Bill Text: IL HB1572 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Illinois Pension Code. In the Downstate Police and Downstate Firefighter Articles, provides that the annual employer contribution shall include an amount sufficient to bring the total assets of the pension fund up to 80% (instead of 90%) of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2050 (instead of 2040). Makes a conforming change. In the General Provisions Article, requires the Commission on Government Forecasting and Accountability to conduct a study on the costs and benefits of consolidating all downstate police and downstate firefighter pension funds into a single pension fund and to submit its report on its findings to the General Assembly on or before December 1, 2020. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB1572 Detail]

Download: Illinois-2019-HB1572-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB1572

Introduced , by Rep. Ryan Spain

SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-165.5 new
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
30 ILCS 805/8.43 new

Amends the Illinois Pension Code. In the Downstate Police and Downstate Firefighter Articles, provides that the annual employer contribution shall include an amount sufficient to bring the total assets of the pension fund up to 80% (instead of 90%) of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2050 (instead of 2040). Makes a conforming change. In the General Provisions Article, requires the Commission on Government Forecasting and Accountability to conduct a study on the costs and benefits of consolidating all downstate police and downstate firefighter pension funds into a single pension fund and to submit its report on its findings to the General Assembly on or before December 1, 2020. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB101 06713 RPS 51740 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

HB1572LRB101 06713 RPS 51740 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 and by adding Section 1-165.5 as
6follows:
7 (40 ILCS 5/1-165.5 new)
8 Sec. 1-165.5. Commission on Government Forecasting and
9Accountability study on consolidation of pension funds. The
10Commission on Government Forecasting and Accountability shall
11conduct a study on the costs and benefits of consolidating all
12Article 3 and Article 4 pension funds into a single pension
13fund. The Commission shall submit its report to the General
14Assembly on its findings on or before December 1, 2020.
15 (40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
16 Sec. 3-125. Financing.
17 (a) The city council or the board of trustees of the
18municipality shall annually levy a tax upon all the taxable
19property of the municipality at the rate on the dollar which
20will produce an amount which, when added to the deductions from
21the salaries or wages of police officers, and revenues
22available from other sources, will equal a sum sufficient to

HB1572- 2 -LRB101 06713 RPS 51740 b
1meet the annual requirements of the police pension fund. The
2annual requirements to be provided by such tax levy are equal
3to (1) the normal cost of the pension fund for the year
4involved, plus (2) an amount sufficient to bring the total
5assets of the pension fund up to 80% 90% of the total actuarial
6liabilities of the pension fund by the end of municipal fiscal
7year 2050 2040, as annually updated and determined by an
8enrolled actuary employed by the Illinois Department of
9Insurance or by an enrolled actuary retained by the pension
10fund or the municipality. In making these determinations, the
11required minimum employer contribution shall be calculated
12each year as a level percentage of payroll over the years
13remaining up to and including fiscal year 2050 2040 and shall
14be determined under the projected unit credit actuarial cost
15method. The tax shall be levied and collected in the same
16manner as the general taxes of the municipality, and in
17addition to all other taxes now or hereafter authorized to be
18levied upon all property within the municipality, and shall be
19in addition to the amount authorized to be levied for general
20purposes as provided by Section 8-3-1 of the Illinois Municipal
21Code, approved May 29, 1961, as amended. The tax shall be
22forwarded directly to the treasurer of the board within 30
23business days after receipt by the county.
24 (b) For purposes of determining the required employer
25contribution to a pension fund, the value of the pension fund's
26assets shall be equal to the actuarial value of the pension

HB1572- 3 -LRB101 06713 RPS 51740 b
1fund's assets, which shall be calculated as follows:
2 (1) On March 30, 2011, the actuarial value of a pension
3 fund's assets shall be equal to the market value of the
4 assets as of that date.
5 (2) In determining the actuarial value of the System's
6 assets for fiscal years after March 30, 2011, any actuarial
7 gains or losses from investment return incurred in a fiscal
8 year shall be recognized in equal annual amounts over the
9 5-year period following that fiscal year.
10 (c) If a participating municipality fails to transmit to
11the fund contributions required of it under this Article for
12more than 90 days after the payment of those contributions is
13due, the fund may, after giving notice to the municipality,
14certify to the State Comptroller the amounts of the delinquent
15payments in accordance with any applicable rules of the
16Comptroller, and the Comptroller must, beginning in fiscal year
172016, deduct and remit to the fund the certified amounts or a
18portion of those amounts from the following proportions of
19payments of State funds to the municipality:
20 (1) in fiscal year 2016, one-third of the total amount
21 of any payments of State funds to the municipality;
22 (2) in fiscal year 2017, two-thirds of the total amount
23 of any payments of State funds to the municipality; and
24 (3) in fiscal year 2018 and each fiscal year
25 thereafter, the total amount of any payments of State funds
26 to the municipality.

HB1572- 4 -LRB101 06713 RPS 51740 b
1 The State Comptroller may not deduct from any payments of
2State funds to the municipality more than the amount of
3delinquent payments certified to the State Comptroller by the
4fund.
5 (d) The police pension fund shall consist of the following
6moneys which shall be set apart by the treasurer of the
7municipality:
8 (1) All moneys derived from the taxes levied hereunder;
9 (2) Contributions by police officers under Section
10 3-125.1;
11 (3) All moneys accumulated by the municipality under
12 any previous legislation establishing a fund for the
13 benefit of disabled or retired police officers;
14 (4) Donations, gifts or other transfers authorized by
15 this Article.
16 (e) The Commission on Government Forecasting and
17Accountability shall conduct a study of all funds established
18under this Article and shall report its findings to the General
19Assembly on or before January 1, 2013. To the fullest extent
20possible, the study shall include, but not be limited to, the
21following:
22 (1) fund balances;
23 (2) historical employer contribution rates for each
24 fund;
25 (3) the actuarial formulas used as a basis for employer
26 contributions, including the actual assumed rate of return

HB1572- 5 -LRB101 06713 RPS 51740 b
1 for each year, for each fund;
2 (4) available contribution funding sources;
3 (5) the impact of any revenue limitations caused by
4 PTELL and employer home rule or non-home rule status; and
5 (6) existing statutory funding compliance procedures
6 and funding enforcement mechanisms for all municipal
7 pension funds.
8(Source: P.A. 99-8, eff. 7-9-15.)
9 (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
10 Sec. 4-118. Financing.
11 (a) The city council or the board of trustees of the
12municipality shall annually levy a tax upon all the taxable
13property of the municipality at the rate on the dollar which
14will produce an amount which, when added to the deductions from
15the salaries or wages of firefighters and revenues available
16from other sources, will equal a sum sufficient to meet the
17annual actuarial requirements of the pension fund, as
18determined by an enrolled actuary employed by the Illinois
19Department of Insurance or by an enrolled actuary retained by
20the pension fund or municipality. For the purposes of this
21Section, the annual actuarial requirements of the pension fund
22are equal to (1) the normal cost of the pension fund, or 17.5%
23of the salaries and wages to be paid to firefighters for the
24year involved, whichever is greater, plus (2) an annual amount
25sufficient to bring the total assets of the pension fund up to

HB1572- 6 -LRB101 06713 RPS 51740 b
180% 90% of the total actuarial liabilities of the pension fund
2by the end of municipal fiscal year 2050 2040, as annually
3updated and determined by an enrolled actuary employed by the
4Illinois Department of Insurance or by an enrolled actuary
5retained by the pension fund or the municipality. In making
6these determinations, the required minimum employer
7contribution shall be calculated each year as a level
8percentage of payroll over the years remaining up to and
9including fiscal year 2050 2040 and shall be determined under
10the projected unit credit actuarial cost method. The amount to
11be applied towards the amortization of the unfunded accrued
12liability in any year shall not be less than the annual amount
13required to amortize the unfunded accrued liability, including
14interest, as a level percentage of payroll over the number of
15years remaining in the 40 year amortization period.
16 (a-5) For purposes of determining the required employer
17contribution to a pension fund, the value of the pension fund's
18assets shall be equal to the actuarial value of the pension
19fund's assets, which shall be calculated as follows:
20 (1) On March 30, 2011, the actuarial value of a pension
21 fund's assets shall be equal to the market value of the
22 assets as of that date.
23 (2) In determining the actuarial value of the pension
24 fund's assets for fiscal years after March 30, 2011, any
25 actuarial gains or losses from investment return incurred
26 in a fiscal year shall be recognized in equal annual

HB1572- 7 -LRB101 06713 RPS 51740 b
1 amounts over the 5-year period following that fiscal year.
2 (b) The tax shall be levied and collected in the same
3manner as the general taxes of the municipality, and shall be
4in addition to all other taxes now or hereafter authorized to
5be levied upon all property within the municipality, and in
6addition to the amount authorized to be levied for general
7purposes, under Section 8-3-1 of the Illinois Municipal Code or
8under Section 14 of the Fire Protection District Act. The tax
9shall be forwarded directly to the treasurer of the board
10within 30 business days of receipt by the county (or, in the
11case of amounts added to the tax levy under subsection (f),
12used by the municipality to pay the employer contributions
13required under subsection (b-1) of Section 15-155 of this
14Code).
15 (b-5) If a participating municipality fails to transmit to
16the fund contributions required of it under this Article for
17more than 90 days after the payment of those contributions is
18due, the fund may, after giving notice to the municipality,
19certify to the State Comptroller the amounts of the delinquent
20payments in accordance with any applicable rules of the
21Comptroller, and the Comptroller must, beginning in fiscal year
222016, deduct and remit to the fund the certified amounts or a
23portion of those amounts from the following proportions of
24payments of State funds to the municipality:
25 (1) in fiscal year 2016, one-third of the total amount
26 of any payments of State funds to the municipality;

HB1572- 8 -LRB101 06713 RPS 51740 b
1 (2) in fiscal year 2017, two-thirds of the total amount
2 of any payments of State funds to the municipality; and
3 (3) in fiscal year 2018 and each fiscal year
4 thereafter, the total amount of any payments of State funds
5 to the municipality.
6 The State Comptroller may not deduct from any payments of
7State funds to the municipality more than the amount of
8delinquent payments certified to the State Comptroller by the
9fund.
10 (c) The board shall make available to the membership and
11the general public for inspection and copying at reasonable
12times the most recent Actuarial Valuation Balance Sheet and Tax
13Levy Requirement issued to the fund by the Department of
14Insurance.
15 (d) The firefighters' pension fund shall consist of the
16following moneys which shall be set apart by the treasurer of
17the municipality: (1) all moneys derived from the taxes levied
18hereunder; (2) contributions by firefighters as provided under
19Section 4-118.1; (3) all rewards in money, fees, gifts, and
20emoluments that may be paid or given for or on account of
21extraordinary service by the fire department or any member
22thereof, except when allowed to be retained by competitive
23awards; and (4) any money, real estate or personal property
24received by the board.
25 (e) For the purposes of this Section, "enrolled actuary"
26means an actuary: (1) who is a member of the Society of

HB1572- 9 -LRB101 06713 RPS 51740 b
1Actuaries or the American Academy of Actuaries; and (2) who is
2enrolled under Subtitle C of Title III of the Employee
3Retirement Income Security Act of 1974, or who has been engaged
4in providing actuarial services to one or more public
5retirement systems for a period of at least 3 years as of July
61, 1983.
7 (f) The corporate authorities of a municipality that
8employs a person who is described in subdivision (d) of Section
94-106 may add to the tax levy otherwise provided for in this
10Section an amount equal to the projected cost of the employer
11contributions required to be paid by the municipality to the
12State Universities Retirement System under subsection (b-1) of
13Section 15-155 of this Code.
14 (g) The Commission on Government Forecasting and
15Accountability shall conduct a study of all funds established
16under this Article and shall report its findings to the General
17Assembly on or before January 1, 2013. To the fullest extent
18possible, the study shall include, but not be limited to, the
19following:
20 (1) fund balances;
21 (2) historical employer contribution rates for each
22 fund;
23 (3) the actuarial formulas used as a basis for employer
24 contributions, including the actual assumed rate of return
25 for each year, for each fund;
26 (4) available contribution funding sources;

HB1572- 10 -LRB101 06713 RPS 51740 b
1 (5) the impact of any revenue limitations caused by
2 PTELL and employer home rule or non-home rule status; and
3 (6) existing statutory funding compliance procedures
4 and funding enforcement mechanisms for all municipal
5 pension funds.
6(Source: P.A. 99-8, eff. 7-9-15.)
7 Section 90. The State Mandates Act is amended by adding
8Section 8.43 as follows:
9 (30 ILCS 805/8.43 new)
10 Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
11of this Act, no reimbursement by the State is required for the
12implementation of any mandate created by this amendatory Act of
13the 101st General Assembly.
14 Section 99. Effective date. This Act takes effect upon
15becoming law.
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