Bill Text: IL SB3689 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the General Provisions, Illinois Municipal Retirement Fund (IMRF), State Universities, and Downstate Teacher Articles of the Illinois Pension Code. With regard to Tier 2 members under the Downstate Teacher or State Universities Article and Tier 2 regular employees who are employees of an educational employer: makes changes to the age and service credit requirements for receiving an annuity; increases the amount of the automatic annual increases to retirement annuities; makes changes to the formula for calculating final average salary; and increases the limitation on the amount of salary that is used to calculate benefits. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-01-21 - Referred to Assignments [SB3689 Detail]

Download: Illinois-2021-SB3689-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB3689 Introduced 1/21/2022, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-160
40 ILCS 5/7-114 from Ch. 108 1/2, par. 7-114
40 ILCS 5/7-116 from Ch. 108 1/2, par. 7-116
40 ILCS 5/7-141 from Ch. 108 1/2, par. 7-141
40 ILCS 5/7-142 from Ch. 108 1/2, par. 7-142
40 ILCS 5/15-111 from Ch. 108 1/2, par. 15-111
40 ILCS 5/15-112 from Ch. 108 1/2, par. 15-112
40 ILCS 5/15-135 from Ch. 108 1/2, par. 15-135
40 ILCS 5/15-136 from Ch. 108 1/2, par. 15-136
40 ILCS 5/15-198
40 ILCS 5/16-203
30 ILCS 805/8.46 new
Amends the General Provisions, Illinois Municipal Retirement Fund (IMRF), State Universities, and Downstate Teacher Articles of the Illinois Pension Code. With regard to Tier 2 members under the Downstate Teacher or State Universities Article and Tier 2 regular employees who are employees of an educational employer: makes changes to the age and service credit requirements for receiving an annuity; increases the amount of the automatic annual increases to retirement annuities; makes changes to the formula for calculating final average salary; and increases the limitation on the amount of salary that is used to calculate benefits. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB102 24377 RPS 33611 b
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY
A BILL FOR
SB3689 LRB102 24377 RPS 33611 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 10. The Illinois Pension Code is amended by
changing Sections 1-160, 7-114, 7-116, 7-141, 7-142, 15-111,
15-112, 15-135, 15-136, 15-198, and 16-203 as follows:
(40 ILCS 5/1-160)
Sec. 1-160. Provisions applicable to new hires.
(a) The provisions of this Section apply to a person who,
on or after January 1, 2011, first becomes a member or a
participant under any reciprocal retirement system or pension
fund established under this Code, other than a retirement
system or pension fund established under Article 2, 3, 4, 5, 6,
7, 15, or 18 of this Code, notwithstanding any other provision
of this Code to the contrary, but do not apply to any
self-managed plan established under this Code or to any
participant of the retirement plan established under Section
22-101; except that this Section applies to a person who
elected to establish alternative credits by electing in
writing after January 1, 2011, but before August 8, 2011,
under Section 7-145.1 of this Code. Notwithstanding anything
to the contrary in this Section, for purposes of this Section,
a person who is a Tier 1 regular employee as defined in Section

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7-109.4 of this Code or who participated in a retirement
system under Article 15 prior to January 1, 2011 shall be
deemed a person who first became a member or participant prior
to January 1, 2011 under any retirement system or pension fund
subject to this Section. The changes made to this Section by
Public Act 98-596 are a clarification of existing law and are
intended to be retroactive to January 1, 2011 (the effective
date of Public Act 96-889), notwithstanding the provisions of
Section 1-103.1 of this Code.
This Section does not apply to a person who first becomes a
noncovered employee under Article 14 on or after the
implementation date of the plan created under Section 1-161
for that Article, unless that person elects under subsection
(b) of Section 1-161 to instead receive the benefits provided
under this Section and the applicable provisions of that
Article.
This Section does not apply to a person who first becomes a
member or participant under Article 16 on or after the
implementation date of the plan created under Section 1-161
for that Article, unless that person elects under subsection
(b) of Section 1-161 to instead receive the benefits provided
under this Section and the applicable provisions of that
Article.
This Section does not apply to a person who elects under
subsection (c-5) of Section 1-161 to receive the benefits
under Section 1-161.

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This Section does not apply to a person who first becomes a
member or participant of an affected pension fund on or after 6
months after the resolution or ordinance date, as defined in
Section 1-162, unless that person elects under subsection (c)
of Section 1-162 to receive the benefits provided under this
Section and the applicable provisions of the Article under
which he or she is a member or participant.
(b) "Final average salary" means, except as otherwise
provided in this subsection, the average monthly (or annual)
salary obtained by dividing the total salary or earnings
calculated under the Article applicable to the member or
participant during the 96 consecutive months (or 8 consecutive
years) of service within the last 120 months (or 10 years) of
service in which the total salary or earnings calculated under
the applicable Article was the highest by the number of months
(or years) of service in that period. For the purposes of a
person who first becomes a member or participant of any
retirement system or pension fund to which this Section
applies on or after January 1, 2011, in this Code, "final
average salary" shall be substituted for the following:
(1) (Blank).
(2) In Articles 8, 9, 10, 11, and 12, "highest average
annual salary for any 4 consecutive years within the last
10 years of service immediately preceding the date of
withdrawal".
(3) In Article 13, "average final salary".

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(4) In Article 14, "final average compensation".
(5) In Article 17, "average salary".
(6) In Section 22-207, "wages or salary received by
him at the date of retirement or discharge".
A member of the Teachers' Retirement System of the State
of Illinois who retires on or after June 1, 2021 and for whom
the 2020-2021 school year is used in the calculation of the
member's final average salary shall use the higher of the
following for the purpose of determining the member's final
average salary:
(A) the amount otherwise calculated under the next
first paragraph of this subsection; or
(B) an amount calculated by the Teachers' Retirement
System of the State of Illinois using the average of the
monthly (or annual) salary obtained by dividing the total
salary or earnings calculated under Article 16 applicable
to the member or participant during the 72 96 months (or 6
8 years) of service within the last 120 months (or 10
years) of service in which the total salary or earnings
calculated under the Article was the highest by the number
of months (or years) of service in that period.
For a member under Article 16, "final average salary"
means the greater of: (i) the amount otherwise calculated
under this subsection; or (ii) the average monthly (or annual)
salary obtained by dividing the total salary calculated under
Article 16 during the 72 consecutive months (or 6 consecutive

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years) of service within the last 120 months (or 10 years) of
service in which the total salary calculated under the Article
was the highest by the number of months (or years) of service
in that period.
(b-5) Beginning on January 1, 2011, for all purposes under
this Code (including without limitation the calculation of
benefits and employee contributions), the annual earnings,
salary, or wages (based on the plan year) of a member or
participant to whom this Section applies shall not exceed
$106,800; however, that amount shall annually thereafter be
increased by the lesser of (i) 3% of that amount, including all
previous adjustments, or (ii) one-half the annual unadjusted
percentage increase (but not less than zero) in the consumer
price index-u for the 12 months ending with the September
preceding each November 1, including all previous adjustments;
except that beginning in 2022 for purposes of Article 16 of
this Code (including, without limitation, the calculation of
benefits and employee contributions), that amount shall
annually be increased by the greater of: (i) 3%; or (ii) the
annual unadjusted percentage increase in the consumer price
index-u for the 12 months ending with the September preceding
each November 1, including all previous adjustments.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the
average change in prices of goods and services purchased by

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all urban consumers, United States city average, all items,
1982-84 = 100. The new amount resulting from each annual
adjustment shall be determined by the Public Pension Division
of the Department of Insurance and made available to the
boards of the retirement systems and pension funds by November
1 of each year.
(c) A member or participant is entitled to a retirement
annuity upon written application if he or she has attained age
67 (age 65, with respect to service under Article 12 that is
subject to this Section, for a member or participant under
Article 12 who first becomes a member or participant under
Article 12 on or after January 1, 2022 or who makes the
election under item (i) of subsection (d-15) of this Section)
and has at least 10 years of service credit and is otherwise
eligible under the requirements of the applicable Article.
A member or participant who has attained age 62 (age 60,
with respect to service under Article 12 that is subject to
this Section, for a member or participant under Article 12 who
first becomes a member or participant under Article 12 on or
after January 1, 2022 or who makes the election under item (i)
of subsection (d-15) of this Section) and has at least 10 years
of service credit and is otherwise eligible under the
requirements of the applicable Article may elect to receive
the lower retirement annuity provided in subsection (d) of
this Section.
(c-5) A person who first becomes a member or a participant

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subject to this Section on or after July 6, 2017 (the effective
date of Public Act 100-23), notwithstanding any other
provision of this Code to the contrary, is entitled to a
retirement annuity under Article 8 or Article 11 upon written
application if he or she has attained age 65 and has at least
10 years of service credit and is otherwise eligible under the
requirements of Article 8 or Article 11 of this Code,
whichever is applicable.
(c-10) Notwithstanding subsection (c), a member under
Article 16 is entitled to a retirement annuity if he or she has
attained age 60; has at least 35 years of service credit, not
including any service credit for unused and uncompensated
accumulated sick leave days; and is otherwise eligible under
the requirements of Article 16.
Notwithstanding subsection (c), a member under Article 16
is entitled to a retirement annuity upon written application
if he or she has attained age 62; has at least 10 years of
service credit, not including service credit for unused and
uncompensated accumulated sick leave days; and is otherwise
eligible under the requirements of Article 16.
Notwithstanding subsection (c), a member under Article 16
is entitled to a retirement annuity upon written application
if he or she has attained age 64; has at least 10 years of
service credit, including any service credit for unused and
uncompensated sick leave days; and is otherwise eligible under
the requirements of Article 16.

SB3689 - 8 - LRB102 24377 RPS 33611 b
(d) The retirement annuity of a member or participant who
is retiring after attaining age 62 (age 60, with respect to
service under Article 12 that is subject to this Section, for a
member or participant under Article 12 who first becomes a
member or participant under Article 12 on or after January 1,
2022 or who makes the election under item (i) of subsection
(d-15) of this Section) with at least 10 years of service
credit shall be reduced by one-half of 1% for each full month
that the member's age is under age 67 (age 65, with respect to
service under Article 12 that is subject to this Section, for a
member or participant under Article 12 who first becomes a
member or participant under Article 12 on or after January 1,
2022 or who makes the election under item (i) of subsection
(d-15) of this Section). This subsection does not apply to a
person who meets the requirements under subsection (c-10).
(d-5) The retirement annuity payable under Article 8 or
Article 11 to an eligible person subject to subsection (c-5)
of this Section who is retiring at age 60 with at least 10
years of service credit shall be reduced by one-half of 1% for
each full month that the member's age is under age 65.
(d-10) Each person who first became a member or
participant under Article 8 or Article 11 of this Code on or
after January 1, 2011 and prior to July 6, 2017 (the effective
date of Public Act 100-23) this amendatory Act of the 100th
General Assembly shall make an irrevocable election either:
(i) to be eligible for the reduced retirement age

SB3689 - 9 - LRB102 24377 RPS 33611 b
provided in subsections (c-5) and (d-5) of this Section,
the eligibility for which is conditioned upon the member
or participant agreeing to the increases in employee
contributions for age and service annuities provided in
subsection (a-5) of Section 8-174 of this Code (for
service under Article 8) or subsection (a-5) of Section
11-170 of this Code (for service under Article 11); or
(ii) to not agree to item (i) of this subsection
(d-10), in which case the member or participant shall
continue to be subject to the retirement age provisions in
subsections (c) and (d) of this Section and the employee
contributions for age and service annuity as provided in
subsection (a) of Section 8-174 of this Code (for service
under Article 8) or subsection (a) of Section 11-170 of
this Code (for service under Article 11).
The election provided for in this subsection shall be made
between October 1, 2017 and November 15, 2017. A person
subject to this subsection who makes the required election
shall remain bound by that election. A person subject to this
subsection who fails for any reason to make the required
election within the time specified in this subsection shall be
deemed to have made the election under item (ii).
(d-15) Each person who first becomes a member or
participant under Article 12 on or after January 1, 2011 and
prior to January 1, 2022 shall make an irrevocable election
either:

SB3689 - 10 - LRB102 24377 RPS 33611 b
(i) to be eligible for the reduced retirement age
specified in subsections (c) and (d) of this Section, the
eligibility for which is conditioned upon the member or
participant agreeing to the increase in employee
contributions for service annuities specified in
subsection (b) of Section 12-150; or
(ii) to not agree to item (i) of this subsection
(d-15), in which case the member or participant shall not
be eligible for the reduced retirement age specified in
subsections (c) and (d) of this Section and shall not be
subject to the increase in employee contributions for
service annuities specified in subsection (b) of Section
12-150.
The election provided for in this subsection shall be made
between January 1, 2022 and April 1, 2022. A person subject to
this subsection who makes the required election shall remain
bound by that election. A person subject to this subsection
who fails for any reason to make the required election within
the time specified in this subsection shall be deemed to have
made the election under item (ii).
(e) Any retirement annuity or supplemental annuity shall
be subject to annual increases on the January 1 occurring
either on or after the attainment of age 67 (age 65, with
respect to service under Article 12 that is subject to this
Section, for a member or participant under Article 12 who
first becomes a member or participant under Article 12 on or

SB3689 - 11 - LRB102 24377 RPS 33611 b
after January 1, 2022 or who makes the election under item (i)
of subsection (d-15); and beginning on July 6, 2017 (the
effective date of Public Act 100-23) this amendatory Act of
the 100th General Assembly, age 65 with respect to service
under Article 8 or Article 11 for eligible persons who: (i) are
subject to subsection (c-5) of this Section; or (ii) made the
election under item (i) of subsection (d-10) of this Section)
or the first anniversary of the annuity start date, whichever
is later. Except for retirement annuities under Article 16,
each Each annual increase shall be calculated at 3% or
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, whichever
is less, of the originally granted retirement annuity. If the
annual unadjusted percentage change in the consumer price
index-u for the 12 months ending with the September preceding
each November 1 is zero or there is a decrease, then the
annuity shall not be increased.
For retirement annuities under Article 16, each annual
increase shall be calculated at 3% or one-half the annual
unadjusted percentage increase in the consumer price index-u
for the 12 months ending with the September preceding each
November 1, whichever is greater, of the originally granted
retirement annuity.
For the purposes of Section 1-103.1 of this Code, the
changes made to this Section by this amendatory Act of the

SB3689 - 12 - LRB102 24377 RPS 33611 b
102nd General Assembly are applicable without regard to
whether the employee was in active service on or after the
effective date of this amendatory Act of the 102nd General
Assembly.
For the purposes of Section 1-103.1 of this Code, the
changes made to this Section by Public Act 102-263 this
amendatory Act of the 102nd General Assembly are applicable
without regard to whether the employee was in active service
on or after August 6, 2021 (the effective date of Public Act
102-263) this amendatory Act of the 102nd General Assembly.
For the purposes of Section 1-103.1 of this Code, the
changes made to this Section by Public Act 100-23 this
amendatory Act of the 100th General Assembly are applicable
without regard to whether the employee was in active service
on or after July 6, 2017 (the effective date of Public Act
100-23) this amendatory Act of the 100th General Assembly.
(f) The initial survivor's or widow's annuity of an
otherwise eligible survivor or widow of a retired member or
participant who first became a member or participant on or
after January 1, 2011 shall be in the amount of 66 2/3% of the
retired member's or participant's retirement annuity at the
date of death. In the case of the death of a member or
participant who has not retired and who first became a member
or participant on or after January 1, 2011, eligibility for a
survivor's or widow's annuity shall be determined by the
applicable Article of this Code. The initial benefit shall be

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66 2/3% of the earned annuity without a reduction due to age. A
child's annuity of an otherwise eligible child shall be in the
amount prescribed under each Article if applicable. Any
survivor's or widow's annuity shall be increased (1) on each
January 1 occurring on or after the commencement of the
annuity if the deceased member died while receiving a
retirement annuity or (2) in other cases, on each January 1
occurring after the first anniversary of the commencement of
the annuity. Each annual increase shall be calculated at 3% or
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, whichever
is less, of the originally granted survivor's annuity. If the
annual unadjusted percentage change in the consumer price
index-u for the 12 months ending with the September preceding
each November 1 is zero or there is a decrease, then the
annuity shall not be increased.
(g) The benefits in Section 14-110 apply only if the
person is a State policeman, a fire fighter in the fire
protection service of a department, a conservation police
officer, an investigator for the Secretary of State, an arson
investigator, a Commerce Commission police officer,
investigator for the Department of Revenue or the Illinois
Gaming Board, a security employee of the Department of
Corrections or the Department of Juvenile Justice, or a
security employee of the Department of Innovation and

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Technology, as those terms are defined in subsection (b) and
subsection (c) of Section 14-110. A person who meets the
requirements of this Section is entitled to an annuity
calculated under the provisions of Section 14-110, in lieu of
the regular or minimum retirement annuity, only if the person
has withdrawn from service with not less than 20 years of
eligible creditable service and has attained age 60,
regardless of whether the attainment of age 60 occurs while
the person is still in service.
(h) If a person who first becomes a member or a participant
of a retirement system or pension fund subject to this Section
on or after January 1, 2011 is receiving a retirement annuity
or retirement pension under that system or fund and becomes a
member or participant under any other system or fund created
by this Code and is employed on a full-time basis, except for
those members or participants exempted from the provisions of
this Section under subsection (a) of this Section, then the
person's retirement annuity or retirement pension under that
system or fund shall be suspended during that employment. Upon
termination of that employment, the person's retirement
annuity or retirement pension payments shall resume and be
recalculated if recalculation is provided for under the
applicable Article of this Code.
If a person who first becomes a member of a retirement
system or pension fund subject to this Section on or after
January 1, 2012 and is receiving a retirement annuity or

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retirement pension under that system or fund and accepts on a
contractual basis a position to provide services to a
governmental entity from which he or she has retired, then
that person's annuity or retirement pension earned as an
active employee of the employer shall be suspended during that
contractual service. A person receiving an annuity or
retirement pension under this Code shall notify the pension
fund or retirement system from which he or she is receiving an
annuity or retirement pension, as well as his or her
contractual employer, of his or her retirement status before
accepting contractual employment. A person who fails to submit
such notification shall be guilty of a Class A misdemeanor and
required to pay a fine of $1,000. Upon termination of that
contractual employment, the person's retirement annuity or
retirement pension payments shall resume and, if appropriate,
be recalculated under the applicable provisions of this Code.
(i) (Blank).
(j) In the case of a conflict between the provisions of
this Section and any other provision of this Code, the
provisions of this Section shall control.
(Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;
102-210, eff. 1-1-22; 102-263, eff. 8-6-21; revised 9-28-21.)
(40 ILCS 5/7-114) (from Ch. 108 1/2, par. 7-114)
Sec. 7-114. Earnings. "Earnings":
(a) An amount to be determined by the board, equal to the

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sum of:
1. The total amount of money paid to an employee for
personal services or official duties as an employee
(except those employed as independent contractors) paid
out of the general fund, or out of any special funds
controlled by the municipality, or by any instrumentality
thereof, or participating instrumentality, including
compensation, fees, allowances (but not including amounts
associated with a vehicle allowance payable to an employee
who first becomes a participating employee on or after the
effective date of this amendatory Act of the 100th General
Assembly), or other emolument paid for official duties
(but not including automobile maintenance, travel expense,
or reimbursements for expenditures incurred in the
performance of duties) and, for fee offices, the fees or
earnings of the offices to the extent such fees are paid
out of funds controlled by the municipality, or
instrumentality or participating instrumentality; and
2. The money value, as determined by rules prescribed
by the governing body of the municipality, or
instrumentality thereof, of any board, lodging, fuel,
laundry, and other allowances provided an employee in lieu
of money.
(b) For purposes of determining benefits payable under
this fund payments to a person who is engaged in an
independently established trade, occupation, profession or

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business and who is paid for his service on a basis other than
a monthly or other regular salary, are not earnings.
(c) If a disabled participating employee is eligible to
receive Workers' Compensation for an accidental injury and the
participating municipality or instrumentality which employed
the participating employee when injured continues to pay the
participating employee regular salary or other compensation or
pays the employee an amount in excess of the Workers'
Compensation amount, then earnings shall be deemed to be the
total payments, including an amount equal to the Workers'
Compensation payments. These payments shall be subject to
employee contributions and allocated as if paid to the
participating employee when the regular payroll amounts would
have been paid if the participating employee had continued
working, and creditable service shall be awarded for this
period.
(d) If an elected official who is a participating employee
becomes disabled but does not resign and is not removed from
office, then earnings shall include all salary payments made
for the remainder of that term of office and the official shall
be awarded creditable service for the term of office.
(e) If a participating employee is paid pursuant to "An
Act to provide for the continuation of compensation for law
enforcement officers, correctional officers and firemen who
suffer disabling injury in the line of duty", approved
September 6, 1973, as amended, the payments shall be deemed

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earnings, and the participating employee shall be awarded
creditable service for this period.
(f) Additional compensation received by a person while
serving as a supervisor of assessments, assessor, deputy
assessor or member of a board of review from the State of
Illinois pursuant to Section 4-10 or 4-15 of the Property Tax
Code shall not be earnings for purposes of this Article and
shall not be included in the contribution formula or
calculation of benefits for such person pursuant to this
Article.
(g) Notwithstanding any other provision of this Article,
calendar year earnings for Tier 2 regular employees to whom
this Section applies shall not exceed the amount determined by
the Public Pension Division of the Department of Insurance as
required in this subsection; however, that amount shall
annually thereafter be increased by the lesser of (i) 3% of
that amount, including all previous adjustments, or (ii)
one-half the annual unadjusted percentage increase (but not
less than zero) in the consumer price index-u for the 12 months
ending with the September preceding each November 1, including
all previous adjustments; except that beginning in 2022, for
Tier 2 regular employees who are employees of an educational
employer, that amount shall annually be increased by the
greater of: (i) 3%; or (ii) the annual unadjusted percentage
increase in the consumer price index-u for the 12 months
ending with the September preceding each November 1, including

SB3689 - 19 - LRB102 24377 RPS 33611 b
all previous adjustments.
For the purposes of this Section, "consumer price index-u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the
average change in prices of goods and services purchased by
all urban consumers, United States city average, all items,
1982-84 = 100. The new amount resulting from each annual
adjustment shall be determined by the Public Pension Division
of the Department of Insurance and made available to the Fund
by November 1 of each year.
For the purposes of Section 1-103.1 of this Code, the
changes made to this Section, Section 7-141, and Section 7-142
by this amendatory Act of the 102nd General Assembly are
applicable without regard to whether the Tier 2 regular
employee was in active service on or after the effective date
of this amendatory Act of the 102nd General Assembly.
(Source: P.A. 102-210, eff. 1-1-22.)
(40 ILCS 5/7-116) (from Ch. 108 1/2, par. 7-116)
Sec. 7-116. "Final rate of earnings":
(a) For retirement and survivor annuities, the monthly
earnings obtained by dividing the total earnings received by
the employee during the period of either (1) for Tier 1 regular
employees, the 48 consecutive months of service within the
last 120 months of service in which his total earnings were the
highest, (2) for Tier 2 regular employees who are not

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employees of an educational employer, the 96 consecutive
months of service within the last 120 months of service in
which his total earnings were the highest, (3) for Tier 2
regular employees who are employees of an educational
employer, the 72 consecutive months of service within the last
120 months of service in which total earnings were the
highest, or (4) (3) the employee's total period of service, by
the number of months of service in such period.
(b) For death benefits, the higher of the rate determined
under paragraph (a) of this Section or total earnings received
in the last 12 months of service divided by twelve. If the
deceased employee has less than 12 months of service, the
monthly final rate shall be the monthly rate of pay the
employee was receiving when he began service.
(c) For disability benefits, the total earnings of a
participating employee in the last 12 calendar months of
service prior to the date he becomes disabled divided by 12.
(d) In computing the final rate of earnings: (1) the
earnings rate for all periods of prior service shall be
considered equal to the average earnings rate for the last 3
calendar years of prior service for which creditable service
is received under Section 7-139 or, if there is less than 3
years of creditable prior service, the average for the total
prior service period for which creditable service is received
under Section 7-139; (2) for out of state service and
authorized leave, the earnings rate shall be the rate upon

SB3689 - 21 - LRB102 24377 RPS 33611 b
which service credits are granted; (3) periods of military
leave shall not be considered; (4) the earnings rate for all
periods of disability shall be considered equal to the rate of
earnings upon which the employee's disability benefits are
computed for such periods; (5) the earnings to be considered
for each of the final three months of the final earnings period
for persons who first became participants before January 1,
2012 and the earnings to be considered for each of the final 24
months for participants who first become participants on or
after January 1, 2012 shall not exceed 125% of the highest
earnings of any other month in the final earnings period; and
(6) the annual amount of final rate of earnings shall be the
monthly amount multiplied by the number of months of service
normally required by the position in a year.
(Source: P.A. 102-210, eff. 1-1-22.)
(40 ILCS 5/7-141) (from Ch. 108 1/2, par. 7-141)
Sec. 7-141. Retirement annuities; conditions. Retirement
annuities shall be payable as hereinafter set forth:
(a) A participating employee who, regardless of cause, is
separated from the service of all participating municipalities
and instrumentalities thereof and participating
instrumentalities shall be entitled to a retirement annuity
provided:
1. He is at least age 55 if he is a Tier 1 regular
employee; , he is age 62 if he is a Tier 2 regular

SB3689 - 22 - LRB102 24377 RPS 33611 b
employee; he is age 60 if he has at least 35 years of
creditable service (not including any service for unused
and uncompensated sick leave), is a Tier 2 regular
employee, and is an employee of an educational employer; ,
or, in the case of a person who is eligible to have his
annuity calculated under Section 7-142.1, he is at least
age 50;
2. He is not entitled to receive earnings for
employment in a position requiring him, or entitling him
to elect, to be a participating employee;
3. The amount of his annuity, before the application
of paragraph (b) of Section 7-142 is at least $10 per
month;
4. If he first became a participating employee after
December 31, 1961 and is a Tier 1 regular employee, he has
at least 8 years of service, or, if he is a Tier 2 regular
member, he has at least 10 years of service. This service
requirement shall not apply to any participating employee,
regardless of participation date, if the General Assembly
terminates the Fund.
(b) Retirement annuities shall be payable:
1. As provided in Section 7-119;
2. Except as provided in item 3, upon receipt by the
fund of a written application. The effective date may be
not more than one year prior to the date of the receipt by
the fund of the application;

SB3689 - 23 - LRB102 24377 RPS 33611 b
3. Upon attainment of the required age of distribution
under Section 401(a)(9) of the Internal Revenue Code of
1986, as amended, if the member (i) is no longer in
service, and (ii) is otherwise entitled to an annuity
under this Article;
4. To the beneficiary of the deceased annuitant for
the unpaid amount accrued to date of death, if any.
(Source: P.A. 102-210, Article 5, Section 5-5, eff. 7-30-21;
102-210, Article 10, Section 10-5, eff. 1-1-22; revised
9-28-21.)
(40 ILCS 5/7-142) (from Ch. 108 1/2, par. 7-142)
Sec. 7-142. Retirement annuities - Amount.
(a) The amount of a retirement annuity shall be the sum of
the following, determined in accordance with the actuarial
tables in effect at the time of the grant of the annuity:
1. For Tier 1 regular employees with 8 or more years of
service or for Tier 2 regular employees, an annuity
computed pursuant to subparagraphs a or b of this
subparagraph 1, whichever is the higher, and for employees
with less than 8 or 10 years of service, respectively, the
annuity computed pursuant to subparagraph a:
a. The monthly annuity which can be provided from
the total accumulated normal, municipality and prior
service credits, as of the attained age of the
employee on the date the annuity begins provided that

SB3689 - 24 - LRB102 24377 RPS 33611 b
such annuity shall not exceed 75% of the final rate of
earnings of the employee.
b. (i) The monthly annuity amount determined as
follows by multiplying (a) 1 2/3% for annuitants with
not more than 15 years or (b) 1 2/3% for the first 15
years and 2% for each year in excess of 15 years for
annuitants with more than 15 years by the number of
years plus fractional years, prorated on a basis of
months, of creditable service and multiply the product
thereof by the employee's final rate of earnings.
(ii) For the sole purpose of computing the formula
(and not for the purposes of the limitations
hereinafter stated) $125 shall be considered the final
rate of earnings in all cases where the final rate of
earnings is less than such amount.
(iii) The monthly annuity computed in accordance
with this subparagraph b, shall not exceed an amount
equal to 75% of the final rate of earnings.
(iv) For employees who have less than 35 years of
service, the annuity computed in accordance with this
subparagraph b (as reduced by application of
subparagraph (iii) above) shall be reduced by 0.25%
thereof (0.5% if service was terminated before January
1, 1988 or if the employee is a Tier 2 regular
employee) for each month or fraction thereof (1) that
the employee's age is less than 60 years for Tier 1

SB3689 - 25 - LRB102 24377 RPS 33611 b
regular employees, (2) that the employee's age is less
than 67 years for Tier 2 regular employees, or (3) if
the employee has at least 30 years of service credit,
that the employee's service credit is less than 35
years, whichever is less, on the date the annuity
begins. The following persons are not subject to this
subparagraph (iv): a Tier 2 regular employee who is an
employee of an educational employer, has attained age
60, and has at least 35 years of creditable service,
not including any creditable service for accumulated
unused sick leave; a Tier 2 regular employee who is an
employee of an educational employer, has attained age
62, and has at least 10 years of creditable service,
not including any creditable service for accumulated
unused sick leave; and a Tier 2 regular employee who is
an employee of an educational employer, has attained
age 64, and has at least 10 years of creditable
service, including any creditable service for
accumulated unused sick leave.
2. The annuity which can be provided from the total
accumulated additional credits as of the attained age of
the employee on the date the annuity begins.
(b) If payment of an annuity begins prior to the earliest
age at which the employee will become eligible for an old age
insurance benefit under the Federal Social Security Act, he
may elect that the annuity payments from this fund shall

SB3689 - 26 - LRB102 24377 RPS 33611 b
exceed those payable after his attaining such age by an
amount, computed as determined by rules of the Board, but not
in excess of his estimated Social Security Benefit, determined
as of the effective date of the 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 payable
had no such election been made.
(c) Beginning January 1, 1984 and each January 1
thereafter, the retirement annuity of a Tier 1 regular
employee shall be increased by 3% each year, not compounded.
This increase shall be computed from the effective date of the
retirement annuity, the first increase being 0.25% of the
monthly amount times the number of months from the effective
date to January 1. This increase shall not be applicable to
annuitants who are not in service on or after September 8,
1971.
A retirement annuity of a Tier 2 regular employee shall
receive annual increases on the January 1 occurring either on
or after the attainment of age 67 or the first anniversary of
the annuity start date, whichever is later. Each annual
increase shall be calculated at the lesser of 3% or one-half
the annual unadjusted percentage increase (but not less than
zero) in the consumer price index-u for the 12 months ending
with the September preceding each November 1 of the originally
granted retirement annuity; except that each annual increase
to the retirement annuity of a Tier 2 regular employee who was

SB3689 - 27 - LRB102 24377 RPS 33611 b
an employee of an educational employer shall be calculated at
the greater of 3% or one-half the annual unadjusted percentage
increase (but not less than zero) in the consumer price
index-u for the 12 months ending with the September preceding
each November 1 of the originally granted retirement annuity.
If the annual unadjusted percentage change in the consumer
price index-u for the 12 months ending with the September
preceding each November 1 is zero or there is a decrease, then
the annuity shall not be increased.
(d) Any elected county officer who was entitled to receive
a stipend from the State on or after July 1, 2009 and on or
before June 30, 2010 may establish earnings credit for the
amount of stipend not received, if the elected county official
applies in writing to the fund within 6 months after the
effective date of this amendatory Act of the 96th General
Assembly and pays to the fund an amount equal to (i) employee
contributions on the amount of stipend not received, (ii)
employer contributions determined by the Board equal to the
employer's normal cost of the benefit on the amount of stipend
not received, plus (iii) interest on items (i) and (ii) at the
actuarially assumed rate.
(Source: P.A. 102-210, eff. 1-1-22.)
(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
Sec. 15-111. Earnings.
(a) "Earnings": Subject to Section 15-111.5, an amount

SB3689 - 28 - LRB102 24377 RPS 33611 b
paid for personal services equal to the sum of the basic
compensation plus extra compensation for summer teaching,
overtime or other extra service. For periods for which an
employee receives service credit under subsection (c) of
Section 15-113.1 or Section 15-113.2, earnings are equal to
the basic compensation on which contributions are paid by the
employee during such periods. Compensation for employment
which is irregular, intermittent and temporary shall not be
considered earnings, unless the participant is also receiving
earnings from the employer as an employee under Section
15-107.
With respect to transition pay paid by the University of
Illinois to a person who was a participating employee employed
in the fire department of the University of Illinois's
Champaign-Urbana campus immediately prior to the elimination
of that fire department:
(1) "Earnings" includes transition pay paid to the
employee on or after the effective date of this amendatory
Act of the 91st General Assembly.
(2) "Earnings" includes transition pay paid to the
employee before the effective date of this amendatory Act
of the 91st General Assembly only if (i) employee
contributions under Section 15-157 have been withheld from
that transition pay or (ii) the employee pays to the
System before January 1, 2001 an amount representing
employee contributions under Section 15-157 on that

SB3689 - 29 - LRB102 24377 RPS 33611 b
transition pay. Employee contributions under item (ii) may
be paid in a lump sum, by withholding from additional
transition pay accruing before January 1, 2001, or in any
other manner approved by the System. Upon payment of the
employee contributions on transition pay, the
corresponding employer contributions become an obligation
of the State.
(b) For a Tier 2 member, the annual earnings shall not
exceed $106,800; however, that amount shall annually
thereafter be increased by the lesser of (i) 3% of that amount,
including all previous adjustments, or (ii) one half the
annual unadjusted percentage increase (but not less than zero)
in the consumer price index-u for the 12 months ending with the
September preceding each November 1, including all previous
adjustments; except that beginning in 2022, that amount shall
annually be increased by the greater of: (i) 3% of that amount;
or (ii) the annual unadjusted percentage increase in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, including all previous
adjustments.
For the purposes of this Section, "consumer price index u"
means the index published by the Bureau of Labor Statistics of
the United States Department of Labor that measures the
average change in prices of goods and services purchased by
all urban consumers, United States city average, all items,
1982-84 = 100. The new amount resulting from each annual

SB3689 - 30 - LRB102 24377 RPS 33611 b
adjustment shall be determined by the Public Pension Division
of the Department of Insurance and made available to the
boards of the retirement systems and pension funds by November
1 of each year.
For the purposes of Section 1-103.1 of this Code, the
changes made to this Section, Section 15-135, and Section
15-136 by this amendatory Act of the 102nd General Assembly
are applicable without regard to whether the employee was in
active service on or after the effective date of this
amendatory Act of the 102nd General Assembly.
(c) With each submission of payroll information in the
manner prescribed by the System, the employer shall certify
that the payroll information is correct and complies with all
applicable State and federal laws.
(Source: P.A. 98-92, eff. 7-16-13; 99-897, eff. 1-1-17.)
(40 ILCS 5/15-112) (from Ch. 108 1/2, par. 15-112)
Sec. 15-112. Final rate of earnings. "Final rate of
earnings":
(a) This subsection (a) applies only to a Tier 1 member.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings during the 48
consecutive calendar month period ending with the last day of
final termination of employment or the 4 consecutive academic
years of service in which the employee's earnings were the

SB3689 - 31 - LRB102 24377 RPS 33611 b
highest, whichever is greater. For any other employee, the
average annual earnings during the 4 consecutive academic
years of service in which his or her earnings were the highest.
For an employee with less than 48 months or 4 consecutive
academic years of service, the average earnings during his or
her entire period of service. The earnings of an employee with
more than 36 months of service under item (a) of Section
15-113.1 prior to the date of becoming a participant are, for
such period, considered equal to the average earnings during
the last 36 months of such service.
(b) This subsection (b) applies to a Tier 2 member.
For an employee who is paid on an hourly basis or who
receives an annual salary in installments during 12 months of
each academic year, the average annual earnings obtained by
dividing by 6 8 the total earnings of the employee during the
72 96 consecutive months in which the total earnings were the
highest within the last 120 months prior to termination.
For any other employee, the average annual earnings during
the 6 8 consecutive academic years within the 10 years prior to
termination in which the employee's earnings were the highest.
For an employee with less than 72 96 consecutive months or 6 8
consecutive academic years of service, whichever is necessary,
the average earnings during his or her entire period of
service.
(c) For an employee on leave of absence with pay, or on
leave of absence without pay who makes contributions during

SB3689 - 32 - LRB102 24377 RPS 33611 b
such leave, earnings are assumed to be equal to the basic
compensation on the date the leave began.
(d) For an employee on disability leave, earnings are
assumed to be equal to the basic compensation on the date
disability occurs or the average earnings during the 24 months
immediately preceding the month in which disability occurs,
whichever is greater.
(e) For a Tier 1 member who retires on or after the
effective date of this amendatory Act of 1997 with at least 20
years of service as a firefighter or police officer under this
Article, the final rate of earnings shall be the annual rate of
earnings received by the participant on his or her last day as
a firefighter or police officer under this Article, if that is
greater than the final rate of earnings as calculated under
the other provisions of this Section.
(f) If a Tier 1 member is an employee for at least 6 months
during the academic year in which his or her employment is
terminated, the annual final rate of earnings shall be 25% of
the sum of (1) the annual basic compensation for that year, and
(2) the amount earned during the 36 months immediately
preceding that year, if this is greater than the final rate of
earnings as calculated under the other provisions of this
Section.
(g) In the determination of the final rate of earnings for
an employee, that part of an employee's earnings for any
academic year beginning after June 30, 1997, which exceeds the

SB3689 - 33 - LRB102 24377 RPS 33611 b
employee's earnings with that employer for the preceding year
by more than 20 percent shall be excluded; in the event that an
employee has more than one employer this limitation shall be
calculated separately for the earnings with each employer. In
making such calculation, only the basic compensation of
employees shall be considered, without regard to vacation or
overtime or to contracts for summer employment.
(h) The following are not considered as earnings in
determining final rate of earnings: (1) severance or
separation pay, (2) retirement pay, (3) payment for unused
sick leave, and (4) payments from an employer for the period
used in determining final rate of earnings for any purpose
other than (i) services rendered, (ii) leave of absence or
vacation granted during that period, and (iii) vacation of up
to 56 work days allowed upon termination of employment; except
that, if the benefit has been collectively bargained between
the employer and the recognized collective bargaining agent
pursuant to the Illinois Educational Labor Relations Act,
payment received during a period of up to 2 academic years for
unused sick leave may be considered as earnings in accordance
with the applicable collective bargaining agreement, subject
to the 20% increase limitation of this Section. Any unused
sick leave considered as earnings under this Section shall not
be taken into account in calculating service credit under
Section 15-113.4.
(i) Intermittent periods of service shall be considered as

SB3689 - 34 - LRB102 24377 RPS 33611 b
consecutive in determining final rate of earnings.
(Source: P.A. 98-92, eff. 7-16-13; 99-450, eff. 8-24-15.)
(40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
Sec. 15-135. Retirement annuities; conditions.
(a) This subsection (a) applies only to a Tier 1 member. A
participant who retires in one of the following specified
years with the specified amount of service is entitled to a
retirement annuity at any age under the retirement program
applicable to the participant:
35 years if retirement is in 1997 or before;
34 years if retirement is in 1998;
33 years if retirement is in 1999;
32 years if retirement is in 2000;
31 years if retirement is in 2001;
30 years if retirement is in 2002 or later.
A participant with 8 or more years of service after
September 1, 1941, is entitled to a retirement annuity on or
after attainment of age 55.
A participant with at least 5 but less than 8 years of
service after September 1, 1941, is entitled to a retirement
annuity on or after attainment of age 62.
A participant who has at least 25 years of service in this
system as a police officer or firefighter is entitled to a
retirement annuity on or after the attainment of age 50, if
Rule 4 of Section 15-136 is applicable to the participant.

SB3689 - 35 - LRB102 24377 RPS 33611 b
(a-5) A Tier 2 member is entitled to a retirement annuity
upon written application if he or she has attained age 60; has
at least 35 years of service credit, not including any service
credit for unused and uncompensated accumulated sick leave
days; and is otherwise eligible under the requirements of this
Article.
A Tier 2 member is entitled to a retirement annuity upon
written application if he or she has attained age 62; has at
least 10 years of service credit, not including service credit
for unused and uncompensated accumulated sick leave days; and
is otherwise eligible under the requirements of this Article.
A Tier 2 member is entitled to a retirement annuity upon
written application if he or she has attained age 64; has at
least 10 years of service credit, including any service credit
for unused and uncompensated sick leave days; and is otherwise
eligible under the requirements of this Article.
A Tier 2 member is entitled to a retirement annuity upon
written application if he or she has attained age 67 and has at
least 10 years of service credit and is otherwise eligible
under the requirements of this Article. A Tier 2 member who has
attained age 62 and has at least 10 years of service credit and
is otherwise eligible under the requirements of this Article
may elect to receive the lower retirement annuity provided in
subsection (b-5) of Section 15-136 of this Article.
(a-10) A Tier 2 member who has at least 20 years of service
in this system as a police officer or firefighter is entitled

SB3689 - 36 - LRB102 24377 RPS 33611 b
to a retirement annuity upon written application on or after
the attainment of age 60 if Rule 4 of Section 15-136 is
applicable to the participant. The changes made to this
subsection by this amendatory Act of the 101st General
Assembly apply retroactively to January 1, 2011.
(b) The annuity payment period shall begin on the date
specified by the participant or the recipient of a disability
retirement annuity submitting a written application. For a
participant, the date on which the annuity payment period
begins shall not be prior to termination of employment or more
than one year before the application is received by the board;
however, if the participant is not an employee of an employer
participating in this System or in a participating system as
defined in Article 20 of this Code on April 1 of the calendar
year next following the calendar year in which the participant
attains the age specified under Section 401(a)(9) of the
Internal Revenue Code of 1986, as amended, the annuity payment
period shall begin on that date regardless of whether an
application has been filed. For a recipient of a disability
retirement annuity, the date on which the annuity payment
period begins shall not be prior to the discontinuation of the
disability retirement annuity under Section 15-153.2.
(c) An annuity is not payable if the amount provided under
Section 15-136 is less than $10 per month.
(Source: P.A. 101-610, eff. 1-1-20; 102-210, eff. 7-30-21.)

SB3689 - 37 - LRB102 24377 RPS 33611 b
(40 ILCS 5/15-136) (from Ch. 108 1/2, par. 15-136)
Sec. 15-136. Retirement annuities - Amount. The provisions
of this Section 15-136 apply only to those participants who
are participating in the traditional benefit package or the
portable benefit package and do not apply to participants who
are participating in the self-managed plan.
(a) The amount of a participant's retirement annuity,
expressed in the form of a single-life annuity, shall be
determined by whichever of the following rules is applicable
and provides the largest annuity:
Rule 1: The retirement annuity shall be 1.67% of final
rate of earnings for each of the first 10 years of service,
1.90% for each of the next 10 years of service, 2.10% for each
year of service in excess of 20 but not exceeding 30, and 2.30%
for each year in excess of 30; or for persons who retire on or
after January 1, 1998, 2.2% of the final rate of earnings for
each year of service.
Rule 2: The retirement annuity shall be the sum of the
following, determined from amounts credited to the participant
in accordance with the actuarial tables and the effective rate
of interest in effect at the time the retirement annuity
begins:
(i) the normal annuity which can be provided on an
actuarially equivalent basis, by the accumulated normal
contributions as of the date the annuity begins;
(ii) an annuity from employer contributions of an

SB3689 - 38 - LRB102 24377 RPS 33611 b
amount equal to that which can be provided on an
actuarially equivalent basis from the accumulated normal
contributions made by the participant under Section
15-113.6 and Section 15-113.7 plus 1.4 times all other
accumulated normal contributions made by the participant;
and
(iii) the annuity that can be provided on an
actuarially equivalent basis from the entire contribution
made by the participant under Section 15-113.3.
With respect to a police officer or firefighter who
retires on or after August 14, 1998, the accumulated normal
contributions taken into account under clauses (i) and (ii) of
this Rule 2 shall include the additional normal contributions
made by the police officer or firefighter under Section
15-157(a).
The amount of a retirement annuity calculated under this
Rule 2 shall be computed solely on the basis of the
participant's accumulated normal contributions, as specified
in this Rule and defined in Section 15-116. Neither an
employee or employer contribution for early retirement under
Section 15-136.2 nor any other employer contribution shall be
used in the calculation of the amount of a retirement annuity
under this Rule 2.
This amendatory Act of the 91st General Assembly is a
clarification of existing law and applies to every participant
and annuitant without regard to whether status as an employee

SB3689 - 39 - LRB102 24377 RPS 33611 b
terminates before the effective date of this amendatory Act.
This Rule 2 does not apply to a person who first becomes an
employee under this Article on or after July 1, 2005.
Rule 3: The retirement annuity of a participant who is
employed at least one-half time during the period on which his
or her final rate of earnings is based, shall be equal to the
participant's years of service not to exceed 30, multiplied by
(1) $96 if the participant's final rate of earnings is less
than $3,500, (2) $108 if the final rate of earnings is at least
$3,500 but less than $4,500, (3) $120 if the final rate of
earnings is at least $4,500 but less than $5,500, (4) $132 if
the final rate of earnings is at least $5,500 but less than
$6,500, (5) $144 if the final rate of earnings is at least
$6,500 but less than $7,500, (6) $156 if the final rate of
earnings is at least $7,500 but less than $8,500, (7) $168 if
the final rate of earnings is at least $8,500 but less than
$9,500, and (8) $180 if the final rate of earnings is $9,500 or
more, except that the annuity for those persons having made an
election under Section 15-154(a-1) shall be calculated and
payable under the portable retirement benefit program pursuant
to the provisions of Section 15-136.4.
Rule 4: A participant who is at least age 50 and has 25 or
more years of service as a police officer or firefighter, and a
participant who is age 55 or over and has at least 20 but less
than 25 years of service as a police officer or firefighter,
shall be entitled to a retirement annuity of 2 1/4% of the

SB3689 - 40 - LRB102 24377 RPS 33611 b
final rate of earnings for each of the first 10 years of
service as a police officer or firefighter, 2 1/2% for each of
the next 10 years of service as a police officer or
firefighter, and 2 3/4% for each year of service as a police
officer or firefighter in excess of 20. The retirement annuity
for all other service shall be computed under Rule 1. A Tier 2
member is eligible for a retirement annuity calculated under
Rule 4 only if that Tier 2 member meets the service
requirements for that benefit calculation as prescribed under
this Rule 4 in addition to the applicable age requirement
under subsection (a-10) of Section 15-135.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:
(i) service that is performed while the person is an
employee under subsection (h) of Section 15-107; and
(ii) in the case of an individual who was a
participating employee employed in the fire department of
the University of Illinois's Champaign-Urbana campus
immediately prior to the elimination of that fire
department and who immediately after the elimination of
that fire department transferred to another job with the
University of Illinois, service performed as an employee
of the University of Illinois in a position other than
police officer or firefighter, from the date of that
transfer until the employee's next termination of service
with the University of Illinois.

SB3689 - 41 - LRB102 24377 RPS 33611 b
(b) For a Tier 1 member, the retirement annuity provided
under Rules 1 and 3 above shall be reduced by 1/2 of 1% for
each month the participant is under age 60 at the time of
retirement. However, this reduction shall not apply in the
following cases:
(1) For a disabled participant whose disability
benefits have been discontinued because he or she has
exhausted eligibility for disability benefits under clause
(6) of Section 15-152;
(2) For a participant who has at least the number of
years of service required to retire at any age under
subsection (a) of Section 15-135; or
(3) For that portion of a retirement annuity which has
been provided on account of service of the participant
during periods when he or she performed the duties of a
police officer or firefighter, if these duties were
performed for at least 5 years immediately preceding the
date the retirement annuity is to begin.
(b-5) (Blank). The retirement annuity of a Tier 2 member
who is retiring under Rule 1 or 3 after attaining age 62 with
at least 10 years of service credit shall be reduced by 1/2 of
1% for each full month that the member's age is under age 67.
(c) The maximum retirement annuity provided under Rules 1,
2, 4, and 5 shall be the lesser of (1) the annual limit of
benefits as specified in Section 415 of the Internal Revenue
Code of 1986, as such Section may be amended from time to time

SB3689 - 42 - LRB102 24377 RPS 33611 b
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
(d) A Tier 1 member whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in his
or her retirement annuity as follows:
Effective January 1 immediately following the date the
retirement annuity begins, the annuitant shall receive an
increase in his or her monthly retirement annuity of 0.125% of
the monthly retirement annuity provided under Rule 1, Rule 2,
Rule 3, or Rule 4 contained in this Section, multiplied by the
number of full months which elapsed from the date the
retirement annuity payments began to January 1, 1972, plus
0.1667% of such annuity, multiplied by the number of full
months which elapsed from January 1, 1972, or the date the
retirement annuity payments began, whichever is later, to
January 1, 1978, plus 0.25% of such annuity multiplied by the
number of full months which elapsed from January 1, 1978, or
the date the retirement annuity payments began, whichever is
later, to the effective date of the increase.
The annuitant shall receive an increase in his or her
monthly retirement annuity on each January 1 thereafter during
the annuitant's life of 3% of the monthly annuity provided
under Rule 1, Rule 2, Rule 3, or Rule 4 contained in this
Section. The change made under this subsection by P.A. 81-970
is effective January 1, 1980 and applies to each annuitant

SB3689 - 43 - LRB102 24377 RPS 33611 b
whose status as an employee terminates before or after that
date.
Beginning January 1, 1990, all automatic annual increases
payable under this Section shall be calculated as a percentage
of the total annuity payable at the time of the increase,
including all increases previously granted under this Article.
The change made in this subsection by P.A. 85-1008 is
effective January 26, 1988, and is applicable without regard
to whether status as an employee terminated before that date.
(d-5) A retirement annuity of a Tier 2 member shall
receive annual increases on the January 1 occurring either on
or after the attainment of age 67 or the first anniversary of
the annuity start date, whichever is later. Each annual
increase shall be calculated at 3% or one half the annual
unadjusted percentage increase (but not less than zero) in the
consumer price index-u for the 12 months ending with the
September preceding each November 1, whichever is greater
less, of the originally granted retirement annuity. If the
annual unadjusted percentage change in the consumer price
index-u for the 12 months ending with the September preceding
each November 1 is zero or there is a decrease, then the
annuity shall not be increased.
(e) If, on January 1, 1987, or the date the retirement
annuity payment period begins, whichever is later, the sum of
the retirement annuity provided under Rule 1 or Rule 2 of this
Section and the automatic annual increases provided under the

SB3689 - 44 - LRB102 24377 RPS 33611 b
preceding subsection or Section 15-136.1, amounts to less than
the retirement annuity which would be provided by Rule 3, the
retirement annuity shall be increased as of January 1, 1987,
or the date the retirement annuity payment period begins,
whichever is later, to the amount which would be provided by
Rule 3 of this Section. Such increased amount shall be
considered as the retirement annuity in determining benefits
provided under other Sections of this Article. This paragraph
applies without regard to whether status as an employee
terminated before the effective date of this amendatory Act of
1987, provided that the annuitant was employed at least
one-half time during the period on which the final rate of
earnings was based.
(f) A participant is entitled to such additional annuity
as may be provided on an actuarially equivalent basis, by any
accumulated additional contributions to his or her credit.
However, the additional contributions made by the participant
toward the automatic increases in annuity provided under this
Section shall not be taken into account in determining the
amount of such additional annuity.
(g) If, (1) by law, a function of a governmental unit, as
defined by Section 20-107 of this Code, is transferred in
whole or in part to an employer, and (2) a participant
transfers employment from such governmental unit to such
employer within 6 months after the transfer of the function,
and (3) the sum of (A) the annuity payable to the participant

SB3689 - 45 - LRB102 24377 RPS 33611 b
under Rule 1, 2, or 3 of this Section (B) all proportional
annuities payable to the participant by all other retirement
systems covered by Article 20, and (C) the initial primary
insurance amount to which the participant is entitled under
the Social Security Act, is less than the retirement annuity
which would have been payable if all of the participant's
pension credits validated under Section 20-109 had been
validated under this system, a supplemental annuity equal to
the difference in such amounts shall be payable to the
participant.
(h) On January 1, 1981, an annuitant who was receiving a
retirement annuity on or before January 1, 1971 shall have his
or her retirement annuity then being paid increased $1 per
month for each year of creditable service. On January 1, 1982,
an annuitant whose retirement annuity began on or before
January 1, 1977, shall have his or her retirement annuity then
being paid increased $1 per month for each year of creditable
service.
(i) On January 1, 1987, any annuitant whose retirement
annuity began on or before January 1, 1977, shall have the
monthly retirement annuity increased by an amount equal to 8¢
per year of creditable service times the number of years that
have elapsed since the annuity began.
(j) The changes made to this Section by this amendatory
Act of the 101st General Assembly apply retroactively to
January 1, 2011.

SB3689 - 46 - LRB102 24377 RPS 33611 b
(Source: P.A. 101-610, eff. 1-1-20.)
(40 ILCS 5/15-198)
Sec. 15-198. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
100-23, Public Act 100-587, Public Act 100-769, Public Act
101-10, Public Act 101-610, Public Act 102-16, or this
amendatory Act of the 102nd General Assembly or this
amendatory Act of the 102nd General Assembly.
(b) Notwithstanding any other provision of this Code or
any subsequent amendment to this Code, every new benefit
increase is subject to this Section and shall be deemed to be
granted only in conformance with and contingent upon
compliance with the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.

SB3689 - 47 - LRB102 24377 RPS 33611 b
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of
the Department of Insurance. A new benefit increase created by
a Public Act that does not include the additional funding
required under this subsection is null and void. If the Public
Pension Division determines that the additional funding
provided for a new benefit increase under this subsection is
or has become inadequate, it may so certify to the Governor and
the State Comptroller and, in the absence of corrective action
by the General Assembly, the new benefit increase shall expire
at the end of the fiscal year in which the certification is
made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit

SB3689 - 48 - LRB102 24377 RPS 33611 b
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including, without limitation, a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
101-610, eff. 1-1-20; 102-16, eff. 6-17-21.)
(40 ILCS 5/16-203)
Sec. 16-203. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
95-910, Public Act 100-23, Public Act 100-587, Public Act
100-743, Public Act 100-769, Public Act 101-10, or Public Act
101-49, or Public Act 102-16, or this amendatory Act of the
102nd General Assembly this amendatory Act of the 102nd
General Assembly.
(b) Notwithstanding any other provision of this Code or

SB3689 - 49 - LRB102 24377 RPS 33611 b
any subsequent amendment to this Code, every new benefit
increase is subject to this Section and shall be deemed to be
granted only in conformance with and contingent upon
compliance with the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of
the Department of Insurance. A new benefit increase created by
a Public Act that does not include the additional funding
required under this subsection is null and void. If the Public
Pension Division determines that the additional funding
provided for a new benefit increase under this subsection is
or has become inadequate, it may so certify to the Governor and
the State Comptroller and, in the absence of corrective action
by the General Assembly, the new benefit increase shall expire
at the end of the fiscal year in which the certification is
made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified

SB3689 - 50 - LRB102 24377 RPS 33611 b
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including, without limitation, a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 101-10, eff. 6-5-19; 101-49, eff. 7-12-19;
101-81, eff. 7-12-19; 102-16, eff. 6-17-21; 102-558, eff.
8-20-21; revised 10-15-21.)
Section 90. The State Mandates Act is amended by adding
Section 8.46 as follows:
(30 ILCS 805/8.46 new)
Sec. 8.46. 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 102nd General Assembly.

SB3689 - 51 - LRB102 24377 RPS 33611 b
Section 99. Effective date. This Act takes effect upon
becoming law.