Bill Text: IL HB3475 | 2011-2012 | 97th General Assembly | Amended

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Bill Title: Amends the Illinois Pension Code. Makes a technical change in a Section concerning definitions.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2013-01-08 - Session Sine Die [HB3475 Detail]

Download: Illinois-2011-HB3475-Amended.html

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Rep. Karen May

Filed: 3/11/2011

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AMENDMENT TO HOUSE BILL 3475
AMENDMENT NO. ______. Amend House Bill 3475 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Pension Code is amended by
changing Sections 7-116, 7-172, 14-103.05, 22-101, and 22-103
and by adding Sections 1-161 and 1-162 as follows:
(40 ILCS 5/1-161 new)
Sec. 1-161. Final average salary provisions for all
members.
(a) The provisions of this Section apply to a person who is
a member or participant under any Article of this Code
regardless of the date of participation.
(b) "Final average salary" shall be limited to the base
salary or other base compensation paid to the member or
participant for employment by the employer, and shall not
include, without limitation: overtime; commissions; bonuses;

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payment of any type in anticipation of retirement; termination
or severance pay; lump sum payments for sick, compensatory,
vacation time, or other benefits; indirect or in-kind payments
for items such as housing, vehicles, lodging, travel, or
clothing allowances; or any other type of payment that is a
divergence from the normal progression patterns on which an
individual's benefits should be based. For the purposes of a
person who is a member or participant of any retirement system
or pension fund to which this Section applies on or after the
effective date of this amendatory Act of the 97th General
Assembly, in this Code, "final average salary" shall be
substituted for the following:
(1) In Article 2, "highest salary for annuity
purposes".
(2) In Articles 7 (except for service as sheriff's law
enforcement employees) and 15, "final rate of earnings".
(3) 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".
(4) In Article 13, "average final salary".
(5) In Article 14, "final average compensation".
(6) In Article 17, "average salary".
(7) In Article 18, "final average salary".
(8) In Section 22-207, "wages or salary received by him
at the date of retirement or discharge".

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(40 ILCS 5/1-162 new)
Sec. 1-162. Contractual employment following retirement.
If a member or participant of a retirement system or pension
fund under this Code 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
employee of the employer shall be suspended during that
contractual service. Persons receiving an annuity or
retirement pension under this Code shall notify their
contractual employer of their retirement status before
accepting contractual employment. A person who fails to submit
such notification shall be a 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.
(40 ILCS 5/7-116) (from Ch. 108 1/2, par. 7-116)
Sec. 7-116. "Final rate of earnings":
(a) For retirement and survivor annuities, the monthly
earnings obtained by dividing the total earnings received by
the employee during the period of either (1) the 48 consecutive
months of service within the last 120 months of service in

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which his total earnings were the highest or (2) the employee's
total period of service, by the number of months of service in
such period.
(b) For death benefits, the higher of the rate determined
under paragraph (a) of this Section or total earnings received
in the last 12 months of service divided by twelve. If the
deceased employee has less than 12 months of service, the
monthly final rate shall be the monthly rate of pay the
employee was receiving when he began service.
(c) For disability benefits, the total earnings of a
participating employee in the last 12 calendar months of
service prior to the date he becomes disabled divided by 12.
(d) In computing the final rate of earnings: (1) the
earnings rate for all periods of prior service shall be
considered equal to the average earnings rate for the last 3
calendar years of prior service for which creditable service is
received under Section 7-139 or, if there is less than 3 years
of creditable prior service, the average for the total prior
service period for which creditable service is received under
Section 7-139; (2) for out of state service and authorized
leave, the earnings rate shall be the rate upon which service
credits are granted; (3) periods of military leave shall not be
considered; (4) the earnings rate for all periods of disability
shall be considered equal to the rate of earnings upon which
the employee's disability benefits are computed for such
periods; (5) the earnings to be considered for each of the

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final 24 three months of the final earnings period shall not
exceed 125% of the highest earnings of any other month in the
final earnings period; and (6) the annual amount of final rate
of earnings shall be the monthly amount multiplied by the
number of months of service normally required by the position
in a year.
(Source: P.A. 90-448, eff. 8-16-97.)
(40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
Sec. 7-172. Contributions by participating municipalities
and participating instrumentalities.
(a) Each participating municipality and each participating
instrumentality shall make payment to the fund as follows:
1. municipality contributions in an amount determined
by applying the municipality contribution rate to each
payment of earnings paid to each of its participating
employees;
2. an amount equal to the employee contributions
provided by paragraphs (a) and (b) of Section 7-173,
whether or not the employee contributions are withheld as
permitted by that Section;
3. all accounts receivable, together with interest
charged thereon, as provided in Section 7-209;
4. if it has no participating employees with current
earnings, an amount payable which, over a closed period of
20 years for participating municipalities and 10 years for

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participating instrumentalities, will amortize, at the
effective rate for that year, any unfunded obligation. The
unfunded obligation shall be computed as provided in
paragraph 2 of subsection (b);
5. if it has fewer than 7 participating employees or a
negative balance in its municipality reserve, the greater
of (A) an amount payable that, over a period of 20 years,
will amortize at the effective rate for that year any
unfunded obligation, computed as provided in paragraph 2 of
subsection (b) or (B) the amount required by paragraph 1 of
this subsection (a).
(b) A separate municipality contribution rate shall be
determined for each calendar year for all participating
municipalities together with all instrumentalities thereof.
The municipality contribution rate shall be determined for
participating instrumentalities as if they were participating
municipalities. The municipality contribution rate shall be
the sum of the following percentages:
1. The percentage of earnings of all the participating
employees of all participating municipalities and
participating instrumentalities which, if paid over the
entire period of their service, will be sufficient when
combined with all employee contributions available for the
payment of benefits, to provide all annuities for
participating employees, and the $3,000 death benefit
payable under Sections 7-158 and 7-164, such percentage to

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be known as the normal cost rate.
2. The percentage of earnings of the participating
employees of each participating municipality and
participating instrumentalities necessary to adjust for
the difference between the present value of all benefits,
excluding temporary and total and permanent disability and
death benefits, to be provided for its participating
employees and the sum of its accumulated municipality
contributions and the accumulated employee contributions
and the present value of expected future employee and
municipality contributions pursuant to subparagraph 1 of
this paragraph (b). This adjustment shall be spread over
the remainder of the period that is allowable under
generally accepted accounting principles.
3. The percentage of earnings of the participating
employees of all municipalities and participating
instrumentalities necessary to provide the present value
of all temporary and total and permanent disability
benefits granted during the most recent year for which
information is available.
4. The percentage of earnings of the participating
employees of all participating municipalities and
participating instrumentalities necessary to provide the
present value of the net single sum death benefits expected
to become payable from the reserve established under
Section 7-206 during the year for which this rate is fixed.

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5. The percentage of earnings necessary to meet any
deficiency arising in the Terminated Municipality Reserve.
(c) A separate municipality contribution rate shall be
computed for each participating municipality or participating
instrumentality for its sheriff's law enforcement employees.
A separate municipality contribution rate shall be
computed for the sheriff's law enforcement employees of each
forest preserve district that elects to have such employees.
For the period from January 1, 1986 to December 31, 1986, such
rate shall be the forest preserve district's regular rate plus
2%.
In the event that the Board determines that there is an
actuarial deficiency in the account of any municipality with
respect to a person who has elected to participate in the Fund
under Section 3-109.1 of this Code, the Board may adjust the
municipality's contribution rate so as to make up that
deficiency over such reasonable period of time as the Board may
determine.
(d) The Board may establish a separate municipality
contribution rate for all employees who are program
participants employed under the federal Comprehensive
Employment Training Act by all of the participating
municipalities and instrumentalities. The Board may also
provide that, in lieu of a separate municipality rate for these
employees, a portion of the municipality contributions for such
program participants shall be refunded or an extra charge

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assessed so that the amount of municipality contributions
retained or received by the fund for all CETA program
participants shall be an amount equal to that which would be
provided by the separate municipality contribution rate for all
such program participants. Refunds shall be made to prime
sponsors of programs upon submission of a claim therefor and
extra charges shall be assessed to participating
municipalities and instrumentalities. In establishing the
municipality contribution rate as provided in paragraph (b) of
this Section, the use of a separate municipality contribution
rate for program participants or the refund of a portion of the
municipality contributions, as the case may be, may be
considered.
(e) Computations of municipality contribution rates for
the following calendar year shall be made prior to the
beginning of each year, from the information available at the
time the computations are made, and on the assumption that the
employees in each participating municipality or participating
instrumentality at such time will continue in service until the
end of such calendar year at their respective rates of earnings
at such time.
(f) Any municipality which is the recipient of State
allocations representing that municipality's contributions for
retirement annuity purposes on behalf of its employees as
provided in Section 12-21.16 of the Illinois Public Aid Code
shall pay the allocations so received to the Board for such

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purpose. Estimates of State allocations to be received during
any taxable year shall be considered in the determination of
the municipality's tax rate for that year under Section 7-171.
If a special tax is levied under Section 7-171, none of the
proceeds may be used to reimburse the municipality for the
amount of State allocations received and paid to the Board. Any
multiple-county or consolidated health department which
receives contributions from a county under Section 11.2 of "An
Act in relation to establishment and maintenance of county and
multiple-county health departments", approved July 9, 1943, as
amended, or distributions under Section 3 of the Department of
Public Health Act, shall use these only for municipality
contributions by the health department.
(g) Municipality contributions for the several purposes
specified shall, for township treasurers and employees in the
offices of the township treasurers who meet the qualifying
conditions for coverage hereunder, be allocated among the
several school districts and parts of school districts serviced
by such treasurers and employees in the proportion which the
amount of school funds of each district or part of a district
handled by the treasurer bears to the total amount of all
school funds handled by the treasurer.
From the funds subject to allocation among districts and
parts of districts pursuant to the School Code, the trustees
shall withhold the proportionate share of the liability for
municipality contributions imposed upon such districts by this

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Section, in respect to such township treasurers and employees
and remit the same to the Board.
The municipality contribution rate for an educational
service center shall initially be the same rate for each year
as the regional office of education or school district which
serves as its administrative agent. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
The municipality contribution rate for a public agency,
other than a vocational education cooperative, formed under the
Intergovernmental Cooperation Act shall initially be the
average rate for the municipalities which are parties to the
intergovernmental agreement. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
(h) Each participating municipality and participating
instrumentality shall make the contributions in the amounts
provided in this Section in the manner prescribed from time to
time by the Board and all such contributions shall be
obligations of the respective participating municipalities and
participating instrumentalities to this fund. The failure to
deduct any employee contributions shall not relieve the
participating municipality or participating instrumentality of
its obligation to this fund. Delinquent payments of
contributions due under this Section may, with interest, be
recovered by civil action against the participating

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municipalities or participating instrumentalities.
Municipality contributions, other than the amount necessary
for employee contributions and Social Security contributions,
for periods of service by employees from whose earnings no
deductions were made for employee contributions to the fund,
may be charged to the municipality reserve for the municipality
or participating instrumentality.
(i) Contributions by participating instrumentalities shall
be determined as provided herein except that the percentage
derived under subparagraph 2 of paragraph (b) of this Section,
and the amount payable under subparagraph 4 of paragraph (a) of
this Section, shall be based on an amortization period of 10
years.
(j) Notwithstanding the other provisions of this Section,
the additional unfunded liability accruing as a result of this
amendatory Act of the 94th General Assembly shall be amortized
over a period of 30 years beginning on January 1 of the second
calendar year following the calendar year in which this
amendatory Act takes effect, except that the employer may
provide for a longer amortization period by adopting a
resolution or ordinance specifying a 35-year or 40-year period
and submitting a certified copy of the ordinance or resolution
to the fund no later than June 1 of the calendar year following
the calendar year in which this amendatory Act takes effect.
(k) If the amount of a participating employee's earnings
for any calendar year used to determine the participating

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employee's retirement annuity, determined on a full-time
equivalent basis, exceeds the amount of his or her earnings
with the same participating municipality or participating
instrumentality for the previous calendar year, determined on a
full-time equivalent basis, by more than 6%, then the
participating municipality or participating instrumentality
shall pay to the fund, in addition to all other payments
required under this Article and in accordance with guidelines
established by the fund, 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 fund on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the fund
that is available at the time of the computation. The fund may
require the participating municipality or participating
instrumentality to provide any pertinent information or
documentation.
Whenever it determines that a payment is or may be required
under this subsection (k), the fund shall calculate the amount
of the payment and bill the participating municipality or
participating instrumentality for that amount. The bill shall
specify the calculations used to determine the amount due. If
the participating municipality or participating
instrumentality disputes the amount of the bill, it may, within
30 days after receipt of the bill, apply to the fund in writing
for a recalculation. The application must specify in detail the

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grounds of the dispute. Upon receiving a timely application for
recalculation, the fund shall review the application and, if
appropriate, recalculate the amount due. The participating
municipality and participating instrumentality contributions
required under this subsection (k) may be paid in the form of a
lump sum within 90 days after receipt of the bill. If the
participating municipality and participating instrumentality
contributions are not paid within 90 days after receipt of the
bill, then interest will be charged at a rate equal to the
fund'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 receipt
of the bill by the participating municipality or participating
instrumentality.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from overload or overtime earnings.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings increases
attributable to standard employment promotions resulting in
increased responsibility and workload.
(Source: P.A. 96-1084, eff. 7-16-10; 96-1140, eff. 7-21-10;
revised 9-16-10.)
(40 ILCS 5/14-103.05) (from Ch. 108 1/2, par. 14-103.05)
Sec. 14-103.05. Employee.

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(a) Any person employed by a Department who receives salary
for personal services rendered to the Department on a warrant
issued pursuant to a payroll voucher certified by a Department
and drawn by the State Comptroller upon the State Treasurer,
including an elected official described in subparagraph (d) of
Section 14-104, shall become an employee for purpose of
membership in the Retirement System on the first day of such
employment.
A person entering service on or after January 1, 1972 and
prior to January 1, 1984 shall become a member as a condition
of employment and shall begin making contributions as of the
first day of employment.
A person entering service on or after January 1, 1984
shall, upon completion of 6 months of continuous service which
is not interrupted by a break of more than 2 months, become a
member as a condition of employment. Contributions shall begin
the first of the month after completion of the qualifying
period.
A person employed by the Chicago Metropolitan Agency for
Planning on the effective date of this amendatory Act of the
95th General Assembly who was a member of this System as an
employee of the Chicago Area Transportation Study and makes an
election under Section 14-104.13 to participate in this System
for his or her employment with the Chicago Metropolitan Agency
for Planning.
The qualifying period of 6 months of service is not

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applicable to: (1) a person who has been granted credit for
service in a position covered by the State Universities
Retirement System, the Teachers' Retirement System of the State
of Illinois, the General Assembly Retirement System, or the
Judges Retirement System of Illinois unless that service has
been forfeited under the laws of those systems; (2) a person
entering service on or after July 1, 1991 in a noncovered
position; (3) a person to whom Section 14-108.2a or 14-108.2b
applies; or (4) a person to whom subsection (a-5) of this
Section applies.
(a-5) A person entering service on or after December 1,
2010 shall become a member as a condition of employment and
shall begin making contributions as of the first day of
employment. A person serving in the qualifying period on
December 1, 2010 will become a member on December 1, 2010 and
shall begin making contributions as of December 1, 2010.
(b) The term "employee" does not include the following:
(1) members of the State Legislature, and persons
electing to become members of the General Assembly
Retirement System pursuant to Section 2-105;
(2) incumbents of offices normally filled by vote of
the people;
(3) except as otherwise provided in this Section, any
person appointed by the Governor with the advice and
consent of the Senate unless that person elects to
participate in this system;

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(3.1) any person serving as a commissioner of an ethics
commission created under the State Officials and Employees
Ethics Act unless that person elects to participate in this
system with respect to that service as a commissioner;
(3.2) any person serving as a part-time employee in any
of the following positions: Legislative Inspector General,
Special Legislative Inspector General, employee of the
Office of the Legislative Inspector General, Executive
Director of the Legislative Ethics Commission, or staff of
the Legislative Ethics Commission, regardless of whether
he or she is in active service on or after July 8, 2004
(the effective date of Public Act 93-685), unless that
person elects to participate in this System with respect to
that service; in this item (3.2), a "part-time employee" is
a person who is not required to work at least 35 hours per
week;
(3.3) any person who has made an election under Section
1-123 and who is serving either as legal counsel in the
Office of the Governor or as Chief Deputy Attorney General;
(4) except as provided in Section 14-108.2 or
14-108.2c, any person who is covered or eligible to be
covered by the Teachers' Retirement System of the State of
Illinois, the State Universities Retirement System, or the
Judges Retirement System of Illinois;
(5) an employee of a municipality or any other
political subdivision of the State;

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(6) any person who becomes an employee after June 30,
1979 as a public service employment program participant
under the Federal Comprehensive Employment and Training
Act and whose wages or fringe benefits are paid in whole or
in part by funds provided under such Act;
(7) enrollees of the Illinois Young Adult Conservation
Corps program, administered by the Department of Natural
Resources, authorized grantee pursuant to Title VIII of the
"Comprehensive Employment and Training Act of 1973", 29 USC
993, as now or hereafter amended;
(8) enrollees and temporary staff of programs
administered by the Department of Natural Resources under
the Youth Conservation Corps Act of 1970;
(9) any person who is a member of any professional
licensing or disciplinary board created under an Act
administered by the Department of Professional Regulation
or a successor agency or created or re-created after the
effective date of this amendatory Act of 1997, and who
receives per diem compensation rather than a salary,
notwithstanding that such per diem compensation is paid by
warrant issued pursuant to a payroll voucher; such persons
have never been included in the membership of this System,
and this amendatory Act of 1987 (P.A. 84-1472) is not
intended to effect any change in the status of such
persons;
(10) any person who is a member of the Illinois Health

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Care Cost Containment Council, and receives per diem
compensation rather than a salary, notwithstanding that
such per diem compensation is paid by warrant issued
pursuant to a payroll voucher; such persons have never been
included in the membership of this System, and this
amendatory Act of 1987 is not intended to effect any change
in the status of such persons;
(11) any person who is a member of the Oil and Gas
Board created by Section 1.2 of the Illinois Oil and Gas
Act, and receives per diem compensation rather than a
salary, notwithstanding that such per diem compensation is
paid by warrant issued pursuant to a payroll voucher; or
(12) a person employed by the State Board of Higher
Education in a position with the Illinois Century Network
as of June 30, 2004, who remains continuously employed
after that date by the Department of Central Management
Services in a position with the Illinois Century Network
and participates in the Article 15 system with respect to
that employment; .
(13) any person who first becomes a member of the Civil
Service Commission on or after the effective date of this
amendatory Act of the 97th General Assembly;
(14) any person, other than the Director of Employment
Security, who first becomes a member of the Board of Review
of the Department of Employment Security on or after the
effective date of this amendatory Act of the 97th General

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Assembly;
(15) any person who first becomes a member of the Civil
Service Commission on or after the effective date of this
amendatory Act of the 97th General Assembly;
(16) any person who first becomes a member of the
Illinois Liquor Control Commission on or after the
effective date of this amendatory Act of the 97th General
Assembly;
(17) any person who first becomes a member of the
Secretary of State Merit Commission on or after the
effective date of this amendatory Act of the 97th General
Assembly;
(18) any person who first becomes a member of the Human
Rights Commission on or after the effective date of this
amendatory Act of the 97th General Assembly;
(19) any person who first becomes a member of the State
Mining Board on or after the effective date of this
amendatory Act of the 97th General Assembly;
(20) any person who first becomes a member of the
Property Tax Appeal Board on or after the effective date of
this amendatory Act of the 97th General Assembly;
(21) any person who first becomes a member of the
Illinois Racing Board on or after the effective date of
this amendatory Act of the 97th General Assembly;
(22) any person who first becomes a member of the
Department of State Police Merit Board on or after the

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effective date of this amendatory Act of the 97th General
Assembly;
(23) any person who first becomes a member of the
Illinois State Toll Highway Authority on or after the
effective date of this amendatory Act of the 97th General
Assembly; or
(24) any person who first becomes a member of the
Illinois State Board of Elections on or after the effective
date of this amendatory Act of the 97th General Assembly.
(c) An individual who represents or is employed as an
officer or employee of a statewide labor organization that
represents members of this System may participate in the System
and shall be deemed an employee, provided that (1) the
individual has previously earned creditable service under this
Article, (2) the individual files with the System an
irrevocable election to become a participant within 6 months
after the effective date of this amendatory Act of the 94th
General Assembly, and (3) the individual does not receive
credit for that employment under any other provisions of this
Code. An employee under this subsection (c) is responsible for
paying to the System both (i) employee contributions based on
the actual compensation received for service with the labor
organization and (ii) employer contributions based on the
percentage of payroll certified by the board; all or any part
of these contributions may be paid on the employee's behalf or
picked up for tax purposes (if authorized under federal law) by

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the labor organization.
A person who is an employee as defined in this subsection
(c) may establish service credit for similar employment prior
to becoming an employee under this subsection by paying to the
System for that employment the contributions specified in this
subsection, plus interest at the effective rate from the date
of service to the date of payment. However, credit shall not be
granted under this subsection (c) for any such prior employment
for which the applicant received credit under any other
provision of this Code or during which the applicant was on a
leave of absence.
(Source: P.A. 95-677, eff. 10-11-07; 96-1490, eff. 1-1-11.)
(40 ILCS 5/22-101) (from Ch. 108 1/2, par. 22-101)
Sec. 22-101. Retirement Plan for Chicago Transit Authority
Employees.
(a) There shall be established and maintained by the
Authority created by the "Metropolitan Transit Authority Act",
approved April 12, 1945, as amended, (referred to in this
Section as the "Authority") a financially sound pension and
retirement system adequate to provide for all payments when due
under such established system or as modified from time to time
by ordinance of the Chicago Transit Board or collective
bargaining agreement. For this purpose, the Board must make
contributions to the established system as required under this
Section and may make any additional contributions provided for

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by Board ordinance or collective bargaining agreement. The
participating employees shall make such periodic payments to
the established system as required under this Section and may
make any additional contributions provided for by Board
ordinance or collective bargaining agreement.
Provisions shall be made by the Board for all officers,
except trustees who first become members on after the effective
date of this amendatory Act of the 97th General Assembly, and
employees of the Authority appointed pursuant to the
"Metropolitan Transit Authority Act" to become, subject to
reasonable rules and regulations, participants of the pension
or retirement system with uniform rights, privileges,
obligations and status as to the class in which such officers
and employees belong. The terms, conditions and provisions of
any pension or retirement system or of any amendment or
modification thereof affecting employees who are members of any
labor organization may be established, amended or modified by
agreement with such labor organization, provided the terms,
conditions and provisions must be consistent with this Act, the
annual funding levels for the retirement system established by
law must be met and the benefits paid to future participants in
the system may not exceed the benefit ceilings set for future
participants under this Act and the contribution levels
required by the Authority and its employees may not be less
than the contribution levels established under this Act.
(b) The Board of Trustees shall consist of 11 members

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appointed as follows: (i) 5 trustees shall be appointed by the
Chicago Transit Board; (ii) 3 trustees shall be appointed by an
organization representing the highest number of Chicago
Transit Authority participants; (iii) one trustee shall be
appointed by an organization representing the second-highest
number of Chicago Transit Authority participants; (iv) one
trustee shall be appointed by the recognized coalition
representatives of participants who are not represented by an
organization with the highest or second-highest number of
Chicago Transit Authority participants; and (v) one trustee
shall be selected by the Regional Transportation Authority
Board of Directors, and the trustee shall be a professional
fiduciary who has experience in the area of collectively
bargained pension plans. Trustees shall serve until a successor
has been appointed and qualified, or until resignation, death,
incapacity, or disqualification.
Any person appointed as a trustee of the board shall
qualify by taking an oath of office that he or she will
diligently and honestly administer the affairs of the system
and will not knowingly violate or willfully permit the
violation of any of the provisions of law applicable to the
Plan, including Sections 1-109, 1-109.1, 1-109.2, 1-110,
1-111, 1-114, and 1-115 of the Illinois Pension Code.
Each trustee shall cast individual votes, and a majority
vote shall be final and binding upon all interested parties,
provided that the Board of Trustees may require a supermajority

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vote with respect to the investment of the assets of the
Retirement Plan, and may set forth that requirement in the
Retirement Plan documents, by-laws, or rules of the Board of
Trustees. Each trustee shall have the rights, privileges,
authority, and obligations as are usual and customary for such
fiduciaries.
The Board of Trustees may cause amounts on deposit in the
Retirement Plan to be invested in those investments that are
permitted investments for the investment of moneys held under
any one or more of the pension or retirement systems of the
State, any unit of local government or school district, or any
agency or instrumentality thereof. The Board, by a vote of at
least two-thirds of the trustees, may transfer investment
management to the Illinois State Board of Investment, which is
hereby authorized to manage these investments when so requested
by the Board of Trustees.
Notwithstanding any other provision of this Article or any
law to the contrary, any person who first becomes a trustee on
or after the effective date of this Act shall not be eligible
to participate in this Retirement Plan.
(c) All individuals who were previously participants in the
Retirement Plan for Chicago Transit Authority Employees shall
remain participants, and shall receive the same benefits
established by the Retirement Plan for Chicago Transit
Authority Employees, except as provided in this amendatory Act
or by subsequent legislative enactment or amendment to the

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Retirement Plan. For Authority employees hired on or after the
effective date of this amendatory Act of the 95th General
Assembly, the Retirement Plan for Chicago Transit Authority
Employees shall be the exclusive retirement plan and such
employees shall not be eligible for any supplemental plan,
except for a deferred compensation plan funded only by employee
contributions.
For all Authority employees who are first hired on or after
the effective date of this amendatory Act of the 95th General
Assembly and are participants in the Retirement Plan for
Chicago Transit Authority Employees, the following terms,
conditions and provisions with respect to retirement shall be
applicable:
(1) Such participant shall be eligible for an unreduced
retirement allowance for life upon the attainment of age 64
with 25 years of continuous service.
(2) Such participant shall be eligible for a reduced
retirement allowance for life upon the attainment of age 55
with 10 years of continuous service.
(3) For the purpose of determining the retirement
allowance to be paid to a retiring employee, the term
"Continuous Service" as used in the Retirement Plan for
Chicago Transit Authority Employees shall also be deemed to
include all pension credit for service with any retirement
system established under Article 8 or Article 11 of this
Code, provided that the employee forfeits and relinquishes

09700HB3475ham001 - 27 - LRB097 10960 JDS 52827 a
all pension credit under Article 8 or Article 11 of this
Code, and the contribution required under this subsection
is made by the employee. The Retirement Plan's actuary
shall determine the contribution paid by the employee as an
amount equal to the normal cost of the benefit accrued, had
the service been rendered as an employee, plus interest per
annum from the time such service was rendered until the
date the payment is made.
(d) From the effective date of this amendatory Act through
December 31, 2008, all participating employees shall
contribute to the Retirement Plan in an amount not less than 6%
of compensation, and the Authority shall contribute to the
Retirement Plan in an amount not less than 12% of compensation.
(e)(1) Beginning January 1, 2009 the Authority shall make
contributions to the Retirement Plan in an amount equal to
twelve percent (12%) of compensation and participating
employees shall make contributions to the Retirement Plan in an
amount equal to six percent (6%) of compensation. These
contributions may be paid by the Authority and participating
employees on a payroll or other periodic basis, but shall in
any case be paid to the Retirement Plan at least monthly.
(2) For the period ending December 31, 2040, the amount
paid by the Authority in any year with respect to debt service
on bonds issued for the purposes of funding a contribution to
the Retirement Plan under Section 12c of the Metropolitan
Transit Authority Act, other than debt service paid with the

09700HB3475ham001 - 28 - LRB097 10960 JDS 52827 a
proceeds of bonds or notes issued by the Authority for any year
after calendar year 2008, shall be treated as a credit against
the amount of required contribution to the Retirement Plan by
the Authority under subsection (e)(1) for the following year up
to an amount not to exceed 6% of compensation paid by the
Authority in that following year.
(3) By September 15 of each year beginning in 2009 and
ending on December 31, 2039, on the basis of a report prepared
by an enrolled actuary retained by the Plan, the Board of
Trustees of the Retirement Plan shall determine the estimated
funded ratio of the total assets of the Retirement Plan to its
total actuarially determined liabilities. A report containing
that determination and the actuarial assumptions on which it is
based shall be filed with the Authority, the representatives of
its participating employees, the Auditor General of the State
of Illinois, and the Regional Transportation Authority. If the
funded ratio is projected to decline below 60% in any year
before 2040, the Board of Trustees shall also determine the
increased contribution required each year as a level percentage
of payroll over the years remaining until 2040 using the
projected unit credit actuarial cost method so the funded ratio
does not decline below 60% and include that determination in
its report. If the actual funded ratio declines below 60% in
any year prior to 2040, the Board of Trustees shall also
determine the increased contribution required each year as a
level percentage of payroll during the years after the then

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current year using the projected unit credit actuarial cost
method so the funded ratio is projected to reach at least 60%
no later than 10 years after the then current year and include
that determination in its report. Within 60 days after
receiving the report, the Auditor General shall review the
determination and the assumptions on which it is based, and if
he finds that the determination and the assumptions on which it
is based are unreasonable in the aggregate, he shall issue a
new determination of the funded ratio, the assumptions on which
it is based and the increased contribution required each year
as a level percentage of payroll over the years remaining until
2040 using the projected unit credit actuarial cost method so
the funded ratio does not decline below 60%, or, in the event
of an actual decline below 60%, so the funded ratio is
projected to reach 60% by no later than 10 years after the then
current year. If the Board of Trustees or the Auditor General
determine that an increased contribution is required to meet
the funded ratio required by the subsection, effective January
1 following the determination or 30 days after such
determination, whichever is later, one-third of the increased
contribution shall be paid by participating employees and
two-thirds by the Authority, in addition to the contributions
required by this subsection (1).
(4) For the period beginning 2040, the minimum contribution
to the Retirement Plan for each fiscal year shall be an amount
determined by the Board of Trustees of the Retirement Plan to

09700HB3475ham001 - 30 - LRB097 10960 JDS 52827 a
be sufficient to bring the total assets of the Retirement Plan
up to 90% of its total actuarial liabilities by the end of
2059. Participating employees shall be responsible for
one-third of the required contribution and the Authority shall
be responsible for two-thirds of the required contribution. In
making these determinations, the Board of Trustees shall
calculate the required contribution each year as a level
percentage of payroll over the years remaining to and including
fiscal year 2059 using the projected unit credit actuarial cost
method. A report containing that determination and the
actuarial assumptions on which it is based shall be filed by
September 15 of each year with the Authority, the
representatives of its participating employees, the Auditor
General of the State of Illinois and the Regional
Transportation Authority. If the funded ratio is projected to
fail to reach 90% by December 31, 2059, the Board of Trustees
shall also determine the increased contribution required each
year as a level percentage of payroll over the years remaining
until December 31, 2059 using the projected unit credit
actuarial cost method so the funded ratio will meet 90% by
December 31, 2059 and include that determination in its report.
Within 60 days after receiving the report, the Auditor General
shall review the determination and the assumptions on which it
is based and if he finds that the determination and the
assumptions on which it is based are unreasonable in the
aggregate, he shall issue a new determination of the funded

09700HB3475ham001 - 31 - LRB097 10960 JDS 52827 a
ratio, the assumptions on which it is based and the increased
contribution required each year as a level percentage of
payroll over the years remaining until December 31, 2059 using
the projected unit credit actuarial cost method so the funded
ratio reaches no less than 90% by December 31, 2059. If the
Board of Trustees or the Auditor General determine that an
increased contribution is required to meet the funded ratio
required by this subsection, effective January 1 following the
determination or 30 days after such determination, whichever is
later, one-third of the increased contribution shall be paid by
participating employees and two-thirds by the Authority, in
addition to the contributions required by subsection (e)(1).
(5) Beginning in 2060, the minimum contribution for each
year shall be the amount needed to maintain the total assets of
the Retirement Plan at 90% of the total actuarial liabilities
of the Plan, and the contribution shall be funded two-thirds by
the Authority and one-third by the participating employees in
accordance with this subsection.
(f) The Authority shall take the steps necessary to comply
with Section 414(h)(2) of the Internal Revenue Code of 1986, as
amended, to permit the pick-up of employee contributions under
subsections (d) and (e) on a tax-deferred basis.
(g) The Board of Trustees shall certify to the Governor,
the General Assembly, the Auditor General, the Board of the
Regional Transportation Authority, and the Authority at least
90 days prior to the end of each fiscal year the amount of the

09700HB3475ham001 - 32 - LRB097 10960 JDS 52827 a
required contributions to the retirement system for the next
retirement system fiscal year under this Section. The
certification shall include a copy of the actuarial
recommendations upon which it is based. In addition, copies of
the certification shall be sent to the Commission on Government
Forecasting and Accountability and the Mayor of Chicago.
(h)(1) As to an employee who first becomes entitled to a
retirement allowance commencing on or after November 30, 1989,
the retirement allowance shall be the amount determined in
accordance with the following formula:
(A) One percent (1%) of his "Average Annual
Compensation in the highest four (4) completed Plan Years"
for each full year of continuous service from the date of
original employment to the effective date of the Plan; plus
(B) One and seventy-five hundredths percent (1.75%) of
his "Average Annual Compensation in the highest four (4)
completed Plan Years" for each year (including fractions
thereof to completed calendar months) of continuous
service as provided for in the Retirement Plan for Chicago
Transit Authority Employees.
Provided, however that:
(2) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 1993,
the retirement allowance shall be the amount determined in
accordance with the following formula:
(A) One percent (1%) of his "Average Annual

09700HB3475ham001 - 33 - LRB097 10960 JDS 52827 a
Compensation in the highest four (4) completed Plan Years"
for each full year of continuous service from the date of
original employment to the effective date of the Plan; plus
(B) One and eighty hundredths percent (1.80%) of his
"Average Annual Compensation in the highest four (4)
completed Plan Years" for each year (including fractions
thereof to completed calendar months) of continuous
service as provided for in the Retirement Plan for Chicago
Transit Authority Employees.
Provided, however that:
(3) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 1994,
the retirement allowance shall be the amount determined in
accordance with the following formula:
(A) One percent (1%) of his "Average Annual
Compensation in the highest four (4) completed Plan Years"
for each full year of continuous service from the date of
original employment to the effective date of the Plan; plus
(B) One and eighty-five hundredths percent (1.85%) of
his "Average Annual Compensation in the highest four (4)
completed Plan Years" for each year (including fractions
thereof to completed calendar months) of continuous
service as provided for in the Retirement Plan for Chicago
Transit Authority Employees.
Provided, however that:
(4) As to an employee who first becomes entitled to a

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retirement allowance commencing on or after January 1, 2000,
the retirement allowance shall be the amount determined in
accordance with the following formula:
(A) One percent (1%) of his "Average Annual
Compensation in the highest four (4) completed Plan Years"
for each full year of continuous service from the date of
original employment to the effective date of the Plan; plus
(B) Two percent (2%) of his "Average Annual
Compensation in the highest four (4) completed Plan Years"
for each year (including fractions thereof to completed
calendar months) of continuous service as provided for in
the Retirement Plan for Chicago Transit Authority
Employees.
Provided, however that:
(5) As to an employee who first becomes entitled to a
retirement allowance commencing on or after January 1, 2001,
the retirement allowance shall be the amount determined in
accordance with the following formula:
(A) One percent (1%) of his "Average Annual
Compensation in the highest four (4) completed Plan Years"
for each full year of continuous service from the date of
original employment to the effective date of the Plan; plus
(B) Two and fifteen hundredths percent (2.15%) of his
"Average Annual Compensation in the highest four (4)
completed Plan Years" for each year (including fractions
thereof to completed calendar months) of continuous

09700HB3475ham001 - 35 - LRB097 10960 JDS 52827 a
service as provided for in the Retirement Plan for Chicago
Transit Authority Employees.
The changes made by this amendatory Act of the 95th General
Assembly, to the extent that they affect the rights or
privileges of Authority employees that are currently the
subject of collective bargaining, have been agreed to between
the authorized representatives of these employees and of the
Authority prior to enactment of this amendatory Act, as
evidenced by a Memorandum of Understanding between these
representatives that will be filed with the Secretary of State
Index Department and designated as "95-GA-C05". The General
Assembly finds and declares that those changes are consistent
with 49 U.S.C. 5333(b) (also known as Section 13(c) of the
Federal Transit Act) because of this agreement between
authorized representatives of these employees and of the
Authority, and that any future amendments to the provisions of
this amendatory Act of the 95th General Assembly, to the extent
those amendments would affect the rights and privileges of
Authority employees that are currently the subject of
collective bargaining, would be consistent with 49 U.S.C.
5333(b) if and only if those amendments were agreed to between
these authorized representatives prior to enactment.
(i) Early retirement incentive plan; funded ratio.
(1) Beginning on the effective date of this Section, no
early retirement incentive shall be offered to
participants of the Plan unless the Funded Ratio of the

09700HB3475ham001 - 36 - LRB097 10960 JDS 52827 a
Plan is at least 80% or more.
(2) For the purposes of this Section, the Funded Ratio
shall be the Adjusted Assets divided by the Actuarial
Accrued Liability developed in accordance with Statement
#25 promulgated by the Government Accounting Standards
Board and the actuarial assumptions described in the Plan.
The Adjusted Assets shall be calculated based on the
methodology described in the Plan.
(j) Nothing in this amendatory Act of the 95th General
Assembly shall impair the rights or privileges of Authority
employees under any other law.
(Source: P.A. 94-839, eff. 6-6-06; 95-708, eff. 1-18-08.)
(40 ILCS 5/22-103)
Sec. 22-103. Regional Transportation Authority and related
pension plans.
(a) As used in this Section:
"Affected pension plan" means a defined-benefit pension
plan supported in whole or in part by employer contributions
and maintained by the Regional Transportation Authority, the
Suburban Bus Division, or the Commuter Rail Division, or any
combination thereof, under the general authority of the
Regional Transportation Authority Act, including but not
limited to any such plan that has been established under or is
subject to a collective bargaining agreement or is limited to
employees covered by a collective bargaining agreement.

09700HB3475ham001 - 37 - LRB097 10960 JDS 52827 a
"Affected pension plan" does not include any pension fund or
retirement system subject to Section 22-101 of this Section.
"Authority" means the Regional Transportation Authority
created under the Regional Transportation Authority Act.
"Contributing employer" means an employer that is required
to make contributions to an affected pension plan under the
terms of that plan.
"Funding ratio" means the ratio of an affected pension
plan's assets to the present value of its actuarial
liabilities, as determined at its latest actuarial valuation in
accordance with applicable actuarial assumptions and
recommendations.
"Under-funded pension plan" or "under-funded" means an
affected pension plan that, at the time of its last actuarial
valuation, has a funding ratio of less than 90%.
(b) The contributing employers of each affected pension
plan have a general duty to make the required employer
contributions to the affected pension plan in a timely manner
in accordance with the terms of the plan. A contributing
employer must make contributions to the affected pension plan
as required under this subsection and, if applicable,
subsection (c); a contributing employer may make any additional
contributions provided for by the board of the employer or
collective bargaining agreement.
(c) In the case of an affected pension plan that is
under-funded on January 1, 2009 or becomes under-funded at any

09700HB3475ham001 - 38 - LRB097 10960 JDS 52827 a
time after that date, the contributing employers shall
contribute to the affected pension plan, in addition to all
amounts otherwise required, amounts sufficient to bring the
funding ratio of the affected pension plan up to 90% in
accordance with an amortization schedule adopted jointly by the
contributing employers and the trustee of the affected pension
plan. The amortization schedule may extend for any period up to
a maximum of 50 years and shall provide for additional employer
contributions in substantially equal annual amounts over the
selected period. If the contributing employers and the trustee
of the affected pension plan do not agree on an appropriate
period for the amortization schedule within 6 months of the
date of determination that the plan is under-funded, then the
amortization schedule shall be based on a period of 50 years.
In the case of an affected pension plan that has more than
one contributing employer, each contributing employer's share
of the total additional employer contributions required under
this subsection shall be determined: (i) in proportion to the
amounts, if any, by which the respective contributing employers
have failed to meet their contribution obligations under the
terms of the affected pension plan; or (ii) if all of the
contributing employers have met their contribution obligations
under the terms of the affected pension plan, then in the same
proportion as they are required to contribute under the terms
of that plan. In the case of an affected pension plan that has
only one contributing employer, that contributing employer is

09700HB3475ham001 - 39 - LRB097 10960 JDS 52827 a
responsible for all of the additional employer contributions
required under this subsection.
If an under-funded pension plan is determined to have
achieved a funding ratio of at least 90% during the period when
an amortization schedule is in force under this Section, the
contributing employers and the trustee of the affected pension
plan, acting jointly, may cancel the amortization schedule and
the contributing employers may cease making additional
contributions under this subsection for as long as the affected
pension plan retains a funding ratio of at least 90%.
(d) Beginning January 1, 2009, if the Authority fails to
pay to an affected pension fund within 30 days after it is due
(i) any employer contribution that it is required to make as a
contributing employer, (ii) any additional employer
contribution that it is required to pay under subsection (c),
or (iii) any payment that it is required to make under Section
4.02a or 4.02b of the Regional Transportation Authority Act,
the trustee of the affected pension fund shall promptly so
notify the Commission on Government Forecasting and
Accountability, the Mayor of Chicago, the Governor, and the
General Assembly.
(e) For purposes of determining employer contributions,
assets, and actuarial liabilities under this subsection,
contributions, assets, and liabilities relating to health care
benefits shall not be included.
(f) This amendatory Act of the 94th General Assembly does

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not affect or impair the right of any contributing employer or
its employees to collectively bargain the amount or level of
employee contributions to an affected pension plan, to the
extent that the plan includes employees subject to collective
bargaining.
(g) Notwithstanding any other provision of this Article or
any law to the contrary, a person who, on or after the
effective date of this amendatory Act of the 97th General
Assembly, first becomes a director on the Suburban Bus Board,
the Commuter Rail Board, or the Board of Directors of the
Regional Transportation Authority shall not be eligible to
participate in an affected pension plan.
(Source: P.A. 94-839, eff. 6-6-06.)
Section 10. The Illinois Municipal Code is amended by
adding Section 3.1-50-30 as follows:
(65 ILCS 5/3.1-50-30 new)
Sec. 3.1-50-30. Increases in salary; pension impact
statement. Before increasing the salary of a municipal officer,
executive, or manager:
(1) the authorities of the respective municipality who
are authorizing the increase must contact the Illinois
Municipal Retirement Fund as to the effect of that increase
in salary on the pension benefits of that participant;
(2) the Illinois Municipal Retirement Fund must

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respond with a written "Pension Impact Statement" stating
the effect of that increase in salary on the pension
benefits of that participant, and any other relevant effect
of the increase, including payment of the present value of
the increase in benefits resulting from the portion of any
increase in salary that is in excess of 6% as provided
under subsection (k) of Section 7-172, if applicable; and
(3) the authorities authorizing this increase must
sign the Pension Impact Statement, acknowledging receipt
and understanding of the effects of the increase.
Section 15. The State Mandates Act is amended by adding
Section 8.35 as follows:
(30 ILCS 805/8.35 new)
Sec. 8.35. 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 97th General Assembly.".