Bill Text: IL HB1371 | 2013-2014 | 98th General Assembly | Introduced


Bill Title: Amends the Downstate Police and Firefighter Articles of the Illinois Pension Code. Delays by one year a procedure under which the Comptroller is required to divert certain State payments from the intended recipient to a pension fund when the intended recipient is more than 90 days overdue in making a required contribution to the pension fund. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB1371 Detail]

Download: Illinois-2013-HB1371-Introduced.html


98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB1371

Introduced , by Rep. David Harris

SYNOPSIS AS INTRODUCED:
40 ILCS 5/3-125 from Ch. 108 1/2, par. 3-125
40 ILCS 5/4-118 from Ch. 108 1/2, par. 4-118

Amends the Downstate Police and Firefighter Articles of the Illinois Pension Code. Delays by one year a procedure under which the Comptroller is required to divert certain State payments from the intended recipient to a pension fund when the intended recipient is more than 90 days overdue in making a required contribution to the pension fund. Effective immediately.
LRB098 09348 EFG 39489 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

HB1371LRB098 09348 EFG 39489 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 Illinois Pension Code is amended by changing
5Sections 3-125 and 4-118 as follows:
6 (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
7 Sec. 3-125. Financing.
8 (a) The city council or the board of trustees of the
9municipality shall annually levy a tax upon all the taxable
10property of the municipality at the rate on the dollar which
11will produce an amount which, when added to the deductions from
12the salaries or wages of police officers, and revenues
13available from other sources, will equal a sum sufficient to
14meet the annual requirements of the police pension fund. The
15annual requirements to be provided by such tax levy are equal
16to (1) the normal cost of the pension fund for the year
17involved, plus (2) an amount sufficient to bring the total
18assets of the pension fund up to 90% of the total actuarial
19liabilities of the pension fund by the end of municipal fiscal
20year 2040, as annually updated and determined by an enrolled
21actuary employed by the Illinois Department of Insurance or by
22an enrolled actuary retained by the pension fund or the
23municipality. In making these determinations, the required

HB1371- 2 -LRB098 09348 EFG 39489 b
1minimum employer contribution shall be calculated each year as
2a level percentage of payroll over the years remaining up to
3and including fiscal year 2040 and shall be determined under
4the projected unit credit actuarial cost method. The tax shall
5be levied and collected in the same manner as the general taxes
6of the municipality, and in addition to all other taxes now or
7hereafter authorized to be levied upon all property within the
8municipality, and shall be in addition to the amount authorized
9to be levied for general purposes as provided by Section 8-3-1
10of the Illinois Municipal Code, approved May 29, 1961, as
11amended. The tax shall be forwarded directly to the treasurer
12of the board within 30 business days after receipt by the
13county.
14 (b) For purposes of determining the required employer
15contribution to a pension fund, the value of the pension fund's
16assets shall be equal to the actuarial value of the pension
17fund's assets, which shall be calculated as follows:
18 (1) On March 30, 2011, the actuarial value of a pension
19 fund's assets shall be equal to the market value of the
20 assets as of that date.
21 (2) In determining the actuarial value of the System's
22 assets for fiscal years after March 30, 2011, any actuarial
23 gains or losses from investment return incurred in a fiscal
24 year shall be recognized in equal annual amounts over the
25 5-year period following that fiscal year.
26 (c) If a participating municipality fails to transmit to

HB1371- 3 -LRB098 09348 EFG 39489 b
1the fund contributions required of it under this Article for
2more than 90 days after the payment of those contributions is
3due, the fund may, after giving notice to the municipality,
4certify to the State Comptroller the amounts of the delinquent
5payments, and the Comptroller must, beginning in fiscal year
62017 2016, deduct and deposit into the fund the certified
7amounts or a portion of those amounts from the following
8proportions of grants of State funds to the municipality:
9 (1) in fiscal year 2017 2016, one-third of the total
10 amount of any grants of State funds to the municipality;
11 (2) in fiscal year 2018 2017, two-thirds of the total
12 amount of any grants of State funds to the municipality;
13 and
14 (3) in fiscal year 2019 2018 and each fiscal year
15 thereafter, the total amount of any grants of State funds
16 to the municipality.
17 The State Comptroller may not deduct from any grants of
18State funds to the municipality more than the amount of
19delinquent payments certified to the State Comptroller by the
20fund.
21 (d) The police pension fund shall consist of the following
22moneys which shall be set apart by the treasurer of the
23municipality:
24 (1) All moneys derived from the taxes levied hereunder;
25 (2) Contributions by police officers under Section
26 3-125.1;

HB1371- 4 -LRB098 09348 EFG 39489 b
1 (3) All moneys accumulated by the municipality under
2 any previous legislation establishing a fund for the
3 benefit of disabled or retired police officers;
4 (4) Donations, gifts or other transfers authorized by
5 this Article.
6 (e) The Commission on Government Forecasting and
7Accountability shall conduct a study of all funds established
8under this Article and shall report its findings to the General
9Assembly on or before January 1, 2013. To the fullest extent
10possible, the study shall include, but not be limited to, the
11following:
12 (1) fund balances;
13 (2) historical employer contribution rates for each
14 fund;
15 (3) the actuarial formulas used as a basis for employer
16 contributions, including the actual assumed rate of return
17 for each year, for each fund;
18 (4) available contribution funding sources;
19 (5) the impact of any revenue limitations caused by
20 PTELL and employer home rule or non-home rule status; and
21 (6) existing statutory funding compliance procedures
22 and funding enforcement mechanisms for all municipal
23 pension funds.
24(Source: P.A. 95-530, eff. 8-28-07; 96-1495, eff. 1-1-11.)
25 (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)

HB1371- 5 -LRB098 09348 EFG 39489 b
1 Sec. 4-118. Financing.
2 (a) The city council or the board of trustees of the
3municipality shall annually levy a tax upon all the taxable
4property of the municipality at the rate on the dollar which
5will produce an amount which, when added to the deductions from
6the salaries or wages of firefighters and revenues available
7from other sources, will equal a sum sufficient to meet the
8annual actuarial requirements of the pension fund, as
9determined by an enrolled actuary employed by the Illinois
10Department of Insurance or by an enrolled actuary retained by
11the pension fund or municipality. For the purposes of this
12Section, the annual actuarial requirements of the pension fund
13are equal to (1) the normal cost of the pension fund, or 17.5%
14of the salaries and wages to be paid to firefighters for the
15year involved, whichever is greater, plus (2) an annual amount
16sufficient to bring the total assets of the pension fund up to
1790% of the total actuarial liabilities of the pension fund by
18the end of municipal fiscal year 2040, as annually updated and
19determined by an enrolled actuary employed by the Illinois
20Department of Insurance or by an enrolled actuary retained by
21the pension fund or the municipality. In making these
22determinations, the required minimum employer contribution
23shall be calculated each year as a level percentage of payroll
24over the years remaining up to and including fiscal year 2040
25and shall be determined under the projected unit credit
26actuarial cost method. The amount to be applied towards the

HB1371- 6 -LRB098 09348 EFG 39489 b
1amortization of the unfunded accrued liability in any year
2shall not be less than the annual amount required to amortize
3the unfunded accrued liability, including interest, as a level
4percentage of payroll over the number of years remaining in the
540 year amortization period.
6 (a-5) For purposes of determining the required employer
7contribution to a pension fund, the value of the pension fund's
8assets shall be equal to the actuarial value of the pension
9fund's assets, which shall be calculated as follows:
10 (1) On March 30, 2011, the actuarial value of a pension
11 fund's assets shall be equal to the market value of the
12 assets as of that date.
13 (2) In determining the actuarial value of the pension
14 fund's assets for fiscal years after March 30, 2011, any
15 actuarial gains or losses from investment return incurred
16 in a fiscal year shall be recognized in equal annual
17 amounts over the 5-year period following that fiscal year.
18 (b) The tax shall be levied and collected in the same
19manner as the general taxes of the municipality, and shall be
20in addition to all other taxes now or hereafter authorized to
21be levied upon all property within the municipality, and in
22addition to the amount authorized to be levied for general
23purposes, under Section 8-3-1 of the Illinois Municipal Code or
24under Section 14 of the Fire Protection District Act. The tax
25shall be forwarded directly to the treasurer of the board
26within 30 business days of receipt by the county (or, in the

HB1371- 7 -LRB098 09348 EFG 39489 b
1case of amounts added to the tax levy under subsection (f),
2used by the municipality to pay the employer contributions
3required under subsection (b-1) of Section 15-155 of this
4Code).
5 (b-5) If a participating municipality fails to transmit to
6the fund contributions required of it under this Article for
7more than 90 days after the payment of those contributions is
8due, the fund may, after giving notice to the municipality,
9certify to the State Comptroller the amounts of the delinquent
10payments, and the Comptroller must, beginning in fiscal year
112017 2016, deduct and deposit into the fund the certified
12amounts or a portion of those amounts from the following
13proportions of grants of State funds to the municipality:
14 (1) in fiscal year 2017 2016, one-third of the total
15 amount of any grants of State funds to the municipality;
16 (2) in fiscal year 2018 2017, two-thirds of the total
17 amount of any grants of State funds to the municipality;
18 and
19 (3) in fiscal year 2019 2018 and each fiscal year
20 thereafter, the total amount of any grants of State funds
21 to the municipality.
22 The State Comptroller may not deduct from any grants of
23State funds to the municipality more than the amount of
24delinquent payments certified to the State Comptroller by the
25fund.
26 (c) The board shall make available to the membership and

HB1371- 8 -LRB098 09348 EFG 39489 b
1the general public for inspection and copying at reasonable
2times the most recent Actuarial Valuation Balance Sheet and Tax
3Levy Requirement issued to the fund by the Department of
4Insurance.
5 (d) The firefighters' pension fund shall consist of the
6following moneys which shall be set apart by the treasurer of
7the municipality: (1) all moneys derived from the taxes levied
8hereunder; (2) contributions by firefighters as provided under
9Section 4-118.1; (3) all rewards in money, fees, gifts, and
10emoluments that may be paid or given for or on account of
11extraordinary service by the fire department or any member
12thereof, except when allowed to be retained by competitive
13awards; and (4) any money, real estate or personal property
14received by the board.
15 (e) For the purposes of this Section, "enrolled actuary"
16means an actuary: (1) who is a member of the Society of
17Actuaries or the American Academy of Actuaries; and (2) who is
18enrolled under Subtitle C of Title III of the Employee
19Retirement Income Security Act of 1974, or who has been engaged
20in providing actuarial services to one or more public
21retirement systems for a period of at least 3 years as of July
221, 1983.
23 (f) The corporate authorities of a municipality that
24employs a person who is described in subdivision (d) of Section
254-106 may add to the tax levy otherwise provided for in this
26Section an amount equal to the projected cost of the employer

HB1371- 9 -LRB098 09348 EFG 39489 b
1contributions required to be paid by the municipality to the
2State Universities Retirement System under subsection (b-1) of
3Section 15-155 of this Code.
4 (g) The Commission on Government Forecasting and
5Accountability shall conduct a study of all funds established
6under this Article and shall report its findings to the General
7Assembly on or before January 1, 2013. To the fullest extent
8possible, the study shall include, but not be limited to, the
9following:
10 (1) fund balances;
11 (2) historical employer contribution rates for each
12 fund;
13 (3) the actuarial formulas used as a basis for employer
14 contributions, including the actual assumed rate of return
15 for each year, for each fund;
16 (4) available contribution funding sources;
17 (5) the impact of any revenue limitations caused by
18 PTELL and employer home rule or non-home rule status; and
19 (6) existing statutory funding compliance procedures
20 and funding enforcement mechanisms for all municipal
21 pension funds.
22(Source: P.A. 96-1495, eff. 1-1-11.)
23 Section 99. Effective date. This Act takes effect upon
24becoming law.
feedback