Bill Text: IL HB2993 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends the Illinois Pension Code. Deletes references to the State Universities Retirement System from the Tier 2 Section of the General Provisions Article and incorporates the Tier 2 provisions into the State Universities Article. Also makes administrative changes: authorizes the Board to delegate some of its duties; provides that warrants, checks, and drafts need not be signed by the president of the Board; specifies that the Board's rulemaking power includes the time and manner of reporting contributions; authorizes the Board to procure additional actuarial, legal, medical, audit, and other services; makes other changes. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Passed) 2013-07-17 - Public Act . . . . . . . . . 98-0092 [HB2993 Detail]

Download: Illinois-2013-HB2993-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB2993 Introduced , by Rep. Elaine Nekritz SYNOPSIS AS INTRODUCED:
See Index
Amends the Illinois Pension Code. Deletes references to the State Universities Retirement System from the Tier 2 Section of the General Provisions Article and incorporates the Tier 2 provisions into the State Universities Article. Also makes administrative changes: authorizes the Board to delegate some of its duties; provides that warrants, checks, and drafts need not be signed by the president of the Board; specifies that the Board's rulemaking power includes the time and manner of reporting contributions; authorizes the Board to procure additional actuarial, legal, medical, audit, and other services; makes other changes. Effective immediately.
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FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 1-160, 15-102, 15-111, 15-112, 15-113.6, 15-134,
15-135, 15-136, 15-136.3, 15-139, 15-145, 15-146, 15-146.1,
15-155, 15-157, 15-158.2, 15-159, 15-163, 15-168, 15-171,
15-172, and 15-177 and by adding Sections 15-108.1, 15-108.2,
15-139.1, 15-145.1, and 15-177.1 as follows:
(40 ILCS 5/1-160)
Sec. 1-160. Provisions applicable to new hires.
(a) The provisions of this Section apply to a person who,
on or after January 1, 2011, first becomes a member or a
participant under any reciprocal retirement system or pension
fund established under this Code, other than a retirement
system or pension fund established under Article 2, 3, 4, 5, 6,
15 or 18 of this Code, notwithstanding any other provision of
this Code to the contrary, but do not apply to any self-managed
plan established under this Code, to any person with respect to
service as a sheriff's law enforcement employee under Article
7, or to any participant of the retirement plan established
under Section 22-101.
(b) "Final average salary" means the average monthly (or

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annual) salary obtained by dividing the total salary or
earnings calculated under the Article applicable to the member
or participant during the 96 consecutive months (or 8
consecutive years) of service within the last 120 months (or 10
years) of service in which the total salary or earnings
calculated under the applicable Article was the highest by the
number of months (or years) of service in that period. For the
purposes of a person who first becomes a member or participant
of any retirement system or pension fund to which this Section
applies on or after January 1, 2011, in this Code, "final
average salary" shall be substituted for the following:
(1) In Article Articles 7 (except for service as
sheriff's law enforcement employees) and 15, "final rate of
earnings".
(2) In Articles 8, 9, 10, 11, and 12, "highest average
annual salary for any 4 consecutive years within the last
10 years of service immediately preceding the date of
withdrawal".
(3) In Article 13, "average final salary".
(4) In Article 14, "final average compensation".
(5) In Article 17, "average salary".
(6) In Section 22-207, "wages or salary received by him
at the date of retirement or discharge".
(b-5) Beginning on January 1, 2011, for all purposes under
this Code (including without limitation the calculation of
benefits and employee contributions), the annual earnings,

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salary, or wages (based on the plan year) of a member or
participant to whom this Section applies shall not exceed
$106,800; however, that amount shall annually thereafter be
increased by the lesser of (i) 3% of that amount, including all
previous adjustments, or (ii) one-half the annual unadjusted
percentage increase (but not less than zero) in the consumer
price index-u for the 12 months ending with the September
preceding each November 1, including all previous adjustments.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the boards of the retirement
systems and pension funds by November 1 of each year.
(c) A member or participant is entitled to a retirement
annuity upon written application if he or she has attained age
67 and has at least 10 years of service credit and is otherwise
eligible under the requirements of the applicable Article.
A member or participant who has attained age 62 and has at
least 10 years of service credit and is otherwise eligible
under the requirements of the applicable Article may elect to
receive the lower retirement annuity provided in subsection (d)
of this Section.

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(d) The retirement annuity of a member or participant who
is retiring after attaining age 62 with at least 10 years of
service credit shall be reduced by one-half of 1% for each full
month that the member's age is under age 67.
(e) Any retirement annuity or supplemental annuity shall be
subject to annual increases on the January 1 occurring either
on or after the attainment of age 67 or the first anniversary
of the annuity start date, whichever is later. Each annual
increase shall be calculated at 3% or one-half the annual
unadjusted percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less, of the
originally granted retirement annuity. If the annual
unadjusted percentage change in the consumer price index-u for
the 12 months ending with the September preceding each November
1 is zero or there is a decrease, then the annuity shall not be
increased.
(f) The initial survivor's or widow's annuity of an
otherwise eligible survivor or widow of a retired member or
participant who first became a member or participant on or
after January 1, 2011 shall be in the amount of 66 2/3% of the
retired member's or participant's retirement annuity at the
date of death. In the case of the death of a member or
participant who has not retired and who first became a member
or participant on or after January 1, 2011, eligibility for a
survivor's or widow's annuity shall be determined by the

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applicable Article of this Code. The initial benefit shall be
66 2/3% of the earned annuity without a reduction due to age. A
child's annuity of an otherwise eligible child shall be in the
amount prescribed under each Article if applicable. Any
survivor's or widow's annuity shall be increased (1) on each
January 1 occurring on or after the commencement of the annuity
if the deceased member died while receiving a retirement
annuity or (2) in other cases, on each January 1 occurring
after the first anniversary of the commencement of the annuity.
Each annual increase shall be calculated at 3% or one-half the
annual unadjusted percentage increase (but not less than zero)
in the consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less, of the
originally granted survivor's annuity. If the annual
unadjusted percentage change in the consumer price index-u for
the 12 months ending with the September preceding each November
1 is zero or there is a decrease, then the annuity shall not be
increased.
(g) The benefits in Section 14-110 apply only if the person
is a State policeman, a fire fighter in the fire protection
service of a department, or a security employee of the
Department of Corrections or the Department of Juvenile
Justice, as those terms are defined in subsection (b) of
Section 14-110. A person who meets the requirements of this
Section is entitled to an annuity calculated under the
provisions of Section 14-110, in lieu of the regular or minimum

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retirement annuity, only if the person has withdrawn from
service with not less than 20 years of eligible creditable
service and has attained age 60, regardless of whether the
attainment of age 60 occurs while the person is still in
service.
(h) If a person who first becomes a member or a participant
of a retirement system or pension fund subject to this Section
on or after January 1, 2011 is receiving a retirement annuity
or retirement pension under that system or fund and becomes a
member or participant under any other system or fund created by
this Code and is employed on a full-time basis, except for
those members or participants exempted from the provisions of
this Section under subsection (a) of this Section, then the
person's retirement annuity or retirement pension under that
system or fund shall be suspended during that employment. Upon
termination of that employment, the person's retirement
annuity or retirement pension payments shall resume and be
recalculated if recalculation is provided for under the
applicable Article of this Code.
If a person who first becomes a member of a retirement
system or pension fund subject to this Section on or after
January 1, 2012 and is receiving a retirement annuity or
retirement pension under that system or fund and accepts on a
contractual basis a position to provide services to a
governmental entity from which he or she has retired, then that
person's annuity or retirement pension earned as an active

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employee of the employer shall be suspended during that
contractual service. A person receiving an annuity or
retirement pension under this Code shall notify the pension
fund or retirement system from which he or she is receiving an
annuity or retirement pension, as well as his or her
contractual employer, of his or her retirement status before
accepting contractual employment. A person who fails to submit
such notification shall be guilty of a Class A misdemeanor and
required to pay a fine of $1,000. Upon termination of that
contractual employment, the person's retirement annuity or
retirement pension payments shall resume and, if appropriate,
be recalculated under the applicable provisions of this Code.
(i) (Blank). Notwithstanding any other provision of this
Section, a person who first becomes a participant of the
retirement system established under Article 15 on or after
January 1, 2011 shall have the option to enroll in the
self-managed plan created under Section 15-158.2 of this Code.
(j) In the case of a conflict between the provisions of
this Section and any other provision of this Code, the
provisions of this Section shall control.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
97-609, eff. 1-1-12.)
(40 ILCS 5/15-102) (from Ch. 108 1/2, par. 15-102)
Sec. 15-102. Terms defined. The terms used in this Article
shall have the meanings ascribed to them in Sections 15-103

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through 15-198 15-132.1, except when the context otherwise
requires.
(Source: P.A. 91-357, eff. 7-29-99.)
(40 ILCS 5/15-108.1 new)
Sec. 15-108.1. Tier 1 member. "Tier 1 member": A
participant or an annuitant of a retirement annuity under this
Article, other than a participant in the self-managed plan
under Section 15-158.2, who first became a participant or
member before January 1, 2011 under any reciprocal retirement
system or pension fund established under this Code, other than
a retirement system or pension fund established under Articles
2,3,4,5,6, or 18 of this Code. "Tier 1 member" includes a
person who first became a participant under this System before
January 1, 2011 and who accepts a refund and is subsequently
reemployed by an employer on or after January 1, 2011.
(40 ILCS 5/15-108.2 new)
Sec. 15-108.2. Tier 2 member. "Tier 2 member": A
participant under this Article, other than a participant in the
self-managed plan under Section 15-158.2, who on or after
January 1, 2011, first becomes a participant or member under
any reciprocal retirement system or pension fund established
under this Code.
(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)

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Sec. 15-111. Earnings.
(a) "Earnings": An amount paid for personal services equal
to the sum of the basic compensation plus extra compensation
for summer teaching, overtime or other extra service. For
periods for which an employee receives service credit under
subsection (c) of Section 15-113.1 or Section 15-113.2,
earnings are equal to the basic compensation on which
contributions are paid by the employee during such periods.
Compensation for employment which is irregular, intermittent
and temporary shall not be considered earnings, unless the
participant is also receiving earnings from the employer as an
employee under Section 15-107.
With respect to transition pay paid by the University of
Illinois to a person who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department:
(1) "Earnings" includes transition pay paid to the
employee on or after the effective date of this amendatory
Act of the 91st General Assembly.
(2) "Earnings" includes transition pay paid to the
employee before the effective date of this amendatory Act
of the 91st General Assembly only if (i) employee
contributions under Section 15-157 have been withheld from
that transition pay or (ii) the employee pays to the System
before January 1, 2001 an amount representing employee

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contributions under Section 15-157 on that transition pay.
Employee contributions under item (ii) may be paid in a
lump sum, by withholding from additional transition pay
accruing before January 1, 2001, or in any other manner
approved by the System. Upon payment of the employee
contributions on transition pay, the corresponding
employer contributions become an obligation of the State.
(b) For a Tier 2 member, the annual earnings shall not
exceed $106,800; however, that amount shall annually
thereafter be increased by the lesser of (i) 3% of that amount,
including all previous adjustments, or (ii) one half the annual
unadjusted percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, including all previous
adjustments.
For the purposes of this Section, "consumer price index u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the average
change in prices of goods and services purchased by all urban
consumers, United States city average, all items, 1982-84 =
100. The new amount resulting from each annual adjustment shall
be determined by the Public Pension Division of the Department
of Insurance and made available to the boards of the retirement
systems and pension funds by November 1 of each year.
(Source: P.A. 91-887, eff. 7-6-00.)

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(40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
Sec. 15-112. Final rate of earnings.
"Final rate of earnings":
(a) This subsection (a) applies only to a Tier 1 member to
a person who first becomes a participant of any system before
January 1, 2011.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings during the 48
consecutive calendar month period ending with the last day of
final termination of employment or the 4 consecutive academic
years of service in which the employee's earnings were the
highest, whichever is greater. For any other employee, the
average annual earnings during the 4 consecutive academic years
of service in which his or her earnings were the highest. For
an employee with less than 48 months or 4 consecutive academic
years of service, the average earnings during his or her entire
period of service. The earnings of an employee with more than
36 months of service prior to the date of becoming a
participant are, for such period, considered equal to the
average earnings during the last 36 months of such service.
(b) This subsection (b) applies to a Tier 2 member person
to whom subsection (a) does not apply.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings obtained by

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dividing by 8 the total earnings of the employee during the 96
consecutive months in which the total earnings were the highest
within the last 120 months prior to termination.
For any other employee, the average annual earnings during
the 8 consecutive academic years within the 10 years prior to
termination in which the employee's earnings were the highest.
For an employee with less than 96 consecutive months or 8
consecutive academic years of service, whichever is necessary,
the average earnings during his or her entire period of
service.
(c) For an employee on leave of absence with pay, or on
leave of absence without pay who makes contributions during
such leave, earnings are assumed to be equal to the basic
compensation on the date the leave began.
(d) For an employee on disability leave, earnings are
assumed to be equal to the basic compensation on the date
disability occurs or the average earnings during the 24 months
immediately preceding the month in which disability occurs,
whichever is greater.
(e) For a Tier 1 member participant who retires on or after
the effective date of this amendatory Act of 1997 with at least
20 years of service as a firefighter or police officer under
this Article, the final rate of earnings shall be the annual
rate of earnings received by the participant on his or her last
day as a firefighter or police officer under this Article, if
that is greater than the final rate of earnings as calculated

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under the other provisions of this Section.
(f) If a Tier 1 member participant to whom subsection (a)
of this Section applies is an employee for at least 6 months
during the academic year in which his or her employment is
terminated, the annual final rate of earnings shall be 25% of
the sum of (1) the annual basic compensation for that year, and
(2) the amount earned during the 36 months immediately
preceding that year, if this is greater than the final rate of
earnings as calculated under the other provisions of this
Section.
(g) In the determination of the final rate of earnings for
an employee, that part of an employee's earnings for any
academic year beginning after June 30, 1997, which exceeds the
employee's earnings with that employer for the preceding year
by more than 20 percent shall be excluded; in the event that an
employee has more than one employer this limitation shall be
calculated separately for the earnings with each employer. In
making such calculation, only the basic compensation of
employees shall be considered, without regard to vacation or
overtime or to contracts for summer employment.
(h) The following are not considered as earnings in
determining final rate of earnings: (1) severance or separation
pay, (2) retirement pay, (3) payment for unused sick leave, and
(4) payments from an employer for the period used in
determining final rate of earnings for any purpose other than
(i) services rendered, (ii) leave of absence or vacation

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granted during that period, and (iii) vacation of up to 56 work
days allowed upon termination of employment; except that, if
the benefit has been collectively bargained between the
employer and the recognized collective bargaining agent
pursuant to the Illinois Educational Labor Relations Act,
payment received during a period of up to 2 academic years for
unused sick leave may be considered as earnings in accordance
with the applicable collective bargaining agreement, subject
to the 20% increase limitation of this Section. Any unused sick
leave considered as earnings under this Section shall not be
taken into account in calculating service credit under Section
15-113.4.
(i) Intermittent periods of service shall be considered as
consecutive in determining final rate of earnings.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/15-113.6) (from Ch. 108 1/2, par. 15-113.6)
Sec. 15-113.6. Service for employment in public schools.
"Service for employment in public schools": Includes those
periods not exceeding the lesser of 10 years or 2/3 of the
service granted under other Sections of this Article dealing
with service credit, during which a person who entered the
system after September 1, 1974 was employed full time by a
public common school, public college and public university, or
by an agency or instrumentality of any of the foregoing, of any
state, territory, dependency or possession of the United States

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of America, including the Philippine Islands, or a school
operated by or under the auspices of any agency or department
of any other state, if the person (1) cannot qualify for a
retirement pension or other benefit based upon employer
contributions from another retirement system, exclusive of
federal social security, based in whole or in part upon this
employment, and (2) pays the lesser of (A) an amount equal to
8% of his or her annual basic compensation on the date of
becoming a participating employee subsequent to this service
multiplied by the number of years of such service, together
with compound interest from the date participation begins to
the date payment is received by the board at the rate of 6% per
annum through August 31, 1982, and at the effective rates after
that date, and (B) 50% of the actuarial value of the increase
in the retirement annuity provided by this service, and (3)
contributes for at least 5 years subsequent to this employment
to one or more of the following systems: the State Universities
Retirement System, the Teachers' Retirement System of the State
of Illinois, and the Public School Teachers' Pension and
Retirement Fund of Chicago.
The service granted under this Section shall not be
considered in determining whether the person has the minimum of
8 years of service required to qualify for a retirement annuity
at age 55 or the 5 years of service required to qualify for a
retirement annuity at age 62 or the 10 years of service
required to qualify for a retirement annuity at age 67, as

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provided in Section 15-135, or the 10 years required by
subsection (c) of Section 1-160 for a person who first becomes
a participant on or after January 1, 2011. The maximum
allowable service of 10 years for this governmental employment
shall be reduced by the service credit which is validated under
paragraph (2) of subsection (b) of Section 16-127 and paragraph
1 of Section 17-133.
(Source: P.A. 95-83, eff. 8-13-07; 96-1490, eff. 1-1-11.)
(40 ILCS 5/15-134) (from Ch. 108 1/2, par. 15-134)
Sec. 15-134. Participant.
(a) Each person shall, as a condition of employment, become
a participant and be subject to this Article on the date that
he or she becomes an employee, makes an election to participate
in, or otherwise becomes a participant in one of the retirement
programs offered under this Article, whichever date is later.
An employee who becomes a participant shall continue to be
a participant until he or she becomes an annuitant, dies or
accepts a refund of contributions. For purposes of subsection
(f) of Section 1-160, the term "participant" shall include a
person receiving a retirement annuity.
(b) A person employed concurrently by 2 or more employers
is eligible to participate in the system on compensation
received from all employers.
(Source: P.A. 96-1490, eff. 1-1-11.)

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(40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
Sec. 15-135. Retirement annuities - Conditions.
(a) This subsection (a) applies only to a Tier 1 member. A
participant who retires in one of the following specified years
with the specified amount of service is entitled to a
retirement annuity at any age under the retirement program
applicable to the participant:
35 years if retirement is in 1997 or before;
34 years if retirement is in 1998;
33 years if retirement is in 1999;
32 years if retirement is in 2000;
31 years if retirement is in 2001;
30 years if retirement is in 2002 or later.
A participant with 8 or more years of service after
September 1, 1941, is entitled to a retirement annuity on or
after attainment of age 55.
A participant with at least 5 but less than 8 years of
service after September 1, 1941, is entitled to a retirement
annuity on or after attainment of age 62.
A participant who has at least 25 years of service in this
system as a police officer or firefighter is entitled to a
retirement annuity on or after the attainment of age 50, if
Rule 4 of Section 15-136 is applicable to the participant.
(a-5) A Tier 2 member is entitled to a retirement annuity
upon written application if he or she has attained age 67 and
has at least 10 years of service credit and is otherwise

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eligible under the requirements of this Article. A Tier 2
member who has attained age 62 and has at least 10 years of
service credit and is otherwise eligible under the requirements
of this Article may elect to receive the lower retirement
annuity provided in subsection (b-5) of Section 15-136 of this
Article.
(b) The annuity payment period shall begin on the date
specified by the participant or the recipient of a disability
retirement annuity submitting a written application, which
date shall not be prior to termination of employment or more
than one year before the application is received by the board;
however, if the participant is not an employee of an employer
participating in this System or in a participating system as
defined in Article 20 of this Code on April 1 of the calendar
year next following the calendar year in which the participant
attains age 70 1/2, the annuity payment period shall begin on
that date regardless of whether an application has been filed.
(c) An annuity is not payable if the amount provided under
Section 15-136 is less than $10 per month.
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who are
participating in the traditional benefit package or the
portable benefit package and do not apply to participants who

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are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
Rule 1: The retirement annuity shall be 1.67% of final rate
of earnings for each of the first 10 years of service, 1.90%
for each of the next 10 years of service, 2.10% for each year
of service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.
Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the effective rate
of interest in effect at the time the retirement annuity
begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins;
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;

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and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.
With respect to a police officer or firefighter who retires
on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an employee
or employer contribution for early retirement under Section
15-136.2 nor any other employer contribution shall be used in
the calculation of the amount of a retirement annuity under
this Rule 2.
This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee
terminates before the effective date of this amendatory Act.
This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his

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or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or
more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity

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for all other service shall be computed under Rule 1.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is an
employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of
the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee of
the University of Illinois in a position other than police
officer or firefighter, from the date of that transfer
until the employee's next termination of service with the
University of Illinois.
Rule 5: The retirement annuity of a participant who elected
early retirement under the provisions of Section 15-136.2 and
who, on or before February 16, 1995, brought administrative
proceedings pursuant to the administrative rules adopted by the
System to challenge the calculation of his or her retirement
annuity shall be the sum of the following, determined from
amounts credited to the participant in accordance with the
actuarial tables and the prescribed rate of interest in effect
at the time the retirement annuity begins:
(i) the normal annuity which can be provided on an

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actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins; and
(ii) an annuity from employer contributions of an
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) an annuity which can be provided on an
actuarially equivalent basis from the employee
contribution for early retirement under Section 15-136.2,
and an annuity from employer contributions of an amount
equal to that which can be provided on an actuarially
equivalent basis from the employee contribution for early
retirement under Section 15-136.2.
In no event shall a retirement annuity under this Rule 5 be
lower than the amount obtained by adding (1) the monthly amount
obtained by dividing the combined employee and employer
contributions made under Section 15-136.2 by the System's
annuity factor for the age of the participant at the beginning
of the annuity payment period and (2) the amount equal to the
participant's annuity if calculated under Rule 1, reduced under
Section 15-136(b) as if no contributions had been made under
Section 15-136.2.
With respect to a participant who is qualified for a

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retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except as
provided in clause (iii) of this Rule 5, neither an employee
nor employer contribution for early retirement under Section
15-136.2, nor any other employer contribution, shall be used in
the calculation of the amount of a retirement annuity under
this Rule 5.
The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General Assembly
in recognition that the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. might be deemed to give some right to the
plaintiff in that case. The changes made by Section 25 of this
amendatory Act of the 91st General Assembly are a legislative
implementation of the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. with respect to that plaintiff.
The changes made by Section 25 of this amendatory Act of

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the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.
(b) For a Tier 1 member, the The retirement annuity
provided under Rules 1 and 3 above shall be reduced by 1/2 of
1% for each month the participant is under age 60 at the time
of retirement. However, this reduction shall not apply in the
following cases:
(1) For a disabled participant whose disability
benefits have been discontinued because he or she has
exhausted eligibility for disability benefits under clause
(6) of Section 15-152;
(2) For a participant who has at least the number of
years of service required to retire at any age under
subsection (a) of Section 15-135; or
(3) For that portion of a retirement annuity which has
been provided on account of service of the participant
during periods when he or she performed the duties of a
police officer or firefighter, if these duties were
performed for at least 5 years immediately preceding the
date the retirement annuity is to begin.
(b-5) The retirement annuity of a Tier 2 member who is
retiring after attaining age 62 with at least 10 years of
service credit shall be reduced by 1/2 of 1% for each full
month that the member's age is under age 67.
(c) The maximum retirement annuity provided under Rules 1,

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2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
(d) A Tier 1 member An annuitant whose status as an
employee terminates after August 14, 1969 shall receive
automatic increases in his or her retirement annuity as
follows:
Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, or Rule 4, or Rule 5, contained in this Section,
multiplied by the number of full months which elapsed from the
date the retirement annuity payments began to January 1, 1972,
plus 0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during

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the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, or Rule 4, or Rule 5 contained in
this Section. The change made under this subsection by P.A.
81-970 is effective January 1, 1980 and applies to each
annuitant whose status as an employee terminates before or
after that date.
Beginning January 1, 1990, all automatic annual increases
payable under this Section shall be calculated as a percentage
of the total annuity payable at the time of the increase,
including all increases previously granted under this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard to
whether status as an employee terminated before that date.
(d-5) A retirement annuity of a Tier 2 member shall receive
annual increases on the January 1 occurring either on or after
the attainment of age 67 or the first anniversary of the
annuity start date, whichever is later. Each annual increase
shall be calculated at 3% or one half the annual unadjusted
percentage increase (but not less than zero) in the consumer
price index-u for the 12 months ending with the September
preceding each November 1, whichever is less, of the originally
granted retirement annuity. If the annual unadjusted
percentage change in the consumer price index-u for the 12
months ending with the September preceding each November 1 is
zero or there is a decrease, then the annuity shall not be
increased.

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(e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987, or
the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
(f) A participant is entitled to such additional annuity as
may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
(g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in whole

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or in part to an employer, and (2) a participant transfers
employment from such governmental unit to such employer within
6 months after the transfer of the function, and (3) the sum of
(A) the annuity payable to the participant under Rule 1, 2, or
3 of this Section (B) all proportional annuities payable to the
participant by all other retirement systems covered by Article
20, and (C) the initial primary insurance amount to which the
participant is entitled under the Social Security Act, is less
than the retirement annuity which would have been payable if
all of the participant's pension credits validated under
Section 20-109 had been validated under this system, a
supplemental annuity equal to the difference in such amounts
shall be payable to the participant.
(h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.
(i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.

HB2993 - 30 - LRB098 10966 EFG 41588 b
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
(40 ILCS 5/15-136.3)
Sec. 15-136.3. Minimum retirement annuity.
(a) Beginning January 1, 1997, any person who is receiving
a monthly retirement annuity under this Article which, after
inclusion of (1) all one-time and automatic annual increases to
which the person is entitled, (2) any supplemental annuity
payable under Section 15-136.1, and (3) any amount deducted
under Section 15-138 or 15-140 to provide a reversionary
annuity, is less than the minimum monthly retirement benefit
amount specified in subsection (b) of this Section, shall be
entitled to a monthly supplemental payment equal to the
difference.
(b) For purposes of the calculation in subsection (a), the
minimum monthly retirement benefit amount is the sum of $25 for
each year of service credit, up to a maximum of 30 years of
service.
(c) This Section applies to all persons receiving a
retirement annuity under this Article, without regard to
whether or not employment terminated prior to the effective
date of this Section. The annual increase provided in
subsection (e) of Section 1-160 does not apply to any benefit
provided under this Section.
(Source: P.A. 96-1490, eff. 1-1-11.)

HB2993 - 31 - LRB098 10966 EFG 41588 b
(40 ILCS 5/15-139) (from Ch. 108 1/2, par. 15-139)
Sec. 15-139. Retirement annuities; cancellation; suspended
during employment.
(a) If an annuitant returns to employment for an employer
within 60 days after the beginning of the retirement annuity
payment period, the retirement annuity shall be cancelled, and
the annuitant shall refund to the System the total amount of
the retirement annuity payments which he or she received. If
the retirement annuity is cancelled, the participant shall
continue to participate in the System.
(b) If an annuitant retires prior to age 60 and receives or
becomes entitled to receive during any month compensation in
excess of the monthly retirement annuity (including any
automatic annual increases) for services performed after the
date of retirement for any employer under this System, that
portion of the monthly retirement annuity provided by employer
contributions shall not be payable.
If an annuitant retires at age 60 or over and receives or
becomes entitled to receive during any academic year
compensation in excess of the difference between his or her
highest annual earnings prior to retirement and his or her
annual retirement annuity computed under Rule 1, Rule 2, Rule
3, or Rule 4, or Rule 5 of Section 15-136, or under Section
15-136.4, for services performed after the date of retirement
for any employer under this System, that portion of the monthly
retirement annuity provided by employer contributions shall be

HB2993 - 32 - LRB098 10966 EFG 41588 b
reduced by an amount equal to the compensation that exceeds
such difference.
However, any remuneration received for serving as a member
of the Illinois Educational Labor Relations Board shall be
excluded from "compensation" for the purposes of this
subsection (b), and serving as a member of the Illinois
Educational Labor Relations Board shall not be deemed to be a
return to employment for the purposes of this Section. This
provision applies without regard to whether service was
terminated prior to the effective date of this amendatory Act
of 1991.
(c) If an employer certifies that an annuitant has been
reemployed on a permanent and continuous basis or in a position
in which the annuitant is expected to serve for at least 9
months, the annuitant shall resume his or her status as a
participating employee and shall be entitled to all rights
applicable to participating employees upon filing with the
board an election to forgo all annuity payments during the
period of reemployment. Upon subsequent retirement, the
retirement annuity shall consist of the annuity which was
terminated by the reemployment, plus the additional retirement
annuity based upon service granted during the period of
reemployment, but the combined retirement annuity shall not
exceed the maximum annuity applicable on the date of the last
retirement.
The total service and earnings credited before and after

HB2993 - 33 - LRB098 10966 EFG 41588 b
the initial date of retirement shall be considered in
determining eligibility of the employee or the employee's
beneficiary to benefits under this Article, and in calculating
final rate of earnings.
In determining the death benefit payable to a beneficiary
of an annuitant who again becomes a participating employee
under this Section, accumulated normal and additional
contributions shall be considered as the sum of the accumulated
normal and additional contributions at the date of initial
retirement and the accumulated normal and additional
contributions credited after that date, less the sum of the
annuity payments received by the annuitant.
The survivors insurance benefits provided under Section
15-145 shall not be applicable to an annuitant who resumes his
or her status as a participating employee, unless the
annuitant, at the time of initial retirement, has a survivors
insurance beneficiary who could qualify for such benefits.
If the participant's employment is terminated because of
circumstances other than death before 9 months from the date of
reemployment, the provisions of this Section regarding
resumption of status as a participating employee shall not
apply. The normal and survivors insurance contributions which
are deducted during this period shall be refunded to the
annuitant without interest, and subsequent benefits under this
Article shall be the same as those which were applicable prior
to the date the annuitant resumed employment.

HB2993 - 34 - LRB098 10966 EFG 41588 b
The amendments made to this Section by this amendatory Act
of the 91st General Assembly apply without regard to whether
the annuitant was in service on or after the effective date of
this amendatory Act.
(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12.)
(40 ILCS 5/15-139.1 new)
Sec. 15-139.1. Tier 2 member retirement annuities;
suspended during employment. If a Tier 2 member is receiving a
retirement annuity under this System and becomes a member or
participant under any other system or fund created by this Code
and is employed on a full-time basis, then the person's
retirement annuity shall be suspended during that employment.
Upon termination of that employment, the person's retirement
annuity shall resume and be recalculated if recalculation is
provided for under this Article.
(40 ILCS 5/15-145) (from Ch. 108 1/2, par. 15-145)
Sec. 15-145. Survivors insurance benefits; conditions and
amounts.
(a) The survivors insurance benefits provided under this
Section shall be payable to the eligible survivors of a Tier 1
member participant covered under the traditional benefit
package upon the death of (1) a participating employee with at
least 1 1/2 years of service, (2) a participant who terminated
employment with at least 10 years of service, and (3) an

HB2993 - 35 - LRB098 10966 EFG 41588 b
annuitant in receipt of a retirement annuity or disability
retirement annuity under this Article.
Service under the State Employees' Retirement System of
Illinois, the Teachers' Retirement System of the State of
Illinois and the Public School Teachers' Pension and Retirement
Fund of Chicago shall be considered in determining eligibility
for survivors benefits under this Section.
If by law, a function of a governmental unit, as defined by
Section 20-107, is transferred in whole or in part to an
employer, and an employee transfers employment from this
governmental unit to such employer within 6 months after the
transfer of this function, the service credits in the
governmental unit's retirement system which have been
validated under Section 20-109 shall be considered in
determining eligibility for survivors benefits under this
Section.
(b) A surviving spouse of a deceased participant, or of a
deceased annuitant who did not take a refund or additional
annuity consisting of accumulated survivors insurance
contributions, shall receive a survivors annuity of 30% of the
final rate of earnings. Payments shall begin on the day
following the participant's or annuitant's death or the date
the surviving spouse attains age 50, whichever is later, and
continue until the death of the surviving spouse. The annuity
shall be payable to the surviving spouse prior to attainment of
age 50 if the surviving spouse has in his or her care a

HB2993 - 36 - LRB098 10966 EFG 41588 b
deceased participant's or annuitant's dependent unmarried
child under age 18 (under age 22 if a full-time student) who is
eligible for a survivors annuity.
Remarriage of a surviving spouse prior to attainment of age
55 that occurs before the effective date of this amendatory Act
of the 91st General Assembly shall disqualify him or her for
the receipt of a survivors annuity until July 6, 2000.
A surviving spouse whose survivors annuity has been
terminated due to remarriage may apply for reinstatement of
that annuity. The reinstated annuity shall begin to accrue on
July 6, 2000, except that if, on July 6, 2000, the annuity is
payable to an eligible surviving child or parent, payment of
the annuity to the surviving spouse shall not be reinstated
until the annuity is no longer payable to any eligible
surviving child or parent. The reinstated annuity shall include
any one-time or annual increases received prior to the date of
termination, as well as any increases that would otherwise have
accrued from the date of termination to the date of
reinstatement. An eligible surviving spouse whose expectation
of receiving a survivors annuity was lost due to remarriage
before attainment of age 50 shall also be entitled to
reinstatement under this subsection, but the resulting
survivors annuity shall not begin to accrue sooner than upon
the surviving spouse's attainment of age 50.
The changes made to this subsection by this amendatory Act
of the 92nd General Assembly (pertaining to remarriage prior to

HB2993 - 37 - LRB098 10966 EFG 41588 b
age 55 or 50) apply without regard to whether the deceased
participant or annuitant was in service on or after the
effective date of this amendatory Act.
(c) Each dependent unmarried child under age 18 (under age
22 if a full-time student) of a deceased participant, or of a
deceased annuitant who did not take a refund or additional
annuity consisting of accumulated survivors insurance
contributions, shall receive a survivors annuity equal to the
sum of (1) 20% of the final rate of earnings, and (2) 10% of the
final rate of earnings divided by the number of children
entitled to this benefit. Payments shall begin on the day
following the participant's or annuitant's death and continue
until the child marries, dies, or attains age 18 (age 22 if a
full-time student). If the child is in the care of a surviving
spouse who is eligible for survivors insurance benefits, the
child's benefit shall be paid to the surviving spouse.
Each unmarried child over age 18 of a deceased participant
or of a deceased annuitant who had a survivor's insurance
beneficiary at the time of his or her retirement, and who was
dependent upon the participant or annuitant by reason of a
physical or mental disability which began prior to the date the
child attained age 18 (age 22 if a full-time student), shall
receive a survivor's annuity equal to the sum of (1) 20% of the
final rate of earnings, and (2) 10% of the final rate of
earnings divided by the number of children entitled to
survivors benefits. Payments shall begin on the day following

HB2993 - 38 - LRB098 10966 EFG 41588 b
the participant's or annuitant's death and continue until the
child marries, dies, or is no longer disabled. If the child is
in the care of a surviving spouse who is eligible for survivors
insurance benefits, the child's benefit may be paid to the
surviving spouse. For the purposes of this Section, disability
means inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has
lasted or can be expected to last for a continuous period of at
least one year.
(d) Each dependent parent of a deceased participant, or of
a deceased annuitant who did not take a refund or additional
annuity consisting of accumulated survivors insurance
contributions, shall receive a survivors annuity equal to the
sum of (1) 20% of final rate of earnings, and (2) 10% of final
rate of earnings divided by the number of parents who qualify
for the benefit. Payments shall begin when the parent reaches
age 55 or the day following the participant's or annuitant's
death, whichever is later, and continue until the parent dies.
Remarriage of a parent prior to attainment of age 55 shall
disqualify the parent for the receipt of a survivors annuity.
(e) In addition to the survivors annuity provided above,
each survivors insurance beneficiary shall, upon death of the
participant or annuitant, receive a lump sum payment of $1,000
divided by the number of such beneficiaries.
(f) The changes made in this Section by Public Act 81-712

HB2993 - 39 - LRB098 10966 EFG 41588 b
pertaining to survivors annuities in cases of remarriage prior
to age 55 shall apply to each survivors insurance beneficiary
who remarries after June 30, 1979, regardless of the date that
the participant or annuitant terminated his employment or died.
The change made to this Section by this amendatory Act of
the 91st General Assembly, pertaining to remarriage prior to
age 55, applies without regard to whether the deceased
participant or annuitant was in service on or after the
effective date of this amendatory Act of the 91st General
Assembly.
(g) On January 1, 1981, any person who was receiving a
survivors annuity on or before January 1, 1971 shall have the
survivors annuity then being paid increased by 1% for each full
year which has elapsed from the date the annuity began. On
January 1, 1982, any survivor whose annuity began after January
1, 1971, but before January 1, 1981, shall have the survivor's
annuity then being paid increased by 1% for each year which has
elapsed from the date the survivor's annuity began. On January
1, 1987, any survivor who began receiving a survivor's annuity
on or before January 1, 1977, shall have the monthly survivor's
annuity increased by $1 for each full year which has elapsed
since the date the survivor's annuity began.
(h) If the sum of the lump sum and total monthly survivor
benefits payable under this Section upon the death of a
participant amounts to less than the sum of the death benefits
payable under items (2) and (3) of Section 15-141, the

HB2993 - 40 - LRB098 10966 EFG 41588 b
difference shall be paid in a lump sum to the beneficiary of
the participant who is living on the date that this additional
amount becomes payable.
(i) If the sum of the lump sum and total monthly survivor
benefits payable under this Section upon the death of an
annuitant receiving a retirement annuity or disability
retirement annuity amounts to less than the death benefit
payable under Section 15-142, the difference shall be paid to
the beneficiary of the annuitant who is living on the date that
this additional amount becomes payable.
(j) Effective on the later of (1) January 1, 1990, or (2)
the January 1 on or next after the date on which the survivor
annuity begins, if the deceased member died while receiving a
retirement annuity, or in all other cases the January 1 nearest
the first anniversary of the date the survivor annuity payments
begin, every survivors insurance beneficiary shall receive an
increase in his or her monthly survivors annuity of 3%. On each
January 1 after the initial increase, the monthly survivors
annuity shall be increased by 3% of the total survivors annuity
provided under this Article, including previous increases
provided by this subsection. Such increases shall apply to the
survivors insurance beneficiaries of each participant and
annuitant, whether or not the employment status of the
participant or annuitant terminates before the effective date
of this amendatory Act of 1990. This subsection (j) also
applies to persons receiving a survivor annuity under the

HB2993 - 41 - LRB098 10966 EFG 41588 b
portable benefit package.
(k) If the Internal Revenue Code of 1986, as amended,
requires that the survivors benefits be payable at an age
earlier than that specified in this Section the benefits shall
begin at the earlier age, in which event, the survivor's
beneficiary shall be entitled only to that amount which is
equal to the actuarial equivalent of the benefits provided by
this Section.
(l) The changes made to this Section and Section 15-131 by
this amendatory Act of 1997, relating to benefits for certain
unmarried children who are full-time students under age 22,
apply without regard to whether the deceased member was in
service on or after the effective date of this amendatory Act
of 1997. These changes do not authorize the repayment of a
refund or a re-election of benefits, and any benefit or
increase in benefits resulting from these changes is not
payable retroactively for any period before the effective date
of this amendatory Act of 1997.
(Source: P.A. 91-887, eff. 7-6-00; 92-749, eff. 8-2-02.)
(40 ILCS 5/15-145.1 new)
Sec. 15-145.1. Survivor's insurance benefits for Tier 2
Members; amount. The initial survivor's insurance benefit of a
survivors insurance beneficiary of a Tier 2 member shall be in
the amount of 66 2/3% of the Tier 2 member's retirement annuity
at the date of death. In the case of the death of a Tier 2

HB2993 - 42 - LRB098 10966 EFG 41588 b
member who has not retired, eligibility for a survivor's
insurance benefit shall be determined by the applicable Section
of this Article. The initial benefit shall be 66 2/3% of the
earned annuity without a reduction due to age. Any survivor's
insurance benefit shall be increased (1) on each January 1
occurring on or after the commencement of the annuity if the
deceased Tier 1 member died while receiving a retirement
annuity or (2) in other cases, on each January 1 occurring
after the first anniversary of the commencement of the benefit.
Each annual increase shall be calculated at 3% or one half the
annual unadjusted percentage increase (but not less than zero)
in the consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less, of the
originally granted survivor's insurance benefit. If the annual
unadjusted percentage change in the consumer price index-u for
the 12 months ending with the September preceding each November
1 is zero or there is a decrease, then the survivor's insurance
benefit shall not be increased. A beneficiary of a Tier 2
member who elects the Portable Benefit Package provided under
this Article shall not be eligible for the survivor's insurance
benefit that is provided under this Section. If 2 or more
persons are eligible to receive survivor's insurance benefits
as provided under this Section based on the same deceased Tier
2 member, the calculation of the survivor's insurance benefits
shall be based on the total calculation of the survivor's
insurance benefit and divided pro rata.

HB2993 - 43 - LRB098 10966 EFG 41588 b
(40 ILCS 5/15-146) (from Ch. 108 1/2, par. 15-146)
Sec. 15-146. Survivors insurance benefits - Minimum
amounts.
(a) The minimum total survivors annuity payable on account
of the death of a participant shall be 50% of the retirement
annuity which would have been provided under Rule 1, Rule 2, or
Rule 3, or Rule 5 of Section 15-136 upon the participant's
attainment of the minimum age at which the penalty for early
retirement would not be applicable or the date of the
participant's death, whichever is later, on the basis of
credits earned prior to the time of death.
(b) The minimum total survivors annuity payable on account
of the death of an annuitant shall be 50% of the retirement
annuity which is payable under Section 15-136 at the time of
death or 50% of the disability retirement annuity payable under
Section 15-153.2. This minimum survivors annuity shall apply to
each participant and annuitant who dies after September 16,
1979, whether or not his or her employee status terminates
before or after that date.
(c) If an annuitant has elected a reversionary annuity, the
retirement annuity referred to in this Section is that which
would have been payable had such election not been filed.
(d) Beginning January 1, 2002, any person who is receiving
a survivors annuity under this Article which, after inclusion
of all one-time and automatic annual increases to which the

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person is entitled, is less than the sum of $17.50 for each
year (up to a maximum of 30 years) of the deceased member's
service credit, shall be entitled to a monthly supplemental
payment equal to the difference.
If 2 or more persons are receiving survivors annuities
based on the same deceased member, the calculation of the
supplemental payment under this subsection shall be based on
the total of those annuities and divided pro rata. The
supplemental payment is not subject to any limitation on the
maximum amount of the annuity and shall not be included in the
calculation of any automatic annual increase under Section
15-145. The annual increase provided in subsection (f) of
Section 1-160 does not apply to any benefit provided under this
subsection.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/15-146.1) (from Ch. 108 1/2, par. 15-146.1)
Sec. 15-146.1. Survivors insurance benefits-Maximum
amounts.
(a) The maximum total survivors annuity payable on account
of any deceased participating employee shall be the lesser of:
(1) 80% of the final rate of earnings; or (2) (A) $400 per
month if one survivors insurance beneficiary is entitled to a
survivors annuity, or (B) $600 per month if there are 2 or more
such beneficiaries.
(b) The maximum total survivors annuity payable on account

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of the death of any person occurring after retirement or after
termination of his or her employee status shall be the lesser
of: (1) 80% of the final rate of earnings; (2) (A) $400 per
month if one survivors insurance beneficiary is entitled to a
survivors annuity, or (B) $600 per month if there are 2 or more
such beneficiaries; or (3) 80% of the retirement annuity
payable to the annuitant at the date of retirement under the
provisions of Rule 1, Rule 2, Rule 3, or Rule 5 of Section
15-136, or 80% of the retirement annuity which would have been
payable to the participant upon attainment of the minimum age
at which the penalty for early retirement would not be
applicable or the date of death, whichever is later, based upon
credits earned as of the date of death.
(c) The maximum total survivors annuity payable on account
of the death of any person whose death occurs while in receipt
of a disability retirement annuity under Section 15-153.2 shall
be the lesser of (1) 80% of his or her final rate of earnings,
(2) (A) $400 per month if one survivors insurance beneficiary
is entitled to a survivors annuity, or (B) $600 per month if 2
or more survivors insurance beneficiaries qualify for this
benefit, or (3) 80% of the retirement annuity which would have
been payable upon attainment of the age at which the penalty
for early retirement would not be applicable or the date of
death, whichever is later, based upon the participant's credits
on the date of death, or 80% of the disability retirement
annuity whichever is greater.

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(d) If the minimum annuity provided under Section 15-146
exceeds the maximum annuity provided under this Section, the
minimum annuity shall be payable.
(e) If an annuitant has elected a reversionary annuity, the
retirement annuity referred to in this Section is that which
would have been payable had such election not been filed.
(f) If a survivors insurance beneficiary qualifies for a
survivors or widows annuity because of pension credits
established by the participant or annuitant in another system
covered by Article 20, and the combined survivors annuities
exceed the highest survivors annuity which could be provided by
either system based upon the combined pension credits, the
survivors annuity payable by this system shall be reduced to
that amount which, when added to the survivors annuity payable
by the other system, would equal this highest survivors
annuity. If the other system has a similar provision for
adjustment of the survivors annuity, the respective
proportional survivors annuities shall be reduced
proportionately according to the ratio which the amount of each
proportional survivors annuity bears to the aggregate of all
proportional survivors annuities. If a survivors annuity is
payable by another system covered by Article 20, and the
survivor elects to waive the survivors annuity and accept a
lump sum payment or death benefit in lieu of the survivors
annuity, this system shall, for the purpose of adjusting the
survivors annuity under this subsection, assume that the

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survivor was entitled to a survivors annuity which, in
accordance with actuarial tables of this system, is the
actuarial equivalent of the amount of the lump sum payment or
death benefit.
(g) The total monthly survivors annuity payable to the
beneficiaries of any annuitant who terminated employment
before July 14, 1959 and whose death occurs after September 16,
1977 shall not exceed $200.
(h) Whenever a reduction in the survivors annuity is made
as authorized above, the survivors annuity to each dependent
parent shall be proportionately reduced or eliminated, and if
further reduction is necessary, the survivors annuity payable
to every other person shall be proportionately decreased.
(i) This Section applies to the survivors insurance
benefits provided to the eligible survivors of a Tier 1 member.
(Source: P.A. 91-887, eff. 7-6-00.)
(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
Sec. 15-155. Employer contributions.
(a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.

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The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
(a-1) For State fiscal years 2012 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.

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For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$702,514,000 and shall be made from the State Pensions Fund and
proceeds of bonds sold in fiscal year 2010 pursuant to Section
7.2 of the General Obligation Bond Act, less (i) the pro rata
share of bond sale expenses determined by the System's share of
total bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2010, (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 15-165 and shall be made from the State
Pensions Fund and proceeds of bonds sold in fiscal year 2011
pursuant to Section 7.2 of the General Obligation Bond Act,
less (i) the pro rata share of bond sale expenses determined by
the System's share of total bond proceeds, (ii) any amounts
received from the General Revenue Fund in fiscal year 2011, and
(iii) any reduction in bond proceeds due to the issuance of

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discounted bonds, if applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's

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total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the
purpose of this Article, but funds of alumni associations,

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foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
(b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this
System pursuant to subsection (h) of Section 15-107. The rate
of contributions to be made by those municipalities shall be
determined annually by the Board on the basis of the actuarial
assumptions adopted by the Board and the recommendations of the
actuary, and shall be expressed as a percentage of salary for
each such employee. The Board shall certify the rate to the
affected municipalities as soon as may be practical. The
employer contributions required under this subsection shall be
remitted by the municipality to the System at the same time and
in the same manner as employee contributions.
(c) Through State fiscal year 1995: The total employer
contribution shall be apportioned among the various funds of
the State and other employers, whether trust, federal, or other
funds, in accordance with actuarial procedures approved by the
Board. State of Illinois contributions for employers receiving
State appropriations for personal services shall be payable
from appropriations made to the employers or to the System. The
contributions for Class I community colleges covering earnings

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other than those paid from trust and federal funds, shall be
payable solely from appropriations to the Illinois Community
College Board or the System for employer contributions.
(d) Beginning in State fiscal year 1996, the required State
contributions to the System shall be appropriated directly to
the System and shall be payable through vouchers issued in
accordance with subsection (c) of Section 15-165, except as
provided in subsection (g).
(e) The State Comptroller shall draw warrants payable to
the System upon proper certification by the System or by the
employer in accordance with the appropriation laws and this
Code.
(f) Normal costs under this Section means liability for
pensions and other benefits which accrues to the System because
of the credits earned for service rendered by the participants
during the fiscal year and expenses of administering the
System, but shall not include the principal of or any
redemption premium or interest on any bonds issued by the Board
or any expenses incurred or deposits required in connection
therewith.
(g) If the amount of a participant's earnings for any
academic year used to determine the final rate of earnings,
determined on a full-time equivalent basis, exceeds the amount
of his or her earnings with the same employer for the previous
academic year, determined on a full-time equivalent basis, by
more than 6%, the participant's employer shall pay to the

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System, in addition to all other payments required under this
Section and in accordance with guidelines established by the
System, the present value of the increase in benefits resulting
from the portion of the increase in earnings that is in excess
of 6%. This present value shall be computed by the System on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the System that is available
at the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
Whenever it determines that a payment is or may be required
under this subsection (g), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection
(h) or (i) of this Section, must include an affidavit setting
forth and attesting to all facts within the employer's
knowledge that are pertinent to the applicability of subsection
(h) or (i). Upon receiving a timely application for
recalculation, the System shall review the application and, if
appropriate, recalculate the amount due.
The employer contributions required under this subsection

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(g) (f) may be paid in the form of a lump sum within 90 days
after receipt of the bill. If the employer contributions are
not paid within 90 days after receipt of the bill, then
interest will be charged at a rate equal to the System's annual
actuarially assumed rate of return on investment compounded
annually from the 91st day after receipt of the bill. Payments
must be concluded within 3 years after the employer's receipt
of the bill.
(h) This subsection (h) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to
participants under contracts or collective bargaining
agreements entered into, amended, or renewed before June 1,
2005.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to a
participant at a time when the participant is 10 or more years
from retirement eligibility under Section 15-135.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases resulting from
overload work, including a contract for summer teaching, or
overtime when the employer has certified to the System, and the

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System has approved the certification, that: (i) in the case of
overloads (A) the overload work is for the sole purpose of
academic instruction in excess of the standard number of
instruction hours for a full-time employee occurring during the
academic year that the overload is paid and (B) the earnings
increases are equal to or less than the rate of pay for
academic instruction computed using the participant's current
salary rate and work schedule; and (ii) in the case of
overtime, the overtime was necessary for the educational
mission.
When assessing payment for any amount due under subsection
(g), the System shall exclude any earnings increase resulting
from (i) a promotion for which the employee moves from one
classification to a higher classification under the State
Universities Civil Service System, (ii) a promotion in academic
rank for a tenured or tenure-track faculty position, or (iii) a
promotion that the Illinois Community College Board has
recommended in accordance with subsection (k) of this Section.
These earnings increases shall be excluded only if the
promotion is to a position that has existed and been filled by
a member for no less than one complete academic year and the
earnings increase as a result of the promotion is an increase
that results in an amount no greater than the average salary
paid for other similar positions.
(i) When assessing payment for any amount due under
subsection (g), the System shall exclude any salary increase

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described in subsection (h) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (g) of this Section.
(j) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(k) The Illinois Community College Board shall adopt rules
for recommending lists of promotional positions submitted to
the Board by community colleges and for reviewing the

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promotional lists on an annual basis. When recommending
promotional lists, the Board shall consider the similarity of
the positions submitted to those positions recognized for State
universities by the State Universities Civil Service System.
The Illinois Community College Board shall file a copy of its
findings with the System. The System shall consider the
findings of the Illinois Community College Board when making
determinations under this Section. The System shall not exclude
any earnings increases resulting from a promotion when the
promotion was not submitted by a community college. Nothing in
this subsection (k) shall require any community college to
submit any information to the Community College Board.
(l) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, 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.
(m) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal

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to the system's actuarially assumed rate of return.
(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
7-13-12; revised 10-17-12.)
(40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
Sec. 15-157. Employee Contributions.
(a) Each participating employee shall make contributions
towards the retirement benefits payable under the retirement
program applicable to the employee from each payment of
earnings applicable to employment under this system on and
after the date of becoming a participant as follows: Prior to
September 1, 1949, 3 1/2% of earnings; from September 1, 1949
to August 31, 1955, 5%; from September 1, 1955 to August 31,
1969, 6%; from September 1, 1969, 6 1/2%. These contributions
are to be considered as normal contributions for purposes of
this Article.
Each participant who is a police officer or firefighter
shall make normal contributions of 8% of each payment of
earnings applicable to employment as a police officer or
firefighter under this system on or after September 1, 1981,
unless he or she files with the board within 60 days after the
effective date of this amendatory Act of 1991 or 60 days after
the board receives notice that he or she is employed as a
police officer or firefighter, whichever is later, a written
notice waiving the retirement formula provided by Rule 4 of

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Section 15-136. This waiver shall be irrevocable. If a
participant had met the conditions set forth in Section
15-132.1 prior to the effective date of this amendatory Act of
1991 but failed to make the additional normal contributions
required by this paragraph, he or she may elect to pay the
additional contributions plus compound interest at the
effective rate. If such payment is received by the board, the
service shall be considered as police officer service in
calculating the retirement annuity under Rule 4 of Section
15-136. While performing service described in clause (i) or
(ii) of Rule 4 of Section 15-136, a participating employee
shall be deemed to be employed as a firefighter for the purpose
of determining the rate of employee contributions under this
Section.
(b) Starting September 1, 1969, each participating
employee shall make additional contributions of 1/2 of 1% of
earnings to finance a portion of the cost of the annual
increases in retirement annuity provided under Section 15-136,
except that with respect to participants in the self-managed
plan this additional contribution shall be used to finance the
benefits obtained under that retirement program.
(c) In addition to the amounts described in subsections (a)
and (b) of this Section, each participating employee shall make
contributions of 1% of earnings applicable under this system on
and after August 1, 1959. The contributions made under this
subsection (c) shall be considered as survivor's insurance

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contributions for purposes of this Article if the employee is
covered under the traditional benefit package, and such
contributions shall be considered as additional contributions
for purposes of this Article if the employee is participating
in the self-managed plan or has elected to participate in the
portable benefit package and has completed the applicable
one-year waiting period. Contributions in excess of $80 during
any fiscal year beginning before August 31, 1969 and in excess
of $120 during any fiscal year thereafter until September 1,
1971 shall be considered as additional contributions for
purposes of this Article.
(d) If the board by board rule so permits and subject to
such conditions and limitations as may be specified in its
rules, a participant may make other additional contributions of
such percentage of earnings or amounts as the participant shall
elect in a written notice thereof received by the board.
(e) That fraction of a participant's total accumulated
normal contributions, the numerator of which is equal to the
number of years of service in excess of that which is required
to qualify for the maximum retirement annuity, and the
denominator of which is equal to the total service of the
participant, shall be considered as accumulated additional
contributions. The determination of the applicable maximum
annuity and the adjustment in contributions required by this
provision shall be made as of the date of the participant's
retirement.

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(f) Notwithstanding the foregoing, a participating
employee shall not be required to make contributions under this
Section after the date upon which continuance of such
contributions would otherwise cause his or her retirement
annuity to exceed the maximum retirement annuity as specified
in clause (1) of subsection (c) of Section 15-136.
(g) A participating employee may make contributions for the
purchase of service credit under this Article.
(h) A Tier 2 member shall not make contributions on
earnings that exceed the limitation as prescribed under
subsection (b) of Section 15-111 of this Article.
(Source: P.A. 90-32, eff. 6-27-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-511, eff. 8-22-97; 90-576, eff. 3-31-98;
90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)
(40 ILCS 5/15-158.2)
Sec. 15-158.2. Self-managed plan.
(a) Purpose. The General Assembly finds that it is
important for colleges and universities to be able to attract
and retain the most qualified employees and that in order to
attract and retain these employees, colleges and universities
should have the flexibility to provide a defined contribution
plan as an alternative for eligible employees who elect not to
participate in a defined benefit retirement program provided
under this Article. Accordingly, the State Universities
Retirement System is hereby authorized to establish and

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administer a self-managed plan, which shall offer
participating employees the opportunity to accumulate assets
for retirement through a combination of employee and employer
contributions that may be invested in mutual funds, collective
investment funds, or other investment products and used to
purchase annuity contracts, either fixed or variable or a
combination thereof. The plan must be qualified under the
Internal Revenue Code of 1986.
(b) Adoption by employers. Each employer subject to this
Article may elect to adopt the self-managed plan established
under this Section; this election is irrevocable. An employer's
election to adopt the self-managed plan makes available to the
eligible employees of that employer the elections described in
Section 15-134.5.
The State Universities Retirement System shall be the plan
sponsor for the self-managed plan and shall prepare a plan
document and prescribe such rules and procedures as are
considered necessary or desirable for the administration of the
self-managed plan. Consistent with its fiduciary duty to the
participants and beneficiaries of the self-managed plan, the
Board of Trustees of the System may delegate aspects of plan
administration as it sees fit to companies authorized to do
business in this State, to the employers, or to a combination
of both.
(c) Selection of service providers and funding vehicles.
The System, in consultation with the employers, shall solicit

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proposals to provide administrative services and funding
vehicles for the self-managed plan from insurance and annuity
companies and mutual fund companies, banks, trust companies, or
other financial institutions authorized to do business in this
State. In reviewing the proposals received and approving and
contracting with no fewer than 2 and no more than 7 companies,
the Board of Trustees of the System shall consider, among other
things, the following criteria:
(1) the nature and extent of the benefits that would be
provided to the participants;
(2) the reasonableness of the benefits in relation to
the premium charged;
(3) the suitability of the benefits to the needs and
interests of the participating employees and the employer;
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company; and
(5) the efficacy of the contract in the recruitment and
retention of employees.
The System, in consultation with the employers, shall
periodically review each approved company. A company may
continue to provide administrative services and funding
vehicles for the self-managed plan only so long as it continues
to be an approved company under contract with the Board.
(d) Employee Direction. Employees who are participating in
the program must be allowed to direct the transfer of their

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account balances among the various investment options offered,
subject to applicable contractual provisions. The participant
shall not be deemed a fiduciary by reason of providing such
investment direction. A person who is a fiduciary shall not be
liable for any loss resulting from such investment direction
and shall not be deemed to have breached any fiduciary duty by
acting in accordance with that direction. Neither the System
nor the employer guarantees any of the investments in the
employee's account balances.
(e) Participation. An employee eligible to participate in
the self-managed plan must make a written election in
accordance with the provisions of Section 15-134.5 and the
procedures established by the System. Participation in the
self-managed plan by an electing employee shall begin on the
first day of the first pay period following the later of the
date the employee's election is filed with the System or the
effective date as of which the employee's employer begins to
offer participation in the self-managed plan. Employers may not
make the self-managed plan available earlier than January 1,
1998. An employee's participation in any other retirement
program administered by the System under this Article shall
terminate on the date that participation in the self-managed
plan begins.
An employee who has elected to participate in the
self-managed plan under this Section must continue
participation while employed in an eligible position, and may

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not participate in any other retirement program administered by
the System under this Article while employed by that employer
or any other employer that has adopted the self-managed plan,
unless the self-managed plan is terminated in accordance with
subsection (i).
Notwithstanding any other provision of this Article, a Tier
2 member shall have the option to enroll in the self-managed
plan.
Participation in the self-managed plan under this Section
shall constitute membership in the State Universities
Retirement System.
A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) Establishment of Initial Account Balance. If at the
time an employee elects to participate in the self-managed plan
he or she has rights and credits in the System due to previous
participation in the traditional benefit package, the System
shall establish for the employee an opening account balance in
the self-managed plan, equal to the amount of contribution
refund that the employee would be eligible to receive under
Section 15-154 if the employee terminated employment on that
date and elected a refund of contributions, except that this
hypothetical refund shall include interest at the effective
rate for the respective years. The System shall transfer assets
from the defined benefit retirement program to the self-managed
plan, as a tax free transfer in accordance with Internal

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Revenue Service guidelines, for purposes of funding the
employee's opening account balance.
(g) No Duplication of Service Credit. Notwithstanding any
other provision of this Article, an employee may not purchase
or receive service or service credit applicable to any other
retirement program administered by the System under this
Article for any period during which the employee was a
participant in the self-managed plan established under this
Section.
(h) Contributions. The self-managed plan shall be funded by
contributions from employees participating in the self-managed
plan and employer contributions as provided in this Section.
The contribution rate for employees participating in the
self-managed plan under this Section shall be equal to the
employee contribution rate for other participants in the
System, as provided in Section 15-157. This required
contribution shall be made as an "employer pick-up" under
Section 414(h) of the Internal Revenue Code of 1986 or any
successor Section thereof. Any employee participating in the
System's traditional benefit package prior to his or her
election to participate in the self-managed plan shall continue
to have the employer pick up the contributions required under
Section 15-157. However, the amounts picked up after the
election of the self-managed plan shall be remitted to and
treated as assets of the self-managed plan. In no event shall
an employee have an option of receiving these amounts in cash.

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Employees may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules prescribed by
the System.
The program shall provide for employer contributions to be
credited to each self-managed plan participant at a rate of
7.6% of the participating employee's salary, less the amount
used by the System to provide disability benefits for the
employee. The amounts so credited shall be paid into the
participant's self-managed plan accounts in a manner to be
prescribed by the System.
An amount of employer contribution, not exceeding 1% of the
participating employee's salary, shall be used for the purpose
of providing the disability benefits of the System to the
employee. Prior to the beginning of each plan year under the
self-managed plan, the Board of Trustees shall determine, as a
percentage of salary, the amount of employer contributions to
be allocated during that plan year for providing disability
benefits for employees in the self-managed plan.
The State of Illinois shall make contributions by
appropriations to the System of the employer contributions
required for employees who participate in the self-managed plan
under this Section. The amount required shall be certified by
the Board of Trustees of the System and paid by the State in
accordance with Section 15-165. The System shall not be
obligated to remit the required employer contributions to any

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of the insurance and annuity companies, mutual fund companies,
banks, trust companies, financial institutions, or other
sponsors of any of the funding vehicles offered under the
self-managed plan until it has received the required employer
contributions from the State. In the event of a deficiency in
the amount of State contributions, the System shall implement
those procedures described in subsection (c) of Section 15-165
to obtain the required funding from the General Revenue Fund.
(i) Termination. The self-managed plan authorized under
this Section may be terminated by the System, subject to the
terms of any relevant contracts, and the System shall have no
obligation to reestablish the self-managed plan under this
Section. This Section does not create a right to continued
participation in any self-managed plan set up by the System
under this Section. If the self-managed plan is terminated, the
participants shall have the right to participate in one of the
other retirement programs offered by the System and receive
service credit in such other retirement program for any years
of employment following the termination.
(j) Vesting; Withdrawal; Return to Service. A participant
in the self-managed plan becomes vested in the employer
contributions credited to his or her accounts in the
self-managed plan on the earliest to occur of the following:
(1) completion of 5 years of service with an employer described
in Section 15-106; (2) the death of the participating employee
while employed by an employer described in Section 15-106, if

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the participant has completed at least 1 1/2 years of service;
or (3) the participant's election to retire and apply the
reciprocal provisions of Article 20 of this Code.
A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the self-managed
plan while not yet eligible for retirement under this Article
(and Article 20, if applicable) shall forfeit all service
credit and accrued rights in the System; if subsequently
re-employed, the participant shall be considered a new
employee. If a former participant again becomes a participating
employee (or becomes employed by a participating system under
Article 20 of this Code) and continues as such for at least 2
years, all such rights, service credits, and previous status as
a participant shall be restored upon repayment of the amount of
the distribution, without interest.
(k) Benefit amounts. If an employee who is vested in
employer contributions terminates employment, the employee
shall be entitled to a benefit which is based on the account
values attributable to both employer and employee
contributions and any investment return thereon.
If an employee who is not vested in employer contributions
terminates employment, the employee shall be entitled to a
benefit based solely on the account values attributable to the
employee's contributions and any investment return thereon,
and the employer contributions and any investment return
thereon shall be forfeited. Any employer contributions which

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are forfeited shall be held in escrow by the company investing
those contributions and shall be used as directed by the System
for future allocations of employer contributions or for the
restoration of amounts previously forfeited by former
participants who again become participating employees.
(Source: P.A. 93-347, eff. 7-24-03.)
(40 ILCS 5/15-159) (from Ch. 108 1/2, par. 15-159)
Sec. 15-159. Board created.
(a) A board of trustees constituted as provided in this
Section shall administer this System. The board shall be known
as the Board of Trustees of the State Universities Retirement
System.
(b) (Blank). Until July 1, 1995, the Board of Trustees
shall be constituted as follows:
Two trustees shall be members of the Board of Trustees of
the University of Illinois, one shall be a member of the Board
of Trustees of Southern Illinois University, one shall be a
member of the Board of Trustees of Chicago State University,
one shall be a member of the Board of Trustees of Eastern
Illinois University, one shall be a member of the Board of
Trustees of Governors State University, one shall be a member
of the Board of Trustees of Illinois State University, one
shall be a member of the Board of Trustees of Northeastern
Illinois University, one shall be a member of the Board of
Trustees of Northern Illinois University, one shall be a member

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of the Board of Trustees of Western Illinois University, and
one shall be a member of the Illinois Community College Board,
selected in each case by their respective boards, and 2 shall
be participants of the system appointed by the Governor for a 6
year term with the first appointment made pursuant to this
amendatory Act of 1984 to be effective September 1, 1985, and
one shall be a participant appointed by the Illinois Community
College Board for a 6 year term, and one shall be a participant
appointed by the Board of Trustees of the University of
Illinois for a 6 year term, and one shall be a participant or
annuitant of the system who is a senior citizen age 60 or older
appointed by the Governor for a 6 year term with the first
appointment to be effective September 1, 1985.
The terms of all trustees holding office under this
subsection (b) on June 30, 1995 shall terminate at the end of
that day and the Board shall thereafter be constituted as
provided in subsection (c).
(c) (Blank). Beginning July 1, 1995, the Board of Trustees
shall be constituted as follows:
The Board shall consist of 9 trustees appointed by the
Governor. Two of the trustees, designated at the time of
appointment, shall be participants of the System. Two of the
trustees, designated at the time of appointment, shall be
annuitants of the System who are receiving retirement annuities
under this Article. The 5 remaining trustees may, but need not,
be participants or annuitants of the System.

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The term of office of trustees appointed under this
subsection (c) shall be 6 years, beginning on July 1. However,
of the initial trustees appointed under this subsection (c), 3
shall be appointed for terms of 2 years, 3 shall be appointed
for terms of 4 years, and 3 shall be appointed for terms of 6
years, to be designated by the Governor at the time of
appointment.
The terms of all trustees holding office under this
subsection (c) on the effective date of this amendatory Act of
the 96th General Assembly shall terminate on that effective
date. The Governor shall make nominations for appointment under
this Section within 60 days after the effective date of this
amendatory Act of the 96th General Assembly. A trustee sitting
on the board on the effective date of this amendatory Act of
the 96th General Assembly may not hold over in office for more
than 90 days after the effective date of this amendatory Act of
the 96th General Assembly. Nothing in this Section shall
prevent the Governor from making a temporary appointment or
nominating a trustee holding office on the day before the
effective date of this amendatory Act of the 96th General
Assembly.
(d) Beginning on the 90th day after April 3, 2009 (the
effective date of Public Act 96-6) this amendatory Act of the
96th General Assembly, the Board of Trustees shall be
constituted as follows:
(1) The Chairperson of the Board of Higher Education,

HB2993 - 74 - LRB098 10966 EFG 41588 b
who shall act as chairperson of this Board.
(2) Four trustees appointed by the Governor with the
advice and consent of the Senate who may not be members of
the system or hold an elective State office and who shall
serve for a term of 6 years, except that the terms of the
initial appointees under this subsection (d) shall be as
follows: 2 for a term of 3 years and 2 for a term of 6
years.
(3) Four active participants of the system to be
elected from the contributing membership of the system by
the contributing members, no more than 2 of which may be
from any of the University of Illinois campuses, who shall
serve for a term of 6 years, except that the terms of the
initial electees shall be as follows: 2 for a term of 3
years and 2 for a term of 6 years.
(4) Two annuitants of the system who have been
annuitants for at least one full year, to be elected from
and by the annuitants of the system, no more than one of
which may be from any of the University of Illinois
campuses, who shall serve for a term of 6 years, except
that the terms of the initial electees shall be as follows:
one for a term of 3 years and one for a term of 6 years.
For the purposes of this Section, the Governor may make a
nomination and the Senate may confirm the nominee in advance of
the commencement of the nominee's term of office.
(e) The 6 elected trustees shall be elected within 90 days

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after April 3, 2009 (the effective date of Public Act 96-6)
this amendatory Act of the 96th General Assembly for a term
beginning on the 90th day after that the effective date of this
amendatory Act. Trustees shall be elected thereafter as terms
expire for a 6-year term beginning July 15 next following their
election, and such election shall be held on May 1, or on May 2
when May 1 falls on a Sunday. The board may establish rules for
the election of trustees to implement the provisions of Public
Act 96-6 this amendatory Act of the 96th General Assembly and
for future elections. Candidates for the participating trustee
shall be nominated by petitions in writing, signed by not less
than 400 participants with their addresses shown opposite their
names. Candidates for the annuitant trustee shall be nominated
by petitions in writing, signed by not less than 100 annuitants
with their addresses shown opposite their names. If there is
more than one qualified nominee for each elected trustee, then
the board shall conduct a secret ballot election by mail for
that trustee, in accordance with rules as established by the
board. If there is only one qualified person nominated by
petition for each elected trustee, then the election as
required by this Section shall not be conducted for that
trustee and the board shall declare such nominee duly elected.
A vacancy occurring in the elective membership of the board
shall be filled for the unexpired term by the elected trustees
serving on the board for the remainder of the term. Nothing in
this subsection shall preclude the adoption of rules providing

HB2993 - 76 - LRB098 10966 EFG 41588 b
for internet or phone balloting in addition, or as an
alternative, to election by mail.
(f) A vacancy in the appointed membership on the board of
trustees caused by resignation, death, expiration of term of
office, or other reason shall be filled by a qualified person
appointed by the Governor for the remainder of the unexpired
term.
(g) Trustees (other than the trustees incumbent on June 30,
1995 or as provided in subsection (c) of this Section) shall
continue in office until their respective successors are
appointed and have qualified, except that a trustee appointed
to one of the participant positions shall be disqualified
immediately upon the termination of his or her status as a
participant and a trustee appointed to one of the annuitant
positions shall be disqualified immediately upon the
termination of his or her status as an annuitant receiving a
retirement annuity.
(h) Each trustee must take an oath of office before a
notary public of this State and shall qualify as a trustee upon
the presentation to the board of a certified copy of the oath.
The oath must state that the person will diligently and
honestly administer the affairs of the retirement system, and
will not knowingly violate or willfully wilfully permit to be
violated any provisions of this Article.
Each trustee shall serve without compensation but shall be
reimbursed for expenses necessarily incurred in attending

HB2993 - 77 - LRB098 10966 EFG 41588 b
board meetings and carrying out his or her duties as a trustee
or officer of the system.
(i) This amendatory Act of 1995 is intended to supersede
the changes made to this Section by Public Act 89-4.
(Source: P.A. 96-6, eff. 4-3-09; 96-1000, eff. 7-2-10.)
(40 ILCS 5/15-163) (from Ch. 108 1/2, par. 15-163)
Sec. 15-163. To consider applications and authorize
payments.
To consider and pass on all applications for annuities and
benefits; to authorize the granting of annuities and benefits;
and to limit or suspend any payment or payments, all in
accordance with this Article. The Board may delegate the
actions prescribed under this Section to persons employed by
the System.
(Source: Laws 1963, p. 161.)
(40 ILCS 5/15-168) (from Ch. 108 1/2, par. 15-168)
Sec. 15-168. To require information.
To require such information as shall be necessary for the
proper operation of the system from any participant or ,
beneficiary or from any employer of a participant officer,
department head or other person or persons in authority, as the
case may be, of any employer.
(Source: Laws 1963, p. 161.)

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(40 ILCS 5/15-171) (from Ch. 108 1/2, par. 15-171)
Sec. 15-171. To receive, record and deposit payments.
To receive all payments made to the system; to make a
record thereof; and to cause all payments to be deposited
immediately with the treasurer of the system. The Board may
delegate the actions prescribed under this Section to persons
employed by the System.
(Source: Laws 1963, p. 161.)
(40 ILCS 5/15-172) (from Ch. 108 1/2, par. 15-172)
Sec. 15-172. To certify warrants, checks, or drafts. To
provide for certification on its behalf by its president and
secretary of all warrants, checks, or drafts upon its
depository bank or corporate trustee upon its treasurer in
accordance with the by-laws and actions of the board
authorizing payments for benefits, expenses, investments and
debt service, including any redemption premium and required
deposits for any bonds of the board, out of funds belonging to
this system.
(Source: P.A. 86-1034.)
(40 ILCS 5/15-177) (from Ch. 108 1/2, par. 15-177)
Sec. 15-177. To make rules.
To establish by-laws; to fix the number necessary for a
quorum; to set up an executive committee of its members to
exercise all powers of the board except as limited by the

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board; to establish rules and regulations, not inconsistent
with the provisions of this Article, as are necessary for the
administration of the system; and generally to carry on any
other reasonable activities which are deemed necessary to
accomplish the purposes of this system, including without
limitation the time and manner of reporting contributions by
participants and, if applicable, contributions by employers.
(Source: Laws 1963, p. 161.)
(40 ILCS 5/15-177.1 new)
Sec. 15-177.1. To obtain additional services. To obtain by
employment or by contract such additional actuarial services
and such legal, medical, clerical, audit, or other services as
are required for the efficient administration of the System.
Section 99. Effective date. This Act takes effect upon
becoming law.
HB2993 - 80 - LRB098 10966 EFG 41588 b
INDEX
Statutes amended in order of appearance
40 ILCS 5/1-160
40 ILCS 5/15-102 from Ch. 108 1/2, par. 15-102
40 ILCS 5/15-108.1 new
40 ILCS 5/15-108.2 new
40 ILCS 5/15-111 from Ch. 108 1/2, par. 15-111
40 ILCS 5/15-112 from Ch. 108 1/2, par. 15-112
40 ILCS 5/15-113.6 from Ch. 108 1/2, par. 15-113.6
40 ILCS 5/15-134 from Ch. 108 1/2, par. 15-134
40 ILCS 5/15-135 from Ch. 108 1/2, par. 15-135
40 ILCS 5/15-136 from Ch. 108 1/2, par. 15-136
40 ILCS 5/15-136.3
40 ILCS 5/15-139 from Ch. 108 1/2, par. 15-139
40 ILCS 5/15-139.1 new
40 ILCS 5/15-145 from Ch. 108 1/2, par. 15-145
40 ILCS 5/15-145.1 new
40 ILCS 5/15-146 from Ch. 108 1/2, par. 15-146
40 ILCS 5/15-146.1 from Ch. 108 1/2, par. 15-146.1
40 ILCS 5/15-155 from Ch. 108 1/2, par. 15-155
40 ILCS 5/15-157 from Ch. 108 1/2, par. 15-157
40 ILCS 5/15-158.2
40 ILCS 5/15-159 from Ch. 108 1/2, par. 15-159
40 ILCS 5/15-163 from Ch. 108 1/2, par. 15-163
40 ILCS 5/15-168 from Ch. 108 1/2, par. 15-168
HB2993 - 81 - LRB098 10966 EFG 41588 b