Bill Text: IL HB1371 | 2013-2014 | 98th General Assembly | Introduced

---

Bill Title: Amends the Downstate Police and Firefighter Articles of the Illinois Pension Code. Delays by one year a procedure under which the Comptroller is required to divert certain State payments from the intended recipient to a pension fund when the intended recipient is more than 90 days overdue in making a required contribution to the pension fund. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB1371 Detail]

Download: Illinois-2013-HB1371-Introduced.html

---

98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB1371 Introduced , by Rep. David Harris SYNOPSIS AS INTRODUCED:
40 ILCS 5/3-125 from Ch. 108 1/2, par. 3-125
40 ILCS 5/4-118 from Ch. 108 1/2, par. 4-118
Amends the Downstate Police and Firefighter Articles of the Illinois Pension Code. Delays by one year a procedure under which the Comptroller is required to divert certain State payments from the intended recipient to a pension fund when the intended recipient is more than 90 days overdue in making a required contribution to the pension fund. Effective immediately.
LRB098 09348 EFG 39489 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY
A BILL FOR
HB1371 LRB098 09348 EFG 39489 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 3-125 and 4-118 as follows:
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. 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 police officers, and revenues
available from other sources, will equal a sum sufficient to
meet the annual requirements of the police pension fund. The
annual requirements to be provided by such tax levy are equal
to (1) the normal cost of the pension fund for the year
involved, plus (2) an amount sufficient to bring the total
assets of the pension fund up to 90% of the total actuarial
liabilities of the pension fund by the end of municipal fiscal
year 2040, 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. In making these determinations, the required

HB1371 - 2 - LRB098 09348 EFG 39489 b
minimum employer contribution shall be calculated each year as
a level percentage of payroll over the years remaining up to
and including fiscal year 2040 and shall be determined under
the projected unit credit actuarial cost method. The tax shall
be levied and collected in the same manner as the general taxes
of the municipality, and in addition to all other taxes now or
hereafter authorized to be levied upon all property within the
municipality, and shall be in addition to the amount authorized
to be levied for general purposes as provided by Section 8-3-1
of the Illinois Municipal Code, approved May 29, 1961, as
amended. The tax shall be forwarded directly to the treasurer
of the board within 30 business days after receipt by the
county.
(b) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the System's
assets for fiscal years after March 30, 2011, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(c) If a participating municipality fails to transmit to

HB1371 - 3 - LRB098 09348 EFG 39489 b
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments, and the Comptroller must, beginning in fiscal year
2017 2016, deduct and deposit into the fund the certified
amounts or a portion of those amounts from the following
proportions of grants of State funds to the municipality:
(1) in fiscal year 2017 2016, one-third of the total
amount of any grants of State funds to the municipality;
(2) in fiscal year 2018 2017, two-thirds of the total
amount of any grants of State funds to the municipality;
and
(3) in fiscal year 2019 2018 and each fiscal year
thereafter, the total amount of any grants of State funds
to the municipality.
The State Comptroller may not deduct from any grants of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(d) The police 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 police officers under Section
3-125.1;

HB1371 - 4 - LRB098 09348 EFG 39489 b
(3) All moneys accumulated by the municipality under
any previous legislation establishing a fund for the
benefit of disabled or retired police officers;
(4) Donations, gifts or other transfers authorized by
this Article.
(e) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 95-530, eff. 8-28-07; 96-1495, eff. 1-1-11.)
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

HB1371 - 5 - LRB098 09348 EFG 39489 b
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) an annual amount
sufficient to bring the total assets of the pension fund up to
90% of the total actuarial liabilities of the pension fund by
the end of municipal fiscal year 2040, 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. In making these
determinations, the required minimum employer contribution
shall be calculated each year as a level percentage of payroll
over the years remaining up to and including fiscal year 2040
and shall be determined under the projected unit credit
actuarial cost method. The amount to be applied towards the

HB1371 - 6 - LRB098 09348 EFG 39489 b
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.
(a-5) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the pension
fund's assets for fiscal years after March 30, 2011, any
actuarial gains or losses from investment return incurred
in a fiscal year shall be recognized in equal annual
amounts over the 5-year period following that fiscal year.
(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 county (or, in the

HB1371 - 7 - LRB098 09348 EFG 39489 b
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).
(b-5) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments, and the Comptroller must, beginning in fiscal year
2017 2016, deduct and deposit into the fund the certified
amounts or a portion of those amounts from the following
proportions of grants of State funds to the municipality:
(1) in fiscal year 2017 2016, one-third of the total
amount of any grants of State funds to the municipality;
(2) in fiscal year 2018 2017, two-thirds of the total
amount of any grants of State funds to the municipality;
and
(3) in fiscal year 2019 2018 and each fiscal year
thereafter, the total amount of any grants of State funds
to the municipality.
The State Comptroller may not deduct from any grants of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(c) The board shall make available to the membership and

HB1371 - 8 - LRB098 09348 EFG 39489 b
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

HB1371 - 9 - LRB098 09348 EFG 39489 b
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.
(g) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 96-1495, eff. 1-1-11.)
Section 99. Effective date. This Act takes effect upon
becoming law.