Bill Text: IL SB1366 | 2013-2014 | 98th General Assembly | Amended

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Bill Title: Amends the Cook County Article of the Illinois Pension Code. Defines the term "earned annuity". Effective immediately.

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Passed) 2013-06-28 - Public Act . . . . . . . . . 98-0042 [SB1366 Detail]

Download: Illinois-2013-SB1366-Amended.html

Rep. Elaine Nekritz

Filed: 5/8/2013

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1
AMENDMENT TO SENATE BILL 1366
2 AMENDMENT NO. ______. Amend Senate Bill 1366 by replacing
3everything after the enacting clause with the following:
4 "Section 5. The Illinois Pension Code is amended by
5changing Sections 16-133.2, 16-152, and 16-176 as follows:
6 (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
7 Sec. 16-133.2. Early retirement without discount.
8 (a) A member retiring after June 1, 1980 and on or before
9June 30, 2005 (or as provided in subsection (b) of this
10Section), and applying for a retirement annuity within 6 months
11of the last day of teaching for which retirement contributions
12were required, may elect at the time of application for a
13retirement annuity, to make a one time member contribution to
14the System and thereby avoid the reduction in the retirement
15annuity for retirement before age 60 specified in paragraph (B)
16of Section 16-133. The exercise of the election shall also

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1obligate the last employer to make a one time non-refundable
2contribution to the System. Substitute teachers wishing to
3exercise this election must teach 85 or more days in one school
4term with one employer, who shall be deemed the last employer
5for purposes of this Section. The last day of teaching with
6that employer must be within 6 months of the date of
7application for retirement. All substitute teaching credit
8applied toward the required 85 days must be earned after June
930, 1990.
10 The one time member and employer contributions shall be a
11percentage of the retiring member's highest annual salary rate
12used in the determination of the average salary for retirement
13annuity purposes. However, when determining the one-time
14member and employer contributions, that part of a member's
15salary with the same employer which exceeds the annual salary
16rate for the preceding year by more than 20% shall be excluded.
17The member contribution shall be at the rate of 7% for the
18lesser of the following 2 periods: (1) for each year that the
19member is less than age 60; or (2) for each year that the
20member's creditable service is less than 35 years. If a member
21is at least age 55 and has at least 34 years of creditable
22service, no member or employer contribution for the early
23retirement option shall be required. The employer contribution
24shall be at the rate of 20% for each year the member is under
25age 60.
26 Upon receipt of the application and election, the System

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1shall determine the one time employee and employer
2contributions required. The member contribution shall be
3credited to the individual account of the member and the
4employer contribution shall be credited to the Benefit Trust
5Reserve. The provisions of this subsection (a) providing for
6the avoidance of the reduction in retirement annuity shall not
7be applicable until the member's contribution, if any, has been
8received by the System; however, the date such contributions
9are received shall not be considered in determining the
10effective date of retirement.
11 The number of members working for a single employer who may
12retire under this subsection or subsection (b) in any year may
13be limited at the option of the employer to a specified
14percentage of those eligible, not less than 30%, with the right
15to participate to be allocated among those applying on the
16basis of seniority in the service of the employer.
17 (b) The provisions of subsection (a) of this Section shall
18remain in effect for a member retiring after June 30, 2005 and
19on or before July 1, 2007, provided that the member satisfies
20both of the following requirements:
21 (1) the member notified his or her employer of intent
22 to retire under this Article on or before the effective
23 date of this amendatory Act of the 94th General Assembly
24 under the terms of a contract or collective bargaining
25 agreement entered into, amended, or renewed with the
26 employer on or before the effective date of this amendatory

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1 Act of the 94th General Assembly; and
2 (2) the effective date of the member's retirement is on
3 or before July 1, 2007.
4 The member's employer must give evidence of the member's
5notification by providing to the System:
6 (i) a copy of the member's notification to the employer
7 or the record of that notification;
8 (ii) an affidavit signed by the member and the
9 employer, verifying the notification; and
10 (iii) any additional documentation that the System may
11 require.
12 (c) Except as otherwise provided in subsection (b), and
13subject to the provisions of Section 16-176, a member retiring
14on or after July 1, 2005 and on or before June 30, 2013 (or
15January 1, 2014 in the case of a member who has filed a notice
16of intent to retire with his or her employer on or before June
1730, 2013 and attains age 55 during the period July 1, 2013
18through December 31, 2013), and applying for a retirement
19annuity within 6 months of the last day of teaching for which
20retirement contributions were required, and whose last day of
21teaching is on or before June 30, 2013, may elect at the time
22of application for a retirement annuity, to make a one-time
23member contribution to the System and thereby avoid the
24reduction in the retirement annuity for retirement before age
2560 specified in paragraph (B) of Section 16-133. The exercise
26of the election shall also obligate the last employer to make a

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1one-time nonrefundable contribution to the System. Substitute
2teachers wishing to exercise this election must teach 85 or
3more days in one school term with one employer, who shall be
4deemed the last employer for purposes of this Section. The last
5day of teaching with that employer must be within 6 months of
6the date of application for retirement. All substitute teaching
7credit applied toward the required 85 days must be earned after
8June 30, 1990.
9 The one-time member and employer contributions shall be a
10percentage of the retiring member's highest annual salary rate
11used in the determination of the average salary for retirement
12annuity purposes. However, when determining the one-time
13member and employer contributions, that part of a member's
14salary with the same employer which exceeds the annual salary
15rate for the preceding year by more than 20% shall be excluded.
16The member contribution shall be at the rate of 11.5% for the
17lesser of the following 2 periods: (1) for each year that the
18member is less than age 60; or (2) for each year that the
19member's creditable service is less than 35 years. The employer
20contribution shall be at the rate of 23.5% for each year the
21member is under age 60.
22 Upon receipt of the application and election, the System
23shall determine the one-time employee and employer
24contributions required. The member contribution shall be
25credited to the individual account of the member and the
26employer contribution shall be credited to the Benefit Trust

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1Reserve. The avoidance of the reduction in retirement annuity
2provided under this subsection (c) is not applicable until the
3member's contribution, if any, has been received by the System;
4however, the date that contribution is received shall not be
5considered in determining the effective date of retirement.
6 The number of members working for a single employer who may
7retire under this subsection (c) in any year may be limited at
8the option of the employer to a specified percentage of those
9eligible, not less than 10%, with the right to participate to
10be allocated among those applying on the basis of seniority in
11the service of the employer.
12 For persons not qualifying for the early retirement without
13discount option under this subsection (c), the option is
14extended for 3 years under subsection (d), but subject to the
15changes in eligibility, conditions, and required contributions
16provided in that subsection.
17 (d) A member who is not eligible for the early retirement
18without discount option under subsection (c) may qualify for
19the early retirement without discount option under this
20subsection (d) if the member (1) retires on or after July 1,
212013 and before July 1, 2016, (2) applies for a retirement
22annuity within 6 months of the last day of teaching for which
23retirement contributions were required, and (3) receives a
24certification of eligibility under this subsection from the
25member's last employer. Substitute teachers wishing to
26exercise this election must teach 85 or more days in one school

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1term with one employer, who shall be deemed the last employer
2for purposes of this Section. The last day of teaching with
3that employer must be within 6 months of the date of
4application for retirement. All substitute teaching credit
5applied toward the required 85 days must be earned after June
630, 1990.
7 A qualifying member may elect at the time of application
8for a retirement annuity to make a one-time member contribution
9to the System and thereby avoid the reduction in the retirement
10annuity for retirement before age 60 specified in paragraph (B)
11of Section 16-133. The exercise of this election shall also
12obligate the last employer to make a one-time nonrefundable
13contribution to the System.
14 The one-time member and employer contributions shall be a
15percentage of the retiring member's highest annual salary rate
16used in the determination of the average salary for retirement
17annuity purposes. However, when determining the one-time
18member and employer contributions, that part of a member's
19salary with the same employer which exceeds the annual salary
20rate for the preceding year by more than 20% shall be excluded.
21The member contribution shall be at the rate of 14.4% for the
22lesser of the following 2 periods: (1) for each year that the
23member is less than age 60; or (2) for each year that the
24member's creditable service is less than 35 years. The employer
25contribution shall be at the rate of 29.3% for each year the
26member is under age 60.

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1 Upon receipt of the application, election, and
2certification of eligibility, the System shall determine the
3one-time employee and employer contributions required. The
4member contribution shall be credited to the individual account
5of the member and the employer contribution shall be credited
6to the Benefit Trust Reserve. The avoidance of the reduction in
7retirement annuity provided under this subsection (d) is not
8applicable until the member's contribution has been received by
9the System; however, the date that contribution is received
10shall not be considered in determining the effective date of
11retirement.
12 Eligibility to retire under this subsection (d) shall
13require the approval of the member's last employer under this
14Article, granted in accordance with criteria adopted by that
15employer with the mutual consent of the bargaining agent of a
16majority of the members employed by that employer. If the
17employer grants its approval for a member to retire under this
18subsection (d), the employer shall submit a certification of
19eligibility for the member in a manner prescribed by the
20System.
21 The early retirement without discount option under this
22subsection (d) terminates on July 1, 2016.
23(Source: P.A. 93-469, eff. 8-8-03; 94-4, eff. 6-1-05.)
24 (40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
25 Sec. 16-152. Contributions by members.

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1 (a) Each member shall make contributions for membership
2service to this System as follows:
3 (1) Effective July 1, 1998, contributions of 7.50% of
4 salary towards the cost of the retirement annuity. Such
5 contributions shall be deemed "normal contributions".
6 (2) Effective July 1, 1969, contributions of 1/2 of 1%
7 of salary toward the cost of the automatic annual increase
8 in retirement annuity provided under Section 16-133.1.
9 (3) Effective July 24, 1959, contributions of 1% of
10 salary towards the cost of survivor benefits. Such
11 contributions shall not be credited to the individual
12 account of the member and shall not be subject to refund
13 except as provided under Section 16-143.2.
14 (4) Effective July 1, 2005, contributions of 0.40% of
15 salary toward the cost of the early retirement without
16 discount option provided under Section 16-133.2. This
17 contribution shall cease upon termination of the early
18 retirement without discount option as provided in Section
19 16-133.2 16-176.
20 (b) The minimum required contribution for any year of
21full-time teaching service shall be $192.
22 (c) Contributions shall not be required of any annuitant
23receiving a retirement annuity who is given employment as
24permitted under Section 16-118 or 16-150.1.
25 (d) A person who (i) was a member before July 1, 1998, (ii)
26retires with more than 34 years of creditable service, and

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1(iii) does not elect to qualify for the augmented rate under
2Section 16-129.1 shall be entitled, at the time of retirement,
3to receive a partial refund of contributions made under this
4Section for service occurring after the later of June 30, 1998
5or attainment of 34 years of creditable service, in an amount
6equal to 1.00% of the salary upon which those contributions
7were based.
8 (e) A member's contributions toward the cost of early
9retirement without discount made under item (a)(4) of this
10Section shall not be refunded if the member has elected early
11retirement without discount under Section 16-133.2 and has
12begun to receive a retirement annuity under this Article
13calculated in accordance with that election. Otherwise, a
14member's contributions toward the cost of early retirement
15without discount made under item (a)(4) of this Section shall
16be refunded according to whichever one of the following
17circumstances occurs first:
18 (1) The contributions shall be refunded to the member,
19 without interest, within 120 days after the member's
20 retirement annuity commences, if the member does not elect
21 early retirement without discount under Section 16-133.2.
22 (2) The contributions shall be included, without
23 interest, in any refund claimed by the member under Section
24 16-151.
25 (3) The contributions shall be refunded to the member's
26 designated beneficiary (or if there is no beneficiary, to

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1 the member's estate), without interest, if the member dies
2 without having begun to receive a retirement annuity under
3 this Article.
4 (4) The contributions shall be refunded to the member,
5 without interest, if within 120 days after the early
6 retirement without discount option provided under
7 subsection (d) of Section 16-133.2 is terminated under
8 Section 16-176. The System shall provide to the member,
9 within 120 days after the option is terminated, an
10 application for a refund of those contributions.
11(Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
12 (40 ILCS 5/16-176) (from Ch. 108 1/2, par. 16-176)
13 Sec. 16-176. To adopt actuarial assumptions. For the 5-year
14period ending June 30, 1997 and every 5 years thereafter, the
15actuary, as technical advisor, shall make an actuarial
16investigation into the mortality, service and compensation
17experience of the members, annuitants, and beneficiaries of the
18retirement system. Based upon the result of that investigation,
19the board shall adopt such actuarial assumptions as it deems
20appropriate.
21 Beginning with the 5-year period ending June 30, 2012 and
22every 5 years thereafter through June 30, 2012, the actuarial
23investigation required under this Section shall include the
24System's experience under the early retirement without
25discount option established in Section 16-133.2, including

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1consideration of the sufficiency of the member and employer
2contributions under Section 16-133.2 and the active member
3contribution under Section 16-152 to adequately fund the early
4retirement without discount option. The Board shall promptly
5communicate the results of the actuarial investigation to the
6Commission on Government Forecasting and Accountability. Based
7on the actuarial investigation, the Commission on Government
8Forecasting and Accountability shall, no later than February 1
9of the next year, recommend to the General Assembly any
10proportional adjustment in the amounts of the member and
11employer contributions under Section 16-133.2 that it deems
12necessary.
13 The If the General Assembly fails to adjust the member and
14employer contributions under Section 16-133.2 in response to
15the Commission's recommendations, then the early retirement
16without discount option under subsection (c) of Section
1716-133.2 is extended as provided in subsection (d) of that
18Section. The early retirement without discount option under
19subsection (d) of Section 16-133.2 terminates on July 1, 2016
20terminated and shall cease to be available at the end of the
21fiscal year in which the Commission made its recommendation to
22the General Assembly.
23(Source: P.A. 94-4, eff. 6-1-05.)
24 Section 99. Effective date. This Act takes effect upon
25becoming law.".
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