Bill Text: IL SB1673 | 2011-2012 | 97th General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Cook County Article of the Illinois Pension Code. Provides that "re-entrant" does not include any employee who enters service after January 1, 2011 and whose retirement age is 67.

Spectrum: Bipartisan Bill

Status: (Failed) 2013-01-08 - Session Sine Die [SB1673 Detail]

Download: Illinois-2011-SB1673-Amended.html

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Rep. Tom Cross

Filed: 5/31/2012

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AMENDMENT TO SENATE BILL 1673
AMENDMENT NO. ______. Amend Senate Bill 1673 by replacing
everything after the enacting clause with the following:
"Section 5. 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
with regard to policy matters directly affecting wages (but
subject to any applicable restrictions in Section 14-106.5,
15-134.6, or 16-131.7 of the Illinois Pension Code), hours and

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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 97th 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, 15-134.6, or 16-131.7 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 97th 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

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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 97th 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 97th General Assembly, including Sections 14-106.5,
15-134.6, and 16-131.7 of the Illinois Pension Code, and
Section 5 of the State Employees Group Insurance Act of 1971.

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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
this Act.
(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
Section 10. The State Employees Group Insurance Act of 1971
is amended by changing Sections 6.9 and 6.10 and by adding

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Sections 6.10A and 6.16 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
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

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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
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%

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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,
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

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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
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

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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
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.

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(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 July 1, 2012 and until July 1, 2013,
the contribution rate under this subsection (a) shall be 1.25%
of salary. Beginning July 1, 2013, 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

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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
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 July 1, 2012 and until July
1, 2013, the contribution rate under this subsection (b) shall

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be 1.25% of salary. Beginning July 1, 2013, 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
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

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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
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 but not after
November 15, 2011, the Board of Trustees of the State
Universities Retirement System shall certify to the Governor,

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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. Beginning in fiscal year 2008, the amount
certified shall be decreased or increased each year by the
amount that the actual active 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

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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.)
(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.
(5 ILCS 375/6.16 new)
Sec. 6.16. Health benefit election for Tier I employees and
Tier I retirees.
(a) For purposes of this Section:
"Eligible Tier I employee" means 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, 15-134.6, or

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16-131.7 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, 15-134.6, or
16-131.7 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 a persons that includes eligible Tier I retirees, then
the plan of health benefits provided through that trust.
For persons who receive healthcare benefits under a
collective bargaining agreement with a community college
district subject to Article VII of the Public Community College
Act, the term "program of health benefits" also includes any
health benefit arrangement provided under such a collective
bargaining agreement, except that if such an agreement expires
and if those persons are otherwise eligible to participate in a
program of health benefits pursuant to item (i) or (ii), then
"program of health benefits" does not include the health
benefit arrangements provided under such a collective
bargaining agreement.
For persons who are eligible to receive benefits under a
health plan made available by a community college district

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subject to Article VII of the Public Community College Act and
who do not receive those benefits pursuant to a collective
bargaining agreement, "program of health benefits" also
includes the health plan made available to such persons by the
community college district, except that if those persons
otherwise become eligible to participate in a program of health
benefits pursuant to item (i) or (ii), then "program of health
benefits" does not include the health plan made available to
such persons by the community college district.
(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, 15-134.6, or 16-131.7 of the
Illinois Pension Code, 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, or as a TRS benefit recipient or community college
benefit recipient receiving a retirement annuity. That right
also extends to such a person's dependents, survivors, TRS
dependent beneficiaries, and community college dependent
beneficiaries 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.

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(d) The vested and enforceable contractual right to a
program of health benefits is not offered as, and shall not be
considered, a pension 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, 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, 15-134.6, or 16-131.7 of the Illinois Pension Code
shall not be entitled to participate in the program of health
benefits as an annuitant or retired employee, or as a TRS
benefit recipient or community college benefit recipient
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, a Tier I
employee who is not entitled to participate in the program of
health benefits as an annuitant or retired employee, or as a
TRS benefit recipient or community college benefit recipient
receiving a retirement annuity, due to an election under
paragraph (2) of subsection (a) or (a-5) of Section 2-110.3,
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code
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 the health benefits he or she

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receives during active employment.
(f) The Department shall coordinate with each retirement
system administering an election in accordance with this
amendatory Act of the 97th 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.
Section 15. 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

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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
(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

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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 20. The Illinois State Auditing Act is amended by
adding Section 2-8.1 as follows:
(30 ILCS 5/2-8.1 new)
Sec. 2-8.1. Actuarial Responsibilities.
(a) The Auditor General shall contract with or hire an
actuary to serve as the State Actuary. The State Actuary shall
be retained by, serve at the pleasure of, and be under the
supervision of the Auditor General and shall be paid from
appropriations to the office of the Auditor General. The State
Actuary may be selected by the Auditor General without engaging
in a competitive procurement process.
(b) The State Actuary shall:
(1) review assumptions and valuations prepared by

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actuaries retained by the boards of trustees of the
State-funded retirement systems;
(2) issue preliminary reports to the boards of trustees
of the State-funded retirement systems concerning proposed
certifications of required State contributions submitted
to the State Actuary by those boards;
(3) cooperate with the boards of trustees of the
State-funded retirement systems to identify recommended
changes in actuarial assumptions that the boards must
consider before finalizing their certifications of the
required State contributions;
(4) conduct reviews of the actuarial practices of the
boards of trustees of the State-funded retirement systems;
(5) make additional reports as directed by joint
resolution of the General Assembly; and
(6) perform any other duties assigned by the Auditor
General, including, but not limited to, reviews of the
actuarial practices of other entities.
(c) On or before January 1, 2013 and each January 1
thereafter, the Auditor General shall submit a written report
to the General Assembly and Governor documenting the initial
assumptions and valuations prepared by actuaries retained by
the boards of trustees of the State-funded retirement systems,
any changes recommended by the State Actuary in the actuarial
assumptions, and the responses of each board to the State
Actuary's recommendations.

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(d) For the purposes of this Section, "State-funded
retirement system" means a retirement system established
pursuant to Article 2, 14, 15, 16, or 18 of the Illinois
Pension Code.
Section 25. 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;
(15) Awards and Grants;

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(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
by the board of trustees of the retirement system in

09700SB1673ham007 - 25 - LRB097 07605 EFG 70502 a
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 30. The Illinois Pension Code is amended by
changing Sections 1-103.3, 2-108, 2-119.1, 2-124, 2-134,
7-109, 14-103.10, 14-106, 14-114, 14-131, 14-132, 14-135.08,
14-152.1, 15-106, 15-107, 15-111, 15-113.2, 15-136, 15-155,
15-163, 15-165, 15-198, 16-106, 16-121, 16-127, 16-133.1,
16-136.1, 16-158, 16-203, and 18-140 and by adding Sections
2-105.1, 2-105.2, 2-107.9, 2-110.3, 14-103.40, 14-103.41,
14-103.42, 14-106.5, 15-107.1, 15-107.2, 15-111.1, 15-134.6,
15-155.1, 16-106.4, 16-106.5, 16-106.6, 16-121.1, 16-131.7,
and 16-133.6 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

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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
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 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 5/2-105.1 new)

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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 June 30, 2013 that
would qualify as "salary", as defined under 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)
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

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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
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

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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 January 1, 2013
and no later than May 31, 2013, except that:
(i) a person who becomes a Tier I employee under this
Article after January 1, 2013 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 after January 1, 2013 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

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(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
(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 January 1, 2013 and
no later than May 31, 2013, except that:

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(i) a person who becomes a Tier I retiree under this
Article on or after January 1, 2013 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 before June 1, 2013 shall take effect
on July 1, 2013. Elections that are made or deemed to be made
on or after June 1, 2013 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 97th 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.

09700SB1673ham007 - 32 - LRB097 07605 EFG 70502 a
As adequate and legal consideration provided under this
amendatory Act of the 97th 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
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

09700SB1673ham007 - 33 - LRB097 07605 EFG 70502 a
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
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

09700SB1673ham007 - 34 - LRB097 07605 EFG 70502 a
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.
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 97th General Assembly to provide information
concerning the impact of the election under this Section.
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.
(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) or subsection (a) or (a-5) of Section 2-110.3. A
Tier I employee, or Tier I retiree returning to active service,

09700SB1673ham007 - 35 - LRB097 07605 EFG 70502 a
who has made an election under paragraph (2) or 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 461 (a) of the Internal Revenue Code of 1986.
(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) 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

09700SB1673ham007 - 36 - LRB097 07605 EFG 70502 a
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
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

09700SB1673ham007 - 37 - LRB097 07605 EFG 70502 a
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
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,

09700SB1673ham007 - 38 - LRB097 07605 EFG 70502 a
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
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

09700SB1673ham007 - 39 - LRB097 07605 EFG 70502 a
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.
(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)
Sec. 2-124. Contributions by State.
(a) Except as otherwise provided in this Section, the 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 90% funded basis in accordance with actuarial
recommendations.
(b) The Board shall determine the amount of State

09700SB1673ham007 - 40 - LRB097 07605 EFG 70502 a
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) Except as otherwise provided in this Section, for For
State fiscal years 2012 through 2045, the minimum contribution
to the System to be made by the State for each fiscal year
shall be an amount determined by the System to be sufficient to
bring the total assets of the System up to 90% of the total
actuarial liabilities of the System by the end of State fiscal
year 2045. In making these determinations, the required State
contribution shall be calculated each year as a level
percentage of payroll over the years remaining to and including
fiscal year 2045 and shall be determined under the projected
unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$4,157,000.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$5,220,300.

09700SB1673ham007 - 41 - LRB097 07605 EFG 70502 a
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
$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

09700SB1673ham007 - 42 - LRB097 07605 EFG 70502 a
applicable.
Except as otherwise provided in this Section, beginning
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 2-134, shall not
exceed an amount equal to (i) the amount of the required State
contribution that would have been calculated under this Section
for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General

09700SB1673ham007 - 43 - LRB097 07605 EFG 70502 a
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.
(c-1) If at least 50% of Tier I employees making an
election under Section 2-110.3 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:
(1) In lieu of the State contributions required under
subsection (c), for State fiscal years 2014 through 2043
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

09700SB1673ham007 - 44 - LRB097 07605 EFG 70502 a
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 2043. 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 2043 and shall be determined under the projected unit
credit actuarial cost method.
(2) Beginning in State fiscal year 2044, 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.
(c-2) If less than 50% of Tier I employees making an
election under Section 14-106.5 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:
(1) Instead of the annual required contribution
otherwise specified in subsection (c-1) of this Section,
the annual required contribution to the System to be made
by the State shall be determined under subsection (c) of
this Section.
(2) As soon as possible after June 1, 2013, the Board
shall recertify the annual required contribution by the
State for State fiscal year 2014.
(d) For purposes of determining the required State

09700SB1673ham007 - 45 - LRB097 07605 EFG 70502 a
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(e) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 95-950, eff. 8-29-08; 96-43, eff. 7-15-09;
96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11; 96-1554, eff.
3-18-11; revised 4-6-11.)
(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 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

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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.
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 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 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.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State

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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.
(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

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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.
(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. 95-331, eff. 8-21-07; 96-1497, eff. 1-14-11;
96-1511, eff. 1-27-11.)
(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

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of personal services or official duties out of the
general fund of a municipality, or out of any special
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,

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chief fiscal officer, or other employee of a Financial
Oversight Panel established pursuant to Article 1H of the
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.

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(b) Are designated by the governing body of a
municipality in which a pension fund is required by law to
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) this amendatory Act of the 97th General
Assembly, are contributors to or eligible to contribute to
a Taft-Hartley pension plan established on or before June

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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
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 the effective date of this
amendatory Act of the 97th General Assembly, and this
paragraph shall not apply to individuals who are
participating in the Fund prior to August 26, 2011 the
effective date of this amendatory Act of the 97th General
Assembly.
(d) Become an employee of any of the following
participating instrumentalities on or after the effective
date of this amendatory Act of the 97th General Assembly:
the Illinois Municipal League; the Illinois Association of
Park Districts; the Illinois Supervisors, County
Commissioners and Superintendents of Highways Association;
the Township School District Trustees; 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

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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
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;
revised 9-28-11.)
(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

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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
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.

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(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:
(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.
(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 97th General
Assembly, "compensation" does not include any payments or
reimbursements for travel vouchers.
(Source: P.A. 96-1490, eff. 1-1-11.)

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(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)
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 June
30, 2013 that would qualify as "compensation", as defined under
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

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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 97th General Assembly.
(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
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

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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 97th 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
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
97th General Assembly.
(Source: P.A. 92-14, eff. 6-28-01.)
(40 ILCS 5/14-106.5 new)

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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
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 January 1, 2013
and no later than May 31, 2013, except that:
(i) a person who becomes a Tier I employee under this
Article after January 1, 2013 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 after January 1, 2013 and has
not yet made an election under this Section must make the
election under this subsection (a) within 60 days after

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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
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 January 1, 2013 and
no later than May 31, 2013, except that:
(i) a person who becomes a Tier I retiree under this

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Article on or after January 1, 2013 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 before June 1, 2013 shall take effect
on July 1, 2013. Elections that are made or deemed to be made
on or after June 1, 2013 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 97th 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.
As adequate and legal consideration provided under this

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amendatory Act of the 97th 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.
(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.
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

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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.
(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

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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.
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 97th General Assembly to provide information
concerning the impact of the election under this Section.
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.
(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

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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) 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 461 (a) of the Internal Revenue Code of 1986.
(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,

09700SB1673ham007 - 66 - LRB097 07605 EFG 70502 a
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 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,

09700SB1673ham007 - 67 - LRB097 07605 EFG 70502 a
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
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

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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
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

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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
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) Except as otherwise provided in this Section, the 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,

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

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to participate in the System but have not so elected, persons
who are serving a qualifying period that is required for
participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
(c) Contributions shall be made by the several departments
for each pay period by warrants drawn by the State Comptroller
against their respective funds or appropriations based upon
vouchers stating the amount to be so contributed. These amounts
shall be based on the full rate certified by the Board under
Section 14-135.08 for that fiscal year. From the effective date
of this amendatory Act of the 93rd General Assembly through the
payment of the final payroll from fiscal year 2004
appropriations, the several departments shall not make
contributions for the remainder of fiscal year 2004 but shall
instead make payments as required under subsection (a-1) of
Section 14.1 of the State Finance Act. The several departments
shall resume those contributions at the commencement of fiscal
year 2005.
(c-1) Notwithstanding subsection (c) of this Section, for
fiscal years 2010 and 2012 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 and 2012 only, on or as

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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 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) Except as otherwise provided in this Section, for For
State fiscal years 2012 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

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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
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

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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
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

09700SB1673ham007 - 75 - LRB097 07605 EFG 70502 a
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.
Except as otherwise provided in this Section, beginning
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 14-135.08, shall

09700SB1673ham007 - 76 - LRB097 07605 EFG 70502 a
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.
(e-1) If at least 50% of Tier I employees making an
election under Section 14-106.5 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:
(1) In lieu of the State contributions required under

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subsection (e), for State fiscal years 2014 through 2043
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 2043. 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 2043 and shall be determined under the projected unit
credit actuarial cost method.
(2) Beginning in State fiscal year 2044, 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.
(e-2) If less than 50% of Tier I employees making an
election under Section 14-106.5 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:
(1) Instead of the annual required contribution
otherwise specified in subsection (e-1) of this Section,
the annual required contribution to the System to be made
by the State shall be determined under subsection (e) of
this Section.

09700SB1673ham007 - 78 - LRB097 07605 EFG 70502 a
(2) As soon as possible after June 1, 2013, the Board
shall recertify the annual required contribution by the
State for State fiscal year 2014.
(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
Fiscal Year 2004 Overpayment shall be repaid by the System to
the Pension Contribution Fund as soon as practicable after the

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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
certification, the System shall determine the amount due to the
System based on the full rate certified by the Board under

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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
State's obligation under this Section. The System shall compare
this amount due to the amount received by the System in fiscal

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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 year 2012 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 "Fiscal Year Shortfall" for purposes of
this Section, and the Fiscal 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

09700SB1673ham007 - 82 - LRB097 07605 EFG 70502 a
received, the difference shall be termed the "Fiscal Year
Overpayment" for purposes of this Section, and the 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.)
(40 ILCS 5/14-132) (from Ch. 108 1/2, par. 14-132)
Sec. 14-132. Obligations of State.
(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 the System submits a voucher for monthly
contributions as required in Section 14-131 and the State fails
to pay within 90 days of receipt of such a voucher, the Board
shall submit a written request to the Comptroller seeking
payment. A copy of the request shall be filed with the
Secretary of State, and the Secretary of State shall provide
copies to the Governor and General Assembly. No earlier than

09700SB1673ham007 - 83 - LRB097 07605 EFG 70502 a
the 16th day after filing a request with the Secretary of
State, the Board shall have the right to commence a mandamus
action in the Supreme Court of Illinois to compel the
Comptroller to satisfy the voucher by making payment from the
General Revenue Fund. This Section constitutes an express
waiver of the State's sovereign immunity solely to the extent
it permits the Board to commence a mandamus action in the
Illinois Supreme Court to compel the Comptroller to pay a
voucher for monthly contributions as required in Section
14-131.
(Source: P.A. 80-841.)
(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 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

09700SB1673ham007 - 84 - LRB097 07605 EFG 70502 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 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)
certification 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

09700SB1673ham007 - 85 - LRB097 07605 EFG 70502 a
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
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

09700SB1673ham007 - 86 - LRB097 07605 EFG 70502 a
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.)
(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 or Article 1 by Public Act
96-37 or this amendatory Act of the 97th 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.

09700SB1673ham007 - 87 - LRB097 07605 EFG 70502 a
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
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

09700SB1673ham007 - 88 - LRB097 07605 EFG 70502 a
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.)
(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

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Section as employers. An individual that begins employment
after the effective date of this amendatory Act of the 97th
General Assembly with an entity not defined as an employer in
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
both employed and already participants in the System on the
effective date of this amendatory Act of the 97th General
Assembly shall be allowed to continue as participants in the
System for the duration of that employment.
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 97th 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 both employed and already participants in
the System on the effective date of this amendatory Act of the

09700SB1673ham007 - 90 - LRB097 07605 EFG 70502 a
97th General Assembly shall be allowed to continue as
participants in the System for the duration of that employment.
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

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continuous or who is employed in a position in which services
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;

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(6) is hired after June 30, 1979 as a public service
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.

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(e) A participant is considered an employee during (1) the
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

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elimination of that fire department became employed by the fire
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

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organization and (B) employer contributions equal to the normal
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.

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(Source: P.A. 97-651, eff. 1-5-12.)
(40 ILCS 5/15-107.1 new)
Sec. 15-107.1. 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 5/15-107.2 new)
Sec. 15-107.2. Tier I retiree. "Tier I retiree": A former
Tier I employee 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

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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
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,

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"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 15-134.6 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 15-134.6.
(Source: P.A. 91-887, eff. 7-6-00.)
(40 ILCS 5/15-111.1 new)
Sec. 15-111.1. 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 June 30, 2013
that would qualify as "earnings", as defined under 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 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 97th
General Assembly.

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(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
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

09700SB1673ham007 - 100 - LRB097 07605 EFG 70502 a
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
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 97th General Assembly.
(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
(40 ILCS 5/15-134.6 new)
Sec. 15-134.6. 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

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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 January 1, 2013
and no later than May 31, 2013, except that:
(i) a person who becomes a Tier I employee under this
Article after January 1, 2013 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 after January 1, 2013 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

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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
(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 January 1, 2013 and
no later than May 31, 2013, except that:
(i) a person who becomes a Tier I retiree under this
Article on or after January 1, 2013 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

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(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 before June 1, 2013 shall take effect
on July 1, 2013. Elections that are made or deemed to be made
on or after June 1, 2013 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 97th 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.
As adequate and legal consideration provided under this
amendatory Act of the 97th 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

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irrevocably as constituting earnings under Section 15-111.
(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 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.
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 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.
(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

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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
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

09700SB1673ham007 - 106 - LRB097 07605 EFG 70502 a
required under this Section from any other available source,
including but not limited to labor organizations and private
counsel.
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 97th General Assembly to provide information
concerning the impact of the election under this Section.
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.
(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) or subsection (a) or (a-5) of this Section.
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 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 the Illinois Pension Code.

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(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 461(a) of the Internal Revenue Code of 1986.
(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
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 prescribed rate
of interest in effect at the time the retirement annuity
begins:

09700SB1673ham007 - 108 - LRB097 07605 EFG 70502 a
(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.
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

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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
$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

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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
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

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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
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

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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
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

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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
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

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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
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

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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
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 either subsection (a) or (a-5) of
Section 15-134.6, 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,

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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
15-134.6, 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
15-134.6 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

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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 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

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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
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. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
Sec. 15-155. Employer contributions.

09700SB1673ham007 - 119 - LRB097 07605 EFG 70502 a
(a) Except as otherwise provided in this Section, the The
State of Illinois shall make contributions by appropriations of
amounts which, together with the other employer contributions
from trust, federal, and other funds, employee contributions,
income from investments, and other income of this System, will
be sufficient to meet the cost of maintaining and administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
(a-1) Except as otherwise provided in this Section, for For
State fiscal years 2012 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

09700SB1673ham007 - 120 - LRB097 07605 EFG 70502 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

09700SB1673ham007 - 121 - LRB097 07605 EFG 70502 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.
Except as otherwise provided in this Section, beginning
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the

09700SB1673ham007 - 122 - LRB097 07605 EFG 70502 a
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued 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.

09700SB1673ham007 - 123 - LRB097 07605 EFG 70502 a
(a-5) If at least 50% of the Tier I employees making an
election under Section 15-134.6 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:
(1) In lieu of the State contributions required under
subsection (a-1), for State fiscal years 2014 through 2043
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 2043. 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 2043 and shall be determined under the projected unit
credit actuarial cost method.
(2) Beginning in State fiscal year 2044, 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.
(a-6) If less than 50% of the Tier I employees making an
election under Section 15-134.6 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:

09700SB1673ham007 - 124 - LRB097 07605 EFG 70502 a
(1) Instead of the annual required contribution
otherwise specified in subsection (a-5) of this Section,
the annual required contribution to the System to be made
by the State shall be determined under subsection (a-1) of
this Section.
(2) As soon as possible after June 1, 2013, the Board
shall recertify the annual required contribution by the
State for State fiscal year 2014.
(b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the
purpose of this Article, but funds of alumni associations,
foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
(b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this

09700SB1673ham007 - 125 - LRB097 07605 EFG 70502 a
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
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).

09700SB1673ham007 - 126 - LRB097 07605 EFG 70502 a
(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
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

09700SB1673ham007 - 127 - LRB097 07605 EFG 70502 a
employer to provide any pertinent information or
documentation. The changes to this subsection (removing the 6%
increase permitted without payment to the System by the
employer) made by this amendatory Act of the 97th General
Assembly do not apply to an employee who is covered by a
collective bargaining agreement or employment contract in
effect on the effective date of this amendatory Act that
provides for such increases, until such time as that agreement
or contract expires or is amended or renewed.
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
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

09700SB1673ham007 - 128 - LRB097 07605 EFG 70502 a
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,
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

09700SB1673ham007 - 129 - LRB097 07605 EFG 70502 a
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
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

09700SB1673ham007 - 130 - LRB097 07605 EFG 70502 a
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.
(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

09700SB1673ham007 - 131 - LRB097 07605 EFG 70502 a
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
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.

09700SB1673ham007 - 132 - LRB097 07605 EFG 70502 a
(n) If the System submits a voucher for monthly
contributions from the State as required by this Section and
the State fails to pay within 90 days of receipt of such a
voucher, the Board shall submit a written request to the
Comptroller seeking payment. A copy of the request shall be
filed with the Secretary of State, and the Secretary of State
shall provide copies to the Governor and General Assembly. No
earlier than the 16th day after filing a request with the
Secretary of State, the Board shall have the right to commence
a mandamus action in the Supreme Court of Illinois to compel
the Comptroller to satisfy the voucher by making payment from
the General Revenue Fund. This Section constitutes an express
waiver of the State's sovereign immunity solely to the extent
it permits the Board to commence a mandamus action in the
Illinois Supreme Court to compel the Comptroller to pay a
voucher for monthly contributions from the State as required in
this Section.
(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
1-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
(40 ILCS 5/15-155.1 new)
Sec. 15-155.1. Actions to enforce payment by employers. If
reports furnished to the System by the employer involved are
inadequate for the computation of the amounts of any payments,
the System may provide for such audit of the records of the

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employer as may be required to establish the amounts of the
delinquent payments. The employer shall make its records
available to the System for the purpose of the audit. The cost
of the audit shall be added to the amount of the payments and
shall be recovered by the System from the employer at the same
time and in the same manner as the payments are recovered.
(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 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

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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
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

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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 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
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

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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
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

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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.)
(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 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 97th 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

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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
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

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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 5/16-106) (from Ch. 108 1/2, par. 16-106)
Sec. 16-106. Teacher. "Teacher": The following
individuals, provided that, for employment prior to July 1,
1990, they are employed on a full-time basis, or if not
full-time, on a permanent and continuous basis in a position in
which services are expected to be rendered for at least one
school term:
(1) Any educational, administrative, professional or
other staff employed in the public common schools included
within this system in a position requiring certification
under the law governing the certification of teachers;
(2) Any educational, administrative, professional or
other staff employed in any facility of the Department of

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Children and Family Services or the Department of Human
Services, in a position requiring certification under the
law governing the certification of teachers, and any person
who (i) works in such a position for the Department of
Corrections, (ii) was a member of this System on May 31,
1987, and (iii) did not elect to become a member of the
State Employees' Retirement System pursuant to Section
14-108.2 of this Code; except that "teacher" does not
include any person who (A) becomes a security employee of
the Department of Human Services, as defined in Section
14-110, after June 28, 2001 (the effective date of Public
Act 92-14), or (B) becomes a member of the State Employees'
Retirement System pursuant to Section 14-108.2c of this
Code;
(3) Any regional superintendent of schools, assistant
regional superintendent of schools, State Superintendent
of Education; any person employed by the State Board of
Education as an executive; any executive of the boards
engaged in the service of public common school education in
school districts covered under this system of which the
State Superintendent of Education is an ex-officio member;
(4) Any employee of a school board association
operating in compliance with Article 23 of the School Code
who is certificated under the law governing the
certification of teachers, provided that he or she becomes
such an employee before the effective date of this

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amendatory Act of the 97th General Assembly;
(5) Any person employed by the retirement system who:
(i) was an employee of and a participant in the
system on August 17, 2001 (the effective date of Public
Act 92-416), or
(ii) becomes an employee of the system on or after
August 17, 2001;
(6) Any educational, administrative, professional or
other staff employed by and under the supervision and
control of a regional superintendent of schools, provided
such employment position requires the person to be
certificated under the law governing the certification of
teachers and is in an educational program serving 2 or more
districts in accordance with a joint agreement authorized
by the School Code or by federal legislation;
(7) Any educational, administrative, professional or
other staff employed in an educational program serving 2 or
more school districts in accordance with a joint agreement
authorized by the School Code or by federal legislation and
in a position requiring certification under the laws
governing the certification of teachers;
(8) Any officer or employee of a statewide teacher
organization or officer of a national teacher organization
who is certified under the law governing certification of
teachers, provided: (i) the individual had previously
established creditable service under this Article, (ii)

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the individual files with the system an irrevocable
election to become a member before the effective date of
this amendatory Act of the 97th General Assembly, (iii) the
individual does not receive credit for such service under
any other Article of this Code, and (iv) the individual
first became an officer or employee of the teacher
organization and becomes a member before the effective date
of this amendatory Act of the 97th General Assembly;
(9) Any educational, administrative, professional, or
other staff employed in a charter school operating in
compliance with the Charter Schools Law who is certificated
under the law governing the certification of teachers.
(10) Any person employed, on the effective date of this
amendatory Act of the 94th General Assembly, by the
Macon-Piatt Regional Office of Education in a
birth-through-age-three pilot program receiving funds
under Section 2-389 of the School Code who is required by
the Macon-Piatt Regional Office of Education to hold a
teaching certificate, provided that the Macon-Piatt
Regional Office of Education makes an election, within 6
months after the effective date of this amendatory Act of
the 94th General Assembly, to have the person participate
in the system. Any service established prior to the
effective date of this amendatory Act of the 94th General
Assembly for service as an employee of the Macon-Piatt
Regional Office of Education in a birth-through-age-three

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pilot program receiving funds under Section 2-389 of the
School Code shall be considered service as a teacher if
employee and employer contributions have been received by
the system and the system has not refunded those
contributions.
An annuitant receiving a retirement annuity under this
Article or under Article 17 of this Code who is employed by a
board of education or other employer as permitted under Section
16-118 or 16-150.1 is not a "teacher" for purposes of this
Article. A person who has received a single-sum retirement
benefit under Section 16-136.4 of this Article is not a
"teacher" for purposes of this Article.
(Source: P.A. 97-651, eff. 1-5-12.)
(40 ILCS 5/16-106.4 new)
Sec. 16-106.4. Tier I employee. "Tier I employee": A
teacher 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 5/16-106.5 new)
Sec. 16-106.5. Tier I retiree. "Tier I retiree": A former
Tier I employee who is receiving a retirement annuity.

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(40 ILCS 5/16-106.6 new)
Sec. 16-106.6. Teacher certification. For purposes of this
Article, a teacher shall be deemed to be certificated if he or
she is required to be licensed by the Illinois State Board of
Education.
(40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)
Sec. 16-121. Salary. "Salary": The actual compensation
received by a teacher during any school year and recognized by
the system in accordance with rules of the board. For purposes
of this Section, "school year" includes the regular school term
plus any additional period for which a teacher is compensated
and such compensation is recognized by the rules of the board.
Notwithstanding any other provision of this Section, "salary"
does not include any future increase in income offered by an
employer under this Article pursuant to the requirements of
subsection (c) of Section 16-131.7 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 16-131.7.
(Source: P.A. 84-1028.)
(40 ILCS 5/16-121.1 new)
Sec. 16-121.1. Future increase in income. "Future increase
in income": Any increase in income in any form offered by an
employer to a teacher under this Article after June 30, 2013

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that would qualify as "salary", as defined under Section
14-103.10, but for the fact that the employer offered the
increase in income to the teacher on the condition that it not
qualify as salary and the teacher 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 97th General Assembly.
(40 ILCS 5/16-127) (from Ch. 108 1/2, par. 16-127)
Sec. 16-127. Computation of creditable service.
(a) Each member shall receive regular credit for all
service as a teacher from the date membership begins, for which
satisfactory evidence is supplied and all contributions have
been paid.
(b) The following periods of service shall earn optional
credit and each member shall receive credit for all such
service for which satisfactory evidence is supplied and all
contributions have been paid as of the date specified:
(1) Prior service as a teacher.
(2) Service in a capacity essentially similar or

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equivalent to that of a teacher, in the public common
schools in school districts in this State not included
within the provisions of this System, or of any other
State, territory, dependency or possession of the United
States, or in schools operated by or under the auspices of
the United States, or under the auspices of any agency or
department of any other State, and service during any
period of professional speech correction or special
education experience for a public agency within this State
or any other State, territory, dependency or possession of
the United States, and service prior to February 1, 1951 as
a recreation worker for the Illinois Department of Public
Safety, for a period not exceeding the lesser of 2/5 of the
total creditable service of the member or 10 years. The
maximum service of 10 years which is allowable under this
paragraph shall be reduced by the service credit which is
validated by other retirement systems under paragraph (i)
of Section 15-113 and paragraph 1 of Section 17-133. Credit
granted under this paragraph may not be used in
determination of a retirement annuity or disability
benefits unless the member has at least 5 years of
creditable service earned subsequent to this employment
with one or more of the following systems: Teachers'
Retirement System of the State of Illinois, State
Universities Retirement System, and the Public School
Teachers' Pension and Retirement Fund of Chicago. Whenever

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such service credit exceeds the maximum allowed for all
purposes of this Article, the first service rendered in
point of time shall be considered. The changes to this
subdivision (b)(2) made by Public Act 86-272 shall apply
not only to persons who on or after its effective date
(August 23, 1989) are in service as a teacher under the
System, but also to persons whose status as such a teacher
terminated prior to such effective date, whether or not
such person is an annuitant on that date.
(3) Any periods immediately following teaching
service, under this System or under Article 17, (or
immediately following service prior to February 1, 1951 as
a recreation worker for the Illinois Department of Public
Safety) spent in active service with the military forces of
the United States; periods spent in educational programs
that prepare for return to teaching sponsored by the
federal government following such active military service;
if a teacher returns to teaching service within one
calendar year after discharge or after the completion of
the educational program, a further period, not exceeding
one calendar year, between time spent in military service
or in such educational programs and the return to
employment as a teacher under this System; and a period of
up to 2 years of active military service not immediately
following employment as a teacher.
The changes to this Section and Section 16-128 relating

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to military service made by P.A. 87-794 shall apply not
only to persons who on or after its effective date are in
service as a teacher under the System, but also to persons
whose status as a teacher terminated prior to that date,
whether or not the person is an annuitant on that date. In
the case of an annuitant who applies for credit allowable
under this Section for a period of military service that
did not immediately follow employment, and who has made the
required contributions for such credit, the annuity shall
be recalculated to include the additional service credit,
with the increase taking effect on the date the System
received written notification of the annuitant's intent to
purchase the credit, if payment of all the required
contributions is made within 60 days of such notice, or
else on the first annuity payment date following the date
of payment of the required contributions. In calculating
the automatic annual increase for an annuity that has been
recalculated under this Section, the increase attributable
to the additional service allowable under P.A. 87-794 shall
be included in the calculation of automatic annual
increases accruing after the effective date of the
recalculation.
Credit for military service shall be determined as
follows: if entry occurs during the months of July, August,
or September and the member was a teacher at the end of the
immediately preceding school term, credit shall be granted

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from July 1 of the year in which he or she entered service;
if entry occurs during the school term and the teacher was
in teaching service at the beginning of the school term,
credit shall be granted from July 1 of such year. In all
other cases where credit for military service is allowed,
credit shall be granted from the date of entry into the
service.
The total period of military service for which credit
is granted shall not exceed 5 years for any member unless
the service: (A) is validated before July 1, 1964, and (B)
does not extend beyond July 1, 1963. Credit for military
service shall be granted under this Section only if not
more than 5 years of the military service for which credit
is granted under this Section is used by the member to
qualify for a military retirement allotment from any branch
of the armed forces of the United States. The changes to
this subdivision (b)(3) made by Public Act 86-272 shall
apply not only to persons who on or after its effective
date (August 23, 1989) are in service as a teacher under
the System, but also to persons whose status as such a
teacher terminated prior to such effective date, whether or
not such person is an annuitant on that date.
(4) Any periods served as a member of the General
Assembly.
(5)(i) Any periods for which a teacher, as defined in
Section 16-106, is granted a leave of absence, provided he

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or she returns to teaching service creditable under this
System or the State Universities Retirement System
following the leave; (ii) periods during which a teacher is
involuntarily laid off from teaching, provided he or she
returns to teaching following the lay-off; (iii) periods
prior to July 1, 1983 during which a teacher ceased covered
employment due to pregnancy, provided that the teacher
returned to teaching service creditable under this System
or the State Universities Retirement System following the
pregnancy and submits evidence satisfactory to the Board
documenting that the employment ceased due to pregnancy;
and (iv) periods prior to July 1, 1983 during which a
teacher ceased covered employment for the purpose of
adopting an infant under 3 years of age or caring for a
newly adopted infant under 3 years of age, provided that
the teacher returned to teaching service creditable under
this System or the State Universities Retirement System
following the adoption and submits evidence satisfactory
to the Board documenting that the employment ceased for the
purpose of adopting an infant under 3 years of age or
caring for a newly adopted infant under 3 years of age.
However, total credit under this paragraph (5) may not
exceed 3 years.
Any qualified member or annuitant may apply for credit
under item (iii) or (iv) of this paragraph (5) without
regard to whether service was terminated before the

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effective date of this amendatory Act of 1997. In the case
of an annuitant who establishes credit under item (iii) or
(iv), the annuity shall be recalculated to include the
additional service credit. The increase in annuity shall
take effect on the date the System receives written
notification of the annuitant's intent to purchase the
credit, if the required evidence is submitted and the
required contribution paid within 60 days of that
notification, otherwise on the first annuity payment date
following the System's receipt of the required evidence and
contribution. The increase in an annuity recalculated
under this provision shall be included in the calculation
of automatic annual increases in the annuity accruing after
the effective date of the recalculation.
Optional credit may be purchased under this subsection
(b)(5) for periods during which a teacher has been granted
a leave of absence pursuant to Section 24-13 of the School
Code. A teacher whose service under this Article terminated
prior to the effective date of P.A. 86-1488 shall be
eligible to purchase such optional credit. If a teacher who
purchases this optional credit is already receiving a
retirement annuity under this Article, the annuity shall be
recalculated as if the annuitant had applied for the leave
of absence credit at the time of retirement. The difference
between the entitled annuity and the actual annuity shall
be credited to the purchase of the optional credit. The

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remainder of the purchase cost of the optional credit shall
be paid on or before April 1, 1992.
The change in this paragraph made by Public Act 86-273
shall be applicable to teachers who retire after June 1,
1989, as well as to teachers who are in service on that
date.
(6) Any days of unused and uncompensated accumulated
sick leave earned by a teacher who first became a
participant in the System before the effective date of this
amendatory Act of the 97th General Assembly. The service
credit granted under this paragraph shall be the ratio of
the number of unused and uncompensated accumulated sick
leave days to 170 days, subject to a maximum of 2 years of
service credit. Prior to the member's retirement, each
former employer shall certify to the System the number of
unused and uncompensated accumulated sick leave days
credited to the member at the time of termination of
service. The period of unused sick leave shall not be
considered in determining the effective date of
retirement. A member is not required to make contributions
in order to obtain service credit for unused sick leave.
Credit for sick leave shall, at retirement, be granted
by the System for any retiring regional or assistant
regional superintendent of schools who first became a
participant in this System before the effective date of
this amendatory Act of the 97th General Assembly at the

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rate of 6 days per year of creditable service or portion
thereof established while serving as such superintendent
or assistant superintendent.
Service credit is not available for unused sick leave
accumulated by a teacher who first becomes a participant in
this System on or after the effective date of this amendatory
Act of the 97th General Assembly.
(7) Periods prior to February 1, 1987 served as an
employee of the Illinois Mathematics and Science Academy
for which credit has not been terminated under Section
15-113.9 of this Code.
(8) Service as a substitute teacher for work performed
prior to July 1, 1990.
(9) Service as a part-time teacher for work performed
prior to July 1, 1990.
(10) Up to 2 years of employment with Southern Illinois
University - Carbondale from September 1, 1959 to August
31, 1961, or with Governors State University from September
1, 1972 to August 31, 1974, for which the teacher has no
credit under Article 15. To receive credit under this item
(10), a teacher must apply in writing to the Board and pay
the required contributions before May 1, 1993 and have at
least 12 years of service credit under this Article.
(b-1) A member may establish optional credit for up to 2
years of service as a teacher or administrator employed by a
private school recognized by the Illinois State Board of

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Education, provided that the teacher (i) was certified under
the law governing the certification of teachers at the time the
service was rendered, (ii) applies in writing on or after
August 1, 2009 and on or before August 1, 2012, (iii) supplies
satisfactory evidence of the employment, (iv) completes at
least 10 years of contributing service as a teacher as defined
in Section 16-106, and (v) pays the contribution required in
subsection (d-5) of Section 16-128. The member may apply for
credit under this subsection and pay the required contribution
before completing the 10 years of contributing service required
under item (iv), but the credit may not be used until the item
(iv) contributing service requirement has been met.
(c) The service credits specified in this Section shall be
granted only if: (1) such service credits are not used for
credit in any other statutory tax-supported public employee
retirement system other than the federal Social Security
program; and (2) the member makes the required contributions as
specified in Section 16-128. Except as provided in subsection
(b-1) of this Section, the service credit shall be effective as
of the date the required contributions are completed.
Any service credits granted under this Section shall
terminate upon cessation of membership for any cause.
Credit may not be granted under this Section covering any
period for which an age retirement or disability retirement
allowance has been paid.
(Source: P.A. 96-546, eff. 8-17-09.)

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(40 ILCS 5/16-131.7 new)
Sec. 16-131.7. 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
16-133.1 or subsection (b-1) of Section 16-136.1,
whichever is applicable; and
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as
provided in subsection (a-2) of Section 16-133.1 or
subsection (b-2) of Section 16-136.1, whichever is
applicable; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection and to be subject to
subsection (c) of this Section.
The election required under this subsection (a) shall be
made by each Tier I employee no earlier than January 1, 2013
and no later than May 31, 2013, except that:
(i) a person who becomes a Tier I employee under this
Article after January 1, 2013 must make the election under

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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 after January 1, 2013 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
16-133.1 or subsection (b-1) of Section 16-136.1,
whichever is applicable; and
(ii) to have his or her eligibility for automatic
annual increases in retirement annuity postponed as

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provided in subsection (a-2) of Section 16-133.1 or
subsection (b-2) of Section 16-136.1, whichever is
applicable; or
(2) to not agree to items (i) and (ii) as set forth in
paragraph (1) of this subsection and to be subject to
subsection (c) of this Section.
The election required under this subsection (a-5) shall be
made by each Tier I retiree no earlier than January 1, 2013 and
no later than May 31, 2013, except that:
(i) a person who becomes a Tier I retiree under this
Article on or after January 1, 2013 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 before June 1, 2013 shall take effect
on July 1, 2013. Elections that are made or deemed to be made
on or after June 1, 2013 shall take effect on the first day of
the month following the month in which the election is made or

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deemed to be made.
(b) As adequate and legal consideration provided under this
amendatory Act of the 97th 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 salary under
Section 16-121.
As adequate and legal consideration provided under this
amendatory Act of the 97th 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 salary under Section 16-121.
(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 expressly and
irrevocably as not constituting salary under Section 16-121,
and the employee may not accept any future increase in income

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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 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 expressly and irrevocably as not constituting salary
under Section 16-121, and the employee 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
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

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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.
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 97th General Assembly to provide information
concerning the impact of the election under this Section.
In no event shall the System, its staff, or the Board be
held liable for any information given to a member, beneficiary,

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or annuitant regarding the elections under 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 "salary"
under Section 16-121 to any Tier I employee, or Tier I retiree
returning to active service, who has made an election under
paragraph (2) or subsection (a) or (a-5) of Section 16-131.7. A
Tier I employee, or Tier I retiree returning to active service,
who has made an election under paragraph (2) or subsection (a)
or (a-5) of Section 16-131.7 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) 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 461 (a) of the Internal Revenue Code of 1986.
(40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)
Sec. 16-133.1. Automatic annual increase in annuity.
(a) Each member with creditable service and retiring on or
after August 26, 1969 is entitled to the automatic annual
increases in annuity provided under this Section while
receiving a retirement annuity or disability retirement

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annuity from the system.
An annuitant shall first be entitled to an initial increase
under this Section on the January 1 next following the first
anniversary of retirement, or January 1 of the year next
following attainment of age 61, whichever is later. At such
time, the system shall pay an initial increase determined as
follows or as provided in subsections (a-1) and (a-2):
(1) 1.5% of the originally granted retirement annuity
or disability retirement annuity multiplied by the number
of years elapsed, if any, from the date of retirement until
January 1, 1972, plus
(2) 2% of the originally granted annuity multiplied by
the number of years elapsed, if any, from the date of
retirement or January 1, 1972, whichever is later, until
January 1, 1978, plus
(3) 3% of the originally granted annuity multiplied by
the number of years elapsed from the date of retirement or
January 1, 1978, whichever is later, until the effective
date of the initial increase.
However, the initial annual increase calculated under this
Section for the recipient of a disability retirement annuity
granted under Section 16-149.2 shall be reduced by an amount
equal to the total of all increases in that annuity received
under Section 16-149.5 (but not exceeding 100% of the amount of
the initial increase otherwise provided under this Section).
Following the initial increase, automatic annual increases

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in annuity shall be payable on each January 1 thereafter during
the lifetime of the annuitant, determined as a percentage of
the originally granted retirement annuity or disability
retirement annuity for increases granted prior to January 1,
1990, and calculated as a percentage of the total amount of
annuity, including previous increases under this Section, for
increases granted on or after January 1, 1990, as follows: 1.5%
for periods prior to January 1, 1972, 2% for periods after
December 31, 1971 and prior to January 1, 1978, and 3% for
periods after December 31, 1977, or as provided in subsections
(a-1) and (a-2).
(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 either subsection (a) or (a-5) of
Section 16-131.7, 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.

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(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
16-131.7, 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
16-131.7 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 automatic annual increases in annuity provided
under this Section shall not be applicable unless a member has
made contributions toward such increases for a period
equivalent to one full year of creditable service. If a member
contributes for service performed after August 26, 1969 but the
member becomes an annuitant before such contributions amount to
one full year's contributions based on the salary at the date
of retirement, he or she may pay the necessary balance of the
contributions to the system and be eligible for the automatic
annual increases in annuity provided under this Section.
(c) Each member shall make contributions toward the cost of

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the automatic annual increases in annuity as provided under
Section 16-152.
(d) An annuitant receiving a retirement annuity or
disability retirement annuity on July 1, 1969, who subsequently
re-enters service as a teacher is eligible for the automatic
annual increases in annuity provided under this Section if he
or she renders at least one year of creditable service
following the latest re-entry.
(e) In addition to the automatic annual increases in
annuity provided under this Section, an annuitant who meets the
service requirements of this Section and whose retirement
annuity or disability retirement annuity began on or before
January 1, 1971 shall receive, on January 1, 1981, an increase
in the annuity then being paid of one dollar per month for each
year of creditable service. On January 1, 1982, an annuitant
whose retirement annuity or disability retirement annuity
began on or before January 1, 1977 shall receive an increase in
the annuity then being paid of one dollar per month for each
year of creditable service.
On January 1, 1987, any annuitant whose retirement annuity
began on or before January 1, 1977, shall receive an increase
in the monthly retirement annuity equal to 8¢ per year of
creditable service times the number of years that have elapsed
since the annuity began.
(Source: P.A. 91-927, eff. 12-14-00.)

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(40 ILCS 5/16-133.6 new)
Sec. 16-133.6. Optional teacher early retirement without
discount. A Tier I employee or Tier I retiree who makes an
election under paragraph (1) of subsection (a) or (a-5) of
Section 16-131.7, retires on or after July 1, 2013, and applies
for a retirement annuity within 6 months of the last day of
teaching for which retirement contributions were required may
elect, at the time of application for a retirement annuity, to
make a one-time member contribution to the System and, thereby,
avoid the reduction in the retirement annuity for retirement
before age 60 specified in paragraph (B) of Section 16-133. The
exercise of the election shall also obligate the last employer
to make a one-time nonrefundable contribution to the System.
Substitute teachers wishing to exercise this election must
teach 85 or more days in one school term with one employer, who
shall be deemed the last employer for purposes of this Section.
The last day of teaching with that employer must be within 6
months of the date of application for retirement. All
substitute teaching credit applied toward the required 85 days
must be earned after June 30, 1990.
The one-time member and employer contributions shall be a
percentage of the cost of this benefit as determined by the
System. However, when determining the one-time member and
employer contributions, that part of a member's salary with the
same employer which exceeds the annual salary rate for the
preceding year by more than 20% shall be excluded. The member

09700SB1673ham007 - 167 - LRB097 07605 EFG 70502 a
contribution shall be at the rate of 50% of the cost of the
benefits as determined by the System. The employer contribution
shall be at the rate of 50% of the cost of the benefits as
determined by the System.
Upon receipt of the application and election, the System
shall determine the one-time employee and employer
contributions required. The member contribution shall be
credited to the individual account of the member and the
employer contribution shall be credited to the Benefit Trust
Reserve. The avoidance of the reduction in retirement annuity
provided under this Section is not applicable until the
member's contribution, if any, has been received by the System;
however, the date that contribution is received shall not be
considered in determining the effective date of retirement.
The number of members working for a single employer who may
retire under this Section in any year may be limited at the
option of the employer to a specified percentage of those
eligible, not less than 10%, with the right to participate to
be allocated among those applying on the basis of seniority in
the service of the employer.
(40 ILCS 5/16-136.1) (from Ch. 108 1/2, par. 16-136.1)
Sec. 16-136.1. Annual increase for certain annuitants.
(a) Any annuitant receiving a retirement annuity on June
30, 1969 and any member retiring after June 30, 1969 shall be
eligible for the annual increases provided under this Section

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provided the annuitant is ineligible for the automatic annual
increase in annuity provided under Section 16-133.1, and
provided further that (1) retirement occurred at age 55 or over
and was based on 5 or more years of creditable service or (2)
if retirement occurred prior to age 55, the retirement annuity
was based on 20 or more years of creditable service.
(b) Subject to the provisions of subsections (b-1) and
(b-2), an An annuitant entitled to increases under this Section
shall be entitled to the initial increase as of the later of:
(1) January 1 following attainment of age 65, (2) January 1
following the first anniversary of retirement, or (3) the first
day of the month following receipt of the required qualifying
contribution from the annuitant. The initial monthly increase
shall be computed on the basis of the period elapsed between
the later of the date of last retirement or attainment of age
50 and the date of qualification for the initial increase, at
the rate of 1 1/2% of the original monthly retirement annuity
per year for periods prior to September 1, 1971, and at the
rate of 2% per year for periods between September 1, 1971 and
September 1, 1978, and at the rate of 3% per year for periods
thereafter.
Subject to the provisions of subsections (b-1) and (b-2),
an An annuitant who has received an initial increase under this
Section, shall be entitled, on each January 1 following the
granting of the initial increase, to an increase of 3% of the
original monthly retirement annuity for increases granted

09700SB1673ham007 - 169 - LRB097 07605 EFG 70502 a
prior to January 1, 1990, and equal to 3% of the total annuity,
including previous increases under this Section, for increases
granted on or after January 1, 1990. The original monthly
retirement annuity for computations under this subsection (b)
shall be considered to be $83.34 for any annuitant entitled to
benefits under Section 16-134. The minimum original disability
retirement annuity for computations under this subsection (b)
shall be considered to be $33.34 per month for any annuitant
retired on account of disability.
(b-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 either subsection (a) or (a-5) of
Section 16-131.7, 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.
(b-2) Notwithstanding any other provision of this Article,
for a Tier I employee or Tier I retiree who made the election

09700SB1673ham007 - 170 - LRB097 07605 EFG 70502 a
under paragraph (1) of subsection (a) or (a-5) of Section
16-131.7, 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
16-131.7 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.
(c) An annuitant who otherwise qualifies for annual
increases under this Section must make a one-time payment of 1%
of the monthly final average salary for each full year of the
creditable service forming the basis of the retirement annuity
or, if the retirement annuity was not computed using final
average salary, 1% of the original monthly retirement annuity
for each full year of service forming the basis of the
retirement annuity.
(d) In addition to other increases which may be provided by
this Section, regardless of creditable service, annuitants not
meeting the service requirements of Section 16-133.1 and whose
retirement annuity began on or before January 1, 1971 shall
receive, on January 1, 1981, an increase in the retirement

09700SB1673ham007 - 171 - LRB097 07605 EFG 70502 a
annuity then being paid of one dollar per month for each year
of creditable service forming the basis of the retirement
allowance. On January 1, 1982, annuitants whose retirement
annuity began on or before January 1, 1977, shall receive an
increase in the retirement annuity then being paid of one
dollar per month for each year of creditable service.
On January 1, 1987, any annuitant whose retirement annuity
began on or before January 1, 1977, shall receive an increase
in the monthly retirement annuity equal to 8¢ per year of
creditable service times the number of years that have elapsed
since the annuity began.
(Source: P.A. 86-273.)
(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
Sec. 16-158. Contributions by State and other employing
units.
(a) Except as otherwise provided in this Section, the The
State shall make contributions to the System by means of
appropriations from the Common School Fund and other State
funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial

09700SB1673ham007 - 172 - LRB097 07605 EFG 70502 a
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(b-3).
(a-1) Annually, on or before November 15, the Board shall
certify to the Governor the amount of the required State
contribution for the coming fiscal year. The certification
shall include a copy of the actuarial recommendations upon
which it is based.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
On or before July 1, 2005 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
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 June 15, 2010, 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.

09700SB1673ham007 - 173 - LRB097 07605 EFG 70502 a
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary 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 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) Through State fiscal year 1995, the State contributions
shall be paid to the System in accordance with Section 18-7 of
the School Code.
(b-1) Beginning in State fiscal year 1996, on the 15th day
of each month, or as soon thereafter as may be practicable, the
Board shall submit vouchers for payment of State contributions

09700SB1673ham007 - 174 - LRB097 07605 EFG 70502 a
to the System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a-1). From the effective date of this amendatory Act of the
93rd General Assembly through June 30, 2004, the Board shall
not submit vouchers for the remainder of fiscal year 2004 in
excess of the fiscal year 2004 certified contribution amount
determined under this Section after taking into consideration
the transfer to the System under subsection (a) of Section
6z-61 of the State Finance Act. These vouchers shall be paid by
the State Comptroller and Treasurer by warrants drawn on the
funds appropriated to the System for that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(b-2) Allocations from the Common School Fund apportioned
to school districts not coming under this System shall not be
diminished or affected by the provisions of this Article.
(b-3) Except as otherwise provided in this Section, for For
State fiscal years 2012 through 2045, the minimum contribution
to the System to be made by the State for each fiscal year

09700SB1673ham007 - 175 - LRB097 07605 EFG 70502 a
shall be an amount determined by the System to be sufficient to
bring the total assets of the System up to 90% of the total
actuarial liabilities of the System by the end of State fiscal
year 2045. In making these determinations, the required State
contribution shall be calculated each year as a level
percentage of payroll over the years remaining to and including
fiscal year 2045 and shall be determined under the projected
unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that in the
following specified State fiscal years, the State contribution
to the System shall not be less than the following indicated
percentages of the applicable employee payroll, even if the
indicated percentage will produce a State contribution in
excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary
certification made under subsection (a-1) before the effective
date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
2003; and 13.56% in FY 2004.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$534,627,700.

09700SB1673ham007 - 176 - LRB097 07605 EFG 70502 a
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$738,014,500.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$2,089,268,000 and shall be made from the proceeds of bonds
sold in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2010, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable.
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 subsection (a-1) of this Section 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

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the Common School Fund in fiscal year 2011, and (iii) any
reduction in bond proceeds due to the issuance of discounted
bonds, if applicable. This amount shall include, in addition to
the amount certified by the System, an amount necessary to meet
employer contributions required by the State as an employer
under paragraph (e) of this Section, which may also be used by
the System for contributions required by paragraph (a) of
Section 16-127.
Except as otherwise provided in this Section, beginning
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the

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required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under subsection (a-1), shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued 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-5) If at least 50% of the Tier I employees making an
election under Section 16-131.7 before June 1, 2013 choose the

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option under paragraph (1) of subsection (a) of that Section,
then:
(1) In lieu of the State contributions required under
subsection (b-3), for State fiscal years 2014 through 2043
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 2043. 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 2043 and shall be determined under the projected unit
credit actuarial cost method.
(2) Beginning in State fiscal year 2044, 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.
(b-6) If less than 50% of the Tier I employees making an
election under Section 16-131.7 before June 1, 2013 choose the
option under paragraph (1) of subsection (a) of that Section,
then:
(1) Instead of the annual required contribution
otherwise specified in subsection (b-5) of this Section,

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the annual required contribution to the System to be made
by the State shall be determined under subsection (b-3) of
this Section.
(2) As soon as possible after June 1, 2013, the Board
shall recertify the annual required contribution by the
State for State fiscal year 2014.
(c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and all
expenses in connection with the administration and operation
thereof, are obligations of the State.
If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs based
upon that service, as determined by the System. Employer
contributions, based on salary paid to members from federal
funds, may be forwarded by the distributing agency of the State
of Illinois to the System prior to allocation, in an amount
determined in accordance with guidelines established by such
agency and the System.
(d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be forwarded

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

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

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the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
(f) If the amount of a teacher's salary for any school year
used to determine final average salary exceeds the member's
annual full-time salary rate with the same employer for the
previous school year by more than 6%, the teacher's employer
shall pay to the System, in addition to all other payments
required under this Section and in accordance with guidelines
established by the System, the present value of the increase in
benefits resulting from the portion of the increase in salary
that is in excess of 6%. This present value shall be computed
by the System on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the
System that is available at the time of the computation. If a
teacher's salary for the 2005-2006 school year is used to
determine final average salary under this subsection (f), then
the changes made to this subsection (f) by Public Act 94-1057
shall apply in calculating whether the increase in his or her
salary is in excess of 6%. For the purposes of this Section,
change in employment under Section 10-21.12 of the School Code
on or after June 1, 2005 shall constitute a change in employer.
The System may require the employer to provide any pertinent
information or documentation. The changes made to this
subsection (f) by this amendatory Act of the 94th General
Assembly apply without regard to whether the teacher was in

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service on or after its effective date. The changes to this
subsection (removing the 6% increase permitted without payment
to the System by the employer) made by this amendatory Act of
the 97th General Assembly do not apply to a teacher who is
covered by a collective bargaining agreement or employment
contract in effect on the effective date of this amendatory Act
that provides for such increases, until such time as that
agreement or contract expires or is amended or renewed.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculations used to determine the amount
due. If the employer disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the System
in writing for a recalculation. The application must specify in
detail the grounds of the dispute and, if the employer asserts
that the calculation is subject to subsection (g) or (h) of
this Section, must include an affidavit setting forth and
attesting to all facts within the employer's knowledge that are
pertinent to the applicability of that subsection. Upon
receiving a timely application for recalculation, the System
shall review the application and, if appropriate, recalculate
the amount due.
The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid

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

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district during a school year and (ii) the salary increases are
equal to or less than the rate of pay for classroom instruction
computed on the teacher's current salary and work schedule.
When assessing payment for any amount due under subsection
(f), the System shall exclude a salary increase resulting from
a promotion (i) for which the employee is required to hold a
certificate or supervisory endorsement issued by the State
Teacher Certification Board that is a different certification
or supervisory endorsement than is required for the teacher's
previous position and (ii) to a position that has existed and
been filled by a member for no less than one complete academic
year and the salary increase from the promotion is an increase
that results in an amount no greater than the lesser of the
average salary paid for other similar positions in the district
requiring the same certification or the amount stipulated in
the collective bargaining agreement for a similar position
requiring the same certification.
When assessing payment for any amount due under subsection
(f), the System shall exclude any payment to the teacher from
the State of Illinois or the State Board of Education over
which the employer does not have discretion, notwithstanding
that the payment is included in the computation of final
average salary.
(h) When assessing payment for any amount due under
subsection (f), the System shall exclude any salary increase
described in subsection (g) of this Section given on or after

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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 (f) of this Section.
(i) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(j) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:

09700SB1673ham007 - 188 - LRB097 07605 EFG 70502 a
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.
(k) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(l) If the System submits a voucher for monthly
contributions from the State as required by this Section and
the State fails to pay within 90 days of receipt of such a
voucher, the Board shall submit a written request to the
Comptroller seeking payment. A copy of the request shall be
filed with the Secretary of State, and the Secretary of State
shall provide copies to the Governor and General Assembly. No
earlier than the 16th day after filing a request with the
Secretary of State, the Board shall have the right to commence
a mandamus action in the Supreme Court of Illinois to compel
the Comptroller to satisfy the voucher by making payment from
the General Revenue Fund. This Section constitutes an express
waiver of the State's sovereign immunity solely to the extent
it permits the Board to commence a mandamus action in the
Illinois Supreme Court to compel the Comptroller to pay a

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voucher for monthly contributions from the State as required in
this Section.
(Source: P.A. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
1-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
(40 ILCS 5/16-203)
Sec. 16-203. 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 or Article 1 by Public Act
95-910 or this amendatory Act of the 97th 95th 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

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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
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

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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; 95-910, eff. 8-26-08.)
(40 ILCS 5/18-140) (from Ch. 108 1/2, par. 18-140)
Sec. 18-140. To certify required State contributions and
submit vouchers.
(a) The Board shall certify to the Governor, on or before
November 15 of each year until November 15, 2011, the amount of
the required State contribution to the System for the following
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.
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

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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 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.
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

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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 (c) 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

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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.
(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11.)
Section 35. The School Code is amended by 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,
15-134.6, or 16-131.7 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.

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(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
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, 15-134.6,
or 16-131.7 of the Illinois Pension Code.
For the purpose of this Section a teacher's salary shall

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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
schedule (subject to any applicable restrictions in Section
14-106.5, 15-134.6, or 16-131.7 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 40. 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

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classification plan approved by the Merit Board.
(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 14-106.5, 15-134.6, or
16-131.7 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. Any rates or ranges
established prior to January 1, 1952, and hereafter, shall not
be changed except in accordance with the procedures herein

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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
classified service of the State Universities Civil Service

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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
changes in such rules.

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(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 45. The University of Illinois Act is amended by
adding Section 80 as follows:
(110 ILCS 305/80 new)
Sec. 80. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 50. The Southern Illinois University Management

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Act is amended by adding Section 65 as follows:
(110 ILCS 520/65 new)
Sec. 65. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 55. The Chicago State University Law is amended by
adding Section 5-175 as follows:
(110 ILCS 660/5-175 new)
Sec. 5-175. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 60. The Eastern Illinois University Law is amended
by adding Section 10-175 as follows:
(110 ILCS 665/10-175 new)
Sec. 10-175. 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

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14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 65. The Governors State University Law is amended
by adding Section 15-175 as follows:
(110 ILCS 670/15-175 new)
Sec. 15-175. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 70. The Illinois State University Law is amended by
adding Section 20-180 as follows:
(110 ILCS 675/20-180 new)
Sec. 20-180. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 75. The Northeastern Illinois University Law is
amended by adding Section 25-175 as follows:

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(110 ILCS 680/25-175 new)
Sec. 25-175. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 80. The Northern Illinois University Law is amended
by adding Section 30-185 as follows:
(110 ILCS 685/30-185 new)
Sec. 30-185. 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
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.
Section 85. The Western Illinois University Law is amended
by adding Section 35-180 as follows:
(110 ILCS 690/35-180 new)
Sec. 35-180. Future increases in income. Western Illinois
University must not pay, offer, or agree to pay any future
increase in income, as that term is defined in Section
14-106.5, 15-134.6, or 16-131.7 of the Illinois Pension Code,
to any person in a manner that violates any of those Sections.

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Section 90. 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
14-106.5, 15-134.6, or 16-131.7 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
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)

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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 14-106.5, 15-134.6, or
16-131.7 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
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.)

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Section 95. 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, 15-134.6, or 16-131.7 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 97th 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, 15-134.6, or 16-131.7 of the
Illinois Pension Code), hours or conditions of employment about

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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 97th 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 Sections 14-106.5, 15-134.6, and 16-131.7 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 Section 14-106.5, 15-134.6, or 16-131.7 of the
Illinois Pension Code, as well as the changes, impact of
changes, and implementation of changes set forth in this
amendatory Act of the 97th 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 100. The State Mandates Act is amended by adding
Section 8.36 as follows:

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(30 ILCS 805/8.36 new)
Sec. 8.36. 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 97th General Assembly.
Section 105. Severability and inseverability. The
provisions set forth in Sections 5, 15, 20, 25, 95, 100, and
999 of this Act, as well as Sections 2-134, 7-109, 14-135.08,
15-106, 15-107, 15-163, 15-165, and 16-106, subsection (a-5) of
Section 16-158, and Section 18-140 of the Illinois Pension
Code, as set forth in Section 30 of this Act, are severable
pursuant to Section 1.31 of the Statute on Statutes, and are
not mutually dependent upon the provisions set forth in any
other Section of this Act.
Section 10 of this Act, the other provisions of Section 30
of this Act, and Sections 35 through 90 of this Act are
mutually dependent and inseverable. If any of those provisions
is held invalid other than as applied to a particular person or
circumstance, then all of those provisions are invalid.".
Section 999. Effective date. This Act takes effect upon
becoming law.".