Bill Text: IL SB1235 | 2023-2024 | 103rd General Assembly | Enrolled

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Bill Title: Reinserts the provisions of the engrossed bill with the following changes. Further amends the State Universities Article of the Illinois Pension Code. Provides that beginning September 1, 2024, a provision excluding specified earnings in the determination of the final rate of earnings applies to an employee who has been employed at 1/2 time or less for 3 or more years. Adds an inseverability provision. Effective immediately.

Spectrum: Partisan Bill (Democrat 51-0)

Status: (Passed) 2023-08-11 - Public Act . . . . . . . . . 103-0548 [SB1235 Detail]

Download: Illinois-2023-SB1235-Enrolled.html

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SB1235 Enrolled LRB103 25499 RPS 51848 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by
changing Sections 15-112, 15-134.1, and 15-198 as follows:
(40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
Sec. 15-112. Final rate of earnings. "Final rate of
earnings":
(a) This subsection (a) applies only to a Tier 1 member.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings during the 48
consecutive calendar month period ending with the last day of
final termination of employment or the 4 consecutive academic
years of service in which the employee's earnings were the
highest, whichever is greater. For any other employee, the
average annual earnings during the 4 consecutive academic
years of service in which his or her earnings were the highest.
For an employee with less than 48 months or 4 consecutive
academic years of service, the average earnings during his or
her entire period of service. The earnings of an employee with
more than 36 months of service under item (a) of Section
15-113.1 prior to the date of becoming a participant are, for

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such period, considered equal to the average earnings during
the last 36 months of such service.
(b) This subsection (b) applies to a Tier 2 member.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings obtained by
dividing by 8 the total earnings of the employee during the 96
consecutive months in which the total earnings were the
highest within the last 120 months prior to termination.
For any other employee, the average annual earnings during
the 8 consecutive academic years within the 10 years prior to
termination in which the employee's earnings were the highest.
For an employee with less than 96 consecutive months or 8
consecutive academic years of service, whichever is necessary,
the average earnings during his or her entire period of
service.
(c) For an employee on leave of absence with pay, or on
leave of absence without pay who makes contributions during
such leave, earnings are assumed to be equal to the basic
compensation on the date the leave began.
(d) For an employee on disability leave, earnings are
assumed to be equal to the basic compensation on the date
disability occurs or the average earnings during the 24 months
immediately preceding the month in which disability occurs,
whichever is greater.
(e) For a Tier 1 member who retires on or after the

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effective date of this amendatory Act of 1997 with at least 20
years of service as a firefighter or police officer under this
Article, the final rate of earnings shall be the annual rate of
earnings received by the participant on his or her last day as
a firefighter or police officer under this Article, if that is
greater than the final rate of earnings as calculated under
the other provisions of this Section.
(f) If a Tier 1 member is an employee for at least 6 months
during the academic year in which his or her employment is
terminated, the annual final rate of earnings shall be 25% of
the sum of (1) the annual basic compensation for that year, and
(2) the amount earned during the 36 months immediately
preceding that year, if this is greater than the final rate of
earnings as calculated under the other provisions of this
Section.
(g) In the determination of the final rate of earnings for
an employee, that part of an employee's earnings for any
academic year beginning after June 30, 1997, which exceeds the
employee's earnings with that employer for the preceding year
by more than 20 percent shall be excluded; in the event that an
employee has more than one employer this limitation shall be
calculated separately for the earnings with each employer. In
making such calculation, only the basic compensation of
employees shall be considered, without regard to vacation or
overtime or to contracts for summer employment. Beginning
September 1, 2024, this subsection (g) also applies to an

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employee who has been employed at 1/2 time or less for 3 or
more years.
(h) The following are not considered as earnings in
determining final rate of earnings: (1) severance or
separation pay, (2) retirement pay, (3) payment for unused
sick leave, and (4) payments from an employer for the period
used in determining final rate of earnings for any purpose
other than (i) services rendered, (ii) leave of absence or
vacation granted during that period, and (iii) vacation of up
to 56 work days allowed upon termination of employment; except
that, if the benefit has been collectively bargained between
the employer and the recognized collective bargaining agent
pursuant to the Illinois Educational Labor Relations Act,
payment received during a period of up to 2 academic years for
unused sick leave may be considered as earnings in accordance
with the applicable collective bargaining agreement, subject
to the 20% increase limitation of this Section. Any unused
sick leave considered as earnings under this Section shall not
be taken into account in calculating service credit under
Section 15-113.4.
(i) Intermittent periods of service shall be considered as
consecutive in determining final rate of earnings.
(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
(40 ILCS 5/15-134.1) (from Ch. 108 1/2, par. 15-134.1)
Sec. 15-134.1. Service calculation and adjustment.

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(a) For the purposes of computing service for academic
years for any participant, In computing service, the following
schedule shall govern: one month of service means a calendar
month during which a participant (i) qualifies as an employee
under Section 15-107 for at least 15 or more days, and (ii)
receives any earnings as an employee; 8 or more months of
service during an academic year shall constitute a year of
service; 6 or more but less than 8 months of service during an
academic year shall constitute 3/4 of a year of service; 3 or
more but less than 6 months of service during an academic year
shall constitute 1/2 of a year of service; and one or more but
less than 3 months of service during an academic year shall
constitute 1/4 of a year of service. No more than one year of
service may be granted per academic year, regardless of the
number of hours or percentage of time worked. This subsection
(a) does not apply to service periods to which subsection
(a-5) applies.
(a-5) For the purposes of computing service for academic
years for any participant, the following schedule shall
govern: one month of service means a calendar month during
which a participant (i) qualifies as an employee under Section
15-107 and contributes to the System, and (ii) receives any
earnings as an employee; 8 or more months of service during an
academic year shall constitute a year of service; 6 or more but
less than 8 months of service during an academic year shall
constitute 3/4 of a year of service; 3 or more but less than 6

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months of service during an academic year shall constitute 1/2
of a year of service; and one or more but less than 3 months of
service during an academic year shall constitute 1/4 of a year
of service. No more than one year of service may be granted per
academic year, regardless of the number of hours or percentage
of time worked.
This subsection (a-5) applies to all service periods of a
member who is a participant on or after September 1, 2024;
except that such changes shall not apply to service periods
that were subject to: (1) a purchase under subsection (i) of
Section 15-107, subsection (c) of Section 15-113.1, or Section
15-113.2, 15-113.3, 15-113.5, 15-113.6, 15-113.7, or
15-113.11; (2) a repayment of a refund under subsection (b) of
Section 15-154 or a distribution under subsection (j) of
Section 15-158.2; or (3) a transfer under Section 15-113.10,
15-134.2, or 15-134.4 if payment for such purchase, repayment,
or transfer commenced prior to September 1, 2024.
(b) In calculating a retirement annuity, if a participant
has been employed at 1/2 time or less for 3 or more years after
September 1, 1959, service shall be granted for such
employment in excess of 3 years, in the proportion that the
percentage of time employed for each such year of employment
bears to the average annual percentage of time employed during
the period on which the final rate of earnings is based. This
adjustment shall not be made, however, in determining the
eligibility for a retirement annuity, disability benefits,

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additional death benefits, or survivors' insurance. The
percentage of time employed shall be as reported by the
employer. This subsection (b) shall not apply to a member who
is a participant on or after September 1, 2024.
(Source: P.A. 87-8.)
(40 ILCS 5/15-198)
Sec. 15-198. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
100-23, Public Act 100-587, Public Act 100-769, Public Act
101-10, Public Act 101-610, Public Act 102-16, or this
amendatory Act of the 103rd General Assembly or this
amendatory Act of the 102nd General Assembly.
(b) Notwithstanding any other provision of this Code or
any subsequent amendment to this Code, every new benefit
increase is subject to this Section and shall be deemed to be
granted only in conformance with and contingent upon
compliance with the provisions of this Section.

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(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of
the Department of Insurance. A new benefit increase created by
a Public Act that does not include the additional funding
required under this subsection is null and void. If the Public
Pension Division determines that the additional funding
provided for a new benefit increase under this subsection is
or has become inadequate, it may so certify to the Governor and
the State Comptroller and, in the absence of corrective action
by the General Assembly, the new benefit increase shall expire
at the end of the fiscal year in which the certification is
made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.

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(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including, without limitation, a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
101-610, eff. 1-1-20; 102-16, eff. 6-17-21.)
Section 97. Inseverability. The changes made to existing
statutory law by this Act are mutually dependent and
inseverable. If any change made to existing statutory law by
this Act is held invalid other than as applied to a particular
person or circumstance, then all changes made to existing
statutory law by this Act are invalid in their entirety.
Section 99. Effective date. This Act takes effect upon
becoming law.