Bill Amendment: IL SB1235 | 2023-2024 | 103rd General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: PENCD-SURS-SERVICE CALCULATION

Status: 2023-08-11 - Public Act . . . . . . . . . 103-0548 [SB1235 Detail]

Download: Illinois-2023-SB1235-House_Amendment_001.html

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Rep. Stephanie A. Kifowit

Filed: 5/8/2023

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AMENDMENT TO SENATE BILL 1235
AMENDMENT NO. ______. Amend Senate Bill 1235 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Pension Code is amended by
changing Sections 15-112, 15-134.1, 15-159, and 15-198 as
follows:
(40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
Sec. 15-112. Final rate of earnings. "Final rate of
earnings":
(a) This subsection (a) applies only to a Tier 1 member.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings during the 48
consecutive calendar month period ending with the last day of
final termination of employment or the 4 consecutive academic
years of service in which the employee's earnings were the

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highest, whichever is greater. For any other employee, the
average annual earnings during the 4 consecutive academic
years of service in which his or her earnings were the highest.
For an employee with less than 48 months or 4 consecutive
academic years of service, the average earnings during his or
her entire period of service. The earnings of an employee with
more than 36 months of service under item (a) of Section
15-113.1 prior to the date of becoming a participant are, for
such period, considered equal to the average earnings during
the last 36 months of such service.
(b) This subsection (b) applies to a Tier 2 member.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings obtained by
dividing by 8 the total earnings of the employee during the 96
consecutive months in which the total earnings were the
highest within the last 120 months prior to termination.
For any other employee, the average annual earnings during
the 8 consecutive academic years within the 10 years prior to
termination in which the employee's earnings were the highest.
For an employee with less than 96 consecutive months or 8
consecutive academic years of service, whichever is necessary,
the average earnings during his or her entire period of
service.
(c) For an employee on leave of absence with pay, or on
leave of absence without pay who makes contributions during

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such leave, earnings are assumed to be equal to the basic
compensation on the date the leave began.
(d) For an employee on disability leave, earnings are
assumed to be equal to the basic compensation on the date
disability occurs or the average earnings during the 24 months
immediately preceding the month in which disability occurs,
whichever is greater.
(e) For a Tier 1 member who retires on or after the
effective date of this amendatory Act of 1997 with at least 20
years of service as a firefighter or police officer under this
Article, the final rate of earnings shall be the annual rate of
earnings received by the participant on his or her last day as
a firefighter or police officer under this Article, if that is
greater than the final rate of earnings as calculated under
the other provisions of this Section.
(f) If a Tier 1 member is an employee for at least 6 months
during the academic year in which his or her employment is
terminated, the annual final rate of earnings shall be 25% of
the sum of (1) the annual basic compensation for that year, and
(2) the amount earned during the 36 months immediately
preceding that year, if this is greater than the final rate of
earnings as calculated under the other provisions of this
Section.
(g) In the determination of the final rate of earnings for
an employee, that part of an employee's earnings for any
academic year beginning after June 30, 1997, which exceeds the

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employee's earnings with that employer for the preceding year
by more than 20 percent shall be excluded; in the event that an
employee has more than one employer this limitation shall be
calculated separately for the earnings with each employer. In
making such calculation, only the basic compensation of
employees shall be considered, without regard to vacation or
overtime or to contracts for summer employment. Beginning
September 1, 2024, this subsection (g) also applies to an
employee who has been employed at 1/2 time or less for 3 or
more years.
(h) The following are not considered as earnings in
determining final rate of earnings: (1) severance or
separation pay, (2) retirement pay, (3) payment for unused
sick leave, and (4) payments from an employer for the period
used in determining final rate of earnings for any purpose
other than (i) services rendered, (ii) leave of absence or
vacation granted during that period, and (iii) vacation of up
to 56 work days allowed upon termination of employment; except
that, if the benefit has been collectively bargained between
the employer and the recognized collective bargaining agent
pursuant to the Illinois Educational Labor Relations Act,
payment received during a period of up to 2 academic years for
unused sick leave may be considered as earnings in accordance
with the applicable collective bargaining agreement, subject
to the 20% increase limitation of this Section. Any unused
sick leave considered as earnings under this Section shall not

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be taken into account in calculating service credit under
Section 15-113.4.
(i) Intermittent periods of service shall be considered as
consecutive in determining final rate of earnings.
(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
(40 ILCS 5/15-134.1) (from Ch. 108 1/2, par. 15-134.1)
Sec. 15-134.1. Service calculation and adjustment.
(a) For the purposes of computing service for academic
years for any participant, In computing service, the following
schedule shall govern: one month of service means a calendar
month during which a participant (i) qualifies as an employee
under Section 15-107 for at least 15 or more days, and (ii)
receives any earnings as an employee; 8 or more months of
service during an academic year shall constitute a year of
service; 6 or more but less than 8 months of service during an
academic year shall constitute 3/4 of a year of service; 3 or
more but less than 6 months of service during an academic year
shall constitute 1/2 of a year of service; and one or more but
less than 3 months of service during an academic year shall
constitute 1/4 of a year of service. No more than one year of
service may be granted per academic year, regardless of the
number of hours or percentage of time worked. This subsection
(a) does not apply to service periods to which subsection
(a-5) applies.
(a-5) For the purposes of computing service for academic

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years for any participant, the following schedule shall
govern: one month of service means a calendar month during
which a participant (i) qualifies as an employee under Section
15-107 and contributes to the System, and (ii) receives any
earnings as an employee; 8 or more months of service during an
academic year shall constitute a year of service; 6 or more but
less than 8 months of service during an academic year shall
constitute 3/4 of a year of service; 3 or more but less than 6
months of service during an academic year shall constitute 1/2
of a year of service; and one or more but less than 3 months of
service during an academic year shall constitute 1/4 of a year
of service. No more than one year of service may be granted per
academic year, regardless of the number of hours or percentage
of time worked.
This subsection (a-5) applies to all service periods of a
member who is a participant on or after September 1, 2024;
except that such changes shall not apply to service periods
that were subject to: (1) a purchase under subsection (i) of
Section 15-107, subsection (c) of Section 15-113.1, or Section
15-113.2, 15-113.3, 15-113.5, 15-113.6, 15-113.7, or
15-113.11; (2) a repayment of a refund under subsection (b) of
Section 15-154 or a distribution under subsection (j) of
Section 15-158.2; or (3) a transfer under Section 15-113.10,
15-134.2, or 15-134.4 if payment for such purchase, repayment,
or transfer commenced prior to September 1, 2024.
(b) In calculating a retirement annuity, if a participant

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has been employed at 1/2 time or less for 3 or more years after
September 1, 1959, service shall be granted for such
employment in excess of 3 years, in the proportion that the
percentage of time employed for each such year of employment
bears to the average annual percentage of time employed during
the period on which the final rate of earnings is based. This
adjustment shall not be made, however, in determining the
eligibility for a retirement annuity, disability benefits,
additional death benefits, or survivors' insurance. The
percentage of time employed shall be as reported by the
employer. This subsection (b) shall not apply to a member who
is a participant on or after September 1, 2024.
(Source: P.A. 87-8.)
(40 ILCS 5/15-159) (from Ch. 108 1/2, par. 15-159)
Sec. 15-159. Board created.
(a) A board of trustees constituted as provided in this
Section shall administer this System. The board shall be known
as the Board of Trustees of the State Universities Retirement
System.
(b) (Blank).
(c) (Blank).
(d) The Beginning on the 90th day after April 3, 2009 (the
effective date of Public Act 96-6), the Board of Trustees
shall be constituted as follows:
(1) The Chairperson of the Board of Higher Education.

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(2) Four trustees appointed by the Governor with the
advice and consent of the Senate who may not be members of
the system or hold an elective State office and who shall
serve for a term of 6 years, except that the terms of the
initial appointees under this subsection (d) shall be as
follows: 2 for a term of 3 years and 2 for a term of 6
years. The term of an appointed trustee shall terminate
immediately upon becoming a member of the system or being
sworn into an elective State office, and the position
shall be considered to be vacant and shall be filled
pursuant to subsection (f) of this Section.
(3) Four participating employees of the system to be
elected from the contributing membership of the system by
the contributing members, no more than 2 of which may be
from any of the University of Illinois campuses, who shall
serve for a term of 6 years, except that the terms of the
initial electees shall be as follows: 2 for a term of 3
years and 2 for a term of 6 years.
(3.5) Two participating employees of the system who
are employees of a community college and shall serve for a
term of 6 years, one of whom shall be elected from the
contributing membership and one of whom shall be appointed
by the Governor.
(4) Two annuitants of the system who have been
annuitants for at least one full year, to be elected from
and by the annuitants of the system, no more than one of

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which may be from any of the University of Illinois
campuses, who shall serve for a term of 6 years, except
that the terms of the initial electees shall be as
follows: one for a term of 3 years and one for a term of 6
years.
The chairperson of the Board shall be appointed by the
Governor from among the trustees.
For the purposes of this Section, the Governor may make a
nomination and the Senate may confirm the nominee in advance
of the commencement of the nominee's term of office.
(e) The 6 elected trustees shall be elected within 90 days
after April 3, 2009 (the effective date of Public Act 96-6) for
a term beginning on the 90th day after that effective date. The
elected trustee under paragraph (3.5) of subsection (d) shall
be elected within 90 days after the effective date of this
amendatory Act of the 103rd General Assembly. Trustees shall
be elected thereafter as terms expire for a 6-year term
beginning July 15 next following their election, and such
election shall be held on May 1, or on May 2 when May 1 falls
on a Sunday. The board may establish rules for the election of
trustees to implement the provisions of Public Act 96-6 and
this amendatory Act of the 103rd General Assembly and for
future elections. Candidates for the participating trustee
shall be nominated by petitions in writing, signed by not less
than 400 participants with their addresses shown opposite
their names. Candidates for the annuitant trustee shall be

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nominated by petitions in writing, signed by not less than 100
annuitants with their addresses shown opposite their names. If
there is more than one qualified nominee for each elected
trustee, then the board shall conduct a secret ballot election
by mail for that trustee, in accordance with rules as
established by the board. If there is only one qualified
person nominated by petition for each elected trustee, then
the election as required by this Section shall not be
conducted for that trustee and the board shall declare such
nominee duly elected. A vacancy occurring in the elective
membership of the board shall be filled for the unexpired term
by the elected trustees serving on the board for the remainder
of the term. Nothing in this subsection shall preclude the
adoption of rules providing for internet or phone balloting in
addition, or as an alternative, to election by mail.
(f) A vacancy in the appointed membership on the board of
trustees caused by resignation, death, expiration of term of
office, or other reason shall be filled by a qualified person
appointed by the Governor for the remainder of the unexpired
term.
(g) Trustees shall continue in office until their
respective successors are appointed and have qualified, except
that a trustee elected to one of the participating employee
positions after the effective date of this amendatory Act of
the 102nd General Assembly shall be disqualified immediately
upon the termination of his or her status as a participating

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employee and a trustee elected to one of the annuitant
positions after the effective date of this amendatory Act of
the 102nd General Assembly shall be disqualified immediately
upon the termination of his or her status as an annuitant
receiving a retirement annuity.
An elected trustee who is incumbent on the effective date
of this amendatory Act of the 102nd General Assembly whose
status as a participating employee or annuitant has terminated
after having been elected shall continue to serve in the
participating employee or annuitant position to which he or
she was elected for the remainder of the term.
(h) Each trustee must take an oath of office before a
notary public of this State and shall qualify as a trustee upon
the presentation to the board of a certified copy of the oath.
The oath must state that the person will diligently and
honestly administer the affairs of the retirement system, and
will not knowingly violate or willfully permit to be violated
any provisions of this Article.
Each trustee shall serve without compensation but shall be
reimbursed for expenses necessarily incurred in attending
board meetings and carrying out his or her duties as a trustee
or officer of the system.
(Source: P.A. 101-610, eff. 1-1-20; 102-210, eff. 7-30-21.)
(40 ILCS 5/15-198)
Sec. 15-198. Application and expiration of new benefit

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increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
100-23, Public Act 100-587, Public Act 100-769, Public Act
101-10, Public Act 101-610, Public Act 102-16, or this
amendatory Act of the 103rd General Assembly or this
amendatory Act of the 102nd General Assembly.
(b) Notwithstanding any other provision of this Code or
any subsequent amendment to this Code, every new benefit
increase is subject to this Section and shall be deemed to be
granted only in conformance with and contingent upon
compliance with the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional

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funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of
the Department of Insurance. A new benefit increase created by
a Public Act that does not include the additional funding
required under this subsection is null and void. If the Public
Pension Division determines that the additional funding
provided for a new benefit increase under this subsection is
or has become inadequate, it may so certify to the Governor and
the State Comptroller and, in the absence of corrective action
by the General Assembly, the new benefit increase shall expire
at the end of the fiscal year in which the certification is
made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including, without limitation, a person who
continues in service after the expiration date and did not

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apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
101-610, eff. 1-1-20; 102-16, eff. 6-17-21.)
Section 97. Inseverability. The changes made to existing
statutory law by this Act are mutually dependent and
inseverable. If any change made to existing statutory law by
this Act is held invalid other than as applied to a particular
person or circumstance, then all changes made to existing
statutory law by this Act are invalid in their entirety.
Section 99. Effective date. This Act takes effect upon
becoming law.".