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

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Rep. Elaine Nekritz

Filed: 5/8/2013

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

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obligate the last employer to make a one time non-refundable
contribution to the System. Substitute teachers wishing to
exercise this election must teach 85 or more days in one school
term with one employer, who shall be deemed the last employer
for purposes of this Section. The last day of teaching with
that employer must be within 6 months of the date of
application for retirement. All substitute teaching credit
applied toward the required 85 days must be earned after June
30, 1990.
The one time member and employer contributions shall be a
percentage of the retiring member's highest annual salary rate
used in the determination of the average salary for retirement
annuity purposes. However, when determining the one-time
member and employer contributions, that part of a member's
salary with the same employer which exceeds the annual salary
rate for the preceding year by more than 20% shall be excluded.
The member contribution shall be at the rate of 7% for the
lesser of the following 2 periods: (1) for each year that the
member is less than age 60; or (2) for each year that the
member's creditable service is less than 35 years. If a member
is at least age 55 and has at least 34 years of creditable
service, no member or employer contribution for the early
retirement option shall be required. The employer contribution
shall be at the rate of 20% for each year the member is under
age 60.
Upon receipt of the application and election, the System

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

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

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

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Reserve. The avoidance of the reduction in retirement annuity
provided under this subsection (c) is not applicable until the
member's contribution, if any, has been received by the System;
however, the date that contribution is received shall not be
considered in determining the effective date of retirement.
The number of members working for a single employer who may
retire under this subsection (c) in any year may be limited at
the option of the employer to a specified percentage of those
eligible, not less than 10%, with the right to participate to
be allocated among those applying on the basis of seniority in
the service of the employer.
For persons not qualifying for the early retirement without
discount option under this subsection (c), the option is
extended for 3 years under subsection (d), but subject to the
changes in eligibility, conditions, and required contributions
provided in that subsection.
(d) A member who is not eligible for the early retirement
without discount option under subsection (c) may qualify for
the early retirement without discount option under this
subsection (d) if the member (1) retires on or after July 1,
2013 and before July 1, 2016, (2) applies for a retirement
annuity within 6 months of the last day of teaching for which
retirement contributions were required, and (3) receives a
certification of eligibility under this subsection from the
member's last employer. Substitute teachers wishing to
exercise this election must teach 85 or more days in one school

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term with one employer, who shall be deemed the last employer
for purposes of this Section. The last day of teaching with
that employer must be within 6 months of the date of
application for retirement. All substitute teaching credit
applied toward the required 85 days must be earned after June
30, 1990.
A qualifying member may elect at the time of application
for a retirement annuity to make a one-time member contribution
to the System and thereby avoid the reduction in the retirement
annuity for retirement before age 60 specified in paragraph (B)
of Section 16-133. The exercise of this election shall also
obligate the last employer to make a one-time nonrefundable
contribution to the System.
The one-time member and employer contributions shall be a
percentage of the retiring member's highest annual salary rate
used in the determination of the average salary for retirement
annuity purposes. However, when determining the one-time
member and employer contributions, that part of a member's
salary with the same employer which exceeds the annual salary
rate for the preceding year by more than 20% shall be excluded.
The member contribution shall be at the rate of 14.4% for the
lesser of the following 2 periods: (1) for each year that the
member is less than age 60; or (2) for each year that the
member's creditable service is less than 35 years. The employer
contribution shall be at the rate of 29.3% for each year the
member is under age 60.

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

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

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

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

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