in any of these positions whose duties also
include those of a firefighter and are certified in the  same
manner as a firefighter in that city.; and
    (c)  In  municipalities  which  are  subject  to  neither
Division  1  nor  Division  2.1 of Article 10 of the Illinois
Municipal Code, any person who would have been included as  a
firefighter  under sub-paragraph (a) or (b) above except that
he served as a de facto and not as a de jure firefighter.
    (d)  Notwithstanding  the  other   provisions   of   this
Section,  "firefighter"  does  not  include any person who is
actively participating in the State  Universities  Retirement
System under subsection (h) of Section 15-107 with respect to
the  employment  for  which  he  or  she  is  a participating
employee in that System.
    (e)  This amendatory Act of 1977 does not affect  persons
covered by this Article prior to September 22, 1977.
(Source: P.A. 83-1440.)

    (40 ILCS 5/4-107) (from Ch. 108 1/2, par. 4-107)
    Sec. 4-107.  Qualifications.
    (a)  A  firefighter  who  has not contributed to the fund
during the entire period of service, to be  entitled  to  the
benefits  of  this  Article,  must contribute to the fund the
amount he or she would have paid  had  deductions  been  made
from his or her salary during the entire period of his or her
creditable service.
    (b)  Any   person   appointed   as  a  firefighter  in  a
municipality shall, within 3 months after  receiving  his  or
her   first   appointment  and  within  3  months  after  any
reappointment make written application to the board  to  come
under the provisions of this Article.
    (c)  A  person otherwise qualified to participate who was
excluded from participation by reason of the age  or  fitness
requirements 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 firefighter during which they
did not participate by paying into the 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.
    (d)  A  person  described  in  subsection  (h) of Section
15-107 shall not participate in any pension fund  established
under this Article with respect to employment for which he or
she  is  a  participating  employee in the State Universities
Retirement System.
(Source: P.A. 89-52, eff. 6-30-95.)

    (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
    Sec. 4-118.  Financing.
    (a)  The city council or the board  of  trustees  of  the
municipality  shall  annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar  which
will  produce  an  amount which, when added to the deductions
from the salaries  or  wages  of  firefighters  and  revenues
available  from other sources, will equal a sum sufficient to
meet the annual actuarial requirements of the  pension  fund,
as determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the  pension  fund or municipality.  For the purposes of this
Section, the annual actuarial  requirements  of  the  pension
fund are equal to (1) the normal cost of the pension fund, or
17.5%  of  the  salaries and wages to be paid to firefighters
for the year involved, whichever is  greater,  plus  (2)  the
annual  amount  necessary  to  amortize  the  fund's unfunded
accrued liabilities over a period of 40 years  from  July  1,
1993,  as  annually  updated  and  determined  by an enrolled
actuary employed by the Illinois Department of  Insurance  or
by  an  enrolled  actuary retained by the pension fund or the
municipality.   The  amount  to  be   applied   towards   the
amortization  of  the  unfunded accrued liability in any year
shall not be less than the annual amount required to amortize
the unfunded accrued  liability,  including  interest,  as  a
level   percentage  of  payroll  over  the  number  of  years
remaining in the 40 year amortization period.
    (b)  The tax shall be levied and collected  in  the  same
manner as the general taxes of the municipality, and shall be
in addition to all other taxes now or hereafter authorized to
be  levied  upon all property within the municipality, and in
addition to the amount authorized to be  levied  for  general
purposes,  under Section 8-3-1 of the Illinois Municipal Code
or under Section 14 of the Fire Protection District Act.  The
tax shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the  municipality  (or,
in the case of amounts added to the tax levy under subsection
(f),   used   by   the   municipality  to  pay  the  employer
contributions required  under  subsection  (b-1)  of  Section
15-155 of this Code).
    (c)  The board shall make available to the membership and
the  general  public for inspection and copying at reasonable
times the most recent Actuarial Valuation Balance  Sheet  and
Tax  Levy Requirement issued to the fund by the Department of
Insurance.
    (d)  The firefighters' pension fund shall consist of  the
following moneys which shall be set apart by the treasurer of
the  municipality:  (1)  all  moneys  derived  from the taxes
levied  hereunder;  (2)  contributions  by  firefighters   as
provided  under  Section  4-118.1;  (3) all rewards in money,
fees, gifts, and emoluments that may be paid or given for  or
on account of extraordinary service by the fire department or
any  member  thereof,  except  when allowed to be retained by
competitive  awards;  and  (4)  any  money,  real  estate  or
personal property received by the board.
    (e)  For the purposes of this Section, "enrolled actuary"
means an actuary: (1) who is  a  member  of  the  Society  of
Actuaries  or  the American Academy of Actuaries; and (2) who
is enrolled under Subtitle C of Title  III  of  the  Employee
Retirement  Income  Security  Act  of  1974,  or who has been
engaged in providing actuarial services to one or more public
retirement systems for a period of at least  3  years  as  of
July 1, 1983.
    (f)  The  corporate  authorities  of  a municipality that
employs a person who  is  described  in  subdivision  (d)  of
Section  4-106 may add to the tax levy otherwise provided for
in this Section an amount equal to the projected cost of  the
employer   contributions   required   to   be   paid  by  the
municipality to  the  State  Universities  Retirement  System
under subsection (b-1) of Section 15-155 of this Code.
(Source: P.A. 87-1265.)

    (40 ILCS 5/15-106) (from Ch. 108 1/2, par. 15-106)
    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 State Geological Survey
Division of the Department of Natural  Resources,  the  State
Natural  History Survey Division of the Department of Natural
Resources, the State Water Survey Division of the  Department
of  Natural  Resources,  the  Waste  Management  and Research
Center of the Department of Natural Resources, the University
Civil Service Merit Board, the Board of Trustees of the State
Universities  Retirement  System,  the   Illinois   Community
College  Board,  State  Community  College of East St. Louis,
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.  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 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. 89-4, eff. 1-1-96; 89-445, eff. 2-7-96; 90-490,
eff. 8-17-97; 90-511, eff. 8-22-97; revised 11-17-97.)

    (40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
    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;
         (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); or
         (8)  participates  in  an   optional   program   for
    part-time workers under Section 15-158.1.
    (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.
(Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97.)

    (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
    Sec. 15-136.  Retirement annuities - Amount.
    (a)  The  amount  of  the  retirement  annuity  shall  be
determined  by whichever of the following rules is applicable
and provides the largest annuity:
    Rule 1:  The retirement annuity shall be 1.67%  of  final
rate  of  earnings for each of the first 10 years of service,
1.90% for each of the next 10 years  of  service,  2.10%  for
each  year  of  service in excess of 20 but not exceeding 30,
and 2.30% for each year in excess of 30; or for  persons  who
retire on or after January 1, 1998, 2.2% of the final rate of
earnings  for each year of service.  However, except that the
annuity for those  persons  having  made  an  election  under
Section 15-154(a-1) shall be calculated and payable under the
portable   retirement   benefit   program   pursuant  to  the
provisions of Section 15-136.4.
    Rule 2:  The retirement annuity shall be the sum  of  the
following,   determined   from   amounts   credited   to  the
participant in accordance with the actuarial tables  and  the
prescribed  rate  of  interest  in  effect  at  the  time the
retirement annuity begins:
         (i)  The normal annuity which can be provided on  an
    actuarially  equivalent  basis, by the accumulated normal
    contributions as of the date the annuity begins; and
         (ii)  an annuity from employer contributions  of  an
    amount which can be provided on an actuarially equivalent
    basis  from  the accumulated normal contributions made by
    the  participant  under  Section  15-113.6  and   Section
    15-113.7  plus  1.4  times  all  other accumulated normal
    contributions made by the participant,  except  that  the
    annuity  for  those persons having made an election under
    Section 15-154(a-1) shall be calculated and payable under
    the portable retirement benefit program pursuant  to  the
    provisions of Section 15-136.4.
    Rule  3:  The  retirement annuity of a participant who is
employed at least one-half time during the  period  on  which
his or her final rate of earnings is based, shall be equal to
the   participant's  years  of  service  not  to  exceed  30,
multiplied by (1) $96 if  the  participant's  final  rate  of
earnings  is  less than $3,500, (2) $108 if the final rate of
earnings is at least $3,500 but less than $4,500, (3) $120 if
the final rate of earnings is at least $4,500 but  less  than
$5,500,  (4)  $132  if the final rate of earnings is at least
$5,500 but less than $6,500, (5) $144 if the  final  rate  of
earnings is at least $6,500 but less than $7,500, (6) $156 if
the  final  rate of earnings is at least $7,500 but less than
$8,500, (7) $168 if the final rate of earnings  is  at  least
$8,500  but  less than $9,500, and (8) $180 if the final rate
of earnings is $9,500 or more, except that  the  annuity  for
those   persons   having   made  an  election  under  Section
15-154(a-1)  shall  be  calculated  and  payable  under   the
portable   retirement   benefit   program   pursuant  to  the
provisions of Section 15-136.4.
    Rule 4:  A participant who is at least age 50 and has  25
or  more years of service as a police officer or firefighter,
and a participant who is age 55 or over and has at  least  20
but  less  than  25  years  of service as a police officer or
firefighter, shall be entitled to  a  retirement  annuity  of
2 1/4% of the final rate of earnings for each of the first 10
years  of  service as a police officer or firefighter, 2 1/2%
for each of the next 10 years of service as a police  officer
or  firefighter,  and  2 3/4%  for  each year of service as a
police officer or firefighter in excess of  20,  except  that
the  annuity  for those persons having made an election under
Section 15-154(a-1) shall be calculated and payable under the
portable  retirement  benefit   program   pursuant   to   the
provisions  of  Section 15-136.4.  The retirement annuity for
all other service shall be computed  under  Rule  1,  payable
under the portable retirement benefit program pursuant to the
provisions of Section 15-136.4, if applicable.
    For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
         (i)  service  that  is performed while the person is
    an employee under subsection (h) of Section 15-107; and
         (ii)  in  the  case  of  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 transferred to another job with  the
    University  of Illinois, service performed as an employee
    of the University of Illinois in a  position  other  than
    police  officer  or  firefighter,  from  the date of that
    transfer until the employee's next termination of service
    with the University of Illinois.
    (b)  The retirement annuity provided under Rules 1 and  3
above  shall  be  reduced  by  1/2  of  1% for each month the
participant is under  age  60  at  the  time  of  retirement.
However,  this  reduction  shall  not  apply in the following
cases:
         (1)  For a  disabled  participant  whose  disability
    benefits  have  been  discontinued  because he or she has
    exhausted  eligibility  for  disability  benefits   under
    clause (6) of Section 15-152;
         (2)  For  a  participant who has at least the number
    of years of service required to retire at any  age  under
    subsection (a) of Section 15-135; or
         (3)  For  that portion of a retirement annuity which
    has  been  provided  on  account  of   service   of   the
    participant  during  periods when he or she performed the
    duties of a  police  officer  or  firefighter,  if  these
    duties  were  performed  for at least 5 years immediately
    preceding the date the retirement annuity is to begin.
    (c)  The maximum retirement annuity provided under  Rules
1,  2,  and  4 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal  Revenue
Code  of  1986,  as  such Section may be amended from time to
time and as such benefit limits  shall  be  adjusted  by  the
Commissioner  of  Internal Revenue, and (2) 80% of final rate
of earnings.
    (d)  An annuitant whose status as an employee  terminates
after  August  14,  1969 shall receive automatic increases in
his or her retirement annuity as follows:
    Effective January 1 immediately following  the  date  the
retirement  annuity  begins,  the  annuitant shall receive an
increase in his or her monthly retirement annuity  of  0.125%
of the monthly retirement annuity provided under Rule 1, Rule
2,  Rule  3, or Rule 4, contained in this Section, multiplied
by the number of full months which elapsed from the date  the
retirement  annuity  payments  began to January 1, 1972, plus
0.1667% of such annuity, multiplied by  the  number  of  full
months  which  elapsed  from January 1, 1972, or the date the
retirement annuity payments began,  whichever  is  later,  to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number  of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever  is
later, to the effective date of the increase.
    The  annuitant  shall  receive  an increase in his or her
monthly retirement  annuity  on  each  January  1  thereafter
during  the  annuitant's  life  of  3% of the monthly annuity
provided under Rule 1, Rule 2, Rule 3, or Rule 4 contained in
this Section.  The change made under this subsection by  P.A.
81-970  is  effective  January  1,  1980  and applies to each
annuitant whose status as an employee  terminates  before  or
after that date.
    Beginning January 1, 1990, all automatic annual increases
payable   under   this  Section  shall  be  calculated  as  a
percentage of the total annuity payable at the  time  of  the
increase,  including  all  increases previously granted under
this Article.
    The change made in this subsection  by  P.A.  85-1008  is
effective  January 26, 1988, and is applicable without regard
to whether status as an employee terminated before that date.
    (e)  If, on January 1, 1987, or the date  the  retirement
annuity payment period begins, whichever is later, the sum of
the  retirement  annuity  provided  under Rule 1 or Rule 2 of
this Section and  the  automatic  annual  increases  provided
under  the  preceding subsection or Section 15-136.1, amounts
to less than the retirement annuity which would  be  provided
by  Rule  3,  the retirement annuity shall be increased as of
January 1, 1987, or the date the retirement  annuity  payment
period  begins, whichever is later, to the amount which would
be provided by Rule 3 of this Section. Such increased  amount
shall  be considered as the retirement annuity in determining
benefits provided under other Sections of this Article.  This
paragraph  applies  without  regard  to  whether status as an
employee  terminated  before  the  effective  date  of   this
amendatory  Act  of  1987,  provided  that  the annuitant was
employed at least one-half time during the  period  on  which
the final rate of earnings was based.
    (f)  A participant is entitled to such additional annuity
as may be provided on an actuarially equivalent basis, by any
accumulated  additional  contributions  to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account  in  determining  the
amount of such additional annuity.
    (g)  If,  (1)  by law, a function of a governmental unit,
as defined by Section 20-107 of this Code, is transferred  in
whole  or  in  part  to  an  employer,  and (2) a participant
transfers employment from  such  governmental  unit  to  such
employer  within 6 months after the transfer of the function,
and (3) the sum of (A) the annuity payable to the participant
under Rule 1, 2, or 3 of this Section  (B)  all  proportional
annuities  payable to the participant by all other retirement
systems covered by Article 20, and (C)  the  initial  primary
insurance  amount  to which the participant is entitled under
the Social Security Act, is less than the retirement  annuity
which  would  have  been  payable if all of the participant's
pension credits  validated  under  Section  20-109  had  been
validated  under this system, a supplemental annuity equal to
the difference in  such  amounts  shall  be  payable  to  the
participant.
    (h)  On January 1, 1981, an annuitant who was receiving a
retirement  annuity  on  or before January 1, 1971 shall have
his or her retirement annuity then being  paid  increased  $1
per  month for each year of creditable service. On January 1,
1982, an annuitant  whose  retirement  annuity  began  on  or
before  January  1,  1977,  shall  have his or her retirement
annuity then being paid increased $1 per month for each  year
of creditable service.
    (i)  On  January  1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977,  shall  have  the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; revised 8-21-97.)

    (40 ILCS 5/15-154) (from Ch. 108 1/2, par. 15-154)
    Sec. 15-154.  Refunds.
    (a)  A   participant  whose  status  as  an  employee  is
terminated, regardless of cause, or who has been on  lay  off
status  for  more  than  120 days, and who is not on leave of
absence, is  entitled  to  a  refund  of  contributions  upon
application;  except  that  not  more  than  one  such refund
application may be made during any academic year.
    Except as set forth in subsections (a-1) and  (a-2),  the
refund shall be the sum of the accumulated normal, additional
and  survivors  insurance  contributions,  less the amount of
interest credited on these contributions each year in  excess
of 4 1/2% of the amount on which interest was calculated.
    (a-1)  Every  person  who becomes an eligible employee as
described in Section 15-158.2 a participating employee  after
the  date  on  which  his  or  her  employer  first offers an
optional retirement program under Section 15-158.2 may  elect
within  60  days of becoming a participant to have any refund
calculated pursuant  to  subsection  (a-2)  by  forgoing  all
survivors  insurance benefits to which the person's survivors
would  otherwise  be  entitled  under  this  Article.    This
election is irrevocable and may be made by filing an election
with  the system on such form as the Executive Director shall
prescribe.
    Each person who is an eligible employee as  described  in
Section  15-158.2  a  participating  employee  on the date on
which his or her employer first offers an optional retirement
program under Section 15-158.2 shall have a  one-time  option
to  elect  to  have  his or her refund calculated pursuant to
subsection  (a-2),  by  forgoing  all   survivors   insurance
benefits  to  which the person's survivors would otherwise be
entitled under this  Article.    The  election  will  not  be
effective until one year after the election is filed with the
system.   This  election  is  irrevocable  and may be made by
filing an election with the  system,  on  such  form  as  the
Executive Director shall prescribe, within one year after the
date  on  which  his or her employer first offers an optional
retirement program under Section 15-158.2.
    A person  may  make  the  one-time  irrevocable  election
authorized  under  this  Section  or  the election authorized
under Section 15-158.2(g), but may not make  both  elections.
Any  person  interested  in  electing the portable retirement
benefit program  provided  under  this  Section  and  Section
15-136.4   must  be  given  a  consultation  with  the  State
Universities Retirement System before making that election.
    (a-2)  The refund elected under subsection (a-1) shall be
the  sum  of  the  participant's   accumulated   normal   and
additional  contributions,  as defined in Sections 15-116 and
15-117.  If the participant terminates with 5 or  more  years
of  service for employment as defined in Section 15-113.1, he
or she shall  also  be  entitled  to  a  refund  of  employer
contributions   in   an  amount  equal  to  the  sum  of  the
accumulated normal and additional contributions,  as  defined
in Sections 15-116 and 15-117.
    (b)  Upon   acceptance   of  a  refund,  the  participant
forfeits all accrued rights and credits in the System, and if
subsequently reemployed, the participant shall be  considered
a  new  employee subject to all the qualifying conditions for
participation and eligibility for benefits applicable to  new
employees.  If  such  person  again  becomes  a participating
employee and continues as such for 2 years, or is employed by
an employer and participates for at  least  2  years  in  the
Federal  Civil  Service  Retirement  System, all such rights,
credits, and  previous  status  as  a  participant  shall  be
restored upon repayment of the amount of the refund, together
with  compound  interest thereon from the date the refund was
received to the date of repayment at the rate of 6% per annum
through August 31, 1982, and at  the  effective  rates  after
that date.
    (c)  If   a  participant  has  made  survivors  insurance
contributions, but has  no  survivors  insurance  beneficiary
upon  retirement,  he or she shall be entitled to a refund of
the accumulated survivors insurance contributions, or  to  an
additional  annuity  the  value  of  which  is  equal  to the
accumulated survivors insurance contributions.
    (d)  A participant, upon application, is  entitled  to  a
refund  of  his  or  her accumulated additional contributions
except those covering the cost of the annual increase in  the
retirement  annuity  provided  under Section 15-136. Upon the
acceptance  of  such  a  refund  of  accumulated   additional
contributions,   the  participant  forfeits  all  rights  and
credits which may have accrued because of such contributions.
    (e)  A participant who terminates  his  or  her  employee
status  and  elects  to  waive  service  credit under Section
15-154.2, is entitled to a refund of the accumulated  normal,
additional  and  survivors  insurance  contributions, if any,
which were credited the participant for this service,  or  to
an  additional  annuity  the  value  of which is equal to the
accumulated  normal,  additional  and   survivors   insurance
contributions,  if  any;  except  that not more than one such
refund application may be made during any academic year. Upon
acceptance of  this  refund,  the  participant  forfeits  all
rights and credits accrued because of this service.
    (f)  If  a  police  officer  or  firefighter  receives  a
retirement  annuity  under Rule 1, 2, or 3 of Section 15-136,
he or she shall be entitled at retirement to a refund of  the
difference    between   his   or   her   accumulated   normal
contributions and the normal contributions which  would  have
accumulated  had such person filed a waiver of the retirement
formula provided by Rule 4 of Section 15-136.
    (g)  If, at the time of retirement, a  participant  would
be  entitled  to a retirement annuity under Rule 1, 2, 3 or 4
of Section 15-136  that  exceeds  the  maximum  specified  in
clause  (1)  of  subsection  (c) of Section 15-136, he or she
shall be entitled to a refund of the employee  contributions,
if  any,  paid under Section 15-157 after the date upon which
continuance of such contributions would have otherwise caused
the retirement annuity to exceed this maximum, plus  compound
interest at the effective rates.
(Source: P.A. 90-448, eff. 8-16-97.)

    (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
    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  2011  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  2010,  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.
    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.
    (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.
    (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.
(Source: P.A. 88-593, eff. 8-22-94; 89-602, eff. 8-2-96.)

    (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
    Sec. 15-157.  Employee Contributions.
    (a)  Each participating employee shall make contributions
towards the retirement annuity of each  payment  of  earnings
applicable  to  employment under this system on and after the
date  of  becoming  a  participant  as  follows:   Prior   to
September 1, 1949, 3 1/2% of earnings; from September 1, 1949
to  August 31, 1955, 5%; from September 1, 1955 to August 31,
1969,  6%;  from  September  1,  1969,   6   1/2%.      These
contributions  are  to  be considered as normal contributions
for purposes of this Article.
    Each participant who is a police officer  or  firefighter
shall  make  normal  contributions  of  8% of each payment of
earnings applicable to employment  as  a  police  officer  or
firefighter  under this system on or after September 1, 1981,
unless he or she files with the board within  60  days  after
the  effective date of this amendatory Act of 1991 or 60 days
after the board receives notice that he or she is employed as
a police  officer  or  firefighter,  whichever  is  later,  a
written  notice  waiving  the  retirement formula provided by
Rule 4 of Section 15-136.  This waiver shall be  irrevocable.
If  a participant had met the conditions set forth in Section
15-132.1 prior to the effective date of this  amendatory  Act
of   1991   but   failed   to   make  the  additional  normal
contributions required by this paragraph, he or she may elect
to pay the additional contributions plus compound interest at
the effective rate.  If  such  payment  is  received  by  the
board,  the  service  shall  be  considered as police officer
service in calculating the retirement annuity under Rule 4 of
Section 15-136.  While performing service described in clause
(i) or (ii) of Rule 4  of  Section  15-136,  a  participating
employee  shall be deemed to be employed as a firefighter for
the purpose of determining the rate of employee contributions
under this Section.
    (b)  Starting  September  1,  1969,  each   participating
employee  shall make additional contributions of 1/2 of 1% of
earnings to finance a portion  of  the  cost  of  the  annual
increases   in  retirement  annuity  provided  under  Section
15-136.
    (c)  Each participating employee  shall  make  additional
contributions  of 1% of earnings applicable under this system
on and after August 1, 1959.   The  contribution  made  under
this  subsection shall be used to finance survivors insurance
benefits, unless the participant has made an  election  under
Section  15-154(a-1),  in  which  case  the contribution made
under this subsection shall be used to finance  the  benefits
obtained under that election.  Contributions in excess of $80
during  any  fiscal year beginning before August 31, 1969 and
in excess of $120 during any  fiscal  year  thereafter  until
September   1,   1971   shall  be  considered  as  additional
contributions for purposes of this Article.
    (d)  If the board by board rule so permits and subject to
such conditions and limitations as may be  specified  in  its
rules,  a participant may make other additional contributions
of such percentage of earnings or amounts as the  participant
shall  elect  in  a  written  notice  thereof received by the
board.
    (e)  That fraction of a participant's  total  accumulated
normal  contributions, the numerator of which is equal to the
number of years  of  service  in  excess  of  that  which  is
required  to  qualify for the maximum retirement annuity, and
the denominator of which is equal to the total service of the
participant, shall be considered  as  accumulated  additional
contributions.   The  determination of the applicable maximum
annuity and the adjustment in contributions required by  this
provision  shall  be made as of the date of the participant's
retirement.
    (f)  Notwithstanding  the  foregoing,   a   participating
employee  shall  not  be required to make contributions under
this Section after the date upon which  continuance  of  such
contributions  would  otherwise  cause  his or her retirement
annuity to exceed the maximum retirement annuity as specified
in clause (1) of subsection (c) of Section 15-136.
    (g)  A participating employee may make contributions  for
the purchase of service credit under this Article.
(Source:  P.A.  90-32,  eff.  6-27-97;  90-65,  eff.  7-7-97;
90-448,   eff.   8-16-97;   90-511,   eff.  8-22-97;  revised
11-14-97.)

    (40 ILCS 5/15-158.2)
    Sec.   15-158.2.   Optional   retirement   program    for
educational employees.
    (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  an  alternative
retirement program for eligible employees who  elect  not  to
participate  in  the other retirement programs provided under
this Article.
    (b)  Definitions.  For  the  purposes  of  this  Section,
"eligible employee" means an employee (other than an employee
performing  service described in clause (i) or (ii) of Rule 4
of Section 15-136) who is  eligible  to  participate  in  the
State  Universities  Retirement  System and who does not have
sufficient age  and  service  to  qualify  for  a  retirement
annuity   under   Section   15-135.   A  "currently  eligible
employee" is an employee who becomes an eligible employee  on
the   effective  date  of  the  optional  retirement  program
established by the employee's employer.   A  "newly  eligible
employee"  is  an  employee  who becomes an eligible employee
after the effective date of the optional  retirement  program
established by the employee's employer.
    (c)  Program.   Each employer subject to this Article may
elect to establish an optional retirement program under  this
Section  for  the  eligible  employees  whom it employs.  The
optional retirement program shall provide retirement benefits
for participating employees through the purchase  of  annuity
contracts, either fixed or variable or a combination thereof,
through  the  purchase  of  mutual funds, or through both and
shall also provide for disability benefits.
    The State Universities Retirement  System  shall  be  the
plan  sponsor for the program.  Consistent with its fiduciary
duty to the participants and beneficiaries  of  the  program,
the  Board  of Trustees of the System may delegate aspects of
program administration as it sees fit to companies authorized
to do business in this State,  to  the  employers,  or  to  a
combination of both.
    The  plan  must  be  qualified under the Internal Revenue
Code of 1986.
    (d)  Proposals.  The System,  in  consultation  with  the
employers,  shall  solicit  proposals  to  participate in the
program from insurance and annuity companies and mutual  fund
companies  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,  at least 2 of which must be insurance and annuity
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.
    An  employer  that elects to offer an optional retirement
program  under   subsection   (c)   may   only   select   for
participation  in  the  program  2  or  more of the companies
approved by the Board of Trustees of the System.  The System,
in consultation with the employers, shall periodically review
each approved company; a company may continue to  participate
in the program only so long as it continues to be an approved
company under contract with the Board.
    (e)  System  Conflict  of Interest.  In order to preclude
any conflict of interest by the System,  only  insurance  and
annuity   companies   and  mutual  fund  companies  that  are
authorized to do business in this State may be  approved,  in
accordance   with   the  procedures  of  subsection  (d),  to
participate in this program and offer investment options  for
program participants.
    (f)  Account   Balance   Transfers.   Employees  who  are
participating in the program  must  be  allowed  to  transfer
their account balances from the investment options offered by
one  of  the  companies  selected  by  the  employer  to  the
investment  options  offered  by another company so selected,
subject to applicable contractual provisions.
    (g)  Participation.  Any eligible employee may  elect  to
participate in the optional retirement program offered by the
employer  under subsection (c).  The election must be made in
writing and in  the  manner  prescribed  by  the  System.   A
currently  eligible  employee  must make this election within
one year after the effective date of the employer's  optional
retirement program.  A newly eligible employee must make this
election  within 60 days after becoming an eligible employee.
A  person  may  make  the   one-time   irrevocable   election
authorized  under  this  Section  or  the election authorized
under Section 15-154(a-1), but may not make  both  elections.
The  employer  shall  not  remit contributions on behalf of a
newly eligible employee to the State Universities  Retirement
System  until the 60-day period has run unless an election by
the employee has been made earlier.   Any  eligible  employee
interested   in  electing  the  optional  retirement  program
provided under this Section must be given a consultation with
the State Universities Retirement System before  making  that
election.
    Participation  in  the  optional retirement program shall
begin on the first day of the first pay period following  the
date  of  election, but no earlier than January 1, 1998.  The
employee's participation  in  any  other  retirement  program
administered by the System under this Article shall terminate
on  the  date  that  participation in the optional retirement
program begins, and the employee shall thereby be  deemed  to
have elected to receive a refund of contributions as provided
in  Section  15-154,  except  that  such  deemed refund shall
include interest at the effective  rate  for  the  respective
years,  and  except  that  any  funds  which  would have been
received  shall  instead  be  transferred  directly  to   the
optional  retirement  program  as  a  tax  free  transfer  in
accordance with Internal Revenue Service guidelines.
    Notwithstanding  any  other  provision  of  this Code, 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  optional
retirement program established under this Section.
    An  employee  who  has  elected  to  participate  in  the
optional  retirement program 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,  unless  the   optional   retirement   program   is
terminated in accordance with subsection (i).
    Participation  in  the  optional retirement program under
this  Section  shall  constitute  membership  in  the   State
Universities  Retirement System, although a participant under
this Section shall not be entitled to  receive  any  benefits
under  any  other  provisions of Article 15 or of Article 20.
An employee who receives a disability benefit or a retirement
benefit under this Section or an employee who receives a lump
sum distribution  from  a  mutual  fund  company  under  this
Section and uses the lump sum to purchase an annuity shall be
considered  an  employee or an annuitant under Article 15 for
purposes of the State Employees Group Insurance Act of  1971.
Participation  in  the optional retirement program under this
Section creates a contractual relationship  with  respect  to
the  investment of the employee's account balance between the
employee and the company providing the investment options for
the  employee's  account  balance.   Participation  does  not
create a contractual relationship between  the  employee  and
the System or between the employee and his or her employer.
    (h)  Contributions.   The contribution rate for employees
participating in the optional retirement program  under  this
Section  shall be equal to the employee contribution rate for
other participants in the System.  This required contribution
may be made as an "employer pick-up" under Section 414(h)  of
the  Internal  Revenue Code of 1986 or any successor Section.
Any employee participating in the System  or  who  elects  to
participate in the optional retirement program shall continue
to  have  the  employer "pick-up" the contribution.  However,
amounts  picked  up  after  the  election  of  the   optional
retirement   program   shall  be  remitted  to  the  optional
retirement plan.  In no  event  shall  an  employee  have  an
option of receiving these amounts in cash.  The program shall
provide  for employer contributions at a rate of no more than
7.6% of the participating employee's  salary.   The  optional
retirement  program  shall  be  funded  by contributions from
employees  participating  in   the   program   and   employer
contributions  as  required  by  the plan.  The plan shall be
funded in  a  manner  consistent  with  the  requirements  of
Internal   Revenue   Code   Section   412,   and  regulations
promulgated thereunder, as  that  Section  applies  to  money
purchase plans.
    The   State  of  Illinois  shall  make  contributions  by
appropriations to the System of  the  employer  contributions
required  for  employees  who  participate  in  the  optional
retirement  program  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 insurance and annuity  and  mutual  fund
companies  participating  in  the optional retirement program
under subsection (d)  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.
    The  contributions and interest thereon, and any benefits
based upon them, shall be treated as provided in the  funding
vehicles  for  this  plan.   An  amount  of  up to 1% of each
participating employee's  salary  shall  be  taken  from  the
employer  contribution to the optional retirement program and
shall be contributed, on the employee's  behalf,  to  a  plan
which the System offers to provide for disability benefits.
    (i)  Termination.    An   optional   retirement   program
authorized  under  this  Section  may  be  terminated  by the
employer, subject to the terms of any relevant contracts, and
the employer shall  have  no  obligation  to  reestablish  an
optional retirement program under this Section.  This Section
does  not  create  a  right to continued participation in any
optional retirement program set up by an employer under  this
Section.   If  an  optional retirement program 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.   Employer  contributions  shall  be vested
after five years of employment.  If  an  employee  terminates
employment  prior  to  completing  five years of service, the
employee shall be entitled to a benefit  in  accordance  with
the terms of the employer's retirement plan which is based on
the   accumulation   value  attributable  to  the  employee's
contributions and any investment  return  thereon.   Benefits
for  employees  who  terminate  with  at  least five years of
service shall be in accordance with the terms of the optional
retirement  plan  and  based  on   the   accumulation   value
attributable   to   both  the  employer  and  the  employee's
contributions  and  any  investment  return  thereon.     Any
employer  contributions  which are forfeited shall be held in
escrow by the company investing those contributions and shall
be used to reduce the  next  premium  payment  due  from  the
employer.
(Source: P.A. 89-430, eff. 12-15-95; 90-448, eff. 8-16-97.)
    (40 ILCS 5/15-181) (from Ch. 108 1/2, par. 15-181)
    Sec. 15-181. Duties of employers.
    (a)  Each  employer,  in  preparing  payroll vouchers for
participating employees, shall indicate, in addition to other
information: (1) the amount  of  employee  contributions  and
survivors  insurance  contributions  required  under  Section
15-157,  (2) the gross earnings payable to each employee, and
(3) the total of all  contributions  required  under  Section
15-157.    An  additional  certified  copy  of  each  payroll
certified by each employer shall be forwarded along with  the
original  payroll  to  the  Director  of  Central  Management
Services,  State Comptroller, and other officer receiving the
original certified payroll for transmittal to the board.
    (b)  Each employer, in drawing warrants or checks against
trust or  federal  funds  for  items  of  salary  on  payroll
vouchers  certified by employers, shall draw such warrants or
checks to participating employees  for  the  amount  of  cash
salary  or  wages  specified for the period, and shall draw a
warrant or  check  to  this  system  for  the  total  of  the
contributions  required under Section 15-157.  The warrant or
check drawn to this system, together with the additional copy
of the payroll supplied by the employer, shall be transmitted
immediately to the board.
    (c)  The City of Champaign and the  City  of  Urbana,  as
employers  of persons who participate in this System pursuant
to subsection (h) of Section 15-107, shall each  collect  and
transmit  to  the  System  from  each  payroll  the  employee
contributions  required  under  Section 15-157, together with
such payroll documentation as the Board may require,  at  the
time that the payroll is paid.
(Source: P.A. 83-1440.)

    Section  90.  The State Mandates Act is amended by adding
Section 8.22 as follows:
    (30 ILCS 805/8.22 new)
    Sec. 8.22. 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 1998.

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

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