Bill Text: IL HB2289 | 2011-2012 | 97th General Assembly | Amended

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Bill Title: Amends the Illinois Pension Code. Makes a technical change in a Section concerning the Illinois Municipal Retirement Fund.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB2289 Detail]

Download: Illinois-2011-HB2289-Amended.html

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Rep. David R. Leitch

Filed: 4/12/2011

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AMENDMENT TO HOUSE BILL 2289
AMENDMENT NO. ______. Amend House Bill 2289 by replacing
everything after the enacting clause with the following:
"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

09700HB2289ham002 - 2 - LRB097 07874 JDS 54420 a
involved, plus (2) either (i) in the case of a participating
municipality that has elected a 30-year rolling amortization
period pursuant to subsection (f) of this Section, an amount
sufficient to bring the total assets of the pension fund up to
90% of the total actuarial liabilities of the pension fund
within 30 years, 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, or (ii) in all other cases, 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 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

09700HB2289ham002 - 3 - LRB097 07874 JDS 54420 a
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
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
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 2016, one-third of the total amount
of any grants of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount

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of any grants of State funds to the municipality; and
(3) in fiscal year 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;
(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;

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(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.
(f) Beginning on the effective date of this amendatory Act
of the 97th General Assembly, the corporate authorities of a
participating municipality may, by a duly authorized
resolution or ordinance, elect to use a 30-year rolling
amortization period to calculate actuarial liabilities under
subsection (a) of this Section.
(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)
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

09700HB2289ham002 - 6 - LRB097 07874 JDS 54420 a
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) either (i) in the
case of a participating municipality that has elected a 30-year
rolling amortization period pursuant to subsection (h) of this
Section, an amount sufficient to bring the total assets of the
pension fund up to 90% of the total actuarial liabilities of
the pension fund within 30 years, 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, or (ii) in all other
cases, 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

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and including fiscal year 2040 and shall be determined under
the projected unit credit actuarial cost method. 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.
(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

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shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the county (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).
(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
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 2016, one-third of the total amount
of any grants of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount
of any grants of State funds to the municipality; and
(3) in fiscal year 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.

09700HB2289ham002 - 9 - LRB097 07874 JDS 54420 a
(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

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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.
(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.
(h) Beginning on the effective date of this amendatory Act
of the 97th General Assembly, the corporate authorities of a
participating municipality may, by a duly authorized
resolution or ordinance, elect to use a 30-year rolling

09700HB2289ham002 - 11 - LRB097 07874 JDS 54420 a
amortization period to calculate actuarial liabilities under
subsection (a) of this Section.
(Source: P.A. 96-1495, eff. 1-1-11.)".