Illinois-2025-SB1374-Introduced

104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1374

Introduced 1/29/2025, by Sen. Chapin Rose

SYNOPSIS AS INTRODUCED:

40 ILCS 5/15-139.5

Amends the State Universities Article of the Illinois Pension Code. In a provision concerning additional employer contributions for employers that employ or re-employ affected annuitants, provides that the required employer contribution for employment of an affected annuitant in an academic year shall be equal to the lesser of: (1) 3 times the amount of the gross monthly retirement annuity payable to the annuitant for the month in which the first paid day of that employment in that academic year occurs, after any reduction in that annuity that may be imposed under a specified provision; or (2) $100,000 (instead of equal to 12 times the amount of the gross monthly retirement annuity payable to the annuitant for the month in which the first paid day of that employment in that academic year occurs, after any reduction in that annuity that may be imposed under a specified provision). Provides that the changes to the required employer contribution made by the amendatory Act apply to employer contributions required on or after January 1, 2021. Provides that a person who becomes an affected annuitant remains an affected annuitant, except for any period during which the annuitant received, or became entitled to receive, during an academic year compensation for that employment equal to 40% or less of his or her highest annual earnings prior to retirement. Effective immediately.

LRB104 09777 RPS 19843 b

A BILL FOR

SB1374

LRB104 09777 RPS 19843 b

1 AN ACT concerning public employee benefits.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Pension Code is amended by

5 changing Section 15-139.5 as follows:

6 (40 ILCS 5/15-139.5)

7 Sec. 15-139.5. Return to work by affected annuitant;

8 notice and contribution by employer.

9 (a) An employer who employs or re-employs a person

10 receiving a retirement annuity from the System in an academic

11 year beginning on or after August 1, 2013 must notify the

12 System of that employment within 60 days after employing the

13 annuitant. The notice must include a summary of the contract

14 of employment or specify the rate of compensation and the

15 anticipated length of employment of that annuitant. The notice

16 must specify whether the annuitant will be compensated from

17 federal, corporate, foundation, or trust funds or grants of

18 State funds that identify the principal investigator by name.

19 The notice must include the employer's determination of

20 whether or not the annuitant is an "affected annuitant" as

21 defined in subsection (b).

22 The employer must also record, document, and certify to

23 the System (i) the amount of compensation paid to the

SB1374

- 2 -

LRB104 09777 RPS 19843 b

1 annuitant for employment during the academic year, and (ii)

2 the amount of that compensation, if any, that comes from

3 either federal, corporate, foundation, or trust funds or

4 grants of State funds that identify the principal investigator

5 by name.

6 As used in this Section, "academic year" means the

7 12-month period beginning September 1.

8 For the purposes of this Section, an annuitant whose

9 employment by an employer extends over more than one academic

10 year shall be deemed to be re-employed by that employer in each

11 of those academic years.

12 The System may specify the time, form, and manner of

13 providing the determinations, notifications, certifications,

14 and documentation required under this Section.

15 (b) A person receiving a retirement annuity from the

16 System becomes an "affected annuitant" on the first day of the

17 academic year following the academic year in which the

18 annuitant first meets the following conditions:

19 (1) (Blank).

20 (2) While receiving a retirement annuity under this

21 Article, the annuitant was employed on or after August 1,

22 2013 by one or more employers under this Article and

23 received or became entitled to receive during an academic

24 year compensation for that employment in excess of 40% of

25 his or her highest annual earnings prior to retirement;

26 except that compensation paid from federal, corporate,

SB1374

- 3 -

LRB104 09777 RPS 19843 b

1 foundation, or trust funds or grants of State funds that

2 identify the principal investigator by name is excluded.

3 (3) The annuitant received an annualized retirement

4 annuity under this Article of at least $10,000.

5 A person who becomes an affected annuitant remains an

6 affected annuitant, except for (i) any period during which the

7 person returns to active service and does not receive a

8 retirement annuity from the System; ~~or~~ (ii) any period on or

9 after the effective date of this amendatory Act of the 100th

10 General Assembly during which an annuitant received an

11 annualized retirement annuity under this Article that is less

12 than $10,000; or (iii) any period during which the annuitant

13 received, or became entitled to receive, during an academic

14 year compensation for that employment equal to 40% or less of

15 his or her highest annual earnings prior to retirement.

16 (c) It is the obligation of the employer to determine

17 whether an annuitant is an affected annuitant before employing

18 the annuitant. For that purpose the employer may require the

19 annuitant to disclose and document his or her relevant prior

20 employment and earnings history. Failure of the employer to

21 make this determination correctly and in a timely manner or to

22 include this determination with the notification required

23 under subsection (a) does not excuse the employer from making

24 the contribution required under subsection (e).

25 The System may assist the employer in determining whether

26 a person is an affected annuitant. The System shall inform the

SB1374

- 4 -

LRB104 09777 RPS 19843 b

1 employer if it discovers that the employer's determination is

2 inconsistent with the employment and earnings information in

3 the System's records.

4 (d) Upon the request of an annuitant, the System shall

5 certify to the annuitant or the employer the following

6 information as reported by the employers, as that information

7 is indicated in the records of the System: (i) the annuitant's

8 highest annual earnings prior to retirement, (ii) the

9 compensation paid for that employment in each academic year,

10 and (iii) whether any of that employment or compensation has

11 been certified to the System as being paid from federal,

12 corporate, foundation, or trust funds or grants of State funds

13 that identify the principal investigator by name. The System

14 shall only be required to certify information that is received

15 from the employers.

16 (e) In addition to the requirements of subsection (a), an

17 employer who employs an affected annuitant must pay to the

18 System an employer contribution in the amount and manner

19 provided in this Section, unless the annuitant is compensated

20 by that employer solely from federal, corporate, foundation,

21 or trust funds or grants of State funds that identify the

22 principal investigator by name.

23 The employer contribution required under this Section for

24 employment of an affected annuitant in an academic year shall

25 be equal to the lesser of: (1) 3 ~~12~~ times the amount of the

26 gross monthly retirement annuity payable to the annuitant for

SB1374

- 5 -

LRB104 09777 RPS 19843 b

1 the month in which the first paid day of that employment in

2 that academic year occurs, after any reduction in that annuity

3 that may be imposed under subsection (b) of Section 15-139; or

4 (2) $100,000.

5 If an affected annuitant is employed by more than one

6 employer in an academic year, the employer contribution

7 required under this Section shall be divided among those

8 employers in proportion to their respective portions of the

9 total compensation paid to the affected annuitant for that

10 employment during that academic year.

11 If the System determines that an employer, without

12 reasonable justification, has failed to make the determination

13 of affected annuitant status correctly and in a timely manner,

14 or has failed to notify the System or to correctly document or

15 certify to the System any of the information required by this

16 Section, and that failure results in a delayed determination

17 by the System that a contribution is payable under this

18 Section, then the amount of that employer's contribution

19 otherwise determined under this Section shall be doubled.

20 The System shall deem a failure to correctly determine the

21 annuitant's status to be justified if the employer establishes

22 to the System's satisfaction that the employer, after due

23 diligence, made an erroneous determination that the annuitant

24 was not an affected annuitant due to reasonable reliance on

25 false or misleading information provided by the annuitant or

26 another employer, or an error in the annuitant's official

SB1374

- 6 -

LRB104 09777 RPS 19843 b

1 employment or earnings records.

2 The changes to this subsection (e) made by this amendatory

3 Act of the 104th General Assembly apply to employer

4 contributions required on or after January 1, 2021.

5 (f) Whenever the System determines that an employer is

6 liable for a contribution under this Section, it shall so

7 notify the employer and certify the amount of the

8 contribution. The employer may pay the required contribution

9 without interest at any time within one year after receipt of

10 the certification. If the employer fails to pay within that

11 year, then interest shall be charged at a rate equal to the

12 System's prescribed rate of interest, compounded annually from

13 the 366th day after receipt of the certification from the

14 System. Payment must be concluded within 2 years after receipt

15 of the certification by the employer. If the employer fails to

16 make complete payment, including applicable interest, within 2

17 years, then the System may, after giving notice to the

18 employer, certify the delinquent amount to the State

19 Comptroller, and the Comptroller shall thereupon deduct the

20 certified delinquent amount from State funds payable to the

21 employer and pay them instead to the System.

22 (g) If an employer is required to make a contribution to

23 the System as a result of employing an affected annuitant and

24 the annuitant later elects to forgo his or her annuity in that

25 same academic year pursuant to subsection (c) of Section

26 15-139, then the required contribution by the employer shall

SB1374

- 7 -

LRB104 09777 RPS 19843 b

1 be waived, and if the contribution has already been paid, it

2 shall be refunded to the employer without interest.

3 (h) Notwithstanding any other provision of this Article,

4 the employer contribution required under this Section shall

5 not be included in the determination of any benefit under this

6 Article or any other Article of this Code, regardless of

7 whether the annuitant returns to active service, and is in

8 addition to any other State or employer contribution required

9 under this Article.

10 (i) Notwithstanding any other provision of this Section to

11 the contrary, if an employer employs an affected annuitant in

12 order to continue critical operations in the event of either

13 an employee's unforeseen illness, accident, or death or a

14 catastrophic incident or disaster, then, for one and only one

15 academic year, the employer is not required to pay the

16 contribution set forth in this Section for that annuitant. The

17 employer shall, however, immediately notify the System upon

18 employing a person subject to this subsection (i). For the

19 purposes of this subsection (i), "critical operations" means

20 teaching services, medical services, student welfare services,

21 and any other services that are critical to the mission of the

22 employer.

23 (j) This Section shall be applied and coordinated with the

24 regulatory obligations contained in the State Universities

25 Civil Service Act. This Section shall not apply to an

26 annuitant if the employer of that annuitant provides

SB1374

- 8 -

LRB104 09777 RPS 19843 b

1 documentation to the System that (1) the annuitant is employed

2 in a status appointment position, as that term is defined in 80

3 Ill. Adm. Code 250.80, and (2) due to obligations contained

4 under the State Universities Civil Service Act, the employer

5 does not have the ability to limit the earnings or duration of

6 employment for the annuitant while employed in the status

7 appointment position.

8 (Source: P.A. 100-556, eff. 12-8-17.)

9 Section 99. Effective date. This Act takes effect upon

10 becoming law.