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

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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 - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB1572 Detail]

Download: Illinois-2019-HB1572-Introduced.html

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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
HB1572 LRB101 06713 RPS 51740 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
Sections 3-125 and 4-118 and by adding Section 1-165.5 as
follows:
(40 ILCS 5/1-165.5 new)
Sec. 1-165.5. Commission on Government Forecasting and
Accountability study on consolidation of pension funds. The
Commission on Government Forecasting and Accountability shall
conduct a study on the costs and benefits of consolidating all
Article 3 and Article 4 pension funds into a single pension
fund. The Commission shall submit its report to the General
Assembly on its findings on or before December 1, 2020.
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of police officers, and revenues
available from other sources, will equal a sum sufficient to

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

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

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

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

HB1572 - 6 - LRB101 06713 RPS 51740 b
80% 90% of the total actuarial liabilities of the pension fund
by the end of municipal fiscal year 2050 2040, as annually
updated and determined by an enrolled actuary employed by the
Illinois Department of Insurance or by an enrolled actuary
retained by the pension fund or the municipality. In making
these determinations, the required minimum employer
contribution shall be calculated each year as a level
percentage of payroll over the years remaining up to and
including fiscal year 2050 2040 and shall be determined under
the projected unit credit actuarial cost method. The amount to
be applied towards the amortization of the unfunded accrued
liability in any year shall not be less than the annual amount
required to amortize the unfunded accrued liability, including
interest, as a level percentage of payroll over the number of
years remaining in the 40 year amortization period.
(a-5) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the pension
fund's assets for fiscal years after March 30, 2011, any
actuarial gains or losses from investment return incurred
in a fiscal year shall be recognized in equal annual

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

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

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

HB1572 - 10 - LRB101 06713 RPS 51740 b
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 99-8, eff. 7-9-15.)
Section 90. The State Mandates Act is amended by adding
Section 8.43 as follows:
(30 ILCS 805/8.43 new)
Sec. 8.43. 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 101st General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.