Bill Text: IL HB2452 | 2019-2020 | 101st General Assembly | Introduced
Bill Title: Amends the State Employee, State Universities, and Downstate Teacher Articles of the Illinois Pension Code. Provides that the System shall offer an accelerated pension benefit payment option for eligible Tier 1 members. Provides that the accelerated pension benefit payment is a lump sum payment equal to 50% of the difference of the net present value of the Tier 1 member's retirement annuity, including the value of the annual increases to that retirement annuity, and the amount of the old-age payments under Social Security, including the value of the annual increases, that he or she would have been entitled to, as determined by the Board, if he or she had been eligible for Social Security coverage with respect to his or her position. Provides that a person who elects the accelerated pension benefit payment option shall have his or her retirement annuity reduced to the amount of the old age payments under Social Security that he or she would have been entitled to, as determined by the Board, had he or she been participating in Social Security and any increase in retirement annuity shall be the annual unadjusted percentage increase (but not less than zero) in the consumer price index-w for the 12 months ending with the September preceding each November 1 of the originally granted retirement annuity. Contains provisions concerning return to active service; rulemaking; qualified plan status; and new benefit increases. Makes conforming changes. Effective immediately.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2019-04-12 - Rule 19(a) / Re-referred to Rules Committee [HB2452 Detail]
Download: Illinois-2019-HB2452-Introduced.html
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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by adding | ||||||||||||||||||||||||
5 | Sections 14-147.7, 15-185.7, and 16-190.7 and by changing | ||||||||||||||||||||||||
6 | Section 14-147.5, 14-147.6, 14-152.1, 15-185.5, 15-185.6, | ||||||||||||||||||||||||
7 | 15-198, 16-190.5, 16-190.6, and 16-203 as follows:
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8 | (40 ILCS 5/14-147.5) | ||||||||||||||||||||||||
9 | Sec. 14-147.5. Accelerated pension benefit payment in lieu | ||||||||||||||||||||||||
10 | of any pension benefit. | ||||||||||||||||||||||||
11 | (a) As used in this Section: | ||||||||||||||||||||||||
12 | "Eligible person" means a person who: | ||||||||||||||||||||||||
13 | (1) has terminated service; | ||||||||||||||||||||||||
14 | (2) has accrued sufficient service credit to be | ||||||||||||||||||||||||
15 | eligible to receive a retirement annuity under this | ||||||||||||||||||||||||
16 | Article; | ||||||||||||||||||||||||
17 | (3) has not received any retirement annuity under this | ||||||||||||||||||||||||
18 | Article; and | ||||||||||||||||||||||||
19 | (4) has not made the election under Section 14-147.6 or | ||||||||||||||||||||||||
20 | 14-147.7 . | ||||||||||||||||||||||||
21 | "Pension benefit" means the benefits under this Article, or | ||||||||||||||||||||||||
22 | Article 1 as it relates to those benefits, including any | ||||||||||||||||||||||||
23 | anticipated annual increases, that an eligible person is |
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1 | entitled to upon attainment of the applicable retirement age. | ||||||
2 | "Pension benefit" also includes applicable survivor's or | ||||||
3 | disability benefits. | ||||||
4 | (b) As soon as practical after the effective date of this | ||||||
5 | amendatory Act of the 100th General Assembly, the System shall | ||||||
6 | calculate, using actuarial tables and other assumptions | ||||||
7 | adopted by the Board, the present value of pension benefits for | ||||||
8 | each eligible person who requests that information and shall | ||||||
9 | offer each eligible person the opportunity to irrevocably elect | ||||||
10 | to receive an amount determined by the System to be equal to | ||||||
11 | 60% of the present value of his or her pension benefits in lieu | ||||||
12 | of receiving any pension benefit. The offer shall specify the | ||||||
13 | dollar amount that the eligible person will receive if he or | ||||||
14 | she so elects and shall expire when a subsequent offer is made | ||||||
15 | to an eligible person. An eligible person is limited to one | ||||||
16 | calculation and offer per calendar year. The System shall make | ||||||
17 | a good faith effort to contact every eligible person to notify | ||||||
18 | him or her of the election. | ||||||
19 | Until June 30, 2021, an eligible person may irrevocably | ||||||
20 | elect to receive an accelerated pension benefit payment in the | ||||||
21 | amount that the System offers under this subsection in lieu of | ||||||
22 | receiving any pension benefit. A person who elects to receive | ||||||
23 | an accelerated pension benefit payment under this Section may | ||||||
24 | not elect to proceed under the Retirement Systems Reciprocal | ||||||
25 | Act with respect to service under this Article. | ||||||
26 | (c) A person's creditable service under this Article shall |
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1 | be terminated upon the person's receipt of an accelerated | ||||||
2 | pension benefit payment under this Section, and no other | ||||||
3 | benefit shall be paid under this Article based on the | ||||||
4 | terminated creditable service, including any retirement, | ||||||
5 | survivor, or other benefit; except that to the extent that | ||||||
6 | participation, benefits, or premiums under the State Employees | ||||||
7 | Group Insurance Act of 1971 are based on the amount of service | ||||||
8 | credit, the terminated service credit shall be used for that | ||||||
9 | purpose. | ||||||
10 | (d) If a person who has received an accelerated pension | ||||||
11 | benefit payment under this Section returns to active service | ||||||
12 | under this Article, then: | ||||||
13 | (1) Any benefits under the System earned as a result of | ||||||
14 | that return to active service shall be based solely on the | ||||||
15 | person's creditable service arising from the return to | ||||||
16 | active service. | ||||||
17 | (2) The accelerated pension benefit payment may not be | ||||||
18 | repaid to the System, and the terminated creditable service | ||||||
19 | may not under any circumstances be reinstated. | ||||||
20 | (e) As a condition of receiving an accelerated pension | ||||||
21 | benefit payment, the accelerated pension benefit payment must | ||||||
22 | be transferred into a tax qualified retirement plan or account. | ||||||
23 | The accelerated pension benefit payment under this Section may | ||||||
24 | be subject to withholding or payment of applicable taxes, but | ||||||
25 | to the extent permitted by federal law, a person who receives | ||||||
26 | an accelerated pension benefit payment under this Section must |
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1 | direct the System to pay all of that payment as a rollover into | ||||||
2 | another retirement plan or account qualified under the Internal | ||||||
3 | Revenue Code of 1986, as amended. | ||||||
4 | (f) Upon receipt of a member's irrevocable election to | ||||||
5 | receive an accelerated pension benefit payment under this | ||||||
6 | Section, the System shall submit a voucher to the Comptroller | ||||||
7 | for payment of the member's accelerated pension benefit | ||||||
8 | payment. The Comptroller shall transfer the amount of the | ||||||
9 | voucher from the State Pension Obligation
Acceleration Bond | ||||||
10 | Fund to the System, and the System shall transfer the amount | ||||||
11 | into the member's eligible retirement plan or qualified | ||||||
12 | account. | ||||||
13 | (g) The Board shall adopt any rules, including emergency | ||||||
14 | rules, necessary to implement this Section. | ||||||
15 | (h) No provision of this Section shall be interpreted in a | ||||||
16 | way that would cause the applicable System to cease to be a | ||||||
17 | qualified plan under the Internal Revenue Code of 1986.
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18 | (Source: P.A. 100-587, eff. 6-4-18.)
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19 | (40 ILCS 5/14-147.6) | ||||||
20 | Sec. 14-147.6. Accelerated pension benefit payment for a | ||||||
21 | reduction in annual retirement annuity and survivor's annuity | ||||||
22 | increases. | ||||||
23 | (a) As used in this Section: | ||||||
24 | "Accelerated pension benefit payment" means a lump sum | ||||||
25 | payment equal to 70% of the difference of the present value of |
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1 | the automatic annual increases to a Tier 1 member's retirement | ||||||
2 | annuity and survivor's annuity using the formula applicable to | ||||||
3 | the Tier 1 member and the present value of the automatic annual | ||||||
4 | increases to the Tier 1 member's retirement annuity using the | ||||||
5 | formula provided under subsection (b-5) and survivor's annuity | ||||||
6 | using the formula provided under subsection (b-6). | ||||||
7 | "Eligible person" means a person who: | ||||||
8 | (1) is a Tier 1 member; | ||||||
9 | (2) has submitted an application for a retirement | ||||||
10 | annuity under this Article; | ||||||
11 | (3) meets the age and service requirements for | ||||||
12 | receiving a retirement annuity under this Article; | ||||||
13 | (4) has not received any retirement annuity under this | ||||||
14 | Article; and | ||||||
15 | (5) has not made the election under Section 14-147.5 or | ||||||
16 | 14-147.7 . | ||||||
17 | (b) As soon as practical after the effective date of this | ||||||
18 | amendatory Act of the 100th General Assembly and until June 30, | ||||||
19 | 2021, the System shall implement an accelerated pension benefit | ||||||
20 | payment option for eligible persons. Upon the request of an | ||||||
21 | eligible person, the System shall calculate, using actuarial | ||||||
22 | tables and other assumptions adopted by the Board, an | ||||||
23 | accelerated pension benefit payment amount and shall offer that | ||||||
24 | eligible person the opportunity to irrevocably elect to have | ||||||
25 | his or her automatic annual increases in retirement annuity | ||||||
26 | calculated in accordance with the formula provided under |
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1 | subsection (b-5) and any increases in survivor's annuity | ||||||
2 | payable to his or her survivor's annuity beneficiary calculated | ||||||
3 | in accordance with the formula provided under subsection (b-6) | ||||||
4 | in exchange for the accelerated pension benefit payment. The | ||||||
5 | election under this subsection must be made before the eligible | ||||||
6 | person receives the first payment of a retirement annuity | ||||||
7 | otherwise payable under this Article. | ||||||
8 | (b-5) Notwithstanding any other provision of law, the | ||||||
9 | retirement annuity of a person who made the election under | ||||||
10 | subsection (b) shall be subject to annual increases on the | ||||||
11 | January 1 occurring either on or after the attainment of age 67 | ||||||
12 | or the first anniversary of the annuity start date, whichever | ||||||
13 | is later. Each annual increase shall be calculated at 1.5% of | ||||||
14 | the originally granted retirement annuity. | ||||||
15 | (b-6) Notwithstanding any other provision of law, a | ||||||
16 | survivor's annuity payable to a survivor's annuity beneficiary | ||||||
17 | of a person who made the election under subsection (b) shall be | ||||||
18 | subject to annual increases on the January 1 occurring on or | ||||||
19 | after the first anniversary of the commencement of the annuity. | ||||||
20 | Each annual increase shall be calculated at 1.5% of the | ||||||
21 | originally granted survivor's annuity. | ||||||
22 | (c) If a person who has received an accelerated pension | ||||||
23 | benefit payment returns to active service under this Article, | ||||||
24 | then: | ||||||
25 | (1) the calculation of any future automatic annual | ||||||
26 | increase in retirement annuity shall be calculated in |
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1 | accordance with the formula provided under subsection | ||||||
2 | (b-5); and | ||||||
3 | (2) the accelerated pension benefit payment may not be | ||||||
4 | repaid to the System. | ||||||
5 | (d) As a condition of receiving an accelerated pension | ||||||
6 | benefit payment, the accelerated pension benefit payment must | ||||||
7 | be transferred into a tax qualified retirement plan or account. | ||||||
8 | The accelerated pension benefit payment under this Section may | ||||||
9 | be subject to withholding or payment of applicable taxes, but | ||||||
10 | to the extent permitted by federal law, a person who receives | ||||||
11 | an accelerated pension benefit payment under this Section must | ||||||
12 | direct the System to pay all of that payment as a rollover into | ||||||
13 | another retirement plan or account qualified under the Internal | ||||||
14 | Revenue Code of 1986, as amended. | ||||||
15 | (d-5) Upon receipt of a member's irrevocable election to | ||||||
16 | receive an accelerated pension benefit payment under this | ||||||
17 | Section, the System shall submit a voucher to the Comptroller | ||||||
18 | for payment of the member's accelerated pension benefit | ||||||
19 | payment. The Comptroller shall transfer the amount of the | ||||||
20 | voucher to the System, and the System shall transfer the amount | ||||||
21 | into a member's eligible retirement plan or qualified account. | ||||||
22 | (e) The Board shall adopt any rules, including emergency | ||||||
23 | rules, necessary to implement this Section. | ||||||
24 | (f) No provision of this Section shall be interpreted in a | ||||||
25 | way that would cause the applicable System to cease to be a | ||||||
26 | qualified plan under the Internal Revenue Code of 1986.
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1 | (Source: P.A. 100-587, eff. 6-4-18.)
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2 | (40 ILCS 5/14-147.7 new) | ||||||
3 | Sec. 14-147.7. Accelerated pension benefit payment for a | ||||||
4 | reduction in retirement annuity. | ||||||
5 | (a) As used in this Section: | ||||||
6 | "Accelerated pension benefit payment" means a lump sum | ||||||
7 | payment equal to 50% of the difference of the net present value | ||||||
8 | of the Tier 1 member's retirement annuity, including the value | ||||||
9 | of the annual increases to that retirement annuity, and the | ||||||
10 | amount of the old-age insurance payments under the federal | ||||||
11 | Old-Age, Survivors, and Disability Insurance program | ||||||
12 | administered by the Social Security Administration, including | ||||||
13 | the value of the annual increases under subsection (d), that he | ||||||
14 | or she would have been entitled to, as determined by the Board, | ||||||
15 | if he or she had been eligible for Social Security coverage | ||||||
16 | with respect to his or her position. | ||||||
17 | "Eligible person" means a person who: | ||||||
18 | (1) is a Tier 1 member; | ||||||
19 | (2) is a noncovered employee; | ||||||
20 | (3) does not have a Qualified Illinois Domestic | ||||||
21 | Relations Order in effect against him or her; | ||||||
22 | (4) has submitted an application for a retirement | ||||||
23 | annuity under this Article; | ||||||
24 | (5) meets the age and service requirements for
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25 | receiving a retirement annuity under this Article; |
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1 | (6) has not received any retirement annuity under
this | ||||||
2 | Article; and | ||||||
3 | (7) has not made the election under Section 14-147.5 or | ||||||
4 | 14-147.6. | ||||||
5 | "Implementation date" means the earliest date upon which | ||||||
6 | the Board authorizes eligible persons to begin irrevocably | ||||||
7 | electing the accelerated pension benefit payment option under | ||||||
8 | this Section. The Board shall endeavor to make such | ||||||
9 | participation available as soon as possible after the effective | ||||||
10 | date of this amendatory Act of the 101st General Assembly and | ||||||
11 | shall establish an implementation date by Board resolution. | ||||||
12 | (b) Beginning on the implementation date, the System shall | ||||||
13 | implement an accelerated pension benefit payment option for | ||||||
14 | eligible persons. Upon the request of an eligible person, the | ||||||
15 | System shall calculate, using actuarial tables and other | ||||||
16 | assumptions adopted by the Board, an accelerated pension | ||||||
17 | benefit payment amount and shall offer that eligible person the | ||||||
18 | opportunity to irrevocably elect to have his or her retirement | ||||||
19 | annuity reduced in accordance with the formula provided under | ||||||
20 | subsection (c) and his or her automatic annual increases in | ||||||
21 | retirement annuity calculated in accordance with the formula | ||||||
22 | provided under subsection (d) in exchange for the accelerated | ||||||
23 | pension benefit payment. In determining the amount of the | ||||||
24 | accelerated pension benefit payment, the System may use any | ||||||
25 | necessary assumptions about what the amounts of the old-age | ||||||
26 | insurance payments under the federal Old-Age, Survivors, and |
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1 | Disability Insurance program would be for that eligible person. | ||||||
2 | The election under this subsection must be made before the | ||||||
3 | eligible person receives the first payment of a retirement | ||||||
4 | annuity otherwise payable under this Article. | ||||||
5 | (c) Notwithstanding any other provision of law, the | ||||||
6 | retirement annuity of a person who made the election under | ||||||
7 | subsection (b) shall be equal to the amount of the old-age | ||||||
8 | insurance payment under the federal Old-Age, Survivors, and | ||||||
9 | Disability Insurance program that he or she would have been | ||||||
10 | entitled to, as determined by the Board, had he or she been | ||||||
11 | participating in Social Security with respect to his or her | ||||||
12 | employment under this Article. | ||||||
13 | (d) Notwithstanding any other provision of law, the | ||||||
14 | retirement annuity of a person who made the election under | ||||||
15 | subsection (b) shall be subject to annual increases on the | ||||||
16 | January 1 occurring either on or after the attainment of age 67 | ||||||
17 | or the first anniversary of the annuity start date, whichever | ||||||
18 | is later. Each annual increase shall be the annual unadjusted | ||||||
19 | percentage increase (but not less than zero) in the consumer | ||||||
20 | price index-w for the 12 months ending with the September | ||||||
21 | preceding each November 1 of the originally granted retirement | ||||||
22 | annuity. If the annual unadjusted percentage change in the | ||||||
23 | consumer price index-w for the 12 months ending with the | ||||||
24 | September preceding each November 1 is zero or there is a | ||||||
25 | decrease, then the annuity shall not be increased. | ||||||
26 | For the purposes of this subsection, "consumer price |
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1 | index-w" means the index published by the Bureau of Labor | ||||||
2 | Statistics of the United States Department of Labor that | ||||||
3 | measures the average change in prices of goods and services | ||||||
4 | purchased by Urban Wage Earners and Clerical Workers, United | ||||||
5 | States city average, all items, 1982-84 = 100. The new amount | ||||||
6 | resulting from each annual adjustment shall be determined by | ||||||
7 | the Public Pension Division of the Department of Insurance and | ||||||
8 | made available to the boards of the retirement systems and | ||||||
9 | pension funds by November 1 of each year. | ||||||
10 | (e) If a person who has received an accelerated pension | ||||||
11 | benefit payment returns to active service under this Article, | ||||||
12 | then any change in the amount of retirement annuity shall be | ||||||
13 | calculated in accordance with subsection (c) and any future | ||||||
14 | automatic annual increase in retirement annuity shall be | ||||||
15 | calculated in accordance with the formula provided under | ||||||
16 | subsection (d). | ||||||
17 | (f) The accelerated pension benefit payment may not be | ||||||
18 | repaid to the System. | ||||||
19 | (g) As a condition of receiving an accelerated pension | ||||||
20 | benefit payment, the accelerated pension benefit payment must | ||||||
21 | be transferred into a tax qualified retirement plan or account. | ||||||
22 | The accelerated pension benefit payment under this Section may | ||||||
23 | be subject to withholding or payment of applicable taxes, but | ||||||
24 | to the extent permitted by federal law, a person who receives | ||||||
25 | an accelerated pension benefit payment under this Section must | ||||||
26 | direct the System to pay all of that payment as a rollover into |
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1 | another retirement plan or account qualified under the Internal | ||||||
2 | Revenue Code of 1986, as amended. | ||||||
3 | (h) Upon receipt of a member's irrevocable election to | ||||||
4 | receive an accelerated pension benefit payment under this | ||||||
5 | Section, the System shall submit a voucher to the Comptroller | ||||||
6 | for payment of the member's accelerated pension benefit | ||||||
7 | payment. The Comptroller shall transfer the amount of the | ||||||
8 | voucher to the System, and the System shall transfer the amount | ||||||
9 | into a member's eligible retirement plan or qualified account. | ||||||
10 | (i) The Board shall adopt any rules, including emergency | ||||||
11 | rules, necessary to implement this Section. | ||||||
12 | (j) No provision of this Section shall be interpreted in a | ||||||
13 | way that would cause the System to cease to be a qualified plan | ||||||
14 | under the Internal Revenue Code of 1986.
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15 | (40 ILCS 5/14-152.1) | ||||||
16 | Sec. 14-152.1. Application and expiration of new benefit | ||||||
17 | increases. | ||||||
18 | (a) As used in this Section, "new benefit increase" means | ||||||
19 | an increase in the amount of any benefit provided under this | ||||||
20 | Article, or an expansion of the conditions of eligibility for | ||||||
21 | any benefit under this Article, that results from an amendment | ||||||
22 | to this Code that takes effect after June 1, 2005 (the | ||||||
23 | effective date of Public Act 94-4). "New benefit increase", | ||||||
24 | however, does not include any benefit increase resulting from | ||||||
25 | the changes made to Article 1 or this Article by Public Act |
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1 | 96-37, Public Act 100-23, Public Act 100-587, Public Act | ||||||
2 | 100-611, or this amendatory Act of the 101st General Assembly | ||||||
3 | or this amendatory Act of the 100th General Assembly .
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4 | (b) Notwithstanding any other provision of this Code or any | ||||||
5 | subsequent amendment to this Code, every new benefit increase | ||||||
6 | is subject to this Section and shall be deemed to be granted | ||||||
7 | only in conformance with and contingent upon compliance with | ||||||
8 | the provisions of this Section.
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9 | (c) The Public Act enacting a new benefit increase must | ||||||
10 | identify and provide for payment to the System of additional | ||||||
11 | funding at least sufficient to fund the resulting annual | ||||||
12 | increase in cost to the System as it accrues. | ||||||
13 | Every new benefit increase is contingent upon the General | ||||||
14 | Assembly providing the additional funding required under this | ||||||
15 | subsection. The Commission on Government Forecasting and | ||||||
16 | Accountability shall analyze whether adequate additional | ||||||
17 | funding has been provided for the new benefit increase and | ||||||
18 | shall report its analysis to the Public Pension Division of the | ||||||
19 | Department of Insurance. A new benefit increase created by a | ||||||
20 | Public Act that does not include the additional funding | ||||||
21 | required under this subsection is null and void. If the Public | ||||||
22 | Pension Division determines that the additional funding | ||||||
23 | provided for a new benefit increase under this subsection is or | ||||||
24 | has become inadequate, it may so certify to the Governor and | ||||||
25 | the State Comptroller and, in the absence of corrective action | ||||||
26 | by the General Assembly, the new benefit increase shall expire |
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1 | at the end of the fiscal year in which the certification is | ||||||
2 | made.
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3 | (d) Every new benefit increase shall expire 5 years after | ||||||
4 | its effective date or on such earlier date as may be specified | ||||||
5 | in the language enacting the new benefit increase or provided | ||||||
6 | under subsection (c). This does not prevent the General | ||||||
7 | Assembly from extending or re-creating a new benefit increase | ||||||
8 | by law. | ||||||
9 | (e) Except as otherwise provided in the language creating | ||||||
10 | the new benefit increase, a new benefit increase that expires | ||||||
11 | under this Section continues to apply to persons who applied | ||||||
12 | and qualified for the affected benefit while the new benefit | ||||||
13 | increase was in effect and to the affected beneficiaries and | ||||||
14 | alternate payees of such persons, but does not apply to any | ||||||
15 | other person, including without limitation a person who | ||||||
16 | continues in service after the expiration date and did not | ||||||
17 | apply and qualify for the affected benefit while the new | ||||||
18 | benefit increase was in effect.
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19 | (Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; | ||||||
20 | 100-611, eff. 7-20-18; revised 7-25-18.)
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21 | (40 ILCS 5/15-185.5) | ||||||
22 | Sec. 15-185.5. Accelerated pension benefit payment in lieu | ||||||
23 | of any pension benefit. | ||||||
24 | (a) As used in this Section: | ||||||
25 | "Eligible person" means a person who: |
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1 | (1) has terminated service; | ||||||
2 | (2) has accrued sufficient service credit to be | ||||||
3 | eligible to receive a retirement annuity under this | ||||||
4 | Article; | ||||||
5 | (3) has not received any retirement annuity under this | ||||||
6 | Article; | ||||||
7 | (4) has not made the election under Section 15-185.6 or | ||||||
8 | 15-185.7 ; and | ||||||
9 | (5) is not a participant in the self-managed plan under | ||||||
10 | Section 15-158.2. | ||||||
11 | "Implementation date" means the earliest date upon which | ||||||
12 | the Board authorizes eligible persons to begin irrevocably | ||||||
13 | electing the accelerated pension benefit payment option under | ||||||
14 | this Section. The Board shall endeavor to make such | ||||||
15 | participation available as soon as possible after the effective | ||||||
16 | date of this amendatory Act of the 100th General Assembly and | ||||||
17 | shall establish an implementation date by Board resolution. | ||||||
18 | "Pension benefit" means the benefits under this Article, or | ||||||
19 | Article 1 as it relates to those benefits, including any | ||||||
20 | anticipated annual increases, that an eligible person is | ||||||
21 | entitled to upon attainment of the applicable retirement age. | ||||||
22 | "Pension benefit" also includes applicable survivors benefits, | ||||||
23 | disability benefits, or disability retirement annuity | ||||||
24 | benefits. | ||||||
25 | (b) Beginning on the implementation date, the System shall | ||||||
26 | offer each eligible person the opportunity to irrevocably elect |
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1 | to receive an amount determined by the System to be equal to | ||||||
2 | 60% of the present value of his or her pension benefits in lieu | ||||||
3 | of receiving any pension benefit. The System shall calculate, | ||||||
4 | using actuarial tables and other assumptions adopted by the | ||||||
5 | Board, the present value of pension benefits for each eligible | ||||||
6 | person upon his or her request in writing to the System. The | ||||||
7 | System shall not perform more than one calculation per eligible | ||||||
8 | member in a State fiscal year. The offer shall specify the | ||||||
9 | dollar amount that the eligible person will receive if he or | ||||||
10 | she so elects and shall expire when a subsequent offer is made | ||||||
11 | to an eligible person. The System shall make a good faith | ||||||
12 | effort to contact every eligible person to notify him or her of | ||||||
13 | the election. | ||||||
14 | Beginning on the implementation date and until June 30, | ||||||
15 | 2021, an eligible person may irrevocably elect to receive an | ||||||
16 | accelerated pension benefit payment in the amount that the | ||||||
17 | System offers under this subsection in lieu of receiving any | ||||||
18 | pension benefit. A person who elects to receive an accelerated | ||||||
19 | pension benefit payment under this Section may not elect to | ||||||
20 | proceed under the Retirement Systems Reciprocal Act with | ||||||
21 | respect to service under this Article. | ||||||
22 | (c) Upon payment of an accelerated pension benefit payment | ||||||
23 | under this Section, the person forfeits all accrued rights and | ||||||
24 | credits in the System and no other benefit shall be paid under | ||||||
25 | this Article based on those forfeited rights and credits, | ||||||
26 | including any retirement, survivor, or other benefit; except |
| |||||||
| |||||||
1 | that to the extent that participation, benefits, or premiums | ||||||
2 | under the State Employees Group Insurance Act of 1971 are based | ||||||
3 | on the amount of service credit, the terminated service credit | ||||||
4 | shall be used for that purpose. | ||||||
5 | (d) If a person who has received an accelerated pension | ||||||
6 | benefit payment under this Section returns to participation | ||||||
7 | under this Article, any benefits under the System earned as a | ||||||
8 | result of that return to participation shall be based solely on | ||||||
9 | the person's credits and creditable service arising from the | ||||||
10 | return to participation. Upon return to participation, the | ||||||
11 | person shall be considered a new employee subject to all the | ||||||
12 | qualifying conditions for participation and eligibility for | ||||||
13 | benefits applicable to new employees. | ||||||
14 | (d-5) The accelerated pension benefit payment may not be | ||||||
15 | repaid to the System, and the forfeited rights and credits may | ||||||
16 | not under any circumstances be reinstated. | ||||||
17 | (e) As a condition of receiving an accelerated pension | ||||||
18 | benefit payment, the accelerated pension benefit payment must | ||||||
19 | be deposited into a tax qualified retirement plan or account | ||||||
20 | identified by the eligible person at the time of the election. | ||||||
21 | The accelerated pension benefit payment under this Section may | ||||||
22 | be subject to withholding or payment of applicable taxes, but | ||||||
23 | to the extent permitted by federal law, a person who receives | ||||||
24 | an accelerated pension benefit payment under this Section must | ||||||
25 | direct the System to pay all of that payment as a rollover into | ||||||
26 | another retirement plan or account qualified under the Internal |
| |||||||
| |||||||
1 | Revenue Code of 1986, as amended. | ||||||
2 | (f) The System shall submit vouchers to the State | ||||||
3 | Comptroller for the payment of accelerated pension benefit | ||||||
4 | payments under this Section. The State Comptroller shall pay | ||||||
5 | the amounts of the vouchers from the State Pension Obligation | ||||||
6 | Acceleration Bond Fund to the System, and the System shall | ||||||
7 | deposit the amounts into the applicable tax qualified plans or | ||||||
8 | accounts. | ||||||
9 | (g) The Board shall adopt any rules, including emergency | ||||||
10 | rules, necessary to implement this Section. | ||||||
11 | (h) No provision of this Section shall be interpreted in a | ||||||
12 | way that would cause the System to cease to be a qualified plan | ||||||
13 | under the Internal Revenue Code of 1986.
| ||||||
14 | (Source: P.A. 100-587, eff. 6-4-18.)
| ||||||
15 | (40 ILCS 5/15-185.6) | ||||||
16 | Sec. 15-185.6. Accelerated pension benefit payment for a | ||||||
17 | reduction in an annual increase to a retirement annuity and an | ||||||
18 | annuity benefit payable as a result of death. | ||||||
19 | (a) As used in this Section: | ||||||
20 | "Accelerated pension benefit payment" means a lump sum | ||||||
21 | payment equal to 70% of the difference of: (i) the present | ||||||
22 | value of the automatic annual increases to a Tier 1 member's | ||||||
23 | retirement annuity, including any increases to any annuity | ||||||
24 | benefit payable as a result of his or her death, using the | ||||||
25 | formula applicable to the Tier 1 member; and (ii) the present |
| |||||||
| |||||||
1 | value of the automatic annual increases to the Tier 1 member's | ||||||
2 | retirement annuity, including any increases to any annuity | ||||||
3 | benefit payable as a result of his or her death, using the | ||||||
4 | formula provided under subsection (b-5). | ||||||
5 | "Eligible person" means a person who: | ||||||
6 | (1) is a Tier 1 member; | ||||||
7 | (2) has submitted an application for a retirement | ||||||
8 | annuity under this Article; | ||||||
9 | (3) meets the age and service requirements for | ||||||
10 | receiving a retirement annuity under this Article; | ||||||
11 | (4) has not received any retirement annuity under this | ||||||
12 | Article; | ||||||
13 | (5) has not made the election under Section 15-185.5 or | ||||||
14 | 15-185.7 ; and | ||||||
15 | (6) is not a participant in the self-managed plan under | ||||||
16 | Section 15-158.2. | ||||||
17 | "Implementation date" means the earliest date upon which | ||||||
18 | the Board authorizes eligible persons to begin irrevocably | ||||||
19 | electing the accelerated pension benefit payment option under | ||||||
20 | this Section. The Board shall endeavor to make such | ||||||
21 | participation available as soon as possible after the effective | ||||||
22 | date of this amendatory Act of the 100th General Assembly and | ||||||
23 | shall establish an implementation date by Board resolution. | ||||||
24 | (b) Beginning on the implementation date and until June 30, | ||||||
25 | 2021, the System shall implement an accelerated pension benefit | ||||||
26 | payment option for eligible persons. The System shall |
| |||||||
| |||||||
1 | calculate, using actuarial tables and other assumptions | ||||||
2 | adopted by the Board, an accelerated pension benefit payment | ||||||
3 | amount for an eligible person upon his or her request in | ||||||
4 | writing to the System and shall offer that eligible person the | ||||||
5 | opportunity to irrevocably elect to have his or her automatic | ||||||
6 | annual increases in retirement annuity and any annuity benefit | ||||||
7 | payable as a result of his or her death calculated in | ||||||
8 | accordance with the formula provided in subsection (b-5) in | ||||||
9 | exchange for the accelerated pension benefit payment. The | ||||||
10 | System shall not perform more than one calculation under this | ||||||
11 | Section per eligible person in a State fiscal year. The | ||||||
12 | election under this subsection must be made before any | ||||||
13 | retirement annuity is paid to the eligible person, and the | ||||||
14 | eligible survivor, spouse, or contingent annuitant, as | ||||||
15 | applicable, must consent to the election under this subsection. | ||||||
16 | (b-5) Notwithstanding any other provision of law, the | ||||||
17 | retirement annuity of a person who made the election under | ||||||
18 | subsection (b) shall be increased annually beginning on the | ||||||
19 | January 1 occurring either on or after the attainment of age 67 | ||||||
20 | or the first anniversary of the annuity start date, whichever | ||||||
21 | is later, and any annuity benefit payable as a result of his or | ||||||
22 | her death shall be increased annually beginning on: (1) the | ||||||
23 | January 1 occurring on or after the commencement of the annuity | ||||||
24 | if the deceased Tier 1 member died while receiving a retirement | ||||||
25 | annuity; or (2) the January 1 occurring after the first | ||||||
26 | anniversary of the commencement of the benefit. Each annual |
| |||||||
| |||||||
1 | increase shall be calculated at 1.5% of the originally granted | ||||||
2 | retirement annuity or annuity benefit payable as a result of | ||||||
3 | the Tier 1 member's death. | ||||||
4 | (c) If an annuitant who has received an accelerated pension | ||||||
5 | benefit payment returns to participation under this Article, | ||||||
6 | the calculation of any future automatic annual increase in | ||||||
7 | retirement annuity under subsection (c) of Section 15-139 shall | ||||||
8 | be calculated in accordance with the formula provided in | ||||||
9 | subsection (b-5). | ||||||
10 | (c-5) The accelerated pension benefit payment may not be | ||||||
11 | repaid to the System. | ||||||
12 | (d) As a condition of receiving an accelerated pension | ||||||
13 | benefit payment, the accelerated pension benefit payment must | ||||||
14 | be deposited into a tax qualified retirement plan or account | ||||||
15 | identified by the eligible person at the time of election. The | ||||||
16 | accelerated pension benefit payment under this Section may be | ||||||
17 | subject to withholding or payment of applicable taxes, but to | ||||||
18 | the extent permitted by federal law, a person who receives an | ||||||
19 | accelerated pension benefit payment under this Section must | ||||||
20 | direct the System to pay all of that payment as a rollover into | ||||||
21 | another retirement plan or account qualified under the Internal | ||||||
22 | Revenue Code of 1986, as amended. | ||||||
23 | (d-5) The System shall submit vouchers to the State | ||||||
24 | Comptroller for the payment of accelerated pension benefit | ||||||
25 | payments under this Section. The State Comptroller shall pay | ||||||
26 | the amounts of the vouchers from the State Pension Obligation |
| |||||||
| |||||||
1 | Acceleration Bond Fund to the System, and the System shall | ||||||
2 | deposit the amounts into the applicable tax qualified plans or | ||||||
3 | accounts. | ||||||
4 | (e) The Board shall adopt any rules, including emergency | ||||||
5 | rules, necessary to implement this Section. | ||||||
6 | (f) No provision of this Section shall be interpreted in a | ||||||
7 | way that would cause the System to cease to be a qualified plan | ||||||
8 | under the Internal Revenue Code of 1986.
| ||||||
9 | (Source: P.A. 100-587, eff. 6-4-18.)
| ||||||
10 | (40 ILCS 5/15-185.7 new) | ||||||
11 | Sec. 15-185.7. Accelerated pension benefit payment for a | ||||||
12 | reduction in retirement annuity. | ||||||
13 | (a) As used in this Section: | ||||||
14 | "Accelerated pension benefit payment" means a lump sum | ||||||
15 | payment equal to 50% of the difference of the net present value | ||||||
16 | of the Tier 1 member's retirement annuity, including the value | ||||||
17 | of the annual increases to that retirement annuity, and the | ||||||
18 | amount of the old-age insurance payments under the federal | ||||||
19 | Old-Age, Survivors, and Disability Insurance program | ||||||
20 | administered by the Social Security Administration, including | ||||||
21 | the value of the annual increases under subsection (d), that he | ||||||
22 | or she would have been entitled to, as determined by the Board, | ||||||
23 | if he or she had been eligible for Social Security coverage | ||||||
24 | with respect to his or her position. | ||||||
25 | "Eligible person" means a person who: |
| |||||||
| |||||||
1 | (1) is a Tier 1 member; | ||||||
2 | (2) has submitted an application for a retirement | ||||||
3 | annuity under this Article; | ||||||
4 | (3) does not have a Qualified Illinois Domestic | ||||||
5 | Relations Order in effect against him or her; | ||||||
6 | (4) meets the age and service requirements for
| ||||||
7 | receiving a retirement annuity under this Article; | ||||||
8 | (5) has not received any retirement annuity under
this | ||||||
9 | Article; | ||||||
10 | (6) has not made the election under Section 15-185.5 or | ||||||
11 | 15-185.6; | ||||||
12 | (7) is not a participant in the self-managed plan
under | ||||||
13 | Section 15-158.2. | ||||||
14 | "Implementation date" means the earliest date upon which | ||||||
15 | the Board authorizes eligible persons to begin irrevocably | ||||||
16 | electing the accelerated pension benefit payment option under | ||||||
17 | this Section. The Board shall endeavor to make such | ||||||
18 | participation available as soon as possible after the effective | ||||||
19 | date of this amendatory Act of the 101st General Assembly and | ||||||
20 | shall establish an implementation date by Board resolution. | ||||||
21 | (b) Beginning on the implementation date, the System shall | ||||||
22 | implement an accelerated pension benefit payment option for | ||||||
23 | eligible persons. The System shall calculate, using actuarial | ||||||
24 | tables and other assumptions adopted by the Board, an | ||||||
25 | accelerated pension benefit payment amount for an eligible | ||||||
26 | person upon his or her request in writing to the System and |
| |||||||
| |||||||
1 | shall offer that eligible person the opportunity to irrevocably | ||||||
2 | elect to have his or her retirement annuity reduced in | ||||||
3 | accordance with the formula provided under subsection (c) and | ||||||
4 | his or her automatic annual increases in retirement annuity | ||||||
5 | calculated in accordance with the formula provided under | ||||||
6 | subsection (d) in exchange for the accelerated pension benefit | ||||||
7 | payment. In determining the amount of the accelerated pension | ||||||
8 | benefit payment, the System may use any necessary assumptions | ||||||
9 | about what the amounts of the old-age insurance payments under | ||||||
10 | the federal Old-Age, Survivors, and Disability Insurance | ||||||
11 | program would be for that eligible person. The election under | ||||||
12 | this subsection must be made before any retirement annuity is | ||||||
13 | paid to the eligible person. | ||||||
14 | (c) Notwithstanding any other provision of law, the | ||||||
15 | retirement annuity of a person who made the election under | ||||||
16 | subsection (b) shall be equal to the amount of the old-age | ||||||
17 | insurance payment under the federal Old-Age, Survivors, and | ||||||
18 | Disability Insurance program that he or she would have been | ||||||
19 | entitled to, as determined by the Board, had he or she been | ||||||
20 | participating in Social Security with respect to his or her | ||||||
21 | employment under this Article. | ||||||
22 | (d) Notwithstanding any other provision of law, the | ||||||
23 | retirement annuity of a person who made the election under | ||||||
24 | subsection (b) shall be subject to annual increases on the | ||||||
25 | January 1 occurring either on or after the attainment of age 67 | ||||||
26 | or the first anniversary of the annuity start date, whichever |
| |||||||
| |||||||
1 | is later. Each annual increase shall be the annual unadjusted | ||||||
2 | percentage increase (but not less than zero) in the consumer | ||||||
3 | price index-w for the 12 months ending with the September | ||||||
4 | preceding each November 1 of the originally granted retirement | ||||||
5 | annuity. If the annual unadjusted percentage change in the | ||||||
6 | consumer price index-w for the 12 months ending with the | ||||||
7 | September preceding each November 1 is zero or there is a | ||||||
8 | decrease, then the annuity shall not be increased. | ||||||
9 | For the purposes of this subsection, "consumer price | ||||||
10 | index-w" means the index published by the Bureau of Labor | ||||||
11 | Statistics of the United States Department of Labor that | ||||||
12 | measures the average change in prices of goods and services | ||||||
13 | purchased by Urban Wage Earners and Clerical Workers, United | ||||||
14 | States city average, all items, 1982-84 = 100. The new amount | ||||||
15 | resulting from each annual adjustment shall be determined by | ||||||
16 | the Public Pension Division of the Department of Insurance and | ||||||
17 | made available to the boards of the retirement systems and | ||||||
18 | pension funds by November 1 of each year. | ||||||
19 | (e) If an annuitant who has received an accelerated pension | ||||||
20 | benefit payment returns to participation under this Article, | ||||||
21 | then any change in the amount of retirement annuity shall be | ||||||
22 | calculated in accordance with subsection (c) and the | ||||||
23 | calculation of any future automatic annual increase in | ||||||
24 | retirement annuity shall be calculated in accordance with the | ||||||
25 | formula provided in subsection (d). | ||||||
26 | (f) The accelerated pension benefit payment may not be |
| |||||||
| |||||||
1 | repaid to the System. | ||||||
2 | (g) As a condition of receiving an accelerated pension | ||||||
3 | benefit payment, the accelerated pension benefit payment must | ||||||
4 | be deposited into a tax qualified retirement plan or account | ||||||
5 | identified by the eligible person at the time of election. The | ||||||
6 | accelerated pension benefit payment under this Section may be | ||||||
7 | subject to withholding or payment of applicable taxes, but to | ||||||
8 | the extent permitted by federal law, a person who receives an | ||||||
9 | accelerated pension benefit payment under this Section must | ||||||
10 | direct the System to pay all of that payment as a rollover into | ||||||
11 | another retirement plan or account qualified under the Internal | ||||||
12 | Revenue Code of 1986, as amended. | ||||||
13 | (h) Upon receipt of a member's irrevocable election to | ||||||
14 | receive an accelerated pension benefit payment under this | ||||||
15 | Section, the System shall submit a voucher to the Comptroller | ||||||
16 | for payment of the member's accelerated pension benefit | ||||||
17 | payment. The Comptroller shall transfer the amount of the | ||||||
18 | voucher to the System, and the System shall transfer the amount | ||||||
19 | into a member's eligible retirement plan or qualified account. | ||||||
20 | (i) The Board shall adopt any rules, including emergency | ||||||
21 | rules, necessary to implement this Section. | ||||||
22 | (j) No provision of this Section shall be interpreted in a | ||||||
23 | way that would cause the System to cease to be a qualified plan | ||||||
24 | under the Internal Revenue Code of 1986.
| ||||||
25 | (40 ILCS 5/15-198)
|
| |||||||
| |||||||
1 | Sec. 15-198. Application and expiration of new benefit | ||||||
2 | increases. | ||||||
3 | (a) As used in this Section, "new benefit increase" means | ||||||
4 | an increase in the amount of any benefit provided under this | ||||||
5 | Article, or an expansion of the conditions of eligibility for | ||||||
6 | any benefit under this Article, that results from an amendment | ||||||
7 | to this Code that takes effect after the effective date of this | ||||||
8 | amendatory Act of the 94th General Assembly. "New benefit | ||||||
9 | increase", however, does not include any benefit increase | ||||||
10 | resulting from the changes made to Article 1 or this Article by | ||||||
11 | Public Act 100-23 , Public Act 100-587, Public Act 100-769, or | ||||||
12 | this amendatory Act of the 101st General Assembly or this | ||||||
13 | amendatory Act of the 100th General Assembly . | ||||||
14 | (b) Notwithstanding any other provision of this Code or any | ||||||
15 | subsequent amendment to this Code, every new benefit increase | ||||||
16 | is subject to this Section and shall be deemed to be granted | ||||||
17 | only in conformance with and contingent upon compliance with | ||||||
18 | the provisions of this Section.
| ||||||
19 | (c) The Public Act enacting a new benefit increase must | ||||||
20 | identify and provide for payment to the System of additional | ||||||
21 | funding at least sufficient to fund the resulting annual | ||||||
22 | increase in cost to the System as it accrues. | ||||||
23 | Every new benefit increase is contingent upon the General | ||||||
24 | Assembly providing the additional funding required under this | ||||||
25 | subsection. The Commission on Government Forecasting and | ||||||
26 | Accountability shall analyze whether adequate additional |
| |||||||
| |||||||
1 | funding has been provided for the new benefit increase and | ||||||
2 | shall report its analysis to the Public Pension Division of the | ||||||
3 | Department of Insurance. A new benefit increase created by a | ||||||
4 | Public Act that does not include the additional funding | ||||||
5 | required under this subsection is null and void. If the Public | ||||||
6 | Pension Division determines that the additional funding | ||||||
7 | provided for a new benefit increase under this subsection is or | ||||||
8 | has become inadequate, it may so certify to the Governor and | ||||||
9 | the State Comptroller and, in the absence of corrective action | ||||||
10 | by the General Assembly, the new benefit increase shall expire | ||||||
11 | at the end of the fiscal year in which the certification is | ||||||
12 | made.
| ||||||
13 | (d) Every new benefit increase shall expire 5 years after | ||||||
14 | its effective date or on such earlier date as may be specified | ||||||
15 | in the language enacting the new benefit increase or provided | ||||||
16 | under subsection (c). This does not prevent the General | ||||||
17 | Assembly from extending or re-creating a new benefit increase | ||||||
18 | by law. | ||||||
19 | (e) Except as otherwise provided in the language creating | ||||||
20 | the new benefit increase, a new benefit increase that expires | ||||||
21 | under this Section continues to apply to persons who applied | ||||||
22 | and qualified for the affected benefit while the new benefit | ||||||
23 | increase was in effect and to the affected beneficiaries and | ||||||
24 | alternate payees of such persons, but does not apply to any | ||||||
25 | other person, including without limitation a person who | ||||||
26 | continues in service after the expiration date and did not |
| |||||||
| |||||||
1 | apply and qualify for the affected benefit while the new | ||||||
2 | benefit increase was in effect.
| ||||||
3 | (Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; | ||||||
4 | 100-769, eff. 8-10-18; revised 9-26-18.)
| ||||||
5 | (40 ILCS 5/16-190.5) | ||||||
6 | Sec. 16-190.5. Accelerated pension benefit payment in lieu | ||||||
7 | of any pension benefit. | ||||||
8 | (a) As used in this Section: | ||||||
9 | "Eligible person" means a person who: | ||||||
10 | (1) has terminated service; | ||||||
11 | (2) has accrued sufficient service credit to be | ||||||
12 | eligible to receive a retirement annuity under this | ||||||
13 | Article; | ||||||
14 | (3) has not received any retirement annuity under this | ||||||
15 | Article; and | ||||||
16 | (4) has not made the election under Section 16-190.6 or | ||||||
17 | 16-190.7 . | ||||||
18 | "Pension benefit" means the benefits under this Article, or | ||||||
19 | Article 1 as it relates to those benefits, including any | ||||||
20 | anticipated annual increases, that an eligible person is | ||||||
21 | entitled to upon attainment of the applicable retirement age. | ||||||
22 | "Pension benefit" also includes applicable survivor's or | ||||||
23 | disability benefits. | ||||||
24 | (b) As soon as practical after the effective date of this | ||||||
25 | amendatory Act of the 100the General Assembly, the System shall |
| |||||||
| |||||||
1 | calculate, using actuarial tables and other assumptions | ||||||
2 | adopted by the Board, the present value of pension benefits for | ||||||
3 | each eligible person who requests that information and shall | ||||||
4 | offer each eligible person the opportunity to irrevocably elect | ||||||
5 | to receive an amount determined by the System to be equal to | ||||||
6 | 60% of the present value of his or her pension benefits in lieu | ||||||
7 | of receiving any pension benefit. The offer shall specify the | ||||||
8 | dollar amount that the eligible person will receive if he or | ||||||
9 | she so elects and shall expire when a subsequent offer is made | ||||||
10 | to an eligible person. The System shall make a good faith | ||||||
11 | effort to contact every eligible person to notify him or her of | ||||||
12 | the election. | ||||||
13 | Until June 30, 2021, an eligible person may irrevocably | ||||||
14 | elect to receive an accelerated pension benefit payment in the | ||||||
15 | amount that the System offers under this subsection in lieu of | ||||||
16 | receiving any pension benefit. A person who elects to receive | ||||||
17 | an accelerated pension benefit payment under this Section may | ||||||
18 | not elect to proceed under the Retirement Systems Reciprocal | ||||||
19 | Act with respect to service under this Article. | ||||||
20 | (c) A person's creditable service under this Article shall | ||||||
21 | be terminated upon the person's receipt of an accelerated | ||||||
22 | pension benefit payment under this Section, and no other | ||||||
23 | benefit shall be paid under this Article based on the | ||||||
24 | terminated creditable service, including any retirement, | ||||||
25 | survivor, or other benefit; except that to the extent that | ||||||
26 | participation, benefits, or premiums under the State Employees |
| |||||||
| |||||||
1 | Group Insurance Act of 1971 are based on the amount of service | ||||||
2 | credit, the terminated service credit shall be used for that | ||||||
3 | purpose. | ||||||
4 | (d) If a person who has received an accelerated pension | ||||||
5 | benefit payment under this Section returns to active service | ||||||
6 | under this Article, then: | ||||||
7 | (1) Any benefits under the System earned as a result of | ||||||
8 | that return to active service shall be based solely on the | ||||||
9 | person's creditable service arising from the return to | ||||||
10 | active service. | ||||||
11 | (2) The accelerated pension benefit payment may not be | ||||||
12 | repaid to the System, and the terminated creditable service | ||||||
13 | may not under any circumstances be reinstated. | ||||||
14 | (e) As a condition of receiving an accelerated pension | ||||||
15 | benefit payment, the accelerated pension benefit payment must | ||||||
16 | be transferred into a tax qualified retirement plan or account. | ||||||
17 | The accelerated pension benefit payment under this Section may | ||||||
18 | be subject to withholding or payment of applicable taxes, but | ||||||
19 | to the extent permitted by federal law, a person who receives | ||||||
20 | an accelerated pension benefit payment under this Section must | ||||||
21 | direct the System to pay all of that payment as a rollover into | ||||||
22 | another retirement plan or account qualified under the Internal | ||||||
23 | Revenue Code of 1986, as amended. | ||||||
24 | (f) Upon receipt of a member's irrevocable election to | ||||||
25 | receive an accelerated pension benefit payment under this | ||||||
26 | Section, the System shall submit a voucher to the Comptroller |
| |||||||
| |||||||
1 | for payment of the member's accelerated pension benefit | ||||||
2 | payment. The Comptroller shall transfer the amount of the | ||||||
3 | voucher from the State Pension Obligation
Acceleration Bond | ||||||
4 | Fund to the System, and the System shall transfer the amount | ||||||
5 | into the member's eligible retirement plan or qualified | ||||||
6 | account. | ||||||
7 | (g) The Board shall adopt any rules, including emergency | ||||||
8 | rules, necessary to implement this Section. | ||||||
9 | (h) No provision of this amendatory Act of the 100th | ||||||
10 | General Assembly shall be interpreted in a way that would cause | ||||||
11 | the applicable System to cease to be a qualified plan under the | ||||||
12 | Internal Revenue Code of 1986.
| ||||||
13 | (Source: P.A. 100-587, eff. 6-4-18.)
| ||||||
14 | (40 ILCS 5/16-190.6) | ||||||
15 | Sec. 16-190.6. Accelerated pension benefit payment for a | ||||||
16 | reduction in annual retirement annuity and survivor's annuity | ||||||
17 | increases. | ||||||
18 | (a) As used in this Section: | ||||||
19 | "Accelerated pension benefit payment" means a lump sum | ||||||
20 | payment equal to 70% of the difference of the present value of | ||||||
21 | the automatic annual increases to a Tier 1 member's retirement | ||||||
22 | annuity and survivor's annuity using the formula applicable to | ||||||
23 | the Tier 1 member and the present value of the automatic annual | ||||||
24 | increases to the Tier 1 member's retirement annuity using the | ||||||
25 | formula provided under subsection (b-5) and the survivor's |
| |||||||
| |||||||
1 | annuity using the formula provided under subsection (b-6). | ||||||
2 | "Eligible person" means a person who: | ||||||
3 | (1) is a Tier 1 member; | ||||||
4 | (2) has submitted an application for a retirement | ||||||
5 | annuity under this Article; | ||||||
6 | (3) meets the age and service requirements for | ||||||
7 | receiving a retirement annuity under this Article; | ||||||
8 | (4) has not received any retirement annuity under this | ||||||
9 | Article; and | ||||||
10 | (5) has not made the election under Section 16-190.5 or | ||||||
11 | 16-190.7 . | ||||||
12 | (b) As soon as practical after the effective date of this | ||||||
13 | amendatory Act of the 100th General Assembly and until June 30, | ||||||
14 | 2021, the System shall implement an accelerated pension benefit | ||||||
15 | payment option for eligible persons. Upon the request of an | ||||||
16 | eligible person, the System shall calculate, using actuarial | ||||||
17 | tables and other assumptions adopted by the Board, an | ||||||
18 | accelerated pension benefit payment amount and shall offer that | ||||||
19 | eligible person the opportunity to irrevocably elect to have | ||||||
20 | his or her automatic annual increases in retirement annuity | ||||||
21 | calculated in accordance with the formula provided under | ||||||
22 | subsection (b-5) and any increases in survivor's annuity | ||||||
23 | payable to his or her survivor's annuity beneficiary calculated | ||||||
24 | in accordance with the formula provided under subsection (b-6) | ||||||
25 | in exchange for the accelerated pension benefit payment. The | ||||||
26 | election under this subsection must be made before the eligible |
| |||||||
| |||||||
1 | person receives the first payment of a retirement annuity | ||||||
2 | otherwise payable under this Article. | ||||||
3 | (b-5) Notwithstanding any other provision of law, the | ||||||
4 | retirement annuity of a person who made the election under | ||||||
5 | subsection (b) shall be subject to annual increases on the | ||||||
6 | January 1 occurring either on or after the attainment of age 67 | ||||||
7 | or the first anniversary of the annuity start date, whichever | ||||||
8 | is later. Each annual increase shall be calculated at 1.5% of | ||||||
9 | the originally granted retirement annuity. | ||||||
10 | (b-6) Notwithstanding any other provision of law, a | ||||||
11 | survivor's annuity payable to a survivor's annuity beneficiary | ||||||
12 | of a person who made the election under subsection (b) shall be | ||||||
13 | subject to annual increases on the January 1 occurring on or | ||||||
14 | after the first anniversary of the commencement of the annuity. | ||||||
15 | Each annual increase shall be calculated at 1.5% of the | ||||||
16 | originally granted survivor's annuity. | ||||||
17 | (c) If a person who has received an accelerated pension | ||||||
18 | benefit payment returns to active service under this Article, | ||||||
19 | then: | ||||||
20 | (1) the calculation of any future automatic annual | ||||||
21 | increase in retirement annuity shall be calculated in | ||||||
22 | accordance with the formula provided in subsection (b-5); | ||||||
23 | and | ||||||
24 | (2) the accelerated pension benefit payment may not be | ||||||
25 | repaid to the System. | ||||||
26 | (d) As a condition of receiving an accelerated pension |
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| |||||||
1 | benefit payment, the accelerated pension benefit payment must | ||||||
2 | be transferred into a tax qualified retirement plan or account. | ||||||
3 | The accelerated pension benefit payment under this Section may | ||||||
4 | be subject to withholding or payment of applicable taxes, but | ||||||
5 | to the extent permitted by federal law, a person who receives | ||||||
6 | an accelerated pension benefit payment under this Section must | ||||||
7 | direct the System to pay all of that payment as a rollover into | ||||||
8 | another retirement plan or account qualified under the Internal | ||||||
9 | Revenue Code of 1986, as amended. | ||||||
10 | (d-5) Upon receipt of a member's irrevocable election to | ||||||
11 | receive an accelerated pension benefit payment under this | ||||||
12 | Section, the System shall submit a voucher to the Comptroller | ||||||
13 | for payment of the member's accelerated pension benefit | ||||||
14 | payment. The Comptroller shall transfer the amount of the | ||||||
15 | voucher from the State Pension Obligation
Acceleration Bond | ||||||
16 | Fund to the System, and the System shall transfer the amount | ||||||
17 | into the member's eligible retirement plan or qualified | ||||||
18 | account. | ||||||
19 | (e) The Board shall adopt any rules, including emergency | ||||||
20 | rules, necessary to implement this Section. | ||||||
21 | (f) No provision of this Section shall be interpreted in a | ||||||
22 | way that would cause the applicable System to cease to be a | ||||||
23 | qualified plan under the Internal Revenue Code of 1986.
| ||||||
24 | (Source: P.A. 100-587, eff. 6-4-18.)
| ||||||
25 | (40 ILCS 5/16-190.7 new) |
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| |||||||
1 | Sec. 16-190.7. Accelerated pension benefit payment for a | ||||||
2 | reduction in retirement annuity. | ||||||
3 | (a) As used in this Section: | ||||||
4 | "Accelerated pension benefit payment" means a lump sum | ||||||
5 | payment equal to 50% of the difference of the net present value | ||||||
6 | of the Tier 1 member's retirement annuity, including the value | ||||||
7 | of the annual increases to that retirement annuity, and the | ||||||
8 | amount of the old-age insurance payments under the federal | ||||||
9 | Old-Age, Survivors, and Disability Insurance program | ||||||
10 | administered by the Social Security Administration, including | ||||||
11 | the value of the annual increases under subsection (d), that he | ||||||
12 | or she would have been entitled to, as determined by the Board, | ||||||
13 | if he or she had been eligible for Social Security coverage | ||||||
14 | with respect to his or her position. | ||||||
15 | "Eligible person" means a person who: | ||||||
16 | (1) is a Tier 1 member; | ||||||
17 | (2) does not have a Qualified Illinois Domestic | ||||||
18 | Relations Order in effect against him or her; | ||||||
19 | (4) has submitted an application for a retirement | ||||||
20 | annuity under this Article; | ||||||
21 | (5) meets the age and service requirements for
| ||||||
22 | receiving a retirement annuity under this Article; | ||||||
23 | (6) has not received any retirement annuity under
this | ||||||
24 | Article; and | ||||||
25 | (7) has not made the election under Section 16-190.5 or | ||||||
26 | 16-190.6. |
| |||||||
| |||||||
1 | "Implementation date" means the earliest date upon which | ||||||
2 | the Board authorizes eligible persons to begin irrevocably | ||||||
3 | electing the accelerated pension benefit payment option under | ||||||
4 | this Section. The Board shall endeavor to make such | ||||||
5 | participation available as soon as possible after the effective | ||||||
6 | date of this amendatory Act of the 101st General Assembly and | ||||||
7 | shall establish an implementation date by Board resolution. | ||||||
8 | (b) Beginning on the implementation date, the System shall | ||||||
9 | implement an accelerated pension benefit payment option for | ||||||
10 | eligible persons. Upon the request of an eligible person, the | ||||||
11 | System shall calculate, using actuarial tables and other | ||||||
12 | assumptions adopted by the Board, an accelerated pension | ||||||
13 | benefit payment amount and shall offer that eligible person the | ||||||
14 | opportunity to irrevocably elect to have his or her retirement | ||||||
15 | annuity reduced in accordance with the formula provided under | ||||||
16 | subsection (c) and his or her automatic annual increases in | ||||||
17 | retirement annuity calculated in accordance with the formula | ||||||
18 | provided under subsection (d) in exchange for the accelerated | ||||||
19 | pension benefit payment. In determining the amount of the | ||||||
20 | accelerated pension benefit payment, the System may use any | ||||||
21 | necessary assumptions about what the amounts of the old-age | ||||||
22 | insurance payments under the federal Old-Age, Survivors, and | ||||||
23 | Disability Insurance program would be for that eligible person. | ||||||
24 | The election under this subsection must be made before the | ||||||
25 | eligible person receives the first payment of a retirement | ||||||
26 | annuity otherwise payable under this Article. |
| |||||||
| |||||||
1 | (c) Notwithstanding any other provision of law, the | ||||||
2 | retirement annuity of a person who made the election under | ||||||
3 | subsection (b) shall be equal to the amount of the old-age | ||||||
4 | insurance payment under the federal Old-Age, Survivors, and | ||||||
5 | Disability Insurance program that he or she would have been | ||||||
6 | entitled to, as determined by the Board, had he or she been | ||||||
7 | participating in Social Security with respect to his or her | ||||||
8 | employment under this Article. | ||||||
9 | (d) Notwithstanding any other provision of law, the | ||||||
10 | retirement annuity of a person who made the election under | ||||||
11 | subsection (b) shall be subject to annual increases on the | ||||||
12 | January 1 occurring either on or after the attainment of age 67 | ||||||
13 | or the first anniversary of the annuity start date, whichever | ||||||
14 | is later. Each annual increase shall be the annual unadjusted | ||||||
15 | percentage increase (but not less than zero) in the consumer | ||||||
16 | price index-w for the 12 months ending with the September | ||||||
17 | preceding each November 1 of the originally granted retirement | ||||||
18 | annuity. If the annual unadjusted percentage change in the | ||||||
19 | consumer price index-w for the 12 months ending with the | ||||||
20 | September preceding each November 1 is zero or there is a | ||||||
21 | decrease, then the annuity shall not be increased. | ||||||
22 | For the purposes of this subsection, "consumer price | ||||||
23 | index-w" means the index published by the Bureau of Labor | ||||||
24 | Statistics of the United States Department of Labor that | ||||||
25 | measures the average change in prices of goods and services | ||||||
26 | purchased by Urban Wage Earners and Clerical Workers, United |
| |||||||
| |||||||
1 | States city average, all items, 1982-84 = 100. The new amount | ||||||
2 | resulting from each annual adjustment shall be determined by | ||||||
3 | the Public Pension Division of the Department of Insurance and | ||||||
4 | made available to the boards of the retirement systems and | ||||||
5 | pension funds by November 1 of each year. | ||||||
6 | (e) If a person who has received an accelerated pension | ||||||
7 | benefit payment returns to active service under this Article, | ||||||
8 | then any change in the amount of retirement annuity shall be | ||||||
9 | calculated in accordance with subsection (c) and any future | ||||||
10 | automatic annual increase in retirement annuity shall be | ||||||
11 | calculated in accordance with the formula provided under | ||||||
12 | subsection (d). | ||||||
13 | (f) The accelerated pension benefit payment may not be | ||||||
14 | repaid to the System. | ||||||
15 | (g) As a condition of receiving an accelerated pension | ||||||
16 | benefit payment, the accelerated pension benefit payment must | ||||||
17 | be transferred into a tax qualified retirement plan or account. | ||||||
18 | The accelerated pension benefit payment under this Section may | ||||||
19 | be subject to withholding or payment of applicable taxes, but | ||||||
20 | to the extent permitted by federal law, a person who receives | ||||||
21 | an accelerated pension benefit payment under this Section must | ||||||
22 | direct the System to pay all of that payment as a rollover into | ||||||
23 | another retirement plan or account qualified under the Internal | ||||||
24 | Revenue Code of 1986, as amended. | ||||||
25 | (h) Upon receipt of a member's irrevocable election to | ||||||
26 | receive an accelerated pension benefit payment under this |
| |||||||
| |||||||
1 | Section, the System shall submit a voucher to the Comptroller | ||||||
2 | for payment of the member's accelerated pension benefit | ||||||
3 | payment. The Comptroller shall transfer the amount of the | ||||||
4 | voucher to the System, and the System shall transfer the amount | ||||||
5 | into a member's eligible retirement plan or qualified account. | ||||||
6 | (i) The Board shall adopt any rules, including emergency | ||||||
7 | rules, necessary to implement this Section. | ||||||
8 | (j) No provision of this Section shall be interpreted in a | ||||||
9 | way that would cause the System to cease to be a qualified plan | ||||||
10 | under the Internal Revenue Code of 1986.
| ||||||
11 | (40 ILCS 5/16-203)
| ||||||
12 | Sec. 16-203. Application and expiration of new benefit | ||||||
13 | increases. | ||||||
14 | (a) As used in this Section, "new benefit increase" means | ||||||
15 | an increase in the amount of any benefit provided under this | ||||||
16 | Article, or an expansion of the conditions of eligibility for | ||||||
17 | any benefit under this Article, that results from an amendment | ||||||
18 | to this Code that takes effect after June 1, 2005 (the | ||||||
19 | effective date of Public Act 94-4). "New benefit increase", | ||||||
20 | however, does not include any benefit increase resulting from | ||||||
21 | the changes made to Article 1 or this Article by Public Act | ||||||
22 | 95-910, Public Act 100-23, Public Act 100-587, Public Act | ||||||
23 | 100-743, Public Act 100-769, or this amendatory Act of the | ||||||
24 | 101st General Assembly or by this amendatory Act of the 100th | ||||||
25 | General Assembly . |
| |||||||
| |||||||
1 | (b) Notwithstanding any other provision of this Code or any | ||||||
2 | subsequent amendment to this Code, every new benefit increase | ||||||
3 | is subject to this Section and shall be deemed to be granted | ||||||
4 | only in conformance with and contingent upon compliance with | ||||||
5 | the provisions of this Section.
| ||||||
6 | (c) The Public Act enacting a new benefit increase must | ||||||
7 | identify and provide for payment to the System of additional | ||||||
8 | funding at least sufficient to fund the resulting annual | ||||||
9 | increase in cost to the System as it accrues. | ||||||
10 | Every new benefit increase is contingent upon the General | ||||||
11 | Assembly providing the additional funding required under this | ||||||
12 | subsection. The Commission on Government Forecasting and | ||||||
13 | Accountability shall analyze whether adequate additional | ||||||
14 | funding has been provided for the new benefit increase and | ||||||
15 | shall report its analysis to the Public Pension Division of the | ||||||
16 | Department of Insurance. A new benefit increase created by a | ||||||
17 | Public Act that does not include the additional funding | ||||||
18 | required under this subsection is null and void. If the Public | ||||||
19 | Pension Division determines that the additional funding | ||||||
20 | provided for a new benefit increase under this subsection is or | ||||||
21 | has become inadequate, it may so certify to the Governor and | ||||||
22 | the State Comptroller and, in the absence of corrective action | ||||||
23 | by the General Assembly, the new benefit increase shall expire | ||||||
24 | at the end of the fiscal year in which the certification is | ||||||
25 | made.
| ||||||
26 | (d) Every new benefit increase shall expire 5 years after |
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| ||||||||||||||||||||||||||
1 | its effective date or on such earlier date as may be specified | |||||||||||||||||||||||||
2 | in the language enacting the new benefit increase or provided | |||||||||||||||||||||||||
3 | under subsection (c). This does not prevent the General | |||||||||||||||||||||||||
4 | Assembly from extending or re-creating a new benefit increase | |||||||||||||||||||||||||
5 | by law. | |||||||||||||||||||||||||
6 | (e) Except as otherwise provided in the language creating | |||||||||||||||||||||||||
7 | the new benefit increase, a new benefit increase that expires | |||||||||||||||||||||||||
8 | under this Section continues to apply to persons who applied | |||||||||||||||||||||||||
9 | and qualified for the affected benefit while the new benefit | |||||||||||||||||||||||||
10 | increase was in effect and to the affected beneficiaries and | |||||||||||||||||||||||||
11 | alternate payees of such persons, but does not apply to any | |||||||||||||||||||||||||
12 | other person, including without limitation a person who | |||||||||||||||||||||||||
13 | continues in service after the expiration date and did not | |||||||||||||||||||||||||
14 | apply and qualify for the affected benefit while the new | |||||||||||||||||||||||||
15 | benefit increase was in effect.
| |||||||||||||||||||||||||
16 | (Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18; | |||||||||||||||||||||||||
17 | 100-743, eff. 8-10-18; 100-769, eff. 8-10-18; revised | |||||||||||||||||||||||||
18 | 10-15-18.)
| |||||||||||||||||||||||||
19 | Section 99. Effective date. This Act takes effect upon | |||||||||||||||||||||||||
20 | becoming law.
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