Bill Text: IL SB2802 | 2025-2026 | 104th General Assembly | Enrolled

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Bill Title: Reinserts the provisions of the introduced bill with the following change. Further amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. Adds regional water commissions under the Illinois Municipal Code to the list of participating instrumentalities. Effective immediately, except that certain changes to the Illinois Pension Code are effective January 1, 2027.

Sponsorship: Partisan Bill (Democrat 3)

Status: (Enrolled) 2026-06-26 - Sent to the Governor [SB2802 Detail]

Download: Illinois-2025-SB2802-Enrolled.html

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SB2802 Enrolled LRB104 17391 RPS 30816 b
AN ACT concerning 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 Sections 7-132, 7-158, 7-164, 7-172, 7-205, and 7-206
as follows:
(40 ILCS 5/7-132) (from Ch. 108 1/2, par. 7-132)
Sec. 7-132. Municipalities, instrumentalities and
participating instrumentalities included and effective dates.
(A) Municipalities and their instrumentalities.
(a) The following described municipalities, but not
including any with more than 1,000,000 inhabitants, and the
instrumentalities thereof, shall be included within and be
subject to this Article beginning upon the effective dates
specified by the Board:
(1) Except as to the municipalities and
instrumentalities thereof specifically excluded under this
Article, every county shall be subject to this Article,
and all cities, villages and incorporated towns having a
population in excess of 5,000 inhabitants as determined by
the last preceding decennial or subsequent federal census,
shall be subject to this Article following publication of
the census by the Bureau of the Census. Within 90 days

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after publication of the census, the Board shall notify
any municipality that has become subject to this Article
as a result of that census, and shall provide information
to the corporate authorities of the municipality
explaining the duties and consequences of participation.
The notification shall also include a proposed date upon
which participation by the municipality will commence.
However, for any city, village or incorporated town
that attains a population over 5,000 inhabitants after
having provided social security coverage for its employees
under the Social Security Enabling Act, participation
under this Article shall not be mandatory but may be
elected in accordance with subparagraph (3) or (4) of this
paragraph (a), whichever is applicable.
(2) School districts, other than those specifically
excluded under this Article, shall be subject to this
Article, without election, with respect to all employees
thereof.
(3) Towns and all other bodies politic and corporate
which are formed by vote of, or are subject to control by,
the electors in towns and are located in towns which are
not participating municipalities on the effective date of
this Act, may become subject to this Article by election
pursuant to Section 7-132.1.
(4) Any other municipality (together with its
instrumentalities), other than those specifically excluded

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from participation and those described in paragraph (3)
above, may elect to be included either by referendum under
Section 7-134 or by the adoption of a resolution or
ordinance by its governing body. A copy of such resolution
or ordinance duly authenticated and certified by the clerk
of the municipality or other appropriate official of its
governing body shall constitute the required notice to the
board of such action.
(b) A municipality that is about to begin participation
shall submit to the Board an application to participate, in a
form acceptable to the Board, not later than 90 days prior to
the proposed effective date of participation. The Board shall
act upon the application within 90 days, and if it finds that
the application is in conformity with its requirements and the
requirements of this Article, participation by the applicant
shall commence on a date acceptable to the municipality and
specified by the Board, but in no event more than one year from
the date of application.
(c) A participating municipality which succeeds to the
functions of a participating municipality which is dissolved
or terminates its existence shall assume and be transferred
the net accumulation balance in the municipality reserve and
the municipality account receivable balance of the terminated
municipality.
(d) In the case of a Veterans Assistance Commission whose
employees were being treated by the Fund on January 1, 1990 as

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employees of the county served by the Commission, the Fund may
continue to treat the employees of the Veterans Assistance
Commission as county employees for the purposes of this
Article, unless the Commission becomes a participating
instrumentality in accordance with subsection (B) of this
Section.
(B) Participating instrumentalities.
(a) The participating instrumentalities designated in
paragraph (b) of this subsection shall be included within and
be subject to this Article if:
(1) an application to participate, in a form
acceptable to the Board and adopted by a two-thirds vote
of the governing body, is presented to the Board not later
than 90 days prior to the proposed effective date; and
(2) the Board finds that the application is in
conformity with its requirements, that the applicant has
reasonable expectation to continue as a political entity
for a period of at least 10 years and has the prospective
financial capacity to meet its current and future
obligations to the Fund, and that the actuarial soundness
of the Fund may be reasonably expected to be unimpaired by
approval of participation by the applicant.
The Board shall notify the applicant of its findings
within 90 days after receiving the application, and if the
Board approves the application, participation by the applicant

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shall commence on the effective date specified by the Board.
(b) The following participating instrumentalities, so long
as they meet the requirements of Section 7-108 and the area
served by them or within their jurisdiction is not located
entirely within a municipality having more than one million
inhabitants, may be included hereunder:
i. Township School District Trustees.
ii. Multiple County and Consolidated Health
Departments created under Division 5-25 of the Counties
Code or its predecessor law.
iii. Public Building Commissions created under the
Public Building Commission Act, and located in counties of
less than 1,000,000 inhabitants.
iv. A multitype, consolidated or cooperative library
system created under the Illinois Library System Act. Any
library system created under the Illinois Library System
Act that has one or more predecessors that participated in
the Fund may participate in the Fund upon application. The
Board shall establish procedures for implementing the
transfer of rights and obligations from the predecessor
system to the successor system.
v. Regional Planning Commissions created under
Division 5-14 of the Counties Code or its predecessor law.
vi. Local Public Housing Authorities created under the
Housing Authorities Act, located in counties of less than
1,000,000 inhabitants.

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vii. Illinois Municipal League.
viii. Northeastern Illinois Metropolitan Area Planning
Commission.
ix. Southwestern Illinois Metropolitan Area Planning
Commission.
x. Illinois Association of Park Districts.
xi. Illinois Supervisors, County Commissioners and
Superintendents of Highways Association.
xii. Tri-City Regional Port District.
xiii. An association, or not-for-profit corporation,
membership in which is authorized under Section 85-15 of
the Township Code.
xiv. Drainage Districts operating under the Illinois
Drainage Code.
xv. Local mass transit districts created under the
Local Mass Transit District Act.
xvi. Soil and water conservation districts created
under the Soil and Water Conservation Districts Law.
xvii. Commissions created to provide water supply or
sewer services or both under Division 135, Division 135.5,
or Division 136 of Article 11 of the Illinois Municipal
Code.
xviii. Public water districts created under the Public
Water District Act.
xix. Veterans Assistance Commissions established under
Section 9 of the Military Veterans Assistance Act that

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serve counties with a population of less than 1,000,000.
xx. The governing body of an entity, other than a
vocational education cooperative, created under an
intergovernmental cooperative agreement established
between participating municipalities under the
Intergovernmental Cooperation Act, which by the terms of
the agreement is the employer of the persons performing
services under the agreement under the usual common law
rules determining the employer-employee relationship. The
governing body of such an intergovernmental cooperative
entity established prior to July 1, 1988 may make
participation retroactive to the effective date of the
agreement and, if so, the effective date of participation
shall be the date the required application is filed with
the fund. If any such entity is unable to pay the required
employer contributions to the fund, then the participating
municipalities shall make payment of the required
contributions and the payments shall be allocated as
provided in the agreement or, if not so provided, equally
among them.
xxi. The Illinois Municipal Electric Agency.
xxii. The Waukegan Port District.
xxiii. The Fox Waterway Agency created under the Fox
Waterway Agency Act.
xxiv. The Illinois Municipal Gas Agency.
xxv. The Kaskaskia Regional Port District.

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xxvi. The Southwestern Illinois Development Authority.
xxvii. The Cairo Public Utility Company.
xxviii. Except with respect to employees who elect to
participate in the State Employees' Retirement System of
Illinois under Section 14-104.13 of this Code, the Chicago
Metropolitan Agency for Planning created under the
Regional Planning Act, provided that, with respect to the
benefits payable pursuant to Sections 7-146, 7-150, and
7-164 and the requirement that eligibility for such
benefits is conditional upon satisfying a minimum period
of service or a minimum contribution, any employee of the
Chicago Metropolitan Agency for Planning that was
immediately prior to such employment an employee of the
Chicago Area Transportation Study or the Northeastern
Illinois Planning Commission, such employee's service at
the Chicago Area Transportation Study or the Northeastern
Illinois Planning Commission and contributions to the
State Employees' Retirement System of Illinois established
under Article 14 and the Illinois Municipal Retirement
Fund shall count towards the satisfaction of such
requirements.
xxix. United Counties Council (formerly the Urban
Counties Council), but only if the Council has a ruling
from the United States Internal Revenue Service that it is
a governmental entity.
xxx. The Will County Governmental League, but only if

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the League has a ruling from the United States Internal
Revenue Service that it is a governmental entity.
xxxi. The Firefighters' Pension Investment Fund.
xxxii. The Police Officers' Pension Investment Fund.
xxxiii. The Joliet Regional Port District.
(c) The governing boards of special education joint
agreements created under Section 10-22.31 of the School Code
without designation of an administrative district shall be
included within and be subject to this Article as
participating instrumentalities when the joint agreement
becomes effective. However, the governing board of any such
special education joint agreement in effect before September
5, 1975 shall not be subject to this Article unless the joint
agreement is modified by the school districts to provide that
the governing board is subject to this Article, except as
otherwise provided by this Section.
The governing board of the Special Education District of
Lake County shall become subject to this Article as a
participating instrumentality on July 1, 1997. Notwithstanding
subdivision (a)1 of Section 7-139, on the effective date of
participation, employees of the governing board of the Special
Education District of Lake County shall receive creditable
service for their prior service with that employer, up to a
maximum of 5 years, without any employee contribution.
Employees may establish creditable service for the remainder
of their prior service with that employer, if any, by applying

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in writing and paying an employee contribution in an amount
determined by the Fund, based on the employee contribution
rates in effect at the time of application for the creditable
service and the employee's salary rate on the effective date
of participation for that employer, plus interest at the
effective rate from the date of the prior service to the date
of payment. Application for this creditable service must be
made before July 1, 1998; the payment may be made at any time
while the employee is still in service. The employer may elect
to make the required contribution on behalf of the employee.
The governing board of a special education joint agreement
created under Section 10-22.31 of the School Code for which an
administrative district has been designated, if there are
employees of the cooperative educational entity who are not
employees of the administrative district, may elect to
participate in the Fund and be included within this Article as
a participating instrumentality, subject to such application
procedures and rules as the Board may prescribe.
The Boards of Control of cooperative or joint educational
programs or projects created and administered under Section
3-15.14 of the School Code, whether or not the Boards act as
their own administrative district, shall be included within
and be subject to this Article as participating
instrumentalities when the agreement establishing the
cooperative or joint educational program or project becomes
effective.

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The governing board of a special education joint agreement
entered into after June 30, 1984 and prior to September 17,
1985 which provides for representation on the governing board
by less than all the participating districts shall be included
within and subject to this Article as a participating
instrumentality. Such participation shall be effective as of
the date the joint agreement becomes effective.
The governing boards of educational service centers
established under Section 2-3.62 of the School Code shall be
included within and subject to this Article as participating
instrumentalities. The governing boards of vocational
education cooperative agreements created under the
Intergovernmental Cooperation Act and approved by the State
Board of Education shall be included within and be subject to
this Article as participating instrumentalities. If any such
governing boards or boards of control are unable to pay the
required employer contributions to the fund, then the school
districts served by such boards shall make payment of required
contributions as provided in Section 7-172. The payments shall
be allocated among the several school districts in proportion
to the number of students in average daily attendance for the
last full school year for each district in relation to the
total number of students in average attendance for such period
for all districts served. If such educational service centers,
vocational education cooperatives or cooperative or joint
educational programs or projects created and administered

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under Section 3-15.14 of the School Code are dissolved, the
assets and obligations shall be distributed among the
districts in the same proportions unless otherwise provided.
The governing board of Paris Cooperative High School shall
be included within and be subject to this Article as a
participating instrumentality on the effective date of this
amendatory Act of the 96th General Assembly. If the governing
board of Paris Cooperative High School is unable to pay the
required employer contributions to the fund, then the school
districts served shall make payment of required contributions
as provided in Section 7-172. The payments shall be allocated
among the several school districts in proportion to the number
of students in average daily attendance for the last full
school year for each district in relation to the total number
of students in average attendance for such period for all
districts served. If Paris Cooperative High School is
dissolved, then the assets and obligations shall be
distributed among the districts in the same proportions unless
otherwise provided.
The Philip J. Rock Center and School shall be included
within and be subject to this Article as a participating
instrumentality on the effective date of this amendatory Act
of the 97th General Assembly. The Philip J. Rock Center and
School shall certify to the Fund the dates of service of all
employees within 90 days of the effective date of this
amendatory Act of the 97th General Assembly. The Fund shall

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transfer to the IMRF account of the Philip J. Rock Center and
School all creditable service and all employer contributions
made on behalf of the employees for service at the Philip J.
Rock Center and School that were reported and paid to IMRF by
another employer prior to this date. If the Philip J. Rock
Center and School is unable to pay the required employer
contributions to the Fund, then the amount due will be paid by
all employers as defined in item (2) of paragraph (a) of
subsection (A) of this Section. The payments shall be
allocated among these employers in proportion to the number of
students in average daily attendance for the last full school
year for each district in relation to the total number of
students in average attendance for such period for all
districts. If the Philip J. Rock Center and School is
dissolved, then its IMRF assets and obligations shall be
distributed in the same proportions unless otherwise provided.
Financial Oversight Panels established under Article 1H of
the School Code shall be included within and be subject to this
Article as a participating instrumentality on the effective
date of this amendatory Act of the 97th General Assembly. If
the Financial Oversight Panel is unable to pay the required
employer contributions to the fund, then the school districts
served shall make payment of required contributions as
provided in Section 7-172. If the Financial Oversight Panel is
dissolved, then the assets and obligations shall be
distributed to the district served.

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(d) The governing boards of special recreation joint
agreements created under Section 8-10b of the Park District
Code, operating without designation of an administrative
district or an administrative municipality appointed to
administer the program operating under the authority of such
joint agreement shall be included within and be subject to
this Article as participating instrumentalities when the joint
agreement becomes effective. However, the governing board of
any such special recreation joint agreement in effect before
January 1, 1980 shall not be subject to this Article unless the
joint agreement is modified, by the districts and
municipalities which are parties to the agreement, to provide
that the governing board is subject to this Article.
If the Board returns any employer and employee
contributions to any employer which erroneously submitted such
contributions on behalf of a special recreation joint
agreement, the Board shall include interest computed from the
end of each year to the date of payment, not compounded, at the
rate of 7% per annum.
(e) Each multi-township assessment district, the board of
trustees of which has adopted this Article by ordinance prior
to April 1, 1982, shall be a participating instrumentality
included within and subject to this Article effective December
1, 1981. The contributions required under Section 7-172 shall
be included in the budget prepared under and allocated in
accordance with Section 2-30 of the Property Tax Code.

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(f) The Illinois Medical District Commission created under
the Illinois Medical District Act may be included within and
subject to this Article as a participating instrumentality,
notwithstanding that the location of the District is entirely
within the City of Chicago. To become a participating
instrumentality, the Commission must apply to the Board in the
manner set forth in paragraph (a) of this subsection (B). If
the Board approves the application, under the criteria and
procedures set forth in paragraph (a) and any other applicable
rules, criteria, and procedures of the Board, participation by
the Commission shall commence on the effective date specified
by the Board.
(C) Prospective participants. Beginning January 1, 1992, each
prospective participating municipality or participating
instrumentality shall pay to the Fund the cost, as determined
by the Board, of a study prepared by the Fund or its actuary,
detailing the prospective costs of participation in the Fund
to be expected by the municipality or instrumentality.
(Source: P.A. 104-284, eff. 8-15-25.)
(40 ILCS 5/7-158) (from Ch. 108 1/2, par. 7-158)
Sec. 7-158. Surviving spouse annuities; options annuities -
Options. In lieu of the surviving spouse annuity an eligible
surviving spouse shall have the option of receiving other
benefits as follows:

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1. The surviving spouse of a participating employee may
elect to receive either a single sum death benefit or a
surviving spouse annuity and the $8,000 ($3,000 for those who
first retired prior to the effective date of this amendatory
Act of the 104th General Assembly) $3,000 death benefit
provided in Sections 7-163 and 7-164.
2. The surviving spouse of an employee, who has separated
from service and would have been entitled to a retirement
annuity on date of death, may elect to receive either a single
sum death benefit or a surviving spouse annuity and the $8,000
($3,000 for those who first retired prior to the effective
date of this amendatory Act of the 104th General Assembly)
$3,000 death benefit provided in Sections 7-163 and 7-164.
3. If any surviving spouse annuity is payable prior to the
earliest age at which the recipient will become eligible for a
widows' or widowers' insurance benefit under the Federal
Social Security Act, the recipient may elect that the annuity
payments from this fund shall exceed those payable after
attaining such age by an amount not in excess of the estimated
Social Security Benefit, determined as of the effective date
of the surviving spouse annuity, provided that in no case
shall the total annuity payments made by this fund exceed in
actuarial value the annuity which would have been paid had no
such election been made.
4. The surviving spouse of a participating employee, whose
annuity was suspended upon return to employment and who had

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one year or more of service after his return, may apply the
additional service credits to a supplemental surviving spouse
annuity and receive the $8,000 ($3,000 for those who first
retired prior to the effective date of this amendatory Act of
the 104th General Assembly) $3,000 death benefit or apply the
additional service credits to a single sum death benefit and
forego the $8,000 ($3,000 for those who first retired prior to
the effective date of this amendatory Act of the 104th General
Assembly) $3,000 death benefit payable upon the death of an
annuitant.
5. The surviving spouse of a participating employee, whose
annuity was suspended upon return to employment and who had
less than one year of service after his return, shall have the
additional service credits applied towards a supplemental
surviving spouse annuity and shall receive the $8,000 ($3,000
for those who first retired prior to the effective date of this
amendatory Act of the 104th General Assembly) $3,000 death
benefit.
(Source: P.A. 85-941.)
(40 ILCS 5/7-164) (from Ch. 108 1/2, par. 7-164)
Sec. 7-164. Death benefits; amount benefits - Amount. The
amount of the death benefit shall be:
1. Upon the death of an employee with at least one year
of service occurring while in an employment relationship
(including employees drawing disability benefits) with a

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participating municipality or participating
instrumentality, an amount equal to the sum of:
(a) The employee's normal, additional and
survivor credits, including interest credited thereto
through the end of the preceding calendar year, but
excluding credits and interest thereon allowed for
periods of disability.
(b) An amount equal to the employee's annual
final rate of earnings. An employee who dies as a
result of injuries connected with his duties shall be
considered to have a year of service for purposes of
this benefit.
2. Upon the death of an employee with less than 1 year
of service occurring while in the service of any
participating municipality or instrumentality, an amount
equal to the sum of his accumulated normal, additional and
survivor credits on the date of death, excluding those
credits and interest thereon allowed during periods of
disability.
3. Upon the death of an employee who has separated
from service and was not entitled to a retirement annuity
on the date of death, an amount equal to the sum of his
accumulated normal, survivor and additional credits on the
date of death excluding those credits and interest thereon
allowed during periods of disability.
4. Upon the death of an employee in an employment

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relationship, or an employee who has service and was
entitled to a retirement annuity on the date of death,
when a surviving spouse or child annuity is awarded,
$8,000 ($3,000 for those who first retired prior to the
effective date of this amendatory Act of the 104th General
Assembly) $3,000.
5. Upon the death of an employee, who has separated
from service and was entitled to a retirement annuity on
the date of death, and no surviving spouse or child
annuity is awarded, $8,000 ($3,000 for those who first
retired prior to the effective date of this amendatory Act
of the 104th General Assembly) $3,000 plus an amount equal
to his accumulated normal, survivor and additional credits
on the date of death, excluding those credits and interest
earned thereon allowed during periods of disability.
6. Upon the death of an employee annuitant, $8,000
($3,000 for those who first retired prior to the effective
date of this amendatory Act of the 104th General Assembly)
$3,000 and, unless a surviving spouse, child or
reversionary annuity is payable, the sum of (i) the excess
of the normal and survivor credits, excluding those
allowed during periods of disability, which the annuitant
had as of the effective date of his annuity over the total
annuities paid pursuant to paragraph (a) 1 of Section
7-142 to the date of death, plus (ii) the excess of the
additional credits, excluding any such credits used to

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create a reversionary annuity, used to provide the annuity
granted pursuant to paragraph (a) 2 of Section 7-142 over
the total annuity payments made pursuant thereto to the
time of death.
7. Upon the death of an annuitant receiving a
reversionary annuity or of a person designated to receive
a reversionary annuity prior to the receipt of such
annuity the sum of the additional credits of the person
creating the reversionary annuity as of the effective date
of his own retirement annuity over the reversionary
annuity payments, if any, made prior to the date of death
of such annuitant or person designated to receive the
reversionary annuity.
8. Upon the death of an annuitant receiving a
beneficiary annuity which was effective before January 1,
1986, the excess of the death benefit which was used to
provide the annuity, over the sum of all annuity payments
made to the beneficiary. Upon the death of an annuitant
receiving a beneficiary annuity effective January 1, 1986
or thereafter, the sum of (i) the excess of the normal and
survivor credits, excluding those allowed during periods
of disability, which the annuitant had as of the effective
date of his annuity over the total annuities paid pursuant
to paragraph (c) of Section 7-165, to date of death, plus
(ii) the excess of the additional credits, excluding any
such credits used to create a reversionary annuity, used

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to provide the annuity granted pursuant to paragraph (d)
of Section 7-165 over the total annuity payments made
pursuant thereto to the time of death.
9. Upon the marriage prior to reaching age 55 (except
for a surviving spouse who remarries after December 31,
2000) or death of a person receiving a surviving spouse
annuity, unless a child annuity is payable, the sum of (i)
the excess of the normal and survivor credits, excluding
those credits and interest thereon allowed during periods
of disability, attributable to the employee at the
effective date of the annuity or date of death, whichever
first occurred, over the total of all annuity payments
attributable to paragraph (a) 1 of Section 7-142 made to
the employee or surviving spouse plus (ii) the excess of
the additional credits, excluding any such credits used to
create a reversionary annuity or used to provide the
annuity attributable to paragraph (a) 2 of Section 7-142
over the total of such payments.
10. Upon the marriage, death or attainment of age 18
of a child receiving a child annuity, if no other child
annuities are payable, the sum of (i) the excess of the
normal and survivor credits excluding those credits and
interest thereon allowed during periods of disability, of
the employee at the effective date of the annuity or date
of death, whichever first occurred, over the total annuity
payments attributable to paragraph (a) 1 of Section 7-142

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made to the employee, surviving spouse and children plus
(ii) the excess of the additional credits, excluding any
such credits used to create a reversionary annuity, used
to provide the annuity attributable to paragraph (a) 2 of
Section 7-142 over the total annuity payments made to the
employee, surviving spouse and children, pursuant thereto.
11. Upon the death of the participating employee whose
annuity was suspended upon his return to employment:
a. If a surviving spouse or child annuity is
awarded, $8,000 ($3,000 for those who first retired
prior to the effective date of this amendatory Act of
the 104th General Assembly) $3,000;
b. If no surviving spouse or child annuity is
awarded and he had less than one year's service upon
return, $8,000 ($3,000 for those who first retired
prior to the effective date of this amendatory Act of
the 104th General Assembly) $3,000 plus the excess of
the normal, survivor and additional credits, including
interest thereon, but excluding those allowed during a
period of disability, at the effective date of the
suspended annuity, plus those allowed after his
return, over all annuity payments made to the
employee;
c. If no surviving spouse or child annuity is
awarded and he has one year or more of service upon
return, the higher of (a) the payment under

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subparagraph b of this paragraph or (b) the payment
under paragraph 1 of this Section, taking into
consideration only the service and credits allowed
after his return, plus the excess of the normal,
survivor and additional credits, including interest
thereon, excluding those allowed during periods of
disability, at the effective date of his suspended
annuity over all annuity payments made to the
employee.
12. The $8,000 ($3,000 for those who first retired prior
to the effective date of this amendatory Act of the 104th
General Assembly) $3,000 death benefit provided in paragraphs
4 and 6 shall not be payable to beneficiaries of persons who
terminated service prior to September 8, 1971, unless the
payment or agreement for payment provided by Section 7-144.2
of this Article is made prior to the date of death.
13. The increase in certain death benefits from $1,000 to
$3,000 provided by this amendatory Act of 1987 shall apply
only to deaths occurring on or after January 1, 1988.
The increase in certain death benefits from $3,000 to
$8,000 provided by this amendatory Act of the 104th General
Assembly shall apply only to deaths occurring on or after
January 1, 2027.
(Source: P.A. 91-887, eff. 7-6-00.)
(40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)

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Sec. 7-172. Contributions by participating municipalities
and participating instrumentalities.
(a) Each participating municipality and each participating
instrumentality shall make payment to the fund as follows:
1. municipality contributions in an amount determined
by applying the municipality contribution rate to each
payment of earnings paid to each of its participating
employees;
2. an amount equal to the employee contributions
provided by paragraph (a) of Section 7-173, whether or not
the employee contributions are withheld as permitted by
that Section;
3. all accounts receivable, together with interest
charged thereon, as provided in Section 7-209, and any
amounts due under subsection (a-5) of Section 7-144;
4. if it has no participating employees with current
earnings, an amount payable which, over a closed period of
20 years for participating municipalities and 10 years for
participating instrumentalities, will amortize, at the
effective rate for that year, any unfunded obligation. The
unfunded obligation shall be computed as provided in
paragraph 2 of subsection (b);
5. if it has fewer than 7 participating employees or a
negative balance in its municipality reserve, the greater
of (A) an amount payable that, over a period of 20 years,
will amortize at the effective rate for that year any

SB2802 Enrolled - 25 - LRB104 17391 RPS 30816 b
unfunded obligation, computed as provided in paragraph 2
of subsection (b) or (B) the amount required by paragraph
1 of this subsection (a).
(b) A separate municipality contribution rate shall be
determined for each calendar year for all participating
municipalities together with all instrumentalities thereof.
The municipality contribution rate shall be determined for
participating instrumentalities as if they were participating
municipalities. The municipality contribution rate shall be
the sum of the following percentages:
1. The percentage of earnings of all the participating
employees of all participating municipalities and
participating instrumentalities which, if paid over the
entire period of their service, will be sufficient when
combined with all employee contributions available for the
payment of benefits, to provide all annuities for
participating employees, and the $8,000 ($3,000 for those
who first retired prior to the effective date of this
amendatory Act of the 104th General Assembly) $3,000 death
benefit payable under Sections 7-158 and 7-164, such
percentage to be known as the normal cost rate.
2. The percentage of earnings of the participating
employees of each participating municipality and
participating instrumentalities necessary to adjust for
the difference between the present value of all benefits,
excluding temporary and total and permanent disability and

SB2802 Enrolled - 26 - LRB104 17391 RPS 30816 b
death benefits, to be provided for its participating
employees and the sum of its accumulated municipality
contributions and the accumulated employee contributions
and the present value of expected future employee and
municipality contributions pursuant to subparagraph 1 of
this paragraph (b). This adjustment shall be spread over a
period determined by the Board, not to exceed 30 years for
participating municipalities or 10 years for participating
instrumentalities.
3. The percentage of earnings of the participating
employees of all municipalities and participating
instrumentalities necessary to provide the present value
of all temporary and total and permanent disability
benefits granted during the most recent year for which
information is available.
4. The percentage of earnings of the participating
employees of all participating municipalities and
participating instrumentalities necessary to provide the
present value of the net single sum death benefits
expected to become payable from the reserve established
under Section 7-206 during the year for which this rate is
fixed.
5. The percentage of earnings necessary to meet any
deficiency arising in the Terminated Municipality Reserve.
(c) A separate municipality contribution rate shall be
computed for each participating municipality or participating

SB2802 Enrolled - 27 - LRB104 17391 RPS 30816 b
instrumentality for its sheriff's law enforcement employees.
A separate municipality contribution rate shall be
computed for the sheriff's law enforcement employees of each
forest preserve district that elects to have such employees.
For the period from January 1, 1986 to December 31, 1986, such
rate shall be the forest preserve district's regular rate plus
2%.
In the event that the Board determines that there is an
actuarial deficiency in the account of any municipality with
respect to a person who has elected to participate in the Fund
under Section 3-109.1 of this Code, the Board may adjust the
municipality's contribution rate so as to make up that
deficiency over such reasonable period of time as the Board
may determine.
(d) The Board may establish a separate municipality
contribution rate for all employees who are program
participants employed under the federal Comprehensive
Employment Training Act by all of the participating
municipalities and instrumentalities. The Board may also
provide that, in lieu of a separate municipality rate for
these employees, a portion of the municipality contributions
for such program participants shall be refunded or an extra
charge assessed so that the amount of municipality
contributions retained or received by the fund for all CETA
program participants shall be an amount equal to that which
would be provided by the separate municipality contribution

SB2802 Enrolled - 28 - LRB104 17391 RPS 30816 b
rate for all such program participants. Refunds shall be made
to prime sponsors of programs upon submission of a claim
therefor and extra charges shall be assessed to participating
municipalities and instrumentalities. In establishing the
municipality contribution rate as provided in paragraph (b) of
this Section, the use of a separate municipality contribution
rate for program participants or the refund of a portion of the
municipality contributions, as the case may be, may be
considered.
(e) Computations of municipality contribution rates for
the following calendar year shall be made prior to the
beginning of each year, from the information available at the
time the computations are made, and on the assumption that the
employees in each participating municipality or participating
instrumentality at such time will continue in service until
the end of such calendar year at their respective rates of
earnings at such time.
(f) Any municipality which is the recipient of State
allocations representing that municipality's contributions for
retirement annuity purposes on behalf of its employees as
provided in Section 12-21.16 of the Illinois Public Aid Code
shall pay the allocations so received to the Board for such
purpose. Estimates of State allocations to be received during
any taxable year shall be considered in the determination of
the municipality's tax rate for that year under Section 7-171.
If a special tax is levied under Section 7-171, none of the

SB2802 Enrolled - 29 - LRB104 17391 RPS 30816 b
proceeds may be used to reimburse the municipality for the
amount of State allocations received and paid to the Board.
Any multiple-county or consolidated health department which
receives contributions from a county under Section 11.2 of "An
Act in relation to establishment and maintenance of county and
multiple-county health departments", approved July 9, 1943, as
amended, or distributions under Section 3 of the Department of
Public Health Act, shall use these only for municipality
contributions by the health department.
(g) Municipality contributions for the several purposes
specified shall, for township treasurers and employees in the
offices of the township treasurers who meet the qualifying
conditions for coverage hereunder, be allocated among the
several school districts and parts of school districts
serviced by such treasurers and employees in the proportion
which the amount of school funds of each district or part of a
district handled by the treasurer bears to the total amount of
all school funds handled by the treasurer.
From the funds subject to allocation among districts and
parts of districts pursuant to the School Code, the trustees
shall withhold the proportionate share of the liability for
municipality contributions imposed upon such districts by this
Section, in respect to such township treasurers and employees
and remit the same to the Board.
The municipality contribution rate for an educational
service center shall initially be the same rate for each year

SB2802 Enrolled - 30 - LRB104 17391 RPS 30816 b
as the regional office of education or school district which
serves as its administrative agent. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
The municipality contribution rate for a public agency,
other than a vocational education cooperative, formed under
the Intergovernmental Cooperation Act shall initially be the
average rate for the municipalities which are parties to the
intergovernmental agreement. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
(h) Each participating municipality and participating
instrumentality shall make the contributions in the amounts
provided in this Section in the manner prescribed from time to
time by the Board and all such contributions shall be
obligations of the respective participating municipalities and
participating instrumentalities to this fund. The failure to
deduct any employee contributions shall not relieve the
participating municipality or participating instrumentality of
its obligation to this fund. Delinquent payments of
contributions due under this Section may, with interest, be
recovered by civil action against the participating
municipalities or participating instrumentalities.
Municipality contributions, other than the amount necessary
for employee contributions, for periods of service by
employees from whose earnings no deductions were made for

SB2802 Enrolled - 31 - LRB104 17391 RPS 30816 b
employee contributions to the fund, may be charged to the
municipality reserve for the municipality or participating
instrumentality.
(i) Contributions by participating instrumentalities shall
be determined as provided herein except that the percentage
derived under subparagraph 2 of paragraph (b) of this Section,
and the amount payable under subparagraph 4 of paragraph (a)
of this Section, shall be based on an amortization period of 10
years.
(j) Notwithstanding the other provisions of this Section,
the additional unfunded liability accruing as a result of
Public Act 94-712 shall be amortized over a period of 30 years
beginning on January 1 of the second calendar year following
the calendar year in which Public Act 94-712 takes effect,
except that the employer may provide for a longer amortization
period by adopting a resolution or ordinance specifying a
35-year or 40-year period and submitting a certified copy of
the ordinance or resolution to the fund no later than June 1 of
the calendar year following the calendar year in which Public
Act 94-712 takes effect.
(k) If the amount of a participating employee's reported
earnings for any of the 12-month periods used to determine the
final rate of earnings exceeds the employee's 12-month
reported earnings with the same employer for the previous year
by the greater of 6% or 1.5 times the annual increase in the
Consumer Price Index-U, as established by the United States

SB2802 Enrolled - 32 - LRB104 17391 RPS 30816 b
Department of Labor for the preceding September, the
participating municipality or participating instrumentality
that paid those earnings shall pay to the Fund, in addition to
any other contributions required under this Article, the
present value of the increase in the pension resulting from
the portion of the increase in reported earnings that is in
excess of the greater of 6% or 1.5 times the annual increase in
the Consumer Price Index-U, as determined by the Fund. This
present value shall be computed on the basis of the actuarial
assumptions and tables used in the most recent actuarial
valuation of the Fund that is available at the time of the
computation.
Whenever it determines that a payment is or may be
required under this subsection (k), the fund shall calculate
the amount of the payment and bill the participating
municipality or participating instrumentality for that amount.
The bill shall specify the calculations used to determine the
amount due. If the participating municipality or participating
instrumentality disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the fund in
writing for a recalculation. The application must specify in
detail the grounds of the dispute. Upon receiving a timely
application for recalculation, the fund shall review the
application and, if appropriate, recalculate the amount due.
The participating municipality and participating
instrumentality contributions required under this subsection

SB2802 Enrolled - 33 - LRB104 17391 RPS 30816 b
(k) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the participating municipality and
participating instrumentality contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the fund's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 7 years after receipt of the bill by the
participating municipality or participating instrumentality.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from overload or overtime earnings.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from payments for unused vacation time, but only for
payments for unused vacation time made in the final 3 months of
the final rate of earnings period.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings increases
attributable to standard employment promotions resulting in
increased responsibility and workload.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude reportable earnings
increases resulting from periods where the member was paid
through workers' compensation.
This subsection (k) does not apply to earnings increases

SB2802 Enrolled - 34 - LRB104 17391 RPS 30816 b
due to amounts paid as required by federal or State law or
court mandate or to earnings increases due to the
participating employee returning to the regular number of
hours worked after having a temporary reduction in the number
of hours worked.
This subsection (k) does not apply to earnings increases
paid to individuals under contracts or collective bargaining
agreements entered into, amended, or renewed before January 1,
2012 (the effective date of Public Act 97-609), earnings
increases paid to members who are 10 years or more from
retirement eligibility, or earnings increases resulting from
an increase in the number of hours required to be worked.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings
attributable to personnel policies adopted before January 1,
2012 (the effective date of Public Act 97-609) as long as those
policies are not applicable to employees who begin service on
or after January 1, 2012 (the effective date of Public Act
97-609).
The change made to this Section by Public Act 100-139 is a
clarification of existing law and is intended to be
retroactive to January 1, 2012 (the effective date of Public
Act 97-609).
(Source: P.A. 103-464, eff. 8-4-23; 104-284, eff. 8-15-25.)
(40 ILCS 5/7-205) (from Ch. 108 1/2, par. 7-205)

SB2802 Enrolled - 35 - LRB104 17391 RPS 30816 b
Sec. 7-205. Reserves for annuities. Appropriate reserves
shall be created for payment of all annuities granted under
this Article at the time such annuities are granted and in
amounts determined to be necessary under actuarial tables
adopted by the Board upon recommendation of the actuary of the
fund. All annuities payable shall be charged to the annuity
reserve.
1. Amounts credited to annuity reserves shall be derived
by transfer of all the employee credits from the appropriate
employee reserves and by charges to the municipality reserve
of those municipalities in which the retiring employee has
accumulated service. If a retiring employee has accumulated
service in more than one participating municipality or
participating instrumentality, the municipality charges for
non-concurrent service shall be calculated as follows:
(A) for purposes of calculating the annuity reserve,
an annuity will be calculated based on service and
adjusted earnings with each employer (without regard to
the vesting requirement contained in subsection (a) of
Section 7-142); and
(B) the difference between the municipality charges
for the actual annuity granted and the aggregation of the
municipality charges based upon the ratio of each from
those calculations to the aggregated total from paragraph
(A) of this item 1.
Aggregate municipality charges for concurrent service

SB2802 Enrolled - 36 - LRB104 17391 RPS 30816 b
shall be prorated based on the employee's earnings. The
municipality charges for retirement annuities calculated under
subparagraph a. of paragraph 1. of subsection (a) of Section
7-142 shall be prorated based on actual contributions.
2. Supplemental annuities shall be handled as a separate
annuity and amounts to be credited to the annuity reserve
therefor shall be derived in the same manner as a regular
annuity.
3. When a retirement annuity is granted to an employee
with a spouse eligible for a surviving spouse annuity, there
shall be credited to the annuity reserve an amount to fund the
cost of both the retirement and surviving spouse annuity as a
joint and survivors annuity.
4. Beginning January 1, 1989, when a retirement annuity is
awarded, an amount equal to the present value of the $8,000
($3,000 for those who first retired prior to the effective
date of this amendatory Act of the 104th General Assembly)
$3,000 death benefit payable upon the death of the annuitant
shall be transferred to the annuity reserve from the
appropriate municipality reserves in the same manner as the
transfer for annuities.
5. All annuity reserves shall be revalued annually as of
December 31. Beginning as of December 31, 1973, adjustment
required therein by such revaluation shall be charged or
credited to the earnings and experience variation reserve.
6. There shall be credited to the annuity reserve all of

SB2802 Enrolled - 37 - LRB104 17391 RPS 30816 b
the payments made by annuitants under Section 7-144.2, plus an
additional amount from the earnings and experience variation
reserve to fund the cost of the incremental annuities granted
to annuitants making these payments.
7. As of December 31, 1972, the excess in the annuity
reserve shall be transferred to the municipality reserves. An
amount equal to the deficiency in the reserve of participating
municipalities and participating instrumentalities which have
no participating employees shall be allocated to their
reserves. The remainder shall be allocated in amounts
proportionate to the present value, as of January 1, 1972, of
annuities of annuitants of the remaining participating
municipalities and participating instrumentalities.
(Source: P.A. 97-319, eff. 1-1-12; 97-609, eff. 1-1-12;
97-813, eff. 7-13-12.)
(40 ILCS 5/7-206) (from Ch. 108 1/2, par. 7-206)
Sec. 7-206. Death Reserve. All death benefit payments
shall be charged to the Death Reserve, other than the $8,000
($3,000 for those who first retired prior to the effective
date of this amendatory Act of the 104th General Assembly)
$3,000 death benefits paid after December 31, 1988 upon the
death of an annuitant. All contributions for death purposes
under Section 7-172(b)4 shall be credited to the same reserve.
Whenever the balance in such reserve at the close of a year
exceeds 100% of the average annual charges to this account

SB2802 Enrolled - 38 - LRB104 17391 RPS 30816 b
during the 3 preceding calendar years, the basic actuarial
assumptions upon which municipality contribution rates for
these purposes are based, shall be reviewed and revised in
such manner as is deemed necessary to reduce such balance.
(Source: P.A. 89-136, eff. 7-14-95.)
Section 90. The State Mandates Act is amended by adding
Section 8.50 as follows:
(30 ILCS 805/8.50 new)
Sec. 8.50. 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 104th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law, except that the changes to Sections 7-158,
7-164, 7-172, 7-205, and 7-206 of the Illinois Pension Code
take effect January 1, 2027.