Bill Text: IL SB0037 | 2019-2020 | 101st General Assembly | Engrossed

Bill Title: Amends the Downstate Firefighter Article of the Illinois Pension Code. Requires a unit of local government of 5,000 or more inhabitants that employs a firefighter who is a full-time firefighter in a different downstate firefighter pension fund to make specified contributions to that downstate firefighter pension fund. Establishes reporting requirements. Authorizes the State comptroller to intercept State funds in the event the unit of local government does not make its required contribution to the primary employer's downstate pension fund. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Moderate Partisan Bill (Democrat 13-4)

Status: (Engrossed) 2019-05-22 - Held on Calendar Order of Second Reading - Short Debate [SB0037 Detail]

Download: Illinois-2019-SB0037-Engrossed.html

SB0037 EngrossedLRB101 02871 RPS 47879 b
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 Pension Code is amended by changing
5Section 4-118 as follows:
6 (40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
7 Sec. 4-118. Financing.
8 (a) The city council or the board of trustees of the
9municipality shall annually levy a tax upon all the taxable
10property of the municipality at the rate on the dollar which
11will produce an amount which, when added to the deductions from
12the salaries or wages of firefighters and revenues available
13from other sources, will equal a sum sufficient to meet the
14annual actuarial requirements of the pension fund, as
15determined by an enrolled actuary employed by the Illinois
16Department of Insurance or by an enrolled actuary retained by
17the pension fund or municipality. For the purposes of this
18Section, the annual actuarial requirements of the pension fund
19are equal to (1) the normal cost of the pension fund, or 17.5%
20of the salaries and wages to be paid to firefighters for the
21year involved, whichever is greater, plus (2) an annual amount
22sufficient to bring the total assets of the pension fund up to
2390% of the total actuarial liabilities of the pension fund by

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1the end of municipal fiscal year 2040, as annually updated and
2determined by an enrolled actuary employed by the Illinois
3Department of Insurance or by an enrolled actuary retained by
4the pension fund or the municipality. In making these
5determinations, the required minimum employer contribution
6shall be calculated each year as a level percentage of payroll
7over the years remaining up to and including fiscal year 2040
8and shall be determined under the projected unit credit
9actuarial cost method. The amount to be applied towards the
10amortization of the unfunded accrued liability in any year
11shall not be less than the annual amount required to amortize
12the unfunded accrued liability, including interest, as a level
13percentage of payroll over the number of years remaining in the
1440 year amortization period.
15 (a-2) A unit of local government that has established a
16pension fund under this Article and who employs a full-time
17firefighter, as defined in Section 4-106, shall be deemed a
18primary employer with respect to that full-time firefighter.
19Any unit of local government of 5,000 or more inhabitants that
20employs a firefighter while that firefighter continues to earn
21service credits as a participant in a primary employer's
22pension fund under this Article shall be deemed a secondary
23employer and such employees shall be deemed to be secondary
24employee firefighters. Primary and secondary employers shall
25have the following duties to ensure that the primary employer's
26pension fund under this Article is compensated for additional

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1liabilities and risks to which firefighters are exposed when
2performing work as firefighters for secondary employers:
3 (1) A secondary employer shall annually prepare a
4 report accounting for all wages and salaries paid to the
5 secondary employee firefighters it employs for each fiscal
6 year in which such firefighters are employed and transmit a
7 certified copy of that report to the primary employer and
8 the secondary employee firefighter no later than 30 days
9 after the end of any fiscal year in which wages were paid
10 to the secondary employee firefighters.
11 (2) The secondary employer, concurrent with the
12 certification of its report, shall contribute an amount
13 equal to 17.5% of the total wages and salaries paid to the
14 secondary employee firefighter to the primary employer's
15 pension fund for deposit to the credit of the pension fund.
16 (3) The secondary employer shall deduct an amount equal
17 to 9.455% of the salaries and wages paid to the secondary
18 employee and, concurrent with the certification of its
19 report, shall pay the deducted amount to the primary
20 employer's pension fund for deposit to the credit of the
21 pension fund. This contribution shall be in addition to the
22 contribution required under paragraph (2) of this
23 subsection.
24 (4) The primary employer and the pension fund of that
25 primary employer shall have standing to enforce the pension
26 funding obligations of the secondary employer and

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1 secondary employee firefighters established under this
2 subsection in accordance with the provisions of subsection
3 (b-10) of this Section.
4 The contributions required under paragraphs (2) and (3) of
5this subsection apply beginning on the first day of the primary
6employer's pension fund's first fiscal year beginning on or
7after the effective date of this amendatory Act of the 101st
8General Assembly.
9 The contributions required under paragraphs (2) and (3) of
10this subsection are for the purposes of compensating the
11primary employer's pension fund for additional liabilities and
12risks to which firefighters are exposed when performing work as
13firefighters for secondary employers.
14 Nothing in this Section shall be construed to allow a
15secondary employee to qualify for benefits or creditable
16service for employment as firefighters for secondary
18 (a-5) For purposes of determining the required employer
19contribution to a pension fund, the value of the pension fund's
20assets shall be equal to the actuarial value of the pension
21fund's assets, which shall be calculated as follows:
22 (1) On March 30, 2011, the actuarial value of a pension
23 fund's assets shall be equal to the market value of the
24 assets as of that date.
25 (2) In determining the actuarial value of the pension
26 fund's assets for fiscal years after March 30, 2011, any

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1 actuarial gains or losses from investment return incurred
2 in a fiscal year shall be recognized in equal annual
3 amounts over the 5-year period following that fiscal year.
4 (b) The tax shall be levied and collected in the same
5manner as the general taxes of the municipality, and shall be
6in addition to all other taxes now or hereafter authorized to
7be levied upon all property within the municipality, and in
8addition to the amount authorized to be levied for general
9purposes, under Section 8-3-1 of the Illinois Municipal Code or
10under Section 14 of the Fire Protection District Act. The tax
11shall be forwarded directly to the treasurer of the board
12within 30 business days of receipt by the county (or, in the
13case of amounts added to the tax levy under subsection (f),
14used by the municipality to pay the employer contributions
15required under subsection (b-1) of Section 15-155 of this
17 (b-5) If a participating municipality fails to transmit to
18the fund contributions required of it under this Article for
19more than 90 days after the payment of those contributions is
20due, the fund may, after giving notice to the municipality,
21certify to the State Comptroller the amounts of the delinquent
22payments in accordance with any applicable rules of the
23Comptroller, and the Comptroller must, beginning in fiscal year
242016, deduct and remit to the fund the certified amounts or a
25portion of those amounts from the following proportions of
26payments of State funds to the municipality:

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1 (1) in fiscal year 2016, one-third of the total amount
2 of any payments of State funds to the municipality;
3 (2) in fiscal year 2017, two-thirds of the total amount
4 of any payments of State funds to the municipality; and
5 (3) in fiscal year 2018 and each fiscal year
6 thereafter, the total amount of any payments of State funds
7 to the municipality.
8 The State Comptroller may not deduct from any payments of
9State funds to the municipality more than the amount of
10delinquent payments certified to the State Comptroller by the
12 (b-10) If a unit of local government fails to transmit to
13the fund contributions required of it under subsection (a-2) of
14this Section for more than 90 days after the payment of those
15contributions is due, the fund may, after giving notice to the
16unit of local government, certify to the State Comptroller the
17amounts of the delinquent payments in accordance with any
18applicable rules of the Comptroller, and the Comptroller must,
19beginning in fiscal year 2020, deduct and remit to the fund the
20certified amounts or a portion of those amounts from payments
21of State funds to the unit of local government. The State
22Comptroller may not deduct from any payments of State funds to
23the unit of local government more than the amount of delinquent
24payments certified to the State Comptroller by the fund.
25 (c) The board shall make available to the membership and
26the general public for inspection and copying at reasonable

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1times the most recent Actuarial Valuation Balance Sheet and Tax
2Levy Requirement issued to the fund by the Department of
4 (d) The firefighters' pension fund shall consist of the
5following moneys which shall be set apart by the treasurer of
6the municipality: (1) all moneys derived from the taxes levied
7hereunder; (2) contributions by firefighters as provided under
8Section 4-118.1; (3) all rewards in money, fees, gifts, and
9emoluments that may be paid or given for or on account of
10extraordinary service by the fire department or any member
11thereof, except when allowed to be retained by competitive
12awards; and (4) any money, real estate or personal property
13received by the board.
14 (e) For the purposes of this Section, "enrolled actuary"
15means an actuary: (1) who is a member of the Society of
16Actuaries or the American Academy of Actuaries; and (2) who is
17enrolled under Subtitle C of Title III of the Employee
18Retirement Income Security Act of 1974, or who has been engaged
19in providing actuarial services to one or more public
20retirement systems for a period of at least 3 years as of July
211, 1983.
22 (f) The corporate authorities of a municipality that
23employs a person who is described in subdivision (d) of Section
244-106 may add to the tax levy otherwise provided for in this
25Section an amount equal to the projected cost of the employer
26contributions required to be paid by the municipality to the

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1State Universities Retirement System under subsection (b-1) of
2Section 15-155 of this Code.
3 (g) The Commission on Government Forecasting and
4Accountability shall conduct a study of all funds established
5under this Article and shall report its findings to the General
6Assembly on or before January 1, 2013. To the fullest extent
7possible, the study shall include, but not be limited to, the
9 (1) fund balances;
10 (2) historical employer contribution rates for each
11 fund;
12 (3) the actuarial formulas used as a basis for employer
13 contributions, including the actual assumed rate of return
14 for each year, for each fund;
15 (4) available contribution funding sources;
16 (5) the impact of any revenue limitations caused by
17 PTELL and employer home rule or non-home rule status; and
18 (6) existing statutory funding compliance procedures
19 and funding enforcement mechanisms for all municipal
20 pension funds.
21(Source: P.A. 99-8, eff. 7-9-15.)
22 Section 90. The State Mandates Act is amended by adding
23Section 8.43 as follows:
24 (30 ILCS 805/8.43 new)

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1 Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
2of this Act, no reimbursement by the State is required for the
3implementation of any mandate created by this amendatory Act of
4the 101st General Assembly.
5 Section 99. Effective date. This Act takes effect upon
6becoming law.