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| 1 | | AN ACT concerning public employee benefits.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 5. The Illinois Pension Code is amended by changing |
| 5 | | Sections 16-133.2, 16-152, and 16-176 as follows:
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| 6 | | (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
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| 7 | | Sec. 16-133.2. Early retirement without discount. |
| 8 | | (a) A member
retiring after June 1, 1980 and on or before |
| 9 | | June 30, 2005 (or as provided in subsection (b) of this |
| 10 | | Section), and
applying for a retirement annuity within 6 months |
| 11 | | of the last day of
teaching for which retirement contributions |
| 12 | | were required,
may elect at the time of application for a |
| 13 | | retirement annuity, to make
a one time member contribution to |
| 14 | | the System and thereby
avoid the reduction in the retirement |
| 15 | | annuity for retirement before age
60 specified in paragraph (B) |
| 16 | | of Section 16-133. The exercise of the
election shall also |
| 17 | | obligate the last employer to make a one time
non-refundable |
| 18 | | contribution to the System. Substitute teachers wishing to
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| 19 | | exercise this election must teach 85 or more days in one school |
| 20 | | term with
one employer, who shall be deemed the last employer |
| 21 | | for purposes of this
Section. The last day of teaching with |
| 22 | | that employer must be within 6
months of the date of |
| 23 | | application for retirement. All substitute
teaching credit |
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| 1 | | applied toward the required 85 days must be earned after
June |
| 2 | | 30, 1990.
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| 3 | | The one time member and employer contributions shall be a |
| 4 | | percentage of
the retiring member's highest annual salary rate |
| 5 | | used in the determination
of the average salary for retirement |
| 6 | | annuity purposes. However, when
determining the one-time |
| 7 | | member and employer contributions, that part of a
member's |
| 8 | | salary with the same employer which exceeds the annual salary |
| 9 | | rate
for the preceding year by more than 20% shall be excluded. |
| 10 | | The member
contribution shall be at the rate of 7% for the |
| 11 | | lesser of the following 2
periods: (1) for each year that the |
| 12 | | member is less than age 60; or (2) for
each year that the |
| 13 | | member's creditable service is less than 35 years. If a
member |
| 14 | | is at least age 55 and has at least 34 years of creditable |
| 15 | | service, no
member or employer contribution for the early |
| 16 | | retirement option shall be
required. The employer contribution |
| 17 | | shall be at the rate of 20% for each year
the member is under |
| 18 | | age 60.
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| 19 | | Upon receipt of the application and election, the System |
| 20 | | shall determine
the one time employee and employer |
| 21 | | contributions required. The member
contribution shall be |
| 22 | | credited to the individual account of the member and
the |
| 23 | | employer contribution shall be credited to the Benefit Trust |
| 24 | | Reserve. The
provisions of this subsection (a) providing for |
| 25 | | the avoidance of the reduction in retirement annuity shall
not |
| 26 | | be applicable until the member's contribution, if any, has been |
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| 1 | | received
by the System; however, the date such contributions |
| 2 | | are received shall not be
considered in determining the |
| 3 | | effective date of retirement.
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| 4 | | The number of members working for a single employer who may
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| 5 | | retire under this subsection or subsection (b) in any year may |
| 6 | | be limited at the option
of the employer to a specified |
| 7 | | percentage of those eligible, not less
than 30%, with the right |
| 8 | | to participate to be allocated among those
applying on the |
| 9 | | basis of seniority in the service of the employer.
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| 10 | | (b) The provisions of subsection (a) of this Section shall |
| 11 | | remain in effect for a member retiring after June 30, 2005 and |
| 12 | | on or before July 1, 2007, provided that the member satisfies |
| 13 | | both of the following requirements: |
| 14 | | (1) the member notified his or her employer of intent |
| 15 | | to retire under this Article on or before the effective |
| 16 | | date of this amendatory Act of the 94th General Assembly |
| 17 | | under the terms of a contract or collective bargaining |
| 18 | | agreement entered into, amended, or renewed with the |
| 19 | | employer on or before the effective date of this amendatory |
| 20 | | Act of the 94th General Assembly; and
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| 21 | | (2) the effective date of the member's retirement is on |
| 22 | | or before July 1, 2007. |
| 23 | | The member's employer must give evidence of the member's |
| 24 | | notification by providing to the System:
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| 25 | | (i) a copy of the member's notification to the employer |
| 26 | | or the record of that notification;
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| 1 | | (ii) an affidavit signed by the member and the |
| 2 | | employer, verifying the notification; and
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| 3 | | (iii) any additional documentation that the System may |
| 4 | | require.
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| 5 | | (c) Except as otherwise provided in subsection (b), and |
| 6 | | subject to the provisions of Section 16-176, a member retiring |
| 7 | | on or after July 1, 2005 and on or before June 30, 2013 (or |
| 8 | | January 1, 2014 in the case of a member who has filed a notice |
| 9 | | of intent to retire with his or her employer on or before June |
| 10 | | 30, 2013 and attains age 55 during the period July 1, 2013 |
| 11 | | through December 31, 2013), and applying for a retirement |
| 12 | | annuity within 6 months of the last day of teaching for which |
| 13 | | retirement contributions were required, and whose last day of |
| 14 | | teaching is on or before June 30, 2013, may elect at the time |
| 15 | | of application for a retirement annuity, to make a one-time |
| 16 | | member contribution to the System and thereby avoid the |
| 17 | | reduction in the retirement annuity for retirement before age |
| 18 | | 60 specified in paragraph (B) of Section 16-133. The exercise |
| 19 | | of the election shall also obligate the last employer to make a |
| 20 | | one-time nonrefundable contribution to the System. Substitute |
| 21 | | teachers wishing to exercise this election must teach 85 or |
| 22 | | more days in one school term with one employer, who shall be |
| 23 | | deemed the last employer for purposes of this Section. The last |
| 24 | | day of teaching with that employer must be within 6 months of |
| 25 | | the date of application for retirement. All substitute teaching |
| 26 | | credit applied toward the required 85 days must be earned after |
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| 1 | | June 30, 1990. |
| 2 | | The one-time member and employer contributions shall be a |
| 3 | | percentage of the retiring member's highest annual salary rate |
| 4 | | used in the determination of the average salary for retirement |
| 5 | | annuity purposes. However, when determining the one-time |
| 6 | | member and employer contributions, that part of a member's |
| 7 | | salary with the same employer which exceeds the annual salary |
| 8 | | rate for the preceding year by more than 20% shall be excluded. |
| 9 | | The member contribution shall be at the rate of 11.5% for the |
| 10 | | lesser of the following 2 periods: (1) for each year that the |
| 11 | | member is less than age 60; or (2) for each year that the |
| 12 | | member's creditable service is less than 35 years. The employer |
| 13 | | contribution shall be at the rate of 23.5% for each year the |
| 14 | | member is under age 60. |
| 15 | | Upon receipt of the application and election, the System |
| 16 | | shall determine the one-time employee and employer |
| 17 | | contributions required. The member contribution shall be |
| 18 | | credited to the individual account of the member and the |
| 19 | | employer contribution shall be credited to the Benefit Trust |
| 20 | | Reserve. The avoidance of the reduction in retirement annuity |
| 21 | | provided under this subsection (c) is not applicable until the |
| 22 | | member's contribution, if any, has been received by the System; |
| 23 | | however, the date that contribution is received shall not be |
| 24 | | considered in determining the effective date of retirement.
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| 25 | | The number of members working for a single employer who may |
| 26 | | retire under this subsection (c) in any year may be limited at |
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| 1 | | the option of the employer to a specified percentage of those |
| 2 | | eligible, not less than 10%, with the right to participate to |
| 3 | | be allocated among those applying on the basis of seniority in |
| 4 | | the service of the employer. |
| 5 | | For persons not qualifying for the early retirement without |
| 6 | | discount option under this subsection (c), the option is |
| 7 | | extended for 3 years under subsection (d), but subject to the |
| 8 | | changes in eligibility, conditions, and required contributions |
| 9 | | provided in that subsection. |
| 10 | | (d) A member who is not eligible for the early retirement |
| 11 | | without discount option under subsection (c) may qualify for |
| 12 | | the early retirement without discount option under this |
| 13 | | subsection (d) if the member (1) retires on or after July 1, |
| 14 | | 2013 and before July 1, 2016, (2) applies for a retirement |
| 15 | | annuity within 6 months of the last day of teaching for which |
| 16 | | retirement contributions were required, and (3) receives a |
| 17 | | certification of eligibility under this subsection from the |
| 18 | | member's last employer. Substitute teachers wishing to |
| 19 | | exercise this election must teach 85 or more days in one school |
| 20 | | term with one employer, who shall be deemed the last employer |
| 21 | | for purposes of this Section. The last day of teaching with |
| 22 | | that employer must be within 6 months of the date of |
| 23 | | application for retirement. All substitute teaching credit |
| 24 | | applied toward the required 85 days must be earned after June |
| 25 | | 30, 1990. |
| 26 | | A qualifying member may elect at the time of application |
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| 1 | | for a retirement annuity to make a one-time member contribution |
| 2 | | to the System and thereby avoid the reduction in the retirement |
| 3 | | annuity for retirement before age 60 specified in paragraph (B) |
| 4 | | of Section 16-133. The exercise of this election shall also |
| 5 | | obligate the last employer to make a one-time nonrefundable |
| 6 | | contribution to the System. |
| 7 | | The one-time member and employer contributions shall be a |
| 8 | | percentage of the retiring member's highest annual salary rate |
| 9 | | used in the determination of the average salary for retirement |
| 10 | | annuity purposes. However, when determining the one-time |
| 11 | | member and employer contributions, that part of a member's |
| 12 | | salary with the same employer which exceeds the annual salary |
| 13 | | rate for the preceding year by more than 20% shall be excluded. |
| 14 | | The member contribution shall be at the rate of 14.4% for the |
| 15 | | lesser of the following 2 periods: (1) for each year that the |
| 16 | | member is less than age 60; or (2) for each year that the |
| 17 | | member's creditable service is less than 35 years. The employer |
| 18 | | contribution shall be at the rate of 29.3% for each year the |
| 19 | | member is under age 60. |
| 20 | | Upon receipt of the application, election, and |
| 21 | | certification of eligibility, the System shall determine the |
| 22 | | one-time employee and employer contributions required. The |
| 23 | | member contribution shall be credited to the individual account |
| 24 | | of the member and the employer contribution shall be credited |
| 25 | | to the Benefit Trust Reserve. The avoidance of the reduction in |
| 26 | | retirement annuity provided under this subsection (d) is not |
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| 1 | | applicable until the member's contribution has been received by |
| 2 | | the System; however, the date that contribution is received |
| 3 | | shall not be considered in determining the effective date of |
| 4 | | retirement. |
| 5 | | Eligibility to retire under this subsection (d) shall |
| 6 | | require the approval of the member's last employer under this |
| 7 | | Article, granted in accordance with criteria adopted by that |
| 8 | | employer with the mutual consent of the bargaining agent of a |
| 9 | | majority of the members employed by that employer. If the |
| 10 | | employer grants its approval for a member to retire under this |
| 11 | | subsection (d), the employer shall submit a certification of |
| 12 | | eligibility for the member in a manner prescribed by the |
| 13 | | System. |
| 14 | | The early retirement without discount option under this |
| 15 | | subsection (d) terminates on July 1, 2016. |
| 16 | | (Source: P.A. 93-469, eff. 8-8-03; 94-4, eff. 6-1-05.)
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| 17 | | (40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
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| 18 | | Sec. 16-152. Contributions by members.
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| 19 | | (a) Each member shall make contributions for membership |
| 20 | | service to this
System as follows:
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| 21 | | (1) Effective July 1, 1998, contributions of 7.50% of |
| 22 | | salary towards the
cost of the retirement annuity. Such |
| 23 | | contributions shall be deemed "normal
contributions".
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| 24 | | (2) Effective July 1, 1969, contributions of 1/2 of 1% |
| 25 | | of salary toward
the cost of the automatic annual increase |
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| 1 | | in retirement annuity provided
under Section 16-133.1.
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| 2 | | (3) Effective July 24, 1959, contributions of 1% of |
| 3 | | salary towards the
cost of survivor benefits. Such |
| 4 | | contributions shall not be credited to
the individual |
| 5 | | account of the member and shall not be subject to refund
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| 6 | | except as provided under Section 16-143.2.
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| 7 | | (4) Effective July 1, 2005, contributions of 0.40% of |
| 8 | | salary toward the cost of the early retirement without |
| 9 | | discount option provided under Section 16-133.2. This |
| 10 | | contribution shall cease upon termination of the early |
| 11 | | retirement without discount option as provided in Section |
| 12 | | 16-133.2 16-176.
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| 13 | | (b) The minimum required contribution for any year of |
| 14 | | full-time
teaching service shall be $192.
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| 15 | | (c) Contributions shall not be required of any annuitant |
| 16 | | receiving
a retirement annuity who is given employment as |
| 17 | | permitted under Section 16-118 or 16-150.1.
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| 18 | | (d) A person who (i) was a member before July 1, 1998, (ii) |
| 19 | | retires with
more than 34 years of creditable service, and |
| 20 | | (iii) does not elect to qualify
for the augmented rate under |
| 21 | | Section 16-129.1 shall be entitled, at the time
of retirement, |
| 22 | | to receive a partial refund of contributions made under this
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| 23 | | Section for service occurring after the later of June 30, 1998 |
| 24 | | or attainment
of 34 years of creditable service, in an amount |
| 25 | | equal to 1.00% of the salary
upon which those contributions |
| 26 | | were based.
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| 1 | | (e) A member's contributions toward the cost of early |
| 2 | | retirement without discount made under item (a)(4) of this |
| 3 | | Section shall not be refunded if the member has elected early |
| 4 | | retirement without discount under Section 16-133.2 and has |
| 5 | | begun to receive a retirement annuity under this Article |
| 6 | | calculated in accordance with that election. Otherwise, a |
| 7 | | member's contributions toward the cost of early retirement |
| 8 | | without discount made under item (a)(4) of this Section shall |
| 9 | | be refunded according to whichever one of the following |
| 10 | | circumstances occurs first: |
| 11 | | (1) The contributions shall be refunded to the member, |
| 12 | | without interest, within 120 days after the member's |
| 13 | | retirement annuity commences, if the member does not elect |
| 14 | | early retirement without discount under Section 16-133.2. |
| 15 | | (2) The contributions shall be included, without |
| 16 | | interest, in any refund claimed by the member under Section |
| 17 | | 16-151. |
| 18 | | (3) The contributions shall be refunded to the member's |
| 19 | | designated beneficiary (or if there is no beneficiary, to |
| 20 | | the member's estate), without interest, if the member dies |
| 21 | | without having begun to receive a retirement annuity under |
| 22 | | this Article. |
| 23 | | (4) The contributions shall be refunded to the member, |
| 24 | | without interest, if within 120 days after the early |
| 25 | | retirement without discount option provided under |
| 26 | | subsection (d) of Section 16-133.2 is terminated under |
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| 1 | | Section 16-176.
The System shall provide to the member, |
| 2 | | within 120 days after the option is terminated, an |
| 3 | | application for a refund of those contributions. |
| 4 | | (Source: P.A. 93-320, eff. 7-23-03; 94-4, eff. 6-1-05.)
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| 5 | | (40 ILCS 5/16-176) (from Ch. 108 1/2, par. 16-176)
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| 6 | | Sec. 16-176. To adopt actuarial assumptions. For the 5-year |
| 7 | | period ending
June 30, 1997 and every 5 years thereafter, the |
| 8 | | actuary, as technical advisor,
shall make an actuarial
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| 9 | | investigation into the mortality, service and compensation |
| 10 | | experience of the
members, annuitants, and beneficiaries of the |
| 11 | | retirement system. Based upon
the result of that investigation, |
| 12 | | the board shall adopt such
actuarial assumptions as it deems |
| 13 | | appropriate.
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| 14 | | Beginning with the 5-year period ending June 30, 2012 and |
| 15 | | every 5 years thereafter through June 30, 2012, the actuarial |
| 16 | | investigation required under this Section shall include the |
| 17 | | System's experience under the early retirement without |
| 18 | | discount option established in Section 16-133.2, including |
| 19 | | consideration of the sufficiency of the member and employer |
| 20 | | contributions under Section 16-133.2 and the active member |
| 21 | | contribution under Section 16-152 to adequately fund the early |
| 22 | | retirement without discount option. The Board shall promptly |
| 23 | | communicate the results of the actuarial investigation to the |
| 24 | | Commission on Government Forecasting and Accountability. Based |
| 25 | | on the actuarial investigation, the Commission on Government |
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| 1 | | Forecasting and Accountability shall, no later than February 1 |
| 2 | | of the next year, recommend to the General Assembly any |
| 3 | | proportional adjustment in the amounts of the member and |
| 4 | | employer contributions under Section 16-133.2 that it deems |
| 5 | | necessary. |
| 6 | | The If the General Assembly fails to adjust the member and |
| 7 | | employer contributions under Section 16-133.2 in response to |
| 8 | | the Commission's recommendations, then the early retirement |
| 9 | | without discount option under subsection (c) of Section |
| 10 | | 16-133.2 is extended as provided in subsection (d) of that |
| 11 | | Section. The early retirement without discount option under |
| 12 | | subsection (d) of Section 16-133.2 terminates on July 1, 2016 |
| 13 | | terminated and shall cease to be available at the end of the |
| 14 | | fiscal year in which the Commission made its recommendation to |
| 15 | | the General Assembly. |
| 16 | | (Source: P.A. 94-4, eff. 6-1-05.)
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| 17 | | Section 99. Effective date. This Act takes effect upon |
| 18 | | becoming law.
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