Bill Text: IL SB2954 | 2017-2018 | 100th General Assembly | Chaptered

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Bill Title: Amends the State Universities Article of the Illinois Pension Code. Provides that if an employer fails to transmit required contributions to the System for more than 120 days after the payment of those contributions is due, the Board may certify to the State Comptroller the amount of those delinquent employer contributions and the State Comptroller shall deduct the certified amount from State funds to the employer and remit the amount deducted to the System. Provides that if State funds from which those deductions may be made are not available or if deductions are delayed for longer than 120 days after the date of the certification to the Comptroller, the Board may proceed against the employer to recover the amounts of such delinquent payments in the appropriate circuit court. Adds similar provisions if the employer is a community college district. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2018-07-20 - Public Act . . . . . . . . . 100-0624 [SB2954 Detail]

Download: Illinois-2017-SB2954-Chaptered.html

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Public Act 100-0624
SB2954 Enrolled LRB100 17269 RPS 32428 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 15-155 and 16-158 as follows:
(40 ILCS 5/15-155) (from Ch. 108 1/2, par. 15-155)
Sec. 15-155. Employer contributions.
(a) The State of Illinois shall make contributions by
appropriations of amounts which, together with the other
employer contributions from trust, federal, and other funds,
employee contributions, income from investments, and other
income of this System, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(a-1).
(a-1) For State fiscal years 2012 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of

the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For each of State fiscal years 2018, 2019, and 2020, the
State shall make an additional contribution to the System equal
to 2% of the total payroll of each employee who is deemed to
have elected the benefits under Section 1-161 or who has made
the election under subsection (c) of Section 1-161.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or

thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it at
the resulting annual rate in each of the remaining fiscal
years in that 5-year period.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$166,641,900.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$252,064,100.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$702,514,000 and shall be made from the State Pensions Fund and
proceeds of bonds sold in fiscal year 2010 pursuant to Section
7.2 of the General Obligation Bond Act, less (i) the pro rata

share of bond sale expenses determined by the System's share of
total bond proceeds, (ii) any amounts received from the General
Revenue Fund in fiscal year 2010, (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if
applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to Section 15-165 and shall be made from the State
Pensions Fund and proceeds of bonds sold in fiscal year 2011
pursuant to Section 7.2 of the General Obligation Bond Act,
less (i) the pro rata share of bond sale expenses determined by
the System's share of total bond proceeds, (ii) any amounts
received from the General Revenue Fund in fiscal year 2011, and
(iii) any reduction in bond proceeds due to the issuance of
discounted bonds, if applicable.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the

calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under Section 15-165, shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General
Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's

total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(a-2) Beginning in fiscal year 2018, each employer under
this Article shall pay to the System a required contribution
determined as a percentage of projected payroll and sufficient
to produce an annual amount equal to:
(i) for each of fiscal years 2018, 2019, and 2020, the
defined benefit normal cost of the defined benefit plan,
less the employee contribution, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (c) of Section 1-161; for fiscal
year 2021 and each fiscal year thereafter, the defined
benefit normal cost of the defined benefit plan, less the
employee contribution, plus 2%, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (c) of Section 1-161; plus
(ii) the amount required for that fiscal year to
amortize any unfunded actuarial accrued liability
associated with the present value of liabilities
attributable to the employer's account under Section
15-155.2, determined as a level percentage of payroll over

a 30-year rolling amortization period.
In determining contributions required under item (i) of
this subsection, the System shall determine an aggregate rate
for all employers, expressed as a percentage of projected
payroll.
In determining the contributions required under item (ii)
of this subsection, the amount shall be computed by the System
on the basis of the actuarial assumptions and tables used in
the most recent actuarial valuation of the System that is
available at the time of the computation.
The contributions required under this subsection (a-2)
shall be paid by an employer concurrently with that employer's
payroll payment period. The State, as the actual employer of an
employee, shall make the required contributions under this
subsection.
As used in this subsection, "academic year" means the
12-month period beginning September 1.
(b) If an employee is paid from trust or federal funds, the
employer shall pay to the Board contributions from those funds
which are sufficient to cover the accruing normal costs on
behalf of the employee. However, universities having employees
who are compensated out of local auxiliary funds, income funds,
or service enterprise funds are not required to pay such
contributions on behalf of those employees. The local auxiliary
funds, income funds, and service enterprise funds of
universities shall not be considered trust funds for the

purpose of this Article, but funds of alumni associations,
foundations, and athletic associations which are affiliated
with the universities included as employers under this Article
and other employers which do not receive State appropriations
are considered to be trust funds for the purpose of this
Article.
(b-1) The City of Urbana and the City of Champaign shall
each make employer contributions to this System for their
respective firefighter employees who participate in this
System pursuant to subsection (h) of Section 15-107. The rate
of contributions to be made by those municipalities shall be
determined annually by the Board on the basis of the actuarial
assumptions adopted by the Board and the recommendations of the
actuary, and shall be expressed as a percentage of salary for
each such employee. The Board shall certify the rate to the
affected municipalities as soon as may be practical. The
employer contributions required under this subsection shall be
remitted by the municipality to the System at the same time and
in the same manner as employee contributions.
(c) Through State fiscal year 1995: The total employer
contribution shall be apportioned among the various funds of
the State and other employers, whether trust, federal, or other
funds, in accordance with actuarial procedures approved by the
Board. State of Illinois contributions for employers receiving
State appropriations for personal services shall be payable
from appropriations made to the employers or to the System. The

contributions for Class I community colleges covering earnings
other than those paid from trust and federal funds, shall be
payable solely from appropriations to the Illinois Community
College Board or the System for employer contributions.
(d) Beginning in State fiscal year 1996, the required State
contributions to the System shall be appropriated directly to
the System and shall be payable through vouchers issued in
accordance with subsection (c) of Section 15-165, except as
provided in subsection (g).
(e) The State Comptroller shall draw warrants payable to
the System upon proper certification by the System or by the
employer in accordance with the appropriation laws and this
Code.
(f) Normal costs under this Section means liability for
pensions and other benefits which accrues to the System because
of the credits earned for service rendered by the participants
during the fiscal year and expenses of administering the
System, but shall not include the principal of or any
redemption premium or interest on any bonds issued by the Board
or any expenses incurred or deposits required in connection
therewith.
(g) If the amount of a participant's earnings for any
academic year used to determine the final rate of earnings,
determined on a full-time equivalent basis, exceeds the amount
of his or her earnings with the same employer for the previous
academic year, determined on a full-time equivalent basis, by

more than 6%, the participant's employer shall pay to the
System, in addition to all other payments required under this
Section and in accordance with guidelines established by the
System, the present value of the increase in benefits resulting
from the portion of the increase in earnings that is in excess
of 6%. This present value shall be computed by the System on
the basis of the actuarial assumptions and tables used in the
most recent actuarial valuation of the System that is available
at the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
Whenever it determines that a payment is or may be required
under this subsection (g), the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection
(h) or (i) of this Section, must include an affidavit setting
forth and attesting to all facts within the employer's
knowledge that are pertinent to the applicability of subsection
(h) or (i). Upon receiving a timely application for
recalculation, the System shall review the application and, if
appropriate, recalculate the amount due.

The employer contributions required under this subsection
(g) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System'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 3 years after the employer's receipt of the
bill.
When assessing payment for any amount due under this
subsection (g), the System shall include earnings, to the
extent not established by a participant under Section 15-113.11
or 15-113.12, that would have been paid to the participant had
the participant not taken (i) periods of voluntary or
involuntary furlough occurring on or after July 1, 2015 and on
or before June 30, 2017 or (ii) periods of voluntary pay
reduction in lieu of furlough occurring on or after July 1,
2015 and on or before June 30, 2017. Determining earnings that
would have been paid to a participant had the participant not
taken periods of voluntary or involuntary furlough or periods
of voluntary pay reduction shall be the responsibility of the
employer, and shall be reported in a manner prescribed by the
System.
(h) This subsection (h) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not

require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to
participants under contracts or collective bargaining
agreements entered into, amended, or renewed before June 1,
2005.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases paid to a
participant at a time when the participant is 10 or more years
from retirement eligibility under Section 15-135.
When assessing payment for any amount due under subsection
(g), the System shall exclude earnings increases resulting from
overload work, including a contract for summer teaching, or
overtime when the employer has certified to the System, and the
System has approved the certification, that: (i) in the case of
overloads (A) the overload work is for the sole purpose of
academic instruction in excess of the standard number of
instruction hours for a full-time employee occurring during the
academic year that the overload is paid and (B) the earnings
increases are equal to or less than the rate of pay for
academic instruction computed using the participant's current
salary rate and work schedule; and (ii) in the case of
overtime, the overtime was necessary for the educational
mission.
When assessing payment for any amount due under subsection

(g), the System shall exclude any earnings increase resulting
from (i) a promotion for which the employee moves from one
classification to a higher classification under the State
Universities Civil Service System, (ii) a promotion in academic
rank for a tenured or tenure-track faculty position, or (iii) a
promotion that the Illinois Community College Board has
recommended in accordance with subsection (k) of this Section.
These earnings increases shall be excluded only if the
promotion is to a position that has existed and been filled by
a member for no less than one complete academic year and the
earnings increase as a result of the promotion is an increase
that results in an amount no greater than the average salary
paid for other similar positions.
(i) When assessing payment for any amount due under
subsection (g), the System shall exclude any salary increase
described in subsection (h) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (g) of this Section.
(j) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(j-5) For State fiscal academic years beginning on or after
July 1, 2017, if the amount of a participant's earnings for any
State fiscal school year, determined on a full-time equivalent
basis, exceeds the amount of the salary set by law for the
Governor that is in effect on July 1 of that fiscal year, the
participant's employer shall pay to the System, in addition to
all other payments required under this Section and in
accordance with guidelines established by the System, an amount
determined by the System to be equal to the employer normal
cost, as established by the System and expressed as a total
percentage of payroll, multiplied by the amount of earnings in
excess of the amount of the salary set by law for the Governor.
This amount shall be computed by the System on the basis of the
actuarial assumptions and tables used in the most recent

actuarial valuation of the System that is available at the time
of the computation. The System may require the employer to
provide any pertinent information or documentation.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculation calculations used to determine
the amount due. If the employer disputes the amount of the
bill, it may, within 30 days after receipt of the bill, apply
to the System in writing for a recalculation. The application
must specify in detail the grounds of the dispute. Upon
receiving a timely application for recalculation, the System
shall review the application and, if appropriate, recalculate
the amount due.
The employer contributions required under this subsection
may be paid in the form of a lump sum within 90 days after
issuance receipt of the bill. If the employer contributions are
not paid within 90 days after issuance receipt of the bill,
then interest will be charged at a rate equal to the System's
annual actuarially assumed rate of return on investment
compounded annually from the 91st day after issuance receipt of
the bill. All payments Payments must be received concluded
within 3 years after issuance the employer's receipt of the
bill. If the employer fails to make complete payment, including
applicable interest, within 3 years, then the System may, after
giving notice to the employer, certify the delinquent amount to

the State Comptroller, and the Comptroller shall thereupon
deduct the certified delinquent amount from State funds payable
to the employer and pay them instead to the System.
This subsection (j-5) does not apply to a participant's
earnings to the extent an employer pays the employer normal
cost of such earnings.
The changes made to this subsection (j-5) by this
amendatory Act of the 100th General Assembly are intended to
apply retroactively to July 6, 2017 (the effective date of
Public Act 100-23).
(k) The Illinois Community College Board shall adopt rules
for recommending lists of promotional positions submitted to
the Board by community colleges and for reviewing the
promotional lists on an annual basis. When recommending
promotional lists, the Board shall consider the similarity of
the positions submitted to those positions recognized for State
universities by the State Universities Civil Service System.
The Illinois Community College Board shall file a copy of its
findings with the System. The System shall consider the
findings of the Illinois Community College Board when making
determinations under this Section. The System shall not exclude
any earnings increases resulting from a promotion when the
promotion was not submitted by a community college. Nothing in
this subsection (k) shall require any community college to
submit any information to the Community College Board.
(l) For purposes of determining the required State

contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(m) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 99-897, eff. 1-1-17; 100-23, eff. 7-6-17.)
(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
Sec. 16-158. Contributions by State and other employing
units.
(a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.

The Board shall determine the amount of State contributions
required for each fiscal year on the basis of the actuarial
tables and other assumptions adopted by the Board and the
recommendations of the actuary, using the formula in subsection
(b-3).
(a-1) Annually, on or before November 15 until November 15,
2011, the Board shall certify to the Governor the amount of the
required State contribution for the coming fiscal year. The
certification under this subsection (a-1) shall include a copy
of the actuarial recommendations upon which it is based and
shall specifically identify the System's projected State
normal cost for that fiscal year.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by Public Act 94-4 this amendatory Act of the 94th General
Assembly.
On or before April 1, 2011, the Board shall recalculate and
recertify to the Governor the amount of the required State

contribution to the System for State fiscal year 2011, applying
the changes made by Public Act 96-889 to the System's assets
and liabilities as of June 30, 2009 as though Public Act 96-889
was approved on that date.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed certification
of the amount of the required State contribution to the System
for the next fiscal year, along with all of the actuarial
assumptions, calculations, and data upon which that proposed
certification is based. On or before January 1 of each year,
beginning January 1, 2013, the State Actuary shall issue a
preliminary report concerning the proposed certification and
identifying, if necessary, recommended changes in actuarial
assumptions that the Board must consider before finalizing its
certification of the required State contributions. On or before
January 15, 2013 and each January 15 thereafter, the Board
shall certify to the Governor and the General Assembly the
amount of the required State contribution for the next fiscal
year. The Board's certification must note any deviations from
the State Actuary's recommended changes, the reason or reasons
for not following the State Actuary's recommended changes, and
the fiscal impact of not following the State Actuary's
recommended changes on the required State contribution.
(a-10) By November 1, 2017, the Board shall recalculate and
recertify to the State Actuary, the Governor, and the General

Assembly the amount of the State contribution to the System for
State fiscal year 2018, taking into account the changes in
required State contributions made by Public Act 100-23 this
amendatory Act of the 100th General Assembly. The State Actuary
shall review the assumptions and valuations underlying the
Board's revised certification and issue a preliminary report
concerning the proposed recertification and identifying, if
necessary, recommended changes in actuarial assumptions that
the Board must consider before finalizing its certification of
the required State contributions. The Board's final
certification must note any deviations from the State Actuary's
recommended changes, the reason or reasons for not following
the State Actuary's recommended changes, and the fiscal impact
of not following the State Actuary's recommended changes on the
required State contribution.
(b) Through State fiscal year 1995, the State contributions
shall be paid to the System in accordance with Section 18-7 of
the School Code.
(b-1) Beginning in State fiscal year 1996, on the 15th day
of each month, or as soon thereafter as may be practicable, the
Board shall submit vouchers for payment of State contributions
to the System, in a total monthly amount of one-twelfth of the
required annual State contribution certified under subsection
(a-1). From March 5, 2004 (the effective date of Public Act
93-665) this amendatory Act of the 93rd General Assembly
through June 30, 2004, the Board shall not submit vouchers for

the remainder of fiscal year 2004 in excess of the fiscal year
2004 certified contribution amount determined under this
Section after taking into consideration the transfer to the
System under subsection (a) of Section 6z-61 of the State
Finance Act. These vouchers shall be paid by the State
Comptroller and Treasurer by warrants drawn on the funds
appropriated to the System for that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(b-2) Allocations from the Common School Fund apportioned
to school districts not coming under this System shall not be
diminished or affected by the provisions of this Article.
(b-3) For State fiscal years 2012 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a

level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For each of State fiscal years 2018, 2019, and 2020, the
State shall make an additional contribution to the System equal
to 2% of the total payroll of each employee who is deemed to
have elected the benefits under Section 1-161 or who has made
the election under subsection (c) of Section 1-161.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it at
the resulting annual rate in each of the remaining fiscal

years in that 5-year period.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments
so that by State fiscal year 2011, the State is contributing at
the rate required under this Section; except that in the
following specified State fiscal years, the State contribution
to the System shall not be less than the following indicated
percentages of the applicable employee payroll, even if the
indicated percentage will produce a State contribution in
excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary
certification made under subsection (a-1) before May 27, 1998
(the effective date of Public Act 90-582) this amendatory Act
of 1998: 10.02% in FY 1999; 10.77% in FY 2000; 11.47% in FY
2001; 12.16% in FY 2002; 12.86% in FY 2003; and 13.56% in FY
2004.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006 is
$534,627,700.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007 is
$738,014,500.
For each of State fiscal years 2008 through 2009, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual increments

from the required State contribution for State fiscal year
2007, so that by State fiscal year 2011, the State is
contributing at the rate otherwise required under this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010 is
$2,089,268,000 and shall be made from the proceeds of bonds
sold in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2010, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011
pursuant to subsection (a-1) of this Section and shall be made
from the proceeds of bonds sold in fiscal year 2011 pursuant to
Section 7.2 of the General Obligation Bond Act, less (i) the
pro rata share of bond sale expenses determined by the System's
share of total bond proceeds, (ii) any amounts received from
the Common School Fund in fiscal year 2011, and (iii) any
reduction in bond proceeds due to the issuance of discounted
bonds, if applicable. This amount shall include, in addition to
the amount certified by the System, an amount necessary to meet
employer contributions required by the State as an employer
under paragraph (e) of this Section, which may also be used by

the System for contributions required by paragraph (a) of
Section 16-127.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed to
maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as calculated
under this Section and certified under subsection (a-1), shall
not exceed an amount equal to (i) the amount of the required
State contribution that would have been calculated under this
Section for that fiscal year if the System had not received any
payments under subsection (d) of Section 7.2 of the General

Obligation Bond Act, minus (ii) the portion of the State's
total debt service payments for that fiscal year on the bonds
issued in fiscal year 2003 for the purposes of that Section
7.2, as determined and certified by the Comptroller, that is
the same as the System's portion of the total moneys
distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State
fiscal years 2008 through 2010, however, the amount referred to
in item (i) shall be increased, as a percentage of the
applicable employee payroll, in equal increments calculated
from the sum of the required State contribution for State
fiscal year 2007 plus the applicable portion of the State's
total debt service payments for fiscal year 2007 on the bonds
issued in fiscal year 2003 for the purposes of Section 7.2 of
the General Obligation Bond Act, so that, by State fiscal year
2011, the State is contributing at the rate otherwise required
under this Section.
(b-4) Beginning in fiscal year 2018, each employer under
this Article shall pay to the System a required contribution
determined as a percentage of projected payroll and sufficient
to produce an annual amount equal to:
(i) for each of fiscal years 2018, 2019, and 2020, the
defined benefit normal cost of the defined benefit plan,
less the employee contribution, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the

election under subsection (b) of Section 1-161; for fiscal
year 2021 and each fiscal year thereafter, the defined
benefit normal cost of the defined benefit plan, less the
employee contribution, plus 2%, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (b) of Section 1-161; plus
(ii) the amount required for that fiscal year to
amortize any unfunded actuarial accrued liability
associated with the present value of liabilities
attributable to the employer's account under Section
16-158.3, determined as a level percentage of payroll over
a 30-year rolling amortization period.
In determining contributions required under item (i) of
this subsection, the System shall determine an aggregate rate
for all employers, expressed as a percentage of projected
payroll.
In determining the contributions required under item (ii)
of this subsection, the amount shall be computed by the System
on the basis of the actuarial assumptions and tables used in
the most recent actuarial valuation of the System that is
available at the time of the computation.
The contributions required under this subsection (b-4)
shall be paid by an employer concurrently with that employer's
payroll payment period. The State, as the actual employer of an
employee, shall make the required contributions under this

subsection.
(c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and all
expenses in connection with the administration and operation
thereof, are obligations of the State.
If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs based
upon that service, which, beginning July 1, 2017, shall be at a
rate, expressed as a percentage of salary, equal to the total
employer's normal cost, expressed as a percentage of payroll,
as determined by the System. Employer contributions, based on
salary paid to members from federal funds, may be forwarded by
the distributing agency of the State of Illinois to the System
prior to allocation, in an amount determined in accordance with
guidelines established by such agency and the System. Any
contribution for fiscal year 2015 collected as a result of the
change made by Public Act 98-674 this amendatory Act of the
98th General Assembly shall be considered a State contribution
under subsection (b-3) of this Section.
(d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined

by the System. Such employer contributions shall be forwarded
monthly in accordance with guidelines established by the
System.
However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
(1) Beginning July 1, 1998 through June 30, 1999, the
employer contribution shall be equal to 0.3% of each
teacher's salary.
(2) Beginning July 1, 1999 and thereafter, the employer
contribution shall be equal to 0.58% of each teacher's
salary.
The school district or other employing unit may pay these
employer contributions out of any source of funding available

for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
These employer contributions are intended to offset a
portion of the cost to the System of the increases in
retirement benefits resulting from Public Act 90-582 this
amendatory Act of 1998.
Each employer of teachers is entitled to a credit against
the contributions required under this subsection (e) with
respect to salaries paid to teachers for the period January 1,
2002 through June 30, 2003, equal to the amount paid by that
employer under subsection (a-5) of Section 6.6 of the State
Employees Group Insurance Act of 1971 with respect to salaries
paid to teachers for that period.
The additional 1% employee contribution required under
Section 16-152 by Public Act 90-582 this amendatory Act of 1998
is the responsibility of the teacher and not the teacher's
employer, unless the employer agrees, through collective
bargaining or otherwise, to make the contribution on behalf of
the teacher.
If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)

for the balance of the term of that contract. The employer and
the employee organization shall jointly certify to the System
the existence of the contractual requirement, in such form as
the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
(f) If the amount of a teacher's salary for any school year
used to determine final average salary exceeds the member's
annual full-time salary rate with the same employer for the
previous school year by more than 6%, the teacher's employer
shall pay to the System, in addition to all other payments
required under this Section and in accordance with guidelines
established by the System, the present value of the increase in
benefits resulting from the portion of the increase in salary
that is in excess of 6%. This present value shall be computed
by the System on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the
System that is available at the time of the computation. If a
teacher's salary for the 2005-2006 school year is used to
determine final average salary under this subsection (f), then
the changes made to this subsection (f) by Public Act 94-1057
shall apply in calculating whether the increase in his or her
salary is in excess of 6%. For the purposes of this Section,
change in employment under Section 10-21.12 of the School Code
on or after June 1, 2005 shall constitute a change in employer.
The System may require the employer to provide any pertinent

information or documentation. The changes made to this
subsection (f) by Public Act 94-1111 this amendatory Act of the
94th General Assembly apply without regard to whether the
teacher was in service on or after its effective date.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculations used to determine the amount
due. If the employer disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the System
in writing for a recalculation. The application must specify in
detail the grounds of the dispute and, if the employer asserts
that the calculation is subject to subsection (g) or (h) of
this Section, must include an affidavit setting forth and
attesting to all facts within the employer's knowledge that are
pertinent to the applicability of that subsection. Upon
receiving a timely application for recalculation, the System
shall review the application and, if appropriate, recalculate
the amount due.
The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System'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 3 years after the employer's receipt of the
bill.
(g) This subsection (g) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to teachers
under contracts or collective bargaining agreements entered
into, amended, or renewed before June 1, 2005.
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to a
teacher at a time when the teacher is 10 or more years from
retirement eligibility under Section 16-132 or 16-133.2.
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases resulting from
overload work, including summer school, when the school
district has certified to the System, and the System has
approved the certification, that (i) the overload work is for
the sole purpose of classroom instruction in excess of the
standard number of classes for a full-time teacher in a school
district during a school year and (ii) the salary increases are
equal to or less than the rate of pay for classroom instruction
computed on the teacher's current salary and work schedule.
When assessing payment for any amount due under subsection

(f), the System shall exclude a salary increase resulting from
a promotion (i) for which the employee is required to hold a
certificate or supervisory endorsement issued by the State
Teacher Certification Board that is a different certification
or supervisory endorsement than is required for the teacher's
previous position and (ii) to a position that has existed and
been filled by a member for no less than one complete academic
year and the salary increase from the promotion is an increase
that results in an amount no greater than the lesser of the
average salary paid for other similar positions in the district
requiring the same certification or the amount stipulated in
the collective bargaining agreement for a similar position
requiring the same certification.
When assessing payment for any amount due under subsection
(f), the System shall exclude any payment to the teacher from
the State of Illinois or the State Board of Education over
which the employer does not have discretion, notwithstanding
that the payment is included in the computation of final
average salary.
(h) When assessing payment for any amount due under
subsection (f), the System shall exclude any salary increase
described in subsection (g) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any

payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (f) of this Section.
(i) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for each
employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public
Act 94-1057.
(i-5) For school years beginning on or after July 1, 2017,
if the amount of a participant's salary for any school year,
determined on a full-time equivalent basis, exceeds the amount
of the salary set for the Governor, the participant's employer
shall pay to the System, in addition to all other payments
required under this Section and in accordance with guidelines
established by the System, an amount determined by the System
to be equal to the employer normal cost, as established by the

System and expressed as a total percentage of payroll,
multiplied by the amount of salary in excess of the amount of
the salary set for the Governor. This amount shall be computed
by the System on the basis of the actuarial assumptions and
tables used in the most recent actuarial valuation of the
System that is available at the time of the computation. The
System may require the employer to provide any pertinent
information or documentation.
Whenever it determines that a payment is or may be required
under this subsection, the System shall calculate the amount of
the payment and bill the employer for that amount. The bill
shall specify the calculations used to determine the amount
due. If the employer disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the System
in writing for a recalculation. The application must specify in
detail the grounds of the dispute. Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the System'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 3 years after the employer's receipt of the

bill.
(j) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(k) For purposes of determining the required State
contribution to the system for a particular year, the actuarial
value of assets shall be assumed to earn a rate of return equal
to the system's actuarially assumed rate of return.
(Source: P.A. 100-23, eff. 7-6-17; 100-340, eff. 8-25-17;
revised 9-25-17.)
Section 99. Effective date. This Act takes effect upon
becoming law.