Bill Text: IL SB1292 | 2009-2010 | 96th General Assembly | Enrolled

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Bill Title: Amends the Illinois Pension Code. Requires each retirement system to establish a policy with the goal of increasing the racial, ethnic, and gender diversity of its fiduciaries, update the goals annually, and submit a report to the Governor and General Assembly by September 1 of each year.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Passed) 2009-07-15 - Public Act . . . . . . . . . 96-0043 [SB1292 Detail]

Download: Illinois-2009-SB1292-Enrolled.html

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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Legislative intention; assist our most
vulnerable citizens. It is the intention of the General
Assembly in enacting this legislation that, by applying
$2,230,000,000 of the net proceeds of the sale of general
obligation bonds authorized by this amendatory Act of the 96th
General Assembly to fund pension obligations of the State, an
equivalent amount will be appropriated from the General Revenue
Fund to the Office of the Governor to be directed to State
agencies, in the discretion of and as determined by the
Governor and upon written direction of the Governor to the
Comptroller, to be expended for operational expenses, awards,
grants, and permanent improvements to fund programs and
services provided by community-based human service providers
and for State-funded human service programs to ensure that we
continue assisting the most vulnerable of our citizens.
Section 5. The General Obligation Bond Act is amended by
changing Sections 2, 2.5, 7.2, 9, 11, and 15 as follows:
(30 ILCS 330/2) (from Ch. 127, par. 652)
Sec. 2. Authorization for Bonds. The State of Illinois is

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authorized to issue, sell and provide for the retirement of
General Obligation Bonds of the State of Illinois for the
categories and specific purposes expressed in Sections 2
through 8 of this Act, in the total amount of $34,159,149,369
$30,693,149,369.
The bonds authorized in this Section 2 and in Section 16 of
this Act are herein called "Bonds".
Of the total amount of Bonds authorized in this Act, up to
$2,200,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Baccalaureate Savings
Act in the form of General Obligation College Savings Bonds.
Of the total amount of Bonds authorized in this Act, up to
$300,000,000 in aggregate original principal amount may be
issued and sold in accordance with the Retirement Savings Act
in the form of General Obligation Retirement Savings Bonds.
Of the total amount of Bonds authorized in this Act, the
additional $10,000,000,000 authorized by Public Act 93-2 and
the $3,466,000,000 authorized by this amendatory Act of the
96th General Assembly this amendatory Act of the 93rd General
Assembly shall be used solely as provided in Section 7.2.
The issuance and sale of Bonds pursuant to the General
Obligation Bond Act is an economical and efficient method of
financing the long-term capital needs of the State. This Act
will permit the issuance of a multi-purpose General Obligation
Bond with uniform terms and features. This will not only lower
the cost of registration but also reduce the overall cost of

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issuing debt by improving the marketability of Illinois General
Obligation Bonds.
(Source: P.A. 95-1026, eff. 1-12-09; 96-5, eff. 4-3-09.)
(30 ILCS 330/2.5)
Sec. 2.5. Limitation on issuance of Bonds.
(a) Except as provided in subsection (b), no Bonds may be
issued if, after the issuance, in the next State fiscal year
after the issuance of the Bonds, the amount of debt service
(including principal, whether payable at maturity or pursuant
to mandatory sinking fund installments, and interest) on all
then-outstanding Bonds, other than Bonds authorized by this
amendatory Act of the 96th General Assembly, would exceed 7% of
the aggregate appropriations from the general funds (which
consist of the General Revenue Fund, the Common School Fund,
the General Revenue Common School Special Account Fund, and the
Education Assistance Fund) and the Road Fund for the fiscal
year immediately prior to the fiscal year of the issuance.
(b) If the Comptroller and Treasurer each consent in
writing, Bonds may be issued even if the issuance does not
comply with subsection (a).
(Source: P.A. 93-839, eff. 7-30-04.)
(30 ILCS 330/7.2)
Sec. 7.2. State pension funding.
(a) The amount of $10,000,000,000 is authorized to be used

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for the purpose of making contributions to the designated
retirement systems. For the purposes of this Section,
"designated retirement systems" means the State Employees'
Retirement System of Illinois; the Teachers' Retirement System
of the State of Illinois; the State Universities Retirement
System; the Judges Retirement System of Illinois; and the
General Assembly Retirement System.
The amount of $3,466,000,000 of Bonds authorized by this
amendatory Act of the 96th General Assembly is authorized to be
used for the purpose of making a portion of the State's Fiscal
Year 2010 required contributions to the designated retirement
systems.
(b) The Pension Contribution Fund is created as a special
fund in the State Treasury.
The proceeds of the additional $10,000,000,000 of Bonds
authorized by Public Act 93-2 this amendatory Act of the 93rd
General Assembly, less the amounts authorized in the Bond Sale
Order to be deposited directly into the capitalized interest
account of the General Obligation Bond Retirement and Interest
Fund or otherwise directly paid out for bond sale expenses
under Section 8, shall be deposited into the Pension
Contribution Fund and used as provided in this Section.
The proceeds of the additional $3,466,000,000 of Bonds
authorized by this amendatory Act of the 96th General Assembly,
less the amounts directly paid out for bond sale expenses under
Section 8, shall be deposited into the Pension Contribution

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Fund, and the Comptroller and the Treasurer shall, as soon as
practical, (i) first, transfer from the Pension Contribution
Fund to the General Revenue Fund or Common School Fund an
amount equal to the amount of payments, if any, made to the
designated retirement systems from the General Revenue Fund or
Common School Fund in State fiscal year 2010 and (ii) second,
make transfers from the Pension Contribution Fund to the
designated retirement systems pursuant to Sections 2-124,
14-131, 15-155, 16-158, and 18-131 of the Illinois Pension
Code.
(c) Of the amount of Bond proceeds from the bond sale
authorized by Public Act 93-2 first deposited into the Pension
Contribution Fund, there shall be reserved for transfers under
this subsection the sum of $300,000,000, representing the
required State contributions to the designated retirement
systems for the last quarter of State fiscal year 2003, plus
the sum of $1,860,000,000, representing the required State
contributions to the designated retirement systems for State
fiscal year 2004.
Upon the deposit of sufficient moneys from the bond sale
authorized by Public Act 93-2 into the Pension Contribution
Fund, the Comptroller and Treasurer shall immediately transfer
the sum of $300,000,000 from the Pension Contribution Fund to
the General Revenue Fund.
Whenever any payment of required State contributions for
State fiscal year 2004 is made to one of the designated

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retirement systems, the Comptroller and Treasurer shall, as
soon as practicable, transfer from the Pension Contribution
Fund to the General Revenue Fund an amount equal to the amount
of that payment to the designated retirement system. Beginning
on the effective date of this amendatory Act of the 93rd
General Assembly, the transfers from the Pension Contribution
Fund to the General Revenue Fund shall be suspended until June
30, 2004, and the remaining balance in the Pension Contribution
Fund shall be transferred directly to the designated retirement
systems as provided in Section 6z-61 of the State Finance Act.
On and after July 1, 2004, in the event that any amount is on
deposit in the Pension Contribution Fund from time to time, the
Comptroller and Treasurer shall continue to make such transfers
based on fiscal year 2005 payments until the entire amount on
deposit has been transferred.
(d) All amounts deposited into the Pension Contribution
Fund, other than the amounts reserved for the transfers under
subsection (c) from the bond sale authorized by Public Act 93-2
and other than amounts deposited into the Pension Contribution
Fund from the bond sale authorized by this amendatory Act of
the 96th General Assembly, shall be appropriated to the
designated retirement systems to reduce their actuarial
reserve deficiencies. The amount of the appropriation to each
designated retirement system shall constitute a portion of the
total appropriation under this subsection that is the same as
that retirement system's portion of the total actuarial reserve

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deficiency of the systems, as most recently determined by the
Governor's Office of Management and Budget under Section 8.12
of the State Finance Act.
With respect to proceeds from the bond sale authorized by
Public Act 93-2 only, within Within 15 days after any Bond
proceeds in excess of the amounts initially reserved under
subsection (c) are deposited into the Pension Contribution
Fund, the Governor's Office of Management and Budget shall (i)
allocate those proceeds among the designated retirement
systems in proportion to their respective actuarial reserve
deficiencies, as most recently determined under Section 8.12 of
the State Finance Act, and (ii) certify those allocations to
the designated retirement systems and the Comptroller.
Upon receiving certification of an allocation under this
subsection, a designated retirement system shall submit to the
Comptroller a voucher for the amount of its allocation. The
voucher shall be paid out of the amount appropriated to that
designated retirement system from the Pension Contribution
Fund pursuant to this subsection.
(Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04.)
(30 ILCS 330/9) (from Ch. 127, par. 659)
Sec. 9. Conditions for Issuance and Sale of Bonds -
Requirements for Bonds.
(a) Except as otherwise provided in this subsection, Bonds
shall be issued and sold from time to time, in one or more

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series, in such amounts and at such prices as may be directed
by the Governor, upon recommendation by the Director of the
Governor's Office of Management and Budget. Bonds shall be in
such form (either coupon, registered or book entry), in such
denominations, payable within 25 years from their date, subject
to such terms of redemption with or without premium, bear
interest payable at such times and at such fixed or variable
rate or rates, and be dated as shall be fixed and determined by
the Director of the Governor's Office of Management and Budget
in the order authorizing the issuance and sale of any series of
Bonds, which order shall be approved by the Governor and is
herein called a "Bond Sale Order"; provided however, that
interest payable at fixed or variable rates shall not exceed
that permitted in the Bond Authorization Act, as now or
hereafter amended. Bonds shall be payable at such place or
places, within or without the State of Illinois, and may be
made registrable as to either principal or as to both principal
and interest, as shall be specified in the Bond Sale Order.
Bonds may be callable or subject to purchase and retirement or
tender and remarketing as fixed and determined in the Bond Sale
Order. Bonds must be issued with principal or mandatory
redemption amounts in equal amounts, with the first maturity
issued occurring within the fiscal year in which the Bonds are
issued or within the next succeeding fiscal year, with Bonds
issued maturing or subject to mandatory redemption each fiscal
year thereafter up to 25 years. Notwithstanding any provision

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of this Act to the contrary, the Bonds authorized by this
amendatory Act of the 96th General Assembly shall be payable
within 5 years from their date and must be issued with
principal or mandatory redemption amounts in equal amounts,
with payment of principal or mandatory redemption beginning in
the first fiscal year following the fiscal year in which the
Bonds are issued.
In the case of any series of Bonds bearing interest at a
variable interest rate ("Variable Rate Bonds"), in lieu of
determining the rate or rates at which such series of Variable
Rate Bonds shall bear interest and the price or prices at which
such Variable Rate Bonds shall be initially sold or remarketed
(in the event of purchase and subsequent resale), the Bond Sale
Order may provide that such interest rates and prices may vary
from time to time depending on criteria established in such
Bond Sale Order, which criteria may include, without
limitation, references to indices or variations in interest
rates as may, in the judgment of a remarketing agent, be
necessary to cause Variable Rate Bonds of such series to be
remarketable from time to time at a price equal to their
principal amount, and may provide for appointment of a bank,
trust company, investment bank, or other financial institution
to serve as remarketing agent in that connection. The Bond Sale
Order may provide that alternative interest rates or provisions
for establishing alternative interest rates, different
security or claim priorities, or different call or amortization

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provisions will apply during such times as Variable Rate Bonds
of any series are held by a person providing credit or
liquidity enhancement arrangements for such Bonds as
authorized in subsection (b) of this Section. The Bond Sale
Order may also provide for such variable interest rates to be
established pursuant to a process generally known as an auction
rate process and may provide for appointment of one or more
financial institutions to serve as auction agents and
broker-dealers in connection with the establishment of such
interest rates and the sale and remarketing of such Bonds.
(b) In connection with the issuance of any series of Bonds,
the State may enter into arrangements to provide additional
security and liquidity for such Bonds, including, without
limitation, bond or interest rate insurance or letters of
credit, lines of credit, bond purchase contracts, or other
arrangements whereby funds are made available to retire or
purchase Bonds, thereby assuring the ability of owners of the
Bonds to sell or redeem their Bonds. The State may enter into
contracts and may agree to pay fees to persons providing such
arrangements, but only under circumstances where the Director
of the Governor's Office of Management and Budget certifies
that he or she reasonably expects the total interest paid or to
be paid on the Bonds, together with the fees for the
arrangements (being treated as if interest), would not, taken
together, cause the Bonds to bear interest, calculated to their
stated maturity, at a rate in excess of the rate that the Bonds

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would bear in the absence of such arrangements.
The State may, with respect to Bonds issued or anticipated
to be issued, participate in and enter into arrangements with
respect to interest rate protection or exchange agreements,
guarantees, or financial futures contracts for the purpose of
limiting, reducing, or managing interest rate exposure. The
authority granted under this paragraph, however, shall not
increase the principal amount of Bonds authorized to be issued
by law. The arrangements may be executed and delivered by the
Director of the Governor's Office of Management and Budget on
behalf of the State. Net payments for such arrangements shall
constitute interest on the Bonds and shall be paid from the
General Obligation Bond Retirement and Interest Fund. The
Director of the Governor's Office of Management and Budget
shall at least annually certify to the Governor and the State
Comptroller his or her estimate of the amounts of such net
payments to be included in the calculation of interest required
to be paid by the State.
(c) Prior to the issuance of any Variable Rate Bonds
pursuant to subsection (a), the Director of the Governor's
Office of Management and Budget shall adopt an interest rate
risk management policy providing that the amount of the State's
variable rate exposure with respect to Bonds shall not exceed
20%. This policy shall remain in effect while any Bonds are
outstanding and the issuance of Bonds shall be subject to the
terms of such policy. The terms of this policy may be amended

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from time to time by the Director of the Governor's Office of
Management and Budget but in no event shall any amendment cause
the permitted level of the State's variable rate exposure with
respect to Bonds to exceed 20%.
(Source: P.A. 92-16, eff. 6-28-01; 93-9, eff. 6-3-03; 93-666,
eff. 3-5-04; 93-839, eff. 7-30-04.)
(30 ILCS 330/11) (from Ch. 127, par. 661)
Sec. 11. Sale of Bonds. Except as otherwise provided in
this Section, Bonds shall be sold from time to time pursuant to
notice of sale and public bid or by negotiated sale in such
amounts and at such times as is directed by the Governor, upon
recommendation by the Director of the Governor's Office of
Management and Budget. At least 25%, based on total principal
amount, of all Bonds issued each fiscal year shall be sold
pursuant to notice of sale and public bid. At all times during
each fiscal year, no more than 75%, based on total principal
amount, of the Bonds issued each fiscal year, shall have been
sold by negotiated sale. Failure to satisfy the requirements in
the preceding 2 sentences shall not affect the validity of any
previously issued Bonds; provided that all Bonds authorized by
this amendatory Act of the 96th General Assembly shall not be
included in determining compliance for any fiscal year with the
requirements of the preceding 2 sentences; and further provided
that refunding Bonds satisfying the requirements of Section 16
of this Act and sold during fiscal year 2009, 2010, or 2011

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shall not be subject to the requirements in the preceding 2
sentences.
If any Bonds, including refunding Bonds, are to be sold by
negotiated sale, the Director of the Governor's Office of
Management and Budget shall comply with the competitive request
for proposal process set forth in the Illinois Procurement Code
and all other applicable requirements of that Code.
If Bonds are to be sold pursuant to notice of sale and
public bid, the Director of the Governor's Office of Management
and Budget shall, from time to time, as Bonds are to be sold,
advertise the sale of the Bonds in at least 2 daily newspapers,
one of which is published in the City of Springfield and one in
the City of Chicago. The sale of the Bonds shall also be
advertised in the volume of the Illinois Procurement Bulletin
that is published by the Department of Central Management
Services. Each of the advertisements for proposals shall be
published once at least 10 days prior to the date fixed for the
opening of the bids. The Director of the Governor's Office of
Management and Budget may reschedule the date of sale upon the
giving of such additional notice as the Director deems adequate
to inform prospective bidders of such change; provided,
however, that all other conditions of the sale shall continue
as originally advertised.
Executed Bonds shall, upon payment therefor, be delivered
to the purchaser, and the proceeds of Bonds shall be paid into
the State Treasury as directed by Section 12 of this Act.

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(Source: P.A. 96-18, eff. 6-26-09.)
(30 ILCS 330/15) (from Ch. 127, par. 665)
Sec. 15. Computation of Principal and Interest; transfers.
(a) Upon each delivery of Bonds authorized to be issued
under this Act, the Comptroller shall compute and certify to
the Treasurer the total amount of principal of, interest on,
and premium, if any, on Bonds issued that will be payable in
order to retire such Bonds and the amount of principal of,
interest on and premium, if any, on such Bonds that will be
payable on each payment date according to the tenor of such
Bonds during the then current and each succeeding fiscal year.
With respect to the interest payable on variable rate bonds,
such certifications shall be calculated at the maximum rate of
interest that may be payable during the fiscal year, after
taking into account any credits permitted in the related
indenture or other instrument against the amount of such
interest required to be appropriated for such period pursuant
to subsection (c) of Section 14 of this Act. With respect to
the interest payable, such certifications shall include the
amounts certified by the Director of the Governor's Office of
Management and Budget under subsection (b) of Section 9 of this
Act.
On or before the last day of each month the State Treasurer
and Comptroller shall transfer from (1) the Road Fund with
respect to Bonds issued under paragraph (a) of Section 4 of

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this Act or Bonds issued for the purpose of refunding such
bonds, and from (2) the General Revenue Fund, with respect to
all other Bonds issued under this Act, to the General
Obligation Bond Retirement and Interest Fund an amount
sufficient to pay the aggregate of the principal of, interest
on, and premium, if any, on Bonds payable, by their terms on
the next payment date divided by the number of full calendar
months between the date of such Bonds and the first such
payment date, and thereafter, divided by the number of months
between each succeeding payment date after the first. Such
computations and transfers shall be made for each series of
Bonds issued and delivered. Interest payable on variable rate
bonds shall be calculated at the maximum rate of interest that
may be payable for the relevant period, after taking into
account any credits permitted in the related indenture or other
instrument against the amount of such interest required to be
appropriated for such period pursuant to subsection (c) of
Section 14 of this Act. Computations of interest shall include
the amounts certified by the Director of the Governor's Office
of Management and Budget under subsection (b) of Section 9 of
this Act. Interest for which moneys have already been deposited
into the capitalized interest account within the General
Obligation Bond Retirement and Interest Fund shall not be
included in the calculation of the amounts to be transferred
under this subsection. Notwithstanding any other provision in
this Section, the transfer provisions provided in this

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paragraph shall not apply to transfers made in fiscal year 2010
with respect to Bonds issued in fiscal year 2010 pursuant to
Section 7.2 of this Act. In the case of transfers made in
fiscal year 2010 with respect to the Bonds issued in fiscal
year 2010 pursuant to Section 7.2 of this Act, on or before the
15th day of the month prior to the required debt service
payment, the State Treasurer and Comptroller shall transfer
from the General Revenue Fund to the General Obligation Bond
Retirement and Interest Fund an amount sufficient to pay the
aggregate of the principal of, interest on, and premium, if
any, on the Bonds payable in that next month.
The transfer of monies herein and above directed is not
required if monies in the General Obligation Bond Retirement
and Interest Fund are more than the amount otherwise to be
transferred as herein above provided, and if the Governor or
his authorized representative notifies the State Treasurer and
Comptroller of such fact in writing.
(b) After the effective date of this Act, the balance of,
and monies directed to be included in the Capital Development
Bond Retirement and Interest Fund, Anti-Pollution Bond
Retirement and Interest Fund, Transportation Bond, Series A
Retirement and Interest Fund, Transportation Bond, Series B
Retirement and Interest Fund, and Coal Development Bond
Retirement and Interest Fund shall be transferred to and
deposited in the General Obligation Bond Retirement and
Interest Fund. This Fund shall be used to make debt service

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payments on the State's general obligation Bonds heretofore
issued which are now outstanding and payable from the Funds
herein listed as well as on Bonds issued under this Act.
(c) The unused portion of federal funds received for a
capital facilities project, as authorized by Section 3 of this
Act, for which monies from the Capital Development Fund have
been expended shall be deposited upon completion of the project
in the General Obligation Bond Retirement and Interest Fund.
Any federal funds received as reimbursement for the completed
construction of a capital facilities project, as authorized by
Section 3 of this Act, for which monies from the Capital
Development Fund have been expended shall be deposited in the
General Obligation Bond Retirement and Interest Fund.
(Source: P.A. 93-2, eff. 4-7-03; 93-9, eff. 6-3-03; 94-793,
eff. 5-19-06.)
Section 10. The Illinois Pension Code is amended by
changing Sections 2-124, 14-131, 15-155, 16-158, and 18-131 as
follows:
(40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
Sec. 2-124. Contributions by State.
(a) The State shall make contributions to the System by
appropriations of amounts which, together with the
contributions of participants, interest earned on investments,
and other income will meet the cost of maintaining and

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administering the System on a 90% funded basis in accordance
with actuarial recommendations.
(b) The Board shall determine the amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board and
the prescribed rate of interest, using the formula in
subsection (c).
(c) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$4,157,000.
Notwithstanding any other provision of this Article, the

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total required State contribution for State fiscal year 2007 is
$5,220,300.
For each of State fiscal years 2008 through 2009 2010, the
State contribution to the System, as a percentage of the
applicable employee payroll, shall be increased in equal annual
increments from the required State contribution for State
fiscal year 2007, so that by State fiscal year 2011, the State
is contributing at the rate otherwise required under this
Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$10,454,000 and shall be made from the proceeds of bonds sold
in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the General Revenue
Fund in fiscal year 2010, and (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not

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constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 2-134, shall not
exceed an amount equal to (i) the amount of the required State
contribution that would have been calculated under this Section
for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal

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increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(d) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(e) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 95-950,
eff. 8-29-08.)
(40 ILCS 5/14-131) (from Ch. 108 1/2, par. 14-131)

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Sec. 14-131. Contributions by State.
(a) The State shall make contributions to the System by
appropriations of amounts which, together with other employer
contributions from trust, federal, and other funds, employee
contributions, investment income, and other income, will be
sufficient to meet the cost of maintaining and administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
For the purposes of this Section and Section 14-135.08,
references to State contributions refer only to employer
contributions and do not include employee contributions that
are picked up or otherwise paid by the State or a department on
behalf of the employee.
(b) The Board shall determine the total amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board,
using the formula in subsection (e).
The Board shall also determine a State contribution rate
for each fiscal year, expressed as a percentage of payroll,
based on the total required State contribution for that fiscal
year (less the amount received by the System from
appropriations under Section 8.12 of the State Finance Act and
Section 1 of the State Pension Funds Continuing Appropriation
Act, if any, for the fiscal year ending on the June 30
immediately preceding the applicable November 15 certification
deadline), the estimated payroll (including all forms of

SB1292 Enrolled - 23 - LRB096 08007 AMC 19275 b
compensation) for personal services rendered by eligible
employees, and the recommendations of the actuary.
For the purposes of this Section and Section 14.1 of the
State Finance Act, the term "eligible employees" includes
employees who participate in the System, persons who may elect
to participate in the System but have not so elected, persons
who are serving a qualifying period that is required for
participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
(c) Contributions shall be made by the several departments
for each pay period by warrants drawn by the State Comptroller
against their respective funds or appropriations based upon
vouchers stating the amount to be so contributed. These amounts
shall be based on the full rate certified by the Board under
Section 14-135.08 for that fiscal year. From the effective date
of this amendatory Act of the 93rd General Assembly through the
payment of the final payroll from fiscal year 2004
appropriations, the several departments shall not make
contributions for the remainder of fiscal year 2004 but shall
instead make payments as required under subsection (a-1) of
Section 14.1 of the State Finance Act. The several departments
shall resume those contributions at the commencement of fiscal
year 2005.
(d) If an employee is paid from trust funds or federal
funds, the department or other employer shall pay employer
contributions from those funds to the System at the certified

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rate, unless the terms of the trust or the federal-State
agreement preclude the use of the funds for that purpose, in
which case the required employer contributions shall be paid by
the State. From the effective date of this amendatory Act of
the 93rd General Assembly through the payment of the final
payroll from fiscal year 2004 appropriations, the department or
other employer shall not pay contributions for the remainder of
fiscal year 2004 but shall instead make payments as required
under subsection (a-1) of Section 14.1 of the State Finance
Act. The department or other employer shall resume payment of
contributions at the commencement of fiscal year 2005.
(e) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that (i) for State

SB1292 Enrolled - 25 - LRB096 08007 AMC 19275 b
fiscal year 1998, for all purposes of this Code and any other
law of this State, the certified percentage of the applicable
employee payroll shall be 5.052% for employees earning eligible
creditable service under Section 14-110 and 6.500% for all
other employees, notwithstanding any contrary certification
made under Section 14-135.08 before the effective date of this
amendatory Act of 1997, and (ii) in the following specified
State fiscal years, the State contribution to the System shall
not be less than the following indicated percentages of the
applicable employee payroll, even if the indicated percentage
will produce a State contribution in excess of the amount
otherwise required under this subsection and subsection (a):
9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
2002; 10.6% in FY 2003; and 10.8% in FY 2004.
Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2006 is $203,783,900.
Notwithstanding any other provision of this Article, the
total required State contribution to the System for State
fiscal year 2007 is $344,164,400.
For each of State fiscal years 2008 through 2009 2010, the
State contribution to the System, as a percentage of the
applicable employee payroll, shall be increased in equal annual
increments from the required State contribution for State
fiscal year 2007, so that by State fiscal year 2011, the State
is contributing at the rate otherwise required under this

SB1292 Enrolled - 26 - LRB096 08007 AMC 19275 b
Section.
Notwithstanding any other provision of this Article, the
total required State General Revenue Fund contribution for
State fiscal year 2010 is $723,703,100 and shall be made from
the proceeds of bonds sold in fiscal year 2010 pursuant to
Section 7.2 of the General Obligation Bond Act, less (i) the
pro rata share of bond sale expenses determined by the System's
share of total bond proceeds, (ii) any amounts received from
the General Revenue Fund in fiscal year 2010, and (iii) any
reduction in bond proceeds due to the issuance of discounted
bonds, if applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the

SB1292 Enrolled - 27 - LRB096 08007 AMC 19275 b
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 14-135.08, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(f) After the submission of all payments for eligible

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employees from personal services line items in fiscal year 2004
have been made, the Comptroller shall provide to the System a
certification of the sum of all fiscal year 2004 expenditures
for personal services that would have been covered by payments
to the System under this Section if the provisions of this
amendatory Act of the 93rd General Assembly had not been
enacted. Upon receipt of the certification, the System shall
determine the amount due to the System based on the full rate
certified by the Board under Section 14-135.08 for fiscal year
2004 in order to meet the State's obligation under this
Section. The System shall compare this amount due to the amount
received by the System in fiscal year 2004 through payments
under this Section and under Section 6z-61 of the State Finance
Act. If the amount due is more than the amount received, the
difference shall be termed the "Fiscal Year 2004 Shortfall" for
purposes of this Section, and the Fiscal Year 2004 Shortfall
shall be satisfied under Section 1.2 of the State Pension Funds
Continuing Appropriation Act. If the amount due is less than
the amount received, the difference shall be termed the "Fiscal
Year 2004 Overpayment" for purposes of this Section, and the
Fiscal Year 2004 Overpayment shall be repaid by the System to
the Pension Contribution Fund as soon as practicable after the
certification.
(g) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,

SB1292 Enrolled - 29 - LRB096 08007 AMC 19275 b
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(h) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 95-950,
eff. 8-29-08.)
(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
Sec. 15-155. Employer contributions.
(a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial

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tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
(a-1) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.
For each of State fiscal years 2008 through 2009 2010, the
State contribution to the System, as a percentage of the

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applicable employee payroll, shall be increased in equal annual
increments from the required State contribution for State
fiscal year 2007, so that by State fiscal year 2011, the State
is contributing at the rate otherwise required under this
Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$702,514,000 and shall be made from the State Pensions Fund and
proceeds of bonds sold in fiscal year 2010 pursuant to Section
7.2 of the General Obligation Bond Act, less (i) the pro rata
share of bond sale expenses determined by the System's share of
total bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2010, (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this

SB1292 Enrolled - 32 - LRB096 08007 AMC 19275 b
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2

SB1292 Enrolled - 33 - LRB096 08007 AMC 19275 b
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the
purpose of this Article, but funds of alumni associations,
foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
(b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this
System pursuant to subsection (h) of Section 15-107. The rate
of contributions to be made by those municipalities shall be
determined annually by the Board on the basis of the actuarial
assumptions adopted by the Board and the recommendations of the
actuary, and shall be expressed as a percentage of salary for

SB1292 Enrolled - 34 - LRB096 08007 AMC 19275 b
each such employee. The Board shall certify the rate to the
affected municipalities as soon as may be practical. The
employer contributions required under this subsection shall be
remitted by the municipality to the System at the same time and
in the same manner as employee contributions.
(c) Through State fiscal year 1995: The total employer
contribution shall be apportioned among the various funds of
the State and other employers, whether trust, federal, or other
funds, in accordance with actuarial procedures approved by the
Board. State of Illinois contributions for employers receiving
State appropriations for personal services shall be payable
from appropriations made to the employers or to the System. The
contributions for Class I community colleges covering earnings
other than those paid from trust and federal funds, shall be
payable solely from appropriations to the Illinois Community
College Board or the System for employer contributions.
(d) Beginning in State fiscal year 1996, the required State
contributions to the System shall be appropriated directly to
the System and shall be payable through vouchers issued in
accordance with subsection (c) of Section 15-165, except as
provided in subsection (g).
(e) The State Comptroller shall draw warrants payable to
the System upon proper certification by the System or by the
employer in accordance with the appropriation laws and this
Code.
(f) Normal costs under this Section means liability for

SB1292 Enrolled - 35 - LRB096 08007 AMC 19275 b
pensions and other benefits which accrues to the System because
of the credits earned for service rendered by the participants
during the fiscal year and expenses of administering the
System, but shall not include the principal of or any
redemption premium or interest on any bonds issued by the Board
or any expenses incurred or deposits required in connection
therewith.
(g) If the amount of a participant's earnings for any
academic year used to determine the final rate of earnings,
determined on a full-time equivalent basis, exceeds the amount
of his or her earnings with the same employer for the previous
academic year, determined on a full-time equivalent basis, by
more than 6%, the participant's employer shall pay to the
System, in addition to all other payments required under this
Section and in accordance with guidelines established by the
System, the present value of the increase in benefits resulting
from the portion of the increase in earnings that is in excess
of 6%. This present value shall be computed by the System on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the System that is available
at the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
Whenever it determines that a payment is or may be required
under this subsection (g), the System shall calculate the
amount of the payment and bill the employer for that amount.

SB1292 Enrolled - 36 - LRB096 08007 AMC 19275 b
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection
(h) or (i) of this Section, must include an affidavit setting
forth and attesting to all facts within the employer's
knowledge that are pertinent to the applicability of subsection
(h) or (i). Upon receiving a timely application for
recalculation, the System shall review the application and, if
appropriate, recalculate the amount due.
The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after the employer's receipt of the
bill.
(h) This subsection (h) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).

SB1292 Enrolled - 37 - LRB096 08007 AMC 19275 b
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to
participants under contracts or collective bargaining
agreements entered into, amended, or renewed before June 1,
2005.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to a
participant at a time when the participant is 10 or more years
from retirement eligibility under Section 15-135.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases resulting from
overload work, including a contract for summer teaching, or
overtime when the employer has certified to the System, and the
System has approved the certification, that: (i) in the case of
overloads (A) the overload work is for the sole purpose of
academic instruction in excess of the standard number of
instruction hours for a full-time employee occurring during the
academic year that the overload is paid and (B) the earnings
increases are equal to or less than the rate of pay for
academic instruction computed using the participant's current
salary rate and work schedule; and (ii) in the case of
overtime, the overtime was necessary for the educational
mission.
When assessing payment for any amount due under subsection
(g), the System shall exclude any earnings increase resulting
from (i) a promotion for which the employee moves from one

SB1292 Enrolled - 38 - LRB096 08007 AMC 19275 b
classification to a higher classification under the State
Universities Civil Service System, (ii) a promotion in academic
rank for a tenured or tenure-track faculty position, or (iii) a
promotion that the Illinois Community College Board has
recommended in accordance with subsection (k) of this Section.
These earnings increases shall be excluded only if the
promotion is to a position that has existed and been filled by
a member for no less than one complete academic year and the
earnings increase as a result of the promotion is an increase
that results in an amount no greater than the average salary
paid for other similar positions.
(i) When assessing payment for any amount due under
subsection (g), the System shall exclude any salary increase
described in subsection (h) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (g) of this Section.
(j) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each

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employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(k) The Illinois Community College Board shall adopt rules
for recommending lists of promotional positions submitted to
the Board by community colleges and for reviewing the
promotional lists on an annual basis. When recommending
promotional lists, the Board shall consider the similarity of
the positions submitted to those positions recognized for State
universities by the State Universities Civil Service System.
The Illinois Community College Board shall file a copy of its
findings with the System. The System shall consider the
findings of the Illinois Community College Board when making
determinations under this Section. The System shall not exclude
any earnings increases resulting from a promotion when the
promotion was not submitted by a community college. Nothing in
this subsection (k) shall require any community college to
submit any information to the Community College Board.
(l) For purposes of determining the required State

SB1292 Enrolled - 40 - LRB096 08007 AMC 19275 b
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(m) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 94-1057,
eff. 7-31-06; 95-331, eff. 8-21-07; 95-950, eff. 8-29-08.)
(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
Sec. 16-158. Contributions by State and other employing
units.
(a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis

SB1292 Enrolled - 41 - LRB096 08007 AMC 19275 b
in accordance with actuarial recommendations.
The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(b-3).
(a-1) Annually, on or before November 15, the Board shall
certify to the Governor the amount of the required State
contribution for the coming fiscal year. The certification
shall include a copy of the actuarial recommendations upon
which it is based.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by this amendatory Act of the 94th General Assembly.
(b) Through State fiscal year 1995, the State contributions
shall be paid to the System in accordance with Section 18-7 of
the School Code.
(b-1) Beginning in State fiscal year 1996, on the 15th day

SB1292 Enrolled - 42 - LRB096 08007 AMC 19275 b
of each month, or as soon thereafter as may be practicable, the
Board shall submit vouchers for payment of State contributions
to the System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a-1). From the effective date of this amendatory Act of the
93rd General Assembly through June 30, 2004, the Board shall
not submit vouchers for the remainder of fiscal year 2004 in
excess of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (a) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(b-2) Allocations from the Common School Fund apportioned
to school districts not coming under this System shall not be
diminished or affected by the provisions of this Article.
(b-3) For State fiscal years 2011 through 2045, the minimum

SB1292 Enrolled - 43 - LRB096 08007 AMC 19275 b
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that in the
following specified State fiscal years, the State contribution
to the System shall not be less than the following indicated
percentages of the applicable employee payroll, even if the
indicated percentage will produce a State contribution in
excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary
certification made under subsection (a-1) before the effective
date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
2003; and 13.56% in FY 2004.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is

SB1292 Enrolled - 44 - LRB096 08007 AMC 19275 b
$534,627,700.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$738,014,500.
For each of State fiscal years 2008 through 2009 2010, the
State contribution to the System, as a percentage of the
applicable employee payroll, shall be increased in equal annual
increments from the required State contribution for State
fiscal year 2007, so that by State fiscal year 2011, the State
is contributing at the rate otherwise required under this
Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$2,089,268,000 and shall be made from the proceeds of bonds
sold in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2010, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State

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

SB1292 Enrolled - 46 - LRB096 08007 AMC 19275 b
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and all
expenses in connection with the administration and operation
thereof, are obligations of the State.
If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs based
upon that service, as determined by the System. Employer
contributions, based on salary paid to members from federal
funds, may be forwarded by the distributing agency of the State
of Illinois to the System prior to allocation, in an amount
determined in accordance with guidelines established by such
agency and the System.
(d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's

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service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be forwarded
monthly in accordance with guidelines established by the
System.
However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
(1) Beginning July 1, 1998 through June 30, 1999, the
employer contribution shall be equal to 0.3% of each
teacher's salary.
(2) Beginning July 1, 1999 and thereafter, the employer
contribution shall be equal to 0.58% of each teacher's
salary.
The school district or other employing unit may pay these

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employer contributions out of any source of funding available
for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
These employer contributions are intended to offset a
portion of the cost to the System of the increases in
retirement benefits resulting from this amendatory Act of 1998.
Each employer of teachers is entitled to a credit against
the contributions required under this subsection (e) with
respect to salaries paid to teachers for the period January 1,
2002 through June 30, 2003, equal to the amount paid by that
employer under subsection (a-5) of Section 6.6 of the State
Employees Group Insurance Act of 1971 with respect to salaries
paid to teachers for that period.
The additional 1% employee contribution required under
Section 16-152 by this amendatory Act of 1998 is the
responsibility of the teacher and not the teacher's employer,
unless the employer agrees, through collective bargaining or
otherwise, to make the contribution on behalf of the teacher.
If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)
for the balance of the term of that contract. The employer and

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the employee organization shall jointly certify to the System
the existence of the contractual requirement, in such form as
the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
(f) If the amount of a teacher's salary for any school year
used to determine final average salary exceeds the member's
annual full-time salary rate with the same employer for the
previous school year by more than 6%, the teacher's employer
shall pay to the System, in addition to all other payments
required under this Section and in accordance with guidelines
established by the System, the present value of the increase in
benefits resulting from the portion of the increase in salary
that is in excess of 6%. This present value shall be computed
by the System on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the
System that is available at the time of the computation. If a
teacher's salary for the 2005-2006 school year is used to
determine final average salary under this subsection (f), then
the changes made to this subsection (f) by Public Act 94-1057
shall apply in calculating whether the increase in his or her
salary is in excess of 6%. For the purposes of this Section,
change in employment under Section 10-21.12 of the School Code
on or after June 1, 2005 shall constitute a change in employer.
The System may require the employer to provide any pertinent
information or documentation. The changes made to this

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

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bill.
(g) This subsection (g) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to teachers
under contracts or collective bargaining agreements entered
into, amended, or renewed before June 1, 2005.
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to a
teacher at a time when the teacher is 10 or more years from
retirement eligibility under Section 16-132 or 16-133.2.
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases resulting from
overload work, including summer school, when the school
district has certified to the System, and the System has
approved the certification, that (i) the overload work is for
the sole purpose of classroom instruction in excess of the
standard number of classes for a full-time teacher in a school
district during a school year and (ii) the salary increases are
equal to or less than the rate of pay for classroom instruction
computed on the teacher's current salary and work schedule.
When assessing payment for any amount due under subsection
(f), the System shall exclude a salary increase resulting from

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a promotion (i) for which the employee is required to hold a
certificate or supervisory endorsement issued by the State
Teacher Certification Board that is a different certification
or supervisory endorsement than is required for the teacher's
previous position and (ii) to a position that has existed and
been filled by a member for no less than one complete academic
year and the salary increase from the promotion is an increase
that results in an amount no greater than the lesser of the
average salary paid for other similar positions in the district
requiring the same certification or the amount stipulated in
the collective bargaining agreement for a similar position
requiring the same certification.
When assessing payment for any amount due under subsection
(f), the System shall exclude any payment to the teacher from
the State of Illinois or the State Board of Education over
which the employer does not have discretion, notwithstanding
that the payment is included in the computation of final
average salary.
(h) When assessing payment for any amount due under
subsection (f), the System shall exclude any salary increase
described in subsection (g) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014

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shall be used in assessing payment for any amount due under
subsection (f) of this Section.
(i) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(j) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal

SB1292 Enrolled - 54 - LRB096 08007 AMC 19275 b
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(k) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 94-1057,
eff. 7-31-06; 94-1111, eff. 2-27-07; 95-331, eff. 8-21-07;
95-950, eff. 8-29-08.)
(40 ILCS 5/18-131) (from Ch. 108 1/2, par. 18-131)
Sec. 18-131. Financing; employer contributions.
(a) The State of Illinois shall make contributions to this
System by appropriations of the amounts which, together with
the contributions of participants, net earnings on
investments, and other income, will meet the costs of
maintaining and administering this System on a 90% funded basis
in accordance with actuarial recommendations.
(b) The Board shall determine the amount of State
contributions required for each fiscal year on the basis of the
actuarial tables and other assumptions adopted by the Board and
the prescribed rate of interest, using the formula in
subsection (c).
(c) For State fiscal years 2011 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be

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sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$29,189,400.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$35,236,800.
For each of State fiscal years 2008 through 2009 2010, the
State contribution to the System, as a percentage of the
applicable employee payroll, shall be increased in equal annual
increments from the required State contribution for State
fiscal year 2007, so that by State fiscal year 2011, the State
is contributing at the rate otherwise required under this
Section.
Notwithstanding any other provision of this Article, the

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total required State contribution for State fiscal year 2010 is
$78,832,000 and shall be made from the proceeds of bonds sold
in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the General Revenue
Fund in fiscal year 2010, and (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the

SB1292 Enrolled - 57 - LRB096 08007 AMC 19275 b
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 18-140, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued for the purposes of that Section 7.2, as determined and
certified by the Comptroller, that is the same as the System's
portion of the total moneys distributed under subsection (d) of
Section 7.2 of the General Obligation Bond Act. In determining
this maximum for State fiscal years 2008 through 2010, however,
the amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued for the purposes of Section 7.2
of the General Obligation Bond Act, so that, by State fiscal
year 2011, the State is contributing at the rate otherwise
required under this Section.
(d) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,

SB1292 Enrolled - 58 - LRB096 08007 AMC 19275 b
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(e) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 95-950,
eff. 8-29-08.)
Section 15. The State Pension Funds Continuing
Appropriation Act is amended by changing Sections 1.1 and 1.2
as follows:
(40 ILCS 15/1.1)
Sec. 1.1. Appropriations to certain retirement systems.
(a) There is hereby appropriated from the General Revenue
Fund to the General Assembly Retirement System, on a continuing
monthly basis, the amount, if any, by which the total available
amount of all other appropriations to that retirement system
for the payment of State contributions is less than the total

SB1292 Enrolled - 59 - LRB096 08007 AMC 19275 b
amount of the vouchers for required State contributions
lawfully submitted by the retirement system for that month
under Section 2-134 of the Illinois Pension Code.
(b) There is hereby appropriated from the General Revenue
Fund to the State Universities Retirement System, on a
continuing monthly basis, the amount, if any, by which the
total available amount of all other appropriations to that
retirement system for the payment of State contributions,
including any deficiency in the required contributions of the
optional retirement program established under Section 15-158.2
of the Illinois Pension Code, is less than the total amount of
the vouchers for required State contributions lawfully
submitted by the retirement system for that month under Section
15-165 of the Illinois Pension Code.
(c) There is hereby appropriated from the Common School
Fund to the Teachers' Retirement System of the State of
Illinois, on a continuing monthly basis, the amount, if any, by
which the total available amount of all other appropriations to
that retirement system for the payment of State contributions
is less than the total amount of the vouchers for required
State contributions lawfully submitted by the retirement
system for that month under Section 16-158 of the Illinois
Pension Code.
(d) There is hereby appropriated from the General Revenue
Fund to the Judges Retirement System of Illinois, on a
continuing monthly basis, the amount, if any, by which the

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total available amount of all other appropriations to that
retirement system for the payment of State contributions is
less than the total amount of the vouchers for required State
contributions lawfully submitted by the retirement system for
that month under Section 18-140 of the Illinois Pension Code.
(e) The continuing appropriations provided by this Section
shall first be available in State fiscal year 1996.
(f) For State fiscal year 2010 only, the continuing
appropriations provided by this Section are equal to the amount
certified by each System on or before December 31, 2008, less
(i) the gross proceeds of the bonds sold in fiscal year 2010
under the authorization contained in subsection (a) of Section
7.2 of the General Obligation Bond Act and (ii) any amounts
received from the State Pensions Fund.
(Source: P.A. 90-448, eff. 8-16-97.)
(40 ILCS 15/1.2)
Sec. 1.2. Appropriations for the State Employees'
Retirement System.
(a) From each fund from which an amount is appropriated for
personal services to a department or other employer under
Article 14 of the Illinois Pension Code, there is hereby
appropriated to that department or other employer, on a
continuing annual basis for each State fiscal year, an
additional amount equal to the amount, if any, by which (1) an
amount equal to the percentage of the personal services line

SB1292 Enrolled - 61 - LRB096 08007 AMC 19275 b
item for that department or employer from that fund for that
fiscal year that the Board of Trustees of the State Employees'
Retirement System of Illinois has certified under Section
14-135.08 of the Illinois Pension Code to be necessary to meet
the State's obligation under Section 14-131 of the Illinois
Pension Code for that fiscal year, exceeds (2) the amounts
otherwise appropriated to that department or employer from that
fund for State contributions to the State Employees' Retirement
System for that fiscal year. From the effective date of this
amendatory Act of the 93rd General Assembly through the final
payment from a department or employer's personal services line
item for fiscal year 2004, payments to the State Employees'
Retirement System that otherwise would have been made under
this subsection (a) shall be governed by the provisions in
subsection (a-1).
(a-1) If a Fiscal Year 2004 Shortfall is certified under
subsection (f) of Section 14-131 of the Illinois Pension Code,
there is hereby appropriated to the State Employees' Retirement
System of Illinois on a continuing basis from the General
Revenue Fund an additional aggregate amount equal to the Fiscal
Year 2004 Shortfall.
(b) The continuing appropriations provided for by this
Section shall first be available in State fiscal year 1996.
(c) Beginning in Fiscal Year 2005, any continuing
appropriation under this Section arising out of an
appropriation for personal services from the Road Fund to the

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Department of State Police or the Secretary of State shall be
payable from the General Revenue Fund rather than the Road
Fund.
(d) For State fiscal year 2010 only, a continuing
appropriation is provided to the State Employees' Retirement
System equal to the amount certified by the System on or before
December 31, 2008, less the gross proceeds of the bonds sold in
fiscal year 2010 under the authorization contained in
subsection (a) of Section 7.2 of the General Obligation Bond
Act.
(Source: P.A. 93-665, eff. 3-5-04; 93-1067, eff. 1-15-05.)
Section 99. Effective date. This Act takes effect upon