Bill Text: IL SB1544 | 2013-2014 | 98th General Assembly | Amended

---

Bill Title: Amends the Chicago Teacher Article of the Illinois Pension Code. Makes changes concerning the composition and election of members of the Board of Trustees of the Fund. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2015-01-13 - Session Sine Die [SB1544 Detail]

Download: Illinois-2013-SB1544-Amended.html

---

Sen. John J. Cullerton

Filed: 3/20/2013

09800SB1544sam003 LRB098 07988 JDS 43665 a
AMENDMENT TO SENATE BILL 1544
AMENDMENT NO. ______. Amend Senate Bill 1544, AS AMENDED,
by replacing everything after the enacting clause with the
following:
"PART A
Section A-3. The Illinois Public Labor Relations Act is
amended by changing Sections 4 and 15 as follows:
(5 ILCS 315/4) (from Ch. 48, par. 1604)
Sec. 4. Management Rights. Employers shall not be required
to bargain over matters of inherent managerial policy, which
shall include such areas of discretion or policy as the
functions of the employer, standards of services, its overall
budget, the organizational structure and selection of new
employees, examination techniques and direction of employees.
Employers, however, shall be required to bargain collectively

09800SB1544sam003 - 2 - LRB098 07988 JDS 43665 a
with regard to policy matters directly affecting wages, hours
and terms and conditions of employment as well as the impact
thereon upon request by employee representatives, but
excluding the changes, the impact of changes, and the
implementation of the changes set forth in this amendatory Act
of the 98th General Assembly.
To preserve the rights of employers and exclusive
representatives which have established collective bargaining
relationships or negotiated collective bargaining agreements
prior to the effective date of this Act, employers shall be
required to bargain collectively with regard to any matter
concerning wages, hours or conditions of employment about which
they have bargained for and agreed to in a collective
bargaining agreement prior to the effective date of this Act,
but excluding the changes, the impact of changes, and the
implementation of the changes set forth in this amendatory Act
of the 98th General Assembly.
The chief judge of the judicial circuit that employs a
public employee who is a court reporter, as defined in the
Court Reporters Act, has the authority to hire, appoint,
promote, evaluate, discipline, and discharge court reporters
within that judicial circuit.
Nothing in this amendatory Act of the 94th General Assembly
shall be construed to intrude upon the judicial functions of
any court. This amendatory Act of the 94th General Assembly
applies only to nonjudicial administrative matters relating to

09800SB1544sam003 - 3 - LRB098 07988 JDS 43665 a
the collective bargaining rights of court reporters.
(Source: P.A. 94-98, eff. 7-1-05.)
(5 ILCS 315/15) (from Ch. 48, par. 1615)
Sec. 15. Act Takes Precedence.
(a) In case of any conflict between the provisions of this
Act and any other law (other than Section 5 of the State
Employees Group Insurance Act of 1971 and other than the
changes made to the Illinois Pension Code by Public Act 96-889
and the changes, impact of changes, and the implementation of
the changes made to the Illinois Pension Code by this
amendatory Act of the 98th 96th General Assembly), executive
order or administrative regulation relating to wages, hours and
conditions of employment and employment relations, the
provisions of this Act or any collective bargaining agreement
negotiated thereunder shall prevail and control. Nothing in
this Act shall be construed to replace or diminish the rights
of employees established by Sections 28 and 28a of the
Metropolitan Transit Authority Act, Sections 2.15 through 2.19
of the Regional Transportation Authority Act. The provisions of
this Act are subject to the changes made by this amendatory Act
of the 98th General Assembly and Section 5 of the State
Employees Group Insurance Act of 1971. Nothing in this Act
shall be construed to replace the necessity of complaints
against a sworn peace officer, as defined in Section 2(a) of
the Uniform Peace Officer Disciplinary Act, from having a

09800SB1544sam003 - 4 - LRB098 07988 JDS 43665 a
complaint supported by a sworn affidavit.
(b) Except as provided in subsection (a) above, any
collective bargaining contract between a public employer and a
labor organization executed pursuant to this Act shall
supersede any contrary statutes, charters, ordinances, rules
or regulations relating to wages, hours and conditions of
employment and employment relations adopted by the public
employer or its agents. Any collective bargaining agreement
entered into prior to the effective date of this Act shall
remain in full force during its duration.
(c) It is the public policy of this State, pursuant to
paragraphs (h) and (i) of Section 6 of Article VII of the
Illinois Constitution, that the provisions of this Act are the
exclusive exercise by the State of powers and functions which
might otherwise be exercised by home rule units. Such powers
and functions may not be exercised concurrently, either
directly or indirectly, by any unit of local government,
including any home rule unit, except as otherwise authorized by
this Act.
(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
Section A-5. The Governor's Office of Management and Budget
Act is amended by changing Sections 7 and 8 as follows:
(20 ILCS 3005/7) (from Ch. 127, par. 417)
Sec. 7. All statements and estimates of expenditures

09800SB1544sam003 - 5 - LRB098 07988 JDS 43665 a
submitted to the Office in connection with the preparation of a
State budget, and any other estimates of expenditures,
supporting requests for appropriations, shall be formulated
according to the various functions and activities for which the
respective department, office or institution of the State
government (including the elective officers in the executive
department and including the University of Illinois and the
judicial department) is responsible. All such statements and
estimates of expenditures relating to a particular function or
activity shall be further formulated or subject to analysis in
accordance with the following classification of objects:
(1) Personal services
(2) State contribution for employee group insurance
(3) Contractual services
(4) Travel
(5) Commodities
(6) Equipment
(7) Permanent improvements
(8) Land
(9) Electronic Data Processing
(10) Telecommunication services
(11) Operation of Automotive Equipment
(12) Contingencies
(13) Reserve
(14) Interest
(15) Awards and Grants

09800SB1544sam003 - 6 - LRB098 07988 JDS 43665 a
(16) Debt Retirement
(17) Non-cost Charges.
(18) State retirement contribution for annual normal cost
(19) State retirement contribution for unfunded accrued
liability.
(Source: P.A. 93-25, eff. 6-20-03.)
(20 ILCS 3005/8) (from Ch. 127, par. 418)
Sec. 8. When used in connection with a State budget or
expenditure or estimate, items (1) through (16) in the
classification of objects stated in Section 7 shall have the
meanings ascribed to those items in Sections 14 through 24.7,
respectively, of the State Finance Act. "An Act in relation to
State finance", approved June 10, 1919, as amended.
When used in connection with a State budget or expenditure
or estimate, items (18) and (19) in the classification of
objects stated in Section 7 shall have the meanings ascribed to
those items in Sections 24.12 and 24.13, respectively, of the
State Finance Act.
(Source: P.A. 82-325.)
Section A-10. The State Finance Act is amended by changing
Section 13 and by adding Sections 24.12 and 24.13 as follows:
(30 ILCS 105/13) (from Ch. 127, par. 149)
Sec. 13. The objects and purposes for which appropriations

09800SB1544sam003 - 7 - LRB098 07988 JDS 43665 a
are made are classified and standardized by items as follows:
(1) Personal services;
(2) State contribution for employee group insurance;
(3) Contractual services;
(4) Travel;
(5) Commodities;
(6) Equipment;
(7) Permanent improvements;
(8) Land;
(9) Electronic Data Processing;
(10) Operation of automotive equipment;
(11) Telecommunications services;
(12) Contingencies;
(13) Reserve;
(14) Interest;
(15) Awards and Grants;
(16) Debt Retirement;
(17) Non-Cost Charges;
(18) State retirement contribution for annual normal cost;
(19) State retirement contribution for unfunded accrued
liability;
(20) (18) Purchase Contract for Real Estate.
When an appropriation is made to an officer, department,
institution, board, commission or other agency, or to a private
association or corporation, in one or more of the items above
specified, such appropriation shall be construed in accordance

09800SB1544sam003 - 8 - LRB098 07988 JDS 43665 a
with the definitions and limitations specified in this Act,
unless the appropriation act otherwise provides.
An appropriation for a purpose other than one specified and
defined in this Act may be made only as an additional, separate
and distinct item, specifically stating the object and purpose
thereof.
(Source: P.A. 84-263; 84-264.)
(30 ILCS 105/24.12 new)
Sec. 24.12. "State retirement contribution for annual
normal cost" defined. The term "State retirement contribution
for annual normal cost" means the portion of the total required
State contribution to a retirement system for a fiscal year
that represents the State's portion of the System's projected
normal cost for that fiscal year, as determined and certified
by the board of trustees of the retirement system in
conformance with the applicable provisions of the Illinois
Pension Code.
(30 ILCS 105/24.13 new)
Sec. 24.13. "State retirement contribution for unfunded
accrued liability" defined. The term "State retirement
contribution for unfunded accrued liability" means the portion
of the total required State contribution to a retirement system
for a fiscal year that is not included in the State retirement
contribution for annual normal cost.

09800SB1544sam003 - 9 - LRB098 07988 JDS 43665 a
Section A-15. The Budget Stabilization Act is amended by
changing Sections 20 and 25 as follows:
(30 ILCS 122/20)
Sec. 20. Pension Stabilization Fund.
(a) The Pension Stabilization Fund is hereby created as a
special fund in the State treasury. Moneys in the fund shall be
used for the sole purpose of making payments to the designated
retirement systems as provided in Section 25.
(b) For each fiscal year when the General Assembly's
appropriations and transfers or diversions as required by law
from general funds do not exceed 99% of the estimated general
funds revenues pursuant to subsection (a) of Section 10, the
Comptroller shall transfer from the General Revenue Fund as
provided by this Section a total amount equal to 0.5% of the
estimated general funds revenues to the Pension Stabilization
Fund.
(c) For each fiscal year through State fiscal year 2013,
when the General Assembly's appropriations and transfers or
diversions as required by law from general funds do not exceed
98% of the estimated general funds revenues pursuant to
subsection (b) of Section 10, the Comptroller shall transfer
from the General Revenue Fund as provided by this Section a
total amount equal to 1.0% of the estimated general funds
revenues to the Pension Stabilization Fund.

09800SB1544sam003 - 10 - LRB098 07988 JDS 43665 a
(c-10) In State fiscal year 2020 and each fiscal year
thereafter, the State Comptroller shall order transferred and
the State Treasurer shall transfer $1,000,000,000 from the
General Revenue Fund to the Pension Stabilization Fund.
(c-15) The transfers made pursuant to subsection (c-10) of
this Section shall continue through State fiscal year 2045 or
until each of the designated retirement systems, as defined in
Section 25, has achieved the funding ratio prescribed by law
for that retirement system, whichever occurs first; provided
that those transfers shall not be made after any provision of
this Act that is designated as inseverable in Section 97 of
this Act is declared to be unconstitutional or invalid other
than as applied.
(d) The Comptroller shall transfer 1/12 of the total amount
to be transferred each fiscal year under this Section into the
Pension Stabilization Fund on the first day of each month of
that fiscal year or as soon thereafter as possible; except that
the final transfer of the fiscal year shall be made as soon as
practical after the August 31 following the end of the fiscal
year.
Until State fiscal year 2014, before Before the final
transfer for a fiscal year is made, the Comptroller shall
reconcile the estimated general funds revenues used in
calculating the other transfers under this Section for that
fiscal year with the actual general funds revenues for that
fiscal year. The final transfer for the fiscal year shall be

09800SB1544sam003 - 11 - LRB098 07988 JDS 43665 a
adjusted so that the total amount transferred under this
Section for that fiscal year is equal to the percentage
specified in subsection (b) or (c) of this Section, whichever
is applicable, of the actual general funds revenues for that
fiscal year. The actual general funds revenues for the fiscal
year shall be calculated in a manner consistent with subsection
(c) of Section 10 of this Act.
(Source: P.A. 94-839, eff. 6-6-06.)
(30 ILCS 122/25)
Sec. 25. Transfers from the Pension Stabilization Fund.
(a) As used in this Section, "designated retirement
systems" means:
(1) the State Employees' Retirement System of
Illinois;
(2) the Teachers' Retirement System of the State of
Illinois;
(3) the State Universities Retirement System;
(4) the Judges Retirement System of Illinois; and
(5) the General Assembly Retirement System.
(b) As soon as may be practical after any money is
deposited into the Pension Stabilization Fund, the State
Comptroller shall apportion the deposited amount among the
designated retirement systems and the State Comptroller and
State Treasurer shall pay the apportioned amounts to the
designated retirement systems. The amount deposited shall be

09800SB1544sam003 - 12 - LRB098 07988 JDS 43665 a
apportioned among the designated retirement systems in the same
proportion as their respective portions of the total actuarial
reserve deficiency of the designated retirement systems, as
most recently determined by the Governor's Office of Management
and Budget. Amounts received by a designated retirement system
under this Section shall be used for funding the unfunded
liabilities of the retirement system. Payments under this
Section are authorized by the continuing appropriation under
Section 1.7 of the State Pension Funds Continuing Appropriation
Act.
(c) At the request of the State Comptroller, the Governor's
Office of Management and Budget shall determine the individual
and total actuarial reserve deficiencies of the designated
retirement systems. For this purpose, the Governor's Office of
Management and Budget shall consider the latest available audit
and actuarial reports of each of the retirement systems and the
relevant reports and statistics of the Public Pension Division
of the Department of Financial and Professional Regulation.
(d) Payments to the designated retirement systems under
this Section shall be in addition to, and not in lieu of, any
State contributions required under Section 2-124, 14-131,
15-155, 16-158, or 18-131 of the Illinois Pension Code.
Payments to the designated retirement systems under this
Section, transferred after the effective date of this
amendatory Act of the 98th General Assembly, do not reduce and
do not constitute payment of any portion of the required State

09800SB1544sam003 - 13 - LRB098 07988 JDS 43665 a
contribution under Article 2, 14, 15, 16, or 18 of the Illinois
Pension Code in that fiscal year. Such amounts shall not
reduce, and shall not be included in the calculation of, the
required State contribution under Article 2, 14, 15, 16, or 18
of the Illinois Pension Code in any future year, until the
designated retirement system has received payment of
contributions pursuant to this Act.
(Source: P.A. 94-839, eff. 6-6-06.)
Section A-20. The Illinois Pension Code is amended by
changing Sections 1-103.3, 2-101, 2-105, 2-107, 2-108, 2-119,
2-119.1, 2-121.1, 2-124, 2-125, 2-126, 2-134, 2-162, 7-109,
14-103.10, 14-106, 14-107, 14-108, 14-110, 14-114, 14-131,
14-132, 14-133, 14-135.08, 14-152.1, 15-106, 15-107, 15-111,
15-113.2, 15-135, 15-136, 15-155, 15-156, 15-157, 15-165, and
15-198 and by adding Sections 2-105.1, 2-105.2, 14-103.40,
14-103.41, 15-107.1, and 15-107.2 as follows:
(40 ILCS 5/1-103.3)
Sec. 1-103.3. Application of 1994 amendment; funding
standard.
(a) The provisions of Public Act 88-593 this amendatory Act
of 1994 that change the method of calculating, certifying, and
paying the required State contributions to the retirement
systems established under Articles 2, 14, 15, 16, and 18 shall
first apply to the State contributions required for State

09800SB1544sam003 - 14 - LRB098 07988 JDS 43665 a
fiscal year 1996.
(b) (Blank) The General Assembly declares that a funding
ratio (the ratio of a retirement system's total assets to its
total actuarial liabilities) of 90% is an appropriate goal for
State-funded retirement systems in Illinois, and it finds that
a funding ratio of 90% is now the generally-recognized norm
throughout the nation for public employee retirement systems
that are considered to be financially secure and funded in an
appropriate and responsible manner.
(c) Every 5 years, beginning in 1999, the Commission on
Government Forecasting and Accountability, in consultation
with the affected retirement systems and the Governor's Office
of Management and Budget (formerly Bureau of the Budget), shall
consider and determine whether the funding goals 90% funding
ratio adopted in Articles 2, 14, 15, 16, and 18 of this Code
continue subsection (b) continues to represent an appropriate
funding goals goal for those State-funded retirement systems in
Illinois, and it shall report its findings and recommendations
on this subject to the Governor and the General Assembly.
(Source: P.A. 93-1067, eff. 1-15-05.)
(40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
Sec. 2-101. Creation of system. A retirement system is
created to provide retirement annuities, survivor's annuities
and other benefits for certain members of the General Assembly,
certain elected state officials, and their beneficiaries.

09800SB1544sam003 - 15 - LRB098 07988 JDS 43665 a
The system shall be known as the "General Assembly
Retirement System". All its funds and property shall be a trust
separate from all other entities, maintained for the purpose of
securing payment of annuities and benefits under this Article.
Participation in the retirement system created under this
Article is restricted to persons who become participants before
January 1, 2014. Beginning on that date, the System shall not
accept any new participants.
(Source: P.A. 83-1440.)
(40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
Sec. 2-105. Member. "Member": Members of the General
Assembly of this State, including persons who enter military
service while a member of the General Assembly, and any person
serving as Governor, Lieutenant Governor, Secretary of State,
Treasurer, Comptroller, or Attorney General for the period of
service in such office.
Any person who has served for 10 or more years as Clerk or
Assistant Clerk of the House of Representatives, Secretary or
Assistant Secretary of the Senate, or any combination thereof,
may elect to become a member of this system while thenceforth
engaged in such service by filing a written election with the
board. Any person so electing shall be deemed an active member
of the General Assembly for the purpose of validating and
transferring any service credits earned under any of the funds
and systems established under Articles 3 through 18 of this

09800SB1544sam003 - 16 - LRB098 07988 JDS 43665 a
Code.
However, notwithstanding any other provision of this
Article, a person shall not be deemed a member for the purposes
of this Article unless he or she became a participant of the
System before January 1, 2014.
(Source: P.A. 85-1008.)
(40 ILCS 5/2-105.1 new)
Sec. 2-105.1. Tier I participant. "Tier I participant": A
participant who first became a participant before January 1,
2011.
(40 ILCS 5/2-105.2 new)
Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
former Tier I participant who is receiving a retirement
annuity.
(40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
Sec. 2-107. Participant. "Participant": Any member who
elects to participate; and any former member who elects to
continue participation under Section 2-117.1, for the duration
of such continued participation. However, notwithstanding any
other provision of this Article, a person shall not be deemed a
participant for the purposes of this Article unless he or she
became a participant of the System before January 1, 2014.
(Source: P.A. 86-1488.)

09800SB1544sam003 - 17 - LRB098 07988 JDS 43665 a
(40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
Sec. 2-108. Salary. "Salary": (1) For members of the
General Assembly, the total compensation paid to the member by
the State for one year of service, including the additional
amounts, if any, paid to the member as an officer pursuant to
Section 1 of "An Act in relation to the compensation and
emoluments of the members of the General Assembly", approved
December 6, 1907, as now or hereafter amended.
(2) For the State executive officers specified in Section
2-105, the total compensation paid to the member for one year
of service.
(3) For members of the System who are participants under
Section 2-117.1, or who are serving as Clerk or Assistant Clerk
of the House of Representatives or Secretary or Assistant
Secretary of the Senate, the total compensation paid to the
member for one year of service, but not to exceed the salary of
the highest salaried officer of the General Assembly.
However, in the event that federal law results in any
participant receiving imputed income based on the value of
group term life insurance provided by the State, such imputed
income shall not be included in salary for the purposes of this
Article.
Notwithstanding any other provision of this Code, the
salary of a Tier I participant for the purposes of this Code
shall not exceed, for periods of service in a term of office

09800SB1544sam003 - 18 - LRB098 07988 JDS 43665 a
beginning on or after the effective date of this amendatory Act
of the 98th General Assembly, the greater of (i) the annual
contribution and benefit base established for the applicable
year by the Commissioner of Social Security under the federal
Social Security Act or (ii) the annual salary of the
participant during the 365 days immediately preceding that
effective date.
(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
(40 ILCS 5/2-119) (from Ch. 108 1/2, par. 2-119)
Sec. 2-119. Retirement annuity - conditions for
eligibility.
(a) A participant whose service as a member is terminated,
regardless of age or cause, is entitled to a retirement annuity
beginning on the date specified by the participant in a written
application subject to the following conditions:
1. The date the annuity begins does not precede the
date of final termination of service, or is not more than
30 days before the receipt of the application by the board
in the case of annuities based on disability or one year
before the receipt of the application in the case of
annuities based on attained age;
2. The participant meets one of the following
eligibility requirements:
For a participant who first becomes a participant of
this System before January 1, 2011 (the effective date of

09800SB1544sam003 - 19 - LRB098 07988 JDS 43665 a
Public Act 96-889):
(A) He or she has attained age 55 and has at least
8 years of service credit;
(B) He or she has attained age 62 and terminated
service after July 1, 1971 with at least 4 years of
service credit; or
(C) He or she has completed 8 years of service and
has become permanently disabled and as a consequence,
is unable to perform the duties of his or her office.
For a participant who first becomes a participant of
this System on or after January 1, 2011 (the effective date
of Public Act 96-889), he or she has attained age 67 and
has at least 8 years of service credit.
(a-5) Notwithstanding subsection (a) of this Section, for a
Tier I participant who begins receiving a retirement annuity
under this Section after July 1, 2013:
(1) If the Tier I participant is at least 45 years old
on the effective date of this amendatory Act of the 98th
General Assembly, then the references to age 55 and 62 in
subsection (a) of this Section remain unchanged.
(2) If the Tier I participant is at least 40 but less
than 45 years old on the effective date of this amendatory
Act of the 98th General Assembly, then the references to
age 55 and 62 in subsection (a) of this Section are
increased by one year.
(3) If the Tier I participant is at least 35 but less

09800SB1544sam003 - 20 - LRB098 07988 JDS 43665 a
than 40 years old on the effective date of this amendatory
Act of the 98th General Assembly, then the references to
age 55 and 62 in subsection (a) of this Section are
increased by 3 years.
(4) If the Tier I participant is less than 35 years old
on the effective date of this amendatory Act of the 98th
General Assembly, then the references to age 55 and 62 in
subsection (a) of this Section are increased by 5 years.
Notwithstanding Section 1-103.1, this subsection (a-5)
applies without regard to whether or not the Tier I member is
in active service under this Article on or after the effective
date of this amendatory Act of the 98th General Assembly.
(a-5) A participant who first becomes a participant of this
System on or after January 1, 2011 (the effective date of
Public Act 96-889) who has attained age 62 and has at least 8
years of service credit may elect to receive the lower
retirement annuity provided in paragraph (c) of Section
2-119.01 of this Code.
(b) A participant shall be considered permanently disabled
only if: (1) disability occurs while in service and is of such
a nature as to prevent him or her from reasonably performing
the duties of his or her office at the time; and (2) the board
has received a written certificate by at least 2 licensed
physicians appointed by the board stating that the member is
disabled and that the disability is likely to be permanent.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)

09800SB1544sam003 - 21 - LRB098 07988 JDS 43665 a
(40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
Sec. 2-119.1. Automatic increase in retirement annuity.
(a) Except as provided in subsections (a-1), (a-2), and
(a-3) of this Section, a A participant who retires after June
30, 1967, and who has not received an initial increase under
this Section before the effective date of this amendatory Act
of 1991, shall, in January or July next following the first
anniversary of retirement, whichever occurs first, and in the
same month of each year thereafter, but in no event prior to
age 60, have the amount of the originally granted retirement
annuity increased as follows: for each year through 1971, 1
1/2%; for each year from 1972 through 1979, 2%; and for 1980
and each year thereafter, 3%. Annuitants who have received an
initial increase under this subsection prior to the effective
date of this amendatory Act of 1991 shall continue to receive
their annual increases in the same month as the initial
increase.
(a-1) Notwithstanding any other provision of this Article,
except subsection (a-3) of this Section, for a Tier I retiree,
the amount of each automatic annual increase in retirement
annuity occurring on or after the effective date of this
amendatory Act of the 98th General Assembly shall be 3% of the
lesser of (1) the total annuity payable at the time of the
increase, including previous increases granted, or (2) $1,000
multiplied by the number of years of creditable service upon

09800SB1544sam003 - 22 - LRB098 07988 JDS 43665 a
which the annuity is based.
(a-2) Notwithstanding any other provision of this Article,
except subsection (a-3) of this Section, for a Tier I retiree,
the monthly retirement annuity shall first be subject to annual
increases on the January 1 occurring on or next after the
attainment of age 67 or the January 1 occurring on or next
after the fifth anniversary of the annuity start date,
whichever occurs earlier. If on the effective date of this
amendatory Act of the 98th General Assembly a Tier I retiree
has already received an annual increase under this Section but
does not yet meet the new eligibility requirements of this
subsection, the annual increases already received shall
continue in force, but no additional annual increase shall be
granted until the Tier I retiree meets the new eligibility
requirements.
(a-3) If on the effective date of this amendatory Act of
the 98th General Assembly a Tier I retiree has already received
an annual increase under this Section but does not yet meet the
new eligibility requirements of this subsection, the annual
increases already received shall continue in force, but no
additional annual increase shall be granted until the Tier I
retiree meets the new eligibility requirements.
(a-4) Notwithstanding Section 1-103.1, subsections (a-1),
(a-2), and (a-3) of this Section apply without regard to
whether or not the Tier I retiree is in active service under
this Article on or after the effective date of this amendatory

09800SB1544sam003 - 23 - LRB098 07988 JDS 43665 a
Act of the 98th General Assembly.
(b) Beginning January 1, 1990, for eligible participants
who remain in service after attaining 20 years of creditable
service, the 3% increases provided under subsection (a) shall
begin to accrue on the January 1 next following the date upon
which the participant (1) attains age 55, or (2) attains 20
years of creditable service, whichever occurs later, and shall
continue to accrue while the participant remains in service;
such increases shall become payable on January 1 or July 1,
whichever occurs first, next following the first anniversary of
retirement. For any person who has service credit in the System
for the entire period from January 15, 1969 through December
31, 1992, regardless of the date of termination of service, the
reference to age 55 in clause (1) of this subsection (b) shall
be deemed to mean age 50.
This subsection (b) does not apply to any person who first
becomes a member of the System after August 8, 2003 (the
effective date of Public Act 93-494) this amendatory Act of the
93rd General Assembly.
(b-5) Notwithstanding any other provision of this Article,
a participant who first becomes a participant on or after
January 1, 2011 (the effective date of Public Act 96-889)
shall, in January or July next following the first anniversary
of retirement, whichever occurs first, and in the same month of
each year thereafter, but in no event prior to age 67, have the
amount of the originally granted retirement annuity then being

09800SB1544sam003 - 24 - LRB098 07988 JDS 43665 a
paid increased by 3% or one-half the annual unadjusted
percentage increase in the Consumer Price Index for All Urban
Consumers as determined by the Public Pension Division of the
Department of Insurance under subsection (a) of Section
2-108.1, whichever is less. The changes made to this subsection
by this amendatory Act of the 98th General Assembly do not
apply to any automatic annual increase granted under this
subsection before the effective date of this amendatory Act.
(c) The foregoing provisions relating to automatic
increases are not applicable to a participant who retires
before having made contributions (at the rate prescribed in
Section 2-126) for automatic increases for less than the
equivalent of one full year. However, in order to be eligible
for the automatic increases, such a participant may make
arrangements to pay to the system the amount required to bring
the total contributions for the automatic increase to the
equivalent of one year's contributions based upon his or her
last salary.
(d) A participant who terminated service prior to July 1,
1967, with at least 14 years of service is entitled to an
increase in retirement annuity beginning January, 1976, and to
additional increases in January of each year thereafter.
The initial increase shall be 1 1/2% of the originally
granted retirement annuity multiplied by the number of full
years that the annuitant was in receipt of such annuity prior
to January 1, 1972, plus 2% of the originally granted

09800SB1544sam003 - 25 - LRB098 07988 JDS 43665 a
retirement annuity for each year after that date. The
subsequent annual increases shall be at the rate of 2% of the
originally granted retirement annuity for each year through
1979 and at the rate of 3% for 1980 and thereafter.
(e) Beginning January 1, 1990, all automatic annual
increases payable under this Section shall be calculated as a
percentage of the total annuity payable at the time of the
increase, including previous increases granted under this
Article.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-121.1) (from Ch. 108 1/2, par. 2-121.1)
Sec. 2-121.1. Survivor's annuity - amount.
(a) A surviving spouse shall be entitled to 66 2/3% of the
amount of retirement annuity to which the participant or
annuitant was entitled on the date of death, without regard to
whether the participant had attained age 55 prior to his or her
death, subject to a minimum payment of 10% of salary. If a
surviving spouse, regardless of age, has in his or her care at
the date of death any eligible child or children of the
participant, the survivor's annuity shall be the greater of the
following: (1) 66 2/3% of the amount of retirement annuity to
which the participant or annuitant was entitled on the date of
death, or (2) 30% of the participant's salary increased by 10%
of salary on account of each such child, subject to a total
payment for the surviving spouse and children of 50% of salary.

09800SB1544sam003 - 26 - LRB098 07988 JDS 43665 a
If eligible children survive but there is no surviving spouse,
or if the surviving spouse dies or becomes disqualified by
remarriage while eligible children survive, each eligible
child shall be entitled to an annuity of 20% of salary, subject
to a maximum total payment for all such children of 50% of
salary.
However, the survivor's annuity payable under this Section
shall not be less than 100% of the amount of retirement annuity
to which the participant or annuitant was entitled on the date
of death, if he or she is survived by a dependent disabled
child.
The salary to be used for determining these benefits shall
be the salary used for determining the amount of retirement
annuity as provided in Section 2-119.01.
(b) Upon the death of a participant after the termination
of service or upon death of an annuitant, the maximum total
payment to a surviving spouse and eligible children, or to
eligible children alone if there is no surviving spouse, shall
be 75% of the retirement annuity to which the participant or
annuitant was entitled, unless there is a dependent disabled
child among the survivors.
(c) When a child ceases to be an eligible child, the
annuity to that child, or to the surviving spouse on account of
that child, shall thereupon cease, and the annuity payable to
the surviving spouse or other eligible children shall be
recalculated if necessary.

09800SB1544sam003 - 27 - LRB098 07988 JDS 43665 a
Upon the ineligibility of the last eligible child, the
annuity shall immediately revert to the amount payable upon
death of a participant or annuitant who leaves no eligible
children. If the surviving spouse is then under age 50, the
annuity as revised shall be deferred until the attainment of
age 50.
(d) Beginning January 1, 1990, every survivor's annuity
shall be increased (1) on each January 1 occurring on or after
the commencement of the annuity if the deceased member died
while receiving a retirement annuity, or (2) in other cases, on
each January 1 occurring on or after the first anniversary of
the commencement of the annuity, by an amount equal to 3% of
the current amount of the annuity, including any previous
increases under this Article. Such increases shall apply
without regard to whether the deceased member was in service on
or after the effective date of this amendatory Act of 1991, but
shall not accrue for any period prior to January 1, 1990.
(d-5) Notwithstanding any other provision of this Article,
the initial survivor's annuity of a survivor of a participant
who first becomes a participant on or after January 1, 2011
(the effective date of Public Act 96-889) shall be in the
amount of 66 2/3% of the amount of the retirement annuity to
which the participant or annuitant was entitled on the date of
death and shall be increased (1) on each January 1 occurring on
or after the commencement of the annuity if the deceased member
died while receiving a retirement annuity or (2) in other

09800SB1544sam003 - 28 - LRB098 07988 JDS 43665 a
cases, on each January 1 occurring on or after the first
anniversary of the commencement of the annuity, by an amount
equal to 3% or one-half the annual unadjusted percentage
increase in the Consumer Price Index for All Urban Consumers as
determined by the Public Pension Division of the Department of
Insurance under subsection (a) of Section 2-108.1, whichever is
less, of the originally granted survivor's annuity then being
paid. The changes made to this subsection by this amendatory
Act of the 98th General Assembly do not apply to any automatic
annual increase granted under this subsection before the
effective date of this amendatory Act.
(e) Notwithstanding any other provision of this Article,
beginning January 1, 1990, the minimum survivor's annuity
payable to any person who is entitled to receive a survivor's
annuity under this Article shall be $300 per month, without
regard to whether or not the deceased participant was in
service on the effective date of this amendatory Act of 1989.
(f) In the case of a proportional survivor's annuity
arising under the Retirement Systems Reciprocal Act where the
amount payable by the System on January 1, 1993 is less than
$300 per month, the amount payable by the System shall be
increased beginning on that date by a monthly amount equal to
$2 for each full year that has expired since the annuity began.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)

09800SB1544sam003 - 29 - LRB098 07988 JDS 43665 a
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
administering the System on a 100% 90% funded basis in
accordance with actuarial recommendations by the end of State
fiscal year 2044.
(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 2015 through 2044, 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
equal to the sum of (1) the State's portion of the projected
normal cost for that fiscal year, plus (2) an amount sufficient
to bring the total assets of the System up to 100% of the total
actuarial liabilities of the System by the end of State fiscal
year 2044. 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 2044 and shall be determined under the projected
unit credit actuarial cost method.
For State fiscal years 2012 through 2014 through 2045, the

09800SB1544sam003 - 30 - LRB098 07988 JDS 43665 a
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
total required State contribution for State fiscal year 2007 is
$5,220,300.
For each of State fiscal years 2008 through 2009, 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.

09800SB1544sam003 - 31 - LRB098 07988 JDS 43665 a
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.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 2-134 and shall be made from the proceeds
of bonds sold in fiscal year 2011 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 2011, and (iii) any reduction in
bond proceeds due to the issuance of discounted bonds, if
applicable.
Beginning in State fiscal year 2045, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 100% of the total
actuarial liabilities of the System.
Beginning in State fiscal year 2046, the minimum State

09800SB1544sam003 - 32 - LRB098 07988 JDS 43665 a
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 100% 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 through State
fiscal year 2014, 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 in fiscal year 2003 for the

09800SB1544sam003 - 33 - LRB098 07988 JDS 43665 a
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 in fiscal year 2003 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

09800SB1544sam003 - 34 - LRB098 07988 JDS 43665 a
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. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
7-13-12.)
(40 ILCS 5/2-125) (from Ch. 108 1/2, par. 2-125)
Sec. 2-125. Obligations of State; funding guarantee.
(a) The payment of (1) the required State contributions,
(2) all benefits granted under this system and (3) all expenses
of administration and operation are obligations of the State to
the extent specified in this Article.
(b) All income, interest and dividends derived from
deposits and investments shall be credited to the account of
the system in the State Treasury and used to pay benefits under
this Article.
(c) Beginning July 1, 2013, the State shall be
contractually obligated to contribute to the System under
Section 2-124 in each State fiscal year an amount not less than
the sum of (i) the State's normal cost for that year and (ii)
the portion of the unfunded accrued liability assigned to that
year by law in accordance with a schedule that distributes
payments equitably over a reasonable period of time and in
accordance with accepted actuarial practices. The obligations
created under this subsection (c) are contractual obligations

09800SB1544sam003 - 35 - LRB098 07988 JDS 43665 a
protected and enforceable under Article I, Section 16 and
Article XIII, Section 5 of the Illinois Constitution.
Notwithstanding any other provision of law, if the State
fails to pay in a State fiscal year the amount guaranteed under
this subsection, the System may bring a mandamus action in the
Circuit Court of Sangamon County to compel the State to make
that payment, irrespective of other remedies that may be
available to the System. It shall be the mandatory fiduciary
obligation of the Board of the System to bring that action if
the State fails to pay in the fiscal year the amount guaranteed
under this subsection. Before commencing that action, the Board
shall submit a voucher for monthly contributions as required in
Section 2-124. If the State fails to pay a vouchered amount
within 90 days after receiving a voucher for that amount, then
the Board shall submit a written request to the Comptroller
seeking payment of that amount. A copy of the request shall be
filed with the Secretary of State, and the Secretary of State
shall provide copies of the request to the Governor and General
Assembly. No earlier than the 16th day after filing a request
with the Secretary, but no later than the 21st day after filing
that request, the Board may commence such an action in the
Circuit Court. If the Board fails to commence such action on or
before the 21st day after filing the request with the Secretary
of State, then any participant or annuitant may file a mandamus
action against the Board to compel the Board to commence its
mandamus action against the State. This Section constitutes an

09800SB1544sam003 - 36 - LRB098 07988 JDS 43665 a
express waiver of the State's sovereign immunity. In ordering
the State to make the required payment, the court may order a
reasonable payment schedule to enable the State to make the
required payment. The obligations and causes of action created
under this subsection shall be in addition to any other right
or remedy otherwise accorded by common law, or State or federal
law, and nothing in this subsection shall be construed to deny,
abrogate, impair, or waive any such common law or statutory
right or remedy.
Any payments required to be made by the State pursuant to
this subsection (c) are expressly subordinated to the payment
of the principal, interest, and premium, if any, on any bonded
debt obligation of the State or any other State-created entity,
either currently outstanding or to be issued, for which the
source of repayment or security thereon is derived directly or
indirectly from tax revenues collected by the State or any
other State-created entity. Payments on such bonded
obligations include any statutory fund transfers or other
prefunding mechanisms or formulas set forth, now or hereafter,
in State law or bond indentures, into debt service funds or
accounts of the State related to such bonded obligations,
consistent with the payment schedules associated with such
obligations.
(Source: P.A. 83-1440.)
(40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)

09800SB1544sam003 - 37 - LRB098 07988 JDS 43665 a
Sec. 2-126. Contributions by participants.
(a) Each participant shall contribute toward the cost of
his or her retirement annuity a percentage of each payment of
salary received by him or her for service as a member as
follows: for service between October 31, 1947 and January 1,
1959, 5%; for service between January 1, 1959 and June 30,
1969, 6%; for service between July 1, 1969 and January 10,
1973, 6 1/2%; for service after January 10, 1973, 7%; for
service after December 31, 1981, 8 1/2%.
(a-5) In addition to the contributions otherwise required
under this Article, each Tier I participant shall also make the
following contributions toward the cost of his or her
retirement annuity from each payment of salary received by him
or her for service as a member:
(1) beginning July 1, 2013 and through June 30, 2014,
1% of salary; and
(2) beginning on July 1, 2014, 2% of salary.
(b) Beginning August 2, 1949, each male participant, and
from July 1, 1971, each female participant shall contribute
towards the cost of the survivor's annuity 2% of salary.
A participant who has no eligible survivor's annuity
beneficiary may elect to cease making contributions for
survivor's annuity under this subsection. A survivor's annuity
shall not be payable upon the death of a person who has made
this election, unless prior to that death the election has been
revoked and the amount of the contributions that would have

09800SB1544sam003 - 38 - LRB098 07988 JDS 43665 a
been paid under this subsection in the absence of the election
is paid to the System, together with interest at the rate of 4%
per year from the date the contributions would have been made
to the date of payment.
(c) Beginning July 1, 1967, each participant shall
contribute 1% of salary towards the cost of automatic increase
in annuity provided in Section 2-119.1. These contributions
shall be made concurrently with contributions for retirement
annuity purposes.
(d) In addition, each participant serving as an officer of
the General Assembly shall contribute, for the same purposes
and at the same rates as are required of a regular participant,
on each additional payment received as an officer. If the
participant serves as an officer for at least 2 but less than 4
years, he or she shall contribute an amount equal to the amount
that would have been contributed had the participant served as
an officer for 4 years. Persons who serve as officers in the
87th General Assembly but cannot receive the additional payment
to officers because of the ban on increases in salary during
their terms may nonetheless make contributions based on those
additional payments for the purpose of having the additional
payments included in their highest salary for annuity purposes;
however, persons electing to make these additional
contributions must also pay an amount representing the
corresponding employer contributions, as calculated by the
System.

09800SB1544sam003 - 39 - LRB098 07988 JDS 43665 a
(e) Notwithstanding any other provision of this Article,
the required contribution of a participant who first becomes a
participant on or after January 1, 2011 shall not exceed the
contribution that would be due under this Article if that
participant's highest salary for annuity purposes were
$106,800, plus any increases in that amount under Section
2-108.1.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
Sec. 2-134. To certify required State contributions and
submit vouchers.
(a) The Board shall certify to the Governor on or before
December 15 of each year through until December 15, 2011 the
amount of the required State contribution to the System for the
next fiscal year and shall specifically identify the System's
projected State normal cost for that fiscal year. The
certification shall include a copy of the actuarial
recommendations upon which it is based and shall specifically
identify the System's projected State normal cost for that
fiscal year.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial

09800SB1544sam003 - 40 - LRB098 07988 JDS 43665 a
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions.
On or before January 15, 2013 and every January 15
thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The Board's certification shall
include a copy of the actuarial recommendations upon which it
is based and shall specifically identify the System's projected
State normal cost for that fiscal year. The Board's
certification must note any deviations from the State Actuary's
recommended changes, the reason or reasons for not following
the State Actuary's recommended changes, and the fiscal impact
of not following the State Actuary's recommended changes on the
required State contribution.
(a-7) 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

09800SB1544sam003 - 41 - LRB098 07988 JDS 43665 a
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.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(b) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month 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). 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 (d) 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

09800SB1544sam003 - 42 - LRB098 07988 JDS 43665 a
(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 Section, the difference shall be
paid from the General Revenue Fund under the continuing
appropriation authority provided in Section 1.1 of the State
Pension Funds Continuing Appropriation Act.
(c) The full amount of any annual appropriation for the
System for State fiscal year 1995 shall be transferred and made
available to the System at the beginning of that fiscal year at
the request of the Board. Any excess funds remaining at the end
of any fiscal year from appropriations shall be retained by the
System as a general reserve to meet the System's accrued
liabilities.
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
97-694, eff. 6-18-12.)
(40 ILCS 5/2-162)
Sec. 2-162. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly. "New benefit

09800SB1544sam003 - 43 - LRB098 07988 JDS 43665 a
increase", however, does not include any benefit increase
resulting from the changes made to this Article by this
amendatory Act of the 98th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit

09800SB1544sam003 - 44 - LRB098 07988 JDS 43665 a
increase shall expire at the end of the fiscal year in which
the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
(40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
Sec. 7-109. Employee.
(1) "Employee" means any person who:
(a) 1. Receives earnings as payment for the performance
of personal services or official duties out of the
general fund of a municipality, or out of any special

09800SB1544sam003 - 45 - LRB098 07988 JDS 43665 a
fund or funds controlled by a municipality, or by an
instrumentality thereof, or a participating
instrumentality, including, in counties, the fees or
earnings of any county fee office; and
2. Under the usual common law rules applicable in
determining the employer-employee relationship, has
the status of an employee with a municipality, or any
instrumentality thereof, or a participating
instrumentality, including aldermen, county
supervisors and other persons (excepting those
employed as independent contractors) who are paid
compensation, fees, allowances or other emolument for
official duties, and, in counties, the several county
fee offices.
(b) Serves as a township treasurer appointed under the
School Code, as heretofore or hereafter amended, and who
receives for such services regular compensation as
distinguished from per diem compensation, and any regular
employee in the office of any township treasurer whether or
not his earnings are paid from the income of the permanent
township fund or from funds subject to distribution to the
several school districts and parts of school districts as
provided in the School Code, or from both such sources; or
is the chief executive officer, chief educational officer,
chief fiscal officer, or other employee of a Financial
Oversight Panel established pursuant to Article 1H of the

09800SB1544sam003 - 46 - LRB098 07988 JDS 43665 a
School Code, other than a superintendent or certified
school business official, except that such person shall not
be treated as an employee under this Section if that person
has negotiated with the Financial Oversight Panel, in
conjunction with the school district, a contractual
agreement for exclusion from this Section.
(c) Holds an elective office in a municipality,
instrumentality thereof or participating instrumentality.
(2) "Employee" does not include persons who:
(a) Are eligible for inclusion under any of the
following laws:
1. "An Act in relation to an Illinois State
Teachers' Pension and Retirement Fund", approved May
27, 1915, as amended;
2. Articles 15 and 16 of this Code.
However, such persons shall be included as employees to
the extent of earnings that are not eligible for inclusion
under the foregoing laws for services not of an
instructional nature of any kind.
However, any member of the armed forces who is employed
as a teacher of subjects in the Reserve Officers Training
Corps of any school and who is not certified under the law
governing the certification of teachers shall be included
as an employee.
(b) Are designated by the governing body of a
municipality in which a pension fund is required by law to

09800SB1544sam003 - 47 - LRB098 07988 JDS 43665 a
be established for policemen or firemen, respectively, as
performing police or fire protection duties, except that
when such persons are the heads of the police or fire
department and are not eligible to be included within any
such pension fund, they shall be included within this
Article; provided, that such persons shall not be excluded
to the extent of concurrent service and earnings not
designated as being for police or fire protection duties.
However, (i) any head of a police department who was a
participant under this Article immediately before October
1, 1977 and did not elect, under Section 3-109 of this Act,
to participate in a police pension fund shall be an
"employee", and (ii) any chief of police who elects to
participate in this Fund under Section 3-109.1 of this
Code, regardless of whether such person continues to be
employed as chief of police or is employed in some other
rank or capacity within the police department, shall be an
employee under this Article for so long as such person is
employed to perform police duties by a participating
municipality and has not lawfully rescinded that election.
(c) After August 26, 2011 (the effective date of Public
Act 97-609), are contributors to or eligible to contribute
to a Taft-Hartley pension plan established on or before
June 1, 2011 and are employees of a theatre, arena, or
convention center that is located in a municipality located
in a county with a population greater than 5,000,000, and

09800SB1544sam003 - 48 - LRB098 07988 JDS 43665 a
to which the participating municipality is required to
contribute as the person's employer based on earnings from
the municipality. Nothing in this paragraph shall affect
service credit or creditable service for any period of
service prior to August 26, 2011, and this paragraph shall
not apply to individuals who are participating in the Fund
prior to August 26, 2011.
(d) Become an employee of any of the following
participating instrumentalities on or after the effective
date of this amendatory Act of the 98th General Assembly:
the Illinois Municipal League; the Illinois Association of
Park Districts; the Illinois Supervisors, County
Commissioners and Superintendents of Highways Association;
an association, or not-for-profit corporation, membership
in which is authorized under Section 85-15 of the Township
Code; the United Counties Council; or the Will County
Governmental League.
(3) All persons, including, without limitation, public
defenders and probation officers, who receive earnings from
general or special funds of a county for performance of
personal services or official duties within the territorial
limits of the county, are employees of the county (unless
excluded by subsection (2) of this Section) notwithstanding
that they may be appointed by and are subject to the direction
of a person or persons other than a county board or a county
officer. It is hereby established that an employer-employee

09800SB1544sam003 - 49 - LRB098 07988 JDS 43665 a
relationship under the usual common law rules exists between
such employees and the county paying their salaries by reason
of the fact that the county boards fix their rates of
compensation, appropriate funds for payment of their earnings
and otherwise exercise control over them. This finding and this
amendatory Act shall apply to all such employees from the date
of appointment whether such date is prior to or after the
effective date of this amendatory Act and is intended to
clarify existing law pertaining to their status as
participating employees in the Fund.
(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;
97-813, eff. 7-13-12.)
(40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
Sec. 14-103.10. Compensation.
(a) For periods of service prior to January 1, 1978, the
full rate of salary or wages payable to an employee for
personal services performed if he worked the full normal
working period for his position, subject to the following
maximum amounts: (1) prior to July 1, 1951, $400 per month or
$4,800 per year; (2) between July 1, 1951 and June 30, 1957
inclusive, $625 per month or $7,500 per year; (3) beginning
July 1, 1957, no limitation.
In the case of service of an employee in a position
involving part-time employment, compensation shall be
determined according to the employees' earnings record.

09800SB1544sam003 - 50 - LRB098 07988 JDS 43665 a
(b) For periods of service on and after January 1, 1978,
all remuneration for personal services performed defined as
"wages" under the Social Security Enabling Act, including that
part of such remuneration which is in excess of any maximum
limitation provided in such Act, and including any benefits
received by an employee under a sick pay plan in effect before
January 1, 1981, but excluding lump sum salary payments:
(1) for vacation,
(2) for accumulated unused sick leave,
(3) upon discharge or dismissal,
(4) for approved holidays.
(c) For periods of service on or after December 16, 1978,
compensation also includes any benefits, other than lump sum
salary payments made at termination of employment, which an
employee receives or is eligible to receive under a sick pay
plan authorized by law.
(d) For periods of service after September 30, 1985,
compensation also includes any remuneration for personal
services not included as "wages" under the Social Security
Enabling Act, which is deducted for purposes of participation
in a program established pursuant to Section 125 of the
Internal Revenue Code or its successor laws.
(e) For members for which Section 1-160 applies for periods
of service on and after January 1, 2011, all remuneration for
personal services performed defined as "wages" under the Social
Security Enabling Act, excluding remuneration that is in excess

09800SB1544sam003 - 51 - LRB098 07988 JDS 43665 a
of the annual earnings, salary, or wages of a member or
participant, as provided in subsection (b-5) of Section 1-160,
but including any benefits received by an employee under a sick
pay plan in effect before January 1, 1981. Compensation shall
exclude lump sum salary payments:
(1) for vacation;
(2) for accumulated unused sick leave;
(3) upon discharge or dismissal; and
(4) for approved holidays.
(f) Notwithstanding any other provision of this Code, the
compensation of a Tier I member for the purposes of this Code
shall not exceed, for periods of service on or after the
effective date of this amendatory Act of the 98th General
Assembly, the greater of (i) the annual contribution and
benefit base established for the applicable year by the
Commissioner of Social Security under the federal Social
Security Act or (ii) the annual compensation of the member
during the 365 days immediately preceding that effective date;
except that this limitation does not apply to a member's
compensation that is determined under an employment contract or
collective bargaining agreement that is in effect on the
effective date of this amendatory Act of the 98th General
Assembly and has not been amended or renewed after that date.
(g) Notwithstanding the other provisions of this Section,
for an employee who first becomes a participant on or after the
effective date of this amendatory Act of the 98th General

09800SB1544sam003 - 52 - LRB098 07988 JDS 43665 a
Assembly, "compensation" does not include any payments or
reimbursements for travel vouchers.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/14-103.40 new)
Sec. 14-103.40. Tier I member. "Tier I member": A member of
this System who first became a member or participant before
January 1, 2011 under any reciprocal retirement system or
pension fund established under this Code other than a
retirement system or pension fund established under Article 2,
3, 4, 5, 6, or 18 of this Code.
(40 ILCS 5/14-103.41 new)
Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
Tier I member who is receiving a retirement annuity.
(40 ILCS 5/14-106) (from Ch. 108 1/2, par. 14-106)
Sec. 14-106. Membership service credit.
(a) After January 1, 1944, all service of a member since he
last became a member with respect to which contributions are
made shall count as membership service; provided, that for
service on and after July 1, 1950, 12 months of service shall
constitute a year of membership service, the completion of 15
days or more of service during any month shall constitute 1
month of membership service, 8 to 15 days shall constitute 1/2
month of membership service and less than 8 days shall

09800SB1544sam003 - 53 - LRB098 07988 JDS 43665 a
constitute 1/4 month of membership service. The payroll record
of each department shall constitute conclusive evidence of the
record of service rendered by a member.
(b) For a member who is employed and paid on an
academic-year basis rather than on a 12-month annual basis,
employment for a full academic year shall constitute a full
year of membership service, except that the member shall not
receive more than one year of membership service credit (plus
any additional service credit granted for unused sick leave)
for service during any 12-month period. This subsection (b)
applies to all such service for which the member has not begun
to receive a retirement annuity before January 1, 2001.
(c) A member who first participated in this System before
the effective date of this amendatory Act of the 98th General
Assembly shall be entitled to additional service credit, under
rules prescribed by the Board, for accumulated unused sick
leave credited to his account in the last Department on the
date of withdrawal from service or for any period for which he
would have been eligible to receive benefits under a sick pay
plan authorized by law, if he had suffered a sickness or
accident on the date of withdrawal from service. It shall be
the responsibility of the last Department to certify to the
Board the length of time salary or benefits would have been
paid to the member based upon the accumulated unused sick leave
or the applicable sick pay plan if he had become entitled
thereto because of sickness on the date that his status as an

09800SB1544sam003 - 54 - LRB098 07988 JDS 43665 a
employee terminated. This period of service credit granted
under this paragraph shall not be considered in determining the
date the retirement annuity is to begin, or final average
compensation.
Service credit is not available for unused sick leave
accumulated by a person who first participates in this System
on or after the effective date of this amendatory Act of the
98th General Assembly.
(Source: P.A. 92-14, eff. 6-28-01.)
(40 ILCS 5/14-107) (from Ch. 108 1/2, par. 14-107)
Sec. 14-107. Retirement annuity - service and age -
conditions.
(a) A member is entitled to a retirement annuity after
having at least 8 years of creditable service.
(b) A member who has at least 35 years of creditable
service may claim his or her retirement annuity at any age. A
member having at least 8 years of creditable service but less
than 35 may claim his or her retirement annuity upon or after
attainment of age 60 or, beginning January 1, 2001, any lesser
age which, when added to the number of years of his or her
creditable service, equals at least 85. A member upon or after
attainment of age 55 having at least 25 years of creditable
service (30 years if retirement is before January 1, 2001) may
elect to receive the lower retirement annuity provided in
paragraph (c) of Section 14-108 of this Code. For purposes of

09800SB1544sam003 - 55 - LRB098 07988 JDS 43665 a
the rule of 85, portions of years shall be counted in whole
months.
(c) Notwithstanding subsection (b) of this Section, for a
Tier I member who begins receiving a retirement annuity under
this Article after July 1, 2013:
(1) If the Tier I member is at least 45 years old on
the effective date of this amendatory Act of the 98th
General Assembly, then the references to age 55 and 60 in
subsection (b) of this Section remain unchanged and the
references to 85 in subsection (b) of this Section remain
unchanged.
(2) If the Tier I member is at least 40 but less than
45 years old on the effective date of this amendatory Act
of the 98th General Assembly, then the references to age 55
and 60 in subsection (b) of this Section are increased by
one year and the references to 85 in subsection (b) are
increased to 87.
(3) If the Tier I member is at least 35 but less than
40 years old on the effective date of this amendatory Act
of the 98th General Assembly, then the references to age 55
and 60 in subsection (b) of this Section are increased by 3
years and the references to 85 in subsection (b) are
increased to 91.
(4) If the Tier I member is less than 35 years old on
the effective date of this amendatory Act of the 98th
General Assembly, then the references to age 55 and 60 in

09800SB1544sam003 - 56 - LRB098 07988 JDS 43665 a
subsection (b) of this Section are increased by 5 years and
the references to 85 in subsection (b) are increased to 95.
Notwithstanding Section 1-103.1, this subsection (c)
applies without regard to whether or not the Tier I member is
in active service under this Article on or after the effective
date of this amendatory Act of the 98th General Assembly.
(d) The allowance shall begin with the first full calendar
month specified in the member's application therefor, the first
day of which shall not be before the date of withdrawal as
approved by the board. Regardless of the date of withdrawal,
the allowance need not begin within one year of application
therefor.
(Source: P.A. 91-927, eff. 12-14-00.)
(40 ILCS 5/14-108) (from Ch. 108 1/2, par. 14-108)
Sec. 14-108. Amount of retirement annuity. A member who has
contributed to the System for at least 12 months shall be
entitled to a prior service annuity for each year of certified
prior service credited to him, except that a member shall
receive 1/3 of the prior service annuity for each year of
service for which contributions have been made and all of such
annuity shall be payable after the member has made
contributions for a period of 3 years. Proportionate amounts
shall be payable for service of less than a full year after
completion of at least 12 months.
The total period of service to be considered in

09800SB1544sam003 - 57 - LRB098 07988 JDS 43665 a
establishing the measure of prior service annuity shall include
service credited in the Teachers' Retirement System of the
State of Illinois and the State Universities Retirement System
for which contributions have been made by the member to such
systems; provided that at least 1 year of the total period of 3
years prescribed for the allowance of a full measure of prior
service annuity shall consist of membership service in this
system for which credit has been granted.
(a) In the case of a member who retires on or after January
1, 1998 and is a noncovered employee, the retirement annuity
for membership service and prior service shall be 2.2% of final
average compensation for each year of service. Any service
credit established as a covered employee shall be computed as
stated in paragraph (b).
(b) In the case of a member who retires on or after January
1, 1998 and is a covered employee, the retirement annuity for
membership service and prior service shall be computed as
stated in paragraph (a) for all service credit established as a
noncovered employee; for service credit established as a
covered employee it shall be 1.67% of final average
compensation for each year of service.
(c) For a member retiring after attaining age 55 but before
age 60 with at least 30 but less than 35 years of creditable
service if retirement is before January 1, 2001, or with at
least 25 but less than 30 years of creditable service if
retirement is on or after January 1, 2001, the retirement

09800SB1544sam003 - 58 - LRB098 07988 JDS 43665 a
annuity shall be reduced by 1/2 of 1% for each month that the
member's age is under age 60 at the time of retirement. For
members to whom subsection (c) of Section 14-107 applies, the
references to age 55 and 60 in this subsection (c) are
increased as provided in subsection (c) of Section 14-107.
(d) A retirement annuity shall not exceed 75% of final
average compensation, subject to such extension as may result
from the application of Section 14-114 or Section 14-115.
(e) The retirement annuity payable to any covered employee
who is a member of the System and in service on January 1,
1969, or in service thereafter in 1969 as a result of
legislation enacted by the Illinois General Assembly
transferring the member to State employment from county
employment in a county Department of Public Aid in counties of
3,000,000 or more population, under a plan of coordination with
the Old Age, Survivors and Disability provisions thereof, if
not fully insured for Old Age Insurance payments under the
Federal Old Age, Survivors and Disability Insurance provisions
at the date of acceptance of a retirement annuity, shall not be
less than the amount for which the member would have been
eligible if coordination were not applicable.
(f) The retirement annuity payable to any covered employee
who is a member of the System and in service on January 1,
1969, or in service thereafter in 1969 as a result of the
legislation designated in the immediately preceding paragraph,
if fully insured for Old Age Insurance payments under the

09800SB1544sam003 - 59 - LRB098 07988 JDS 43665 a
Federal Social Security Act at the date of acceptance of a
retirement annuity, shall not be less than an amount which when
added to the Primary Insurance Benefit payable to the member
upon attainment of age 65 under such Federal Act, will equal
the annuity which would otherwise be payable if the coordinated
plan of coverage were not applicable.
(g) In the case of a member who is a noncovered employee,
the retirement annuity for membership service as a security
employee of the Department of Corrections or security employee
of the Department of Human Services shall be: if retirement
occurs on or after January 1, 2001, 3% of final average
compensation for each year of creditable service; or if
retirement occurs before January 1, 2001, 1.9% of final average
compensation for each of the first 10 years of service, 2.1%
for each of the next 10 years of service, 2.25% for each year
of service in excess of 20 but not exceeding 30, and 2.5% for
each year in excess of 30; except that the annuity may be
calculated under subsection (a) rather than this subsection (g)
if the resulting annuity is greater.
(h) In the case of a member who is a covered employee, the
retirement annuity for membership service as a security
employee of the Department of Corrections or security employee
of the Department of Human Services shall be: if retirement
occurs on or after January 1, 2001, 2.5% of final average
compensation for each year of creditable service; if retirement
occurs before January 1, 2001, 1.67% of final average

09800SB1544sam003 - 60 - LRB098 07988 JDS 43665 a
compensation for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30.
(i) For the purposes of this Section and Section 14-133 of
this Act, the term "security employee of the Department of
Corrections" and the term "security employee of the Department
of Human Services" shall have the meanings ascribed to them in
subsection (c) of Section 14-110.
(j) The retirement annuity computed pursuant to paragraphs
(g) or (h) shall be applicable only to those security employees
of the Department of Corrections and security employees of the
Department of Human Services who have at least 20 years of
membership service and who are not eligible for the alternative
retirement annuity provided under Section 14-110. However,
persons transferring to this System under Section 14-108.2 or
14-108.2c who have service credit under Article 16 of this Code
may count such service toward establishing their eligibility
under the 20-year service requirement of this subsection; but
such service may be used only for establishing such
eligibility, and not for the purpose of increasing or
calculating any benefit.
(k) (Blank).
(l) The changes to this Section made by this amendatory Act
of 1997 (changing certain retirement annuity formulas from a
stepped rate to a flat rate) apply to members who retire on or

09800SB1544sam003 - 61 - LRB098 07988 JDS 43665 a
after January 1, 1998, without regard to whether employment
terminated before the effective date of this amendatory Act of
1997. An annuity shall not be calculated in steps by using the
new flat rate for some steps and the superseded stepped rate
for other steps of the same type of service.
(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01.)
(40 ILCS 5/14-110) (from Ch. 108 1/2, par. 14-110)
Sec. 14-110. Alternative retirement annuity.
(a) Any member who has withdrawn from service with not less
than 20 years of eligible creditable service and has attained
age 55, and any member who has withdrawn from service with not
less than 25 years of eligible creditable service and has
attained age 50, regardless of whether the attainment of either
of the specified ages occurs while the member is still in
service, shall be entitled to receive at the option of the
member, in lieu of the regular or minimum retirement annuity, a
retirement annuity computed as follows:
(i) for periods of service as a noncovered employee: if
retirement occurs on or after January 1, 2001, 3% of final
average compensation for each year of creditable service;
if retirement occurs before January 1, 2001, 2 1/4% of
final average compensation for each of the first 10 years
of creditable service, 2 1/2% for each year above 10 years
to and including 20 years of creditable service, and 2 3/4%
for each year of creditable service above 20 years; and

09800SB1544sam003 - 62 - LRB098 07988 JDS 43665 a
(ii) for periods of eligible creditable service as a
covered employee: if retirement occurs on or after January
1, 2001, 2.5% of final average compensation for each year
of creditable service; if retirement occurs before January
1, 2001, 1.67% of final average compensation for each of
the first 10 years of such service, 1.90% for each of the
next 10 years of such service, 2.10% for each year of such
service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30.
Such annuity shall be subject to a maximum of 75% of final
average compensation if retirement occurs before January 1,
2001 or to a maximum of 80% of final average compensation if
retirement occurs on or after January 1, 2001.
These rates shall not be applicable to any service
performed by a member as a covered employee which is not
eligible creditable service. Service as a covered employee
which is not eligible creditable service shall be subject to
the rates and provisions of Section 14-108.
(a-5) Notwithstanding subsection (a) of this Section, for a
Tier I member who begins receiving a retirement annuity under
this Section after July 1, 2013:
(1) If the Tier I member is at least 45 years old on
the effective date of this amendatory Act of the 98th
General Assembly, then the references to age 50 and 55 in
subsection (a) of this Section remain unchanged.
(2) If the Tier I member is at least 40 but less than

09800SB1544sam003 - 63 - LRB098 07988 JDS 43665 a
45 years old on the effective date of this amendatory Act
of the 98th General Assembly, then the references to age 50
and 55 in subsection (a) of this Section are increased by
one year.
(3) If the Tier I member is at least 35 but less than
40 years old on the effective date of this amendatory Act
of the 98th General Assembly, then the references to age 50
and 55 in subsection (a) of this Section are increased by 3
years.
(4) If the Tier I member is less than 35 years old on
the effective date of this amendatory Act of the 98th
General Assembly, then the references to age 50 and 55 in
subsection (a) of this Section are increased by 5 years.
Notwithstanding Section 1-103.1, this subsection (a-5)
applies without regard to whether or not the Tier I member is
in active service under this Article on or after the effective
date of this amendatory Act of the 98th General Assembly.
(b) For the purpose of this Section, "eligible creditable
service" means creditable service resulting from service in one
or more of the following positions:
(1) State policeman;
(2) fire fighter in the fire protection service of a
department;
(3) air pilot;
(4) special agent;
(5) investigator for the Secretary of State;

09800SB1544sam003 - 64 - LRB098 07988 JDS 43665 a
(6) conservation police officer;
(7) investigator for the Department of Revenue or the
Illinois Gaming Board;
(8) security employee of the Department of Human
Services;
(9) Central Management Services security police
officer;
(10) security employee of the Department of
Corrections or the Department of Juvenile Justice;
(11) dangerous drugs investigator;
(12) investigator for the Department of State Police;
(13) investigator for the Office of the Attorney
General;
(14) controlled substance inspector;
(15) investigator for the Office of the State's
Attorneys Appellate Prosecutor;
(16) Commerce Commission police officer;
(17) arson investigator;
(18) State highway maintenance worker.
A person employed in one of the positions specified in this
subsection is entitled to eligible creditable service for
service credit earned under this Article while undergoing the
basic police training course approved by the Illinois Law
Enforcement Training Standards Board, if completion of that
training is required of persons serving in that position. For
the purposes of this Code, service during the required basic

09800SB1544sam003 - 65 - LRB098 07988 JDS 43665 a
police training course shall be deemed performance of the
duties of the specified position, even though the person is not
a sworn peace officer at the time of the training.
(c) For the purposes of this Section:
(1) The term "state policeman" includes any title or
position in the Department of State Police that is held by
an individual employed under the State Police Act.
(2) The term "fire fighter in the fire protection
service of a department" includes all officers in such fire
protection service including fire chiefs and assistant
fire chiefs.
(3) The term "air pilot" includes any employee whose
official job description on file in the Department of
Central Management Services, or in the department by which
he is employed if that department is not covered by the
Personnel Code, states that his principal duty is the
operation of aircraft, and who possesses a pilot's license;
however, the change in this definition made by this
amendatory Act of 1983 shall not operate to exclude any
noncovered employee who was an "air pilot" for the purposes
of this Section on January 1, 1984.
(4) The term "special agent" means any person who by
reason of employment by the Division of Narcotic Control,
the Bureau of Investigation or, after July 1, 1977, the
Division of Criminal Investigation, the Division of
Internal Investigation, the Division of Operations, or any

09800SB1544sam003 - 66 - LRB098 07988 JDS 43665 a
other Division or organizational entity in the Department
of State Police is vested by law with duties to maintain
public order, investigate violations of the criminal law of
this State, enforce the laws of this State, make arrests
and recover property. The term "special agent" includes any
title or position in the Department of State Police that is
held by an individual employed under the State Police Act.
(5) The term "investigator for the Secretary of State"
means any person employed by the Office of the Secretary of
State and vested with such investigative duties as render
him ineligible for coverage under the Social Security Act
by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
218(l)(1) of that Act.
A person who became employed as an investigator for the
Secretary of State between January 1, 1967 and December 31,
1975, and who has served as such until attainment of age
60, either continuously or with a single break in service
of not more than 3 years duration, which break terminated
before January 1, 1976, shall be entitled to have his
retirement annuity calculated in accordance with
subsection (a), notwithstanding that he has less than 20
years of credit for such service.
(6) The term "Conservation Police Officer" means any
person employed by the Division of Law Enforcement of the
Department of Natural Resources and vested with such law
enforcement duties as render him ineligible for coverage

09800SB1544sam003 - 67 - LRB098 07988 JDS 43665 a
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The
term "Conservation Police Officer" includes the positions
of Chief Conservation Police Administrator and Assistant
Conservation Police Administrator.
(7) The term "investigator for the Department of
Revenue" means any person employed by the Department of
Revenue and vested with such investigative duties as render
him ineligible for coverage under the Social Security Act
by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
218(l)(1) of that Act.
The term "investigator for the Illinois Gaming Board"
means any person employed as such by the Illinois Gaming
Board and vested with such peace officer duties as render
the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D), and 218(l)(1) of that Act.
(8) The term "security employee of the Department of
Human Services" means any person employed by the Department
of Human Services who (i) is employed at the Chester Mental
Health Center and has daily contact with the residents
thereof, (ii) is employed within a security unit at a
facility operated by the Department and has daily contact
with the residents of the security unit, (iii) is employed
at a facility operated by the Department that includes a
security unit and is regularly scheduled to work at least

09800SB1544sam003 - 68 - LRB098 07988 JDS 43665 a
50% of his or her working hours within that security unit,
or (iv) is a mental health police officer. "Mental health
police officer" means any person employed by the Department
of Human Services in a position pertaining to the
Department's mental health and developmental disabilities
functions who is vested with such law enforcement duties as
render the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
means that portion of a facility that is devoted to the
care, containment, and treatment of persons committed to
the Department of Human Services as sexually violent
persons, persons unfit to stand trial, or persons not
guilty by reason of insanity. With respect to past
employment, references to the Department of Human Services
include its predecessor, the Department of Mental Health
and Developmental Disabilities.
The changes made to this subdivision (c)(8) by Public
Act 92-14 apply to persons who retire on or after January
1, 2001, notwithstanding Section 1-103.1.
(9) "Central Management Services security police
officer" means any person employed by the Department of
Central Management Services who is vested with such law
enforcement duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.

09800SB1544sam003 - 69 - LRB098 07988 JDS 43665 a
(10) For a member who first became an employee under
this Article before July 1, 2005, the term "security
employee of the Department of Corrections or the Department
of Juvenile Justice" means any employee of the Department
of Corrections or the Department of Juvenile Justice or the
former Department of Personnel, and any member or employee
of the Prisoner Review Board, who has daily contact with
inmates or youth by working within a correctional facility
or Juvenile facility operated by the Department of Juvenile
Justice or who is a parole officer or an employee who has
direct contact with committed persons in the performance of
his or her job duties. For a member who first becomes an
employee under this Article on or after July 1, 2005, the
term means an employee of the Department of Corrections or
the Department of Juvenile Justice who is any of the
following: (i) officially headquartered at a correctional
facility or Juvenile facility operated by the Department of
Juvenile Justice, (ii) a parole officer, (iii) a member of
the apprehension unit, (iv) a member of the intelligence
unit, (v) a member of the sort team, or (vi) an
investigator.
(11) The term "dangerous drugs investigator" means any
person who is employed as such by the Department of Human
Services.
(12) The term "investigator for the Department of State
Police" means a person employed by the Department of State

09800SB1544sam003 - 70 - LRB098 07988 JDS 43665 a
Police who is vested under Section 4 of the Narcotic
Control Division Abolition Act with such law enforcement
powers as render him ineligible for coverage under the
Social Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act.
(13) "Investigator for the Office of the Attorney
General" means any person who is employed as such by the
Office of the Attorney General and is vested with such
investigative duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
the period before January 1, 1989, the term includes all
persons who were employed as investigators by the Office of
the Attorney General, without regard to social security
status.
(14) "Controlled substance inspector" means any person
who is employed as such by the Department of Professional
Regulation and is vested with such law enforcement duties
as render him ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act. The term
"controlled substance inspector" includes the Program
Executive of Enforcement and the Assistant Program
Executive of Enforcement.
(15) The term "investigator for the Office of the
State's Attorneys Appellate Prosecutor" means a person

09800SB1544sam003 - 71 - LRB098 07988 JDS 43665 a
employed in that capacity on a full time basis under the
authority of Section 7.06 of the State's Attorneys
Appellate Prosecutor's Act.
(16) "Commerce Commission police officer" means any
person employed by the Illinois Commerce Commission who is
vested with such law enforcement duties as render him
ineligible for coverage under the Social Security Act by
reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
218(l)(1) of that Act.
(17) "Arson investigator" means any person who is
employed as such by the Office of the State Fire Marshal
and is vested with such law enforcement duties as render
the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D), and 218(l)(1) of that Act. A person who was
employed as an arson investigator on January 1, 1995 and is
no longer in service but not yet receiving a retirement
annuity may convert his or her creditable service for
employment as an arson investigator into eligible
creditable service by paying to the System the difference
between the employee contributions actually paid for that
service and the amounts that would have been contributed if
the applicant were contributing at the rate applicable to
persons with the same social security status earning
eligible creditable service on the date of application.
(18) The term "State highway maintenance worker" means

09800SB1544sam003 - 72 - LRB098 07988 JDS 43665 a
a person who is either of the following:
(i) A person employed on a full-time basis by the
Illinois Department of Transportation in the position
of highway maintainer, highway maintenance lead
worker, highway maintenance lead/lead worker, heavy
construction equipment operator, power shovel
operator, or bridge mechanic; and whose principal
responsibility is to perform, on the roadway, the
actual maintenance necessary to keep the highways that
form a part of the State highway system in serviceable
condition for vehicular traffic.
(ii) A person employed on a full-time basis by the
Illinois State Toll Highway Authority in the position
of equipment operator/laborer H-4, equipment
operator/laborer H-6, welder H-4, welder H-6,
mechanical/electrical H-4, mechanical/electrical H-6,
water/sewer H-4, water/sewer H-6, sign maker/hanger
H-4, sign maker/hanger H-6, roadway lighting H-4,
roadway lighting H-6, structural H-4, structural H-6,
painter H-4, or painter H-6; and whose principal
responsibility is to perform, on the roadway, the
actual maintenance necessary to keep the Authority's
tollways in serviceable condition for vehicular
traffic.
(d) A security employee of the Department of Corrections or
the Department of Juvenile Justice, and a security employee of

09800SB1544sam003 - 73 - LRB098 07988 JDS 43665 a
the Department of Human Services who is not a mental health
police officer, shall not be eligible for the alternative
retirement annuity provided by this Section unless he or she
meets the following minimum age and service requirements at the
time of retirement:
(i) 25 years of eligible creditable service and age 55;
or
(ii) beginning January 1, 1987, 25 years of eligible
creditable service and age 54, or 24 years of eligible
creditable service and age 55; or
(iii) beginning January 1, 1988, 25 years of eligible
creditable service and age 53, or 23 years of eligible
creditable service and age 55; or
(iv) beginning January 1, 1989, 25 years of eligible
creditable service and age 52, or 22 years of eligible
creditable service and age 55; or
(v) beginning January 1, 1990, 25 years of eligible
creditable service and age 51, or 21 years of eligible
creditable service and age 55; or
(vi) beginning January 1, 1991, 25 years of eligible
creditable service and age 50, or 20 years of eligible
creditable service and age 55.
For members to whom subsection (a-5) of this Section
applies, the references to age 50 and 55 in item (vi) of this
subsection are increased as provided in subsection (a-5).
Persons who have service credit under Article 16 of this

09800SB1544sam003 - 74 - LRB098 07988 JDS 43665 a
Code for service as a security employee of the Department of
Corrections or the Department of Juvenile Justice, or the
Department of Human Services in a position requiring
certification as a teacher may count such service toward
establishing their eligibility under the service requirements
of this Section; but such service may be used only for
establishing such eligibility, and not for the purpose of
increasing or calculating any benefit.
(e) If a member enters military service while working in a
position in which eligible creditable service may be earned,
and returns to State service in the same or another such
position, and fulfills in all other respects the conditions
prescribed in this Article for credit for military service,
such military service shall be credited as eligible creditable
service for the purposes of the retirement annuity prescribed
in this Section.
(f) For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before October 1, 1975 as a covered employee in the
position of special agent, conservation police officer, mental
health police officer, or investigator for the Secretary of
State, shall be deemed to have been service as a noncovered
employee, provided that the employee pays to the System prior
to retirement an amount equal to (1) the difference between the
employee contributions that would have been required for such
service as a noncovered employee, and the amount of employee

09800SB1544sam003 - 75 - LRB098 07988 JDS 43665 a
contributions actually paid, plus (2) if payment is made after
July 31, 1987, regular interest on the amount specified in item
(1) from the date of service to the date of payment.
For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before January 1, 1982 as a covered employee in the
position of investigator for the Department of Revenue shall be
deemed to have been service as a noncovered employee, provided
that the employee pays to the System prior to retirement an
amount equal to (1) the difference between the employee
contributions that would have been required for such service as
a noncovered employee, and the amount of employee contributions
actually paid, plus (2) if payment is made after January 1,
1990, regular interest on the amount specified in item (1) from
the date of service to the date of payment.
(g) A State policeman may elect, not later than January 1,
1990, to establish eligible creditable service for up to 10
years of his service as a policeman under Article 3, by filing
a written election with the Board, accompanied by payment of an
amount to be determined by the Board, equal to (i) the
difference between the amount of employee and employer
contributions transferred to the System under Section 3-110.5,
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the

09800SB1544sam003 - 76 - LRB098 07988 JDS 43665 a
date of payment.
Subject to the limitation in subsection (i), a State
policeman may elect, not later than July 1, 1993, to establish
eligible creditable service for up to 10 years of his service
as a member of the County Police Department under Article 9, by
filing a written election with the Board, accompanied by
payment of an amount to be determined by the Board, equal to
(i) the difference between the amount of employee and employer
contributions transferred to the System under Section 9-121.10
and the amounts that would have been contributed had those
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
(h) Subject to the limitation in subsection (i), a State
policeman or investigator for the Secretary of State may elect
to establish eligible creditable service for up to 12 years of
his service as a policeman under Article 5, by filing a written
election with the Board on or before January 31, 1992, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 5-236, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from

09800SB1544sam003 - 77 - LRB098 07988 JDS 43665 a
the date of service to the date of payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 10 years of service as a sheriff's
law enforcement employee under Article 7, by filing a written
election with the Board on or before January 31, 1993, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 7-139.7, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 5 years of service as a police
officer under Article 3, a policeman under Article 5, a
sheriff's law enforcement employee under Article 7, a member of
the county police department under Article 9, or a police
officer under Article 15 by filing a written election with the
Board and paying to the System an amount to be determined by
the Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System

09800SB1544sam003 - 78 - LRB098 07988 JDS 43665 a
under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
Subject to the limitation in subsection (i), an
investigator for the Office of the Attorney General, or an
investigator for the Department of Revenue, may elect to
establish eligible creditable service for up to 5 years of
service as a police officer under Article 3, a policeman under
Article 5, a sheriff's law enforcement employee under Article
7, or a member of the county police department under Article 9
by filing a written election with the Board within 6 months
after August 25, 2009 (the effective date of Public Act 96-745)
and paying to the System an amount to be determined by the
Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
amounts that would have been contributed had such contributions
been made at the rates applicable to State policemen, plus (ii)
interest thereon at the actuarially assumed rate for each year,
compounded annually, from the date of service to the date of
payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, investigator for the

09800SB1544sam003 - 79 - LRB098 07988 JDS 43665 a
Office of the Attorney General, an investigator for the
Department of Revenue, or investigator for the Secretary of
State may elect to establish eligible creditable service for up
to 5 years of service as a person employed by a participating
municipality to perform police duties, or law enforcement
officer employed on a full-time basis by a forest preserve
district under Article 7, a county corrections officer, or a
court services officer under Article 9, by filing a written
election with the Board within 6 months after August 25, 2009
(the effective date of Public Act 96-745) and paying to the
System an amount to be determined by the Board, equal to (i)
the difference between the amount of employee and employer
contributions transferred to the System under Sections 7-139.8
and 9-121.10 and the amounts that would have been contributed
had such contributions been made at the rates applicable to
State policemen, plus (ii) interest thereon at the actuarially
assumed rate for each year, compounded annually, from the date
of service to the date of payment.
(i) The total amount of eligible creditable service
established by any person under subsections (g), (h), (j), (k),
and (l) of this Section shall not exceed 12 years.
(j) Subject to the limitation in subsection (i), an
investigator for the Office of the State's Attorneys Appellate
Prosecutor or a controlled substance inspector may elect to
establish eligible creditable service for up to 10 years of his
service as a policeman under Article 3 or a sheriff's law

09800SB1544sam003 - 80 - LRB098 07988 JDS 43665 a
enforcement employee under Article 7, by filing a written
election with the Board, accompanied by payment of an amount to
be determined by the Board, equal to (1) the difference between
the amount of employee and employer contributions transferred
to the System under Section 3-110.6 or 7-139.8, and the amounts
that would have been contributed had such contributions been
made at the rates applicable to State policemen, plus (2)
interest thereon at the effective rate for each year,
compounded annually, from the date of service to the date of
payment.
(k) Subject to the limitation in subsection (i) of this
Section, an alternative formula employee may elect to establish
eligible creditable service for periods spent as a full-time
law enforcement officer or full-time corrections officer
employed by the federal government or by a state or local
government located outside of Illinois, for which credit is not
held in any other public employee pension fund or retirement
system. To obtain this credit, the applicant must file a
written application with the Board by March 31, 1998,
accompanied by evidence of eligibility acceptable to the Board
and payment of an amount to be determined by the Board, equal
to (1) employee contributions for the credit being established,
based upon the applicant's salary on the first day as an
alternative formula employee after the employment for which
credit is being established and the rates then applicable to
alternative formula employees, plus (2) an amount determined by

09800SB1544sam003 - 81 - LRB098 07988 JDS 43665 a
the Board to be the employer's normal cost of the benefits
accrued for the credit being established, plus (3) regular
interest on the amounts in items (1) and (2) from the first day
as an alternative formula employee after the employment for
which credit is being established to the date of payment.
(l) Subject to the limitation in subsection (i), a security
employee of the Department of Corrections may elect, not later
than July 1, 1998, to establish eligible creditable service for
up to 10 years of his or her service as a policeman under
Article 3, by filing a written election with the Board,
accompanied by payment of an amount to be determined by the
Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.5, and the amounts that would have been
contributed had such contributions been made at the rates
applicable to security employees of the Department of
Corrections, plus (ii) interest thereon at the effective rate
for each year, compounded annually, from the date of service to
the date of payment.
(m) The amendatory changes to this Section made by this
amendatory Act of the 94th General Assembly apply only to: (1)
security employees of the Department of Juvenile Justice
employed by the Department of Corrections before the effective
date of this amendatory Act of the 94th General Assembly and
transferred to the Department of Juvenile Justice by this
amendatory Act of the 94th General Assembly; and (2) persons

09800SB1544sam003 - 82 - LRB098 07988 JDS 43665 a
employed by the Department of Juvenile Justice on or after the
effective date of this amendatory Act of the 94th General
Assembly who are required by subsection (b) of Section 3-2.5-15
of the Unified Code of Corrections to have a bachelor's or
advanced degree from an accredited college or university with a
specialization in criminal justice, education, psychology,
social work, or a closely related social science or, in the
case of persons who provide vocational training, who are
required to have adequate knowledge in the skill for which they
are providing the vocational training.
(n) A person employed in a position under subsection (b) of
this Section who has purchased service credit under subsection
(j) of Section 14-104 or subsection (b) of Section 14-105 in
any other capacity under this Article may convert up to 5 years
of that service credit into service credit covered under this
Section by paying to the Fund an amount equal to (1) the
additional employee contribution required under Section
14-133, plus (2) the additional employer contribution required
under Section 14-131, plus (3) interest on items (1) and (2) at
the actuarially assumed rate from the date of the service to
the date of payment.
(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09;
96-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff.
7-2-10.)
(40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)

09800SB1544sam003 - 83 - LRB098 07988 JDS 43665 a
Sec. 14-114. Automatic increase in retirement annuity.
(a) Except as provided in subsections (a-1), (a-2), and
(a-3) of this Section, any Any person receiving a retirement
annuity under this Article who retires having attained age 60,
or who retires before age 60 having at least 35 years of
creditable service, or who retires on or after January 1, 2001
at an age which, when added to the number of years of his or her
creditable service, equals at least 85, shall, on January 1
next following the first full year of retirement, have the
amount of the then fixed and payable monthly retirement annuity
increased 3%. Any person receiving a retirement annuity under
this Article who retires before attainment of age 60 and with
less than (i) 35 years of creditable service if retirement is
before January 1, 2001, or (ii) the number of years of
creditable service which, when added to the member's age, would
equal 85, if retirement is on or after January 1, 2001, shall
have the amount of the fixed and payable retirement annuity
increased by 3% on the January 1 occurring on or next following
(1) attainment of age 60, or (2) the first anniversary of
retirement, whichever occurs later. However, for persons who
receive the alternative retirement annuity under Section
14-110, references in this subsection (a) to attainment of age
60 shall be deemed to refer to attainment of age 55. For a
person receiving early retirement incentives under Section
14-108.3 whose retirement annuity began after January 1, 1992
pursuant to an extension granted under subsection (e) of that

09800SB1544sam003 - 84 - LRB098 07988 JDS 43665 a
Section, the first anniversary of retirement shall be deemed to
be January 1, 1993. For a person who retires on or after June
28, 2001 and on or before October 1, 2001, and whose retirement
annuity is calculated, in whole or in part, under Section
14-110 or subsection (g) or (h) of Section 14-108, the first
anniversary of retirement shall be deemed to be January 1,
2002.
On each January 1 following the date of the initial
increase under this subsection, the employee's monthly
retirement annuity shall be increased by an additional 3%.
Beginning January 1, 1990 and except as provided in
subsections (a-1), (a-2), and (a-3) of this Section, all
automatic annual increases payable under this Section shall be
calculated as a percentage of the total annuity payable at the
time of the increase, including previous increases granted
under this Article.
(a-1) Notwithstanding any other provision of this Article,
except subsection (a-3) of this Section, for a Tier I retiree,
the amount of each automatic annual increase in retirement
annuity occurring on or after the effective date of this
amendatory Act of the 98th General Assembly shall be 3% of the
lesser of (1) the total annuity payable at the time of the
increase, including previous increases granted or (2) $800
($1,000 if the annuity is based primarily upon service as a
noncovered employee) multiplied by the number of years of
creditable service upon which the annuity is based.

09800SB1544sam003 - 85 - LRB098 07988 JDS 43665 a
(a-2) Notwithstanding any other provision of this Article,
except subsection (a-3) of this Section, for a Tier I retiree,
the monthly retirement annuity shall first be subject to annual
increases on the January 1 occurring on or next after the
attainment of age 67 or the January 1 occurring on or next
after the fifth anniversary of the annuity start date,
whichever occurs earlier. If on the effective date of this
amendatory Act of the 98th General Assembly a Tier I retiree
has already received an annual increase under this Section but
does not yet meet the new eligibility requirements of this
subsection, the annual increases already received shall
continue in force, but no additional annual increase shall be
granted until the Tier I retiree meets the new eligibility
requirements.
(a-3) If on the effective date of this amendatory Act of
the 98th General Assembly a Tier I retiree has already received
an annual increase under this Section but does not yet meet the
new eligibility requirements of this subsection, the annual
increases already received shall continue in force, but no
additional annual increase shall be granted until the Tier I
retiree meets the new eligibility requirements.
(a-4) Notwithstanding Section 1-103.1, subsections (a-1),
(a-2), and (a-3) of this Section apply without regard to
whether or not the Tier I retiree is in active service under
this Article on or after the effective date of this amendatory
Act of the 98th General Assembly.

09800SB1544sam003 - 86 - LRB098 07988 JDS 43665 a
(b) The provisions of subsection (a) of this Section shall
be applicable to an employee only if the employee makes the
additional contributions required after December 31, 1969 for
the purpose of the automatic increases for not less than the
equivalent of one full year. If an employee becomes an
annuitant before his additional contributions equal one full
year's contributions based on his salary at the date of
retirement, the employee may pay the necessary balance of the
contributions to the system, without interest, and be eligible
for the increasing annuity authorized by this Section.
(c) The provisions of subsection (a) of this Section shall
not be applicable to any annuitant who is on retirement on
December 31, 1969, and thereafter returns to State service,
unless the member has established at least one year of
additional creditable service following reentry into service.
(d) In addition to other increases which may be provided by
this Section, on January 1, 1981 any annuitant who was
receiving a retirement annuity on or before January 1, 1971
shall have his retirement annuity then being paid increased $1
per month for each year of creditable service. On January 1,
1982, any annuitant who began receiving a retirement annuity on
or before January 1, 1977, shall have his retirement annuity
then being paid increased $1 per month for each year of
creditable service.
On January 1, 1987, any annuitant who began receiving a
retirement annuity on or before January 1, 1977, shall have the

09800SB1544sam003 - 87 - LRB098 07988 JDS 43665 a
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(e) Every person who receives the alternative retirement
annuity under Section 14-110 and who is eligible to receive the
3% increase under subsection (a) on January 1, 1986, shall also
receive on that date a one-time increase in retirement annuity
equal to the difference between (1) his actual retirement
annuity on that date, including any increases received under
subsection (a), and (2) the amount of retirement annuity he
would have received on that date if the amendments to
subsection (a) made by Public Act 84-162 had been in effect
since the date of his retirement.
(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
92-651, eff. 7-11-02.)
(40 ILCS 5/14-131)
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 100% 90% funded basis in accordance with
actuarial recommendations by the end of State fiscal year 2044.
For the purposes of this Section and Section 14-135.08,

09800SB1544sam003 - 88 - LRB098 07988 JDS 43665 a
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
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.

09800SB1544sam003 - 89 - LRB098 07988 JDS 43665 a
(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.
(c-1) Notwithstanding subsection (c) of this Section, for
fiscal years 2010, 2012, and 2013 only, contributions by the
several departments are not required to be made for General
Revenue Funds payrolls processed by the Comptroller. Payrolls
paid by the several departments from all other State funds must
continue to be processed pursuant to subsection (c) of this
Section.
(c-2) For State fiscal years 2010, 2012, and 2013 only, on
or as soon as possible after the 15th day of each month, the
Board shall submit vouchers for payment of State contributions
to the System, in a total monthly amount of one-twelfth of the
fiscal year General Revenue Fund contribution as certified by

09800SB1544sam003 - 90 - LRB098 07988 JDS 43665 a
the System pursuant to Section 14-135.08 of the Illinois
Pension Code.
(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
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 2015 through 2044, 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
equal to the sum of (1) the State's portion of the projected
normal cost for that fiscal year, plus (2) an amount sufficient
to bring the total assets of the System up to 100% of the total
actuarial liabilities of the System by the end of State fiscal
year 2044. 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

09800SB1544sam003 - 91 - LRB098 07988 JDS 43665 a
fiscal year 2044 and shall be determined under the projected
unit credit actuarial cost method.
For State fiscal years 2012 through 2014 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
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

09800SB1544sam003 - 92 - LRB098 07988 JDS 43665 a
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, 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 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

09800SB1544sam003 - 93 - LRB098 07988 JDS 43665 a
bonds, if applicable.
Notwithstanding any other provision of this Article, the
total required State General Revenue Fund contribution for
State fiscal year 2011 is the amount recertified by the System
on or before April 1, 2011 pursuant to Section 14-135.08 and
shall be made from the proceeds of bonds sold in fiscal year
2011 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 2011, and (iii) any reduction in bond proceeds due to the
issuance of discounted bonds, if applicable.
Beginning in State fiscal year 2045, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 100% of the total
actuarial liabilities of the System.
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

09800SB1544sam003 - 94 - LRB098 07988 JDS 43665 a
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 100% 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 through State
fiscal year 2014, 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 in fiscal
year 2003 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

09800SB1544sam003 - 95 - LRB098 07988 JDS 43665 a
applicable portion of the State's total debt service payments
for fiscal year 2007 on the bonds issued in fiscal year 2003
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
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

09800SB1544sam003 - 96 - LRB098 07988 JDS 43665 a
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,
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.
(i) After the submission of all payments for eligible
employees from personal services line items paid from the
General Revenue Fund in fiscal year 2010 have been made, the
Comptroller shall provide to the System a certification of the
sum of all fiscal year 2010 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
96th General Assembly had not been enacted. Upon receipt of the

09800SB1544sam003 - 97 - LRB098 07988 JDS 43665 a
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 2010 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 2010 through payments under this Section. If the amount
due is more than the amount received, the difference shall be
termed the "Fiscal Year 2010 Shortfall" for purposes of this
Section, and the Fiscal Year 2010 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 2010
Overpayment" for purposes of this Section, and the Fiscal Year
2010 Overpayment shall be repaid by the System to the General
Revenue Fund as soon as practicable after the certification.
(j) After the submission of all payments for eligible
employees from personal services line items paid from the
General Revenue Fund in fiscal year 2011 have been made, the
Comptroller shall provide to the System a certification of the
sum of all fiscal year 2011 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
96th 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 2011 in order to meet the

09800SB1544sam003 - 98 - LRB098 07988 JDS 43665 a
State's obligation under this Section. The System shall compare
this amount due to the amount received by the System in fiscal
year 2011 through payments under this Section. If the amount
due is more than the amount received, the difference shall be
termed the "Fiscal Year 2011 Shortfall" for purposes of this
Section, and the Fiscal Year 2011 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 2011
Overpayment" for purposes of this Section, and the Fiscal Year
2011 Overpayment shall be repaid by the System to the General
Revenue Fund as soon as practicable after the certification.
(k) For fiscal years 2012 and 2013 only, after the
submission of all payments for eligible employees from personal
services line items paid from the General Revenue Fund in the
fiscal year have been made, the Comptroller shall provide to
the System a certification of the sum of all expenditures in
the fiscal year for personal services. 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 the fiscal year 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 for the
fiscal year. If the amount due is more than the amount
received, the difference shall be termed the "Prior Fiscal Year
Shortfall" for purposes of this Section, and the Prior Fiscal

09800SB1544sam003 - 99 - LRB098 07988 JDS 43665 a
Year 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 "Prior Fiscal Year Overpayment" for purposes of this
Section, and the Prior Fiscal Year Overpayment shall be repaid
by the System to the General Revenue Fund as soon as
practicable after the certification.
(Source: P.A. 96-43, eff. 7-15-09; 96-45, eff. 7-15-09;
96-1000, eff. 7-2-10; 96-1497, eff. 1-14-11; 96-1511, eff.
1-27-11; 96-1554, eff. 3-18-11; 97-72, eff. 7-1-11; 97-732,
eff. 6-30-12.)
(40 ILCS 5/14-132) (from Ch. 108 1/2, par. 14-132)
Sec. 14-132. Obligations of State; funding guarantee.
(a) The payment of the required department contributions,
all allowances, annuities, benefits granted under this
Article, and all expenses of administration of the system are
obligations of the State of Illinois to the extent specified in
this Article.
(b) All income of the system shall be credited to a
separate account for this system in the State treasury and
shall be used to pay allowances, annuities, benefits and
administration expense.
(c) Beginning July 1, 2013, the State shall be
contractually obligated to contribute to the System under
Section 14-131 in each State fiscal year an amount not less

09800SB1544sam003 - 100 - LRB098 07988 JDS 43665 a
than the sum of (i) the State's normal cost for that year and
(ii) the portion of the unfunded accrued liability assigned to
that year by law in accordance with a schedule that distributes
payments equitably over a reasonable period of time and in
accordance with accepted actuarial practices. The obligations
created under this subsection (c) are contractual obligations
protected and enforceable under Article I, Section 16 and
Article XIII, Section 5 of the Illinois Constitution.
Notwithstanding any other provision of law, if the State
fails to pay in a State fiscal year the amount guaranteed under
this subsection, the System may bring a mandamus action in the
Circuit Court of Sangamon County to compel the State to make
that payment, irrespective of other remedies that may be
available to the System. It shall be the mandatory fiduciary
obligation of the Board of the System to bring that action if
the State fails to pay in the fiscal year the amount guaranteed
under this subsection. Before commencing that action, the Board
shall submit a voucher for monthly contributions as required in
Section 14-131. If the State fails to pay a vouchered amount
within 90 days after receiving a voucher for that amount, then
the Board shall submit a written request to the Comptroller
seeking payment of that amount. A copy of the request shall be
filed with the Secretary of State, and the Secretary of State
shall provide copies of the request to the Governor and General
Assembly. No earlier than the 16th day after filing a request
with the Secretary, but no later than the 21st day after filing

09800SB1544sam003 - 101 - LRB098 07988 JDS 43665 a
that request, the Board may commence such an action in the
Circuit Court. If the Board fails to commence such action on or
before the 21st day after filing the request with the Secretary
of State, then any participant or annuitant may file a mandamus
action against the Board to compel the Board to commence its
mandamus action against the State. This Section constitutes an
express waiver of the State's sovereign immunity. In ordering
the State to make the required payment, the court may order a
reasonable payment schedule to enable the State to make the
required payment. The obligations and causes of action created
under this subsection shall be in addition to any other right
or remedy otherwise accorded by common law, or State or federal
law, and nothing in this subsection shall be construed to deny,
abrogate, impair, or waive any such common law or statutory
right or remedy.
Any payments required to be made by the State pursuant to
this subsection (c) are expressly subordinated to the payment
of the principal, interest, and premium, if any, on any bonded
debt obligation of the State or any other State-created entity,
either currently outstanding or to be issued, for which the
source of repayment or security thereon is derived directly or
indirectly from tax revenues collected by the State or any
other State-created entity. Payments on such bonded
obligations include any statutory fund transfers or other
prefunding mechanisms or formulas set forth, now or hereafter,
in State law or bond indentures, into debt service funds or

09800SB1544sam003 - 102 - LRB098 07988 JDS 43665 a
accounts of the State related to such bonded obligations,
consistent with the payment schedules associated with such
obligations.
(Source: P.A. 80-841.)
(40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
Sec. 14-133. Contributions on behalf of members.
(a) Each participating employee shall make contributions
to the System, based on the employee's compensation, as
follows:
(1) Covered employees, except as indicated below, 3.5%
for retirement annuity, and 0.5% for a widow or survivors
annuity;
(2) Noncovered employees, except as indicated below,
7% for retirement annuity and 1% for a widow or survivors
annuity;
(3) Noncovered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 1% for a widow or survivors annuity plus the
following amount for retirement annuity: 8.5% through
December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
in 2004 and thereafter;
(4) Covered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 0.5% for a widow or survivors annuity plus
the following amount for retirement annuity: 5% through

09800SB1544sam003 - 103 - LRB098 07988 JDS 43665 a
December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
and thereafter;
(5) Each security employee of the Department of
Corrections or of the Department of Human Services who is a
covered employee, 0.5% for a widow or survivors annuity
plus the following amount for retirement annuity: 5%
through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
in 2004 and thereafter;
(6) Each security employee of the Department of
Corrections or of the Department of Human Services who is
not a covered employee, 1% for a widow or survivors annuity
plus the following amount for retirement annuity: 8.5%
through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
11.5% in 2004 and thereafter.
(a-5) In addition to the contributions otherwise required
under this Article, each Tier I member shall also make the
following contributions for retirement annuity from each
payment of compensation:
(1) beginning July 1, 2013 and through June 30, 2014,
1% of compensation; and
(2) beginning on July 1, 2014, 2% of compensation.
(b) Contributions shall be in the form of a deduction from
compensation and shall be made notwithstanding that the
compensation paid in cash to the employee shall be reduced
thereby below the minimum prescribed by law or regulation. Each
member is deemed to consent and agree to the deductions from

09800SB1544sam003 - 104 - LRB098 07988 JDS 43665 a
compensation provided for in this Article, and shall receipt in
full for salary or compensation.
(Source: P.A. 92-14, eff. 6-28-01.)
(40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
Sec. 14-135.08. To certify required State contributions.
(a) To certify to the Governor and to each department, on
or before November 15 of each year through until November 15,
2011, the required rate for State contributions to the System
for the next State fiscal year, as determined under subsection
(b) of Section 14-131. The certification to the Governor under
this subsection (a) shall include a copy of the actuarial
recommendations upon which the rate is based and shall
specifically identify the System's projected State normal cost
for that fiscal year.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its

09800SB1544sam003 - 105 - LRB098 07988 JDS 43665 a
certification of the required State contributions.
On or before January 15, 2013 and each January 15
thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The certification shall include a
copy of the actuarial recommendations upon which it is based
and shall specifically identify the System's projected State
normal cost for that fiscal year. The Board's certification
must note any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
(b) The certifications under subsections (a) and (a-5)
shall include an additional amount necessary to pay all
principal of and interest on those general obligation bonds due
the next fiscal year authorized by Section 7.2(a) of the
General Obligation Bond Act and issued to provide the proceeds
deposited by the State with the System in July 2003,
representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act. For State
fiscal year 2005, the Board shall make a supplemental
certification of the additional amount necessary to pay all
principal of and interest on those general obligation bonds due
in State fiscal years 2004 and 2005 authorized by Section
7.2(a) of the General Obligation Bond Act and issued to provide

09800SB1544sam003 - 106 - LRB098 07988 JDS 43665 a
the proceeds deposited by the State with the System in July
2003, representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act, as soon as
practical after the effective date of this amendatory Act of
the 93rd General Assembly.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System and the required
rates for State contributions 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 and to each department the amount of
the required State contribution to the System and the required
rates for State contributions 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.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System for State fiscal
year 2011, applying the changes made by Public Act 96-889 to
the System's assets and liabilities as of June 30, 2009 as
though Public Act 96-889 was approved on that date.
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;

09800SB1544sam003 - 107 - LRB098 07988 JDS 43665 a
97-694, eff. 6-18-12.)
(40 ILCS 5/14-152.1)
Sec. 14-152.1. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article by Public Act 96-37 or by this
amendatory Act of the 98th 96th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and

09800SB1544sam003 - 108 - LRB098 07988 JDS 43665 a
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who

09800SB1544sam003 - 109 - LRB098 07988 JDS 43665 a
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 96-37, eff. 7-13-09.)
(40 ILCS 5/15-106) (from Ch. 108 1/2, par. 15-106)
Sec. 15-106. Employer. "Employer": The University of
Illinois, Southern Illinois University, Chicago State
University, Eastern Illinois University, Governors State
University, Illinois State University, Northeastern Illinois
University, Northern Illinois University, Western Illinois
University, the State Board of Higher Education, the Illinois
Mathematics and Science Academy, the University Civil Service
Merit Board, the Board of Trustees of the State Universities
Retirement System, the Illinois Community College Board,
community college boards, any association of community college
boards organized under Section 3-55 of the Public Community
College Act, the Board of Examiners established under the
Illinois Public Accounting Act, and, only during the period for
which employer contributions required under Section 15-155 are
paid, the following organizations: the alumni associations,
the foundations and the athletic associations which are
affiliated with the universities and colleges included in this
Section as employers. An individual that begins employment
after the effective date of this amendatory Act of the 98th
General Assembly with an entity not defined as an employer in

09800SB1544sam003 - 110 - LRB098 07988 JDS 43665 a
this Section shall not be deemed an employee for the purposes
of this Article with respect to that employment and shall not
be eligible to participate in the System with respect to that
employment; provided, however, that those individuals who are
employed by such an employer and already participants in the
System on the effective date of this amendatory Act of the 98th
General Assembly shall be entitled to remain participants in
the System for the duration of that employment and continue to
earn service credit.
Notwithstanding any provision of law to the contrary, an
individual who begins employment with any of the following
employers on or after the effective date of this amendatory Act
of the 98th General Assembly shall not be deemed an employee
and shall not be eligible to participate in the System with
respect to that employment: any association of community
college boards organized under Section 3-55 of the Public
Community College Act, the Association of Illinois
Middle-Grade Schools, the Illinois Association of School
Administrators, the Illinois Association for Supervision and
Curriculum Development, the Illinois Principals Association,
the Illinois Association of School Business Officials, or the
Illinois Special Olympics; provided, however, that those
individuals who are employed by the above listed employers and
already participants in the System on the effective date of
this amendatory Act of the 98th General Assembly shall be
entitled to remain participants in the System for the duration

09800SB1544sam003 - 111 - LRB098 07988 JDS 43665 a
of that employment and continue to earn service credit.
A department as defined in Section 14-103.04 is an employer
for any person appointed by the Governor under the Civil
Administrative Code of Illinois who is a participating employee
as defined in Section 15-109. The Department of Central
Management Services is an employer with respect to persons
employed by the State Board of Higher Education in positions
with the Illinois Century Network as of June 30, 2004 who
remain continuously employed after that date by the Department
of Central Management Services in positions with the Illinois
Century Network, the Bureau of Communication and Computer
Services, or, if applicable, any successor bureau.
The cities of Champaign and Urbana shall be considered
employers, but only during the period for which contributions
are required to be made under subsection (b-1) of Section
15-155 and only with respect to individuals described in
subsection (h) of Section 15-107.
(Source: P.A. 95-369, eff. 8-23-07; 95-728, eff. 7-1-08 - See
Sec. 999.)
(40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
Sec. 15-107. Employee.
(a) "Employee" means any member of the educational,
administrative, secretarial, clerical, mechanical, labor or
other staff of an employer whose employment is permanent and
continuous or who is employed in a position in which services

09800SB1544sam003 - 112 - LRB098 07988 JDS 43665 a
are expected to be rendered on a continuous basis for at least
4 months or one academic term, whichever is less, who (A)
receives payment for personal services on a warrant issued
pursuant to a payroll voucher certified by an employer and
drawn by the State Comptroller upon the State Treasurer or by
an employer upon trust, federal or other funds, or (B) is on a
leave of absence without pay. Employment which is irregular,
intermittent or temporary shall not be considered continuous
for purposes of this paragraph.
However, a person is not an "employee" if he or she:
(1) is a student enrolled in and regularly attending
classes in a college or university which is an employer,
and is employed on a temporary basis at less than full
time;
(2) is currently receiving a retirement annuity or a
disability retirement annuity under Section 15-153.2 from
this System;
(3) is on a military leave of absence;
(4) is eligible to participate in the Federal Civil
Service Retirement System and is currently making
contributions to that system based upon earnings paid by an
employer;
(5) is on leave of absence without pay for more than 60
days immediately following termination of disability
benefits under this Article;
(6) is hired after June 30, 1979 as a public service

09800SB1544sam003 - 113 - LRB098 07988 JDS 43665 a
employment program participant under the Federal
Comprehensive Employment and Training Act and receives
earnings in whole or in part from funds provided under that
Act; or
(7) is employed on or after July 1, 1991 to perform
services that are excluded by subdivision (a)(7)(f) or
(a)(19) of Section 210 of the federal Social Security Act
from the definition of employment given in that Section (42
U.S.C. 410).
(b) Any employer may, by filing a written notice with the
board, exclude from the definition of "employee" all persons
employed pursuant to a federally funded contract entered into
after July 1, 1982 with a federal military department in a
program providing training in military courses to federal
military personnel on a military site owned by the United
States Government, if this exclusion is not prohibited by the
federally funded contract or federal laws or rules governing
the administration of the contract.
(c) Any person appointed by the Governor under the Civil
Administrative Code of the State is an employee, if he or she
is a participant in this system on the effective date of the
appointment.
(d) A participant on lay-off status under civil service
rules is considered an employee for not more than 120 days from
the date of the lay-off.
(e) A participant is considered an employee during (1) the

09800SB1544sam003 - 114 - LRB098 07988 JDS 43665 a
first 60 days of disability leave, (2) the period, not to
exceed one year, in which his or her eligibility for disability
benefits is being considered by the board or reviewed by the
courts, and (3) the period he or she receives disability
benefits under the provisions of Section 15-152, workers'
compensation or occupational disease benefits, or disability
income under an insurance contract financed wholly or partially
by the employer.
(f) Absences without pay, other than formal leaves of
absence, of less than 30 calendar days, are not considered as
an interruption of a person's status as an employee. If such
absences during any period of 12 months exceed 30 work days,
the employee status of the person is considered as interrupted
as of the 31st work day.
(g) A staff member whose employment contract requires
services during an academic term is to be considered an
employee during the summer and other vacation periods, unless
he or she declines an employment contract for the succeeding
academic term or his or her employment status is otherwise
terminated, and he or she receives no earnings during these
periods.
(h) An individual who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department and who immediately after the
elimination of that fire department became employed by the fire

09800SB1544sam003 - 115 - LRB098 07988 JDS 43665 a
department of the City of Urbana or the City of Champaign shall
continue to be considered as an employee for purposes of this
Article for so long as the individual remains employed as a
firefighter by the City of Urbana or the City of Champaign. The
individual shall cease to be considered an employee under this
subsection (h) upon the first termination of the individual's
employment as a firefighter by the City of Urbana or the City
of Champaign.
(i) An individual who is employed on a full-time basis as
an officer or employee of a statewide teacher organization that
serves System participants or an officer of a national teacher
organization that serves System participants may participate
in the System and shall be deemed an employee, provided that
(1) the individual has previously earned creditable service
under this Article, (2) the individual files with the System an
irrevocable election to become a participant before the
effective date of this amendatory Act of the 97th General
Assembly, (3) the individual does not receive credit for that
employment under any other Article of this Code, and (4) the
individual first became a full-time employee of the teacher
organization and becomes a participant before the effective
date of this amendatory Act of the 97th General Assembly. An
employee under this subsection (i) is responsible for paying to
the System both (A) employee contributions based on the actual
compensation received for service with the teacher
organization and (B) employer contributions equal to the normal

09800SB1544sam003 - 116 - LRB098 07988 JDS 43665 a
costs (as defined in Section 15-155) resulting from that
service; all or any part of these contributions may be paid on
the employee's behalf or picked up for tax purposes (if
authorized under federal law) by the teacher organization.
A person who is an employee as defined in this subsection
(i) may establish service credit for similar employment prior
to becoming an employee under this subsection by paying to the
System for that employment the contributions specified in this
subsection, plus interest at the effective rate from the date
of service to the date of payment. However, credit shall not be
granted under this subsection for any such prior employment for
which the applicant received credit under any other provision
of this Code, or during which the applicant was on a leave of
absence under Section 15-113.2.
(j) A person employed by the State Board of Higher
Education in a position with the Illinois Century Network as of
June 30, 2004 shall be considered to be an employee for so long
as he or she remains continuously employed after that date by
the Department of Central Management Services in a position
with the Illinois Century Network, the Bureau of Communication
and Computer Services, or, if applicable, any successor bureau
and meets the requirements of subsection (a).
(k) In the case of doubt as to whether any person is an
employee within the meaning of this Section, the decision of
the Board shall be final.
(Source: P.A. 97-651, eff. 1-5-12.)

09800SB1544sam003 - 117 - LRB098 07988 JDS 43665 a
(40 ILCS 5/15-107.1 new)
Sec. 15-107.1. Tier I participant. "Tier I participant": A
participant under this Article, other than a participant in the
self-managed plan under Section 15-158.2, who first became a
member or participant before January 1, 2011 under any
reciprocal retirement system or pension fund established under
this Code other than a retirement system or pension fund
established under Article 2, 3, 4, 5, 6, or 18 of this Code.
(40 ILCS 5/15-107.2 new)
Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
Tier I participant who is receiving a retirement annuity.
A person does not become a Tier I retiree by virtue of
receiving a reversionary, survivors, beneficiary, or
disability annuity.
(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
Sec. 15-111. Earnings. "Earnings": An amount paid for
personal services equal to the sum of the basic compensation
plus extra compensation for summer teaching, overtime or other
extra service. For periods for which an employee receives
service credit under subsection (c) of Section 15-113.1 or
Section 15-113.2, earnings are equal to the basic compensation
on which contributions are paid by the employee during such
periods. Compensation for employment which is irregular,

09800SB1544sam003 - 118 - LRB098 07988 JDS 43665 a
intermittent and temporary shall not be considered earnings,
unless the participant is also receiving earnings from the
employer as an employee under Section 15-107.
With respect to transition pay paid by the University of
Illinois to a person who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department:
(1) "Earnings" includes transition pay paid to the
employee on or after the effective date of this amendatory
Act of the 91st General Assembly.
(2) "Earnings" includes transition pay paid to the
employee before the effective date of this amendatory Act
of the 91st General Assembly only if (i) employee
contributions under Section 15-157 have been withheld from
that transition pay or (ii) the employee pays to the System
before January 1, 2001 an amount representing employee
contributions under Section 15-157 on that transition pay.
Employee contributions under item (ii) may be paid in a
lump sum, by withholding from additional transition pay
accruing before January 1, 2001, or in any other manner
approved by the System. Upon payment of the employee
contributions on transition pay, the corresponding
employer contributions become an obligation of the State.
Notwithstanding any other provision of this Code, the
earnings of a Tier I participant for the purposes of this Code

09800SB1544sam003 - 119 - LRB098 07988 JDS 43665 a
shall not exceed, for periods of service on or after the
effective date of this amendatory Act of the 98th General
Assembly, the greater of (i) the annual contribution and
benefit base established for the applicable year by the
Commissioner of Social Security under the federal Social
Security Act or (ii) the annual earnings of the participant
during the 365 days immediately preceding that effective date;
except that this limitation does not apply to a participant's
earnings that are determined under an employment contract or
collective bargaining agreement that is in effect on the
effective date of this amendatory Act of the 98th General
Assembly and has not been amended or renewed after that date.
(Source: P.A. 91-887, eff. 7-6-00.)
(40 ILCS 5/15-113.2) (from Ch. 108 1/2, par. 15-113.2)
Sec. 15-113.2. Service for leaves of absence. "Service for
leaves of absence" includes those periods of leaves of absence
at less than 50% pay, except military leave and periods of
disability leave in excess of 60 days, for which the employee
pays the contributions required under Section 15-157 in
accordance with rules prescribed by the board based upon the
employee's basic compensation on the date the leave begins, or
in the case of leave for service with a teacher organization,
based upon the actual compensation received by the employee for
such service after January 26, 1988, if the employee so elects
within 30 days of that date or the date the leave for service

09800SB1544sam003 - 120 - LRB098 07988 JDS 43665 a
with a teacher organization begins, whichever is later;
provided that the employee (1) returns to employment covered by
this system at the expiration of the leave, or within 30 days
after the termination of a disability which occurs during the
leave and continues this employment at a percentage of time
equal to or greater than the percentage of time immediately
preceding the leave of absence for at least 8 consecutive
months or a period equal to the period of the leave, whichever
is less, or (2) is precluded from meeting the foregoing
conditions because of disability or death. If service credit is
denied because the employee fails to meet these conditions, the
contributions covering the leave of absence shall be refunded
without interest. The return to employment condition does not
apply if the leave of absence is for service with a teacher
organization.
Service credit provided under this Section shall not exceed
3 years in any period of 10 years, unless the employee is on
special leave granted by the employer for service with a
teacher organization. Commencing with the fourth year in any
period of 10 years, a participant on such special leave is also
required to pay employer contributions equal to the normal cost
as defined in Section 15-155, based upon the employee's basic
compensation on the date the leave begins, or based upon the
actual compensation received by the employee for service with a
teacher organization if the employee has so elected.
Notwithstanding any other provision of this Article, a

09800SB1544sam003 - 121 - LRB098 07988 JDS 43665 a
participant shall not be eligible to make contributions or
receive service credit for a leave of absence for service with
a teacher organization if that leave of absence for service
with a teacher organization begins on or after the effective
date of this amendatory Act of the 98th General Assembly.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
(40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
Sec. 15-135. Retirement annuities - Conditions.
(a) A participant who retires in one of the following
specified years with the specified amount of service is
entitled to a retirement annuity at any age under the
retirement program applicable to the participant:
35 years if retirement is in 1997 or before;
34 years if retirement is in 1998;
33 years if retirement is in 1999;
32 years if retirement is in 2000;
31 years if retirement is in 2001;
30 years if retirement is in 2002 or later.
A participant with 8 or more years of service after
September 1, 1941, is entitled to a retirement annuity on or
after attainment of age 55.
A participant with at least 5 but less than 8 years of
service after September 1, 1941, is entitled to a retirement
annuity on or after attainment of age 62.
A participant who has at least 25 years of service in this

09800SB1544sam003 - 122 - LRB098 07988 JDS 43665 a
system as a police officer or firefighter is entitled to a
retirement annuity on or after the attainment of age 50, if
Rule 4 of Section 15-136 is applicable to the participant.
(a-5) Notwithstanding subsection (a) of this Section, for a
Tier I participant who begins receiving a retirement annuity
under this Article after July 1, 2013:
(1) If the Tier I participant is at least 45 years old
on the effective date of this amendatory Act of the 98th
General Assembly, then the reference to retirement with 30
years of service as well as the references to age 50, 55,
and 62 in subsection (a) of this Section remain unchanged.
(2) If the Tier I participant is at least 40 but less
than 45 years old on the effective date of this amendatory
Act of the 98th General Assembly, then the reference to
retirement with 30 years of service as well as the
references to age 50, 55, and 62 in subsection (a) of this
Section shall be increased by one year.
(3) If the Tier I participant is at least 35 but less
than 40 years old on the effective date of this amendatory
Act of the 98th General Assembly, then the reference to
retirement with 30 years of service as well as the
references to age 50, 55, and 62 in subsection (a) of this
Section shall be increased by 3 years.
(4) If the Tier I participant is less than 35 years old
on the effective date of this amendatory Act of the 98th
General Assembly, then the reference to retirement with 30

09800SB1544sam003 - 123 - LRB098 07988 JDS 43665 a
years of service as well as the references to age 50, 55,
and 62 in subsection (a) of this Section shall be increased
by 5 years.
Notwithstanding Section 1-103.1, this subsection (a-5)
applies without regard to whether or not the Tier I participant
is in active service under this Article on or after the
effective date of this amendatory Act of the 98th General
Assembly.
(b) The annuity payment period shall begin on the date
specified by the participant or the recipient of a disability
retirement annuity submitting a written application, which
date shall not be prior to termination of employment or more
than one year before the application is received by the board;
however, if the participant is not an employee of an employer
participating in this System or in a participating system as
defined in Article 20 of this Code on April 1 of the calendar
year next following the calendar year in which the participant
attains age 70 1/2, the annuity payment period shall begin on
that date regardless of whether an application has been filed.
(c) An annuity is not payable if the amount provided under
Section 15-136 is less than $10 per month.
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are

09800SB1544sam003 - 124 - LRB098 07988 JDS 43665 a
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
Rule 1: The retirement annuity shall be 1.67% of final rate
of earnings for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.
Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the effective rate
of interest in effect at the time the retirement annuity
begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins;
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section

09800SB1544sam003 - 125 - LRB098 07988 JDS 43665 a
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.
For the purpose of calculating an annuity under this Rule
2, the contribution required under subsection (c-5) of Section
15-157 shall not be considered when determining the
participant's accumulated normal contributions under clause
(i) or the employer contribution under clause (ii).
With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
This amendatory Act of the 91st General Assembly is a

09800SB1544sam003 - 126 - LRB098 07988 JDS 43665 a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his
or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or
more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less

09800SB1544sam003 - 127 - LRB098 07988 JDS 43665 a
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity
for all other service shall be computed under Rule 1.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is an
employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of
the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee of
the University of Illinois in a position other than police
officer or firefighter, from the date of that transfer
until the employee's next termination of service with the
University of Illinois.
Rule 5: The retirement annuity of a participant who elected
early retirement under the provisions of Section 15-136.2 and
who, on or before February 16, 1995, brought administrative

09800SB1544sam003 - 128 - LRB098 07988 JDS 43665 a
proceedings pursuant to the administrative rules adopted by the
System to challenge the calculation of his or her retirement
annuity shall be the sum of the following, determined from
amounts credited to the participant in accordance with the
actuarial tables and the prescribed rate of interest in effect
at the time the retirement annuity begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins; and
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) an annuity which can be provided on an
actuarially equivalent basis from the employee
contribution for early retirement under Section 15-136.2,
and an annuity from employer contributions of an amount
equal to that which can be provided on an actuarially
equivalent basis from the employee contribution for early
retirement under Section 15-136.2.
In no event shall a retirement annuity under this Rule 5 be
lower than the amount obtained by adding (1) the monthly amount
obtained by dividing the combined employee and employer

09800SB1544sam003 - 129 - LRB098 07988 JDS 43665 a
contributions made under Section 15-136.2 by the System's
annuity factor for the age of the participant at the beginning
of the annuity payment period and (2) the amount equal to the
participant's annuity if calculated under Rule 1, reduced under
Section 15-136(b) as if no contributions had been made under
Section 15-136.2.
With respect to a participant who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except as
provided in clause (iii) of this Rule 5, neither an employee
nor employer contribution for early retirement under Section
15-136.2, nor any other employer contribution, shall be used in
the calculation of the amount of a retirement annuity under
this Rule 5.
The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General Assembly
in recognition that the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement

09800SB1544sam003 - 130 - LRB098 07988 JDS 43665 a
System et al. might be deemed to give some right to the
plaintiff in that case. The changes made by Section 25 of this
amendatory Act of the 91st General Assembly are a legislative
implementation of the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. with respect to that plaintiff.
The changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
(b) The retirement annuity provided under Rules 1 and 3
above shall be reduced by 1/2 of 1% for each month the
participant is under age 60 at the time of retirement. However,
this reduction shall not apply in the following cases:
(1) For a disabled participant whose disability
benefits have been discontinued because he or she has
exhausted eligibility for disability benefits under clause
(6) of Section 15-152;
(2) For a participant who has at least the number of
years of service required to retire at any age under
subsection (a) of Section 15-135; or
(3) For that portion of a retirement annuity which has
been provided on account of service of the participant
during periods when he or she performed the duties of a
police officer or firefighter, if these duties were
performed for at least 5 years immediately preceding the

09800SB1544sam003 - 131 - LRB098 07988 JDS 43665 a
date the retirement annuity is to begin.
(c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
(d) Subject to the provisions of subsections (d-1), (d-2),
and (d-3) of this Section, an An annuitant whose status as an
employee terminates after August 14, 1969 shall receive
automatic increases in his or her retirement annuity as
follows:
Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, Rule 4, or Rule 5, contained in this Section,
multiplied by the number of full months which elapsed from the
date the retirement annuity payments began to January 1, 1972,
plus 0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is

09800SB1544sam003 - 132 - LRB098 07988 JDS 43665 a
later, to the effective date of the increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during
the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
this Section. The change made under this subsection by P.A.
81-970 is effective January 1, 1980 and applies to each
annuitant whose status as an employee terminates before or
after that date.
Beginning January 1, 1990 and except as provided in
subsections (d-1), (d-2), and (d-3) of this Section, all
automatic annual increases payable under this Section shall be
calculated as a percentage of the total annuity payable at the
time of the increase, including all increases previously
granted under this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard to
whether status as an employee terminated before that date.
(d-1) Notwithstanding any other provision of this Article,
except subsection (d-3) of this Section, for a Tier I retiree,
the amount of each automatic annual increase in retirement
annuity occurring on or after the effective date of this
amendatory Act of the 98th General Assembly shall be 3% of the
lesser of (1) the total annuity payable at the time of the
increase, including previous increases granted or (2) $1,000
multiplied by the number of years of creditable service upon

09800SB1544sam003 - 133 - LRB098 07988 JDS 43665 a
which the annuity is based.
(d-2) Notwithstanding any other provision of this Article,
except subsection (d-3) of this Section, for a Tier I retiree,
the monthly retirement annuity shall first be subject to annual
increases on the January 1 occurring on or next after the
attainment of age 67 or the January 1 occurring on or next
after the fifth anniversary of the annuity start date,
whichever occurs earlier. If on the effective date of this
amendatory Act of the 98th General Assembly a Tier I retiree
has already received an annual increase under this Section but
does not yet meet the new eligibility requirements of this
subsection, the annual increases already received shall
continue in force, but no additional annual increase shall be
granted until the Tier I retiree meets the new eligibility
requirements.
(d-3) If on the effective date of this amendatory Act of
the 98th General Assembly a Tier I retiree has already received
an annual increase under this Section but does not yet meet the
new eligibility requirements of this subsection, the annual
increases already received shall continue in force, but no
additional annual increase shall be granted until the Tier I
retiree meets the new eligibility requirements.
(d-4) Notwithstanding Section 1-103.1, subsections (d-1)
and (d-2) apply without regard to whether or not the Tier I
retiree is in active service under this Article on or after the
effective date of this amendatory Act of the 98th General

09800SB1544sam003 - 134 - LRB098 07988 JDS 43665 a
Assembly.
(e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987, or
the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
(f) A participant is entitled to such additional annuity as
may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section and the contributions made under subsection (c-5) of
Section 15-157 by this amendatory Act of the 98th General
Assembly shall not be taken into account in determining the

09800SB1544sam003 - 135 - LRB098 07988 JDS 43665 a
amount of such additional annuity.
(g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in whole
or in part to an employer, and (2) a participant transfers
employment from such governmental unit to such employer within
6 months after the transfer of the function, and (3) the sum of
(A) the annuity payable to the participant under Rule 1, 2, or
3 of this Section (B) all proportional annuities payable to the
participant by all other retirement systems covered by Article
20, and (C) the initial primary insurance amount to which the
participant is entitled under the Social Security Act, is less
than the retirement annuity which would have been payable if
all of the participant's pension credits validated under
Section 20-109 had been validated under this system, a
supplemental annuity equal to the difference in such amounts
shall be payable to the participant.
(h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.
(i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the

09800SB1544sam003 - 136 - LRB098 07988 JDS 43665 a
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(j) For participants to whom subsection (a-5) of Section
15-135 applies, the references to age 50, 55, and 62 in this
Section are increased as provided in subsection (a-5) of
Section 15-135.
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
(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 100% 90% funded
basis in accordance with actuarial recommendations by the end
of State fiscal year 2044.
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
(a-1).
(a-1) For State fiscal years 2015 through 2044, the minimum
contribution to the System to be made by the State for each

09800SB1544sam003 - 137 - LRB098 07988 JDS 43665 a
fiscal year shall be an amount determined by the System to be
equal to the sum of (1) the State's portion of the projected
normal cost for that fiscal year, plus (2) an amount sufficient
to bring the total assets of the System up to 100% of the total
actuarial liabilities of the System by the end of State fiscal
year 2044. 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 2044 and shall be determined under the projected
unit credit actuarial cost method.
Beginning in State fiscal year 2045, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 100% of the total
actuarial liabilities of the System.
For State fiscal years 2012 through 2014 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

09800SB1544sam003 - 138 - LRB098 07988 JDS 43665 a
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, 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
$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.
Notwithstanding any other provision of this Article, the

09800SB1544sam003 - 139 - LRB098 07988 JDS 43665 a
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 15-165 and shall be made from the State
Pensions Fund and proceeds of bonds sold in fiscal year 2011
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 2011, 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 100% 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.

09800SB1544sam003 - 140 - LRB098 07988 JDS 43665 a
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 through State
fiscal year 2014, 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 in fiscal
year 2003 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 in fiscal year 2003
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.
(b) If an employee is paid from trust or federal funds, the

09800SB1544sam003 - 141 - LRB098 07988 JDS 43665 a
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
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

09800SB1544sam003 - 142 - LRB098 07988 JDS 43665 a
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
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

09800SB1544sam003 - 143 - LRB098 07988 JDS 43665 a
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.
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

09800SB1544sam003 - 144 - LRB098 07988 JDS 43665 a
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
(g) (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).
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,

09800SB1544sam003 - 145 - LRB098 07988 JDS 43665 a
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
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

09800SB1544sam003 - 146 - LRB098 07988 JDS 43665 a
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
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.

09800SB1544sam003 - 147 - LRB098 07988 JDS 43665 a
(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
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

09800SB1544sam003 - 148 - LRB098 07988 JDS 43665 a
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. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
7-13-12; revised 10-17-12.)
(40 ILCS 5/15-156) (from Ch. 108 1/2, par. 15-156)
Sec. 15-156. Obligations of State; funding guarantees.
(a) The payment of (1) the required State contributions,
(2) all benefits granted under this system and (3) all expenses
in connection with the administration and operation thereof are
obligations of the State of Illinois to the extent specified in
this Article. The accumulated employee normal, additional and
survivors insurance contributions credited to the accounts of
active and inactive participants shall not be used to pay the
State's share of the obligations.
(b) Beginning July 1, 2013, the State shall be
contractually obligated to contribute to the System under

09800SB1544sam003 - 149 - LRB098 07988 JDS 43665 a
Section 15-155 in each State fiscal year an amount not less
than the sum of (i) the State's normal cost for that year and
(ii) the portion of the unfunded accrued liability assigned to
that year by law in accordance with a schedule that distributes
payments equitably over a reasonable period of time and in
accordance with accepted actuarial practices. The obligations
created under this subsection (b) are contractual obligations
protected and enforceable under Article I, Section 16 and
Article XIII, Section 5 of the Illinois Constitution.
Notwithstanding any other provision of law, if the State
fails to pay in a State fiscal year the amount guaranteed under
this subsection, the System may bring a mandamus action in the
Circuit Court of Sangamon or Champaign County to compel the
State to make that payment, irrespective of other remedies that
may be available to the System. It shall be the mandatory
fiduciary obligation of the Board of the System to bring that
action if the State fails to pay in the fiscal year the amount
guaranteed under this subsection. Before commencing that
action, the Board shall submit a voucher for monthly
contributions as required in Section 15-155. If the State fails
to pay a vouchered amount within 90 days after receiving a
voucher for that amount, then the Board shall submit a written
request to the Comptroller seeking payment of that amount. A
copy of the request shall be filed with the Secretary of State,
and the Secretary of State shall provide copies of the request
to the Governor and General Assembly. No earlier than the 16th

09800SB1544sam003 - 150 - LRB098 07988 JDS 43665 a
day after filing a request with the Secretary, but no later
than the 21st day after filing that request, the Board may
commence such an action in the Circuit Court. If the Board
fails to commence such action on or before the 21st day after
filing the request with the Secretary of State, then any
participant or annuitant may file a mandamus action against the
Board to compel the Board to commence its mandamus action
against the State. This Section constitutes an express waiver
of the State's sovereign immunity. In ordering the State to
make the required payment, the court may order a reasonable
payment schedule to enable the State to make the required
payment. The obligations and causes of action created under
this subsection shall be in addition to any other right or
remedy otherwise accorded by common law, or State or federal
law, and nothing in this subsection shall be construed to deny,
abrogate, impair, or waive any such common law or statutory
right or remedy.
Any payments required to be made by the State pursuant to
this subsection (b) are expressly subordinated to the payment
of the principal, interest, and premium, if any, on any bonded
debt obligation of the State or any other State-created entity,
either currently outstanding or to be issued, for which the
source of repayment or security thereon is derived directly or
indirectly from tax revenues collected by the State or any
other State-created entity. Payments on such bonded
obligations include any statutory fund transfers or other

09800SB1544sam003 - 151 - LRB098 07988 JDS 43665 a
prefunding mechanisms or formulas set forth, now or hereafter,
in State law or bond indentures, into debt service funds or
accounts of the State related to such bonded obligations,
consistent with the payment schedules associated with such
obligations.
(Source: P.A. 83-1440.)
(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
Sec. 15-157. Employee Contributions.
(a) Each participating employee shall make contributions
towards the retirement benefits payable under the retirement
program applicable to the employee from each payment of
earnings applicable to employment under this system on and
after the date of becoming a participant as follows: Prior to
September 1, 1949, 3 1/2% of earnings; from September 1, 1949
to August 31, 1955, 5%; from September 1, 1955 to August 31,
1969, 6%; from September 1, 1969, 6 1/2%. These contributions
are to be considered as normal contributions for purposes of
this Article.
Each participant who is a police officer or firefighter
shall make normal contributions of 8% of each payment of
earnings applicable to employment as a police officer or
firefighter under this system on or after September 1, 1981,
unless he or she files with the board within 60 days after the
effective date of this amendatory Act of 1991 or 60 days after
the board receives notice that he or she is employed as a

09800SB1544sam003 - 152 - LRB098 07988 JDS 43665 a
police officer or firefighter, whichever is later, a written
notice waiving the retirement formula provided by Rule 4 of
Section 15-136. This waiver shall be irrevocable. If a
participant had met the conditions set forth in Section
15-132.1 prior to the effective date of this amendatory Act of
1991 but failed to make the additional normal contributions
required by this paragraph, he or she may elect to pay the
additional contributions plus compound interest at the
effective rate. If such payment is received by the board, the
service shall be considered as police officer service in
calculating the retirement annuity under Rule 4 of Section
15-136. While performing service described in clause (i) or
(ii) of Rule 4 of Section 15-136, a participating employee
shall be deemed to be employed as a firefighter for the purpose
of determining the rate of employee contributions under this
Section.
(b) Starting September 1, 1969, each participating
employee shall make additional contributions of 1/2 of 1% of
earnings to finance a portion of the cost of the annual
increases in retirement annuity provided under Section 15-136,
except that with respect to participants in the self-managed
plan this additional contribution shall be used to finance the
benefits obtained under that retirement program.
(c) In addition to the amounts described in subsections (a)
and (b) of this Section, each participating employee shall make
contributions of 1% of earnings applicable under this system on

09800SB1544sam003 - 153 - LRB098 07988 JDS 43665 a
and after August 1, 1959. The contributions made under this
subsection (c) shall be considered as survivor's insurance
contributions for purposes of this Article if the employee is
covered under the traditional benefit package, and such
contributions shall be considered as additional contributions
for purposes of this Article if the employee is participating
in the self-managed plan or has elected to participate in the
portable benefit package and has completed the applicable
one-year waiting period. Contributions in excess of $80 during
any fiscal year beginning before August 31, 1969 and in excess
of $120 during any fiscal year thereafter until September 1,
1971 shall be considered as additional contributions for
purposes of this Article.
(c-5) In addition to the contributions otherwise required
under this Article, each Tier I participant shall also make the
following contributions toward the retirement benefits payable
under the retirement program applicable to the employee from
each payment of earnings applicable to employment under this
system:
(1) beginning July 1, 2013 and through June 30, 2014,
1% of earnings; and
(2) beginning on July 1, 2014, 2% of earnings.
Except as otherwise specified, these contributions are to
be considered as normal contributions for purposes of this
Article.
(d) If the board by board rule so permits and subject to

09800SB1544sam003 - 154 - LRB098 07988 JDS 43665 a
such conditions and limitations as may be specified in its
rules, a participant may make other additional contributions of
such percentage of earnings or amounts as the participant shall
elect in a written notice thereof received by the board.
(e) That fraction of a participant's total accumulated
normal contributions, the numerator of which is equal to the
number of years of service in excess of that which is required
to qualify for the maximum retirement annuity, and the
denominator of which is equal to the total service of the
participant, shall be considered as accumulated additional
contributions. The determination of the applicable maximum
annuity and the adjustment in contributions required by this
provision shall be made as of the date of the participant's
retirement.
(f) Notwithstanding the foregoing, a participating
employee shall not be required to make contributions under this
Section after the date upon which continuance of such
contributions would otherwise cause his or her retirement
annuity to exceed the maximum retirement annuity as specified
in clause (1) of subsection (c) of Section 15-136.
(g) A participating employee may make contributions for the
purchase of service credit under this Article.
(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)

09800SB1544sam003 - 155 - LRB098 07988 JDS 43665 a
(40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
Sec. 15-165. To certify amounts and submit vouchers.
(a) The Board shall certify to the Governor on or before
November 15 of each year through until November 15, 2011 the
appropriation required from State funds for the purposes of
this System for the following fiscal year. The certification
under this subsection (a) shall include a copy of the actuarial
recommendations upon which it is based and shall specifically
identify the System's projected State normal cost for that
fiscal year and the projected State cost for the self-managed
plan for that fiscal year.
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.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets

09800SB1544sam003 - 156 - LRB098 07988 JDS 43665 a
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions.
On or before January 15, 2013 and each January 15
thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The certification shall include a
copy of the actuarial recommendations upon which it is based
and shall specifically identify the System's projected State
normal cost for that fiscal year and the projected State cost
for the self-managed plan for that fiscal year. The Board's
certification must note, in a written response to the State
Actuary, any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not

09800SB1544sam003 - 157 - LRB098 07988 JDS 43665 a
following the State Actuary's recommended changes on the
required State contribution.
(b) The Board shall certify to the State Comptroller or
employer, as the case may be, from time to time, by its
president and secretary, with its seal attached, the amounts
payable to the System from the various funds.
(c) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month 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). 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 (b) 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 Section, the difference

09800SB1544sam003 - 158 - LRB098 07988 JDS 43665 a
shall be paid from the General Revenue Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(d) So long as the payments received are the full amount
lawfully vouchered under this Section, payments received by the
System under this Section shall be applied first toward the
employer contribution to the self-managed plan established
under Section 15-158.2. Payments shall be applied second toward
the employer's portion of the normal costs of the System, as
defined in subsection (f) of Section 15-155. The balance shall
be applied toward the unfunded actuarial liabilities of the
System.
(e) In the event that the System does not receive, as a
result of legislative enactment or otherwise, payments
sufficient to fully fund the employer contribution to the
self-managed plan established under Section 15-158.2 and to
fully fund that portion of the employer's portion of the normal
costs of the System, as calculated in accordance with Section
15-155(a-1), then any payments received shall be applied
proportionately to the optional retirement program established
under Section 15-158.2 and to the employer's portion of the
normal costs of the System, as calculated in accordance with
Section 15-155(a-1).
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
97-694, eff. 6-18-12.)

09800SB1544sam003 - 159 - LRB098 07988 JDS 43665 a
(40 ILCS 5/15-198)
Sec. 15-198. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly. "New benefit
increase", however, does not include any benefit increase
resulting from the changes made to this Article by this
amendatory Act of the 98th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and

09800SB1544sam003 - 160 - LRB098 07988 JDS 43665 a
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new

09800SB1544sam003 - 161 - LRB098 07988 JDS 43665 a
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
Section A-25. The Illinois Educational Labor Relations Act
is amended by changing Sections 4 and 17 as follows:
(115 ILCS 5/4) (from Ch. 48, par. 1704)
Sec. 4. Employer rights. Employers shall not be required to
bargain over matters of inherent managerial policy, which shall
include such areas of discretion or policy as the functions of
the employer, standards of services, its overall budget, the
organizational structure and selection of new employees and
direction of employees. Employers, however, shall be required
to bargain collectively with regard to policy matters directly
affecting wages, hours and terms and conditions of employment
as well as the impact thereon upon request by employee
representatives, but excluding the changes, the impact of
changes, and the implementation of the changes set forth in
this amendatory Act of the 98th General Assembly. To preserve
the rights of employers and exclusive representatives which
have established collective bargaining relationships or
negotiated collective bargaining agreements prior to the
effective date of this Act, employers shall be required to
bargain collectively with regard to any matter concerning
wages, hours or conditions of employment about which they have
bargained for and agreed to in a collective bargaining

09800SB1544sam003 - 162 - LRB098 07988 JDS 43665 a
agreement prior to the effective date of this Act, but
excluding the changes, the impact of changes, and the
implementation of the changes set forth in this amendatory Act
of the 98th General Assembly.
(Source: P.A. 83-1014.)
(115 ILCS 5/17) (from Ch. 48, par. 1717)
Sec. 17. Effect on other laws. In case of any conflict
between the provisions of this Act and any other law (other
than the changes, the impact of changes, and the implementation
of the changes made to the Illinois Pension Code by this
amendatory Act of the 98th General Assembly), executive order
or administrative regulation, the provisions of this Act shall
prevail and control. The provisions of this Act are subject to
the changes made by this amendatory Act of the 98th General
Assembly. Nothing in this Act shall be construed to replace or
diminish the rights of employees established by Section 36d of
"An Act to create the State Universities Civil Service System",
approved May 11, 1905, as amended or modified.
(Source: P.A. 83-1014.)
Section A-90. The State Mandates Act is amended by adding
Section 8.37 as follows:
(30 ILCS 805/8.37 new)
Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8

09800SB1544sam003 - 163 - LRB098 07988 JDS 43665 a
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 98th General Assembly.
Section A-97. Severability and inseverability. The changes
made by this Part A to Acts other than the Illinois Pension
Code are severable from the other changes made by this Act. The
changes made by this Part A to an Article of the Illinois
Pension Code are severable from the changes made by this Part A
to another Article of the Illinois Pension Code. However, the
changes made by this Part A in an Article of the Illinois
Pension Code that relate to (i) automatic annual increases,
(ii) employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation are mutually dependent and
inseverable.
PART B
Section B-1. The Illinois Pension Code is amended by adding
Section 1-103.5 as follows:
(40 ILCS 5/1-103.5 new)
Sec. 1-103.5. Explanation of Senate Bill 1544.
(a) Part A of Senate Bill 1544 is intended by the General
Assembly as a stand-alone reform of certain Articles of this

09800SB1544sam003 - 164 - LRB098 07988 JDS 43665 a
Code, which takes effect upon becoming law. Part B of Senate
Bill 1544 contains alternative provisions that take effect only
if and when a corresponding portion of Part A is determined to
be unconstitutional or otherwise invalid or unenforceable.
(b) If one or more of the changes made in Part A to
portions of a specific Article of the Illinois Pension Code
that are designated as inseverable under Section 97 of Part A
are determined to be unconstitutional or otherwise invalid by a
final judgment of the Illinois Supreme Court or by a final
unappealable judgment of the Illinois Appellate Court or a
court of competent jurisdiction, then the invalid provisions of
Part A and the provisions of Part A that are inseverable from
those provisions shall be superseded by the Sections of Part B
that take effect due to that invalidity.
Section B-5. If and only if Section B-30, B-35, or B-40 of
this Part B takes effect, then the Illinois Public Labor
Relations Act is amended by changing Sections 4 and 15 as
follows:
(5 ILCS 315/4) (from Ch. 48, par. 1604)
Sec. 4. Management Rights. Employers shall not be required
to bargain over matters of inherent managerial policy, which
shall include such areas of discretion or policy as the
functions of the employer, standards of services, its overall
budget, the organizational structure and selection of new

09800SB1544sam003 - 165 - LRB098 07988 JDS 43665 a
employees, examination techniques and direction of employees.
Employers, however, shall be required to bargain collectively
with regard to policy matters directly affecting wages (but
subject to any applicable restrictions in Section 14-106.5 or
15-132.9 of the Illinois Pension Code), hours and terms and
conditions of employment as well as the impact thereon upon
request by employee representatives, but excluding the
changes, the impact of changes, and the implementation of the
changes set forth in this amendatory Act of the 98th General
Assembly.
To preserve the rights of employers and exclusive
representatives which have established collective bargaining
relationships or negotiated collective bargaining agreements
prior to the effective date of this Act, employers shall be
required to bargain collectively with regard to any matter
concerning wages (but subject to any applicable restrictions in
Section 14-106.5 or 15-132.9 of the Illinois Pension Code),
hours or conditions of employment about which they have
bargained for and agreed to in a collective bargaining
agreement prior to the effective date of this Act, but
excluding the changes, the impact of changes, and the
implementation of the changes set forth in this amendatory Act
of the 98th General Assembly.
The chief judge of the judicial circuit that employs a
public employee who is a court reporter, as defined in the
Court Reporters Act, has the authority to hire, appoint,

09800SB1544sam003 - 166 - LRB098 07988 JDS 43665 a
promote, evaluate, discipline, and discharge court reporters
within that judicial circuit.
Nothing in this amendatory Act of the 94th General Assembly
shall be construed to intrude upon the judicial functions of
any court. This amendatory Act of the 94th General Assembly
applies only to nonjudicial administrative matters relating to
the collective bargaining rights of court reporters.
(Source: P.A. 94-98, eff. 7-1-05.)
(5 ILCS 315/15) (from Ch. 48, par. 1615)
Sec. 15. Act Takes Precedence.
(a) In case of any conflict between the provisions of this
Act and any other law (other than Section 5 of the State
Employees Group Insurance Act of 1971 and other than the
changes made to the Illinois Pension Code by Public Act 96-889
and the changes, impact of changes, and the implementation of
the changes made to the Illinois Pension Code and the State
Employees Group Insurance Act of 1971 by this amendatory Act of
the 98th 96th General Assembly), executive order or
administrative regulation relating to wages, hours and
conditions of employment and employment relations, the
provisions of this Act or any collective bargaining agreement
negotiated thereunder shall prevail and control. Nothing in
this Act shall be construed to replace or diminish the rights
of employees established by Sections 28 and 28a of the
Metropolitan Transit Authority Act, Sections 2.15 through 2.19

09800SB1544sam003 - 167 - LRB098 07988 JDS 43665 a
of the Regional Transportation Authority Act. The provisions of
this Act are subject to the changes made by this amendatory Act
of the 98th General Assembly, including Sections 14-106.5 and
15-132.9 of the Illinois Pension Code, and Section 5 of the
State Employees Group Insurance Act of 1971. Nothing in this
Act shall be construed to replace the necessity of complaints
against a sworn peace officer, as defined in Section 2(a) of
the Uniform Peace Officer Disciplinary Act, from having a
complaint supported by a sworn affidavit.
(b) Except as provided in subsection (a) above, any
collective bargaining contract between a public employer and a
labor organization executed pursuant to this Act shall
supersede any contrary statutes, charters, ordinances, rules
or regulations relating to wages, hours and conditions of
employment and employment relations adopted by the public
employer or its agents. Any collective bargaining agreement
entered into prior to the effective date of this Act shall
remain in full force during its duration.
(c) It is the public policy of this State, pursuant to
paragraphs (h) and (i) of Section 6 of Article VII of the
Illinois Constitution, that the provisions of this Act are the
exclusive exercise by the State of powers and functions which
might otherwise be exercised by home rule units. Such powers
and functions may not be exercised concurrently, either
directly or indirectly, by any unit of local government,
including any home rule unit, except as otherwise authorized by

09800SB1544sam003 - 168 - LRB098 07988 JDS 43665 a
this Act.
(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
Section B-10. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the State Employees Group Insurance Act
of 1971 is amended by changing Sections 6.9 and 6.10 and by
adding Section 6.10A as follows:
(5 ILCS 375/6.9)
Sec. 6.9. Health benefits for community college benefit
recipients and community college dependent beneficiaries.
(a) Purpose. It is the purpose of this amendatory Act of
1997 to establish a uniform program of health benefits for
community college benefit recipients and their dependent
beneficiaries under the administration of the Department of
Central Management Services.
(b) Creation of program. Beginning July 1, 1999, the
Department of Central Management Services shall be responsible
for administering a program of health benefits for community
college benefit recipients and community college dependent
beneficiaries under this Section. The State Universities

09800SB1544sam003 - 169 - LRB098 07988 JDS 43665 a
Retirement System and the boards of trustees of the various
community college districts shall cooperate with the
Department in this endeavor.
(c) Eligibility. All community college benefit recipients
and community college dependent beneficiaries shall be
eligible to participate in the program established under this
Section, without any interruption or delay in coverage or
limitation as to pre-existing medical conditions. Eligibility
to participate shall be determined by the State Universities
Retirement System. Eligibility information shall be
communicated to the Department of Central Management Services
in a format acceptable to the Department.
(d) Coverage. The health benefit coverage provided under
this Section shall be a program of health, dental, and vision
benefits.
The program of health benefits under this Section may
include any or all of the benefit limitations, including but
not limited to a reduction in benefits based on eligibility for
federal medicare benefits, that are provided under subsection
(a) of Section 6 of this Act for other health benefit programs
under this Act.
(e) Insurance rates and premiums. The Director shall
determine the insurance rates and premiums for community
college benefit recipients and community college dependent
beneficiaries. Rates and premiums may be based in part on age
and eligibility for federal Medicare coverage. The Director

09800SB1544sam003 - 170 - LRB098 07988 JDS 43665 a
shall also determine premiums that will allow for the
establishment of an actuarially sound reserve for this program.
The cost of health benefits under the program shall be paid
as follows:
(1) For a community college benefit recipient, costs
shall be an amount equal to the difference between the
projected costs of health benefits under the program and
projected contributions from community college districts,
active contributors, and other income of the program. Other
income of the program shall exclude contributions made by
the State to retire unpaid claims of the program up to 75%
of the total insurance rate shall be paid from the
Community College Health Insurance Security Fund.
(2) The balance of the rate of insurance, including the
entire premium for any coverage for community college
dependent beneficiaries that has been elected, shall be
paid by deductions authorized by the community college
benefit recipient to be withheld from his or her monthly
annuity or benefit payment from the State Universities
Retirement System; except that (i) if the balance of the
cost of coverage exceeds the amount of the monthly annuity
or benefit payment, the difference shall be paid directly
to the State Universities Retirement System by the
community college benefit recipient, and (ii) all or part
of the balance of the cost of coverage may, at the option
of the board of trustees of the community college district,

09800SB1544sam003 - 171 - LRB098 07988 JDS 43665 a
be paid to the State Universities Retirement System by the
board of the community college district from which the
community college benefit recipient retired. The State
Universities Retirement System shall promptly deposit all
moneys withheld by or paid to it under this subdivision
(e)(2) into the Community College Health Insurance
Security Fund. These moneys shall not be considered assets
of the State Universities Retirement System.
(f) Financing. All revenues arising from the
administration of the health benefit program established under
this Section shall be deposited into the Community College
Health Insurance Security Fund, which is hereby created as a
nonappropriated trust fund to be held outside the State
Treasury, with the State Treasurer as custodian. Any interest
earned on moneys in the Community College Health Insurance
Security Fund shall be deposited into the Fund.
Moneys in the Community College Health Insurance Security
Fund shall be used only to pay the costs of the health benefit
program established under this Section, including associated
administrative costs and the establishment of a program
reserve. Beginning January 1, 1999, the Department of Central
Management Services may make expenditures from the Community
College Health Insurance Security Fund for those costs.
(g) Contract for benefits. The Director shall by contract,
self-insurance, or otherwise make available the program of
health benefits for community college benefit recipients and

09800SB1544sam003 - 172 - LRB098 07988 JDS 43665 a
their community college dependent beneficiaries that is
provided for in this Section. The contract or other arrangement
for the provision of these health benefits shall be on terms
deemed by the Director to be in the best interest of the State
of Illinois and the community college benefit recipients based
on, but not limited to, such criteria as administrative cost,
service capabilities of the carrier or other contractor, and
the costs of the benefits.
(h) Continuation of program. It is the intention of the
General Assembly that the program of health benefits provided
under this Section be maintained on an ongoing, affordable
basis. The program of health benefits provided under this
Section may be amended by the State and is not intended to be a
pension or retirement benefit subject to protection under
Article XIII, Section 5 of the Illinois Constitution.
(i) Other health benefit plans. A health benefit plan
provided by a community college district (other than a
community college district subject to Article VII of the Public
Community College Act) under the terms of a collective
bargaining agreement in effect on or prior to the effective
date of this amendatory Act of 1997 shall continue in force
according to the terms of that agreement, unless otherwise
mutually agreed by the parties to that agreement and the
affected retiree. A community college benefit recipient or
community college dependent beneficiary whose coverage under
such a plan expires shall be eligible to begin participating in

09800SB1544sam003 - 173 - LRB098 07988 JDS 43665 a
the program established under this Section without any
interruption or delay in coverage or limitation as to
pre-existing medical conditions.
This Act does not prohibit any community college district
from offering additional health benefits for its retirees or
their dependents or survivors.
(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
(5 ILCS 375/6.10)
Sec. 6.10. Contributions to the Community College Health
Insurance Security Fund.
(a) Beginning January 1, 1999, every active contributor of
the State Universities Retirement System (established under
Article 15 of the Illinois Pension Code) who (1) is a full-time
employee of a community college district (other than a
community college district subject to Article VII of the Public
Community College Act) or an association of community college
boards and (2) is not an employee as defined in Section 3 of
this Act shall make contributions toward the cost of community
college annuitant and survivor health benefits at the rate of
0.50% of salary. Beginning with the first State fiscal year to
occur after the end of the election period specified in Section
15-132.9, the contribution rate under this subsection (a) shall
be 1.25% of salary. Beginning with the second State fiscal year
to occur after the end of the election period specified in

09800SB1544sam003 - 174 - LRB098 07988 JDS 43665 a
Section 15-132.9, the contribution rate under this subsection
(a) shall be a percentage of salary determined by the
Department of Central Management Services, or its successor, by
rule, which in each fiscal year shall not exceed 108% of the
percentage of salary actually required to be contributed in the
previous fiscal year. However, the required contribution rate
determined by the Department or its successor under this
subsection (a) shall equal the required contribution rate
determined by the Department or its successor under subsection
(b) of this Section.
These contributions shall be deducted by the employer and
paid to the State Universities Retirement System as service
agent for the Department of Central Management Services. The
System may use the same processes for collecting the
contributions required by this subsection that it uses to
collect the contributions received from those employees under
Section 15-157 of the Illinois Pension Code. An employer may
agree to pick up or pay the contributions required under this
subsection on behalf of the employee; such contributions shall
be deemed to have been paid by the employee.
The State Universities Retirement System shall promptly
deposit all moneys collected under this subsection (a) into the
Community College Health Insurance Security Fund created in
Section 6.9 of this Act. The moneys collected under this
Section shall be used only for the purposes authorized in
Section 6.9 of this Act and shall not be considered to be

09800SB1544sam003 - 175 - LRB098 07988 JDS 43665 a
assets of the State Universities Retirement System.
Contributions made under this Section are not transferable to
other pension funds or retirement systems and are not
refundable upon termination of service.
(b) Beginning January 1, 1999, every community college
district (other than a community college district subject to
Article VII of the Public Community College Act) or association
of community college boards that is an employer under the State
Universities Retirement System shall contribute toward the
cost of the community college health benefits provided under
Section 6.9 of this Act an amount equal to 0.50% of the salary
paid to its full-time employees who participate in the State
Universities Retirement System and are not members as defined
in Section 3 of this Act. Beginning with the first State fiscal
year to occur after the end of the election period specified in
Section 15-132.9, the contribution rate under this subsection
(b) shall be 1.25% of salary. Beginning with the second State
fiscal year to occur after the end of the election period
specified in Section 15-132.9, the contribution rate under this
subsection (b) shall be a percentage of salary determined by
the Department of Central Management Services, or its
successor, by rule, which in each fiscal year shall not exceed
108% of the percentage of salary actually required to be
contributed in the previous fiscal year. However, the required
contribution rate determined by the Department or its successor
under this subsection (b) shall equal the required contribution

09800SB1544sam003 - 176 - LRB098 07988 JDS 43665 a
rate determined by the Department or its successor under
subsection (a) of this Section.
These contributions shall be paid by the employer to the
State Universities Retirement System as service agent for the
Department of Central Management Services. The System may use
the same processes for collecting the contributions required by
this subsection that it uses to collect the contributions
received from those employers under Section 15-155 of the
Illinois Pension Code.
The State Universities Retirement System shall promptly
deposit all moneys collected under this subsection (b) into the
Community College Health Insurance Security Fund created in
Section 6.9 of this Act. The moneys collected under this
Section shall be used only for the purposes authorized in
Section 6.9 of this Act and shall not be considered to be
assets of the State Universities Retirement System.
Contributions made under this Section are not transferable to
other pension funds or retirement systems and are not
refundable upon termination of service.
The Department of Healthcare and Family Services, or any
successor agency designated to procure healthcare contracts
pursuant to this Act, is authorized to establish funds,
separate accounts provided by any bank or banks as defined by
the Illinois Banking Act, or separate accounts provided by any
savings and loan association or associations as defined by the
Illinois Savings and Loan Act of 1985 to be held by the

09800SB1544sam003 - 177 - LRB098 07988 JDS 43665 a
Director, outside the State treasury, for the purpose of
receiving the transfer of moneys from the Community College
Health Insurance Security Fund. The Department may promulgate
rules further defining the methodology for the transfers. Any
interest earned by moneys in the funds or accounts shall inure
to the Community College Health Insurance Security Fund. The
transferred moneys, and interest accrued thereon, shall be used
exclusively for transfers to administrative service
organizations or their financial institutions for payments of
claims to claimants and providers under the self-insurance
health plan. The transferred moneys, and interest accrued
thereon, shall not be used for any other purpose including, but
not limited to, reimbursement of administration fees due the
administrative service organization pursuant to its contract
or contracts with the Department.
(c) On or before November 15 of each year, the Board of
Trustees of the State Universities Retirement System shall
certify to the Governor, the Director of Central Management
Services, and the State Comptroller its estimate of the total
amount of contributions to be paid under subsection (a) of this
Section for the next fiscal year, except that no certification
shall be made under this subsection (c) on or after the
effective date of the changes made to this Section by this
amendatory Act of the 98th General Assembly. Beginning in
fiscal year 2008, the amount certified shall be decreased or
increased each year by the amount that the actual active

09800SB1544sam003 - 178 - LRB098 07988 JDS 43665 a
employee contributions either fell short of or exceeded the
estimate used by the Board in making the certification for the
previous fiscal year. The State Universities Retirement System
shall calculate the amount of actual active employee
contributions in fiscal years 1999 through 2005. Based upon
this calculation, the fiscal year 2008 certification shall
include an amount equal to the cumulative amount that the
actual active employee contributions either fell short of or
exceeded the estimate used by the Board in making the
certification for those fiscal years. The certification shall
include a detailed explanation of the methods and information
that the Board relied upon in preparing its estimate. As soon
as possible after the effective date of this Section, the Board
shall submit its estimate for fiscal year 1999.
(d) Beginning in fiscal year 1999, on the first day of each
month, or as soon thereafter as may be practical, the State
Treasurer and the State Comptroller shall transfer from the
General Revenue Fund to the Community College Health Insurance
Security Fund 1/12 of the annual amount appropriated for that
fiscal year to the State Comptroller for deposit into the
Community College Health Insurance Security Fund under Section
1.4 of the State Pension Funds Continuing Appropriation Act.
(e) Except where otherwise specified in this Section, the
definitions that apply to Article 15 of the Illinois Pension
Code apply to this Section.
(Source: P.A. 94-839, eff. 6-6-06; 95-632, eff. 9-25-07.)

09800SB1544sam003 - 179 - LRB098 07988 JDS 43665 a
(5 ILCS 375/6.10A new)
Sec. 6.10A. City colleges; optional participation in
program of health benefits. Notwithstanding any other
provision of this Act, the Department of Central Management
Services shall adopt rules authorizing optional participation
in the program of health benefits for community college benefit
recipients and community college dependent beneficiaries by
any person who is otherwise ineligible to participate in that
program solely as a result of that or another person's
employment with a community college district subject to Article
VII of the Public Community College Act.
Section B-12. If and only if any of the changes made by
Part A of this Act to provisions in Article 2, 14, or 15 of the
Illinois Pension Code concerning (i) automatic annual
increases, (ii) employee or member contributions, (iii) State
or employer contributions, (iv) State funding guarantees, or
(v) salary, earnings, or compensation is declared to be
unconstitutional or otherwise invalid, then the State
Employees Group Insurance Act of 1971 is amended by adding
Section 6.16 as follows:
(5 ILCS 375/6.16 new)
Sec. 6.16. Health benefit election for Tier I employees and
Tier I retirees.

09800SB1544sam003 - 180 - LRB098 07988 JDS 43665 a
(a) For purposes of this Section:
"Eligible Tier I employee" means, except as provided in
subsection (g) of this Section, an individual who makes or is
deemed to have made an election under paragraph (1) of
subsection (a) of Section 2-110.3, 14-106.5, or 15-132.9 of the
Illinois Pension Code.
"Eligible Tier I retiree" means an individual who makes or
is deemed to have made an election under paragraph (1) of
subsection (a-5) of Section 2-110.3, 14-106.5, or 15-132.9 of
the Illinois Pension Code.
"Program of health benefits" means (i) a health plan, as
defined in subsection (o) of Section 3 of this Act, that is
designed and contracted for by the Director under this Act or
any successor Act or (ii) if administration of that health plan
is transferred to a trust established by the State or an
independent Board in order to provide health benefits to a
class of persons that includes eligible Tier I retirees, then
the plan of health benefits provided through that trust.
(b) As adequate and legal consideration for making the
election under paragraph (1) of subsection (a) or (a-5) of
Section 2-110.3, 14-106.5, or 15-132.9 of the Illinois Pension
Code, as the case may be, each eligible Tier I employee and
each eligible Tier I retiree shall receive a vested and
enforceable contractual right to participate in a program of
health benefits while he or she qualifies as an annuitant or
retired employee. That right also extends to such a person's

09800SB1544sam003 - 181 - LRB098 07988 JDS 43665 a
dependents and survivors who are eligible under the applicable
program of health benefits.
(c) Notwithstanding subsection (b), eligible Tier I
employees and eligible Tier I retirees may be required to make
contributions toward the cost of coverage under a program of
health benefits.
(d) The vested and enforceable contractual right to a
program of health benefits is not offered as, and shall not be
considered, a pension or retirement benefit under Article XIII,
Section 5 of the Illinois Constitution, the Illinois Pension
Code, or any subsequent or successor enactment providing
pension benefits.
(e) Notwithstanding any other provision of this Act to the
contrary, except subsection (g) of this Section, a Tier I
employee or Tier I retiree who has made an election under
paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
14-106.5, or 15-132.9 of the Illinois Pension Code, as the case
may be, shall not be entitled to participate in any program of
health benefits under this Act as an annuitant or retired
employee receiving a retirement annuity, regardless of any
contrary election pursuant to any of those Sections under any
other retirement system.
Notwithstanding any other provision of this Act to the
contrary, except subsection (g) of this Section, a Tier I
employee who is not entitled to participate in the program of
health benefits as an annuitant or retired employee receiving a

09800SB1544sam003 - 182 - LRB098 07988 JDS 43665 a
retirement annuity, due to an election under paragraph (2) of
subsection (a) or (a-5) of Section 2-110.3, 14-106.5, or
15-132.9 of the Illinois Pension Code, as the case may be,
shall not be required to make contributions toward the program
of health benefits while he or she is an employee or active
contributor. However, an active employee may be required to
make contributions toward health benefits he or she receives
during active service.
(f) The Department shall coordinate with each retirement
system administering an election in accordance with this
amendatory Act of the 98th General Assembly to provide
information concerning the impact of the election of health
benefits. Each System shall include information prepared by the
Department in the required election packet. The Department
shall make information available to Tier I employees and Tier I
retirees through video materials, group presentations,
consultation by telephone or other electronic means, or any
combination of these methods. The information in the election
packet shall include a notice that states: "YOU ARE HEREBY
ADVISED THAT THE PROGRAM OF HEALTH BENEFITS OFFERED IS FOR
ACCESS TO A GROUP HEALTHCARE PLAN ADMINISTERED BY THE
DEPARTMENT, AND YOU MAY BE REQUIRED TO PAY FOR THE FULL COST OF
COVERAGE PROVIDED BY THE PLAN, INCLUDING ALL PREMIUM,
DEDUCTIBLE, AND COPAY AMOUNTS."
(g) Nothing in this Section shall be construed as applying
to a person who is eligible to make or who made the election

09800SB1544sam003 - 183 - LRB098 07988 JDS 43665 a
authorized under Section 15-135.1 of the Illinois Pension Code.
Section B-15. If and only if Section B-30, B-35, or B-40 of
this Part B takes effect, then the Governor's Office of
Management and Budget Act is amended by changing Sections 7 and
8 as follows:
(20 ILCS 3005/7) (from Ch. 127, par. 417)
Sec. 7. All statements and estimates of expenditures
submitted to the Office in connection with the preparation of a
State budget, and any other estimates of expenditures,
supporting requests for appropriations, shall be formulated
according to the various functions and activities for which the
respective department, office or institution of the State
government (including the elective officers in the executive
department and including the University of Illinois and the
judicial department) is responsible. All such statements and
estimates of expenditures relating to a particular function or
activity shall be further formulated or subject to analysis in
accordance with the following classification of objects:
(1) Personal services
(2) State contribution for employee group insurance
(3) Contractual services
(4) Travel
(5) Commodities
(6) Equipment

09800SB1544sam003 - 184 - LRB098 07988 JDS 43665 a
(7) Permanent improvements
(8) Land
(9) Electronic Data Processing
(10) Telecommunication services
(11) Operation of Automotive Equipment
(12) Contingencies
(13) Reserve
(14) Interest
(15) Awards and Grants
(16) Debt Retirement
(17) Non-cost Charges.
(18) State retirement contribution for annual normal cost
(19) State retirement contribution for unfunded accrued
liability.
(Source: P.A. 93-25, eff. 6-20-03.)
(20 ILCS 3005/8) (from Ch. 127, par. 418)
Sec. 8. When used in connection with a State budget or
expenditure or estimate, items (1) through (16) in the
classification of objects stated in Section 7 shall have the
meanings ascribed to those items in Sections 14 through 24.7,
respectively, of the State Finance Act. "An Act in relation to
State finance", approved June 10, 1919, as amended.
When used in connection with a State budget or expenditure
or estimate, items (18) and (19) in the classification of
objects stated in Section 7 shall have the meanings ascribed to

09800SB1544sam003 - 185 - LRB098 07988 JDS 43665 a
those items in Sections 24.12 and 24.13, respectively, of the
State Finance Act.
(Source: P.A. 82-325.)
Section B-20. If and only if Section B-30, B-35, or B-40 of
this Part B takes effect, then the State Finance Act is amended
by changing Section 13 and by adding Sections 24.12 and 24.13
as follows:
(30 ILCS 105/13) (from Ch. 127, par. 149)
Sec. 13. The objects and purposes for which appropriations
are made are classified and standardized by items as follows:
(1) Personal services;
(2) State contribution for employee group insurance;
(3) Contractual services;
(4) Travel;
(5) Commodities;
(6) Equipment;
(7) Permanent improvements;
(8) Land;
(9) Electronic Data Processing;
(10) Operation of automotive equipment;
(11) Telecommunications services;
(12) Contingencies;
(13) Reserve;
(14) Interest;

09800SB1544sam003 - 186 - LRB098 07988 JDS 43665 a
(15) Awards and Grants;
(16) Debt Retirement;
(17) Non-Cost Charges;
(18) State retirement contribution for annual normal cost;
(19) State retirement contribution for unfunded accrued
liability;
(20) (18) Purchase Contract for Real Estate.
When an appropriation is made to an officer, department,
institution, board, commission or other agency, or to a private
association or corporation, in one or more of the items above
specified, such appropriation shall be construed in accordance
with the definitions and limitations specified in this Act,
unless the appropriation act otherwise provides.
An appropriation for a purpose other than one specified and
defined in this Act may be made only as an additional, separate
and distinct item, specifically stating the object and purpose
thereof.
(Source: P.A. 84-263; 84-264.)
(30 ILCS 105/24.12 new)
Sec. 24.12. "State retirement contribution for annual
normal cost" defined. The term "State retirement contribution
for annual normal cost" means the portion of the total required
State contribution to a retirement system for a fiscal year
that represents the State's portion of the System's projected
normal cost for that fiscal year, as determined and certified

09800SB1544sam003 - 187 - LRB098 07988 JDS 43665 a
by the board of trustees of the retirement system in
conformance with the applicable provisions of the Illinois
Pension Code.
(30 ILCS 105/24.13 new)
Sec. 24.13. "State retirement contribution for unfunded
accrued liability" defined. The term "State retirement
contribution for unfunded accrued liability" means the portion
of the total required State contribution to a retirement system
for a fiscal year that is not included in the State retirement
contribution for annual normal cost.
Section B-22. If and only if Section A-15 is declared to be
unconstitutional or otherwise invalid, then the Budget
Stabilization Act is amended by changing Sections 20 and 25 as
follows:
(30 ILCS 122/20)
Sec. 20. Pension Stabilization Fund.
(a) The Pension Stabilization Fund is hereby created as a
special fund in the State treasury. Moneys in the fund shall be
used for the sole purpose of making payments to the designated
retirement systems as provided in Section 25.
(b) For each fiscal year when the General Assembly's
appropriations and transfers or diversions as required by law
from general funds do not exceed 99% of the estimated general

09800SB1544sam003 - 188 - LRB098 07988 JDS 43665 a
funds revenues pursuant to subsection (a) of Section 10, the
Comptroller shall transfer from the General Revenue Fund as
provided by this Section a total amount equal to 0.5% of the
estimated general funds revenues to the Pension Stabilization
Fund.
(c) For each fiscal year through State fiscal year 2013,
when the General Assembly's appropriations and transfers or
diversions as required by law from general funds do not exceed
98% of the estimated general funds revenues pursuant to
subsection (b) of Section 10, the Comptroller shall transfer
from the General Revenue Fund as provided by this Section a
total amount equal to 1.0% of the estimated general funds
revenues to the Pension Stabilization Fund.
(c-10) In State fiscal year 2020 and each fiscal year
thereafter, the State Comptroller shall order transferred and
the State Treasurer shall transfer $1,000,000,000 from the
General Revenue Fund to the Pension Stabilization Fund.
(c-15) The transfers made pursuant to subsection (c-10) of
this Section shall continue through State fiscal year 2045 or
until each of the designated retirement systems, as defined in
Section 25, has achieved the funding ratio prescribed by law
for that retirement system, whichever occurs first.
(d) The Comptroller shall transfer 1/12 of the total amount
to be transferred each fiscal year under this Section into the
Pension Stabilization Fund on the first day of each month of
that fiscal year or as soon thereafter as possible; except that

09800SB1544sam003 - 189 - LRB098 07988 JDS 43665 a
the final transfer of the fiscal year shall be made as soon as
practical after the August 31 following the end of the fiscal
year.
Until State fiscal year 2014, before Before the final
transfer for a fiscal year is made, the Comptroller shall
reconcile the estimated general funds revenues used in
calculating the other transfers under this Section for that
fiscal year with the actual general funds revenues for that
fiscal year. The final transfer for the fiscal year shall be
adjusted so that the total amount transferred under this
Section for that fiscal year is equal to the percentage
specified in subsection (b) or (c) of this Section, whichever
is applicable, of the actual general funds revenues for that
fiscal year. The actual general funds revenues for the fiscal
year shall be calculated in a manner consistent with subsection
(c) of Section 10 of this Act.
(Source: P.A. 94-839, eff. 6-6-06.)
(30 ILCS 122/25)
Sec. 25. Transfers from the Pension Stabilization Fund.
(a) As used in this Section, "designated retirement
systems" means:
(1) the State Employees' Retirement System of
Illinois;
(2) the Teachers' Retirement System of the State of
Illinois;

09800SB1544sam003 - 190 - LRB098 07988 JDS 43665 a
(3) the State Universities Retirement System;
(4) the Judges Retirement System of Illinois; and
(5) the General Assembly Retirement System.
(b) As soon as may be practical after any money is
deposited into the Pension Stabilization Fund, the State
Comptroller shall apportion the deposited amount among the
designated retirement systems and the State Comptroller and
State Treasurer shall pay the apportioned amounts to the
designated retirement systems. The amount deposited shall be
apportioned among the designated retirement systems in the same
proportion as their respective portions of the total actuarial
reserve deficiency of the designated retirement systems, as
most recently determined by the Governor's Office of Management
and Budget. Amounts received by a designated retirement system
under this Section shall be used for funding the unfunded
liabilities of the retirement system. Payments under this
Section are authorized by the continuing appropriation under
Section 1.7 of the State Pension Funds Continuing Appropriation
Act.
(c) At the request of the State Comptroller, the Governor's
Office of Management and Budget shall determine the individual
and total actuarial reserve deficiencies of the designated
retirement systems. For this purpose, the Governor's Office of
Management and Budget shall consider the latest available audit
and actuarial reports of each of the retirement systems and the
relevant reports and statistics of the Public Pension Division

09800SB1544sam003 - 191 - LRB098 07988 JDS 43665 a
of the Department of Financial and Professional Regulation.
(d) Payments to the designated retirement systems under
this Section shall be in addition to, and not in lieu of, any
State contributions required under Section 2-124, 14-131,
15-155, 16-158, or 18-131 of the Illinois Pension Code.
Payments to the designated retirement systems under this
Section, transferred after the effective date of this
amendatory Act of the 98th General Assembly, do not reduce and
do not constitute payment of any portion of the required State
contribution under Article 2, 14, 15, 16, or 18 of the Illinois
Pension Code in that fiscal year. Such amounts shall not
reduce, and shall not be included in the calculation of, the
required State contribution under Article 2, 14, 15, 16, or 18
of the Illinois Pension Code in any future year, until the
designated retirement system has received payment of
contributions pursuant to this Act.
(Source: P.A. 94-839, eff. 6-6-06.)
Section B-25. If and only if Section B-35 or B-40 of this
Part B takes effect, then the Illinois Pension Code is amended
by adding Section 1-162 as follows:
(40 ILCS 5/1-162 new)
Sec. 1-162. Optional cash balance plan.
(a) Participation and Applicability. Beginning 12 months
after the effective date of this Section, any Tier I employee

09800SB1544sam003 - 192 - LRB098 07988 JDS 43665 a
who has made the election under paragraph (1) of subsection (a)
or (a-5) of Section 14-106.5 or 15-132.9 may elect to
participate in the optional cash balance plan created under
this Section.
The Board of Trustees of the applicable retirement system
shall promulgate rules to create an annual election wherein a
person eligible to participate in the optional cash balance
plan may elect to participate, and an active employee who is a
participant in the plan may elect to cease active
participation. The election to cease active participation
shall not disqualify the employee from eligibility to receive
an interest credit under subsection (f), a distribution upon
termination under subsection (f-10), a refund under subsection
(f-15), a retirement annuity under subsection (g), or a
survivor's annuity under subsection (k), or from eligibility to
resume active participation in the optional cash balance plan
in a subsequent year.
(b) Title. The package of benefits provided under this
Section may be referred to as the "optional cash balance plan".
Persons subject to the provisions of this Section may be
referred to as "participants in the optional cash balance
plan".
(b-5) Definitions. As used in this Section:
"Account" means the notional cash balance account
established under this Section for a participant in the
optional cash balance plan.

09800SB1544sam003 - 193 - LRB098 07988 JDS 43665 a
"Salary" means "compensation" as defined in Article 14 and
"earnings" as defined in Article 15, whichever is applicable,
without regard to the limitation in subsection (b-5) of Section
1-160.
"Tier I employee" means a person who is a Tier I employee
under the applicable Article of this Code.
(c) Cash Balance Account. A notional cash balance account
shall be established by the applicable retirement system for
each participant in the optional cash balance plan. The account
is notional and does not contain any actual money segregated
from the commingled assets of the retirement system. The cash
balance in the account is to be used in calculating benefits as
provided in this Section, but is not to be used in the
calculation of any refund, transfer, or other benefit under the
applicable Article of this Code.
The amounts to be credited to the cash balance account
shall consist of (i) amounts contributed by or on behalf of the
participant as employee contributions, (ii) notional employer
contributions, and (iii) interest credit that is attributable
to the account, all as provided in this Section.
Whenever necessary for the prompt calculation or
administration, or when the System lacks information necessary
to the calculation or administration otherwise required of or
for a benefit under this Section, the applicable retirement
system may estimate an amount to be credited to or debited from
a participant's cash balance account and then adjust the amount

09800SB1544sam003 - 194 - LRB098 07988 JDS 43665 a
so credited or debited when more accurate information becomes
available.
The applicable retirement system shall give to each
participant in the optional cash balance plan who has not yet
retired annual notice of (1) the balance in the participant's
cash balance account and (2) an estimate of the retirement
annuity that will be payable to the participant if he or she
retires at age 59 1/2.
(d) Employee Contributions. In addition to the other
contributions required under the applicable Article, each
participant shall make contributions to the applicable
retirement system at the rate of 2% of each payment of salary.
The amount of each contribution shall be credited to the
participant's cash balance account upon receipt and after the
retirement system's reconciliation of the contribution.
(e) Optional Employer Contributions. Employers may make
optional additional contributions to the applicable retirement
system on behalf of their employees who are participants in the
optional cash balance plan in accordance with procedures
prescribed by the retirement system to the extent permitted by
federal law and the rules prescribed by the retirement system.
The optional additional contributions under this subsection
are actual monetary contributions to the retirement system, and
the amount of each optional additional contribution shall be
credited to the participant's cash balance account upon receipt
and after the retirement system's reconciliation of the

09800SB1544sam003 - 195 - LRB098 07988 JDS 43665 a
contribution.
(f) Interest Credit. An amount representing earnings on
investments shall be determined by the retirement system in
accordance with this Section and credited to the participant's
cash balance account for each fiscal year in which there is a
positive balance in that account; except that no additional
interest credit shall be credited while an annuity based on the
account is being paid. The interest credit amount shall be a
percentage of the average quarterly balance in the cash balance
account during that fiscal year and shall be calculated on June
30.
The percentage shall be the assumed treasury rate for the
previous fiscal year, unless neither the retirement system's
actual rate of investment earnings for the previous fiscal year
nor the retirement system's actual rate of investment earnings
for the five-year period ending at the end of the previous
fiscal year is less than the assumed treasury rate.
If both the retirement system's actual rate of investment
earnings for the previous fiscal year and the actual rate of
investment earnings for the five-year period ending at the end
of the previous fiscal year are at least the assumed treasury
rate, then the percentage shall be:
(i) the assumed treasury rate, plus
(ii) two-thirds of the amount of the actual rate of
investment earnings for the previous fiscal year that
exceeds the assumed treasury rate.

09800SB1544sam003 - 196 - LRB098 07988 JDS 43665 a
However, in no event shall the percentage applied under this
subsection exceed 10%.
For the purposes of this subsection only, "previous fiscal
year" means the fiscal year ending one year before the interest
rate is calculated.
For the purposes of this subsection only, "assumed treasury
rate" means the average annual yield of the 30-year U.S.
Treasury Bond over the previous fiscal year, but not less than
4%.
When a person applies for a benefit under this Section, the
retirement system shall apply an interest credit based on a
proration of an estimate of what the interest credit will be
for the relevant year. When the retirement system certifies the
credit on June 30, it shall adjust the benefit accordingly.
(f-10) Distribution upon Termination of Employment. Upon
termination of active employment with at least 5 years of
service credit under the applicable retirement system and prior
to making application for an annuity under this Section, a
participant in the optional cash balance plan may make an
irrevocable election to distribute an amount not to exceed 40%
of the balance in the participant's account in the form of a
direct rollover to another qualified plan, to the extent
allowed by federal law. If the participant makes such an
election, then the amount distributed shall be debited from the
participant's cash balance account. A participant in the
optional cash balance plan shall be allowed only one

09800SB1544sam003 - 197 - LRB098 07988 JDS 43665 a
distribution under this subsection. The remaining balance in
the participant's account shall be used for the determination
of other benefits provided under this Section.
(f-15) Refund. In lieu of receiving a distribution under
subsection (f-10), at any time after terminating active
employment under the applicable retirement system, but before
receiving a retirement annuity under this Section, a
participant in the optional cash balance plan may elect to
receive a refund under this subsection. The refund shall
consist of an amount equal to the amount of all employee
contributions credited to the participant's account, but shall
not include any interest credit or employer contributions. If
the participant so requests, the refund may be paid in the form
of a direct rollover to another qualified plan, to the extent
allowed by federal law and in accordance with the rules of the
applicable retirement system. Upon payment of the refund, the
participant's notional cash balance account shall be closed.
(g) Retirement Annuity. A participant in the optional cash
balance plan may begin collecting a retirement annuity at age
59 1/2, but no earlier than the date of termination of active
employment under the applicable retirement system.
The amount of the retirement annuity shall be calculated by
the retirement system, based on the balance in the cash balance
account, the assumption of future investment returns as
specified in this subsection, the participant's election to
have a lifetime survivor's annuity as specified in this

09800SB1544sam003 - 198 - LRB098 07988 JDS 43665 a
subsection, the annual increase in retirement annuity as
specified in subsection (h), the annual increase in survivor's
annuity as specified in subsection (l), and any actuarial
assumptions and tables adopted by the board of the retirement
system for this purpose. The calculation shall determine the
amount of retirement annuity, on an actuarially equivalent
basis, that shall be designed to result in the balance in the
participant's account arriving at zero on the date when the
last payment of the retirement annuity (or survivor's annuity,
if the participant elects to provide for a survivor's annuity
pursuant to this subsection) is anticipated to be paid under
the relevant actuarial assumptions. A retirement annuity or a
survivor's annuity provided under this Section shall be a life
annuity and shall not expire if the account balance equals
zero.
The annuity payment shall begin on the date specified by
the participant submitting a written application, which date
shall not be prior to termination of employment or more than
one year before the application is received by the board;
however, if the participant is not an employee of an employer
participating in this System or in a participating system as
defined in Article 20 of this Code on April 1 of the calendar
year next following the calendar year in which the participant
attains age 70 1/2, the annuity payment period shall begin on
that date regardless of whether an application has been filed.
The participant may elect, under the participant's written

09800SB1544sam003 - 199 - LRB098 07988 JDS 43665 a
application for retirement, to receive a reduced annuity
payable for his or her life and to have a lifetime survivor's
annuity in a monthly amount equal to 50%, 75%, or 100% of that
reduced monthly amount, to be paid after the participant's
death to his or her eligible survivor. Eligibility for a
survivor's annuity shall be determined under the applicable
Article of this Code.
For the purpose of calculating retirement annuities,
future investment returns shall be assumed to be a percentage
equal to the average yield of the 30-year U.S. Treasury Bond
over the 5 fiscal years prior to the calculation of the initial
retirement annuity, plus 250 basis points, but not less than 4%
nor more than 8%.
(h) Annual Increase in Retirement Annuity. The retirement
annuity shall be subject to an automatic annual increase in an
amount equal to 3% of the originally granted annuity on each
January 1 occurring on or after the first anniversary of the
annuity start date.
(i) Disability Benefits. There are no disability benefits
provided under the optional cash balance plan, and no amounts
for disability shall be deducted from the account of a
participant in the optional cash balance plan. The disability
benefits provided under the applicable retirement system apply
to participants in the optional cash balance plan.
(j) Return to Service. Upon a return to service under the
same retirement system after beginning to receive a retirement

09800SB1544sam003 - 200 - LRB098 07988 JDS 43665 a
annuity under the optional cash balance plan, the retirement
annuity shall be suspended and active participation in the
optional cash balance plan shall resume. Upon termination of
the employment, the retirement annuity shall resume in an
amount to be recalculated in accordance with subsection (g),
taking into consideration the changes in the cash balance
account. If a retired annuitant returns to service, his or her
notional cash balance account shall be decreased by each
payment of retirement annuity prior to the return to service.
(k) Survivor's Annuity - Death before Retirement. In the
case of a participant in the optional cash balance plan who had
less than 5 years of service under the applicable Article and
had not begun receiving a retirement annuity, the eligible
survivor shall be entitled only to a refund of employee
contributions under subsection (f-15).
In the case of a participant in the optional cash balance
plan who had at least 5 years of service under the applicable
Article and had not begun receiving a retirement annuity, the
eligible survivor shall be entitled to receive a survivor's
annuity beginning at age 59 1/2 upon written application. The
survivor's annuity shall be calculated in the same manner as a
retirement annuity under subsection (g). At any time before
receiving a survivor's annuity, the eligible survivor may claim
a distribution under subsection (f-10) or a refund under
subsection (f-15). The deceased participant's account shall
continue to receive interest credit until the eligible survivor

09800SB1544sam003 - 201 - LRB098 07988 JDS 43665 a
begins to receive a survivor's annuity or receives a refund of
employee contributions under subsection (f-15).
Eligibility for a survivor's annuity shall be determined
under the applicable Article of this Code. A child's or
parent's annuity for an otherwise eligible child or dependent
parent shall be in the same amount, if any, prescribed under
the applicable Article.
(l) Annual Increase in Survivor's Annuity. A survivor's
annuity granted under subsection (g) or (k) shall be subject to
an automatic annual increase in an amount equal to 3% of the
originally granted annuity on each January 1 occurring on or
after the first anniversary of the annuity start date.
(m) Applicability of Provisions. The following provisions,
if and as they exist in this Code, do not apply to participants
in the optional cash balance plan with respect to participation
in the optional cash balance plan, except as they are
specifically provided for in this Section:
(1) minimum service or vesting requirements (other
than as provided in this Section);
(2) provisions limiting a retirement annuity to a
specified percentage of salary;
(3) provisions authorizing a minimum retirement or
survivor's annuity or a supplemental annuity;
(4) provisions authorizing any form of retirement
annuity or survivor's annuity not authorized under this
Section;

09800SB1544sam003 - 202 - LRB098 07988 JDS 43665 a
(5) provisions authorizing a reversionary annuity
(other than the survivor's annuity under subsection (g));
(6) provisions authorizing a refund of employee
contributions upon termination of service (other than upon
the death of the participant without an eligible survivor)
or any lump-sum payout in lieu of a retirement or
survivor's annuity (other than the distribution under
subsection (f-10) or the refund under subsection (f-15) of
this Section);
(7) provisions authorizing optional service credits or
the payment of optional additional contributions (other
than the optional employer contributions specifically
authorized in this Section); or
(8) a level income option.
The Retirement Systems Reciprocal Act (Article 20 of this
Code) does not apply to participation in the optional cash
balance plan and does not affect the calculation of benefits
payable under this Section.
The other provisions of this Code continue to apply to
participants in the optional cash balance plan to the extent
that they do not conflict with this Section. In the case of a
conflict between the provisions of this Section and any other
provision of this Code, the provisions of this Section control.
(n) Rules. The Board of Trustees of the applicable
retirement system may adopt rules and procedures for the
implementation of this Section, including but not limited to

09800SB1544sam003 - 203 - LRB098 07988 JDS 43665 a
determinations of how to integrate the administration of this
Section with the requirements of the applicable Article and any
other applicable provisions of this Code.
(o) Actual Employer Contributions. Payment of employer
contributions with respect to participants in the optional cash
balance plan shall be the responsibility of the actual
employer. Optional additional contributions by employers may
be paid in any amount, but must be paid in the manner specified
by the applicable retirement system.
(p) Prospective Modification. The provisions set forth in
this Section are subject to prospective changes made by law
provided that any such changes shall not apply to any benefits
accrued under this Section prior to the effective date of any
amendatory Act of the General Assembly.
(q) Qualified Plan Status. No provision of this Section
shall be interpreted in a way that would cause the applicable
retirement system to cease to be a qualified plan under Section
401(a) of the Internal Revenue Code of 1986.
Section B-28. If and only if any of the changes made in
Part A of this Act to Sections 2-101, 2-105, or 2-107 of the
Illinois Pension Code are declared to be unconstitutional or
otherwise invalid, then the Illinois Pension Code is amended by
changing Sections 2-101, 2-105, and 2-107 as follows:
(40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)

09800SB1544sam003 - 204 - LRB098 07988 JDS 43665 a
Sec. 2-101. Creation of system. A retirement system is
created to provide retirement annuities, survivor's annuities
and other benefits for certain members of the General Assembly,
certain elected state officials, and their beneficiaries.
The system shall be known as the "General Assembly
Retirement System". All its funds and property shall be a trust
separate from all other entities, maintained for the purpose of
securing payment of annuities and benefits under this Article.
Participation in the retirement system created under this
Article is restricted to persons who become participants before
January 1, 2014. Beginning on that date, the System shall not
accept any new participants.
(Source: P.A. 83-1440.)
(40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
Sec. 2-105. Member. "Member": Members of the General
Assembly of this State, including persons who enter military
service while a member of the General Assembly, and any person
serving as Governor, Lieutenant Governor, Secretary of State,
Treasurer, Comptroller, or Attorney General for the period of
service in such office.
Any person who has served for 10 or more years as Clerk or
Assistant Clerk of the House of Representatives, Secretary or
Assistant Secretary of the Senate, or any combination thereof,
may elect to become a member of this system while thenceforth
engaged in such service by filing a written election with the

09800SB1544sam003 - 205 - LRB098 07988 JDS 43665 a
board. Any person so electing shall be deemed an active member
of the General Assembly for the purpose of validating and
transferring any service credits earned under any of the funds
and systems established under Articles 3 through 18 of this
Code.
However, notwithstanding any other provision of this
Article, a person shall not be deemed a member for the purposes
of this Article unless he or she became a participant of the
System before January 1, 2014.
(Source: P.A. 85-1008.)
(40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
Sec. 2-107. Participant. "Participant": Any member who
elects to participate; and any former member who elects to
continue participation under Section 2-117.1, for the duration
of such continued participation. However, notwithstanding any
other provision of this Article, a person shall not be deemed a
participant for the purposes of this Article unless he or she
became a participant of the System before January 1, 2014.
(Source: P.A. 86-1488.)
Section B-30. If and only if any of the changes made by
Part A of this Act to provisions in Article 2 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,

09800SB1544sam003 - 206 - LRB098 07988 JDS 43665 a
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Illinois Pension Code is amended by
changing Sections 2-108, 2-119.1, 2-125, 2-134, and 2-162 and
adding Sections 2-105.1, 2-105.2, 2-107.9, and 2-110.3 as
follows:
(40 ILCS 5/2-105.1 new)
Sec. 2-105.1. Tier I employee. "Tier I employee": A
participant who first became a participant before January 1,
2011.
(40 ILCS 5/2-105.2 new)
Sec. 2-105.2. Tier I retiree. "Tier I retiree" means a
former Tier I employee who is receiving a retirement annuity.
(40 ILCS 5/2-107.9 new)
Sec. 2-107.9. Future increase in income. "Future increase
in income": Any increase in income in any form offered for
service as a member under this Article after the end of the
election period specified in Section 2-110.3 that would qualify
as "salary", as defined in Section 2-108, but for the fact that
the increase in income was offered to the member on the
condition that it not qualify as salary and was accepted by the
member subject to that condition.
(40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)

09800SB1544sam003 - 207 - LRB098 07988 JDS 43665 a
Sec. 2-108. Salary. "Salary": (1) For members of the
General Assembly, the total compensation paid to the member by
the State for one year of service, including the additional
amounts, if any, paid to the member as an officer pursuant to
Section 1 of "An Act in relation to the compensation and
emoluments of the members of the General Assembly", approved
December 6, 1907, as now or hereafter amended.
(2) For the State executive officers specified in Section
2-105, the total compensation paid to the member for one year
of service.
(3) For members of the System who are participants under
Section 2-117.1, or who are serving as Clerk or Assistant Clerk
of the House of Representatives or Secretary or Assistant
Secretary of the Senate, the total compensation paid to the
member for one year of service, but not to exceed the salary of
the highest salaried officer of the General Assembly.
However, in the event that federal law results in any
participant receiving imputed income based on the value of
group term life insurance provided by the State, such imputed
income shall not be included in salary for the purposes of this
Article.
Notwithstanding any other provision of this Section,
"salary" does not include any future increase in income that is
offered for service as a member under this Article pursuant to
the requirements of subsection (c) of Section 2-110.3 and
accepted by a Tier I employee, or a Tier I retiree returning to

09800SB1544sam003 - 208 - LRB098 07988 JDS 43665 a
active service, who has made an election under paragraph (2) of
subsection (a) or (a-5) of Section 2-110.3.
(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
(40 ILCS 5/2-110.3 new)
Sec. 2-110.3. Election by Tier I employees and Tier I
retirees.
(a) Each Tier I employee shall make an irrevocable election
either:
(1) to agree to the following:
(i) to have the amount of the automatic annual
increases in his or her retirement annuity that are
otherwise provided for in this Article calculated,
instead, as provided in subsection (a-1) of Section
2-119.1; and
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (a-2) of Section 2-119.1 and to
relinquish the additional increases provided in
subsection (b) of Section 2-119.1; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each Tier I employee no earlier than 6 months after the
effective date of this Section and no later than 11 months
after the effective date of this Section, except that:

09800SB1544sam003 - 209 - LRB098 07988 JDS 43665 a
(i) a person who becomes a Tier I employee under this
Article later than 6 months after the effective date of
this Section must make the election under this subsection
(a) within 60 days after becoming a Tier I employee;
(ii) a person who returns to active service as a Tier I
employee under this Article later than 6 months after the
effective date of this Section and has not yet made an
election under this Section must make the election under
this subsection (a) within 60 days after returning to
active service as a Tier I employee; and
(iii) a person who made the election under subsection
(a-5) as a Tier I retiree remains bound by that election
and shall not make a later election under this subsection
(a).
If a Tier I employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) Each Tier I retiree shall make an irrevocable
election either:
(1) to agree to the following:
(i) to have the amount of the automatic annual
increases in his or her retirement annuity that are
otherwise provided for in this Article calculated,
instead, as provided in subsection (a-1) of Section
2-119.1; and

09800SB1544sam003 - 210 - LRB098 07988 JDS 43665 a
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (a-2) of Section 2-119.1 and to
relinquish the additional increases provided in
subsection (b) of Section 2-119.1; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection.
The election required under this subsection (a-5) shall be
made by each Tier I retiree no earlier than 6 months after the
effective date of this Section and no later than 11 months
after the effective date of this Section, except that:
(i) a person who becomes a Tier I retiree under this
Article later than 6 months after the effective date of
this Section must make the election under this subsection
(a-5) within 60 days after becoming a Tier I retiree; and
(ii) a person who made the election under subsection
(a) as a Tier I employee remains bound by that election and
shall not make a later election under this subsection
(a-5).
If a Tier I retiree fails for any reason to make a required
election under this subsection within the time specified, then
the Tier I retiree shall be deemed to have made the election
under paragraph (2) of this subsection.
(a-10) All elections under subsection (a) or (a-5) that are
made or deemed to be made within 11 months after the effective
date of this Section shall take effect 12 months after the

09800SB1544sam003 - 211 - LRB098 07988 JDS 43665 a
effective date of this Section. Elections that are made or
deemed to be made more than 11 months after the effective date
of this Section shall take effect on the first day of the month
following the month in which the election is made or deemed to
be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 98th General Assembly for making the
election under paragraph (1) of subsection (a) of this Section,
any future increases in income offered for service as a member
under this Article to a Tier I employee who has made the
election under paragraph (1) of subsection (a) of this Section
shall be offered expressly and irrevocably as constituting
salary under Section 2-108.
As adequate and legal consideration provided under this
amendatory Act of the 98th General Assembly for making the
election under paragraph (1) of subsection (a-5) of this
Section, any future increases in income offered for service as
a member under this Article to a Tier I retiree who returns to
active service after having made the election under paragraph
(1) of subsection (a-5) of this Section shall be offered
expressly and irrevocably as constituting salary under Section
2-108.
(c) A Tier I employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to items (i) and (ii) set forth in paragraph (1) of
subsection (a) of this Section. However, any future increases

09800SB1544sam003 - 212 - LRB098 07988 JDS 43665 a
in income offered for service as a member under this Article to
a Tier I employee who has made the election under paragraph (2)
of subsection (a) of this Section shall be offered expressly
and irrevocably as not constituting salary under Section 2-108,
and the member may not accept any future increase in income
that is offered in violation of this requirement.
A Tier I retiree who makes the election under paragraph (2)
of subsection (a-5) of this Section shall not be subject to
items (i) and (ii) set forth in paragraph (1) of subsection
(a-5) of this Section. However, any future increases in income
offered for service as a member under this Article to a Tier I
retiree who returns to active service and has made the election
under paragraph (2) of subsection (a-5) of this Section shall
be offered expressly and irrevocably as not constituting salary
under Section 2-108, and the member may not accept any future
increase in income that is offered in violation of this
requirement.
(d) The System shall make a good faith effort to contact
each Tier I employee and Tier I retiree subject to this
Section. The System shall mail information describing the
required election to each Tier I employee and Tier I retiree by
United States Postal Service mail to his or her last known
address on file with the System. If the Tier I employee or Tier
I retiree is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details

09800SB1544sam003 - 213 - LRB098 07988 JDS 43665 a
in a regularly published newsletter or other existing public
forum.
Tier I employees and Tier I retirees who are subject to
this Section shall be provided with an election packet
containing information regarding their options, as well as the
forms necessary to make the required election. Upon request,
the System shall offer Tier I employees and Tier I retirees an
opportunity to receive information from the System before
making the required election. The information may be provided
through video materials, group presentations, individual
consultation with a member or authorized representative of the
System in person or by telephone or other electronic means, or
any combination of those methods. The System shall not provide
advice or counseling with respect to which election a Tier I
employee or Tier I retiree should make or specific to the legal
or tax circumstances of or consequences to the Tier I employee
or Tier I retiree.
The System shall inform Tier I employees and Tier I
retirees in the election packet required under this subsection
that the Tier I employee or Tier I retiree may also wish to
obtain information and counsel relating to the election
required under this Section from any other available source,
including but not limited to labor organizations and private
counsel.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member, beneficiary,

09800SB1544sam003 - 214 - LRB098 07988 JDS 43665 a
or annuitant regarding the elections under this Section. The
System shall coordinate with the Illinois Department of Central
Management Services and each other retirement system
administering an election in accordance with this amendatory
Act of the 98th General Assembly to provide information
concerning the impact of the election set forth in this
Section.
(e) Notwithstanding any other provision of law, any future
increases in income offered for service as a member must be
offered expressly and irrevocably as not constituting "salary"
under Section 2-108 to any Tier I employee, or Tier I retiree
returning to active service, who has made an election under
paragraph (2) of subsection (a) or (a-5) of Section 2-110.3. A
Tier I employee, or Tier I retiree returning to active service,
who has made an election under paragraph (2) of subsection (a)
or (a-5) of Section 2-110.3 shall not accept any future
increase in income that is offered for service as a member
under this Article in violation of the requirement set forth in
this subsection.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.
(g) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986.
(h) If this Section is determined to be unconstitutional or

09800SB1544sam003 - 215 - LRB098 07988 JDS 43665 a
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction as applied
to Tier I employees but not as applied to Tier I retirees, then
this Section and the changes deriving from the election
required under this Section shall be null and void as applied
to Tier I employees but shall remain in full effect for Tier I
retirees.
(i) If this Section is determined to be unconstitutional or
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction as applied
to Tier I retirees but not as applied to Tier I employees, then
this Section and the changes deriving from the election
required under this Section shall be null and void as applied
to Tier I retirees but shall remain in full effect for Tier I
employees.
(j) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
Sec. 2-119.1. Automatic increase in retirement annuity.

09800SB1544sam003 - 216 - LRB098 07988 JDS 43665 a
(a) Except as provided in subsections (a-1) and (a-2), a A
participant who retires after June 30, 1967, and who has not
received an initial increase under this Section before the
effective date of this amendatory Act of 1991, shall, in
January or July next following the first anniversary of
retirement, whichever occurs first, and in the same month of
each year thereafter, but in no event prior to age 60, have the
amount of the originally granted retirement annuity increased
as follows: for each year through 1971, 1 1/2%; for each year
from 1972 through 1979, 2%; and for 1980 and each year
thereafter, 3%. Annuitants who have received an initial
increase under this subsection prior to the effective date of
this amendatory Act of 1991 shall continue to receive their
annual increases in the same month as the initial increase.
(a-1) Notwithstanding any other provision of this Article,
for a Tier I employee or Tier I retiree who made the election
under paragraph (1) of subsection (a) or (a-5) of Section
2-110.3, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
that election shall be 3% or one-half of the annual unadjusted
percentage increase, if any, in the Consumer Price Index-U for
the 12 months ending with the preceding September, whichever is
less, of the originally granted retirement annuity. For the
purposes of this Section, "Consumer Price Index-U" means the
index published by the Bureau of Labor Statistics of the United
States Department of Labor that measures the average change in

09800SB1544sam003 - 217 - LRB098 07988 JDS 43665 a
prices of goods and services purchased by all urban consumers,
United States city average, all items, 1982-84 = 100.
(a-2) For a Tier I employee or Tier I retiree who made the
election under paragraph (1) of subsection (a) or (a-5) of
Section 2-110.3, the monthly retirement annuity shall first be
subject to annual increases on the January 1 occurring on or
next after the attainment of age 67 or the January 1 occurring
on or next after the fifth anniversary of the annuity start
date, whichever occurs earlier. If on the effective date of the
election under paragraph (1) of subsection (a-5) of Section
2-110.3 a Tier I retiree has already received an annual
increase under this Section but does not yet meet the new
eligibility requirements of this subsection, the annual
increases already received shall continue in force, but no
additional annual increase shall be granted until the Tier I
retiree meets the new eligibility requirements.
(b) Beginning January 1, 1990, for eligible participants
who remain in service after attaining 20 years of creditable
service, the 3% increases provided under subsection (a) shall
begin to accrue on the January 1 next following the date upon
which the participant (1) attains age 55, or (2) attains 20
years of creditable service, whichever occurs later, and shall
continue to accrue while the participant remains in service;
such increases shall become payable on January 1 or July 1,
whichever occurs first, next following the first anniversary of
retirement. For any person who has service credit in the System

09800SB1544sam003 - 218 - LRB098 07988 JDS 43665 a
for the entire period from January 15, 1969 through December
31, 1992, regardless of the date of termination of service, the
reference to age 55 in clause (1) of this subsection (b) shall
be deemed to mean age 50.
This subsection (b) does not apply to any person who first
becomes a member of the System after August 8, 2003 (the
effective date of Public Act 93-494) or (ii) has made the
election under paragraph (1) of subsection (a) or (a-5) of
Section 2-110.3; except that if on the effective date of the
election under paragraph (1) of subsection (a-5) of Section
2-110.3 a Tier I retiree has already received a retirement
annuity based on any annual increases under this subsection,
those annual increases under this subsection shall continue in
force this amendatory Act of the 93rd General Assembly.
(b-5) Notwithstanding any other provision of this Article,
a participant who first becomes a participant on or after
January 1, 2011 (the effective date of Public Act 96-889)
shall, in January or July next following the first anniversary
of retirement, whichever occurs first, and in the same month of
each year thereafter, but in no event prior to age 67, have the
amount of the retirement annuity then being paid increased by
3% or the annual unadjusted percentage increase in the Consumer
Price Index for All Urban Consumers as determined by the Public
Pension Division of the Department of Insurance under
subsection (a) of Section 2-108.1, whichever is less.
(c) The foregoing provisions relating to automatic

09800SB1544sam003 - 219 - LRB098 07988 JDS 43665 a
increases are not applicable to a participant who retires
before having made contributions (at the rate prescribed in
Section 2-126) for automatic increases for less than the
equivalent of one full year. However, in order to be eligible
for the automatic increases, such a participant may make
arrangements to pay to the system the amount required to bring
the total contributions for the automatic increase to the
equivalent of one year's contributions based upon his or her
last salary.
(d) A participant who terminated service prior to July 1,
1967, with at least 14 years of service is entitled to an
increase in retirement annuity beginning January, 1976, and to
additional increases in January of each year thereafter.
The initial increase shall be 1 1/2% of the originally
granted retirement annuity multiplied by the number of full
years that the annuitant was in receipt of such annuity prior
to January 1, 1972, plus 2% of the originally granted
retirement annuity for each year after that date. The
subsequent annual increases shall be at the rate of 2% of the
originally granted retirement annuity for each year through
1979 and at the rate of 3% for 1980 and thereafter.
(e) Beginning January 1, 1990, all automatic annual
increases payable under this Section shall be calculated as a
percentage of the total annuity payable at the time of the
increase, including previous increases granted under this
Article.

09800SB1544sam003 - 220 - LRB098 07988 JDS 43665 a
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-125) (from Ch. 108 1/2, par. 2-125)
Sec. 2-125. Obligations of State; funding guarantee.
(a) The payment of (1) the required State contributions,
(2) all benefits granted under this system and (3) all expenses
of administration and operation are obligations of the State to
the extent specified in this Article.
(b) All income, interest and dividends derived from
deposits and investments shall be credited to the account of
the system in the State Treasury and used to pay benefits under
this Article.
(c) If at least 50% of Tier I employees making an election
under Section 2-110.3 before June 1, 2014 choose the option
under paragraph (1) of subsection (a) of that Section, then the
State shall be contractually obligated to contribute to the
System in each State fiscal year an amount not less than the
sum required in Section 2-124 as that Section existed prior to
the effective date of this amendatory Act of the 98th General
Assembly notwithstanding the changes made to Section 2-124 by
Part A of this amendatory Act of the 98th General Assembly.
If at least 50% of Tier I employees making an election
under Section 2-110.3 before June 1, 2014 choose the option
under paragraph (1) of subsection (a) of that Section, then the
State shall be contractually obligated for purposes of this
Article 2 only (i) to make the transfer identified in

09800SB1544sam003 - 221 - LRB098 07988 JDS 43665 a
subsection (c-10) of Section 20 of the Budget Stabilization
Act, (ii) to apportion the amounts transferred pursuant to
subsection (c-10) of Section 20 of the Budget Stabilization Act
in accordance with subsection (b) of Section 25 of that Act,
(iii) to pay the apportioned amounts to the designated
retirement systems, and (iv) not to use the amounts transferred
pursuant to subsection (c-10) of Section 20 of the Budget
Stabilization Act to satisfy any portion of the required State
contributions due under Article 2, 14, 15, 16, or 18 of the
Illinois Pension Code.
The obligations created under this subsection (c) are
contractual obligations protected and enforceable under
Article I, Section 16 and Article XIII, Section 5 of the
Illinois Constitution.
Notwithstanding any other provision of law, if the State
fails to pay in a State fiscal year the amount guaranteed under
this subsection, the System may bring a mandamus action in the
Circuit Court of Sangamon County to compel the State to make
that payment, irrespective of other remedies that may be
available to the System. It shall be the mandatory fiduciary
obligation of the Board of the System to bring that action if
the State fails to pay in the fiscal year the amount guaranteed
under this subsection. Before commencing that action, the Board
shall submit a voucher for monthly contributions as required in
Section 2-124. If the State fails to pay a vouchered amount
within 90 days after receiving a voucher for that amount, then

09800SB1544sam003 - 222 - LRB098 07988 JDS 43665 a
the Board shall submit a written request to the Comptroller
seeking payment of that amount. A copy of the request shall be
filed with the Secretary of State, and the Secretary of State
shall provide copies of the request to the Governor and General
Assembly. No earlier than the 16th day after filing a request
with the Secretary, but no later than the 21st day after filing
that request, the Board may commence such an action in the
Circuit Court. If the Board fails to commence such action on or
before the 21st day after filing the request with the Secretary
of State, then any Tier I employee or Tier I retiree who chose
the option under paragraph (1) of subsection (a) or (a-5) of
Section 2-110.3 may file a mandamus action against the Board to
compel the Board to commence its mandamus action against the
State. This Section constitutes an express waiver of the
State's sovereign immunity. In ordering the State to make the
required payment, the court may order a reasonable payment
schedule to enable the State to make the required payment. The
obligations and causes of action created under this subsection
shall be in addition to any other right or remedy otherwise
accorded by common law, or State or federal law, and nothing in
this subsection shall be construed to deny, abrogate, impair,
or waive any such common law or statutory right or remedy.
Any payments required to be made by the State pursuant to
this subsection (c) are expressly subordinated to the payment
of the principal, interest, and premium, if any, on any bonded
debt obligation of the State or any other State-created entity,

09800SB1544sam003 - 223 - LRB098 07988 JDS 43665 a
either currently outstanding or to be issued, for which the
source of repayment or security thereon is derived directly or
indirectly from tax revenues collected by the State or any
other State-created entity. Payments on such bonded
obligations include any statutory fund transfers or other
prefunding mechanisms or formulas set forth, now or hereafter,
in State law or bond indentures, into debt service funds or
accounts of the State related to such bonded obligations,
consistent with the payment schedules associated with such
obligations.
(Source: P.A. 83-1440.)
(40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
Sec. 2-134. To certify required State contributions and
submit vouchers.
(a) The Board shall certify to the Governor on or before
December 15 of each year through until December 15, 2011 the
amount of the required State contribution to the System for the
next fiscal year and shall specifically identify the System's
projected State normal cost for that fiscal year. The
certification under this subsection (a) shall include a copy of
the actuarial recommendations upon which it is based and shall
specifically identify the System's projected State normal cost
for that fiscal year.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,

09800SB1544sam003 - 224 - LRB098 07988 JDS 43665 a
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions.
On or before January 15, 2013 and every January 15
thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The certification shall include a
copy of the actuarial recommendations upon which it is based
and shall specifically identify the System's projected State
normal cost for that fiscal year. The Board's certification
must note any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
(a-7) 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

09800SB1544sam003 - 225 - LRB098 07988 JDS 43665 a
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.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(b) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month 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). 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 (d) 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

09800SB1544sam003 - 226 - LRB098 07988 JDS 43665 a
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 Section, the difference shall be
paid from the General Revenue Fund under the continuing
appropriation authority provided in Section 1.1 of the State
Pension Funds Continuing Appropriation Act.
(c) The full amount of any annual appropriation for the
System for State fiscal year 1995 shall be transferred and made
available to the System at the beginning of that fiscal year at
the request of the Board. Any excess funds remaining at the end
of any fiscal year from appropriations shall be retained by the
System as a general reserve to meet the System's accrued
liabilities.
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
97-694, eff. 6-18-12.)
(40 ILCS 5/2-162)
Sec. 2-162. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for

09800SB1544sam003 - 227 - LRB098 07988 JDS 43665 a
any benefit under this Article, that results from an amendment
to this Code that takes effect after the effective date of this
amendatory Act of the 94th General Assembly. "New benefit
increase", however, does not include any benefit increase
resulting from the changes made to this Article by this
amendatory Act of the 98th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under

09800SB1544sam003 - 228 - LRB098 07988 JDS 43665 a
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
Section B-35. If and only if any of the changes made by
Part A of this Act to provisions in Article 14 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)

09800SB1544sam003 - 229 - LRB098 07988 JDS 43665 a
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Illinois Pension Code is amended by
changing Sections 14-103.10, 14-114, 14-132, 14-133,
14-135.08, and 14-152.1 and by adding Sections 14-103.40,
14-103.41, 14-103.42, and 14-106.5 as follows:
(40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
Sec. 14-103.10. Compensation.
(a) For periods of service prior to January 1, 1978, the
full rate of salary or wages payable to an employee for
personal services performed if he worked the full normal
working period for his position, subject to the following
maximum amounts: (1) prior to July 1, 1951, $400 per month or
$4,800 per year; (2) between July 1, 1951 and June 30, 1957
inclusive, $625 per month or $7,500 per year; (3) beginning
July 1, 1957, no limitation.
In the case of service of an employee in a position
involving part-time employment, compensation shall be
determined according to the employees' earnings record.
(b) For periods of service on and after January 1, 1978,
all remuneration for personal services performed defined as
"wages" under the Social Security Enabling Act, including that
part of such remuneration which is in excess of any maximum
limitation provided in such Act, and including any benefits

09800SB1544sam003 - 230 - LRB098 07988 JDS 43665 a
received by an employee under a sick pay plan in effect before
January 1, 1981, but excluding lump sum salary payments:
(1) for vacation,
(2) for accumulated unused sick leave,
(3) upon discharge or dismissal,
(4) for approved holidays.
(c) For periods of service on or after December 16, 1978,
compensation also includes any benefits, other than lump sum
salary payments made at termination of employment, which an
employee receives or is eligible to receive under a sick pay
plan authorized by law.
(d) For periods of service after September 30, 1985,
compensation also includes any remuneration for personal
services not included as "wages" under the Social Security
Enabling Act, which is deducted for purposes of participation
in a program established pursuant to Section 125 of the
Internal Revenue Code or its successor laws.
(e) For members for which Section 1-160 applies for periods
of service on and after January 1, 2011, all remuneration for
personal services performed defined as "wages" under the Social
Security Enabling Act, excluding remuneration that is in excess
of the annual earnings, salary, or wages of a member or
participant, as provided in subsection (b-5) of Section 1-160,
but including any benefits received by an employee under a sick
pay plan in effect before January 1, 1981. Compensation shall
exclude lump sum salary payments:

09800SB1544sam003 - 231 - LRB098 07988 JDS 43665 a
(1) for vacation;
(2) for accumulated unused sick leave;
(3) upon discharge or dismissal; and
(4) for approved holidays.
(f) Notwithstanding any other provision of this Section,
"compensation" does not include any future increase in income
offered by a department under this Article pursuant to the
requirements of subsection (c) of Section 14-106.5 that is
accepted by a Tier I employee, or a Tier I retiree returning to
active service, who has made an election under paragraph (2) of
subsection (a) or (a-5) of Section 14-106.5.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/14-103.40 new)
Sec. 14-103.40. Tier I employee. "Tier I employee": An
employee under this Article who first became a member or
participant before January 1, 2011 under any reciprocal
retirement system or pension fund established under this Code
other than a retirement system or pension fund established
under Article 2, 3, 4, 5, 6, or 18 of this Code.
(40 ILCS 5/14-103.41 new)
Sec. 14-103.41. Tier I retiree. "Tier I retiree": A former
Tier I employee who is receiving a retirement annuity.
(40 ILCS 5/14-103.42 new)

09800SB1544sam003 - 232 - LRB098 07988 JDS 43665 a
Sec. 14-103.42. Future increase in income. "Future
increase in income": Any increase in income in any form offered
by a department to an employee under this Article after the end
of the election period in Section 14-106.5 that would qualify
as "compensation", as defined in Section 14-103.10, but for the
fact that the department offered the increase in income to the
employee on the condition that it not qualify as compensation
and the employee accepted the increase in income subject to
that condition. The term "future increase in income" does not
include an increase in income in any form that is paid to a
Tier I employee under an employment contract or collective
bargaining agreement that is in effect on the effective date of
this Section but does include an increase in income in any form
pursuant to an extension, amendment, or renewal of any such
employment contract or collective bargaining agreement on or
after the effective date of this amendatory Act of the 98th
General Assembly.
(40 ILCS 5/14-106.5 new)
Sec. 14-106.5. Election by Tier I employees and Tier I
retirees.
(a) Each Tier I employee shall make an irrevocable election
either:
(1) to agree to the following:
(i) to have the amount of the automatic annual
increases in his or her retirement annuity that are

09800SB1544sam003 - 233 - LRB098 07988 JDS 43665 a
otherwise provided for in this Article calculated,
instead, as provided in subsection (a-1) of Section
14-114; and
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (a-2) of Section 14-114; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each Tier I employee no earlier than 6 months after the
effective date of this Section and no later than 11 months
after the effective date of this Section, except that:
(i) a person who becomes a Tier I employee under this
Article later than 6 months after the effective date of
this Section must make the election under this subsection
(a) within 60 days after becoming a Tier I employee;
(ii) a person who returns to active service as a Tier I
employee under this Article later than 6 months after the
effective date of this Section and has not yet made an
election under this Section must make the election under
this subsection (a) within 60 days after returning to
active service as a Tier I employee; and
(iii) a person who made the election under subsection
(a-5) as a Tier I retiree remains bound by that election
and shall not make a later election under this subsection
(a).

09800SB1544sam003 - 234 - LRB098 07988 JDS 43665 a
If a Tier I employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) Each Tier I retiree shall make an irrevocable
election either:
(1) to agree to the following:
(i) to have the amount of the automatic annual
increases in his or her retirement annuity that are
otherwise provided for in this Article calculated,
instead, as provided in subsection (a-1) of Section
14-114; and
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (a-2) of Section 14-114; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection.
The election required under this subsection (a-5) shall be
made by each Tier I retiree no earlier than 6 months after the
effective date of this Section and no later than 11 months
after the effective date of this Section, except that:
(i) a person who becomes a Tier I retiree under this
Article later than 6 months after the effective date of
this Section must make the election under this subsection
(a-5) within 60 days after becoming a Tier I retiree; and
(ii) a person who made the election under subsection

09800SB1544sam003 - 235 - LRB098 07988 JDS 43665 a
(a) as a Tier I employee remains bound by that election and
shall not make a later election under this subsection
(a-5).
If a Tier I retiree fails for any reason to make a required
election under this subsection within the time specified, then
the Tier I retiree shall be deemed to have made the election
under paragraph (2) of this subsection.
(a-10) All elections under subsection (a) or (a-5) that are
made or deemed to be made within 11 months after the effective
date of this Section shall take effect 12 months after the
effective date of this Section. Elections that are made or
deemed to be made more than 11 months after the effective date
of this Section shall take effect on the first day of the month
following the month in which the election is made or deemed to
be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 98th General Assembly for making the
election under paragraph (1) of subsection (a) of this Section,
any future increases in income offered by a department under
this Article to a Tier I employee who has made the election
under paragraph (1) of subsection (a) of this Section shall be
offered expressly and irrevocably as constituting compensation
under Section 14-103.10. In addition, a Tier I employee who has
made the election under paragraph (1) of subsection (a) of this
Section shall receive the right to also participate in the
optional cash balance plan established under Section 1-162.

09800SB1544sam003 - 236 - LRB098 07988 JDS 43665 a
As adequate and legal consideration provided under this
amendatory Act of the 98th General Assembly for making the
election under paragraph (1) of subsection (a-5) of this
Section, any future increases in income offered by a department
under this Article to a Tier I retiree who returns to active
service after having made the election under paragraph (1) of
subsection (a-5) of this Section shall be offered expressly and
irrevocably as constituting compensation under Section
14-103.10. In addition, a Tier I retiree who returns to active
service and has made the election under paragraph (1) of
subsection (a) of this Section shall receive the right to also
participate in the optional cash balance plan established under
Section 1-162.
(c) A Tier I employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to items (i) and (ii) set forth in paragraph (1) of
subsection (a) of this Section. However, any future increases
in income offered by a department under this Article to a Tier
I employee who has made the election under paragraph (2) of
subsection (a) of this Section shall be offered by the
department expressly and irrevocably as not constituting
compensation under Section 14-103.10, and the employee may not
accept any future increase in income that is offered in
violation of this requirement. In addition, a Tier I employee
who has made the election under paragraph (2) of subsection (a)
of this Section shall not receive the right to participate in

09800SB1544sam003 - 237 - LRB098 07988 JDS 43665 a
the optional cash balance plan established under Section 1-162.
A Tier I retiree who makes the election under paragraph (2)
of subsection (a-5) of this Section shall not be subject to
items (i) and (ii) set forth in paragraph (1) of subsection
(a-5) of this Section. However, any future increases in income
offered by a department under this Article to a Tier I retiree
who returns to active service and has made the election under
paragraph (2) of subsection (a-5) of this Section shall be
offered by the department expressly and irrevocably as not
constituting compensation under Section 14-103.10, and the
employee may not accept any future increase in income that is
offered in violation of this requirement. In addition, a Tier I
retiree who returns to active service and has made the election
under paragraph (2) of subsection (a) of this Section shall not
receive the right to participate in the optional cash balance
plan established under Section 1-162.
(d) The System shall make a good faith effort to contact
each Tier I employee and Tier I retiree subject to this
Section. The System shall mail information describing the
required election to each Tier I employee and Tier I retiree by
United States Postal Service mail to his or her last known
address on file with the System. If the Tier I employee or Tier
I retiree is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details
in a regularly published newsletter or other existing public

09800SB1544sam003 - 238 - LRB098 07988 JDS 43665 a
forum.
Tier I employees and Tier I retirees who are subject to
this Section shall be provided with an election packet
containing information regarding their options, as well as the
forms necessary to make the required election. Upon request,
the System shall offer Tier I employees and Tier I retirees an
opportunity to receive information from the System before
making the required election. The information may consist of
video materials, group presentations, individual consultation
with a member or authorized representative of the System in
person or by telephone or other electronic means, or any
combination of those methods. The System shall not provide
advice or counseling with respect to which election a Tier I
employee or Tier I retiree should make or specific to the legal
or tax circumstances of or consequences to the Tier I employee
or Tier I retiree.
The System shall inform Tier I employees and Tier I
retirees in the election packet required under this subsection
that the Tier I employee or Tier I retiree may also wish to
obtain information and counsel relating to the election
required under this Section from any other available source,
including but not limited to labor organizations and private
counsel.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member, beneficiary,
or annuitant regarding the elections under this Section. The

09800SB1544sam003 - 239 - LRB098 07988 JDS 43665 a
System shall coordinate with the Illinois Department of Central
Management Services and each other retirement system
administering an election in accordance with this amendatory
Act of the 98th General Assembly to provide information
concerning the impact of the election set forth in this
Section.
(e) Notwithstanding any other provision of law, a
department under this Article is required to offer any future
increases in income expressly and irrevocably as not
constituting "compensation" under Section 14-103.10 to any
Tier I employee, or Tier I retiree returning to active service,
who has made an election under paragraph (2) of subsection (a)
or (a-5) of Section 14-106.5. A Tier I employee, or Tier I
retiree returning to active service, who has made an election
under paragraph (2) of subsection (a) or (a-5) of Section
14-106.5 shall not accept any future increase in income that is
offered by an employer under this Article in violation of the
requirement set forth in this subsection.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.
(g) An employee who has made the election under paragraph
(1) of subsection (a) or (a-5) of this Section may elect to
participate in the optional cash balance plan under Section
1-162.
The election to participate in the optional cash balance

09800SB1544sam003 - 240 - LRB098 07988 JDS 43665 a
plan shall be made in writing, in the manner provided by the
applicable retirement system.
(h) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986.
(i) If this Section is determined to be unconstitutional or
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction as applied
to Tier I employees but not as applied to Tier I retirees, then
this Section and the changes deriving from the election
required under this Section shall be null and void as applied
to Tier I employees but shall remain in full effect for Tier I
retirees.
(j) If this Section is determined to be unconstitutional or
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction as applied
to Tier I retirees but not as applied to Tier I employees, then
this Section and the changes deriving from the election
required under this Section shall be null and void as applied
to Tier I retirees but shall remain in full effect for Tier I
employees.
(k) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that

09800SB1544sam003 - 241 - LRB098 07988 JDS 43665 a
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)
Sec. 14-114. Automatic increase in retirement annuity.
(a) Subject to the provisions of subsections (a-1) and
(a-2), any Any person receiving a retirement annuity under this
Article who retires having attained age 60, or who retires
before age 60 having at least 35 years of creditable service,
or who retires on or after January 1, 2001 at an age which,
when added to the number of years of his or her creditable
service, equals at least 85, shall, on January 1 next following
the first full year of retirement, have the amount of the then
fixed and payable monthly retirement annuity increased 3%. Any
person receiving a retirement annuity under this Article who
retires before attainment of age 60 and with less than (i) 35
years of creditable service if retirement is before January 1,
2001, or (ii) the number of years of creditable service which,
when added to the member's age, would equal 85, if retirement
is on or after January 1, 2001, shall have the amount of the
fixed and payable retirement annuity increased by 3% on the
January 1 occurring on or next following (1) attainment of age
60, or (2) the first anniversary of retirement, whichever
occurs later. However, for persons who receive the alternative
retirement annuity under Section 14-110, references in this

09800SB1544sam003 - 242 - LRB098 07988 JDS 43665 a
subsection (a) to attainment of age 60 shall be deemed to refer
to attainment of age 55. For a person receiving early
retirement incentives under Section 14-108.3 whose retirement
annuity began after January 1, 1992 pursuant to an extension
granted under subsection (e) of that Section, the first
anniversary of retirement shall be deemed to be January 1,
1993. For a person who retires on or after June 28, 2001 and on
or before October 1, 2001, and whose retirement annuity is
calculated, in whole or in part, under Section 14-110 or
subsection (g) or (h) of Section 14-108, the first anniversary
of retirement shall be deemed to be January 1, 2002.
On each January 1 following the date of the initial
increase under this subsection, the employee's monthly
retirement annuity shall be increased by an additional 3%.
Beginning January 1, 1990 and except as provided in
subsections (a-1) and (a-2), all automatic annual increases
payable under this Section shall be calculated as a percentage
of the total annuity payable at the time of the increase,
including previous increases granted under this Article.
(a-1) Notwithstanding any other provision of this Article,
for a Tier I employee or Tier I retiree who made the election
under paragraph (1) of subsection (a) or (a-5) of Section
14-106.5, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
that election shall be 3% or one-half of the annual unadjusted
percentage increase, if any, in the Consumer Price Index-U for

09800SB1544sam003 - 243 - LRB098 07988 JDS 43665 a
the 12 months ending with the preceding September, whichever is
less, of the originally granted retirement annuity. For the
purposes of this Section, "Consumer Price Index-U" means the
index published by the Bureau of Labor Statistics of the United
States Department of Labor that measures the average change in
prices of goods and services purchased by all urban consumers,
United States city average, all items, 1982-84 = 100.
(a-2) Notwithstanding any other provision of this Article,
for a Tier I employee or Tier I retiree who made the election
under paragraph (1) of subsection (a) or (a-5) of Section
14-106.5, the monthly retirement annuity shall first be subject
to annual increases on the January 1 occurring on or next after
either the attainment of age 67 or the January 1 occurring on
or next after the fifth anniversary of the annuity start date,
whichever occurs earlier. If on the effective date of the
election under paragraph (1) of subsection (a-5) of Section
14-106.5 a Tier I retiree has already received an annual
increase under this Section but does not yet meet the new
eligibility requirements of this subsection, the annual
increases already received shall continue in force, but no
additional annual increase shall be granted until the Tier I
retiree meets the new eligibility requirements.
(b) The provisions of subsection (a) of this Section shall
be applicable to an employee only if the employee makes the
additional contributions required after December 31, 1969 for
the purpose of the automatic increases for not less than the

09800SB1544sam003 - 244 - LRB098 07988 JDS 43665 a
equivalent of one full year. If an employee becomes an
annuitant before his additional contributions equal one full
year's contributions based on his salary at the date of
retirement, the employee may pay the necessary balance of the
contributions to the system, without interest, and be eligible
for the increasing annuity authorized by this Section.
(c) The provisions of subsection (a) of this Section shall
not be applicable to any annuitant who is on retirement on
December 31, 1969, and thereafter returns to State service,
unless the member has established at least one year of
additional creditable service following reentry into service.
(d) In addition to other increases which may be provided by
this Section, on January 1, 1981 any annuitant who was
receiving a retirement annuity on or before January 1, 1971
shall have his retirement annuity then being paid increased $1
per month for each year of creditable service. On January 1,
1982, any annuitant who began receiving a retirement annuity on
or before January 1, 1977, shall have his retirement annuity
then being paid increased $1 per month for each year of
creditable service.
On January 1, 1987, any annuitant who began receiving a
retirement annuity on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(e) Every person who receives the alternative retirement

09800SB1544sam003 - 245 - LRB098 07988 JDS 43665 a
annuity under Section 14-110 and who is eligible to receive the
3% increase under subsection (a) on January 1, 1986, shall also
receive on that date a one-time increase in retirement annuity
equal to the difference between (1) his actual retirement
annuity on that date, including any increases received under
subsection (a), and (2) the amount of retirement annuity he
would have received on that date if the amendments to
subsection (a) made by Public Act 84-162 had been in effect
since the date of his retirement.
(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
92-651, eff. 7-11-02.)
(40 ILCS 5/14-132) (from Ch. 108 1/2, par. 14-132)
Sec. 14-132. Obligations of State; funding guarantee.
(a) The payment of the required department contributions,
all allowances, annuities, benefits granted under this
Article, and all expenses of administration of the system are
obligations of the State of Illinois to the extent specified in
this Article.
(b) All income of the system shall be credited to a
separate account for this system in the State treasury and
shall be used to pay allowances, annuities, benefits and
administration expense.
(c) If at least 50% of Tier I employees making an election
under Section 14-106.5 before June 1, 2014 choose the option
under paragraph (1) of subsection (a) of that Section, then the

09800SB1544sam003 - 246 - LRB098 07988 JDS 43665 a
State shall be contractually obligated to contribute to the
System in each State fiscal year an amount not less than the
sum required in Section 14-131 as that Section existed prior to
the effective date of this amendatory Act of the 98th General
Assembly notwithstanding the changes made to Section 14-131 by
Part A of this amendatory Act of the 98th General Assembly.
If at least 50% of Tier I employees making an election
under Section 14-106.5 before June 1, 2014 choose the option
under paragraph (1) of subsection (a) of that Section, then the
State shall be contractually obligated for purposes of this
Article 14 only (i) to make the transfer identified in
subsection (c-10) of Section 20 of the Budget Stabilization
Act, (ii) to apportion the amounts transferred pursuant to
subsection (c-10) of Section 20 of the Budget Stabilization Act
in accordance with subsection (b) of Section 25 of that Act,
(iii) to pay the apportioned amounts to the designated
retirement systems, and (iv) not to use the amounts transferred
pursuant to subsection (c-10) of Section 20 of the Budget
Stabilization Act to satisfy any portion of the required State
contributions due under Article 2, 14, 15, 16, or 18 of the
Illinois Pension Code.
The obligations created under this subsection (c) are
contractual obligations protected and enforceable under
Article I, Section 16 and Article XIII, Section 5 of the
Illinois Constitution.
Notwithstanding any other provision of law, if the State

09800SB1544sam003 - 247 - LRB098 07988 JDS 43665 a
fails to pay in a State fiscal year the amount guaranteed under
this subsection, the System may bring a mandamus action in the
Circuit Court of Sangamon County to compel the State to make
that payment, irrespective of other remedies that may be
available to the System. It shall be the mandatory fiduciary
obligation of the Board of the System to bring that action if
the State fails to pay in the fiscal year the amount guaranteed
under this subsection. Before commencing that action, the Board
shall submit a voucher for monthly contributions as required in
Section 14-131. If the State fails to pay a vouchered amount
within 90 days after receiving a voucher for that amount, then
the Board shall submit a written request to the Comptroller
seeking payment of that amount. A copy of the request shall be
filed with the Secretary of State, and the Secretary of State
shall provide copies of the request to the Governor and General
Assembly. No earlier than the 16th day after filing a request
with the Secretary, but no later than the 21st day after filing
that request, the Board may commence such an action in the
Circuit Court. If the Board fails to commence such action on or
before the 21st day after filing the request with the Secretary
of State, then any Tier I employee or Tier I retiree who chose
the option under paragraph (1) of subsection (a) or (a-5) of
Section 14-106.5 may file a mandamus action against the Board
to compel the Board to commence its mandamus action against the
State. This Section constitutes an express waiver of the
State's sovereign immunity. In ordering the State to make the

09800SB1544sam003 - 248 - LRB098 07988 JDS 43665 a
required payment, the court may order a reasonable payment
schedule to enable the State to make the required payment. The
obligations and causes of action created under this subsection
shall be in addition to any other right or remedy otherwise
accorded by common law, or State or federal law, and nothing in
this subsection shall be construed to deny, abrogate, impair,
or waive any such common law or statutory right or remedy.
Any payments required to be made by the State pursuant to
this subsection (c) are expressly subordinated to the payment
of the principal, interest, and premium, if any, on any bonded
debt obligation of the State or any other State-created entity,
either currently outstanding or to be issued, for which the
source of repayment or security thereon is derived directly or
indirectly from tax revenues collected by the State or any
other State-created entity. Payments on such bonded
obligations include any statutory fund transfers or other
prefunding mechanisms or formulas set forth, now or hereafter,
in State law or bond indentures, into debt service funds or
accounts of the State related to such bonded obligations,
consistent with the payment schedules associated with such
obligations.
(Source: P.A. 80-841.)
(40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
Sec. 14-133. Contributions on behalf of members.
(a) Each participating employee shall make contributions

09800SB1544sam003 - 249 - LRB098 07988 JDS 43665 a
to the System, based on the employee's compensation, as
follows:
(1) Covered employees, except as indicated below, 3.5%
for retirement annuity, and 0.5% for a widow or survivors
annuity;
(2) Noncovered employees, except as indicated below,
7% for retirement annuity and 1% for a widow or survivors
annuity;
(3) Noncovered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 1% for a widow or survivors annuity plus the
following amount for retirement annuity: 8.5% through
December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%
in 2004 and thereafter;
(4) Covered employees serving in a position in which
"eligible creditable service" as defined in Section 14-110
may be earned, 0.5% for a widow or survivors annuity plus
the following amount for retirement annuity: 5% through
December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
and thereafter;
(5) Each security employee of the Department of
Corrections or of the Department of Human Services who is a
covered employee, 0.5% for a widow or survivors annuity
plus the following amount for retirement annuity: 5%
through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
in 2004 and thereafter;

09800SB1544sam003 - 250 - LRB098 07988 JDS 43665 a
(6) Each security employee of the Department of
Corrections or of the Department of Human Services who is
not a covered employee, 1% for a widow or survivors annuity
plus the following amount for retirement annuity: 8.5%
through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
11.5% in 2004 and thereafter.
(a-1) In addition to the contributions required under
subsection (a), an employee who elects to participate in the
optional cash balance plan under Section 1-162 shall pay to the
System for the purpose of participating in the optional cash
balance plan an additional contribution of 2% of each payment
of compensation received while he or she is a participant in
the optional cash balance plan. These contributions shall not
be used for the purpose of determining any benefit under this
Article except as provided in the optional cash balance plan.
(b) Contributions shall be in the form of a deduction from
compensation and shall be made notwithstanding that the
compensation paid in cash to the employee shall be reduced
thereby below the minimum prescribed by law or regulation. Each
member is deemed to consent and agree to the deductions from
compensation provided for in this Article, and shall receipt in
full for salary or compensation.
(Source: P.A. 92-14, eff. 6-28-01.)
(40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
Sec. 14-135.08. To certify required State contributions.

09800SB1544sam003 - 251 - LRB098 07988 JDS 43665 a
(a) To certify to the Governor and to each department, on
or before November 15 of each year through until November 15,
2011, the required rate for State contributions to the System
for the next State fiscal year, as determined under subsection
(b) of Section 14-131. The certification to the Governor under
this subsection (a) shall include a copy of the actuarial
recommendations upon which the rate is based and shall
specifically identify the System's projected State normal cost
for that fiscal year.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions.
On or before January 15, 2013 and each January 15
thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The certification shall include a
copy of the actuarial recommendations upon which it is based

09800SB1544sam003 - 252 - LRB098 07988 JDS 43665 a
and shall specifically identify the System's projected State
normal cost for that fiscal year. The Board's certification
must note any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
(b) The certifications under subsections (a) and (a-5)
shall include an additional amount necessary to pay all
principal of and interest on those general obligation bonds due
the next fiscal year authorized by Section 7.2(a) of the
General Obligation Bond Act and issued to provide the proceeds
deposited by the State with the System in July 2003,
representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act. For State
fiscal year 2005, the Board shall make a supplemental
certification of the additional amount necessary to pay all
principal of and interest on those general obligation bonds due
in State fiscal years 2004 and 2005 authorized by Section
7.2(a) of the General Obligation Bond Act and issued to provide
the proceeds deposited by the State with the System in July
2003, representing deposits other than amounts reserved under
Section 7.2(c) of the General Obligation Bond Act, as soon as
practical after the effective date of this amendatory Act of
the 93rd General Assembly.
On or before May 1, 2004, the Board shall recalculate and

09800SB1544sam003 - 253 - LRB098 07988 JDS 43665 a
recertify to the Governor and to each department the amount of
the required State contribution to the System and the required
rates for State contributions 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 and to each department the amount of
the required State contribution to the System and the required
rates for State contributions 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.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor and to each department the amount of
the required State contribution to the System for State fiscal
year 2011, applying the changes made by Public Act 96-889 to
the System's assets and liabilities as of June 30, 2009 as
though Public Act 96-889 was approved on that date.
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
97-694, eff. 6-18-12.)
(40 ILCS 5/14-152.1)
Sec. 14-152.1. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means

09800SB1544sam003 - 254 - LRB098 07988 JDS 43665 a
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to this Article or Article 1 by Public Act
96-37 or this amendatory Act of the 98th 96th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null

09800SB1544sam003 - 255 - LRB098 07988 JDS 43665 a
and void. If the Public Pension Division determines that the
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 96-37, eff. 7-13-09.)
Section B-40. If and only if any of the changes made by

09800SB1544sam003 - 256 - LRB098 07988 JDS 43665 a
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Illinois Pension Code is amended by
changing Sections 15-111, 15-136, 15-156, 15-157, 15-163,
15-165, and 15-198 and by adding Sections 15-108.1, 15-108.2,
15-112.1, and 15-132.9 as follows:
(40 ILCS 5/15-108.1 new)
Sec. 15-108.1. Tier I employee. "Tier I employee": An
employee under this Article, other than a participant in the
self-managed plan under Section 15-158.2, who first became a
member or participant before January 1, 2011 under any
reciprocal retirement system or pension fund established under
this Code other than a retirement system or pension fund
established under Article 2, 3, 4, 5, 6, or 18 of this Code.
(40 ILCS 5/15-108.2 new)
Sec. 15-108.2. Tier I retiree."Tier I retiree": A former
Tier I employee who is receiving a retirement annuity.
(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
Sec. 15-111. Earnings. "Earnings": An amount paid for
personal services equal to the sum of the basic compensation

09800SB1544sam003 - 257 - LRB098 07988 JDS 43665 a
plus extra compensation for summer teaching, overtime or other
extra service. For periods for which an employee receives
service credit under subsection (c) of Section 15-113.1 or
Section 15-113.2, earnings are equal to the basic compensation
on which contributions are paid by the employee during such
periods. Compensation for employment which is irregular,
intermittent and temporary shall not be considered earnings,
unless the participant is also receiving earnings from the
employer as an employee under Section 15-107.
With respect to transition pay paid by the University of
Illinois to a person who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department:
(1) "Earnings" includes transition pay paid to the
employee on or after the effective date of this amendatory
Act of the 91st General Assembly.
(2) "Earnings" includes transition pay paid to the
employee before the effective date of this amendatory Act
of the 91st General Assembly only if (i) employee
contributions under Section 15-157 have been withheld from
that transition pay or (ii) the employee pays to the System
before January 1, 2001 an amount representing employee
contributions under Section 15-157 on that transition pay.
Employee contributions under item (ii) may be paid in a
lump sum, by withholding from additional transition pay

09800SB1544sam003 - 258 - LRB098 07988 JDS 43665 a
accruing before January 1, 2001, or in any other manner
approved by the System. Upon payment of the employee
contributions on transition pay, the corresponding
employer contributions become an obligation of the State.
Notwithstanding any other provision of this Section,
"earnings" does not include any future increase in income
offered by an employer under this Article pursuant to the
requirements of subsection (c) of Section 15-132.9 that is
accepted by a Tier I employee, or a Tier I retiree returning to
active service, who has made an election under paragraph (2) of
subsection (a) or (a-5) of Section 15-132.9.
(Source: P.A. 91-887, eff. 7-6-00.)
(40 ILCS 5/15-112.1 new)
Sec. 15-112.1. Future increase in income. "Future increase
in income": Any increase in income in any form offered by an
employer to an employee under this Article after the end of the
election period in Section 15-132.9 that would qualify as
"earnings", as defined in Section 15-111, but for the fact that
the employer offered the increase in income to the employee on
the condition that it not qualify as earnings and the employee
accepted the increase in income subject to that condition. The
term "future increase in income" does not include an increase
in income in any form that is paid to a Tier I employee under an
employment contract or collective bargaining agreement that is
in effect on the effective date of this Section but does

09800SB1544sam003 - 259 - LRB098 07988 JDS 43665 a
include an increase in income in any form pursuant to an
extension, amendment, or renewal of any such employment
contract or collective bargaining agreement on or after the
effective date of this amendatory Act of the 98th General
Assembly.
(40 ILCS 5/15-132.9 new)
Sec. 15-132.9. Election by Tier I employees and Tier I
retirees.
(a) Each Tier I employee shall make an irrevocable election
either:
(1) to agree to the following:
(i) to have the amount of the automatic annual
increases in his or her retirement annuity that are
otherwise provided for in this Article calculated,
instead, as provided in subsection (d-1) of Section
15-136; and
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (d-2) of Section 15-136; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection.
The election required under this subsection (a) shall be
made by each Tier I employee no earlier than 6 months after the
effective date of this Section and no later than 11 months
after the effective date of this Section, except that:

09800SB1544sam003 - 260 - LRB098 07988 JDS 43665 a
(i) a person who becomes a Tier I employee under this
Article later than 6 months after the effective date of
this Section must make the election under this subsection
(a) within 60 days after becoming a Tier I employee;
(ii) a person who returns to active service as a Tier I
employee under this Article later than 6 months after the
effective date of this Section and has not yet made an
election under this Section must make the election under
this subsection (a) within 60 days after returning to
active service as a Tier I employee; and
(iii) a person who made the election under subsection
(a-5) as a Tier I retiree remains bound by that election
and shall not make a later election under this subsection
(a).
If a Tier I employee fails for any reason to make a
required election under this subsection within the time
specified, then the employee shall be deemed to have made the
election under paragraph (2) of this subsection.
(a-5) Each Tier I retiree shall make an irrevocable
election either:
(1) to agree to the following:
(i) to have the amount of the automatic annual
increases in his or her retirement annuity that are
otherwise provided for in this Article calculated,
instead, as provided in subsection (d-1) of Section
15-136; and

09800SB1544sam003 - 261 - LRB098 07988 JDS 43665 a
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (d-2) of Section 15-136; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection.
The election required under this subsection (a-5) shall be
made by each Tier I retiree no earlier than 6 months after the
effective date of this Section and no later than 11 months
after the effective date of this Section, except that:
(i) a person who becomes a Tier I retiree under this
Article later than 6 months after the effective date of
this Section must make the election under this subsection
(a-5) within 60 days after becoming a Tier I retiree; and
(ii) a person who made the election under subsection
(a) as a Tier I employee remains bound by that election and
shall not make a later election under this subsection
(a-5).
If a Tier I retiree fails for any reason to make a required
election under this subsection within the time specified, then
the Tier I retiree shall be deemed to have made the election
under paragraph (2) of this subsection.
(a-10) All elections under subsection (a) or (a-5) that are
made or deemed to be made within 11 months after the effective
date of this Section shall take effect 12 months after the
effective date of this Section. Elections that are made or
deemed to be made more than 11 months after the effective date

09800SB1544sam003 - 262 - LRB098 07988 JDS 43665 a
of this Section shall take effect on the first day of the month
following the month in which the election is made or deemed to
be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 98th General Assembly for making the
election under paragraph (1) of subsection (a) of this Section,
any future increases in income offered by an employer under
this Article to a Tier I employee who has made the election
under paragraph (1) of subsection (a) of this Section shall be
offered expressly and irrevocably as constituting earnings
under Section 15-111. In addition, a Tier I employee who has
made the election under paragraph (1) of subsection (a) of this
Section shall receive the right to also participate in the
optional cash balance plan established under Section 1-162.
As adequate and legal consideration provided under this
amendatory Act of the 98th General Assembly for making the
election under paragraph (1) of subsection (a-5) of this
Section, any future increases in income offered by an employer
under this Article to a Tier I retiree who returns to active
service after having made the election under paragraph (1) of
subsection (a-5) of this Section shall be offered expressly and
irrevocably as constituting earnings under Section 15-111. In
addition, a Tier I retiree who returns to active service and
has made the election under paragraph (1) of subsection (a) of
this Section shall receive the right to also participate in the
optional cash balance plan established under Section 1-162.

09800SB1544sam003 - 263 - LRB098 07988 JDS 43665 a
(c) A Tier I employee who makes the election under
paragraph (2) of subsection (a) of this Section shall not be
subject to items (i) and (ii) set forth in paragraph (1) of
subsection (a) of this Section. However, any future increases
in income offered by an employer under this Article to a Tier I
employee who has made the election under paragraph (2) of
subsection (a) of this Section shall be offered by the employer
expressly and irrevocably as not constituting earnings under
Section 15-111, and the employee may not accept any future
increase in income that is offered in violation of this
requirement. In addition, a Tier I employee who has made the
election under paragraph (2) of subsection (a) of this Section
shall not receive the right to participate in the optional cash
balance plan established under Section 1-162.
A Tier I retiree who makes the election under paragraph (2)
of subsection (a-5) of this Section shall not be subject to
items (i) and (ii) set forth in paragraph (1) of subsection
(a-5) of this Section. However, any future increases in income
offered by an employer under this Article to a Tier I retiree
who returns to active service and has made the election under
paragraph (2) of subsection (a-5) of this Section shall be
offered by the employer expressly and irrevocably as not
constituting earnings under Section 15-111, and the employee
may not accept any future increase in income that is offered in
violation of this requirement. In addition, a Tier I retiree
who returns to active service and has made the election under

09800SB1544sam003 - 264 - LRB098 07988 JDS 43665 a
paragraph (2) of subsection (a) of this Section shall not
receive the right to participate in the optional cash balance
plan established under Section 1-162.
(d) The System shall make a good faith effort to contact
each Tier I employee and Tier I retiree subject to this
Section. The System shall mail information describing the
required election to each Tier I employee and Tier I retiree by
United States Postal Service mail to his or her last known
address on file with the System. If the Tier I employee or Tier
I retiree is not responsive to other means of contact, it is
sufficient for the System to publish the details of any
required elections on its website or to publish those details
in a regularly published newsletter or other existing public
forum.
Tier I employees and Tier I retirees who are subject to
this Section shall be provided with an election packet
containing information regarding their options, as well as the
forms necessary to make the required election. Upon request,
the System shall offer Tier I employees and Tier I retirees an
opportunity to receive information from the System before
making the required election. The information may consist of
video materials, group presentations, individual consultation
with a member or authorized representative of the System in
person or by telephone or other electronic means, or any
combination of those methods. The System shall not provide
advice or counseling with respect to which election a Tier I

09800SB1544sam003 - 265 - LRB098 07988 JDS 43665 a
employee or Tier I retiree should make or specific to the legal
or tax circumstances of or consequences to the Tier I employee
or Tier I retiree.
The System shall inform Tier I employees and Tier I
retirees in the election packet required under this subsection
that the Tier I employee or Tier I retiree may also wish to
obtain information and counsel relating to the election
required under this Section from any other available source,
including but not limited to labor organizations and private
counsel.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member, beneficiary,
or annuitant regarding the elections under this Section. The
System shall coordinate with the Illinois Department of Central
Management Services and each other retirement system
administering an election in accordance with this amendatory
Act of the 98th General Assembly to provide information
concerning the impact of the election set forth in this
Section.
(e) Notwithstanding any other provision of law, an employer
under this Article is required to offer any future increases in
income expressly and irrevocably as not constituting
"earnings" under Section 15-111 to any Tier I employee, or Tier
I retiree returning to active service, who has made an election
under paragraph (2) of subsection (a) or (a-5) of this Section.
A Tier I employee, or Tier I retiree returning to active

09800SB1544sam003 - 266 - LRB098 07988 JDS 43665 a
service, who has made an election under paragraph (2) of
subsection (a) or (a-5) of this Section shall not accept any
future increase in income that is offered by an employer under
this Article in violation of the requirement set forth in this
subsection.
(f) A member's election under this Section is not a
prohibited election under subdivision (j)(1) of Section 1-119
of this Code.
(g) An employee who has made the election under paragraph
(1) of subsection (a) or (a-5) of this Section may elect to
participate in the optional cash balance plan under Section
1-162.
The election to participate in the optional cash balance
plan shall be made in writing, in the manner provided by the
applicable retirement system.
(h) No provision of this Section shall be interpreted in a
way that would cause the System to cease to be a qualified plan
under Section 401(a) of the Internal Revenue Code of 1986.
(i) If this Section is determined to be unconstitutional or
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction as applied
to Tier I employees but not as applied to Tier I retirees, then
this Section and the changes deriving from the election
required under this Section shall be null and void as applied
to Tier I employees but shall remain in full effect for Tier I
retirees.

09800SB1544sam003 - 267 - LRB098 07988 JDS 43665 a
(j) If this Section is determined to be unconstitutional or
otherwise invalid by a final unappealable decision of an
Illinois court or a court of competent jurisdiction as applied
to Tier I retirees but not as applied to Tier I employees, then
this Section and the changes deriving from the election
required under this Section shall be null and void as applied
to Tier I retirees but shall remain in full effect for Tier I
employees.
(k) If an election created by this amendatory Act in any
other Article of this Code or any change deriving from that
election is determined to be unconstitutional or otherwise
invalid by a final unappealable decision of an Illinois court
or a court of competent jurisdiction, the invalidity of that
provision shall not in any way affect the validity of this
Section or the changes deriving from the election required
under this Section.
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable

09800SB1544sam003 - 268 - LRB098 07988 JDS 43665 a
and provides the largest annuity:
Rule 1: The retirement annuity shall be 1.67% of final rate
of earnings for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.
Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the effective rate
of interest in effect at the time the retirement annuity
begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins;
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.

09800SB1544sam003 - 269 - LRB098 07988 JDS 43665 a
With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his
or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least

09800SB1544sam003 - 270 - LRB098 07988 JDS 43665 a
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or
more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity
for all other service shall be computed under Rule 1.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is an

09800SB1544sam003 - 271 - LRB098 07988 JDS 43665 a
employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of
the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee of
the University of Illinois in a position other than police
officer or firefighter, from the date of that transfer
until the employee's next termination of service with the
University of Illinois.
Rule 5: The retirement annuity of a participant who elected
early retirement under the provisions of Section 15-136.2 and
who, on or before February 16, 1995, brought administrative
proceedings pursuant to the administrative rules adopted by the
System to challenge the calculation of his or her retirement
annuity shall be the sum of the following, determined from
amounts credited to the participant in accordance with the
actuarial tables and the prescribed rate of interest in effect
at the time the retirement annuity begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins; and
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an

09800SB1544sam003 - 272 - LRB098 07988 JDS 43665 a
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) an annuity which can be provided on an
actuarially equivalent basis from the employee
contribution for early retirement under Section 15-136.2,
and an annuity from employer contributions of an amount
equal to that which can be provided on an actuarially
equivalent basis from the employee contribution for early
retirement under Section 15-136.2.
In no event shall a retirement annuity under this Rule 5 be
lower than the amount obtained by adding (1) the monthly amount
obtained by dividing the combined employee and employer
contributions made under Section 15-136.2 by the System's
annuity factor for the age of the participant at the beginning
of the annuity payment period and (2) the amount equal to the
participant's annuity if calculated under Rule 1, reduced under
Section 15-136(b) as if no contributions had been made under
Section 15-136.2.
With respect to a participant who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate

09800SB1544sam003 - 273 - LRB098 07988 JDS 43665 a
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except as
provided in clause (iii) of this Rule 5, neither an employee
nor employer contribution for early retirement under Section
15-136.2, nor any other employer contribution, shall be used in
the calculation of the amount of a retirement annuity under
this Rule 5.
The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General Assembly
in recognition that the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. might be deemed to give some right to the
plaintiff in that case. The changes made by Section 25 of this
amendatory Act of the 91st General Assembly are a legislative
implementation of the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. with respect to that plaintiff.
The changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
(b) The retirement annuity provided under Rules 1 and 3

09800SB1544sam003 - 274 - LRB098 07988 JDS 43665 a
above shall be reduced by 1/2 of 1% for each month the
participant is under age 60 at the time of retirement. However,
this reduction shall not apply in the following cases:
(1) For a disabled participant whose disability
benefits have been discontinued because he or she has
exhausted eligibility for disability benefits under clause
(6) of Section 15-152;
(2) For a participant who has at least the number of
years of service required to retire at any age under
subsection (a) of Section 15-135; or
(3) For that portion of a retirement annuity which has
been provided on account of service of the participant
during periods when he or she performed the duties of a
police officer or firefighter, if these duties were
performed for at least 5 years immediately preceding the
date the retirement annuity is to begin.
(c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
(d) Subject to the provisions of subsections (d-1) and
(d-2), an An annuitant whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in his

09800SB1544sam003 - 275 - LRB098 07988 JDS 43665 a
or her retirement annuity as follows:
Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, Rule 4, or Rule 5, contained in this Section,
multiplied by the number of full months which elapsed from the
date the retirement annuity payments began to January 1, 1972,
plus 0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during
the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
this Section. The change made under this subsection by P.A.
81-970 is effective January 1, 1980 and applies to each
annuitant whose status as an employee terminates before or
after that date.
Beginning January 1, 1990, and except as provided in
subsections (d-1) and (d-2), all automatic annual increases
payable under this Section shall be calculated as a percentage

09800SB1544sam003 - 276 - LRB098 07988 JDS 43665 a
of the total annuity payable at the time of the increase,
including all increases previously granted under this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard to
whether status as an employee terminated before that date.
(d-1) Notwithstanding any other provision of this Article,
for a Tier I employee or Tier I retiree who made the election
under paragraph (1) of subsection (a) or (a-5) of Section
15-132.9, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
that election shall be 3% or one-half of the annual unadjusted
percentage increase, if any, in the Consumer Price Index-U for
the 12 months ending with the preceding September, whichever is
less, of the originally granted retirement annuity. For the
purposes of this Section, "Consumer Price Index-U" means the
index published by the Bureau of Labor Statistics of the United
States Department of Labor that measures the average change in
prices of goods and services purchased by all urban consumers,
United States city average, all items, 1982-84 = 100.
(d-2) Notwithstanding any other provision of this Article,
for a Tier I employee or Tier I retiree who made the election
under paragraph (1) of subsection (a) or (a-5) of Section
15-132.9, the monthly retirement annuity shall first be subject
to annual increases on the January 1 occurring on or next after
either the attainment of age 67 or the January 1 occurring on
or next after the fifth anniversary of the annuity start date,

09800SB1544sam003 - 277 - LRB098 07988 JDS 43665 a
whichever occurs earlier. If on the effective date of the
election under paragraph (1) of subsection (a-5) of Section
15-132.9 a Tier I retiree has already received an annual
increase under this Section but does not yet meet the new
eligibility requirements of this subsection, the annual
increases already received shall continue in force, but no
additional annual increase shall be granted until the Tier I
retiree meets the new eligibility requirements.
(e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987, or
the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
(f) A participant is entitled to such additional annuity as

09800SB1544sam003 - 278 - LRB098 07988 JDS 43665 a
may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
(g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in whole
or in part to an employer, and (2) a participant transfers
employment from such governmental unit to such employer within
6 months after the transfer of the function, and (3) the sum of
(A) the annuity payable to the participant under Rule 1, 2, or
3 of this Section (B) all proportional annuities payable to the
participant by all other retirement systems covered by Article
20, and (C) the initial primary insurance amount to which the
participant is entitled under the Social Security Act, is less
than the retirement annuity which would have been payable if
all of the participant's pension credits validated under
Section 20-109 had been validated under this system, a
supplemental annuity equal to the difference in such amounts
shall be payable to the participant.
(h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before

09800SB1544sam003 - 279 - LRB098 07988 JDS 43665 a
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.
(i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
(40 ILCS 5/15-156) (from Ch. 108 1/2, par. 15-156)
Sec. 15-156. Obligations of State; funding guarantees.
(a) The payment of (1) the required State contributions,
(2) all benefits granted under this system and (3) all expenses
in connection with the administration and operation thereof are
obligations of the State of Illinois to the extent specified in
this Article. The accumulated employee normal, additional and
survivors insurance contributions credited to the accounts of
active and inactive participants shall not be used to pay the
State's share of the obligations.
(b) If at least 50% of Tier I employees making an election
under Section 15-132.9 before June 1, 2014 choose the option
under paragraph (1) of subsection (a) of that Section, then the
State shall be contractually obligated to contribute to the
System in each State fiscal year an amount not less than the
sum required in Section 15-155 as that Section existed prior to

09800SB1544sam003 - 280 - LRB098 07988 JDS 43665 a
the effective date of this amendatory Act of the 98th General
Assembly notwithstanding the changes made to Section 15-155 by
Part A of this amendatory Act of the 98th General Assembly.
If at least 50% of Tier I employees making an election
under Section 15-132.9 before June 1, 2014 choose the option
under paragraph (1) of subsection (a) of that Section, then the
State shall be contractually obligated for purposes of this
Article 15 only (i) to make the transfer identified in
subsection (c-10) of Section 20 of the Budget Stabilization
Act, (ii) to apportion the amounts transferred pursuant to
subsection (c-10) of Section 20 of the Budget Stabilization Act
in accordance with subsection (b) of Section 25 of that Act,
(iii) to pay the apportioned amounts to the designated
retirement systems, and (iv) not to use the amounts transferred
pursuant to subsection (c-10) of Section 20 of the Budget
Stabilization Act to satisfy any portion of the required State
contributions due under Article 2, 14, 15, 16, or 18 of the
Illinois Pension Code.
The obligations created under this subsection (b) are
contractual obligations protected and enforceable under
Article I, Section 16 and Article XIII, Section 5 of the
Illinois Constitution.
Notwithstanding any other provision of law, if the State
fails to pay in a State fiscal year the amount guaranteed under
this subsection, the System may bring a mandamus action in the
Circuit Court of Sangamon or Champaign County to compel the

09800SB1544sam003 - 281 - LRB098 07988 JDS 43665 a
State to make that payment, irrespective of other remedies that
may be available to the System. It shall be the mandatory
fiduciary obligation of the Board of the System to bring that
action if the State fails to pay in the fiscal year the amount
guaranteed under this subsection. Before commencing that
action, the Board shall submit a voucher for monthly
contributions as required in Section 15-155. If the State fails
to pay a vouchered amount within 90 days after receiving a
voucher for that amount, then the Board shall submit a written
request to the Comptroller seeking payment of that amount. A
copy of the request shall be filed with the Secretary of State,
and the Secretary of State shall provide copies of the request
to the Governor and General Assembly. No earlier than the 16th
day after filing a request with the Secretary, but no later
than the 21st day after filing that request, the Board may
commence such an action in the Circuit Court. If the Board
fails to commence such action on or before the 21st day after
filing the request with the Secretary of State, then any Tier I
employee or Tier I retiree who chose the option under paragraph
(1) of subsection (a) or (a-5) of Section 15-132.9 may file a
mandamus action against the Board to compel the Board to
commence its mandamus action against the State. This Section
constitutes an express waiver of the State's sovereign
immunity. In ordering the State to make the required payment,
the court may order a reasonable payment schedule to enable the
State to make the required payment. The obligations and causes

09800SB1544sam003 - 282 - LRB098 07988 JDS 43665 a
of action created under this subsection shall be in addition to
any other right or remedy otherwise accorded by common law, or
State or federal law, and nothing in this subsection shall be
construed to deny, abrogate, impair, or waive any such common
law or statutory right or remedy.
Any payments required to be made by the State pursuant to
this subsection (b) are expressly subordinated to the payment
of the principal, interest, and premium, if any, on any bonded
debt obligation of the State or any other State-created entity,
either currently outstanding or to be issued, for which the
source of repayment or security thereon is derived directly or
indirectly from tax revenues collected by the State or any
other State-created entity. Payments on such bonded
obligations include any statutory fund transfers or other
prefunding mechanisms or formulas set forth, now or hereafter,
in State law or bond indentures, into debt service funds or
accounts of the State related to such bonded obligations,
consistent with the payment schedules associated with such
obligations.
(Source: P.A. 83-1440.)
(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
Sec. 15-157. Employee Contributions.
(a) Each participating employee shall make contributions
towards the retirement benefits payable under the retirement
program applicable to the employee from each payment of

09800SB1544sam003 - 283 - LRB098 07988 JDS 43665 a
earnings applicable to employment under this system on and
after the date of becoming a participant as follows: Prior to
September 1, 1949, 3 1/2% of earnings; from September 1, 1949
to August 31, 1955, 5%; from September 1, 1955 to August 31,
1969, 6%; from September 1, 1969, 6 1/2%. These contributions
are to be considered as normal contributions for purposes of
this Article.
Each participant who is a police officer or firefighter
shall make normal contributions of 8% of each payment of
earnings applicable to employment as a police officer or
firefighter under this system on or after September 1, 1981,
unless he or she files with the board within 60 days after the
effective date of this amendatory Act of 1991 or 60 days after
the board receives notice that he or she is employed as a
police officer or firefighter, whichever is later, a written
notice waiving the retirement formula provided by Rule 4 of
Section 15-136. This waiver shall be irrevocable. If a
participant had met the conditions set forth in Section
15-132.1 prior to the effective date of this amendatory Act of
1991 but failed to make the additional normal contributions
required by this paragraph, he or she may elect to pay the
additional contributions plus compound interest at the
effective rate. If such payment is received by the board, the
service shall be considered as police officer service in
calculating the retirement annuity under Rule 4 of Section
15-136. While performing service described in clause (i) or

09800SB1544sam003 - 284 - LRB098 07988 JDS 43665 a
(ii) of Rule 4 of Section 15-136, a participating employee
shall be deemed to be employed as a firefighter for the purpose
of determining the rate of employee contributions under this
Section.
(a-1) In addition to the contributions required under
either subsections (a), (b), and (c) or subsection (a-1), an
employee who elects to participate in the optional cash balance
plan under Section 1-162 shall pay to the System for the
purpose of participating in the optional cash balance plan a
contribution of 2% of each payment of earnings received while
he or she is a participant in the optional cash balance plan.
These contributions shall not be used for the purpose of
determining any benefit under this Article except as provided
in the optional cash balance plan.
(b) Starting September 1, 1969, each participating
employee shall make additional contributions of 1/2 of 1% of
earnings to finance a portion of the cost of the annual
increases in retirement annuity provided under Section 15-136,
except that with respect to participants in the self-managed
plan this additional contribution shall be used to finance the
benefits obtained under that retirement program.
(c) In addition to the amounts described in subsections (a)
and (b) of this Section, each participating employee shall make
contributions of 1% of earnings applicable under this system on
and after August 1, 1959. The contributions made under this
subsection (c) shall be considered as survivor's insurance

09800SB1544sam003 - 285 - LRB098 07988 JDS 43665 a
contributions for purposes of this Article if the employee is
covered under the traditional benefit package, and such
contributions shall be considered as additional contributions
for purposes of this Article if the employee is participating
in the self-managed plan or has elected to participate in the
portable benefit package and has completed the applicable
one-year waiting period. Contributions in excess of $80 during
any fiscal year beginning before August 31, 1969 and in excess
of $120 during any fiscal year thereafter until September 1,
1971 shall be considered as additional contributions for
purposes of this Article.
(d) If the board by board rule so permits and subject to
such conditions and limitations as may be specified in its
rules, a participant may make other additional contributions of
such percentage of earnings or amounts as the participant shall
elect in a written notice thereof received by the board.
(e) That fraction of a participant's total accumulated
normal contributions, the numerator of which is equal to the
number of years of service in excess of that which is required
to qualify for the maximum retirement annuity, and the
denominator of which is equal to the total service of the
participant, shall be considered as accumulated additional
contributions. The determination of the applicable maximum
annuity and the adjustment in contributions required by this
provision shall be made as of the date of the participant's
retirement.

09800SB1544sam003 - 286 - LRB098 07988 JDS 43665 a
(f) Notwithstanding the foregoing, a participating
employee shall not be required to make contributions under this
Section after the date upon which continuance of such
contributions would otherwise cause his or her retirement
annuity to exceed the maximum retirement annuity as specified
in clause (1) of subsection (c) of Section 15-136.
(g) A participating employee may make contributions for the
purchase of service credit under this Article.
(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
(40 ILCS 5/15-163) (from Ch. 108 1/2, par. 15-163)
Sec. 15-163. To consider applications and authorize
payments.
To consider and pass on all certifications of employment
and applications for annuities and benefits; to authorize the
granting of annuities and benefits; and to limit or suspend any
payment or payments, all in accordance with this Article.
(Source: Laws 1963, p. 161.)
(40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
Sec. 15-165. To certify amounts and submit vouchers.
(a) The Board shall certify to the Governor on or before
November 15 of each year through until November 15, 2011 the
appropriation required from State funds for the purposes of

09800SB1544sam003 - 287 - LRB098 07988 JDS 43665 a
this System for the following fiscal year. The certification
under this subsection (a) shall include a copy of the actuarial
recommendations upon which it is based and shall specifically
identify the System's projected State normal cost for that
fiscal year and the projected State cost for the self-managed
plan for that fiscal year.
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.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification

09800SB1544sam003 - 288 - LRB098 07988 JDS 43665 a
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions.
On or before January 15, 2013 and each January 15
thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The certification shall include a
copy of the actuarial recommendations upon which it is based
and shall specifically identify the System's projected State
normal cost for that fiscal year and the projected State cost
for the self-managed plan for that fiscal year. The Board's
certification must note, in a written response to the State
Actuary, any deviations from the State Actuary's recommended
changes, the reason or reasons for not following the State
Actuary's recommended changes, and the fiscal impact of not
following the State Actuary's recommended changes on the
required State contribution.
(b) The Board shall certify to the State Comptroller or
employer, as the case may be, from time to time, by its
president and secretary, with its seal attached, the amounts

09800SB1544sam003 - 289 - LRB098 07988 JDS 43665 a
payable to the System from the various funds.
(c) Beginning in State fiscal year 1996, on or as soon as
possible after the 15th day of each month 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). 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 (b) 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 Section, the difference
shall be paid from the General Revenue Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(d) So long as the payments received are the full amount
lawfully vouchered under this Section, payments received by the

09800SB1544sam003 - 290 - LRB098 07988 JDS 43665 a
System under this Section shall be applied first toward the
employer contribution to the self-managed plan established
under Section 15-158.2. Payments shall be applied second toward
the employer's portion of the normal costs of the System, as
defined in subsection (f) of Section 15-155. The balance shall
be applied toward the unfunded actuarial liabilities of the
System.
(e) In the event that the System does not receive, as a
result of legislative enactment or otherwise, payments
sufficient to fully fund the employer contribution to the
self-managed plan established under Section 15-158.2 and to
fully fund that portion of the employer's portion of the normal
costs of the System, as calculated in accordance with Section
15-155(a-1), then any payments received shall be applied
proportionately to the optional retirement program established
under Section 15-158.2 and to the employer's portion of the
normal costs of the System, as calculated in accordance with
Section 15-155(a-1).
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
97-694, eff. 6-18-12.)
(40 ILCS 5/15-198)
Sec. 15-198. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this

09800SB1544sam003 - 291 - LRB098 07988 JDS 43665 a
Article, or an expansion of the conditions of eligibility for
any benefit under this Article or Article 1, that results from
an amendment to this Code that takes effect after the effective
date of this amendatory Act of the 94th General Assembly. "New
benefit increase", however, does not include any benefit
increase resulting from the changes made to this Article or
Article 1 by this amendatory Act of the 98th General Assembly.
(b) Notwithstanding any other provision of this Code or any
subsequent amendment to this Code, every new benefit increase
is subject to this Section and shall be deemed to be granted
only in conformance with and contingent upon compliance with
the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of the
Department of Financial and Professional Regulation. A new
benefit increase created by a Public Act that does not include
the additional funding required under this subsection is null
and void. If the Public Pension Division determines that the

09800SB1544sam003 - 292 - LRB098 07988 JDS 43665 a
additional funding provided for a new benefit increase under
this subsection is or has become inadequate, it may so certify
to the Governor and the State Comptroller and, in the absence
of corrective action by the General Assembly, the new benefit
increase shall expire at the end of the fiscal year in which
the certification is made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including without limitation a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 94-4, eff. 6-1-05.)
Section B-50. If and only if Section B-35 or B-40 of this
Part B takes effect, then the School Code is amended by

09800SB1544sam003 - 293 - LRB098 07988 JDS 43665 a
changing Sections 24-1 and 24-8 as follows:
(105 ILCS 5/24-1) (from Ch. 122, par. 24-1)
Sec. 24-1. Appointment-Salaries-Payment-School
month-School term.) School boards shall appoint all teachers,
determine qualifications of employment and fix the amount of
their salaries subject to any limitation set forth in this Act
and subject to any applicable restrictions in Section 14-106.5
or 15-132.9 of the Illinois Pension Code. They shall pay the
wages of teachers monthly, subject, however, to the provisions
of Section 24-21. The school month shall be the same as the
calendar month but by resolution the school board may adopt for
its use a month of 20 days, including holidays. The school term
shall consist of at least the minimum number of pupil
attendance days required by Section 10-19, any additional legal
school holidays, days of teachers' institutes, or equivalent
professional educational experiences, and one or two days at
the beginning of the school term when used as a teachers'
workshop.
(Source: P.A. 80-249.)
(105 ILCS 5/24-8) (from Ch. 122, par. 24-8)
Sec. 24-8. Minimum salary. In fixing the salaries of
teachers, school boards shall pay those who serve on a
full-time basis not less than a rate for the school year that
is based upon training completed in a recognized institution of

09800SB1544sam003 - 294 - LRB098 07988 JDS 43665 a
higher learning, as follows: for the school year beginning July
1, 1980 and thereafter, less than a bachelor's degree, $9,000;
120 semester hours or more and a bachelor's degree, $10,000;
150 semester hours or more and a master's degree, $11,000.
Based upon previous public school experience in this State
or any other State, territory, dependency or possession of the
United States, or in schools operated by or under the auspices
of the United States, teachers who serve on a full-time basis
shall have their salaries increased to at least the following
amounts above the starting salary for a teacher in such
district in the same classification: with less than a
bachelor's degree, $750 after 5 years; with 120 semester hours
or more and a bachelor's degree, $1,000 after 5 years and
$1,600 after 8 years; with 150 semester hours or more and a
master's degree, $1,250 after 5 years, $2,000 after 8 years and
$2,750 after 13 years. However, any salary increase is subject
to any applicable restrictions in Section 14-106.5 or 15-132.9
of the Illinois Pension Code.
For the purpose of this Section a teacher's salary shall
include any amount paid by the school district on behalf of the
teacher, as teacher contributions, to the Teachers' Retirement
System of the State of Illinois.
If a school board establishes a schedule for teachers'
salaries based on education and experience, not inconsistent
with this Section, all certificated nurses employed by that
board shall be paid in accordance with the provisions of such

09800SB1544sam003 - 295 - LRB098 07988 JDS 43665 a
schedule (subject to any applicable restrictions in Section
14-106.5 or 15-132.9 of the Illinois Pension Code).
For purposes of this Section, a teacher who submits a
certificate of completion to the school office prior to the
first day of the school term shall be considered to have the
degree stated in such certificate.
(Source: P.A. 83-913.)
Section B-55. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the State Universities Civil Service
Act is amended by changing Section 36d as follows:
(110 ILCS 70/36d) (from Ch. 24 1/2, par. 38b3)
Sec. 36d. Powers and duties of the Merit Board.
The Merit Board shall have the power and duty-
(1) To approve a classification plan prepared under its
direction, assigning to each class positions of substantially
similar duties. The Merit Board shall have power to delegate to
its Director the duty of assigning each position in the
classified service to the appropriate class in the
classification plan approved by the Merit Board.

09800SB1544sam003 - 296 - LRB098 07988 JDS 43665 a
(2) To prescribe the duties of each class of positions and
the qualifications required by employment in that class.
(3) To prescribe the range of compensation for each class
or to fix a single rate of compensation for employees in a
particular class; and to establish other conditions of
employment which an employer and employee representatives have
agreed upon as fair and equitable. The Merit Board shall direct
the payment of the "prevailing rate of wages" in those
classifications in which, on January 1, 1952, any employer is
paying such prevailing rate and in such other classes as the
Merit Board may thereafter determine. "Prevailing rate of
wages" as used herein shall be the wages paid generally in the
locality in which the work is being performed to employees
engaged in work of a similar character. Subject to any
applicable restrictions in Section 15-132.9 of the Illinois
Pension Code, each Each employer covered by the University
System shall be authorized to negotiate with representatives of
employees to determine appropriate ranges or rates of
compensation or other conditions of employment and may
recommend to the Merit Board for establishment the rates or
ranges or other conditions of employment which the employer and
employee representatives have agreed upon as fair and
equitable, but excluding the changes, the impact of changes,
and the implementation of the changes set forth in this
amendatory Act of the 98th General Assembly. Any rates or
ranges established prior to January 1, 1952, and hereafter,

09800SB1544sam003 - 297 - LRB098 07988 JDS 43665 a
shall not be changed except in accordance with the procedures
herein provided.
(4) To recommend to the institutions and agencies specified
in Section 36e standards for hours of work, holidays, sick
leave, overtime compensation and vacation for the purpose of
improving conditions of employment covered therein and for the
purpose of insuring conformity with the prevailing rate
principal.
(5) To prescribe standards of examination for each class,
the examinations to be related to the duties of such class. The
Merit Board shall have power to delegate to the Director and
his staff the preparation, conduct and grading of examinations.
Examinations may be written, oral, by statement of training and
experience, in the form of tests of knowledge, skill, capacity,
intellect, aptitude; or, by any other method, which in the
judgment of the Merit Board is reasonable and practical for any
particular classification. Different examining procedures may
be determined for the examinations in different
classifications but all examinations in the same
classification shall be uniform.
(6) To authorize the continuous recruitment of personnel
and to that end, to delegate to the Director and his staff the
power and the duty to conduct open and continuous competitive
examinations for all classifications of employment.
(7) To cause to be established from the results of
examinations registers for each class of positions in the

09800SB1544sam003 - 298 - LRB098 07988 JDS 43665 a
classified service of the State Universities Civil Service
System, of the persons who shall attain the minimum mark fixed
by the Merit Board for the examination; and such persons shall
take rank upon the registers as candidates in the order of
their relative excellence as determined by examination,
without reference to priority of time of examination.
(8) To provide by its rules for promotions in the
classified service. Vacancies shall be filled by promotion
whenever practicable. For the purpose of this paragraph, an
advancement in class shall constitute a promotion.
(9) To set a probationary period of employment of no less
than 6 months and no longer than 12 months for each class of
positions in the classification plan, the length of the
probationary period for each class to be determined by the
Director.
(10) To provide by its rules for employment at regular
rates of compensation of physically handicapped persons in
positions in which the handicap does not prevent the individual
from furnishing satisfactory service.
(11) To make and publish rules, to carry out the purpose of
the State Universities Civil Service System and for
examination, appointments, transfers and removals and for
maintaining and keeping records of the efficiency of officers
and employees and groups of officers and employees in
accordance with the provisions of Sections 36b to 36q,
inclusive, and said Merit Board may from time to time make

09800SB1544sam003 - 299 - LRB098 07988 JDS 43665 a
changes in such rules.
(12) To appoint a Director and such assistants and other
clerical and technical help as may be necessary efficiently to
administer Sections 36b to 36q, inclusive. To authorize the
Director to appoint an assistant resident at the place of
employment of each employer specified in Section 36e and this
assistant may be authorized to give examinations and to certify
names from the regional registers provided in Section 36k.
(13) To submit to the Governor of this state on or before
November 1 of each year prior to the regular session of the
General Assembly a report of the University System's business
and an estimate of the amount of appropriation from state funds
required for the purpose of administering the University
System.
(Source: P.A. 82-524.)
Section B-60. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the University of Illinois Act is
amended by adding Section 85 as follows:
(110 ILCS 305/85 new)

09800SB1544sam003 - 300 - LRB098 07988 JDS 43665 a
Sec. 85. Future increases in income. The University of
Illinois must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-65. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Southern Illinois University
Management Act is amended by adding Section 70 as follows:
(110 ILCS 520/70 new)
Sec. 70. Future increases in income. Southern Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-70. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer

09800SB1544sam003 - 301 - LRB098 07988 JDS 43665 a
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Chicago State University Law is
amended by adding Section 5-180 as follows:
(110 ILCS 660/5-180 new)
Sec. 5-180. Future increases in income. Chicago State
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-75. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Eastern Illinois University Law is
amended by adding Section 10-180 as follows:
(110 ILCS 665/10-180 new)
Sec. 10-180. Future increases in income. Eastern Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that

09800SB1544sam003 - 302 - LRB098 07988 JDS 43665 a
violates any of those Sections.
Section B-80. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Governors State University Law is
amended by adding Section 15-180 as follows:
(110 ILCS 670/15-180 new)
Sec. 15-180. Future increases in income. Governors State
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-85. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Illinois State University Law is
amended by adding Section 20-185 as follows:

09800SB1544sam003 - 303 - LRB098 07988 JDS 43665 a
(110 ILCS 675/20-185 new)
Sec. 20-185. Future increases in income. Illinois State
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-90. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Northeastern Illinois University
Law is amended by adding Section 25-180 as follows:
(110 ILCS 680/25-180 new)
Sec. 25-180. Future increases in income. Northeastern
Illinois University must not pay, offer, or agree to pay any
future increase in income, as that term is defined in Section
15-132.9 of the Illinois Pension Code, to any person in a
manner that violates any of those Sections.
Section B-95. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois

09800SB1544sam003 - 304 - LRB098 07988 JDS 43665 a
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Northern Illinois University Law is
amended by adding Section 30-190 as follows:
(110 ILCS 685/30-190 new)
Sec. 30-190. Future increases in income. Northern Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-100. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Western Illinois University Law is
amended by adding Section 35-185 as follows:
(110 ILCS 690/35-185 new)
Sec. 35-185. Future increases in income. Western Illinois
University must not pay, offer, or agree to pay any future

09800SB1544sam003 - 305 - LRB098 07988 JDS 43665 a
increase in income, as that term is defined in Section 15-132.9
of the Illinois Pension Code, to any person in a manner that
violates any of those Sections.
Section B-105. If and only if any of the changes made by
Part A of this Act to provisions in Article 15 of the Illinois
Pension Code concerning (i) automatic annual increases, (ii)
employee or member contributions, (iii) State or employer
contributions, (iv) State funding guarantees, or (v) salary,
earnings, or compensation is declared to be unconstitutional or
otherwise invalid, then the Public Community College Act is
amended by changing Sections 3-26 and 3-42 as follows:
(110 ILCS 805/3-26) (from Ch. 122, par. 103-26)
Sec. 3-26. (a) To make appointments and fix the salaries of
a chief administrative officer, who shall be the executive
officer of the board, other administrative personnel, and all
teachers, but subject to any applicable restrictions in Section
15-132.9 of the Illinois Pension Code. In making these
appointments and fixing the salaries, the board may make no
discrimination on account of sex, race, creed, color or
national origin.
(b) Upon the written request of an employee, to withhold
from the compensation of that employee the membership dues of
such employee payable to any specified labor organization as
defined in the Illinois Educational Labor Relations Act. Under

09800SB1544sam003 - 306 - LRB098 07988 JDS 43665 a
such arrangement, an amount shall be withheld for each regular
payroll period which is equal to the prorata share of the
annual membership dues plus any payments or contributions and
the board shall pay such withholding to the specified labor
organization within 10 working days from the time of the
withholding.
(Source: P.A. 83-1014.)
(110 ILCS 805/3-42) (from Ch. 122, par. 103-42)
Sec. 3-42. To employ such personnel as may be needed, to
establish policies governing their employment and dismissal,
and to fix the amount of their compensation, subject to any
applicable restrictions in Section 15-132.9 of the Illinois
Pension Code. In the employment, establishment of policies and
fixing of compensation the board may make no discrimination on
account of sex, race, creed, color or national origin.
Residence within any community college district or outside
any community college district shall not be considered:
(a) in determining whether to retain or not retain any
employee of a community college employed prior to July 1,
1977 or prior to the adoption by the community college
board of a resolution making residency within the community
college district of some or all employees a condition of
employment, whichever is later;
(b) in assigning, promoting or transferring any
employee of a community college to an office or position

09800SB1544sam003 - 307 - LRB098 07988 JDS 43665 a
employed prior to July 1, 1977 or prior to the adoption by
the community college board of a resolution making
residency within the community college district of some or
all employees a condition of employment, whichever is
later; or
(c) in determining the salary or other compensation of
any employee of a community college.
(Source: P.A. 80-248.)
Section B-110. If and only if Section B-35 or B-40 of this
Part B takes effect, then the Illinois Educational Labor
Relations Act is amended by changing Sections 4 and 17 as
follows:
(115 ILCS 5/4) (from Ch. 48, par. 1704)
Sec. 4. Employer rights. Employers shall not be required to
bargain over matters of inherent managerial policy, which shall
include such areas of discretion or policy as the functions of
the employer, standards of services, its overall budget, the
organizational structure and selection of new employees and
direction of employees. Employers, however, shall be required
to bargain collectively with regard to policy matters directly
affecting wages (but subject to any applicable restrictions in
Section 14-106.5 or 15-132.9 of the Illinois Pension Code),
hours and terms and conditions of employment as well as the
impact thereon upon request by employee representatives, but

09800SB1544sam003 - 308 - LRB098 07988 JDS 43665 a
excluding the changes, the impact of changes, and the
implementation of the changes set forth in this amendatory Act
of the 98th General Assembly. To preserve the rights of
employers and exclusive representatives which have established
collective bargaining relationships or negotiated collective
bargaining agreements prior to the effective date of this Act,
employers shall be required to bargain collectively with regard
to any matter concerning wages (but subject to any applicable
restrictions in Section 14-106.5 or 15-132.9 of the Illinois
Pension Code), hours or conditions of employment about which
they have bargained for and agreed to in a collective
bargaining agreement prior to the effective date of this Act,
but excluding the changes, the impact of changes, and the
implementation of the changes set forth in this amendatory Act
of the 98th General Assembly.
(Source: P.A. 83-1014.)
(115 ILCS 5/17) (from Ch. 48, par. 1717)
Sec. 17. Effect on other laws. In case of any conflict
between the provisions of this Act and any other law (other
than Section 14-106.5 or 15-132.9 of the Illinois Pension
Code), executive order or administrative regulation, the
provisions of this Act shall prevail and control. The
provisions of this Act are subject to any applicable
restrictions in Sections 14-106.5 and 15-132.9 of the Illinois
Pension Code, as well as the changes, impact of changes, and

09800SB1544sam003 - 309 - LRB098 07988 JDS 43665 a
implementation of changes set forth in this amendatory Act of
the 98th General Assembly. Nothing in this Act shall be
construed to replace or diminish the rights of employees
established by Section 36d of "An Act to create the State
Universities Civil Service System", approved May 11, 1905, as
amended or modified.
(Source: P.A. 83-1014.)
Section B-200. The State Mandates Act is amended by adding
Section 8.37 as follows:
(30 ILCS 805/8.37 new)
Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 98th General Assembly.
PART C
Section C-999. Effective date. This Act takes effect upon
becoming law, except that each of Sections B-5 through B-110
takes effect upon the date following the date upon which the
contingency described in its introductory clause occurs.".