Bill Text: IL SB2193 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the General Assembly Article of the Illinois Pension Code. Restricts participation in the General Assembly Retirement System to persons who became participants before the effective date of the amendatory Act. Beginning in fiscal year 2018, makes funding changes. Requires the Board to recalculate and recertify the amount of the State's required contribution for fiscal year 2018. Establishes a voluntary defined contribution plan for certain Tier 1 members and makes conforming changes in the Retirement Systems Reciprocal Act (Article 20 of the Code). Repeals provisions concerning a defined contribution plan added by Public Act 98-599, which has been held unconstitutional. Effective immediately.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced) 2017-05-19 - Rule 3-9(a) / Re-referred to Assignments [SB2193 Detail]

Download: Illinois-2017-SB2193-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2193

Introduced 4/27/2017, by Sen. Christine Radogno

SYNOPSIS AS INTRODUCED:
See Index

Amends the General Assembly Article of the Illinois Pension Code. Restricts participation in the General Assembly Retirement System to persons who became participants before the effective date of the amendatory Act. Beginning in fiscal year 2018, makes funding changes. Requires the Board to recalculate and recertify the amount of the State's required contribution for fiscal year 2018. Establishes a voluntary defined contribution plan for certain Tier 1 members and makes conforming changes in the Retirement Systems Reciprocal Act (Article 20 of the Code). Repeals provisions concerning a defined contribution plan added by Public Act 98-599, which has been held unconstitutional. Effective immediately.
LRB100 12287 RPS 24840 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

SB2193LRB100 12287 RPS 24840 b
1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Pension Code is amended by changing
5Sections 2-101, 2-105, 2-107, 2-124, 2-134, and 2-162, 20-121,
620-123, 20-124, and 20-125 and by adding Sections 2-105.3,
72-165.1, and 2-166.1 as follows:
8 (40 ILCS 5/2-101) (from Ch. 108 1/2, par. 2-101)
9 Sec. 2-101. Creation of system. A retirement system is
10created to provide retirement annuities, survivor's annuities
11and other benefits for certain members of the General Assembly,
12certain elected state officials, and their beneficiaries.
13 The system shall be known as the "General Assembly
14Retirement System". All its funds and property shall be a trust
15separate from all other entities, maintained for the purpose of
16securing payment of annuities and benefits under this Article.
17 Participation in the retirement system created under this
18Article is restricted to persons who became participants before
19the effective date of this amendatory Act of the 100th General
20Assembly. Beginning on that date, the System shall not accept
21any new participants.
22(Source: P.A. 83-1440.)

SB2193- 2 -LRB100 12287 RPS 24840 b
1 (40 ILCS 5/2-105) (from Ch. 108 1/2, par. 2-105)
2 Sec. 2-105. Member. "Member": Members of the General
3Assembly of this State, including persons who enter military
4service while a member of the General Assembly, and any person
5serving as Governor, Lieutenant Governor, Secretary of State,
6Treasurer, Comptroller, or Attorney General for the period of
7service in such office.
8 Any person who has served for 10 or more years as Clerk or
9Assistant Clerk of the House of Representatives, Secretary or
10Assistant Secretary of the Senate, or any combination thereof,
11may elect to become a member of this system while thenceforth
12engaged in such service by filing a written election with the
13board. Any person so electing shall be deemed an active member
14of the General Assembly for the purpose of validating and
15transferring any service credits earned under any of the funds
16and systems established under Articles 3 through 18 of this
17Code.
18 However, notwithstanding any other provision of this
19Article, a person shall not be deemed a member for the purposes
20of this Article unless he or she became a participant of the
21System before the effective date of this amendatory Act of the
22100th General Assembly.
23(Source: P.A. 85-1008.)
24 (40 ILCS 5/2-105.3 new)
25 Sec. 2-105.3. Tier 1 employee. "Tier 1 employee": A

SB2193- 3 -LRB100 12287 RPS 24840 b
1participant who first became a participant before January 1,
22011.
3 (40 ILCS 5/2-107) (from Ch. 108 1/2, par. 2-107)
4 Sec. 2-107. Participant. "Participant": Any member who
5elects to participate; and any former member who elects to
6continue participation under Section 2-117.1, for the duration
7of such continued participation. However, notwithstanding any
8other provision of this Article, a person shall not be deemed a
9participant for the purposes of this Article unless he or she
10became a participant of the System before the effective date of
11this amendatory Act of the 100th General Assembly.
12(Source: P.A. 86-1488.)
13 (40 ILCS 5/2-124) (from Ch. 108 1/2, par. 2-124)
14 (Text of Section WITHOUT the changes made by P.A. 98-599,
15which has been held unconstitutional)
16 Sec. 2-124. Contributions by State.
17 (a) The State shall make contributions to the System by
18appropriations of amounts which, together with the
19contributions of participants, interest earned on investments,
20and other income will meet the cost of maintaining and
21administering the System on a 90% funded basis in accordance
22with actuarial recommendations.
23 (b) The Board shall determine the amount of State
24contributions required for each fiscal year on the basis of the

SB2193- 4 -LRB100 12287 RPS 24840 b
1actuarial tables and other assumptions adopted by the Board and
2the prescribed rate of interest, using the formula in
3subsection (c).
4 (c) For State fiscal years 2018 through 2045, the minimum
5contribution to the System to be made by the State for each
6fiscal year shall be an amount determined by the System to be
7sufficient to bring the total assets of the System up to 90% of
8the total actuarial liabilities of the System by the end of
9State fiscal year 2045. In making these determinations, the
10required State contribution shall be calculated each year as a
11level percentage of total payroll, including payroll that is
12not deemed pensionable, but excluding payroll attributable to
13participants in the defined contribution plan under Section
142-165.1, over the years remaining to and including fiscal year
152045 and shall be determined under the projected unit credit
16actuarial cost method.
17 Beginning in State fiscal year 2018, any increase or
18decrease in State contribution over the prior fiscal year due
19exclusively to changes in actuarial or investment assumptions
20adopted by the Board shall be included in the State
21contribution to the System, as a percentage of the applicable
22employee payroll, and shall be increased in equal annual
23increments so that by the State fiscal year occurring 5 years
24after the adoption of the actuarial or investment assumptions,
25the State is contributing at the rate otherwise required under
26this Section.

SB2193- 5 -LRB100 12287 RPS 24840 b
1 For State fiscal years 2012 through 2017 2045, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of payroll over the years remaining to and
9including fiscal year 2045 and shall be determined under the
10projected unit credit actuarial cost method.
11 For State fiscal years 1996 through 2005, the State
12contribution to the System, as a percentage of the applicable
13employee payroll, shall be increased in equal annual increments
14so that by State fiscal year 2011, the State is contributing at
15the rate required under this Section.
16 Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2006 is
18$4,157,000.
19 Notwithstanding any other provision of this Article, the
20total required State contribution for State fiscal year 2007 is
21$5,220,300.
22 For each of State fiscal years 2008 through 2009, the State
23contribution to the System, as a percentage of the applicable
24employee payroll, shall be increased in equal annual increments
25from the required State contribution for State fiscal year
262007, so that by State fiscal year 2011, the State is

SB2193- 6 -LRB100 12287 RPS 24840 b
1contributing at the rate otherwise required under this Section.
2 Notwithstanding any other provision of this Article, the
3total required State contribution for State fiscal year 2010 is
4$10,454,000 and shall be made from the proceeds of bonds sold
5in fiscal year 2010 pursuant to Section 7.2 of the General
6Obligation Bond Act, less (i) the pro rata share of bond sale
7expenses determined by the System's share of total bond
8proceeds, (ii) any amounts received from the General Revenue
9Fund in fiscal year 2010, and (iii) any reduction in bond
10proceeds due to the issuance of discounted bonds, if
11applicable.
12 Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2011 is
14the amount recertified by the System on or before April 1, 2011
15pursuant to Section 2-134 and shall be made from the proceeds
16of bonds sold in fiscal year 2011 pursuant to Section 7.2 of
17the General Obligation Bond Act, less (i) the pro rata share of
18bond sale expenses determined by the System's share of total
19bond proceeds, (ii) any amounts received from the General
20Revenue Fund in fiscal year 2011, and (iii) any reduction in
21bond proceeds due to the issuance of discounted bonds, if
22applicable.
23 Beginning in State fiscal year 2046, the minimum State
24contribution for each fiscal year shall be the amount needed to
25maintain the total assets of the System at 90% of the total
26actuarial liabilities of the System.

SB2193- 7 -LRB100 12287 RPS 24840 b
1 Amounts received by the System pursuant to Section 25 of
2the Budget Stabilization Act or Section 8.12 of the State
3Finance Act in any fiscal year do not reduce and do not
4constitute payment of any portion of the minimum State
5contribution required under this Article in that fiscal year.
6Such amounts shall not reduce, and shall not be included in the
7calculation of, the required State contributions under this
8Article in any future year until the System has reached a
9funding ratio of at least 90%. A reference in this Article to
10the "required State contribution" or any substantially similar
11term does not include or apply to any amounts payable to the
12System under Section 25 of the Budget Stabilization Act.
13 Notwithstanding any other provision of this Section, the
14required State contribution for State fiscal year 2005 and for
15fiscal year 2008 and each fiscal year thereafter, as calculated
16under this Section and certified under Section 2-134, shall not
17exceed an amount equal to (i) the amount of the required State
18contribution that would have been calculated under this Section
19for that fiscal year if the System had not received any
20payments under subsection (d) of Section 7.2 of the General
21Obligation Bond Act, minus (ii) the portion of the State's
22total debt service payments for that fiscal year on the bonds
23issued in fiscal year 2003 for the purposes of that Section
247.2, as determined and certified by the Comptroller, that is
25the same as the System's portion of the total moneys
26distributed under subsection (d) of Section 7.2 of the General

SB2193- 8 -LRB100 12287 RPS 24840 b
1Obligation Bond Act. In determining this maximum for State
2fiscal years 2008 through 2010, however, the amount referred to
3in item (i) shall be increased, as a percentage of the
4applicable employee payroll, in equal increments calculated
5from the sum of the required State contribution for State
6fiscal year 2007 plus the applicable portion of the State's
7total debt service payments for fiscal year 2007 on the bonds
8issued in fiscal year 2003 for the purposes of Section 7.2 of
9the General Obligation Bond Act, so that, by State fiscal year
102011, the State is contributing at the rate otherwise required
11under this Section.
12 (d) For purposes of determining the required State
13contribution to the System, the value of the System's assets
14shall be equal to the actuarial value of the System's assets,
15which shall be calculated as follows:
16 As of June 30, 2008, the actuarial value of the System's
17assets shall be equal to the market value of the assets as of
18that date. In determining the actuarial value of the System's
19assets for fiscal years after June 30, 2008, any actuarial
20gains or losses from investment return incurred in a fiscal
21year shall be recognized in equal annual amounts over the
225-year period following that fiscal year.
23 (e) For purposes of determining the required State
24contribution to the system for a particular year, the actuarial
25value of assets shall be assumed to earn a rate of return equal
26to the system's actuarially assumed rate of return.

SB2193- 9 -LRB100 12287 RPS 24840 b
1(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
296-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-813, eff.
37-13-12.)
4 (40 ILCS 5/2-134) (from Ch. 108 1/2, par. 2-134)
5 (Text of Section WITHOUT the changes made by P.A. 98-599,
6which has been held unconstitutional)
7 Sec. 2-134. To certify required State contributions and
8submit vouchers.
9 (a) The Board shall certify to the Governor on or before
10December 15 of each year until December 15, 2011 the amount of
11the required State contribution to the System for the next
12fiscal year and shall specifically identify the System's
13projected State normal cost for that fiscal year. The
14certification shall include a copy of the actuarial
15recommendations upon which it is based and shall specifically
16identify the System's projected State normal cost for that
17fiscal year.
18 On or before November 1 of each year, beginning November 1,
192012, the Board shall submit to the State Actuary, the
20Governor, and the General Assembly a proposed certification of
21the amount of the required State contribution to the System for
22the next fiscal year, along with all of the actuarial
23assumptions, calculations, and data upon which that proposed
24certification is based. On or before January 1 of each year
25beginning January 1, 2013, the State Actuary shall issue a

SB2193- 10 -LRB100 12287 RPS 24840 b
1preliminary report concerning the proposed certification and
2identifying, if necessary, recommended changes in actuarial
3assumptions that the Board must consider before finalizing its
4certification of the required State contributions. On or before
5January 15, 2013 and every January 15 thereafter, the Board
6shall certify to the Governor and the General Assembly the
7amount of the required State contribution for the next fiscal
8year. The Board's certification must note any deviations from
9the State Actuary's recommended changes, the reason or reasons
10for not following the State Actuary's recommended changes, and
11the fiscal impact of not following the State Actuary's
12recommended changes on the required State contribution.
13 On or before May 1, 2004, the Board shall recalculate and
14recertify to the Governor the amount of the required State
15contribution to the System for State fiscal year 2005, taking
16into account the amounts appropriated to and received by the
17System under subsection (d) of Section 7.2 of the General
18Obligation Bond Act.
19 On or before July 1, 2005, the Board shall recalculate and
20recertify to the Governor the amount of the required State
21contribution to the System for State fiscal year 2006, taking
22into account the changes in required State contributions made
23by this amendatory Act of the 94th General Assembly.
24 On or before April 1, 2011, the Board shall recalculate and
25recertify to the Governor the amount of the required State
26contribution to the System for State fiscal year 2011, applying

SB2193- 11 -LRB100 12287 RPS 24840 b
1the changes made by Public Act 96-889 to the System's assets
2and liabilities as of June 30, 2009 as though Public Act 96-889
3was approved on that date.
4 As soon as practical after the effective date of this
5amendatory Act of the 100th General Assembly, the Board shall
6recalculate and recertify to the State Actuary, the Governor,
7and the General Assembly the amount of the State contribution
8to the System for State fiscal year 2018, taking into account
9the changes in required State contributions made by this
10amendatory Act of the 100th General Assembly. The State Actuary
11shall review the assumptions and valuations underlying the
12Board's revised certification and issue a preliminary report
13concerning the proposed recertification and identifying, if
14necessary, recommended changes in actuarial assumptions that
15the Board must consider before finalizing its certification of
16the required State contributions. The Board's final
17certification must note any deviations from the State Actuary's
18recommended changes, the reason or reasons for not following
19the State Actuary's recommended changes, and the fiscal impact
20of not following the State Actuary's recommended changes on the
21required State contribution.
22 (b) Beginning in State fiscal year 1996, on or as soon as
23possible after the 15th day of each month the Board shall
24submit vouchers for payment of State contributions to the
25System, in a total monthly amount of one-twelfth of the
26required annual State contribution certified under subsection

SB2193- 12 -LRB100 12287 RPS 24840 b
1(a). From the effective date of this amendatory Act of the 93rd
2General Assembly through June 30, 2004, the Board shall not
3submit vouchers for the remainder of fiscal year 2004 in excess
4of the fiscal year 2004 certified contribution amount
5determined under this Section after taking into consideration
6the transfer to the System under subsection (d) of Section
76z-61 of the State Finance Act. These vouchers shall be paid by
8the State Comptroller and Treasurer by warrants drawn on the
9funds appropriated to the System for that fiscal year. If in
10any month the amount remaining unexpended from all other
11appropriations to the System for the applicable fiscal year
12(including the appropriations to the System under Section 8.12
13of the State Finance Act and Section 1 of the State Pension
14Funds Continuing Appropriation Act) is less than the amount
15lawfully vouchered under this Section, the difference shall be
16paid from the General Revenue Fund under the continuing
17appropriation authority provided in Section 1.1 of the State
18Pension Funds Continuing Appropriation Act.
19 (c) The full amount of any annual appropriation for the
20System for State fiscal year 1995 shall be transferred and made
21available to the System at the beginning of that fiscal year at
22the request of the Board. Any excess funds remaining at the end
23of any fiscal year from appropriations shall be retained by the
24System as a general reserve to meet the System's accrued
25liabilities.
26(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;

SB2193- 13 -LRB100 12287 RPS 24840 b
197-694, eff. 6-18-12.)
2 (40 ILCS 5/2-162)
3 (Text of Section WITHOUT the changes made by P.A. 98-599,
4which has been held unconstitutional)
5 Sec. 2-162. Application and expiration of new benefit
6increases.
7 (a) As used in this Section, "new benefit increase" means
8an increase in the amount of any benefit provided under this
9Article, or an expansion of the conditions of eligibility for
10any benefit under this Article, that results from an amendment
11to this Code that takes effect after the effective date of this
12amendatory Act of the 94th General Assembly. "New benefit
13increase", however, does not include any benefit increase
14resulting from the changes made to this Article by this
15amendatory Act of the 100th General Assembly.
16 (b) Notwithstanding any other provision of this Code or any
17subsequent amendment to this Code, every new benefit increase
18is subject to this Section and shall be deemed to be granted
19only in conformance with and contingent upon compliance with
20the provisions of this Section.
21 (c) The Public Act enacting a new benefit increase must
22identify and provide for payment to the System of additional
23funding at least sufficient to fund the resulting annual
24increase in cost to the System as it accrues.
25 Every new benefit increase is contingent upon the General

SB2193- 14 -LRB100 12287 RPS 24840 b
1Assembly providing the additional funding required under this
2subsection. The Commission on Government Forecasting and
3Accountability shall analyze whether adequate additional
4funding has been provided for the new benefit increase and
5shall report its analysis to the Public Pension Division of the
6Department of Insurance Financial and Professional Regulation.
7A new benefit increase created by a Public Act that does not
8include the additional funding required under this subsection
9is null and void. If the Public Pension Division determines
10that the additional funding provided for a new benefit increase
11under this subsection is or has become inadequate, it may so
12certify to the Governor and the State Comptroller and, in the
13absence of corrective action by the General Assembly, the new
14benefit increase shall expire at the end of the fiscal year in
15which the certification is made.
16 (d) Every new benefit increase shall expire 5 years after
17its effective date or on such earlier date as may be specified
18in the language enacting the new benefit increase or provided
19under subsection (c). This does not prevent the General
20Assembly from extending or re-creating a new benefit increase
21by law.
22 (e) Except as otherwise provided in the language creating
23the new benefit increase, a new benefit increase that expires
24under this Section continues to apply to persons who applied
25and qualified for the affected benefit while the new benefit
26increase was in effect and to the affected beneficiaries and

SB2193- 15 -LRB100 12287 RPS 24840 b
1alternate payees of such persons, but does not apply to any
2other person, including without limitation a person who
3continues in service after the expiration date and did not
4apply and qualify for the affected benefit while the new
5benefit increase was in effect.
6(Source: P.A. 94-4, eff. 6-1-05.)
7 (40 ILCS 5/2-165.1 new)
8 Sec. 2-165.1. Defined contribution plan.
9 (a) By July 1, 2018, the System shall prepare and implement
10a voluntary defined contribution plan for up to 5% of eligible
11active Tier 1 employees. The System shall determine the 5% cap
12by the number of active Tier 1 employees on the effective date
13of this Section. The defined contribution plan developed under
14this Section shall be a plan that aggregates employer and
15employee contributions in individual participant accounts
16which, after meeting any other requirements, are used for
17payouts after retirement in accordance with this Section and
18any other applicable laws.
19 As used in this Section, "defined benefit plan" means the
20retirement plan available under this Article to Tier 1
21employees who have not made the election authorized under this
22Section.
23 (1) Under the defined contribution plan, an active Tier
24 1 employee of this System could elect to cease accruing
25 benefits in the defined benefit plan under this Article and

SB2193- 16 -LRB100 12287 RPS 24840 b
1 begin accruing benefits for future service in the defined
2 contribution plan. Service credit under the defined
3 contribution plan may be used for determining retirement
4 eligibility under the defined benefit plan.
5 (2) Participants in the defined contribution plan
6 shall pay employee contributions at the same rate as Tier 1
7 employees in this System who do not participate in the
8 defined contribution plan.
9 (3) State contributions shall be paid into the accounts
10 of all participants in the defined contribution plan at a
11 uniform rate, expressed as a percentage of salary and
12 determined for each year. This rate shall be no higher than
13 the employer's normal cost for Tier 1 employees in the
14 defined benefit plan for that year, as determined by the
15 System and expressed as a percentage of salary, and shall
16 be no lower than 3% of salary. The State shall adjust this
17 rate annually.
18 (4) The defined contribution plan shall require 5 years
19 of participation in the defined contribution plan before
20 vesting in State contributions. If the participant fails to
21 vest in them, the State contributions, and the earnings
22 thereon, shall be forfeited.
23 (5) The defined contribution plan may provide for
24 participants in the plan to be eligible for defined
25 disability benefits. If it does, the System shall reduce
26 the employee contributions credited to the participant's

SB2193- 17 -LRB100 12287 RPS 24840 b
1 defined contribution plan account by an amount determined
2 by the System to cover the cost of offering such benefits.
3 (6) The defined contribution plan shall provide a
4 variety of options for investments. These options shall
5 include investments handled by the Illinois State Board of
6 Investment as well as private sector investment options.
7 (7) The defined contribution plan shall provide a
8 variety of options for payouts to retirees and their
9 survivors.
10 (8) To the extent authorized under federal law and as
11 authorized by the System, the plan shall allow former
12 participants in the plan to transfer or roll over employee
13 and vested State contributions, and the earnings thereon,
14 into other qualified retirement plans.
15 (9) The System shall reduce the employee contributions
16 credited to the participant's defined contribution plan
17 account by an amount determined by the System to cover the
18 cost of offering these benefits and any applicable
19 administrative fees.
20 (b) Only persons who are active Tier 1 employees of the
21System on the effective date of this Section are eligible to
22participate in the defined contribution plan. Participation in
23the defined contribution plan shall be limited to the first 5%
24of eligible persons who elect to participate. The election to
25participate in the defined contribution plan is voluntary and
26irrevocable.

SB2193- 18 -LRB100 12287 RPS 24840 b
1 (c) An eligible active Tier 1 employee may irrevocably
2elect to participate in the defined contribution plan by filing
3with the System a written application to participate that is
4received by the System prior to its determination that 5% of
5eligible persons have elected to participate in the defined
6contribution plan.
7 When the System first determines that 5% of eligible
8persons have elected to participate in the defined contribution
9plan, the System shall provide notice to previously eligible
10employees that the plan is no longer available and shall cease
11accepting applications to participate.
12 (d) The System shall make a good faith effort to contact
13each active Tier 1 employee who is eligible to participate in
14the defined contribution plan. The System shall mail
15information describing the option to join the defined
16contribution plan to each of these employees to his or her last
17known address on file with the System. If the employee is not
18responsive to other means of contact, it is sufficient for the
19System to publish the details of the option on its website.
20 Upon request for further information describing the
21option, the System shall provide employees with information
22from the System before exercising the option to join the plan,
23including information on the impact to their vested benefits or
24non-vested service. The individual consultation shall include
25projections of the participant's defined benefits at
26retirement or earlier termination of service and the value of

SB2193- 19 -LRB100 12287 RPS 24840 b
1the participant's account at retirement or earlier termination
2of service. The System shall not provide advice or counseling
3with respect to whether the employee should exercise the
4option. The System shall inform Tier 1 employees who are
5eligible to participate in the defined contribution plan that
6they may also wish to obtain information and counsel relating
7to their option from any other available source, including but
8not limited to labor organizations, private counsel, and
9financial advisors.
10 (e) In no event shall the System, its staff, its authorized
11representatives, or the Board be liable for any information
12given to an employee under this Section. The System may
13coordinate with the Illinois Department of Central Management
14Services and other retirement systems administering a defined
15contribution plan to provide information concerning the impact
16of the option set forth in this Section.
17 (f) Notwithstanding any other provision of this Section, no
18person shall begin participating in the defined contribution
19plan until it has attained qualified plan status and received
20all necessary approvals from the U.S. Internal Revenue Service.
21 (g) The System shall report on its progress under this
22Section, including the available details of the defined
23contribution plan and the System's plans for informing eligible
24Tier 1 employees about the plan, to the Governor and the
25General Assembly on or before January 15, 2018.
26 (h) The Illinois State Board of Investments shall be the

SB2193- 20 -LRB100 12287 RPS 24840 b
1plan sponsor for the defined contribution plan established
2under this Section.
3 (i) The intent of this amendatory Act of the 100th General
4Assembly is to ensure that the State's normal cost of
5participation in the defined contribution plan is similar, and
6if possible equal, to the State's normal cost of participation
7in the defined benefit plan, unless a lower State's normal cost
8is necessary to ensure cost neutrality.
9 (40 ILCS 5/2-166.1 new)
10 Sec. 2-166.1. Defined contribution plan; termination. If
11the defined contribution plan is terminated or becomes
12inoperative pursuant to law, then each participant in the plan
13shall automatically be deemed to have been a contributing Tier
141 employee in the System's defined benefit plan during the time
15in which he or she participated in the defined contribution
16plan, and for that purpose the System shall be entitled to
17recover the amounts in the participant's defined contribution
18accounts.
19 (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
20 (Text of Section WITHOUT the changes made by P.A. 98-599,
21which has been held unconstitutional)
22 Sec. 20-121. Calculation of proportional retirement
23annuities.
24 (a) Upon retirement of the employee, a proportional

SB2193- 21 -LRB100 12287 RPS 24840 b
1retirement annuity shall be computed by each participating
2system in which pension credit has been established on the
3basis of pension credits under each system. The computation
4shall be in accordance with the formula or method prescribed by
5each participating system which is in effect at the date of the
6employee's latest withdrawal from service covered by any of the
7systems in which he has pension credits which he elects to have
8considered under this Article. However, the amount of any
9retirement annuity payable under the self-managed plan
10established under Section 15-158.2 of this Code or under the
11defined contribution plan established under Article 2 of this
12Code depends solely on the value of the participant's vested
13account balances and is not subject to any proportional
14adjustment under this Section.
15 (a-5) For persons who participate in a defined contribution
16plan established under Article 2 of this Code to whom the
17provisions of this Article apply, the pension credits
18established under the defined contribution plan may be
19considered in determining eligibility for or the amount of the
20defined benefit retirement annuity that is payable by any other
21participating system.
22 (b) Combined pension credit under all retirement systems
23subject to this Article shall be considered in determining
24whether the minimum qualification has been met and the formula
25or method of computation which shall be applied, except as may
26be otherwise provided with respect to vesting in State or

SB2193- 22 -LRB100 12287 RPS 24840 b
1employer contributions in a defined contribution plan. If a
2system has a step-rate formula for calculation of the
3retirement annuity, pension credits covering previous service
4which have been established under another system shall be
5considered in determining which range or ranges of the
6step-rate formula are to be applicable to the employee.
7 (c) Interest on pension credit shall continue to accumulate
8in accordance with the provisions of the law governing the
9retirement system in which the same has been established during
10the time an employee is in the service of another employer, on
11the assumption such employee, for interest purposes for pension
12credit, is continuing in the service covered by such retirement
13system.
14(Source: P.A. 91-887, eff. 7-6-00.)
15 (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
16 (Text of Section WITHOUT the changes made by P.A. 98-599,
17which has been held unconstitutional)
18 Sec. 20-123. Survivor's annuity. The provisions governing
19a retirement annuity shall be applicable to a survivor's
20annuity. Appropriate credits shall be established for
21survivor's annuity purposes in those participating systems
22which provide survivor's annuities, according to the same
23conditions and subject to the same limitations and restrictions
24herein prescribed for a retirement annuity. If a participating
25system has no survivor's annuity benefit, or if the survivor's

SB2193- 23 -LRB100 12287 RPS 24840 b
1annuity benefit under that system is waived, pension credit
2established in that system shall not be considered in
3determining eligibility for or the amount of the survivor's
4annuity which may be payable by any other participating system.
5 For persons who participate in the self-managed plan
6established under Section 15-158.2 or the portable benefit
7package established under Section 15-136.4, pension credit
8established under Article 15 may be considered in determining
9eligibility for or the amount of the survivor's annuity that is
10payable by any other participating system, but pension credit
11established in any other system shall not result in any right
12to a survivor's annuity under the Article 15 system.
13 For persons who participate in a defined contribution plan
14established under Article 2 of this Code to whom the provisions
15of this Article apply, the pension credits established under
16the defined contribution plan may be considered in determining
17eligibility for or the amount of the defined benefit survivor's
18annuity that is payable by any other participating system, but
19pension credits established in any other system shall not
20result in any right to or increase in the value of a survivor's
21annuity under the defined contribution plan, which depends
22solely on the options chosen and the value of the participant's
23vested account balances and is not subject to any proportional
24adjustment under this Section.
25(Source: P.A. 91-887, eff. 7-6-00.)

SB2193- 24 -LRB100 12287 RPS 24840 b
1 (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 20-124. Maximum benefits.
5 (a) In no event shall the combined retirement or survivors
6annuities exceed the highest annuity which would have been
7payable by any participating system in which the employee has
8pension credits, if all of his pension credits had been
9validated in that system.
10 If the combined annuities should exceed the highest maximum
11as determined in accordance with this Section, the respective
12annuities shall be reduced proportionately according to the
13ratio which the amount of each proportional annuity bears to
14the aggregate of all such annuities.
15 (b) In the case of a participant in the self-managed plan
16established under Section 15-158.2 of this Code to whom the
17provisions of this Article apply:
18 (i) For purposes of calculating the combined
19 retirement annuity and the proportionate reduction, if
20 any, in a retirement annuity other than one payable under
21 the self-managed plan, the amount of the Article 15
22 retirement annuity shall be deemed to be the highest
23 annuity to which the annuitant would have been entitled if
24 he or she had participated in the traditional benefit
25 package as defined in Section 15-103.1 rather than the
26 self-managed plan.

SB2193- 25 -LRB100 12287 RPS 24840 b
1 (ii) For purposes of calculating the combined
2 survivor's annuity and the proportionate reduction, if
3 any, in a survivor's annuity other than one payable under
4 the self-managed plan, the amount of the Article 15
5 survivor's annuity shall be deemed to be the highest
6 survivor's annuity to which the survivor would have been
7 entitled if the deceased employee had participated in the
8 traditional benefit package as defined in Section 15-103.1
9 rather than the self-managed plan.
10 (iii) Benefits payable under the self-managed plan are
11 not subject to proportionate reduction under this Section.
12 (c) In the case of a participant in a defined contribution
13plan established under Article 2 of this Code to whom the
14provisions of this Article apply:
15 (i) For purposes of calculating the combined
16 retirement annuity and the proportionate reduction, if
17 any, in a defined benefit retirement annuity, any benefit
18 payable under the defined contribution plan shall not be
19 considered.
20 (ii) For purposes of calculating the combined
21 survivor's annuity and the proportionate reduction, if
22 any, in a defined benefit survivor's annuity, any benefit
23 payable under the defined contribution plan shall not be
24 considered.
25 (iii) Benefits payable under a defined contribution
26 plan established under Article 2 of this Code are not

SB2193- 26 -LRB100 12287 RPS 24840 b
1 subject to proportionate reduction under this Section.
2(Source: P.A. 91-887, eff. 7-6-00.)
3 (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
4 (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6 Sec. 20-125. Return to employment - suspension of benefits.
7If a retired employee returns to employment which is covered by
8a system from which he is receiving a proportional annuity
9under this Article, his proportional annuity from all
10participating systems shall be suspended during the period of
11re-employment, except that this suspension does not apply to
12any distributions payable under the self-managed plan
13established under Section 15-158.2 or under a defined
14contribution plan established under Article 2 of this Code.
15 The provisions of the Article under which such employment
16would be covered shall govern the determination of whether the
17employee has returned to employment, and if applicable the
18exemption of temporary employment or employment not exceeding a
19specified duration or frequency, for all participating systems
20from which the retired employee is receiving a proportional
21annuity under this Article, notwithstanding any contrary
22provisions in the other Articles governing such systems.
23(Source: P.A. 91-887, eff. 7-6-00.)
24 (40 ILCS 5/2-165 rep.)

SB2193- 27 -LRB100 12287 RPS 24840 b
1 (40 ILCS 5/2-166 rep.)
2 Section 15. The Illinois Pension Code is amended by
3repealing Sections 2-165 and 2-166.
4 Section 900. The State Mandates Act is amended by adding
5Section 8.41 as follows:
6 (30 ILCS 805/8.41 new)
7 Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
8of this Act, no reimbursement by the State is required for the
9implementation of any mandate created by this amendatory Act of
10the 100th General Assembly.
11 Section 970. Severability. The provisions of this Act are
12severable under Section 1.31 of the Statute on Statutes.
13 Section 999. Effective date. This Act takes effect upon
14becoming law.

SB2193- 28 -LRB100 12287 RPS 24840 b
1 INDEX
2 Statutes amended in order of appearance