Bill Text: IL HB3524 | 2019-2020 | 101st General Assembly | Introduced

---

Bill Title: Amends the General Assembly, State Employee, State Universities, Downstate Teacher, and Chicago Teacher Articles of the Illinois Pension Code. Requires active Tier 1 employees to elect either to (i) have automatic annual increases in retirement and survivor's annuities delayed and reduced or (ii) maintain their current benefit package with additional limitations on pensionable salary. Provides that a Tier 1 employee who elects item (i) is entitled to have future increases in income treated as pensionable income, have contributions reduced to a specified rate, and receive a consideration payment of 10% of contributions made prior to the election. Provides that a Tier 1 employee who elects item (ii) is not eligible to have future increases in income treated as pensionable income. Makes funding changes. Amends the State Pension Funds Continuing Appropriation Act to provide a continuing appropriation for the amounts of the consideration payments. Amends various Acts to make conforming changes. Amends the Illinois Educational Labor Relations Act and the Illinois Public Labor Relations Act to prohibit bargaining and interest arbitration regarding certain changes made by the amendatory Act and to provide that no action of the employer taken to implement that prohibition shall give rise to an unfair labor practice under those Acts; exempts certain existing agreements. Amends the State Mandates Act to require implementation without reimbursement. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3524 Detail]

Download: Illinois-2019-HB3524-Introduced.html

---

101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3524 Introduced , by Rep. Jim Durkin SYNOPSIS AS INTRODUCED:
See Index
Amends the General Assembly, State Employee, State Universities, Downstate Teacher, and Chicago Teacher Articles of the Illinois Pension Code. Requires active Tier 1 employees to elect either to (i) have automatic annual increases in retirement and survivor's annuities delayed and reduced or (ii) maintain their current benefit package with additional limitations on pensionable salary. Provides that a Tier 1 employee who elects item (i) is entitled to have future increases in income treated as pensionable income, have contributions reduced to a specified rate, and receive a consideration payment of 10% of contributions made prior to the election. Provides that a Tier 1 employee who elects item (ii) is not eligible to have future increases in income treated as pensionable income. Makes funding changes. Amends the State Pension Funds Continuing Appropriation Act to provide a continuing appropriation for the amounts of the consideration payments. Amends various Acts to make conforming changes. Amends the Illinois Educational Labor Relations Act and the Illinois Public Labor Relations Act to prohibit bargaining and interest arbitration regarding certain changes made by the amendatory Act and to provide that no action of the employer taken to implement that prohibition shall give rise to an unfair labor practice under those Acts; exempts certain existing agreements. Amends the State Mandates Act to require implementation without reimbursement. Makes other changes. Effective immediately.
LRB101 07948 RPS 53003 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
HB3524 LRB101 07948 RPS 53003 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 Public Labor Relations Act is
amended by changing Sections 10 and 15 and by adding Section
7.6 as follows:
(5 ILCS 315/7.6 new)
Sec. 7.6. No collective bargaining or interest arbitration
regarding certain changes to the Illinois Pension Code.
(a) Notwithstanding any other provision of this Act,
employers shall not be required to bargain over matters
affected by the changes, the impact of the changes, and the
implementation of the changes to Article 14, 15, 16, or 17 of
the Illinois Pension Code made by the addition of Section
14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
Pension Code, which are deemed to be prohibited subjects of
bargaining. Notwithstanding any provision of this Act, the
changes, impact of the changes, or implementation of the
changes to Article 14, 15, 16, or 17 of the Illinois Pension
Code made by the addition of Section 14-106.5, 15-132.9,
16-122.9, or 17-115.5 of the Illinois Pension Code shall not be
subject to interest arbitration or any award issued pursuant to
interest arbitration. The provisions of this Section shall not

HB3524 - 2 - LRB101 07948 RPS 53003 b
apply to an employment contract or collective bargaining
agreement that is in effect on the effective date of this
amendatory Act of the 101st General Assembly. However, any such
contract or agreement that is modified, amended, renewed, or
superseded after the effective date of this amendatory Act of
the 101st General Assembly shall be subject to the provisions
of this Section. Each employer with active employees
participating in a retirement system or pension fund
established under Article 14, 15, 16, or 17 of the Illinois
Pension Code shall comply with and be subject to the provisions
of this amendatory Act of the 101st General Assembly. The
provisions of this Section shall not apply to the ability of
any employer and employee representative to bargain
collectively with regard to the pick up of employee
contributions pursuant to Section 14-133.1, 15-157.1,
16-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.
(b) Subject to and except for the matters set forth in
subsection (a) of this Section that are deemed prohibited
subjects of bargaining, nothing in this Section shall be
construed as otherwise limiting any of the obligations and
requirements applicable to employers under any of the
provisions of this Act, including, but not limited to, the
requirement to bargain collectively with regard to policy
matters directly affecting wages, hours, and terms and
conditions of employment as well as the impact thereon upon
request by employee representatives. Subject to and except for

HB3524 - 3 - LRB101 07948 RPS 53003 b
the matters set forth in subsection (a) of this Section that
are deemed prohibited subjects of bargaining, nothing in this
Section shall be construed as otherwise limiting any of the
rights of employees or employee representatives under the
provisions of this Act.
(c) In case of any conflict between this Section and any
other provisions of this Act or any other law, the provisions
of this Section shall control.
(5 ILCS 315/10) (from Ch. 48, par. 1610)
Sec. 10. Unfair labor practices.
(a) It shall be an unfair labor practice for an employer or
its agents:
(1) to interfere with, restrain or coerce public
employees in the exercise of the rights guaranteed in this
Act or to dominate or interfere with the formation,
existence or administration of any labor organization or
contribute financial or other support to it; provided, an
employer shall not be prohibited from permitting employees
to confer with him during working hours without loss of
time or pay;
(2) to discriminate in regard to hire or tenure of
employment or any term or condition of employment in order
to encourage or discourage membership in or other support
for any labor organization. Nothing in this Act or any
other law precludes a public employer from making an

HB3524 - 4 - LRB101 07948 RPS 53003 b
agreement with a labor organization to require as a
condition of employment the payment of a fair share under
paragraph (e) of Section 6;
(3) to discharge or otherwise discriminate against a
public employee because he has signed or filed an
affidavit, petition or charge or provided any information
or testimony under this Act;
(4) subject to and except as provided in Section 7.6,
to refuse to bargain collectively in good faith with a
labor organization which is the exclusive representative
of public employees in an appropriate unit, including, but
not limited to, the discussing of grievances with the
exclusive representative; however, no actions of the
employer taken to implement or otherwise comply with the
provisions of subsection (a) of Section 7.6 shall
constitute or give rise to an unfair labor practice under
this Act;
(5) to violate any of the rules and regulations
established by the Board with jurisdiction over them
relating to the conduct of representation elections or the
conduct affecting the representation elections;
(6) to expend or cause the expenditure of public funds
to any external agent, individual, firm, agency,
partnership or association in any attempt to influence the
outcome of representational elections held pursuant to
Section 9 of this Act; provided, that nothing in this

HB3524 - 5 - LRB101 07948 RPS 53003 b
subsection shall be construed to limit an employer's right
to internally communicate with its employees as provided in
subsection (c) of this Section, to be represented on any
matter pertaining to unit determinations, unfair labor
practice charges or pre-election conferences in any formal
or informal proceeding before the Board, or to seek or
obtain advice from legal counsel. Nothing in this paragraph
shall be construed to prohibit an employer from expending
or causing the expenditure of public funds on, or seeking
or obtaining services or advice from, any organization,
group, or association established by and including public
or educational employers, whether covered by this Act, the
Illinois Educational Labor Relations Act or the public
employment labor relations law of any other state or the
federal government, provided that such services or advice
are generally available to the membership of the
organization, group or association, and are not offered
solely in an attempt to influence the outcome of a
particular representational election; or
(7) to refuse to reduce a collective bargaining
agreement to writing or to refuse to sign such agreement.
(b) It shall be an unfair labor practice for a labor
organization or its agents:
(1) to restrain or coerce public employees in the
exercise of the rights guaranteed in this Act, provided,
(i) that this paragraph shall not impair the right of a

HB3524 - 6 - LRB101 07948 RPS 53003 b
labor organization to prescribe its own rules with respect
to the acquisition or retention of membership therein or
the determination of fair share payments and (ii) that a
labor organization or its agents shall commit an unfair
labor practice under this paragraph in duty of fair
representation cases only by intentional misconduct in
representing employees under this Act;
(2) to restrain or coerce a public employer in the
selection of his representatives for the purposes of
collective bargaining or the settlement of grievances; or
(3) to cause, or attempt to cause, an employer to
discriminate against an employee in violation of
subsection (a)(2);
(4) to refuse to bargain collectively in good faith
with a public employer, if it has been designated in
accordance with the provisions of this Act as the exclusive
representative of public employees in an appropriate unit;
(5) to violate any of the rules and regulations
established by the boards with jurisdiction over them
relating to the conduct of representation elections or the
conduct affecting the representation elections;
(6) to discriminate against any employee because he has
signed or filed an affidavit, petition or charge or
provided any information or testimony under this Act;
(7) to picket or cause to be picketed, or threaten to
picket or cause to be picketed, any public employer where

HB3524 - 7 - LRB101 07948 RPS 53003 b
an object thereof is forcing or requiring an employer to
recognize or bargain with a labor organization of the
representative of its employees, or forcing or requiring
the employees of an employer to accept or select such labor
organization as their collective bargaining
representative, unless such labor organization is
currently certified as the representative of such
employees:
(A) where the employer has lawfully recognized in
accordance with this Act any labor organization and a
question concerning representation may not
appropriately be raised under Section 9 of this Act;
(B) where within the preceding 12 months a valid
election under Section 9 of this Act has been
conducted; or
(C) where such picketing has been conducted
without a petition under Section 9 being filed within a
reasonable period of time not to exceed 30 days from
the commencement of such picketing; provided that when
such a petition has been filed the Board shall
forthwith, without regard to the provisions of
subsection (a) of Section 9 or the absence of a showing
of a substantial interest on the part of the labor
organization, direct an election in such unit as the
Board finds to be appropriate and shall certify the
results thereof; provided further, that nothing in

HB3524 - 8 - LRB101 07948 RPS 53003 b
this subparagraph shall be construed to prohibit any
picketing or other publicity for the purpose of
truthfully advising the public that an employer does
not employ members of, or have a contract with, a labor
organization unless an effect of such picketing is to
induce any individual employed by any other person in
the course of his employment, not to pick up, deliver,
or transport any goods or not to perform any services;
or
(8) to refuse to reduce a collective bargaining
agreement to writing or to refuse to sign such agreement.
(c) The expressing of any views, argument, or opinion or
the dissemination thereof, whether in written, printed,
graphic, or visual form, shall not constitute or be evidence of
an unfair labor practice under any of the provisions of this
Act, if such expression contains no threat of reprisal or force
or promise of benefit.
(Source: P.A. 86-412; 87-736.)
(5 ILCS 315/15) (from Ch. 48, par. 1615)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 15. Act Takes Precedence.
(a) In case of any conflict between the provisions of this
Act and any other law (other than Section 5 of the State
Employees Group Insurance Act of 1971 and other than the

HB3524 - 9 - LRB101 07948 RPS 53003 b
changes made to the Illinois Pension Code by this amendatory
Act of the 96th General Assembly), executive order or
administrative regulation relating to wages, hours and
conditions of employment and employment relations, the
provisions of this Act or any collective bargaining agreement
negotiated thereunder shall prevail and control. Nothing in
this Act shall be construed to replace or diminish the rights
of employees established by Sections 28 and 28a of the
Metropolitan Transit Authority Act, Sections 2.15 through 2.19
of the Regional Transportation Authority Act. The provisions of
this Act are subject to Section 5 of the State Employees Group
Insurance Act of 1971. Nothing in this Act shall be construed
to replace the necessity of complaints against a sworn peace
officer, as defined in Section 2(a) of the Uniform Peace
Officer Disciplinary Act, from having a complaint supported by
a sworn affidavit.
(b) Except as provided in subsection (a) above, any
collective bargaining contract between a public employer and a
labor organization executed pursuant to this Act shall
supersede any contrary statutes, charters, ordinances, rules
or regulations relating to wages, hours and conditions of
employment and employment relations adopted by the public
employer or its agents. Any collective bargaining agreement
entered into prior to the effective date of this Act shall
remain in full force during its duration.
(c) It is the public policy of this State, pursuant to

HB3524 - 10 - LRB101 07948 RPS 53003 b
paragraphs (h) and (i) of Section 6 of Article VII of the
Illinois Constitution, that the provisions of this Act are the
exclusive exercise by the State of powers and functions which
might otherwise be exercised by home rule units. Such powers
and functions may not be exercised concurrently, either
directly or indirectly, by any unit of local government,
including any home rule unit, except as otherwise authorized by
this Act.
(d) Notwithstanding any other provision of law, no
collective bargaining agreement entered into, renewed, or
extended after the effective date of this amendatory Act of the
101st General Assembly or any arbitration award issued under
such collective bargaining agreement may violate or conflict
with the changes made by this amendatory Act of the 101st
General Assembly.
(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
Section 10. The Attorney General Act is amended by adding
Section 5 as follows:
(15 ILCS 205/5 new)
Sec. 5. Future increases in income. The Office of the
Attorney General must not pay, offer, or agree to pay any
future increase in income, as that term is defined in Section
14-103.43 of the Illinois Pension Code, to any person in a
manner that violates Section 14-106.5 of the Illinois Pension

HB3524 - 11 - LRB101 07948 RPS 53003 b
Code.
Section 15. The Secretary of State Merit Employment Code is
amended by adding Section 13a as follows:
(15 ILCS 310/13a new)
Sec. 13a. Future increases in income. The Office of the
Secretary of State must not pay, offer, or agree to pay any
future increase in income, as that term is defined in Section
14-103.43 of the Illinois Pension Code, to any person in a
manner that violates Section 14-106.5 of the Illinois Pension
Code.
Section 20. The Comptroller Merit Employment Code is
amended by adding Section 13a as follows:
(15 ILCS 410/13a new)
Sec. 13a. Future increases in income. The Office of the
Comptroller must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43 of the Illinois Pension Code, to any person in a
manner that violates Section 14-106.5 of the Illinois Pension
Code.
Section 25. The State Treasurer Employment Code is amended
by adding Section 12a as follows:

HB3524 - 12 - LRB101 07948 RPS 53003 b
(15 ILCS 510/12a new)
Sec. 12a. Future increases in income. The Office of the
State Treasurer must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43 of the Illinois Pension Code, to any person in a
manner that violates Section 14-106.5 of the Illinois Pension
Code.
Section 30. The Civil Administrative Code of Illinois is
amended by adding Section 5-647 as follows:
(20 ILCS 5/5-647 new)
Sec. 5-647. Future increases in income. A Department must
not pay, offer, or agree to pay any future increase in income,
as that term is defined in Section 14-103.43, 15-112.1, or
16-121.1 of the Illinois Pension Code, to any person in a
manner that violates Section 14-106.5, 15-132.9, or 16-122.9 of
the Illinois Pension Code.
Section 35. The Illinois Pension Code is amended by
changing Sections 2-108, 2-119.1, 2-124, 2-126, 2-134, 2-162,
14-103.10, 14-114, 14-131, 14-133, 14-135.08, 14-152.1,
15-108.1, 15-111, 15-136, 15-155, 15-157, 15-165, 15-198,
16-121, 16-133.1, 16-136.1, 16-152, 16-158, 16-203, 17-116,
17-129, and 17-130 and by adding 2-105.3, 2-107.9, 2-107.10,

HB3524 - 13 - LRB101 07948 RPS 53003 b
2-110.3, 14-103.42, 14-103.43, 14-103.44, 14-106.5, 15-112.1,
15-112.2, 15-132.9, 16-107.1, 16-121.1, 16-121.2, 16-122.9,
17-106.05, 17-113.4, 17-113.5, 17-113.6, 17-115.5, and
17-119.2 as follows:
(40 ILCS 5/2-105.3 new)
Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
participant who first became a participant before January 1,
2011.
(40 ILCS 5/2-107.9 new)
Sec. 2-107.9. Future increase in income. "Future increase
in income" means an increase to a Tier 1 employee's base pay
that is offered to the Tier 1 employee for service under this
Article after June 30, 2020 that qualifies as "salary", as
defined in Section 2-108, or would qualify as "salary" but for
the fact that it was offered to and accepted by the Tier 1
employee under the condition set forth in subsection (c) of
Section 2-110.3.
(40 ILCS 5/2-107.10 new)
Sec. 2-107.10. Base pay. As used in Section 2-107.9 of
this Code, "base pay" means the Tier 1 employee's annualized
rate of salary as of June 30, 2020. For a person returning to
active service as a Tier 1 employee after June 30, 2020,
however, "base pay" means the employee's annualized rate of

HB3524 - 14 - LRB101 07948 RPS 53003 b
salary as of the employee's last date of service prior to July
1, 2020. The System shall calculate the base pay of each Tier 1
employee pursuant to this Section.
(40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 2-108. Salary. "Salary":
(1) For members of the General Assembly, the total
compensation paid to the member by the State for one year of
service, including the additional amounts, if any, paid to the
member as an officer pursuant to Section 1 of "An Act in
relation to the compensation and emoluments of the members of
the General Assembly", approved December 6, 1907, as now or
hereafter amended.
(2) For the State executive officers specified in Section
2-105, the total compensation paid to the member for one year
of service.
(3) For members of the System who are participants under
Section 2-117.1, or who are serving as Clerk or Assistant Clerk
of the House of Representatives or Secretary or Assistant
Secretary of the Senate, the total compensation paid to the
member for one year of service, but not to exceed the salary of
the highest salaried officer of the General Assembly.
However, in the event that federal law results in any
participant receiving imputed income based on the value of

HB3524 - 15 - LRB101 07948 RPS 53003 b
group term life insurance provided by the State, such imputed
income shall not be included in salary for the purposes of this
Article.
Notwithstanding any other provision of this Section,
"salary" does not include any future increase in income that is
offered for service to a Tier 1 employee under this Article
pursuant to the condition set forth in subsection (c) of
Section 2-110.3 and accepted under that condition by a Tier 1
employee who has made the election under paragraph (2) of
subsection (a) of Section 2-110.3.
Notwithstanding any other provision of this Section,
"salary" does not include any consideration payment made to a
Tier 1 employee.
(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
(40 ILCS 5/2-110.3 new)
Sec. 2-110.3. Election by Tier 1 employees.
(a) Each active Tier 1 employee shall make an irrevocable
election either:
(1) to agree to delay his or her eligibility for
automatic annual increases in retirement annuity as
provided in subsection (a-1) of Section 2-119.1 and to have
the amount of the automatic annual increases in his or her
retirement annuity and survivor's annuity that are
otherwise provided for in this Article calculated,
instead, as provided in subsection (a-1) of Section

HB3524 - 16 - LRB101 07948 RPS 53003 b
2-119.1; or
(2) to not agree to paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each active Tier 1 employee no earlier than January 1,
2020 and no later than March 31, 2020, except that a person who
returns to active service as a Tier 1 employee under this
Article on or after January 1, 2020 and has not yet made an
election under this Section must make the election under this
subsection (a) within 60 days after returning to active service
as a Tier 1 employee.
If a Tier 1 employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) If this Section is enjoined or stayed by an Illinois
court or a court of competent jurisdiction pending the entry of
a final and unappealable decision, and this Section is
determined to be constitutional or otherwise valid by a final
unappealable decision of an Illinois court or a court of
competent jurisdiction, then the election procedure set forth
in subsection (a) of this Section shall commence on the 180th
calendar day after the date of the issuance of the final
unappealable decision and shall conclude at the end of the
270th calendar day after that date.
(a-10) All elections under subsection (a) that are made or
deemed to be made before July 1, 2020 shall take effect on July

HB3524 - 17 - LRB101 07948 RPS 53003 b
1, 2020. Elections that are made or deemed to be made on or
after July 1, 2020 shall take effect on the first day of the
month following the month in which the election is made or
deemed to be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
the State of Illinois shall be expressly and irrevocably
prohibited from offering any future increases in income to a
Tier 1 employee who has made an election under paragraph (1) of
subsection (a) of this Section on the condition of not
constituting salary under Section 2-108.
As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
each Tier 1 employee who has made an election under paragraph
(1) of subsection (a) of this Section shall receive a
consideration payment equal to 10% of the contributions made by
or on behalf of the employee under Section 2-126 before the
effective date of that election. The State Comptroller shall
pay the consideration payment to the Tier 1 employee out of
funds appropriated for that purpose under Section 1.10 of the
State Pension Funds Continuing Appropriation Act. The System
shall calculate the amount of each consideration payment and,
by July 1, 2020, shall certify to the State Comptroller the
amount of the consideration payment, together with the name,

HB3524 - 18 - LRB101 07948 RPS 53003 b
address, and any other available payment information of the
Tier 1 employee as found in the records of the System. The
System shall make additional calculations and certifications
of consideration payments to the State Comptroller as the
System deems necessary.
(c) A Tier 1 employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to paragraph (1) of subsection (a) of this Section.
However, each future increase in income offered for service as
a member under this Article to a Tier 1 employee who has made
the election under paragraph (2) of subsection (a) of this
Section shall be offered expressly and irrevocably on the
condition of not constituting salary under Section 2-108 and
that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to
that condition.
(d) The System shall make a good faith effort to contact
each Tier 1 employee subject to this Section. The System shall
mail information describing the required election to each Tier
1 employee by United States Postal Service mail to his or her
last known address on file with the System. If the Tier 1
employee is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details
in a regularly published newsletter or other existing public
forum.

HB3524 - 19 - LRB101 07948 RPS 53003 b
Tier 1 employees who are subject to this Section shall be
provided with an election packet containing information
regarding their options, as well as the forms necessary to make
the required election. Upon request, the System shall offer
Tier 1 employees an opportunity to receive information from the
System before making the required election. The information may
be provided through video materials, group presentations,
individual consultation with a member or authorized
representative of the System in person or by telephone or other
electronic means, or any combination of those methods. The
System shall not provide advice or counseling with respect to
which election a Tier 1 employee should make or specific to the
legal or tax circumstances of or consequences to the Tier 1
employee.
The System shall inform Tier 1 employees in the election
packet required under this subsection that the Tier 1 employee
may also wish to obtain information and counsel relating to the
election required under this Section from any other available
source, including, but not limited to, labor organizations and
private counsel.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member regarding the
elections under this Section. The System shall coordinate with
the Illinois Department of Central Management Services and each
other retirement system administering an election in
accordance with this amendatory Act of the 101st General

HB3524 - 20 - LRB101 07948 RPS 53003 b
Assembly to provide information concerning the impact of the
election set forth in this Section.
(e) Notwithstanding any other provision of law, each future
increase in income offered by the State of Illinois for service
as a member must be offered expressly and irrevocably on the
condition of not constituting "salary" under Section 2-108 to
any Tier 1 employee who has made an election under paragraph
(2) of subsection (a) of this Section. The offer shall also
provide that the Tier 1 employee's acceptance of the offered
future increase in income shall constitute his or her agreement
to the condition set forth in this subsection.
For purposes of legislative intent, the condition set forth
in this subsection shall be construed in a manner that ensures
that the condition is not violated or circumvented through any
contrivance of any kind.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.
(g) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986. The
provisions of this Section shall be subject to and implemented
in a manner that complies with Section 11 of Article IV of the
Illinois Constitution.
(h) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that

HB3524 - 21 - LRB101 07948 RPS 53003 b
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 2-119.1. Automatic increase in retirement annuity.
(a) Except as provided in subsection (a-1), a A participant
who retires after June 30, 1967, and who has not received an
initial increase under this Section before the effective date
of this amendatory Act of 1991, shall, in January or July next
following the first anniversary of retirement, whichever
occurs first, and in the same month of each year thereafter,
but in no event prior to age 60, have the amount of the
originally granted retirement annuity increased as follows:
for each year through 1971, 1 1/2%; for each year from 1972
through 1979, 2%; and for 1980 and each year thereafter, 3%.
Annuitants who have received an initial increase under this
subsection prior to the effective date of this amendatory Act
of 1991 shall continue to receive their annual increases in the
same month as the initial increase.
(a-1) Notwithstanding any other provision of this Article,

HB3524 - 22 - LRB101 07948 RPS 53003 b
for a Tier 1 employee who made the election under paragraph (1)
of subsection (a) of Section 2-110.3:
(1) The initial increase in retirement annuity under
this Section shall occur on the January 1 occurring either
on or after the attainment of age 67 or the fifth
anniversary of the annuity start date, whichever is
earlier.
(2) The amount of each automatic annual increase in
retirement annuity or survivor's annuity occurring on or
after the effective date of that election shall be
calculated as a percentage of the originally granted
retirement annuity or survivor's annuity, equal to 3% or
one-half the annual unadjusted percentage increase (but
not less than zero) in the consumer price index-u for the
12 months ending with the September preceding each November
1, whichever is less. If the annual unadjusted percentage
change in the consumer price index-u for the 12 months
ending with the September preceding each November 1 is zero
or there is a decrease, then the annuity shall not be
increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall

HB3524 - 23 - LRB101 07948 RPS 53003 b
be determined by the Public Pension Division of the Department
of Insurance and made available to the board of the retirement
system by November 1 of each year.
(b) Beginning January 1, 1990, for eligible participants
who remain in service after attaining 20 years of creditable
service, the 3% increases provided under subsection (a) shall
begin to accrue on the January 1 next following the date upon
which the participant (1) attains age 55, or (2) attains 20
years of creditable service, whichever occurs later, and shall
continue to accrue while the participant remains in service;
such increases shall become payable on January 1 or July 1,
whichever occurs first, next following the first anniversary of
retirement. For any person who has service credit in the System
for the entire period from January 15, 1969 through December
31, 1992, regardless of the date of termination of service, the
reference to age 55 in clause (1) of this subsection (b) shall
be deemed to mean age 50.
This subsection (b) does not apply to any person who first
becomes a member of the System after August 8, 2003 (the
effective date of Public Act 93-494) this amendatory Act of the
93rd General Assembly.
(b-5) Notwithstanding any other provision of this Article,
a participant who first becomes a participant on or after
January 1, 2011 (the effective date of Public Act 96-889)
shall, in January or July next following the first anniversary
of retirement, whichever occurs first, and in the same month of

HB3524 - 24 - LRB101 07948 RPS 53003 b
each year thereafter, but in no event prior to age 67, have the
amount of the retirement annuity then being paid increased by
3% or the annual unadjusted percentage increase in the Consumer
Price Index for All Urban Consumers as determined by the Public
Pension Division of the Department of Insurance under
subsection (a) of Section 2-108.1, whichever is less.
(c) The foregoing provisions relating to automatic
increases are not applicable to a participant who retires
before having made contributions (at the rate prescribed in
Section 2-126) for automatic increases for less than the
equivalent of one full year. However, in order to be eligible
for the automatic increases, such a participant may make
arrangements to pay to the system the amount required to bring
the total contributions for the automatic increase to the
equivalent of one year's contributions based upon his or her
last salary.
(d) A participant who terminated service prior to July 1,
1967, with at least 14 years of service is entitled to an
increase in retirement annuity beginning January, 1976, and to
additional increases in January of each year thereafter.
The initial increase shall be 1 1/2% of the originally
granted retirement annuity multiplied by the number of full
years that the annuitant was in receipt of such annuity prior
to January 1, 1972, plus 2% of the originally granted
retirement annuity for each year after that date. The
subsequent annual increases shall be at the rate of 2% of the

HB3524 - 25 - LRB101 07948 RPS 53003 b
originally granted retirement annuity for each year through
1979 and at the rate of 3% for 1980 and thereafter.
(e) Beginning January 1, 1990, and except as provided in
subsection (a-1), 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 previous
increases granted under this Article.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
Sec. 2-124. Contributions by State.
(a) The State shall make contributions to the System by
appropriations of amounts which, together with the
contributions of participants, interest earned on investments,
and other income will meet the cost of maintaining and
administering the System on a 90% funded basis in accordance
with actuarial recommendations.
(b) 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 prescribed rate of interest, using the formula in
subsection (c).
(c) For State fiscal years 2012 through 2045 (except as
otherwise provided for fiscal year 2021), 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

HB3524 - 26 - LRB101 07948 RPS 53003 b
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 year 2021:
(1) The initial calculation and certification shall be
based on the amount determined above.
(2) For purposes of the recertification due on or
before May 1, 2020, the recalculation of the required State
contribution for fiscal year 2021 shall take into account
the effect on the System's liabilities of the elections
made under Section 2-110.3.
(3) For purposes of the recertification due on or
before October 1, 2020, the total required State
contribution for fiscal year 2021 shall be reduced by the
amount of the consideration payments made to Tier 1
employees who made the election under paragraph (1) of
subsection (a) of Section 2-110.3.
If Section 2-110.3 is determined to be unconstitutional or
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction, then the
changes made to this Section by this amendatory Act of the
101st General Assembly shall not take effect and are repealed

HB3524 - 27 - LRB101 07948 RPS 53003 b
by operation of law.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it at
the resulting annual rate in each of the remaining fiscal
years in that 5-year period.
For State fiscal years 1996 through 2005, 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.
Notwithstanding any other provision of this Article, the

HB3524 - 28 - LRB101 07948 RPS 53003 b
total required State contribution for State fiscal year 2006 is
$4,157,000.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$5,220,300.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$10,454,000 and shall be made from the proceeds of bonds sold
in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the General Revenue
Fund in fiscal year 2010, and (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 2-134 and shall be made from the proceeds
of bonds sold in fiscal year 2011 pursuant to Section 7.2 of

HB3524 - 29 - LRB101 07948 RPS 53003 b
the General Obligation Bond Act, less (i) the pro rata share of
bond sale expenses determined by the System's share of total
bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2011, and (iii) any reduction in
bond proceeds due to the issuance of discounted bonds, if
applicable.
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.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 2-134, shall not

HB3524 - 30 - LRB101 07948 RPS 53003 b
exceed an amount equal to (i) the amount of the required State
contribution that would have been calculated under this Section
for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(d) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's

HB3524 - 31 - LRB101 07948 RPS 53003 b
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, 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.
(e) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 100-23, eff. 7-6-17.)
(40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 2-126. Contributions by participants.
(a) Each participant shall contribute toward the cost of
his or her retirement annuity a percentage of each payment of
salary received by him or her for service as a member as
follows: for service between October 31, 1947 and January 1,
1959, 5%; for service between January 1, 1959 and June 30,
1969, 6%; for service between July 1, 1969 and January 10,
1973, 6 1/2%; for service after January 10, 1973, 7%; for
service after December 31, 1981, 8 1/2%.
(b) Beginning August 2, 1949, each male participant, and
from July 1, 1971, each female participant shall contribute

HB3524 - 32 - LRB101 07948 RPS 53003 b
towards the cost of the survivor's annuity 2% of salary.
A participant who has no eligible survivor's annuity
beneficiary may elect to cease making contributions for
survivor's annuity under this subsection. A survivor's annuity
shall not be payable upon the death of a person who has made
this election, unless prior to that death the election has been
revoked and the amount of the contributions that would have
been paid under this subsection in the absence of the election
is paid to the System, together with interest at the rate of 4%
per year from the date the contributions would have been made
to the date of payment.
(c) Beginning July 1, 1967, each participant shall
contribute 1% of salary towards the cost of automatic increase
in annuity provided in Section 2-119.1. These contributions
shall be made concurrently with contributions for retirement
annuity purposes.
(d) In addition, each participant serving as an officer of
the General Assembly shall contribute, for the same purposes
and at the same rates as are required of a regular participant,
on each additional payment received as an officer. If the
participant serves as an officer for at least 2 but less than 4
years, he or she shall contribute an amount equal to the amount
that would have been contributed had the participant served as
an officer for 4 years. Persons who serve as officers in the
87th General Assembly but cannot receive the additional payment
to officers because of the ban on increases in salary during

HB3524 - 33 - LRB101 07948 RPS 53003 b
their terms may nonetheless make contributions based on those
additional payments for the purpose of having the additional
payments included in their highest salary for annuity purposes;
however, persons electing to make these additional
contributions must also pay an amount representing the
corresponding employer contributions, as calculated by the
System.
(e) Notwithstanding any other provision of this Article,
the required contribution of a participant who first becomes a
participant on or after January 1, 2011 shall not exceed the
contribution that would be due under this Article if that
participant's highest salary for annuity purposes were
$106,800, plus any increases in that amount under Section
2-108.1.
(f) Beginning July 1, 2020 or the effective date of the
Tier 1 employee's election under paragraph (1) of subsection
(a) of Section 2-110.3, whichever is later, in lieu of the
contributions otherwise required under this Section, each Tier
1 employee who made the election under paragraph (1) of
subsection (a) of Section 2-110.3 shall contribute 8.5% of each
payment of salary toward the cost of his or her retirement
annuity and 1.85% of each payment of salary toward the cost of
the survivor's annuity.
(g) Notwithstanding subsection (f) of this Section,
beginning July 1, 2020 or the effective date of the Tier 1
employee's election under paragraph (1) of subsection (a) of

HB3524 - 34 - LRB101 07948 RPS 53003 b
Section 2-110.3, whichever is later, in lieu of the
contributions otherwise required under this Section, each Tier
1 employee who made the election under paragraph (1) of
subsection (a) of Section 2-110.3 and has elected to cease
making contributions for survivor's annuity under subsection
(b) of this Section, shall contribute 8.55% of each payment of
salary toward the cost of his or her retirement annuity.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
Sec. 2-134. To certify required State contributions and
submit vouchers.
(a) The Board shall certify to the Governor on or before
December 15 of each year until December 15, 2011 the amount of
the required State contribution to the System for the next
fiscal year and shall specifically identify the System's
projected State normal cost for that fiscal year. The
certification shall include a copy of the actuarial
recommendations upon which it is based and shall specifically
identify the System's projected State normal cost for that
fiscal year.
On or before November 1 of each year, beginning November 1,
2012, the Board shall submit to the State Actuary, the
Governor, and the General Assembly a proposed certification of
the amount of the required State contribution to the System for
the next fiscal year, along with all of the actuarial

HB3524 - 35 - LRB101 07948 RPS 53003 b
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions. On or before
January 15, 2013 and every January 15 thereafter, the Board
shall certify to the Governor and the General Assembly the
amount of the required State contribution for the next fiscal
year. The Board's certification must note any deviations from
the State Actuary's recommended changes, the reason or reasons
for not following the State Actuary's recommended changes, and
the fiscal impact of not following the State Actuary's
recommended changes on the required State contribution.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.

HB3524 - 36 - LRB101 07948 RPS 53003 b
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
By November 1, 2017, the Board shall recalculate and
recertify to the State Actuary, the Governor, and the General
Assembly the amount of the State contribution to the System for
State fiscal year 2018, taking into account the changes in
required State contributions made by this amendatory Act of the
100th General Assembly. The State Actuary shall review the
assumptions and valuations underlying the Board's revised
certification and issue a preliminary report concerning the
proposed recertification and identifying, if necessary,
recommended changes in actuarial assumptions that the Board
must consider before finalizing its certification of the
required State contributions. The Board's final certification
must note any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
On or before May 1, 2020, the Board shall recalculate and
recertify to the Governor and the General Assembly the amount
of the required State contribution to the System for State

HB3524 - 37 - LRB101 07948 RPS 53003 b
fiscal year 2021, taking into account the effect on the
System's liabilities of the elections made under Section
2-110.3.
On or before October 1, 2020, the Board shall recalculate
and recertify to the Governor and the General Assembly the
amount of the required State contribution to the System for
State fiscal year 2021, taking into account the reduction
specified under item (3) of subsection (c) of Section 2-124.
(b) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month the Board shall
submit vouchers for payment of State contributions to the
System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a). From the effective date of this amendatory Act of the 93rd
General Assembly through June 30, 2004, the Board shall not
submit vouchers for the remainder of fiscal year 2004 in excess
of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (d) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year. If in
any month the amount remaining unexpended from all other
appropriations to the System for the applicable fiscal year
(including the appropriations to the System under Section 8.12
of the State Finance Act and Section 1 of the State Pension

HB3524 - 38 - LRB101 07948 RPS 53003 b
Funds Continuing Appropriation Act) is less than the amount
lawfully vouchered under this Section, the difference shall be
paid from the General Revenue Fund under the continuing
appropriation authority provided in Section 1.1 of the State
Pension Funds Continuing Appropriation Act.
(c) The full amount of any annual appropriation for the
System for State fiscal year 1995 shall be transferred and made
available to the System at the beginning of that fiscal year at
the request of the Board. Any excess funds remaining at the end
of any fiscal year from appropriations shall be retained by the
System as a general reserve to meet the System's accrued
liabilities.
(Source: P.A. 100-23, eff. 7-6-17.)
(40 ILCS 5/2-162)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 2-162. Application and expiration of new benefit
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 the effective date of this
amendatory Act of the 94th General Assembly. "New benefit
increase", however, does not include any benefit increase

HB3524 - 39 - LRB101 07948 RPS 53003 b
resulting from the changes made to this Article by this
amendatory Act of the 101st 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
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Insurance Financial and Professional Regulation.
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

HB3524 - 40 - LRB101 07948 RPS 53003 b
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
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
(40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 14-103.10. Compensation.
(a) For periods of service prior to January 1, 1978, the
full rate of salary or wages payable to an employee for
personal services performed if he worked the full normal

HB3524 - 41 - LRB101 07948 RPS 53003 b
working period for his position, subject to the following
maximum amounts: (1) prior to July 1, 1951, $400 per month or
$4,800 per year; (2) between July 1, 1951 and June 30, 1957
inclusive, $625 per month or $7,500 per year; (3) beginning
July 1, 1957, no limitation.
In the case of service of an employee in a position
involving part-time employment, compensation shall be
determined according to the employees' earnings record.
(b) For periods of service on and after January 1, 1978,
all remuneration for personal services performed defined as
"wages" under the Social Security Enabling Act, including that
part of such remuneration which is in excess of any maximum
limitation provided in such Act, and including any benefits
received by an employee under a sick pay plan in effect before
January 1, 1981, but excluding lump sum salary payments:
(1) for vacation,
(2) for accumulated unused sick leave,
(3) upon discharge or dismissal,
(4) for approved holidays.
(c) For periods of service on or after December 16, 1978,
compensation also includes any benefits, other than lump sum
salary payments made at termination of employment, which an
employee receives or is eligible to receive under a sick pay
plan authorized by law.
(d) For periods of service after September 30, 1985,
compensation also includes any remuneration for personal

HB3524 - 42 - LRB101 07948 RPS 53003 b
services not included as "wages" under the Social Security
Enabling Act, which is deducted for purposes of participation
in a program established pursuant to Section 125 of the
Internal Revenue Code or its successor laws.
(e) For members for which Section 1-160 applies for periods
of service on and after January 1, 2011, all remuneration for
personal services performed defined as "wages" under the Social
Security Enabling Act, excluding remuneration that is in excess
of the annual earnings, salary, or wages of a member or
participant, as provided in subsection (b-5) of Section 1-160,
but including any benefits received by an employee under a sick
pay plan in effect before January 1, 1981. Compensation shall
exclude lump sum salary payments:
(1) for vacation;
(2) for accumulated unused sick leave;
(3) upon discharge or dismissal; and
(4) for approved holidays.
(f) Notwithstanding the other provisions of this Section,
for service on or after July 1, 2013, "compensation" does not
include any stipend payable to an employee for service on a
board or commission.
(g) Notwithstanding any other provision of this Section,
"compensation" does not include any future increase in income
that is offered for service by a department to a Tier 1
employee under this Article pursuant to the condition set forth
in subsection (c) of Section 14-106.5 and accepted under that

HB3524 - 43 - LRB101 07948 RPS 53003 b
condition by a Tier 1 employee who has made the election under
paragraph (2) of subsection (a) of Section 14-106.5.
(h) Notwithstanding any other provision of this Section,
"compensation" does not include any consideration payment made
to a Tier 1 employee.
(Source: P.A. 98-449, eff. 8-16-13.)
(40 ILCS 5/14-103.42 new)
Sec. 14-103.42. Tier 1 employee. "Tier 1 employee": An
employee under this Article who first became a member or
participant before January 1, 2011 under any reciprocal
retirement system or pension fund established under this Code
other than a retirement system or pension fund established
under Article 2, 3, 4, 5, 6, or 18 of this Code.
(40 ILCS 5/14-103.43 new)
Sec. 14-103.43. Future increase in income. "Future
increase in income" means an increase to a Tier 1 employee's
base pay that is offered by a department to the Tier 1 employee
for service under this Article after June 30, 2021 that
qualifies as "compensation", as defined in Section 14-103.10,
or would qualify as "compensation" but for the fact that it was
offered to and accepted by the Tier 1 employee under the
condition set forth in subsection (c) of Section 14-106.5. The
term "future increase in income" includes an increase to a Tier
1 employee's base pay that is paid to the Tier 1 employee

HB3524 - 44 - LRB101 07948 RPS 53003 b
pursuant to an extension, amendment, or renewal of any
employment contract or collective bargaining agreement after
the effective date of this Section.
(40 ILCS 5/14-103.44 new)
Sec. 14-103.44. Base pay. As used in Section 14-103.43 of
this Code, "base pay" means the greater of either (i) the Tier
1 employee's annualized rate of compensation as of June 30,
2021, or (ii) the Tier 1 employee's annualized rate of
compensation immediately preceding the expiration, renewal, or
amendment of an employment contract or collective bargaining
agreement in effect on the effective date of this Section. For
a person returning to active service as a Tier 1 employee after
June 30, 2021, however, "base pay" means the employee's
annualized rate of compensation as of the employee's last date
of service prior to July 1, 2021. The System shall calculate
the base pay of each Tier 1 employee pursuant to this Section.
(40 ILCS 5/14-106.5 new)
Sec. 14-106.5. Election by Tier 1 employees.
(a) Each active Tier 1 employee shall make an irrevocable
election either:
(1) to agree to delay his or her eligibility for
automatic annual increases in retirement annuity as
provided in subsection (a-1) of Section 14-114 and to have
the amount of the automatic annual increases in his or her

HB3524 - 45 - LRB101 07948 RPS 53003 b
retirement annuity and survivors or widow's annuity that
are otherwise provided for in this Article calculated,
instead, as provided in subsection (a-1) of Section 14-114;
or
(2) to not agree to paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each active Tier 1 employee no earlier than January 1,
2021 and no later than March 31, 2021, except that:
(i) a person who becomes a Tier 1 employee under this
Article on or after January 1, 2021 must make the election
under this subsection (a) within 60 days after becoming a
Tier 1 employee; and
(ii) a person who returns to active service as a Tier 1
employee under this Article on or after January 1, 2021 and
has not yet made an election under this Section must make
the election under this subsection (a) within 60 days after
returning to active service as a Tier 1 employee.
If a Tier 1 employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) If this Section is enjoined or stayed by an Illinois
court or a court of competent jurisdiction pending the entry of
a final and unappealable decision, and this Section is
determined to be constitutional or otherwise valid by a final
unappealable decision of an Illinois court or a court of

HB3524 - 46 - LRB101 07948 RPS 53003 b
competent jurisdiction, then the election procedure set forth
in subsection (a) of this Section shall commence on the 180th
calendar day after the date of the issuance of the final
unappealable decision and shall conclude at the end of the
270th calendar day after that date.
(a-10) All elections under subsection (a) that are made or
deemed to be made before July 1, 2021 shall take effect on July
1, 2021. Elections that are made or deemed to be made on or
after July 1, 2021 shall take effect on the first day of the
month following the month in which the election is made or
deemed to be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
the department shall be expressly and irrevocably prohibited
from offering any future increases in income to a Tier 1
employee who has made an election under paragraph (1) of
subsection (a) of this Section on the condition of not
constituting compensation under Section 14-103.10.
As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
each Tier 1 employee who has made an election under paragraph
(1) of subsection (a) of this Section shall receive a
consideration payment equal to 10% of the contributions made by
or on behalf of the employee before the effective date of that

HB3524 - 47 - LRB101 07948 RPS 53003 b
election. The State Comptroller shall pay the consideration
payment to the Tier 1 employee out of funds appropriated for
that purpose under Section 1.10 of the State Pension Funds
Continuing Appropriation Act. The System shall calculate the
amount of each consideration payment and, by July 1, 2021,
shall certify to the State Comptroller the amount of the
consideration payment, together with the name, address, and any
other available payment information of the Tier 1 employee as
found in the records of the System. The System shall make
additional calculations and certifications of consideration
payments to the State Comptroller as it deems necessary.
(c) A Tier 1 employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to paragraph (1) of subsection (a) of this Section.
However, each future increase in income offered by a department
under this Article to a Tier 1 employee who has made the
election under paragraph (2) of subsection (a) of this Section
shall be offered by the department expressly and irrevocably on
the condition of not constituting compensation under Section
14-103.10 and that the Tier 1 employee's acceptance of the
offered future increase in income shall constitute his or her
agreement to that condition.
(d) The System shall make a good faith effort to contact
each Tier 1 employee subject to this Section. The System shall
mail information describing the required election to each Tier
1 employee by United States Postal Service mail to his or her

HB3524 - 48 - LRB101 07948 RPS 53003 b
last known address on file with the System. If the Tier 1
employee is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details
in a regularly published newsletter or other existing public
forum.
Tier 1 employees who are subject to this Section shall be
provided with an election packet containing information
regarding their options, as well as the forms necessary to make
the required election. Upon request, the System shall offer
Tier 1 employees an opportunity to receive information from the
System before making the required election. The information may
consist of video materials, group presentations, individual
consultation with a member or authorized representative of the
System in person or by telephone or other electronic means, or
any combination of those methods. The System shall not provide
advice or counseling with respect to which election a Tier 1
employee should make or specific to the legal or tax
circumstances of or consequences to the Tier 1 employee.
The System shall inform Tier 1 employees in the election
packet required under this subsection that the Tier 1 employee
may also wish to obtain information and counsel relating to the
election required under this Section from any other available
source, including, but not limited to, labor organizations and
private counsel.
In no event shall the System, its staff, or the Board be

HB3524 - 49 - LRB101 07948 RPS 53003 b
held liable for any information given to a member regarding the
elections under this Section. The System shall coordinate with
the Illinois Department of Central Management Services and each
other retirement system administering an election in
accordance with this amendatory Act of the 101st General
Assembly to provide information concerning the impact of the
election set forth in this Section.
(e) Notwithstanding any other provision of law, a
department under this Article is required to offer each future
increase in income expressly and irrevocably on the condition
of not constituting "compensation" under Section 14-103.10 to
any Tier 1 employee who has made an election under paragraph
(2) of subsection (a) of this Section. The offer shall also
provide that the Tier 1 employee's acceptance of the offered
future increase in income shall constitute his or her agreement
to the condition set forth in this subsection.
For purposes of legislative intent, the condition set forth
in this subsection shall be construed in a manner that ensures
that the condition is not violated or circumvented through any
contrivance of any kind.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.
(g) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986. The

HB3524 - 50 - LRB101 07948 RPS 53003 b
provisions of this Section shall be subject to and implemented
in a manner that complies with Section 21 of Article V of the
Illinois Constitution.
(h) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 14-114. Automatic increase in retirement annuity.
(a) Subject to the provisions of subsections (a-1), any Any
person receiving a retirement annuity under this Article who
retires having attained age 60, or who retires before age 60
having at least 35 years of creditable service, or who retires
on or after January 1, 2001 at an age which, when added to the
number of years of his or her creditable service, equals at
least 85, shall, on January 1 next following the first full
year of retirement, have the amount of the then fixed and
payable monthly retirement annuity increased 3%. Any person
receiving a retirement annuity under this Article who retires

HB3524 - 51 - LRB101 07948 RPS 53003 b
before attainment of age 60 and with less than (i) 35 years of
creditable service if retirement is before January 1, 2001, or
(ii) the number of years of creditable service which, when
added to the member's age, would equal 85, if retirement is on
or after January 1, 2001, shall have the amount of the fixed
and payable retirement annuity increased by 3% on the January 1
occurring on or next following (1) attainment of age 60, or (2)
the first anniversary of retirement, whichever occurs later.
However, for persons who receive the alternative retirement
annuity under Section 14-110, references in this subsection (a)
to attainment of age 60 shall be deemed to refer to attainment
of age 55. For a person receiving early retirement incentives
under Section 14-108.3 whose retirement annuity began after
January 1, 1992 pursuant to an extension granted under
subsection (e) of that Section, the first anniversary of
retirement shall be deemed to be January 1, 1993. For a person
who retires on or after June 28, 2001 and on or before October
1, 2001, and whose retirement annuity is calculated, in whole
or in part, under Section 14-110 or subsection (g) or (h) of
Section 14-108, the first anniversary of retirement shall be
deemed to be January 1, 2002.
On each January 1 following the date of the initial
increase under this subsection, the employee's monthly
retirement annuity shall be increased by an additional 3%.
Beginning January 1, 1990, and except as provided in
subsection (a-1), all automatic annual increases payable under

HB3524 - 52 - LRB101 07948 RPS 53003 b
this Section shall be calculated as a percentage of the total
annuity payable at the time of the increase, including previous
increases granted under this Article.
(a-1) Notwithstanding any other provision of this Article,
for a Tier 1 employee who made the election under paragraph (1)
of subsection (a) of Section 14-106.5:
(1) The initial increase in retirement annuity under
this Section shall occur on the January 1 occurring either
on or after the attainment of age 67 or the fifth
anniversary of the annuity start date, whichever is
earlier.
(2) The amount of each automatic annual increase in
retirement annuity or survivors or widow's annuity
occurring on or after the effective date of that election
shall be calculated as a percentage of the originally
granted retirement annuity or survivors or widow's
annuity, equal to 3% or one-half the annual unadjusted
percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less. If
the annual unadjusted percentage change in the consumer
price index-u for the 12 months ending with the September
preceding each November 1 is zero or there is a decrease,
then the annuity shall not be increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of

HB3524 - 53 - LRB101 07948 RPS 53003 b
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the board of the retirement
system by November 1 of each year.
(b) The provisions of subsection (a) of this Section shall
be applicable to an employee only if the employee makes the
additional contributions required after December 31, 1969 for
the purpose of the automatic increases for not less than the
equivalent of one full year. If an employee becomes an
annuitant before his additional contributions equal one full
year's contributions based on his salary at the date of
retirement, the employee may pay the necessary balance of the
contributions to the system, without interest, and be eligible
for the increasing annuity authorized by this Section.
(c) The provisions of subsection (a) of this Section shall
not be applicable to any annuitant who is on retirement on
December 31, 1969, and thereafter returns to State service,
unless the member has established at least one year of
additional creditable service following reentry into service.
(d) In addition to other increases which may be provided by
this Section, on January 1, 1981 any annuitant who was
receiving a retirement annuity on or before January 1, 1971
shall have his retirement annuity then being paid increased $1

HB3524 - 54 - LRB101 07948 RPS 53003 b
per month for each year of creditable service. On January 1,
1982, any annuitant who began receiving a retirement annuity on
or before January 1, 1977, shall have his retirement annuity
then being paid increased $1 per month for each year of
creditable service.
On January 1, 1987, any annuitant who began receiving a
retirement annuity 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.
(e) Every person who receives the alternative retirement
annuity under Section 14-110 and who is eligible to receive the
3% increase under subsection (a) on January 1, 1986, shall also
receive on that date a one-time increase in retirement annuity
equal to the difference between (1) his actual retirement
annuity on that date, including any increases received under
subsection (a), and (2) the amount of retirement annuity he
would have received on that date if the amendments to
subsection (a) made by Public Act 84-162 had been in effect
since the date of his retirement.
(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
92-651, eff. 7-11-02.)
(40 ILCS 5/14-131)
Sec. 14-131. Contributions by State.
(a) The State shall make contributions to the System by

HB3524 - 55 - LRB101 07948 RPS 53003 b
appropriations of amounts which, together with other employer
contributions from trust, federal, and other funds, employee
contributions, investment income, and other income, will be
sufficient to meet the cost of maintaining and administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
For the purposes of this Section and Section 14-135.08,
references to State contributions refer only to employer
contributions and do not include employee contributions that
are picked up or otherwise paid by the State or a department on
behalf of the employee.
(b) The Board shall determine the total amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board,
using the formula in subsection (e).
The Board shall also determine a State contribution rate
for each fiscal year, expressed as a percentage of payroll,
based on the total required State contribution for that fiscal
year (less the amount received by the System from
appropriations under Section 8.12 of the State Finance Act and
Section 1 of the State Pension Funds Continuing Appropriation
Act, if any, for the fiscal year ending on the June 30
immediately preceding the applicable November 15 certification
deadline), the estimated payroll (including all forms of
compensation) for personal services rendered by eligible
employees, and the recommendations of the actuary.

HB3524 - 56 - LRB101 07948 RPS 53003 b
For the purposes of this Section and Section 14.1 of the
State Finance Act, the term "eligible employees" includes
employees who participate in the System, persons who may elect
to participate in the System but have not so elected, persons
who are serving a qualifying period that is required for
participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
(c) Contributions shall be made by the several departments
for each pay period by warrants drawn by the State Comptroller
against their respective funds or appropriations based upon
vouchers stating the amount to be so contributed. These amounts
shall be based on the full rate certified by the Board under
Section 14-135.08 for that fiscal year. From March 5, 2004 (the
effective date of Public Act 93-665) through the payment of the
final payroll from fiscal year 2004 appropriations, the several
departments shall not make contributions for the remainder of
fiscal year 2004 but shall instead make payments as required
under subsection (a-1) of Section 14.1 of the State Finance
Act. The several departments shall resume those contributions
at the commencement of fiscal year 2005.
(c-1) Notwithstanding subsection (c) of this Section, for
fiscal years 2010, 2012, 2013, 2014, 2015, 2016, 2017, 2018,
and 2019 only, contributions by the several departments are not
required to be made for General Revenue Funds payrolls
processed by the Comptroller. Payrolls paid by the several
departments from all other State funds must continue to be

HB3524 - 57 - LRB101 07948 RPS 53003 b
processed pursuant to subsection (c) of this Section.
(c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,
2016, 2017, 2018, and 2019 only, on or as soon as possible
after the 15th day of each month, the Board shall submit
vouchers for payment of State contributions to the System, in a
total monthly amount of one-twelfth of the fiscal year General
Revenue Fund contribution as certified by the System pursuant
to Section 14-135.08 of the Illinois Pension Code.
(d) If an employee is paid from trust funds or federal
funds, the department or other employer shall pay employer
contributions from those funds to the System at the certified
rate, unless the terms of the trust or the federal-State
agreement preclude the use of the funds for that purpose, in
which case the required employer contributions shall be paid by
the State. From March 5, 2004 (the effective date of Public Act
93-665) through the payment of the final payroll from fiscal
year 2004 appropriations, the department or other employer
shall not pay contributions for the remainder of fiscal year
2004 but shall instead make payments as required under
subsection (a-1) of Section 14.1 of the State Finance Act. The
department or other employer shall resume payment of
contributions at the commencement of fiscal year 2005.
(e) For State fiscal years 2012 through 2045 (except as
otherwise provided for fiscal year 2022), 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

HB3524 - 58 - LRB101 07948 RPS 53003 b
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 year 2022:
(1) The initial calculation and certification shall be
based on the amount determined above.
(2) For purposes of the recertification due on or
before May 1, 2021, the recalculation of the required State
contribution for fiscal year 2022 shall take into account
the effect on the System's liabilities of the elections
made under Section 14-106.5.
(3) For purposes of the recertification due on or
before October 1, 2021, the total required State
contribution for fiscal year 2022 shall be reduced by the
amount of the consideration payments made to Tier 1
employees who made the election under paragraph (1) of
subsection (a) of Section 14-106.5.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial

HB3524 - 59 - LRB101 07948 RPS 53003 b
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it at
the resulting annual rate in each of the remaining fiscal
years in that 5-year period.
For State fiscal years 1996 through 2005, 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; except that (i) for State
fiscal year 1998, for all purposes of this Code and any other
law of this State, the certified percentage of the applicable
employee payroll shall be 5.052% for employees earning eligible
creditable service under Section 14-110 and 6.500% for all
other employees, notwithstanding any contrary certification
made under Section 14-135.08 before July 7, 1997 (the effective
date of Public Act 90-65), and (ii) in the following specified

HB3524 - 60 - LRB101 07948 RPS 53003 b
State fiscal years, the State contribution to the System shall
not be less than the following indicated percentages of the
applicable employee payroll, even if the indicated percentage
will produce a State contribution in excess of the amount
otherwise required under this subsection and subsection (a):
9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
2002; 10.6% in FY 2003; and 10.8% in FY 2004.
Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2006 is $203,783,900.
Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2007 is $344,164,400.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State General Revenue Fund contribution for
State fiscal year 2010 is $723,703,100 and shall be made from
the proceeds of bonds sold in fiscal year 2010 pursuant to
Section 7.2 of the General Obligation Bond Act, less (i) the
pro rata share of bond sale expenses determined by the System's
share of total bond proceeds, (ii) any amounts received from

HB3524 - 61 - LRB101 07948 RPS 53003 b
the General Revenue Fund in fiscal year 2010, and (iii) any
reduction in bond proceeds due to the issuance of discounted
bonds, if applicable.
Notwithstanding any other provision of this Article, the
total required State General Revenue Fund contribution for
State fiscal year 2011 is the amount recertified by the System
on or before April 1, 2011 pursuant to Section 14-135.08 and
shall be made from the proceeds of bonds sold in fiscal year
2011 pursuant to Section 7.2 of the General Obligation Bond
Act, less (i) the pro rata share of bond sale expenses
determined by the System's share of total bond proceeds, (ii)
any amounts received from the General Revenue Fund in fiscal
year 2011, and (iii) any reduction in bond proceeds due to the
issuance of discounted bonds, if applicable.
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.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a

HB3524 - 62 - LRB101 07948 RPS 53003 b
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 14-135.08, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of

HB3524 - 63 - LRB101 07948 RPS 53003 b
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(f) After the submission of all payments for eligible
employees from personal services line items in fiscal year 2004
have been made, the Comptroller shall provide to the System a
certification of the sum of all fiscal year 2004 expenditures
for personal services that would have been covered by payments
to the System under this Section if the provisions of Public
Act 93-665 had not been enacted. Upon receipt of the
certification, the System shall determine the amount due to the
System based on the full rate certified by the Board under
Section 14-135.08 for fiscal year 2004 in order to meet the
State's obligation under this Section. The System shall compare
this amount due to the amount received by the System in fiscal
year 2004 through payments under this Section and under Section
6z-61 of the State Finance Act. If the amount due is more than
the amount received, the difference shall be termed the "Fiscal
Year 2004 Shortfall" for purposes of this Section, and the
Fiscal Year 2004 Shortfall shall be satisfied under Section 1.2
of the State Pension Funds Continuing Appropriation Act. If the
amount due is less than the amount received, the difference
shall be termed the "Fiscal Year 2004 Overpayment" for purposes
of this Section, and the Fiscal Year 2004 Overpayment shall be
repaid by the System to the Pension Contribution Fund as soon
as practicable after the certification.

HB3524 - 64 - LRB101 07948 RPS 53003 b
(g) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, 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.
(h) For purposes of determining the required State
contribution to the System for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the System's actuarially assumed rate of return.
(i) After the submission of all payments for eligible
employees from personal services line items paid from the
General Revenue Fund in fiscal year 2010 have been made, the
Comptroller shall provide to the System a certification of the
sum of all fiscal year 2010 expenditures for personal services
that would have been covered by payments to the System under
this Section if the provisions of Public Act 96-45 had not been
enacted. Upon receipt of the certification, the System shall
determine the amount due to the System based on the full rate
certified by the Board under Section 14-135.08 for fiscal year
2010 in order to meet the State's obligation under this

HB3524 - 65 - LRB101 07948 RPS 53003 b
Section. The System shall compare this amount due to the amount
received by the System in fiscal year 2010 through payments
under this Section. If the amount due is more than the amount
received, the difference shall be termed the "Fiscal Year 2010
Shortfall" for purposes of this Section, and the Fiscal Year
2010 Shortfall shall be satisfied under Section 1.2 of the
State Pension Funds Continuing Appropriation Act. If the amount
due is less than the amount received, the difference shall be
termed the "Fiscal Year 2010 Overpayment" for purposes of this
Section, and the Fiscal Year 2010 Overpayment shall be repaid
by the System to the General Revenue Fund as soon as
practicable after the certification.
(j) After the submission of all payments for eligible
employees from personal services line items paid from the
General Revenue Fund in fiscal year 2011 have been made, the
Comptroller shall provide to the System a certification of the
sum of all fiscal year 2011 expenditures for personal services
that would have been covered by payments to the System under
this Section if the provisions of Public Act 96-1497 had not
been enacted. Upon receipt of the certification, the System
shall determine the amount due to the System based on the full
rate certified by the Board under Section 14-135.08 for fiscal
year 2011 in order to meet the State's obligation under this
Section. The System shall compare this amount due to the amount
received by the System in fiscal year 2011 through payments
under this Section. If the amount due is more than the amount

HB3524 - 66 - LRB101 07948 RPS 53003 b
received, the difference shall be termed the "Fiscal Year 2011
Shortfall" for purposes of this Section, and the Fiscal Year
2011 Shortfall shall be satisfied under Section 1.2 of the
State Pension Funds Continuing Appropriation Act. If the amount
due is less than the amount received, the difference shall be
termed the "Fiscal Year 2011 Overpayment" for purposes of this
Section, and the Fiscal Year 2011 Overpayment shall be repaid
by the System to the General Revenue Fund as soon as
practicable after the certification.
(k) For fiscal years 2012 through 2019 only, after the
submission of all payments for eligible employees from personal
services line items paid from the General Revenue Fund in the
fiscal year have been made, the Comptroller shall provide to
the System a certification of the sum of all expenditures in
the fiscal year for personal services. Upon receipt of the
certification, the System shall determine the amount due to the
System based on the full rate certified by the Board under
Section 14-135.08 for the fiscal year in order to meet the
State's obligation under this Section. The System shall compare
this amount due to the amount received by the System for the
fiscal year. If the amount due is more than the amount
received, the difference shall be termed the "Prior Fiscal Year
Shortfall" for purposes of this Section, and the Prior Fiscal
Year Shortfall shall be satisfied under Section 1.2 of the
State Pension Funds Continuing Appropriation Act. If the amount
due is less than the amount received, the difference shall be

HB3524 - 67 - LRB101 07948 RPS 53003 b
termed the "Prior Fiscal Year Overpayment" for purposes of this
Section, and the Prior Fiscal Year Overpayment shall be repaid
by the System to the General Revenue Fund as soon as
practicable after the certification.
(Source: P.A. 99-8, eff. 7-9-15; 99-523, eff. 6-30-16; 100-23,
eff. 7-6-17; 100-587, eff. 6-4-18.)
(40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 14-133. Contributions on behalf of members.
(a) Except as provided in subsection (a-5), each Each
participating employee shall make contributions to the System,
based on the employee's compensation, as follows:
(1) Covered employees, except as indicated below, 3.5%
for retirement annuity, and 0.5% for a widow or survivors
annuity;
(2) Noncovered employees, except as indicated below,
7% for retirement annuity and 1% for a widow or survivors
annuity;
(3) Noncovered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 1% for a widow or survivors annuity plus the
following amount for retirement annuity: 8.5% through
December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
in 2004 and thereafter;

HB3524 - 68 - LRB101 07948 RPS 53003 b
(4) Covered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 0.5% for a widow or survivors annuity plus
the following amount for retirement annuity: 5% through
December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
and thereafter;
(5) Each security employee of the Department of
Corrections or of the Department of Human Services who is a
covered employee, 0.5% for a widow or survivors annuity
plus the following amount for retirement annuity: 5%
through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
in 2004 and thereafter;
(6) Each security employee of the Department of
Corrections or of the Department of Human Services who is
not a covered employee, 1% for a widow or survivors annuity
plus the following amount for retirement annuity: 8.5%
through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
11.5% in 2004 and thereafter.
(a-5) Beginning July 1, 2021 or the effective date of the
Tier 1 employee's election under paragraph (1) of subsection
(a) of Section 14-106.5, whichever is later, in lieu of the
contributions otherwise required under subsection (a), each
Tier 1 employee who made the election under paragraph (1) of
subsection (a) of Section 14-106.5 who is a participating
employee shall make contributions to the System, based on his
or her compensation, as follows:

HB3524 - 69 - LRB101 07948 RPS 53003 b
(1) Covered employees, except as indicated below,
3.15% for retirement annuity, and 0.45% for a widow or
survivors annuity;
(2) Noncovered employees, except as indicated below,
6.3% for retirement annuity and 0.9% for a widow or
survivors annuity;
(3) Noncovered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 10.35% for retirement annuity and 0.9% for a
widow or survivors annuity;
(4) Covered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 7.2% for retirement annuity and 0.45% for a
widow or survivors annuity;
(5) Each security employee of the Department of
Corrections or of the Department of Human Services who is a
covered employee, 10.8% for retirement annuity and 0.45%
for a widow or survivors annuity;
(6) Each security employee of the Department of
Corrections or of the Department of Human Services who is
not a covered employee, 10.35% for retirement annuity and
0.9% for a widow or survivors annuity.
(b) Contributions shall be in the form of a deduction from
compensation and shall be made notwithstanding that the
compensation paid in cash to the employee shall be reduced
thereby below the minimum prescribed by law or regulation. Each

HB3524 - 70 - LRB101 07948 RPS 53003 b
member is deemed to consent and agree to the deductions from
compensation provided for in this Article, and shall receipt in
full for salary or compensation.
(Source: P.A. 92-14, eff. 6-28-01.)
(40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
Sec. 14-135.08. To certify required State contributions.
(a) To certify to the Governor and to each department, on
or before November 15 of each year until November 15, 2011, the
required rate for State contributions to the System for the
next State fiscal year, as determined under subsection (b) of
Section 14-131. The certification to the Governor under this
subsection (a) shall include a copy of the actuarial
recommendations upon which the rate is based and shall
specifically identify the System's projected State normal cost
for that fiscal year.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial

HB3524 - 71 - LRB101 07948 RPS 53003 b
assumptions that the Board must consider before finalizing its
certification of the required State contributions. On or before
January 15, 2013 and each January 15 thereafter, the Board
shall certify to the Governor and the General Assembly the
amount of the required State contribution for the next fiscal
year. The Board's certification must note any deviations from
the State Actuary's recommended changes, the reason or reasons
for not following the State Actuary's recommended changes, and
the fiscal impact of not following the State Actuary's
recommended changes on the required State contribution.
(b) The certifications under subsections (a) and (a-5)
shall include an additional amount necessary to pay all
principal of and interest on those general obligation bonds due
the next fiscal year authorized by Section 7.2(a) of the
General Obligation Bond Act and issued to provide the proceeds
deposited by the State with the System in July 2003,
representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act. For State
fiscal year 2005, the Board shall make a supplemental
certification of the additional amount necessary to pay all
principal of and interest on those general obligation bonds due
in State fiscal years 2004 and 2005 authorized by Section
7.2(a) of the General Obligation Bond Act and issued to provide
the proceeds deposited by the State with the System in July
2003, representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act, as soon as

HB3524 - 72 - LRB101 07948 RPS 53003 b
practical after the effective date of this amendatory Act of
the 93rd General Assembly.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System and the required
rates for State contributions to the System for State fiscal
year 2005, taking into account the amounts appropriated to and
received by the System under subsection (d) of Section 7.2 of
the General Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System and the required
rates for State contributions to the System for State fiscal
year 2006, taking into account the changes in required State
contributions made by this amendatory Act of the 94th General
Assembly.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System for State fiscal
year 2011, applying the changes made by Public Act 96-889 to
the System's assets and liabilities as of June 30, 2009 as
though Public Act 96-889 was approved on that date.
By November 1, 2017, the Board shall recalculate and
recertify to the State Actuary, the Governor, and the General
Assembly the amount of the State contribution to the System for
State fiscal year 2018, taking into account the changes in

HB3524 - 73 - LRB101 07948 RPS 53003 b
required State contributions made by this amendatory Act of the
100th General Assembly. The State Actuary shall review the
assumptions and valuations underlying the Board's revised
certification and issue a preliminary report concerning the
proposed recertification and identifying, if necessary,
recommended changes in actuarial assumptions that the Board
must consider before finalizing its certification of the
required State contributions. The Board's final certification
must note any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
On or after June 15, 2019, but no later than June 30, 2019,
the Board shall recalculate and recertify to the Governor and
the General Assembly the amount of the State contribution to
the System for State fiscal year 2019, taking into account the
changes in required State contributions made by this amendatory
Act of the 100th General Assembly. The recalculation shall be
made using assumptions adopted by the Board for the original
fiscal year 2019 certification. The monthly voucher for the
12th month of fiscal year 2019 shall be paid by the Comptroller
after the recertification required pursuant to this paragraph
is submitted to the Governor, Comptroller, and General
Assembly. The recertification submitted to the General
Assembly shall be filed with the Clerk of the House of

HB3524 - 74 - LRB101 07948 RPS 53003 b
Representatives and the Secretary of the Senate in electronic
form only, in the manner that the Clerk and the Secretary shall
direct.
On or before May 1, 2021, the Board shall recalculate and
recertify to the Governor and the General Assembly the amount
of the required State contribution to the System for State
fiscal year 2022, taking into account the effect on the
System's liabilities of the elections made under Section
14-106.5.
On or before October 1, 2021, the Board shall recalculate
and recertify to the Governor and the General Assembly the
amount of the required State contribution to the System for
State fiscal year 2022, taking into account the reduction
specified under item (3) of subsection (e) of Section 14-131.
(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18.)
(40 ILCS 5/14-152.1)
Sec. 14-152.1. Application and expiration of new benefit
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

HB3524 - 75 - LRB101 07948 RPS 53003 b
the changes made to Article 1 or this Article by Public Act
96-37, Public Act 100-23, Public Act 100-587, Public Act
100-611, or this amendatory Act of the 101st General Assembly
or this amendatory Act of the 100th 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
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

HB3524 - 76 - LRB101 07948 RPS 53003 b
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
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
100-611, eff. 7-20-18; revised 7-25-18.)
(40 ILCS 5/15-108.1)
Sec. 15-108.1. Tier 1 member; Tier 1 employee.
"Tier 1 member": A participant or an annuitant of a
retirement annuity under this Article, other than a participant

HB3524 - 77 - LRB101 07948 RPS 53003 b
in the self-managed plan under Section 15-158.2, who first
became a participant or member before January 1, 2011 under any
reciprocal retirement system or pension fund established under
this Code, other than a retirement system or pension fund
established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
"Tier 1 member" includes a person who first became a
participant under this System before January 1, 2011 and who
accepts a refund and is subsequently reemployed by an employer
on or after January 1, 2011.
"Tier 1 employee": A Tier 1 member who is a participating
employee, unless he or she is a disability benefit recipient
under Section 15-150. However, for the purposes of the election
under Section 15-132.9, "Tier 1 employee" does not include an
individual who has made an irrevocable election on or before
June 1, 2019 to retire from service pursuant to the terms of an
employment contract or a collective bargaining agreement in
effect on June 1, 2019, excluding any extension, amendment, or
renewal of that agreement on or after that date, and has
notified the System of that election.
(Source: P.A. 98-92, eff. 7-16-13.)
(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
Sec. 15-111. Earnings.
(a) "Earnings": Subject to Section 15-111.5, an amount paid
for personal services equal to the sum of the basic
compensation plus extra compensation for summer teaching,

HB3524 - 78 - LRB101 07948 RPS 53003 b
overtime or other extra service. For periods for which an
employee receives service credit under subsection (c) of
Section 15-113.1 or Section 15-113.2, earnings are equal to the
basic compensation on which contributions are paid by the
employee during such periods. Compensation for employment
which is irregular, intermittent and temporary shall not be
considered earnings, unless the participant is also receiving
earnings from the employer as an employee under Section 15-107.
With respect to transition pay paid by the University of
Illinois to a person 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:
(1) "Earnings" includes transition pay paid to the
employee on or after the effective date of this amendatory
Act of the 91st General Assembly.
(2) "Earnings" includes transition pay paid to the
employee before the effective date of this amendatory Act
of the 91st General Assembly only if (i) employee
contributions under Section 15-157 have been withheld from
that transition pay or (ii) the employee pays to the System
before January 1, 2001 an amount representing employee
contributions under Section 15-157 on that transition pay.
Employee contributions under item (ii) may be paid in a
lump sum, by withholding from additional transition pay
accruing before January 1, 2001, or in any other manner

HB3524 - 79 - LRB101 07948 RPS 53003 b
approved by the System. Upon payment of the employee
contributions on transition pay, the corresponding
employer contributions become an obligation of the State.
(a-5) Notwithstanding any other provision of this Section,
"earnings" does not include any future increase in income that
is offered for service by an employer to a Tier 1 employee
under this Article pursuant to the condition set forth in
subsection (c) of Section 15-132.9 and accepted under that
condition by a Tier 1 employee who has made the election under
paragraph (2) of subsection (a) of Section 15-132.9.
(a-10) Notwithstanding any other provision of this
Section, "earnings" does not include any consideration payment
made to a Tier 1 employee.
(b) For a Tier 2 member, the annual earnings shall not
exceed $106,800; however, that amount shall annually
thereafter be increased by the lesser of (i) 3% of that amount,
including all previous adjustments, or (ii) one half the annual
unadjusted percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, including all previous
adjustments.
For the purposes of this Section, "consumer price index u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =

HB3524 - 80 - LRB101 07948 RPS 53003 b
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the boards of the retirement
systems and pension funds by November 1 of each year.
(c) With each submission of payroll information in the
manner prescribed by the System, the employer shall certify
that the payroll information is correct and complies with all
applicable State and federal laws.
(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)
(40 ILCS 5/15-112.1 new)
Sec. 15-112.1. Future increase in income. "Future increase
in income" means an increase to a Tier 1 employee's base pay
that is offered by an employer to the Tier 1 employee for
service under this Article after June 30, 2020 that qualifies
as "earnings", as defined in Section 15-111, or would qualify
as "earnings" but for the fact that it was offered to and
accepted by the Tier 1 employee under the condition set forth
in subsection (c) of Section 15-132.9. The term "future
increase in income" includes an increase to a Tier 1 employee's
base pay that is paid to the Tier 1 employee pursuant to an
extension, amendment, or renewal of any such employment
contract or collective bargaining agreement after the
effective date of this Section.
(40 ILCS 5/15-112.2 new)

HB3524 - 81 - LRB101 07948 RPS 53003 b
Sec. 15-112.2. Base pay. As used in Section 15-112.1 of
this Code, "base pay" means the greater of either (i) the Tier
1 employee's annualized rate of earnings as of June 30, 2020,
or (ii) the Tier 1 employee's annualized rate of earnings
immediately preceding the expiration, renewal, or amendment of
an employment contract or collective bargaining agreement in
effect on the effective date of this Section. For a person
returning to participating employee status as a Tier 1 employee
after June 30, 2020, however, "base pay" means the employee's
annualized rate of earnings as of the employee's last date of
service prior to July 1, 2020. The System shall calculate the
base pay of each Tier 1 employee pursuant to this Section.
(40 ILCS 5/15-132.9 new)
Sec. 15-132.9. Election by Tier 1 employees.
(a) Each Tier 1 employee shall make an irrevocable election
either:
(1) to agree to delay his or her eligibility for
automatic annual increases in retirement annuity as
provided in subsection (d-1) of Section 15-136 and to have
the amount of the automatic annual increases in his or her
retirement annuity and survivor annuity that are otherwise
provided for in this Article calculated, instead, as
provided in subsection (d-1) of Section 15-136; or
(2) to not agree to the provisions of paragraph (1) of
this subsection.

HB3524 - 82 - LRB101 07948 RPS 53003 b
The election required under this subsection (a) shall be
made by each Tier 1 employee no earlier than January 1, 2020
and no later than March 31, 2020, except that:
(i) a person who becomes a Tier 1 employee under this
Article on or after January 1, 2020 must make the election
under this subsection (a) within 60 days after becoming a
Tier 1 employee;
(ii) a person who returns to participating employee
status as a Tier 1 employee under this Article on or after
January 1, 2020 and has not yet made an election under this
Section must make the election under this subsection (a)
within 60 days after returning to participating employee
status as a Tier 1 employee; and
(iii) a person who returns to participating employee
status as a Tier 1 employee under this Article but who has
not made an election under Section 15-134.5 must make the
election under this subsection (a) at the same time as the
election under Section 15-134.5 and within the timeframes
required by that Section.
If a Tier 1 employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) If this Section is enjoined or stayed by an Illinois
court or a court of competent jurisdiction pending the entry of
a final and unappealable decision, and this Section is

HB3524 - 83 - LRB101 07948 RPS 53003 b
determined to be constitutional or otherwise valid by a final
unappealable decision of an Illinois court or a court of
competent jurisdiction, then the election procedure set forth
in subsection (a) of this Section shall commence on the 180th
calendar day after the date of the issuance of the final
unappealable decision and shall conclude at the end of the
270th calendar day after that date.
(a-10) All elections under subsection (a) that are made or
deemed to be made before July 1, 2020 shall take effect on July
1, 2020. Elections that are made or deemed to be made on or
after July 1, 2020 shall take effect on the first day of the
month following the month in which the election is made or
deemed to be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
the employer shall be expressly and irrevocably prohibited from
offering any future increases in income to a Tier 1 employee
who has made an election under paragraph (1) of subsection (a)
of this Section on the condition of not constituting earnings
under Section 15-111.
As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
each Tier 1 employee who has made an election under paragraph
(1) of subsection (a) of this Section shall receive a

HB3524 - 84 - LRB101 07948 RPS 53003 b
consideration payment equal to 10% of the contributions made by
or on behalf of the employee under Section 15-157 before the
effective date of that election. The State Comptroller shall
pay the consideration payment to the Tier 1 employee out of
funds appropriated for that purpose under Section 1.10 of the
State Pension Funds Continuing Appropriation Act. The System
shall calculate the amount of each consideration payment and,
by July 1, 2020, shall certify to the State Comptroller the
amount of the consideration payment, together with the name,
address, and any other available payment information of the
Tier 1 employee as found in the records of the System. The
System shall make additional calculations and certifications
of consideration payments to the State Comptroller as the
System deems necessary.
(c) A Tier 1 employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to paragraph (1) of subsection (a) of this Section.
However, each future increase in income offered by an employer
under this Article to a Tier 1 employee who has made the
election under paragraph (2) of subsection (a) of this Section
shall be offered by the employer expressly and irrevocably on
the condition of not constituting earnings under Section 15-111
and that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to
that condition.
(d) The System shall make a good faith effort to contact

HB3524 - 85 - LRB101 07948 RPS 53003 b
each Tier 1 employee subject to this Section. The System shall
mail information describing the required election to each Tier
1 employee by United States Postal Service mail to his or her
last known address on file with the System. If the Tier 1
employee is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details
in a regularly published newsletter or other existing public
forum.
Tier 1 employees who are subject to this Section shall be
provided with an election packet containing information
regarding their options, as well as the forms necessary to make
the required election. Upon request, the System shall offer
Tier 1 employees an opportunity to receive information from the
System before making the required election. The information may
consist of video materials, benefit estimators, group
presentations, individual consultation with a member or
authorized representative of the System in person or by
telephone or other electronic means, or any combination of
these methods. The System shall not provide advice or
counseling with respect to which election a Tier 1 employee
should make or specific to the legal or tax circumstances of or
consequences to the Tier 1 employee.
The System shall inform Tier 1 employees in the election
packet required under this subsection that the Tier 1 employee
may also wish to obtain information and counsel relating to the

HB3524 - 86 - LRB101 07948 RPS 53003 b
election required under this Section from any other available
source, including, but not limited to, labor organizations and
private counsel.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member regarding the
elections under this Section. The System shall coordinate with
the Illinois Department of Central Management Services and each
other retirement system administering an election in
accordance with this amendatory Act of the 101st General
Assembly to provide information concerning the impact of the
election set forth in this Section.
(e) Notwithstanding any other provision of law, an employer
under this Article is required to offer each future increase in
income expressly and irrevocably on the condition of not
constituting "earnings" under Section 15-111 to any Tier 1
employee who has made an election under paragraph (2) of
subsection (a) of this Section. The offer shall also provide
that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to the
condition set forth in this subsection.
For purposes of legislative intent, the condition set forth
in this subsection shall be construed in a manner that ensures
that the condition is not violated or circumvented through any
contrivance of any kind.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119

HB3524 - 87 - LRB101 07948 RPS 53003 b
of this Code.
(g) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986.
(h) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life 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

HB3524 - 88 - LRB101 07948 RPS 53003 b
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.
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 effective 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;
(ii) an annuity from employer contributions of an
amount equal to that 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;
and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.
With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal

HB3524 - 89 - LRB101 07948 RPS 53003 b
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
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

HB3524 - 90 - LRB101 07948 RPS 53003 b
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. The retirement annuity
for all other service shall be computed under Rule 1. A Tier 2
member is eligible for a retirement annuity calculated under
Rule 4 only if that Tier 2 member meets the service
requirements for that benefit calculation as prescribed under
this Rule 4 in addition to the applicable age requirement under
subsection (a-5) of Section 15-135.

HB3524 - 91 - LRB101 07948 RPS 53003 b
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) For a Tier 1 member, 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

HB3524 - 92 - LRB101 07948 RPS 53003 b
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.
(b-5) The retirement annuity of a Tier 2 member who is
retiring after attaining age 62 with at least 10 years of
service credit shall be reduced by 1/2 of 1% for each full
month that the member's age is under age 67.
(c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 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) Subject to the provisions of subsection (d-1), a A Tier
1 member 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,

HB3524 - 93 - LRB101 07948 RPS 53003 b
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, and except as provided in
subsection (d-1), 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.

HB3524 - 94 - LRB101 07948 RPS 53003 b
(d-1) Notwithstanding any other provision of this Article,
for a Tier 1 employee who made the election under paragraph (1)
of subsection (a) of Section 15-132.9:
(1) The initial increase in retirement annuity under
this Section shall occur on the January 1 occurring either
on or after the attainment of age 67 or the fifth
anniversary of the annuity start date, whichever is
earlier.
(2) The amount of each automatic annual increase in
retirement annuity or survivor annuity occurring on or
after the effective date of that election shall be
calculated as a percentage of the originally granted
retirement annuity or survivor annuity, equal to 3% or
one-half the annual unadjusted percentage increase (but
not less than zero) in the consumer price index-u for the
12 months ending with the September preceding each November
1, whichever is less. If the annual unadjusted percentage
change in the consumer price index-u for the 12 months
ending with the September preceding each November 1 is zero
or there is a decrease, then the annuity shall not be
increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =

HB3524 - 95 - LRB101 07948 RPS 53003 b
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the board of the retirement
system by November 1 of each year.
(d-5) A retirement annuity of a Tier 2 member shall receive
annual increases on the January 1 occurring either on or after
the attainment of age 67 or the first anniversary of the
annuity start date, whichever is later. Each annual increase
shall be calculated at 3% or one half the annual unadjusted
percentage increase (but not less than zero) in the consumer
price index-u for the 12 months ending with the September
preceding each November 1, whichever is less, of the originally
granted retirement annuity. If the annual unadjusted
percentage change in the consumer price index-u for the 12
months ending with the September preceding each November 1 is
zero or there is a decrease, then the annuity shall not be
increased.
(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

HB3524 - 96 - LRB101 07948 RPS 53003 b
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

HB3524 - 97 - LRB101 07948 RPS 53003 b
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. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
98-92, eff. 7-16-13.)
(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

HB3524 - 98 - LRB101 07948 RPS 53003 b
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 2012 through 2045 (except as
otherwise provided for fiscal year 2021), 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 year 2021:
(1) The initial calculation and certification shall be
based on the amount determined above.
(2) For purposes of the recertification due on or
before May 1, 2020, the recalculation of the required State
contribution for fiscal year 2021 shall take into account
the effect on the System's liabilities of the elections

HB3524 - 99 - LRB101 07948 RPS 53003 b
made under Section 15-132.9.
(3) For purposes of the recertification due on or
before October 1, 2020, the total required State
contribution for fiscal year 2021 shall be reduced by the
amount of the consideration payments made to Tier 1
employees who made the election under paragraph (1) of
subsection (a) of Section 15-132.9.
For each of State fiscal years 2018, 2019, and 2020, the
State shall make an additional contribution to the System equal
to 2% of the total payroll of each employee who is deemed to
have elected the benefits under Section 1-161 or who has made
the election under subsection (c) of Section 1-161.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first

HB3524 - 100 - LRB101 07948 RPS 53003 b
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it at
the resulting annual rate in each of the remaining fiscal
years in that 5-year period.
For State fiscal years 1996 through 2005, 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.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$702,514,000 and shall be made from the State Pensions Fund and
proceeds of bonds sold in fiscal year 2010 pursuant to Section

HB3524 - 101 - LRB101 07948 RPS 53003 b
7.2 of the General Obligation Bond Act, less (i) the pro rata
share of bond sale expenses determined by the System's share of
total bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2010, (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 15-165 and shall be made from the State
Pensions Fund and proceeds of bonds sold in fiscal year 2011
pursuant to Section 7.2 of the General Obligation Bond Act,
less (i) the pro rata share of bond sale expenses determined by
the System's share of total bond proceeds, (ii) any amounts
received from the General Revenue Fund in fiscal year 2011, and
(iii) any reduction in bond proceeds due to the issuance of
discounted bonds, if applicable.
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.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.

HB3524 - 102 - LRB101 07948 RPS 53003 b
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State

HB3524 - 103 - LRB101 07948 RPS 53003 b
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(a-2) Beginning in fiscal year 2018, each employer under
this Article shall pay to the System a required contribution
determined as a percentage of projected payroll and sufficient
to produce an annual amount equal to:
(i) for each of fiscal years 2018, 2019, and 2020, the
defined benefit normal cost of the defined benefit plan,
less the employee contribution, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (c) of Section 1-161; for fiscal
year 2021 and each fiscal year thereafter, the defined
benefit normal cost of the defined benefit plan, less the
employee contribution, plus 2%, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (c) of Section 1-161; plus
(ii) the amount required for that fiscal year to
amortize any unfunded actuarial accrued liability
associated with the present value of liabilities
attributable to the employer's account under Section

HB3524 - 104 - LRB101 07948 RPS 53003 b
15-155.2, determined as a level percentage of payroll over
a 30-year rolling amortization period.
In determining contributions required under item (i) of
this subsection, the System shall determine an aggregate rate
for all employers, expressed as a percentage of projected
payroll.
In determining the contributions required under item (ii)
of this subsection, the amount shall be computed by the System
on the basis of the actuarial assumptions and tables used in
the most recent actuarial valuation of the System that is
available at the time of the computation.
The contributions required under this subsection (a-2)
shall be paid by an employer concurrently with that employer's
payroll payment period. The State, as the actual employer of an
employee, shall make the required contributions under this
subsection.
As used in this subsection, "academic year" means the
12-month period beginning September 1.
(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

HB3524 - 105 - LRB101 07948 RPS 53003 b
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

HB3524 - 106 - LRB101 07948 RPS 53003 b
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, except as
provided in subsection (g).
(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.
(g) For academic years beginning on or after June 1, 2005
and before July 1, 2018 and for earnings paid to a participant
under a contract or collective bargaining agreement entered
into, amended, or renewed before June 4, 2018 (the effective

HB3524 - 107 - LRB101 07948 RPS 53003 b
date of Public Act 100-587) this amendatory Act of the 100th
General Assembly, if the amount of a participant's earnings for
any academic year used to determine the final rate of earnings,
determined on a full-time equivalent basis, exceeds the amount
of his or her earnings with the same employer for the previous
academic year, determined on a full-time equivalent basis, by
more than 6%, the participant's employer shall pay to the
System, in addition to all other payments required under this
Section and in accordance with guidelines established by the
System, the present value of the increase in benefits resulting
from the portion of the increase in earnings that is in excess
of 6%. This present value shall be computed by the System on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the System that is available
at the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
Whenever it determines that a payment is or may be required
under this subsection (g), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection

HB3524 - 108 - LRB101 07948 RPS 53003 b
(h) or (i) of this Section or that subsection (g-1) applies,
must include an affidavit setting forth and attesting to all
facts within the employer's knowledge that are pertinent to the
applicability of that subsection. Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
(g) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
When assessing payment for any amount due under this
subsection (g), the System shall include earnings, to the
extent not established by a participant under Section 15-113.11
or 15-113.12, that would have been paid to the participant had
the participant not taken (i) periods of voluntary or
involuntary furlough occurring on or after July 1, 2015 and on
or before June 30, 2017 or (ii) periods of voluntary pay
reduction in lieu of furlough occurring on or after July 1,
2015 and on or before June 30, 2017. Determining earnings that
would have been paid to a participant had the participant not
taken periods of voluntary or involuntary furlough or periods

HB3524 - 109 - LRB101 07948 RPS 53003 b
of voluntary pay reduction shall be the responsibility of the
employer, and shall be reported in a manner prescribed by the
System.
This subsection (g) does not apply to (1) Tier 2 hybrid
plan members and (2) Tier 2 defined benefit members who first
participate under this Article on or after the implementation
date of the Optional Hybrid Plan.
(g-1) For academic years beginning on or after July 1, 2018
and for earnings paid to a participant under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 4, 2018 (the effective date of Public
Act 100-587) this amendatory Act of the 100th General Assembly,
if the amount of a participant's earnings for any academic year
used to determine the final rate of earnings, determined on a
full-time equivalent basis, exceeds the amount of his or her
earnings with the same employer for the previous academic year,
determined on a full-time equivalent basis, by more than 3%,
then the participant's employer shall pay to the System, in
addition to all other payments required under this Section and
in accordance with guidelines established by the System, the
present value of the increase in benefits resulting from the
portion of the increase in earnings that is in excess of 3%.
This present value shall be computed by the System on the basis
of the actuarial assumptions and tables used in the most recent
actuarial valuation of the System that is available at the time
of the computation. The System may require the employer to

HB3524 - 110 - LRB101 07948 RPS 53003 b
provide any pertinent information or documentation.
Whenever it determines that a payment is or may be required
under this subsection (g-1), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that subsection (g) of this Section applies,
must include an affidavit setting forth and attesting to all
facts within the employer's knowledge that are pertinent to the
applicability of subsection (g). Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
(g-1) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest shall
be charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
This subsection (g-1) does not apply to (1) Tier 2 hybrid
plan members and (2) Tier 2 defined benefit members who first

HB3524 - 111 - LRB101 07948 RPS 53003 b
participate under this Article on or after the implementation
date of the Optional Hybrid Plan.
(h) This subsection (h) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to
participants under contracts or collective bargaining
agreements entered into, amended, or renewed before June 1,
2005.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to a
participant at a time when the participant is 10 or more years
from retirement eligibility under Section 15-135.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases resulting from
overload work, including a contract for summer teaching, or
overtime when the employer has certified to the System, and the
System has approved the certification, that: (i) in the case of
overloads (A) the overload work is for the sole purpose of
academic instruction in excess of the standard number of
instruction hours for a full-time employee occurring during the
academic year that the overload is paid and (B) the earnings
increases are equal to or less than the rate of pay for

HB3524 - 112 - LRB101 07948 RPS 53003 b
academic instruction computed using the participant's current
salary rate and work schedule; and (ii) in the case of
overtime, the overtime was necessary for the educational
mission.
When assessing payment for any amount due under subsection
(g), the System shall exclude any earnings increase resulting
from (i) a promotion for which the employee moves from one
classification to a higher classification under the State
Universities Civil Service System, (ii) a promotion in academic
rank for a tenured or tenure-track faculty position, or (iii) a
promotion that the Illinois Community College Board has
recommended in accordance with subsection (k) of this Section.
These earnings increases shall be excluded only if the
promotion is to a position that has existed and been filled by
a member for no less than one complete academic year and the
earnings increase as a result of the promotion is an increase
that results in an amount no greater than the average salary
paid for other similar positions.
(i) When assessing payment for any amount due under
subsection (g), the System shall exclude any salary increase
described in subsection (h) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014

HB3524 - 113 - LRB101 07948 RPS 53003 b
shall be used in assessing payment for any amount due under
subsection (g) of this Section.
(j) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(j-5) For State fiscal years beginning on or after July 1,
2017, if the amount of a participant's earnings for any State
fiscal year exceeds the amount of the salary set by law for the
Governor that is in effect on July 1 of that fiscal year, the
participant's employer shall pay to the System, in addition to
all other payments required under this Section and in
accordance with guidelines established by the System, an amount
determined by the System to be equal to the employer normal
cost, as established by the System and expressed as a total

HB3524 - 114 - LRB101 07948 RPS 53003 b
percentage of payroll, multiplied by the amount of earnings in
excess of the amount of the salary set by law for the Governor.
This amount shall be computed by the System on the basis of the
actuarial assumptions and tables used in the most recent
actuarial valuation of the System that is available at the time
of the computation. The System may require the employer to
provide any pertinent information or documentation.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculation used to determine the amount due.
If the employer disputes the amount of the bill, it may, within
30 days after receipt of the bill, apply to the System in
writing for a recalculation. The application must specify in
detail the grounds of the dispute. Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
may be paid in the form of a lump sum within 90 days after
issuance of the bill. If the employer contributions are not
paid within 90 days after issuance of the bill, then interest
will be charged at a rate equal to the System's annual
actuarially assumed rate of return on investment compounded
annually from the 91st day after issuance of the bill. All
payments must be received within 3 years after issuance of the
bill. If the employer fails to make complete payment, including

HB3524 - 115 - LRB101 07948 RPS 53003 b
applicable interest, within 3 years, then the System may, after
giving notice to the employer, certify the delinquent amount to
the State Comptroller, and the Comptroller shall thereupon
deduct the certified delinquent amount from State funds payable
to the employer and pay them instead to the System.
This subsection (j-5) does not apply to a participant's
earnings to the extent an employer pays the employer normal
cost of such earnings.
The changes made to this subsection (j-5) by Public Act
100-624 this amendatory Act of the 100th General Assembly are
intended to apply retroactively to July 6, 2017 (the effective
date of Public Act 100-23).
(k) The Illinois Community College Board shall adopt rules
for recommending lists of promotional positions submitted to
the Board by community colleges and for reviewing the
promotional lists on an annual basis. When recommending
promotional lists, the Board shall consider the similarity of
the positions submitted to those positions recognized for State
universities by the State Universities Civil Service System.
The Illinois Community College Board shall file a copy of its
findings with the System. The System shall consider the
findings of the Illinois Community College Board when making
determinations under this Section. The System shall not exclude
any earnings increases resulting from a promotion when the
promotion was not submitted by a community college. Nothing in
this subsection (k) shall require any community college to

HB3524 - 116 - LRB101 07948 RPS 53003 b
submit any information to the Community College Board.
(l) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, 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.
(m) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(n) If Section 15-132.9 is determined to be
unconstitutional or otherwise invalid by a final unappealable
decision of an Illinois court or a court of competent
jurisdiction, then the changes made to this Section by this
amendatory Act of the 101st General Assembly shall not take
effect and are repealed by operation of law.
(Source: P.A. 99-897, eff. 1-1-17; 100-23, eff. 7-6-17;
100-587, eff. 6-4-18; 100-624, eff. 7-20-18; revised 7-30-18.)
(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)

HB3524 - 117 - LRB101 07948 RPS 53003 b
Sec. 15-157. Employee Contributions.
(a) Each participating employee shall make contributions
towards the retirement benefits payable under the retirement
program applicable to the employee from 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

HB3524 - 118 - LRB101 07948 RPS 53003 b
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,
except that with respect to participants in the self-managed
plan this additional contribution shall be used to finance the
benefits obtained under that retirement program. Beginning
July 1, 2020 or the effective date of the Tier 1 employee's
election under paragraph (1) of subsection (a) of Section
15-132.9, whichever is later, each Tier 1 employee who made the
election under paragraph (1) of subsection (a) of Section
15-132.9 is no longer required to make contributions under this
subsection.
(c) Except as provided in subsection (c-5), in In addition
to the amounts described in subsections (a) and (b) of this
Section, each participating employee shall make contributions
of 1% of earnings applicable under this system on and after
August 1, 1959. The contributions made under this subsection

HB3524 - 119 - LRB101 07948 RPS 53003 b
(c) shall be considered as survivor's insurance contributions
for purposes of this Article if the employee is covered under
the traditional benefit package, and such contributions shall
be considered as additional contributions for purposes of this
Article if the employee is participating in the self-managed
plan or has elected to participate in the portable benefit
package and has completed the applicable one-year waiting
period. 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.
(c-5) Beginning July 1, 2020 or the effective date of the
Tier 1 employee's election under paragraph (1) of subsection
(a) of Section 15-132.9, whichever is later, in lieu of the
contributions otherwise required under subsection (c), each
Tier 1 employee who made the election under paragraph (1) of
subsection (a) of Section 15-132.9 shall make contributions of
0.7% of earnings applicable under this System and each Tier 1
employee who is a police officer or firefighter who makes
normal contributions of 8% of each payment of earnings
applicable to employment as a police officer or firefighter
under this System and who made the election under paragraph (1)
of subsection (a) of Section 15-132.9 shall make contributions
of 0.55% of earnings applicable under this System. The
contributions made under this subsection (c-5) shall be

HB3524 - 120 - LRB101 07948 RPS 53003 b
considered as survivor's insurance contributions for purposes
of this Article and such contributions shall be considered as
additional contributions for purposes of this Article if the
employee has elected to participate in the portable benefit
package and has completed the applicable one-year waiting
period.
(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

HB3524 - 121 - LRB101 07948 RPS 53003 b
in clause (1) of subsection (c) of Section 15-136.
(g) A participant may make contributions for the purchase
of service credit under this Article; however, only a
participating employee may make optional contributions under
subsection (b) of Section 15-157.1 of this Article.
(h) A Tier 2 member shall not make contributions on
earnings that exceed the limitation as prescribed under
subsection (b) of Section 15-111 of this Article.
(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
(40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
Sec. 15-165. To certify amounts and submit vouchers.
(a) The Board shall certify to the Governor on or before
November 15 of each year until November 15, 2011 the
appropriation required from State funds for the purposes of
this System for the following fiscal year. The certification
under this subsection (a) shall include a copy of the actuarial
recommendations upon which it is based and shall specifically
identify the System's projected State normal cost for that
fiscal year and the projected State cost for the self-managed
plan for that fiscal year.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General

HB3524 - 122 - LRB101 07948 RPS 53003 b
Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions. On or before
January 15, 2013 and each January 15 thereafter, the Board
shall certify to the Governor and the General Assembly the

HB3524 - 123 - LRB101 07948 RPS 53003 b
amount of the required State contribution for the next fiscal
year. The Board's certification must note, in a written
response to the State Actuary, any deviations from the State
Actuary's recommended changes, the reason or reasons for not
following the State Actuary's recommended changes, and the
fiscal impact of not following the State Actuary's recommended
changes on the required State contribution.
(a-10) By November 1, 2017, the Board shall recalculate and
recertify to the State Actuary, the Governor, and the General
Assembly the amount of the State contribution to the System for
State fiscal year 2018, taking into account the changes in
required State contributions made by this amendatory Act of the
100th General Assembly. The State Actuary shall review the
assumptions and valuations underlying the Board's revised
certification and issue a preliminary report concerning the
proposed recertification and identifying, if necessary,
recommended changes in actuarial assumptions that the Board
must consider before finalizing its certification of the
required State contributions. The Board's final certification
must note any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
(a-15) On or before May 1, 2020, the Board shall
recalculate and recertify to the Governor and the General

HB3524 - 124 - LRB101 07948 RPS 53003 b
Assembly the amount of the required State contribution to the
System for State fiscal year 2021, taking into account the
effect on the System's liabilities of the elections made under
Section 15-132.9.
On or before October 1, 2020, the Board shall recalculate
and recertify to the Governor and the General Assembly the
amount of the required State contribution to the System for
State fiscal year 2021, taking into account the reduction
specified under item (3) of subsection (a-1) of Section 15-155.
(a-15) On or after June 15, 2019, but no later than June
30, 2019, the Board shall recalculate and recertify to the
Governor and the General Assembly the amount of the State
contribution to the System for State fiscal year 2019, taking
into account the changes in required State contributions made
by this amendatory Act of the 100th General Assembly. The
recalculation shall be made using assumptions adopted by the
Board for the original fiscal year 2019 certification. The
monthly voucher for the 12th month of fiscal year 2019 shall be
paid by the Comptroller after the recertification required
pursuant to this subsection is submitted to the Governor,
Comptroller, and General Assembly. The recertification
submitted to the General Assembly shall be filed with the Clerk
of the House of Representatives and the Secretary of the Senate
in electronic form only, in the manner that the Clerk and the
Secretary shall direct.
(b) The Board shall certify to the State Comptroller or

HB3524 - 125 - LRB101 07948 RPS 53003 b
employer, as the case may be, from time to time, by its
chairperson and secretary, with its seal attached, the amounts
payable to the System from the various funds.
(c) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month the Board shall
submit vouchers for payment of State contributions to the
System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a). From the effective date of this amendatory Act of the 93rd
General Assembly through June 30, 2004, the Board shall not
submit vouchers for the remainder of fiscal year 2004 in excess
of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (b) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this Section, the difference
shall be paid from the General Revenue Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.

HB3524 - 126 - LRB101 07948 RPS 53003 b
(d) So long as the payments received are the full amount
lawfully vouchered under this Section, payments received by the
System under this Section shall be applied first toward the
employer contribution to the self-managed plan established
under Section 15-158.2. Payments shall be applied second toward
the employer's portion of the normal costs of the System, as
defined in subsection (f) of Section 15-155. The balance shall
be applied toward the unfunded actuarial liabilities of the
System.
(e) In the event that the System does not receive, as a
result of legislative enactment or otherwise, payments
sufficient to fully fund the employer contribution to the
self-managed plan established under Section 15-158.2 and to
fully fund that portion of the employer's portion of the normal
costs of the System, as calculated in accordance with Section
15-155(a-1), then any payments received shall be applied
proportionately to the optional retirement program established
under Section 15-158.2 and to the employer's portion of the
normal costs of the System, as calculated in accordance with
Section 15-155(a-1).
(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18.)
(40 ILCS 5/15-198)
Sec. 15-198. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means

HB3524 - 127 - LRB101 07948 RPS 53003 b
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 the effective date of this
amendatory Act of the 94th General Assembly. "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, or
this amendatory Act of the 101st General Assembly or this
amendatory Act of the 100th 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
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

HB3524 - 128 - LRB101 07948 RPS 53003 b
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
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;

HB3524 - 129 - LRB101 07948 RPS 53003 b
100-769, eff. 8-10-18; revised 9-26-18.)
(40 ILCS 5/16-107.1 new)
Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
teacher under this Article who first became a member or
participant before January 1, 2011 under any reciprocal
retirement system or pension fund established under this Code
other than a retirement system or pension fund established
under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
the purposes of the election under Section 16-122.9, "Tier 1
employee" does not include a teacher under this Article who
would qualify as a Tier 1 employee but who has made an
irrevocable election on or before June 1, 2019 to retire from
service pursuant to the terms of an employment contract or a
collective bargaining agreement in effect on June 1, 2019,
excluding any extension, amendment, or renewal of that
agreement after that date, and has notified the System of that
election.
(40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 16-121. Salary. "Salary": The actual compensation
received by a teacher during any school year and recognized by
the system in accordance with rules of the board. For purposes
of this Section, "school year" includes the regular school term

HB3524 - 130 - LRB101 07948 RPS 53003 b
plus any additional period for which a teacher is compensated
and such compensation is recognized by the rules of the board.
Notwithstanding any other provision of this Section,
"salary" does not include any future increase in income that is
offered by an employer for service as a Tier 1 employee under
this Article pursuant to the condition set forth in subsection
(c) of Section 16-122.9 and accepted under that condition by a
Tier 1 employee who has made the election under paragraph (2)
of subsection (a) of Section 16-122.9.
Notwithstanding any other provision of this Section,
"salary" does not include any consideration payment made to a
Tier 1 employee.
(Source: P.A. 84-1028.)
(40 ILCS 5/16-121.1 new)
Sec. 16-121.1. Future increase in income. "Future increase
in income" means an increase to a Tier 1 employee's base pay
that is offered by an employer to the Tier 1 employee for
service under this Article after June 30, 2020 that qualifies
as "salary", as defined in Section 16-121, or would qualify as
"salary" but for the fact that it was offered to and accepted
by the Tier 1 employee under the condition set forth in
subsection (c) of Section 16-122.9. The term "future increase
in income" includes an increase to a Tier 1 employee's base pay
that is paid to the Tier 1 employee pursuant to an extension,
amendment, or renewal of any such employment contract or

HB3524 - 131 - LRB101 07948 RPS 53003 b
collective bargaining agreement after the effective date of
this Section.
(40 ILCS 5/16-121.2 new)
Sec. 16-121.2. Base pay. As used in Section 16-121.1 of
this Code, "base pay" means the greater of either (i) the Tier
1 employee's annualized rate of salary as of June 30, 2020, or
(ii) the Tier 1 employee's annualized rate of salary
immediately preceding the expiration, renewal, or amendment of
an employment contract or collective bargaining agreement in
effect on the effective date of this Section. For a person
returning to active service as a Tier 1 employee after June 30,
2020, however, "base pay" means the employee's annualized rate
of salary as of the employee's last date of service prior to
July 1, 2020. The System shall calculate the base pay of each
Tier 1 employee pursuant to this Section.
(40 ILCS 5/16-122.9 new)
Sec. 16-122.9. Election by Tier 1 employees.
(a) Each active Tier 1 employee shall make an irrevocable
election either:
(1) to agree to delay his or her eligibility for
automatic annual increases in retirement annuity as
provided in subsection (a-1) of Section 16-133.1 or
subsection (b-1) of Section 16-136.1, whichever is
applicable, and to have the amount of the automatic annual

HB3524 - 132 - LRB101 07948 RPS 53003 b
increases in his or her retirement annuity and survivor
benefit that are otherwise provided for in this Article
calculated, instead, as provided in subsection (a-1) of
Section 16-133.1 or subsection (b-1) of Section 16-136.1,
whichever is applicable; or
(2) to not agree to paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each active Tier 1 employee no earlier than January 1,
2020 and no later than March 31, 2020, except that:
(i) a person who becomes a Tier 1 employee under this
Article on or after February 1, 2020 must make the election
under this subsection (a) within 60 days after becoming a
Tier 1 employee; and
(ii) a person who returns to active service as a Tier 1
employee under this Article on or after February 1, 2020
and has not yet made an election under this Section must
make the election under this subsection (a) within 60 days
after returning to active service as a Tier 1 employee.
If a Tier 1 employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) If this Section is enjoined or stayed by an Illinois
court or a court of competent jurisdiction pending the entry of
a final and unappealable decision, and this Section is
determined to be constitutional or otherwise valid by a final

HB3524 - 133 - LRB101 07948 RPS 53003 b
unappealable decision of an Illinois court or a court of
competent jurisdiction, then the election procedure set forth
in subsection (a) of this Section shall commence on the 180th
calendar day after the date of the issuance of the final
unappealable decision and shall conclude at the end of the
270th calendar day after that date.
(a-10) All elections under subsection (a) that are made or
deemed to be made before July 1, 2020 shall take effect on July
1, 2020. Elections that are made or deemed to be made on or
after July 1, 2020 shall take effect on the first day of the
month following the month in which the election is made or
deemed to be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
an employer shall be expressly and irrevocably prohibited from
offering any future increases in income to a Tier 1 employee
who has made an election under paragraph (1) of subsection (a)
of this Section on the condition of not constituting salary
under Section 16-121.
As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
each Tier 1 employee who has made an election under paragraph
(1) of subsection (a) of this Section shall receive a
consideration payment equal to 10% of the contributions made by

HB3524 - 134 - LRB101 07948 RPS 53003 b
or on behalf of the employee under paragraphs (1), (2), and (3)
of subsection (a) of Section 16-152 before the effective date
of that election. The State Comptroller shall pay the
consideration payment to the Tier 1 employee out of funds
appropriated for that purpose under Section 1.10 of the State
Pension Funds Continuing Appropriation Act. The System shall
calculate the amount of each consideration payment and, by July
1, 2020, shall certify to the State Comptroller the amount of
the consideration payment, together with the name, address, and
any other available payment information of the Tier 1 employee
as found in the records of the System. The System shall make
additional calculations and certifications of consideration
payments to the State Comptroller as the System deems
necessary.
(c) A Tier 1 employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to paragraph (1) of subsection (a) of this Section.
However, each future increase in income offered by an employer
under this Article to a Tier 1 employee who has made the
election under paragraph (2) of subsection (a) of this Section
shall be offered by the employer expressly and irrevocably on
the condition of not constituting salary under Section 16-121
and that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to
that condition.
(d) The System shall make a good faith effort to contact

HB3524 - 135 - LRB101 07948 RPS 53003 b
each Tier 1 employee subject to this Section. The System shall
mail information describing the required election to each Tier
1 employee by United States Postal Service mail to his or her
last known address on file with the System. If the Tier 1
employee is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details
in a regularly published newsletter or other existing public
forum.
Tier 1 employees who are subject to this Section shall be
provided with an election packet containing information
regarding their options, as well as the forms necessary to make
the required election. Upon request, the System shall offer
Tier 1 employees an opportunity to receive information from the
System before making the required election. The information may
consist of video materials, group presentations, individual
consultation with a member or authorized representative of the
System in person or by telephone or other electronic means, or
any combination of those methods. The System shall not provide
advice or counseling with respect to which election a Tier 1
employee should make or specific to the legal or tax
circumstances of or consequences to the Tier 1 employee.
The System shall inform Tier 1 employees in the election
packet required under this subsection that the Tier 1 employee
may also wish to obtain information and counsel relating to the
election required under this Section from any other available

HB3524 - 136 - LRB101 07948 RPS 53003 b
source, including, but not limited to, labor organizations and
private counsel.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member regarding the
elections under this Section. The System shall coordinate with
the Illinois Department of Central Management Services and each
other retirement system administering an election in
accordance with this amendatory Act of the 101st General
Assembly to provide information concerning the impact of the
election set forth in this Section.
(e) Notwithstanding any other provision of law, an employer
under this Article is required to offer each future increase in
income expressly and irrevocably on the condition of not
constituting "salary" under Section 16-121 to any Tier 1
employee who has made an election under paragraph (2) of
subsection (a) of this Section. The offer shall also provide
that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to the
condition set forth in this subsection.
For purposes of legislative intent, the condition set forth
in this subsection shall be construed in a manner that ensures
that the condition is not violated or circumvented through any
contrivance of any kind.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.

HB3524 - 137 - LRB101 07948 RPS 53003 b
(g) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986.
(h) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 16-133.1. Automatic annual increase in annuity.
(a) Each member with creditable service and retiring on or
after August 26, 1969 is entitled to the automatic annual
increases in annuity provided under this Section while
receiving a retirement annuity or disability retirement
annuity from the system.
Except as otherwise provided in subsection (a-1), an An
annuitant shall first be entitled to an initial increase under
this Section on the January 1 next following the first
anniversary of retirement, or January 1 of the year next
following attainment of age 61, whichever is later. At such

HB3524 - 138 - LRB101 07948 RPS 53003 b
time, the system shall pay an initial increase determined as
follows:
(1) 1.5% of the originally granted retirement annuity
or disability retirement annuity multiplied by the number
of years elapsed, if any, from the date of retirement until
January 1, 1972, plus
(2) 2% of the originally granted annuity multiplied by
the number of years elapsed, if any, from the date of
retirement or January 1, 1972, whichever is later, until
January 1, 1978, plus
(3) 3% of the originally granted annuity multiplied by
the number of years elapsed from the date of retirement or
January 1, 1978, whichever is later, until the effective
date of the initial increase.
However, the initial annual increase calculated under this
Section for the recipient of a disability retirement annuity
granted under Section 16-149.2 shall be reduced by an amount
equal to the total of all increases in that annuity received
under Section 16-149.5 (but not exceeding 100% of the amount of
the initial increase otherwise provided under this Section).
Except as otherwise provided in subsection (a-1),
following Following the initial increase, automatic annual
increases in annuity shall be payable on each January 1
thereafter during the lifetime of the annuitant, determined as
a percentage of the originally granted retirement annuity or
disability retirement annuity for increases granted prior to

HB3524 - 139 - LRB101 07948 RPS 53003 b
January 1, 1990, and calculated as a percentage of the total
amount of annuity, including previous increases under this
Section, for increases granted on or after January 1, 1990, as
follows: 1.5% for periods prior to January 1, 1972, 2% for
periods after December 31, 1971 and prior to January 1, 1978,
and 3% for periods after December 31, 1977.
(a-1) Notwithstanding any other provision of this Article,
for a Tier 1 employee who made the election under paragraph (1)
of subsection (a) of Section 16-122.9:
(1) The initial increase in retirement annuity under
this Section shall occur on the January 1 occurring either
on or after the attainment of age 67 or the fifth
anniversary of the annuity start date, whichever is
earlier.
(2) The amount of each automatic annual increase in
retirement annuity and survivor benefit occurring on or
after the effective date of that election shall be
calculated as a percentage of the originally granted
retirement annuity or survivor benefit, equal to 3% or
one-half the annual unadjusted percentage increase (but
not less than zero) in the consumer price index-u for the
12 months ending with the September preceding each November
1, whichever is less. If the annual unadjusted percentage
change in the consumer price index-u for the 12 months
ending with the September preceding each November 1 is zero
or there is a decrease, then the annuity shall not be

HB3524 - 140 - LRB101 07948 RPS 53003 b
increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the board of the retirement
system by November 1 of each year.
(b) The automatic annual increases in annuity provided
under this Section shall not be applicable unless a member has
made contributions toward such increases for a period
equivalent to one full year of creditable service. If a member
contributes for service performed after August 26, 1969 but the
member becomes an annuitant before such contributions amount to
one full year's contributions based on the salary at the date
of retirement, he or she may pay the necessary balance of the
contributions to the system and be eligible for the automatic
annual increases in annuity provided under this Section.
(c) Each member shall make contributions toward the cost of
the automatic annual increases in annuity as provided under
Section 16-152.
(d) An annuitant receiving a retirement annuity or
disability retirement annuity on July 1, 1969, who subsequently
re-enters service as a teacher is eligible for the automatic

HB3524 - 141 - LRB101 07948 RPS 53003 b
annual increases in annuity provided under this Section if he
or she renders at least one year of creditable service
following the latest re-entry.
(e) In addition to the automatic annual increases in
annuity provided under this Section, an annuitant who meets the
service requirements of this Section and whose retirement
annuity or disability retirement annuity began on or before
January 1, 1971 shall receive, on January 1, 1981, an increase
in the annuity then being paid of one dollar per month for each
year of creditable service. On January 1, 1982, an annuitant
whose retirement annuity or disability retirement annuity
began on or before January 1, 1977 shall receive an increase in
the annuity then being paid of one dollar per month for each
year of creditable service.
On January 1, 1987, any annuitant whose retirement annuity
began on or before January 1, 1977, shall receive an increase
in the monthly retirement annuity equal to 8¢ per year of
creditable service times the number of years that have elapsed
since the annuity began.
(Source: P.A. 91-927, eff. 12-14-00.)
(40 ILCS 5/16-136.1) (from Ch. 108 1/2, par. 16-136.1)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 16-136.1. Annual increase for certain annuitants.
(a) Any annuitant receiving a retirement annuity on June

HB3524 - 142 - LRB101 07948 RPS 53003 b
30, 1969 and any member retiring after June 30, 1969 shall be
eligible for the annual increases provided under this Section
provided the annuitant is ineligible for the automatic annual
increase in annuity provided under Section 16-133.1, and
provided further that (1) retirement occurred at age 55 or over
and was based on 5 or more years of creditable service or (2)
if retirement occurred prior to age 55, the retirement annuity
was based on 20 or more years of creditable service.
(b) Except as otherwise provided in subsection (b-1), an An
annuitant entitled to increases under this Section shall be
entitled to the initial increase as of the later of: (1)
January 1 following attainment of age 65, (2) January 1
following the first anniversary of retirement, or (3) the first
day of the month following receipt of the required qualifying
contribution from the annuitant. The initial monthly increase
shall be computed on the basis of the period elapsed between
the later of the date of last retirement or attainment of age
50 and the date of qualification for the initial increase, at
the rate of 1 1/2% of the original monthly retirement annuity
per year for periods prior to September 1, 1971, and at the
rate of 2% per year for periods between September 1, 1971 and
September 1, 1978, and at the rate of 3% per year for periods
thereafter.
Except as otherwise provided in subsection (b-1), if
applicable, an An annuitant who has received an initial
increase under this Section, shall be entitled, on each January

HB3524 - 143 - LRB101 07948 RPS 53003 b
1 following the granting of the initial increase, to an
increase of 3% of the original monthly retirement annuity for
increases granted prior to January 1, 1990, and equal to 3% of
the total annuity, including previous increases under this
Section, for increases granted on or after January 1, 1990. The
original monthly retirement annuity for computations under
this subsection (b) shall be considered to be $83.34 for any
annuitant entitled to benefits under Section 16-134. The
minimum original disability retirement annuity for
computations under this subsection (b) shall be considered to
be $33.34 per month for any annuitant retired on account of
disability.
(b-1) Notwithstanding any other provision of this Article,
for a Tier 1 employee who made the election under paragraph (1)
of subsection (a) of Section 16-122.9:
(1) The initial increase in retirement annuity under
this Section shall occur on the January 1 occurring either
on or after the attainment of age 67 or the fifth
anniversary of the annuity start date, whichever is
earlier.
(2) The amount of each automatic annual increase in
retirement annuity or survivor benefit occurring on or
after the effective date of that election shall be
calculated as a percentage of the originally granted
retirement annuity or survivor benefit, equal to 3% or
one-half the annual unadjusted percentage increase (but

HB3524 - 144 - LRB101 07948 RPS 53003 b
not less than zero) in the consumer price index-u for the
12 months ending with the September preceding each November
1, whichever is less. If the annual unadjusted percentage
change in the consumer price index-u for the 12 months
ending with the September preceding each November 1 is zero
or there is a decrease, then the annuity shall not be
increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the board of the retirement
system by November 1 of each year.
(c) An annuitant who otherwise qualifies for annual
increases under this Section must make a one-time payment of 1%
of the monthly final average salary for each full year of the
creditable service forming the basis of the retirement annuity
or, if the retirement annuity was not computed using final
average salary, 1% of the original monthly retirement annuity
for each full year of service forming the basis of the
retirement annuity.
(d) In addition to other increases which may be provided by
this Section, regardless of creditable service, annuitants not

HB3524 - 145 - LRB101 07948 RPS 53003 b
meeting the service requirements of Section 16-133.1 and whose
retirement annuity began on or before January 1, 1971 shall
receive, on January 1, 1981, an increase in the retirement
annuity then being paid of one dollar per month for each year
of creditable service forming the basis of the retirement
allowance. On January 1, 1982, annuitants whose retirement
annuity began on or before January 1, 1977, shall receive an
increase in the retirement annuity then being paid of one
dollar per month for each year of creditable service.
On January 1, 1987, any annuitant whose retirement annuity
began on or before January 1, 1977, shall receive an increase
in the monthly retirement annuity equal to 8¢ per year of
creditable service times the number of years that have elapsed
since the annuity began.
(Source: P.A. 86-273.)
(40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
(Text of Section WITHOUT the changes made by P.A. 98-599,
which has been held unconstitutional)
Sec. 16-152. Contributions by members.
(a) Except as otherwise provided in subsection (a-5), each
Each member shall make contributions for membership service to
this System as follows:
(1) Effective July 1, 1998, contributions of 7.50% of
salary towards the cost of the retirement annuity. Such
contributions shall be deemed "normal contributions".

HB3524 - 146 - LRB101 07948 RPS 53003 b
(2) Effective July 1, 1969, contributions of 1/2 of 1%
of salary toward the cost of the automatic annual increase
in retirement annuity provided under Section 16-133.1.
(3) Effective July 24, 1959, contributions of 1% of
salary towards the cost of survivor benefits. Such
contributions shall not be credited to the individual
account of the member and shall not be subject to refund
except as provided under Section 16-143.2.
(4) Effective July 1, 2005, contributions of 0.40% of
salary toward the cost of the early retirement without
discount option provided under Section 16-133.2. This
contribution shall cease upon termination of the early
retirement without discount option as provided in Section
16-133.2.
(a-5) Beginning July 1, 2020 or the effective date of the
Tier 1 employee's election under paragraph (1) of subsection
(a) of Section 16-122.9, whichever is later, in lieu of the
contributions otherwise required under subsection (a), each
Tier 1 employee who made the election under paragraph (1) of
subsection (a) of Section 16-122.9 shall make contributions as
follows:
(1) Contributions of 7.50% of salary towards the cost
of the retirement annuity. Such contributions shall be
deemed "normal contributions".
(2) Contributions of 0.60% towards the cost of survivor
benefits. Such contributions shall not be credited to the

HB3524 - 147 - LRB101 07948 RPS 53003 b
individual account of the member and shall not be subject
to refund except as provided in Section 16-143.2.
(3) Contributions of 0.40% of salary toward the cost of
the early retirement without discount option provided
under Section 16-133.2. This contribution shall cease upon
termination of the early retirement without discount
option as provided in Section 16-133.2.
(b) The minimum required contribution for any year of
full-time teaching service shall be $192.
(c) Contributions shall not be required of any annuitant
receiving a retirement annuity who is given employment as
permitted under Section 16-118 or 16-150.1.
(d) A person who (i) was a member before July 1, 1998, (ii)
retires with more than 34 years of creditable service, and
(iii) does not elect to qualify for the augmented rate under
Section 16-129.1 shall be entitled, at the time of retirement,
to receive a partial refund of contributions made under this
Section for service occurring after the later of June 30, 1998
or attainment of 34 years of creditable service, in an amount
equal to 1.00% of the salary upon which those contributions
were based.
(e) A member's contributions toward the cost of early
retirement without discount made under item (a)(4) of this
Section shall not be refunded if the member has elected early
retirement without discount under Section 16-133.2 and has
begun to receive a retirement annuity under this Article

HB3524 - 148 - LRB101 07948 RPS 53003 b
calculated in accordance with that election. Otherwise, a
member's contributions toward the cost of early retirement
without discount made under item (a)(4) of this Section shall
be refunded according to whichever one of the following
circumstances occurs first:
(1) The contributions shall be refunded to the member,
without interest, within 120 days after the member's
retirement annuity commences, if the member does not elect
early retirement without discount under Section 16-133.2.
(2) The contributions shall be included, without
interest, in any refund claimed by the member under Section
16-151.
(3) The contributions shall be refunded to the member's
designated beneficiary (or if there is no beneficiary, to
the member's estate), without interest, if the member dies
without having begun to receive a retirement annuity under
this Article.
(4) The contributions shall be refunded to the member,
without interest, if the early retirement without discount
option provided under subsection (d) of Section 16-133.2 is
terminated. In that event, the System shall provide to the
member, within 120 days after the option is terminated, an
application for a refund of those contributions.
(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 99-642,
eff. 7-28-16.)

HB3524 - 149 - LRB101 07948 RPS 53003 b
(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
Sec. 16-158. Contributions by State and other employing
units.
(a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, 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
(b-3).
(a-1) Annually, on or before November 15 until November 15,
2011, the Board shall certify to the Governor the amount of the
required State contribution for the coming fiscal year. The
certification under this subsection (a-1) shall include a copy
of the actuarial recommendations upon which it is based and
shall specifically identify the System's projected State
normal cost for that fiscal year.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the

HB3524 - 150 - LRB101 07948 RPS 53003 b
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by Public Act 94-4.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions. On or before
January 15, 2013 and each January 15 thereafter, the Board

HB3524 - 151 - LRB101 07948 RPS 53003 b
shall certify to the Governor and the General Assembly the
amount of the required State contribution for the next fiscal
year. The Board's certification must note any deviations from
the State Actuary's recommended changes, the reason or reasons
for not following the State Actuary's recommended changes, and
the fiscal impact of not following the State Actuary's
recommended changes on the required State contribution.
(a-10) By November 1, 2017, the Board shall recalculate and
recertify to the State Actuary, the Governor, and the General
Assembly the amount of the State contribution to the System for
State fiscal year 2018, taking into account the changes in
required State contributions made by Public Act 100-23. The
State Actuary shall review the assumptions and valuations
underlying the Board's revised certification and issue a
preliminary report concerning the proposed recertification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions. The Board's
final certification must note any deviations from the State
Actuary's recommended changes, the reason or reasons for not
following the State Actuary's recommended changes, and the
fiscal impact of not following the State Actuary's recommended
changes on the required State contribution.
(a-15) On or after June 15, 2019, but no later than June
30, 2019, the Board shall recalculate and recertify to the
Governor and the General Assembly the amount of the State

HB3524 - 152 - LRB101 07948 RPS 53003 b
contribution to the System for State fiscal year 2019, taking
into account the changes in required State contributions made
by Public Act 100-587 this amendatory Act of the 100th General
Assembly. The recalculation shall be made using assumptions
adopted by the Board for the original fiscal year 2019
certification. The monthly voucher for the 12th month of fiscal
year 2019 shall be paid by the Comptroller after the
recertification required pursuant to this subsection is
submitted to the Governor, Comptroller, and General Assembly.
The recertification submitted to the General Assembly shall be
filed with the Clerk of the House of Representatives and the
Secretary of the Senate in electronic form only, in the manner
that the Clerk and the Secretary shall direct.
(a-20) On or before May 1, 2020, the Board shall
recalculate and recertify to the Governor and the General
Assembly the amount of the required State contribution to the
System for State fiscal year 2021, taking into account the
effect on the System's liabilities of the elections made under
Section 16-122.9.
On or before October 1, 2020, the Board shall recalculate
and recertify to the Governor and the General Assembly the
amount of the required State contribution to the System for
State fiscal year 2021, taking into account the reduction
specified under item (3) of subsection (b-3) of this Section.
(b) Through State fiscal year 1995, the State contributions
shall be paid to the System in accordance with Section 18-7 of

HB3524 - 153 - LRB101 07948 RPS 53003 b
the School Code.
(b-1) Beginning in State fiscal year 1996, on the 15th day
of each month, or as soon thereafter as may be practicable, the
Board shall submit vouchers for payment of State contributions
to the System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a-1). From March 5, 2004 (the effective date of Public Act
93-665) through June 30, 2004, the Board shall not submit
vouchers for the remainder of fiscal year 2004 in excess of the
fiscal year 2004 certified contribution amount determined
under this Section after taking into consideration the transfer
to the System under subsection (a) of Section 6z-61 of the
State Finance Act. These vouchers shall be paid by the State
Comptroller and Treasurer by warrants drawn on the funds
appropriated to the System for that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(b-2) Allocations from the Common School Fund apportioned
to school districts not coming under this System shall not be

HB3524 - 154 - LRB101 07948 RPS 53003 b
diminished or affected by the provisions of this Article.
(b-3) For State fiscal years 2012 through 2045 (except as
otherwise provided for fiscal year 2021), 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 year 2021:
(1) The initial calculation and certification shall be
based on the amount determined above.
(2) For purposes of the recertification due on or
before May 1, 2020, the recalculation of the required State
contribution for fiscal year 2021 shall take into account
the effect on the System's liabilities of the elections
made under Section 16-122.9.
(3) For purposes of the recertification due on or
before October 1, 2020, the total required State
contribution for fiscal year 2021 shall be reduced by the
amount of the consideration payments made to Tier 1
employees who made the election under paragraph (1) of
subsection (a) of Section 16-122.9.

HB3524 - 155 - LRB101 07948 RPS 53003 b
For each of State fiscal years 2018, 2019, and 2020, the
State shall make an additional contribution to the System equal
to 2% of the total payroll of each employee who is deemed to
have elected the benefits under Section 1-161 or who has made
the election under subsection (c) of Section 1-161.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it at
the resulting annual rate in each of the remaining fiscal
years in that 5-year period.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable

HB3524 - 156 - LRB101 07948 RPS 53003 b
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; except that in the
following specified State fiscal years, the State contribution
to the System shall not be less than the following indicated
percentages of the applicable employee payroll, even if the
indicated percentage will produce a State contribution in
excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary
certification made under subsection (a-1) before May 27, 1998
(the effective date of Public Act 90-582): 10.02% in FY 1999;
10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86%
in FY 2003; and 13.56% in FY 2004.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$534,627,700.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$738,014,500.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the

HB3524 - 157 - LRB101 07948 RPS 53003 b
total required State contribution for State fiscal year 2010 is
$2,089,268,000 and shall be made from the proceeds of bonds
sold in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2010, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to subsection (a-1) of this Section and shall be made
from the proceeds of bonds sold in fiscal year 2011 pursuant to
Section 7.2 of the General Obligation Bond Act, less (i) the
pro rata share of bond sale expenses determined by the System's
share of total bond proceeds, (ii) any amounts received from
the Common School Fund in fiscal year 2011, and (iii) any
reduction in bond proceeds due to the issuance of discounted
bonds, if applicable. This amount shall include, in addition to
the amount certified by the System, an amount necessary to meet
employer contributions required by the State as an employer
under paragraph (e) of this Section, which may also be used by
the System for contributions required by paragraph (a) of
Section 16-127.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to

HB3524 - 158 - LRB101 07948 RPS 53003 b
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under subsection (a-1), shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is

HB3524 - 159 - LRB101 07948 RPS 53003 b
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(b-4) Beginning in fiscal year 2018, each employer under
this Article shall pay to the System a required contribution
determined as a percentage of projected payroll and sufficient
to produce an annual amount equal to:
(i) for each of fiscal years 2018, 2019, and 2020, the
defined benefit normal cost of the defined benefit plan,
less the employee contribution, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (b) of Section 1-161; for fiscal
year 2021 and each fiscal year thereafter, the defined
benefit normal cost of the defined benefit plan, less the
employee contribution, plus 2%, for each employee of that

HB3524 - 160 - LRB101 07948 RPS 53003 b
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (b) of Section 1-161; plus
(ii) the amount required for that fiscal year to
amortize any unfunded actuarial accrued liability
associated with the present value of liabilities
attributable to the employer's account under Section
16-158.3, determined as a level percentage of payroll over
a 30-year rolling amortization period.
In determining contributions required under item (i) of
this subsection, the System shall determine an aggregate rate
for all employers, expressed as a percentage of projected
payroll.
In determining the contributions required under item (ii)
of this subsection, the amount shall be computed by the System
on the basis of the actuarial assumptions and tables used in
the most recent actuarial valuation of the System that is
available at the time of the computation.
The contributions required under this subsection (b-4)
shall be paid by an employer concurrently with that employer's
payroll payment period. The State, as the actual employer of an
employee, shall make the required contributions under this
subsection.
(c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and all

HB3524 - 161 - LRB101 07948 RPS 53003 b
expenses in connection with the administration and operation
thereof, are obligations of the State.
If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs based
upon that service, which, beginning July 1, 2017, shall be at a
rate, expressed as a percentage of salary, equal to the total
employer's normal cost, expressed as a percentage of payroll,
as determined by the System. Employer contributions, based on
salary paid to members from federal funds, may be forwarded by
the distributing agency of the State of Illinois to the System
prior to allocation, in an amount determined in accordance with
guidelines established by such agency and the System. Any
contribution for fiscal year 2015 collected as a result of the
change made by Public Act 98-674 shall be considered a State
contribution under subsection (b-3) of this Section.
(d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be forwarded
monthly in accordance with guidelines established by the
System.
However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)

HB3524 - 162 - LRB101 07948 RPS 53003 b
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
(1) Beginning July 1, 1998 through June 30, 1999, the
employer contribution shall be equal to 0.3% of each
teacher's salary.
(2) Beginning July 1, 1999 and thereafter, the employer
contribution shall be equal to 0.58% of each teacher's
salary.
The school district or other employing unit may pay these
employer contributions out of any source of funding available
for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
These employer contributions are intended to offset a
portion of the cost to the System of the increases in

HB3524 - 163 - LRB101 07948 RPS 53003 b
retirement benefits resulting from Public Act 90-582.
Each employer of teachers is entitled to a credit against
the contributions required under this subsection (e) with
respect to salaries paid to teachers for the period January 1,
2002 through June 30, 2003, equal to the amount paid by that
employer under subsection (a-5) of Section 6.6 of the State
Employees Group Insurance Act of 1971 with respect to salaries
paid to teachers for that period.
The additional 1% employee contribution required under
Section 16-152 by Public Act 90-582 is the responsibility of
the teacher and not the teacher's employer, unless the employer
agrees, through collective bargaining or otherwise, to make the
contribution on behalf of the teacher.
If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)
for the balance of the term of that contract. The employer and
the employee organization shall jointly certify to the System
the existence of the contractual requirement, in such form as
the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
(f) For school years beginning on or after June 1, 2005 and

HB3524 - 164 - LRB101 07948 RPS 53003 b
before July 1, 2018 and for salary paid to a teacher under a
contract or collective bargaining agreement entered into,
amended, or renewed before June 4, 2018 (the effective date of
Public Act 100-587) this amendatory Act of the 100th General
Assembly, if the amount of a teacher's salary for any school
year used to determine final average salary exceeds the
member's annual full-time salary rate with the same employer
for the previous school year by more than 6%, the teacher's
employer shall pay to the System, in addition to all other
payments required under this Section and in accordance with
guidelines established by the System, the present value of the
increase in benefits resulting from the portion of the increase
in salary that is in excess of 6%. This present value shall be
computed by the System on the basis of the actuarial
assumptions and tables used in the most recent actuarial
valuation of the System that is available at the time of the
computation. If a teacher's salary for the 2005-2006 school
year is used to determine final average salary under this
subsection (f), then the changes made to this subsection (f) by
Public Act 94-1057 shall apply in calculating whether the
increase in his or her salary is in excess of 6%. For the
purposes of this Section, change in employment under Section
10-21.12 of the School Code on or after June 1, 2005 shall
constitute a change in employer. The System may require the
employer to provide any pertinent information or
documentation. The changes made to this subsection (f) by

HB3524 - 165 - LRB101 07948 RPS 53003 b
Public Act 94-1111 apply without regard to whether the teacher
was in service on or after its effective date.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculations used to determine the amount
due. If the employer disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the System
in writing for a recalculation. The application must specify in
detail the grounds of the dispute and, if the employer asserts
that the calculation is subject to subsection (g) or (h) of
this Section or that subsection (f-1) of this Section applies,
must include an affidavit setting forth and attesting to all
facts within the employer's knowledge that are pertinent to the
applicability of that subsection. Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.

HB3524 - 166 - LRB101 07948 RPS 53003 b
(f-1) For school years beginning on or after July 1, 2018
and for salary paid to a teacher under a contract or collective
bargaining agreement entered into, amended, or renewed on or
after June 4, 2018 (the effective date of Public Act 100-587)
this amendatory Act of the 100th General Assembly, if the
amount of a teacher's salary for any school year used to
determine final average salary exceeds the member's annual
full-time salary rate with the same employer for the previous
school year by more than 3%, then the teacher's employer shall
pay to the System, in addition to all other payments required
under this Section and in accordance with guidelines
established by the System, the present value of the increase in
benefits resulting from the portion of the increase in salary
that is in excess of 3%. This present value shall be computed
by the System on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the
System that is available at the time of the computation. The
System may require the employer to provide any pertinent
information or documentation.
Whenever it determines that a payment is or may be required
under this subsection (f-1), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
shall, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must

HB3524 - 167 - LRB101 07948 RPS 53003 b
specify in detail the grounds of the dispute and, if the
employer asserts that subsection (f) of this Section applies,
must include an affidavit setting forth and attesting to all
facts within the employer's knowledge that are pertinent to the
applicability of subsection (f). Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
(f-1) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest shall
be charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
(g) This subsection (g) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to teachers
under contracts or collective bargaining agreements entered
into, amended, or renewed before June 1, 2005.
When assessing payment for any amount due under subsection

HB3524 - 168 - LRB101 07948 RPS 53003 b
(f), the System shall exclude salary increases paid to a
teacher at a time when the teacher is 10 or more years from
retirement eligibility under Section 16-132 or 16-133.2.
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases resulting from
overload work, including summer school, when the school
district has certified to the System, and the System has
approved the certification, that (i) the overload work is for
the sole purpose of classroom instruction in excess of the
standard number of classes for a full-time teacher in a school
district during a school year and (ii) the salary increases are
equal to or less than the rate of pay for classroom instruction
computed on the teacher's current salary and work schedule.
When assessing payment for any amount due under subsection
(f), the System shall exclude a salary increase resulting from
a promotion (i) for which the employee is required to hold a
certificate or supervisory endorsement issued by the State
Teacher Certification Board that is a different certification
or supervisory endorsement than is required for the teacher's
previous position and (ii) to a position that has existed and
been filled by a member for no less than one complete academic
year and the salary increase from the promotion is an increase
that results in an amount no greater than the lesser of the
average salary paid for other similar positions in the district
requiring the same certification or the amount stipulated in
the collective bargaining agreement for a similar position

HB3524 - 169 - LRB101 07948 RPS 53003 b
requiring the same certification.
When assessing payment for any amount due under subsection
(f), the System shall exclude any payment to the teacher from
the State of Illinois or the State Board of Education over
which the employer does not have discretion, notwithstanding
that the payment is included in the computation of final
average salary.
(h) When assessing payment for any amount due under
subsection (f), the System shall exclude any salary increase
described in subsection (g) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (f) of this Section.
(i) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.

HB3524 - 170 - LRB101 07948 RPS 53003 b
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(i-5) For school years beginning on or after July 1, 2017,
if the amount of a participant's salary for any school year
exceeds the amount of the salary set for the Governor, the
participant's employer shall pay to the System, in addition to
all other payments required under this Section and in
accordance with guidelines established by the System, an amount
determined by the System to be equal to the employer normal
cost, as established by the System and expressed as a total
percentage of payroll, multiplied by the amount of salary in
excess of the amount of the salary set for the Governor. This
amount shall be computed by the System on the basis of the
actuarial assumptions and tables used in the most recent
actuarial valuation of the System that is available at the time
of the computation. The System may require the employer to
provide any pertinent information or documentation.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculations used to determine the amount
due. If the employer disputes the amount of the bill, it may,

HB3524 - 171 - LRB101 07948 RPS 53003 b
within 30 days after receipt of the bill, apply to the System
in writing for a recalculation. The application must specify in
detail the grounds of the dispute. Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
(j) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, 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.
(k) For purposes of determining the required State

HB3524 - 172 - LRB101 07948 RPS 53003 b
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(l) If Section 16-122.9 is determined to be
unconstitutional or otherwise invalid by a final unappealable
decision of an Illinois court or a court of competent
jurisdiction, then the changes made to this Section by this
amendatory Act of the 101st General Assembly shall not take
effect and are repealed by operation of law.
(Source: P.A. 100-23, eff. 7-6-17; 100-340, eff. 8-25-17;
100-587, eff. 6-4-18; 100-624, eff. 7-20-18; 100-863, eff.
8-14-18; revised 10-4-18.)
(40 ILCS 5/16-203)
Sec. 16-203. Application and expiration of new benefit
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
95-910, Public Act 100-23, Public Act 100-587, Public Act
100-743, Public Act 100-769, or this amendatory Act of the

HB3524 - 173 - LRB101 07948 RPS 53003 b
101st General Assembly or by this amendatory Act of the 100th
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
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

HB3524 - 174 - LRB101 07948 RPS 53003 b
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
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
100-743, eff. 8-10-18; 100-769, eff. 8-10-18; revised
10-15-18.)
(40 ILCS 5/17-106.05 new)
Sec. 17-106.05. Tier 1 employee. "Tier 1 employee": A
teacher under this Article who first became a member or
participant before January 1, 2011 under any reciprocal
retirement system or pension fund established under this Code

HB3524 - 175 - LRB101 07948 RPS 53003 b
other than a retirement system or pension fund established
under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
the purposes of the election under Section 17-115.5, "Tier 1
employee" does not include a teacher under this Article who
would qualify as a Tier 1 employee but who has made an
irrevocable election on or before June 1, 2019 to retire from
service pursuant to the terms of an employment contract or a
collective bargaining agreement in effect on June 1, 2019,
excluding any extension, amendment, or renewal of that
agreement after that date, and has notified the Fund of that
election.
(40 ILCS 5/17-113.4 new)
Sec. 17-113.4. Salary. "Salary" means any income in any
form that qualifies as "average salary" or "annual rate of
salary" for purposes of paragraph (1) of subsection (c) of
Section 17-116 and "salary" for payroll deduction purposes
under Sections 17-130, 17-131, and 17-132.
Notwithstanding any other provision of this Section,
"salary" does not include any future increase in income that is
offered by an employer for service as a Tier 1 employee under
this Article pursuant to the condition set forth in subsection
(c) of Section 17-115.5 and accepted under that condition by a
Tier 1 employee who has made the election under paragraph (2)
of subsection (a) of Section 17-115.5.

HB3524 - 176 - LRB101 07948 RPS 53003 b
(40 ILCS 5/17-113.5 new)
Sec. 17-113.5. Future increase in income. "Future increase
in income" means an increase to a Tier 1 employee's base pay
that is offered by an employer to the Tier 1 employee for
service under this Article after June 30, 2020 that qualifies
as "salary", as defined in Section 17-113.4, or would qualify
as "salary" but for the fact that it was offered to and
accepted by the Tier 1 employee under the condition set forth
in subsection (c) of Section 17-115.5. The term "future
increase in income" includes an increase to a Tier 1 employee's
base pay that is paid to the Tier 1 employee pursuant to an
extension, amendment, or renewal of any employment contract or
collective bargaining agreement after the effective date of
this Section.
(40 ILCS 5/17-113.6 new)
Sec. 17-113.6. Base pay. As used in Section 17-113.5 of
this Code, "base pay" means the greater of either (i) the Tier
1 employee's annualized rate of salary as of June 30, 2020, or
(ii) the Tier 1 employee's annualized rate of salary
immediately preceding the expiration, renewal, or amendment of
an employment contract or collective bargaining agreement in
effect on the effective date of this Section. For a person
returning to active service as a Tier 1 employee after June 30,
2020, however, "base pay" means the employee's annualized rate
of salary as of the employee's last date of service prior to

HB3524 - 177 - LRB101 07948 RPS 53003 b
July 1, 2020. The Fund shall calculate the base pay of each
Tier 1 employee pursuant to this Section.
(40 ILCS 5/17-115.5 new)
Sec. 17-115.5. Election by Tier 1 employees.
(a) Each active Tier 1 employee shall make an irrevocable
election either:
(1) to agree to delay his or her eligibility for
automatic annual increases in service retirement pension
as provided in Section 17-119.2 and to have the amount of
the automatic annual increases in his or her service
retirement pension and survivor's pension that are
otherwise provided for in this Article calculated,
instead, as provided in Section 17-119.2; or
(2) to not agree to paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each active Tier 1 employee no earlier than January 1,
2020 and no later than March 31, 2020, except that:
(i) a person who becomes a Tier 1 employee under this
Article on or after January 1, 2020 must make the election
under this subsection (a) within 60 days after becoming a
Tier 1 employee; and
(ii) a person who returns to active service as a Tier 1
employee under this Article on or after January 1, 2020 and
has not yet made an election under this Section must make
the election under this subsection (a) within 60 days after

HB3524 - 178 - LRB101 07948 RPS 53003 b
returning to active service as a Tier 1 employee.
If a Tier 1 employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) If this Section is enjoined or stayed by an Illinois
court or a court of competent jurisdiction pending the entry of
a final and unappealable decision, and this Section is
determined to be constitutional or otherwise valid by a final
unappealable decision of an Illinois court or a court of
competent jurisdiction, then the election procedure set forth
in subsection (a) of this Section shall commence on the 180th
calendar day after the date of the issuance of the final
unappealable decision and shall conclude at the end of the
270th calendar day after that date.
(a-10) All elections under subsection (a) that are made or
deemed to be made before July 1, 2020 shall take effect on July
1, 2020. Elections that are made or deemed to be made on or
after July 1, 2020 shall take effect on the first day of the
month following the month in which the election is made or
deemed to be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
an employer shall be expressly and irrevocably prohibited from
offering any future increases in income to a Tier 1 employee

HB3524 - 179 - LRB101 07948 RPS 53003 b
who has made an election under paragraph (1) of subsection (a)
of this Section on the condition of not constituting salary
under Section 17-113.4.
As adequate and legal consideration provided under this
amendatory Act of the 101st General Assembly for making an
election under paragraph (1) of subsection (a) of this Section,
each Tier 1 employee who has made an election under paragraph
(1) of subsection (a) of this Section shall receive a
consideration payment equal to 10% of the contributions made by
or on behalf of the employee under Section 17-130 before the
effective date of that election. The State Comptroller shall
pay the consideration payment to the Tier 1 employee out of
funds appropriated for that purpose under Section 1.10 of the
State Pension Funds Continuing Appropriation Act. The Fund
shall calculate the amount of each consideration payment and,
by July 1, 2020, shall certify to the State Comptroller the
amount of the consideration payment, together with the name,
address, and any other available payment information of the
Tier 1 employee as found in the records of the Fund. The Fund
shall make additional calculations and certifications of
consideration payments to the State Comptroller as the Fund
deems necessary.
(c) A Tier 1 employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to paragraph (1) of subsection (a) of this Section.
However, each future increase in income offered by an employer

HB3524 - 180 - LRB101 07948 RPS 53003 b
under this Article to a Tier 1 employee who has made the
election under paragraph (2) of subsection (a) of this Section
shall be offered by the employer expressly and irrevocably on
the condition of not constituting salary under Section 17-113.4
and that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to
that condition.
(d) The Fund shall make a good faith effort to contact each
Tier 1 employee subject to this Section. The Fund shall mail
information describing the required election to each Tier 1
employee by United States Postal Service mail to his or her
last known address on file with the Fund. If the Tier 1
employee is not responsive to other means of contact, it is
sufficient for the Fund to publish the details of any required
elections on its website or to publish those details in a
regularly published newsletter or other existing public forum.
Tier 1 employees who are subject to this Section shall be
provided with an election packet containing information
regarding their options, as well as the forms necessary to make
the required election. Upon request, the Fund shall offer Tier
1 employees an opportunity to receive information from the Fund
before making the required election. The information may
consist of video materials, group presentations, individual
consultation with a member or authorized representative of the
Fund in person or by telephone or other electronic means, or
any combination of those methods. The Fund shall not provide

HB3524 - 181 - LRB101 07948 RPS 53003 b
advice or counseling with respect to which election a Tier 1
employee should make or specific to the legal or tax
circumstances of or consequences to the Tier 1 employee.
The Fund shall inform Tier 1 employees in the election
packet required under this subsection that the Tier 1 employee
may also wish to obtain information and counsel relating to the
election required under this Section from any other available
source, including, but not limited to, labor organizations and
private counsel.
In no event shall the Fund, its staff, or the Board be held
liable for any information given to a member regarding the
elections under this Section. The Fund shall coordinate with
the Illinois Department of Central Management Services and each
other retirement system administering an election in
accordance with this amendatory Act of the 101st General
Assembly to provide information concerning the impact of the
election set forth in this Section.
(e) Notwithstanding any other provision of law, an employer
under this Article is required to offer each future increase in
income expressly and irrevocably on the condition of not
constituting "salary" under Section 17-113.4 to any Tier 1
employee who has made an election under paragraph (2) of
subsection (a) of this Section. The offer shall also provide
that the Tier 1 employee's acceptance of the offered future
increase in income shall constitute his or her agreement to the
condition set forth in this subsection.

HB3524 - 182 - LRB101 07948 RPS 53003 b
For purposes of legislative intent, the condition set forth
in this subsection shall be construed in a manner that ensures
that the condition is not violated or circumvented through any
contrivance of any kind.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.
(g) No provision of this Section shall be interpreted in a
way that would cause the Fund to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986.
(h) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/17-116) (from Ch. 108 1/2, par. 17-116)
Sec. 17-116. Service retirement pension.
(a) Each teacher having 20 years of service upon attainment
of age 55, or who thereafter attains age 55 shall be entitled
to a service retirement pension upon or after attainment of age
55; and each teacher in service on or after July 1, 1971, with
5 or more but less than 20 years of service shall be entitled

HB3524 - 183 - LRB101 07948 RPS 53003 b
to receive a service retirement pension upon or after
attainment of age 62.
(b) The service retirement pension for a teacher who
retires on or after June 25, 1971, at age 60 or over, shall be
calculated as follows:
(1) For creditable service earned before July 1, 1998
that has not been augmented under Section 17-119.1: 1.67%
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 of service in excess of 30, based upon average
salary as herein defined.
(2) For creditable service earned on or after July 1,
1998 by a member who has at least 30 years of creditable
service on July 1, 1998 and who does not elect to augment
service under Section 17-119.1: 2.3% of average salary for
each year of creditable service earned on or after July 1,
1998.
(3) For all other creditable service: 2.2% of average
salary for each year of creditable service.
(c) When computing such service retirement pensions, the
following conditions shall apply:
1. Average salary shall consist of the average annual
rate of salary for the 4 consecutive years of validated
service within the last 10 years of service when such
average annual rate was highest. In the determination of

HB3524 - 184 - LRB101 07948 RPS 53003 b
average salary for retirement allowance purposes, for
members who commenced employment after August 31, 1979,
that part of the salary for any year shall be excluded
which exceeds the annual full-time salary rate for the
preceding year by more than 20%. In the case of a member
who commenced employment before August 31, 1979 and who
receives salary during any year after September 1, 1983
which exceeds the annual full time salary rate for the
preceding year by more than 20%, an Employer and other
employers of eligible contributors as defined in Section
17-106 shall pay to the Fund an amount equal to the present
value of the additional service retirement pension
resulting from such excess salary. The present value of the
additional service retirement pension shall be computed by
the Board on the basis of actuarial tables adopted by the
Board. If a member elects to receive a pension from this
Fund provided by Section 20-121, his salary under the State
Universities Retirement System and the Teachers'
Retirement System of the State of Illinois shall be
considered in determining such average salary. Amounts
paid after the effective date of this amendatory Act of
1991 for unused vacation time earned after that effective
date shall not under any circumstances be included in the
calculation of average salary or the annual rate of salary
for the purposes of this Article.
2. Proportionate credit shall be given for validated

HB3524 - 185 - LRB101 07948 RPS 53003 b
service of less than one year.
3. For retirement at age 60 or over the pension shall
be payable at the full rate.
4. For separation from service below age 60 to a
minimum age of 55, the pension shall be discounted at the
rate of 1/2 of one per cent for each month that the age of
the contributor is less than 60, but a teacher may elect to
defer the effective date of pension in order to eliminate
or reduce this discount. This discount shall not be
applicable to any participant who has at least 34 years of
service or a retirement pension of at least 74.6% of
average salary on the date the retirement annuity begins.
5. No additional pension shall be granted for service
exceeding 45 years. Beginning June 26, 1971 no pension
shall exceed the greater of $1,500 per month or 75% of
average salary as herein defined.
6. Service retirement pensions shall begin on the
effective date of resignation, retirement, the day
following the close of the payroll period for which service
credit was validated, or the time the person resigning or
retiring attains age 55, or on a date elected by the
teacher, whichever shall be latest; provided that, for a
person who first becomes a member after the effective date
of this amendatory Act of the 99th General Assembly, the
benefit shall not commence more than one year prior to the
date of the Fund's receipt of an application for the

HB3524 - 186 - LRB101 07948 RPS 53003 b
benefit.
7. A member who is eligible to receive a retirement
pension of at least 74.6% of average salary and will attain
age 55 on or before December 31 during the year which
commences on July 1 shall be deemed to attain age 55 on the
preceding June 1.
8. A member retiring after the effective date of this
amendatory Act of 1998 shall receive a pension equal to 75%
of average salary if the member is qualified to receive a
retirement pension equal to at least 74.6% of average
salary under this Article or as proportional annuities
under Article 20 of this Code.
(d) Notwithstanding any other provision of this Section,
annual salary does not include any future increase in income
that is offered for service to a Tier 1 employee under this
Article pursuant to the condition set forth in subsection (c)
of Section 17-115.5 and accepted under that condition by a Tier
1 employee who has made the election under paragraph (2) of
subsection (a) of Section 17-115.5.
Notwithstanding any other provision of this Section,
annual salary does not include any consideration payment made
to a Tier 1 employee.
(Source: P.A. 99-702, eff. 7-29-16.)
(40 ILCS 5/17-119.2 new)
Sec. 17-119.2. Automatic annual increases in service

HB3524 - 187 - LRB101 07948 RPS 53003 b
retirement pension and survivor's pension for certain Tier 1
employees. Notwithstanding any other provision of this
Article, for a Tier 1 employee who made the election under
paragraph (1) of subsection (a) of Section 17-115.5:
(1) The initial increase in service retirement pension
shall occur on the January 1 occurring either on or after
the attainment of age 67 or the fifth anniversary of the
pension start date, whichever is earlier.
(2) The amount of each automatic annual increase in
service retirement pension or survivor's pension occurring
on or after the effective date of that election shall be
calculated as a percentage of the originally granted
service retirement pension or survivor's pension, equal to
3% or one-half the annual unadjusted percentage increase
(but not less than zero) in the consumer price index-u for
the 12 months ending with the September preceding each
November 1, whichever is less. If the annual unadjusted
percentage change in the consumer price index-u for the 12
months ending with the September preceding each November 1
is zero or there is a decrease, then the annuity shall not
be increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =

HB3524 - 188 - LRB101 07948 RPS 53003 b
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the Board by November 1 of
each year.
(40 ILCS 5/17-129) (from Ch. 108 1/2, par. 17-129)
Sec. 17-129. Employer contributions; deficiency in Fund.
(a) If in any fiscal year of the Board of Education ending
prior to 1997 the total amounts paid to the Fund from the Board
of Education (other than under this subsection, and other than
amounts used for making or "picking up" contributions on behalf
of teachers) and from the State do not equal the total
contributions made by or on behalf of the teachers for such
year, or if the total income of the Fund in any such fiscal
year of the Board of Education from all sources is less than
the total such expenditures by the Fund for such year, the
Board of Education shall, in the next succeeding year, in
addition to any other payment to the Fund set apart and
appropriate from moneys from its tax levy for educational
purposes, a sum sufficient to remove such deficiency or
deficiencies, and promptly pay such sum into the Fund in order
to restore any of the reserves of the Fund that may have been
so temporarily applied. Any amounts received by the Fund after
December 4, 1997 from State appropriations, including under
Section 17-127, shall be a credit against and shall fully
satisfy any obligation that may have arisen, or be claimed to

HB3524 - 189 - LRB101 07948 RPS 53003 b
have arisen, under this subsection (a) as a result of any
deficiency or deficiencies in the fiscal year of the Board of
Education ending in calendar year 1997.
(b) (i) Notwithstanding any other provision of this
Section, and notwithstanding any prior certification by the
Board under subsection (c) for fiscal year 2011, the Board of
Education's total required contribution to the Fund for fiscal
year 2011 under this Section is $187,000,000.
(ii) Notwithstanding any other provision of this Section,
the Board of Education's total required contribution to the
Fund for fiscal year 2012 under this Section is $192,000,000.
(iii) Notwithstanding any other provision of this Section,
the Board of Education's total required contribution to the
Fund for fiscal year 2013 under this Section is $196,000,000.
(iv) For fiscal years 2014 through 2059, the minimum
contribution to the Fund to be made by the Board of Education
in each fiscal year shall be an amount determined by the Fund
to be sufficient to bring the total assets of the Fund up to
90% of the total actuarial liabilities of the Fund by the end
of fiscal year 2059. In making these determinations, the
required Board of Education contribution shall be calculated
each year as a level percentage of the applicable employee
payrolls over the years remaining to and including fiscal year
2059 and shall be determined under the projected unit credit
actuarial cost method.
(v) Beginning in fiscal year 2060, the minimum Board of

HB3524 - 190 - LRB101 07948 RPS 53003 b
Education contribution for each fiscal year shall be the amount
needed to maintain the total assets of the Fund at 90% of the
total actuarial liabilities of the Fund.
(vi) Notwithstanding any other provision of this
subsection (b), for any fiscal year, the contribution to the
Fund from the Board of Education shall not be required to be in
excess of the amount calculated as needed to maintain the
assets (or cause the assets to be) at the 90% level by the end
of the fiscal year.
(vii) Any contribution by the State to or for the benefit
of the Fund, including, without limitation, as referred to
under Section 17-127, shall be a credit against any
contribution required to be made by the Board of Education
under this subsection (b).
(c) The Board shall determine the amount of Board of
Education 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, in order to
meet the minimum contribution requirements of subsections (a)
and (b). Annually, on or before February 28, the Board shall
certify to the Board of Education the amount of the required
Board of Education contribution for the coming fiscal year. The
certification shall include a copy of the actuarial
recommendations upon which it is based.
(d) On or before May 1, 2020, the Board shall recalculate
and recertify to the Board of Education the amount of the

HB3524 - 191 - LRB101 07948 RPS 53003 b
required Board of Education contribution to the Fund for fiscal
year 2021, taking into account the effect on the Fund's
liabilities of the elections made under Section 17-115.5.
(Source: P.A. 96-889, eff. 4-14-10.)
(40 ILCS 5/17-130) (from Ch. 108 1/2, par. 17-130)
Sec. 17-130. Participants' contributions by payroll
deductions.
(a) Except as provided in subsection (a-5), there There
shall be deducted from the salary of each teacher 7.50% of his
salary for service or disability retirement pension and 0.5% of
salary for the annual increase in base pension.
In addition, there shall be deducted from the salary of
each teacher 1% of his salary for survivors' and children's
pensions.
(a-5) Beginning on July 1, 2020 or the effective date of
the Tier 1 employee's election under paragraph (1) of Section
17-115.5, whichever is later, in lieu of the contributions
otherwise required under subsection (a), each Tier 1 employee
who made the election under paragraph (1) of Section 17-115.5
shall make contributions of 7.50% of salary for service or
disability retirement pension and 0.6% of salary for survivors'
and children's pensions.
(b) An Employer and any employer of eligible contributors
as defined in Section 17-106 is authorized to make the
necessary deductions from the salaries of its teachers. Such

HB3524 - 192 - LRB101 07948 RPS 53003 b
amounts shall be included as a part of the Fund. An Employer
and any employer of eligible contributors as defined in Section
17-106 shall formulate such rules and regulations as may be
necessary to give effect to the provisions of this Section.
(c) All persons employed as teachers shall, by such
employment, accept the provisions of this Article and of
Sections 34-83 to 34-85, inclusive, of "The School Code",
approved March 18, 1961, as amended, and thereupon become
contributors to the Fund in accordance with the terms thereof.
The provisions of this Article and of those Sections shall
become a part of the contract of employment.
(d) A person who (i) was a member before July 1, 1998, (ii)
retires with more than 34 years of creditable service, and
(iii) does not elect to qualify for the augmented rate under
Section 17-119.1 shall be entitled, at the time of retirement,
to receive a partial refund of contributions made under this
Section for service occurring after the later of June 30, 1998
or attainment of 34 years of creditable service, in an amount
equal to 1.00% of the salary upon which those contributions
were based.
(Source: P.A. 97-8, eff. 6-13-11.)
Section 40. The State Pension Funds Continuing
Appropriation Act is amended by adding Section 1.10 as follows:
(40 ILCS 15/1.10 new)

HB3524 - 193 - LRB101 07948 RPS 53003 b
Sec. 1.10. Appropriation for consideration payment. There
is hereby appropriated from the General Revenue Fund to the
State Comptroller, on a continuing basis, all amounts necessary
for the payment of consideration payments under subsection (b)
of Sections 2-110.3, 14-106.5, 15-132.9, 16-122.9, and
17-115.5 of the Illinois Pension Code, in the amounts certified
to the State Comptroller by the respective retirement system or
pension fund.
Section 45. The School Code is amended by changing Sections
24-1, 24-8, and 34-18.61 as follows:
(105 ILCS 5/24-1) (from Ch. 122, par. 24-1)
Sec. 24-1. Appointment-Salaries-Payment-School
month-School term.) School boards shall appoint all teachers,
determine qualifications of employment and fix the amount of
their salaries subject to any limitation set forth in this Act
and subject to any applicable restrictions in Section 16-122.9
of the Illinois Pension Code. They shall pay the wages of
teachers monthly, subject, however, to the provisions of
Section 24-21. The school month shall be the same as the
calendar month but by resolution the school board may adopt for
its use a month of 20 days, including holidays. The school term
shall consist of at least the minimum number of pupil
attendance days required by Section 10-19, any additional legal
school holidays, days of teachers' institutes, or equivalent

HB3524 - 194 - LRB101 07948 RPS 53003 b
professional educational experiences, and one or two days at
the beginning of the school term when used as a teachers'
workshop.
(Source: P.A. 80-249.)
(105 ILCS 5/24-8) (from Ch. 122, par. 24-8)
Sec. 24-8. Minimum salary. In fixing the salaries of
teachers, school boards shall pay those who serve on a
full-time basis not less than a rate for the school year that
is based upon training completed in a recognized institution of
higher learning, as follows: for the school year beginning July
1, 1980 and thereafter, less than a bachelor's degree, $9,000;
120 semester hours or more and a bachelor's degree, $10,000;
150 semester hours or more and a master's degree, $11,000.
Based upon previous public school experience in this State
or any other state, territory, dependency or possession of the
United States, or in schools operated by or under the auspices
of the United States, teachers who serve on a full-time basis
shall have their salaries increased to at least the following
amounts above the starting salary for a teacher in such
district in the same classification: with less than a
bachelor's degree, $750 after 5 years; with 120 semester hours
or more and a bachelor's degree, $1,000 after 5 years and
$1,600 after 8 years; with 150 semester hours or more and a
master's degree, $1,250 after 5 years, $2,000 after 8 years and
$2,750 after 13 years. However, any salary increase is subject

HB3524 - 195 - LRB101 07948 RPS 53003 b
to any applicable restrictions in Section 16-122.9 of the
Illinois Pension Code.
For the purpose of this Section a teacher's salary shall
include any amount paid by the school district on behalf of the
teacher, as teacher contributions, to the Teachers' Retirement
System of the State of Illinois.
If a school board establishes a schedule for teachers'
salaries based on education and experience, not inconsistent
with this Section, all certificated nurses employed by that
board shall be paid in accordance with the provisions of such
schedule (subject to any applicable restrictions in Section
16-122.9 of the Illinois Pension Code).
For purposes of this Section, a teacher who submits a
certificate of completion to the school office prior to the
first day of the school term shall be considered to have the
degree stated in such certificate.
(Source: P.A. 83-913.)
(105 ILCS 5/34-18.61 new)
Sec. 34-18.61. Future increase in income. The Board of
Education must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 17-113.5
of the Illinois Pension Code, to any person in a manner that
violates Section 17-115.5 of the Illinois Pension Code.
Section 50. The State Universities Civil Service Act is

HB3524 - 196 - LRB101 07948 RPS 53003 b
amended by changing Section 36d as follows:
(110 ILCS 70/36d) (from Ch. 24 1/2, par. 38b3)
Sec. 36d. Powers and duties of the Merit Board. The Merit
Board shall have the power and duty:
(1) To approve a classification plan prepared under its
direction, assigning to each class positions of
substantially similar duties. The Merit Board shall have
power to delegate to its Executive Director the duty of
assigning each position in the classified service to the
appropriate class in the classification plan approved by
the Merit Board.
(2) To prescribe the duties of each class of positions
and the qualifications required by employment in that
class.
(3) To prescribe the range of compensation for each
class or to fix a single rate of compensation for employees
in a particular class; and to establish other conditions of
employment which an employer and employee representatives
have agreed upon as fair and equitable. The Merit Board
shall direct the payment of the "prevailing rate of wages"
in those classifications in which, on January 1, 1952, any
employer is paying such prevailing rate and in such other
classes as the Merit Board may thereafter determine.
"Prevailing rate of wages" as used herein shall be the
wages paid generally in the locality in which the work is

HB3524 - 197 - LRB101 07948 RPS 53003 b
being performed to employees engaged in work of a similar
character. Subject to any applicable restrictions in
Section 14-106.5, 15-132.9, or 16-122.9 of the Illinois
Pension Code, each Each employer covered by the University
System shall be authorized to negotiate with
representatives of employees to determine appropriate
ranges or rates of compensation or other conditions of
employment and may recommend to the Merit Board for
establishment the rates or ranges or other conditions of
employment which the employer and employee representatives
have agreed upon as fair and equitable, but excluding the
changes, the impact of changes, and the implementation of
the changes set forth in this amendatory Act of the 101st
General Assembly. Any rates or ranges established prior to
January 1, 1952, and hereafter, shall not be changed except
in accordance with the procedures herein provided.
(4) To recommend to the institutions and agencies
specified in Section 36e standards for hours of work,
holidays, sick leave, overtime compensation and vacation
for the purpose of improving conditions of employment
covered therein and for the purpose of insuring conformity
with the prevailing rate principal.
(5) To prescribe standards of examination for each
class, the examinations to be related to the duties of such
class. The Merit Board shall have power to delegate to the
Executive Director and his or her staff the preparation,

HB3524 - 198 - LRB101 07948 RPS 53003 b
conduct and grading of examinations.
(6) To authorize the continuous recruitment of
personnel and to that end, to delegate to the Executive
Director and his or her staff the power and the duty to
conduct open and continuous competitive examinations for
all classifications of employment.
(7) To cause to be established, from the results of
examinations, registers for each class of positions in the
classified service of the University System of the persons
who shall attain the minimum mark fixed by the Merit Board
for the examination; and such persons shall take rank upon
the registers as candidates in the order of their relative
excellence as determined by examination, without reference
to priority of time of examination.
(8) To provide by its rules for promotions in the
classified service.
(8.5) To issue subpoenas to secure the attendance and
testimony of witnesses and the production of books and
papers in the course of any investigation or hearing
conducted pursuant to the Act.
(9) (Blank).
(10) To provide by its rules for employment at regular
rates of compensation of persons with physical
disabilities in positions in which the disability does not
prevent the individual from furnishing satisfactory
service.

HB3524 - 199 - LRB101 07948 RPS 53003 b
(11) To make and publish rules to carry out the purpose
of the University System and for examination,
appointments, transfers and removals and for maintaining
and keeping records of the efficiency of officers and
employees and groups of officers and employees in
accordance with the provisions of Sections 36b to 36q,
inclusive, and said Merit Board may from time to time make
changes in such rules.
(12) To appoint an Executive Director who shall appoint
staff to help as may be necessary efficiently to administer
Sections 36b to 36q, inclusive. To authorize the Executive
Director to appoint a Designated Employer Representative
at the place of employment of each employer specified in
Section 36e, and this Designated Employer Representative
may be authorized to give examinations and to certify names
from the regional registers provided in Section 36k. The
enumeration of specific duties and powers that the Merit
Board may delegate to the Executive Director in this
Section does not preclude the Merit Board from delegating
other duties and powers to the Executive Director.
(13) To submit to the Governor of this state on or
before November 1 of each year prior to the regular session
of the General Assembly a report of the University System's
business and an estimate of the amount of appropriation
from state funds required for the purpose of administering
the University System.

HB3524 - 200 - LRB101 07948 RPS 53003 b
(14) To authorize the creation and use of pilot
programs to further the goals of the Act, which may be
inconsistent with any rules adopted by the Merit Board,
provided that such programs are of limited duration and do
not reduce any rights or benefits of employees subject to
this Act.
(Source: P.A. 99-143, eff. 7-27-15; 100-615, eff. 1-1-19.)
Section 55. The University of Illinois Act is amended by
adding Section 105 as follows:
(110 ILCS 305/105 new)
Sec. 105. Future increases in income. The University of
Illinois must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 65. The Southern Illinois University Management
Act is amended by adding Section 90 as follows:
(110 ILCS 520/90 new)
Sec. 90. Future increases in income. Southern Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section

HB3524 - 201 - LRB101 07948 RPS 53003 b
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 70. The Chicago State University Law is amended by
adding Section 5-200 as follows:
(110 ILCS 660/5-200 new)
Sec. 5-200. Future increases in income. Chicago State
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 75. The Eastern Illinois University Law is amended
by adding Section 10-200 as follows:
(110 ILCS 665/10-200 new)
Sec. 10-200. Future increases in income. Eastern Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.

HB3524 - 202 - LRB101 07948 RPS 53003 b
Section 80. The Governors State University Law is amended
by adding Section 15-200 as follows:
(110 ILCS 670/15-200 new)
Sec. 15-200. Future increases in income. Governors State
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 85. The Illinois State University Law is amended by
adding Section 20-205 as follows:
(110 ILCS 675/20-205 new)
Sec. 20-205. Future increases in income. Illinois State
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 90. The Northeastern Illinois University Law is
amended by adding Section 25-200 as follows:
(110 ILCS 680/25-200 new)

HB3524 - 203 - LRB101 07948 RPS 53003 b
Sec. 25-200. Future increases in income. Northeastern
Illinois University must not pay, offer, or agree to pay any
future increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 95. The Northern Illinois University Law is amended
by adding Section 30-210 as follows:
(110 ILCS 685/30-210 new)
Sec. 30-210. Future increases in income. Northern Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 100. The Western Illinois University Law is amended
by adding Section 35-205 as follows:
(110 ILCS 690/35-205 new)
Sec. 35-205. Future increases in income. Western Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-103.43, 15-112.1, or 16-121.1 of the Illinois Pension Code,

HB3524 - 204 - LRB101 07948 RPS 53003 b
to any person in a manner that violates Section 14-106.5,
15-132.9, or 16-122.9 of the Illinois Pension Code.
Section 105. The Public Community College Act is amended by
changing Sections 3-26 and 3-42 as follows:
(110 ILCS 805/3-26) (from Ch. 122, par. 103-26)
Sec. 3-26. (a) To make appointments and fix the salaries of
a chief administrative officer, who shall be the executive
officer of the board, other administrative personnel, and all
teachers, but subject to any applicable restrictions in Section
14-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code.
In making these appointments and fixing the salaries, the board
may make no discrimination on account of sex, race, creed,
color or national origin.
(b) Upon the written request of an employee, to withhold
from the compensation of that employee the membership dues of
such employee payable to any specified labor organization as
defined in the Illinois Educational Labor Relations Act. Under
such arrangement, an amount shall be withheld for each regular
payroll period which is equal to the prorata share of the
annual membership dues plus any payments or contributions and
the board shall pay such withholding to the specified labor
organization within 10 working days from the time of the
withholding.
(Source: P.A. 83-1014.)

HB3524 - 205 - LRB101 07948 RPS 53003 b
(110 ILCS 805/3-42) (from Ch. 122, par. 103-42)
Sec. 3-42. To employ such personnel as may be needed, to
establish policies governing their employment and dismissal,
and to fix the amount of their compensation, subject to any
applicable restrictions in Section 14-106.5, 15-132.9, or
16-122.9 of the Illinois Pension Code. In the employment,
establishment of policies and fixing of compensation the board
may make no discrimination on account of sex, race, creed,
color or national origin.
Residence within any community college district or outside
any community college district shall not be considered:
(a) in determining whether to retain or not retain any
employee of a community college employed prior to July 1,
1977 or prior to the adoption by the community college
board of a resolution making residency within the community
college district of some or all employees a condition of
employment, whichever is later;
(b) in assigning, promoting or transferring any
employee of a community college to an office or position
employed prior to July 1, 1977 or prior to the adoption by
the community college board of a resolution making
residency within the community college district of some or
all employees a condition of employment, whichever is
later; or
(c) in determining the salary or other compensation of

HB3524 - 206 - LRB101 07948 RPS 53003 b
any employee of a community college.
(Source: P.A. 80-248.)
Section 110. The Illinois Educational Labor Relations Act
is amended by changing Sections 4, 14, and 17 and by adding
Section 10.6 as follows:
(115 ILCS 5/4) (from Ch. 48, par. 1704)
Sec. 4. Employer rights. Employers shall not be required to
bargain over matters of inherent managerial policy, which shall
include such areas of discretion or policy as the functions of
the employer, standards of services, its overall budget, the
organizational structure and selection of new employees and
direction of employees. Employers, however, shall be required
to bargain collectively with regard to policy matters directly
affecting wages (but subject to any applicable restrictions in
Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the
Illinois Pension Code), hours and terms and conditions of
employment as well as the impact thereon upon request by
employee representatives, but excluding the changes, the
impact of changes, and the implementation of the changes set
forth in Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of
the Illinois Pension Code. To preserve the rights of employers
and exclusive representatives which have established
collective bargaining relationships or negotiated collective
bargaining agreements prior to the effective date of this Act,

HB3524 - 207 - LRB101 07948 RPS 53003 b
employers shall be required to bargain collectively with regard
to any matter concerning wages (but subject to any applicable
restrictions in Section 14-106.5, 15-132.9, 16-122.9, or
17-115.5 of the Illinois Pension Code), hours or conditions of
employment about which they have bargained for and agreed to in
a collective bargaining agreement prior to the effective date
of this Act, but excluding the changes, the impact of changes,
and the implementation of the changes set forth in Section
14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
Pension Code.
(Source: P.A. 83-1014.)
(115 ILCS 5/10.6 new)
Sec. 10.6. No collective bargaining or interest
arbitration regarding certain changes to the Illinois Pension
Code.
(a) Notwithstanding any other provision of this Act,
employers shall not be required to bargain over matters
affected by the changes, the impact of the changes, and the
implementation of the changes to Article 14, 15, 16, or 17 of
the Illinois Pension Code made by the addition of Section
14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
Pension Code, which are deemed to be prohibited subjects of
bargaining. Notwithstanding any provision of this Act, the
changes, impact of the changes, or implementation of the
changes to Article 14, 15, 16, or 17 of the Illinois Pension

HB3524 - 208 - LRB101 07948 RPS 53003 b
Code made by the addition of Section 14-106.5, 15-132.9,
16-122.9, or 17-115.5 of the Illinois Pension Code shall not be
subject to interest arbitration or any award issued pursuant to
interest arbitration. The provisions of this Section shall not
apply to an employment contract or collective bargaining
agreement that is in effect on the effective date of this
amendatory Act of the 101st General Assembly. However, any such
contract or agreement that is modified, amended, renewed, or
superseded after the effective date of this amendatory Act of
the 101st General Assembly shall be subject to the provisions
of this Section. The provisions of this Section shall not apply
to the ability of any employer and employee representative to
bargain collectively with regard to the pick up of employee
contributions pursuant to Section 14-133.1, 15-157.1,
16-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.
(b) Nothing in this Section shall be construed as otherwise
limiting any of the obligations and requirements applicable to
employers under any of the provisions of this Act, including,
but not limited to, the requirement to bargain collectively
with regard to policy matters directly affecting wages, hours,
and terms and conditions of employment as well as the impact
thereon upon request by employee representatives, except for
the matters set forth in subsection (a) of this Section that
are deemed prohibited subjects of bargaining. Nothing in this
Section shall be construed as otherwise limiting any of the
rights of employees or employee representatives under the

HB3524 - 209 - LRB101 07948 RPS 53003 b
provisions of this Act, except for the matters set forth in
subsection (a) of this Section that are deemed prohibited
subjects of bargaining.
(c) In case of any conflict between this Section and any
other provisions of this Act or any other law, the provisions
of this Section shall control.
(115 ILCS 5/14) (from Ch. 48, par. 1714)
Sec. 14. Unfair labor practices.
(a) Educational employers, their agents or representatives
are prohibited from:
(1) Interfering, restraining or coercing employees in
the exercise of the rights guaranteed under this Act.
(2) Dominating or interfering with the formation,
existence or administration of any employee organization.
(3) Discriminating in regard to hire or tenure of
employment or any term or condition of employment to
encourage or discourage membership in any employee
organization.
(4) Discharging or otherwise discriminating against an
employee because he or she has signed or filed an
affidavit, authorization card, petition or complaint or
given any information or testimony under this Act.
(5) Subject to and except as provided in Section 10.6,
refusing Refusing to bargain collectively in good faith
with an employee representative which is the exclusive

HB3524 - 210 - LRB101 07948 RPS 53003 b
representative of employees in an appropriate unit,
including but not limited to the discussing of grievances
with the exclusive representative; provided, however, that
if an alleged unfair labor practice involves
interpretation or application of the terms of a collective
bargaining agreement and said agreement contains a
grievance and arbitration procedure, the Board may defer
the resolution of such dispute to the grievance and
arbitration procedure contained in said agreement.
However, no actions of the employer taken to implement or
otherwise comply with the provisions of subsection (a) of
Section 10.6 shall constitute or give rise to an unfair
labor practice under this Act.
(6) Refusing to reduce a collective bargaining
agreement to writing and signing such agreement.
(7) Violating any of the rules and regulations
promulgated by the Board regulating the conduct of
representation elections.
(8) Refusing to comply with the provisions of a binding
arbitration award.
(9) Expending or causing the expenditure of public
funds to any external agent, individual, firm, agency,
partnership or association in any attempt to influence the
outcome of representational elections held pursuant to
paragraph (c) of Section 7 of this Act; provided, that
nothing in this subsection shall be construed to limit an

HB3524 - 211 - LRB101 07948 RPS 53003 b
employer's right to be represented on any matter pertaining
to unit determinations, unfair labor practice charges or
pre-election conferences in any formal or informal
proceeding before the Board, or to seek or obtain advice
from legal counsel. Nothing in this paragraph shall be
construed to prohibit an employer from expending or causing
the expenditure of public funds on, or seeking or obtaining
services or advice from, any organization, group or
association established by, and including educational or
public employers, whether or not covered by this Act, the
Illinois Public Labor Relations Act or the public
employment labor relations law of any other state or the
federal government, provided that such services or advice
are generally available to the membership of the
organization, group, or association, and are not offered
solely in an attempt to influence the outcome of a
particular representational election.
(b) Employee organizations, their agents or
representatives or educational employees are prohibited from:
(1) Restraining or coercing employees in the exercise
of the rights guaranteed under this Act, provided that a
labor organization or its agents shall commit an unfair
labor practice under this paragraph in duty of fair
representation cases only by intentional misconduct in
representing employees under this Act.
(2) Restraining or coercing an educational employer in

HB3524 - 212 - LRB101 07948 RPS 53003 b
the selection of his representative for the purposes of
collective bargaining or the adjustment of grievances.
(3) Refusing to bargain collectively in good faith with
an educational employer, if they have been designated in
accordance with the provisions of this Act as the exclusive
representative of employees in an appropriate unit.
(4) Violating any of the rules and regulations
promulgated by the Board regulating the conduct of
representation elections.
(5) Refusing to reduce a collective bargaining
agreement to writing and signing such agreement.
(6) Refusing to comply with the provisions of a binding
arbitration award.
(c) The expressing of any views, argument, opinion or the
dissemination thereof, whether in written, printed, graphic or
visual form, shall not constitute or be evidence of an unfair
labor practice under any of the provisions of this Act, if such
expression contains no threat of reprisal or force or promise
of benefit.
(d) The actions of a Financial Oversight Panel created
pursuant to Section 1A-8 of the School Code due to a district
violating a financial plan shall not constitute or be evidence
of an unfair labor practice under any of the provisions of this
Act. Such actions include, but are not limited to, reviewing,
approving, or rejecting a school district budget or a
collective bargaining agreement.

HB3524 - 213 - LRB101 07948 RPS 53003 b
(Source: P.A. 89-572, eff. 7-30-96.)
(115 ILCS 5/17) (from Ch. 48, par. 1717)
Sec. 17. Effect on other laws. In case of any conflict
between the provisions of this Act and any other law (other
than Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the
Illinois Pension Code), executive order or administrative
regulation, the provisions of this Act shall prevail and
control. The provisions of this Act are subject to any
applicable restrictions in Section 14-106.5, 15-132.9,
16-122.9, or 17-115.5 of the Illinois Pension Code, as well as
the changes, impact of changes, and implementation of changes
set forth in Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5
of the Illinois Pension Code. Nothing in this Act shall be
construed to replace or diminish the rights of employees
established by Section 36d of "An Act to create the State
Universities Civil Service System", approved May 11, 1905, as
amended or modified.
(Source: P.A. 83-1014.)
Section 900. The State Mandates Act is amended by adding
Section 8.43 as follows:
(30 ILCS 805/8.43 new)
Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the

HB3524 - 214 - LRB101 07948 RPS 53003 b
implementation of any mandate created by this amendatory Act of
the 101st General Assembly.
Section 970. Severability. Except as otherwise provided in
this Act, the provisions of this Act are severable under
Section 1.31 of the Statute on Statutes.
Section 999. Effective date. This Act takes effect upon
becoming law.
HB3524 - 215 - LRB101 07948 RPS 53003 b
INDEX
Statutes amended in order of appearance
5 ILCS 315/7.6 new
5 ILCS 315/10 from Ch. 48, par. 1610
5 ILCS 315/15 from Ch. 48, par. 1615
15 ILCS 205/5 new
15 ILCS 310/13a new
15 ILCS 410/13a new
15 ILCS 510/12a new
20 ILCS 5/5-647 new
40 ILCS 5/2-105.3 new
40 ILCS 5/2-107.9 new
40 ILCS 5/2-107.10 new
40 ILCS 5/2-108 from Ch. 108 1/2, par. 2-108
40 ILCS 5/2-110.3 new
40 ILCS 5/2-119.1 from Ch. 108 1/2, par. 2-119.1
40 ILCS 5/2-124 from Ch. 108 1/2, par. 2-124
40 ILCS 5/2-126 from Ch. 108 1/2, par. 2-126
40 ILCS 5/2-134 from Ch. 108 1/2, par. 2-134
40 ILCS 5/2-162
40 ILCS 5/14-103.10 from Ch. 108 1/2, par. 14-103.10
40 ILCS 5/14-103.42 new
40 ILCS 5/14-103.43 new
40 ILCS 5/14-103.44 new
40 ILCS 5/14-106.5 new
HB3524 - 216 - LRB101 07948 RPS 53003 b
40 ILCS 5/14-114 from Ch. 108 1/2, par. 14-114
40 ILCS 5/14-131
40 ILCS 5/14-133 from Ch. 108 1/2, par. 14-133
40 ILCS 5/14-135.08 from Ch. 108 1/2, par. 14-135.08
40 ILCS 5/14-152.1
40 ILCS 5/15-108.1
40 ILCS 5/15-111 from Ch. 108 1/2, par. 15-111
40 ILCS 5/15-112.1 new
40 ILCS 5/15-112.2 new
40 ILCS 5/15-132.9 new
40 ILCS 5/15-136 from Ch. 108 1/2, par. 15-136
40 ILCS 5/15-155 from Ch. 108 1/2, par. 15-155
40 ILCS 5/15-157 from Ch. 108 1/2, par. 15-157
40 ILCS 5/15-165 from Ch. 108 1/2, par. 15-165
40 ILCS 5/15-198
40 ILCS 5/16-107.1 new
40 ILCS 5/16-121 from Ch. 108 1/2, par. 16-121
40 ILCS 5/16-121.1 new
40 ILCS 5/16-121.2 new
40 ILCS 5/16-122.9 new
40 ILCS 5/16-133.1 from Ch. 108 1/2, par. 16-133.1
40 ILCS 5/16-136.1 from Ch. 108 1/2, par. 16-136.1
40 ILCS 5/16-152 from Ch. 108 1/2, par. 16-152
40 ILCS 5/16-158 from Ch. 108 1/2, par. 16-158
40 ILCS 5/16-203
40 ILCS 5/17-106.05 new
HB3524 - 217 - LRB101 07948 RPS 53003 b
40 ILCS 5/17-113.4 new
40 ILCS 5/17-113.5 new
40 ILCS 5/17-113.6 new
40 ILCS 5/17-115.5 new
40 ILCS 5/17-116 from Ch. 108 1/2, par. 17-116
40 ILCS 5/17-119.2 new
40 ILCS 5/17-129 from Ch. 108 1/2, par. 17-129
40 ILCS 5/17-130 from Ch. 108 1/2, par. 17-130
40 ILCS 15/1.10 new
105 ILCS 5/24-1 from Ch. 122, par. 24-1
105 ILCS 5/24-8 from Ch. 122, par. 24-8
105 ILCS 5/34-18.61 new
110 ILCS 70/36d from Ch. 24 1/2, par. 38b3
110 ILCS 305/105 new
110 ILCS 520/90 new
110 ILCS 660/5-200 new
110 ILCS 665/10-200 new
110 ILCS 670/15-200 new
110 ILCS 675/20-205 new
110 ILCS 680/25-200 new
110 ILCS 685/30-210 new
110 ILCS 690/35-205 new
110 ILCS 805/3-26 from Ch. 122, par. 103-26
110 ILCS 805/3-42 from Ch. 122, par. 103-42
115 ILCS 5/4 from Ch. 48, par. 1704
115 ILCS 5/10.6 new
HB3524 - 218 - LRB101 07948 RPS 53003 b