Bill Text: IL HB0436 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Illinois Pension Code. With respect to the 5 State-funded Retirement Systems: requires each System to prepare and implement a Tier 3 plan by July 1, 2018 that aggregates State and employee contributions in individual participant accounts which are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the Tier 3 plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the Tier 3 plan. Makes related changes in the State Employees Group Insurance Act of 1971. In the Downstate Teachers, State Employees, and State Universities Articles, authorizes a person to elect not to participate or to terminate participation in those Systems. In the General Assembly and Judges Articles, authorizes a participant to terminate his or her participation in the System. In the Illinois Municipal Retirement Fund (IMRF), State Employees, State Universities, and Downstate Teachers Articles, for participants who first become participants on or after the effective date, prohibits (i) payments for unused sick or vacation time from being used to calculate pensionable salary and (ii) unused sick or vacation time from being used to establish service credit. In the Downstate Teachers Article, prohibits an employer from making employee contributions on behalf of an employee, except for the sole purpose of allowing an employee to make pre-tax contributions. Amends the Illinois Educational Labor Relations Act to prohibit collective bargaining over that prohibition. Effective immediately.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced) 2017-03-31 - Rule 19(a) / Re-referred to Rules Committee [HB0436 Detail]

Download: Illinois-2017-HB0436-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB0436

Introduced , by Rep. Jeanne M Ives

SYNOPSIS AS INTRODUCED:
See Index

Amends the Illinois Pension Code. With respect to the 5 State-funded Retirement Systems: requires each System to prepare and implement a Tier 3 plan by July 1, 2018 that aggregates State and employee contributions in individual participant accounts which are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the Tier 3 plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the Tier 3 plan. Makes related changes in the State Employees Group Insurance Act of 1971. In the Downstate Teachers, State Employees, and State Universities Articles, authorizes a person to elect not to participate or to terminate participation in those Systems. In the General Assembly and Judges Articles, authorizes a participant to terminate his or her participation in the System. In the Illinois Municipal Retirement Fund (IMRF), State Employees, State Universities, and Downstate Teachers Articles, for participants who first become participants on or after the effective date, prohibits (i) payments for unused sick or vacation time from being used to calculate pensionable salary and (ii) unused sick or vacation time from being used to establish service credit. In the Downstate Teachers Article, prohibits an employer from making employee contributions on behalf of an employee, except for the sole purpose of allowing an employee to make pre-tax contributions. Amends the Illinois Educational Labor Relations Act to prohibit collective bargaining over that prohibition. Effective immediately.
LRB100 05378 RPS 15389 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

HB0436LRB100 05378 RPS 15389 b
1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
6 (5 ILCS 375/3) (from Ch. 127, par. 523)
7 Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose of
11implementing specific programs providing benefits under this
12Act.
13 (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18 (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Article Articles 2 (including an
21employee who, in lieu of receiving an annuity under that
22Article, has retired under the Tier 3 plan established under
23Section 2-165.5 of that Article), 14 (including an employee who

HB0436- 2 -LRB100 05378 RPS 15389 b
1has elected to receive an alternative retirement cancellation
2payment under Section 14-108.5 of the Illinois Pension Code in
3lieu of an annuity or an employee who, in lieu of receiving an
4annuity under that Article, has retired under the Tier 3 plan
5established under Section 14-155.5 of that Article), or 15
6(including an employee who has retired under the optional
7retirement program established under Section 15-158.2 or the
8Tier 3 plan established under Section 15-155.5 of the Illinois
9Pension Code), paragraphs (2), (3), or (5) of Section 16-106
10(including an employee who, in lieu of receiving an annuity
11under that Article, has retired under the Tier 3 plan
12established under Section 16-205.5 of the Illinois Pension
13Code), or Article 18 (including an employee who, in lieu of
14receiving an annuity under that Article, has retired under the
15Tier 3 plan established under Section 18-121.5 of that Article)
16of the Illinois Pension Code; (2) any person who was receiving
17group insurance coverage under this Act as of March 31, 1978 by
18reason of his status as an annuitant, even though the annuity
19in relation to which such coverage was provided is a
20proportional annuity based on less than the minimum period of
21service required for a retirement annuity in the system
22involved; (3) any person not otherwise covered by this Act who
23has retired as a participating member under Article 2 of the
24Illinois Pension Code but is ineligible for the retirement
25annuity under Section 2-119 of the Illinois Pension Code; (4)
26the spouse of any person who is receiving a retirement annuity

HB0436- 3 -LRB100 05378 RPS 15389 b
1under Article 18 of the Illinois Pension Code and who is
2covered under a group health insurance program sponsored by a
3governmental employer other than the State of Illinois and who
4has irrevocably elected to waive his or her coverage under this
5Act and to have his or her spouse considered as the "annuitant"
6under this Act and not as a "dependent"; or (5) an employee who
7retires, or has retired, from a qualified position, as
8determined according to rules promulgated by the Director,
9under a qualified local government, a qualified rehabilitation
10facility, a qualified domestic violence shelter or service, or
11a qualified child advocacy center. (For definition of "retired
12employee", see (p) post).
13 (b-5) (Blank).
14 (b-6) (Blank).
15 (b-7) (Blank).
16 (c) "Carrier" means (1) an insurance company, a corporation
17organized under the Limited Health Service Organization Act or
18the Voluntary Health Services Plan Act, a partnership, or other
19nongovernmental organization, which is authorized to do group
20life or group health insurance business in Illinois, or (2) the
21State of Illinois as a self-insurer.
22 (d) "Compensation" means salary or wages payable on a
23regular payroll by the State Treasurer on a warrant of the
24State Comptroller out of any State, trust or federal fund, or
25by the Governor of the State through a disbursing officer of
26the State out of a trust or out of federal funds, or by any

HB0436- 4 -LRB100 05378 RPS 15389 b
1Department out of State, trust, federal or other funds held by
2the State Treasurer or the Department, to any person for
3personal services currently performed, and ordinary or
4accidental disability benefits under Articles 2, 14, 15
5(including ordinary or accidental disability benefits under
6the optional retirement program established under Section
715-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
8Article 18 of the Illinois Pension Code, for disability
9incurred after January 1, 1966, or benefits payable under the
10Workers' Compensation or Occupational Diseases Act or benefits
11payable under a sick pay plan established in accordance with
12Section 36 of the State Finance Act. "Compensation" also means
13salary or wages paid to an employee of any qualified local
14government, qualified rehabilitation facility, qualified
15domestic violence shelter or service, or qualified child
16advocacy center.
17 (e) "Commission" means the State Employees Group Insurance
18Advisory Commission authorized by this Act. Commencing July 1,
191984, "Commission" as used in this Act means the Commission on
20Government Forecasting and Accountability as established by
21the Legislative Commission Reorganization Act of 1984.
22 (f) "Contributory", when referred to as contributory
23coverage, shall mean optional coverages or benefits elected by
24the member toward the cost of which such member makes
25contribution, or which are funded in whole or in part through
26the acceptance of a reduction in earnings or the foregoing of

HB0436- 5 -LRB100 05378 RPS 15389 b
1an increase in earnings by an employee, as distinguished from
2noncontributory coverage or benefits which are paid entirely by
3the State of Illinois without reduction of the member's salary.
4 (g) "Department" means any department, institution, board,
5commission, officer, court or any agency of the State
6government receiving appropriations and having power to
7certify payrolls to the Comptroller authorizing payments of
8salary and wages against such appropriations as are made by the
9General Assembly from any State fund, or against trust funds
10held by the State Treasurer and includes boards of trustees of
11the retirement systems created by Articles 2, 14, 15, 16 and 18
12of the Illinois Pension Code. "Department" also includes the
13Illinois Comprehensive Health Insurance Board, the Board of
14Examiners established under the Illinois Public Accounting
15Act, and the Illinois Finance Authority.
16 (h) "Dependent", when the term is used in the context of
17the health and life plan, means a member's spouse and any child
18(1) from birth to age 26 including an adopted child, a child
19who lives with the member from the time of the filing of a
20petition for adoption until entry of an order of adoption, a
21stepchild or adjudicated child, or a child who lives with the
22member if such member is a court appointed guardian of the
23child or (2) age 19 or over who has a mental or physical
24disability from a cause originating prior to the age of 19 (age
2526 if enrolled as an adult child dependent). For the health
26plan only, the term "dependent" also includes (1) any person

HB0436- 6 -LRB100 05378 RPS 15389 b
1enrolled prior to the effective date of this Section who is
2dependent upon the member to the extent that the member may
3claim such person as a dependent for income tax deduction
4purposes and (2) any person who has received after June 30,
52000 an organ transplant and who is financially dependent upon
6the member and eligible to be claimed as a dependent for income
7tax purposes. A member requesting to cover any dependent must
8provide documentation as requested by the Department of Central
9Management Services and file with the Department any and all
10forms required by the Department.
11 (i) "Director" means the Director of the Illinois
12Department of Central Management Services.
13 (j) "Eligibility period" means the period of time a member
14has to elect enrollment in programs or to select benefits
15without regard to age, sex or health.
16 (k) "Employee" means and includes each officer or employee
17in the service of a department who (1) receives his
18compensation for service rendered to the department on a
19warrant issued pursuant to a payroll certified by a department
20or on a warrant or check issued and drawn by a department upon
21a trust, federal or other fund or on a warrant issued pursuant
22to a payroll certified by an elected or duly appointed officer
23of the State or who receives payment of the performance of
24personal services on a warrant issued pursuant to a payroll
25certified by a Department and drawn by the Comptroller upon the
26State Treasurer against appropriations made by the General

HB0436- 7 -LRB100 05378 RPS 15389 b
1Assembly from any fund or against trust funds held by the State
2Treasurer, and (2) is employed full-time or part-time in a
3position normally requiring actual performance of duty during
4not less than 1/2 of a normal work period, as established by
5the Director in cooperation with each department, except that
6persons elected by popular vote will be considered employees
7during the entire term for which they are elected regardless of
8hours devoted to the service of the State, and (3) except that
9"employee" does not include any person who is not eligible by
10reason of such person's employment to participate in one of the
11State retirement systems under Articles 2, 14, 15 (either the
12regular Article 15 system or the optional retirement program
13established under Section 15-158.2) or 18, or under paragraph
14(2), (3), or (5) of Section 16-106, of the Illinois Pension
15Code, but such term does include persons who are employed
16during the 6 month qualifying period under Article 14 of the
17Illinois Pension Code. Such term also includes any person who
18(1) after January 1, 1966, is receiving ordinary or accidental
19disability benefits under Articles 2, 14, 15 (including
20ordinary or accidental disability benefits under the optional
21retirement program established under Section 15-158.2),
22paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
23the Illinois Pension Code, for disability incurred after
24January 1, 1966, (2) receives total permanent or total
25temporary disability under the Workers' Compensation Act or
26Occupational Disease Act as a result of injuries sustained or

HB0436- 8 -LRB100 05378 RPS 15389 b
1illness contracted in the course of employment with the State
2of Illinois, or (3) is not otherwise covered under this Act and
3has retired as a participating member under Article 2 of the
4Illinois Pension Code but is ineligible for the retirement
5annuity under Section 2-119 of the Illinois Pension Code.
6However, a person who satisfies the criteria of the foregoing
7definition of "employee" except that such person is made
8ineligible to participate in the State Universities Retirement
9System by clause (4) of subsection (a) of Section 15-107 of the
10Illinois Pension Code is also an "employee" for the purposes of
11this Act. "Employee" also includes any person receiving or
12eligible for benefits under a sick pay plan established in
13accordance with Section 36 of the State Finance Act. "Employee"
14also includes (i) each officer or employee in the service of a
15qualified local government, including persons appointed as
16trustees of sanitary districts regardless of hours devoted to
17the service of the sanitary district, (ii) each employee in the
18service of a qualified rehabilitation facility, (iii) each
19full-time employee in the service of a qualified domestic
20violence shelter or service, and (iv) each full-time employee
21in the service of a qualified child advocacy center, as
22determined according to rules promulgated by the Director.
23 (l) "Member" means an employee, annuitant, retired
24employee or survivor. In the case of an annuitant or retired
25employee who first becomes an annuitant or retired employee on
26or after the effective date of this amendatory Act of the 97th

HB0436- 9 -LRB100 05378 RPS 15389 b
1General Assembly, the individual must meet the minimum vesting
2requirements of the applicable retirement system in order to be
3eligible for group insurance benefits under that system. In the
4case of a survivor who first becomes a survivor on or after the
5effective date of this amendatory Act of the 97th General
6Assembly, the deceased employee, annuitant, or retired
7employee upon whom the annuity is based must have been eligible
8to participate in the group insurance system under the
9applicable retirement system in order for the survivor to be
10eligible for group insurance benefits under that system.
11 (m) "Optional coverages or benefits" means those coverages
12or benefits available to the member on his or her voluntary
13election, and at his or her own expense.
14 (n) "Program" means the group life insurance, health
15benefits and other employee benefits designed and contracted
16for by the Director under this Act.
17 (o) "Health plan" means a health benefits program offered
18by the State of Illinois for persons eligible for the plan.
19 (p) "Retired employee" means any person who would be an
20annuitant as that term is defined herein but for the fact that
21such person retired prior to January 1, 1966. Such term also
22includes any person formerly employed by the University of
23Illinois in the Cooperative Extension Service who would be an
24annuitant but for the fact that such person was made ineligible
25to participate in the State Universities Retirement System by
26clause (4) of subsection (a) of Section 15-107 of the Illinois

HB0436- 10 -LRB100 05378 RPS 15389 b
1Pension Code.
2 (q) "Survivor" means a person receiving an annuity as a
3survivor of an employee or of an annuitant. "Survivor" also
4includes: (1) the surviving dependent of a person who satisfies
5the definition of "employee" except that such person is made
6ineligible to participate in the State Universities Retirement
7System by clause (4) of subsection (a) of Section 15-107 of the
8Illinois Pension Code; (2) the surviving dependent of any
9person formerly employed by the University of Illinois in the
10Cooperative Extension Service who would be an annuitant except
11for the fact that such person was made ineligible to
12participate in the State Universities Retirement System by
13clause (4) of subsection (a) of Section 15-107 of the Illinois
14Pension Code; and (3) the surviving dependent of a person who
15was an annuitant under this Act by virtue of receiving an
16alternative retirement cancellation payment under Section
1714-108.5 of the Illinois Pension Code.
18 (q-2) "SERS" means the State Employees' Retirement System
19of Illinois, created under Article 14 of the Illinois Pension
20Code.
21 (q-3) "SURS" means the State Universities Retirement
22System, created under Article 15 of the Illinois Pension Code.
23 (q-4) "TRS" means the Teachers' Retirement System of the
24State of Illinois, created under Article 16 of the Illinois
25Pension Code.
26 (q-5) (Blank).

HB0436- 11 -LRB100 05378 RPS 15389 b
1 (q-6) (Blank).
2 (q-7) (Blank).
3 (r) "Medical services" means the services provided within
4the scope of their licenses by practitioners in all categories
5licensed under the Medical Practice Act of 1987.
6 (s) "Unit of local government" means any county,
7municipality, township, school district (including a
8combination of school districts under the Intergovernmental
9Cooperation Act), special district or other unit, designated as
10a unit of local government by law, which exercises limited
11governmental powers or powers in respect to limited
12governmental subjects, any not-for-profit association with a
13membership that primarily includes townships and township
14officials, that has duties that include provision of research
15service, dissemination of information, and other acts for the
16purpose of improving township government, and that is funded
17wholly or partly in accordance with Section 85-15 of the
18Township Code; any not-for-profit corporation or association,
19with a membership consisting primarily of municipalities, that
20operates its own utility system, and provides research,
21training, dissemination of information, or other acts to
22promote cooperation between and among municipalities that
23provide utility services and for the advancement of the goals
24and purposes of its membership; the Southern Illinois
25Collegiate Common Market, which is a consortium of higher
26education institutions in Southern Illinois; the Illinois

HB0436- 12 -LRB100 05378 RPS 15389 b
1Association of Park Districts; and any hospital provider that
2is owned by a county that has 100 or fewer hospital beds and
3has not already joined the program. "Qualified local
4government" means a unit of local government approved by the
5Director and participating in a program created under
6subsection (i) of Section 10 of this Act.
7 (t) "Qualified rehabilitation facility" means any
8not-for-profit organization that is accredited by the
9Commission on Accreditation of Rehabilitation Facilities or
10certified by the Department of Human Services (as successor to
11the Department of Mental Health and Developmental
12Disabilities) to provide services to persons with disabilities
13and which receives funds from the State of Illinois for
14providing those services, approved by the Director and
15participating in a program created under subsection (j) of
16Section 10 of this Act.
17 (u) "Qualified domestic violence shelter or service" means
18any Illinois domestic violence shelter or service and its
19administrative offices funded by the Department of Human
20Services (as successor to the Illinois Department of Public
21Aid), approved by the Director and participating in a program
22created under subsection (k) of Section 10.
23 (v) "TRS benefit recipient" means a person who:
24 (1) is not a "member" as defined in this Section; and
25 (2) is receiving a monthly benefit or retirement
26 annuity under Article 16 of the Illinois Pension Code; and

HB0436- 13 -LRB100 05378 RPS 15389 b
1 (3) either (i) has at least 8 years of creditable
2 service under Article 16 of the Illinois Pension Code, or
3 (ii) was enrolled in the health insurance program offered
4 under that Article on January 1, 1996, or (iii) is the
5 survivor of a benefit recipient who had at least 8 years of
6 creditable service under Article 16 of the Illinois Pension
7 Code or was enrolled in the health insurance program
8 offered under that Article on the effective date of this
9 amendatory Act of 1995, or (iv) is a recipient or survivor
10 of a recipient of a disability benefit under Article 16 of
11 the Illinois Pension Code.
12 (w) "TRS dependent beneficiary" means a person who:
13 (1) is not a "member" or "dependent" as defined in this
14 Section; and
15 (2) is a TRS benefit recipient's: (A) spouse, (B)
16 dependent parent who is receiving at least half of his or
17 her support from the TRS benefit recipient, or (C) natural,
18 step, adjudicated, or adopted child who is (i) under age
19 26, (ii) was, on January 1, 1996, participating as a
20 dependent beneficiary in the health insurance program
21 offered under Article 16 of the Illinois Pension Code, or
22 (iii) age 19 or over who has a mental or physical
23 disability from a cause originating prior to the age of 19
24 (age 26 if enrolled as an adult child).
25 "TRS dependent beneficiary" does not include, as indicated
26under paragraph (2) of this subsection (w), a dependent of the

HB0436- 14 -LRB100 05378 RPS 15389 b
1survivor of a TRS benefit recipient who first becomes a
2dependent of a survivor of a TRS benefit recipient on or after
3the effective date of this amendatory Act of the 97th General
4Assembly unless that dependent would have been eligible for
5coverage as a dependent of the deceased TRS benefit recipient
6upon whom the survivor benefit is based.
7 (x) "Military leave" refers to individuals in basic
8training for reserves, special/advanced training, annual
9training, emergency call up, activation by the President of the
10United States, or any other training or duty in service to the
11United States Armed Forces.
12 (y) (Blank).
13 (z) "Community college benefit recipient" means a person
14who:
15 (1) is not a "member" as defined in this Section; and
16 (2) is receiving a monthly survivor's annuity or
17 retirement annuity under Article 15 of the Illinois Pension
18 Code; and
19 (3) either (i) was a full-time employee of a community
20 college district or an association of community college
21 boards created under the Public Community College Act
22 (other than an employee whose last employer under Article
23 15 of the Illinois Pension Code was a community college
24 district subject to Article VII of the Public Community
25 College Act) and was eligible to participate in a group
26 health benefit plan as an employee during the time of

HB0436- 15 -LRB100 05378 RPS 15389 b
1 employment with a community college district (other than a
2 community college district subject to Article VII of the
3 Public Community College Act) or an association of
4 community college boards, or (ii) is the survivor of a
5 person described in item (i).
6 (aa) "Community college dependent beneficiary" means a
7person who:
8 (1) is not a "member" or "dependent" as defined in this
9 Section; and
10 (2) is a community college benefit recipient's: (A)
11 spouse, (B) dependent parent who is receiving at least half
12 of his or her support from the community college benefit
13 recipient, or (C) natural, step, adjudicated, or adopted
14 child who is (i) under age 26, or (ii) age 19 or over and
15 has a mental or physical disability from a cause
16 originating prior to the age of 19 (age 26 if enrolled as
17 an adult child).
18 "Community college dependent beneficiary" does not
19include, as indicated under paragraph (2) of this subsection
20(aa), a dependent of the survivor of a community college
21benefit recipient who first becomes a dependent of a survivor
22of a community college benefit recipient on or after the
23effective date of this amendatory Act of the 97th General
24Assembly unless that dependent would have been eligible for
25coverage as a dependent of the deceased community college
26benefit recipient upon whom the survivor annuity is based.

HB0436- 16 -LRB100 05378 RPS 15389 b
1 (bb) "Qualified child advocacy center" means any Illinois
2child advocacy center and its administrative offices funded by
3the Department of Children and Family Services, as defined by
4the Children's Advocacy Center Act (55 ILCS 80/), approved by
5the Director and participating in a program created under
6subsection (n) of Section 10.
7(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
8 (5 ILCS 375/10) (from Ch. 127, par. 530)
9 Sec. 10. Contributions by the State and members.
10 (a) The State shall pay the cost of basic non-contributory
11group life insurance and, subject to member paid contributions
12set by the Department or required by this Section and except as
13provided in this Section, the basic program of group health
14benefits on each eligible member, except a member, not
15otherwise covered by this Act, who has retired as a
16participating member under Article 2 of the Illinois Pension
17Code but is ineligible for the retirement annuity under Section
182-119 of the Illinois Pension Code, and part of each eligible
19member's and retired member's premiums for health insurance
20coverage for enrolled dependents as provided by Section 9. The
21State shall pay the cost of the basic program of group health
22benefits only after benefits are reduced by the amount of
23benefits covered by Medicare for all members and dependents who
24are eligible for benefits under Social Security or the Railroad
25Retirement system or who had sufficient Medicare-covered

HB0436- 17 -LRB100 05378 RPS 15389 b
1government employment, except that such reduction in benefits
2shall apply only to those members and dependents who (1) first
3become eligible for such Medicare coverage on or after July 1,
41992; or (2) are Medicare-eligible members or dependents of a
5local government unit which began participation in the program
6on or after July 1, 1992; or (3) remain eligible for, but no
7longer receive Medicare coverage which they had been receiving
8on or after July 1, 1992. The Department may determine the
9aggregate level of the State's contribution on the basis of
10actual cost of medical services adjusted for age, sex or
11geographic or other demographic characteristics which affect
12the costs of such programs.
13 The cost of participation in the basic program of group
14health benefits for the dependent or survivor of a living or
15deceased retired employee who was formerly employed by the
16University of Illinois in the Cooperative Extension Service and
17would be an annuitant but for the fact that he or she was made
18ineligible to participate in the State Universities Retirement
19System by clause (4) of subsection (a) of Section 15-107 of the
20Illinois Pension Code shall not be greater than the cost of
21participation that would otherwise apply to that dependent or
22survivor if he or she were the dependent or survivor of an
23annuitant under the State Universities Retirement System.
24 (a-1) (Blank).
25 (a-2) (Blank).
26 (a-3) (Blank).

HB0436- 18 -LRB100 05378 RPS 15389 b
1 (a-4) (Blank).
2 (a-5) (Blank).
3 (a-6) (Blank).
4 (a-7) (Blank).
5 (a-8) Any annuitant, survivor, or retired employee may
6waive or terminate coverage in the program of group health
7benefits. Any such annuitant, survivor, or retired employee who
8has waived or terminated coverage may enroll or re-enroll in
9the program of group health benefits only during the annual
10benefit choice period, as determined by the Director; except
11that in the event of termination of coverage due to nonpayment
12of premiums, the annuitant, survivor, or retired employee may
13not re-enroll in the program.
14 (a-8.5) Beginning on the effective date of this amendatory
15Act of the 97th General Assembly, the Director of Central
16Management Services shall, on an annual basis, determine the
17amount that the State shall contribute toward the basic program
18of group health benefits on behalf of annuitants (including
19individuals who (i) participated in the General Assembly
20Retirement System, the State Employees' Retirement System of
21Illinois, the State Universities Retirement System, the
22Teachers' Retirement System of the State of Illinois, or the
23Judges Retirement System of Illinois and (ii) qualify as
24annuitants under subsection (b) of Section 3 of this Act),
25survivors (including individuals who (i) receive an annuity as
26a survivor of an individual who participated in the General

HB0436- 19 -LRB100 05378 RPS 15389 b
1Assembly Retirement System, the State Employees' Retirement
2System of Illinois, the State Universities Retirement System,
3the Teachers' Retirement System of the State of Illinois, or
4the Judges Retirement System of Illinois and (ii) qualify as
5survivors under subsection (q) of Section 3 of this Act), and
6retired employees (as defined in subsection (p) of Section 3 of
7this Act). The remainder of the cost of coverage for each
8annuitant, survivor, or retired employee, as determined by the
9Director of Central Management Services, shall be the
10responsibility of that annuitant, survivor, or retired
11employee.
12 Contributions required of annuitants, survivors, and
13retired employees shall be the same for all retirement systems
14and shall also be based on whether an individual has made an
15election under Section 15-135.1 of the Illinois Pension Code.
16Contributions may be based on annuitants', survivors', or
17retired employees' Medicare eligibility, but may not be based
18on Social Security eligibility.
19 (a-9) No later than May 1 of each calendar year, the
20Director of Central Management Services shall certify in
21writing to the Executive Secretary of the State Employees'
22Retirement System of Illinois the amounts of the Medicare
23supplement health care premiums and the amounts of the health
24care premiums for all other retirees who are not Medicare
25eligible.
26 A separate calculation of the premiums based upon the

HB0436- 20 -LRB100 05378 RPS 15389 b
1actual cost of each health care plan shall be so certified.
2 The Director of Central Management Services shall provide
3to the Executive Secretary of the State Employees' Retirement
4System of Illinois such information, statistics, and other data
5as he or she may require to review the premium amounts
6certified by the Director of Central Management Services.
7 The Department of Central Management Services, or any
8successor agency designated to procure healthcare contracts
9pursuant to this Act, is authorized to establish funds,
10separate accounts provided by any bank or banks as defined by
11the Illinois Banking Act, or separate accounts provided by any
12savings and loan association or associations as defined by the
13Illinois Savings and Loan Act of 1985 to be held by the
14Director, outside the State treasury, for the purpose of
15receiving the transfer of moneys from the Local Government
16Health Insurance Reserve Fund. The Department may promulgate
17rules further defining the methodology for the transfers. Any
18interest earned by moneys in the funds or accounts shall inure
19to the Local Government Health Insurance Reserve Fund. The
20transferred moneys, and interest accrued thereon, shall be used
21exclusively for transfers to administrative service
22organizations or their financial institutions for payments of
23claims to claimants and providers under the self-insurance
24health plan. The transferred moneys, and interest accrued
25thereon, shall not be used for any other purpose including, but
26not limited to, reimbursement of administration fees due the

HB0436- 21 -LRB100 05378 RPS 15389 b
1administrative service organization pursuant to its contract
2or contracts with the Department.
3 (a-10) For purposes of determining State contributions
4under this Section, service established under a Tier 3 plan
5under Article 2, 14, 15, 16, or 18 of the Illinois Pension Code
6shall be included in determining an employee's creditable
7service. Any credit terminated as part of a transfer of
8contributions to a Tier 3 plan under Article 2, 14, 15, 16, or
918 of the Illinois Pension Code shall also be included in
10determining an employee's creditable service.
11 (b) State employees who become eligible for this program on
12or after January 1, 1980 in positions normally requiring actual
13performance of duty not less than 1/2 of a normal work period
14but not equal to that of a normal work period, shall be given
15the option of participating in the available program. If the
16employee elects coverage, the State shall contribute on behalf
17of such employee to the cost of the employee's benefit and any
18applicable dependent supplement, that sum which bears the same
19percentage as that percentage of time the employee regularly
20works when compared to normal work period.
21 (c) The basic non-contributory coverage from the basic
22program of group health benefits shall be continued for each
23employee not in pay status or on active service by reason of
24(1) leave of absence due to illness or injury, (2) authorized
25educational leave of absence or sabbatical leave, or (3)
26military leave. This coverage shall continue until expiration

HB0436- 22 -LRB100 05378 RPS 15389 b
1of authorized leave and return to active service, but not to
2exceed 24 months for leaves under item (1) or (2). This
324-month limitation and the requirement of returning to active
4service shall not apply to persons receiving ordinary or
5accidental disability benefits or retirement benefits through
6the appropriate State retirement system or benefits under the
7Workers' Compensation or Occupational Disease Act.
8 (d) The basic group life insurance coverage shall continue,
9with full State contribution, where such person is (1) absent
10from active service by reason of disability arising from any
11cause other than self-inflicted, (2) on authorized educational
12leave of absence or sabbatical leave, or (3) on military leave.
13 (e) Where the person is in non-pay status for a period in
14excess of 30 days or on leave of absence, other than by reason
15of disability, educational or sabbatical leave, or military
16leave, such person may continue coverage only by making
17personal payment equal to the amount normally contributed by
18the State on such person's behalf. Such payments and coverage
19may be continued: (1) until such time as the person returns to
20a status eligible for coverage at State expense, but not to
21exceed 24 months or (2) until such person's employment or
22annuitant status with the State is terminated (exclusive of any
23additional service imposed pursuant to law).
24 (f) The Department shall establish by rule the extent to
25which other employee benefits will continue for persons in
26non-pay status or who are not in active service.

HB0436- 23 -LRB100 05378 RPS 15389 b
1 (g) The State shall not pay the cost of the basic
2non-contributory group life insurance, program of health
3benefits and other employee benefits for members who are
4survivors as defined by paragraphs (1) and (2) of subsection
5(q) of Section 3 of this Act. The costs of benefits for these
6survivors shall be paid by the survivors or by the University
7of Illinois Cooperative Extension Service, or any combination
8thereof. However, the State shall pay the amount of the
9reduction in the cost of participation, if any, resulting from
10the amendment to subsection (a) made by this amendatory Act of
11the 91st General Assembly.
12 (h) Those persons occupying positions with any department
13as a result of emergency appointments pursuant to Section 8b.8
14of the Personnel Code who are not considered employees under
15this Act shall be given the option of participating in the
16programs of group life insurance, health benefits and other
17employee benefits. Such persons electing coverage may
18participate only by making payment equal to the amount normally
19contributed by the State for similarly situated employees. Such
20amounts shall be determined by the Director. Such payments and
21coverage may be continued until such time as the person becomes
22an employee pursuant to this Act or such person's appointment
23is terminated.
24 (i) Any unit of local government within the State of
25Illinois may apply to the Director to have its employees,
26annuitants, and their dependents provided group health

HB0436- 24 -LRB100 05378 RPS 15389 b
1coverage under this Act on a non-insured basis. To participate,
2a unit of local government must agree to enroll all of its
3employees, who may select coverage under either the State group
4health benefits plan or a health maintenance organization that
5has contracted with the State to be available as a health care
6provider for employees as defined in this Act. A unit of local
7government must remit the entire cost of providing coverage
8under the State group health benefits plan or, for coverage
9under a health maintenance organization, an amount determined
10by the Director based on an analysis of the sex, age,
11geographic location, or other relevant demographic variables
12for its employees, except that the unit of local government
13shall not be required to enroll those of its employees who are
14covered spouses or dependents under this plan or another group
15policy or plan providing health benefits as long as (1) an
16appropriate official from the unit of local government attests
17that each employee not enrolled is a covered spouse or
18dependent under this plan or another group policy or plan, and
19(2) at least 50% of the employees are enrolled and the unit of
20local government remits the entire cost of providing coverage
21to those employees, except that a participating school district
22must have enrolled at least 50% of its full-time employees who
23have not waived coverage under the district's group health plan
24by participating in a component of the district's cafeteria
25plan. A participating school district is not required to enroll
26a full-time employee who has waived coverage under the

HB0436- 25 -LRB100 05378 RPS 15389 b
1district's health plan, provided that an appropriate official
2from the participating school district attests that the
3full-time employee has waived coverage by participating in a
4component of the district's cafeteria plan. For the purposes of
5this subsection, "participating school district" includes a
6unit of local government whose primary purpose is education as
7defined by the Department's rules.
8 Employees of a participating unit of local government who
9are not enrolled due to coverage under another group health
10policy or plan may enroll in the event of a qualifying change
11in status, special enrollment, special circumstance as defined
12by the Director, or during the annual Benefit Choice Period. A
13participating unit of local government may also elect to cover
14its annuitants. Dependent coverage shall be offered on an
15optional basis, with the costs paid by the unit of local
16government, its employees, or some combination of the two as
17determined by the unit of local government. The unit of local
18government shall be responsible for timely collection and
19transmission of dependent premiums.
20 The Director shall annually determine monthly rates of
21payment, subject to the following constraints:
22 (1) In the first year of coverage, the rates shall be
23 equal to the amount normally charged to State employees for
24 elected optional coverages or for enrolled dependents
25 coverages or other contributory coverages, or contributed
26 by the State for basic insurance coverages on behalf of its

HB0436- 26 -LRB100 05378 RPS 15389 b
1 employees, adjusted for differences between State
2 employees and employees of the local government in age,
3 sex, geographic location or other relevant demographic
4 variables, plus an amount sufficient to pay for the
5 additional administrative costs of providing coverage to
6 employees of the unit of local government and their
7 dependents.
8 (2) In subsequent years, a further adjustment shall be
9 made to reflect the actual prior years' claims experience
10 of the employees of the unit of local government.
11 In the case of coverage of local government employees under
12a health maintenance organization, the Director shall annually
13determine for each participating unit of local government the
14maximum monthly amount the unit may contribute toward that
15coverage, based on an analysis of (i) the age, sex, geographic
16location, and other relevant demographic variables of the
17unit's employees and (ii) the cost to cover those employees
18under the State group health benefits plan. The Director may
19similarly determine the maximum monthly amount each unit of
20local government may contribute toward coverage of its
21employees' dependents under a health maintenance organization.
22 Monthly payments by the unit of local government or its
23employees for group health benefits plan or health maintenance
24organization coverage shall be deposited in the Local
25Government Health Insurance Reserve Fund.
26 The Local Government Health Insurance Reserve Fund is

HB0436- 27 -LRB100 05378 RPS 15389 b
1hereby created as a nonappropriated trust fund to be held
2outside the State Treasury, with the State Treasurer as
3custodian. The Local Government Health Insurance Reserve Fund
4shall be a continuing fund not subject to fiscal year
5limitations. The Local Government Health Insurance Reserve
6Fund is not subject to administrative charges or charge-backs,
7including but not limited to those authorized under Section 8h
8of the State Finance Act. All revenues arising from the
9administration of the health benefits program established
10under this Section shall be deposited into the Local Government
11Health Insurance Reserve Fund. Any interest earned on moneys in
12the Local Government Health Insurance Reserve Fund shall be
13deposited into the Fund. All expenditures from this Fund shall
14be used for payments for health care benefits for local
15government and rehabilitation facility employees, annuitants,
16and dependents, and to reimburse the Department or its
17administrative service organization for all expenses incurred
18in the administration of benefits. No other State funds may be
19used for these purposes.
20 A local government employer's participation or desire to
21participate in a program created under this subsection shall
22not limit that employer's duty to bargain with the
23representative of any collective bargaining unit of its
24employees.
25 (j) Any rehabilitation facility within the State of
26Illinois may apply to the Director to have its employees,

HB0436- 28 -LRB100 05378 RPS 15389 b
1annuitants, and their eligible dependents provided group
2health coverage under this Act on a non-insured basis. To
3participate, a rehabilitation facility must agree to enroll all
4of its employees and remit the entire cost of providing such
5coverage for its employees, except that the rehabilitation
6facility shall not be required to enroll those of its employees
7who are covered spouses or dependents under this plan or
8another group policy or plan providing health benefits as long
9as (1) an appropriate official from the rehabilitation facility
10attests that each employee not enrolled is a covered spouse or
11dependent under this plan or another group policy or plan, and
12(2) at least 50% of the employees are enrolled and the
13rehabilitation facility remits the entire cost of providing
14coverage to those employees. Employees of a participating
15rehabilitation facility who are not enrolled due to coverage
16under another group health policy or plan may enroll in the
17event of a qualifying change in status, special enrollment,
18special circumstance as defined by the Director, or during the
19annual Benefit Choice Period. A participating rehabilitation
20facility may also elect to cover its annuitants. Dependent
21coverage shall be offered on an optional basis, with the costs
22paid by the rehabilitation facility, its employees, or some
23combination of the 2 as determined by the rehabilitation
24facility. The rehabilitation facility shall be responsible for
25timely collection and transmission of dependent premiums.
26 The Director shall annually determine quarterly rates of

HB0436- 29 -LRB100 05378 RPS 15389 b
1payment, subject to the following constraints:
2 (1) In the first year of coverage, the rates shall be
3 equal to the amount normally charged to State employees for
4 elected optional coverages or for enrolled dependents
5 coverages or other contributory coverages on behalf of its
6 employees, adjusted for differences between State
7 employees and employees of the rehabilitation facility in
8 age, sex, geographic location or other relevant
9 demographic variables, plus an amount sufficient to pay for
10 the additional administrative costs of providing coverage
11 to employees of the rehabilitation facility and their
12 dependents.
13 (2) In subsequent years, a further adjustment shall be
14 made to reflect the actual prior years' claims experience
15 of the employees of the rehabilitation facility.
16 Monthly payments by the rehabilitation facility or its
17employees for group health benefits shall be deposited in the
18Local Government Health Insurance Reserve Fund.
19 (k) Any domestic violence shelter or service within the
20State of Illinois may apply to the Director to have its
21employees, annuitants, and their dependents provided group
22health coverage under this Act on a non-insured basis. To
23participate, a domestic violence shelter or service must agree
24to enroll all of its employees and pay the entire cost of
25providing such coverage for its employees. The domestic
26violence shelter shall not be required to enroll those of its

HB0436- 30 -LRB100 05378 RPS 15389 b
1employees who are covered spouses or dependents under this plan
2or another group policy or plan providing health benefits as
3long as (1) an appropriate official from the domestic violence
4shelter attests that each employee not enrolled is a covered
5spouse or dependent under this plan or another group policy or
6plan and (2) at least 50% of the employees are enrolled and the
7domestic violence shelter remits the entire cost of providing
8coverage to those employees. Employees of a participating
9domestic violence shelter who are not enrolled due to coverage
10under another group health policy or plan may enroll in the
11event of a qualifying change in status, special enrollment, or
12special circumstance as defined by the Director or during the
13annual Benefit Choice Period. A participating domestic
14violence shelter may also elect to cover its annuitants.
15Dependent coverage shall be offered on an optional basis, with
16employees, or some combination of the 2 as determined by the
17domestic violence shelter or service. The domestic violence
18shelter or service shall be responsible for timely collection
19and transmission of dependent premiums.
20 The Director shall annually determine rates of payment,
21subject to the following constraints:
22 (1) In the first year of coverage, the rates shall be
23 equal to the amount normally charged to State employees for
24 elected optional coverages or for enrolled dependents
25 coverages or other contributory coverages on behalf of its
26 employees, adjusted for differences between State

HB0436- 31 -LRB100 05378 RPS 15389 b
1 employees and employees of the domestic violence shelter or
2 service in age, sex, geographic location or other relevant
3 demographic variables, plus an amount sufficient to pay for
4 the additional administrative costs of providing coverage
5 to employees of the domestic violence shelter or service
6 and their dependents.
7 (2) In subsequent years, a further adjustment shall be
8 made to reflect the actual prior years' claims experience
9 of the employees of the domestic violence shelter or
10 service.
11 Monthly payments by the domestic violence shelter or
12service or its employees for group health insurance shall be
13deposited in the Local Government Health Insurance Reserve
14Fund.
15 (l) A public community college or entity organized pursuant
16to the Public Community College Act may apply to the Director
17initially to have only annuitants not covered prior to July 1,
181992 by the district's health plan provided health coverage
19under this Act on a non-insured basis. The community college
20must execute a 2-year contract to participate in the Local
21Government Health Plan. Any annuitant may enroll in the event
22of a qualifying change in status, special enrollment, special
23circumstance as defined by the Director, or during the annual
24Benefit Choice Period.
25 The Director shall annually determine monthly rates of
26payment subject to the following constraints: for those

HB0436- 32 -LRB100 05378 RPS 15389 b
1community colleges with annuitants only enrolled, first year
2rates shall be equal to the average cost to cover claims for a
3State member adjusted for demographics, Medicare
4participation, and other factors; and in the second year, a
5further adjustment of rates shall be made to reflect the actual
6first year's claims experience of the covered annuitants.
7 (l-5) The provisions of subsection (l) become inoperative
8on July 1, 1999.
9 (m) The Director shall adopt any rules deemed necessary for
10implementation of this amendatory Act of 1989 (Public Act
1186-978).
12 (n) Any child advocacy center within the State of Illinois
13may apply to the Director to have its employees, annuitants,
14and their dependents provided group health coverage under this
15Act on a non-insured basis. To participate, a child advocacy
16center must agree to enroll all of its employees and pay the
17entire cost of providing coverage for its employees. The child
18advocacy center shall not be required to enroll those of its
19employees who are covered spouses or dependents under this plan
20or another group policy or plan providing health benefits as
21long as (1) an appropriate official from the child advocacy
22center attests that each employee not enrolled is a covered
23spouse or dependent under this plan or another group policy or
24plan and (2) at least 50% of the employees are enrolled and the
25child advocacy center remits the entire cost of providing
26coverage to those employees. Employees of a participating child

HB0436- 33 -LRB100 05378 RPS 15389 b
1advocacy center who are not enrolled due to coverage under
2another group health policy or plan may enroll in the event of
3a qualifying change in status, special enrollment, or special
4circumstance as defined by the Director or during the annual
5Benefit Choice Period. A participating child advocacy center
6may also elect to cover its annuitants. Dependent coverage
7shall be offered on an optional basis, with the costs paid by
8the child advocacy center, its employees, or some combination
9of the 2 as determined by the child advocacy center. The child
10advocacy center shall be responsible for timely collection and
11transmission of dependent premiums.
12 The Director shall annually determine rates of payment,
13subject to the following constraints:
14 (1) In the first year of coverage, the rates shall be
15 equal to the amount normally charged to State employees for
16 elected optional coverages or for enrolled dependents
17 coverages or other contributory coverages on behalf of its
18 employees, adjusted for differences between State
19 employees and employees of the child advocacy center in
20 age, sex, geographic location, or other relevant
21 demographic variables, plus an amount sufficient to pay for
22 the additional administrative costs of providing coverage
23 to employees of the child advocacy center and their
24 dependents.
25 (2) In subsequent years, a further adjustment shall be
26 made to reflect the actual prior years' claims experience

HB0436- 34 -LRB100 05378 RPS 15389 b
1 of the employees of the child advocacy center.
2 Monthly payments by the child advocacy center or its
3employees for group health insurance shall be deposited into
4the Local Government Health Insurance Reserve Fund.
5(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
6 Section 10. The Illinois Pension Code is amended by
7changing Sections 1-160, 2-117, 2-162, 7-114, 7-116, 7-139,
814-103.05, 14-103.10, 14-104.3, 14-106, 14-152.1, 15-108.1,
915-108.2, 15-112, 15-113.4, 15-134, 15-198, 16-123, 16-127,
1016-217, 16-152.1, 16-203, 18-120, 18-124, 18-125, 18-125.1,
1118-127, 18-128.01, 18-133, 18-169, 20-121, 20-123, 20-124, and
1220-125 and by adding Sections 2-105.3, 2-165.5, 14-103.41,
1314-103.42, 14-103.43, 14-155.5, 15-108.3, 15-200.5, 16-106.40,
1416-106.41, 16-106.42, 16-205.5, 18-110.1, 18-110.2, 18-110.3,
15and 18-121.5 as follows:
16 (40 ILCS 5/1-160)
17 (Text of Section WITHOUT the changes made by P.A. 98-641,
18which has been held unconstitutional)
19 Sec. 1-160. Provisions applicable to new hires.
20 (a) The provisions of this Section apply to a person who,
21on or after January 1, 2011, first becomes a member or a
22participant under any reciprocal retirement system or pension
23fund established under this Code, other than a retirement
24system or pension fund established under Article 2, 3, 4, 5, 6,

HB0436- 35 -LRB100 05378 RPS 15389 b
115 or 18 of this Code, notwithstanding any other provision of
2this Code to the contrary, but do not apply to any self-managed
3plan established under this Code, to any person with respect to
4service as a sheriff's law enforcement employee under Article
57, or to any participant of the retirement plan established
6under Section 22-101. Notwithstanding anything to the contrary
7in this Section, for purposes of this Section, a person who
8participated in a retirement system under Article 15 prior to
9January 1, 2011 shall be deemed a person who first became a
10member or participant prior to January 1, 2011 under any
11retirement system or pension fund subject to this Section. The
12changes made to this Section by Public Act 98-596 this
13amendatory Act of the 98th General Assembly are a clarification
14of existing law and are intended to be retroactive to January
151, 2011 (the effective date of Public Act 96-889),
16notwithstanding the provisions of Section 1-103.1 of this Code.
17 The provisions of this Section do not apply to service
18under a Tier 3 plan established under Article 2, 14, 15, 16, or
1918 of this Code.
20 (b) "Final average salary" means the average monthly (or
21annual) salary obtained by dividing the total salary or
22earnings calculated under the Article applicable to the member
23or participant during the 96 consecutive months (or 8
24consecutive years) of service within the last 120 months (or 10
25years) of service in which the total salary or earnings
26calculated under the applicable Article was the highest by the

HB0436- 36 -LRB100 05378 RPS 15389 b
1number of months (or years) of service in that period. For the
2purposes of a person who first becomes a member or participant
3of any retirement system or pension fund to which this Section
4applies on or after January 1, 2011, in this Code, "final
5average salary" shall be substituted for the following:
6 (1) In Article 7 (except for service as sheriff's law
7 enforcement employees), "final rate of earnings".
8 (2) In Articles 8, 9, 10, 11, and 12, "highest average
9 annual salary for any 4 consecutive years within the last
10 10 years of service immediately preceding the date of
11 withdrawal".
12 (3) In Article 13, "average final salary".
13 (4) In Article 14, "final average compensation".
14 (5) In Article 17, "average salary".
15 (6) In Section 22-207, "wages or salary received by him
16 at the date of retirement or discharge".
17 (b-5) Beginning on January 1, 2011, for all purposes under
18this Code (including without limitation the calculation of
19benefits and employee contributions), the annual earnings,
20salary, or wages (based on the plan year) of a member or
21participant to whom this Section applies shall not exceed
22$106,800; however, that amount shall annually thereafter be
23increased by the lesser of (i) 3% of that amount, including all
24previous adjustments, or (ii) one-half the annual unadjusted
25percentage increase (but not less than zero) in the consumer
26price index-u for the 12 months ending with the September

HB0436- 37 -LRB100 05378 RPS 15389 b
1preceding each November 1, including all previous adjustments.
2 For the purposes of this Section, "consumer price index-u"
3means the index published by the Bureau of Labor Statistics of
4the United States Department of Labor that measures the average
5change in prices of goods and services purchased by all urban
6consumers, United States city average, all items, 1982-84 =
7100. The new amount resulting from each annual adjustment shall
8be determined by the Public Pension Division of the Department
9of Insurance and made available to the boards of the retirement
10systems and pension funds by November 1 of each year.
11 (c) A member or participant is entitled to a retirement
12annuity upon written application if he or she has attained age
1367 (beginning January 1, 2015, age 65 with respect to service
14under Article 12 of this Code that is subject to this Section)
15and has at least 10 years of service credit and is otherwise
16eligible under the requirements of the applicable Article.
17 A member or participant who has attained age 62 (beginning
18January 1, 2015, age 60 with respect to service under Article
1912 of this Code that is subject to this Section) and has at
20least 10 years of service credit and is otherwise eligible
21under the requirements of the applicable Article may elect to
22receive the lower retirement annuity provided in subsection (d)
23of this Section.
24 (d) The retirement annuity of a member or participant who
25is retiring after attaining age 62 (beginning January 1, 2015,
26age 60 with respect to service under Article 12 of this Code

HB0436- 38 -LRB100 05378 RPS 15389 b
1that is subject to this Section) with at least 10 years of
2service credit shall be reduced by one-half of 1% for each full
3month that the member's age is under age 67 (beginning January
41, 2015, age 65 with respect to service under Article 12 of
5this Code that is subject to this Section).
6 (e) Any retirement annuity or supplemental annuity shall be
7subject to annual increases on the January 1 occurring either
8on or after the attainment of age 67 (beginning January 1,
92015, age 65 with respect to service under Article 12 of this
10Code that is subject to this Section) or the first anniversary
11of the annuity start date, whichever is later. Each annual
12increase shall be calculated at 3% or one-half the annual
13unadjusted percentage increase (but not less than zero) in the
14consumer price index-u for the 12 months ending with the
15September preceding each November 1, whichever is less, of the
16originally granted retirement annuity. If the annual
17unadjusted percentage change in the consumer price index-u for
18the 12 months ending with the September preceding each November
191 is zero or there is a decrease, then the annuity shall not be
20increased.
21 (f) The initial survivor's or widow's annuity of an
22otherwise eligible survivor or widow of a retired member or
23participant who first became a member or participant on or
24after January 1, 2011 shall be in the amount of 66 2/3% of the
25retired member's or participant's retirement annuity at the
26date of death. In the case of the death of a member or

HB0436- 39 -LRB100 05378 RPS 15389 b
1participant who has not retired and who first became a member
2or participant on or after January 1, 2011, eligibility for a
3survivor's or widow's annuity shall be determined by the
4applicable Article of this Code. The initial benefit shall be
566 2/3% of the earned annuity without a reduction due to age. A
6child's annuity of an otherwise eligible child shall be in the
7amount prescribed under each Article if applicable. Any
8survivor's or widow's annuity shall be increased (1) on each
9January 1 occurring on or after the commencement of the annuity
10if the deceased member died while receiving a retirement
11annuity or (2) in other cases, on each January 1 occurring
12after the first anniversary of the commencement of the annuity.
13Each annual increase shall be calculated at 3% or one-half the
14annual unadjusted percentage increase (but not less than zero)
15in the consumer price index-u for the 12 months ending with the
16September preceding each November 1, whichever is less, of the
17originally granted survivor's annuity. If the annual
18unadjusted percentage change in the consumer price index-u for
19the 12 months ending with the September preceding each November
201 is zero or there is a decrease, then the annuity shall not be
21increased.
22 (g) The benefits in Section 14-110 apply only if the person
23is a State policeman, a fire fighter in the fire protection
24service of a department, or a security employee of the
25Department of Corrections or the Department of Juvenile
26Justice, as those terms are defined in subsection (b) of

HB0436- 40 -LRB100 05378 RPS 15389 b
1Section 14-110. A person who meets the requirements of this
2Section is entitled to an annuity calculated under the
3provisions of Section 14-110, in lieu of the regular or minimum
4retirement annuity, only if the person has withdrawn from
5service with not less than 20 years of eligible creditable
6service and has attained age 60, regardless of whether the
7attainment of age 60 occurs while the person is still in
8service.
9 (h) If a person who first becomes a member or a participant
10of a retirement system or pension fund subject to this Section
11on or after January 1, 2011 is receiving a retirement annuity
12or retirement pension under that system or fund and becomes a
13member or participant under any other system or fund created by
14this Code and is employed on a full-time basis, except for
15those members or participants exempted from the provisions of
16this Section under subsection (a) of this Section, then the
17person's retirement annuity or retirement pension under that
18system or fund shall be suspended during that employment. Upon
19termination of that employment, the person's retirement
20annuity or retirement pension payments shall resume and be
21recalculated if recalculation is provided for under the
22applicable Article of this Code.
23 If a person who first becomes a member of a retirement
24system or pension fund subject to this Section on or after
25January 1, 2012 and is receiving a retirement annuity or
26retirement pension under that system or fund and accepts on a

HB0436- 41 -LRB100 05378 RPS 15389 b
1contractual basis a position to provide services to a
2governmental entity from which he or she has retired, then that
3person's annuity or retirement pension earned as an active
4employee of the employer shall be suspended during that
5contractual service. A person receiving an annuity or
6retirement pension under this Code shall notify the pension
7fund or retirement system from which he or she is receiving an
8annuity or retirement pension, as well as his or her
9contractual employer, of his or her retirement status before
10accepting contractual employment. A person who fails to submit
11such notification shall be guilty of a Class A misdemeanor and
12required to pay a fine of $1,000. Upon termination of that
13contractual employment, the person's retirement annuity or
14retirement pension payments shall resume and, if appropriate,
15be recalculated under the applicable provisions of this Code.
16 (i) (Blank).
17 (j) In the case of a conflict between the provisions of
18this Section and any other provision of this Code, the
19provisions of this Section shall control.
20(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
21eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
22 (40 ILCS 5/2-105.3 new)
23 Sec. 2-105.3. Tier 1 participant; Tier 2 participant; Tier
243 participant.
25 "Tier 1 participant": A participant who first became a

HB0436- 42 -LRB100 05378 RPS 15389 b
1participant before January 1, 2011.
2 In the case of a Tier 1 participant who elects to
3participate in the Tier 3 plan under Section 2-165.5 of this
4Code, that participant shall be deemed a Tier 1 participant
5only with respect to service performed or established before
6the effective date of that election.
7 "Tier 2 participant": A participant who first became a
8participant on or after January 1, 2011.
9 In the case of a Tier 2 participant who elects to
10participate in the Tier 3 plan under Section 2-165.5 of this
11Code, that Tier 2 member shall be deemed a Tier 2 member only
12with respect to service performed or established before the
13effective date of that election.
14 "Tier 3 participant": A Tier 1 or Tier 2 participant who
15elects to participate in the Tier 3 plan under Section 2-165.5
16of this Code, but only with respect to service performed on or
17after the effective date of that election.
18 (40 ILCS 5/2-117) (from Ch. 108 1/2, par. 2-117)
19 Sec. 2-117. Participants - Election not to participate.
20 (a) Except as provided in subsection (c), every Every
21person who was a member on November 1, 1947, or in military
22service on such date, is subject to the provisions of this
23system beginning upon such date, unless prior to such date he
24or she filed with the board a written notice of election not to
25participate.

HB0436- 43 -LRB100 05378 RPS 15389 b
1 Every person who becomes a member after November 1, 1947,
2and who is then not a participant becomes a participant
3beginning upon the date of becoming a member unless, within 24
4months from that date, he or she has filed with the board a
5written notice of election not to participate.
6 (b) A member who has filed notice of an election not to
7participate (and a former member who has not yet begun to
8receive a retirement annuity under this Article) may become a
9participant with respect to the period for which the member
10elected not to participate upon filing with the board, before
11April 1, 1993, a written rescission of the election not to
12participate. Upon contributing an amount equal to the
13contributions he or she would have made as a participant from
14November 1, 1947, or the date of becoming a member, whichever
15is later, to the date of becoming a participant, with interest
16at the rate of 4% per annum until the contributions are paid,
17the participant shall receive credit for service as a member
18prior to the date of the rescission, both before and after
19November 1, 1947. The required contributions shall be made
20before commencement of the retirement annuity; otherwise no
21credit for service prior to the date of participation shall be
22granted.
23 (c) Notwithstanding any other provision of this Article, an
24active participant may terminate his or her participation in
25this System (including active participation in the Tier 3 plan,
26if applicable) by notifying the System in writing. An active

HB0436- 44 -LRB100 05378 RPS 15389 b
1participant terminating participation in this System under
2this subsection shall be entitled to a refund of his or her
3contributions (other than contributions to the Tier 3 plan
4under Section 2-165.5) minus the benefits received prior to the
5termination of participation.
6(Source: P.A. 86-273; 87-1265.)
7 (40 ILCS 5/2-162)
8 (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10 Sec. 2-162. Application and expiration of new benefit
11increases.
12 (a) As used in this Section, "new benefit increase" means
13an increase in the amount of any benefit provided under this
14Article, or an expansion of the conditions of eligibility for
15any benefit under this Article, that results from an amendment
16to this Code that takes effect after the effective date of this
17amendatory Act of the 94th General Assembly. "New benefit
18increase", however, does not include any benefit increase
19resulting from the changes made to this Article by this
20amendatory Act of the 100th General Assembly.
21 (b) Notwithstanding any other provision of this Code or any
22subsequent amendment to this Code, every new benefit increase
23is subject to this Section and shall be deemed to be granted
24only in conformance with and contingent upon compliance with
25the provisions of this Section.

HB0436- 45 -LRB100 05378 RPS 15389 b
1 (c) The Public Act enacting a new benefit increase must
2identify and provide for payment to the System of additional
3funding at least sufficient to fund the resulting annual
4increase in cost to the System as it accrues.
5 Every new benefit increase is contingent upon the General
6Assembly providing the additional funding required under this
7subsection. The Commission on Government Forecasting and
8Accountability shall analyze whether adequate additional
9funding has been provided for the new benefit increase and
10shall report its analysis to the Public Pension Division of the
11Department of Financial and Professional Regulation. A new
12benefit increase created by a Public Act that does not include
13the additional funding required under this subsection is null
14and void. If the Public Pension Division determines that the
15additional funding provided for a new benefit increase under
16this subsection is or has become inadequate, it may so certify
17to the Governor and the State Comptroller and, in the absence
18of corrective action by the General Assembly, the new benefit
19increase shall expire at the end of the fiscal year in which
20the certification is made.
21 (d) Every new benefit increase shall expire 5 years after
22its effective date or on such earlier date as may be specified
23in the language enacting the new benefit increase or provided
24under subsection (c). This does not prevent the General
25Assembly from extending or re-creating a new benefit increase
26by law.

HB0436- 46 -LRB100 05378 RPS 15389 b
1 (e) Except as otherwise provided in the language creating
2the new benefit increase, a new benefit increase that expires
3under this Section continues to apply to persons who applied
4and qualified for the affected benefit while the new benefit
5increase was in effect and to the affected beneficiaries and
6alternate payees of such persons, but does not apply to any
7other person, including without limitation a person who
8continues in service after the expiration date and did not
9apply and qualify for the affected benefit while the new
10benefit increase was in effect.
11(Source: P.A. 94-4, eff. 6-1-05.)
12 (40 ILCS 5/2-165.5 new)
13 Sec. 2-165.5. Tier 3 plan.
14 (a) By July 1, 2018, the System shall prepare and implement
15a Tier 3 plan. The Tier 3 plan developed under this Section
16shall be a plan that aggregates State and employee
17contributions in individual participant accounts which, after
18meeting any other requirements, are used for payouts after
19retirement in accordance with this Section and any other
20applicable laws.
21 As used in this Section, "defined benefit plan" means the
22retirement plan available under this Article to Tier 1 or Tier
232 participants who have not made the election authorized under
24this Section.
25 (1) A participant in the Tier 3 plan shall pay employee

HB0436- 47 -LRB100 05378 RPS 15389 b
1 contributions at a rate determined by the participant, but
2 not less than 3% of salary and not more than a percentage
3 of salary determined by the Board in accordance with the
4 requirements of State and federal law.
5 (2) State contributions shall be paid into the accounts
6 of all participants in the Tier 3 plan at a uniform rate,
7 expressed as a percentage of salary and determined for each
8 year. This rate shall be no higher than 7.6% of salary and
9 shall be no lower than 3% of salary. The State shall adjust
10 this rate annually.
11 (3) The Tier 3 plan shall require 5 years of
12 participation in the Tier 3 plan before vesting in State
13 contributions. If the participant fails to vest in them,
14 the State contributions, and the earnings thereon, shall be
15 forfeited.
16 (4) The Tier 3 plan shall provide a variety of options
17 for investments. These options shall include investments
18 handled by the Illinois State Board of Investment as well
19 as private sector investment options.
20 (5) The Tier 3 plan shall provide a variety of options
21 for payouts to participants in the Tier 3 plan who are no
22 longer active in the System and their survivors.
23 (6) To the extent authorized under federal law and as
24 authorized by the System, the plan shall allow former
25 participants in the plan to transfer or roll over employee
26 and vested State contributions, and the earnings thereon,

HB0436- 48 -LRB100 05378 RPS 15389 b
1 from the Tier 3 plan into other qualified retirement plans.
2 (7) The System shall reduce the employee contributions
3 credited to the participant's Tier 3 plan account by an
4 amount determined by the System to cover the cost of
5 offering these benefits and any applicable administrative
6 fees.
7 (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
8participant of this System may elect, in writing, to cease
9accruing benefits in the defined benefit plan and begin
10accruing benefits for future service in the Tier 3 plan. The
11election to participate in the Tier 3 plan is voluntary and
12irrevocable.
13 (1) Service credit under the Tier 3 plan may be used
14 for determining retirement eligibility under the defined
15 benefit plan.
16 (2) The System shall make a good faith effort to
17 contact all active Tier 1 and Tier 2 participants who are
18 eligible to participate in the Tier 3 plan. The System
19 shall mail information describing the option to join the
20 Tier 3 plan to each of these employees to his or her last
21 known address on file with the System. If the employee is
22 not responsive to other means of contact, it is sufficient
23 for the System to publish the details of the option on its
24 website.
25 (3) Upon request for further information describing
26 the option, the System shall provide employees with

HB0436- 49 -LRB100 05378 RPS 15389 b
1 information from the System before exercising the option to
2 join the plan, including information on the impact to their
3 benefits and service. The individual consultation shall
4 include projections of the participant's defined benefits
5 at retirement or earlier termination of service and the
6 value of the participant's account at retirement or earlier
7 termination of service. The System shall not provide advice
8 or counseling with respect to whether the employee should
9 exercise the option. The System shall inform Tier 1 and
10 Tier 2 participants who are eligible to participate in the
11 Tier 3 plan that they may also wish to obtain information
12 and counsel relating to their option from any other
13 available source, including but not limited to private
14 counsel and financial advisors.
15 (b-5) A Tier 1 or Tier 2 participant who elects to
16participate in the Tier 3 plan may irrevocably elect to
17terminate all participation in the defined benefit plan. Upon
18that election, the System shall transfer to the participant's
19individual account an amount equal to the amount of
20contribution refund that the participant would be eligible to
21receive if the member terminated employment on that date and
22elected a refund of contributions, including the prescribed
23rate of interest for the respective years. The System shall
24make the transfer as a tax free transfer in accordance with
25Internal Revenue Service guidelines, for purposes of funding
26the amount credited to the participant's individual account.

HB0436- 50 -LRB100 05378 RPS 15389 b
1 (c) In no event shall the System, its staff, its authorized
2representatives, or the Board be liable for any information
3given to an employee under this Section. The System may
4coordinate with the Illinois Department of Central Management
5Services and other retirement systems administering a Tier 3
6plan in accordance with this amendatory Act of the 100th
7General Assembly to provide information concerning the impact
8of the Tier 3 plan set forth in this Section.
9 (d) Notwithstanding any other provision of this Section, no
10person shall begin participating in the Tier 3 plan until it
11has attained qualified plan status and received all necessary
12approvals from the U.S. Internal Revenue Service.
13 (e) The System shall report on its progress under this
14Section, including the available details of the Tier 3 plan and
15the System's plans for informing eligible Tier 1 and Tier 2
16participants about the plan, to the Governor and the General
17Assembly on or before January 15, 2018.
18 (f) The Illinois State Board of Investment shall be the
19plan sponsor for the Tier 3 plan established under this
20Section.
21 (g) The intent of this amendatory Act of the 100th General
22Assembly is to ensure that the State's normal cost of
23participation in the Tier 3 plan is similar, and if possible
24equal, to the State's normal cost of participation in the
25defined benefit plan, unless a lower State's normal cost is
26necessary to ensure cost neutrality.

HB0436- 51 -LRB100 05378 RPS 15389 b
1 (40 ILCS 5/7-114) (from Ch. 108 1/2, par. 7-114)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 7-114. Earnings. "Earnings":
5 (a) An amount to be determined by the board, equal to the
6sum of:
7 1. The total amount of money paid to an employee for
8 personal services or official duties as an employee (except
9 those employed as independent contractors) paid out of the
10 general fund, or out of any special funds controlled by the
11 municipality, or by any instrumentality thereof, or
12 participating instrumentality, including compensation,
13 fees, allowances, or other emolument paid for official
14 duties (but not including automobile maintenance, travel
15 expense, or reimbursements for expenditures incurred in
16 the performance of duties or, in the case of a person who
17 first becomes a participant on or after the effective date
18 of this amendatory Act of the 100th General Assembly,
19 payments for unused sick or vacation time) and, for fee
20 offices, the fees or earnings of the offices to the extent
21 such fees are paid out of funds controlled by the
22 municipality, or instrumentality or participating
23 instrumentality; and
24 2. The money value, as determined by rules prescribed
25 by the governing body of the municipality, or

HB0436- 52 -LRB100 05378 RPS 15389 b
1 instrumentality thereof, of any board, lodging, fuel,
2 laundry, and other allowances provided an employee in lieu
3 of money.
4 (b) For purposes of determining benefits payable under this
5fund payments to a person who is engaged in an independently
6established trade, occupation, profession or business and who
7is paid for his service on a basis other than a monthly or
8other regular salary, are not earnings.
9 (c) If a disabled participating employee is eligible to
10receive Workers' Compensation for an accidental injury and the
11participating municipality or instrumentality which employed
12the participating employee when injured continues to pay the
13participating employee regular salary or other compensation or
14pays the employee an amount in excess of the Workers'
15Compensation amount, then earnings shall be deemed to be the
16total payments, including an amount equal to the Workers'
17Compensation payments. These payments shall be subject to
18employee contributions and allocated as if paid to the
19participating employee when the regular payroll amounts would
20have been paid if the participating employee had continued
21working, and creditable service shall be awarded for this
22period.
23 (d) If an elected official who is a participating employee
24becomes disabled but does not resign and is not removed from
25office, then earnings shall include all salary payments made
26for the remainder of that term of office and the official shall

HB0436- 53 -LRB100 05378 RPS 15389 b
1be awarded creditable service for the term of office.
2 (e) If a participating employee is paid pursuant to "An Act
3to provide for the continuation of compensation for law
4enforcement officers, correctional officers and firemen who
5suffer disabling injury in the line of duty", approved
6September 6, 1973, as amended, the payments shall be deemed
7earnings, and the participating employee shall be awarded
8creditable service for this period.
9 (f) Additional compensation received by a person while
10serving as a supervisor of assessments, assessor, deputy
11assessor or member of a board of review from the State of
12Illinois pursuant to Section 4-10 or 4-15 of the Property Tax
13Code shall not be earnings for purposes of this Article and
14shall not be included in the contribution formula or
15calculation of benefits for such person pursuant to this
16Article.
17(Source: P.A. 87-740; 88-670, eff. 12-2-94.)
18 (40 ILCS 5/7-116) (from Ch. 108 1/2, par. 7-116)
19 (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21 Sec. 7-116. "Final rate of earnings":
22 (a) For retirement and survivor annuities, the monthly
23earnings obtained by dividing the total earnings received by
24the employee during the period of either (1) the 48 consecutive
25months of service within the last 120 months of service in

HB0436- 54 -LRB100 05378 RPS 15389 b
1which his total earnings were the highest or (2) the employee's
2total period of service, by the number of months of service in
3such period.
4 (b) For death benefits, the higher of the rate determined
5under paragraph (a) of this Section or total earnings received
6in the last 12 months of service divided by twelve. If the
7deceased employee has less than 12 months of service, the
8monthly final rate shall be the monthly rate of pay the
9employee was receiving when he began service.
10 (c) For disability benefits, the total earnings of a
11participating employee in the last 12 calendar months of
12service prior to the date he becomes disabled divided by 12.
13 (d) In computing the final rate of earnings: (1) the
14earnings rate for all periods of prior service shall be
15considered equal to the average earnings rate for the last 3
16calendar years of prior service for which creditable service is
17received under Section 7-139 or, if there is less than 3 years
18of creditable prior service, the average for the total prior
19service period for which creditable service is received under
20Section 7-139; (2) for out of state service and authorized
21leave, the earnings rate shall be the rate upon which service
22credits are granted; (3) periods of military leave shall not be
23considered; (4) the earnings rate for all periods of disability
24shall be considered equal to the rate of earnings upon which
25the employee's disability benefits are computed for such
26periods; (5) the earnings to be considered for each of the

HB0436- 55 -LRB100 05378 RPS 15389 b
1final three months of the final earnings period for persons who
2first became participants before January 1, 2012 and the
3earnings to be considered for each of the final 24 months for
4participants who first become participants on or after January
51, 2012 shall not exceed 125% of the highest earnings of any
6other month in the final earnings period; and (6) the annual
7amount of final rate of earnings shall be the monthly amount
8multiplied by the number of months of service normally required
9by the position in a year; and (7) in the case of a person who
10first becomes a participant on or after the effective date of
11this amendatory Act of the 100th General Assembly, payments for
12unused sick or vacation time shall not be considered.
13(Source: P.A. 97-609, eff. 1-1-12.)
14 (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
15 (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17 Sec. 7-139. Credits and creditable service to employees.
18 (a) Each participating employee shall be granted credits
19and creditable service, for purposes of determining the amount
20of any annuity or benefit to which he or a beneficiary is
21entitled, as follows:
22 1. For prior service: Each participating employee who
23 is an employee of a participating municipality or
24 participating instrumentality on the effective date shall
25 be granted creditable service, but no credits under

HB0436- 56 -LRB100 05378 RPS 15389 b
1 paragraph 2 of this subsection (a), for periods of prior
2 service for which credit has not been received under any
3 other pension fund or retirement system established under
4 this Code, as follows:
5 If the effective date of participation for the
6 participating municipality or participating
7 instrumentality is on or before January 1, 1998, creditable
8 service shall be granted for the entire period of prior
9 service with that employer without any employee
10 contribution.
11 If the effective date of participation for the
12 participating municipality or participating
13 instrumentality is after January 1, 1998, creditable
14 service shall be granted for the last 20% of the period of
15 prior service with that employer, but no more than 5 years,
16 without any employee contribution. A participating
17 employee may establish creditable service for the
18 remainder of the period of prior service with that employer
19 by making an application in writing, accompanied by payment
20 of an employee contribution in an amount determined by the
21 Fund, based on the employee contribution rates in effect at
22 the time of application for the creditable service and the
23 employee's salary rate on the effective date of
24 participation for that employer, plus interest at the
25 effective rate from the date of the prior service to the
26 date of payment. Application for this creditable service

HB0436- 57 -LRB100 05378 RPS 15389 b
1 may be made at any time while the employee is still in
2 service.
3 A municipality that (i) has at least 35 employees; (ii)
4 is located in a county with at least 2,000,000 inhabitants;
5 and (iii) maintains an independent defined benefit pension
6 plan for the benefit of its eligible employees may restrict
7 creditable service in whole or in part for periods of prior
8 service with the employer if the governing body of the
9 municipality adopts an irrevocable resolution to restrict
10 that creditable service and files the resolution with the
11 board before the municipality's effective date of
12 participation.
13 Any person who has withdrawn from the service of a
14 participating municipality or participating
15 instrumentality prior to the effective date, who reenters
16 the service of the same municipality or participating
17 instrumentality after the effective date and becomes a
18 participating employee is entitled to creditable service
19 for prior service as otherwise provided in this subdivision
20 (a)(1) only if he or she renders 2 years of service as a
21 participating employee after the effective date.
22 Application for such service must be made while in a
23 participating status. The salary rate to be used in the
24 calculation of the required employee contribution, if any,
25 shall be the employee's salary rate at the time of first
26 reentering service with the employer after the employer's

HB0436- 58 -LRB100 05378 RPS 15389 b
1 effective date of participation.
2 2. For current service, each participating employee
3 shall be credited with:
4 a. Additional credits of amounts equal to each
5 payment of additional contributions received from him
6 under Section 7-173, as of the date the corresponding
7 payment of earnings is payable to him.
8 b. Normal credits of amounts equal to each payment
9 of normal contributions received from him, as of the
10 date the corresponding payment of earnings is payable
11 to him, and normal contributions made for the purpose
12 of establishing out-of-state service credits as
13 permitted under the conditions set forth in paragraph 6
14 of this subsection (a).
15 c. Municipality credits in an amount equal to 1.4
16 times the normal credits, except those established by
17 out-of-state service credits, as of the date of
18 computation of any benefit if these credits would
19 increase the benefit.
20 d. Survivor credits equal to each payment of
21 survivor contributions received from the participating
22 employee as of the date the corresponding payment of
23 earnings is payable, and survivor contributions made
24 for the purpose of establishing out-of-state service
25 credits.
26 3. For periods of temporary and total and permanent

HB0436- 59 -LRB100 05378 RPS 15389 b
1 disability benefits, each employee receiving disability
2 benefits shall be granted creditable service for the period
3 during which disability benefits are payable. Normal and
4 survivor credits, based upon the rate of earnings applied
5 for disability benefits, shall also be granted if such
6 credits would result in a higher benefit to any such
7 employee or his beneficiary.
8 4. For authorized leave of absence without pay: A
9 participating employee shall be granted credits and
10 creditable service for periods of authorized leave of
11 absence without pay under the following conditions:
12 a. An application for credits and creditable
13 service is submitted to the board while the employee is
14 in a status of active employment.
15 b. Not more than 12 complete months of creditable
16 service for authorized leave of absence without pay
17 shall be counted for purposes of determining any
18 benefits payable under this Article.
19 c. Credits and creditable service shall be granted
20 for leave of absence only if such leave is approved by
21 the governing body of the municipality, including
22 approval of the estimated cost thereof to the
23 municipality as determined by the fund, and employee
24 contributions, plus interest at the effective rate
25 applicable for each year from the end of the period of
26 leave to date of payment, have been paid to the fund in

HB0436- 60 -LRB100 05378 RPS 15389 b
1 accordance with Section 7-173. The contributions shall
2 be computed upon the assumption earnings continued
3 during the period of leave at the rate in effect when
4 the leave began.
5 d. Benefits under the provisions of Sections
6 7-141, 7-146, 7-150 and 7-163 shall become payable to
7 employees on authorized leave of absence, or their
8 designated beneficiary, only if such leave of absence
9 is creditable hereunder, and if the employee has at
10 least one year of creditable service other than the
11 service granted for leave of absence. Any employee
12 contributions due may be deducted from any benefits
13 payable.
14 e. No credits or creditable service shall be
15 allowed for leave of absence without pay during any
16 period of prior service.
17 5. For military service: The governing body of a
18 municipality or participating instrumentality may elect to
19 allow creditable service to participating employees who
20 leave their employment to serve in the armed forces of the
21 United States for all periods of such service, provided
22 that the person returns to active employment within 90 days
23 after completion of full time active duty, but no
24 creditable service shall be allowed such person for any
25 period that can be used in the computation of a pension or
26 any other pay or benefit, other than pay for active duty,

HB0436- 61 -LRB100 05378 RPS 15389 b
1 for service in any branch of the armed forces of the United
2 States. If necessary to the computation of any benefit, the
3 board shall establish municipality credits for
4 participating employees under this paragraph on the
5 assumption that the employee received earnings at the rate
6 received at the time he left the employment to enter the
7 armed forces. A participating employee in the armed forces
8 shall not be considered an employee during such period of
9 service and no additional death and no disability benefits
10 are payable for death or disability during such period.
11 Any participating employee who left his employment
12 with a municipality or participating instrumentality to
13 serve in the armed forces of the United States and who
14 again became a participating employee within 90 days after
15 completion of full time active duty by entering the service
16 of a different municipality or participating
17 instrumentality, which has elected to allow creditable
18 service for periods of military service under the preceding
19 paragraph, shall also be allowed creditable service for his
20 period of military service on the same terms that would
21 apply if he had been employed, before entering military
22 service, by the municipality or instrumentality which
23 employed him after he left the military service and the
24 employer costs arising in relation to such grant of
25 creditable service shall be charged to and paid by that
26 municipality or instrumentality.

HB0436- 62 -LRB100 05378 RPS 15389 b
1 Notwithstanding the foregoing, any participating
2 employee shall be entitled to creditable service as
3 required by any federal law relating to re-employment
4 rights of persons who served in the United States Armed
5 Services. Such creditable service shall be granted upon
6 payment by the member of an amount equal to the employee
7 contributions which would have been required had the
8 employee continued in service at the same rate of earnings
9 during the military leave period, plus interest at the
10 effective rate.
11 5.1. In addition to any creditable service established
12 under paragraph 5 of this subsection (a), creditable
13 service may be granted for up to 48 months of service in
14 the armed forces of the United States.
15 In order to receive creditable service for military
16 service under this paragraph 5.1, a participating employee
17 must (1) apply to the Fund in writing and provide evidence
18 of the military service that is satisfactory to the Board;
19 (2) obtain the written approval of the current employer;
20 and (3) make contributions to the Fund equal to (i) the
21 employee contributions that would have been required had
22 the service been rendered as a member, plus (ii) an amount
23 determined by the board to be equal to the employer's
24 normal cost of the benefits accrued for that military
25 service, plus (iii) interest on items (i) and (ii) from the
26 date of first membership in the Fund to the date of

HB0436- 63 -LRB100 05378 RPS 15389 b
1 payment. The required interest shall be calculated at the
2 regular interest rate.
3 The changes made to this paragraph 5.1 by Public Acts
4 95-483 and 95-486 apply only to participating employees in
5 service on or after August 28, 2007 (the effective date of
6 those Public Acts).
7 6. For out-of-state service: Creditable service shall
8 be granted for service rendered to an out-of-state local
9 governmental body under the following conditions: The
10 employee had participated and has irrevocably forfeited
11 all rights to benefits in the out-of-state public employees
12 pension system; the governing body of his participating
13 municipality or instrumentality authorizes the employee to
14 establish such service; the employee has 2 years current
15 service with this municipality or participating
16 instrumentality; the employee makes a payment of
17 contributions, which shall be computed at 8% (normal) plus
18 2% (survivor) times length of service purchased times the
19 average rate of earnings for the first 2 years of service
20 with the municipality or participating instrumentality
21 whose governing body authorizes the service established
22 plus interest at the effective rate on the date such
23 credits are established, payable from the date the employee
24 completes the required 2 years of current service to date
25 of payment. In no case shall more than 120 months of
26 creditable service be granted under this provision.

HB0436- 64 -LRB100 05378 RPS 15389 b
1 7. For retroactive service: Any employee who could have
2 but did not elect to become a participating employee, or
3 who should have been a participant in the Municipal Public
4 Utilities Annuity and Benefit Fund before that fund was
5 superseded, may receive creditable service for the period
6 of service not to exceed 50 months; however, a current or
7 former elected or appointed official of a participating
8 municipality may establish credit under this paragraph 7
9 for more than 50 months of service as an official of that
10 municipality, if the excess over 50 months is approved by
11 resolution of the governing body of the affected
12 municipality filed with the Fund before January 1, 2002.
13 Any employee who is a participating employee on or
14 after September 24, 1981 and who was excluded from
15 participation by the age restrictions removed by Public Act
16 82-596 may receive creditable service for the period, on or
17 after January 1, 1979, excluded by the age restriction and,
18 in addition, if the governing body of the participating
19 municipality or participating instrumentality elects to
20 allow creditable service for all employees excluded by the
21 age restriction prior to January 1, 1979, for service
22 during the period prior to that date excluded by the age
23 restriction. Any employee who was excluded from
24 participation by the age restriction removed by Public Act
25 82-596 and who is not a participating employee on or after
26 September 24, 1981 may receive creditable service for

HB0436- 65 -LRB100 05378 RPS 15389 b
1 service after January 1, 1979. Creditable service under
2 this paragraph shall be granted upon payment of the
3 employee contributions which would have been required had
4 he participated, with interest at the effective rate for
5 each year from the end of the period of service established
6 to date of payment.
7 8. For accumulated unused sick leave: A participating
8 employee who first becomes a participating employee before
9 the effective date of this amendatory Act of the 100th
10 General Assembly and who is applying for a retirement
11 annuity shall be entitled to creditable service for that
12 portion of the employee's accumulated unused sick leave for
13 which payment is not received, as follows:
14 a. Sick leave days shall be limited to those
15 accumulated under a sick leave plan established by a
16 participating municipality or participating
17 instrumentality which is available to all employees or
18 a class of employees.
19 b. Except as provided in item b-1, only sick leave
20 days accumulated with a participating municipality or
21 participating instrumentality with which the employee
22 was in service within 60 days of the effective date of
23 his retirement annuity shall be credited; If the
24 employee was in service with more than one employer
25 during this period only the sick leave days with the
26 employer with which the employee has the greatest

HB0436- 66 -LRB100 05378 RPS 15389 b
1 number of unpaid sick leave days shall be considered.
2 b-1. If the employee was in the service of more
3 than one employer as defined in item (2) of paragraph
4 (a) of subsection (A) of Section 7-132, then the sick
5 leave days from all such employers shall be credited,
6 as long as the creditable service attributed to those
7 sick leave days does not exceed the limitation in item
8 f of this paragraph 8. In calculating the creditable
9 service under this item b-1, the sick leave days from
10 the last employer shall be considered first, then the
11 remaining sick leave days shall be considered until
12 there are no more days or the maximum creditable sick
13 leave threshold under item f of this paragraph 8 has
14 been reached.
15 c. The creditable service granted shall be
16 considered solely for the purpose of computing the
17 amount of the retirement annuity and shall not be used
18 to establish any minimum service period required by any
19 provision of the Illinois Pension Code, the effective
20 date of the retirement annuity, or the final rate of
21 earnings.
22 d. The creditable service shall be at the rate of
23 1/20 of a month for each full sick day, provided that
24 no more than 12 months may be credited under this
25 subdivision 8.
26 e. Employee contributions shall not be required

HB0436- 67 -LRB100 05378 RPS 15389 b
1 for creditable service under this subdivision 8.
2 f. Each participating municipality and
3 participating instrumentality with which an employee
4 has service within 60 days of the effective date of his
5 retirement annuity shall certify to the board the
6 number of accumulated unpaid sick leave days credited
7 to the employee at the time of termination of service.
8 9. For service transferred from another system:
9 Credits and creditable service shall be granted for service
10 under Article 4, 5, 8, 14, or 16 of this Act, to any active
11 member of this Fund, and to any inactive member who has
12 been a county sheriff, upon transfer of such credits
13 pursuant to Section 4-108.3, 5-235, 8-226.7, 14-105.6, or
14 16-131.4, and payment by the member of the amount by which
15 (1) the employer and employee contributions that would have
16 been required if he had participated in this Fund as a
17 sheriff's law enforcement employee during the period for
18 which credit is being transferred, plus interest thereon at
19 the effective rate for each year, compounded annually, from
20 the date of termination of the service for which credit is
21 being transferred to the date of payment, exceeds (2) the
22 amount actually transferred to the Fund. Such transferred
23 service shall be deemed to be service as a sheriff's law
24 enforcement employee for the purposes of Section 7-142.1.
25 10. (Blank).
26 11. For service transferred from an Article 3 system

HB0436- 68 -LRB100 05378 RPS 15389 b
1 under Section 3-110.3: Credits and creditable service
2 shall be granted for service under Article 3 of this Act as
3 provided in Section 3-110.3, to any active member of this
4 Fund, upon transfer of such credits pursuant to Section
5 3-110.3. If the board determines that the amount
6 transferred is less than the true cost to the Fund of
7 allowing that creditable service to be established, then in
8 order to establish that creditable service, the member must
9 pay to the Fund an additional contribution equal to the
10 difference, as determined by the board in accordance with
11 the rules and procedures adopted under this paragraph. If
12 the member does not make the full additional payment as
13 required by this paragraph prior to termination of his
14 participation with that employer, then his or her
15 creditable service shall be reduced by an amount equal to
16 the difference between the amount transferred under
17 Section 3-110.3, including any payments made by the member
18 under this paragraph prior to termination, and the true
19 cost to the Fund of allowing that creditable service to be
20 established, as determined by the board in accordance with
21 the rules and procedures adopted under this paragraph.
22 The board shall establish by rule the manner of making
23 the calculation required under this paragraph 11, taking
24 into account the appropriate actuarial assumptions; the
25 member's service, age, and salary history, and any other
26 factors that the board determines to be relevant.

HB0436- 69 -LRB100 05378 RPS 15389 b
1 12. For omitted service: Any employee who was employed
2 by a participating employer in a position that required
3 participation, but who was not enrolled in the Fund, may
4 establish such credits under the following conditions:
5 a. Application for such credits is received by the
6 Board while the employee is an active participant of
7 the Fund or a reciprocal retirement system.
8 b. Eligibility for participation and earnings are
9 verified by the Authorized Agent of the participating
10 employer for which the service was rendered.
11 Creditable service under this paragraph shall be
12 granted upon payment of the employee contributions that
13 would have been required had he participated, which shall
14 be calculated by the Fund using the member contribution
15 rate in effect during the period that the service was
16 rendered.
17 (b) Creditable service - amount:
18 1. One month of creditable service shall be allowed for
19 each month for which a participating employee made
20 contributions as required under Section 7-173, or for which
21 creditable service is otherwise granted hereunder. Not
22 more than 1 month of service shall be credited and counted
23 for 1 calendar month, and not more than 1 year of service
24 shall be credited and counted for any calendar year. A
25 calendar month means a nominal month beginning on the first
26 day thereof, and a calendar year means a year beginning

HB0436- 70 -LRB100 05378 RPS 15389 b
1 January 1 and ending December 31.
2 2. A seasonal employee shall be given 12 months of
3 creditable service if he renders the number of months of
4 service normally required by the position in a 12-month
5 period and he remains in service for the entire 12-month
6 period. Otherwise a fractional year of service in the
7 number of months of service rendered shall be credited.
8 3. An intermittent employee shall be given creditable
9 service for only those months in which a contribution is
10 made under Section 7-173.
11 (c) No application for correction of credits or creditable
12service shall be considered unless the board receives an
13application for correction while (1) the applicant is a
14participating employee and in active employment with a
15participating municipality or instrumentality, or (2) while
16the applicant is actively participating in a pension fund or
17retirement system which is a participating system under the
18Retirement Systems Reciprocal Act. A participating employee or
19other applicant shall not be entitled to credits or creditable
20service unless the required employee contributions are made in
21a lump sum or in installments made in accordance with board
22rule.
23 (d) Upon the granting of a retirement, surviving spouse or
24child annuity, a death benefit or a separation benefit, on
25account of any employee, all individual accumulated credits
26shall thereupon terminate. Upon the withdrawal of additional

HB0436- 71 -LRB100 05378 RPS 15389 b
1contributions, the credits applicable thereto shall thereupon
2terminate. Terminated credits shall not be applied to increase
3the benefits any remaining employee would otherwise receive
4under this Article.
5(Source: P.A. 97-415, eff. 8-16-11; 98-439, eff. 8-16-13;
698-932, eff. 8-15-14.)
7 (40 ILCS 5/14-103.05) (from Ch. 108 1/2, par. 14-103.05)
8 Sec. 14-103.05. Employee.
9 (a) Except as provided in subsection (d), any Any person
10employed by a Department who receives salary for personal
11services rendered to the Department on a warrant issued
12pursuant to a payroll voucher certified by a Department and
13drawn by the State Comptroller upon the State Treasurer,
14including an elected official described in subparagraph (d) of
15Section 14-104, shall become an employee for purpose of
16membership in the Retirement System on the first day of such
17employment.
18 A person entering service on or after January 1, 1972 and
19prior to January 1, 1984 shall become a member as a condition
20of employment and shall begin making contributions as of the
21first day of employment.
22 A person entering service on or after January 1, 1984
23shall, upon completion of 6 months of continuous service which
24is not interrupted by a break of more than 2 months, become a
25member as a condition of employment. Contributions shall begin

HB0436- 72 -LRB100 05378 RPS 15389 b
1the first of the month after completion of the qualifying
2period.
3 A person employed by the Chicago Metropolitan Agency for
4Planning on the effective date of this amendatory Act of the
595th General Assembly who was a member of this System as an
6employee of the Chicago Area Transportation Study and makes an
7election under Section 14-104.13 to participate in this System
8for his or her employment with the Chicago Metropolitan Agency
9for Planning.
10 The qualifying period of 6 months of service is not
11applicable to: (1) a person who has been granted credit for
12service in a position covered by the State Universities
13Retirement System, the Teachers' Retirement System of the State
14of Illinois, the General Assembly Retirement System, or the
15Judges Retirement System of Illinois unless that service has
16been forfeited under the laws of those systems; (2) a person
17entering service on or after July 1, 1991 in a noncovered
18position; (3) a person to whom Section 14-108.2a or 14-108.2b
19applies; or (4) a person to whom subsection (a-5) of this
20Section applies.
21 (a-5) Except as provided in subsection (d), a A person
22entering service on or after December 1, 2010 and before the
23effective date of this amendatory Act of the 100th General
24Assembly shall become a member as a condition of employment and
25shall begin making contributions as of the first day of
26employment. A person serving in the qualifying period on

HB0436- 73 -LRB100 05378 RPS 15389 b
1December 1, 2010 will become a member on December 1, 2010 and
2shall begin making contributions as of December 1, 2010.
3 (b) The term "employee" does not include the following:
4 (1) members of the State Legislature, and persons
5 electing to become members of the General Assembly
6 Retirement System pursuant to Section 2-105;
7 (2) incumbents of offices normally filled by vote of
8 the people;
9 (3) except as otherwise provided in this Section, any
10 person appointed by the Governor with the advice and
11 consent of the Senate unless that person elects to
12 participate in this system;
13 (3.1) any person serving as a commissioner of an ethics
14 commission created under the State Officials and Employees
15 Ethics Act unless that person elects to participate in this
16 system with respect to that service as a commissioner;
17 (3.2) any person serving as a part-time employee in any
18 of the following positions: Legislative Inspector General,
19 Special Legislative Inspector General, employee of the
20 Office of the Legislative Inspector General, Executive
21 Director of the Legislative Ethics Commission, or staff of
22 the Legislative Ethics Commission, regardless of whether
23 he or she is in active service on or after July 8, 2004
24 (the effective date of Public Act 93-685), unless that
25 person elects to participate in this System with respect to
26 that service; in this item (3.2), a "part-time employee" is

HB0436- 74 -LRB100 05378 RPS 15389 b
1 a person who is not required to work at least 35 hours per
2 week;
3 (3.3) any person who has made an election under Section
4 1-123 and who is serving either as legal counsel in the
5 Office of the Governor or as Chief Deputy Attorney General;
6 (4) except as provided in Section 14-108.2 or
7 14-108.2c, any person who is covered or eligible to be
8 covered by the Teachers' Retirement System of the State of
9 Illinois, the State Universities Retirement System, or the
10 Judges Retirement System of Illinois;
11 (5) an employee of a municipality or any other
12 political subdivision of the State;
13 (6) any person who becomes an employee after June 30,
14 1979 as a public service employment program participant
15 under the Federal Comprehensive Employment and Training
16 Act and whose wages or fringe benefits are paid in whole or
17 in part by funds provided under such Act;
18 (7) enrollees of the Illinois Young Adult Conservation
19 Corps program, administered by the Department of Natural
20 Resources, authorized grantee pursuant to Title VIII of the
21 "Comprehensive Employment and Training Act of 1973", 29 USC
22 993, as now or hereafter amended;
23 (8) enrollees and temporary staff of programs
24 administered by the Department of Natural Resources under
25 the Youth Conservation Corps Act of 1970;
26 (9) any person who is a member of any professional

HB0436- 75 -LRB100 05378 RPS 15389 b
1 licensing or disciplinary board created under an Act
2 administered by the Department of Professional Regulation
3 or a successor agency or created or re-created after the
4 effective date of this amendatory Act of 1997, and who
5 receives per diem compensation rather than a salary,
6 notwithstanding that such per diem compensation is paid by
7 warrant issued pursuant to a payroll voucher; such persons
8 have never been included in the membership of this System,
9 and this amendatory Act of 1987 (P.A. 84-1472) is not
10 intended to effect any change in the status of such
11 persons;
12 (10) any person who is a member of the Illinois Health
13 Care Cost Containment Council, and receives per diem
14 compensation rather than a salary, notwithstanding that
15 such per diem compensation is paid by warrant issued
16 pursuant to a payroll voucher; such persons have never been
17 included in the membership of this System, and this
18 amendatory Act of 1987 is not intended to effect any change
19 in the status of such persons;
20 (11) any person who is a member of the Oil and Gas
21 Board created by Section 1.2 of the Illinois Oil and Gas
22 Act, and receives per diem compensation rather than a
23 salary, notwithstanding that such per diem compensation is
24 paid by warrant issued pursuant to a payroll voucher;
25 (12) a person employed by the State Board of Higher
26 Education in a position with the Illinois Century Network

HB0436- 76 -LRB100 05378 RPS 15389 b
1 as of June 30, 2004, who remains continuously employed
2 after that date by the Department of Central Management
3 Services in a position with the Illinois Century Network
4 and participates in the Article 15 system with respect to
5 that employment;
6 (13) any person who first becomes a member of the Civil
7 Service Commission on or after January 1, 2012;
8 (14) any person, other than the Director of Employment
9 Security, who first becomes a member of the Board of Review
10 of the Department of Employment Security on or after
11 January 1, 2012;
12 (15) any person who first becomes a member of the Civil
13 Service Commission on or after January 1, 2012;
14 (16) any person who first becomes a member of the
15 Illinois Liquor Control Commission on or after January 1,
16 2012;
17 (17) any person who first becomes a member of the
18 Secretary of State Merit Commission on or after January 1,
19 2012;
20 (18) any person who first becomes a member of the Human
21 Rights Commission on or after January 1, 2012;
22 (19) any person who first becomes a member of the State
23 Mining Board on or after January 1, 2012;
24 (20) any person who first becomes a member of the
25 Property Tax Appeal Board on or after January 1, 2012;
26 (21) any person who first becomes a member of the

HB0436- 77 -LRB100 05378 RPS 15389 b
1 Illinois Racing Board on or after January 1, 2012;
2 (22) any person who first becomes a member of the
3 Department of State Police Merit Board on or after January
4 1, 2012;
5 (23) any person who first becomes a member of the
6 Illinois State Toll Highway Authority on or after January
7 1, 2012; or
8 (24) any person who first becomes a member of the
9 Illinois State Board of Elections on or after January 1,
10 2012.
11 (c) An individual who represents or is employed as an
12officer or employee of a statewide labor organization that
13represents members of this System may participate in the System
14and shall be deemed an employee, provided that (1) the
15individual has previously earned creditable service under this
16Article, (2) the individual files with the System an
17irrevocable election to become a participant within 6 months
18after the effective date of this amendatory Act of the 94th
19General Assembly, and (3) the individual does not receive
20credit for that employment under any other provisions of this
21Code. An employee under this subsection (c) is responsible for
22paying to the System both (i) employee contributions based on
23the actual compensation received for service with the labor
24organization and (ii) employer contributions based on the
25percentage of payroll certified by the board; all or any part
26of these contributions may be paid on the employee's behalf or

HB0436- 78 -LRB100 05378 RPS 15389 b
1picked up for tax purposes (if authorized under federal law) by
2the labor organization.
3 A person who is an employee as defined in this subsection
4(c) may establish service credit for similar employment prior
5to becoming an employee under this subsection by paying to the
6System for that employment the contributions specified in this
7subsection, plus interest at the effective rate from the date
8of service to the date of payment. However, credit shall not be
9granted under this subsection (c) for any such prior employment
10for which the applicant received credit under any other
11provision of this Code or during which the applicant was on a
12leave of absence.
13 (d) Notwithstanding any other provision of this Article,
14beginning on the effective date of this amendatory Act of the
15100th General Assembly, a person is not required, as a
16condition of employment or otherwise, to participate in this
17System. An active employee may terminate his or her
18participation in this System (including active participation
19in the Tier 3 plan, if applicable) by notifying the System in
20writing. An active employee terminating participation in this
21System under this subsection shall be entitled to a refund of
22his or her contributions (other than contributions to the Tier
233 plan under Section 14-155.5) minus the benefits received
24prior to the termination of participation.
25(Source: P.A. 96-1490, eff. 1-1-11; 97-609, eff. 1-1-12.)

HB0436- 79 -LRB100 05378 RPS 15389 b
1 (40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 14-103.10. Compensation.
5 (a) For periods of service prior to January 1, 1978, the
6full rate of salary or wages payable to an employee for
7personal services performed if he worked the full normal
8working period for his position, subject to the following
9maximum amounts: (1) prior to July 1, 1951, $400 per month or
10$4,800 per year; (2) between July 1, 1951 and June 30, 1957
11inclusive, $625 per month or $7,500 per year; (3) beginning
12July 1, 1957, no limitation.
13 In the case of service of an employee in a position
14involving part-time employment, compensation shall be
15determined according to the employees' earnings record.
16 (b) For periods of service on and after January 1, 1978,
17all remuneration for personal services performed defined as
18"wages" under the Social Security Enabling Act, including that
19part of such remuneration which is in excess of any maximum
20limitation provided in such Act, and including any benefits
21received by an employee under a sick pay plan in effect before
22January 1, 1981, but excluding lump sum salary payments:
23 (1) for vacation,
24 (2) for accumulated unused sick leave,
25 (3) upon discharge or dismissal,
26 (4) for approved holidays.

HB0436- 80 -LRB100 05378 RPS 15389 b
1 (c) For periods of service on or after December 16, 1978,
2compensation also includes any benefits, other than lump sum
3salary payments made at termination of employment, which an
4employee receives or is eligible to receive under a sick pay
5plan authorized by law.
6 (d) For periods of service after September 30, 1985,
7compensation also includes any remuneration for personal
8services not included as "wages" under the Social Security
9Enabling Act, which is deducted for purposes of participation
10in a program established pursuant to Section 125 of the
11Internal Revenue Code or its successor laws.
12 (e) For members for which Section 1-160 applies for periods
13of service on and after January 1, 2011, all remuneration for
14personal services performed defined as "wages" under the Social
15Security Enabling Act, excluding remuneration that is in excess
16of the annual earnings, salary, or wages of a member or
17participant, as provided in subsection (b-5) of Section 1-160,
18but including any benefits received by an employee under a sick
19pay plan in effect before January 1, 1981. Compensation shall
20exclude lump sum salary payments:
21 (1) for vacation;
22 (2) for accumulated unused sick leave;
23 (3) upon discharge or dismissal; and
24 (4) for approved holidays.
25 (f) Notwithstanding the other provisions of this Section,
26for service on or after July 1, 2013, "compensation" does not

HB0436- 81 -LRB100 05378 RPS 15389 b
1include any stipend payable to an employee for service on a
2board or commission.
3 (g) Notwithstanding any other provision of this Section,
4for an employee who first becomes a participant on or after the
5effective date of this amendatory Act of the 100th General
6Assembly, "compensation" does not include any payments or
7reimbursements for travel vouchers submitted more than 30 days
8after the last day of travel for which the voucher is
9submitted.
10(Source: P.A. 98-449, eff. 8-16-13.)
11 (40 ILCS 5/14-103.41 new)
12 Sec. 14-103.41. Tier 1 member. "Tier 1 member": A member of
13this System who first became a member or participant before
14January 1, 2011 under any reciprocal retirement system or
15pension fund established under this Code other than a
16retirement system or pension fund established under Article 2,
173, 4, 5, 6, or 18 of this Code.
18 In the case of a Tier 1 member who elects to participate in
19the Tier 3 plan under Section 14-155.5 of this Code, that Tier
201 member shall be deemed a Tier 1 member only with respect to
21service performed or established before the effective date of
22that election.
23 (40 ILCS 5/14-103.42 new)
24 Sec. 14-103.42. Tier 2 member. "Tier 2 member": A member of

HB0436- 82 -LRB100 05378 RPS 15389 b
1this System who first becomes a member under this Article on or
2after January 1, 2011 and who is not a Tier 1 member.
3 In the case of a Tier 2 member who elects to participate in
4the Tier 3 plan under Section 14-155.5 of this Code, that Tier
52 member shall be deemed a Tier 2 member only with respect to
6service performed or established before the effective date of
7that election.
8 (40 ILCS 5/14-103.43 new)
9 Sec. 14-103.43. Tier 3 member. "Tier 3 member": A Tier 1 or
10Tier 2 member who elects to participate in the Tier 3 plan
11under Section 14-155.5 of this Code, but only with respect to
12service performed on or after the effective date of that
13election.
14 (40 ILCS 5/14-104.3) (from Ch. 108 1/2, par. 14-104.3)
15 (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17 Sec. 14-104.3. Notwithstanding provisions contained in
18Section 14-103.10, any person who first becomes a member before
19the effective date of this amendatory Act of the 100th General
20Assembly and who at the time of retirement and after December
216, 1983 receives compensation in a lump sum for accumulated
22vacation, sickness, or personal business may receive service
23credit for such periods by making contributions within 90 days
24of withdrawal, based on the rate of compensation in effect

HB0436- 83 -LRB100 05378 RPS 15389 b
1immediately prior to retirement and the contribution rate then
2in effect. Any person who first becomes a member on or after
3the effective date of this amendatory Act of the 100th General
4Assembly and who receives compensation in a lump sum for
5accumulated vacation, sickness, or personal business may not
6receive service credit for such periods. Exercising the option
7provided in this Section shall not change a member's date of
8withdrawal or final average compensation for purposes of
9computing the amount or effective date of a retirement annuity.
10Any annuitant who establishes service credit as herein provided
11shall have his retirement annuity adjusted retroactively to the
12date of retirement.
13(Source: P.A. 83-1362.)
14 (40 ILCS 5/14-106) (from Ch. 108 1/2, par. 14-106)
15 (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17 Sec. 14-106. Membership service credit.
18 (a) After January 1, 1944, all service of a member since he
19last became a member with respect to which contributions are
20made shall count as membership service; provided, that for
21service on and after July 1, 1950, 12 months of service shall
22constitute a year of membership service, the completion of 15
23days or more of service during any month shall constitute 1
24month of membership service, 8 to 15 days shall constitute 1/2
25month of membership service and less than 8 days shall

HB0436- 84 -LRB100 05378 RPS 15389 b
1constitute 1/4 month of membership service. The payroll record
2of each department shall constitute conclusive evidence of the
3record of service rendered by a member.
4 (b) For a member who is employed and paid on an
5academic-year basis rather than on a 12-month annual basis,
6employment for a full academic year shall constitute a full
7year of membership service, except that the member shall not
8receive more than one year of membership service credit (plus
9any additional service credit granted for unused sick leave)
10for service during any 12-month period. This subsection (b)
11applies to all such service for which the member has not begun
12to receive a retirement annuity before January 1, 2001.
13 (c) A person who first becomes a member before the
14effective date of this amendatory Act of the 100th General
15Assembly shall be entitled to additional service credit, under
16rules prescribed by the Board, for accumulated unused sick
17leave credited to his account in the last Department on the
18date of withdrawal from service or for any period for which he
19would have been eligible to receive benefits under a sick pay
20plan authorized by law, if he had suffered a sickness or
21accident on the date of withdrawal from service. It shall be
22the responsibility of the last Department to certify to the
23Board the length of time salary or benefits would have been
24paid to the member based upon the accumulated unused sick leave
25or the applicable sick pay plan if he had become entitled
26thereto because of sickness on the date that his status as an

HB0436- 85 -LRB100 05378 RPS 15389 b
1employee terminated. This period of service credit granted
2under this paragraph shall not be considered in determining the
3date the retirement annuity is to begin, or final average
4compensation.
5 (d) A person who first becomes a member on or after the
6effective date of this amendatory Act of the 100th General
7Assembly shall not be entitled to additional service credit for
8accumulated unused sick leave.
9(Source: P.A. 92-14, eff. 6-28-01.)
10 (40 ILCS 5/14-152.1)
11 (Text of Section WITHOUT the changes made by P.A. 98-599,
12which has been held unconstitutional)
13 Sec. 14-152.1. Application and expiration of new benefit
14increases.
15 (a) As used in this Section, "new benefit increase" means
16an increase in the amount of any benefit provided under this
17Article, or an expansion of the conditions of eligibility for
18any benefit under this Article, that results from an amendment
19to this Code that takes effect after June 1, 2005 (the
20effective date of Public Act 94-4). "New benefit increase",
21however, does not include any benefit increase resulting from
22the changes made to this Article by Public Act 96-37 or this
23amendatory Act of the 100th General Assembly this amendatory
24Act of the 96th General Assembly.
25 (b) Notwithstanding any other provision of this Code or any

HB0436- 86 -LRB100 05378 RPS 15389 b
1subsequent amendment to this Code, every new benefit increase
2is subject to this Section and shall be deemed to be granted
3only in conformance with and contingent upon compliance with
4the provisions of this Section.
5 (c) The Public Act enacting a new benefit increase must
6identify and provide for payment to the System of additional
7funding at least sufficient to fund the resulting annual
8increase in cost to the System as it accrues.
9 Every new benefit increase is contingent upon the General
10Assembly providing the additional funding required under this
11subsection. The Commission on Government Forecasting and
12Accountability shall analyze whether adequate additional
13funding has been provided for the new benefit increase and
14shall report its analysis to the Public Pension Division of the
15Department of Financial and Professional Regulation. A new
16benefit increase created by a Public Act that does not include
17the additional funding required under this subsection is null
18and void. If the Public Pension Division determines that the
19additional funding provided for a new benefit increase under
20this subsection is or has become inadequate, it may so certify
21to the Governor and the State Comptroller and, in the absence
22of corrective action by the General Assembly, the new benefit
23increase shall expire at the end of the fiscal year in which
24the certification is made.
25 (d) Every new benefit increase shall expire 5 years after
26its effective date or on such earlier date as may be specified

HB0436- 87 -LRB100 05378 RPS 15389 b
1in the language enacting the new benefit increase or provided
2under subsection (c). This does not prevent the General
3Assembly from extending or re-creating a new benefit increase
4by law.
5 (e) Except as otherwise provided in the language creating
6the new benefit increase, a new benefit increase that expires
7under this Section continues to apply to persons who applied
8and qualified for the affected benefit while the new benefit
9increase was in effect and to the affected beneficiaries and
10alternate payees of such persons, but does not apply to any
11other person, including without limitation a person who
12continues in service after the expiration date and did not
13apply and qualify for the affected benefit while the new
14benefit increase was in effect.
15(Source: P.A. 96-37, eff. 7-13-09.)
16 (40 ILCS 5/14-155.5 new)
17 Sec. 14-155.5. Tier 3 plan.
18 (a) By July 1, 2018, the System shall prepare and implement
19a Tier 3 plan. The Tier 3 plan developed under this Section
20shall be a plan that aggregates State and employee
21contributions in individual participant accounts which, after
22meeting any other requirements, are used for payouts after
23retirement in accordance with this Section and any other
24applicable laws.
25 As used in this Section, "defined benefit plan" means the

HB0436- 88 -LRB100 05378 RPS 15389 b
1retirement plan available under this Article to Tier 1 or Tier
22 members who have not made the election authorized under this
3Section.
4 (1) A participant in the Tier 3 plan shall pay employee
5 contributions at a rate determined by the participant, but
6 not less than 3% of compensation and not more than a
7 percentage of compensation determined by the board in
8 accordance with the requirements of State and federal law.
9 (2) State contributions shall be paid into the accounts
10 of all participants in the Tier 3 plan at a uniform rate,
11 expressed as a percentage of compensation and determined
12 for each year. This rate shall be no higher than 7.6% of
13 compensation and shall be no lower than 3% of compensation.
14 The State shall adjust this rate annually.
15 (3) The Tier 3 plan shall require 5 years of
16 participation in the Tier 3 plan before vesting in State
17 contributions. If the participant fails to vest in them,
18 the State contributions, and the earnings thereon, shall be
19 forfeited.
20 (4) The Tier 3 plan may provide for participants in the
21 plan to be eligible for the defined disability benefits
22 available to other participants under this Article. If it
23 does, the System shall reduce the employee contributions
24 credited to the member's Tier 3 plan account by an amount
25 determined by the System to cover the cost of offering such
26 benefits.

HB0436- 89 -LRB100 05378 RPS 15389 b
1 (5) The Tier 3 plan shall provide a variety of options
2 for investments. These options shall include investments
3 handled by the Illinois State Board of Investment as well
4 as private sector investment options.
5 (6) The Tier 3 plan shall provide a variety of options
6 for payouts to participants in the Tier 3 plan who are no
7 longer active in the System and their survivors.
8 (7) To the extent authorized under federal law and as
9 authorized by the System, the plan shall allow former
10 participants in the plan to transfer or roll over employee
11 and vested State contributions, and the earnings thereon,
12 from the Tier 3 plan into other qualified retirement plans.
13 (8) The System shall reduce the employee contributions
14 credited to the member's Tier 3 plan account by an amount
15 determined by the System to cover the cost of offering
16 these benefits and any applicable administrative fees.
17 (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
18member of this System may elect, in writing, to cease accruing
19benefits in the defined benefit plan and begin accruing
20benefits for future service in the Tier 3 plan. The election to
21participate in the Tier 3 plan is voluntary and irrevocable.
22 (1) Service credit under the Tier 3 plan may be used
23 for determining retirement eligibility under the defined
24 benefit plan.
25 (2) The System shall make a good faith effort to
26 contact all active Tier 1 and Tier 2 members who are

HB0436- 90 -LRB100 05378 RPS 15389 b
1 eligible to participate in the Tier 3 plan. The System
2 shall mail information describing the option to join the
3 Tier 3 plan to each of these employees to his or her last
4 known address on file with the System. If the employee is
5 not responsive to other means of contact, it is sufficient
6 for the System to publish the details of the option on its
7 website.
8 (3) Upon request for further information describing
9 the option, the System shall provide employees with
10 information from the System before exercising the option to
11 join the plan, including information on the impact to their
12 benefits and service. The individual consultation shall
13 include projections of the member's defined benefits at
14 retirement or earlier termination of service and the value
15 of the member's account at retirement or earlier
16 termination of service. The System shall not provide advice
17 or counseling with respect to whether the employee should
18 exercise the option. The System shall inform Tier 1 and
19 Tier 2 members who are eligible to participate in the Tier
20 3 plan that they may also wish to obtain information and
21 counsel relating to their option from any other available
22 source, including but not limited to labor organizations,
23 private counsel, and financial advisors.
24 (b-5) A Tier 1 or Tier 2 member who elects to participate
25in the Tier 3 plan may irrevocably elect to terminate all
26participation in the defined benefit plan. Upon that election,

HB0436- 91 -LRB100 05378 RPS 15389 b
1the System shall transfer to the member's individual account an
2amount equal to the amount of contribution refund that the
3member would be eligible to receive if the member terminated
4employment on that date and elected a refund of contributions,
5including regular interest for the respective years. The System
6shall make the transfer as a tax free transfer in accordance
7with Internal Revenue Service guidelines, for purposes of
8funding the amount credited to the member's individual account.
9 (c) In no event shall the System, its staff, its authorized
10representatives, or the Board be liable for any information
11given to an employee under this Section. The System may
12coordinate with the Illinois Department of Central Management
13Services and other retirement systems administering a Tier 3
14plan in accordance with this amendatory Act of the 100th
15General Assembly to provide information concerning the impact
16of the Tier 3 plan set forth in this Section.
17 (d) Notwithstanding any other provision of this Section, no
18person shall begin participating in the Tier 3 plan until it
19has attained qualified plan status and received all necessary
20approvals from the U.S. Internal Revenue Service.
21 (e) The System shall report on its progress under this
22Section, including the available details of the Tier 3 plan and
23the System's plans for informing eligible Tier 1 and Tier 2
24members about the plan, to the Governor and the General
25Assembly on or before January 15, 2018.
26 (f) The Illinois State Board of Investment shall be the

HB0436- 92 -LRB100 05378 RPS 15389 b
1plan sponsor for the Tier 3 plan established under this
2Section.
3 (g) The intent of this amendatory Act of the 100th General
4Assembly is to ensure that the State's normal cost of
5participation in the Tier 3 plan is similar, and if possible
6equal, to the State's normal cost of participation in the
7defined benefit plan, unless a lower State's normal cost is
8necessary to ensure cost neutrality.
9 (40 ILCS 5/15-108.1)
10 Sec. 15-108.1. Tier 1 member. "Tier 1 member": A
11participant or an annuitant of a retirement annuity under this
12Article, other than a participant in the self-managed plan
13under Section 15-158.2, who first became a participant or
14member before January 1, 2011 under any reciprocal retirement
15system or pension fund established under this Code, other than
16a retirement system or pension fund established under Articles
172, 3, 4, 5, 6, or 18 of this Code. "Tier 1 member" includes a
18person who first became a participant under this System before
19January 1, 2011 and who accepts a refund and is subsequently
20reemployed by an employer on or after January 1, 2011.
21 In the case of a Tier 1 member who elects to participate in
22the Tier 3 plan under Section 15-200.5 of this Code, that Tier
231 member shall be deemed a Tier 1 member only with respect to
24service performed or established before the effective date of
25that election.

HB0436- 93 -LRB100 05378 RPS 15389 b
1(Source: P.A. 98-92, eff. 7-16-13.)
2 (40 ILCS 5/15-108.2)
3 Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
4first becomes a participant under this Article on or after
5January 1, 2011, other than a person in the self-managed plan
6established under Section 15-158.2, unless the person is
7otherwise a Tier 1 member. The changes made to this Section by
8this amendatory Act of the 98th General Assembly are a
9correction of existing law and are intended to be retroactive
10to the effective date of Public Act 96-889, notwithstanding the
11provisions of Section 1-103.1 of this Code.
12 In the case of a Tier 2 member who elects to participate in
13the Tier 3 plan under Section 15-200.5 of this Code, that Tier
142 member shall be deemed a Tier 2 member only with respect to
15service performed or established before the effective date of
16that election.
17(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
18 (40 ILCS 5/15-108.3 new)
19 Sec. 15-108.3. Tier 3 member. "Tier 3 member": A Tier 1 or
20Tier 2 member who elects to participate in the Tier 3 plan
21under Section 15-200.5 of this Code, but only with respect to
22service performed on or after the effective date of that
23election.

HB0436- 94 -LRB100 05378 RPS 15389 b
1 (40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
2 Sec. 15-112. Final rate of earnings. "Final rate of
3earnings":
4 (a) This subsection (a) applies only to a Tier 1 member.
5 For an employee who is paid on an hourly basis or who
6receives an annual salary in installments during 12 months of
7each academic year, the average annual earnings during the 48
8consecutive calendar month period ending with the last day of
9final termination of employment or the 4 consecutive academic
10years of service in which the employee's earnings were the
11highest, whichever is greater. For any other employee, the
12average annual earnings during the 4 consecutive academic years
13of service in which his or her earnings were the highest. For
14an employee with less than 48 months or 4 consecutive academic
15years of service, the average earnings during his or her entire
16period of service. The earnings of an employee with more than
1736 months of service under item (a) of Section 15-113.1 prior
18to the date of becoming a participant are, for such period,
19considered equal to the average earnings during the last 36
20months of such service.
21 (b) This subsection (b) applies to a Tier 2 member.
22 For an employee who is paid on an hourly basis or who
23receives an annual salary in installments during 12 months of
24each academic year, the average annual earnings obtained by
25dividing by 8 the total earnings of the employee during the 96
26consecutive months in which the total earnings were the highest

HB0436- 95 -LRB100 05378 RPS 15389 b
1within the last 120 months prior to termination.
2 For any other employee, the average annual earnings during
3the 8 consecutive academic years within the 10 years prior to
4termination in which the employee's earnings were the highest.
5For an employee with less than 96 consecutive months or 8
6consecutive academic years of service, whichever is necessary,
7the average earnings during his or her entire period of
8service.
9 (c) For an employee on leave of absence with pay, or on
10leave of absence without pay who makes contributions during
11such leave, earnings are assumed to be equal to the basic
12compensation on the date the leave began.
13 (d) For an employee on disability leave, earnings are
14assumed to be equal to the basic compensation on the date
15disability occurs or the average earnings during the 24 months
16immediately preceding the month in which disability occurs,
17whichever is greater.
18 (e) For a Tier 1 member who retires on or after the
19effective date of this amendatory Act of 1997 with at least 20
20years of service as a firefighter or police officer under this
21Article, the final rate of earnings shall be the annual rate of
22earnings received by the participant on his or her last day as
23a firefighter or police officer under this Article, if that is
24greater than the final rate of earnings as calculated under the
25other provisions of this Section.
26 (f) If a Tier 1 member is an employee for at least 6 months

HB0436- 96 -LRB100 05378 RPS 15389 b
1during the academic year in which his or her employment is
2terminated, the annual final rate of earnings shall be 25% of
3the sum of (1) the annual basic compensation for that year, and
4(2) the amount earned during the 36 months immediately
5preceding that year, if this is greater than the final rate of
6earnings as calculated under the other provisions of this
7Section.
8 (g) In the determination of the final rate of earnings for
9an employee, that part of an employee's earnings for any
10academic year beginning after June 30, 1997, which exceeds the
11employee's earnings with that employer for the preceding year
12by more than 20 percent shall be excluded; in the event that an
13employee has more than one employer this limitation shall be
14calculated separately for the earnings with each employer. In
15making such calculation, only the basic compensation of
16employees shall be considered, without regard to vacation or
17overtime or to contracts for summer employment.
18 (h) The following are not considered as earnings in
19determining final rate of earnings: (1) severance or separation
20pay, (2) retirement pay, (3) payment for unused sick leave, and
21(4) payments from an employer for the period used in
22determining final rate of earnings for any purpose other than
23(i) services rendered, (ii) leave of absence or vacation
24granted during that period, and (iii) vacation of up to 56 work
25days allowed upon termination of employment; except that, if
26the benefit has been collectively bargained between the

HB0436- 97 -LRB100 05378 RPS 15389 b
1employer and the recognized collective bargaining agent
2pursuant to the Illinois Educational Labor Relations Act,
3payment received during a period of up to 2 academic years for
4unused sick leave may be considered as earnings in accordance
5with the applicable collective bargaining agreement, subject
6to the 20% increase limitation of this Section, and if the
7person first becomes a participant on or after the effective
8date of this amendatory Act of the 100th General Assembly,
9payments for unused sick or vacation time shall not be
10considered as earnings. Any unused sick leave considered as
11earnings under this Section shall not be taken into account in
12calculating service credit under Section 15-113.4.
13 (i) Intermittent periods of service shall be considered as
14consecutive in determining final rate of earnings.
15(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
16 (40 ILCS 5/15-113.4) (from Ch. 108 1/2, par. 15-113.4)
17 (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19 Sec. 15-113.4. Service for unused sick leave. "Service for
20unused sick leave": A person who first becomes a participant
21before the effective date of this amendatory Act of the 100th
22General Assembly and who is an employee under this System or
23one of the other systems subject to Article 20 of this Code
24within 60 days immediately preceding the date on which his or
25her retirement annuity begins, is entitled to credit for

HB0436- 98 -LRB100 05378 RPS 15389 b
1service for that portion of unused sick leave earned in the
2course of employment with an employer and credited on the date
3of termination of employment by an employer for which payment
4is not received, in accordance with the following schedule: 30
5through 90 full calendar days and 20 through 59 full work days
6of unused sick leave, 1/4 of a year of service; 91 through 180
7full calendar days and 60 through 119 full work days, 1/2 of a
8year of service; 181 through 270 full calendar days and 120
9through 179 full work days, 3/4 of a year of service; 271
10through 360 full calendar days and 180 through 240 full work
11days, one year of service. Only uncompensated, unused sick
12leave earned in accordance with an employer's sick leave
13accrual policy generally applicable to employees or a class of
14employees shall be taken into account in calculating service
15credit under this Section. Any uncompensated, unused sick leave
16granted by an employer to facilitate the hiring, retirement,
17termination, or other special circumstances of an employee
18shall not be taken into account in calculating service credit
19under this Section. If a participant transfers from one
20employer to another, the unused sick leave credited by the
21previous employer shall be considered in determining service to
22be credited under this Section, even if the participant
23terminated service prior to the effective date of P.A. 86-272
24(August 23, 1989); if necessary, the retirement annuity shall
25be recalculated to reflect such sick leave credit. Each
26employer shall certify to the board the number of days of

HB0436- 99 -LRB100 05378 RPS 15389 b
1unused sick leave accrued to the participant's credit on the
2date that the participant's status as an employee terminated.
3This period of unused sick leave shall not be considered in
4determining the date the retirement annuity begins. A person
5who first becomes a participant on or after the effective date
6of this amendatory Act of the 100th General Assembly shall not
7receive service credit for unused sick leave.
8(Source: P.A. 90-65, eff. 7-7-97; 90-511, eff. 8-22-97.)
9 (40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)
10 Sec. 15-134. Participant.
11 (a) Except as provided in subsection (a-5), each Each
12person shall, as a condition of employment, become a
13participant and be subject to this Article on the date that he
14or she becomes an employee, makes an election to participate
15in, or otherwise becomes a participant in one of the retirement
16programs offered under this Article, whichever date is later.
17 An employee who becomes a participant shall continue to be
18a participant until he or she becomes an annuitant, dies or
19accepts a refund of contributions.
20 (a-5) Notwithstanding any other provision of this Article,
21beginning on the effective date of this amendatory Act of the
22100th General Assembly, a person is not required, as a
23condition of employment or otherwise, to participate in this
24System. An active employee may terminate his or her
25participation in this System (including active participation

HB0436- 100 -LRB100 05378 RPS 15389 b
1in the Tier 3 plan, if applicable) by notifying the System in
2writing. An active employee terminating participation in this
3System under this subsection shall be entitled to a refund of
4his or her contributions (other than contributions to the
5self-managed plan under Section 15-158.2 or the Tier 3 plan
6under Section 15-200.5) minus the benefits received prior to
7the termination of participation.
8 (b) A person employed concurrently by 2 or more employers
9is eligible to participate in the system on compensation
10received from all employers.
11(Source: P.A. 98-92, eff. 7-16-13.)
12 (40 ILCS 5/15-198)
13 (Text of Section WITHOUT the changes made by P.A. 98-599,
14which has been held unconstitutional)
15 Sec. 15-198. Application and expiration of new benefit
16increases.
17 (a) As used in this Section, "new benefit increase" means
18an increase in the amount of any benefit provided under this
19Article, or an expansion of the conditions of eligibility for
20any benefit under this Article, that results from an amendment
21to this Code that takes effect after the effective date of this
22amendatory Act of the 94th General Assembly. "New benefit
23increase", however, does not include any benefit increase
24resulting from the changes made by this amendatory Act of the
25100th General Assembly.

HB0436- 101 -LRB100 05378 RPS 15389 b
1 (b) Notwithstanding any other provision of this Code or any
2subsequent amendment to this Code, every new benefit increase
3is subject to this Section and shall be deemed to be granted
4only in conformance with and contingent upon compliance with
5the provisions of this Section.
6 (c) The Public Act enacting a new benefit increase must
7identify and provide for payment to the System of additional
8funding at least sufficient to fund the resulting annual
9increase in cost to the System as it accrues.
10 Every new benefit increase is contingent upon the General
11Assembly providing the additional funding required under this
12subsection. The Commission on Government Forecasting and
13Accountability shall analyze whether adequate additional
14funding has been provided for the new benefit increase and
15shall report its analysis to the Public Pension Division of the
16Department of Financial and Professional Regulation. A new
17benefit increase created by a Public Act that does not include
18the additional funding required under this subsection is null
19and void. If the Public Pension Division determines that the
20additional funding provided for a new benefit increase under
21this subsection is or has become inadequate, it may so certify
22to the Governor and the State Comptroller and, in the absence
23of corrective action by the General Assembly, the new benefit
24increase shall expire at the end of the fiscal year in which
25the certification is made.
26 (d) Every new benefit increase shall expire 5 years after

HB0436- 102 -LRB100 05378 RPS 15389 b
1its effective date or on such earlier date as may be specified
2in the language enacting the new benefit increase or provided
3under subsection (c). This does not prevent the General
4Assembly from extending or re-creating a new benefit increase
5by law.
6 (e) Except as otherwise provided in the language creating
7the new benefit increase, a new benefit increase that expires
8under this Section continues to apply to persons who applied
9and qualified for the affected benefit while the new benefit
10increase was in effect and to the affected beneficiaries and
11alternate payees of such persons, but does not apply to any
12other person, including without limitation a person who
13continues in service after the expiration date and did not
14apply and qualify for the affected benefit while the new
15benefit increase was in effect.
16(Source: P.A. 94-4, eff. 6-1-05.)
17 (40 ILCS 5/15-200.5 new)
18 Sec. 15-200.5. Tier 3 plan.
19 (a) By July 1, 2018, the System shall prepare and implement
20a Tier 3 plan. The Tier 3 plan developed under this Section
21shall be a plan that aggregates State and employee
22contributions in individual participant accounts which, after
23meeting any other requirements, are used for payouts after
24retirement in accordance with this Section and any other
25applicable laws.

HB0436- 103 -LRB100 05378 RPS 15389 b
1 As used in this Section, "defined benefit plan" means the
2traditional benefit package or the portable benefit package
3available under this Article to Tier 1 or Tier 2 members who
4have not made the election authorized under this Section and do
5not participate in the self-managed plan under Section
615-158.2.
7 (1) A participant in the Tier 3 plan shall pay employee
8 contributions at a rate determined by the participant, but
9 not less than 3% of earnings and not more than a percentage
10 of earnings determined by the Board in accordance with the
11 requirements of State and federal law.
12 (2) State contributions shall be paid into the accounts
13 of all participants in the Tier 3 plan at a uniform rate,
14 expressed as a percentage of earnings and determined for
15 each year. This rate shall be no higher than 7.6% of
16 earnings and shall be no lower than 3% of earnings. The
17 State shall adjust this rate annually.
18 (3) The Tier 3 plan shall require 5 years of
19 participation in the Tier 3 plan before vesting in State
20 contributions. If the participant fails to vest in them,
21 the State contributions, and the earnings thereon, shall be
22 forfeited.
23 (4) The Tier 3 plan may provide for participants in the
24 plan to be eligible for the defined disability benefits
25 available to other participants under this Article. If it
26 does, the System shall reduce the employee contributions

HB0436- 104 -LRB100 05378 RPS 15389 b
1 credited to the member's Tier 3 plan account by an amount
2 determined by the System to cover the cost of offering such
3 benefits.
4 (5) The Tier 3 plan shall provide a variety of options
5 for investments. These options shall include investments
6 handled by the System as well as private sector investment
7 options.
8 (6) The Tier 3 plan shall provide a variety of options
9 for payouts to participants in the Tier 3 plan who are no
10 longer active in the System and their survivors.
11 (7) To the extent authorized under federal law and as
12 authorized by the System, the plan shall allow former
13 participants in the plan to transfer or roll over employee
14 and vested State contributions, and the earnings thereon,
15 from the Tier 3 plan into other qualified retirement plans.
16 (8) The System shall reduce the employee contributions
17 credited to the member's Tier 3 plan account by an amount
18 determined by the System to cover the cost of offering
19 these benefits and any applicable administrative fees.
20 (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
21member of this System may elect, in writing, to cease accruing
22benefits in the defined benefit plan and begin accruing
23benefits for future service in the Tier 3 plan. An active Tier
241 or Tier 2 member who elects to cease accruing benefits in his
25or her defined benefit plan shall be prohibited from purchasing
26service credit on or after the date of his or her election. A

HB0436- 105 -LRB100 05378 RPS 15389 b
1Tier 1 or Tier 2 member who elects to participate in the Tier 3
2plan shall not receive interest accruals to his or her Rule 2
3benefit on or after the date of his or her election. The
4election to participate in the Tier 3 plan is voluntary and
5irrevocable.
6 (1) Service credit under the Tier 3 plan may be used
7 for determining retirement eligibility under the defined
8 benefit plan.
9 (2) The System shall make a good faith effort to
10 contact all active Tier 1 and Tier 2 members who are
11 eligible to participate in the Tier 3 plan. The System
12 shall mail information describing the option to join the
13 Tier 3 plan to each of these employees to his or her last
14 known address on file with the System. If the employee is
15 not responsive to other means of contact, it is sufficient
16 for the System to publish the details of the option on its
17 website.
18 (3) Upon request for further information describing
19 the option, the System shall provide employees with
20 information from the System before exercising the option to
21 join the plan, including information on the impact to their
22 benefits and service. The individual consultation shall
23 include projections of the member's defined benefits at
24 retirement or earlier termination of service and the value
25 of the member's account at retirement or earlier
26 termination of service. The System shall not provide advice

HB0436- 106 -LRB100 05378 RPS 15389 b
1 or counseling with respect to whether the employee should
2 exercise the option. The System shall inform Tier 1 and
3 Tier 2 members who are eligible to participate in the Tier
4 3 plan that they may also wish to obtain information and
5 counsel relating to their option from any other available
6 source, including but not limited to labor organizations,
7 private counsel, and financial advisors.
8 (b-5) A Tier 1 or Tier 2 member who elects to participate
9in the Tier 3 plan may irrevocably elect to terminate all
10participation in the defined benefit plan. Upon that election,
11the System shall transfer to the member's individual account an
12amount equal to the amount of contribution refund that the
13member would be eligible to receive if the member terminated
14employment on that date and elected a refund of contributions,
15including interest at the effective rate for the respective
16years. The System shall make the transfer as a tax free
17transfer in accordance with Internal Revenue Service
18guidelines, for purposes of funding the amount credited to the
19member's individual account.
20 (c) In no event shall the System, its staff, its authorized
21representatives, or the Board be liable for any information
22given to an employee under this Section. The System may
23coordinate with the Illinois Department of Central Management
24Services and other retirement systems administering a Tier 3
25plan in accordance with this amendatory Act of the 100th
26General Assembly to provide information concerning the impact

HB0436- 107 -LRB100 05378 RPS 15389 b
1of the Tier 3 plan set forth in this Section.
2 (d) Notwithstanding any other provision of this Section, no
3person shall begin participating in the Tier 3 plan until it
4has attained qualified plan status and received all necessary
5approvals from the U.S. Internal Revenue Service.
6 (e) The System shall report on its progress under this
7Section, including the available details of the Tier 3 plan and
8the System's plans for informing eligible Tier 1 and Tier 2
9members about the plan, to the Governor and the General
10Assembly on or before January 15, 2018.
11 (f) The intent of this amendatory Act of the 100th General
12Assembly is to ensure that the State's normal cost of
13participation in the Tier 3 plan is similar, and if possible
14equal, to the State's normal cost of participation in the
15defined benefit plan, unless a lower State's normal cost is
16necessary to ensure cost neutrality.
17 (40 ILCS 5/16-106.40 new)
18 Sec. 16-106.40. Tier 1 member. "Tier 1 member": A member
19under this Article who first became a member or participant
20before January 1, 2011 under any reciprocal retirement system
21or pension fund established under this Code other than a
22retirement system or pension fund established under Article 2,
233, 4, 5, 6, or 18 of this Code.
24 In the case of a Tier 1 member who elects to participate in
25the Tier 3 plan under Section 16-205.5 of this Code, that Tier

HB0436- 108 -LRB100 05378 RPS 15389 b
11 member shall be deemed a Tier 1 member only with respect to
2service performed or established before the effective date of
3that election.
4 (40 ILCS 5/16-106.41 new)
5 Sec. 16-106.41. Tier 2 member. "Tier 2 member": A member of
6the System who first becomes a member under this Article on or
7after January 1, 2011 and who is not a Tier 1 member.
8 In the case of a Tier 2 member who elects to participate in
9the Tier 3 plan under Section 16-205.5 of this Code, the Tier 2
10member shall be deemed a Tier 2 member only with respect to
11service performed or established before the effective date of
12that election.
13 (40 ILCS 5/16-106.42 new)
14 Sec. 16-106.42. Tier 3 member. "Tier 3 member": A Tier 1 or
15Tier 2 member who elects to participate in the Tier 3 plan
16under Section 16-205.5 of this Code, but only with respect to
17service performed on or after the effective date of that
18election.
19 (40 ILCS 5/16-123) (from Ch. 108 1/2, par. 16-123)
20 Sec. 16-123. Membership of System.
21 (a) Except as provided in subsection (c), the The
22membership of this System shall be composed of all teachers
23employed after June 30, 1939 who become members as a condition

HB0436- 109 -LRB100 05378 RPS 15389 b
1of employment on the date they become teachers. Membership
2shall continue until the date a member becomes an annuitant,
3dies, accepts a single-sum retirement benefit, accepts a
4refund, or forfeits the rights to a refund.
5 (b) This Article does not apply to any person first
6employed after June 30, 1979 as a public service employment
7program participant under the Federal Comprehensive Employment
8and Training Act and whose wages or fringe benefits are paid in
9whole or in part by funds provided under such Act.
10 (c) Notwithstanding any other provision of this Article,
11beginning on the effective date of this amendatory Act of the
12100th General Assembly, a person is not required, as a
13condition of employment or otherwise, to participate in this
14System. An active teacher may terminate his or her membership
15in this System (including active participation in the Tier 3
16plan, if applicable) by notifying the System in writing. An
17active teacher terminating his or her membership in this System
18under this subsection shall be entitled to a refund of his or
19her contributions (other than contributions to the Tier 3 plan
20under Section 16-205.5) minus the benefits received prior to
21the termination of membership.
22(Source: P.A. 87-11.)
23 (40 ILCS 5/16-127) (from Ch. 108 1/2, par. 16-127)
24 (Text of Section WITHOUT the changes made by P.A. 98-599,
25which has been held unconstitutional)

HB0436- 110 -LRB100 05378 RPS 15389 b
1 Sec. 16-127. Computation of creditable service.
2 (a) Each member shall receive regular credit for all
3service as a teacher from the date membership begins, for which
4satisfactory evidence is supplied and all contributions have
5been paid.
6 (b) The following periods of service shall earn optional
7credit and each member shall receive credit for all such
8service for which satisfactory evidence is supplied and all
9contributions have been paid as of the date specified:
10 (1) Prior service as a teacher.
11 (2) Service in a capacity essentially similar or
12 equivalent to that of a teacher, in the public common
13 schools in school districts in this State not included
14 within the provisions of this System, or of any other
15 State, territory, dependency or possession of the United
16 States, or in schools operated by or under the auspices of
17 the United States, or under the auspices of any agency or
18 department of any other State, and service during any
19 period of professional speech correction or special
20 education experience for a public agency within this State
21 or any other State, territory, dependency or possession of
22 the United States, and service prior to February 1, 1951 as
23 a recreation worker for the Illinois Department of Public
24 Safety, for a period not exceeding the lesser of 2/5 of the
25 total creditable service of the member or 10 years. The
26 maximum service of 10 years which is allowable under this

HB0436- 111 -LRB100 05378 RPS 15389 b
1 paragraph shall be reduced by the service credit which is
2 validated by other retirement systems under paragraph (i)
3 of Section 15-113 and paragraph 1 of Section 17-133. Credit
4 granted under this paragraph may not be used in
5 determination of a retirement annuity or disability
6 benefits unless the member has at least 5 years of
7 creditable service earned subsequent to this employment
8 with one or more of the following systems: Teachers'
9 Retirement System of the State of Illinois, State
10 Universities Retirement System, and the Public School
11 Teachers' Pension and Retirement Fund of Chicago. Whenever
12 such service credit exceeds the maximum allowed for all
13 purposes of this Article, the first service rendered in
14 point of time shall be considered. The changes to this
15 subdivision (b)(2) made by Public Act 86-272 shall apply
16 not only to persons who on or after its effective date
17 (August 23, 1989) are in service as a teacher under the
18 System, but also to persons whose status as such a teacher
19 terminated prior to such effective date, whether or not
20 such person is an annuitant on that date.
21 (3) Any periods immediately following teaching
22 service, under this System or under Article 17, (or
23 immediately following service prior to February 1, 1951 as
24 a recreation worker for the Illinois Department of Public
25 Safety) spent in active service with the military forces of
26 the United States; periods spent in educational programs

HB0436- 112 -LRB100 05378 RPS 15389 b
1 that prepare for return to teaching sponsored by the
2 federal government following such active military service;
3 if a teacher returns to teaching service within one
4 calendar year after discharge or after the completion of
5 the educational program, a further period, not exceeding
6 one calendar year, between time spent in military service
7 or in such educational programs and the return to
8 employment as a teacher under this System; and a period of
9 up to 2 years of active military service not immediately
10 following employment as a teacher.
11 The changes to this Section and Section 16-128 relating
12 to military service made by P.A. 87-794 shall apply not
13 only to persons who on or after its effective date are in
14 service as a teacher under the System, but also to persons
15 whose status as a teacher terminated prior to that date,
16 whether or not the person is an annuitant on that date. In
17 the case of an annuitant who applies for credit allowable
18 under this Section for a period of military service that
19 did not immediately follow employment, and who has made the
20 required contributions for such credit, the annuity shall
21 be recalculated to include the additional service credit,
22 with the increase taking effect on the date the System
23 received written notification of the annuitant's intent to
24 purchase the credit, if payment of all the required
25 contributions is made within 60 days of such notice, or
26 else on the first annuity payment date following the date

HB0436- 113 -LRB100 05378 RPS 15389 b
1 of payment of the required contributions. In calculating
2 the automatic annual increase for an annuity that has been
3 recalculated under this Section, the increase attributable
4 to the additional service allowable under P.A. 87-794 shall
5 be included in the calculation of automatic annual
6 increases accruing after the effective date of the
7 recalculation.
8 Credit for military service shall be determined as
9 follows: if entry occurs during the months of July, August,
10 or September and the member was a teacher at the end of the
11 immediately preceding school term, credit shall be granted
12 from July 1 of the year in which he or she entered service;
13 if entry occurs during the school term and the teacher was
14 in teaching service at the beginning of the school term,
15 credit shall be granted from July 1 of such year. In all
16 other cases where credit for military service is allowed,
17 credit shall be granted from the date of entry into the
18 service.
19 The total period of military service for which credit
20 is granted shall not exceed 5 years for any member unless
21 the service: (A) is validated before July 1, 1964, and (B)
22 does not extend beyond July 1, 1963. Credit for military
23 service shall be granted under this Section only if not
24 more than 5 years of the military service for which credit
25 is granted under this Section is used by the member to
26 qualify for a military retirement allotment from any branch

HB0436- 114 -LRB100 05378 RPS 15389 b
1 of the armed forces of the United States. The changes to
2 this subdivision (b)(3) made by Public Act 86-272 shall
3 apply not only to persons who on or after its effective
4 date (August 23, 1989) are in service as a teacher under
5 the System, but also to persons whose status as such a
6 teacher terminated prior to such effective date, whether or
7 not such person is an annuitant on that date.
8 (4) Any periods served as a member of the General
9 Assembly.
10 (5)(i) Any periods for which a teacher, as defined in
11 Section 16-106, is granted a leave of absence, provided he
12 or she returns to teaching service creditable under this
13 System or the State Universities Retirement System
14 following the leave; (ii) periods during which a teacher is
15 involuntarily laid off from teaching, provided he or she
16 returns to teaching following the lay-off; (iii) periods
17 prior to July 1, 1983 during which a teacher ceased covered
18 employment due to pregnancy, provided that the teacher
19 returned to teaching service creditable under this System
20 or the State Universities Retirement System following the
21 pregnancy and submits evidence satisfactory to the Board
22 documenting that the employment ceased due to pregnancy;
23 and (iv) periods prior to July 1, 1983 during which a
24 teacher ceased covered employment for the purpose of
25 adopting an infant under 3 years of age or caring for a
26 newly adopted infant under 3 years of age, provided that

HB0436- 115 -LRB100 05378 RPS 15389 b
1 the teacher returned to teaching service creditable under
2 this System or the State Universities Retirement System
3 following the adoption and submits evidence satisfactory
4 to the Board documenting that the employment ceased for the
5 purpose of adopting an infant under 3 years of age or
6 caring for a newly adopted infant under 3 years of age.
7 However, total credit under this paragraph (5) may not
8 exceed 3 years.
9 Any qualified member or annuitant may apply for credit
10 under item (iii) or (iv) of this paragraph (5) without
11 regard to whether service was terminated before the
12 effective date of this amendatory Act of 1997. In the case
13 of an annuitant who establishes credit under item (iii) or
14 (iv), the annuity shall be recalculated to include the
15 additional service credit. The increase in annuity shall
16 take effect on the date the System receives written
17 notification of the annuitant's intent to purchase the
18 credit, if the required evidence is submitted and the
19 required contribution paid within 60 days of that
20 notification, otherwise on the first annuity payment date
21 following the System's receipt of the required evidence and
22 contribution. The increase in an annuity recalculated
23 under this provision shall be included in the calculation
24 of automatic annual increases in the annuity accruing after
25 the effective date of the recalculation.
26 Optional credit may be purchased under this subsection

HB0436- 116 -LRB100 05378 RPS 15389 b
1 (b)(5) for periods during which a teacher has been granted
2 a leave of absence pursuant to Section 24-13 of the School
3 Code. A teacher whose service under this Article terminated
4 prior to the effective date of P.A. 86-1488 shall be
5 eligible to purchase such optional credit. If a teacher who
6 purchases this optional credit is already receiving a
7 retirement annuity under this Article, the annuity shall be
8 recalculated as if the annuitant had applied for the leave
9 of absence credit at the time of retirement. The difference
10 between the entitled annuity and the actual annuity shall
11 be credited to the purchase of the optional credit. The
12 remainder of the purchase cost of the optional credit shall
13 be paid on or before April 1, 1992.
14 The change in this paragraph made by Public Act 86-273
15 shall be applicable to teachers who retire after June 1,
16 1989, as well as to teachers who are in service on that
17 date.
18 (6) For a person who first becomes a member before the
19 effective date of this amendatory Act of the 100th General
20 Assembly, any Any days of unused and uncompensated
21 accumulated sick leave earned by a teacher. The service
22 credit granted under this paragraph shall be the ratio of
23 the number of unused and uncompensated accumulated sick
24 leave days to 170 days, subject to a maximum of 2 years of
25 service credit. Prior to the member's retirement, each
26 former employer shall certify to the System the number of

HB0436- 117 -LRB100 05378 RPS 15389 b
1 unused and uncompensated accumulated sick leave days
2 credited to the member at the time of termination of
3 service. The period of unused sick leave shall not be
4 considered in determining the effective date of
5 retirement. A member is not required to make contributions
6 in order to obtain service credit for unused sick leave.
7 Credit for sick leave shall, at retirement, be granted
8 by the System for any retiring regional or assistant
9 regional superintendent of schools who first becomes a
10 member before the effective date of this amendatory Act of
11 the 100th General Assembly at the rate of 6 days per year
12 of creditable service or portion thereof established while
13 serving as such superintendent or assistant
14 superintendent.
15 (7) Periods prior to February 1, 1987 served as an
16 employee of the Illinois Mathematics and Science Academy
17 for which credit has not been terminated under Section
18 15-113.9 of this Code.
19 (8) Service as a substitute teacher for work performed
20 prior to July 1, 1990.
21 (9) Service as a part-time teacher for work performed
22 prior to July 1, 1990.
23 (10) Up to 2 years of employment with Southern Illinois
24 University - Carbondale from September 1, 1959 to August
25 31, 1961, or with Governors State University from September
26 1, 1972 to August 31, 1974, for which the teacher has no

HB0436- 118 -LRB100 05378 RPS 15389 b
1 credit under Article 15. To receive credit under this item
2 (10), a teacher must apply in writing to the Board and pay
3 the required contributions before May 1, 1993 and have at
4 least 12 years of service credit under this Article.
5 (b-1) A member may establish optional credit for up to 2
6years of service as a teacher or administrator employed by a
7private school recognized by the Illinois State Board of
8Education, provided that the teacher (i) was certified under
9the law governing the certification of teachers at the time the
10service was rendered, (ii) applies in writing on or after
11August 1, 2009 and on or before August 1, 2012, (iii) supplies
12satisfactory evidence of the employment, (iv) completes at
13least 10 years of contributing service as a teacher as defined
14in Section 16-106, and (v) pays the contribution required in
15subsection (d-5) of Section 16-128. The member may apply for
16credit under this subsection and pay the required contribution
17before completing the 10 years of contributing service required
18under item (iv), but the credit may not be used until the item
19(iv) contributing service requirement has been met.
20 (c) The service credits specified in this Section shall be
21granted only if: (1) such service credits are not used for
22credit in any other statutory tax-supported public employee
23retirement system other than the federal Social Security
24program; and (2) the member makes the required contributions as
25specified in Section 16-128. Except as provided in subsection
26(b-1) of this Section, the service credit shall be effective as

HB0436- 119 -LRB100 05378 RPS 15389 b
1of the date the required contributions are completed.
2 Any service credits granted under this Section shall
3terminate upon cessation of membership for any cause.
4 Credit may not be granted under this Section covering any
5period for which an age retirement or disability retirement
6allowance has been paid.
7(Source: P.A. 96-546, eff. 8-17-09.)
8 (40 ILCS 5/16-152.1) (from Ch. 108 1/2, par. 16-152.1)
9 Sec. 16-152.1. Pickup of contributions.
10 (a) Each employer may pick up the member contributions
11required under Section 16-152 for all salary earned after
12December 31, 1981. If an employer decides not to pick up the
13member contributions, the amount that would have been picked up
14shall continue to be deducted from salary. If contributions are
15picked up, they shall be treated as employer contributions in
16determining tax treatment under the United States Internal
17Revenue Code. The employer shall pay these member contributions
18from the same source of funds which is used in paying salary to
19the member. The employer may pick up these contributions by a
20reduction in the cash salary of the member or by an offset
21against a future salary increase or by a combination of a
22reduction in salary and offset against a future salary
23increase. If member contributions are picked up, they shall be
24treated for all purposes of this Article 16 in the same manner
25as member contributions made prior to the date the pick up

HB0436- 120 -LRB100 05378 RPS 15389 b
1began.
2 (b) The State Board of Education shall pick up the
3contributions of regional superintendents required under
4Section 16-152 for all salary earned for the 1982 calendar year
5and thereafter.
6 (c) Effective July 1, 1983, each employer shall pick up the
7member contributions required under Section 16-152 for all
8salary earned after such date. Contributions so picked up shall
9be treated as employer contributions in determining tax
10treatment under the United States Internal Revenue Code. The
11employer shall pay these member contributions from the same
12source of funds which is used in paying salary to the member.
13The employer may pick up these contributions by a reduction in
14the cash salary of the member or by an offset against a future
15salary increase or by a combination of a reduction in salary
16and offset against a future salary increase. Member
17contributions so picked up shall be treated for all purposes of
18this Article 16 in the same manner as member contributions made
19prior to the date the pick up began.
20 (d) Subject to the requirements of federal law and the
21rules of the board, beginning July 1, 1998 a member who is
22employed on a full-time basis may elect to have the employer
23pick up optional contributions that the member has elected to
24pay to the System, and the contributions so picked up shall be
25treated as employer contributions for the purposes of
26determining federal tax treatment. The election to have

HB0436- 121 -LRB100 05378 RPS 15389 b
1optional contributions picked up is irrevocable. At the time of
2making the election, the member shall execute a binding,
3irrevocable payroll deduction authorization. Upon receiving
4notice of the election, the employer shall pick up the
5contributions by a reduction in the cash salary of the member
6and shall pay the contributions from the same source of funds
7that is used to pay earnings to the member.
8 (e) Beginning on the effective date of this amendatory Act
9of the 100th General Assembly, no employer shall pay employee
10contributions on behalf of an employee, except for the sole
11purpose of allowing the employee to make pre-tax contributions
12as provided in this Section. The provisions of this subsection
13(e) do not apply to an employment contract or collective
14bargaining agreement that is in effect on the effective date of
15this amendatory Act of the 100th General Assembly. However, any
16such contract or agreement that is subsequently modified,
17amended, or renewed shall be subject to the provisions of this
18subsection (e).
19(Source: P.A. 90-448, eff. 8-16-97.)
20 (40 ILCS 5/16-203)
21 (Text of Section WITHOUT the changes made by P.A. 98-599,
22which has been held unconstitutional)
23 Sec. 16-203. Application and expiration of new benefit
24increases.
25 (a) As used in this Section, "new benefit increase" means

HB0436- 122 -LRB100 05378 RPS 15389 b
1an increase in the amount of any benefit provided under this
2Article, or an expansion of the conditions of eligibility for
3any benefit under this Article, that results from an amendment
4to this Code that takes effect after June 1, 2005 (the
5effective date of Public Act 94-4). "New benefit increase",
6however, does not include any benefit increase resulting from
7the changes made to this Article by Public Act 95-910 or this
8amendatory Act of the 100th General Assembly this amendatory
9Act of the 95th General Assembly.
10 (b) Notwithstanding any other provision of this Code or any
11subsequent amendment to this Code, every new benefit increase
12is subject to this Section and shall be deemed to be granted
13only in conformance with and contingent upon compliance with
14the provisions of this Section.
15 (c) The Public Act enacting a new benefit increase must
16identify and provide for payment to the System of additional
17funding at least sufficient to fund the resulting annual
18increase in cost to the System as it accrues.
19 Every new benefit increase is contingent upon the General
20Assembly providing the additional funding required under this
21subsection. The Commission on Government Forecasting and
22Accountability shall analyze whether adequate additional
23funding has been provided for the new benefit increase and
24shall report its analysis to the Public Pension Division of the
25Department of Financial and Professional Regulation. A new
26benefit increase created by a Public Act that does not include

HB0436- 123 -LRB100 05378 RPS 15389 b
1the additional funding required under this subsection is null
2and void. If the Public Pension Division determines that the
3additional funding provided for a new benefit increase under
4this subsection is or has become inadequate, it may so certify
5to the Governor and the State Comptroller and, in the absence
6of corrective action by the General Assembly, the new benefit
7increase shall expire at the end of the fiscal year in which
8the certification is made.
9 (d) Every new benefit increase shall expire 5 years after
10its effective date or on such earlier date as may be specified
11in the language enacting the new benefit increase or provided
12under subsection (c). This does not prevent the General
13Assembly from extending or re-creating a new benefit increase
14by law.
15 (e) Except as otherwise provided in the language creating
16the new benefit increase, a new benefit increase that expires
17under this Section continues to apply to persons who applied
18and qualified for the affected benefit while the new benefit
19increase was in effect and to the affected beneficiaries and
20alternate payees of such persons, but does not apply to any
21other person, including without limitation a person who
22continues in service after the expiration date and did not
23apply and qualify for the affected benefit while the new
24benefit increase was in effect.
25(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)

HB0436- 124 -LRB100 05378 RPS 15389 b
1 (40 ILCS 5/16-205.5 new)
2 Sec. 16-205.5. Tier 3 plan.
3 (a) By July 1, 2018, the System shall prepare and implement
4a Tier 3 plan. The Tier 3 plan developed under this Section
5shall be a plan that aggregates State and employee
6contributions in individual participant accounts which, after
7meeting any other requirements, are used for payouts after
8retirement in accordance with this Section and any other
9applicable laws.
10 As used in this Section, "defined benefit plan" means the
11retirement plan available under this Article to Tier 1 or Tier
122 members who have not made the election authorized under this
13Section.
14 (1) A participant in the Tier 3 plan shall pay employee
15 contributions at a rate determined by the participant, but
16 not less than 3% of salary and not more than a percentage
17 of salary determined by the Board in accordance with the
18 requirements of State and federal law.
19 (2) State contributions shall be paid into the accounts
20 of all participants in the Tier 3 plan at a uniform rate,
21 expressed as a percentage of salary and determined for each
22 year. This rate shall be no higher than 7.6% of salary and
23 shall be no lower than 3% of salary. The State shall adjust
24 this rate annually.
25 (3) The Tier 3 plan shall require 5 years of
26 participation in the Tier 3 plan before vesting in State

HB0436- 125 -LRB100 05378 RPS 15389 b
1 contributions. If the participant fails to vest in them,
2 the State contributions, and the earnings thereon, shall be
3 forfeited.
4 (4) The Tier 3 plan may provide for participants in the
5 plan to be eligible for the defined disability benefits
6 available to other participants under this Article. If it
7 does, the System shall reduce the employee contributions
8 credited to the member's Tier 3 plan account by an amount
9 determined by the System to cover the cost of offering such
10 benefits.
11 (5) The Tier 3 plan shall provide a variety of options
12 for investments. These options shall include investments
13 in a fund created by the System and managed in accordance
14 with legal and fiduciary standards, as well as investment
15 options otherwise available.
16 (6) The Tier 3 plan shall provide a variety of options
17 for payouts to participants in the Tier 3 plan who are no
18 longer active in the System and their survivors.
19 (7) To the extent authorized under federal law and as
20 authorized by the System, the plan shall allow former
21 participants in the plan to transfer or roll over employee
22 and vested State contributions, and the earnings thereon,
23 from the Tier 3 plan into other qualified retirement plans.
24 (8) The System shall reduce the employee contributions
25 credited to the member's Tier 3 plan account by an amount
26 determined by the System to cover the cost of offering

HB0436- 126 -LRB100 05378 RPS 15389 b
1 these benefits and any applicable administrative fees.
2 (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
3member of this System may elect, in writing, to cease accruing
4benefits in the defined benefit plan and begin accruing
5benefits for future service in the Tier 3 plan. An active Tier
61 or Tier 2 member who elects to cease accruing benefits in his
7or her defined benefit plan shall be prohibited from purchasing
8service credit on or after the date of his or her election. A
9Tier 1 or Tier 2 member making the irrevocable election
10provided under this subsection shall not receive interest
11accruals to his or her benefit under paragraph (A) of
12subsection (a) of Section 16-133 of this Code on or after the
13date of his or her election. The election to participate in the
14Tier 3 plan is voluntary and irrevocable.
15 (1) Service credit under the Tier 3 plan may be used
16 for determining retirement eligibility under the defined
17 benefit plan.
18 (2) The System shall make a good faith effort to
19 contact all active Tier 1 and Tier 2 members who are
20 eligible to participate in the Tier 3 plan. The System
21 shall mail information describing the option to join the
22 Tier 3 plan to each of these employees to his or her last
23 known address on file with the System. If the employee is
24 not responsive to other means of contact, it is sufficient
25 for the System to publish the details of the option on its
26 website.

HB0436- 127 -LRB100 05378 RPS 15389 b
1 (3) Upon request for further information describing
2 the option, the System shall provide employees with
3 information from the System before exercising the option to
4 join the plan, including information on the impact to their
5 benefits and service. The individual consultation shall
6 include projections of the member's defined benefits at
7 retirement or earlier termination of service and the value
8 of the member's account at retirement or earlier
9 termination of service. The System shall not provide advice
10 or counseling with respect to whether the employee should
11 exercise the option. The System shall inform Tier 1 and
12 Tier 2 members who are eligible to participate in the Tier
13 3 plan that they may also wish to obtain information and
14 counsel relating to their option from any other available
15 source, including but not limited to labor organizations,
16 private counsel, and financial advisors.
17 (b-5) A Tier 1 or Tier 2 member who elects to participate
18in the Tier 3 plan may irrevocably elect to terminate all
19participation in the defined benefit plan. Upon that election,
20the System shall transfer to the member's individual account an
21amount equal to the amount of contribution refund that the
22member would be eligible to receive if the member terminated
23employment on that date and elected a refund of contributions,
24including regular interest for the respective years. The System
25shall make the transfer as a tax free transfer in accordance
26with Internal Revenue Service guidelines, for purposes of

HB0436- 128 -LRB100 05378 RPS 15389 b
1funding the amount credited to the member's individual account.
2 (c) In no event shall the System, its staff, its authorized
3representatives, or the Board be liable for any information
4given to an employee under this Section. The System may
5coordinate with the Illinois Department of Central Management
6Services and other retirement systems administering a Tier 3
7plan in accordance with this amendatory Act of the 100th
8General Assembly to provide information concerning the impact
9of the Tier 3 plan set forth in this Section.
10 (d) Notwithstanding any other provision of this Section, no
11person shall begin participating in the Tier 3 plan until it
12has attained qualified plan status and received all necessary
13approvals from the U.S. Internal Revenue Service.
14 (e) The System shall report on its progress under this
15Section, including the available details of the Tier 3 plan and
16the System's plans for informing eligible Tier 1 and Tier 2
17members about the plan, to the Governor and the General
18Assembly on or before January 15, 2018.
19 (f) The intent of this amendatory Act of the 100th General
20Assembly is to ensure that the State's normal cost of
21participation in the Tier 3 plan is similar, and if possible
22equal, to the State's normal cost of participation in the
23defined benefit plan, unless a lower State's normal cost is
24necessary to ensure cost neutrality.
25 (40 ILCS 5/18-110.1 new)

HB0436- 129 -LRB100 05378 RPS 15389 b
1 Sec. 18-110.1. Tier 1 participant. "Tier 1 participant": A
2participant who first became a participant of this System
3before January 1, 2011.
4 In the case of a Tier 1 participant who elects to
5participate in the Tier 3 plan under Section 18-121.5 of this
6Code, that Tier 1 participant shall be deemed a Tier 1
7participant only with respect to service performed or
8established before the effective date of that election.
9 (40 ILCS 5/18-110.2 new)
10 Sec. 18-110.2. Tier 2 participant. "Tier 2 participant": A
11participant who first becomes a participant of this System on
12or after January 1, 2011.
13 In the case of a Tier 2 participant who elects to
14participate in the Tier 3 plan under Section 18-121.5 of this
15Code, that Tier 2 participant shall be deemed a Tier 2
16participant only with respect to service performed or
17established before the effective date of that election.
18 (40 ILCS 5/18-110.3 new)
19 Sec. 18-110.3. Tier 3 participant. "Tier 3 participant": A
20Tier 1 or Tier 2 participant who elects to participate in the
21Tier 3 plan under Section 18-121.5 of this Code, but only with
22respect to service performed on or after the effective date of
23that election.

HB0436- 130 -LRB100 05378 RPS 15389 b
1 (40 ILCS 5/18-120) (from Ch. 108 1/2, par. 18-120)
2 Sec. 18-120. Employee participation.
3 (a) Except as provided in subsection (b), an An eligible
4judge who is not a participant shall become a participant
5beginning on the date he or she becomes an eligible judge,
6unless the judge files with the board a written notice of
7election not to participate within 30 days of the date of being
8notified of the option.
9 A person electing not to participate shall thereafter be
10ineligible to become a participant unless the election is
11revoked as provided in Section 18-121.
12 (b) Notwithstanding any other provision of this Article, an
13active participant may terminate his or her participation in
14this System (including active participation in the Tier 3 plan,
15if applicable) by notifying the System in writing. An active
16participant terminating participation in this System under
17this subsection shall be entitled to a refund of his or her
18contributions (other than contributions to the Tier 3 plan
19under Section 18-121.5) minus the benefits received prior to
20the termination of participation.
21(Source: P.A. 83-1440.)
22 (40 ILCS 5/18-121.5 new)
23 Sec. 18-121.5. Tier 3 plan.
24 (a) By July 1, 2018, the System shall prepare and implement
25a Tier 3 plan. The Tier 3 plan developed under this Section

HB0436- 131 -LRB100 05378 RPS 15389 b
1shall be a plan that aggregates State and employee
2contributions in individual participant accounts which, after
3meeting any other requirements, are used for payouts after
4retirement in accordance with this Section and any other
5applicable laws.
6 As used in this Section, "defined benefit plan" means the
7retirement plan available under this Article to Tier 1 or Tier
82 participants who have not made the election authorized under
9this Section.
10 (1) A participant in the Tier 3 plan shall pay employee
11 contributions at a rate determined by the participant, but
12 not less than 3% of salary and not more than a percentage
13 of salary determined by the Board in accordance with the
14 requirements of State and federal law.
15 (2) State contributions shall be paid into the accounts
16 of all participants in the Tier 3 plan at a uniform rate,
17 expressed as a percentage of salary and determined for each
18 year. This rate shall be no higher than 7.6% of salary and
19 shall be no lower than 3% of salary. The State shall adjust
20 this rate annually.
21 (3) The Tier 3 plan shall require 5 years of
22 participation in the Tier 3 plan before vesting in State
23 contributions. If the participant fails to vest in them,
24 the State contributions, and the earnings thereon, shall be
25 forfeited.
26 (4) The Tier 3 plan may provide for participants in the

HB0436- 132 -LRB100 05378 RPS 15389 b
1 plan to be eligible for defined disability benefits. If it
2 does, the System shall reduce the employee contributions
3 credited to the participant's Tier 3 plan account by an
4 amount determined by the System to cover the cost of
5 offering such benefits.
6 (5) The Tier 3 plan shall provide a variety of options
7 for investments. These options shall include investments
8 handled by the Illinois State Board of Investment as well
9 as private sector investment options.
10 (6) The Tier 3 plan shall provide a variety of options
11 for payouts to participants in the Tier 3 plan who are no
12 longer active in the System and their survivors.
13 (7) To the extent authorized under federal law and as
14 authorized by the System, the plan shall allow former
15 participants in the plan to transfer or roll over employee
16 and vested State contributions, and the earnings thereon,
17 into other qualified retirement plans.
18 (8) The System shall reduce the employee contributions
19 credited to the participant's Tier 3 plan account by an
20 amount determined by the System to cover the cost of
21 offering these benefits and any applicable administrative
22 fees.
23 (b) Under the Tier 3 plan, an active Tier 1 or Tier 2
24participant of this System may elect, in writing, to cease
25accruing benefits in the defined benefit plan and begin
26accruing benefits for future service in the Tier 3 plan. The

HB0436- 133 -LRB100 05378 RPS 15389 b
1election to participate in the Tier 3 plan is voluntary and
2irrevocable.
3 (1) Service credit under the Tier 3 plan may be used
4 for determining retirement eligibility under the defined
5 benefit plan.
6 (2) The System shall make a good faith effort to
7 contact all active Tier 1 and Tier 2 participants who are
8 eligible to participate in the Tier 3 plan. The System
9 shall mail information describing the option to join the
10 Tier 3 plan to each of these employees to his or her last
11 known address on file with the System. If the employee is
12 not responsive to other means of contact, it is sufficient
13 for the System to publish the details of the option on its
14 website.
15 (3) Upon request for further information describing
16 the option, the System shall provide employees with
17 information from the System before exercising the option to
18 join the plan, including information on the impact to their
19 benefits and service. The individual consultation shall
20 include projections of the participant's defined benefits
21 at retirement or earlier termination of service and the
22 value of the participant's account at retirement or earlier
23 termination of service. The System shall not provide advice
24 or counseling with respect to whether the employee should
25 exercise the option. The System shall inform Tier 1 and
26 Tier 2 participants who are eligible to participate in the

HB0436- 134 -LRB100 05378 RPS 15389 b
1 Tier 3 plan that they may also wish to obtain information
2 and counsel relating to their option from any other
3 available source, including but not limited to private
4 counsel and financial advisors.
5 (b-5) A Tier 1 or Tier 2 participant who elects to
6participate in the Tier 3 plan may irrevocably elect to
7terminate all participation in the defined benefit plan. Upon
8that election, the System shall transfer to the participant's
9individual account an amount equal to the amount of
10contribution refund that the participant would be eligible to
11receive if the participant terminated employment on that date
12and elected a refund of contributions, including interest at
13the prescribed rate of interest for the respective years. The
14System shall make the transfer as a tax free transfer in
15accordance with Internal Revenue Service guidelines, for
16purposes of funding the amount credited to the participant's
17individual account.
18 (c) In no event shall the System, its staff, its authorized
19representatives, or the Board be liable for any information
20given to an employee under this Section. The System may
21coordinate with the Illinois Department of Central Management
22Services and other retirement systems administering a Tier 3
23plan in accordance with this amendatory Act of the 100th
24General Assembly to provide information concerning the impact
25of the Tier 3 plan set forth in this Section.
26 (d) Notwithstanding any other provision of this Section, no

HB0436- 135 -LRB100 05378 RPS 15389 b
1person shall begin participating in the Tier 3 plan until it
2has attained qualified plan status and received all necessary
3approvals from the U.S. Internal Revenue Service.
4 (e) The System shall report on its progress under this
5Section, including the available details of the Tier 3 plan and
6the System's plans for informing eligible Tier 1 and Tier 2
7participants about the plan, to the Governor and the General
8Assembly on or before January 15, 2018.
9 (f) The Illinois State Board of Investment shall be the
10plan sponsor for the Tier 3 plan established under this
11Section.
12 (g) The intent of this amendatory Act of the 100th General
13Assembly is to ensure that the State's normal cost of
14participation in the Tier 3 plan is similar, and if possible
15equal, to the State's normal cost of participation in the
16defined benefit plan, unless a lower State's normal cost is
17necessary to ensure cost neutrality.
18 (40 ILCS 5/18-124) (from Ch. 108 1/2, par. 18-124)
19 Sec. 18-124. Retirement annuities - conditions for
20eligibility.
21 (a) This subsection (a) applies to a Tier 1 participant who
22first serves as a judge before the effective date of this
23amendatory Act of the 96th General Assembly.
24 A participant whose employment as a judge is terminated,
25regardless of age or cause is entitled to a retirement annuity

HB0436- 136 -LRB100 05378 RPS 15389 b
1beginning on the date specified in a written application
2subject to the following:
3 (1) the date the annuity begins is subsequent to the
4 date of final termination of employment, or the date 30
5 days prior to the receipt of the application by the board
6 for annuities based on disability, or one year before the
7 receipt of the application by the board for annuities based
8 on attained age;
9 (2) the participant is at least age 55, or has become
10 permanently disabled and as a consequence is unable to
11 perform the duties of his or her office;
12 (3) the participant has at least 10 years of service
13 credit except that a participant terminating service after
14 June 30 1975, with at least 6 years of service credit,
15 shall be entitled to a retirement annuity at age 62 or
16 over;
17 (4) the participant is not receiving or entitled to
18 receive, at the date of retirement, any salary from an
19 employer for service currently performed.
20 (b) This subsection (b) applies to a Tier 2 participant who
21first serves as a judge on or after the effective date of this
22amendatory Act of the 96th General Assembly.
23 A participant who has at least 8 years of creditable
24service is entitled to a retirement annuity when he or she has
25attained age 67.
26 A member who has attained age 62 and has at least 8 years

HB0436- 137 -LRB100 05378 RPS 15389 b
1of service credit may elect to receive the lower retirement
2annuity provided in subsection (d) of Section 18-125 of this
3Code.
4(Source: P.A. 96-889, eff. 1-1-11.)
5 (40 ILCS 5/18-125) (from Ch. 108 1/2, par. 18-125)
6 Sec. 18-125. Retirement annuity amount.
7 (a) The annual retirement annuity for a participant who
8terminated service as a judge prior to July 1, 1971 shall be
9based on the law in effect at the time of termination of
10service.
11 (b) Except as provided in subsection (b-5), effective July
121, 1971, the retirement annuity for any participant in service
13on or after such date shall be 3 1/2% of final average salary,
14as defined in this Section, for each of the first 10 years of
15service, and 5% of such final average salary for each year of
16service in on excess of 10.
17 For purposes of this Section, final average salary for a
18Tier 1 participant who first serves as a judge before August
1910, 2009 (the effective date of Public Act 96-207) shall be:
20 (1) the average salary for the last 4 years of credited
21 service as a judge for a participant who terminates service
22 before July 1, 1975.
23 (2) for a participant who terminates service after June
24 30, 1975 and before July 1, 1982, the salary on the last
25 day of employment as a judge.

HB0436- 138 -LRB100 05378 RPS 15389 b
1 (3) for any participant who terminates service after
2 June 30, 1982 and before January 1, 1990, the average
3 salary for the final year of service as a judge.
4 (4) for a participant who terminates service on or
5 after January 1, 1990 but before July 14, 1995 (the
6 effective date of Public Act 89-136) this amendatory Act of
7 1995, the salary on the last day of employment as a judge.
8 (5) for a participant who terminates service on or
9 after July 14, 1995 (the effective date of Public Act
10 89-136) this amendatory Act of 1995, the salary on the last
11 day of employment as a judge, or the highest salary
12 received by the participant for employment as a judge in a
13 position held by the participant for at least 4 consecutive
14 years, whichever is greater.
15 However, in the case of a participant who elects to
16discontinue contributions as provided in subdivision (a)(2) of
17Section 18-133, the time of such election shall be considered
18the last day of employment in the determination of final
19average salary under this subsection.
20 For a Tier 1 participant who first serves as a judge on or
21after August 10, 2009 (the effective date of Public Act 96-207)
22and before January 1, 2011 (the effective date of Public Act
2396-889), final average salary shall be the average monthly
24salary obtained by dividing the total salary of the participant
25during the period of: (1) the 48 consecutive months of service
26within the last 120 months of service in which the total

HB0436- 139 -LRB100 05378 RPS 15389 b
1compensation was the highest, or (2) the total period of
2service, if less than 48 months, by the number of months of
3service in that period.
4 The maximum retirement annuity for any participant shall be
585% of final average salary.
6 (b-5) Notwithstanding any other provision of this Article,
7for a Tier 2 participant who first serves as a judge on or
8after January 1, 2011 (the effective date of Public Act
996-889), the annual retirement annuity is 3% of the
10participant's final average salary for each year of service.
11The maximum retirement annuity payable shall be 60% of the
12participant's final average salary.
13 For a Tier 2 participant who first serves as a judge on or
14after January 1, 2011 (the effective date of Public Act
1596-889), final average salary shall be the average monthly
16salary obtained by dividing the total salary of the judge
17during the 96 consecutive months of service within the last 120
18months of service in which the total salary was the highest by
19the number of months of service in that period; however,
20beginning January 1, 2011, the annual salary may not exceed
21$106,800, except that that amount shall annually thereafter be
22increased by the lesser of (i) 3% of that amount, including all
23previous adjustments, or (ii) the annual unadjusted percentage
24increase (but not less than zero) in the consumer price index-u
25for the 12 months ending with the September preceding each
26November 1. "Consumer price index-u" means the index published

HB0436- 140 -LRB100 05378 RPS 15389 b
1by the Bureau of Labor Statistics of the United States
2Department of Labor that measures the average change in prices
3of goods and services purchased by all urban consumers, United
4States city average, all items, 1982-84 = 100. The new amount
5resulting from each annual adjustment shall be determined by
6the Public Pension Division of the Department of Insurance and
7made available to the Board by November 1st of each year.
8 (c) The retirement annuity for a participant who retires
9prior to age 60 with less than 28 years of service in the
10System shall be reduced 1/2 of 1% for each month that the
11participant's age is under 60 years at the time the annuity
12commences. However, for a participant who retires on or after
13December 10, 1999 (the effective date of Public Act 91-653)
14this amendatory Act of the 91st General Assembly, the
15percentage reduction in retirement annuity imposed under this
16subsection shall be reduced by 5/12 of 1% for every month of
17service in this System in excess of 20 years, and therefore a
18participant with at least 26 years of service in this System
19may retire at age 55 without any reduction in annuity.
20 The reduction in retirement annuity imposed by this
21subsection shall not apply in the case of retirement on account
22of disability.
23 (d) Notwithstanding any other provision of this Article,
24for a Tier 2 participant who first serves as a judge on or
25after January 1, 2011 (the effective date of Public Act 96-889)
26and who is retiring after attaining age 62, the retirement

HB0436- 141 -LRB100 05378 RPS 15389 b
1annuity shall be reduced by 1/2 of 1% for each month that the
2participant's age is under age 67 at the time the annuity
3commences.
4(Source: P.A. 96-207, eff. 8-10-09; 96-889, eff. 1-1-11;
596-1000, eff. 7-2-10; 96-1490, eff. 1-1-11; revised 9-9-16.)
6 (40 ILCS 5/18-125.1) (from Ch. 108 1/2, par. 18-125.1)
7 Sec. 18-125.1. Automatic increase in retirement annuity. A
8participant who retires from service after June 30, 1969,
9shall, in January of the year next following the year in which
10the first anniversary of retirement occurs, and in January of
11each year thereafter, have the amount of his or her originally
12granted retirement annuity increased as follows: for each year
13up to and including 1971, 1 1/2%; for each year from 1972
14through 1979 inclusive, 2%; and for 1980 and each year
15thereafter, 3%.
16 Notwithstanding any other provision of this Article, a
17retirement annuity for a Tier 2 participant who first serves as
18a judge on or after January 1, 2011 (the effective date of
19Public Act 96-889) shall be increased in January of the year
20next following the year in which the first anniversary of
21retirement occurs, but in no event prior to age 67, and in
22January of each year thereafter, by an amount equal to 3% or
23the annual percentage increase in the consumer price index-u as
24determined by the Public Pension Division of the Department of
25Insurance under subsection (b-5) of Section 18-125, whichever

HB0436- 142 -LRB100 05378 RPS 15389 b
1is less, of the retirement annuity then being paid.
2 This Section is not applicable to a participant who retires
3before he or she has made contributions at the rate prescribed
4in Section 18-133 for automatic increases for not less than the
5equivalent of one full year, unless such a participant arranges
6to pay the system the amount required to bring the total
7contributions for the automatic increase to the equivalent of
8one year's contribution based upon his or her last year's
9salary.
10 This Section is applicable to all participants (other than
11Tier 3 participants who do not have any service credit as a
12Tier 1 or Tier 2 participant) in service after June 30, 1969
13unless a participant has elected, prior to September 1, 1969,
14in a written direction filed with the board not to be subject
15to the provisions of this Section. Any participant in service
16on or after July 1, 1992 shall have the option of electing
17prior to April 1, 1993, in a written direction filed with the
18board, to be covered by the provisions of the 1969 amendatory
19Act. Such participant shall be required to make the aforesaid
20additional contributions with compound interest at 4% per
21annum.
22 Any participant who has become eligible to receive the
23maximum rate of annuity and who resumes service as a judge
24after receiving a retirement annuity under this Article shall
25have the amount of his or her retirement annuity increased by
263% of the originally granted annuity amount for each year of

HB0436- 143 -LRB100 05378 RPS 15389 b
1such resumed service, beginning in January of the year next
2following the date of such resumed service, upon subsequent
3termination of such resumed service.
4 Beginning January 1, 1990, all automatic annual increases
5payable under this Section shall be calculated as a percentage
6of the total annuity payable at the time of the increase,
7including previous increases granted under this Article.
8(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
9 (40 ILCS 5/18-127) (from Ch. 108 1/2, par. 18-127)
10 Sec. 18-127. Retirement annuity - suspension on
11reemployment.
12 (a) A participant receiving a retirement annuity who is
13regularly employed for compensation by an employer other than a
14county, in any capacity, shall have his or her retirement
15annuity payments suspended during such employment. Upon
16termination of such employment, retirement annuity payments at
17the previous rate shall be resumed.
18 If such a participant resumes service as a judge, he or she
19shall receive credit for any additional service. Upon
20subsequent retirement, his or her retirement annuity shall be
21the amount previously granted, plus the amount earned by the
22additional judicial service under the provisions in effect
23during the period of such additional service. However, if the
24participant was receiving the maximum rate of annuity at the
25time of re-employment, he or she may elect, in a written

HB0436- 144 -LRB100 05378 RPS 15389 b
1direction filed with the board, not to receive any additional
2service credit during the period of re-employment. In such
3case, contributions shall not be required during the period of
4re-employment. Any such election shall be irrevocable.
5 (b) Beginning January 1, 1991, any participant receiving a
6retirement annuity who accepts temporary employment from an
7employer other than a county for a period not exceeding 75
8working days in any calendar year shall not be deemed to be
9regularly employed for compensation or to have resumed service
10as a judge for the purposes of this Article. A day shall be
11considered a working day if the annuitant performs on it any of
12his duties under the temporary employment agreement.
13 (c) Except as provided in subsection (a), beginning January
141, 1993, retirement annuities shall not be subject to
15suspension upon resumption of employment for an employer, and
16any retirement annuity that is then so suspended shall be
17reinstated on that date.
18 (d) The changes made in this Section by this amendatory Act
19of 1993 shall apply to judges no longer in service on its
20effective date, as well as to judges serving on or after that
21date.
22 (e) A participant receiving a retirement annuity under this
23Article who serves as a part-time employee in any of the
24following positions: Legislative Inspector General, Special
25Legislative Inspector General, employee of the Office of the
26Legislative Inspector General, Executive Director of the

HB0436- 145 -LRB100 05378 RPS 15389 b
1Legislative Ethics Commission, or staff of the Legislative
2Ethics Commission, but has not elected to participate in the
3Article 14 System with respect to that service, shall not be
4deemed to be regularly employed for compensation by an employer
5other than a county, nor to have resumed service as a judge, on
6the basis of that service, and the retirement annuity payments
7and other benefits of that person under this Code shall not be
8suspended, diminished, or otherwise impaired solely as a
9consequence of that service. This subsection (e) applies
10without regard to whether the person is in service as a judge
11under this Article on or after the effective date of this
12amendatory Act of the 93rd General Assembly. In this
13subsection, a "part-time employee" is a person who is not
14required to work at least 35 hours per week.
15 (f) A participant receiving a retirement annuity under this
16Article who has made an election under Section 1-123 and who is
17serving either as legal counsel in the Office of the Governor
18or as Chief Deputy Attorney General shall not be deemed to be
19regularly employed for compensation by an employer other than a
20county, nor to have resumed service as a judge, on the basis of
21that service, and the retirement annuity payments and other
22benefits of that person under this Code shall not be suspended,
23diminished, or otherwise impaired solely as a consequence of
24that service. This subsection (f) applies without regard to
25whether the person is in service as a judge under this Article
26on or after the effective date of this amendatory Act of the

HB0436- 146 -LRB100 05378 RPS 15389 b
193rd General Assembly.
2 (g) Notwithstanding any other provision of this Article, if
3a Tier 2 participant person who first becomes a participant
4under this System on or after January 1, 2011 (the effective
5date of this amendatory Act of the 96th General Assembly) is
6receiving a retirement annuity under this Article and becomes a
7member or participant under this Article or any other Article
8of this Code and is employed on a full-time basis, then the
9person's retirement annuity under this System shall be
10suspended during that employment. Upon termination of that
11employment, the person's retirement annuity shall resume and,
12if appropriate, be recalculated under the applicable
13provisions of this Article.
14(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
15 (40 ILCS 5/18-128.01) (from Ch. 108 1/2, par. 18-128.01)
16 Sec. 18-128.01. Amount of survivor's annuity.
17 (a) Upon the death of an annuitant, his or her surviving
18spouse shall be entitled to a survivor's annuity of 66 2/3% of
19the annuity the annuitant was receiving immediately prior to
20his or her death, inclusive of annual increases in the
21retirement annuity to the date of death.
22 (b) Upon the death of an active participant, his or her
23surviving spouse shall receive a survivor's annuity of 66 2/3%
24of the annuity earned by the participant as of the date of his
25or her death, determined without regard to whether the

HB0436- 147 -LRB100 05378 RPS 15389 b
1participant had attained age 60 as of that time, or 7 1/2% of
2the last salary of the decedent, whichever is greater.
3 (c) Upon the death of a participant who had terminated
4service with at least 10 years of service, his or her surviving
5spouse shall be entitled to a survivor's annuity of 66 2/3% of
6the annuity earned by the deceased participant at the date of
7death.
8 (d) Upon the death of an annuitant, active participant, or
9participant who had terminated service with at least 10 years
10of service, each surviving child under the age of 18 or
11disabled as defined in Section 18-128 shall be entitled to a
12child's annuity in an amount equal to 5% of the decedent's
13final salary, not to exceed in total for all such children the
14greater of 20% of the decedent's last salary or 66 2/3% of the
15annuity received or earned by the decedent as provided under
16subsections (a) and (b) of this Section. This child's annuity
17shall be paid whether or not a survivor's annuity was elected
18under Section 18-123.
19 (e) The changes made in the survivor's annuity provisions
20by Public Act 82-306 shall apply to the survivors of a deceased
21participant or annuitant whose death occurs on or after August
2221, 1981.
23 (f) Beginning January 1, 1990, every survivor's annuity
24shall be increased (1) on each January 1 occurring on or after
25the commencement of the annuity if the deceased member died
26while receiving a retirement annuity, or (2) in other cases, on

HB0436- 148 -LRB100 05378 RPS 15389 b
1each January 1 occurring on or after the first anniversary of
2the commencement of the annuity, by an amount equal to 3% of
3the current amount of the annuity, including any previous
4increases under this Article. Such increases shall apply
5without regard to whether the deceased member was in service on
6or after the effective date of this amendatory Act of 1991, but
7shall not accrue for any period prior to January 1, 1990.
8 (g) Notwithstanding any other provision of this Article,
9the initial survivor's annuity for a survivor of a Tier 2
10participant who first serves as a judge after January 1, 2011
11(the effective date of Public Act 96-889) shall be in the
12amount of 66 2/3% of the annuity received or earned by the
13decedent, and shall be increased (1) on each January 1
14occurring on or after the commencement of the annuity if the
15deceased participant died while receiving a retirement
16annuity, or (2) in other cases, on each January 1 occurring on
17or after the first anniversary of the commencement of the
18annuity, but in no event prior to age 67, by an amount equal to
193% or the annual unadjusted percentage increase in the consumer
20price index-u as determined by the Public Pension Division of
21the Department of Insurance under subsection (b-5) of Section
2218-125, whichever is less, of the survivor's annuity then being
23paid.
24(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
25 (40 ILCS 5/18-133) (from Ch. 108 1/2, par. 18-133)

HB0436- 149 -LRB100 05378 RPS 15389 b
1 Sec. 18-133. Financing; employee contributions.
2 (a) Effective July 1, 1967, each participant is required to
3contribute 7 1/2% of each payment of salary toward the
4retirement annuity. Such contributions shall continue during
5the entire time the participant is in service, with the
6following exceptions:
7 (1) Contributions for the retirement annuity are not
8 required on salary received after 18 years of service by
9 persons who were participants before January 2, 1954.
10 (2) A participant who continues to serve as a judge
11 after becoming eligible to receive the maximum rate of
12 annuity may elect, through a written direction filed with
13 the Board, to discontinue contributing to the System. Any
14 such option elected by a judge shall be irrevocable unless
15 prior to January 1, 2000, and while continuing to serve as
16 judge, the judge (A) files with the Board a letter
17 cancelling the direction to discontinue contributing to
18 the System and requesting that such contributing resume,
19 and (B) pays into the System an amount equal to the total
20 of the discontinued contributions plus interest thereon at
21 5% per annum. Service credits earned in any other
22 "participating system" as defined in Article 20 of this
23 Code shall be considered for purposes of determining a
24 judge's eligibility to discontinue contributions under
25 this subdivision (a)(2).
26 (3) A participant who (i) has attained age 60, (ii)

HB0436- 150 -LRB100 05378 RPS 15389 b
1 continues to serve as a judge after becoming eligible to
2 receive the maximum rate of annuity, and (iii) has not
3 elected to discontinue contributing to the System under
4 subdivision (a)(2) of this Section (or has revoked any such
5 election) may elect, through a written direction filed with
6 the Board, to make contributions to the System based only
7 on the amount of the increases in salary received by the
8 judge on or after the date of the election, rather than the
9 total salary received. If a judge who is making
10 contributions to the System on the effective date of this
11 amendatory Act of the 91st General Assembly makes an
12 election to limit contributions under this subdivision
13 (a)(3) within 90 days after that effective date, the
14 election shall be deemed to become effective on that
15 effective date and the judge shall be entitled to receive a
16 refund of any excess contributions paid to the System
17 during that 90-day period; any other election under this
18 subdivision (a)(3) becomes effective on the first of the
19 month following the date of the election. An election to
20 limit contributions under this subdivision (a)(3) is
21 irrevocable. Service credits earned in any other
22 participating system as defined in Article 20 of this Code
23 shall be considered for purposes of determining a judge's
24 eligibility to make an election under this subdivision
25 (a)(3).
26 (b) Beginning July 1, 1969, each participant is required to

HB0436- 151 -LRB100 05378 RPS 15389 b
1contribute 1% of each payment of salary towards the automatic
2increase in annuity provided in Section 18-125.1. However, such
3contributions need not be made by any participant who has
4elected prior to September 15, 1969, not to be subject to the
5automatic increase in annuity provisions.
6 (c) Effective July 13, 1953, each married participant
7subject to the survivor's annuity provisions is required to
8contribute 2 1/2% of each payment of salary, whether or not he
9or she is required to make any other contributions under this
10Section. Such contributions shall be made concurrently with the
11contributions made for annuity purposes.
12 (d) Notwithstanding any other provision of this Article,
13the required contributions for a Tier 2 participant who first
14becomes a participant on or after January 1, 2011 shall not
15exceed the contributions that would be due under this Article
16if that participant's highest salary for annuity purposes were
17$106,800, plus any increase in that amount under Section
1818-125.
19(Source: P.A. 96-1490, eff. 1-1-11.)
20 (40 ILCS 5/18-169)
21 Sec. 18-169. Application and expiration of new benefit
22increases.
23 (a) As used in this Section, "new benefit increase" means
24an increase in the amount of any benefit provided under this
25Article, or an expansion of the conditions of eligibility for

HB0436- 152 -LRB100 05378 RPS 15389 b
1any benefit under this Article, that results from an amendment
2to this Code that takes effect after the effective date of this
3amendatory Act of the 94th General Assembly. "New benefit
4increase", however, does not include any benefit increase
5resulting from the changes made by this amendatory Act of the
6100th General Assembly.
7 (b) Notwithstanding any other provision of this Code or any
8subsequent amendment to this Code, every new benefit increase
9is subject to this Section and shall be deemed to be granted
10only in conformance with and contingent upon compliance with
11the provisions of this Section.
12 (c) The Public Act enacting a new benefit increase must
13identify and provide for payment to the System of additional
14funding at least sufficient to fund the resulting annual
15increase in cost to the System as it accrues.
16 Every new benefit increase is contingent upon the General
17Assembly providing the additional funding required under this
18subsection. The Commission on Government Forecasting and
19Accountability shall analyze whether adequate additional
20funding has been provided for the new benefit increase and
21shall report its analysis to the Public Pension Division of the
22Department of Financial and Professional Regulation. A new
23benefit increase created by a Public Act that does not include
24the additional funding required under this subsection is null
25and void. If the Public Pension Division determines that the
26additional funding provided for a new benefit increase under

HB0436- 153 -LRB100 05378 RPS 15389 b
1this subsection is or has become inadequate, it may so certify
2to the Governor and the State Comptroller and, in the absence
3of corrective action by the General Assembly, the new benefit
4increase shall expire at the end of the fiscal year in which
5the certification is made.
6 (d) Every new benefit increase shall expire 5 years after
7its effective date or on such earlier date as may be specified
8in the language enacting the new benefit increase or provided
9under subsection (c). This does not prevent the General
10Assembly from extending or re-creating a new benefit increase
11by law.
12 (e) Except as otherwise provided in the language creating
13the new benefit increase, a new benefit increase that expires
14under this Section continues to apply to persons who applied
15and qualified for the affected benefit while the new benefit
16increase was in effect and to the affected beneficiaries and
17alternate payees of such persons, but does not apply to any
18other person, including without limitation a person who
19continues in service after the expiration date and did not
20apply and qualify for the affected benefit while the new
21benefit increase was in effect.
22(Source: P.A. 94-4, eff. 6-1-05.)
23 (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
24 (Text of Section WITHOUT the changes made by P.A. 98-599,
25which has been held unconstitutional)

HB0436- 154 -LRB100 05378 RPS 15389 b
1 Sec. 20-121. Calculation of proportional retirement
2annuities.
3 (a) Upon retirement of the employee, a proportional
4retirement annuity shall be computed by each participating
5system in which pension credit has been established on the
6basis of pension credits under each system. The computation
7shall be in accordance with the formula or method prescribed by
8each participating system which is in effect at the date of the
9employee's latest withdrawal from service covered by any of the
10systems in which he has pension credits which he elects to have
11considered under this Article. However, the amount of any
12retirement annuity payable under the self-managed plan
13established under Section 15-158.2 of this Code depends solely
14on the value of the participant's vested account balances and
15is not subject to any proportional adjustment under this
16Section.
17 (a-5) For persons who participate in a Tier 3 plan
18established under Article 2, 14, 15, 16, or 18 of this Code to
19whom the provisions of this Article apply, the pension credits
20established under the Tier 3 plan may be considered in
21determining eligibility for or the amount of the defined
22benefit retirement annuity that is payable by any other
23participating system.
24 (b) Combined pension credit under all retirement systems
25subject to this Article shall be considered in determining
26whether the minimum qualification has been met and the formula

HB0436- 155 -LRB100 05378 RPS 15389 b
1or method of computation which shall be applied, except as may
2be otherwise provided with respect to vesting in State or
3employer contributions in a Tier 3 plan. If a system has a
4step-rate formula for calculation of the retirement annuity,
5pension credits covering previous service which have been
6established under another system shall be considered in
7determining which range or ranges of the step-rate formula are
8to be applicable to the employee.
9 (c) Interest on pension credit shall continue to accumulate
10in accordance with the provisions of the law governing the
11retirement system in which the same has been established during
12the time an employee is in the service of another employer, on
13the assumption such employee, for interest purposes for pension
14credit, is continuing in the service covered by such retirement
15system.
16(Source: P.A. 91-887, eff. 7-6-00.)
17 (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
18 (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20 Sec. 20-123. Survivor's annuity. The provisions governing
21a retirement annuity shall be applicable to a survivor's
22annuity. Appropriate credits shall be established for
23survivor's annuity purposes in those participating systems
24which provide survivor's annuities, according to the same
25conditions and subject to the same limitations and restrictions

HB0436- 156 -LRB100 05378 RPS 15389 b
1herein prescribed for a retirement annuity. If a participating
2system has no survivor's annuity benefit, or if the survivor's
3annuity benefit under that system is waived, pension credit
4established in that system shall not be considered in
5determining eligibility for or the amount of the survivor's
6annuity which may be payable by any other participating system.
7 For persons who participate in the self-managed plan
8established under Section 15-158.2 or the portable benefit
9package established under Section 15-136.4, pension credit
10established under Article 15 may be considered in determining
11eligibility for or the amount of the survivor's annuity that is
12payable by any other participating system, but pension credit
13established in any other system shall not result in any right
14to a survivor's annuity under the Article 15 system.
15 For persons who participate in a Tier 3 plan established
16under Article 2, 14, 15, 16, or 18 of this Code to whom the
17provisions of this Article apply, the pension credits
18established under the Tier 3 plan may be considered in
19determining eligibility for or the amount of the defined
20benefit survivor's annuity that is payable by any other
21participating system, but pension credits established in any
22other system shall not result in any right to or increase in
23the value of a survivor's annuity under the Tier 3 plan, which
24depends solely on the options chosen and the value of the
25participant's vested account balances and is not subject to any
26proportional adjustment under this Section.

HB0436- 157 -LRB100 05378 RPS 15389 b
1(Source: P.A. 91-887, eff. 7-6-00.)
2 (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
3 (Text of Section WITHOUT the changes made by P.A. 98-599,
4which has been held unconstitutional)
5 Sec. 20-124. Maximum benefits.
6 (a) In no event shall the combined retirement or survivors
7annuities exceed the highest annuity which would have been
8payable by any participating system in which the employee has
9pension credits, if all of his pension credits had been
10validated in that system.
11 If the combined annuities should exceed the highest maximum
12as determined in accordance with this Section, the respective
13annuities shall be reduced proportionately according to the
14ratio which the amount of each proportional annuity bears to
15the aggregate of all such annuities.
16 (b) In the case of a participant in the self-managed plan
17established under Section 15-158.2 of this Code to whom the
18provisions of this Article apply:
19 (i) For purposes of calculating the combined
20 retirement annuity and the proportionate reduction, if
21 any, in a retirement annuity other than one payable under
22 the self-managed plan, the amount of the Article 15
23 retirement annuity shall be deemed to be the highest
24 annuity to which the annuitant would have been entitled if
25 he or she had participated in the traditional benefit

HB0436- 158 -LRB100 05378 RPS 15389 b
1 package as defined in Section 15-103.1 rather than the
2 self-managed plan.
3 (ii) For purposes of calculating the combined
4 survivor's annuity and the proportionate reduction, if
5 any, in a survivor's annuity other than one payable under
6 the self-managed plan, the amount of the Article 15
7 survivor's annuity shall be deemed to be the highest
8 survivor's annuity to which the survivor would have been
9 entitled if the deceased employee had participated in the
10 traditional benefit package as defined in Section 15-103.1
11 rather than the self-managed plan.
12 (iii) Benefits payable under the self-managed plan are
13 not subject to proportionate reduction under this Section.
14 (c) In the case of a participant in a Tier 3 plan
15established under Article 2, 14, 15, 16, or 18 of this Code to
16whom the provisions of this Article apply:
17 (i) For purposes of calculating the combined
18 retirement annuity and the proportionate reduction, if
19 any, in a defined benefit retirement annuity, any benefit
20 payable under the Tier 3 plan shall not be considered.
21 (ii) For purposes of calculating the combined
22 survivor's annuity and the proportionate reduction, if
23 any, in a defined benefit survivor's annuity, any benefit
24 payable under the Tier 3 plan shall not be considered.
25 (iii) Benefits payable under a Tier 3 plan established
26 under Article 2, 14, 15, 16, or 18 of this Code are not

HB0436- 159 -LRB100 05378 RPS 15389 b
1 subject to proportionate reduction under this Section.
2(Source: P.A. 91-887, eff. 7-6-00.)
3 (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
4 (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6 Sec. 20-125. Return to employment - suspension of benefits.
7If a retired employee returns to employment which is covered by
8a system from which he is receiving a proportional annuity
9under this Article, his proportional annuity from all
10participating systems shall be suspended during the period of
11re-employment, except that this suspension does not apply to
12any distributions payable under the self-managed plan
13established under Section 15-158.2 of this Code or under a Tier
143 plan established under Article 2, 14, 15, 16, or 18 of this
15Code.
16 The provisions of the Article under which such employment
17would be covered shall govern the determination of whether the
18employee has returned to employment, and if applicable the
19exemption of temporary employment or employment not exceeding a
20specified duration or frequency, for all participating systems
21from which the retired employee is receiving a proportional
22annuity under this Article, notwithstanding any contrary
23provisions in the other Articles governing such systems.
24(Source: P.A. 91-887, eff. 7-6-00.)

HB0436- 160 -LRB100 05378 RPS 15389 b
1 (40 ILCS 5/2-165 rep.)
2 (40 ILCS 5/2-166 rep.)
3 (40 ILCS 5/14-155 rep.)
4 (40 ILCS 5/14-156 rep.)
5 (40 ILCS 5/15-200 rep.)
6 (40 ILCS 5/15-201 rep.)
7 (40 ILCS 5/16-205 rep.)
8 (40 ILCS 5/16-206 rep.)
9 Section 15. The Illinois Pension Code is amended by
10repealing Sections 2-165, 2-166, 14-155, 14-156, 15-200,
1115-201, 16-205, and 16-206.
12 Section 20. The Illinois Educational Labor Relations Act is
13amended by changing Sections 4 and 17 and by adding Section
1410.6 as follows:
15 (115 ILCS 5/4) (from Ch. 48, par. 1704)
16 (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18 Sec. 4. Employer rights. Employers shall not be required to
19bargain over matters of inherent managerial policy, which shall
20include such areas of discretion or policy as the functions of
21the employer, standards of services, its overall budget, the
22organizational structure and selection of new employees and
23direction of employees. Employers, however, shall be required
24to bargain collectively with regard to policy matters directly

HB0436- 161 -LRB100 05378 RPS 15389 b
1affecting wages, hours and terms and conditions of employment
2as well as the impact thereon upon request by employee
3representatives, except as provided in Section 10.6. To
4preserve the rights of employers and exclusive representatives
5which have established collective bargaining relationships or
6negotiated collective bargaining agreements prior to the
7effective date of this Act, employers shall be required to
8bargain collectively with regard to any matter concerning
9wages, hours or conditions of employment about which they have
10bargained for and agreed to in a collective bargaining
11agreement prior to the effective date of this Act, except as
12provided in Section 10.6.
13(Source: P.A. 83-1014.)
14 (115 ILCS 5/10.6 new)
15 Sec. 10.6. Bargaining regarding pension contributions on
16behalf of employees; prohibited.
17 (a) Notwithstanding any other provision of this Act,
18beginning on the effective date of this amendatory Act of the
19100th General Assembly, employers shall not bargain over
20matters prohibited by subsection (e) of Section 16-152.1 of the
21Illinois Pension Code, which concerns employers paying pension
22contributions on behalf of employees.
23 (b) In case of any conflict between this Section and any
24other provisions of this Act or any other law, the provisions
25of this Section shall control.

HB0436- 162 -LRB100 05378 RPS 15389 b
1 (115 ILCS 5/17) (from Ch. 48, par. 1717)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 17. Effect on other laws. Except as provided in
5Section 10.6, in In case of any conflict between the provisions
6of this Act and any other law, executive order or
7administrative regulation, the provisions of this Act shall
8prevail and control. Nothing in this Act shall be construed to
9replace or diminish the rights of employees established by
10Section 36d of "An Act to create the State Universities Civil
11Service System", approved May 11, 1905, as amended or modified.
12(Source: P.A. 83-1014.)
13 Section 99. Effective date. This Act takes effect upon
14becoming law.

HB0436- 163 -LRB100 05378 RPS 15389 b
1 INDEX
2 Statutes amended in order of appearance
3 5 ILCS 375/3from Ch. 127, par. 523
4 5 ILCS 375/10from Ch. 127, par. 530
5 40 ILCS 5/1-160
6 40 ILCS 5/2-105.3 new
7 40 ILCS 5/2-117from Ch. 108 1/2, par. 2-117
8 40 ILCS 5/2-162
9 40 ILCS 5/2-165.5 new
10 40 ILCS 5/7-114from Ch. 108 1/2, par. 7-114
11 40 ILCS 5/7-116from Ch. 108 1/2, par. 7-116
12 40 ILCS 5/7-139from Ch. 108 1/2, par. 7-139
13 40 ILCS 5/14-103.05from Ch. 108 1/2, par. 14-103.05
14 40 ILCS 5/14-103.10from Ch. 108 1/2, par. 14-103.10
15 40 ILCS 5/14-103.41 new
16 40 ILCS 5/14-103.42 new
17 40 ILCS 5/14-103.43 new
18 40 ILCS 5/14-104.3from Ch. 108 1/2, par. 14-104.3
19 40 ILCS 5/14-106from Ch. 108 1/2, par. 14-106
20 40 ILCS 5/14-152.1
21 40 ILCS 5/14-155.5 new
22 40 ILCS 5/15-108.1
23 40 ILCS 5/15-108.2
24 40 ILCS 5/15-108.3 new
25 40 ILCS 5/15-112from Ch. 108 1/2, par. 15-112

HB0436- 164 -LRB100 05378 RPS 15389 b
1 40 ILCS 5/15-113.4from Ch. 108 1/2, par. 15-113.4
2 40 ILCS 5/15-134from Ch. 108 1/2, par. 15-134
3 40 ILCS 5/15-198
4 40 ILCS 5/15-200.5 new
5 40 ILCS 5/16-106.40 new
6 40 ILCS 5/16-106.41 new
7 40 ILCS 5/16-106.42 new
8 40 ILCS 5/16-123from Ch. 108 1/2, par. 16-123
9 40 ILCS 5/16-127from Ch. 108 1/2, par. 16-127
10 40 ILCS 5/16-152.1from Ch. 108 1/2, par. 16-152.1
11 40 ILCS 5/16-203
12 40 ILCS 5/16-205.5 new
13 40 ILCS 5/18-110.1 new
14 40 ILCS 5/18-110.2 new
15 40 ILCS 5/18-110.3 new
16 40 ILCS 5/18-120from Ch. 108 1/2, par. 18-120
17 40 ILCS 5/18-121.5 new
18 40 ILCS 5/18-124from Ch. 108 1/2, par. 18-124
19 40 ILCS 5/18-125from Ch. 108 1/2, par. 18-125
20 40 ILCS 5/18-125.1from Ch. 108 1/2, par. 18-125.1
21 40 ILCS 5/18-127from Ch. 108 1/2, par. 18-127
22 40 ILCS 5/18-128.01from Ch. 108 1/2, par. 18-128.01
23 40 ILCS 5/18-133from Ch. 108 1/2, par. 18-133
24 40 ILCS 5/18-169
25 40 ILCS 5/20-121from Ch. 108 1/2, par. 20-121
26 40 ILCS 5/20-123from Ch. 108 1/2, par. 20-123

HB0436- 165 -LRB100 05378 RPS 15389 b