Bill Text: IL SB3022 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Downstate Police and Chicago Police Articles of the Illinois Pension Code. Allows police officers to establish creditable service for up to 2 years of military service before employment. Requires payment of employee and employer contributions, plus interest at the actuarially assumed rate. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2010-07-23 - Public Act . . . . . . . . . 96-1260 [SB3022 Detail]

Download: Illinois-2009-SB3022-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 SB3022 Introduced 2/4/2010, by Sen. Mike Jacobs SYNOPSIS AS INTRODUCED:
40 ILCS 5/3-110 from Ch. 108 1/2, par. 3-110
40 ILCS 5/5-212 from Ch. 108 1/2, par. 5-212
40 ILCS 5/5-214.3 new
30 ILCS 805/8.34 new
Amends the Downstate Police and Chicago Police Articles of the Illinois Pension Code. Allows police officers to establish creditable service for up to 2 years of military service before employment. Requires payment of employee and employer contributions, plus interest at the actuarially assumed rate. 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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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 3-110 and 5-212 and by adding Section 5-214.3 as
follows:
(40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
Sec. 3-110. Creditable service.
(a) "Creditable service" is the time served by a police
officer as a member of a regularly constituted police force of
a municipality. In computing creditable service furloughs
without pay exceeding 30 days shall not be counted, but all
leaves of absence for illness or accident, regardless of
length, and all periods of disability retirement for which a
police officer has received no disability pension payments
under this Article shall be counted.
(a-5) Up to 3 years of time during which the police officer
receives a disability pension under Section 3-114.1, 3-114.2,
3-114.3, or 3-114.6 shall be counted as creditable service,
provided that (i) the police officer returns to active service
after the disability for a period at least equal to the period
for which credit is to be established and (ii) the police
officer makes contributions to the fund based on the rates

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specified in Section 3-125.1 and the salary upon which the
disability pension is based. These contributions may be paid at
any time prior to the commencement of a retirement pension. The
police officer may, but need not, elect to have the
contributions deducted from the disability pension or to pay
them in installments on a schedule approved by the board. If
not deducted from the disability pension, the contributions
shall include interest at the rate of 6% per year, compounded
annually, from the date for which service credit is being
established to the date of payment. If contributions are paid
under this subsection (a-5) in excess of those needed to
establish the credit, the excess shall be refunded. This
subsection (a-5) applies to persons receiving a disability
pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
the effective date of this amendatory Act of the 91st General
Assembly, as well as persons who begin to receive such a
disability pension after that date.
(b) Creditable service includes all periods of service in
the military, naval or air forces of the United States entered
upon while an active police officer of a municipality, provided
that upon applying for a permanent pension, and in accordance
with the rules of the board, the police officer pays into the
fund the amount the officer would have contributed if he or she
had been a regular contributor during such period, to the
extent that the municipality which the police officer served
has not made such contributions in the officer's behalf. The

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total amount of such creditable service shall not exceed 5
years, except that any police officer who on July 1, 1973 had
more than 5 years of such creditable service shall receive the
total amount thereof.
(b-5) Creditable service includes all periods of service in
the military, naval, or air forces of the United States entered
upon before beginning service as an active police officer of a
municipality, provided that, in accordance with the rules of
the board, the police officer pays into the fund the amount the
police officer would have contributed if he or she had been a
regular contributor during such period, plus an amount
determined by the Board to be equal to the municipality's
normal cost of the benefit, plus interest at the actuarially
assumed rate calculated from the date the employee last became
a police officer under this Article. The total amount of such
creditable service shall not exceed 2 years.
(c) Creditable service also includes service rendered by a
police officer while on leave of absence from a police
department to serve as an executive of an organization whose
membership consists of members of a police department, subject
to the following conditions: (i) the police officer is a
participant of a fund established under this Article with at
least 10 years of service as a police officer; (ii) the police
officer received no credit for such service under any other
retirement system, pension fund, or annuity and benefit fund
included in this Code; (iii) pursuant to the rules of the board

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the police officer pays to the fund the amount he or she would
have contributed had the officer been an active member of the
police department; and (iv) the organization pays a
contribution equal to the municipality's normal cost for that
period of service.
(d)(1) Creditable service also includes periods of
service originally established in another police pension
fund under this Article or in the Fund established under
Article 7 of this Code for which (i) the contributions have
been transferred under Section 3-110.7 or Section 7-139.9
and (ii) any additional contribution required under
paragraph (2) of this subsection has been paid in full in
accordance with the requirements of this subsection (d).
(2) If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 7-139.9 determines that the
amount transferred is less than the true cost to the
pension fund of allowing that creditable service to be
established, then in order to establish that creditable
service the police officer must pay to the pension fund,
within the payment period specified in paragraph (3) of
this subsection, an additional contribution equal to the
difference, as determined by the board in accordance with
the rules and procedures adopted under paragraph (6) of
this subsection. If the board of the pension fund to which
creditable service and related contributions are

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transferred under Section 3-110.7 determines that the
amount transferred is less than the true cost to the
pension fund of allowing that creditable service to be
established, then the police officer may elect (A) to
establish that creditable service by paying to the pension
fund, within the payment period specified in paragraph (3)
of this subsection (d), an additional contribution equal to
the difference, as determined by the board in accordance
with the rules and procedures adopted under paragraph (6)
of this subsection (d) or (B) to have his or her creditable
service reduced by an amount equal to the difference
between the amount transferred under Section 3-110.7 and
the true cost to the pension fund of allowing that
creditable service to be established, as determined by the
board in accordance with the rules and procedures adopted
under paragraph (6) of this subsection (d).
(3) Except as provided in paragraph (4), the additional
contribution that is required or elected under paragraph
(2) of this subsection (d) must be paid to the board (i)
within 5 years from the date of the transfer of
contributions under Section 3-110.7 or 7-139.9 and (ii)
before the police officer terminates service with the fund.
The additional contribution may be paid in a lump sum or in
accordance with a schedule of installment payments
authorized by the board.
(4) If the police officer dies in service before

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payment in full has been made and before the expiration of
the 5-year payment period, the surviving spouse of the
officer may elect to pay the unpaid amount on the officer's
behalf within 6 months after the date of death, in which
case the creditable service shall be granted as though the
deceased police officer had paid the remaining balance on
the day before the date of death.
(5) If the additional contribution that is required or
elected under paragraph (2) of this subsection (d) is not
paid in full within the required time, the creditable
service shall not be granted and the police officer (or the
officer's surviving spouse or estate) shall be entitled to
receive a refund of (i) any partial payment of the
additional contribution that has been made by the police
officer and (ii) those portions of the amounts transferred
under subdivision (a)(1) of Section 3-110.7 or
subdivisions (a)(1) and (a)(3) of Section 7-139.9 that
represent employee contributions paid by the police
officer (but not the accumulated interest on those
contributions) and interest paid by the police officer to
the prior pension fund in order to reinstate service
terminated by acceptance of a refund.
At the time of paying a refund under this item (5), the
pension fund shall also repay to the pension fund from
which the contributions were transferred under Section
3-110.7 or 7-139.9 the amount originally transferred under

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subdivision (a)(2) of that Section, plus interest at the
rate of 6% per year, compounded annually, from the date of
the original transfer to the date of repayment. Amounts
repaid to the Article 7 fund under this provision shall be
credited to the appropriate municipality.
Transferred credit that is not granted due to failure
to pay the additional contribution within the required time
is lost; it may not be transferred to another pension fund
and may not be reinstated in the pension fund from which it
was transferred.
(6) The Public Employee Pension Fund Division of the
Department of Insurance shall establish by rule the manner
of making the calculation required under paragraph (2) of
this subsection, taking into account the appropriate
actuarial assumptions; the police officer's service, age,
and salary history; the level of funding of the pension
fund to which the credits are being transferred; and any
other factors that the Division determines to be relevant.
The rules may require that all calculations made under
paragraph (2) be reported to the Division by the board
performing the calculation, together with documentation of
the creditable service to be transferred, the amounts of
contributions and interest to be transferred, the manner in
which the calculation was performed, the numbers relied
upon in making the calculation, the results of the
calculation, and any other information the Division may

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deem useful.
(e)(1) Creditable service also includes periods of
service originally established in the Fund established
under Article 7 of this Code for which the contributions
have been transferred under Section 7-139.11.
(2) If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 7-139.11 determines that the
amount transferred is less than the true cost to the
pension fund of allowing that creditable service to be
established, then the amount of creditable service the
police officer may establish under this subsection (e)
shall be reduced by an amount equal to the difference, as
determined by the board in accordance with the rules and
procedures adopted under paragraph (3) of this subsection.
(3) The Public Pension Division of the Department of
Financial and Professional Regulation shall establish by
rule the manner of making the calculation required under
paragraph (2) of this subsection, taking into account the
appropriate actuarial assumptions; the police officer's
service, age, and salary history; the level of funding of
the pension fund to which the credits are being
transferred; and any other factors that the Division
determines to be relevant. The rules may require that all
calculations made under paragraph (2) be reported to the
Division by the board performing the calculation, together

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with documentation of the creditable service to be
transferred, the amounts of contributions and interest to
be transferred, the manner in which the calculation was
performed, the numbers relied upon in making the
calculation, the results of the calculation, and any other
information the Division may deem useful.
(4) Until January 1, 2010, a police officer who
transferred service from the Fund established under
Article 7 of this Code under the provisions of Public Act
94-356 may establish additional credit, but only for the
amount of the service credit reduction in that transfer, as
calculated under paragraph (3) of this subsection (e). This
credit may be established upon payment by the police
officer of an amount to be determined by the board, equal
to (1) the amount that would have been contributed as
employee and employer contributions had all of the service
been as an employee under this Article, plus interest
thereon at the rate of 6% per year, compounded annually
from the date of service to the date of transfer, less (2)
the total amount transferred from the Article 7 Fund, plus
(3) interest on the difference at the rate of 6% per year,
compounded annually, from the date of the transfer to the
date of payment. The additional service credit is allowed
under this amendatory Act of the 95th General Assembly
notwithstanding the provisions of Article 7 terminating
all transferred credits on the date of transfer.

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(Source: P.A. 95-812, eff. 8-13-08; 96-297, eff. 8-11-09.)
(40 ILCS 5/5-212) (from Ch. 108 1/2, par. 5-212)
Sec. 5-212. Computation of service. In computing the
service rendered by a policeman prior to the effective date,
the following periods shall be counted, in addition to all
periods during where he performed the duties of his position,
as periods of service for annuity purposes only: all periods of
(a) vacation; (b) leave of absence with whole or part pay; (c)
leave of absence without pay on account of disability; and (d)
leave of absence during which the policeman was engaged in the
military or naval service of the United States of America.
Service credit shall not be allowed for a policeman in receipt
of a pension on account of disability from any pension fund
superseded by this fund.
In computing the service rendered by a policeman on or
after the effective date, the following periods shall be
counted, in addition to all periods during which he performed
the duties of his position, as periods of service for annuity
purposes only: all periods of (a) vacation; (b) leave of
absence with whole or part pay; (c) leave of absence during
which the policeman was engaged in the military or naval
service of the United States of America; (d) time that the
policeman was engaged in the military or naval service of the
United States of America, during which he was passed over on
any eligible list posted from an entrance examination, due to

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the fact that he was in such military or naval service at the
time he was called for appointment to the Police Department, to
be computed from the date he was passed over on any eligible
list and would have been first sworn in as a policeman had he
not been engaged in the military or naval service of the United
States of America, until the date of his discharge from such
military or naval service; provided that such policeman shall
pay into this Fund the same amount that would have been
deducted from his salary had he been a policeman during the
aforementioned portion of such military or naval service; (e)
disability for which the policeman receives any disability
benefit; (f) disability for which the policeman receives whole
or part pay; and (g) service for which credits and creditable
service have been transferred to this Fund under Section
9-121.1, 14-105.1 or 15-134.3 of this Code; and (h) periods of
service in the military, naval, or air forces of the United
States entered upon before beginning service as an active
policeman of a municipality as provided in Section 5-214.3.
In computing service on or after the effective date for
ordinary disability benefit, all periods described in the
preceding paragraph, except any such period for which a
policeman receives ordinary disability benefit, shall be
counted as periods of service.
In computing service for any of the purposes of this
Article, no credit shall be given for any period during which a
policeman was not rendering active service because of his

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discharge from the service, unless proceedings to test the
legality of the discharge are filed in a court of competent
jurisdiction within one year from the date of discharge and a
final judgment is entered therein declaring the discharge
illegal.
No overtime or extra service shall be included in computing
service of a policeman and not more than one year or a
fractional part thereof of service shall be allowed for service
rendered during any calendar year.
In computing service for any of the purposes of this
Article, credit shall be given for any periods during which a
policeman who is a member of the General Assembly is on leave
of absence or is otherwise authorized to be absent from duty to
enable him or her to perform legislative duties,
notwithstanding any reduction in salary for such periods and
notwithstanding that the contributions paid by the policeman
were based on a reduced salary rather than the full amount of
salary attached to his or her career service rank.
(Source: P.A. 92-52, eff. 7-12-01.)
(40 ILCS 5/5-214.3 new)
Sec. 5-214.3. Credit for military service. A policeman may
establish creditable service under this Article for all periods
of service in the military, naval, or air forces of the United
States entered upon before beginning service as an active
policeman of a municipality, provided that the policeman pays

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into the fund the amount the policeman would have contributed
if he or she had been a regular contributor during such period,
plus an amount determined by the Board to be equal to the
municipality's normal cost of the benefit, plus interest at the
actuarially assumed rate calculated from the date the employee
last became a policeman under this Article. The total amount of
such creditable service shall not exceed 2 years.
Section 90. The State Mandates Act is amended by adding
Section 8.34 as follows:
(30 ILCS 805/8.34 new)
Sec. 8.34. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 96th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.