96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB0479


 
Introduced 2/4/2009, by Rep. Roger L. Eddy
 
SYNOPSIS AS INTRODUCED:
















40 ILCS 5/16-158 from Ch. 108 1/2, par. 16-158







 Amends the Downstate Teachers Article of the Illinois Pension Code. Provides that, when assessing payment for any amount due for earnings increases in excess of 6%, the System shall exclude earnings increases as a result of accepting school-sponsored, extra-curricular assignments. Effective immediately.
















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FISCAL NOTE ACT MAY APPLY


PENSION IMPACT NOTE ACT MAY APPLY
















 


 


A BILL FOR









 











HB0479

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1
 AN ACT concerning public employee benefits.


2
 Be it enacted by the People of the State of Illinois,

3
represented in the General Assembly:



4
 Section 5. The Illinois Pension Code is amended by changing 
5
Section 16-158 as follows:




6
 (40 ILCS 5/16-158)
 (from Ch. 108 1/2, par. 16-158)


7
 Sec. 16-158. Contributions by State and other employing 
8
units. 

9
 (a) The State shall make contributions to the System by 
10
means of
appropriations from the Common School Fund and other 
11
State funds of amounts
which, together with other employer 
12
contributions, employee contributions,
investment income, and 
13
other income, will be sufficient to meet the cost of

14
maintaining and administering the System on a 90% funded basis 
15
in accordance
with actuarial recommendations.

16
 The Board shall determine the amount of State contributions 
17
required for
each fiscal year on the basis of the actuarial 
18
tables and other assumptions
adopted by the Board and the 
19
recommendations of the actuary, using the formula
in subsection 
20
(b-3).

21
 (a-1) Annually, on or before November 15, the Board shall 
22
certify to the
Governor the amount of the required State 
23
contribution for the coming fiscal
year. The certification 
 


 






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1
shall include a copy of the actuarial recommendations
upon 
2
which it is based.

3
 On or before May 1, 2004, the Board shall recalculate and 
4
recertify to
the Governor the amount of the required State 
5
contribution to the System for
State fiscal year 2005, taking 
6
into account the amounts appropriated to and
received by the 
7
System under subsection (d) of Section 7.2 of the General

8
Obligation Bond Act.

9
 On or before July 1, 2005, the Board shall recalculate and 
10
recertify
to the Governor the amount of the required State

11
contribution to the System for State fiscal year 2006, taking 
12
into account the changes in required State contributions made 
13
by this amendatory Act of the 94th General Assembly.

14
 (b) Through State fiscal year 1995, the State contributions 
15
shall be
paid to the System in accordance with Section 18-7 of 
16
the School Code.

17
 (b-1) Beginning in State fiscal year 1996, on the 15th day 
18
of each month,
or as soon thereafter as may be practicable, the 
19
Board shall submit vouchers
for payment of State contributions 
20
to the System, in a total monthly amount of
one-twelfth of the 
21
required annual State contribution certified under
subsection 
22
(a-1).
From the
effective date of this amendatory Act of the 
23
93rd General Assembly
through June 30, 2004, the Board shall 
24
not submit vouchers for the
remainder of fiscal year 2004 in 
25
excess of the fiscal year 2004
certified contribution amount 
26
determined under this Section
after taking into consideration 
 


 






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1
the transfer to the System
under subsection (a) of Section 
2
6z-61 of the State Finance Act.
These vouchers shall be paid by 
3
the State Comptroller and
Treasurer by warrants drawn on the 
4
funds appropriated to the System for that
fiscal year.

5
 If in any month the amount remaining unexpended from all 
6
other appropriations
to the System for the applicable fiscal 
7
year (including the appropriations to
the System under Section 
8
8.12 of the State Finance Act and Section 1 of the
State 
9
Pension Funds Continuing Appropriation Act) is less than the 
10
amount
lawfully vouchered under this subsection, the 
11
difference shall be paid from the
Common School Fund under the 
12
continuing appropriation authority provided in
Section 1.1 of 
13
the State Pension Funds Continuing Appropriation Act.

14
 (b-2) Allocations from the Common School Fund apportioned 
15
to school
districts not coming under this System shall not be 
16
diminished or affected by
the provisions of this Article.

17
 (b-3) For State fiscal years 2011 through 2045, the minimum 
18
contribution
to the System to be made by the State for each 
19
fiscal year shall be an amount
determined by the System to be 
20
sufficient to bring the total assets of the
System up to 90% of 
21
the total actuarial liabilities of the System by the end of

22
State fiscal year 2045. In making these determinations, the 
23
required State
contribution shall be calculated each year as a 
24
level percentage of payroll
over the years remaining to and 
25
including fiscal year 2045 and shall be
determined under the 
26
projected unit credit actuarial cost method.

 


 






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1
 For State fiscal years 1996 through 2005, the State 
2
contribution to the
System, as a percentage of the applicable 
3
employee payroll, shall be increased
in equal annual increments 
4
so that by State fiscal year 2011, the State is
contributing at 
5
the rate required under this Section; except that in the

6
following specified State fiscal years, the State contribution 
7
to the System
shall not be less than the following indicated 
8
percentages of the applicable
employee payroll, even if the 
9
indicated percentage will produce a State
contribution in 
10
excess of the amount otherwise required under this subsection

11
and subsection (a), and notwithstanding any contrary 
12
certification made under
subsection (a-1) before the effective 
13
date of this amendatory Act of 1998:
10.02% in FY 1999;
10.77% 
14
in FY 2000;
11.47% in FY 2001;
12.16% in FY 2002;
12.86% in FY 
15
2003; and
13.56% in FY 2004.

16
 Notwithstanding any other provision of this Article, the 
17
total required State
contribution for State fiscal year 2006 is 
18
$534,627,700.

19
 Notwithstanding any other provision of this Article, the 
20
total required State
contribution for State fiscal year 2007 is 
21
$738,014,500.

22
 For each of State fiscal years 2008 through 2010, the State 
23
contribution to
the System, as a percentage of the applicable 
24
employee payroll, shall be
increased in equal annual increments 
25
from the required State contribution for State fiscal year 
26
2007, so that by State fiscal year 2011, the
State is 
 


 






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1
contributing at the rate otherwise required under this Section.

2
 Beginning in State fiscal year 2046, the minimum State 
3
contribution for
each fiscal year shall be the amount needed to 
4
maintain the total assets of
the System at 90% of the total 
5
actuarial liabilities of the System.

6
 Amounts received by the System pursuant to Section 25 of 
7
the Budget Stabilization Act or Section 8.12 of the State 
8
Finance Act in any fiscal year do not reduce and do not 
9
constitute payment of any portion of the minimum State 
10
contribution required under this Article in that fiscal year. 
11
Such amounts shall not reduce, and shall not be included in the 
12
calculation of, the required State contributions under this 
13
Article in any future year until the System has reached a 
14
funding ratio of at least 90%. A reference in this Article to 
15
the "required State contribution" or any substantially similar 
16
term does not include or apply to any amounts payable to the 
17
System under Section 25 of the Budget Stabilization Act.
18
 Notwithstanding any other provision of this Section, the 
19
required State
contribution for State fiscal year 2005 and for 
20
fiscal year 2008 and each fiscal year thereafter, as
calculated 
21
under this Section and
certified under subsection (a-1), shall 
22
not exceed an amount equal to (i) the
amount of the required 
23
State contribution that would have been calculated under
this 
24
Section for that fiscal year if the System had not received any 
25
payments
under subsection (d) of Section 7.2 of the General 
26
Obligation Bond Act, minus
(ii) the portion of the State's 
 


 






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1
total debt service payments for that fiscal
year on the bonds 
2
issued for the purposes of that Section 7.2, as determined
and 
3
certified by the Comptroller, that is the same as the System's 
4
portion of
the total moneys distributed under subsection (d) of 
5
Section 7.2 of the General
Obligation Bond Act. In determining 
6
this maximum for State fiscal years 2008 through 2010, however, 
7
the amount referred to in item (i) shall be increased, as a 
8
percentage of the applicable employee payroll, in equal 
9
increments calculated from the sum of the required State 
10
contribution for State fiscal year 2007 plus the applicable 
11
portion of the State's total debt service payments for fiscal 
12
year 2007 on the bonds issued for the purposes of Section 7.2 
13
of the General
Obligation Bond Act, so that, by State fiscal 
14
year 2011, the
State is contributing at the rate otherwise 
15
required under this Section.

16
 (c) Payment of the required State contributions and of all 
17
pensions,
retirement annuities, death benefits, refunds, and 
18
other benefits granted
under or assumed by this System, and all 
19
expenses in connection with the
administration and operation 
20
thereof, are obligations of the State.

21
 If members are paid from special trust or federal funds 
22
which are
administered by the employing unit, whether school 
23
district or other
unit, the employing unit shall pay to the 
24
System from such
funds the full accruing retirement costs based 
25
upon that
service, as determined by the System. Employer 
26
contributions, based on
salary paid to members from federal 
 


 






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1
funds, may be forwarded by the distributing
agency of the State 
2
of Illinois to the System prior to allocation, in an
amount 
3
determined in accordance with guidelines established by such

4
agency and the System.

5
 (d) Effective July 1, 1986, any employer of a teacher as 
6
defined in
paragraph (8) of Section 16-106 shall pay the 
7
employer's normal cost
of benefits based upon the teacher's 
8
service, in addition to
employee contributions, as determined 
9
by the System. Such employer
contributions shall be forwarded 
10
monthly in accordance with guidelines
established by the 
11
System.

12
 However, with respect to benefits granted under Section 
13
16-133.4 or
16-133.5 to a teacher as defined in paragraph (8) 
14
of Section 16-106, the
employer's contribution shall be 12% 
15
(rather than 20%) of the member's
highest annual salary rate 
16
for each year of creditable service granted, and
the employer 
17
shall also pay the required employee contribution on behalf of

18
the teacher. For the purposes of Sections 16-133.4 and 
19
16-133.5, a teacher
as defined in paragraph (8) of Section 
20
16-106 who is serving in that capacity
while on leave of 
21
absence from another employer under this Article shall not
be 
22
considered an employee of the employer from which the teacher 
23
is on leave.

24
 (e) Beginning July 1, 1998, every employer of a teacher

25
shall pay to the System an employer contribution computed as 
26
follows:


 


 






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1
  (1) Beginning July 1, 1998 through June 30, 1999, the 
2
 employer
contribution shall be equal to 0.3% of each 
3
 teacher's salary.


4
  (2) Beginning July 1, 1999 and thereafter, the employer

5
 contribution shall be equal to 0.58% of each teacher's 
6
 salary.

7
The school district or other employing unit may pay these 
8
employer
contributions out of any source of funding available 
9
for that purpose and
shall forward the contributions to the 
10
System on the schedule established
for the payment of member 
11
contributions.

12
 These employer contributions are intended to offset a 
13
portion of the cost
to the System of the increases in 
14
retirement benefits resulting from this
amendatory Act of 1998.

15
 Each employer of teachers is entitled to a credit against 
16
the contributions
required under this subsection (e) with 
17
respect to salaries paid to teachers
for the period January 1, 
18
2002 through June 30, 2003, equal to the amount paid
by that 
19
employer under subsection (a-5) of Section 6.6 of the State 
20
Employees
Group Insurance Act of 1971 with respect to salaries 
21
paid to teachers for that
period.

22
 The additional 1% employee contribution required under 
23
Section 16-152 by
this amendatory Act of 1998 is the 
24
responsibility of the teacher and not the
teacher's employer, 
25
unless the employer agrees, through collective bargaining
or 
26
otherwise, to make the contribution on behalf of the teacher.

 


 






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1
 If an employer is required by a contract in effect on May 
2
1, 1998 between the
employer and an employee organization to 
3
pay, on behalf of all its full-time
employees
covered by this 
4
Article, all mandatory employee contributions required under

5
this Article, then the employer shall be excused from paying 
6
the employer
contribution required under this subsection (e) 
7
for the balance of the term
of that contract. The employer and 
8
the employee organization shall jointly
certify to the System 
9
the existence of the contractual requirement, in such
form as 
10
the System may prescribe. This exclusion shall cease upon the

11
termination, extension, or renewal of the contract at any time 
12
after May 1,
1998.

13
 (f) If the amount of a teacher's salary for any school year 
14
used to determine final average salary exceeds the member's 
15
annual full-time salary rate with the same employer for the 
16
previous school year by more than 6%, the teacher's employer 
17
shall pay to the System, in addition to all other payments 
18
required under this Section and in accordance with guidelines 
19
established by the System, the present value of the increase in 
20
benefits resulting from the portion of the increase in salary 
21
that is in excess of 6%. This present value shall be computed 
22
by the System on the basis of the actuarial assumptions and 
23
tables used in the most recent actuarial valuation of the 
24
System that is available at the time of the computation. If a 
25
teacher's salary for the 2005-2006 school year is used to 
26
determine final average salary under this subsection (f), then 
 


 






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1
the changes made to this subsection (f) by Public Act 94-1057 
2
shall apply in calculating whether the increase in his or her 
3
salary is in excess of 6%. For the purposes of this Section, 
4
change in employment under Section 10-21.12 of the School Code 
5
on or after June 1, 2005 shall constitute a change in employer. 
6
The System may require the employer to provide any pertinent 
7
information or documentation.
The changes made to this 
8
subsection (f) by this amendatory Act of the 94th General 
9
Assembly apply without regard to whether the teacher was in 
10
service on or after its effective date.

11
 Whenever it determines that a payment is or may be required 
12
under this subsection, the System shall calculate the amount of 
13
the payment and bill the employer for that amount. The bill 
14
shall specify the calculations used to determine the amount 
15
due. If the employer disputes the amount of the bill, it may, 
16
within 30 days after receipt of the bill, apply to the System 
17
in writing for a recalculation. The application must specify in 
18
detail the grounds of the dispute and, if the employer asserts 
19
that the calculation is subject to subsection (g) or (h) of 
20
this Section, must include an affidavit setting forth and 
21
attesting to all facts within the employer's knowledge that are 
22
pertinent to the applicability of that subsection. Upon 
23
receiving a timely application for recalculation, the System 
24
shall review the application and, if appropriate, recalculate 
25
the amount due.


26
 The employer contributions required under this subsection 
 


 






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1
(f) may be paid in the form of a lump sum within 90 days after 
2
receipt of the bill. If the employer contributions are not paid 
3
within 90 days after receipt of the bill, then interest will be 
4
charged at a rate equal to the System's annual actuarially 
5
assumed rate of return on investment compounded annually from 
6
the 91st day after receipt of the bill. Payments must be 
7
concluded within 3 years after the employer's receipt of the 
8
bill.

9
 (g) This subsection (g) applies only to payments made or 
10
salary increases given on or after June 1, 2005 but before July 
11
1, 2011. The changes made by Public Act 94-1057 shall not 
12
require the System to refund any payments received before
July 
13
31, 2006 (the effective date of Public Act 94-1057).
14
 When assessing payment for any amount due under subsection 
15
(f), the System shall exclude salary increases paid to teachers 
16
under contracts or collective bargaining agreements entered 
17
into, amended, or renewed before June 1, 2005.

18
 When assessing payment for any amount due under subsection 
19
(f), the System shall exclude salary increases paid to a 
20
teacher at a time when the teacher is 10 or more years from 
21
retirement eligibility under Section 16-132 or 16-133.2.

22
 When assessing payment for any amount due under subsection 
23
(f), the System shall exclude salary increases resulting from 
24
overload work, including summer school, when the school 
25
district has certified to the System, and the System has 
26
approved the certification, that (i) the overload work is for 
 


 






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1
the sole purpose of classroom instruction in excess of the 
2
standard number of classes for a full-time teacher in a school 
3
district during a school year and (ii) the salary increases are 
4
equal to or less than the rate of pay for classroom instruction 
5
computed on the teacher's current salary and work schedule.

6
 When assessing payment for any amount due under subsection 
7
(f), the System shall exclude a salary increase resulting from 
8
a promotion (i) for which the employee is required to hold a 
9
certificate or supervisory endorsement issued by the State 
10
Teacher Certification Board that is a different certification 
11
or supervisory endorsement than is required for the teacher's 
12
previous position and (ii) to a position that has existed and 
13
been filled by a member for no less than one complete academic 
14
year and the salary increase from the promotion is an increase 
15
that results in an amount no greater than the lesser of the 
16
average salary paid for other similar positions in the district 
17
requiring the same certification or the amount stipulated in 
18
the collective bargaining agreement for a similar position 
19
requiring the same certification.

20
 When assessing payment for any amount due under subsection 
21
(f), the System shall exclude any payment to the teacher from 
22
the State of Illinois or the State Board of Education over 
23
which the employer does not have discretion, notwithstanding 
24
that the payment is included in the computation of final 
25
average salary.

26
 When assessing payment for any amount due under subsection 
 


 






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1
(f), the System shall exclude any salary increases earned as a 
2
result of accepting school-sponsored, extra-curricular 
3
assignments.

4
 (h) When assessing payment for any amount due under 
5
subsection (f), the System shall exclude any salary increase 
6
described in subsection (g) of this Section given on or after 
7
July 1, 2011 but before July 1, 2014 under a contract or 
8
collective bargaining agreement entered into, amended, or 
9
renewed on or after June 1, 2005 but before July 1, 2011. 
10
Notwithstanding any other provision of this Section, any 
11
payments made or salary increases given after June 30, 2014 
12
shall be used in assessing payment for any amount due under 
13
subsection (f) of this Section.

14
 (i) The System shall prepare a report and file copies of 
15
the report with the Governor and the General Assembly by 
16
January 1, 2007 that contains all of the following information:
17
  (1) The number of recalculations required by the 
18
 changes made to this Section by Public Act 94-1057 for each 
19
 employer.
20
  (2) The dollar amount by which each employer's 
21
 contribution to the System was changed due to 
22
 recalculations required by Public Act 94-1057.
23
  (3) The total amount the System received from each 
24
 employer as a result of the changes made to this Section by 
25
 Public Act 94-4.
26
  (4) The increase in the required State contribution 
 


 






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1
 resulting from the changes made to this Section by Public 
2
 Act 94-1057.

3
(Source: P.A. 94-4, eff. 6-1-05; 94-839, eff. 6-6-06; 94-1057, 
4
eff. 7-31-06; 94-1111, eff. 2-27-07; 95-331, eff. 8-21-07; 
5
95-950, eff. 8-29-08.)




6
 Section 99. Effective date. This Act takes effect upon 
7
becoming law.