HB4045 Engrossed LRB100 12674 RPS 26063 b
1		AN ACT concerning public employee benefits.
2		Be it enacted by the People of the State of Illinois,
3		represented in the General Assembly:
4		Section 5. The Illinois Public Labor Relations Act is
5		amended by changing Sections 10 and 15 and by adding Section
6		7.6 as follows:
7		(5 ILCS 315/7.6 new)
8		Sec. 7.6. No collective bargaining or interest arbitration
9		regarding certain changes to the Illinois Pension Code.
10		(a) Notwithstanding any other provision of this Act,
11		employers shall not be required to bargain over matters
12		affected by the changes, the impact of the changes, and the
13		implementation of the changes to Article 14, 15, 16, or 17 of
14		the Illinois Pension Code made by the addition of Section
15		14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
16		Pension Code, which are deemed to be prohibited subjects of
17		bargaining. Notwithstanding any provision of this Act, the
18		changes, impact of the changes, or implementation of the
19		changes to Article 14, 15, 16, or 17 of the Illinois Pension
20		Code made by the addition of Section 14-106.5, 15-132.9,
21		16-122.9, or 17-115.5 of the Illinois Pension Code shall not be
22		subject to interest arbitration or any award issued pursuant to
23		interest arbitration. The provisions of this Section shall not

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1		apply to an employment contract or collective bargaining
2		agreement that is in effect on the effective date of this
3		amendatory Act of the 100th General Assembly. However, any such
4		contract or agreement that is modified, amended, renewed, or
5		superseded after the effective date of this amendatory Act of
6		the 100th General Assembly shall be subject to the provisions
7		of this Section. Each employer with active employees
8		participating in a retirement system or pension fund
9		established under Article 14, 15, 16, or 17 of the Illinois
10		Pension Code shall comply with and be subject to the provisions
11		of this amendatory Act of the 100th General Assembly. The
12		provisions of this Section shall not apply to the ability of
13		any employer and employee representative to bargain
14		collectively with regard to the pick up of employee
15		contributions pursuant to Section 14-133.1, 15-157.1,
16		16-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.
17		(b) Subject to and except for the matters set forth in
18		subsection (a) of this Section that are deemed prohibited
19		subjects of bargaining, nothing in this Section shall be
20		construed as otherwise limiting any of the obligations and
21		requirements applicable to employers under any of the
22		provisions of this Act, including, but not limited to, the
23		requirement to bargain collectively with regard to policy
24		matters directly affecting wages, hours, and terms and
25		conditions of employment as well as the impact thereon upon
26		request by employee representatives. Subject to and except for

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1		the matters set forth in subsection (a) of this Section that
2		are deemed prohibited subjects of bargaining, nothing in this
3		Section shall be construed as otherwise limiting any of the
4		rights of employees or employee representatives under the
5		provisions of this Act.
6		(c) In case of any conflict between this Section and any
7		other provisions of this Act or any other law, the provisions
8		of this Section shall control.
9		(5 ILCS 315/10) (from Ch. 48, par. 1610)
10		Sec. 10. Unfair labor practices.
11		(a) It shall be an unfair labor practice for an employer or
12		its agents:
13		(1) to interfere with, restrain or coerce public
14		employees in the exercise of the rights guaranteed in this
15		Act or to dominate or interfere with the formation,
16		existence or administration of any labor organization or
17		contribute financial or other support to it; provided, an
18		employer shall not be prohibited from permitting employees
19		to confer with him during working hours without loss of
20		time or pay;
21		(2) to discriminate in regard to hire or tenure of
22		employment or any term or condition of employment in order
23		to encourage or discourage membership in or other support
24		for any labor organization. Nothing in this Act or any
25		other law precludes a public employer from making an

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

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

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

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1		an object thereof is forcing or requiring an employer to
2		recognize or bargain with a labor organization of the
3		representative of its employees, or forcing or requiring
4		the employees of an employer to accept or select such labor
5		organization as their collective bargaining
6		representative, unless such labor organization is
7		currently certified as the representative of such
8		employees:
9		(A) where the employer has lawfully recognized in
10		accordance with this Act any labor organization and a
11		question concerning representation may not
12		appropriately be raised under Section 9 of this Act;
13		(B) where within the preceding 12 months a valid
14		election under Section 9 of this Act has been
15		conducted; or
16		(C) where such picketing has been conducted
17		without a petition under Section 9 being filed within a
18		reasonable period of time not to exceed 30 days from
19		the commencement of such picketing; provided that when
20		such a petition has been filed the Board shall
21		forthwith, without regard to the provisions of
22		subsection (a) of Section 9 or the absence of a showing
23		of a substantial interest on the part of the labor
24		organization, direct an election in such unit as the
25		Board finds to be appropriate and shall certify the
26		results thereof; provided further, that nothing in

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1		this subparagraph shall be construed to prohibit any
2		picketing or other publicity for the purpose of
3		truthfully advising the public that an employer does
4		not employ members of, or have a contract with, a labor
5		organization unless an effect of such picketing is to
6		induce any individual employed by any other person in
7		the course of his employment, not to pick up, deliver,
8		or transport any goods or not to perform any services;
9		or
10		(8) to refuse to reduce a collective bargaining
11		agreement to writing or to refuse to sign such agreement.
12		(c) The expressing of any views, argument, or opinion or
13		the dissemination thereof, whether in written, printed,
14		graphic, or visual form, shall not constitute or be evidence of
15		an unfair labor practice under any of the provisions of this
16		Act, if such expression contains no threat of reprisal or force
17		or promise of benefit.
18		(Source: P.A. 86-412; 87-736.)
19		(5 ILCS 315/15) (from Ch. 48, par. 1615)
20		(Text of Section WITHOUT the changes made by P.A. 98-599,
21		which has been held unconstitutional)
22		Sec. 15. Act Takes Precedence.
23		(a) In case of any conflict between the provisions of this
24		Act and any other law (other than Section 5 of the State
25		Employees Group Insurance Act of 1971 and other than the

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

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1		paragraphs (h) and (i) of Section 6 of Article VII of the
2		Illinois Constitution, that the provisions of this Act are the
3		exclusive exercise by the State of powers and functions which
4		might otherwise be exercised by home rule units. Such powers
5		and functions may not be exercised concurrently, either
6		directly or indirectly, by any unit of local government,
7		including any home rule unit, except as otherwise authorized by
8		this Act.
9		(d) Notwithstanding any other provision of law, no
10		collective bargaining agreement entered into, renewed, or
11		extended after the effective date of this amendatory Act of the
12		100th General Assembly or any arbitration award issued under
13		such collective bargaining agreement may violate or conflict
14		with the changes made by this amendatory Act of the 100th
15		General Assembly.
16		(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
17		Section 10. The State Employees Group Insurance Act of 1971
18		is amended by changing Sections 3 and 10 as follows:
19		(5 ILCS 375/3) (from Ch. 127, par. 523)
20		Sec. 3. Definitions. Unless the context otherwise
21		requires, the following words and phrases as used in this Act
22		shall have the following meanings. The Department may define
23		these and other words and phrases separately for the purpose of
24		implementing specific programs providing benefits under this

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1		Act.
2		(a) "Administrative service organization" means any
3		person, firm or corporation experienced in the handling of
4		claims which is fully qualified, financially sound and capable
5		of meeting the service requirements of a contract of
6		administration executed with the Department.
7		(b) "Annuitant" means (1) an employee who retires, or has
8		retired, on or after January 1, 1966 on an immediate annuity
9		under the provisions of Articles 2, 14 (including an employee
10		who has elected to receive an alternative retirement
11		cancellation payment under Section 14-108.5 of the Illinois
12		Pension Code in lieu of an annuity or who meets the criteria
13		for retirement, but in lieu of receiving an annuity under that
14		Article has elected to receive an accelerated pension benefit
15		payment under Section 14-147.5 of that Article), 15 (including
16		an employee who has retired under the optional retirement
17		program established under Section 15-158.2 or who meets the
18		criteria for retirement but in lieu of receiving an annuity
19		under that Article has elected to receive an accelerated
20		pension benefit payment under Section 15-185.5 of the Article),
21		paragraphs (2), (3), or (5) of Section 16-106 (including an
22		employee who meets the criteria for retirement, but in lieu of
23		receiving an annuity under that Article has elected to receive
24		an accelerated pension benefit payment under Section 16-190.5
25		of the Illinois Pension Code), or Article 18 of the Illinois
26		Pension Code; (2) any person who was receiving group insurance

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1		coverage under this Act as of March 31, 1978 by reason of his
2		status as an annuitant, even though the annuity in relation to
3		which such coverage was provided is a proportional annuity
4		based on less than the minimum period of service required for a
5		retirement annuity in the system involved; (3) any person not
6		otherwise covered by this Act who has retired as a
7		participating member under Article 2 of the Illinois Pension
8		Code but is ineligible for the retirement annuity under Section
9		2-119 of the Illinois Pension Code; (4) the spouse of any
10		person who is receiving a retirement annuity under Article 18
11		of the Illinois Pension Code and who is covered under a group
12		health insurance program sponsored by a governmental employer
13		other than the State of Illinois and who has irrevocably
14		elected to waive his or her coverage under this Act and to have
15		his or her spouse considered as the "annuitant" under this Act
16		and not as a "dependent"; or (5) an employee who retires, or
17		has retired, from a qualified position, as determined according
18		to rules promulgated by the Director, under a qualified local
19		government, a qualified rehabilitation facility, a qualified
20		domestic violence shelter or service, or a qualified child
21		advocacy center. (For definition of "retired employee", see (p)
22		post).
23		(b-5) (Blank).
24		(b-6) (Blank).
25		(b-7) (Blank).
26		(c) "Carrier" means (1) an insurance company, a corporation

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1		organized under the Limited Health Service Organization Act or
2		the Voluntary Health Services Plan Act, a partnership, or other
3		nongovernmental organization, which is authorized to do group
4		life or group health insurance business in Illinois, or (2) the
5		State of Illinois as a self-insurer.
6		(d) "Compensation" means salary or wages payable on a
7		regular payroll by the State Treasurer on a warrant of the
8		State Comptroller out of any State, trust or federal fund, or
9		by the Governor of the State through a disbursing officer of
10		the State out of a trust or out of federal funds, or by any
11		Department out of State, trust, federal or other funds held by
12		the State Treasurer or the Department, to any person for
13		personal services currently performed, and ordinary or
14		accidental disability benefits under Articles 2, 14, 15
15		(including ordinary or accidental disability benefits under
16		the optional retirement program established under Section
17		15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
18		Article 18 of the Illinois Pension Code, for disability
19		incurred after January 1, 1966, or benefits payable under the
20		Workers' Compensation or Occupational Diseases Act or benefits
21		payable under a sick pay plan established in accordance with
22		Section 36 of the State Finance Act. "Compensation" also means
23		salary or wages paid to an employee of any qualified local
24		government, qualified rehabilitation facility, qualified
25		domestic violence shelter or service, or qualified child
26		advocacy center.

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1		(e) "Commission" means the State Employees Group Insurance
2		Advisory Commission authorized by this Act. Commencing July 1,
3		1984, "Commission" as used in this Act means the Commission on
4		Government Forecasting and Accountability as established by
5		the Legislative Commission Reorganization Act of 1984.
6		(f) "Contributory", when referred to as contributory
7		coverage, shall mean optional coverages or benefits elected by
8		the member toward the cost of which such member makes
9		contribution, or which are funded in whole or in part through
10		the acceptance of a reduction in earnings or the foregoing of
11		an increase in earnings by an employee, as distinguished from
12		noncontributory coverage or benefits which are paid entirely by
13		the State of Illinois without reduction of the member's salary.
14		(g) "Department" means any department, institution, board,
15		commission, officer, court or any agency of the State
16		government receiving appropriations and having power to
17		certify payrolls to the Comptroller authorizing payments of
18		salary and wages against such appropriations as are made by the
19		General Assembly from any State fund, or against trust funds
20		held by the State Treasurer and includes boards of trustees of
21		the retirement systems created by Articles 2, 14, 15, 16 and 18
22		of the Illinois Pension Code. "Department" also includes the
23		Illinois Comprehensive Health Insurance Board, the Board of
24		Examiners established under the Illinois Public Accounting
25		Act, and the Illinois Finance Authority.
26		(h) "Dependent", when the term is used in the context of

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1		the health and life plan, means a member's spouse and any child
2		(1) from birth to age 26 including an adopted child, a child
3		who lives with the member from the time of the filing of a
4		petition for adoption until entry of an order of adoption, a
5		stepchild or adjudicated child, or a child who lives with the
6		member if such member is a court appointed guardian of the
7		child or (2) age 19 or over who has a mental or physical
8		disability from a cause originating prior to the age of 19 (age
9		26 if enrolled as an adult child dependent). For the health
10		plan only, the term "dependent" also includes (1) any person
11		enrolled prior to the effective date of this Section who is
12		dependent upon the member to the extent that the member may
13		claim such person as a dependent for income tax deduction
14		purposes and (2) any person who has received after June 30,
15		2000 an organ transplant and who is financially dependent upon
16		the member and eligible to be claimed as a dependent for income
17		tax purposes. A member requesting to cover any dependent must
18		provide documentation as requested by the Department of Central
19		Management Services and file with the Department any and all
20		forms required by the Department.
21		(i) "Director" means the Director of the Illinois
22		Department of Central Management Services.
23		(j) "Eligibility period" means the period of time a member
24		has to elect enrollment in programs or to select benefits
25		without regard to age, sex or health.
26		(k) "Employee" means and includes each officer or employee

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1		in the service of a department who (1) receives his
2		compensation for service rendered to the department on a
3		warrant issued pursuant to a payroll certified by a department
4		or on a warrant or check issued and drawn by a department upon
5		a trust, federal or other fund or on a warrant issued pursuant
6		to a payroll certified by an elected or duly appointed officer
7		of the State or who receives payment of the performance of
8		personal services on a warrant issued pursuant to a payroll
9		certified by a Department and drawn by the Comptroller upon the
10		State Treasurer against appropriations made by the General
11		Assembly from any fund or against trust funds held by the State
12		Treasurer, and (2) is employed full-time or part-time in a
13		position normally requiring actual performance of duty during
14		not less than 1/2 of a normal work period, as established by
15		the Director in cooperation with each department, except that
16		persons elected by popular vote will be considered employees
17		during the entire term for which they are elected regardless of
18		hours devoted to the service of the State, and (3) except that
19		"employee" does not include any person who is not eligible by
20		reason of such person's employment to participate in one of the
21		State retirement systems under Articles 2, 14, 15 (either the
22		regular Article 15 system or the optional retirement program
23		established under Section 15-158.2) or 18, or under paragraph
24		(2), (3), or (5) of Section 16-106, of the Illinois Pension
25		Code, but such term does include persons who are employed
26		during the 6 month qualifying period under Article 14 of the

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1		Illinois Pension Code. Such term also includes any person who
2		(1) after January 1, 1966, is receiving ordinary or accidental
3		disability benefits under Articles 2, 14, 15 (including
4		ordinary or accidental disability benefits under the optional
5		retirement program established under Section 15-158.2),
6		paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
7		the Illinois Pension Code, for disability incurred after
8		January 1, 1966, (2) receives total permanent or total
9		temporary disability under the Workers' Compensation Act or
10		Occupational Disease Act as a result of injuries sustained or
11		illness contracted in the course of employment with the State
12		of Illinois, or (3) is not otherwise covered under this Act and
13		has retired as a participating member under Article 2 of the
14		Illinois Pension Code but is ineligible for the retirement
15		annuity under Section 2-119 of the Illinois Pension Code.
16		However, a person who satisfies the criteria of the foregoing
17		definition of "employee" except that such person is made
18		ineligible to participate in the State Universities Retirement
19		System by clause (4) of subsection (a) of Section 15-107 of the
20		Illinois Pension Code is also an "employee" for the purposes of
21		this Act. "Employee" also includes any person receiving or
22		eligible for benefits under a sick pay plan established in
23		accordance with Section 36 of the State Finance Act. "Employee"
24		also includes (i) each officer or employee in the service of a
25		qualified local government, including persons appointed as
26		trustees of sanitary districts regardless of hours devoted to

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1		the service of the sanitary district, (ii) each employee in the
2		service of a qualified rehabilitation facility, (iii) each
3		full-time employee in the service of a qualified domestic
4		violence shelter or service, and (iv) each full-time employee
5		in the service of a qualified child advocacy center, as
6		determined according to rules promulgated by the Director.
7		(l) "Member" means an employee, annuitant, retired
8		employee or survivor. In the case of an annuitant or retired
9		employee who first becomes an annuitant or retired employee on
10		or after the effective date of this amendatory Act of the 97th
11		General Assembly, the individual must meet the minimum vesting
12		requirements of the applicable retirement system in order to be
13		eligible for group insurance benefits under that system. In the
14		case of a survivor who first becomes a survivor on or after the
15		effective date of this amendatory Act of the 97th General
16		Assembly, the deceased employee, annuitant, or retired
17		employee upon whom the annuity is based must have been eligible
18		to participate in the group insurance system under the
19		applicable retirement system in order for the survivor to be
20		eligible for group insurance benefits under that system.
21		(m) "Optional coverages or benefits" means those coverages
22		or benefits available to the member on his or her voluntary
23		election, and at his or her own expense.
24		(n) "Program" means the group life insurance, health
25		benefits and other employee benefits designed and contracted
26		for by the Director under this Act.

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1		(o) "Health plan" means a health benefits program offered
2		by the State of Illinois for persons eligible for the plan.
3		(p) "Retired employee" means any person who would be an
4		annuitant as that term is defined herein but for the fact that
5		such person retired prior to January 1, 1966. Such term also
6		includes any person formerly employed by the University of
7		Illinois in the Cooperative Extension Service who would be an
8		annuitant but for the fact that such person was made ineligible
9		to participate in the State Universities Retirement System by
10		clause (4) of subsection (a) of Section 15-107 of the Illinois
11		Pension Code.
12		(q) "Survivor" means a person receiving an annuity as a
13		survivor of an employee or of an annuitant. "Survivor" also
14		includes: (1) the surviving dependent of a person who satisfies
15		the definition of "employee" except that such person is made
16		ineligible to participate in the State Universities Retirement
17		System by clause (4) of subsection (a) of Section 15-107 of the
18		Illinois Pension Code; (2) the surviving dependent of any
19		person formerly employed by the University of Illinois in the
20		Cooperative Extension Service who would be an annuitant except
21		for the fact that such person was made ineligible to
22		participate in the State Universities Retirement System by
23		clause (4) of subsection (a) of Section 15-107 of the Illinois
24		Pension Code; and (3) the surviving dependent of a person who
25		was an annuitant under this Act by virtue of receiving an
26		alternative retirement cancellation payment under Section

HB4045 Engrossed - 20 - LRB100 12674 RPS 26063 b
1		14-108.5 of the Illinois Pension Code.
2		(q-2) "SERS" means the State Employees' Retirement System
3		of Illinois, created under Article 14 of the Illinois Pension
4		Code.
5		(q-3) "SURS" means the State Universities Retirement
6		System, created under Article 15 of the Illinois Pension Code.
7		(q-4) "TRS" means the Teachers' Retirement System of the
8		State of Illinois, created under Article 16 of the Illinois
9		Pension Code.
10		(q-5) (Blank).
11		(q-6) (Blank).
12		(q-7) (Blank).
13		(r) "Medical services" means the services provided within
14		the scope of their licenses by practitioners in all categories
15		licensed under the Medical Practice Act of 1987.
16		(s) "Unit of local government" means any county,
17		municipality, township, school district (including a
18		combination of school districts under the Intergovernmental
19		Cooperation Act), special district or other unit, designated as
20		a unit of local government by law, which exercises limited
21		governmental powers or powers in respect to limited
22		governmental subjects, any not-for-profit association with a
23		membership that primarily includes townships and township
24		officials, that has duties that include provision of research
25		service, dissemination of information, and other acts for the
26		purpose of improving township government, and that is funded

HB4045 Engrossed - 21 - LRB100 12674 RPS 26063 b
1		wholly or partly in accordance with Section 85-15 of the
2		Township Code; any not-for-profit corporation or association,
3		with a membership consisting primarily of municipalities, that
4		operates its own utility system, and provides research,
5		training, dissemination of information, or other acts to
6		promote cooperation between and among municipalities that
7		provide utility services and for the advancement of the goals
8		and purposes of its membership; the Southern Illinois
9		Collegiate Common Market, which is a consortium of higher
10		education institutions in Southern Illinois; the Illinois
11		Association of Park Districts; and any hospital provider that
12		is owned by a county that has 100 or fewer hospital beds and
13		has not already joined the program. "Qualified local
14		government" means a unit of local government approved by the
15		Director and participating in a program created under
16		subsection (i) of Section 10 of this Act.
17		(t) "Qualified rehabilitation facility" means any
18		not-for-profit organization that is accredited by the
19		Commission on Accreditation of Rehabilitation Facilities or
20		certified by the Department of Human Services (as successor to
21		the Department of Mental Health and Developmental
22		Disabilities) to provide services to persons with disabilities
23		and which receives funds from the State of Illinois for
24		providing those services, approved by the Director and
25		participating in a program created under subsection (j) of
26		Section 10 of this Act.

HB4045 Engrossed - 22 - LRB100 12674 RPS 26063 b
1		(u) "Qualified domestic violence shelter or service" means
2		any Illinois domestic violence shelter or service and its
3		administrative offices funded by the Department of Human
4		Services (as successor to the Illinois Department of Public
5		Aid), approved by the Director and participating in a program
6		created under subsection (k) of Section 10.
7		(v) "TRS benefit recipient" means a person who:
8		(1) is not a "member" as defined in this Section; and
9		(2) is receiving a monthly benefit or retirement
10		annuity under Article 16 of the Illinois Pension Code; and
11		(3) either (i) has at least 8 years of creditable
12		service under Article 16 of the Illinois Pension Code, or
13		(ii) was enrolled in the health insurance program offered
14		under that Article on January 1, 1996, or (iii) is the
15		survivor of a benefit recipient who had at least 8 years of
16		creditable service under Article 16 of the Illinois Pension
17		Code or was enrolled in the health insurance program
18		offered under that Article on the effective date of this
19		amendatory Act of 1995, or (iv) is a recipient or survivor
20		of a recipient of a disability benefit under Article 16 of
21		the Illinois Pension Code.
22		(w) "TRS dependent beneficiary" means a person who:
23		(1) is not a "member" or "dependent" as defined in this
24		Section; and
25		(2) is a TRS benefit recipient's: (A) spouse, (B)
26		dependent parent who is receiving at least half of his or

HB4045 Engrossed - 23 - LRB100 12674 RPS 26063 b
1		her support from the TRS benefit recipient, or (C) natural,
2		step, adjudicated, or adopted child who is (i) under age
3		26, (ii) was, on January 1, 1996, participating as a
4		dependent beneficiary in the health insurance program
5		offered under Article 16 of the Illinois Pension Code, or
6		(iii) age 19 or over who has a mental or physical
7		disability from a cause originating prior to the age of 19
8		(age 26 if enrolled as an adult child).
9		"TRS dependent beneficiary" does not include, as indicated
10		under paragraph (2) of this subsection (w), a dependent of the
11		survivor of a TRS benefit recipient who first becomes a
12		dependent of a survivor of a TRS benefit recipient on or after
13		the effective date of this amendatory Act of the 97th General
14		Assembly unless that dependent would have been eligible for
15		coverage as a dependent of the deceased TRS benefit recipient
16		upon whom the survivor benefit is based.
17		(x) "Military leave" refers to individuals in basic
18		training for reserves, special/advanced training, annual
19		training, emergency call up, activation by the President of the
20		United States, or any other training or duty in service to the
21		United States Armed Forces.
22		(y) (Blank).
23		(z) "Community college benefit recipient" means a person
24		who:
25		(1) is not a "member" as defined in this Section; and
26		(2) is receiving a monthly survivor's annuity or

HB4045 Engrossed - 24 - LRB100 12674 RPS 26063 b
1		retirement annuity under Article 15 of the Illinois Pension
2		Code; and
3		(3) either (i) was a full-time employee of a community
4		college district or an association of community college
5		boards created under the Public Community College Act
6		(other than an employee whose last employer under Article
7		15 of the Illinois Pension Code was a community college
8		district subject to Article VII of the Public Community
9		College Act) and was eligible to participate in a group
10		health benefit plan as an employee during the time of
11		employment with a community college district (other than a
12		community college district subject to Article VII of the
13		Public Community College Act) or an association of
14		community college boards, or (ii) is the survivor of a
15		person described in item (i).
16		(aa) "Community college dependent beneficiary" means a
17		person who:
18		(1) is not a "member" or "dependent" as defined in this
19		Section; and
20		(2) is a community college benefit recipient's: (A)
21		spouse, (B) dependent parent who is receiving at least half
22		of his or her support from the community college benefit
23		recipient, or (C) natural, step, adjudicated, or adopted
24		child who is (i) under age 26, or (ii) age 19 or over and
25		has a mental or physical disability from a cause
26		originating prior to the age of 19 (age 26 if enrolled as

HB4045 Engrossed - 25 - LRB100 12674 RPS 26063 b
1		an adult child).
2		"Community college dependent beneficiary" does not
3		include, as indicated under paragraph (2) of this subsection
4		(aa), a dependent of the survivor of a community college
5		benefit recipient who first becomes a dependent of a survivor
6		of a community college benefit recipient on or after the
7		effective date of this amendatory Act of the 97th General
8		Assembly unless that dependent would have been eligible for
9		coverage as a dependent of the deceased community college
10		benefit recipient upon whom the survivor annuity is based.
11		(bb) "Qualified child advocacy center" means any Illinois
12		child advocacy center and its administrative offices funded by
13		the Department of Children and Family Services, as defined by
14		the Children's Advocacy Center Act (55 ILCS 80/), approved by
15		the Director and participating in a program created under
16		subsection (n) of Section 10.
17		(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
18		(5 ILCS 375/10) (from Ch. 127, par. 530)
19		Sec. 10. Contributions by the State and members.
20		(a) The State shall pay the cost of basic non-contributory
21		group life insurance and, subject to member paid contributions
22		set by the Department or required by this Section and except as
23		provided in this Section, the basic program of group health
24		benefits on each eligible member, except a member, not
25		otherwise covered by this Act, who has retired as a

HB4045 Engrossed - 26 - LRB100 12674 RPS 26063 b
1		participating member under Article 2 of the Illinois Pension
2		Code but is ineligible for the retirement annuity under Section
3		2-119 of the Illinois Pension Code, and part of each eligible
4		member's and retired member's premiums for health insurance
5		coverage for enrolled dependents as provided by Section 9. The
6		State shall pay the cost of the basic program of group health
7		benefits only after benefits are reduced by the amount of
8		benefits covered by Medicare for all members and dependents who
9		are eligible for benefits under Social Security or the Railroad
10		Retirement system or who had sufficient Medicare-covered
11		government employment, except that such reduction in benefits
12		shall apply only to those members and dependents who (1) first
13		become eligible for such Medicare coverage on or after July 1,
14		1992; or (2) are Medicare-eligible members or dependents of a
15		local government unit which began participation in the program
16		on or after July 1, 1992; or (3) remain eligible for, but no
17		longer receive Medicare coverage which they had been receiving
18		on or after July 1, 1992. The Department may determine the
19		aggregate level of the State's contribution on the basis of
20		actual cost of medical services adjusted for age, sex or
21		geographic or other demographic characteristics which affect
22		the costs of such programs.
23		The cost of participation in the basic program of group
24		health benefits for the dependent or survivor of a living or
25		deceased retired employee who was formerly employed by the
26		University of Illinois in the Cooperative Extension Service and

HB4045 Engrossed - 27 - LRB100 12674 RPS 26063 b
1		would be an annuitant but for the fact that he or she was made
2		ineligible to participate in the State Universities Retirement
3		System by clause (4) of subsection (a) of Section 15-107 of the
4		Illinois Pension Code shall not be greater than the cost of
5		participation that would otherwise apply to that dependent or
6		survivor if he or she were the dependent or survivor of an
7		annuitant under the State Universities Retirement System.
8		(a-1) (Blank).
9		(a-2) (Blank).
10		(a-3) (Blank).
11		(a-4) (Blank).
12		(a-5) (Blank).
13		(a-6) (Blank).
14		(a-7) (Blank).
15		(a-8) Any annuitant, survivor, or retired employee may
16		waive or terminate coverage in the program of group health
17		benefits. Any such annuitant, survivor, or retired employee who
18		has waived or terminated coverage may enroll or re-enroll in
19		the program of group health benefits only during the annual
20		benefit choice period, as determined by the Director; except
21		that in the event of termination of coverage due to nonpayment
22		of premiums, the annuitant, survivor, or retired employee may
23		not re-enroll in the program.
24		(a-8.5) Beginning on the effective date of this amendatory
25		Act of the 97th General Assembly, the Director of Central
26		Management Services shall, on an annual basis, determine the

HB4045 Engrossed - 28 - LRB100 12674 RPS 26063 b
1		amount that the State shall contribute toward the basic program
2		of group health benefits on behalf of annuitants (including
3		individuals who (i) participated in the General Assembly
4		Retirement System, the State Employees' Retirement System of
5		Illinois, the State Universities Retirement System, the
6		Teachers' Retirement System of the State of Illinois, or the
7		Judges Retirement System of Illinois and (ii) qualify as
8		annuitants under subsection (b) of Section 3 of this Act),
9		survivors (including individuals who (i) receive an annuity as
10		a survivor of an individual who participated in the General
11		Assembly Retirement System, the State Employees' Retirement
12		System of Illinois, the State Universities Retirement System,
13		the Teachers' Retirement System of the State of Illinois, or
14		the Judges Retirement System of Illinois and (ii) qualify as
15		survivors under subsection (q) of Section 3 of this Act), and
16		retired employees (as defined in subsection (p) of Section 3 of
17		this Act). The remainder of the cost of coverage for each
18		annuitant, survivor, or retired employee, as determined by the
19		Director of Central Management Services, shall be the
20		responsibility of that annuitant, survivor, or retired
21		employee.
22		Contributions required of annuitants, survivors, and
23		retired employees shall be the same for all retirement systems
24		and shall also be based on whether an individual has made an
25		election under Section 15-135.1 of the Illinois Pension Code.
26		Contributions may be based on annuitants', survivors', or

HB4045 Engrossed - 29 - LRB100 12674 RPS 26063 b
1		retired employees' Medicare eligibility, but may not be based
2		on Social Security eligibility.
3		(a-9) No later than May 1 of each calendar year, the
4		Director of Central Management Services shall certify in
5		writing to the Executive Secretary of the State Employees'
6		Retirement System of Illinois the amounts of the Medicare
7		supplement health care premiums and the amounts of the health
8		care premiums for all other retirees who are not Medicare
9		eligible.
10		A separate calculation of the premiums based upon the
11		actual cost of each health care plan shall be so certified.
12		The Director of Central Management Services shall provide
13		to the Executive Secretary of the State Employees' Retirement
14		System of Illinois such information, statistics, and other data
15		as he or she may require to review the premium amounts
16		certified by the Director of Central Management Services.
17		The Department of Central Management Services, or any
18		successor agency designated to procure healthcare contracts
19		pursuant to this Act, is authorized to establish funds,
20		separate accounts provided by any bank or banks as defined by
21		the Illinois Banking Act, or separate accounts provided by any
22		savings and loan association or associations as defined by the
23		Illinois Savings and Loan Act of 1985 to be held by the
24		Director, outside the State treasury, for the purpose of
25		receiving the transfer of moneys from the Local Government
26		Health Insurance Reserve Fund. The Department may promulgate

HB4045 Engrossed - 30 - LRB100 12674 RPS 26063 b
1		rules further defining the methodology for the transfers. Any
2		interest earned by moneys in the funds or accounts shall inure
3		to the Local Government Health Insurance Reserve Fund. The
4		transferred moneys, and interest accrued thereon, shall be used
5		exclusively for transfers to administrative service
6		organizations or their financial institutions for payments of
7		claims to claimants and providers under the self-insurance
8		health plan. The transferred moneys, and interest accrued
9		thereon, shall not be used for any other purpose including, but
10		not limited to, reimbursement of administration fees due the
11		administrative service organization pursuant to its contract
12		or contracts with the Department.
13		(a-10) To the extent that participation, benefits, or
14		premiums under this Act are based on a person's service credit
15		under an Article of the Illinois Pension Code, service credit
16		terminated in exchange for an accelerated pension benefit
17		payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
18		Code shall be included in determining a person's service credit
19		for the purposes of this Act.
20		(b) State employees who become eligible for this program on
21		or after January 1, 1980 in positions normally requiring actual
22		performance of duty not less than 1/2 of a normal work period
23		but not equal to that of a normal work period, shall be given
24		the option of participating in the available program. If the
25		employee elects coverage, the State shall contribute on behalf
26		of such employee to the cost of the employee's benefit and any

HB4045 Engrossed - 31 - LRB100 12674 RPS 26063 b
1		applicable dependent supplement, that sum which bears the same
2		percentage as that percentage of time the employee regularly
3		works when compared to normal work period.
4		(c) The basic non-contributory coverage from the basic
5		program of group health benefits shall be continued for each
6		employee not in pay status or on active service by reason of
7		(1) leave of absence due to illness or injury, (2) authorized
8		educational leave of absence or sabbatical leave, or (3)
9		military leave. This coverage shall continue until expiration
10		of authorized leave and return to active service, but not to
11		exceed 24 months for leaves under item (1) or (2). This
12		24-month limitation and the requirement of returning to active
13		service shall not apply to persons receiving ordinary or
14		accidental disability benefits or retirement benefits through
15		the appropriate State retirement system or benefits under the
16		Workers' Compensation or Occupational Disease Act.
17		(d) The basic group life insurance coverage shall continue,
18		with full State contribution, where such person is (1) absent
19		from active service by reason of disability arising from any
20		cause other than self-inflicted, (2) on authorized educational
21		leave of absence or sabbatical leave, or (3) on military leave.
22		(e) Where the person is in non-pay status for a period in
23		excess of 30 days or on leave of absence, other than by reason
24		of disability, educational or sabbatical leave, or military
25		leave, such person may continue coverage only by making
26		personal payment equal to the amount normally contributed by

HB4045 Engrossed - 32 - LRB100 12674 RPS 26063 b
1		the State on such person's behalf. Such payments and coverage
2		may be continued: (1) until such time as the person returns to
3		a status eligible for coverage at State expense, but not to
4		exceed 24 months or (2) until such person's employment or
5		annuitant status with the State is terminated (exclusive of any
6		additional service imposed pursuant to law).
7		(f) The Department shall establish by rule the extent to
8		which other employee benefits will continue for persons in
9		non-pay status or who are not in active service.
10		(g) The State shall not pay the cost of the basic
11		non-contributory group life insurance, program of health
12		benefits and other employee benefits for members who are
13		survivors as defined by paragraphs (1) and (2) of subsection
14		(q) of Section 3 of this Act. The costs of benefits for these
15		survivors shall be paid by the survivors or by the University
16		of Illinois Cooperative Extension Service, or any combination
17		thereof. However, the State shall pay the amount of the
18		reduction in the cost of participation, if any, resulting from
19		the amendment to subsection (a) made by this amendatory Act of
20		the 91st General Assembly.
21		(h) Those persons occupying positions with any department
22		as a result of emergency appointments pursuant to Section 8b.8
23		of the Personnel Code who are not considered employees under
24		this Act shall be given the option of participating in the
25		programs of group life insurance, health benefits and other
26		employee benefits. Such persons electing coverage may

HB4045 Engrossed - 33 - LRB100 12674 RPS 26063 b
1		participate only by making payment equal to the amount normally
2		contributed by the State for similarly situated employees. Such
3		amounts shall be determined by the Director. Such payments and
4		coverage may be continued until such time as the person becomes
5		an employee pursuant to this Act or such person's appointment
6		is terminated.
7		(i) Any unit of local government within the State of
8		Illinois may apply to the Director to have its employees,
9		annuitants, and their dependents provided group health
10		coverage under this Act on a non-insured basis. To participate,
11		a unit of local government must agree to enroll all of its
12		employees, who may select coverage under either the State group
13		health benefits plan or a health maintenance organization that
14		has contracted with the State to be available as a health care
15		provider for employees as defined in this Act. A unit of local
16		government must remit the entire cost of providing coverage
17		under the State group health benefits plan or, for coverage
18		under a health maintenance organization, an amount determined
19		by the Director based on an analysis of the sex, age,
20		geographic location, or other relevant demographic variables
21		for its employees, except that the unit of local government
22		shall not be required to enroll those of its employees who are
23		covered spouses or dependents under this plan or another group
24		policy or plan providing health benefits as long as (1) an
25		appropriate official from the unit of local government attests
26		that each employee not enrolled is a covered spouse or

HB4045 Engrossed - 34 - LRB100 12674 RPS 26063 b
1		dependent under this plan or another group policy or plan, and
2		(2) at least 50% of the employees are enrolled and the unit of
3		local government remits the entire cost of providing coverage
4		to those employees, except that a participating school district
5		must have enrolled at least 50% of its full-time employees who
6		have not waived coverage under the district's group health plan
7		by participating in a component of the district's cafeteria
8		plan. A participating school district is not required to enroll
9		a full-time employee who has waived coverage under the
10		district's health plan, provided that an appropriate official
11		from the participating school district attests that the
12		full-time employee has waived coverage by participating in a
13		component of the district's cafeteria plan. For the purposes of
14		this subsection, "participating school district" includes a
15		unit of local government whose primary purpose is education as
16		defined by the Department's rules.
17		Employees of a participating unit of local government who
18		are not enrolled due to coverage under another group health
19		policy or plan may enroll in the event of a qualifying change
20		in status, special enrollment, special circumstance as defined
21		by the Director, or during the annual Benefit Choice Period. A
22		participating unit of local government may also elect to cover
23		its annuitants. Dependent coverage shall be offered on an
24		optional basis, with the costs paid by the unit of local
25		government, its employees, or some combination of the two as
26		determined by the unit of local government. The unit of local

HB4045 Engrossed - 35 - LRB100 12674 RPS 26063 b
1		government shall be responsible for timely collection and
2		transmission of dependent premiums.
3		The Director shall annually determine monthly rates of
4		payment, subject to the following constraints:
5		(1) In the first year of coverage, the rates shall be
6		equal to the amount normally charged to State employees for
7		elected optional coverages or for enrolled dependents
8		coverages or other contributory coverages, or contributed
9		by the State for basic insurance coverages on behalf of its
10		employees, adjusted for differences between State
11		employees and employees of the local government in age,
12		sex, geographic location or other relevant demographic
13		variables, plus an amount sufficient to pay for the
14		additional administrative costs of providing coverage to
15		employees of the unit of local government and their
16		dependents.
17		(2) In subsequent years, a further adjustment shall be
18		made to reflect the actual prior years' claims experience
19		of the employees of the unit of local government.
20		In the case of coverage of local government employees under
21		a health maintenance organization, the Director shall annually
22		determine for each participating unit of local government the
23		maximum monthly amount the unit may contribute toward that
24		coverage, based on an analysis of (i) the age, sex, geographic
25		location, and other relevant demographic variables of the
26		unit's employees and (ii) the cost to cover those employees

HB4045 Engrossed - 36 - LRB100 12674 RPS 26063 b
1		under the State group health benefits plan. The Director may
2		similarly determine the maximum monthly amount each unit of
3		local government may contribute toward coverage of its
4		employees' dependents under a health maintenance organization.
5		Monthly payments by the unit of local government or its
6		employees for group health benefits plan or health maintenance
7		organization coverage shall be deposited in the Local
8		Government Health Insurance Reserve Fund.
9		The Local Government Health Insurance Reserve Fund is
10		hereby created as a nonappropriated trust fund to be held
11		outside the State Treasury, with the State Treasurer as
12		custodian. The Local Government Health Insurance Reserve Fund
13		shall be a continuing fund not subject to fiscal year
14		limitations. The Local Government Health Insurance Reserve
15		Fund is not subject to administrative charges or charge-backs,
16		including but not limited to those authorized under Section 8h
17		of the State Finance Act. All revenues arising from the
18		administration of the health benefits program established
19		under this Section shall be deposited into the Local Government
20		Health Insurance Reserve Fund. Any interest earned on moneys in
21		the Local Government Health Insurance Reserve Fund shall be
22		deposited into the Fund. All expenditures from this Fund shall
23		be used for payments for health care benefits for local
24		government and rehabilitation facility employees, annuitants,
25		and dependents, and to reimburse the Department or its
26		administrative service organization for all expenses incurred

HB4045 Engrossed - 37 - LRB100 12674 RPS 26063 b
1		in the administration of benefits. No other State funds may be
2		used for these purposes.
3		A local government employer's participation or desire to
4		participate in a program created under this subsection shall
5		not limit that employer's duty to bargain with the
6		representative of any collective bargaining unit of its
7		employees.
8		(j) Any rehabilitation facility within the State of
9		Illinois may apply to the Director to have its employees,
10		annuitants, and their eligible dependents provided group
11		health coverage under this Act on a non-insured basis. To
12		participate, a rehabilitation facility must agree to enroll all
13		of its employees and remit the entire cost of providing such
14		coverage for its employees, except that the rehabilitation
15		facility shall not be required to enroll those of its employees
16		who are covered spouses or dependents under this plan or
17		another group policy or plan providing health benefits as long
18		as (1) an appropriate official from the rehabilitation facility
19		attests that each employee not enrolled is a covered spouse or
20		dependent under this plan or another group policy or plan, and
21		(2) at least 50% of the employees are enrolled and the
22		rehabilitation facility remits the entire cost of providing
23		coverage to those employees. Employees of a participating
24		rehabilitation facility who are not enrolled due to coverage
25		under another group health policy or plan may enroll in the
26		event of a qualifying change in status, special enrollment,

HB4045 Engrossed - 38 - LRB100 12674 RPS 26063 b
1		special circumstance as defined by the Director, or during the
2		annual Benefit Choice Period. A participating rehabilitation
3		facility may also elect to cover its annuitants. Dependent
4		coverage shall be offered on an optional basis, with the costs
5		paid by the rehabilitation facility, its employees, or some
6		combination of the 2 as determined by the rehabilitation
7		facility. The rehabilitation facility shall be responsible for
8		timely collection and transmission of dependent premiums.
9		The Director shall annually determine quarterly rates of
10		payment, subject to the following constraints:
11		(1) In the first year of coverage, the rates shall be
12		equal to the amount normally charged to State employees for
13		elected optional coverages or for enrolled dependents
14		coverages or other contributory coverages on behalf of its
15		employees, adjusted for differences between State
16		employees and employees of the rehabilitation facility in
17		age, sex, geographic location or other relevant
18		demographic variables, plus an amount sufficient to pay for
19		the additional administrative costs of providing coverage
20		to employees of the rehabilitation facility and their
21		dependents.
22		(2) In subsequent years, a further adjustment shall be
23		made to reflect the actual prior years' claims experience
24		of the employees of the rehabilitation facility.
25		Monthly payments by the rehabilitation facility or its
26		employees for group health benefits shall be deposited in the

HB4045 Engrossed - 39 - LRB100 12674 RPS 26063 b
1		Local Government Health Insurance Reserve Fund.
2		(k) Any domestic violence shelter or service within the
3		State of Illinois may apply to the Director to have its
4		employees, annuitants, and their dependents provided group
5		health coverage under this Act on a non-insured basis. To
6		participate, a domestic violence shelter or service must agree
7		to enroll all of its employees and pay the entire cost of
8		providing such coverage for its employees. The domestic
9		violence shelter shall not be required to enroll those of its
10		employees who are covered spouses or dependents under this plan
11		or another group policy or plan providing health benefits as
12		long as (1) an appropriate official from the domestic violence
13		shelter attests that each employee not enrolled is a covered
14		spouse or dependent under this plan or another group policy or
15		plan and (2) at least 50% of the employees are enrolled and the
16		domestic violence shelter remits the entire cost of providing
17		coverage to those employees. Employees of a participating
18		domestic violence shelter who are not enrolled due to coverage
19		under another group health policy or plan may enroll in the
20		event of a qualifying change in status, special enrollment, or
21		special circumstance as defined by the Director or during the
22		annual Benefit Choice Period. A participating domestic
23		violence shelter may also elect to cover its annuitants.
24		Dependent coverage shall be offered on an optional basis, with
25		employees, or some combination of the 2 as determined by the
26		domestic violence shelter or service. The domestic violence

HB4045 Engrossed - 40 - LRB100 12674 RPS 26063 b
1		shelter or service shall be responsible for timely collection
2		and transmission of dependent premiums.
3		The Director shall annually determine rates of payment,
4		subject to the following constraints:
5		(1) In the first year of coverage, the rates shall be
6		equal to the amount normally charged to State employees for
7		elected optional coverages or for enrolled dependents
8		coverages or other contributory coverages on behalf of its
9		employees, adjusted for differences between State
10		employees and employees of the domestic violence shelter or
11		service in age, sex, geographic location or other relevant
12		demographic variables, plus an amount sufficient to pay for
13		the additional administrative costs of providing coverage
14		to employees of the domestic violence shelter or service
15		and their dependents.
16		(2) In subsequent years, a further adjustment shall be
17		made to reflect the actual prior years' claims experience
18		of the employees of the domestic violence shelter or
19		service.
20		Monthly payments by the domestic violence shelter or
21		service or its employees for group health insurance shall be
22		deposited in the Local Government Health Insurance Reserve
23		Fund.
24		(l) A public community college or entity organized pursuant
25		to the Public Community College Act may apply to the Director
26		initially to have only annuitants not covered prior to July 1,

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1		1992 by the district's health plan provided health coverage
2		under this Act on a non-insured basis. The community college
3		must execute a 2-year contract to participate in the Local
4		Government Health Plan. Any annuitant may enroll in the event
5		of a qualifying change in status, special enrollment, special
6		circumstance as defined by the Director, or during the annual
7		Benefit Choice Period.
8		The Director shall annually determine monthly rates of
9		payment subject to the following constraints: for those
10		community colleges with annuitants only enrolled, first year
11		rates shall be equal to the average cost to cover claims for a
12		State member adjusted for demographics, Medicare
13		participation, and other factors; and in the second year, a
14		further adjustment of rates shall be made to reflect the actual
15		first year's claims experience of the covered annuitants.
16		(l-5) The provisions of subsection (l) become inoperative
17		on July 1, 1999.
18		(m) The Director shall adopt any rules deemed necessary for
19		implementation of this amendatory Act of 1989 (Public Act
20		86-978).
21		(n) Any child advocacy center within the State of Illinois
22		may apply to the Director to have its employees, annuitants,
23		and their dependents provided group health coverage under this
24		Act on a non-insured basis. To participate, a child advocacy
25		center must agree to enroll all of its employees and pay the
26		entire cost of providing coverage for its employees. The child

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1		advocacy center shall not be required to enroll those of its
2		employees who are covered spouses or dependents under this plan
3		or another group policy or plan providing health benefits as
4		long as (1) an appropriate official from the child advocacy
5		center attests that each employee not enrolled is a covered
6		spouse or dependent under this plan or another group policy or
7		plan and (2) at least 50% of the employees are enrolled and the
8		child advocacy center remits the entire cost of providing
9		coverage to those employees. Employees of a participating child
10		advocacy center who are not enrolled due to coverage under
11		another group health policy or plan may enroll in the event of
12		a qualifying change in status, special enrollment, or special
13		circumstance as defined by the Director or during the annual
14		Benefit Choice Period. A participating child advocacy center
15		may also elect to cover its annuitants. Dependent coverage
16		shall be offered on an optional basis, with the costs paid by
17		the child advocacy center, its employees, or some combination
18		of the 2 as determined by the child advocacy center. The child
19		advocacy center shall be responsible for timely collection and
20		transmission of dependent premiums.
21		The Director shall annually determine rates of payment,
22		subject to the following constraints:
23		(1) In the first year of coverage, the rates shall be
24		equal to the amount normally charged to State employees for
25		elected optional coverages or for enrolled dependents
26		coverages or other contributory coverages on behalf of its

HB4045 Engrossed - 43 - LRB100 12674 RPS 26063 b
1		employees, adjusted for differences between State
2		employees and employees of the child advocacy center in
3		age, sex, geographic location, or other relevant
4		demographic variables, plus an amount sufficient to pay for
5		the additional administrative costs of providing coverage
6		to employees of the child advocacy center and their
7		dependents.
8		(2) In subsequent years, a further adjustment shall be
9		made to reflect the actual prior years' claims experience
10		of the employees of the child advocacy center.
11		Monthly payments by the child advocacy center or its
12		employees for group health insurance shall be deposited into
13		the Local Government Health Insurance Reserve Fund.
14		(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
15		Section 15. The Attorney General Act is amended by adding
16		Section 5 as follows:
17		(15 ILCS 205/5 new)
18		Sec. 5. Future increases in income. The Office of the
19		Attorney General must not pay, offer, or agree to pay any
20		future increase in income, as that term is defined in Section
21		14-103.42 of the Illinois Pension Code, to any person in a
22		manner that violates Section 14-106.5 of the Illinois Pension
23		Code.

HB4045 Engrossed - 44 - LRB100 12674 RPS 26063 b
1		Section 20. The Secretary of State Merit Employment Code is
2		amended by adding Section 13a as follows:
3		(15 ILCS 310/13a new)
4		Sec. 13a. Future increases in income. The Office of the
5		Secretary of State must not pay, offer, or agree to pay any
6		future increase in income, as that term is defined in Section
7		14-103.42 of the Illinois Pension Code, to any person in a
8		manner that violates Section 14-106.5 of the Illinois Pension
9		Code.
10		Section 25. The Comptroller Merit Employment Code is
11		amended by adding Section 13a as follows:
12		(15 ILCS 410/13a new)
13		Sec. 13a. Future increases in income. The Office of the
14		Comptroller must not pay, offer, or agree to pay any future
15		increase in income, as that term is defined in Section
16		14-103.42 of the Illinois Pension Code, to any person in a
17		manner that violates Section 14-106.5 of the Illinois Pension
18		Code.
19		Section 30. The State Treasurer Employment Code is amended
20		by adding Section 12a as follows:
21		(15 ILCS 510/12a new)

HB4045 Engrossed - 45 - LRB100 12674 RPS 26063 b
1		Sec. 12a. Future increases in income. The Office of the
2		State Treasurer must not pay, offer, or agree to pay any future
3		increase in income, as that term is defined in Section
4		14-103.42 of the Illinois Pension Code, to any person in a
5		manner that violates Section 14-106.5 of the Illinois Pension
6		Code.
7		Section 35. The Civil Administrative Code of Illinois is
8		amended by adding Section 5-647 as follows:
9		(20 ILCS 5/5-647 new)
10		Sec. 5-647. Future increases in income. A Department must
11		not pay, offer, or agree to pay any future increase in income,
12		as that term is defined in Section 14-103.42, 15-112.1, or
13		16-121.1 of the Illinois Pension Code, to any person in a
14		manner that violates Section 14-106.5, 15-132.9, or 16-122.9 of
15		the Illinois Pension Code.
16		Section 40. The Budget Stabilization Act is amended by
17		changing Section 20 as follows:
18		(30 ILCS 122/20)
19		(Text of Section WITHOUT the changes made by P.A. 98-599,
20		which has been held unconstitutional)
21		Sec. 20. Pension Stabilization Fund.
22		(a) The Pension Stabilization Fund is hereby created as a

HB4045 Engrossed - 46 - LRB100 12674 RPS 26063 b
1		special fund in the State treasury. Moneys in the fund shall be
2		used for the sole purpose of making payments to the designated
3		retirement systems as provided in Section 25.
4		(b) For each fiscal year through State fiscal year 2020,
5		when the General Assembly's appropriations and transfers or
6		diversions as required by law from general funds do not exceed
7		99% of the estimated general funds revenues pursuant to
8		subsection (a) of Section 10, the Comptroller shall transfer
9		from the General Revenue Fund as provided by this Section a
10		total amount equal to 0.5% of the estimated general funds
11		revenues to the Pension Stabilization Fund.
12		(c) For each fiscal year through State fiscal year 2020,
13		when the General Assembly's appropriations and transfers or
14		diversions as required by law from general funds do not exceed
15		98% of the estimated general funds revenues pursuant to
16		subsection (b) of Section 10, the Comptroller shall transfer
17		from the General Revenue Fund as provided by this Section a
18		total amount equal to 1.0% of the estimated general funds
19		revenues to the Pension Stabilization Fund.
20		(c-5) In addition to any other amounts required to be
21		transferred under this Section, in State fiscal year 2021 and
22		each fiscal year thereafter through State fiscal year 2045, or
23		when each of the designated retirement systems, as defined in
24		Section 25, has achieved 100% funding, whichever occurs first,
25		the State Comptroller shall order transferred and the State
26		Treasurer shall transfer from the General Revenue Fund to the

HB4045 Engrossed - 47 - LRB100 12674 RPS 26063 b
1		Pension Stabilization Fund an amount equal to (1) the sum of
2		the amounts certified by the designated retirement systems
3		under subsection (a-10) of Section 14-135.08, subsection
4		(a-10) of Section 15-165, and subsection (a-10) of Section
5		16-158 of this Code for that fiscal year minus (2) the sum of
6		the required State contributions certified by the retirement
7		systems under subsection (a-5) of Section 14-135.08,
8		subsection (a-5) of Section 15-165, and subsection (a-5) of
9		Section 16-158 of this Code for that fiscal year. The
10		transferred amount is intended to represent the annual savings
11		to the State resulting from the enactment of Section 1-161 and
12		Section 14-155.2, the enactment of subsection (a-2) of Section
13		15-155 and subsection (b-4) of Section 16-158, and the changes
14		made to Section 1-160 by this amendatory Act of the 100th
15		General Assembly.
16		(d) The Comptroller shall transfer 1/12 of the total amount
17		to be transferred each fiscal year under this Section into the
18		Pension Stabilization Fund on the first day of each month of
19		that fiscal year or as soon thereafter as possible; except that
20		the final transfer of the fiscal year shall be made as soon as
21		practical after the August 31 following the end of the fiscal
22		year.
23		Until State fiscal year 2021, before Before the final
24		transfer for a fiscal year is made, the Comptroller shall
25		reconcile the estimated general funds revenues used in
26		calculating the other transfers under this Section for that

HB4045 Engrossed - 48 - LRB100 12674 RPS 26063 b
1		fiscal year with the actual general funds revenues for that
2		fiscal year. The final transfer for the fiscal year shall be
3		adjusted so that the total amount transferred under this
4		Section for that fiscal year is equal to the percentage
5		specified in subsection (b) or (c) of this Section, whichever
6		is applicable, of the actual general funds revenues for that
7		fiscal year. The actual general funds revenues for the fiscal
8		year shall be calculated in a manner consistent with subsection
9		(c) of Section 10 of this Act.
10		(Source: P.A. 94-839, eff. 6-6-06.)
11		Section 45. The Illinois Pension Code is amended by
12		changing Sections 1-160, 2-101, 2-105, 2-107, 2-108, 2-119.1,
13		2-124, 2-126, 2-134, 2-162, 14-103.10, 14-114, 14-131, 14-133,
14		14-135.08, 14-152.1, 15-108.1, 15-108.2, 15-111, 15-136,
15		15-155, 15-157, 15-165, 15-198, 16-121, 16-133.1, 16-136.1,
16		16-152, 16-158, 16-203, 17-116, 17-127, 17-129, 17-130,
17		18-131, 18-140, 20-121, 20-123, 20-124, and 20-125 and by
18		adding Sections 1-161, 1-162, 2-105.3, 2-107.9, 2-107.10,
19		2-110.3, 2-165.1, 2-166.1, 14-103.41, 14-103.42, 14-103.43,
20		14-106.5, 14-147.5, 14-155.1, 14-155.2, 14-156.1, 15-112.1,
21		15-112.2, 15-132.9, 15-185.5, 15-200.1, 15-201.1, 16-107.1,
22		16-121.1, 16-121.2, 16-122.9, 16-190.5, 16-205.1, 16-206.1,
23		17-106.05, 17-113.4, 17-113.5, 17-113.6, 17-115.5, and
24		17-119.2 as follows:

HB4045 Engrossed - 49 - LRB100 12674 RPS 26063 b
1		(40 ILCS 5/1-160)
2		(Text of Section WITHOUT the changes made by P.A. 98-641,
3		which has been held unconstitutional)
4		Sec. 1-160. Provisions applicable to new hires.
5		(a) The provisions of this Section apply to a person who,
6		on or after January 1, 2011, first becomes a member or a
7		participant under any reciprocal retirement system or pension
8		fund established under this Code, other than a retirement
9		system or pension fund established under Article 2, 3, 4, 5, 6,
10		15 or 18 of this Code, notwithstanding any other provision of
11		this Code to the contrary, but do not apply to any self-managed
12		plan established under this Code, to any person with respect to
13		service as a sheriff's law enforcement employee under Article
14		7, or to any participant of the retirement plan established
15		under Section 22-101. Notwithstanding anything to the contrary
16		in this Section, for purposes of this Section, a person who
17		participated in a retirement system under Article 15 prior to
18		January 1, 2011 shall be deemed a person who first became a
19		member or participant prior to January 1, 2011 under any
20		retirement system or pension fund subject to this Section. The
21		changes made to this Section by Public Act 98-596 this
22		amendatory Act of the 98th General Assembly are a clarification
23		of existing law and are intended to be retroactive to January
24		1, 2011 (the effective date of Public Act 96-889),
25		notwithstanding the provisions of Section 1-103.1 of this Code.
26		This Section does not apply to a person who, on or after 6

HB4045 Engrossed - 50 - LRB100 12674 RPS 26063 b
1		months after the effective date of this amendatory Act of the
2		100th General Assembly, first becomes a member or participant
3		under Article 14 or 16, unless that person (i) is a covered
4		employee under Article 14 who has not elected to participate in
5		the defined contribution plan under Section 14-155.2 or (ii)
6		elects under subsection (b) of Section 1-161 to receive the
7		benefits provided under this Section and the applicable
8		provisions of the Article under which he or she is a member or
9		participant. This Section also does not apply to a person who
10		first becomes a member or participant of an affected pension
11		fund on or after 6 months after the resolution or ordinance
12		date, as defined in Section 1-162, unless that person elects
13		under subsection (c) of Section 1-162 to receive the benefits
14		provided under this Section and the applicable provisions of
15		the Article under which he or she is a member or participant.
16		(b) "Final average salary" means the average monthly (or
17		annual) salary obtained by dividing the total salary or
18		earnings calculated under the Article applicable to the member
19		or participant during the 96 consecutive months (or 8
20		consecutive years) of service within the last 120 months (or 10
21		years) of service in which the total salary or earnings
22		calculated under the applicable Article was the highest by the
23		number of months (or years) of service in that period. For the
24		purposes of a person who first becomes a member or participant
25		of any retirement system or pension fund to which this Section
26		applies on or after January 1, 2011, in this Code, "final

HB4045 Engrossed - 51 - LRB100 12674 RPS 26063 b
1		average salary" shall be substituted for the following:
2		(1) In Article 7 (except for service as sheriff's law
3		enforcement employees), "final rate of earnings".
4		(2) In Articles 8, 9, 10, 11, and 12, "highest average
5		annual salary for any 4 consecutive years within the last
6		10 years of service immediately preceding the date of
7		withdrawal".
8		(3) In Article 13, "average final salary".
9		(4) In Article 14, "final average compensation".
10		(5) In Article 17, "average salary".
11		(6) In Section 22-207, "wages or salary received by him
12		at the date of retirement or discharge".
13		(b-5) Beginning on January 1, 2011, for all purposes under
14		this Code (including without limitation the calculation of
15		benefits and employee contributions), the annual earnings,
16		salary, or wages (based on the plan year) of a member or
17		participant to whom this Section applies shall not exceed
18		$106,800; however, that amount shall annually thereafter be
19		increased by the lesser of (i) 3% of that amount, including all
20		previous adjustments, or (ii) one-half the annual unadjusted
21		percentage increase (but not less than zero) in the consumer
22		price index-u for the 12 months ending with the September
23		preceding each November 1, including all previous adjustments.
24		For the purposes of this Section, "consumer price index-u"
25		means the index published by the Bureau of Labor Statistics of
26		the United States Department of Labor that measures the average

HB4045 Engrossed - 52 - LRB100 12674 RPS 26063 b
1		change in prices of goods and services purchased by all urban
2		consumers, United States city average, all items, 1982-84 =
3		100. The new amount resulting from each annual adjustment shall
4		be determined by the Public Pension Division of the Department
5		of Insurance and made available to the boards of the retirement
6		systems and pension funds by November 1 of each year.
7		(c) A member or participant is entitled to a retirement
8		annuity upon written application if he or she has attained age
9		67 (beginning January 1, 2015, age 65 with respect to service
10		under Article 12 of this Code that is subject to this Section)
11		and has at least 10 years of service credit and is otherwise
12		eligible under the requirements of the applicable Article.
13		A member or participant who has attained age 62 (beginning
14		January 1, 2015, age 60 with respect to service under Article
15		12 of this Code that is subject to this Section) and has at
16		least 10 years of service credit and is otherwise eligible
17		under the requirements of the applicable Article may elect to
18		receive the lower retirement annuity provided in subsection (d)
19		of this Section.
20		(d) The retirement annuity of a member or participant who
21		is retiring after attaining age 62 (beginning January 1, 2015,
22		age 60 with respect to service under Article 12 of this Code
23		that is subject to this Section) with at least 10 years of
24		service credit shall be reduced by one-half of 1% for each full
25		month that the member's age is under age 67 (beginning January
26		1, 2015, age 65 with respect to service under Article 12 of

HB4045 Engrossed - 53 - LRB100 12674 RPS 26063 b
1		this Code that is subject to this Section).
2		(e) Any retirement annuity or supplemental annuity shall be
3		subject to annual increases on the January 1 occurring either
4		on or after the attainment of age 67 (beginning January 1,
5		2015, age 65 with respect to service under Article 12 of this
6		Code that is subject to this Section) or the first anniversary
7		of the annuity start date, whichever is later. Each annual
8		increase shall be calculated at 3% or one-half the annual
9		unadjusted percentage increase (but not less than zero) in the
10		consumer price index-u for the 12 months ending with the
11		September preceding each November 1, whichever is less, of the
12		originally granted retirement annuity. If the annual
13		unadjusted percentage change in the consumer price index-u for
14		the 12 months ending with the September preceding each November
15		1 is zero or there is a decrease, then the annuity shall not be
16		increased.
17		(f) The initial survivor's or widow's annuity of an
18		otherwise eligible survivor or widow of a retired member or
19		participant who first became a member or participant on or
20		after January 1, 2011 shall be in the amount of 66 2/3% of the
21		retired member's or participant's retirement annuity at the
22		date of death. In the case of the death of a member or
23		participant who has not retired and who first became a member
24		or participant on or after January 1, 2011, eligibility for a
25		survivor's or widow's annuity shall be determined by the
26		applicable Article of this Code. The initial benefit shall be

HB4045 Engrossed - 54 - LRB100 12674 RPS 26063 b
1		66 2/3% of the earned annuity without a reduction due to age. A
2		child's annuity of an otherwise eligible child shall be in the
3		amount prescribed under each Article if applicable. Any
4		survivor's or widow's annuity shall be increased (1) on each
5		January 1 occurring on or after the commencement of the annuity
6		if the deceased member died while receiving a retirement
7		annuity or (2) in other cases, on each January 1 occurring
8		after the first anniversary of the commencement of the annuity.
9		Each annual increase shall be calculated at 3% or one-half the
10		annual unadjusted percentage increase (but not less than zero)
11		in the consumer price index-u for the 12 months ending with the
12		September preceding each November 1, whichever is less, of the
13		originally granted survivor's annuity. If the annual
14		unadjusted percentage change in the consumer price index-u for
15		the 12 months ending with the September preceding each November
16		1 is zero or there is a decrease, then the annuity shall not be
17		increased.
18		(g) The benefits in Section 14-110 apply only if the person
19		is a State policeman, a fire fighter in the fire protection
20		service of a department, or a security employee of the
21		Department of Corrections or the Department of Juvenile
22		Justice, as those terms are defined in subsection (b) of
23		Section 14-110. A person who meets the requirements of this
24		Section is entitled to an annuity calculated under the
25		provisions of Section 14-110, in lieu of the regular or minimum
26		retirement annuity, only if the person has withdrawn from

HB4045 Engrossed - 55 - LRB100 12674 RPS 26063 b
1		service with not less than 20 years of eligible creditable
2		service and has attained age 60, regardless of whether the
3		attainment of age 60 occurs while the person is still in
4		service.
5		(h) If a person who first becomes a member or a participant
6		of a retirement system or pension fund subject to this Section
7		on or after January 1, 2011 is receiving a retirement annuity
8		or retirement pension under that system or fund and becomes a
9		member or participant under any other system or fund created by
10		this Code and is employed on a full-time basis, except for
11		those members or participants exempted from the provisions of
12		this Section under subsection (a) of this Section, then the
13		person's retirement annuity or retirement pension under that
14		system or fund shall be suspended during that employment. Upon
15		termination of that employment, the person's retirement
16		annuity or retirement pension payments shall resume and be
17		recalculated if recalculation is provided for under the
18		applicable Article of this Code.
19		If a person who first becomes a member of a retirement
20		system or pension fund subject to this Section on or after
21		January 1, 2012 and is receiving a retirement annuity or
22		retirement pension under that system or fund and accepts on a
23		contractual basis a position to provide services to a
24		governmental entity from which he or she has retired, then that
25		person's annuity or retirement pension earned as an active
26		employee of the employer shall be suspended during that

HB4045 Engrossed - 56 - LRB100 12674 RPS 26063 b
1		contractual service. A person receiving an annuity or
2		retirement pension under this Code shall notify the pension
3		fund or retirement system from which he or she is receiving an
4		annuity or retirement pension, as well as his or her
5		contractual employer, of his or her retirement status before
6		accepting contractual employment. A person who fails to submit
7		such notification shall be guilty of a Class A misdemeanor and
8		required to pay a fine of $1,000. Upon termination of that
9		contractual employment, the person's retirement annuity or
10		retirement pension payments shall resume and, if appropriate,
11		be recalculated under the applicable provisions of this Code.
12		(i) (Blank).
13		(j) Except for Sections 1-161 and 1-162, in In the case of
14		a conflict between the provisions of this Section and any other
15		provision of this Code, the provisions of this Section shall
16		control.
17		(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
18		eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
19		(40 ILCS 5/1-161 new)
20		Sec. 1-161. Optional benefits for certain Tier 2 members
21		under Articles 14, 15, and 16.
22		(a) Notwithstanding any other provision of this Code to the
23		contrary, the provisions of this Section apply to a person who,
24		on or after 6 months after the effective date of this
25		amendatory Act of the 100th General Assembly, first becomes a

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1		member or a participant under Article 14, 15, or 16 and who
2		does not make the election under subsection (b) or (c),
3		whichever is applicable. The provisions of this Section do not
4		apply to any participant in a self-managed plan or to a covered
5		employee under Article 14.
6		(b) In lieu of the benefits provided under this Section, a
7		member or participant, except for a participant under Article
8		15, may irrevocably elect the benefits under Section 1-160 and
9		the benefits otherwise applicable to that member or
10		participant. The election must be made within 30 days after
11		becoming a member or participant. Each retirement system shall
12		establish procedures for making this election.
13		(c) A participant under Article 15 may irrevocably elect
14		the benefits otherwise provided to a Tier 2 participant under
15		Article 15. The election must be made within 30 days after
16		becoming a participant. The retirement system under Article 15
17		shall establish procedures for making this election.
18		(d) "Final average salary" means the average monthly (or
19		annual) salary obtained by dividing the total salary or
20		earnings calculated under the Article applicable to the member
21		or participant during the last 120 months (or 10 years) of
22		service in which the total salary or earnings calculated under
23		the applicable Article was the highest by the number of months
24		(or years) of service in that period. For the purposes of a
25		person who first becomes a member or participant of any
26		retirement system to which this Section applies on or after 6

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1		months after the effective date of this amendatory Act of the
2		100th General Assembly, in this Code, "final average salary"
3		shall be substituted for "final average compensation" in
4		Article 14.
5		(e) Beginning 6 months after the effective date of this
6		amendatory Act of the 100th General Assembly, for all purposes
7		under this Code (including without limitation the calculation
8		of benefits and employee contributions), the annual earnings,
9		salary, or wages (based on the plan year) of a member or
10		participant to whom this Section applies shall not at any time
11		exceed the federal Social Security Wage Base then in effect.
12		(f) A member or participant is entitled to a retirement
13		annuity upon written application if he or she has attained the
14		normal retirement age determined by the Social Security
15		Administration for that member or participant's year of birth,
16		but no earlier than 67 years of age, and has at least 10 years
17		of service credit and is otherwise eligible under the
18		requirements of the applicable Article.
19		(g) The amount of the retirement annuity to which a member
20		or participant is entitled shall be computed by multiplying
21		1.25% for each year of service credit by his or her final
22		average salary.
23		(h) Any retirement annuity or supplemental annuity shall be
24		subject to annual increases on the first anniversary of the
25		annuity start date. Each annual increase shall be one-half the
26		annual unadjusted percentage increase (but not less than zero)

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1		in the consumer price index-w for the 12 months ending with the
2		September preceding each November 1 of the originally granted
3		retirement annuity. If the annual unadjusted percentage change
4		in the consumer price index-w for the 12 months ending with the
5		September preceding each November 1 is zero or there is a
6		decrease, then the annuity shall not be increased.
7		For the purposes of this Section, "consumer price index-w"
8		means the index published by the Bureau of Labor Statistics of
9		the United States Department of Labor that measures the average
10		change in prices of goods and services purchased by Urban Wage
11		Earners and Clerical Workers, United States city average, all
12		items, 1982-84 = 100. The new amount resulting from each annual
13		adjustment shall be determined by the Public Pension Division
14		of the Department of Insurance and made available to the boards
15		of the retirement systems and pension funds by November 1 of
16		each year.
17		(i) The initial survivor's or widow's annuity of an
18		otherwise eligible survivor or widow of a retired member or
19		participant who first became a member or participant on or
20		after 6 months after the effective date of this amendatory Act
21		of the 100th General Assembly shall be in the amount of 66 2/3%
22		of the retired member's or participant's retirement annuity at
23		the date of death. In the case of the death of a member or
24		participant who has not retired and who first became a member
25		or participant on or after 6 months after the effective date of
26		this amendatory Act of the 100th General Assembly, eligibility

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1		for a survivor's or widow's annuity shall be determined by the
2		applicable Article of this Code. The benefit shall be 66 2/3%
3		of the earned annuity without a reduction due to age. A child's
4		annuity of an otherwise eligible child shall be in the amount
5		prescribed under each Article if applicable.
6		(j) In lieu of any other employee contributions, except for
7		the contribution to the defined contribution plan under
8		subsection (k) of this Section, each employee shall contribute
9		6.2% of his her or salary to the retirement system. However,
10		the employee contribution under this subsection shall not
11		exceed the amount of the normal cost of the benefits under this
12		Section (except for the defined contribution plan under
13		subsection (k) of this Section), expressed as a percentage of
14		payroll and determined on or before November 1 of each year by
15		the board of trustees of the retirement system. If the board of
16		trustees of the retirement system determines that the 6.2%
17		employee contribution rate exceeds the normal cost of the
18		benefits under this Section (except for the defined
19		contribution plan under subsection (k) of this Section), then
20		on or before December 1 of that year, the board of trustees
21		shall certify the amount of the normal cost of the benefits
22		under this Section (except for the defined contribution plan
23		under subsection (k) of this Section), expressed as a
24		percentage of payroll, to the State Actuary and the Commission
25		on Government Forecasting and Accountability, and the employee
26		contribution under this subsection shall be reduced to that

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1		amount beginning January 1 of the following year. Thereafter,
2		if the normal cost of the benefits under this Section (except
3		for the defined contribution plan under subsection (k) of this
4		Section), expressed as a percentage of payroll and determined
5		on or before November 1 of each year by the board of trustees
6		of the retirement system, exceeds 6.2% of salary, then on or
7		before December 1 of that year, the board of trustees shall
8		certify the normal cost to the State Actuary and the Commission
9		on Government Forecasting and Accountability, and the employee
10		contributions shall revert back to 6.2% of salary beginning
11		January 1 of the following year.
12		(k) No later than 5 months after the effective date of this
13		amendatory Act of the 100th General Assembly, each retirement
14		system under Article 14, 15, or 16 shall prepare and implement
15		a defined contribution plan for members or participants who are
16		subject to this Section. The defined contribution plan
17		developed under this subsection shall be a plan that aggregates
18		employer and employee contributions in individual participant
19		accounts which, after meeting any other requirements, are used
20		for payouts after retirement in accordance with this subsection
21		and any other applicable laws.
22		(1) Each member or participant shall contribute a
23		minimum of 4% of his or her salary to the defined
24		contribution plan.
25		(2) For each participant in the defined contribution
26		plan who has been employed with the same employer for at

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1		least one year, employer contributions shall be paid into
2		that participant's accounts at a rate expressed as a
3		percentage of salary. This rate may be set for individual
4		employees, but shall be no higher than 6% of salary and
5		shall be no lower than 2% of salary.
6		(3) Employer contributions shall vest when those
7		contributions are paid into a member's or participant's
8		account.
9		(4) The defined contribution plan shall provide a
10		variety of options for investments. These options shall
11		include investments handled by the Illinois State Board of
12		Investment as well as private sector investment options.
13		(5) The defined contribution plan shall provide a
14		variety of options for payouts to retirees and their
15		survivors.
16		(6) To the extent authorized under federal law and as
17		authorized by the retirement system, the defined
18		contribution plan shall allow former participants in the
19		plan to transfer or roll over employee and employer
20		contributions, and the earnings thereon, into other
21		qualified retirement plans.
22		(7) Each retirement system shall reduce the employee
23		contributions credited to the member's defined
24		contribution plan account by an amount determined by that
25		retirement system to cover the cost of offering the
26		benefits under this subsection and any applicable

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1		administrative fees.
2		(8) No person shall begin participating in the defined
3		contribution plan until it has attained qualified plan
4		status and received all necessary approvals from the U.S.
5		Internal Revenue Service.
6		(l) By accepting the benefits under this Section, a member
7		or participant acknowledges and consents that benefits once
8		earned may not be diminished, but that future benefits may be
9		modified, including, but not limited to, changes in the
10		retirement age at which a member or participant becomes
11		eligible to receive future benefits, changes in the amount of
12		the automatic annual increase for those future benefits, or the
13		amount of the retirement annuity. Any increase in benefits
14		under this Section applicable to persons under Article 15 or 16
15		does not apply unless it is approved by resolution or ordinance
16		of the governing body of the unit of local government with
17		regard to the members or participants under that unit of local
18		government.
19		(m) In the case of a conflict between the provisions of
20		this Section and any other provision of this Code, the
21		provisions of this Section shall control.
22		(40 ILCS 5/1-162 new)
23		Sec. 1-162. Optional benefits for certain Tier 2 members of
24		pension funds under Articles 7, 8, 9, 10, 11, 12, 13, and 17.
25		(a) As used in this Section:

HB4045 Engrossed - 64 - LRB100 12674 RPS 26063 b
1		"Affected pension fund" means a pension fund established
2		under Article 7, 8, 9, 10, 11, 12, 13, or 17 that the governing
3		body of the unit of local government has designated as an
4		affected pension fund by adoption of a resolution or ordinance.
5		"Resolution or ordinance date" means the date on which the
6		governing body of the unit of local government designates a
7		pension fund under Article 7, 8, 9, 10, 11, 12, 13, or 17 as an
8		affected pension fund by adoption of a resolution or ordinance.
9		(b) Notwithstanding any other provision of this Code to the
10		contrary, the provisions of this Section apply to a person who
11		first becomes a member or a participant in an affected pension
12		fund on or after 6 months after the resolution or ordinance
13		date and who does not make the election under subsection (c).
14		The provisions of this Section do not apply to a sheriff's law
15		enforcement employee under Article 7.
16		(c) In lieu of the benefits provided under this Section, a
17		member or participant may irrevocably elect the benefits under
18		Section 1-160 and the benefits otherwise applicable to that
19		member or participant. The election must be made within 30 days
20		after becoming a member or participant. Each affected pension
21		fund shall establish procedures for making this election.
22		(d) "Final average salary" means the average monthly (or
23		annual) salary obtained by dividing the total salary or
24		earnings calculated under the Article applicable to the member
25		or participant during the last 120 months (or 10 years) of
26		service in which the total salary or earnings calculated under

HB4045 Engrossed - 65 - LRB100 12674 RPS 26063 b
1		the applicable Article was the highest by the number of months
2		(or years) of service in that period. For the purposes of a
3		person who first becomes a member or participant of an affected
4		pension fund on or after 6 months after the ordinance or
5		resolution date, in this Code, "final average salary" shall be
6		substituted for the following:
7		(1) In Article 7, (except for service as sheriff's law
8		enforcement employees), "final rate of earnings".
9		(2) In Articles 8, 9, 10, 11, and 12, "highest average
10		annual salary for any 4 consecutive years within the last
11		10 years of service immediately preceding the date of
12		withdrawal".
13		(3) In Article 13, "average final salary".
14		(4) In Article 17, "average salary".
15		(e) Beginning 6 months after the resolution or ordinance
16		date, for all purposes under this Code (including without
17		limitation the calculation of benefits and employee
18		contributions), the annual earnings, salary, or wages (based on
19		the plan year) of a member or participant to whom this Section
20		applies shall not at any time exceed the federal Social
21		Security Wage Base then in effect.
22		(f) A member or participant is entitled to a retirement
23		annuity upon written application if he or she has attained the
24		normal retirement age determined by the Social Security
25		Administration for that member or participant's year of birth,
26		but no earlier than 67 years of age, and has at least 10 years

HB4045 Engrossed - 66 - LRB100 12674 RPS 26063 b
1		of service credit and is otherwise eligible under the
2		requirements of the applicable Article.
3		(g) The amount of the retirement annuity to which a member
4		or participant is entitled shall be computed by multiplying
5		1.25% for each year of service credit by his or her final
6		average salary.
7		(h) Any retirement annuity or supplemental annuity shall be
8		subject to annual increases on the first anniversary of the
9		annuity start date. Each annual increase shall be one-half the
10		annual unadjusted percentage increase (but not less than zero)
11		in the consumer price index-w for the 12 months ending with the
12		September preceding each November 1 of the originally granted
13		retirement annuity. If the annual unadjusted percentage change
14		in the consumer price index-w for the 12 months ending with the
15		September preceding each November 1 is zero or there is a
16		decrease, then the annuity shall not be increased.
17		For the purposes of this Section, "consumer price index-w"
18		means the index published by the Bureau of Labor Statistics of
19		the United States Department of Labor that measures the average
20		change in prices of goods and services purchased by Urban Wage
21		Earners and Clerical Workers, United States city average, all
22		items, 1982-84 = 100. The new amount resulting from each annual
23		adjustment shall be determined by the Public Pension Division
24		of the Department of Insurance and made available to the boards
25		of the retirement systems and pension funds by November 1 of
26		each year.

HB4045 Engrossed - 67 - LRB100 12674 RPS 26063 b
1		(i) The initial survivor's or widow's annuity of an
2		otherwise eligible survivor or widow of a retired member or
3		participant who first became a member or participant on or
4		after 6 months after the resolution or ordinance date shall be
5		in the amount of 66 2/3% of the retired member's or
6		participant's retirement annuity at the date of death. In the
7		case of the death of a member or participant who has not
8		retired and who first became a member or participant on or
9		after 6 months after the resolution or ordinance date,
10		eligibility for a survivor's or widow's annuity shall be
11		determined by the applicable Article of this Code. The benefit
12		shall be 66 2/3% of the earned annuity without a reduction due
13		to age. A child's annuity of an otherwise eligible child shall
14		be in the amount prescribed under each Article if applicable.
15		(j) In lieu of any other employee contributions, except for
16		the contribution to the defined contribution plan under
17		subsection (k) of this Section, each employee shall contribute
18		6.2% of his her or salary to the affected pension fund.
19		However, the employee contribution under this subsection shall
20		not exceed the amount of the normal cost of the benefits under
21		this Section (except for the defined contribution plan under
22		subsection (k) of this Section), expressed as a percentage of
23		payroll and determined on or before November 1 of each year by
24		the board of trustees of the affected pension fund. If the
25		board of trustees of the affected pension fund determines that
26		the 6.2% employee contribution rate exceeds the normal cost of

HB4045 Engrossed - 68 - LRB100 12674 RPS 26063 b
1		the benefits under this Section (except for the defined
2		contribution plan under subsection (k) of this Section), then
3		on or before December 1 of that year, the board of trustees
4		shall certify the amount of the normal cost of the benefits
5		under this Section (except for the defined contribution plan
6		under subsection (k) of this Section), expressed as a
7		percentage of payroll, to the State Actuary and the Commission
8		on Government Forecasting and Accountability, and the employee
9		contribution under this subsection shall be reduced to that
10		amount beginning January 1 of the following year. Thereafter,
11		if the normal cost of the benefits under this Section (except
12		for the defined contribution plan under subsection (k) of this
13		Section), expressed as a percentage of payroll and determined
14		on or before November 1 of each year by the board of trustees
15		of the affected pension fund, exceeds 6.2% of salary, then on
16		or before December 1 of that year, the board of trustees shall
17		certify the normal cost to the State Actuary and the Commission
18		on Government Forecasting and Accountability, and the employee
19		contributions shall revert back to 6.2% of salary beginning
20		January 1 of the following year.
21		(k) No later than 5 months after the resolution or
22		ordinance date, an affected pension fund shall prepare and
23		implement a defined contribution plan for members or
24		participants who are subject to this Section. The defined
25		contribution plan developed under this subsection shall be a
26		plan that aggregates employer and employee contributions in

HB4045 Engrossed - 69 - LRB100 12674 RPS 26063 b
1		individual participant accounts which, after meeting any other
2		requirements, are used for payouts after retirement in
3		accordance with this subsection and any other applicable laws.
4		(1) Each member or participant shall contribute a
5		minimum of 4% of his or her salary to the defined
6		contribution plan.
7		(2) For each participant in the defined contribution
8		plan who has been employed with the same employer for at
9		least one year, employer contributions shall be paid into
10		that participant's accounts at a rate expressed as a
11		percentage of salary. This rate may be set for individual
12		employees, but shall be no higher than 6% of salary and
13		shall be no lower than 2% of salary.
14		(3) Employer contributions shall vest when those
15		contributions are paid into a member's or participant's
16		account.
17		(4) The defined contribution plan shall provide a
18		variety of options for investments. These options shall
19		include investments handled by the Illinois State Board of
20		Investment as well as private sector investment options.
21		(5) The defined contribution plan shall provide a
22		variety of options for payouts to retirees and their
23		survivors.
24		(6) To the extent authorized under federal law and as
25		authorized by the affected pension fund, the defined
26		contribution plan shall allow former participants in the

HB4045 Engrossed - 70 - LRB100 12674 RPS 26063 b
1		plan to transfer or roll over employee and employer
2		contributions, and the earnings thereon, into other
3		qualified retirement plans.
4		(7) Each affected pension fund shall reduce the
5		employee contributions credited to the member's defined
6		contribution plan account by an amount determined by that
7		affected pension fund to cover the cost of offering the
8		benefits under this subsection and any applicable
9		administrative fees.
10		(8) No person shall begin participating in the defined
11		contribution plan until it has attained qualified plan
12		status and received all necessary approvals from the U.S.
13		Internal Revenue Service.
14		(l) By accepting the benefits under this Section, a member
15		or participant acknowledges and consents that benefits once
16		earned may not be diminished, but that future benefits may be
17		modified, including, but not limited to, changes in the
18		retirement age at which a member or participant becomes
19		eligible to receive future benefits, changes in the amount of
20		the automatic annual increase for those future benefits, or the
21		amount of the retirement annuity. Any increase in benefits
22		under this Section does not apply unless it is approved by
23		resolution or ordinance of the governing body of the unit of
24		local government with regard to the members or participants
25		under that unit of local government.
26		(m) In the case of a conflict between the provisions of

HB4045 Engrossed - 71 - LRB100 12674 RPS 26063 b
1		this Section and any other provision of this Code, the
2		provisions of this Section shall control.
3		(40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
4		Sec. 2-101. Creation of system. A retirement system is
5		created to provide retirement annuities, survivor's annuities
6		and other benefits for certain members of the General Assembly,
7		certain elected state officials, and their beneficiaries.
8		The system shall be known as the "General Assembly
9		Retirement System". All its funds and property shall be a trust
10		separate from all other entities, maintained for the purpose of
11		securing payment of annuities and benefits under this Article.
12		Participation in the retirement system created under this
13		Article is restricted to persons who became participants before
14		the effective date of this amendatory Act of the 100th General
15		Assembly. Beginning on that date, the System shall not accept
16		any new participants.
17		(Source: P.A. 83-1440.)
18		(40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
19		Sec. 2-105. Member. "Member": Members of the General
20		Assembly of this State, including persons who enter military
21		service while a member of the General Assembly, and any person
22		serving as Governor, Lieutenant Governor, Secretary of State,
23		Treasurer, Comptroller, or Attorney General for the period of
24		service in such office.

HB4045 Engrossed - 72 - LRB100 12674 RPS 26063 b
1		Any person who has served for 10 or more years as Clerk or
2		Assistant Clerk of the House of Representatives, Secretary or
3		Assistant Secretary of the Senate, or any combination thereof,
4		may elect to become a member of this system while thenceforth
5		engaged in such service by filing a written election with the
6		board. Any person so electing shall be deemed an active member
7		of the General Assembly for the purpose of validating and
8		transferring any service credits earned under any of the funds
9		and systems established under Articles 3 through 18 of this
10		Code.
11		However, notwithstanding any other provision of this
12		Article, a person shall not be deemed a member for the purposes
13		of this Article unless he or she became a participant of the
14		System before the effective date of this amendatory Act of the
15		100th General Assembly.
16		(Source: P.A. 85-1008.)
17		(40 ILCS 5/2-105.3 new)
18		Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
19		participant who first became a participant before January 1,
20		2011.
21		(40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
22		Sec. 2-107. Participant. "Participant": Any member who
23		elects to participate; and any former member who elects to
24		continue participation under Section 2-117.1, for the duration

HB4045 Engrossed - 73 - LRB100 12674 RPS 26063 b
1		of such continued participation. However, notwithstanding any
2		other provision of this Article, a person shall not be deemed a
3		participant for the purposes of this Article unless he or she
4		became a participant of the System before the effective date of
5		this amendatory Act of the 100th General Assembly.
6		(Source: P.A. 86-1488.)
7		(40 ILCS 5/2-107.9 new)
8		Sec. 2-107.9. Future increase in income. "Future increase
9		in income" means an increase to a Tier 1 employee's base pay
10		that is offered to the Tier 1 employee for service under this
11		Article after June 30, 2018 that qualifies as "salary", as
12		defined in Section 2-108, or would qualify as "salary" but for
13		the fact that it was offered to and accepted by the Tier 1
14		employee under the condition set forth in subsection (c) of
15		Section 2-110.3.
16		(40 ILCS 5/2-107.10 new)
17		Sec. 2-107.10. Base pay. As used in Section 2-107.9 of
18		this Code, "base pay" means the Tier 1 employee's annualized
19		rate of salary as of June 30, 2018. For a person returning to
20		active service as a Tier 1 employee after June 30, 2018,
21		however, "base pay" means the employee's annualized rate of
22		salary as of the employee's last date of service prior to July
23		1, 2018. The System shall calculate the base pay of each Tier 1
24		employee pursuant to this Section.

HB4045 Engrossed - 74 - LRB100 12674 RPS 26063 b
1		(40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
2		(Text of Section WITHOUT the changes made by P.A. 98-599,
3		which has been held unconstitutional)
4		Sec. 2-108. Salary. "Salary":
5		(1) For members of the General Assembly, the total
6		compensation paid to the member by the State for one year of
7		service, including the additional amounts, if any, paid to the
8		member as an officer pursuant to Section 1 of "An Act in
9		relation to the compensation and emoluments of the members of
10		the General Assembly", approved December 6, 1907, as now or
11		hereafter amended.
12		(2) For the State executive officers specified in Section
13		2-105, the total compensation paid to the member for one year
14		of service.
15		(3) For members of the System who are participants under
16		Section 2-117.1, or who are serving as Clerk or Assistant Clerk
17		of the House of Representatives or Secretary or Assistant
18		Secretary of the Senate, the total compensation paid to the
19		member for one year of service, but not to exceed the salary of
20		the highest salaried officer of the General Assembly.
21		However, in the event that federal law results in any
22		participant receiving imputed income based on the value of
23		group term life insurance provided by the State, such imputed
24		income shall not be included in salary for the purposes of this
25		Article.

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1		Notwithstanding any other provision of this Section,
2		"salary" does not include any future increase in income that is
3		offered for service to a Tier 1 employee under this Article
4		pursuant to the condition set forth in subsection (c) of
5		Section 2-110.3 and accepted under that condition by a Tier 1
6		employee who has made the election under paragraph (2) of
7		subsection (a) of Section 2-110.3.
8		Notwithstanding any other provision of this Section,
9		"salary" does not include any consideration payment made to a
10		Tier 1 employee.
11		(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
12		(40 ILCS 5/2-110.3 new)
13		Sec. 2-110.3. Election by Tier 1 employees.
14		(a) Each active Tier 1 employee shall make an irrevocable
15		election either:
16		(1) to agree to delay his or her eligibility for
17		automatic annual increases in retirement annuity as
18		provided in subsection (a-1) of Section 2-119.1 and to have
19		the amount of the automatic annual increases in his or her
20		retirement annuity and survivor's annuity that are
21		otherwise provided for in this Article calculated,
22		instead, as provided in subsection (a-1) of Section
23		2-119.1; or
24		(2) to not agree to paragraph (1) of this subsection.
25		The election required under this subsection (a) shall be

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1		made by each active Tier 1 employee no earlier than January 1,
2		2018 and no later than March 31, 2018, except that a person who
3		returns to active service as a Tier 1 employee under this
4		Article on or after January 1, 2018 and has not yet made an
5		election under this Section must make the election under this
6		subsection (a) within 60 days after returning to active service
7		as a Tier 1 employee.
8		If a Tier 1 employee fails for any reason to make a
9		required election under this subsection within the time
10		specified, then the employee shall be deemed to have made the
11		election under paragraph (2) of this subsection.
12		(a-5) If this Section is enjoined or stayed by an Illinois
13		court or a court of competent jurisdiction pending the entry of
14		a final and unappealable decision, and this Section is
15		determined to be constitutional or otherwise valid by a final
16		unappealable decision of an Illinois court or a court of
17		competent jurisdiction, then the election procedure set forth
18		in subsection (a) of this Section shall commence on the 180th
19		calendar day after the date of the issuance of the final
20		unappealable decision and shall conclude at the end of the
21		270th calendar day after that date.
22		(a-10) All elections under subsection (a) that are made or
23		deemed to be made before July 1, 2018 shall take effect on July
24		1, 2018. Elections that are made or deemed to be made on or
25		after July 1, 2018 shall take effect on the first day of the
26		month following the month in which the election is made or

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1		deemed to be made.
2		(b) As adequate and legal consideration provided under this
3		amendatory Act of the 100th General Assembly for making an
4		election under paragraph (1) of subsection (a) of this Section,
5		the State of Illinois shall be expressly and irrevocably
6		prohibited from offering any future increases in income to a
7		Tier 1 employee who has made an election under paragraph (1) of
8		subsection (a) of this Section on the condition of not
9		constituting salary under Section 2-108.
10		As adequate and legal consideration provided under this
11		amendatory Act of the 100th General Assembly for making an
12		election under paragraph (1) of subsection (a) of this Section,
13		each Tier 1 employee who has made an election under paragraph
14		(1) of subsection (a) of this Section shall receive a
15		consideration payment equal to 10% of the contributions made by
16		or on behalf of the employee under Section 2-126 before the
17		effective date of that election. The State Comptroller shall
18		pay the consideration payment to the Tier 1 employee out of
19		funds appropriated for that purpose under Section 1.9 of the
20		State Pension Funds Continuing Appropriation Act. The System
21		shall calculate the amount of each consideration payment and,
22		by July 1, 2018, shall certify to the State Comptroller the
23		amount of the consideration payment, together with the name,
24		address, and any other available payment information of the
25		Tier 1 employee as found in the records of the System. The
26		System shall make additional calculations and certifications

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1		of consideration payments to the State Comptroller as the
2		System deems necessary.
3		(c) A Tier 1 employee who makes the election under
4		paragraph (2) of subsection (a) of this Section shall not be
5		subject to paragraph (1) of subsection (a) of this Section.
6		However, each future increase in income offered for service as
7		a member under this Article to a Tier 1 employee who has made
8		the election under paragraph (2) of subsection (a) of this
9		Section shall be offered expressly and irrevocably on the
10		condition of not constituting salary under Section 2-108 and
11		that the Tier 1 employee's acceptance of the offered future
12		increase in income shall constitute his or her agreement to
13		that condition.
14		(d) The System shall make a good faith effort to contact
15		each Tier 1 employee subject to this Section. The System shall
16		mail information describing the required election to each Tier
17		1 employee by United States Postal Service mail to his or her
18		last known address on file with the System. If the Tier 1
19		employee is not responsive to other means of contact, it is
20		sufficient for the System to publish the details of any
21		required elections on its website or to publish those details
22		in a regularly published newsletter or other existing public
23		forum.
24		Tier 1 employees who are subject to this Section shall be
25		provided with an election packet containing information
26		regarding their options, as well as the forms necessary to make

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1		the required election. Upon request, the System shall offer
2		Tier 1 employees an opportunity to receive information from the
3		System before making the required election. The information may
4		be provided through video materials, group presentations,
5		individual consultation with a member or authorized
6		representative of the System in person or by telephone or other
7		electronic means, or any combination of those methods. The
8		System shall not provide advice or counseling with respect to
9		which election a Tier 1 employee should make or specific to the
10		legal or tax circumstances of or consequences to the Tier 1
11		employee.
12		The System shall inform Tier 1 employees in the election
13		packet required under this subsection that the Tier 1 employee
14		may also wish to obtain information and counsel relating to the
15		election required under this Section from any other available
16		source, including, but not limited to, labor organizations and
17		private counsel.
18		In no event shall the System, its staff, or the Board be
19		held liable for any information given to a member regarding the
20		elections under this Section. The System shall coordinate with
21		the Illinois Department of Central Management Services and each
22		other retirement system administering an election in
23		accordance with this amendatory Act of the 100th General
24		Assembly to provide information concerning the impact of the
25		election set forth in this Section.
26		(e) Notwithstanding any other provision of law, each future

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1		increase in income offered by the State of Illinois for service
2		as a member must be offered expressly and irrevocably on the
3		condition of not constituting "salary" under Section 2-108 to
4		any Tier 1 employee who has made an election under paragraph
5		(2) of subsection (a) of this Section. The offer shall also
6		provide that the Tier 1 employee's acceptance of the offered
7		future increase in income shall constitute his or her agreement
8		to the condition set forth in this subsection.
9		For purposes of legislative intent, the condition set forth
10		in this subsection shall be construed in a manner that ensures
11		that the condition is not violated or circumvented through any
12		contrivance of any kind.
13		(f) A member's election under this Section is not a
14		prohibited election under subdivision (j)(1) of Section 1-119
15		of this Code.
16		(g) No provision of this Section shall be interpreted in a
17		way that would cause the System to cease to be a qualified plan
18		under Section 401(a) of the Internal Revenue Code of 1986. The
19		provisions of this Section shall be subject to and implemented
20		in a manner that complies with Section 11 of Article IV of the
21		Illinois Constitution.
22		(h) If an election created by this amendatory Act in any
23		other Article of this Code or any change deriving from that
24		election is determined to be unconstitutional or otherwise
25		invalid by a final unappealable decision of an Illinois court
26		or a court of competent jurisdiction, the invalidity of that

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1		provision shall not in any way affect the validity of this
2		Section or the changes deriving from the election required
3		under this Section.
4		(40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
5		(Text of Section WITHOUT the changes made by P.A. 98-599,
6		which has been held unconstitutional)
7		Sec. 2-119.1. Automatic increase in retirement annuity.
8		(a) Except as provided in subsection (a-1), a A participant
9		who retires after June 30, 1967, and who has not received an
10		initial increase under this Section before the effective date
11		of this amendatory Act of 1991, shall, in January or July next
12		following the first anniversary of retirement, whichever
13		occurs first, and in the same month of each year thereafter,
14		but in no event prior to age 60, have the amount of the
15		originally granted retirement annuity increased as follows:
16		for each year through 1971, 1 1/2%; for each year from 1972
17		through 1979, 2%; and for 1980 and each year thereafter, 3%.
18		Annuitants who have received an initial increase under this
19		subsection prior to the effective date of this amendatory Act
20		of 1991 shall continue to receive their annual increases in the
21		same month as the initial increase.
22		(a-1) Notwithstanding any other provision of this Article,
23		for a Tier 1 employee who made the election under paragraph (1)
24		of subsection (a) of Section 2-110.3:
25		(1) The initial increase in retirement annuity under

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1		this Section shall occur on the January 1 occurring either
2		on or after the attainment of age 67 or the fifth
3		anniversary of the annuity start date, whichever is
4		earlier.
5		(2) The amount of each automatic annual increase in
6		retirement annuity or survivor's annuity occurring on or
7		after the effective date of that election shall be
8		calculated as a percentage of the originally granted
9		retirement annuity or survivor's annuity, equal to 3% or
10		one-half the annual unadjusted percentage increase (but
11		not less than zero) in the consumer price index-u for the
12		12 months ending with the September preceding each November
13		1, whichever is less. If the annual unadjusted percentage
14		change in the consumer price index-u for the 12 months
15		ending with the September preceding each November 1 is zero
16		or there is a decrease, then the annuity shall not be
17		increased.
18		For the purposes of this Section, "consumer price index-u"
19		means the index published by the Bureau of Labor Statistics of
20		the United States Department of Labor that measures the average
21		change in prices of goods and services purchased by all urban
22		consumers, United States city average, all items, 1982-84 =
23		100. The new amount resulting from each annual adjustment shall
24		be determined by the Public Pension Division of the Department
25		of Insurance and made available to the board of the retirement
26		system by November 1 of each year.

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1		(b) Beginning January 1, 1990, for eligible participants
2		who remain in service after attaining 20 years of creditable
3		service, the 3% increases provided under subsection (a) shall
4		begin to accrue on the January 1 next following the date upon
5		which the participant (1) attains age 55, or (2) attains 20
6		years of creditable service, whichever occurs later, and shall
7		continue to accrue while the participant remains in service;
8		such increases shall become payable on January 1 or July 1,
9		whichever occurs first, next following the first anniversary of
10		retirement. For any person who has service credit in the System
11		for the entire period from January 15, 1969 through December
12		31, 1992, regardless of the date of termination of service, the
13		reference to age 55 in clause (1) of this subsection (b) shall
14		be deemed to mean age 50.
15		This subsection (b) does not apply to any person who first
16		becomes a member of the System after August 8, 2003 (the
17		effective date of Public Act 93-494) this amendatory Act of the
18		93rd General Assembly.
19		(b-5) Notwithstanding any other provision of this Article,
20		a participant who first becomes a participant on or after
21		January 1, 2011 (the effective date of Public Act 96-889)
22		shall, in January or July next following the first anniversary
23		of retirement, whichever occurs first, and in the same month of
24		each year thereafter, but in no event prior to age 67, have the
25		amount of the retirement annuity then being paid increased by
26		3% or the annual unadjusted percentage increase in the Consumer

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1		Price Index for All Urban Consumers as determined by the Public
2		Pension Division of the Department of Insurance under
3		subsection (a) of Section 2-108.1, whichever is less.
4		(c) The foregoing provisions relating to automatic
5		increases are not applicable to a participant who retires
6		before having made contributions (at the rate prescribed in
7		Section 2-126) for automatic increases for less than the
8		equivalent of one full year. However, in order to be eligible
9		for the automatic increases, such a participant may make
10		arrangements to pay to the system the amount required to bring
11		the total contributions for the automatic increase to the
12		equivalent of one year's contributions based upon his or her
13		last salary.
14		(d) A participant who terminated service prior to July 1,
15		1967, with at least 14 years of service is entitled to an
16		increase in retirement annuity beginning January, 1976, and to
17		additional increases in January of each year thereafter.
18		The initial increase shall be 1 1/2% of the originally
19		granted retirement annuity multiplied by the number of full
20		years that the annuitant was in receipt of such annuity prior
21		to January 1, 1972, plus 2% of the originally granted
22		retirement annuity for each year after that date. The
23		subsequent annual increases shall be at the rate of 2% of the
24		originally granted retirement annuity for each year through
25		1979 and at the rate of 3% for 1980 and thereafter.
26		(e) Beginning January 1, 1990, and except as provided in

HB4045 Engrossed - 85 - LRB100 12674 RPS 26063 b
1		subsection (a-1), all automatic annual increases payable under
2		this Section shall be calculated as a percentage of the total
3		annuity payable at the time of the increase, including previous
4		increases granted under this Article.
5		(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
6		(40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
7		(Text of Section WITHOUT the changes made by P.A. 98-599,
8		which has been held unconstitutional)
9		Sec. 2-124. Contributions by State.
10		(a) The State shall make contributions to the System by
11		appropriations of amounts which, together with the
12		contributions of participants, interest earned on investments,
13		and other income will meet the cost of maintaining and
14		administering the System on a 90% funded basis in accordance
15		with actuarial recommendations.
16		(b) The Board shall determine the amount of State
17		contributions required for each fiscal year on the basis of the
18		actuarial tables and other assumptions adopted by the Board and
19		the prescribed rate of interest, using the formula in
20		subsection (c).
21		(c) For State fiscal years 2018 through 2045 (except as
22		otherwise provided for fiscal year 2019), the minimum
23		contribution to the System to be made by the State for each
24		fiscal year shall be an amount determined by the System to be
25		sufficient to bring the total assets of the System up to 90% of

HB4045 Engrossed - 86 - LRB100 12674 RPS 26063 b
1		the total actuarial liabilities of the System by the end of
2		State fiscal year 2045. In making these determinations, the
3		required State contribution shall be calculated each year as a
4		level percentage of total payroll, including payroll that is
5		not deemed pensionable, but excluding payroll attributable to
6		participants in the defined contribution plan under Section
7		2-165.1, over the years remaining to and including fiscal year
8		2045 and shall be determined under the projected unit credit
9		actuarial cost method.
10		For State fiscal year 2019:
11		(1) The initial calculation and certification shall be
12		based on the amount determined above.
13		(2) For purposes of the recertification due on or
14		before May 1, 2018, the recalculation of the required State
15		contribution for fiscal year 2019 shall take into account
16		the effect on the System's liabilities of the elections
17		made under Section 2-110.3.
18		(3) For purposes of the recertification due on or
19		before October 1, 2018, the total required State
20		contribution for fiscal year 2019 shall be reduced by the
21		amount of the consideration payments made to Tier 1
22		employees who made the election under paragraph (1) of
23		subsection (a) of Section 2-110.3.
24		Beginning in State fiscal year 2018, any increase or
25		decrease in State contribution over the prior fiscal year due
26		exclusively to changes in actuarial or investment assumptions

HB4045 Engrossed - 87 - LRB100 12674 RPS 26063 b
1		adopted by the Board shall be included in the State
2		contribution to the System, as a percentage of the applicable
3		employee payroll, and shall be increased in equal annual
4		increments so that by the State fiscal year occurring 5 years
5		after the adoption of the actuarial or investment assumptions,
6		the State is contributing at the rate otherwise required under
7		this Section.
8		If Section 2-110.3 is determined to be unconstitutional or
9		otherwise invalid by a final unappealable decision of an
10		Illinois court or a court of competent jurisdiction, then the
11		changes made to this Section by this amendatory Act of the
12		100th General Assembly shall not take effect and are repealed
13		by operation of law.
14		For State fiscal years 2012 through 2017 2045, the minimum
15		contribution to the System to be made by the State for each
16		fiscal year shall be an amount determined by the System to be
17		sufficient to bring the total assets of the System up to 90% of
18		the total actuarial liabilities of the System by the end of
19		State fiscal year 2045. In making these determinations, the
20		required State contribution shall be calculated each year as a
21		level percentage of payroll over the years remaining to and
22		including fiscal year 2045 and shall be determined under the
23		projected unit credit actuarial cost method.
24		For State fiscal years 1996 through 2005, the State
25		contribution to the System, as a percentage of the applicable
26		employee payroll, shall be increased in equal annual increments

HB4045 Engrossed - 88 - LRB100 12674 RPS 26063 b
1		so that by State fiscal year 2011, the State is contributing at
2		the rate required under this Section.
3		Notwithstanding any other provision of this Article, the
4		total required State contribution for State fiscal year 2006 is
5		$4,157,000.
6		Notwithstanding any other provision of this Article, the
7		total required State contribution for State fiscal year 2007 is
8		$5,220,300.
9		For each of State fiscal years 2008 through 2009, the State
10		contribution to the System, as a percentage of the applicable
11		employee payroll, shall be increased in equal annual increments
12		from the required State contribution for State fiscal year
13		2007, so that by State fiscal year 2011, the State is
14		contributing at the rate otherwise required under this Section.
15		Notwithstanding any other provision of this Article, the
16		total required State contribution for State fiscal year 2010 is
17		$10,454,000 and shall be made from the proceeds of bonds sold
18		in fiscal year 2010 pursuant to Section 7.2 of the General
19		Obligation Bond Act, less (i) the pro rata share of bond sale
20		expenses determined by the System's share of total bond
21		proceeds, (ii) any amounts received from the General Revenue
22		Fund in fiscal year 2010, and (iii) any reduction in bond
23		proceeds due to the issuance of discounted bonds, if
24		applicable.
25		Notwithstanding any other provision of this Article, the
26		total required State contribution for State fiscal year 2011 is

HB4045 Engrossed - 89 - LRB100 12674 RPS 26063 b
1		the amount recertified by the System on or before April 1, 2011
2		pursuant to Section 2-134 and shall be made from the proceeds
3		of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
4		the General Obligation Bond Act, less (i) the pro rata share of
5		bond sale expenses determined by the System's share of total
6		bond proceeds, (ii) any amounts received from the General
7		Revenue Fund in fiscal year 2011, and (iii) any reduction in
8		bond proceeds due to the issuance of discounted bonds, if
9		applicable.
10		Beginning in State fiscal year 2046, the minimum State
11		contribution for each fiscal year shall be the amount needed to
12		maintain the total assets of the System at 90% of the total
13		actuarial liabilities of the System.
14		Amounts received by the System pursuant to Section 25 of
15		the Budget Stabilization Act or Section 8.12 of the State
16		Finance Act in any fiscal year do not reduce and do not
17		constitute payment of any portion of the minimum State
18		contribution required under this Article in that fiscal year.
19		Such amounts shall not reduce, and shall not be included in the
20		calculation of, the required State contributions under this
21		Article in any future year until the System has reached a
22		funding ratio of at least 90%. A reference in this Article to
23		the "required State contribution" or any substantially similar
24		term does not include or apply to any amounts payable to the
25		System under Section 25 of the Budget Stabilization Act.
26		Notwithstanding any other provision of this Section, the

HB4045 Engrossed - 90 - LRB100 12674 RPS 26063 b
1		required State contribution for State fiscal year 2005 and for
2		fiscal year 2008 and each fiscal year thereafter, as calculated
3		under this Section and certified under Section 2-134, shall not
4		exceed an amount equal to (i) the amount of the required State
5		contribution that would have been calculated under this Section
6		for that fiscal year if the System had not received any
7		payments under subsection (d) of Section 7.2 of the General
8		Obligation Bond Act, minus (ii) the portion of the State's
9		total debt service payments for that fiscal year on the bonds
10		issued in fiscal year 2003 for the purposes of that Section
11		7.2, as determined and certified by the Comptroller, that is
12		the same as the System's portion of the total moneys
13		distributed under subsection (d) of Section 7.2 of the General
14		Obligation Bond Act. In determining this maximum for State
15		fiscal years 2008 through 2010, however, the amount referred to
16		in item (i) shall be increased, as a percentage of the
17		applicable employee payroll, in equal increments calculated
18		from the sum of the required State contribution for State
19		fiscal year 2007 plus the applicable portion of the State's
20		total debt service payments for fiscal year 2007 on the bonds
21		issued in fiscal year 2003 for the purposes of Section 7.2 of
22		the General Obligation Bond Act, so that, by State fiscal year
23		2011, the State is contributing at the rate otherwise required
24		under this Section.
25		(d) For purposes of determining the required State
26		contribution to the System, the value of the System's assets

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1		shall be equal to the actuarial value of the System's assets,
2		which shall be calculated as follows:
3		As of June 30, 2008, the actuarial value of the System's
4		assets shall be equal to the market value of the assets as of
5		that date. In determining the actuarial value of the System's
6		assets for fiscal years after June 30, 2008, any actuarial
7		gains or losses from investment return incurred in a fiscal
8		year shall be recognized in equal annual amounts over the
9		5-year period following that fiscal year.
10		(e) For purposes of determining the required State
11		contribution to the system for a particular year, the actuarial
12		value of assets shall be assumed to earn a rate of return equal
13		to the system's actuarially assumed rate of return.
14		(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
15		96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
16		7-13-12.)
17		(40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)
18		(Text of Section WITHOUT the changes made by P.A. 98-599,
19		which has been held unconstitutional)
20		Sec. 2-126. Contributions by participants.
21		(a) Each participant shall contribute toward the cost of
22		his or her retirement annuity a percentage of each payment of
23		salary received by him or her for service as a member as
24		follows: for service between October 31, 1947 and January 1,
25		1959, 5%; for service between January 1, 1959 and June 30,

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1		1969, 6%; for service between July 1, 1969 and January 10,
2		1973, 6 1/2%; for service after January 10, 1973, 7%; for
3		service after December 31, 1981, 8 1/2%.
4		(b) Beginning August 2, 1949, each male participant, and
5		from July 1, 1971, each female participant shall contribute
6		towards the cost of the survivor's annuity 2% of salary.
7		A participant who has no eligible survivor's annuity
8		beneficiary may elect to cease making contributions for
9		survivor's annuity under this subsection. A survivor's annuity
10		shall not be payable upon the death of a person who has made
11		this election, unless prior to that death the election has been
12		revoked and the amount of the contributions that would have
13		been paid under this subsection in the absence of the election
14		is paid to the System, together with interest at the rate of 4%
15		per year from the date the contributions would have been made
16		to the date of payment.
17		(c) Beginning July 1, 1967, each participant shall
18		contribute 1% of salary towards the cost of automatic increase
19		in annuity provided in Section 2-119.1. These contributions
20		shall be made concurrently with contributions for retirement
21		annuity purposes.
22		(d) In addition, each participant serving as an officer of
23		the General Assembly shall contribute, for the same purposes
24		and at the same rates as are required of a regular participant,
25		on each additional payment received as an officer. If the
26		participant serves as an officer for at least 2 but less than 4

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1		years, he or she shall contribute an amount equal to the amount
2		that would have been contributed had the participant served as
3		an officer for 4 years. Persons who serve as officers in the
4		87th General Assembly but cannot receive the additional payment
5		to officers because of the ban on increases in salary during
6		their terms may nonetheless make contributions based on those
7		additional payments for the purpose of having the additional
8		payments included in their highest salary for annuity purposes;
9		however, persons electing to make these additional
10		contributions must also pay an amount representing the
11		corresponding employer contributions, as calculated by the
12		System.
13		(e) Notwithstanding any other provision of this Article,
14		the required contribution of a participant who first becomes a
15		participant on or after January 1, 2011 shall not exceed the
16		contribution that would be due under this Article if that
17		participant's highest salary for annuity purposes were
18		$106,800, plus any increases in that amount under Section
19		2-108.1.
20		(f) Beginning July 1, 2018 or the effective date of the
21		Tier 1 employee's election under paragraph (1) of subsection
22		(a) of Section 2-110.3, whichever is later, in lieu of the
23		contributions otherwise required under this Section, each Tier
24		1 employee who made the election under paragraph (1) of
25		subsection (a) of Section 2-110.3 shall contribute 8.5% of each
26		payment of salary toward the cost of his or her retirement

HB4045 Engrossed - 94 - LRB100 12674 RPS 26063 b
1		annuity and 1.85% of each payment of salary toward the cost of
2		the survivor's annuity.
3		(g) Notwithstanding subsection (f) of this Section,
4		beginning July 1, 2018 or the effective date of the Tier 1
5		employee's election under paragraph (1) of subsection (a) of
6		Section 2-110.3, whichever is later, in lieu of the
7		contributions otherwise required under this Section, each Tier
8		1 employee who made the election under paragraph (1) of
9		subsection (a) of Section 2-110.3 and has elected to cease
10		making contributions for survivor's annuity under subsection
11		(b) of this Section, shall contribute 8.55% of each payment of
12		salary toward the cost of his or her retirement annuity.
13		(Source: P.A. 96-1490, eff. 1-1-11.)
14		(40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
15		(Text of Section WITHOUT the changes made by P.A. 98-599,
16		which has been held unconstitutional)
17		Sec. 2-134. To certify required State contributions and
18		submit vouchers.
19		(a) The Board shall certify to the Governor on or before
20		December 15 of each year until December 15, 2011 the amount of
21		the required State contribution to the System for the next
22		fiscal year and shall specifically identify the System's
23		projected State normal cost for that fiscal year. The
24		certification shall include a copy of the actuarial
25		recommendations upon which it is based and shall specifically

HB4045 Engrossed - 95 - LRB100 12674 RPS 26063 b
1		identify the System's projected State normal cost for that
2		fiscal year.
3		On or before November 1 of each year, beginning November 1,
4		2012, the Board shall submit to the State Actuary, the
5		Governor, and the General Assembly a proposed certification of
6		the amount of the required State contribution to the System for
7		the next fiscal year, along with all of the actuarial
8		assumptions, calculations, and data upon which that proposed
9		certification is based. On or before January 1 of each year
10		beginning January 1, 2013, the State Actuary shall issue a
11		preliminary report concerning the proposed certification and
12		identifying, if necessary, recommended changes in actuarial
13		assumptions that the Board must consider before finalizing its
14		certification of the required State contributions. On or before
15		January 15, 2013 and every January 15 thereafter, the Board
16		shall certify to the Governor and the General Assembly the
17		amount of the required State contribution for the next fiscal
18		year. The Board's certification must note any deviations from
19		the State Actuary's recommended changes, the reason or reasons
20		for not following the State Actuary's recommended changes, and
21		the fiscal impact of not following the State Actuary's
22		recommended changes on the required State contribution.
23		On or before May 1, 2004, the Board shall recalculate and
24		recertify to the Governor the amount of the required State
25		contribution to the System for State fiscal year 2005, taking
26		into account the amounts appropriated to and received by the

HB4045 Engrossed - 96 - LRB100 12674 RPS 26063 b
1		System under subsection (d) of Section 7.2 of the General
2		Obligation Bond Act.
3		On or before July 1, 2005, the Board shall recalculate and
4		recertify to the Governor the amount of the required State
5		contribution to the System for State fiscal year 2006, taking
6		into account the changes in required State contributions made
7		by this amendatory Act of the 94th General Assembly.
8		On or before April 1, 2011, the Board shall recalculate and
9		recertify to the Governor the amount of the required State
10		contribution to the System for State fiscal year 2011, applying
11		the changes made by Public Act 96-889 to the System's assets
12		and liabilities as of June 30, 2009 as though Public Act 96-889
13		was approved on that date.
14		As soon as practical after the effective date of this
15		amendatory Act of the 100th General Assembly, the Board shall
16		recalculate and recertify to the State Actuary, the Governor,
17		and the General Assembly the amount of the State contribution
18		to the System for State fiscal year 2018, taking into account
19		the changes in required State contributions made by this
20		amendatory Act of the 100th General Assembly. The State Actuary
21		shall review the assumptions and valuations underlying the
22		Board's revised certification and issue a preliminary report
23		concerning the proposed recertification and identifying, if
24		necessary, recommended changes in actuarial assumptions that
25		the Board must consider before finalizing its certification of
26		the required State contributions. The Board's final

HB4045 Engrossed - 97 - LRB100 12674 RPS 26063 b
1		certification must note any deviations from the State Actuary's
2		recommended changes, the reason or reasons for not following
3		the State Actuary's recommended changes, and the fiscal impact
4		of not following the State Actuary's recommended changes on the
5		required State contribution.
6		On or before May 1, 2018, the Board shall recalculate and
7		recertify to the Governor and the General Assembly the amount
8		of the required State contribution to the System for State
9		fiscal year 2019, taking into account the effect on the
10		System's liabilities of the elections made under Section
11		2-110.3.
12		On or before October 1, 2018, the Board shall recalculate
13		and recertify to the Governor and the General Assembly the
14		amount of the required State contribution to the System for
15		State fiscal year 2019, taking into account the reduction
16		specified under item (3) of subsection (c) of Section 2-124.
17		(b) Beginning in State fiscal year 1996, on or as soon as
18		possible after the 15th day of each month the Board shall
19		submit vouchers for payment of State contributions to the
20		System, in a total monthly amount of one-twelfth of the
21		required annual State contribution certified under subsection
22		(a). From the effective date of this amendatory Act of the 93rd
23		General Assembly through June 30, 2004, the Board shall not
24		submit vouchers for the remainder of fiscal year 2004 in excess
25		of the fiscal year 2004 certified contribution amount
26		determined under this Section after taking into consideration

HB4045 Engrossed - 98 - LRB100 12674 RPS 26063 b
1		the transfer to the System under subsection (d) of Section
2		6z-61 of the State Finance Act. These vouchers shall be paid by
3		the State Comptroller and Treasurer by warrants drawn on the
4		funds appropriated to the System for that fiscal year. If in
5		any month the amount remaining unexpended from all other
6		appropriations to the System for the applicable fiscal year
7		(including the appropriations to the System under Section 8.12
8		of the State Finance Act and Section 1 of the State Pension
9		Funds Continuing Appropriation Act) is less than the amount
10		lawfully vouchered under this Section, the difference shall be
11		paid from the General Revenue Fund under the continuing
12		appropriation authority provided in Section 1.1 of the State
13		Pension Funds Continuing Appropriation Act.
14		(c) The full amount of any annual appropriation for the
15		System for State fiscal year 1995 shall be transferred and made
16		available to the System at the beginning of that fiscal year at
17		the request of the Board. Any excess funds remaining at the end
18		of any fiscal year from appropriations shall be retained by the
19		System as a general reserve to meet the System's accrued
20		liabilities.
21		(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
22		97-694, eff. 6-18-12.)
23		(40 ILCS 5/2-162)
24		(Text of Section WITHOUT the changes made by P.A. 98-599,
25		which has been held unconstitutional)

HB4045 Engrossed - 99 - LRB100 12674 RPS 26063 b
1		Sec. 2-162. Application and expiration of new benefit
2		increases.
3		(a) As used in this Section, "new benefit increase" means
4		an increase in the amount of any benefit provided under this
5		Article, or an expansion of the conditions of eligibility for
6		any benefit under this Article, that results from an amendment
7		to this Code that takes effect after the effective date of this
8		amendatory Act of the 94th General Assembly. "New benefit
9		increase", however, does not include any benefit increase
10		resulting from the changes made to this Article by this
11		amendatory Act of the 100th General Assembly.
12		(b) Notwithstanding any other provision of this Code or any
13		subsequent amendment to this Code, every new benefit increase
14		is subject to this Section and shall be deemed to be granted
15		only in conformance with and contingent upon compliance with
16		the provisions of this Section.
17		(c) The Public Act enacting a new benefit increase must
18		identify and provide for payment to the System of additional
19		funding at least sufficient to fund the resulting annual
20		increase in cost to the System as it accrues.
21		Every new benefit increase is contingent upon the General
22		Assembly providing the additional funding required under this
23		subsection. The Commission on Government Forecasting and
24		Accountability shall analyze whether adequate additional
25		funding has been provided for the new benefit increase and
26		shall report its analysis to the Public Pension Division of the

HB4045 Engrossed - 100 - LRB100 12674 RPS 26063 b
1		Department of Insurance Financial and Professional Regulation.
2		A new benefit increase created by a Public Act that does not
3		include the additional funding required under this subsection
4		is null and void. If the Public Pension Division determines
5		that the additional funding provided for a new benefit increase
6		under this subsection is or has become inadequate, it may so
7		certify to the Governor and the State Comptroller and, in the
8		absence of corrective action by the General Assembly, the new
9		benefit increase shall expire at the end of the fiscal year in
10		which the certification is made.
11		(d) Every new benefit increase shall expire 5 years after
12		its effective date or on such earlier date as may be specified
13		in the language enacting the new benefit increase or provided
14		under subsection (c). This does not prevent the General
15		Assembly from extending or re-creating a new benefit increase
16		by law.
17		(e) Except as otherwise provided in the language creating
18		the new benefit increase, a new benefit increase that expires
19		under this Section continues to apply to persons who applied
20		and qualified for the affected benefit while the new benefit
21		increase was in effect and to the affected beneficiaries and
22		alternate payees of such persons, but does not apply to any
23		other person, including without limitation a person who
24		continues in service after the expiration date and did not
25		apply and qualify for the affected benefit while the new
26		benefit increase was in effect.

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1		(Source: P.A. 94-4, eff. 6-1-05.)
2		(40 ILCS 5/2-165.1 new)
3		Sec. 2-165.1. Defined contribution plan.
4		(a) By July 1, 2018, the System shall prepare and implement
5		a voluntary defined contribution plan for up to 5% of eligible
6		active Tier 1 employees. The System shall determine the 5% cap
7		by the number of active Tier 1 employees on the effective date
8		of this Section. The defined contribution plan developed under
9		this Section shall be a plan that aggregates employer and
10		employee contributions in individual participant accounts
11		which, after meeting any other requirements, are used for
12		payouts after retirement in accordance with this Section and
13		any other applicable laws.
14		As used in this Section, "defined benefit plan" means the
15		retirement plan available under this Article to Tier 1
16		employees who have not made the election authorized under this
17		Section.
18		(1) Under the defined contribution plan, an active Tier
19		1 employee of this System could elect to cease accruing
20		benefits in the defined benefit plan under this Article and
21		begin accruing benefits for future service in the defined
22		contribution plan. Service credit under the defined
23		contribution plan may be used for determining retirement
24		eligibility under the defined benefit plan.
25		(2) Participants in the defined contribution plan

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1		shall pay employee contributions at the same rate as Tier 1
2		employees in this System who do not participate in the
3		defined contribution plan.
4		(3) State contributions shall be paid into the accounts
5		of all participants in the defined contribution plan at a
6		uniform rate, expressed as a percentage of compensation and
7		determined for each year. This rate shall be no higher than
8		the employer's normal cost for Tier 1 employees in the
9		defined benefit plan for that year, as determined by the
10		System and expressed as a percentage of compensation, and
11		shall be no lower than 3% of compensation. The State shall
12		adjust this rate annually.
13		(4) The defined contribution plan shall require 5 years
14		of participation in the defined contribution plan before
15		vesting in State contributions. If the participant fails to
16		vest in them, the State contributions, and the earnings
17		thereon, shall be forfeited.
18		(5) The defined contribution plan may provide for
19		participants in the plan to be eligible for defined
20		disability benefits. If it does, the System shall reduce
21		the employee contributions credited to the participant's
22		defined contribution plan account by an amount determined
23		by the System to cover the cost of offering such benefits.
24		(6) The defined contribution plan shall provide a
25		variety of options for investments. These options shall
26		include investments handled by the Illinois State Board of

HB4045 Engrossed - 103 - LRB100 12674 RPS 26063 b
1		Investment as well as private sector investment options.
2		(7) The defined contribution plan shall provide a
3		variety of options for payouts to retirees and their
4		survivors.
5		(8) To the extent authorized under federal law and as
6		authorized by the System, the plan shall allow former
7		participants in the plan to transfer or roll over employee
8		and vested State contributions, and the earnings thereon,
9		into other qualified retirement plans.
10		(9) The System shall reduce the employee contributions
11		credited to the participant's defined contribution plan
12		account by an amount determined by the System to cover the
13		cost of offering these benefits and any applicable
14		administrative fees.
15		(b) Only persons who are active Tier 1 employees of the
16		System on the effective date of this Section are eligible to
17		participate in the defined contribution plan. Participation in
18		the defined contribution plan shall be limited to the first 5%
19		of eligible persons who elect to participate. The election to
20		participate in the defined contribution plan is voluntary and
21		irrevocable.
22		(c) An eligible active Tier 1 employee may irrevocably
23		elect to participate in the defined contribution plan by filing
24		with the System a written application to participate that is
25		received by the System prior to its determination that 5% of
26		eligible persons have elected to participate in the defined

HB4045 Engrossed - 104 - LRB100 12674 RPS 26063 b
1		contribution plan.
2		When the System first determines that 5% of eligible
3		persons have elected to participate in the defined contribution
4		plan, the System shall provide notice to previously eligible
5		employees that the plan is no longer available and shall cease
6		accepting applications to participate.
7		(d) The System shall make a good faith effort to contact
8		each active Tier 1 employee who is eligible to participate in
9		the defined contribution plan. The System shall mail
10		information describing the option to join the defined
11		contribution plan to each of these employees to his or her last
12		known address on file with the System. If the employee is not
13		responsive to other means of contact, it is sufficient for the
14		System to publish the details of the option on its website.
15		Upon request for further information describing the
16		option, the System shall provide employees with information
17		from the System before exercising the option to join the plan,
18		including information on the impact to their vested benefits or
19		non-vested service. The individual consultation shall include
20		projections of the participant's defined benefits at
21		retirement or earlier termination of service and the value of
22		the participant's account at retirement or earlier termination
23		of service. The System shall not provide advice or counseling
24		with respect to whether the employee should exercise the
25		option. The System shall inform Tier 1 employees who are
26		eligible to participate in the defined contribution plan that

HB4045 Engrossed - 105 - LRB100 12674 RPS 26063 b
1		they may also wish to obtain information and counsel relating
2		to their option from any other available source, including but
3		not limited to labor organizations, private counsel, and
4		financial advisors.
5		(e) In no event shall the System, its staff, its authorized
6		representatives, or the Board be liable for any information
7		given to an employee under this Section. The System may
8		coordinate with the Illinois Department of Central Management
9		Services and other retirement systems administering a defined
10		contribution plan in accordance with this amendatory Act of the
11		100th General Assembly to provide information concerning the
12		impact of the option set forth in this Section.
13		(f) Notwithstanding any other provision of this Section, no
14		person shall begin participating in the defined contribution
15		plan until it has attained qualified plan status and received
16		all necessary approvals from the U.S. Internal Revenue Service.
17		(g) The System shall report on its progress under this
18		Section, including the available details of the defined
19		contribution plan and the System's plans for informing eligible
20		Tier 1 employees about the plan, to the Governor and the
21		General Assembly on or before January 15, 2018.
22		(h) The Illinois State Board of Investments shall be the
23		plan sponsor for the defined contribution plan established
24		under this Section.
25		(i) The intent of this amendatory Act of the 100th General
26		Assembly is to ensure that the State's normal cost of

HB4045 Engrossed - 106 - LRB100 12674 RPS 26063 b
1		participation in the defined contribution plan is similar, and
2		if possible equal, to the State's normal cost of participation
3		in the defined benefit plan, unless a lower State's normal cost
4		is necessary to ensure cost neutrality.
5		(40 ILCS 5/2-166.1 new)
6		Sec. 2-166.1. Defined contribution plan; termination. If
7		the defined contribution plan is terminated or becomes
8		inoperative pursuant to law, then each participant in the plan
9		shall automatically be deemed to have been a contributing Tier
10		1 employee in the System's defined benefit plan during the time
11		in which he or she participated in the defined contribution
12		plan, and for that purpose the System shall be entitled to
13		recover the amounts in the participant's defined contribution
14		accounts.
15		(40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
16		(Text of Section WITHOUT the changes made by P.A. 98-599,
17		which has been held unconstitutional)
18		Sec. 14-103.10. Compensation.
19		(a) For periods of service prior to January 1, 1978, the
20		full rate of salary or wages payable to an employee for
21		personal services performed if he worked the full normal
22		working period for his position, subject to the following
23		maximum amounts: (1) prior to July 1, 1951, $400 per month or
24		$4,800 per year; (2) between July 1, 1951 and June 30, 1957

HB4045 Engrossed - 107 - LRB100 12674 RPS 26063 b
1		inclusive, $625 per month or $7,500 per year; (3) beginning
2		July 1, 1957, no limitation.
3		In the case of service of an employee in a position
4		involving part-time employment, compensation shall be
5		determined according to the employees' earnings record.
6		(b) For periods of service on and after January 1, 1978,
7		all remuneration for personal services performed defined as
8		"wages" under the Social Security Enabling Act, including that
9		part of such remuneration which is in excess of any maximum
10		limitation provided in such Act, and including any benefits
11		received by an employee under a sick pay plan in effect before
12		January 1, 1981, but excluding lump sum salary payments:
13		(1) for vacation,
14		(2) for accumulated unused sick leave,
15		(3) upon discharge or dismissal,
16		(4) for approved holidays.
17		(c) For periods of service on or after December 16, 1978,
18		compensation also includes any benefits, other than lump sum
19		salary payments made at termination of employment, which an
20		employee receives or is eligible to receive under a sick pay
21		plan authorized by law.
22		(d) For periods of service after September 30, 1985,
23		compensation also includes any remuneration for personal
24		services not included as "wages" under the Social Security
25		Enabling Act, which is deducted for purposes of participation
26		in a program established pursuant to Section 125 of the

HB4045 Engrossed - 108 - LRB100 12674 RPS 26063 b
1		Internal Revenue Code or its successor laws.
2		(e) For members for which Section 1-160 applies for periods
3		of service on and after January 1, 2011, all remuneration for
4		personal services performed defined as "wages" under the Social
5		Security Enabling Act, excluding remuneration that is in excess
6		of the annual earnings, salary, or wages of a member or
7		participant, as provided in subsection (b-5) of Section 1-160,
8		but including any benefits received by an employee under a sick
9		pay plan in effect before January 1, 1981. Compensation shall
10		exclude lump sum salary payments:
11		(1) for vacation;
12		(2) for accumulated unused sick leave;
13		(3) upon discharge or dismissal; and
14		(4) for approved holidays.
15		(f) Notwithstanding the other provisions of this Section,
16		for service on or after July 1, 2013, "compensation" does not
17		include any stipend payable to an employee for service on a
18		board or commission.
19		(g) Notwithstanding any other provision of this Section,
20		"compensation" does not include any future increase in income
21		that is offered for service by a department to a Tier 1
22		employee under this Article pursuant to the condition set forth
23		in subsection (c) of Section 14-106.5 and accepted under that
24		condition by a Tier 1 employee who has made the election under
25		paragraph (2) of subsection (a) of Section 14-106.5.
26		(h) Notwithstanding any other provision of this Section,

HB4045 Engrossed - 109 - LRB100 12674 RPS 26063 b
1		"compensation" does not include any consideration payment made
2		to a Tier 1 employee.
3		(Source: P.A. 98-449, eff. 8-16-13.)
4		(40 ILCS 5/14-103.41 new)
5		Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An
6		employee under this Article who first became a member or
7		participant before January 1, 2011 under any reciprocal
8		retirement system or pension fund established under this Code
9		other than a retirement system or pension fund established
10		under Article 2, 3, 4, 5, 6, or 18 of this Code.
11		(40 ILCS 5/14-103.42 new)
12		Sec. 14-103.42. Future increase in income. "Future
13		increase in income" means an increase to a Tier 1 employee's
14		base pay that is offered by a department to the Tier 1 employee
15		for service under this Article after June 30, 2019 that
16		qualifies as "compensation", as defined in Section 14-103.10,
17		or would qualify as "compensation" but for the fact that it was
18		offered to and accepted by the Tier 1 employee under the
19		condition set forth in subsection (c) of Section 14-106.5. The
20		term "future increase in income" includes an increase to a Tier
21		1 employee's base pay that is paid to the Tier 1 employee
22		pursuant to an extension, amendment, or renewal of any
23		employment contract or collective bargaining agreement after
24		the effective date of this Section.

HB4045 Engrossed - 110 - LRB100 12674 RPS 26063 b
1		(40 ILCS 5/14-103.43 new)
2		Sec. 14-103.43. Base pay. As used in Section 14-103.42 of
3		this Code, "base pay" means the greater of either (i) the Tier
4		1 employee's annualized rate of compensation as of June 30,
5		2019, or (ii) the Tier 1 employee's annualized rate of
6		compensation immediately preceding the expiration, renewal, or
7		amendment of an employment contract or collective bargaining
8		agreement in effect on the effective date of this Section. For
9		a person returning to active service as a Tier 1 employee after
10		June 30, 2019, however, "base pay" means the employee's
11		annualized rate of compensation as of the employee's last date
12		of service prior to July 1, 2019. The System shall calculate
13		the base pay of each Tier 1 employee pursuant to this Section.
14		(40 ILCS 5/14-106.5 new)
15		Sec. 14-106.5. Election by Tier 1 employees.
16		(a) Each active Tier 1 employee shall make an irrevocable
17		election either:
18		(1) to agree to delay his or her eligibility for
19		automatic annual increases in retirement annuity as
20		provided in subsection (a-1) of Section 14-114 and to have
21		the amount of the automatic annual increases in his or her
22		retirement annuity and survivors or widow's annuity that
23		are otherwise provided for in this Article calculated,
24		instead, as provided in subsection (a-1) of Section 14-114;

HB4045 Engrossed - 111 - LRB100 12674 RPS 26063 b
1		or
2		(2) to not agree to paragraph (1) of this subsection.
3		The election required under this subsection (a) shall be
4		made by each active Tier 1 employee no earlier than January 1,
5		2019 and no later than March 31, 2019, except that:
6		(i) a person who becomes a Tier 1 employee under this
7		Article on or after January 1, 2019 must make the election
8		under this subsection (a) within 60 days after becoming a
9		Tier 1 employee; and
10		(ii) a person who returns to active service as a Tier 1
11		employee under this Article on or after January 1, 2019 and
12		has not yet made an election under this Section must make
13		the election under this subsection (a) within 60 days after
14		returning to active service as a Tier 1 employee.
15		If a Tier 1 employee fails for any reason to make a
16		required election under this subsection within the time
17		specified, then the employee shall be deemed to have made the
18		election under paragraph (2) of this subsection.
19		(a-5) If this Section is enjoined or stayed by an Illinois
20		court or a court of competent jurisdiction pending the entry of
21		a final and unappealable decision, and this Section is
22		determined to be constitutional or otherwise valid by a final
23		unappealable decision of an Illinois court or a court of
24		competent jurisdiction, then the election procedure set forth
25		in subsection (a) of this Section shall commence on the 180th
26		calendar day after the date of the issuance of the final

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1		unappealable decision and shall conclude at the end of the
2		270th calendar day after that date.
3		(a-10) All elections under subsection (a) that are made or
4		deemed to be made before July 1, 2019 shall take effect on July
5		1, 2019. Elections that are made or deemed to be made on or
6		after July 1, 2019 shall take effect on the first day of the
7		month following the month in which the election is made or
8		deemed to be made.
9		(b) As adequate and legal consideration provided under this
10		amendatory Act of the 100th General Assembly for making an
11		election under paragraph (1) of subsection (a) of this Section,
12		the department shall be expressly and irrevocably prohibited
13		from offering any future increases in income to a Tier 1
14		employee who has made an election under paragraph (1) of
15		subsection (a) of this Section on the condition of not
16		constituting compensation under Section 14-103.10.
17		As adequate and legal consideration provided under this
18		amendatory Act of the 100th General Assembly for making an
19		election under paragraph (1) of subsection (a) of this Section,
20		each Tier 1 employee who has made an election under paragraph
21		(1) of subsection (a) of this Section shall receive a
22		consideration payment equal to 10% of the contributions made by
23		or on behalf of the employee before the effective date of that
24		election. The State Comptroller shall pay the consideration
25		payment to the Tier 1 employee out of funds appropriated for
26		that purpose under Section 1.9 of the State Pension Funds

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1		Continuing Appropriation Act. The System shall calculate the
2		amount of each consideration payment and, by July 1, 2019,
3		shall certify to the State Comptroller the amount of the
4		consideration payment, together with the name, address, and any
5		other available payment information of the Tier 1 employee as
6		found in the records of the System. The System shall make
7		additional calculations and certifications of consideration
8		payments to the State Comptroller as it deems necessary.
9		(c) A Tier 1 employee who makes the election under
10		paragraph (2) of subsection (a) of this Section shall not be
11		subject to paragraph (1) of subsection (a) of this Section.
12		However, each future increase in income offered by a department
13		under this Article to a Tier 1 employee who has made the
14		election under paragraph (2) of subsection (a) of this Section
15		shall be offered by the department expressly and irrevocably on
16		the condition of not constituting compensation under Section
17		14-103.10 and that the Tier 1 employee's acceptance of the
18		offered future increase in income shall constitute his or her
19		agreement to that condition.
20		(d) The System shall make a good faith effort to contact
21		each Tier 1 employee subject to this Section. The System shall
22		mail information describing the required election to each Tier
23		1 employee by United States Postal Service mail to his or her
24		last known address on file with the System. If the Tier 1
25		employee is not responsive to other means of contact, it is
26		sufficient for the System to publish the details of any

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1		required elections on its website or to publish those details
2		in a regularly published newsletter or other existing public
3		forum.
4		Tier 1 employees who are subject to this Section shall be
5		provided with an election packet containing information
6		regarding their options, as well as the forms necessary to make
7		the required election. Upon request, the System shall offer
8		Tier 1 employees an opportunity to receive information from the
9		System before making the required election. The information may
10		consist of video materials, group presentations, individual
11		consultation with a member or authorized representative of the
12		System in person or by telephone or other electronic means, or
13		any combination of those methods. The System shall not provide
14		advice or counseling with respect to which election a Tier 1
15		employee should make or specific to the legal or tax
16		circumstances of or consequences to the Tier 1 employee.
17		The System shall inform Tier 1 employees in the election
18		packet required under this subsection that the Tier 1 employee
19		may also wish to obtain information and counsel relating to the
20		election required under this Section from any other available
21		source, including, but not limited to, labor organizations and
22		private counsel.
23		In no event shall the System, its staff, or the Board be
24		held liable for any information given to a member regarding the
25		elections under this Section. The System shall coordinate with
26		the Illinois Department of Central Management Services and each

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1		other retirement system administering an election in
2		accordance with this amendatory Act of the 100th General
3		Assembly to provide information concerning the impact of the
4		election set forth in this Section.
5		(e) Notwithstanding any other provision of law, a
6		department under this Article is required to offer each future
7		increase in income expressly and irrevocably on the condition
8		of not constituting "compensation" under Section 14-103.10 to
9		any Tier 1 employee who has made an election under paragraph
10		(2) of subsection (a) of this Section. The offer shall also
11		provide that the Tier 1 employee's acceptance of the offered
12		future increase in income shall constitute his or her agreement
13		to the condition set forth in this subsection.
14		For purposes of legislative intent, the condition set forth
15		in this subsection shall be construed in a manner that ensures
16		that the condition is not violated or circumvented through any
17		contrivance of any kind.
18		(f) A member's election under this Section is not a
19		prohibited election under subdivision (j)(1) of Section 1-119
20		of this Code.
21		(g) No provision of this Section shall be interpreted in a
22		way that would cause the System to cease to be a qualified plan
23		under Section 401(a) of the Internal Revenue Code of 1986. The
24		provisions of this Section shall be subject to and implemented
25		in a manner that complies with Section 21 of Article V of the
26		Illinois Constitution.

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1		(h) If an election created by this amendatory Act in any
2		other Article of this Code or any change deriving from that
3		election is determined to be unconstitutional or otherwise
4		invalid by a final unappealable decision of an Illinois court
5		or a court of competent jurisdiction, the invalidity of that
6		provision shall not in any way affect the validity of this
7		Section or the changes deriving from the election required
8		under this Section.
9		(40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)
10		(Text of Section WITHOUT the changes made by P.A. 98-599,
11		which has been held unconstitutional)
12		Sec. 14-114. Automatic increase in retirement annuity.
13		(a) Subject to the provisions of subsections (a-1), any Any
14		person receiving a retirement annuity under this Article who
15		retires having attained age 60, or who retires before age 60
16		having at least 35 years of creditable service, or who retires
17		on or after January 1, 2001 at an age which, when added to the
18		number of years of his or her creditable service, equals at
19		least 85, shall, on January 1 next following the first full
20		year of retirement, have the amount of the then fixed and
21		payable monthly retirement annuity increased 3%. Any person
22		receiving a retirement annuity under this Article who retires
23		before attainment of age 60 and with less than (i) 35 years of
24		creditable service if retirement is before January 1, 2001, or
25		(ii) the number of years of creditable service which, when

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1		added to the member's age, would equal 85, if retirement is on
2		or after January 1, 2001, shall have the amount of the fixed
3		and payable retirement annuity increased by 3% on the January 1
4		occurring on or next following (1) attainment of age 60, or (2)
5		the first anniversary of retirement, whichever occurs later.
6		However, for persons who receive the alternative retirement
7		annuity under Section 14-110, references in this subsection (a)
8		to attainment of age 60 shall be deemed to refer to attainment
9		of age 55. For a person receiving early retirement incentives
10		under Section 14-108.3 whose retirement annuity began after
11		January 1, 1992 pursuant to an extension granted under
12		subsection (e) of that Section, the first anniversary of
13		retirement shall be deemed to be January 1, 1993. For a person
14		who retires on or after June 28, 2001 and on or before October
15		1, 2001, and whose retirement annuity is calculated, in whole
16		or in part, under Section 14-110 or subsection (g) or (h) of
17		Section 14-108, the first anniversary of retirement shall be
18		deemed to be January 1, 2002.
19		On each January 1 following the date of the initial
20		increase under this subsection, the employee's monthly
21		retirement annuity shall be increased by an additional 3%.
22		Beginning January 1, 1990, and except as provided in
23		subsection (a-1), all automatic annual increases payable under
24		this Section shall be calculated as a percentage of the total
25		annuity payable at the time of the increase, including previous
26		increases granted under this Article.

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1		(a-1) Notwithstanding any other provision of this Article,
2		for a Tier 1 employee who made the election under paragraph (1)
3		of subsection (a) of Section 14-106.5:
4		(1) The initial increase in retirement annuity under
5		this Section shall occur on the January 1 occurring either
6		on or after the attainment of age 67 or the fifth
7		anniversary of the annuity start date, whichever is
8		earlier.
9		(2) The amount of each automatic annual increase in
10		retirement annuity or survivors or widow's annuity
11		occurring on or after the effective date of that election
12		shall be calculated as a percentage of the originally
13		granted retirement annuity or survivors or widow's
14		annuity, equal to 3% or one-half the annual unadjusted
15		percentage increase (but not less than zero) in the
16		consumer price index-u for the 12 months ending with the
17		September preceding each November 1, whichever is less. If
18		the annual unadjusted percentage change in the consumer
19		price index-u for the 12 months ending with the September
20		preceding each November 1 is zero or there is a decrease,
21		then the annuity shall not be increased.
22		For the purposes of this Section, "consumer price index-u"
23		means the index published by the Bureau of Labor Statistics of
24		the United States Department of Labor that measures the average
25		change in prices of goods and services purchased by all urban
26		consumers, United States city average, all items, 1982-84 =

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1		100. The new amount resulting from each annual adjustment shall
2		be determined by the Public Pension Division of the Department
3		of Insurance and made available to the board of the retirement
4		system by November 1 of each year.
5		(b) The provisions of subsection (a) of this Section shall
6		be applicable to an employee only if the employee makes the
7		additional contributions required after December 31, 1969 for
8		the purpose of the automatic increases for not less than the
9		equivalent of one full year. If an employee becomes an
10		annuitant before his additional contributions equal one full
11		year's contributions based on his salary at the date of
12		retirement, the employee may pay the necessary balance of the
13		contributions to the system, without interest, and be eligible
14		for the increasing annuity authorized by this Section.
15		(c) The provisions of subsection (a) of this Section shall
16		not be applicable to any annuitant who is on retirement on
17		December 31, 1969, and thereafter returns to State service,
18		unless the member has established at least one year of
19		additional creditable service following reentry into service.
20		(d) In addition to other increases which may be provided by
21		this Section, on January 1, 1981 any annuitant who was
22		receiving a retirement annuity on or before January 1, 1971
23		shall have his retirement annuity then being paid increased $1
24		per month for each year of creditable service. On January 1,
25		1982, any annuitant who began receiving a retirement annuity on
26		or before January 1, 1977, shall have his retirement annuity

HB4045 Engrossed - 120 - LRB100 12674 RPS 26063 b
1		then being paid increased $1 per month for each year of
2		creditable service.
3		On January 1, 1987, any annuitant who began receiving a
4		retirement annuity on or before January 1, 1977, shall have the
5		monthly retirement annuity increased by an amount equal to 8¢
6		per year of creditable service times the number of years that
7		have elapsed since the annuity began.
8		(e) Every person who receives the alternative retirement
9		annuity under Section 14-110 and who is eligible to receive the
10		3% increase under subsection (a) on January 1, 1986, shall also
11		receive on that date a one-time increase in retirement annuity
12		equal to the difference between (1) his actual retirement
13		annuity on that date, including any increases received under
14		subsection (a), and (2) the amount of retirement annuity he
15		would have received on that date if the amendments to
16		subsection (a) made by Public Act 84-162 had been in effect
17		since the date of his retirement.
18		(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
19		92-651, eff. 7-11-02.)
20		(40 ILCS 5/14-131)
21		Sec. 14-131. Contributions by State.
22		(a) The State shall make contributions to the System by
23		appropriations of amounts which, together with other employer
24		contributions from trust, federal, and other funds, employee
25		contributions, investment income, and other income, will be

HB4045 Engrossed - 121 - LRB100 12674 RPS 26063 b
1		sufficient to meet the cost of maintaining and administering
2		the System on a 90% funded basis in accordance with actuarial
3		recommendations.
4		For the purposes of this Section and Section 14-135.08,
5		references to State contributions refer only to employer
6		contributions and do not include employee contributions that
7		are picked up or otherwise paid by the State or a department on
8		behalf of the employee.
9		(b) The Board shall determine the total amount of State
10		contributions required for each fiscal year on the basis of the
11		actuarial tables and other assumptions adopted by the Board,
12		using the formula in subsection (e).
13		The Board shall also determine a State contribution rate
14		for each fiscal year, expressed as a percentage of payroll,
15		based on the total required State contribution for that fiscal
16		year (less the amount received by the System from
17		appropriations under Section 8.12 of the State Finance Act and
18		Section 1 of the State Pension Funds Continuing Appropriation
19		Act, if any, for the fiscal year ending on the June 30
20		immediately preceding the applicable November 15 certification
21		deadline), the estimated payroll (including all forms of
22		compensation) for personal services rendered by eligible
23		employees, and the recommendations of the actuary.
24		For the purposes of this Section and Section 14.1 of the
25		State Finance Act, the term "eligible employees" includes
26		employees who participate in the System, persons who may elect

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1		to participate in the System but have not so elected, persons
2		who are serving a qualifying period that is required for
3		participation, and annuitants employed by a department as
4		described in subdivision (a)(1) or (a)(2) of Section 14-111.
5		(c) Contributions shall be made by the several departments
6		for each pay period by warrants drawn by the State Comptroller
7		against their respective funds or appropriations based upon
8		vouchers stating the amount to be so contributed. These amounts
9		shall be based on the full rate certified by the Board under
10		Section 14-135.08 for that fiscal year. From the effective date
11		of this amendatory Act of the 93rd General Assembly through the
12		payment of the final payroll from fiscal year 2004
13		appropriations, the several departments shall not make
14		contributions for the remainder of fiscal year 2004 but shall
15		instead make payments as required under subsection (a-1) of
16		Section 14.1 of the State Finance Act. The several departments
17		shall resume those contributions at the commencement of fiscal
18		year 2005.
19		(c-1) Notwithstanding subsection (c) of this Section, for
20		fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,
21		contributions by the several departments are not required to be
22		made for General Revenue Funds payrolls processed by the
23		Comptroller. Payrolls paid by the several departments from all
24		other State funds must continue to be processed pursuant to
25		subsection (c) of this Section.
26		(c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,

HB4045 Engrossed - 123 - LRB100 12674 RPS 26063 b
1		2016, and 2017 only, on or as soon as possible after the 15th
2		day of each month, the Board shall submit vouchers for payment
3		of State contributions to the System, in a total monthly amount
4		of one-twelfth of the fiscal year General Revenue Fund
5		contribution as certified by the System pursuant to Section
6		14-135.08 of the Illinois Pension Code.
7		(d) If an employee is paid from trust funds or federal
8		funds, the department or other employer shall pay employer
9		contributions from those funds to the System at the certified
10		rate, unless the terms of the trust or the federal-State
11		agreement preclude the use of the funds for that purpose, in
12		which case the required employer contributions shall be paid by
13		the State. From the effective date of this amendatory Act of
14		the 93rd General Assembly through the payment of the final
15		payroll from fiscal year 2004 appropriations, the department or
16		other employer shall not pay contributions for the remainder of
17		fiscal year 2004 but shall instead make payments as required
18		under subsection (a-1) of Section 14.1 of the State Finance
19		Act. The department or other employer shall resume payment of
20		contributions at the commencement of fiscal year 2005.
21		(e) For State fiscal years 2018 through 2045 (except as
22		otherwise provided for fiscal year 2020), the minimum
23		contribution to the System to be made by the State for each
24		fiscal year shall be an amount determined by the System to be
25		sufficient to bring the total assets of the System up to 90% of
26		the total actuarial liabilities of the System by the end of

HB4045 Engrossed - 124 - LRB100 12674 RPS 26063 b
1		State fiscal year 2045. In making these determinations, the
2		required State contribution shall be calculated each year as a
3		level percentage of total payroll, including payroll that is
4		not deemed pensionable, over the years remaining to and
5		including fiscal year 2045 and shall be determined under the
6		projected unit credit actuarial cost method.
7		For State fiscal year 2020:
8		(1) The initial calculation and certification shall be
9		based on the amount determined above.
10		(2) For purposes of the recertification due on or
11		before May 1, 2019, the recalculation of the required State
12		contribution for fiscal year 2020 shall take into account
13		the effect on the System's liabilities of the elections
14		made under Section 14-106.5.
15		(3) For purposes of the recertification due on or
16		before October 1, 2019, the total required State
17		contribution for fiscal year 2020 shall be reduced by the
18		amount of the consideration payments made to Tier 1
19		employees who made the election under paragraph (1) of
20		subsection (a) of Section 14-106.5.
21		Beginning in State fiscal year 2018, any increase or
22		decrease in State contribution over the prior fiscal year due
23		exclusively to changes in actuarial or investment assumptions
24		adopted by the Board shall be included in the State
25		contribution to the System, as a percentage of the applicable
26		employee payroll, and shall be increased in equal annual

HB4045 Engrossed - 125 - LRB100 12674 RPS 26063 b
1		increments so that by the State fiscal year occurring 5 years
2		after the adoption of the actuarial or investment assumptions,
3		the State is contributing at the rate otherwise required under
4		this Section.
5		For State fiscal years 2012 through 2017 2045, the minimum
6		contribution to the System to be made by the State for each
7		fiscal year shall be an amount determined by the System to be
8		sufficient to bring the total assets of the System up to 90% of
9		the total actuarial liabilities of the System by the end of
10		State fiscal year 2045. In making these determinations, the
11		required State contribution shall be calculated each year as a
12		level percentage of payroll over the years remaining to and
13		including fiscal year 2045 and shall be determined under the
14		projected unit credit actuarial cost method.
15		For State fiscal years 1996 through 2005, the State
16		contribution to the System, as a percentage of the applicable
17		employee payroll, shall be increased in equal annual increments
18		so that by State fiscal year 2011, the State is contributing at
19		the rate required under this Section; except that (i) for State
20		fiscal year 1998, for all purposes of this Code and any other
21		law of this State, the certified percentage of the applicable
22		employee payroll shall be 5.052% for employees earning eligible
23		creditable service under Section 14-110 and 6.500% for all
24		other employees, notwithstanding any contrary certification
25		made under Section 14-135.08 before the effective date of this
26		amendatory Act of 1997, and (ii) in the following specified

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1		State fiscal years, the State contribution to the System shall
2		not be less than the following indicated percentages of the
3		applicable employee payroll, even if the indicated percentage
4		will produce a State contribution in excess of the amount
5		otherwise required under this subsection and subsection (a):
6		9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
7		2002; 10.6% in FY 2003; and 10.8% in FY 2004.
8		Notwithstanding any other provision of this Article, the
9		total required State contribution to the System for State
10		fiscal year 2006 is $203,783,900.
11		Notwithstanding any other provision of this Article, the
12		total required State contribution to the System for State
13		fiscal year 2007 is $344,164,400.
14		For each of State fiscal years 2008 through 2009, the State
15		contribution to the System, as a percentage of the applicable
16		employee payroll, shall be increased in equal annual increments
17		from the required State contribution for State fiscal year
18		2007, so that by State fiscal year 2011, the State is
19		contributing at the rate otherwise required under this Section.
20		Notwithstanding any other provision of this Article, the
21		total required State General Revenue Fund contribution for
22		State fiscal year 2010 is $723,703,100 and shall be made from
23		the proceeds of bonds sold in fiscal year 2010 pursuant to
24		Section 7.2 of the General Obligation Bond Act, less (i) the
25		pro rata share of bond sale expenses determined by the System's
26		share of total bond proceeds, (ii) any amounts received from

HB4045 Engrossed - 127 - LRB100 12674 RPS 26063 b
1		the General Revenue Fund in fiscal year 2010, and (iii) any
2		reduction in bond proceeds due to the issuance of discounted
3		bonds, if applicable.
4		Notwithstanding any other provision of this Article, the
5		total required State General Revenue Fund contribution for
6		State fiscal year 2011 is the amount recertified by the System
7		on or before April 1, 2011 pursuant to Section 14-135.08 and
8		shall be made from the proceeds of bonds sold in fiscal year
9		2011 pursuant to Section 7.2 of the General Obligation Bond
10		Act, less (i) the pro rata share of bond sale expenses
11		determined by the System's share of total bond proceeds, (ii)
12		any amounts received from the General Revenue Fund in fiscal
13		year 2011, and (iii) any reduction in bond proceeds due to the
14		issuance of discounted bonds, if applicable.
15		Beginning in State fiscal year 2046, the minimum State
16		contribution for each fiscal year shall be the amount needed to
17		maintain the total assets of the System at 90% of the total
18		actuarial liabilities of the System.
19		Amounts received by the System pursuant to Section 25 of
20		the Budget Stabilization Act or Section 8.12 of the State
21		Finance Act in any fiscal year do not reduce and do not
22		constitute payment of any portion of the minimum State
23		contribution required under this Article in that fiscal year.
24		Such amounts shall not reduce, and shall not be included in the
25		calculation of, the required State contributions under this
26		Article in any future year until the System has reached a

HB4045 Engrossed - 128 - LRB100 12674 RPS 26063 b
1		funding ratio of at least 90%. A reference in this Article to
2		the "required State contribution" or any substantially similar
3		term does not include or apply to any amounts payable to the
4		System under Section 25 of the Budget Stabilization Act.
5		Notwithstanding any other provision of this Section, the
6		required State contribution for State fiscal year 2005 and for
7		fiscal year 2008 and each fiscal year thereafter, as calculated
8		under this Section and certified under Section 14-135.08, shall
9		not exceed an amount equal to (i) the amount of the required
10		State contribution that would have been calculated under this
11		Section for that fiscal year if the System had not received any
12		payments under subsection (d) of Section 7.2 of the General
13		Obligation Bond Act, minus (ii) the portion of the State's
14		total debt service payments for that fiscal year on the bonds
15		issued in fiscal year 2003 for the purposes of that Section
16		7.2, as determined and certified by the Comptroller, that is
17		the same as the System's portion of the total moneys
18		distributed under subsection (d) of Section 7.2 of the General
19		Obligation Bond Act. In determining this maximum for State
20		fiscal years 2008 through 2010, however, the amount referred to
21		in item (i) shall be increased, as a percentage of the
22		applicable employee payroll, in equal increments calculated
23		from the sum of the required State contribution for State
24		fiscal year 2007 plus the applicable portion of the State's
25		total debt service payments for fiscal year 2007 on the bonds
26		issued in fiscal year 2003 for the purposes of Section 7.2 of

HB4045 Engrossed - 129 - LRB100 12674 RPS 26063 b
1		the General Obligation Bond Act, so that, by State fiscal year
2		2011, the State is contributing at the rate otherwise required
3		under this Section.
4		(f) After the submission of all payments for eligible
5		employees from personal services line items in fiscal year 2004
6		have been made, the Comptroller shall provide to the System a
7		certification of the sum of all fiscal year 2004 expenditures
8		for personal services that would have been covered by payments
9		to the System under this Section if the provisions of this
10		amendatory Act of the 93rd General Assembly had not been
11		enacted. Upon receipt of the certification, the System shall
12		determine the amount due to the System based on the full rate
13		certified by the Board under Section 14-135.08 for fiscal year
14		2004 in order to meet the State's obligation under this
15		Section. The System shall compare this amount due to the amount
16		received by the System in fiscal year 2004 through payments
17		under this Section and under Section 6z-61 of the State Finance
18		Act. If the amount due is more than the amount received, the
19		difference shall be termed the "Fiscal Year 2004 Shortfall" for
20		purposes of this Section, and the Fiscal Year 2004 Shortfall
21		shall be satisfied under Section 1.2 of the State Pension Funds
22		Continuing Appropriation Act. If the amount due is less than
23		the amount received, the difference shall be termed the "Fiscal
24		Year 2004 Overpayment" for purposes of this Section, and the
25		Fiscal Year 2004 Overpayment shall be repaid by the System to
26		the Pension Contribution Fund as soon as practicable after the

HB4045 Engrossed - 130 - LRB100 12674 RPS 26063 b
1		certification.
2		(g) For purposes of determining the required State
3		contribution to the System, the value of the System's assets
4		shall be equal to the actuarial value of the System's assets,
5		which shall be calculated as follows:
6		As of June 30, 2008, the actuarial value of the System's
7		assets shall be equal to the market value of the assets as of
8		that date. In determining the actuarial value of the System's
9		assets for fiscal years after June 30, 2008, any actuarial
10		gains or losses from investment return incurred in a fiscal
11		year shall be recognized in equal annual amounts over the
12		5-year period following that fiscal year.
13		(h) For purposes of determining the required State
14		contribution to the System for a particular year, the actuarial
15		value of assets shall be assumed to earn a rate of return equal
16		to the System's actuarially assumed rate of return.
17		(i) After the submission of all payments for eligible
18		employees from personal services line items paid from the
19		General Revenue Fund in fiscal year 2010 have been made, the
20		Comptroller shall provide to the System a certification of the
21		sum of all fiscal year 2010 expenditures for personal services
22		that would have been covered by payments to the System under
23		this Section if the provisions of this amendatory Act of the
24		96th General Assembly had not been enacted. Upon receipt of the
25		certification, the System shall determine the amount due to the
26		System based on the full rate certified by the Board under

HB4045 Engrossed - 131 - LRB100 12674 RPS 26063 b
1		Section 14-135.08 for fiscal year 2010 in order to meet the
2		State's obligation under this Section. The System shall compare
3		this amount due to the amount received by the System in fiscal
4		year 2010 through payments under this Section. If the amount
5		due is more than the amount received, the difference shall be
6		termed the "Fiscal Year 2010 Shortfall" for purposes of this
7		Section, and the Fiscal Year 2010 Shortfall shall be satisfied
8		under Section 1.2 of the State Pension Funds Continuing
9		Appropriation Act. If the amount due is less than the amount
10		received, the difference shall be termed the "Fiscal Year 2010
11		Overpayment" for purposes of this Section, and the Fiscal Year
12		2010 Overpayment shall be repaid by the System to the General
13		Revenue Fund as soon as practicable after the certification.
14		(j) After the submission of all payments for eligible
15		employees from personal services line items paid from the
16		General Revenue Fund in fiscal year 2011 have been made, the
17		Comptroller shall provide to the System a certification of the
18		sum of all fiscal year 2011 expenditures for personal services
19		that would have been covered by payments to the System under
20		this Section if the provisions of this amendatory Act of the
21		96th General Assembly had not been enacted. Upon receipt of the
22		certification, the System shall determine the amount due to the
23		System based on the full rate certified by the Board under
24		Section 14-135.08 for fiscal year 2011 in order to meet the
25		State's obligation under this Section. The System shall compare
26		this amount due to the amount received by the System in fiscal

HB4045 Engrossed - 132 - LRB100 12674 RPS 26063 b
1		year 2011 through payments under this Section. If the amount
2		due is more than the amount received, the difference shall be
3		termed the "Fiscal Year 2011 Shortfall" for purposes of this
4		Section, and the Fiscal Year 2011 Shortfall shall be satisfied
5		under Section 1.2 of the State Pension Funds Continuing
6		Appropriation Act. If the amount due is less than the amount
7		received, the difference shall be termed the "Fiscal Year 2011
8		Overpayment" for purposes of this Section, and the Fiscal Year
9		2011 Overpayment shall be repaid by the System to the General
10		Revenue Fund as soon as practicable after the certification.
11		(k) For fiscal years 2012 through 2017 only, after the
12		submission of all payments for eligible employees from personal
13		services line items paid from the General Revenue Fund in the
14		fiscal year have been made, the Comptroller shall provide to
15		the System a certification of the sum of all expenditures in
16		the fiscal year for personal services. Upon receipt of the
17		certification, the System shall determine the amount due to the
18		System based on the full rate certified by the Board under
19		Section 14-135.08 for the fiscal year in order to meet the
20		State's obligation under this Section. The System shall compare
21		this amount due to the amount received by the System for the
22		fiscal year. If the amount due is more than the amount
23		received, the difference shall be termed the "Prior Fiscal Year
24		Shortfall" for purposes of this Section, and the Prior Fiscal
25		Year Shortfall shall be satisfied under Section 1.2 of the
26		State Pension Funds Continuing Appropriation Act. If the amount

HB4045 Engrossed - 133 - LRB100 12674 RPS 26063 b
1		due is less than the amount received, the difference shall be
2		termed the "Prior Fiscal Year Overpayment" for purposes of this
3		Section, and the Prior Fiscal Year Overpayment shall be repaid
4		by the System to the General Revenue Fund as soon as
5		practicable after the certification.
6		(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,
7		eff. 7-9-15; 99-523, eff. 6-30-16.)
8		(40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
9		(Text of Section WITHOUT the changes made by P.A. 98-599,
10		which has been held unconstitutional)
11		Sec. 14-133. Contributions on behalf of members.
12		(a) Except as provided in subsection (a-5), each Each
13		participating employee shall make contributions to the System,
14		based on the employee's compensation, as follows:
15		(1) Covered employees, except as indicated below, 3.5%
16		for retirement annuity, and 0.5% for a widow or survivors
17		annuity;
18		(2) Noncovered employees, except as indicated below,
19		7% for retirement annuity and 1% for a widow or survivors
20		annuity;
21		(3) Noncovered employees serving in a position in which
22		"eligible creditable service" as defined in Section 14-110
23		may be earned, 1% for a widow or survivors annuity plus the
24		following amount for retirement annuity: 8.5% through
25		December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%

HB4045 Engrossed - 134 - LRB100 12674 RPS 26063 b
1		in 2004 and thereafter;
2		(4) Covered employees serving in a position in which
3		"eligible creditable service" as defined in Section 14-110
4		may be earned, 0.5% for a widow or survivors annuity plus
5		the following amount for retirement annuity: 5% through
6		December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
7		and thereafter;
8		(5) Each security employee of the Department of
9		Corrections or of the Department of Human Services who is a
10		covered employee, 0.5% for a widow or survivors annuity
11		plus the following amount for retirement annuity: 5%
12		through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
13		in 2004 and thereafter;
14		(6) Each security employee of the Department of
15		Corrections or of the Department of Human Services who is
16		not a covered employee, 1% for a widow or survivors annuity
17		plus the following amount for retirement annuity: 8.5%
18		through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
19		11.5% in 2004 and thereafter.
20		(a-5) Beginning July 1, 2019 or the effective date of the
21		Tier 1 employee's election under paragraph (1) of subsection
22		(a) of Section 14-106.5, whichever is later, in lieu of the
23		contributions otherwise required under subsection (a), each
24		Tier 1 employee who made the election under paragraph (1) of
25		subsection (a) of Section 14-106.5 who is a participating
26		employee shall make contributions to the System, based on his

HB4045 Engrossed - 135 - LRB100 12674 RPS 26063 b
1		or her compensation, as follows:
2		(1) Covered employees, except as indicated below,
3		3.15% for retirement annuity, and 0.45% for a widow or
4		survivors annuity;
5		(2) Noncovered employees, except as indicated below,
6		6.3% for retirement annuity and 0.9% for a widow or
7		survivors annuity;
8		(3) Noncovered employees serving in a position in which
9		"eligible creditable service" as defined in Section 14-110
10		may be earned, 10.35% for retirement annuity and 0.9% for a
11		widow or survivors annuity;
12		(4) Covered employees serving in a position in which
13		"eligible creditable service" as defined in Section 14-110
14		may be earned, 7.2% for retirement annuity and 0.45% for a
15		widow or survivors annuity;
16		(5) Each security employee of the Department of
17		Corrections or of the Department of Human Services who is a
18		covered employee, 10.8% for retirement annuity and 0.45%
19		for a widow or survivors annuity;
20		(6) Each security employee of the Department of
21		Corrections or of the Department of Human Services who is
22		not a covered employee, 10.35% for retirement annuity and
23		0.9% for a widow or survivors annuity.
24		(b) Contributions shall be in the form of a deduction from
25		compensation and shall be made notwithstanding that the
26		compensation paid in cash to the employee shall be reduced

HB4045 Engrossed - 136 - LRB100 12674 RPS 26063 b
1		thereby below the minimum prescribed by law or regulation. Each
2		member is deemed to consent and agree to the deductions from
3		compensation provided for in this Article, and shall receipt in
4		full for salary or compensation.
5		(Source: P.A. 92-14, eff. 6-28-01.)
6		(40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
7		(Text of Section WITHOUT the changes made by P.A. 98-599,
8		which has been held unconstitutional)
9		Sec. 14-135.08. To certify required State contributions.
10		(a) To certify to the Governor and to each department, on
11		or before November 15 of each year until November 15, 2011, the
12		required rate for State contributions to the System for the
13		next State fiscal year, as determined under subsection (b) of
14		Section 14-131. The certification to the Governor under this
15		subsection (a) shall include a copy of the actuarial
16		recommendations upon which the rate is based and shall
17		specifically identify the System's projected State normal cost
18		for that fiscal year.
19		(a-5) On or before November 1 of each year, beginning
20		November 1, 2012, the Board shall submit to the State Actuary,
21		the Governor, and the General Assembly a proposed certification
22		of the amount of the required State contribution to the System
23		for the next fiscal year, along with all of the actuarial
24		assumptions, calculations, and data upon which that proposed
25		certification is based. On or before January 1 of each year

HB4045 Engrossed - 137 - LRB100 12674 RPS 26063 b
1		beginning January 1, 2013, the State Actuary shall issue a
2		preliminary report concerning the proposed certification and
3		identifying, if necessary, recommended changes in actuarial
4		assumptions that the Board must consider before finalizing its
5		certification of the required State contributions. On or before
6		January 15, 2013 and each January 15 thereafter, the Board
7		shall certify to the Governor and the General Assembly the
8		amount of the required State contribution for the next fiscal
9		year. The Board's certification must note any deviations from
10		the State Actuary's recommended changes, the reason or reasons
11		for not following the State Actuary's recommended changes, and
12		the fiscal impact of not following the State Actuary's
13		recommended changes on the required State contribution.
14		(a-10) For purposes of subsection (c-5) of Section 20 of
15		the Budget Stabilization Act, on or before November 1 of each
16		year beginning November 1, 2019, the Board shall determine the
17		amount of the State contribution to the System that would have
18		been required for the next fiscal year if Section 1-161,
19		Section 14-155.2, and the changes made to Section 1-160 by this
20		amendatory Act of the 100th General Assembly had not taken
21		effect, using the best and most recent available data but based
22		on the law in effect on May 31, 2019. The Board shall submit to
23		the State Actuary, the Governor, and the General Assembly a
24		proposed certification, along with the relevant law, actuarial
25		assumptions, calculations, and data upon which that
26		certification is based. On or before January 1, 2020 and every

HB4045 Engrossed - 138 - LRB100 12674 RPS 26063 b
1		January 1 thereafter, the State Actuary shall issue a
2		preliminary report concerning the proposed certification and
3		identifying, if necessary, recommended changes in actuarial
4		assumptions that the Board must consider before finalizing its
5		certification. On or before January 15, 2020 and every January
6		1 thereafter, the Board shall certify to the Governor and the
7		General Assembly the amount of the State contribution to the
8		System that would have been required for the next fiscal year
9		if Section 1-161, Section 14-155.2, and the changes made to
10		Section 1-160 by this amendatory Act of the 100th General
11		Assembly had not taken effect, using the best and most recent
12		available data but based on the law in effect on May 31, 2019.
13		The Board's certification must note any deviations from the
14		State Actuary's recommended changes, the reason or reasons for
15		not following the State Actuary's recommended changes, and the
16		impact of not following the State Actuary's recommended
17		changes.
18		(b) The certifications under subsections (a) and (a-5)
19		shall include an additional amount necessary to pay all
20		principal of and interest on those general obligation bonds due
21		the next fiscal year authorized by Section 7.2(a) of the
22		General Obligation Bond Act and issued to provide the proceeds
23		deposited by the State with the System in July 2003,
24		representing deposits other than amounts reserved under
25		Section 7.2(c) of the General Obligation Bond Act. For State
26		fiscal year 2005, the Board shall make a supplemental

HB4045 Engrossed - 139 - LRB100 12674 RPS 26063 b
1		certification of the additional amount necessary to pay all
2		principal of and interest on those general obligation bonds due
3		in State fiscal years 2004 and 2005 authorized by Section
4		7.2(a) of the General Obligation Bond Act and issued to provide
5		the proceeds deposited by the State with the System in July
6		2003, representing deposits other than amounts reserved under
7		Section 7.2(c) of the General Obligation Bond Act, as soon as
8		practical after the effective date of this amendatory Act of
9		the 93rd General Assembly.
10		On or before May 1, 2004, the Board shall recalculate and
11		recertify to the Governor and to each department the amount of
12		the required State contribution to the System and the required
13		rates for State contributions to the System for State fiscal
14		year 2005, taking into account the amounts appropriated to and
15		received by the System under subsection (d) of Section 7.2 of
16		the General Obligation Bond Act.
17		On or before July 1, 2005, the Board shall recalculate and
18		recertify to the Governor and to each department the amount of
19		the required State contribution to the System and the required
20		rates for State contributions to the System for State fiscal
21		year 2006, taking into account the changes in required State
22		contributions made by this amendatory Act of the 94th General
23		Assembly.
24		On or before April 1, 2011, the Board shall recalculate and
25		recertify to the Governor and to each department the amount of
26		the required State contribution to the System for State fiscal

HB4045 Engrossed - 140 - LRB100 12674 RPS 26063 b
1		year 2011, applying the changes made by Public Act 96-889 to
2		the System's assets and liabilities as of June 30, 2009 as
3		though Public Act 96-889 was approved on that date.
4		As soon as practical after the effective date of this
5		amendatory Act of the 100th General Assembly, the Board shall
6		recalculate and recertify to the State Actuary, the Governor,
7		and the General Assembly the amount of the State contribution
8		to the System for State fiscal year 2018, taking into account
9		the changes in required State contributions made by this
10		amendatory Act of the 100th General Assembly. The State Actuary
11		shall review the assumptions and valuations underlying the
12		Board's revised certification and issue a preliminary report
13		concerning the proposed recertification and identifying, if
14		necessary, recommended changes in actuarial assumptions that
15		the Board must consider before finalizing its certification of
16		the required State contributions. The Board's final
17		certification must note any deviations from the State Actuary's
18		recommended changes, the reason or reasons for not following
19		the State Actuary's recommended changes, and the fiscal impact
20		of not following the State Actuary's recommended changes on the
21		required State contribution.
22		On or before May 1, 2019, the Board shall recalculate and
23		recertify to the Governor and the General Assembly the amount
24		of the required State contribution to the System for State
25		fiscal year 2020, taking into account the effect on the
26		System's liabilities of the elections made under Section

HB4045 Engrossed - 141 - LRB100 12674 RPS 26063 b
1		14-106.5.
2		On or before October 1, 2019, the Board shall recalculate
3		and recertify to the Governor and the General Assembly the
4		amount of the required State contribution to the System for
5		State fiscal year 2020, taking into account the reduction
6		specified under item (3) of subsection (e) of Section 14-131.
7		(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
8		97-694, eff. 6-18-12.)
9		(40 ILCS 5/14-147.5 new)
10		Sec. 14-147.5. Accelerated pension benefit payment.
11		(a) As used in this Section:
12		"Eligible person" means a person who:
13		(1) has terminated service;
14		(2) has accrued sufficient service credit to be
15		eligible to receive a retirement annuity under this
16		Article;
17		(3) has not received any retirement annuity under this
18		Article; and
19		(4) does not have a QILDRO in effect against him or her
20		under this Article.
21		"Pension benefit" means the benefits under this Article, or
22		Article 1 as it relates to those benefits, including any
23		anticipated annual increases, that an eligible person is
24		entitled to upon attainment of the applicable retirement age.
25		"Pension benefit" also includes applicable survivor's or

HB4045 Engrossed - 142 - LRB100 12674 RPS 26063 b
1		disability benefits.
2		(b) Before January 1, 2019, and annually thereafter, the
3		System shall calculate, using actuarial tables and other
4		assumptions adopted by the Board, the net present value of
5		pension benefits for each eligible person and shall offer each
6		eligible person the opportunity to irrevocably elect to receive
7		an amount determined by the System to be equal to 70% of the
8		net present value of his or her pension benefits in lieu of
9		receiving any pension benefit. The offer shall specify the
10		dollar amount that the eligible person will receive if he or
11		she so elects and shall expire when a subsequent offer is made
12		to an eligible person or when the System determines that 10% of
13		eligible persons in that year have made the election under this
14		subsection, whichever occurs first. The System shall make a
15		good faith effort to contact every eligible person to notify
16		him or her of the election and of the amount of the accelerated
17		pension benefit payment.
18		Until the System determines that 10% of eligible persons in
19		that year have made the election under this subsection, an
20		eligible person may irrevocably elect to receive an accelerated
21		pension benefit payment in the amount that the System offers
22		under this subsection in lieu of receiving any pension benefit.
23		A person who elects to receive an accelerated pension benefit
24		payment under this Section may not elect to proceed under the
25		Retirement Systems Reciprocal Act with respect to service under
26		this Article.

HB4045 Engrossed - 143 - LRB100 12674 RPS 26063 b
1		(c) A person's credits and creditable service under this
2		Article shall be terminated upon the person's receipt of an
3		accelerated pension benefit payment under this Section, and no
4		other benefit shall be paid under this Article based on those
5		terminated credits and creditable service, including any
6		retirement, survivor, or other benefit; except that to the
7		extent that participation, benefits, or premiums under the
8		State Employees Group Insurance Act of 1971 are based on the
9		amount of service credit, the terminated service credit shall
10		be used for that purpose.
11		(d) If a person who has received an accelerated pension
12		benefit payment under this Section returns to active service
13		under this Article, then:
14		(1) Any benefits under the System earned as a result of
15		that return to active service shall be based solely on the
16		person's credits and creditable service arising from the
17		return to active service.
18		(2) The accelerated pension benefit payment may not be
19		repaid to the System, and the terminated credits and
20		creditable service may not under any circumstances be
21		reinstated.
22		(e) As a condition of receiving an accelerated pension
23		benefit payment, an eligible person must have another
24		retirement plan or account qualified under the Internal Revenue
25		Code of 1986, as amended, for the accelerated pension benefit
26		payment to be rolled into. The accelerated pension benefit

HB4045 Engrossed - 144 - LRB100 12674 RPS 26063 b
1		payment under this Section may be subject to withholding or
2		payment of applicable taxes, but to the extent permitted by
3		federal law, a person who receives an accelerated pension
4		benefit payment under this Section must direct the System to
5		pay all of that payment as a rollover into another retirement
6		plan or account qualified under the Internal Revenue Code of
7		1986, as amended.
8		(f) Before January 1, 2020 and every January 1 thereafter,
9		the Board shall certify to the Illinois Finance Authority and
10		the General Assembly the amount by which the total amount of
11		accelerated pension benefit payments made under this Section
12		exceed the amount appropriated to the System for the purpose of
13		making those payments.
14		(g) The Board shall adopt any rules necessary to implement
15		this Section.
16		(h) No provision of this Section shall be interpreted in a
17		way that would cause the applicable System to cease to be a
18		qualified plan under the Internal Revenue Code of 1986.
19		(i) Notwithstanding any other provision of this Section, in
20		no case shall the total amount of accelerated pension benefit
21		payments paid under this Section, Section 15-185.5, and Section
22		16-190.5 cause the Illinois Finance Authority to issue more
23		than the $250,000,000 of State Pension Obligation Acceleration
24		Bonds authorized in subsection (c-5) of Section 801-40 of the
25		Illinois Finance Authority Act.

HB4045 Engrossed - 145 - LRB100 12674 RPS 26063 b
1		(40 ILCS 5/14-152.1)
2		(Text of Section WITHOUT the changes made by P.A. 98-599,
3		which has been held unconstitutional)
4		Sec. 14-152.1. Application and expiration of new benefit
5		increases.
6		(a) As used in this Section, "new benefit increase" means
7		an increase in the amount of any benefit provided under this
8		Article, or an expansion of the conditions of eligibility for
9		any benefit under this Article, that results from an amendment
10		to this Code that takes effect after June 1, 2005 (the
11		effective date of Public Act 94-4). "New benefit increase",
12		however, does not include any benefit increase resulting from
13		the changes made to this Article by Public Act 96-37 or by this
14		amendatory Act of the 100th General Assembly this amendatory
15		Act of the 96th General Assembly.
16		(b) Notwithstanding any other provision of this Code or any
17		subsequent amendment to this Code, every new benefit increase
18		is subject to this Section and shall be deemed to be granted
19		only in conformance with and contingent upon compliance with
20		the provisions of this Section.
21		(c) The Public Act enacting a new benefit increase must
22		identify and provide for payment to the System of additional
23		funding at least sufficient to fund the resulting annual
24		increase in cost to the System as it accrues.
25		Every new benefit increase is contingent upon the General
26		Assembly providing the additional funding required under this

HB4045 Engrossed - 146 - LRB100 12674 RPS 26063 b
1		subsection. The Commission on Government Forecasting and
2		Accountability shall analyze whether adequate additional
3		funding has been provided for the new benefit increase and
4		shall report its analysis to the Public Pension Division of the
5		Department of Insurance Financial and Professional Regulation.
6		A new benefit increase created by a Public Act that does not
7		include the additional funding required under this subsection
8		is null and void. If the Public Pension Division determines
9		that the additional funding provided for a new benefit increase
10		under this subsection is or has become inadequate, it may so
11		certify to the Governor and the State Comptroller and, in the
12		absence of corrective action by the General Assembly, the new
13		benefit increase shall expire at the end of the fiscal year in
14		which the certification is made.
15		(d) Every new benefit increase shall expire 5 years after
16		its effective date or on such earlier date as may be specified
17		in the language enacting the new benefit increase or provided
18		under subsection (c). This does not prevent the General
19		Assembly from extending or re-creating a new benefit increase
20		by law.
21		(e) Except as otherwise provided in the language creating
22		the new benefit increase, a new benefit increase that expires
23		under this Section continues to apply to persons who applied
24		and qualified for the affected benefit while the new benefit
25		increase was in effect and to the affected beneficiaries and
26		alternate payees of such persons, but does not apply to any

HB4045 Engrossed - 147 - LRB100 12674 RPS 26063 b
1		other person, including without limitation a person who
2		continues in service after the expiration date and did not
3		apply and qualify for the affected benefit while the new
4		benefit increase was in effect.
5		(Source: P.A. 96-37, eff. 7-13-09.)
6		(40 ILCS 5/14-155.1 new)
7		Sec. 14-155.1. Defined contribution plan.
8		(a) By July 1, 2019, the System shall prepare and implement
9		a voluntary defined contribution plan for up to 5% of eligible
10		active Tier 1 employees. The System shall determine the 5% cap
11		by the number of active Tier 1 employees on the effective date
12		of this Section. The defined contribution plan developed under
13		this Section shall be a plan that aggregates employer and
14		employee contributions in individual participant accounts
15		which, after meeting any other requirements, are used for
16		payouts after retirement in accordance with this Section and
17		any other applicable laws.
18		As used in this Section, "defined benefit plan" means the
19		retirement plan available under this Article to Tier 1
20		employees who have not made the election authorized under this
21		Section.
22		(1) Under the defined contribution plan, an active Tier
23		1 employee of this System could elect to cease accruing
24		benefits in the defined benefit plan under this Article and
25		begin accruing benefits for future service in the defined

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1		contribution plan. Service credit under the defined
2		contribution plan may be used for determining retirement
3		eligibility under the defined benefit plan.
4		(2) Participants in the defined contribution plan
5		shall pay employee contributions at the same rate as Tier 1
6		employees in this System who do not participate in the
7		defined contribution plan.
8		(3) State contributions shall be paid into the accounts
9		of all participants in the defined contribution plan at a
10		uniform rate, expressed as a percentage of compensation and
11		determined for each year. This rate shall be no higher than
12		the employer's normal cost for Tier 1 employees in the
13		defined benefit plan for that year, as determined by the
14		System and expressed as a percentage of compensation, and
15		shall be no lower than 3% of compensation. The State shall
16		adjust this rate annually.
17		(4) The defined contribution plan shall require 5 years
18		of participation in the defined contribution plan before
19		vesting in State contributions. If the participant fails to
20		vest in them, the State contributions, and the earnings
21		thereon, shall be forfeited.
22		(5) The defined contribution plan may provide for
23		participants in the plan to be eligible for the defined
24		disability benefits available to other participants under
25		this Article. If it does, the System shall reduce the
26		employee contributions credited to the member's defined

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1		contribution plan account by an amount determined by the
2		System to cover the cost of offering such benefits.
3		(6) The defined contribution plan shall provide a
4		variety of options for investments. These options shall
5		include investments handled by the Illinois State Board of
6		Investment as well as private sector investment options.
7		(7) The defined contribution plan shall provide a
8		variety of options for payouts to retirees and their
9		survivors.
10		(8) To the extent authorized under federal law and as
11		authorized by the System, the plan shall allow former
12		participants in the plan to transfer or roll over employee
13		and vested State contributions, and the earnings thereon,
14		into other qualified retirement plans.
15		(9) The System shall reduce the employee contributions
16		credited to the member's defined contribution plan account
17		by an amount determined by the System to cover the cost of
18		offering these benefits and any applicable administrative
19		fees.
20		(b) Only persons who are active Tier 1 employees of the
21		System on the effective date of this Section are eligible to
22		participate in the defined contribution plan. Participation in
23		the defined contribution plan shall be limited to the first 5%
24		of eligible persons who elect to participate. The election to
25		participate in the defined contribution plan is voluntary and
26		irrevocable.

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1		(c) An eligible Tier 1 employee may irrevocably elect to
2		participate in the defined contribution plan by filing with the
3		System a written application to participate that is received by
4		the System prior to its determination that 5% of eligible
5		persons have elected to participate in the defined contribution
6		plan.
7		When the System first determines that 5% of eligible
8		persons have elected to participate in the defined contribution
9		plan, the System shall provide notice to previously eligible
10		employees that the plan is no longer available and shall cease
11		accepting applications to participate.
12		(d) The System shall make a good faith effort to contact
13		each active Tier 1 employee who is eligible to participate in
14		the defined contribution plan. The System shall mail
15		information describing the option to join the defined
16		contribution plan to each of these employees to his or her last
17		known address on file with the System. If the employee is not
18		responsive to other means of contact, it is sufficient for the
19		System to publish the details of the option on its website.
20		Upon request for further information describing the
21		option, the System shall provide employees with information
22		from the System before exercising the option to join the plan,
23		including information on the impact to their vested benefits or
24		non-vested service. The individual consultation shall include
25		projections of the member's defined benefits at retirement or
26		earlier termination of service and the value of the member's

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1		account at retirement or earlier termination of service. The
2		System shall not provide advice or counseling with respect to
3		whether the employee should exercise the option. The System
4		shall inform Tier 1 employees who are eligible to participate
5		in the defined contribution plan that they may also wish to
6		obtain information and counsel relating to their option from
7		any other available source, including, but not limited to,
8		labor organizations, private counsel, and financial advisors.
9		(e) In no event shall the System, its staff, its authorized
10		representatives, or the Board be liable for any information
11		given to an employee under this Section. The System may
12		coordinate with the Illinois Department of Central Management
13		Services and other retirement systems administering a defined
14		contribution plan in accordance with this amendatory Act of the
15		100th General Assembly to provide information concerning the
16		impact of the option set forth in this Section.
17		(f) Notwithstanding any other provision of this Section, no
18		person shall begin participating in the defined contribution
19		plan until it has attained qualified plan status and received
20		all necessary approvals from the U.S. Internal Revenue Service.
21		(g) The System shall report on its progress under this
22		Section, including the available details of the defined
23		contribution plan and the System's plans for informing eligible
24		Tier 1 employees about the plan, to the Governor and the
25		General Assembly on or before January 15, 2019.
26		(h) The Illinois State Board of Investment shall be the

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1		plan sponsor for the defined contribution plan established
2		under this Section.
3		(i) The intent of this amendatory Act of the 100th General
4		Assembly is to ensure that the State's normal cost of
5		participation in the defined contribution plan is similar, and
6		if possible equal, to the State's normal cost of participation
7		in the defined benefit plan, unless a lower State's normal cost
8		is necessary to ensure cost neutrality.
9		(40 ILCS 5/14-155.2 new)
10		Sec. 14-155.2. Defined contribution plan for certain
11		covered employees.
12		(a) As used in this Section:
13		"Defined benefit plan" means the retirement plan available
14		under this Article and Section 1-160 to eligible covered
15		employees who do not make the election authorized under this
16		Section.
17		"Eligible covered employee" means a covered employee who
18		first becomes a participant under this Article on or after 6
19		months after the effective date of this amendatory Act of the
20		100th General Assembly.
21		(b) In lieu of the defined benefit plan, an eligible
22		covered employee may irrevocably elect to participate in the
23		defined contribution plan under this Section. The election to
24		participate in the defined contribution plan must be made
25		within 30 days after becoming an eligible covered employee. The

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1		election to participate in the defined contribution plan under
2		this Section is voluntary and irrevocable.
3		(c) No later than 5 months after the effective date of this
4		amendatory Act of the 100th General Assembly, the System shall
5		prepare and implement a voluntary defined contribution plan for
6		eligible covered employees. The defined contribution plan
7		developed under this Section shall be a plan that aggregates
8		employer and employee contributions in individual participant
9		accounts which, after meeting any other requirements, are used
10		for payouts after retirement in accordance with this Section
11		and any other applicable laws.
12		(1) A participant in the defined contribution plan
13		shall contribute a minimum of 3% of his or her compensation
14		to the defined contribution plan.
15		(2) For persons who participate in the defined
16		contribution plan for at least one year, employer
17		contributions shall be paid into the accounts of those
18		participants at a rate of 3% of compensation.
19		(3) Employer contributions shall vest when those
20		contributions are paid into a participant's account.
21		(4) The defined contribution plan shall provide a
22		variety of options for investments. These options shall
23		include investments handled by the Illinois State Board of
24		Investment as well as private sector investment options.
25		(5) The defined contribution plan shall provide a
26		variety of options for payouts to retirees and their

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1		survivors.
2		(6) To the extent authorized under federal law and as
3		authorized by the affected pension fund, the defined
4		contribution plan shall allow former participants in the
5		plan to transfer or roll over employee and employer
6		contributions, and the earnings thereon, into other
7		qualified retirement plans.
8		(7) The System shall reduce the employee contributions
9		credited to the participant's defined contribution plan
10		account by an amount determined by the System to cover the
11		cost of offering the benefits under this Section and any
12		applicable administrative fees.
13		(40 ILCS 5/14-156.1 new)
14		Sec. 14-156.1. Defined contribution plan; termination. If
15		the defined contribution plan under Section 14-155.1 is
16		terminated or becomes inoperative pursuant to law, then each
17		participant in the plan shall automatically be deemed to have
18		been a contributing Tier 1 employee in the System's defined
19		benefit plan during the time in which he or she participated in
20		the defined contribution plan, and for that purpose the System
21		shall be entitled to recover the amounts in the participant's
22		defined contribution accounts.
23		(40 ILCS 5/15-108.1)
24		Sec. 15-108.1. Tier 1 member; Tier 1 employee.

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1		"Tier 1 member": A participant or an annuitant of a
2		retirement annuity under this Article, other than a participant
3		in the self-managed plan under Section 15-158.2, who first
4		became a participant or member before January 1, 2011 under any
5		reciprocal retirement system or pension fund established under
6		this Code, other than a retirement system or pension fund
7		established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
8		"Tier 1 member" includes a person who first became a
9		participant under this System before January 1, 2011 and who
10		accepts a refund and is subsequently reemployed by an employer
11		on or after January 1, 2011.
12		"Tier 1 employee": A Tier 1 member who is a participating
13		employee, unless he or she is a disability benefit recipient
14		under Section 15-150. However, for the purposes of the election
15		under Section 15-132.9, "Tier 1 employee" does not include an
16		individual who has made an irrevocable election on or before
17		June 1, 2017 to retire from service pursuant to the terms of an
18		employment contract or a collective bargaining agreement in
19		effect on June 1, 2017, excluding any extension, amendment, or
20		renewal of that agreement on or after that date, and has
21		notified the System of that election.
22		(Source: P.A. 98-92, eff. 7-16-13.)
23		(40 ILCS 5/15-108.2)
24		Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
25		first becomes a participant under this Article on or after

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1		January 1, 2011 and before 6 months after the effective date of
2		this amendatory Act of the 100th General Assembly, other than a
3		person in the self-managed plan established under Section
4		15-158.2 or a person who makes the election under subsection
5		(c) of Section 1-161, unless the person is otherwise a Tier 1
6		member. The changes made to this Section by this amendatory Act
7		of the 98th General Assembly are a correction of existing law
8		and are intended to be retroactive to the effective date of
9		Public Act 96-889, notwithstanding the provisions of Section
10		1-103.1 of this Code.
11		(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
12		(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
13		Sec. 15-111. Earnings.
14		(a) "Earnings": Subject to Section 15-111.5, an amount paid
15		for personal services equal to the sum of the basic
16		compensation plus extra compensation for summer teaching,
17		overtime or other extra service. For periods for which an
18		employee receives service credit under subsection (c) of
19		Section 15-113.1 or Section 15-113.2, earnings are equal to the
20		basic compensation on which contributions are paid by the
21		employee during such periods. Compensation for employment
22		which is irregular, intermittent and temporary shall not be
23		considered earnings, unless the participant is also receiving
24		earnings from the employer as an employee under Section 15-107.
25		With respect to transition pay paid by the University of

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1		Illinois to a person who was a participating employee employed
2		in the fire department of the University of Illinois's
3		Champaign-Urbana campus immediately prior to the elimination
4		of that fire department:
5		(1) "Earnings" includes transition pay paid to the
6		employee on or after the effective date of this amendatory
7		Act of the 91st General Assembly.
8		(2) "Earnings" includes transition pay paid to the
9		employee before the effective date of this amendatory Act
10		of the 91st General Assembly only if (i) employee
11		contributions under Section 15-157 have been withheld from
12		that transition pay or (ii) the employee pays to the System
13		before January 1, 2001 an amount representing employee
14		contributions under Section 15-157 on that transition pay.
15		Employee contributions under item (ii) may be paid in a
16		lump sum, by withholding from additional transition pay
17		accruing before January 1, 2001, or in any other manner
18		approved by the System. Upon payment of the employee
19		contributions on transition pay, the corresponding
20		employer contributions become an obligation of the State.
21		(a-5) Notwithstanding any other provision of this Section,
22		"earnings" does not include any future increase in income that
23		is offered for service by an employer to a Tier 1 employee
24		under this Article pursuant to the condition set forth in
25		subsection (c) of Section 15-132.9 and accepted under that
26		condition by a Tier 1 employee who has made the election under

HB4045 Engrossed - 158 - LRB100 12674 RPS 26063 b
1		paragraph (2) of subsection (a) of Section 15-132.9.
2		(a-10) Notwithstanding any other provision of this
3		Section, "earnings" does not include any consideration payment
4		made to a Tier 1 employee.
5		(b) For a Tier 2 member, the annual earnings shall not
6		exceed $106,800; however, that amount shall annually
7		thereafter be increased by the lesser of (i) 3% of that amount,
8		including all previous adjustments, or (ii) one half the annual
9		unadjusted percentage increase (but not less than zero) in the
10		consumer price index-u for the 12 months ending with the
11		September preceding each November 1, including all previous
12		adjustments.
13		For the purposes of this Section, "consumer price index u"
14		means the index published by the Bureau of Labor Statistics of
15		the United States Department of Labor that measures the average
16		change in prices of goods and services purchased by all urban
17		consumers, United States city average, all items, 1982-84 =
18		100. The new amount resulting from each annual adjustment shall
19		be determined by the Public Pension Division of the Department
20		of Insurance and made available to the boards of the retirement
21		systems and pension funds by November 1 of each year.
22		(c) With each submission of payroll information in the
23		manner prescribed by the System, the employer shall certify
24		that the payroll information is correct and complies with all
25		applicable State and federal laws.
26		(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)

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1		(40 ILCS 5/15-112.1 new)
2		Sec. 15-112.1. Future increase in income. "Future increase
3		in income" means an increase to a Tier 1 employee's base pay
4		that is offered by an employer to the Tier 1 employee for
5		service under this Article after June 30, 2018 that qualifies
6		as "earnings", as defined in Section 15-111, or would qualify
7		as "earnings" but for the fact that it was offered to and
8		accepted by the Tier 1 employee under the condition set forth
9		in subsection (c) of Section 15-132.9. The term "future
10		increase in income" includes an increase to a Tier 1 employee's
11		base pay that is paid to the Tier 1 employee pursuant to an
12		extension, amendment, or renewal of any such employment
13		contract or collective bargaining agreement after the
14		effective date of this Section.
15		(40 ILCS 5/15-112.2 new)
16		Sec. 15-112.2. Base pay. As used in Section 15-112.1 of
17		this Code, "base pay" means the greater of either (i) the Tier
18		1 employee's annualized rate of earnings as of June 30, 2018,
19		or (ii) the Tier 1 employee's annualized rate of earnings
20		immediately preceding the expiration, renewal, or amendment of
21		an employment contract or collective bargaining agreement in
22		effect on the effective date of this Section. For a person
23		returning to participating employee status as a Tier 1 employee
24		after June 30, 2018, however, "base pay" means the employee's

HB4045 Engrossed - 160 - LRB100 12674 RPS 26063 b
1		annualized rate of earnings as of the employee's last date of
2		service prior to July 1, 2018. The System shall calculate the
3		base pay of each Tier 1 employee pursuant to this Section.
4		(40 ILCS 5/15-132.9 new)
5		Sec. 15-132.9. Election by Tier 1 employees.
6		(a) Each Tier 1 employee shall make an irrevocable election
7		either:
8		(1) to agree to delay his or her eligibility for
9		automatic annual increases in retirement annuity as
10		provided in subsection (d-1) of Section 15-136 and to have
11		the amount of the automatic annual increases in his or her
12		retirement annuity and survivor annuity that are otherwise
13		provided for in this Article calculated, instead, as
14		provided in subsection (d-1) of Section 15-136; or
15		(2) to not agree to the provisions of paragraph (1) of
16		this subsection.
17		The election required under this subsection (a) shall be
18		made by each Tier 1 employee no earlier than January 1, 2018
19		and no later than March 31, 2018, except that:
20		(i) a person who becomes a Tier 1 employee under this
21		Article on or after January 1, 2018 must make the election
22		under this subsection (a) within 60 days after becoming a
23		Tier 1 employee;
24		(ii) a person who returns to participating employee
25		status as a Tier 1 employee under this Article on or after

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1		January 1, 2018 and has not yet made an election under this
2		Section must make the election under this subsection (a)
3		within 60 days after returning to participating employee
4		status as a Tier 1 employee; and
5		(iii) a person who returns to participating employee
6		status as a Tier 1 employee under this Article but who has
7		not made an election under Section 15-134.5 must make the
8		election under this subsection (a) at the same time as the
9		election under Section 15-134.5 and within the timeframes
10		required by that Section.
11		If a Tier 1 employee fails for any reason to make a
12		required election under this subsection within the time
13		specified, then the employee shall be deemed to have made the
14		election under paragraph (2) of this subsection.
15		(a-5) If this Section is enjoined or stayed by an Illinois
16		court or a court of competent jurisdiction pending the entry of
17		a final and unappealable decision, and this Section is
18		determined to be constitutional or otherwise valid by a final
19		unappealable decision of an Illinois court or a court of
20		competent jurisdiction, then the election procedure set forth
21		in subsection (a) of this Section shall commence on the 180th
22		calendar day after the date of the issuance of the final
23		unappealable decision and shall conclude at the end of the
24		270th calendar day after that date.
25		(a-10) All elections under subsection (a) that are made or
26		deemed to be made before July 1, 2018 shall take effect on July

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1		1, 2018. Elections that are made or deemed to be made on or
2		after July 1, 2018 shall take effect on the first day of the
3		month following the month in which the election is made or
4		deemed to be made.
5		(b) As adequate and legal consideration provided under this
6		amendatory Act of the 100th General Assembly for making an
7		election under paragraph (1) of subsection (a) of this Section,
8		the employer shall be expressly and irrevocably prohibited from
9		offering any future increases in income to a Tier 1 employee
10		who has made an election under paragraph (1) of subsection (a)
11		of this Section on the condition of not constituting earnings
12		under Section 15-111.
13		As adequate and legal consideration provided under this
14		amendatory Act of the 100th General Assembly for making an
15		election under paragraph (1) of subsection (a) of this Section,
16		each Tier 1 employee who has made an election under paragraph
17		(1) of subsection (a) of this Section shall receive a
18		consideration payment equal to 10% of the contributions made by
19		or on behalf of the employee under Section 15-157 before the
20		effective date of that election. The State Comptroller shall
21		pay the consideration payment to the Tier 1 employee out of
22		funds appropriated for that purpose under Section 1.9 of the
23		State Pension Funds Continuing Appropriation Act. The System
24		shall calculate the amount of each consideration payment and,
25		by July 1, 2018, shall certify to the State Comptroller the
26		amount of the consideration payment, together with the name,

HB4045 Engrossed - 163 - LRB100 12674 RPS 26063 b
1		address, and any other available payment information of the
2		Tier 1 employee as found in the records of the System. The
3		System shall make additional calculations and certifications
4		of consideration payments to the State Comptroller as the
5		System deems necessary.
6		(c) A Tier 1 employee who makes the election under
7		paragraph (2) of subsection (a) of this Section shall not be
8		subject to paragraph (1) of subsection (a) of this Section.
9		However, each future increase in income offered by an employer
10		under this Article to a Tier 1 employee who has made the
11		election under paragraph (2) of subsection (a) of this Section
12		shall be offered by the employer expressly and irrevocably on
13		the condition of not constituting earnings under Section 15-111
14		and that the Tier 1 employee's acceptance of the offered future
15		increase in income shall constitute his or her agreement to
16		that condition.
17		(d) The System shall make a good faith effort to contact
18		each Tier 1 employee subject to this Section. The System shall
19		mail information describing the required election to each Tier
20		1 employee by United States Postal Service mail to his or her
21		last known address on file with the System. If the Tier 1
22		employee is not responsive to other means of contact, it is
23		sufficient for the System to publish the details of any
24		required elections on its website or to publish those details
25		in a regularly published newsletter or other existing public
26		forum.

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1		Tier 1 employees who are subject to this Section shall be
2		provided with an election packet containing information
3		regarding their options, as well as the forms necessary to make
4		the required election. Upon request, the System shall offer
5		Tier 1 employees an opportunity to receive information from the
6		System before making the required election. The information may
7		consist of video materials, benefit estimators, group
8		presentations, individual consultation with a member or
9		authorized representative of the System in person or by
10		telephone or other electronic means, or any combination of
11		these methods. The System shall not provide advice or
12		counseling with respect to which election a Tier 1 employee
13		should make or specific to the legal or tax circumstances of or
14		consequences to the Tier 1 employee.
15		The System shall inform Tier 1 employees in the election
16		packet required under this subsection that the Tier 1 employee
17		may also wish to obtain information and counsel relating to the
18		election required under this Section from any other available
19		source, including, but not limited to, labor organizations and
20		private counsel.
21		In no event shall the System, its staff, or the Board be
22		held liable for any information given to a member regarding the
23		elections under this Section. The System shall coordinate with
24		the Illinois Department of Central Management Services and each
25		other retirement system administering an election in
26		accordance with this amendatory Act of the 100th General

HB4045 Engrossed - 165 - LRB100 12674 RPS 26063 b
1		Assembly to provide information concerning the impact of the
2		election set forth in this Section.
3		(e) Notwithstanding any other provision of law, an employer
4		under this Article is required to offer each future increase in
5		income expressly and irrevocably on the condition of not
6		constituting "earnings" under Section 15-111 to any Tier 1
7		employee who has made an election under paragraph (2) of
8		subsection (a) of this Section. The offer shall also provide
9		that the Tier 1 employee's acceptance of the offered future
10		increase in income shall constitute his or her agreement to the
11		condition set forth in this subsection.
12		For purposes of legislative intent, the condition set forth
13		in this subsection shall be construed in a manner that ensures
14		that the condition is not violated or circumvented through any
15		contrivance of any kind.
16		(f) A member's election under this Section is not a
17		prohibited election under subdivision (j)(1) of Section 1-119
18		of this Code.
19		(g) No provision of this Section shall be interpreted in a
20		way that would cause the System to cease to be a qualified plan
21		under Section 401(a) of the Internal Revenue Code of 1986.
22		(h) If an election created by this amendatory Act in any
23		other Article of this Code or any change deriving from that
24		election is determined to be unconstitutional or otherwise
25		invalid by a final unappealable decision of an Illinois court
26		or a court of competent jurisdiction, the invalidity of that

HB4045 Engrossed - 166 - LRB100 12674 RPS 26063 b
1		provision shall not in any way affect the validity of this
2		Section or the changes deriving from the election required
3		under this Section.
4		(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
5		(Text of Section WITHOUT the changes made by P.A. 98-599,
6		which has been held unconstitutional)
7		Sec. 15-136. Retirement annuities - Amount. The provisions
8		of this Section 15-136 apply only to those participants who are
9		participating in the traditional benefit package or the
10		portable benefit package and do not apply to participants who
11		are participating in the self-managed plan.
12		(a) The amount of a participant's retirement annuity,
13		expressed in the form of a single-life annuity, shall be
14		determined by whichever of the following rules is applicable
15		and provides the largest annuity:
16		Rule 1: The retirement annuity shall be 1.67% of final rate
17		of earnings for each of the first 10 years of service, 1.90%
18		for each of the next 10 years of service, 2.10% for each year
19		of service in excess of 20 but not exceeding 30, and 2.30% for
20		each year in excess of 30; or for persons who retire on or
21		after January 1, 1998, 2.2% of the final rate of earnings for
22		each year of service.
23		Rule 2: The retirement annuity shall be the sum of the
24		following, determined from amounts credited to the participant
25		in accordance with the actuarial tables and the effective rate

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1		of interest in effect at the time the retirement annuity
2		begins:
3		(i) the normal annuity which can be provided on an
4		actuarially equivalent basis, by the accumulated normal
5		contributions as of the date the annuity begins;
6		(ii) an annuity from employer contributions of an
7		amount equal to that which can be provided on an
8		actuarially equivalent basis from the accumulated normal
9		contributions made by the participant under Section
10		15-113.6 and Section 15-113.7 plus 1.4 times all other
11		accumulated normal contributions made by the participant;
12		and
13		(iii) the annuity that can be provided on an
14		actuarially equivalent basis from the entire contribution
15		made by the participant under Section 15-113.3.
16		With respect to a police officer or firefighter who retires
17		on or after August 14, 1998, the accumulated normal
18		contributions taken into account under clauses (i) and (ii) of
19		this Rule 2 shall include the additional normal contributions
20		made by the police officer or firefighter under Section
21		15-157(a).
22		The amount of a retirement annuity calculated under this
23		Rule 2 shall be computed solely on the basis of the
24		participant's accumulated normal contributions, as specified
25		in this Rule and defined in Section 15-116. Neither an employee
26		or employer contribution for early retirement under Section

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1		15-136.2 nor any other employer contribution shall be used in
2		the calculation of the amount of a retirement annuity under
3		this Rule 2.
4		This amendatory Act of the 91st General Assembly is a
5		clarification of existing law and applies to every participant
6		and annuitant without regard to whether status as an employee
7		terminates before the effective date of this amendatory Act.
8		This Rule 2 does not apply to a person who first becomes an
9		employee under this Article on or after July 1, 2005.
10		Rule 3: The retirement annuity of a participant who is
11		employed at least one-half time during the period on which his
12		or her final rate of earnings is based, shall be equal to the
13		participant's years of service not to exceed 30, multiplied by
14		(1) $96 if the participant's final rate of earnings is less
15		than $3,500, (2) $108 if the final rate of earnings is at least
16		$3,500 but less than $4,500, (3) $120 if the final rate of
17		earnings is at least $4,500 but less than $5,500, (4) $132 if
18		the final rate of earnings is at least $5,500 but less than
19		$6,500, (5) $144 if the final rate of earnings is at least
20		$6,500 but less than $7,500, (6) $156 if the final rate of
21		earnings is at least $7,500 but less than $8,500, (7) $168 if
22		the final rate of earnings is at least $8,500 but less than
23		$9,500, and (8) $180 if the final rate of earnings is $9,500 or
24		more, except that the annuity for those persons having made an
25		election under Section 15-154(a-1) shall be calculated and
26		payable under the portable retirement benefit program pursuant

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1		to the provisions of Section 15-136.4.
2		Rule 4: A participant who is at least age 50 and has 25 or
3		more years of service as a police officer or firefighter, and a
4		participant who is age 55 or over and has at least 20 but less
5		than 25 years of service as a police officer or firefighter,
6		shall be entitled to a retirement annuity of 2 1/4% of the
7		final rate of earnings for each of the first 10 years of
8		service as a police officer or firefighter, 2 1/2% for each of
9		the next 10 years of service as a police officer or
10		firefighter, and 2 3/4% for each year of service as a police
11		officer or firefighter in excess of 20. The retirement annuity
12		for all other service shall be computed under Rule 1. A Tier 2
13		member is eligible for a retirement annuity calculated under
14		Rule 4 only if that Tier 2 member meets the service
15		requirements for that benefit calculation as prescribed under
16		this Rule 4 in addition to the applicable age requirement under
17		subsection (a-5) of Section 15-135.
18		For purposes of this Rule 4, a participant's service as a
19		firefighter shall also include the following:
20		(i) service that is performed while the person is an
21		employee under subsection (h) of Section 15-107; and
22		(ii) in the case of an individual who was a
23		participating employee employed in the fire department of
24		the University of Illinois's Champaign-Urbana campus
25		immediately prior to the elimination of that fire
26		department and who immediately after the elimination of

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1		that fire department transferred to another job with the
2		University of Illinois, service performed as an employee of
3		the University of Illinois in a position other than police
4		officer or firefighter, from the date of that transfer
5		until the employee's next termination of service with the
6		University of Illinois.
7		(b) For a Tier 1 member, the retirement annuity provided
8		under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
9		month the participant is under age 60 at the time of
10		retirement. However, this reduction shall not apply in the
11		following cases:
12		(1) For a disabled participant whose disability
13		benefits have been discontinued because he or she has
14		exhausted eligibility for disability benefits under clause
15		(6) of Section 15-152;
16		(2) For a participant who has at least the number of
17		years of service required to retire at any age under
18		subsection (a) of Section 15-135; or
19		(3) For that portion of a retirement annuity which has
20		been provided on account of service of the participant
21		during periods when he or she performed the duties of a
22		police officer or firefighter, if these duties were
23		performed for at least 5 years immediately preceding the
24		date the retirement annuity is to begin.
25		(b-5) The retirement annuity of a Tier 2 member who is
26		retiring after attaining age 62 with at least 10 years of

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1		service credit shall be reduced by 1/2 of 1% for each full
2		month that the member's age is under age 67.
3		(c) The maximum retirement annuity provided under Rules 1,
4		2, 4, and 5 shall be the lesser of (1) the annual limit of
5		benefits as specified in Section 415 of the Internal Revenue
6		Code of 1986, as such Section may be amended from time to time
7		and as such benefit limits shall be adjusted by the
8		Commissioner of Internal Revenue, and (2) 80% of final rate of
9		earnings.
10		(d) Subject to the provisions of subsection (d-1), a A Tier
11		1 member whose status as an employee terminates after August
12		14, 1969 shall receive automatic increases in his or her
13		retirement annuity as follows:
14		Effective January 1 immediately following the date the
15		retirement annuity begins, the annuitant shall receive an
16		increase in his or her monthly retirement annuity of 0.125% of
17		the monthly retirement annuity provided under Rule 1, Rule 2,
18		Rule 3, or Rule 4 contained in this Section, multiplied by the
19		number of full months which elapsed from the date the
20		retirement annuity payments began to January 1, 1972, plus
21		0.1667% of such annuity, multiplied by the number of full
22		months which elapsed from January 1, 1972, or the date the
23		retirement annuity payments began, whichever is later, to
24		January 1, 1978, plus 0.25% of such annuity multiplied by the
25		number of full months which elapsed from January 1, 1978, or
26		the date the retirement annuity payments began, whichever is

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1		later, to the effective date of the increase.
2		The annuitant shall receive an increase in his or her
3		monthly retirement annuity on each January 1 thereafter during
4		the annuitant's life of 3% of the monthly annuity provided
5		under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
6		Section. The change made under this subsection by P.A. 81-970
7		is effective January 1, 1980 and applies to each annuitant
8		whose status as an employee terminates before or after that
9		date.
10		Beginning January 1, 1990, and except as provided in
11		subsection (d-1), all automatic annual increases payable under
12		this Section shall be calculated as a percentage of the total
13		annuity payable at the time of the increase, including all
14		increases previously granted under this Article.
15		The change made in this subsection by P.A. 85-1008 is
16		effective January 26, 1988, and is applicable without regard to
17		whether status as an employee terminated before that date.
18		(d-1) Notwithstanding any other provision of this Article,
19		for a Tier 1 employee who made the election under paragraph (1)
20		of subsection (a) of Section 15-132.9:
21		(1) The initial increase in retirement annuity under
22		this Section shall occur on the January 1 occurring either
23		on or after the attainment of age 67 or the fifth
24		anniversary of the annuity start date, whichever is
25		earlier.
26		(2) The amount of each automatic annual increase in

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1		retirement annuity or survivor annuity occurring on or
2		after the effective date of that election shall be
3		calculated as a percentage of the originally granted
4		retirement annuity or survivor annuity, equal to 3% or
5		one-half the annual unadjusted percentage increase (but
6		not less than zero) in the consumer price index-u for the
7		12 months ending with the September preceding each November
8		1, whichever is less. If the annual unadjusted percentage
9		change in the consumer price index-u for the 12 months
10		ending with the September preceding each November 1 is zero
11		or there is a decrease, then the annuity shall not be
12		increased.
13		For the purposes of this Section, "consumer price index-u"
14		means the index published by the Bureau of Labor Statistics of
15		the United States Department of Labor that measures the average
16		change in prices of goods and services purchased by all urban
17		consumers, United States city average, all items, 1982-84 =
18		100. The new amount resulting from each annual adjustment shall
19		be determined by the Public Pension Division of the Department
20		of Insurance and made available to the board of the retirement
21		system by November 1 of each year.
22		(d-5) A retirement annuity of a Tier 2 member shall receive
23		annual increases on the January 1 occurring either on or after
24		the attainment of age 67 or the first anniversary of the
25		annuity start date, whichever is later. Each annual increase
26		shall be calculated at 3% or one half the annual unadjusted

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1		percentage increase (but not less than zero) in the consumer
2		price index-u for the 12 months ending with the September
3		preceding each November 1, whichever is less, of the originally
4		granted retirement annuity. If the annual unadjusted
5		percentage change in the consumer price index-u for the 12
6		months ending with the September preceding each November 1 is
7		zero or there is a decrease, then the annuity shall not be
8		increased.
9		(e) If, on January 1, 1987, or the date the retirement
10		annuity payment period begins, whichever is later, the sum of
11		the retirement annuity provided under Rule 1 or Rule 2 of this
12		Section and the automatic annual increases provided under the
13		preceding subsection or Section 15-136.1, amounts to less than
14		the retirement annuity which would be provided by Rule 3, the
15		retirement annuity shall be increased as of January 1, 1987, or
16		the date the retirement annuity payment period begins,
17		whichever is later, to the amount which would be provided by
18		Rule 3 of this Section. Such increased amount shall be
19		considered as the retirement annuity in determining benefits
20		provided under other Sections of this Article. This paragraph
21		applies without regard to whether status as an employee
22		terminated before the effective date of this amendatory Act of
23		1987, provided that the annuitant was employed at least
24		one-half time during the period on which the final rate of
25		earnings was based.
26		(f) A participant is entitled to such additional annuity as

HB4045 Engrossed - 175 - LRB100 12674 RPS 26063 b
1		may be provided on an actuarially equivalent basis, by any
2		accumulated additional contributions to his or her credit.
3		However, the additional contributions made by the participant
4		toward the automatic increases in annuity provided under this
5		Section shall not be taken into account in determining the
6		amount of such additional annuity.
7		(g) If, (1) by law, a function of a governmental unit, as
8		defined by Section 20-107 of this Code, is transferred in whole
9		or in part to an employer, and (2) a participant transfers
10		employment from such governmental unit to such employer within
11		6 months after the transfer of the function, and (3) the sum of
12		(A) the annuity payable to the participant under Rule 1, 2, or
13		3 of this Section (B) all proportional annuities payable to the
14		participant by all other retirement systems covered by Article
15		20, and (C) the initial primary insurance amount to which the
16		participant is entitled under the Social Security Act, is less
17		than the retirement annuity which would have been payable if
18		all of the participant's pension credits validated under
19		Section 20-109 had been validated under this system, a
20		supplemental annuity equal to the difference in such amounts
21		shall be payable to the participant.
22		(h) On January 1, 1981, an annuitant who was receiving a
23		retirement annuity on or before January 1, 1971 shall have his
24		or her retirement annuity then being paid increased $1 per
25		month for each year of creditable service. On January 1, 1982,
26		an annuitant whose retirement annuity began on or before

HB4045 Engrossed - 176 - LRB100 12674 RPS 26063 b
1		January 1, 1977, shall have his or her retirement annuity then
2		being paid increased $1 per month for each year of creditable
3		service.
4		(i) On January 1, 1987, any annuitant whose retirement
5		annuity began on or before January 1, 1977, shall have the
6		monthly retirement annuity increased by an amount equal to 8¢
7		per year of creditable service times the number of years that
8		have elapsed since the annuity began.
9		(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
10		98-92, eff. 7-16-13.)
11		(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
12		Sec. 15-155. Employer contributions.
13		(a) The State of Illinois shall make contributions by
14		appropriations of amounts which, together with the other
15		employer contributions from trust, federal, and other funds,
16		employee contributions, income from investments, and other
17		income of this System, will be sufficient to meet the cost of
18		maintaining and administering the System on a 90% funded basis
19		in accordance with actuarial recommendations.
20		The Board shall determine the amount of State contributions
21		required for each fiscal year on the basis of the actuarial
22		tables and other assumptions adopted by the Board and the
23		recommendations of the actuary, using the formula in subsection
24		(a-1).
25		(a-1) For State fiscal years 2018 through 2045 (except as

HB4045 Engrossed - 177 - LRB100 12674 RPS 26063 b
1		otherwise provided for fiscal year 2019), the minimum
2		contribution to the System to be made by the State for each
3		fiscal year shall be an amount determined by the System to be
4		sufficient to bring the total assets of the System up to 90% of
5		the total actuarial liabilities of the System by the end of
6		State fiscal year 2045. In making these determinations, the
7		required State contribution shall be calculated each year as a
8		level percentage of total payroll, including payroll that is
9		not deemed pensionable, but excluding payroll attributable to
10		participants in the defined contribution plan under Section
11		15-200.1, over the years remaining to and including fiscal year
12		2045 and shall be determined under the projected unit credit
13		actuarial cost method.
14		For State fiscal year 2019:
15		(1) The initial calculation and certification shall be
16		based on the amount determined above.
17		(2) For purposes of the recertification due on or
18		before May 1, 2018, the recalculation of the required State
19		contribution for fiscal year 2019 shall take into account
20		the effect on the System's liabilities of the elections
21		made under Section 15-132.9.
22		(3) For purposes of the recertification due on or
23		before October 1, 2018, the total required State
24		contribution for fiscal year 2019 shall be reduced by the
25		amount of the consideration payments made to Tier 1
26		employees who made the election under paragraph (1) of

HB4045 Engrossed - 178 - LRB100 12674 RPS 26063 b
1		subsection (a) of Section 15-132.9.
2		Beginning in State fiscal year 2018, any increase or
3		decrease in State contribution over the prior fiscal year due
4		exclusively to changes in actuarial or investment assumptions
5		adopted by the Board shall be included in the State
6		contribution to the System, as a percentage of the applicable
7		employee payroll, and shall be increased in equal annual
8		increments so that by the State fiscal year occurring 5 years
9		after the adoption of the actuarial or investment assumptions,
10		the State is contributing at the rate otherwise required under
11		this Section.
12		For State fiscal years 2012 through 2017 2045, the minimum
13		contribution to the System to be made by the State for each
14		fiscal year shall be an amount determined by the System to be
15		sufficient to bring the total assets of the System up to 90% of
16		the total actuarial liabilities of the System by the end of
17		State fiscal year 2045. In making these determinations, the
18		required State contribution shall be calculated each year as a
19		level percentage of payroll over the years remaining to and
20		including fiscal year 2045 and shall be determined under the
21		projected unit credit actuarial cost method.
22		For State fiscal years 1996 through 2005, the State
23		contribution to the System, as a percentage of the applicable
24		employee payroll, shall be increased in equal annual increments
25		so that by State fiscal year 2011, the State is contributing at
26		the rate required under this Section.

HB4045 Engrossed - 179 - LRB100 12674 RPS 26063 b
1		Notwithstanding any other provision of this Article, the
2		total required State contribution for State fiscal year 2006 is
3		$166,641,900.
4		Notwithstanding any other provision of this Article, the
5		total required State contribution for State fiscal year 2007 is
6		$252,064,100.
7		For each of State fiscal years 2008 through 2009, the State
8		contribution to the System, as a percentage of the applicable
9		employee payroll, shall be increased in equal annual increments
10		from the required State contribution for State fiscal year
11		2007, so that by State fiscal year 2011, the State is
12		contributing at the rate otherwise required under this Section.
13		Notwithstanding any other provision of this Article, the
14		total required State contribution for State fiscal year 2010 is
15		$702,514,000 and shall be made from the State Pensions Fund and
16		proceeds of bonds sold in fiscal year 2010 pursuant to Section
17		7.2 of the General Obligation Bond Act, less (i) the pro rata
18		share of bond sale expenses determined by the System's share of
19		total bond proceeds, (ii) any amounts received from the General
20		Revenue Fund in fiscal year 2010, (iii) any reduction in bond
21		proceeds due to the issuance of discounted bonds, if
22		applicable.
23		Notwithstanding any other provision of this Article, the
24		total required State contribution for State fiscal year 2011 is
25		the amount recertified by the System on or before April 1, 2011
26		pursuant to Section 15-165 and shall be made from the State

HB4045 Engrossed - 180 - LRB100 12674 RPS 26063 b
1		Pensions Fund and proceeds of bonds sold in fiscal year 2011
2		pursuant to Section 7.2 of the General Obligation Bond Act,
3		less (i) the pro rata share of bond sale expenses determined by
4		the System's share of total bond proceeds, (ii) any amounts
5		received from the General Revenue Fund in fiscal year 2011, and
6		(iii) any reduction in bond proceeds due to the issuance of
7		discounted bonds, if applicable.
8		Beginning in State fiscal year 2046, the minimum State
9		contribution for each fiscal year shall be the amount needed to
10		maintain the total assets of the System at 90% of the total
11		actuarial liabilities of the System.
12		Amounts received by the System pursuant to Section 25 of
13		the Budget Stabilization Act or Section 8.12 of the State
14		Finance Act in any fiscal year do not reduce and do not
15		constitute payment of any portion of the minimum State
16		contribution required under this Article in that fiscal year.
17		Such amounts shall not reduce, and shall not be included in the
18		calculation of, the required State contributions under this
19		Article in any future year until the System has reached a
20		funding ratio of at least 90%. A reference in this Article to
21		the "required State contribution" or any substantially similar
22		term does not include or apply to any amounts payable to the
23		System under Section 25 of the Budget Stabilization Act.
24		Notwithstanding any other provision of this Section, the
25		required State contribution for State fiscal year 2005 and for
26		fiscal year 2008 and each fiscal year thereafter, as calculated

HB4045 Engrossed - 181 - LRB100 12674 RPS 26063 b
1		under this Section and certified under Section 15-165, shall
2		not exceed an amount equal to (i) the amount of the required
3		State contribution that would have been calculated under this
4		Section for that fiscal year if the System had not received any
5		payments under subsection (d) of Section 7.2 of the General
6		Obligation Bond Act, minus (ii) the portion of the State's
7		total debt service payments for that fiscal year on the bonds
8		issued in fiscal year 2003 for the purposes of that Section
9		7.2, as determined and certified by the Comptroller, that is
10		the same as the System's portion of the total moneys
11		distributed under subsection (d) of Section 7.2 of the General
12		Obligation Bond Act. In determining this maximum for State
13		fiscal years 2008 through 2010, however, the amount referred to
14		in item (i) shall be increased, as a percentage of the
15		applicable employee payroll, in equal increments calculated
16		from the sum of the required State contribution for State
17		fiscal year 2007 plus the applicable portion of the State's
18		total debt service payments for fiscal year 2007 on the bonds
19		issued in fiscal year 2003 for the purposes of Section 7.2 of
20		the General Obligation Bond Act, so that, by State fiscal year
21		2011, the State is contributing at the rate otherwise required
22		under this Section.
23		(a-2) For employees first hired on or after 6 months after
24		the effective date of this amendatory Act of the 100th General
25		Assembly who have elected the benefits under Section 1-161 of
26		this Code, the employer shall annually contribute an amount,

HB4045 Engrossed - 182 - LRB100 12674 RPS 26063 b
1		expressed as a percentage of payroll, equal to the defined
2		benefit normal cost of the defined benefit plan, less the
3		employee contribution, plus 2%. On an annual basis, the System
4		shall certify to each employer the amount of unfunded liability
5		accrued in the employer's account to be paid by the employer so
6		that the System is 90% funded by the end of State fiscal year
7		2045. The contributions shall be divided equally over a
8		12-month period and made monthly. The employer shall also
9		contribute an amount equal to the employer defined
10		contribution, as set on an individual employee basis, under
11		paragraph (2) of subsection (k) of Section 1-161 during each
12		pay period. The System shall have the authority to adopt rules
13		regarding implementation of employer contributions.
14		(b) If an employee is paid from trust or federal funds, the
15		employer shall pay to the Board contributions from those funds
16		which are sufficient to cover the accruing normal costs on
17		behalf of the employee. However, universities having employees
18		who are compensated out of local auxiliary funds, income funds,
19		or service enterprise funds are not required to pay such
20		contributions on behalf of those employees. The local auxiliary
21		funds, income funds, and service enterprise funds of
22		universities shall not be considered trust funds for the
23		purpose of this Article, but funds of alumni associations,
24		foundations, and athletic associations which are affiliated
25		with the universities included as employers under this Article
26		and other employers which do not receive State appropriations

HB4045 Engrossed - 183 - LRB100 12674 RPS 26063 b
1		are considered to be trust funds for the purpose of this
2		Article.
3		(b-1) The City of Urbana and the City of Champaign shall
4		each make employer contributions to this System for their
5		respective firefighter employees who participate in this
6		System pursuant to subsection (h) of Section 15-107. The rate
7		of contributions to be made by those municipalities shall be
8		determined annually by the Board on the basis of the actuarial
9		assumptions adopted by the Board and the recommendations of the
10		actuary, and shall be expressed as a percentage of salary for
11		each such employee. The Board shall certify the rate to the
12		affected municipalities as soon as may be practical. The
13		employer contributions required under this subsection shall be
14		remitted by the municipality to the System at the same time and
15		in the same manner as employee contributions.
16		(c) Through State fiscal year 1995: The total employer
17		contribution shall be apportioned among the various funds of
18		the State and other employers, whether trust, federal, or other
19		funds, in accordance with actuarial procedures approved by the
20		Board. State of Illinois contributions for employers receiving
21		State appropriations for personal services shall be payable
22		from appropriations made to the employers or to the System. The
23		contributions for Class I community colleges covering earnings
24		other than those paid from trust and federal funds, shall be
25		payable solely from appropriations to the Illinois Community
26		College Board or the System for employer contributions.

HB4045 Engrossed - 184 - LRB100 12674 RPS 26063 b
1		(d) Beginning in State fiscal year 1996, the required State
2		contributions to the System shall be appropriated directly to
3		the System and shall be payable through vouchers issued in
4		accordance with subsection (c) of Section 15-165, except as
5		provided in subsection (g).
6		(e) The State Comptroller shall draw warrants payable to
7		the System upon proper certification by the System or by the
8		employer in accordance with the appropriation laws and this
9		Code.
10		(f) Normal costs under this Section means liability for
11		pensions and other benefits which accrues to the System because
12		of the credits earned for service rendered by the participants
13		during the fiscal year and expenses of administering the
14		System, but shall not include the principal of or any
15		redemption premium or interest on any bonds issued by the Board
16		or any expenses incurred or deposits required in connection
17		therewith.
18		(g) For academic years beginning on or after June 1, 2005
19		and before July 1, 2018, if If the amount of a participant's
20		earnings for any academic year used to determine the final rate
21		of earnings, determined on a full-time equivalent basis,
22		exceeds the amount of his or her earnings with the same
23		employer for the previous academic year, determined on a
24		full-time equivalent basis, by more than 6%, the participant's
25		employer shall pay to the System, in addition to all other
26		payments required under this Section and in accordance with

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1		guidelines established by the System, the present value of the
2		increase in benefits resulting from the portion of the increase
3		in earnings that is in excess of 6%. This present value shall
4		be computed by the System on the basis of the actuarial
5		assumptions and tables used in the most recent actuarial
6		valuation of the System that is available at the time of the
7		computation. The System may require the employer to provide any
8		pertinent information or documentation.
9		Whenever it determines that a payment is or may be required
10		under this subsection (g), the System shall calculate the
11		amount of the payment and bill the employer for that amount.
12		The bill shall specify the calculations used to determine the
13		amount due. If the employer disputes the amount of the bill, it
14		may, within 30 days after receipt of the bill, apply to the
15		System in writing for a recalculation. The application must
16		specify in detail the grounds of the dispute and, if the
17		employer asserts that the calculation is subject to subsection
18		(h) or (i) of this Section, must include an affidavit setting
19		forth and attesting to all facts within the employer's
20		knowledge that are pertinent to the applicability of subsection
21		(h) or (i). Upon receiving a timely application for
22		recalculation, the System shall review the application and, if
23		appropriate, recalculate the amount due.
24		The employer contributions required under this subsection
25		(g) may be paid in the form of a lump sum within 90 days after
26		receipt of the bill. If the employer contributions are not paid

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1		within 90 days after receipt of the bill, then interest will be
2		charged at a rate equal to the System's annual actuarially
3		assumed rate of return on investment compounded annually from
4		the 91st day after receipt of the bill. Payments must be
5		concluded within 3 years after the employer's receipt of the
6		bill.
7		When assessing payment for any amount due under this
8		subsection (g), the System shall include earnings, to the
9		extent not established by a participant under Section 15-113.11
10		or 15-113.12, that would have been paid to the participant had
11		the participant not taken (i) periods of voluntary or
12		involuntary furlough occurring on or after July 1, 2015 and on
13		or before June 30, 2017 or (ii) periods of voluntary pay
14		reduction in lieu of furlough occurring on or after July 1,
15		2015 and on or before June 30, 2017. Determining earnings that
16		would have been paid to a participant had the participant not
17		taken periods of voluntary or involuntary furlough or periods
18		of voluntary pay reduction shall be the responsibility of the
19		employer, and shall be reported in a manner prescribed by the
20		System.
21		(g-1) For academic years beginning on or after July 1,
22		2018, if the amount of a participant's earnings for any
23		academic year used to determine the final rate of earnings,
24		determined on a full-time equivalent basis, exceeds the amount
25		of his or her earnings with the same employer for the previous
26		academic year, determined on a full-time equivalent basis, by

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1		more than the unadjusted percentage increase in the consumer
2		price index-u for the calendar year immediately preceding the
3		beginning of the academic year, published by the Public Pension
4		Division of the Department of Insurance by November 1 of each
5		year, then the participant's employer shall pay to the System,
6		in addition to all other payments required under this Section
7		and in accordance with guidelines established by the System,
8		the present value of the increase in benefits resulting from
9		the portion of the increase in earnings that is in excess of
10		the unadjusted percentage increase in the consumer price
11		index-u for the applicable calendar year. This present value
12		shall be computed by the System on the basis of the actuarial
13		assumptions and tables used in the most recent actuarial
14		valuation of the System that is available at the time of the
15		computation. The System may require the employer to provide any
16		pertinent information or documentation.
17		Whenever it determines that a payment is or may be required
18		under this subsection (g-1), the System shall calculate the
19		amount of the payment and bill the employer for that amount.
20		The bill shall specify the calculations used to determine the
21		amount due. If the employer disputes the amount of the bill, it
22		may, within 30 days after receipt of the bill, apply to the
23		System in writing for a recalculation. The application must
24		specify in detail the grounds of the dispute and, if the
25		employer asserts that the calculation is subject to subsection
26		(i-1) of this Section, must include an affidavit setting forth

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1		and attesting to all facts within the employer's knowledge that
2		are pertinent to the applicability of subsection (i-1). Upon
3		receiving a timely application for recalculation, the System
4		shall review the application and, if appropriate, recalculate
5		the amount due.
6		The employer contributions required under this subsection
7		(g-1) may be paid in the form of a lump sum within 90 days after
8		receipt of the bill. If the employer contributions are not paid
9		within 90 days after receipt of the bill, then interest shall
10		be charged at a rate equal to the System's annual actuarially
11		assumed rate of return on investment compounded annually from
12		the 91st day after receipt of the bill. Payments must be
13		concluded within 3 years after the employer's receipt of the
14		bill.
15		For the purposes of this Section, "consumer price index-u"
16		means the index published by the Bureau of Labor Statistics of
17		the United States Department of Labor that measures the average
18		change in prices of goods and services purchased by all urban
19		consumers, United States city average, all items, 1982-84 =
20		100. The new amount resulting from each annual adjustment shall
21		be determined by the Public Pension Division of the Department
22		of Insurance and made available to the boards of the retirement
23		systems and pension funds by November 1 of each year.
24		(h) This subsection (h) applies only to payments made or
25		salary increases given on or after June 1, 2005 but before July
26		1, 2011. The changes made by Public Act 94-1057 shall not

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1		require the System to refund any payments received before July
2		31, 2006 (the effective date of Public Act 94-1057).
3		When assessing payment for any amount due under subsection
4		(g), the System shall exclude earnings increases paid to
5		participants under contracts or collective bargaining
6		agreements entered into, amended, or renewed before June 1,
7		2005.
8		When assessing payment for any amount due under subsection
9		(g), the System shall exclude earnings increases paid to a
10		participant at a time when the participant is 10 or more years
11		from retirement eligibility under Section 15-135.
12		When assessing payment for any amount due under subsection
13		(g), the System shall exclude earnings increases resulting from
14		overload work, including a contract for summer teaching, or
15		overtime when the employer has certified to the System, and the
16		System has approved the certification, that: (i) in the case of
17		overloads (A) the overload work is for the sole purpose of
18		academic instruction in excess of the standard number of
19		instruction hours for a full-time employee occurring during the
20		academic year that the overload is paid and (B) the earnings
21		increases are equal to or less than the rate of pay for
22		academic instruction computed using the participant's current
23		salary rate and work schedule; and (ii) in the case of
24		overtime, the overtime was necessary for the educational
25		mission.
26		When assessing payment for any amount due under subsection

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1		(g), the System shall exclude any earnings increase resulting
2		from (i) a promotion for which the employee moves from one
3		classification to a higher classification under the State
4		Universities Civil Service System, (ii) a promotion in academic
5		rank for a tenured or tenure-track faculty position, or (iii) a
6		promotion that the Illinois Community College Board has
7		recommended in accordance with subsection (k) of this Section.
8		These earnings increases shall be excluded only if the
9		promotion is to a position that has existed and been filled by
10		a member for no less than one complete academic year and the
11		earnings increase as a result of the promotion is an increase
12		that results in an amount no greater than the average salary
13		paid for other similar positions.
14		(i) When assessing payment for any amount due under
15		subsection (g), the System shall exclude any salary increase
16		described in subsection (h) of this Section given on or after
17		July 1, 2011 but before July 1, 2014 under a contract or
18		collective bargaining agreement entered into, amended, or
19		renewed on or after June 1, 2005 but before July 1, 2011.
20		Notwithstanding any other provision of this Section, any
21		payments made or salary increases given after June 30, 2014
22		shall be used in assessing payment for any amount due under
23		subsection (g) of this Section.
24		(i-1) When assessing payment for any amount due under
25		subsection (g-1), the System shall exclude salary increases
26		paid to participants under contracts or collective bargaining

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1		agreements entered into, amended, or renewed before the
2		effective date of this amendatory Act of the 100th General
3		Assembly.
4		(j) The System shall prepare a report and file copies of
5		the report with the Governor and the General Assembly by
6		January 1, 2007 that contains all of the following information:
7		(1) The number of recalculations required by the
8		changes made to this Section by Public Act 94-1057 for each
9		employer.
10		(2) The dollar amount by which each employer's
11		contribution to the System was changed due to
12		recalculations required by Public Act 94-1057.
13		(3) The total amount the System received from each
14		employer as a result of the changes made to this Section by
15		Public Act 94-4.
16		(4) The increase in the required State contribution
17		resulting from the changes made to this Section by Public
18		Act 94-1057.
19		(j-5) For academic years beginning on or after July 1,
20		2018, if the amount of a participant's earnings for any
21		academic year, determined on a full-time equivalent basis,
22		exceeds $140,000, the participant's employer shall pay to the
23		System, in addition to all other payments required under this
24		Section and in accordance with guidelines established by the
25		System, the amount of the earnings that exceed $140,000
26		multiplied by the level percentage of payroll used in that

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1		fiscal year, as determined by the System, to be sufficient to
2		bring the total assets of the System up to 90% of the total
3		actuarial liabilities of the System by the end of State fiscal
4		year 2045. This amount shall be computed by the System on the
5		basis of the actuarial assumptions and tables used in the most
6		recent actuarial valuation of the System that is available at
7		the time of the computation. The System may require the
8		employer to provide any pertinent information or
9		documentation.
10		Whenever it determines that a payment is or may be required
11		under this subsection, the System shall calculate the amount of
12		the payment and bill the employer for that amount. The bill
13		shall specify the calculations used to determine the amount
14		due. If the employer disputes the amount of the bill, it may,
15		within 30 days after receipt of the bill, apply to the System
16		in writing for a recalculation. The application must specify in
17		detail the grounds of the dispute. Upon receiving a timely
18		application for recalculation, the System shall review the
19		application and, if appropriate, recalculate the amount due.
20		The employer contributions required under this subsection
21		may be paid in the form of a lump sum within 90 days after
22		receipt of the bill. If the employer contributions are not paid
23		within 90 days after receipt of the bill, then interest will be
24		charged at a rate equal to the System's annual actuarially
25		assumed rate of return on investment compounded annually from
26		the 91st day after receipt of the bill. Payments must be

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1		concluded within 3 years after the employer's receipt of the
2		bill.
3		(k) The Illinois Community College Board shall adopt rules
4		for recommending lists of promotional positions submitted to
5		the Board by community colleges and for reviewing the
6		promotional lists on an annual basis. When recommending
7		promotional lists, the Board shall consider the similarity of
8		the positions submitted to those positions recognized for State
9		universities by the State Universities Civil Service System.
10		The Illinois Community College Board shall file a copy of its
11		findings with the System. The System shall consider the
12		findings of the Illinois Community College Board when making
13		determinations under this Section. The System shall not exclude
14		any earnings increases resulting from a promotion when the
15		promotion was not submitted by a community college. Nothing in
16		this subsection (k) shall require any community college to
17		submit any information to the Community College Board.
18		(l) For purposes of determining the required State
19		contribution to the System, the value of the System's assets
20		shall be equal to the actuarial value of the System's assets,
21		which shall be calculated as follows:
22		As of June 30, 2008, the actuarial value of the System's
23		assets shall be equal to the market value of the assets as of
24		that date. In determining the actuarial value of the System's
25		assets for fiscal years after June 30, 2008, any actuarial
26		gains or losses from investment return incurred in a fiscal

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1		year shall be recognized in equal annual amounts over the
2		5-year period following that fiscal year.
3		(m) For purposes of determining the required State
4		contribution to the system for a particular year, the actuarial
5		value of assets shall be assumed to earn a rate of return equal
6		to the system's actuarially assumed rate of return.
7		(n) If Section 15-132.9 is determined to be
8		unconstitutional or otherwise invalid by a final unappealable
9		decision of an Illinois court or a court of competent
10		jurisdiction, then the changes made to this Section by this
11		amendatory Act of the 100th General Assembly shall not take
12		effect and are repealed by operation of law.
13		(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
14		99-897, eff. 1-1-17.)
15		(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
16		Sec. 15-157. Employee Contributions.
17		(a) Each participating employee shall make contributions
18		towards the retirement benefits payable under the retirement
19		program applicable to the employee from each payment of
20		earnings applicable to employment under this system on and
21		after the date of becoming a participant as follows: Prior to
22		September 1, 1949, 3 1/2% of earnings; from September 1, 1949
23		to August 31, 1955, 5%; from September 1, 1955 to August 31,
24		1969, 6%; from September 1, 1969, 6 1/2%. These contributions
25		are to be considered as normal contributions for purposes of

HB4045 Engrossed - 195 - LRB100 12674 RPS 26063 b
1		this Article.
2		Each participant who is a police officer or firefighter
3		shall make normal contributions of 8% of each payment of
4		earnings applicable to employment as a police officer or
5		firefighter under this system on or after September 1, 1981,
6		unless he or she files with the board within 60 days after the
7		effective date of this amendatory Act of 1991 or 60 days after
8		the board receives notice that he or she is employed as a
9		police officer or firefighter, whichever is later, a written
10		notice waiving the retirement formula provided by Rule 4 of
11		Section 15-136. This waiver shall be irrevocable. If a
12		participant had met the conditions set forth in Section
13		15-132.1 prior to the effective date of this amendatory Act of
14		1991 but failed to make the additional normal contributions
15		required by this paragraph, he or she may elect to pay the
16		additional contributions plus compound interest at the
17		effective rate. If such payment is received by the board, the
18		service shall be considered as police officer service in
19		calculating the retirement annuity under Rule 4 of Section
20		15-136. While performing service described in clause (i) or
21		(ii) of Rule 4 of Section 15-136, a participating employee
22		shall be deemed to be employed as a firefighter for the purpose
23		of determining the rate of employee contributions under this
24		Section.
25		(b) Starting September 1, 1969, each participating
26		employee shall make additional contributions of 1/2 of 1% of

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1		earnings to finance a portion of the cost of the annual
2		increases in retirement annuity provided under Section 15-136,
3		except that with respect to participants in the self-managed
4		plan this additional contribution shall be used to finance the
5		benefits obtained under that retirement program. Beginning
6		July 1, 2018 or the effective date of the Tier 1 employee's
7		election under paragraph (1) of subsection (a) of Section
8		15-132.9, whichever is later, each Tier 1 employee who made the
9		election under paragraph (1) of subsection (a) of Section
10		15-132.9 is no longer required to make contributions under this
11		subsection.
12		(c) Except as provided in subsection (c-5), in In addition
13		to the amounts described in subsections (a) and (b) of this
14		Section, each participating employee shall make contributions
15		of 1% of earnings applicable under this system on and after
16		August 1, 1959. The contributions made under this subsection
17		(c) shall be considered as survivor's insurance contributions
18		for purposes of this Article if the employee is covered under
19		the traditional benefit package, and such contributions shall
20		be considered as additional contributions for purposes of this
21		Article if the employee is participating in the self-managed
22		plan or has elected to participate in the portable benefit
23		package and has completed the applicable one-year waiting
24		period. Contributions in excess of $80 during any fiscal year
25		beginning before August 31, 1969 and in excess of $120 during
26		any fiscal year thereafter until September 1, 1971 shall be

HB4045 Engrossed - 197 - LRB100 12674 RPS 26063 b
1		considered as additional contributions for purposes of this
2		Article.
3		(c-5) Beginning July 1, 2018 or the effective date of the
4		Tier 1 employee's election under paragraph (1) of subsection
5		(a) of Section 15-132.9, whichever is later, in lieu of the
6		contributions otherwise required under subsection (c), each
7		Tier 1 employee who made the election under paragraph (1) of
8		subsection (a) of Section 15-132.9 shall make contributions of
9		0.7% of earnings applicable under this System and each Tier 1
10		employee who is a police officer or firefighter who makes
11		normal contributions of 8% of each payment of earnings
12		applicable to employment as a police officer or firefighter
13		under this System and who made the election under paragraph (1)
14		of subsection (a) of Section 15-132.9 shall make contributions
15		of 0.55% of earnings applicable under this System. The
16		contributions made under this subsection (c-5) shall be
17		considered as survivor's insurance contributions for purposes
18		of this Article and such contributions shall be considered as
19		additional contributions for purposes of this Article if the
20		employee has elected to participate in the portable benefit
21		package and has completed the applicable one-year waiting
22		period.
23		(d) If the board by board rule so permits and subject to
24		such conditions and limitations as may be specified in its
25		rules, a participant may make other additional contributions of
26		such percentage of earnings or amounts as the participant shall

HB4045 Engrossed - 198 - LRB100 12674 RPS 26063 b
1		elect in a written notice thereof received by the board.
2		(e) That fraction of a participant's total accumulated
3		normal contributions, the numerator of which is equal to the
4		number of years of service in excess of that which is required
5		to qualify for the maximum retirement annuity, and the
6		denominator of which is equal to the total service of the
7		participant, shall be considered as accumulated additional
8		contributions. The determination of the applicable maximum
9		annuity and the adjustment in contributions required by this
10		provision shall be made as of the date of the participant's
11		retirement.
12		(f) Notwithstanding the foregoing, a participating
13		employee shall not be required to make contributions under this
14		Section after the date upon which continuance of such
15		contributions would otherwise cause his or her retirement
16		annuity to exceed the maximum retirement annuity as specified
17		in clause (1) of subsection (c) of Section 15-136.
18		(g) A participant may make contributions for the purchase
19		of service credit under this Article; however, only a
20		participating employee may make optional contributions under
21		subsection (b) of Section 15-157.1 of this Article.
22		(h) A Tier 2 member shall not make contributions on
23		earnings that exceed the limitation as prescribed under
24		subsection (b) of Section 15-111 of this Article.
25		(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)

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1		(40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
2		(Text of Section WITHOUT the changes made by P.A. 98-599,
3		which has been held unconstitutional)
4		Sec. 15-165. To certify amounts and submit vouchers.
5		(a) The Board shall certify to the Governor on or before
6		November 15 of each year until November 15, 2011 the
7		appropriation required from State funds for the purposes of
8		this System for the following fiscal year. The certification
9		under this subsection (a) shall include a copy of the actuarial
10		recommendations upon which it is based and shall specifically
11		identify the System's projected State normal cost for that
12		fiscal year and the projected State cost for the self-managed
13		plan for that fiscal year.
14		On or before May 1, 2004, the Board shall recalculate and
15		recertify to the Governor the amount of the required State
16		contribution to the System for State fiscal year 2005, taking
17		into account the amounts appropriated to and received by the
18		System under subsection (d) of Section 7.2 of the General
19		Obligation Bond Act.
20		On or before July 1, 2005, the Board shall recalculate and
21		recertify to the Governor the amount of the required State
22		contribution to the System for State fiscal year 2006, taking
23		into account the changes in required State contributions made
24		by this amendatory Act of the 94th General Assembly.
25		On or before April 1, 2011, the Board shall recalculate and
26		recertify to the Governor the amount of the required State

HB4045 Engrossed - 200 - LRB100 12674 RPS 26063 b
1		contribution to the System for State fiscal year 2011, applying
2		the changes made by Public Act 96-889 to the System's assets
3		and liabilities as of June 30, 2009 as though Public Act 96-889
4		was approved on that date.
5		(a-5) On or before November 1 of each year, beginning
6		November 1, 2012, the Board shall submit to the State Actuary,
7		the Governor, and the General Assembly a proposed certification
8		of the amount of the required State contribution to the System
9		for the next fiscal year, along with all of the actuarial
10		assumptions, calculations, and data upon which that proposed
11		certification is based. On or before January 1 of each year,
12		beginning January 1, 2013, the State Actuary shall issue a
13		preliminary report concerning the proposed certification and
14		identifying, if necessary, recommended changes in actuarial
15		assumptions that the Board must consider before finalizing its
16		certification of the required State contributions. On or before
17		January 15, 2013 and each January 15 thereafter, the Board
18		shall certify to the Governor and the General Assembly the
19		amount of the required State contribution for the next fiscal
20		year. The Board's certification must note, in a written
21		response to the State Actuary, any deviations from the State
22		Actuary's recommended changes, the reason or reasons for not
23		following the State Actuary's recommended changes, and the
24		fiscal impact of not following the State Actuary's recommended
25		changes on the required State contribution.
26		On or before May 1, 2018, the Board shall recalculate and

HB4045 Engrossed - 201 - LRB100 12674 RPS 26063 b
1		recertify to the Governor and the General Assembly the amount
2		of the required State contribution to the System for State
3		fiscal year 2019, taking into account the effect on the
4		System's liabilities of the elections made under Section
5		15-132.9.
6		On or before October 1, 2018, the Board shall recalculate
7		and recertify to the Governor and the General Assembly the
8		amount of the required State contribution to the System for
9		State fiscal year 2019, taking into account the reduction
10		specified under item (3) of subsection (a-1) of Section 15-155.
11		(a-10) For purposes of subsection (c-5) of Section 20 of
12		the Budget Stabilization Act, on or before November 1 of each
13		year beginning November 1, 2019, the Board shall determine the
14		amount of the State contribution to the System that would have
15		been required for the next fiscal year if Section 1-161,
16		subsection (a-2) of Section 15-155, and the changes made to
17		Section 1-160 by this amendatory Act of the 100th General
18		Assembly had not taken effect, using the best and most recent
19		available data but based on the law in effect on May 31, 2019.
20		The Board shall submit to the State Actuary, the Governor, and
21		the General Assembly a proposed certification, along with the
22		relevant law, actuarial assumptions, calculations, and data
23		upon which that certification is based. On or before January 1,
24		2020 and every January 1 thereafter, the State Actuary shall
25		issue a preliminary report concerning the proposed
26		certification and identifying, if necessary, recommended

HB4045 Engrossed - 202 - LRB100 12674 RPS 26063 b
1		changes in actuarial assumptions that the Board must consider
2		before finalizing its certification. On or before January 15,
3		2020 and every January 1 thereafter, the Board shall certify to
4		the Governor and the General Assembly the amount of the State
5		contribution to the System that would have been required for
6		the next fiscal year if Section 1-161, subsection (a-2) of
7		Section 15-155, and the changes made to Section 1-160 by this
8		amendatory Act of the 100th General Assembly had not taken
9		effect, using the best and most recent available data but based
10		on the law in effect on May 31, 2019. The Board's certification
11		must note any deviations from the State Actuary's recommended
12		changes, the reason or reasons for not following the State
13		Actuary's recommended changes, and the impact of not following
14		the State Actuary's recommended changes.
15		(a-15) As soon as practical after the effective date of
16		this amendatory Act of the 100th General Assembly, the Board
17		shall recalculate and recertify to the State Actuary, the
18		Governor, and the General Assembly the amount of the State
19		contribution to the System for State fiscal year 2018, taking
20		into account the changes in required State contributions made
21		by this amendatory Act of the 100th General Assembly. The State
22		Actuary shall review the assumptions and valuations underlying
23		the Board's revised certification and issue a preliminary
24		report concerning the proposed recertification and
25		identifying, if necessary, recommended changes in actuarial
26		assumptions that the Board must consider before finalizing its

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1		certification of the required State contributions. The Board's
2		final certification must note any deviations from the State
3		Actuary's recommended changes, the reason or reasons for not
4		following the State Actuary's recommended changes, and the
5		fiscal impact of not following the State Actuary's recommended
6		changes on the required State contribution.
7		(b) The Board shall certify to the State Comptroller or
8		employer, as the case may be, from time to time, by its
9		chairperson and secretary, with its seal attached, the amounts
10		payable to the System from the various funds.
11		(c) Beginning in State fiscal year 1996, on or as soon as
12		possible after the 15th day of each month the Board shall
13		submit vouchers for payment of State contributions to the
14		System, in a total monthly amount of one-twelfth of the
15		required annual State contribution certified under subsection
16		(a). From the effective date of this amendatory Act of the 93rd
17		General Assembly through June 30, 2004, the Board shall not
18		submit vouchers for the remainder of fiscal year 2004 in excess
19		of the fiscal year 2004 certified contribution amount
20		determined under this Section after taking into consideration
21		the transfer to the System under subsection (b) of Section
22		6z-61 of the State Finance Act. These vouchers shall be paid by
23		the State Comptroller and Treasurer by warrants drawn on the
24		funds appropriated to the System for that fiscal year.
25		If in any month the amount remaining unexpended from all
26		other appropriations to the System for the applicable fiscal

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1		year (including the appropriations to the System under Section
2		8.12 of the State Finance Act and Section 1 of the State
3		Pension Funds Continuing Appropriation Act) is less than the
4		amount lawfully vouchered under this Section, the difference
5		shall be paid from the General Revenue Fund under the
6		continuing appropriation authority provided in Section 1.1 of
7		the State Pension Funds Continuing Appropriation Act.
8		(d) So long as the payments received are the full amount
9		lawfully vouchered under this Section, payments received by the
10		System under this Section shall be applied first toward the
11		employer contribution to the self-managed plan established
12		under Section 15-158.2. Payments shall be applied second toward
13		the employer's portion of the normal costs of the System, as
14		defined in subsection (f) of Section 15-155. The balance shall
15		be applied toward the unfunded actuarial liabilities of the
16		System.
17		(e) In the event that the System does not receive, as a
18		result of legislative enactment or otherwise, payments
19		sufficient to fully fund the employer contribution to the
20		self-managed plan established under Section 15-158.2 and to
21		fully fund that portion of the employer's portion of the normal
22		costs of the System, as calculated in accordance with Section
23		15-155(a-1), then any payments received shall be applied
24		proportionately to the optional retirement program established
25		under Section 15-158.2 and to the employer's portion of the
26		normal costs of the System, as calculated in accordance with

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1		Section 15-155(a-1).
2		(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
3		(40 ILCS 5/15-185.5 new)
4		Sec. 15-185.5. Accelerated pension benefit payment.
5		(a) As used in this Section:
6		"Eligible person" means a person who:
7		(1) has terminated service;
8		(2) has accrued sufficient service credit to be
9		eligible to receive a retirement annuity under this
10		Article;
11		(3) has not received any retirement annuity under this
12		Article;
13		(4) does not have a QILDRO in effect against him or her
14		under this Article; and
15		(5) is not a participant in the self-managed plan under
16		Section 15-158.2.
17		"Pension benefit" means the benefits under this Article, or
18		Article 1 as it relates to those benefits, including any
19		anticipated annual increases, that an eligible person is
20		entitled to upon attainment of the applicable retirement age.
21		"Pension benefit" also includes applicable survivor's or
22		disability benefits.
23		(b) Before January 1, 2018, and annually thereafter, the
24		System shall calculate, using actuarial tables and other
25		assumptions adopted by the Board, the net present value of

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1		pension benefits for each eligible person and shall offer each
2		eligible person the opportunity to irrevocably elect to receive
3		an amount determined by the System to be equal to 70% of the
4		net present value of his or her pension benefits in lieu of
5		receiving any pension benefit. The offer shall specify the
6		dollar amount that the eligible person will receive if he or
7		she so elects and shall expire when a subsequent offer is made
8		to an eligible person or when the System determines that 10% of
9		eligible persons in that year have made the election under this
10		subsection, whichever occurs first. The System shall make a
11		good faith effort to contact every eligible person to notify
12		him or her of the election and of the amount of the accelerated
13		pension benefit payment.
14		Until the System determines that 10% of eligible persons in
15		that year have made the election under this subsection, an
16		eligible person may irrevocably elect to receive an accelerated
17		pension benefit payment in the amount that the System offers
18		under this subsection in lieu of receiving any pension benefit.
19		A person who elects to receive an accelerated pension benefit
20		payment under this Section may not elect to proceed under the
21		Retirement Systems Reciprocal Act with respect to service under
22		this Article.
23		(c) A person's credits and creditable service under this
24		Article shall be terminated upon the person's receipt of an
25		accelerated pension benefit payment under this Section, and no
26		other benefit shall be paid under this Article based on those

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1		terminated credits and creditable service, including any
2		retirement, survivor, or other benefit; except that to the
3		extent that participation, benefits, or premiums under the
4		State Employees Group Insurance Act of 1971 are based on the
5		amount of service credit, the terminated service credit shall
6		be used for that purpose.
7		(d) If a person who has received an accelerated pension
8		benefit payment under this Section returns to participating
9		employee status under this Article, then:
10		(1) Any benefits under the System earned as a result of
11		that return to participating employee status shall be based
12		solely on the person's credits and creditable service
13		arising from the return to participating employee status.
14		(2) The accelerated pension benefit payment may not be
15		repaid to the System, and the terminated credits and
16		creditable service may not under any circumstances be
17		reinstated.
18		(e) As a condition of receiving an accelerated pension
19		benefit payment, an eligible person must have another
20		retirement plan or account qualified under the Internal Revenue
21		Code of 1986, as amended, for the accelerated pension benefit
22		payment to be rolled into. The accelerated pension benefit
23		payment under this Section may be subject to withholding or
24		payment of applicable taxes, but to the extent permitted by
25		federal law, a person who receives an accelerated pension
26		benefit payment under this Section must direct the System to

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1		pay all of that payment as a rollover into another retirement
2		plan or account qualified under the Internal Revenue Code of
3		1986, as amended.
4		(f) Before January 1, 2019 and every January 1 thereafter,
5		the Board shall certify to the Illinois Finance Authority and
6		the General Assembly the amount by which the total amount of
7		accelerated pension benefit payments made under this Section
8		exceed the amount appropriated to the System for the purpose of
9		making those payments.
10		(g) The Board shall adopt any rules necessary to implement
11		this Section.
12		(h) No provision of this Section shall be interpreted in a
13		way that would cause the applicable System to cease to be a
14		qualified plan under the Internal Revenue Code of 1986.
15		(i) Notwithstanding any other provision of this Section, in
16		no case shall the total amount of accelerated pension benefit
17		payments paid under this Section, Section 14-147.5, and Section
18		16-190.5 cause the Illinois Finance Authority to issue more
19		than the $250,000,000 of State Pension Obligation Acceleration
20		Bonds authorized in subsection (c-5) of Section 801-40 of the
21		Illinois Finance Authority Act.
22		(40 ILCS 5/15-198)
23		(Text of Section WITHOUT the changes made by P.A. 98-599,
24		which has been held unconstitutional)
25		Sec. 15-198. Application and expiration of new benefit

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1		increases.
2		(a) As used in this Section, "new benefit increase" means
3		an increase in the amount of any benefit provided under this
4		Article, or an expansion of the conditions of eligibility for
5		any benefit under this Article, that results from an amendment
6		to this Code that takes effect after the effective date of this
7		amendatory Act of the 94th General Assembly. "New benefit
8		increase", however, does not include any benefit increase
9		resulting from the changes made to this Article by this
10		amendatory Act of the 100th General Assembly.
11		(b) Notwithstanding any other provision of this Code or any
12		subsequent amendment to this Code, every new benefit increase
13		is subject to this Section and shall be deemed to be granted
14		only in conformance with and contingent upon compliance with
15		the provisions of this Section.
16		(c) The Public Act enacting a new benefit increase must
17		identify and provide for payment to the System of additional
18		funding at least sufficient to fund the resulting annual
19		increase in cost to the System as it accrues.
20		Every new benefit increase is contingent upon the General
21		Assembly providing the additional funding required under this
22		subsection. The Commission on Government Forecasting and
23		Accountability shall analyze whether adequate additional
24		funding has been provided for the new benefit increase and
25		shall report its analysis to the Public Pension Division of the
26		Department of Insurance Financial and Professional Regulation.

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1		A new benefit increase created by a Public Act that does not
2		include the additional funding required under this subsection
3		is null and void. If the Public Pension Division determines
4		that the additional funding provided for a new benefit increase
5		under this subsection is or has become inadequate, it may so
6		certify to the Governor and the State Comptroller and, in the
7		absence of corrective action by the General Assembly, the new
8		benefit increase shall expire at the end of the fiscal year in
9		which the certification is made.
10		(d) Every new benefit increase shall expire 5 years after
11		its effective date or on such earlier date as may be specified
12		in the language enacting the new benefit increase or provided
13		under subsection (c). This does not prevent the General
14		Assembly from extending or re-creating a new benefit increase
15		by law.
16		(e) Except as otherwise provided in the language creating
17		the new benefit increase, a new benefit increase that expires
18		under this Section continues to apply to persons who applied
19		and qualified for the affected benefit while the new benefit
20		increase was in effect and to the affected beneficiaries and
21		alternate payees of such persons, but does not apply to any
22		other person, including without limitation a person who
23		continues in service after the expiration date and did not
24		apply and qualify for the affected benefit while the new
25		benefit increase was in effect.
26		(Source: P.A. 94-4, eff. 6-1-05.)

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1		(40 ILCS 5/15-200.1 new)
2		Sec. 15-200.1. Defined contribution plan.
3		(a) By July 1, 2018, the System shall prepare and implement
4		a voluntary defined contribution plan for up to 5% of eligible
5		Tier 1 employees. The System shall determine the 5% cap by the
6		number of Tier 1 employees on the effective date of this
7		Section. The defined contribution plan developed under this
8		Section shall be a plan that aggregates employer and employee
9		contributions in individual participant accounts which, after
10		meeting any other requirements, are used for payouts after
11		retirement in accordance with this Section and any other
12		applicable laws.
13		As used in this Section, "defined benefit plan" means the
14		retirement plan available under this Article to Tier 1
15		employees who have not made the election authorized under this
16		Section.
17		(1) Under the defined contribution plan, a Tier 1
18		employee of this System could elect to cease accruing
19		benefits in the defined benefit plan under this Article and
20		begin accruing benefits for future service in the defined
21		contribution plan. Service credit under the defined
22		contribution plan may be used for determining retirement
23		eligibility under the defined benefit plan. A Tier 1
24		employee who elects to cease accruing benefits in his or
25		her defined benefit plan shall be prohibited from

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1		purchasing service credit on or after the date of his or
2		her election. A Tier 1 employee making the irrevocable
3		election provided under this Section shall not receive
4		interest accruals to his or her Rule 2 benefit on or after
5		the date of his or her election.
6		(2) Participants in the defined contribution plan
7		shall pay employee contributions at the same rate as other
8		participants under this Article as determined by the
9		System.
10		(3) State contributions shall be paid into the accounts
11		of all participants in the defined contribution plan at a
12		uniform rate, expressed as a percentage of earnings and
13		determined for each year. This rate shall be no higher than
14		the employer's normal cost for Tier 1 employees in the
15		defined benefit plan for that year, as determined by the
16		System and expressed as a percentage of earnings, and shall
17		be no lower than 3% of earnings. The State shall adjust
18		this rate annually.
19		(4) The defined contribution plan shall require 5 years
20		of participation in the defined contribution plan before
21		vesting in State contributions. If the participant fails to
22		vest in them, the State contributions, and the earnings
23		thereon, shall be forfeited.
24		(5) The defined contribution plan may provide for
25		participants in the plan to be eligible for the defined
26		disability benefits available to other participants under

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1		this Article. If it does, the System shall reduce the
2		employee contributions credited to the member's defined
3		contribution plan account by an amount determined by the
4		System to cover the cost of offering such benefits.
5		(6) The defined contribution plan shall provide a
6		variety of options for investments. These options shall
7		include investments handled by the System as well as
8		private sector investment options.
9		(7) The defined contribution plan shall provide a
10		variety of options for payouts to retirees and their
11		survivors.
12		(8) To the extent authorized under federal law and as
13		authorized by the System, the plan shall allow former
14		participants in the plan to transfer or roll over employee
15		and vested State contributions, and the earnings thereon,
16		into other qualified retirement plans.
17		(9) The System shall reduce the employee contributions
18		credited to the member's defined contribution plan account
19		by an amount determined by the System to cover the cost of
20		offering these benefits and any applicable administrative
21		fees.
22		(b) Only persons who are Tier 1 employees of the System on
23		the effective date of this Section are eligible to participate
24		in the defined contribution plan. Participation in the defined
25		contribution plan shall be limited to the first 5% of eligible
26		persons who elect to participate. The election to participate

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1		in the defined contribution plan is voluntary and irrevocable.
2		(c) An eligible Tier 1 employee may irrevocably elect to
3		participate in the defined contribution plan by filing with the
4		System a written application to participate that is received by
5		the System prior to its determination that 5% of eligible
6		persons have elected to participate in the defined contribution
7		plan.
8		When the System first determines that 5% of eligible
9		persons have elected to participate in the defined contribution
10		plan, the System shall provide notice to previously eligible
11		employees that the plan is no longer available and shall cease
12		accepting applications to participate.
13		(d) The System shall make a good faith effort to contact
14		each Tier 1 employee who is eligible to participate in the
15		defined contribution plan. The System shall mail information
16		describing the option to join the defined contribution plan to
17		each of these employees to his or her last known address on
18		file with the System. If the employee is not responsive to
19		other means of contact, it is sufficient for the System to
20		publish the details of the option on its website.
21		Upon request for further information describing the
22		option, the System shall provide employees with information
23		from the System before exercising the option to join the plan,
24		including information on the impact to their vested benefits or
25		non-vested service. The individual consultation shall include
26		projections of the member's defined benefits at retirement or

HB4045 Engrossed - 215 - LRB100 12674 RPS 26063 b
1		earlier termination of service and the value of the member's
2		account at retirement or earlier termination of service. The
3		System shall not provide advice or counseling with respect to
4		whether the employee should exercise the option. The System
5		shall inform Tier 1 employees who are eligible to participate
6		in the defined contribution plan that they may also wish to
7		obtain information and counsel relating to their option from
8		any other available source, including but not limited to labor
9		organizations, private counsel, and financial advisors.
10		(e) In no event shall the System, its staff, its authorized
11		representatives, or the Board be liable for any information
12		given to an employee under this Section. The System may
13		coordinate with the Illinois Department of Central Management
14		Services and other retirement systems administering a defined
15		contribution plan in accordance with this amendatory Act of the
16		100th General Assembly to provide information concerning the
17		impact of the option set forth in this Section.
18		(f) Notwithstanding any other provision of this Section, no
19		person shall begin participating in the defined contribution
20		plan until it has attained qualified plan status and received
21		all necessary approvals from the U.S. Internal Revenue Service.
22		(g) The System shall report on its progress under this
23		Section, including the available details of the defined
24		contribution plan and the System's plans for informing eligible
25		Tier 1 employees about the plan, to the Governor and the
26		General Assembly on or before January 15, 2018.

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1		(h) If a Tier 1 employee has not made an election under
2		Section 15-134.5 of this Code, then the plan prescribed under
3		this Section shall not apply to that Tier 1 employee and that
4		Tier 1 employee shall remain eligible to make the election
5		prescribed under Section 15-134.5.
6		(i) The intent of this amendatory Act of the 100th General
7		Assembly is to ensure that the State's normal cost of
8		participation in the defined contribution plan is similar, and
9		if possible equal, to the State's normal cost of participation
10		in the defined benefit plan, unless a lower State's normal cost
11		is necessary to ensure cost neutrality.
12		(40 ILCS 5/15-201.1 new)
13		Sec. 15-201.1. Defined contribution plan; termination. If
14		the defined contribution plan is terminated or becomes
15		inoperative pursuant to law, then each participant in the plan
16		shall automatically be deemed to have been a contributing Tier
17		1 employee participating in the System's defined benefit plan
18		during the time in which he or she participated in the defined
19		contribution plan, and for that purpose the System shall be
20		entitled to recover the amounts in the participant's defined
21		contribution accounts.
22		(40 ILCS 5/16-107.1 new)
23		Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
24		teacher under this Article who first became a member or

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1		participant before January 1, 2011 under any reciprocal
2		retirement system or pension fund established under this Code
3		other than a retirement system or pension fund established
4		under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
5		the purposes of the election under Section 16-122.9, "Tier 1
6		employee" does not include a teacher under this Article who
7		would qualify as a Tier 1 employee but who has made an
8		irrevocable election on or before June 1, 2017 to retire from
9		service pursuant to the terms of an employment contract or a
10		collective bargaining agreement in effect on June 1, 2017,
11		excluding any extension, amendment, or renewal of that
12		agreement after that date, and has notified the System of that
13		election.
14		(40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)
15		(Text of Section WITHOUT the changes made by P.A. 98-599,
16		which has been held unconstitutional)
17		Sec. 16-121. Salary. "Salary": The actual compensation
18		received by a teacher during any school year and recognized by
19		the system in accordance with rules of the board. For purposes
20		of this Section, "school year" includes the regular school term
21		plus any additional period for which a teacher is compensated
22		and such compensation is recognized by the rules of the board.
23		Notwithstanding any other provision of this Section,
24		"salary" does not include any future increase in income that is
25		offered by an employer for service as a Tier 1 employee under

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1		this Article pursuant to the condition set forth in subsection
2		(c) of Section 16-122.9 and accepted under that condition by a
3		Tier 1 employee who has made the election under paragraph (2)
4		of subsection (a) of Section 16-122.9.
5		Notwithstanding any other provision of this Section,
6		"salary" does not include any consideration payment made to a
7		Tier 1 employee.
8		(Source: P.A. 84-1028.)
9		(40 ILCS 5/16-121.1 new)
10		Sec. 16-121.1. Future increase in income. "Future increase
11		in income" means an increase to a Tier 1 employee's base pay
12		that is offered by an employer to the Tier 1 employee for
13		service under this Article after June 30, 2018 that qualifies
14		as "salary", as defined in Section 16-121, or would qualify as
15		"salary" but for the fact that it was offered to and accepted
16		by the Tier 1 employee under the condition set forth in
17		subsection (c) of Section 16-122.9. The term "future increase
18		in income" includes an increase to a Tier 1 employee's base pay
19		that is paid to the Tier 1 employee pursuant to an extension,
20		amendment, or renewal of any such employment contract or
21		collective bargaining agreement after the effective date of
22		this Section.
23		(40 ILCS 5/16-121.2 new)
24		Sec. 16-121.2. Base pay. As used in Section 16-121.1 of

HB4045 Engrossed - 219 - LRB100 12674 RPS 26063 b
1		this Code, "base pay" means the greater of either (i) the Tier
2		1 employee's annualized rate of salary as of June 30, 2018, or
3		(ii) the Tier 1 employee's annualized rate of salary
4		immediately preceding the expiration, renewal, or amendment of
5		an employment contract or collective bargaining agreement in
6		effect on the effective date of this Section. For a person
7		returning to active service as a Tier 1 employee after June 30,
8		2018, however, "base pay" means the employee's annualized rate
9		of salary as of the employee's last date of service prior to
10		July 1, 2018. The System shall calculate the base pay of each
11		Tier 1 employee pursuant to this Section.
12		(40 ILCS 5/16-122.9 new)
13		Sec. 16-122.9. Election by Tier 1 employees.
14		(a) Each active Tier 1 employee shall make an irrevocable
15		election either:
16		(1) to agree to delay his or her eligibility for
17		automatic annual increases in retirement annuity as
18		provided in subsection (a-1) of Section 16-133.1 or
19		subsection (b-1) of Section 16-136.1, whichever is
20		applicable, and to have the amount of the automatic annual
21		increases in his or her retirement annuity and survivor
22		benefit that are otherwise provided for in this Article
23		calculated, instead, as provided in subsection (a-1) of
24		Section 16-133.1 or subsection (b-1) of Section 16-136.1,
25		whichever is applicable; or

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1		(2) to not agree to paragraph (1) of this subsection.
2		The election required under this subsection (a) shall be
3		made by each active Tier 1 employee no earlier than January 1,
4		2018 and no later than March 31, 2018, except that:
5		(i) a person who becomes a Tier 1 employee under this
6		Article on or after February 1, 2018 must make the election
7		under this subsection (a) within 60 days after becoming a
8		Tier 1 employee; and
9		(ii) a person who returns to active service as a Tier 1
10		employee under this Article on or after February 1, 2018
11		and has not yet made an election under this Section must
12		make the election under this subsection (a) within 60 days
13		after returning to active service as a Tier 1 employee.
14		If a Tier 1 employee fails for any reason to make a
15		required election under this subsection within the time
16		specified, then the employee shall be deemed to have made the
17		election under paragraph (2) of this subsection.
18		(a-5) If this Section is enjoined or stayed by an Illinois
19		court or a court of competent jurisdiction pending the entry of
20		a final and unappealable decision, and this Section is
21		determined to be constitutional or otherwise valid by a final
22		unappealable decision of an Illinois court or a court of
23		competent jurisdiction, then the election procedure set forth
24		in subsection (a) of this Section shall commence on the 180th
25		calendar day after the date of the issuance of the final
26		unappealable decision and shall conclude at the end of the

HB4045 Engrossed - 221 - LRB100 12674 RPS 26063 b
1		270th calendar day after that date.
2		(a-10) All elections under subsection (a) that are made or
3		deemed to be made before July 1, 2018 shall take effect on July
4		1, 2018. Elections that are made or deemed to be made on or
5		after July 1, 2018 shall take effect on the first day of the
6		month following the month in which the election is made or
7		deemed to be made.
8		(b) As adequate and legal consideration provided under this
9		amendatory Act of the 100th General Assembly for making an
10		election under paragraph (1) of subsection (a) of this Section,
11		an employer shall be expressly and irrevocably prohibited from
12		offering any future increases in income to a Tier 1 employee
13		who has made an election under paragraph (1) of subsection (a)
14		of this Section on the condition of not constituting salary
15		under Section 16-121.
16		As adequate and legal consideration provided under this
17		amendatory Act of the 100th General Assembly for making an
18		election under paragraph (1) of subsection (a) of this Section,
19		each Tier 1 employee who has made an election under paragraph
20		(1) of subsection (a) of this Section shall receive a
21		consideration payment equal to 10% of the contributions made by
22		or on behalf of the employee under paragraphs (1), (2), and (3)
23		of subsection (a) of Section 16-152 before the effective date
24		of that election. The State Comptroller shall pay the
25		consideration payment to the Tier 1 employee out of funds
26		appropriated for that purpose under Section 1.9 of the State

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1		Pension Funds Continuing Appropriation Act. The System shall
2		calculate the amount of each consideration payment and, by July
3		1, 2018, shall certify to the State Comptroller the amount of
4		the consideration payment, together with the name, address, and
5		any other available payment information of the Tier 1 employee
6		as found in the records of the System. The System shall make
7		additional calculations and certifications of consideration
8		payments to the State Comptroller as the System deems
9		necessary.
10		(c) A Tier 1 employee who makes the election under
11		paragraph (2) of subsection (a) of this Section shall not be
12		subject to paragraph (1) of subsection (a) of this Section.
13		However, each future increase in income offered by an employer
14		under this Article to a Tier 1 employee who has made the
15		election under paragraph (2) of subsection (a) of this Section
16		shall be offered by the employer expressly and irrevocably on
17		the condition of not constituting salary under Section 16-121
18		and that the Tier 1 employee's acceptance of the offered future
19		increase in income shall constitute his or her agreement to
20		that condition.
21		(d) The System shall make a good faith effort to contact
22		each Tier 1 employee subject to this Section. The System shall
23		mail information describing the required election to each Tier
24		1 employee by United States Postal Service mail to his or her
25		last known address on file with the System. If the Tier 1
26		employee is not responsive to other means of contact, it is

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1		sufficient for the System to publish the details of any
2		required elections on its website or to publish those details
3		in a regularly published newsletter or other existing public
4		forum.
5		Tier 1 employees who are subject to this Section shall be
6		provided with an election packet containing information
7		regarding their options, as well as the forms necessary to make
8		the required election. Upon request, the System shall offer
9		Tier 1 employees an opportunity to receive information from the
10		System before making the required election. The information may
11		consist of video materials, group presentations, individual
12		consultation with a member or authorized representative of the
13		System in person or by telephone or other electronic means, or
14		any combination of those methods. The System shall not provide
15		advice or counseling with respect to which election a Tier 1
16		employee should make or specific to the legal or tax
17		circumstances of or consequences to the Tier 1 employee.
18		The System shall inform Tier 1 employees in the election
19		packet required under this subsection that the Tier 1 employee
20		may also wish to obtain information and counsel relating to the
21		election required under this Section from any other available
22		source, including, but not limited to, labor organizations and
23		private counsel.
24		In no event shall the System, its staff, or the Board be
25		held liable for any information given to a member regarding the
26		elections under this Section. The System shall coordinate with

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1		the Illinois Department of Central Management Services and each
2		other retirement system administering an election in
3		accordance with this amendatory Act of the 100th General
4		Assembly to provide information concerning the impact of the
5		election set forth in this Section.
6		(e) Notwithstanding any other provision of law, an employer
7		under this Article is required to offer each future increase in
8		income expressly and irrevocably on the condition of not
9		constituting "salary" under Section 16-121 to any Tier 1
10		employee who has made an election under paragraph (2) of
11		subsection (a) of this Section. The offer shall also provide
12		that the Tier 1 employee's acceptance of the offered future
13		increase in income shall constitute his or her agreement to the
14		condition set forth in this subsection.
15		For purposes of legislative intent, the condition set forth
16		in this subsection shall be construed in a manner that ensures
17		that the condition is not violated or circumvented through any
18		contrivance of any kind.
19		(f) A member's election under this Section is not a
20		prohibited election under subdivision (j)(1) of Section 1-119
21		of this Code.
22		(g) No provision of this Section shall be interpreted in a
23		way that would cause the System to cease to be a qualified plan
24		under Section 401(a) of the Internal Revenue Code of 1986.
25		(h) If an election created by this amendatory Act in any
26		other Article of this Code or any change deriving from that

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1		election is determined to be unconstitutional or otherwise
2		invalid by a final unappealable decision of an Illinois court
3		or a court of competent jurisdiction, the invalidity of that
4		provision shall not in any way affect the validity of this
5		Section or the changes deriving from the election required
6		under this Section.
7		(40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)
8		(Text of Section WITHOUT the changes made by P.A. 98-599,
9		which has been held unconstitutional)
10		Sec. 16-133.1. Automatic annual increase in annuity.
11		(a) Each member with creditable service and retiring on or
12		after August 26, 1969 is entitled to the automatic annual
13		increases in annuity provided under this Section while
14		receiving a retirement annuity or disability retirement
15		annuity from the system.
16		Except as otherwise provided in subsection (a-1), an An
17		annuitant shall first be entitled to an initial increase under
18		this Section on the January 1 next following the first
19		anniversary of retirement, or January 1 of the year next
20		following attainment of age 61, whichever is later. At such
21		time, the system shall pay an initial increase determined as
22		follows:
23		(1) 1.5% of the originally granted retirement annuity
24		or disability retirement annuity multiplied by the number
25		of years elapsed, if any, from the date of retirement until

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1		January 1, 1972, plus
2		(2) 2% of the originally granted annuity multiplied by
3		the number of years elapsed, if any, from the date of
4		retirement or January 1, 1972, whichever is later, until
5		January 1, 1978, plus
6		(3) 3% of the originally granted annuity multiplied by
7		the number of years elapsed from the date of retirement or
8		January 1, 1978, whichever is later, until the effective
9		date of the initial increase.
10		However, the initial annual increase calculated under this
11		Section for the recipient of a disability retirement annuity
12		granted under Section 16-149.2 shall be reduced by an amount
13		equal to the total of all increases in that annuity received
14		under Section 16-149.5 (but not exceeding 100% of the amount of
15		the initial increase otherwise provided under this Section).
16		Except as otherwise provided in subsection (a-1),
17		following Following the initial increase, automatic annual
18		increases in annuity shall be payable on each January 1
19		thereafter during the lifetime of the annuitant, determined as
20		a percentage of the originally granted retirement annuity or
21		disability retirement annuity for increases granted prior to
22		January 1, 1990, and calculated as a percentage of the total
23		amount of annuity, including previous increases under this
24		Section, for increases granted on or after January 1, 1990, as
25		follows: 1.5% for periods prior to January 1, 1972, 2% for
26		periods after December 31, 1971 and prior to January 1, 1978,

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1		and 3% for periods after December 31, 1977.
2		(a-1) Notwithstanding any other provision of this Article,
3		for a Tier 1 employee who made the election under paragraph (1)
4		of subsection (a) of Section 16-122.9:
5		(1) The initial increase in retirement annuity under
6		this Section shall occur on the January 1 occurring either
7		on or after the attainment of age 67 or the fifth
8		anniversary of the annuity start date, whichever is
9		earlier.
10		(2) The amount of each automatic annual increase in
11		retirement annuity and survivor benefit occurring on or
12		after the effective date of that election shall be
13		calculated as a percentage of the originally granted
14		retirement annuity or survivor benefit, equal to 3% or
15		one-half the annual unadjusted percentage increase (but
16		not less than zero) in the consumer price index-u for the
17		12 months ending with the September preceding each November
18		1, whichever is less. If the annual unadjusted percentage
19		change in the consumer price index-u for the 12 months
20		ending with the September preceding each November 1 is zero
21		or there is a decrease, then the annuity shall not be
22		increased.
23		For the purposes of this Section, "consumer price index-u"
24		means the index published by the Bureau of Labor Statistics of
25		the United States Department of Labor that measures the average
26		change in prices of goods and services purchased by all urban

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1		consumers, United States city average, all items, 1982-84 =
2		100. The new amount resulting from each annual adjustment shall
3		be determined by the Public Pension Division of the Department
4		of Insurance and made available to the board of the retirement
5		system by November 1 of each year.
6		(b) The automatic annual increases in annuity provided
7		under this Section shall not be applicable unless a member has
8		made contributions toward such increases for a period
9		equivalent to one full year of creditable service. If a member
10		contributes for service performed after August 26, 1969 but the
11		member becomes an annuitant before such contributions amount to
12		one full year's contributions based on the salary at the date
13		of retirement, he or she may pay the necessary balance of the
14		contributions to the system and be eligible for the automatic
15		annual increases in annuity provided under this Section.
16		(c) Each member shall make contributions toward the cost of
17		the automatic annual increases in annuity as provided under
18		Section 16-152.
19		(d) An annuitant receiving a retirement annuity or
20		disability retirement annuity on July 1, 1969, who subsequently
21		re-enters service as a teacher is eligible for the automatic
22		annual increases in annuity provided under this Section if he
23		or she renders at least one year of creditable service
24		following the latest re-entry.
25		(e) In addition to the automatic annual increases in
26		annuity provided under this Section, an annuitant who meets the

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1		service requirements of this Section and whose retirement
2		annuity or disability retirement annuity began on or before
3		January 1, 1971 shall receive, on January 1, 1981, an increase
4		in the annuity then being paid of one dollar per month for each
5		year of creditable service. On January 1, 1982, an annuitant
6		whose retirement annuity or disability retirement annuity
7		began on or before January 1, 1977 shall receive an increase in
8		the annuity then being paid of one dollar per month for each
9		year of creditable service.
10		On January 1, 1987, any annuitant whose retirement annuity
11		began on or before January 1, 1977, shall receive an increase
12		in the monthly retirement annuity equal to 8¢ per year of
13		creditable service times the number of years that have elapsed
14		since the annuity began.
15		(Source: P.A. 91-927, eff. 12-14-00.)
16		(40 ILCS 5/16-136.1) (from Ch. 108 1/2, par. 16-136.1)
17		(Text of Section WITHOUT the changes made by P.A. 98-599,
18		which has been held unconstitutional)
19		Sec. 16-136.1. Annual increase for certain annuitants.
20		(a) Any annuitant receiving a retirement annuity on June
21		30, 1969 and any member retiring after June 30, 1969 shall be
22		eligible for the annual increases provided under this Section
23		provided the annuitant is ineligible for the automatic annual
24		increase in annuity provided under Section 16-133.1, and
25		provided further that (1) retirement occurred at age 55 or over

HB4045 Engrossed - 230 - LRB100 12674 RPS 26063 b
1		and was based on 5 or more years of creditable service or (2)
2		if retirement occurred prior to age 55, the retirement annuity
3		was based on 20 or more years of creditable service.
4		(b) Except as otherwise provided in subsection (b-1), an An
5		annuitant entitled to increases under this Section shall be
6		entitled to the initial increase as of the later of: (1)
7		January 1 following attainment of age 65, (2) January 1
8		following the first anniversary of retirement, or (3) the first
9		day of the month following receipt of the required qualifying
10		contribution from the annuitant. The initial monthly increase
11		shall be computed on the basis of the period elapsed between
12		the later of the date of last retirement or attainment of age
13		50 and the date of qualification for the initial increase, at
14		the rate of 1 1/2% of the original monthly retirement annuity
15		per year for periods prior to September 1, 1971, and at the
16		rate of 2% per year for periods between September 1, 1971 and
17		September 1, 1978, and at the rate of 3% per year for periods
18		thereafter.
19		Except as otherwise provided in subsection (b-1), if
20		applicable, an An annuitant who has received an initial
21		increase under this Section, shall be entitled, on each January
22		1 following the granting of the initial increase, to an
23		increase of 3% of the original monthly retirement annuity for
24		increases granted prior to January 1, 1990, and equal to 3% of
25		the total annuity, including previous increases under this
26		Section, for increases granted on or after January 1, 1990. The

HB4045 Engrossed - 231 - LRB100 12674 RPS 26063 b
1		original monthly retirement annuity for computations under
2		this subsection (b) shall be considered to be $83.34 for any
3		annuitant entitled to benefits under Section 16-134. The
4		minimum original disability retirement annuity for
5		computations under this subsection (b) shall be considered to
6		be $33.34 per month for any annuitant retired on account of
7		disability.
8		(b-1) Notwithstanding any other provision of this Article,
9		for a Tier 1 employee who made the election under paragraph (1)
10		of subsection (a) of Section 16-122.9:
11		(1) The initial increase in retirement annuity under
12		this Section shall occur on the January 1 occurring either
13		on or after the attainment of age 67 or the fifth
14		anniversary of the annuity start date, whichever is
15		earlier.
16		(2) The amount of each automatic annual increase in
17		retirement annuity or survivor benefit occurring on or
18		after the effective date of that election shall be
19		calculated as a percentage of the originally granted
20		retirement annuity or survivor benefit, equal to 3% or
21		one-half the annual unadjusted percentage increase (but
22		not less than zero) in the consumer price index-u for the
23		12 months ending with the September preceding each November
24		1, whichever is less. If the annual unadjusted percentage
25		change in the consumer price index-u for the 12 months
26		ending with the September preceding each November 1 is zero

HB4045 Engrossed - 232 - LRB100 12674 RPS 26063 b
1		or there is a decrease, then the annuity shall not be
2		increased.
3		For the purposes of this Section, "consumer price index-u"
4		means the index published by the Bureau of Labor Statistics of
5		the United States Department of Labor that measures the average
6		change in prices of goods and services purchased by all urban
7		consumers, United States city average, all items, 1982-84 =
8		100. The new amount resulting from each annual adjustment shall
9		be determined by the Public Pension Division of the Department
10		of Insurance and made available to the board of the retirement
11		system by November 1 of each year.
12		(c) An annuitant who otherwise qualifies for annual
13		increases under this Section must make a one-time payment of 1%
14		of the monthly final average salary for each full year of the
15		creditable service forming the basis of the retirement annuity
16		or, if the retirement annuity was not computed using final
17		average salary, 1% of the original monthly retirement annuity
18		for each full year of service forming the basis of the
19		retirement annuity.
20		(d) In addition to other increases which may be provided by
21		this Section, regardless of creditable service, annuitants not
22		meeting the service requirements of Section 16-133.1 and whose
23		retirement annuity began on or before January 1, 1971 shall
24		receive, on January 1, 1981, an increase in the retirement
25		annuity then being paid of one dollar per month for each year
26		of creditable service forming the basis of the retirement

HB4045 Engrossed - 233 - LRB100 12674 RPS 26063 b
1		allowance. On January 1, 1982, annuitants whose retirement
2		annuity began on or before January 1, 1977, shall receive an
3		increase in the retirement annuity then being paid of one
4		dollar per month for each year of creditable service.
5		On January 1, 1987, any annuitant whose retirement annuity
6		began on or before January 1, 1977, shall receive an increase
7		in the monthly retirement annuity equal to 8¢ per year of
8		creditable service times the number of years that have elapsed
9		since the annuity began.
10		(Source: P.A. 86-273.)
11		(40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
12		(Text of Section WITHOUT the changes made by P.A. 98-599,
13		which has been held unconstitutional)
14		Sec. 16-152. Contributions by members.
15		(a) Except as otherwise provided in subsection (a-5), each
16		Each member shall make contributions for membership service to
17		this System as follows:
18		(1) Effective July 1, 1998, contributions of 7.50% of
19		salary towards the cost of the retirement annuity. Such
20		contributions shall be deemed "normal contributions".
21		(2) Effective July 1, 1969, contributions of 1/2 of 1%
22		of salary toward the cost of the automatic annual increase
23		in retirement annuity provided under Section 16-133.1.
24		(3) Effective July 24, 1959, contributions of 1% of
25		salary towards the cost of survivor benefits. Such

HB4045 Engrossed - 234 - LRB100 12674 RPS 26063 b
1		contributions shall not be credited to the individual
2		account of the member and shall not be subject to refund
3		except as provided under Section 16-143.2.
4		(4) Effective July 1, 2005, contributions of 0.40% of
5		salary toward the cost of the early retirement without
6		discount option provided under Section 16-133.2. This
7		contribution shall cease upon termination of the early
8		retirement without discount option as provided in Section
9		16-133.2.
10		(a-5) Beginning July 1, 2018 or the effective date of the
11		Tier 1 employee's election under paragraph (1) of subsection
12		(a) of Section 16-122.9, whichever is later, in lieu of the
13		contributions otherwise required under subsection (a), each
14		Tier 1 employee who made the election under paragraph (1) of
15		subsection (a) of Section 16-122.9 shall make contributions as
16		follows:
17		(1) Contributions of 7.50% of salary towards the cost
18		of the retirement annuity. Such contributions shall be
19		deemed "normal contributions".
20		(2) Contributions of 0.60% towards the cost of survivor
21		benefits. Such contributions shall not be credited to the
22		individual account of the member and shall not be subject
23		to refund except as provided in Section 16-143.2.
24		(3) Contributions of 0.40% of salary toward the cost of
25		the early retirement without discount option provided
26		under Section 16-133.2. This contribution shall cease upon

HB4045 Engrossed - 235 - LRB100 12674 RPS 26063 b
1		termination of the early retirement without discount
2		option as provided in Section 16-133.2.
3		(b) The minimum required contribution for any year of
4		full-time teaching service shall be $192.
5		(c) Contributions shall not be required of any annuitant
6		receiving a retirement annuity who is given employment as
7		permitted under Section 16-118 or 16-150.1.
8		(d) A person who (i) was a member before July 1, 1998, (ii)
9		retires with more than 34 years of creditable service, and
10		(iii) does not elect to qualify for the augmented rate under
11		Section 16-129.1 shall be entitled, at the time of retirement,
12		to receive a partial refund of contributions made under this
13		Section for service occurring after the later of June 30, 1998
14		or attainment of 34 years of creditable service, in an amount
15		equal to 1.00% of the salary upon which those contributions
16		were based.
17		(e) A member's contributions toward the cost of early
18		retirement without discount made under item (a)(4) of this
19		Section shall not be refunded if the member has elected early
20		retirement without discount under Section 16-133.2 and has
21		begun to receive a retirement annuity under this Article
22		calculated in accordance with that election. Otherwise, a
23		member's contributions toward the cost of early retirement
24		without discount made under item (a)(4) of this Section shall
25		be refunded according to whichever one of the following
26		circumstances occurs first:

HB4045 Engrossed - 236 - LRB100 12674 RPS 26063 b
1		(1) The contributions shall be refunded to the member,
2		without interest, within 120 days after the member's
3		retirement annuity commences, if the member does not elect
4		early retirement without discount under Section 16-133.2.
5		(2) The contributions shall be included, without
6		interest, in any refund claimed by the member under Section
7		16-151.
8		(3) The contributions shall be refunded to the member's
9		designated beneficiary (or if there is no beneficiary, to
10		the member's estate), without interest, if the member dies
11		without having begun to receive a retirement annuity under
12		this Article.
13		(4) The contributions shall be refunded to the member,
14		without interest, if the early retirement without discount
15		option provided under subsection (d) of Section 16-133.2 is
16		terminated. In that event, the System shall provide to the
17		member, within 120 days after the option is terminated, an
18		application for a refund of those contributions.
19		(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 99-642,
20		eff. 7-28-16.)
21		(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
22		(Text of Section WITHOUT the changes made by P.A. 98-599,
23		which has been held unconstitutional)
24		Sec. 16-158. Contributions by State and other employing
25		units.

HB4045 Engrossed - 237 - LRB100 12674 RPS 26063 b
1		(a) The State shall make contributions to the System by
2		means of appropriations from the Common School Fund and other
3		State funds of amounts which, together with other employer
4		contributions, employee contributions, investment income, and
5		other income, will be sufficient to meet the cost of
6		maintaining and administering the System on a 90% funded basis
7		in accordance with actuarial recommendations.
8		The Board shall determine the amount of State contributions
9		required for each fiscal year on the basis of the actuarial
10		tables and other assumptions adopted by the Board and the
11		recommendations of the actuary, using the formula in subsection
12		(b-3).
13		(a-1) Annually, on or before November 15 until November 15,
14		2011, the Board shall certify to the Governor the amount of the
15		required State contribution for the coming fiscal year. The
16		certification under this subsection (a-1) shall include a copy
17		of the actuarial recommendations upon which it is based and
18		shall specifically identify the System's projected State
19		normal cost for that fiscal year.
20		On or before May 1, 2004, the Board shall recalculate and
21		recertify to the Governor the amount of the required State
22		contribution to the System for State fiscal year 2005, taking
23		into account the amounts appropriated to and received by the
24		System under subsection (d) of Section 7.2 of the General
25		Obligation Bond Act.
26		On or before July 1, 2005, the Board shall recalculate and

HB4045 Engrossed - 238 - LRB100 12674 RPS 26063 b
1		recertify to the Governor the amount of the required State
2		contribution to the System for State fiscal year 2006, taking
3		into account the changes in required State contributions made
4		by this amendatory Act of the 94th General Assembly.
5		On or before April 1, 2011, the Board shall recalculate and
6		recertify to the Governor the amount of the required State
7		contribution to the System for State fiscal year 2011, applying
8		the changes made by Public Act 96-889 to the System's assets
9		and liabilities as of June 30, 2009 as though Public Act 96-889
10		was approved on that date.
11		(a-5) On or before November 1 of each year, beginning
12		November 1, 2012, the Board shall submit to the State Actuary,
13		the Governor, and the General Assembly a proposed certification
14		of the amount of the required State contribution to the System
15		for the next fiscal year, along with all of the actuarial
16		assumptions, calculations, and data upon which that proposed
17		certification is based. On or before January 1 of each year,
18		beginning January 1, 2013, the State Actuary shall issue a
19		preliminary report concerning the proposed certification and
20		identifying, if necessary, recommended changes in actuarial
21		assumptions that the Board must consider before finalizing its
22		certification of the required State contributions. On or before
23		January 15, 2013 and each January 15 thereafter, the Board
24		shall certify to the Governor and the General Assembly the
25		amount of the required State contribution for the next fiscal
26		year. The Board's certification must note any deviations from

HB4045 Engrossed - 239 - LRB100 12674 RPS 26063 b
1		the State Actuary's recommended changes, the reason or reasons
2		for not following the State Actuary's recommended changes, and
3		the fiscal impact of not following the State Actuary's
4		recommended changes on the required State contribution.
5		On or before May 1, 2018, the Board shall recalculate and
6		recertify to the Governor and the General Assembly the amount
7		of the required State contribution to the System for State
8		fiscal year 2019, taking into account the effect on the
9		System's liabilities of the elections made under Section
10		16-122.9.
11		On or before October 1, 2018, the Board shall recalculate
12		and recertify to the Governor and the General Assembly the
13		amount of the required State contribution to the System for
14		State fiscal year 2019, taking into account the reduction
15		specified under item (3) of subsection (b-3) of this Section.
16		(a-10) For purposes of subsection (c-5) of Section 20 of
17		the Budget Stabilization Act, on or before November 1 of each
18		year beginning November 1, 2019, the Board shall determine the
19		amount of the State contribution to the System that would have
20		been required for the next fiscal year if Section 1-161,
21		subsection (b-4) of Section 16-158, and the changes made to
22		Section 1-160 by this amendatory Act of the 100th General
23		Assembly had not taken effect, using the best and most recent
24		available data but based on the law in effect on May 31, 2019.
25		The Board shall submit to the State Actuary, the Governor, and
26		the General Assembly a proposed certification, along with the

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1		relevant law, actuarial assumptions, calculations, and data
2		upon which that certification is based. On or before January 1,
3		2020 and every January 1 thereafter, the State Actuary shall
4		issue a preliminary report concerning the proposed
5		certification and identifying, if necessary, recommended
6		changes in actuarial assumptions that the Board must consider
7		before finalizing its certification. On or before January 15,
8		2020 and every January 1 thereafter, the Board shall certify to
9		the Governor and the General Assembly the amount of the State
10		contribution to the System that would have been required for
11		the next fiscal year if if Section 1-161, subsection (b-4) of
12		Section 16-158, and the changes made to Section 1-160 by this
13		amendatory Act of the 100th General Assembly had not taken
14		effect, using the best and most recent available data but based
15		on the law in effect on May 31, 2019. The Board's certification
16		must note any deviations from the State Actuary's recommended
17		changes, the reason or reasons for not following the State
18		Actuary's recommended changes, and the impact of not following
19		the State Actuary's recommended changes.
20		(a-15) As soon as practical after the effective date of
21		this amendatory Act of the 100th General Assembly, the Board
22		shall recalculate and recertify to the State Actuary, the
23		Governor, and the General Assembly the amount of the State
24		contribution to the System for State fiscal year 2018, taking
25		into account the changes in required State contributions made
26		by this amendatory Act of the 100th General Assembly. The State

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1		Actuary shall review the assumptions and valuations underlying
2		the Board's revised certification and issue a preliminary
3		report concerning the proposed recertification and
4		identifying, if necessary, recommended changes in actuarial
5		assumptions that the Board must consider before finalizing its
6		certification of the required State contributions. The Board's
7		final certification must note any deviations from the State
8		Actuary's recommended changes, the reason or reasons for not
9		following the State Actuary's recommended changes, and the
10		fiscal impact of not following the State Actuary's recommended
11		changes on the required State contribution.
12		(b) Through State fiscal year 1995, the State contributions
13		shall be paid to the System in accordance with Section 18-7 of
14		the School Code.
15		(b-1) Beginning in State fiscal year 1996, on the 15th day
16		of each month, or as soon thereafter as may be practicable, the
17		Board shall submit vouchers for payment of State contributions
18		to the System, in a total monthly amount of one-twelfth of the
19		required annual State contribution certified under subsection
20		(a-1). From the effective date of this amendatory Act of the
21		93rd General Assembly through June 30, 2004, the Board shall
22		not submit vouchers for the remainder of fiscal year 2004 in
23		excess of the fiscal year 2004 certified contribution amount
24		determined under this Section after taking into consideration
25		the transfer to the System under subsection (a) of Section
26		6z-61 of the State Finance Act. These vouchers shall be paid by

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1		the State Comptroller and Treasurer by warrants drawn on the
2		funds appropriated to the System for that fiscal year.
3		If in any month the amount remaining unexpended from all
4		other appropriations to the System for the applicable fiscal
5		year (including the appropriations to the System under Section
6		8.12 of the State Finance Act and Section 1 of the State
7		Pension Funds Continuing Appropriation Act) is less than the
8		amount lawfully vouchered under this subsection, the
9		difference shall be paid from the Common School Fund under the
10		continuing appropriation authority provided in Section 1.1 of
11		the State Pension Funds Continuing Appropriation Act.
12		(b-2) Allocations from the Common School Fund apportioned
13		to school districts not coming under this System shall not be
14		diminished or affected by the provisions of this Article.
15		(b-3) For State fiscal years 2018 through 2045 (except as
16		otherwise provided for fiscal year 2019), the minimum
17		contribution to the System to be made by the State for each
18		fiscal year shall be an amount determined by the System to be
19		sufficient to bring the total assets of the System up to 90% of
20		the total actuarial liabilities of the System by the end of
21		State fiscal year 2045. In making these determinations, the
22		required State contribution shall be calculated each year as a
23		level percentage of total payroll, including payroll that is
24		not deemed pensionable, but excluding payroll attributable to
25		participants in the defined contribution plan under Section
26		16-205.1, over the years remaining to and including fiscal year

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1		2045 and shall be determined under the projected unit credit
2		actuarial cost method.
3		For State fiscal year 2019:
4		(1) The initial calculation and certification shall be
5		based on the amount determined above.
6		(2) For purposes of the recertification due on or
7		before May 1, 2018, the recalculation of the required State
8		contribution for fiscal year 2019 shall take into account
9		the effect on the System's liabilities of the elections
10		made under Section 16-122.9.
11		(3) For purposes of the recertification due on or
12		before October 1, 2018, the total required State
13		contribution for fiscal year 2019 shall be reduced by the
14		amount of the consideration payments made to Tier 1
15		employees who made the election under paragraph (1) of
16		subsection (a) of Section 16-122.9.
17		Beginning in State fiscal year 2018, any increase or
18		decrease in State contribution over the prior fiscal year due
19		exclusively to changes in actuarial or investment assumptions
20		adopted by the Board shall be included in the State
21		contribution to the System, as a percentage of the applicable
22		employee payroll, and shall be increased in equal annual
23		increments so that by the State fiscal year occurring 5 years
24		after the adoption of the actuarial or investment assumptions,
25		the State is contributing at the rate otherwise required under
26		this Section.

HB4045 Engrossed - 244 - LRB100 12674 RPS 26063 b
1		For State fiscal years 2012 through 2017 2045, the minimum
2		contribution to the System to be made by the State for each
3		fiscal year shall be an amount determined by the System to be
4		sufficient to bring the total assets of the System up to 90% of
5		the total actuarial liabilities of the System by the end of
6		State fiscal year 2045. In making these determinations, the
7		required State contribution shall be calculated each year as a
8		level percentage of payroll over the years remaining to and
9		including fiscal year 2045 and shall be determined under the
10		projected unit credit actuarial cost method.
11		For State fiscal years 1996 through 2005, the State
12		contribution to the System, as a percentage of the applicable
13		employee payroll, shall be increased in equal annual increments
14		so that by State fiscal year 2011, the State is contributing at
15		the rate required under this Section; except that in the
16		following specified State fiscal years, the State contribution
17		to the System shall not be less than the following indicated
18		percentages of the applicable employee payroll, even if the
19		indicated percentage will produce a State contribution in
20		excess of the amount otherwise required under this subsection
21		and subsection (a), and notwithstanding any contrary
22		certification made under subsection (a-1) before the effective
23		date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
24		in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
25		2003; and 13.56% in FY 2004.
26		Notwithstanding any other provision of this Article, the

HB4045 Engrossed - 245 - LRB100 12674 RPS 26063 b
1		total required State contribution for State fiscal year 2006 is
2		$534,627,700.
3		Notwithstanding any other provision of this Article, the
4		total required State contribution for State fiscal year 2007 is
5		$738,014,500.
6		For each of State fiscal years 2008 through 2009, the State
7		contribution to the System, as a percentage of the applicable
8		employee payroll, shall be increased in equal annual increments
9		from the required State contribution for State fiscal year
10		2007, so that by State fiscal year 2011, the State is
11		contributing at the rate otherwise required under this Section.
12		Notwithstanding any other provision of this Article, the
13		total required State contribution for State fiscal year 2010 is
14		$2,089,268,000 and shall be made from the proceeds of bonds
15		sold in fiscal year 2010 pursuant to Section 7.2 of the General
16		Obligation Bond Act, less (i) the pro rata share of bond sale
17		expenses determined by the System's share of total bond
18		proceeds, (ii) any amounts received from the Common School Fund
19		in fiscal year 2010, and (iii) any reduction in bond proceeds
20		due to the issuance of discounted bonds, if applicable.
21		Notwithstanding any other provision of this Article, the
22		total required State contribution for State fiscal year 2011 is
23		the amount recertified by the System on or before April 1, 2011
24		pursuant to subsection (a-1) of this Section and shall be made
25		from the proceeds of bonds sold in fiscal year 2011 pursuant to
26		Section 7.2 of the General Obligation Bond Act, less (i) the

HB4045 Engrossed - 246 - LRB100 12674 RPS 26063 b
1		pro rata share of bond sale expenses determined by the System's
2		share of total bond proceeds, (ii) any amounts received from
3		the Common School Fund in fiscal year 2011, and (iii) any
4		reduction in bond proceeds due to the issuance of discounted
5		bonds, if applicable. This amount shall include, in addition to
6		the amount certified by the System, an amount necessary to meet
7		employer contributions required by the State as an employer
8		under paragraph (e) of this Section, which may also be used by
9		the System for contributions required by paragraph (a) of
10		Section 16-127.
11		Beginning in State fiscal year 2046, the minimum State
12		contribution for each fiscal year shall be the amount needed to
13		maintain the total assets of the System at 90% of the total
14		actuarial liabilities of the System.
15		Amounts received by the System pursuant to Section 25 of
16		the Budget Stabilization Act or Section 8.12 of the State
17		Finance Act in any fiscal year do not reduce and do not
18		constitute payment of any portion of the minimum State
19		contribution required under this Article in that fiscal year.
20		Such amounts shall not reduce, and shall not be included in the
21		calculation of, the required State contributions under this
22		Article in any future year until the System has reached a
23		funding ratio of at least 90%. A reference in this Article to
24		the "required State contribution" or any substantially similar
25		term does not include or apply to any amounts payable to the
26		System under Section 25 of the Budget Stabilization Act.

HB4045 Engrossed - 247 - LRB100 12674 RPS 26063 b
1		Notwithstanding any other provision of this Section, the
2		required State contribution for State fiscal year 2005 and for
3		fiscal year 2008 and each fiscal year thereafter, as calculated
4		under this Section and certified under subsection (a-1), shall
5		not exceed an amount equal to (i) the amount of the required
6		State contribution that would have been calculated under this
7		Section for that fiscal year if the System had not received any
8		payments under subsection (d) of Section 7.2 of the General
9		Obligation Bond Act, minus (ii) the portion of the State's
10		total debt service payments for that fiscal year on the bonds
11		issued in fiscal year 2003 for the purposes of that Section
12		7.2, as determined and certified by the Comptroller, that is
13		the same as the System's portion of the total moneys
14		distributed under subsection (d) of Section 7.2 of the General
15		Obligation Bond Act. In determining this maximum for State
16		fiscal years 2008 through 2010, however, the amount referred to
17		in item (i) shall be increased, as a percentage of the
18		applicable employee payroll, in equal increments calculated
19		from the sum of the required State contribution for State
20		fiscal year 2007 plus the applicable portion of the State's
21		total debt service payments for fiscal year 2007 on the bonds
22		issued in fiscal year 2003 for the purposes of Section 7.2 of
23		the General Obligation Bond Act, so that, by State fiscal year
24		2011, the State is contributing at the rate otherwise required
25		under this Section.
26		(b-4) For employees first hired on or after 6 months after

HB4045 Engrossed - 248 - LRB100 12674 RPS 26063 b
1		the effective date of this amendatory Act of the 100th General
2		Assembly who have elected the benefits under Section 1-161 of
3		this Code, the employer shall annually contribute an amount,
4		expressed as a percentage of payroll, equal to the defined
5		benefit normal cost of the defined benefit plan, less the
6		employee contribution, plus 2%. On an annual basis, the System
7		shall certify to each employer the amount of unfunded liability
8		accrued in the employer's account to be paid by the employer so
9		that the System is 90% funded by the end of State fiscal year
10		2045. The contributions shall be divided equally over a
11		12-month period and made monthly. The employer shall also
12		contribute an amount equal to the employer defined
13		contribution, as set on an individual employee basis, under
14		paragraph (2) of subsection (k) of Section 1-161 during each
15		pay period. The System shall have the authority to adopt rules
16		regarding implementation of employer contributions.
17		(c) Payment of the required State contributions and of all
18		pensions, retirement annuities, death benefits, refunds, and
19		other benefits granted under or assumed by this System, and all
20		expenses in connection with the administration and operation
21		thereof, are obligations of the State.
22		If members are paid from special trust or federal funds
23		which are administered by the employing unit, whether school
24		district or other unit, the employing unit shall pay to the
25		System from such funds the full accruing retirement costs based
26		upon that service, which, beginning July 1, 2014, shall be at a

HB4045 Engrossed - 249 - LRB100 12674 RPS 26063 b
1		rate, expressed as a percentage of salary, equal to the total
2		minimum contribution to the System to be made by the State for
3		that fiscal year, including both normal cost and unfunded
4		liability components, expressed as a percentage of payroll, as
5		determined by the System under subsection (b-3) of this
6		Section. Employer contributions, based on salary paid to
7		members from federal funds, may be forwarded by the
8		distributing agency of the State of Illinois to the System
9		prior to allocation, in an amount determined in accordance with
10		guidelines established by such agency and the System. Any
11		contribution for fiscal year 2015 collected as a result of the
12		change made by this amendatory Act of the 98th General Assembly
13		shall be considered a State contribution under subsection (b-3)
14		of this Section.
15		(d) Effective July 1, 1986, any employer of a teacher as
16		defined in paragraph (8) of Section 16-106 shall pay the
17		employer's normal cost of benefits based upon the teacher's
18		service, in addition to employee contributions, as determined
19		by the System. Such employer contributions shall be forwarded
20		monthly in accordance with guidelines established by the
21		System.
22		However, with respect to benefits granted under Section
23		16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
24		of Section 16-106, the employer's contribution shall be 12%
25		(rather than 20%) of the member's highest annual salary rate
26		for each year of creditable service granted, and the employer

HB4045 Engrossed - 250 - LRB100 12674 RPS 26063 b
1		shall also pay the required employee contribution on behalf of
2		the teacher. For the purposes of Sections 16-133.4 and
3		16-133.5, a teacher as defined in paragraph (8) of Section
4		16-106 who is serving in that capacity while on leave of
5		absence from another employer under this Article shall not be
6		considered an employee of the employer from which the teacher
7		is on leave.
8		(e) Beginning July 1, 1998, every employer of a teacher
9		shall pay to the System an employer contribution computed as
10		follows:
11		(1) Beginning July 1, 1998 through June 30, 1999, the
12		employer contribution shall be equal to 0.3% of each
13		teacher's salary.
14		(2) Beginning July 1, 1999 and thereafter, the employer
15		contribution shall be equal to 0.58% of each teacher's
16		salary.
17		The school district or other employing unit may pay these
18		employer contributions out of any source of funding available
19		for that purpose and shall forward the contributions to the
20		System on the schedule established for the payment of member
21		contributions.
22		These employer contributions are intended to offset a
23		portion of the cost to the System of the increases in
24		retirement benefits resulting from this amendatory Act of 1998.
25		Each employer of teachers is entitled to a credit against
26		the contributions required under this subsection (e) with

HB4045 Engrossed - 251 - LRB100 12674 RPS 26063 b
1		respect to salaries paid to teachers for the period January 1,
2		2002 through June 30, 2003, equal to the amount paid by that
3		employer under subsection (a-5) of Section 6.6 of the State
4		Employees Group Insurance Act of 1971 with respect to salaries
5		paid to teachers for that period.
6		The additional 1% employee contribution required under
7		Section 16-152 by this amendatory Act of 1998 is the
8		responsibility of the teacher and not the teacher's employer,
9		unless the employer agrees, through collective bargaining or
10		otherwise, to make the contribution on behalf of the teacher.
11		If an employer is required by a contract in effect on May
12		1, 1998 between the employer and an employee organization to
13		pay, on behalf of all its full-time employees covered by this
14		Article, all mandatory employee contributions required under
15		this Article, then the employer shall be excused from paying
16		the employer contribution required under this subsection (e)
17		for the balance of the term of that contract. The employer and
18		the employee organization shall jointly certify to the System
19		the existence of the contractual requirement, in such form as
20		the System may prescribe. This exclusion shall cease upon the
21		termination, extension, or renewal of the contract at any time
22		after May 1, 1998.
23		(f) For school years beginning on or after June 1, 2005 and
24		before July 1, 2018, if If the amount of a teacher's salary for
25		any school year used to determine final average salary exceeds
26		the member's annual full-time salary rate with the same

HB4045 Engrossed - 252 - LRB100 12674 RPS 26063 b
1		employer for the previous school year by more than 6%, the
2		teacher's employer shall pay to the System, in addition to all
3		other payments required under this Section and in accordance
4		with guidelines established by the System, the present value of
5		the increase in benefits resulting from the portion of the
6		increase in salary that is in excess of 6%. This present value
7		shall be computed by the System on the basis of the actuarial
8		assumptions and tables used in the most recent actuarial
9		valuation of the System that is available at the time of the
10		computation. If a teacher's salary for the 2005-2006 school
11		year is used to determine final average salary under this
12		subsection (f), then the changes made to this subsection (f) by
13		Public Act 94-1057 shall apply in calculating whether the
14		increase in his or her salary is in excess of 6%. For the
15		purposes of this Section, change in employment under Section
16		10-21.12 of the School Code on or after June 1, 2005 shall
17		constitute a change in employer. The System may require the
18		employer to provide any pertinent information or
19		documentation. The changes made to this subsection (f) by this
20		amendatory Act of the 94th General Assembly apply without
21		regard to whether the teacher was in service on or after its
22		effective date.
23		Whenever it determines that a payment is or may be required
24		under this subsection, the System shall calculate the amount of
25		the payment and bill the employer for that amount. The bill
26		shall specify the calculations used to determine the amount

HB4045 Engrossed - 253 - LRB100 12674 RPS 26063 b
1		due. If the employer disputes the amount of the bill, it may,
2		within 30 days after receipt of the bill, apply to the System
3		in writing for a recalculation. The application must specify in
4		detail the grounds of the dispute and, if the employer asserts
5		that the calculation is subject to subsection (g) or (h) of
6		this Section, must include an affidavit setting forth and
7		attesting to all facts within the employer's knowledge that are
8		pertinent to the applicability of that subsection. Upon
9		receiving a timely application for recalculation, the System
10		shall review the application and, if appropriate, recalculate
11		the amount due.
12		The employer contributions required under this subsection
13		(f) may be paid in the form of a lump sum within 90 days after
14		receipt of the bill. If the employer contributions are not paid
15		within 90 days after receipt of the bill, then interest will be
16		charged at a rate equal to the System's annual actuarially
17		assumed rate of return on investment compounded annually from
18		the 91st day after receipt of the bill. Payments must be
19		concluded within 3 years after the employer's receipt of the
20		bill.
21		(f-1) For school years beginning on or after July 1, 2018,
22		if the amount of a teacher's salary for any school year used to
23		determine final average salary exceeds the member's annual
24		full-time salary rate with the same employer for the previous
25		school year by more than the unadjusted percentage increase in
26		the consumer price index-u for the calendar year immediately

HB4045 Engrossed - 254 - LRB100 12674 RPS 26063 b
1		preceding the beginning of the school year, published by the
2		Public Pension Division of the Department of Insurance by
3		November 1 of each year, then the teacher's employer shall pay
4		to the System, in addition to all other payments required under
5		this Section and in accordance with guidelines established by
6		the System, the present value of the increase in benefits
7		resulting from the portion of the increase in salary that is in
8		excess of the unadjusted percentage increase in the consumer
9		price index-u for the applicable calendar year. This present
10		value shall be computed by the System on the basis of the
11		actuarial assumptions and tables used in the most recent
12		actuarial valuation of the System that is available at the time
13		of the computation. The System may require the employer to
14		provide any pertinent information or documentation.
15		Whenever it determines that a payment is or may be required
16		under this subsection (f-1), the System shall calculate the
17		amount of the payment and bill the employer for that amount.
18		The bill shall specify the calculations used to determine the
19		amount due. If the employer disputes the amount of the bill, it
20		may, within 30 days after receipt of the bill, apply to the
21		System in writing for a recalculation. The application must
22		specify in detail the grounds of the dispute and, if the
23		employer asserts that the calculation is subject to subsection
24		(h-1) of this Section, must include an affidavit setting forth
25		and attesting to all facts within the employer's knowledge that
26		are pertinent to the applicability of subsection (h-1). Upon

HB4045 Engrossed - 255 - LRB100 12674 RPS 26063 b
1		receiving a timely application for recalculation, the System
2		shall review the application and, if appropriate, recalculate
3		the amount due.
4		The employer contributions required under this subsection
5		(f-1) may be paid in the form of a lump sum within 90 days after
6		receipt of the bill. If the employer contributions are not paid
7		within 90 days after receipt of the bill, then interest shall
8		be charged at a rate equal to the System's annual actuarially
9		assumed rate of return on investment compounded annually from
10		the 91st day after receipt of the bill. Payments must be
11		concluded within 3 years after the employer's receipt of the
12		bill.
13		For the purposes of this Section, "consumer price index-u"
14		means the index published by the Bureau of Labor Statistics of
15		the United States Department of Labor that measures the average
16		change in prices of goods and services purchased by all urban
17		consumers, United States city average, all items, 1982-84 =
18		100. The new amount resulting from each annual adjustment shall
19		be determined by the Public Pension Division of the Department
20		of Insurance and made available to the boards of the retirement
21		systems and pension funds by November 1 of each year.
22		(g) This subsection (g) applies only to payments made or
23		salary increases given on or after June 1, 2005 but before July
24		1, 2011. The changes made by Public Act 94-1057 shall not
25		require the System to refund any payments received before July
26		31, 2006 (the effective date of Public Act 94-1057).

HB4045 Engrossed - 256 - LRB100 12674 RPS 26063 b
1		When assessing payment for any amount due under subsection
2		(f), the System shall exclude salary increases paid to teachers
3		under contracts or collective bargaining agreements entered
4		into, amended, or renewed before June 1, 2005.
5		When assessing payment for any amount due under subsection
6		(f), the System shall exclude salary increases paid to a
7		teacher at a time when the teacher is 10 or more years from
8		retirement eligibility under Section 16-132 or 16-133.2.
9		When assessing payment for any amount due under subsection
10		(f), the System shall exclude salary increases resulting from
11		overload work, including summer school, when the school
12		district has certified to the System, and the System has
13		approved the certification, that (i) the overload work is for
14		the sole purpose of classroom instruction in excess of the
15		standard number of classes for a full-time teacher in a school
16		district during a school year and (ii) the salary increases are
17		equal to or less than the rate of pay for classroom instruction
18		computed on the teacher's current salary and work schedule.
19		When assessing payment for any amount due under subsection
20		(f), the System shall exclude a salary increase resulting from
21		a promotion (i) for which the employee is required to hold a
22		certificate or supervisory endorsement issued by the State
23		Teacher Certification Board that is a different certification
24		or supervisory endorsement than is required for the teacher's
25		previous position and (ii) to a position that has existed and
26		been filled by a member for no less than one complete academic

HB4045 Engrossed - 257 - LRB100 12674 RPS 26063 b
1		year and the salary increase from the promotion is an increase
2		that results in an amount no greater than the lesser of the
3		average salary paid for other similar positions in the district
4		requiring the same certification or the amount stipulated in
5		the collective bargaining agreement for a similar position
6		requiring the same certification.
7		When assessing payment for any amount due under subsection
8		(f), the System shall exclude any payment to the teacher from
9		the State of Illinois or the State Board of Education over
10		which the employer does not have discretion, notwithstanding
11		that the payment is included in the computation of final
12		average salary.
13		(h) When assessing payment for any amount due under
14		subsection (f), the System shall exclude any salary increase
15		described in subsection (g) of this Section given on or after
16		July 1, 2011 but before July 1, 2014 under a contract or
17		collective bargaining agreement entered into, amended, or
18		renewed on or after June 1, 2005 but before July 1, 2011.
19		Notwithstanding any other provision of this Section, any
20		payments made or salary increases given after June 30, 2014
21		shall be used in assessing payment for any amount due under
22		subsection (f) of this Section.
23		(h-1) When assessing payment for any amount due under
24		subsection (f-1), the System shall exclude earnings increases
25		paid to participants under contracts or collective bargaining
26		agreements entered into, amended, or renewed before the

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1		effective date of this amendatory Act of the 100th General
2		Assembly.
3		(i) The System shall prepare a report and file copies of
4		the report with the Governor and the General Assembly by
5		January 1, 2007 that contains all of the following information:
6		(1) The number of recalculations required by the
7		changes made to this Section by Public Act 94-1057 for each
8		employer.
9		(2) The dollar amount by which each employer's
10		contribution to the System was changed due to
11		recalculations required by Public Act 94-1057.
12		(3) The total amount the System received from each
13		employer as a result of the changes made to this Section by
14		Public Act 94-4.
15		(4) The increase in the required State contribution
16		resulting from the changes made to this Section by Public
17		Act 94-1057.
18		(i-5) For school years beginning on or after July 1, 2018,
19		if the amount of a participant's salary for any school year,
20		determined on a full-time equivalent basis, exceeds $140,000,
21		the participant's employer shall pay to the System, in addition
22		to all other payments required under this Section and in
23		accordance with guidelines established by the System, the
24		amount of earnings that exceed $140,000 multiplied by the level
25		percentage of payroll used in that fiscal year as determined by
26		the System to be sufficient to bring the total assets of the

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1		System up to 90% of the total actuarial liabilities of the
2		System by the end of State fiscal year 2045. This amount shall
3		be computed by the System on the basis of the actuarial
4		assumptions and tables used in the most recent actuarial
5		valuation of the System that is available at the time of the
6		computation. The System may require the employer to provide any
7		pertinent information or documentation.
8		Whenever it determines that a payment is or may be required
9		under this subsection, the System shall calculate the amount of
10		the payment and bill the employer for that amount. The bill
11		shall specify the calculations used to determine the amount
12		due. If the employer disputes the amount of the bill, it may,
13		within 30 days after receipt of the bill, apply to the System
14		in writing for a recalculation. The application must specify in
15		detail the grounds of the dispute. Upon receiving a timely
16		application for recalculation, the System shall review the
17		application and, if appropriate, recalculate the amount due.
18		The employer contributions required under this subsection
19		may be paid in the form of a lump sum within 90 days after
20		receipt of the bill. If the employer contributions are not paid
21		within 90 days after receipt of the bill, then interest will be
22		charged at a rate equal to the System's annual actuarially
23		assumed rate of return on investment compounded annually from
24		the 91st day after receipt of the bill. Payments must be
25		concluded within 3 years after the employer's receipt of the
26		bill.

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1		(j) For purposes of determining the required State
2		contribution to the System, the value of the System's assets
3		shall be equal to the actuarial value of the System's assets,
4		which shall be calculated as follows:
5		As of June 30, 2008, the actuarial value of the System's
6		assets shall be equal to the market value of the assets as of
7		that date. In determining the actuarial value of the System's
8		assets for fiscal years after June 30, 2008, any actuarial
9		gains or losses from investment return incurred in a fiscal
10		year shall be recognized in equal annual amounts over the
11		5-year period following that fiscal year.
12		(k) For purposes of determining the required State
13		contribution to the system for a particular year, the actuarial
14		value of assets shall be assumed to earn a rate of return equal
15		to the system's actuarially assumed rate of return.
16		(l) If Section 16-122.9 is determined to be
17		unconstitutional or otherwise invalid by a final unappealable
18		decision of an Illinois court or a court of competent
19		jurisdiction, then the changes made to this Section by this
20		amendatory Act of the 100th General Assembly shall not take
21		effect and are repealed by operation of law.
22		(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
23		96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
24		6-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
25		(40 ILCS 5/16-190.5 new)

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1		Sec. 16-190.5. Accelerated pension benefit payment.
2		(a) As used in this Section:
3		"Eligible person" means a person who:
4		(1) has terminated service;
5		(2) has accrued sufficient service credit to be
6		eligible to receive a retirement annuity under this
7		Article;
8		(3) has not received any retirement annuity under this
9		Article; and
10		(4) does not have a QILDRO in effect against him or her
11		under this Article.
12		"Pension benefit" means the benefits under this Article, or
13		Article 1 as it relates to those benefits, including any
14		anticipated annual increases, that an eligible person is
15		entitled to upon attainment of the applicable retirement age.
16		"Pension benefit" also includes applicable survivor's or
17		disability benefits.
18		(b) Before January 1, 2018, and annually thereafter, the
19		System shall calculate, using actuarial tables and other
20		assumptions adopted by the Board, the net present value of
21		pension benefits for each eligible person and shall offer each
22		eligible person the opportunity to irrevocably elect to receive
23		an amount determined by the System to be equal to 70% of the
24		net present value of his or her pension benefits in lieu of
25		receiving any pension benefit. The offer shall specify the
26		dollar amount that the eligible person will receive if he or

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1		she so elects and shall expire when a subsequent offer is made
2		to an eligible person or when the System determines that 10% of
3		eligible persons in that year have made the election under this
4		subsection, whichever occurs first. The System shall make a
5		good faith effort to contact every eligible person to notify
6		him or her of the election and of the amount of the accelerated
7		pension benefit payment.
8		Until the System determines that 10% of eligible persons in
9		that year have made the election under this subsection, an
10		eligible person may irrevocably elect to receive an accelerated
11		pension benefit payment in the amount that the System offers
12		under this subsection in lieu of receiving any pension benefit.
13		A person who elects to receive an accelerated pension benefit
14		payment under this Section may not elect to proceed under the
15		Retirement Systems Reciprocal Act with respect to service under
16		this Article.
17		(c) A person's credits and creditable service under this
18		Article shall be terminated upon the person's receipt of an
19		accelerated pension benefit payment under this Section, and no
20		other benefit shall be paid under this Article based on those
21		terminated credits and creditable service, including any
22		retirement, survivor, or other benefit; except that to the
23		extent that participation, benefits, or premiums under the
24		State Employees Group Insurance Act of 1971 are based on the
25		amount of service credit, the terminated service credit shall
26		be used for that purpose.

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1		(d) If a person who has received an accelerated pension
2		benefit payment under this Section returns to active service
3		under this Article, then:
4		(1) Any benefits under the System earned as a result of
5		that return to active service shall be based solely on the
6		person's credits and creditable service arising from the
7		return to active service.
8		(2) The accelerated pension benefit payment may not be
9		repaid to the System, and the terminated credits and
10		creditable service may not under any circumstances be
11		reinstated.
12		(e) As a condition of receiving an accelerated pension
13		benefit payment, an eligible person must have another
14		retirement plan or account qualified under the Internal Revenue
15		Code of 1986, as amended, for the accelerated pension benefit
16		payment to be rolled into. The accelerated pension benefit
17		payment under this Section may be subject to withholding or
18		payment of applicable taxes, but to the extent permitted by
19		federal law, a person who receives an accelerated pension
20		benefit payment under this Section must direct the System to
21		pay all of that payment as a rollover into another retirement
22		plan or account qualified under the Internal Revenue Code of
23		1986, as amended.
24		(f) Before January 1, 2019 and every January 1 thereafter,
25		the Board shall certify to the Illinois Finance Authority and
26		the General Assembly the amount by which the total amount of

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1		accelerated pension benefit payments made under this Section
2		exceed the amount appropriated to the System for the purpose of
3		making those payments.
4		(g) The Board shall adopt any rules necessary to implement
5		this Section.
6		(h) No provision of this Section shall be interpreted in a
7		way that would cause the applicable System to cease to be a
8		qualified plan under the Internal Revenue Code of 1986.
9		(i) Notwithstanding any other provision of this Section, in
10		no case shall the total amount of accelerated pension benefit
11		payments paid under this Section, Section 14-147.5, and Section
12		15-185.5, and Section 16-190.5 cause the Illinois Finance
13		Authority to issue more than the $250,000,000 of State Pension
14		Obligation Acceleration Bonds authorized in subsection (c-5)
15		of Section 801-40 of the Illinois Finance Authority Act.
16		(40 ILCS 5/16-203)
17		(Text of Section WITHOUT the changes made by P.A. 98-599,
18		which has been held unconstitutional)
19		Sec. 16-203. Application and expiration of new benefit
20		increases.
21		(a) As used in this Section, "new benefit increase" means
22		an increase in the amount of any benefit provided under this
23		Article, or an expansion of the conditions of eligibility for
24		any benefit under this Article, that results from an amendment
25		to this Code that takes effect after June 1, 2005 (the

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1		effective date of Public Act 94-4). "New benefit increase",
2		however, does not include any benefit increase resulting from
3		the changes made to this Article by Public Act 95-910 or this
4		amendatory Act of the 100th General Assembly this amendatory
5		Act of the 95th General Assembly.
6		(b) Notwithstanding any other provision of this Code or any
7		subsequent amendment to this Code, every new benefit increase
8		is subject to this Section and shall be deemed to be granted
9		only in conformance with and contingent upon compliance with
10		the provisions of this Section.
11		(c) The Public Act enacting a new benefit increase must
12		identify and provide for payment to the System of additional
13		funding at least sufficient to fund the resulting annual
14		increase in cost to the System as it accrues.
15		Every new benefit increase is contingent upon the General
16		Assembly providing the additional funding required under this
17		subsection. The Commission on Government Forecasting and
18		Accountability shall analyze whether adequate additional
19		funding has been provided for the new benefit increase and
20		shall report its analysis to the Public Pension Division of the
21		Department of Insurance Financial and Professional Regulation.
22		A new benefit increase created by a Public Act that does not
23		include the additional funding required under this subsection
24		is null and void. If the Public Pension Division determines
25		that the additional funding provided for a new benefit increase
26		under this subsection is or has become inadequate, it may so

HB4045 Engrossed - 266 - LRB100 12674 RPS 26063 b
1		certify to the Governor and the State Comptroller and, in the
2		absence of corrective action by the General Assembly, the new
3		benefit increase shall expire at the end of the fiscal year in
4		which the certification is made.
5		(d) Every new benefit increase shall expire 5 years after
6		its effective date or on such earlier date as may be specified
7		in the language enacting the new benefit increase or provided
8		under subsection (c). This does not prevent the General
9		Assembly from extending or re-creating a new benefit increase
10		by law.
11		(e) Except as otherwise provided in the language creating
12		the new benefit increase, a new benefit increase that expires
13		under this Section continues to apply to persons who applied
14		and qualified for the affected benefit while the new benefit
15		increase was in effect and to the affected beneficiaries and
16		alternate payees of such persons, but does not apply to any
17		other person, including without limitation a person who
18		continues in service after the expiration date and did not
19		apply and qualify for the affected benefit while the new
20		benefit increase was in effect.
21		(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
22		(40 ILCS 5/16-205.1 new)
23		Sec. 16-205.1. Defined contribution plan.
24		(a) By July 1, 2018, the System shall prepare and implement
25		a voluntary defined contribution plan for up to 5% of eligible

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1		active Tier 1 employees. The System shall determine the 5% cap
2		by the number of active Tier 1 employees on the effective date
3		of this Section. The defined contribution plan developed under
4		this Section shall be a plan that aggregates employer and
5		employee contributions in individual participant accounts
6		which, after meeting any other requirements, are used for
7		payouts after retirement in accordance with this Section and
8		any other applicable laws.
9		As used in this Section, "defined benefit plan" means the
10		retirement plan available under this Article to Tier 1
11		employees who have not made the election authorized under this
12		Section.
13		(1) Under the defined contribution plan, an active Tier
14		1 employee of this System could elect to cease accruing
15		benefits in the defined benefit plan under this Article and
16		begin accruing benefits for future service in the defined
17		contribution plan. Service credit under the defined
18		contribution plan may be used for determining retirement
19		eligibility under the defined benefit plan. An active Tier
20		1 employee who elects to cease accruing benefits in his or
21		her defined benefit plan shall be prohibited from
22		purchasing service credit on or after the date of his or
23		her election. A Tier 1 employee making the irrevocable
24		election provided under this Section shall not receive
25		interest accruals to his or her benefit under paragraph (A)
26		of subsection (a) of Section 16-133 on or after the date of

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1		his or her election.
2		(2) Participants in the defined contribution plan
3		shall pay employee contributions at the same rate as Tier 1
4		employees in this System who do not participate in the
5		defined contribution plan.
6		(3) State contributions shall be paid into the accounts
7		of all participants in the defined contribution plan at a
8		uniform rate, expressed as a percentage of salary and
9		determined for each year. This rate shall be no higher than
10		the employer's normal cost for Tier 1 employees in the
11		defined benefit plan for that year, as determined by the
12		System and expressed as a percentage of salary, and shall
13		be no lower than 0% of salary. The State shall adjust this
14		rate annually.
15		(4) The defined contribution plan shall require 5 years
16		of participation in the defined contribution plan before
17		vesting in State contributions. If the participant fails to
18		vest in them, the State contributions, and the earnings
19		thereon, shall be forfeited.
20		(5) The defined contribution plan may provide for
21		participants in the plan to be eligible for the defined
22		disability benefits available to other participants under
23		this Article. If it does, the System shall reduce the
24		employee contributions credited to the member's defined
25		contribution plan account by an amount determined by the
26		System to cover the cost of offering such benefits.

HB4045 Engrossed - 269 - LRB100 12674 RPS 26063 b
1		(6) The defined contribution plan shall provide a
2		variety of options for investments. These options shall
3		include investments in a fund created by the System and
4		managed in accordance with legal and fiduciary standards,
5		as well as investment options otherwise available.
6		(7) The defined contribution plan shall provide a
7		variety of options for payouts to retirees and their
8		survivors.
9		(8) To the extent authorized under federal law and as
10		authorized by the System, the plan shall allow former
11		participants in the plan to transfer or roll over employee
12		and vested State contributions, and the earnings thereon,
13		into other qualified retirement plans.
14		(9) The System shall reduce the employee contributions
15		credited to the member's defined contribution plan account
16		by an amount determined by the System to cover the cost of
17		offering these benefits and any applicable administrative
18		fees.
19		(b) Only persons who are active Tier 1 employees of the
20		System on the effective date of this Section are eligible to
21		participate in the defined contribution plan. Participation in
22		the defined contribution plan shall be limited to the first 5%
23		of eligible persons who elect to participate. The election to
24		participate in the defined contribution plan is voluntary and
25		irrevocable.
26		(c) An eligible Tier 1 employee may irrevocably elect to

HB4045 Engrossed - 270 - LRB100 12674 RPS 26063 b
1		participate in the defined contribution plan by filing with the
2		System a written application to participate that is received by
3		the System prior to its determination that 5% of eligible
4		persons have elected to participate in the defined contribution
5		plan.
6		When the System first determines that 5% of eligible
7		persons have elected to participate in the defined contribution
8		plan, the System shall provide notice to previously eligible
9		employees that the plan is no longer available and shall cease
10		accepting applications to participate.
11		(d) The System shall make a good faith effort to contact
12		each active Tier 1 employee who is eligible to participate in
13		the defined contribution plan. The System shall mail
14		information describing the option to join the defined
15		contribution plan to each of these employees to his or her last
16		known address on file with the System. If the employee is not
17		responsive to other means of contact, it is sufficient for the
18		System to publish the details of the option on its website.
19		Upon request for further information describing the
20		option, the System shall provide employees with information
21		from the System before exercising the option to join the plan,
22		including information on the impact to their vested benefits or
23		non-vested service. The individual consultation shall include
24		projections of the member's defined benefits at retirement or
25		earlier termination of service and the value of the member's
26		account at retirement or earlier termination of service. The

HB4045 Engrossed - 271 - LRB100 12674 RPS 26063 b
1		System shall not provide advice or counseling with respect to
2		whether the employee should exercise the option. The System
3		shall inform Tier 1 employees who are eligible to participate
4		in the defined contribution plan that they may also wish to
5		obtain information and counsel relating to their option from
6		any other available source, including but not limited to labor
7		organizations, private counsel, and financial advisors.
8		(e) In no event shall the System, its staff, its authorized
9		representatives, or the Board be liable for any information
10		given to an employee under this Section. The System may
11		coordinate with the Illinois Department of Central Management
12		Services and other retirement systems administering a defined
13		contribution plan in accordance with this amendatory Act of the
14		100th General Assembly to provide information concerning the
15		impact of the option set forth in this Section.
16		(f) Notwithstanding any other provision of this Section, no
17		person shall begin participating in the defined contribution
18		plan until it has attained qualified plan status and received
19		all necessary approvals from the U.S. Internal Revenue Service.
20		(g) The System shall report on its progress under this
21		Section, including the available details of the defined
22		contribution plan and the System's plans for informing eligible
23		Tier 1 employees about the plan, to the Governor and the
24		General Assembly on or before January 15, 2018.
25		(h) The intent of this amendatory Act of the 100th General
26		Assembly is to ensure that the State's normal cost of

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1		participation in the defined contribution plan is similar, and
2		if possible equal, to the State's normal cost of participation
3		in the defined benefit plan, unless a lower State's normal cost
4		is necessary to ensure cost neutrality.
5		(40 ILCS 5/16-206.1 new)
6		Sec. 16-206.1. Defined contribution plan; termination. If
7		the defined contribution plan is terminated or becomes
8		inoperative pursuant to law, then each participant in the plan
9		shall automatically be deemed to have been a contributing Tier
10		1 employee in the System's defined benefit plan during the time
11		in which he or she participated in the defined contribution
12		plan, and for that purpose the System shall be entitled to
13		recover the amounts in the participant's defined contribution
14		accounts.
15		(40 ILCS 5/17-106.05 new)
16		Sec. 17-106.05. Tier 1 employee. "Tier 1 employee": A
17		teacher under this Article who first became a member or
18		participant before January 1, 2011 under any reciprocal
19		retirement system or pension fund established under this Code
20		other than a retirement system or pension fund established
21		under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
22		the purposes of the election under Section 17-115.5, "Tier 1
23		employee" does not include a teacher under this Article who
24		would qualify as a Tier 1 employee but who has made an

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1		irrevocable election on or before June 1, 2017 to retire from
2		service pursuant to the terms of an employment contract or a
3		collective bargaining agreement in effect on June 1, 2017,
4		excluding any extension, amendment, or renewal of that
5		agreement after that date, and has notified the Fund of that
6		election.
7		(40 ILCS 5/17-113.4 new)
8		Sec. 17-113.4. Salary. "Salary" means any income in any
9		form that qualifies as "average salary" or "annual rate of
10		salary" for purposes of paragraph (1) of subsection (c) of
11		Section 17-116 and "salary" for payroll deduction purposes
12		under Sections 17-130, 17-131, and 17-132.
13		Notwithstanding any other provision of this Section,
14		"salary" does not include any future increase in income that is
15		offered by an employer for service as a Tier 1 employee under
16		this Article pursuant to the condition set forth in subsection
17		(c) of Section 17-115.5 and accepted under that condition by a
18		Tier 1 employee who has made the election under paragraph (2)
19		of subsection (a) of Section 17-115.5.
20		(40 ILCS 5/17-113.5 new)
21		Sec. 17-113.5. Future increase in income. "Future increase
22		in income" means an increase to a Tier 1 employee's base pay
23		that is offered by an employer to the Tier 1 employee for
24		service under this Article after June 30, 2018 that qualifies

HB4045 Engrossed - 274 - LRB100 12674 RPS 26063 b
1		as "salary", as defined in Section 17-113.4, or would qualify
2		as "salary" but for the fact that it was offered to and
3		accepted by the Tier 1 employee under the condition set forth
4		in subsection (c) of Section 17-115.5. The term "future
5		increase in income" includes an increase to a Tier 1 employee's
6		base pay that is paid to the Tier 1 employee pursuant to an
7		extension, amendment, or renewal of any employment contract or
8		collective bargaining agreement after the effective date of
9		this Section.
10		(40 ILCS 5/17-113.6 new)
11		Sec. 17-113.6. Base pay. As used in Section 17-113.5 of
12		this Code, "base pay" means the greater of either (i) the Tier
13		1 employee's annualized rate of salary as of June 30, 2018, or
14		(ii) the Tier 1 employee's annualized rate of salary
15		immediately preceding the expiration, renewal, or amendment of
16		an employment contract or collective bargaining agreement in
17		effect on the effective date of this Section. For a person
18		returning to active service as a Tier 1 employee after June 30,
19		2018, however, "base pay" means the employee's annualized rate
20		of salary as of the employee's last date of service prior to
21		July 1, 2018. The Fund shall calculate the base pay of each
22		Tier 1 employee pursuant to this Section.
23		(40 ILCS 5/17-115.5 new)
24		Sec. 17-115.5. Election by Tier 1 employees.

HB4045 Engrossed - 275 - LRB100 12674 RPS 26063 b
1		(a) Each active Tier 1 employee shall make an irrevocable
2		election either:
3		(1) to agree to delay his or her eligibility for
4		automatic annual increases in service retirement pension
5		as provided in Section 17-119.2 and to have the amount of
6		the automatic annual increases in his or her service
7		retirement pension and survivor's pension that are
8		otherwise provided for in this Article calculated,
9		instead, as provided in Section 17-119.2; or
10		(2) to not agree to paragraph (1) of this subsection.
11		The election required under this subsection (a) shall be
12		made by each active Tier 1 employee no earlier than January 1,
13		2018 and no later than March 31, 2018, except that:
14		(i) a person who becomes a Tier 1 employee under this
15		Article on or after January 1, 2018 must make the election
16		under this subsection (a) within 60 days after becoming a
17		Tier 1 employee; and
18		(ii) a person who returns to active service as a Tier 1
19		employee under this Article on or after January 1, 2018 and
20		has not yet made an election under this Section must make
21		the election under this subsection (a) within 60 days after
22		returning to active service as a Tier 1 employee.
23		If a Tier 1 employee fails for any reason to make a
24		required election under this subsection within the time
25		specified, then the employee shall be deemed to have made the
26		election under paragraph (2) of this subsection.

HB4045 Engrossed - 276 - LRB100 12674 RPS 26063 b
1		(a-5) If this Section is enjoined or stayed by an Illinois
2		court or a court of competent jurisdiction pending the entry of
3		a final and unappealable decision, and this Section is
4		determined to be constitutional or otherwise valid by a final
5		unappealable decision of an Illinois court or a court of
6		competent jurisdiction, then the election procedure set forth
7		in subsection (a) of this Section shall commence on the 180th
8		calendar day after the date of the issuance of the final
9		unappealable decision and shall conclude at the end of the
10		270th calendar day after that date.
11		(a-10) All elections under subsection (a) that are made or
12		deemed to be made before July 1, 2018 shall take effect on July
13		1, 2018. Elections that are made or deemed to be made on or
14		after July 1, 2018 shall take effect on the first day of the
15		month following the month in which the election is made or
16		deemed to be made.
17		(b) As adequate and legal consideration provided under this
18		amendatory Act of the 100th General Assembly for making an
19		election under paragraph (1) of subsection (a) of this Section,
20		an employer shall be expressly and irrevocably prohibited from
21		offering any future increases in income to a Tier 1 employee
22		who has made an election under paragraph (1) of subsection (a)
23		of this Section on the condition of not constituting salary
24		under Section 17-113.4.
25		As adequate and legal consideration provided under this
26		amendatory Act of the 100th General Assembly for making an

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1		election under paragraph (1) of subsection (a) of this Section,
2		each Tier 1 employee who has made an election under paragraph
3		(1) of subsection (a) of this Section shall receive a
4		consideration payment equal to 10% of the contributions made by
5		or on behalf of the employee under Section 17-130 before the
6		effective date of that election. The State Comptroller shall
7		pay the consideration payment to the Tier 1 employee out of
8		funds appropriated for that purpose under Section 1.9 of the
9		State Pension Funds Continuing Appropriation Act. The Fund
10		shall calculate the amount of each consideration payment and,
11		by July 1, 2018, shall certify to the State Comptroller the
12		amount of the consideration payment, together with the name,
13		address, and any other available payment information of the
14		Tier 1 employee as found in the records of the Fund. The Fund
15		shall make additional calculations and certifications of
16		consideration payments to the State Comptroller as the Fund
17		deems necessary.
18		(c) A Tier 1 employee who makes the election under
19		paragraph (2) of subsection (a) of this Section shall not be
20		subject to paragraph (1) of subsection (a) of this Section.
21		However, each future increase in income offered by an employer
22		under this Article to a Tier 1 employee who has made the
23		election under paragraph (2) of subsection (a) of this Section
24		shall be offered by the employer expressly and irrevocably on
25		the condition of not constituting salary under Section 17-113.4
26		and that the Tier 1 employee's acceptance of the offered future

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1		increase in income shall constitute his or her agreement to
2		that condition.
3		(d) The Fund shall make a good faith effort to contact each
4		Tier 1 employee subject to this Section. The Fund shall mail
5		information describing the required election to each Tier 1
6		employee by United States Postal Service mail to his or her
7		last known address on file with the Fund. If the Tier 1
8		employee is not responsive to other means of contact, it is
9		sufficient for the Fund to publish the details of any required
10		elections on its website or to publish those details in a
11		regularly published newsletter or other existing public forum.
12		Tier 1 employees who are subject to this Section shall be
13		provided with an election packet containing information
14		regarding their options, as well as the forms necessary to make
15		the required election. Upon request, the Fund shall offer Tier
16		1 employees an opportunity to receive information from the Fund
17		before making the required election. The information may
18		consist of video materials, group presentations, individual
19		consultation with a member or authorized representative of the
20		Fund in person or by telephone or other electronic means, or
21		any combination of those methods. The Fund shall not provide
22		advice or counseling with respect to which election a Tier 1
23		employee should make or specific to the legal or tax
24		circumstances of or consequences to the Tier 1 employee.
25		The Fund shall inform Tier 1 employees in the election
26		packet required under this subsection that the Tier 1 employee

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1		may also wish to obtain information and counsel relating to the
2		election required under this Section from any other available
3		source, including, but not limited to, labor organizations and
4		private counsel.
5		In no event shall the Fund, its staff, or the Board be held
6		liable for any information given to a member regarding the
7		elections under this Section. The Fund shall coordinate with
8		the Illinois Department of Central Management Services and each
9		other retirement system administering an election in
10		accordance with this amendatory Act of the 100th General
11		Assembly to provide information concerning the impact of the
12		election set forth in this Section.
13		(e) Notwithstanding any other provision of law, an employer
14		under this Article is required to offer each future increase in
15		income expressly and irrevocably on the condition of not
16		constituting "salary" under Section 17-113.4 to any Tier 1
17		employee who has made an election under paragraph (2) of
18		subsection (a) of this Section. The offer shall also provide
19		that the Tier 1 employee's acceptance of the offered future
20		increase in income shall constitute his or her agreement to the
21		condition set forth in this subsection.
22		For purposes of legislative intent, the condition set forth
23		in this subsection shall be construed in a manner that ensures
24		that the condition is not violated or circumvented through any
25		contrivance of any kind.
26		(f) A member's election under this Section is not a

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1		prohibited election under subdivision (j)(1) of Section 1-119
2		of this Code.
3		(g) No provision of this Section shall be interpreted in a
4		way that would cause the Fund to cease to be a qualified plan
5		under Section 401(a) of the Internal Revenue Code of 1986.
6		(h) If an election created by this amendatory Act in any
7		other Article of this Code or any change deriving from that
8		election is determined to be unconstitutional or otherwise
9		invalid by a final unappealable decision of an Illinois court
10		or a court of competent jurisdiction, the invalidity of that
11		provision shall not in any way affect the validity of this
12		Section or the changes deriving from the election required
13		under this Section.
14		(40 ILCS 5/17-116) (from Ch. 108 1/2, par. 17-116)
15		Sec. 17-116. Service retirement pension.
16		(a) Each teacher having 20 years of service upon attainment
17		of age 55, or who thereafter attains age 55 shall be entitled
18		to a service retirement pension upon or after attainment of age
19		55; and each teacher in service on or after July 1, 1971, with
20		5 or more but less than 20 years of service shall be entitled
21		to receive a service retirement pension upon or after
22		attainment of age 62.
23		(b) The service retirement pension for a teacher who
24		retires on or after June 25, 1971, at age 60 or over, shall be
25		calculated as follows:

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1		(1) For creditable service earned before July 1, 1998
2		that has not been augmented under Section 17-119.1: 1.67%
3		for each of the first 10 years of service; 1.90% for each
4		of the next 10 years of service; 2.10% for each year of
5		service in excess of 20 but not exceeding 30; and 2.30% for
6		each year of service in excess of 30, based upon average
7		salary as herein defined.
8		(2) For creditable service earned on or after July 1,
9		1998 by a member who has at least 30 years of creditable
10		service on July 1, 1998 and who does not elect to augment
11		service under Section 17-119.1: 2.3% of average salary for
12		each year of creditable service earned on or after July 1,
13		1998.
14		(3) For all other creditable service: 2.2% of average
15		salary for each year of creditable service.
16		(c) When computing such service retirement pensions, the
17		following conditions shall apply:
18		1. Average salary shall consist of the average annual
19		rate of salary for the 4 consecutive years of validated
20		service within the last 10 years of service when such
21		average annual rate was highest. In the determination of
22		average salary for retirement allowance purposes, for
23		members who commenced employment after August 31, 1979,
24		that part of the salary for any year shall be excluded
25		which exceeds the annual full-time salary rate for the
26		preceding year by more than 20%. In the case of a member

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1		who commenced employment before August 31, 1979 and who
2		receives salary during any year after September 1, 1983
3		which exceeds the annual full time salary rate for the
4		preceding year by more than 20%, an Employer and other
5		employers of eligible contributors as defined in Section
6		17-106 shall pay to the Fund an amount equal to the present
7		value of the additional service retirement pension
8		resulting from such excess salary. The present value of the
9		additional service retirement pension shall be computed by
10		the Board on the basis of actuarial tables adopted by the
11		Board. If a member elects to receive a pension from this
12		Fund provided by Section 20-121, his salary under the State
13		Universities Retirement System and the Teachers'
14		Retirement System of the State of Illinois shall be
15		considered in determining such average salary. Amounts
16		paid after the effective date of this amendatory Act of
17		1991 for unused vacation time earned after that effective
18		date shall not under any circumstances be included in the
19		calculation of average salary or the annual rate of salary
20		for the purposes of this Article.
21		2. Proportionate credit shall be given for validated
22		service of less than one year.
23		3. For retirement at age 60 or over the pension shall
24		be payable at the full rate.
25		4. For separation from service below age 60 to a
26		minimum age of 55, the pension shall be discounted at the

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1		rate of 1/2 of one per cent for each month that the age of
2		the contributor is less than 60, but a teacher may elect to
3		defer the effective date of pension in order to eliminate
4		or reduce this discount. This discount shall not be
5		applicable to any participant who has at least 34 years of
6		service or a retirement pension of at least 74.6% of
7		average salary on the date the retirement annuity begins.
8		5. No additional pension shall be granted for service
9		exceeding 45 years. Beginning June 26, 1971 no pension
10		shall exceed the greater of $1,500 per month or 75% of
11		average salary as herein defined.
12		6. Service retirement pensions shall begin on the
13		effective date of resignation, retirement, the day
14		following the close of the payroll period for which service
15		credit was validated, or the time the person resigning or
16		retiring attains age 55, or on a date elected by the
17		teacher, whichever shall be latest; provided that, for a
18		person who first becomes a member after the effective date
19		of this amendatory Act of the 99th General Assembly, the
20		benefit shall not commence more than one year prior to the
21		date of the Fund's receipt of an application for the
22		benefit.
23		7. A member who is eligible to receive a retirement
24		pension of at least 74.6% of average salary and will attain
25		age 55 on or before December 31 during the year which
26		commences on July 1 shall be deemed to attain age 55 on the

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1		preceding June 1.
2		8. A member retiring after the effective date of this
3		amendatory Act of 1998 shall receive a pension equal to 75%
4		of average salary if the member is qualified to receive a
5		retirement pension equal to at least 74.6% of average
6		salary under this Article or as proportional annuities
7		under Article 20 of this Code.
8		(d) Notwithstanding any other provision of this Section,
9		annual salary does not include any future increase in income
10		that is offered for service to a Tier 1 employee under this
11		Article pursuant to the condition set forth in subsection (c)
12		of Section 17-115.5 and accepted under that condition by a Tier
13		1 employee who has made the election under paragraph (2) of
14		subsection (a) of Section 17-115.5.
15		Notwithstanding any other provision of this Section,
16		annual salary does not include any consideration payment made
17		to a Tier 1 employee.
18		(Source: P.A. 99-702, eff. 7-29-16.)
19		(40 ILCS 5/17-119.2 new)
20		Sec. 17-119.2. Automatic annual increases in service
21		retirement pension and survivor's pension for certain Tier 1
22		employees. Notwithstanding any other provision of this
23		Article, for a Tier 1 employee who made the election under
24		paragraph (1) of subsection (a) of Section 17-115.5:
25		(1) The initial increase in service retirement pension

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1		shall occur on the January 1 occurring either on or after
2		the attainment of age 67 or the fifth anniversary of the
3		pension start date, whichever is earlier.
4		(2) The amount of each automatic annual increase in
5		service retirement pension or survivor's pension occurring
6		on or after the effective date of that election shall be
7		calculated as a percentage of the originally granted
8		service retirement pension or survivor's pension, equal to
9		3% or one-half the annual unadjusted percentage increase
10		(but not less than zero) in the consumer price index-u for
11		the 12 months ending with the September preceding each
12		November 1, whichever is less. If the annual unadjusted
13		percentage change in the consumer price index-u for the 12
14		months ending with the September preceding each November 1
15		is zero or there is a decrease, then the annuity shall not
16		be increased.
17		For the purposes of this Section, "consumer price index-u"
18		means the index published by the Bureau of Labor Statistics of
19		the United States Department of Labor that measures the average
20		change in prices of goods and services purchased by all urban
21		consumers, United States city average, all items, 1982-84 =
22		100. The new amount resulting from each annual adjustment shall
23		be determined by the Public Pension Division of the Department
24		of Insurance and made available to the Board by November 1 of
25		each year.

HB4045 Engrossed - 286 - LRB100 12674 RPS 26063 b
1		(40 ILCS 5/17-127) (from Ch. 108 1/2, par. 17-127)
2		Sec. 17-127. Financing; revenues for the Fund.
3		(a) The revenues for the Fund shall consist of: (1) amounts
4		paid into the Fund by contributors thereto and from employer
5		contributions and State appropriations in accordance with this
6		Article; (2) amounts contributed to the Fund by an Employer;
7		(3) amounts contributed to the Fund pursuant to any law now in
8		force or hereafter to be enacted; (4) contributions from any
9		other source; and (5) the earnings on investments.
10		(b) The General Assembly finds that for many years the
11		State has contributed to the Fund an annual amount that is
12		between 20% and 30% of the amount of the annual State
13		contribution to the Article 16 retirement system, and the
14		General Assembly declares that it is its goal and intention to
15		continue this level of contribution to the Fund in the future.
16		(c) Beginning in State fiscal year 1999, the State shall
17		include in its annual contribution to the Fund an additional
18		amount equal to 0.544% of the Fund's total teacher payroll;
19		except that this additional contribution need not be made in a
20		fiscal year if the Board has certified in the previous fiscal
21		year that the Fund is at least 90% funded, based on actuarial
22		determinations. These additional State contributions are
23		intended to offset a portion of the cost to the Fund of the
24		increases in retirement benefits resulting from this
25		amendatory Act of 1998.
26		(d) In addition to any other contribution required under

HB4045 Engrossed - 287 - LRB100 12674 RPS 26063 b
1		this Article, including the contribution required under
2		subsection (c), for State fiscal year 2017, the State shall
3		contribute the amount of $215,200,000 to the Fund. This amount
4		shall be deemed a portion of the employer's required
5		contribution.
6		(Source: P.A. 90-548, eff. 12-4-97; 90-566, eff. 1-2-98;
7		90-582, eff. 5-27-98; 90-655, eff. 7-30-98.)
8		(40 ILCS 5/17-129) (from Ch. 108 1/2, par. 17-129)
9		Sec. 17-129. Employer contributions; deficiency in Fund.
10		(a) If in any fiscal year of the Board of Education ending
11		prior to 1997 the total amounts paid to the Fund from the Board
12		of Education (other than under this subsection, and other than
13		amounts used for making or "picking up" contributions on behalf
14		of teachers) and from the State do not equal the total
15		contributions made by or on behalf of the teachers for such
16		year, or if the total income of the Fund in any such fiscal
17		year of the Board of Education from all sources is less than
18		the total such expenditures by the Fund for such year, the
19		Board of Education shall, in the next succeeding year, in
20		addition to any other payment to the Fund set apart and
21		appropriate from moneys from its tax levy for educational
22		purposes, a sum sufficient to remove such deficiency or
23		deficiencies, and promptly pay such sum into the Fund in order
24		to restore any of the reserves of the Fund that may have been
25		so temporarily applied. Any amounts received by the Fund after

HB4045 Engrossed - 288 - LRB100 12674 RPS 26063 b
1		December 4, 1997 from State appropriations, including under
2		Section 17-127, shall be a credit against and shall fully
3		satisfy any obligation that may have arisen, or be claimed to
4		have arisen, under this subsection (a) as a result of any
5		deficiency or deficiencies in the fiscal year of the Board of
6		Education ending in calendar year 1997.
7		(b) (i) Notwithstanding any other provision of this
8		Section, and notwithstanding any prior certification by the
9		Board under subsection (c) for fiscal year 2011, the Board of
10		Education's total required contribution to the Fund for fiscal
11		year 2011 under this Section is $187,000,000.
12		(ii) Notwithstanding any other provision of this Section,
13		the Board of Education's total required contribution to the
14		Fund for fiscal year 2012 under this Section is $192,000,000.
15		(iii) Notwithstanding any other provision of this Section,
16		the Board of Education's total required contribution to the
17		Fund for fiscal year 2013 under this Section is $196,000,000.
18		(iv) For fiscal years 2014 through 2059, the minimum
19		contribution to the Fund to be made by the Board of Education
20		in each fiscal year shall be an amount determined by the Fund
21		to be sufficient to bring the total assets of the Fund up to
22		90% of the total actuarial liabilities of the Fund by the end
23		of fiscal year 2059. In making these determinations, the
24		required Board of Education contribution shall be calculated
25		each year as a level percentage of the applicable employee
26		payrolls over the years remaining to and including fiscal year

HB4045 Engrossed - 289 - LRB100 12674 RPS 26063 b
1		2059 and shall be determined under the projected unit credit
2		actuarial cost method.
3		(v) Beginning in fiscal year 2060, the minimum Board of
4		Education contribution for each fiscal year shall be the amount
5		needed to maintain the total assets of the Fund at 90% of the
6		total actuarial liabilities of the Fund.
7		(vi) Notwithstanding any other provision of this
8		subsection (b), for any fiscal year, the contribution to the
9		Fund from the Board of Education shall not be required to be in
10		excess of the amount calculated as needed to maintain the
11		assets (or cause the assets to be) at the 90% level by the end
12		of the fiscal year.
13		(vii) Any contribution by the State to or for the benefit
14		of the Fund, including, without limitation, as referred to
15		under Section 17-127, shall be a credit against any
16		contribution required to be made by the Board of Education
17		under this subsection (b).
18		(c) The Board shall determine the amount of Board of
19		Education contributions required for each fiscal year on the
20		basis of the actuarial tables and other assumptions adopted by
21		the Board and the recommendations of the actuary, in order to
22		meet the minimum contribution requirements of subsections (a)
23		and (b). Annually, on or before February 28, the Board shall
24		certify to the Board of Education the amount of the required
25		Board of Education contribution for the coming fiscal year. The
26		certification shall include a copy of the actuarial

HB4045 Engrossed - 290 - LRB100 12674 RPS 26063 b
1		recommendations upon which it is based.
2		Beginning in fiscal year 2018, any increase or decrease in
3		the Board of Education's contribution over the prior fiscal
4		year due exclusively to changes in actuarial or investment
5		assumptions adopted by the Board shall be included in the Board
6		of Education's contribution to the Fund, as a percentage of the
7		applicable employee payroll, and shall be increased in equal
8		annual increments so that by the fiscal year occurring 5 years
9		after the adoption of the actuarial or investment assumptions,
10		the Board of Education is contributing at the rate otherwise
11		required under this Section.
12		(d) As soon as practical after the effective date of this
13		amendatory Act of the 100th General Assembly, the Board shall
14		recalculate and recertify to the Board of Education the amount
15		of the required Board of Education contribution to the Fund for
16		fiscal years 2017 and 2018, as necessary to take into account
17		the changes in required Board of Education contributions made
18		by this amendatory Act of the 100th General Assembly.
19		On or before May 1, 2018, the Board shall recalculate and
20		recertify to the Board of Education the amount of the required
21		Board of Education contribution to the Fund for fiscal year
22		2019, taking into account the effect on the Fund's liabilities
23		of the elections made under Section 17-115.5.
24		(Source: P.A. 96-889, eff. 4-14-10.)
25		(40 ILCS 5/17-130) (from Ch. 108 1/2, par. 17-130)

HB4045 Engrossed - 291 - LRB100 12674 RPS 26063 b
1		Sec. 17-130. Participants' contributions by payroll
2		deductions.
3		(a) Except as provided in subsection (a-5), there There
4		shall be deducted from the salary of each teacher 7.50% of his
5		salary for service or disability retirement pension and 0.5% of
6		salary for the annual increase in base pension.
7		In addition, there shall be deducted from the salary of
8		each teacher 1% of his salary for survivors' and children's
9		pensions.
10		(a-5) Beginning on July 1, 2018 or the effective date of
11		the Tier 1 employee's election under paragraph (1) of Section
12		17-115.5, whichever is later, in lieu of the contributions
13		otherwise required under subsection (a), each Tier 1 employee
14		who made the election under paragraph (1) of Section 17-115.5
15		shall make contributions of 7.50% of salary for service or
16		disability retirement pension and 0.6% of salary for survivors'
17		and children's pensions.
18		(b) An Employer and any employer of eligible contributors
19		as defined in Section 17-106 is authorized to make the
20		necessary deductions from the salaries of its teachers. Such
21		amounts shall be included as a part of the Fund. An Employer
22		and any employer of eligible contributors as defined in Section
23		17-106 shall formulate such rules and regulations as may be
24		necessary to give effect to the provisions of this Section.
25		(c) All persons employed as teachers shall, by such
26		employment, accept the provisions of this Article and of

HB4045 Engrossed - 292 - LRB100 12674 RPS 26063 b
1		Sections 34-83 to 34-85, inclusive, of "The School Code",
2		approved March 18, 1961, as amended, and thereupon become
3		contributors to the Fund in accordance with the terms thereof.
4		The provisions of this Article and of those Sections shall
5		become a part of the contract of employment.
6		(d) A person who (i) was a member before July 1, 1998, (ii)
7		retires with more than 34 years of creditable service, and
8		(iii) does not elect to qualify for the augmented rate under
9		Section 17-119.1 shall be entitled, at the time of retirement,
10		to receive a partial refund of contributions made under this
11		Section for service occurring after the later of June 30, 1998
12		or attainment of 34 years of creditable service, in an amount
13		equal to 1.00% of the salary upon which those contributions
14		were based.
15		(Source: P.A. 97-8, eff. 6-13-11.)
16		(40 ILCS 5/18-131) (from Ch. 108 1/2, par. 18-131)
17		Sec. 18-131. Financing; employer contributions.
18		(a) The State of Illinois shall make contributions to this
19		System by appropriations of the amounts which, together with
20		the contributions of participants, net earnings on
21		investments, and other income, will meet the costs of
22		maintaining and administering this System on a 90% funded basis
23		in accordance with actuarial recommendations.
24		(b) The Board shall determine the amount of State
25		contributions required for each fiscal year on the basis of the

HB4045 Engrossed - 293 - LRB100 12674 RPS 26063 b
1		actuarial tables and other assumptions adopted by the Board and
2		the prescribed rate of interest, using the formula in
3		subsection (c).
4		(c) For State fiscal years 2018 through 2045, the minimum
5		contribution to the System to be made by the State for each
6		fiscal year shall be an amount determined by the System to be
7		sufficient to bring the total assets of the System up to 90% of
8		the total actuarial liabilities of the System by the end of
9		State fiscal year 2045. In making these determinations, the
10		required State contribution shall be calculated each year as a
11		level percentage of total payroll, including payroll that is
12		not deemed pensionable, over the years remaining to and
13		including fiscal year 2045 and shall be determined under the
14		projected unit credit actuarial cost method.
15		Beginning in State fiscal year 2018, any increase or
16		decrease in State contribution over the prior fiscal year due
17		exclusively to changes in actuarial or investment assumptions
18		adopted by the Board shall be included in the State
19		contribution to the System, as a percentage of the applicable
20		employee payroll, and shall be increased in equal annual
21		increments so that by the State fiscal year occurring 5 years
22		after the adoption of the actuarial or investment assumptions,
23		the State is contributing at the rate otherwise required under
24		this Section.
25		For State fiscal years 2012 through 2017 2045, the minimum
26		contribution to the System to be made by the State for each

HB4045 Engrossed - 294 - LRB100 12674 RPS 26063 b
1		fiscal year shall be an amount determined by the System to be
2		sufficient to bring the total assets of the System up to 90% of
3		the total actuarial liabilities of the System by the end of
4		State fiscal year 2045. In making these determinations, the
5		required State contribution shall be calculated each year as a
6		level percentage of payroll over the years remaining to and
7		including fiscal year 2045 and shall be determined under the
8		projected unit credit actuarial cost method.
9		For State fiscal years 1996 through 2005, the State
10		contribution to the System, as a percentage of the applicable
11		employee payroll, shall be increased in equal annual increments
12		so that by State fiscal year 2011, the State is contributing at
13		the rate required under this Section.
14		Notwithstanding any other provision of this Article, the
15		total required State contribution for State fiscal year 2006 is
16		$29,189,400.
17		Notwithstanding any other provision of this Article, the
18		total required State contribution for State fiscal year 2007 is
19		$35,236,800.
20		For each of State fiscal years 2008 through 2009, the State
21		contribution to the System, as a percentage of the applicable
22		employee payroll, shall be increased in equal annual increments
23		from the required State contribution for State fiscal year
24		2007, so that by State fiscal year 2011, the State is
25		contributing at the rate otherwise required under this Section.
26		Notwithstanding any other provision of this Article, the

HB4045 Engrossed - 295 - LRB100 12674 RPS 26063 b
1		total required State contribution for State fiscal year 2010 is
2		$78,832,000 and shall be made from the proceeds of bonds sold
3		in fiscal year 2010 pursuant to Section 7.2 of the General
4		Obligation Bond Act, less (i) the pro rata share of bond sale
5		expenses determined by the System's share of total bond
6		proceeds, (ii) any amounts received from the General Revenue
7		Fund in fiscal year 2010, and (iii) any reduction in bond
8		proceeds due to the issuance of discounted bonds, if
9		applicable.
10		Notwithstanding any other provision of this Article, the
11		total required State contribution for State fiscal year 2011 is
12		the amount recertified by the System on or before April 1, 2011
13		pursuant to Section 18-140 and shall be made from the proceeds
14		of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
15		the General Obligation Bond Act, less (i) the pro rata share of
16		bond sale expenses determined by the System's share of total
17		bond proceeds, (ii) any amounts received from the General
18		Revenue Fund in fiscal year 2011, and (iii) any reduction in
19		bond proceeds due to the issuance of discounted bonds, if
20		applicable.
21		Beginning in State fiscal year 2046, the minimum State
22		contribution for each fiscal year shall be the amount needed to
23		maintain the total assets of the System at 90% of the total
24		actuarial liabilities of the System.
25		Amounts received by the System pursuant to Section 25 of
26		the Budget Stabilization Act or Section 8.12 of the State

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1		Finance Act in any fiscal year do not reduce and do not
2		constitute payment of any portion of the minimum State
3		contribution required under this Article in that fiscal year.
4		Such amounts shall not reduce, and shall not be included in the
5		calculation of, the required State contributions under this
6		Article in any future year until the System has reached a
7		funding ratio of at least 90%. A reference in this Article to
8		the "required State contribution" or any substantially similar
9		term does not include or apply to any amounts payable to the
10		System under Section 25 of the Budget Stabilization Act.
11		Notwithstanding any other provision of this Section, the
12		required State contribution for State fiscal year 2005 and for
13		fiscal year 2008 and each fiscal year thereafter, as calculated
14		under this Section and certified under Section 18-140, shall
15		not exceed an amount equal to (i) the amount of the required
16		State contribution that would have been calculated under this
17		Section for that fiscal year if the System had not received any
18		payments under subsection (d) of Section 7.2 of the General
19		Obligation Bond Act, minus (ii) the portion of the State's
20		total debt service payments for that fiscal year on the bonds
21		issued in fiscal year 2003 for the purposes of that Section
22		7.2, as determined and certified by the Comptroller, that is
23		the same as the System's portion of the total moneys
24		distributed under subsection (d) of Section 7.2 of the General
25		Obligation Bond Act. In determining this maximum for State
26		fiscal years 2008 through 2010, however, the amount referred to

HB4045 Engrossed - 297 - LRB100 12674 RPS 26063 b
1		in item (i) shall be increased, as a percentage of the
2		applicable employee payroll, in equal increments calculated
3		from the sum of the required State contribution for State
4		fiscal year 2007 plus the applicable portion of the State's
5		total debt service payments for fiscal year 2007 on the bonds
6		issued in fiscal year 2003 for the purposes of Section 7.2 of
7		the General Obligation Bond Act, so that, by State fiscal year
8		2011, the State is contributing at the rate otherwise required
9		under this Section.
10		(d) For purposes of determining the required State
11		contribution to the System, the value of the System's assets
12		shall be equal to the actuarial value of the System's assets,
13		which shall be calculated as follows:
14		As of June 30, 2008, the actuarial value of the System's
15		assets shall be equal to the market value of the assets as of
16		that date. In determining the actuarial value of the System's
17		assets for fiscal years after June 30, 2008, any actuarial
18		gains or losses from investment return incurred in a fiscal
19		year shall be recognized in equal annual amounts over the
20		5-year period following that fiscal year.
21		(e) For purposes of determining the required State
22		contribution to the system for a particular year, the actuarial
23		value of assets shall be assumed to earn a rate of return equal
24		to the system's actuarially assumed rate of return.
25		(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
26		96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.

HB4045 Engrossed - 298 - LRB100 12674 RPS 26063 b
1		7-13-12.)
2		(40 ILCS 5/18-140) (from Ch. 108 1/2, par. 18-140)
3		Sec. 18-140. To certify required State contributions and
4		submit vouchers.
5		(a) The Board shall certify to the Governor, on or before
6		November 15 of each year until November 15, 2011, the amount of
7		the required State contribution to the System for the following
8		fiscal year and shall specifically identify the System's
9		projected State normal cost for that fiscal year. The
10		certification shall include a copy of the actuarial
11		recommendations upon which it is based and shall specifically
12		identify the System's projected State normal cost for that
13		fiscal year.
14		On or before November 1 of each year, beginning November 1,
15		2012, the Board shall submit to the State Actuary, the
16		Governor, and the General Assembly a proposed certification of
17		the amount of the required State contribution to the System for
18		the next fiscal year, along with all of the actuarial
19		assumptions, calculations, and data upon which that proposed
20		certification is based. On or before January 1 of each year
21		beginning January 1, 2013, the State Actuary shall issue a
22		preliminary report concerning the proposed certification and
23		identifying, if necessary, recommended changes in actuarial
24		assumptions that the Board must consider before finalizing its
25		certification of the required State contributions. On or before

HB4045 Engrossed - 299 - LRB100 12674 RPS 26063 b
1		January 15, 2013 and every January 15 thereafter, the Board
2		shall certify to the Governor and the General Assembly the
3		amount of the required State contribution for the next fiscal
4		year. The Board's certification must note any deviations from
5		the State Actuary's recommended changes, the reason or reasons
6		for not following the State Actuary's recommended changes, and
7		the fiscal impact of not following the State Actuary's
8		recommended changes on the required State contribution.
9		On or before May 1, 2004, the Board shall recalculate and
10		recertify to the Governor the amount of the required State
11		contribution to the System for State fiscal year 2005, taking
12		into account the amounts appropriated to and received by the
13		System under subsection (d) of Section 7.2 of the General
14		Obligation Bond Act.
15		On or before July 1, 2005, the Board shall recalculate and
16		recertify to the Governor the amount of the required State
17		contribution to the System for State fiscal year 2006, taking
18		into account the changes in required State contributions made
19		by this amendatory Act of the 94th General Assembly.
20		On or before April 1, 2011, the Board shall recalculate and
21		recertify to the Governor the amount of the required State
22		contribution to the System for State fiscal year 2011, applying
23		the changes made by Public Act 96-889 to the System's assets
24		and liabilities as of June 30, 2009 as though Public Act 96-889
25		was approved on that date.
26		As soon as practical after the effective date of this

HB4045 Engrossed - 300 - LRB100 12674 RPS 26063 b
1		amendatory Act of the 100th General Assembly, the Board shall
2		recalculate and recertify to the State Actuary, the Governor,
3		and the General Assembly the amount of the State contribution
4		to the System for State fiscal year 2018, taking into account
5		the changes in required State contributions made by this
6		amendatory Act of the 100th General Assembly. The State Actuary
7		shall review the assumptions and valuations underlying the
8		Board's revised certification and issue a preliminary report
9		concerning the proposed recertification and identifying, if
10		necessary, recommended changes in actuarial assumptions that
11		the Board must consider before finalizing its certification of
12		the required State contributions. The Board's final
13		certification must note any deviations from the State Actuary's
14		recommended changes, the reason or reasons for not following
15		the State Actuary's recommended changes, and the fiscal impact
16		of not following the State Actuary's recommended changes on the
17		required State contribution.
18		(b) Beginning in State fiscal year 1996, on or as soon as
19		possible after the 15th day of each month the Board shall
20		submit vouchers for payment of State contributions to the
21		System, in a total monthly amount of one-twelfth of the
22		required annual State contribution certified under subsection
23		(a). From the effective date of this amendatory Act of the 93rd
24		General Assembly through June 30, 2004, the Board shall not
25		submit vouchers for the remainder of fiscal year 2004 in excess
26		of the fiscal year 2004 certified contribution amount

HB4045 Engrossed - 301 - LRB100 12674 RPS 26063 b
1		determined under this Section after taking into consideration
2		the transfer to the System under subsection (c) of Section
3		6z-61 of the State Finance Act. These vouchers shall be paid by
4		the State Comptroller and Treasurer by warrants drawn on the
5		funds appropriated to the System for that fiscal year.
6		If in any month the amount remaining unexpended from all
7		other appropriations to the System for the applicable fiscal
8		year (including the appropriations to the System under Section
9		8.12 of the State Finance Act and Section 1 of the State
10		Pension Funds Continuing Appropriation Act) is less than the
11		amount lawfully vouchered under this Section, the difference
12		shall be paid from the General Revenue Fund under the
13		continuing appropriation authority provided in Section 1.1 of
14		the State Pension Funds Continuing Appropriation Act.
15		(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
16		97-694, eff. 6-18-12.)
17		(40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
18		(Text of Section WITHOUT the changes made by P.A. 98-599,
19		which has been held unconstitutional)
20		Sec. 20-121. Calculation of proportional retirement
21		annuities.
22		(a) Upon retirement of the employee, a proportional
23		retirement annuity shall be computed by each participating
24		system in which pension credit has been established on the
25		basis of pension credits under each system. The computation

HB4045 Engrossed - 302 - LRB100 12674 RPS 26063 b
1		shall be in accordance with the formula or method prescribed by
2		each participating system which is in effect at the date of the
3		employee's latest withdrawal from service covered by any of the
4		systems in which he has pension credits which he elects to have
5		considered under this Article. However, the amount of any
6		retirement annuity payable under the self-managed plan
7		established under Section 15-158.2 of this Code or under the
8		defined contribution plan established under Article 2, 14, 15,
9		or 16 of this Code depends solely on the value of the
10		participant's vested account balances and is not subject to any
11		proportional adjustment under this Section.
12		(a-5) For persons who participate in a defined contribution
13		plan established under Article 2, 14, 15, or 16 of this Code to
14		whom the provisions of this Article apply, the pension credits
15		established under the defined contribution plan may be
16		considered in determining eligibility for or the amount of the
17		defined benefit retirement annuity that is payable by any other
18		participating system.
19		(b) Combined pension credit under all retirement systems
20		subject to this Article shall be considered in determining
21		whether the minimum qualification has been met and the formula
22		or method of computation which shall be applied, except as may
23		be otherwise provided with respect to vesting in State or
24		employer contributions in a defined contribution plan. If a
25		system has a step-rate formula for calculation of the
26		retirement annuity, pension credits covering previous service

HB4045 Engrossed - 303 - LRB100 12674 RPS 26063 b
1		which have been established under another system shall be
2		considered in determining which range or ranges of the
3		step-rate formula are to be applicable to the employee.
4		(c) Interest on pension credit shall continue to accumulate
5		in accordance with the provisions of the law governing the
6		retirement system in which the same has been established during
7		the time an employee is in the service of another employer, on
8		the assumption such employee, for interest purposes for pension
9		credit, is continuing in the service covered by such retirement
10		system.
11		(Source: P.A. 91-887, eff. 7-6-00.)
12		(40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
13		(Text of Section WITHOUT the changes made by P.A. 98-599,
14		which has been held unconstitutional)
15		Sec. 20-123. Survivor's annuity. The provisions governing
16		a retirement annuity shall be applicable to a survivor's
17		annuity. Appropriate credits shall be established for
18		survivor's annuity purposes in those participating systems
19		which provide survivor's annuities, according to the same
20		conditions and subject to the same limitations and restrictions
21		herein prescribed for a retirement annuity. If a participating
22		system has no survivor's annuity benefit, or if the survivor's
23		annuity benefit under that system is waived, pension credit
24		established in that system shall not be considered in
25		determining eligibility for or the amount of the survivor's

HB4045 Engrossed - 304 - LRB100 12674 RPS 26063 b
1		annuity which may be payable by any other participating system.
2		For persons who participate in the self-managed plan
3		established under Section 15-158.2 or the portable benefit
4		package established under Section 15-136.4, pension credit
5		established under Article 15 may be considered in determining
6		eligibility for or the amount of the survivor's annuity that is
7		payable by any other participating system, but pension credit
8		established in any other system shall not result in any right
9		to a survivor's annuity under the Article 15 system.
10		For persons who participate in a defined contribution plan
11		established under Article 2, 14, 15, or 16 of this Code to whom
12		the provisions of this Article apply, the pension credits
13		established under the defined contribution plan may be
14		considered in determining eligibility for or the amount of the
15		defined benefit survivor's annuity that is payable by any other
16		participating system, but pension credits established in any
17		other system shall not result in any right to or increase in
18		the value of a survivor's annuity under the defined
19		contribution plan, which depends solely on the options chosen
20		and the value of the participant's vested account balances and
21		is not subject to any proportional adjustment under this
22		Section.
23		(Source: P.A. 91-887, eff. 7-6-00.)
24		(40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
25		(Text of Section WITHOUT the changes made by P.A. 98-599,

HB4045 Engrossed - 305 - LRB100 12674 RPS 26063 b
1		which has been held unconstitutional)
2		Sec. 20-124. Maximum benefits.
3		(a) In no event shall the combined retirement or survivors
4		annuities exceed the highest annuity which would have been
5		payable by any participating system in which the employee has
6		pension credits, if all of his pension credits had been
7		validated in that system.
8		If the combined annuities should exceed the highest maximum
9		as determined in accordance with this Section, the respective
10		annuities shall be reduced proportionately according to the
11		ratio which the amount of each proportional annuity bears to
12		the aggregate of all such annuities.
13		(b) In the case of a participant in the self-managed plan
14		established under Section 15-158.2 of this Code to whom the
15		provisions of this Article apply:
16		(i) For purposes of calculating the combined
17		retirement annuity and the proportionate reduction, if
18		any, in a retirement annuity other than one payable under
19		the self-managed plan, the amount of the Article 15
20		retirement annuity shall be deemed to be the highest
21		annuity to which the annuitant would have been entitled if
22		he or she had participated in the traditional benefit
23		package as defined in Section 15-103.1 rather than the
24		self-managed plan.
25		(ii) For purposes of calculating the combined
26		survivor's annuity and the proportionate reduction, if

HB4045 Engrossed - 306 - LRB100 12674 RPS 26063 b
1		any, in a survivor's annuity other than one payable under
2		the self-managed plan, the amount of the Article 15
3		survivor's annuity shall be deemed to be the highest
4		survivor's annuity to which the survivor would have been
5		entitled if the deceased employee had participated in the
6		traditional benefit package as defined in Section 15-103.1
7		rather than the self-managed plan.
8		(iii) Benefits payable under the self-managed plan are
9		not subject to proportionate reduction under this Section.
10		(c) In the case of a participant in a defined contribution
11		plan established under Article 2, 14, 15, or 16 of this Code to
12		whom the provisions of this Article apply:
13		(i) For purposes of calculating the combined
14		retirement annuity and the proportionate reduction, if
15		any, in a defined benefit retirement annuity, any benefit
16		payable under the defined contribution plan shall not be
17		considered.
18		(ii) For purposes of calculating the combined
19		survivor's annuity and the proportionate reduction, if
20		any, in a defined benefit survivor's annuity, any benefit
21		payable under the defined contribution plan shall not be
22		considered.
23		(iii) Benefits payable under a defined contribution
24		plan established under Article 2, 14, 15, or 16 of this
25		Code are not subject to proportionate reduction under this
26		Section.

HB4045 Engrossed - 307 - LRB100 12674 RPS 26063 b
1		(Source: P.A. 91-887, eff. 7-6-00.)
2		(40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
3		(Text of Section WITHOUT the changes made by P.A. 98-599,
4		which has been held unconstitutional)
5		Sec. 20-125. Return to employment - suspension of benefits.
6		If a retired employee returns to employment which is covered by
7		a system from which he is receiving a proportional annuity
8		under this Article, his proportional annuity from all
9		participating systems shall be suspended during the period of
10		re-employment, except that this suspension does not apply to
11		any distributions payable under the self-managed plan
12		established under Section 15-158.2 or under a defined
13		contribution plan established under Article 2, 14, 15, or 16 of
14		this Code.
15		The provisions of the Article under which such employment
16		would be covered shall govern the determination of whether the
17		employee has returned to employment, and if applicable the
18		exemption of temporary employment or employment not exceeding a
19		specified duration or frequency, for all participating systems
20		from which the retired employee is receiving a proportional
21		annuity under this Article, notwithstanding any contrary
22		provisions in the other Articles governing such systems.
23		(Source: P.A. 91-887, eff. 7-6-00.)
24		(40 ILCS 5/2-165 rep.)

HB4045 Engrossed - 308 - LRB100 12674 RPS 26063 b
1		(40 ILCS 5/2-166 rep.)
2		(40 ILCS 5/14-155 rep.)
3		(40 ILCS 5/14-156 rep.)
4		(40 ILCS 5/15-200 rep.)
5		(40 ILCS 5/15-201 rep.)
6		(40 ILCS 5/16-205 rep.)
7		(40 ILCS 5/16-206 rep.)
8		Section 50. The Illinois Pension Code is amended by
9		repealing Sections 2-165, 2-166, 14-155, 14-156, 15-200,
10		15-201, 16-205, and 16-206.
11		Section 55. The State Pension Funds Continuing
12		Appropriation Act is amended by changing Section 1.1 and adding
13		Section 1.9 as follows:
14		(40 ILCS 15/1.1)
15		Sec. 1.1. Appropriations to certain retirement systems.
16		(a) There is hereby appropriated from the General Revenue
17		Fund to the General Assembly Retirement System, on a continuing
18		monthly basis, the amount, if any, by which the total available
19		amount of all other appropriations to that retirement system
20		for the payment of State contributions is less than the total
21		amount of the vouchers for required State contributions
22		lawfully submitted by the retirement system for that month
23		under Section 2-134 of the Illinois Pension Code.
24		(b) There is hereby appropriated from the General Revenue

HB4045 Engrossed - 309 - LRB100 12674 RPS 26063 b
1		Fund to the State Universities Retirement System, on a
2		continuing monthly basis, the amount, if any, by which the
3		total available amount of all other appropriations to that
4		retirement system for the payment of State contributions,
5		including any deficiency in the required contributions of the
6		optional retirement program established under Section 15-158.2
7		of the Illinois Pension Code, is less than the total amount of
8		the vouchers for required State contributions lawfully
9		submitted by the retirement system for that month under Section
10		15-165 of the Illinois Pension Code.
11		(c) There is hereby appropriated from the Common School
12		Fund to the Teachers' Retirement System of the State of
13		Illinois, on a continuing monthly basis, the amount, if any, by
14		which the total available amount of all other appropriations to
15		that retirement system for the payment of State contributions
16		is less than the total amount of the vouchers for required
17		State contributions lawfully submitted by the retirement
18		system for that month under Section 16-158 of the Illinois
19		Pension Code.
20		(d) There is hereby appropriated from the General Revenue
21		Fund to the Judges Retirement System of Illinois, on a
22		continuing monthly basis, the amount, if any, by which the
23		total available amount of all other appropriations to that
24		retirement system for the payment of State contributions is
25		less than the total amount of the vouchers for required State
26		contributions lawfully submitted by the retirement system for

HB4045 Engrossed - 310 - LRB100 12674 RPS 26063 b
1		that month under Section 18-140 of the Illinois Pension Code.
2		(e) The continuing appropriations provided by subsections
3		(a), (b), (c), and (d) of this Section shall first be available
4		in State fiscal year 1996. The continuing appropriations
5		provided by subsection (h) of this Section shall first be
6		available as provided in that subsection (h).
7		(f) For State fiscal year 2010 only, the continuing
8		appropriations provided by this Section are equal to the amount
9		certified by each System on or before December 31, 2008, less
10		(i) the gross proceeds of the bonds sold in fiscal year 2010
11		under the authorization contained in subsection (a) of Section
12		7.2 of the General Obligation Bond Act and (ii) any amounts
13		received from the State Pensions Fund.
14		(g) For State fiscal year 2011 only, the continuing
15		appropriations provided by this Section are equal to the amount
16		certified by each System on or before April 1, 2011, less (i)
17		the gross proceeds of the bonds sold in fiscal year 2011 under
18		the authorization contained in subsection (a) of Section 7.2 of
19		the General Obligation Bond Act and (ii) any amounts received
20		from the State Pensions Fund.
21		(h) For State fiscal year 2017, there is hereby
22		appropriated from the Common School Fund to the Public School
23		Teachers' Pension and Retirement Fund of Chicago the amount, if
24		any, by which the total available amount of all other State
25		appropriations to that Retirement Fund for the payment of State
26		contributions under subsection (d) of Section 17-127 of the

HB4045 Engrossed - 311 - LRB100 12674 RPS 26063 b
1		Illinois Pension Code is less than the total amount of required
2		State contributions under subsection (d) of Section 17-127.
3		(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
4		96-1511, eff. 1-27-11.)
5		(40 ILCS 15/1.9 new)
6		Sec. 1.9. Appropriation for consideration payment. There
7		is hereby appropriated from the General Revenue Fund to the
8		State Comptroller, on a continuing basis, all amounts necessary
9		for the payment of consideration payments under subsection (b)
10		of Sections 2-110.3, 14-106.5, 15-132.9, 16-122.9, and
11		17-115.5 of the Illinois Pension Code, in the amounts certified
12		to the State Comptroller by the respective retirement system or
13		pension fund.
14		Section 60. The School Code is amended by changing Sections
15		24-1 and 24-8 and by adding Section 34-18.53 as follows:
16		(105 ILCS 5/24-1) (from Ch. 122, par. 24-1)
17		Sec. 24-1. Appointment-Salaries-Payment-School
18		month-School term.) School boards shall appoint all teachers,
19		determine qualifications of employment and fix the amount of
20		their salaries subject to any limitation set forth in this Act
21		and subject to any applicable restrictions in Section 16-122.9
22		of the Illinois Pension Code. They shall pay the wages of
23		teachers monthly, subject, however, to the provisions of

HB4045 Engrossed - 312 - LRB100 12674 RPS 26063 b
1		Section 24-21. The school month shall be the same as the
2		calendar month but by resolution the school board may adopt for
3		its use a month of 20 days, including holidays. The school term
4		shall consist of at least the minimum number of pupil
5		attendance days required by Section 10-19, any additional legal
6		school holidays, days of teachers' institutes, or equivalent
7		professional educational experiences, and one or two days at
8		the beginning of the school term when used as a teachers'
9		workshop.
10		(Source: P.A. 80-249.)
11		(105 ILCS 5/24-8) (from Ch. 122, par. 24-8)
12		Sec. 24-8. Minimum salary. In fixing the salaries of
13		teachers, school boards shall pay those who serve on a
14		full-time basis not less than a rate for the school year that
15		is based upon training completed in a recognized institution of
16		higher learning, as follows: for the school year beginning July
17		1, 1980 and thereafter, less than a bachelor's degree, $9,000;
18		120 semester hours or more and a bachelor's degree, $10,000;
19		150 semester hours or more and a master's degree, $11,000.
20		Based upon previous public school experience in this State
21		or any other State, territory, dependency or possession of the
22		United States, or in schools operated by or under the auspices
23		of the United States, teachers who serve on a full-time basis
24		shall have their salaries increased to at least the following
25		amounts above the starting salary for a teacher in such

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1		district in the same classification: with less than a
2		bachelor's degree, $750 after 5 years; with 120 semester hours
3		or more and a bachelor's degree, $1,000 after 5 years and
4		$1,600 after 8 years; with 150 semester hours or more and a
5		master's degree, $1,250 after 5 years, $2,000 after 8 years and
6		$2,750 after 13 years. However, any salary increase is subject
7		to any applicable restrictions in Section 16-122.9 of the
8		Illinois Pension Code.
9		For the purpose of this Section a teacher's salary shall
10		include any amount paid by the school district on behalf of the
11		teacher, as teacher contributions, to the Teachers' Retirement
12		System of the State of Illinois.
13		If a school board establishes a schedule for teachers'
14		salaries based on education and experience, not inconsistent
15		with this Section, all certificated nurses employed by that
16		board shall be paid in accordance with the provisions of such
17		schedule (subject to any applicable restrictions in Section
18		16-122.9 of the Illinois Pension Code).
19		For purposes of this Section, a teacher who submits a
20		certificate of completion to the school office prior to the
21		first day of the school term shall be considered to have the
22		degree stated in such certificate.
23		(Source: P.A. 83-913.)
24		(105 ILCS 5/34-18.53 new)
25		Sec. 34-18.53. Future increase in income. The Board of

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1		Education must not pay, offer, or agree to pay any future
2		increase in income, as that term is defined in Section 17-113.5
3		of the Illinois Pension Code, to any person in a manner that
4		violates Section 17-115.5 of the Illinois Pension Code.
5		Section 65. The State Universities Civil Service Act is
6		amended by changing Section 36d as follows:
7		(110 ILCS 70/36d) (from Ch. 24 1/2, par. 38b3)
8		Sec. 36d. Powers and duties of the Merit Board. The Merit
9		Board shall have the power and duty-
10		(1) To approve a classification plan prepared under its
11		direction, assigning to each class positions of
12		substantially similar duties. The Merit Board shall have
13		power to delegate to its Director the duty of assigning
14		each position in the classified service to the appropriate
15		class in the classification plan approved by the Merit
16		Board.
17		(2) To prescribe the duties of each class of positions
18		and the qualifications required by employment in that
19		class.
20		(3) To prescribe the range of compensation for each
21		class or to fix a single rate of compensation for employees
22		in a particular class; and to establish other conditions of
23		employment which an employer and employee representatives
24		have agreed upon as fair and equitable. The Merit Board

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1		shall direct the payment of the "prevailing rate of wages"
2		in those classifications in which, on January 1, 1952, any
3		employer is paying such prevailing rate and in such other
4		classes as the Merit Board may thereafter determine.
5		"Prevailing rate of wages" as used herein shall be the
6		wages paid generally in the locality in which the work is
7		being performed to employees engaged in work of a similar
8		character. Subject to any applicable restrictions in
9		Section 14-106.5, 15-132.9, or 16-122.9 of the Illinois
10		Pension Code, each Each employer covered by the University
11		System shall be authorized to negotiate with
12		representatives of employees to determine appropriate
13		ranges or rates of compensation or other conditions of
14		employment and may recommend to the Merit Board for
15		establishment the rates or ranges or other conditions of
16		employment which the employer and employee representatives
17		have agreed upon as fair and equitable, but excluding the
18		changes, the impact of changes, and the implementation of
19		the changes set forth in this amendatory Act of the 100th
20		General Assembly. Any rates or ranges established prior to
21		January 1, 1952, and hereafter, shall not be changed except
22		in accordance with the procedures herein provided.
23		(4) To recommend to the institutions and agencies
24		specified in Section 36e standards for hours of work,
25		holidays, sick leave, overtime compensation and vacation
26		for the purpose of improving conditions of employment

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1		covered therein and for the purpose of insuring conformity
2		with the prevailing rate principal.
3		(5) To prescribe standards of examination for each
4		class, the examinations to be related to the duties of such
5		class. The Merit Board shall have power to delegate to the
6		Director and his staff the preparation, conduct and grading
7		of examinations. Examinations may be written, oral, by
8		statement of training and experience, in the form of tests
9		of knowledge, skill, capacity, intellect, aptitude; or, by
10		any other method, which in the judgment of the Merit Board
11		is reasonable and practical for any particular
12		classification. Different examining procedures may be
13		determined for the examinations in different
14		classifications but all examinations in the same
15		classification shall be uniform.
16		(6) To authorize the continuous recruitment of
17		personnel and to that end, to delegate to the Director and
18		his staff the power and the duty to conduct open and
19		continuous competitive examinations for all
20		classifications of employment.
21		(7) To cause to be established from the results of
22		examinations registers for each class of positions in the
23		classified service of the State Universities Civil Service
24		System, of the persons who shall attain the minimum mark
25		fixed by the Merit Board for the examination; and such
26		persons shall take rank upon the registers as candidates in

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1		the order of their relative excellence as determined by
2		examination, without reference to priority of time of
3		examination.
4		(8) To provide by its rules for promotions in the
5		classified service. Vacancies shall be filled by promotion
6		whenever practicable. For the purpose of this paragraph, an
7		advancement in class shall constitute a promotion.
8		(9) To set a probationary period of employment of no
9		less than 6 months and no longer than 12 months for each
10		class of positions in the classification plan, the length
11		of the probationary period for each class to be determined
12		by the Director.
13		(10) To provide by its rules for employment at regular
14		rates of compensation of persons with physical
15		disabilities in positions in which the disability does not
16		prevent the individual from furnishing satisfactory
17		service.
18		(11) To make and publish rules, to carry out the
19		purpose of the State Universities Civil Service System and
20		for examination, appointments, transfers and removals and
21		for maintaining and keeping records of the efficiency of
22		officers and employees and groups of officers and employees
23		in accordance with the provisions of Sections 36b to 36q,
24		inclusive, and said Merit Board may from time to time make
25		changes in such rules.
26		(12) To appoint a Director and such assistants and

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1		other clerical and technical help as may be necessary
2		efficiently to administer Sections 36b to 36q, inclusive.
3		To authorize the Director to appoint an assistant resident
4		at the place of employment of each employer specified in
5		Section 36e and this assistant may be authorized to give
6		examinations and to certify names from the regional
7		registers provided in Section 36k.
8		(13) To submit to the Governor of this state on or
9		before November 1 of each year prior to the regular session
10		of the General Assembly a report of the University System's
11		business and an estimate of the amount of appropriation
12		from state funds required for the purpose of administering
13		the University System.
14		(Source: P.A. 99-143, eff. 7-27-15.)
15		Section 70. The University of Illinois Act is amended by
16		adding Section 100 as follows:
17		(110 ILCS 305/100 new)
18		Sec. 100. Future increases in income. The University of
19		Illinois must not pay, offer, or agree to pay any future
20		increase in income, as that term is defined in Section
21		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
22		to any person in a manner that violates Section 14-106.5,
23		15-132.9, or 16-122.9 of the Illinois Pension Code.

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1		Section 75. The Southern Illinois University Management
2		Act is amended by adding Section 85 as follows:
3		(110 ILCS 520/85 new)
4		Sec. 85. Future increases in income. Southern Illinois
5		University must not pay, offer, or agree to pay any future
6		increase in income, as that term is defined in Section
7		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
8		to any person in a manner that violates Section 14-106.5,
9		15-132.9, or 16-122.9 of the Illinois Pension Code.
10		Section 80. The Chicago State University Law is amended by
11		adding Section 5-195 as follows:
12		(110 ILCS 660/5-195 new)
13		Sec. 5-195. Future increases in income. Chicago State
14		University must not pay, offer, or agree to pay any future
15		increase in income, as that term is defined in Section
16		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
17		to any person in a manner that violates Section 14-106.5,
18		15-132.9, or 16-122.9 of the Illinois Pension Code.
19		Section 85. The Eastern Illinois University Law is amended
20		by adding Section 10-195 as follows:
21		(110 ILCS 665/10-195 new)

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1		Sec. 10-195. Future increases in income. Eastern Illinois
2		University must not pay, offer, or agree to pay any future
3		increase in income, as that term is defined in Section
4		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
5		to any person in a manner that violates Section 14-106.5,
6		15-132.9, or 16-122.9 of the Illinois Pension Code.
7		Section 90. The Governors State University Law is amended
8		by adding Section 15-195 as follows:
9		(110 ILCS 670/15-195 new)
10		Sec. 15-195. Future increases in income. Governors State
11		University must not pay, offer, or agree to pay any future
12		increase in income, as that term is defined in Section
13		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
14		to any person in a manner that violates Section 14-106.5,
15		15-132.9, or 16-122.9 of the Illinois Pension Code.
16		Section 95. The Illinois State University Law is amended by
17		adding Section 20-200 as follows:
18		(110 ILCS 675/20-200 new)
19		Sec. 20-200. Future increases in income. Illinois State
20		University must not pay, offer, or agree to pay any future
21		increase in income, as that term is defined in Section
22		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,

HB4045 Engrossed - 321 - LRB100 12674 RPS 26063 b
1		to any person in a manner that violates Section 14-106.5,
2		15-132.9, or 16-122.9 of the Illinois Pension Code.
3		Section 100. The Northeastern Illinois University Law is
4		amended by adding Section 25-195 as follows:
5		(110 ILCS 680/25-195 new)
6		Sec. 25-195. Future increases in income. Northeastern
7		Illinois University must not pay, offer, or agree to pay any
8		future increase in income, as that term is defined in Section
9		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
10		to any person in a manner that violates Section 14-106.5,
11		15-132.9, or 16-122.9 of the Illinois Pension Code.
12		Section 105. The Northern Illinois University Law is
13		amended by adding Section 30-205 as follows:
14		(110 ILCS 685/30-205 new)
15		Sec. 30-205. Future increases in income. Northern Illinois
16		University must not pay, offer, or agree to pay any future
17		increase in income, as that term is defined in Section
18		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
19		to any person in a manner that violates Section 14-106.5,
20		15-132.9, or 16-122.9 of the Illinois Pension Code.
21		Section 110. The Western Illinois University Law is amended

HB4045 Engrossed - 322 - LRB100 12674 RPS 26063 b
1		by adding Section 35-200 as follows:
2		(110 ILCS 690/35-200 new)
3		Sec. 35-200. Future increases in income. Western Illinois
4		University must not pay, offer, or agree to pay any future
5		increase in income, as that term is defined in Section
6		14-103.42, 15-112.1, or 16-121.1 of the Illinois Pension Code,
7		to any person in a manner that violates Section 14-106.5,
8		15-132.9, or 16-122.9 of the Illinois Pension Code.
9		Section 115. The Public Community College Act is amended by
10		changing Sections 3-26 and 3-42 as follows:
11		(110 ILCS 805/3-26) (from Ch. 122, par. 103-26)
12		Sec. 3-26. (a) To make appointments and fix the salaries of
13		a chief administrative officer, who shall be the executive
14		officer of the board, other administrative personnel, and all
15		teachers, but subject to any applicable restrictions in Section
16		14-106.5, 15-132.9, or 16-122.9 of the Illinois Pension Code.
17		In making these appointments and fixing the salaries, the board
18		may make no discrimination on account of sex, race, creed,
19		color or national origin.
20		(b) Upon the written request of an employee, to withhold
21		from the compensation of that employee the membership dues of
22		such employee payable to any specified labor organization as
23		defined in the Illinois Educational Labor Relations Act. Under

HB4045 Engrossed - 323 - LRB100 12674 RPS 26063 b
1		such arrangement, an amount shall be withheld for each regular
2		payroll period which is equal to the prorata share of the
3		annual membership dues plus any payments or contributions and
4		the board shall pay such withholding to the specified labor
5		organization within 10 working days from the time of the
6		withholding.
7		(Source: P.A. 83-1014.)
8		(110 ILCS 805/3-42) (from Ch. 122, par. 103-42)
9		Sec. 3-42. To employ such personnel as may be needed, to
10		establish policies governing their employment and dismissal,
11		and to fix the amount of their compensation, subject to any
12		applicable restrictions in Section 14-106.5, 15-132.9, or
13		16-122.9 of the Illinois Pension Code. In the employment,
14		establishment of policies and fixing of compensation the board
15		may make no discrimination on account of sex, race, creed,
16		color or national origin.
17		Residence within any community college district or outside
18		any community college district shall not be considered:
19		(a) in determining whether to retain or not retain any
20		employee of a community college employed prior to July 1,
21		1977 or prior to the adoption by the community college
22		board of a resolution making residency within the community
23		college district of some or all employees a condition of
24		employment, whichever is later;
25		(b) in assigning, promoting or transferring any

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1		employee of a community college to an office or position
2		employed prior to July 1, 1977 or prior to the adoption by
3		the community college board of a resolution making
4		residency within the community college district of some or
5		all employees a condition of employment, whichever is
6		later; or
7		(c) in determining the salary or other compensation of
8		any employee of a community college.
9		(Source: P.A. 80-248.)
10		Section 120. The Illinois Educational Labor Relations Act
11		is amended by changing Sections 4, 14, and 17 and by adding
12		Section 10.6 as follows:
13		(115 ILCS 5/4) (from Ch. 48, par. 1704)
14		Sec. 4. Employer rights. Employers shall not be required to
15		bargain over matters of inherent managerial policy, which shall
16		include such areas of discretion or policy as the functions of
17		the employer, standards of services, its overall budget, the
18		organizational structure and selection of new employees and
19		direction of employees. Employers, however, shall be required
20		to bargain collectively with regard to policy matters directly
21		affecting wages (but subject to any applicable restrictions in
22		Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the
23		Illinois Pension Code), hours and terms and conditions of
24		employment as well as the impact thereon upon request by

HB4045 Engrossed - 325 - LRB100 12674 RPS 26063 b
1		employee representatives, but excluding the changes, the
2		impact of changes, and the implementation of the changes set
3		forth in Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of
4		the Illinois Pension Code. To preserve the rights of employers
5		and exclusive representatives which have established
6		collective bargaining relationships or negotiated collective
7		bargaining agreements prior to the effective date of this Act,
8		employers shall be required to bargain collectively with regard
9		to any matter concerning wages (but subject to any applicable
10		restrictions in Section 14-106.5, 15-132.9, 16-122.9, or
11		17-115.5 of the Illinois Pension Code), hours or conditions of
12		employment about which they have bargained for and agreed to in
13		a collective bargaining agreement prior to the effective date
14		of this Act, but excluding the changes, the impact of changes,
15		and the implementation of the changes set forth in Section
16		14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
17		Pension Code.
18		(Source: P.A. 83-1014.)
19		(115 ILCS 5/10.6 new)
20		Sec. 10.6. No collective bargaining or interest
21		arbitration regarding certain changes to the Illinois Pension
22		Code.
23		(a) Notwithstanding any other provision of this Act,
24		employers shall not be required to bargain over matters
25		affected by the changes, the impact of the changes, and the

HB4045 Engrossed - 326 - LRB100 12674 RPS 26063 b
1		implementation of the changes to Article 14, 15, 16, or 17 of
2		the Illinois Pension Code made by the addition of Section
3		14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
4		Pension Code, which are deemed to be prohibited subjects of
5		bargaining. Notwithstanding any provision of this Act, the
6		changes, impact of the changes, or implementation of the
7		changes to Article 14, 15, 16, or 17 of the Illinois Pension
8		Code made by the addition of Section 14-106.5, 15-132.9,
9		16-122.9, or 17-115.5 of the Illinois Pension Code shall not be
10		subject to interest arbitration or any award issued pursuant to
11		interest arbitration. The provisions of this Section shall not
12		apply to an employment contract or collective bargaining
13		agreement that is in effect on the effective date of this
14		amendatory Act of the 100th General Assembly. However, any such
15		contract or agreement that is modified, amended, renewed, or
16		superseded after the effective date of this amendatory Act of
17		the 100th General Assembly shall be subject to the provisions
18		of this Section. The provisions of this Section shall not apply
19		to the ability of any employer and employee representative to
20		bargain collectively with regard to the pick up of employee
21		contributions pursuant to Section 14-133.1, 15-157.1,
22		16-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.
23		(b) Nothing in this Section shall be construed as otherwise
24		limiting any of the obligations and requirements applicable to
25		employers under any of the provisions of this Act, including,
26		but not limited to, the requirement to bargain collectively

HB4045 Engrossed - 327 - LRB100 12674 RPS 26063 b
1		with regard to policy matters directly affecting wages, hours,
2		and terms and conditions of employment as well as the impact
3		thereon upon request by employee representatives, except for
4		the matters set forth in subsection (a) of this Section that
5		are deemed prohibited subjects of bargaining. Nothing in this
6		Section shall be construed as otherwise limiting any of the
7		rights of employees or employee representatives under the
8		provisions of this Act, except for the matters set forth in
9		subsection (a) of this Section that are deemed prohibited
10		subjects of bargaining.
11		(c) In case of any conflict between this Section and any
12		other provisions of this Act or any other law, the provisions
13		of this Section shall control.
14		(115 ILCS 5/14) (from Ch. 48, par. 1714)
15		Sec. 14. Unfair labor practices.
16		(a) Educational employers, their agents or representatives
17		are prohibited from:
18		(1) Interfering, restraining or coercing employees in
19		the exercise of the rights guaranteed under this Act.
20		(2) Dominating or interfering with the formation,
21		existence or administration of any employee organization.
22		(3) Discriminating in regard to hire or tenure of
23		employment or any term or condition of employment to
24		encourage or discourage membership in any employee
25		organization.

HB4045 Engrossed - 328 - LRB100 12674 RPS 26063 b
1		(4) Discharging or otherwise discriminating against an
2		employee because he or she has signed or filed an
3		affidavit, authorization card, petition or complaint or
4		given any information or testimony under this Act.
5		(5) Subject to and except as provided in Section 10.6,
6		refusing Refusing to bargain collectively in good faith
7		with an employee representative which is the exclusive
8		representative of employees in an appropriate unit,
9		including but not limited to the discussing of grievances
10		with the exclusive representative; provided, however, that
11		if an alleged unfair labor practice involves
12		interpretation or application of the terms of a collective
13		bargaining agreement and said agreement contains a
14		grievance and arbitration procedure, the Board may defer
15		the resolution of such dispute to the grievance and
16		arbitration procedure contained in said agreement.
17		However, no actions of the employer taken to implement or
18		otherwise comply with the provisions of subsection (a) of
19		Section 10.6 shall constitute or give rise to an unfair
20		labor practice under this Act.
21		(6) Refusing to reduce a collective bargaining
22		agreement to writing and signing such agreement.
23		(7) Violating any of the rules and regulations
24		promulgated by the Board regulating the conduct of
25		representation elections.
26		(8) Refusing to comply with the provisions of a binding

HB4045 Engrossed - 329 - LRB100 12674 RPS 26063 b
1		arbitration award.
2		(9) Expending or causing the expenditure of public
3		funds to any external agent, individual, firm, agency,
4		partnership or association in any attempt to influence the
5		outcome of representational elections held pursuant to
6		paragraph (c) of Section 7 of this Act; provided, that
7		nothing in this subsection shall be construed to limit an
8		employer's right to be represented on any matter pertaining
9		to unit determinations, unfair labor practice charges or
10		pre-election conferences in any formal or informal
11		proceeding before the Board, or to seek or obtain advice
12		from legal counsel. Nothing in this paragraph shall be
13		construed to prohibit an employer from expending or causing
14		the expenditure of public funds on, or seeking or obtaining
15		services or advice from, any organization, group or
16		association established by, and including educational or
17		public employers, whether or not covered by this Act, the
18		Illinois Public Labor Relations Act or the public
19		employment labor relations law of any other state or the
20		federal government, provided that such services or advice
21		are generally available to the membership of the
22		organization, group, or association, and are not offered
23		solely in an attempt to influence the outcome of a
24		particular representational election.
25		(b) Employee organizations, their agents or
26		representatives or educational employees are prohibited from:

HB4045 Engrossed - 330 - LRB100 12674 RPS 26063 b
1		(1) Restraining or coercing employees in the exercise
2		of the rights guaranteed under this Act, provided that a
3		labor organization or its agents shall commit an unfair
4		labor practice under this paragraph in duty of fair
5		representation cases only by intentional misconduct in
6		representing employees under this Act.
7		(2) Restraining or coercing an educational employer in
8		the selection of his representative for the purposes of
9		collective bargaining or the adjustment of grievances.
10		(3) Refusing to bargain collectively in good faith with
11		an educational employer, if they have been designated in
12		accordance with the provisions of this Act as the exclusive
13		representative of employees in an appropriate unit.
14		(4) Violating any of the rules and regulations
15		promulgated by the Board regulating the conduct of
16		representation elections.
17		(5) Refusing to reduce a collective bargaining
18		agreement to writing and signing such agreement.
19		(6) Refusing to comply with the provisions of a binding
20		arbitration award.
21		(c) The expressing of any views, argument, opinion or the
22		dissemination thereof, whether in written, printed, graphic or
23		visual form, shall not constitute or be evidence of an unfair
24		labor practice under any of the provisions of this Act, if such
25		expression contains no threat of reprisal or force or promise
26		of benefit.

HB4045 Engrossed - 331 - LRB100 12674 RPS 26063 b
1		(d) The actions of a Financial Oversight Panel created
2		pursuant to Section 1A-8 of the School Code due to a district
3		violating a financial plan shall not constitute or be evidence
4		of an unfair labor practice under any of the provisions of this
5		Act. Such actions include, but are not limited to, reviewing,
6		approving, or rejecting a school district budget or a
7		collective bargaining agreement.
8		(Source: P.A. 89-572, eff. 7-30-96.)
9		(115 ILCS 5/17) (from Ch. 48, par. 1717)
10		Sec. 17. Effect on other laws. In case of any conflict
11		between the provisions of this Act and any other law (other
12		than Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the
13		Illinois Pension Code), executive order or administrative
14		regulation, the provisions of this Act shall prevail and
15		control. The provisions of this Act are subject to any
16		applicable restrictions in Section 14-106.5, 15-132.9,
17		16-122.9, or 17-115.5 of the Illinois Pension Code, as well as
18		the changes, impact of changes, and implementation of changes
19		set forth in Section 14-106.5, 15-132.9, 16-122.9, or 17-115.5
20		of the Illinois Pension Code. Nothing in this Act shall be
21		construed to replace or diminish the rights of employees
22		established by Section 36d of "An Act to create the State
23		Universities Civil Service System", approved May 11, 1905, as
24		amended or modified.
25		(Source: P.A. 83-1014.)

HB4045 Engrossed - 332 - LRB100 12674 RPS 26063 b
1		Section 900. The State Mandates Act is amended by adding
2		Section 8.41 as follows:
3		(30 ILCS 805/8.41 new)
4		Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
5		of this Act, no reimbursement by the State is required for the
6		implementation of any mandate created by this amendatory Act of
7		the 100th General Assembly.
8		Section 970. Severability. Except as otherwise provided in
9		this Act, the provisions of this Act are severable under
10		Section 1.31 of the Statute on Statutes.
11		Section 999. Effective date. This Act takes effect upon
12		becoming law.
HB4045 Engrossed - 333 - LRB100 12674 RPS 26063 b 1 INDEX 2 Statutes amended in order of appearance 3 5 ILCS 315/7.6 new 4 5 ILCS 315/10 from Ch. 48, par. 1610 5 5 ILCS 315/15 from Ch. 48, par. 1615 6 5 ILCS 375/3 from Ch. 127, par. 523 7 5 ILCS 375/10 from Ch. 127, par. 530 8 15 ILCS 205/5 new 9 15 ILCS 310/13a new 10 15 ILCS 410/13a new 11 15 ILCS 510/12a new 12 20 ILCS 5/5-647 new 13 30 ILCS 122/20 14 40 ILCS 5/1-160 15 40 ILCS 5/1-161 new 16 40 ILCS 5/1-162 new 17 40 ILCS 5/2-101 from Ch. 108 1/2, par. 2-101 18 40 ILCS 5/2-105 from Ch. 108 1/2, par. 2-105 19 40 ILCS 5/2-105.3 new 20 40 ILCS 5/2-107 from Ch. 108 1/2, par. 2-107 21 40 ILCS 5/2-107.9 new 22 40 ILCS 5/2-107.10 new 23 40 ILCS 5/2-108 from Ch. 108 1/2, par. 2-108 24 40 ILCS 5/2-110.3 new 25 40 ILCS 5/2-119.1 from Ch. 108 1/2, par. 2-119.1 HB4045 Engrossed - 334 - LRB100 12674 RPS 26063 b 1 40 ILCS 5/2-124 from Ch. 108 1/2, par. 2-124 2 40 ILCS 5/2-126 from Ch. 108 1/2, par. 2-126 3 40 ILCS 5/2-134 from Ch. 108 1/2, par. 2-134 4 40 ILCS 5/2-162 5 40 ILCS 5/2-165.1 new 6 40 ILCS 5/2-166.1 new 7 40 ILCS 5/14-103.10 from Ch. 108 1/2, par. 14-103.10 8 40 ILCS 5/14-103.41 new 9 40 ILCS 5/14-103.42 new 10 40 ILCS 5/14-103.43 new 11 40 ILCS 5/14-106.5 new 12 40 ILCS 5/14-114 from Ch. 108 1/2, par. 14-114 13 40 ILCS 5/14-131 14 40 ILCS 5/14-133 from Ch. 108 1/2, par. 14-133 15 40 ILCS 5/14-135.08 from Ch. 108 1/2, par. 14-135.08 16 40 ILCS 5/14-147.5 new 17 40 ILCS 5/14-152.1 18 40 ILCS 5/14-155.1 new 19 40 ILCS 5/14-155.2 new 20 40 ILCS 5/14-156.1 new 21 40 ILCS 5/15-108.1 22 40 ILCS 5/15-108.2 23 40 ILCS 5/15-111 from Ch. 108 1/2, par. 15-111 24 40 ILCS 5/15-112.1 new 25 40 ILCS 5/15-112.2 new 26 40 ILCS 5/15-132.9 new HB4045 Engrossed - 335 - LRB100 12674 RPS 26063 b 1 40 ILCS 5/15-136 from Ch. 108 1/2, par. 15-136 2 40 ILCS 5/15-155 from Ch. 108 1/2, par. 15-155 3 40 ILCS 5/15-157 from Ch. 108 1/2, par. 15-157 4 40 ILCS 5/15-165 from Ch. 108 1/2, par. 15-165 5 40 ILCS 5/15-185.5 new 6 40 ILCS 5/15-198 7 40 ILCS 5/15-200.1 new 8 40 ILCS 5/15-201.1 new 9 40 ILCS 5/16-107.1 new 10 40 ILCS 5/16-121 from Ch. 108 1/2, par. 16-121 11 40 ILCS 5/16-121.1 new 12 40 ILCS 5/16-121.2 new 13 40 ILCS 5/16-122.9 new 14 40 ILCS 5/16-133.1 from Ch. 108 1/2, par. 16-133.1 15 40 ILCS 5/16-136.1 from Ch. 108 1/2, par. 16-136.1 16 40 ILCS 5/16-152 from Ch. 108 1/2, par. 16-152 17 40 ILCS 5/16-158 from Ch. 108 1/2, par. 16-158 18 40 ILCS 5/16-190.5 new 19 40 ILCS 5/16-203 20 40 ILCS 5/16-205.1 new 21 40 ILCS 5/16-206.1 new 22 40 ILCS 5/17-106.05 new 23 40 ILCS 5/17-113.4 new 24 40 ILCS 5/17-113.5 new 25 40 ILCS 5/17-113.6 new 26 40 ILCS 5/17-115.5 new HB4045 Engrossed - 336 - LRB100 12674 RPS 26063 b 1 40 ILCS 5/17-116 from Ch. 108 1/2, par. 17-116 2 40 ILCS 5/17-119.2 new 3 40 ILCS 5/17-127 from Ch. 108 1/2, par. 17-127 4 40 ILCS 5/17-129 from Ch. 108 1/2, par. 17-129 5 40 ILCS 5/17-130 from Ch. 108 1/2, par. 17-130 6 40 ILCS 5/18-131 from Ch. 108 1/2, par. 18-131 7 40 ILCS 5/18-140 from Ch. 108 1/2, par. 18-140 8 40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121 9 40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123 10 40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124 11 40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125 12 40 ILCS 5/2-165 rep. 13 40 ILCS 5/2-166 rep. 14 40 ILCS 5/14-155 rep. 15 40 ILCS 5/14-156 rep. 16 40 ILCS 5/15-200 rep. 17 40 ILCS 5/15-201 rep. 18 40 ILCS 5/16-205 rep. 19 40 ILCS 5/16-206 rep. 20 40 ILCS 15/1.1 21 40 ILCS 15/1.9 new 22 105 ILCS 5/24-1 from Ch. 122, par. 24-1 23 105 ILCS 5/24-8 from Ch. 122, par. 24-8 24 105 ILCS 5/34-18.53 new 25 110 ILCS 70/36d from Ch. 24 1/2, par. 38b3 26 110 ILCS 305/100 new HB4045 Engrossed - 337 - LRB100 12674 RPS 26063 b