Bill Text: IL SB4000 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Provides that the annual employer contribution shall include an amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2050 (instead of 2040). Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2021-01-13 - Session Sine Die [SB4000 Detail]

Download: Illinois-2019-SB4000-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 SB4000 Introduced 1/4/2021, by Sen. Cristina Castro SYNOPSIS AS INTRODUCED:
40 ILCS 5/3-125 from Ch. 108 1/2, par. 3-125
40 ILCS 5/4-118 from Ch. 108 1/2, par. 4-118
30 ILCS 805/8.44 new
Amends the Downstate Police and Downstate Firefighter Articles of the Illinois Pension Code. Provides that the annual employer contribution shall include an amount sufficient to bring the total assets of the pension fund up to 90% of the total actuarial liabilities of the pension fund by the end of municipal fiscal year 2050 (instead of 2040). Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB101 21585 RPS 72513 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
SB4000 LRB101 21585 RPS 72513 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 3-125 and 4-118 as follows:
(40 ILCS 5/3-125) (from Ch. 108 1/2, par. 3-125)
Sec. 3-125. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of police officers, and revenues
available from other sources, will equal a sum sufficient to
meet the annual requirements of the police pension fund. The
annual requirements to be provided by such tax levy are equal
to (1) the normal cost of the pension fund for the year
involved, plus (2) an amount sufficient to bring the total
assets of the pension fund up to 90% of the total actuarial
liabilities of the pension fund by the end of municipal fiscal
year 2050 2040, as annually updated and determined by an
enrolled actuary employed by the Illinois Department of
Insurance or by an enrolled actuary retained by the pension
fund or the municipality. In making these determinations, the

SB4000 - 2 - LRB101 21585 RPS 72513 b
required minimum employer contribution shall be calculated
each year as a level percentage of payroll over the years
remaining up to and including fiscal year 2050 2040 and shall
be determined under the projected unit credit actuarial cost
method. The tax shall be levied and collected in the same
manner as the general taxes of the municipality, and in
addition to all other taxes now or hereafter authorized to be
levied upon all property within the municipality, and shall be
in addition to the amount authorized to be levied for general
purposes as provided by Section 8-3-1 of the Illinois Municipal
Code, approved May 29, 1961, as amended. The tax shall be
forwarded directly to the treasurer of the board within 30
business days after receipt by the county.
(b) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the System's
assets for fiscal years after March 30, 2011, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(c) If a participating municipality fails to transmit to

SB4000 - 3 - LRB101 21585 RPS 72513 b
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments in accordance with any applicable rules of the
Comptroller, and the Comptroller must, beginning in fiscal year
2016, deduct and remit to the fund the certified amounts or a
portion of those amounts from the following proportions of
payments of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any payments of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount
of any payments of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any payments of State funds
to the municipality.
The State Comptroller may not deduct from any payments of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the
fund.
(d) The police pension fund shall consist of the following
moneys which shall be set apart by the treasurer of the
municipality:
(1) All moneys derived from the taxes levied hereunder;
(2) Contributions by police officers under Section
3-125.1;

SB4000 - 4 - LRB101 21585 RPS 72513 b
(2.5) All moneys received from the Police Officers'
Pension Investment Fund as provided in Article 22B of this
Code;
(3) All moneys accumulated by the municipality under
any previous legislation establishing a fund for the
benefit of disabled or retired police officers;
(4) Donations, gifts or other transfers authorized by
this Article.
(e) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.

SB4000 - 5 - LRB101 21585 RPS 72513 b
(Source: P.A. 101-610, eff. 1-1-20.)
(40 ILCS 5/4-118) (from Ch. 108 1/2, par. 4-118)
Sec. 4-118. Financing.
(a) The city council or the board of trustees of the
municipality shall annually levy a tax upon all the taxable
property of the municipality at the rate on the dollar which
will produce an amount which, when added to the deductions from
the salaries or wages of firefighters and revenues available
from other sources, will equal a sum sufficient to meet the
annual actuarial requirements of the pension fund, as
determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or municipality. For the purposes of this
Section, the annual actuarial requirements of the pension fund
are equal to (1) the normal cost of the pension fund, or 17.5%
of the salaries and wages to be paid to firefighters for the
year involved, whichever is greater, plus (2) an annual amount
sufficient to bring the total assets of the pension fund up to
90% of the total actuarial liabilities of the pension fund by
the end of municipal fiscal year 2050 2040, as annually updated
and determined by an enrolled actuary employed by the Illinois
Department of Insurance or by an enrolled actuary retained by
the pension fund or the municipality. In making these
determinations, the required minimum employer contribution
shall be calculated each year as a level percentage of payroll

SB4000 - 6 - LRB101 21585 RPS 72513 b
over the years remaining up to and including fiscal year 2050
2040 and shall be determined under the projected unit credit
actuarial cost method. The amount to be applied towards the
amortization of the unfunded accrued liability in any year
shall not be less than the annual amount required to amortize
the unfunded accrued liability, including interest, as a level
percentage of payroll over the number of years remaining in the
40 year amortization period.
(a-2) A municipality that has established a pension fund
under this Article and who employs a full-time firefighter, as
defined in Section 4-106, shall be deemed a primary employer
with respect to that full-time firefighter. Any municipality of
5,000 or more inhabitants that employs or enrolls a firefighter
while that firefighter continues to earn service credit as a
participant in a primary employer's pension fund under this
Article shall be deemed a secondary employer and such employees
shall be deemed to be secondary employee firefighters. To
ensure that the primary employer's pension fund under this
Article is aware of additional liabilities and risks to which
firefighters are exposed when performing work as firefighters
for secondary employers, a secondary employer shall annually
prepare a report accounting for all hours worked by and wages
and salaries paid to the secondary employee firefighters it
receives services from or employs for each fiscal year in which
such firefighters are employed and transmit a certified copy of
that report to the primary employer's pension fund and the

SB4000 - 7 - LRB101 21585 RPS 72513 b
secondary employee firefighter no later than 30 days after the
end of any fiscal year in which wages were paid to the
secondary employee firefighters.
Nothing in this Section shall be construed to allow a
secondary employee to qualify for benefits or creditable
service for employment as a firefighter for a secondary
employer.
(a-5) For purposes of determining the required employer
contribution to a pension fund, the value of the pension fund's
assets shall be equal to the actuarial value of the pension
fund's assets, which shall be calculated as follows:
(1) On March 30, 2011, the actuarial value of a pension
fund's assets shall be equal to the market value of the
assets as of that date.
(2) In determining the actuarial value of the pension
fund's assets for fiscal years after March 30, 2011, any
actuarial gains or losses from investment return incurred
in a fiscal year shall be recognized in equal annual
amounts over the 5-year period following that fiscal year.
(b) The tax shall be levied and collected in the same
manner as the general taxes of the municipality, and shall be
in addition to all other taxes now or hereafter authorized to
be levied upon all property within the municipality, and in
addition to the amount authorized to be levied for general
purposes, under Section 8-3-1 of the Illinois Municipal Code or
under Section 14 of the Fire Protection District Act. The tax

SB4000 - 8 - LRB101 21585 RPS 72513 b
shall be forwarded directly to the treasurer of the board
within 30 business days of receipt by the county (or, in the
case of amounts added to the tax levy under subsection (f),
used by the municipality to pay the employer contributions
required under subsection (b-1) of Section 15-155 of this
Code).
(b-5) If a participating municipality fails to transmit to
the fund contributions required of it under this Article for
more than 90 days after the payment of those contributions is
due, the fund may, after giving notice to the municipality,
certify to the State Comptroller the amounts of the delinquent
payments in accordance with any applicable rules of the
Comptroller, and the Comptroller must, beginning in fiscal year
2016, deduct and remit to the fund the certified amounts or a
portion of those amounts from the following proportions of
payments of State funds to the municipality:
(1) in fiscal year 2016, one-third of the total amount
of any payments of State funds to the municipality;
(2) in fiscal year 2017, two-thirds of the total amount
of any payments of State funds to the municipality; and
(3) in fiscal year 2018 and each fiscal year
thereafter, the total amount of any payments of State funds
to the municipality.
The State Comptroller may not deduct from any payments of
State funds to the municipality more than the amount of
delinquent payments certified to the State Comptroller by the

SB4000 - 9 - LRB101 21585 RPS 72513 b
fund.
(c) The board shall make available to the membership and
the general public for inspection and copying at reasonable
times the most recent Actuarial Valuation Balance Sheet and Tax
Levy Requirement issued to the fund by the Department of
Insurance.
(d) The firefighters' pension fund shall consist of the
following moneys which shall be set apart by the treasurer of
the municipality: (1) all moneys derived from the taxes levied
hereunder; (2) contributions by firefighters as provided under
Section 4-118.1; (2.5) all moneys received from the
Firefighters' Pension Investment Fund as provided in Article
22C of this Code; (3) all rewards in money, fees, gifts, and
emoluments that may be paid or given for or on account of
extraordinary service by the fire department or any member
thereof, except when allowed to be retained by competitive
awards; and (4) any money, real estate or personal property
received by the board.
(e) For the purposes of this Section, "enrolled actuary"
means an actuary: (1) who is a member of the Society of
Actuaries or the American Academy of Actuaries; and (2) who is
enrolled under Subtitle C of Title III of the Employee
Retirement Income Security Act of 1974, or who has been engaged
in providing actuarial services to one or more public
retirement systems for a period of at least 3 years as of July
1, 1983.

SB4000 - 10 - LRB101 21585 RPS 72513 b
(f) The corporate authorities of a municipality that
employs a person who is described in subdivision (d) of Section
4-106 may add to the tax levy otherwise provided for in this
Section an amount equal to the projected cost of the employer
contributions required to be paid by the municipality to the
State Universities Retirement System under subsection (b-1) of
Section 15-155 of this Code.
(g) The Commission on Government Forecasting and
Accountability shall conduct a study of all funds established
under this Article and shall report its findings to the General
Assembly on or before January 1, 2013. To the fullest extent
possible, the study shall include, but not be limited to, the
following:
(1) fund balances;
(2) historical employer contribution rates for each
fund;
(3) the actuarial formulas used as a basis for employer
contributions, including the actual assumed rate of return
for each year, for each fund;
(4) available contribution funding sources;
(5) the impact of any revenue limitations caused by
PTELL and employer home rule or non-home rule status; and
(6) existing statutory funding compliance procedures
and funding enforcement mechanisms for all municipal
pension funds.
(Source: P.A. 101-522, eff. 8-23-19; 101-610, eff. 1-1-20.)

SB4000 - 11 - LRB101 21585 RPS 72513 b
Section 90. The State Mandates Act is amended by adding
Section 8.44 as follows:
(30 ILCS 805/8.44 new)
Sec. 8.44. 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 101st General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.