Bill Text: IL SB2195 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Illinois Pension Code. Provides optional separate benefits for persons who, on or after 6 months after the effective date, first become participants or members under the State Universities or Downstate Teachers Article or a noncovered participant under the State Employee Article. Contains provisions concerning retirement conditions, the amount of the retirement annuity, the amount of the annual increases to the retirement annuity, the calculation of salary, and the amount of certain survivor benefits. Sets forth the amount of employee and employer contributions. Requires those retirement systems to establish a defined contribution plan for certain members. In the Chicago Teachers Article, establishes similar benefits if the governing body of the unit of local government adopts those benefits by resolution or ordinance. In the State Employee, State Universities, and Downstate Teachers Articles, requires those Systems to offer certain inactive members the opportunity to elect to receive an accelerated pension benefit payment equal to 70% of the net present value of their pension benefits in lieu of receiving any pension benefit. In the State Employee, State Universities, and Downstate Teachers Articles, makes funding changes. In the State Universities and Downstate Teachers Articles, shifts certain costs to the local employer. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced) 2017-08-04 - Rule 3-9(a) / Re-referred to Assignments [SB2195 Detail]

Download: Illinois-2017-SB2195-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2195

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

SYNOPSIS AS INTRODUCED:
See Index

Amends the Illinois Pension Code. Provides optional separate benefits for persons who, on or after 6 months after the effective date, first become participants or members under the State Universities or Downstate Teachers Article or a noncovered participant under the State Employee Article. Contains provisions concerning retirement conditions, the amount of the retirement annuity, the amount of the annual increases to the retirement annuity, the calculation of salary, and the amount of certain survivor benefits. Sets forth the amount of employee and employer contributions. Requires those retirement systems to establish a defined contribution plan for certain members. In the Chicago Teachers Article, establishes similar benefits if the governing body of the unit of local government adopts those benefits by resolution or ordinance. In the State Employee, State Universities, and Downstate Teachers Articles, requires those Systems to offer certain inactive members the opportunity to elect to receive an accelerated pension benefit payment equal to 70% of the net present value of their pension benefits in lieu of receiving any pension benefit. In the State Employee, State Universities, and Downstate Teachers Articles, makes funding changes. In the State Universities and Downstate Teachers Articles, shifts certain costs to the local employer. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB100 12227 RPS 24732 b
FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

SB2195LRB100 12227 RPS 24732 b
1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Sections 3 and 10 as follows:
6 (5 ILCS 375/3) (from Ch. 127, par. 523)
7 Sec. 3. Definitions. Unless the context otherwise
8requires, the following words and phrases as used in this Act
9shall have the following meanings. The Department may define
10these and other words and phrases separately for the purpose of
11implementing specific programs providing benefits under this
12Act.
13 (a) "Administrative service organization" means any
14person, firm or corporation experienced in the handling of
15claims which is fully qualified, financially sound and capable
16of meeting the service requirements of a contract of
17administration executed with the Department.
18 (b) "Annuitant" means (1) an employee who retires, or has
19retired, on or after January 1, 1966 on an immediate annuity
20under the provisions of Articles 2, 14 (including an employee
21who has elected to receive an alternative retirement
22cancellation payment under Section 14-108.5 of the Illinois
23Pension Code in lieu of an annuity or who meets the criteria

SB2195- 2 -LRB100 12227 RPS 24732 b
1for retirement, but in lieu of receiving an annuity under that
2Article has elected to receive an accelerated pension benefit
3payment under Section 14-147.5 of that Article), 15 (including
4an employee who has retired under the optional retirement
5program established under Section 15-158.2 or who meets the
6criteria for retirement but in lieu of receiving an annuity
7under that Article has elected to receive an accelerated
8pension benefit payment under Section 15-185.5 of the Article),
9paragraphs (2), (3), or (5) of Section 16-106 (including an
10employee who meets the criteria for retirement, but in lieu of
11receiving an annuity under that Article has elected to receive
12an accelerated pension benefit payment under Section 16-190.5
13of the Illinois Pension Code), or Article 18 of the Illinois
14Pension Code; (2) any person who was receiving group insurance
15coverage under this Act as of March 31, 1978 by reason of his
16status as an annuitant, even though the annuity in relation to
17which such coverage was provided is a proportional annuity
18based on less than the minimum period of service required for a
19retirement annuity in the system involved; (3) any person not
20otherwise covered by this Act who has retired as a
21participating member under Article 2 of the Illinois Pension
22Code but is ineligible for the retirement annuity under Section
232-119 of the Illinois Pension Code; (4) the spouse of any
24person who is receiving a retirement annuity under Article 18
25of the Illinois Pension Code and who is covered under a group
26health insurance program sponsored by a governmental employer

SB2195- 3 -LRB100 12227 RPS 24732 b
1other than the State of Illinois and who has irrevocably
2elected to waive his or her coverage under this Act and to have
3his or her spouse considered as the "annuitant" under this Act
4and not as a "dependent"; or (5) an employee who retires, or
5has retired, from a qualified position, as determined according
6to rules promulgated by the Director, under a qualified local
7government, a qualified rehabilitation facility, a qualified
8domestic violence shelter or service, or a qualified child
9advocacy center. (For definition of "retired employee", see (p)
10post).
11 (b-5) (Blank).
12 (b-6) (Blank).
13 (b-7) (Blank).
14 (c) "Carrier" means (1) an insurance company, a corporation
15organized under the Limited Health Service Organization Act or
16the Voluntary Health Services Plan Act, a partnership, or other
17nongovernmental organization, which is authorized to do group
18life or group health insurance business in Illinois, or (2) the
19State of Illinois as a self-insurer.
20 (d) "Compensation" means salary or wages payable on a
21regular payroll by the State Treasurer on a warrant of the
22State Comptroller out of any State, trust or federal fund, or
23by the Governor of the State through a disbursing officer of
24the State out of a trust or out of federal funds, or by any
25Department out of State, trust, federal or other funds held by
26the State Treasurer or the Department, to any person for

SB2195- 4 -LRB100 12227 RPS 24732 b
1personal services currently performed, and ordinary or
2accidental disability benefits under Articles 2, 14, 15
3(including ordinary or accidental disability benefits under
4the optional retirement program established under Section
515-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
6Article 18 of the Illinois Pension Code, for disability
7incurred after January 1, 1966, or benefits payable under the
8Workers' Compensation or Occupational Diseases Act or benefits
9payable under a sick pay plan established in accordance with
10Section 36 of the State Finance Act. "Compensation" also means
11salary or wages paid to an employee of any qualified local
12government, qualified rehabilitation facility, qualified
13domestic violence shelter or service, or qualified child
14advocacy center.
15 (e) "Commission" means the State Employees Group Insurance
16Advisory Commission authorized by this Act. Commencing July 1,
171984, "Commission" as used in this Act means the Commission on
18Government Forecasting and Accountability as established by
19the Legislative Commission Reorganization Act of 1984.
20 (f) "Contributory", when referred to as contributory
21coverage, shall mean optional coverages or benefits elected by
22the member toward the cost of which such member makes
23contribution, or which are funded in whole or in part through
24the acceptance of a reduction in earnings or the foregoing of
25an increase in earnings by an employee, as distinguished from
26noncontributory coverage or benefits which are paid entirely by

SB2195- 5 -LRB100 12227 RPS 24732 b
1the State of Illinois without reduction of the member's salary.
2 (g) "Department" means any department, institution, board,
3commission, officer, court or any agency of the State
4government receiving appropriations and having power to
5certify payrolls to the Comptroller authorizing payments of
6salary and wages against such appropriations as are made by the
7General Assembly from any State fund, or against trust funds
8held by the State Treasurer and includes boards of trustees of
9the retirement systems created by Articles 2, 14, 15, 16 and 18
10of the Illinois Pension Code. "Department" also includes the
11Illinois Comprehensive Health Insurance Board, the Board of
12Examiners established under the Illinois Public Accounting
13Act, and the Illinois Finance Authority.
14 (h) "Dependent", when the term is used in the context of
15the health and life plan, means a member's spouse and any child
16(1) from birth to age 26 including an adopted child, a child
17who lives with the member from the time of the filing of a
18petition for adoption until entry of an order of adoption, a
19stepchild or adjudicated child, or a child who lives with the
20member if such member is a court appointed guardian of the
21child or (2) age 19 or over who has a mental or physical
22disability from a cause originating prior to the age of 19 (age
2326 if enrolled as an adult child dependent). For the health
24plan only, the term "dependent" also includes (1) any person
25enrolled prior to the effective date of this Section who is
26dependent upon the member to the extent that the member may

SB2195- 6 -LRB100 12227 RPS 24732 b
1claim such person as a dependent for income tax deduction
2purposes and (2) any person who has received after June 30,
32000 an organ transplant and who is financially dependent upon
4the member and eligible to be claimed as a dependent for income
5tax purposes. A member requesting to cover any dependent must
6provide documentation as requested by the Department of Central
7Management Services and file with the Department any and all
8forms required by the Department.
9 (i) "Director" means the Director of the Illinois
10Department of Central Management Services.
11 (j) "Eligibility period" means the period of time a member
12has to elect enrollment in programs or to select benefits
13without regard to age, sex or health.
14 (k) "Employee" means and includes each officer or employee
15in the service of a department who (1) receives his
16compensation for service rendered to the department on a
17warrant issued pursuant to a payroll certified by a department
18or on a warrant or check issued and drawn by a department upon
19a trust, federal or other fund or on a warrant issued pursuant
20to a payroll certified by an elected or duly appointed officer
21of the State or who receives payment of the performance of
22personal services on a warrant issued pursuant to a payroll
23certified by a Department and drawn by the Comptroller upon the
24State Treasurer against appropriations made by the General
25Assembly from any fund or against trust funds held by the State
26Treasurer, and (2) is employed full-time or part-time in a

SB2195- 7 -LRB100 12227 RPS 24732 b
1position normally requiring actual performance of duty during
2not less than 1/2 of a normal work period, as established by
3the Director in cooperation with each department, except that
4persons elected by popular vote will be considered employees
5during the entire term for which they are elected regardless of
6hours devoted to the service of the State, and (3) except that
7"employee" does not include any person who is not eligible by
8reason of such person's employment to participate in one of the
9State retirement systems under Articles 2, 14, 15 (either the
10regular Article 15 system or the optional retirement program
11established under Section 15-158.2) or 18, or under paragraph
12(2), (3), or (5) of Section 16-106, of the Illinois Pension
13Code, but such term does include persons who are employed
14during the 6 month qualifying period under Article 14 of the
15Illinois Pension Code. Such term also includes any person who
16(1) after January 1, 1966, is receiving ordinary or accidental
17disability benefits under Articles 2, 14, 15 (including
18ordinary or accidental disability benefits under the optional
19retirement program established under Section 15-158.2),
20paragraphs (2), (3), or (5) of Section 16-106, or Article 18 of
21the Illinois Pension Code, for disability incurred after
22January 1, 1966, (2) receives total permanent or total
23temporary disability under the Workers' Compensation Act or
24Occupational Disease Act as a result of injuries sustained or
25illness contracted in the course of employment with the State
26of Illinois, or (3) is not otherwise covered under this Act and

SB2195- 8 -LRB100 12227 RPS 24732 b
1has retired as a participating member under Article 2 of the
2Illinois Pension Code but is ineligible for the retirement
3annuity under Section 2-119 of the Illinois Pension Code.
4However, a person who satisfies the criteria of the foregoing
5definition of "employee" except that such person is made
6ineligible to participate in the State Universities Retirement
7System by clause (4) of subsection (a) of Section 15-107 of the
8Illinois Pension Code is also an "employee" for the purposes of
9this Act. "Employee" also includes any person receiving or
10eligible for benefits under a sick pay plan established in
11accordance with Section 36 of the State Finance Act. "Employee"
12also includes (i) each officer or employee in the service of a
13qualified local government, including persons appointed as
14trustees of sanitary districts regardless of hours devoted to
15the service of the sanitary district, (ii) each employee in the
16service of a qualified rehabilitation facility, (iii) each
17full-time employee in the service of a qualified domestic
18violence shelter or service, and (iv) each full-time employee
19in the service of a qualified child advocacy center, as
20determined according to rules promulgated by the Director.
21 (l) "Member" means an employee, annuitant, retired
22employee or survivor. In the case of an annuitant or retired
23employee who first becomes an annuitant or retired employee on
24or after the effective date of this amendatory Act of the 97th
25General Assembly, the individual must meet the minimum vesting
26requirements of the applicable retirement system in order to be

SB2195- 9 -LRB100 12227 RPS 24732 b
1eligible for group insurance benefits under that system. In the
2case of a survivor who first becomes a survivor on or after the
3effective date of this amendatory Act of the 97th General
4Assembly, the deceased employee, annuitant, or retired
5employee upon whom the annuity is based must have been eligible
6to participate in the group insurance system under the
7applicable retirement system in order for the survivor to be
8eligible for group insurance benefits under that system.
9 (m) "Optional coverages or benefits" means those coverages
10or benefits available to the member on his or her voluntary
11election, and at his or her own expense.
12 (n) "Program" means the group life insurance, health
13benefits and other employee benefits designed and contracted
14for by the Director under this Act.
15 (o) "Health plan" means a health benefits program offered
16by the State of Illinois for persons eligible for the plan.
17 (p) "Retired employee" means any person who would be an
18annuitant as that term is defined herein but for the fact that
19such person retired prior to January 1, 1966. Such term also
20includes any person formerly employed by the University of
21Illinois in the Cooperative Extension Service who would be an
22annuitant but for the fact that such person was made ineligible
23to participate in the State Universities Retirement System by
24clause (4) of subsection (a) of Section 15-107 of the Illinois
25Pension Code.
26 (q) "Survivor" means a person receiving an annuity as a

SB2195- 10 -LRB100 12227 RPS 24732 b
1survivor of an employee or of an annuitant. "Survivor" also
2includes: (1) the surviving dependent of a person who satisfies
3the definition of "employee" except that such person is made
4ineligible to participate in the State Universities Retirement
5System by clause (4) of subsection (a) of Section 15-107 of the
6Illinois Pension Code; (2) the surviving dependent of any
7person formerly employed by the University of Illinois in the
8Cooperative Extension Service who would be an annuitant except
9for the fact that such person was made ineligible to
10participate in the State Universities Retirement System by
11clause (4) of subsection (a) of Section 15-107 of the Illinois
12Pension Code; and (3) the surviving dependent of a person who
13was an annuitant under this Act by virtue of receiving an
14alternative retirement cancellation payment under Section
1514-108.5 of the Illinois Pension Code.
16 (q-2) "SERS" means the State Employees' Retirement System
17of Illinois, created under Article 14 of the Illinois Pension
18Code.
19 (q-3) "SURS" means the State Universities Retirement
20System, created under Article 15 of the Illinois Pension Code.
21 (q-4) "TRS" means the Teachers' Retirement System of the
22State of Illinois, created under Article 16 of the Illinois
23Pension Code.
24 (q-5) (Blank).
25 (q-6) (Blank).
26 (q-7) (Blank).

SB2195- 11 -LRB100 12227 RPS 24732 b
1 (r) "Medical services" means the services provided within
2the scope of their licenses by practitioners in all categories
3licensed under the Medical Practice Act of 1987.
4 (s) "Unit of local government" means any county,
5municipality, township, school district (including a
6combination of school districts under the Intergovernmental
7Cooperation Act), special district or other unit, designated as
8a unit of local government by law, which exercises limited
9governmental powers or powers in respect to limited
10governmental subjects, any not-for-profit association with a
11membership that primarily includes townships and township
12officials, that has duties that include provision of research
13service, dissemination of information, and other acts for the
14purpose of improving township government, and that is funded
15wholly or partly in accordance with Section 85-15 of the
16Township Code; any not-for-profit corporation or association,
17with a membership consisting primarily of municipalities, that
18operates its own utility system, and provides research,
19training, dissemination of information, or other acts to
20promote cooperation between and among municipalities that
21provide utility services and for the advancement of the goals
22and purposes of its membership; the Southern Illinois
23Collegiate Common Market, which is a consortium of higher
24education institutions in Southern Illinois; the Illinois
25Association of Park Districts; and any hospital provider that
26is owned by a county that has 100 or fewer hospital beds and

SB2195- 12 -LRB100 12227 RPS 24732 b
1has not already joined the program. "Qualified local
2government" means a unit of local government approved by the
3Director and participating in a program created under
4subsection (i) of Section 10 of this Act.
5 (t) "Qualified rehabilitation facility" means any
6not-for-profit organization that is accredited by the
7Commission on Accreditation of Rehabilitation Facilities or
8certified by the Department of Human Services (as successor to
9the Department of Mental Health and Developmental
10Disabilities) to provide services to persons with disabilities
11and which receives funds from the State of Illinois for
12providing those services, approved by the Director and
13participating in a program created under subsection (j) of
14Section 10 of this Act.
15 (u) "Qualified domestic violence shelter or service" means
16any Illinois domestic violence shelter or service and its
17administrative offices funded by the Department of Human
18Services (as successor to the Illinois Department of Public
19Aid), approved by the Director and participating in a program
20created under subsection (k) of Section 10.
21 (v) "TRS benefit recipient" means a person who:
22 (1) is not a "member" as defined in this Section; and
23 (2) is receiving a monthly benefit or retirement
24 annuity under Article 16 of the Illinois Pension Code; and
25 (3) either (i) has at least 8 years of creditable
26 service under Article 16 of the Illinois Pension Code, or

SB2195- 13 -LRB100 12227 RPS 24732 b
1 (ii) was enrolled in the health insurance program offered
2 under that Article on January 1, 1996, or (iii) is the
3 survivor of a benefit recipient who had at least 8 years of
4 creditable service under Article 16 of the Illinois Pension
5 Code or was enrolled in the health insurance program
6 offered under that Article on the effective date of this
7 amendatory Act of 1995, or (iv) is a recipient or survivor
8 of a recipient of a disability benefit under Article 16 of
9 the Illinois Pension Code.
10 (w) "TRS dependent beneficiary" means a person who:
11 (1) is not a "member" or "dependent" as defined in this
12 Section; and
13 (2) is a TRS benefit recipient's: (A) spouse, (B)
14 dependent parent who is receiving at least half of his or
15 her support from the TRS benefit recipient, or (C) natural,
16 step, adjudicated, or adopted child who is (i) under age
17 26, (ii) was, on January 1, 1996, participating as a
18 dependent beneficiary in the health insurance program
19 offered under Article 16 of the Illinois Pension Code, or
20 (iii) age 19 or over who has a mental or physical
21 disability from a cause originating prior to the age of 19
22 (age 26 if enrolled as an adult child).
23 "TRS dependent beneficiary" does not include, as indicated
24under paragraph (2) of this subsection (w), a dependent of the
25survivor of a TRS benefit recipient who first becomes a
26dependent of a survivor of a TRS benefit recipient on or after

SB2195- 14 -LRB100 12227 RPS 24732 b
1the effective date of this amendatory Act of the 97th General
2Assembly unless that dependent would have been eligible for
3coverage as a dependent of the deceased TRS benefit recipient
4upon whom the survivor benefit is based.
5 (x) "Military leave" refers to individuals in basic
6training for reserves, special/advanced training, annual
7training, emergency call up, activation by the President of the
8United States, or any other training or duty in service to the
9United States Armed Forces.
10 (y) (Blank).
11 (z) "Community college benefit recipient" means a person
12who:
13 (1) is not a "member" as defined in this Section; and
14 (2) is receiving a monthly survivor's annuity or
15 retirement annuity under Article 15 of the Illinois Pension
16 Code; and
17 (3) either (i) was a full-time employee of a community
18 college district or an association of community college
19 boards created under the Public Community College Act
20 (other than an employee whose last employer under Article
21 15 of the Illinois Pension Code was a community college
22 district subject to Article VII of the Public Community
23 College Act) and was eligible to participate in a group
24 health benefit plan as an employee during the time of
25 employment with a community college district (other than a
26 community college district subject to Article VII of the

SB2195- 15 -LRB100 12227 RPS 24732 b
1 Public Community College Act) or an association of
2 community college boards, or (ii) is the survivor of a
3 person described in item (i).
4 (aa) "Community college dependent beneficiary" means a
5person who:
6 (1) is not a "member" or "dependent" as defined in this
7 Section; and
8 (2) is a community college benefit recipient's: (A)
9 spouse, (B) dependent parent who is receiving at least half
10 of his or her support from the community college benefit
11 recipient, or (C) natural, step, adjudicated, or adopted
12 child who is (i) under age 26, or (ii) age 19 or over and
13 has a mental or physical disability from a cause
14 originating prior to the age of 19 (age 26 if enrolled as
15 an adult child).
16 "Community college dependent beneficiary" does not
17include, as indicated under paragraph (2) of this subsection
18(aa), a dependent of the survivor of a community college
19benefit recipient who first becomes a dependent of a survivor
20of a community college benefit recipient on or after the
21effective date of this amendatory Act of the 97th General
22Assembly unless that dependent would have been eligible for
23coverage as a dependent of the deceased community college
24benefit recipient upon whom the survivor annuity is based.
25 (bb) "Qualified child advocacy center" means any Illinois
26child advocacy center and its administrative offices funded by

SB2195- 16 -LRB100 12227 RPS 24732 b
1the Department of Children and Family Services, as defined by
2the Children's Advocacy Center Act (55 ILCS 80/), approved by
3the Director and participating in a program created under
4subsection (n) of Section 10.
5(Source: P.A. 98-488, eff. 8-16-13; 99-143, eff. 7-27-15.)
6 (5 ILCS 375/10) (from Ch. 127, par. 530)
7 Sec. 10. Contributions by the State and members.
8 (a) The State shall pay the cost of basic non-contributory
9group life insurance and, subject to member paid contributions
10set by the Department or required by this Section and except as
11provided in this Section, the basic program of group health
12benefits on each eligible member, except a member, not
13otherwise covered by this Act, who has retired as a
14participating member under Article 2 of the Illinois Pension
15Code but is ineligible for the retirement annuity under Section
162-119 of the Illinois Pension Code, and part of each eligible
17member's and retired member's premiums for health insurance
18coverage for enrolled dependents as provided by Section 9. The
19State shall pay the cost of the basic program of group health
20benefits only after benefits are reduced by the amount of
21benefits covered by Medicare for all members and dependents who
22are eligible for benefits under Social Security or the Railroad
23Retirement system or who had sufficient Medicare-covered
24government employment, except that such reduction in benefits
25shall apply only to those members and dependents who (1) first

SB2195- 17 -LRB100 12227 RPS 24732 b
1become eligible for such Medicare coverage on or after July 1,
21992; or (2) are Medicare-eligible members or dependents of a
3local government unit which began participation in the program
4on or after July 1, 1992; or (3) remain eligible for, but no
5longer receive Medicare coverage which they had been receiving
6on or after July 1, 1992. The Department may determine the
7aggregate level of the State's contribution on the basis of
8actual cost of medical services adjusted for age, sex or
9geographic or other demographic characteristics which affect
10the costs of such programs.
11 The cost of participation in the basic program of group
12health benefits for the dependent or survivor of a living or
13deceased retired employee who was formerly employed by the
14University of Illinois in the Cooperative Extension Service and
15would be an annuitant but for the fact that he or she was made
16ineligible to participate in the State Universities Retirement
17System by clause (4) of subsection (a) of Section 15-107 of the
18Illinois Pension Code shall not be greater than the cost of
19participation that would otherwise apply to that dependent or
20survivor if he or she were the dependent or survivor of an
21annuitant under the State Universities Retirement System.
22 (a-1) (Blank).
23 (a-2) (Blank).
24 (a-3) (Blank).
25 (a-4) (Blank).
26 (a-5) (Blank).

SB2195- 18 -LRB100 12227 RPS 24732 b
1 (a-6) (Blank).
2 (a-7) (Blank).
3 (a-8) Any annuitant, survivor, or retired employee may
4waive or terminate coverage in the program of group health
5benefits. Any such annuitant, survivor, or retired employee who
6has waived or terminated coverage may enroll or re-enroll in
7the program of group health benefits only during the annual
8benefit choice period, as determined by the Director; except
9that in the event of termination of coverage due to nonpayment
10of premiums, the annuitant, survivor, or retired employee may
11not re-enroll in the program.
12 (a-8.5) Beginning on the effective date of this amendatory
13Act of the 97th General Assembly, the Director of Central
14Management Services shall, on an annual basis, determine the
15amount that the State shall contribute toward the basic program
16of group health benefits on behalf of annuitants (including
17individuals who (i) participated in the General Assembly
18Retirement System, the State Employees' Retirement System of
19Illinois, the State Universities Retirement System, the
20Teachers' Retirement System of the State of Illinois, or the
21Judges Retirement System of Illinois and (ii) qualify as
22annuitants under subsection (b) of Section 3 of this Act),
23survivors (including individuals who (i) receive an annuity as
24a survivor of an individual who participated in the General
25Assembly Retirement System, the State Employees' Retirement
26System of Illinois, the State Universities Retirement System,

SB2195- 19 -LRB100 12227 RPS 24732 b
1the Teachers' Retirement System of the State of Illinois, or
2the Judges Retirement System of Illinois and (ii) qualify as
3survivors under subsection (q) of Section 3 of this Act), and
4retired employees (as defined in subsection (p) of Section 3 of
5this Act). The remainder of the cost of coverage for each
6annuitant, survivor, or retired employee, as determined by the
7Director of Central Management Services, shall be the
8responsibility of that annuitant, survivor, or retired
9employee.
10 Contributions required of annuitants, survivors, and
11retired employees shall be the same for all retirement systems
12and shall also be based on whether an individual has made an
13election under Section 15-135.1 of the Illinois Pension Code.
14Contributions may be based on annuitants', survivors', or
15retired employees' Medicare eligibility, but may not be based
16on Social Security eligibility.
17 (a-9) No later than May 1 of each calendar year, the
18Director of Central Management Services shall certify in
19writing to the Executive Secretary of the State Employees'
20Retirement System of Illinois the amounts of the Medicare
21supplement health care premiums and the amounts of the health
22care premiums for all other retirees who are not Medicare
23eligible.
24 A separate calculation of the premiums based upon the
25actual cost of each health care plan shall be so certified.
26 The Director of Central Management Services shall provide

SB2195- 20 -LRB100 12227 RPS 24732 b
1to the Executive Secretary of the State Employees' Retirement
2System of Illinois such information, statistics, and other data
3as he or she may require to review the premium amounts
4certified by the Director of Central Management Services.
5 The Department of Central Management Services, or any
6successor agency designated to procure healthcare contracts
7pursuant to this Act, is authorized to establish funds,
8separate accounts provided by any bank or banks as defined by
9the Illinois Banking Act, or separate accounts provided by any
10savings and loan association or associations as defined by the
11Illinois Savings and Loan Act of 1985 to be held by the
12Director, outside the State treasury, for the purpose of
13receiving the transfer of moneys from the Local Government
14Health Insurance Reserve Fund. The Department may promulgate
15rules further defining the methodology for the transfers. Any
16interest earned by moneys in the funds or accounts shall inure
17to the Local Government Health Insurance Reserve Fund. The
18transferred moneys, and interest accrued thereon, shall be used
19exclusively for transfers to administrative service
20organizations or their financial institutions for payments of
21claims to claimants and providers under the self-insurance
22health plan. The transferred moneys, and interest accrued
23thereon, shall not be used for any other purpose including, but
24not limited to, reimbursement of administration fees due the
25administrative service organization pursuant to its contract
26or contracts with the Department.

SB2195- 21 -LRB100 12227 RPS 24732 b
1 (a-10) To the extent that participation, benefits, or
2premiums under this Act are based on a person's service credit
3under an Article of the Illinois Pension Code, service credit
4terminated in exchange for an accelerated pension benefit
5payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
6Code shall be included in determining a person's service credit
7for the purposes of this Act.
8 (b) State employees who become eligible for this program on
9or after January 1, 1980 in positions normally requiring actual
10performance of duty not less than 1/2 of a normal work period
11but not equal to that of a normal work period, shall be given
12the option of participating in the available program. If the
13employee elects coverage, the State shall contribute on behalf
14of such employee to the cost of the employee's benefit and any
15applicable dependent supplement, that sum which bears the same
16percentage as that percentage of time the employee regularly
17works when compared to normal work period.
18 (c) The basic non-contributory coverage from the basic
19program of group health benefits shall be continued for each
20employee not in pay status or on active service by reason of
21(1) leave of absence due to illness or injury, (2) authorized
22educational leave of absence or sabbatical leave, or (3)
23military leave. This coverage shall continue until expiration
24of authorized leave and return to active service, but not to
25exceed 24 months for leaves under item (1) or (2). This
2624-month limitation and the requirement of returning to active

SB2195- 22 -LRB100 12227 RPS 24732 b
1service shall not apply to persons receiving ordinary or
2accidental disability benefits or retirement benefits through
3the appropriate State retirement system or benefits under the
4Workers' Compensation or Occupational Disease Act.
5 (d) The basic group life insurance coverage shall continue,
6with full State contribution, where such person is (1) absent
7from active service by reason of disability arising from any
8cause other than self-inflicted, (2) on authorized educational
9leave of absence or sabbatical leave, or (3) on military leave.
10 (e) Where the person is in non-pay status for a period in
11excess of 30 days or on leave of absence, other than by reason
12of disability, educational or sabbatical leave, or military
13leave, such person may continue coverage only by making
14personal payment equal to the amount normally contributed by
15the State on such person's behalf. Such payments and coverage
16may be continued: (1) until such time as the person returns to
17a status eligible for coverage at State expense, but not to
18exceed 24 months or (2) until such person's employment or
19annuitant status with the State is terminated (exclusive of any
20additional service imposed pursuant to law).
21 (f) The Department shall establish by rule the extent to
22which other employee benefits will continue for persons in
23non-pay status or who are not in active service.
24 (g) The State shall not pay the cost of the basic
25non-contributory group life insurance, program of health
26benefits and other employee benefits for members who are

SB2195- 23 -LRB100 12227 RPS 24732 b
1survivors as defined by paragraphs (1) and (2) of subsection
2(q) of Section 3 of this Act. The costs of benefits for these
3survivors shall be paid by the survivors or by the University
4of Illinois Cooperative Extension Service, or any combination
5thereof. However, the State shall pay the amount of the
6reduction in the cost of participation, if any, resulting from
7the amendment to subsection (a) made by this amendatory Act of
8the 91st General Assembly.
9 (h) Those persons occupying positions with any department
10as a result of emergency appointments pursuant to Section 8b.8
11of the Personnel Code who are not considered employees under
12this Act shall be given the option of participating in the
13programs of group life insurance, health benefits and other
14employee benefits. Such persons electing coverage may
15participate only by making payment equal to the amount normally
16contributed by the State for similarly situated employees. Such
17amounts shall be determined by the Director. Such payments and
18coverage may be continued until such time as the person becomes
19an employee pursuant to this Act or such person's appointment
20is terminated.
21 (i) Any unit of local government within the State of
22Illinois may apply to the Director to have its employees,
23annuitants, and their dependents provided group health
24coverage under this Act on a non-insured basis. To participate,
25a unit of local government must agree to enroll all of its
26employees, who may select coverage under either the State group

SB2195- 24 -LRB100 12227 RPS 24732 b
1health benefits plan or a health maintenance organization that
2has contracted with the State to be available as a health care
3provider for employees as defined in this Act. A unit of local
4government must remit the entire cost of providing coverage
5under the State group health benefits plan or, for coverage
6under a health maintenance organization, an amount determined
7by the Director based on an analysis of the sex, age,
8geographic location, or other relevant demographic variables
9for its employees, except that the unit of local government
10shall not be required to enroll those of its employees who are
11covered spouses or dependents under this plan or another group
12policy or plan providing health benefits as long as (1) an
13appropriate official from the unit of local government attests
14that each employee not enrolled is a covered spouse or
15dependent under this plan or another group policy or plan, and
16(2) at least 50% of the employees are enrolled and the unit of
17local government remits the entire cost of providing coverage
18to those employees, except that a participating school district
19must have enrolled at least 50% of its full-time employees who
20have not waived coverage under the district's group health plan
21by participating in a component of the district's cafeteria
22plan. A participating school district is not required to enroll
23a full-time employee who has waived coverage under the
24district's health plan, provided that an appropriate official
25from the participating school district attests that the
26full-time employee has waived coverage by participating in a

SB2195- 25 -LRB100 12227 RPS 24732 b
1component of the district's cafeteria plan. For the purposes of
2this subsection, "participating school district" includes a
3unit of local government whose primary purpose is education as
4defined by the Department's rules.
5 Employees of a participating unit of local government who
6are not enrolled due to coverage under another group health
7policy or plan may enroll in the event of a qualifying change
8in status, special enrollment, special circumstance as defined
9by the Director, or during the annual Benefit Choice Period. A
10participating unit of local government may also elect to cover
11its annuitants. Dependent coverage shall be offered on an
12optional basis, with the costs paid by the unit of local
13government, its employees, or some combination of the two as
14determined by the unit of local government. The unit of local
15government shall be responsible for timely collection and
16transmission of dependent premiums.
17 The Director shall annually determine monthly rates of
18payment, subject to the following constraints:
19 (1) In the first year of coverage, the rates shall be
20 equal to the amount normally charged to State employees for
21 elected optional coverages or for enrolled dependents
22 coverages or other contributory coverages, or contributed
23 by the State for basic insurance coverages on behalf of its
24 employees, adjusted for differences between State
25 employees and employees of the local government in age,
26 sex, geographic location or other relevant demographic

SB2195- 26 -LRB100 12227 RPS 24732 b
1 variables, plus an amount sufficient to pay for the
2 additional administrative costs of providing coverage to
3 employees of the unit of local government and their
4 dependents.
5 (2) In subsequent years, a further adjustment shall be
6 made to reflect the actual prior years' claims experience
7 of the employees of the unit of local government.
8 In the case of coverage of local government employees under
9a health maintenance organization, the Director shall annually
10determine for each participating unit of local government the
11maximum monthly amount the unit may contribute toward that
12coverage, based on an analysis of (i) the age, sex, geographic
13location, and other relevant demographic variables of the
14unit's employees and (ii) the cost to cover those employees
15under the State group health benefits plan. The Director may
16similarly determine the maximum monthly amount each unit of
17local government may contribute toward coverage of its
18employees' dependents under a health maintenance organization.
19 Monthly payments by the unit of local government or its
20employees for group health benefits plan or health maintenance
21organization coverage shall be deposited in the Local
22Government Health Insurance Reserve Fund.
23 The Local Government Health Insurance Reserve Fund is
24hereby created as a nonappropriated trust fund to be held
25outside the State Treasury, with the State Treasurer as
26custodian. The Local Government Health Insurance Reserve Fund

SB2195- 27 -LRB100 12227 RPS 24732 b
1shall be a continuing fund not subject to fiscal year
2limitations. The Local Government Health Insurance Reserve
3Fund is not subject to administrative charges or charge-backs,
4including but not limited to those authorized under Section 8h
5of the State Finance Act. All revenues arising from the
6administration of the health benefits program established
7under this Section shall be deposited into the Local Government
8Health Insurance Reserve Fund. Any interest earned on moneys in
9the Local Government Health Insurance Reserve Fund shall be
10deposited into the Fund. All expenditures from this Fund shall
11be used for payments for health care benefits for local
12government and rehabilitation facility employees, annuitants,
13and dependents, and to reimburse the Department or its
14administrative service organization for all expenses incurred
15in the administration of benefits. No other State funds may be
16used for these purposes.
17 A local government employer's participation or desire to
18participate in a program created under this subsection shall
19not limit that employer's duty to bargain with the
20representative of any collective bargaining unit of its
21employees.
22 (j) Any rehabilitation facility within the State of
23Illinois may apply to the Director to have its employees,
24annuitants, and their eligible dependents provided group
25health coverage under this Act on a non-insured basis. To
26participate, a rehabilitation facility must agree to enroll all

SB2195- 28 -LRB100 12227 RPS 24732 b
1of its employees and remit the entire cost of providing such
2coverage for its employees, except that the rehabilitation
3facility shall not be required to enroll those of its employees
4who are covered spouses or dependents under this plan or
5another group policy or plan providing health benefits as long
6as (1) an appropriate official from the rehabilitation facility
7attests that each employee not enrolled is a covered spouse or
8dependent under this plan or another group policy or plan, and
9(2) at least 50% of the employees are enrolled and the
10rehabilitation facility remits the entire cost of providing
11coverage to those employees. Employees of a participating
12rehabilitation facility who are not enrolled due to coverage
13under another group health policy or plan may enroll in the
14event of a qualifying change in status, special enrollment,
15special circumstance as defined by the Director, or during the
16annual Benefit Choice Period. A participating rehabilitation
17facility may also elect to cover its annuitants. Dependent
18coverage shall be offered on an optional basis, with the costs
19paid by the rehabilitation facility, its employees, or some
20combination of the 2 as determined by the rehabilitation
21facility. The rehabilitation facility shall be responsible for
22timely collection and transmission of dependent premiums.
23 The Director shall annually determine quarterly rates of
24payment, subject to the following constraints:
25 (1) In the first year of coverage, the rates shall be
26 equal to the amount normally charged to State employees for

SB2195- 29 -LRB100 12227 RPS 24732 b
1 elected optional coverages or for enrolled dependents
2 coverages or other contributory coverages on behalf of its
3 employees, adjusted for differences between State
4 employees and employees of the rehabilitation facility in
5 age, sex, geographic location or other relevant
6 demographic variables, plus an amount sufficient to pay for
7 the additional administrative costs of providing coverage
8 to employees of the rehabilitation facility and their
9 dependents.
10 (2) In subsequent years, a further adjustment shall be
11 made to reflect the actual prior years' claims experience
12 of the employees of the rehabilitation facility.
13 Monthly payments by the rehabilitation facility or its
14employees for group health benefits shall be deposited in the
15Local Government Health Insurance Reserve Fund.
16 (k) Any domestic violence shelter or service within the
17State of Illinois may apply to the Director to have its
18employees, annuitants, and their dependents provided group
19health coverage under this Act on a non-insured basis. To
20participate, a domestic violence shelter or service must agree
21to enroll all of its employees and pay the entire cost of
22providing such coverage for its employees. The domestic
23violence shelter shall not be required to enroll those of its
24employees who are covered spouses or dependents under this plan
25or another group policy or plan providing health benefits as
26long as (1) an appropriate official from the domestic violence

SB2195- 30 -LRB100 12227 RPS 24732 b
1shelter attests that each employee not enrolled is a covered
2spouse or dependent under this plan or another group policy or
3plan and (2) at least 50% of the employees are enrolled and the
4domestic violence shelter remits the entire cost of providing
5coverage to those employees. Employees of a participating
6domestic violence shelter who are not enrolled due to coverage
7under another group health policy or plan may enroll in the
8event of a qualifying change in status, special enrollment, or
9special circumstance as defined by the Director or during the
10annual Benefit Choice Period. A participating domestic
11violence shelter may also elect to cover its annuitants.
12Dependent coverage shall be offered on an optional basis, with
13employees, or some combination of the 2 as determined by the
14domestic violence shelter or service. The domestic violence
15shelter or service shall be responsible for timely collection
16and transmission of dependent premiums.
17 The Director shall annually determine rates of payment,
18subject to the following constraints:
19 (1) In the first year of coverage, the rates shall be
20 equal to the amount normally charged to State employees for
21 elected optional coverages or for enrolled dependents
22 coverages or other contributory coverages on behalf of its
23 employees, adjusted for differences between State
24 employees and employees of the domestic violence shelter or
25 service in age, sex, geographic location or other relevant
26 demographic variables, plus an amount sufficient to pay for

SB2195- 31 -LRB100 12227 RPS 24732 b
1 the additional administrative costs of providing coverage
2 to employees of the domestic violence shelter or service
3 and their dependents.
4 (2) In subsequent years, a further adjustment shall be
5 made to reflect the actual prior years' claims experience
6 of the employees of the domestic violence shelter or
7 service.
8 Monthly payments by the domestic violence shelter or
9service or its employees for group health insurance shall be
10deposited in the Local Government Health Insurance Reserve
11Fund.
12 (l) A public community college or entity organized pursuant
13to the Public Community College Act may apply to the Director
14initially to have only annuitants not covered prior to July 1,
151992 by the district's health plan provided health coverage
16under this Act on a non-insured basis. The community college
17must execute a 2-year contract to participate in the Local
18Government Health Plan. Any annuitant may enroll in the event
19of a qualifying change in status, special enrollment, special
20circumstance as defined by the Director, or during the annual
21Benefit Choice Period.
22 The Director shall annually determine monthly rates of
23payment subject to the following constraints: for those
24community colleges with annuitants only enrolled, first year
25rates shall be equal to the average cost to cover claims for a
26State member adjusted for demographics, Medicare

SB2195- 32 -LRB100 12227 RPS 24732 b
1participation, and other factors; and in the second year, a
2further adjustment of rates shall be made to reflect the actual
3first year's claims experience of the covered annuitants.
4 (l-5) The provisions of subsection (l) become inoperative
5on July 1, 1999.
6 (m) The Director shall adopt any rules deemed necessary for
7implementation of this amendatory Act of 1989 (Public Act
886-978).
9 (n) Any child advocacy center within the State of Illinois
10may apply to the Director to have its employees, annuitants,
11and their dependents provided group health coverage under this
12Act on a non-insured basis. To participate, a child advocacy
13center must agree to enroll all of its employees and pay the
14entire cost of providing coverage for its employees. The child
15advocacy center shall not be required to enroll those of its
16employees who are covered spouses or dependents under this plan
17or another group policy or plan providing health benefits as
18long as (1) an appropriate official from the child advocacy
19center attests that each employee not enrolled is a covered
20spouse or dependent under this plan or another group policy or
21plan and (2) at least 50% of the employees are enrolled and the
22child advocacy center remits the entire cost of providing
23coverage to those employees. Employees of a participating child
24advocacy center who are not enrolled due to coverage under
25another group health policy or plan may enroll in the event of
26a qualifying change in status, special enrollment, or special

SB2195- 33 -LRB100 12227 RPS 24732 b
1circumstance as defined by the Director or during the annual
2Benefit Choice Period. A participating child advocacy center
3may also elect to cover its annuitants. Dependent coverage
4shall be offered on an optional basis, with the costs paid by
5the child advocacy center, its employees, or some combination
6of the 2 as determined by the child advocacy center. The child
7advocacy center shall be responsible for timely collection and
8transmission of dependent premiums.
9 The Director shall annually determine rates of payment,
10subject to the following constraints:
11 (1) In the first year of coverage, the rates shall be
12 equal to the amount normally charged to State employees for
13 elected optional coverages or for enrolled dependents
14 coverages or other contributory coverages on behalf of its
15 employees, adjusted for differences between State
16 employees and employees of the child advocacy center in
17 age, sex, geographic location, or other relevant
18 demographic variables, plus an amount sufficient to pay for
19 the additional administrative costs of providing coverage
20 to employees of the child advocacy center and their
21 dependents.
22 (2) In subsequent years, a further adjustment shall be
23 made to reflect the actual prior years' claims experience
24 of the employees of the child advocacy center.
25 Monthly payments by the child advocacy center or its
26employees for group health insurance shall be deposited into

SB2195- 34 -LRB100 12227 RPS 24732 b
1the Local Government Health Insurance Reserve Fund.
2(Source: P.A. 97-695, eff. 7-1-12; 98-488, eff. 8-16-13.)
3 Section 10. The Illinois Pension Code is amended by
4changing Sections 1-160, 14-131, 14-135.08, 14-152.1,
515-108.1, 15-108.2, 15-155, 15-165, 15-198, 16-158, 16-203,
617-129, 20-121, 20-123, 20-124, and 20-125 and by adding
7Sections 1-161, 1-162, 14-103.41, 14-147.5, 14-155.1,
814-155.2, 14-156.1, 15-185.5, 15-200.1, 15-201.1, 16-107.1,
916-190.5, 16-205.1, 16-206.1, and 17-106.05 as follows:
10 (40 ILCS 5/1-160)
11 (Text of Section WITHOUT the changes made by P.A. 98-641,
12which has been held unconstitutional)
13 Sec. 1-160. Provisions applicable to new hires.
14 (a) The provisions of this Section apply to a person who,
15on or after January 1, 2011, first becomes a member or a
16participant under any reciprocal retirement system or pension
17fund established under this Code, other than a retirement
18system or pension fund established under Article 2, 3, 4, 5, 6,
1915 or 18 of this Code, notwithstanding any other provision of
20this Code to the contrary, but do not apply to any self-managed
21plan established under this Code, to any person with respect to
22service as a sheriff's law enforcement employee under Article
237, or to any participant of the retirement plan established
24under Section 22-101. Notwithstanding anything to the contrary

SB2195- 35 -LRB100 12227 RPS 24732 b
1in this Section, for purposes of this Section, a person who
2participated in a retirement system under Article 15 prior to
3January 1, 2011 shall be deemed a person who first became a
4member or participant prior to January 1, 2011 under any
5retirement system or pension fund subject to this Section. The
6changes made to this Section by Public Act 98-596 this
7amendatory Act of the 98th General Assembly are a clarification
8of existing law and are intended to be retroactive to January
91, 2011 (the effective date of Public Act 96-889),
10notwithstanding the provisions of Section 1-103.1 of this Code.
11 This Section does not apply to a person who, on or after 6
12months after the effective date of this amendatory Act of the
13100th General Assembly, first becomes a member or participant
14under Article 14 or 16, unless that person (i) is a covered
15employee under Article 14 who has not elected to participate in
16the defined contribution plan under Section 14-155.2 or (ii)
17elects under subsection (b) of Section 1-161 to receive the
18benefits provided under this Section and the applicable
19provisions of Article 17. This Section also does not apply to a
20person who first becomes a member or participant of an affected
21pension fund on or after 6 months after the resolution or
22ordinance date, as defined in Section 1-162, unless that person
23elects under subsection (c) of Section 1-162 to receive the
24benefits provided under this Section and the applicable
25provisions of Article 17.
26 (b) "Final average salary" means the average monthly (or

SB2195- 36 -LRB100 12227 RPS 24732 b
1annual) salary obtained by dividing the total salary or
2earnings calculated under the Article applicable to the member
3or participant during the 96 consecutive months (or 8
4consecutive years) of service within the last 120 months (or 10
5years) of service in which the total salary or earnings
6calculated under the applicable Article was the highest by the
7number of months (or years) of service in that period. For the
8purposes of a person who first becomes a member or participant
9of any retirement system or pension fund to which this Section
10applies on or after January 1, 2011, in this Code, "final
11average salary" shall be substituted for the following:
12 (1) In Article 7 (except for service as sheriff's law
13 enforcement employees), "final rate of earnings".
14 (2) In Articles 8, 9, 10, 11, and 12, "highest average
15 annual salary for any 4 consecutive years within the last
16 10 years of service immediately preceding the date of
17 withdrawal".
18 (3) In Article 13, "average final salary".
19 (4) In Article 14, "final average compensation".
20 (5) In Article 17, "average salary".
21 (6) In Section 22-207, "wages or salary received by him
22 at the date of retirement or discharge".
23 (b-5) Beginning on January 1, 2011, for all purposes under
24this Code (including without limitation the calculation of
25benefits and employee contributions), the annual earnings,
26salary, or wages (based on the plan year) of a member or

SB2195- 37 -LRB100 12227 RPS 24732 b
1participant to whom this Section applies shall not exceed
2$106,800; however, that amount shall annually thereafter be
3increased by the lesser of (i) 3% of that amount, including all
4previous adjustments, or (ii) one-half the annual unadjusted
5percentage increase (but not less than zero) in the consumer
6price index-u for the 12 months ending with the September
7preceding each November 1, including all previous adjustments.
8 For the purposes of this Section, "consumer price index-u"
9means the index published by the Bureau of Labor Statistics of
10the United States Department of Labor that measures the average
11change in prices of goods and services purchased by all urban
12consumers, United States city average, all items, 1982-84 =
13100. The new amount resulting from each annual adjustment shall
14be determined by the Public Pension Division of the Department
15of Insurance and made available to the boards of the retirement
16systems and pension funds by November 1 of each year.
17 (c) A member or participant is entitled to a retirement
18annuity upon written application if he or she has attained age
1967 (beginning January 1, 2015, age 65 with respect to service
20under Article 12 of this Code that is subject to this Section)
21and has at least 10 years of service credit and is otherwise
22eligible under the requirements of the applicable Article.
23 A member or participant who has attained age 62 (beginning
24January 1, 2015, age 60 with respect to service under Article
2512 of this Code that is subject to this Section) and has at
26least 10 years of service credit and is otherwise eligible

SB2195- 38 -LRB100 12227 RPS 24732 b
1under the requirements of the applicable Article may elect to
2receive the lower retirement annuity provided in subsection (d)
3of this Section.
4 (d) The retirement annuity of a member or participant who
5is retiring after attaining age 62 (beginning January 1, 2015,
6age 60 with respect to service under Article 12 of this Code
7that is subject to this Section) with at least 10 years of
8service credit shall be reduced by one-half of 1% for each full
9month that the member's age is under age 67 (beginning January
101, 2015, age 65 with respect to service under Article 12 of
11this Code that is subject to this Section).
12 (e) Any retirement annuity or supplemental annuity shall be
13subject to annual increases on the January 1 occurring either
14on or after the attainment of age 67 (beginning January 1,
152015, age 65 with respect to service under Article 12 of this
16Code that is subject to this Section) or the first anniversary
17of the annuity start date, whichever is later. Each annual
18increase shall be calculated at 3% or one-half the annual
19unadjusted percentage increase (but not less than zero) in the
20consumer price index-u for the 12 months ending with the
21September preceding each November 1, whichever is less, of the
22originally granted retirement annuity. If the annual
23unadjusted percentage change in the consumer price index-u for
24the 12 months ending with the September preceding each November
251 is zero or there is a decrease, then the annuity shall not be
26increased.

SB2195- 39 -LRB100 12227 RPS 24732 b
1 (f) The initial survivor's or widow's annuity of an
2otherwise eligible survivor or widow of a retired member or
3participant who first became a member or participant on or
4after January 1, 2011 shall be in the amount of 66 2/3% of the
5retired member's or participant's retirement annuity at the
6date of death. In the case of the death of a member or
7participant who has not retired and who first became a member
8or participant on or after January 1, 2011, eligibility for a
9survivor's or widow's annuity shall be determined by the
10applicable Article of this Code. The initial benefit shall be
1166 2/3% of the earned annuity without a reduction due to age. A
12child's annuity of an otherwise eligible child shall be in the
13amount prescribed under each Article if applicable. Any
14survivor's or widow's annuity shall be increased (1) on each
15January 1 occurring on or after the commencement of the annuity
16if the deceased member died while receiving a retirement
17annuity or (2) in other cases, on each January 1 occurring
18after the first anniversary of the commencement of the annuity.
19Each annual increase shall be calculated at 3% or one-half the
20annual unadjusted percentage increase (but not less than zero)
21in the consumer price index-u for the 12 months ending with the
22September preceding each November 1, whichever is less, of the
23originally granted survivor's annuity. If the annual
24unadjusted percentage change in the consumer price index-u for
25the 12 months ending with the September preceding each November
261 is zero or there is a decrease, then the annuity shall not be

SB2195- 40 -LRB100 12227 RPS 24732 b
1increased.
2 (g) The benefits in Section 14-110 apply only if the person
3is a State policeman, a fire fighter in the fire protection
4service of a department, or a security employee of the
5Department of Corrections or the Department of Juvenile
6Justice, as those terms are defined in subsection (b) of
7Section 14-110. A person who meets the requirements of this
8Section is entitled to an annuity calculated under the
9provisions of Section 14-110, in lieu of the regular or minimum
10retirement annuity, only if the person has withdrawn from
11service with not less than 20 years of eligible creditable
12service and has attained age 60, regardless of whether the
13attainment of age 60 occurs while the person is still in
14service.
15 (h) If a person who first becomes a member or a participant
16of a retirement system or pension fund subject to this Section
17on or after January 1, 2011 is receiving a retirement annuity
18or retirement pension under that system or fund and becomes a
19member or participant under any other system or fund created by
20this Code and is employed on a full-time basis, except for
21those members or participants exempted from the provisions of
22this Section under subsection (a) of this Section, then the
23person's retirement annuity or retirement pension under that
24system or fund shall be suspended during that employment. Upon
25termination of that employment, the person's retirement
26annuity or retirement pension payments shall resume and be

SB2195- 41 -LRB100 12227 RPS 24732 b
1recalculated if recalculation is provided for under the
2applicable Article of this Code.
3 If a person who first becomes a member of a retirement
4system or pension fund subject to this Section on or after
5January 1, 2012 and is receiving a retirement annuity or
6retirement pension under that system or fund and accepts on a
7contractual basis a position to provide services to a
8governmental entity from which he or she has retired, then that
9person's annuity or retirement pension earned as an active
10employee of the employer shall be suspended during that
11contractual service. A person receiving an annuity or
12retirement pension under this Code shall notify the pension
13fund or retirement system from which he or she is receiving an
14annuity or retirement pension, as well as his or her
15contractual employer, of his or her retirement status before
16accepting contractual employment. A person who fails to submit
17such notification shall be guilty of a Class A misdemeanor and
18required to pay a fine of $1,000. Upon termination of that
19contractual employment, the person's retirement annuity or
20retirement pension payments shall resume and, if appropriate,
21be recalculated under the applicable provisions of this Code.
22 (i) (Blank).
23 (j) Except for Sections 1-161 and 1-162, in In the case of
24a conflict between the provisions of this Section and any other
25provision of this Code, the provisions of this Section shall
26control.

SB2195- 42 -LRB100 12227 RPS 24732 b
1(Source: P.A. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596,
2eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)
3 (40 ILCS 5/1-161 new)
4 Sec. 1-161. Optional benefits for certain Tier 2 members
5under Articles 14, 15, and 16.
6 (a) Notwithstanding any other provision of this Code to the
7contrary, the provisions of this Section apply to a person who,
8on or after 6 months after the effective date of this
9amendatory Act of the 100th General Assembly, first becomes a
10member or a participant under Article 14, 15, or 16 and who
11does not make the election under subsection (b) or (c),
12whichever is applicable. The provisions of this Section do not
13apply to any participant in a self-managed plan or to a covered
14employee under Article 14.
15 (b) In lieu of the benefits provided under this Section, a
16member or participant, except for a participant under Article
1715, may irrevocably elect the benefits under Section 1-160 and
18the benefits otherwise applicable to that member or
19participant. The election must be made within 30 days after
20becoming a member or participant. Each retirement system shall
21establish procedures for making this election.
22 (c) A participant under Article 15 may irrevocably elect
23the benefits otherwise provided to a Tier 2 participant under
24Article 15. The election must be made within 30 days after
25becoming a participant. The retirement system under Article 15

SB2195- 43 -LRB100 12227 RPS 24732 b
1shall establish procedures for making this election.
2 (d) "Final average salary" means the average monthly (or
3annual) salary obtained by dividing the total salary or
4earnings calculated under the Article applicable to the member
5or participant during the last 120 months (or 10 years) of
6service in which the total salary or earnings calculated under
7the applicable Article was the highest by the number of months
8(or years) of service in that period. For the purposes of a
9person who first becomes a member or participant of any
10retirement system to which this Section applies on or after 6
11months after the effective date of this amendatory Act of the
12100th General Assembly, in this Code, "final average salary"
13shall be substituted for "final average compensation" in
14Article 14.
15 (e) Beginning 6 months after the effective date of this
16amendatory Act of the 100th General Assembly, for all purposes
17under this Code (including without limitation the calculation
18of benefits and employee contributions), the annual earnings,
19salary, or wages (based on the plan year) of a member or
20participant to whom this Section applies shall not at any time
21exceed the federal Social Security Wage Base then in effect.
22 (f) A member or participant is entitled to a retirement
23annuity upon written application if he or she has attained the
24normal retirement age determined by the Social Security
25Administration for that member or participant's year of birth,
26but no earlier than 67 years of age, and has at least 10 years

SB2195- 44 -LRB100 12227 RPS 24732 b
1of service credit and is otherwise eligible under the
2requirements of the applicable Article.
3 (g) The amount of the retirement annuity to which a member
4or participant is entitled shall be computed by multiplying
51.25% for each year of service credit by his or her final
6average salary.
7 (h) Any retirement annuity or supplemental annuity shall be
8subject to annual increases on the first anniversary of the
9annuity start date. Each annual increase shall be one-half the
10annual unadjusted percentage increase (but not less than zero)
11in the consumer price index-w for the 12 months ending with the
12September preceding each November 1 of the originally granted
13retirement annuity. If the annual unadjusted percentage change
14in the consumer price index-w for the 12 months ending with the
15September preceding each November 1 is zero or there is a
16decrease, then the annuity shall not be increased.
17 For the purposes of this Section, "consumer price index-w"
18means the index published by the Bureau of Labor Statistics of
19the United States Department of Labor that measures the average
20change in prices of goods and services purchased by Urban Wage
21Earners and Clerical Workers, United States city average, all
22items, 1982-84 = 100. The new amount resulting from each annual
23adjustment shall be determined by the Public Pension Division
24of the Department of Insurance and made available to the boards
25of the retirement systems and pension funds by November 1 of
26each year.

SB2195- 45 -LRB100 12227 RPS 24732 b
1 (i) The initial survivor's or widow's annuity of an
2otherwise eligible survivor or widow of a retired member or
3participant who first became a member or participant on or
4after 6 months after the effective date of this amendatory Act
5of the 100th General Assembly shall be in the amount of 66 2/3%
6of the retired member's or participant's retirement annuity at
7the date of death. In the case of the death of a member or
8participant who has not retired and who first became a member
9or participant on or after 6 months after the effective date of
10this amendatory Act of the 100th General Assembly, eligibility
11for a survivor's or widow's annuity shall be determined by the
12applicable Article of this Code. The benefit shall be 66 2/3%
13of the earned annuity without a reduction due to age. A child's
14annuity of an otherwise eligible child shall be in the amount
15prescribed under each Article if applicable.
16 (j) In lieu of any other employee contributions, except for
17the contribution to the defined contribution plan under
18subsection (k) of this Section, each employee shall contribute
196.2% of his her or salary to the retirement system. However,
20the employee contribution under this subsection shall not
21exceed the amount of the normal cost of the benefits under this
22Section (except for the defined contribution plan under
23subsection (k) of this Section), expressed as a percentage of
24payroll and determined on or before November 1 of each year by
25the board of trustees of the retirement system. If the board of
26trustees of the retirement system determines that the 6.2%

SB2195- 46 -LRB100 12227 RPS 24732 b
1employee contribution rate exceeds the normal cost of the
2benefits under this Section (except for the defined
3contribution plan under subsection (k) of this Section), then
4on or before December 1 of that year, the board of trustees
5shall certify the amount of the normal cost of the benefits
6under this Section (except for the defined contribution plan
7under subsection (k) of this Section), expressed as a
8percentage of payroll, to the State Actuary and the Commission
9on Government Forecasting and Accountability, and the employee
10contribution under this subsection shall be reduced to that
11amount beginning January 1 of the following year. Thereafter,
12if the normal cost of the benefits under this Section (except
13for the defined contribution plan under subsection (k) of this
14Section), expressed as a percentage of payroll and determined
15on or before November 1 of each year by the board of trustees
16of the retirement system, exceeds 6.2% of salary, then on or
17before December 1 of that year, the board of trustees shall
18certify the normal cost to the State Actuary and the Commission
19on Government Forecasting and Accountability, and the employee
20contributions shall revert back to 6.2% of salary beginning
21January 1 of the following year.
22 (k) No later than 5 months after the effective date of this
23amendatory Act of the 100th General Assembly, each retirement
24system under Article 14, 15, or 16 shall prepare and implement
25a defined contribution plan for members or participants who are
26subject to this Section. The defined contribution plan

SB2195- 47 -LRB100 12227 RPS 24732 b
1developed under this subsection shall be a plan that aggregates
2employer and employee contributions in individual participant
3accounts which, after meeting any other requirements, are used
4for payouts after retirement in accordance with this subsection
5and any other applicable laws.
6 (1) Each member or participant shall contribute a
7 minimum of 4% of his or her salary to the defined
8 contribution plan.
9 (2) For each participant in the defined contribution
10 plan who has been employed with the same employer for at
11 least one year, employer contributions shall be paid into
12 that participant's accounts at a rate expressed as a
13 percentage of salary. This rate may be set for individual
14 employees, but shall be no higher than 6% of salary and
15 shall be no lower than 2% of salary.
16 (3) Employer contributions shall vest when those
17 contributions are paid into a member's or participant's
18 account.
19 (4) The defined contribution plan shall provide a
20 variety of options for investments. These options shall
21 include investments handled by the Illinois State Board of
22 Investment as well as private sector investment options.
23 (5) The defined contribution plan shall provide a
24 variety of options for payouts to retirees and their
25 survivors.
26 (6) To the extent authorized under federal law and as

SB2195- 48 -LRB100 12227 RPS 24732 b
1 authorized by the retirement system, the defined
2 contribution plan shall allow former participants in the
3 plan to transfer or roll over employee and employer
4 contributions, and the earnings thereon, into other
5 qualified retirement plans.
6 (7) Each retirement system shall reduce the employee
7 contributions credited to the member's defined
8 contribution plan account by an amount determined by that
9 retirement system to cover the cost of offering the
10 benefits under this subsection and any applicable
11 administrative fees.
12 (8) No person shall begin participating in the defined
13 contribution plan until it has attained qualified plan
14 status and received all necessary approvals from the U.S.
15 Internal Revenue Service.
16 (l) By accepting the benefits under this Section, a member
17or participant acknowledges and consents that benefits once
18earned may not be diminished, but that future benefits may be
19modified, including, but not limited to, changes in the
20retirement age at which a member or participant becomes
21eligible to receive future benefits, changes in the amount of
22the automatic annual increase for those future benefits, or the
23amount of the retirement annuity. Any increase in benefits
24under this Section applicable to persons under Article 15 or 16
25does not apply unless it is approved by resolution or ordinance
26of the governing body of the unit of local government with

SB2195- 49 -LRB100 12227 RPS 24732 b
1regard to the members or participants under that unit of local
2government.
3 (m) In the case of a conflict between the provisions of
4this Section and any other provision of this Code, the
5provisions of this Section shall control.
6 (40 ILCS 5/1-162 new)
7 Sec. 1-162. Optional benefits for certain Tier 2 members of
8the pension fund under Article 17.
9 (a) As used in this Section:
10 "Affected pension fund" means the pension fund established
11under Article 17 if the governing body of the unit of local
12government designates it as an affected pension fund by
13adoption of a resolution or ordinance.
14 "Resolution or ordinance date" means the date on which the
15governing body of the unit of local government designates the
16pension fund under Article 17 as an affected pension fund by
17adoption of a resolution or ordinance.
18 (b) Notwithstanding any other provision of this Code to the
19contrary, the provisions of this Section apply to a person who
20first becomes a member in the affected pension fund on or after
216 months after the resolution or ordinance date and who does
22not make the election under subsection (c).
23 (c) In lieu of the benefits provided under this Section, a
24member may irrevocably elect the benefits under Section 1-160
25and the benefits otherwise applicable to that member. The

SB2195- 50 -LRB100 12227 RPS 24732 b
1election must be made within 30 days after becoming a member.
2The affected pension fund shall establish procedures for making
3this election.
4 (d) "Final average salary" means the average monthly (or
5annual) salary obtained by dividing the total salary or
6earnings calculated under Article 17 to the member during the
7last 120 months (or 10 years) of service in which the total
8salary or earnings calculated under Article 17 was the highest
9by the number of months (or years) of service in that period.
10For the purposes of a person who first becomes a member of the
11affected pension fund on or after 6 months after the ordinance
12or resolution date, in this Code, "final average salary" shall
13be substituted for "average salary" in Article 17.
14 (e) Beginning 6 months after the resolution or ordinance
15date, for all purposes under this Code (including without
16limitation the calculation of benefits and employee
17contributions), the annual earnings, salary, or wages (based on
18the plan year) of a member to whom this Section applies shall
19not at any time exceed the federal Social Security Wage Base
20then in effect.
21 (f) A member is entitled to a retirement annuity upon
22written application if he or she has attained the normal
23retirement age determined by the Social Security
24Administration for that member's year of birth, but no earlier
25than 67 years of age, and has at least 10 years of service
26credit and is otherwise eligible under the requirements of

SB2195- 51 -LRB100 12227 RPS 24732 b
1Article 17.
2 (g) The amount of the retirement annuity to which a member
3is entitled shall be computed by multiplying 1.25% for each
4year of service credit by his or her final average salary.
5 (h) Any retirement annuity or supplemental annuity shall be
6subject to annual increases on the first anniversary of the
7annuity start date. Each annual increase shall be one-half the
8annual unadjusted percentage increase (but not less than zero)
9in the consumer price index-w for the 12 months ending with the
10September preceding each November 1 of the originally granted
11retirement annuity. If the annual unadjusted percentage change
12in the consumer price index-w for the 12 months ending with the
13September preceding each November 1 is zero or there is a
14decrease, then the annuity shall not be increased.
15 For the purposes of this Section, "consumer price index-w"
16means the index published by the Bureau of Labor Statistics of
17the United States Department of Labor that measures the average
18change in prices of goods and services purchased by Urban Wage
19Earners and Clerical Workers, United States city average, all
20items, 1982-84 = 100. The new amount resulting from each annual
21adjustment shall be determined by the Public Pension Division
22of the Department of Insurance and made available to the boards
23of the retirement systems and pension funds by November 1 of
24each year.
25 (i) The initial survivor's pension of an otherwise eligible
26surviving spouse of a retired member who first became a member

SB2195- 52 -LRB100 12227 RPS 24732 b
1on or after 6 months after the resolution or ordinance date
2shall be in the amount of 66 2/3% of the retired member's
3retirement annuity at the date of death. In the case of the
4death of a member who has not retired and who first became a
5member on or after 6 months after the resolution or ordinance
6date, eligibility for a survivor's pension shall be determined
7under Article 17. The benefit shall be 66 2/3% of the earned
8annuity without a reduction due to age. A children's pension of
9an otherwise eligible child shall be in the amount prescribed
10under Article 17.
11 (j) In lieu of any other employee contributions, except for
12the contribution to the defined contribution plan under
13subsection (k) of this Section, each employee shall contribute
146.2% of his her or salary to the affected pension fund.
15However, the employee contribution under this subsection shall
16not exceed the amount of the normal cost of the benefits under
17this Section (except for the defined contribution plan under
18subsection (k) of this Section), expressed as a percentage of
19payroll and determined on or before November 1 of each year by
20the board of trustees of the affected pension fund. If the
21board of trustees of the affected pension fund determines that
22the 6.2% employee contribution rate exceeds the normal cost of
23the benefits under this Section (except for the defined
24contribution plan under subsection (k) of this Section), then
25on or before December 1 of that year, the board of trustees
26shall certify the amount of the normal cost of the benefits

SB2195- 53 -LRB100 12227 RPS 24732 b
1under this Section (except for the defined contribution plan
2under subsection (k) of this Section), expressed as a
3percentage of payroll, to the State Actuary and the Commission
4on Government Forecasting and Accountability, and the employee
5contribution under this subsection shall be reduced to that
6amount beginning January 1 of the following year. Thereafter,
7if the normal cost of the benefits under this Section (except
8for the defined contribution plan under subsection (k) of this
9Section), expressed as a percentage of payroll and determined
10on or before November 1 of each year by the board of trustees
11of the affected pension fund, exceeds 6.2% of salary, then on
12or before December 1 of that year, the board of trustees shall
13certify the normal cost to the State Actuary and the Commission
14on Government Forecasting and Accountability, and the employee
15contributions shall revert back to 6.2% of salary beginning
16January 1 of the following year.
17 (k) No later than 5 months after the resolution or
18ordinance date, the affected pension fund shall prepare and
19implement a defined contribution plan for members who are
20subject to this Section. The defined contribution plan
21developed under this subsection shall be a plan that aggregates
22employer and employee contributions in individual participant
23accounts which, after meeting any other requirements, are used
24for payouts after retirement in accordance with this subsection
25and any other applicable laws.
26 (1) Each member shall contribute a minimum of 4% of his

SB2195- 54 -LRB100 12227 RPS 24732 b
1 or her salary to the defined contribution plan.
2 (2) For each participant in the defined contribution
3 plan who has been employed with the same employer for at
4 least one year, employer contributions shall be paid into
5 that participant's accounts at a rate expressed as a
6 percentage of salary. This rate may be set for individual
7 employees, but shall be no higher than 6% of salary and
8 shall be no lower than 2% of salary.
9 (3) Employer contributions shall vest when those
10 contributions are paid into a member's or participant's
11 account.
12 (4) The defined contribution plan shall provide a
13 variety of options for investments. These options shall
14 include investments handled by the Illinois State Board of
15 Investment as well as private sector investment options.
16 (5) The defined contribution plan shall provide a
17 variety of options for payouts to retirees and their
18 survivors.
19 (6) To the extent authorized under federal law and as
20 authorized by the affected pension fund, the defined
21 contribution plan shall allow former participants in the
22 plan to transfer or roll over employee and employer
23 contributions, and the earnings thereon, into other
24 qualified retirement plans.
25 (7) The affected pension fund shall reduce the employee
26 contributions credited to the member's defined

SB2195- 55 -LRB100 12227 RPS 24732 b
1 contribution plan account by an amount determined by the
2 affected pension fund to cover the cost of offering the
3 benefits under this subsection and any applicable
4 administrative fees.
5 (8) No person shall begin participating in the defined
6 contribution plan until it has attained qualified plan
7 status and received all necessary approvals from the U.S.
8 Internal Revenue Service.
9 (l) By accepting the benefits under this Section, a member
10acknowledges and consents that benefits once earned may not be
11diminished, but that future benefits may be modified,
12including, but not limited to, changes in the retirement age at
13which a member becomes eligible to receive future benefits,
14changes in the amount of the automatic annual increase for
15those future benefits, or the amount of the retirement annuity.
16Any increase in benefits under this Section does not apply
17unless it is approved by resolution or ordinance of the
18governing body of the unit of local government.
19 (m) In the case of a conflict between the provisions of
20this Section and any other provision of this Code, the
21provisions of this Section shall control.
22 (40 ILCS 5/14-103.41 new)
23 Sec. 14-103.41. Tier 1 employee. "Tier 1 employee": An
24employee under this Article who first became a member or
25participant before January 1, 2011 under any reciprocal

SB2195- 56 -LRB100 12227 RPS 24732 b
1retirement system or pension fund established under this Code
2other than a retirement system or pension fund established
3under Article 2, 3, 4, 5, 6, or 18 of this Code.
4 (40 ILCS 5/14-131)
5 Sec. 14-131. Contributions by State.
6 (a) The State shall make contributions to the System by
7appropriations of amounts which, together with other employer
8contributions from trust, federal, and other funds, employee
9contributions, investment income, and other income, will be
10sufficient to meet the cost of maintaining and administering
11the System on a 90% funded basis in accordance with actuarial
12recommendations.
13 For the purposes of this Section and Section 14-135.08,
14references to State contributions refer only to employer
15contributions and do not include employee contributions that
16are picked up or otherwise paid by the State or a department on
17behalf of the employee.
18 (b) The Board shall determine the total amount of State
19contributions required for each fiscal year on the basis of the
20actuarial tables and other assumptions adopted by the Board,
21using the formula in subsection (e).
22 The Board shall also determine a State contribution rate
23for each fiscal year, expressed as a percentage of payroll,
24based on the total required State contribution for that fiscal
25year (less the amount received by the System from

SB2195- 57 -LRB100 12227 RPS 24732 b
1appropriations under Section 8.12 of the State Finance Act and
2Section 1 of the State Pension Funds Continuing Appropriation
3Act, if any, for the fiscal year ending on the June 30
4immediately preceding the applicable November 15 certification
5deadline), the estimated payroll (including all forms of
6compensation) for personal services rendered by eligible
7employees, and the recommendations of the actuary.
8 For the purposes of this Section and Section 14.1 of the
9State Finance Act, the term "eligible employees" includes
10employees who participate in the System, persons who may elect
11to participate in the System but have not so elected, persons
12who are serving a qualifying period that is required for
13participation, and annuitants employed by a department as
14described in subdivision (a)(1) or (a)(2) of Section 14-111.
15 (c) Contributions shall be made by the several departments
16for each pay period by warrants drawn by the State Comptroller
17against their respective funds or appropriations based upon
18vouchers stating the amount to be so contributed. These amounts
19shall be based on the full rate certified by the Board under
20Section 14-135.08 for that fiscal year. From the effective date
21of this amendatory Act of the 93rd General Assembly through the
22payment of the final payroll from fiscal year 2004
23appropriations, the several departments shall not make
24contributions for the remainder of fiscal year 2004 but shall
25instead make payments as required under subsection (a-1) of
26Section 14.1 of the State Finance Act. The several departments

SB2195- 58 -LRB100 12227 RPS 24732 b
1shall resume those contributions at the commencement of fiscal
2year 2005.
3 (c-1) Notwithstanding subsection (c) of this Section, for
4fiscal years 2010, 2012, 2013, 2014, 2015, 2016, and 2017 only,
5contributions by the several departments are not required to be
6made for General Revenue Funds payrolls processed by the
7Comptroller. Payrolls paid by the several departments from all
8other State funds must continue to be processed pursuant to
9subsection (c) of this Section.
10 (c-2) For State fiscal years 2010, 2012, 2013, 2014, 2015,
112016, and 2017 only, on or as soon as possible after the 15th
12day of each month, the Board shall submit vouchers for payment
13of State contributions to the System, in a total monthly amount
14of one-twelfth of the fiscal year General Revenue Fund
15contribution as certified by the System pursuant to Section
1614-135.08 of the Illinois Pension Code.
17 (d) If an employee is paid from trust funds or federal
18funds, the department or other employer shall pay employer
19contributions from those funds to the System at the certified
20rate, unless the terms of the trust or the federal-State
21agreement preclude the use of the funds for that purpose, in
22which case the required employer contributions shall be paid by
23the State. From the effective date of this amendatory Act of
24the 93rd General Assembly through the payment of the final
25payroll from fiscal year 2004 appropriations, the department or
26other employer shall not pay contributions for the remainder of

SB2195- 59 -LRB100 12227 RPS 24732 b
1fiscal year 2004 but shall instead make payments as required
2under subsection (a-1) of Section 14.1 of the State Finance
3Act. The department or other employer shall resume payment of
4contributions at the commencement of fiscal year 2005.
5 (e) For State fiscal years 2018 through 2045, the minimum
6contribution to the System to be made by the State for each
7fiscal year shall be an amount determined by the System to be
8sufficient to bring the total assets of the System up to 90% of
9the total actuarial liabilities of the System by the end of
10State fiscal year 2045. In making these determinations, the
11required State contribution shall be calculated each year as a
12level percentage of total payroll, including payroll that is
13not deemed pensionable, over the years remaining to and
14including fiscal year 2045 and shall be determined under the
15projected unit credit actuarial cost method.
16 Beginning in State fiscal year 2018, any increase or
17decrease in State contribution over the prior fiscal year due
18exclusively to changes in actuarial or investment assumptions
19adopted by the Board shall be included in the State
20contribution to the System, as a percentage of the applicable
21employee payroll, and shall be increased in equal annual
22increments so that by the State fiscal year occurring 5 years
23after the adoption of the actuarial or investment assumptions,
24the State is contributing at the rate otherwise required under
25this Section.
26 For State fiscal years 2012 through 2017 2045, the minimum

SB2195- 60 -LRB100 12227 RPS 24732 b
1contribution to the System to be made by the State for each
2fiscal year shall be an amount determined by the System to be
3sufficient to bring the total assets of the System up to 90% of
4the total actuarial liabilities of the System by the end of
5State fiscal year 2045. In making these determinations, the
6required State contribution shall be calculated each year as a
7level percentage of payroll over the years remaining to and
8including fiscal year 2045 and shall be determined under the
9projected unit credit actuarial cost method.
10 For State fiscal years 1996 through 2005, the State
11contribution to the System, as a percentage of the applicable
12employee payroll, shall be increased in equal annual increments
13so that by State fiscal year 2011, the State is contributing at
14the rate required under this Section; except that (i) for State
15fiscal year 1998, for all purposes of this Code and any other
16law of this State, the certified percentage of the applicable
17employee payroll shall be 5.052% for employees earning eligible
18creditable service under Section 14-110 and 6.500% for all
19other employees, notwithstanding any contrary certification
20made under Section 14-135.08 before the effective date of this
21amendatory Act of 1997, and (ii) in the following specified
22State fiscal years, the State contribution to the System shall
23not be less than the following indicated percentages of the
24applicable employee payroll, even if the indicated percentage
25will produce a State contribution in excess of the amount
26otherwise required under this subsection and subsection (a):

SB2195- 61 -LRB100 12227 RPS 24732 b
19.8% in FY 1999; 10.0% in FY 2000; 10.2% in FY 2001; 10.4% in FY
22002; 10.6% in FY 2003; and 10.8% in FY 2004.
3 Notwithstanding any other provision of this Article, the
4total required State contribution to the System for State
5fiscal year 2006 is $203,783,900.
6 Notwithstanding any other provision of this Article, the
7total required State contribution to the System for State
8fiscal year 2007 is $344,164,400.
9 For each of State fiscal years 2008 through 2009, the State
10contribution to the System, as a percentage of the applicable
11employee payroll, shall be increased in equal annual increments
12from the required State contribution for State fiscal year
132007, so that by State fiscal year 2011, the State is
14contributing at the rate otherwise required under this Section.
15 Notwithstanding any other provision of this Article, the
16total required State General Revenue Fund contribution for
17State fiscal year 2010 is $723,703,100 and shall be made from
18the proceeds of bonds sold in fiscal year 2010 pursuant to
19Section 7.2 of the General Obligation Bond Act, less (i) the
20pro rata share of bond sale expenses determined by the System's
21share of total bond proceeds, (ii) any amounts received from
22the General Revenue Fund in fiscal year 2010, and (iii) any
23reduction in bond proceeds due to the issuance of discounted
24bonds, if applicable.
25 Notwithstanding any other provision of this Article, the
26total required State General Revenue Fund contribution for

SB2195- 62 -LRB100 12227 RPS 24732 b
1State fiscal year 2011 is the amount recertified by the System
2on or before April 1, 2011 pursuant to Section 14-135.08 and
3shall be made from the proceeds of bonds sold in fiscal year
42011 pursuant to Section 7.2 of the General Obligation Bond
5Act, less (i) the pro rata share of bond sale expenses
6determined by the System's share of total bond proceeds, (ii)
7any amounts received from the General Revenue Fund in fiscal
8year 2011, and (iii) any reduction in bond proceeds due to the
9issuance of discounted bonds, if applicable.
10 Beginning in State fiscal year 2046, the minimum State
11contribution for each fiscal year shall be the amount needed to
12maintain the total assets of the System at 90% of the total
13actuarial liabilities of the System.
14 Amounts received by the System pursuant to Section 25 of
15the Budget Stabilization Act or Section 8.12 of the State
16Finance Act in any fiscal year do not reduce and do not
17constitute payment of any portion of the minimum State
18contribution required under this Article in that fiscal year.
19Such amounts shall not reduce, and shall not be included in the
20calculation of, the required State contributions under this
21Article in any future year until the System has reached a
22funding ratio of at least 90%. A reference in this Article to
23the "required State contribution" or any substantially similar
24term does not include or apply to any amounts payable to the
25System under Section 25 of the Budget Stabilization Act.
26 Notwithstanding any other provision of this Section, the

SB2195- 63 -LRB100 12227 RPS 24732 b
1required State contribution for State fiscal year 2005 and for
2fiscal year 2008 and each fiscal year thereafter, as calculated
3under this Section and certified under Section 14-135.08, shall
4not exceed an amount equal to (i) the amount of the required
5State contribution that would have been calculated under this
6Section for that fiscal year if the System had not received any
7payments under subsection (d) of Section 7.2 of the General
8Obligation Bond Act, minus (ii) the portion of the State's
9total debt service payments for that fiscal year on the bonds
10issued in fiscal year 2003 for the purposes of that Section
117.2, as determined and certified by the Comptroller, that is
12the same as the System's portion of the total moneys
13distributed under subsection (d) of Section 7.2 of the General
14Obligation Bond Act. In determining this maximum for State
15fiscal years 2008 through 2010, however, the amount referred to
16in item (i) shall be increased, as a percentage of the
17applicable employee payroll, in equal increments calculated
18from the sum of the required State contribution for State
19fiscal year 2007 plus the applicable portion of the State's
20total debt service payments for fiscal year 2007 on the bonds
21issued in fiscal year 2003 for the purposes of Section 7.2 of
22the General Obligation Bond Act, so that, by State fiscal year
232011, the State is contributing at the rate otherwise required
24under this Section.
25 (f) After the submission of all payments for eligible
26employees from personal services line items in fiscal year 2004

SB2195- 64 -LRB100 12227 RPS 24732 b
1have been made, the Comptroller shall provide to the System a
2certification of the sum of all fiscal year 2004 expenditures
3for personal services that would have been covered by payments
4to the System under this Section if the provisions of this
5amendatory Act of the 93rd General Assembly had not been
6enacted. Upon receipt of the certification, the System shall
7determine the amount due to the System based on the full rate
8certified by the Board under Section 14-135.08 for fiscal year
92004 in order to meet the State's obligation under this
10Section. The System shall compare this amount due to the amount
11received by the System in fiscal year 2004 through payments
12under this Section and under Section 6z-61 of the State Finance
13Act. If the amount due is more than the amount received, the
14difference shall be termed the "Fiscal Year 2004 Shortfall" for
15purposes of this Section, and the Fiscal Year 2004 Shortfall
16shall be satisfied under Section 1.2 of the State Pension Funds
17Continuing Appropriation Act. If the amount due is less than
18the amount received, the difference shall be termed the "Fiscal
19Year 2004 Overpayment" for purposes of this Section, and the
20Fiscal Year 2004 Overpayment shall be repaid by the System to
21the Pension Contribution Fund as soon as practicable after the
22certification.
23 (g) For purposes of determining the required State
24contribution to the System, the value of the System's assets
25shall be equal to the actuarial value of the System's assets,
26which shall be calculated as follows:

SB2195- 65 -LRB100 12227 RPS 24732 b
1 As of June 30, 2008, the actuarial value of the System's
2assets shall be equal to the market value of the assets as of
3that date. In determining the actuarial value of the System's
4assets for fiscal years after June 30, 2008, any actuarial
5gains or losses from investment return incurred in a fiscal
6year shall be recognized in equal annual amounts over the
75-year period following that fiscal year.
8 (h) For purposes of determining the required State
9contribution to the System for a particular year, the actuarial
10value of assets shall be assumed to earn a rate of return equal
11to the System's actuarially assumed rate of return.
12 (i) After the submission of all payments for eligible
13employees from personal services line items paid from the
14General Revenue Fund in fiscal year 2010 have been made, the
15Comptroller shall provide to the System a certification of the
16sum of all fiscal year 2010 expenditures for personal services
17that would have been covered by payments to the System under
18this Section if the provisions of this amendatory Act of the
1996th General Assembly had not been enacted. Upon receipt of the
20certification, the System shall determine the amount due to the
21System based on the full rate certified by the Board under
22Section 14-135.08 for fiscal year 2010 in order to meet the
23State's obligation under this Section. The System shall compare
24this amount due to the amount received by the System in fiscal
25year 2010 through payments under this Section. If the amount
26due is more than the amount received, the difference shall be

SB2195- 66 -LRB100 12227 RPS 24732 b
1termed the "Fiscal Year 2010 Shortfall" for purposes of this
2Section, and the Fiscal Year 2010 Shortfall shall be satisfied
3under Section 1.2 of the State Pension Funds Continuing
4Appropriation Act. If the amount due is less than the amount
5received, the difference shall be termed the "Fiscal Year 2010
6Overpayment" for purposes of this Section, and the Fiscal Year
72010 Overpayment shall be repaid by the System to the General
8Revenue Fund as soon as practicable after the certification.
9 (j) After the submission of all payments for eligible
10employees from personal services line items paid from the
11General Revenue Fund in fiscal year 2011 have been made, the
12Comptroller shall provide to the System a certification of the
13sum of all fiscal year 2011 expenditures for personal services
14that would have been covered by payments to the System under
15this Section if the provisions of this amendatory Act of the
1696th General Assembly had not been enacted. Upon receipt of the
17certification, the System shall determine the amount due to the
18System based on the full rate certified by the Board under
19Section 14-135.08 for fiscal year 2011 in order to meet the
20State's obligation under this Section. The System shall compare
21this amount due to the amount received by the System in fiscal
22year 2011 through payments under this Section. If the amount
23due is more than the amount received, the difference shall be
24termed the "Fiscal Year 2011 Shortfall" for purposes of this
25Section, and the Fiscal Year 2011 Shortfall shall be satisfied
26under Section 1.2 of the State Pension Funds Continuing

SB2195- 67 -LRB100 12227 RPS 24732 b
1Appropriation Act. If the amount due is less than the amount
2received, the difference shall be termed the "Fiscal Year 2011
3Overpayment" for purposes of this Section, and the Fiscal Year
42011 Overpayment shall be repaid by the System to the General
5Revenue Fund as soon as practicable after the certification.
6 (k) For fiscal years 2012 through 2017 only, after the
7submission of all payments for eligible employees from personal
8services line items paid from the General Revenue Fund in the
9fiscal year have been made, the Comptroller shall provide to
10the System a certification of the sum of all expenditures in
11the fiscal year for personal services. Upon receipt of the
12certification, the System shall determine the amount due to the
13System based on the full rate certified by the Board under
14Section 14-135.08 for the fiscal year in order to meet the
15State's obligation under this Section. The System shall compare
16this amount due to the amount received by the System for the
17fiscal year. If the amount due is more than the amount
18received, the difference shall be termed the "Prior Fiscal Year
19Shortfall" for purposes of this Section, and the Prior Fiscal
20Year Shortfall shall be satisfied under Section 1.2 of the
21State Pension Funds Continuing Appropriation Act. If the amount
22due is less than the amount received, the difference shall be
23termed the "Prior Fiscal Year Overpayment" for purposes of this
24Section, and the Prior Fiscal Year Overpayment shall be repaid
25by the System to the General Revenue Fund as soon as
26practicable after the certification.

SB2195- 68 -LRB100 12227 RPS 24732 b
1(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; 99-8,
2eff. 7-9-15; 99-523, eff. 6-30-16.)
3 (40 ILCS 5/14-135.08) (from Ch. 108 1/2, par. 14-135.08)
4 (Text of Section WITHOUT the changes made by P.A. 98-599,
5which has been held unconstitutional)
6 Sec. 14-135.08. To certify required State contributions.
7 (a) To certify to the Governor and to each department, on
8or before November 15 of each year until November 15, 2011, the
9required rate for State contributions to the System for the
10next State fiscal year, as determined under subsection (b) of
11Section 14-131. The certification to the Governor under this
12subsection (a) shall include a copy of the actuarial
13recommendations upon which the rate is based and shall
14specifically identify the System's projected State normal cost
15for that fiscal year.
16 (a-5) On or before November 1 of each year, beginning
17November 1, 2012, the Board shall submit to the State Actuary,
18the Governor, and the General Assembly a proposed certification
19of the amount of the required State contribution to the System
20for the next fiscal year, along with all of the actuarial
21assumptions, calculations, and data upon which that proposed
22certification is based. On or before January 1 of each year
23beginning January 1, 2013, the State Actuary shall issue a
24preliminary report concerning the proposed certification and
25identifying, if necessary, recommended changes in actuarial

SB2195- 69 -LRB100 12227 RPS 24732 b
1assumptions that the Board must consider before finalizing its
2certification of the required State contributions. On or before
3January 15, 2013 and each January 15 thereafter, the Board
4shall certify to the Governor and the General Assembly the
5amount of the required State contribution for the next fiscal
6year. The Board's certification must note any deviations from
7the State Actuary's recommended changes, the reason or reasons
8for not following the State Actuary's recommended changes, and
9the fiscal impact of not following the State Actuary's
10recommended changes on the required State contribution.
11 (b) The certifications under subsections (a) and (a-5)
12shall include an additional amount necessary to pay all
13principal of and interest on those general obligation bonds due
14the next fiscal year authorized by Section 7.2(a) of the
15General Obligation Bond Act and issued to provide the proceeds
16deposited by the State with the System in July 2003,
17representing deposits other than amounts reserved under
18Section 7.2(c) of the General Obligation Bond Act. For State
19fiscal year 2005, the Board shall make a supplemental
20certification of the additional amount necessary to pay all
21principal of and interest on those general obligation bonds due
22in State fiscal years 2004 and 2005 authorized by Section
237.2(a) of the General Obligation Bond Act and issued to provide
24the proceeds deposited by the State with the System in July
252003, representing deposits other than amounts reserved under
26Section 7.2(c) of the General Obligation Bond Act, as soon as

SB2195- 70 -LRB100 12227 RPS 24732 b
1practical after the effective date of this amendatory Act of
2the 93rd General Assembly.
3 On or before May 1, 2004, the Board shall recalculate and
4recertify to the Governor and to each department the amount of
5the required State contribution to the System and the required
6rates for State contributions to the System for State fiscal
7year 2005, taking into account the amounts appropriated to and
8received by the System under subsection (d) of Section 7.2 of
9the General Obligation Bond Act.
10 On or before July 1, 2005, the Board shall recalculate and
11recertify to the Governor and to each department the amount of
12the required State contribution to the System and the required
13rates for State contributions to the System for State fiscal
14year 2006, taking into account the changes in required State
15contributions made by this amendatory Act of the 94th General
16Assembly.
17 On or before April 1, 2011, the Board shall recalculate and
18recertify to the Governor and to each department the amount of
19the required State contribution to the System for State fiscal
20year 2011, applying the changes made by Public Act 96-889 to
21the System's assets and liabilities as of June 30, 2009 as
22though Public Act 96-889 was approved on that date.
23 As soon as practical after the effective date of this
24amendatory Act of the 100th General Assembly, the Board shall
25recalculate and recertify to the State Actuary, the Governor,
26and the General Assembly the amount of the State contribution

SB2195- 71 -LRB100 12227 RPS 24732 b
1to the System for State fiscal year 2018, taking into account
2the changes in required State contributions made by this
3amendatory Act of the 100th General Assembly. The State Actuary
4shall review the assumptions and valuations underlying the
5Board's revised certification and issue a preliminary report
6concerning the proposed recertification and identifying, if
7necessary, recommended changes in actuarial assumptions that
8the Board must consider before finalizing its certification of
9the required State contributions. The Board's final
10certification must note any deviations from the State Actuary's
11recommended changes, the reason or reasons for not following
12the State Actuary's recommended changes, and the fiscal impact
13of not following the State Actuary's recommended changes on the
14required State contribution.
15(Source: P.A. 96-1497, eff. 1-14-11; 96-1511, eff. 1-27-11;
1697-694, eff. 6-18-12.)
17 (40 ILCS 5/14-147.5 new)
18 Sec. 14-147.5. Accelerated pension benefit payment.
19 (a) As used in this Section:
20 "Eligible person" means a person who:
21 (1) has terminated service;
22 (2) has accrued sufficient service credit to be
23 eligible to receive a retirement annuity under this
24 Article;
25 (3) has not received any retirement annuity under this

SB2195- 72 -LRB100 12227 RPS 24732 b
1 Article; and
2 (4) does not have a QILDRO in effect against him or her
3 under this Article.
4 "Pension benefit" means the benefits under this Article, or
5Article 1 as it relates to those benefits, including any
6anticipated annual increases, that an eligible person is
7entitled to upon attainment of the applicable retirement age.
8"Pension benefit" also includes applicable survivor's or
9disability benefits.
10 (b) Before January 1, 2019, and annually thereafter, the
11System shall calculate, using actuarial tables and other
12assumptions adopted by the Board, the net present value of
13pension benefits for each eligible person and shall offer each
14eligible person the opportunity to irrevocably elect to receive
15an amount determined by the System to be equal to 70% of the
16net present value of his or her pension benefits in lieu of
17receiving any pension benefit. The offer shall specify the
18dollar amount that the eligible person will receive if he or
19she so elects and shall expire when a subsequent offer is made
20to the eligible person or when the System determines that 10%
21of eligible persons in that year have made the election under
22this subsection, whichever occurs first. The System shall make
23a good faith effort to contact every eligible person to notify
24him or her of the election and of the amount of the accelerated
25pension benefit payment.
26 Until the System determines that 10% of eligible persons in

SB2195- 73 -LRB100 12227 RPS 24732 b
1that year have made the election under this subsection, an
2eligible person may irrevocably elect to receive an accelerated
3pension benefit payment in the amount that the System offers
4under this subsection in lieu of receiving any pension benefit.
5A person who elects to receive an accelerated pension benefit
6payment under this Section may not elect to proceed under the
7Retirement Systems Reciprocal Act with respect to service under
8this Article.
9 (c) A person's credits and creditable service under this
10Article shall be terminated upon the person's receipt of an
11accelerated pension benefit payment under this Section, and no
12other benefit shall be paid under this Article based on those
13terminated credits and creditable service, including any
14retirement, survivor, or other benefit or refund; except that
15to the extent that participation, benefits, or premiums under
16the State Employees Group Insurance Act of 1971 are based on
17the amount of service credit, the terminated service credit
18shall be used for that purpose.
19 (d) If a person who has received an accelerated pension
20benefit payment under this Section returns to active service
21under this Article, then:
22 (1) Any benefits under the System earned as a result of
23 that return to active service shall be based solely on the
24 person's credits and creditable service arising from the
25 return to active service.
26 (2) The accelerated pension benefit payment may not be

SB2195- 74 -LRB100 12227 RPS 24732 b
1 repaid to the System, and the terminated credits and
2 creditable service may not under any circumstances be
3 reinstated.
4 (e) As a condition of receiving an accelerated pension
5benefit payment, an eligible person must have another
6retirement plan or account qualified under the Internal Revenue
7Code of 1986, as amended, for the accelerated pension benefit
8payment to be rolled into. The accelerated pension benefit
9payment under this Section may be subject to withholding or
10payment of applicable taxes, but to the extent permitted by
11federal law, a person who receives an accelerated pension
12benefit payment under this Section must direct the System to
13pay all of that payment as a rollover into another retirement
14plan or account qualified under the Internal Revenue Code of
151986, as amended.
16 (f) Before January 1, 2020 and every January 1 thereafter,
17the Board shall certify to the Illinois Finance Authority and
18the General Assembly the amount by which the total amount of
19accelerated pension benefit payments made under this Section
20exceed the amount appropriated to the System for the purpose of
21making those payments.
22 (g) The Board shall adopt any rules necessary to implement
23this Section.
24 (h) No provision of this Section shall be interpreted in a
25way that would cause the applicable System to cease to be a
26qualified plan under the Internal Revenue Code of 1986.

SB2195- 75 -LRB100 12227 RPS 24732 b
1 (i) Notwithstanding any other provision of this Section, in
2no case shall the total amount of accelerated pension benefit
3payments paid under this Section, Section 15-185.5, and Section
416-190.5 cause the Illinois Finance Authority to issue more
5than the $250,000,000 of State Pension Obligation Acceleration
6Bonds authorized in subsection (c-5) of Section 801-40 of the
7Illinois Finance Authority Act.
8 (40 ILCS 5/14-152.1)
9 (Text of Section WITHOUT the changes made by P.A. 98-599,
10which has been held unconstitutional)
11 Sec. 14-152.1. Application and expiration of new benefit
12increases.
13 (a) As used in this Section, "new benefit increase" means
14an increase in the amount of any benefit provided under this
15Article, or an expansion of the conditions of eligibility for
16any benefit under this Article, that results from an amendment
17to this Code that takes effect after June 1, 2005 (the
18effective date of Public Act 94-4). "New benefit increase",
19however, does not include any benefit increase resulting from
20the changes made to this Article by Public Act 96-37 or by this
21amendatory Act of the 100th General Assembly this amendatory
22Act of the 96th General Assembly.
23 (b) Notwithstanding any other provision of this Code or any
24subsequent amendment to this Code, every new benefit increase
25is subject to this Section and shall be deemed to be granted

SB2195- 76 -LRB100 12227 RPS 24732 b
1only in conformance with and contingent upon compliance with
2the provisions of this Section.
3 (c) The Public Act enacting a new benefit increase must
4identify and provide for payment to the System of additional
5funding at least sufficient to fund the resulting annual
6increase in cost to the System as it accrues.
7 Every new benefit increase is contingent upon the General
8Assembly providing the additional funding required under this
9subsection. The Commission on Government Forecasting and
10Accountability shall analyze whether adequate additional
11funding has been provided for the new benefit increase and
12shall report its analysis to the Public Pension Division of the
13Department of Insurance Financial and Professional Regulation.
14A new benefit increase created by a Public Act that does not
15include the additional funding required under this subsection
16is null and void. If the Public Pension Division determines
17that the additional funding provided for a new benefit increase
18under this subsection is or has become inadequate, it may so
19certify to the Governor and the State Comptroller and, in the
20absence of corrective action by the General Assembly, the new
21benefit increase shall expire at the end of the fiscal year in
22which the certification is made.
23 (d) Every new benefit increase shall expire 5 years after
24its effective date or on such earlier date as may be specified
25in the language enacting the new benefit increase or provided
26under subsection (c). This does not prevent the General

SB2195- 77 -LRB100 12227 RPS 24732 b
1Assembly from extending or re-creating a new benefit increase
2by law.
3 (e) Except as otherwise provided in the language creating
4the new benefit increase, a new benefit increase that expires
5under this Section continues to apply to persons who applied
6and qualified for the affected benefit while the new benefit
7increase was in effect and to the affected beneficiaries and
8alternate payees of such persons, but does not apply to any
9other person, including without limitation a person who
10continues in service after the expiration date and did not
11apply and qualify for the affected benefit while the new
12benefit increase was in effect.
13(Source: P.A. 96-37, eff. 7-13-09.)
14 (40 ILCS 5/14-155.1 new)
15 Sec. 14-155.1. Defined contribution plan.
16 (a) By July 1, 2019, the System shall prepare and implement
17a voluntary defined contribution plan for up to 5% of eligible
18active Tier 1 employees. The System shall determine the 5% cap
19by the number of active Tier 1 employees on the effective date
20of this Section. The defined contribution plan developed under
21this Section shall be a plan that aggregates employer and
22employee contributions in individual participant accounts
23which, after meeting any other requirements, are used for
24payouts after retirement in accordance with this Section and
25any other applicable laws.

SB2195- 78 -LRB100 12227 RPS 24732 b
1 As used in this Section, "defined benefit plan" means the
2retirement plan available under this Article to Tier 1
3employees who have not made the election authorized under this
4Section.
5 (1) Under the defined contribution plan, an active Tier
6 1 employee of this System could elect to cease accruing
7 benefits in the defined benefit plan under this Article and
8 begin accruing benefits for future service in the defined
9 contribution plan. Service credit under the defined
10 contribution plan may be used for determining retirement
11 eligibility under the defined benefit plan.
12 (2) Participants in the defined contribution plan
13 shall pay employee contributions at the same rate as Tier 1
14 employees in this System who do not participate in the
15 defined contribution plan.
16 (3) State contributions shall be paid into the accounts
17 of all participants in the defined contribution plan at a
18 uniform rate, expressed as a percentage of compensation and
19 determined for each year. This rate shall be no higher than
20 the employer's normal cost for Tier 1 employees in the
21 defined benefit plan for that year, as determined by the
22 System and expressed as a percentage of compensation, and
23 shall be no lower than 3% of compensation. The State shall
24 adjust this rate annually.
25 (4) The defined contribution plan shall require 5 years
26 of participation in the defined contribution plan before

SB2195- 79 -LRB100 12227 RPS 24732 b
1 vesting in State contributions. If the participant fails to
2 vest in them, the State contributions, and the earnings
3 thereon, shall be forfeited.
4 (5) The defined contribution plan may provide for
5 participants in the plan to be eligible for the defined
6 disability benefits available to other participants under
7 this Article. If it does, the System shall reduce the
8 employee contributions credited to the member's defined
9 contribution plan account by an amount determined by the
10 System to cover the cost of offering such benefits.
11 (6) The defined contribution plan shall provide a
12 variety of options for investments. These options shall
13 include investments handled by the Illinois State Board of
14 Investment as well as private sector investment options.
15 (7) The defined contribution plan shall provide a
16 variety of options for payouts to retirees and their
17 survivors.
18 (8) To the extent authorized under federal law and as
19 authorized by the System, the plan shall allow former
20 participants in the plan to transfer or roll over employee
21 and vested State contributions, and the earnings thereon,
22 into other qualified retirement plans.
23 (9) The System shall reduce the employee contributions
24 credited to the member's defined contribution plan account
25 by an amount determined by the System to cover the cost of
26 offering these benefits and any applicable administrative

SB2195- 80 -LRB100 12227 RPS 24732 b
1 fees.
2 (b) Only persons who are active Tier 1 employees of the
3System on the effective date of this Section are eligible to
4participate in the defined contribution plan. Participation in
5the defined contribution plan shall be limited to the first 5%
6of eligible persons who elect to participate. The election to
7participate in the defined contribution plan is voluntary and
8irrevocable.
9 (c) An eligible Tier 1 employee may irrevocably elect to
10participate in the defined contribution plan by filing with the
11System a written application to participate that is received by
12the System prior to its determination that 5% of eligible
13persons have elected to participate in the defined contribution
14plan.
15 When the System first determines that 5% of eligible
16persons have elected to participate in the defined contribution
17plan, the System shall provide notice to previously eligible
18employees that the plan is no longer available and shall cease
19accepting applications to participate.
20 (d) The System shall make a good faith effort to contact
21each active Tier 1 employee who is eligible to participate in
22the defined contribution plan. The System shall mail
23information describing the option to join the defined
24contribution plan to each of these employees to his or her last
25known address on file with the System. If the employee is not
26responsive to other means of contact, it is sufficient for the

SB2195- 81 -LRB100 12227 RPS 24732 b
1System to publish the details of the option on its website.
2 Upon request for further information describing the
3option, the System shall provide employees with information
4from the System before exercising the option to join the plan,
5including information on the impact to their vested benefits or
6non-vested service. The individual consultation shall include
7projections of the member's defined benefits at retirement or
8earlier termination of service and the value of the member's
9account at retirement or earlier termination of service. The
10System shall not provide advice or counseling with respect to
11whether the employee should exercise the option. The System
12shall inform Tier 1 employees who are eligible to participate
13in the defined contribution plan that they may also wish to
14obtain information and counsel relating to their option from
15any other available source, including, but not limited to,
16labor organizations, private counsel, and financial advisors.
17 (e) In no event shall the System, its staff, its authorized
18representatives, or the Board be liable for any information
19given to an employee under this Section. The System may
20coordinate with the Illinois Department of Central Management
21Services and other retirement systems administering a defined
22contribution plan in accordance with this amendatory Act of the
23100th General Assembly to provide information concerning the
24impact of the option set forth in this Section.
25 (f) Notwithstanding any other provision of this Section, no
26person shall begin participating in the defined contribution

SB2195- 82 -LRB100 12227 RPS 24732 b
1plan until it has attained qualified plan status and received
2all necessary approvals from the U.S. Internal Revenue Service.
3 (g) The System shall report on its progress under this
4Section, including the available details of the defined
5contribution plan and the System's plans for informing eligible
6Tier 1 employees about the plan, to the Governor and the
7General Assembly on or before January 15, 2019.
8 (h) The Illinois State Board of Investment shall be the
9plan sponsor for the defined contribution plan established
10under this Section.
11 (i) The intent of this amendatory Act of the 100th General
12Assembly is to ensure that the State's normal cost of
13participation in the defined contribution plan is similar, and
14if possible equal, to the State's normal cost of participation
15in the defined benefit plan, unless a lower State's normal cost
16is necessary to ensure cost neutrality.
17 (40 ILCS 5/14-155.2 new)
18 Sec. 14-155.2. Defined contribution plan for certain
19covered employees.
20 (a) As used in this Section:
21 "Defined benefit plan" means the retirement plan available
22under this Article and Section 1-160 to eligible covered
23employees who do not make the election authorized under this
24Section.
25 "Eligible covered employee" means a covered employee who

SB2195- 83 -LRB100 12227 RPS 24732 b
1first becomes a participant under this Article on or after 6
2months after the effective date of this amendatory Act of the
3100th General Assembly.
4 (b) In lieu of the defined benefit plan, an eligible
5covered employee may irrevocably elect to participate in the
6defined contribution plan under this Section. The election to
7participate in the defined contribution plan must be made
8within 30 days after becoming an eligible covered employee. The
9election to participate in the defined contribution plan under
10this Section is voluntary and irrevocable.
11 (c) No later than 5 months after the effective date of this
12amendatory Act of the 100th General Assembly, the System shall
13prepare and implement a voluntary defined contribution plan for
14eligible covered employees. The defined contribution plan
15developed under this Section shall be a plan that aggregates
16employer and employee contributions in individual participant
17accounts which, after meeting any other requirements, are used
18for payouts after retirement in accordance with this Section
19and any other applicable laws.
20 (1) A participant in the defined contribution plan
21 shall contribute a minimum of 3% of his or her compensation
22 to the defined contribution plan.
23 (2) For persons who participate in the defined
24 contribution plan for at least one year, employer
25 contributions shall be paid into the accounts of those
26 participants at a rate of 3% of compensation.

SB2195- 84 -LRB100 12227 RPS 24732 b
1 (3) Employer contributions shall vest when those
2 contributions are paid into a participant's account.
3 (4) The defined contribution plan shall provide a
4 variety of options for investments. These options shall
5 include investments handled by the Illinois State Board of
6 Investment as well as private sector investment options.
7 (5) The defined contribution plan shall provide a
8 variety of options for payouts to retirees and their
9 survivors.
10 (6) To the extent authorized under federal law and as
11 authorized by the System, the defined contribution plan
12 shall allow former participants in the plan to transfer or
13 roll over employee and employer contributions, and the
14 earnings thereon, into other qualified retirement plans.
15 (7) The System shall reduce the employee contributions
16 credited to the participant's defined contribution plan
17 account by an amount determined by the System to cover the
18 cost of offering the benefits under this Section and any
19 applicable administrative fees.
20 (40 ILCS 5/14-156.1 new)
21 Sec. 14-156.1. Defined contribution plan; termination. If
22the defined contribution plan under Section 14-155.1 is
23terminated or becomes inoperative pursuant to law, then each
24participant in the plan shall automatically be deemed to have
25been a contributing Tier 1 employee in the System's defined

SB2195- 85 -LRB100 12227 RPS 24732 b
1benefit plan during the time in which he or she participated in
2the defined contribution plan, and for that purpose the System
3shall be entitled to recover the amounts in the participant's
4defined contribution accounts.
5 (40 ILCS 5/15-108.1)
6 Sec. 15-108.1. Tier 1 member; Tier 1 employee.
7 "Tier 1 member": A participant or an annuitant of a
8retirement annuity under this Article, other than a participant
9in the self-managed plan under Section 15-158.2, who first
10became a participant or member before January 1, 2011 under any
11reciprocal retirement system or pension fund established under
12this Code, other than a retirement system or pension fund
13established under Articles 2, 3, 4, 5, 6, or 18 of this Code.
14"Tier 1 member" includes a person who first became a
15participant under this System before January 1, 2011 and who
16accepts a refund and is subsequently reemployed by an employer
17on or after January 1, 2011.
18 "Tier 1 employee": A Tier 1 member who is a participating
19employee, unless he or she is a disability benefit recipient
20under Section 15-150.
21(Source: P.A. 98-92, eff. 7-16-13.)
22 (40 ILCS 5/15-108.2)
23 Sec. 15-108.2. Tier 2 member. "Tier 2 member": A person who
24first becomes a participant under this Article on or after

SB2195- 86 -LRB100 12227 RPS 24732 b
1January 1, 2011 and before 6 months after the effective date of
2this amendatory Act of the 100th General Assembly, other than a
3person in the self-managed plan established under Section
415-158.2 or a person who makes the election under subsection
5(c) of Section 1-161, unless the person is otherwise a Tier 1
6member. The changes made to this Section by this amendatory Act
7of the 98th General Assembly are a correction of existing law
8and are intended to be retroactive to the effective date of
9Public Act 96-889, notwithstanding the provisions of Section
101-103.1 of this Code.
11(Source: P.A. 98-92, eff. 7-16-13; 98-596, eff. 11-19-13.)
12 (40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
13 Sec. 15-155. Employer contributions.
14 (a) The State of Illinois shall make contributions by
15appropriations of amounts which, together with the other
16employer contributions from trust, federal, and other funds,
17employee contributions, income from investments, and other
18income of this System, will be sufficient to meet the cost of
19maintaining and administering the System on a 90% funded basis
20in accordance with actuarial recommendations.
21 The Board shall determine the amount of State contributions
22required for each fiscal year on the basis of the actuarial
23tables and other assumptions adopted by the Board and the
24recommendations of the actuary, using the formula in subsection
25(a-1).

SB2195- 87 -LRB100 12227 RPS 24732 b
1 (a-1) For State fiscal years 2018 through 2045, the minimum
2contribution to the System to be made by the State for each
3fiscal year shall be an amount determined by the System to be
4sufficient to bring the total assets of the System up to 90% of
5the total actuarial liabilities of the System by the end of
6State fiscal year 2045. In making these determinations, the
7required State contribution shall be calculated each year as a
8level percentage of total payroll, including payroll that is
9not deemed pensionable, but excluding payroll attributable to
10participants in the defined contribution plan under Section
1115-200.1, over the years remaining to and including fiscal year
122045 and shall be determined under the projected unit credit
13actuarial cost method.
14 Beginning in State fiscal year 2018, any increase or
15decrease in State contribution over the prior fiscal year due
16exclusively to changes in actuarial or investment assumptions
17adopted by the Board shall be included in the State
18contribution to the System, as a percentage of the applicable
19employee payroll, and shall be increased in equal annual
20increments so that by the State fiscal year occurring 5 years
21after the adoption of the actuarial or investment assumptions,
22the State is contributing at the rate otherwise required under
23this Section.
24 For State fiscal years 2012 through 2017 2045, the minimum
25contribution to the System to be made by the State for each
26fiscal year shall be an amount determined by the System to be

SB2195- 88 -LRB100 12227 RPS 24732 b
1sufficient to bring the total assets of the System up to 90% of
2the total actuarial liabilities of the System by the end of
3State fiscal year 2045. In making these determinations, the
4required State contribution shall be calculated each year as a
5level percentage of payroll over the years remaining to and
6including fiscal year 2045 and shall be determined under the
7projected unit credit actuarial cost method.
8 For State fiscal years 1996 through 2005, the State
9contribution to the System, as a percentage of the applicable
10employee payroll, shall be increased in equal annual increments
11so that by State fiscal year 2011, the State is contributing at
12the rate required under this Section.
13 Notwithstanding any other provision of this Article, the
14total required State contribution for State fiscal year 2006 is
15$166,641,900.
16 Notwithstanding any other provision of this Article, the
17total required State contribution for State fiscal year 2007 is
18$252,064,100.
19 For each of State fiscal years 2008 through 2009, the State
20contribution to the System, as a percentage of the applicable
21employee payroll, shall be increased in equal annual increments
22from the required State contribution for State fiscal year
232007, so that by State fiscal year 2011, the State is
24contributing at the rate otherwise required under this Section.
25 Notwithstanding any other provision of this Article, the
26total required State contribution for State fiscal year 2010 is

SB2195- 89 -LRB100 12227 RPS 24732 b
1$702,514,000 and shall be made from the State Pensions Fund and
2proceeds of bonds sold in fiscal year 2010 pursuant to Section
37.2 of the General Obligation Bond Act, less (i) the pro rata
4share of bond sale expenses determined by the System's share of
5total bond proceeds, (ii) any amounts received from the General
6Revenue Fund in fiscal year 2010, (iii) any reduction in bond
7proceeds due to the issuance of discounted bonds, if
8applicable.
9 Notwithstanding any other provision of this Article, the
10total required State contribution for State fiscal year 2011 is
11the amount recertified by the System on or before April 1, 2011
12pursuant to Section 15-165 and shall be made from the State
13Pensions Fund and proceeds of bonds sold in fiscal year 2011
14pursuant to Section 7.2 of the General Obligation Bond Act,
15less (i) the pro rata share of bond sale expenses determined by
16the System's share of total bond proceeds, (ii) any amounts
17received from the General Revenue Fund in fiscal year 2011, and
18(iii) any reduction in bond proceeds due to the issuance of
19discounted bonds, if applicable.
20 Beginning in State fiscal year 2046, the minimum State
21contribution for each fiscal year shall be the amount needed to
22maintain the total assets of the System at 90% of the total
23actuarial liabilities of the System.
24 Amounts received by the System pursuant to Section 25 of
25the Budget Stabilization Act or Section 8.12 of the State
26Finance Act in any fiscal year do not reduce and do not

SB2195- 90 -LRB100 12227 RPS 24732 b
1constitute payment of any portion of the minimum State
2contribution required under this Article in that fiscal year.
3Such amounts shall not reduce, and shall not be included in the
4calculation of, the required State contributions under this
5Article in any future year until the System has reached a
6funding ratio of at least 90%. A reference in this Article to
7the "required State contribution" or any substantially similar
8term does not include or apply to any amounts payable to the
9System under Section 25 of the Budget Stabilization Act.
10 Notwithstanding any other provision of this Section, the
11required State contribution for State fiscal year 2005 and for
12fiscal year 2008 and each fiscal year thereafter, as calculated
13under this Section and certified under Section 15-165, shall
14not exceed an amount equal to (i) the amount of the required
15State contribution that would have been calculated under this
16Section for that fiscal year if the System had not received any
17payments under subsection (d) of Section 7.2 of the General
18Obligation Bond Act, minus (ii) the portion of the State's
19total debt service payments for that fiscal year on the bonds
20issued in fiscal year 2003 for the purposes of that Section
217.2, as determined and certified by the Comptroller, that is
22the same as the System's portion of the total moneys
23distributed under subsection (d) of Section 7.2 of the General
24Obligation Bond Act. In determining this maximum for State
25fiscal years 2008 through 2010, however, the amount referred to
26in item (i) shall be increased, as a percentage of the

SB2195- 91 -LRB100 12227 RPS 24732 b
1applicable employee payroll, in equal increments calculated
2from the sum of the required State contribution for State
3fiscal year 2007 plus the applicable portion of the State's
4total debt service payments for fiscal year 2007 on the bonds
5issued in fiscal year 2003 for the purposes of Section 7.2 of
6the General Obligation Bond Act, so that, by State fiscal year
72011, the State is contributing at the rate otherwise required
8under this Section.
9 (a-2) For employees first hired on or after 6 months after
10the effective date of this amendatory Act of the 100th General
11Assembly who have elected the benefits under Section 1-161 of
12this Code, the employer shall annually contribute an amount,
13expressed as a percentage of payroll, equal to the defined
14benefit normal cost of the defined benefit plan, less the
15employee contribution, plus 2%. On an annual basis, the System
16shall certify to each employer the amount of unfunded liability
17accrued in the employer's account to be paid by the employer so
18that the System is 90% funded by the end of State fiscal year
192045. The contributions shall be divided equally over a
2012-month period and made monthly. The employer shall also
21contribute an amount equal to the employer defined
22contribution, as set on an individual employee basis, under
23paragraph (2) of subsection (k) of Section 1-161 during each
24pay period. The System shall have the authority to adopt rules
25regarding implementation of employer contributions.
26 (b) If an employee is paid from trust or federal funds, the

SB2195- 92 -LRB100 12227 RPS 24732 b
1employer shall pay to the Board contributions from those funds
2which are sufficient to cover the accruing normal costs on
3behalf of the employee. However, universities having employees
4who are compensated out of local auxiliary funds, income funds,
5or service enterprise funds are not required to pay such
6contributions on behalf of those employees. The local auxiliary
7funds, income funds, and service enterprise funds of
8universities shall not be considered trust funds for the
9purpose of this Article, but funds of alumni associations,
10foundations, and athletic associations which are affiliated
11with the universities included as employers under this Article
12and other employers which do not receive State appropriations
13are considered to be trust funds for the purpose of this
14Article.
15 (b-1) The City of Urbana and the City of Champaign shall
16each make employer contributions to this System for their
17respective firefighter employees who participate in this
18System pursuant to subsection (h) of Section 15-107. The rate
19of contributions to be made by those municipalities shall be
20determined annually by the Board on the basis of the actuarial
21assumptions adopted by the Board and the recommendations of the
22actuary, and shall be expressed as a percentage of salary for
23each such employee. The Board shall certify the rate to the
24affected municipalities as soon as may be practical. The
25employer contributions required under this subsection shall be
26remitted by the municipality to the System at the same time and

SB2195- 93 -LRB100 12227 RPS 24732 b
1in the same manner as employee contributions.
2 (c) Through State fiscal year 1995: The total employer
3contribution shall be apportioned among the various funds of
4the State and other employers, whether trust, federal, or other
5funds, in accordance with actuarial procedures approved by the
6Board. State of Illinois contributions for employers receiving
7State appropriations for personal services shall be payable
8from appropriations made to the employers or to the System. The
9contributions for Class I community colleges covering earnings
10other than those paid from trust and federal funds, shall be
11payable solely from appropriations to the Illinois Community
12College Board or the System for employer contributions.
13 (d) Beginning in State fiscal year 1996, the required State
14contributions to the System shall be appropriated directly to
15the System and shall be payable through vouchers issued in
16accordance with subsection (c) of Section 15-165, except as
17provided in subsection (g).
18 (e) The State Comptroller shall draw warrants payable to
19the System upon proper certification by the System or by the
20employer in accordance with the appropriation laws and this
21Code.
22 (f) Normal costs under this Section means liability for
23pensions and other benefits which accrues to the System because
24of the credits earned for service rendered by the participants
25during the fiscal year and expenses of administering the
26System, but shall not include the principal of or any

SB2195- 94 -LRB100 12227 RPS 24732 b
1redemption premium or interest on any bonds issued by the Board
2or any expenses incurred or deposits required in connection
3therewith.
4 (g) For academic years beginning on or after June 1, 2005
5and before July 1, 2018, if If the amount of a participant's
6earnings for any academic year used to determine the final rate
7of earnings, determined on a full-time equivalent basis,
8exceeds the amount of his or her earnings with the same
9employer for the previous academic year, determined on a
10full-time equivalent basis, by more than 6%, the participant's
11employer shall pay to the System, in addition to all other
12payments required under this Section and in accordance with
13guidelines established by the System, the present value of the
14increase in benefits resulting from the portion of the increase
15in earnings that is in excess of 6%. This present value shall
16be computed by the System on the basis of the actuarial
17assumptions and tables used in the most recent actuarial
18valuation of the System that is available at the time of the
19computation. The System may require the employer to provide any
20pertinent information or documentation.
21 Whenever it determines that a payment is or may be required
22under this subsection (g), the System shall calculate the
23amount of the payment and bill the employer for that amount.
24The bill shall specify the calculations used to determine the
25amount due. If the employer disputes the amount of the bill, it
26may, within 30 days after receipt of the bill, apply to the

SB2195- 95 -LRB100 12227 RPS 24732 b
1System in writing for a recalculation. The application must
2specify in detail the grounds of the dispute and, if the
3employer asserts that the calculation is subject to subsection
4(h) or (i) of this Section, must include an affidavit setting
5forth and attesting to all facts within the employer's
6knowledge that are pertinent to the applicability of subsection
7(h) or (i). Upon receiving a timely application for
8recalculation, the System shall review the application and, if
9appropriate, recalculate the amount due.
10 The employer contributions required under this subsection
11(g) may be paid in the form of a lump sum within 90 days after
12receipt of the bill. If the employer contributions are not paid
13within 90 days after receipt of the bill, then interest will be
14charged at a rate equal to the System's annual actuarially
15assumed rate of return on investment compounded annually from
16the 91st day after receipt of the bill. Payments must be
17concluded within 3 years after the employer's receipt of the
18bill.
19 When assessing payment for any amount due under this
20subsection (g), the System shall include earnings, to the
21extent not established by a participant under Section 15-113.11
22or 15-113.12, that would have been paid to the participant had
23the participant not taken (i) periods of voluntary or
24involuntary furlough occurring on or after July 1, 2015 and on
25or before June 30, 2017 or (ii) periods of voluntary pay
26reduction in lieu of furlough occurring on or after July 1,

SB2195- 96 -LRB100 12227 RPS 24732 b
12015 and on or before June 30, 2017. Determining earnings that
2would have been paid to a participant had the participant not
3taken periods of voluntary or involuntary furlough or periods
4of voluntary pay reduction shall be the responsibility of the
5employer, and shall be reported in a manner prescribed by the
6System.
7 (g-1) For academic years beginning on or after July 1,
82018, if the amount of a participant's earnings for any
9academic year used to determine the final rate of earnings,
10determined on a full-time equivalent basis, exceeds the amount
11of his or her earnings with the same employer for the previous
12academic year, determined on a full-time equivalent basis, by
13more than the unadjusted percentage increase in the consumer
14price index-u for the calendar year immediately preceding the
15beginning of the academic year, published by the Public Pension
16Division of the Department of Insurance by November 1 of each
17year, then the participant's employer shall pay to the System,
18in addition to all other payments required under this Section
19and in accordance with guidelines established by the System,
20the present value of the increase in benefits resulting from
21the portion of the increase in earnings that is in excess of
22the unadjusted percentage increase in the consumer price
23index-u for the applicable calendar year. This present value
24shall be computed by the System on the basis of the actuarial
25assumptions and tables used in the most recent actuarial
26valuation of the System that is available at the time of the

SB2195- 97 -LRB100 12227 RPS 24732 b
1computation. The System may require the employer to provide any
2pertinent information or documentation.
3 Whenever it determines that a payment is or may be required
4under this subsection (g-1), the System shall calculate the
5amount of the payment and bill the employer for that amount.
6The bill shall specify the calculations used to determine the
7amount due. If the employer disputes the amount of the bill, it
8may, within 30 days after receipt of the bill, apply to the
9System in writing for a recalculation. The application must
10specify in detail the grounds of the dispute and, if the
11employer asserts that the calculation is subject to subsection
12(i-1) of this Section, must include an affidavit setting forth
13and attesting to all facts within the employer's knowledge that
14are pertinent to the applicability of subsection (i-1). Upon
15receiving a timely application for recalculation, the System
16shall review the application and, if appropriate, recalculate
17the amount due.
18 The employer contributions required under this subsection
19(g-1) may be paid in the form of a lump sum within 90 days after
20receipt of the bill. If the employer contributions are not paid
21within 90 days after receipt of the bill, then interest shall
22be charged at a rate equal to the System's annual actuarially
23assumed rate of return on investment compounded annually from
24the 91st day after receipt of the bill. Payments must be
25concluded within 3 years after the employer's receipt of the
26bill.

SB2195- 98 -LRB100 12227 RPS 24732 b
1 For the purposes of this Section, "consumer price index-u"
2means the index published by the Bureau of Labor Statistics of
3the United States Department of Labor that measures the average
4change in prices of goods and services purchased by all urban
5consumers, United States city average, all items, 1982-84 =
6100. The new amount resulting from each annual adjustment shall
7be determined by the Public Pension Division of the Department
8of Insurance and made available to the boards of the retirement
9systems and pension funds by November 1 of each year.
10 (h) This subsection (h) applies only to payments made or
11salary increases given on or after June 1, 2005 but before July
121, 2011. The changes made by Public Act 94-1057 shall not
13require the System to refund any payments received before July
1431, 2006 (the effective date of Public Act 94-1057).
15 When assessing payment for any amount due under subsection
16(g), the System shall exclude earnings increases paid to
17participants under contracts or collective bargaining
18agreements entered into, amended, or renewed before June 1,
192005.
20 When assessing payment for any amount due under subsection
21(g), the System shall exclude earnings increases paid to a
22participant at a time when the participant is 10 or more years
23from retirement eligibility under Section 15-135.
24 When assessing payment for any amount due under subsection
25(g), the System shall exclude earnings increases resulting from
26overload work, including a contract for summer teaching, or

SB2195- 99 -LRB100 12227 RPS 24732 b
1overtime when the employer has certified to the System, and the
2System has approved the certification, that: (i) in the case of
3overloads (A) the overload work is for the sole purpose of
4academic instruction in excess of the standard number of
5instruction hours for a full-time employee occurring during the
6academic year that the overload is paid and (B) the earnings
7increases are equal to or less than the rate of pay for
8academic instruction computed using the participant's current
9salary rate and work schedule; and (ii) in the case of
10overtime, the overtime was necessary for the educational
11mission.
12 When assessing payment for any amount due under subsection
13(g), the System shall exclude any earnings increase resulting
14from (i) a promotion for which the employee moves from one
15classification to a higher classification under the State
16Universities Civil Service System, (ii) a promotion in academic
17rank for a tenured or tenure-track faculty position, or (iii) a
18promotion that the Illinois Community College Board has
19recommended in accordance with subsection (k) of this Section.
20These earnings increases shall be excluded only if the
21promotion is to a position that has existed and been filled by
22a member for no less than one complete academic year and the
23earnings increase as a result of the promotion is an increase
24that results in an amount no greater than the average salary
25paid for other similar positions.
26 (i) When assessing payment for any amount due under

SB2195- 100 -LRB100 12227 RPS 24732 b
1subsection (g), the System shall exclude any salary increase
2described in subsection (h) of this Section given on or after
3July 1, 2011 but before July 1, 2014 under a contract or
4collective bargaining agreement entered into, amended, or
5renewed on or after June 1, 2005 but before July 1, 2011.
6Notwithstanding any other provision of this Section, any
7payments made or salary increases given after June 30, 2014
8shall be used in assessing payment for any amount due under
9subsection (g) of this Section.
10 (i-1) When assessing payment for any amount due under
11subsection (g-1), the System shall exclude salary increases
12paid to participants under contracts or collective bargaining
13agreements entered into, amended, or renewed before the
14effective date of this amendatory Act of the 100th General
15Assembly.
16 (j) The System shall prepare a report and file copies of
17the report with the Governor and the General Assembly by
18January 1, 2007 that contains all of the following information:
19 (1) The number of recalculations required by the
20 changes made to this Section by Public Act 94-1057 for each
21 employer.
22 (2) The dollar amount by which each employer's
23 contribution to the System was changed due to
24 recalculations required by Public Act 94-1057.
25 (3) The total amount the System received from each
26 employer as a result of the changes made to this Section by

SB2195- 101 -LRB100 12227 RPS 24732 b
1 Public Act 94-4.
2 (4) The increase in the required State contribution
3 resulting from the changes made to this Section by Public
4 Act 94-1057.
5 (j-5) For academic years beginning on or after July 1,
62018, if the amount of a participant's earnings for any
7academic year, determined on a full-time equivalent basis,
8exceeds $140,000, the participant's employer shall pay to the
9System, in addition to all other payments required under this
10Section and in accordance with guidelines established by the
11System, the amount of the earnings that exceed $140,000
12multiplied by the level percentage of payroll used in that
13fiscal year, as determined by the System, to be sufficient to
14bring the total assets of the System up to 90% of the total
15actuarial liabilities of the System by the end of State fiscal
16year 2045. This amount shall be computed by the System on the
17basis of the actuarial assumptions and tables used in the most
18recent actuarial valuation of the System that is available at
19the time of the computation. The System may require the
20employer to provide any pertinent information or
21documentation.
22 Whenever it determines that a payment is or may be required
23under this subsection, the System shall calculate the amount of
24the payment and bill the employer for that amount. The bill
25shall specify the calculations used to determine the amount
26due. If the employer disputes the amount of the bill, it may,

SB2195- 102 -LRB100 12227 RPS 24732 b
1within 30 days after receipt of the bill, apply to the System
2in writing for a recalculation. The application must specify in
3detail the grounds of the dispute. Upon receiving a timely
4application for recalculation, the System shall review the
5application and, if appropriate, recalculate the amount due.
6 The employer contributions required under this subsection
7may be paid in the form of a lump sum within 90 days after
8receipt of the bill. If the employer contributions are not paid
9within 90 days after receipt of the bill, then interest will be
10charged at a rate equal to the System's annual actuarially
11assumed rate of return on investment compounded annually from
12the 91st day after receipt of the bill. Payments must be
13concluded within 3 years after the employer's receipt of the
14bill.
15 (k) The Illinois Community College Board shall adopt rules
16for recommending lists of promotional positions submitted to
17the Board by community colleges and for reviewing the
18promotional lists on an annual basis. When recommending
19promotional lists, the Board shall consider the similarity of
20the positions submitted to those positions recognized for State
21universities by the State Universities Civil Service System.
22The Illinois Community College Board shall file a copy of its
23findings with the System. The System shall consider the
24findings of the Illinois Community College Board when making
25determinations under this Section. The System shall not exclude
26any earnings increases resulting from a promotion when the

SB2195- 103 -LRB100 12227 RPS 24732 b
1promotion was not submitted by a community college. Nothing in
2this subsection (k) shall require any community college to
3submit any information to the Community College Board.
4 (l) For purposes of determining the required State
5contribution to the System, the value of the System's assets
6shall be equal to the actuarial value of the System's assets,
7which shall be calculated as follows:
8 As of June 30, 2008, the actuarial value of the System's
9assets shall be equal to the market value of the assets as of
10that date. In determining the actuarial value of the System's
11assets for fiscal years after June 30, 2008, any actuarial
12gains or losses from investment return incurred in a fiscal
13year shall be recognized in equal annual amounts over the
145-year period following that fiscal year.
15 (m) For purposes of determining the required State
16contribution to the system for a particular year, the actuarial
17value of assets shall be assumed to earn a rate of return equal
18to the system's actuarially assumed rate of return.
19(Source: P.A. 98-92, eff. 7-16-13; 98-463, eff. 8-16-13;
2099-897, eff. 1-1-17.)
21 (40 ILCS 5/15-165) (from Ch. 108 1/2, par. 15-165)
22 (Text of Section WITHOUT the changes made by P.A. 98-599,
23which has been held unconstitutional)
24 Sec. 15-165. To certify amounts and submit vouchers.
25 (a) The Board shall certify to the Governor on or before

SB2195- 104 -LRB100 12227 RPS 24732 b
1November 15 of each year until November 15, 2011 the
2appropriation required from State funds for the purposes of
3this System for the following fiscal year. The certification
4under this subsection (a) shall include a copy of the actuarial
5recommendations upon which it is based and shall specifically
6identify the System's projected State normal cost for that
7fiscal year and the projected State cost for the self-managed
8plan for that fiscal year.
9 On or before May 1, 2004, the Board shall recalculate and
10recertify to the Governor the amount of the required State
11contribution to the System for State fiscal year 2005, taking
12into account the amounts appropriated to and received by the
13System under subsection (d) of Section 7.2 of the General
14Obligation Bond Act.
15 On or before July 1, 2005, the Board shall recalculate and
16recertify to the Governor the amount of the required State
17contribution to the System for State fiscal year 2006, taking
18into account the changes in required State contributions made
19by this amendatory Act of the 94th General Assembly.
20 On or before April 1, 2011, the Board shall recalculate and
21recertify to the Governor the amount of the required State
22contribution to the System for State fiscal year 2011, applying
23the changes made by Public Act 96-889 to the System's assets
24and liabilities as of June 30, 2009 as though Public Act 96-889
25was approved on that date.
26 (a-5) On or before November 1 of each year, beginning

SB2195- 105 -LRB100 12227 RPS 24732 b
1November 1, 2012, the Board shall submit to the State Actuary,
2the Governor, and the General Assembly a proposed certification
3of the amount of the required State contribution to the System
4for the next fiscal year, along with all of the actuarial
5assumptions, calculations, and data upon which that proposed
6certification is based. On or before January 1 of each year,
7beginning January 1, 2013, the State Actuary shall issue a
8preliminary report concerning the proposed certification and
9identifying, if necessary, recommended changes in actuarial
10assumptions that the Board must consider before finalizing its
11certification of the required State contributions. On or before
12January 15, 2013 and each January 15 thereafter, the Board
13shall certify to the Governor and the General Assembly the
14amount of the required State contribution for the next fiscal
15year. The Board's certification must note, in a written
16response to the State Actuary, any deviations from the State
17Actuary's recommended changes, the reason or reasons for not
18following the State Actuary's recommended changes, and the
19fiscal impact of not following the State Actuary's recommended
20changes on the required State contribution.
21 (a-15) As soon as practical after the effective date of
22this amendatory Act of the 100th General Assembly, the Board
23shall recalculate and recertify to the State Actuary, the
24Governor, and the General Assembly the amount of the State
25contribution to the System for State fiscal year 2018, taking
26into account the changes in required State contributions made

SB2195- 106 -LRB100 12227 RPS 24732 b
1by this amendatory Act of the 100th General Assembly. The State
2Actuary shall review the assumptions and valuations underlying
3the Board's revised certification and issue a preliminary
4report concerning the proposed recertification and
5identifying, if necessary, recommended changes in actuarial
6assumptions that the Board must consider before finalizing its
7certification of the required State contributions. The Board's
8final certification must note any deviations from the State
9Actuary's recommended changes, the reason or reasons for not
10following the State Actuary's recommended changes, and the
11fiscal impact of not following the State Actuary's recommended
12changes on the required State contribution.
13 (b) The Board shall certify to the State Comptroller or
14employer, as the case may be, from time to time, by its
15chairperson and secretary, with its seal attached, the amounts
16payable to the System from the various funds.
17 (c) Beginning in State fiscal year 1996, on or as soon as
18possible after the 15th day of each month the Board shall
19submit vouchers for payment of State contributions to the
20System, in a total monthly amount of one-twelfth of the
21required annual State contribution certified under subsection
22(a). From the effective date of this amendatory Act of the 93rd
23General Assembly through June 30, 2004, the Board shall not
24submit vouchers for the remainder of fiscal year 2004 in excess
25of the fiscal year 2004 certified contribution amount
26determined under this Section after taking into consideration

SB2195- 107 -LRB100 12227 RPS 24732 b
1the transfer to the System under subsection (b) of Section
26z-61 of the State Finance Act. These vouchers shall be paid by
3the State Comptroller and Treasurer by warrants drawn on the
4funds appropriated to the System for that fiscal year.
5 If in any month the amount remaining unexpended from all
6other appropriations to the System for the applicable fiscal
7year (including the appropriations to the System under Section
88.12 of the State Finance Act and Section 1 of the State
9Pension Funds Continuing Appropriation Act) is less than the
10amount lawfully vouchered under this Section, the difference
11shall be paid from the General Revenue Fund under the
12continuing appropriation authority provided in Section 1.1 of
13the State Pension Funds Continuing Appropriation Act.
14 (d) So long as the payments received are the full amount
15lawfully vouchered under this Section, payments received by the
16System under this Section shall be applied first toward the
17employer contribution to the self-managed plan established
18under Section 15-158.2. Payments shall be applied second toward
19the employer's portion of the normal costs of the System, as
20defined in subsection (f) of Section 15-155. The balance shall
21be applied toward the unfunded actuarial liabilities of the
22System.
23 (e) In the event that the System does not receive, as a
24result of legislative enactment or otherwise, payments
25sufficient to fully fund the employer contribution to the
26self-managed plan established under Section 15-158.2 and to

SB2195- 108 -LRB100 12227 RPS 24732 b
1fully fund that portion of the employer's portion of the normal
2costs of the System, as calculated in accordance with Section
315-155(a-1), then any payments received shall be applied
4proportionately to the optional retirement program established
5under Section 15-158.2 and to the employer's portion of the
6normal costs of the System, as calculated in accordance with
7Section 15-155(a-1).
8(Source: P.A. 97-694, eff. 6-18-12; 98-92, eff. 7-16-13.)
9 (40 ILCS 5/15-185.5 new)
10 Sec. 15-185.5. Accelerated pension benefit payment.
11 (a) As used in this Section:
12 "Eligible person" means a person who:
13 (1) has terminated service;
14 (2) has accrued sufficient service credit to be
15 eligible to receive a retirement annuity under this
16 Article;
17 (3) has not received any retirement annuity under this
18 Article;
19 (4) does not have a QILDRO in effect against him or her
20 under this Article; and
21 (5) is not a participant in the self-managed plan under
22 Section 15-158.2.
23 "Pension benefit" means the benefits under this Article, or
24Article 1 as it relates to those benefits, including any
25anticipated annual increases, that an eligible person is

SB2195- 109 -LRB100 12227 RPS 24732 b
1entitled to upon attainment of the applicable retirement age.
2"Pension benefit" also includes applicable survivor's or
3disability benefits.
4 (b) Before January 1, 2018, and annually thereafter, the
5System shall calculate, using actuarial tables and other
6assumptions adopted by the Board, the net present value of
7pension benefits for each eligible person and shall offer each
8eligible person the opportunity to irrevocably elect to receive
9an amount determined by the System to be equal to 70% of the
10net present value of his or her pension benefits in lieu of
11receiving any pension benefit. The offer shall specify the
12dollar amount that the eligible person will receive if he or
13she so elects and shall expire when a subsequent offer is made
14to the eligible person or when the System determines that 10%
15of eligible persons in that year have made the election under
16this subsection, whichever occurs first. The System shall make
17a good faith effort to contact every eligible person to notify
18him or her of the election and of the amount of the accelerated
19pension benefit payment.
20 Until the System determines that 10% of eligible persons in
21that year have made the election under this subsection, an
22eligible person may irrevocably elect to receive an accelerated
23pension benefit payment in the amount that the System offers
24under this subsection in lieu of receiving any pension benefit.
25A person who elects to receive an accelerated pension benefit
26payment under this Section may not elect to proceed under the

SB2195- 110 -LRB100 12227 RPS 24732 b
1Retirement Systems Reciprocal Act with respect to service under
2this Article.
3 (c) A person's credits and creditable service under this
4Article shall be terminated upon the person's receipt of an
5accelerated pension benefit payment under this Section, and no
6other benefit shall be paid under this Article based on those
7terminated credits and creditable service, including any
8retirement, survivor, or other benefit or refund; except that
9to the extent that participation, benefits, or premiums under
10the State Employees Group Insurance Act of 1971 are based on
11the amount of service credit, the terminated service credit
12shall be used for that purpose.
13 (d) If a person who has received an accelerated pension
14benefit payment under this Section returns to participating
15employee status under this Article, then:
16 (1) Any benefits under the System earned as a result of
17 that return to participating employee status shall be based
18 solely on the person's credits and creditable service
19 arising from the return to participating employee status.
20 (2) The accelerated pension benefit payment may not be
21 repaid to the System, and the terminated credits and
22 creditable service may not under any circumstances be
23 reinstated.
24 (e) As a condition of receiving an accelerated pension
25benefit payment, an eligible person must have another
26retirement plan or account qualified under the Internal Revenue

SB2195- 111 -LRB100 12227 RPS 24732 b
1Code of 1986, as amended, for the accelerated pension benefit
2payment to be rolled into. The accelerated pension benefit
3payment under this Section may be subject to withholding or
4payment of applicable taxes, but to the extent permitted by
5federal law, a person who receives an accelerated pension
6benefit payment under this Section must direct the System to
7pay all of that payment as a rollover into another retirement
8plan or account qualified under the Internal Revenue Code of
91986, as amended.
10 (f) Before January 1, 2019 and every January 1 thereafter,
11the Board shall certify to the Illinois Finance Authority and
12the General Assembly the amount by which the total amount of
13accelerated pension benefit payments made under this Section
14exceed the amount appropriated to the System for the purpose of
15making those payments.
16 (g) The Board shall adopt any rules necessary to implement
17this Section.
18 (h) No provision of this Section shall be interpreted in a
19way that would cause the applicable System to cease to be a
20qualified plan under the Internal Revenue Code of 1986.
21 (i) Notwithstanding any other provision of this Section, in
22no case shall the total amount of accelerated pension benefit
23payments paid under this Section, Section 14-147.5, and Section
2416-190.5 cause the Illinois Finance Authority to issue more
25than the $250,000,000 of State Pension Obligation Acceleration
26Bonds authorized in subsection (c-5) of Section 801-40 of the

SB2195- 112 -LRB100 12227 RPS 24732 b
1Illinois Finance Authority Act.
2 (40 ILCS 5/15-198)
3 (Text of Section WITHOUT the changes made by P.A. 98-599,
4which has been held unconstitutional)
5 Sec. 15-198. Application and expiration of new benefit
6increases.
7 (a) As used in this Section, "new benefit increase" means
8an increase in the amount of any benefit provided under this
9Article, or an expansion of the conditions of eligibility for
10any benefit under this Article, that results from an amendment
11to this Code that takes effect after the effective date of this
12amendatory Act of the 94th General Assembly. "New benefit
13increase", however, does not include any benefit increase
14resulting from the changes made to this Article by this
15amendatory Act of the 100th General Assembly.
16 (b) Notwithstanding any other provision of this Code or any
17subsequent amendment to this Code, every new benefit increase
18is subject to this Section and shall be deemed to be granted
19only in conformance with and contingent upon compliance with
20the provisions of this Section.
21 (c) The Public Act enacting a new benefit increase must
22identify and provide for payment to the System of additional
23funding at least sufficient to fund the resulting annual
24increase in cost to the System as it accrues.
25 Every new benefit increase is contingent upon the General

SB2195- 113 -LRB100 12227 RPS 24732 b
1Assembly providing the additional funding required under this
2subsection. The Commission on Government Forecasting and
3Accountability shall analyze whether adequate additional
4funding has been provided for the new benefit increase and
5shall report its analysis to the Public Pension Division of the
6Department of Insurance Financial and Professional Regulation.
7A new benefit increase created by a Public Act that does not
8include the additional funding required under this subsection
9is null and void. If the Public Pension Division determines
10that the additional funding provided for a new benefit increase
11under this subsection is or has become inadequate, it may so
12certify to the Governor and the State Comptroller and, in the
13absence of corrective action by the General Assembly, the new
14benefit increase shall expire at the end of the fiscal year in
15which the certification is made.
16 (d) Every new benefit increase shall expire 5 years after
17its effective date or on such earlier date as may be specified
18in the language enacting the new benefit increase or provided
19under subsection (c). This does not prevent the General
20Assembly from extending or re-creating a new benefit increase
21by law.
22 (e) Except as otherwise provided in the language creating
23the new benefit increase, a new benefit increase that expires
24under this Section continues to apply to persons who applied
25and qualified for the affected benefit while the new benefit
26increase was in effect and to the affected beneficiaries and

SB2195- 114 -LRB100 12227 RPS 24732 b
1alternate payees of such persons, but does not apply to any
2other person, including without limitation a person who
3continues in service after the expiration date and did not
4apply and qualify for the affected benefit while the new
5benefit increase was in effect.
6(Source: P.A. 94-4, eff. 6-1-05.)
7 (40 ILCS 5/15-200.1 new)
8 Sec. 15-200.1. Defined contribution plan.
9 (a) By July 1, 2018, the System shall prepare and implement
10a voluntary defined contribution plan for up to 5% of eligible
11Tier 1 employees. The System shall determine the 5% cap by the
12number of Tier 1 employees on the effective date of this
13Section. The defined contribution plan developed under this
14Section shall be a plan that aggregates employer and employee
15contributions in individual participant accounts which, after
16meeting any other requirements, are used for payouts after
17retirement in accordance with this Section and any other
18applicable laws.
19 As used in this Section, "defined benefit plan" means the
20retirement plan available under this Article to Tier 1
21employees who have not made the election authorized under this
22Section.
23 (1) Under the defined contribution plan, a Tier 1
24 employee of this System could elect to cease accruing
25 benefits in the defined benefit plan under this Article and

SB2195- 115 -LRB100 12227 RPS 24732 b
1 begin accruing benefits for future service in the defined
2 contribution plan. Service credit under the defined
3 contribution plan may be used for determining retirement
4 eligibility under the defined benefit plan. A Tier 1
5 employee who elects to cease accruing benefits in his or
6 her defined benefit plan shall be prohibited from
7 purchasing service credit on or after the date of his or
8 her election. A Tier 1 employee making the irrevocable
9 election provided under this Section shall not receive
10 interest accruals to his or her Rule 2 benefit on or after
11 the date of his or her election.
12 (2) Participants in the defined contribution plan
13 shall pay employee contributions at the same rate as other
14 participants under this Article as determined by the
15 System.
16 (3) State contributions shall be paid into the accounts
17 of all participants in the defined contribution plan at a
18 uniform rate, expressed as a percentage of earnings and
19 determined for each year. This rate shall be no higher than
20 the employer's normal cost for Tier 1 employees in the
21 defined benefit plan for that year, as determined by the
22 System and expressed as a percentage of earnings, and shall
23 be no lower than 3% of earnings. The State shall adjust
24 this rate annually.
25 (4) The defined contribution plan shall require 5 years
26 of participation in the defined contribution plan before

SB2195- 116 -LRB100 12227 RPS 24732 b
1 vesting in State contributions. If the participant fails to
2 vest in them, the State contributions, and the earnings
3 thereon, shall be forfeited.
4 (5) The defined contribution plan may provide for
5 participants in the plan to be eligible for the defined
6 disability benefits available to other participants under
7 this Article. If it does, the System shall reduce the
8 employee contributions credited to the member's defined
9 contribution plan account by an amount determined by the
10 System to cover the cost of offering such benefits.
11 (6) The defined contribution plan shall provide a
12 variety of options for investments. These options shall
13 include investments handled by the System as well as
14 private sector investment options.
15 (7) The defined contribution plan shall provide a
16 variety of options for payouts to retirees and their
17 survivors.
18 (8) To the extent authorized under federal law and as
19 authorized by the System, the plan shall allow former
20 participants in the plan to transfer or roll over employee
21 and vested State contributions, and the earnings thereon,
22 into other qualified retirement plans.
23 (9) The System shall reduce the employee contributions
24 credited to the member's defined contribution plan account
25 by an amount determined by the System to cover the cost of
26 offering these benefits and any applicable administrative

SB2195- 117 -LRB100 12227 RPS 24732 b
1 fees.
2 (b) Only persons who are Tier 1 employees of the System on
3the effective date of this Section are eligible to participate
4in the defined contribution plan. Participation in the defined
5contribution plan shall be limited to the first 5% of eligible
6persons who elect to participate. The election to participate
7in the defined contribution plan is voluntary and irrevocable.
8 (c) An eligible Tier 1 employee may irrevocably elect to
9participate in the defined contribution plan by filing with the
10System a written application to participate that is received by
11the System prior to its determination that 5% of eligible
12persons have elected to participate in the defined contribution
13plan.
14 When the System first determines that 5% of eligible
15persons have elected to participate in the defined contribution
16plan, the System shall provide notice to previously eligible
17employees that the plan is no longer available and shall cease
18accepting applications to participate.
19 (d) The System shall make a good faith effort to contact
20each Tier 1 employee who is eligible to participate in the
21defined contribution plan. The System shall mail information
22describing the option to join the defined contribution plan to
23each of these employees to his or her last known address on
24file with the System. If the employee is not responsive to
25other means of contact, it is sufficient for the System to
26publish the details of the option on its website.

SB2195- 118 -LRB100 12227 RPS 24732 b
1 Upon request for further information describing the
2option, the System shall provide employees with information
3from the System before exercising the option to join the plan,
4including information on the impact to their vested benefits or
5non-vested service. The individual consultation shall include
6projections of the member's defined benefits at retirement or
7earlier termination of service and the value of the member's
8account at retirement or earlier termination of service. The
9System shall not provide advice or counseling with respect to
10whether the employee should exercise the option. The System
11shall inform Tier 1 employees who are eligible to participate
12in the defined contribution plan that they may also wish to
13obtain information and counsel relating to their option from
14any other available source, including but not limited to labor
15organizations, private counsel, and financial advisors.
16 (e) In no event shall the System, its staff, its authorized
17representatives, or the Board be liable for any information
18given to an employee under this Section. The System may
19coordinate with the Illinois Department of Central Management
20Services and other retirement systems administering a defined
21contribution plan in accordance with this amendatory Act of the
22100th General Assembly to provide information concerning the
23impact of the option set forth in this Section.
24 (f) Notwithstanding any other provision of this Section, no
25person shall begin participating in the defined contribution
26plan until it has attained qualified plan status and received

SB2195- 119 -LRB100 12227 RPS 24732 b
1all necessary approvals from the U.S. Internal Revenue Service.
2 (g) The System shall report on its progress under this
3Section, including the available details of the defined
4contribution plan and the System's plans for informing eligible
5Tier 1 employees about the plan, to the Governor and the
6General Assembly on or before January 15, 2018.
7 (h) If a Tier 1 employee has not made an election under
8Section 15-134.5 of this Code, then the plan prescribed under
9this Section shall not apply to that Tier 1 employee and that
10Tier 1 employee shall remain eligible to make the election
11prescribed under Section 15-134.5.
12 (i) The intent of this amendatory Act of the 100th General
13Assembly is to ensure that the State's normal cost of
14participation in the defined contribution plan is similar, and
15if possible equal, to the State's normal cost of participation
16in the defined benefit plan, unless a lower State's normal cost
17is necessary to ensure cost neutrality.
18 (40 ILCS 5/15-201.1 new)
19 Sec. 15-201.1. Defined contribution plan; termination. If
20the defined contribution plan under Section 15-200.1 is
21terminated or becomes inoperative pursuant to law, then each
22participant in the plan shall automatically be deemed to have
23been a contributing Tier 1 employee participating in the
24System's defined benefit plan during the time in which he or
25she participated in the defined contribution plan, and for that

SB2195- 120 -LRB100 12227 RPS 24732 b
1purpose the System shall be entitled to recover the amounts in
2the participant's defined contribution accounts.
3 (40 ILCS 5/16-107.1 new)
4 Sec. 16-107.1. Tier 1 employee. "Tier 1 employee": A
5teacher under this Article who first became a member or
6participant before January 1, 2011 under any reciprocal
7retirement system or pension fund established under this Code
8other than a retirement system or pension fund established
9under Article 2, 3, 4, 5, 6, or 18 of this Code.
10 (40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
11 (Text of Section WITHOUT the changes made by P.A. 98-599,
12which has been held unconstitutional)
13 Sec. 16-158. Contributions by State and other employing
14units.
15 (a) The State shall make contributions to the System by
16means of appropriations from the Common School Fund and other
17State funds of amounts which, together with other employer
18contributions, employee contributions, investment income, and
19other income, will be sufficient to meet the cost of
20maintaining and administering the System on a 90% funded basis
21in accordance with actuarial recommendations.
22 The Board shall determine the amount of State contributions
23required for each fiscal year on the basis of the actuarial
24tables and other assumptions adopted by the Board and the

SB2195- 121 -LRB100 12227 RPS 24732 b
1recommendations of the actuary, using the formula in subsection
2(b-3).
3 (a-1) Annually, on or before November 15 until November 15,
42011, the Board shall certify to the Governor the amount of the
5required State contribution for the coming fiscal year. The
6certification under this subsection (a-1) shall include a copy
7of the actuarial recommendations upon which it is based and
8shall specifically identify the System's projected State
9normal cost for that fiscal year.
10 On or before May 1, 2004, the Board shall recalculate and
11recertify to the Governor the amount of the required State
12contribution to the System for State fiscal year 2005, taking
13into account the amounts appropriated to and received by the
14System under subsection (d) of Section 7.2 of the General
15Obligation Bond Act.
16 On or before July 1, 2005, the Board shall recalculate and
17recertify to the Governor the amount of the required State
18contribution to the System for State fiscal year 2006, taking
19into account the changes in required State contributions made
20by this amendatory Act of the 94th General Assembly.
21 On or before April 1, 2011, the Board shall recalculate and
22recertify to the Governor the amount of the required State
23contribution to the System for State fiscal year 2011, applying
24the changes made by Public Act 96-889 to the System's assets
25and liabilities as of June 30, 2009 as though Public Act 96-889
26was approved on that date.

SB2195- 122 -LRB100 12227 RPS 24732 b
1 (a-5) On or before November 1 of each year, beginning
2November 1, 2012, the Board shall submit to the State Actuary,
3the Governor, and the General Assembly a proposed certification
4of the amount of the required State contribution to the System
5for the next fiscal year, along with all of the actuarial
6assumptions, calculations, and data upon which that proposed
7certification is based. On or before January 1 of each year,
8beginning January 1, 2013, the State Actuary shall issue a
9preliminary report concerning the proposed certification and
10identifying, if necessary, recommended changes in actuarial
11assumptions that the Board must consider before finalizing its
12certification of the required State contributions. On or before
13January 15, 2013 and each January 15 thereafter, the Board
14shall certify to the Governor and the General Assembly the
15amount of the required State contribution for the next fiscal
16year. The Board's certification must note any deviations from
17the State Actuary's recommended changes, the reason or reasons
18for not following the State Actuary's recommended changes, and
19the fiscal impact of not following the State Actuary's
20recommended changes on the required State contribution.
21 (a-15) As soon as practical after the effective date of
22this amendatory Act of the 100th General Assembly, the Board
23shall recalculate and recertify to the State Actuary, the
24Governor, and the General Assembly the amount of the State
25contribution to the System for State fiscal year 2018, taking
26into account the changes in required State contributions made

SB2195- 123 -LRB100 12227 RPS 24732 b
1by this amendatory Act of the 100th General Assembly. The State
2Actuary shall review the assumptions and valuations underlying
3the Board's revised certification and issue a preliminary
4report concerning the proposed recertification and
5identifying, if necessary, recommended changes in actuarial
6assumptions that the Board must consider before finalizing its
7certification of the required State contributions. The Board's
8final certification must note any deviations from the State
9Actuary's recommended changes, the reason or reasons for not
10following the State Actuary's recommended changes, and the
11fiscal impact of not following the State Actuary's recommended
12changes on the required State contribution.
13 (b) Through State fiscal year 1995, the State contributions
14shall be paid to the System in accordance with Section 18-7 of
15the School Code.
16 (b-1) Beginning in State fiscal year 1996, on the 15th day
17of each month, or as soon thereafter as may be practicable, the
18Board shall submit vouchers for payment of State contributions
19to the System, in a total monthly amount of one-twelfth of the
20required annual State contribution certified under subsection
21(a-1). From the effective date of this amendatory Act of the
2293rd General Assembly through June 30, 2004, the Board shall
23not submit vouchers for the remainder of fiscal year 2004 in
24excess of the fiscal year 2004 certified contribution amount
25determined under this Section after taking into consideration
26the transfer to the System under subsection (a) of Section

SB2195- 124 -LRB100 12227 RPS 24732 b
16z-61 of the State Finance Act. These vouchers shall be paid by
2the State Comptroller and Treasurer by warrants drawn on the
3funds appropriated to the System for that fiscal year.
4 If in any month the amount remaining unexpended from all
5other appropriations to the System for the applicable fiscal
6year (including the appropriations to the System under Section
78.12 of the State Finance Act and Section 1 of the State
8Pension Funds Continuing Appropriation Act) is less than the
9amount lawfully vouchered under this subsection, the
10difference shall be paid from the Common School Fund under the
11continuing appropriation authority provided in Section 1.1 of
12the State Pension Funds Continuing Appropriation Act.
13 (b-2) Allocations from the Common School Fund apportioned
14to school districts not coming under this System shall not be
15diminished or affected by the provisions of this Article.
16 (b-3) For State fiscal years 2018 through 2045, the minimum
17contribution to the System to be made by the State for each
18fiscal year shall be an amount determined by the System to be
19sufficient to bring the total assets of the System up to 90% of
20the total actuarial liabilities of the System by the end of
21State fiscal year 2045. In making these determinations, the
22required State contribution shall be calculated each year as a
23level percentage of total payroll, including payroll that is
24not deemed pensionable, but excluding payroll attributable to
25participants in the defined contribution plan under Section
2616-205.1, over the years remaining to and including fiscal year

SB2195- 125 -LRB100 12227 RPS 24732 b
12045 and shall be determined under the projected unit credit
2actuarial cost method.
3 Beginning in State fiscal year 2018, any increase or
4decrease in State contribution over the prior fiscal year due
5exclusively to changes in actuarial or investment assumptions
6adopted by the Board shall be included in the State
7contribution to the System, as a percentage of the applicable
8employee payroll, and shall be increased in equal annual
9increments so that by the State fiscal year occurring 5 years
10after the adoption of the actuarial or investment assumptions,
11the State is contributing at the rate otherwise required under
12this Section.
13 For State fiscal years 2012 through 2017 2045, the minimum
14contribution to the System to be made by the State for each
15fiscal year shall be an amount determined by the System to be
16sufficient to bring the total assets of the System up to 90% of
17the total actuarial liabilities of the System by the end of
18State fiscal year 2045. In making these determinations, the
19required State contribution shall be calculated each year as a
20level percentage of payroll over the years remaining to and
21including fiscal year 2045 and shall be determined under the
22projected unit credit actuarial cost method.
23 For State fiscal years 1996 through 2005, the State
24contribution to the System, as a percentage of the applicable
25employee payroll, shall be increased in equal annual increments
26so that by State fiscal year 2011, the State is contributing at

SB2195- 126 -LRB100 12227 RPS 24732 b
1the rate required under this Section; except that in the
2following specified State fiscal years, the State contribution
3to the System shall not be less than the following indicated
4percentages of the applicable employee payroll, even if the
5indicated percentage will produce a State contribution in
6excess of the amount otherwise required under this subsection
7and subsection (a), and notwithstanding any contrary
8certification made under subsection (a-1) before the effective
9date of this amendatory Act of 1998: 10.02% in FY 1999; 10.77%
10in FY 2000; 11.47% in FY 2001; 12.16% in FY 2002; 12.86% in FY
112003; and 13.56% in FY 2004.
12 Notwithstanding any other provision of this Article, the
13total required State contribution for State fiscal year 2006 is
14$534,627,700.
15 Notwithstanding any other provision of this Article, the
16total required State contribution for State fiscal year 2007 is
17$738,014,500.
18 For each of State fiscal years 2008 through 2009, the State
19contribution to the System, as a percentage of the applicable
20employee payroll, shall be increased in equal annual increments
21from the required State contribution for State fiscal year
222007, so that by State fiscal year 2011, the State is
23contributing at the rate otherwise required under this Section.
24 Notwithstanding any other provision of this Article, the
25total required State contribution for State fiscal year 2010 is
26$2,089,268,000 and shall be made from the proceeds of bonds

SB2195- 127 -LRB100 12227 RPS 24732 b
1sold in fiscal year 2010 pursuant to Section 7.2 of the General
2Obligation Bond Act, less (i) the pro rata share of bond sale
3expenses determined by the System's share of total bond
4proceeds, (ii) any amounts received from the Common School Fund
5in fiscal year 2010, and (iii) any reduction in bond proceeds
6due to the issuance of discounted bonds, if applicable.
7 Notwithstanding any other provision of this Article, the
8total required State contribution for State fiscal year 2011 is
9the amount recertified by the System on or before April 1, 2011
10pursuant to subsection (a-1) of this Section and shall be made
11from the proceeds of bonds sold in fiscal year 2011 pursuant to
12Section 7.2 of the General Obligation Bond Act, less (i) the
13pro rata share of bond sale expenses determined by the System's
14share of total bond proceeds, (ii) any amounts received from
15the Common School Fund in fiscal year 2011, and (iii) any
16reduction in bond proceeds due to the issuance of discounted
17bonds, if applicable. This amount shall include, in addition to
18the amount certified by the System, an amount necessary to meet
19employer contributions required by the State as an employer
20under paragraph (e) of this Section, which may also be used by
21the System for contributions required by paragraph (a) of
22Section 16-127.
23 Beginning in State fiscal year 2046, the minimum State
24contribution for each fiscal year shall be the amount needed to
25maintain the total assets of the System at 90% of the total
26actuarial liabilities of the System.

SB2195- 128 -LRB100 12227 RPS 24732 b
1 Amounts received by the System pursuant to Section 25 of
2the Budget Stabilization Act or Section 8.12 of the State
3Finance Act in any fiscal year do not reduce and do not
4constitute payment of any portion of the minimum State
5contribution required under this Article in that fiscal year.
6Such amounts shall not reduce, and shall not be included in the
7calculation of, the required State contributions under this
8Article in any future year until the System has reached a
9funding ratio of at least 90%. A reference in this Article to
10the "required State contribution" or any substantially similar
11term does not include or apply to any amounts payable to the
12System under Section 25 of the Budget Stabilization Act.
13 Notwithstanding any other provision of this Section, the
14required State contribution for State fiscal year 2005 and for
15fiscal year 2008 and each fiscal year thereafter, as calculated
16under this Section and certified under subsection (a-1), shall
17not exceed an amount equal to (i) the amount of the required
18State contribution that would have been calculated under this
19Section for that fiscal year if the System had not received any
20payments under subsection (d) of Section 7.2 of the General
21Obligation Bond Act, minus (ii) the portion of the State's
22total debt service payments for that fiscal year on the bonds
23issued in fiscal year 2003 for the purposes of that Section
247.2, as determined and certified by the Comptroller, that is
25the same as the System's portion of the total moneys
26distributed under subsection (d) of Section 7.2 of the General

SB2195- 129 -LRB100 12227 RPS 24732 b
1Obligation Bond Act. In determining this maximum for State
2fiscal years 2008 through 2010, however, the amount referred to
3in item (i) shall be increased, as a percentage of the
4applicable employee payroll, in equal increments calculated
5from the sum of the required State contribution for State
6fiscal year 2007 plus the applicable portion of the State's
7total debt service payments for fiscal year 2007 on the bonds
8issued in fiscal year 2003 for the purposes of Section 7.2 of
9the General Obligation Bond Act, so that, by State fiscal year
102011, the State is contributing at the rate otherwise required
11under this Section.
12 (b-4) For employees first hired on or after 6 months after
13the effective date of this amendatory Act of the 100th General
14Assembly who have elected the benefits under Section 1-161 of
15this Code, the employer shall annually contribute an amount,
16expressed as a percentage of payroll, equal to the defined
17benefit normal cost of the defined benefit plan, less the
18employee contribution, plus 2%. On an annual basis, the System
19shall certify to each employer the amount of unfunded liability
20accrued in the employer's account to be paid by the employer so
21that the System is 90% funded by the end of State fiscal year
222045. The contributions shall be divided equally over a
2312-month period and made monthly. The employer shall also
24contribute an amount equal to the employer defined
25contribution, as set on an individual employee basis, under
26paragraph (2) of subsection (k) of Section 1-161 during each

SB2195- 130 -LRB100 12227 RPS 24732 b
1pay period. The System shall have the authority to adopt rules
2regarding implementation of employer contributions.
3 (c) Payment of the required State contributions and of all
4pensions, retirement annuities, death benefits, refunds, and
5other benefits granted under or assumed by this System, and all
6expenses in connection with the administration and operation
7thereof, are obligations of the State.
8 If members are paid from special trust or federal funds
9which are administered by the employing unit, whether school
10district or other unit, the employing unit shall pay to the
11System from such funds the full accruing retirement costs based
12upon that service, which, beginning July 1, 2014, shall be at a
13rate, expressed as a percentage of salary, equal to the total
14minimum contribution to the System to be made by the State for
15that fiscal year, including both normal cost and unfunded
16liability components, expressed as a percentage of payroll, as
17determined by the System under subsection (b-3) of this
18Section. Employer contributions, based on salary paid to
19members from federal funds, may be forwarded by the
20distributing agency of the State of Illinois to the System
21prior to allocation, in an amount determined in accordance with
22guidelines established by such agency and the System. Any
23contribution for fiscal year 2015 collected as a result of the
24change made by this amendatory Act of the 98th General Assembly
25shall be considered a State contribution under subsection (b-3)
26of this Section.

SB2195- 131 -LRB100 12227 RPS 24732 b
1 (d) Effective July 1, 1986, any employer of a teacher as
2defined in paragraph (8) of Section 16-106 shall pay the
3employer's normal cost of benefits based upon the teacher's
4service, in addition to employee contributions, as determined
5by the System. Such employer contributions shall be forwarded
6monthly in accordance with guidelines established by the
7System.
8 However, with respect to benefits granted under Section
916-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
10of Section 16-106, the employer's contribution shall be 12%
11(rather than 20%) of the member's highest annual salary rate
12for each year of creditable service granted, and the employer
13shall also pay the required employee contribution on behalf of
14the teacher. For the purposes of Sections 16-133.4 and
1516-133.5, a teacher as defined in paragraph (8) of Section
1616-106 who is serving in that capacity while on leave of
17absence from another employer under this Article shall not be
18considered an employee of the employer from which the teacher
19is on leave.
20 (e) Beginning July 1, 1998, every employer of a teacher
21shall pay to the System an employer contribution computed as
22follows:
23 (1) Beginning July 1, 1998 through June 30, 1999, the
24 employer contribution shall be equal to 0.3% of each
25 teacher's salary.
26 (2) Beginning July 1, 1999 and thereafter, the employer

SB2195- 132 -LRB100 12227 RPS 24732 b
1 contribution shall be equal to 0.58% of each teacher's
2 salary.
3The school district or other employing unit may pay these
4employer contributions out of any source of funding available
5for that purpose and shall forward the contributions to the
6System on the schedule established for the payment of member
7contributions.
8 These employer contributions are intended to offset a
9portion of the cost to the System of the increases in
10retirement benefits resulting from this amendatory Act of 1998.
11 Each employer of teachers is entitled to a credit against
12the contributions required under this subsection (e) with
13respect to salaries paid to teachers for the period January 1,
142002 through June 30, 2003, equal to the amount paid by that
15employer under subsection (a-5) of Section 6.6 of the State
16Employees Group Insurance Act of 1971 with respect to salaries
17paid to teachers for that period.
18 The additional 1% employee contribution required under
19Section 16-152 by this amendatory Act of 1998 is the
20responsibility of the teacher and not the teacher's employer,
21unless the employer agrees, through collective bargaining or
22otherwise, to make the contribution on behalf of the teacher.
23 If an employer is required by a contract in effect on May
241, 1998 between the employer and an employee organization to
25pay, on behalf of all its full-time employees covered by this
26Article, all mandatory employee contributions required under

SB2195- 133 -LRB100 12227 RPS 24732 b
1this Article, then the employer shall be excused from paying
2the employer contribution required under this subsection (e)
3for the balance of the term of that contract. The employer and
4the employee organization shall jointly certify to the System
5the existence of the contractual requirement, in such form as
6the System may prescribe. This exclusion shall cease upon the
7termination, extension, or renewal of the contract at any time
8after May 1, 1998.
9 (f) For school years beginning on or after June 1, 2005 and
10before July 1, 2018, if If the amount of a teacher's salary for
11any school year used to determine final average salary exceeds
12the member's annual full-time salary rate with the same
13employer for the previous school year by more than 6%, the
14teacher's employer shall pay to the System, in addition to all
15other payments required under this Section and in accordance
16with guidelines established by the System, the present value of
17the increase in benefits resulting from the portion of the
18increase in salary that is in excess of 6%. This present value
19shall be computed by the System on the basis of the actuarial
20assumptions and tables used in the most recent actuarial
21valuation of the System that is available at the time of the
22computation. If a teacher's salary for the 2005-2006 school
23year is used to determine final average salary under this
24subsection (f), then the changes made to this subsection (f) by
25Public Act 94-1057 shall apply in calculating whether the
26increase in his or her salary is in excess of 6%. For the

SB2195- 134 -LRB100 12227 RPS 24732 b
1purposes of this Section, change in employment under Section
210-21.12 of the School Code on or after June 1, 2005 shall
3constitute a change in employer. The System may require the
4employer to provide any pertinent information or
5documentation. The changes made to this subsection (f) by this
6amendatory Act of the 94th General Assembly apply without
7regard to whether the teacher was in service on or after its
8effective date.
9 Whenever it determines that a payment is or may be required
10under this subsection, the System shall calculate the amount of
11the payment and bill the employer for that amount. The bill
12shall specify the calculations used to determine the amount
13due. If the employer disputes the amount of the bill, it may,
14within 30 days after receipt of the bill, apply to the System
15in writing for a recalculation. The application must specify in
16detail the grounds of the dispute and, if the employer asserts
17that the calculation is subject to subsection (g) or (h) of
18this Section, must include an affidavit setting forth and
19attesting to all facts within the employer's knowledge that are
20pertinent to the applicability of that subsection. Upon
21receiving a timely application for recalculation, the System
22shall review the application and, if appropriate, recalculate
23the amount due.
24 The employer contributions required under this subsection
25(f) may be paid in the form of a lump sum within 90 days after
26receipt of the bill. If the employer contributions are not paid

SB2195- 135 -LRB100 12227 RPS 24732 b
1within 90 days after receipt of the bill, then interest will be
2charged at a rate equal to the System's annual actuarially
3assumed rate of return on investment compounded annually from
4the 91st day after receipt of the bill. Payments must be
5concluded within 3 years after the employer's receipt of the
6bill.
7 (f-1) For school years beginning on or after July 1, 2018,
8if the amount of a teacher's salary for any school year used to
9determine final average salary exceeds the member's annual
10full-time salary rate with the same employer for the previous
11school year by more than the unadjusted percentage increase in
12the consumer price index-u for the calendar year immediately
13preceding the beginning of the school year, published by the
14Public Pension Division of the Department of Insurance by
15November 1 of each year, then the teacher's employer shall pay
16to the System, in addition to all other payments required under
17this Section and in accordance with guidelines established by
18the System, the present value of the increase in benefits
19resulting from the portion of the increase in salary that is in
20excess of the unadjusted percentage increase in the consumer
21price index-u for the applicable calendar year. This present
22value shall be computed by the System on the basis of the
23actuarial assumptions and tables used in the most recent
24actuarial valuation of the System that is available at the time
25of the computation. The System may require the employer to
26provide any pertinent information or documentation.

SB2195- 136 -LRB100 12227 RPS 24732 b
1 Whenever it determines that a payment is or may be required
2under this subsection (f-1), the System shall calculate the
3amount of the payment and bill the employer for that amount.
4The bill shall specify the calculations used to determine the
5amount due. If the employer disputes the amount of the bill, it
6may, within 30 days after receipt of the bill, apply to the
7System in writing for a recalculation. The application must
8specify in detail the grounds of the dispute and, if the
9employer asserts that the calculation is subject to subsection
10(h-1) of this Section, must include an affidavit setting forth
11and attesting to all facts within the employer's knowledge that
12are pertinent to the applicability of subsection (h-1). Upon
13receiving a timely application for recalculation, the System
14shall review the application and, if appropriate, recalculate
15the amount due.
16 The employer contributions required under this subsection
17(f-1) may be paid in the form of a lump sum within 90 days after
18receipt of the bill. If the employer contributions are not paid
19within 90 days after receipt of the bill, then interest shall
20be charged at a rate equal to the System's annual actuarially
21assumed rate of return on investment compounded annually from
22the 91st day after receipt of the bill. Payments must be
23concluded within 3 years after the employer's receipt of the
24bill.
25 For the purposes of this Section, "consumer price index-u"
26means the index published by the Bureau of Labor Statistics of

SB2195- 137 -LRB100 12227 RPS 24732 b
1the United States Department of Labor that measures the average
2change in prices of goods and services purchased by all urban
3consumers, United States city average, all items, 1982-84 =
4100. The new amount resulting from each annual adjustment shall
5be determined by the Public Pension Division of the Department
6of Insurance and made available to the boards of the retirement
7systems and pension funds by November 1 of each year.
8 (g) This subsection (g) applies only to payments made or
9salary increases given on or after June 1, 2005 but before July
101, 2011. The changes made by Public Act 94-1057 shall not
11require the System to refund any payments received before July
1231, 2006 (the effective date of Public Act 94-1057).
13 When assessing payment for any amount due under subsection
14(f), the System shall exclude salary increases paid to teachers
15under contracts or collective bargaining agreements entered
16into, amended, or renewed before June 1, 2005.
17 When assessing payment for any amount due under subsection
18(f), the System shall exclude salary increases paid to a
19teacher at a time when the teacher is 10 or more years from
20retirement eligibility under Section 16-132 or 16-133.2.
21 When assessing payment for any amount due under subsection
22(f), the System shall exclude salary increases resulting from
23overload work, including summer school, when the school
24district has certified to the System, and the System has
25approved the certification, that (i) the overload work is for
26the sole purpose of classroom instruction in excess of the

SB2195- 138 -LRB100 12227 RPS 24732 b
1standard number of classes for a full-time teacher in a school
2district during a school year and (ii) the salary increases are
3equal to or less than the rate of pay for classroom instruction
4computed on the teacher's current salary and work schedule.
5 When assessing payment for any amount due under subsection
6(f), the System shall exclude a salary increase resulting from
7a promotion (i) for which the employee is required to hold a
8certificate or supervisory endorsement issued by the State
9Teacher Certification Board that is a different certification
10or supervisory endorsement than is required for the teacher's
11previous position and (ii) to a position that has existed and
12been filled by a member for no less than one complete academic
13year and the salary increase from the promotion is an increase
14that results in an amount no greater than the lesser of the
15average salary paid for other similar positions in the district
16requiring the same certification or the amount stipulated in
17the collective bargaining agreement for a similar position
18requiring the same certification.
19 When assessing payment for any amount due under subsection
20(f), the System shall exclude any payment to the teacher from
21the State of Illinois or the State Board of Education over
22which the employer does not have discretion, notwithstanding
23that the payment is included in the computation of final
24average salary.
25 (h) When assessing payment for any amount due under
26subsection (f), the System shall exclude any salary increase

SB2195- 139 -LRB100 12227 RPS 24732 b
1described in subsection (g) of this Section given on or after
2July 1, 2011 but before July 1, 2014 under a contract or
3collective bargaining agreement entered into, amended, or
4renewed on or after June 1, 2005 but before July 1, 2011.
5Notwithstanding any other provision of this Section, any
6payments made or salary increases given after June 30, 2014
7shall be used in assessing payment for any amount due under
8subsection (f) of this Section.
9 (h-1) When assessing payment for any amount due under
10subsection (f-1), the System shall exclude earnings increases
11paid to participants under contracts or collective bargaining
12agreements entered into, amended, or renewed before the
13effective date of this amendatory Act of the 100th General
14Assembly.
15 (i) The System shall prepare a report and file copies of
16the report with the Governor and the General Assembly by
17January 1, 2007 that contains all of the following information:
18 (1) The number of recalculations required by the
19 changes made to this Section by Public Act 94-1057 for each
20 employer.
21 (2) The dollar amount by which each employer's
22 contribution to the System was changed due to
23 recalculations required by Public Act 94-1057.
24 (3) The total amount the System received from each
25 employer as a result of the changes made to this Section by
26 Public Act 94-4.

SB2195- 140 -LRB100 12227 RPS 24732 b
1 (4) The increase in the required State contribution
2 resulting from the changes made to this Section by Public
3 Act 94-1057.
4 (i-5) For school years beginning on or after July 1, 2018,
5if the amount of a participant's salary for any school year,
6determined on a full-time equivalent basis, exceeds $140,000,
7the participant's employer shall pay to the System, in addition
8to all other payments required under this Section and in
9accordance with guidelines established by the System, the
10amount of earnings that exceed $140,000 multiplied by the level
11percentage of payroll used in that fiscal year as determined by
12the System to be sufficient to bring the total assets of the
13System up to 90% of the total actuarial liabilities of the
14System by the end of State fiscal year 2045. This amount shall
15be computed by the System on the basis of the actuarial
16assumptions and tables used in the most recent actuarial
17valuation of the System that is available at the time of the
18computation. The System may require the employer to provide any
19pertinent information or documentation.
20 Whenever it determines that a payment is or may be required
21under this subsection, the System shall calculate the amount of
22the payment and bill the employer for that amount. The bill
23shall specify the calculations used to determine the amount
24due. If the employer disputes the amount of the bill, it may,
25within 30 days after receipt of the bill, apply to the System
26in writing for a recalculation. The application must specify in

SB2195- 141 -LRB100 12227 RPS 24732 b
1detail the grounds of the dispute. Upon receiving a timely
2application for recalculation, the System shall review the
3application and, if appropriate, recalculate the amount due.
4 The employer contributions required under this subsection
5may be paid in the form of a lump sum within 90 days after
6receipt of the bill. If the employer contributions are not paid
7within 90 days after receipt of the bill, then interest will be
8charged at a rate equal to the System's annual actuarially
9assumed rate of return on investment compounded annually from
10the 91st day after receipt of the bill. Payments must be
11concluded within 3 years after the employer's receipt of the
12bill.
13 (j) For purposes of determining the required State
14contribution to the System, the value of the System's assets
15shall be equal to the actuarial value of the System's assets,
16which shall be calculated as follows:
17 As of June 30, 2008, the actuarial value of the System's
18assets shall be equal to the market value of the assets as of
19that date. In determining the actuarial value of the System's
20assets for fiscal years after June 30, 2008, any actuarial
21gains or losses from investment return incurred in a fiscal
22year shall be recognized in equal annual amounts over the
235-year period following that fiscal year.
24 (k) For purposes of determining the required State
25contribution to the system for a particular year, the actuarial
26value of assets shall be assumed to earn a rate of return equal

SB2195- 142 -LRB100 12227 RPS 24732 b
1to the system's actuarially assumed rate of return.
2(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11;
396-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff.
46-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
5 (40 ILCS 5/16-190.5 new)
6 Sec. 16-190.5. Accelerated pension benefit payment.
7 (a) As used in this Section:
8 "Eligible person" means a person who:
9 (1) has terminated service;
10 (2) has accrued sufficient service credit to be
11 eligible to receive a retirement annuity under this
12 Article;
13 (3) has not received any retirement annuity under this
14 Article; and
15 (4) does not have a QILDRO in effect against him or her
16 under this Article.
17 "Pension benefit" means the benefits under this Article, or
18Article 1 as it relates to those benefits, including any
19anticipated annual increases, that an eligible person is
20entitled to upon attainment of the applicable retirement age.
21"Pension benefit" also includes applicable survivor's or
22disability benefits.
23 (b) Before January 1, 2018, and annually thereafter, the
24System shall calculate, using actuarial tables and other
25assumptions adopted by the Board, the net present value of

SB2195- 143 -LRB100 12227 RPS 24732 b
1pension benefits for each eligible person and shall offer each
2eligible person the opportunity to irrevocably elect to receive
3an amount determined by the System to be equal to 70% of the
4net present value of his or her pension benefits in lieu of
5receiving any pension benefit. The offer shall specify the
6dollar amount that the eligible person will receive if he or
7she so elects and shall expire when a subsequent offer is made
8to the eligible person or when the System determines that 10%
9of eligible persons in that year have made the election under
10this subsection, whichever occurs first. The System shall make
11a good faith effort to contact every eligible person to notify
12him or her of the election and of the amount of the accelerated
13pension benefit payment.
14 Until the System determines that 10% of eligible persons in
15that year have made the election under this subsection, an
16eligible person may irrevocably elect to receive an accelerated
17pension benefit payment in the amount that the System offers
18under this subsection in lieu of receiving any pension benefit.
19A person who elects to receive an accelerated pension benefit
20payment under this Section may not elect to proceed under the
21Retirement Systems Reciprocal Act with respect to service under
22this Article.
23 (c) A person's credits and creditable service under this
24Article shall be terminated upon the person's receipt of an
25accelerated pension benefit payment under this Section, and no
26other benefit shall be paid under this Article based on those

SB2195- 144 -LRB100 12227 RPS 24732 b
1terminated credits and creditable service, including any
2retirement, survivor, or other benefit or refund; except that
3to the extent that participation, benefits, or premiums under
4the State Employees Group Insurance Act of 1971 are based on
5the amount of service credit, the terminated service credit
6shall be used for that purpose.
7 (d) If a person who has received an accelerated pension
8benefit payment under this Section returns to active service
9under this Article, then:
10 (1) Any benefits under the System earned as a result of
11 that return to active service shall be based solely on the
12 person's credits and creditable service arising from the
13 return to active service.
14 (2) The accelerated pension benefit payment may not be
15 repaid to the System, and the terminated credits and
16 creditable service may not under any circumstances be
17 reinstated.
18 (e) As a condition of receiving an accelerated pension
19benefit payment, an eligible person must have another
20retirement plan or account qualified under the Internal Revenue
21Code of 1986, as amended, for the accelerated pension benefit
22payment to be rolled into. The accelerated pension benefit
23payment under this Section may be subject to withholding or
24payment of applicable taxes, but to the extent permitted by
25federal law, a person who receives an accelerated pension
26benefit payment under this Section must direct the System to

SB2195- 145 -LRB100 12227 RPS 24732 b
1pay all of that payment as a rollover into another retirement
2plan or account qualified under the Internal Revenue Code of
31986, as amended.
4 (f) Before January 1, 2019 and every January 1 thereafter,
5the Board shall certify to the Illinois Finance Authority and
6the General Assembly the amount by which the total amount of
7accelerated pension benefit payments made under this Section
8exceed the amount appropriated to the System for the purpose of
9making those payments.
10 (g) The Board shall adopt any rules necessary to implement
11this Section.
12 (h) No provision of this Section shall be interpreted in a
13way that would cause the applicable System to cease to be a
14qualified plan under the Internal Revenue Code of 1986.
15 (i) Notwithstanding any other provision of this Section, in
16no case shall the total amount of accelerated pension benefit
17payments paid under this Section, Section 14-147.5, and Section
1815-185.5, and Section 16-190.5 cause the Illinois Finance
19Authority to issue more than the $250,000,000 of State Pension
20Obligation Acceleration Bonds authorized in subsection (c-5)
21of Section 801-40 of the Illinois Finance Authority Act.
22 (40 ILCS 5/16-203)
23 (Text of Section WITHOUT the changes made by P.A. 98-599,
24which has been held unconstitutional)
25 Sec. 16-203. Application and expiration of new benefit

SB2195- 146 -LRB100 12227 RPS 24732 b
1increases.
2 (a) As used in this Section, "new benefit increase" means
3an increase in the amount of any benefit provided under this
4Article, or an expansion of the conditions of eligibility for
5any benefit under this Article, that results from an amendment
6to this Code that takes effect after June 1, 2005 (the
7effective date of Public Act 94-4). "New benefit increase",
8however, does not include any benefit increase resulting from
9the changes made to this Article by Public Act 95-910 or this
10amendatory Act of the 100th General Assembly this amendatory
11Act of the 95th General Assembly.
12 (b) Notwithstanding any other provision of this Code or any
13subsequent amendment to this Code, every new benefit increase
14is subject to this Section and shall be deemed to be granted
15only in conformance with and contingent upon compliance with
16the provisions of this Section.
17 (c) The Public Act enacting a new benefit increase must
18identify and provide for payment to the System of additional
19funding at least sufficient to fund the resulting annual
20increase in cost to the System as it accrues.
21 Every new benefit increase is contingent upon the General
22Assembly providing the additional funding required under this
23subsection. The Commission on Government Forecasting and
24Accountability shall analyze whether adequate additional
25funding has been provided for the new benefit increase and
26shall report its analysis to the Public Pension Division of the

SB2195- 147 -LRB100 12227 RPS 24732 b
1Department of Insurance Financial and Professional Regulation.
2A new benefit increase created by a Public Act that does not
3include the additional funding required under this subsection
4is null and void. If the Public Pension Division determines
5that the additional funding provided for a new benefit increase
6under this subsection is or has become inadequate, it may so
7certify to the Governor and the State Comptroller and, in the
8absence of corrective action by the General Assembly, the new
9benefit increase shall expire at the end of the fiscal year in
10which the certification is made.
11 (d) Every new benefit increase shall expire 5 years after
12its effective date or on such earlier date as may be specified
13in the language enacting the new benefit increase or provided
14under subsection (c). This does not prevent the General
15Assembly from extending or re-creating a new benefit increase
16by law.
17 (e) Except as otherwise provided in the language creating
18the new benefit increase, a new benefit increase that expires
19under this Section continues to apply to persons who applied
20and qualified for the affected benefit while the new benefit
21increase was in effect and to the affected beneficiaries and
22alternate payees of such persons, but does not apply to any
23other person, including without limitation a person who
24continues in service after the expiration date and did not
25apply and qualify for the affected benefit while the new
26benefit increase was in effect.

SB2195- 148 -LRB100 12227 RPS 24732 b
1(Source: P.A. 94-4, eff. 6-1-05; 95-910, eff. 8-26-08.)
2 (40 ILCS 5/16-205.1 new)
3 Sec. 16-205.1. Defined contribution plan.
4 (a) By July 1, 2018, the System shall prepare and implement
5a voluntary defined contribution plan for up to 5% of eligible
6active Tier 1 employees. The System shall determine the 5% cap
7by the number of active Tier 1 employees on the effective date
8of this Section. The defined contribution plan developed under
9this Section shall be a plan that aggregates employer and
10employee contributions in individual participant accounts
11which, after meeting any other requirements, are used for
12payouts after retirement in accordance with this Section and
13any other applicable laws.
14 As used in this Section, "defined benefit plan" means the
15retirement plan available under this Article to Tier 1
16employees who have not made the election authorized under this
17Section.
18 (1) Under the defined contribution plan, an active Tier
19 1 employee of this System could elect to cease accruing
20 benefits in the defined benefit plan under this Article and
21 begin accruing benefits for future service in the defined
22 contribution plan. Service credit under the defined
23 contribution plan may be used for determining retirement
24 eligibility under the defined benefit plan. An active Tier
25 1 employee who elects to cease accruing benefits in his or

SB2195- 149 -LRB100 12227 RPS 24732 b
1 her defined benefit plan shall be prohibited from
2 purchasing service credit on or after the date of his or
3 her election. A Tier 1 employee making the irrevocable
4 election provided under this Section shall not receive
5 interest accruals to his or her benefit under paragraph (A)
6 of subsection (a) of Section 16-133 on or after the date of
7 his or her election.
8 (2) Participants in the defined contribution plan
9 shall pay employee contributions at the same rate as Tier 1
10 employees in this System who do not participate in the
11 defined contribution plan.
12 (3) State contributions shall be paid into the accounts
13 of all participants in the defined contribution plan at a
14 uniform rate, expressed as a percentage of salary and
15 determined for each year. This rate shall be no higher than
16 the employer's normal cost for Tier 1 employees in the
17 defined benefit plan for that year, as determined by the
18 System and expressed as a percentage of salary, and shall
19 be no lower than 0% of salary. The State shall adjust this
20 rate annually.
21 (4) The defined contribution plan shall require 5 years
22 of participation in the defined contribution plan before
23 vesting in State contributions. If the participant fails to
24 vest in them, the State contributions, and the earnings
25 thereon, shall be forfeited.
26 (5) The defined contribution plan may provide for

SB2195- 150 -LRB100 12227 RPS 24732 b
1 participants in the plan to be eligible for the defined
2 disability benefits available to other participants under
3 this Article. If it does, the System shall reduce the
4 employee contributions credited to the member's defined
5 contribution plan account by an amount determined by the
6 System to cover the cost of offering such benefits.
7 (6) The defined contribution plan shall provide a
8 variety of options for investments. These options shall
9 include investments in a fund created by the System and
10 managed in accordance with legal and fiduciary standards,
11 as well as investment options otherwise available.
12 (7) The defined contribution plan shall provide a
13 variety of options for payouts to retirees and their
14 survivors.
15 (8) To the extent authorized under federal law and as
16 authorized by the System, the plan shall allow former
17 participants in the plan to transfer or roll over employee
18 and vested State contributions, and the earnings thereon,
19 into other qualified retirement plans.
20 (9) The System shall reduce the employee contributions
21 credited to the member's defined contribution plan account
22 by an amount determined by the System to cover the cost of
23 offering these benefits and any applicable administrative
24 fees.
25 (b) Only persons who are active Tier 1 employees of the
26System on the effective date of this Section are eligible to

SB2195- 151 -LRB100 12227 RPS 24732 b
1participate in the defined contribution plan. Participation in
2the defined contribution plan shall be limited to the first 5%
3of eligible persons who elect to participate. The election to
4participate in the defined contribution plan is voluntary and
5irrevocable.
6 (c) An eligible Tier 1 employee may irrevocably elect to
7participate in the defined contribution plan by filing with the
8System a written application to participate that is received by
9the System prior to its determination that 5% of eligible
10persons have elected to participate in the defined contribution
11plan.
12 When the System first determines that 5% of eligible
13persons have elected to participate in the defined contribution
14plan, the System shall provide notice to previously eligible
15employees that the plan is no longer available and shall cease
16accepting applications to participate.
17 (d) The System shall make a good faith effort to contact
18each active Tier 1 employee who is eligible to participate in
19the defined contribution plan. The System shall mail
20information describing the option to join the defined
21contribution plan to each of these employees to his or her last
22known address on file with the System. If the employee is not
23responsive to other means of contact, it is sufficient for the
24System to publish the details of the option on its website.
25 Upon request for further information describing the
26option, the System shall provide employees with information

SB2195- 152 -LRB100 12227 RPS 24732 b
1from the System before exercising the option to join the plan,
2including information on the impact to their vested benefits or
3non-vested service. The individual consultation shall include
4projections of the member's defined benefits at retirement or
5earlier termination of service and the value of the member's
6account at retirement or earlier termination of service. The
7System shall not provide advice or counseling with respect to
8whether the employee should exercise the option. The System
9shall inform Tier 1 employees who are eligible to participate
10in the defined contribution plan that they may also wish to
11obtain information and counsel relating to their option from
12any other available source, including but not limited to labor
13organizations, private counsel, and financial advisors.
14 (e) In no event shall the System, its staff, its authorized
15representatives, or the Board be liable for any information
16given to an employee under this Section. The System may
17coordinate with the Illinois Department of Central Management
18Services and other retirement systems administering a defined
19contribution plan in accordance with this amendatory Act of the
20100th General Assembly to provide information concerning the
21impact of the option set forth in this Section.
22 (f) Notwithstanding any other provision of this Section, no
23person shall begin participating in the defined contribution
24plan until it has attained qualified plan status and received
25all necessary approvals from the U.S. Internal Revenue Service.
26 (g) The System shall report on its progress under this

SB2195- 153 -LRB100 12227 RPS 24732 b
1Section, including the available details of the defined
2contribution plan and the System's plans for informing eligible
3Tier 1 employees about the plan, to the Governor and the
4General Assembly on or before January 15, 2018.
5 (h) The intent of this amendatory Act of the 100th General
6Assembly is to ensure that the State's normal cost of
7participation in the defined contribution plan is similar, and
8if possible equal, to the State's normal cost of participation
9in the defined benefit plan, unless a lower State's normal cost
10is necessary to ensure cost neutrality.
11 (40 ILCS 5/16-206.1 new)
12 Sec. 16-206.1. Defined contribution plan; termination. If
13the defined contribution plan under Section 16-205.1 is
14terminated or becomes inoperative pursuant to law, then each
15participant in the plan shall automatically be deemed to have
16been a contributing Tier 1 employee in the System's defined
17benefit plan during the time in which he or she participated in
18the defined contribution plan, and for that purpose the System
19shall be entitled to recover the amounts in the participant's
20defined contribution accounts.
21 (40 ILCS 5/17-106.05 new)
22 Sec. 17-106.05. Tier 1 employee. "Tier 1 employee": A
23teacher under this Article who first became a member or
24participant before January 1, 2011 under any reciprocal

SB2195- 154 -LRB100 12227 RPS 24732 b
1retirement system or pension fund established under this Code
2other than a retirement system or pension fund established
3under Article 2, 3, 4, 5, 6, or 18 of this Code.
4 (40 ILCS 5/17-129) (from Ch. 108 1/2, par. 17-129)
5 Sec. 17-129. Employer contributions; deficiency in Fund.
6 (a) If in any fiscal year of the Board of Education ending
7prior to 1997 the total amounts paid to the Fund from the Board
8of Education (other than under this subsection, and other than
9amounts used for making or "picking up" contributions on behalf
10of teachers) and from the State do not equal the total
11contributions made by or on behalf of the teachers for such
12year, or if the total income of the Fund in any such fiscal
13year of the Board of Education from all sources is less than
14the total such expenditures by the Fund for such year, the
15Board of Education shall, in the next succeeding year, in
16addition to any other payment to the Fund set apart and
17appropriate from moneys from its tax levy for educational
18purposes, a sum sufficient to remove such deficiency or
19deficiencies, and promptly pay such sum into the Fund in order
20to restore any of the reserves of the Fund that may have been
21so temporarily applied. Any amounts received by the Fund after
22December 4, 1997 from State appropriations, including under
23Section 17-127, shall be a credit against and shall fully
24satisfy any obligation that may have arisen, or be claimed to
25have arisen, under this subsection (a) as a result of any

SB2195- 155 -LRB100 12227 RPS 24732 b
1deficiency or deficiencies in the fiscal year of the Board of
2Education ending in calendar year 1997.
3 (b) (i) Notwithstanding any other provision of this
4Section, and notwithstanding any prior certification by the
5Board under subsection (c) for fiscal year 2011, the Board of
6Education's total required contribution to the Fund for fiscal
7year 2011 under this Section is $187,000,000.
8 (ii) Notwithstanding any other provision of this Section,
9the Board of Education's total required contribution to the
10Fund for fiscal year 2012 under this Section is $192,000,000.
11 (iii) Notwithstanding any other provision of this Section,
12the Board of Education's total required contribution to the
13Fund for fiscal year 2013 under this Section is $196,000,000.
14 (iv) For fiscal years 2014 through 2059, the minimum
15contribution to the Fund to be made by the Board of Education
16in each fiscal year shall be an amount determined by the Fund
17to be sufficient to bring the total assets of the Fund up to
1890% of the total actuarial liabilities of the Fund by the end
19of fiscal year 2059. In making these determinations, the
20required Board of Education contribution shall be calculated
21each year as a level percentage of the applicable employee
22payrolls over the years remaining to and including fiscal year
232059 and shall be determined under the projected unit credit
24actuarial cost method.
25 (v) Beginning in fiscal year 2060, the minimum Board of
26Education contribution for each fiscal year shall be the amount

SB2195- 156 -LRB100 12227 RPS 24732 b
1needed to maintain the total assets of the Fund at 90% of the
2total actuarial liabilities of the Fund.
3 (vi) Notwithstanding any other provision of this
4subsection (b), for any fiscal year, the contribution to the
5Fund from the Board of Education shall not be required to be in
6excess of the amount calculated as needed to maintain the
7assets (or cause the assets to be) at the 90% level by the end
8of the fiscal year.
9 (vii) Any contribution by the State to or for the benefit
10of the Fund, including, without limitation, as referred to
11under Section 17-127, shall be a credit against any
12contribution required to be made by the Board of Education
13under this subsection (b).
14 (c) The Board shall determine the amount of Board of
15Education contributions required for each fiscal year on the
16basis of the actuarial tables and other assumptions adopted by
17the Board and the recommendations of the actuary, in order to
18meet the minimum contribution requirements of subsections (a)
19and (b). Annually, on or before February 28, the Board shall
20certify to the Board of Education the amount of the required
21Board of Education contribution for the coming fiscal year. The
22certification shall include a copy of the actuarial
23recommendations upon which it is based.
24 Beginning in fiscal year 2018, any increase or decrease in
25the Board of Education's contribution over the prior fiscal
26year due exclusively to changes in actuarial or investment

SB2195- 157 -LRB100 12227 RPS 24732 b
1assumptions adopted by the Board shall be included in the Board
2of Education's contribution to the Fund, as a percentage of the
3applicable employee payroll, and shall be increased in equal
4annual increments so that by the fiscal year occurring 5 years
5after the adoption of the actuarial or investment assumptions,
6the Board of Education is contributing at the rate otherwise
7required under this Section.
8 (d) As soon as practical after the effective date of this
9amendatory Act of the 100th General Assembly, the Board shall
10recalculate and recertify to the Board of Education the amount
11of the required Board of Education contribution to the Fund for
12fiscal year 2018, as necessary to take into account the changes
13in required Board of Education contributions made by this
14amendatory Act of the 100th General Assembly.
15(Source: P.A. 96-889, eff. 4-14-10.)
16 (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
17 (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19 Sec. 20-121. Calculation of proportional retirement
20annuities.
21 (a) Upon retirement of the employee, a proportional
22retirement annuity shall be computed by each participating
23system in which pension credit has been established on the
24basis of pension credits under each system. The computation
25shall be in accordance with the formula or method prescribed by

SB2195- 158 -LRB100 12227 RPS 24732 b
1each participating system which is in effect at the date of the
2employee's latest withdrawal from service covered by any of the
3systems in which he has pension credits which he elects to have
4considered under this Article. However, the amount of any
5retirement annuity payable under the self-managed plan
6established under Section 15-158.2 of this Code or under the
7defined contribution plan established under Article 14, 15, or
816 of this Code depends solely on the value of the
9participant's vested account balances and is not subject to any
10proportional adjustment under this Section.
11 (a-5) For persons who participate in a defined contribution
12plan established under Article 14, 15, or 16 of this Code to
13whom the provisions of this Article apply, the pension credits
14established under the defined contribution plan may be
15considered in determining eligibility for or the amount of the
16defined benefit retirement annuity that is payable by any other
17participating system.
18 (b) Combined pension credit under all retirement systems
19subject to this Article shall be considered in determining
20whether the minimum qualification has been met and the formula
21or method of computation which shall be applied, except as may
22be otherwise provided with respect to vesting in State or
23employer contributions in a defined contribution plan. If a
24system has a step-rate formula for calculation of the
25retirement annuity, pension credits covering previous service
26which have been established under another system shall be

SB2195- 159 -LRB100 12227 RPS 24732 b
1considered in determining which range or ranges of the
2step-rate formula are to be applicable to the employee.
3 (c) Interest on pension credit shall continue to accumulate
4in accordance with the provisions of the law governing the
5retirement system in which the same has been established during
6the time an employee is in the service of another employer, on
7the assumption such employee, for interest purposes for pension
8credit, is continuing in the service covered by such retirement
9system.
10(Source: P.A. 91-887, eff. 7-6-00.)
11 (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
12 (Text of Section WITHOUT the changes made by P.A. 98-599,
13which has been held unconstitutional)
14 Sec. 20-123. Survivor's annuity. The provisions governing
15a retirement annuity shall be applicable to a survivor's
16annuity. Appropriate credits shall be established for
17survivor's annuity purposes in those participating systems
18which provide survivor's annuities, according to the same
19conditions and subject to the same limitations and restrictions
20herein prescribed for a retirement annuity. If a participating
21system has no survivor's annuity benefit, or if the survivor's
22annuity benefit under that system is waived, pension credit
23established in that system shall not be considered in
24determining eligibility for or the amount of the survivor's
25annuity which may be payable by any other participating system.

SB2195- 160 -LRB100 12227 RPS 24732 b
1 For persons who participate in the self-managed plan
2established under Section 15-158.2 or the portable benefit
3package established under Section 15-136.4, pension credit
4established under Article 15 may be considered in determining
5eligibility for or the amount of the survivor's annuity that is
6payable by any other participating system, but pension credit
7established in any other system shall not result in any right
8to a survivor's annuity under the Article 15 system.
9 For persons who participate in a defined contribution plan
10established under Article 14, 15, or 16 of this Code to whom
11the provisions of this Article apply, the pension credits
12established under the defined contribution plan may be
13considered in determining eligibility for or the amount of the
14defined benefit survivor's annuity that is payable by any other
15participating system, but pension credits established in any
16other system shall not result in any right to or increase in
17the value of a survivor's annuity under the defined
18contribution plan, which depends solely on the options chosen
19and the value of the participant's vested account balances and
20is not subject to any proportional adjustment under this
21Section.
22(Source: P.A. 91-887, eff. 7-6-00.)
23 (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
24 (Text of Section WITHOUT the changes made by P.A. 98-599,
25which has been held unconstitutional)

SB2195- 161 -LRB100 12227 RPS 24732 b
1 Sec. 20-124. Maximum benefits.
2 (a) In no event shall the combined retirement or survivors
3annuities exceed the highest annuity which would have been
4payable by any participating system in which the employee has
5pension credits, if all of his pension credits had been
6validated in that system.
7 If the combined annuities should exceed the highest maximum
8as determined in accordance with this Section, the respective
9annuities shall be reduced proportionately according to the
10ratio which the amount of each proportional annuity bears to
11the aggregate of all such annuities.
12 (b) In the case of a participant in the self-managed plan
13established under Section 15-158.2 of this Code to whom the
14provisions of this Article apply:
15 (i) For purposes of calculating the combined
16 retirement annuity and the proportionate reduction, if
17 any, in a retirement annuity other than one payable under
18 the self-managed plan, the amount of the Article 15
19 retirement annuity shall be deemed to be the highest
20 annuity to which the annuitant would have been entitled if
21 he or she had participated in the traditional benefit
22 package as defined in Section 15-103.1 rather than the
23 self-managed plan.
24 (ii) For purposes of calculating the combined
25 survivor's annuity and the proportionate reduction, if
26 any, in a survivor's annuity other than one payable under

SB2195- 162 -LRB100 12227 RPS 24732 b
1 the self-managed plan, the amount of the Article 15
2 survivor's annuity shall be deemed to be the highest
3 survivor's annuity to which the survivor would have been
4 entitled if the deceased employee had participated in the
5 traditional benefit package as defined in Section 15-103.1
6 rather than the self-managed plan.
7 (iii) Benefits payable under the self-managed plan are
8 not subject to proportionate reduction under this Section.
9 (c) In the case of a participant in a defined contribution
10plan established under Article 14, 15, or 16 of this Code to
11whom the provisions of this Article apply:
12 (i) For purposes of calculating the combined
13 retirement annuity and the proportionate reduction, if
14 any, in a defined benefit retirement annuity, any benefit
15 payable under the defined contribution plan shall not be
16 considered.
17 (ii) For purposes of calculating the combined
18 survivor's annuity and the proportionate reduction, if
19 any, in a defined benefit survivor's annuity, any benefit
20 payable under the defined contribution plan shall not be
21 considered.
22 (iii) Benefits payable under a defined contribution
23 plan established under Article 14, 15, or 16 of this Code
24 are not subject to proportionate reduction under this
25 Section.
26(Source: P.A. 91-887, eff. 7-6-00.)

SB2195- 163 -LRB100 12227 RPS 24732 b
1 (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
2 (Text of Section WITHOUT the changes made by P.A. 98-599,
3which has been held unconstitutional)
4 Sec. 20-125. Return to employment - suspension of benefits.
5If a retired employee returns to employment which is covered by
6a system from which he is receiving a proportional annuity
7under this Article, his proportional annuity from all
8participating systems shall be suspended during the period of
9re-employment, except that this suspension does not apply to
10any distributions payable under the self-managed plan
11established under Section 15-158.2 or under a defined
12contribution plan established under Article 14, 15, or 16 of
13this Code.
14 The provisions of the Article under which such employment
15would be covered shall govern the determination of whether the
16employee has returned to employment, and if applicable the
17exemption of temporary employment or employment not exceeding a
18specified duration or frequency, for all participating systems
19from which the retired employee is receiving a proportional
20annuity under this Article, notwithstanding any contrary
21provisions in the other Articles governing such systems.
22(Source: P.A. 91-887, eff. 7-6-00.)
23 (40 ILCS 5/14-155 rep.)
24 (40 ILCS 5/14-156 rep.)

SB2195- 164 -LRB100 12227 RPS 24732 b
1 (40 ILCS 5/15-200 rep.)
2 (40 ILCS 5/15-201 rep.)
3 (40 ILCS 5/16-205 rep.)
4 (40 ILCS 5/16-206 rep.)
5 Section 20. The Illinois Pension Code is amended by
6repealing Sections 14-155, 14-156, 15-200, 15-201, 16-205, and
716-206.
8 Section 900. The State Mandates Act is amended by adding
9Section 8.41 as follows:
10 (30 ILCS 805/8.41 new)
11 Sec. 8.41. Exempt mandate. Notwithstanding Sections 6 and 8
12of this Act, no reimbursement by the State is required for the
13implementation of any mandate created by this amendatory Act of
14the 100th General Assembly.
15 Section 970. Severability. The provisions of this Act are
16severable under Section 1.31 of the Statute on Statutes.
17 Section 999. Effective date. This Act takes effect upon
18becoming law.

SB2195- 165 -LRB100 12227 RPS 24732 b
1 INDEX
2 Statutes amended in order of appearance
3 5 ILCS 375/3from Ch. 127, par. 523
4 5 ILCS 375/10from Ch. 127, par. 530
5 40 ILCS 5/1-160
6 40 ILCS 5/1-161 new
7 40 ILCS 5/1-162 new
8 40 ILCS 5/14-103.41 new
9 40 ILCS 5/14-131
10 40 ILCS 5/14-135.08from Ch. 108 1/2, par. 14-135.08
11 40 ILCS 5/14-147.5 new
12 40 ILCS 5/14-152.1
13 40 ILCS 5/14-155.1 new
14 40 ILCS 5/14-155.2 new
15 40 ILCS 5/14-156.1 new
16 40 ILCS 5/15-108.1
17 40 ILCS 5/15-108.2
18 40 ILCS 5/15-155from Ch. 108 1/2, par. 15-155
19 40 ILCS 5/15-165from Ch. 108 1/2, par. 15-165
20 40 ILCS 5/15-185.5 new
21 40 ILCS 5/15-198
22 40 ILCS 5/15-200.1 new
23 40 ILCS 5/15-201.1 new
24 40 ILCS 5/16-107.1 new
25 40 ILCS 5/16-158from Ch. 108 1/2, par. 16-158

SB2195- 166 -LRB100 12227 RPS 24732 b