Illinois-2017-SB1335-Introduced

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB1335

Introduced 2/9/2017, by Sen. Melinda Bush

SYNOPSIS AS INTRODUCED:

`40 ILCS 5/4-118`	`from Ch. 108 1/2, par. 4-118`
`30 ILCS 805/8.41 new`

Amends the Downstate Firefighter Article of the Illinois Pension Code. Requires a unit of local government 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. Requires a specified additional contribution to the pension fund from that firefighter's primary employer. 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.

LRB100 06103 RPS 16135 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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LRB100 06103 RPS 16135 b

1 AN ACT concerning public employee benefits.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Pension Code is amended by changing

5 Section 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

9 municipality shall annually levy a tax upon all the taxable

10 property of the municipality at the rate on the dollar which

11 will produce an amount which, when added to the deductions from

12 the salaries or wages of firefighters and revenues available

13 from other sources, will equal a sum sufficient to meet the

14 annual actuarial requirements of the pension fund, as

15 determined by an enrolled actuary employed by the Illinois

16 Department of Insurance or by an enrolled actuary retained by

17 the pension fund or municipality. For the purposes of this

18 Section, the annual actuarial requirements of the pension fund

19 are equal to (1) the normal cost of the pension fund, or 17.5%

20 of the salaries and wages to be paid to firefighters for the

21 year involved, whichever is greater, plus (2) an annual amount

22 sufficient to bring the total assets of the pension fund up to

23 90% of the total actuarial liabilities of the pension fund by

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1 the end of municipal fiscal year 2040, as annually updated and

2 determined by an enrolled actuary employed by the Illinois

3 Department of Insurance or by an enrolled actuary retained by

4 the pension fund or the municipality. In making these

5 determinations, the required minimum employer contribution

6 shall be calculated each year as a level percentage of payroll

7 over the years remaining up to and including fiscal year 2040

8 and shall be determined under the projected unit credit

9 actuarial cost method. The amount to be applied towards the

10 amortization of the unfunded accrued liability in any year

11 shall not be less than the annual amount required to amortize

12 the unfunded accrued liability, including interest, as a level

13 percentage of payroll over the number of years remaining in the

14 40 year amortization period.

15 (a-2) A unit of local government that has established a

16 pension fund under this Article and who employs a full-time

17 firefighter, as defined in Section 4-106, shall be deemed a

18 primary employer with respect to that full-time firefighter.

19 Any unit of local government that employs a firefighter while

20 that firefighter continues to earn service credits as a

21 participant in a primary employer's pension fund under this

22 Article shall be deemed a secondary employer and such employees

23 shall be deemed to be secondary employee firefighters. Primary

24 and secondary employers shall have the following duties to

25 ensure that the primary employer's pension fund under this

26 Article is compensated for additional liabilities and risks to

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1 which firefighters are exposed when performing work as

2 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 primary employer shall, no later than 15 days

17 after receipt of the secondary employer's report,

18 contribute an additional amount equal to 9.455% of the

19 total amount of salaries and wages paid by the secondary

20 employer to the secondary employee firefighter and pay such

21 amount to its pension fund for deposit to the credit of the

22 pension fund.

23 (4) The primary employer and the pension fund of that

24 primary employer shall have standing to enforce the pension

25 funding obligations of the secondary employer and

26 secondary employee firefighters established under this

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1 subsection in accordance with the provisions of subsection

2 (b-10) of this Section.

3 The contributions required under this subsection apply

4 beginning on the first day of the primary employer's pension

5 fund's first fiscal year beginning on or after the effective

6 date of this amendatory Act of the 100th General Assembly.

7 (a-5) For purposes of determining the required employer

8 contribution to a pension fund, the value of the pension fund's

9 assets shall be equal to the actuarial value of the pension

10 fund's assets, which shall be calculated as follows:

11 (1) On March 30, 2011, the actuarial value of a pension

12 fund's assets shall be equal to the market value of the

13 assets as of that date.

14 (2) In determining the actuarial value of the pension

15 fund's assets for fiscal years after March 30, 2011, any

16 actuarial gains or losses from investment return incurred

17 in a fiscal year shall be recognized in equal annual

18 amounts over the 5-year period following that fiscal year.

19 (b) The tax shall be levied and collected in the same

20 manner as the general taxes of the municipality, and shall be

21 in addition to all other taxes now or hereafter authorized to

22 be levied upon all property within the municipality, and in

23 addition to the amount authorized to be levied for general

24 purposes, under Section 8-3-1 of the Illinois Municipal Code or

25 under Section 14 of the Fire Protection District Act. The tax

26 shall be forwarded directly to the treasurer of the board

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1 within 30 business days of receipt by the county (or, in the

2 case of amounts added to the tax levy under subsection (f),

3 used by the municipality to pay the employer contributions

4 required under subsection (b-1) of Section 15-155 of this

5 Code).

6 (b-5) If a participating municipality fails to transmit to

7 the fund contributions required of it under this Article for

8 more than 90 days after the payment of those contributions is

9 due, the fund may, after giving notice to the municipality,

10 certify to the State Comptroller the amounts of the delinquent

11 payments in accordance with any applicable rules of the

12 Comptroller, and the Comptroller must, beginning in fiscal year

13 2016, deduct and remit to the fund the certified amounts or a

14 portion of those amounts from the following proportions of

15 payments of State funds to the municipality:

16 (1) in fiscal year 2016, one-third of the total amount

17 of any payments of State funds to the municipality;

18 (2) in fiscal year 2017, two-thirds of the total amount

19 of any payments of State funds to the municipality; and

20 (3) in fiscal year 2018 and each fiscal year

21 thereafter, the total amount of any payments of State funds

22 to the municipality.

23 The State Comptroller may not deduct from any payments of

24 State funds to the municipality more than the amount of

25 delinquent payments certified to the State Comptroller by the

26 fund.

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LRB100 06103 RPS 16135 b

1 (b-10) If a unit of local government fails to transmit to

2 the fund contributions required of it under subsection (a-2) of

3 this Section for more than 90 days after the payment of those

4 contributions is due, the fund may, after giving notice to the

5 unit of local government, certify to the State Comptroller the

6 amounts of the delinquent payments in accordance with any

7 applicable rules of the Comptroller, and the Comptroller must,

8 beginning in fiscal year 2018, deduct and remit to the fund the

9 certified amounts or a portion of those amounts from payments

10 of State funds to the unit of local government. The State

11 Comptroller may not deduct from any payments of State funds to

12 the unit of local government more than the amount of delinquent

13 payments certified to the State Comptroller by the fund.

14 (c) The board shall make available to the membership and

15 the general public for inspection and copying at reasonable

16 times the most recent Actuarial Valuation Balance Sheet and Tax

17 Levy Requirement issued to the fund by the Department of

18 Insurance.

19 (d) The firefighters' pension fund shall consist of the

20 following moneys which shall be set apart by the treasurer of

21 the municipality: (1) all moneys derived from the taxes levied

22 hereunder; (2) contributions by firefighters as provided under

23 Section 4-118.1; (3) all rewards in money, fees, gifts, and

24 emoluments that may be paid or given for or on account of

25 extraordinary service by the fire department or any member

26 thereof, except when allowed to be retained by competitive

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1 awards; and (4) any money, real estate or personal property

2 received by the board.

3 (e) For the purposes of this Section, "enrolled actuary"

4 means an actuary: (1) who is a member of the Society of

5 Actuaries or the American Academy of Actuaries; and (2) who is

6 enrolled under Subtitle C of Title III of the Employee

7 Retirement Income Security Act of 1974, or who has been engaged

8 in providing actuarial services to one or more public

9 retirement systems for a period of at least 3 years as of July

10 1, 1983.

11 (f) The corporate authorities of a municipality that

12 employs a person who is described in subdivision (d) of Section

13 4-106 may add to the tax levy otherwise provided for in this

14 Section an amount equal to the projected cost of the employer

15 contributions required to be paid by the municipality to the

16 State Universities Retirement System under subsection (b-1) of

17 Section 15-155 of this Code.

18 (g) The Commission on Government Forecasting and

19 Accountability shall conduct a study of all funds established

20 under this Article and shall report its findings to the General

21 Assembly on or before January 1, 2013. To the fullest extent

22 possible, the study shall include, but not be limited to, the

23 following:

24 (1) fund balances;

25 (2) historical employer contribution rates for each

26 fund;

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1 (3) the actuarial formulas used as a basis for employer

2 contributions, including the actual assumed rate of return

3 for each year, for each fund;

4 (4) available contribution funding sources;

5 (5) the impact of any revenue limitations caused by

6 PTELL and employer home rule or non-home rule status; and

7 (6) existing statutory funding compliance procedures

8 and funding enforcement mechanisms for all municipal

9 pension funds.

10 (Source: P.A. 99-8, eff. 7-9-15.)

11 Section 90. The State Mandates Act is amended by adding

12 Section 8.41 as follows:

13 (30 ILCS 805/8.41 new)

14 Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8

15 of this Act, no reimbursement by the State is required for the

16 implementation of any mandate created by this amendatory Act of

17 the 100th General Assembly.

18 Section 99. Effective date. This Act takes effect upon

19 becoming law.