Public Act 097-0319

HB1471 Enrolled LRB097 05390 JDS 45447 b

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

Section 7-205 as follows:

(40 ILCS 5/7-205) (from Ch. 108 1/2, par. 7-205)

Sec. 7-205. Reserves for annuities. Appropriate reserves

shall be created for payment of all annuities granted under

this Article at the time such annuities are granted and in

amounts determined to be necessary under actuarial tables

adopted by the Board upon recommendation of the actuary of the

fund. All annuities payable shall be charged to the annuity

reserve.

1. Amounts credited to annuity reserves shall be derived by

transfer of all the employee credits from the appropriate

employee reserves and by charges to the municipality reserve of

those municipalities in which the retiring employee has

accumulated service. If a retiring employee has accumulated

service in more than one participating municipality or

participating instrumentality, the aggregate municipality

charges for non-concurrent service shall be calculated as

follows:

(A) for purposes of calculating the annuity reserve, an

annuity will be calculated based on service and adjusted

earnings with each employer (without regard to the vesting

requirement contained in subsection (a) of Section 7-142);

and

(B) the difference between the municipality charges

for the actual annuity granted and the aggregation of the

municipality charges based upon the ratio of each from

those calculations to the aggregated total from paragraph

(A) of this item 1.

Aggregate municipality charges for concurrent service

shall be prorated based on the employee's earnings. The

municipality charges for retirement annuities calculated under

subparagraph a. of subparagraph 1. of subsection (a) of Section

7-142 shall be prorated based on actual contributions prorated

on a basis of the employee's earnings in case of concurrent

service and creditable service in other cases.

2. Supplemental annuities shall be handled as a separate

annuity and amounts to be credited to the annuity reserve

therefor shall be derived in the same manner as a regular

annuity.

3. When a retirement annuity is granted to an employee with

a spouse eligible for a surviving spouse annuity, there shall

be credited to the annuity reserve an amount to fund the cost

of both the retirement and surviving spouse annuity as a joint

and survivors annuity.

4. Beginning January 1, 1989, when a retirement annuity is

awarded, an amount equal to the present value of the $3,000

death benefit payable upon the death of the annuitant shall be

transferred to the annuity reserve from the appropriate

municipality reserves in the same manner as the transfer for

annuities.

5. All annuity reserves shall be revalued annually as of

December 31. Beginning as of December 31, 1973, adjustment

required therein by such revaluation shall be charged or

credited to the earnings and experience variation reserve.

6. There shall be credited to the annuity reserve all of

the payments made by annuitants under Section 7-144.2, plus an

additional amount from the earnings and experience variation

reserve to fund the cost of the incremental annuities granted

to annuitants making these payments.

7. As of December 31, 1972, the excess in the annuity

reserve shall be transferred to the municipality reserves. An

amount equal to the deficiency in the reserve of participating

municipalities and participating instrumentalities which have

no participating employees shall be allocated to their

reserves. The remainder shall be allocated in amounts

proportionate to the present value, as of January 1, 1972, of

annuities of annuitants of the remaining participating

municipalities and participating instrumentalities.

(Source: P.A. 89-136, eff. 7-14-95.)

Section 90. The State Mandates Act is amended by adding

Section 8.35 as follows:

(30 ILCS 805/8.35 new)

Sec. 8.35. 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 97th General Assembly.

Section 99. Effective date. This Act takes effect January

1, 2012.