Bill Text: IL HB3321 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Beginning municipal fiscal year 2021, provides that the annual levy and contribution to the fund are equal to (1) the normal cost of the pension fund for the year involved, plus (2) an amount sufficient to bring the total assets of the pension fund up to 100% of the total actuarial liabilities of the pension fund over a 30-year rolling amortization period. Provides that each municipal fiscal year through 2031, the rolling amortization period shall be reduced by one year for each municipal fiscal year after 2021. Provides a 20-year rolling amortization period for municipal fiscal year 2031 and each year thereafter. Provides that in making these determinations, the required minimum employer contribution shall be calculated each year as a level dollar amount over the amortization period and shall be determined under the entry age normal actuarial cost method. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3321 Detail]

Download: Illinois-2019-HB3321-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3321 Introduced , by Rep. Emanuel Chris Welch SYNOPSIS AS INTRODUCED:
40 ILCS 5/3-125 from Ch. 108 1/2, par. 3-125
40 ILCS 5/4-118 from Ch. 108 1/2, par. 4-118
30 ILCS 805/8.43 new
Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Beginning municipal fiscal year 2021, provides that the annual levy and contribution to the fund are equal to (1) the normal cost of the pension fund for the year involved, plus (2) an amount sufficient to bring the total assets of the pension fund up to 100% of the total actuarial liabilities of the pension fund over a 30-year rolling amortization period. Provides that each municipal fiscal year through 2031, the rolling amortization period shall be reduced by one year for each municipal fiscal year after 2021. Provides a 20-year rolling amortization period for municipal fiscal year 2031 and each year thereafter. Provides that in making these determinations, the required minimum employer contribution shall be calculated each year as a level dollar amount over the amortization period and shall be determined under the entry age normal actuarial cost method. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB101 10776 RPS 55898 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
HB3321 LRB101 10776 RPS 55898 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 3-125 and 4-118 as follows:
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of police officers, and revenues
available from other sources, will equal a sum sufficient to
meet the annual requirements of the police pension fund. Until
municipal fiscal year 2021, the The annual requirements to be
provided by such tax levy are equal to (1) the normal cost of
the pension fund for the year involved, plus (2) an amount
sufficient to bring the total assets of the pension fund up to
90% of the total actuarial liabilities of the pension fund by
the end of municipal fiscal year 2040, as annually updated and
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or the municipality. In making these

HB3321 - 2 - LRB101 10776 RPS 55898 b
determinations, the required minimum employer contribution
shall be calculated each year as a level percentage of payroll
over the years remaining up to and including fiscal year 2040
and shall be determined under the projected unit credit
actuarial cost method.
For municipal fiscal years 2021 through 2030, the annual
requirements to be provided by such tax levy are equal to (1)
the normal cost of the pension fund for the year involved, plus
(2) an amount sufficient to bring the total assets of the
pension fund up to 100% of the total actuarial liabilities of
the pension fund over a 30-year rolling amortization period, as
annually updated and determined by an enrolled actuary employed
by the Department of Insurance or by an enrolled actuary
retained by the pension fund or the municipality. However, for
each municipal fiscal year until municipal fiscal year 2031,
the rolling amortization period specified in this paragraph
shall be reduced by one year for each municipal fiscal year
after 2021. In making these determinations, the required
minimum employer contribution shall be calculated each year as
a level dollar amount over the amortization period and shall be
determined under the entry age normal actuarial cost method.
For municipal fiscal year 2031 and each year thereafter,
the annual requirements to be provided by such tax levy are
equal to (1) the normal cost of the pension fund for the year
involved, plus (2) an amount sufficient to bring the total
assets of the pension fund up to 100% of the total actuarial

HB3321 - 3 - LRB101 10776 RPS 55898 b
liabilities of the pension fund over a 20-year rolling
amortization period, as annually updated and determined by an
enrolled actuary employed by the Department of Insurance or by
an enrolled actuary retained by the pension fund or the
municipality. In making these determinations, the required
minimum employer contribution shall be calculated each year as
a level dollar amount over the amortization period and shall be
determined under the entry age normal actuarial cost method.
The tax shall be levied and collected in the same manner
as the general taxes of the municipality, and in addition to
all other taxes now or hereafter authorized to be levied upon
all property within the municipality, and shall be in addition
to the amount authorized to be levied for general purposes as
provided by Section 8-3-1 of the Illinois Municipal Code,
approved May 29, 1961, as amended. The tax shall be forwarded
directly to the treasurer of the board within 30 business days
after receipt by the county.
(b) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the System's
assets for fiscal years after March 30, 2011, any actuarial

HB3321 - 4 - LRB101 10776 RPS 55898 b
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(c) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments in accordance with any applicable rules of the
Comptroller, and the Comptroller must, beginning in fiscal year
2016, deduct and remit to the fund the certified amounts or a
portion of those amounts from the following proportions of
payments of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any payments of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount
of any payments of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any payments of State funds
to the municipality.
The State Comptroller may not deduct from any payments of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(d) The police pension fund shall consist of the following
moneys which shall be set apart by the treasurer of the

HB3321 - 5 - LRB101 10776 RPS 55898 b
municipality:
(1) All moneys derived from the taxes levied hereunder;
(2) Contributions by police officers under Section
3-125.1;
(3) All moneys accumulated by the municipality under
any previous legislation establishing a fund for the
benefit of disabled or retired police officers;
(4) Donations, gifts or other transfers authorized by
this Article.
(e) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal

HB3321 - 6 - LRB101 10776 RPS 55898 b
pension funds.
(Source: P.A. 99-8, eff. 7-9-15.)
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
Sec. 4-118. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of firefighters and revenues available
from other sources, will equal a sum sufficient to meet the
annual actuarial requirements of the pension fund, as
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or municipality. For the purposes of this
Section, until municipal fiscal year 2021, the annual actuarial
requirements of the pension fund are equal to (1) the normal
cost of the pension fund, or 17.5% of the salaries and wages to
be paid to firefighters for the year involved, whichever is
greater, plus (2) an annual amount sufficient to bring the
total assets of the pension fund up to 90% of the total
actuarial liabilities of the pension fund by the end of
municipal fiscal year 2040, as annually updated and determined
by an enrolled actuary employed by the Illinois Department of
Insurance or by an enrolled actuary retained by the pension
fund or the municipality. In making these determinations, the

HB3321 - 7 - LRB101 10776 RPS 55898 b
required minimum employer contribution shall be calculated
each year as a level percentage of payroll over the years
remaining up to and including fiscal year 2040 and shall be
determined under the projected unit credit actuarial cost
method. The amount to be applied towards the amortization of
the unfunded accrued liability in any year shall not be less
than the annual amount required to amortize the unfunded
accrued liability, including interest, as a level percentage of
payroll over the number of years remaining in the 40 year
amortization period.
For the purposes of this Section, for municipal fiscal
years 2021 through 2030, the annual actuarial requirements of
the pension fund are equal to (1) the normal cost of the
pension fund, or 17.5% of the salaries and wages to be paid to
firefighters for the year involved, whichever is greater, plus
(2) an amount sufficient to bring the total assets of the
pension fund up to 100% of the total actuarial liabilities of
the pension fund over a 30-year rolling amortization period, as
annually updated and determined by an enrolled actuary employed
by the Department of Insurance or by an enrolled actuary
retained by the pension fund or the municipality. However, for
each municipal fiscal year until municipal fiscal year 2031,
the rolling amortization period specified in this paragraph
shall be reduced by one year for each municipal fiscal year
after 2021. In making these determinations, the required
minimum employer contribution shall be calculated each year as

HB3321 - 8 - LRB101 10776 RPS 55898 b
a level dollar amount over the amortization period and shall be
determined under the entry age normal actuarial cost method.
For the purposes of this Section, beginning municipal
fiscal year 2031 and each municipal fiscal year thereafter, the
annual actuarial requirements of the pension fund are equal to
(1) the normal cost of the pension fund, or 17.5% of the
salaries and wages to be paid to firefighters for the year
involved, whichever is greater, plus (2) an amount sufficient
to bring the total assets of the pension fund up to 100% of the
total actuarial liabilities of the pension fund over a 20-year
rolling amortization period, as annually updated and
determined by an enrolled actuary employed by the Department of
Insurance or by an enrolled actuary retained by the pension
fund or the municipality. In making these determinations, the
required minimum employer contribution shall be calculated
each year as a level dollar amount over the amortization period
and shall be determined under the entry age normal actuarial
cost method.
(a-5) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the pension

HB3321 - 9 - LRB101 10776 RPS 55898 b
fund's assets for fiscal years after March 30, 2011, any
actuarial gains or losses from investment return incurred
in a fiscal year shall be recognized in equal annual
amounts over the 5-year period following that fiscal year.
(b) The tax shall be levied and collected in the same
manner as the general taxes of the municipality, and shall be
in addition to all other taxes now or hereafter authorized to
be levied upon all property within the municipality, and in
addition to the amount authorized to be levied for general
purposes, under Section 8-3-1 of the Illinois Municipal Code or
under Section 14 of the Fire Protection District Act. The tax
shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the county (or, in the
case of amounts added to the tax levy under subsection (f),
used by the municipality to pay the employer contributions
required under subsection (b-1) of Section 15-155 of this
Code).
(b-5) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments in accordance with any applicable rules of the
Comptroller, and the Comptroller must, beginning in fiscal year
2016, deduct and remit to the fund the certified amounts or a
portion of those amounts from the following proportions of

HB3321 - 10 - LRB101 10776 RPS 55898 b
payments of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any payments of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount
of any payments of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any payments of State funds
to the municipality.
The State Comptroller may not deduct from any payments of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(c) The board shall make available to the membership and
the general public for inspection and copying at reasonable
times the most recent Actuarial Valuation Balance Sheet and Tax
Levy Requirement issued to the fund by the Department of
Insurance.
(d) The firefighters' pension fund shall consist of the
following moneys which shall be set apart by the treasurer of
the municipality: (1) all moneys derived from the taxes levied
hereunder; (2) contributions by firefighters as provided under
Section 4-118.1; (3) all rewards in money, fees, gifts, and
emoluments that may be paid or given for or on account of
extraordinary service by the fire department or any member
thereof, except when allowed to be retained by competitive
awards; and (4) any money, real estate or personal property

HB3321 - 11 - LRB101 10776 RPS 55898 b
received by the board.
(e) For the purposes of this Section, "enrolled actuary"
means an actuary: (1) who is a member of the Society of
Actuaries or the American Academy of Actuaries; and (2) who is
enrolled under Subtitle C of Title III of the Employee
Retirement Income Security Act of 1974, or who has been engaged
in providing actuarial services to one or more public
retirement systems for a period of at least 3 years as of July
1, 1983.
(f) The corporate authorities of a municipality that
employs a person who is described in subdivision (d) of Section
4-106 may add to the tax levy otherwise provided for in this
Section an amount equal to the projected cost of the employer
contributions required to be paid by the municipality to the
State Universities Retirement System under subsection (b-1) of
Section 15-155 of this Code.
(g) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer

HB3321 - 12 - LRB101 10776 RPS 55898 b
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 99-8, eff. 7-9-15.)
Section 90. The State Mandates Act is amended by adding
Section 8.43 as follows:
(30 ILCS 805/8.43 new)
Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 101st General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.