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for Chicago Transit Authority Employees pursuant to Section |
401(h) of the Internal Revenue Code of 1986, but no earlier |
than January 1, 2009 and no later than July 1, 2009.
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(1) The Board of Trustees shall consist of 7 members |
appointed as follows: (i) 3 trustees shall be appointed by |
the Chicago Transit Board; (ii) one trustee shall be |
appointed by an organization representing the highest |
number of Chicago Transit Authority participants; (iii) |
one trustee shall be appointed by an organization |
representing the second-highest number of Chicago Transit |
Authority participants; (iv) one trustee shall be |
appointed by the recognized coalition representatives of |
participants who are not represented by an organization |
with the highest or second-highest number of Chicago |
Transit Authority participants; and (v) one trustee shall |
be selected by the Regional Transportation Authority Board |
of Directors, and the trustee shall be a professional |
fiduciary who has experience in the area of collectively |
bargained retiree health plans. Trustees shall serve until |
a successor has been appointed and qualified, or until |
resignation, death, incapacity, or disqualification.
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Any person appointed as a trustee of the board shall |
qualify by taking an oath of office that he or she will |
diligently and honestly administer the affairs of the |
system, and will not knowingly violate or willfully permit |
the violation of any of the provisions of law applicable to |
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the Plan, including Sections 1-109, 1-109.1, 1-109.2, |
1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois |
Pension Code.
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Each trustee shall cast individual votes, and a |
majority vote shall be final and binding upon all |
interested parties, provided that the Board of Trustees may |
require a supermajority vote with respect to the investment |
of the assets of the Retiree Health Care Trust, and may set |
forth that requirement in the trust agreement or by-laws of |
the Board of Trustees. Each trustee shall have the rights, |
privileges, authority and obligations as are usual and |
customary for such fiduciaries.
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(2) The Board of Trustees shall establish and |
administer a health care benefit program for eligible |
retirees and their dependents and survivors. Any health |
care benefit program established by the Board of Trustees |
for eligible retirees and their dependents and survivors |
effective on or after July 1, 2009 shall not contain any |
plan which provides for more than 90% coverage for |
in-network services or 70% coverage for out-of-network |
services after any deductible has been paid, except that |
coverage through a health maintenance organization ("HMO") |
may be provided at 100%.
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(2.5) The Board of Trustees may also establish and |
administer a health reimbursement arrangement for retirees |
and for former employees of the Authority or the Retirement |
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Plan, and their survivors, who have contributed to the |
Retiree Health Care Trust but do not satisfy the years of |
service requirement of subdivision (b)(4) and the terms of |
the retiree health care plan; or for those who do satisfy |
the requirements of subdivision (b)(4) and the terms of the |
retiree health care plan but who decline coverage under the |
plan prior to retirement. Any such health reimbursement |
arrangement may provide that: the retirees or former |
employees of the Authority or the Retirement Plan, and |
their survivors, must have reached age 65 to be eligible to |
participate in the health reimbursement arrangement; |
contributions by the retirees or former employees of the |
Authority or the Retirement Plan to the Retiree Health Care |
Trust shall be considered assets of the Retiree Health Care |
Trust only; contributions shall not accrue interest for the |
benefit of the retiree or former employee of the Authority |
or the Retirement Plan or survivor; benefits shall be |
payable in accordance with the Internal Revenue Code of |
1986; the amounts paid to or on account of the retiree or |
former employee of the Authority or the Retirement Plan or |
survivor shall not exceed the total amount which the |
retiree or former employee of the Authority or the |
Retirement Plan contributed to the Retiree Health Care |
Trust; the Retiree Health Care Trust may charge a |
reasonable administrative fee for processing the benefits. |
The Board of Trustees of the Retiree Health Care Trust may |
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establish such rules, limitations and requirements as the |
Board of Trustees deems appropriate. |
(3) The Retiree Health Care Trust shall be administered |
by the Board of Trustees according to the following |
requirements:
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(i) The Board of Trustees may cause amounts on |
deposit in the Retiree Health Care Trust to be invested |
in those investments that are permitted investments |
for the investment of moneys held under any one or more |
of the pension or retirement systems of the State, any |
unit of local government or school district, or any |
agency or instrumentality thereof. The Board, by a vote |
of at least two-thirds of the trustees, may transfer |
investment management to the Illinois State Board of |
Investment, which is hereby authorized to manage these |
investments when so requested by the Board of Trustees.
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(ii) The Board of Trustees shall establish and |
maintain an appropriate funding reserve level which |
shall not be less than the amount of incurred and |
unreported claims plus 12 months of expected claims and |
administrative expenses.
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(iii) The Board of Trustees shall make an annual |
assessment of the funding levels of the Retiree Health |
Care Trust and shall submit a report to the Auditor |
General at least 90 days prior to the end of the fiscal |
year. The report shall provide the following: |
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(A) the actuarial present value of projected |
benefits expected to be paid to current and future |
retirees and their dependents and survivors; |
(B) the actuarial present value of projected |
contributions and trust income plus assets; |
(C) the reserve required by subsection |
(b)(3)(ii); and |
(D) an assessment of whether the actuarial |
present value of projected benefits expected to be |
paid to current and future retirees and their |
dependents and survivors exceeds or is less than |
the actuarial present value of projected |
contributions and trust income plus assets in |
excess of the reserve required by subsection |
(b)(3)(ii). |
If the actuarial present value of projected |
benefits expected to be paid to current and future |
retirees and their dependents and survivors exceeds |
the actuarial present value of projected contributions |
and trust income plus assets in excess of the reserve |
required by subsection (b)(3)(ii), then the report |
shall provide a plan, to be implemented over a period |
of not more than 10 years from each valuation date, |
which would make the actuarial present value of |
projected contributions and trust income plus assets |
equal to or exceed the actuarial present value of |
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projected benefits expected to be paid to current and |
future retirees and their dependents and survivors. |
The plan may consist of increases in employee, retiree, |
dependent, or survivor contribution levels, decreases |
in benefit levels, or other plan changes or any |
combination thereof. If the actuarial present value of |
projected benefits expected to be paid to current and |
future retirees and their dependents and survivors is |
less than the actuarial present value of projected |
contributions and trust income plus assets in excess of |
the reserve required by subsection (b)(3)(ii), then |
the report may provide a plan of decreases in employee, |
retiree, dependent, or survivor contribution levels, |
increases in benefit levels, or other plan changes, or |
any combination thereof, to the extent of the surplus. |
(iv) The Auditor General shall review the report |
and plan provided in subsection (b)(3)(iii) and issue a |
determination within 90 days after receiving the |
report and plan, with a copy of such determination |
provided to the General Assembly and the Regional |
Transportation Authority, as follows: |
(A) In the event of a projected shortfall, if |
the Auditor General determines that the |
assumptions stated in the report are not |
unreasonable in the aggregate and that the plan of |
increases in employee, retiree, dependent, or |
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survivor contribution levels, decreases in benefit |
levels, or other plan changes, or any combination |
thereof, to be implemented over a period of not |
more than 10 years from each valuation date, is |
reasonably projected to make the actuarial present |
value of projected contributions and trust income |
plus assets equal to or in excess of the actuarial |
present value of projected benefits expected to be |
paid to current and future retirees and their |
dependents and survivors, then the Board of |
Trustees shall implement the plan. If the Auditor |
General determines that the assumptions stated in |
the report are unreasonable in the aggregate, or |
that the plan of increases in employee, retiree, |
dependent, or survivor contribution levels, |
decreases in benefit levels, or other plan changes |
to be implemented over a period of not more than 10 |
years from each valuation date, is not reasonably |
projected to make the actuarial present value of |
projected contributions and trust income plus |
assets equal to or in excess of the actuarial |
present value of projected benefits expected to be |
paid to current and future retirees and their |
dependents and survivors, then the Board of |
Trustees shall not implement the plan, the Auditor |
General shall explain the basis for such |
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determination to the Board of Trustees, and the |
Auditor General may make recommendations as to an |
alternative report and plan. |
(B) In the event of a projected surplus, if the |
Auditor General determines that the assumptions |
stated in the report are not unreasonable in the |
aggregate and that the plan of decreases in |
employee, retiree, dependent, or survivor |
contribution levels, increases in benefit levels, |
or both, is not unreasonable in the aggregate, then |
the Board of Trustees shall implement the plan. If |
the Auditor General determines that the |
assumptions stated in the report are unreasonable |
in the aggregate, or that the plan of decreases in |
employee, retiree, dependent, or survivor |
contribution levels, increases in benefit levels, |
or both, is unreasonable in the aggregate, then the |
Board of Trustees shall not implement the plan, the |
Auditor General shall explain the basis for such |
determination to the Board of Trustees, and the |
Auditor General may make recommendations as to an |
alternative report and plan. |
(C) The Board of Trustees shall submit an |
alternative report and plan within 45 days after |
receiving a rejection determination by the Auditor |
General. A determination by the Auditor General on |
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any alternative report and plan submitted by the |
Board of Trustees shall be made within 90 days |
after receiving the alternative report and plan, |
and shall be accepted or rejected according to the |
requirements of this subsection (b)(3)(iv). The |
Board of Trustees shall continue to submit |
alternative reports and plans to the Auditor |
General, as necessary, until a favorable |
determination is made by the Auditor General.
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(4) For any retiree who first retires effective on or |
after January 18, 2008, to be eligible for retiree health |
care benefits upon retirement, the retiree must be at least |
55 years of age, retire with 10 or more years of continuous |
service and satisfy the preconditions established by |
Public Act 95-708 in addition to any rules or regulations |
promulgated by the Board of Trustees. Notwithstanding the |
foregoing, any retiree hired on or before September 5, 2001 |
who retires with 25 years or more of continuous service |
shall be eligible for retiree health care benefits upon |
retirement in accordance with any rules or regulations |
adopted by the Board of Trustees; provided he or she |
retires prior to the full execution of the successor |
collective bargaining agreement to the collective |
bargaining agreement that became effective January 1, 2007 |
between the Authority and the organizations representing |
the highest and second-highest number of Chicago Transit |
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Authority participants. This paragraph (4) shall not apply |
to a disability allowance.
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(5) Effective January 1, 2009, the aggregate amount of |
retiree, dependent and survivor contributions to the cost |
of their health care benefits shall not exceed more than |
45% of the total cost of such benefits. The Board of |
Trustees shall have the discretion to provide different |
contribution levels for retirees, dependents and survivors |
based on their years of service, level of coverage or |
Medicare eligibility, provided that the total contribution |
from all retirees, dependents, and survivors shall be not |
more than 45% of the total cost of such benefits. The term |
"total cost of such benefits" for purposes of this |
subsection shall be the total amount expended by the |
retiree health benefit program in the prior plan year, as |
calculated and certified in writing by the Retiree Health |
Care Trust's enrolled actuary to be appointed and paid for |
by the Board of Trustees.
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(6) Effective January 18, 2008, all employees of the |
Authority shall contribute to the Retiree Health Care Trust |
in an amount not less than 3% of compensation.
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(7) No earlier than January 1, 2009 and no later than |
July 1, 2009 as the Retiree Health Care Trust becomes |
solely responsible for providing health care benefits to |
eligible retirees and their dependents and survivors in |
accordance with subsection (b) of this Section 22-101B, the |
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Authority shall not have any obligation to provide health |
care to current or future retirees and their dependents or |
survivors. Employees, retirees, dependents, and survivors |
who are required to make contributions to the Retiree |
Health Care Trust shall make contributions at the level set |
by the Board of Trustees pursuant to the requirements of |
this Section 22-101B.
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(Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08; |
96-1254, eff. 7-23-10.)
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