Bill Text: IL HB5644 | 2011-2012 | 97th General Assembly | Introduced
Bill Title: Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Authorizes the corporate authorities of a participating municipality to elect, by a duly authorized resolution or ordinance, to calculate actuarial liabilities using a 30-year rolling amortization period.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2013-01-08 - Session Sine Die [HB5644 Detail]
Download: Illinois-2011-HB5644-Introduced.html
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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by changing | ||||||||||||||||||||||||||
5 | Sections 3-125 and 4-118 as follows:
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6 | (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
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7 | Sec. 3-125. Financing. | ||||||||||||||||||||||||||
8 | (a) The city council or the board of trustees of
the | ||||||||||||||||||||||||||
9 | municipality shall annually levy a tax upon all
the taxable | ||||||||||||||||||||||||||
10 | property of the municipality at the rate on the dollar which
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11 | will produce an amount which, when added to the deductions from | ||||||||||||||||||||||||||
12 | the salaries
or wages of police officers, and revenues
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13 | available from other
sources, will equal a sum sufficient to | ||||||||||||||||||||||||||
14 | meet
the annual requirements of the police pension fund. The | ||||||||||||||||||||||||||
15 | annual
requirements to be provided by such tax levy are equal
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16 | to (1) the normal cost of the pension fund for the year | ||||||||||||||||||||||||||
17 | involved, plus
(2) either (i) in the case of a participating | ||||||||||||||||||||||||||
18 | municipality that has elected a 30-year rolling amortization | ||||||||||||||||||||||||||
19 | period pursuant to subsection (f) of this Section, an amount | ||||||||||||||||||||||||||
20 | sufficient to bring the total assets of the pension fund up to | ||||||||||||||||||||||||||
21 | 90% of the total actuarial liabilities of the pension fund | ||||||||||||||||||||||||||
22 | within 30 years, as annually updated and determined by an | ||||||||||||||||||||||||||
23 | enrolled actuary employed by the Illinois Department of |
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1 | Insurance or by an enrolled actuary retained by the pension | ||||||
2 | fund or the municipality, or (ii) in all other cases, an amount | ||||||
3 | sufficient to bring the total assets of the pension fund up to | ||||||
4 | 90% of the total actuarial liabilities of the pension fund by | ||||||
5 | the end of municipal fiscal year 2040, as annually updated and | ||||||
6 | determined by an enrolled actuary employed by the Illinois | ||||||
7 | Department of Insurance or by an enrolled actuary retained by | ||||||
8 | the pension fund or the municipality. In making these | ||||||
9 | determinations, the required minimum employer contribution | ||||||
10 | shall be calculated each year as a level percentage of payroll | ||||||
11 | over the years remaining up to and including fiscal year 2040 | ||||||
12 | and shall be determined under the projected unit credit | ||||||
13 | actuarial cost method. The tax shall be levied and
collected in | ||||||
14 | the same manner as the general taxes
of the municipality, and | ||||||
15 | in addition to all other taxes now or hereafter authorized to
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16 | be levied upon all property within the municipality, and shall | ||||||
17 | be in
addition to the amount authorized to be levied for | ||||||
18 | general purposes as
provided by Section 8-3-1 of the Illinois | ||||||
19 | Municipal Code, approved May
29, 1961, as amended. The tax | ||||||
20 | shall be forwarded directly to the treasurer of the board | ||||||
21 | within 30 business days after receipt by the county.
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22 | (b) For purposes of determining the required employer | ||||||
23 | contribution to a pension fund, the value of the pension fund's | ||||||
24 | assets shall be equal to the actuarial value of the pension | ||||||
25 | fund's assets, which shall be calculated as follows: | ||||||
26 | (1) On March 30, 2011, the actuarial value of a pension |
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1 | fund's assets shall be equal to the market value of the | ||||||
2 | assets as of that date. | ||||||
3 | (2) In determining the actuarial value of the System's | ||||||
4 | assets for fiscal years after March 30, 2011, any actuarial | ||||||
5 | gains or losses from investment return incurred in a fiscal | ||||||
6 | year shall be recognized in equal annual amounts over the | ||||||
7 | 5-year period following that fiscal year. | ||||||
8 | (c) If a participating municipality fails to transmit to | ||||||
9 | the fund contributions required of it under this Article for | ||||||
10 | more than 90 days after the payment of those contributions is | ||||||
11 | due, the fund may, after giving notice to the municipality, | ||||||
12 | certify to the State Comptroller the amounts of the delinquent | ||||||
13 | payments, and the Comptroller must, beginning in fiscal year | ||||||
14 | 2016, deduct and deposit into the fund the certified amounts or | ||||||
15 | a portion of those amounts from the following proportions of | ||||||
16 | grants of State funds to the municipality: | ||||||
17 | (1) in fiscal year 2016, one-third of the total amount | ||||||
18 | of any grants of State funds to the municipality; | ||||||
19 | (2) in fiscal year 2017, two-thirds of the total amount | ||||||
20 | of any grants of State funds to the municipality; and | ||||||
21 | (3) in fiscal year 2018 and each fiscal year | ||||||
22 | thereafter, the total amount of any grants of State funds | ||||||
23 | to the municipality. | ||||||
24 | The State Comptroller may not deduct from any grants of | ||||||
25 | State funds to the municipality more than the amount of | ||||||
26 | delinquent payments certified to the State Comptroller by the |
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1 | fund. | ||||||
2 | (d) The police pension fund shall consist of the following | ||||||
3 | moneys which
shall be set apart by the treasurer of the | ||||||
4 | municipality:
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5 | (1) All moneys derived from the taxes levied hereunder;
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6 | (2) Contributions by police officers under Section | ||||||
7 | 3-125.1;
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8 | (3) All moneys accumulated by the municipality under | ||||||
9 | any previous
legislation establishing a fund for the | ||||||
10 | benefit of disabled or retired
police officers;
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11 | (4) Donations, gifts or other transfers authorized by | ||||||
12 | this
Article.
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13 | (e) The Commission on Government Forecasting and
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14 | Accountability shall conduct a study of all funds established
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15 | under this Article and shall report its findings to the General
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16 | Assembly on or before January 1, 2013. To the fullest extent | ||||||
17 | possible, the study shall include, but not be limited to, the | ||||||
18 | following: | ||||||
19 | (1) fund balances; | ||||||
20 | (2) historical employer contribution rates for each
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21 | fund; | ||||||
22 | (3) the actuarial formulas used as a basis for employer
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23 | contributions, including the actual assumed rate of return
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24 | for each year, for each fund; | ||||||
25 | (4) available contribution funding sources; | ||||||
26 | (5) the impact of any revenue limitations caused by
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1 | PTELL and employer home rule or non-home rule status; and | ||||||
2 | (6) existing statutory funding compliance procedures
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3 | and funding enforcement mechanisms for all municipal
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4 | pension funds. | ||||||
5 | (f) Beginning on the effective date of this amendatory Act | ||||||
6 | of the 97th General Assembly, the corporate authorities of a | ||||||
7 | participating municipality may, by a duly authorized | ||||||
8 | resolution or ordinance, elect to use a 30-year rolling | ||||||
9 | amortization period to calculate actuarial liabilities under | ||||||
10 | subsection (a) of this Section. | ||||||
11 | (Source: P.A. 95-530, eff. 8-28-07; 96-1495, eff. 1-1-11.)
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12 | (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
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13 | Sec. 4-118. Financing.
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14 | (a) The city council or the board of trustees
of the | ||||||
15 | municipality shall annually levy a tax upon all the taxable | ||||||
16 | property
of the municipality at the rate on the dollar which | ||||||
17 | will produce an amount
which, when added to the deductions from | ||||||
18 | the salaries or wages of
firefighters and revenues available | ||||||
19 | from other sources, will equal a sum
sufficient to meet the | ||||||
20 | annual actuarial requirements of the pension fund,
as | ||||||
21 | determined by an enrolled actuary employed by the Illinois | ||||||
22 | Department of
Insurance or by an enrolled actuary retained by | ||||||
23 | the pension fund or
municipality. For the purposes of this | ||||||
24 | Section, the annual actuarial
requirements of the pension fund | ||||||
25 | are equal to (1) the normal cost of the
pension fund, or 17.5% |
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1 | of the salaries and wages to be paid to firefighters
for the | ||||||
2 | year involved, whichever is greater, plus (2) either (i) in the | ||||||
3 | case of a participating municipality that has elected a 30-year | ||||||
4 | rolling amortization period pursuant to subsection (h) of this | ||||||
5 | Section, an amount sufficient to bring the total assets of the | ||||||
6 | pension fund up to 90% of the total actuarial liabilities of | ||||||
7 | the pension fund within 30 years, as annually updated and | ||||||
8 | determined by an enrolled actuary employed by the Illinois | ||||||
9 | Department of Insurance or by an enrolled actuary retained by | ||||||
10 | the pension fund or the municipality, or (ii) in all other | ||||||
11 | cases, an annual amount
sufficient to bring the total assets of | ||||||
12 | the pension fund up to 90% of the total actuarial liabilities | ||||||
13 | of the pension fund by the end of municipal fiscal year 2040, | ||||||
14 | as annually updated and determined by an enrolled actuary | ||||||
15 | employed by the Illinois Department of Insurance or by an | ||||||
16 | enrolled actuary retained by the pension fund or the | ||||||
17 | municipality. In making these determinations, the required | ||||||
18 | minimum employer contribution shall be calculated each year as | ||||||
19 | a level percentage of payroll over the years remaining up to | ||||||
20 | and including fiscal year 2040 and shall be determined under | ||||||
21 | the projected unit credit actuarial cost method. The amount
to | ||||||
22 | be applied towards the amortization of the unfunded accrued | ||||||
23 | liability in any
year shall not be less than the annual amount | ||||||
24 | required to amortize the unfunded
accrued liability, including | ||||||
25 | interest, as a level percentage of payroll over
the number of | ||||||
26 | years remaining in the 40 year amortization period.
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1 | (a-5) For purposes of determining the required employer | ||||||
2 | contribution to a pension fund, the value of the pension fund's | ||||||
3 | assets shall be equal to the actuarial value of the pension | ||||||
4 | fund's assets, which shall be calculated as follows: | ||||||
5 | (1) On March 30, 2011, the actuarial value of a pension | ||||||
6 | fund's assets shall be equal to the market value of the | ||||||
7 | assets as of that date. | ||||||
8 | (2) In determining the actuarial value of the pension | ||||||
9 | fund's assets for fiscal years after March 30, 2011, any | ||||||
10 | actuarial gains or losses from investment return incurred | ||||||
11 | in a fiscal year shall be recognized in equal annual | ||||||
12 | amounts over the 5-year period following that fiscal year. | ||||||
13 | (b) The tax shall be levied and collected in the same | ||||||
14 | manner
as the general taxes of the municipality, and shall be | ||||||
15 | in addition
to all other taxes now or hereafter authorized to | ||||||
16 | be levied upon all
property within the municipality, and in | ||||||
17 | addition to the amount authorized
to be levied for general | ||||||
18 | purposes, under Section 8-3-1 of the Illinois
Municipal Code or | ||||||
19 | under Section 14 of the Fire Protection District Act. The
tax | ||||||
20 | shall be forwarded directly to the treasurer of the board | ||||||
21 | within 30
business days of receipt by the county
(or, in the | ||||||
22 | case of amounts
added to the tax levy under subsection (f), | ||||||
23 | used by the municipality to pay the
employer contributions | ||||||
24 | required under subsection (b-1) of Section 15-155 of
this | ||||||
25 | Code).
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26 | (b-5) If a participating municipality fails to transmit to |
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1 | the fund contributions required of it under this Article for | ||||||
2 | more than 90 days after the payment of those contributions is | ||||||
3 | due, the fund may, after giving notice to the municipality, | ||||||
4 | certify to the State Comptroller the amounts of the delinquent | ||||||
5 | payments, and the Comptroller must, beginning in fiscal year | ||||||
6 | 2016, deduct and deposit into the fund the certified amounts or | ||||||
7 | a portion of those amounts from the following proportions of | ||||||
8 | grants of State funds to the municipality: | ||||||
9 | (1) in fiscal year 2016, one-third of the total amount | ||||||
10 | of any grants of State funds to the municipality; | ||||||
11 | (2) in fiscal year 2017, two-thirds of the total amount | ||||||
12 | of any grants of State funds to the municipality; and | ||||||
13 | (3) in fiscal year 2018 and each fiscal year | ||||||
14 | thereafter, the total amount of any grants of State funds | ||||||
15 | to the municipality. | ||||||
16 | The State Comptroller may not deduct from any grants of | ||||||
17 | State funds to the municipality more than the amount of | ||||||
18 | delinquent payments certified to the State Comptroller by the | ||||||
19 | fund. | ||||||
20 | (c) The board shall make available to the membership and | ||||||
21 | the general public
for inspection and copying at reasonable | ||||||
22 | times the most recent Actuarial
Valuation Balance Sheet and Tax | ||||||
23 | Levy Requirement issued to the fund by the
Department of | ||||||
24 | Insurance.
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25 | (d) The firefighters' pension fund shall consist of the | ||||||
26 | following moneys
which shall be set apart by the treasurer of |
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1 | the municipality: (1) all
moneys derived from the taxes levied | ||||||
2 | hereunder; (2) contributions
by firefighters as provided under | ||||||
3 | Section 4-118.1; (3) all
rewards in money, fees, gifts, and | ||||||
4 | emoluments that may be paid or given
for or on account of | ||||||
5 | extraordinary service by the fire department or any
member | ||||||
6 | thereof, except when allowed to be retained by competitive | ||||||
7 | awards;
and (4) any money, real estate or personal property | ||||||
8 | received by the board.
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9 | (e) For the purposes of this Section, "enrolled actuary" | ||||||
10 | means an actuary:
(1) who is a member of the Society of | ||||||
11 | Actuaries or the American
Academy of Actuaries; and (2) who is | ||||||
12 | enrolled under Subtitle
C of Title III of the Employee | ||||||
13 | Retirement Income Security Act of 1974, or
who has been engaged | ||||||
14 | in providing actuarial services to one or more public
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15 | retirement systems for a period of at least 3 years as of July | ||||||
16 | 1, 1983.
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17 | (f) The corporate authorities of a municipality that | ||||||
18 | employs a person
who is described in subdivision (d) of Section | ||||||
19 | 4-106 may add to the tax levy
otherwise provided for in this | ||||||
20 | Section an amount equal to the projected cost of
the employer | ||||||
21 | contributions required to be paid by the municipality to the | ||||||
22 | State
Universities Retirement System under subsection (b-1) of | ||||||
23 | Section 15-155 of this
Code. | ||||||
24 | (g) The Commission on Government Forecasting and
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25 | Accountability shall conduct a study of all funds established
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26 | under this Article and shall report its findings to the General
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1 | Assembly on or before January 1, 2013. To the fullest extent | ||||||
2 | possible, the study shall include, but not be limited to, the | ||||||
3 | following: | ||||||
4 | (1) fund balances; | ||||||
5 | (2) historical employer contribution rates for each
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6 | fund; | ||||||
7 | (3) the actuarial formulas used as a basis for employer
| ||||||
8 | contributions, including the actual assumed rate of return
| ||||||
9 | for each year, for each fund; | ||||||
10 | (4) available contribution funding sources; | ||||||
11 | (5) the impact of any revenue limitations caused by
| ||||||
12 | PTELL and employer home rule or non-home rule status; and | ||||||
13 | (6) existing statutory funding compliance procedures
| ||||||
14 | and funding enforcement mechanisms for all municipal
| ||||||
15 | pension funds.
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16 | (h) Beginning on the effective date of this amendatory Act | ||||||
17 | of the 97th General Assembly, the corporate authorities of a | ||||||
18 | participating municipality may, by a duly authorized | ||||||
19 | resolution or ordinance, elect to use a 30-year rolling | ||||||
20 | amortization period to calculate actuarial liabilities under | ||||||
21 | subsection (a) of this Section. | ||||||
22 | (Source: P.A. 96-1495, eff. 1-1-11.)
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