Illinois-2017-SB2172-Introduced

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB2172

Introduced 3/15/2017, by Sen. Michael Connelly

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Pension Code. Restricts participation in the General Assembly Retirement System to persons who became participants before the effective date. Provides separate benefits for persons who, on or after 6 months after the effective date, first become participants or members under the State Universities or Downstate Teachers Article or a noncovered participant under the State Employees Article. Requires those retirement systems to establish a defined contribution plan for certain members. In the IMRF, Chicago Municipal, Cook County, Cook County Forest Preserve, Chicago Laborers, Chicago Park District, Metropolitan Water Reclamation District, and Chicago Teachers Articles, establishes similar benefits if the governing body of the unit of local government adopts those benefits by resolution or ordinance. In the State Employee, State Universities, and Downstate Teachers Articles, requires those Systems to offer certain inactive members the opportunity to elect to receive an accelerated pension benefit payment equal to 70% of the net present value of their pension benefits in lieu of receiving any pension benefit. In the 5 State-funded retirement systems and the Chicago Teachers Pension Fund, makes funding changes. In the State Universities and Downstate Teachers Articles, shifts certain costs to the local employer. In the Chicago Teachers Article, requires the State to contribute $215,200,000 for fiscal year 2017 and provides a continuing appropriation from the Common School Fund for that contribution. Amends the Budget Stabilization Act. Provides for the transfer of certain amounts from the General Revenue Fund to the Pension Stabilization Fund. Makes other changes. Effective immediately.

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FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

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1 AN ACT concerning public employee benefits.

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

3 represented in the General Assembly:

4 Section 5. The State Employees Group Insurance Act of 1971

5 is amended by changing Sections 3 and 10 as follows:

6 (5 ILCS 375/3) (from Ch. 127, par. 523)

7 Sec. 3. Definitions. Unless the context otherwise

8 requires, the following words and phrases as used in this Act

9 shall have the following meanings. The Department may define

10 these and other words and phrases separately for the purpose of

11 implementing specific programs providing benefits under this

12 Act.

13 (a) "Administrative service organization" means any

14 person, firm or corporation experienced in the handling of

15 claims which is fully qualified, financially sound and capable

16 of meeting the service requirements of a contract of

17 administration executed with the Department.

18 (b) "Annuitant" means (1) an employee who retires, or has

19 retired, on or after January 1, 1966 on an immediate annuity

20 under the provisions of Articles 2, 14 (including an employee

21 who has elected to receive an alternative retirement

22 cancellation payment under Section 14-108.5 of the Illinois

23 Pension Code in lieu of an annuity or who meets the criteria

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1 for retirement, but in lieu of receiving an annuity under that

2 Article has elected to receive an accelerated pension benefit

3 payment under Section 14-147.5 of that Article), 15 (including

4 an employee who has retired under the optional retirement

5 program established under Section 15-158.2 or who meets the

6 criteria for retirement but in lieu of receiving an annuity

7 under that Article has elected to receive an accelerated

8 pension benefit payment under Section 15-185.5 of the Article),

9 paragraphs (2), (3), or (5) of Section 16-106 (including an

10 employee who meets the criteria for retirement, but in lieu of

11 receiving an annuity under that Article has elected to receive

12 an accelerated pension benefit payment under Section 16-190.5

13 of the Illinois Pension Code), or Article 18 of the Illinois

14 Pension Code; (2) any person who was receiving group insurance

15 coverage under this Act as of March 31, 1978 by reason of his

16 status as an annuitant, even though the annuity in relation to

17 which such coverage was provided is a proportional annuity

18 based on less than the minimum period of service required for a

19 retirement annuity in the system involved; (3) any person not

20 otherwise covered by this Act who has retired as a

21 participating member under Article 2 of the Illinois Pension

22 Code but is ineligible for the retirement annuity under Section

23 2-119 of the Illinois Pension Code; (4) the spouse of any

24 person who is receiving a retirement annuity under Article 18

25 of the Illinois Pension Code and who is covered under a group

26 health insurance program sponsored by a governmental employer

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1 other than the State of Illinois and who has irrevocably

2 elected to waive his or her coverage under this Act and to have

3 his or her spouse considered as the "annuitant" under this Act

4 and not as a "dependent"; or (5) an employee who retires, or

5 has retired, from a qualified position, as determined according

6 to rules promulgated by the Director, under a qualified local

7 government, a qualified rehabilitation facility, a qualified

8 domestic violence shelter or service, or a qualified child

9 advocacy center. (For definition of "retired employee", see (p)

10 post).

11 (b-5) (Blank).

12 (b-6) (Blank).

13 (b-7) (Blank).

14 (c) "Carrier" means (1) an insurance company, a corporation

15 organized under the Limited Health Service Organization Act or

16 the Voluntary Health Services Plan Act, a partnership, or other

17 nongovernmental organization, which is authorized to do group

18 life or group health insurance business in Illinois, or (2) the

19 State of Illinois as a self-insurer.

20 (d) "Compensation" means salary or wages payable on a

21 regular payroll by the State Treasurer on a warrant of the

22 State Comptroller out of any State, trust or federal fund, or

23 by the Governor of the State through a disbursing officer of

24 the State out of a trust or out of federal funds, or by any

25 Department out of State, trust, federal or other funds held by

26 the State Treasurer or the Department, to any person for

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1 personal services currently performed, and ordinary or

2 accidental disability benefits under Articles 2, 14, 15

3 (including ordinary or accidental disability benefits under

4 the optional retirement program established under Section

5 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or

6 Article 18 of the Illinois Pension Code, for disability

7 incurred after January 1, 1966, or benefits payable under the

8 Workers' Compensation or Occupational Diseases Act or benefits

9 payable under a sick pay plan established in accordance with

10 Section 36 of the State Finance Act. "Compensation" also means

11 salary or wages paid to an employee of any qualified local

12 government, qualified rehabilitation facility, qualified

13 domestic violence shelter or service, or qualified child

14 advocacy center.

15 (e) "Commission" means the State Employees Group Insurance

16 Advisory Commission authorized by this Act. Commencing July 1,

17 1984, "Commission" as used in this Act means the Commission on

18 Government Forecasting and Accountability as established by

19 the Legislative Commission Reorganization Act of 1984.

20 (f) "Contributory", when referred to as contributory

21 coverage, shall mean optional coverages or benefits elected by

22 the member toward the cost of which such member makes

23 contribution, or which are funded in whole or in part through

24 the acceptance of a reduction in earnings or the foregoing of

25 an increase in earnings by an employee, as distinguished from

26 noncontributory coverage or benefits which are paid entirely by

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1 the State of Illinois without reduction of the member's salary.

2 (g) "Department" means any department, institution, board,

3 commission, officer, court or any agency of the State

4 government receiving appropriations and having power to

5 certify payrolls to the Comptroller authorizing payments of

6 salary and wages against such appropriations as are made by the

7 General Assembly from any State fund, or against trust funds

8 held by the State Treasurer and includes boards of trustees of

9 the retirement systems created by Articles 2, 14, 15, 16 and 18

10 of the Illinois Pension Code. "Department" also includes the

11 Illinois Comprehensive Health Insurance Board, the Board of

12 Examiners established under the Illinois Public Accounting

13 Act, and the Illinois Finance Authority.

14 (h) "Dependent", when the term is used in the context of

15 the health and life plan, means a member's spouse and any child

16 (1) from birth to age 26 including an adopted child, a child

17 who lives with the member from the time of the filing of a

18 petition for adoption until entry of an order of adoption, a

19 stepchild or adjudicated child, or a child who lives with the

20 member if such member is a court appointed guardian of the

21 child or (2) age 19 or over who has a mental or physical

22 disability from a cause originating prior to the age of 19 (age

23 26 if enrolled as an adult child dependent). For the health

24 plan only, the term "dependent" also includes (1) any person

25 enrolled prior to the effective date of this Section who is

26 dependent upon the member to the extent that the member may

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1 claim such person as a dependent for income tax deduction

2 purposes and (2) any person who has received after June 30,

3 2000 an organ transplant and who is financially dependent upon

4 the member and eligible to be claimed as a dependent for income

5 tax purposes. A member requesting to cover any dependent must

6 provide documentation as requested by the Department of Central

7 Management Services and file with the Department any and all

8 forms required by the Department.

9 (i) "Director" means the Director of the Illinois

10 Department of Central Management Services.

11 (j) "Eligibility period" means the period of time a member

12 has to elect enrollment in programs or to select benefits

13 without regard to age, sex or health.

14 (k) "Employee" means and includes each officer or employee

15 in the service of a department who (1) receives his

16 compensation for service rendered to the department on a

17 warrant issued pursuant to a payroll certified by a department

18 or on a warrant or check issued and drawn by a department upon

19 a trust, federal or other fund or on a warrant issued pursuant

20 to a payroll certified by an elected or duly appointed officer

21 of the State or who receives payment of the performance of

22 personal services on a warrant issued pursuant to a payroll

23 certified by a Department and drawn by the Comptroller upon the

24 State Treasurer against appropriations made by the General

25 Assembly from any fund or against trust funds held by the State

26 Treasurer, and (2) is employed full-time or part-time in a

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1 position normally requiring actual performance of duty during

2 not less than 1/2 of a normal work period, as established by

3 the Director in cooperation with each department, except that

4 persons elected by popular vote will be considered employees

5 during the entire term for which they are elected regardless of

6 hours devoted to the service of the State, and (3) except that

7 "employee" does not include any person who is not eligible by

8 reason of such person's employment to participate in one of the

9 State retirement systems under Articles 2, 14, 15 (either the

10 regular Article 15 system or the optional retirement program

11 established under Section 15-158.2) or 18, or under paragraph

12 (2), (3), or (5) of Section 16-106, of the Illinois Pension

13 Code, but such term does include persons who are employed

14 during the 6 month qualifying period under Article 14 of the

15 Illinois Pension Code. Such term also includes any person who

16 (1) after January 1, 1966, is receiving ordinary or accidental

17 disability benefits under Articles 2, 14, 15 (including

18 ordinary or accidental disability benefits under the optional

19 retirement program established under Section 15-158.2),

20 paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of

21 the Illinois Pension Code, for disability incurred after

22 January 1, 1966, (2) receives total permanent or total

23 temporary disability under the Workers' Compensation Act or

24 Occupational Disease Act as a result of injuries sustained or

25 illness contracted in the course of employment with the State

26 of Illinois, or (3) is not otherwise covered under this Act and

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1 has retired as a participating member under Article 2 of the

2 Illinois Pension Code but is ineligible for the retirement

3 annuity under Section 2-119 of the Illinois Pension Code.

4 However, a person who satisfies the criteria of the foregoing

5 definition of "employee" except that such person is made

6 ineligible to participate in the State Universities Retirement

7 System by clause (4) of subsection (a) of Section 15-107 of the

8 Illinois Pension Code is also an "employee" for the purposes of

9 this Act. "Employee" also includes any person receiving or

10 eligible for benefits under a sick pay plan established in

11 accordance with Section 36 of the State Finance Act. "Employee"

12 also includes (i) each officer or employee in the service of a

13 qualified local government, including persons appointed as

14 trustees of sanitary districts regardless of hours devoted to

15 the service of the sanitary district, (ii) each employee in the

16 service of a qualified rehabilitation facility, (iii) each

17 full-time employee in the service of a qualified domestic

18 violence shelter or service, and (iv) each full-time employee

19 in the service of a qualified child advocacy center, as

20 determined according to rules promulgated by the Director.

21 (l) "Member" means an employee, annuitant, retired

22 employee or survivor. In the case of an annuitant or retired

23 employee who first becomes an annuitant or retired employee on

24 or after the effective date of this amendatory Act of the 97th

25 General Assembly, the individual must meet the minimum vesting

26 requirements of the applicable retirement system in order to be

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1 eligible for group insurance benefits under that system. In the

2 case of a survivor who first becomes a survivor on or after the

3 effective date of this amendatory Act of the 97th General

4 Assembly, the deceased employee, annuitant, or retired

5 employee upon whom the annuity is based must have been eligible

6 to participate in the group insurance system under the

7 applicable retirement system in order for the survivor to be

8 eligible for group insurance benefits under that system.

9 (m) "Optional coverages or benefits" means those coverages

10 or benefits available to the member on his or her voluntary

11 election, and at his or her own expense.

12 (n) "Program" means the group life insurance, health

13 benefits and other employee benefits designed and contracted

14 for by the Director under this Act.

15 (o) "Health plan" means a health benefits program offered

16 by the State of Illinois for persons eligible for the plan.

17 (p) "Retired employee" means any person who would be an

18 annuitant as that term is defined herein but for the fact that

19 such person retired prior to January 1, 1966. Such term also

20 includes any person formerly employed by the University of

21 Illinois in the Cooperative Extension Service who would be an

22 annuitant but for the fact that such person was made ineligible

23 to participate in the State Universities Retirement System by

24 clause (4) of subsection (a) of Section 15-107 of the Illinois

25 Pension Code.

26 (q) "Survivor" means a person receiving an annuity as a

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1 survivor of an employee or of an annuitant. "Survivor" also

2 includes: (1) the surviving dependent of a person who satisfies

3 the definition of "employee" except that such person is made

4 ineligible to participate in the State Universities Retirement

5 System by clause (4) of subsection (a) of Section 15-107 of the

6 Illinois Pension Code; (2) the surviving dependent of any

7 person formerly employed by the University of Illinois in the

8 Cooperative Extension Service who would be an annuitant except

9 for the fact that such person was made ineligible to

10 participate in the State Universities Retirement System by

11 clause (4) of subsection (a) of Section 15-107 of the Illinois

12 Pension Code; and (3) the surviving dependent of a person who

13 was an annuitant under this Act by virtue of receiving an

14 alternative retirement cancellation payment under Section

15 14-108.5 of the Illinois Pension Code.

16 (q-2) "SERS" means the State Employees' Retirement System

17 of Illinois, created under Article 14 of the Illinois Pension

18 Code.

19 (q-3) "SURS" means the State Universities Retirement

20 System, created under Article 15 of the Illinois Pension Code.

21 (q-4) "TRS" means the Teachers' Retirement System of the

22 State of Illinois, created under Article 16 of the Illinois

23 Pension Code.

24 (q-5) (Blank).

25 (q-6) (Blank).

26 (q-7) (Blank).

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1 (r) "Medical services" means the services provided within

2 the scope of their licenses by practitioners in all categories

3 licensed under the Medical Practice Act of 1987.

4 (s) "Unit of local government" means any county,

5 municipality, township, school district (including a

6 combination of school districts under the Intergovernmental

7 Cooperation Act), special district or other unit, designated as

8 a unit of local government by law, which exercises limited

9 governmental powers or powers in respect to limited

10 governmental subjects, any not-for-profit association with a

11 membership that primarily includes townships and township

12 officials, that has duties that include provision of research

13 service, dissemination of information, and other acts for the

14 purpose of improving township government, and that is funded

15 wholly or partly in accordance with Section 85-15 of the

16 Township Code; any not-for-profit corporation or association,

17 with a membership consisting primarily of municipalities, that

18 operates its own utility system, and provides research,

19 training, dissemination of information, or other acts to

20 promote cooperation between and among municipalities that

21 provide utility services and for the advancement of the goals

22 and purposes of its membership; the Southern Illinois

23 Collegiate Common Market, which is a consortium of higher

24 education institutions in Southern Illinois; the Illinois

25 Association of Park Districts; and any hospital provider that

26 is owned by a county that has 100 or fewer hospital beds and

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1 has not already joined the program. "Qualified local

2 government" means a unit of local government approved by the

3 Director and participating in a program created under

4 subsection (i) of Section 10 of this Act.

5 (t) "Qualified rehabilitation facility" means any

6 not-for-profit organization that is accredited by the

7 Commission on Accreditation of Rehabilitation Facilities or

8 certified by the Department of Human Services (as successor to

9 the Department of Mental Health and Developmental

10 Disabilities) to provide services to persons with disabilities

11 and which receives funds from the State of Illinois for

12 providing those services, approved by the Director and

13 participating in a program created under subsection (j) of

14 Section 10 of this Act.

15 (u) "Qualified domestic violence shelter or service" means

16 any Illinois domestic violence shelter or service and its

17 administrative offices funded by the Department of Human

18 Services (as successor to the Illinois Department of Public

19 Aid), approved by the Director and participating in a program

20 created under subsection (k) of Section 10.

21 (v) "TRS benefit recipient" means a person who:

22 (1) is not a "member" as defined in this Section; and

23 (2) is receiving a monthly benefit or retirement

24 annuity under Article 16 of the Illinois Pension Code; and

25 (3) either (i) has at least 8 years of creditable

26 service under Article 16 of the Illinois Pension Code, or

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1 (ii) was enrolled in the health insurance program offered

2 under that Article on January 1, 1996, or (iii) is the

3 survivor of a benefit recipient who had at least 8 years of

4 creditable service under Article 16 of the Illinois Pension

5 Code or was enrolled in the health insurance program

6 offered under that Article on the effective date of this

7 amendatory Act of 1995, or (iv) is a recipient or survivor

8 of a recipient of a disability benefit under Article 16 of

9 the Illinois Pension Code.

10 (w) "TRS dependent beneficiary" means a person who:

11 (1) is not a "member" or "dependent" as defined in this

12 Section; and

13 (2) is a TRS benefit recipient's: (A) spouse, (B)

14 dependent parent who is receiving at least half of his or

15 her support from the TRS benefit recipient, or (C) natural,

16 step, adjudicated, or adopted child who is (i) under age

17 26, (ii) was, on January 1, 1996, participating as a

18 dependent beneficiary in the health insurance program

19 offered under Article 16 of the Illinois Pension Code, or

20 (iii) age 19 or over who has a mental or physical

21 disability from a cause originating prior to the age of 19

22 (age 26 if enrolled as an adult child).

23 "TRS dependent beneficiary" does not include, as indicated

24 under paragraph (2) of this subsection (w), a dependent of the

25 survivor of a TRS benefit recipient who first becomes a

26 dependent of a survivor of a TRS benefit recipient on or after

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1 the effective date of this amendatory Act of the 97th General

2 Assembly unless that dependent would have been eligible for

3 coverage as a dependent of the deceased TRS benefit recipient

4 upon whom the survivor benefit is based.

5 (x) "Military leave" refers to individuals in basic

6 training for reserves, special/advanced training, annual

7 training, emergency call up, activation by the President of the

8 United States, or any other training or duty in service to the

9 United States Armed Forces.

10 (y) (Blank).

11 (z) "Community college benefit recipient" means a person

12 who:

13 (1) is not a "member" as defined in this Section; and

14 (2) is receiving a monthly survivor's annuity or

15 retirement annuity under Article 15 of the Illinois Pension

16 Code; and

17 (3) either (i) was a full-time employee of a community

18 college district or an association of community college

19 boards created under the Public Community College Act

20 (other than an employee whose last employer under Article

21 15 of the Illinois Pension Code was a community college

22 district subject to Article VII of the Public Community

23 College Act) and was eligible to participate in a group

24 health benefit plan as an employee during the time of

25 employment with a community college district (other than a

26 community college district subject to Article VII of the

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1 Public Community College Act) or an association of

2 community college boards, or (ii) is the survivor of a

3 person described in item (i).

4 (aa) "Community college dependent beneficiary" means a

5 person who:

6 (1) is not a "member" or "dependent" as defined in this

7 Section; and

8 (2) is a community college benefit recipient's: (A)

9 spouse, (B) dependent parent who is receiving at least half

10 of his or her support from the community college benefit

11 recipient, or (C) natural, step, adjudicated, or adopted

12 child who is (i) under age 26, or (ii) age 19 or over and

13 has a mental or physical disability from a cause

14 originating prior to the age of 19 (age 26 if enrolled as

15 an adult child).

16 "Community college dependent beneficiary" does not

17 include, as indicated under paragraph (2) of this subsection

18 (aa), a dependent of the survivor of a community college

19 benefit recipient who first becomes a dependent of a survivor

20 of a community college benefit recipient on or after the

21 effective date of this amendatory Act of the 97th General

22 Assembly unless that dependent would have been eligible for

23 coverage as a dependent of the deceased community college

24 benefit recipient upon whom the survivor annuity is based.

25 (bb) "Qualified child advocacy center" means any Illinois

26 child advocacy center and its administrative offices funded by

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1 the Department of Children and Family Services, as defined by

2 the Children's Advocacy Center Act (55 ILCS 80/), approved by

3 the Director and participating in a program created under

4 subsection (n) of Section 10.

5 (Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)

6 (5 ILCS 375/10) (from Ch. 127, par. 530)

7 Sec. 10. Contributions by the State and members.

8 (a) The State shall pay the cost of basic non-contributory

9 group life insurance and, subject to member paid contributions

10 set by the Department or required by this Section and except as

11 provided in this Section, the basic program of group health

12 benefits on each eligible member, except a member, not

13 otherwise covered by this Act, who has retired as a

14 participating member under Article 2 of the Illinois Pension

15 Code but is ineligible for the retirement annuity under Section

16 2-119 of the Illinois Pension Code, and part of each eligible

17 member's and retired member's premiums for health insurance

18 coverage for enrolled dependents as provided by Section 9. The

19 State shall pay the cost of the basic program of group health

20 benefits only after benefits are reduced by the amount of

21 benefits covered by Medicare for all members and dependents who

22 are eligible for benefits under Social Security or the Railroad

23 Retirement system or who had sufficient Medicare-covered

24 government employment, except that such reduction in benefits

25 shall apply only to those members and dependents who (1) first

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1 become eligible for such Medicare coverage on or after July 1,

2 1992; or (2) are Medicare-eligible members or dependents of a

3 local government unit which began participation in the program

4 on or after July 1, 1992; or (3) remain eligible for, but no

5 longer receive Medicare coverage which they had been receiving

6 on or after July 1, 1992. The Department may determine the

7 aggregate level of the State's contribution on the basis of

8 actual cost of medical services adjusted for age, sex or

9 geographic or other demographic characteristics which affect

10 the costs of such programs.

11 The cost of participation in the basic program of group

12 health benefits for the dependent or survivor of a living or

13 deceased retired employee who was formerly employed by the

14 University of Illinois in the Cooperative Extension Service and

15 would be an annuitant but for the fact that he or she was made

16 ineligible to participate in the State Universities Retirement

17 System by clause (4) of subsection (a) of Section 15-107 of the

18 Illinois Pension Code shall not be greater than the cost of

19 participation that would otherwise apply to that dependent or

20 survivor if he or she were the dependent or survivor of an

21 annuitant under the State Universities Retirement System.

22 (a-1) (Blank).

23 (a-2) (Blank).

24 (a-3) (Blank).

25 (a-4) (Blank).

26 (a-5) (Blank).

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1 (a-6) (Blank).

2 (a-7) (Blank).

3 (a-8) Any annuitant, survivor, or retired employee may

4 waive or terminate coverage in the program of group health

5 benefits. Any such annuitant, survivor, or retired employee who

6 has waived or terminated coverage may enroll or re-enroll in

7 the program of group health benefits only during the annual

8 benefit choice period, as determined by the Director; except

9 that in the event of termination of coverage due to nonpayment

10 of premiums, the annuitant, survivor, or retired employee may

11 not re-enroll in the program.

12 (a-8.5) Beginning on the effective date of this amendatory

13 Act of the 97th General Assembly, the Director of Central

14 Management Services shall, on an annual basis, determine the

15 amount that the State shall contribute toward the basic program

16 of group health benefits on behalf of annuitants (including

17 individuals who (i) participated in the General Assembly

18 Retirement System, the State Employees' Retirement System of

19 Illinois, the State Universities Retirement System, the

20 Teachers' Retirement System of the State of Illinois, or the

21 Judges Retirement System of Illinois and (ii) qualify as

22 annuitants under subsection (b) of Section 3 of this Act),

23 survivors (including individuals who (i) receive an annuity as

24 a survivor of an individual who participated in the General

25 Assembly Retirement System, the State Employees' Retirement

26 System of Illinois, the State Universities Retirement System,

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1 the Teachers' Retirement System of the State of Illinois, or

2 the Judges Retirement System of Illinois and (ii) qualify as

3 survivors under subsection (q) of Section 3 of this Act), and

4 retired employees (as defined in subsection (p) of Section 3 of

5 this Act). The remainder of the cost of coverage for each

6 annuitant, survivor, or retired employee, as determined by the

7 Director of Central Management Services, shall be the

8 responsibility of that annuitant, survivor, or retired

9 employee.

10 Contributions required of annuitants, survivors, and

11 retired employees shall be the same for all retirement systems

12 and shall also be based on whether an individual has made an

13 election under Section 15-135.1 of the Illinois Pension Code.

14 Contributions may be based on annuitants', survivors', or

15 retired employees' Medicare eligibility, but may not be based

16 on Social Security eligibility.

17 (a-9) No later than May 1 of each calendar year, the

18 Director of Central Management Services shall certify in

19 writing to the Executive Secretary of the State Employees'

20 Retirement System of Illinois the amounts of the Medicare

21 supplement health care premiums and the amounts of the health

22 care premiums for all other retirees who are not Medicare

23 eligible.

24 A separate calculation of the premiums based upon the

25 actual cost of each health care plan shall be so certified.

26 The Director of Central Management Services shall provide

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1 to the Executive Secretary of the State Employees' Retirement

2 System of Illinois such information, statistics, and other data

3 as he or she may require to review the premium amounts

4 certified by the Director of Central Management Services.

5 The Department of Central Management Services, or any

6 successor agency designated to procure healthcare contracts

7 pursuant to this Act, is authorized to establish funds,

8 separate accounts provided by any bank or banks as defined by

9 the Illinois Banking Act, or separate accounts provided by any

10 savings and loan association or associations as defined by the

11 Illinois Savings and Loan Act of 1985 to be held by the

12 Director, outside the State treasury, for the purpose of

13 receiving the transfer of moneys from the Local Government

14 Health Insurance Reserve Fund. The Department may promulgate

15 rules further defining the methodology for the transfers. Any

16 interest earned by moneys in the funds or accounts shall inure

17 to the Local Government Health Insurance Reserve Fund. The

18 transferred moneys, and interest accrued thereon, shall be used

19 exclusively for transfers to administrative service

20 organizations or their financial institutions for payments of

21 claims to claimants and providers under the self-insurance

22 health plan. The transferred moneys, and interest accrued

23 thereon, shall not be used for any other purpose including, but

24 not limited to, reimbursement of administration fees due the

25 administrative service organization pursuant to its contract

26 or contracts with the Department.

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1 (a-10) To the extent that participation, benefits, or

2 premiums under this Act are based on a person's service credit

3 under an Article of the Illinois Pension Code, service credit

4 terminated in exchange for an accelerated pension benefit

5 payment under Section 14-147.5, 15-185.5, or 16-190.5 of that

6 Code shall be included in determining a person's service credit

7 for the purposes of this Act.

8 (b) State employees who become eligible for this program on

9 or after January 1, 1980 in positions normally requiring actual

10 performance of duty not less than 1/2 of a normal work period

11 but not equal to that of a normal work period, shall be given

12 the option of participating in the available program. If the

13 employee elects coverage, the State shall contribute on behalf

14 of such employee to the cost of the employee's benefit and any

15 applicable dependent supplement, that sum which bears the same

16 percentage as that percentage of time the employee regularly

17 works when compared to normal work period.

18 (c) The basic non-contributory coverage from the basic

19 program of group health benefits shall be continued for each

20 employee not in pay status or on active service by reason of

21 (1) leave of absence due to illness or injury, (2) authorized

22 educational leave of absence or sabbatical leave, or (3)

23 military leave. This coverage shall continue until expiration

24 of authorized leave and return to active service, but not to

25 exceed 24 months for leaves under item (1) or (2). This

26 24-month limitation and the requirement of returning to active

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1 service shall not apply to persons receiving ordinary or

2 accidental disability benefits or retirement benefits through

3 the appropriate State retirement system or benefits under the

4 Workers' Compensation or Occupational Disease Act.

5 (d) The basic group life insurance coverage shall continue,

6 with full State contribution, where such person is (1) absent

7 from active service by reason of disability arising from any

8 cause other than self-inflicted, (2) on authorized educational

9 leave of absence or sabbatical leave, or (3) on military leave.

10 (e) Where the person is in non-pay status for a period in

11 excess of 30 days or on leave of absence, other than by reason

12 of disability, educational or sabbatical leave, or military

13 leave, such person may continue coverage only by making

14 personal payment equal to the amount normally contributed by

15 the State on such person's behalf. Such payments and coverage

16 may be continued: (1) until such time as the person returns to

17 a status eligible for coverage at State expense, but not to

18 exceed 24 months or (2) until such person's employment or

19 annuitant status with the State is terminated (exclusive of any

20 additional service imposed pursuant to law).

21 (f) The Department shall establish by rule the extent to

22 which other employee benefits will continue for persons in

23 non-pay status or who are not in active service.

24 (g) The State shall not pay the cost of the basic

25 non-contributory group life insurance, program of health

26 benefits and other employee benefits for members who are

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1 survivors as defined by paragraphs (1) and (2) of subsection

2 (q) of Section 3 of this Act. The costs of benefits for these

3 survivors shall be paid by the survivors or by the University

4 of Illinois Cooperative Extension Service, or any combination

5 thereof. However, the State shall pay the amount of the

6 reduction in the cost of participation, if any, resulting from

7 the amendment to subsection (a) made by this amendatory Act of

8 the 91st General Assembly.

9 (h) Those persons occupying positions with any department

10 as a result of emergency appointments pursuant to Section 8b.8

11 of the Personnel Code who are not considered employees under

12 this Act shall be given the option of participating in the

13 programs of group life insurance, health benefits and other

14 employee benefits. Such persons electing coverage may

15 participate only by making payment equal to the amount normally

16 contributed by the State for similarly situated employees. Such

17 amounts shall be determined by the Director. Such payments and

18 coverage may be continued until such time as the person becomes

19 an employee pursuant to this Act or such person's appointment

20 is terminated.

21 (i) Any unit of local government within the State of

22 Illinois may apply to the Director to have its employees,

23 annuitants, and their dependents provided group health

24 coverage under this Act on a non-insured basis. To participate,

25 a unit of local government must agree to enroll all of its

26 employees, who may select coverage under either the State group

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1 health benefits plan or a health maintenance organization that

2 has contracted with the State to be available as a health care

3 provider for employees as defined in this Act. A unit of local

4 government must remit the entire cost of providing coverage

5 under the State group health benefits plan or, for coverage

6 under a health maintenance organization, an amount determined

7 by the Director based on an analysis of the sex, age,

8 geographic location, or other relevant demographic variables

9 for its employees, except that the unit of local government

10 shall not be required to enroll those of its employees who are

11 covered spouses or dependents under this plan or another group

12 policy or plan providing health benefits as long as (1) an

13 appropriate official from the unit of local government attests

14 that each employee not enrolled is a covered spouse or

15 dependent under this plan or another group policy or plan, and

16 (2) at least 50% of the employees are enrolled and the unit of

17 local government remits the entire cost of providing coverage

18 to those employees, except that a participating school district

19 must have enrolled at least 50% of its full-time employees who

20 have not waived coverage under the district's group health plan

21 by participating in a component of the district's cafeteria

22 plan. A participating school district is not required to enroll

23 a full-time employee who has waived coverage under the

24 district's health plan, provided that an appropriate official

25 from the participating school district attests that the

26 full-time employee has waived coverage by participating in a

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1 component of the district's cafeteria plan. For the purposes of

2 this subsection, "participating school district" includes a

3 unit of local government whose primary purpose is education as

4 defined by the Department's rules.

5 Employees of a participating unit of local government who

6 are not enrolled due to coverage under another group health

7 policy or plan may enroll in the event of a qualifying change

8 in status, special enrollment, special circumstance as defined

9 by the Director, or during the annual Benefit Choice Period. A

10 participating unit of local government may also elect to cover

11 its annuitants. Dependent coverage shall be offered on an

12 optional basis, with the costs paid by the unit of local

13 government, its employees, or some combination of the two as

14 determined by the unit of local government. The unit of local

15 government shall be responsible for timely collection and

16 transmission of dependent premiums.

17 The Director shall annually determine monthly rates of

18 payment, subject to the following constraints:

19 (1) In the first year of coverage, the rates shall be

20 equal to the amount normally charged to State employees for

21 elected optional coverages or for enrolled dependents

22 coverages or other contributory coverages, or contributed

23 by the State for basic insurance coverages on behalf of its

24 employees, adjusted for differences between State

25 employees and employees of the local government in age,

26 sex, geographic location or other relevant demographic

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1 variables, plus an amount sufficient to pay for the

2 additional administrative costs of providing coverage to

3 employees of the unit of local government and their

4 dependents.

5 (2) In subsequent years, a further adjustment shall be

6 made to reflect the actual prior years' claims experience

7 of the employees of the unit of local government.

8 In the case of coverage of local government employees under

9 a health maintenance organization, the Director shall annually

10 determine for each participating unit of local government the

11 maximum monthly amount the unit may contribute toward that

12 coverage, based on an analysis of (i) the age, sex, geographic

13 location, and other relevant demographic variables of the

14 unit's employees and (ii) the cost to cover those employees

15 under the State group health benefits plan. The Director may

16 similarly determine the maximum monthly amount each unit of

17 local government may contribute toward coverage of its

18 employees' dependents under a health maintenance organization.

19 Monthly payments by the unit of local government or its

20 employees for group health benefits plan or health maintenance

21 organization coverage shall be deposited in the Local

22 Government Health Insurance Reserve Fund.

23 The Local Government Health Insurance Reserve Fund is

24 hereby created as a nonappropriated trust fund to be held

25 outside the State Treasury, with the State Treasurer as

26 custodian. The Local Government Health Insurance Reserve Fund

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LRB100 11909 RPS 23560 b

1 shall be a continuing fund not subject to fiscal year

2 limitations. The Local Government Health Insurance Reserve

3 Fund is not subject to administrative charges or charge-backs,

4 including but not limited to those authorized under Section 8h

5 of the State Finance Act. All revenues arising from the

6 administration of the health benefits program established

7 under this Section shall be deposited into the Local Government

8 Health Insurance Reserve Fund. Any interest earned on moneys in

9 the Local Government Health Insurance Reserve Fund shall be

10 deposited into the Fund. All expenditures from this Fund shall

11 be used for payments for health care benefits for local

12 government and rehabilitation facility employees, annuitants,

13 and dependents, and to reimburse the Department or its

14 administrative service organization for all expenses incurred

15 in the administration of benefits. No other State funds may be

16 used for these purposes.

17 A local government employer's participation or desire to

18 participate in a program created under this subsection shall

19 not limit that employer's duty to bargain with the

20 representative of any collective bargaining unit of its

21 employees.

22 (j) Any rehabilitation facility within the State of

23 Illinois may apply to the Director to have its employees,

24 annuitants, and their eligible dependents provided group

25 health coverage under this Act on a non-insured basis. To

26 participate, a rehabilitation facility must agree to enroll all

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1 of its employees and remit the entire cost of providing such

2 coverage for its employees, except that the rehabilitation

3 facility shall not be required to enroll those of its employees

4 who are covered spouses or dependents under this plan or

5 another group policy or plan providing health benefits as long

6 as (1) an appropriate official from the rehabilitation facility

7 attests that each employee not enrolled is a covered spouse or

8 dependent under this plan or another group policy or plan, and

9 (2) at least 50% of the employees are enrolled and the

10 rehabilitation facility remits the entire cost of providing

11 coverage to those employees. Employees of a participating

12 rehabilitation facility who are not enrolled due to coverage

13 under another group health policy or plan may enroll in the

14 event of a qualifying change in status, special enrollment,

15 special circumstance as defined by the Director, or during the

16 annual Benefit Choice Period. A participating rehabilitation

17 facility may also elect to cover its annuitants. Dependent

18 coverage shall be offered on an optional basis, with the costs

19 paid by the rehabilitation facility, its employees, or some

20 combination of the 2 as determined by the rehabilitation

21 facility. The rehabilitation facility shall be responsible for

22 timely collection and transmission of dependent premiums.

23 The Director shall annually determine quarterly rates of

24 payment, subject to the following constraints:

25 (1) In the first year of coverage, the rates shall be

26 equal to the amount normally charged to State employees for

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LRB100 11909 RPS 23560 b

1 elected optional coverages or for enrolled dependents

2 coverages or other contributory coverages on behalf of its

3 employees, adjusted for differences between State

4 employees and employees of the rehabilitation facility in

5 age, sex, geographic location or other relevant

6 demographic variables, plus an amount sufficient to pay for

7 the additional administrative costs of providing coverage

8 to employees of the rehabilitation facility and their

9 dependents.

10 (2) In subsequent years, a further adjustment shall be

11 made to reflect the actual prior years' claims experience

12 of the employees of the rehabilitation facility.

13 Monthly payments by the rehabilitation facility or its

14 employees for group health benefits shall be deposited in the

15 Local Government Health Insurance Reserve Fund.

16 (k) Any domestic violence shelter or service within the

17 State of Illinois may apply to the Director to have its

18 employees, annuitants, and their dependents provided group

19 health coverage under this Act on a non-insured basis. To

20 participate, a domestic violence shelter or service must agree

21 to enroll all of its employees and pay the entire cost of

22 providing such coverage for its employees. The domestic

23 violence shelter shall not be required to enroll those of its

24 employees who are covered spouses or dependents under this plan

25 or another group policy or plan providing health benefits as

26 long as (1) an appropriate official from the domestic violence

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LRB100 11909 RPS 23560 b

1 shelter attests that each employee not enrolled is a covered

2 spouse or dependent under this plan or another group policy or

3 plan and (2) at least 50% of the employees are enrolled and the

4 domestic violence shelter remits the entire cost of providing

5 coverage to those employees. Employees of a participating

6 domestic violence shelter who are not enrolled due to coverage

7 under another group health policy or plan may enroll in the

8 event of a qualifying change in status, special enrollment, or

9 special circumstance as defined by the Director or during the

10 annual Benefit Choice Period. A participating domestic

11 violence shelter may also elect to cover its annuitants.

12 Dependent coverage shall be offered on an optional basis, with

13 employees, or some combination of the 2 as determined by the

14 domestic violence shelter or service. The domestic violence

15 shelter or service shall be responsible for timely collection

16 and transmission of dependent premiums.

17 The Director shall annually determine rates of payment,

18 subject to the following constraints:

19 (1) In the first year of coverage, the rates shall be

20 equal to the amount normally charged to State employees for

21 elected optional coverages or for enrolled dependents

22 coverages or other contributory coverages on behalf of its

23 employees, adjusted for differences between State

24 employees and employees of the domestic violence shelter or

25 service in age, sex, geographic location or other relevant

26 demographic variables, plus an amount sufficient to pay for

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LRB100 11909 RPS 23560 b

1 the additional administrative costs of providing coverage

2 to employees of the domestic violence shelter or service

3 and their dependents.

4 (2) In subsequent years, a further adjustment shall be

5 made to reflect the actual prior years' claims experience

6 of the employees of the domestic violence shelter or

7 service.

8 Monthly payments by the domestic violence shelter or

9 service or its employees for group health insurance shall be

10 deposited in the Local Government Health Insurance Reserve

11 Fund.

12 (l) A public community college or entity organized pursuant

13 to the Public Community College Act may apply to the Director

14 initially to have only annuitants not covered prior to July 1,

15 1992 by the district's health plan provided health coverage

16 under this Act on a non-insured basis. The community college

17 must execute a 2-year contract to participate in the Local

18 Government Health Plan. Any annuitant may enroll in the event

19 of a qualifying change in status, special enrollment, special

20 circumstance as defined by the Director, or during the annual

21 Benefit Choice Period.

22 The Director shall annually determine monthly rates of

23 payment subject to the following constraints: for those

24 community colleges with annuitants only enrolled, first year

25 rates shall be equal to the average cost to cover claims for a

26 State member adjusted for demographics, Medicare

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LRB100 11909 RPS 23560 b

1 participation, and other factors; and in the second year, a

2 further adjustment of rates shall be made to reflect the actual

3 first year's claims experience of the covered annuitants.

4 (l-5) The provisions of subsection (l) become inoperative

5 on July 1, 1999.

6 (m) The Director shall adopt any rules deemed necessary for

7 implementation of this amendatory Act of 1989 (Public Act

8 86-978).

9 (n) Any child advocacy center within the State of Illinois

10 may apply to the Director to have its employees, annuitants,

11 and their dependents provided group health coverage under this

12 Act on a non-insured basis. To participate, a child advocacy

13 center must agree to enroll all of its employees and pay the

14 entire cost of providing coverage for its employees. The child

15 advocacy center shall not be required to enroll those of its

16 employees who are covered spouses or dependents under this plan

17 or another group policy or plan providing health benefits as

18 long as (1) an appropriate official from the child advocacy

19 center attests that each employee not enrolled is a covered

20 spouse or dependent under this plan or another group policy or

21 plan and (2) at least 50% of the employees are enrolled and the

22 child advocacy center remits the entire cost of providing

23 coverage to those employees. Employees of a participating child

24 advocacy center who are not enrolled due to coverage under

25 another group health policy or plan may enroll in the event of

26 a qualifying change in status, special enrollment, or special

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LRB100 11909 RPS 23560 b

1 circumstance as defined by the Director or during the annual

2 Benefit Choice Period. A participating child advocacy center

3 may also elect to cover its annuitants. Dependent coverage

4 shall be offered on an optional basis, with the costs paid by

5 the child advocacy center, its employees, or some combination

6 of the 2 as determined by the child advocacy center. The child

7 advocacy center shall be responsible for timely collection and

8 transmission of dependent premiums.

9 The Director shall annually determine rates of payment,

10 subject to the following constraints:

11 (1) In the first year of coverage, the rates shall be

12 equal to the amount normally charged to State employees for

13 elected optional coverages or for enrolled dependents

14 coverages or other contributory coverages on behalf of its

15 employees, adjusted for differences between State

16 employees and employees of the child advocacy center in

17 age, sex, geographic location, or other relevant

18 demographic variables, plus an amount sufficient to pay for

19 the additional administrative costs of providing coverage

20 to employees of the child advocacy center and their

21 dependents.

22 (2) In subsequent years, a further adjustment shall be

23 made to reflect the actual prior years' claims experience

24 of the employees of the child advocacy center.

25 Monthly payments by the child advocacy center or its

26 employees for group health insurance shall be deposited into

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LRB100 11909 RPS 23560 b

1 the Local Government Health Insurance Reserve Fund.

2 (Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)

3 Section 10. The Budget Stabilization Act is amended by

4 changing Section 20 as follows:

5 (30 ILCS 122/20)

6 (Text of Section WITHOUT the changes made by P.A. 98-599,

7 which has been held unconstitutional)

8 Sec. 20. Pension Stabilization Fund.

9 (a) The Pension Stabilization Fund is hereby created as a

10 special fund in the State treasury. Moneys in the fund shall be

11 used for the sole purpose of making payments to the designated

12 retirement systems as provided in Section 25.

13 (b) For each fiscal year through State fiscal year 2020,

14 when the General Assembly's appropriations and transfers or

15 diversions as required by law from general funds do not exceed

16 99% of the estimated general funds revenues pursuant to

17 subsection (a) of Section 10, the Comptroller shall transfer

18 from the General Revenue Fund as provided by this Section a

19 total amount equal to 0.5% of the estimated general funds

20 revenues to the Pension Stabilization Fund.

21 (c) For each fiscal year through State fiscal year 2020,

22 when the General Assembly's appropriations and transfers or

23 diversions as required by law from general funds do not exceed

24 98% of the estimated general funds revenues pursuant to

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LRB100 11909 RPS 23560 b

1 subsection (b) of Section 10, the Comptroller shall transfer

2 from the General Revenue Fund as provided by this Section a

3 total amount equal to 1.0% of the estimated general funds

4 revenues to the Pension Stabilization Fund.

5 (c-5) In addition to any other amounts required to be

6 transferred under this Section, in State fiscal year 2021 and

7 each fiscal year thereafter through State fiscal year 2045, or

8 when each of the designated retirement systems, as defined in

9 Section 25, has achieved 100% funding, whichever occurs first,

10 the State Comptroller shall order transferred and the State

11 Treasurer shall transfer from the General Revenue Fund to the

12 Pension Stabilization Fund an amount equal to (1) the sum of

13 the amounts certified by the designated retirement systems

14 under subsection (a-10) of Section 14-135.08, subsection

15 (a-10) of Section 15-165, and subsection (a-10) of Section

16 16-158 of this Code for that fiscal year minus (2) the sum of

17 the required State contributions certified by the retirement

18 systems under subsection (a-5) of Section 14-135.08,

19 subsection (a-5) of Section 15-165, and subsection (a-5) of

20 Section 16-158 of this Code for that fiscal year. The

21 transferred amount is intended to represent the annual savings

22 to the State resulting from the enactment of Section 1-161 and

23 Section 14-155.2, the enactment of subsection (a-2) of Section

24 15-155 and subsection (b-4) of Section 16-158, and the changes

25 made to Section 1-160 by this amendatory Act of the 100th

26 General Assembly.

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LRB100 11909 RPS 23560 b

1 (d) The Comptroller shall transfer 1/12 of the total amount

2 to be transferred each fiscal year under this Section into the

3 Pension Stabilization Fund on the first day of each month of

4 that fiscal year or as soon thereafter as possible; except that

5 the final transfer of the fiscal year shall be made as soon as

6 practical after the August 31 following the end of the fiscal

7 year.

8 Until State fiscal year 2021, before ~~Before~~ the final

9 transfer for a fiscal year is made, the Comptroller shall

10 reconcile the estimated general funds revenues used in

11 calculating the other transfers under this Section for that

12 fiscal year with the actual general funds revenues for that

13 fiscal year. The final transfer for the fiscal year shall be

14 adjusted so that the total amount transferred under this

15 Section for that fiscal year is equal to the percentage

16 specified in subsection (b) or (c) of this Section, whichever

17 is applicable, of the actual general funds revenues for that

18 fiscal year. The actual general funds revenues for the fiscal

19 year shall be calculated in a manner consistent with subsection

20 (c) of Section 10 of this Act.

21 (Source: P.A. 94-839, eff. 6-6-06.)

22 Section 15. The Illinois Pension Code is amended by

23 changing Sections 1-160, 2-101, 2-105, 2-107, 2-124, 2-134,

24 2-162, 14-131, 14-135.08, 14-152.1, 15-108.1, 15-108.2,

25 15-155, 15-165, 15-198, 16-158, 16-203, 17-127, 17-129,

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LRB100 11909 RPS 23560 b

1 18-131, 18-140, 20-121, 20-123, 20-124, and 20-125 and by

2 adding Sections 1-161, 1-162, 2-105.3, 2-165.1, 2-166.1,

3 14-103.41, 14-147.5, 14-155.1, 14-155.2, 14-156.1, 15-185.5,

4 15-200.1, 15-201.1, 16-107.1, 16-190.5, 16-205.1, 16-206.1,

5 and 17-106.05 as follows:

6 (40 ILCS 5/1-160)

7 (Text of Section WITHOUT the changes made by P.A. 98-641,

8 which has been held unconstitutional)

9 Sec. 1-160. Provisions applicable to new hires.

10 (a) The provisions of this Section apply to a person who,

11 on or after January 1, 2011, first becomes a member or a

12 participant under any reciprocal retirement system or pension

13 fund established under this Code, other than a retirement

14 system or pension fund established under Article 2, 3, 4, 5, 6,

15 15 or 18 of this Code, notwithstanding any other provision of

16 this Code to the contrary, but do not apply to any self-managed

17 plan established under this Code, to any person with respect to

18 service as a sheriff's law enforcement employee under Article

19 7, or to any participant of the retirement plan established

20 under Section 22-101. Notwithstanding anything to the contrary

21 in this Section, for purposes of this Section, a person who

22 participated in a retirement system under Article 15 prior to

23 January 1, 2011 shall be deemed a person who first became a

24 member or participant prior to January 1, 2011 under any

25 retirement system or pension fund subject to this Section. The

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LRB100 11909 RPS 23560 b

1 changes made to this Section by Public Act 98-596 ~~this~~

2 ~~amendatory Act of the 98th General Assembly~~ are a clarification

3 of existing law and are intended to be retroactive to January

4 1, 2011 (the effective date of Public Act 96-889),

5 notwithstanding the provisions of Section 1-103.1 of this Code.

6 This Section does not apply to a person who, on or after 6

7 months after the effective date of this amendatory Act of the

8 100th General Assembly, first becomes a member or participant

9 under Article 14 or 16, unless that person (i) is a covered

10 employee under Article 14 who has not elected to participate in

11 the defined contribution plan under Section 14-155.2 or (ii)

12 elects under subsection (b) of Section 1-161 to receive the

13 benefits provided under this Section and the applicable

14 provisions of the Article under which he or she is a member or

15 participant. This Section also does not apply to a person who

16 first becomes a member or participant of an affected pension

17 fund on or after 6 months after the resolution or ordinance

18 date, as defined in Section 1-162, unless that person elects

19 under subsection (c) of Section 1-162 to receive the benefits

20 provided under this Section and the applicable provisions of

21 the Article under which he or she is a member or participant.

22 (b) "Final average salary" means the average monthly (or

23 annual) salary obtained by dividing the total salary or

24 earnings calculated under the Article applicable to the member

25 or participant during the 96 consecutive months (or 8

26 consecutive years) of service within the last 120 months (or 10

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LRB100 11909 RPS 23560 b

1 years) of service in which the total salary or earnings

2 calculated under the applicable Article was the highest by the

3 number of months (or years) of service in that period. For the

4 purposes of a person who first becomes a member or participant

5 of any retirement system or pension fund to which this Section

6 applies on or after January 1, 2011, in this Code, "final

7 average salary" shall be substituted for the following:

8 (1) In Article 7 (except for service as sheriff's law

9 enforcement employees), "final rate of earnings".

10 (2) In Articles 8, 9, 10, 11, and 12, "highest average

11 annual salary for any 4 consecutive years within the last

12 10 years of service immediately preceding the date of

13 withdrawal".

14 (3) In Article 13, "average final salary".

15 (4) In Article 14, "final average compensation".

16 (5) In Article 17, "average salary".

17 (6) In Section 22-207, "wages or salary received by him

18 at the date of retirement or discharge".

19 (b-5) Beginning on January 1, 2011, for all purposes under

20 this Code (including without limitation the calculation of

21 benefits and employee contributions), the annual earnings,

22 salary, or wages (based on the plan year) of a member or

23 participant to whom this Section applies shall not exceed

24 $106,800; however, that amount shall annually thereafter be

25 increased by the lesser of (i) 3% of that amount, including all

26 previous adjustments, or (ii) one-half the annual unadjusted

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1 percentage increase (but not less than zero) in the consumer

2 price index-u for the 12 months ending with the September

3 preceding each November 1, including all previous adjustments.

4 For the purposes of this Section, "consumer price index-u"

5 means the index published by the Bureau of Labor Statistics of

6 the United States Department of Labor that measures the average

7 change in prices of goods and services purchased by all urban

8 consumers, United States city average, all items, 1982-84 =

9 100. The new amount resulting from each annual adjustment shall

10 be determined by the Public Pension Division of the Department

11 of Insurance and made available to the boards of the retirement

12 systems and pension funds by November 1 of each year.

13 (c) A member or participant is entitled to a retirement

14 annuity upon written application if he or she has attained age

15 67 (beginning January 1, 2015, age 65 with respect to service

16 under Article 12 of this Code that is subject to this Section)

17 and has at least 10 years of service credit and is otherwise

18 eligible under the requirements of the applicable Article.

19 A member or participant who has attained age 62 (beginning

20 January 1, 2015, age 60 with respect to service under Article

21 12 of this Code that is subject to this Section) and has at

22 least 10 years of service credit and is otherwise eligible

23 under the requirements of the applicable Article may elect to

24 receive the lower retirement annuity provided in subsection (d)

25 of this Section.

26 (d) The retirement annuity of a member or participant who

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LRB100 11909 RPS 23560 b

1 is retiring after attaining age 62 (beginning January 1, 2015,

2 age 60 with respect to service under Article 12 of this Code

3 that is subject to this Section) with at least 10 years of

4 service credit shall be reduced by one-half of 1% for each full

5 month that the member's age is under age 67 (beginning January

6 1, 2015, age 65 with respect to service under Article 12 of

7 this Code that is subject to this Section).

8 (e) Any retirement annuity or supplemental annuity shall be

9 subject to annual increases on the January 1 occurring either

10 on or after the attainment of age 67 (beginning January 1,

11 2015, age 65 with respect to service under Article 12 of this

12 Code that is subject to this Section) or the first anniversary

13 of the annuity start date, whichever is later. Each annual

14 increase shall be calculated at 3% or one-half the annual

15 unadjusted percentage increase (but not less than zero) in the

16 consumer price index-u for the 12 months ending with the

17 September preceding each November 1, whichever is less, of the

18 originally granted retirement annuity. If the annual

19 unadjusted percentage change in the consumer price index-u for

20 the 12 months ending with the September preceding each November

21 1 is zero or there is a decrease, then the annuity shall not be

22 increased.

23 (f) The initial survivor's or widow's annuity of an

24 otherwise eligible survivor or widow of a retired member or

25 participant who first became a member or participant on or

26 after January 1, 2011 shall be in the amount of 66 2/3% of the

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1 retired member's or participant's retirement annuity at the

2 date of death. In the case of the death of a member or

3 participant who has not retired and who first became a member

4 or participant on or after January 1, 2011, eligibility for a

5 survivor's or widow's annuity shall be determined by the

6 applicable Article of this Code. The initial benefit shall be

7 66 2/3% of the earned annuity without a reduction due to age. A

8 child's annuity of an otherwise eligible child shall be in the

9 amount prescribed under each Article if applicable. Any

10 survivor's or widow's annuity shall be increased (1) on each

11 January 1 occurring on or after the commencement of the annuity

12 if the deceased member died while receiving a retirement

13 annuity or (2) in other cases, on each January 1 occurring

14 after the first anniversary of the commencement of the annuity.

15 Each annual increase shall be calculated at 3% or one-half the

16 annual unadjusted percentage increase (but not less than zero)

17 in the consumer price index-u for the 12 months ending with the

18 September preceding each November 1, whichever is less, of the

19 originally granted survivor's annuity. If the annual

20 unadjusted percentage change in the consumer price index-u for

21 the 12 months ending with the September preceding each November

22 1 is zero or there is a decrease, then the annuity shall not be

23 increased.

24 (g) The benefits in Section 14-110 apply only if the person

25 is a State policeman, a fire fighter in the fire protection

26 service of a department, or a security employee of the

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1 Department of Corrections or the Department of Juvenile

2 Justice, as those terms are defined in subsection (b) of

3 Section 14-110. A person who meets the requirements of this

4 Section is entitled to an annuity calculated under the

5 provisions of Section 14-110, in lieu of the regular or minimum

6 retirement annuity, only if the person has withdrawn from

7 service with not less than 20 years of eligible creditable

8 service and has attained age 60, regardless of whether the

9 attainment of age 60 occurs while the person is still in

10 service.

11 (h) If a person who first becomes a member or a participant

12 of a retirement system or pension fund subject to this Section

13 on or after January 1, 2011 is receiving a retirement annuity

14 or retirement pension under that system or fund and becomes a

15 member or participant under any other system or fund created by

16 this Code and is employed on a full-time basis, except for

17 those members or participants exempted from the provisions of

18 this Section under subsection (a) of this Section, then the

19 person's retirement annuity or retirement pension under that

20 system or fund shall be suspended during that employment. Upon

21 termination of that employment, the person's retirement

22 annuity or retirement pension payments shall resume and be

23 recalculated if recalculation is provided for under the

24 applicable Article of this Code.

25 If a person who first becomes a member of a retirement

26 system or pension fund subject to this Section on or after

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1 January 1, 2012 and is receiving a retirement annuity or

2 retirement pension under that system or fund and accepts on a

3 contractual basis a position to provide services to a

4 governmental entity from which he or she has retired, then that

5 person's annuity or retirement pension earned as an active

6 employee of the employer shall be suspended during that

7 contractual service. A person receiving an annuity or

8 retirement pension under this Code shall notify the pension

9 fund or retirement system from which he or she is receiving an

10 annuity or retirement pension, as well as his or her

11 contractual employer, of his or her retirement status before

12 accepting contractual employment. A person who fails to submit

13 such notification shall be guilty of a Class A misdemeanor and

14 required to pay a fine of $1,000. Upon termination of that

15 contractual employment, the person's retirement annuity or

16 retirement pension payments shall resume and, if appropriate,

17 be recalculated under the applicable provisions of this Code.

18 (i) (Blank).

19 (j) Except for Sections 1-161 and 1-162, in ~~In~~ the case of

20 a conflict between the provisions of this Section and any other

21 provision of this Code, the provisions of this Section shall

22 control.

23 (Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,

24 eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)

25 (40 ILCS 5/1-161 new)

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1 Sec. 1-161. Optional benefits for certain Tier 2 members

2 under Articles 14, 15, and 16.

3 (a) Notwithstanding any other provision of this Code to the

4 contrary, the provisions of this Section apply to a person who,

5 on or after 6 months after the effective date of this

6 amendatory Act of the 100th General Assembly, first becomes a

7 member or a participant under Article 14, 15, or 16 and who

8 does not make the election under subsection (b) or (c),

9 whichever is applicable. The provisions of this Section do not

10 apply to any participant in a self-managed plan or to a covered

11 employee under Article 14.

12 (b) In lieu of the benefits provided under this Section, a

13 member or participant, except for a participant under Article

14 15, may irrevocably elect the benefits under Section 1-160 and

15 the benefits otherwise applicable to that member or

16 participant. The election must be made within 30 days after

17 becoming a member or participant. Each retirement system shall

18 establish procedures for making this election.

19 (c) A participant under Article 15 may irrevocably elect

20 the benefits otherwise provided to a Tier 2 participant under

21 Article 15. The election must be made within 30 days after

22 becoming a participant. The retirement system under Article 15

23 shall establish procedures for making this election.

24 (d) "Final average salary" means the average monthly (or

25 annual) salary obtained by dividing the total salary or

26 earnings calculated under the Article applicable to the member

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1 or participant during the last 120 months (or 10 years) of

2 service in which the total salary or earnings calculated under

3 the applicable Article was the highest by the number of months

4 (or years) of service in that period. For the purposes of a

5 person who first becomes a member or participant of any

6 retirement system to which this Section applies on or after 6

7 months after the effective date of this amendatory Act of the

8 100th General Assembly, in this Code, "final average salary"

9 shall be substituted for "final average compensation" in

10 Article 14.

11 (e) Beginning 6 months after the effective date of this

12 amendatory Act of the 100th General Assembly, for all purposes

13 under this Code (including without limitation the calculation

14 of benefits and employee contributions), the annual earnings,

15 salary, or wages (based on the plan year) of a member or

16 participant to whom this Section applies shall not at any time

17 exceed the federal Social Security Wage Base then in effect.

18 (f) A member or participant is entitled to a retirement

19 annuity upon written application if he or she has attained the

20 normal retirement age determined by the Social Security

21 Administration for that member or participant's year of birth,

22 but no earlier than 67 years of age, and has at least 10 years

23 of service credit and is otherwise eligible under the

24 requirements of the applicable Article.

25 (g) The amount of the retirement annuity to which a member

26 or participant is entitled shall be computed by multiplying

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1 1.25% for each year of service credit by his or her final

2 average salary.

3 (h) Any retirement annuity or supplemental annuity shall be

4 subject to annual increases on the first anniversary of the

5 annuity start date. Each annual increase shall be one-half the

6 annual unadjusted percentage increase (but not less than zero)

7 in the consumer price index-w for the 12 months ending with the

8 September preceding each November 1 of the originally granted

9 retirement annuity. If the annual unadjusted percentage change

10 in the consumer price index-w for the 12 months ending with the

11 September preceding each November 1 is zero or there is a

12 decrease, then the annuity shall not be increased.

13 For the purposes of this Section, "consumer price index-w"

14 means the index published by the Bureau of Labor Statistics of

15 the United States Department of Labor that measures the average

16 change in prices of goods and services purchased by Urban Wage

17 Earners and Clerical Workers, United States city average, all

18 items, 1982-84 = 100. The new amount resulting from each annual

19 adjustment shall be determined by the Public Pension Division

20 of the Department of Insurance and made available to the boards

21 of the retirement systems and pension funds by November 1 of

22 each year.

23 (i) The initial survivor's or widow's annuity of an

24 otherwise eligible survivor or widow of a retired member or

25 participant who first became a member or participant on or

26 after 6 months after the effective date of this amendatory Act

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1 of the 100th General Assembly shall be in the amount of 66 2/3%

2 of the retired member's or participant's retirement annuity at

3 the date of death. In the case of the death of a member or

4 participant who has not retired and who first became a member

5 or participant on or after 6 months after the effective date of

6 this amendatory Act of the 100th General Assembly, eligibility

7 for a survivor's or widow's annuity shall be determined by the

8 applicable Article of this Code. The benefit shall be 66 2/3%

9 of the earned annuity without a reduction due to age. A child's

10 annuity of an otherwise eligible child shall be in the amount

11 prescribed under each Article if applicable.

12 (j) In lieu of any other employee contributions, except for

13 the contribution to the defined contribution plan under

14 subsection (k) of this Section, each employee shall contribute

15 6.2% of his her or salary to the retirement system. However,

16 the employee contribution under this subsection shall not

17 exceed the amount of the normal cost of the benefits under this

18 Section (except for the defined contribution plan under

19 subsection (k) of this Section), expressed as a percentage of

20 payroll and determined on or before November 1 of each year by

21 the board of trustees of the retirement system. If the board of

22 trustees of the retirement system determines that the 6.2%

23 employee contribution rate exceeds the normal cost of the

24 benefits under this Section (except for the defined

25 contribution plan under subsection (k) of this Section), then

26 on or before December 1 of that year, the board of trustees

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1 shall certify the amount of the normal cost of the benefits

2 under this Section (except for the defined contribution plan

3 under subsection (k) of this Section), expressed as a

4 percentage of payroll, to the State Actuary and the Commission

5 on Government Forecasting and Accountability, and the employee

6 contribution under this subsection shall be reduced to that

7 amount beginning January 1 of the following year. Thereafter,

8 if the normal cost of the benefits under this Section (except

9 for the defined contribution plan under subsection (k) of this

10 Section), expressed as a percentage of payroll and determined

11 on or before November 1 of each year by the board of trustees

12 of the retirement system, exceeds 6.2% of salary, then on or

13 before December 1 of that year, the board of trustees shall

14 certify the normal cost to the State Actuary and the Commission

15 on Government Forecasting and Accountability, and the employee

16 contributions shall revert back to 6.2% of salary beginning

17 January 1 of the following year.

18 (k) No later than 5 months after the effective date of this

19 amendatory Act of the 100th General Assembly, each retirement

20 system under Article 14, 15, or 16 shall prepare and implement

21 a defined contribution plan for members or participants who are

22 subject to this Section. The defined contribution plan

23 developed under this subsection shall be a plan that aggregates

24 employer and employee contributions in individual participant

25 accounts which, after meeting any other requirements, are used

26 for payouts after retirement in accordance with this subsection

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1 and any other applicable laws.

2 (1) Each member or participant shall contribute a

3 minimum of 4% of his or her salary to the defined

4 contribution plan.

5 (2) For each participant in the defined contribution

6 plan who has been employed with the same employer for at

7 least one year, employer contributions shall be paid into

8 that participant's accounts at a rate expressed as a

9 percentage of salary. This rate may be set for individual

10 employees, but shall be no higher than 6% of salary and

11 shall be no lower than 2% of salary.

12 (3) Employer contributions shall vest when those

13 contributions are paid into a member's or participant's

14 account.

15 (4) The defined contribution plan shall provide a

16 variety of options for investments. These options shall

17 include investments handled by the Illinois State Board of

18 Investment as well as private sector investment options.

19 (5) The defined contribution plan shall provide a

20 variety of options for payouts to retirees and their

21 survivors.

22 (6) To the extent authorized under federal law and as

23 authorized by the retirement system, the defined

24 contribution plan shall allow former participants in the

25 plan to transfer or roll over employee and employer

26 contributions, and the earnings thereon, into other

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1 qualified retirement plans.

2 (7) Each retirement system shall reduce the employee

3 contributions credited to the member's defined

4 contribution plan account by an amount determined by that

5 retirement system to cover the cost of offering the

6 benefits under this subsection and any applicable

7 administrative fees.

8 (8) No person shall begin participating in the defined

9 contribution plan until it has attained qualified plan

10 status and received all necessary approvals from the U.S.

11 Internal Revenue Service.

12 (l) By accepting the benefits under this Section, a member

13 or participant acknowledges and consents that benefits once

14 earned may not be diminished, but that future benefits may be

15 modified, including, but not limited to, changes in the

16 retirement age at which a member or participant becomes

17 eligible to receive future benefits, changes in the amount of

18 the automatic annual increase for those future benefits, or the

19 amount of the retirement annuity. Any increase in benefits

20 under this Section applicable to persons under Article 15 or 16

21 does not apply unless it is approved by resolution or ordinance

22 of the governing body of the unit of local government with

23 regard to the members or participants under that unit of local

24 government.

25 (m) In the case of a conflict between the provisions of

26 this Section and any other provision of this Code, the

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1 provisions of this Section shall control.

2 (40 ILCS 5/1-162 new)

3 Sec. 1-162. Optional benefits for certain Tier 2 members of

4 pension funds under Articles 7, 8, 9, 10, 11, 12, 13, and 17.

5 (a) As used in this Section:

6 "Affected pension fund" means a pension fund established

7 under Article 7, 8, 9, 10, 11, 12, 13, or 17 that the governing

8 body of the unit of local government has designated as an

9 affected pension fund by adoption of a resolution or ordinance.

10 "Resolution or ordinance date" means the date on which the

11 governing body of the unit of local government designates a

12 pension fund under Article 7, 8, 9, 10, 11, 12, 13, or 17 as an

13 affected pension fund by adoption of a resolution or ordinance.

14 (b) Notwithstanding any other provision of this Code to the

15 contrary, the provisions of this Section apply to a person who

16 first becomes a member or a participant in an affected pension

17 fund on or after 6 months after the resolution or ordinance

18 date and who does not make the election under subsection (c).

19 The provisions of this Section do not apply to a sheriff's law

20 enforcement employee under Article 7.

21 (c) In lieu of the benefits provided under this Section, a

22 member or participant may irrevocably elect the benefits under

23 Section 1-160 and the benefits otherwise applicable to that

24 member or participant. The election must be made within 30 days

25 after becoming a member or participant. Each affected pension

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1 fund shall establish procedures for making this election.

2 (d) "Final average salary" means the average monthly (or

3 annual) salary obtained by dividing the total salary or

4 earnings calculated under the Article applicable to the member

5 or participant during the last 120 months (or 10 years) of

6 service in which the total salary or earnings calculated under

7 the applicable Article was the highest by the number of months

8 (or years) of service in that period. For the purposes of a

9 person who first becomes a member or participant of an affected

10 pension fund on or after 6 months after the ordinance or

11 resolution date, in this Code, "final average salary" shall be

12 substituted for the following:

13 (1) In Article 7, (except for service as sheriff's law

14 enforcement employees), "final rate of earnings".

15 (2) In Articles 8, 9, 10, 11, and 12, "highest average

16 annual salary for any 4 consecutive years within the last

17 10 years of service immediately preceding the date of

18 withdrawal".

19 (3) In Article 13, "average final salary".

20 (4) In Article 17, "average salary".

21 (e) Beginning 6 months after the resolution or ordinance

22 date, for all purposes under this Code (including without

23 limitation the calculation of benefits and employee

24 contributions), the annual earnings, salary, or wages (based on

25 the plan year) of a member or participant to whom this Section

26 applies shall not at any time exceed the federal Social

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1 Security Wage Base then in effect.

2 (f) A member or participant is entitled to a retirement

3 annuity upon written application if he or she has attained the

4 normal retirement age determined by the Social Security

5 Administration for that member or participant's year of birth,

6 but no earlier than 67 years of age, and has at least 10 years

7 of service credit and is otherwise eligible under the

8 requirements of the applicable Article.

9 (g) The amount of the retirement annuity to which a member

10 or participant is entitled shall be computed by multiplying

11 1.25% for each year of service credit by his or her final

12 average salary.

13 (h) Any retirement annuity or supplemental annuity shall be

14 subject to annual increases on the first anniversary of the

15 annuity start date. Each annual increase shall be one-half the

16 annual unadjusted percentage increase (but not less than zero)

17 in the consumer price index-w for the 12 months ending with the

18 September preceding each November 1 of the originally granted

19 retirement annuity. If the annual unadjusted percentage change

20 in the consumer price index-w for the 12 months ending with the

21 September preceding each November 1 is zero or there is a

22 decrease, then the annuity shall not be increased.

23 For the purposes of this Section, "consumer price index-w"

24 means the index published by the Bureau of Labor Statistics of

25 the United States Department of Labor that measures the average

26 change in prices of goods and services purchased by Urban Wage

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LRB100 11909 RPS 23560 b

1 Earners and Clerical Workers, United States city average, all

2 items, 1982-84 = 100. The new amount resulting from each annual

3 adjustment shall be determined by the Public Pension Division

4 of the Department of Insurance and made available to the boards

5 of the retirement systems and pension funds by November 1 of

6 each year.

7 (i) The initial survivor's or widow's annuity of an

8 otherwise eligible survivor or widow of a retired member or

9 participant who first became a member or participant on or

10 after 6 months after the resolution or ordinance date shall be

11 in the amount of 66 2/3% of the retired member's or

12 participant's retirement annuity at the date of death. In the

13 case of the death of a member or participant who has not

14 retired and who first became a member or participant on or

15 after 6 months after the resolution or ordinance date,

16 eligibility for a survivor's or widow's annuity shall be

17 determined by the applicable Article of this Code. The benefit

18 shall be 66 2/3% of the earned annuity without a reduction due

19 to age. A child's annuity of an otherwise eligible child shall

20 be in the amount prescribed under each Article if applicable.

21 (j) In lieu of any other employee contributions, except for

22 the contribution to the defined contribution plan under

23 subsection (k) of this Section, each employee shall contribute

24 6.2% of his her or salary to the affected pension fund.

25 However, the employee contribution under this subsection shall

26 not exceed the amount of the normal cost of the benefits under

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LRB100 11909 RPS 23560 b

1 this Section (except for the defined contribution plan under

2 subsection (k) of this Section), expressed as a percentage of

3 payroll and determined on or before November 1 of each year by

4 the board of trustees of the affected pension fund. If the

5 board of trustees of the affected pension fund determines that

6 the 6.2% employee contribution rate exceeds the normal cost of

7 the benefits under this Section (except for the defined

8 contribution plan under subsection (k) of this Section), then

9 on or before December 1 of that year, the board of trustees

10 shall certify the amount of the normal cost of the benefits

11 under this Section (except for the defined contribution plan

12 under subsection (k) of this Section), expressed as a

13 percentage of payroll, to the State Actuary and the Commission

14 on Government Forecasting and Accountability, and the employee

15 contribution under this subsection shall be reduced to that

16 amount beginning January 1 of the following year. Thereafter,

17 if the normal cost of the benefits under this Section (except

18 for the defined contribution plan under subsection (k) of this

19 Section), expressed as a percentage of payroll and determined

20 on or before November 1 of each year by the board of trustees

21 of the affected pension fund, exceeds 6.2% of salary, then on

22 or before December 1 of that year, the board of trustees shall

23 certify the normal cost to the State Actuary and the Commission

24 on Government Forecasting and Accountability, and the employee

25 contributions shall revert back to 6.2% of salary beginning

26 January 1 of the following year.

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1 (k) No later than 5 months after the resolution or

2 ordinance date, an affected pension fund shall prepare and

3 implement a defined contribution plan for members or

4 participants who are subject to this Section. The defined

5 contribution plan developed under this subsection shall be a

6 plan that aggregates employer and employee contributions in

7 individual participant accounts which, after meeting any other

8 requirements, are used for payouts after retirement in

9 accordance with this subsection and any other applicable laws.

10 (1) Each member or participant shall contribute a

11 minimum of 4% of his or her salary to the defined

12 contribution plan.

13 (2) For each participant in the defined contribution

14 plan who has been employed with the same employer for at

15 least one year, employer contributions shall be paid into

16 that participant's accounts at a rate expressed as a

17 percentage of salary. This rate may be set for individual

18 employees, but shall be no higher than 6% of salary and

19 shall be no lower than 2% of salary.

20 (3) Employer contributions shall vest when those

21 contributions are paid into a member's or participant's

22 account.

23 (4) The defined contribution plan shall provide a

24 variety of options for investments. These options shall

25 include investments handled by the Illinois State Board of

26 Investment as well as private sector investment options.

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1 (5) The defined contribution plan shall provide a

2 variety of options for payouts to retirees and their

3 survivors.

4 (6) To the extent authorized under federal law and as

5 authorized by the affected pension fund, the defined

6 contribution plan shall allow former participants in the

7 plan to transfer or roll over employee and employer

8 contributions, and the earnings thereon, into other

9 qualified retirement plans.

10 (7) Each affected pension fund shall reduce the

11 employee contributions credited to the member's defined

12 contribution plan account by an amount determined by that

13 affected pension fund to cover the cost of offering the

14 benefits under this subsection and any applicable

15 administrative fees.

16 (8) No person shall begin participating in the defined

17 contribution plan until it has attained qualified plan

18 status and received all necessary approvals from the U.S.

19 Internal Revenue Service.

20 (l) By accepting the benefits under this Section, a member

21 or participant acknowledges and consents that benefits once

22 earned may not be diminished, but that future benefits may be

23 modified, including, but not limited to, changes in the

24 retirement age at which a member or participant becomes

25 eligible to receive future benefits, changes in the amount of

26 the automatic annual increase for those future benefits, or the

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1 amount of the retirement annuity. Any increase in benefits

2 under this Section does not apply unless it is approved by

3 resolution or ordinance of the governing body of the unit of

4 local government with regard to the members or participants

5 under that unit of local government.

6 (m) In the case of a conflict between the provisions of

7 this Section and any other provision of this Code, the

8 provisions of this Section shall control.

9 (40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)

10 Sec. 2-101. Creation of system. A retirement system is

11 created to provide retirement annuities, survivor's annuities

12 and other benefits for certainmembers of the General Assembly,

13 certain elected state officials,and their beneficiaries.

14 The system shall be known as the "General Assembly

15 Retirement System". All its funds and property shall be a trust

16 separate from all other entities, maintained for the purpose of

17 securing payment of annuities and benefits under this Article.

18 Participation in the retirement system created under this

19 Article is restricted to persons who became participants before

20 the effective date of this amendatory Act of the 100th General

21 Assembly. Beginning on that date, the System shall not accept

22 any new participants.

23 (Source: P.A. 83-1440.)

24 (40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)

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1 Sec. 2-105. Member. "Member": Members of the General

2 Assembly of this State, including persons who enter military

3 service while a member of the General Assembly, and any person

4 serving as Governor, Lieutenant Governor, Secretary of State,

5 Treasurer, Comptroller, or Attorney General for the period of

6 service in such office.

7 Any person who has served for 10 or more years as Clerk or

8 Assistant Clerk of the House of Representatives, Secretary or

9 Assistant Secretary of the Senate, or any combination thereof,

10 may elect to become a member of this system while thenceforth

11 engaged in such service by filing a written election with the

12 board. Any person so electing shall be deemed an active member

13 of the General Assembly for the purpose of validating and

14 transferring any service credits earned under any of the funds

15 and systems established under Articles 3 through 18 of this

16 Code.

17 However, notwithstanding any other provision of this

18 Article, a person shall not be deemed a member for the purposes

19 of this Article unless he or she became a participant of the

20 System before the effective date of this amendatory Act of the

21 100th General Assembly.

22 (Source: P.A. 85-1008.)

23 (40 ILCS 5/2-105.3 new)

24 Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A

25 participant who first became a participant before January 1,

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1 2011.

2 (40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)

3 Sec. 2-107. Participant. "Participant": Any member who

4 elects to participate; and any former member who elects to

5 continue participation under Section 2-117.1, for the duration

6 of such continued participation. However, notwithstanding any

7 other provision of this Article, a person shall not be deemed a

8 participant for the purposes of this Article unless he or she

9 became a participant of the System before the effective date of

10 this amendatory Act of the 100th General Assembly.

11 (Source: P.A. 86-1488.)

12 (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)

13 (Text of Section WITHOUT the changes made by P.A. 98-599,

14 which has been held unconstitutional)

15 Sec. 2-124. Contributions by State.

16 (a) The State shall make contributions to the System by

17 appropriations of amounts which, together with the

18 contributions of participants, interest earned on investments,

19 and other income will meet the cost of maintaining and

20 administering the System on a 90% funded basis in accordance

21 with actuarial recommendations.

22 (b) The Board shall determine the amount of State

23 contributions required for each fiscal year on the basis of the

24 actuarial tables and other assumptions adopted by the Board and

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1 the prescribed rate of interest, using the formula in

2 subsection (c).

3 (c) For State fiscal years 2018 through 2045, the minimum

4 contribution to the System to be made by the State for each

5 fiscal year shall be an amount determined by the System to be

6 sufficient to bring the total assets of the System up to 90% of

7 the total actuarial liabilities of the System by the end of

8 State fiscal year 2045. In making these determinations, the

9 required State contribution shall be calculated each year as a

10 level percentage of total payroll, including payroll that is

11 not deemed pensionable, but excluding payroll attributable to

12 participants in the defined contribution plan under Section

13 2-165.1, over the years remaining to and including fiscal year

14 2045 and shall be determined under the projected unit credit

15 actuarial cost method.

16 Beginning in State fiscal year 2018, any increase or

17 decrease in State contribution over the prior fiscal year due

18 exclusively to changes in actuarial or investment assumptions

19 adopted by the Board shall be included in the State

20 contribution to the System, as a percentage of the applicable

21 employee payroll, and shall be increased in equal annual

22 increments so that by the State fiscal year occurring 5 years

23 after the adoption of the actuarial or investment assumptions,

24 the State is contributing at the rate otherwise required under

25 this Section.

26 For State fiscal years 2012 through 2017 ~~2045~~, the minimum

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1 contribution to the System to be made by the State for each

2 fiscal year shall be an amount determined by the System to be

3 sufficient to bring the total assets of the System up to 90% of

4 the total actuarial liabilities of the System by the end of

5 State fiscal year 2045. In making these determinations, the

6 required State contribution shall be calculated each year as a

7 level percentage of payroll over the years remaining to and

8 including fiscal year 2045 and shall be determined under the

9 projected unit credit actuarial cost method.

10 For State fiscal years 1996 through 2005, the State

11 contribution to the System, as a percentage of the applicable

12 employee payroll, shall be increased in equal annual increments

13 so that by State fiscal year 2011, the State is contributing at

14 the rate required under this Section.

15 Notwithstanding any other provision of this Article, the

16 total required State contribution for State fiscal year 2006 is

17 $4,157,000.

18 Notwithstanding any other provision of this Article, the

19 total required State contribution for State fiscal year 2007 is

20 $5,220,300.

21 For each of State fiscal years 2008 through 2009, the State

22 contribution to the System, as a percentage of the applicable

23 employee payroll, shall be increased in equal annual increments

24 from the required State contribution for State fiscal year

25 2007, so that by State fiscal year 2011, the State is

26 contributing at the rate otherwise required under this Section.

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1 Notwithstanding any other provision of this Article, the

2 total required State contribution for State fiscal year 2010 is

3 $10,454,000 and shall be made from the proceeds of bonds sold

4 in fiscal year 2010 pursuant to Section 7.2 of the General

5 Obligation Bond Act, less (i) the pro rata share of bond sale

6 expenses determined by the System's share of total bond

7 proceeds, (ii) any amounts received from the General Revenue

8 Fund in fiscal year 2010, and (iii) any reduction in bond

9 proceeds due to the issuance of discounted bonds, if

10 applicable.

11 Notwithstanding any other provision of this Article, the

12 total required State contribution for State fiscal year 2011 is

13 the amount recertified by the System on or before April 1, 2011

14 pursuant to Section 2-134 and shall be made from the proceeds

15 of bonds sold in fiscal year 2011 pursuant to Section 7.2 of

16 the General Obligation Bond Act, less (i) the pro rata share of

17 bond sale expenses determined by the System's share of total

18 bond proceeds, (ii) any amounts received from the General

19 Revenue Fund in fiscal year 2011, and (iii) any reduction in

20 bond proceeds due to the issuance of discounted bonds, if

21 applicable.

22 Beginning in State fiscal year 2046, the minimum State

23 contribution for each fiscal year shall be the amount needed to

24 maintain the total assets of the System at 90% of the total

25 actuarial liabilities of the System.

26 Amounts received by the System pursuant to Section 25 of

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1 the Budget Stabilization Act or Section 8.12 of the State

2 Finance Act in any fiscal year do not reduce and do not

3 constitute payment of any portion of the minimum State

4 contribution required under this Article in that fiscal year.

5 Such amounts shall not reduce, and shall not be included in the

6 calculation of, the required State contributions under this

7 Article in any future year until the System has reached a

8 funding ratio of at least 90%. A reference in this Article to

9 the "required State contribution" or any substantially similar

10 term does not include or apply to any amounts payable to the

11 System under Section 25 of the Budget Stabilization Act.

12 Notwithstanding any other provision of this Section, the

13 required State contribution for State fiscal year 2005 and for

14 fiscal year 2008 and each fiscal year thereafter, as calculated

15 under this Section and certified under Section 2-134, shall not

16 exceed an amount equal to (i) the amount of the required State

17 contribution that would have been calculated under this Section

18 for that fiscal year if the System had not received any

19 payments under subsection (d) of Section 7.2 of the General

20 Obligation Bond Act, minus (ii) the portion of the State's

21 total debt service payments for that fiscal year on the bonds

22 issued in fiscal year 2003 for the purposes of that Section

23 7.2, as determined and certified by the Comptroller, that is

24 the same as the System's portion of the total moneys

25 distributed under subsection (d) of Section 7.2 of the General

26 Obligation Bond Act. In determining this maximum for State

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1 fiscal years 2008 through 2010, however, the amount referred to

2 in item (i) shall be increased, as a percentage of the

3 applicable employee payroll, in equal increments calculated

4 from the sum of the required State contribution for State

5 fiscal year 2007 plus the applicable portion of the State's

6 total debt service payments for fiscal year 2007 on the bonds

7 issued in fiscal year 2003 for the purposes of Section 7.2 of

8 the General Obligation Bond Act, so that, by State fiscal year

9 2011, the State is contributing at the rate otherwise required

10 under this Section.

11 (d) For purposes of determining the required State

12 contribution to the System, the value of the System's assets

13 shall be equal to the actuarial value of the System's assets,

14 which shall be calculated as follows:

15 As of June 30, 2008, the actuarial value of the System's

16 assets shall be equal to the market value of the assets as of

17 that date. In determining the actuarial value of the System's

18 assets for fiscal years after June 30, 2008, any actuarial

19 gains or losses from investment return incurred in a fiscal

20 year shall be recognized in equal annual amounts over the

21 5-year period following that fiscal year.

22 (e) For purposes of determining the required State

23 contribution to the system for a particular year, the actuarial

24 value of assets shall be assumed to earn a rate of return equal

25 to the system's actuarially assumed rate of return.

26 (Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;

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1 96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.

2 7-13-12.)

3 (40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)

4 (Text of Section WITHOUT the changes made by P.A. 98-599,

5 which has been held unconstitutional)

6 Sec. 2-134. To certify required State contributions and

7 submit vouchers.

8 (a) The Board shall certify to the Governor on or before

9 December 15 of each year until December 15, 2011 the amount of

10 the required State contribution to the System for the next

11 fiscal year and shall specifically identify the System's

12 projected State normal cost for that fiscal year. The

13 certification shall include a copy of the actuarial

14 recommendations upon which it is based and shall specifically

15 identify the System's projected State normal cost for that

16 fiscal year.

17 On or before November 1 of each year, beginning November 1,

18 2012, the Board shall submit to the State Actuary, the

19 Governor, and the General Assembly a proposed certification of

20 the amount of the required State contribution to the System for

21 the next fiscal year, along with all of the actuarial

22 assumptions, calculations, and data upon which that proposed

23 certification is based. On or before January 1 of each year

24 beginning January 1, 2013, the State Actuary shall issue a

25 preliminary report concerning the proposed certification and

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1 identifying, if necessary, recommended changes in actuarial

2 assumptions that the Board must consider before finalizing its

3 certification of the required State contributions. On or before

4 January 15, 2013 and every January 15 thereafter, the Board

5 shall certify to the Governor and the General Assembly the

6 amount of the required State contribution for the next fiscal

7 year. The Board's certification must note any deviations from

8 the State Actuary's recommended changes, the reason or reasons

9 for not following the State Actuary's recommended changes, and

10 the fiscal impact of not following the State Actuary's

11 recommended changes on the required State contribution.

12 On or before May 1, 2004, the Board shall recalculate and

13 recertify to the Governor the amount of the required State

14 contribution to the System for State fiscal year 2005, taking

15 into account the amounts appropriated to and received by the

16 System under subsection (d) of Section 7.2 of the General

17 Obligation Bond Act.

18 On or before July 1, 2005, the Board shall recalculate and

19 recertify to the Governor the amount of the required State

20 contribution to the System for State fiscal year 2006, taking

21 into account the changes in required State contributions made

22 by this amendatory Act of the 94th General Assembly.

23 On or before April 1, 2011, the Board shall recalculate and

24 recertify to the Governor the amount of the required State

25 contribution to the System for State fiscal year 2011, applying

26 the changes made by Public Act 96-889 to the System's assets

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1 and liabilities as of June 30, 2009 as though Public Act 96-889

2 was approved on that date.

3 As soon as practical after the effective date of this

4 amendatory Act of the 100th General Assembly, the Board shall

5 recalculate and recertify to the State Actuary, the Governor,

6 and the General Assembly the amount of the State contribution

7 to the System for State fiscal year 2018, taking into account

8 the changes in required State contributions made by this

9 amendatory Act of the 100th General Assembly. The State Actuary

10 shall review the assumptions and valuations underlying the

11 Board's revised certification and issue a preliminary report

12 concerning the proposed recertification and identifying, if

13 necessary, recommended changes in actuarial assumptions that

14 the Board must consider before finalizing its certification of

15 the required State contributions. The Board's final

16 certification must note any deviations from the State Actuary's

17 recommended changes, the reason or reasons for not following

18 the State Actuary's recommended changes, and the fiscal impact

19 of not following the State Actuary's recommended changes on the

20 required State contribution.

21 (b) Beginning in State fiscal year 1996, on or as soon as

22 possible after the 15th day of each month the Board shall

23 submit vouchers for payment of State contributions to the

24 System, in a total monthly amount of one-twelfth of the

25 required annual State contribution certified under subsection

26 (a). From the effective date of this amendatory Act of the 93rd

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1 General Assembly through June 30, 2004, the Board shall not

2 submit vouchers for the remainder of fiscal year 2004 in excess

3 of the fiscal year 2004 certified contribution amount

4 determined under this Section after taking into consideration

5 the transfer to the System under subsection (d) of Section

6 6z-61 of the State Finance Act. These vouchers shall be paid by

7 the State Comptroller and Treasurer by warrants drawn on the

8 funds appropriated to the System for that fiscal year. If in

9 any month the amount remaining unexpended from all other

10 appropriations to the System for the applicable fiscal year

11 (including the appropriations to the System under Section 8.12

12 of the State Finance Act and Section 1 of the State Pension

13 Funds Continuing Appropriation Act) is less than the amount

14 lawfully vouchered under this Section, the difference shall be

15 paid from the General Revenue Fund under the continuing

16 appropriation authority provided in Section 1.1 of the State

17 Pension Funds Continuing Appropriation Act.

18 (c) The full amount of any annual appropriation for the

19 System for State fiscal year 1995 shall be transferred and made

20 available to the System at the beginning of that fiscal year at

21 the request of the Board. Any excess funds remaining at the end

22 of any fiscal year from appropriations shall be retained by the

23 System as a general reserve to meet the System's accrued

24 liabilities.

25 (Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;

26 97-694, eff. 6-18-12.)

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1 (40 ILCS 5/2-162)

2 (Text of Section WITHOUT the changes made by P.A. 98-599,

3 which has been held unconstitutional)

4 Sec. 2-162. Application and expiration of new benefit

5 increases.

6 (a) As used in this Section, "new benefit increase" means

7 an increase in the amount of any benefit provided under this

8 Article, or an expansion of the conditions of eligibility for

9 any benefit under this Article, that results from an amendment

10 to this Code that takes effect after the effective date of this

11 amendatory Act of the 94th General Assembly. "New benefit

12 increase", however, does not include any benefit increase

13 resulting from the changes made to this Article by this

14 amendatory Act of the 100th General Assembly.

15 (b) Notwithstanding any other provision of this Code or any

16 subsequent amendment to this Code, every new benefit increase

17 is subject to this Section and shall be deemed to be granted

18 only in conformance with and contingent upon compliance with

19 the provisions of this Section.

20 (c) The Public Act enacting a new benefit increase must

21 identify and provide for payment to the System of additional

22 funding at least sufficient to fund the resulting annual

23 increase in cost to the System as it accrues.

24 Every new benefit increase is contingent upon the General

25 Assembly providing the additional funding required under this

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1 subsection. The Commission on Government Forecasting and

2 Accountability shall analyze whether adequate additional

3 funding has been provided for the new benefit increase and

4 shall report its analysis to the Public Pension Division of the

5 Department of Insurance ~~Financial and Professional Regulation~~.

6 A new benefit increase created by a Public Act that does not

7 include the additional funding required under this subsection

8 is null and void. If the Public Pension Division determines

9 that the additional funding provided for a new benefit increase

10 under this subsection is or has become inadequate, it may so

11 certify to the Governor and the State Comptroller and, in the

12 absence of corrective action by the General Assembly, the new

13 benefit increase shall expire at the end of the fiscal year in

14 which the certification is made.

15 (d) Every new benefit increase shall expire 5 years after

16 its effective date or on such earlier date as may be specified

17 in the language enacting the new benefit increase or provided

18 under subsection (c). This does not prevent the General

19 Assembly from extending or re-creating a new benefit increase

20 by law.

21 (e) Except as otherwise provided in the language creating

22 the new benefit increase, a new benefit increase that expires

23 under this Section continues to apply to persons who applied

24 and qualified for the affected benefit while the new benefit

25 increase was in effect and to the affected beneficiaries and

26 alternate payees of such persons, but does not apply to any

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1 other person, including without limitation a person who

2 continues in service after the expiration date and did not

3 apply and qualify for the affected benefit while the new

4 benefit increase was in effect.

5 (Source: P.A. 94-4, eff. 6-1-05.)

6 (40 ILCS 5/2-165.1 new)

7 Sec. 2-165.1. Defined contribution plan.

8 (a) By July 1, 2018, the System shall prepare and implement

9 a voluntary defined contribution plan for up to 5% of eligible

10 active Tier 1 employees. The System shall determine the 5% cap

11 by the number of active Tier 1 employees on the effective date

12 of this Section. The defined contribution plan developed under

13 this Section shall be a plan that aggregates employer and

14 employee contributions in individual participant accounts

15 which, after meeting any other requirements, are used for

16 payouts after retirement in accordance with this Section and

17 any other applicable laws.

18 As used in this Section, "defined benefit plan" means the

19 retirement plan available under this Article to Tier 1

20 employees who have not made the election authorized under this

21 Section.

22 (1) Under the defined contribution plan, an active Tier

23 1 employee of this System could elect to cease accruing

24 benefits in the defined benefit plan under this Article and

25 begin accruing benefits for future service in the defined

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1 contribution plan. Service credit under the defined

2 contribution plan may be used for determining retirement

3 eligibility under the defined benefit plan.

4 (2) Participants in the defined contribution plan

5 shall pay employee contributions at the same rate as Tier 1

6 employees in this System who do not participate in the

7 defined contribution plan.

8 (3) State contributions shall be paid into the accounts

9 of all participants in the defined contribution plan at a

10 uniform rate, expressed as a percentage of compensation and

11 determined for each year. This rate shall be no higher than

12 the employer's normal cost for Tier 1 employees in the

13 defined benefit plan for that year, as determined by the

14 System and expressed as a percentage of compensation, and

15 shall be no lower than 3% of compensation. The State shall

16 adjust this rate annually.

17 (4) The defined contribution plan shall require 5 years

18 of participation in the defined contribution plan before

19 vesting in State contributions. If the participant fails to

20 vest in them, the State contributions, and the earnings

21 thereon, shall be forfeited.

22 (5) The defined contribution plan may provide for

23 participants in the plan to be eligible for defined

24 disability benefits. If it does, the System shall reduce

25 the employee contributions credited to the participant's

26 defined contribution plan account by an amount determined

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1 by the System to cover the cost of offering such benefits.

2 (6) The defined contribution plan shall provide a

3 variety of options for investments. These options shall

4 include investments handled by the Illinois State Board of

5 Investment as well as private sector investment options.

6 (7) The defined contribution plan shall provide a

7 variety of options for payouts to retirees and their

8 survivors.

9 (8) To the extent authorized under federal law and as

10 authorized by the System, the plan shall allow former

11 participants in the plan to transfer or roll over employee

12 and vested State contributions, and the earnings thereon,

13 into other qualified retirement plans.

14 (9) The System shall reduce the employee contributions

15 credited to the participant's defined contribution plan

16 account by an amount determined by the System to cover the

17 cost of offering these benefits and any applicable

18 administrative fees.

19 (b) Only persons who are active Tier 1 employees of the

20 System on the effective date of this Section are eligible to

21 participate in the defined contribution plan. Participation in

22 the defined contribution plan shall be limited to the first 5%

23 of eligible persons who elect to participate. The election to

24 participate in the defined contribution plan is voluntary and

25 irrevocable.

26 (c) An eligible active Tier 1 employee may irrevocably

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1 elect to participate in the defined contribution plan by filing

2 with the System a written application to participate that is

3 received by the System prior to its determination that 5% of

4 eligible persons have elected to participate in the defined

5 contribution plan.

6 When the System first determines that 5% of eligible

7 persons have elected to participate in the defined contribution

8 plan, the System shall provide notice to previously eligible

9 employees that the plan is no longer available and shall cease

10 accepting applications to participate.

11 (d) The System shall make a good faith effort to contact

12 each active Tier 1 employee who is eligible to participate in

13 the defined contribution plan. The System shall mail

14 information describing the option to join the defined

15 contribution plan to each of these employees to his or her last

16 known address on file with the System. If the employee is not

17 responsive to other means of contact, it is sufficient for the

18 System to publish the details of the option on its website.

19 Upon request for further information describing the

20 option, the System shall provide employees with information

21 from the System before exercising the option to join the plan,

22 including information on the impact to their vested benefits or

23 non-vested service. The individual consultation shall include

24 projections of the participant's defined benefits at

25 retirement or earlier termination of service and the value of

26 the participant's account at retirement or earlier termination

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1 of service. The System shall not provide advice or counseling

2 with respect to whether the employee should exercise the

3 option. The System shall inform Tier 1 employees who are

4 eligible to participate in the defined contribution plan that

5 they may also wish to obtain information and counsel relating

6 to their option from any other available source, including but

7 not limited to labor organizations, private counsel, and

8 financial advisors.

9 (e) In no event shall the System, its staff, its authorized

10 representatives, or the Board be liable for any information

11 given to an employee under this Section. The System may

12 coordinate with the Illinois Department of Central Management

13 Services and other retirement systems administering a defined

14 contribution plan in accordance with this amendatory Act of the

15 100th General Assembly to provide information concerning the

16 impact of the option set forth in this Section.

17 (f) Notwithstanding any other provision of this Section, no

18 person shall begin participating in the defined contribution

19 plan until it has attained qualified plan status and received

20 all necessary approvals from the U.S. Internal Revenue Service.

21 (g) The System shall report on its progress under this

22 Section, including the available details of the defined

23 contribution plan and the System's plans for informing eligible

24 Tier 1 employees about the plan, to the Governor and the

25 General Assembly on or before January 15, 2018.

26 (h) The Illinois State Board of Investments shall be the

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1 plan sponsor for the defined contribution plan established

2 under this Section.

3 (i) The intent of this amendatory Act of the 100th General

4 Assembly is to ensure that the State's normal cost of

5 participation in the defined contribution plan is similar, and

6 if possible equal, to the State's normal cost of participation

7 in the defined benefit plan, unless a lower State's normal cost

8 is necessary to ensure cost neutrality.

9 (40 ILCS 5/2-166.1 new)

10 Sec. 2-166.1. Defined contribution plan; termination. If

11 the defined contribution plan is terminated or becomes

12 inoperative pursuant to law, then each participant in the plan

13 shall automatically be deemed to have been a contributing Tier

14 1 employee in the System's defined benefit plan during the time

15 in which he or she participated in the defined contribution

16 plan, and for that purpose the System shall be entitled to

17 recover the amounts in the participant's defined contribution

18 accounts.

19 (40 ILCS 5/14-103.41 new)

20 Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An

21 employee under this Article who first became a member or

22 participant before January 1, 2011 under any reciprocal

23 retirement system or pension fund established under this Code

24 other than a retirement system or pension fund established

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1 under Article 2, 3, 4, 5, 6, or 18 of this Code.

2 (40 ILCS 5/14-131)

3 Sec. 14-131. Contributions by State.

4 (a) The State shall make contributions to the System by

5 appropriations of amounts which, together with other employer

6 contributions from trust, federal, and other funds, employee

7 contributions, investment income, and other income, will be

8 sufficient to meet the cost of maintaining and administering

9 the System on a 90% funded basis in accordance with actuarial

10 recommendations.

11 For the purposes of this Section and Section 14-135.08,

12 references to State contributions refer only to employer

13 contributions and do not include employee contributions that

14 are picked up or otherwise paid by the State or a department on

15 behalf of the employee.

16 (b) The Board shall determine the total amount of State

17 contributions required for each fiscal year on the basis of the

18 actuarial tables and other assumptions adopted by the Board,

19 using the formula in subsection (e).

20 The Board shall also determine a State contribution rate

21 for each fiscal year, expressed as a percentage of payroll,

22 based on the total required State contribution for that fiscal

23 year (less the amount received by the System from

24 appropriations under Section 8.12 of the State Finance Act and

25 Section 1 of the State Pension Funds Continuing Appropriation

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1 Act, if any, for the fiscal year ending on the June 30

2 immediately preceding the applicable November 15 certification

3 deadline), the estimated payroll (including all forms of

4 compensation) for personal services rendered by eligible

5 employees, and the recommendations of the actuary.

6 For the purposes of this Section and Section 14.1 of the

7 State Finance Act, the term "eligible employees" includes

8 employees who participate in the System, persons who may elect

9 to participate in the System but have not so elected, persons

10 who are serving a qualifying period that is required for

11 participation, and annuitants employed by a department as

12 described in subdivision (a)(1) or (a)(2) of Section 14-111.

13 (c) Contributions shall be made by the several departments

14 for each pay period by warrants drawn by the State Comptroller

15 against their respective funds or appropriations based upon

16 vouchers stating the amount to be so contributed. These amounts

17 shall be based on the full rate certified by the Board under

18 Section 14-135.08 for that fiscal year. From the effective date

19 of this amendatory Act of the 93rd General Assembly through the

20 payment of the final payroll from fiscal year 2004

21 appropriations, the several departments shall not make

22 contributions for the remainder of fiscal year 2004 but shall

23 instead make payments as required under subsection (a-1) of

24 Section 14.1 of the State Finance Act. The several departments

25 shall resume those contributions at the commencement of fiscal

26 year 2005.

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1 (c-1) Notwithstanding subsection (c) of this Section, for

2 fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,

3 contributions by the several departments are not required to be

4 made for General Revenue Funds payrolls processed by the

5 Comptroller. Payrolls paid by the several departments from all

6 other State funds must continue to be processed pursuant to

7 subsection (c) of this Section.

8 (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,

9 2016, and 2017 only, on or as soon as possible after the 15th

10 day of each month, the Board shall submit vouchers for payment

11 of State contributions to the System, in a total monthly amount

12 of one-twelfth of the fiscal year General Revenue Fund

13 contribution as certified by the System pursuant to Section

14 14-135.08 of the Illinois Pension Code.

15 (d) If an employee is paid from trust funds or federal

16 funds, the department or other employer shall pay employer

17 contributions from those funds to the System at the certified

18 rate, unless the terms of the trust or the federal-State

19 agreement preclude the use of the funds for that purpose, in

20 which case the required employer contributions shall be paid by

21 the State. From the effective date of this amendatory Act of

22 the 93rd General Assembly through the payment of the final

23 payroll from fiscal year 2004 appropriations, the department or

24 other employer shall not pay contributions for the remainder of

25 fiscal year 2004 but shall instead make payments as required

26 under subsection (a-1) of Section 14.1 of the State Finance

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1 Act. The department or other employer shall resume payment of

2 contributions at the commencement of fiscal year 2005.

3 (e) For State fiscal years 2018 through 2045, the minimum

4 contribution to the System to be made by the State for each

5 fiscal year shall be an amount determined by the System to be

6 sufficient to bring the total assets of the System up to 90% of

7 the total actuarial liabilities of the System by the end of

8 State fiscal year 2045. In making these determinations, the

9 required State contribution shall be calculated each year as a

10 level percentage of total payroll, including payroll that is

11 not deemed pensionable, over the years remaining to and

12 including fiscal year 2045 and shall be determined under the

13 projected unit credit actuarial cost method.

14 Beginning in State fiscal year 2018, any increase or

15 decrease in State contribution over the prior fiscal year due

16 exclusively to changes in actuarial or investment assumptions

17 adopted by the Board shall be included in the State

18 contribution to the System, as a percentage of the applicable

19 employee payroll, and shall be increased in equal annual

20 increments so that by the State fiscal year occurring 5 years

21 after the adoption of the actuarial or investment assumptions,

22 the State is contributing at the rate otherwise required under

23 this Section.

24 For State fiscal years 2012 through 2017 ~~2045~~, the minimum

25 contribution to the System to be made by the State for each

26 fiscal year shall be an amount determined by the System to be

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1 sufficient to bring the total assets of the System up to 90% of

2 the total actuarial liabilities of the System by the end of

3 State fiscal year 2045. In making these determinations, the

4 required State contribution shall be calculated each year as a

5 level percentage of payroll over the years remaining to and

6 including fiscal year 2045 and shall be determined under the

7 projected unit credit actuarial cost method.

8 For State fiscal years 1996 through 2005, the State

9 contribution to the System, as a percentage of the applicable

10 employee payroll, shall be increased in equal annual increments

11 so that by State fiscal year 2011, the State is contributing at

12 the rate required under this Section; except that (i) for State

13 fiscal year 1998, for all purposes of this Code and any other

14 law of this State, the certified percentage of the applicable

15 employee payroll shall be 5.052% for employees earning eligible

16 creditable service under Section 14-110 and 6.500% for all

17 other employees, notwithstanding any contrary certification

18 made under Section 14-135.08 before the effective date of this

19 amendatory Act of 1997, and (ii) in the following specified

20 State fiscal years, the State contribution to the System shall

21 not be less than the following indicated percentages of the

22 applicable employee payroll, even if the indicated percentage

23 will produce a State contribution in excess of the amount

24 otherwise required under this subsection and subsection (a):

25 9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY

26 2002; 10.6% in FY 2003; and 10.8% in FY 2004.

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1 Notwithstanding any other provision of this Article, the

2 total required State contribution to the System for State

3 fiscal year 2006 is $203,783,900.

4 Notwithstanding any other provision of this Article, the

5 total required State contribution to the System for State

6 fiscal year 2007 is $344,164,400.

7 For each of State fiscal years 2008 through 2009, the State

8 contribution to the System, as a percentage of the applicable

9 employee payroll, shall be increased in equal annual increments

10 from the required State contribution for State fiscal year

11 2007, so that by State fiscal year 2011, the State is

12 contributing at the rate otherwise required under this Section.

13 Notwithstanding any other provision of this Article, the

14 total required State General Revenue Fund contribution for

15 State fiscal year 2010 is $723,703,100 and shall be made from

16 the proceeds of bonds sold in fiscal year 2010 pursuant to

17 Section 7.2 of the General Obligation Bond Act, less (i) the

18 pro rata share of bond sale expenses determined by the System's

19 share of total bond proceeds, (ii) any amounts received from

20 the General Revenue Fund in fiscal year 2010, and (iii) any

21 reduction in bond proceeds due to the issuance of discounted

22 bonds, if applicable.

23 Notwithstanding any other provision of this Article, the

24 total required State General Revenue Fund contribution for

25 State fiscal year 2011 is the amount recertified by the System

26 on or before April 1, 2011 pursuant to Section 14-135.08 and

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1 shall be made from the proceeds of bonds sold in fiscal year

2 2011 pursuant to Section 7.2 of the General Obligation Bond

3 Act, less (i) the pro rata share of bond sale expenses

4 determined by the System's share of total bond proceeds, (ii)

5 any amounts received from the General Revenue Fund in fiscal

6 year 2011, and (iii) any reduction in bond proceeds due to the

7 issuance of discounted bonds, if applicable.

8 Beginning in State fiscal year 2046, the minimum State

9 contribution for each fiscal year shall be the amount needed to

10 maintain the total assets of the System at 90% of the total

11 actuarial liabilities of the System.

12 Amounts received by the System pursuant to Section 25 of

13 the Budget Stabilization Act or Section 8.12 of the State

14 Finance Act in any fiscal year do not reduce and do not

15 constitute payment of any portion of the minimum State

16 contribution required under this Article in that fiscal year.

17 Such amounts shall not reduce, and shall not be included in the

18 calculation of, the required State contributions under this

19 Article in any future year until the System has reached a

20 funding ratio of at least 90%. A reference in this Article to

21 the "required State contribution" or any substantially similar

22 term does not include or apply to any amounts payable to the

23 System under Section 25 of the Budget Stabilization Act.

24 Notwithstanding any other provision of this Section, the

25 required State contribution for State fiscal year 2005 and for

26 fiscal year 2008 and each fiscal year thereafter, as calculated

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1 under this Section and certified under Section 14-135.08, shall

2 not exceed an amount equal to (i) the amount of the required

3 State contribution that would have been calculated under this

4 Section for that fiscal year if the System had not received any

5 payments under subsection (d) of Section 7.2 of the General

6 Obligation Bond Act, minus (ii) the portion of the State's

7 total debt service payments for that fiscal year on the bonds

8 issued in fiscal year 2003 for the purposes of that Section

9 7.2, as determined and certified by the Comptroller, that is

10 the same as the System's portion of the total moneys

11 distributed under subsection (d) of Section 7.2 of the General

12 Obligation Bond Act. In determining this maximum for State

13 fiscal years 2008 through 2010, however, the amount referred to

14 in item (i) shall be increased, as a percentage of the

15 applicable employee payroll, in equal increments calculated

16 from the sum of the required State contribution for State

17 fiscal year 2007 plus the applicable portion of the State's

18 total debt service payments for fiscal year 2007 on the bonds

19 issued in fiscal year 2003 for the purposes of Section 7.2 of

20 the General Obligation Bond Act, so that, by State fiscal year

21 2011, the State is contributing at the rate otherwise required

22 under this Section.

23 (f) After the submission of all payments for eligible

24 employees from personal services line items in fiscal year 2004

25 have been made, the Comptroller shall provide to the System a

26 certification of the sum of all fiscal year 2004 expenditures

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1 for personal services that would have been covered by payments

2 to the System under this Section if the provisions of this

3 amendatory Act of the 93rd General Assembly had not been

4 enacted. Upon receipt of the certification, the System shall

5 determine the amount due to the System based on the full rate

6 certified by the Board under Section 14-135.08 for fiscal year

7 2004 in order to meet the State's obligation under this

8 Section. The System shall compare this amount due to the amount

9 received by the System in fiscal year 2004 through payments

10 under this Section and under Section 6z-61 of the State Finance

11 Act. If the amount due is more than the amount received, the

12 difference shall be termed the "Fiscal Year 2004 Shortfall" for

13 purposes of this Section, and the Fiscal Year 2004 Shortfall

14 shall be satisfied under Section 1.2 of the State Pension Funds

15 Continuing Appropriation Act. If the amount due is less than

16 the amount received, the difference shall be termed the "Fiscal

17 Year 2004 Overpayment" for purposes of this Section, and the

18 Fiscal Year 2004 Overpayment shall be repaid by the System to

19 the Pension Contribution Fund as soon as practicable after the

20 certification.

21 (g) For purposes of determining the required State

22 contribution to the System, the value of the System's assets

23 shall be equal to the actuarial value of the System's assets,

24 which shall be calculated as follows:

25 As of June 30, 2008, the actuarial value of the System's

26 assets shall be equal to the market value of the assets as of

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1 that date. In determining the actuarial value of the System's

2 assets for fiscal years after June 30, 2008, any actuarial

3 gains or losses from investment return incurred in a fiscal

4 year shall be recognized in equal annual amounts over the

5 5-year period following that fiscal year.

6 (h) For purposes of determining the required State

7 contribution to the System for a particular year, the actuarial

8 value of assets shall be assumed to earn a rate of return equal

9 to the System's actuarially assumed rate of return.

10 (i) After the submission of all payments for eligible

11 employees from personal services line items paid from the

12 General Revenue Fund in fiscal year 2010 have been made, the

13 Comptroller shall provide to the System a certification of the

14 sum of all fiscal year 2010 expenditures for personal services

15 that would have been covered by payments to the System under

16 this Section if the provisions of this amendatory Act of the

17 96th General Assembly had not been enacted. Upon receipt of the

18 certification, the System shall determine the amount due to the

19 System based on the full rate certified by the Board under

20 Section 14-135.08 for fiscal year 2010 in order to meet the

21 State's obligation under this Section. The System shall compare

22 this amount due to the amount received by the System in fiscal

23 year 2010 through payments under this Section. If the amount

24 due is more than the amount received, the difference shall be

25 termed the "Fiscal Year 2010 Shortfall" for purposes of this

26 Section, and the Fiscal Year 2010 Shortfall shall be satisfied

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1 under Section 1.2 of the State Pension Funds Continuing

2 Appropriation Act. If the amount due is less than the amount

3 received, the difference shall be termed the "Fiscal Year 2010

4 Overpayment" for purposes of this Section, and the Fiscal Year

5 2010 Overpayment shall be repaid by the System to the General

6 Revenue Fund as soon as practicable after the certification.

7 (j) After the submission of all payments for eligible

8 employees from personal services line items paid from the

9 General Revenue Fund in fiscal year 2011 have been made, the

10 Comptroller shall provide to the System a certification of the

11 sum of all fiscal year 2011 expenditures for personal services

12 that would have been covered by payments to the System under

13 this Section if the provisions of this amendatory Act of the

14 96th General Assembly had not been enacted. Upon receipt of the

15 certification, the System shall determine the amount due to the

16 System based on the full rate certified by the Board under

17 Section 14-135.08 for fiscal year 2011 in order to meet the

18 State's obligation under this Section. The System shall compare

19 this amount due to the amount received by the System in fiscal

20 year 2011 through payments under this Section. If the amount

21 due is more than the amount received, the difference shall be

22 termed the "Fiscal Year 2011 Shortfall" for purposes of this

23 Section, and the Fiscal Year 2011 Shortfall shall be satisfied

24 under Section 1.2 of the State Pension Funds Continuing

25 Appropriation Act. If the amount due is less than the amount

26 received, the difference shall be termed the "Fiscal Year 2011

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1 Overpayment" for purposes of this Section, and the Fiscal Year

2 2011 Overpayment shall be repaid by the System to the General

3 Revenue Fund as soon as practicable after the certification.

4 (k) For fiscal years 2012 through 2017 only, after the

5 submission of all payments for eligible employees from personal

6 services line items paid from the General Revenue Fund in the

7 fiscal year have been made, the Comptroller shall provide to

8 the System a certification of the sum of all expenditures in

9 the fiscal year for personal services. Upon receipt of the

10 certification, the System shall determine the amount due to the

11 System based on the full rate certified by the Board under

12 Section 14-135.08 for the fiscal year in order to meet the

13 State's obligation under this Section. The System shall compare

14 this amount due to the amount received by the System for the

15 fiscal year. If the amount due is more than the amount

16 received, the difference shall be termed the "Prior Fiscal Year

17 Shortfall" for purposes of this Section, and the Prior Fiscal

18 Year Shortfall shall be satisfied under Section 1.2 of the

19 State Pension Funds Continuing Appropriation Act. If the amount

20 due is less than the amount received, the difference shall be

21 termed the "Prior Fiscal Year Overpayment" for purposes of this

22 Section, and the Prior Fiscal Year Overpayment shall be repaid

23 by the System to the General Revenue Fund as soon as

24 practicable after the certification.

25 (Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,

26 eff. 7-9-15; 99-523, eff. 6-30-16.)

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1 (40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)

2 (Text of Section WITHOUT the changes made by P.A. 98-599,

3 which has been held unconstitutional)

4 Sec. 14-135.08. To certify required State contributions.

5 (a) To certify to the Governor and to each department, on

6 or before November 15 of each year until November 15, 2011, the

7 required rate for State contributions to the System for the

8 next State fiscal year, as determined under subsection (b) of

9 Section 14-131. The certification to the Governor under this

10 subsection (a) shall include a copy of the actuarial

11 recommendations upon which the rate is based and shall

12 specifically identify the System's projected State normal cost

13 for that fiscal year.

14 (a-5) On or before November 1 of each year, beginning

15 November 1, 2012, the Board shall submit to the State Actuary,

16 the Governor, and the General Assembly a proposed certification

17 of the amount of the required State contribution to the System

18 for the next fiscal year, along with all of the actuarial

19 assumptions, calculations, and data upon which that proposed

20 certification is based. On or before January 1 of each year

21 beginning January 1, 2013, the State Actuary shall issue a

22 preliminary report concerning the proposed certification and

23 identifying, if necessary, recommended changes in actuarial

24 assumptions that the Board must consider before finalizing its

25 certification of the required State contributions. On or before

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1 January 15, 2013 and each January 15 thereafter, the Board

2 shall certify to the Governor and the General Assembly the

3 amount of the required State contribution for the next fiscal

4 year. The Board's certification must note any deviations from

5 the State Actuary's recommended changes, the reason or reasons

6 for not following the State Actuary's recommended changes, and

7 the fiscal impact of not following the State Actuary's

8 recommended changes on the required State contribution.

9 (a-10) For purposes of subsection (c-5) of Section 20 of

10 the Budget Stabilization Act, on or before November 1 of each

11 year beginning November 1, 2019, the Board shall determine the

12 amount of the State contribution to the System that would have

13 been required for the next fiscal year if Section 1-161,

14 Section 14-155.2, and the changes made to Section 1-160 by this

15 amendatory Act of the 100th General Assembly had not taken

16 effect, using the best and most recent available data but based

17 on the law in effect on May 31, 2019. The Board shall submit to

18 the State Actuary, the Governor, and the General Assembly a

19 proposed certification, along with the relevant law, actuarial

20 assumptions, calculations, and data upon which that

21 certification is based. On or before January 1, 2020 and every

22 January 1 thereafter, the State Actuary shall issue a

23 preliminary report concerning the proposed certification and

24 identifying, if necessary, recommended changes in actuarial

25 assumptions that the Board must consider before finalizing its

26 certification. On or before January 15, 2020 and every January

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1 1 thereafter, the Board shall certify to the Governor and the

2 General Assembly the amount of the State contribution to the

3 System that would have been required for the next fiscal year

4 if Section 1-161, Section 14-155.2, and the changes made to

5 Section 1-160 by this amendatory Act of the 100th General

6 Assembly had not taken effect, using the best and most recent

7 available data but based on the law in effect on May 31, 2019.

8 The Board's certification must note any deviations from the

9 State Actuary's recommended changes, the reason or reasons for

10 not following the State Actuary's recommended changes, and the

11 impact of not following the State Actuary's recommended

12 changes.

13 (b) The certifications under subsections (a) and (a-5)

14 shall include an additional amount necessary to pay all

15 principal of and interest on those general obligation bonds due

16 the next fiscal year authorized by Section 7.2(a) of the

17 General Obligation Bond Act and issued to provide the proceeds

18 deposited by the State with the System in July 2003,

19 representing deposits other than amounts reserved under

20 Section 7.2(c) of the General Obligation Bond Act. For State

21 fiscal year 2005, the Board shall make a supplemental

22 certification of the additional amount necessary to pay all

23 principal of and interest on those general obligation bonds due

24 in State fiscal years 2004 and 2005 authorized by Section

25 7.2(a) of the General Obligation Bond Act and issued to provide

26 the proceeds deposited by the State with the System in July

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1 2003, representing deposits other than amounts reserved under

2 Section 7.2(c) of the General Obligation Bond Act, as soon as

3 practical after the effective date of this amendatory Act of

4 the 93rd General Assembly.

5 On or before May 1, 2004, the Board shall recalculate and

6 recertify to the Governor and to each department the amount of

7 the required State contribution to the System and the required

8 rates for State contributions to the System for State fiscal

9 year 2005, taking into account the amounts appropriated to and

10 received by the System under subsection (d) of Section 7.2 of

11 the General Obligation Bond Act.

12 On or before July 1, 2005, the Board shall recalculate and

13 recertify to the Governor and to each department the amount of

14 the required State contribution to the System and the required

15 rates for State contributions to the System for State fiscal

16 year 2006, taking into account the changes in required State

17 contributions made by this amendatory Act of the 94th General

18 Assembly.

19 On or before April 1, 2011, the Board shall recalculate and

20 recertify to the Governor and to each department the amount of

21 the required State contribution to the System for State fiscal

22 year 2011, applying the changes made by Public Act 96-889 to

23 the System's assets and liabilities as of June 30, 2009 as

24 though Public Act 96-889 was approved on that date.

25 As soon as practical after the effective date of this

26 amendatory Act of the 100th General Assembly, the Board shall

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1 recalculate and recertify to the State Actuary, the Governor,

2 and the General Assembly the amount of the State contribution

3 to the System for State fiscal year 2018, taking into account

4 the changes in required State contributions made by this

5 amendatory Act of the 100th General Assembly. The State Actuary

6 shall review the assumptions and valuations underlying the

7 Board's revised certification and issue a preliminary report

8 concerning the proposed recertification and identifying, if

9 necessary, recommended changes in actuarial assumptions that

10 the Board must consider before finalizing its certification of

11 the required State contributions. The Board's final

12 certification must note any deviations from the State Actuary's

13 recommended changes, the reason or reasons for not following

14 the State Actuary's recommended changes, and the fiscal impact

15 of not following the State Actuary's recommended changes on the

16 required State contribution.

17 (Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;

18 97-694, eff. 6-18-12.)

19 (40 ILCS 5/14-147.5 new)

20 Sec. 14-147.5. Accelerated pension benefit payment.

21 (a) As used in this Section:

22 "Eligible person" means a person who:

23 (1) has terminated service;

24 (2) has accrued sufficient service credit to be

25 eligible to receive a retirement annuity under this

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1 Article;

2 (3) has not received any retirement annuity under this

3 Article; and

4 (4) does not have a QILDRO in effect against him or her

5 under this Article.

6 "Pension benefit" means the benefits under this Article, or

7 Article 1 as it relates to those benefits, including any

8 anticipated annual increases, that an eligible person is

9 entitled to upon attainment of the applicable retirement age.

10 "Pension benefit" also includes applicable survivor's or

11 disability benefits.

12 (b) Before January 1, 2019, and annually thereafter, the

13 System shall calculate, using actuarial tables and other

14 assumptions adopted by the Board, the net present value of

15 pension benefits for each eligible person and shall offer each

16 eligible person the opportunity to irrevocably elect to receive

17 an amount determined by the System to be equal to 70% of the

18 net present value of his or her pension benefits in lieu of

19 receiving any pension benefit. The offer shall specify the

20 dollar amount that the eligible person will receive if he or

21 she so elects and shall expire when a subsequent offer is made

22 to an eligible person or when the System determines that 10% of

23 eligible persons in that year have made the election under this

24 subsection, whichever occurs first. The System shall make a

25 good faith effort to contact every eligible person to notify

26 him or her of the election and of the amount of the accelerated

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1 pension benefit payment.

2 Until the System determines that 10% of eligible persons in

3 that year have made the election under this subsection, an

4 eligible person may irrevocably elect to receive an accelerated

5 pension benefit payment in the amount that the System offers

6 under this subsection in lieu of receiving any pension benefit.

7 A person who elects to receive an accelerated pension benefit

8 payment under this Section may not elect to proceed under the

9 Retirement Systems Reciprocal Act with respect to service under

10 this Article.

11 (c) A person's credits and creditable service under this

12 Article shall be terminated upon the person's receipt of an

13 accelerated pension benefit payment under this Section, and no

14 other benefit shall be paid under this Article based on those

15 terminated credits and creditable service, including any

16 retirement, survivor, or other benefit; except that to the

17 extent that participation, benefits, or premiums under the

18 State Employees Group Insurance Act of 1971 are based on the

19 amount of service credit, the terminated service credit shall

20 be used for that purpose.

21 (d) If a person who has received an accelerated pension

22 benefit payment under this Section returns to active service

23 under this Article, then:

24 (1) Any benefits under the System earned as a result of

25 that return to active service shall be based solely on the

26 person's credits and creditable service arising from the

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1 return to active service.

2 (2) The accelerated pension benefit payment may not be

3 repaid to the System, and the terminated credits and

4 creditable service may not under any circumstances be

5 reinstated.

6 (e) As a condition of receiving an accelerated pension

7 benefit payment, an eligible person must have another

8 retirement plan or account qualified under the Internal Revenue

9 Code of 1986, as amended, for the accelerated pension benefit

10 payment to be rolled into. The accelerated pension benefit

11 payment under this Section may be subject to withholding or

12 payment of applicable taxes, but to the extent permitted by

13 federal law, a person who receives an accelerated pension

14 benefit payment under this Section must direct the System to

15 pay all of that payment as a rollover into another retirement

16 plan or account qualified under the Internal Revenue Code of

17 1986, as amended.

18 (f) Before January 1, 2020 and every January 1 thereafter,

19 the Board shall certify to the Illinois Finance Authority and

20 the General Assembly the amount by which the total amount of

21 accelerated pension benefit payments made under this Section

22 exceed the amount appropriated to the System for the purpose of

23 making those payments.

24 (g) The Board shall adopt any rules necessary to implement

25 this Section.

26 (h) No provision of this Section shall be interpreted in a

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1 way that would cause the applicable System to cease to be a

2 qualified plan under the Internal Revenue Code of 1986.

3 (i) Notwithstanding any other provision of this Section, in

4 no case shall the total amount of accelerated pension benefit

5 payments paid under this Section, Section 15-185.5, and Section

6 16-190.5 cause the Illinois Finance Authority to issue more

7 than the $250,000,000 of State Pension Obligation Acceleration

8 Bonds authorized in subsection (c-5) of Section 801-40 of the

9 Illinois Finance Authority Act.

10 (40 ILCS 5/14-152.1)

11 (Text of Section WITHOUT the changes made by P.A. 98-599,

12 which has been held unconstitutional)

13 Sec. 14-152.1. Application and expiration of new benefit

14 increases.

15 (a) As used in this Section, "new benefit increase" means

16 an increase in the amount of any benefit provided under this

17 Article, or an expansion of the conditions of eligibility for

18 any benefit under this Article, that results from an amendment

19 to this Code that takes effect after June 1, 2005 (the

20 effective date of Public Act 94-4). "New benefit increase",

21 however, does not include any benefit increase resulting from

22 the changes made to this Article by Public Act 96-37 or by this

23 amendatory Act of the 100th General Assembly ~~this amendatory~~

24 ~~Act of the 96th General Assembly~~.

25 (b) Notwithstanding any other provision of this Code or any

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1 subsequent amendment to this Code, every new benefit increase

2 is subject to this Section and shall be deemed to be granted

3 only in conformance with and contingent upon compliance with

4 the provisions of this Section.

5 (c) The Public Act enacting a new benefit increase must

6 identify and provide for payment to the System of additional

7 funding at least sufficient to fund the resulting annual

8 increase in cost to the System as it accrues.

9 Every new benefit increase is contingent upon the General

10 Assembly providing the additional funding required under this

11 subsection. The Commission on Government Forecasting and

12 Accountability shall analyze whether adequate additional

13 funding has been provided for the new benefit increase and

14 shall report its analysis to the Public Pension Division of the

15 Department of Insurance ~~Financial and Professional Regulation~~.

16 A new benefit increase created by a Public Act that does not

17 include the additional funding required under this subsection

18 is null and void. If the Public Pension Division determines

19 that the additional funding provided for a new benefit increase

20 under this subsection is or has become inadequate, it may so

21 certify to the Governor and the State Comptroller and, in the

22 absence of corrective action by the General Assembly, the new

23 benefit increase shall expire at the end of the fiscal year in

24 which the certification is made.

25 (d) Every new benefit increase shall expire 5 years after

26 its effective date or on such earlier date as may be specified

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1 in the language enacting the new benefit increase or provided

2 under subsection (c). This does not prevent the General

3 Assembly from extending or re-creating a new benefit increase

4 by law.

5 (e) Except as otherwise provided in the language creating

6 the new benefit increase, a new benefit increase that expires

7 under this Section continues to apply to persons who applied

8 and qualified for the affected benefit while the new benefit

9 increase was in effect and to the affected beneficiaries and

10 alternate payees of such persons, but does not apply to any

11 other person, including without limitation a person who

12 continues in service after the expiration date and did not

13 apply and qualify for the affected benefit while the new

14 benefit increase was in effect.

15 (Source: P.A. 96-37, eff. 7-13-09.)

16 (40 ILCS 5/14-155.1 new)

17 Sec. 14-155.1. Defined contribution plan.

18 (a) By July 1, 2019, the System shall prepare and implement

19 a voluntary defined contribution plan for up to 5% of eligible

20 active Tier 1 employees. The System shall determine the 5% cap

21 by the number of active Tier 1 employees on the effective date

22 of this Section. The defined contribution plan developed under

23 this Section shall be a plan that aggregates employer and

24 employee contributions in individual participant accounts

25 which, after meeting any other requirements, are used for

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1 payouts after retirement in accordance with this Section and

2 any other applicable laws.

3 As used in this Section, "defined benefit plan" means the

4 retirement plan available under this Article to Tier 1

5 employees who have not made the election authorized under this

6 Section.

7 (1) Under the defined contribution plan, an active Tier

8 1 employee of this System could elect to cease accruing

9 benefits in the defined benefit plan under this Article and

10 begin accruing benefits for future service in the defined

11 contribution plan. Service credit under the defined

12 contribution plan may be used for determining retirement

13 eligibility under the defined benefit plan.

14 (2) Participants in the defined contribution plan

15 shall pay employee contributions at the same rate as Tier 1

16 employees in this System who do not participate in the

17 defined contribution plan.

18 (3) State contributions shall be paid into the accounts

19 of all participants in the defined contribution plan at a

20 uniform rate, expressed as a percentage of compensation and

21 determined for each year. This rate shall be no higher than

22 the employer's normal cost for Tier 1 employees in the

23 defined benefit plan for that year, as determined by the

24 System and expressed as a percentage of compensation, and

25 shall be no lower than 3% of compensation. The State shall

26 adjust this rate annually.

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1 (4) The defined contribution plan shall require 5 years

2 of participation in the defined contribution plan before

3 vesting in State contributions. If the participant fails to

4 vest in them, the State contributions, and the earnings

5 thereon, shall be forfeited.

6 (5) The defined contribution plan may provide for

7 participants in the plan to be eligible for the defined

8 disability benefits available to other participants under

9 this Article. If it does, the System shall reduce the

10 employee contributions credited to the member's defined

11 contribution plan account by an amount determined by the

12 System to cover the cost of offering such benefits.

13 (6) The defined contribution plan shall provide a

14 variety of options for investments. These options shall

15 include investments handled by the Illinois State Board of

16 Investment as well as private sector investment options.

17 (7) The defined contribution plan shall provide a

18 variety of options for payouts to retirees and their

19 survivors.

20 (8) To the extent authorized under federal law and as

21 authorized by the System, the plan shall allow former

22 participants in the plan to transfer or roll over employee

23 and vested State contributions, and the earnings thereon,

24 into other qualified retirement plans.

25 (9) The System shall reduce the employee contributions

26 credited to the member's defined contribution plan account

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1 by an amount determined by the System to cover the cost of

2 offering these benefits and any applicable administrative

3 fees.

4 (b) Only persons who are active Tier 1 employees of the

5 System on the effective date of this Section are eligible to

6 participate in the defined contribution plan. Participation in

7 the defined contribution plan shall be limited to the first 5%

8 of eligible persons who elect to participate. The election to

9 participate in the defined contribution plan is voluntary and

10 irrevocable.

11 (c) An eligible Tier 1 employee may irrevocably elect to

12 participate in the defined contribution plan by filing with the

13 System a written application to participate that is received by

14 the System prior to its determination that 5% of eligible

15 persons have elected to participate in the defined contribution

16 plan.

17 When the System first determines that 5% of eligible

18 persons have elected to participate in the defined contribution

19 plan, the System shall provide notice to previously eligible

20 employees that the plan is no longer available and shall cease

21 accepting applications to participate.

22 (d) The System shall make a good faith effort to contact

23 each active Tier 1 employee who is eligible to participate in

24 the defined contribution plan. The System shall mail

25 information describing the option to join the defined

26 contribution plan to each of these employees to his or her last

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1 known address on file with the System. If the employee is not

2 responsive to other means of contact, it is sufficient for the

3 System to publish the details of the option on its website.

4 Upon request for further information describing the

5 option, the System shall provide employees with information

6 from the System before exercising the option to join the plan,

7 including information on the impact to their vested benefits or

8 non-vested service. The individual consultation shall include

9 projections of the member's defined benefits at retirement or

10 earlier termination of service and the value of the member's

11 account at retirement or earlier termination of service. The

12 System shall not provide advice or counseling with respect to

13 whether the employee should exercise the option. The System

14 shall inform Tier 1 employees who are eligible to participate

15 in the defined contribution plan that they may also wish to

16 obtain information and counsel relating to their option from

17 any other available source, including, but not limited to,

18 labor organizations, private counsel, and financial advisors.

19 (e) In no event shall the System, its staff, its authorized

20 representatives, or the Board be liable for any information

21 given to an employee under this Section. The System may

22 coordinate with the Illinois Department of Central Management

23 Services and other retirement systems administering a defined

24 contribution plan in accordance with this amendatory Act of the

25 100th General Assembly to provide information concerning the

26 impact of the option set forth in this Section.

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1 (f) Notwithstanding any other provision of this Section, no

2 person shall begin participating in the defined contribution

3 plan until it has attained qualified plan status and received

4 all necessary approvals from the U.S. Internal Revenue Service.

5 (g) The System shall report on its progress under this

6 Section, including the available details of the defined

7 contribution plan and the System's plans for informing eligible

8 Tier 1 employees about the plan, to the Governor and the

9 General Assembly on or before January 15, 2019.

10 (h) The Illinois State Board of Investment shall be the

11 plan sponsor for the defined contribution plan established

12 under this Section.

13 (i) The intent of this amendatory Act of the 100th General

14 Assembly is to ensure that the State's normal cost of

15 participation in the defined contribution plan is similar, and

16 if possible equal, to the State's normal cost of participation

17 in the defined benefit plan, unless a lower State's normal cost

18 is necessary to ensure cost neutrality.

19 (40 ILCS 5/14-155.2 new)

20 Sec. 14-155.2. Defined contribution plan for certain

21 covered employees.

22 (a) As used in this Section:

23 "Defined benefit plan" means the retirement plan available

24 under this Article and Section 1-160 to eligible covered

25 employees who do not make the election authorized under this

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1 Section.

2 "Eligible covered employee" means a covered employee who

3 first becomes a participant under this Article on or after 6

4 months after the effective date of this amendatory Act of the

5 100th General Assembly.

6 (b) In lieu of the defined benefit plan, an eligible

7 covered employee may irrevocably elect to participate in the

8 defined contribution plan under this Section. The election to

9 participate in the defined contribution plan must be made

10 within 30 days after becoming an eligible covered employee. The

11 election to participate in the defined contribution plan under

12 this Section is voluntary and irrevocable.

13 (c) No later than 5 months after the effective date of this

14 amendatory Act of the 100th General Assembly, the System shall

15 prepare and implement a voluntary defined contribution plan for

16 eligible covered employees. The defined contribution plan

17 developed under this Section shall be a plan that aggregates

18 employer and employee contributions in individual participant

19 accounts which, after meeting any other requirements, are used

20 for payouts after retirement in accordance with this Section

21 and any other applicable laws.

22 (1) A participant in the defined contribution plan

23 shall contribute a minimum of 3% of his or her compensation

24 to the defined contribution plan.

25 (2) For persons who participate in the defined

26 contribution plan for at least one year, employer

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1 contributions shall be paid into the accounts of those

2 participants at a rate of 3% of compensation.

3 (3) Employer contributions shall vest when those

4 contributions are paid into a participant's account.

5 (4) The defined contribution plan shall provide a

6 variety of options for investments. These options shall

7 include investments handled by the Illinois State Board of

8 Investment as well as private sector investment options.

9 (5) The defined contribution plan shall provide a

10 variety of options for payouts to retirees and their

11 survivors.

12 (6) To the extent authorized under federal law and as

13 authorized by the affected pension fund, the defined

14 contribution plan shall allow former participants in the

15 plan to transfer or roll over employee and employer

16 contributions, and the earnings thereon, into other

17 qualified retirement plans.

18 (7) The System shall reduce the employee contributions

19 credited to the participant's defined contribution plan

20 account by an amount determined by the System to cover the

21 cost of offering the benefits under this Section and any

22 applicable administrative fees.

23 (40 ILCS 5/14-156.1 new)

24 Sec. 14-156.1. Defined contribution plan; termination. If

25 the defined contribution plan under Section 14-155.1 is

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1 terminated or becomes inoperative pursuant to law, then each

2 participant in the plan shall automatically be deemed to have

3 been a contributing Tier 1 employee in the System's defined

4 benefit plan during the time in which he or she participated in

5 the defined contribution plan, and for that purpose the System

6 shall be entitled to recover the amounts in the participant's

7 defined contribution accounts.

8 (40 ILCS 5/15-108.1)

9 Sec. 15-108.1. Tier 1 member; Tier 1 employee.

10 "Tier 1 member": A participant or an annuitant of a

11 retirement annuity under this Article, other than a participant

12 in the self-managed plan under Section 15-158.2, who first

13 became a participant or member before January 1, 2011 under any

14 reciprocal retirement system or pension fund established under

15 this Code, other than a retirement system or pension fund

16 established under Articles 2, 3, 4, 5, 6, or 18 of this Code.

17 "Tier 1 member" includes a person who first became a

18 participant under this System before January 1, 2011 and who

19 accepts a refund and is subsequently reemployed by an employer

20 on or after January 1, 2011.

21 "Tier 1 employee": A Tier 1 member who is a participating

22 employee, unless he or she is a disability benefit recipient

23 under Section 15-150.

24 (Source: P.A. 98-92, eff. 7-16-13.)

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1 (40 ILCS 5/15-108.2)

2 Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who

3 first becomes a participant under this Article on or after

4 January 1, 2011 and before 6 months after the effective date of

5 this amendatory Act of the 100th General Assembly, other than a

6 person in the self-managed plan established under Section

7 15-158.2 or a person who makes the election under subsection

8 (c) of Section 1-161, unless the person is otherwise a Tier 1

9 member. The changes made to this Section by this amendatory Act

10 of the 98th General Assembly are a correction of existing law

11 and are intended to be retroactive to the effective date of

12 Public Act 96-889, notwithstanding the provisions of Section

13 1-103.1 of this Code.

14 (Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)

15 (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)

16 Sec. 15-155. Employer contributions.

17 (a) The State of Illinois shall make contributions by

18 appropriations of amounts which, together with the other

19 employer contributions from trust, federal, and other funds,

20 employee contributions, income from investments, and other

21 income of this System, will be sufficient to meet the cost of

22 maintaining and administering the System on a 90% funded basis

23 in accordance with actuarial recommendations.

24 The Board shall determine the amount of State contributions

25 required for each fiscal year on the basis of the actuarial

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1 tables and other assumptions adopted by the Board and the

2 recommendations of the actuary, using the formula in subsection

3 (a-1).

4 (a-1) For State fiscal years 2018 through 2045, the minimum

5 contribution to the System to be made by the State for each

6 fiscal year shall be an amount determined by the System to be

7 sufficient to bring the total assets of the System up to 90% of

8 the total actuarial liabilities of the System by the end of

9 State fiscal year 2045. In making these determinations, the

10 required State contribution shall be calculated each year as a

11 level percentage of total payroll, including payroll that is

12 not deemed pensionable, but excluding payroll attributable to

13 participants in the defined contribution plan under Section

14 15-200.1, over the years remaining to and including fiscal year

15 2045 and shall be determined under the projected unit credit

16 actuarial cost method.

17 Beginning in State fiscal year 2018, any increase or

18 decrease in State contribution over the prior fiscal year due

19 exclusively to changes in actuarial or investment assumptions

20 adopted by the Board shall be included in the State

21 contribution to the System, as a percentage of the applicable

22 employee payroll, and shall be increased in equal annual

23 increments so that by the State fiscal year occurring 5 years

24 after the adoption of the actuarial or investment assumptions,

25 the State is contributing at the rate otherwise required under

26 this Section.

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1 For State fiscal years 2012 through 2017 ~~2045~~, the minimum

2 contribution to the System to be made by the State for each

3 fiscal year shall be an amount determined by the System to be

4 sufficient to bring the total assets of the System up to 90% of

5 the total actuarial liabilities of the System by the end of

6 State fiscal year 2045. In making these determinations, the

7 required State contribution shall be calculated each year as a

8 level percentage of payroll over the years remaining to and

9 including fiscal year 2045 and shall be determined under the

10 projected unit credit actuarial cost method.

11 For State fiscal years 1996 through 2005, the State

12 contribution to the System, as a percentage of the applicable

13 employee payroll, shall be increased in equal annual increments

14 so that by State fiscal year 2011, the State is contributing at

15 the rate required under this Section.

16 Notwithstanding any other provision of this Article, the

17 total required State contribution for State fiscal year 2006 is

18 $166,641,900.

19 Notwithstanding any other provision of this Article, the

20 total required State contribution for State fiscal year 2007 is

21 $252,064,100.

22 For each of State fiscal years 2008 through 2009, the State

23 contribution to the System, as a percentage of the applicable

24 employee payroll, shall be increased in equal annual increments

25 from the required State contribution for State fiscal year

26 2007, so that by State fiscal year 2011, the State is

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1 contributing at the rate otherwise required under this Section.

2 Notwithstanding any other provision of this Article, the

3 total required State contribution for State fiscal year 2010 is

4 $702,514,000 and shall be made from the State Pensions Fund and

5 proceeds of bonds sold in fiscal year 2010 pursuant to Section

6 7.2 of the General Obligation Bond Act, less (i) the pro rata

7 share of bond sale expenses determined by the System's share of

8 total bond proceeds, (ii) any amounts received from the General

9 Revenue Fund in fiscal year 2010, (iii) any reduction in bond

10 proceeds due to the issuance of discounted bonds, if

11 applicable.

12 Notwithstanding any other provision of this Article, the

13 total required State contribution for State fiscal year 2011 is

14 the amount recertified by the System on or before April 1, 2011

15 pursuant to Section 15-165 and shall be made from the State

16 Pensions Fund and proceeds of bonds sold in fiscal year 2011

17 pursuant to Section 7.2 of the General Obligation Bond Act,

18 less (i) the pro rata share of bond sale expenses determined by

19 the System's share of total bond proceeds, (ii) any amounts

20 received from the General Revenue Fund in fiscal year 2011, and

21 (iii) any reduction in bond proceeds due to the issuance of

22 discounted bonds, if applicable.

23 Beginning in State fiscal year 2046, the minimum State

24 contribution for each fiscal year shall be the amount needed to

25 maintain the total assets of the System at 90% of the total

26 actuarial liabilities of the System.

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1 Amounts received by the System pursuant to Section 25 of

2 the Budget Stabilization Act or Section 8.12 of the State

3 Finance Act in any fiscal year do not reduce and do not

4 constitute payment of any portion of the minimum State

5 contribution required under this Article in that fiscal year.

6 Such amounts shall not reduce, and shall not be included in the

7 calculation of, the required State contributions under this

8 Article in any future year until the System has reached a

9 funding ratio of at least 90%. A reference in this Article to

10 the "required State contribution" or any substantially similar

11 term does not include or apply to any amounts payable to the

12 System under Section 25 of the Budget Stabilization Act.

13 Notwithstanding any other provision of this Section, the

14 required State contribution for State fiscal year 2005 and for

15 fiscal year 2008 and each fiscal year thereafter, as calculated

16 under this Section and certified under Section 15-165, shall

17 not exceed an amount equal to (i) the amount of the required

18 State contribution that would have been calculated under this

19 Section for that fiscal year if the System had not received any

20 payments under subsection (d) of Section 7.2 of the General

21 Obligation Bond Act, minus (ii) the portion of the State's

22 total debt service payments for that fiscal year on the bonds

23 issued in fiscal year 2003 for the purposes of that Section

24 7.2, as determined and certified by the Comptroller, that is

25 the same as the System's portion of the total moneys

26 distributed under subsection (d) of Section 7.2 of the General

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1 Obligation Bond Act. In determining this maximum for State

2 fiscal years 2008 through 2010, however, the amount referred to

3 in item (i) shall be increased, as a percentage of the

4 applicable employee payroll, in equal increments calculated

5 from the sum of the required State contribution for State

6 fiscal year 2007 plus the applicable portion of the State's

7 total debt service payments for fiscal year 2007 on the bonds

8 issued in fiscal year 2003 for the purposes of Section 7.2 of

9 the General Obligation Bond Act, so that, by State fiscal year

10 2011, the State is contributing at the rate otherwise required

11 under this Section.

12 (a-2) For employees first hired on or after 6 months after

13 the effective date of this amendatory Act of the 100th General

14 Assembly who have elected the benefits under Section 1-161 of

15 this Code, the employer shall annually contribute an amount,

16 expressed as a percentage of payroll, equal to the defined

17 benefit normal cost of the defined benefit plan, less the

18 employee contribution, plus 2%. On an annual basis, the System

19 shall certify to each employer the amount of unfunded liability

20 accrued in the employer's account to be paid by the employer so

21 that the System is 90% funded by the end of State fiscal year

22 2045. The contributions shall be divided equally over a

23 12-month period and made monthly. The employer shall also

24 contribute an amount equal to the employer defined

25 contribution, as set on an individual employee basis, under

26 paragraph (2) of subsection (k) of Section 1-161 during each

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1 pay period. The System shall have the authority to adopt rules

2 regarding implementation of employer contributions.

3 (b) If an employee is paid from trust or federal funds, the

4 employer shall pay to the Board contributions from those funds

5 which are sufficient to cover the accruing normal costs on

6 behalf of the employee. However, universities having employees

7 who are compensated out of local auxiliary funds, income funds,

8 or service enterprise funds are not required to pay such

9 contributions on behalf of those employees. The local auxiliary

10 funds, income funds, and service enterprise funds of

11 universities shall not be considered trust funds for the

12 purpose of this Article, but funds of alumni associations,

13 foundations, and athletic associations which are affiliated

14 with the universities included as employers under this Article

15 and other employers which do not receive State appropriations

16 are considered to be trust funds for the purpose of this

17 Article.

18 (b-1) The City of Urbana and the City of Champaign shall

19 each make employer contributions to this System for their

20 respective firefighter employees who participate in this

21 System pursuant to subsection (h) of Section 15-107. The rate

22 of contributions to be made by those municipalities shall be

23 determined annually by the Board on the basis of the actuarial

24 assumptions adopted by the Board and the recommendations of the

25 actuary, and shall be expressed as a percentage of salary for

26 each such employee. The Board shall certify the rate to the

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1 affected municipalities as soon as may be practical. The

2 employer contributions required under this subsection shall be

3 remitted by the municipality to the System at the same time and

4 in the same manner as employee contributions.

5 (c) Through State fiscal year 1995: The total employer

6 contribution shall be apportioned among the various funds of

7 the State and other employers, whether trust, federal, or other

8 funds, in accordance with actuarial procedures approved by the

9 Board. State of Illinois contributions for employers receiving

10 State appropriations for personal services shall be payable

11 from appropriations made to the employers or to the System. The

12 contributions for Class I community colleges covering earnings

13 other than those paid from trust and federal funds, shall be

14 payable solely from appropriations to the Illinois Community

15 College Board or the System for employer contributions.

16 (d) Beginning in State fiscal year 1996, the required State

17 contributions to the System shall be appropriated directly to

18 the System and shall be payable through vouchers issued in

19 accordance with subsection (c) of Section 15-165, except as

20 provided in subsection (g).

21 (e) The State Comptroller shall draw warrants payable to

22 the System upon proper certification by the System or by the

23 employer in accordance with the appropriation laws and this

24 Code.

25 (f) Normal costs under this Section means liability for

26 pensions and other benefits which accrues to the System because

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1 of the credits earned for service rendered by the participants

2 during the fiscal year and expenses of administering the

3 System, but shall not include the principal of or any

4 redemption premium or interest on any bonds issued by the Board

5 or any expenses incurred or deposits required in connection

6 therewith.

7 (g) For academic years beginning on or after June 1, 2005

8 and before July 1, 2018, if ~~If~~ the amount of a participant's

9 earnings for any academic year used to determine the final rate

10 of earnings, determined on a full-time equivalent basis,

11 exceeds the amount of his or her earnings with the same

12 employer for the previous academic year, determined on a

13 full-time equivalent basis, by more than 6%, the participant's

14 employer shall pay to the System, in addition to all other

15 payments required under this Section and in accordance with

16 guidelines established by the System, the present value of the

17 increase in benefits resulting from the portion of the increase

18 in earnings that is in excess of 6%. This present value shall

19 be computed by the System on the basis of the actuarial

20 assumptions and tables used in the most recent actuarial

21 valuation of the System that is available at the time of the

22 computation. The System may require the employer to provide any

23 pertinent information or documentation.

24 Whenever it determines that a payment is or may be required

25 under this subsection (g), the System shall calculate the

26 amount of the payment and bill the employer for that amount.

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1 The bill shall specify the calculations used to determine the

2 amount due. If the employer disputes the amount of the bill, it

3 may, within 30 days after receipt of the bill, apply to the

4 System in writing for a recalculation. The application must

5 specify in detail the grounds of the dispute and, if the

6 employer asserts that the calculation is subject to subsection

7 (h) or (i) of this Section, must include an affidavit setting

8 forth and attesting to all facts within the employer's

9 knowledge that are pertinent to the applicability of subsection

10 (h) or (i). Upon receiving a timely application for

11 recalculation, the System shall review the application and, if

12 appropriate, recalculate the amount due.

13 The employer contributions required under this subsection

14 (g) may be paid in the form of a lump sum within 90 days after

15 receipt of the bill. If the employer contributions are not paid

16 within 90 days after receipt of the bill, then interest will be

17 charged at a rate equal to the System's annual actuarially

18 assumed rate of return on investment compounded annually from

19 the 91st day after receipt of the bill. Payments must be

20 concluded within 3 years after the employer's receipt of the

21 bill.

22 When assessing payment for any amount due under this

23 subsection (g), the System shall include earnings, to the

24 extent not established by a participant under Section 15-113.11

25 or 15-113.12, that would have been paid to the participant had

26 the participant not taken (i) periods of voluntary or

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1 involuntary furlough occurring on or after July 1, 2015 and on

2 or before June 30, 2017 or (ii) periods of voluntary pay

3 reduction in lieu of furlough occurring on or after July 1,

4 2015 and on or before June 30, 2017. Determining earnings that

5 would have been paid to a participant had the participant not

6 taken periods of voluntary or involuntary furlough or periods

7 of voluntary pay reduction shall be the responsibility of the

8 employer, and shall be reported in a manner prescribed by the

9 System.

10 (g-1) For academic years beginning on or after July 1,

11 2018, if the amount of a participant's earnings for any

12 academic year used to determine the final rate of earnings,

13 determined on a full-time equivalent basis, exceeds the amount

14 of his or her earnings with the same employer for the previous

15 academic year, determined on a full-time equivalent basis, by

16 more than the unadjusted percentage increase in the consumer

17 price index-u for the calendar year immediately preceding the

18 beginning of the academic year, published by the Public Pension

19 Division of the Department of Insurance by November 1 of each

20 year, then the participant's employer shall pay to the System,

21 in addition to all other payments required under this Section

22 and in accordance with guidelines established by the System,

23 the present value of the increase in benefits resulting from

24 the portion of the increase in earnings that is in excess of

25 the unadjusted percentage increase in the consumer price

26 index-u for the applicable calendar year. This present value

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1 shall be computed by the System on the basis of the actuarial

2 assumptions and tables used in the most recent actuarial

3 valuation of the System that is available at the time of the

4 computation. The System may require the employer to provide any

5 pertinent information or documentation.

6 Whenever it determines that a payment is or may be required

7 under this subsection (g-1), the System shall calculate the

8 amount of the payment and bill the employer for that amount.

9 The bill shall specify the calculations used to determine the

10 amount due. If the employer disputes the amount of the bill, it

11 may, within 30 days after receipt of the bill, apply to the

12 System in writing for a recalculation. The application must

13 specify in detail the grounds of the dispute and, if the

14 employer asserts that the calculation is subject to subsection

15 (i-1) of this Section, must include an affidavit setting forth

16 and attesting to all facts within the employer's knowledge that

17 are pertinent to the applicability of subsection (i-1). Upon

18 receiving a timely application for recalculation, the System

19 shall review the application and, if appropriate, recalculate

20 the amount due.

21 The employer contributions required under this subsection

22 (g-1) may be paid in the form of a lump sum within 90 days after

23 receipt of the bill. If the employer contributions are not paid

24 within 90 days after receipt of the bill, then interest shall

25 be charged at a rate equal to the System's annual actuarially

26 assumed rate of return on investment compounded annually from

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1 the 91st day after receipt of the bill. Payments must be

2 concluded within 3 years after the employer's receipt of the

3 bill.