Public Act 096-0297
 		





HB3656 Enrolled
LRB096 11614 AMC 22140 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 
Section 3-110 as follows:
 



    (40 ILCS 5/3-110)  (from Ch. 108 1/2, par. 3-110)


    Sec. 3-110. Creditable service. 

    (a) "Creditable service" is the time served by a police 
officer as a member
of a regularly constituted police force of 
a municipality.  In computing
creditable service furloughs 
without pay exceeding 30 days shall not be
counted, but all 
leaves of absence for illness or accident, regardless of

length, and all periods of disability retirement for which a 
police officer has
received no disability pension payments 
under this Article shall be counted.

    (a-5) Up to 3 years of time during which the police officer 
receives
a disability pension under Section 3-114.1, 3-114.2, 
3-114.3, or 3-114.6
shall be counted as creditable service, 
provided that
(i) the police officer returns to active service 
after the disability for a
period at least equal to the period 
for which credit is to be established and
(ii) the police 
officer makes contributions to the fund based on the rates

specified in Section 3-125.1 and the salary upon which the 
disability pension
is based.  These contributions may be paid at 
any time prior to the
commencement of a retirement pension.  The 
police officer may, but need not,
elect to have the 
contributions deducted from the disability pension or to
pay 
them in installments on a schedule approved by the board.  If 
not
deducted from the disability pension, the contributions 
shall include
interest at the rate of 6% per year, compounded 
annually, from the date
for which service credit is being 
established to the date of payment.  If
contributions are paid 
under this subsection (a-5) in excess of those
needed to 
establish the credit, the excess shall be refunded.  This

subsection (a-5) applies to persons receiving a disability 
pension under
Section 3-114.1, 3-114.2, 3-114.3, or 3-114.6 on 
the effective date of this
amendatory Act of the 91st General 
Assembly, as well as persons who begin to
receive such a 
disability pension after that date.

    (b) Creditable service includes all periods of service in 
the military,
naval or air forces of the United States entered 
upon while an active police
officer of a municipality, provided 
that upon applying for a permanent pension,
and in accordance 
with the rules of the board, the police officer pays into the

fund the amount the officer would have contributed if he or she 
had been a
regular contributor during such period, to the 
extent that the municipality
which the police officer served 
has not made such contributions in the
officer's behalf.  The 
total amount of such creditable service shall not
exceed 5 
years, except that any police officer who on July 1, 1973 had 
more
than 5 years of such creditable service shall receive the 
total amount thereof.

    (c) Creditable service also includes service rendered by a 
police
officer while on leave of absence from a police 
department to serve as an
executive of an organization whose 
membership consists of members of a
police department, subject 
to the following conditions:  (i) the police
officer is a 
participant of a fund established under this Article with at

least 10 years of service as a police officer; (ii) the police 
officer
received no credit for such service under any other 
retirement system,
pension fund, or annuity and benefit fund 
included in this Code; (iii)
pursuant to the rules of the board 
the police officer pays to the fund the
amount he or she would 
have contributed had the officer been an active
member of the 
police department; and (iv) the organization pays a

contribution equal to the municipality's normal cost for that

period of service.


        (d)(1) Creditable service also includes periods of 
    service originally
established in another police pension 
    fund under this Article or in the Fund
established under 
    Article 7 of this Code for which (i) the contributions have

    been transferred under Section 3-110.7 or Section 7-139.9 
    and (ii) any
additional contribution required under 
    paragraph (2) of this subsection has
been paid in full in 
    accordance with the requirements of this subsection (d).


        (2) If the board of the pension fund to which 
    creditable service and
related
contributions are 
    transferred under Section 3-110.7 or 7-139.9 determines 
    that
the amount transferred is less than the true cost to 
    the pension fund of
allowing that creditable service to be 
    established, then in order to establish
that creditable 
    service the police officer must pay to the pension fund, 
    within
the payment period specified in paragraph (3) of 
    this subsection, an additional
contribution equal to the 
    difference, as determined by the board in accordance
with 
    the rules and procedures adopted under paragraph (6) of 
    this subsection. If the board of the pension fund to which 
    creditable service and
related
contributions are 
    transferred under Section 3-110.7 determines that
the 
    amount transferred is less than the true cost to the 
    pension fund of
allowing that creditable service to be 
    established, then the police officer may elect (A) to 
    establish
that creditable service by paying to the pension 
    fund, within
the payment period specified in paragraph (3) 
    of this subsection (d), an additional
contribution equal to 
    the difference, as determined by the board in accordance

    with the rules and procedures adopted under paragraph (6) 
    of this subsection (d) or (B) to have his or her creditable 
    service reduced by an amount equal to the difference 
    between the amount transferred under Section 3-110.7 and 
    the true cost to the pension fund of allowing that 
    creditable service  to be established, as determined by the 
    board in accordance with the rules and procedures adopted 
    under paragraph (6) of this subsection (d).


        (3) Except as provided in paragraph (4), the additional

    contribution that is required or elected under paragraph 
    (2) of this subsection (d) must be paid to the board (i) 
    within 5 years from the date of the
transfer of 
    contributions under Section 3-110.7 or 7-139.9 and (ii) 
    before the
police officer terminates service with the fund.  
    The additional contribution
may be paid in a lump sum or in 
    accordance with a schedule of installment
payments 
    authorized by the board.


        (4) If the police officer dies in service before 
    payment in full has been
made and before the expiration of 
    the 5-year payment period, the surviving
spouse of the 
    officer may elect to pay the unpaid amount on the officer's

    behalf within 6 months after the date of death, in which 
    case the creditable
service shall be granted as though the 
    deceased police officer had paid the
remaining balance on 
    the day before the date of death.


        (5) If the additional contribution that is required or 
    elected under paragraph (2) of this subsection (d) is not 
    paid in full within the
required time, the creditable 
    service shall not be granted and the
police officer (or the 
    officer's surviving spouse or estate) shall be entitled
to 
    receive a refund of (i) any partial payment of the 
    additional contribution
that has been made by the police 
    officer and (ii) those portions of the amounts
transferred 
    under subdivision (a)(1) of Section 3-110.7 or 
    subdivisions (a)(1)
and (a)(3) of Section 7-139.9 that 
    represent employee contributions paid by the
police 
    officer (but not the accumulated interest on those 
    contributions) and
interest paid by the police officer to 
    the prior pension fund in order to
reinstate service 
    terminated by acceptance of a refund.


        At the time of paying a refund under this item (5), the 
    pension fund
shall also repay to the pension fund from 
    which the contributions were
transferred under Section 
    3-110.7 or 7-139.9 the amount originally transferred
under 
    subdivision (a)(2) of that Section, plus interest at the 
    rate of 6% per
year, compounded annually, from the date of 
    the original transfer to the date
of repayment.  Amounts 
    repaid to the Article 7 fund under this provision shall
be 
    credited to the appropriate municipality.


        Transferred credit that is not granted due to failure 
    to pay the additional
contribution within the required time 
    is lost; it may not be transferred to
another pension fund 
    and may not be reinstated in the pension fund from which
it 
    was transferred.


        (6) The Public Employee Pension Fund Division of the 
    Department of
Insurance
shall establish by rule the manner 
    of making the calculation required under
paragraph (2) of 
    this subsection, taking into account the appropriate 
    actuarial
assumptions; the police officer's service, age, 
    and salary history; the level
of funding of the pension 
    fund to which the credits are being transferred; and
any 
    other factors that the Division determines to be relevant.  
    The rules may
require that all calculations made under 
    paragraph (2) be reported to the
Division by the board 
    performing the calculation, together with documentation
of 
    the creditable service to be transferred, the amounts of 
    contributions and
interest to be transferred, the manner in 
    which the calculation was performed,
the numbers relied 
    upon in making the calculation, the results of the

    calculation, and any other information the Division may 
    deem useful.

        (e)(1) Creditable service also includes periods of 
    service originally
established in the Fund
established 
    under Article 7 of this Code for which  the contributions 
    have
been transferred under Section 7-139.11.

        (2) If the board of the pension fund to which 
    creditable service and
related
contributions are 
    transferred under Section 7-139.11 determines that
the 
    amount transferred is less than the true cost to the 
    pension fund of
allowing that creditable service to be 
    established, then the amount of creditable service the 
    police officer may establish under this subsection (e) 
    shall be reduced by an amount equal to the difference, as 
    determined by the board in accordance
with the rules and 
    procedures adopted under paragraph (3) of this subsection.

        (3) The Public Pension Division of the Department of

    Financial and Professional Regulation
shall establish by 
    rule the manner of making the calculation required under

    paragraph (2) of this subsection, taking into account the 
    appropriate actuarial
assumptions; the police officer's 
    service, age, and salary history; the level
of funding of 
    the pension fund to which the credits are being 
    transferred; and
any other factors that the Division 
    determines to be relevant.  The rules may
require that all 
    calculations made under paragraph (2) be reported to the

    Division by the board performing the calculation, together 
    with documentation
of the creditable service to be 
    transferred, the amounts of contributions and
interest to 
    be transferred, the manner in which the calculation was 
    performed,
the numbers relied upon in making the 
    calculation, the results of the
calculation, and any other 
    information the Division may deem useful.

        (4) Until January 1, 2010, a police officer who 
    transferred service from the Fund established under 
    Article 7 of this Code under the provisions of Public Act 
    94-356 may establish additional credit, but only for the 
    amount of the service credit reduction in that transfer, as 
    calculated under paragraph (3) of this subsection (e). This 
    credit may be established upon payment by the police 
    officer of an amount to be determined by the board, equal 
    to (1) the amount that would have been contributed as 
    employee and employer contributions had all of the service 
    been as an employee under this Article, plus interest 
    thereon at the rate of 6% per year, compounded annually 
    from the date of service to the date of transfer, less (2) 
    the total amount transferred from the Article 7 Fund, plus 
    (3) interest on the difference at the rate of 6% per year, 
    compounded annually, from the date of the transfer to the 
    date of payment.  The additional service credit is allowed 
    under this amendatory Act of the 95th General Assembly 
    notwithstanding the provisions of Article 7 terminating 
    all transferred credits on the date of transfer. 
(Source: P.A. 94-356, eff. 7-29-05; 95-812, eff. 8-13-08.)

 
    Section 90. The State Mandates Act is amended by adding 
Section 8.33 as follows:
 
    (30 ILCS 805/8.33 new)
    Sec. 8.33. 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 96th General Assembly.
 

    Section 99. Effective date. This Act takes effect upon 
becoming law.