Public Act 098-1164
 
SB2933 EnrolledLRB098 19649 RPM 54852 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 22-101B as follows:
 
    (40 ILCS 5/22-101B)

    Sec. 22-101B. Health Care Benefits.
    (a) The Chicago Transit Authority (hereinafter referred to 
in this Section as the "Authority") shall take all actions 
lawfully available to it to separate the funding of health care 
benefits for retirees and their dependents and survivors from 
the funding for its retirement system.  The Authority shall 
endeavor to achieve this separation as soon as possible, and in 
any event no later than July 1, 2009.
    (b) Effective 90 days after the effective date of this 
amendatory Act of the 95th General Assembly, a Retiree Health 
Care Trust is established for the purpose of providing health 
care benefits to eligible retirees and their dependents and 
survivors in accordance with the terms and conditions set forth 
in this Section 22-101B.  The Retiree Health Care Trust shall be 
solely responsible for providing health care benefits to 
eligible retirees and their dependents and survivors upon the 
exhaustion of the account established by the Retirement Plan 
for Chicago Transit Authority Employees pursuant to Section 
401(h) of the Internal Revenue Code of 1986, but no earlier 
than January 1, 2009 and no later than July 1, 2009.

        (1) The Board of Trustees shall consist of 7 members 
    appointed as follows: (i)  3 trustees shall be appointed by 
    the Chicago Transit Board; (ii) one trustee shall be 
    appointed by an organization representing the highest 
    number of Chicago Transit Authority participants; (iii) 
    one trustee shall be appointed by an organization 
    representing the second-highest number of Chicago Transit 
    Authority participants; (iv) one trustee shall be 
    appointed by the recognized coalition representatives of 
    participants who are not represented by an organization 
    with the highest or second-highest number of Chicago 
    Transit Authority participants; and (v) one trustee shall 
    be selected by the Regional Transportation Authority Board 
    of Directors, and the trustee shall be a professional 
    fiduciary who has experience in the area of collectively 
    bargained retiree health plans.  Trustees shall serve until 
    a successor has been appointed and qualified, or until 
    resignation, death, incapacity, or disqualification.

        Any person appointed as a trustee of the board shall 
    qualify by taking an oath of office that he or she will 
    diligently and honestly administer the affairs of the 
    system, and will not knowingly violate or willfully permit 
    the violation of any of the provisions of law applicable to 
    the Plan, including Sections 1-109, 1-109.1, 1-109.2, 
    1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois 
    Pension Code.

        Each trustee shall cast individual votes, and a 
    majority vote shall be final and binding upon all 
    interested parties, provided that the Board of Trustees may 
    require a supermajority vote with respect to the investment 
    of the assets of the Retiree Health Care Trust, and may set 
    forth that requirement in the trust agreement or by-laws of 
    the Board of Trustees.  Each trustee shall have the rights, 
    privileges, authority and obligations as are usual and 
    customary for such fiduciaries.

        (2) The Board of Trustees shall establish and 
    administer a health care benefit program for eligible 
    retirees and their dependents and survivors.  Any health 
    care benefit program established by the Board of Trustees 
    for eligible retirees and their dependents and survivors 
    effective on or after July 1, 2009 shall not contain any 
    plan which provides for more than 90% coverage for 
    in-network services or 70% coverage for out-of-network 
    services after any deductible has been paid, except that 
    coverage through a health maintenance organization ("HMO") 
    may be provided at 100%.

        (2.5) The Board of Trustees may also establish and 
    administer a health reimbursement arrangement for retirees 
    and for former employees of the Authority or the Retirement 
    Plan, and their  survivors, who have contributed to the 
    Retiree Health Care Trust but do not satisfy the years of 
    service requirement of subdivision (b)(4) and the terms of 
    the retiree health care plan; or for those who do satisfy 
    the requirements of subdivision (b)(4) and the terms of the 
    retiree health care plan but who decline coverage under the 
    plan prior to retirement. Any such health reimbursement 
    arrangement may provide that: the retirees or former 
    employees of the Authority or the Retirement Plan, and 
    their survivors, must have reached age 65 to be eligible to 
    participate in the health reimbursement arrangement; 
    contributions by the retirees or former employees of the 
    Authority or the Retirement Plan to the Retiree Health Care 
    Trust shall be considered assets of the Retiree Health Care 
    Trust only; contributions shall not accrue interest for the 
    benefit of the retiree or former employee of the Authority 
    or the Retirement Plan or survivor; benefits shall be 
    payable in accordance with the Internal Revenue Code of 
    1986; the amounts paid to or on account of the retiree or 
    former employee of the Authority or the Retirement Plan or 
    survivor  shall not exceed the total amount which the 
    retiree or former employee of the Authority or the 
    Retirement Plan contributed to the Retiree Health Care 
    Trust; the Retiree Health Care Trust may charge a 
    reasonable administrative fee for processing the benefits. 
    The Board of Trustees of the Retiree Health Care Trust may 
    establish such rules, limitations and requirements as the 
    Board of Trustees deems appropriate. 
        (3) The Retiree Health Care Trust shall be administered 
    by the Board of Trustees according to the following 
    requirements:

            (i) The Board of Trustees may cause amounts on 
        deposit in the Retiree Health Care Trust to be invested 
        in those investments that are permitted investments 
        for the investment of moneys held under any one or more 
        of the pension or retirement systems of the State, any 
        unit of local government or school district, or any 
        agency or instrumentality thereof. The Board, by a vote 
        of at least two-thirds of the trustees, may transfer 
        investment management to the Illinois State Board of 
        Investment, which is hereby authorized to manage these 
        investments when so requested by the Board of Trustees.

            (ii) The Board of Trustees shall establish and 
        maintain an appropriate funding reserve level which 
        shall not be less than the amount of incurred and 
        unreported claims plus 12 months of expected claims and 
        administrative expenses.

            (iii) The Board of Trustees shall make an annual 
        assessment of the funding levels of the Retiree Health 
        Care Trust and shall submit a report to the Auditor 
        General at least 90 days prior to the end of the fiscal 
        year.  The report shall provide the following:
                (A) the actuarial present value of projected 
            benefits expected to be paid to current and future 
            retirees and their dependents and survivors;
                (B) the actuarial present value of projected 
            contributions and trust income plus assets;
                (C) the reserve required by subsection 
            (b)(3)(ii); and
                (D) an assessment of whether the actuarial 
            present value of projected benefits expected to be 
            paid to current and future retirees and their 
            dependents and survivors exceeds or is less than 
            the actuarial present value of projected 
            contributions and trust income plus assets in 
            excess of the reserve required by subsection 
            (b)(3)(ii).
            If the actuarial present value of projected 
        benefits expected to be paid to current and future 
        retirees and their dependents and survivors exceeds 
        the actuarial present value of projected contributions 
        and trust income plus assets in excess of the reserve 
        required by subsection (b)(3)(ii), then the report 
        shall provide a plan, to be implemented over a period 
        of not more than 10 years from each valuation date, 
        which would make the actuarial present value of 
        projected contributions and trust income plus assets 
        equal to or exceed the actuarial present value of 
        projected benefits expected to be paid to current and 
        future retirees and their dependents and survivors. 
        The plan may consist of increases in employee, retiree, 
        dependent, or survivor contribution levels, decreases 
        in benefit levels, or other plan changes or any 
        combination thereof.  If the actuarial present value of 
        projected benefits expected to be paid to current and 
        future retirees and their dependents and survivors is 
        less than the actuarial present value of projected 
        contributions and trust income plus assets in excess of 
        the reserve required by subsection (b)(3)(ii), then 
        the report may provide a plan of decreases in employee, 
        retiree, dependent, or survivor contribution levels, 
        increases in benefit levels, or other plan changes, or 
        any combination thereof, to the extent of the surplus.
            (iv) The Auditor General shall review the report 
        and plan provided in subsection (b)(3)(iii) and issue a 
        determination within 90 days after receiving the 
        report and plan, with a copy of such determination 
        provided to the General Assembly and the Regional 
        Transportation Authority, as follows:
                (A) In the event of a projected shortfall, if 
            the Auditor General determines that the 
            assumptions stated in the report are not 
            unreasonable in the aggregate and that the plan of 
            increases in employee, retiree, dependent, or 
            survivor contribution levels, decreases in benefit 
            levels, or other plan changes, or any combination 
            thereof, to be implemented over a period of not 
            more than 10 years from each valuation date, is 
            reasonably projected to make the actuarial present 
            value of projected contributions and trust income 
            plus assets equal to or in excess of the actuarial 
            present value of projected benefits expected to be 
            paid to current and future retirees and their 
            dependents and survivors, then the Board of 
            Trustees shall implement the plan.  If the Auditor 
            General determines that the assumptions stated in 
            the report are unreasonable in the aggregate, or 
            that the plan of increases in employee, retiree, 
            dependent, or survivor contribution levels, 
            decreases in benefit levels, or other plan changes 
            to be implemented over a period of not more than 10 
            years from each valuation date, is not reasonably 
            projected to make the actuarial present value of 
            projected contributions and trust income plus 
            assets equal to or in excess of the actuarial 
            present value of projected benefits expected to be 
            paid to current and future retirees and their 
            dependents and survivors, then the Board of 
            Trustees shall not implement the plan, the Auditor 
            General shall explain the basis for such 
            determination to the Board of Trustees, and the 
            Auditor General may make recommendations as to an 
            alternative report and plan.
                (B) In the event of a projected surplus, if the 
            Auditor General determines that the assumptions 
            stated in the report are not unreasonable in the 
            aggregate and that the plan of decreases in 
            employee, retiree, dependent, or survivor 
            contribution levels, increases in benefit levels, 
            or both, is not unreasonable in the aggregate, then 
            the Board of Trustees shall implement the plan.  If 
            the Auditor General determines that the 
            assumptions stated in the report are unreasonable 
            in the aggregate, or that the plan of decreases in 
            employee, retiree, dependent, or survivor 
            contribution levels, increases in benefit levels, 
            or both, is unreasonable in the aggregate, then the 
            Board of Trustees shall not implement the plan, the 
            Auditor General shall explain the basis for such 
            determination to the Board of Trustees, and the 
            Auditor General may make recommendations as to an 
            alternative report and plan.
                (C) The Board of Trustees shall submit an 
            alternative report and plan within 45 days after 
            receiving a rejection determination by the Auditor 
            General.  A determination by the Auditor General on 
            any alternative report and plan submitted by the 
            Board of Trustees shall be made within 90 days 
            after receiving the alternative report and plan, 
            and shall be accepted or rejected according to the 
            requirements of this subsection (b)(3)(iv).  The 
            Board of Trustees shall continue to submit 
            alternative reports and plans to the Auditor 
            General, as necessary, until a favorable 
            determination is made by the Auditor General.

        (4) For any retiree who first retires effective on or 
    after January 18, 2008, to be eligible for retiree health 
    care benefits upon retirement, the retiree must be at least 
    55 years of age, retire with 10 or more years of continuous 
    service and satisfy the preconditions established by 
    Public Act 95-708 in addition to any rules or regulations 
    promulgated by the Board of Trustees. Notwithstanding the 
    foregoing, any retiree hired on or before September 5, 2001 
    who retires with 25 years or more of continuous service 
    shall be eligible for retiree health care benefits upon 
    retirement in accordance with any rules or regulations 
    adopted by the Board of Trustees; provided he or she 
    retires prior to the full execution of the successor 
    collective bargaining agreement to the collective 
    bargaining agreement that became effective January 1, 2007 
    between the Authority and the organizations representing 
    the highest and second-highest number of Chicago Transit 
    Authority participants. This paragraph (4) shall not apply 
    to a disability allowance.

        (5) Effective January 1, 2009, the aggregate amount of 
    retiree, dependent and survivor contributions to the cost 
    of their health care benefits shall not exceed more than 
    45% of the total cost of such benefits.  The Board of 
    Trustees shall have the discretion to provide different 
    contribution levels for retirees, dependents and survivors 
    based on their years of service, level of coverage or 
    Medicare eligibility, provided that the total contribution 
    from all retirees, dependents, and survivors shall be not 
    more than 45% of the total cost of such benefits.  The term 
    "total cost of such benefits" for purposes of this 
    subsection shall be the total amount expended by the 
    retiree health benefit program in the prior plan year, as 
    calculated and certified in writing by the Retiree Health 
    Care Trust's enrolled actuary to be appointed and paid for 
    by the Board of Trustees.

        (6) Effective January 18, 2008, all employees of the 
    Authority shall contribute to the Retiree Health Care Trust 
    in an amount not less than 3% of compensation.
  
        (7) No earlier than January 1, 2009 and no later than 
    July 1, 2009 as the Retiree Health Care Trust becomes 
    solely responsible for providing health care benefits to 
    eligible retirees and their dependents and survivors in 
    accordance with subsection (b) of this Section 22-101B, the 
    Authority shall not have any obligation to provide health 
    care to current or future retirees and their dependents or 
    survivors. Employees, retirees, dependents, and survivors 
    who are required to make contributions to the Retiree 
    Health Care Trust shall make contributions at the level set 
    by the Board of Trustees pursuant to the requirements of 
    this Section 22-101B.


(Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08; 
96-1254, eff. 7-23-10.)