Bill Text: IL HB5063 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the General Provisions Article of the Illinois Pension Code. In provisions that are applicable to certain new hires: (i) reduces the minimum age at which a participant is entitled to an unreduced retirement annuity and the annual increases in retirement annuity from 67 to 62, and (ii) removes provisions concerning entitlement to a reduced retirement annuity at age 62. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB5063 Detail]

Download: Illinois-2011-HB5063-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB5063 Introduced 2/7/2012, by Rep. Raymond Poe SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-160
30 ILCS 805/8.36 new
Amends the General Provisions Article of the Illinois Pension Code. In provisions that are applicable to certain new hires: (i) reduces the minimum age at which a participant is entitled to an unreduced retirement annuity and the annual increases in retirement annuity from 67 to 62, and (ii) removes provisions concerning entitlement to a reduced retirement annuity at age 62. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB097 16780 EFG 61960 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Section 1-160 as follows:
(40 ILCS 5/1-160)
Sec. 1-160. Provisions applicable to new hires.
(a) The provisions of this Section apply to a person who,
on or after January 1, 2011, first becomes a member or a
participant under any reciprocal retirement system or pension
fund established under this Code, other than a retirement
system or pension fund established under Article 2, 3, 4, 5, 6,
or 18 of this Code, notwithstanding any other provision of this
Code to the contrary, but do not apply to any self-managed plan
established under this Code, to any person with respect to
service as a sheriff's law enforcement employee under Article
7, or to any participant of the retirement plan established
under Section 22-101.
(b) "Final average salary" means the average monthly (or
annual) salary obtained by dividing the total salary or
earnings calculated under the Article applicable to the member
or participant during the 96 consecutive months (or 8
consecutive years) of service within the last 120 months (or 10

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years) of service in which the total salary or earnings
calculated under the applicable Article was the highest by the
number of months (or years) of service in that period. For the
purposes of a person who first becomes a member or participant
of any retirement system or pension fund to which this Section
applies on or after January 1, 2011, in this Code, "final
average salary" shall be substituted for the following:
(1) In Articles 7 (except for service as sheriff's law
enforcement employees) and 15, "final rate of earnings".
(2) In Articles 8, 9, 10, 11, and 12, "highest average
annual salary for any 4 consecutive years within the last
10 years of service immediately preceding the date of
withdrawal".
(3) In Article 13, "average final salary".
(4) In Article 14, "final average compensation".
(5) In Article 17, "average salary".
(6) In Section 22-207, "wages or salary received by him
at the date of retirement or discharge".
(b-5) Beginning on January 1, 2011, for all purposes under
this Code (including without limitation the calculation of
benefits and employee contributions), the annual earnings,
salary, or wages (based on the plan year) of a member or
participant to whom this Section applies shall not exceed
$106,800; however, that amount shall annually thereafter be
increased by the lesser of (i) 3% of that amount, including all
previous adjustments, or (ii) one-half the annual unadjusted

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

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67.
(e) Any retirement annuity or supplemental annuity shall be
subject to annual increases on the January 1 occurring either
on or after the attainment of age 62 67 or the first
anniversary of the annuity start date, whichever is later. Each
annual increase shall be calculated at 3% or one-half the
annual unadjusted percentage increase (but not less than zero)
in the consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less, of the
originally granted retirement annuity. If the annual
unadjusted percentage change in the consumer price index-u for
the 12 months ending with the September preceding each November
1 is zero or there is a decrease, then the annuity shall not be
increased.
(f) The initial survivor's or widow's annuity of an
otherwise eligible survivor or widow of a retired member or
participant who first became a member or participant on or
after January 1, 2011 shall be in the amount of 66 2/3% of the
retired member's or participant's retirement annuity at the
date of death. In the case of the death of a member or
participant who has not retired and who first became a member
or participant on or after January 1, 2011, eligibility for a
survivor's or widow's annuity shall be determined by the
applicable Article of this Code. The initial benefit shall be
66 2/3% of the earned annuity without a reduction due to age. A
child's annuity of an otherwise eligible child shall be in the

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amount prescribed under each Article if applicable. Any
survivor's or widow's annuity shall be increased (1) on each
January 1 occurring on or after the commencement of the annuity
if the deceased member died while receiving a retirement
annuity or (2) in other cases, on each January 1 occurring
after the first anniversary of the commencement of the annuity.
Each annual increase shall be calculated at 3% or one-half the
annual unadjusted percentage increase (but not less than zero)
in the consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is less, of the
originally granted survivor's annuity. If the annual
unadjusted percentage change in the consumer price index-u for
the 12 months ending with the September preceding each November
1 is zero or there is a decrease, then the annuity shall not be
increased.
(g) The benefits in Section 14-110 apply only if the person
is a State policeman, a fire fighter in the fire protection
service of a department, or a security employee of the
Department of Corrections or the Department of Juvenile
Justice, as those terms are defined in subsection (b) of
Section 14-110. A person who meets the requirements of this
Section is entitled to an annuity calculated under the
provisions of Section 14-110, in lieu of the regular or minimum
retirement annuity, only if the person has withdrawn from
service with not less than 20 years of eligible creditable
service and has attained age 60, regardless of whether the

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attainment of age 60 occurs while the person is still in
service.
(h) If a person who first becomes a member or a participant
of a retirement system or pension fund subject to this Section
on or after January 1, 2011 is receiving a retirement annuity
or retirement pension under that system or fund and becomes a
member or participant under any other system or fund created by
this Code and is employed on a full-time basis, except for
those members or participants exempted from the provisions of
this Section under subsection (a) of this Section, then the
person's retirement annuity or retirement pension under that
system or fund shall be suspended during that employment. Upon
termination of that employment, the person's retirement
annuity or retirement pension payments shall resume and be
recalculated if recalculation is provided for under the
applicable Article of this Code.
If a person who first becomes a member of a retirement
system or pension fund subject to this Section on or after
January 1, 2012 and is receiving a retirement annuity or
retirement pension under that system or fund and accepts on a
contractual basis a position to provide services to a
governmental entity from which he or she has retired, then that
person's annuity or retirement pension earned as an active
employee of the employer shall be suspended during that
contractual service. A person receiving an annuity or
retirement pension under this Code shall notify the pension

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fund or retirement system from which he or she is receiving an
annuity or retirement pension, as well as his or her
contractual employer, of his or her retirement status before
accepting contractual employment. A person who fails to submit
such notification shall be guilty of a Class A misdemeanor and
required to pay a fine of $1,000. Upon termination of that
contractual employment, the person's retirement annuity or
retirement pension payments shall resume and, if appropriate,
be recalculated under the applicable provisions of this Code.
(i) Notwithstanding any other provision of this Section, a
person who first becomes a participant of the retirement system
established under Article 15 on or after January 1, 2011 shall
have the option to enroll in the self-managed plan created
under Section 15-158.2 of this Code.
(j) In the case of a conflict between the provisions of
this Section and any other provision of this Code, the
provisions of this Section shall control.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
97-609, eff. 1-1-12.)
Section 90. The State Mandates Act is amended by adding
Section 8.36 as follows:
(30 ILCS 805/8.36 new)
Sec. 8.36. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the

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implementation of any mandate created by this amendatory Act of
the 97th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.