Bill Text: IL SB3932 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Project Labor Agreements Act. Prohibits the State Board of Education and the Capital Development Board from requiring a project labor agreement for any school construction project or grant. Authorizes a board of education to exempt any school construction project from the requirements of the Act. Amends the General Assembly, State Employees, State Universities, Downstate Teachers, and Judges Articles of the Illinois Pension Code. Prohibits employees, except in certain circumstances, from receiving a retirement annuity before age 62. Changes the conditions of eligibility for, and the amount of, automatic annual increases in retirement annuities. Caps pensionable salary and compensation. Suspends the accrual of benefits in traditional and portable benefit packages. Establishes a self-managed plan for each State-funded retirement system. Requires affected participants to participate in the self-managed plans with respect to future service. Shifts normal costs to local school districts if certain mandates are funded. In various Articles, excludes new hires of certain government-related organizations from participation in State retirement systems. Amends the School Code. Makes changes in provisions concerning mandates for public and private schools. Repeals the Driver's Education Act. Amends the Illinois Educational Labor Relations Act. Prohibits school districts from entering into, amending, or renewing certain technology-related collective bargaining agreements. Amends the Prevailing Wage Act. Provides that a board of education may exempt school construction projects undertaken in the district from the Act. Amends the State Mandates Act to require implementation without reimbursement. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [SB3932 Detail]

Download: Illinois-2011-SB3932-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 SB3932 Introduced 11/14/2012, by Sen. Kyle McCarter SYNOPSIS AS INTRODUCED:
See Index
Amends the Project Labor Agreements Act. Prohibits the State Board of Education and the Capital Development Board from requiring a project labor agreement for any school construction project or grant. Authorizes a board of education to exempt any school construction project from the requirements of the Act. Amends the General Assembly, State Employees, State Universities, Downstate Teachers, and Judges Articles of the Illinois Pension Code. Prohibits employees, except in certain circumstances, from receiving a retirement annuity before age 62. Changes the conditions of eligibility for, and the amount of, automatic annual increases in retirement annuities. Caps pensionable salary and compensation. Suspends the accrual of benefits in traditional and portable benefit packages. Establishes a self-managed plan for each State-funded retirement system. Requires affected participants to participate in the self-managed plans with respect to future service. Shifts normal costs to local school districts if certain mandates are funded. In various Articles, excludes new hires of certain government-related organizations from participation in State retirement systems. Amends the School Code. Makes changes in provisions concerning mandates for public and private schools. Repeals the Driver's Education Act. Amends the Illinois Educational Labor Relations Act. Prohibits school districts from entering into, amending, or renewing certain technology-related collective bargaining agreements. Amends the Prevailing Wage Act. Provides that a board of education may exempt school construction projects undertaken in the district from the Act. Amends the State Mandates Act to require implementation without reimbursement. Makes other changes. Effective immediately.
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FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. The Illinois Public Labor Relations Act is
amended by changing Section 15 as follows:
(5 ILCS 315/15) (from Ch. 48, par. 1615)
Sec. 15. Act Takes Precedence.
(a) In case of any conflict between the provisions of this
Act and any other law (other than Section 5 of the State
Employees Group Insurance Act of 1971 and other than the
changes made by this amendatory Act of the 97th General
Assembly or to the Illinois Pension Code by this amendatory Act
of the 96th General Assembly), executive order or
administrative regulation relating to wages, hours and
conditions of employment and employment relations, the
provisions of this Act or any collective bargaining agreement
negotiated thereunder shall prevail and control. Nothing in
this Act shall be construed to replace or diminish the rights
of employees established by Sections 28 and 28a of the
Metropolitan Transit Authority Act, Sections 2.15 through 2.19
of the Regional Transportation Authority Act. The provisions of
this Act are subject to Section 5 of the State Employees Group
Insurance Act of 1971. Nothing in this Act shall be construed

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to replace the necessity of complaints against a sworn peace
officer, as defined in Section 2(a) of the Uniform Peace
Officer Disciplinary Act, from having a complaint supported by
a sworn affidavit.
(b) Except as provided in subsection (a) above, any
collective bargaining contract between a public employer and a
labor organization executed pursuant to this Act shall
supersede any contrary statutes, charters, ordinances, rules
or regulations relating to wages, hours and conditions of
employment and employment relations adopted by the public
employer or its agents. Any collective bargaining agreement
entered into prior to the effective date of this Act shall
remain in full force during its duration.
(c) It is the public policy of this State, pursuant to
paragraphs (h) and (i) of Section 6 of Article VII of the
Illinois Constitution, that the provisions of this Act are the
exclusive exercise by the State of powers and functions which
might otherwise be exercised by home rule units. Such powers
and functions may not be exercised concurrently, either
directly or indirectly, by any unit of local government,
including any home rule unit, except as otherwise authorized by
this Act.
(Source: P.A. 95-331, eff. 8-21-07; 96-889, eff. 1-1-11.)
Section 5. The Project Labor Agreements Act is amended by
changing Sections 10 and 15 and by adding Section 17 as

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follows:
(30 ILCS 571/10)
Sec. 10. Public works projects. Except as provided in
Section 17 of this Act, on On a project-by-project basis, a
State department, agency, authority, board, or instrumentality
that is under the control of the Governor shall include a
project labor agreement on a public works project when that
department, agency, authority, board, or instrumentality has
determined that the agreement advances the State's interests of
cost, efficiency, quality, safety, timeliness, skilled labor
force, labor stability, or the State's policy to advance
minority-owned and women-owned businesses and minority and
female employment.
(Source: P.A. 97-199, eff. 7-27-11.)
(30 ILCS 571/15)
Sec. 15. Public works projects funded with federal funds.
Except as provided in Section 17 of this Act, when When it has
been determined that a project labor agreement is appropriate,
and in furtherance of the President's Executive Order 13502,
the State department, agency, authority, board, or
instrumentality responsible for awarding the project may
include a project labor agreement on a public works project
funded in whole or in part with federal funds.
(Source: P.A. 97-199, eff. 7-27-11.)

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(30 ILCS 571/17 new)
Sec. 17. School construction projects; grants.
(a) Notwithstanding any other provision of this Act, the
State Board of Education and the Capital Development Board
shall not require a project labor agreement for any school
construction project or any school construction project grant
or debt service grant provided under the School Construction
Law.
(b) Notwithstanding any other provision of this Act, the
board of education of any school district may, by passage of a
resolution, exempt any school construction project undertaken
in the district from the requirements of this Act, unless the
district has already entered into a project labor agreement
concerning that school construction project.
(c) For the purposes of this Section, "school construction
project" means the acquisition, development, construction,
reconstruction, rehabilitation, improvement, architectural
planning, and installation of capital facilities consisting of
buildings, structures, durable equipment, and land for
educational purposes.
Section 10. The Illinois Pension Code is amended by
changing Sections 1-160, 2-108, 2-119, 2-119.1, 7-109,
14-103.10, 14-107, 14-110, 14-114, 15-103.1, 15-103.2, 15-107,
15-111, 15-134.5, 15-135, 15-136, 15-158.2, 16-106, 16-121,

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16-132, 16-133.1, 16-152.1, 16-158, 18-111, 18-124, and
18-125.1 and adding Sections 2-103.1, 2-103.2, 2-105.1,
2-126.2, 14-103.40, 14-103.41, 14-103.42, 14-103.43, 14-106.5,
14-133.2, 15-107.1, 15-134.6, 16-104.1, 16-104.2, 16-106.4,
16-131.7, 16-158.2, 18-105.1, 18-105.2, 18-108.1, 18-123.3,
and 18-133.2 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,
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, to any person with respect to
service as a sheriff's law enforcement employee under Article
7, or to any participant of the retirement plan established
under Section 22-101.
(b) "Final average salary" means 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

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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) In Articles 7 (except for service as sheriff's law
enforcement employees) and 15, "final rate of earnings".
(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".
(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".
(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

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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 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 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 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.
(d) The retirement annuity of a member or participant who
is retiring after attaining age 62 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.
(e) Any retirement annuity or supplemental annuity shall be
subject to annual increases on the January 1 occurring either

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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 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.
(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
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

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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, special agent, a fire fighter in the fire
protection service of a department, or a security employee of
the Department of Corrections or the Department of Juvenile
Justice, or an investigator for the Department of State Police,
as those terms are defined in subsection (c) (b) 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

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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
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

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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) Notwithstanding any other provision of this Section, a
person who first becomes a participant of the retirement system
established under Article 15 on or after January 1, 2011 shall
have the option to enroll in the self-managed plan created
under Section 15-158.2 of this Code.
(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. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11;
97-609, eff. 1-1-12.)
(40 ILCS 5/2-103.1 new)
Sec. 2-103.1. Traditional benefit package. "Traditional
benefit package" means the defined benefit retirement program
maintained by the System, which includes retirement annuities
payable directly from the System, as provided in Sections
2-119, 2-119.01, 2-119.1, and 2-120; survivor's annuities
payable directly from the System, as provided in Sections
2-121, 2-121.1, 2-121.2, and 2-121.3; and contribution
refunds, as provided in Section 2-123.

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(40 ILCS 5/2-103.2 new)
Sec. 2-103.2. Self-managed plan. "Self-managed plan" means
the defined contribution retirement program maintained by the
System, as described in Section 2-126.2. The self-managed plan
does not include retirement annuities or survivor's benefits
payable directly from the System, as provided in Sections
2-119, 2-119.01, 2-119.1, 2-120, 2-121, 2-121.1, 2-121.2, and
2-121.3 or refunds determined under Section 2-123.
(40 ILCS 5/2-105.1 new)
Sec. 2-105.1. Tier I employee. "Tier I employee": A
participant who first became a participant before January 1,
2011.
(40 ILCS 5/2-108) (from Ch. 108 1/2, par. 2-108)
Sec. 2-108. Salary. "Salary": (1) For members of the
General Assembly, the total compensation paid to the member by
the State for one year of service, including the additional
amounts, if any, paid to the member as an officer pursuant to
Section 1 of "An Act in relation to the compensation and
emoluments of the members of the General Assembly", approved
December 6, 1907, as now or hereafter amended.
(2) For the State executive officers specified in Section
2-105, the total compensation paid to the member for one year
of service.

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(3) For members of the System who are participants under
Section 2-117.1, or who are serving as Clerk or Assistant Clerk
of the House of Representatives or Secretary or Assistant
Secretary of the Senate, the total compensation paid to the
member for one year of service, but not to exceed the salary of
the highest salaried officer of the General Assembly.
However, in the event that federal law results in any
participant receiving imputed income based on the value of
group term life insurance provided by the State, such imputed
income shall not be included in salary for the purposes of this
Article.
Notwithstanding any other provision of this Code, for
periods of service on and after the effective date of this
amendatory Act of the 97th General Assembly, "salary" does not
include any annual remuneration for personal services in an
amount that is in excess of the annual contribution and benefit
base established for the previous year by the Commissioner of
Social Security pursuant to Section 230 of the federal Social
Security Act.
(Source: P.A. 86-27; 86-273; 86-1028; 86-1488.)
(40 ILCS 5/2-119) (from Ch. 108 1/2, par. 2-119)
Sec. 2-119. Retirement annuity - conditions for
eligibility.
(a) A participant whose service as a member is terminated,
regardless of age or cause, is entitled to a retirement annuity

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beginning on the date specified by the participant in a written
application subject to the following conditions:
1. The date the annuity begins does not precede the
date of final termination of service, or is not more than
30 days before the receipt of the application by the board
in the case of annuities based on disability or one year
before the receipt of the application in the case of
annuities based on attained age;
2. The participant meets one of the following
eligibility requirements:
For a participant who first becomes a participant of
this System before January 1, 2011 (the effective date of
Public Act 96-889):
(A) He or she has attained age 55 and has at least
8 years of service credit;
(B) He or she has attained age 62 and terminated
service after July 1, 1971 with at least 4 years of
service credit; or
(C) He or she has completed 8 years of service and
has become permanently disabled and as a consequence,
is unable to perform the duties of his or her office.
For a participant who first becomes a participant of
this System on or after January 1, 2011 (the effective date
of Public Act 96-889), he or she has attained age 67 and
has at least 8 years of service credit.
Notwithstanding any other provision of this Code,

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beginning on the effective date of this amendatory Act of the
97th General Assembly, a Tier I employee shall not, regardless
of the amount of accrued service credit, be entitled to a
retirement annuity until he or she has attained age 62.
(a-5) A participant who first becomes a participant of this
System on or after January 1, 2011 (the effective date of
Public Act 96-889) who has attained age 62 and has at least 8
years of service credit may elect to receive the lower
retirement annuity provided in paragraph (c) of Section
2-119.01 of this Code.
(b) A participant shall be considered permanently disabled
only if: (1) disability occurs while in service and is of such
a nature as to prevent him or her from reasonably performing
the duties of his or her office at the time; and (2) the board
has received a written certificate by at least 2 licensed
physicians appointed by the board stating that the member is
disabled and that the disability is likely to be permanent.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-119.1) (from Ch. 108 1/2, par. 2-119.1)
Sec. 2-119.1. Automatic increase in retirement annuity.
(a) A participant who retires after June 30, 1967, and who
has not received an initial increase under this Section before
the effective date of this amendatory Act of 1991, shall, in
January or July next following the first anniversary of
retirement, whichever occurs first, and in the same month of

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each year thereafter, but in no event prior to age 60, have the
amount of the originally granted retirement annuity increased
as follows: for each year through 1971, 1 1/2%; for each year
from 1972 through 1979, 2%; and for 1980 and each year
thereafter, 3%. Annuitants who have received an initial
increase under this subsection prior to the effective date of
this amendatory Act of 1991 shall continue to receive their
annual increases in the same month as the initial increase.
(b) Beginning January 1, 1990, for eligible participants
who remain in service after attaining 20 years of creditable
service, the 3% increases provided under subsection (a) shall
begin to accrue on the January 1 next following the date upon
which the participant (1) attains age 55, or (2) attains 20
years of creditable service, whichever occurs later, and shall
continue to accrue while the participant remains in service;
such increases shall become payable on January 1 or July 1,
whichever occurs first, next following the first anniversary of
retirement. For any person who has service credit in the System
for the entire period from January 15, 1969 through December
31, 1992, regardless of the date of termination of service, the
reference to age 55 in clause (1) of this subsection (b) shall
be deemed to mean age 50.
This subsection (b) does not apply to any person who first
becomes a member of the System after the effective date of this
amendatory Act of the 93rd General Assembly.
(b-5) Notwithstanding any other provision of this Article,

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except subsections (f), (f-5), and (g) of this Section, a
participant who first becomes a participant on or after January
1, 2011 (the effective date of Public Act 96-889) shall, in
January or July next following the first anniversary of
retirement, whichever occurs first, and in the same month of
each year thereafter, but in no event prior to age 67, have the
amount of the retirement annuity then being paid increased by
3% or the annual unadjusted percentage increase in the Consumer
Price Index for All Urban Consumers as determined by the Public
Pension Division of the Department of Insurance under
subsection (a) of Section 2-108.1, whichever is less.
(c) The foregoing provisions relating to automatic
increases are not applicable to a participant who retires
before having made contributions (at the rate prescribed in
Section 2-126) for automatic increases for less than the
equivalent of one full year. However, in order to be eligible
for the automatic increases, such a participant may make
arrangements to pay to the system the amount required to bring
the total contributions for the automatic increase to the
equivalent of one year's contributions based upon his or her
last salary.
(d) A participant who terminated service prior to July 1,
1967, with at least 14 years of service is entitled to an
increase in retirement annuity beginning January, 1976, and to
additional increases in January of each year thereafter.
The initial increase shall be 1 1/2% of the originally

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granted retirement annuity multiplied by the number of full
years that the annuitant was in receipt of such annuity prior
to January 1, 1972, plus 2% of the originally granted
retirement annuity for each year after that date. The
subsequent annual increases shall be at the rate of 2% of the
originally granted retirement annuity for each year through
1979 and at the rate of 3% for 1980 and thereafter.
(e) 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 previous increases granted under this
Article.
(f) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the monthly retirement annuity of an annuitant shall
first be subject to annual increases on the January 1 occurring
on or next after either the attainment of age 67 or the January
1 occurring on or next after the fifth anniversary of the
annuity start date, whichever occurs earlier. If on the
effective date of this amendatory Act of the 97th General
Assembly an annuitant has already received an annual increase
under this Section but is not eligible to receive an annual
increase under this subsection (f), then the annual increases
already received shall continue in force, but no additional
annual increase shall be granted until the annuitant meets the

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new eligibility requirements.
(f-5) Notwithstanding subsection (f), no annual increase
shall be paid under this Section in a calendar year if, on
January 1 of the preceding calendar year, the total assets of
the System are less than 85% of the total actuarial liabilities
of the System, as annually certified by the System.
(g) Notwithstanding any other provision of this Code,
except subsection (f-5), beginning on the effective date of
this amendatory Act of the 97th General Assembly, the amount of
each automatic annual increase in retirement annuity occurring
on or after the effective date of this amendatory Act of the
97th General Assembly shall be 3% or one-half of the annual
unadjusted percentage increase, if any, in the Consumer Price
Index-U for the 12 months ending with the preceding September,
whichever is less, of the originally granted retirement
annuity. 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.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/2-126.2 new)
Sec. 2-126.2. Self-managed plan.
(a) The General Assembly finds that the State should have

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the flexibility to provide a defined contribution
(self-managed) plan for eligible participants. Accordingly,
the General Assembly Retirement System is hereby required,
within 6 months after the effective date of this Section, to
establish and administer a self-managed plan, which shall offer
participants the opportunity to accumulate assets for
retirement through a combination of participant and State
contributions that may be invested in mutual funds, collective
investment funds, or other investment products and used to
purchase annuity contracts, either fixed or variable or a
combination of fixed and variable. The plan must be qualified
under the Internal Revenue Code of 1986.
(b) The Board shall adopt the self-managed plan established
under this Section for all participants under this Article.
The General Assembly Retirement System shall be the plan
sponsor for the self-managed plan and shall prepare a plan
document and adopt any rules and procedures as are considered
necessary or desirable for the administration of the
self-managed plan. Consistent with its fiduciary duty to the
participants and beneficiaries of the self-managed plan, the
Board of Trustees of the System may delegate aspects of plan
administration as it sees fit to companies authorized to do
business in this State.
(c) The System shall solicit proposals to provide
administrative services and funding vehicles for the
self-managed plan from insurance and annuity companies and

SB3932 - 21 - LRB097 22549 JDS 71324 b
mutual fund companies, banks, trust companies, or other
financial institutions authorized to do business in this State.
In reviewing the proposals received and approving and
contracting with no fewer than 2 and no more than 7 companies,
the Board of Trustees of the System shall consider, among other
things, the following criteria:
(1) the nature and extent of the benefits that would be
provided to the participants;
(2) the reasonableness of the benefits in relation to
the premium charged;
(3) the suitability of the benefits to the needs and
interests of the participants and the State; and
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company.
The System shall periodically review each approved
company. A company may continue to provide administrative
services and funding vehicles for the self-managed plan only so
long as it continues to be an approved company under contract
with the Board.
In addition to the companies approved by the System under
this subsection (c), the System may offer its participants an
investment fund managed by the System.
(d) Participants in the program must be allowed to direct
the transfer of their account balances among the various
investment options offered, subject to applicable contractual

SB3932 - 22 - LRB097 22549 JDS 71324 b
provisions. The participant shall not be deemed a fiduciary by
reason of providing such investment direction. A person who is
a fiduciary shall not be liable for any loss resulting from
that investment direction and shall not be deemed to have
breached any fiduciary duty by acting in accordance with that
direction. Neither the System nor the State shall guarantee any
of the investments in the participant's account balances.
(e) Notwithstanding any other provision of this Code,
beginning on the effective date of the self-managed plan
established pursuant to this Section, all participants shall
participate in the self-managed plan instead of the traditional
benefit package with respect to service under this Article on
and after that date. A member's participation in the
traditional benefit package under this Article shall terminate
on that date, and any existing rights and credits in the
traditional benefit package shall be rolled over into the
self-managed plan in accordance with subsection (f) of this
Section.
Participation in the self-managed plan under this Section
shall constitute participation in the General Assembly
Retirement System.
A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) If, on the effective date of the self-managed plan
established under this Section, a participant has rights and
credits in the System due to previous participation in the

SB3932 - 23 - LRB097 22549 JDS 71324 b
traditional benefit package, the System shall establish for the
participant an opening account balance in the self-managed
plan, equal to (1) the amount of the contribution refund that
the participant would be eligible to receive under Section
2-123 if the participant terminated employment on that date and
elected a refund of contributions and (2) an amount equal to
the regular employer contribution that would be required to
fund the actual regular cost incurred for each year of service
credit earned, provided that the total opening account balance
does not exceed 7.6% of the participant's salary for that year,
plus interest. The interest used in this subsection (f) is
calculated as the average annual rate of return that the System
has earned over the past 20 fiscal years and is compounded. The
System shall transfer assets from the defined benefit
retirement program to the self-managed plan, as a tax-free
transfer in accordance with Internal Revenue Service
guidelines, for purposes of funding the participant's opening
account balance.
(g) Notwithstanding any other provision of this Article, a
participant may not purchase or receive service or service
credit applicable to the traditional benefit package under this
Article for any period during which the member was a
participant in the self-managed plan established under this
Section.
(h) The self-managed plan shall be funded by contributions
from participants in the self-managed plan, as provided in this

SB3932 - 24 - LRB097 22549 JDS 71324 b
Section.
The annual required contribution for participants in the
self-managed plan shall be an amount equal to 6% of the
employee's salary. This required contribution shall be made as
an employer pick-up under Section 414(h) of the Internal
Revenue Code of 1986 or any successor Section thereof.
Participants may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules adopted by the
System.
(i) A participant in the self-managed plan who receives a
distribution from the self-managed plan while not yet eligible
for retirement under this Article (and Article 20, if
applicable) shall forfeit all service credit and accrued rights
in the System; if he or she subsequently becomes a participant
under this Article again, he or she shall be considered a new
participant. If a former participant again becomes a
participating member (or becomes employed by a participating
system under Article 20 of this Code) and continues as such for
at least 2 years, all rights, service credits, and previous
status as a participant shall be restored upon repayment of the
amount of the distribution, without interest.
(j) If a participant in the self-managed plan terminates
employment, the participant shall be entitled to a benefit that
is based on the account values attributable to contributions
and any investment return thereon.

SB3932 - 25 - LRB097 22549 JDS 71324 b
(k) If a participant so requests, a distribution of funds
from the self-managed plan may be paid in the form of a direct
rollover to another qualified plan, to the extent allowed by
federal law and in accordance with the rules of the System.
(40 ILCS 5/7-109) (from Ch. 108 1/2, par. 7-109)
Sec. 7-109. Employee.
(1) "Employee" means any person who:
(a) 1. Receives earnings as payment for the performance
of personal services or official duties out of the
general fund of a municipality, or out of any special
fund or funds controlled by a municipality, or by an
instrumentality thereof, or a participating
instrumentality, including, in counties, the fees or
earnings of any county fee office; and
2. Under the usual common law rules applicable in
determining the employer-employee relationship, has
the status of an employee with a municipality, or any
instrumentality thereof, or a participating
instrumentality, including aldermen, county
supervisors and other persons (excepting those
employed as independent contractors) who are paid
compensation, fees, allowances or other emolument for
official duties, and, in counties, the several county
fee offices.
(b) Serves as a township treasurer appointed under the

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School Code, as heretofore or hereafter amended, and who
receives for such services regular compensation as
distinguished from per diem compensation, and any regular
employee in the office of any township treasurer whether or
not his earnings are paid from the income of the permanent
township fund or from funds subject to distribution to the
several school districts and parts of school districts as
provided in the School Code, or from both such sources; or
is the chief executive officer, chief educational officer,
chief fiscal officer, or other employee of a Financial
Oversight Panel established pursuant to Article 1H of the
School Code, other than a superintendent or certified
school business official, except that such person shall not
be treated as an employee under this Section if that person
has negotiated with the Financial Oversight Panel, in
conjunction with the school district, a contractual
agreement for exclusion from this Section.
(c) Holds an elective office in a municipality,
instrumentality thereof or participating instrumentality.
(2) "Employee" does not include persons who:
(a) Are eligible for inclusion under any of the
following laws:
1. "An Act in relation to an Illinois State
Teachers' Pension and Retirement Fund", approved May
27, 1915, as amended;
2. Articles 15 and 16 of this Code.

SB3932 - 27 - LRB097 22549 JDS 71324 b
However, such persons shall be included as employees to
the extent of earnings that are not eligible for inclusion
under the foregoing laws for services not of an
instructional nature of any kind.
However, any member of the armed forces who is employed
as a teacher of subjects in the Reserve Officers Training
Corps of any school and who is not certified under the law
governing the certification of teachers shall be included
as an employee.
(b) Are designated by the governing body of a
municipality in which a pension fund is required by law to
be established for policemen or firemen, respectively, as
performing police or fire protection duties, except that
when such persons are the heads of the police or fire
department and are not eligible to be included within any
such pension fund, they shall be included within this
Article; provided, that such persons shall not be excluded
to the extent of concurrent service and earnings not
designated as being for police or fire protection duties.
However, (i) any head of a police department who was a
participant under this Article immediately before October
1, 1977 and did not elect, under Section 3-109 of this Act,
to participate in a police pension fund shall be an
"employee", and (ii) any chief of police who elects to
participate in this Fund under Section 3-109.1 of this
Code, regardless of whether such person continues to be

SB3932 - 28 - LRB097 22549 JDS 71324 b
employed as chief of police or is employed in some other
rank or capacity within the police department, shall be an
employee under this Article for so long as such person is
employed to perform police duties by a participating
municipality and has not lawfully rescinded that election.
(c) After August 26, 2011 (the effective date of Public
Act 97-609) this amendatory Act of the 97th General
Assembly, are contributors to or eligible to contribute to
a Taft-Hartley pension plan established on or before June
1, 2011 and are employees of a theatre, arena, or
convention center that is located in a municipality located
in a county with a population greater than 5,000,000, and
to which the participating municipality is required to
contribute as the person's employer based on earnings from
the municipality. Nothing in this paragraph shall affect
service credit or creditable service for any period of
service prior to August 26, 2011 the effective date of this
amendatory Act of the 97th General Assembly, and this
paragraph shall not apply to individuals who are
participating in the Fund prior to August 26, 2011 the
effective date of this amendatory Act of the 97th General
Assembly.
(d) Become an employee of any of the following
participating instrumentalities on or after the effective
date of this amendatory Act of the 97th General Assembly:
the Illinois Municipal League; the Illinois Association of

SB3932 - 29 - LRB097 22549 JDS 71324 b
Park Districts; the Illinois Supervisors, County
Commissioners and Superintendents of Highways Association;
an association, or not-for-profit corporation, membership
in which is authorized under Section 85-15 of the Township
Code; the United Counties Council; or the Will County
Governmental League.
(3) All persons, including, without limitation, public
defenders and probation officers, who receive earnings from
general or special funds of a county for performance of
personal services or official duties within the territorial
limits of the county, are employees of the county (unless
excluded by subsection (2) of this Section) notwithstanding
that they may be appointed by and are subject to the direction
of a person or persons other than a county board or a county
officer. It is hereby established that an employer-employee
relationship under the usual common law rules exists between
such employees and the county paying their salaries by reason
of the fact that the county boards fix their rates of
compensation, appropriate funds for payment of their earnings
and otherwise exercise control over them. This finding and this
amendatory Act shall apply to all such employees from the date
of appointment whether such date is prior to or after the
effective date of this amendatory Act and is intended to
clarify existing law pertaining to their status as
participating employees in the Fund.
(Source: P.A. 97-429, eff. 8-16-11; 97-609, eff. 8-26-11;

SB3932 - 30 - LRB097 22549 JDS 71324 b
revised 9-28-11.)
(40 ILCS 5/14-103.10) (from Ch. 108 1/2, par. 14-103.10)
Sec. 14-103.10. Compensation.
(a) For periods of service prior to January 1, 1978, the
full rate of salary or wages payable to an employee for
personal services performed if he worked the full normal
working period for his position, subject to the following
maximum amounts: (1) prior to July 1, 1951, $400 per month or
$4,800 per year; (2) between July 1, 1951 and June 30, 1957
inclusive, $625 per month or $7,500 per year; (3) beginning
July 1, 1957, no limitation.
In the case of service of an employee in a position
involving part-time employment, compensation shall be
determined according to the employees' earnings record.
(b) For periods of service on and after January 1, 1978,
all remuneration for personal services performed defined as
"wages" under the Social Security Enabling Act, including that
part of such remuneration which is in excess of any maximum
limitation provided in such Act, and including any benefits
received by an employee under a sick pay plan in effect before
January 1, 1981, but excluding lump sum salary payments:
(1) for vacation,
(2) for accumulated unused sick leave,
(3) upon discharge or dismissal,
(4) for approved holidays.

SB3932 - 31 - LRB097 22549 JDS 71324 b
(c) For periods of service on or after December 16, 1978,
compensation also includes any benefits, other than lump sum
salary payments made at termination of employment, which an
employee receives or is eligible to receive under a sick pay
plan authorized by law.
(d) For periods of service after September 30, 1985,
compensation also includes any remuneration for personal
services not included as "wages" under the Social Security
Enabling Act, which is deducted for purposes of participation
in a program established pursuant to Section 125 of the
Internal Revenue Code or its successor laws.
(e) For members for which Section 1-160 applies for periods
of service on and after January 1, 2011, all remuneration for
personal services performed defined as "wages" under the Social
Security Enabling Act, excluding remuneration that is in excess
of the annual earnings, salary, or wages of a member or
participant, as provided in subsection (b-5) of Section 1-160,
but including any benefits received by an employee under a sick
pay plan in effect before January 1, 1981. Compensation shall
exclude lump sum salary payments:
(1) for vacation;
(2) for accumulated unused sick leave;
(3) upon discharge or dismissal; and
(4) for approved holidays.
(f) Notwithstanding any other provision of this Code, for
periods of service on and after the effective date of this

SB3932 - 32 - LRB097 22549 JDS 71324 b
amendatory Act of the 97th General Assembly, "compensation"
does not include any annual remuneration for personal services
in an amount that is in excess of the annual contribution and
benefit base established for the previous year by the
Commissioner of Social Security pursuant to Section 230 of the
federal Social Security Act or any remuneration for overtime.
(Source: P.A. 96-1490, eff. 1-1-11.)
(40 ILCS 5/14-103.40 new)
Sec. 14-103.40. Tier I employee. "Tier I employee": An
employee under this Article who first became a member or
participant before January 1, 2011 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, or 18 of this Code.
(40 ILCS 5/14-103.41 new)
Sec. 14-103.41. Tier II employee. "Tier II employee": An
employee under this Article to whom Section 1-160 applies.
(40 ILCS 5/14-103.42 new)
Sec. 14-103.42. Traditional benefit package. "Traditional
benefit package" means the defined benefit retirement program
maintained by the System, which includes retirement annuities
payable directly from the System, as provided in Sections
14-107, 14-108, 14-108.3, 14-108.4, 14-109, 14-110, 14-112,

SB3932 - 33 - LRB097 22549 JDS 71324 b
14-113, 14-114, and 14-115; disability benefits payable under
Sections 14-123, 14-123.1, 14-124, 14-125, 14-125.1, and
14-126; death benefits payable directly from the System, as
provided in Sections 14-116, 14-117, and 14-128; widow or
survivors annuities payable directly from the System, as
provided in Sections 14-118, 14-119, 14-120, 14-121, 14-121.1,
and 14-122; and contribution refunds, as provided in Section
14-130. The traditional benefit package also includes any
benefits determined under Section 1-160 with respect to service
performed under this Article.
(40 ILCS 5/14-103.43 new)
Sec. 14-103.43. Self-managed plan. "Self-managed plan"
means the defined contribution retirement program maintained
under the System, as described in Section 14-133.2. The
self-managed plan also includes disability benefits, as
provided in Sections 14-123, 14-123.1, 14-124, 14-125,
14-125.1, and 14-126. The self-managed plan does not include
retirement annuities, death benefits, widow or survivors
annuities payable directly from the System, as provided in
Sections 14-107, 14-108, 14-108.3, 14-108.4, 14-109, 14-110,
14-112, 14-113, 14-114, 14-115, 14-116, 14-117, 14-118,
14-119, 14-120, 14-121, 14-121.1, 14-122, and 14-128 or refunds
determined under Section 14-130.
(40 ILCS 5/14-106.5 new)

SB3932 - 34 - LRB097 22549 JDS 71324 b
Sec. 14-106.5. Suspension of the accrual of benefits under
the traditional benefit package.
(a) Notwithstanding any other provision of this Code, the
retirement annuity of a member who satisfies, on the effective
date of the self-managed plan established under Section
14-133.2, the service requirement for a retirement annuity
under this Article and who retires on or after that date shall
be calculated based on the service credit accrued under this
Article prior to that date and the member's annual rate of
compensation on that date.
However, notwithstanding any other provision of this Code,
a member who does not, on the effective date of the
self-managed plan established under Section 14-133.2, satisfy
the service requirement for a retirement annuity under this
Article shall not be entitled to a retirement annuity under
this Article, but shall instead be eligible to have an initial
account balance established in the self-managed plan in
accordance with Section 14-133.2.
(b) Notwithstanding any other provision of this Code, if a
member or any other person is eligible for a benefit in the
traditional benefit package, other than a retirement annuity,
on the effective date of the self-managed plan established
under Section 14-133.2, then he or she shall continue to be
eligible for that benefit while he or she continues to meet all
otherwise applicable eligibility requirements.
However, notwithstanding any other provision of this Code,

SB3932 - 35 - LRB097 22549 JDS 71324 b
if a member or other person is ineligible for a benefit in the
traditional benefit package, other than a retirement annuity,
on the effective date of the self-managed plan established
under Section 14-133.2, then he or she shall remain ineligible
for that benefit on and after the effective date of this
Section.
(40 ILCS 5/14-107) (from Ch. 108 1/2, par. 14-107)
Sec. 14-107. Retirement annuity - service and age -
conditions. A member is entitled to a retirement annuity after
having at least 8 years of creditable service.
A member who has at least 35 years of creditable service
may claim his or her retirement annuity at any age. A member
having at least 8 years of creditable service but less than 35
may claim his or her retirement annuity upon or after
attainment of age 60 or, beginning January 1, 2001, any lesser
age which, when added to the number of years of his or her
creditable service, equals at least 85. A member upon or after
attainment of age 55 having at least 25 years of creditable
service (30 years if retirement is before January 1, 2001) may
elect to receive the lower retirement annuity provided in
paragraph (c) of Section 14-108 of this Code. For purposes of
the rule of 85, portions of years shall be counted in whole
months.
Notwithstanding any other provision of this Code,
beginning on the effective date of this amendatory Act of the

SB3932 - 36 - LRB097 22549 JDS 71324 b
97th General Assembly, a member shall not, regardless of the
amount of accrued service credit, be entitled to a retirement
annuity until he or she has attained age 62, except as provided
in Section 14-110 and subsection (g) of Section 1-160.
The allowance shall begin with the first full calendar
month specified in the member's application therefor, the first
day of which shall not be before the date of withdrawal as
approved by the board. Regardless of the date of withdrawal,
the allowance need not begin within one year of application
therefor.
(Source: P.A. 91-927, eff. 12-14-00.)
(40 ILCS 5/14-110) (from Ch. 108 1/2, par. 14-110)
Sec. 14-110. Alternative retirement annuity.
(a) Any member who has withdrawn from service with not less
than 20 years of eligible creditable service and has attained
age 55, and any member who has withdrawn from service with not
less than 25 years of eligible creditable service and has
attained age 50, regardless of whether the attainment of either
of the specified ages occurs while the member is still in
service, shall, upon payment of the amount specified in
subsection (o), be entitled to receive at the option of the
member, in lieu of the regular or minimum retirement annuity, a
retirement annuity computed as follows:
(i) for periods of service as a noncovered employee: if
retirement occurs on or after January 1, 2001, 3% of final

SB3932 - 37 - LRB097 22549 JDS 71324 b
average compensation for each year of creditable service;
if retirement occurs before January 1, 2001, 2 1/4% of
final average compensation for each of the first 10 years
of creditable service, 2 1/2% for each year above 10 years
to and including 20 years of creditable service, and 2 3/4%
for each year of creditable service above 20 years; and
(ii) for periods of eligible creditable service as a
covered employee: if retirement occurs on or after January
1, 2001, 2.5% of final average compensation for each year
of creditable service; if retirement occurs before January
1, 2001, 1.67% of final average compensation for each of
the first 10 years of such service, 1.90% for each of the
next 10 years of such service, 2.10% for each year of such
service in excess of 20 but not exceeding 30, and 2.30% for
each year in excess of 30.
Such annuity shall be subject to a maximum of 75% of final
average compensation if retirement occurs before January 1,
2001 or to a maximum of 80% of final average compensation if
retirement occurs on or after January 1, 2001.
These rates shall not be applicable to any service
performed by a member as a covered employee which is not
eligible creditable service. Service as a covered employee
which is not eligible creditable service shall be subject to
the rates and provisions of Section 14-108.
(b) For the purpose of this Section, prior to the effective
date of this amendatory Act of the 97th General Assembly,

SB3932 - 38 - LRB097 22549 JDS 71324 b
"eligible creditable service" means creditable service
resulting from service in one or more of the following
positions:
(1) State policeman;
(2) fire fighter in the fire protection service of a
department;
(3) air pilot;
(4) special agent;
(5) investigator for the Secretary of State;
(6) conservation police officer;
(7) investigator for the Department of Revenue or the
Illinois Gaming Board;
(8) security employee of the Department of Human
Services;
(9) Central Management Services security police
officer;
(10) security employee of the Department of
Corrections or the Department of Juvenile Justice;
(11) dangerous drugs investigator;
(12) investigator for the Department of State Police;
(13) investigator for the Office of the Attorney
General;
(14) controlled substance inspector;
(15) investigator for the Office of the State's
Attorneys Appellate Prosecutor;
(16) Commerce Commission police officer;

SB3932 - 39 - LRB097 22549 JDS 71324 b
(17) arson investigator;
(18) State highway maintenance worker.
A person employed in one of the positions specified in this
subsection is entitled to eligible creditable service for
service credit earned under this Article while undergoing the
basic police training course approved by the Illinois Law
Enforcement Training Standards Board, if completion of that
training is required of persons serving in that position. For
the purposes of this Code, service during the required basic
police training course shall be deemed performance of the
duties of the specified position, even though the person is not
a sworn peace officer at the time of the training.
(b-1) For the purpose of this Section, on and after the
effective date of this amendatory Act of the 97th General
Assembly, "eligible creditable service" means creditable
service resulting from service in one or more of the following
positions:
(1) State policeman;
(2) special agent;
(3) security employee of the Department of
Corrections;
(4) investigator for the Department of State Police.
(c) For the purposes of this Section:
(1) The term "state policeman" includes any title or
position in the Department of State Police that is held by
an individual employed under the State Police Act.

SB3932 - 40 - LRB097 22549 JDS 71324 b
(2) The term "fire fighter in the fire protection
service of a department" includes all officers in such fire
protection service including fire chiefs and assistant
fire chiefs.
(3) The term "air pilot" includes any employee whose
official job description on file in the Department of
Central Management Services, or in the department by which
he is employed if that department is not covered by the
Personnel Code, states that his principal duty is the
operation of aircraft, and who possesses a pilot's license;
however, the change in this definition made by this
amendatory Act of 1983 shall not operate to exclude any
noncovered employee who was an "air pilot" for the purposes
of this Section on January 1, 1984.
(4) The term "special agent" means any person who by
reason of employment by the Division of Narcotic Control,
the Bureau of Investigation or, after July 1, 1977, the
Division of Criminal Investigation, the Division of
Internal Investigation, the Division of Operations, or any
other Division or organizational entity in the Department
of State Police is vested by law with duties to maintain
public order, investigate violations of the criminal law of
this State, enforce the laws of this State, make arrests
and recover property. The term "special agent" includes any
title or position in the Department of State Police that is
held by an individual employed under the State Police Act.

SB3932 - 41 - LRB097 22549 JDS 71324 b
(5) The term "investigator for the Secretary of State"
means any person employed by the Office of the Secretary of
State and vested with such investigative duties as render
him ineligible for coverage under the Social Security Act
by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
218(l)(1) of that Act.
A person who became employed as an investigator for the
Secretary of State between January 1, 1967 and December 31,
1975, and who has served as such until attainment of age
60, either continuously or with a single break in service
of not more than 3 years duration, which break terminated
before January 1, 1976, shall be entitled to have his
retirement annuity calculated in accordance with
subsection (a), notwithstanding that he has less than 20
years of credit for such service.
(6) The term "Conservation Police Officer" means any
person employed by the Division of Law Enforcement of the
Department of Natural Resources and vested with such law
enforcement duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D), and 218(l)(1) of that Act. The
term "Conservation Police Officer" includes the positions
of Chief Conservation Police Administrator and Assistant
Conservation Police Administrator.
(7) The term "investigator for the Department of
Revenue" means any person employed by the Department of

SB3932 - 42 - LRB097 22549 JDS 71324 b
Revenue and vested with such investigative duties as render
him ineligible for coverage under the Social Security Act
by reason of Sections 218(d)(5)(A), 218(d)(8)(D) and
218(l)(1) of that Act.
The term "investigator for the Illinois Gaming Board"
means any person employed as such by the Illinois Gaming
Board and vested with such peace officer duties as render
the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D), and 218(l)(1) of that Act.
(8) The term "security employee of the Department of
Human Services" means any person employed by the Department
of Human Services who (i) is employed at the Chester Mental
Health Center and has daily contact with the residents
thereof, (ii) is employed within a security unit at a
facility operated by the Department and has daily contact
with the residents of the security unit, (iii) is employed
at a facility operated by the Department that includes a
security unit and is regularly scheduled to work at least
50% of his or her working hours within that security unit,
or (iv) is a mental health police officer. "Mental health
police officer" means any person employed by the Department
of Human Services in a position pertaining to the
Department's mental health and developmental disabilities
functions who is vested with such law enforcement duties as
render the person ineligible for coverage under the Social

SB3932 - 43 - LRB097 22549 JDS 71324 b
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act. "Security unit"
means that portion of a facility that is devoted to the
care, containment, and treatment of persons committed to
the Department of Human Services as sexually violent
persons, persons unfit to stand trial, or persons not
guilty by reason of insanity. With respect to past
employment, references to the Department of Human Services
include its predecessor, the Department of Mental Health
and Developmental Disabilities.
The changes made to this subdivision (c)(8) by Public
Act 92-14 apply to persons who retire on or after January
1, 2001, notwithstanding Section 1-103.1.
(9) "Central Management Services security police
officer" means any person employed by the Department of
Central Management Services who is vested with such law
enforcement duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act.
(10) For a member who first became an employee under
this Article before July 1, 2005, the term "security
employee of the Department of Corrections or the Department
of Juvenile Justice" means any employee of the Department
of Corrections or the Department of Juvenile Justice or the
former Department of Personnel, and any member or employee
of the Prisoner Review Board, who has daily contact with

SB3932 - 44 - LRB097 22549 JDS 71324 b
inmates or youth by working within a correctional facility
or Juvenile facility operated by the Department of Juvenile
Justice or who is a parole officer or an employee who has
direct contact with committed persons in the performance of
his or her job duties. For a member who first becomes an
employee under this Article on or after July 1, 2005, the
term means an employee of the Department of Corrections or
the Department of Juvenile Justice who is any of the
following: (i) officially headquartered at a correctional
facility or Juvenile facility operated by the Department of
Juvenile Justice, (ii) a parole officer, (iii) a member of
the apprehension unit, (iv) a member of the intelligence
unit, (v) a member of the sort team, or (vi) an
investigator.
(11) The term "dangerous drugs investigator" means any
person who is employed as such by the Department of Human
Services.
(12) The term "investigator for the Department of State
Police" means a person employed by the Department of State
Police who is vested under Section 4 of the Narcotic
Control Division Abolition Act with such law enforcement
powers as render him ineligible for coverage under the
Social Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act.
(13) "Investigator for the Office of the Attorney
General" means any person who is employed as such by the

SB3932 - 45 - LRB097 22549 JDS 71324 b
Office of the Attorney General and is vested with such
investigative duties as render him ineligible for coverage
under the Social Security Act by reason of Sections
218(d)(5)(A), 218(d)(8)(D) and 218(l)(1) of that Act. For
the period before January 1, 1989, the term includes all
persons who were employed as investigators by the Office of
the Attorney General, without regard to social security
status.
(14) "Controlled substance inspector" means any person
who is employed as such by the Department of Professional
Regulation and is vested with such law enforcement duties
as render him ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D) and 218(l)(1) of that Act. The term
"controlled substance inspector" includes the Program
Executive of Enforcement and the Assistant Program
Executive of Enforcement.
(15) The term "investigator for the Office of the
State's Attorneys Appellate Prosecutor" means a person
employed in that capacity on a full time basis under the
authority of Section 7.06 of the State's Attorneys
Appellate Prosecutor's Act.
(16) "Commerce Commission police officer" means any
person employed by the Illinois Commerce Commission who is
vested with such law enforcement duties as render him
ineligible for coverage under the Social Security Act by

SB3932 - 46 - LRB097 22549 JDS 71324 b
reason of Sections 218(d)(5)(A), 218(d)(8)(D), and
218(l)(1) of that Act.
(17) "Arson investigator" means any person who is
employed as such by the Office of the State Fire Marshal
and is vested with such law enforcement duties as render
the person ineligible for coverage under the Social
Security Act by reason of Sections 218(d)(5)(A),
218(d)(8)(D), and 218(l)(1) of that Act. A person who was
employed as an arson investigator on January 1, 1995 and is
no longer in service but not yet receiving a retirement
annuity may convert his or her creditable service for
employment as an arson investigator into eligible
creditable service by paying to the System the difference
between the employee contributions actually paid for that
service and the amounts that would have been contributed if
the applicant were contributing at the rate applicable to
persons with the same social security status earning
eligible creditable service on the date of application.
(18) The term "State highway maintenance worker" means
a person who is either of the following:
(i) A person employed on a full-time basis by the
Illinois Department of Transportation in the position
of highway maintainer, highway maintenance lead
worker, highway maintenance lead/lead worker, heavy
construction equipment operator, power shovel
operator, or bridge mechanic; and whose principal

SB3932 - 47 - LRB097 22549 JDS 71324 b
responsibility is to perform, on the roadway, the
actual maintenance necessary to keep the highways that
form a part of the State highway system in serviceable
condition for vehicular traffic.
(ii) A person employed on a full-time basis by the
Illinois State Toll Highway Authority in the position
of equipment operator/laborer H-4, equipment
operator/laborer H-6, welder H-4, welder H-6,
mechanical/electrical H-4, mechanical/electrical H-6,
water/sewer H-4, water/sewer H-6, sign maker/hanger
H-4, sign maker/hanger H-6, roadway lighting H-4,
roadway lighting H-6, structural H-4, structural H-6,
painter H-4, or painter H-6; and whose principal
responsibility is to perform, on the roadway, the
actual maintenance necessary to keep the Authority's
tollways in serviceable condition for vehicular
traffic.
(d) A security employee of the Department of Corrections or
the Department of Juvenile Justice, and a security employee of
the Department of Human Services who is not a mental health
police officer, shall not be eligible for the alternative
retirement annuity provided by this Section unless he or she
meets the following minimum age and service requirements at the
time of retirement:
(i) 25 years of eligible creditable service and age 55;
or

SB3932 - 48 - LRB097 22549 JDS 71324 b
(ii) beginning January 1, 1987, 25 years of eligible
creditable service and age 54, or 24 years of eligible
creditable service and age 55; or
(iii) beginning January 1, 1988, 25 years of eligible
creditable service and age 53, or 23 years of eligible
creditable service and age 55; or
(iv) beginning January 1, 1989, 25 years of eligible
creditable service and age 52, or 22 years of eligible
creditable service and age 55; or
(v) beginning January 1, 1990, 25 years of eligible
creditable service and age 51, or 21 years of eligible
creditable service and age 55; or
(vi) beginning January 1, 1991, 25 years of eligible
creditable service and age 50, or 20 years of eligible
creditable service and age 55.
Persons who have service credit under Article 16 of this
Code for service as a security employee of the Department of
Corrections or the Department of Juvenile Justice, or the
Department of Human Services in a position requiring
certification as a teacher may count such service toward
establishing their eligibility under the service requirements
of this Section; but such service may be used only for
establishing such eligibility, and not for the purpose of
increasing or calculating any benefit.
(e) If a member enters military service while working in a
position in which eligible creditable service may be earned,

SB3932 - 49 - LRB097 22549 JDS 71324 b
and returns to State service in the same or another such
position, and fulfills in all other respects the conditions
prescribed in this Article for credit for military service,
such military service shall be credited as eligible creditable
service for the purposes of the retirement annuity prescribed
in this Section.
(f) For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before October 1, 1975 as a covered employee in the
position of special agent, conservation police officer, mental
health police officer, or investigator for the Secretary of
State, shall be deemed to have been service as a noncovered
employee, provided that the employee pays to the System prior
to retirement an amount equal to (1) the difference between the
employee contributions that would have been required for such
service as a noncovered employee, and the amount of employee
contributions actually paid, plus (2) if payment is made after
July 31, 1987, regular interest on the amount specified in item
(1) from the date of service to the date of payment.
For purposes of calculating retirement annuities under
this Section, periods of service rendered after December 31,
1968 and before January 1, 1982 as a covered employee in the
position of investigator for the Department of Revenue shall be
deemed to have been service as a noncovered employee, provided
that the employee pays to the System prior to retirement an
amount equal to (1) the difference between the employee

SB3932 - 50 - LRB097 22549 JDS 71324 b
contributions that would have been required for such service as
a noncovered employee, and the amount of employee contributions
actually paid, plus (2) if payment is made after January 1,
1990, regular interest on the amount specified in item (1) from
the date of service to the date of payment.
(g) A State policeman may elect, not later than January 1,
1990, to establish eligible creditable service for up to 10
years of his service as a policeman under Article 3, by filing
a written election with the Board, accompanied by payment of an
amount to be determined by the Board, equal to (i) the
difference between the amount of employee and employer
contributions transferred to the System under Section 3-110.5,
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
Subject to the limitation in subsection (i), a State
policeman may elect, not later than July 1, 1993, to establish
eligible creditable service for up to 10 years of his service
as a member of the County Police Department under Article 9, by
filing a written election with the Board, accompanied by
payment of an amount to be determined by the Board, equal to
(i) the difference between the amount of employee and employer
contributions transferred to the System under Section 9-121.10
and the amounts that would have been contributed had those

SB3932 - 51 - LRB097 22549 JDS 71324 b
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
(h) Subject to the limitation in subsection (i), a State
policeman or investigator for the Secretary of State may elect
to establish eligible creditable service for up to 12 years of
his service as a policeman under Article 5, by filing a written
election with the Board on or before January 31, 1992, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred
to the System under Section 5-236, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 10 years of service as a sheriff's
law enforcement employee under Article 7, by filing a written
election with the Board on or before January 31, 1993, and
paying to the System by January 31, 1994 an amount to be
determined by the Board, equal to (i) the difference between
the amount of employee and employer contributions transferred

SB3932 - 52 - LRB097 22549 JDS 71324 b
to the System under Section 7-139.7, and the amounts that would
have been contributed had such contributions been made at the
rates applicable to State policemen, plus (ii) interest thereon
at the effective rate for each year, compounded annually, from
the date of service to the date of payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, or investigator for
the Secretary of State may elect to establish eligible
creditable service for up to 5 years of service as a police
officer under Article 3, a policeman under Article 5, a
sheriff's law enforcement employee under Article 7, a member of
the county police department under Article 9, or a police
officer under Article 15 by filing a written election with the
Board and paying to the System an amount to be determined by
the Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.6, 5-236, 7-139.8, 9-121.10, or 15-134.4
and the amounts that would have been contributed had such
contributions been made at the rates applicable to State
policemen, plus (ii) interest thereon at the effective rate for
each year, compounded annually, from the date of service to the
date of payment.
Subject to the limitation in subsection (i), an
investigator for the Office of the Attorney General, or an
investigator for the Department of Revenue, may elect to
establish eligible creditable service for up to 5 years of

SB3932 - 53 - LRB097 22549 JDS 71324 b
service as a police officer under Article 3, a policeman under
Article 5, a sheriff's law enforcement employee under Article
7, or a member of the county police department under Article 9
by filing a written election with the Board within 6 months
after August 25, 2009 (the effective date of Public Act 96-745)
and paying to the System an amount to be determined by the
Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.6, 5-236, 7-139.8, or 9-121.10 and the
amounts that would have been contributed had such contributions
been made at the rates applicable to State policemen, plus (ii)
interest thereon at the actuarially assumed rate for each year,
compounded annually, from the date of service to the date of
payment.
Subject to the limitation in subsection (i), a State
policeman, conservation police officer, investigator for the
Office of the Attorney General, an investigator for the
Department of Revenue, or investigator for the Secretary of
State may elect to establish eligible creditable service for up
to 5 years of service as a person employed by a participating
municipality to perform police duties, or law enforcement
officer employed on a full-time basis by a forest preserve
district under Article 7, a county corrections officer, or a
court services officer under Article 9, by filing a written
election with the Board within 6 months after August 25, 2009
(the effective date of Public Act 96-745) and paying to the

SB3932 - 54 - LRB097 22549 JDS 71324 b
System an amount to be determined by the Board, equal to (i)
the difference between the amount of employee and employer
contributions transferred to the System under Sections 7-139.8
and 9-121.10 and the amounts that would have been contributed
had such contributions been made at the rates applicable to
State policemen, plus (ii) interest thereon at the actuarially
assumed rate for each year, compounded annually, from the date
of service to the date of payment.
(i) The total amount of eligible creditable service
established by any person under subsections (g), (h), (j), (k),
and (l) of this Section shall not exceed 12 years.
(j) Subject to the limitation in subsection (i), an
investigator for the Office of the State's Attorneys Appellate
Prosecutor or a controlled substance inspector may elect to
establish eligible creditable service for up to 10 years of his
service as a policeman under Article 3 or a sheriff's law
enforcement employee under Article 7, by filing a written
election with the Board, accompanied by payment of an amount to
be determined by the Board, equal to (1) the difference between
the amount of employee and employer contributions transferred
to the System under Section 3-110.6 or 7-139.8, and the amounts
that would have been contributed had such contributions been
made at the rates applicable to State policemen, plus (2)
interest thereon at the effective rate for each year,
compounded annually, from the date of service to the date of
payment.

SB3932 - 55 - LRB097 22549 JDS 71324 b
(k) Subject to the limitation in subsection (i) of this
Section, an alternative formula employee may elect to establish
eligible creditable service for periods spent as a full-time
law enforcement officer or full-time corrections officer
employed by the federal government or by a state or local
government located outside of Illinois, for which credit is not
held in any other public employee pension fund or retirement
system. To obtain this credit, the applicant must file a
written application with the Board by March 31, 1998,
accompanied by evidence of eligibility acceptable to the Board
and payment of an amount to be determined by the Board, equal
to (1) employee contributions for the credit being established,
based upon the applicant's salary on the first day as an
alternative formula employee after the employment for which
credit is being established and the rates then applicable to
alternative formula employees, plus (2) an amount determined by
the Board to be the employer's normal cost of the benefits
accrued for the credit being established, plus (3) regular
interest on the amounts in items (1) and (2) from the first day
as an alternative formula employee after the employment for
which credit is being established to the date of payment.
(l) Subject to the limitation in subsection (i), a security
employee of the Department of Corrections may elect, not later
than July 1, 1998, to establish eligible creditable service for
up to 10 years of his or her service as a policeman under
Article 3, by filing a written election with the Board,

SB3932 - 56 - LRB097 22549 JDS 71324 b
accompanied by payment of an amount to be determined by the
Board, equal to (i) the difference between the amount of
employee and employer contributions transferred to the System
under Section 3-110.5, and the amounts that would have been
contributed had such contributions been made at the rates
applicable to security employees of the Department of
Corrections, plus (ii) interest thereon at the effective rate
for each year, compounded annually, from the date of service to
the date of payment.
(m) The amendatory changes to this Section made by this
amendatory Act of the 94th General Assembly apply only to: (1)
security employees of the Department of Juvenile Justice
employed by the Department of Corrections before the effective
date of this amendatory Act of the 94th General Assembly and
transferred to the Department of Juvenile Justice by this
amendatory Act of the 94th General Assembly; and (2) persons
employed by the Department of Juvenile Justice on or after the
effective date of this amendatory Act of the 94th General
Assembly who are required by subsection (b) of Section 3-2.5-15
of the Unified Code of Corrections to have a bachelor's or
advanced degree from an accredited college or university with a
specialization in criminal justice, education, psychology,
social work, or a closely related social science or, in the
case of persons who provide vocational training, who are
required to have adequate knowledge in the skill for which they
are providing the vocational training.

SB3932 - 57 - LRB097 22549 JDS 71324 b
(n) A person employed in a position under subsection (b) of
this Section who has purchased service credit under subsection
(j) of Section 14-104 or subsection (b) of Section 14-105 in
any other capacity under this Article may convert up to 5 years
of that service credit into service credit covered under this
Section by paying to the Fund an amount equal to (1) the
additional employee contribution required under Section
14-133, plus (2) the additional employer contribution required
under Section 14-131, plus (3) interest on items (1) and (2) at
the actuarially assumed rate from the date of the service to
the date of payment.
(o) Any member who applies to the System for an alternative
retirement annuity under this Section on or after the effective
date of this subsection (o) shall, at the time of applying for
that annuity, make a one-time payment to the System in an
amount, to be determined by the Board, that is equal to:
(1) in the case of Tier I employees,
(A) the employee contributions that would be due
under Section 14-133 in each of the next 7 years if the
member remained employed during those years in the
position that he or she held on the date of application
for the alternative retirement annuity and earned an
annual salary in each of those years in an amount equal
to the annual salary that he or she earned on the date
of application for the alternative retirement annuity,
plus

SB3932 - 58 - LRB097 22549 JDS 71324 b
(B) the amount of employer contributions that
would be due for that employee under Section 14-131 in
each of the next 7 years, as estimated by the Board,
plus
(C) interest on items (A) and (B) at the
actuarially assumed rate; and
(2) in the case of Tier II employees,
(A) the employee contributions that would be due
under Section 14-133 in each of the next 2 years if the
member remained employed during those years in the
position that he or she held on the date of application
for the alternative retirement annuity and earned an
annual salary in each of those years in an amount equal
to the annual salary that he or she earned on the date
of application for the alternative retirement annuity,
plus
(B) the amount of employer contributions that
would be due for that employee under Section 14-131 in
each of the next 2 years, as estimated by the Board,
plus
(C) interest on items (A) and (B) at the
actuarially assumed rate.
(Source: P.A. 95-530, eff. 8-28-07; 95-1036, eff. 2-17-09;
96-37, eff. 7-13-09; 96-745, eff. 8-25-09; 96-1000, eff.
7-2-10.)

SB3932 - 59 - LRB097 22549 JDS 71324 b
(40 ILCS 5/14-114) (from Ch. 108 1/2, par. 14-114)
Sec. 14-114. Automatic increase in retirement annuity.
(a) Any person receiving a retirement annuity under this
Article who retires having attained age 60, or who retires
before age 60 having at least 35 years of creditable service,
or who retires on or after January 1, 2001 at an age which,
when added to the number of years of his or her creditable
service, equals at least 85, shall, on January 1 next following
the first full year of retirement, have the amount of the then
fixed and payable monthly retirement annuity increased 3%. Any
person receiving a retirement annuity under this Article who
retires before attainment of age 60 and with less than (i) 35
years of creditable service if retirement is before January 1,
2001, or (ii) the number of years of creditable service which,
when added to the member's age, would equal 85, if retirement
is on or after January 1, 2001, shall have the amount of the
fixed and payable retirement annuity increased by 3% on the
January 1 occurring on or next following (1) attainment of age
60, or (2) the first anniversary of retirement, whichever
occurs later. However, for persons who receive the alternative
retirement annuity under Section 14-110, references in this
subsection (a) to attainment of age 60 shall be deemed to refer
to attainment of age 55. For a person receiving early
retirement incentives under Section 14-108.3 whose retirement
annuity began after January 1, 1992 pursuant to an extension
granted under subsection (e) of that Section, the first

SB3932 - 60 - LRB097 22549 JDS 71324 b
anniversary of retirement shall be deemed to be January 1,
1993. For a person who retires on or after June 28, 2001 and on
or before October 1, 2001, and whose retirement annuity is
calculated, in whole or in part, under Section 14-110 or
subsection (g) or (h) of Section 14-108, the first anniversary
of retirement shall be deemed to be January 1, 2002.
On each January 1 following the date of the initial
increase under this subsection, the employee's monthly
retirement annuity shall be increased by an additional 3%.
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 previous increases granted under this Article.
(b) The provisions of subsection (a) of this Section shall
be applicable to an employee only if the employee makes the
additional contributions required after December 31, 1969 for
the purpose of the automatic increases for not less than the
equivalent of one full year. If an employee becomes an
annuitant before his additional contributions equal one full
year's contributions based on his salary at the date of
retirement, the employee may pay the necessary balance of the
contributions to the system, without interest, and be eligible
for the increasing annuity authorized by this Section.
(c) The provisions of subsection (a) of this Section shall
not be applicable to any annuitant who is on retirement on
December 31, 1969, and thereafter returns to State service,

SB3932 - 61 - LRB097 22549 JDS 71324 b
unless the member has established at least one year of
additional creditable service following reentry into service.
(d) In addition to other increases which may be provided by
this Section, on January 1, 1981 any annuitant who was
receiving a retirement annuity on or before January 1, 1971
shall have his retirement annuity then being paid increased $1
per month for each year of creditable service. On January 1,
1982, any annuitant who began receiving a retirement annuity on
or before January 1, 1977, shall have his retirement annuity
then being paid increased $1 per month for each year of
creditable service.
On January 1, 1987, any annuitant who began receiving a
retirement annuity 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.
(e) Every person who receives the alternative retirement
annuity under Section 14-110 and who is eligible to receive the
3% increase under subsection (a) on January 1, 1986, shall also
receive on that date a one-time increase in retirement annuity
equal to the difference between (1) his actual retirement
annuity on that date, including any increases received under
subsection (a), and (2) the amount of retirement annuity he
would have received on that date if the amendments to
subsection (a) made by Public Act 84-162 had been in effect
since the date of his retirement.

SB3932 - 62 - LRB097 22549 JDS 71324 b
(f) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the monthly retirement annuity of an annuitant shall
first be subject to annual increases on the January 1 occurring
on or next after either the attainment of age 67 or the January
1 occurring on or next after the fifth anniversary of the
annuity start date, whichever occurs earlier. If on the
effective date of this amendatory Act of the 97th General
Assembly an annuitant has already received an annual increase
under this Section but is not eligible to receive an annual
increase under this subsection, then the annual increases
already received shall continue in force, but no additional
annual increase shall be granted until the annuitant meets the
new eligibility requirements.
(f-5) Notwithstanding subsection (f), no annual increase
shall be paid under this Section in a calendar year if, on
January 1 of the preceding calendar year, the total assets of
the System are less than 85% of the total actuarial liabilities
of the System, as annually certified by the System.
(g) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
this amendatory Act of the 97th General Assembly shall be 3% or

SB3932 - 63 - LRB097 22549 JDS 71324 b
one-half of the annual unadjusted percentage increase, if any,
in the Consumer Price Index-U for the 12 months ending with the
preceding September, whichever is less, of the originally
granted retirement annuity. 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.
(Source: P.A. 91-927, eff. 12-14-00; 92-14, eff. 6-28-01;
92-651, eff. 7-11-02.)
(40 ILCS 5/14-133.2 new)
Sec. 14-133.2. Self-managed plan.
(a) The General Assembly finds that it is important for
Illinois to be able to attract and retain the most qualified
employees and that in order to attract and retain these
employees, the State of Illinois should have the flexibility to
provide a defined contribution (self-managed) plan for
eligible employees. Accordingly, the State Employees
Retirement System of Illinois is hereby required, within 6
months after the effective date of this Section, to establish
and administer a self-managed plan, which shall offer
participating employees the opportunity to accumulate assets
for retirement through a combination of employee and employer
contributions that may be invested in mutual funds, collective

SB3932 - 64 - LRB097 22549 JDS 71324 b
investment funds, or other investment products and used to
purchase annuity contracts, either fixed or variable or a
combination of fixed and variable. The plan must be qualified
under the Internal Revenue Code of 1986.
(b) The Board shall adopt the self-managed plan established
under this Section for any person who is a member under this
Article.
The State Employees Retirement System of Illinois shall be
the plan sponsor for the self-managed plan and shall prepare a
plan document and adopt such rules and procedures as are
considered necessary or desirable for the administration of the
self-managed plan. Consistent with its fiduciary duty to the
participants and beneficiaries of the self-managed plan, the
Board of Trustees of the System may delegate aspects of plan
administration as it sees fit to companies authorized to do
business in this State.
(c) The System shall solicit proposals to provide
administrative services and funding vehicles for the
self-managed plan from insurance and annuity companies and
mutual fund companies, banks, trust companies, or other
financial institutions authorized to do business in this State.
In reviewing the proposals received and approving and
contracting with no fewer than 2 and no more than 7 companies,
the Board of Trustees of the System shall consider, among other
things, the following criteria:
(1) the nature and extent of the benefits that would be

SB3932 - 65 - LRB097 22549 JDS 71324 b
provided to the participants;
(2) the reasonableness of the benefits in relation to
the premium charged;
(3) the suitability of the benefits to the needs and
interests of the participating employees and the State;
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company; and
(5) the efficacy of the contract in the recruitment and
retention of employees.
The System shall periodically review each approved
company. A company may continue to provide administrative
services and funding vehicles for the self-managed plan only so
long as it continues to be an approved company under contract
with the Board.
In addition to the companies approved by the System under
this subsection (c), the System may offer its participants an
investment fund managed by the System.
(d) Employees who are participating in the program must be
allowed to direct the transfer of their account balances among
the various investment options offered, subject to applicable
contractual provisions. The participant shall not be deemed a
fiduciary by reason of providing such investment direction. A
person who is a fiduciary shall not be liable for any loss
resulting from such investment direction and shall not be
deemed to have breached any fiduciary duty by acting in

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accordance with that direction. Neither the System nor the
employer shall guarantee any of the investments in the
employee's account balances.
(e) Notwithstanding any other provision of this Code,
beginning on the effective date of the self-managed plan
established under this Section, each member shall participate
in the self-managed plan with respect to service under this
Article on and after that date, and a member's ability to
accrue, on and after that date, additional benefits under the
traditional benefit package is terminated.
A member who participates in the self-managed plan under
this Section must continue participation while employed in an
eligible position, and may not participate in the traditional
benefit package administered by the System under this Article
while employed by the State under this Article.
Participation in the self-managed plan under this Section
shall constitute membership in the State Employees' Retirement
System of Illinois.
A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) If a member has rights and credits in the System due to
previous participation in the traditional benefit package but
those credits are insufficient, on the effective date of the
self-managed plan established under this Section, to satisfy
the service requirement for a retirement annuity under this
Article, then the System shall establish for the member an

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opening account balance in the self-managed plan, equal to (i)
the amount of the contribution refund that the member would be
eligible to receive under Section 14-130 if the employee
terminated employment on that date and elected a refund of
contributions, plus (ii) an amount equal to the regular
employer contribution that would be required to fund the actual
regular cost incurred for each year of service credit earned,
provided that the total opening account balance does not exceed
7.6% of that participant's salary for that year, plus interest.
The interest used in this subsection (f) is calculated as the
average annual rate of return that the System has earned over
the past 20 fiscal years and is compounded. The System shall
transfer assets from the traditional benefit package to the
self-managed plan, as a tax-free transfer in accordance with
Internal Revenue Service guidelines, for purposes of funding
the member's opening account balance.
(g) Notwithstanding any other provision of this Article, a
member may not purchase or receive service or service credit
applicable to the traditional benefit package under this
Article for any period during which the employee was a
participant in the self-managed plan established under this
Section.
(h) The self-managed plan shall be funded by contributions
from employees participating in the self-managed plan and State
contributions as provided in this Section.
The annual required contribution for employees

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participating in the self-managed plan shall be an amount equal
to 6% of the employee's salary. This required contribution
shall be made as an employer pick-up under Section 414(h) of
the Internal Revenue Code of 1986 or any successor Section
thereof. Participants may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules adopted by the
System.
The program shall provide for annual State contributions to
be credited to the account of each employee who participates in
the self-managed plan in an amount equal to 6% of the
employee's compensation.
The System shall not be obligated to remit the required
employer contributions to any of the insurance and annuity
companies, mutual fund companies, banks, trust companies,
financial institutions, or other sponsors of any of the funding
vehicles offered under the self-managed plan until it has
received the required employer contributions from the State. In
the event of a deficiency in the amount of State contributions,
the System shall implement any procedures to obtain the
required funding from the General Revenue Fund.
(i) A participant in the self-managed plan becomes vested
in the employer contributions credited to his or her accounts
in the self-managed plan on the earliest to occur of the
following: (1) completion of 5 years of service credit under
this Article; (2) the death of the participating employee while

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employed by an employer under this Article, if the participant
has completed at least 1.5 years of service; or (3) the
participant's election to retire and apply the reciprocal
provisions of Article 20 of this Code.
A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the self-managed
plan while not yet eligible for retirement under this Article
(and Article 20, if applicable) shall forfeit all service
credit and accrued rights in the System; if subsequently
re-employed, the participant shall be considered a new
employee. If a former participant again becomes a participating
employee (or becomes employed by a participating system under
Article 20 of this Code) and continues as such for at least 2
years, all rights, service credits, and previous status as a
participant shall be restored upon repayment of the amount of
the distribution, without interest.
(j) If an employee participating in the self-managed plan
who is vested in employer contributions terminates employment,
the employee shall be entitled to a benefit which is based on
the account values attributable to both employer and employee
contributions and any investment return thereon.
If an employee participating in the self-managed plan who
is not vested in employer contributions terminates employment,
the employee shall be entitled to a benefit based solely on the
account values attributable to the employee's contributions
and any investment return thereon, and the employer

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contributions and any investment return thereon shall be
forfeited. Any employer contributions which are forfeited
shall be held in escrow by the company investing those
contributions and shall be used, as directed by the System, for
future allocations of employer contributions or for the
restoration of amounts previously forfeited by former
participants who again become participating employees.
(k) If a participant so requests, a distribution of funds
from the self-managed plan may be paid in the form of a direct
rollover to another qualified plan, to the extent allowed by
federal law and in accordance with the rules of the System.
(40 ILCS 5/15-103.1)
Sec. 15-103.1. Traditional Benefit Package. "Traditional
benefit package": The defined benefit retirement program
maintained under the System which includes retirement
annuities payable directly from the System as provided in
Sections 15-135 through 15-140 (but disregarding Section
15-136.4), disability retirement annuities payable under
Section 15-153.2, death benefits payable directly from the
System as provided in Sections 15-141 through 15-144, survivors
insurance benefits payable directly from the System as provided
in Sections 15-145 through 15-149, and contribution refunds as
provided in Section 15-154. The traditional benefit package
also includes disability benefits as provided in Sections
15-150 through 15-153.3. The traditional benefit package also

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includes any benefits determined under Section 1-160 with
respect to service performed under this Article.
(Source: P.A. 90-766, eff. 8-14-98.)
(40 ILCS 5/15-103.2)
Sec. 15-103.2. Portable Benefit Package. "Portable benefit
package": The defined benefit retirement program maintained
under the System which includes retirement annuities payable
directly from the System as provided in Sections 15-135 through
15-139 (specifically including Section 15-136.4), disability
retirement annuities payable under Section 15-153.2, death
benefits payable directly from the System as provided in
Sections 15-141 through 15-144, and contribution refunds as
provided in Section 15-154. The portable benefit package also
includes disability benefits as provided in Sections 15-150
through 15-153.3. The portable benefit package does not include
the survivors insurance benefits payable directly from the
System as provided in Sections 15-145 through 15-149. The
traditional benefit package also includes any benefits
determined under Section 1-160 with respect to service
performed under this Article.
(Source: P.A. 90-766, eff. 8-14-98.)
(40 ILCS 5/15-107) (from Ch. 108 1/2, par. 15-107)
Sec. 15-107. Employee.
(a) "Employee" means any member of the educational,

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administrative, secretarial, clerical, mechanical, labor or
other staff of an employer whose employment is permanent and
continuous or who is employed in a position in which services
are expected to be rendered on a continuous basis for at least
4 months or one academic term, whichever is less, who (A)
receives payment for personal services on a warrant issued
pursuant to a payroll voucher certified by an employer and
drawn by the State Comptroller upon the State Treasurer or by
an employer upon trust, federal or other funds, or (B) is on a
leave of absence without pay. Employment which is irregular,
intermittent or temporary shall not be considered continuous
for purposes of this paragraph.
However, a person is not an "employee" if he or she:
(1) is a student enrolled in and regularly attending
classes in a college or university which is an employer,
and is employed on a temporary basis at less than full
time;
(2) is currently receiving a retirement annuity or a
disability retirement annuity under Section 15-153.2 from
this System;
(3) is on a military leave of absence;
(4) is eligible to participate in the Federal Civil
Service Retirement System and is currently making
contributions to that system based upon earnings paid by an
employer;
(5) is on leave of absence without pay for more than 60

SB3932 - 73 - LRB097 22549 JDS 71324 b
days immediately following termination of disability
benefits under this Article;
(6) is hired after June 30, 1979 as a public service
employment program participant under the Federal
Comprehensive Employment and Training Act and receives
earnings in whole or in part from funds provided under that
Act; or
(7) is employed on or after July 1, 1991 to perform
services that are excluded by subdivision (a)(7)(f) or
(a)(19) of Section 210 of the federal Social Security Act
from the definition of employment given in that Section (42
U.S.C. 410).
(b) Any employer may, by filing a written notice with the
board, exclude from the definition of "employee" all persons
employed pursuant to a federally funded contract entered into
after July 1, 1982 with a federal military department in a
program providing training in military courses to federal
military personnel on a military site owned by the United
States Government, if this exclusion is not prohibited by the
federally funded contract or federal laws or rules governing
the administration of the contract.
(c) Any person appointed by the Governor under the Civil
Administrative Code of the State is an employee, if he or she
is a participant in this system on the effective date of the
appointment.
(d) A participant on lay-off status under civil service

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rules is considered an employee for not more than 120 days from
the date of the lay-off.
(e) A participant is considered an employee during (1) the
first 60 days of disability leave, (2) the period, not to
exceed one year, in which his or her eligibility for disability
benefits is being considered by the board or reviewed by the
courts, and (3) the period he or she receives disability
benefits under the provisions of Section 15-152, workers'
compensation or occupational disease benefits, or disability
income under an insurance contract financed wholly or partially
by the employer.
(f) Absences without pay, other than formal leaves of
absence, of less than 30 calendar days, are not considered as
an interruption of a person's status as an employee. If such
absences during any period of 12 months exceed 30 work days,
the employee status of the person is considered as interrupted
as of the 31st work day.
(g) A staff member whose employment contract requires
services during an academic term is to be considered an
employee during the summer and other vacation periods, unless
he or she declines an employment contract for the succeeding
academic term or his or her employment status is otherwise
terminated, and he or she receives no earnings during these
periods.
(h) An individual who was a participating employee employed
in the fire department of the University of Illinois's

SB3932 - 75 - LRB097 22549 JDS 71324 b
Champaign-Urbana campus immediately prior to the elimination
of that fire department and who immediately after the
elimination of that fire department became employed by the fire
department of the City of Urbana or the City of Champaign shall
continue to be considered as an employee for purposes of this
Article for so long as the individual remains employed as a
firefighter by the City of Urbana or the City of Champaign. The
individual shall cease to be considered an employee under this
subsection (h) upon the first termination of the individual's
employment as a firefighter by the City of Urbana or the City
of Champaign.
(i) An individual who is employed on a full-time basis as
an officer or employee of a statewide teacher organization that
serves System participants or an officer of a national teacher
organization that serves System participants may participate
in the System and shall be deemed an employee, provided that
(1) the individual has previously earned creditable service
under this Article, (2) the individual files with the System an
irrevocable election to become a participant before the
effective date of this amendatory Act of the 97th General
Assembly, (3) the individual does not receive credit for that
employment under any other Article of this Code, and (4) the
individual first became a full-time employee of the teacher
organization and becomes a participant before the effective
date of this amendatory Act of the 97th General Assembly. An
employee under this subsection (i) is responsible for paying to

SB3932 - 76 - LRB097 22549 JDS 71324 b
the System both (A) employee contributions based on the actual
compensation received for service with the teacher
organization and (B) employer contributions equal to the normal
costs (as defined in Section 15-155) resulting from that
service; all or any part of these contributions may be paid on
the employee's behalf or picked up for tax purposes (if
authorized under federal law) by the teacher organization.
A person who is an employee as defined in this subsection
(i) may establish service credit for similar employment prior
to becoming an employee under this subsection by paying to the
System for that employment the contributions specified in this
subsection, plus interest at the effective rate from the date
of service to the date of payment. However, credit shall not be
granted under this subsection for any such prior employment for
which the applicant received credit under any other provision
of this Code, or during which the applicant was on a leave of
absence under Section 15-113.2.
(j) A person employed by the State Board of Higher
Education in a position with the Illinois Century Network as of
June 30, 2004 shall be considered to be an employee for so long
as he or she remains continuously employed after that date by
the Department of Central Management Services in a position
with the Illinois Century Network, the Bureau of Communication
and Computer Services, or, if applicable, any successor bureau
and meets the requirements of subsection (a).
(k) Notwithstanding any provision of law to the contrary,

SB3932 - 77 - LRB097 22549 JDS 71324 b
an individual who begins employment with any of the following
employers on or after the effective date of this amendatory Act
of the 97th General Assembly shall not be deemed an employee
and shall not be eligible to participate in the System with
respect to that employment: any association of community
college boards organized under Section 3-55 of the Public
Community College Act, the Association of Illinois
Middle-Grade Schools, the Illinois Association of School
Administrators, the Illinois Association for Supervision and
Curriculum Development, the Illinois Principals Association,
the Illinois Association of School Business Officials, or the
Illinois Special Olympics; provided, however, that those
individuals who are both employed and already participants in
the System on the effective date of this amendatory Act of the
97th General Assembly shall be allowed to continue as
participants in the System for the duration of that employment.
(Source: P.A. 97-651, eff. 1-5-12.)
(40 ILCS 5/15-107.1 new)
Sec. 15-107.1. Tier I employee. "Tier I employee": An
employee under this Article who first became a member or
participant before January 1, 2011 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, or 18 of this Code.

SB3932 - 78 - LRB097 22549 JDS 71324 b
(40 ILCS 5/15-111) (from Ch. 108 1/2, par. 15-111)
Sec. 15-111. Earnings. "Earnings": An amount 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

SB3932 - 79 - LRB097 22549 JDS 71324 b
contributions under Section 15-157 on that 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.
Notwithstanding any other provision of this Code, for
periods of service on and after the effective date of this
amendatory Act of the 97th General Assembly, "earnings" does
not include any annual remuneration for personal services in an
amount that is in excess of the annual contribution and benefit
base established for the previous year by the Commissioner of
Social Security pursuant to Section 230 of the federal Social
Security Act.
(Source: P.A. 91-887, eff. 7-6-00.)
(40 ILCS 5/15-134.5)
Sec. 15-134.5. Retirement program elections.
(a) All participating employees are participants under the
traditional benefit package prior to January 1, 1998.
Effective as of the date that an employer elects, as
described in Section 15-158.2, to offer to its employees the
portable benefit package and the self-managed plan as
alternatives to the traditional benefit package, each of that
employer's eligible employees (as defined in subsection (b))

SB3932 - 80 - LRB097 22549 JDS 71324 b
shall be given the choice to elect which retirement program he
or she wishes to participate in with respect to all periods of
covered employment occurring on and after the effective date of
the employee's election. The retirement program election made
by an eligible employee must be made in writing, in the manner
prescribed by the System, and within the time period described
in subsection (d) or (d-1).
The employee election authorized by this Section is a
one-time, irrevocable election. If an employee terminates
employment after making the election provided under this
subsection (a), then upon his or her subsequent re-employment
with an employer the original election shall automatically
apply to him or her, provided that the employer is then a
participating employer as described in Section 15-158.2.
An eligible employee who fails to make this election shall,
by default, participate in the traditional benefit package.
(b) "Eligible employee" means an employee (as defined in
Section 15-107) who is either a currently eligible employee or
a newly eligible employee. For purposes of this Section, a
"currently eligible employee" is an employee who is employed by
an employer on the effective date on which the employer offers
to its employees the portable benefit package and the
self-managed plan as alternatives to the traditional benefit
package. A "newly eligible employee" is an employee who first
becomes employed by an employer after the effective date on
which the employer offers its employees the portable benefit

SB3932 - 81 - LRB097 22549 JDS 71324 b
package and the self-managed plan as alternatives to the
traditional benefit package. A newly eligible employee
participates in the traditional benefit package until he or she
makes an election to participate in the portable benefit
package or the self-managed plan. If an employee does not elect
to participate in the portable benefit package or the
self-managed plan, he or she shall continue to participate in
the traditional benefit package by default.
(c) An eligible employee who at the time he or she is first
eligible to make the election described in subsection (a) does
not have sufficient age and service to qualify for a retirement
annuity under Section 15-135 may elect to participate in the
traditional benefit package, the portable benefit package, or
the self-managed plan. An eligible employee who has sufficient
age and service to qualify for a retirement annuity under
Section 15-135 at the time he or she is first eligible to make
the election described in subsection (a) may elect to
participate in the traditional benefit package or the portable
benefit package, but may not elect to participate in the
self-managed plan.
(d) A currently eligible employee must make this election
within one year after the effective date of the employer's
adoption of the self-managed plan.
A newly eligible employee must make this election within 6
months after the date on which the System receives the report
of status certification from the employer. If an employee

SB3932 - 82 - LRB097 22549 JDS 71324 b
elects to participate in the self-managed plan, no employer
contributions shall be remitted to the self-managed plan when
the employee's account balance transfer is made. Employer
contributions to the self-managed plan shall commence as of the
first pay period that begins after the System receives the
employee's election.
(d-1) A newly eligible employee who, prior to the effective
date of this amendatory Act of the 91st General Assembly, fails
to make the election within the period provided under
subsection (d) and participates by default in the traditional
benefit package may make a late election to participate in the
portable benefit package or the self-managed plan instead of
the traditional benefit package at any time within 6 months
after the effective date of this amendatory Act of the 91st
General Assembly.
(e) If a currently eligible employee elects the portable
benefit package, that election shall not become effective until
the one-year anniversary of the date on which the election is
filed with the System, provided the employee remains
continuously employed by the employer throughout the one-year
waiting period, and any benefits payable to or on account of
the employee before such one-year waiting period has ended
shall not be determined under the provisions applicable to the
portable benefit package but shall instead be determined in
accordance with the traditional benefit package. If a currently
eligible employee who has elected the portable benefit package

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terminates employment covered by the System before the one-year
waiting period has ended, then no benefits shall be determined
under the portable benefit package provisions while he or she
is inactive in the System and upon re-employment with an
employer covered by the System he or she shall begin a new
one-year waiting period before the provisions of the portable
benefit package become effective.
(f) An eligible employee shall be provided with written
information prepared or prescribed by the System which
describes the employee's retirement program choices. The
eligible employee shall be offered an opportunity to receive
counseling from the System prior to making his or her election.
This counseling may consist of videotaped materials, group
presentations, individual consultation with an employee or
authorized representative of the System in person or by
telephone or other electronic means, or any combination of
these methods.
(g) This Section applies only prior to the effective date
of this amendatory Act of the 97th General Assembly. On and
after that date, all participants in the System, other than
annuitants, shall participate in the self-managed plan.
(Source: P.A. 90-766, eff. 8-14-98; 91-887, eff. 7-6-00.)
(40 ILCS 5/15-134.6 new)
Sec. 15-134.6. Suspension of the accrual of benefits under
the traditional benefit package and portable benefit package.

SB3932 - 84 - LRB097 22549 JDS 71324 b
(a) Notwithstanding any other provision of this Code, the
retirement annuity of an employee who satisfies, on the
effective date of this Section, the service requirement for a
retirement annuity under this Article and who retires on or
after that date shall be calculated based on the service credit
accrued under this Article prior to that date and the
employee's annual rate of earnings on that date.
However, notwithstanding any other provision of this Code,
an employee who does not, on the effective date of this
Section, satisfy the service requirement for a retirement
annuity under this Article shall not be entitled to a
retirement annuity under this Article, but shall instead be
eligible to have an initial account balance established in the
self-managed plan in accordance with Section 15-158.2.
(b) Notwithstanding any other provision of this Code, if an
employee or any other person is eligible for a benefit in the
traditional benefit package or portable benefit package, other
than a retirement annuity, on the effective date of this
Section, then he or she shall continue to be eligible for that
benefit while he or she continues to meet all otherwise
applicable eligibility requirements.
However, notwithstanding any other provision of this Code,
if an employee or other person is ineligible for a benefit in
the traditional benefit package or portable benefit package,
other than a retirement annuity, on the effective date of this
Section, then he or she shall remain ineligible for that

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benefit on and after the effective date of this Section.
(40 ILCS 5/15-135) (from Ch. 108 1/2, par. 15-135)
Sec. 15-135. Retirement annuities - Conditions.
(a) 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.
Notwithstanding any other provision of this Code,
beginning on the effective date of this amendatory Act of the

SB3932 - 86 - LRB097 22549 JDS 71324 b
97th General Assembly, a Tier I employee shall not, regardless
of the amount of accrued service credit, be entitled to a
retirement annuity until he or she has attained age 62.
(b) The annuity payment period shall begin on the date
specified by the participant submitting a written application,
which date 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 age 70 1/2, the annuity payment period
shall begin on that date regardless of whether an application
has been filed.
(c) An annuity is not payable if the amount provided under
Section 15-136 is less than $10 per month.
(Source: P.A. 92-749, eff. 8-2-02.)
(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

SB3932 - 87 - LRB097 22549 JDS 71324 b
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 prescribed 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
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

SB3932 - 88 - LRB097 22549 JDS 71324 b
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
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

SB3932 - 89 - LRB097 22549 JDS 71324 b
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
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.
For purposes of this Rule 4, a participant's service as a
firefighter shall also include the following:

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(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.
Rule 5: The retirement annuity of a participant who elected
early retirement under the provisions of Section 15-136.2 and
who, on or before February 16, 1995, brought administrative
proceedings pursuant to the administrative rules adopted by the
System to challenge the calculation of his or her retirement
annuity shall be the sum of the following, determined from
amounts credited to the participant in accordance with the
actuarial tables and the prescribed 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; and
(ii) an annuity from employer contributions of an

SB3932 - 91 - LRB097 22549 JDS 71324 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) an annuity which can be provided on an
actuarially equivalent basis from the employee
contribution for early retirement under Section 15-136.2,
and an annuity from employer contributions of an amount
equal to that which can be provided on an actuarially
equivalent basis from the employee contribution for early
retirement under Section 15-136.2.
In no event shall a retirement annuity under this Rule 5 be
lower than the amount obtained by adding (1) the monthly amount
obtained by dividing the combined employee and employer
contributions made under Section 15-136.2 by the System's
annuity factor for the age of the participant at the beginning
of the annuity payment period and (2) the amount equal to the
participant's annuity if calculated under Rule 1, reduced under
Section 15-136(b) as if no contributions had been made under
Section 15-136.2.
With respect to a participant who is qualified for a
retirement annuity under this Rule 5 whose retirement annuity
began before the effective date of this amendatory Act of the
91st General Assembly, and for whom an employee contribution

SB3932 - 92 - LRB097 22549 JDS 71324 b
was made under Section 15-136.2, the System shall recalculate
the retirement annuity under this Rule 5 and shall pay any
additional amounts due in the manner provided in Section
15-186.1 for benefits mistakenly set too low.
The amount of a retirement annuity calculated under this
Rule 5 shall be computed solely on the basis of those
contributions specifically set forth in this Rule 5. Except as
provided in clause (iii) of this Rule 5, neither an employee
nor 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 5.
The General Assembly has adopted the changes set forth in
Section 25 of this amendatory Act of the 91st General Assembly
in recognition that the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. might be deemed to give some right to the
plaintiff in that case. The changes made by Section 25 of this
amendatory Act of the 91st General Assembly are a legislative
implementation of the decision of the Appellate Court for the
Fourth District in Mattis v. State Universities Retirement
System et al. with respect to that plaintiff.
The changes made by Section 25 of this amendatory Act of
the 91st General Assembly apply without regard to whether the
person is in service as an employee on or after its effective
date.

SB3932 - 93 - LRB097 22549 JDS 71324 b
(b) 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.
(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
and as such benefit limits shall be adjusted by the
Commissioner of Internal Revenue, and (2) 80% of final rate of
earnings.
(d) An annuitant whose status as an employee terminates
after August 14, 1969 shall receive automatic increases in his

SB3932 - 94 - LRB097 22549 JDS 71324 b
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, Rule 4, or Rule 5, 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, Rule 4, or Rule 5 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 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,

SB3932 - 95 - LRB097 22549 JDS 71324 b
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-1) Notwithstanding any other provision of this Code,
except subsection (d-2) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the monthly retirement annuity of an annuitant shall
first be subject to annual increases on the January 1 occurring
on or next after either the attainment of age 67 or the January
1 occurring on or next after the fifth anniversary of the
annuity start date, whichever occurs earlier. If on the
effective date of this amendatory Act of the 97th General
Assembly an annuitant has already received an annual increase
under this Section but is not eligible to receive an annual
increase under this subsection, then the annual increases
already received shall continue in force, but no additional
annual increase shall be granted until the annuitant meets the
new eligibility requirements.
(d-2) Notwithstanding subsection (d-1), no annual increase
shall be paid under this Section in a calendar year if, on
January 1 of the preceding calendar year, the total assets of
the System are less than 85% of the total actuarial liabilities
of the System, as annually certified by the System.
(d-3) Notwithstanding any other provision of this Code,
except subsection (d-2) of this Section, beginning on the

SB3932 - 96 - LRB097 22549 JDS 71324 b
effective date of this amendatory Act of the 97th General
Assembly, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
this amendatory Act of the 97th General Assembly shall be 3% or
one-half of the annual unadjusted percentage increase, if any,
in the Consumer Price Index-U for the 12 months ending with the
preceding September, whichever is less, of the originally
granted retirement annuity. 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.
(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
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

SB3932 - 97 - LRB097 22549 JDS 71324 b
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 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.

SB3932 - 98 - LRB097 22549 JDS 71324 b
(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.
(Source: P.A. 93-347, eff. 7-24-03; 94-4, eff. 6-1-05.)
(40 ILCS 5/15-158.2)
Sec. 15-158.2. Self-managed plan.
(a) Purpose. The General Assembly finds that it is
important for colleges and universities to be able to attract
and retain the most qualified employees and that in order to
attract and retain these employees, colleges and universities
should have the flexibility to provide a defined contribution
plan as an alternative for eligible employees who elect not to
participate in a defined benefit retirement program provided
under this Article. Accordingly, the State Universities
Retirement System is hereby required authorized to establish

SB3932 - 99 - LRB097 22549 JDS 71324 b
and administer a self-managed plan, which shall offer
participating employees the opportunity to accumulate assets
for retirement through a combination of employee and employer
contributions that may be invested in mutual funds, collective
investment funds, or other investment products and used to
purchase annuity contracts, either fixed or variable or a
combination thereof. The plan must be qualified under the
Internal Revenue Code of 1986.
(b) Adoption by employers. Before the effective date of
this amendatory Act of the 97th General Assembly, each Each
employer subject to this Article may elect to adopt the
self-managed plan established under this Section; this
election is irrevocable. An employer's election to adopt the
self-managed plan makes available to the eligible employees of
that employer the elections described in Section 15-134.5. On
and after the effective date of this amendatory Act of the 97th
General Assembly, each employer subject to this Article shall
adopt the self-managed plan established under this Section, and
each participant shall participate in that plan with respect to
service on and after that date.
The State Universities Retirement System shall be the plan
sponsor for the self-managed plan and shall prepare a plan
document and prescribe such rules and procedures as are
considered necessary or desirable for the administration of the
self-managed plan. Consistent with its fiduciary duty to the
participants and beneficiaries of the self-managed plan, the

SB3932 - 100 - LRB097 22549 JDS 71324 b
Board of Trustees of the System may delegate aspects of plan
administration as it sees fit to companies authorized to do
business in this State, to the employers, or to a combination
of both.
(c) Selection of service providers and funding vehicles.
The System, in consultation with the employers, shall solicit
proposals to provide administrative services and funding
vehicles for the self-managed plan from insurance and annuity
companies and mutual fund companies, banks, trust companies, or
other financial institutions authorized to do business in this
State. In reviewing the proposals received and approving and
contracting with no fewer than 2 and no more than 7 companies,
the Board of Trustees of the System shall consider, among other
things, the following criteria:
(1) the nature and extent of the benefits that would be
provided to the participants;
(2) the reasonableness of the benefits in relation to
the premium charged;
(3) the suitability of the benefits to the needs and
interests of the participating employees and the employer;
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company; and
(5) the efficacy of the contract in the recruitment and
retention of employees.
The System, in consultation with the employers, shall

SB3932 - 101 - LRB097 22549 JDS 71324 b
periodically review each approved company. A company may
continue to provide administrative services and funding
vehicles for the self-managed plan only so long as it continues
to be an approved company under contract with the Board.
(d) Employee Direction. Employees who are participating in
the program must be allowed to direct the transfer of their
account balances among the various investment options offered,
subject to applicable contractual provisions. The participant
shall not be deemed a fiduciary by reason of providing such
investment direction. A person who is a fiduciary shall not be
liable for any loss resulting from such investment direction
and shall not be deemed to have breached any fiduciary duty by
acting in accordance with that direction. Neither the System
nor the employer guarantees any of the investments in the
employee's account balances.
(e) Participation. Prior to the effective date of this
amendatory Act of the 97th General Assembly, an An employee
eligible to participate in the self-managed plan must make a
written election in accordance with the provisions of Section
15-134.5 and the procedures established by the System.
Participation in the self-managed plan by an electing employee
shall begin on the first day of the first pay period following
the later of the date the employee's election is filed with the
System or the effective date as of which the employee's
employer begins to offer participation in the self-managed
plan. Notwithstanding any other provision of this Code,

SB3932 - 102 - LRB097 22549 JDS 71324 b
beginning on the effective date of this amendatory Act of the
97th General Assembly, each participant in the System shall
participate in the self-managed plan with respect to service on
and after that date, and a participant's ability to accrue, on
and after that date, additional benefits under the traditional
benefit package or the portable benefit package is terminated.
Employers may not make the self-managed plan available earlier
than January 1, 1998. An employee's participation in any other
retirement program administered by the System under this
Article shall terminate on the date that participation in the
self-managed plan begins.
An employee who has elected to participate in the
self-managed plan under this Section must continue
participation while employed in an eligible position, and may
not participate in any other retirement program administered by
the System under this Article while employed by that employer
or any other employer that has adopted the self-managed plan,
unless the self-managed plan is terminated in accordance with
subsection (i).
Participation in the self-managed plan under this Section
shall constitute membership in the State Universities
Retirement System.
A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) Establishment of Initial Account Balance. Prior to the
effective date of this amendatory Act of the 97th General

SB3932 - 103 - LRB097 22549 JDS 71324 b
Assembly, if If at the time an employee elects to participate
in the self-managed plan he or she has rights and credits in
the System due to previous participation in the traditional
benefit package, the System shall establish for the employee an
opening account balance in the self-managed plan, equal to the
amount of contribution refund that the employee would be
eligible to receive under Section 15-154 if the employee
terminated employment on that date and elected a refund of
contributions, except that this hypothetical refund shall
include interest at the effective rate for the respective
years. The System shall transfer assets from the defined
benefit retirement program to the self-managed plan, as a tax
free transfer in accordance with Internal Revenue Service
guidelines, for purposes of funding the employee's opening
account balance.
Beginning on the effective date of this amendatory Act of
the 97th General Assembly, if a participant has rights and
credits in the System due to previous participation in the
traditional benefit package, portable benefit package, or both
but those credits are insufficient, on the effective date of
this amendatory Act of the 97th General Assembly, to satisfy
the service requirement for a retirement annuity under this
Article, then the System shall establish for the member an
opening account balance in the self-managed plan, equal to (i)
the amount of the contribution refund that the member would be
eligible to receive under Section 15-154 if the employee

SB3932 - 104 - LRB097 22549 JDS 71324 b
terminated employment on that date and elected a refund of
contributions, plus (ii) an amount equal to the regular
employer contribution that would be required to fund the actual
regular cost incurred for each year of service credit earned,
provided that the total opening account balance does not exceed
7.6% of that participant's salary for that year, plus interest.
The interest used in this subsection (f) is calculated as the
average annual rate of return that the System has earned over
the past 20 fiscal years and is compounded. The System shall
transfer assets from the traditional benefit package and the
portable benefit package to the self-managed plan, as a
tax-free transfer in accordance with Internal Revenue Service
guidelines, for purposes of funding the member's opening
account balance.
(g) No Duplication of Service Credit. Notwithstanding any
other provision of this Article, an employee may not purchase
or receive service or service credit applicable to any other
retirement program administered by the System under this
Article for any period during which the employee was a
participant in the self-managed plan established under this
Section.
(h) Contributions prior to the effective date of this
amendatory Act of the 97th General Assembly. The self-managed
plan shall be funded by contributions from employees
participating in the self-managed plan and employer
contributions as provided in this Section.

SB3932 - 105 - LRB097 22549 JDS 71324 b
The contribution rate for employees participating in the
self-managed plan under this Section shall be equal to the
employee contribution rate for other participants in the
System, as provided in Section 15-157. This required
contribution shall be made as an "employer pick-up" under
Section 414(h) of the Internal Revenue Code of 1986 or any
successor Section thereof. Any employee participating in the
System's traditional benefit package prior to his or her
election to participate in the self-managed plan shall continue
to have the employer pick up the contributions required under
Section 15-157. However, the amounts picked up after the
election of the self-managed plan shall be remitted to and
treated as assets of the self-managed plan. In no event shall
an employee have an option of receiving these amounts in cash.
Employees may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules prescribed by
the System.
The program shall provide for employer contributions to be
credited to each self-managed plan participant at a rate of
7.6% of the participating employee's salary, less the amount
used by the System to provide disability benefits for the
employee. The amounts so credited shall be paid into the
participant's self-managed plan accounts in a manner to be
prescribed by the System.
An amount of employer contribution, not exceeding 1% of the

SB3932 - 106 - LRB097 22549 JDS 71324 b
participating employee's salary, shall be used for the purpose
of providing the disability benefits of the System to the
employee. Prior to the beginning of each plan year under the
self-managed plan, the Board of Trustees shall determine, as a
percentage of salary, the amount of employer contributions to
be allocated during that plan year for providing disability
benefits for employees in the self-managed plan.
The State of Illinois shall make contributions by
appropriations to the System of the employer contributions
required for employees who participate in the self-managed plan
under this Section. The amount required shall be certified by
the Board of Trustees of the System and paid by the State in
accordance with Section 15-165. The System shall not be
obligated to remit the required employer contributions to any
of the insurance and annuity companies, mutual fund companies,
banks, trust companies, financial institutions, or other
sponsors of any of the funding vehicles offered under the
self-managed plan until it has received the required employer
contributions from the State. In the event of a deficiency in
the amount of State contributions, the System shall implement
those procedures described in subsection (c) of Section 15-165
to obtain the required funding from the General Revenue Fund.
The provisions of this subsection (h) apply before the
effective date of this amendatory Act of the 97th General
Assembly.
(h-5) Contributions on and after the effective date of this

SB3932 - 107 - LRB097 22549 JDS 71324 b
amendatory Act of the 97th General Assembly.
The self-managed plan shall be funded by contributions from
employees participating in the self-managed plan and State
contributions as provided in this Section.
The annual required contribution for employees
participating in the self-managed plan shall be an amount equal
to 6% of the employee's salary. This required contribution
shall be made as an employer pick-up under Section 414(h) of
the Internal Revenue Code of 1986 or any successor Section
thereof. Participants may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules adopted by the
System.
The program shall provide for annual State contributions to
be credited to the account of each employee who participates in
the self-managed plan in an amount equal to 6% of the
employee's compensation.
The System shall not be obligated to remit the required
employer contributions to any of the insurance and annuity
companies, mutual fund companies, banks, trust companies,
financial institutions, or other sponsors of any of the funding
vehicles offered under the self-managed plan until it has
received the required employer contributions from the State. In
the event of a deficiency in the amount of State contributions,
the System shall implement any procedures to obtain the
required funding from the General Revenue Fund.

SB3932 - 108 - LRB097 22549 JDS 71324 b
The provisions of this subsection (h-5) apply on and after
the effective date of this amendatory Act of the 97th General
Assembly.
(i) Termination. (Blank). The self-managed plan authorized
under this Section may be terminated by the System, subject to
the terms of any relevant contracts, and the System shall have
no obligation to reestablish the self-managed plan under this
Section. This Section does not create a right to continued
participation in any self-managed plan set up by the System
under this Section. If the self-managed plan is terminated, the
participants shall have the right to participate in one of the
other retirement programs offered by the System and receive
service credit in such other retirement program for any years
of employment following the termination.
(j) Vesting; Withdrawal; Return to Service. A participant
in the self-managed plan becomes vested in the employer
contributions credited to his or her accounts in the
self-managed plan on the earliest to occur of the following:
(1) completion of 5 years of service with an employer described
in Section 15-106; (2) the death of the participating employee
while employed by an employer described in Section 15-106, if
the participant has completed at least 1 1/2 years of service;
or (3) the participant's election to retire and apply the
reciprocal provisions of Article 20 of this Code.
A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the self-managed

SB3932 - 109 - LRB097 22549 JDS 71324 b
plan while not yet eligible for retirement under this Article
(and Article 20, if applicable) shall forfeit all service
credit and accrued rights in the System; if subsequently
re-employed, the participant shall be considered a new
employee. If a former participant again becomes a participating
employee (or becomes employed by a participating system under
Article 20 of this Code) and continues as such for at least 2
years, all such rights, service credits, and previous status as
a participant shall be restored upon repayment of the amount of
the distribution, without interest.
(k) Benefit amounts. If an employee who is vested in
employer contributions terminates employment, the employee
shall be entitled to a benefit which is based on the account
values attributable to both employer and employee
contributions and any investment return thereon.
If an employee who is not vested in employer contributions
terminates employment, the employee shall be entitled to a
benefit based solely on the account values attributable to the
employee's contributions and any investment return thereon,
and the employer contributions and any investment return
thereon shall be forfeited. Any employer contributions which
are forfeited shall be held in escrow by the company investing
those contributions and shall be used as directed by the System
for future allocations of employer contributions or for the
restoration of amounts previously forfeited by former
participants who again become participating employees.

SB3932 - 110 - LRB097 22549 JDS 71324 b
(l) If a participant so requests, a distribution of funds
from the self-managed plan may be paid in the form of a direct
rollover to another qualified plan, to the extent allowed by
federal law and in accordance with the rules of the System.
(Source: P.A. 93-347, eff. 7-24-03.)
(40 ILCS 5/16-104.1 new)
Sec. 16-104.1. Traditional benefit package. "Traditional
benefit package" means the defined benefit retirement program
maintained by the System, which includes retirement annuities
payable directly from the System, as provided in Sections
16-132 through 16-136.4; disability benefits payable under
Sections 16-149 through 16-149.5; survivor's benefits payable
directly from the System, as provided in Sections 16-140
through 16-143.1; and contribution refunds, as provided in
Sections 16-138, 16-143.2, and 16-151. The traditional benefit
package also includes any benefits determined under Section
1-160 with respect to service performed under this Article.
(40 ILCS 5/16-104.2 new)
Sec. 16-104.2. Self-managed plan. "Self-managed plan"
means the defined contribution retirement program maintained
by the System, as described in Section 16-158.2. The
self-managed plan also includes disability benefits, as
provided in Sections 16-149 through 16-149.5 (but disregarding
disability retirement annuities under Section 16-149.2). The

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self-managed plan does not include retirement annuities or
survivor's benefits payable directly from the System as
provided in Sections 16-132 through 16-136.4, Sections 16-140
through 16-143.1, and Section 16-149.2, or refunds determined
under Sections 16-138, 16-143.2, and 16-151.
(40 ILCS 5/16-106) (from Ch. 108 1/2, par. 16-106)
Sec. 16-106. Teacher. "Teacher": The following
individuals, provided that, for employment prior to July 1,
1990, they are employed on a full-time basis, or if not
full-time, on a permanent and continuous basis in a position in
which services are expected to be rendered for at least one
school term:
(1) Any educational, administrative, professional or
other staff employed in the public common schools included
within this system in a position requiring certification
under the law governing the certification of teachers;
(2) Any educational, administrative, professional or
other staff employed in any facility of the Department of
Children and Family Services or the Department of Human
Services, in a position requiring certification under the
law governing the certification of teachers, and any person
who (i) works in such a position for the Department of
Corrections, (ii) was a member of this System on May 31,
1987, and (iii) did not elect to become a member of the
State Employees' Retirement System pursuant to Section

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14-108.2 of this Code; except that "teacher" does not
include any person who (A) becomes a security employee of
the Department of Human Services, as defined in Section
14-110, after June 28, 2001 (the effective date of Public
Act 92-14), or (B) becomes a member of the State Employees'
Retirement System pursuant to Section 14-108.2c of this
Code;
(3) Any regional superintendent of schools, assistant
regional superintendent of schools, State Superintendent
of Education; any person employed by the State Board of
Education as an executive; any executive of the boards
engaged in the service of public common school education in
school districts covered under this system of which the
State Superintendent of Education is an ex-officio member;
(4) Any employee of a school board association
operating in compliance with Article 23 of the School Code
who is certificated under the law governing the
certification of teachers, provided that he or she becomes
such an employee before the effective date of this
amendatory Act of the 97th General Assembly;
(5) Any person employed by the retirement system who:
(i) was an employee of and a participant in the
system on August 17, 2001 (the effective date of Public
Act 92-416), or
(ii) becomes an employee of the system on or after
August 17, 2001;

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(6) Any educational, administrative, professional or
other staff employed by and under the supervision and
control of a regional superintendent of schools, provided
such employment position requires the person to be
certificated under the law governing the certification of
teachers and is in an educational program serving 2 or more
districts in accordance with a joint agreement authorized
by the School Code or by federal legislation;
(7) Any educational, administrative, professional or
other staff employed in an educational program serving 2 or
more school districts in accordance with a joint agreement
authorized by the School Code or by federal legislation and
in a position requiring certification under the laws
governing the certification of teachers;
(8) Any officer or employee of a statewide teacher
organization or officer of a national teacher organization
who is certified under the law governing certification of
teachers, provided: (i) the individual had previously
established creditable service under this Article, (ii)
the individual files with the system an irrevocable
election to become a member before the effective date of
this amendatory Act of the 97th General Assembly, (iii) the
individual does not receive credit for such service under
any other Article of this Code, and (iv) the individual
first became an officer or employee of the teacher
organization and becomes a member before the effective date

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of this amendatory Act of the 97th General Assembly;
(9) Any educational, administrative, professional, or
other staff employed in a charter school operating in
compliance with the Charter Schools Law who is certificated
under the law governing the certification of teachers; .
(10) Any person employed, on the effective date of this
amendatory Act of the 94th General Assembly, by the
Macon-Piatt Regional Office of Education in a
birth-through-age-three pilot program receiving funds
under Section 2-389 of the School Code who is required by
the Macon-Piatt Regional Office of Education to hold a
teaching certificate, provided that the Macon-Piatt
Regional Office of Education makes an election, within 6
months after the effective date of this amendatory Act of
the 94th General Assembly, to have the person participate
in the system. Any service established prior to the
effective date of this amendatory Act of the 94th General
Assembly for service as an employee of the Macon-Piatt
Regional Office of Education in a birth-through-age-three
pilot program receiving funds under Section 2-389 of the
School Code shall be considered service as a teacher if
employee and employer contributions have been received by
the system and the system has not refunded those
contributions.
An annuitant receiving a retirement annuity under this
Article or under Article 17 of this Code who is employed by a

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board of education or other employer as permitted under Section
16-118 or 16-150.1 is not a "teacher" for purposes of this
Article. A person who has received a single-sum retirement
benefit under Section 16-136.4 of this Article is not a
"teacher" for purposes of this Article.
(Source: P.A. 97-651, eff. 1-5-12; revised 8-3-12.)
(40 ILCS 5/16-106.4 new)
Sec. 16-106.4. Tier I employee. "Tier I employee": A
teacher under this Article who first became a member or
participant before January 1, 2011 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, or 18 of this Code.
(40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)
Sec. 16-121. Salary. "Salary": The actual compensation
received by a teacher during any school year and recognized by
the system in accordance with rules of the board. For purposes
of this Section, "school year" includes the regular school term
plus any additional period for which a teacher is compensated
and such compensation is recognized by the rules of the board.
Notwithstanding any other provision of this Code, for
periods of service on and after the effective date of this
amendatory Act of the 97th General Assembly, "salary" does not
include any annual remuneration for personal services in an

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amount that is in excess of the annual contribution and benefit
base established for the previous year by the Commissioner of
Social Security pursuant to Section 230 of the federal Social
Security Act.
(Source: P.A. 84-1028.)
(40 ILCS 5/16-131.7 new)
Sec. 16-131.7. Suspension of the accrual of benefits under
the traditional benefit package.
(a) Notwithstanding any other provision of this Code, the
retirement annuity of a teacher who satisfies, on the effective
date of the self-managed plan established under Section
16-158.2, the service requirement for a retirement annuity
under this Article and who retires on or after the effective
date of this Section shall be calculated based on service
credit accrued under this Article prior to the effective date
of this Section and the teacher's annual salary on the
effective date of this Section.
However, notwithstanding any other provision of this Code,
a teacher who does not, on the effective date of the
self-managed plan established under Section 16-158.2, satisfy
the service requirement for a retirement annuity under this
Article shall not be entitled to a retirement annuity under
this Article, but shall instead be eligible to have an initial
account balance established in the self-managed plan in
accordance with Section 16-158.2.

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(b) Notwithstanding any other provision of this Code, if a
teacher or any other person is eligible for a benefit in the
traditional benefit package, other than a retirement annuity,
on the effective date of the self-managed plan established
under Section 16-158.2, then he or she shall continue to be
eligible for that benefit while he or she continues to meet all
otherwise applicable eligibility requirements.
However, notwithstanding any other provision of this Code,
if a teacher or other person is ineligible for such a benefit
in the traditional benefit package, other than a retirement
annuity, on the effective date of the self-managed plan
established under Section 16-158.2, then he or she shall remain
ineligible for that benefit on and after the effective date of
this Section.
(40 ILCS 5/16-132) (from Ch. 108 1/2, par. 16-132)
Sec. 16-132. Retirement annuity eligibility. A member who
has at least 20 years of creditable service is entitled to a
retirement annuity upon or after attainment of age 55. A member
who has at least 10 but less than 20 years of creditable
service is entitled to a retirement annuity upon or after
attainment of age 60. A member who has at least 5 but less than
10 years of creditable service is entitled to a retirement
annuity upon or after attainment of age 62. A member who (i)
has earned during the period immediately preceding the last day
of service at least one year of contributing creditable service

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as an employee of a department as defined in Section 14-103.04,
(ii) has earned at least 5 years of contributing creditable
service as an employee of a department as defined in Section
14-103.04, and (iii) retires on or after January 1, 2001 is
entitled to a retirement annuity upon or after attainment of an
age which, when added to the number of years of his or her
total creditable service, equals at least 85. Portions of years
shall be counted as decimal equivalents.
A member who is eligible to receive a retirement annuity of
at least 74.6% of final average salary and will attain age 55
on or before December 31 during the year which commences on
July 1 shall be deemed to attain age 55 on the preceding June
1.
A member meeting the above eligibility conditions is
entitled to a retirement annuity upon written application to
the board setting forth the date the member wishes the
retirement annuity to commence. However, the effective date of
the retirement annuity shall be no earlier than the day
following the last day of creditable service, regardless of the
date of official termination of employment.
To be eligible for a retirement annuity, a member shall not
be employed as a teacher in the schools included under this
System or under Article 17, except (i) as provided in Section
16-118 or 16-150.1, (ii) if the member is disabled (in which
event, eligibility for salary must cease), or (iii) if the
System is required by federal law to commence payment due to

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the member's age; the changes to this sentence made by this
amendatory Act of the 93rd General Assembly apply without
regard to whether the member terminated employment before or
after its effective date.
Notwithstanding any other provision of this Code,
beginning on the effective date of this amendatory Act of the
97th General Assembly, a Tier I employee shall not, regardless
of the amount of accrued service credit, be entitled to a
retirement annuity until he or she has attained age 62.
(Source: P.A. 93-320, eff. 7-23-03.)
(40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)
Sec. 16-133.1. Automatic annual increase in annuity.
(a) Each member with creditable service and retiring on or
after August 26, 1969 is entitled to the automatic annual
increases in annuity provided under this Section while
receiving a retirement annuity or disability retirement
annuity from the system.
An annuitant shall first be entitled to an initial increase
under this Section on the January 1 next following the first
anniversary of retirement, or January 1 of the year next
following attainment of age 61, whichever is later. At such
time, the system shall pay an initial increase determined as
follows:
(1) 1.5% of the originally granted retirement annuity
or disability retirement annuity multiplied by the number

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of years elapsed, if any, from the date of retirement until
January 1, 1972, plus
(2) 2% of the originally granted annuity multiplied by
the number of years elapsed, if any, from the date of
retirement or January 1, 1972, whichever is later, until
January 1, 1978, plus
(3) 3% of the originally granted annuity multiplied by
the number of years elapsed from the date of retirement or
January 1, 1978, whichever is later, until the effective
date of the initial increase.
However, the initial annual increase calculated under this
Section for the recipient of a disability retirement annuity
granted under Section 16-149.2 shall be reduced by an amount
equal to the total of all increases in that annuity received
under Section 16-149.5 (but not exceeding 100% of the amount of
the initial increase otherwise provided under this Section).
Following the initial increase, automatic annual increases
in annuity shall be payable on each January 1 thereafter during
the lifetime of the annuitant, determined as a percentage of
the originally granted retirement annuity or disability
retirement annuity for increases granted prior to January 1,
1990, and calculated as a percentage of the total amount of
annuity, including previous increases under this Section, for
increases granted on or after January 1, 1990, as follows: 1.5%
for periods prior to January 1, 1972, 2% for periods after
December 31, 1971 and prior to January 1, 1978, and 3% for

SB3932 - 121 - LRB097 22549 JDS 71324 b
periods after December 31, 1977.
(b) The automatic annual increases in annuity provided
under this Section shall not be applicable unless a member has
made contributions toward such increases for a period
equivalent to one full year of creditable service. If a member
contributes for service performed after August 26, 1969 but the
member becomes an annuitant before such contributions amount to
one full year's contributions based on the salary at the date
of retirement, he or she may pay the necessary balance of the
contributions to the system and be eligible for the automatic
annual increases in annuity provided under this Section.
(c) Each member shall make contributions toward the cost of
the automatic annual increases in annuity as provided under
Section 16-152.
(d) An annuitant receiving a retirement annuity or
disability retirement annuity on July 1, 1969, who subsequently
re-enters service as a teacher is eligible for the automatic
annual increases in annuity provided under this Section if he
or she renders at least one year of creditable service
following the latest re-entry.
(e) In addition to the automatic annual increases in
annuity provided under this Section, an annuitant who meets the
service requirements of this Section and whose retirement
annuity or disability retirement annuity began on or before
January 1, 1971 shall receive, on January 1, 1981, an increase
in the annuity then being paid of one dollar per month for each

SB3932 - 122 - LRB097 22549 JDS 71324 b
year of creditable service. On January 1, 1982, an annuitant
whose retirement annuity or disability retirement annuity
began on or before January 1, 1977 shall receive an increase in
the annuity then being paid of one dollar per month for each
year of creditable service.
On January 1, 1987, any annuitant whose retirement annuity
began on or before January 1, 1977, shall receive an increase
in the monthly retirement annuity equal to 8¢ per year of
creditable service times the number of years that have elapsed
since the annuity began.
(f) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the monthly retirement annuity of an annuitant shall
first be subject to annual increases on the January 1 occurring
on or next after either the attainment of age 67 or the January
1 occurring on or next after the fifth anniversary of the
annuity start date, whichever occurs earlier. If on the
effective date of this amendatory Act of the 97th General
Assembly an annuitant has already received an annual increase
under this Section but is not eligible to receive an annual
increase under this subsection, then the annual increases
already received shall continue in force, but no additional
annual increase shall be granted until the annuitant meets the
new eligibility requirements.
(f-5) Notwithstanding subsection (f), no annual increase

SB3932 - 123 - LRB097 22549 JDS 71324 b
shall be paid under this Section in a calendar year if, on
January 1 of the preceding calendar year, the total assets of
the System are less than 85% of the total actuarial liabilities
of the System, as annually certified by the System.
(g) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
this amendatory Act of the 97th General Assembly shall be 3% or
one-half of the annual unadjusted percentage increase, if any,
in the Consumer Price Index-U for the 12 months ending with the
preceding September, whichever is less, of the originally
granted retirement annuity. 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.
(Source: P.A. 91-927, eff. 12-14-00.)
(40 ILCS 5/16-152.1) (from Ch. 108 1/2, par. 16-152.1)
Sec. 16-152.1. Pickup of contributions.
(a) Each employer may pick up the member contributions
required under Section 16-152 for all salary earned after
December 31, 1981 and before the effective date of this

SB3932 - 124 - LRB097 22549 JDS 71324 b
amendatory Act of the 97th General Assembly. If an employer
decides not to pick up the member contributions, the amount
that would have been picked up shall continue to be deducted
from salary. If contributions are picked up, they shall be
treated as employer contributions in determining tax treatment
under the United States Internal Revenue Code. The employer
shall pay these member contributions from the same source of
funds which is used in paying salary to the member. The
employer may pick up these contributions by a reduction in the
cash salary of the member or by an offset against a future
salary increase or by a combination of a reduction in salary
and offset against a future salary increase. If member
contributions are picked up, they shall be treated for all
purposes of this Article 16 in the same manner as member
contributions made prior to the date the pick up began.
(b) The State Board of Education shall pick up the
contributions of regional superintendents required under
Section 16-152 for all salary earned for the 1982 calendar year
and prior to the effective date of this amendatory Act of the
97th General Assembly thereafter.
(c) Effective July 1, 1983 and until the effective date of
this amendatory Act of the 97th General Assembly, each employer
shall pick up the member contributions required under Section
16-152 for all salary earned after such date. Contributions so
picked up shall be treated as employer contributions in
determining tax treatment under the United States Internal

SB3932 - 125 - LRB097 22549 JDS 71324 b
Revenue Code. The employer shall pay these member contributions
from the same source of funds which is used in paying salary to
the member. The employer may pick up these contributions by a
reduction in the cash salary of the member or by an offset
against a future salary increase or by a combination of a
reduction in salary and offset against a future salary
increase. Member contributions so picked up shall be treated
for all purposes of this Article 16 in the same manner as
member contributions made prior to the date the pick up began.
(d) Subject to the requirements of federal law and the
rules of the board, beginning July 1, 1998 and until the
effective date of this amendatory Act of the 97th General
Assembly, a member who is employed on a full-time basis may
elect to have the employer pick up optional contributions that
the member has elected to pay to the System, and the
contributions so picked up shall be treated as employer
contributions for the purposes of determining federal tax
treatment. The election to have optional contributions picked
up is irrevocable. At the time of making the election, the
member shall execute a binding, irrevocable payroll deduction
authorization. Upon receiving notice of the election, the
employer shall pick up the contributions by a reduction in the
cash salary of the member and shall pay the contributions from
the same source of funds that is used to pay earnings to the
member.
(Source: P.A. 90-448, eff. 8-16-97.)

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(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.
Subject to the conditions set forth in subsection (b-4),
the employers under this Article shall be responsible for
paying a portion of the normal costs of the System beginning in
State fiscal year 2014 and all of the normal costs of the
System beginning in State fiscal year 2023.
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, the Board shall
certify to the Governor the amount of the required State
contribution for the coming fiscal year. The certification
shall include a copy of the actuarial recommendations upon
which it is based.

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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 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
2006, taking into account the changes in required State
contributions made by this amendatory Act of the 94th General
Assembly.
On or before April 1, 2011 June 15, 2010, 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.
(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

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(a-1). From the effective date of 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

SB3932 - 129 - LRB097 22549 JDS 71324 b
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 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 the effective
date of 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.

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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

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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

SB3932 - 132 - LRB097 22549 JDS 71324 b
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 State fiscal year 2014, the minimum
required contribution of employers under this Article shall be
the following percentages of payroll, but only if, for the
specified State fiscal year, the State provides full funding at
the State fiscal year 2010 level for the mandates set forth in
the School Breakfast and Lunch Program Act and Article 14 and

SB3932 - 133 - LRB097 22549 JDS 71324 b
Sections 18-3, 18-4.3, and 29-5 of the School Code:
(i) for State fiscal year 2014, 0.5% of the- employer's
payroll for that fiscal year;
(ii) for State fiscal year 2015, 1.0% of the employer's
payroll for that fiscal year; and
(iii) for State fiscal year 2016, 2.0% of the
employer's payroll for that fiscal year;
(iv) for State fiscal year 2017, 3.0% of the employer's
payroll for that fiscal year;
(v) for State fiscal year 2018, 4.0% of the employer's
payroll for that fiscal year;
(vi) for State fiscal year 2019, 5.0% of the employer's
payroll for that fiscal year;
(vii) for State fiscal year 2020, 6.0% of the
employer's payroll for that fiscal year;
(viii) for State fiscal year 2021, 7.0% of the
employer's payroll for that fiscal year;
(ix) for State fiscal year 2022, 8.0% of the employer's
payroll for that fiscal year; and
(x) for State fiscal year 2023 and each State fiscal
year thereafter, 9.0% of the employer's payroll for that
fiscal year.
If the State does not provide, for a State fiscal year,
full funding at the State fiscal year 2010 level for the
mandates set forth in the School Breakfast and Lunch Program
Act and Article 14 and Sections 18-3, 18-4.3, and 29-5 of the

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School Code, then the employers shall not be required to make a
contribution under this subsection (b-4) for that State fiscal
year.
Notwithstanding any other provision of this subsection
(b-4), the minimum required contribution under this Section for
a fiscal year shall not exceed the System's normal costs for
that year.
Whenever it determines that a payment is or may be required
under this subsection (b-4), 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
(b-4) 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

SB3932 - 135 - LRB097 22549 JDS 71324 b
bill.
The purpose of this subsection (b-4), as well as the
school-mandate-related provisions of this amendatory Act of
the 97th General Assembly, is to shift certain pension-related
costs to employers while lessening the effects of unfunded
State mandates in order to ensure the financial stability of
affected employers.
(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, 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.
(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

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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

SB3932 - 137 - LRB097 22549 JDS 71324 b
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 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 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

SB3932 - 138 - LRB097 22549 JDS 71324 b
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 this amendatory Act of the 94th General

SB3932 - 139 - LRB097 22549 JDS 71324 b
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.

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(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

SB3932 - 141 - LRB097 22549 JDS 71324 b
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

SB3932 - 142 - LRB097 22549 JDS 71324 b
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.
(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

SB3932 - 143 - LRB097 22549 JDS 71324 b
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. 95-331, eff. 8-21-07; 95-950, eff. 8-29-08;
96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; 96-1511, eff.
1-27-11; 96-1554, eff. 3-18-11; revised 4-6-11.)
(40 ILCS 5/16-158.2 new)
Sec. 16-158.2. Self-managed plan.
(a) The General Assembly finds that it is important for
schools to be able to attract and retain the most qualified
employees and that in order to attract and retain these
employees, schools should have the flexibility to provide a
defined contribution (self-managed) plan for eligible members.
Accordingly, the Teachers' Retirement System of the State of
Illinois is hereby required, within 6 months after the
effective date of this Section, to establish and administer a
self-managed plan, which shall offer participating members the
opportunity to accumulate assets for retirement through a
combination of member and employer contributions that may be
invested in mutual funds, collective investment funds, or other
investment products and used to purchase annuity contracts,
either fixed or variable or a combination of fixed and
variable. The plan must be qualified under the Internal Revenue

SB3932 - 144 - LRB097 22549 JDS 71324 b
Code of 1986.
(b) Each employer subject to this Article shall adopt the
self-managed plan established under this Section.
The Teachers' Retirement System of the State of Illinois
shall be the plan sponsor for the self-managed plan and shall
prepare a plan document and adopt any rules and procedures as
are considered necessary or desirable for the administration of
the self-managed plan. Consistent with its fiduciary duty to
the participants and beneficiaries of the self-managed plan,
the Board of Trustees of the System may delegate aspects of
plan administration as it sees fit to companies authorized to
do business in this State, to the employers, or to a
combination of both.
(c) Selection of service providers and funding vehicles.
The System shall solicit proposals to provide administrative
services and funding vehicles for the self-managed plan from
insurance and annuity companies and mutual fund companies,
banks, trust companies, or other financial institutions
authorized to do business in this State. In reviewing the
proposals received and approving and contracting with no fewer
than 2 and no more than 7 companies, the Board of Trustees of
the System shall consider, among other things, the following
criteria:
(1) the nature and extent of the benefits that would be
provided to the participants;
(2) the reasonableness of the benefits in relation to

SB3932 - 145 - LRB097 22549 JDS 71324 b
the premium charged;
(3) the suitability of the benefits to the needs and
interests of the participating members and employers;
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company; and
(5) the efficacy of the contract in the recruitment and
retention of employees.
The System shall periodically review each approved
company. A company may continue to provide administrative
services and funding vehicles for the self-managed plan only so
long as it continues to be an approved company under contract
with the Board.
In addition to the companies approved by the System under
this subsection (c), the System may offer its participants an
investment fund managed by the System.
(d) Participants in the program must be allowed to direct
the transfer of their account balances among the various
investment options offered, subject to applicable contractual
provisions. The participant shall not be deemed a fiduciary by
reason of providing such investment direction. A person who is
a fiduciary shall not be liable for any loss resulting from
such investment direction and shall not be deemed to have
breached any fiduciary duty by acting in accordance with that
direction. Neither the System nor the employer guarantees any
of the investments in the participant's account balances.

SB3932 - 146 - LRB097 22549 JDS 71324 b
(e) Notwithstanding any other provision of this Code,
beginning on the effective date of the self-managed plan
established under this Section, each member in the System shall
participate in the self-managed plan with respect to service
under this Article on and after that date, and the ability of a
member in the System to accrue, on and after that date,
additional benefits under the traditional benefit package is
terminated.
A participant in the self-managed plan under this Section
must continue participation while he or she remains a member,
and may not participate in the traditional benefit package
while employed by that employer or any other employer under
this Article.
Participation in the self-managed plan under this Section
shall constitute membership in the Teachers' Retirement System
of the State of Illinois.
A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) If a member has rights and credits in the System due to
previous participation in the traditional benefit package but
those credits are insufficient, on the effective date of the
self-managed plan established under this Section, to satisfy
the service requirement for a retirement annuity under this
Article, then the System shall establish for the member an
opening account balance in the self-managed plan, equal to (i)
the amount of the contribution refund that the member would be

SB3932 - 147 - LRB097 22549 JDS 71324 b
eligible to receive under Sections 16-143.2 and 16-151 if the
employee terminated employment on that date and elected a
refund of contributions, plus (ii) an amount equal to the
regular employer contribution that would be required to fund
the actual regular cost incurred for each year of service
credit earned, provided that the total opening account balance
does not exceed 7.6% of that participant's salary for that
year, plus interest. The interest used in this subsection (f)
is calculated as the average annual rate of return that the
System has earned over the past 20 fiscal years and is
compounded. The System shall transfer assets from the
traditional benefit package to the self-managed plan, as a
tax-free transfer in accordance with Internal Revenue Service
guidelines, for purposes of funding the member's opening
account balance.
(g) Notwithstanding any other provision of this Article, a
member may not purchase or receive service or service credit
applicable to the traditional benefit package under this
Article for any period during which the member was a
participant in the self-managed plan established under this
Section.
(h) The self-managed plan shall be funded by contributions
from participants in the self-managed plan and employer
contributions as provided in this Section.
The annual required contribution for employees
participating in the self-managed plan shall be an amount equal

SB3932 - 148 - LRB097 22549 JDS 71324 b
to 6% of the employee's salary. This required contribution
shall be made as an employer pick-up under Section 414(h) of
the Internal Revenue Code of 1986 or any successor Section
thereof. Participants may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules adopted by the
System.
The program shall provide for annual State contributions to
be credited to the account of each employee who participates in
the self-managed plan in an amount equal to 6% of the
employee's compensation.
The System shall not be obligated to remit the required
employer contributions to any of the insurance and annuity
companies, mutual fund companies, banks, trust companies,
financial institutions, or other sponsors of any of the funding
vehicles offered under the self-managed plan until it has
received the required employer contributions from the State. In
the event of a deficiency in the amount of State contributions,
the System shall implement those procedures described in
subsection (b-1) of Section 16-158 to obtain the required
funding from the Common School Fund.
(i) A participant in the self-managed plan becomes vested
in the employer contributions credited to his or her accounts
in the self-managed plan on the earliest to occur of the
following: (1) attainment of at least 5 years of creditable
service under this Article; (2) the death of the participating

SB3932 - 149 - LRB097 22549 JDS 71324 b
member while employed under this Article, if the participant
has completed at least 1.5 years of service; or (3) the
participant's election to retire and apply the reciprocal
provisions of Article 20 of this Code.
A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the self-managed
plan while not yet eligible for retirement under this Article
(and Article 20, if applicable) shall forfeit all service
credit and accrued rights in the System; if subsequently
re-employed under this Article, the participant shall be
considered a new member. If a former participant in the
self-managed plan again becomes a member (or becomes employed
by a participating system under Article 20 of this Code) and
continues as such for at least 2 years, all such rights,
service credits, and previous status as a participant shall be
restored upon repayment of the amount of the distribution,
without interest.
(j) If a member participating in the self-managed plan who
is vested in employer contributions terminates employment, the
member shall be entitled to a benefit that is based on the
account values attributable to both employer and member
contributions and any investment return thereon.
If a member participating in the self-managed plan who is
not vested in employer contributions terminates employment,
the member shall be entitled to a benefit based solely on the
account values attributable to the member's contributions and

SB3932 - 150 - LRB097 22549 JDS 71324 b
any investment return thereon, and the employer contributions
and any investment return thereon shall be forfeited. Any
employer contributions that are forfeited shall be held in
escrow by the company investing those contributions and shall
be used, as directed by the System, for future allocations of
employer contributions or for the restoration of amounts
previously forfeited by former participants who again become
participants in the self-managed plan.
(k) If a participant so requests, a distribution of funds
from the self-managed plan may be paid in the form of a direct
rollover to another qualified plan, to the extent allowed by
federal law and in accordance with the rules of the System.
(40 ILCS 5/18-105.1 new)
Sec. 18-105.1. Traditional benefit package. "Traditional
benefit package" means the defined benefit retirement program
maintained by the System, which includes retirement annuities
payable directly from the System, as provided in Sections
18-124 through 18-125.1; disability retirement annuities
payable under Sections 18-126 and 18-126.1; survivor's
annuities payable directly from the System, as provided in
Section 18-123 and Sections 18-128 through 18-128.1 and Section
18-128.3; and contribution refunds as provided in Section
18-129.
(40 ILCS 5/18-105.2 new)

SB3932 - 151 - LRB097 22549 JDS 71324 b
Sec. 18-105.2. Self-managed plan. "Self-managed plan"
means the defined contribution retirement program maintained
by the System, as described in Section 18-133.2. The
self-managed plan also includes disability benefits, as
provided in Section 18-126.1. The self-managed plan does not
include retirement annuities or survivor's annuities payable
directly from the System, as provided in Section 18-123,
Sections 18-124 through 18-126, Sections 18-128 through
18-128.1, and Section 18-128.3 or refunds determined under
Section 18-129.
(40 ILCS 5/18-108.1 new)
Sec. 18-108.1. Tier I employee. "Tier I employee": A
participant who first became a participant before January 1,
2011.
(40 ILCS 5/18-111) (from Ch. 108 1/2, par. 18-111)
Sec. 18-111. Salary. "Salary": The total compensation paid
for personal services as a judge, by the State, or by the State
and a county as authorized by law. However, in the event that
federal law results in any judge receiving imputed income based
on the value of group term life insurance provided by the
State, such imputed income shall not be included in salary for
the purposes of this Article.
Notwithstanding any other provision of this Code, for
periods of service on and after the effective date of this

SB3932 - 152 - LRB097 22549 JDS 71324 b
amendatory Act of the 97th General Assembly, "salary" does not
include any annual remuneration for personal services in an
amount that is in excess of the annual contribution and benefit
base established for the previous year by the Commissioner of
Social Security pursuant to Section 230 of the federal Social
Security Act.
(Source: P.A. 86-273.)
(40 ILCS 5/18-123.3 new)
Sec. 18-123.3. Suspension of the accrual of benefits under
the traditional benefit package.
(a) Notwithstanding any other provision of this Code, the
retirement annuity of a judge who satisfies, on the effective
date of the self-managed plan established under Section
18-133.2, the service requirement for a retirement annuity
under this Article and who retires on or after the effective
date of this Section shall be calculated based on service
credit accrued under this Article prior to the effective date
of this Section and the judge's annual salary on the effective
date of this Section.
However, notwithstanding any other provision of this Code,
a judge who does not, on the effective date of the self-managed
plan established under Section 18-133.2, satisfy the service
requirement for a retirement annuity under this Article shall
not be entitled to a retirement annuity under this Article, but
shall instead be eligible to have an initial account balance

SB3932 - 153 - LRB097 22549 JDS 71324 b
established in the self-managed plan in accordance with Section
18-133.2.
(b) Notwithstanding any other provision of this Code, if a
judge or any other person is eligible for a benefit in the
traditional benefit package, other than a retirement annuity,
on the effective date of the self-managed plan established
under Section 18-133.2, then he or she shall continue to be
eligible for that benefit while he or she continues to meet all
otherwise applicable eligibility requirements.
However, notwithstanding any other provision of this Code,
if a judge or other person is ineligible for a benefit in the
traditional benefit package, other than a retirement annuity,
on the effective date of the self-managed plan established
under Section 18-133.2, then he or she shall remain ineligible
for that benefit on and after the effective date of this
Section.
(40 ILCS 5/18-124) (from Ch. 108 1/2, par. 18-124)
Sec. 18-124. Retirement annuities - conditions for
eligibility.
(a) This subsection (a) applies to a participant who first
serves as a judge before the effective date of this amendatory
Act of the 96th General Assembly.
A participant whose employment as a judge is terminated,
regardless of age or cause is entitled to a retirement annuity
beginning on the date specified in a written application

SB3932 - 154 - LRB097 22549 JDS 71324 b
subject to the following:
(1) the date the annuity begins is subsequent to the
date of final termination of employment, or the date 30
days prior to the receipt of the application by the board
for annuities based on disability, or one year before the
receipt of the application by the board for annuities based
on attained age;
(2) the participant is at least age 55, or has become
permanently disabled and as a consequence is unable to
perform the duties of his or her office;
(3) the participant has at least 10 years of service
credit except that a participant terminating service after
June 30 1975, with at least 6 years of service credit,
shall be entitled to a retirement annuity at age 62 or
over;
(4) the participant is not receiving or entitled to
receive, at the date of retirement, any salary from an
employer for service currently performed.
Notwithstanding any other provision of this Code,
beginning on the effective date of this amendatory Act of the
97th General Assembly, a Tier I employee shall not, regardless
of the amount of accrued service credit, be entitled to a
retirement annuity until he or she has attained age 62.
(b) This subsection (b) applies to a participant who first
serves as a judge on or after the effective date of this
amendatory Act of the 96th General Assembly.

SB3932 - 155 - LRB097 22549 JDS 71324 b
A participant who has at least 8 years of creditable
service is entitled to a retirement annuity when he or she has
attained age 67.
A member who has attained age 62 and has at least 8 years
of service credit may elect to receive the lower retirement
annuity provided in subsection (d) of Section 18-125 of this
Code.
(Source: P.A. 96-889, eff. 1-1-11.)
(40 ILCS 5/18-125.1) (from Ch. 108 1/2, par. 18-125.1)
Sec. 18-125.1. Automatic increase in retirement annuity.
(a) A participant who retires from service after June 30,
1969, shall, in January of the year next following the year in
which the first anniversary of retirement occurs, and in
January of each year thereafter, have the amount of his or her
originally granted retirement annuity increased as follows:
for each year up to and including 1971, 1 1/2%; for each year
from 1972 through 1979 inclusive, 2%; and for 1980 and each
year thereafter, 3%.
(b) Notwithstanding any other provision of this Article,
except subsections (f), (f-5), and (g) of this Section, a
retirement annuity for a participant who first serves as a
judge on or after January 1, 2011 (the effective date of Public
Act 96-889) shall be increased in January of the year next
following the year in which the first anniversary of retirement
occurs, but in no event prior to age 67, and in January of each

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year thereafter, by an amount equal to 3% or the annual
percentage increase in the consumer price index-u as determined
by the Public Pension Division of the Department of Insurance
under subsection (b-5) of Section 18-125, whichever is less, of
the retirement annuity then being paid.
(c) This Section is not applicable to a participant who
retires before he or she has made contributions at the rate
prescribed in Section 18-133 for automatic increases for not
less than the equivalent of one full year, unless such a
participant arranges to pay the system the amount required to
bring the total contributions for the automatic increase to the
equivalent of one year's contribution based upon his or her
last year's salary.
This Section is applicable to all participants in service
after June 30, 1969 unless a participant has elected, prior to
September 1, 1969, in a written direction filed with the board
not to be subject to the provisions of this Section. Any
participant in service on or after July 1, 1992 shall have the
option of electing prior to April 1, 1993, in a written
direction filed with the board, to be covered by the provisions
of the 1969 amendatory Act. Such participant shall be required
to make the aforesaid additional contributions with compound
interest at 4% per annum.
(d) Any participant who has become eligible to receive the
maximum rate of annuity and who resumes service as a judge
after receiving a retirement annuity under this Article shall

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have the amount of his or her retirement annuity increased by
3% of the originally granted annuity amount for each year of
such resumed service, beginning in January of the year next
following the date of such resumed service, upon subsequent
termination of such resumed service.
(e) 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 previous increases granted under this
Article.
(f) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the monthly retirement annuity of an annuitant shall
first be subject to annual increases on the January 1 occurring
on or next after either the attainment of age 67 or the January
1 occurring on or next after the fifth anniversary of the
annuity start date, whichever occurs earlier. If on the
effective date of this amendatory Act of the 97th General
Assembly an annuitant has already received an annual increase
under this Section but is not eligible to receive an annual
increase under this subsection, then the annual increases
already received shall continue in force, but no additional
annual increase shall be granted until the annuitant meets the
new eligibility requirements.
(f-5) Notwithstanding any other provision of this Code, no

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annual increase shall be paid under this Section in a calendar
year if, on January 1 of the preceding calendar year, the total
assets of the System are less than 85% of the total actuarial
liabilities of the System, as annually certified by the System.
(g) Notwithstanding any other provision of this Code,
except subsection (f-5) of this Section, beginning on the
effective date of this amendatory Act of the 97th General
Assembly, the amount of each automatic annual increase in
retirement annuity occurring on or after the effective date of
this amendatory Act of the 97th General Assembly shall be 3% or
one-half of the annual unadjusted percentage increase, if any,
in the Consumer Price Index-U for the 12 months ending with the
preceding September, whichever is less, of the originally
granted retirement annuity. 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.
(Source: P.A. 96-889, eff. 1-1-11; 96-1490, eff. 1-1-11.)
(40 ILCS 5/18-133.2 new)
Sec. 18-133.2. Self-managed plan.
(a) The General Assembly finds that it is important to be
able to attract and retain the most qualified judges and that
in order to attract and retain these judges, the System should

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have the flexibility to provide a defined contribution
(self-managed) plan for eligible participants. Accordingly,
the Judges Retirement System of Illinois is hereby required,
within 6 months after the effective date of this Section, to
establish and administer a self-managed plan, which shall offer
participants the opportunity to accumulate assets for
retirement through a combination of participant and employer
contributions that may be invested in mutual funds, collective
investment funds, or other investment products and used to
purchase annuity contracts, either fixed or variable or a
combination thereof. The plan must be qualified under the
Internal Revenue Code of 1986.
(b) The Board shall adopt the self-managed plan established
under this Section.
The Judges Retirement System of Illinois shall be the plan
sponsor for the self-managed plan and shall prepare a plan
document and prescribe such rules and procedures as are
considered necessary or desirable for the administration of the
self-managed plan. Consistent with its fiduciary duty to the
participants and beneficiaries of the self-managed plan, the
Board of Trustees of the System may delegate aspects of plan
administration as it sees fit to companies authorized to do
business in this State.
(c) The System shall solicit proposals to provide
administrative services and funding vehicles for the
self-managed plan from insurance and annuity companies and

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mutual fund companies, banks, trust companies, or other
financial institutions authorized to do business in this State.
In reviewing the proposals received and approving and
contracting with no fewer than 2 and no more than 7 companies,
the Board of Trustees of the System shall consider, among other
things, the following criteria:
(1) the nature and extent of the benefits that would be
provided to the participants;
(2) the reasonableness of the benefits in relation to
the premium charged;
(3) the suitability of the benefits to the needs and
interests of the participants and the employer;
(4) the ability of the company to provide benefits
under the contract and the financial stability of the
company; and
(5) the efficacy of the contract in the recruitment and
retention of judges.
The System shall periodically review each approved
company. A company may continue to provide administrative
services and funding vehicles for the self-managed plan only so
long as it continues to be an approved company under contract
with the Board.
In addition to the companies approved by the System under
this subsection (c), the System may offer its participants an
investment fund managed by the System.
(d) Participants who are under the self-managed plan must

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be allowed to direct the transfer of their account balances
among the various investment options offered, subject to
applicable contractual provisions. The participant shall not
be deemed a fiduciary by reason of providing such investment
direction. A person who is a fiduciary shall not be liable for
any loss resulting from such investment direction and shall not
be deemed to have breached any fiduciary duty by acting in
accordance with that direction. Neither the System nor the
State guarantees any of the investments in the participant's
account balances.
(e) Notwithstanding any other provision of this Code,
beginning on the effective date of the self-managed plan
established under this Section, each participant in the System
shall participate in the self-managed plan with respect to
service under this Article on and after that date, and the
ability of a participant in the System to accrue, on and after
that date, additional benefits under the traditional benefit
package is terminated.
A participant who participates in the self-managed plan
under this Section must continue participation while employed
as a judge, and may not participate in the traditional benefit
package administered by the System under this Article while
employed as a judge.
Participation in the self-managed plan under this Section
shall constitute membership in the Judges Retirement System of
Illinois.

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A participant under this Section shall be entitled to the
benefits of Article 20 of this Code.
(f) If a participant has rights and credits in the System
due to previous participation in the traditional benefit
package but those credits are insufficient, on the effective
date of the self-managed plan established under this Section,
to satisfy the service requirement for a retirement annuity
under this Article, then the System shall establish for the
member an opening account balance in the self-managed plan,
equal to (i) the amount of the contribution refund that the
member would be eligible to receive under Section 18-129 if the
employee terminated employment on that date and elected a
refund of contributions, plus (ii) an amount equal to the
regular employer contribution that would be required to fund
the actual regular cost incurred for each year of service
credit earned, provided that the total opening account balance
does not exceed 7.6% of that participant's salary for that
year, plus interest. The interest used in this subsection (f)
is calculated as the average annual rate of return that the
System has earned over the past 20 fiscal years and is
compounded. The System shall transfer assets from the
traditional benefit package to the self-managed plan, as a
tax-free transfer in accordance with Internal Revenue Service
guidelines, for purposes of funding the member's opening
account balance.
(g) Notwithstanding any other provision of this Article, a

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participant may not purchase or receive service or service
credit applicable to the traditional benefit package under this
Article for any period during which the participant was covered
under the self-managed plan established under this Section.
(h) The self-managed plan shall be funded by contributions
from participants in the self-managed plan and employer
contributions as provided in this Section.
The annual required contribution for employees
participating in the self-managed plan shall be an amount equal
to 6% of the employee's salary. This required contribution
shall be made as an employer pick-up under Section 414(h) of
the Internal Revenue Code of 1986 or any successor Section
thereof. Participants may make additional contributions to the
self-managed plan in accordance with procedures prescribed by
the System, to the extent permitted under rules adopted by the
System.
The program shall provide for annual State contributions to
be credited to the account of each employee who participates in
the self-managed plan in an amount equal to 6% of the
employee's compensation.
The System shall not be obligated to remit the required
employer contributions to any of the insurance and annuity
companies, mutual fund companies, banks, trust companies,
financial institutions, or other sponsors of any of the funding
vehicles offered under the self-managed plan until it has
received the required employer contributions from the State. In

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the event of a deficiency in the amount of State contributions,
the System shall implement those procedures described in
subsection (b-1) of Section 16-158 to obtain the required
funding from the Common School Fund.
(i) A participant in the self-managed plan becomes vested
in the employer contributions credited to his or her accounts
in the self-managed plan on the earliest to occur of the
following: (1) attainment of 5 years of service credit; (2) the
death of the participant while employed as a judge, if the
participant has completed at least 1.5 years of service; or (3)
the participant's election to retire and apply the reciprocal
provisions of Article 20 of this Code.
A participant in the self-managed plan who receives a
distribution of his or her vested amounts from the self-managed
plan while not yet eligible for retirement under this Article
(and Article 20, if applicable) shall forfeit all service
credit and accrued rights in the System; if subsequently
re-employed as a judge, the participant shall be considered a
new employee. If a former participant again becomes a
participating employee (or becomes employed by a participating
system under Article 20 of this Code) and continues as such for
at least 2 years, all such rights, service credits, and
previous status as a participant shall be restored upon
repayment of the amount of the distribution, without interest.
(j) If a participant who is vested in employer
contributions terminates employment, the participant shall be

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entitled to a benefit which is based on the account values
attributable to both employer and participant contributions
and any investment return thereon.
If a participant who is not vested in employer
contributions terminates employment, the participant shall be
entitled to a benefit based solely on the account values
attributable to the participant's contributions and any
investment return thereon, and the employer contributions and
any investment return thereon shall be forfeited. Any employer
contributions which are forfeited shall be held in escrow by
the company investing those contributions and shall be used, as
directed by the System, for future allocations of employer
contributions or for the restoration of amounts previously
forfeited by former participants who again become
participating employees.
(k) If a participant so requests, a distribution of funds
from the self-managed plan may be paid in the form of a direct
rollover to another qualified plan, to the extent allowed by
federal law and in accordance with the rules of the System.
Section 15. The School Code is amended by changing Sections
2-3.11, 10-22.34c, 14-2, and 22-60 as follows:
(105 ILCS 5/2-3.11) (from Ch. 122, par. 2-3.11)
Sec. 2-3.11. Report to Governor and General Assembly. To
report to the Governor and General Assembly annually on or

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before January 14 the condition of the schools of the State
using the most recently available data.
Such annual report shall contain reports of the State
Teacher Certification Board; the schools of the State
charitable institutions; reports on driver education, special
education, and transportation; and for such year the annual
statistical reports of the State Board of Education, including
the number and kinds of school districts; number of school
attendance centers; number of men and women teachers;
enrollment by grades; total enrollment; total days attendance;
total days absence; average daily attendance; number of
elementary and secondary school graduates; assessed valuation;
tax levies and tax rates for various purposes; amount of
teachers' orders, anticipation warrants, and bonds
outstanding; and number of men and women teachers and total
enrollment of private schools. The report shall give for all
school districts receipts from all sources and expenditures for
all purposes for each fund; the total operating expense, the
per capita cost, and instructional expenditures; federal and
state aids and reimbursements; new school buildings, and
recognized schools; together with such other information and
suggestions as the State Board of Education may deem important
in relation to the schools and school laws and the means of
promoting education throughout the state.
In this Section, "instructional expenditures" means the
annual expenditures of school districts properly attributable

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to expenditure functions defined in rules of the State Board of
Education as: 1100 (Regular Education); 1200-1220 (Special
Education); 1250 (Ed. Deprived/Remedial); 1400 (Vocational
Programs); 1600 (Summer School); 1650 (Gifted); 1800
(Bilingual Programs); 1900 (Truant Alternative); 2110
(Attendance and Social Work Services); 2120 (Guidance
Services); 2130 (Health Services); 2140 (Psychological
Services); 2150 (Speech Pathology and Audiology Services);
2190 (Other Support Services Pupils); 2210 (Improvement of
Instruction); 2220 (Educational Media Services); 2230
(Assessment and Testing); 2540 (Operation and Maintenance of
Plant Services); 2550 (Pupil Transportation Service); 2560
(Food Service); 4110 (Payments for Regular Programs); 4120
(Payments for Special Education Programs); 4130 (Payments for
Adult Education Programs); 4140 (Payments for Vocational
Education Programs); 4170 (Payments for Community College
Programs); 4190 (Other payments to in-state government units);
and 4200 (Other payments to out of state government units).
(Source: P.A. 95-793, eff. 1-1-09; 96-734, eff. 8-25-09.)
(105 ILCS 5/10-22.34c)
Sec. 10-22.34c. Third party non-instructional services.
Notwithstanding any other law of this State, nothing in this
Code prevents a (a) A board of education from entering may
enter into a contract with a third party for non-instructional
services currently performed by any employee or bargaining unit

SB3932 - 168 - LRB097 22549 JDS 71324 b
member or from laying lay off those educational support
personnel employees upon 30 90 days written notice to the
affected employees. , provided that:
(1) a contract must not be entered into and become
effective during the term of a collective bargaining
agreement, as that term is set forth in the agreement,
covering any employees who perform the non-instructional
services;
(2) a contract may only take effect upon the expiration
of an existing collective bargaining agreement;
(3) any third party that submits a bid to perform the
non-instructional services shall provide the following:
(A) evidence of liability insurance in scope and
amount equivalent to the liability insurance provided
by the school board pursuant to Section 10-22.3 of this
Code;
(B) a benefits package for the third party's
employees who will perform the non-instructional
services comparable to the benefits package provided
to school board employees who perform those services;
(C) a list of the number of employees who will
provide the non-instructional services, the job
classifications of those employees, and the wages the
third party will pay those employees;
(D) a minimum 3-year cost projection, using
generally accepted accounting principles and which the

SB3932 - 169 - LRB097 22549 JDS 71324 b
third party is prohibited from increasing if the bid is
accepted by the school board, for each and every
expenditure category and account for performing the
non-instructional services;
(E) composite information about the criminal and
disciplinary records, including alcohol or other
substance abuse, Department of Children and Family
Services complaints and investigations, traffic
violations, and license revocations or any other
licensure problems, of any employees who may perform
the non-instructional services, provided that the
individual names and other identifying information of
employees need not be provided with the submission of
the bid, but must be made available upon request of the
school board; and
(F) an affidavit, notarized by the president or
chief executive officer of the third party, that each
of its employees has completed a criminal background
check as required by Section 10-21.9 of this Code
within 3 months prior to submission of the bid,
provided that the results of such background checks
need not be provided with the submission of the bid,
but must be made available upon request of the school
board;
(4) a contract must not be entered into unless the
school board provides a cost comparison, using generally

SB3932 - 170 - LRB097 22549 JDS 71324 b
accepted accounting principles, of each and every
expenditure category and account that the school board
projects it would incur over the term of the contract if it
continued to perform the non-instructional services using
its own employees with each and every expenditure category
and account that is projected a third party would incur if
a third party performed the non-instructional services;
(5) review and consideration of all bids by third
parties to perform the non-instructional services shall
take place in open session of a regularly scheduled school
board meeting, unless the exclusive bargaining
representative of the employees who perform the
non-instructional services, if any such exclusive
bargaining representative exists, agrees in writing that
such review and consideration can take place in open
session at a specially scheduled school board meeting;
(6) a minimum of one public hearing, conducted by the
school board prior to a regularly scheduled school board
meeting, to discuss the school board's proposal to contract
with a third party to perform the non-instructional
services must be held before the school board may enter
into such a contract; the school board must provide notice
to the public of the date, time, and location of the first
public hearing on or before the initial date that bids to
provide the non-instructional services are solicited or a
minimum of 30 days prior to entering into such a contract,

SB3932 - 171 - LRB097 22549 JDS 71324 b
whichever provides a greater period of notice;
(7) a contract shall contain provisions requiring the
contractor to offer available employee positions pursuant
to the contract to qualified school district employees
whose employment is terminated because of the contract; and
(8) a contract shall contain provisions requiring the
contractor to comply with a policy of nondiscrimination and
equal employment opportunity for all persons and to take
affirmative steps to provide equal opportunity for all
persons.
(b) Notwithstanding subsection (a) of this Section, a board
of education may enter into a contract, of no longer than 3
months in duration, with a third party for non-instructional
services currently performed by an employee or bargaining unit
member for the purpose of augmenting the current workforce in
an emergency situation that threatens the safety or health of
the school district's students or staff, provided that the
school board meets all of its obligations under the Illinois
Educational Labor Relations Act.
(c) The changes to this Section made by this amendatory Act
of the 95th General Assembly are not applicable to
non-instructional services of a school district that on the
effective date of this amendatory Act of the 95th General
Assembly are performed for the school district by a third
party.
(Source: P.A. 95-241, eff. 8-17-07; 96-328, eff. 8-11-09.)

SB3932 - 172 - LRB097 22549 JDS 71324 b
(105 ILCS 5/14-2)
Sec. 14-2. Class size Definition of general education
classes classroom for special education students receiving
services in the general education classes and special education
classrooms for special education students receiving services
in the special education classroom.
(a) The State Board of Education shall have no authority to
adopt or promulgate any administrative rules or regulations
that establish or limit the class size or ratio of the student
population of a general education class for students receiving
services in general education classes beyond what may be
required by federal rule or law, unless the State Board of
Education fully funds the cost of additional teachers and other
staff that are required by such class size limitation. With
respect to any State statute or administrative rule that
defines a general education classroom to be composed of a
certain percentage of students with individualized education
programs (IEPs), students with individualized education
programs shall exclude students receiving only speech services
outside of the general education classroom, provided that the
instruction the students receive in the general education
classroom does not require modification.
(b) The State Board of Education shall have no authority to
adopt or promulgate any administrative rules or regulations
that establish or limit the class size of special education

SB3932 - 173 - LRB097 22549 JDS 71324 b
classes beyond what may be required by federal rule or law,
unless the State Board of Education fully funds the cost of
additional teachers and other staff that are required by such
class size limitation. "Special Education Classes" means any
circumstance where only students with individual education
plans are served and at least one special education teacher is
assigned and provides instruction or therapy exclusively to
students with individual education plans. In every instance, a
school district must ensure that composition of the general
education classroom does not interfere with the provision of a
free and appropriate public education to any student.
(c) Any rule or regulation in effect establishing or
limiting the class size or ratio of student population of
general education classes for special education students
receiving services in general education classes or
establishing or limiting the class size of special education
classes is hereby null and void on the effective date of this
amendatory Act of the 97th General Assembly.
(Source: P.A. 97-284, eff. 8-9-11.)
(105 ILCS 5/22-60)
Sec. 22-60. Unfunded mandates prohibited.
(a) No public school district or private school is
obligated to comply with any statutory or regulatory mandate or
requirement the following types of mandates unless a separate
appropriation has been enacted into law providing full funding

SB3932 - 174 - LRB097 22549 JDS 71324 b
for the mandate for the school year during which the mandate is
required. :
(1) Any mandate in this Code enacted after the
effective date of this amendatory Act of the 96th General
Assembly.
(2) Any regulatory mandate promulgated by the State
Board of Education and adopted by rule after the effective
date of this amendatory Act of the 96th General Assembly
other than those promulgated with respect to this Section
or statutes already enacted on or before the effective date
of this amendatory Act of the 96th General Assembly.
(b) If the amount appropriated to fund a statutory or
regulatory mandate or requirement is insufficient to described
in subsection (a) of this Section does not fully fund the
mandated activity, then the school district or private school
may choose to discontinue or modify the mandated activity to
ensure that the costs of compliance do not exceed the funding
received. Official action by a school board must take place
before a school district may discontinue or modify a mandated
activity due to insufficient funding from the State. If a
school district discontinues or modifies a mandated activity
due to insufficient funding from the State, then the school
district shall maintain a list of discontinued or modified
mandated activities. The list shall be provided to the State
Board of Education upon request.
Before discontinuing or modifying the mandate, the school

SB3932 - 175 - LRB097 22549 JDS 71324 b
district shall petition its regional superintendent of schools
on or before February 15 of each year to request to be exempt
from implementing the mandate in a school or schools in the
next school year. The petition shall include all legitimate
costs associated with implementing and operating the mandate,
the estimated reimbursement from State and federal sources, and
any unique circumstances the school district can verify that
exist that would cause the implementation and operation of such
a mandate to be cost prohibitive.
The regional superintendent of schools shall review the
petition. In accordance with the Open Meetings Act, he or she
shall convene a public hearing to hear testimony from the
school district and interested community members. The regional
superintendent shall, on or before March 15 of each year,
inform the school district of his or her decision, along with
the reasons why the exemption was granted or denied, in
writing. The regional superintendent must also send
notification to the State Board of Education detailing which
school districts requested an exemption and the results.
If the regional superintendent grants an exemption to the
school district, then the school district is relieved from the
requirement to establish and implement the mandate in the
school or schools granted an exemption for the next school
year. If the regional superintendent of schools does not grant
an exemption, then the school district shall implement the
mandate in accordance with the applicable law or rule by the

SB3932 - 176 - LRB097 22549 JDS 71324 b
first student attendance day of the next school year. However,
the school district or a resident of the school district may on
or before April 15 appeal the decision of the regional
superintendent to the State Superintendent of Education. The
State Superintendent shall hear appeals on the decisions of
regional superintendents of schools no later than May 15 of
each year. The State Superintendent shall make a final decision
at the conclusion of the hearing on the school district's
request for an exemption from the mandate. If the State
Superintendent grants an exemption, then the school district is
relieved from the requirement to implement a mandate in the
school or schools granted an exemption for the next school
year. If the State Superintendent does not grant an exemption,
then the school district shall implement the mandate in
accordance with the applicable law or rule by the first student
attendance day of the next school year.
If a school district or private school discontinues or
modifies a mandated activity due to lack of full funding from
the State, then the school district or private school shall
annually maintain and update a list of discontinued or modified
mandated activities. The list shall be provided to the State
Board of Education upon request.
(c) (Blank). This Section does not apply to (i) any new
statutory or regulatory mandates related to revised learning
standards developed through the Common Core State Standards
Initiative and assessments developed to align with those

SB3932 - 177 - LRB097 22549 JDS 71324 b
standards or actions specified in this State's Phase 2 Race to
the Top Grant application if the application is approved by the
United States Department of Education or (ii) new statutory or
regulatory mandates from the Race to the Top Grant through the
federal American Recovery and Reinvestment Act of 2009 imposed
on school districts designated as being in the lowest
performing 5% of schools within the Race to the Top Grant
application.
(d) (Blank). In any instances in which this Section
conflicts with the State Mandates Act, the State Mandates Act
shall prevail.
(Source: P.A. 96-1441, eff. 8-20-10.)
(105 ILCS 5/27-24 rep.)
(105 ILCS 5/27-24.1 rep.)
(105 ILCS 5/27-24.2 rep.)
(105 ILCS 5/27-24.3 rep.)
(105 ILCS 5/27-24.4 rep.)
(105 ILCS 5/27-24.5 rep.)
(105 ILCS 5/27-24.6 rep.)
(105 ILCS 5/27-24.7 rep.)
(105 ILCS 5/27-24.8 rep.)
Section 20. The School Code is amended by repealing
Sections 27-24, 27-24.1, 27-24.2, 27-24.3, 27-24.4, 27-24.5,
27-24.6, 27-24.7, and 27-24.8.

SB3932 - 178 - LRB097 22549 JDS 71324 b
Section 22. The Illinois Educational Labor Relations Act is
amended by changing Section 4.5 and 17 as follows:
(115 ILCS 5/4.5)
Sec. 4.5. Subjects of collective bargaining.
(a) Notwithstanding the existence of any other provision in
this Act or other law, except subsection (a-5) of this Section,
collective bargaining between an educational employer whose
territorial boundaries are coterminous with those of a city
having a population in excess of 500,000 and an exclusive
representative of its employees may include any of the
following subjects:
(1) (Blank).
(2) Decisions to contract with a third party for one or
more services otherwise performed by employees in a
bargaining unit and the procedures for obtaining such
contract or the identity of the third party.
(3) Decisions to layoff or reduce in force employees.
(4) Decisions to determine class size, class staffing
and assignment, class schedules, academic calendar, length
of the work and school day with respect to a public school
district organized under Article 34 of the School Code
only, length of the work and school year with respect to a
public school district organized under Article 34 of the
School Code only, hours and places of instruction, or pupil
assessment policies.

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(5) Decisions concerning use and staffing of
experimental or pilot programs and decisions concerning
use of technology to deliver educational programs and
services and staffing to provide the technology.
(a-5) On and after the effective date of this amendatory
Act of the 97th General Assembly, a school district organized
under Article 34 of the School Code and an exclusive
representative of that district's employees shall not enter
into, amend, or renew a collective bargaining agreement that
relates to decisions concerning the use and staffing of
experimental or pilot programs or decisions concerning the use
of technology to deliver educational programs and services and
staffing to provide the technology.
(b) The subject or matters described in subsection (a) are
permissive subjects of bargaining between an educational
employer and an exclusive representative of its employees and,
for the purpose of this Act, are within the sole discretion of
the educational employer to decide to bargain, provided that
the educational employer is required to bargain over the impact
of a decision concerning such subject or matter on the
bargaining unit upon request by the exclusive representative.
During this bargaining, the educational employer shall not be
precluded from implementing its decision. If, after a
reasonable period of bargaining, a dispute or impasse exists
between the educational employer and the exclusive
representative, the dispute or impasse shall be resolved

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exclusively as set forth in subsection (b) of Section 12 of
this Act in lieu of a strike under Section 13 of this Act.
Neither the Board nor any mediator or fact-finder appointed
pursuant to subsection (a-10) of Section 12 of this Act shall
have jurisdiction over such a dispute or impasse.
(c) A provision in a collective bargaining agreement that
was rendered null and void because it involved a prohibited
subject of collective bargaining under this subsection (c) as
this subsection (c) existed before the effective date of this
amendatory Act of the 93rd General Assembly remains null and
void and shall not otherwise be reinstated in any successor
agreement unless the educational employer and exclusive
representative otherwise agree to include an agreement reached
on a subject or matter described in subsection (a) of this
Section as subsection (a) existed before this amendatory Act of
the 93rd General Assembly.
(Source: P.A. 97-7, eff. 6-13-11; 97-8, eff. 6-13-11.)
(115 ILCS 5/17) (from Ch. 48, par. 1717)
Sec. 17. Effect on other laws. In case of any conflict
between the provisions of this Act and any other law (other
than the changes made by this amendatory Act of the 97th
General Assembly), executive order or administrative
regulation, the provisions of this Act shall prevail and
control. Nothing in this Act shall be construed to replace or
diminish the rights of employees established by Section 36d of

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"An Act to create the State Universities Civil Service System",
approved May 11, 1905, as amended or modified.
(Source: P.A. 83-1014.)
Section 25. The Illinois Vehicle Code is amended by
changing Sections 1-103 and 6-103 as follows:
(625 ILCS 5/1-103) (from Ch. 95 1/2, par. 1-103)
Sec. 1-103. Approved driver education course. (a) Any
course of driver education approved by the State Board of
Education, offered by public or private schools maintaining
grades 9 through 12, and meeting at least the minimum
requirements of the "Driver Education Act", as now or hereafter
amended, (b) any course of driver education offered by a school
licensed to give driver education instructions under this Code
that Act which meets at least the minimum educational
requirements of the "Driver Education Act", as now or hereafter
amended, and is approved by the State Board of Education, (c)
any course of driver education given in another state State to
an Illinois resident attending school in such state State and
approved by the state State administrator of the Driver
Education Program of such other state State, or (d) any course
of driver education given at a Department of Defense Education
Activity school that is approved by the Department of Defense
Education Activity and taught by an adult driver education
instructor or traffic safety officer.

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(Source: P.A. 96-740, eff. 1-1-10.)
(625 ILCS 5/6-103) (from Ch. 95 1/2, par. 6-103)
Sec. 6-103. What persons shall not be licensed as drivers
or granted permits. The Secretary of State shall not issue,
renew, or allow the retention of any driver's license nor issue
any permit under this Code:
1. To any person, as a driver, who is under the age of
18 years except as provided in Section 6-107, and except
that an instruction permit may be issued under Section
6-107.1 to a child who is not less than 15 years of age if
the child is enrolled in an approved driver education
course as defined in Section 1-103 of this Code and
requires an instruction permit to participate therein,
except that an instruction permit may be issued under the
provisions of Section 6-107.1 to a child who is 17 years
and 3 months of age without the child having enrolled in an
approved driver education course and except that an
instruction permit may be issued to a child who is at least
15 years and 3 months of age, is enrolled in school, meets
the educational requirements of the Driver Education Act,
and has passed examinations the Secretary of State in his
or her discretion may prescribe;
2. To any person who is under the age of 18 as an
operator of a motorcycle other than a motor driven cycle
unless the person has, in addition to meeting the

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provisions of Section 6-107 of this Code, successfully
completed a motorcycle training course approved by the
Illinois Department of Transportation and successfully
completes the required Secretary of State's motorcycle
driver's examination;
3. To any person, as a driver, whose driver's license
or permit has been suspended, during the suspension, nor to
any person whose driver's license or permit has been
revoked, except as provided in Sections 6-205, 6-206, and
6-208;
4. To any person, as a driver, who is a user of alcohol
or any other drug to a degree that renders the person
incapable of safely driving a motor vehicle;
5. To any person, as a driver, who has previously been
adjudged to be afflicted with or suffering from any mental
or physical disability or disease and who has not at the
time of application been restored to competency by the
methods provided by law;
6. To any person, as a driver, who is required by the
Secretary of State to submit an alcohol and drug evaluation
or take an examination provided for in this Code unless the
person has successfully passed the examination and
submitted any required evaluation;
7. To any person who is required under the provisions
of the laws of this State to deposit security or proof of
financial responsibility and who has not deposited the

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security or proof;
8. To any person when the Secretary of State has good
cause to believe that the person by reason of physical or
mental disability would not be able to safely operate a
motor vehicle upon the highways, unless the person shall
furnish to the Secretary of State a verified written
statement, acceptable to the Secretary of State, from a
competent medical specialist, a licensed physician
assistant who has been delegated the performance of medical
examinations by his or her supervising physician, or a
licensed advanced practice nurse who has a written
collaborative agreement with a collaborating physician
which authorizes him or her to perform medical
examinations, to the effect that the operation of a motor
vehicle by the person would not be inimical to the public
safety;
9. To any person, as a driver, who is 69 years of age
or older, unless the person has successfully complied with
the provisions of Section 6-109;
10. To any person convicted, within 12 months of
application for a license, of any of the sexual offenses
enumerated in paragraph 2 of subsection (b) of Section
6-205;
11. To any person who is under the age of 21 years with
a classification prohibited in paragraph (b) of Section
6-104 and to any person who is under the age of 18 years

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with a classification prohibited in paragraph (c) of
Section 6-104;
12. To any person who has been either convicted of or
adjudicated under the Juvenile Court Act of 1987 based upon
a violation of the Cannabis Control Act, the Illinois
Controlled Substances Act, or the Methamphetamine Control
and Community Protection Act while that person was in
actual physical control of a motor vehicle. For purposes of
this Section, any person placed on probation under Section
10 of the Cannabis Control Act, Section 410 of the Illinois
Controlled Substances Act, or Section 70 of the
Methamphetamine Control and Community Protection Act shall
not be considered convicted. Any person found guilty of
this offense, while in actual physical control of a motor
vehicle, shall have an entry made in the court record by
the judge that this offense did occur while the person was
in actual physical control of a motor vehicle and order the
clerk of the court to report the violation to the Secretary
of State as such. The Secretary of State shall not issue a
new license or permit for a period of one year;
13. To any person who is under the age of 18 years and
who has committed the offense of operating a motor vehicle
without a valid license or permit in violation of Section
6-101 or a similar out of state offense;
14. To any person who is 90 days or more delinquent in
court ordered child support payments or has been

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adjudicated in arrears in an amount equal to 90 days'
obligation or more and who has been found in contempt of
court for failure to pay the support, subject to the
requirements and procedures of Article VII of Chapter 7 of
the Illinois Vehicle Code;
14.5. To any person certified by the Illinois
Department of Healthcare and Family Services as being 90
days or more delinquent in payment of support under an
order of support entered by a court or administrative body
of this or any other State, subject to the requirements and
procedures of Article VII of Chapter 7 of this Code
regarding those certifications;
15. To any person released from a term of imprisonment
for violating Section 9-3 of the Criminal Code of 1961 or a
similar provision of a law of another state relating to
reckless homicide or for violating subparagraph (F) of
paragraph (1) of subsection (d) of Section 11-501 of this
Code relating to aggravated driving under the influence of
alcohol, other drug or drugs, intoxicating compound or
compounds, or any combination thereof, if the violation was
the proximate cause of a death, within 24 months of release
from a term of imprisonment;
16. To any person who, with intent to influence any act
related to the issuance of any driver's license or permit,
by an employee of the Secretary of State's Office, or the
owner or employee of any commercial driver training school

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licensed by the Secretary of State, or any other individual
authorized by the laws of this State to give driving
instructions or administer all or part of a driver's
license examination, promises or tenders to that person any
property or personal advantage which that person is not
authorized by law to accept. Any persons promising or
tendering such property or personal advantage shall be
disqualified from holding any class of driver's license or
permit for 120 consecutive days. The Secretary of State
shall establish by rule the procedures for implementing
this period of disqualification and the procedures by which
persons so disqualified may obtain administrative review
of the decision to disqualify;
17. To any person for whom the Secretary of State
cannot verify the accuracy of any information or
documentation submitted in application for a driver's
license; or
18. To any person who has been adjudicated under the
Juvenile Court Act of 1987 based upon an offense that is
determined by the court to have been committed in
furtherance of the criminal activities of an organized
gang, as provided in Section 5-710 of that Act, and that
involved the operation or use of a motor vehicle or the use
of a driver's license or permit. The person shall be denied
a license or permit for the period determined by the court.
The Secretary of State shall retain all conviction

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information, if the information is required to be held
confidential under the Juvenile Court Act of 1987.
(Source: P.A. 96-607, eff. 8-24-09; 96-740, eff. 1-1-10;
96-962, eff. 7-2-10; 96-1000, eff. 7-2-10; 97-185, eff.
7-22-11.)
Section 30. The Prevailing Wage Act is amended by changing
Section 2 and by adding Section 11c as follows:
(820 ILCS 130/2) (from Ch. 48, par. 39s-2)
Sec. 2. This Act applies to the wages of laborers,
mechanics and other workers employed in any public works, as
hereinafter defined, by any public body and to anyone under
contracts for public works. This includes any maintenance,
repair, assembly, or disassembly work performed on equipment
whether owned, leased, or rented.
As used in this Act, unless the context indicates
otherwise:
"Public works" means all fixed works constructed or
demolished by any public body, or paid for wholly or in part
out of public funds. "Public works" as defined herein includes
all projects financed in whole or in part with bonds, grants,
loans, or other funds made available by or through the State or
any of its political subdivisions, including but not limited
to: bonds issued under the Industrial Project Revenue Bond Act
(Article 11, Division 74 of the Illinois Municipal Code), the

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Industrial Building Revenue Bond Act, the Illinois Finance
Authority Act, the Illinois Sports Facilities Authority Act, or
the Build Illinois Bond Act; loans or other funds made
available pursuant to the Build Illinois Act; or funds from the
Fund for Illinois' Future under Section 6z-47 of the State
Finance Act, funds for school construction under Section 5 of
the General Obligation Bond Act, funds authorized under Section
3 of the School Construction Bond Act, funds for school
infrastructure under Section 6z-45 of the State Finance Act,
and funds for transportation purposes under Section 4 of the
General Obligation Bond Act. "Public works" also includes (i)
all projects financed in whole or in part with funds from the
Department of Commerce and Economic Opportunity under the
Illinois Renewable Fuels Development Program Act for which
there is no project labor agreement; (ii) all work performed
pursuant to a public private agreement under the Public Private
Agreements for the Illiana Expressway Act; and (iii) all
projects undertaken under a public-private agreement under the
Public-Private Partnerships for Transportation Act. "Public
works" also includes all projects at leased facility property
used for airport purposes under Section 35 of the Local
Government Facility Lease Act. "Public works" also includes the
construction of a new wind power facility by a business
designated as a High Impact Business under Section 5.5(a)(3)(E)
of the Illinois Enterprise Zone Act. "Public works" does not
include work done directly by any public utility company,

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whether or not done under public supervision or direction, or
paid for wholly or in part out of public funds. "Public works"
does not include projects undertaken by the owner at an
owner-occupied single-family residence or at an owner-occupied
unit of a multi-family residence.
"School construction project" means the acquisition,
development, construction, reconstruction, rehabilitation,
improvement, architectural planning, and installation of
capital facilities consisting of buildings, structures,
durable equipment, and land for educational purposes.
"Construction" means all work on public works involving
laborers, workers or mechanics. This includes any maintenance,
repair, assembly, or disassembly work performed on equipment
whether owned, leased, or rented.
"Locality" means the county where the physical work upon
public works is performed, except (1) that if there is not
available in the county a sufficient number of competent
skilled laborers, workers and mechanics to construct the public
works efficiently and properly, "locality" includes any other
county nearest the one in which the work or construction is to
be performed and from which such persons may be obtained in
sufficient numbers to perform the work and (2) that, with
respect to contracts for highway work with the Department of
Transportation of this State, "locality" may at the discretion
of the Secretary of the Department of Transportation be
construed to include two or more adjacent counties from which

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workers may be accessible for work on such construction.
"Public body" means the State or any officer, board or
commission of the State or any political subdivision or
department thereof, or any institution supported in whole or in
part by public funds, and includes every county, city, town,
village, township, school district, irrigation, utility,
reclamation improvement or other district and every other
political subdivision, district or municipality of the state
whether such political subdivision, municipality or district
operates under a special charter or not.
The terms "general prevailing rate of hourly wages",
"general prevailing rate of wages" or "prevailing rate of
wages" when used in this Act mean the hourly cash wages plus
fringe benefits for training and apprenticeship programs
approved by the U.S. Department of Labor, Bureau of
Apprenticeship and Training, health and welfare, insurance,
vacations and pensions paid generally, in the locality in which
the work is being performed, to employees engaged in work of a
similar character on public works.
(Source: P.A. 96-28, eff. 7-1-09; 96-58, eff. 1-1-10; 96-186,
eff. 1-1-10; 96-913, eff. 6-9-10; 96-1000, eff. 7-2-10; 97-502,
eff. 8-23-11.)
(820 ILCS 130/11c new)
Sec. 11c. School district exemption.
By passage of a resolution, the board of education of any

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school district may exempt all school construction projects
undertaken in the district from the requirements of this Act.
Section 90. The State Mandates Act is amended by adding
Section 8.36 as follows:
(30 ILCS 805/8.36 new)
Sec. 8.36. 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 97th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.
SB3932 - 193 - LRB097 22549 JDS 71324 b
INDEX
Statutes amended in order of appearance
5 ILCS 315/15 from Ch. 48, par. 1615
30 ILCS 571/10
30 ILCS 571/15
30 ILCS 571/17 new
40 ILCS 5/1-160
40 ILCS 5/2-103.1 new
40 ILCS 5/2-103.2 new
40 ILCS 5/2-105.1 new
40 ILCS 5/2-108 from Ch. 108 1/2, par. 2-108
40 ILCS 5/2-119 from Ch. 108 1/2, par. 2-119
40 ILCS 5/2-119.1 from Ch. 108 1/2, par. 2-119.1
40 ILCS 5/2-126.2 new
40 ILCS 5/7-109 from Ch. 108 1/2, par. 7-109
40 ILCS 5/14-103.10 from Ch. 108 1/2, par. 14-103.10
40 ILCS 5/14-103.40 new
40 ILCS 5/14-103.41 new
40 ILCS 5/14-103.42 new
40 ILCS 5/14-103.43 new
40 ILCS 5/14-106.5 new
40 ILCS 5/14-107 from Ch. 108 1/2, par. 14-107
40 ILCS 5/14-110 from Ch. 108 1/2, par. 14-110
40 ILCS 5/14-114 from Ch. 108 1/2, par. 14-114
40 ILCS 5/14-133.2 new
SB3932 - 194 - LRB097 22549 JDS 71324 b
40 ILCS 5/15-103.1
40 ILCS 5/15-103.2
40 ILCS 5/15-107 from Ch. 108 1/2, par. 15-107
40 ILCS 5/15-107.1 new
40 ILCS 5/15-111 from Ch. 108 1/2, par. 15-111
40 ILCS 5/15-134.5
40 ILCS 5/15-134.6 new
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 5/15-158.2
40 ILCS 5/16-104.1 new
40 ILCS 5/16-104.2 new
40 ILCS 5/16-106 from Ch. 108 1/2, par. 16-106
40 ILCS 5/16-106.4 new
40 ILCS 5/16-121 from Ch. 108 1/2, par. 16-121
40 ILCS 5/16-131.7 new
40 ILCS 5/16-132 from Ch. 108 1/2, par. 16-132
40 ILCS 5/16-133.1 from Ch. 108 1/2, par. 16-133.1
40 ILCS 5/16-152.1 from Ch. 108 1/2, par. 16-152.1
40 ILCS 5/16-158 from Ch. 108 1/2, par. 16-158
40 ILCS 5/16-158.2 new
40 ILCS 5/18-105.1 new
40 ILCS 5/18-105.2 new
40 ILCS 5/18-108.1 new
40 ILCS 5/18-111 from Ch. 108 1/2, par. 18-111
40 ILCS 5/18-123.3 new
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