| ||||
| Public Act 100-0340 | ||||
| ||||
| ||||
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 | ||||
Section 16-158 as follows:
| ||||
(40 ILCS 5/16-158)
(from Ch. 108 1/2, par. 16-158)
| ||||
(Text of Section WITHOUT the changes made by P.A. 98-599, | ||||
which has been held unconstitutional)
| ||||
Sec. 16-158. Contributions by State and other employing | ||||
units.
| ||||
(a) The State shall make contributions to the System by | ||||
means of
appropriations from the Common School Fund and other | ||||
State funds of amounts
which, together with other employer | ||||
contributions, employee contributions,
investment income, and | ||||
other income, will be sufficient to meet the cost of
| ||||
maintaining and administering the System on a 90% funded basis | ||||
in accordance
with actuarial recommendations.
| ||||
The Board shall determine the amount of State contributions | ||||
required for
each fiscal year on the basis of the actuarial | ||||
tables and other assumptions
adopted by the Board and the | ||||
recommendations of the actuary, using the formula
in subsection | ||||
(b-3).
| ||||
(a-1) Annually, on or before November 15 until November 15, | ||||
2011, the Board shall certify to the
Governor the amount of the | ||
required State contribution for the coming fiscal
year. The | ||
certification under this subsection (a-1) shall include a copy | ||
of the actuarial recommendations
upon which it is based and | ||
shall specifically identify the System's projected State | ||
normal cost for that fiscal year.
| ||
On or before May 1, 2004, the Board shall recalculate and | ||
recertify to
the Governor the amount of the required State | ||
contribution to the System for
State fiscal year 2005, taking | ||
into account the amounts appropriated to and
received by the | ||
System under subsection (d) of Section 7.2 of the General
| ||
Obligation Bond Act.
| ||
On or before July 1, 2005, the Board shall recalculate and | ||
recertify
to the Governor the amount of the required State
| ||
contribution to the System for State fiscal year 2006, taking | ||
into account the changes in required State contributions made | ||
by this amendatory Act of the 94th General Assembly.
| ||
On or before April 1, 2011, the Board shall recalculate and | ||
recertify to the Governor the amount of the required State | ||
contribution to the System for State fiscal year 2011, applying | ||
the changes made by Public Act 96-889 to the System's assets | ||
and liabilities as of June 30, 2009 as though Public Act 96-889 | ||
was approved on that date. | ||
(a-5) On or before November 1 of each year, beginning | ||
November 1, 2012, the Board shall submit to the State Actuary, | ||
the Governor, and the General Assembly a proposed certification | ||
of the amount of the required State contribution to the System | ||
for the next fiscal year, along with all of the actuarial | ||
assumptions, calculations, and data upon which that proposed | ||
certification is based. On or before January 1 of each year, | ||
beginning January 1, 2013, the State Actuary shall issue a | ||
preliminary report concerning the proposed certification and | ||
identifying, if necessary, recommended changes in actuarial | ||
assumptions that the Board must consider before finalizing its | ||
certification of the required State contributions. On or before | ||
January 15, 2013 and each January 15 thereafter, the Board | ||
shall certify to the Governor and the General Assembly the | ||
amount of the required State contribution for the next fiscal | ||
year. The Board's certification must note any deviations from | ||
the State Actuary's recommended changes, the reason or reasons | ||
for not following the State Actuary's recommended changes, and | ||
the fiscal impact of not following the State Actuary's | ||
recommended changes on the required State contribution. | ||
(b) Through State fiscal year 1995, the State contributions | ||
shall be
paid to the System in accordance with Section 18-7 of | ||
the School Code.
| ||
(b-1) Beginning in State fiscal year 1996, on the 15th day | ||
of each month,
or as soon thereafter as may be practicable, the | ||
Board shall submit vouchers
for payment of State contributions | ||
to the System, in a total monthly amount of
one-twelfth of the | ||
required annual State contribution certified under
subsection | ||
(a-1).
From 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
| ||
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.
| ||
For each of State fiscal years 2008 through 2009, the State | ||
contribution to
the System, as a percentage of the applicable | ||
employee payroll, shall be
increased in equal annual increments | ||
from the required State contribution for State fiscal year | ||
2007, so that by State fiscal year 2011, the
State is | ||
contributing at the rate otherwise required under this Section.
| ||
Notwithstanding any other provision of this Article, the | ||
total required State contribution for State fiscal year 2010 is | ||
$2,089,268,000 and shall be made from the proceeds of bonds | ||
sold in fiscal year 2010 pursuant to Section 7.2 of the General | ||
Obligation Bond Act, less (i) the pro rata share of bond sale | ||
expenses determined by the System's share of total bond | ||
proceeds, (ii) any amounts received from the Common School Fund | ||
in fiscal year 2010, and (iii) any reduction in bond proceeds | ||
due to the issuance of discounted bonds, if applicable. | ||
Notwithstanding any other provision of this Article, the
| ||
total required State contribution for State fiscal year 2011 is
| ||
the amount recertified by the System on or before April 1, 2011 | ||
pursuant to subsection (a-1) of this Section and shall be made | ||
from the proceeds of bonds
sold in fiscal year 2011 pursuant to | ||
Section 7.2 of the General
Obligation Bond Act, less (i) the | ||
pro rata share of bond sale
expenses determined by the System's | ||
share of total bond
proceeds, (ii) any amounts received from | ||
the Common School Fund
in fiscal year 2011, and (iii) any | ||
reduction in bond proceeds
due to the issuance of discounted | ||
bonds, if applicable. This amount shall include, in addition to | ||
the amount certified by the System, an amount necessary to meet | ||
employer contributions required by the State as an employer | ||
under paragraph (e) of this Section, which may also be used by | ||
the System for contributions required by paragraph (a) of | ||
Section 16-127. | ||
Beginning in State fiscal year 2046, the minimum State | ||
contribution for
each fiscal year shall be the amount needed to | ||
maintain the total assets of
the System at 90% of the total | ||
actuarial liabilities of the System.
| ||
Amounts received by the System pursuant to Section 25 of | ||
the Budget Stabilization Act or Section 8.12 of the State | ||
Finance Act in any fiscal year do not reduce and do not | ||
constitute payment of any portion of the minimum State | ||
contribution required under this Article in that fiscal year. | ||
Such amounts shall not reduce, and shall not be included in the | ||
calculation of, the required State contributions under this | ||
Article in any future year until the System has reached a | ||
funding ratio of at least 90%. A reference in this Article to | ||
the "required State contribution" or any substantially similar | ||
term does not include or apply to any amounts payable to the | ||
System under Section 25 of the Budget Stabilization Act. | ||
Notwithstanding any other provision of this Section, the | ||
required State
contribution for State fiscal year 2005 and for | ||
fiscal year 2008 and each fiscal year thereafter, as
calculated | ||
under this Section and
certified under subsection (a-1), shall | ||
not exceed an amount equal to (i) the
amount of the required | ||
State contribution that would have been calculated under
this | ||
Section for that fiscal year if the System had not received any | ||
payments
under subsection (d) of Section 7.2 of the General | ||
Obligation Bond Act, minus
(ii) the portion of the State's | ||
total debt service payments for that fiscal
year on the bonds | ||
issued in fiscal year 2003 for the purposes of that Section | ||
7.2, as determined
and certified by the Comptroller, that is | ||
the same as the System's portion of
the total moneys | ||
distributed under subsection (d) of Section 7.2 of the General
| ||
Obligation Bond Act. In determining this maximum for State | ||
fiscal years 2008 through 2010, however, the amount referred to | ||
in item (i) shall be increased, as a percentage of the | ||
applicable employee payroll, in equal increments calculated | ||
from the sum of the required State contribution for State | ||
fiscal year 2007 plus the applicable portion of the State's | ||
total debt service payments for fiscal year 2007 on the bonds | ||
issued in fiscal year 2003 for the purposes of Section 7.2 of | ||
the General
Obligation Bond Act, so that, by State fiscal year | ||
2011, the
State is contributing at the rate otherwise required | ||
under this Section.
| ||
(c) Payment of the required State contributions and of all | ||
pensions,
retirement annuities, death benefits, refunds, and | ||
other benefits granted
under or assumed by this System, and all | ||
expenses in connection with the
administration and operation | ||
thereof, are obligations of the State.
| ||
If members are paid from special trust or federal funds | ||
which are
administered by the employing unit, whether school | ||
district or other
unit, the employing unit shall pay to the | ||
System from such
funds the full accruing retirement costs based | ||
upon that
service, which, beginning July 1, 2017 2014, shall be | ||
at a rate, expressed as a percentage of salary, equal to the | ||
total employer's minimum contribution
to the System to be made | ||
by the State for that fiscal year, including both normal cost | ||
and unfunded liability components, expressed as a percentage of | ||
payroll, as determined by the System under subsection (b-3) of | ||
this Section. Employer contributions, based on
salary paid to | ||
members from federal funds, may be forwarded by the | ||
distributing
agency of the State of Illinois to the System | ||
prior to allocation, in an
amount determined in accordance with | ||
guidelines established by such
agency and the System. Any | ||
contribution for fiscal year 2015 collected as a result of the | ||
change made by this amendatory Act of the 98th General Assembly | ||
shall be considered a State contribution under subsection (b-3) | ||
of this Section.
| ||
(d) Effective July 1, 1986, any employer of a teacher as | ||
defined in
paragraph (8) of Section 16-106 shall pay the | ||
employer's normal cost
of benefits based upon the teacher's | ||
service, in addition to
employee contributions, as determined | ||
by the System. Such employer
contributions shall be forwarded | ||
monthly in accordance with guidelines
established by the | ||
System.
| ||
However, with respect to benefits granted under Section | ||
16-133.4 or
16-133.5 to a teacher as defined in paragraph (8) | ||
of Section 16-106, the
employer's contribution shall be 12% | ||
(rather than 20%) of the member's
highest annual salary rate | ||
for each year of creditable service granted, and
the employer | ||
shall also pay the required employee contribution on behalf of
| ||
the teacher. For the purposes of Sections 16-133.4 and | ||
16-133.5, a teacher
as defined in paragraph (8) of Section | ||
16-106 who is serving in that capacity
while on leave of | ||
absence from another employer under this Article shall not
be | ||
considered an employee of the employer from which the teacher | ||
is on leave.
| ||
(e) Beginning July 1, 1998, every employer of a teacher
| ||
shall pay to the System an employer contribution computed as | ||
follows:
| ||
(1) Beginning July 1, 1998 through June 30, 1999, the | ||
employer
contribution shall be equal to 0.3% of each | ||
teacher's salary.
| ||
(2) Beginning July 1, 1999 and thereafter, the employer
| ||
contribution shall be equal to 0.58% of each teacher's | ||
salary.
| ||
The school district or other employing unit may pay these | ||
employer
contributions out of any source of funding available | ||
for that purpose and
shall forward the contributions to the | ||
System on the schedule established
for the payment of member | ||
contributions.
| ||
These employer contributions are intended to offset a | ||
portion of the cost
to the System of the increases in | ||
retirement benefits resulting from 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 | ||
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 | ||
Assembly apply without regard to whether the teacher was in | ||
service on or after its effective date.
| ||
Whenever it determines that a payment is or may be required | ||
under this subsection, the System shall calculate the amount of | ||
the payment and bill the employer for that amount. The bill | ||
shall specify the calculations used to determine the amount | ||
due. If the employer disputes the amount of the bill, it may, | ||
within 30 days after receipt of the bill, apply to the System | ||
in writing for a recalculation. The application must specify in | ||
detail the grounds of the dispute and, if the employer asserts | ||
that the calculation is subject to subsection (g) or (h) of | ||
this Section, must include an affidavit setting forth and | ||
attesting to all facts within the employer's knowledge that are | ||
pertinent to the applicability of that subsection. Upon | ||
receiving a timely application for recalculation, the System | ||
shall review the application and, if appropriate, recalculate | ||
the amount due.
| ||
The employer contributions required under this subsection | ||
(f) may be paid in the form of a lump sum within 90 days after | ||
receipt of the bill. If the employer contributions are not paid | ||
within 90 days after receipt of the bill, then interest will be | ||
charged at a rate equal to the System's annual actuarially | ||
assumed rate of return on investment compounded annually from | ||
the 91st day after receipt of the bill. Payments must be | ||
concluded within 3 years after the employer's receipt of the | ||
bill.
| ||
(g) This subsection (g) applies only to payments made or | ||
salary increases given on or after June 1, 2005 but before July | ||
1, 2011. The changes made by Public Act 94-1057 shall not | ||
require the System to refund any payments received before
July | ||
31, 2006 (the effective date of Public Act 94-1057). | ||
When assessing payment for any amount due under subsection | ||
(f), the System shall exclude salary increases paid to teachers | ||
under contracts or collective bargaining agreements entered | ||
into, amended, or renewed before June 1, 2005.
| ||
When assessing payment for any amount due under subsection | ||
(f), the System shall exclude salary increases paid to a | ||
teacher at a time when the teacher is 10 or more years from | ||
retirement eligibility under Section 16-132 or 16-133.2.
| ||
When assessing payment for any amount due under subsection | ||
(f), the System shall exclude salary increases resulting from | ||
overload work, including summer school, when the school | ||
district has certified to the System, and the System has | ||
approved the certification, that (i) the overload work is for | ||
the sole purpose of classroom instruction in excess of the | ||
standard number of classes for a full-time teacher in a school | ||
district during a school year and (ii) the salary increases are | ||
equal to or less than the rate of pay for classroom instruction | ||
computed on the teacher's current salary and work schedule.
| ||
When assessing payment for any amount due under subsection | ||
(f), the System shall exclude a salary increase resulting from | ||
a promotion (i) for which the employee is required to hold a | ||
certificate or supervisory endorsement issued by the State | ||
Teacher Certification Board that is a different certification | ||
or supervisory endorsement than is required for the teacher's | ||
previous position and (ii) to a position that has existed and | ||
been filled by a member for no less than one complete academic | ||
year and the salary increase from the promotion is an increase | ||
that results in an amount no greater than the lesser of the | ||
average salary paid for other similar positions in the district | ||
requiring the same certification or the amount stipulated in | ||
the collective bargaining agreement for a similar position | ||
requiring the same certification.
| ||
When assessing payment for any amount due under subsection | ||
(f), the System shall exclude any payment to the teacher from | ||
the State of Illinois or the State Board of Education over | ||
which the employer does not have discretion, notwithstanding | ||
that the payment is included in the computation of final | ||
average salary.
| ||
(h) When assessing payment for any amount due under | ||
subsection (f), the System shall exclude any salary increase | ||
described in subsection (g) of this Section given on or after | ||
July 1, 2011 but before July 1, 2014 under a contract or | ||
collective bargaining agreement entered into, amended, or | ||
renewed on or after June 1, 2005 but before July 1, 2011. | ||
Notwithstanding any other provision of this Section, any | ||
payments made or salary increases given after June 30, 2014 | ||
shall be used in assessing payment for any amount due under | ||
subsection (f) of this Section.
| ||
(i) The System shall prepare a report and file copies of | ||
the report with the Governor and the General Assembly by | ||
January 1, 2007 that contains all of the following information: | ||
(1) The number of recalculations required by the | ||
changes made to this Section by Public Act 94-1057 for each | ||
employer. | ||
(2) The dollar amount by which each employer's | ||
contribution to the System was changed due to | ||
recalculations required by Public Act 94-1057. | ||
(3) The total amount the System received from each | ||
employer as a result of the changes made to this Section by | ||
Public Act 94-4. | ||
(4) The increase in the required State contribution | ||
resulting from the changes made to this Section by Public | ||
Act 94-1057.
| ||
(j) For purposes of determining the required State | ||
contribution to the System, the value of the System's assets | ||
shall be equal to the actuarial value of the System's assets, | ||
which shall be calculated as follows: | ||
As of June 30, 2008, the actuarial value of the System's | ||
assets shall be equal to the market value of the assets as of | ||
that date. In determining the actuarial value of the System's | ||
assets for fiscal years after June 30, 2008, any actuarial | ||
gains or losses from investment return incurred in a fiscal | ||
year shall be recognized in equal annual amounts over the | ||
5-year period following that fiscal year. | ||
(k) For purposes of determining the required State | ||
contribution to the system for a particular year, the actuarial | ||
value of assets shall be assumed to earn a rate of return equal | ||
to the system's actuarially assumed rate of return. | ||
(Source: P.A. 96-43, eff. 7-15-09; 96-1497, eff. 1-14-11; | ||
96-1511, eff. 1-27-11; 96-1554, eff. 3-18-11; 97-694, eff. | ||
6-18-12; 97-813, eff. 7-13-12; 98-674, eff. 6-30-14.)
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law. | ||