Bill Text: IL HB3256 | 2019-2020 | 101st General Assembly | Introduced
Bill Title: Amends the State Universities Article of the Illinois Pension Code. Provides that a Tier 2 member is entitled to a retirement annuity upon written application if he or she has at least 10 years of service credit as a police officer, has attained age 55, and is otherwise eligible under the requirements of the Article. Provides that a Tier 2 member who has attained age 50, has at least 10 years of service credit as a police officer, and is otherwise eligible under the requirements of the Article may elect to receive a retirement annuity that is reduced by 6% for each year that member is under the age of 55. Effective immediately.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3256 Detail]
Download: Illinois-2019-HB3256-Introduced.html
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1 | AN ACT concerning public employee benefits.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Pension Code is amended by changing | ||||||||||||||||||||||||||
5 | Sections 15-135 and 15-136 as follows:
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6 | (40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
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7 | Sec. 15-135. Retirement annuities - Conditions.
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8 | (a) This subsection (a) applies only to a Tier 1 member. A | ||||||||||||||||||||||||||
9 | participant who retires in one of the following specified years | ||||||||||||||||||||||||||
10 | with
the specified amount of service is entitled to a | ||||||||||||||||||||||||||
11 | retirement annuity at any age
under the retirement program | ||||||||||||||||||||||||||
12 | applicable to the participant:
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13 | 35 years if retirement is in 1997 or before;
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14 | 34 years if retirement is in 1998;
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15 | 33 years if retirement is in 1999;
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16 | 32 years if retirement is in 2000;
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17 | 31 years if retirement is in 2001;
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18 | 30 years if retirement is in 2002 or later.
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19 | A participant with 8 or more years of service after | ||||||||||||||||||||||||||
20 | September 1, 1941, is
entitled to a retirement annuity on or | ||||||||||||||||||||||||||
21 | after attainment of age 55.
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22 | A participant with at least 5 but less than 8 years
of | ||||||||||||||||||||||||||
23 | service after September 1, 1941, is entitled to a retirement |
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1 | annuity on
or after attainment of age 62.
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2 | A participant who has at least 25 years of service in this | ||||||
3 | system as a
police officer or firefighter is entitled to a | ||||||
4 | retirement
annuity on or after the attainment of age 50, if | ||||||
5 | Rule 4 of Section
15-136 is applicable to the participant.
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6 | (a-5) A Tier 2 member is entitled to a retirement annuity | ||||||
7 | upon written application if he or she has attained age 67 and | ||||||
8 | has at least 10 years of service credit and is otherwise | ||||||
9 | eligible under the requirements of this Article. A Tier 2 | ||||||
10 | member who has attained age 62 and has at least 10 years of | ||||||
11 | service credit and is otherwise eligible under the requirements | ||||||
12 | of this Article may elect to receive the lower retirement | ||||||
13 | annuity provided in subsection (b-5) of Section 15-136 of this | ||||||
14 | Article. | ||||||
15 | (a-10) A Tier 2 member is entitled to a retirement annuity | ||||||
16 | upon written application if he or she has at least 10 years of | ||||||
17 | service credit as a police officer, has attained age 55, and is | ||||||
18 | otherwise eligible under the requirements of this Article. A | ||||||
19 | Tier 2 member who has attained age 50, has at least 10 years of | ||||||
20 | service credit as a police officer, and is otherwise eligible | ||||||
21 | under the requirements of this Article may elect to receive the | ||||||
22 | lower retirement annuity provided in subsection (b-10) of | ||||||
23 | Section 15-136. | ||||||
24 | (b) The annuity payment period shall begin on the date | ||||||
25 | specified by the
participant or the recipient of a disability | ||||||
26 | retirement annuity submitting a written application. For a |
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1 | participant, the date on which the annuity payment period | ||||||
2 | begins shall not be prior
to termination of employment or more | ||||||
3 | than one year before the application is
received by the board; | ||||||
4 | however, if the participant is not an employee of an
employer | ||||||
5 | participating in this System or in a participating system as | ||||||
6 | defined
in Article 20 of this Code on April 1 of the calendar | ||||||
7 | year next following
the calendar year in which the participant | ||||||
8 | attains age 70 1/2, the annuity
payment period shall begin on | ||||||
9 | that date regardless of whether an application
has been filed. | ||||||
10 | For a recipient of a disability retirement annuity, the date on | ||||||
11 | which the annuity payment period begins shall not be prior to | ||||||
12 | the discontinuation of the disability retirement annuity under | ||||||
13 | Section 15-153.2.
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14 | (c) An annuity is not payable if the amount provided under | ||||||
15 | Section
15-136 is less than $10 per month.
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16 | (Source: P.A. 100-556, eff. 12-8-17.)
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17 | (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
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18 | (Text of Section WITHOUT the changes made by P.A. 98-599, | ||||||
19 | which has been held unconstitutional)
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20 | Sec. 15-136. Retirement annuities - Amount. The provisions | ||||||
21 | of this
Section 15-136 apply only to those participants who are | ||||||
22 | participating in the
traditional benefit package or the | ||||||
23 | portable benefit package and do not
apply to participants who | ||||||
24 | are participating in the self-managed plan.
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25 | (a) The amount of a participant's retirement annuity, |
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1 | expressed in the form
of a single-life annuity, shall be | ||||||
2 | determined by whichever of the following
rules is applicable | ||||||
3 | and provides the largest annuity:
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4 | Rule 1: The retirement annuity shall be 1.67% of final rate | ||||||
5 | of earnings for
each of the first 10 years of service, 1.90% | ||||||
6 | for each of the next 10 years of
service, 2.10% for each year | ||||||
7 | of service in excess of 20 but not exceeding 30,
and 2.30% for | ||||||
8 | each year in excess of 30; or for persons who retire on or
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9 | after January 1, 1998, 2.2% of the final rate of earnings for | ||||||
10 | each year of
service.
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11 | Rule 2: The retirement annuity shall be the sum of the | ||||||
12 | following,
determined from amounts credited to the participant | ||||||
13 | in accordance with the
actuarial tables and the effective rate | ||||||
14 | of interest in effect at the
time the retirement annuity | ||||||
15 | begins:
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16 | (i) the normal annuity which can be provided on an | ||||||
17 | actuarially
equivalent basis, by the accumulated normal | ||||||
18 | contributions as of
the date the annuity begins;
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19 | (ii) an annuity from employer contributions of an | ||||||
20 | amount equal to that
which can be provided on an | ||||||
21 | actuarially equivalent basis from the accumulated
normal | ||||||
22 | contributions made by the participant under Section | ||||||
23 | 15-113.6 and Section
15-113.7 plus 1.4 times all other | ||||||
24 | accumulated normal contributions made by
the participant; | ||||||
25 | and
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26 | (iii) the annuity that can be provided on an |
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1 | actuarially equivalent basis
from the entire contribution | ||||||
2 | made by the participant under Section 15-113.3.
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3 | With respect to a police officer or firefighter who retires | ||||||
4 | on or after
August 14, 1998, the accumulated normal | ||||||
5 | contributions taken into account under
clauses (i) and (ii) of | ||||||
6 | this Rule 2 shall include the additional normal
contributions | ||||||
7 | made by the police officer or firefighter under Section
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8 | 15-157(a).
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9 | The amount of a retirement annuity calculated under this | ||||||
10 | Rule 2 shall
be computed solely on the basis of the | ||||||
11 | participant's accumulated normal
contributions, as specified | ||||||
12 | in this Rule and defined in Section 15-116.
Neither an employee | ||||||
13 | or employer contribution for early retirement under
Section | ||||||
14 | 15-136.2 nor any other employer contribution shall be used in | ||||||
15 | the
calculation of the amount of a retirement annuity under | ||||||
16 | this Rule 2.
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17 | This amendatory Act of the 91st General Assembly is a | ||||||
18 | clarification of
existing law and applies to every participant | ||||||
19 | and annuitant without regard to
whether status as an employee | ||||||
20 | terminates before the effective date of this
amendatory Act.
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21 | This Rule 2 does not apply to a person who first becomes an | ||||||
22 | employee under this Article on or after July 1, 2005.
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23 | Rule 3: The retirement annuity of a participant who is | ||||||
24 | employed
at least one-half time during the period on which his | ||||||
25 | or her final rate of
earnings is based, shall be equal to the | ||||||
26 | participant's years of service
not to exceed 30, multiplied by |
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1 | (1) $96 if the participant's final rate
of earnings is less | ||||||
2 | than $3,500, (2) $108 if the final rate of earnings is
at least | ||||||
3 | $3,500 but less than $4,500, (3) $120 if the final rate of | ||||||
4 | earnings
is at least $4,500 but less than $5,500, (4) $132 if | ||||||
5 | the final rate
of earnings is at least $5,500 but less than | ||||||
6 | $6,500, (5)
$144 if the final rate of earnings is at least | ||||||
7 | $6,500 but less than
$7,500, (6) $156 if the final rate of | ||||||
8 | earnings is at least $7,500 but less
than $8,500, (7) $168 if | ||||||
9 | the final rate of earnings is at least $8,500 but
less than | ||||||
10 | $9,500, and (8) $180 if the final rate of earnings is $9,500 or
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11 | more, except that the annuity for those persons having made an | ||||||
12 | election under
Section 15-154(a-1) shall be calculated and | ||||||
13 | payable under the portable
retirement benefit program pursuant | ||||||
14 | to the provisions of Section 15-136.4.
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15 | Rule 4: A participant who is at least age 50 and has 25 or | ||||||
16 | more years of
service as a police officer or firefighter, and a | ||||||
17 | participant who is age 55 or
over and has at least 20 but less | ||||||
18 | than 25 years of service as a police officer
or firefighter, | ||||||
19 | shall be entitled to a retirement annuity of 2 1/4% of the
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20 | final rate of earnings for each of the first 10 years of | ||||||
21 | service as a police
officer or firefighter, 2 1/2% for each of | ||||||
22 | the next 10 years of service as a
police officer or | ||||||
23 | firefighter, and 2 3/4% for each year of service as a police
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24 | officer or firefighter in excess of 20. The retirement annuity | ||||||
25 | for all other
service shall be computed under Rule 1. A Tier 2 | ||||||
26 | member is eligible for a retirement annuity calculated under |
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1 | Rule 4 only if that Tier 2 member meets the service | ||||||
2 | requirements for that benefit calculation as prescribed under | ||||||
3 | this Rule 4 in addition to the applicable age requirement under | ||||||
4 | subsection (a-5) of Section 15-135.
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5 | For purposes of this Rule 4, a participant's service as a | ||||||
6 | firefighter
shall also include the following:
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7 | (i) service that is performed while the person is an | ||||||
8 | employee under
subsection (h) of Section 15-107; and
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9 | (ii) in the case of an individual who was a | ||||||
10 | participating employee
employed in the fire department of | ||||||
11 | the University of Illinois's
Champaign-Urbana campus | ||||||
12 | immediately prior to the elimination of that fire
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13 | department and who immediately after the elimination of | ||||||
14 | that fire department
transferred to another job with the | ||||||
15 | University of Illinois, service performed
as an employee of | ||||||
16 | the University of Illinois in a position other than police
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17 | officer or firefighter, from the date of that transfer | ||||||
18 | until the employee's
next termination of service with the | ||||||
19 | University of Illinois.
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20 | (b) For a Tier 1 member, the retirement annuity provided | ||||||
21 | under Rules 1 and 3 above shall be
reduced by 1/2 of 1% for each | ||||||
22 | month the participant is under age 60 at the
time of | ||||||
23 | retirement. However, this reduction shall not apply in the | ||||||
24 | following
cases:
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25 | (1) For a disabled participant whose disability | ||||||
26 | benefits have been
discontinued because he or she has |
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1 | exhausted eligibility for disability
benefits under clause | ||||||
2 | (6) of Section 15-152;
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3 | (2) For a participant who has at least the number of | ||||||
4 | years of service
required to retire at any age under | ||||||
5 | subsection (a) of Section 15-135; or
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6 | (3) For that portion of a retirement annuity which has | ||||||
7 | been provided on
account of service of the participant | ||||||
8 | during periods when he or she performed
the duties of a | ||||||
9 | police officer or firefighter, if these duties were | ||||||
10 | performed
for at least 5 years immediately preceding the | ||||||
11 | date the retirement annuity
is to begin.
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12 | (b-5) The retirement annuity of a Tier 2 member who is | ||||||
13 | retiring after attaining age 62 with at least 10 years of | ||||||
14 | service credit shall be reduced by 1/2 of 1% for each full | ||||||
15 | month that the member's age is under age 67. | ||||||
16 | (b-10) The retirement annuity of a Tier 2 member who is | ||||||
17 | retiring after attaining age 50 with at least 10 years of | ||||||
18 | service credit as a police officer shall be reduced by 6% for | ||||||
19 | each year that the member's age is under age 55. | ||||||
20 | (c) The maximum retirement annuity provided under Rules 1, | ||||||
21 | 2, 4,
and 5
shall be the lesser of (1) the annual limit of | ||||||
22 | benefits as specified in
Section 415 of the Internal Revenue | ||||||
23 | Code of 1986, as such Section may be
amended from time to time | ||||||
24 | and as such benefit limits shall be adjusted by
the | ||||||
25 | Commissioner of Internal Revenue, and (2) 80% of final rate of
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26 | earnings.
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1 | (d) A Tier 1 member whose status as an employee terminates | ||||||
2 | after August 14,
1969 shall receive automatic increases in his | ||||||
3 | or her retirement annuity as
follows:
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4 | Effective January 1 immediately following the date the | ||||||
5 | retirement annuity
begins, the annuitant shall receive an | ||||||
6 | increase in his or her monthly
retirement annuity of 0.125% of | ||||||
7 | the monthly retirement annuity provided under
Rule 1, Rule 2, | ||||||
8 | Rule 3, or Rule 4 contained in this
Section, multiplied by
the | ||||||
9 | number of full months which elapsed from the date the | ||||||
10 | retirement annuity
payments began to January 1, 1972, plus | ||||||
11 | 0.1667% of such annuity, multiplied by
the number of full | ||||||
12 | months which elapsed from January 1, 1972, or the date the
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13 | retirement annuity payments began, whichever is later, to | ||||||
14 | January 1, 1978, plus
0.25% of such annuity multiplied by the | ||||||
15 | number of full months which elapsed
from January 1, 1978, or | ||||||
16 | the date the retirement annuity payments began,
whichever is | ||||||
17 | later, to the effective date of the increase.
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18 | The annuitant shall receive an increase in his or her | ||||||
19 | monthly retirement
annuity on each January 1 thereafter during | ||||||
20 | the annuitant's life of 3% of
the monthly annuity provided | ||||||
21 | under Rule 1, Rule 2, Rule 3, or Rule 4 contained
in this | ||||||
22 | Section. The change made under this subsection by P.A. 81-970 | ||||||
23 | is
effective January 1, 1980 and applies to each annuitant | ||||||
24 | whose status as
an employee terminates before or after that | ||||||
25 | date.
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26 | Beginning January 1, 1990, all automatic annual increases |
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1 | payable under
this Section shall be calculated as a percentage | ||||||
2 | of the total annuity
payable at the time of the increase, | ||||||
3 | including all increases previously
granted under this Article.
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4 | The change made in this subsection by P.A. 85-1008 is | ||||||
5 | effective January
26, 1988, and is applicable without regard to | ||||||
6 | whether status as an employee
terminated before that date.
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7 | (d-5) A retirement annuity of a Tier 2 member shall receive | ||||||
8 | annual increases on the January 1 occurring either on or after | ||||||
9 | the attainment of age 67 or the first anniversary of the | ||||||
10 | annuity start date, whichever is later. Each annual increase | ||||||
11 | shall be calculated at 3% or one half the annual unadjusted | ||||||
12 | percentage increase (but not less than zero) in the consumer | ||||||
13 | price index-u for the 12 months ending with the September | ||||||
14 | preceding each November 1, whichever is less, of the originally | ||||||
15 | granted retirement annuity. If the annual unadjusted | ||||||
16 | percentage change in the consumer price index-u for the 12 | ||||||
17 | months ending with the September preceding each November 1 is | ||||||
18 | zero or there is a decrease, then the annuity shall not be | ||||||
19 | increased. | ||||||
20 | (e) If, on January 1, 1987, or the date the retirement | ||||||
21 | annuity payment
period begins, whichever is later, the sum of | ||||||
22 | the retirement annuity
provided under Rule 1 or Rule 2 of this | ||||||
23 | Section
and the automatic annual increases provided under the | ||||||
24 | preceding subsection
or Section 15-136.1, amounts to less than | ||||||
25 | the retirement
annuity which would be provided by Rule 3, the | ||||||
26 | retirement
annuity shall be increased as of January 1, 1987, or |
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1 | the date the
retirement annuity payment period begins, | ||||||
2 | whichever is later, to the amount
which would be provided by | ||||||
3 | Rule 3 of this Section. Such increased
amount shall be | ||||||
4 | considered as the retirement annuity in determining
benefits | ||||||
5 | provided under other Sections of this Article. This paragraph
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6 | applies without regard to whether status as an employee | ||||||
7 | terminated before the
effective date of this amendatory Act of | ||||||
8 | 1987, provided that the annuitant was
employed at least | ||||||
9 | one-half time during the period on which the final rate of
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10 | earnings was based.
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11 | (f) A participant is entitled to such additional annuity as | ||||||
12 | may be provided
on an actuarially equivalent basis, by any | ||||||
13 | accumulated
additional contributions to his or her credit. | ||||||
14 | However,
the additional contributions made by the participant | ||||||
15 | toward the automatic
increases in annuity provided under this | ||||||
16 | Section shall not be taken into
account in determining the | ||||||
17 | amount of such additional annuity.
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18 | (g) If, (1) by law, a function of a governmental unit, as | ||||||
19 | defined by Section
20-107 of this Code, is transferred in whole | ||||||
20 | or in part to an employer, and (2)
a participant transfers | ||||||
21 | employment from such governmental unit to such employer
within | ||||||
22 | 6 months after the transfer of the function, and (3) the sum of | ||||||
23 | (A) the
annuity payable to the participant under Rule 1, 2, or | ||||||
24 | 3 of this Section (B)
all proportional annuities payable to the | ||||||
25 | participant by all other retirement
systems covered by Article | ||||||
26 | 20, and (C) the initial primary insurance amount to
which the |
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1 | participant is entitled under the Social Security Act, is less | ||||||
2 | than
the retirement annuity which would have been payable if | ||||||
3 | all of the
participant's pension credits validated under | ||||||
4 | Section 20-109 had been validated
under this system, a | ||||||
5 | supplemental annuity equal to the difference in such
amounts | ||||||
6 | shall be payable to the participant.
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7 | (h) On January 1, 1981, an annuitant who was receiving
a | ||||||
8 | retirement annuity on or before January 1, 1971 shall have his | ||||||
9 | or her
retirement annuity then being paid increased $1 per | ||||||
10 | month for
each year of creditable service. On January 1, 1982, | ||||||
11 | an annuitant whose
retirement annuity began on or before | ||||||
12 | January 1, 1977, shall have his or her
retirement annuity then | ||||||
13 | being paid increased $1 per month for each year of
creditable | ||||||
14 | service.
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15 | (i) On January 1, 1987, any annuitant whose retirement | ||||||
16 | annuity began on or
before January 1, 1977, shall have the | ||||||
17 | monthly retirement annuity increased by
an amount equal to 8¢ | ||||||
18 | per year of creditable service times the number of years
that | ||||||
19 | have elapsed since the annuity began.
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20 | (Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12; | ||||||
21 | 98-92, eff. 7-16-13.)
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22 | Section 99. Effective date. This Act takes effect upon | ||||||
23 | becoming law.
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