Bill Text: IL HB1444 | 2013-2014 | 98th General Assembly | Engrossed

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Bill Title: Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Provides that the Board shall determine the amortization period to be used in calculating the amount to be contributed by participating municipalities and participating instrumentalities in order to adjust for changes in the Fund's unfunded accrued liabilities. Specifies that the amortization period shall not exceed 30 years for participating municipalities or 10 years for participating instrumentalities. Allows participating employees to withdraw additional contributions only to the extent permitted by the federal Internal Revenue Code of 1986. Requires the Board to meet at least quarterly (rather than monthly). Also makes technical changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Moderate Partisan Bill (Democrat 8-1)

Status: (Passed) 2013-08-09 - Public Act . . . . . . . . . 98-0218 [HB1444 Detail]

Download: Illinois-2013-HB1444-Engrossed.html

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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 7-135, 7-146, 7-172, 7-173, and 7-177 as follows:
(40 ILCS 5/7-135) (from Ch. 108 1/2, par. 7-135)
Sec. 7-135. Authorized agents.
(a) Each participating municipality and participating
instrumentality shall appoint an authorized agent who shall
have the powers and duties set forth in this section. In
absence of such appointment, the duties of the authorized agent
shall devolve upon the clerk or secretary of the municipality
or instrumentality, the township supervisor in the case of a
township, and in the case of township school trustees upon the
township school treasurer. In townships the Authorized Agent
shall be the township supervisor.
(b) The authorized agent shall have the following powers
and duties:
1. To certify to the fund whether or not a given person
is authorized to participate in the fund;
2. To certify to the fund when a participating employee
is on a leave of absence authorized by the municipality;
3. To request the proper officer to cause employee

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contributions to be withheld from earnings and transmitted
to the fund;
4. To request the proper officer to cause municipality
contributions to be forwarded to the fund promptly;
5. To forward promptly to all participating employees
any communications from the fund for such employees;
6. To forward promptly to the fund all applications,
claims, reports and other communications delivered to him
by participating employees;
7. To perform all duties related to the administration
of this retirement system as requested by the fund and the
governing body of his municipality.
(c) The governing body of each participating municipality
and participating instrumentality may delegate any or all of
the following powers and duties to its authorized agent:
1. To file a petition for nomination of an executive
trustee of the fund.
2. To cast the ballot for election of an executive
trustee of the fund.
If a governing body does not authorize its agent to perform
the powers and duties set forth in this paragraph (c), they
shall be performed by the governing body itself, unless the
governing body by resolution duly certified to the fund
delegates them to some other officer or employee.
(d) The delivery of any communication or document by an
employee or a participating municipality or participating

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instrumentality to its authorized agent shall not constitute
delivery to the fund.
(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12.)
(40 ILCS 5/7-146) (from Ch. 108 1/2, par. 7-146)
Sec. 7-146. Temporary disability benefits - Eligibility.
Temporary disability benefits shall be payable to
participating employees as hereinafter provided.
(a) The participating employee shall be considered
temporarily disabled if:
1. He is unable to perform the duties of any position
which might reasonably be assigned to him by his employing
municipality or instrumentality thereof or participating
instrumentality due to mental or physical disability
caused by bodily injury or disease, other than as a result
of self-inflicted injury or addiction to narcotic drugs;
2. The Board has received written certifications from
at least one licensed and practicing physician and the
governing body of the employing municipality or
instrumentality thereof or participating instrumentality
stating that the employee meets the conditions set forth in
subparagraph 1 of this paragraph (a).
(b) A temporary disability benefit shall be payable to a
temporarily disabled employee provided:
1. He:
(i) has at least one year of service immediately

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preceding at the date the temporary disability was
incurred and has made contributions to the fund for at
least the number of months of service normally required
in his position during a 12-month period, or has at
least 5 years of service credit, the last year of which
immediately precedes such date; or
(ii) had qualified under clause (i) above, but had
an interruption in service with the same participating
municipality or participating instrumentality of not
more than 3 months in the 12 months preceding the date
the temporary disability was incurred and was not paid
a separation benefit; or
(iii) had qualified under clause (i) above, but had
an interruption after 20 or more years of creditable
service, was not paid a separation benefit, and
returned to service prior to the date the disability
was incurred.
Item (iii) of this subdivision shall apply to all
employees whose disabilities were incurred on or after July
1, 1985, and any such employee who becomes eligible for a
disability benefit under item (iii) shall be entitled to
receive a lump sum payment of any accumulated disability
benefits which may accrue from the date the disability was
incurred until the effective date of this amendatory Act of
1987.
Periods of qualified leave granted in compliance with

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the federal Family and Medical Leave Act shall be ignored
for purposes of determining the number of consecutive
months of employment under this subdivision (b)1.
2. He has been temporarily disabled for at least 30
days, except where a former temporary or permanent and
total disability has reoccurred within 6 months after the
employee has returned to service.
3. He is receiving no earnings from a participating
municipality or instrumentality thereof or participating
instrumentality, except as allowed under subsection (f) of
Section 7-152.
4. He has not refused to submit to a reasonable
physical examination by a physician appointed by the Board.
5. His disability is not the result of a mental or
physical condition which existed on the earliest date of
service from which he has uninterrupted service, including
prior service, at the date of his disability, provided that
this limitation is not applicable if the date of disability
is after December 31, 2001, nor is it applicable to a
participating employee who: (i) on the date of disability
has 5 years of creditable service, exclusive of creditable
service for periods of disability; or (ii) received no
medical treatment for the condition for the 3 years
immediately prior to such earliest date of service.
6. He is not separated from the service of the
participating municipality or instrumentality thereof or

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participating instrumentality which employed him on the
date his temporary disability was incurred; for the
purposes of payment of temporary disability benefits, a
participating employee, whose employment relationship is
terminated by his employing municipality, shall be deemed
not to be separated from the service of his employing
municipality or participating instrumentality if he
continues disabled by the same condition and so long as he
is otherwise entitled to such disability benefit.
7. He has not failed or refused to consent to and sign
an authorization allowing the Board to receive copies of or
to examine his medical and hospital records.
8. He has not failed or refused to provide complete
information regarding any other employment for
compensation he has received since becoming disabled.
(Source: P.A. 97-415, eff. 8-16-11.)
(40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
Sec. 7-172. Contributions by participating municipalities
and participating instrumentalities.
(a) Each participating municipality and each participating
instrumentality shall make payment to the fund as follows:
1. municipality contributions in an amount determined
by applying the municipality contribution rate to each
payment of earnings paid to each of its participating
employees;

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2. an amount equal to the employee contributions
provided by paragraph (a) of Section 7-173, whether or not
the employee contributions are withheld as permitted by
that Section;
3. all accounts receivable, together with interest
charged thereon, as provided in Section 7-209;
4. if it has no participating employees with current
earnings, an amount payable which, over a closed period of
20 years for participating municipalities and 10 years for
participating instrumentalities, will amortize, at the
effective rate for that year, any unfunded obligation. The
unfunded obligation shall be computed as provided in
paragraph 2 of subsection (b);
5. if it has fewer than 7 participating employees or a
negative balance in its municipality reserve, the greater
of (A) an amount payable that, over a period of 20 years,
will amortize at the effective rate for that year any
unfunded obligation, computed as provided in paragraph 2 of
subsection (b) or (B) the amount required by paragraph 1 of
this subsection (a).
(b) A separate municipality contribution rate shall be
determined for each calendar year for all participating
municipalities together with all instrumentalities thereof.
The municipality contribution rate shall be determined for
participating instrumentalities as if they were participating
municipalities. The municipality contribution rate shall be

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the sum of the following percentages:
1. The percentage of earnings of all the participating
employees of all participating municipalities and
participating instrumentalities which, if paid over the
entire period of their service, will be sufficient when
combined with all employee contributions available for the
payment of benefits, to provide all annuities for
participating employees, and the $3,000 death benefit
payable under Sections 7-158 and 7-164, such percentage to
be known as the normal cost rate.
2. The percentage of earnings of the participating
employees of each participating municipality and
participating instrumentalities necessary to adjust for
the difference between the present value of all benefits,
excluding temporary and total and permanent disability and
death benefits, to be provided for its participating
employees and the sum of its accumulated municipality
contributions and the accumulated employee contributions
and the present value of expected future employee and
municipality contributions pursuant to subparagraph 1 of
this paragraph (b). This adjustment shall be spread over a
period determined by the Board, not to exceed 30 years for
participating municipalities or 10 years for participating
instrumentalities the remainder of the period that is
allowable under generally accepted accounting principles.
3. The percentage of earnings of the participating

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employees of all municipalities and participating
instrumentalities necessary to provide the present value
of all temporary and total and permanent disability
benefits granted during the most recent year for which
information is available.
4. The percentage of earnings of the participating
employees of all participating municipalities and
participating instrumentalities necessary to provide the
present value of the net single sum death benefits expected
to become payable from the reserve established under
Section 7-206 during the year for which this rate is fixed.
5. The percentage of earnings necessary to meet any
deficiency arising in the Terminated Municipality Reserve.
(c) A separate municipality contribution rate shall be
computed for each participating municipality or participating
instrumentality for its sheriff's law enforcement employees.
A separate municipality contribution rate shall be
computed for the sheriff's law enforcement employees of each
forest preserve district that elects to have such employees.
For the period from January 1, 1986 to December 31, 1986, such
rate shall be the forest preserve district's regular rate plus
2%.
In the event that the Board determines that there is an
actuarial deficiency in the account of any municipality with
respect to a person who has elected to participate in the Fund
under Section 3-109.1 of this Code, the Board may adjust the

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municipality's contribution rate so as to make up that
deficiency over such reasonable period of time as the Board may
determine.
(d) The Board may establish a separate municipality
contribution rate for all employees who are program
participants employed under the federal Comprehensive
Employment Training Act by all of the participating
municipalities and instrumentalities. The Board may also
provide that, in lieu of a separate municipality rate for these
employees, a portion of the municipality contributions for such
program participants shall be refunded or an extra charge
assessed so that the amount of municipality contributions
retained or received by the fund for all CETA program
participants shall be an amount equal to that which would be
provided by the separate municipality contribution rate for all
such program participants. Refunds shall be made to prime
sponsors of programs upon submission of a claim therefor and
extra charges shall be assessed to participating
municipalities and instrumentalities. In establishing the
municipality contribution rate as provided in paragraph (b) of
this Section, the use of a separate municipality contribution
rate for program participants or the refund of a portion of the
municipality contributions, as the case may be, may be
considered.
(e) Computations of municipality contribution rates for
the following calendar year shall be made prior to the

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beginning of each year, from the information available at the
time the computations are made, and on the assumption that the
employees in each participating municipality or participating
instrumentality at such time will continue in service until the
end of such calendar year at their respective rates of earnings
at such time.
(f) Any municipality which is the recipient of State
allocations representing that municipality's contributions for
retirement annuity purposes on behalf of its employees as
provided in Section 12-21.16 of the Illinois Public Aid Code
shall pay the allocations so received to the Board for such
purpose. Estimates of State allocations to be received during
any taxable year shall be considered in the determination of
the municipality's tax rate for that year under Section 7-171.
If a special tax is levied under Section 7-171, none of the
proceeds may be used to reimburse the municipality for the
amount of State allocations received and paid to the Board. Any
multiple-county or consolidated health department which
receives contributions from a county under Section 11.2 of "An
Act in relation to establishment and maintenance of county and
multiple-county health departments", approved July 9, 1943, as
amended, or distributions under Section 3 of the Department of
Public Health Act, shall use these only for municipality
contributions by the health department.
(g) Municipality contributions for the several purposes
specified shall, for township treasurers and employees in the

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offices of the township treasurers who meet the qualifying
conditions for coverage hereunder, be allocated among the
several school districts and parts of school districts serviced
by such treasurers and employees in the proportion which the
amount of school funds of each district or part of a district
handled by the treasurer bears to the total amount of all
school funds handled by the treasurer.
From the funds subject to allocation among districts and
parts of districts pursuant to the School Code, the trustees
shall withhold the proportionate share of the liability for
municipality contributions imposed upon such districts by this
Section, in respect to such township treasurers and employees
and remit the same to the Board.
The municipality contribution rate for an educational
service center shall initially be the same rate for each year
as the regional office of education or school district which
serves as its administrative agent. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
The municipality contribution rate for a public agency,
other than a vocational education cooperative, formed under the
Intergovernmental Cooperation Act shall initially be the
average rate for the municipalities which are parties to the
intergovernmental agreement. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.

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(h) Each participating municipality and participating
instrumentality shall make the contributions in the amounts
provided in this Section in the manner prescribed from time to
time by the Board and all such contributions shall be
obligations of the respective participating municipalities and
participating instrumentalities to this fund. The failure to
deduct any employee contributions shall not relieve the
participating municipality or participating instrumentality of
its obligation to this fund. Delinquent payments of
contributions due under this Section may, with interest, be
recovered by civil action against the participating
municipalities or participating instrumentalities.
Municipality contributions, other than the amount necessary
for employee contributions, for periods of service by employees
from whose earnings no deductions were made for employee
contributions to the fund, may be charged to the municipality
reserve for the municipality or participating instrumentality.
(i) Contributions by participating instrumentalities shall
be determined as provided herein except that the percentage
derived under subparagraph 2 of paragraph (b) of this Section,
and the amount payable under subparagraph 4 of paragraph (a) of
this Section, shall be based on an amortization period of 10
years.
(j) Notwithstanding the other provisions of this Section,
the additional unfunded liability accruing as a result of this
amendatory Act of the 94th General Assembly shall be amortized

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over a period of 30 years beginning on January 1 of the second
calendar year following the calendar year in which this
amendatory Act takes effect, except that the employer may
provide for a longer amortization period by adopting a
resolution or ordinance specifying a 35-year or 40-year period
and submitting a certified copy of the ordinance or resolution
to the fund no later than June 1 of the calendar year following
the calendar year in which this amendatory Act takes effect.
(k) If the amount of a participating employee's reported
earnings for any of the 12-month periods used to determine the
final rate of earnings exceeds the employee's 12 month reported
earnings with the same employer for the previous year by the
greater of 6% or 1.5 times the annual increase in the Consumer
Price Index-U, as established by the United States Department
of Labor for the preceding September, the participating
municipality or participating instrumentality that paid those
earnings shall pay to the Fund, in addition to any other
contributions required under this Article, the present value of
the increase in the pension resulting from the portion of the
increase in salary that is in excess of the greater of 6% or
1.5 times the annual increase in the Consumer Price Index-U, as
determined by the Fund. This present value shall be computed on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the Fund that is available
at the time of the computation.
Whenever it determines that a payment is or may be required

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under this subsection (k), the fund shall calculate the amount
of the payment and bill the participating municipality or
participating instrumentality for that amount. The bill shall
specify the calculations used to determine the amount due. If
the participating municipality or participating
instrumentality disputes the amount of the bill, it may, within
30 days after receipt of the bill, apply to the fund in writing
for a recalculation. The application must specify in detail the
grounds of the dispute. Upon receiving a timely application for
recalculation, the fund shall review the application and, if
appropriate, recalculate the amount due. The participating
municipality and participating instrumentality contributions
required under this subsection (k) may be paid in the form of a
lump sum within 90 days after receipt of the bill. If the
participating municipality and participating instrumentality
contributions are not paid within 90 days after receipt of the
bill, then interest will be charged at a rate equal to the
fund's annual actuarially assumed rate of return on investment
compounded annually from the 91st day after receipt of the
bill. Payments must be concluded within 3 years after receipt
of the bill by the participating municipality or participating
instrumentality.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from overload or overtime earnings.
When assessing payment for any amount due under this

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subsection (k), the fund shall also exclude earnings increases
attributable to standard employment promotions resulting in
increased responsibility and workload.
This subsection (k) does not apply to earnings increases
paid to individuals under contracts or collective bargaining
agreements entered into, amended, or renewed before January 1,
2012 (the effective date of Public Act 97-609), earnings
increases paid to members who are 10 years or more from
retirement eligibility, or earnings increases resulting from
an increase in the number of hours required to be worked.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings
attributable to personnel policies adopted before January 1,
2012 (the effective date of Public Act 97-609) as long as those
policies are not applicable to employees who begin service on
or after January 1, 2012 (the effective date of Public Act
97-609).
(Source: P.A. 96-1084, eff. 7-16-10; 96-1140, eff. 7-21-10;
97-333, eff. 8-12-11; 97-609, eff. 1-1-12; 97-933, eff.
8-10-12.)
(40 ILCS 5/7-173) (from Ch. 108 1/2, par. 7-173)
Sec. 7-173. Contributions by employees.
(a) Each participating employee shall make contributions
to the fund as follows:
1. For retirement annuity purposes, normal

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contributions of 3 3/4% of earnings.
2. Additional contributions of such percentages of
each payment of earnings, as shall be elected by the
employee for retirement annuity purposes, but not in excess
of 10%. The selected rate shall be applicable to all
earnings paid following receipt by the Board of written
notice of election to make such contributions. Additional
contributions at the selected rate shall be made
concurrently with normal contributions.
3. Survivor contributions, by each participating
employee, of 3/4% of each payment of earnings.
(b) (Blank).
(c) Contributions shall be deducted from each
corresponding payment of earnings paid to each employee and
shall be remitted to the board by the participating
municipality or participating instrumentality making such
payment. The remittance, together with a report of the earnings
and contributions shall be made as directed by the board. For
township treasurers and employees of township treasurers
qualifying as employees hereunder, the contributions herein
required as deductions from salary shall be withheld by the
school township trustees from funds available for the payment
of the compensation of such treasurers and employees as
provided in the School Code and remitted to the board.
(d) An employee who has made additional contributions under
paragraph (a)2 of this Section may upon retirement or at any

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time prior thereto, elect to withdraw the total of such
additional contributions including interest credited thereon
to the end of the preceding calendar year, to the extent
permitted by the federal Internal Revenue Code of 1986, as now
or hereafter amended.
(e) Failure to make the deductions for employee
contributions provided in paragraph (c) of this Section shall
not relieve the employee from liability for such contributions.
The amount of such liability may be deducted, with interest
charged under Section 7-209, from any annuities or benefits
payable hereunder to the employee or any other person receiving
an annuity or benefit by reason of such employee's
participation.
(f) A participating employee who has at least 40 years of
creditable service in the Fund may elect to cease making the
contributions required under this Section. The status of the
employee under this Article shall be unaffected by this
election, except that the employee shall not receive any
additional creditable service for the periods of employment
following the election. An election under this subsection
relieves the employer from making additional employer
contributions in relation to that employee.
(Source: P.A. 96-1084, eff. 7-16-10; 96-1258, eff. 7-23-10;
97-333, eff. 8-12-11; 97-933, eff. 8-10-12.)
(40 ILCS 5/7-177) (from Ch. 108 1/2, par. 7-177)

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Sec. 7-177. Board meetings.
The board shall hold regular monthly meetings at least 4
times in each year and such special meetings at such other
times as may be called by the executive director upon written
notice of at least 3 trustees. At least 5 days' notice of each
meeting shall be given to each trustee. All meetings of the
board shall be open to the public and shall be held in the
offices of the board or in any other place specifically
designated in the notice of any meeting.
(Source: Laws 1963, p. 161.)
Section 90. The State Mandates Act is amended by adding
Section 8.37 as follows:
(30 ILCS 805/8.37 new)
Sec. 8.37. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 98th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.