Bill Text: IL SB3538 | 2009-2010 | 96th General Assembly | Enrolled

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Bill Title: Amends the Chicago Firefighter Article of the Illinois Pension Code. Allows a fireman, prior to retirement on annuity, to elect to take a lesser amount of annuity and provide, with the actuarial value of the amount by which his or her annuity is reduced, a reversionary annuity for a spouse. Provides that a fireman exercising the option to provide a reversionary annuity may not reduce his or her annuity by more than $400 per month or elect to provide a reversionary annuity of less than $100 per month. Provides that a reversionary annuity shall begin on the day following the death of the annuitant and shall continue monthly thereafter until the death of the reversionary annuitant. Provides a method for calculating the amount of the reversionary annuity. Amends the State Mandates Act to require implementation without reimbursement.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Enrolled - Dead) 2010-12-17 - Sent to the Governor [SB3538 Detail]

Download: Illinois-2009-SB3538-Enrolled.html

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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 1-113.2, 3-111, 3-111.1, 3-112, 3-125, 4-109,
4-109.1, 4-114, 4-118, 5-167.1, 5-168, 6-164, 6-165, and
7-142.1 and by adding Sections 1-113.4a, 1-165, 5-238, and
6-229 as follows:
(40 ILCS 5/1-113.2)
Sec. 1-113.2. List of permitted investments for all Article
3 or 4 pension funds. Any pension fund established under
Article 3 or 4 may invest in the following items:
(1) Interest bearing direct obligations of the United
States of America.
(2) Interest bearing obligations to the extent that they
are fully guaranteed or insured as to payment of principal and
interest by the United States of America.
(3) Interest bearing bonds, notes, debentures, or other
similar obligations of agencies of the United States of
America. For the purposes of this Section, "agencies of the
United States of America" includes: (i) the Federal National
Mortgage Association and the Student Loan Marketing
Association; (ii) federal land banks, federal intermediate

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credit banks, federal farm credit banks, and any other entity
authorized to issue direct debt obligations of the United
States of America under the Farm Credit Act of 1971 or
amendments to that Act; (iii) federal home loan banks and the
Federal Home Loan Mortgage Corporation; and (iv) any agency
created by Act of Congress that is authorized to issue direct
debt obligations of the United States of America.
(4) Interest bearing savings accounts or certificates of
deposit, issued by federally chartered banks or savings and
loan associations, to the extent that the deposits are insured
by agencies or instrumentalities of the federal government.
(5) Interest bearing savings accounts or certificates of
deposit, issued by State of Illinois chartered banks or savings
and loan associations, to the extent that the deposits are
insured by agencies or instrumentalities of the federal
government.
(6) Investments in credit unions, to the extent that the
investments are insured by agencies or instrumentalities of the
federal government.
(7) Interest bearing bonds of the State of Illinois.
(8) Pooled interest bearing accounts managed by the
Illinois Public Treasurer's Investment Pool in accordance with
the Deposit of State Moneys Act, and interest bearing funds or
pooled accounts of the Illinois Metropolitan Investment Funds,
and interest bearing funds or pooled accounts managed,
operated, and administered by banks, subsidiaries of banks, or

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subsidiaries of bank holding companies in accordance with the
laws of the State of Illinois.
(9) Interest bearing bonds or tax anticipation warrants of
any county, township, or municipal corporation of the State of
Illinois.
(10) Direct obligations of the State of Israel, subject to
the conditions and limitations of item (5.1) of Section 1-113.
(11) Money market mutual funds managed by investment
companies that are registered under the federal Investment
Company Act of 1940 and the Illinois Securities Law of 1953 and
are diversified, open-ended management investment companies;
provided that the portfolio of the money market mutual fund is
limited to the following:
(i) bonds, notes, certificates of indebtedness,
treasury bills, or other securities that are guaranteed by
the full faith and credit of the United States of America
as to principal and interest;
(ii) bonds, notes, debentures, or other similar
obligations of the United States of America or its
agencies; and
(iii) short term obligations of corporations organized
in the United States with assets exceeding $400,000,000,
provided that (A) the obligations mature no later than 180
days from the date of purchase, (B) at the time of
purchase, the obligations are rated by at least 2 standard
national rating services at one of their 3 highest

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classifications, and (C) the obligations held by the mutual
fund do not exceed 10% of the corporation's outstanding
obligations.
(12) General accounts of life insurance companies
authorized to transact business in Illinois.
(13) Any combination of the following, not to exceed 10% of
the pension fund's net assets:
(i) separate accounts that are managed by life
insurance companies authorized to transact business in
Illinois and are comprised of diversified portfolios
consisting of common or preferred stocks, bonds, or money
market instruments;
(ii) separate accounts that are managed by insurance
companies authorized to transact business in Illinois, and
are comprised of real estate or loans upon real estate
secured by first or second mortgages; and
(iii) mutual funds that meet the following
requirements:
(A) the mutual fund is managed by an investment
company as defined and registered under the federal
Investment Company Act of 1940 and registered under the
Illinois Securities Law of 1953;
(B) the mutual fund has been in operation for at
least 5 years;
(C) the mutual fund has total net assets of $250
million or more; and

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(D) the mutual fund is comprised of diversified
portfolios of common or preferred stocks, bonds, or
money market instruments.
(14) Corporate bonds managed through an investment advisor
must meet all of the following requirements:
(1) The bonds must be rated as investment grade by one
of the 2 largest rating services at the time of purchase.
(2) If subsequently downgraded below investment grade,
the bonds must be liquidated from the portfolio within 90
days after being downgraded by the manager.
(Source: P.A. 90-507, eff. 8-22-97; 91-887, eff. 7-6-00.)
(40 ILCS 5/1-113.4a new)
Sec. 1-113.4a. List of additional permitted investments
for Article 3 and 4 pension funds with net assets of
$10,000,000 or more.
(a) In addition to the items in Sections 1-113.2 and
1-113.3, a pension fund established under Article 3 or 4 that
has net assets of at least $10,000,000 and has appointed an
investment adviser, as defined under Sections 1-101.4 and
1-113.5, may, through that investment adviser, invest an
additional portion of its assets in common and preferred stocks
and mutual funds.
(b) The stocks must meet all of the following requirements:
(1) The common stocks must be listed on a national
securities exchange or board of trade (as defined in the

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Federal Securities Exchange Act of 1934 and set forth in
paragraph G of Section 3 of the Illinois Securities Law of
1953) or quoted in the National Association of Securities
Dealers Automated Quotation System National Market System.
(2) The securities must be of a corporation in
existence for at least 5 years.
(3) The market value of stock in any one corporation
may not exceed 5% of the cash and invested assets of the
pension fund, and the investments in the stock of any one
corporation may not exceed 5% of the total outstanding
stock of that corporation.
(4) The straight preferred stocks or convertible
preferred stocks must be issued or guaranteed by a
corporation whose common stock qualifies for investment by
the board.
(c) The mutual funds must meet the following requirements:
(1) The mutual fund must be managed by an investment
company registered under the Federal Investment Company
Act of 1940 and registered under the Illinois Securities
Law of 1953.
(2) The mutual fund must have been in operation for at
least 5 years.
(3) The mutual fund must have total net assets of
$250,000,000 or more.
(4) The mutual fund must be comprised of a diversified
portfolio of common or preferred stocks, bonds, or money

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market instruments.
(d) A pension fund's total investment in the items
authorized under this Section and Section 1-113.3 shall not
exceed 50% effective July 1, 2011 and 55% effective July 1,
2012 of the market value of the pension fund's net present
assets stated in its most recent annual report on file with the
Department of Insurance.
(e) A pension fund that invests funds under this Section
shall electronically file with the Division any reports of its
investment activities that the Division may require, at the
time and in the format required by the Division.
(40 ILCS 5/1-165 new)
Sec. 1-165. Commission on Government Forecasting and
Accountability study. The Commission on Government Forecasting
and Accountability shall conduct a study on the feasibility of:
(1) the creation of an investment pool to supplement
and enhance the investment opportunities available to
boards of trustees of the pension funds organized under
Articles 3 and 4 of this Code; the study shall include an
analysis on any cost or cost savings associated with
establishing the system and transferring assets for
management under the investment pool; and
(2) enacting a contribution cost-share component
wherein employing municipalities and members of funds
established under Articles 3 and 4 of this Code each

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contribute 50% of the normal cost of the defined-benefit
plan.
The Commission shall issue a report on its findings on or
before December 31, 2011.
(40 ILCS 5/3-111) (from Ch. 108 1/2, par. 3-111)
Sec. 3-111. Pension.
(a) A police officer age 50 or more with 20 or more years
of creditable service, who is not a participant in the
self-managed plan under Section 3-109.3 and who is no longer in
service as a police officer, shall receive a pension of 1/2 of
the salary attached to the rank held by the officer on the
police force for one year immediately prior to retirement or,
beginning July 1, 1987 for persons terminating service on or
after that date, the salary attached to the rank held on the
last day of service or for one year prior to the last day,
whichever is greater. The pension shall be increased by 2.5% of
such salary for each additional year of service over 20 years
of service through 30 years of service, to a maximum of 75% of
such salary.
The changes made to this subsection (a) by this amendatory
Act of the 91st General Assembly apply to all pensions that
become payable under this subsection on or after January 1,
1999. All pensions payable under this subsection that began on
or after January 1, 1999 and before the effective date of this
amendatory Act shall be recalculated, and the amount of the

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increase accruing for that period shall be payable to the
pensioner in a lump sum.
(a-5) No pension in effect on or granted after June 30,
l973 shall be less than $200 per month. Beginning July 1, 1987,
the minimum retirement pension for a police officer having at
least 20 years of creditable service shall be $400 per month,
without regard to whether or not retirement occurred prior to
that date. If the minimum pension established in Section
3-113.1 is greater than the minimum provided in this
subsection, the Section 3-113.1 minimum controls.
(b) A police officer mandatorily retired from service due
to age by operation of law, having at least 8 but less than 20
years of creditable service, shall receive a pension equal to 2
1/2% of the salary attached to the rank he or she held on the
police force for one year immediately prior to retirement or,
beginning July 1, 1987 for persons terminating service on or
after that date, the salary attached to the rank held on the
last day of service or for one year prior to the last day,
whichever is greater, for each year of creditable service.
A police officer who retires or is separated from service
having at least 8 years but less than 20 years of creditable
service, who is not mandatorily retired due to age by operation
of law, and who does not apply for a refund of contributions at
his or her last separation from police service, shall receive a
pension upon attaining age 60 equal to 2.5% of the salary
attached to the rank held by the police officer on the police

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force for one year immediately prior to retirement or,
beginning July 1, 1987 for persons terminating service on or
after that date, the salary attached to the rank held on the
last day of service or for one year prior to the last day,
whichever is greater, for each year of creditable service.
(c) A police officer no longer in service who has at least
one but less than 8 years of creditable service in a police
pension fund but meets the requirements of this subsection (c)
shall be eligible to receive a pension from that fund equal to
2.5% of the salary attached to the rank held on the last day of
service under that fund or for one year prior to that last day,
whichever is greater, for each year of creditable service in
that fund. The pension shall begin no earlier than upon
attainment of age 60 (or upon mandatory retirement from the
fund by operation of law due to age, if that occurs before age
60) and in no event before the effective date of this
amendatory Act of 1997.
In order to be eligible for a pension under this subsection
(c), the police officer must have at least 8 years of
creditable service in a second police pension fund under this
Article and be receiving a pension under subsection (a) or (b)
of this Section from that second fund. The police officer need
not be in service on or after the effective date of this
amendatory Act of 1997.
(d) Notwithstanding any other provision of this Article,
the provisions of this subsection (d) apply to a person who is

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not a participant in the self-managed plan under Section
3-109.3 and who first becomes a police officer under this
Article on or after January 1, 2011.
A police officer age 55 or more who has 10 or more years of
service in that capacity shall be entitled at his option to
receive a monthly pension for his service as a police officer
computed by multiplying 2.5% for each year of such service by
his or her final average salary.
The pension of a police officer who is retiring after
attaining age 50 with 10 or more years of creditable service
shall be reduced by one-half of 1% for each month that the
police officer's age is under age 55.
The maximum pension under this subsection (d) shall be 75%
of final average salary.
For the purposes of this subsection (d), "final average
salary" means the average monthly salary obtained by dividing
the total salary of the police officer during the 96
consecutive months of service within the last 120 months of
service in which the total salary was the highest by the number
of months of service in that period.
Beginning on January 1, 2011, for all purposes under this
Code (including without limitation the calculation of benefits
and employee contributions), the annual salary based on the
plan year of a member or participant to whom this Section
applies shall not exceed $106,800; however, that amount shall
annually thereafter be increased by the lesser of (i) 3% of

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that amount, including all previous adjustments, or (ii)
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, including
all previous adjustments.
(Source: P.A. 90-460, eff. 8-17-97; 91-939, eff. 2-1-01.)
(40 ILCS 5/3-111.1) (from Ch. 108 1/2, par. 3-111.1)
Sec. 3-111.1. Increase in pension.
(a) Except as provided in subsection (e), the monthly
pension of a police officer who retires after July 1, 1971, and
prior to January 1, 1986, shall be increased, upon either the
first of the month following the first anniversary of the date
of retirement if the officer is 60 years of age or over at
retirement date, or upon the first day of the month following
attainment of age 60 if it occurs after the first anniversary
of retirement, by 3% of the originally granted pension and by
an additional 3% of the originally granted pension in January
of each year thereafter.
(b) The monthly pension of a police officer who retired
from service with 20 or more years of service, on or before
July 1, 1971, shall be increased in January of the year
following the year of attaining age 65 or in January of 1972,
if then over age 65, by 3% of the originally granted pension
for each year the police officer received pension payments. In
each January thereafter, he or she shall receive an additional

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increase of 3% of the original pension.
(c) The monthly pension of a police officer who retires on
disability or is retired for disability shall be increased in
January of the year following the year of attaining age 60, by
3% of the original grant of pension for each year he or she
received pension payments. In each January thereafter, the
police officer shall receive an additional increase of 3% of
the original pension.
(d) The monthly pension of a police officer who retires
after January 1, 1986, shall be increased, upon either the
first of the month following the first anniversary of the date
of retirement if the officer is 55 years of age or over, or
upon the first day of the month following attainment of age 55
if it occurs after the first anniversary of retirement, by 1/12
of 3% of the originally granted pension for each full month
that has elapsed since the pension began, and by an additional
3% of the originally granted pension in January of each year
thereafter.
The changes made to this subsection (d) by this amendatory
Act of the 91st General Assembly apply to all initial increases
that become payable under this subsection on or after January
1, 1999. All initial increases that became payable under this
subsection on or after January 1, 1999 and before the effective
date of this amendatory Act shall be recalculated and the
additional amount accruing for that period, if any, shall be
payable to the pensioner in a lump sum.

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(e) Notwithstanding the provisions of subsection (a), upon
the first day of the month following (1) the first anniversary
of the date of retirement, or (2) the attainment of age 55, or
(3) July 1, 1987, whichever occurs latest, the monthly pension
of a police officer who retired on or after January 1, 1977 and
on or before January 1, 1986, and did not receive an increase
under subsection (a) before July 1, 1987, shall be increased by
3% of the originally granted monthly pension for each full year
that has elapsed since the pension began, and by an additional
3% of the originally granted pension in each January
thereafter. The increases provided under this subsection are in
lieu of the increases provided in subsection (a).
(f) Notwithstanding the other provisions of this Section,
beginning with increases granted on or after July 1, 1993, the
second and all subsequent automatic annual increases granted
under subsection (a), (b), (d), or (e) of this Section shall be
calculated as 3% of the amount of pension payable at the time
of the increase, including any increases previously granted
under this Section, rather than 3% of the originally granted
pension amount. Section 1-103.1 does not apply to this
subsection (f).
(g) Notwithstanding any other provision of this Article,
the monthly pension of a person who first becomes a police
officer under this Article on or after January 1, 2011 shall be
increased on the January 1 occurring either on or after the
attainment of age 60 or the first anniversary of the pension

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start date, whichever is later. Each annual increase shall be
calculated at 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted
pension. If the annual unadjusted percentage change in the
consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the pension shall not be increased.
For the purposes of this subsection (g), "consumer price
index-u" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that
measures the average change in prices of goods and services
purchased by all urban consumers, United States city average,
all items, 1982-84 = 100. The new amount resulting from each
annual adjustment shall be determined by the Public Pension
Division of the Department of Insurance and made available to
the boards of the pension funds.
(Source: P.A. 91-939, eff. 2-1-01.)
(40 ILCS 5/3-112) (from Ch. 108 1/2, par. 3-112)
Sec. 3-112. Pension to survivors.
(a) Upon the death of a police officer entitled to a
pension under Section 3-111, the surviving spouse shall be
entitled to the pension to which the police officer was then
entitled. Upon the death of the surviving spouse, or upon the

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remarriage of the surviving spouse if that remarriage
terminates the surviving spouse's eligibility under Section
3-121, the police officer's unmarried children who are under
age 18 or who are dependent because of physical or mental
disability shall be entitled to equal shares of such pension.
If there is no eligible surviving spouse and no eligible child,
the dependent parent or parents of the officer shall be
entitled to receive or share such pension until their death or
marriage or remarriage after the death of the police officer.
Notwithstanding any other provision of this Article, for a
person who first becomes a police officer under this Article on
or after January 1, 2011, the pension to which the surviving
spouse, children, or parents are entitled under this subsection
(a) shall be in the amount of 66 2/3% of the police officer's
earned pension at the date of death. Nothing in this subsection
(a) shall act to diminish the survivor's benefits described in
subsection (e) of this Section.
Notwithstanding any other provision of this Article, the
monthly pension of a survivor of a person who first becomes a
police officer under this Article on or after January 1, 2011
shall be increased on the January 1 after attainment of age 60
by the recipient of the survivor's pension and each January 1
thereafter by 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted

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survivor's pension. If the annual unadjusted percentage change
in the consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the survivor's pension shall not be increased.
For the purposes of this subsection (a), "consumer price
index-u" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that
measures the average change in prices of goods and services
purchased by all urban consumers, United States city average,
all items, 1982-84 = 100. The new amount resulting from each
annual adjustment shall be determined by the Public Pension
Division of the Department of Insurance and made available to
the boards of the pension funds.
(b) Upon the death of a police officer while in service,
having at least 20 years of creditable service, or upon the
death of a police officer who retired from service with at
least 20 years of creditable service, whether death occurs
before or after attainment of age 50, the pension earned by the
police officer as of the date of death as provided in Section
3-111 shall be paid to the survivors in the sequence provided
in subsection (a) of this Section.
(c) Upon the death of a police officer while in service,
having at least 10 but less than 20 years of service, a pension
of 1/2 of the salary attached to the rank or ranks held by the
officer for one year immediately prior to death shall be
payable to the survivors in the sequence provided in subsection

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(a) of this Section. If death occurs as a result of the
performance of duty, the 10 year requirement shall not apply
and the pension to survivors shall be payable after any period
of service.
(d) Beginning July 1, 1987, a minimum pension of $400 per
month shall be paid to all surviving spouses, without regard to
the fact that the death of the police officer occurred prior to
that date. If the minimum pension established in Section
3-113.1 is greater than the minimum provided in this
subsection, the Section 3-113.1 minimum controls.
(e) The pension of the surviving spouse of a police officer
who dies (i) on or after January 1, 2001, (ii) without having
begun to receive either a retirement pension payable under
Section 3-111 or a disability pension payable under Section
3-114.1, 3-114.2, 3-114.3, or 3-114.6, and (iii) as a result of
sickness, accident, or injury incurred in or resulting from the
performance of an act of duty shall not be less than 100% of
the salary attached to the rank held by the deceased police
officer on the last day of service, notwithstanding any
provision in this Article to the contrary.
(Source: P.A. 91-939, eff. 2-1-01.)
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable

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property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of police officers, and revenues
available from other sources, will equal a sum sufficient to
meet the annual requirements of the police pension fund. The
annual requirements to be provided by such tax levy are equal
to (1) the normal cost of the pension fund for the year
involved, plus (2) an the amount sufficient to bring the total
assets of the pension fund up to 90% of the total actuarial
liabilities of the pension fund by the end of municipal fiscal
year 2040, as annually updated and determined by an enrolled
actuary employed by the Illinois Department of Insurance or by
an enrolled actuary retained by the pension fund or the
municipality. In making these determinations, the required
minimum employer contribution shall be calculated each year as
a level percentage of payroll over the years remaining up to
and including fiscal year 2040 and shall be determined under
the projected unit credit actuarial cost method necessary to
amortize the fund's unfunded accrued liabilities as provided in
Section 3-127. The tax shall be levied and collected in the
same manner as the general taxes of the municipality, and in
addition to all other taxes now or hereafter authorized to be
levied upon all property within the municipality, and shall be
in addition to the amount authorized to be levied for general
purposes as provided by Section 8-3-1 of the Illinois Municipal
Code, approved May 29, 1961, as amended. The tax shall be

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forwarded directly to the treasurer of the board within 30
business days after receipt by the county.
(b) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the System's
assets for fiscal years after March 30, 2011, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(c) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments, and the Comptroller must, beginning in fiscal year
2016, deduct and deposit into the fund the certified amounts or
a portion of those amounts from the following proportions of
grants of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any grants of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount

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of any grants of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any grants of State funds
to the municipality.
The State Comptroller may not deduct from any grants of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(d) The police pension fund shall consist of the following
moneys which shall be set apart by the treasurer of the
municipality:
(1) All moneys derived from the taxes levied hereunder;
(2) Contributions by police officers under Section
3-125.1;
(3) All moneys accumulated by the municipality under
any previous legislation establishing a fund for the
benefit of disabled or retired police officers;
(4) Donations, gifts or other transfers authorized by
this Article.
(e) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;

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(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 95-530, eff. 8-28-07.)
(40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)
Sec. 4-109. Pension.
(a) A firefighter age 50 or more with 20 or more years of
creditable service, who is no longer in service as a
firefighter, shall receive a monthly pension of 1/2 the monthly
salary attached to the rank held by him or her in the fire
service at the date of retirement.
The monthly pension shall be increased by 1/12 of 2.5% of
such monthly salary for each additional month over 20 years of
service through 30 years of service, to a maximum of 75% of
such monthly salary.
The changes made to this subsection (a) by this amendatory
Act of the 91st General Assembly apply to all pensions that

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become payable under this subsection on or after January 1,
1999. All pensions payable under this subsection that began on
or after January 1, 1999 and before the effective date of this
amendatory Act shall be recalculated, and the amount of the
increase accruing for that period shall be payable to the
pensioner in a lump sum.
(b) A firefighter who retires or is separated from service
having at least 10 but less than 20 years of creditable
service, who is not entitled to receive a disability pension,
and who did not apply for a refund of contributions at his or
her last separation from service shall receive a monthly
pension upon attainment of age 60 based on the monthly salary
attached to his or her rank in the fire service on the date of
retirement or separation from service according to the
following schedule:
For 10 years of service, 15% of salary;
For 11 years of service, 17.6% of salary;
For 12 years of service, 20.4% of salary;
For 13 years of service, 23.4% of salary;
For 14 years of service, 26.6% of salary;
For 15 years of service, 30% of salary;
For 16 years of service, 33.6% of salary;
For 17 years of service, 37.4% of salary;
For 18 years of service, 41.4% of salary;
For 19 years of service, 45.6% of salary.
(c) Notwithstanding any other provision of this Article,

SB3538 Enrolled - 24 - LRB096 18789 AMC 34174 b
the provisions of this subsection (c) apply to a person who
first becomes a firefighter under this Article on or after
January 1, 2011.
A firefighter age 55 or more who has 10 or more years of
service in that capacity shall be entitled at his option to
receive a monthly pension for his service as a firefighter
computed by multiplying 2.5% for each year of such service by
his or her final average salary.
The pension of a firefighter who is retiring after
attaining age 50 with 10 or more years of creditable service
shall be reduced by one-half of 1% for each month that the
firefighter's age is under age 55.
The maximum pension under this subsection (c) shall be 75%
of final average salary.
For the purposes of this subsection (c), "final average
salary" means the average monthly salary obtained by dividing
the total salary of the firefighter during the 96 consecutive
months of service within the last 120 months of service in
which the total salary was the highest by the number of months
of service in that period.
Beginning on January 1, 2011, for all purposes under this
Code (including without limitation the calculation of benefits
and employee contributions), the annual salary based on the
plan year of a member or participant to whom this Section
applies shall not exceed $106,800; however, that amount shall
annually thereafter be increased by the lesser of (i) 3% of

SB3538 Enrolled - 25 - LRB096 18789 AMC 34174 b
that amount, including all previous adjustments, or (ii)
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, including
all previous adjustments.
(Source: P.A. 91-466, eff. 8-6-99.)
(40 ILCS 5/4-109.1) (from Ch. 108 1/2, par. 4-109.1)
Sec. 4-109.1. Increase in pension.
(a) Except as provided in subsection (e), the monthly
pension of a firefighter who retires after July 1, 1971 and
prior to January 1, 1986, shall, upon either the first of the
month following the first anniversary of the date of retirement
if 60 years of age or over at retirement date, or upon the
first day of the month following attainment of age 60 if it
occurs after the first anniversary of retirement, be increased
by 2% of the originally granted monthly pension and by an
additional 2% in each January thereafter. Effective January
1976, the rate of the annual increase shall be 3% of the
originally granted monthly pension.
(b) The monthly pension of a firefighter who retired from
service with 20 or more years of service, on or before July 1,
1971, shall be increased, in January of the year following the
year of attaining age 65 or in January 1972, if then over age
65, by 2% of the originally granted monthly pension, for each
year the firefighter received pension payments. In each January

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thereafter, he or she shall receive an additional increase of
2% of the original monthly pension. Effective January 1976, the
rate of the annual increase shall be 3%.
(c) The monthly pension of a firefighter who is receiving a
disability pension under this Article shall be increased, in
January of the year following the year the firefighter attains
age 60, or in January 1974, if then over age 60, by 2% of the
originally granted monthly pension for each year he or she
received pension payments. In each January thereafter, the
firefighter shall receive an additional increase of 2% of the
original monthly pension. Effective January 1976, the rate of
the annual increase shall be 3%.
(c-1) On January 1, 1998, every child's disability benefit
payable on that date under Section 4-110 or 4-110.1 shall be
increased by an amount equal to 1/12 of 3% of the amount of the
benefit, multiplied by the number of months for which the
benefit has been payable. On each January 1 thereafter, every
child's disability benefit payable under Section 4-110 or
4-110.1 shall be increased by 3% of the amount of the benefit
then being paid, including any previous increases received
under this Article. These increases are not subject to any
limitation on the maximum benefit amount included in Section
4-110 or 4-110.1.
(c-2) On July 1, 2004, every pension payable to or on
behalf of a minor or disabled surviving child that is payable
on that date under Section 4-114 shall be increased by an

SB3538 Enrolled - 27 - LRB096 18789 AMC 34174 b
amount equal to 1/12 of 3% of the amount of the pension,
multiplied by the number of months for which the benefit has
been payable. On July 1, 2005, July 1, 2006, July 1, 2007, and
July 1, 2008, every pension payable to or on behalf of a minor
or disabled surviving child that is payable under Section 4-114
shall be increased by 3% of the amount of the pension then
being paid, including any previous increases received under
this Article. These increases are not subject to any limitation
on the maximum benefit amount included in Section 4-114.
(d) The monthly pension of a firefighter who retires after
January 1, 1986, shall, upon either the first of the month
following the first anniversary of the date of retirement if 55
years of age or over, or upon the first day of the month
following attainment of age 55 if it occurs after the first
anniversary of retirement, be increased by 1/12 of 3% of the
originally granted monthly pension for each full month that has
elapsed since the pension began, and by an additional 3% in
each January thereafter.
The changes made to this subsection (d) by this amendatory
Act of the 91st General Assembly apply to all initial increases
that become payable under this subsection on or after January
1, 1999. All initial increases that became payable under this
subsection on or after January 1, 1999 and before the effective
date of this amendatory Act shall be recalculated and the
additional amount accruing for that period, if any, shall be
payable to the pensioner in a lump sum.

SB3538 Enrolled - 28 - LRB096 18789 AMC 34174 b
(e) Notwithstanding the provisions of subsection (a), upon
the first day of the month following (1) the first anniversary
of the date of retirement, or (2) the attainment of age 55, or
(3) July 1, 1987, whichever occurs latest, the monthly pension
of a firefighter who retired on or after January 1, 1977 and on
or before January 1, 1986 and did not receive an increase under
subsection (a) before July 1, 1987, shall be increased by 3% of
the originally granted monthly pension for each full year that
has elapsed since the pension began, and by an additional 3% in
each January thereafter. The increases provided under this
subsection are in lieu of the increases provided in subsection
(a).
(f) In July 2009, the monthly pension of a firefighter who
retired before July 1, 1977 shall be recalculated and increased
to reflect the amount that the firefighter would have received
in July 2009 had the firefighter been receiving a 3% compounded
increase for each year he or she received pension payments
after January 1, 1986, plus any increases in pension received
for each year prior to January 1, 1986. In each January
thereafter, he or she shall receive an additional increase of
3% of the amount of the pension then being paid. The changes
made to this Section by this amendatory Act of the 96th General
Assembly apply without regard to whether the firefighter was in
service on or after its effective date.
(g) Notwithstanding any other provision of this Article,
the monthly pension of a person who first becomes a firefighter

SB3538 Enrolled - 29 - LRB096 18789 AMC 34174 b
under this Article on or after January 1, 2011 shall be
increased on the January 1 occurring either on or after the
attainment of age 60 or the first anniversary of the pension
start date, whichever is later. Each annual increase shall be
calculated at 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted
pension. If the annual unadjusted percentage change in the
consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the pension shall not be increased.
For the purposes of this subsection (g), "consumer price
index-u" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that
measures the average change in prices of goods and services
purchased by all urban consumers, United States city average,
all items, 1982-84 = 100. The new amount resulting from each
annual adjustment shall be determined by the Public Pension
Division of the Department of Insurance and made available to
the boards of the pension funds.
(Source: P.A. 96-775, eff. 8-28-09.)
(40 ILCS 5/4-114) (from Ch. 108 1/2, par. 4-114)
Sec. 4-114. Pension to survivors. If a firefighter who is
not receiving a disability pension under Section 4-110 or

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4-110.1 dies (1) as a result of any illness or accident, or (2)
from any cause while in receipt of a disability pension under
this Article, or (3) during retirement after 20 years service,
or (4) while vested for or in receipt of a pension payable
under subsection (b) of Section 4-109, or (5) while a deferred
pensioner, having made all required contributions, a pension
shall be paid to his or her survivors, based on the monthly
salary attached to the firefighter's rank on the last day of
service in the fire department, as follows:
(a)(1) To the surviving spouse, a monthly pension of
40% of the monthly salary, and to the guardian of any minor
child or children including a child which has been
conceived but not yet born, 12% of such monthly salary for
each such child until attainment of age 18 or until the
child's marriage, whichever occurs first. Beginning July
1, 1993, the monthly pension to the surviving spouse shall
be 54% of the monthly salary for all persons receiving a
surviving spouse pension under this Article, regardless of
whether the deceased firefighter was in service on or after
the effective date of this amendatory Act of 1993.
(2) Beginning July 1, 2004, unless the amount provided
under paragraph (1) of this subsection (a) is greater, the
total monthly pension payable under this paragraph (a),
including any amount payable on account of children, to the
surviving spouse of a firefighter who died (i) while
receiving a retirement pension, (ii) while he or she was a

SB3538 Enrolled - 31 - LRB096 18789 AMC 34174 b
deferred pensioner with at least 20 years of creditable
service, or (iii) while he or she was in active service
having at least 20 years of creditable service, regardless
of age, shall be no less than 100% of the monthly
retirement pension earned by the deceased firefighter at
the time of death, regardless of whether death occurs
before or after attainment of age 50, including any
increases under Section 4-109.1. This minimum applies to
all such surviving spouses who are eligible to receive a
surviving spouse pension, regardless of whether the
deceased firefighter was in service on or after the
effective date of this amendatory Act of the 93rd General
Assembly, and notwithstanding any limitation on maximum
pension under paragraph (d) or any other provision of this
Article.
(3) If the pension paid on and after July 1, 2004 to
the surviving spouse of a firefighter who died on or after
July 1, 2004 and before the effective date of this
amendatory Act of the 93rd General Assembly was less than
the minimum pension payable under paragraph (1) or (2) of
this subsection (a), the fund shall pay a lump sum equal to
the difference within 90 days after the effective date of
this amendatory Act of the 93rd General Assembly.
The pension to the surviving spouse shall terminate in
the event of the surviving spouse's remarriage prior to
July 1, 1993; remarriage on or after that date does not

SB3538 Enrolled - 32 - LRB096 18789 AMC 34174 b
affect the surviving spouse's pension, regardless of
whether the deceased firefighter was in service on or after
the effective date of this amendatory Act of 1993.
The surviving spouse's pension shall be subject to the
minimum established in Section 4-109.2.
(b) Upon the death of the surviving spouse leaving one
or more minor children, to the duly appointed guardian of
each such child, for support and maintenance of each such
child until the child reaches age 18 or marries, whichever
occurs first, a monthly pension of 20% of the monthly
salary.
(c) If a deceased firefighter leaves no surviving
spouse or unmarried minor children under age 18, but leaves
a dependent father or mother, to each dependent parent a
monthly pension of 18% of the monthly salary. To qualify
for the pension, a dependent parent must furnish
satisfactory proof that the deceased firefighter was at the
time of his or her death the sole supporter of the parent
or that the parent was the deceased's dependent for federal
income tax purposes.
(d) The total pension provided under paragraphs (a),
(b) and (c) of this Section shall not exceed 75% of the
monthly salary of the deceased firefighter (1) when paid to
the survivor of a firefighter who has attained 20 or more
years of service credit and who receives or is eligible to
receive a retirement pension under this Article, or (2)

SB3538 Enrolled - 33 - LRB096 18789 AMC 34174 b
when paid to the survivor of a firefighter who dies as a
result of illness or accident, or (3) when paid to the
survivor of a firefighter who dies from any cause while in
receipt of a disability pension under this Article, or (4)
when paid to the survivor of a deferred pensioner. For all
other survivors of deceased firefighters, the total
pension provided under paragraphs (a), (b) and (c) of this
Section shall not exceed 50% of the retirement annuity the
firefighter would have received on the date of death.
The maximum pension limitations in this paragraph (d)
do not control over any contrary provision of this Article
explicitly establishing a minimum amount of pension or
granting a one-time or annual increase in pension.
(e) If a firefighter leaves no eligible survivors under
paragraphs (a), (b) and (c), the board shall refund to the
firefighter's estate the amount of his or her accumulated
contributions, less the amount of pension payments, if any,
made to the firefighter while living.
(f) (Blank).
(g) If a judgment of dissolution of marriage between a
firefighter and spouse is judicially set aside subsequent
to the firefighter's death, the surviving spouse is
eligible for the pension provided in paragraph (a) only if
the judicial proceedings are filed within 2 years after the
date of the dissolution of marriage and within one year
after the firefighter's death and the board is made a party

SB3538 Enrolled - 34 - LRB096 18789 AMC 34174 b
to the proceedings. In such case the pension shall be
payable only from the date of the court's order setting
aside the judgment of dissolution of marriage.
(h) Benefits payable on account of a child under this
Section shall not be reduced or terminated by reason of the
child's attainment of age 18 if he or she is then dependent
by reason of a physical or mental disability but shall
continue to be paid as long as such dependency continues.
Individuals over the age of 18 and adjudged as a disabled
person pursuant to Article XIa of the Probate Act of 1975,
except for persons receiving benefits under Article III of
the Illinois Public Aid Code, shall be eligible to receive
benefits under this Act.
(i) Beginning January 1, 2000, the pension of the
surviving spouse of a firefighter who dies on or after
January 1, 1994 as a result of sickness, accident, or
injury incurred in or resulting from the performance of an
act of duty or from the cumulative effects of acts of duty
shall not be less than 100% of the salary attached to the
rank held by the deceased firefighter on the last day of
service, notwithstanding subsection (d) or any other
provision of this Article.
(j) Beginning July 1, 2004, the pension of the
surviving spouse of a firefighter who dies on or after
January 1, 1988 as a result of sickness, accident, or
injury incurred in or resulting from the performance of an

SB3538 Enrolled - 35 - LRB096 18789 AMC 34174 b
act of duty or from the cumulative effects of acts of duty
shall not be less than 100% of the salary attached to the
rank held by the deceased firefighter on the last day of
service, notwithstanding subsection (d) or any other
provision of this Article.
Notwithstanding any other provision of this Article, if a
person who first becomes a firefighter under this Article on or
after January 1, 2011 and who is not receiving a disability
pension under Section 4-110 or 4-110.1 dies (1) as a result of
any illness or accident, (2) from any cause while in receipt of
a disability pension under this Article, (3) during retirement
after 20 years service, (4) while vested for or in receipt of a
pension payable under subsection (b) of Section 4-109, or (5)
while a deferred pensioner, having made all required
contributions, then a pension shall be paid to his or her
survivors in the amount of 66 2/3% of the firefighter's earned
pension at the date of death. Nothing in this Section shall act
to diminish the survivor's benefits described in subsection (j)
of this Section.
Notwithstanding any other provision of this Article, the
monthly pension of a survivor of a person who first becomes a
firefighter under this Article on or after January 1, 2011
shall be increased on the January 1 after attainment of age 60
by the recipient of the survivor's pension and each January 1
thereafter by 3% or one-half the annual unadjusted percentage
increase in the consumer price index-u for the 12 months ending

SB3538 Enrolled - 36 - LRB096 18789 AMC 34174 b
with the September preceding each November 1, whichever is
less, of the originally granted survivor's pension. If the
annual unadjusted percentage change in the consumer price
index-u for a 12-month period ending in September is zero or,
when compared with the preceding period, decreases, then the
survivor's pension shall not be increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the boards of the pension
funds.
(Source: P.A. 95-279, eff. 1-1-08.)
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
Sec. 4-118. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of firefighters and revenues available
from other sources, will equal a sum sufficient to meet the
annual actuarial requirements of the pension fund, as

SB3538 Enrolled - 37 - LRB096 18789 AMC 34174 b
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or municipality. For the purposes of this
Section, the annual actuarial requirements of the pension fund
are equal to (1) the normal cost of the pension fund, or 17.5%
of the salaries and wages to be paid to firefighters for the
year involved, whichever is greater, plus (2) an the annual
amount sufficient to bring the total assets of the pension fund
up to 90% of the total actuarial liabilities of the pension
fund by the end of municipal fiscal year 2040, as annually
updated and determined by an enrolled actuary employed by the
Illinois Department of Insurance or by an enrolled actuary
retained by the pension fund or the municipality. In making
these determinations, the required minimum employer
contribution shall be calculated each year as a level
percentage of payroll over the years remaining up to and
including fiscal year 2040 and shall be determined under the
projected unit credit actuarial cost method necessary to
amortize the fund's unfunded accrued liabilities over a period
of 40 years from July 1, 1993, as annually updated and
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or the municipality. The amount to be applied
towards the amortization of the unfunded accrued liability in
any year shall not be less than the annual amount required to
amortize the unfunded accrued liability, including interest,

SB3538 Enrolled - 38 - LRB096 18789 AMC 34174 b
as a level percentage of payroll over the number of years
remaining in the 40 year amortization period.
(a-5) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the pension
fund's assets for fiscal years after March 30, 2011, any
actuarial gains or losses from investment return incurred
in a fiscal year shall be recognized in equal annual
amounts over the 5-year period following that fiscal year.
(b) The tax shall be levied and collected in the same
manner as the general taxes of the municipality, and shall be
in addition to all other taxes now or hereafter authorized to
be levied upon all property within the municipality, and in
addition to the amount authorized to be levied for general
purposes, under Section 8-3-1 of the Illinois Municipal Code or
under Section 14 of the Fire Protection District Act. The tax
shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the county (or, in the
case of amounts added to the tax levy under subsection (f),
used by the municipality to pay the employer contributions
required under subsection (b-1) of Section 15-155 of this

SB3538 Enrolled - 39 - LRB096 18789 AMC 34174 b
Code).
(b-5) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments, and the Comptroller must, beginning in fiscal year
2016, deduct and deposit into the fund the certified amounts or
a portion of those amounts from the following proportions of
grants of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any grants of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount
of any grants of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any grants of State funds
to the municipality.
The State Comptroller may not deduct from any grants of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(c) The board shall make available to the membership and
the general public for inspection and copying at reasonable
times the most recent Actuarial Valuation Balance Sheet and Tax
Levy Requirement issued to the fund by the Department of
Insurance.

SB3538 Enrolled - 40 - LRB096 18789 AMC 34174 b
(d) The firefighters' pension fund shall consist of the
following moneys which shall be set apart by the treasurer of
the municipality: (1) all moneys derived from the taxes levied
hereunder; (2) contributions by firefighters as provided under
Section 4-118.1; (3) all rewards in money, fees, gifts, and
emoluments that may be paid or given for or on account of
extraordinary service by the fire department or any member
thereof, except when allowed to be retained by competitive
awards; and (4) any money, real estate or personal property
received by the board.
(e) For the purposes of this Section, "enrolled actuary"
means an actuary: (1) who is a member of the Society of
Actuaries or the American Academy of Actuaries; and (2) who is
enrolled under Subtitle C of Title III of the Employee
Retirement Income Security Act of 1974, or who has been engaged
in providing actuarial services to one or more public
retirement systems for a period of at least 3 years as of July
1, 1983.
(f) The corporate authorities of a municipality that
employs a person who is described in subdivision (d) of Section
4-106 may add to the tax levy otherwise provided for in this
Section an amount equal to the projected cost of the employer
contributions required to be paid by the municipality to the
State Universities Retirement System under subsection (b-1) of
Section 15-155 of this Code.
(g) The Commission on Government Forecasting and

SB3538 Enrolled - 41 - LRB096 18789 AMC 34174 b
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 94-859, eff. 6-15-06.)
(40 ILCS 5/5-167.1) (from Ch. 108 1/2, par. 5-167.1)
Sec. 5-167.1. Automatic increase in annuity; retirement
from service after September 1, 1967.
(a) A policeman who retires from service after September 1,
1967 with at least 20 years of service credit shall, upon
either the first of the month following the first anniversary
of his date of retirement if he is age 60 (age 55 if born before

SB3538 Enrolled - 42 - LRB096 18789 AMC 34174 b
January 1, 1955) or over on that anniversary date, or upon the
first of the month following his attainment of age 60 (age 55
if born before January 1, 1955) if it occurs after the first
anniversary of his retirement date, have his then fixed and
payable monthly annuity increased by 1 1/2% and such first
fixed annuity as granted at retirement increased by an
additional 1 1/2% in January of each year thereafter up to a
maximum increase of 30%. Beginning January 1, 1983 for
policemen born before January 1, 1930, and beginning January 1,
1988 for policemen born on or after January 1, 1930 but before
January 1, 1940, and beginning January 1, 1996 for policemen
born on or after January 1, 1940 but before January 1, 1945,
and beginning January 1, 2000 for policemen born on or after
January 1, 1945 but before January 1, 1950, and beginning
January 1, 2005 for policemen born on or after January 1, 1950
but before January 1, 1955, such increases shall be 3% and such
policemen shall not be subject to the 30% maximum increase.
Any policeman born before January 1, 1945 who qualifies for
a minimum annuity and retires after September 1, 1967 but has
not received the initial increase under this subsection before
January 1, 1996 is entitled to receive the initial increase
under this subsection on (1) January 1, 1996, (2) the first
anniversary of the date of retirement, or (3) attainment of age
55, whichever occurs last. The changes to this Section made by
Public Act 89-12 apply beginning January 1, 1996 and without
regard to whether the policeman or annuitant terminated service

SB3538 Enrolled - 43 - LRB096 18789 AMC 34174 b
before the effective date of that Act.
Any policeman born before January 1, 1950 who qualifies for
a minimum annuity and retires after September 1, 1967 but has
not received the initial increase under this subsection before
January 1, 2000 is entitled to receive the initial increase
under this subsection on (1) January 1, 2000, (2) the first
anniversary of the date of retirement, or (3) attainment of age
55, whichever occurs last. The changes to this Section made by
this amendatory Act of the 92nd General Assembly apply without
regard to whether the policeman or annuitant terminated service
before the effective date of this amendatory Act.
Any policeman born before January 1, 1955 who qualifies for
a minimum annuity and retires after September 1, 1967 but has
not received the initial increase under this subsection before
January 1, 2005 is entitled to receive the initial increase
under this subsection on (1) January 1, 2005, (2) the first
anniversary of the date of retirement, or (3) attainment of age
55, whichever occurs last. The changes to this Section made by
this amendatory Act of the 94th General Assembly apply without
regard to whether the policeman or annuitant terminated service
before the effective date of this amendatory Act.
(b) Subsection (a) of this Section is not applicable to an
employee receiving a term annuity.
(c) To help defray the cost of such increases in annuity,
there shall be deducted, beginning September 1, 1967, from each
payment of salary to a policeman, 1/2 of 1% of each salary

SB3538 Enrolled - 44 - LRB096 18789 AMC 34174 b
payment concurrently with and in addition to the salary
deductions otherwise made for annuity purposes.
The city, in addition to the contributions otherwise made
by it for annuity purposes under other provisions of this
Article, shall make matching contributions concurrently with
such salary deductions.
Each such 1/2 of 1% deduction from salary and each such
contribution by the city of 1/2 of 1% of salary shall be
credited to the Automatic Increase Reserve, to be used to
defray the cost of the 1 1/2% annuity increase provided by this
Section. Any balance in such reserve as of the beginning of
each calendar year shall be credited with interest at the rate
of 3% per annum.
Such deductions from salary and city contributions shall
continue while the policeman is in service.
The salary deductions provided in this Section are not
subject to refund, except to the policeman himself, in any case
in which a policeman withdraws prior to qualification for
minimum annuity and applies for refund or applies for annuity,
and also where a term annuity becomes payable. In such cases,
the total of such salary deductions shall be refunded to the
policeman, without interest, and charged to the Automatic
Increase Reserve.
(d) Notwithstanding any other provision of this Article,
for a person who first becomes a policeman under this Article
on or after January 1, 2011, the annuity to which the survivor

SB3538 Enrolled - 45 - LRB096 18789 AMC 34174 b
is entitled under this subsection (d) shall be in the amount of
66 2/3% of the policeman's earned annuity at the date of death.
Nothing in this subsection (d) shall act to diminish the
survivor's benefits described in this Section.
Notwithstanding any other provision of this Article, the
monthly annuity of a survivor of a person who first becomes a
policeman under this Article on or after January 1, 2011 shall
be increased on the January 1 after attainment of age 60 by the
recipient of the survivor's annuity and each January 1
thereafter by 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted
annuity. If the annual unadjusted percentage change in the
consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the annuity shall not be increased.
For the purposes of this subsection (d), "consumer price
index-u" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that
measures the average change in prices of goods and services
purchased by all urban consumers, United States city average,
all items, 1982-84 = 100. The new amount resulting from each
annual adjustment shall be determined by the Public Pension
Division of the Department of Insurance and made available to
the boards of the pension funds.

SB3538 Enrolled - 46 - LRB096 18789 AMC 34174 b
(Source: P.A. 94-719, eff. 1-6-06.)
(40 ILCS 5/5-168) (from Ch. 108 1/2, par. 5-168)
Sec. 5-168. Financing.
(a) Except as expressly provided in this Section, the city
shall levy a tax annually upon all taxable property therein for
the purpose of providing revenue for the fund.
The tax shall be at a rate that will produce a sum which,
when added to the amounts deducted from the policemen's
salaries and the amounts deposited in accordance with
subsection (g), is sufficient for the purposes of the fund.
For the years 1968 and 1969, the city council shall levy a
tax annually at a rate on the dollar of the assessed valuation
of all taxable property that will produce, when extended, not
to exceed $9,700,000. Beginning with the year 1970 and through
2014, each year thereafter the city council shall levy a tax
annually at a rate on the dollar of the assessed valuation of
all taxable property that will produce when extended an amount
not to exceed the total amount of contributions by the
policemen to the Fund made in the calendar year 2 years before
the year for which the applicable annual tax is levied,
multiplied by 1.40 for the tax levy year 1970; by 1.50 for the
year 1971; by 1.65 for 1972; by 1.85 for 1973; by 1.90 for
1974; by 1.97 for 1975 through 1981; by 2.00 for 1982 and for
each year through 2014 thereafter. Beginning in 2015, the city
council shall levy a tax annually at a rate on the dollar of

SB3538 Enrolled - 47 - LRB096 18789 AMC 34174 b
the assessed valuation of all taxable property that will
produce when extended an annual amount that is equal to (1) the
normal cost to the Fund, plus (2) an annual amount sufficient
to bring the total assets of the Fund up to 90% of the total
actuarial liabilities of the Fund by the end of fiscal year
2040, as annually updated and determined by an enrolled actuary
employed by the Illinois Department of Insurance or by an
enrolled actuary retained by the Fund or the city. In making
these determinations, the required minimum employer
contribution shall be calculated each year as a level
percentage of payroll over the years remaining up to and
including fiscal year 2040 and shall be determined under the
projected unit credit actuarial cost method. For the purposes
of this subsection (a), contributions by the policeman to the
Fund shall not include payments made by a policeman to
establish credit under Section 5-214.2 of this Code.
(a-5) For purposes of determining the required employer
contribution to the Fund, the value of the Fund's assets shall
be equal to the actuarial value of the Fund's assets, which
shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of the
Fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the Fund's
assets for fiscal years after March 30, 2011, any actuarial
gains or losses from investment return incurred in a fiscal

SB3538 Enrolled - 48 - LRB096 18789 AMC 34174 b
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(a-7) If the city fails to transmit to the Fund
contributions required of it under this Article for more than
90 days after the payment of those contributions is due, the
Fund may, after giving notice to the city, certify to the State
Comptroller the amounts of the delinquent payments, and the
Comptroller must, beginning in fiscal year 2016, deduct and
deposit into the Fund the certified amounts or a portion of
those amounts from the following proportions of grants of State
funds to the city:
(1) in fiscal year 2016, one-third of the total amount
of any grants of State funds to the city;
(2) in fiscal year 2017, two-thirds of the total amount
of any grants of State funds to the city; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any grants of State funds
to the city.
The State Comptroller may not deduct from any grants of
State funds to the city more than the amount of delinquent
payments certified to the State Comptroller by the Fund.
(b) The tax shall be levied and collected in like manner
with the general taxes of the city, and is in addition to all
other taxes which the city is now or may hereafter be
authorized to levy upon all taxable property therein, and is
exclusive of and in addition to the amount of tax the city is

SB3538 Enrolled - 49 - LRB096 18789 AMC 34174 b
now or may hereafter be authorized to levy for general purposes
under any law which may limit the amount of tax which the city
may levy for general purposes. The county clerk of the county
in which the city is located, in reducing tax levies under
Section 8-3-1 of the Illinois Municipal Code, shall not
consider the tax herein authorized as a part of the general tax
levy for city purposes, and shall not include the tax in any
limitation of the percent of the assessed valuation upon which
taxes are required to be extended for the city.
(c) On or before January 10 of each year, the board shall
notify the city council of the requirement that the tax herein
authorized be levied by the city council for that current year.
The board shall compute the amounts necessary for the purposes
of this fund to be credited to the reserves established and
maintained within the fund; shall make an annual determination
of the amount of the required city contributions; and shall
certify the results thereof to the city council.
As soon as any revenue derived from the tax is collected it
shall be paid to the city treasurer of the city and shall be
held by him for the benefit of the fund in accordance with this
Article.
(d) If the funds available are insufficient during any year
to meet the requirements of this Article, the city may issue
tax anticipation warrants against the tax levy for the current
fiscal year.
(e) The various sums, including interest, to be contributed

SB3538 Enrolled - 50 - LRB096 18789 AMC 34174 b
by the city, shall be taken from the revenue derived from such
tax or otherwise as expressly provided in this Section. Any
moneys of the city derived from any source other than the tax
herein authorized shall not be used for any purpose of the fund
nor the cost of administration thereof, unless applied to make
the deposit expressly authorized in this Section or the
additional city contributions required under subsection (h).
(f) If it is not possible or practicable for the city to
make its contributions at the time that salary deductions are
made, the city shall make such contributions as soon as
possible thereafter, with interest thereon to the time it is
made.
(g) In lieu of levying all or a portion of the tax required
under this Section in any year, the city may deposit with the
city treasurer no later than March 1 of that year for the
benefit of the fund, to be held in accordance with this
Article, an amount that, together with the taxes levied under
this Section for that year, is not less than the amount of the
city contributions for that year as certified by the board to
the city council. The deposit may be derived from any source
legally available for that purpose, including, but not limited
to, the proceeds of city borrowings. The making of a deposit
shall satisfy fully the requirements of this Section for that
year to the extent of the amounts so deposited. Amounts
deposited under this subsection may be used by the fund for any
of the purposes for which the proceeds of the tax levied under

SB3538 Enrolled - 51 - LRB096 18789 AMC 34174 b
this Section may be used, including the payment of any amount
that is otherwise required by this Article to be paid from the
proceeds of that tax.
(h) In addition to the contributions required under the
other provisions of this Article, by November 1 of the
following specified years, the city shall deposit with the city
treasurer for the benefit of the fund, to be held and used in
accordance with this Article, the following specified amounts:
$6,300,000 in 1999; $5,880,000 in 2000; $5,460,000 in 2001;
$5,040,000 in 2002; and $4,620,000 in 2003.
The additional city contributions required under this
subsection are intended to decrease the unfunded liability of
the fund and shall not decrease the amount of the city
contributions required under the other provisions of this
Article. The additional city contributions made under this
subsection may be used by the fund for any of its lawful
purposes.
(Source: P.A. 95-1036, eff. 2-17-09.)
(40 ILCS 5/5-238 new)
Sec. 5-238. Provisions applicable to new hires.
(a) Notwithstanding any other provision of this Article,
the provisions of this Section apply to a person who first
becomes a policeman under this Article on or after January 1,
2011.
(b) A policeman age 55 or more who has 10 or more years of

SB3538 Enrolled - 52 - LRB096 18789 AMC 34174 b
service in that capacity shall be entitled at his option to
receive a monthly retirement annuity for his service as a
police officer computed by multiplying 2.5% for each year of
such service by his or her final average salary.
The retirement annuity of a policeman who is retiring after
attaining age 50 with 10 or more years of creditable service
shall be reduced by one-half of 1% for each month that the
police officer's age is under age 55.
The maximum retirement annuity under this subsection (b)
shall be 75% of final average salary.
For the purposes of this subsection (b), "final average
salary" means the average monthly salary obtained by dividing
the total salary of the policeman during the 96 consecutive
months of service within the last 120 months of service in
which the total salary was the highest by the number of months
of service in that period.
Beginning on January 1, 2011, for all purposes under this
Code (including without limitation the calculation of benefits
and employee contributions), the annual salary based on the
plan year of a member or participant to whom this Section
applies shall not exceed $106,800; however, that amount shall
annually thereafter be increased by the lesser of (i) 3% of
that amount, including all previous adjustments, or (ii)
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, including

SB3538 Enrolled - 53 - LRB096 18789 AMC 34174 b
all previous adjustments.
(c) Notwithstanding any other provision of this Article,
for a person who first becomes a policeman under this Article
on or after January 1, 2011, the annuity to which the surviving
spouse, children, or parents are entitled under this subsection
(c) shall be in the amount of 66 2/3% of the policeman's earned
annuity at the date of death.
Notwithstanding any other provision of this Article, the
monthly annuity of a survivor of a person who first becomes a
policeman under this Article on or after January 1, 2011 shall
be increased on the January 1 after attainment of age 60 by the
recipient of the survivor's annuity and each January 1
thereafter by 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted
survivor's annuity. If the unadjusted percentage change in the
consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the annuity shall not be increased.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall

SB3538 Enrolled - 54 - LRB096 18789 AMC 34174 b
be determined by the Public Pension Division of the Department
of Insurance and made available to the boards of the pension
funds.
(40 ILCS 5/6-164) (from Ch. 108 1/2, par. 6-164)
Sec. 6-164. Automatic annual increase; retirement after
September 1, 1959.
(a) A fireman qualifying for a minimum annuity who retires
from service after September 1, 1959 shall, upon either the
first of the month following the first anniversary of his date
of retirement if he is age 60 (age 55 if born before January 1,
1955) or over on that anniversary date, or upon the first of
the month following his attainment of age 60 (age 55 if born
before January 1, 1955) if that occurs after the first
anniversary of his retirement date, have his then fixed and
payable monthly annuity increased by 1 1/2%, and such first
fixed annuity as granted at retirement increased by an
additional 1 1/2% in January of each year thereafter up to a
maximum increase of 30%. Beginning July 1, 1982 for firemen
born before January 1, 1930, and beginning January 1, 1990 for
firemen born after December 31, 1929 and before January 1,
1940, and beginning January 1, 1996 for firemen born after
December 31, 1939 but before January 1, 1945, and beginning
January 1, 2004, for firemen born after December 31, 1944 but
before January 1, 1955, such increases shall be 3% and such
firemen shall not be subject to the 30% maximum increase.

SB3538 Enrolled - 55 - LRB096 18789 AMC 34174 b
Any fireman born before January 1, 1945 who qualifies for a
minimum annuity and retires after September 1, 1967 but has not
received the initial increase under this subsection before
January 1, 1996 is entitled to receive the initial increase
under this subsection on (1) January 1, 1996, (2) the first
anniversary of the date of retirement, or (3) attainment of age
55, whichever occurs last. The changes to this Section made by
this amendatory Act of 1995 apply beginning January 1, 1996 and
apply without regard to whether the fireman or annuitant
terminated service before the effective date of this amendatory
Act of 1995.
Any fireman born before January 1, 1955 who qualifies for a
minimum annuity and retires after September 1, 1967 but has not
received the initial increase under this subsection before
January 1, 2004 is entitled to receive the initial increase
under this subsection on (1) January 1, 2004, (2) the first
anniversary of the date of retirement, or (3) attainment of age
55, whichever occurs last. The changes to this Section made by
this amendatory Act of the 93rd General Assembly apply without
regard to whether the fireman or annuitant terminated service
before the effective date of this amendatory Act.
(b) Subsection (a) of this Section is not applicable to an
employee receiving a term annuity.
(c) To help defray the cost of such increases in annuity,
there shall be deducted, beginning September 1, 1959, from each
payment of salary to a fireman, 1/8 of 1% of each such salary

SB3538 Enrolled - 56 - LRB096 18789 AMC 34174 b
payment and an additional 1/8 of 1% beginning on September 1,
1961, and September 1, 1963, respectively, concurrently with
and in addition to the salary deductions otherwise made for
annuity purposes.
Each such additional 1/8 of 1% deduction from salary which
shall, on September 1, 1963, result in a total increase of 3/8
of 1% of salary, shall be credited to the Automatic Increase
Reserve, to be used, together with city contributions as
provided in this Article, to defray the cost of the 1 1/2%
annuity increments herein specified. Any balance in such
reserve as of the beginning of each calendar year shall be
credited with interest at the rate of 3% per annum.
The salary deductions provided in this Section are not
subject to refund, except to the fireman himself, in any case
in which a fireman withdraws prior to qualification for minimum
annuity and applies for refund, or applies for annuity, and
also where a term annuity becomes payable. In such cases, the
total of such salary deductions shall be refunded to the
fireman, without interest, and charged to the aforementioned
reserve.
(d) Notwithstanding any other provision of this Article,
the monthly annuity of a person who first becomes a fireman
under this Article on or after January 1, 2011 shall be
increased on the January 1 occurring either on or after the
attainment of age 60 or the first anniversary of the annuity
start date, whichever is later. Each annual increase shall be

SB3538 Enrolled - 57 - LRB096 18789 AMC 34174 b
calculated at 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted
retirement annuity. If the annual unadjusted percentage change
in the consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the annuity shall not be increased.
For the purposes of this subsection (d), "consumer price
index-u" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that
measures the average change in prices of goods and services
purchased by all urban consumers, United States city average,
all items, 1982-84 = 100. The new amount resulting from each
annual adjustment shall be determined by the Public Pension
Division of the Department of Insurance and made available to
the boards of the pension funds.
(Source: P.A. 93-654, eff. 1-16-04.)
(40 ILCS 5/6-165) (from Ch. 108 1/2, par. 6-165)
Sec. 6-165. Financing; tax.
(a) Except as expressly provided in this Section, each city
shall levy a tax annually upon all taxable property therein for
the purpose of providing revenue for the fund. For the years
prior to the year 1960, the tax rate shall be as provided for
in the "Firemen's Annuity and Benefit Fund of the Illinois

SB3538 Enrolled - 58 - LRB096 18789 AMC 34174 b
Municipal Code". The tax, from and after January 1, 1968 to and
including the year 1971, shall not exceed .0863% of the value,
as equalized or assessed by the Department of Revenue, of all
taxable property in the city. Beginning with the year 1972 and
through 2014, each year thereafter the city shall levy a tax
annually at a rate on the dollar of the value, as equalized or
assessed by the Department of Revenue of all taxable property
within such city that will produce, when extended, not to
exceed an amount equal to the total amount of contributions by
the employees to the fund made in the calendar year 2 years
prior to the year for which the annual applicable tax is
levied, multiplied by 2.23 through the calendar year 1981, and
by 2.26 for the year 1982 and for each year through 2014
thereafter. Beginning in 2015, the city council shall levy a
tax annually at a rate on the dollar of the assessed valuation
of all taxable property that will produce when extended an
annual amount that is equal to (1) the normal cost to the Fund,
plus (2) an annual amount sufficient to bring the total assets
of the Fund up to 90% of the total actuarial liabilities of the
Fund by the end of fiscal year 2040, as annually updated and
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the Fund or the city. In making these determinations, the
required minimum employer contribution shall be calculated
each year as a level percentage of payroll over the years
remaining up to and including fiscal year 2040 and shall be

SB3538 Enrolled - 59 - LRB096 18789 AMC 34174 b
determined under the projected unit credit actuarial cost
method.
To provide revenue for the ordinary death benefit
established by Section 6-150 of this Article, in addition to
the contributions by the firemen for this purpose, the city
council shall for the year 1962 and each year thereafter
annually levy a tax, which shall be in addition to and
exclusive of the taxes authorized to be levied under the
foregoing provisions of this Section, upon all taxable property
in the city, as equalized or assessed by the Department of
Revenue, at such rate per cent of the value of such property as
shall be sufficient to produce for each year the sum of
$142,000.
The amounts produced by the taxes levied annually, together
with the deposit expressly authorized in this Section, shall be
sufficient, when added to the amounts deducted from the
salaries of firemen and applied to the fund, to provide for the
purposes of the fund.
(a-5) For purposes of determining the required employer
contribution to the Fund, the value of the Fund's assets shall
be equal to the actuarial value of the Fund's assets, which
shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of the
Fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the Fund's

SB3538 Enrolled - 60 - LRB096 18789 AMC 34174 b
assets for fiscal years after March 30, 2011, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(a-7) If the city fails to transmit to the Fund
contributions required of it under this Article for more than
90 days after the payment of those contributions is due, the
Fund may, after giving notice to the city, certify to the State
Comptroller the amounts of the delinquent payments, and the
Comptroller must, beginning in fiscal year 2016, deduct and
deposit into the Fund the certified amounts or a portion of
those amounts from the following proportions of grants of State
funds to the city:
(1) in fiscal year 2016, one-third of the total amount
of any grants of State funds to the city;
(2) in fiscal year 2017, two-thirds of the total amount
of any grants of State funds to the city; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any grants of State funds
to the city.
The State Comptroller may not deduct from any grants of
State funds to the city more than the amount of delinquent
payments certified to the State Comptroller by the Fund.
(b) The taxes shall be levied and collected in like manner
with the general taxes of the city, and shall be in addition to
all other taxes which the city may levy upon all taxable

SB3538 Enrolled - 61 - LRB096 18789 AMC 34174 b
property therein and shall be exclusive of and in addition to
the amount of tax the city may levy for general purposes under
Section 8-3-1 of the Illinois Municipal Code, approved May 29,
1961, as amended, or under any other law or laws which may
limit the amount of tax which the city may levy for general
purposes.
(c) The amounts of the taxes to be levied in each year
shall be certified to the city council by the board.
(d) As soon as any revenue derived from such taxes is
collected, it shall be paid to the city treasurer and held for
the benefit of the fund, and all such revenue shall be paid
into the fund in accordance with the provisions of this
Article.
(e) If the funds available are insufficient during any year
to meet the requirements of this Article, the city may issue
tax anticipation warrants, against the tax levies herein
authorized for the current fiscal year.
(f) The various sums, hereinafter stated, including
interest, to be contributed by the city, shall be taken from
the revenue derived from the taxes or otherwise as expressly
provided in this Section. Except for defraying the cost of
administration of the fund during the calendar year in which a
city first attains a population of 500,000 and comes under the
provisions of this Article and the first calendar year
thereafter, any money of the city derived from any source other
than these taxes or the sale of tax anticipation warrants shall

SB3538 Enrolled - 62 - LRB096 18789 AMC 34174 b
not be used to provide revenue for the fund, nor to pay any
part of the cost of administration thereof, unless applied to
make the deposit expressly authorized in this Section or the
additional city contributions required under subsection (h).
(g) In lieu of levying all or a portion of the tax required
under this Section in any year, the city may deposit with the
city treasurer no later than March 1 of that year for the
benefit of the fund, to be held in accordance with this
Article, an amount that, together with the taxes levied under
this Section for that year, is not less than the amount of the
city contributions for that year as certified by the board to
the city council. The deposit may be derived from any source
legally available for that purpose, including, but not limited
to, the proceeds of city borrowings. The making of a deposit
shall satisfy fully the requirements of this Section for that
year to the extent of the amounts so deposited. Amounts
deposited under this subsection may be used by the fund for any
of the purposes for which the proceeds of the taxes levied
under this Section may be used, including the payment of any
amount that is otherwise required by this Article to be paid
from the proceeds of those taxes.
(h) In addition to the contributions required under the
other provisions of this Article, by November 1 of the
following specified years, the city shall deposit with the city
treasurer for the benefit of the fund, to be held and used in
accordance with this Article, the following specified amounts:

SB3538 Enrolled - 63 - LRB096 18789 AMC 34174 b
$6,300,000 in 1999; $5,880,000 in 2000; $5,460,000 in 2001;
$5,040,000 in 2002; and $4,620,000 in 2003.
The additional city contributions required under this
subsection are intended to decrease the unfunded liability of
the fund and shall not decrease the amount of the city
contributions required under the other provisions of this
Article. The additional city contributions made under this
subsection may be used by the fund for any of its lawful
purposes.
(Source: P.A. 93-654, eff. 1-16-04.)
(40 ILCS 5/6-229 new)
Sec. 6-229. Provisions applicable to new hires.
(a) Notwithstanding any other provision of this Article,
the provisions of this Section apply to a person who first
becomes a fireman under this Article on or after January 1,
2011.
(b) A fireman age 55 or more who has 10 or more years of
service in that capacity shall be entitled at his option to
receive a monthly retirement annuity for his service as a
fireman computed by multiplying 2.5% for each year of such
service by his or her final average salary.
The retirement annuity of a fireman who is retiring after
attaining age 50 with 10 or more years of creditable service
shall be reduced by one-half of 1% for each month that the
fireman's age is under age 55.

SB3538 Enrolled - 64 - LRB096 18789 AMC 34174 b
The maximum retirement annuity under this subsection (b)
shall be 75% of final average salary.
For the purposes of this subsection (b), "final average
salary" means the average monthly salary obtained by dividing
the total salary of the fireman during the 96 consecutive
months of service within the last 120 months of service in
which the total salary was the highest by the number of months
of service in that period.
Beginning on January 1, 2011, for all purposes under this
Code (including without limitation the calculation of benefits
and employee contributions), the annual salary based on the
plan year of a member or participant to whom this Section
applies shall not exceed $106,800; however, that amount shall
annually thereafter be increased by the lesser of (i) 3% of
that amount, including all previous adjustments, or (ii)
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, including
all previous adjustments.
(c) Notwithstanding any other provision of this Article,
for a person who first becomes a fireman under this Article on
or after January 1, 2011, the annuity to which the surviving
spouse, children, or parents are entitled under this subsection
(c) shall be in the amount of 66 2/3% of the fireman's earned
pension at the date of death.
Notwithstanding any other provision of this Article, the

SB3538 Enrolled - 65 - LRB096 18789 AMC 34174 b
monthly annuity of a survivor of a person who first becomes a
fireman under this Article on or after January 1, 2011 shall be
increased on the January 1 after attainment of age 60 by the
recipient of the survivor's pension and each January 1
thereafter by 3% or one-half the annual unadjusted percentage
increase in the consumer price index-u for the 12 months ending
with September preceding each November 1, whichever is less, of
the originally granted survivor's annuity. If the annual
unadjusted percentage change in the consumer price index-u for
a 12-month period ending in September is zero or, when compared
with the preceding period, decreases, then the annuity shall
not be increased.
(40 ILCS 5/7-142.1) (from Ch. 108 1/2, par. 7-142.1)
Sec. 7-142.1. Sheriff's law enforcement employees.
(a) In lieu of the retirement annuity provided by
subparagraph 1 of paragraph (a) of Section 7-142:
Any sheriff's law enforcement employee who has 20 or more
years of service in that capacity and who terminates service
prior to January 1, 1988 shall be entitled at his option to
receive a monthly retirement annuity for his service as a
sheriff's law enforcement employee computed by multiplying 2%
for each year of such service up to 10 years, 2 1/4% for each
year of such service above 10 years and up to 20 years, and 2
1/2% for each year of such service above 20 years, by his
annual final rate of earnings and dividing by 12.

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Any sheriff's law enforcement employee who has 20 or more
years of service in that capacity and who terminates service on
or after January 1, 1988 and before July 1, 2004 shall be
entitled at his option to receive a monthly retirement annuity
for his service as a sheriff's law enforcement employee
computed by multiplying 2.5% for each year of such service up
to 20 years, 2% for each year of such service above 20 years
and up to 30 years, and 1% for each year of such service above
30 years, by his annual final rate of earnings and dividing by
12.
Any sheriff's law enforcement employee who has 20 or more
years of service in that capacity and who terminates service on
or after July 1, 2004 shall be entitled at his or her option to
receive a monthly retirement annuity for service as a sheriff's
law enforcement employee computed by multiplying 2.5% for each
year of such service by his annual final rate of earnings and
dividing by 12.
If a sheriff's law enforcement employee has service in any
other capacity, his retirement annuity for service as a
sheriff's law enforcement employee may be computed under this
Section and the retirement annuity for his other service under
Section 7-142.
In no case shall the total monthly retirement annuity for
persons who retire before July 1, 2004 exceed 75% of the
monthly final rate of earnings. In no case shall the total
monthly retirement annuity for persons who retire on or after

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July 1, 2004 exceed 80% of the monthly final rate of earnings.
(b) Whenever continued group insurance coverage is elected
in accordance with the provisions of Section 367h of the
Illinois Insurance Code, as now or hereafter amended, the total
monthly premium for such continued group insurance coverage or
such portion thereof as is not paid by the municipality shall,
upon request of the person electing such continued group
insurance coverage, be deducted from any monthly pension
benefit otherwise payable to such person pursuant to this
Section, to be remitted by the Fund to the insurance company or
other entity providing the group insurance coverage.
(c) A sheriff's law enforcement employee who has service in
any other capacity may convert up to 10 years of that service
into service as a sheriff's law enforcement employee by paying
to the Fund an amount equal to (1) the additional employee
contribution required under Section 7-173.1, plus (2) the
additional employer contribution required under Section 7-172,
plus (3) interest on items (1) and (2) at the prescribed rate
from the date of the service to the date of payment.
(d) The changes to subsections (a) and (b) of this Section
made by this amendatory Act of the 94th General Assembly apply
only to persons in service on or after July 1, 2004. In the
case of such a person who begins to receive a retirement
annuity before the effective date of this amendatory Act of the
94th General Assembly, the annuity shall be recalculated
prospectively to reflect those changes, with the resulting

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increase beginning to accrue on the first annuity payment date
following the effective date of this amendatory Act.
(e) Any elected county officer who was entitled to receive
a stipend from the State on or after July 1, 2009 and on or
before June 30, 2010 may establish earnings credit for the
amount of stipend not received, if the elected county official
applies in writing to the fund within 6 months after the
effective date of this amendatory Act of the 96th General
Assembly and pays to the fund an amount equal to (i) employee
contributions on the amount of stipend not received, (ii)
employer contributions determined by the Board equal to the
employer's normal cost of the benefit on the amount of stipend
not received, plus (iii) interest on items (i) and (ii) at the
actuarially assumed rate.
(f) Notwithstanding any other provision of this Article,
the provisions of this subsection (f) apply to a person who
first becomes a sheriff's law enforcement employee under this
Article on or after January 1, 2011.
A sheriff's law enforcement employee age 55 or more who has
10 or more years of service in that capacity shall be entitled
at his option to receive a monthly retirement annuity for his
or her service as a sheriff's law enforcement employee computed
by multiplying 2.5% for each year of such service by his or her
final rate of earnings.
The retirement annuity of a sheriff's law enforcement
employee who is retiring after attaining age 50 with 10 or more

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years of creditable service shall be reduced by one-half of 1%
for each month that the sheriff's law enforcement employee's
age is under age 55.
The maximum retirement annuity under this subsection (f)
shall be 75% of final rate of earnings.
For the purposes of this subsection (f), "final rate of
earnings" means the average monthly earnings obtained by
dividing the total salary of the sheriff's law enforcement
employee during the 96 consecutive months of service within the
last 120 months of service in which the total earnings was the
highest by the number of months of service in that period.
Notwithstanding any other provision of this Article,
beginning on January 1, 2011, for all purposes under this Code
(including without limitation the calculation of benefits and
employee contributions), the annual earnings of a sheriff's law
enforcement employee to whom this Section applies shall not
include overtime and shall not exceed $106,800; however, that
amount shall annually thereafter be increased by the lesser of
(i) 3% of that amount, including all previous adjustments, or
(ii) one-half the annual unadjusted percentage increase (but
not less than zero) in the consumer price index-u for the 12
months ending with the September preceding each November 1,
including all previous adjustments.
(g) Notwithstanding any other provision of this Article,
the monthly annuity of a person who first becomes a sheriff's
law enforcement employee under this Article on or after January

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1, 2011 shall be increased on the January 1 occurring either on
or after the attainment of age 60 or the first anniversary of
the annuity start date, whichever is later. Each annual
increase shall be calculated at 3% or one-half the annual
unadjusted percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less, of the
originally granted retirement annuity. If the annual
unadjusted percentage change in the consumer price index-u for
a 12-month period ending in September is zero or, when compared
with the preceding period, decreases, then the annuity shall
not be increased.
(h) Notwithstanding any other provision of this Article,
for a person who first becomes a sheriff's law enforcement
employee under this Article on or after January 1, 2011, the
annuity to which the surviving spouse, children, or parents are
entitled under this subsection (h) shall be in the amount of 66
2/3% of the sheriff's law enforcement employee's earned annuity
at the date of death.
(i) Notwithstanding any other provision of this Article,
the monthly annuity of a survivor of a person who first becomes
a sheriff's law enforcement employee under this Article on or
after January 1, 2011 shall be increased on the January 1 after
attainment of age 60 by the recipient of the survivor's annuity
and each January 1 thereafter by 3% or one-half the annual
unadjusted percentage increase in the consumer price index-u

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for the 12 months ending with the September preceding each
November 1, whichever is less, of the originally granted
pension. If the annual unadjusted percentage change in the
consumer price index-u for a 12-month period ending in
September is zero or, when compared with the preceding period,
decreases, then the annuity shall not be increased.
(j) For the purposes of this Section, "consumer price
index-u" means the index published by the Bureau of Labor
Statistics of the United States Department of Labor that
measures the average change in prices of goods and services
purchased by all urban consumers, United States city average,
all items, 1982-84 = 100. The new amount resulting from each
annual adjustment shall be determined by the Public Pension
Division of the Department of Insurance and made available to
the boards of the pension funds.
(Source: P.A. 96-961, eff. 7-2-10.)
Section 99. Effective date. This Act takes effect January
1, 2011.