Illinois-2017-SB2194-Introduced

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB2194

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

SYNOPSIS AS INTRODUCED:

See Index

Amends the State Employee, State Universities, Downstate Teacher, and Chicago Teacher Articles of the Illinois Pension Code. Requires active Tier 1 employees to elect either to (i) have automatic annual increases in retirement and survivor's annuities delayed and reduced or (ii) maintain their current benefit package with additional limitations on pensionable salary. Provides that a Tier 1 employee who elects item (i) is entitled to have future increases in income treated as pensionable income, have contributions reduced to a specified rate, and receive a consideration payment of 10% of contributions made prior to the election. Provides that a Tier 1 employee who elects item (ii) is not eligible to have future increases in income treated as pensionable income. Makes funding changes. Amends the State Pension Funds Continuing Appropriation Act to provide a continuing appropriation for the amounts of the consideration payments. Amends various Acts to make conforming changes. Amends the Illinois Educational Labor Relations Act and the Illinois Public Labor Relations Act to prohibit bargaining and interest arbitration regarding certain changes made by the amendatory Act and to provide that no action of the employer taken to implement that prohibition shall give rise to an unfair labor practice under those Acts; exempts certain existing agreements. Amends the State Mandates Act to require implementation without reimbursement. Makes other changes. Effective immediately.

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FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

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1 AN ACT concerning public employee benefits.

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

3 represented in the General Assembly:

4 Section 5. The Illinois Public Labor Relations Act is

5 amended by changing Sections 10 and 15 and by adding Section

6 7.6 as follows:

7 (5 ILCS 315/7.6 new)

8 Sec. 7.6. No collective bargaining or interest arbitration

9 regarding certain changes to the Illinois Pension Code.

10 (a) Notwithstanding any other provision of this Act,

11 employers shall not be required to bargain over matters

12 affected by the changes, the impact of the changes, and the

13 implementation of the changes to Article 14, 15, 16, or 17 of

14 the Illinois Pension Code made by the addition of Section

15 14-106.5, 15-132.9, 16-122.9, or 17-115.5 of the Illinois

16 Pension Code, which are deemed to be prohibited subjects of

17 bargaining. Notwithstanding any provision of this Act, the

18 changes, impact of the changes, or implementation of the

19 changes to Article 14, 15, 16, or 17 of the Illinois Pension

20 Code made by the addition of Section 14-106.5, 15-132.9,

21 16-122.9, or 17-115.5 of the Illinois Pension Code shall not be

22 subject to interest arbitration or any award issued pursuant to

23 interest arbitration. The provisions of this Section shall not

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1 apply to an employment contract or collective bargaining

2 agreement that is in effect on the effective date of this

3 amendatory Act of the 100th General Assembly. However, any such

4 contract or agreement that is modified, amended, renewed, or

5 superseded after the effective date of this amendatory Act of

6 the 100th General Assembly shall be subject to the provisions

7 of this Section. Each employer with active employees

8 participating in a retirement system or pension fund

9 established under Article 14, 15, 16, or 17 of the Illinois

10 Pension Code shall comply with and be subject to the provisions

11 of this amendatory Act of the 100th General Assembly. The

12 provisions of this Section shall not apply to the ability of

13 any employer and employee representative to bargain

14 collectively with regard to the pick up of employee

15 contributions pursuant to Section 14-133.1, 15-157.1,

16 16-152.1, 17-130.1, or 17-130.2 of the Illinois Pension Code.

17 (b) Subject to and except for the matters set forth in

18 subsection (a) of this Section that are deemed prohibited

19 subjects of bargaining, nothing in this Section shall be

20 construed as otherwise limiting any of the obligations and

21 requirements applicable to employers under any of the

22 provisions of this Act, including, but not limited to, the

23 requirement to bargain collectively with regard to policy

24 matters directly affecting wages, hours, and terms and

25 conditions of employment as well as the impact thereon upon

26 request by employee representatives. Subject to and except for

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1 the matters set forth in subsection (a) of this Section that

2 are deemed prohibited subjects of bargaining, nothing in this

3 Section shall be construed as otherwise limiting any of the

4 rights of employees or employee representatives under the

5 provisions of this Act.

6 (c) In case of any conflict between this Section and any

7 other provisions of this Act or any other law, the provisions

8 of this Section shall control.

9 (5 ILCS 315/10) (from Ch. 48, par. 1610)

10 Sec. 10. Unfair labor practices.

11 (a) It shall be an unfair labor practice for an employer or

12 its agents:

13 (1) to interfere with, restrain or coerce public

14 employees in the exercise of the rights guaranteed in this

15 Act or to dominate or interfere with the formation,

16 existence or administration of any labor organization or

17 contribute financial or other support to it; provided, an

18 employer shall not be prohibited from permitting employees

19 to confer with him during working hours without loss of

20 time or pay;

21 (2) to discriminate in regard to hire or tenure of

22 employment or any term or condition of employment in order

23 to encourage or discourage membership in or other support

24 for any labor organization. Nothing in this Act or any

25 other law precludes a public employer from making an

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1 agreement with a labor organization to require as a

2 condition of employment the payment of a fair share under

3 paragraph (e) of Section 6;

4 (3) to discharge or otherwise discriminate against a

5 public employee because he has signed or filed an

6 affidavit, petition or charge or provided any information

7 or testimony under this Act;

8 (4) subject to and except as provided in Section 7.6,

9 to refuse to bargain collectively in good faith with a

10 labor organization which is the exclusive representative

11 of public employees in an appropriate unit, including, but

12 not limited to, the discussing of grievances with the

13 exclusive representative; however, no actions of the

14 employer taken to implement or otherwise comply with the

15 provisions of subsection (a) of Section 7.6 shall

16 constitute or give rise to an unfair labor practice under

17 this Act;

18 (5) to violate any of the rules and regulations

19 established by the Board with jurisdiction over them

20 relating to the conduct of representation elections or the

21 conduct affecting the representation elections;

22 (6) to expend or cause the expenditure of public funds

23 to any external agent, individual, firm, agency,

24 partnership or association in any attempt to influence the

25 outcome of representational elections held pursuant to

26 Section 9 of this Act; provided, that nothing in this

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1 subsection shall be construed to limit an employer's right

2 to internally communicate with its employees as provided in

3 subsection (c) of this Section, to be represented on any

4 matter pertaining to unit determinations, unfair labor

5 practice charges or pre-election conferences in any formal

6 or informal proceeding before the Board, or to seek or

7 obtain advice from legal counsel. Nothing in this paragraph

8 shall be construed to prohibit an employer from expending

9 or causing the expenditure of public funds on, or seeking

10 or obtaining services or advice from, any organization,

11 group, or association established by and including public

12 or educational employers, whether covered by this Act, the

13 Illinois Educational Labor Relations Act or the public

14 employment labor relations law of any other state or the

15 federal government, provided that such services or advice

16 are generally available to the membership of the

17 organization, group or association, and are not offered

18 solely in an attempt to influence the outcome of a

19 particular representational election; or

20 (7) to refuse to reduce a collective bargaining

21 agreement to writing or to refuse to sign such agreement.

22 (b) It shall be an unfair labor practice for a labor

23 organization or its agents:

24 (1) to restrain or coerce public employees in the

25 exercise of the rights guaranteed in this Act, provided,

26 (i) that this paragraph shall not impair the right of a

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1 labor organization to prescribe its own rules with respect

2 to the acquisition or retention of membership therein or

3 the determination of fair share payments and (ii) that a

4 labor organization or its agents shall commit an unfair

5 labor practice under this paragraph in duty of fair

6 representation cases only by intentional misconduct in

7 representing employees under this Act;

8 (2) to restrain or coerce a public employer in the

9 selection of his representatives for the purposes of

10 collective bargaining or the settlement of grievances; or

11 (3) to cause, or attempt to cause, an employer to

12 discriminate against an employee in violation of

13 subsection (a)(2);

14 (4) to refuse to bargain collectively in good faith

15 with a public employer, if it has been designated in

16 accordance with the provisions of this Act as the exclusive

17 representative of public employees in an appropriate unit;

18 (5) to violate any of the rules and regulations

19 established by the boards with jurisdiction over them

20 relating to the conduct of representation elections or the

21 conduct affecting the representation elections;

22 (6) to discriminate against any employee because he has

23 signed or filed an affidavit, petition or charge or

24 provided any information or testimony under this Act;

25 (7) to picket or cause to be picketed, or threaten to

26 picket or cause to be picketed, any public employer where

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1 an object thereof is forcing or requiring an employer to

2 recognize or bargain with a labor organization of the

3 representative of its employees, or forcing or requiring

4 the employees of an employer to accept or select such labor

5 organization as their collective bargaining

6 representative, unless such labor organization is

7 currently certified as the representative of such

8 employees:

9 (A) where the employer has lawfully recognized in

10 accordance with this Act any labor organization and a

11 question concerning representation may not

12 appropriately be raised under Section 9 of this Act;

13 (B) where within the preceding 12 months a valid

14 election under Section 9 of this Act has been

15 conducted; or

16 (C) where such picketing has been conducted

17 without a petition under Section 9 being filed within a

18 reasonable period of time not to exceed 30 days from

19 the commencement of such picketing; provided that when

20 such a petition has been filed the Board shall

21 forthwith, without regard to the provisions of

22 subsection (a) of Section 9 or the absence of a showing

23 of a substantial interest on the part of the labor

24 organization, direct an election in such unit as the

25 Board finds to be appropriate and shall certify the

26 results thereof; provided further, that nothing in

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1 this subparagraph shall be construed to prohibit any

2 picketing or other publicity for the purpose of

3 truthfully advising the public that an employer does

4 not employ members of, or have a contract with, a labor

5 organization unless an effect of such picketing is to

6 induce any individual employed by any other person in

7 the course of his employment, not to pick up, deliver,

8 or transport any goods or not to perform any services;

9 or

10 (8) to refuse to reduce a collective bargaining

11 agreement to writing or to refuse to sign such agreement.

12 (c) The expressing of any views, argument, or opinion or

13 the dissemination thereof, whether in written, printed,

14 graphic, or visual form, shall not constitute or be evidence of

15 an unfair labor practice under any of the provisions of this

16 Act, if such expression contains no threat of reprisal or force

17 or promise of benefit.

18 (Source: P.A. 86-412; 87-736.)

19 (5 ILCS 315/15) (from Ch. 48, par. 1615)

20 (Text of Section WITHOUT the changes made by P.A. 98-599,

21 which has been held unconstitutional)

22 Sec. 15. Act Takes Precedence.

23 (a) In case of any conflict between the provisions of this

24 Act and any other law (other than Section 5 of the State

25 Employees Group Insurance Act of 1971 and other than the

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1 changes made to the Illinois Pension Code by this amendatory

2 Act of the 96th General Assembly), executive order or

3 administrative regulation relating to wages, hours and

4 conditions of employment and employment relations, the

5 provisions of this Act or any collective bargaining agreement

6 negotiated thereunder shall prevail and control. Nothing in

7 this Act shall be construed to replace or diminish the rights

8 of employees established by Sections 28 and 28a of the

9 Metropolitan Transit Authority Act, Sections 2.15 through 2.19

10 of the Regional Transportation Authority Act. The provisions of

11 this Act are subject to Section 5 of the State Employees Group

12 Insurance Act of 1971. Nothing in this Act shall be construed

13 to replace the necessity of complaints against a sworn peace

14 officer, as defined in Section 2(a) of the Uniform Peace

15 Officer Disciplinary Act, from having a complaint supported by

16 a sworn affidavit.

17 (b) Except as provided in subsection (a) above, any

18 collective bargaining contract between a public employer and a

19 labor organization executed pursuant to this Act shall

20 supersede any contrary statutes, charters, ordinances, rules

21 or regulations relating to wages, hours and conditions of

22 employment and employment relations adopted by the public

23 employer or its agents. Any collective bargaining agreement

24 entered into prior to the effective date of this Act shall

25 remain in full force during its duration.

26 (c) It is the public policy of this State, pursuant to

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1 paragraphs (h) and (i) of Section 6 of Article VII of the

2 Illinois Constitution, that the provisions of this Act are the

3 exclusive exercise by the State of powers and functions which

4 might otherwise be exercised by home rule units. Such powers

5 and functions may not be exercised concurrently, either

6 directly or indirectly, by any unit of local government,

7 including any home rule unit, except as otherwise authorized by

8 this Act.

9 (d) Notwithstanding any other provision of law, no

10 collective bargaining agreement entered into, renewed, or

11 extended after the effective date of this amendatory Act of the

12 100th General Assembly or any arbitration award issued under

13 such collective bargaining agreement may violate or conflict

14 with the changes made by this amendatory Act of the 100th

15 General Assembly.

16 (Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)

17 Section 10. The Attorney General Act is amended by adding

18 Section 5 as follows:

19 (15 ILCS 205/5 new)

20 Sec. 5. Future increases in income. The Office of the

21 Attorney General must not pay, offer, or agree to pay any

22 future increase in income, as that term is defined in Section

23 14-103.42 of the Illinois Pension Code, to any person in a

24 manner that violates Section 14-106.5 of the Illinois Pension

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1 Code.

2 Section 15. The Secretary of State Merit Employment Code is

3 amended by adding Section 13a as follows:

4 (15 ILCS 310/13a new)

5 Sec. 13a. Future increases in income. The Office of the

6 Secretary of State must not pay, offer, or agree to pay any

7 future increase in income, as that term is defined in Section

8 14-103.42 of the Illinois Pension Code, to any person in a

9 manner that violates Section 14-106.5 of the Illinois Pension

10 Code.

11 Section 20. The Comptroller Merit Employment Code is

12 amended by adding Section 13a as follows:

13 (15 ILCS 410/13a new)

14 Sec. 13a. Future increases in income. The Office of the

15 Comptroller must not pay, offer, or agree to pay any future

16 increase in income, as that term is defined in Section

17 14-103.42 of the Illinois Pension Code, to any person in a

18 manner that violates Section 14-106.5 of the Illinois Pension

19 Code.

20 Section 25. The State Treasurer Employment Code is amended

21 by adding Section 12a as follows:

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1 (15 ILCS 510/12a new)

2 Sec. 12a. Future increases in income. The Office of the

3 State Treasurer must not pay, offer, or agree to pay any future

4 increase in income, as that term is defined in Section

5 14-103.42 of the Illinois Pension Code, to any person in a

6 manner that violates Section 14-106.5 of the Illinois Pension

7 Code.

8 Section 30. The Civil Administrative Code of Illinois is

9 amended by adding Section 5-647 as follows:

10 (20 ILCS 5/5-647 new)

11 Sec. 5-647. Future increases in income. A Department must

12 not pay, offer, or agree to pay any future increase in income,

13 as that term is defined in Section 14-103.42, 15-112.1, or

14 16-121.1 of the Illinois Pension Code, to any person in a

15 manner that violates Section 14-106.5, 15-132.9, or 16-122.9 of

16 the Illinois Pension Code.

17 Section 35. The Illinois Pension Code is amended by

18 changing Sections 14-103.10, 14-114, 14-131, 14-133,

19 14-135.08, 14-152.1, 15-108.1, 15-111, 15-136, 15-155, 15-157,

20 15-165, 15-198, 16-121, 16-133.1, 16-136.1, 16-152, 16-158,

21 16-203, 17-116, 17-129, and 17-130 and by adding Sections

22 14-103.41, 14-103.42, 14-103.43, 14-106.5, 15-112.1, 15-112.2,

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1 15-132.9, 16-107.1, 16-121.1, 16-121.2, 16-122.9, 17-106.05,

2 17-113.4, 17-113.5, 17-113.6, 17-115.5, and 17-119.2 as

3 follows:

4 (40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)

5 (Text of Section WITHOUT the changes made by P.A. 98-599,

6 which has been held unconstitutional)

7 Sec. 14-103.10. Compensation.

8 (a) For periods of service prior to January 1, 1978, the

9 full rate of salary or wages payable to an employee for

10 personal services performed if he worked the full normal

11 working period for his position, subject to the following

12 maximum amounts: (1) prior to July 1, 1951, $400 per month or

13 $4,800 per year; (2) between July 1, 1951 and June 30, 1957

14 inclusive, $625 per month or $7,500 per year; (3) beginning

15 July 1, 1957, no limitation.

16 In the case of service of an employee in a position

17 involving part-time employment, compensation shall be

18 determined according to the employees' earnings record.

19 (b) For periods of service on and after January 1, 1978,

20 all remuneration for personal services performed defined as

21 "wages" under the Social Security Enabling Act, including that

22 part of such remuneration which is in excess of any maximum

23 limitation provided in such Act, and including any benefits

24 received by an employee under a sick pay plan in effect before

25 January 1, 1981, but excluding lump sum salary payments:

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1 (1) for vacation,

2 (2) for accumulated unused sick leave,

3 (3) upon discharge or dismissal,

4 (4) for approved holidays.

5 (c) For periods of service on or after December 16, 1978,

6 compensation also includes any benefits, other than lump sum

7 salary payments made at termination of employment, which an

8 employee receives or is eligible to receive under a sick pay

9 plan authorized by law.

10 (d) For periods of service after September 30, 1985,

11 compensation also includes any remuneration for personal

12 services not included as "wages" under the Social Security

13 Enabling Act, which is deducted for purposes of participation

14 in a program established pursuant to Section 125 of the

15 Internal Revenue Code or its successor laws.

16 (e) For members for which Section 1-160 applies for periods

17 of service on and after January 1, 2011, all remuneration for

18 personal services performed defined as "wages" under the Social

19 Security Enabling Act, excluding remuneration that is in excess

20 of the annual earnings, salary, or wages of a member or

21 participant, as provided in subsection (b-5) of Section 1-160,

22 but including any benefits received by an employee under a sick

23 pay plan in effect before January 1, 1981. Compensation shall

24 exclude lump sum salary payments:

25 (1) for vacation;

26 (2) for accumulated unused sick leave;

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1 (3) upon discharge or dismissal; and

2 (4) for approved holidays.

3 (f) Notwithstanding the other provisions of this Section,

4 for service on or after July 1, 2013, "compensation" does not

5 include any stipend payable to an employee for service on a

6 board or commission.

7 (g) Notwithstanding any other provision of this Section,

8 "compensation" does not include any future increase in income

9 that is offered for service by a department to a Tier 1

10 employee under this Article pursuant to the condition set forth

11 in subsection (c) of Section 14-106.5 and accepted under that

12 condition by a Tier 1 employee who has made the election under

13 paragraph (2) of subsection (a) of Section 14-106.5.

14 (h) Notwithstanding any other provision of this Section,

15 "compensation" does not include any consideration payment made

16 to a Tier 1 employee.

17 (Source: P.A. 98-449, eff. 8-16-13.)

18 (40 ILCS 5/14-103.41 new)

19 Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An

20 employee under this Article who first became a member or

21 participant before January 1, 2011 under any reciprocal

22 retirement system or pension fund established under this Code

23 other than a retirement system or pension fund established

24 under Article 2, 3, 4, 5, 6, or 18 of this Code.

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1 (40 ILCS 5/14-103.42 new)

2 Sec. 14-103.42. Future increase in income. "Future

3 increase in income" means an increase to a Tier 1 employee's

4 base pay that is offered by a department to the Tier 1 employee

5 for service under this Article after June 30, 2019 that

6 qualifies as "compensation", as defined in Section 14-103.10,

7 or would qualify as "compensation" but for the fact that it was

8 offered to and accepted by the Tier 1 employee under the

9 condition set forth in subsection (c) of Section 14-106.5. The

10 term "future increase in income" includes an increase to a Tier

11 1 employee's base pay that is paid to the Tier 1 employee

12 pursuant to an extension, amendment, or renewal of any

13 employment contract or collective bargaining agreement after

14 the effective date of this Section.

15 (40 ILCS 5/14-103.43 new)

16 Sec. 14-103.43. Base pay. As used in Section 14-103.42 of

17 this Code, "base pay" means the greater of either (i) the Tier

18 1 employee's annualized rate of compensation as of June 30,

19 2019, or (ii) the Tier 1 employee's annualized rate of

20 compensation immediately preceding the expiration, renewal, or

21 amendment of an employment contract or collective bargaining

22 agreement in effect on the effective date of this Section. For

23 a person returning to active service as a Tier 1 employee after

24 June 30, 2019, however, "base pay" means the employee's

25 annualized rate of compensation as of the employee's last date

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1 of service prior to July 1, 2019. The System shall calculate

2 the base pay of each Tier 1 employee pursuant to this Section.

3 (40 ILCS 5/14-106.5 new)

4 Sec. 14-106.5. Election by Tier 1 employees.

5 (a) Each active Tier 1 employee shall make an irrevocable

6 election either:

7 (1) to agree to delay his or her eligibility for

8 automatic annual increases in retirement annuity as

9 provided in subsection (a-1) of Section 14-114 and to have

10 the amount of the automatic annual increases in his or her

11 retirement annuity and survivors or widow's annuity that

12 are otherwise provided for in this Article calculated,

13 instead, as provided in subsection (a-1) of Section 14-114;

14 or

15 (2) to not agree to paragraph (1) of this subsection.

16 The election required under this subsection (a) shall be

17 made by each active Tier 1 employee no earlier than January 1,

18 2019 and no later than March 31, 2019, except that:

19 (i) a person who becomes a Tier 1 employee under this

20 Article on or after January 1, 2019 must make the election

21 under this subsection (a) within 60 days after becoming a

22 Tier 1 employee; and

23 (ii) a person who returns to active service as a Tier 1

24 employee under this Article on or after January 1, 2019 and

25 has not yet made an election under this Section must make

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1 the election under this subsection (a) within 60 days after

2 returning to active service as a Tier 1 employee.

3 If a Tier 1 employee fails for any reason to make a

4 required election under this subsection within the time

5 specified, then the employee shall be deemed to have made the

6 election under paragraph (2) of this subsection.

7 (a-5) If this Section is enjoined or stayed by an Illinois

8 court or a court of competent jurisdiction pending the entry of

9 a final and unappealable decision, and this Section is

10 determined to be constitutional or otherwise valid by a final

11 unappealable decision of an Illinois court or a court of

12 competent jurisdiction, then the election procedure set forth

13 in subsection (a) of this Section shall commence on the 180th

14 calendar day after the date of the issuance of the final

15 unappealable decision and shall conclude at the end of the

16 270th calendar day after that date.

17 (a-10) All elections under subsection (a) that are made or

18 deemed to be made before July 1, 2019 shall take effect on July

19 1, 2019. Elections that are made or deemed to be made on or

20 after July 1, 2019 shall take effect on the first day of the

21 month following the month in which the election is made or

22 deemed to be made.

23 (b) As adequate and legal consideration provided under this

24 amendatory Act of the 100th General Assembly for making an

25 election under paragraph (1) of subsection (a) of this Section,

26 the department shall be expressly and irrevocably prohibited

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1 from offering any future increases in income to a Tier 1

2 employee who has made an election under paragraph (1) of

3 subsection (a) of this Section on the condition of not

4 constituting compensation under Section 14-103.10.

5 As adequate and legal consideration provided under this

6 amendatory Act of the 100th General Assembly for making an

7 election under paragraph (1) of subsection (a) of this Section,

8 each Tier 1 employee who has made an election under paragraph

9 (1) of subsection (a) of this Section shall receive a

10 consideration payment equal to 10% of the contributions made by

11 or on behalf of the employee before the effective date of that

12 election. The State Comptroller shall pay the consideration

13 payment to the Tier 1 employee out of funds appropriated for

14 that purpose under Section 1.9 of the State Pension Funds

15 Continuing Appropriation Act. The System shall calculate the

16 amount of each consideration payment and, by July 1, 2019,

17 shall certify to the State Comptroller the amount of the

18 consideration payment, together with the name, address, and any

19 other available payment information of the Tier 1 employee as

20 found in the records of the System. The System shall make

21 additional calculations and certifications of consideration

22 payments to the State Comptroller as it deems necessary.

23 (c) A Tier 1 employee who makes the election under

24 paragraph (2) of subsection (a) of this Section shall not be

25 subject to paragraph (1) of subsection (a) of this Section.

26 However, each future increase in income offered by a department

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1 under this Article to a Tier 1 employee who has made the

2 election under paragraph (2) of subsection (a) of this Section

3 shall be offered by the department expressly and irrevocably on

4 the condition of not constituting compensation under Section

5 14-103.10 and that the Tier 1 employee's acceptance of the

6 offered future increase in income shall constitute his or her

7 agreement to that condition.

8 (d) The System shall make a good faith effort to contact

9 each Tier 1 employee subject to this Section. The System shall

10 mail information describing the required election to each Tier

11 1 employee by United States Postal Service mail to his or her

12 last known address on file with the System. If the Tier 1

13 employee is not responsive to other means of contact, it is

14 sufficient for the System to publish the details of any

15 required elections on its website or to publish those details

16 in a regularly published newsletter or other existing public

17 forum.

18 Tier 1 employees who are subject to this Section shall be

19 provided with an election packet containing information

20 regarding their options, as well as the forms necessary to make

21 the required election. Upon request, the System shall offer

22 Tier 1 employees an opportunity to receive information from the

23 System before making the required election. The information may

24 consist of video materials, group presentations, individual

25 consultation with a member or authorized representative of the

26 System in person or by telephone or other electronic means, or

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1 any combination of those methods. The System shall not provide

2 advice or counseling with respect to which election a Tier 1

3 employee should make or specific to the legal or tax

4 circumstances of or consequences to the Tier 1 employee.

5 The System shall inform Tier 1 employees in the election

6 packet required under this subsection that the Tier 1 employee

7 may also wish to obtain information and counsel relating to the

8 election required under this Section from any other available

9 source, including, but not limited to, labor organizations and

10 private counsel.

11 In no event shall the System, its staff, or the Board be

12 held liable for any information given to a member regarding the

13 elections under this Section. The System shall coordinate with

14 the Illinois Department of Central Management Services and each

15 other retirement system administering an election in

16 accordance with this amendatory Act of the 100th General

17 Assembly to provide information concerning the impact of the

18 election set forth in this Section.

19 (e) Notwithstanding any other provision of law, a

20 department under this Article is required to offer each future

21 increase in income expressly and irrevocably on the condition

22 of not constituting "compensation" under Section 14-103.10 to

23 any Tier 1 employee who has made an election under paragraph

24 (2) of subsection (a) of this Section. The offer shall also

25 provide that the Tier 1 employee's acceptance of the offered

26 future increase in income shall constitute his or her agreement

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1 to the condition set forth in this subsection.

2 For purposes of legislative intent, the condition set forth

3 in this subsection shall be construed in a manner that ensures

4 that the condition is not violated or circumvented through any

5 contrivance of any kind.

6 (f) A member's election under this Section is not a

7 prohibited election under subdivision (j)(1) of Section 1-119

8 of this Code.

9 (g) No provision of this Section shall be interpreted in a

10 way that would cause the System to cease to be a qualified plan

11 under Section 401(a) of the Internal Revenue Code of 1986. The

12 provisions of this Section shall be subject to and implemented

13 in a manner that complies with Section 21 of Article V of the

14 Illinois Constitution.

15 (h) If an election created by this amendatory Act in any

16 other Article of this Code or any change deriving from that

17 election is determined to be unconstitutional or otherwise

18 invalid by a final unappealable decision of an Illinois court

19 or a court of competent jurisdiction, the invalidity of that

20 provision shall not in any way affect the validity of this

21 Section or the changes deriving from the election required

22 under this Section.

23 (40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)

24 (Text of Section WITHOUT the changes made by P.A. 98-599,

25 which has been held unconstitutional)

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1 Sec. 14-114. Automatic increase in retirement annuity.

2 (a) Subject to the provisions of subsections (a-1), any ~~Any~~

3 person receiving a retirement annuity under this Article who

4 retires having attained age 60, or who retires before age 60

5 having at least 35 years of creditable service, or who retires

6 on or after January 1, 2001 at an age which, when added to the

7 number of years of his or her creditable service, equals at

8 least 85, shall, on January 1 next following the first full

9 year of retirement, have the amount of the then fixed and

10 payable monthly retirement annuity increased 3%. Any person

11 receiving a retirement annuity under this Article who retires

12 before attainment of age 60 and with less than (i) 35 years of

13 creditable service if retirement is before January 1, 2001, or

14 (ii) the number of years of creditable service which, when

15 added to the member's age, would equal 85, if retirement is on

16 or after January 1, 2001, shall have the amount of the fixed

17 and payable retirement annuity increased by 3% on the January 1

18 occurring on or next following (1) attainment of age 60, or (2)

19 the first anniversary of retirement, whichever occurs later.

20 However, for persons who receive the alternative retirement

21 annuity under Section 14-110, references in this subsection (a)

22 to attainment of age 60 shall be deemed to refer to attainment

23 of age 55. For a person receiving early retirement incentives

24 under Section 14-108.3 whose retirement annuity began after

25 January 1, 1992 pursuant to an extension granted under

26 subsection (e) of that Section, the first anniversary of

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1 retirement shall be deemed to be January 1, 1993. For a person

2 who retires on or after June 28, 2001 and on or before October

3 1, 2001, and whose retirement annuity is calculated, in whole

4 or in part, under Section 14-110 or subsection (g) or (h) of

5 Section 14-108, the first anniversary of retirement shall be

6 deemed to be January 1, 2002.

7 On each January 1 following the date of the initial

8 increase under this subsection, the employee's monthly

9 retirement annuity shall be increased by an additional 3%.

10 Beginning January 1, 1990, and except as provided in

11 subsection (a-1), all automatic annual increases payable under

12 this Section shall be calculated as a percentage of the total

13 annuity payable at the time of the increase, including previous

14 increases granted under this Article.

15 (a-1) Notwithstanding any other provision of this Article,

16 for a Tier 1 employee who made the election under paragraph (1)

17 of subsection (a) of Section 14-106.5:

18 (1) The initial increase in retirement annuity under

19 this Section shall occur on the January 1 occurring either

20 on or after the attainment of age 67 or the fifth

21 anniversary of the annuity start date, whichever is

22 earlier.

23 (2) The amount of each automatic annual increase in

24 retirement annuity or survivors or widow's annuity

25 occurring on or after the effective date of that election

26 shall be calculated as a percentage of the originally

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1 granted retirement annuity or survivors or widow's

2 annuity, equal to 3% or one-half the annual unadjusted

3 percentage increase (but not less than zero) in the

4 consumer price index-u for the 12 months ending with the

5 September preceding each November 1, whichever is less. If

6 the annual unadjusted percentage change in the consumer

7 price index-u for the 12 months ending with the September

8 preceding each November 1 is zero or there is a decrease,

9 then the annuity shall not be increased.

10 For the purposes of this Section, "consumer price index-u"

11 means the index published by the Bureau of Labor Statistics of

12 the United States Department of Labor that measures the average

13 change in prices of goods and services purchased by all urban

14 consumers, United States city average, all items, 1982-84 =

15 100. The new amount resulting from each annual adjustment shall

16 be determined by the Public Pension Division of the Department

17 of Insurance and made available to the board of the retirement

18 system by November 1 of each year.

19 (b) The provisions of subsection (a) of this Section shall

20 be applicable to an employee only if the employee makes the

21 additional contributions required after December 31, 1969 for

22 the purpose of the automatic increases for not less than the

23 equivalent of one full year. If an employee becomes an

24 annuitant before his additional contributions equal one full

25 year's contributions based on his salary at the date of

26 retirement, the employee may pay the necessary balance of the

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1 contributions to the system, without interest, and be eligible

2 for the increasing annuity authorized by this Section.

3 (c) The provisions of subsection (a) of this Section shall

4 not be applicable to any annuitant who is on retirement on

5 December 31, 1969, and thereafter returns to State service,

6 unless the member has established at least one year of

7 additional creditable service following reentry into service.

8 (d) In addition to other increases which may be provided by

9 this Section, on January 1, 1981 any annuitant who was

10 receiving a retirement annuity on or before January 1, 1971

11 shall have his retirement annuity then being paid increased $1

12 per month for each year of creditable service. On January 1,

13 1982, any annuitant who began receiving a retirement annuity on

14 or before January 1, 1977, shall have his retirement annuity

15 then being paid increased $1 per month for each year of

16 creditable service.

17 On January 1, 1987, any annuitant who began receiving a

18 retirement annuity on or before January 1, 1977, shall have the

19 monthly retirement annuity increased by an amount equal to 8�

20 per year of creditable service times the number of years that

21 have elapsed since the annuity began.

22 (e) Every person who receives the alternative retirement

23 annuity under Section 14-110 and who is eligible to receive the

24 3% increase under subsection (a) on January 1, 1986, shall also

25 receive on that date a one-time increase in retirement annuity

26 equal to the difference between (1) his actual retirement

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1 annuity on that date, including any increases received under

2 subsection (a), and (2) the amount of retirement annuity he

3 would have received on that date if the amendments to

4 subsection (a) made by Public Act 84-162 had been in effect

5 since the date of his retirement.

6 (Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;

7 92-651, eff. 7-11-02.)

8 (40 ILCS 5/14-131)

9 Sec. 14-131. Contributions by State.

10 (a) The State shall make contributions to the System by

11 appropriations of amounts which, together with other employer

12 contributions from trust, federal, and other funds, employee

13 contributions, investment income, and other income, will be

14 sufficient to meet the cost of maintaining and administering

15 the System on a 90% funded basis in accordance with actuarial

16 recommendations.

17 For the purposes of this Section and Section 14-135.08,

18 references to State contributions refer only to employer

19 contributions and do not include employee contributions that

20 are picked up or otherwise paid by the State or a department on

21 behalf of the employee.

22 (b) The Board shall determine the total amount of State

23 contributions required for each fiscal year on the basis of the

24 actuarial tables and other assumptions adopted by the Board,

25 using the formula in subsection (e).

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1 The Board shall also determine a State contribution rate

2 for each fiscal year, expressed as a percentage of payroll,

3 based on the total required State contribution for that fiscal

4 year (less the amount received by the System from

5 appropriations under Section 8.12 of the State Finance Act and

6 Section 1 of the State Pension Funds Continuing Appropriation

7 Act, if any, for the fiscal year ending on the June 30

8 immediately preceding the applicable November 15 certification

9 deadline), the estimated payroll (including all forms of

10 compensation) for personal services rendered by eligible

11 employees, and the recommendations of the actuary.

12 For the purposes of this Section and Section 14.1 of the

13 State Finance Act, the term "eligible employees" includes

14 employees who participate in the System, persons who may elect

15 to participate in the System but have not so elected, persons

16 who are serving a qualifying period that is required for

17 participation, and annuitants employed by a department as

18 described in subdivision (a)(1) or (a)(2) of Section 14-111.

19 (c) Contributions shall be made by the several departments

20 for each pay period by warrants drawn by the State Comptroller

21 against their respective funds or appropriations based upon

22 vouchers stating the amount to be so contributed. These amounts

23 shall be based on the full rate certified by the Board under

24 Section 14-135.08 for that fiscal year. From the effective date

25 of this amendatory Act of the 93rd General Assembly through the

26 payment of the final payroll from fiscal year 2004

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1 appropriations, the several departments shall not make

2 contributions for the remainder of fiscal year 2004 but shall

3 instead make payments as required under subsection (a-1) of

4 Section 14.1 of the State Finance Act. The several departments

5 shall resume those contributions at the commencement of fiscal

6 year 2005.

7 (c-1) Notwithstanding subsection (c) of this Section, for

8 fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,

9 contributions by the several departments are not required to be

10 made for General Revenue Funds payrolls processed by the

11 Comptroller. Payrolls paid by the several departments from all

12 other State funds must continue to be processed pursuant to

13 subsection (c) of this Section.

14 (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,

15 2016, and 2017 only, on or as soon as possible after the 15th

16 day of each month, the Board shall submit vouchers for payment

17 of State contributions to the System, in a total monthly amount

18 of one-twelfth of the fiscal year General Revenue Fund

19 contribution as certified by the System pursuant to Section

20 14-135.08 of the Illinois Pension Code.

21 (d) If an employee is paid from trust funds or federal

22 funds, the department or other employer shall pay employer

23 contributions from those funds to the System at the certified

24 rate, unless the terms of the trust or the federal-State

25 agreement preclude the use of the funds for that purpose, in

26 which case the required employer contributions shall be paid by

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1 the State. From the effective date of this amendatory Act of

2 the 93rd General Assembly through the payment of the final

3 payroll from fiscal year 2004 appropriations, the department or

4 other employer shall not pay contributions for the remainder of

5 fiscal year 2004 but shall instead make payments as required

6 under subsection (a-1) of Section 14.1 of the State Finance

7 Act. The department or other employer shall resume payment of

8 contributions at the commencement of fiscal year 2005.

9 (e) For State fiscal years 2012 through 2045 (except as

10 otherwise provided for fiscal year 2020), the minimum

11 contribution to the System to be made by the State for each

12 fiscal year shall be an amount determined by the System to be

13 sufficient to bring the total assets of the System up to 90% of

14 the total actuarial liabilities of the System by the end of

15 State fiscal year 2045. In making these determinations, the

16 required State contribution shall be calculated each year as a

17 level percentage of payroll over the years remaining to and

18 including fiscal year 2045 and shall be determined under the

19 projected unit credit actuarial cost method.

20 For State fiscal year 2020:

21 (1) The initial calculation and certification shall be

22 based on the amount determined above.

23 (2) For purposes of the recertification due on or

24 before May 1, 2019, the recalculation of the required State

25 contribution for fiscal year 2020 shall take into account

26 the effect on the System's liabilities of the elections

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1 made under Section 14-106.5.

2 (3) For purposes of the recertification due on or

3 before October 1, 2019, the total required State

4 contribution for fiscal year 2020 shall be reduced by the

5 amount of the consideration payments made to Tier 1

6 employees who made the election under paragraph (1) of

7 subsection (a) of Section 14-106.5.

8 For State fiscal years 1996 through 2005, the State

9 contribution to the System, as a percentage of the applicable

10 employee payroll, shall be increased in equal annual increments

11 so that by State fiscal year 2011, the State is contributing at

12 the rate required under this Section; except that (i) for State

13 fiscal year 1998, for all purposes of this Code and any other

14 law of this State, the certified percentage of the applicable

15 employee payroll shall be 5.052% for employees earning eligible

16 creditable service under Section 14-110 and 6.500% for all

17 other employees, notwithstanding any contrary certification

18 made under Section 14-135.08 before the effective date of this

19 amendatory Act of 1997, and (ii) in the following specified

20 State fiscal years, the State contribution to the System shall

21 not be less than the following indicated percentages of the

22 applicable employee payroll, even if the indicated percentage

23 will produce a State contribution in excess of the amount

24 otherwise required under this subsection and subsection (a):

25 9.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY

26 2002; 10.6% in FY 2003; and 10.8% in FY 2004.

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1 Notwithstanding any other provision of this Article, the

2 total required State contribution to the System for State

3 fiscal year 2006 is $203,783,900.

4 Notwithstanding any other provision of this Article, the

5 total required State contribution to the System for State

6 fiscal year 2007 is $344,164,400.

7 For each of State fiscal years 2008 through 2009, the State

8 contribution to the System, as a percentage of the applicable

9 employee payroll, shall be increased in equal annual increments

10 from the required State contribution for State fiscal year

11 2007, so that by State fiscal year 2011, the State is

12 contributing at the rate otherwise required under this Section.

13 Notwithstanding any other provision of this Article, the

14 total required State General Revenue Fund contribution for

15 State fiscal year 2010 is $723,703,100 and shall be made from

16 the proceeds of bonds sold in fiscal year 2010 pursuant to

17 Section 7.2 of the General Obligation Bond Act, less (i) the

18 pro rata share of bond sale expenses determined by the System's

19 share of total bond proceeds, (ii) any amounts received from

20 the General Revenue Fund in fiscal year 2010, and (iii) any

21 reduction in bond proceeds due to the issuance of discounted

22 bonds, if applicable.

23 Notwithstanding any other provision of this Article, the

24 total required State General Revenue Fund contribution for

25 State fiscal year 2011 is the amount recertified by the System

26 on or before April 1, 2011 pursuant to Section 14-135.08 and

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1 shall be made from the proceeds of bonds sold in fiscal year

2 2011 pursuant to Section 7.2 of the General Obligation Bond

3 Act, less (i) the pro rata share of bond sale expenses

4 determined by the System's share of total bond proceeds, (ii)

5 any amounts received from the General Revenue Fund in fiscal

6 year 2011, and (iii) any reduction in bond proceeds due to the

7 issuance of discounted bonds, if applicable.

8 Beginning in State fiscal year 2046, the minimum State

9 contribution for each fiscal year shall be the amount needed to

10 maintain the total assets of the System at 90% of the total

11 actuarial liabilities of the System.

12 Amounts received by the System pursuant to Section 25 of

13 the Budget Stabilization Act or Section 8.12 of the State

14 Finance Act in any fiscal year do not reduce and do not

15 constitute payment of any portion of the minimum State

16 contribution required under this Article in that fiscal year.

17 Such amounts shall not reduce, and shall not be included in the

18 calculation of, the required State contributions under this

19 Article in any future year until the System has reached a

20 funding ratio of at least 90%. A reference in this Article to

21 the "required State contribution" or any substantially similar

22 term does not include or apply to any amounts payable to the

23 System under Section 25 of the Budget Stabilization Act.

24 Notwithstanding any other provision of this Section, the

25 required State contribution for State fiscal year 2005 and for

26 fiscal year 2008 and each fiscal year thereafter, as calculated

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1 under this Section and certified under Section 14-135.08, shall

2 not exceed an amount equal to (i) the amount of the required

3 State contribution that would have been calculated under this

4 Section for that fiscal year if the System had not received any

5 payments under subsection (d) of Section 7.2 of the General

6 Obligation Bond Act, minus (ii) the portion of the State's

7 total debt service payments for that fiscal year on the bonds

8 issued in fiscal year 2003 for the purposes of that Section

9 7.2, as determined and certified by the Comptroller, that is

10 the same as the System's portion of the total moneys

11 distributed under subsection (d) of Section 7.2 of the General

12 Obligation Bond Act. In determining this maximum for State

13 fiscal years 2008 through 2010, however, the amount referred to

14 in item (i) shall be increased, as a percentage of the

15 applicable employee payroll, in equal increments calculated

16 from the sum of the required State contribution for State

17 fiscal year 2007 plus the applicable portion of the State's

18 total debt service payments for fiscal year 2007 on the bonds

19 issued in fiscal year 2003 for the purposes of Section 7.2 of

20 the General Obligation Bond Act, so that, by State fiscal year

21 2011, the State is contributing at the rate otherwise required

22 under this Section.

23 (f) After the submission of all payments for eligible

24 employees from personal services line items in fiscal year 2004

25 have been made, the Comptroller shall provide to the System a

26 certification of the sum of all fiscal year 2004 expenditures

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1 for personal services that would have been covered by payments

2 to the System under this Section if the provisions of this

3 amendatory Act of the 93rd General Assembly had not been

4 enacted. Upon receipt of the certification, the System shall

5 determine the amount due to the System based on the full rate

6 certified by the Board under Section 14-135.08 for fiscal year

7 2004 in order to meet the State's obligation under this

8 Section. The System shall compare this amount due to the amount

9 received by the System in fiscal year 2004 through payments

10 under this Section and under Section 6z-61 of the State Finance

11 Act. If the amount due is more than the amount received, the

12 difference shall be termed the "Fiscal Year 2004 Shortfall" for

13 purposes of this Section, and the Fiscal Year 2004 Shortfall

14 shall be satisfied under Section 1.2 of the State Pension Funds

15 Continuing Appropriation Act. If the amount due is less than

16 the amount received, the difference shall be termed the "Fiscal

17 Year 2004 Overpayment" for purposes of this Section, and the

18 Fiscal Year 2004 Overpayment shall be repaid by the System to

19 the Pension Contribution Fund as soon as practicable after the

20 certification.

21 (g) For purposes of determining the required State

22 contribution to the System, the value of the System's assets

23 shall be equal to the actuarial value of the System's assets,

24 which shall be calculated as follows:

25 As of June 30, 2008, the actuarial value of the System's

26 assets shall be equal to the market value of the assets as of

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1 that date. In determining the actuarial value of the System's

2 assets for fiscal years after June 30, 2008, any actuarial

3 gains or losses from investment return incurred in a fiscal

4 year shall be recognized in equal annual amounts over the

5 5-year period following that fiscal year.

6 (h) For purposes of determining the required State

7 contribution to the System for a particular year, the actuarial

8 value of assets shall be assumed to earn a rate of return equal

9 to the System's actuarially assumed rate of return.

10 (i) After the submission of all payments for eligible

11 employees from personal services line items paid from the

12 General Revenue Fund in fiscal year 2010 have been made, the

13 Comptroller shall provide to the System a certification of the

14 sum of all fiscal year 2010 expenditures for personal services

15 that would have been covered by payments to the System under

16 this Section if the provisions of this amendatory Act of the

17 96th General Assembly had not been enacted. Upon receipt of the

18 certification, the System shall determine the amount due to the

19 System based on the full rate certified by the Board under

20 Section 14-135.08 for fiscal year 2010 in order to meet the

21 State's obligation under this Section. The System shall compare

22 this amount due to the amount received by the System in fiscal

23 year 2010 through payments under this Section. If the amount

24 due is more than the amount received, the difference shall be

25 termed the "Fiscal Year 2010 Shortfall" for purposes of this

26 Section, and the Fiscal Year 2010 Shortfall shall be satisfied

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1 under Section 1.2 of the State Pension Funds Continuing

2 Appropriation Act. If the amount due is less than the amount

3 received, the difference shall be termed the "Fiscal Year 2010

4 Overpayment" for purposes of this Section, and the Fiscal Year

5 2010 Overpayment shall be repaid by the System to the General

6 Revenue Fund as soon as practicable after the certification.

7 (j) After the submission of all payments for eligible

8 employees from personal services line items paid from the

9 General Revenue Fund in fiscal year 2011 have been made, the

10 Comptroller shall provide to the System a certification of the

11 sum of all fiscal year 2011 expenditures for personal services

12 that would have been covered by payments to the System under

13 this Section if the provisions of this amendatory Act of the

14 96th General Assembly had not been enacted. Upon receipt of the

15 certification, the System shall determine the amount due to the

16 System based on the full rate certified by the Board under

17 Section 14-135.08 for fiscal year 2011 in order to meet the

18 State's obligation under this Section. The System shall compare

19 this amount due to the amount received by the System in fiscal

20 year 2011 through payments under this Section. If the amount

21 due is more than the amount received, the difference shall be

22 termed the "Fiscal Year 2011 Shortfall" for purposes of this

23 Section, and the Fiscal Year 2011 Shortfall shall be satisfied

24 under Section 1.2 of the State Pension Funds Continuing

25 Appropriation Act. If the amount due is less than the amount

26 received, the difference shall be termed the "Fiscal Year 2011

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1 Overpayment" for purposes of this Section, and the Fiscal Year

2 2011 Overpayment shall be repaid by the System to the General

3 Revenue Fund as soon as practicable after the certification.

4 (k) For fiscal years 2012 through 2017 only, after the

5 submission of all payments for eligible employees from personal

6 services line items paid from the General Revenue Fund in the

7 fiscal year have been made, the Comptroller shall provide to

8 the System a certification of the sum of all expenditures in

9 the fiscal year for personal services. Upon receipt of the

10 certification, the System shall determine the amount due to the

11 System based on the full rate certified by the Board under

12 Section 14-135.08 for the fiscal year in order to meet the

13 State's obligation under this Section. The System shall compare

14 this amount due to the amount received by the System for the

15 fiscal year. If the amount due is more than the amount

16 received, the difference shall be termed the "Prior Fiscal Year

17 Shortfall" for purposes of this Section, and the Prior Fiscal

18 Year Shortfall shall be satisfied under Section 1.2 of the

19 State Pension Funds Continuing Appropriation Act. If the amount

20 due is less than the amount received, the difference shall be

21 termed the "Prior Fiscal Year Overpayment" for purposes of this

22 Section, and the Prior Fiscal Year Overpayment shall be repaid

23 by the System to the General Revenue Fund as soon as

24 practicable after the certification.

25 (Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,

26 eff. 7-9-15; 99-523, eff. 6-30-16.)

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1 (40 ILCS 5/14-133) (from Ch. 108 1/2, par. 14-133)

2 (Text of Section WITHOUT the changes made by P.A. 98-599,

3 which has been held unconstitutional)

4 Sec. 14-133. Contributions on behalf of members.

5 (a) Except as provided in subsection (a-5), each ~~Each~~

6 participating employee shall make contributions to the System,

7 based on the employee's compensation, as follows:

8 (1) Covered employees, except as indicated below, 3.5%

9 for retirement annuity, and 0.5% for a widow or survivors

10 annuity;

11 (2) Noncovered employees, except as indicated below,

12 7% for retirement annuity and 1% for a widow or survivors

13 annuity;

14 (3) Noncovered employees serving in a position in which

15 "eligible creditable service" as defined in Section 14-110

16 may be earned, 1% for a widow or survivors annuity plus the

17 following amount for retirement annuity: 8.5% through

18 December 31, 2001; 9.5% in 2002; 10.5% in 2003; and 11.5%

19 in 2004 and thereafter;

20 (4) Covered employees serving in a position in which

21 "eligible creditable service" as defined in Section 14-110

22 may be earned, 0.5% for a widow or survivors annuity plus

23 the following amount for retirement annuity: 5% through

24 December 31, 2001; 6% in 2002; 7% in 2003; and 8% in 2004

25 and thereafter;

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1 (5) Each security employee of the Department of

2 Corrections or of the Department of Human Services who is a

3 covered employee, 0.5% for a widow or survivors annuity

4 plus the following amount for retirement annuity: 5%

5 through December 31, 2001; 6% in 2002; 7% in 2003; and 8%

6 in 2004 and thereafter;

7 (6) Each security employee of the Department of

8 Corrections or of the Department of Human Services who is

9 not a covered employee, 1% for a widow or survivors annuity

10 plus the following amount for retirement annuity: 8.5%

11 through December 31, 2001; 9.5% in 2002; 10.5% in 2003; and

12 11.5% in 2004 and thereafter.

13 (a-5) Beginning July 1, 2019 or the effective date of the

14 Tier 1 employee's election under paragraph (1) of subsection

15 (a) of Section 14-106.5, whichever is later, in lieu of the

16 contributions otherwise required under subsection (a), each

17 Tier 1 employee who made the election under paragraph (1) of

18 subsection (a) of Section 14-106.5 who is a participating

19 employee shall make contributions to the System, based on his

20 or her compensation, as follows:

21 (1) Covered employees, except as indicated below,

22 3.15% for retirement annuity, and 0.45% for a widow or

23 survivors annuity;

24 (2) Noncovered employees, except as indicated below,

25 6.3% for retirement annuity and 0.9% for a widow or

26 survivors annuity;

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1 (3) Noncovered employees serving in a position in which

2 "eligible creditable service" as defined in Section 14-110

3 may be earned, 10.35% for retirement annuity and 0.9% for a

4 widow or survivors annuity;

5 (4) Covered employees serving in a position in which

6 "eligible creditable service" as defined in Section 14-110

7 may be earned, 7.2% for retirement annuity and 0.45% for a

8 widow or survivors annuity;

9 (5) Each security employee of the Department of

10 Corrections or of the Department of Human Services who is a

11 covered employee, 10.8% for retirement annuity and 0.45%

12 for a widow or survivors annuity;

13 (6) Each security employee of the Department of

14 Corrections or of the Department of Human Services who is

15 not a covered employee, 10.35% for retirement annuity and

16 0.9% for a widow or survivors annuity.

17 (b) Contributions shall be in the form of a deduction from

18 compensation and shall be made notwithstanding that the

19 compensation paid in cash to the employee shall be reduced

20 thereby below the minimum prescribed by law or regulation. Each

21 member is deemed to consent and agree to the deductions from

22 compensation provided for in this Article, and shall receipt in

23 full for salary or compensation.

24 (Source: P.A. 92-14, eff. 6-28-01.)

25 (40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)

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1 (Text of Section WITHOUT the changes made by P.A. 98-599,

2 which has been held unconstitutional)

3 Sec. 14-135.08. To certify required State contributions.

4 (a) To certify to the Governor and to each department, on

5 or before November 15 of each year until November 15, 2011, the

6 required rate for State contributions to the System for the

7 next State fiscal year, as determined under subsection (b) of

8 Section 14-131. The certification to the Governor under this

9 subsection (a) shall include a copy of the actuarial

10 recommendations upon which the rate is based and shall

11 specifically identify the System's projected State normal cost

12 for that fiscal year.

13 (a-5) On or before November 1 of each year, beginning

14 November 1, 2012, the Board shall submit to the State Actuary,

15 the Governor, and the General Assembly a proposed certification

16 of the amount of the required State contribution to the System

17 for the next fiscal year, along with all of the actuarial

18 assumptions, calculations, and data upon which that proposed

19 certification is based. On or before January 1 of each year

20 beginning January 1, 2013, the State Actuary shall issue a

21 preliminary report concerning the proposed certification and

22 identifying, if necessary, recommended changes in actuarial

23 assumptions that the Board must consider before finalizing its

24 certification of the required State contributions. On or before

25 January 15, 2013 and each January 15 thereafter, the Board

26 shall certify to the Governor and the General Assembly the

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1 amount of the required State contribution for the next fiscal

2 year. The Board's certification must note any deviations from

3 the State Actuary's recommended changes, the reason or reasons

4 for not following the State Actuary's recommended changes, and

5 the fiscal impact of not following the State Actuary's

6 recommended changes on the required State contribution.

7 (b) The certifications under subsections (a) and (a-5)

8 shall include an additional amount necessary to pay all

9 principal of and interest on those general obligation bonds due

10 the next fiscal year authorized by Section 7.2(a) of the

11 General Obligation Bond Act and issued to provide the proceeds

12 deposited by the State with the System in July 2003,

13 representing deposits other than amounts reserved under

14 Section 7.2(c) of the General Obligation Bond Act. For State

15 fiscal year 2005, the Board shall make a supplemental

16 certification of the additional amount necessary to pay all

17 principal of and interest on those general obligation bonds due

18 in State fiscal years 2004 and 2005 authorized by Section

19 7.2(a) of the General Obligation Bond Act and issued to provide

20 the proceeds deposited by the State with the System in July

21 2003, representing deposits other than amounts reserved under

22 Section 7.2(c) of the General Obligation Bond Act, as soon as

23 practical after the effective date of this amendatory Act of

24 the 93rd General Assembly.

25 On or before May 1, 2004, the Board shall recalculate and

26 recertify to the Governor and to each department the amount of

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1 the required State contribution to the System and the required

2 rates for State contributions to the System for State fiscal

3 year 2005, taking into account the amounts appropriated to and

4 received by the System under subsection (d) of Section 7.2 of

5 the General Obligation Bond Act.

6 On or before July 1, 2005, the Board shall recalculate and

7 recertify to the Governor and to each department the amount of

8 the required State contribution to the System and the required

9 rates for State contributions to the System for State fiscal

10 year 2006, taking into account the changes in required State

11 contributions made by this amendatory Act of the 94th General

12 Assembly.

13 On or before April 1, 2011, the Board shall recalculate and

14 recertify to the Governor and to each department the amount of

15 the required State contribution to the System for State fiscal

16 year 2011, applying the changes made by Public Act 96-889 to

17 the System's assets and liabilities as of June 30, 2009 as

18 though Public Act 96-889 was approved on that date.

19 On or before May 1, 2019, the Board shall recalculate and

20 recertify to the Governor and the General Assembly the amount

21 of the required State contribution to the System for State

22 fiscal year 2020, taking into account the effect on the

23 System's liabilities of the elections made under Section

24 14-106.5.

25 On or before October 1, 2019, the Board shall recalculate

26 and recertify to the Governor and the General Assembly the

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1 amount of the required State contribution to the System for

2 State fiscal year 2020, taking into account the reduction

3 specified under item (3) of subsection (e) of Section 14-131.

4 (Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;

5 97-694, eff. 6-18-12.)

6 (40 ILCS 5/14-152.1)

7 (Text of Section WITHOUT the changes made by P.A. 98-599,

8 which has been held unconstitutional)

9 Sec. 14-152.1. Application and expiration of new benefit

10 increases.

11 (a) As used in this Section, "new benefit increase" means

12 an increase in the amount of any benefit provided under this

13 Article, or an expansion of the conditions of eligibility for

14 any benefit under this Article, that results from an amendment

15 to this Code that takes effect after June 1, 2005 (the

16 effective date of Public Act 94-4). "New benefit increase",

17 however, does not include any benefit increase resulting from

18 the changes made to this Article by Public Act 96-37 or by this

19 amendatory Act of the 100th General Assembly ~~this amendatory~~

20 ~~Act of the 96th General Assembly~~.

21 (b) Notwithstanding any other provision of this Code or any

22 subsequent amendment to this Code, every new benefit increase

23 is subject to this Section and shall be deemed to be granted

24 only in conformance with and contingent upon compliance with

25 the provisions of this Section.

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1 (c) The Public Act enacting a new benefit increase must

2 identify and provide for payment to the System of additional

3 funding at least sufficient to fund the resulting annual

4 increase in cost to the System as it accrues.

5 Every new benefit increase is contingent upon the General

6 Assembly providing the additional funding required under this

7 subsection. The Commission on Government Forecasting and

8 Accountability shall analyze whether adequate additional

9 funding has been provided for the new benefit increase and

10 shall report its analysis to the Public Pension Division of the

11 Department of Insurance ~~Financial and Professional Regulation~~.

12 A new benefit increase created by a Public Act that does not

13 include the additional funding required under this subsection

14 is null and void. If the Public Pension Division determines

15 that the additional funding provided for a new benefit increase

16 under this subsection is or has become inadequate, it may so

17 certify to the Governor and the State Comptroller and, in the

18 absence of corrective action by the General Assembly, the new

19 benefit increase shall expire at the end of the fiscal year in

20 which the certification is made.

21 (d) Every new benefit increase shall expire 5 years after

22 its effective date or on such earlier date as may be specified

23 in the language enacting the new benefit increase or provided

24 under subsection (c). This does not prevent the General

25 Assembly from extending or re-creating a new benefit increase

26 by law.

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1 (e) Except as otherwise provided in the language creating

2 the new benefit increase, a new benefit increase that expires

3 under this Section continues to apply to persons who applied

4 and qualified for the affected benefit while the new benefit

5 increase was in effect and to the affected beneficiaries and

6 alternate payees of such persons, but does not apply to any

7 other person, including without limitation a person who

8 continues in service after the expiration date and did not

9 apply and qualify for the affected benefit while the new

10 benefit increase was in effect.

11 (Source: P.A. 96-37, eff. 7-13-09.)

12 (40 ILCS 5/15-108.1)

13 Sec. 15-108.1. Tier 1 member; Tier 1 employee.

14 "Tier 1 member": A participant or an annuitant of a

15 retirement annuity under this Article, other than a participant

16 in the self-managed plan under Section 15-158.2, who first

17 became a participant or member before January 1, 2011 under any

18 reciprocal retirement system or pension fund established under

19 this Code, other than a retirement system or pension fund

20 established under Articles 2, 3, 4, 5, 6, or 18 of this Code.

21 "Tier 1 member" includes a person who first became a

22 participant under this System before January 1, 2011 and who

23 accepts a refund and is subsequently reemployed by an employer

24 on or after January 1, 2011.

25 "Tier 1 employee": A Tier 1 member who is a participating

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1 employee, unless he or she is a disability benefit recipient

2 under Section 15-150. However, for the purposes of the election

3 under Section 15-132.9, "Tier 1 employee" does not include an

4 individual who has made an irrevocable election on or before

5 June 1, 2017 to retire from service pursuant to the terms of an

6 employment contract or a collective bargaining agreement in

7 effect on June 1, 2017, excluding any extension, amendment, or

8 renewal of that agreement on or after that date, and has

9 notified the System of that election.

10 (Source: P.A. 98-92, eff. 7-16-13.)

11 (40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)

12 Sec. 15-111. Earnings.

13 (a) "Earnings": Subject to Section 15-111.5, an amount paid

14 for personal services equal to the sum of the basic

15 compensation plus extra compensation for summer teaching,

16 overtime or other extra service. For periods for which an

17 employee receives service credit under subsection (c) of

18 Section 15-113.1 or Section 15-113.2, earnings are equal to the

19 basic compensation on which contributions are paid by the

20 employee during such periods. Compensation for employment

21 which is irregular, intermittent and temporary shall not be

22 considered earnings, unless the participant is also receiving

23 earnings from the employer as an employee under Section 15-107.

24 With respect to transition pay paid by the University of

25 Illinois to a person who was a participating employee employed

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1 in the fire department of the University of Illinois's

2 Champaign-Urbana campus immediately prior to the elimination

3 of that fire department:

4 (1) "Earnings" includes transition pay paid to the

5 employee on or after the effective date of this amendatory

6 Act of the 91st General Assembly.

7 (2) "Earnings" includes transition pay paid to the

8 employee before the effective date of this amendatory Act

9 of the 91st General Assembly only if (i) employee

10 contributions under Section 15-157 have been withheld from

11 that transition pay or (ii) the employee pays to the System

12 before January 1, 2001 an amount representing employee

13 contributions under Section 15-157 on that transition pay.

14 Employee contributions under item (ii) may be paid in a

15 lump sum, by withholding from additional transition pay

16 accruing before January 1, 2001, or in any other manner

17 approved by the System. Upon payment of the employee

18 contributions on transition pay, the corresponding

19 employer contributions become an obligation of the State.

20 (a-5) Notwithstanding any other provision of this Section,

21 "earnings" does not include any future increase in income that

22 is offered for service by an employer to a Tier 1 employee

23 under this Article pursuant to the condition set forth in

24 subsection (c) of Section 15-132.9 and accepted under that

25 condition by a Tier 1 employee who has made the election under

26 paragraph (2) of subsection (a) of Section 15-132.9.

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1 (a-10) Notwithstanding any other provision of this

2 Section, "earnings" does not include any consideration payment

3 made to a Tier 1 employee.

4 (b) For a Tier 2 member, the annual earnings shall not

5 exceed $106,800; however, that amount shall annually

6 thereafter be increased by the lesser of (i) 3% of that amount,

7 including all previous adjustments, or (ii) one half the annual

8 unadjusted percentage increase (but not less than zero) in the

9 consumer price index-u for the 12 months ending with the

10 September preceding each November 1, including all previous

11 adjustments.

12 For the purposes of this Section, "consumer price index u"

13 means the index published by the Bureau of Labor Statistics of

14 the United States Department of Labor that measures the average

15 change in prices of goods and services purchased by all urban

16 consumers, United States city average, all items, 1982-84 =

17 100. The new amount resulting from each annual adjustment shall

18 be determined by the Public Pension Division of the Department

19 of Insurance and made available to the boards of the retirement

20 systems and pension funds by November 1 of each year.

21 (c) With each submission of payroll information in the

22 manner prescribed by the System, the employer shall certify

23 that the payroll information is correct and complies with all

24 applicable State and federal laws.

25 (Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)

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1 (40 ILCS 5/15-112.1 new)

2 Sec. 15-112.1. Future increase in income. "Future increase

3 in income" means an increase to a Tier 1 employee's base pay

4 that is offered by an employer to the Tier 1 employee for

5 service under this Article after June 30, 2018 that qualifies

6 as "earnings", as defined in Section 15-111, or would qualify

7 as "earnings" but for the fact that it was offered to and

8 accepted by the Tier 1 employee under the condition set forth

9 in subsection (c) of Section 15-132.9. The term "future

10 increase in income" includes an increase to a Tier 1 employee's

11 base pay that is paid to the Tier 1 employee pursuant to an

12 extension, amendment, or renewal of any such employment

13 contract or collective bargaining agreement after the

14 effective date of this Section.

15 (40 ILCS 5/15-112.2 new)

16 Sec. 15-112.2. Base pay. As used in Section 15-112.1 of

17 this Code, "base pay" means the greater of either (i) the Tier

18 1 employee's annualized rate of earnings as of June 30, 2018,

19 or (ii) the Tier 1 employee's annualized rate of earnings

20 immediately preceding the expiration, renewal, or amendment of

21 an employment contract or collective bargaining agreement in

22 effect on the effective date of this Section. For a person

23 returning to participating employee status as a Tier 1 employee

24 after June 30, 2018, however, "base pay" means the employee's

25 annualized rate of earnings as of the employee's last date of

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1 service prior to July 1, 2018. The System shall calculate the

2 base pay of each Tier 1 employee pursuant to this Section.

3 (40 ILCS 5/15-132.9 new)

4 Sec. 15-132.9. Election by Tier 1 employees.

5 (a) Each Tier 1 employee shall make an irrevocable election

6 either:

7 (1) to agree to delay his or her eligibility for

8 automatic annual increases in retirement annuity as

9 provided in subsection (d-1) of Section 15-136 and to have

10 the amount of the automatic annual increases in his or her

11 retirement annuity and survivor annuity that are otherwise

12 provided for in this Article calculated, instead, as

13 provided in subsection (d-1) of Section 15-136; or

14 (2) to not agree to the provisions of paragraph (1) of

15 this subsection.

16 The election required under this subsection (a) shall be

17 made by each Tier 1 employee no earlier than January 1, 2018

18 and no later than March 31, 2018, except that:

19 (i) a person who becomes a Tier 1 employee under this

20 Article on or after January 1, 2018 must make the election

21 under this subsection (a) within 60 days after becoming a

22 Tier 1 employee;

23 (ii) a person who returns to participating employee

24 status as a Tier 1 employee under this Article on or after

25 January 1, 2018 and has not yet made an election under this

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1 Section must make the election under this subsection (a)

2 within 60 days after returning to participating employee

3 status as a Tier 1 employee; and

4 (iii) a person who returns to participating employee

5 status as a Tier 1 employee under this Article but who has

6 not made an election under Section 15-134.5 must make the

7 election under this subsection (a) at the same time as the

8 election under Section 15-134.5 and within the timeframes

9 required by that Section.

10 If a Tier 1 employee fails for any reason to make a

11 required election under this subsection within the time

12 specified, then the employee shall be deemed to have made the

13 election under paragraph (2) of this subsection.

14 (a-5) If this Section is enjoined or stayed by an Illinois

15 court or a court of competent jurisdiction pending the entry of

16 a final and unappealable decision, and this Section is

17 determined to be constitutional or otherwise valid by a final

18 unappealable decision of an Illinois court or a court of

19 competent jurisdiction, then the election procedure set forth

20 in subsection (a) of this Section shall commence on the 180th

21 calendar day after the date of the issuance of the final

22 unappealable decision and shall conclude at the end of the

23 270th calendar day after that date.

24 (a-10) All elections under subsection (a) that are made or

25 deemed to be made before July 1, 2018 shall take effect on July

26 1, 2018. Elections that are made or deemed to be made on or

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1 after July 1, 2018 shall take effect on the first day of the

2 month following the month in which the election is made or

3 deemed to be made.

4 (b) As adequate and legal consideration provided under this

5 amendatory Act of the 100th General Assembly for making an

6 election under paragraph (1) of subsection (a) of this Section,

7 the employer shall be expressly and irrevocably prohibited from

8 offering any future increases in income to a Tier 1 employee

9 who has made an election under paragraph (1) of subsection (a)

10 of this Section on the condition of not constituting earnings

11 under Section 15-111.

12 As adequate and legal consideration provided under this

13 amendatory Act of the 100th General Assembly for making an

14 election under paragraph (1) of subsection (a) of this Section,

15 each Tier 1 employee who has made an election under paragraph

16 (1) of subsection (a) of this Section shall receive a

17 consideration payment equal to 10% of the contributions made by

18 or on behalf of the employee under Section 15-157 before the

19 effective date of that election. The State Comptroller shall

20 pay the consideration payment to the Tier 1 employee out of

21 funds appropriated for that purpose under Section 1.9 of the

22 State Pension Funds Continuing Appropriation Act. The System

23 shall calculate the amount of each consideration payment and,

24 by July 1, 2018, shall certify to the State Comptroller the

25 amount of the consideration payment, together with the name,

26 address, and any other available payment information of the

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1 Tier 1 employee as found in the records of the System. The

2 System shall make additional calculations and certifications

3 of consideration payments to the State Comptroller as the

4 System deems necessary.

5 (c) A Tier 1 employee who makes the election under

6 paragraph (2) of subsection (a) of this Section shall not be

7 subject to paragraph (1) of subsection (a) of this Section.

8 However, each future increase in income offered by an employer

9 under this Article to a Tier 1 employee who has made the

10 election under paragraph (2) of subsection (a) of this Section

11 shall be offered by the employer expressly and irrevocably on

12 the condition of not constituting earnings under Section 15-111

13 and that the Tier 1 employee's acceptance of the offered future

14 increase in income shall constitute his or her agreement to

15 that condition.

16 (d) The System shall make a good faith effort to contact

17 each Tier 1 employee subject to this Section. The System shall

18 mail information describing the required election to each Tier

19 1 employee by United States Postal Service mail to his or her

20 last known address on file with the System. If the Tier 1

21 employee is not responsive to other means of contact, it is

22 sufficient for the System to publish the details of any

23 required elections on its website or to publish those details

24 in a regularly published newsletter or other existing public

25 forum.

26 Tier 1 employees who are subject to this Section shall be

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1 provided with an election packet containing information

2 regarding their options, as well as the forms necessary to make

3 the required election. Upon request, the System shall offer

4 Tier 1 employees an opportunity to receive information from the

5 System before making the required election. The information may

6 consist of video materials, benefit estimators, group

7 presentations, individual consultation with a member or

8 authorized representative of the System in person or by

9 telephone or other electronic means, or any combination of

10 these methods. The System shall not provide advice or

11 counseling with respect to which election a Tier 1 employee

12 should make or specific to the legal or tax circumstances of or

13 consequences to the Tier 1 employee.

14 The System shall inform Tier 1 employees in the election

15 packet required under this subsection that the Tier 1 employee

16 may also wish to obtain information and counsel relating to the

17 election required under this Section from any other available

18 source, including, but not limited to, labor organizations and

19 private counsel.

20 In no event shall the System, its staff, or the Board be

21 held liable for any information given to a member regarding the

22 elections under this Section. The System shall coordinate with

23 the Illinois Department of Central Management Services and each

24 other retirement system administering an election in

25 accordance with this amendatory Act of the 100th General

26 Assembly to provide information concerning the impact of the

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1 election set forth in this Section.

2 (e) Notwithstanding any other provision of law, an employer

3 under this Article is required to offer each future increase in

4 income expressly and irrevocably on the condition of not

5 constituting "earnings" under Section 15-111 to any Tier 1

6 employee who has made an election under paragraph (2) of

7 subsection (a) of this Section. The offer shall also provide

8 that the Tier 1 employee's acceptance of the offered future

9 increase in income shall constitute his or her agreement to the

10 condition set forth in this subsection.

11 For purposes of legislative intent, the condition set forth

12 in this subsection shall be construed in a manner that ensures

13 that the condition is not violated or circumvented through any

14 contrivance of any kind.

15 (f) A member's election under this Section is not a

16 prohibited election under subdivision (j)(1) of Section 1-119

17 of this Code.

18 (g) No provision of this Section shall be interpreted in a

19 way that would cause the System to cease to be a qualified plan

20 under Section 401(a) of the Internal Revenue Code of 1986.

21 (h) If an election created by this amendatory Act in any

22 other Article of this Code or any change deriving from that

23 election is determined to be unconstitutional or otherwise

24 invalid by a final unappealable decision of an Illinois court

25 or a court of competent jurisdiction, the invalidity of that

26 provision shall not in any way affect the validity of this

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1 Section or the changes deriving from the election required

2 under this Section.

3 (40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)

4 (Text of Section WITHOUT the changes made by P.A. 98-599,

5 which has been held unconstitutional)

6 Sec. 15-136. Retirement annuities - Amount. The provisions

7 of this Section 15-136 apply only to those participants who are

8 participating in the traditional benefit package or the

9 portable benefit package and do not apply to participants who

10 are participating in the self-managed plan.

11 (a) The amount of a participant's retirement annuity,

12 expressed in the form of a single-life annuity, shall be

13 determined by whichever of the following rules is applicable

14 and provides the largest annuity:

15 Rule 1: The retirement annuity shall be 1.67% of final rate

16 of earnings for each of the first 10 years of service, 1.90%

17 for each of the next 10 years of service, 2.10% for each year

18 of service in excess of 20 but not exceeding 30, and 2.30% for

19 each year in excess of 30; or for persons who retire on or

20 after January 1, 1998, 2.2% of the final rate of earnings for

21 each year of service.

22 Rule 2: The retirement annuity shall be the sum of the

23 following, determined from amounts credited to the participant

24 in accordance with the actuarial tables and the effective rate

25 of interest in effect at the time the retirement annuity

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1 begins:

2 (i) the normal annuity which can be provided on an

3 actuarially equivalent basis, by the accumulated normal

4 contributions as of the date the annuity begins;

5 (ii) an annuity from employer contributions of an

6 amount equal to that which can be provided on an

7 actuarially equivalent basis from the accumulated normal

8 contributions made by the participant under Section

9 15-113.6 and Section 15-113.7 plus 1.4 times all other

10 accumulated normal contributions made by the participant;

11 and

12 (iii) the annuity that can be provided on an

13 actuarially equivalent basis from the entire contribution

14 made by the participant under Section 15-113.3.

15 With respect to a police officer or firefighter who retires

16 on or after August 14, 1998, the accumulated normal

17 contributions taken into account under clauses (i) and (ii) of

18 this Rule 2 shall include the additional normal contributions

19 made by the police officer or firefighter under Section

20 15-157(a).

21 The amount of a retirement annuity calculated under this

22 Rule 2 shall be computed solely on the basis of the

23 participant's accumulated normal contributions, as specified

24 in this Rule and defined in Section 15-116. Neither an employee

25 or employer contribution for early retirement under Section

26 15-136.2 nor any other employer contribution shall be used in

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1 the calculation of the amount of a retirement annuity under

2 this Rule 2.

3 This amendatory Act of the 91st General Assembly is a

4 clarification of existing law and applies to every participant

5 and annuitant without regard to whether status as an employee

6 terminates before the effective date of this amendatory Act.

7 This Rule 2 does not apply to a person who first becomes an

8 employee under this Article on or after July 1, 2005.

9 Rule 3: The retirement annuity of a participant who is

10 employed at least one-half time during the period on which his

11 or her final rate of earnings is based, shall be equal to the

12 participant's years of service not to exceed 30, multiplied by

13 (1) $96 if the participant's final rate of earnings is less

14 than $3,500, (2) $108 if the final rate of earnings is at least

15 $3,500 but less than $4,500, (3) $120 if the final rate of

16 earnings is at least $4,500 but less than $5,500, (4) $132 if

17 the final rate of earnings is at least $5,500 but less than

18 $6,500, (5) $144 if the final rate of earnings is at least

19 $6,500 but less than $7,500, (6) $156 if the final rate of

20 earnings is at least $7,500 but less than $8,500, (7) $168 if

21 the final rate of earnings is at least $8,500 but less than

22 $9,500, and (8) $180 if the final rate of earnings is $9,500 or

23 more, except that the annuity for those persons having made an

24 election under Section 15-154(a-1) shall be calculated and

25 payable under the portable retirement benefit program pursuant

26 to the provisions of Section 15-136.4.

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1 Rule 4: A participant who is at least age 50 and has 25 or

2 more years of service as a police officer or firefighter, and a

3 participant who is age 55 or over and has at least 20 but less

4 than 25 years of service as a police officer or firefighter,

5 shall be entitled to a retirement annuity of 2 1/4% of the

6 final rate of earnings for each of the first 10 years of

7 service as a police officer or firefighter, 2 1/2% for each of

8 the next 10 years of service as a police officer or

9 firefighter, and 2 3/4% for each year of service as a police

10 officer or firefighter in excess of 20. The retirement annuity

11 for all other service shall be computed under Rule 1. A Tier 2

12 member is eligible for a retirement annuity calculated under

13 Rule 4 only if that Tier 2 member meets the service

14 requirements for that benefit calculation as prescribed under

15 this Rule 4 in addition to the applicable age requirement under

16 subsection (a-5) of Section 15-135.

17 For purposes of this Rule 4, a participant's service as a

18 firefighter shall also include the following:

19 (i) service that is performed while the person is an

20 employee under subsection (h) of Section 15-107; and

21 (ii) in the case of an individual who was a

22 participating employee employed in the fire department of

23 the University of Illinois's Champaign-Urbana campus

24 immediately prior to the elimination of that fire

25 department and who immediately after the elimination of

26 that fire department transferred to another job with the

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1 University of Illinois, service performed as an employee of

2 the University of Illinois in a position other than police

3 officer or firefighter, from the date of that transfer

4 until the employee's next termination of service with the

5 University of Illinois.

6 (b) For a Tier 1 member, the retirement annuity provided

7 under Rules 1 and 3 above shall be reduced by 1/2 of 1% for each

8 month the participant is under age 60 at the time of

9 retirement. However, this reduction shall not apply in the

10 following cases:

11 (1) For a disabled participant whose disability

12 benefits have been discontinued because he or she has

13 exhausted eligibility for disability benefits under clause

14 (6) of Section 15-152;

15 (2) For a participant who has at least the number of

16 years of service required to retire at any age under

17 subsection (a) of Section 15-135; or

18 (3) For that portion of a retirement annuity which has

19 been provided on account of service of the participant

20 during periods when he or she performed the duties of a

21 police officer or firefighter, if these duties were

22 performed for at least 5 years immediately preceding the

23 date the retirement annuity is to begin.

24 (b-5) The retirement annuity of a Tier 2 member who is

25 retiring after attaining age 62 with at least 10 years of

26 service credit shall be reduced by 1/2 of 1% for each full

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1 month that the member's age is under age 67.

2 (c) The maximum retirement annuity provided under Rules 1,

3 2, 4, and 5 shall be the lesser of (1) the annual limit of

4 benefits as specified in Section 415 of the Internal Revenue

5 Code of 1986, as such Section may be amended from time to time

6 and as such benefit limits shall be adjusted by the

7 Commissioner of Internal Revenue, and (2) 80% of final rate of

8 earnings.

9 (d) Subject to the provisions of subsection (d-1), a ~~A~~ Tier

10 1 member whose status as an employee terminates after August

11 14, 1969 shall receive automatic increases in his or her

12 retirement annuity as follows:

13 Effective January 1 immediately following the date the

14 retirement annuity begins, the annuitant shall receive an

15 increase in his or her monthly retirement annuity of 0.125% of

16 the monthly retirement annuity provided under Rule 1, Rule 2,

17 Rule 3, or Rule 4 contained in this Section, multiplied by the

18 number of full months which elapsed from the date the

19 retirement annuity payments began to January 1, 1972, plus

20 0.1667% of such annuity, multiplied by the number of full

21 months which elapsed from January 1, 1972, or the date the

22 retirement annuity payments began, whichever is later, to

23 January 1, 1978, plus 0.25% of such annuity multiplied by the

24 number of full months which elapsed from January 1, 1978, or

25 the date the retirement annuity payments began, whichever is

26 later, to the effective date of the increase.

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1 The annuitant shall receive an increase in his or her

2 monthly retirement annuity on each January 1 thereafter during

3 the annuitant's life of 3% of the monthly annuity provided

4 under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this

5 Section. The change made under this subsection by P.A. 81-970

6 is effective January 1, 1980 and applies to each annuitant

7 whose status as an employee terminates before or after that

8 date.

9 Beginning January 1, 1990, and except as provided in

10 subsection (d-1),all automatic annual increases payable under

11 this Section shall be calculated as a percentage of the total

12 annuity payable at the time of the increase, including all

13 increases previously granted under this Article.

14 The change made in this subsection by P.A. 85-1008 is

15 effective January 26, 1988, and is applicable without regard to

16 whether status as an employee terminated before that date.

17 (d-1) Notwithstanding any other provision of this Article,

18 for a Tier 1 employee who made the election under paragraph (1)

19 of subsection (a) of Section 15-132.9:

20 (1) The initial increase in retirement annuity under

21 this Section shall occur on the January 1 occurring either

22 on or after the attainment of age 67 or the fifth

23 anniversary of the annuity start date, whichever is

24 earlier.

25 (2) The amount of each automatic annual increase in

26 retirement annuity or survivor annuity occurring on or

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1 after the effective date of that election shall be

2 calculated as a percentage of the originally granted

3 retirement annuity or survivor annuity, equal to 3% or

4 one-half the annual unadjusted percentage increase (but

5 not less than zero) in the consumer price index-u for the

6 12 months ending with the September preceding each November

7 1, whichever is less. If the annual unadjusted percentage

8 change in the consumer price index-u for the 12 months

9 ending with the September preceding each November 1 is zero

10 or there is a decrease, then the annuity shall not be

11 increased.

12 For the purposes of this Section, "consumer price index-u"

13 means the index published by the Bureau of Labor Statistics of

14 the United States Department of Labor that measures the average

15 change in prices of goods and services purchased by all urban

16 consumers, United States city average, all items, 1982-84 =

17 100. The new amount resulting from each annual adjustment shall

18 be determined by the Public Pension Division of the Department

19 of Insurance and made available to the board of the retirement

20 system by November 1 of each year.

21 (d-5) A retirement annuity of a Tier 2 member shall receive

22 annual increases on the January 1 occurring either on or after

23 the attainment of age 67 or the first anniversary of the

24 annuity start date, whichever is later. Each annual increase

25 shall be calculated at 3% or one half the annual unadjusted

26 percentage increase (but not less than zero) in the consumer

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1 price index-u for the 12 months ending with the September

2 preceding each November 1, whichever is less, of the originally

3 granted retirement annuity. If the annual unadjusted

4 percentage change in the consumer price index-u for the 12

5 months ending with the September preceding each November 1 is

6 zero or there is a decrease, then the annuity shall not be

7 increased.

8 (e) If, on January 1, 1987, or the date the retirement

9 annuity payment period begins, whichever is later, the sum of

10 the retirement annuity provided under Rule 1 or Rule 2 of this

11 Section and the automatic annual increases provided under the

12 preceding subsection or Section 15-136.1, amounts to less than

13 the retirement annuity which would be provided by Rule 3, the

14 retirement annuity shall be increased as of January 1, 1987, or

15 the date the retirement annuity payment period begins,

16 whichever is later, to the amount which would be provided by

17 Rule 3 of this Section. Such increased amount shall be

18 considered as the retirement annuity in determining benefits

19 provided under other Sections of this Article. This paragraph

20 applies without regard to whether status as an employee

21 terminated before the effective date of this amendatory Act of

22 1987, provided that the annuitant was employed at least

23 one-half time during the period on which the final rate of

24 earnings was based.

25 (f) A participant is entitled to such additional annuity as

26 may be provided on an actuarially equivalent basis, by any

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1 accumulated additional contributions to his or her credit.

2 However, the additional contributions made by the participant

3 toward the automatic increases in annuity provided under this

4 Section shall not be taken into account in determining the

5 amount of such additional annuity.

6 (g) If, (1) by law, a function of a governmental unit, as

7 defined by Section 20-107 of this Code, is transferred in whole

8 or in part to an employer, and (2) a participant transfers

9 employment from such governmental unit to such employer within

10 6 months after the transfer of the function, and (3) the sum of

11 (A) the annuity payable to the participant under Rule 1, 2, or

12 3 of this Section (B) all proportional annuities payable to the

13 participant by all other retirement systems covered by Article

14 20, and (C) the initial primary insurance amount to which the

15 participant is entitled under the Social Security Act, is less

16 than the retirement annuity which would have been payable if

17 all of the participant's pension credits validated under

18 Section 20-109 had been validated under this system, a

19 supplemental annuity equal to the difference in such amounts

20 shall be payable to the participant.

21 (h) On January 1, 1981, an annuitant who was receiving a

22 retirement annuity on or before January 1, 1971 shall have his

23 or her retirement annuity then being paid increased $1 per

24 month for each year of creditable service. On January 1, 1982,

25 an annuitant whose retirement annuity began on or before

26 January 1, 1977, shall have his or her retirement annuity then

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1 being paid increased $1 per month for each year of creditable

2 service.

3 (i) On January 1, 1987, any annuitant whose retirement

4 annuity began on or before January 1, 1977, shall have the

5 monthly retirement annuity increased by an amount equal to 8�

6 per year of creditable service times the number of years that

7 have elapsed since the annuity began.

8 (Source: P.A. 97-933, eff. 8-10-12; 97-968, eff. 8-16-12;

9 98-92, eff. 7-16-13.)

10 (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)

11 Sec. 15-155. Employer contributions.

12 (a) The State of Illinois shall make contributions by

13 appropriations of amounts which, together with the other

14 employer contributions from trust, federal, and other funds,

15 employee contributions, income from investments, and other

16 income of this System, will be sufficient to meet the cost of

17 maintaining and administering the System on a 90% funded basis

18 in accordance with actuarial recommendations.

19 The Board shall determine the amount of State contributions

20 required for each fiscal year on the basis of the actuarial

21 tables and other assumptions adopted by the Board and the

22 recommendations of the actuary, using the formula in subsection

23 (a-1).

24 (a-1) For State fiscal years 2012 through 2045 (except as

25 otherwise provided for fiscal year 2019), the minimum

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1 contribution to the System to be made by the State for each

2 fiscal year shall be an amount determined by the System to be

3 sufficient to bring the total assets of the System up to 90% of

4 the total actuarial liabilities of the System by the end of

5 State fiscal year 2045. In making these determinations, the

6 required State contribution shall be calculated each year as a

7 level percentage of payroll over the years remaining to and

8 including fiscal year 2045 and shall be determined under the

9 projected unit credit actuarial cost method.

10 For State fiscal year 2019:

11 (1) The initial calculation and certification shall be

12 based on the amount determined above.

13 (2) For purposes of the recertification due on or

14 before May 1, 2018, the recalculation of the required State

15 contribution for fiscal year 2019 shall take into account

16 the effect on the System's liabilities of the elections

17 made under Section 15-132.9.

18 (3) For purposes of the recertification due on or

19 before October 1, 2018, the total required State

20 contribution for fiscal year 2019 shall be reduced by the

21 amount of the consideration payments made to Tier 1

22 employees who made the election under paragraph (1) of

23 subsection (a) of Section 15-132.9.

24 For State fiscal years 1996 through 2005, the State

25 contribution to the System, as a percentage of the applicable

26 employee payroll, shall be increased in equal annual increments

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1 so that by State fiscal year 2011, the State is contributing at

2 the rate required under this Section.

3 Notwithstanding any other provision of this Article, the

4 total required State contribution for State fiscal year 2006 is

5 $166,641,900.

6 Notwithstanding any other provision of this Article, the

7 total required State contribution for State fiscal year 2007 is

8 $252,064,100.

9 For each of State fiscal years 2008 through 2009, the State

10 contribution to the System, as a percentage of the applicable

11 employee payroll, shall be increased in equal annual increments

12 from the required State contribution for State fiscal year

13 2007, so that by State fiscal year 2011, the State is

14 contributing at the rate otherwise required under this Section.

15 Notwithstanding any other provision of this Article, the

16 total required State contribution for State fiscal year 2010 is

17 $702,514,000 and shall be made from the State Pensions Fund and

18 proceeds of bonds sold in fiscal year 2010 pursuant to Section

19 7.2 of the General Obligation Bond Act, less (i) the pro rata

20 share of bond sale expenses determined by the System's share of

21 total bond proceeds, (ii) any amounts received from the General

22 Revenue Fund in fiscal year 2010, (iii) any reduction in bond

23 proceeds due to the issuance of discounted bonds, if

24 applicable.

25 Notwithstanding any other provision of this Article, the

26 total required State contribution for State fiscal year 2011 is

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1 the amount recertified by the System on or before April 1, 2011

2 pursuant to Section 15-165 and shall be made from the State

3 Pensions Fund and proceeds of bonds sold in fiscal year 2011

4 pursuant to Section 7.2 of the General Obligation Bond Act,

5 less (i) the pro rata share of bond sale expenses determined by

6 the System's share of total bond proceeds, (ii) any amounts

7 received from the General Revenue Fund in fiscal year 2011, and

8 (iii) any reduction in bond proceeds due to the issuance of

9 discounted bonds, if applicable.

10 Beginning in State fiscal year 2046, the minimum State

11 contribution for each fiscal year shall be the amount needed to

12 maintain the total assets of the System at 90% of the total

13 actuarial liabilities of the System.

14 Amounts received by the System pursuant to Section 25 of

15 the Budget Stabilization Act or Section 8.12 of the State

16 Finance Act in any fiscal year do not reduce and do not

17 constitute payment of any portion of the minimum State

18 contribution required under this Article in that fiscal year.

19 Such amounts shall not reduce, and shall not be included in the

20 calculation of, the required State contributions under this

21 Article in any future year until the System has reached a

22 funding ratio of at least 90%. A reference in this Article to

23 the "required State contribution" or any substantially similar

24 term does not include or apply to any amounts payable to the

25 System under Section 25 of the Budget Stabilization Act.

26 Notwithstanding any other provision of this Section, the

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1 required State contribution for State fiscal year 2005 and for

2 fiscal year 2008 and each fiscal year thereafter, as calculated

3 under this Section and certified under Section 15-165, shall

4 not exceed an amount equal to (i) the amount of the required

5 State contribution that would have been calculated under this

6 Section for that fiscal year if the System had not received any

7 payments under subsection (d) of Section 7.2 of the General

8 Obligation Bond Act, minus (ii) the portion of the State's

9 total debt service payments for that fiscal year on the bonds

10 issued in fiscal year 2003 for the purposes of that Section

11 7.2, as determined and certified by the Comptroller, that is

12 the same as the System's portion of the total moneys

13 distributed under subsection (d) of Section 7.2 of the General

14 Obligation Bond Act. In determining this maximum for State

15 fiscal years 2008 through 2010, however, the amount referred to

16 in item (i) shall be increased, as a percentage of the

17 applicable employee payroll, in equal increments calculated

18 from the sum of the required State contribution for State

19 fiscal year 2007 plus the applicable portion of the State's

20 total debt service payments for fiscal year 2007 on the bonds

21 issued in fiscal year 2003 for the purposes of Section 7.2 of

22 the General Obligation Bond Act, so that, by State fiscal year

23 2011, the State is contributing at the rate otherwise required

24 under this Section.

25 (b) If an employee is paid from trust or federal funds, the

26 employer shall pay to the Board contributions from those funds

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1 which are sufficient to cover the accruing normal costs on

2 behalf of the employee. However, universities having employees

3 who are compensated out of local auxiliary funds, income funds,

4 or service enterprise funds are not required to pay such

5 contributions on behalf of those employees. The local auxiliary

6 funds, income funds, and service enterprise funds of

7 universities shall not be considered trust funds for the

8 purpose of this Article, but funds of alumni associations,

9 foundations, and athletic associations which are affiliated

10 with the universities included as employers under this Article

11 and other employers which do not receive State appropriations

12 are considered to be trust funds for the purpose of this

13 Article.

14 (b-1) The City of Urbana and the City of Champaign shall

15 each make employer contributions to this System for their

16 respective firefighter employees who participate in this

17 System pursuant to subsection (h) of Section 15-107. The rate

18 of contributions to be made by those municipalities shall be

19 determined annually by the Board on the basis of the actuarial

20 assumptions adopted by the Board and the recommendations of the

21 actuary, and shall be expressed as a percentage of salary for

22 each such employee. The Board shall certify the rate to the

23 affected municipalities as soon as may be practical. The

24 employer contributions required under this subsection shall be

25 remitted by the municipality to the System at the same time and

26 in the same manner as employee contributions.

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1 (c) Through State fiscal year 1995: The total employer

2 contribution shall be apportioned among the various funds of

3 the State and other employers, whether trust, federal, or other

4 funds, in accordance with actuarial procedures approved by the

5 Board. State of Illinois contributions for employers receiving

6 State appropriations for personal services shall be payable

7 from appropriations made to the employers or to the System. The

8 contributions for Class I community colleges covering earnings

9 other than those paid from trust and federal funds, shall be

10 payable solely from appropriations to the Illinois Community

11 College Board or the System for employer contributions.

12 (d) Beginning in State fiscal year 1996, the required State

13 contributions to the System shall be appropriated directly to

14 the System and shall be payable through vouchers issued in

15 accordance with subsection (c) of Section 15-165, except as

16 provided in subsection (g).

17 (e) The State Comptroller shall draw warrants payable to

18 the System upon proper certification by the System or by the

19 employer in accordance with the appropriation laws and this

20 Code.

21 (f) Normal costs under this Section means liability for

22 pensions and other benefits which accrues to the System because

23 of the credits earned for service rendered by the participants

24 during the fiscal year and expenses of administering the

25 System, but shall not include the principal of or any

26 redemption premium or interest on any bonds issued by the Board

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1 or any expenses incurred or deposits required in connection

2 therewith.

3 (g) If the amount of a participant's earnings for any

4 academic year used to determine the final rate of earnings,

5 determined on a full-time equivalent basis, exceeds the amount

6 of his or her earnings with the same employer for the previous

7 academic year, determined on a full-time equivalent basis, by

8 more than 6%, the participant's employer shall pay to the

9 System, in addition to all other payments required under this

10 Section and in accordance with guidelines established by the

11 System, the present value of the increase in benefits resulting

12 from the portion of the increase in earnings that is in excess

13 of 6%. This present value shall be computed by the System on

14 the basis of the actuarial assumptions and tables used in the

15 most recent actuarial valuation of the System that is available

16 at the time of the computation. The System may require the

17 employer to provide any pertinent information or

18 documentation.

19 Whenever it determines that a payment is or may be required

20 under this subsection (g), the System shall calculate the

21 amount of the payment and bill the employer for that amount.

22 The bill shall specify the calculations used to determine the

23 amount due. If the employer disputes the amount of the bill, it

24 may, within 30 days after receipt of the bill, apply to the

25 System in writing for a recalculation. The application must

26 specify in detail the grounds of the dispute and, if the

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1 employer asserts that the calculation is subject to subsection

2 (h) or (i) of this Section, must include an affidavit setting

3 forth and attesting to all facts within the employer's

4 knowledge that are pertinent to the applicability of subsection

5 (h) or (i). Upon receiving a timely application for

6 recalculation, the System shall review the application and, if

7 appropriate, recalculate the amount due.

8 The employer contributions required under this subsection

9 (g) may be paid in the form of a lump sum within 90 days after

10 receipt of the bill. If the employer contributions are not paid

11 within 90 days after receipt of the bill, then interest will be

12 charged at a rate equal to the System's annual actuarially

13 assumed rate of return on investment compounded annually from

14 the 91st day after receipt of the bill. Payments must be

15 concluded within 3 years after the employer's receipt of the

16 bill.

17 When assessing payment for any amount due under this

18 subsection (g), the System shall include earnings, to the

19 extent not established by a participant under Section 15-113.11

20 or 15-113.12, that would have been paid to the participant had

21 the participant not taken (i) periods of voluntary or

22 involuntary furlough occurring on or after July 1, 2015 and on

23 or before June 30, 2017 or (ii) periods of voluntary pay

24 reduction in lieu of furlough occurring on or after July 1,

25 2015 and on or before June 30, 2017. Determining earnings that

26 would have been paid to a participant had the participant not

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1 taken periods of voluntary or involuntary furlough or periods

2 of voluntary pay reduction shall be the responsibility of the

3 employer, and shall be reported in a manner prescribed by the

4 System.

5 (h) This subsection (h) applies only to payments made or

6 salary increases given on or after June 1, 2005 but before July

7 1, 2011. The changes made by Public Act 94-1057 shall not

8 require the System to refund any payments received before July

9 31, 2006 (the effective date of Public Act 94-1057).

10 When assessing payment for any amount due under subsection

11 (g), the System shall exclude earnings increases paid to

12 participants under contracts or collective bargaining

13 agreements entered into, amended, or renewed before June 1,

14 2005.

15 When assessing payment for any amount due under subsection

16 (g), the System shall exclude earnings increases paid to a

17 participant at a time when the participant is 10 or more years

18 from retirement eligibility under Section 15-135.

19 When assessing payment for any amount due under subsection

20 (g), the System shall exclude earnings increases resulting from

21 overload work, including a contract for summer teaching, or

22 overtime when the employer has certified to the System, and the

23 System has approved the certification, that: (i) in the case of

24 overloads (A) the overload work is for the sole purpose of

25 academic instruction in excess of the standard number of

26 instruction hours for a full-time employee occurring during the

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1 academic year that the overload is paid and (B) the earnings

2 increases are equal to or less than the rate of pay for

3 academic instruction computed using the participant's current

4 salary rate and work schedule; and (ii) in the case of

5 overtime, the overtime was necessary for the educational

6 mission.

7 When assessing payment for any amount due under subsection

8 (g), the System shall exclude any earnings increase resulting

9 from (i) a promotion for which the employee moves from one

10 classification to a higher classification under the State

11 Universities Civil Service System, (ii) a promotion in academic

12 rank for a tenured or tenure-track faculty position, or (iii) a

13 promotion that the Illinois Community College Board has

14 recommended in accordance with subsection (k) of this Section.

15 These earnings increases shall be excluded only if the

16 promotion is to a position that has existed and been filled by

17 a member for no less than one complete academic year and the

18 earnings increase as a result of the promotion is an increase

19 that results in an amount no greater than the average salary

20 paid for other similar positions.

21 (i) When assessing payment for any amount due under

22 subsection (g), the System shall exclude any salary increase

23 described in subsection (h) of this Section given on or after

24 July 1, 2011 but before July 1, 2014 under a contract or

25 collective bargaining agreement entered into, amended, or

26 renewed on or after June 1, 2005 but before July 1, 2011.

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1 Notwithstanding any other provision of this Section, any

2 payments made or salary increases given after June 30, 2014

3 shall be used in assessing payment for any amount due under

4 subsection (g) of this Section.

5 (j) The System shall prepare a report and file copies of

6 the report with the Governor and the General Assembly by

7 January 1, 2007 that contains all of the following information:

8 (1) The number of recalculations required by the

9 changes made to this Section by Public Act 94-1057 for each

10 employer.

11 (2) The dollar amount by which each employer's

12 contribution to the System was changed due to

13 recalculations required by Public Act 94-1057.

14 (3) The total amount the System received from each

15 employer as a result of the changes made to this Section by

16 Public Act 94-4.

17 (4) The increase in the required State contribution

18 resulting from the changes made to this Section by Public

19 Act 94-1057.

20 (k) The Illinois Community College Board shall adopt rules

21 for recommending lists of promotional positions submitted to

22 the Board by community colleges and for reviewing the

23 promotional lists on an annual basis. When recommending

24 promotional lists, the Board shall consider the similarity of

25 the positions submitted to those positions recognized for State

26 universities by the State Universities Civil Service System.

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1 The Illinois Community College Board shall file a copy of its

2 findings with the System. The System shall consider the

3 findings of the Illinois Community College Board when making

4 determinations under this Section. The System shall not exclude

5 any earnings increases resulting from a promotion when the

6 promotion was not submitted by a community college. Nothing in

7 this subsection (k) shall require any community college to

8 submit any information to the Community College Board.

9 (l) For purposes of determining the required State

10 contribution to the System, the value of the System's assets

11 shall be equal to the actuarial value of the System's assets,

12 which shall be calculated as follows:

13 As of June 30, 2008, the actuarial value of the System's

14 assets shall be equal to the market value of the assets as of

15 that date. In determining the actuarial value of the System's

16 assets for fiscal years after June 30, 2008, any actuarial

17 gains or losses from investment return incurred in a fiscal

18 year shall be recognized in equal annual amounts over the

19 5-year period following that fiscal year.

20 (m) For purposes of determining the required State

21 contribution to the system for a particular year, the actuarial

22 value of assets shall be assumed to earn a rate of return equal

23 to the system's actuarially assumed rate of return.

24 (n) If Section 15-132.9 is determined to be

25 unconstitutional or otherwise invalid by a final unappealable

26 decision of an Illinois court or a court of competent

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1 jurisdiction, then the changes made to this Section by this

2 amendatory Act of the 100th General Assembly shall not take

3 effect and are repealed by operation of law.

4 (Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;

5 99-897, eff. 1-1-17.)

6 (40 ILCS 5/15-157) (from Ch. 108 1/2, par. 15-157)

7 Sec. 15-157. Employee Contributions.

8 (a) Each participating employee shall make contributions

9 towards the retirement benefits payable under the retirement

10 program applicable to the employee from each payment of

11 earnings applicable to employment under this system on and

12 after the date of becoming a participant as follows: Prior to

13 September 1, 1949, 3 1/2% of earnings; from September 1, 1949

14 to August 31, 1955, 5%; from September 1, 1955 to August 31,

15 1969, 6%; from September 1, 1969, 6 1/2%. These contributions

16 are to be considered as normal contributions for purposes of

17 this Article.

18 Each participant who is a police officer or firefighter

19 shall make normal contributions of 8% of each payment of

20 earnings applicable to employment as a police officer or

21 firefighter under this system on or after September 1, 1981,

22 unless he or she files with the board within 60 days after the

23 effective date of this amendatory Act of 1991 or 60 days after

24 the board receives notice that he or she is employed as a

25 police officer or firefighter, whichever is later, a written

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1 notice waiving the retirement formula provided by Rule 4 of

2 Section 15-136. This waiver shall be irrevocable. If a

3 participant had met the conditions set forth in Section

4 15-132.1 prior to the effective date of this amendatory Act of

5 1991 but failed to make the additional normal contributions

6 required by this paragraph, he or she may elect to pay the

7 additional contributions plus compound interest at the

8 effective rate. If such payment is received by the board, the

9 service shall be considered as police officer service in

10 calculating the retirement annuity under Rule 4 of Section

11 15-136. While performing service described in clause (i) or

12 (ii) of Rule 4 of Section 15-136, a participating employee

13 shall be deemed to be employed as a firefighter for the purpose

14 of determining the rate of employee contributions under this

15 Section.

16 (b) Starting September 1, 1969, each participating

17 employee shall make additional contributions of 1/2 of 1% of

18 earnings to finance a portion of the cost of the annual

19 increases in retirement annuity provided under Section 15-136,

20 except that with respect to participants in the self-managed

21 plan this additional contribution shall be used to finance the

22 benefits obtained under that retirement program. Beginning

23 July 1, 2018 or the effective date of the Tier 1 employee's

24 election under paragraph (1) of subsection (a) of Section

25 15-132.9, whichever is later, each Tier 1 employee who made the

26 election under paragraph (1) of subsection (a) of Section

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1 15-132.9 is no longer required to make contributions under this

2 subsection.

3 (c) Except as provided in subsection (c-5), in ~~In~~ addition

4 to the amounts described in subsections (a) and (b) of this

5 Section, each participating employee shall make contributions

6 of 1% of earnings applicable under this system on and after

7 August 1, 1959. The contributions made under this subsection

8 (c) shall be considered as survivor's insurance contributions

9 for purposes of this Article if the employee is covered under

10 the traditional benefit package, and such contributions shall

11 be considered as additional contributions for purposes of this

12 Article if the employee is participating in the self-managed

13 plan or has elected to participate in the portable benefit

14 package and has completed the applicable one-year waiting

15 period. Contributions in excess of $80 during any fiscal year

16 beginning before August 31, 1969 and in excess of $120 during

17 any fiscal year thereafter until September 1, 1971 shall be

18 considered as additional contributions for purposes of this

19 Article.

20 (c-5) Beginning July 1, 2018 or the effective date of the

21 Tier 1 employee's election under paragraph (1) of subsection

22 (a) of Section 15-132.9, whichever is later, in lieu of the

23 contributions otherwise required under subsection (c), each

24 Tier 1 employee who made the election under paragraph (1) of

25 subsection (a) of Section 15-132.9 shall make contributions of

26 0.7% of earnings applicable under this System and each Tier 1

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1 employee who is a police officer or firefighter who makes

2 normal contributions of 8% of each payment of earnings

3 applicable to employment as a police officer or firefighter

4 under this System and who made the election under paragraph (1)

5 of subsection (a) of Section 15-132.9 shall make contributions

6 of 0.55% of earnings applicable under this System. The

7 contributions made under this subsection (c-5) shall be

8 considered as survivor's insurance contributions for purposes

9 of this Article and such contributions shall be considered as

10 additional contributions for purposes of this Article if the

11 employee has elected to participate in the portable benefit

12 package and has completed the applicable one-year waiting

13 period.

14 (d) If the board by board rule so permits and subject to

15 such conditions and limitations as may be specified in its

16 rules, a participant may make other additional contributions of

17 such percentage of earnings or amounts as the participant shall

18 elect in a written notice thereof received by the board.

19 (e) That fraction of a participant's total accumulated

20 normal contributions, the numerator of which is equal to the

21 number of years of service in excess of that which is required

22 to qualify for the maximum retirement annuity, and the

23 denominator of which is equal to the total service of the

24 participant, shall be considered as accumulated additional

25 contributions. The determination of the applicable maximum

26 annuity and the adjustment in contributions required by this

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1 provision shall be made as of the date of the participant's

2 retirement.

3 (f) Notwithstanding the foregoing, a participating

4 employee shall not be required to make contributions under this

5 Section after the date upon which continuance of such

6 contributions would otherwise cause his or her retirement

7 annuity to exceed the maximum retirement annuity as specified

8 in clause (1) of subsection (c) of Section 15-136.

9 (g) A participant may make contributions for the purchase

10 of service credit under this Article; however, only a

11 participating employee may make optional contributions under

12 subsection (b) of Section 15-157.1 of this Article.

13 (h) A Tier 2 member shall not make contributions on

14 earnings that exceed the limitation as prescribed under

15 subsection (b) of Section 15-111 of this Article.

16 (Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)

17 (40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)

18 (Text of Section WITHOUT the changes made by P.A. 98-599,

19 which has been held unconstitutional)

20 Sec. 15-165. To certify amounts and submit vouchers.

21 (a) The Board shall certify to the Governor on or before

22 November 15 of each year until November 15, 2011 the

23 appropriation required from State funds for the purposes of

24 this System for the following fiscal year. The certification

25 under this subsection (a) shall include a copy of the actuarial

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1 recommendations upon which it is based and shall specifically

2 identify the System's projected State normal cost for that

3 fiscal year and the projected State cost for the self-managed

4 plan for that fiscal year.

5 On or before May 1, 2004, the Board shall recalculate and

6 recertify to the Governor the amount of the required State

7 contribution to the System for State fiscal year 2005, taking

8 into account the amounts appropriated to and received by the

9 System under subsection (d) of Section 7.2 of the General

10 Obligation Bond Act.

11 On or before July 1, 2005, the Board shall recalculate and

12 recertify to the Governor the amount of the required State

13 contribution to the System for State fiscal year 2006, taking

14 into account the changes in required State contributions made

15 by this amendatory Act of the 94th General Assembly.

16 On or before April 1, 2011, the Board shall recalculate and

17 recertify to the Governor the amount of the required State

18 contribution to the System for State fiscal year 2011, applying

19 the changes made by Public Act 96-889 to the System's assets

20 and liabilities as of June 30, 2009 as though Public Act 96-889

21 was approved on that date.

22 (a-5) On or before November 1 of each year, beginning

23 November 1, 2012, the Board shall submit to the State Actuary,

24 the Governor, and the General Assembly a proposed certification

25 of the amount of the required State contribution to the System

26 for the next fiscal year, along with all of the actuarial

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1 assumptions, calculations, and data upon which that proposed

2 certification is based. On or before January 1 of each year,

3 beginning January 1, 2013, the State Actuary shall issue a

4 preliminary report concerning the proposed certification and

5 identifying, if necessary, recommended changes in actuarial

6 assumptions that the Board must consider before finalizing its

7 certification of the required State contributions. On or before

8 January 15, 2013 and each January 15 thereafter, the Board

9 shall certify to the Governor and the General Assembly the

10 amount of the required State contribution for the next fiscal

11 year. The Board's certification must note, in a written

12 response to the State Actuary, any deviations from the State

13 Actuary's recommended changes, the reason or reasons for not

14 following the State Actuary's recommended changes, and the

15 fiscal impact of not following the State Actuary's recommended

16 changes on the required State contribution.

17 (a-10) On or before May 1, 2018, the Board shall

18 recalculate and recertify to the Governor and the General

19 Assembly the amount of the required State contribution to the

20 System for State fiscal year 2019, taking into account the

21 effect on the System's liabilities of the elections made under

22 Section 15-132.9.

23 On or before October 1, 2018, the Board shall recalculate

24 and recertify to the Governor and the General Assembly the

25 amount of the required State contribution to the System for

26 State fiscal year 2019, taking into account the reduction

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1 specified under item (3) of subsection (a-1) of Section 15-155.

2 (b) The Board shall certify to the State Comptroller or

3 employer, as the case may be, from time to time, by its

4 chairperson and secretary, with its seal attached, the amounts

5 payable to the System from the various funds.

6 (c) Beginning in State fiscal year 1996, on or as soon as

7 possible after the 15th day of each month the Board shall

8 submit vouchers for payment of State contributions to the

9 System, in a total monthly amount of one-twelfth of the

10 required annual State contribution certified under subsection

11 (a). From the effective date of this amendatory Act of the 93rd

12 General Assembly through June 30, 2004, the Board shall not

13 submit vouchers for the remainder of fiscal year 2004 in excess

14 of the fiscal year 2004 certified contribution amount

15 determined under this Section after taking into consideration

16 the transfer to the System under subsection (b) of Section

17 6z-61 of the State Finance Act. These vouchers shall be paid by

18 the State Comptroller and Treasurer by warrants drawn on the

19 funds appropriated to the System for that fiscal year.

20 If in any month the amount remaining unexpended from all

21 other appropriations to the System for the applicable fiscal

22 year (including the appropriations to the System under Section

23 8.12 of the State Finance Act and Section 1 of the State

24 Pension Funds Continuing Appropriation Act) is less than the

25 amount lawfully vouchered under this Section, the difference

26 shall be paid from the General Revenue Fund under the

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1 continuing appropriation authority provided in Section 1.1 of

2 the State Pension Funds Continuing Appropriation Act.

3 (d) So long as the payments received are the full amount

4 lawfully vouchered under this Section, payments received by the

5 System under this Section shall be applied first toward the

6 employer contribution to the self-managed plan established

7 under Section 15-158.2. Payments shall be applied second toward

8 the employer's portion of the normal costs of the System, as

9 defined in subsection (f) of Section 15-155. The balance shall

10 be applied toward the unfunded actuarial liabilities of the

11 System.

12 (e) In the event that the System does not receive, as a

13 result of legislative enactment or otherwise, payments

14 sufficient to fully fund the employer contribution to the

15 self-managed plan established under Section 15-158.2 and to

16 fully fund that portion of the employer's portion of the normal

17 costs of the System, as calculated in accordance with Section

18 15-155(a-1), then any payments received shall be applied

19 proportionately to the optional retirement program established

20 under Section 15-158.2 and to the employer's portion of the

21 normal costs of the System, as calculated in accordance with

22 Section 15-155(a-1).

23 (Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)

24 (40 ILCS 5/15-198)

25 (Text of Section WITHOUT the changes made by P.A. 98-599,

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1 which has been held unconstitutional)

2 Sec. 15-198. Application and expiration of new benefit

3 increases.

4 (a) As used in this Section, "new benefit increase" means

5 an increase in the amount of any benefit provided under this

6 Article, or an expansion of the conditions of eligibility for

7 any benefit under this Article, that results from an amendment

8 to this Code that takes effect after the effective date of this

9 amendatory Act of the 94th General Assembly. "New benefit

10 increase", however, does not include any benefit increase

11 resulting from the changes made to this Article by this

12 amendatory Act of the 100th General Assembly.

13 (b) Notwithstanding any other provision of this Code or any

14 subsequent amendment to this Code, every new benefit increase

15 is subject to this Section and shall be deemed to be granted

16 only in conformance with and contingent upon compliance with

17 the provisions of this Section.

18 (c) The Public Act enacting a new benefit increase must

19 identify and provide for payment to the System of additional

20 funding at least sufficient to fund the resulting annual

21 increase in cost to the System as it accrues.

22 Every new benefit increase is contingent upon the General

23 Assembly providing the additional funding required under this

24 subsection. The Commission on Government Forecasting and

25 Accountability shall analyze whether adequate additional

26 funding has been provided for the new benefit increase and

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1 shall report its analysis to the Public Pension Division of the

2 Department of Insurance ~~Financial and Professional Regulation~~.

3 A new benefit increase created by a Public Act that does not

4 include the additional funding required under this subsection

5 is null and void. If the Public Pension Division determines

6 that the additional funding provided for a new benefit increase

7 under this subsection is or has become inadequate, it may so

8 certify to the Governor and the State Comptroller and, in the

9 absence of corrective action by the General Assembly, the new

10 benefit increase shall expire at the end of the fiscal year in

11 which the certification is made.

12 (d) Every new benefit increase shall expire 5 years after

13 its effective date or on such earlier date as may be specified

14 in the language enacting the new benefit increase or provided

15 under subsection (c). This does not prevent the General

16 Assembly from extending or re-creating a new benefit increase

17 by law.

18 (e) Except as otherwise provided in the language creating

19 the new benefit increase, a new benefit increase that expires

20 under this Section continues to apply to persons who applied

21 and qualified for the affected benefit while the new benefit

22 increase was in effect and to the affected beneficiaries and

23 alternate payees of such persons, but does not apply to any

24 other person, including without limitation a person who

25 continues in service after the expiration date and did not

26 apply and qualify for the affected benefit while the new

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1 benefit increase was in effect.

2 (Source: P.A. 94-4, eff. 6-1-05.)

3 (40 ILCS 5/16-107.1 new)

4 Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A

5 teacher under this Article who first became a member or

6 participant before January 1, 2011 under any reciprocal

7 retirement system or pension fund established under this Code

8 other than a retirement system or pension fund established

9 under Article 2, 3, 4, 5, 6, or 18 of this Code. However, for

10 the purposes of the election under Section 16-122.9, "Tier 1

11 employee" does not include a teacher under this Article who

12 would qualify as a Tier 1 employee but who has made an

13 irrevocable election on or before June 1, 2017 to retire from

14 service pursuant to the terms of an employment contract or a

15 collective bargaining agreement in effect on June 1, 2017,

16 excluding any extension, amendment, or renewal of that

17 agreement after that date, and has notified the System of that

18 election.

19 (40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)

20 (Text of Section WITHOUT the changes made by P.A. 98-599,

21 which has been held unconstitutional)

22 Sec. 16-121. Salary. "Salary": The actual compensation

23 received by a teacher during any school year and recognized by

24 the system in accordance with rules of the board. For purposes

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1 of this Section, "school year" includes the regular school term

2 plus any additional period for which a teacher is compensated

3 and such compensation is recognized by the rules of the board.

4 Notwithstanding any other provision of this Section,

5 "salary" does not include any future increase in income that is

6 offered by an employer for service as a Tier 1 employee under

7 this Article pursuant to the condition set forth in subsection

8 (c) of Section 16-122.9 and accepted under that condition by a

9 Tier 1 employee who has made the election under paragraph (2)

10 of subsection (a) of Section 16-122.9.

11 Notwithstanding any other provision of this Section,

12 "salary" does not include any consideration payment made to a

13 Tier 1 employee.

14 (Source: P.A. 84-1028.)

15 (40 ILCS 5/16-121.1 new)

16 Sec. 16-121.1. Future increase in income. "Future increase

17 in income" means an increase to a Tier 1 employee's base pay

18 that is offered by an employer to the Tier 1 employee for

19 service under this Article after June 30, 2018 that qualifies

20 as "salary", as defined in Section 16-121, or would qualify as

21 "salary" but for the fact that it was offered to and accepted

22 by the Tier 1 employee under the condition set forth in

23 subsection (c) of Section 16-122.9. The term "future increase

24 in income" includes an increase to a Tier 1 employee's base pay

25 that is paid to the Tier 1 employee pursuant to an extension,

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1 amendment, or renewal of any such employment contract or

2 collective bargaining agreement after the effective date of

3 this Section.

4 (40 ILCS 5/16-121.2 new)

5 Sec. 16-121.2. Base pay. As used in Section 16-121.1 of

6 this Code, "base pay" means the greater of either (i) the Tier

7 1 employee's annualized rate of salary as of June 30, 2018, or

8 (ii) the Tier 1 employee's annualized rate of salary

9 immediately preceding the expiration, renewal, or amendment of

10 an employment contract or collective bargaining agreement in

11 effect on the effective date of this Section. For a person

12 returning to active service as a Tier 1 employee after June 30,

13 2018, however, "base pay" means the employee's annualized rate

14 of salary as of the employee's last date of service prior to

15 July 1, 2018. The System shall calculate the base pay of each

16 Tier 1 employee pursuant to this Section.

17 (40 ILCS 5/16-122.9 new)

18 Sec. 16-122.9. Election by Tier 1 employees.

19 (a) Each active Tier 1 employee shall make an irrevocable

20 election either:

21 (1) to agree to delay his or her eligibility for

22 automatic annual increases in retirement annuity as

23 provided in subsection (a-1) of Section 16-133.1 or

24 subsection (b-1) of Section 16-136.1, whichever is

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1 applicable, and to have the amount of the automatic annual

2 increases in his or her retirement annuity and survivor

3 benefit that are otherwise provided for in this Article

4 calculated, instead, as provided in subsection (a-1) of

5 Section 16-133.1 or subsection (b-1) of Section 16-136.1,

6 whichever is applicable; or

7 (2) to not agree to paragraph (1) of this subsection.

8 The election required under this subsection (a) shall be

9 made by each active Tier 1 employee no earlier than January 1,

10 2018 and no later than March 31, 2018, except that:

11 (i) a person who becomes a Tier 1 employee under this

12 Article on or after February 1, 2018 must make the election

13 under this subsection (a) within 60 days after becoming a

14 Tier 1 employee; and

15 (ii) a person who returns to active service as a Tier 1

16 employee under this Article on or after February 1, 2018

17 and has not yet made an election under this Section must

18 make the election under this subsection (a) within 60 days

19 after returning to active service as a Tier 1 employee.

20 If a Tier 1 employee fails for any reason to make a

21 required election under this subsection within the time

22 specified, then the employee shall be deemed to have made the

23 election under paragraph (2) of this subsection.

24 (a-5) If this Section is enjoined or stayed by an Illinois

25 court or a court of competent jurisdiction pending the entry of

26 a final and unappealable decision, and this Section is

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1 determined to be constitutional or otherwise valid by a final

2 unappealable decision of an Illinois court or a court of

3 competent jurisdiction, then the election procedure set forth

4 in subsection (a) of this Section shall commence on the 180th

5 calendar day after the date of the issuance of the final

6 unappealable decision and shall conclude at the end of the

7 270th calendar day after that date.

8 (a-10) All elections under subsection (a) that are made or

9 deemed to be made before July 1, 2018 shall take effect on July

10 1, 2018. Elections that are made or deemed to be made on or

11 after July 1, 2018 shall take effect on the first day of the

12 month following the month in which the election is made or

13 deemed to be made.

14 (b) As adequate and legal consideration provided under this

15 amendatory Act of the 100th General Assembly for making an

16 election under paragraph (1) of subsection (a) of this Section,

17 an employer shall be expressly and irrevocably prohibited from

18 offering any future increases in income to a Tier 1 employee

19 who has made an election under paragraph (1) of subsection (a)

20 of this Section on the condition of not constituting salary

21 under Section 16-121.

22 As adequate and legal consideration provided under this

23 amendatory Act of the 100th General Assembly for making an

24 election under paragraph (1) of subsection (a) of this Section,

25 each Tier 1 employee who has made an election under paragraph

26 (1) of subsection (a) of this Section shall receive a

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1 consideration payment equal to 10% of the contributions made by

2 or on behalf of the employee under paragraphs (1), (2), and (3)

3 of subsection (a) of Section 16-152 before the effective date

4 of that election. The State Comptroller shall pay the

5 consideration payment to the Tier 1 employee out of funds

6 appropriated for that purpose under Section 1.9 of the State

7 Pension Funds Continuing Appropriation Act. The System shall

8 calculate the amount of each consideration payment and, by July

9 1, 2018, shall certify to the State Comptroller the amount of

10 the consideration payment, together with the name, address, and

11 any other available payment information of the Tier 1 employee

12 as found in the records of the System. The System shall make

13 additional calculations and certifications of consideration

14 payments to the State Comptroller as the System deems

15 necessary.

16 (c) A Tier 1 employee who makes the election under

17 paragraph (2) of subsection (a) of this Section shall not be

18 subject to paragraph (1) of subsection (a) of this Section.

19 However, each future increase in income offered by an employer

20 under this Article to a Tier 1 employee who has made the

21 election under paragraph (2) of subsection (a) of this Section

22 shall be offered by the employer expressly and irrevocably on

23 the condition of not constituting salary under Section 16-121

24 and that the Tier 1 employee's acceptance of the offered future

25 increase in income shall constitute his or her agreement to

26 that condition.

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1 (d) The System shall make a good faith effort to contact

2 each Tier 1 employee subject to this Section. The System shall

3 mail information describing the required election to each Tier

4 1 employee by United States Postal Service mail to his or her

5 last known address on file with the System. If the Tier 1

6 employee is not responsive to other means of contact, it is

7 sufficient for the System to publish the details of any

8 required elections on its website or to publish those details

9 in a regularly published newsletter or other existing public

10 forum.

11 Tier 1 employees who are subject to this Section shall be

12 provided with an election packet containing information

13 regarding their options, as well as the forms necessary to make

14 the required election. Upon request, the System shall offer

15 Tier 1 employees an opportunity to receive information from the

16 System before making the required election. The information may

17 consist of video materials, group presentations, individual

18 consultation with a member or authorized representative of the

19 System in person or by telephone or other electronic means, or

20 any combination of those methods. The System shall not provide

21 advice or counseling with respect to which election a Tier 1

22 employee should make or specific to the legal or tax

23 circumstances of or consequences to the Tier 1 employee.

24 The System shall inform Tier 1 employees in the election

25 packet required under this subsection that the Tier 1 employee

26 may also wish to obtain information and counsel relating to the

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1 election required under this Section from any other available

2 source, including, but not limited to, labor organizations and

3 private counsel.

4 In no event shall the System, its staff, or the Board be

5 held liable for any information given to a member regarding the

6 elections under this Section. The System shall coordinate with

7 the Illinois Department of Central Management Services and each

8 other retirement system administering an election in

9 accordance with this amendatory Act of the 100th General

10 Assembly to provide information concerning the impact of the

11 election set forth in this Section.

12 (e) Notwithstanding any other provision of law, an employer

13 under this Article is required to offer each future increase in

14 income expressly and irrevocably on the condition of not

15 constituting "salary" under Section 16-121 to any Tier 1

16 employee who has made an election under paragraph (2) of

17 subsection (a) of this Section. The offer shall also provide

18 that the Tier 1 employee's acceptance of the offered future

19 increase in income shall constitute his or her agreement to the

20 condition set forth in this subsection.

21 For purposes of legislative intent, the condition set forth

22 in this subsection shall be construed in a manner that ensures

23 that the condition is not violated or circumvented through any

24 contrivance of any kind.

25 (f) A member's election under this Section is not a

26 prohibited election under subdivision (j)(1) of Section 1-119

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1 of this Code.

2 (g) No provision of this Section shall be interpreted in a

3 way that would cause the System to cease to be a qualified plan

4 under Section 401(a) of the Internal Revenue Code of 1986.

5 (h) If an election created by this amendatory Act in any

6 other Article of this Code or any change deriving from that

7 election is determined to be unconstitutional or otherwise

8 invalid by a final unappealable decision of an Illinois court

9 or a court of competent jurisdiction, the invalidity of that

10 provision shall not in any way affect the validity of this

11 Section or the changes deriving from the election required

12 under this Section.

13 (40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)

14 (Text of Section WITHOUT the changes made by P.A. 98-599,

15 which has been held unconstitutional)

16 Sec. 16-133.1. Automatic annual increase in annuity.

17 (a) Each member with creditable service and retiring on or

18 after August 26, 1969 is entitled to the automatic annual

19 increases in annuity provided under this Section while

20 receiving a retirement annuity or disability retirement

21 annuity from the system.

22 Except as otherwise provided in subsection (a-1), an ~~An~~

23 annuitant shall first be entitled to an initial increase under

24 this Section on the January 1 next following the first

25 anniversary of retirement, or January 1 of the year next

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1 following attainment of age 61, whichever is later. At such

2 time, the system shall pay an initial increase determined as

3 follows:

4 (1) 1.5% of the originally granted retirement annuity

5 or disability retirement annuity multiplied by the number

6 of years elapsed, if any, from the date of retirement until

7 January 1, 1972, plus

8 (2) 2% of the originally granted annuity multiplied by

9 the number of years elapsed, if any, from the date of

10 retirement or January 1, 1972, whichever is later, until

11 January 1, 1978, plus

12 (3) 3% of the originally granted annuity multiplied by

13 the number of years elapsed from the date of retirement or

14 January 1, 1978, whichever is later, until the effective

15 date of the initial increase.

16 However, the initial annual increase calculated under this

17 Section for the recipient of a disability retirement annuity

18 granted under Section 16-149.2 shall be reduced by an amount

19 equal to the total of all increases in that annuity received

20 under Section 16-149.5 (but not exceeding 100% of the amount of

21 the initial increase otherwise provided under this Section).

22 Except as otherwise provided in subsection (a-1),

23 following ~~Following~~ the initial increase, automatic annual

24 increases in annuity shall be payable on each January 1

25 thereafter during the lifetime of the annuitant, determined as

26 a percentage of the originally granted retirement annuity or

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1 disability retirement annuity for increases granted prior to

2 January 1, 1990, and calculated as a percentage of the total

3 amount of annuity, including previous increases under this

4 Section, for increases granted on or after January 1, 1990, as

5 follows: 1.5% for periods prior to January 1, 1972, 2% for

6 periods after December 31, 1971 and prior to January 1, 1978,

7 and 3% for periods after December 31, 1977.

8 (a-1) Notwithstanding any other provision of this Article,

9 for a Tier 1 employee who made the election under paragraph (1)

10 of subsection (a) of Section 16-122.9:

11 (1) The initial increase in retirement annuity under

12 this Section shall occur on the January 1 occurring either

13 on or after the attainment of age 67 or the fifth

14 anniversary of the annuity start date, whichever is

15 earlier.

16 (2) The amount of each automatic annual increase in

17 retirement annuity and survivor benefit occurring on or

18 after the effective date of that election shall be

19 calculated as a percentage of the originally granted

20 retirement annuity or survivor benefit, equal to 3% or

21 one-half the annual unadjusted percentage increase (but

22 not less than zero) in the consumer price index-u for the

23 12 months ending with the September preceding each November

24 1, whichever is less. If the annual unadjusted percentage

25 change in the consumer price index-u for the 12 months

26 ending with the September preceding each November 1 is zero

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1 or there is a decrease, then the annuity shall not be

2 increased.

3 For the purposes of this Section, "consumer price index-u"

4 means the index published by the Bureau of Labor Statistics of

5 the United States Department of Labor that measures the average

6 change in prices of goods and services purchased by all urban

7 consumers, United States city average, all items, 1982-84 =

8 100. The new amount resulting from each annual adjustment shall

9 be determined by the Public Pension Division of the Department

10 of Insurance and made available to the board of the retirement

11 system by November 1 of each year.

12 (b) The automatic annual increases in annuity provided

13 under this Section shall not be applicable unless a member has

14 made contributions toward such increases for a period

15 equivalent to one full year of creditable service. If a member

16 contributes for service performed after August 26, 1969 but the

17 member becomes an annuitant before such contributions amount to

18 one full year's contributions based on the salary at the date

19 of retirement, he or she may pay the necessary balance of the

20 contributions to the system and be eligible for the automatic

21 annual increases in annuity provided under this Section.

22 (c) Each member shall make contributions toward the cost of

23 the automatic annual increases in annuity as provided under

24 Section 16-152.

25 (d) An annuitant receiving a retirement annuity or

26 disability retirement annuity on July 1, 1969, who subsequently

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1 re-enters service as a teacher is eligible for the automatic

2 annual increases in annuity provided under this Section if he

3 or she renders at least one year of creditable service

4 following the latest re-entry.

5 (e) In addition to the automatic annual increases in

6 annuity provided under this Section, an annuitant who meets the

7 service requirements of this Section and whose retirement

8 annuity or disability retirement annuity began on or before

9 January 1, 1971 shall receive, on January 1, 1981, an increase

10 in the annuity then being paid of one dollar per month for each

11 year of creditable service. On January 1, 1982, an annuitant

12 whose retirement annuity or disability retirement annuity

13 began on or before January 1, 1977 shall receive an increase in

14 the annuity then being paid of one dollar per month for each

15 year of creditable service.

16 On January 1, 1987, any annuitant whose retirement annuity

17 began on or before January 1, 1977, shall receive an increase

18 in the monthly retirement annuity equal to 8� per year of

19 creditable service times the number of years that have elapsed

20 since the annuity began.

21 (Source: P.A. 91-927, eff. 12-14-00.)

22 (40 ILCS 5/16-136.1) (from Ch. 108 1/2, par. 16-136.1)

23 (Text of Section WITHOUT the changes made by P.A. 98-599,

24 which has been held unconstitutional)

25 Sec. 16-136.1. Annual increase for certain annuitants.

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1 (a) Any annuitant receiving a retirement annuity on June

2 30, 1969 and any member retiring after June 30, 1969 shall be

3 eligible for the annual increases provided under this Section

4 provided the annuitant is ineligible for the automatic annual

5 increase in annuity provided under Section 16-133.1, and

6 provided further that (1) retirement occurred at age 55 or over

7 and was based on 5 or more years of creditable service or (2)

8 if retirement occurred prior to age 55, the retirement annuity

9 was based on 20 or more years of creditable service.

10 (b) Except as otherwise provided in subsection (b-1), an ~~An~~

11 annuitant entitled to increases under this Section shall be

12 entitled to the initial increase as of the later of: (1)

13 January 1 following attainment of age 65, (2) January 1

14 following the first anniversary of retirement, or (3) the first

15 day of the month following receipt of the required qualifying

16 contribution from the annuitant. The initial monthly increase

17 shall be computed on the basis of the period elapsed between

18 the later of the date of last retirement or attainment of age

19 50 and the date of qualification for the initial increase, at

20 the rate of 1 1/2% of the original monthly retirement annuity

21 per year for periods prior to September 1, 1971, and at the

22 rate of 2% per year for periods between September 1, 1971 and

23 September 1, 1978, and at the rate of 3% per year for periods

24 thereafter.

25 Except as otherwise provided in subsection (b-1), if

26 applicable, an ~~An~~ annuitant who has received an initial

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1 increase under this Section~~,~~shall be entitled, on each January

2 1 following the granting of the initial increase, to an

3 increase of 3% of the original monthly retirement annuity for

4 increases granted prior to January 1, 1990, and equal to 3% of

5 the total annuity, including previous increases under this

6 Section, for increases granted on or after January 1, 1990. The

7 original monthly retirement annuity for computations under

8 this subsection (b) shall be considered to be $83.34 for any

9 annuitant entitled to benefits under Section 16-134. The

10 minimum original disability retirement annuity for

11 computations under this subsection (b) shall be considered to

12 be $33.34 per month for any annuitant retired on account of

13 disability.

14 (b-1) Notwithstanding any other provision of this Article,

15 for a Tier 1 employee who made the election under paragraph (1)

16 of subsection (a) of Section 16-122.9:

17 (1) The initial increase in retirement annuity under

18 this Section shall occur on the January 1 occurring either

19 on or after the attainment of age 67 or the fifth

20 anniversary of the annuity start date, whichever is

21 earlier.

22 (2) The amount of each automatic annual increase in

23 retirement annuity or survivor benefit occurring on or

24 after the effective date of that election shall be

25 calculated as a percentage of the originally granted

26 retirement annuity or survivor benefit, equal to 3% or

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1 one-half the annual unadjusted percentage increase (but

2 not less than zero) in the consumer price index-u for the

3 12 months ending with the September preceding each November

4 1, whichever is less. If the annual unadjusted percentage

5 change in the consumer price index-u for the 12 months

6 ending with the September preceding each November 1 is zero

7 or there is a decrease, then the annuity shall not be

8 increased.

9 For the purposes of this Section, "consumer price index-u"

10 means the index published by the Bureau of Labor Statistics of

11 the United States Department of Labor that measures the average

12 change in prices of goods and services purchased by all urban

13 consumers, United States city average, all items, 1982-84 =

14 100. The new amount resulting from each annual adjustment shall

15 be determined by the Public Pension Division of the Department

16 of Insurance and made available to the board of the retirement

17 system by November 1 of each year.

18 (c) An annuitant who otherwise qualifies for annual

19 increases under this Section must make a one-time payment of 1%

20 of the monthly final average salary for each full year of the

21 creditable service forming the basis of the retirement annuity

22 or, if the retirement annuity was not computed using final

23 average salary, 1% of the original monthly retirement annuity

24 for each full year of service forming the basis of the

25 retirement annuity.

26 (d) In addition to other increases which may be provided by

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1 this Section, regardless of creditable service, annuitants not

2 meeting the service requirements of Section 16-133.1 and whose

3 retirement annuity began on or before January 1, 1971 shall

4 receive, on January 1, 1981, an increase in the retirement

5 annuity then being paid of one dollar per month for each year

6 of creditable service forming the basis of the retirement

7 allowance. On January 1, 1982, annuitants whose retirement

8 annuity began on or before January 1, 1977, shall receive an

9 increase in the retirement annuity then being paid of one

10 dollar per month for each year of creditable service.

11 On January 1, 1987, any annuitant whose retirement annuity

12 began on or before January 1, 1977, shall receive an increase

13 in the monthly retirement annuity equal to 8� per year of

14 creditable service times the number of years that have elapsed

15 since the annuity began.

16 (Source: P.A. 86-273.)

17 (40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)

18 (Text of Section WITHOUT the changes made by P.A. 98-599,

19 which has been held unconstitutional)

20 Sec. 16-152. Contributions by members.

21 (a) Except as otherwise provided in subsection (a-5), each

22 ~~Each~~ member shall make contributions for membership service to

23 this System as follows:

24 (1) Effective July 1, 1998, contributions of 7.50% of

25 salary towards the cost of the retirement annuity. Such

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1 contributions shall be deemed "normal contributions".

2 (2) Effective July 1, 1969, contributions of 1/2 of 1%

3 of salary toward the cost of the automatic annual increase

4 in retirement annuity provided under Section 16-133.1.

5 (3) Effective July 24, 1959, contributions of 1% of

6 salary towards the cost of survivor benefits. Such

7 contributions shall not be credited to the individual

8 account of the member and shall not be subject to refund

9 except as provided under Section 16-143.2.

10 (4) Effective July 1, 2005, contributions of 0.40% of

11 salary toward the cost of the early retirement without

12 discount option provided under Section 16-133.2. This

13 contribution shall cease upon termination of the early

14 retirement without discount option as provided in Section

15 16-133.2.

16 (a-5) Beginning July 1, 2018 or the effective date of the

17 Tier 1 employee's election under paragraph (1) of subsection

18 (a) of Section 16-122.9, whichever is later, in lieu of the

19 contributions otherwise required under subsection (a), each

20 Tier 1 employee who made the election under paragraph (1) of

21 subsection (a) of Section 16-122.9 shall make contributions as

22 follows:

23 (1) Contributions of 7.50% of salary towards the cost

24 of the retirement annuity. Such contributions shall be

25 deemed "normal contributions".

26 (2) Contributions of 0.60% towards the cost of survivor

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1 benefits. Such contributions shall not be credited to the

2 individual account of the member and shall not be subject

3 to refund except as provided in Section 16-143.2.

4 (3) Contributions of 0.40% of salary toward the cost of

5 the early retirement without discount option provided

6 under Section 16-133.2. This contribution shall cease upon

7 termination of the early retirement without discount

8 option as provided in Section 16-133.2.

9 (b) The minimum required contribution for any year of

10 full-time teaching service shall be $192.

11 (c) Contributions shall not be required of any annuitant

12 receiving a retirement annuity who is given employment as

13 permitted under Section 16-118 or 16-150.1.

14 (d) A person who (i) was a member before July 1, 1998, (ii)

15 retires with more than 34 years of creditable service, and

16 (iii) does not elect to qualify for the augmented rate under

17 Section 16-129.1 shall be entitled, at the time of retirement,

18 to receive a partial refund of contributions made under this

19 Section for service occurring after the later of June 30, 1998

20 or attainment of 34 years of creditable service, in an amount

21 equal to 1.00% of the salary upon which those contributions

22 were based.

23 (e) A member's contributions toward the cost of early

24 retirement without discount made under item (a)(4) of this

25 Section shall not be refunded if the member has elected early

26 retirement without discount under Section 16-133.2 and has

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1 begun to receive a retirement annuity under this Article

2 calculated in accordance with that election. Otherwise, a

3 member's contributions toward the cost of early retirement

4 without discount made under item (a)(4) of this Section shall

5 be refunded according to whichever one of the following

6 circumstances occurs first:

7 (1) The contributions shall be refunded to the member,

8 without interest, within 120 days after the member's

9 retirement annuity commences, if the member does not elect

10 early retirement without discount under Section 16-133.2.

11 (2) The contributions shall be included, without

12 interest, in any refund claimed by the member under Section

13 16-151.

14 (3) The contributions shall be refunded to the member's

15 designated beneficiary (or if there is no beneficiary, to

16 the member's estate), without interest, if the member dies

17 without having begun to receive a retirement annuity under

18 this Article.

19 (4) The contributions shall be refunded to the member,

20 without interest, if the early retirement without discount

21 option provided under subsection (d) of Section 16-133.2 is

22 terminated. In that event, the System shall provide to the

23 member, within 120 days after the option is terminated, an

24 application for a refund of those contributions.

25 (Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 99-642,

26 eff. 7-28-16.)

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1 (40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)

2 (Text of Section WITHOUT the changes made by P.A. 98-599,

3 which has been held unconstitutional)

4 Sec. 16-158. Contributions by State and other employing

5 units.

6 (a) The State shall make contributions to the System by

7 means of appropriations from the Common School Fund and other

8 State funds of amounts which, together with other employer

9 contributions, employee contributions, investment income, and

10 other income, will be sufficient to meet the cost of

11 maintaining and administering the System on a 90% funded basis

12 in accordance with actuarial recommendations.

13 The Board shall determine the amount of State contributions

14 required for each fiscal year on the basis of the actuarial

15 tables and other assumptions adopted by the Board and the

16 recommendations of the actuary, using the formula in subsection

17 (b-3).

18 (a-1) Annually, on or before November 15 until November 15,

19 2011, the Board shall certify to the Governor the amount of the

20 required State contribution for the coming fiscal year. The

21 certification under this subsection (a-1) shall include a copy

22 of the actuarial recommendations upon which it is based and

23 shall specifically identify the System's projected State

24 normal cost for that fiscal year.

25 On or before May 1, 2004, the Board shall recalculate and

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1 recertify to the Governor the amount of the required State

2 contribution to the System for State fiscal year 2005, taking

3 into account the amounts appropriated to and received by the

4 System under subsection (d) of Section 7.2 of the General

5 Obligation Bond Act.

6 On or before July 1, 2005, the Board shall recalculate and

7 recertify to the Governor the amount of the required State

8 contribution to the System for State fiscal year 2006, taking

9 into account the changes in required State contributions made

10 by this amendatory Act of the 94th General Assembly.

11 On or before April 1, 2011, the Board shall recalculate and

12 recertify to the Governor the amount of the required State

13 contribution to the System for State fiscal year 2011, applying

14 the changes made by Public Act 96-889 to the System's assets

15 and liabilities as of June 30, 2009 as though Public Act 96-889

16 was approved on that date.

17 (a-5) On or before November 1 of each year, beginning

18 November 1, 2012, the Board shall submit to the State Actuary,

19 the Governor, and the General Assembly a proposed certification

20 of the amount of the required State contribution to the System

21 for the next fiscal year, along with all of the actuarial

22 assumptions, calculations, and data upon which that proposed

23 certification is based. On or before January 1 of each year,

24 beginning January 1, 2013, the State Actuary shall issue a

25 preliminary report concerning the proposed certification and

26 identifying, if necessary, recommended changes in actuarial

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1 assumptions that the Board must consider before finalizing its

2 certification of the required State contributions. On or before

3 January 15, 2013 and each January 15 thereafter, the Board

4 shall certify to the Governor and the General Assembly the

5 amount of the required State contribution for the next fiscal

6 year. The Board's certification must note any deviations from

7 the State Actuary's recommended changes, the reason or reasons

8 for not following the State Actuary's recommended changes, and

9 the fiscal impact of not following the State Actuary's

10 recommended changes on the required State contribution.

11 (a-10) On or before May 1, 2018, the Board shall

12 recalculate and recertify to the Governor and the General

13 Assembly the amount of the required State contribution to the

14 System for State fiscal year 2019, taking into account the

15 effect on the System's liabilities of the elections made under

16 Section 16-122.9.

17 On or before October 1, 2018, the Board shall recalculate

18 and recertify to the Governor and the General Assembly the

19 amount of the required State contribution to the System for

20 State fiscal year 2019, taking into account the reduction

21 specified under item (3) of subsection (b-3) of this Section.

22 (b) Through State fiscal year 1995, the State contributions

23 shall be paid to the System in accordance with Section 18-7 of

24 the School Code.

25 (b-1) Beginning in State fiscal year 1996, on the 15th day

26 of each month, or as soon thereafter as may be practicable, the

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1 Board shall submit vouchers for payment of State contributions

2 to the System, in a total monthly amount of one-twelfth of the

3 required annual State contribution certified under subsection

4 (a-1). From the effective date of this amendatory Act of the

5 93rd General Assembly through June 30, 2004, the Board shall

6 not submit vouchers for the remainder of fiscal year 2004 in

7 excess of the fiscal year 2004 certified contribution amount

8 determined under this Section after taking into consideration

9 the transfer to the System under subsection (a) of Section

10 6z-61 of the State Finance Act. These vouchers shall be paid by

11 the State Comptroller and Treasurer by warrants drawn on the

12 funds appropriated to the System for that fiscal year.

13 If in any month the amount remaining unexpended from all

14 other appropriations to the System for the applicable fiscal

15 year (including the appropriations to the System under Section

16 8.12 of the State Finance Act and Section 1 of the State

17 Pension Funds Continuing Appropriation Act) is less than the

18 amount lawfully vouchered under this subsection, the

19 difference shall be paid from the Common School Fund under the

20 continuing appropriation authority provided in Section 1.1 of

21 the State Pension Funds Continuing Appropriation Act.

22 (b-2) Allocations from the Common School Fund apportioned

23 to school districts not coming under this System shall not be

24 diminished or affected by the provisions of this Article.

25 (b-3) For State fiscal years 2012 through 2045 (except as

26 otherwise provided for fiscal year 2019), the minimum

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