Bill Text: IL SB3651 | 2021-2022 | 102nd General Assembly | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that when assessing payment for any amount due under a provision requiring an additional employer contribution for certain earnings increases, IMRF shall exclude reportable earnings increases resulting from periods where the member was paid through workers' compensation. Effective immediately.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2022-05-13 - Public Act . . . . . . . . . 102-0849 [SB3651 Detail]
Download: Illinois-2021-SB3651-Engrossed.html
Bill Title: Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that when assessing payment for any amount due under a provision requiring an additional employer contribution for certain earnings increases, IMRF shall exclude reportable earnings increases resulting from periods where the member was paid through workers' compensation. Effective immediately.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2022-05-13 - Public Act . . . . . . . . . 102-0849 [SB3651 Detail]
Download: Illinois-2021-SB3651-Engrossed.html
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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by | ||||||
5 | changing Section 7-172 as follows:
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6 | (40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
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7 | Sec. 7-172. Contributions by participating municipalities | ||||||
8 | and
participating instrumentalities.
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9 | (a) Each participating municipality and each participating
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10 | instrumentality shall make payment to the fund as follows:
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11 | 1. municipality contributions in an amount determined | ||||||
12 | by applying
the municipality contribution rate to each | ||||||
13 | payment of earnings paid to
each of its participating | ||||||
14 | employees;
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15 | 2. an amount equal to the employee contributions | ||||||
16 | provided by paragraph
(a) of Section 7-173, whether or not | ||||||
17 | the employee contributions are
withheld as permitted by | ||||||
18 | that Section;
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19 | 3. all accounts receivable, together with interest | ||||||
20 | charged thereon,
as provided in Section 7-209, and any | ||||||
21 | amounts due under subsection (a-5) of Section 7-144;
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22 | 4. if it has no participating employees with current | ||||||
23 | earnings, an
amount payable which, over a closed period of |
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1 | 20 years for participating municipalities and 10 years for | ||||||
2 | participating instrumentalities, will amortize, at the | ||||||
3 | effective rate for
that year, any unfunded obligation. The | ||||||
4 | unfunded obligation shall be computed as provided in | ||||||
5 | paragraph 2 of subsection (b); | ||||||
6 | 5. if it has fewer than 7 participating employees or a | ||||||
7 | negative balance in its municipality reserve, the greater | ||||||
8 | of (A) an amount payable that, over a period of 20 years, | ||||||
9 | will amortize at the effective rate for that year any | ||||||
10 | unfunded obligation, computed as provided in paragraph 2 | ||||||
11 | of subsection (b) or (B) the amount required by paragraph | ||||||
12 | 1 of this subsection (a).
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13 | (b) A separate municipality contribution rate shall be | ||||||
14 | determined
for each calendar year for all participating | ||||||
15 | municipalities together
with all instrumentalities thereof. | ||||||
16 | The municipality contribution rate
shall be determined for | ||||||
17 | participating instrumentalities as if they were
participating | ||||||
18 | municipalities. The municipality contribution rate shall
be | ||||||
19 | the sum of the following percentages:
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20 | 1. The percentage of earnings of all the participating | ||||||
21 | employees of all
participating municipalities and | ||||||
22 | participating instrumentalities which, if paid
over the | ||||||
23 | entire period of their service, will be sufficient when | ||||||
24 | combined with
all employee contributions available for the | ||||||
25 | payment of benefits, to provide
all annuities for | ||||||
26 | participating employees, and the $3,000 death benefit
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1 | payable under Sections 7-158 and 7-164, such percentage to | ||||||
2 | be known as the
normal cost rate.
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3 | 2. The percentage of earnings of the participating | ||||||
4 | employees of each
participating municipality and | ||||||
5 | participating instrumentalities necessary
to adjust for | ||||||
6 | the difference between the present value of all benefits,
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7 | excluding temporary and total and permanent disability and | ||||||
8 | death benefits, to
be provided for its participating | ||||||
9 | employees and the sum of its accumulated
municipality | ||||||
10 | contributions and the accumulated employee contributions | ||||||
11 | and the
present value of expected future employee and | ||||||
12 | municipality contributions
pursuant to subparagraph 1 of | ||||||
13 | this paragraph (b). This adjustment shall be
spread over a | ||||||
14 | period determined by the Board, not to exceed 30 years for | ||||||
15 | participating municipalities or 10 years for participating | ||||||
16 | instrumentalities.
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17 | 3. The percentage of earnings of the participating | ||||||
18 | employees of all
municipalities and participating | ||||||
19 | instrumentalities necessary to provide
the present value | ||||||
20 | of all temporary and total and permanent disability
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21 | benefits granted during the most recent year for which | ||||||
22 | information is
available.
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23 | 4. The percentage of earnings of the participating | ||||||
24 | employees of all
participating municipalities and | ||||||
25 | participating instrumentalities
necessary to provide the | ||||||
26 | present value of the net single sum death
benefits |
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1 | expected to become payable from the reserve established | ||||||
2 | under
Section 7-206 during the year for which this rate is | ||||||
3 | fixed.
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4 | 5. The percentage of earnings necessary to meet any | ||||||
5 | deficiency
arising in the Terminated Municipality Reserve.
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6 | (c) A separate municipality contribution rate shall be | ||||||
7 | computed for
each participating municipality or participating | ||||||
8 | instrumentality
for its sheriff's law enforcement employees.
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9 | A separate municipality contribution rate shall be | ||||||
10 | computed for the
sheriff's law enforcement employees of each | ||||||
11 | forest preserve district that
elects to have such employees. | ||||||
12 | For the period from January 1, 1986 to
December 31, 1986, such | ||||||
13 | rate shall be the forest preserve district's regular
rate plus | ||||||
14 | 2%.
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15 | In the event that the Board determines that there is an | ||||||
16 | actuarial
deficiency in the account of any municipality with | ||||||
17 | respect to a person who
has elected to participate in the Fund | ||||||
18 | under Section 3-109.1 of this Code,
the Board may adjust the | ||||||
19 | municipality's contribution rate so as to make up
that | ||||||
20 | deficiency over such reasonable period of time as the Board | ||||||
21 | may determine.
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22 | (d) The Board may establish a separate municipality | ||||||
23 | contribution
rate for all employees who are program | ||||||
24 | participants employed under the
federal Comprehensive | ||||||
25 | Employment Training Act by all of the
participating | ||||||
26 | municipalities and instrumentalities. The Board may also
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1 | provide that, in lieu of a separate municipality rate for | ||||||
2 | these
employees, a portion of the municipality contributions | ||||||
3 | for such program
participants shall be refunded or an extra | ||||||
4 | charge assessed so that the
amount of municipality | ||||||
5 | contributions retained or received by the fund
for all CETA | ||||||
6 | program participants shall be an amount equal to that which
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7 | would be provided by the separate municipality contribution | ||||||
8 | rate for all
such program participants. Refunds shall be made | ||||||
9 | to prime sponsors of
programs upon submission of a claim | ||||||
10 | therefor and extra charges shall be
assessed to participating | ||||||
11 | municipalities and instrumentalities. In
establishing the | ||||||
12 | municipality contribution rate as provided in paragraph
(b) of | ||||||
13 | this Section, the use of a separate municipality contribution
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14 | rate for program participants or the refund of a portion of the
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15 | municipality contributions, as the case may be, may be | ||||||
16 | considered.
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17 | (e) Computations of municipality contribution rates for | ||||||
18 | the
following calendar year shall be made prior to the | ||||||
19 | beginning of each
year, from the information available at the | ||||||
20 | time the computations are
made, and on the assumption that the | ||||||
21 | employees in each participating
municipality or participating | ||||||
22 | instrumentality at such time will continue
in service until | ||||||
23 | the end of such calendar year at their respective rates
of | ||||||
24 | earnings at such time.
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25 | (f) Any municipality which is the recipient of State | ||||||
26 | allocations
representing that municipality's contributions for |
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1 | retirement annuity
purposes on behalf of its employees as | ||||||
2 | provided in Section 12-21.16 of
the Illinois Public Aid Code | ||||||
3 | shall pay the allocations so
received to the Board for such | ||||||
4 | purpose. Estimates of State allocations to
be received during | ||||||
5 | any taxable year shall be considered in the
determination of | ||||||
6 | the municipality's tax rate for that year under Section
7-171. | ||||||
7 | If a special tax is levied under Section 7-171, none of the
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8 | proceeds may be used to reimburse the municipality for the | ||||||
9 | amount of State
allocations received and paid to the Board. | ||||||
10 | Any multiple-county or
consolidated health department which | ||||||
11 | receives contributions from a county
under Section 11.2 of "An | ||||||
12 | Act in relation to establishment and maintenance
of county and | ||||||
13 | multiple-county health departments", approved July 9, 1943,
as | ||||||
14 | amended, or distributions under Section 3 of the Department of | ||||||
15 | Public
Health Act, shall use these only for municipality | ||||||
16 | contributions by the
health department.
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17 | (g) Municipality contributions for the several purposes | ||||||
18 | specified
shall, for township treasurers and employees in the | ||||||
19 | offices of the
township treasurers who meet the qualifying | ||||||
20 | conditions for coverage
hereunder, be allocated among the | ||||||
21 | several school districts and parts of
school districts | ||||||
22 | serviced by such treasurers and employees in the
proportion | ||||||
23 | which the amount of school funds of each district or part of
a | ||||||
24 | district handled by the treasurer bears to the total amount of | ||||||
25 | all
school funds handled by the treasurer.
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26 | From the funds subject to allocation among districts and |
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1 | parts of
districts pursuant to the School Code, the trustees | ||||||
2 | shall withhold the
proportionate share of the liability for | ||||||
3 | municipality contributions imposed
upon such districts by this | ||||||
4 | Section, in respect to such township treasurers
and employees | ||||||
5 | and remit the same to the Board.
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6 | The municipality contribution rate for an educational | ||||||
7 | service center shall
initially be the same rate for each year | ||||||
8 | as the regional office of
education or school district
which | ||||||
9 | serves as its administrative agent. When actuarial data become
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10 | available, a separate rate shall be established as provided in | ||||||
11 | subparagraph
(i) of this Section.
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12 | The municipality contribution rate for a public agency, | ||||||
13 | other than a
vocational education cooperative, formed under | ||||||
14 | the Intergovernmental
Cooperation Act shall initially be the | ||||||
15 | average rate for the municipalities
which are parties to the | ||||||
16 | intergovernmental agreement. When actuarial data
become | ||||||
17 | available, a separate rate shall be established as provided in
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18 | subparagraph (i) of this Section.
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19 | (h) Each participating municipality and participating
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20 | instrumentality shall make the contributions in the amounts | ||||||
21 | provided in
this Section in the manner prescribed from time to | ||||||
22 | time by the Board and
all such contributions shall be | ||||||
23 | obligations of the respective
participating municipalities and | ||||||
24 | participating instrumentalities to this
fund. The failure to | ||||||
25 | deduct any employee contributions shall not
relieve the | ||||||
26 | participating municipality or participating instrumentality
of |
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1 | its obligation to this fund. Delinquent payments of | ||||||
2 | contributions
due under this Section may, with interest, be | ||||||
3 | recovered by civil action
against the participating | ||||||
4 | municipalities or participating
instrumentalities. | ||||||
5 | Municipality contributions, other than the amount
necessary | ||||||
6 | for employee contributions, for
periods of service by | ||||||
7 | employees from whose earnings no deductions were made
for | ||||||
8 | employee contributions to the fund, may be charged to the | ||||||
9 | municipality
reserve for the municipality or participating | ||||||
10 | instrumentality.
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11 | (i) Contributions by participating instrumentalities shall | ||||||
12 | be
determined as provided herein except that the percentage | ||||||
13 | derived under
subparagraph 2 of paragraph (b) of this Section, | ||||||
14 | and the amount payable
under subparagraph 4 of paragraph (a) | ||||||
15 | of this Section, shall be based on
an amortization period of 10 | ||||||
16 | years.
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17 | (j) Notwithstanding the other provisions of this Section, | ||||||
18 | the additional unfunded liability accruing as a result of | ||||||
19 | Public Act 94-712
shall be amortized over a period of 30 years | ||||||
20 | beginning on January 1 of the
second calendar year following | ||||||
21 | the calendar year in which Public Act 94-712 takes effect, | ||||||
22 | except that the employer may provide for a longer amortization | ||||||
23 | period by adopting a resolution or ordinance specifying a | ||||||
24 | 35-year or 40-year period and submitting a certified copy of | ||||||
25 | the ordinance or resolution to the fund no later than June 1 of | ||||||
26 | the calendar year following the calendar year in which Public |
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1 | Act 94-712 takes effect.
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2 | (k) If the amount of a participating employee's reported | ||||||
3 | earnings for any of the 12-month periods used to determine the | ||||||
4 | final rate of earnings exceeds the employee's 12-month | ||||||
5 | reported earnings with the same employer for the previous year | ||||||
6 | by the greater of 6% or 1.5 times the annual increase in the | ||||||
7 | Consumer Price Index-U, as established by the United States | ||||||
8 | Department of Labor for the preceding September, the | ||||||
9 | participating municipality or participating instrumentality | ||||||
10 | that paid those earnings shall pay to the Fund, in addition to | ||||||
11 | any other contributions required under this Article, the | ||||||
12 | present value of the increase in the pension resulting from | ||||||
13 | the portion of the increase in reported earnings that is in | ||||||
14 | excess of the greater of 6% or 1.5 times the annual increase in | ||||||
15 | the Consumer Price Index-U, as determined by the Fund. This | ||||||
16 | present value shall be computed on the basis of the actuarial | ||||||
17 | assumptions and tables used in the most recent actuarial | ||||||
18 | valuation of the Fund that is available at the time of the | ||||||
19 | computation. | ||||||
20 | Whenever it determines that a payment is or may be | ||||||
21 | required under this subsection (k), the fund shall calculate | ||||||
22 | the amount of the payment and bill the participating | ||||||
23 | municipality or participating instrumentality for that amount. | ||||||
24 | The bill shall specify the calculations used to determine the | ||||||
25 | amount due. If the participating municipality or participating | ||||||
26 | instrumentality disputes the amount of the bill, it may, |
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1 | within 30 days after receipt of the bill, apply to the fund in | ||||||
2 | writing for a recalculation. The application must specify in | ||||||
3 | detail the grounds of the dispute. Upon receiving a timely | ||||||
4 | application for recalculation, the fund shall review the | ||||||
5 | application and, if appropriate, recalculate the amount due.
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6 | The participating municipality and participating | ||||||
7 | instrumentality contributions required under this subsection | ||||||
8 | (k) may be paid in the form of a lump sum within 90 days after | ||||||
9 | receipt of the bill. If the participating municipality and | ||||||
10 | participating instrumentality contributions are not paid | ||||||
11 | within 90 days after receipt of the bill, then interest will be | ||||||
12 | charged at a rate equal to the fund's annual actuarially | ||||||
13 | assumed rate of return on investment compounded annually from | ||||||
14 | the 91st day after receipt of the bill. Payments must be | ||||||
15 | concluded within 3 years after receipt of the bill by the | ||||||
16 | participating municipality or participating instrumentality. | ||||||
17 | When assessing payment for any amount due under this | ||||||
18 | subsection (k), the fund shall exclude earnings increases | ||||||
19 | resulting from overload or overtime earnings. | ||||||
20 | When assessing payment for any amount due under this | ||||||
21 | subsection (k), the fund shall exclude earnings increases | ||||||
22 | resulting from payments for unused vacation time, but only for | ||||||
23 | payments for unused vacation time made in the final 3 months of | ||||||
24 | the final rate of earnings period. | ||||||
25 | When assessing payment for any amount due under this | ||||||
26 | subsection (k), the fund shall also exclude earnings increases |
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1 | attributable to standard employment promotions resulting in | ||||||
2 | increased responsibility and workload. | ||||||
3 | When assessing payment for any amount due under this | ||||||
4 | subsection (k), the fund shall exclude reportable earnings | ||||||
5 | increases resulting from periods where the member was paid | ||||||
6 | through workers' compensation. | ||||||
7 | This subsection (k) does not apply to earnings increases | ||||||
8 | paid to individuals under contracts or collective bargaining | ||||||
9 | agreements entered into, amended, or renewed before January 1, | ||||||
10 | 2012 (the effective date of Public Act 97-609), earnings | ||||||
11 | increases paid to members who are 10 years or more from | ||||||
12 | retirement eligibility, or earnings increases resulting from | ||||||
13 | an increase in the number of hours required to be worked. | ||||||
14 | When assessing payment for any amount due under this | ||||||
15 | subsection (k), the fund shall also exclude earnings | ||||||
16 | attributable to personnel policies adopted before January 1, | ||||||
17 | 2012 (the effective date of Public Act 97-609) as long as those | ||||||
18 | policies are not applicable to employees who begin service on | ||||||
19 | or after January 1, 2012 (the effective date of Public Act | ||||||
20 | 97-609). | ||||||
21 | The change made to this Section by Public Act 100-139 is a | ||||||
22 | clarification of existing law and is intended to be | ||||||
23 | retroactive to January 1, 2012 (the effective date of Public | ||||||
24 | Act 97-609). | ||||||
25 | (Source: P.A. 99-745, eff. 8-5-16; 100-139, eff. 8-18-17; | ||||||
26 | 100-411, eff. 8-25-17; 100-863, eff. 8-14-18.)
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1 | Section 99. Effective date. This Act takes effect upon | ||||||
2 | becoming law.
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