Bill Text: IL HB4027 | 2017-2018 | 100th General Assembly | Engrossed


Bill Title: Amends the Illinois Pension Code. In Articles 2, 14, 15, 16, and 17, requires active Tier 1 employees to elect either (i) to have automatic annual increases in retirement and survivor's annuities delayed and reduced or (ii) to maintain current benefits except for additional limits on pensionable salary; provides additional benefits to persons electing item (i). Makes funding changes, including shifting certain costs to employers under Articles 15 and 16. Restricts participation in the General Assembly Retirement System to persons who became participants before the effective date. In Articles 14, 15, and 16, requires those Systems to offer an optional accelerated benefit payment to certain members in lieu of receiving a pension. Provides separate benefits for certain persons who become participants under Article 14, 15, or 16. Requires those retirement systems to establish a defined contribution plan for certain members; in Articles 7, 8, 9, 10, 11, 12, 13, and 17, establishes similar benefits if the governing body of the unit of local government adopts those benefits. In Article 17, requires the State to contribute $215,200,000 for fiscal year 2017. Provides a continuing appropriation for the Article 17 State contribution and for certain consideration payments. Amends various Acts to make conforming changes. Provides for the transfer of certain amounts to the Pension Stabilization Fund. Amends the Illinois Educational Labor Relations Act and the Illinois Public Labor Relations Act to prohibit bargaining and interest arbitration regarding certain changes made by the amendatory Act; exempts certain existing agreements. Makes other changes. Includes severability provisions. Effective immediately.

Spectrum: Partisan Bill (Republican 26-0)

Status: (Introduced) 2017-05-22 - Added Co-Sponsor Rep. Thomas M. Bennett [HB4027 Detail]

Download: Illinois-2017-HB4027-Engrossed.html



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1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Public Labor Relations Act is
5amended by changing Sections 10 and 15 and by adding Section
67.6 as follows:
7 (5 ILCS 315/7.6 new)
8 Sec. 7.6. No collective bargaining or interest arbitration
9regarding certain changes to the Illinois Pension Code.
10 (a) Notwithstanding any other provision of this Act,
11employers shall not be required to bargain over matters
12affected by the changes, the impact of the changes, and the
13implementation of the changes to Article 14, 15, 16, or 17 of
14the Illinois Pension Code made by the addition of Section
1514-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois
16Pension Code, which are deemed to be prohibited subjects of
17bargaining. Notwithstanding any provision of this Act, the
18changes, impact of the changes, or implementation of the
19changes to Article 14, 15, 16, or 17 of the Illinois Pension
20Code made by the addition of Section 14-106.5, 15-132.9,
2116-122.9, or 17-115.5 of the Illinois Pension Code shall not be
22subject to interest arbitration or any award issued pursuant to
23interest arbitration. The provisions of this Section shall not

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1apply to an employment contract or collective bargaining
2agreement that is in effect on the effective date of this
3amendatory Act of the 100th General Assembly. However, any such
4contract or agreement that is modified, amended, renewed, or
5superseded after the effective date of this amendatory Act of
6the 100th General Assembly shall be subject to the provisions
7of this Section. Each employer with active employees
8participating in a retirement system or pension fund
9established under Article 14, 15, 16, or 17 of the Illinois
10Pension Code shall comply with and be subject to the provisions
11of this amendatory Act of the 100th General Assembly. The
12provisions of this Section shall not apply to the ability of
13any employer and employee representative to bargain
14collectively with regard to the pick up of employee
15contributions pursuant to Section 14-133.1, 15-157.1,
1616-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.
17 (b) Subject to and except for the matters set forth in
18subsection (a) of this Section that are deemed prohibited
19subjects of bargaining, nothing in this Section shall be
20construed as otherwise limiting any of the obligations and
21requirements applicable to employers under any of the
22provisions of this Act, including, but not limited to, the
23requirement to bargain collectively with regard to policy
24matters directly affecting wages, hours, and terms and
25conditions of employment as well as the impact thereon upon
26request by employee representatives. Subject to and except for

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1the matters set forth in subsection (a) of this Section that
2are deemed prohibited subjects of bargaining, nothing in this
3Section shall be construed as otherwise limiting any of the
4rights of employees or employee representatives under the
5provisions of this Act.
6 (c) In case of any conflict between this Section and any
7other provisions of this Act or any other law, the provisions
8of this Section shall control.
9 (5 ILCS 315/10) (from Ch. 48, par. 1610)
10 Sec. 10. Unfair labor practices.
11 (a) It shall be an unfair labor practice for an employer or
12its agents:
13 (1) to interfere with, restrain or coerce public
14 employees in the exercise of the rights guaranteed in this
15 Act or to dominate or interfere with the formation,
16 existence or administration of any labor organization or
17 contribute financial or other support to it; provided, an
18 employer shall not be prohibited from permitting employees
19 to confer with him during working hours without loss of
20 time or pay;
21 (2) to discriminate in regard to hire or tenure of
22 employment or any term or condition of employment in order
23 to encourage or discourage membership in or other support
24 for any labor organization. Nothing in this Act or any
25 other law precludes a public employer from making an

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1 agreement with a labor organization to require as a
2 condition of employment the payment of a fair share under
3 paragraph (e) of Section 6;
4 (3) to discharge or otherwise discriminate against a
5 public employee because he has signed or filed an
6 affidavit, petition or charge or provided any information
7 or testimony under this Act;
8 (4) subject to and except as provided in Section 7.6,
9 to refuse to bargain collectively in good faith with a
10 labor organization which is the exclusive representative
11 of public employees in an appropriate unit, including, but
12 not limited to, the discussing of grievances with the
13 exclusive representative; however, no actions of the
14 employer taken to implement or otherwise comply with the
15 provisions of subsection (a) of Section 7.6 shall
16 constitute or give rise to an unfair labor practice under
17 this Act;
18 (5) to violate any of the rules and regulations
19 established by the Board with jurisdiction over them
20 relating to the conduct of representation elections or the
21 conduct affecting the representation elections;
22 (6) to expend or cause the expenditure of public funds
23 to any external agent, individual, firm, agency,
24 partnership or association in any attempt to influence the
25 outcome of representational elections held pursuant to
26 Section 9 of this Act; provided, that nothing in this

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1 subsection shall be construed to limit an employer's right
2 to internally communicate with its employees as provided in
3 subsection (c) of this Section, to be represented on any
4 matter pertaining to unit determinations, unfair labor
5 practice charges or pre-election conferences in any formal
6 or informal proceeding before the Board, or to seek or
7 obtain advice from legal counsel. Nothing in this paragraph
8 shall be construed to prohibit an employer from expending
9 or causing the expenditure of public funds on, or seeking
10 or obtaining services or advice from, any organization,
11 group, or association established by and including public
12 or educational employers, whether covered by this Act, the
13 Illinois Educational Labor Relations Act or the public
14 employment labor relations law of any other state or the
15 federal government, provided that such services or advice
16 are generally available to the membership of the
17 organization, group or association, and are not offered
18 solely in an attempt to influence the outcome of a
19 particular representational election; or
20 (7) to refuse to reduce a collective bargaining
21 agreement to writing or to refuse to sign such agreement.
22 (b) It shall be an unfair labor practice for a labor
23organization or its agents:
24 (1) to restrain or coerce public employees in the
25 exercise of the rights guaranteed in this Act, provided,
26 (i) that this paragraph shall not impair the right of a

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1 labor organization to prescribe its own rules with respect
2 to the acquisition or retention of membership therein or
3 the determination of fair share payments and (ii) that a
4 labor organization or its agents shall commit an unfair
5 labor practice under this paragraph in duty of fair
6 representation cases only by intentional misconduct in
7 representing employees under this Act;
8 (2) to restrain or coerce a public employer in the
9 selection of his representatives for the purposes of
10 collective bargaining or the settlement of grievances; or
11 (3) to cause, or attempt to cause, an employer to
12 discriminate against an employee in violation of
13 subsection (a)(2);
14 (4) to refuse to bargain collectively in good faith
15 with a public employer, if it has been designated in
16 accordance with the provisions of this Act as the exclusive
17 representative of public employees in an appropriate unit;
18 (5) to violate any of the rules and regulations
19 established by the boards with jurisdiction over them
20 relating to the conduct of representation elections or the
21 conduct affecting the representation elections;
22 (6) to discriminate against any employee because he has
23 signed or filed an affidavit, petition or charge or
24 provided any information or testimony under this Act;
25 (7) to picket or cause to be picketed, or threaten to
26 picket or cause to be picketed, any public employer where

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1 an object thereof is forcing or requiring an employer to
2 recognize or bargain with a labor organization of the
3 representative of its employees, or forcing or requiring
4 the employees of an employer to accept or select such labor
5 organization as their collective bargaining
6 representative, unless such labor organization is
7 currently certified as the representative of such
8 employees:
9 (A) where the employer has lawfully recognized in
10 accordance with this Act any labor organization and a
11 question concerning representation may not
12 appropriately be raised under Section 9 of this Act;
13 (B) where within the preceding 12 months a valid
14 election under Section 9 of this Act has been
15 conducted; or
16 (C) where such picketing has been conducted
17 without a petition under Section 9 being filed within a
18 reasonable period of time not to exceed 30 days from
19 the commencement of such picketing; provided that when
20 such a petition has been filed the Board shall
21 forthwith, without regard to the provisions of
22 subsection (a) of Section 9 or the absence of a showing
23 of a substantial interest on the part of the labor
24 organization, direct an election in such unit as the
25 Board finds to be appropriate and shall certify the
26 results thereof; provided further, that nothing in

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1 this subparagraph shall be construed to prohibit any
2 picketing or other publicity for the purpose of
3 truthfully advising the public that an employer does
4 not employ members of, or have a contract with, a labor
5 organization unless an effect of such picketing is to
6 induce any individual employed by any other person in
7 the course of his employment, not to pick up, deliver,
8 or transport any goods or not to perform any services;
9 or
10 (8) to refuse to reduce a collective bargaining
11 agreement to writing or to refuse to sign such agreement.
12 (c) The expressing of any views, argument, or opinion or
13the dissemination thereof, whether in written, printed,
14graphic, or visual form, shall not constitute or be evidence of
15an unfair labor practice under any of the provisions of this
16Act, if such expression contains no threat of reprisal or force
17or promise of benefit.
18(Source: P.A. 86-412; 87-736.)
19 (5 ILCS 315/15) (from Ch. 48, par. 1615)
20 (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22 Sec. 15. Act Takes Precedence.
23 (a) In case of any conflict between the provisions of this
24Act and any other law (other than Section 5 of the State
25Employees Group Insurance Act of 1971 and other than the

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1changes made to the Illinois Pension Code by this amendatory
2Act of the 96th General Assembly), executive order or
3administrative regulation relating to wages, hours and
4conditions of employment and employment relations, the
5provisions of this Act or any collective bargaining agreement
6negotiated thereunder shall prevail and control. Nothing in
7this Act shall be construed to replace or diminish the rights
8of employees established by Sections 28 and 28a of the
9Metropolitan Transit Authority Act, Sections 2.15 through 2.19
10of the Regional Transportation Authority Act. The provisions of
11this Act are subject to Section 5 of the State Employees Group
12Insurance Act of 1971. Nothing in this Act shall be construed
13to replace the necessity of complaints against a sworn peace
14officer, as defined in Section 2(a) of the Uniform Peace
15Officer Disciplinary Act, from having a complaint supported by
16a sworn affidavit.
17 (b) Except as provided in subsection (a) above, any
18collective bargaining contract between a public employer and a
19labor organization executed pursuant to this Act shall
20supersede any contrary statutes, charters, ordinances, rules
21or regulations relating to wages, hours and conditions of
22employment and employment relations adopted by the public
23employer or its agents. Any collective bargaining agreement
24entered into prior to the effective date of this Act shall
25remain in full force during its duration.
26 (c) It is the public policy of this State, pursuant to

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1paragraphs (h) and (i) of Section 6 of Article VII of the
2Illinois Constitution, that the provisions of this Act are the
3exclusive exercise by the State of powers and functions which
4might otherwise be exercised by home rule units. Such powers
5and functions may not be exercised concurrently, either
6directly or indirectly, by any unit of local government,
7including any home rule unit, except as otherwise authorized by
8this Act.
9 (d) Notwithstanding any other provision of law, no
10collective bargaining agreement entered into, renewed, or
11extended after the effective date of this amendatory Act of the
12100th General Assembly or any arbitration award issued under
13such collective bargaining agreement may violate or conflict
14with the changes made by this amendatory Act of the 100th
15General Assembly.
16(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
17 Section 10. The State Employees Group Insurance Act of 1971
18is amended by changing Sections 3 and 10 as follows:
19 (5 ILCS 375/3) (from Ch. 127, par. 523)
20 Sec. 3. Definitions. Unless the context otherwise
21requires, the following words and phrases as used in this Act
22shall have the following meanings. The Department may define
23these and other words and phrases separately for the purpose of
24implementing specific programs providing benefits under this

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1Act.
2 (a) "Administrative service organization" means any
3person, firm or corporation experienced in the handling of
4claims which is fully qualified, financially sound and capable
5of meeting the service requirements of a contract of
6administration executed with the Department.
7 (b) "Annuitant" means (1) an employee who retires, or has
8retired, on or after January 1, 1966 on an immediate annuity
9under the provisions of Articles 2, 14 (including an employee
10who has elected to receive an alternative retirement
11cancellation payment under Section 14-108.5 of the Illinois
12Pension Code in lieu of an annuity or who meets the criteria
13for retirement, but in lieu of receiving an annuity under that
14Article has elected to receive an accelerated pension benefit
15payment under Section 14-147.5 of that Article), 15 (including
16an employee who has retired under the optional retirement
17program established under Section 15-158.2 or who meets the
18criteria for retirement but in lieu of receiving an annuity
19under that Article has elected to receive an accelerated
20pension benefit payment under Section 15-185.5 of the Article),
21paragraphs (2), (3), or (5) of Section 16-106 (including an
22employee who meets the criteria for retirement, but in lieu of
23receiving an annuity under that Article has elected to receive
24an accelerated pension benefit payment under Section 16-190.5
25of the Illinois Pension Code), or Article 18 of the Illinois
26Pension Code; (2) any person who was receiving group insurance

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1coverage under this Act as of March 31, 1978 by reason of his
2status as an annuitant, even though the annuity in relation to
3which such coverage was provided is a proportional annuity
4based on less than the minimum period of service required for a
5retirement annuity in the system involved; (3) any person not
6otherwise covered by this Act who has retired as a
7participating member under Article 2 of the Illinois Pension
8Code but is ineligible for the retirement annuity under Section
92-119 of the Illinois Pension Code; (4) the spouse of any
10person who is receiving a retirement annuity under Article 18
11of the Illinois Pension Code and who is covered under a group
12health insurance program sponsored by a governmental employer
13other than the State of Illinois and who has irrevocably
14elected to waive his or her coverage under this Act and to have
15his or her spouse considered as the "annuitant" under this Act
16and not as a "dependent"; or (5) an employee who retires, or
17has retired, from a qualified position, as determined according
18to rules promulgated by the Director, under a qualified local
19government, a qualified rehabilitation facility, a qualified
20domestic violence shelter or service, or a qualified child
21advocacy center. (For definition of "retired employee", see (p)
22post).
23 (b-5) (Blank).
24 (b-6) (Blank).
25 (b-7) (Blank).
26 (c) "Carrier" means (1) an insurance company, a corporation

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1organized under the Limited Health Service Organization Act or
2the Voluntary Health Services Plan Act, a partnership, or other
3nongovernmental organization, which is authorized to do group
4life or group health insurance business in Illinois, or (2) the
5State of Illinois as a self-insurer.
6 (d) "Compensation" means salary or wages payable on a
7regular payroll by the State Treasurer on a warrant of the
8State Comptroller out of any State, trust or federal fund, or
9by the Governor of the State through a disbursing officer of
10the State out of a trust or out of federal funds, or by any
11Department out of State, trust, federal or other funds held by
12the State Treasurer or the Department, to any person for
13personal services currently performed, and ordinary or
14accidental disability benefits under Articles 2, 14, 15
15(including ordinary or accidental disability benefits under
16the optional retirement program established under Section
1715-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
18Article 18 of the Illinois Pension Code, for disability
19incurred after January 1, 1966, or benefits payable under the
20Workers' Compensation or Occupational Diseases Act or benefits
21payable under a sick pay plan established in accordance with
22Section 36 of the State Finance Act. "Compensation" also means
23salary or wages paid to an employee of any qualified local
24government, qualified rehabilitation facility, qualified
25domestic violence shelter or service, or qualified child
26advocacy center.

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1 (e) "Commission" means the State Employees Group Insurance
2Advisory Commission authorized by this Act. Commencing July 1,
31984, "Commission" as used in this Act means the Commission on
4Government Forecasting and Accountability as established by
5the Legislative Commission Reorganization Act of 1984.
6 (f) "Contributory", when referred to as contributory
7coverage, shall mean optional coverages or benefits elected by
8the member toward the cost of which such member makes
9contribution, or which are funded in whole or in part through
10the acceptance of a reduction in earnings or the foregoing of
11an increase in earnings by an employee, as distinguished from
12noncontributory coverage or benefits which are paid entirely by
13the State of Illinois without reduction of the member's salary.
14 (g) "Department" means any department, institution, board,
15commission, officer, court or any agency of the State
16government receiving appropriations and having power to
17certify payrolls to the Comptroller authorizing payments of
18salary and wages against such appropriations as are made by the
19General Assembly from any State fund, or against trust funds
20held by the State Treasurer and includes boards of trustees of
21the retirement systems created by Articles 2, 14, 15, 16 and 18
22of the Illinois Pension Code. "Department" also includes the
23Illinois Comprehensive Health Insurance Board, the Board of
24Examiners established under the Illinois Public Accounting
25Act, and the Illinois Finance Authority.
26 (h) "Dependent", when the term is used in the context of

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1the health and life plan, means a member's spouse and any child
2(1) from birth to age 26 including an adopted child, a child
3who lives with the member from the time of the filing of a
4petition for adoption until entry of an order of adoption, a
5stepchild or adjudicated child, or a child who lives with the
6member if such member is a court appointed guardian of the
7child or (2) age 19 or over who has a mental or physical
8disability from a cause originating prior to the age of 19 (age
926 if enrolled as an adult child dependent). For the health
10plan only, the term "dependent" also includes (1) any person
11enrolled prior to the effective date of this Section who is
12dependent upon the member to the extent that the member may
13claim such person as a dependent for income tax deduction
14purposes and (2) any person who has received after June 30,
152000 an organ transplant and who is financially dependent upon
16the member and eligible to be claimed as a dependent for income
17tax purposes. A member requesting to cover any dependent must
18provide documentation as requested by the Department of Central
19Management Services and file with the Department any and all
20forms required by the Department.
21 (i) "Director" means the Director of the Illinois
22Department of Central Management Services.
23 (j) "Eligibility period" means the period of time a member
24has to elect enrollment in programs or to select benefits
25without regard to age, sex or health.
26 (k) "Employee" means and includes each officer or employee

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1in the service of a department who (1) receives his
2compensation for service rendered to the department on a
3warrant issued pursuant to a payroll certified by a department
4or on a warrant or check issued and drawn by a department upon
5a trust, federal or other fund or on a warrant issued pursuant
6to a payroll certified by an elected or duly appointed officer
7of the State or who receives payment of the performance of
8personal services on a warrant issued pursuant to a payroll
9certified by a Department and drawn by the Comptroller upon the
10State Treasurer against appropriations made by the General
11Assembly from any fund or against trust funds held by the State
12Treasurer, and (2) is employed full-time or part-time in a
13position normally requiring actual performance of duty during
14not less than 1/2 of a normal work period, as established by
15the Director in cooperation with each department, except that
16persons elected by popular vote will be considered employees
17during the entire term for which they are elected regardless of
18hours devoted to the service of the State, and (3) except that
19"employee" does not include any person who is not eligible by
20reason of such person's employment to participate in one of the
21State retirement systems under Articles 2, 14, 15 (either the
22regular Article 15 system or the optional retirement program
23established under Section 15-158.2) or 18, or under paragraph
24(2), (3), or (5) of Section 16-106, of the Illinois Pension
25Code, but such term does include persons who are employed
26during the 6 month qualifying period under Article 14 of the

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1Illinois Pension Code. Such term also includes any person who
2(1) after January 1, 1966, is receiving ordinary or accidental
3disability benefits under Articles 2, 14, 15 (including
4ordinary or accidental disability benefits under the optional
5retirement program established under Section 15-158.2),
6paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
7the Illinois Pension Code, for disability incurred after
8January 1, 1966, (2) receives total permanent or total
9temporary disability under the Workers' Compensation Act or
10Occupational Disease Act as a result of injuries sustained or
11illness contracted in the course of employment with the State
12of Illinois, or (3) is not otherwise covered under this Act and
13has retired as a participating member under Article 2 of the
14Illinois Pension Code but is ineligible for the retirement
15annuity under Section 2-119 of the Illinois Pension Code.
16However, a person who satisfies the criteria of the foregoing
17definition of "employee" except that such person is made
18ineligible to participate in the State Universities Retirement
19System by clause (4) of subsection (a) of Section 15-107 of the
20Illinois Pension Code is also an "employee" for the purposes of
21this Act. "Employee" also includes any person receiving or
22eligible for benefits under a sick pay plan established in
23accordance with Section 36 of the State Finance Act. "Employee"
24also includes (i) each officer or employee in the service of a
25qualified local government, including persons appointed as
26trustees of sanitary districts regardless of hours devoted to

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1the service of the sanitary district, (ii) each employee in the
2service of a qualified rehabilitation facility, (iii) each
3full-time employee in the service of a qualified domestic
4violence shelter or service, and (iv) each full-time employee
5in the service of a qualified child advocacy center, as
6determined according to rules promulgated by the Director.
7 (l) "Member" means an employee, annuitant, retired
8employee or survivor. In the case of an annuitant or retired
9employee who first becomes an annuitant or retired employee on
10or after the effective date of this amendatory Act of the 97th
11General Assembly, the individual must meet the minimum vesting
12requirements of the applicable retirement system in order to be
13eligible for group insurance benefits under that system. In the
14case of a survivor who first becomes a survivor on or after the
15effective date of this amendatory Act of the 97th General
16Assembly, the deceased employee, annuitant, or retired
17employee upon whom the annuity is based must have been eligible
18to participate in the group insurance system under the
19applicable retirement system in order for the survivor to be
20eligible for group insurance benefits under that system.
21 (m) "Optional coverages or benefits" means those coverages
22or benefits available to the member on his or her voluntary
23election, and at his or her own expense.
24 (n) "Program" means the group life insurance, health
25benefits and other employee benefits designed and contracted
26for by the Director under this Act.

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1 (o) "Health plan" means a health benefits program offered
2by the State of Illinois for persons eligible for the plan.
3 (p) "Retired employee" means any person who would be an
4annuitant as that term is defined herein but for the fact that
5such person retired prior to January 1, 1966. Such term also
6includes any person formerly employed by the University of
7Illinois in the Cooperative Extension Service who would be an
8annuitant but for the fact that such person was made ineligible
9to participate in the State Universities Retirement System by
10clause (4) of subsection (a) of Section 15-107 of the Illinois
11Pension Code.
12 (q) "Survivor" means a person receiving an annuity as a
13survivor of an employee or of an annuitant. "Survivor" also
14includes: (1) the surviving dependent of a person who satisfies
15the definition of "employee" except that such person is made
16ineligible to participate in the State Universities Retirement
17System by clause (4) of subsection (a) of Section 15-107 of the
18Illinois Pension Code; (2) the surviving dependent of any
19person formerly employed by the University of Illinois in the
20Cooperative Extension Service who would be an annuitant except
21for the fact that such person was made ineligible to
22participate in the State Universities Retirement System by
23clause (4) of subsection (a) of Section 15-107 of the Illinois
24Pension Code; and (3) the surviving dependent of a person who
25was an annuitant under this Act by virtue of receiving an
26alternative retirement cancellation payment under Section

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114-108.5 of the Illinois Pension Code.
2 (q-2) "SERS" means the State Employees' Retirement System
3of Illinois, created under Article 14 of the Illinois Pension
4Code.
5 (q-3) "SURS" means the State Universities Retirement
6System, created under Article 15 of the Illinois Pension Code.
7 (q-4) "TRS" means the Teachers' Retirement System of the
8State of Illinois, created under Article 16 of the Illinois
9Pension Code.
10 (q-5) (Blank).
11 (q-6) (Blank).
12 (q-7) (Blank).
13 (r) "Medical services" means the services provided within
14the scope of their licenses by practitioners in all categories
15licensed under the Medical Practice Act of 1987.
16 (s) "Unit of local government" means any county,
17municipality, township, school district (including a
18combination of school districts under the Intergovernmental
19Cooperation Act), special district or other unit, designated as
20a unit of local government by law, which exercises limited
21governmental powers or powers in respect to limited
22governmental subjects, any not-for-profit association with a
23membership that primarily includes townships and township
24officials, that has duties that include provision of research
25service, dissemination of information, and other acts for the
26purpose of improving township government, and that is funded

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1wholly or partly in accordance with Section 85-15 of the
2Township Code; any not-for-profit corporation or association,
3with a membership consisting primarily of municipalities, that
4operates its own utility system, and provides research,
5training, dissemination of information, or other acts to
6promote cooperation between and among municipalities that
7provide utility services and for the advancement of the goals
8and purposes of its membership; the Southern Illinois
9Collegiate Common Market, which is a consortium of higher
10education institutions in Southern Illinois; the Illinois
11Association of Park Districts; and any hospital provider that
12is owned by a county that has 100 or fewer hospital beds and
13has not already joined the program. "Qualified local
14government" means a unit of local government approved by the
15Director and participating in a program created under
16subsection (i) of Section 10 of this Act.
17 (t) "Qualified rehabilitation facility" means any
18not-for-profit organization that is accredited by the
19Commission on Accreditation of Rehabilitation Facilities or
20certified by the Department of Human Services (as successor to
21the Department of Mental Health and Developmental
22Disabilities) to provide services to persons with disabilities
23and which receives funds from the State of Illinois for
24providing those services, approved by the Director and
25participating in a program created under subsection (j) of
26Section 10 of this Act.

HB4027 Engrossed- 22 -LRB100 12038 EFG 24080 b
1 (u) "Qualified domestic violence shelter or service" means
2any Illinois domestic violence shelter or service and its
3administrative offices funded by the Department of Human
4Services (as successor to the Illinois Department of Public
5Aid), approved by the Director and participating in a program
6created under subsection (k) of Section 10.
7 (v) "TRS benefit recipient" means a person who:
8 (1) is not a "member" as defined in this Section; and
9 (2) is receiving a monthly benefit or retirement
10 annuity under Article 16 of the Illinois Pension Code; and
11 (3) either (i) has at least 8 years of creditable
12 service under Article 16 of the Illinois Pension Code, or
13 (ii) was enrolled in the health insurance program offered
14 under that Article on January 1, 1996, or (iii) is the
15 survivor of a benefit recipient who had at least 8 years of
16 creditable service under Article 16 of the Illinois Pension
17 Code or was enrolled in the health insurance program
18 offered under that Article on the effective date of this
19 amendatory Act of 1995, or (iv) is a recipient or survivor
20 of a recipient of a disability benefit under Article 16 of
21 the Illinois Pension Code.
22 (w) "TRS dependent beneficiary" means a person who:
23 (1) is not a "member" or "dependent" as defined in this
24 Section; and
25 (2) is a TRS benefit recipient's: (A) spouse, (B)
26 dependent parent who is receiving at least half of his or

HB4027 Engrossed- 23 -LRB100 12038 EFG 24080 b
1 her support from the TRS benefit recipient, or (C) natural,
2 step, adjudicated, or adopted child who is (i) under age
3 26, (ii) was, on January 1, 1996, participating as a
4 dependent beneficiary in the health insurance program
5 offered under Article 16 of the Illinois Pension Code, or
6 (iii) age 19 or over who has a mental or physical
7 disability from a cause originating prior to the age of 19
8 (age 26 if enrolled as an adult child).
9 "TRS dependent beneficiary" does not include, as indicated
10under paragraph (2) of this subsection (w), a dependent of the
11survivor of a TRS benefit recipient who first becomes a
12dependent of a survivor of a TRS benefit recipient on or after
13the effective date of this amendatory Act of the 97th General
14Assembly unless that dependent would have been eligible for
15coverage as a dependent of the deceased TRS benefit recipient
16upon whom the survivor benefit is based.
17 (x) "Military leave" refers to individuals in basic
18training for reserves, special/advanced training, annual
19training, emergency call up, activation by the President of the
20United States, or any other training or duty in service to the
21United States Armed Forces.
22 (y) (Blank).
23 (z) "Community college benefit recipient" means a person
24who:
25 (1) is not a "member" as defined in this Section; and
26 (2) is receiving a monthly survivor's annuity or

HB4027 Engrossed- 24 -LRB100 12038 EFG 24080 b
1 retirement annuity under Article 15 of the Illinois Pension
2 Code; and
3 (3) either (i) was a full-time employee of a community
4 college district or an association of community college
5 boards created under the Public Community College Act
6 (other than an employee whose last employer under Article
7 15 of the Illinois Pension Code was a community college
8 district subject to Article VII of the Public Community
9 College Act) and was eligible to participate in a group
10 health benefit plan as an employee during the time of
11 employment with a community college district (other than a
12 community college district subject to Article VII of the
13 Public Community College Act) or an association of
14 community college boards, or (ii) is the survivor of a
15 person described in item (i).
16 (aa) "Community college dependent beneficiary" means a
17person who:
18 (1) is not a "member" or "dependent" as defined in this
19 Section; and
20 (2) is a community college benefit recipient's: (A)
21 spouse, (B) dependent parent who is receiving at least half
22 of his or her support from the community college benefit
23 recipient, or (C) natural, step, adjudicated, or adopted
24 child who is (i) under age 26, or (ii) age 19 or over and
25 has a mental or physical disability from a cause
26 originating prior to the age of 19 (age 26 if enrolled as

HB4027 Engrossed- 25 -LRB100 12038 EFG 24080 b
1 an adult child).
2 "Community college dependent beneficiary" does not
3include, as indicated under paragraph (2) of this subsection
4(aa), a dependent of the survivor of a community college
5benefit recipient who first becomes a dependent of a survivor
6of a community college benefit recipient on or after the
7effective date of this amendatory Act of the 97th General
8Assembly unless that dependent would have been eligible for
9coverage as a dependent of the deceased community college
10benefit recipient upon whom the survivor annuity is based.
11 (bb) "Qualified child advocacy center" means any Illinois
12child advocacy center and its administrative offices funded by
13the Department of Children and Family Services, as defined by
14the Children's Advocacy Center Act (55 ILCS 80/), approved by
15the Director and participating in a program created under
16subsection (n) of Section 10.
17(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
18 (5 ILCS 375/10) (from Ch. 127, par. 530)
19 Sec. 10. Contributions by the State and members.
20 (a) The State shall pay the cost of basic non-contributory
21group life insurance and, subject to member paid contributions
22set by the Department or required by this Section and except as
23provided in this Section, the basic program of group health
24benefits on each eligible member, except a member, not
25otherwise covered by this Act, who has retired as a

HB4027 Engrossed- 26 -LRB100 12038 EFG 24080 b
1participating member under Article 2 of the Illinois Pension
2Code but is ineligible for the retirement annuity under Section
32-119 of the Illinois Pension Code, and part of each eligible
4member's and retired member's premiums for health insurance
5coverage for enrolled dependents as provided by Section 9. The
6State shall pay the cost of the basic program of group health
7benefits only after benefits are reduced by the amount of
8benefits covered by Medicare for all members and dependents who
9are eligible for benefits under Social Security or the Railroad
10Retirement system or who had sufficient Medicare-covered
11government employment, except that such reduction in benefits
12shall apply only to those members and dependents who (1) first
13become eligible for such Medicare coverage on or after July 1,
141992; or (2) are Medicare-eligible members or dependents of a
15local government unit which began participation in the program
16on or after July 1, 1992; or (3) remain eligible for, but no
17longer receive Medicare coverage which they had been receiving
18on or after July 1, 1992. The Department may determine the
19aggregate level of the State's contribution on the basis of
20actual cost of medical services adjusted for age, sex or
21geographic or other demographic characteristics which affect
22the costs of such programs.
23 The cost of participation in the basic program of group
24health benefits for the dependent or survivor of a living or
25deceased retired employee who was formerly employed by the
26University of Illinois in the Cooperative Extension Service and

HB4027 Engrossed- 27 -LRB100 12038 EFG 24080 b
1would be an annuitant but for the fact that he or she was made
2ineligible to participate in the State Universities Retirement
3System by clause (4) of subsection (a) of Section 15-107 of the
4Illinois Pension Code shall not be greater than the cost of
5participation that would otherwise apply to that dependent or
6survivor if he or she were the dependent or survivor of an
7annuitant under the State Universities Retirement System.
8 (a-1) (Blank).
9 (a-2) (Blank).
10 (a-3) (Blank).
11 (a-4) (Blank).
12 (a-5) (Blank).
13 (a-6) (Blank).
14 (a-7) (Blank).
15 (a-8) Any annuitant, survivor, or retired employee may
16waive or terminate coverage in the program of group health
17benefits. Any such annuitant, survivor, or retired employee who
18has waived or terminated coverage may enroll or re-enroll in
19the program of group health benefits only during the annual
20benefit choice period, as determined by the Director; except
21that in the event of termination of coverage due to nonpayment
22of premiums, the annuitant, survivor, or retired employee may
23not re-enroll in the program.
24 (a-8.5) Beginning on the effective date of this amendatory
25Act of the 97th General Assembly, the Director of Central
26Management Services shall, on an annual basis, determine the

HB4027 Engrossed- 28 -LRB100 12038 EFG 24080 b
1amount that the State shall contribute toward the basic program
2of group health benefits on behalf of annuitants (including
3individuals who (i) participated in the General Assembly
4Retirement System, the State Employees' Retirement System of
5Illinois, the State Universities Retirement System, the
6Teachers' Retirement System of the State of Illinois, or the
7Judges Retirement System of Illinois and (ii) qualify as
8annuitants under subsection (b) of Section 3 of this Act),
9survivors (including individuals who (i) receive an annuity as
10a survivor of an individual who participated in the General
11Assembly Retirement System, the State Employees' Retirement
12System of Illinois, the State Universities Retirement System,
13the Teachers' Retirement System of the State of Illinois, or
14the Judges Retirement System of Illinois and (ii) qualify as
15survivors under subsection (q) of Section 3 of this Act), and
16retired employees (as defined in subsection (p) of Section 3 of
17this Act). The remainder of the cost of coverage for each
18annuitant, survivor, or retired employee, as determined by the
19Director of Central Management Services, shall be the
20responsibility of that annuitant, survivor, or retired
21employee.
22 Contributions required of annuitants, survivors, and
23retired employees shall be the same for all retirement systems
24and shall also be based on whether an individual has made an
25election under Section 15-135.1 of the Illinois Pension Code.
26Contributions may be based on annuitants', survivors', or

HB4027 Engrossed- 29 -LRB100 12038 EFG 24080 b
1retired employees' Medicare eligibility, but may not be based
2on Social Security eligibility.
3 (a-9) No later than May 1 of each calendar year, the
4Director of Central Management Services shall certify in
5writing to the Executive Secretary of the State Employees'
6Retirement System of Illinois the amounts of the Medicare
7supplement health care premiums and the amounts of the health
8care premiums for all other retirees who are not Medicare
9eligible.
10 A separate calculation of the premiums based upon the
11actual cost of each health care plan shall be so certified.
12 The Director of Central Management Services shall provide
13to the Executive Secretary of the State Employees' Retirement
14System of Illinois such information, statistics, and other data
15as he or she may require to review the premium amounts
16certified by the Director of Central Management Services.
17 The Department of Central Management Services, or any
18successor agency designated to procure healthcare contracts
19pursuant to this Act, is authorized to establish funds,
20separate accounts provided by any bank or banks as defined by
21the Illinois Banking Act, or separate accounts provided by any
22savings and loan association or associations as defined by the
23Illinois Savings and Loan Act of 1985 to be held by the
24Director, outside the State treasury, for the purpose of
25receiving the transfer of moneys from the Local Government
26Health Insurance Reserve Fund. The Department may promulgate

HB4027 Engrossed- 30 -LRB100 12038 EFG 24080 b
1rules further defining the methodology for the transfers. Any
2interest earned by moneys in the funds or accounts shall inure
3to the Local Government Health Insurance Reserve Fund. The
4transferred moneys, and interest accrued thereon, shall be used
5exclusively for transfers to administrative service
6organizations or their financial institutions for payments of
7claims to claimants and providers under the self-insurance
8health plan. The transferred moneys, and interest accrued
9thereon, shall not be used for any other purpose including, but
10not limited to, reimbursement of administration fees due the
11administrative service organization pursuant to its contract
12or contracts with the Department.
13 (a-10) To the extent that participation, benefits, or
14premiums under this Act are based on a person's service credit
15under an Article of the Illinois Pension Code, service credit
16terminated in exchange for an accelerated pension benefit
17payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
18Code shall be included in determining a person's service credit
19for the purposes of this Act.
20 (b) State employees who become eligible for this program on
21or after January 1, 1980 in positions normally requiring actual
22performance of duty not less than 1/2 of a normal work period
23but not equal to that of a normal work period, shall be given
24the option of participating in the available program. If the
25employee elects coverage, the State shall contribute on behalf
26of such employee to the cost of the employee's benefit and any

HB4027 Engrossed- 31 -LRB100 12038 EFG 24080 b
1applicable dependent supplement, that sum which bears the same
2percentage as that percentage of time the employee regularly
3works when compared to normal work period.
4 (c) The basic non-contributory coverage from the basic
5program of group health benefits shall be continued for each
6employee not in pay status or on active service by reason of
7(1) leave of absence due to illness or injury, (2) authorized
8educational leave of absence or sabbatical leave, or (3)
9military leave. This coverage shall continue until expiration
10of authorized leave and return to active service, but not to
11exceed 24 months for leaves under item (1) or (2). This
1224-month limitation and the requirement of returning to active
13service shall not apply to persons receiving ordinary or
14accidental disability benefits or retirement benefits through
15the appropriate State retirement system or benefits under the
16Workers' Compensation or Occupational Disease Act.
17 (d) The basic group life insurance coverage shall continue,
18with full State contribution, where such person is (1) absent
19from active service by reason of disability arising from any
20cause other than self-inflicted, (2) on authorized educational
21leave of absence or sabbatical leave, or (3) on military leave.
22 (e) Where the person is in non-pay status for a period in
23excess of 30 days or on leave of absence, other than by reason
24of disability, educational or sabbatical leave, or military
25leave, such person may continue coverage only by making
26personal payment equal to the amount normally contributed by

HB4027 Engrossed- 32 -LRB100 12038 EFG 24080 b
1the State on such person's behalf. Such payments and coverage
2may be continued: (1) until such time as the person returns to
3a status eligible for coverage at State expense, but not to
4exceed 24 months or (2) until such person's employment or
5annuitant status with the State is terminated (exclusive of any
6additional service imposed pursuant to law).
7 (f) The Department shall establish by rule the extent to
8which other employee benefits will continue for persons in
9non-pay status or who are not in active service.
10 (g) The State shall not pay the cost of the basic
11non-contributory group life insurance, program of health
12benefits and other employee benefits for members who are
13survivors as defined by paragraphs (1) and (2) of subsection
14(q) of Section 3 of this Act. The costs of benefits for these
15survivors shall be paid by the survivors or by the University
16of Illinois Cooperative Extension Service, or any combination
17thereof. However, the State shall pay the amount of the
18reduction in the cost of participation, if any, resulting from
19the amendment to subsection (a) made by this amendatory Act of
20the 91st General Assembly.
21 (h) Those persons occupying positions with any department
22as a result of emergency appointments pursuant to Section 8b.8
23of the Personnel Code who are not considered employees under
24this Act shall be given the option of participating in the
25programs of group life insurance, health benefits and other
26employee benefits. Such persons electing coverage may

HB4027 Engrossed- 33 -LRB100 12038 EFG 24080 b
1participate only by making payment equal to the amount normally
2contributed by the State for similarly situated employees. Such
3amounts shall be determined by the Director. Such payments and
4coverage may be continued until such time as the person becomes
5an employee pursuant to this Act or such person's appointment
6is terminated.
7 (i) Any unit of local government within the State of
8Illinois may apply to the Director to have its employees,
9annuitants, and their dependents provided group health
10coverage under this Act on a non-insured basis. To participate,
11a unit of local government must agree to enroll all of its
12employees, who may select coverage under either the State group
13health benefits plan or a health maintenance organization that
14has contracted with the State to be available as a health care
15provider for employees as defined in this Act. A unit of local
16government must remit the entire cost of providing coverage
17under the State group health benefits plan or, for coverage
18under a health maintenance organization, an amount determined
19by the Director based on an analysis of the sex, age,
20geographic location, or other relevant demographic variables
21for its employees, except that the unit of local government
22shall not be required to enroll those of its employees who are
23covered spouses or dependents under this plan or another group
24policy or plan providing health benefits as long as (1) an
25appropriate official from the unit of local government attests
26that each employee not enrolled is a covered spouse or

HB4027 Engrossed- 34 -LRB100 12038 EFG 24080 b
1dependent under this plan or another group policy or plan, and
2(2) at least 50% of the employees are enrolled and the unit of
3local government remits the entire cost of providing coverage
4to those employees, except that a participating school district
5must have enrolled at least 50% of its full-time employees who
6have not waived coverage under the district's group health plan
7by participating in a component of the district's cafeteria
8plan. A participating school district is not required to enroll
9a full-time employee who has waived coverage under the
10district's health plan, provided that an appropriate official
11from the participating school district attests that the
12full-time employee has waived coverage by participating in a
13component of the district's cafeteria plan. For the purposes of
14this subsection, "participating school district" includes a
15unit of local government whose primary purpose is education as
16defined by the Department's rules.
17 Employees of a participating unit of local government who
18are not enrolled due to coverage under another group health
19policy or plan may enroll in the event of a qualifying change
20in status, special enrollment, special circumstance as defined
21by the Director, or during the annual Benefit Choice Period. A
22participating unit of local government may also elect to cover
23its annuitants. Dependent coverage shall be offered on an
24optional basis, with the costs paid by the unit of local
25government, its employees, or some combination of the two as
26determined by the unit of local government. The unit of local

HB4027 Engrossed- 35 -LRB100 12038 EFG 24080 b
1government shall be responsible for timely collection and
2transmission of dependent premiums.
3 The Director shall annually determine monthly rates of
4payment, subject to the following constraints:
5 (1) In the first year of coverage, the rates shall be
6 equal to the amount normally charged to State employees for
7 elected optional coverages or for enrolled dependents
8 coverages or other contributory coverages, or contributed
9 by the State for basic insurance coverages on behalf of its
10 employees, adjusted for differences between State
11 employees and employees of the local government in age,
12 sex, geographic location or other relevant demographic
13 variables, plus an amount sufficient to pay for the
14 additional administrative costs of providing coverage to
15 employees of the unit of local government and their
16 dependents.
17 (2) In subsequent years, a further adjustment shall be
18 made to reflect the actual prior years' claims experience
19 of the employees of the unit of local government.
20 In the case of coverage of local government employees under
21a health maintenance organization, the Director shall annually
22determine for each participating unit of local government the
23maximum monthly amount the unit may contribute toward that
24coverage, based on an analysis of (i) the age, sex, geographic
25location, and other relevant demographic variables of the
26unit's employees and (ii) the cost to cover those employees

HB4027 Engrossed- 36 -LRB100 12038 EFG 24080 b
1under the State group health benefits plan. The Director may
2similarly determine the maximum monthly amount each unit of
3local government may contribute toward coverage of its
4employees' dependents under a health maintenance organization.
5 Monthly payments by the unit of local government or its
6employees for group health benefits plan or health maintenance
7organization coverage shall be deposited in the Local
8Government Health Insurance Reserve Fund.
9 The Local Government Health Insurance Reserve Fund is
10hereby created as a nonappropriated trust fund to be held
11outside the State Treasury, with the State Treasurer as
12custodian. The Local Government Health Insurance Reserve Fund
13shall be a continuing fund not subject to fiscal year
14limitations. The Local Government Health Insurance Reserve
15Fund is not subject to administrative charges or charge-backs,
16including but not limited to those authorized under Section 8h
17of the State Finance Act. All revenues arising from the
18administration of the health benefits program established
19under this Section shall be deposited into the Local Government
20Health Insurance Reserve Fund. Any interest earned on moneys in
21the Local Government Health Insurance Reserve Fund shall be
22deposited into the Fund. All expenditures from this Fund shall
23be used for payments for health care benefits for local
24government and rehabilitation facility employees, annuitants,
25and dependents, and to reimburse the Department or its
26administrative service organization for all expenses incurred

HB4027 Engrossed- 37 -LRB100 12038 EFG 24080 b
1in the administration of benefits. No other State funds may be
2used for these purposes.
3 A local government employer's participation or desire to
4participate in a program created under this subsection shall
5not limit that employer's duty to bargain with the
6representative of any collective bargaining unit of its
7employees.
8 (j) Any rehabilitation facility within the State of
9Illinois may apply to the Director to have its employees,
10annuitants, and their eligible dependents provided group
11health coverage under this Act on a non-insured basis. To
12participate, a rehabilitation facility must agree to enroll all
13of its employees and remit the entire cost of providing such
14coverage for its employees, except that the rehabilitation
15facility shall not be required to enroll those of its employees
16who are covered spouses or dependents under this plan or
17another group policy or plan providing health benefits as long
18as (1) an appropriate official from the rehabilitation facility
19attests that each employee not enrolled is a covered spouse or
20dependent under this plan or another group policy or plan, and
21(2) at least 50% of the employees are enrolled and the
22rehabilitation facility remits the entire cost of providing
23coverage to those employees. Employees of a participating
24rehabilitation facility who are not enrolled due to coverage
25under another group health policy or plan may enroll in the
26event of a qualifying change in status, special enrollment,

HB4027 Engrossed- 38 -LRB100 12038 EFG 24080 b
1special circumstance as defined by the Director, or during the
2annual Benefit Choice Period. A participating rehabilitation
3facility may also elect to cover its annuitants. Dependent
4coverage shall be offered on an optional basis, with the costs
5paid by the rehabilitation facility, its employees, or some
6combination of the 2 as determined by the rehabilitation
7facility. The rehabilitation facility shall be responsible for
8timely collection and transmission of dependent premiums.
9 The Director shall annually determine quarterly rates of
10payment, subject to the following constraints:
11 (1) In the first year of coverage, the rates shall be
12 equal to the amount normally charged to State employees for
13 elected optional coverages or for enrolled dependents
14 coverages or other contributory coverages on behalf of its
15 employees, adjusted for differences between State
16 employees and employees of the rehabilitation facility in
17 age, sex, geographic location or other relevant
18 demographic variables, plus an amount sufficient to pay for
19 the additional administrative costs of providing coverage
20 to employees of the rehabilitation facility and their
21 dependents.
22 (2) In subsequent years, a further adjustment shall be
23 made to reflect the actual prior years' claims experience
24 of the employees of the rehabilitation facility.
25 Monthly payments by the rehabilitation facility or its
26employees for group health benefits shall be deposited in the

HB4027 Engrossed- 39 -LRB100 12038 EFG 24080 b
1Local Government Health Insurance Reserve Fund.
2 (k) Any domestic violence shelter or service within the
3State of Illinois may apply to the Director to have its
4employees, annuitants, and their dependents provided group
5health coverage under this Act on a non-insured basis. To
6participate, a domestic violence shelter or service must agree
7to enroll all of its employees and pay the entire cost of
8providing such coverage for its employees. The domestic
9violence shelter shall not be required to enroll those of its
10employees who are covered spouses or dependents under this plan
11or another group policy or plan providing health benefits as
12long as (1) an appropriate official from the domestic violence
13shelter attests that each employee not enrolled is a covered
14spouse or dependent under this plan or another group policy or
15plan and (2) at least 50% of the employees are enrolled and the
16domestic violence shelter remits the entire cost of providing
17coverage to those employees. Employees of a participating
18domestic violence shelter who are not enrolled due to coverage
19under another group health policy or plan may enroll in the
20event of a qualifying change in status, special enrollment, or
21special circumstance as defined by the Director or during the
22annual Benefit Choice Period. A participating domestic
23violence shelter may also elect to cover its annuitants.
24Dependent coverage shall be offered on an optional basis, with
25employees, or some combination of the 2 as determined by the
26domestic violence shelter or service. The domestic violence

HB4027 Engrossed- 40 -LRB100 12038 EFG 24080 b
1shelter or service shall be responsible for timely collection
2and transmission of dependent premiums.
3 The Director shall annually determine rates of payment,
4subject to the following constraints:
5 (1) In the first year of coverage, the rates shall be
6 equal to the amount normally charged to State employees for
7 elected optional coverages or for enrolled dependents
8 coverages or other contributory coverages on behalf of its
9 employees, adjusted for differences between State
10 employees and employees of the domestic violence shelter or
11 service in age, sex, geographic location or other relevant
12 demographic variables, plus an amount sufficient to pay for
13 the additional administrative costs of providing coverage
14 to employees of the domestic violence shelter or service
15 and their dependents.
16 (2) In subsequent years, a further adjustment shall be
17 made to reflect the actual prior years' claims experience
18 of the employees of the domestic violence shelter or
19 service.
20 Monthly payments by the domestic violence shelter or
21service or its employees for group health insurance shall be
22deposited in the Local Government Health Insurance Reserve
23Fund.
24 (l) A public community college or entity organized pursuant
25to the Public Community College Act may apply to the Director
26initially to have only annuitants not covered prior to July 1,

HB4027 Engrossed- 41 -LRB100 12038 EFG 24080 b
11992 by the district's health plan provided health coverage
2under this Act on a non-insured basis. The community college
3must execute a 2-year contract to participate in the Local
4Government Health Plan. Any annuitant may enroll in the event
5of a qualifying change in status, special enrollment, special
6circumstance as defined by the Director, or during the annual
7Benefit Choice Period.
8 The Director shall annually determine monthly rates of
9payment subject to the following constraints: for those
10community colleges with annuitants only enrolled, first year
11rates shall be equal to the average cost to cover claims for a
12State member adjusted for demographics, Medicare
13participation, and other factors; and in the second year, a
14further adjustment of rates shall be made to reflect the actual
15first year's claims experience of the covered annuitants.
16 (l-5) The provisions of subsection (l) become inoperative
17on July 1, 1999.
18 (m) The Director shall adopt any rules deemed necessary for
19implementation of this amendatory Act of 1989 (Public Act
2086-978).
21 (n) Any child advocacy center within the State of Illinois
22may apply to the Director to have its employees, annuitants,
23and their dependents provided group health coverage under this
24Act on a non-insured basis. To participate, a child advocacy
25center must agree to enroll all of its employees and pay the
26entire cost of providing coverage for its employees. The child

HB4027 Engrossed- 42 -LRB100 12038 EFG 24080 b
1advocacy center shall not be required to enroll those of its
2employees who are covered spouses or dependents under this plan
3or another group policy or plan providing health benefits as
4long as (1) an appropriate official from the child advocacy
5center attests that each employee not enrolled is a covered
6spouse or dependent under this plan or another group policy or
7plan and (2) at least 50% of the employees are enrolled and the
8child advocacy center remits the entire cost of providing
9coverage to those employees. Employees of a participating child
10advocacy center who are not enrolled due to coverage under
11another group health policy or plan may enroll in the event of
12a qualifying change in status, special enrollment, or special
13circumstance as defined by the Director or during the annual
14Benefit Choice Period. A participating child advocacy center
15may also elect to cover its annuitants. Dependent coverage
16shall be offered on an optional basis, with the costs paid by
17the child advocacy center, its employees, or some combination
18of the 2 as determined by the child advocacy center. The child
19advocacy center shall be responsible for timely collection and
20transmission of dependent premiums.
21 The Director shall annually determine rates of payment,
22subject to the following constraints:
23 (1) In the first year of coverage, the rates shall be
24 equal to the amount normally charged to State employees for
25 elected optional coverages or for enrolled dependents
26 coverages or other contributory coverages on behalf of its

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1 employees, adjusted for differences between State
2 employees and employees of the child advocacy center in
3 age, sex, geographic location, or other relevant
4 demographic variables, plus an amount sufficient to pay for
5 the additional administrative costs of providing coverage
6 to employees of the child advocacy center and their
7 dependents.
8 (2) In subsequent years, a further adjustment shall be
9 made to reflect the actual prior years' claims experience
10 of the employees of the child advocacy center.
11 Monthly payments by the child advocacy center or its
12employees for group health insurance shall be deposited into
13the Local Government Health Insurance Reserve Fund.
14(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
15 Section 15. The Attorney General Act is amended by adding
16Section 5 as follows:
17 (15 ILCS 205/5 new)
18 Sec. 5. Future increases in income. The Office of the
19Attorney General must not pay, offer, or agree to pay any
20future increase in income, as that term is defined in Section
2114-103.42 of the Illinois Pension Code, to any person in a
22manner that violates Section 14-106.5 of the Illinois Pension
23Code.

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1 Section 20. The Secretary of State Merit Employment Code is
2amended by adding Section 13a as follows:
3 (15 ILCS 310/13a new)
4 Sec. 13a. Future increases in income. The Office of the
5Secretary of State must not pay, offer, or agree to pay any
6future increase in income, as that term is defined in Section
714-103.42 of the Illinois Pension Code, to any person in a
8manner that violates Section 14-106.5 of the Illinois Pension
9Code.
10 Section 25. The Comptroller Merit Employment Code is
11amended by adding Section 13a as follows:
12 (15 ILCS 410/13a new)
13 Sec. 13a. Future increases in income. The Office of the
14Comptroller must not pay, offer, or agree to pay any future
15increase in income, as that term is defined in Section
1614-103.42 of the Illinois Pension Code, to any person in a
17manner that violates Section 14-106.5 of the Illinois Pension
18Code.
19 Section 30. The State Treasurer Employment Code is amended
20by adding Section 12a as follows:
21 (15 ILCS 510/12a new)

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1 Sec. 12a. Future increases in income. The Office of the
2State Treasurer must not pay, offer, or agree to pay any future
3increase in income, as that term is defined in Section
414-103.42 of the Illinois Pension Code, to any person in a
5manner that violates Section 14-106.5 of the Illinois Pension
6Code.
7 Section 35. The Civil Administrative Code of Illinois is
8amended by adding Section 5-647 as follows:
9 (20 ILCS 5/5-647 new)
10 Sec. 5-647. Future increases in income. A Department must
11not pay, offer, or agree to pay any future increase in income,
12as that term is defined in Section 14-103.42, 15-112.1, or
1316-121.1 of the Illinois Pension Code, to any person in a
14manner that violates Section 14-106.5, 15-132.9, or 16-122.9 of
15the Illinois Pension Code.
16 Section 40. The Budget Stabilization Act is amended by
17changing Section 20 as follows:
18 (30 ILCS 122/20)
19 (Text of Section WITHOUT the changes made by P.A. 98-599,
20which has been held unconstitutional)
21 Sec. 20. Pension Stabilization Fund.
22 (a) The Pension Stabilization Fund is hereby created as a

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1special fund in the State treasury. Moneys in the fund shall be
2used for the sole purpose of making payments to the designated
3retirement systems as provided in Section 25.
4 (b) For each fiscal year through State fiscal year 2020,
5when the General Assembly's appropriations and transfers or
6diversions as required by law from general funds do not exceed
799% of the estimated general funds revenues pursuant to
8subsection (a) of Section 10, the Comptroller shall transfer
9from the General Revenue Fund as provided by this Section a
10total amount equal to 0.5% of the estimated general funds
11revenues to the Pension Stabilization Fund.
12 (c) For each fiscal year through State fiscal year 2020,
13when the General Assembly's appropriations and transfers or
14diversions as required by law from general funds do not exceed
1598% of the estimated general funds revenues pursuant to
16subsection (b) of Section 10, the Comptroller shall transfer
17from the General Revenue Fund as provided by this Section a
18total amount equal to 1.0% of the estimated general funds
19revenues to the Pension Stabilization Fund.
20 (c-5) In addition to any other amounts required to be
21transferred under this Section, in State fiscal year 2021 and
22each fiscal year thereafter through State fiscal year 2045, or
23when each of the designated retirement systems, as defined in
24Section 25, has achieved 100% funding, whichever occurs first,
25the State Comptroller shall order transferred and the State
26Treasurer shall transfer from the General Revenue Fund to the

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1Pension Stabilization Fund an amount equal to (1) the sum of
2the amounts certified by the designated retirement systems
3under subsection (a-10) of Section 14-135.08, subsection
4(a-10) of Section 15-165, and subsection (a-10) of Section
516-158 of this Code for that fiscal year minus (2) the sum of
6the required State contributions certified by the retirement
7systems under subsection (a-5) of Section 14-135.08,
8subsection (a-5) of Section 15-165, and subsection (a-5) of
9Section 16-158 of this Code for that fiscal year. The
10transferred amount is intended to represent the annual savings
11to the State resulting from the enactment of Section 1-161 and
12Section 14-155.2, the enactment of subsection (a-2) of Section
1315-155 and subsection (b-4) of Section 16-158, and the changes
14made to Section 1-160 by this amendatory Act of the 100th
15General Assembly.
16 (d) The Comptroller shall transfer 1/12 of the total amount
17to be transferred each fiscal year under this Section into the
18Pension Stabilization Fund on the first day of each month of
19that fiscal year or as soon thereafter as possible; except that
20the final transfer of the fiscal year shall be made as soon as
21practical after the August 31 following the end of the fiscal
22year.
23 Until State fiscal year 2021, before Before the final
24transfer for a fiscal year is made, the Comptroller shall
25reconcile the estimated general funds revenues used in
26calculating the other transfers under this Section for that

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1fiscal year with the actual general funds revenues for that
2fiscal year. The final transfer for the fiscal year shall be
3adjusted so that the total amount transferred under this
4Section for that fiscal year is equal to the percentage
5specified in subsection (b) or (c) of this Section, whichever
6is applicable, of the actual general funds revenues for that
7fiscal year. The actual general funds revenues for the fiscal
8year shall be calculated in a manner consistent with subsection
9(c) of Section 10 of this Act.
10(Source: P.A. 94-839, eff. 6-6-06.)
11 Section 45. The Illinois Pension Code is amended by
12changing Sections 1-160, 2-101, 2-105, 2-107, 2-108, 2-119.1,
132-124, 2-126, 2-134, 2-162, 14-103.10, 14-114, 14-131, 14-133,
1414-135.08, 14-152.1, 15-108.1, 15-108.2, 15-111, 15-136,
1515-155, 15-157, 15-165, 15-198, 16-121, 16-133.1, 16-136.1,
1616-152, 16-158, 16-203, 17-116, 17-127, 17-129, 17-130,
1718-131, 18-140, 20-121, 20-123, 20-124, and 20-125 and by
18adding Sections 1-161, 1-162, 2-105.3, 2-107.9, 2-107.10,
192-110.3, 2-165.1, 2-166.1, 14-103.41, 14-103.42, 14-103.43,
2014-106.5, 14-147.5, 14-155.1, 14-155.2, 14-156.1, 15-112.1,
2115-112.2, 15-132.9, 15-185.5, 15-200.1, 15-201.1, 16-107.1,
2216-121.1, 16-121.2, 16-122.9, 16-190.5, 16-205.1, 16-206.1,
2317-106.05, 17-113.4, 17-113.5, 17-113.6, 17-115.5, and
2417-119.2 as follows:

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1 (40 ILCS 5/1-160)
2 (Text of Section WITHOUT the changes made by P.A. 98-641,
3which has been held unconstitutional)
4 Sec. 1-160. Provisions applicable to new hires.
5 (a) The provisions of this Section apply to a person who,
6on or after January 1, 2011, first becomes a member or a
7participant under any reciprocal retirement system or pension
8fund established under this Code, other than a retirement
9system or pension fund established under Article 2, 3, 4, 5, 6,
1015 or 18 of this Code, notwithstanding any other provision of
11this Code to the contrary, but do not apply to any self-managed
12plan established under this Code, to any person with respect to
13service as a sheriff's law enforcement employee under Article
147, or to any participant of the retirement plan established
15under Section 22-101. Notwithstanding anything to the contrary
16in this Section, for purposes of this Section, a person who
17participated in a retirement system under Article 15 prior to
18January 1, 2011 shall be deemed a person who first became a
19member or participant prior to January 1, 2011 under any
20retirement system or pension fund subject to this Section. The
21changes made to this Section by Public Act 98-596 this
22amendatory Act of the 98th General Assembly are a clarification
23of existing law and are intended to be retroactive to January
241, 2011 (the effective date of Public Act 96-889),
25notwithstanding the provisions of Section 1-103.1 of this Code.
26 This Section does not apply to a person who, on or after 6

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1months after the effective date of this amendatory Act of the
2100th General Assembly, first becomes a member or participant
3under Article 14 or 16, unless that person (i) is a covered
4employee under Article 14 who has not elected to participate in
5the defined contribution plan under Section 14-155.2 or (ii)
6elects under subsection (b) of Section 1-161 to receive the
7benefits provided under this Section and the applicable
8provisions of the Article under which he or she is a member or
9participant. This Section also does not apply to a person who
10first becomes a member or participant of an affected pension
11fund on or after 6 months after the resolution or ordinance
12date, as defined in Section 1-162, unless that person elects
13under subsection (c) of Section 1-162 to receive the benefits
14provided under this Section and the applicable provisions of
15the Article under which he or she is a member or participant.
16 (b) "Final average salary" means the average monthly (or
17annual) salary obtained by dividing the total salary or
18earnings calculated under the Article applicable to the member
19or participant during the 96 consecutive months (or 8
20consecutive years) of service within the last 120 months (or 10
21years) of service in which the total salary or earnings
22calculated under the applicable Article was the highest by the
23number of months (or years) of service in that period. For the
24purposes of a person who first becomes a member or participant
25of any retirement system or pension fund to which this Section
26applies on or after January 1, 2011, in this Code, "final

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1average salary" shall be substituted for the following:
2 (1) In Article 7 (except for service as sheriff's law
3 enforcement employees), "final rate of earnings".
4 (2) In Articles 8, 9, 10, 11, and 12, "highest average
5 annual salary for any 4 consecutive years within the last
6 10 years of service immediately preceding the date of
7 withdrawal".
8 (3) In Article 13, "average final salary".
9 (4) In Article 14, "final average compensation".
10 (5) In Article 17, "average salary".
11 (6) In Section 22-207, "wages or salary received by him
12 at the date of retirement or discharge".
13 (b-5) Beginning on January 1, 2011, for all purposes under
14this Code (including without limitation the calculation of
15benefits and employee contributions), the annual earnings,
16salary, or wages (based on the plan year) of a member or
17participant to whom this Section applies shall not exceed
18$106,800; however, that amount shall annually thereafter be
19increased by the lesser of (i) 3% of that amount, including all
20previous adjustments, or (ii) one-half the annual unadjusted
21percentage increase (but not less than zero) in the consumer
22price index-u for the 12 months ending with the September
23preceding each November 1, including all previous adjustments.
24 For the purposes of this Section, "consumer price index-u"
25means the index published by the Bureau of Labor Statistics of
26the United States Department of Labor that measures the average

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1change in prices of goods and services purchased by all urban
2consumers, United States city average, all items, 1982-84 =
3100. The new amount resulting from each annual adjustment shall
4be determined by the Public Pension Division of the Department
5of Insurance and made available to the boards of the retirement
6systems and pension funds by November 1 of each year.
7 (c) A member or participant is entitled to a retirement
8annuity upon written application if he or she has attained age
967 (beginning January 1, 2015, age 65 with respect to service
10under Article 12 of this Code that is subject to this Section)
11and has at least 10 years of service credit and is otherwise
12eligible under the requirements of the applicable Article.
13 A member or participant who has attained age 62 (beginning
14January 1, 2015, age 60 with respect to service under Article
1512 of this Code that is subject to this Section) and has at
16least 10 years of service credit and is otherwise eligible
17under the requirements of the applicable Article may elect to
18receive the lower retirement annuity provided in subsection (d)
19of this Section.
20 (d) The retirement annuity of a member or participant who
21is retiring after attaining age 62 (beginning January 1, 2015,
22age 60 with respect to service under Article 12 of this Code
23that is subject to this Section) with at least 10 years of
24service credit shall be reduced by one-half of 1% for each full
25month that the member's age is under age 67 (beginning January
261, 2015, age 65 with respect to service under Article 12 of

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1this Code that is subject to this Section).
2 (e) Any retirement annuity or supplemental annuity shall be
3subject to annual increases on the January 1 occurring either
4on or after the attainment of age 67 (beginning January 1,
52015, age 65 with respect to service under Article 12 of this
6Code that is subject to this Section) or the first anniversary
7of the annuity start date, whichever is later. Each annual
8increase shall be calculated at 3% or one-half the annual
9unadjusted percentage increase (but not less than zero) in the
10consumer price index-u for the 12 months ending with the
11September preceding each November 1, whichever is less, of the
12originally granted retirement annuity. If the annual
13unadjusted percentage change in the consumer price index-u for
14the 12 months ending with the September preceding each November
151 is zero or there is a decrease, then the annuity shall not be
16increased.
17 (f) The initial survivor's or widow's annuity of an
18otherwise eligible survivor or widow of a retired member or
19participant who first became a member or participant on or
20after January 1, 2011 shall be in the amount of 66 2/3% of the
21retired member's or participant's retirement annuity at the
22date of death. In the case of the death of a member or
23participant who has not retired and who first became a member
24or participant on or after January 1, 2011, eligibility for a
25survivor's or widow's annuity shall be determined by the
26applicable Article of this Code. The initial benefit shall be

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166 2/3% of the earned annuity without a reduction due to age. A
2child's annuity of an otherwise eligible child shall be in the
3amount prescribed under each Article if applicable. Any
4survivor's or widow's annuity shall be increased (1) on each
5January 1 occurring on or after the commencement of the annuity
6if the deceased member died while receiving a retirement
7annuity or (2) in other cases, on each January 1 occurring
8after the first anniversary of the commencement of the annuity.
9Each annual increase shall be calculated at 3% or one-half the
10annual unadjusted percentage increase (but not less than zero)
11in the consumer price index-u for the 12 months ending with the
12September preceding each November 1, whichever is less, of the
13originally granted survivor's annuity. If the annual
14unadjusted percentage change in the consumer price index-u for
15the 12 months ending with the September preceding each November
161 is zero or there is a decrease, then the annuity shall not be
17increased.
18 (g) The benefits in Section 14-110 apply only if the person
19is a State policeman, a fire fighter in the fire protection
20service of a department, or a security employee of the
21Department of Corrections or the Department of Juvenile
22Justice, as those terms are defined in subsection (b) of
23Section 14-110. A person who meets the requirements of this
24Section is entitled to an annuity calculated under the
25provisions of Section 14-110, in lieu of the regular or minimum
26retirement annuity, only if the person has withdrawn from

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1service with not less than 20 years of eligible creditable
2service and has attained age 60, regardless of whether the
3attainment of age 60 occurs while the person is still in
4service.
5 (h) If a person who first becomes a member or a participant
6of a retirement system or pension fund subject to this Section
7on or after January 1, 2011 is receiving a retirement annuity
8or retirement pension under that system or fund and becomes a
9member or participant under any other system or fund created by
10this Code and is employed on a full-time basis, except for
11those members or participants exempted from the provisions of
12this Section under subsection (a) of this Section, then the
13person's retirement annuity or retirement pension under that
14system or fund shall be suspended during that employment. Upon
15termination of that employment, the person's retirement
16annuity or retirement pension payments shall resume and be
17recalculated if recalculation is provided for under the
18applicable Article of this Code.
19 If a person who first becomes a member of a retirement
20system or pension fund subject to this Section on or after
21January 1, 2012 and is receiving a retirement annuity or
22retirement pension under that system or fund and accepts on a
23contractual basis a position to provide services to a
24governmental entity from which he or she has retired, then that
25person's annuity or retirement pension earned as an active
26employee of the employer shall be suspended during that

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1contractual service. A person receiving an annuity or
2retirement pension under this Code shall notify the pension
3fund or retirement system from which he or she is receiving an
4annuity or retirement pension, as well as his or her
5contractual employer, of his or her retirement status before
6accepting contractual employment. A person who fails to submit
7such notification shall be guilty of a Class A misdemeanor and
8required to pay a fine of $1,000. Upon termination of that
9contractual employment, the person's retirement annuity or
10retirement pension payments shall resume and, if appropriate,
11be recalculated under the applicable provisions of this Code.
12 (i) (Blank).
13 (j) Except for Sections 1-161 and 1-162, in In the case of
14a conflict between the provisions of this Section and any other
15provision of this Code, the provisions of this Section shall
16control.
17(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
18eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
19 (40 ILCS 5/1-161 new)
20 Sec. 1-161. Optional benefits for certain Tier 2 members
21under Articles 14, 15, and 16.
22 (a) Notwithstanding any other provision of this Code to the
23contrary, the provisions of this Section apply to a person who,
24on or after 6 months after the effective date of this
25amendatory Act of the 100th General Assembly, first becomes a

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1member or a participant under Article 14, 15, or 16 and who
2does not make the election under subsection (b) or (c),
3whichever is applicable. The provisions of this Section do not
4apply to any participant in a self-managed plan or to a covered
5employee under Article 14.
6 (b) In lieu of the benefits provided under this Section, a
7member or participant, except for a participant under Article
815, may irrevocably elect the benefits under Section 1-160 and
9the benefits otherwise applicable to that member or
10participant. The election must be made within 30 days after
11becoming a member or participant. Each retirement system shall
12establish procedures for making this election.
13 (c) A participant under Article 15 may irrevocably elect
14the benefits otherwise provided to a Tier 2 participant under
15Article 15. The election must be made within 30 days after
16becoming a participant. The retirement system under Article 15
17shall establish procedures for making this election.
18 (d) "Final average salary" means the average monthly (or
19annual) salary obtained by dividing the total salary or
20earnings calculated under the Article applicable to the member
21or participant during the last 120 months (or 10 years) of
22service in which the total salary or earnings calculated under
23the applicable Article was the highest by the number of months
24(or years) of service in that period. For the purposes of a
25person who first becomes a member or participant of any
26retirement system to which this Section applies on or after 6

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1months after the effective date of this amendatory Act of the
2100th General Assembly, in this Code, "final average salary"
3shall be substituted for "final average compensation" in
4Article 14.
5 (e) Beginning 6 months after the effective date of this
6amendatory Act of the 100th General Assembly, for all purposes
7under this Code (including without limitation the calculation
8of benefits and employee contributions), the annual earnings,
9salary, or wages (based on the plan year) of a member or
10participant to whom this Section applies shall not at any time
11exceed the federal Social Security Wage Base then in effect.
12 (f) A member or participant is entitled to a retirement
13annuity upon written application if he or she has attained the
14normal retirement age determined by the Social Security
15Administration for that member or participant's year of birth,
16but no earlier than 67 years of age, and has at least 10 years
17of service credit and is otherwise eligible under the
18requirements of the applicable Article.
19 (g) The amount of the retirement annuity to which a member
20or participant is entitled shall be computed by multiplying
211.25% for each year of service credit by his or her final
22average salary.
23 (h) Any retirement annuity or supplemental annuity shall be
24subject to annual increases on the first anniversary of the
25annuity start date. Each annual increase shall be one-half the
26annual unadjusted percentage increase (but not less than zero)

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1in the consumer price index-w for the 12 months ending with the
2September preceding each November 1 of the originally granted
3retirement annuity. If the annual unadjusted percentage change
4in the consumer price index-w for the 12 months ending with the
5September preceding each November 1 is zero or there is a
6decrease, then the annuity shall not be increased.
7 For the purposes of this Section, "consumer price index-w"
8means the index published by the Bureau of Labor Statistics of
9the United States Department of Labor that measures the average
10change in prices of goods and services purchased by Urban Wage
11Earners and Clerical Workers, United States city average, all
12items, 1982-84 = 100. The new amount resulting from each annual
13adjustment shall be determined by the Public Pension Division
14of the Department of Insurance and made available to the boards
15of the retirement systems and pension funds by November 1 of
16each year.
17 (i) The initial survivor's or widow's annuity of an
18otherwise eligible survivor or widow of a retired member or
19participant who first became a member or participant on or
20after 6 months after the effective date of this amendatory Act
21of the 100th General Assembly shall be in the amount of 66 2/3%
22of the retired member's or participant's retirement annuity at
23the date of death. In the case of the death of a member or
24participant who has not retired and who first became a member
25or participant on or after 6 months after the effective date of
26this amendatory Act of the 100th General Assembly, eligibility

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1for a survivor's or widow's annuity shall be determined by the
2applicable Article of this Code. The benefit shall be 66 2/3%
3of the earned annuity without a reduction due to age. A child's
4annuity of an otherwise eligible child shall be in the amount
5prescribed under each Article if applicable.
6 (j) In lieu of any other employee contributions, except for
7the contribution to the defined contribution plan under
8subsection (k) of this Section, each employee shall contribute
96.2% of his her or salary to the retirement system. However,
10the employee contribution under this subsection shall not
11exceed the amount of the normal cost of the benefits under this
12Section (except for the defined contribution plan under
13subsection (k) of this Section), expressed as a percentage of
14payroll and determined on or before November 1 of each year by
15the board of trustees of the retirement system. If the board of
16trustees of the retirement system determines that the 6.2%
17employee contribution rate exceeds the normal cost of the
18benefits under this Section (except for the defined
19contribution plan under subsection (k) of this Section), then
20on or before December 1 of that year, the board of trustees
21shall certify the amount of the normal cost of the benefits
22under this Section (except for the defined contribution plan
23under subsection (k) of this Section), expressed as a
24percentage of payroll, to the State Actuary and the Commission
25on Government Forecasting and Accountability, and the employee
26contribution under this subsection shall be reduced to that

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1amount beginning January 1 of the following year. Thereafter,
2if the normal cost of the benefits under this Section (except
3for the defined contribution plan under subsection (k) of this
4Section), expressed as a percentage of payroll and determined
5on or before November 1 of each year by the board of trustees
6of the retirement system, exceeds 6.2% of salary, then on or
7before December 1 of that year, the board of trustees shall
8certify the normal cost to the State Actuary and the Commission
9on Government Forecasting and Accountability, and the employee
10contributions shall revert back to 6.2% of salary beginning
11January 1 of the following year.
12 (k) No later than 5 months after the effective date of this
13amendatory Act of the 100th General Assembly, each retirement
14system under Article 14, 15, or 16 shall prepare and implement
15a defined contribution plan for members or participants who are
16subject to this Section. The defined contribution plan
17developed under this subsection shall be a plan that aggregates
18employer and employee contributions in individual participant
19accounts which, after meeting any other requirements, are used
20for payouts after retirement in accordance with this subsection
21and any other applicable laws.
22 (1) Each member or participant shall contribute a
23 minimum of 4% of his or her salary to the defined
24 contribution plan.
25 (2) For each participant in the defined contribution
26 plan who has been employed with the same employer for at

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1 least one year, employer contributions shall be paid into
2 that participant's accounts at a rate expressed as a
3 percentage of salary. This rate may be set for individual
4 employees, but shall be no higher than 6% of salary and
5 shall be no lower than 2% of salary.
6 (3) Employer contributions shall vest when those
7 contributions are paid into a member's or participant's
8 account.
9 (4) The defined contribution plan shall provide a
10 variety of options for investments. These options shall
11 include investments handled by the Illinois State Board of
12 Investment as well as private sector investment options.
13 (5) The defined contribution plan shall provide a
14 variety of options for payouts to retirees and their
15 survivors.
16 (6) To the extent authorized under federal law and as
17 authorized by the retirement system, the defined
18 contribution plan shall allow former participants in the
19 plan to transfer or roll over employee and employer
20 contributions, and the earnings thereon, into other
21 qualified retirement plans.
22 (7) Each retirement system shall reduce the employee
23 contributions credited to the member's defined
24 contribution plan account by an amount determined by that
25 retirement system to cover the cost of offering the
26 benefits under this subsection and any applicable

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1 administrative fees.
2 (8) No person shall begin participating in the defined
3 contribution plan until it has attained qualified plan
4 status and received all necessary approvals from the U.S.
5 Internal Revenue Service.
6 (l) By accepting the benefits under this Section, a member
7or participant acknowledges and consents that benefits once
8earned may not be diminished, but that future benefits may be
9modified, including, but not limited to, changes in the
10retirement age at which a member or participant becomes
11eligible to receive future benefits, changes in the amount of
12the automatic annual increase for those future benefits, or the
13amount of the retirement annuity. Any increase in benefits
14under this Section applicable to persons under Article 15 or 16
15does not apply unless it is approved by resolution or ordinance
16of the governing body of the unit of local government with
17regard to the members or participants under that unit of local
18government.
19 (m) In the case of a conflict between the provisions of
20this Section and any other provision of this Code, the
21provisions of this Section shall control.
22 (40 ILCS 5/1-162 new)
23 Sec. 1-162. Optional benefits for certain Tier 2 members of
24pension funds under Articles 7, 8, 9, 10, 11, 12, 13, and 17.
25 (a) As used in this Section:

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1 "Affected pension fund" means a pension fund established
2under Article 7, 8, 9, 10, 11, 12, 13, or 17 that the governing
3body of the unit of local government has designated as an
4affected pension fund by adoption of a resolution or ordinance.
5 "Resolution or ordinance date" means the date on which the
6governing body of the unit of local government designates a
7pension fund under Article 7, 8, 9, 10, 11, 12, 13, or 17 as an
8affected pension fund by adoption of a resolution or ordinance.
9 (b) Notwithstanding any other provision of this Code to the
10contrary, the provisions of this Section apply to a person who
11first becomes a member or a participant in an affected pension
12fund on or after 6 months after the resolution or ordinance
13date and who does not make the election under subsection (c).
14The provisions of this Section do not apply to a sheriff's law
15enforcement employee under Article 7.
16 (c) In lieu of the benefits provided under this Section, a
17member or participant may irrevocably elect the benefits under
18Section 1-160 and the benefits otherwise applicable to that
19member or participant. The election must be made within 30 days
20after becoming a member or participant. Each affected pension
21fund shall establish procedures for making this election.
22 (d) "Final average salary" means the average monthly (or
23annual) salary obtained by dividing the total salary or
24earnings calculated under the Article applicable to the member
25or participant during the last 120 months (or 10 years) of
26service in which the total salary or earnings calculated under

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1the applicable Article was the highest by the number of months
2(or years) of service in that period. For the purposes of a
3person who first becomes a member or participant of an affected
4pension fund on or after 6 months after the ordinance or
5resolution date, in this Code, "final average salary" shall be
6substituted for the following:
7 (1) In Article 7, (except for service as sheriff's law
8 enforcement employees), "final rate of earnings".
9 (2) In Articles 8, 9, 10, 11, and 12, "highest average
10 annual salary for any 4 consecutive years within the last
11 10 years of service immediately preceding the date of
12 withdrawal".
13 (3) In Article 13, "average final salary".
14 (4) In Article 17, "average salary".
15 (e) Beginning 6 months after the resolution or ordinance
16date, for all purposes under this Code (including without
17limitation the calculation of benefits and employee
18contributions), the annual earnings, salary, or wages (based on
19the plan year) of a member or participant to whom this Section
20applies shall not at any time exceed the federal Social
21Security Wage Base then in effect.
22 (f) A member or participant is entitled to a retirement
23annuity upon written application if he or she has attained the
24normal retirement age determined by the Social Security
25Administration for that member or participant's year of birth,
26but no earlier than 67 years of age, and has at least 10 years

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1of service credit and is otherwise eligible under the
2requirements of the applicable Article.
3 (g) The amount of the retirement annuity to which a member
4or participant is entitled shall be computed by multiplying
51.25% for each year of service credit by his or her final
6average salary.
7 (h) Any retirement annuity or supplemental annuity shall be
8subject to annual increases on the first anniversary of the
9annuity start date. Each annual increase shall be one-half the
10annual unadjusted percentage increase (but not less than zero)
11in the consumer price index-w for the 12 months ending with the
12September preceding each November 1 of the originally granted
13retirement annuity. If the annual unadjusted percentage change
14in the consumer price index-w for the 12 months ending with the
15September preceding each November 1 is zero or there is a
16decrease, then the annuity shall not be increased.
17 For the purposes of this Section, "consumer price index-w"
18means the index published by the Bureau of Labor Statistics of
19the United States Department of Labor that measures the average
20change in prices of goods and services purchased by Urban Wage
21Earners and Clerical Workers, United States city average, all
22items, 1982-84 = 100. The new amount resulting from each annual
23adjustment shall be determined by the Public Pension Division
24of the Department of Insurance and made available to the boards
25of the retirement systems and pension funds by November 1 of
26each year.

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1 (i) The initial survivor's or widow's annuity of an
2otherwise eligible survivor or widow of a retired member or
3participant who first became a member or participant on or
4after 6 months after the resolution or ordinance date shall be
5in the amount of 66 2/3% of the retired member's or
6participant's retirement annuity at the date of death. In the
7case of the death of a member or participant who has not
8retired and who first became a member or participant on or
9after 6 months after the resolution or ordinance date,
10eligibility for a survivor's or widow's annuity shall be
11determined by the applicable Article of this Code. The benefit
12shall be 66 2/3% of the earned annuity without a reduction due
13to age. A child's annuity of an otherwise eligible child shall
14be in the amount prescribed under each Article if applicable.
15 (j) In lieu of any other employee contributions, except for
16the contribution to the defined contribution plan under
17subsection (k) of this Section, each employee shall contribute
186.2% of his her or salary to the affected pension fund.
19However, the employee contribution under this subsection shall
20not exceed the amount of the normal cost of the benefits under
21this Section (except for the defined contribution plan under
22subsection (k) of this Section), expressed as a percentage of
23payroll and determined on or before November 1 of each year by
24the board of trustees of the affected pension fund. If the
25board of trustees of the affected pension fund determines that
26the 6.2% employee contribution rate exceeds the normal cost of

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1the benefits under this Section (except for the defined
2contribution plan under subsection (k) of this Section), then
3on or before December 1 of that year, the board of trustees
4shall certify the amount of the normal cost of the benefits
5under this Section (except for the defined contribution plan
6under subsection (k) of this Section), expressed as a
7percentage of payroll, to the State Actuary and the Commission
8on Government Forecasting and Accountability, and the employee
9contribution under this subsection shall be reduced to that
10amount beginning January 1 of the following year. Thereafter,
11if the normal cost of the benefits under this Section (except
12for the defined contribution plan under subsection (k) of this
13Section), expressed as a percentage of payroll and determined
14on or before November 1 of each year by the board of trustees
15of the affected pension fund, exceeds 6.2% of salary, then on
16or before December 1 of that year, the board of trustees shall
17certify the normal cost to the State Actuary and the Commission
18on Government Forecasting and Accountability, and the employee
19contributions shall revert back to 6.2% of salary beginning
20January 1 of the following year.
21 (k) No later than 5 months after the resolution or
22ordinance date, an affected pension fund shall prepare and
23implement a defined contribution plan for members or
24participants who are subject to this Section. The defined
25contribution plan developed under this subsection shall be a
26plan that aggregates employer and employee contributions in

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1individual participant accounts which, after meeting any other
2requirements, are used for payouts after retirement in
3accordance with this subsection and any other applicable laws.
4 (1) Each member or participant shall contribute a
5 minimum of 4% of his or her salary to the defined
6 contribution plan.
7 (2) For each participant in the defined contribution
8 plan who has been employed with the same employer for at
9 least one year, employer contributions shall be paid into
10 that participant's accounts at a rate expressed as a
11 percentage of salary. This rate may be set for individual
12 employees, but shall be no higher than 6% of salary and
13 shall be no lower than 2% of salary.
14 (3) Employer contributions shall vest when those
15 contributions are paid into a member's or participant's
16 account.
17 (4) The defined contribution plan shall provide a
18 variety of options for investments. These options shall
19 include investments handled by the Illinois State Board of
20 Investment as well as private sector investment options.
21 (5) The defined contribution plan shall provide a
22 variety of options for payouts to retirees and their
23 survivors.
24 (6) To the extent authorized under federal law and as
25 authorized by the affected pension fund, the defined
26 contribution plan shall allow former participants in the

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1 plan to transfer or roll over employee and employer
2 contributions, and the earnings thereon, into other
3 qualified retirement plans.
4 (7) Each affected pension fund shall reduce the
5 employee contributions credited to the member's defined
6 contribution plan account by an amount determined by that
7 affected pension fund to cover the cost of offering the
8 benefits under this subsection and any applicable
9 administrative fees.
10 (8) No person shall begin participating in the defined
11 contribution plan until it has attained qualified plan
12 status and received all necessary approvals from the U.S.
13 Internal Revenue Service.
14 (l) By accepting the benefits under this Section, a member
15or participant acknowledges and consents that benefits once
16earned may not be diminished, but that future benefits may be
17modified, including, but not limited to, changes in the
18retirement age at which a member or participant becomes
19eligible to receive future benefits, changes in the amount of
20the automatic annual increase for those future benefits, or the
21amount of the retirement annuity. Any increase in benefits
22under this Section does not apply unless it is approved by
23resolution or ordinance of the governing body of the unit of
24local government with regard to the members or participants
25under that unit of local government.
26 (m) In the case of a conflict between the provisions of

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1this Section and any other provision of this Code, the
2provisions of this Section shall control.
3 (40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
4 Sec. 2-101. Creation of system. A retirement system is
5created to provide retirement annuities, survivor's annuities
6and other benefits for certain members of the General Assembly,
7certain elected state officials, and their beneficiaries.
8 The system shall be known as the "General Assembly
9Retirement System". All its funds and property shall be a trust
10separate from all other entities, maintained for the purpose of
11securing payment of annuities and benefits under this Article.
12 Participation in the retirement system created under this
13Article is restricted to persons who became participants before
14the effective date of this amendatory Act of the 100th General
15Assembly. Beginning on that date, the System shall not accept
16any new participants.
17(Source: P.A. 83-1440.)
18 (40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
19 Sec. 2-105. Member. "Member": Members of the General
20Assembly of this State, including persons who enter military
21service while a member of the General Assembly, and any person
22serving as Governor, Lieutenant Governor, Secretary of State,
23Treasurer, Comptroller, or Attorney General for the period of
24service in such office.

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1 Any person who has served for 10 or more years as Clerk or
2Assistant Clerk of the House of Representatives, Secretary or
3Assistant Secretary of the Senate, or any combination thereof,
4may elect to become a member of this system while thenceforth
5engaged in such service by filing a written election with the
6board. Any person so electing shall be deemed an active member
7of the General Assembly for the purpose of validating and
8transferring any service credits earned under any of the funds
9and systems established under Articles 3 through 18 of this
10Code.
11 However, notwithstanding any other provision of this
12Article, a person shall not be deemed a member for the purposes
13of this Article unless he or she became a participant of the
14System before the effective date of this amendatory Act of the
15100th General Assembly.
16(Source: P.A. 85-1008.)
17 (40 ILCS 5/2-105.3 new)
18 Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A
19participant who first became a participant before January 1,
202011.
21 (40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
22 Sec. 2-107. Participant. "Participant": Any member who
23elects to participate; and any former member who elects to
24continue participation under Section 2-117.1, for the duration

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1of such continued participation. However, notwithstanding any
2other provision of this Article, a person shall not be deemed a
3participant for the purposes of this Article unless he or she
4became a participant of the System before the effective date of
5this amendatory Act of the 100th General Assembly.
6(Source: P.A. 86-1488.)
7 (40 ILCS 5/2-107.9 new)
8 Sec. 2-107.9. Future increase in income. "Future increase
9in income" means an increase to a Tier 1 employee's base pay
10that is offered to the Tier 1 employee for service under this
11Article after June 30, 2018 that qualifies as "salary", as
12defined in Section 2-108, or would qualify as "salary" but for
13the fact that it was offered to and accepted by the Tier 1
14employee under the condition set forth in subsection (c) of
15Section 2-110.3.
16 (40 ILCS 5/2-107.10 new)
17 Sec. 2-107.10. Base pay. As used in Section 2-107.9 of
18this Code, "base pay" means the Tier 1 employee's annualized
19rate of salary as of June 30, 2018. For a person returning to
20active service as a Tier 1 employee after June 30, 2018,
21however, "base pay" means the employee's annualized rate of
22salary as of the employee's last date of service prior to July
231, 2018. The System shall calculate the base pay of each Tier 1
24employee pursuant to this Section.

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1 (40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 2-108. Salary. "Salary":
5 (1) For members of the General Assembly, the total
6compensation paid to the member by the State for one year of
7service, including the additional amounts, if any, paid to the
8member as an officer pursuant to Section 1 of "An Act in
9relation to the compensation and emoluments of the members of
10the General Assembly", approved December 6, 1907, as now or
11hereafter amended.
12 (2) For the State executive officers specified in Section
132-105, the total compensation paid to the member for one year
14of service.
15 (3) For members of the System who are participants under
16Section 2-117.1, or who are serving as Clerk or Assistant Clerk
17of the House of Representatives or Secretary or Assistant
18Secretary of the Senate, the total compensation paid to the
19member for one year of service, but not to exceed the salary of
20the highest salaried officer of the General Assembly.
21 However, in the event that federal law results in any
22participant receiving imputed income based on the value of
23group term life insurance provided by the State, such imputed
24income shall not be included in salary for the purposes of this
25Article.

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1 Notwithstanding any other provision of this Section,
2"salary" does not include any future increase in income that is
3offered for service to a Tier 1 employee under this Article
4pursuant to the condition set forth in subsection (c) of
5Section 2-110.3 and accepted under that condition by a Tier 1
6employee who has made the election under paragraph (2) of
7subsection (a) of Section 2-110.3.
8 Notwithstanding any other provision of this Section,
9"salary" does not include any consideration payment made to a
10Tier 1 employee.
11(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
12 (40 ILCS 5/2-110.3 new)
13 Sec. 2-110.3. Election by Tier 1 employees.
14 (a) Each active Tier 1 employee shall make an irrevocable
15election either:
16 (1) to agree to delay his or her eligibility for
17 automatic annual increases in retirement annuity as
18 provided in subsection (a-1) of Section 2-119.1 and to have
19 the amount of the automatic annual increases in his or her
20 retirement annuity and survivor's annuity that are
21 otherwise provided for in this Article calculated,
22 instead, as provided in subsection (a-1) of Section
23 2-119.1; or
24 (2) to not agree to paragraph (1) of this subsection.
25 The election required under this subsection (a) shall be

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1made by each active Tier 1 employee no earlier than January 1,
22018 and no later than March 31, 2018, except that a person who
3returns to active service as a Tier 1 employee under this
4Article on or after January 1, 2018 and has not yet made an
5election under this Section must make the election under this
6subsection (a) within 60 days after returning to active service
7as a Tier 1 employee.
8 If a Tier 1 employee fails for any reason to make a
9required election under this subsection within the time
10specified, then the employee shall be deemed to have made the
11election under paragraph (2) of this subsection.
12 (a-5) If this Section is enjoined or stayed by an Illinois
13court or a court of competent jurisdiction pending the entry of
14a final and unappealable decision, and this Section is
15determined to be constitutional or otherwise valid by a final
16unappealable decision of an Illinois court or a court of
17competent jurisdiction, then the election procedure set forth
18in subsection (a) of this Section shall commence on the 180th
19calendar day after the date of the issuance of the final
20unappealable decision and shall conclude at the end of the
21270th calendar day after that date.
22 (a-10) All elections under subsection (a) that are made or
23deemed to be made before July 1, 2018 shall take effect on July
241, 2018. Elections that are made or deemed to be made on or
25after July 1, 2018 shall take effect on the first day of the
26month following the month in which the election is made or

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1deemed to be made.
2 (b) As adequate and legal consideration provided under this
3amendatory Act of the 100th General Assembly for making an
4election under paragraph (1) of subsection (a) of this Section,
5the State of Illinois shall be expressly and irrevocably
6prohibited from offering any future increases in income to a
7Tier 1 employee who has made an election under paragraph (1) of
8subsection (a) of this Section on the condition of not
9constituting salary under Section 2-108.
10 As adequate and legal consideration provided under this
11amendatory Act of the 100th General Assembly for making an
12election under paragraph (1) of subsection (a) of this Section,
13each Tier 1 employee who has made an election under paragraph
14(1) of subsection (a) of this Section shall receive a
15consideration payment equal to 10% of the contributions made by
16or on behalf of the employee under Section 2-126 before the
17effective date of that election. The State Comptroller shall
18pay the consideration payment to the Tier 1 employee out of
19funds appropriated for that purpose under Section 1.9 of the
20State Pension Funds Continuing Appropriation Act. The System
21shall calculate the amount of each consideration payment and,
22by July 1, 2018, shall certify to the State Comptroller the
23amount of the consideration payment, together with the name,
24address, and any other available payment information of the
25Tier 1 employee as found in the records of the System. The
26System shall make additional calculations and certifications

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1of consideration payments to the State Comptroller as the
2System deems necessary.
3 (c) A Tier 1 employee who makes the election under
4paragraph (2) of subsection (a) of this Section shall not be
5subject to paragraph (1) of subsection (a) of this Section.
6However, each future increase in income offered for service as
7a member under this Article to a Tier 1 employee who has made
8the election under paragraph (2) of subsection (a) of this
9Section shall be offered expressly and irrevocably on the
10condition of not constituting salary under Section 2-108 and
11that the Tier 1 employee's acceptance of the offered future
12increase in income shall constitute his or her agreement to
13that condition.
14 (d) The System shall make a good faith effort to contact
15each Tier 1 employee subject to this Section. The System shall
16mail information describing the required election to each Tier
171 employee by United States Postal Service mail to his or her
18last known address on file with the System. If the Tier 1
19employee is not responsive to other means of contact, it is
20sufficient for the System to publish the details of any
21required elections on its website or to publish those details
22in a regularly published newsletter or other existing public
23forum.
24 Tier 1 employees who are subject to this Section shall be
25provided with an election packet containing information
26regarding their options, as well as the forms necessary to make

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1the required election. Upon request, the System shall offer
2Tier 1 employees an opportunity to receive information from the
3System before making the required election. The information may
4be provided through video materials, group presentations,
5individual consultation with a member or authorized
6representative of the System in person or by telephone or other
7electronic means, or any combination of those methods. The
8System shall not provide advice or counseling with respect to
9which election a Tier 1 employee should make or specific to the
10legal or tax circumstances of or consequences to the Tier 1
11employee.
12 The System shall inform Tier 1 employees in the election
13packet required under this subsection that the Tier 1 employee
14may also wish to obtain information and counsel relating to the
15election required under this Section from any other available
16source, including, but not limited to, labor organizations and
17private counsel.
18 In no event shall the System, its staff, or the Board be
19held liable for any information given to a member regarding the
20elections under this Section. The System shall coordinate with
21the Illinois Department of Central Management Services and each
22other retirement system administering an election in
23accordance with this amendatory Act of the 100th General
24Assembly to provide information concerning the impact of the
25election set forth in this Section.
26 (e) Notwithstanding any other provision of law, each future

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1increase in income offered by the State of Illinois for service
2as a member must be offered expressly and irrevocably on the
3condition of not constituting "salary" under Section 2-108 to
4any Tier 1 employee who has made an election under paragraph
5(2) of subsection (a) of this Section. The offer shall also
6provide that the Tier 1 employee's acceptance of the offered
7future increase in income shall constitute his or her agreement
8to the condition set forth in this subsection.
9 For purposes of legislative intent, the condition set forth
10in this subsection shall be construed in a manner that ensures
11that the condition is not violated or circumvented through any
12contrivance of any kind.
13 (f) A member's election under this Section is not a
14prohibited election under subdivision (j)(1) of Section 1-119
15of this Code.
16 (g) No provision of this Section shall be interpreted in a
17way that would cause the System to cease to be a qualified plan
18under Section 401(a) of the Internal Revenue Code of 1986. The
19provisions of this Section shall be subject to and implemented
20in a manner that complies with Section 11 of Article IV of the
21Illinois Constitution.
22 (h) If an election created by this amendatory Act in any
23other Article of this Code or any change deriving from that
24election is determined to be unconstitutional or otherwise
25invalid by a final unappealable decision of an Illinois court
26or a court of competent jurisdiction, the invalidity of that

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1provision shall not in any way affect the validity of this
2Section or the changes deriving from the election required
3under this Section.
4 (40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
5 (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7 Sec. 2-119.1. Automatic increase in retirement annuity.
8 (a) Except as provided in subsection (a-1), a A participant
9who retires after June 30, 1967, and who has not received an
10initial increase under this Section before the effective date
11of this amendatory Act of 1991, shall, in January or July next
12following the first anniversary of retirement, whichever
13occurs first, and in the same month of each year thereafter,
14but in no event prior to age 60, have the amount of the
15originally granted retirement annuity increased as follows:
16for each year through 1971, 1 1/2%; for each year from 1972
17through 1979, 2%; and for 1980 and each year thereafter, 3%.
18Annuitants who have received an initial increase under this
19subsection prior to the effective date of this amendatory Act
20of 1991 shall continue to receive their annual increases in the
21same month as the initial increase.
22 (a-1) Notwithstanding any other provision of this Article,
23for a Tier 1 employee who made the election under paragraph (1)
24of subsection (a) of Section 2-110.3:
25 (1) The initial increase in retirement annuity under

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1 this Section shall occur on the January 1 occurring either
2 on or after the attainment of age 67 or the fifth
3 anniversary of the annuity start date, whichever is
4 earlier.
5 (2) The amount of each automatic annual increase in
6 retirement annuity or survivor's annuity occurring on or
7 after the effective date of that election shall be
8 calculated as a percentage of the originally granted
9 retirement annuity or survivor's annuity, equal to 3% or
10 one-half the annual unadjusted percentage increase (but
11 not less than zero) in the consumer price index-u for the
12 12 months ending with the September preceding each November
13 1, whichever is less. If the annual unadjusted percentage
14 change in the consumer price index-u for the 12 months
15 ending with the September preceding each November 1 is zero
16 or there is a decrease, then the annuity shall not be
17 increased.
18 For the purposes of this Section, "consumer price index-u"
19means the index published by the Bureau of Labor Statistics of
20the United States Department of Labor that measures the average
21change in prices of goods and services purchased by all urban
22consumers, United States city average, all items, 1982-84 =
23100. The new amount resulting from each annual adjustment shall
24be determined by the Public Pension Division of the Department
25of Insurance and made available to the board of the retirement
26system by November 1 of each year.

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1 (b) Beginning January 1, 1990, for eligible participants
2who remain in service after attaining 20 years of creditable
3service, the 3% increases provided under subsection (a) shall
4begin to accrue on the January 1 next following the date upon
5which the participant (1) attains age 55, or (2) attains 20
6years of creditable service, whichever occurs later, and shall
7continue to accrue while the participant remains in service;
8such increases shall become payable on January 1 or July 1,
9whichever occurs first, next following the first anniversary of
10retirement. For any person who has service credit in the System
11for the entire period from January 15, 1969 through December
1231, 1992, regardless of the date of termination of service, the
13reference to age 55 in clause (1) of this subsection (b) shall
14be deemed to mean age 50.
15 This subsection (b) does not apply to any person who first
16becomes a member of the System after August 8, 2003 (the
17effective date of Public Act 93-494) this amendatory Act of the
1893rd General Assembly.
19 (b-5) Notwithstanding any other provision of this Article,
20a participant who first becomes a participant on or after
21January 1, 2011 (the effective date of Public Act 96-889)
22shall, in January or July next following the first anniversary
23of retirement, whichever occurs first, and in the same month of
24each year thereafter, but in no event prior to age 67, have the
25amount of the retirement annuity then being paid increased by
263% or the annual unadjusted percentage increase in the Consumer

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1Price Index for All Urban Consumers as determined by the Public
2Pension Division of the Department of Insurance under
3subsection (a) of Section 2-108.1, whichever is less.
4 (c) The foregoing provisions relating to automatic
5increases are not applicable to a participant who retires
6before having made contributions (at the rate prescribed in
7Section 2-126) for automatic increases for less than the
8equivalent of one full year. However, in order to be eligible
9for the automatic increases, such a participant may make
10arrangements to pay to the system the amount required to bring
11the total contributions for the automatic increase to the
12equivalent of one year's contributions based upon his or her
13last salary.
14 (d) A participant who terminated service prior to July 1,
151967, with at least 14 years of service is entitled to an
16increase in retirement annuity beginning January, 1976, and to
17additional increases in January of each year thereafter.
18 The initial increase shall be 1 1/2% of the originally
19granted retirement annuity multiplied by the number of full
20years that the annuitant was in receipt of such annuity prior
21to January 1, 1972, plus 2% of the originally granted
22retirement annuity for each year after that date. The
23subsequent annual increases shall be at the rate of 2% of the
24originally granted retirement annuity for each year through
251979 and at the rate of 3% for 1980 and thereafter.
26 (e) Beginning January 1, 1990, and except as provided in

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1subsection (a-1), all automatic annual increases payable under
2this Section shall be calculated as a percentage of the total
3annuity payable at the time of the increase, including previous
4increases granted under this Article.
5(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
6 (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
7 (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9 Sec. 2-124. Contributions by State.
10 (a) The State shall make contributions to the System by
11appropriations of amounts which, together with the
12contributions of participants, interest earned on investments,
13and other income will meet the cost of maintaining and
14administering the System on a 90% funded basis in accordance
15with actuarial recommendations.
16 (b) The Board shall determine the amount of State
17contributions required for each fiscal year on the basis of the
18actuarial tables and other assumptions adopted by the Board and
19the prescribed rate of interest, using the formula in
20subsection (c).
21 (c) For State fiscal years 2018 through 2045 (except as
22otherwise provided for fiscal year 2019), the minimum
23contribution to the System to be made by the State for each
24fiscal year shall be an amount determined by the System to be
25sufficient to bring the total assets of the System up to 90% of

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1the total actuarial liabilities of the System by the end of
2State fiscal year 2045. In making these determinations, the
3required State contribution shall be calculated each year as a
4level percentage of total payroll, including payroll that is
5not deemed pensionable, but excluding payroll attributable to
6participants in the defined contribution plan under Section
72-165.1, over the years remaining to and including fiscal year
82045 and shall be determined under the projected unit credit
9actuarial cost method.
10 For State fiscal year 2019:
11 (1) The initial calculation and certification shall be
12 based on the amount determined above.
13 (2) For purposes of the recertification due on or
14 before May 1, 2018, the recalculation of the required State
15 contribution for fiscal year 2019 shall take into account
16 the effect on the System's liabilities of the elections
17 made under Section 2-110.3.
18 (3) For purposes of the recertification due on or
19 before October 1, 2018, the total required State
20 contribution for fiscal year 2019 shall be reduced by the
21 amount of the consideration payments made to Tier 1
22 employees who made the election under paragraph (1) of
23 subsection (a) of Section 2-110.3.
24 Beginning in State fiscal year 2018, any increase or
25decrease in State contribution over the prior fiscal year due
26exclusively to changes in actuarial or investment assumptions

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1adopted by the Board shall be included in the State
2contribution to the System, as a percentage of the applicable
3employee payroll, and shall be increased in equal annual
4increments so that by the State fiscal year occurring 5 years
5after the adoption of the actuarial or investment assumptions,
6the State is contributing at the rate otherwise required under
7this Section.
8 If Section 2-110.3 is determined to be unconstitutional or
9otherwise invalid by a final unappealable decision of an
10Illinois court or a court of competent jurisdiction, then the
11changes made to this Section by this amendatory Act of the
12100th General Assembly shall not take effect and are repealed
13by operation of law.
14 For State fiscal years 2012 through 2017 2045, the minimum
15contribution to the System to be made by the State for each
16fiscal year shall be an amount determined by the System to be
17sufficient to bring the total assets of the System up to 90% of
18the total actuarial liabilities of the System by the end of
19State fiscal year 2045. In making these determinations, the
20required State contribution shall be calculated each year as a
21level percentage of payroll over the years remaining to and
22including fiscal year 2045 and shall be determined under the
23projected unit credit actuarial cost method.
24 For State fiscal years 1996 through 2005, the State
25contribution to the System, as a percentage of the applicable
26employee payroll, shall be increased in equal annual increments

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1so that by State fiscal year 2011, the State is contributing at
2the rate required under this Section.
3 Notwithstanding any other provision of this Article, the
4total required State contribution for State fiscal year 2006 is
5$4,157,000.
6 Notwithstanding any other provision of this Article, the
7total required State contribution for State fiscal year 2007 is
8$5,220,300.
9 For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15 Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2010 is
17$10,454,000 and shall be made from the proceeds of bonds sold
18in fiscal year 2010 pursuant to Section 7.2 of the General
19Obligation Bond Act, less (i) the pro rata share of bond sale
20expenses determined by the System's share of total bond
21proceeds, (ii) any amounts received from the General Revenue
22Fund in fiscal year 2010, and (iii) any reduction in bond
23proceeds due to the issuance of discounted bonds, if
24applicable.
25 Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2011 is

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1the amount recertified by the System on or before April 1, 2011
2pursuant to Section 2-134 and shall be made from the proceeds
3of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
4the General Obligation Bond Act, less (i) the pro rata share of
5bond sale expenses determined by the System's share of total
6bond proceeds, (ii) any amounts received from the General
7Revenue Fund in fiscal year 2011, and (iii) any reduction in
8bond proceeds due to the issuance of discounted bonds, if
9applicable.
10 Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14 Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26 Notwithstanding any other provision of this Section, the

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1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 2-134, shall not
4exceed an amount equal to (i) the amount of the required State
5contribution that would have been calculated under this Section
6for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25 (d) For purposes of determining the required State
26contribution to the System, the value of the System's assets

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1shall be equal to the actuarial value of the System's assets,
2which shall be calculated as follows:
3 As of June 30, 2008, the actuarial value of the System's
4assets shall be equal to the market value of the assets as of
5that date. In determining the actuarial value of the System's
6assets for fiscal years after June 30, 2008, any actuarial
7gains or losses from investment return incurred in a fiscal
8year shall be recognized in equal annual amounts over the
95-year period following that fiscal year.
10 (e) For purposes of determining the required State
11contribution to the system for a particular year, the actuarial
12value of assets shall be assumed to earn a rate of return equal
13to the system's actuarially assumed rate of return.
14(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
1596-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
167-13-12.)
17 (40 ILCS 5/2-126) (from Ch. 108 1/2, par. 2-126)
18 (Text of Section WITHOUT the changes made by P.A. 98-599,
19which has been held unconstitutional)
20 Sec. 2-126. Contributions by participants.
21 (a) Each participant shall contribute toward the cost of
22his or her retirement annuity a percentage of each payment of
23salary received by him or her for service as a member as
24follows: for service between October 31, 1947 and January 1,
251959, 5%; for service between January 1, 1959 and June 30,

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11969, 6%; for service between July 1, 1969 and January 10,
21973, 6 1/2%; for service after January 10, 1973, 7%; for
3service after December 31, 1981, 8 1/2%.
4 (b) Beginning August 2, 1949, each male participant, and
5from July 1, 1971, each female participant shall contribute
6towards the cost of the survivor's annuity 2% of salary.
7 A participant who has no eligible survivor's annuity
8beneficiary may elect to cease making contributions for
9survivor's annuity under this subsection. A survivor's annuity
10shall not be payable upon the death of a person who has made
11this election, unless prior to that death the election has been
12revoked and the amount of the contributions that would have
13been paid under this subsection in the absence of the election
14is paid to the System, together with interest at the rate of 4%
15per year from the date the contributions would have been made
16to the date of payment.
17 (c) Beginning July 1, 1967, each participant shall
18contribute 1% of salary towards the cost of automatic increase
19in annuity provided in Section 2-119.1. These contributions
20shall be made concurrently with contributions for retirement
21annuity purposes.
22 (d) In addition, each participant serving as an officer of
23the General Assembly shall contribute, for the same purposes
24and at the same rates as are required of a regular participant,
25on each additional payment received as an officer. If the
26participant serves as an officer for at least 2 but less than 4

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1years, he or she shall contribute an amount equal to the amount
2that would have been contributed had the participant served as
3an officer for 4 years. Persons who serve as officers in the
487th General Assembly but cannot receive the additional payment
5to officers because of the ban on increases in salary during
6their terms may nonetheless make contributions based on those
7additional payments for the purpose of having the additional
8payments included in their highest salary for annuity purposes;
9however, persons electing to make these additional
10contributions must also pay an amount representing the
11corresponding employer contributions, as calculated by the
12System.
13 (e) Notwithstanding any other provision of this Article,
14the required contribution of a participant who first becomes a
15participant on or after January 1, 2011 shall not exceed the
16contribution that would be due under this Article if that
17participant's highest salary for annuity purposes were
18$106,800, plus any increases in that amount under Section
192-108.1.
20 (f) Beginning July 1, 2018 or the effective date of the
21Tier 1 employee's election under paragraph (1) of subsection
22(a) of Section 2-110.3, whichever is later, in lieu of the
23contributions otherwise required under this Section, each Tier
241 employee who made the election under paragraph (1) of
25subsection (a) of Section 2-110.3 shall contribute 8.5% of each
26payment of salary toward the cost of his or her retirement

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1annuity and 1.85% of each payment of salary toward the cost of
2the survivor's annuity.
3 (g) Notwithstanding subsection (f) of this Section,
4beginning July 1, 2018 or the effective date of the Tier 1
5employee's election under paragraph (1) of subsection (a) of
6Section 2-110.3, whichever is later, in lieu of the
7contributions otherwise required under this Section, each Tier
81 employee who made the election under paragraph (1) of
9subsection (a) of Section 2-110.3 and has elected to cease
10making contributions for survivor's annuity under subsection
11(b) of this Section, shall contribute 8.55% of each payment of
12salary toward the cost of his or her retirement annuity.
13(Source: P.A. 96-1490, eff. 1-1-11.)
14 (40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
15 (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17 Sec. 2-134. To certify required State contributions and
18submit vouchers.
19 (a) The Board shall certify to the Governor on or before
20December 15 of each year until December 15, 2011 the amount of
21the required State contribution to the System for the next
22fiscal year and shall specifically identify the System's
23projected State normal cost for that fiscal year. The
24certification shall include a copy of the actuarial
25recommendations upon which it is based and shall specifically

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1identify the System's projected State normal cost for that
2fiscal year.
3 On or before November 1 of each year, beginning November 1,
42012, the Board shall submit to the State Actuary, the
5Governor, and the General Assembly a proposed certification of
6the amount of the required State contribution to the System for
7the next fiscal year, along with all of the actuarial
8assumptions, calculations, and data upon which that proposed
9certification is based. On or before January 1 of each year
10beginning January 1, 2013, the State Actuary shall issue a
11preliminary report concerning the proposed certification and
12identifying, if necessary, recommended changes in actuarial
13assumptions that the Board must consider before finalizing its
14certification of the required State contributions. On or before
15January 15, 2013 and every January 15 thereafter, the Board
16shall certify to the Governor and the General Assembly the
17amount of the required State contribution for the next fiscal
18year. The Board's certification must note any deviations from
19the State Actuary's recommended changes, the reason or reasons
20for not following the State Actuary's recommended changes, and
21the fiscal impact of not following the State Actuary's
22recommended changes on the required State contribution.
23 On or before May 1, 2004, the Board shall recalculate and
24recertify to the Governor the amount of the required State
25contribution to the System for State fiscal year 2005, taking
26into account the amounts appropriated to and received by the

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1System under subsection (d) of Section 7.2 of the General
2Obligation Bond Act.
3 On or before July 1, 2005, the Board shall recalculate and
4recertify to the Governor the amount of the required State
5contribution to the System for State fiscal year 2006, taking
6into account the changes in required State contributions made
7by this amendatory Act of the 94th General Assembly.
8 On or before April 1, 2011, the Board shall recalculate and
9recertify to the Governor the amount of the required State
10contribution to the System for State fiscal year 2011, applying
11the changes made by Public Act 96-889 to the System's assets
12and liabilities as of June 30, 2009 as though Public Act 96-889
13was approved on that date.
14 As soon as practical after the effective date of this
15amendatory Act of the 100th General Assembly, the Board shall
16recalculate and recertify to the State Actuary, the Governor,
17and the General Assembly the amount of the State contribution
18to the System for State fiscal year 2018, taking into account
19the changes in required State contributions made by this
20amendatory Act of the 100th General Assembly. The State Actuary
21shall review the assumptions and valuations underlying the
22Board's revised certification and issue a preliminary report
23concerning the proposed recertification and identifying, if
24necessary, recommended changes in actuarial assumptions that
25the Board must consider before finalizing its certification of
26the required State contributions. The Board's final

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1certification must note any deviations from the State Actuary's
2recommended changes, the reason or reasons for not following
3the State Actuary's recommended changes, and the fiscal impact
4of not following the State Actuary's recommended changes on the
5required State contribution.
6 On or before May 1, 2018, the Board shall recalculate and
7recertify to the Governor and the General Assembly the amount
8of the required State contribution to the System for State
9fiscal year 2019, taking into account the effect on the
10System's liabilities of the elections made under Section
112-110.3.
12 On or before October 1, 2018, the Board shall recalculate
13and recertify to the Governor and the General Assembly the
14amount of the required State contribution to the System for
15State fiscal year 2019, taking into account the reduction
16specified under item (3) of subsection (c) of Section 2-124.
17 (b) Beginning in State fiscal year 1996, on or as soon as
18possible after the 15th day of each month the Board shall
19submit vouchers for payment of State contributions to the
20System, in a total monthly amount of one-twelfth of the
21required annual State contribution certified under subsection
22(a). From the effective date of this amendatory Act of the 93rd
23General Assembly through June 30, 2004, the Board shall not
24submit vouchers for the remainder of fiscal year 2004 in excess
25of the fiscal year 2004 certified contribution amount
26determined under this Section after taking into consideration

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1the transfer to the System under subsection (d) of Section
26z-61 of the State Finance Act. These vouchers shall be paid by
3the State Comptroller and Treasurer by warrants drawn on the
4funds appropriated to the System for that fiscal year. If in
5any month the amount remaining unexpended from all other
6appropriations to the System for the applicable fiscal year
7(including the appropriations to the System under Section 8.12
8of the State Finance Act and Section 1 of the State Pension
9Funds Continuing Appropriation Act) is less than the amount
10lawfully vouchered under this Section, the difference shall be
11paid from the General Revenue Fund under the continuing
12appropriation authority provided in Section 1.1 of the State
13Pension Funds Continuing Appropriation Act.
14 (c) The full amount of any annual appropriation for the
15System for State fiscal year 1995 shall be transferred and made
16available to the System at the beginning of that fiscal year at
17the request of the Board. Any excess funds remaining at the end
18of any fiscal year from appropriations shall be retained by the
19System as a general reserve to meet the System's accrued
20liabilities.
21(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
2297-694, eff. 6-18-12.)
23 (40 ILCS 5/2-162)
24 (Text of Section WITHOUT the changes made by P.A. 98-599,
25which has been held unconstitutional)

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1 Sec. 2-162. Application and expiration of new benefit
2increases.
3 (a) As used in this Section, "new benefit increase" means
4an increase in the amount of any benefit provided under this
5Article, or an expansion of the conditions of eligibility for
6any benefit under this Article, that results from an amendment
7to this Code that takes effect after the effective date of this
8amendatory Act of the 94th General Assembly. "New benefit
9increase", however, does not include any benefit increase
10resulting from the changes made to this Article by this
11amendatory Act of the 100th General Assembly.
12 (b) Notwithstanding any other provision of this Code or any
13subsequent amendment to this Code, every new benefit increase
14is subject to this Section and shall be deemed to be granted
15only in conformance with and contingent upon compliance with
16the provisions of this Section.
17 (c) The Public Act enacting a new benefit increase must
18identify and provide for payment to the System of additional
19funding at least sufficient to fund the resulting annual
20increase in cost to the System as it accrues.
21 Every new benefit increase is contingent upon the General
22Assembly providing the additional funding required under this
23subsection. The Commission on Government Forecasting and
24Accountability shall analyze whether adequate additional
25funding has been provided for the new benefit increase and
26shall report its analysis to the Public Pension Division of the

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1Department of Insurance Financial and Professional Regulation.
2A new benefit increase created by a Public Act that does not
3include the additional funding required under this subsection
4is null and void. If the Public Pension Division determines
5that the additional funding provided for a new benefit increase
6under this subsection is or has become inadequate, it may so
7certify to the Governor and the State Comptroller and, in the
8absence of corrective action by the General Assembly, the new
9benefit increase shall expire at the end of the fiscal year in
10which the certification is made.
11 (d) Every new benefit increase shall expire 5 years after
12its effective date or on such earlier date as may be specified
13in the language enacting the new benefit increase or provided
14under subsection (c). This does not prevent the General
15Assembly from extending or re-creating a new benefit increase
16by law.
17 (e) Except as otherwise provided in the language creating
18the new benefit increase, a new benefit increase that expires
19under this Section continues to apply to persons who applied
20and qualified for the affected benefit while the new benefit
21increase was in effect and to the affected beneficiaries and
22alternate payees of such persons, but does not apply to any
23other person, including without limitation a person who
24continues in service after the expiration date and did not
25apply and qualify for the affected benefit while the new
26benefit increase was in effect.

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1(Source: P.A. 94-4, eff. 6-1-05.)
2 (40 ILCS 5/2-165.1 new)
3 Sec. 2-165.1. Defined contribution plan.
4 (a) By July 1, 2018, the System shall prepare and implement
5a voluntary defined contribution plan for up to 5% of eligible
6active Tier 1 employees. The System shall determine the 5% cap
7by the number of active Tier 1 employees on the effective date
8of this Section. The defined contribution plan developed under
9this Section shall be a plan that aggregates employer and
10employee contributions in individual participant accounts
11which, after meeting any other requirements, are used for
12payouts after retirement in accordance with this Section and
13any other applicable laws.
14 As used in this Section, "defined benefit plan" means the
15retirement plan available under this Article to Tier 1
16employees who have not made the election authorized under this
17Section.
18 (1) Under the defined contribution plan, an active Tier
19 1 employee of this System could elect to cease accruing
20 benefits in the defined benefit plan under this Article and
21 begin accruing benefits for future service in the defined
22 contribution plan. Service credit under the defined
23 contribution plan may be used for determining retirement
24 eligibility under the defined benefit plan.
25 (2) Participants in the defined contribution plan

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1 shall pay employee contributions at the same rate as Tier 1
2 employees in this System who do not participate in the
3 defined contribution plan.
4 (3) State contributions shall be paid into the accounts
5 of all participants in the defined contribution plan at a
6 uniform rate, expressed as a percentage of compensation and
7 determined for each year. This rate shall be no higher than
8 the employer's normal cost for Tier 1 employees in the
9 defined benefit plan for that year, as determined by the
10 System and expressed as a percentage of compensation, and
11 shall be no lower than 3% of compensation. The State shall
12 adjust this rate annually.
13 (4) The defined contribution plan shall require 5 years
14 of participation in the defined contribution plan before
15 vesting in State contributions. If the participant fails to
16 vest in them, the State contributions, and the earnings
17 thereon, shall be forfeited.
18 (5) The defined contribution plan may provide for
19 participants in the plan to be eligible for defined
20 disability benefits. If it does, the System shall reduce
21 the employee contributions credited to the participant's
22 defined contribution plan account by an amount determined
23 by the System to cover the cost of offering such benefits.
24 (6) The defined contribution plan shall provide a
25 variety of options for investments. These options shall
26 include investments handled by the Illinois State Board of

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1 Investment as well as private sector investment options.
2 (7) The defined contribution plan shall provide a
3 variety of options for payouts to retirees and their
4 survivors.
5 (8) To the extent authorized under federal law and as
6 authorized by the System, the plan shall allow former
7 participants in the plan to transfer or roll over employee
8 and vested State contributions, and the earnings thereon,
9 into other qualified retirement plans.
10 (9) The System shall reduce the employee contributions
11 credited to the participant's defined contribution plan
12 account by an amount determined by the System to cover the
13 cost of offering these benefits and any applicable
14 administrative fees.
15 (b) Only persons who are active Tier 1 employees of the
16System on the effective date of this Section are eligible to
17participate in the defined contribution plan. Participation in
18the defined contribution plan shall be limited to the first 5%
19of eligible persons who elect to participate. The election to
20participate in the defined contribution plan is voluntary and
21irrevocable.
22 (c) An eligible active Tier 1 employee may irrevocably
23elect to participate in the defined contribution plan by filing
24with the System a written application to participate that is
25received by the System prior to its determination that 5% of
26eligible persons have elected to participate in the defined

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1contribution plan.
2 When the System first determines that 5% of eligible
3persons have elected to participate in the defined contribution
4plan, the System shall provide notice to previously eligible
5employees that the plan is no longer available and shall cease
6accepting applications to participate.
7 (d) The System shall make a good faith effort to contact
8each active Tier 1 employee who is eligible to participate in
9the defined contribution plan. The System shall mail
10information describing the option to join the defined
11contribution plan to each of these employees to his or her last
12known address on file with the System. If the employee is not
13responsive to other means of contact, it is sufficient for the
14System to publish the details of the option on its website.
15 Upon request for further information describing the
16option, the System shall provide employees with information
17from the System before exercising the option to join the plan,
18including information on the impact to their vested benefits or
19non-vested service. The individual consultation shall include
20projections of the participant's defined benefits at
21retirement or earlier termination of service and the value of
22the participant's account at retirement or earlier termination
23of service. The System shall not provide advice or counseling
24with respect to whether the employee should exercise the
25option. The System shall inform Tier 1 employees who are
26eligible to participate in the defined contribution plan that

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1they may also wish to obtain information and counsel relating
2to their option from any other available source, including but
3not limited to labor organizations, private counsel, and
4financial advisors.
5 (e) In no event shall the System, its staff, its authorized
6representatives, or the Board be liable for any information
7given to an employee under this Section. The System may
8coordinate with the Illinois Department of Central Management
9Services and other retirement systems administering a defined
10contribution plan in accordance with this amendatory Act of the
11100th General Assembly to provide information concerning the
12impact of the option set forth in this Section.
13 (f) Notwithstanding any other provision of this Section, no
14person shall begin participating in the defined contribution
15plan until it has attained qualified plan status and received
16all necessary approvals from the U.S. Internal Revenue Service.
17 (g) The System shall report on its progress under this
18Section, including the available details of the defined
19contribution plan and the System's plans for informing eligible
20Tier 1 employees about the plan, to the Governor and the
21General Assembly on or before January 15, 2018.
22 (h) The Illinois State Board of Investments shall be the
23plan sponsor for the defined contribution plan established
24under this Section.
25 (i) The intent of this amendatory Act of the 100th General
26Assembly is to ensure that the State's normal cost of

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1participation in the defined contribution plan is similar, and
2if possible equal, to the State's normal cost of participation
3in the defined benefit plan, unless a lower State's normal cost
4is necessary to ensure cost neutrality.
5 (40 ILCS 5/2-166.1 new)
6 Sec. 2-166.1. Defined contribution plan; termination. If
7the defined contribution plan is terminated or becomes
8inoperative pursuant to law, then each participant in the plan
9shall automatically be deemed to have been a contributing Tier
101 employee in the System's defined benefit plan during the time
11in which he or she participated in the defined contribution
12plan, and for that purpose the System shall be entitled to
13recover the amounts in the participant's defined contribution
14accounts.
15 (40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
16 (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18 Sec. 14-103.10. Compensation.
19 (a) For periods of service prior to January 1, 1978, the
20full rate of salary or wages payable to an employee for
21personal services performed if he worked the full normal
22working period for his position, subject to the following
23maximum amounts: (1) prior to July 1, 1951, $400 per month or
24$4,800 per year; (2) between July 1, 1951 and June 30, 1957

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1inclusive, $625 per month or $7,500 per year; (3) beginning
2July 1, 1957, no limitation.
3 In the case of service of an employee in a position
4involving part-time employment, compensation shall be
5determined according to the employees' earnings record.
6 (b) For periods of service on and after January 1, 1978,
7all remuneration for personal services performed defined as
8"wages" under the Social Security Enabling Act, including that
9part of such remuneration which is in excess of any maximum
10limitation provided in such Act, and including any benefits
11received by an employee under a sick pay plan in effect before
12January 1, 1981, but excluding lump sum salary payments:
13 (1) for vacation,
14 (2) for accumulated unused sick leave,
15 (3) upon discharge or dismissal,
16 (4) for approved holidays.
17 (c) For periods of service on or after December 16, 1978,
18compensation also includes any benefits, other than lump sum
19salary payments made at termination of employment, which an
20employee receives or is eligible to receive under a sick pay
21plan authorized by law.
22 (d) For periods of service after September 30, 1985,
23compensation also includes any remuneration for personal
24services not included as "wages" under the Social Security
25Enabling Act, which is deducted for purposes of participation
26in a program established pursuant to Section 125 of the

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1Internal Revenue Code or its successor laws.
2 (e) For members for which Section 1-160 applies for periods
3of service on and after January 1, 2011, all remuneration for
4personal services performed defined as "wages" under the Social
5Security Enabling Act, excluding remuneration that is in excess
6of the annual earnings, salary, or wages of a member or
7participant, as provided in subsection (b-5) of Section 1-160,
8but including any benefits received by an employee under a sick
9pay plan in effect before January 1, 1981. Compensation shall
10exclude lump sum salary payments:
11 (1) for vacation;
12 (2) for accumulated unused sick leave;
13 (3) upon discharge or dismissal; and
14 (4) for approved holidays.
15 (f) Notwithstanding the other provisions of this Section,
16for service on or after July 1, 2013, "compensation" does not
17include any stipend payable to an employee for service on a
18board or commission.
19 (g) Notwithstanding any other provision of this Section,
20"compensation" does not include any future increase in income
21that is offered for service by a department to a Tier 1
22employee under this Article pursuant to the condition set forth
23in subsection (c) of Section 14-106.5 and accepted under that
24condition by a Tier 1 employee who has made the election under
25paragraph (2) of subsection (a) of Section 14-106.5.
26 (h) Notwithstanding any other provision of this Section,

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1"compensation" does not include any consideration payment made
2to a Tier 1 employee.
3(Source: P.A. 98-449, eff. 8-16-13.)
4 (40 ILCS 5/14-103.41 new)
5 Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An
6employee under this Article who first became a member or
7participant before January 1, 2011 under any reciprocal
8retirement system or pension fund established under this Code
9other than a retirement system or pension fund established
10under Article 2, 3, 4, 5, 6, or 18 of this Code.
11 (40 ILCS 5/14-103.42 new)
12 Sec. 14-103.42. Future increase in income. "Future
13increase in income" means an increase to a Tier 1 employee's
14base pay that is offered by a department to the Tier 1 employee
15for service under this Article after June 30, 2019 that
16qualifies as "compensation", as defined in Section 14-103.10,
17or would qualify as "compensation" but for the fact that it was
18offered to and accepted by the Tier 1 employee under the
19condition set forth in subsection (c) of Section 14-106.5. The
20term "future increase in income" includes an increase to a Tier
211 employee's base pay that is paid to the Tier 1 employee
22pursuant to an extension, amendment, or renewal of any
23employment contract or collective bargaining agreement after
24the effective date of this Section.

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1 (40 ILCS 5/14-103.43 new)
2 Sec. 14-103.43. Base pay. As used in Section 14-103.42 of
3this Code, "base pay" means the greater of either (i) the Tier
41 employee's annualized rate of compensation as of June 30,
52019, or (ii) the Tier 1 employee's annualized rate of
6compensation immediately preceding the expiration, renewal, or
7amendment of an employment contract or collective bargaining
8agreement in effect on the effective date of this Section. For
9a person returning to active service as a Tier 1 employee after
10June 30, 2019, however, "base pay" means the employee's
11annualized rate of compensation as of the employee's last date
12of service prior to July 1, 2019. The System shall calculate
13the base pay of each Tier 1 employee pursuant to this Section.
14 (40 ILCS 5/14-106.5 new)
15 Sec. 14-106.5. Election by Tier 1 employees.
16 (a) Each active Tier 1 employee shall make an irrevocable
17election either:
18 (1) to agree to delay his or her eligibility for
19 automatic annual increases in retirement annuity as
20 provided in subsection (a-1) of Section 14-114 and to have
21 the amount of the automatic annual increases in his or her
22 retirement annuity and survivors or widow's annuity that
23 are otherwise provided for in this Article calculated,
24 instead, as provided in subsection (a-1) of Section 14-114;

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1 or
2 (2) to not agree to paragraph (1) of this subsection.
3 The election required under this subsection (a) shall be
4made by each active Tier 1 employee no earlier than January 1,
52019 and no later than March 31, 2019, except that:
6 (i) a person who becomes a Tier 1 employee under this
7 Article on or after January 1, 2019 must make the election
8 under this subsection (a) within 60 days after becoming a
9 Tier 1 employee; and
10 (ii) a person who returns to active service as a Tier 1
11 employee under this Article on or after January 1, 2019 and
12 has not yet made an election under this Section must make
13 the election under this subsection (a) within 60 days after
14 returning to active service as a Tier 1 employee.
15 If a Tier 1 employee fails for any reason to make a
16required election under this subsection within the time
17specified, then the employee shall be deemed to have made the
18election under paragraph (2) of this subsection.
19 (a-5) If this Section is enjoined or stayed by an Illinois
20court or a court of competent jurisdiction pending the entry of
21a final and unappealable decision, and this Section is
22determined to be constitutional or otherwise valid by a final
23unappealable decision of an Illinois court or a court of
24competent jurisdiction, then the election procedure set forth
25in subsection (a) of this Section shall commence on the 180th
26calendar day after the date of the issuance of the final

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1unappealable decision and shall conclude at the end of the
2270th calendar day after that date.
3 (a-10) All elections under subsection (a) that are made or
4deemed to be made before July 1, 2019 shall take effect on July
51, 2019. Elections that are made or deemed to be made on or
6after July 1, 2019 shall take effect on the first day of the
7month following the month in which the election is made or
8deemed to be made.
9 (b) As adequate and legal consideration provided under this
10amendatory Act of the 100th General Assembly for making an
11election under paragraph (1) of subsection (a) of this Section,
12the department shall be expressly and irrevocably prohibited
13from offering any future increases in income to a Tier 1
14employee who has made an election under paragraph (1) of
15subsection (a) of this Section on the condition of not
16constituting compensation under Section 14-103.10.
17 As adequate and legal consideration provided under this
18amendatory Act of the 100th General Assembly for making an
19election under paragraph (1) of subsection (a) of this Section,
20each Tier 1 employee who has made an election under paragraph
21(1) of subsection (a) of this Section shall receive a
22consideration payment equal to 10% of the contributions made by
23or on behalf of the employee before the effective date of that
24election. The State Comptroller shall pay the consideration
25payment to the Tier 1 employee out of funds appropriated for
26that purpose under Section 1.9 of the State Pension Funds

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1Continuing Appropriation Act. The System shall calculate the
2amount of each consideration payment and, by July 1, 2019,
3shall certify to the State Comptroller the amount of the
4consideration payment, together with the name, address, and any
5other available payment information of the Tier 1 employee as
6found in the records of the System. The System shall make
7additional calculations and certifications of consideration
8payments to the State Comptroller as it deems necessary.
9 (c) A Tier 1 employee who makes the election under
10paragraph (2) of subsection (a) of this Section shall not be
11subject to paragraph (1) of subsection (a) of this Section.
12However, each future increase in income offered by a department
13under this Article to a Tier 1 employee who has made the
14election under paragraph (2) of subsection (a) of this Section
15shall be offered by the department expressly and irrevocably on
16the condition of not constituting compensation under Section
1714-103.10 and that the Tier 1 employee's acceptance of the
18offered future increase in income shall constitute his or her
19agreement to that condition.
20 (d) The System shall make a good faith effort to contact
21each Tier 1 employee subject to this Section. The System shall
22mail information describing the required election to each Tier
231 employee by United States Postal Service mail to his or her
24last known address on file with the System. If the Tier 1
25employee is not responsive to other means of contact, it is
26sufficient for the System to publish the details of any

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1required elections on its website or to publish those details
2in a regularly published newsletter or other existing public
3forum.
4 Tier 1 employees who are subject to this Section shall be
5provided with an election packet containing information
6regarding their options, as well as the forms necessary to make
7the required election. Upon request, the System shall offer
8Tier 1 employees an opportunity to receive information from the
9System before making the required election. The information may
10consist of video materials, group presentations, individual
11consultation with a member or authorized representative of the
12System in person or by telephone or other electronic means, or
13any combination of those methods. The System shall not provide
14advice or counseling with respect to which election a Tier 1
15employee should make or specific to the legal or tax
16circumstances of or consequences to the Tier 1 employee.
17 The System shall inform Tier 1 employees in the election
18packet required under this subsection that the Tier 1 employee
19may also wish to obtain information and counsel relating to the
20election required under this Section from any other available
21source, including, but not limited to, labor organizations and
22private counsel.
23 In no event shall the System, its staff, or the Board be
24held liable for any information given to a member regarding the
25elections under this Section. The System shall coordinate with
26the Illinois Department of Central Management Services and each

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1other retirement system administering an election in
2accordance with this amendatory Act of the 100th General
3Assembly to provide information concerning the impact of the
4election set forth in this Section.
5 (e) Notwithstanding any other provision of law, a
6department under this Article is required to offer each future
7increase in income expressly and irrevocably on the condition
8of not constituting "compensation" under Section 14-103.10 to
9any Tier 1 employee who has made an election under paragraph
10(2) of subsection (a) of this Section. The offer shall also
11provide that the Tier 1 employee's acceptance of the offered
12future increase in income shall constitute his or her agreement
13to the condition set forth in this subsection.
14 For purposes of legislative intent, the condition set forth
15in this subsection shall be construed in a manner that ensures
16that the condition is not violated or circumvented through any
17contrivance of any kind.
18 (f) A member's election under this Section is not a
19prohibited election under subdivision (j)(1) of Section 1-119
20of this Code.
21 (g) No provision of this Section shall be interpreted in a
22way that would cause the System to cease to be a qualified plan
23under Section 401(a) of the Internal Revenue Code of 1986. The
24provisions of this Section shall be subject to and implemented
25in a manner that complies with Section 21 of Article V of the
26Illinois Constitution.

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1 (h) If an election created by this amendatory Act in any
2other Article of this Code or any change deriving from that
3election is determined to be unconstitutional or otherwise
4invalid by a final unappealable decision of an Illinois court
5or a court of competent jurisdiction, the invalidity of that
6provision shall not in any way affect the validity of this
7Section or the changes deriving from the election required
8under this Section.
9 (40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)
10 (Text of Section WITHOUT the changes made by P.A. 98-599,
11which has been held unconstitutional)
12 Sec. 14-114. Automatic increase in retirement annuity.
13 (a) Subject to the provisions of subsections (a-1), any Any
14person receiving a retirement annuity under this Article who
15retires having attained age 60, or who retires before age 60
16having at least 35 years of creditable service, or who retires
17on or after January 1, 2001 at an age which, when added to the
18number of years of his or her creditable service, equals at
19least 85, shall, on January 1 next following the first full
20year of retirement, have the amount of the then fixed and
21payable monthly retirement annuity increased 3%. Any person
22receiving a retirement annuity under this Article who retires
23before attainment of age 60 and with less than (i) 35 years of
24creditable service if retirement is before January 1, 2001, or
25(ii) the number of years of creditable service which, when

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1added to the member's age, would equal 85, if retirement is on
2or after January 1, 2001, shall have the amount of the fixed
3and payable retirement annuity increased by 3% on the January 1
4occurring on or next following (1) attainment of age 60, or (2)
5the first anniversary of retirement, whichever occurs later.
6However, for persons who receive the alternative retirement
7annuity under Section 14-110, references in this subsection (a)
8to attainment of age 60 shall be deemed to refer to attainment
9of age 55. For a person receiving early retirement incentives
10under Section 14-108.3 whose retirement annuity began after
11January 1, 1992 pursuant to an extension granted under
12subsection (e) of that Section, the first anniversary of
13retirement shall be deemed to be January 1, 1993. For a person
14who retires on or after June 28, 2001 and on or before October
151, 2001, and whose retirement annuity is calculated, in whole
16or in part, under Section 14-110 or subsection (g) or (h) of
17Section 14-108, the first anniversary of retirement shall be
18deemed to be January 1, 2002.
19 On each January 1 following the date of the initial
20increase under this subsection, the employee's monthly
21retirement annuity shall be increased by an additional 3%.
22 Beginning January 1, 1990, and except as provided in
23subsection (a-1), all automatic annual increases payable under
24this Section shall be calculated as a percentage of the total
25annuity payable at the time of the increase, including previous
26increases granted under this Article.

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1 (a-1) Notwithstanding any other provision of this Article,
2for a Tier 1 employee who made the election under paragraph (1)
3of subsection (a) of Section 14-106.5:
4 (1) The initial increase in retirement annuity under
5 this Section shall occur on the January 1 occurring either
6 on or after the attainment of age 67 or the fifth
7 anniversary of the annuity start date, whichever is
8 earlier.
9 (2) The amount of each automatic annual increase in
10 retirement annuity or survivors or widow's annuity
11 occurring on or after the effective date of that election
12 shall be calculated as a percentage of the originally
13 granted retirement annuity or survivors or widow's
14 annuity, equal to 3% or one-half the annual unadjusted
15 percentage increase (but not less than zero) in the
16 consumer price index-u for the 12 months ending with the
17 September preceding each November 1, whichever is less. If
18 the annual unadjusted percentage change in the consumer
19 price index-u for the 12 months ending with the September
20 preceding each November 1 is zero or there is a decrease,
21 then the annuity shall not be increased.
22 For the purposes of this Section, "consumer price index-u"
23means the index published by the Bureau of Labor Statistics of
24the United States Department of Labor that measures the average
25change in prices of goods and services purchased by all urban
26consumers, United States city average, all items, 1982-84 =

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1100. The new amount resulting from each annual adjustment shall
2be determined by the Public Pension Division of the Department
3of Insurance and made available to the board of the retirement
4system by November 1 of each year.
5 (b) The provisions of subsection (a) of this Section shall
6be applicable to an employee only if the employee makes the
7additional contributions required after December 31, 1969 for
8the purpose of the automatic increases for not less than the
9equivalent of one full year. If an employee becomes an
10annuitant before his additional contributions equal one full
11year's contributions based on his salary at the date of
12retirement, the employee may pay the necessary balance of the
13contributions to the system, without interest, and be eligible
14for the increasing annuity authorized by this Section.
15 (c) The provisions of subsection (a) of this Section shall
16not be applicable to any annuitant who is on retirement on
17December 31, 1969, and thereafter returns to State service,
18unless the member has established at least one year of
19additional creditable service following reentry into service.
20 (d) In addition to other increases which may be provided by
21this Section, on January 1, 1981 any annuitant who was
22receiving a retirement annuity on or before January 1, 1971
23shall have his retirement annuity then being paid increased $1
24per month for each year of creditable service. On January 1,
251982, any annuitant who began receiving a retirement annuity on
26or before January 1, 1977, shall have his retirement annuity

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1then being paid increased $1 per month for each year of
2creditable service.
3 On January 1, 1987, any annuitant who began receiving a
4retirement annuity on or before January 1, 1977, shall have the
5monthly retirement annuity increased by an amount equal to 8
6per year of creditable service times the number of years that
7have elapsed since the annuity began.
8 (e) Every person who receives the alternative retirement
9annuity under Section 14-110 and who is eligible to receive the
103% increase under subsection (a) on January 1, 1986, shall also
11receive on that date a one-time increase in retirement annuity
12equal to the difference between (1) his actual retirement
13annuity on that date, including any increases received under
14subsection (a), and (2) the amount of retirement annuity he
15would have received on that date if the amendments to
16subsection (a) made by Public Act 84-162 had been in effect
17since the date of his retirement.
18(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
1992-651, eff. 7-11-02.)
20 (40 ILCS 5/14-131)
21 Sec. 14-131. Contributions by State.
22 (a) The State shall make contributions to the System by
23appropriations of amounts which, together with other employer
24contributions from trust, federal, and other funds, employee
25contributions, investment income, and other income, will be

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1sufficient to meet the cost of maintaining and administering
2the System on a 90% funded basis in accordance with actuarial
3recommendations.
4 For the purposes of this Section and Section 14-135.08,
5references to State contributions refer only to employer
6contributions and do not include employee contributions that
7are picked up or otherwise paid by the State or a department on
8behalf of the employee.
9 (b) The Board shall determine the total amount of State
10contributions required for each fiscal year on the basis of the
11actuarial tables and other assumptions adopted by the Board,
12using the formula in subsection (e).
13 The Board shall also determine a State contribution rate
14for each fiscal year, expressed as a percentage of payroll,
15based on the total required State contribution for that fiscal
16year (less the amount received by the System from
17appropriations under Section 8.12 of the State Finance Act and
18Section 1 of the State Pension Funds Continuing Appropriation
19Act, if any, for the fiscal year ending on the June 30
20immediately preceding the applicable November 15 certification
21deadline), the estimated payroll (including all forms of
22compensation) for personal services rendered by eligible
23employees, and the recommendations of the actuary.
24 For the purposes of this Section and Section 14.1 of the
25State Finance Act, the term "eligible employees" includes
26employees who participate in the System, persons who may elect

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1to participate in the System but have not so elected, persons
2who are serving a qualifying period that is required for
3participation, and annuitants employed by a department as
4described in subdivision (a)(1) or (a)(2) of Section 14-111.
5 (c) Contributions shall be made by the several departments
6for each pay period by warrants drawn by the State Comptroller
7against their respective funds or appropriations based upon
8vouchers stating the amount to be so contributed. These amounts
9shall be based on the full rate certified by the Board under
10Section 14-135.08 for that fiscal year. From the effective date
11of this amendatory Act of the 93rd General Assembly through the
12payment of the final payroll from fiscal year 2004
13appropriations, the several departments shall not make
14contributions for the remainder of fiscal year 2004 but shall
15instead make payments as required under subsection (a-1) of
16Section 14.1 of the State Finance Act. The several departments
17shall resume those contributions at the commencement of fiscal
18year 2005.
19 (c-1) Notwithstanding subsection (c) of this Section, for
20fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,
21contributions by the several departments are not required to be
22made for General Revenue Funds payrolls processed by the
23Comptroller. Payrolls paid by the several departments from all
24other State funds must continue to be processed pursuant to
25subsection (c) of this Section.
26 (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,

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12016, and 2017 only, on or as soon as possible after the 15th
2day of each month, the Board shall submit vouchers for payment
3of State contributions to the System, in a total monthly amount
4of one-twelfth of the fiscal year General Revenue Fund
5contribution as certified by the System pursuant to Section
614-135.08 of the Illinois Pension Code.
7 (d) If an employee is paid from trust funds or federal
8funds, the department or other employer shall pay employer
9contributions from those funds to the System at the certified
10rate, unless the terms of the trust or the federal-State
11agreement preclude the use of the funds for that purpose, in
12which case the required employer contributions shall be paid by
13the State. From the effective date of this amendatory Act of
14the 93rd General Assembly through the payment of the final
15payroll from fiscal year 2004 appropriations, the department or
16other employer shall not pay contributions for the remainder of
17fiscal year 2004 but shall instead make payments as required
18under subsection (a-1) of Section 14.1 of the State Finance
19Act. The department or other employer shall resume payment of
20contributions at the commencement of fiscal year 2005.
21 (e) For State fiscal years 2018 through 2045 (except as
22otherwise provided for fiscal year 2020), the minimum
23contribution to the System to be made by the State for each
24fiscal year shall be an amount determined by the System to be
25sufficient to bring the total assets of the System up to 90% of
26the total actuarial liabilities of the System by the end of

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1State fiscal year 2045. In making these determinations, the
2required State contribution shall be calculated each year as a
3level percentage of total payroll, including payroll that is
4not deemed pensionable, over the years remaining to and
5including fiscal year 2045 and shall be determined under the
6projected unit credit actuarial cost method.
7 For State fiscal year 2020:
8 (1) The initial calculation and certification shall be
9 based on the amount determined above.
10 (2) For purposes of the recertification due on or
11 before May 1, 2019, the recalculation of the required State
12 contribution for fiscal year 2020 shall take into account
13 the effect on the System's liabilities of the elections
14 made under Section 14-106.5.
15 (3) For purposes of the recertification due on or
16 before October 1, 2019, the total required State
17 contribution for fiscal year 2020 shall be reduced by the
18 amount of the consideration payments made to Tier 1
19 employees who made the election under paragraph (1) of
20 subsection (a) of Section 14-106.5.
21 Beginning in State fiscal year 2018, any increase or
22decrease in State contribution over the prior fiscal year due
23exclusively to changes in actuarial or investment assumptions
24adopted by the Board shall be included in the State
25contribution to the System, as a percentage of the applicable
26employee payroll, and shall be increased in equal annual

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1increments so that by the State fiscal year occurring 5 years
2after the adoption of the actuarial or investment assumptions,
3the State is contributing at the rate otherwise required under
4this Section.
5 For State fiscal years 2012 through 2017 2045, the minimum
6contribution to the System to be made by the State for each
7fiscal year shall be an amount determined by the System to be
8sufficient to bring the total assets of the System up to 90% of
9the total actuarial liabilities of the System by the end of
10State fiscal year 2045. In making these determinations, the
11required State contribution shall be calculated each year as a
12level percentage of payroll over the years remaining to and
13including fiscal year 2045 and shall be determined under the
14projected unit credit actuarial cost method.
15 For State fiscal years 1996 through 2005, the State
16contribution to the System, as a percentage of the applicable
17employee payroll, shall be increased in equal annual increments
18so that by State fiscal year 2011, the State is contributing at
19the rate required under this Section; except that (i) for State
20fiscal year 1998, for all purposes of this Code and any other
21law of this State, the certified percentage of the applicable
22employee payroll shall be 5.052% for employees earning eligible
23creditable service under Section 14-110 and 6.500% for all
24other employees, notwithstanding any contrary certification
25made under Section 14-135.08 before the effective date of this
26amendatory Act of 1997, and (ii) in the following specified

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1State fiscal years, the State contribution to the System shall
2not be less than the following indicated percentages of the
3applicable employee payroll, even if the indicated percentage
4will produce a State contribution in excess of the amount
5otherwise required under this subsection and subsection (a):
69.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
72002; 10.6% in FY 2003; and 10.8% in FY 2004.
8 Notwithstanding any other provision of this Article, the
9total required State contribution to the System for State
10fiscal year 2006 is $203,783,900.
11 Notwithstanding any other provision of this Article, the
12total required State contribution to the System for State
13fiscal year 2007 is $344,164,400.
14 For each of State fiscal years 2008 through 2009, the State
15contribution to the System, as a percentage of the applicable
16employee payroll, shall be increased in equal annual increments
17from the required State contribution for State fiscal year
182007, so that by State fiscal year 2011, the State is
19contributing at the rate otherwise required under this Section.
20 Notwithstanding any other provision of this Article, the
21total required State General Revenue Fund contribution for
22State fiscal year 2010 is $723,703,100 and shall be made from
23the proceeds of bonds sold in fiscal year 2010 pursuant to
24Section 7.2 of the General Obligation Bond Act, less (i) the
25pro rata share of bond sale expenses determined by the System's
26share of total bond proceeds, (ii) any amounts received from

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1the General Revenue Fund in fiscal year 2010, and (iii) any
2reduction in bond proceeds due to the issuance of discounted
3bonds, if applicable.
4 Notwithstanding any other provision of this Article, the
5total required State General Revenue Fund contribution for
6State fiscal year 2011 is the amount recertified by the System
7on or before April 1, 2011 pursuant to Section 14-135.08 and
8shall be made from the proceeds of bonds sold in fiscal year
92011 pursuant to Section 7.2 of the General Obligation Bond
10Act, less (i) the pro rata share of bond sale expenses
11determined by the System's share of total bond proceeds, (ii)
12any amounts received from the General Revenue Fund in fiscal
13year 2011, and (iii) any reduction in bond proceeds due to the
14issuance of discounted bonds, if applicable.
15 Beginning in State fiscal year 2046, the minimum State
16contribution for each fiscal year shall be the amount needed to
17maintain the total assets of the System at 90% of the total
18actuarial liabilities of the System.
19 Amounts received by the System pursuant to Section 25 of
20the Budget Stabilization Act or Section 8.12 of the State
21Finance Act in any fiscal year do not reduce and do not
22constitute payment of any portion of the minimum State
23contribution required under this Article in that fiscal year.
24Such amounts shall not reduce, and shall not be included in the
25calculation of, the required State contributions under this
26Article in any future year until the System has reached a

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1funding ratio of at least 90%. A reference in this Article to
2the "required State contribution" or any substantially similar
3term does not include or apply to any amounts payable to the
4System under Section 25 of the Budget Stabilization Act.
5 Notwithstanding any other provision of this Section, the
6required State contribution for State fiscal year 2005 and for
7fiscal year 2008 and each fiscal year thereafter, as calculated
8under this Section and certified under Section 14-135.08, shall
9not exceed an amount equal to (i) the amount of the required
10State contribution that would have been calculated under this
11Section for that fiscal year if the System had not received any
12payments under subsection (d) of Section 7.2 of the General
13Obligation Bond Act, minus (ii) the portion of the State's
14total debt service payments for that fiscal year on the bonds
15issued in fiscal year 2003 for the purposes of that Section
167.2, as determined and certified by the Comptroller, that is
17the same as the System's portion of the total moneys
18distributed under subsection (d) of Section 7.2 of the General
19Obligation Bond Act. In determining this maximum for State
20fiscal years 2008 through 2010, however, the amount referred to
21in item (i) shall be increased, as a percentage of the
22applicable employee payroll, in equal increments calculated
23from the sum of the required State contribution for State
24fiscal year 2007 plus the applicable portion of the State's
25total debt service payments for fiscal year 2007 on the bonds
26issued in fiscal year 2003 for the purposes of Section 7.2 of

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1the General Obligation Bond Act, so that, by State fiscal year
22011, the State is contributing at the rate otherwise required
3under this Section.
4 (f) After the submission of all payments for eligible
5employees from personal services line items in fiscal year 2004
6have been made, the Comptroller shall provide to the System a
7certification of the sum of all fiscal year 2004 expenditures
8for personal services that would have been covered by payments
9to the System under this Section if the provisions of this
10amendatory Act of the 93rd General Assembly had not been
11enacted. Upon receipt of the certification, the System shall
12determine the amount due to the System based on the full rate
13certified by the Board under Section 14-135.08 for fiscal year
142004 in order to meet the State's obligation under this
15Section. The System shall compare this amount due to the amount
16received by the System in fiscal year 2004 through payments
17under this Section and under Section 6z-61 of the State Finance
18Act. If the amount due is more than the amount received, the
19difference shall be termed the "Fiscal Year 2004 Shortfall" for
20purposes of this Section, and the Fiscal Year 2004 Shortfall
21shall be satisfied under Section 1.2 of the State Pension Funds
22Continuing Appropriation Act. If the amount due is less than
23the amount received, the difference shall be termed the "Fiscal
24Year 2004 Overpayment" for purposes of this Section, and the
25Fiscal Year 2004 Overpayment shall be repaid by the System to
26the Pension Contribution Fund as soon as practicable after the

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1certification.
2 (g) For purposes of determining the required State
3contribution to the System, the value of the System's assets
4shall be equal to the actuarial value of the System's assets,
5which shall be calculated as follows:
6 As of June 30, 2008, the actuarial value of the System's
7assets shall be equal to the market value of the assets as of
8that date. In determining the actuarial value of the System's
9assets for fiscal years after June 30, 2008, any actuarial
10gains or losses from investment return incurred in a fiscal
11year shall be recognized in equal annual amounts over the
125-year period following that fiscal year.
13 (h) For purposes of determining the required State
14contribution to the System for a particular year, the actuarial
15value of assets shall be assumed to earn a rate of return equal
16to the System's actuarially assumed rate of return.
17 (i) After the submission of all payments for eligible
18employees from personal services line items paid from the
19General Revenue Fund in fiscal year 2010 have been made, the
20Comptroller shall provide to the System a certification of the
21sum of all fiscal year 2010 expenditures for personal services
22that would have been covered by payments to the System under
23this Section if the provisions of this amendatory Act of the
2496th General Assembly had not been enacted. Upon receipt of the
25certification, the System shall determine the amount due to the
26System based on the full rate certified by the Board under

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1Section 14-135.08 for fiscal year 2010 in order to meet the
2State's obligation under this Section. The System shall compare
3this amount due to the amount received by the System in fiscal
4year 2010 through payments under this Section. If the amount
5due is more than the amount received, the difference shall be
6termed the "Fiscal Year 2010 Shortfall" for purposes of this
7Section, and the Fiscal Year 2010 Shortfall shall be satisfied
8under Section 1.2 of the State Pension Funds Continuing
9Appropriation Act. If the amount due is less than the amount
10received, the difference shall be termed the "Fiscal Year 2010
11Overpayment" for purposes of this Section, and the Fiscal Year
122010 Overpayment shall be repaid by the System to the General
13Revenue Fund as soon as practicable after the certification.
14 (j) After the submission of all payments for eligible
15employees from personal services line items paid from the
16General Revenue Fund in fiscal year 2011 have been made, the
17Comptroller shall provide to the System a certification of the
18sum of all fiscal year 2011 expenditures for personal services
19that would have been covered by payments to the System under
20this Section if the provisions of this amendatory Act of the
2196th General Assembly had not been enacted. Upon receipt of the
22certification, the System shall determine the amount due to the
23System based on the full rate certified by the Board under
24Section 14-135.08 for fiscal year 2011 in order to meet the
25State's obligation under this Section. The System shall compare
26this amount due to the amount received by the System in fiscal

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1year 2011 through payments under this Section. If the amount
2due is more than the amount received, the difference shall be
3termed the "Fiscal Year 2011 Shortfall" for purposes of this
4Section, and the Fiscal Year 2011 Shortfall shall be satisfied
5under Section 1.2 of the State Pension Funds Continuing
6Appropriation Act. If the amount due is less than the amount
7received, the difference shall be termed the "Fiscal Year 2011
8Overpayment" for purposes of this Section, and the Fiscal Year
92011 Overpayment shall be repaid by the System to the General
10Revenue Fund as soon as practicable after the certification.
11 (k) For fiscal years 2012 through 2017 only, after the
12submission of all payments for eligible employees from personal
13services line items paid from the General Revenue Fund in the
14fiscal year have been made, the Comptroller shall provide to
15the System a certification of the sum of all expenditures in
16the fiscal year for personal services. Upon receipt of the
17certification, the System shall determine the amount due to the
18System based on the full rate certified by the Board under
19Section 14-135.08 for the fiscal year in order to meet the
20State's obligation under this Section. The System shall compare
21this amount due to the amount received by the System for the
22fiscal year. If the amount due is more than the amount
23received, the difference shall be termed the "Prior Fiscal Year
24Shortfall" for purposes of this Section, and the Prior Fiscal
25Year Shortfall shall be satisfied under Section 1.2 of the
26State Pension Funds Continuing Appropriation Act. If the amount

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1due is less than the amount received, the difference shall be
2termed the "Prior Fiscal Year Overpayment" for purposes of this
3Section, and the Prior Fiscal Year Overpayment shall be repaid
4by the System to the General Revenue Fund as soon as
5practicable after the certification.
6(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,
7eff. 7-9-15; 99-523, eff. 6-30-16.)
8 (40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)
9 (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11 Sec. 14-133. Contributions on behalf of members.
12 (a) Except as provided in subsection (a-5), each Each
13participating employee shall make contributions to the System,
14based on the employee's compensation, as follows:
15 (1) Covered employees, except as indicated below, 3.5%
16 for retirement annuity, and 0.5% for a widow or survivors
17 annuity;
18 (2) Noncovered employees, except as indicated below,
19 7% for retirement annuity and 1% for a widow or survivors
20 annuity;
21 (3) Noncovered employees serving in a position in which
22 "eligible creditable service" as defined in Section 14-110
23 may be earned, 1% for a widow or survivors annuity plus the
24 following amount for retirement annuity: 8.5% through
25 December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%

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1 in 2004 and thereafter;
2 (4) Covered employees serving in a position in which
3 "eligible creditable service" as defined in Section 14-110
4 may be earned, 0.5% for a widow or survivors annuity plus
5 the following amount for retirement annuity: 5% through
6 December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004
7 and thereafter;
8 (5) Each security employee of the Department of
9 Corrections or of the Department of Human Services who is a
10 covered employee, 0.5% for a widow or survivors annuity
11 plus the following amount for retirement annuity: 5%
12 through December 31, 2001; 6% in 2002; 7% in 2003; and 8%
13 in 2004 and thereafter;
14 (6) Each security employee of the Department of
15 Corrections or of the Department of Human Services who is
16 not a covered employee, 1% for a widow or survivors annuity
17 plus the following amount for retirement annuity: 8.5%
18 through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and
19 11.5% in 2004 and thereafter.
20 (a-5) Beginning July 1, 2019 or the effective date of the
21Tier 1 employee's election under paragraph (1) of subsection
22(a) of Section 14-106.5, whichever is later, in lieu of the
23contributions otherwise required under subsection (a), each
24Tier 1 employee who made the election under paragraph (1) of
25subsection (a) of Section 14-106.5 who is a participating
26employee shall make contributions to the System, based on his

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1or her compensation, as follows:
2 (1) Covered employees, except as indicated below,
3 3.15% for retirement annuity, and 0.45% for a widow or
4 survivors annuity;
5 (2) Noncovered employees, except as indicated below,
6 6.3% for retirement annuity and 0.9% for a widow or
7 survivors annuity;
8 (3) Noncovered employees serving in a position in which
9 "eligible creditable service" as defined in Section 14-110
10 may be earned, 10.35% for retirement annuity and 0.9% for a
11 widow or survivors annuity;
12 (4) Covered employees serving in a position in which
13 "eligible creditable service" as defined in Section 14-110
14 may be earned, 7.2% for retirement annuity and 0.45% for a
15 widow or survivors annuity;
16 (5) Each security employee of the Department of
17 Corrections or of the Department of Human Services who is a
18 covered employee, 10.8% for retirement annuity and 0.45%
19 for a widow or survivors annuity;
20 (6) Each security employee of the Department of
21 Corrections or of the Department of Human Services who is
22 not a covered employee, 10.35% for retirement annuity and
23 0.9% for a widow or survivors annuity.
24 (b) Contributions shall be in the form of a deduction from
25compensation and shall be made notwithstanding that the
26compensation paid in cash to the employee shall be reduced

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1thereby below the minimum prescribed by law or regulation. Each
2member is deemed to consent and agree to the deductions from
3compensation provided for in this Article, and shall receipt in
4full for salary or compensation.
5(Source: P.A. 92-14, eff. 6-28-01.)
6 (40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
7 (Text of Section WITHOUT the changes made by P.A. 98-599,
8which has been held unconstitutional)
9 Sec. 14-135.08. To certify required State contributions.
10 (a) To certify to the Governor and to each department, on
11or before November 15 of each year until November 15, 2011, the
12required rate for State contributions to the System for the
13next State fiscal year, as determined under subsection (b) of
14Section 14-131. The certification to the Governor under this
15subsection (a) shall include a copy of the actuarial
16recommendations upon which the rate is based and shall
17specifically identify the System's projected State normal cost
18for that fiscal year.
19 (a-5) On or before November 1 of each year, beginning
20November 1, 2012, the Board shall submit to the State Actuary,
21the Governor, and the General Assembly a proposed certification
22of the amount of the required State contribution to the System
23for the next fiscal year, along with all of the actuarial
24assumptions, calculations, and data upon which that proposed
25certification is based. On or before January 1 of each year

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1beginning January 1, 2013, the State Actuary shall issue a
2preliminary report concerning the proposed certification and
3identifying, if necessary, recommended changes in actuarial
4assumptions that the Board must consider before finalizing its
5certification of the required State contributions. On or before
6January 15, 2013 and each January 15 thereafter, the Board
7shall certify to the Governor and the General Assembly the
8amount of the required State contribution for the next fiscal
9year. The Board's certification must note any deviations from
10the State Actuary's recommended changes, the reason or reasons
11for not following the State Actuary's recommended changes, and
12the fiscal impact of not following the State Actuary's
13recommended changes on the required State contribution.
14 (a-10) For purposes of subsection (c-5) of Section 20 of
15the Budget Stabilization Act, on or before November 1 of each
16year beginning November 1, 2019, the Board shall determine the
17amount of the State contribution to the System that would have
18been required for the next fiscal year if Section 1-161,
19Section 14-155.2, and the changes made to Section 1-160 by this
20amendatory Act of the 100th General Assembly had not taken
21effect, using the best and most recent available data but based
22on the law in effect on May 31, 2019. The Board shall submit to
23the State Actuary, the Governor, and the General Assembly a
24proposed certification, along with the relevant law, actuarial
25assumptions, calculations, and data upon which that
26certification is based. On or before January 1, 2020 and every

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1January 1 thereafter, the State Actuary shall issue a
2preliminary report concerning the proposed certification and
3identifying, if necessary, recommended changes in actuarial
4assumptions that the Board must consider before finalizing its
5certification. On or before January 15, 2020 and every January
61 thereafter, the Board shall certify to the Governor and the
7General Assembly the amount of the State contribution to the
8System that would have been required for the next fiscal year
9if Section 1-161, Section 14-155.2, and the changes made to
10Section 1-160 by this amendatory Act of the 100th General
11Assembly had not taken effect, using the best and most recent
12available data but based on the law in effect on May 31, 2019.
13The Board's certification must note any deviations from the
14State Actuary's recommended changes, the reason or reasons for
15not following the State Actuary's recommended changes, and the
16impact of not following the State Actuary's recommended
17changes.
18 (b) The certifications under subsections (a) and (a-5)
19shall include an additional amount necessary to pay all
20principal of and interest on those general obligation bonds due
21the next fiscal year authorized by Section 7.2(a) of the
22General Obligation Bond Act and issued to provide the proceeds
23deposited by the State with the System in July 2003,
24representing deposits other than amounts reserved under
25Section 7.2(c) of the General Obligation Bond Act. For State
26fiscal year 2005, the Board shall make a supplemental

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1certification of the additional amount necessary to pay all
2principal of and interest on those general obligation bonds due
3in State fiscal years 2004 and 2005 authorized by Section
47.2(a) of the General Obligation Bond Act and issued to provide
5the proceeds deposited by the State with the System in July
62003, representing deposits other than amounts reserved under
7Section 7.2(c) of the General Obligation Bond Act, as soon as
8practical after the effective date of this amendatory Act of
9the 93rd General Assembly.
10 On or before May 1, 2004, the Board shall recalculate and
11recertify to the Governor and to each department the amount of
12the required State contribution to the System and the required
13rates for State contributions to the System for State fiscal
14year 2005, taking into account the amounts appropriated to and
15received by the System under subsection (d) of Section 7.2 of
16the General Obligation Bond Act.
17 On or before July 1, 2005, the Board shall recalculate and
18recertify to the Governor and to each department the amount of
19the required State contribution to the System and the required
20rates for State contributions to the System for State fiscal
21year 2006, taking into account the changes in required State
22contributions made by this amendatory Act of the 94th General
23Assembly.
24 On or before April 1, 2011, the Board shall recalculate and
25recertify to the Governor and to each department the amount of
26the required State contribution to the System for State fiscal

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1year 2011, applying the changes made by Public Act 96-889 to
2the System's assets and liabilities as of June 30, 2009 as
3though Public Act 96-889 was approved on that date.
4 As soon as practical after the effective date of this
5amendatory Act of the 100th General Assembly, the Board shall
6recalculate and recertify to the State Actuary, the Governor,
7and the General Assembly the amount of the State contribution
8to the System for State fiscal year 2018, taking into account
9the changes in required State contributions made by this
10amendatory Act of the 100th General Assembly. The State Actuary
11shall review the assumptions and valuations underlying the
12Board's revised certification and issue a preliminary report
13concerning the proposed recertification and identifying, if
14necessary, recommended changes in actuarial assumptions that
15the Board must consider before finalizing its certification of
16the required State contributions. The Board's final
17certification must note any deviations from the State Actuary's
18recommended changes, the reason or reasons for not following
19the State Actuary's recommended changes, and the fiscal impact
20of not following the State Actuary's recommended changes on the
21required State contribution.
22 On or before May 1, 2019, the Board shall recalculate and
23recertify to the Governor and the General Assembly the amount
24of the required State contribution to the System for State
25fiscal year 2020, taking into account the effect on the
26System's liabilities of the elections made under Section

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114-106.5.
2 On or before October 1, 2019, the Board shall recalculate
3and recertify to the Governor and the General Assembly the
4amount of the required State contribution to the System for
5State fiscal year 2020, taking into account the reduction
6specified under item (3) of subsection (e) of Section 14-131.
7(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
897-694, eff. 6-18-12.)
9 (40 ILCS 5/14-147.5 new)
10 Sec. 14-147.5. Accelerated pension benefit payment.
11 (a) As used in this Section:
12 "Eligible person" means a person who:
13 (1) has terminated service;
14 (2) has accrued sufficient service credit to be
15 eligible to receive a retirement annuity under this
16 Article;
17 (3) has not received any retirement annuity under this
18 Article; and
19 (4) does not have a QILDRO in effect against him or her
20 under this Article.
21 "Pension benefit" means the benefits under this Article, or
22Article 1 as it relates to those benefits, including any
23anticipated annual increases, that an eligible person is
24entitled to upon attainment of the applicable retirement age.
25"Pension benefit" also includes applicable survivor's or

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1disability benefits.
2 (b) Before January 1, 2019, and annually thereafter, the
3System shall calculate, using actuarial tables and other
4assumptions adopted by the Board, the net present value of
5pension benefits for each eligible person and shall offer each
6eligible person the opportunity to irrevocably elect to receive
7an amount determined by the System to be equal to 70% of the
8net present value of his or her pension benefits in lieu of
9receiving any pension benefit. The offer shall specify the
10dollar amount that the eligible person will receive if he or
11she so elects and shall expire when a subsequent offer is made
12to an eligible person or when the System determines that 10% of
13eligible persons in that year have made the election under this
14subsection, whichever occurs first. The System shall make a
15good faith effort to contact every eligible person to notify
16him or her of the election and of the amount of the accelerated
17pension benefit payment.
18 Until the System determines that 10% of eligible persons in
19that year have made the election under this subsection, an
20eligible person may irrevocably elect to receive an accelerated
21pension benefit payment in the amount that the System offers
22under this subsection in lieu of receiving any pension benefit.
23A person who elects to receive an accelerated pension benefit
24payment under this Section may not elect to proceed under the
25Retirement Systems Reciprocal Act with respect to service under
26this Article.

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1 (c) A person's credits and creditable service under this
2Article shall be terminated upon the person's receipt of an
3accelerated pension benefit payment under this Section, and no
4other benefit shall be paid under this Article based on those
5terminated credits and creditable service, including any
6retirement, survivor, or other benefit; except that to the
7extent that participation, benefits, or premiums under the
8State Employees Group Insurance Act of 1971 are based on the
9amount of service credit, the terminated service credit shall
10be used for that purpose.
11 (d) If a person who has received an accelerated pension
12benefit payment under this Section returns to active service
13under this Article, then:
14 (1) Any benefits under the System earned as a result of
15 that return to active service shall be based solely on the
16 person's credits and creditable service arising from the
17 return to active service.
18 (2) The accelerated pension benefit payment may not be
19 repaid to the System, and the terminated credits and
20 creditable service may not under any circumstances be
21 reinstated.
22 (e) As a condition of receiving an accelerated pension
23benefit payment, an eligible person must have another
24retirement plan or account qualified under the Internal Revenue
25Code of 1986, as amended, for the accelerated pension benefit
26payment to be rolled into. The accelerated pension benefit

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1payment under this Section may be subject to withholding or
2payment of applicable taxes, but to the extent permitted by
3federal law, a person who receives an accelerated pension
4benefit payment under this Section must direct the System to
5pay all of that payment as a rollover into another retirement
6plan or account qualified under the Internal Revenue Code of
71986, as amended.
8 (f) Before January 1, 2020 and every January 1 thereafter,
9the Board shall certify to the Illinois Finance Authority and
10the General Assembly the amount by which the total amount of
11accelerated pension benefit payments made under this Section
12exceed the amount appropriated to the System for the purpose of
13making those payments.
14 (g) The Board shall adopt any rules necessary to implement
15this Section.
16 (h) No provision of this Section shall be interpreted in a
17way that would cause the applicable System to cease to be a
18qualified plan under the Internal Revenue Code of 1986.
19 (i) Notwithstanding any other provision of this Section, in
20no case shall the total amount of accelerated pension benefit
21payments paid under this Section, Section 15-185.5, and Section
2216-190.5 cause the Illinois Finance Authority to issue more
23than the $250,000,000 of State Pension Obligation Acceleration
24Bonds authorized in subsection (c-5) of Section 801-40 of the
25Illinois Finance Authority Act.

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1 (40 ILCS 5/14-152.1)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 14-152.1. Application and expiration of new benefit
5increases.
6 (a) As used in this Section, "new benefit increase" means
7an increase in the amount of any benefit provided under this
8Article, or an expansion of the conditions of eligibility for
9any benefit under this Article, that results from an amendment
10to this Code that takes effect after June 1, 2005 (the
11effective date of Public Act 94-4). "New benefit increase",
12however, does not include any benefit increase resulting from
13the changes made to this Article by Public Act 96-37 or by this
14amendatory Act of the 100th General Assembly this amendatory
15Act of the 96th General Assembly.
16 (b) Notwithstanding any other provision of this Code or any
17subsequent amendment to this Code, every new benefit increase
18is subject to this Section and shall be deemed to be granted
19only in conformance with and contingent upon compliance with
20the provisions of this Section.
21 (c) The Public Act enacting a new benefit increase must
22identify and provide for payment to the System of additional
23funding at least sufficient to fund the resulting annual
24increase in cost to the System as it accrues.
25 Every new benefit increase is contingent upon the General
26Assembly providing the additional funding required under this

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1subsection. The Commission on Government Forecasting and
2Accountability shall analyze whether adequate additional
3funding has been provided for the new benefit increase and
4shall report its analysis to the Public Pension Division of the
5Department of Insurance Financial and Professional Regulation.
6A new benefit increase created by a Public Act that does not
7include the additional funding required under this subsection
8is null and void. If the Public Pension Division determines
9that the additional funding provided for a new benefit increase
10under this subsection is or has become inadequate, it may so
11certify to the Governor and the State Comptroller and, in the
12absence of corrective action by the General Assembly, the new
13benefit increase shall expire at the end of the fiscal year in
14which the certification is made.
15 (d) Every new benefit increase shall expire 5 years after
16its effective date or on such earlier date as may be specified
17in the language enacting the new benefit increase or provided
18under subsection (c). This does not prevent the General
19Assembly from extending or re-creating a new benefit increase
20by law.
21 (e) Except as otherwise provided in the language creating
22the new benefit increase, a new benefit increase that expires
23under this Section continues to apply to persons who applied
24and qualified for the affected benefit while the new benefit
25increase was in effect and to the affected beneficiaries and
26alternate payees of such persons, but does not apply to any

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1other person, including without limitation a person who
2continues in service after the expiration date and did not
3apply and qualify for the affected benefit while the new
4benefit increase was in effect.
5(Source: P.A. 96-37, eff. 7-13-09.)
6 (40 ILCS 5/14-155.1 new)
7 Sec. 14-155.1. Defined contribution plan.
8 (a) By July 1, 2019, the System shall prepare and implement
9a voluntary defined contribution plan for up to 5% of eligible
10active Tier 1 employees. The System shall determine the 5% cap
11by the number of active Tier 1 employees on the effective date
12of this Section. The defined contribution plan developed under
13this Section shall be a plan that aggregates employer and
14employee contributions in individual participant accounts
15which, after meeting any other requirements, are used for
16payouts after retirement in accordance with this Section and
17any other applicable laws.
18 As used in this Section, "defined benefit plan" means the
19retirement plan available under this Article to Tier 1
20employees who have not made the election authorized under this
21Section.
22 (1) Under the defined contribution plan, an active Tier
23 1 employee of this System could elect to cease accruing
24 benefits in the defined benefit plan under this Article and
25 begin accruing benefits for future service in the defined

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1 contribution plan. Service credit under the defined
2 contribution plan may be used for determining retirement
3 eligibility under the defined benefit plan.
4 (2) Participants in the defined contribution plan
5 shall pay employee contributions at the same rate as Tier 1
6 employees in this System who do not participate in the
7 defined contribution plan.
8 (3) State contributions shall be paid into the accounts
9 of all participants in the defined contribution plan at a
10 uniform rate, expressed as a percentage of compensation and
11 determined for each year. This rate shall be no higher than
12 the employer's normal cost for Tier 1 employees in the
13 defined benefit plan for that year, as determined by the
14 System and expressed as a percentage of compensation, and
15 shall be no lower than 3% of compensation. The State shall
16 adjust this rate annually.
17 (4) The defined contribution plan shall require 5 years
18 of participation in the defined contribution plan before
19 vesting in State contributions. If the participant fails to
20 vest in them, the State contributions, and the earnings
21 thereon, shall be forfeited.
22 (5) The defined contribution plan may provide for
23 participants in the plan to be eligible for the defined
24 disability benefits available to other participants under
25 this Article. If it does, the System shall reduce the
26 employee contributions credited to the member's defined

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1 contribution plan account by an amount determined by the
2 System to cover the cost of offering such benefits.
3 (6) The defined contribution plan shall provide a
4 variety of options for investments. These options shall
5 include investments handled by the Illinois State Board of
6 Investment as well as private sector investment options.
7 (7) The defined contribution plan shall provide a
8 variety of options for payouts to retirees and their
9 survivors.
10 (8) To the extent authorized under federal law and as
11 authorized by the System, the plan shall allow former
12 participants in the plan to transfer or roll over employee
13 and vested State contributions, and the earnings thereon,
14 into other qualified retirement plans.
15 (9) The System shall reduce the employee contributions
16 credited to the member's defined contribution plan account
17 by an amount determined by the System to cover the cost of
18 offering these benefits and any applicable administrative
19 fees.
20 (b) Only persons who are active Tier 1 employees of the
21System on the effective date of this Section are eligible to
22participate in the defined contribution plan. Participation in
23the defined contribution plan shall be limited to the first 5%
24of eligible persons who elect to participate. The election to
25participate in the defined contribution plan is voluntary and
26irrevocable.

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1 (c) An eligible Tier 1 employee may irrevocably elect to
2participate in the defined contribution plan by filing with the
3System a written application to participate that is received by
4the System prior to its determination that 5% of eligible
5persons have elected to participate in the defined contribution
6plan.
7 When the System first determines that 5% of eligible
8persons have elected to participate in the defined contribution
9plan, the System shall provide notice to previously eligible
10employees that the plan is no longer available and shall cease
11accepting applications to participate.
12 (d) The System shall make a good faith effort to contact
13each active Tier 1 employee who is eligible to participate in
14the defined contribution plan. The System shall mail
15information describing the option to join the defined
16contribution plan to each of these employees to his or her last
17known address on file with the System. If the employee is not
18responsive to other means of contact, it is sufficient for the
19System to publish the details of the option on its website.
20 Upon request for further information describing the
21option, the System shall provide employees with information
22from the System before exercising the option to join the plan,
23including information on the impact to their vested benefits or
24non-vested service. The individual consultation shall include
25projections of the member's defined benefits at retirement or
26earlier termination of service and the value of the member's

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1account at retirement or earlier termination of service. The
2System shall not provide advice or counseling with respect to
3whether the employee should exercise the option. The System
4shall inform Tier 1 employees who are eligible to participate
5in the defined contribution plan that they may also wish to
6obtain information and counsel relating to their option from
7any other available source, including, but not limited to,
8labor organizations, private counsel, and financial advisors.
9 (e) In no event shall the System, its staff, its authorized
10representatives, or the Board be liable for any information
11given to an employee under this Section. The System may
12coordinate with the Illinois Department of Central Management
13Services and other retirement systems administering a defined
14contribution plan in accordance with this amendatory Act of the
15100th General Assembly to provide information concerning the
16impact of the option set forth in this Section.
17 (f) Notwithstanding any other provision of this Section, no
18person shall begin participating in the defined contribution
19plan until it has attained qualified plan status and received
20all necessary approvals from the U.S. Internal Revenue Service.
21 (g) The System shall report on its progress under this
22Section, including the available details of the defined
23contribution plan and the System's plans for informing eligible
24Tier 1 employees about the plan, to the Governor and the
25General Assembly on or before January 15, 2019.
26 (h) The Illinois State Board of Investment shall be the

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1plan sponsor for the defined contribution plan established
2under this Section.
3 (i) The intent of this amendatory Act of the 100th General
4Assembly is to ensure that the State's normal cost of
5participation in the defined contribution plan is similar, and
6if possible equal, to the State's normal cost of participation
7in the defined benefit plan, unless a lower State's normal cost
8is necessary to ensure cost neutrality.
9 (40 ILCS 5/14-155.2 new)
10 Sec. 14-155.2. Defined contribution plan for certain
11covered employees.
12 (a) As used in this Section:
13 "Defined benefit plan" means the retirement plan available
14under this Article and Section 1-160 to eligible covered
15employees who do not make the election authorized under this
16Section.
17 "Eligible covered employee" means a covered employee who
18first becomes a participant under this Article on or after 6
19months after the effective date of this amendatory Act of the
20100th General Assembly.
21 (b) In lieu of the defined benefit plan, an eligible
22covered employee may irrevocably elect to participate in the
23defined contribution plan under this Section. The election to
24participate in the defined contribution plan must be made
25within 30 days after becoming an eligible covered employee. The

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1election to participate in the defined contribution plan under
2this Section is voluntary and irrevocable.
3 (c) No later than 5 months after the effective date of this
4amendatory Act of the 100th General Assembly, the System shall
5prepare and implement a voluntary defined contribution plan for
6eligible covered employees. The defined contribution plan
7developed under this Section shall be a plan that aggregates
8employer and employee contributions in individual participant
9accounts which, after meeting any other requirements, are used
10for payouts after retirement in accordance with this Section
11and any other applicable laws.
12 (1) A participant in the defined contribution plan
13 shall contribute a minimum of 3% of his or her compensation
14 to the defined contribution plan.
15 (2) For persons who participate in the defined
16 contribution plan for at least one year, employer
17 contributions shall be paid into the accounts of those
18 participants at a rate of 3% of compensation.
19 (3) Employer contributions shall vest when those
20 contributions are paid into a participant's account.
21 (4) The defined contribution plan shall provide a
22 variety of options for investments. These options shall
23 include investments handled by the Illinois State Board of
24 Investment as well as private sector investment options.
25 (5) The defined contribution plan shall provide a
26 variety of options for payouts to retirees and their

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1 survivors.
2 (6) To the extent authorized under federal law and as
3 authorized by the affected pension fund, the defined
4 contribution plan shall allow former participants in the
5 plan to transfer or roll over employee and employer
6 contributions, and the earnings thereon, into other
7 qualified retirement plans.
8 (7) The System shall reduce the employee contributions
9 credited to the participant's defined contribution plan
10 account by an amount determined by the System to cover the
11 cost of offering the benefits under this Section and any
12 applicable administrative fees.
13 (40 ILCS 5/14-156.1 new)
14 Sec. 14-156.1. Defined contribution plan; termination. If
15the defined contribution plan under Section 14-155.1 is
16terminated or becomes inoperative pursuant to law, then each
17participant in the plan shall automatically be deemed to have
18been a contributing Tier 1 employee in the System's defined
19benefit plan during the time in which he or she participated in
20the defined contribution plan, and for that purpose the System
21shall be entitled to recover the amounts in the participant's
22defined contribution accounts.
23 (40 ILCS 5/15-108.1)
24 Sec. 15-108.1. Tier 1 member; Tier 1 employee.

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1 "Tier 1 member": A participant or an annuitant of a
2retirement annuity under this Article, other than a participant
3in the self-managed plan under Section 15-158.2, who first
4became a participant or member before January 1, 2011 under any
5reciprocal retirement system or pension fund established under
6this Code, other than a retirement system or pension fund
7established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
8"Tier 1 member" includes a person who first became a
9participant under this System before January 1, 2011 and who
10accepts a refund and is subsequently reemployed by an employer
11on or after January 1, 2011.
12 "Tier 1 employee": A Tier 1 member who is a participating
13employee, unless he or she is a disability benefit recipient
14under Section 15-150. However, for the purposes of the election
15under Section 15-132.9, "Tier 1 employee" does not include an
16individual who has made an irrevocable election on or before
17June 1, 2017 to retire from service pursuant to the terms of an
18employment contract or a collective bargaining agreement in
19effect on June 1, 2017, excluding any extension, amendment, or
20renewal of that agreement on or after that date, and has
21notified the System of that election.
22(Source: P.A. 98-92, eff. 7-16-13.)
23 (40 ILCS 5/15-108.2)
24 Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
25first becomes a participant under this Article on or after

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1January 1, 2011 and before 6 months after the effective date of
2this amendatory Act of the 100th General Assembly, other than a
3person in the self-managed plan established under Section
415-158.2 or a person who makes the election under subsection
5(c) of Section 1-161, unless the person is otherwise a Tier 1
6member. The changes made to this Section by this amendatory Act
7of the 98th General Assembly are a correction of existing law
8and are intended to be retroactive to the effective date of
9Public Act 96-889, notwithstanding the provisions of Section
101-103.1 of this Code.
11(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
12 (40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
13 Sec. 15-111. Earnings.
14 (a) "Earnings": Subject to Section 15-111.5, an amount paid
15for personal services equal to the sum of the basic
16compensation plus extra compensation for summer teaching,
17overtime or other extra service. For periods for which an
18employee receives service credit under subsection (c) of
19Section 15-113.1 or Section 15-113.2, earnings are equal to the
20basic compensation on which contributions are paid by the
21employee during such periods. Compensation for employment
22which is irregular, intermittent and temporary shall not be
23considered earnings, unless the participant is also receiving
24earnings from the employer as an employee under Section 15-107.
25 With respect to transition pay paid by the University of

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1Illinois to a person who was a participating employee employed
2in the fire department of the University of Illinois's
3Champaign-Urbana campus immediately prior to the elimination
4of that fire department:
5 (1) "Earnings" includes transition pay paid to the
6 employee on or after the effective date of this amendatory
7 Act of the 91st General Assembly.
8 (2) "Earnings" includes transition pay paid to the
9 employee before the effective date of this amendatory Act
10 of the 91st General Assembly only if (i) employee
11 contributions under Section 15-157 have been withheld from
12 that transition pay or (ii) the employee pays to the System
13 before January 1, 2001 an amount representing employee
14 contributions under Section 15-157 on that transition pay.
15 Employee contributions under item (ii) may be paid in a
16 lump sum, by withholding from additional transition pay
17 accruing before January 1, 2001, or in any other manner
18 approved by the System. Upon payment of the employee
19 contributions on transition pay, the corresponding
20 employer contributions become an obligation of the State.
21 (a-5) Notwithstanding any other provision of this Section,
22"earnings" does not include any future increase in income that
23is offered for service by an employer to a Tier 1 employee
24under this Article pursuant to the condition set forth in
25subsection (c) of Section 15-132.9 and accepted under that
26condition by a Tier 1 employee who has made the election under

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1paragraph (2) of subsection (a) of Section 15-132.9.
2 (a-10) Notwithstanding any other provision of this
3Section, "earnings" does not include any consideration payment
4made to a Tier 1 employee.
5 (b) For a Tier 2 member, the annual earnings shall not
6exceed $106,800; however, that amount shall annually
7thereafter be increased by the lesser of (i) 3% of that amount,
8including all previous adjustments, or (ii) one half the annual
9unadjusted percentage increase (but not less than zero) in the
10consumer price index-u for the 12 months ending with the
11September preceding each November 1, including all previous
12adjustments.
13 For the purposes of this Section, "consumer price index u"
14means the index published by the Bureau of Labor Statistics of
15the United States Department of Labor that measures the average
16change in prices of goods and services purchased by all urban
17consumers, United States city average, all items, 1982-84 =
18100. The new amount resulting from each annual adjustment shall
19be determined by the Public Pension Division of the Department
20of Insurance and made available to the boards of the retirement
21systems and pension funds by November 1 of each year.
22 (c) With each submission of payroll information in the
23manner prescribed by the System, the employer shall certify
24that the payroll information is correct and complies with all
25applicable State and federal laws.
26(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)

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1 (40 ILCS 5/15-112.1 new)
2 Sec. 15-112.1. Future increase in income. "Future increase
3in income" means an increase to a Tier 1 employee's base pay
4that is offered by an employer to the Tier 1 employee for
5service under this Article after June 30, 2018 that qualifies
6as "earnings", as defined in Section 15-111, or would qualify
7as "earnings" but for the fact that it was offered to and
8accepted by the Tier 1 employee under the condition set forth
9in subsection (c) of Section 15-132.9. The term "future
10increase in income" includes an increase to a Tier 1 employee's
11base pay that is paid to the Tier 1 employee pursuant to an
12extension, amendment, or renewal of any such employment
13contract or collective bargaining agreement after the
14effective date of this Section.
15 (40 ILCS 5/15-112.2 new)
16 Sec. 15-112.2. Base pay. As used in Section 15-112.1 of
17this Code, "base pay" means the greater of either (i) the Tier
181 employee's annualized rate of earnings as of June 30, 2018,
19or (ii) the Tier 1 employee's annualized rate of earnings
20immediately preceding the expiration, renewal, or amendment of
21an employment contract or collective bargaining agreement in
22effect on the effective date of this Section. For a person
23returning to participating employee status as a Tier 1 employee
24after June 30, 2018, however, "base pay" means the employee's

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1annualized rate of earnings as of the employee's last date of
2service prior to July 1, 2018. The System shall calculate the
3base pay of each Tier 1 employee pursuant to this Section.
4 (40 ILCS 5/15-132.9 new)
5 Sec. 15-132.9. Election by Tier 1 employees.
6 (a) Each Tier 1 employee shall make an irrevocable election
7either:
8 (1) to agree to delay his or her eligibility for
9 automatic annual increases in retirement annuity as
10 provided in subsection (d-1) of Section 15-136 and to have
11 the amount of the automatic annual increases in his or her
12 retirement annuity and survivor annuity that are otherwise
13 provided for in this Article calculated, instead, as
14 provided in subsection (d-1) of Section 15-136; or
15 (2) to not agree to the provisions of paragraph (1) of
16 this subsection.
17 The election required under this subsection (a) shall be
18made by each Tier 1 employee no earlier than January 1, 2018
19and no later than March 31, 2018, except that:
20 (i) a person who becomes a Tier 1 employee under this
21 Article on or after January 1, 2018 must make the election
22 under this subsection (a) within 60 days after becoming a
23 Tier 1 employee;
24 (ii) a person who returns to participating employee
25 status as a Tier 1 employee under this Article on or after

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1 January 1, 2018 and has not yet made an election under this
2 Section must make the election under this subsection (a)
3 within 60 days after returning to participating employee
4 status as a Tier 1 employee; and
5 (iii) a person who returns to participating employee
6 status as a Tier 1 employee under this Article but who has
7 not made an election under Section 15-134.5 must make the
8 election under this subsection (a) at the same time as the
9 election under Section 15-134.5 and within the timeframes
10 required by that Section.
11 If a Tier 1 employee fails for any reason to make a
12required election under this subsection within the time
13specified, then the employee shall be deemed to have made the
14election under paragraph (2) of this subsection.
15 (a-5) If this Section is enjoined or stayed by an Illinois
16court or a court of competent jurisdiction pending the entry of
17a final and unappealable decision, and this Section is
18determined to be constitutional or otherwise valid by a final
19unappealable decision of an Illinois court or a court of
20competent jurisdiction, then the election procedure set forth
21in subsection (a) of this Section shall commence on the 180th
22calendar day after the date of the issuance of the final
23unappealable decision and shall conclude at the end of the
24270th calendar day after that date.
25 (a-10) All elections under subsection (a) that are made or
26deemed to be made before July 1, 2018 shall take effect on July

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11, 2018. Elections that are made or deemed to be made on or
2after July 1, 2018 shall take effect on the first day of the
3month following the month in which the election is made or
4deemed to be made.
5 (b) As adequate and legal consideration provided under this
6amendatory Act of the 100th General Assembly for making an
7election under paragraph (1) of subsection (a) of this Section,
8the employer shall be expressly and irrevocably prohibited from
9offering any future increases in income to a Tier 1 employee
10who has made an election under paragraph (1) of subsection (a)
11of this Section on the condition of not constituting earnings
12under Section 15-111.
13 As adequate and legal consideration provided under this
14amendatory Act of the 100th General Assembly for making an
15election under paragraph (1) of subsection (a) of this Section,
16each Tier 1 employee who has made an election under paragraph
17(1) of subsection (a) of this Section shall receive a
18consideration payment equal to 10% of the contributions made by
19or on behalf of the employee under Section 15-157 before the
20effective date of that election. The State Comptroller shall
21pay the consideration payment to the Tier 1 employee out of
22funds appropriated for that purpose under Section 1.9 of the
23State Pension Funds Continuing Appropriation Act. The System
24shall calculate the amount of each consideration payment and,
25by July 1, 2018, shall certify to the State Comptroller the
26amount of the consideration payment, together with the name,

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1address, and any other available payment information of the
2Tier 1 employee as found in the records of the System. The
3System shall make additional calculations and certifications
4of consideration payments to the State Comptroller as the
5System deems necessary.
6 (c) A Tier 1 employee who makes the election under
7paragraph (2) of subsection (a) of this Section shall not be
8subject to paragraph (1) of subsection (a) of this Section.
9However, each future increase in income offered by an employer
10under this Article to a Tier 1 employee who has made the
11election under paragraph (2) of subsection (a) of this Section
12shall be offered by the employer expressly and irrevocably on
13the condition of not constituting earnings under Section 15-111
14and that the Tier 1 employee's acceptance of the offered future
15increase in income shall constitute his or her agreement to
16that condition.
17 (d) The System shall make a good faith effort to contact
18each Tier 1 employee subject to this Section. The System shall
19mail information describing the required election to each Tier
201 employee by United States Postal Service mail to his or her
21last known address on file with the System. If the Tier 1
22employee is not responsive to other means of contact, it is
23sufficient for the System to publish the details of any
24required elections on its website or to publish those details
25in a regularly published newsletter or other existing public
26forum.

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1 Tier 1 employees who are subject to this Section shall be
2provided with an election packet containing information
3regarding their options, as well as the forms necessary to make
4the required election. Upon request, the System shall offer
5Tier 1 employees an opportunity to receive information from the
6System before making the required election. The information may
7consist of video materials, benefit estimators, group
8presentations, individual consultation with a member or
9authorized representative of the System in person or by
10telephone or other electronic means, or any combination of
11these methods. The System shall not provide advice or
12counseling with respect to which election a Tier 1 employee
13should make or specific to the legal or tax circumstances of or
14consequences to the Tier 1 employee.
15 The System shall inform Tier 1 employees in the election
16packet required under this subsection that the Tier 1 employee
17may also wish to obtain information and counsel relating to the
18election required under this Section from any other available
19source, including, but not limited to, labor organizations and
20private counsel.
21 In no event shall the System, its staff, or the Board be
22held liable for any information given to a member regarding the
23elections under this Section. The System shall coordinate with
24the Illinois Department of Central Management Services and each
25other retirement system administering an election in
26accordance with this amendatory Act of the 100th General

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1Assembly to provide information concerning the impact of the
2election set forth in this Section.
3 (e) Notwithstanding any other provision of law, an employer
4under this Article is required to offer each future increase in
5income expressly and irrevocably on the condition of not
6constituting "earnings" under Section 15-111 to any Tier 1
7employee who has made an election under paragraph (2) of
8subsection (a) of this Section. The offer shall also provide
9that the Tier 1 employee's acceptance of the offered future
10increase in income shall constitute his or her agreement to the
11condition set forth in this subsection.
12 For purposes of legislative intent, the condition set forth
13in this subsection shall be construed in a manner that ensures
14that the condition is not violated or circumvented through any
15contrivance of any kind.
16 (f) A member's election under this Section is not a
17prohibited election under subdivision (j)(1) of Section 1-119
18of this Code.
19 (g) No provision of this Section shall be interpreted in a
20way that would cause the System to cease to be a qualified plan
21under Section 401(a) of the Internal Revenue Code of 1986.
22 (h) If an election created by this amendatory Act in any
23other Article of this Code or any change deriving from that
24election is determined to be unconstitutional or otherwise
25invalid by a final unappealable decision of an Illinois court
26or a court of competent jurisdiction, the invalidity of that

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1provision shall not in any way affect the validity of this
2Section or the changes deriving from the election required
3under this Section.
4 (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
5 (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7 Sec. 15-136. Retirement annuities - Amount. The provisions
8of this Section 15-136 apply only to those participants who are
9participating in the traditional benefit package or the
10portable benefit package and do not apply to participants who
11are participating in the self-managed plan.
12 (a) The amount of a participant's retirement annuity,
13expressed in the form of a single-life annuity, shall be
14determined by whichever of the following rules is applicable
15and provides the largest annuity:
16 Rule 1: The retirement annuity shall be 1.67% of final rate
17of earnings for each of the first 10 years of service, 1.90%
18for each of the next 10 years of service, 2.10% for each year
19of service in excess of 20 but not exceeding 30, and 2.30% for
20each year in excess of 30; or for persons who retire on or
21after January 1, 1998, 2.2% of the final rate of earnings for
22each year of service.
23 Rule 2: The retirement annuity shall be the sum of the
24following, determined from amounts credited to the participant
25in accordance with the actuarial tables and the effective rate

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1of interest in effect at the time the retirement annuity
2begins:
3 (i) the normal annuity which can be provided on an
4 actuarially equivalent basis, by the accumulated normal
5 contributions as of the date the annuity begins;
6 (ii) an annuity from employer contributions of an
7 amount equal to that which can be provided on an
8 actuarially equivalent basis from the accumulated normal
9 contributions made by the participant under Section
10 15-113.6 and Section 15-113.7 plus 1.4 times all other
11 accumulated normal contributions made by the participant;
12 and
13 (iii) the annuity that can be provided on an
14 actuarially equivalent basis from the entire contribution
15 made by the participant under Section 15-113.3.
16 With respect to a police officer or firefighter who retires
17on or after August 14, 1998, the accumulated normal
18contributions taken into account under clauses (i) and (ii) of
19this Rule 2 shall include the additional normal contributions
20made by the police officer or firefighter under Section
2115-157(a).
22 The amount of a retirement annuity calculated under this
23Rule 2 shall be computed solely on the basis of the
24participant's accumulated normal contributions, as specified
25in this Rule and defined in Section 15-116. Neither an employee
26or employer contribution for early retirement under Section

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115-136.2 nor any other employer contribution shall be used in
2the calculation of the amount of a retirement annuity under
3this Rule 2.
4 This amendatory Act of the 91st General Assembly is a
5clarification of existing law and applies to every participant
6and annuitant without regard to whether status as an employee
7terminates before the effective date of this amendatory Act.
8 This Rule 2 does not apply to a person who first becomes an
9employee under this Article on or after July 1, 2005.
10 Rule 3: The retirement annuity of a participant who is
11employed at least one-half time during the period on which his
12or her final rate of earnings is based, shall be equal to the
13participant's years of service not to exceed 30, multiplied by
14(1) $96 if the participant's final rate of earnings is less
15than $3,500, (2) $108 if the final rate of earnings is at least
16$3,500 but less than $4,500, (3) $120 if the final rate of
17earnings is at least $4,500 but less than $5,500, (4) $132 if
18the final rate of earnings is at least $5,500 but less than
19$6,500, (5) $144 if the final rate of earnings is at least
20$6,500 but less than $7,500, (6) $156 if the final rate of
21earnings is at least $7,500 but less than $8,500, (7) $168 if
22the final rate of earnings is at least $8,500 but less than
23$9,500, and (8) $180 if the final rate of earnings is $9,500 or
24more, except that the annuity for those persons having made an
25election under Section 15-154(a-1) shall be calculated and
26payable under the portable retirement benefit program pursuant

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1to the provisions of Section 15-136.4.
2 Rule 4: A participant who is at least age 50 and has 25 or
3more years of service as a police officer or firefighter, and a
4participant who is age 55 or over and has at least 20 but less
5than 25 years of service as a police officer or firefighter,
6shall be entitled to a retirement annuity of 2 1/4% of the
7final rate of earnings for each of the first 10 years of
8service as a police officer or firefighter, 2 1/2% for each of
9the next 10 years of service as a police officer or
10firefighter, and 2 3/4% for each year of service as a police
11officer or firefighter in excess of 20. The retirement annuity
12for all other service shall be computed under Rule 1. A Tier 2
13member is eligible for a retirement annuity calculated under
14Rule 4 only if that Tier 2 member meets the service
15requirements for that benefit calculation as prescribed under
16this Rule 4 in addition to the applicable age requirement under
17subsection (a-5) of Section 15-135.
18 For purposes of this Rule 4, a participant's service as a
19firefighter shall also include the following:
20 (i) service that is performed while the person is an
21 employee under subsection (h) of Section 15-107; and
22 (ii) in the case of an individual who was a
23 participating employee employed in the fire department of
24 the University of Illinois's Champaign-Urbana campus
25 immediately prior to the elimination of that fire
26 department and who immediately after the elimination of

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1 that fire department transferred to another job with the
2 University of Illinois, service performed as an employee of
3 the University of Illinois in a position other than police
4 officer or firefighter, from the date of that transfer
5 until the employee's next termination of service with the
6 University of Illinois.
7 (b) For a Tier 1 member, the retirement annuity provided
8under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each
9month the participant is under age 60 at the time of
10retirement. However, this reduction shall not apply in the
11following cases:
12 (1) For a disabled participant whose disability
13 benefits have been discontinued because he or she has
14 exhausted eligibility for disability benefits under clause
15 (6) of Section 15-152;
16 (2) For a participant who has at least the number of
17 years of service required to retire at any age under
18 subsection (a) of Section 15-135; or
19 (3) For that portion of a retirement annuity which has
20 been provided on account of service of the participant
21 during periods when he or she performed the duties of a
22 police officer or firefighter, if these duties were
23 performed for at least 5 years immediately preceding the
24 date the retirement annuity is to begin.
25 (b-5) The retirement annuity of a Tier 2 member who is
26retiring after attaining age 62 with at least 10 years of

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1service credit shall be reduced by 1/2 of 1% for each full
2month that the member's age is under age 67.
3 (c) The maximum retirement annuity provided under Rules 1,
42, 4, and 5 shall be the lesser of (1) the annual limit of
5benefits as specified in Section 415 of the Internal Revenue
6Code of 1986, as such Section may be amended from time to time
7and as such benefit limits shall be adjusted by the
8Commissioner of Internal Revenue, and (2) 80% of final rate of
9earnings.
10 (d) Subject to the provisions of subsection (d-1), a A Tier
111 member whose status as an employee terminates after August
1214, 1969 shall receive automatic increases in his or her
13retirement annuity as follows:
14 Effective January 1 immediately following the date the
15retirement annuity begins, the annuitant shall receive an
16increase in his or her monthly retirement annuity of 0.125% of
17the monthly retirement annuity provided under Rule 1, Rule 2,
18Rule 3, or Rule 4 contained in this Section, multiplied by the
19number of full months which elapsed from the date the
20retirement annuity payments began to January 1, 1972, plus
210.1667% of such annuity, multiplied by the number of full
22months which elapsed from January 1, 1972, or the date the
23retirement annuity payments began, whichever is later, to
24January 1, 1978, plus 0.25% of such annuity multiplied by the
25number of full months which elapsed from January 1, 1978, or
26the date the retirement annuity payments began, whichever is

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1later, to the effective date of the increase.
2 The annuitant shall receive an increase in his or her
3monthly retirement annuity on each January 1 thereafter during
4the annuitant's life of 3% of the monthly annuity provided
5under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
6Section. The change made under this subsection by P.A. 81-970
7is effective January 1, 1980 and applies to each annuitant
8whose status as an employee terminates before or after that
9date.
10 Beginning January 1, 1990, and except as provided in
11subsection (d-1), all automatic annual increases payable under
12this Section shall be calculated as a percentage of the total
13annuity payable at the time of the increase, including all
14increases previously granted under this Article.
15 The change made in this subsection by P.A. 85-1008 is
16effective January 26, 1988, and is applicable without regard to
17whether status as an employee terminated before that date.
18 (d-1) Notwithstanding any other provision of this Article,
19for a Tier 1 employee who made the election under paragraph (1)
20of subsection (a) of Section 15-132.9:
21 (1) The initial increase in retirement annuity under
22 this Section shall occur on the January 1 occurring either
23 on or after the attainment of age 67 or the fifth
24 anniversary of the annuity start date, whichever is
25 earlier.
26 (2) The amount of each automatic annual increase in

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1 retirement annuity or survivor annuity occurring on or
2 after the effective date of that election shall be
3 calculated as a percentage of the originally granted
4 retirement annuity or survivor annuity, equal to 3% or
5 one-half the annual unadjusted percentage increase (but
6 not less than zero) in the consumer price index-u for the
7 12 months ending with the September preceding each November
8 1, whichever is less. If the annual unadjusted percentage
9 change in the consumer price index-u for the 12 months
10 ending with the September preceding each November 1 is zero
11 or there is a decrease, then the annuity shall not be
12 increased.
13 For the purposes of this Section, "consumer price index-u"
14means the index published by the Bureau of Labor Statistics of
15the United States Department of Labor that measures the average
16change in prices of goods and services purchased by all urban
17consumers, United States city average, all items, 1982-84 =
18100. The new amount resulting from each annual adjustment shall
19be determined by the Public Pension Division of the Department
20of Insurance and made available to the board of the retirement
21system by November 1 of each year.
22 (d-5) A retirement annuity of a Tier 2 member shall receive
23annual increases on the January 1 occurring either on or after
24the attainment of age 67 or the first anniversary of the
25annuity start date, whichever is later. Each annual increase
26shall be calculated at 3% or one half the annual unadjusted

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1percentage increase (but not less than zero) in the consumer
2price index-u for the 12 months ending with the September
3preceding each November 1, whichever is less, of the originally
4granted retirement annuity. If the annual unadjusted
5percentage change in the consumer price index-u for the 12
6months ending with the September preceding each November 1 is
7zero or there is a decrease, then the annuity shall not be
8increased.
9 (e) If, on January 1, 1987, or the date the retirement
10annuity payment period begins, whichever is later, the sum of
11the retirement annuity provided under Rule 1 or Rule 2 of this
12Section and the automatic annual increases provided under the
13preceding subsection or Section 15-136.1, amounts to less than
14the retirement annuity which would be provided by Rule 3, the
15retirement annuity shall be increased as of January 1, 1987, or
16the date the retirement annuity payment period begins,
17whichever is later, to the amount which would be provided by
18Rule 3 of this Section. Such increased amount shall be
19considered as the retirement annuity in determining benefits
20provided under other Sections of this Article. This paragraph
21applies without regard to whether status as an employee
22terminated before the effective date of this amendatory Act of
231987, provided that the annuitant was employed at least
24one-half time during the period on which the final rate of
25earnings was based.
26 (f) A participant is entitled to such additional annuity as

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1may be provided on an actuarially equivalent basis, by any
2accumulated additional contributions to his or her credit.
3However, the additional contributions made by the participant
4toward the automatic increases in annuity provided under this
5Section shall not be taken into account in determining the
6amount of such additional annuity.
7 (g) If, (1) by law, a function of a governmental unit, as
8defined by Section 20-107 of this Code, is transferred in whole
9or in part to an employer, and (2) a participant transfers
10employment from such governmental unit to such employer within
116 months after the transfer of the function, and (3) the sum of
12(A) the annuity payable to the participant under Rule 1, 2, or
133 of this Section (B) all proportional annuities payable to the
14participant by all other retirement systems covered by Article
1520, and (C) the initial primary insurance amount to which the
16participant is entitled under the Social Security Act, is less
17than the retirement annuity which would have been payable if
18all of the participant's pension credits validated under
19Section 20-109 had been validated under this system, a
20supplemental annuity equal to the difference in such amounts
21shall be payable to the participant.
22 (h) On January 1, 1981, an annuitant who was receiving a
23retirement annuity on or before January 1, 1971 shall have his
24or her retirement annuity then being paid increased $1 per
25month for each year of creditable service. On January 1, 1982,
26an annuitant whose retirement annuity began on or before

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1January 1, 1977, shall have his or her retirement annuity then
2being paid increased $1 per month for each year of creditable
3service.
4 (i) On January 1, 1987, any annuitant whose retirement
5annuity began on or before January 1, 1977, shall have the
6monthly retirement annuity increased by an amount equal to 8
7per year of creditable service times the number of years that
8have elapsed since the annuity began.
9(Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;
1098-92, eff. 7-16-13.)
11 (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
12 Sec. 15-155. Employer contributions.
13 (a) The State of Illinois shall make contributions by
14appropriations of amounts which, together with the other
15employer contributions from trust, federal, and other funds,
16employee contributions, income from investments, and other
17income of this System, will be sufficient to meet the cost of
18maintaining and administering the System on a 90% funded basis
19in accordance with actuarial recommendations.
20 The Board shall determine the amount of State contributions
21required for each fiscal year on the basis of the actuarial
22tables and other assumptions adopted by the Board and the
23recommendations of the actuary, using the formula in subsection
24(a-1).
25 (a-1) For State fiscal years 2018 through 2045 (except as

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1otherwise provided for fiscal year 2019), the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of total payroll, including payroll that is
9not deemed pensionable, but excluding payroll attributable to
10participants in the defined contribution plan under Section
1115-200.1, over the years remaining to and including fiscal year
122045 and shall be determined under the projected unit credit
13actuarial cost method.
14 For State fiscal year 2019:
15 (1) The initial calculation and certification shall be
16 based on the amount determined above.
17 (2) For purposes of the recertification due on or
18 before May 1, 2018, the recalculation of the required State
19 contribution for fiscal year 2019 shall take into account
20 the effect on the System's liabilities of the elections
21 made under Section 15-132.9.
22 (3) For purposes of the recertification due on or
23 before October 1, 2018, the total required State
24 contribution for fiscal year 2019 shall be reduced by the
25 amount of the consideration payments made to Tier 1
26 employees who made the election under paragraph (1) of

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1 subsection (a) of Section 15-132.9.
2 Beginning in State fiscal year 2018, any increase or
3decrease in State contribution over the prior fiscal year due
4exclusively to changes in actuarial or investment assumptions
5adopted by the Board shall be included in the State
6contribution to the System, as a percentage of the applicable
7employee payroll, and shall be increased in equal annual
8increments so that by the State fiscal year occurring 5 years
9after the adoption of the actuarial or investment assumptions,
10the State is contributing at the rate otherwise required under
11this Section.
12 For State fiscal years 2012 through 2017 2045, the minimum
13contribution to the System to be made by the State for each
14fiscal year shall be an amount determined by the System to be
15sufficient to bring the total assets of the System up to 90% of
16the total actuarial liabilities of the System by the end of
17State fiscal year 2045. In making these determinations, the
18required State contribution shall be calculated each year as a
19level percentage of payroll over the years remaining to and
20including fiscal year 2045 and shall be determined under the
21projected unit credit actuarial cost method.
22 For State fiscal years 1996 through 2005, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25so that by State fiscal year 2011, the State is contributing at
26the rate required under this Section.

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1 Notwithstanding any other provision of this Article, the
2total required State contribution for State fiscal year 2006 is
3$166,641,900.
4 Notwithstanding any other provision of this Article, the
5total required State contribution for State fiscal year 2007 is
6$252,064,100.
7 For each of State fiscal years 2008 through 2009, the State
8contribution to the System, as a percentage of the applicable
9employee payroll, shall be increased in equal annual increments
10from the required State contribution for State fiscal year
112007, so that by State fiscal year 2011, the State is
12contributing at the rate otherwise required under this Section.
13 Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2010 is
15$702,514,000 and shall be made from the State Pensions Fund and
16proceeds of bonds sold in fiscal year 2010 pursuant to Section
177.2 of the General Obligation Bond Act, less (i) the pro rata
18share of bond sale expenses determined by the System's share of
19total bond proceeds, (ii) any amounts received from the General
20Revenue Fund in fiscal year 2010, (iii) any reduction in bond
21proceeds due to the issuance of discounted bonds, if
22applicable.
23 Notwithstanding any other provision of this Article, the
24total required State contribution for State fiscal year 2011 is
25the amount recertified by the System on or before April 1, 2011
26pursuant to Section 15-165 and shall be made from the State

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1Pensions Fund and proceeds of bonds sold in fiscal year 2011
2pursuant to Section 7.2 of the General Obligation Bond Act,
3less (i) the pro rata share of bond sale expenses determined by
4the System's share of total bond proceeds, (ii) any amounts
5received from the General Revenue Fund in fiscal year 2011, and
6(iii) any reduction in bond proceeds due to the issuance of
7discounted bonds, if applicable.
8 Beginning in State fiscal year 2046, the minimum State
9contribution for each fiscal year shall be the amount needed to
10maintain the total assets of the System at 90% of the total
11actuarial liabilities of the System.
12 Amounts received by the System pursuant to Section 25 of
13the Budget Stabilization Act or Section 8.12 of the State
14Finance Act in any fiscal year do not reduce and do not
15constitute payment of any portion of the minimum State
16contribution required under this Article in that fiscal year.
17Such amounts shall not reduce, and shall not be included in the
18calculation of, the required State contributions under this
19Article in any future year until the System has reached a
20funding ratio of at least 90%. A reference in this Article to
21the "required State contribution" or any substantially similar
22term does not include or apply to any amounts payable to the
23System under Section 25 of the Budget Stabilization Act.
24 Notwithstanding any other provision of this Section, the
25required State contribution for State fiscal year 2005 and for
26fiscal year 2008 and each fiscal year thereafter, as calculated

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1under this Section and certified under Section 15-165, shall
2not exceed an amount equal to (i) the amount of the required
3State contribution that would have been calculated under this
4Section for that fiscal year if the System had not received any
5payments under subsection (d) of Section 7.2 of the General
6Obligation Bond Act, minus (ii) the portion of the State's
7total debt service payments for that fiscal year on the bonds
8issued in fiscal year 2003 for the purposes of that Section
97.2, as determined and certified by the Comptroller, that is
10the same as the System's portion of the total moneys
11distributed under subsection (d) of Section 7.2 of the General
12Obligation Bond Act. In determining this maximum for State
13fiscal years 2008 through 2010, however, the amount referred to
14in item (i) shall be increased, as a percentage of the
15applicable employee payroll, in equal increments calculated
16from the sum of the required State contribution for State
17fiscal year 2007 plus the applicable portion of the State's
18total debt service payments for fiscal year 2007 on the bonds
19issued in fiscal year 2003 for the purposes of Section 7.2 of
20the General Obligation Bond Act, so that, by State fiscal year
212011, the State is contributing at the rate otherwise required
22under this Section.
23 (a-2) For employees first hired on or after 6 months after
24the effective date of this amendatory Act of the 100th General
25Assembly who have elected the benefits under Section 1-161 of
26this Code, the employer shall annually contribute an amount,

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1expressed as a percentage of payroll, equal to the defined
2benefit normal cost of the defined benefit plan, less the
3employee contribution, plus 2%. On an annual basis, the System
4shall certify to each employer the amount of unfunded liability
5accrued in the employer's account to be paid by the employer so
6that the System is 90% funded by the end of State fiscal year
72045. The contributions shall be divided equally over a
812-month period and made monthly. The employer shall also
9contribute an amount equal to the employer defined
10contribution, as set on an individual employee basis, under
11paragraph (2) of subsection (k) of Section 1-161 during each
12pay period. The System shall have the authority to adopt rules
13regarding implementation of employer contributions.
14 (b) If an employee is paid from trust or federal funds, the
15employer shall pay to the Board contributions from those funds
16which are sufficient to cover the accruing normal costs on
17behalf of the employee. However, universities having employees
18who are compensated out of local auxiliary funds, income funds,
19or service enterprise funds are not required to pay such
20contributions on behalf of those employees. The local auxiliary
21funds, income funds, and service enterprise funds of
22universities shall not be considered trust funds for the
23purpose of this Article, but funds of alumni associations,
24foundations, and athletic associations which are affiliated
25with the universities included as employers under this Article
26and other employers which do not receive State appropriations

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1are considered to be trust funds for the purpose of this
2Article.
3 (b-1) The City of Urbana and the City of Champaign shall
4each make employer contributions to this System for their
5respective firefighter employees who participate in this
6System pursuant to subsection (h) of Section 15-107. The rate
7of contributions to be made by those municipalities shall be
8determined annually by the Board on the basis of the actuarial
9assumptions adopted by the Board and the recommendations of the
10actuary, and shall be expressed as a percentage of salary for
11each such employee. The Board shall certify the rate to the
12affected municipalities as soon as may be practical. The
13employer contributions required under this subsection shall be
14remitted by the municipality to the System at the same time and
15in the same manner as employee contributions.
16 (c) Through State fiscal year 1995: The total employer
17contribution shall be apportioned among the various funds of
18the State and other employers, whether trust, federal, or other
19funds, in accordance with actuarial procedures approved by the
20Board. State of Illinois contributions for employers receiving
21State appropriations for personal services shall be payable
22from appropriations made to the employers or to the System. The
23contributions for Class I community colleges covering earnings
24other than those paid from trust and federal funds, shall be
25payable solely from appropriations to the Illinois Community
26College Board or the System for employer contributions.

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1 (d) Beginning in State fiscal year 1996, the required State
2contributions to the System shall be appropriated directly to
3the System and shall be payable through vouchers issued in
4accordance with subsection (c) of Section 15-165, except as
5provided in subsection (g).
6 (e) The State Comptroller shall draw warrants payable to
7the System upon proper certification by the System or by the
8employer in accordance with the appropriation laws and this
9Code.
10 (f) Normal costs under this Section means liability for
11pensions and other benefits which accrues to the System because
12of the credits earned for service rendered by the participants
13during the fiscal year and expenses of administering the
14System, but shall not include the principal of or any
15redemption premium or interest on any bonds issued by the Board
16or any expenses incurred or deposits required in connection
17therewith.
18 (g) For academic years beginning on or after June 1, 2005
19and before July 1, 2018, if If the amount of a participant's
20earnings for any academic year used to determine the final rate
21of earnings, determined on a full-time equivalent basis,
22exceeds the amount of his or her earnings with the same
23employer for the previous academic year, determined on a
24full-time equivalent basis, by more than 6%, the participant's
25employer shall pay to the System, in addition to all other
26payments required under this Section and in accordance with

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1guidelines established by the System, the present value of the
2increase in benefits resulting from the portion of the increase
3in earnings that is in excess of 6%. This present value shall
4be computed by the System on the basis of the actuarial
5assumptions and tables used in the most recent actuarial
6valuation of the System that is available at the time of the
7computation. The System may require the employer to provide any
8pertinent information or documentation.
9 Whenever it determines that a payment is or may be required
10under this subsection (g), the System shall calculate the
11amount of the payment and bill the employer for that amount.
12The bill shall specify the calculations used to determine the
13amount due. If the employer disputes the amount of the bill, it
14may, within 30 days after receipt of the bill, apply to the
15System in writing for a recalculation. The application must
16specify in detail the grounds of the dispute and, if the
17employer asserts that the calculation is subject to subsection
18(h) or (i) of this Section, must include an affidavit setting
19forth and attesting to all facts within the employer's
20knowledge that are pertinent to the applicability of subsection
21(h) or (i). Upon receiving a timely application for
22recalculation, the System shall review the application and, if
23appropriate, recalculate the amount due.
24 The employer contributions required under this subsection
25(g) may be paid in the form of a lump sum within 90 days after
26receipt of the bill. If the employer contributions are not paid

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1within 90 days after receipt of the bill, then interest will be
2charged at a rate equal to the System's annual actuarially
3assumed rate of return on investment compounded annually from
4the 91st day after receipt of the bill. Payments must be
5concluded within 3 years after the employer's receipt of the
6bill.
7 When assessing payment for any amount due under this
8subsection (g), the System shall include earnings, to the
9extent not established by a participant under Section 15-113.11
10or 15-113.12, that would have been paid to the participant had
11the participant not taken (i) periods of voluntary or
12involuntary furlough occurring on or after July 1, 2015 and on
13or before June 30, 2017 or (ii) periods of voluntary pay
14reduction in lieu of furlough occurring on or after July 1,
152015 and on or before June 30, 2017. Determining earnings that
16would have been paid to a participant had the participant not
17taken periods of voluntary or involuntary furlough or periods
18of voluntary pay reduction shall be the responsibility of the
19employer, and shall be reported in a manner prescribed by the
20System.
21 (g-1) For academic years beginning on or after July 1,
222018, if the amount of a participant's earnings for any
23academic year used to determine the final rate of earnings,
24determined on a full-time equivalent basis, exceeds the amount
25of his or her earnings with the same employer for the previous
26academic year, determined on a full-time equivalent basis, by

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1more than the unadjusted percentage increase in the consumer
2price index-u for the calendar year immediately preceding the
3beginning of the academic year, published by the Public Pension
4Division of the Department of Insurance by November 1 of each
5year, then the participant's employer shall pay to the System,
6in addition to all other payments required under this Section
7and in accordance with guidelines established by the System,
8the present value of the increase in benefits resulting from
9the portion of the increase in earnings that is in excess of
10the unadjusted percentage increase in the consumer price
11index-u for the applicable calendar year. This present value
12shall be computed by the System on the basis of the actuarial
13assumptions and tables used in the most recent actuarial
14valuation of the System that is available at the time of the
15computation. The System may require the employer to provide any
16pertinent information or documentation.
17 Whenever it determines that a payment is or may be required
18under this subsection (g-1), the System shall calculate the
19amount of the payment and bill the employer for that amount.
20The bill shall specify the calculations used to determine the
21amount due. If the employer disputes the amount of the bill, it
22may, within 30 days after receipt of the bill, apply to the
23System in writing for a recalculation. The application must
24specify in detail the grounds of the dispute and, if the
25employer asserts that the calculation is subject to subsection
26(i-1) of this Section, must include an affidavit setting forth

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1and attesting to all facts within the employer's knowledge that
2are pertinent to the applicability of subsection (i-1). Upon
3receiving a timely application for recalculation, the System
4shall review the application and, if appropriate, recalculate
5the amount due.
6 The employer contributions required under this subsection
7(g-1) may be paid in the form of a lump sum within 90 days after
8receipt of the bill. If the employer contributions are not paid
9within 90 days after receipt of the bill, then interest shall
10be charged at a rate equal to the System's annual actuarially
11assumed rate of return on investment compounded annually from
12the 91st day after receipt of the bill. Payments must be
13concluded within 3 years after the employer's receipt of the
14bill.
15 For the purposes of this Section, "consumer price index-u"
16means the index published by the Bureau of Labor Statistics of
17the United States Department of Labor that measures the average
18change in prices of goods and services purchased by all urban
19consumers, United States city average, all items, 1982-84 =
20100. The new amount resulting from each annual adjustment shall
21be determined by the Public Pension Division of the Department
22of Insurance and made available to the boards of the retirement
23systems and pension funds by November 1 of each year.
24 (h) This subsection (h) applies only to payments made or
25salary increases given on or after June 1, 2005 but before July
261, 2011. The changes made by Public Act 94-1057 shall not

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1require the System to refund any payments received before July
231, 2006 (the effective date of Public Act 94-1057).
3 When assessing payment for any amount due under subsection
4(g), the System shall exclude earnings increases paid to
5participants under contracts or collective bargaining
6agreements entered into, amended, or renewed before June 1,
72005.
8 When assessing payment for any amount due under subsection
9(g), the System shall exclude earnings increases paid to a
10participant at a time when the participant is 10 or more years
11from retirement eligibility under Section 15-135.
12 When assessing payment for any amount due under subsection
13(g), the System shall exclude earnings increases resulting from
14overload work, including a contract for summer teaching, or
15overtime when the employer has certified to the System, and the
16System has approved the certification, that: (i) in the case of
17overloads (A) the overload work is for the sole purpose of
18academic instruction in excess of the standard number of
19instruction hours for a full-time employee occurring during the
20academic year that the overload is paid and (B) the earnings
21increases are equal to or less than the rate of pay for
22academic instruction computed using the participant's current
23salary rate and work schedule; and (ii) in the case of
24overtime, the overtime was necessary for the educational
25mission.
26 When assessing payment for any amount due under subsection

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1(g), the System shall exclude any earnings increase resulting
2from (i) a promotion for which the employee moves from one
3classification to a higher classification under the State
4Universities Civil Service System, (ii) a promotion in academic
5rank for a tenured or tenure-track faculty position, or (iii) a
6promotion that the Illinois Community College Board has
7recommended in accordance with subsection (k) of this Section.
8These earnings increases shall be excluded only if the
9promotion is to a position that has existed and been filled by
10a member for no less than one complete academic year and the
11earnings increase as a result of the promotion is an increase
12that results in an amount no greater than the average salary
13paid for other similar positions.
14 (i) When assessing payment for any amount due under
15subsection (g), the System shall exclude any salary increase
16described in subsection (h) of this Section given on or after
17July 1, 2011 but before July 1, 2014 under a contract or
18collective bargaining agreement entered into, amended, or
19renewed on or after June 1, 2005 but before July 1, 2011.
20Notwithstanding any other provision of this Section, any
21payments made or salary increases given after June 30, 2014
22shall be used in assessing payment for any amount due under
23subsection (g) of this Section.
24 (i-1) When assessing payment for any amount due under
25subsection (g-1), the System shall exclude salary increases
26paid to participants under contracts or collective bargaining

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1agreements entered into, amended, or renewed before the
2effective date of this amendatory Act of the 100th General
3Assembly.
4 (j) The System shall prepare a report and file copies of
5the report with the Governor and the General Assembly by
6January 1, 2007 that contains all of the following information:
7 (1) The number of recalculations required by the
8 changes made to this Section by Public Act 94-1057 for each
9 employer.
10 (2) The dollar amount by which each employer's
11 contribution to the System was changed due to
12 recalculations required by Public Act 94-1057.
13 (3) The total amount the System received from each
14 employer as a result of the changes made to this Section by
15 Public Act 94-4.
16 (4) The increase in the required State contribution
17 resulting from the changes made to this Section by Public
18 Act 94-1057.
19 (j-5) For academic years beginning on or after July 1,
202018, if the amount of a participant's earnings for any
21academic year, determined on a full-time equivalent basis,
22exceeds $140,000, the participant's employer shall pay to the
23System, in addition to all other payments required under this
24Section and in accordance with guidelines established by the
25System, the amount of the earnings that exceed $140,000
26multiplied by the level percentage of payroll used in that

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1fiscal year, as determined by the System, to be sufficient to
2bring the total assets of the System up to 90% of the total
3actuarial liabilities of the System by the end of State fiscal
4year 2045. This amount shall be computed by the System on the
5basis of the actuarial assumptions and tables used in the most
6recent actuarial valuation of the System that is available at
7the time of the computation. The System may require the
8employer to provide any pertinent information or
9documentation.
10 Whenever it determines that a payment is or may be required
11under this subsection, the System shall calculate the amount of
12the payment and bill the employer for that amount. The bill
13shall specify the calculations used to determine the amount
14due. If the employer disputes the amount of the bill, it may,
15within 30 days after receipt of the bill, apply to the System
16in writing for a recalculation. The application must specify in
17detail the grounds of the dispute. Upon receiving a timely
18application for recalculation, the System shall review the
19application and, if appropriate, recalculate the amount due.
20 The employer contributions required under this subsection
21may be paid in the form of a lump sum within 90 days after
22receipt of the bill. If the employer contributions are not paid
23within 90 days after receipt of the bill, then interest will be
24charged at a rate equal to the System's annual actuarially
25assumed rate of return on investment compounded annually from
26the 91st day after receipt of the bill. Payments must be

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1concluded within 3 years after the employer's receipt of the
2bill.
3 (k) The Illinois Community College Board shall adopt rules
4for recommending lists of promotional positions submitted to
5the Board by community colleges and for reviewing the
6promotional lists on an annual basis. When recommending
7promotional lists, the Board shall consider the similarity of
8the positions submitted to those positions recognized for State
9universities by the State Universities Civil Service System.
10The Illinois Community College Board shall file a copy of its
11findings with the System. The System shall consider the
12findings of the Illinois Community College Board when making
13determinations under this Section. The System shall not exclude
14any earnings increases resulting from a promotion when the
15promotion was not submitted by a community college. Nothing in
16this subsection (k) shall require any community college to
17submit any information to the Community College Board.
18 (l) For purposes of determining the required State
19contribution to the System, the value of the System's assets
20shall be equal to the actuarial value of the System's assets,
21which shall be calculated as follows:
22 As of June 30, 2008, the actuarial value of the System's
23assets shall be equal to the market value of the assets as of
24that date. In determining the actuarial value of the System's
25assets for fiscal years after June 30, 2008, any actuarial
26gains or losses from investment return incurred in a fiscal

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1year shall be recognized in equal annual amounts over the
25-year period following that fiscal year.
3 (m) For purposes of determining the required State
4contribution to the system for a particular year, the actuarial
5value of assets shall be assumed to earn a rate of return equal
6to the system's actuarially assumed rate of return.
7 (n) If Section 15-132.9 is determined to be
8unconstitutional or otherwise invalid by a final unappealable
9decision of an Illinois court or a court of competent
10jurisdiction, then the changes made to this Section by this
11amendatory Act of the 100th General Assembly shall not take
12effect and are repealed by operation of law.
13(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
1499-897, eff. 1-1-17.)
15 (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)
16 Sec. 15-157. Employee Contributions.
17 (a) Each participating employee shall make contributions
18towards the retirement benefits payable under the retirement
19program applicable to the employee from each payment of
20earnings applicable to employment under this system on and
21after the date of becoming a participant as follows: Prior to
22September 1, 1949, 3 1/2% of earnings; from September 1, 1949
23to August 31, 1955, 5%; from September 1, 1955 to August 31,
241969, 6%; from September 1, 1969, 6 1/2%. These contributions
25are to be considered as normal contributions for purposes of

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1this Article.
2 Each participant who is a police officer or firefighter
3shall make normal contributions of 8% of each payment of
4earnings applicable to employment as a police officer or
5firefighter under this system on or after September 1, 1981,
6unless he or she files with the board within 60 days after the
7effective date of this amendatory Act of 1991 or 60 days after
8the board receives notice that he or she is employed as a
9police officer or firefighter, whichever is later, a written
10notice waiving the retirement formula provided by Rule 4 of
11Section 15-136. This waiver shall be irrevocable. If a
12participant had met the conditions set forth in Section
1315-132.1 prior to the effective date of this amendatory Act of
141991 but failed to make the additional normal contributions
15required by this paragraph, he or she may elect to pay the
16additional contributions plus compound interest at the
17effective rate. If such payment is received by the board, the
18service shall be considered as police officer service in
19calculating the retirement annuity under Rule 4 of Section
2015-136. While performing service described in clause (i) or
21(ii) of Rule 4 of Section 15-136, a participating employee
22shall be deemed to be employed as a firefighter for the purpose
23of determining the rate of employee contributions under this
24Section.
25 (b) Starting September 1, 1969, each participating
26employee shall make additional contributions of 1/2 of 1% of

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1earnings to finance a portion of the cost of the annual
2increases in retirement annuity provided under Section 15-136,
3except that with respect to participants in the self-managed
4plan this additional contribution shall be used to finance the
5benefits obtained under that retirement program. Beginning
6July 1, 2018 or the effective date of the Tier 1 employee's
7election under paragraph (1) of subsection (a) of Section
815-132.9, whichever is later, each Tier 1 employee who made the
9election under paragraph (1) of subsection (a) of Section
1015-132.9 is no longer required to make contributions under this
11subsection.
12 (c) Except as provided in subsection (c-5), in In addition
13to the amounts described in subsections (a) and (b) of this
14Section, each participating employee shall make contributions
15of 1% of earnings applicable under this system on and after
16August 1, 1959. The contributions made under this subsection
17(c) shall be considered as survivor's insurance contributions
18for purposes of this Article if the employee is covered under
19the traditional benefit package, and such contributions shall
20be considered as additional contributions for purposes of this
21Article if the employee is participating in the self-managed
22plan or has elected to participate in the portable benefit
23package and has completed the applicable one-year waiting
24period. Contributions in excess of $80 during any fiscal year
25beginning before August 31, 1969 and in excess of $120 during
26any fiscal year thereafter until September 1, 1971 shall be

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1considered as additional contributions for purposes of this
2Article.
3 (c-5) Beginning July 1, 2018 or the effective date of the
4Tier 1 employee's election under paragraph (1) of subsection
5(a) of Section 15-132.9, whichever is later, in lieu of the
6contributions otherwise required under subsection (c), each
7Tier 1 employee who made the election under paragraph (1) of
8subsection (a) of Section 15-132.9 shall make contributions of
90.7% of earnings applicable under this System and each Tier 1
10employee who is a police officer or firefighter who makes
11normal contributions of 8% of each payment of earnings
12applicable to employment as a police officer or firefighter
13under this System and who made the election under paragraph (1)
14of subsection (a) of Section 15-132.9 shall make contributions
15of 0.55% of earnings applicable under this System. The
16contributions made under this subsection (c-5) shall be
17considered as survivor's insurance contributions for purposes
18of this Article and such contributions shall be considered as
19additional contributions for purposes of this Article if the
20employee has elected to participate in the portable benefit
21package and has completed the applicable one-year waiting
22period.
23 (d) If the board by board rule so permits and subject to
24such conditions and limitations as may be specified in its
25rules, a participant may make other additional contributions of
26such percentage of earnings or amounts as the participant shall

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1elect in a written notice thereof received by the board.
2 (e) That fraction of a participant's total accumulated
3normal contributions, the numerator of which is equal to the
4number of years of service in excess of that which is required
5to qualify for the maximum retirement annuity, and the
6denominator of which is equal to the total service of the
7participant, shall be considered as accumulated additional
8contributions. The determination of the applicable maximum
9annuity and the adjustment in contributions required by this
10provision shall be made as of the date of the participant's
11retirement.
12 (f) Notwithstanding the foregoing, a participating
13employee shall not be required to make contributions under this
14Section after the date upon which continuance of such
15contributions would otherwise cause his or her retirement
16annuity to exceed the maximum retirement annuity as specified
17in clause (1) of subsection (c) of Section 15-136.
18 (g) A participant may make contributions for the purchase
19of service credit under this Article; however, only a
20participating employee may make optional contributions under
21subsection (b) of Section 15-157.1 of this Article.
22 (h) A Tier 2 member shall not make contributions on
23earnings that exceed the limitation as prescribed under
24subsection (b) of Section 15-111 of this Article.
25(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)

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1 (40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 15-165. To certify amounts and submit vouchers.
5 (a) The Board shall certify to the Governor on or before
6November 15 of each year until November 15, 2011 the
7appropriation required from State funds for the purposes of
8this System for the following fiscal year. The certification
9under this subsection (a) shall include a copy of the actuarial
10recommendations upon which it is based and shall specifically
11identify the System's projected State normal cost for that
12fiscal year and the projected State cost for the self-managed
13plan for that fiscal year.
14 On or before May 1, 2004, the Board shall recalculate and
15recertify to the Governor the amount of the required State
16contribution to the System for State fiscal year 2005, taking
17into account the amounts appropriated to and received by the
18System under subsection (d) of Section 7.2 of the General
19Obligation Bond Act.
20 On or before July 1, 2005, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2006, taking
23into account the changes in required State contributions made
24by this amendatory Act of the 94th General Assembly.
25 On or before April 1, 2011, the Board shall recalculate and
26recertify to the Governor the amount of the required State

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1contribution to the System for State fiscal year 2011, applying
2the changes made by Public Act 96-889 to the System's assets
3and liabilities as of June 30, 2009 as though Public Act 96-889
4was approved on that date.
5 (a-5) On or before November 1 of each year, beginning
6November 1, 2012, the Board shall submit to the State Actuary,
7the Governor, and the General Assembly a proposed certification
8of the amount of the required State contribution to the System
9for the next fiscal year, along with all of the actuarial
10assumptions, calculations, and data upon which that proposed
11certification is based. On or before January 1 of each year,
12beginning January 1, 2013, the State Actuary shall issue a
13preliminary report concerning the proposed certification and
14identifying, if necessary, recommended changes in actuarial
15assumptions that the Board must consider before finalizing its
16certification of the required State contributions. On or before
17January 15, 2013 and each January 15 thereafter, the Board
18shall certify to the Governor and the General Assembly the
19amount of the required State contribution for the next fiscal
20year. The Board's certification must note, in a written
21response to the State Actuary, any deviations from the State
22Actuary's recommended changes, the reason or reasons for not
23following the State Actuary's recommended changes, and the
24fiscal impact of not following the State Actuary's recommended
25changes on the required State contribution.
26 On or before May 1, 2018, the Board shall recalculate and

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1recertify to the Governor and the General Assembly the amount
2of the required State contribution to the System for State
3fiscal year 2019, taking into account the effect on the
4System's liabilities of the elections made under Section
515-132.9.
6 On or before October 1, 2018, the Board shall recalculate
7and recertify to the Governor and the General Assembly the
8amount of the required State contribution to the System for
9State fiscal year 2019, taking into account the reduction
10specified under item (3) of subsection (a-1) of Section 15-155.
11 (a-10) For purposes of subsection (c-5) of Section 20 of
12the Budget Stabilization Act, on or before November 1 of each
13year beginning November 1, 2019, the Board shall determine the
14amount of the State contribution to the System that would have
15been required for the next fiscal year if Section 1-161,
16subsection (a-2) of Section 15-155, and the changes made to
17Section 1-160 by this amendatory Act of the 100th General
18Assembly had not taken effect, using the best and most recent
19available data but based on the law in effect on May 31, 2019.
20The Board shall submit to the State Actuary, the Governor, and
21the General Assembly a proposed certification, along with the
22relevant law, actuarial assumptions, calculations, and data
23upon which that certification is based. On or before January 1,
242020 and every January 1 thereafter, the State Actuary shall
25issue a preliminary report concerning the proposed
26certification and identifying, if necessary, recommended

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1changes in actuarial assumptions that the Board must consider
2before finalizing its certification. On or before January 15,
32020 and every January 1 thereafter, the Board shall certify to
4the Governor and the General Assembly the amount of the State
5contribution to the System that would have been required for
6the next fiscal year if Section 1-161, subsection (a-2) of
7Section 15-155, and the changes made to Section 1-160 by this
8amendatory Act of the 100th General Assembly had not taken
9effect, using the best and most recent available data but based
10on the law in effect on May 31, 2019. The Board's certification
11must note any deviations from the State Actuary's recommended
12changes, the reason or reasons for not following the State
13Actuary's recommended changes, and the impact of not following
14the State Actuary's recommended changes.
15 (a-15) As soon as practical after the effective date of
16this amendatory Act of the 100th General Assembly, the Board
17shall recalculate and recertify to the State Actuary, the
18Governor, and the General Assembly the amount of the State
19contribution to the System for State fiscal year 2018, taking
20into account the changes in required State contributions made
21by this amendatory Act of the 100th General Assembly. The State
22Actuary shall review the assumptions and valuations underlying
23the Board's revised certification and issue a preliminary
24report concerning the proposed recertification and
25identifying, if necessary, recommended changes in actuarial
26assumptions that the Board must consider before finalizing its

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1certification of the required State contributions. The Board's
2final certification must note any deviations from the State
3Actuary's recommended changes, the reason or reasons for not
4following the State Actuary's recommended changes, and the
5fiscal impact of not following the State Actuary's recommended
6changes on the required State contribution.
7 (b) The Board shall certify to the State Comptroller or
8employer, as the case may be, from time to time, by its
9chairperson and secretary, with its seal attached, the amounts
10payable to the System from the various funds.
11 (c) Beginning in State fiscal year 1996, on or as soon as
12possible after the 15th day of each month the Board shall
13submit vouchers for payment of State contributions to the
14System, in a total monthly amount of one-twelfth of the
15required annual State contribution certified under subsection
16(a). From the effective date of this amendatory Act of the 93rd
17General Assembly through June 30, 2004, the Board shall not
18submit vouchers for the remainder of fiscal year 2004 in excess
19of the fiscal year 2004 certified contribution amount
20determined under this Section after taking into consideration
21the transfer to the System under subsection (b) of Section
226z-61 of the State Finance Act. These vouchers shall be paid by
23the State Comptroller and Treasurer by warrants drawn on the
24funds appropriated to the System for that fiscal year.
25 If in any month the amount remaining unexpended from all
26other appropriations to the System for the applicable fiscal

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1year (including the appropriations to the System under Section
28.12 of the State Finance Act and Section 1 of the State
3Pension Funds Continuing Appropriation Act) is less than the
4amount lawfully vouchered under this Section, the difference
5shall be paid from the General Revenue Fund under the
6continuing appropriation authority provided in Section 1.1 of
7the State Pension Funds Continuing Appropriation Act.
8 (d) So long as the payments received are the full amount
9lawfully vouchered under this Section, payments received by the
10System under this Section shall be applied first toward the
11employer contribution to the self-managed plan established
12under Section 15-158.2. Payments shall be applied second toward
13the employer's portion of the normal costs of the System, as
14defined in subsection (f) of Section 15-155. The balance shall
15be applied toward the unfunded actuarial liabilities of the
16System.
17 (e) In the event that the System does not receive, as a
18result of legislative enactment or otherwise, payments
19sufficient to fully fund the employer contribution to the
20self-managed plan established under Section 15-158.2 and to
21fully fund that portion of the employer's portion of the normal
22costs of the System, as calculated in accordance with Section
2315-155(a-1), then any payments received shall be applied
24proportionately to the optional retirement program established
25under Section 15-158.2 and to the employer's portion of the
26normal costs of the System, as calculated in accordance with

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1Section 15-155(a-1).
2(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
3 (40 ILCS 5/15-185.5 new)
4 Sec. 15-185.5. Accelerated pension benefit payment.
5 (a) As used in this Section:
6 "Eligible person" means a person who:
7 (1) has terminated service;
8 (2) has accrued sufficient service credit to be
9 eligible to receive a retirement annuity under this
10 Article;
11 (3) has not received any retirement annuity under this
12 Article;
13 (4) does not have a QILDRO in effect against him or her
14 under this Article; and
15 (5) is not a participant in the self-managed plan under
16 Section 15-158.2.
17 "Pension benefit" means the benefits under this Article, or
18Article 1 as it relates to those benefits, including any
19anticipated annual increases, that an eligible person is
20entitled to upon attainment of the applicable retirement age.
21"Pension benefit" also includes applicable survivor's or
22disability benefits.
23 (b) Before January 1, 2018, and annually thereafter, the
24System shall calculate, using actuarial tables and other
25assumptions adopted by the Board, the net present value of

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1pension benefits for each eligible person and shall offer each
2eligible person the opportunity to irrevocably elect to receive
3an amount determined by the System to be equal to 70% of the
4net present value of his or her pension benefits in lieu of
5receiving any pension benefit. The offer shall specify the
6dollar amount that the eligible person will receive if he or
7she so elects and shall expire when a subsequent offer is made
8to an eligible person or when the System determines that 10% of
9eligible persons in that year have made the election under this
10subsection, whichever occurs first. The System shall make a
11good faith effort to contact every eligible person to notify
12him or her of the election and of the amount of the accelerated
13pension benefit payment.
14 Until the System determines that 10% of eligible persons in
15that year have made the election under this subsection, an
16eligible person may irrevocably elect to receive an accelerated
17pension benefit payment in the amount that the System offers
18under this subsection in lieu of receiving any pension benefit.
19A person who elects to receive an accelerated pension benefit
20payment under this Section may not elect to proceed under the
21Retirement Systems Reciprocal Act with respect to service under
22this Article.
23 (c) A person's credits and creditable service under this
24Article shall be terminated upon the person's receipt of an
25accelerated pension benefit payment under this Section, and no
26other benefit shall be paid under this Article based on those

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1terminated credits and creditable service, including any
2retirement, survivor, or other benefit; except that to the
3extent that participation, benefits, or premiums under the
4State Employees Group Insurance Act of 1971 are based on the
5amount of service credit, the terminated service credit shall
6be used for that purpose.
7 (d) If a person who has received an accelerated pension
8benefit payment under this Section returns to participating
9employee status under this Article, then:
10 (1) Any benefits under the System earned as a result of
11 that return to participating employee status shall be based
12 solely on the person's credits and creditable service
13 arising from the return to participating employee status.
14 (2) The accelerated pension benefit payment may not be
15 repaid to the System, and the terminated credits and
16 creditable service may not under any circumstances be
17 reinstated.
18 (e) As a condition of receiving an accelerated pension
19benefit payment, an eligible person must have another
20retirement plan or account qualified under the Internal Revenue
21Code of 1986, as amended, for the accelerated pension benefit
22payment to be rolled into. The accelerated pension benefit
23payment under this Section may be subject to withholding or
24payment of applicable taxes, but to the extent permitted by
25federal law, a person who receives an accelerated pension
26benefit payment under this Section must direct the System to

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1pay all of that payment as a rollover into another retirement
2plan or account qualified under the Internal Revenue Code of
31986, as amended.
4 (f) Before January 1, 2019 and every January 1 thereafter,
5the Board shall certify to the Illinois Finance Authority and
6the General Assembly the amount by which the total amount of
7accelerated pension benefit payments made under this Section
8exceed the amount appropriated to the System for the purpose of
9making those payments.
10 (g) The Board shall adopt any rules necessary to implement
11this Section.
12 (h) No provision of this Section shall be interpreted in a
13way that would cause the applicable System to cease to be a
14qualified plan under the Internal Revenue Code of 1986.
15 (i) Notwithstanding any other provision of this Section, in
16no case shall the total amount of accelerated pension benefit
17payments paid under this Section, Section 14-147.5, and Section
1816-190.5 cause the Illinois Finance Authority to issue more
19than the $250,000,000 of State Pension Obligation Acceleration
20Bonds authorized in subsection (c-5) of Section 801-40 of the
21Illinois Finance Authority Act.
22 (40 ILCS 5/15-198)
23 (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25 Sec. 15-198. Application and expiration of new benefit

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1increases.
2 (a) As used in this Section, "new benefit increase" means
3an increase in the amount of any benefit provided under this
4Article, or an expansion of the conditions of eligibility for
5any benefit under this Article, that results from an amendment
6to this Code that takes effect after the effective date of this
7amendatory Act of the 94th General Assembly. "New benefit
8increase", however, does not include any benefit increase
9resulting from the changes made to this Article by this
10amendatory Act of the 100th General Assembly.
11 (b) Notwithstanding any other provision of this Code or any
12subsequent amendment to this Code, every new benefit increase
13is subject to this Section and shall be deemed to be granted
14only in conformance with and contingent upon compliance with
15the provisions of this Section.
16 (c) The Public Act enacting a new benefit increase must
17identify and provide for payment to the System of additional
18funding at least sufficient to fund the resulting annual
19increase in cost to the System as it accrues.
20 Every new benefit increase is contingent upon the General
21Assembly providing the additional funding required under this
22subsection. The Commission on Government Forecasting and
23Accountability shall analyze whether adequate additional
24funding has been provided for the new benefit increase and
25shall report its analysis to the Public Pension Division of the
26Department of Insurance Financial and Professional Regulation.

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1A new benefit increase created by a Public Act that does not
2include the additional funding required under this subsection
3is null and void. If the Public Pension Division determines
4that the additional funding provided for a new benefit increase
5under this subsection is or has become inadequate, it may so
6certify to the Governor and the State Comptroller and, in the
7absence of corrective action by the General Assembly, the new
8benefit increase shall expire at the end of the fiscal year in
9which the certification is made.
10 (d) Every new benefit increase shall expire 5 years after
11its effective date or on such earlier date as may be specified
12in the language enacting the new benefit increase or provided
13under subsection (c). This does not prevent the General
14Assembly from extending or re-creating a new benefit increase
15by law.
16 (e) Except as otherwise provided in the language creating
17the new benefit increase, a new benefit increase that expires
18under this Section continues to apply to persons who applied
19and qualified for the affected benefit while the new benefit
20increase was in effect and to the affected beneficiaries and
21alternate payees of such persons, but does not apply to any
22other person, including without limitation a person who
23continues in service after the expiration date and did not
24apply and qualify for the affected benefit while the new
25benefit increase was in effect.
26(Source: P.A. 94-4, eff. 6-1-05.)

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1 (40 ILCS 5/15-200.1 new)
2 Sec. 15-200.1. Defined contribution plan.
3 (a) By July 1, 2018, the System shall prepare and implement
4a voluntary defined contribution plan for up to 5% of eligible
5Tier 1 employees. The System shall determine the 5% cap by the
6number of Tier 1 employees on the effective date of this
7Section. The defined contribution plan developed under this
8Section shall be a plan that aggregates employer and employee
9contributions in individual participant accounts which, after
10meeting any other requirements, are used for payouts after
11retirement in accordance with this Section and any other
12applicable laws.
13 As used in this Section, "defined benefit plan" means the
14retirement plan available under this Article to Tier 1
15employees who have not made the election authorized under this
16Section.
17 (1) Under the defined contribution plan, a Tier 1
18 employee of this System could elect to cease accruing
19 benefits in the defined benefit plan under this Article and
20 begin accruing benefits for future service in the defined
21 contribution plan. Service credit under the defined
22 contribution plan may be used for determining retirement
23 eligibility under the defined benefit plan. A Tier 1
24 employee who elects to cease accruing benefits in his or
25 her defined benefit plan shall be prohibited from

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1 purchasing service credit on or after the date of his or
2 her election. A Tier 1 employee making the irrevocable
3 election provided under this Section shall not receive
4 interest accruals to his or her Rule 2 benefit on or after
5 the date of his or her election.
6 (2) Participants in the defined contribution plan
7 shall pay employee contributions at the same rate as other
8 participants under this Article as determined by the
9 System.
10 (3) State contributions shall be paid into the accounts
11 of all participants in the defined contribution plan at a
12 uniform rate, expressed as a percentage of earnings and
13 determined for each year. This rate shall be no higher than
14 the employer's normal cost for Tier 1 employees in the
15 defined benefit plan for that year, as determined by the
16 System and expressed as a percentage of earnings, and shall
17 be no lower than 3% of earnings. The State shall adjust
18 this rate annually.
19 (4) The defined contribution plan shall require 5 years
20 of participation in the defined contribution plan before
21 vesting in State contributions. If the participant fails to
22 vest in them, the State contributions, and the earnings
23 thereon, shall be forfeited.
24 (5) The defined contribution plan may provide for
25 participants in the plan to be eligible for the defined
26 disability benefits available to other participants under

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1 this Article. If it does, the System shall reduce the
2 employee contributions credited to the member's defined
3 contribution plan account by an amount determined by the
4 System to cover the cost of offering such benefits.
5 (6) The defined contribution plan shall provide a
6 variety of options for investments. These options shall
7 include investments handled by the System as well as
8 private sector investment options.
9 (7) The defined contribution plan shall provide a
10 variety of options for payouts to retirees and their
11 survivors.
12 (8) To the extent authorized under federal law and as
13 authorized by the System, the plan shall allow former
14 participants in the plan to transfer or roll over employee
15 and vested State contributions, and the earnings thereon,
16 into other qualified retirement plans.
17 (9) The System shall reduce the employee contributions
18 credited to the member's defined contribution plan account
19 by an amount determined by the System to cover the cost of
20 offering these benefits and any applicable administrative
21 fees.
22 (b) Only persons who are Tier 1 employees of the System on
23the effective date of this Section are eligible to participate
24in the defined contribution plan. Participation in the defined
25contribution plan shall be limited to the first 5% of eligible
26persons who elect to participate. The election to participate

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1in the defined contribution plan is voluntary and irrevocable.
2 (c) An eligible Tier 1 employee may irrevocably elect to
3participate in the defined contribution plan by filing with the
4System a written application to participate that is received by
5the System prior to its determination that 5% of eligible
6persons have elected to participate in the defined contribution
7plan.
8 When the System first determines that 5% of eligible
9persons have elected to participate in the defined contribution
10plan, the System shall provide notice to previously eligible
11employees that the plan is no longer available and shall cease
12accepting applications to participate.
13 (d) The System shall make a good faith effort to contact
14each Tier 1 employee who is eligible to participate in the
15defined contribution plan. The System shall mail information
16describing the option to join the defined contribution plan to
17each of these employees to his or her last known address on
18file with the System. If the employee is not responsive to
19other means of contact, it is sufficient for the System to
20publish the details of the option on its website.
21 Upon request for further information describing the
22option, the System shall provide employees with information
23from the System before exercising the option to join the plan,
24including information on the impact to their vested benefits or
25non-vested service. The individual consultation shall include
26projections of the member's defined benefits at retirement or

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1earlier termination of service and the value of the member's
2account at retirement or earlier termination of service. The
3System shall not provide advice or counseling with respect to
4whether the employee should exercise the option. The System
5shall inform Tier 1 employees who are eligible to participate
6in the defined contribution plan that they may also wish to
7obtain information and counsel relating to their option from
8any other available source, including but not limited to labor
9organizations, private counsel, and financial advisors.
10 (e) In no event shall the System, its staff, its authorized
11representatives, or the Board be liable for any information
12given to an employee under this Section. The System may
13coordinate with the Illinois Department of Central Management
14Services and other retirement systems administering a defined
15contribution plan in accordance with this amendatory Act of the
16100th General Assembly to provide information concerning the
17impact of the option set forth in this Section.
18 (f) Notwithstanding any other provision of this Section, no
19person shall begin participating in the defined contribution
20plan until it has attained qualified plan status and received
21all necessary approvals from the U.S. Internal Revenue Service.
22 (g) The System shall report on its progress under this
23Section, including the available details of the defined
24contribution plan and the System's plans for informing eligible
25Tier 1 employees about the plan, to the Governor and the
26General Assembly on or before January 15, 2018.

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1 (h) If a Tier 1 employee has not made an election under
2Section 15-134.5 of this Code, then the plan prescribed under
3this Section shall not apply to that Tier 1 employee and that
4Tier 1 employee shall remain eligible to make the election
5prescribed under Section 15-134.5.
6 (i) The intent of this amendatory Act of the 100th General
7Assembly is to ensure that the State's normal cost of
8participation in the defined contribution plan is similar, and
9if possible equal, to the State's normal cost of participation
10in the defined benefit plan, unless a lower State's normal cost
11is necessary to ensure cost neutrality.
12 (40 ILCS 5/15-201.1 new)
13 Sec. 15-201.1. Defined contribution plan; termination. If
14the defined contribution plan is terminated or becomes
15inoperative pursuant to law, then each participant in the plan
16shall automatically be deemed to have been a contributing Tier
171 employee participating in the System's defined benefit plan
18during the time in which he or she participated in the defined
19contribution plan, and for that purpose the System shall be
20entitled to recover the amounts in the participant's defined
21contribution accounts.
22 (40 ILCS 5/16-107.1 new)
23 Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
24teacher under this Article who first became a member or

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1participant before January 1, 2011 under any reciprocal
2retirement system or pension fund established under this Code
3other than a retirement system or pension fund established
4under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for
5the purposes of the election under Section 16-122.9, "Tier 1
6employee" does not include a teacher under this Article who
7would qualify as a Tier 1 employee but who has made an
8irrevocable election on or before June 1, 2017 to retire from
9service pursuant to the terms of an employment contract or a
10collective bargaining agreement in effect on June 1, 2017,
11excluding any extension, amendment, or renewal of that
12agreement after that date, and has notified the System of that
13election.
14 (40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)
15 (Text of Section WITHOUT the changes made by P.A. 98-599,
16which has been held unconstitutional)
17 Sec. 16-121. Salary. "Salary": The actual compensation
18received by a teacher during any school year and recognized by
19the system in accordance with rules of the board. For purposes
20of this Section, "school year" includes the regular school term
21plus any additional period for which a teacher is compensated
22and such compensation is recognized by the rules of the board.
23 Notwithstanding any other provision of this Section,
24"salary" does not include any future increase in income that is
25offered by an employer for service as a Tier 1 employee under

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1this Article pursuant to the condition set forth in subsection
2(c) of Section 16-122.9 and accepted under that condition by a
3Tier 1 employee who has made the election under paragraph (2)
4of subsection (a) of Section 16-122.9.
5 Notwithstanding any other provision of this Section,
6"salary" does not include any consideration payment made to a
7Tier 1 employee.
8(Source: P.A. 84-1028.)
9 (40 ILCS 5/16-121.1 new)
10 Sec. 16-121.1. Future increase in income. "Future increase
11in income" means an increase to a Tier 1 employee's base pay
12that is offered by an employer to the Tier 1 employee for
13service under this Article after June 30, 2018 that qualifies
14as "salary", as defined in Section 16-121, or would qualify as
15"salary" but for the fact that it was offered to and accepted
16by the Tier 1 employee under the condition set forth in
17subsection (c) of Section 16-122.9. The term "future increase
18in income" includes an increase to a Tier 1 employee's base pay
19that is paid to the Tier 1 employee pursuant to an extension,
20amendment, or renewal of any such employment contract or
21collective bargaining agreement after the effective date of
22this Section.
23 (40 ILCS 5/16-121.2 new)
24 Sec. 16-121.2. Base pay. As used in Section 16-121.1 of

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1this Code, "base pay" means the greater of either (i) the Tier
21 employee's annualized rate of salary as of June 30, 2018, or
3(ii) the Tier 1 employee's annualized rate of salary
4immediately preceding the expiration, renewal, or amendment of
5an employment contract or collective bargaining agreement in
6effect on the effective date of this Section. For a person
7returning to active service as a Tier 1 employee after June 30,
82018, however, "base pay" means the employee's annualized rate
9of salary as of the employee's last date of service prior to
10July 1, 2018. The System shall calculate the base pay of each
11Tier 1 employee pursuant to this Section.
12 (40 ILCS 5/16-122.9 new)
13 Sec. 16-122.9. Election by Tier 1 employees.
14 (a) Each active Tier 1 employee shall make an irrevocable
15election either:
16 (1) to agree to delay his or her eligibility for
17 automatic annual increases in retirement annuity as
18 provided in subsection (a-1) of Section 16-133.1 or
19 subsection (b-1) of Section 16-136.1, whichever is
20 applicable, and to have the amount of the automatic annual
21 increases in his or her retirement annuity and survivor
22 benefit that are otherwise provided for in this Article
23 calculated, instead, as provided in subsection (a-1) of
24 Section 16-133.1 or subsection (b-1) of Section 16-136.1,
25 whichever is applicable; or

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1 (2) to not agree to paragraph (1) of this subsection.
2 The election required under this subsection (a) shall be
3made by each active Tier 1 employee no earlier than January 1,
42018 and no later than March 31, 2018, except that:
5 (i) a person who becomes a Tier 1 employee under this
6 Article on or after February 1, 2018 must make the election
7 under this subsection (a) within 60 days after becoming a
8 Tier 1 employee; and
9 (ii) a person who returns to active service as a Tier 1
10 employee under this Article on or after February 1, 2018
11 and has not yet made an election under this Section must
12 make the election under this subsection (a) within 60 days
13 after returning to active service as a Tier 1 employee.
14 If a Tier 1 employee fails for any reason to make a
15required election under this subsection within the time
16specified, then the employee shall be deemed to have made the
17election under paragraph (2) of this subsection.
18 (a-5) If this Section is enjoined or stayed by an Illinois
19court or a court of competent jurisdiction pending the entry of
20a final and unappealable decision, and this Section is
21determined to be constitutional or otherwise valid by a final
22unappealable decision of an Illinois court or a court of
23competent jurisdiction, then the election procedure set forth
24in subsection (a) of this Section shall commence on the 180th
25calendar day after the date of the issuance of the final
26unappealable decision and shall conclude at the end of the

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1270th calendar day after that date.
2 (a-10) All elections under subsection (a) that are made or
3deemed to be made before July 1, 2018 shall take effect on July
41, 2018. Elections that are made or deemed to be made on or
5after July 1, 2018 shall take effect on the first day of the
6month following the month in which the election is made or
7deemed to be made.
8 (b) As adequate and legal consideration provided under this
9amendatory Act of the 100th General Assembly for making an
10election under paragraph (1) of subsection (a) of this Section,
11an employer shall be expressly and irrevocably prohibited from
12offering any future increases in income to a Tier 1 employee
13who has made an election under paragraph (1) of subsection (a)
14of this Section on the condition of not constituting salary
15under Section 16-121.
16 As adequate and legal consideration provided under this
17amendatory Act of the 100th General Assembly for making an
18election under paragraph (1) of subsection (a) of this Section,
19each Tier 1 employee who has made an election under paragraph
20(1) of subsection (a) of this Section shall receive a
21consideration payment equal to 10% of the contributions made by
22or on behalf of the employee under paragraphs (1), (2), and (3)
23of subsection (a) of Section 16-152 before the effective date
24of that election. The State Comptroller shall pay the
25consideration payment to the Tier 1 employee out of funds
26appropriated for that purpose under Section 1.9 of the State

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1Pension Funds Continuing Appropriation Act. The System shall
2calculate the amount of each consideration payment and, by July
31, 2018, shall certify to the State Comptroller the amount of
4the consideration payment, together with the name, address, and
5any other available payment information of the Tier 1 employee
6as found in the records of the System. The System shall make
7additional calculations and certifications of consideration
8payments to the State Comptroller as the System deems
9necessary.
10 (c) A Tier 1 employee who makes the election under
11paragraph (2) of subsection (a) of this Section shall not be
12subject to paragraph (1) of subsection (a) of this Section.
13However, each future increase in income offered by an employer
14under this Article to a Tier 1 employee who has made the
15election under paragraph (2) of subsection (a) of this Section
16shall be offered by the employer expressly and irrevocably on
17the condition of not constituting salary under Section 16-121
18and that the Tier 1 employee's acceptance of the offered future
19increase in income shall constitute his or her agreement to
20that condition.
21 (d) The System shall make a good faith effort to contact
22each Tier 1 employee subject to this Section. The System shall
23mail information describing the required election to each Tier
241 employee by United States Postal Service mail to his or her
25last known address on file with the System. If the Tier 1
26employee is not responsive to other means of contact, it is

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1sufficient for the System to publish the details of any
2required elections on its website or to publish those details
3in a regularly published newsletter or other existing public
4forum.
5 Tier 1 employees who are subject to this Section shall be
6provided with an election packet containing information
7regarding their options, as well as the forms necessary to make
8the required election. Upon request, the System shall offer
9Tier 1 employees an opportunity to receive information from the
10System before making the required election. The information may
11consist of video materials, group presentations, individual
12consultation with a member or authorized representative of the
13System in person or by telephone or other electronic means, or
14any combination of those methods. The System shall not provide
15advice or counseling with respect to which election a Tier 1
16employee should make or specific to the legal or tax
17circumstances of or consequences to the Tier 1 employee.
18 The System shall inform Tier 1 employees in the election
19packet required under this subsection that the Tier 1 employee
20may also wish to obtain information and counsel relating to the
21election required under this Section from any other available
22source, including, but not limited to, labor organizations and
23private counsel.
24 In no event shall the System, its staff, or the Board be
25held liable for any information given to a member regarding the
26elections under this Section. The System shall coordinate with

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1the Illinois Department of Central Management Services and each
2other retirement system administering an election in
3accordance with this amendatory Act of the 100th General
4Assembly to provide information concerning the impact of the
5election set forth in this Section.
6 (e) Notwithstanding any other provision of law, an employer
7under this Article is required to offer each future increase in
8income expressly and irrevocably on the condition of not
9constituting "salary" under Section 16-121 to any Tier 1
10employee who has made an election under paragraph (2) of
11subsection (a) of this Section. The offer shall also provide
12that the Tier 1 employee's acceptance of the offered future
13increase in income shall constitute his or her agreement to the
14condition set forth in this subsection.
15 For purposes of legislative intent, the condition set forth
16in this subsection shall be construed in a manner that ensures
17that the condition is not violated or circumvented through any
18contrivance of any kind.
19 (f) A member's election under this Section is not a
20prohibited election under subdivision (j)(1) of Section 1-119
21of this Code.
22 (g) No provision of this Section shall be interpreted in a
23way that would cause the System to cease to be a qualified plan
24under Section 401(a) of the Internal Revenue Code of 1986.
25 (h) If an election created by this amendatory Act in any
26other Article of this Code or any change deriving from that

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1election is determined to be unconstitutional or otherwise
2invalid by a final unappealable decision of an Illinois court
3or a court of competent jurisdiction, the invalidity of that
4provision shall not in any way affect the validity of this
5Section or the changes deriving from the election required
6under this Section.
7 (40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)
8 (Text of Section WITHOUT the changes made by P.A. 98-599,
9which has been held unconstitutional)
10 Sec. 16-133.1. Automatic annual increase in annuity.
11 (a) Each member with creditable service and retiring on or
12after August 26, 1969 is entitled to the automatic annual
13increases in annuity provided under this Section while
14receiving a retirement annuity or disability retirement
15annuity from the system.
16 Except as otherwise provided in subsection (a-1), an An
17annuitant shall first be entitled to an initial increase under
18this Section on the January 1 next following the first
19anniversary of retirement, or January 1 of the year next
20following attainment of age 61, whichever is later. At such
21time, the system shall pay an initial increase determined as
22follows:
23 (1) 1.5% of the originally granted retirement annuity
24 or disability retirement annuity multiplied by the number
25 of years elapsed, if any, from the date of retirement until

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1 January 1, 1972, plus
2 (2) 2% of the originally granted annuity multiplied by
3 the number of years elapsed, if any, from the date of
4 retirement or January 1, 1972, whichever is later, until
5 January 1, 1978, plus
6 (3) 3% of the originally granted annuity multiplied by
7 the number of years elapsed from the date of retirement or
8 January 1, 1978, whichever is later, until the effective
9 date of the initial increase.
10However, the initial annual increase calculated under this
11Section for the recipient of a disability retirement annuity
12granted under Section 16-149.2 shall be reduced by an amount
13equal to the total of all increases in that annuity received
14under Section 16-149.5 (but not exceeding 100% of the amount of
15the initial increase otherwise provided under this Section).
16 Except as otherwise provided in subsection (a-1),
17following Following the initial increase, automatic annual
18increases in annuity shall be payable on each January 1
19thereafter during the lifetime of the annuitant, determined as
20a percentage of the originally granted retirement annuity or
21disability retirement annuity for increases granted prior to
22January 1, 1990, and calculated as a percentage of the total
23amount of annuity, including previous increases under this
24Section, for increases granted on or after January 1, 1990, as
25follows: 1.5% for periods prior to January 1, 1972, 2% for
26periods after December 31, 1971 and prior to January 1, 1978,

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1and 3% for periods after December 31, 1977.
2 (a-1) Notwithstanding any other provision of this Article,
3for a Tier 1 employee who made the election under paragraph (1)
4of subsection (a) of Section 16-122.9:
5 (1) The initial increase in retirement annuity under
6 this Section shall occur on the January 1 occurring either
7 on or after the attainment of age 67 or the fifth
8 anniversary of the annuity start date, whichever is
9 earlier.
10 (2) The amount of each automatic annual increase in
11 retirement annuity and survivor benefit occurring on or
12 after the effective date of that election shall be
13 calculated as a percentage of the originally granted
14 retirement annuity or survivor benefit, equal to 3% or
15 one-half the annual unadjusted percentage increase (but
16 not less than zero) in the consumer price index-u for the
17 12 months ending with the September preceding each November
18 1, whichever is less. If the annual unadjusted percentage
19 change in the consumer price index-u for the 12 months
20 ending with the September preceding each November 1 is zero
21 or there is a decrease, then the annuity shall not be
22 increased.
23 For the purposes of this Section, "consumer price index-u"
24means the index published by the Bureau of Labor Statistics of
25the United States Department of Labor that measures the average
26change in prices of goods and services purchased by all urban

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1consumers, United States city average, all items, 1982-84 =
2100. The new amount resulting from each annual adjustment shall
3be determined by the Public Pension Division of the Department
4of Insurance and made available to the board of the retirement
5system by November 1 of each year.
6 (b) The automatic annual increases in annuity provided
7under this Section shall not be applicable unless a member has
8made contributions toward such increases for a period
9equivalent to one full year of creditable service. If a member
10contributes for service performed after August 26, 1969 but the
11member becomes an annuitant before such contributions amount to
12one full year's contributions based on the salary at the date
13of retirement, he or she may pay the necessary balance of the
14contributions to the system and be eligible for the automatic
15annual increases in annuity provided under this Section.
16 (c) Each member shall make contributions toward the cost of
17the automatic annual increases in annuity as provided under
18Section 16-152.
19