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Public Act 91-0017
SB55 Enrolled LRB9100709EGfg
AN ACT to amend the Illinois Pension Code by changing
Sections 16-129.1, 16-133, 16-133.2, 17-116.1, and 17-119.1
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 16-129.1, 16-133, 16-133.2, 17-116.1, and
17-119.1 as follows:
(40 ILCS 5/16-129.1)
Sec. 16-129.1. Optional increase in retirement annuity.
(a) A member of the System may qualify for the augmented
rate under subdivision (a)(B)(1) of Section 16-133 for all
years of creditable service earned before July 1, 1998 by
making the optional contribution specified in subsection (b).
A member may not elect to qualify for the augmented rate for
only a portion of his or her creditable service earned before
July 1, 1998.
(b) The contribution shall be an amount equal to 1.0% of
the member's highest salary rate in the 4 consecutive school
years immediately prior to but not including the school year
in which the application occurs, multiplied by the number of
years of creditable service earned by the member before July
1, 1998 or 20, whichever is less. This contribution shall be
reduced by 1.0% of that salary rate for every 3 full years of
creditable service earned by the member after June 30, 1998.
The contribution shall be further reduced at the rate of 25%
of the contribution (as reduced for service after June 30,
1998) for each year of the member's total creditable service
in excess of 34 years. The contribution shall not in any
event exceed 20% of that salary rate.
The member shall pay to the System the amount of the
contribution as calculated at the time of application under
this Section. The amount of the contribution determined
under this subsection shall be recalculated at the time of
retirement, and if the System determines that the amount paid
by the member exceeds the recalculated amount, the System
shall refund the difference to the member with regular
interest from the date of payment to the date of refund.
The contribution required by this subsection shall be
paid in one of the following ways or in a combination of the
following ways that does not extend over more than 5 years:
(i) in a lump sum on or before the date of
retirement;
(ii) in substantially equal installments over a
period of time not to exceed 5 years, as a deduction from
salary in accordance with subsection (b) of Section
16-154;
(iii) if the member becomes an annuitant before
June 30, 2003, in substantially equal monthly
installments over a 24-month period, by reducing the
annuitant's monthly benefit over a 24-month period by the
amount of the otherwise applicable contribution. For
federal and Illinois tax purposes, the monthly amount by
which the annuitant's benefit is reduced shall not be
treated as a contribution by the annuitant, but rather as
a reduction of the annuitant's monthly benefit.
(c) If the member fails to make the full contribution
under this Section in a timely fashion, the payments made
under this Section shall be refunded to the member, without
interest. If the member dies before making the full
contribution, the payments made under this Section, together
with regular interest thereon, shall be refunded to the
member's designated beneficiary for benefits under Section
16-138.
(d) For purposes of this Section and subdivision
(a)(B)(1) of Section 16-133, optional creditable service
established by a member shall be deemed to have been earned
at the time of the employment or other qualifying event upon
which the service is based, rather than at the time the
credit was established in this System.
(e) The contributions required under this Section are
the responsibility of the teacher and not the teacher's
employer. However, an employer of teachers may, after the
effective date of this amendatory Act of 1998, specifically
agree, through collective bargaining or otherwise, to make
the contributions required by this Section on behalf of those
teachers.
(Source: P.A. 90-582, eff. 5-27-98.)
(40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
Sec. 16-133. Retirement annuity; amount.
(a) The amount of the retirement annuity shall be the
larger of the amounts determined under paragraphs (A) and (B)
below:
(A) An amount consisting of the sum of the
following:
(1) An amount that can be provided on an
actuarially equivalent basis by the member's
accumulated contributions at the time of retirement;
and
(2) The sum of (i) the amount that can be
provided on an actuarially equivalent basis by the
member's accumulated contributions representing
service prior to July 1, 1947, and (ii) the amount
that can be provided on an actuarially equivalent
basis by the amount obtained by multiplying 1.4
times the member's accumulated contributions
covering service subsequent to June 30, 1947; and
(3) If there is prior service, 2 times the
amount that would have been determined under
subparagraph (2) of paragraph (A) above on account
of contributions which would have been made during
the period of prior service creditable to the member
had the System been in operation and had the member
made contributions at the contribution rate in
effect prior to July 1, 1947.
(B) An amount consisting of the greater of the
following:
(1) For creditable service earned before July
1, 1998 that has not been augmented under Section
16-129.1: 1.67% of final average salary for each of
the first 10 years of creditable service, 1.90% of
final average salary for each year in excess of 10
but not exceeding 20, 2.10% of final average salary
for each year in excess of 20 but not exceeding 30,
and 2.30% of final average salary for each year in
excess of 30; and
For creditable service earned on or after July
1, 1998 by a member who has at least 24 30 years of
creditable service on July 1, 1998 and who does not
elect to augment service under Section 16-129.1:
2.2% of final average salary for each year of
creditable service earned on or after July 1, 1998
but before the member reaches a total of 30 years of
creditable service and 2.3% of final average salary
for each year of creditable service earned on or
after July 1, 1998 and after the member reaches a
total of 30 years of creditable service; and
For all other creditable service: 2.2% of
final average salary for each year of creditable
service; or
(2) 1.5% of final average salary for each year
of creditable service plus the sum $7.50 for each of
the first 20 years of creditable service.
The amount of the retirement annuity determined under
this paragraph (B) shall be reduced by 1/2 of 1% for each
month that the member is less than age 60 at the time the
retirement annuity begins. However, this reduction shall
not apply (i) if the member has at least 35 years of
creditable service, or (ii) if the member retires on
account of disability under Section 16-149.2 of this
Article with at least 20 years of creditable service.
(b) For purposes of this Section, final average salary
shall be the average salary for the highest 4 consecutive
years within the last 10 years of creditable service as
determined under rules of the board. The minimum final
average salary shall be considered to be $2,400 per year.
In the determination of final average salary for members
other than elected officials and their appointees when such
appointees are allowed by statute, that part of a member's
salary for any year beginning after June 30, 1979 which
exceeds the member's annual full-time salary rate with the
same employer for the preceding year by more than 20% shall
be excluded.
(c) In determining the amount of the retirement annuity
under paragraph (B) of this Section, a fractional year shall
be granted proportional credit.
(d) The retirement annuity determined under paragraph
(B) of this Section shall be available only to members who
render teaching service after July 1, 1947 for which member
contributions are required, and to annuitants who re-enter
under the provisions of Section 16-150.
(e) The maximum retirement annuity provided under
paragraph (B) of this Section shall be 75% of final average
salary.
(f) A member retiring after the effective date of this
amendatory Act of 1998 shall receive a pension equal to 75%
of final average salary if the member is qualified to receive
a retirement annuity equal to at least 74.6% of final average
salary under this Article or as proportional annuities under
Article 20 of this Code.
(Source: P.A. 90-582, eff. 5-27-98.)
(40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
Sec. 16-133.2. Early retirement without discount. A
member retiring after June 1, 1980 and on or before June 30,
2005 2000, and applying for a retirement annuity within 6
months of the last day of teaching for which retirement
contributions were required, may elect at the time of
application for a retirement annuity, to make a one time
member contribution to the System and thereby avoid the
reduction in the retirement annuity for retirement before age
60 specified in paragraph (B) of Section 16-133. The
exercise of the election shall also obligate the last
employer to make a one time non-refundable contribution to
the System. Substitute teachers wishing to exercise this
election must teach 85 or more days in one school term with
one employer, who shall be deemed the last employer for
purposes of this Section. The last day of teaching with that
employer must be within 6 months of the date of application
for retirement. All substitute teaching credit applied
toward the required 85 days must be earned after June 30,
1990.
The one time member and employer contributions shall be a
percentage of the retiring member's highest annual salary
rate used in the determination of the average salary for
retirement annuity purposes. However, when determining the
one-time member and employer contributions, that part of a
member's salary with the same employer which exceeds the
annual salary rate for the preceding year by more than 20%
shall be excluded. The member contribution shall be at the
rate of 7% for the lesser of the following 2 periods: (1)
for each year that the member is less than age 60; or (2) for
each year that the member's creditable service is less than
35 years. If a member is at least age 55 and has at least 34
years of creditable service, no member or employer
contribution for the early retirement option shall be
required. The employer contribution shall be at the rate of
20% for each year the member is under age 60.
Upon receipt of the application and election, the System
shall determine the one time employee and employer
contributions required. The member contribution shall be
credited to the individual account of the member and the
employer contribution shall be credited to the Employer's
Contribution Reserve. The provisions of this Section shall
not be applicable until the member's contribution, if any,
has all the above outlined contributions have been received
by the System; however, the date such contributions are
received shall not be considered in determining the effective
date of retirement.
The number of members working for a single employer who
may retire under this Section in any year may be limited at
the option of the employer to a specified percentage of those
eligible, not less than 30%, with the right to participate to
be allocated among those applying on the basis of seniority
in the service of the employer.
(Source: P.A. 89-10, eff. 3-31-95; 90-582, eff. 5-27-98.)
(40 ILCS 5/17-116.1) (from Ch. 108 1/2, par. 17-116.1)
Sec. 17-116.1. Early retirement without discount.
(a) A member retiring after June 1, 1980 and before June
30, 1995 and within 6 months of the last day of teaching for
which retirement contributions were required, may elect at
the time of application to make a one time employee
contribution to the system and thereby avoid the early
retirement reduction in allowance specified in paragraph (4)
of Section 17-116 of this Article. The exercise of the
election shall obligate the last Employer to also make a one
time non-refundable contribution to the Fund.
(b) Subject to authorization by the Employer as provided
in subsection (c), a member retiring on or after June 30,
1995 and on or before June 30, 2005 2000 and within 6 months
of the last day of teaching for which retirement
contributions were required may elect at the time of
application to make a one-time employee contribution to the
Fund and thereby avoid the early retirement reduction in
allowance specified in paragraph (4) of Section 17-116. The
exercise of the election shall obligate the last Employer to
also make a one-time nonrefundable contribution to the Fund.
(c) The benefits provided in subsection (b) are
available only to members who retire, during a specified
period, from employment with an Employer that has adopted and
filed with the Board a resolution expressly providing for the
creation of an early retirement without discount program
under this Section for that period.
The Employer has the full discretion and authority to
determine whether an early retirement without discount
program is in its best interest and to provide such a program
to its eligible employees in accordance with this Section.
The Employer may decide to authorize such a program for one
or more of the following periods: for the period beginning
July 1, 1997 and ending June 30, 1998, in which case the
resolution must be adopted by January 1, 1998; for the period
beginning July 1, 1998 and ending June 30, 1999, in which
case the resolution must be adopted by March 31, 1998; and
for the period beginning July 1, 1999 and ending June 30,
2000, in which case the resolution must be adopted by March
31, 1999; for the period beginning July 1, 2000 and ending
June 30, 2001, in which case the resolution must be adopted
by March 31, 2000; for the period beginning July 1, 2001 and
ending June 30, 2002, in which case the resolution must be
adopted by March 31, 2001; for the period beginning July 1,
2002 and ending June 30, 2003, in which case the resolution
must be adopted by March 31, 2002; for the period beginning
July 1, 2003 and ending June 30, 2004, in which case the
resolution must be adopted by March 31, 2003; and for the
period beginning July 1, 2004 and ending June 30, 2005, in
which case the resolution must be adopted by March 31, 2004.
The resolution must be filed with the Board within 10 days
after it is adopted. A single resolution may authorize an
early retirement without discount program as provided in this
Section for more than one period.
Notwithstanding Section 17-157, the Employer shall also
have full discretion and authority to determine whether to
allow its employees who withdrew from service on or after
June 30, 1995 and before June 27, 1997 to participate in an
early retirement without discount program under subsection
(b). An early retirement without discount program for those
who withdrew from service on or after June 30, 1995 and
before June 27, 1997 may be authorized only by a resolution
of the Employer that is adopted by January 1, 1998 and filed
with the Board within 10 days after its adoption. If such a
resolution is duly adopted and filed, a person who (i)
withdrew from service with the Employer on or after June 30,
1995 and before June 27, 1997, (ii) qualifies for early
retirement without discount under subsection (b), (iii)
applies to the Fund within 90 days after the authorizing
resolution is adopted, and (iv) pays the required employee
contribution shall have his or her retirement pension
recalculated in accordance with subsection (b). The
resulting increase shall be effective retroactively to the
starting date of the retirement pension.
(d) The one-time employee contribution shall be equal to
7% of the retiring member's highest full-time annual salary
rate used in the determination of the average salary rate for
retirement pension, or if not full-time then the full-time
equivalent, multiplied by (1) the number of years the teacher
is under age 60, or (2) the number of years the employee's
creditable service is less than 34 35 years, whichever is
less.
The Employer contribution shall be 20% of such salary
multiplied by such number of years.
(e) Upon receipt of the application and election, the
Board shall determine the one time employee and Employer
contributions. The provisions of this Section shall not be
applicable until the employee contribution, if any, has all
the above outlined contributions have been received by the
Fund; however, the date that contribution is such
contributions are received shall not be considered in
determining the effective date of retirement.
(f) The number of employees who may retire under this
Section in any year may be limited at the option of the
Employer to a specified percentage of those eligible, not
lower than 30%, with the right to participate to be allocated
among those applying on the basis of seniority in the service
of the Employer.
(Source: P.A. 90-32, eff. 6-27-97; 90-448, eff. 8-16-97;
90-566, eff. 1-2-98.)
(40 ILCS 5/17-119.1)
Sec. 17-119.1. Optional increase in retirement annuity.
(a) A member of the Fund may qualify for the augmented
rate under subdivision (b)(3) of Section 17-116 for all years
of creditable service earned before July 1, 1998 by making
the optional contribution specified in subsection (b). A
member may not elect to qualify for the augmented rate for
only a portion of his or her creditable service earned before
July 1, 1998.
(b) The contribution shall be an amount equal to 1.0% of
the member's highest salary rate in the 4 consecutive school
years immediately prior to but not including the school year
in which the application occurs, multiplied by the number of
years of creditable service earned by the member before July
1, 1998 or 20, whichever is less. This contribution shall be
reduced by 1.0% of that salary rate for every 3 full years of
creditable service earned by the member after June 30, 1998.
The contribution shall be further reduced at the rate of 25%
of the contribution (as reduced for service after June 30,
1998) for each year of the member's total creditable service
in excess of 34 years. The contribution shall not in any
event exceed 20% of that salary rate.
The member shall pay to the Fund the amount of the
contribution as calculated at the time of application under
this Section. The amount of the contribution determined
under this subsection shall be recalculated at the time of
retirement, and if the Fund determines that the amount paid
by the member exceeds the recalculated amount, the Fund shall
refund the difference to the member with regular interest
from the date of payment to the date of refund.
The contribution required by this subsection shall be
paid in one of the following ways or in a combination of the
following ways that does not extend over more than 5 years:
(i) in a lump sum on or before the date of
retirement;
(ii) in substantially equal installments over a
period of time not to exceed 5 years, as a deduction from
salary in accordance with Section 17-130.2;
(iii) if the member becomes an annuitant before
June 30, 2003, in substantially equal monthly
installments over a 24-month period, by a deduction from
the annuitant's monthly benefit.
(c) If the member fails to make the full contribution
under this Section in a timely fashion, the payments made
under this Section shall be refunded to the member, without
interest. If the member dies before making the full
contribution, the payments made under this Section shall be
refunded to the member's designated beneficiary.
(d) For purposes of this Section and subsection (b) of
Section 17-116, optional creditable service established by a
member shall be deemed to have been earned at the time of the
employment or other qualifying event upon which the service
is based, rather than at the time the credit was established
in this Fund.
(e) The contributions required under this Section are
the responsibility of the teacher and not the teacher's
employer. However, an employer of teachers may, after the
effective date of this amendatory Act of 1998, specifically
agree, through collective bargaining or otherwise, to make
the contributions required by this Section on behalf of those
teachers.
(Source: P.A. 90-582, eff. 5-27-98.)
Section 90. The State Mandates Act is amended by adding
Section 8.23 as follows:
(30 ILCS 805/8.23 new)
Sec. 8.23. 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 the 91st General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.
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