Bill Text: IL SB2358 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends the Downstate Police Article of the Pension Code to allow purchase of service credit for up to 2 years of military service not immediately preceded by employment. Allows purchase at a reduced interest rate for 6 months. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2010-02-25 - Tabled By Sponsor Sen. Kirk W. Dillard [SB2358 Detail]

Download: Illinois-2009-SB2358-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 SB2358 Introduced 2/27/2009, by Sen. Kirk W. Dillard SYNOPSIS AS INTRODUCED:
40 ILCS 5/3-110 from Ch. 108 1/2, par. 3-110
30 ILCS 805/8.33 new
Amends the Downstate Police Article of the Pension Code to allow purchase of service credit for up to 2 years of military service not immediately preceded by employment. Allows purchase at a reduced interest rate for 6 months. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
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FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
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AN ACT in relation to public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Section 3-110 as follows:
(40 ILCS 5/3-110) (from Ch. 108 1/2, par. 3-110)
Sec. 3-110. Creditable service.
(a) "Creditable service" is the time served by a police
officer as a member of a regularly constituted police force of
a municipality. In computing creditable service furloughs
without pay exceeding 30 days shall not be counted, but all
leaves of absence for illness or accident, regardless of
length, and all periods of disability retirement for which a
police officer has received no disability pension payments
under this Article shall be counted.
(a-5) Up to 3 years of time during which the police officer
receives a disability pension under Section 3-114.1, 3-114.2,
3-114.3, or 3-114.6 shall be counted as creditable service,
provided that (i) the police officer returns to active service
after the disability for a period at least equal to the period
for which credit is to be established and (ii) the police
officer makes contributions to the fund based on the rates
specified in Section 3-125.1 and the salary upon which the

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disability pension is based. These contributions may be paid at
any time prior to the commencement of a retirement pension. The
police officer may, but need not, elect to have the
contributions deducted from the disability pension or to pay
them in installments on a schedule approved by the board. If
not deducted from the disability pension, the contributions
shall include interest at the rate of 6% per year, compounded
annually, from the date for which service credit is being
established to the date of payment. If contributions are paid
under this subsection (a-5) in excess of those needed to
establish the credit, the excess shall be refunded. This
subsection (a-5) applies to persons receiving a disability
pension under Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on
the effective date of this amendatory Act of the 91st General
Assembly, as well as persons who begin to receive such a
disability pension after that date.
(b) Creditable service includes all periods of service in
the military, naval or air forces of the United States entered
upon while an active police officer of a municipality, provided
that upon applying for a permanent pension, and in accordance
with the rules of the board, the police officer pays into the
fund the amount the officer would have contributed if he or she
had been a regular contributor during such period, to the
extent that the municipality which the police officer served
has not made such contributions in the officer's behalf. The
total amount of such creditable service shall not exceed 5

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years, except that any police officer who on July 1, 1973 had
more than 5 years of such creditable service shall receive the
total amount thereof.
(b-1) In addition to any creditable service established
under subsection (b), creditable service may be granted for up
to 24 months of service in the armed forces of the United
States that was not immediately preceded by employment as a
police officer. In order to receive creditable service for
military service under this subsection (b-1), a police officer
must (1) apply to the Fund in writing and provide evidence of
the military service that is satisfactory to the Board and (2)
make contributions to the Fund equal to (i) the employee
contributions that would have been required had the service
been rendered as a member, plus (ii) an amount determined by
the board to be equal to the employer's normal cost of the
benefits accrued for that military service, plus (iii) interest
on items (i) and (ii) from the date of first membership in the
Fund to the date of payment. If payment is made during the
6-month period that begins 3 months after the effective date of
this amendatory Act of the 96th General Assembly, the required
interest shall be at the rate of 2.5% per year, compounded
annually; otherwise, the required interest shall be calculated
at the rate of 6% per year, compounded annually.
(c) Creditable service also includes service rendered by a
police officer while on leave of absence from a police
department to serve as an executive of an organization whose

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membership consists of members of a police department, subject
to the following conditions: (i) the police officer is a
participant of a fund established under this Article with at
least 10 years of service as a police officer; (ii) the police
officer received no credit for such service under any other
retirement system, pension fund, or annuity and benefit fund
included in this Code; (iii) pursuant to the rules of the board
the police officer pays to the fund the amount he or she would
have contributed had the officer been an active member of the
police department; and (iv) the organization pays a
contribution equal to the municipality's normal cost for that
period of service.
(d)(1) Creditable service also includes periods of
service originally established in another police pension
fund under this Article or in the Fund established under
Article 7 of this Code for which (i) the contributions have
been transferred under Section 3-110.7 or Section 7-139.9
and (ii) any additional contribution required under
paragraph (2) of this subsection has been paid in full in
accordance with the requirements of this subsection (d).
(2) If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 3-110.7 or 7-139.9 determines
that the amount transferred is less than the true cost to
the pension fund of allowing that creditable service to be
established, then in order to establish that creditable

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service the police officer must pay to the pension fund,
within the payment period specified in paragraph (3) of
this subsection, an additional contribution equal to the
difference, as determined by the board in accordance with
the rules and procedures adopted under paragraph (6) of
this subsection.
(3) Except as provided in paragraph (4), the additional
contribution must be paid to the board (i) within 5 years
from the date of the transfer of contributions under
Section 3-110.7 or 7-139.9 and (ii) before the police
officer terminates service with the fund. The additional
contribution may be paid in a lump sum or in accordance
with a schedule of installment payments authorized by the
board.
(4) If the police officer dies in service before
payment in full has been made and before the expiration of
the 5-year payment period, the surviving spouse of the
officer may elect to pay the unpaid amount on the officer's
behalf within 6 months after the date of death, in which
case the creditable service shall be granted as though the
deceased police officer had paid the remaining balance on
the day before the date of death.
(5) If the additional contribution is not paid in full
within the required time, the creditable service shall not
be granted and the police officer (or the officer's
surviving spouse or estate) shall be entitled to receive a

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refund of (i) any partial payment of the additional
contribution that has been made by the police officer and
(ii) those portions of the amounts transferred under
subdivision (a)(1) of Section 3-110.7 or subdivisions
(a)(1) and (a)(3) of Section 7-139.9 that represent
employee contributions paid by the police officer (but not
the accumulated interest on those contributions) and
interest paid by the police officer to the prior pension
fund in order to reinstate service terminated by acceptance
of a refund.
At the time of paying a refund under this item (5), the
pension fund shall also repay to the pension fund from
which the contributions were transferred under Section
3-110.7 or 7-139.9 the amount originally transferred under
subdivision (a)(2) of that Section, plus interest at the
rate of 6% per year, compounded annually, from the date of
the original transfer to the date of repayment. Amounts
repaid to the Article 7 fund under this provision shall be
credited to the appropriate municipality.
Transferred credit that is not granted due to failure
to pay the additional contribution within the required time
is lost; it may not be transferred to another pension fund
and may not be reinstated in the pension fund from which it
was transferred.
(6) The Public Employee Pension Fund Division of the
Department of Insurance shall establish by rule the manner

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of making the calculation required under paragraph (2) of
this subsection, taking into account the appropriate
actuarial assumptions; the police officer's service, age,
and salary history; the level of funding of the pension
fund to which the credits are being transferred; and any
other factors that the Division determines to be relevant.
The rules may require that all calculations made under
paragraph (2) be reported to the Division by the board
performing the calculation, together with documentation of
the creditable service to be transferred, the amounts of
contributions and interest to be transferred, the manner in
which the calculation was performed, the numbers relied
upon in making the calculation, the results of the
calculation, and any other information the Division may
deem useful.
(e)(1) Creditable service also includes periods of
service originally established in the Fund established
under Article 7 of this Code for which the contributions
have been transferred under Section 7-139.11.
(2) If the board of the pension fund to which
creditable service and related contributions are
transferred under Section 7-139.11 determines that the
amount transferred is less than the true cost to the
pension fund of allowing that creditable service to be
established, then the amount of creditable service the
police officer may establish under this subsection (e)

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shall be reduced by an amount equal to the difference, as
determined by the board in accordance with the rules and
procedures adopted under paragraph (3) of this subsection.
(3) The Public Pension Division of the Department of
Financial and Professional Regulation shall establish by
rule the manner of making the calculation required under
paragraph (2) of this subsection, taking into account the
appropriate actuarial assumptions; the police officer's
service, age, and salary history; the level of funding of
the pension fund to which the credits are being
transferred; and any other factors that the Division
determines to be relevant. The rules may require that all
calculations made under paragraph (2) be reported to the
Division by the board performing the calculation, together
with documentation of the creditable service to be
transferred, the amounts of contributions and interest to
be transferred, the manner in which the calculation was
performed, the numbers relied upon in making the
calculation, the results of the calculation, and any other
information the Division may deem useful.
(4) Until January 1, 2010, a police officer who
transferred service from the Fund established under
Article 7 of this Code under the provisions of Public Act
94-356 may establish additional credit, but only for the
amount of the service credit reduction in that transfer, as
calculated under paragraph (3) of this subsection (e). This

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credit may be established upon payment by the police
officer of an amount to be determined by the board, equal
to (1) the amount that would have been contributed as
employee and employer contributions had all of the service
been as an employee under this Article, plus interest
thereon at the rate of 6% per year, compounded annually
from the date of service to the date of transfer, less (2)
the total amount transferred from the Article 7 Fund, plus
(3) interest on the difference at the rate of 6% per year,
compounded annually, from the date of the transfer to the
date of payment. The additional service credit is allowed
under this amendatory Act of the 95th General Assembly
notwithstanding the provisions of Article 7 terminating
all transferred credits on the date of transfer.
(Source: P.A. 94-356, eff. 7-29-05; 95-812, eff. 8-13-08.)
Section 90. The State Mandates Act is amended by adding
Section 8.33 as follows:
(30 ILCS 805/8.33 new)
Sec. 8.33. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 96th General Assembly.
Section 99. Effective date. This Act takes effect upon