Bill Text: IL HB4078 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that for fiscal years 2022 through 2040, a municipality is not required to contribute at a rate greater than the rate sufficient to bring the total actuarial assets of the Fund to 80% of the total actuarial liabilities of the Fund by the end of fiscal year 2040. Provides that for fiscal year 2041 and each fiscal year thereafter, a municipality is not required to contribute at a rate greater than the rate sufficient to the bring the total actuarial assets of the Fund to 80% of the total actuarial liabilities of the Fund by the end of that fiscal year. Excludes the payment of employee contributions by the municipality from the provisions. Amends the State Mandates Act to require implementation without reimbursement. Effective January 1, 2022.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB4078 Detail]

Download: Illinois-2019-HB4078-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB4078 Introduced , by Rep. La Shawn K. Ford SYNOPSIS AS INTRODUCED:
40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172
30 ILCS 805/8.44 new
Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that for fiscal years 2022 through 2040, a municipality is not required to contribute at a rate greater than the rate sufficient to bring the total actuarial assets of the Fund to 80% of the total actuarial liabilities of the Fund by the end of fiscal year 2040. Provides that for fiscal year 2041 and each fiscal year thereafter, a municipality is not required to contribute at a rate greater than the rate sufficient to the bring the total actuarial assets of the Fund to 80% of the total actuarial liabilities of the Fund by the end of that fiscal year. Excludes the payment of employee contributions by the municipality from the provisions. Amends the State Mandates Act to require implementation without reimbursement. Effective January 1, 2022.
LRB101 16489 RPS 65870 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
HB4078 LRB101 16489 RPS 65870 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Section 7-172 as follows:
(40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
Sec. 7-172. Contributions by participating municipalities
and participating instrumentalities.
(a) Each participating municipality and each participating
instrumentality shall make payment to the fund as follows:
1. except as provided in subsection (d-5),
municipality contributions in an amount determined by
applying the municipality contribution rate to each
payment of earnings paid to each of its participating
employees;
2. an amount equal to the employee contributions
provided by paragraph (a) of Section 7-173, whether or not
the employee contributions are withheld as permitted by
that Section;
3. all accounts receivable, together with interest
charged thereon, as provided in Section 7-209, and any
amounts due under subsection (a-5) of Section 7-144;
4. if it has no participating employees with current

HB4078 - 2 - LRB101 16489 RPS 65870 b
earnings, an amount payable which, over a closed period of
20 years for participating municipalities and 10 years for
participating instrumentalities, will amortize, at the
effective rate for that year, any unfunded obligation. The
unfunded obligation shall be computed as provided in
paragraph 2 of subsection (b);
5. if it has fewer than 7 participating employees or a
negative balance in its municipality reserve, the greater
of (A) an amount payable that, over a period of 20 years,
will amortize at the effective rate for that year any
unfunded obligation, computed as provided in paragraph 2 of
subsection (b) or (B) the amount required by paragraph 1 of
this subsection (a).
(b) A separate municipality contribution rate shall be
determined for each calendar year for all participating
municipalities together with all instrumentalities thereof.
The municipality contribution rate shall be determined for
participating instrumentalities as if they were participating
municipalities. The municipality contribution rate shall be
the sum of the following percentages:
1. The percentage of earnings of all the participating
employees of all participating municipalities and
participating instrumentalities which, if paid over the
entire period of their service, will be sufficient when
combined with all employee contributions available for the
payment of benefits, to provide all annuities for

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participating employees, and the $3,000 death benefit
payable under Sections 7-158 and 7-164, such percentage to
be known as the normal cost rate.
2. The percentage of earnings of the participating
employees of each participating municipality and
participating instrumentalities necessary to adjust for
the difference between the present value of all benefits,
excluding temporary and total and permanent disability and
death benefits, to be provided for its participating
employees and the sum of its accumulated municipality
contributions and the accumulated employee contributions
and the present value of expected future employee and
municipality contributions pursuant to subparagraph 1 of
this paragraph (b). This adjustment shall be spread over a
period determined by the Board, not to exceed 30 years for
participating municipalities or 10 years for participating
instrumentalities.
3. The percentage of earnings of the participating
employees of all municipalities and participating
instrumentalities necessary to provide the present value
of all temporary and total and permanent disability
benefits granted during the most recent year for which
information is available.
4. The percentage of earnings of the participating
employees of all participating municipalities and
participating instrumentalities necessary to provide the

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present value of the net single sum death benefits expected
to become payable from the reserve established under
Section 7-206 during the year for which this rate is fixed.
5. The percentage of earnings necessary to meet any
deficiency arising in the Terminated Municipality Reserve.
(c) A separate municipality contribution rate shall be
computed for each participating municipality or participating
instrumentality for its sheriff's law enforcement employees.
A separate municipality contribution rate shall be
computed for the sheriff's law enforcement employees of each
forest preserve district that elects to have such employees.
For the period from January 1, 1986 to December 31, 1986, such
rate shall be the forest preserve district's regular rate plus
2%.
In the event that the Board determines that there is an
actuarial deficiency in the account of any municipality with
respect to a person who has elected to participate in the Fund
under Section 3-109.1 of this Code, the Board may adjust the
municipality's contribution rate so as to make up that
deficiency over such reasonable period of time as the Board may
determine.
(d) The Board may establish a separate municipality
contribution rate for all employees who are program
participants employed under the federal Comprehensive
Employment Training Act by all of the participating
municipalities and instrumentalities. The Board may also

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provide that, in lieu of a separate municipality rate for these
employees, a portion of the municipality contributions for such
program participants shall be refunded or an extra charge
assessed so that the amount of municipality contributions
retained or received by the fund for all CETA program
participants shall be an amount equal to that which would be
provided by the separate municipality contribution rate for all
such program participants. Refunds shall be made to prime
sponsors of programs upon submission of a claim therefor and
extra charges shall be assessed to participating
municipalities and instrumentalities. In establishing the
municipality contribution rate as provided in paragraph (b) of
this Section, the use of a separate municipality contribution
rate for program participants or the refund of a portion of the
municipality contributions, as the case may be, may be
considered.
(d-5) Notwithstanding any other provision of law, for
fiscal years 2022 through 2040, a municipality is not required
to contribute at a rate greater than the rate sufficient to
bring the total actuarial assets of the Fund to 80% of the
total actuarial liabilities of the Fund by the end of fiscal
year 2040.
Notwithstanding any other provision of law, for fiscal year
2041 and each fiscal year thereafter, a municipality is not
required to contribute at a rate greater than the rate
sufficient to the bring the total actuarial assets of the Fund

HB4078 - 6 - LRB101 16489 RPS 65870 b
to 80% of the total actuarial liabilities of the Fund by the
end of that fiscal year.
This subsection does not apply to the payment of employee
contributions by the municipality.
(e) Computations of municipality contribution rates for
the following calendar year shall be made prior to the
beginning of each year, from the information available at the
time the computations are made, and on the assumption that the
employees in each participating municipality or participating
instrumentality at such time will continue in service until the
end of such calendar year at their respective rates of earnings
at such time.
(f) Any municipality which is the recipient of State
allocations representing that municipality's contributions for
retirement annuity purposes on behalf of its employees as
provided in Section 12-21.16 of the Illinois Public Aid Code
shall pay the allocations so received to the Board for such
purpose. Estimates of State allocations to be received during
any taxable year shall be considered in the determination of
the municipality's tax rate for that year under Section 7-171.
If a special tax is levied under Section 7-171, none of the
proceeds may be used to reimburse the municipality for the
amount of State allocations received and paid to the Board. Any
multiple-county or consolidated health department which
receives contributions from a county under Section 11.2 of "An
Act in relation to establishment and maintenance of county and

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multiple-county health departments", approved July 9, 1943, as
amended, or distributions under Section 3 of the Department of
Public Health Act, shall use these only for municipality
contributions by the health department.
(g) Municipality contributions for the several purposes
specified shall, for township treasurers and employees in the
offices of the township treasurers who meet the qualifying
conditions for coverage hereunder, be allocated among the
several school districts and parts of school districts serviced
by such treasurers and employees in the proportion which the
amount of school funds of each district or part of a district
handled by the treasurer bears to the total amount of all
school funds handled by the treasurer.
From the funds subject to allocation among districts and
parts of districts pursuant to the School Code, the trustees
shall withhold the proportionate share of the liability for
municipality contributions imposed upon such districts by this
Section, in respect to such township treasurers and employees
and remit the same to the Board.
The municipality contribution rate for an educational
service center shall initially be the same rate for each year
as the regional office of education or school district which
serves as its administrative agent. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
The municipality contribution rate for a public agency,

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other than a vocational education cooperative, formed under the
Intergovernmental Cooperation Act shall initially be the
average rate for the municipalities which are parties to the
intergovernmental agreement. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
(h) Each participating municipality and participating
instrumentality shall make the contributions in the amounts
provided in this Section in the manner prescribed from time to
time by the Board and all such contributions shall be
obligations of the respective participating municipalities and
participating instrumentalities to this fund. The failure to
deduct any employee contributions shall not relieve the
participating municipality or participating instrumentality of
its obligation to this fund. Delinquent payments of
contributions due under this Section may, with interest, be
recovered by civil action against the participating
municipalities or participating instrumentalities.
Municipality contributions, other than the amount necessary
for employee contributions, for periods of service by employees
from whose earnings no deductions were made for employee
contributions to the fund, may be charged to the municipality
reserve for the municipality or participating instrumentality.
(i) Contributions by participating instrumentalities shall
be determined as provided herein except that the percentage
derived under subparagraph 2 of paragraph (b) of this Section,

HB4078 - 9 - LRB101 16489 RPS 65870 b
and the amount payable under subparagraph 4 of paragraph (a) of
this Section, shall be based on an amortization period of 10
years.
(j) Notwithstanding the other provisions of this Section,
the additional unfunded liability accruing as a result of
Public Act 94-712 shall be amortized over a period of 30 years
beginning on January 1 of the second calendar year following
the calendar year in which Public Act 94-712 takes effect,
except that the employer may provide for a longer amortization
period by adopting a resolution or ordinance specifying a
35-year or 40-year period and submitting a certified copy of
the ordinance or resolution to the fund no later than June 1 of
the calendar year following the calendar year in which Public
Act 94-712 takes effect.
(k) If the amount of a participating employee's reported
earnings for any of the 12-month periods used to determine the
final rate of earnings exceeds the employee's 12-month reported
earnings with the same employer for the previous year by the
greater of 6% or 1.5 times the annual increase in the Consumer
Price Index-U, as established by the United States Department
of Labor for the preceding September, the participating
municipality or participating instrumentality that paid those
earnings shall pay to the Fund, in addition to any other
contributions required under this Article, the present value of
the increase in the pension resulting from the portion of the
increase in reported earnings that is in excess of the greater

HB4078 - 10 - LRB101 16489 RPS 65870 b
of 6% or 1.5 times the annual increase in the Consumer Price
Index-U, as determined by the Fund. This present value shall be
computed on the basis of the actuarial assumptions and tables
used in the most recent actuarial valuation of the Fund that is
available at the time of the computation.
Whenever it determines that a payment is or may be required
under this subsection (k), the fund shall calculate the amount
of the payment and bill the participating municipality or
participating instrumentality for that amount. The bill shall
specify the calculations used to determine the amount due. If
the participating municipality or participating
instrumentality disputes the amount of the bill, it may, within
30 days after receipt of the bill, apply to the fund in writing
for a recalculation. The application must specify in detail the
grounds of the dispute. Upon receiving a timely application for
recalculation, the fund shall review the application and, if
appropriate, recalculate the amount due. The participating
municipality and participating instrumentality contributions
required under this subsection (k) may be paid in the form of a
lump sum within 90 days after receipt of the bill. If the
participating municipality and participating instrumentality
contributions are not paid within 90 days after receipt of the
bill, then interest will be charged at a rate equal to the
fund's annual actuarially assumed rate of return on investment
compounded annually from the 91st day after receipt of the
bill. Payments must be concluded within 3 years after receipt

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of the bill by the participating municipality or participating
instrumentality.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from overload or overtime earnings.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from payments for unused vacation time, but only for
payments for unused vacation time made in the final 3 months of
the final rate of earnings period.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings increases
attributable to standard employment promotions resulting in
increased responsibility and workload.
This subsection (k) does not apply to earnings increases
paid to individuals under contracts or collective bargaining
agreements entered into, amended, or renewed before January 1,
2012 (the effective date of Public Act 97-609), earnings
increases paid to members who are 10 years or more from
retirement eligibility, or earnings increases resulting from
an increase in the number of hours required to be worked.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings
attributable to personnel policies adopted before January 1,
2012 (the effective date of Public Act 97-609) as long as those
policies are not applicable to employees who begin service on

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or after January 1, 2012 (the effective date of Public Act
97-609).
The change made to this Section by Public Act 100-139 is a
clarification of existing law and is intended to be retroactive
to January 1, 2012 (the effective date of Public Act 97-609).
(Source: P.A. 99-745, eff. 8-5-16; 100-139, eff. 8-18-17;
100-411, eff. 8-25-17; 100-863, eff. 8-14-18.)
Section 90. The State Mandates Act is amended by adding
Section 8.44 as follows:
(30 ILCS 805/8.44 new)
Sec. 8.44. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 101st General Assembly.
Section 99. Effective date. This Act takes effect January
1, 2022.