SB0014 100TH GENERAL ASSEMBLY

LRB100 06410 RPS 16449 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0014

Introduced 1/11/2017, by Sen. John J. Cullerton

SYNOPSIS AS INTRODUCED:

See Index

Amends the Chicago Municipal and Chicago Laborers Articles of the Illinois Pension Code. Makes changes to the retirement age for persons who first become participants on or after the effective date of the amendatory Act. Increases employee contribution for persons who first become participants on or after the effective date of the amendatory Act and makes other changes to the employee contribution rate. Provides that a person who first became a participant on or after January 1, 2011 and before the effective date may elect to be eligible for a reduced retirement age in exchange for an increase in employee contributions. Makes changes to the city's required contribution to each fund beginning in payment year 2018 and makes changes to provisions concerning employer contributions. Authorizes withholding from State grants in the case of nonpayment of the city's required contributions. Makes changes to provisions concerning felony forfeiture. Provides that if there is an injury or death for which death or disability benefits are payable, the fund may subrogate a claim made by that employee against a third party. In the Chicago Municipal Article, makes changes to the definition of "employee" and provides that a person who first becomes a city officer on or after the effective date of the amendatory Act shall not be eligible for the alternative annuity or alternative disability benefits. Makes other changes. Contains inseverability and severability provisions. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

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 1-160, 8-113, 8-173, 8-174, 8-243.2, 8-244, 8-244.1, 8-251, 11-169, 11-170, 11-223.1, and 11-230 and by adding Sections 8-228.5, 11-125.9, and 11-197.7 as follows:

(40 ILCS 5/1-160)

(Text of Section WITHOUT the changes made by P.A. 98-641, which has been held unconstitutional)

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, 15 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. Notwithstanding anything to the contrary in this Section, for purposes of this Section, a person who participated in a retirement system under Article 15 prior to January 1, 2011 shall be deemed a person who first became a member or participant prior to January 1, 2011 under any retirement system or pension fund subject to this Section. The changes made to this Section by Public Act 98-596 this amendatory Act of the 98th General Assembly are a clarification of existing law and are intended to be retroactive to January 1, 2011 (the effective date of Public Act 96-889), notwithstanding the provisions of Section 1-103.1 of this Code.

(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 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 Article 7 (except for service as sheriff's law enforcement employees), "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 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 (beginning January 1, 2015, age 65 with respect to service under Article 12 of this Code that is subject to this Section) 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 (beginning January 1, 2015, age 60 with respect to service under Article 12 of this Code that is subject to this Section) 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.

(c-5) A person who first becomes a member or a participant under Article 8 or Article 11 of this Code on or after the effective date of this amendatory Act of the 100th General Assembly, notwithstanding any other provision of this Code to the contrary, is entitled to a retirement annuity upon written application if he or she has attained age 65 and has at least 10 years of service credit under Article 8 or Article 11 of this Code and is otherwise eligible under the requirements of Article 8 or Article 11 of this Code, whichever is applicable.

(d) The retirement annuity of a member or participant who is retiring after attaining age 62 (beginning January 1, 2015, age 60 with respect to service under Article 12 of this Code that is subject to this Section) 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 (beginning January 1, 2015, age 65 with respect to service under Article 12 of this Code that is subject to this Section).

(d-5) The retirement annuity of a person who first becomes a member or a participant under Article 8 or Article 11 of this Code on or after the effective date of this amendatory Act of the 100th General Assembly who is retiring at age 60 with at least 10 years of service credit under Article 8 or Article 11 shall be reduced by one-half of 1% for each full month that the member's age is under age 65.

(d-10) Each person who first became a member or participant under Article 8 or Article 11 of this Code on or after January 1, 2011 and prior to the effective date of this amendatory Act of the 100th General Assembly shall make an irrevocable election either:

(i) to be eligible for the reduced retirement age provided in subsections (c-5) and (d-5) of this Section, the eligibility for which is conditioned upon the member or participant agreeing to the increases in employee contributions for age and service annuities provided in subsection (a-5) of Section 8-174 of this Code (for service under Article 8) or subsection (a-5) of Section 11-170 of this Code (for service under Article 11); or

(ii) to not agree to item (i) of this subsection (d-10), in which case the member or participant shall continue to be subject to the retirement age provisions in subsections (c) and (d) of this Section and the employee contributions for age and service annuity as provided in subsection (a) of Section 8-174 of this Code (for service under Article 8) or subsection (a) of Section 11-170 of this Code (for service under Article 11).

The election provided for in this subsection shall be made between June 1, 2017 and July 15, 2017. A person subject to this subsection who makes the required election shall remain bound by that election. A person subject to this subsection who fails for any reason to make the required election within the time specified in this subsection shall be deemed to have made the election under item (ii).

(e) Any retirement annuity or supplemental annuity shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 (beginning January 1, 2015, age 65 with respect to service under Article 12 of this Code that is subject to this Section and beginning on the effective date of this amendatory Act of the 100th General Assembly, age 65 with respect to persons who: (i) first became members or participants under Article 8 or Article 11 of this Code on or after the effective date of this amendatory Act of the 100th General Assembly; or (ii) first became members or participants under Article 8 or Article 11 of this Code on or after January 1, 2011 and before the effective date of this amendatory Act of the 100th General Assembly and made the election under item (i) of subsection (d-10) of this Section) 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.

Notwithstanding Section 1-103.1 of this Code, the changes made to this Section by this amendatory Act of the 100th General Assembly are applicable without regard to whether the employee was in active service on or after the effective date of this amendatory Act of the 100th General Assembly.

(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 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, 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, as those terms are defined in subsection (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 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 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) (Blank).

(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. 97-609, eff. 1-1-12; 98-92, eff. 7-16-13; 98-596, eff. 11-19-13; 98-622, eff. 6-1-14; revised 3-24-16.)

(40 ILCS 5/8-113) (from Ch. 108 1/2, par. 8-113)

Sec. 8-113. Municipal employee, employee, contributor, or participant. "Municipal employee", "employee", "contributor", or "participant":

(a) Any employee of an employer employed in the classified civil service thereof other than by temporary appointment or in a position excluded or exempt from the classified service by the Civil Service Act, or in the case of a city operating under a personnel ordinance, any employee of an employer employed in the classified or career service under the provisions of a personnel ordinance, other than in a provisional or exempt position as specified in such ordinance or in rules and regulations formulated thereunder.

(b) Any employee in the service of an employer before the Civil Service Act came in effect for the employer.

(c) Any person employed by the board.

(d) Any person employed after December 31, 1949, but prior to January 1, 1984, in the service of the employer by temporary appointment or in a position exempt from the classified service as set forth in the Civil Service Act, or in a provisional or exempt position as specified in the personnel ordinance, who meets the following qualifications:

(1) has rendered service during not less than 12 calendar months to an employer as an employee, officer, or official, 4 months of which must have been consecutive full normal working months of service rendered immediately prior to filing application to be included; and

(2) files written application with the board, while in the service, to be included hereunder.

(e) After December 31, 1949, any alderman or other officer or official of the employer, who files, while in office, written application with the board to be included hereunder.

(f) Beginning January 1, 1984, any person employed by an employer other than the Chicago Housing Authority or the Public Building Commission of the city, whether or not such person is serving by temporary appointment or in a position exempt from the classified service as set forth in the Civil Service Act, or in a provisional or exempt position as specified in the personnel ordinance, provided that such person is neither (1) an alderman or other officer or official of the employer, nor (2) participating, on the basis of such employment, in any other pension fund or retirement system established under this Act.

(g) After December 31, 1959, any person employed in the law department of the city, or municipal court or Board of Election Commissioners of the city, who was a contributor and participant, on December 31, 1959, in the annuity and benefit fund in operation in the city on said date, by virtue of the Court and Law Department Employees' Annuity Act or the Board of Election Commissioners Employees' Annuity Act.

After December 31, 1959, the foregoing definition includes any other person employed or to be employed in the law department, or municipal court (other than as a judge), or Board of Election Commissioners (if his salary is provided by appropriation of the city council of the city and his salary paid by the city) -- subject, however, in the case of such persons not participants on December 31, 1959, to compliance with the same qualifications and restrictions otherwise set forth in this Section and made generally applicable to employees or officers of the city concerning eligibility for participation or membership.

Notwithstanding any other provision in this Section, any person who first becomes employed in the law department of the city on or after the effective date of this amendatory Act of the 100th General Assembly shall be included within the foregoing definition, effective upon the date the person first becomes so employed, regardless of the nature of the appointment the person holds under the provisions of a personnel ordinance.

(h) After December 31, 1965, any person employed in the public library of the city -- and any other person -- who was a contributor and participant, on December 31, 1965, in the pension fund in operation in the city on said date, by virtue of the Public Library Employees' Pension Act.

(i) After December 31, 1968, any person employed in the house of correction of the city, who was a contributor and participant, on December 31, 1968, in the pension fund in operation in the city on said date, by virtue of the House of Correction Employees' Pension Act.

(j) Any person employed full-time on or after the effective date of this amendatory Act of the 92nd General Assembly by the Chicago Housing Authority who has elected to participate in this Fund as provided in subsection (a) of Section 8-230.9.

(k) Any person employed full-time by the Public Building Commission of the city who has elected to participate in this Fund as provided in subsection (d) of Section 8-230.7.

(Source: P.A. 92-599, eff. 6-28-02.)

(40 ILCS 5/8-173) (from Ch. 108 1/2, par. 8-173)

(Text of Section WITHOUT the changes made by P.A. 98-641, which has been held unconstitutional)

Sec. 8-173. Financing; tax levy.

(a) Except as provided in subsection (f) of this Section, the city council of the city shall levy a tax annually upon all taxable property in the city at a rate that will produce a sum which, when added to the amounts deducted from the salaries of the employees or otherwise contributed by them and the amounts deposited under subsection (f), will be sufficient for the requirements of this Article, but which when extended will produce an amount not to exceed the greater of the following: (a) the sum obtained by the levy of a tax of .1093% of the value, as equalized or assessed by the Department of Revenue, of all taxable property within such city, or (b) the sum of $12,000,000. However any city in which a Fund has been established and in operation under this Article for more than 3 years prior to 1970 shall levy for the year 1970 a tax at a rate on the dollar of assessed valuation of all taxable property that will produce, when extended, an amount not to exceed 1.2 times the total amount of contributions made by employees to the Fund for annuity purposes in the calendar year 1968, and, for the year 1971 and 1972 such levy that will produce, when extended, an amount not to exceed 1.3 times the total amount of contributions made by employees to the Fund for annuity purposes in the calendar years 1969 and 1970, respectively; and for the year 1973 an amount not to exceed 1.365 times such total amount of contributions made by employees for annuity purposes in the calendar year 1971; and for the year 1974 an amount not to exceed 1.430 times such total amount of contributions made by employees for annuity purposes in the calendar year 1972; and for the year 1975 an amount not to exceed 1.495 times such total amount of contributions made by employees for annuity purposes in the calendar year 1973; and for the year 1976 an amount not to exceed 1.560 times such total amount of contributions made by employees for annuity purposes in the calendar year 1974; and for the year 1977 an amount not to exceed 1.625 times such total amount of contributions made by employees for annuity purposes in the calendar year 1975; and for the year 1978 and each year thereafter through levy year 2016, such levy as will produce, when extended, an amount not to exceed the total amount of contributions made by or on behalf of employees to the Fund for annuity purposes in the calendar year 2 years prior to the year for which the annual applicable tax is levied, multiplied by 1.690 for the years 1978 through 1998 and by 1.250 for the year 1999 and for each year thereafter through levy year 2016. Beginning in levy year 2017, and in each year thereafter, the levy shall not exceed the amount of the city's total required contribution to the Fund for the next payment year, as determined under subsection (a-5). For the purposes of this Section, the payment year is the year immediately following the levy year.

The tax shall be levied and collected in like manner with the general taxes of the city, and shall be exclusive of and in addition to the amount of tax the city is now or may hereafter be authorized to levy for general purposes under any laws which may limit the amount of tax which the city may levy for general purposes. The county clerk of the county in which the city is located, in reducing tax levies under the provisions of any Act concerning the levy and extension of taxes, shall not consider the tax herein provided for as a part of the general tax levy for city purposes, and shall not include the same within any limitation of the percent of the assessed valuation upon which taxes are required to be extended for such city.

Revenues derived from such tax shall be paid to the city treasurer of the city as collected and held by the city treasurer him for the benefit of the fund.

If the payments on account of taxes are insufficient during any year to meet the requirements of this Article, the city may issue tax anticipation warrants against the current tax levy.

The city may continue to use other lawfully available funds in lieu of all or part of the levy, as provided under subsection (f) of this Section.

(a-5) (1) Beginning in payment year 2018, the city's required annual contribution to the Fund for payment years 2018 through 2022 shall be: for 2018, $266,000,000; for 2019, $344,000,000; for 2020, $421,000,000; for 2021, $499,000,000; and for 2022, $576,000,000.

(2) For payment years 2023 through 2058, the city's required annual contribution to the Fund shall be the amount determined by the Fund to be equal to the sum of (i) the city's portion of the projected normal cost for that fiscal year, plus (ii) an amount determined on a level percentage of applicable employee payroll basis (reflecting any limits on individual participants' pay that apply for benefit and contribution purposes under this plan) that is sufficient to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of 2058.

(3) For payment years after 2058, the city's required annual contribution to the Fund shall be equal to the amount, if any, needed to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund as of the end of the year. In making the determinations under paragraphs (2) and (3) of this subsection, the actuarial calculations shall be determined under the entry age normal actuarial cost method, and 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 the fiscal year.

To the extent that the city's contribution for any of the payment years referenced in this subsection is made with property taxes, those property taxes shall be levied, collected, and paid to the Fund in a like manner with the general taxes of the city.

(a-10) If the city fails to transmit to the Fund contributions required of it under this Article by December 31 of the year in which such contributions are due, the Fund may, after giving notice to the city, certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller must, beginning in payment year 2018, deduct and deposit into the Fund the certified amounts or a portion of those amounts from the following proportions of grants of State funds to the city:

(1) in payment year 2018, one-third of the total amount of any grants of State funds to the city;

(2) in payment year 2019, two-thirds of the total amount of any grants of State funds to the city; and

(3) in payment year 2020 and each payment year thereafter, the total amount of any grants of State funds to the city.

The State Comptroller may not deduct from any grants of State funds to the city more than the amount of delinquent payments certified to the State Comptroller by the Fund.

(b) On or before July 1, 2017, and each July 1 thereafter January 10, annually, the board shall certify to notify the city council the annual amounts required under of the requirements of this Article, for which that the tax herein provided shall be levied for the following that current year. The board shall compute the amounts necessary to be credited to the reserves established and maintained as herein provided, and shall make an annual determination of the amount of the required city contributions, and certify the results thereof to the city council.

(c) In respect to employees of the city who are transferred to the employment of a park district by virtue of the "Exchange of Functions Act of 1957", the corporate authorities of the park district shall annually levy a tax upon all the taxable property in the park district at such rate per cent of the value of such property, as equalized or assessed by the Department of Revenue, as shall be sufficient, when added to the amounts deducted from their salaries and otherwise contributed by them to provide the benefits to which they and their dependents and beneficiaries are entitled under this Article. The city shall not levy a tax hereunder in respect to such employees.

The tax so levied by the park district shall be in addition to and exclusive of all other taxes authorized to be levied by the park district for corporate, annuity fund, or other purposes. The county clerk of the county in which the park district is located, in reducing any tax levied under the provisions of any act concerning the levy and extension of taxes shall not consider such tax as part of the general tax levy for park purposes, and shall not include the same in any limitation of the per cent of the assessed valuation upon which taxes are required to be extended for the park district. The proceeds of the tax levied by the park district, upon receipt by the district, shall be immediately paid over to the city treasurer of the city for the uses and purposes of the fund.

The various sums to be contributed by the city and park district and allocated for the purposes of this Article, and any interest to be contributed by the city, shall be derived from the revenue from the taxes authorized in this Section or otherwise as expressly provided in this Section.

If it is not possible or practicable for the city to make contributions for age and service annuity and widow's annuity at the same time that employee contributions are made for such purposes, such city contributions shall be construed to be due and payable as of the end of the fiscal year for which the tax is levied and shall accrue thereafter with interest at the effective rate until paid.

(d) With respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L. 93-567, 88 Stat. 1845), hereinafter referred to as CETA, subsequent to October 1, 1978, and in instances where the board has elected to establish a manpower program reserve, the board shall compute the amounts necessary to be credited to the manpower program reserves established and maintained as herein provided, and shall make a periodic determination of the amount of required contributions from the City to the reserve to be reimbursed by the federal government in accordance with rules and regulations established by the Secretary of the United States Department of Labor or his designee, and certify the results thereof to the City Council. Any such amounts shall become a credit to the City and will be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(e) In lieu of establishing a manpower program reserve with respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as authorized by subsection (d), the board may elect to establish a special municipality contribution rate for all such employees. If this option is elected, the City shall contribute to the Fund from federal funds provided under the Comprehensive Employment and Training Act program at the special rate so established and such contributions shall become a credit to the City and be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(f) In lieu of levying all or a portion of the tax required under this Section in any year, the city may deposit with the city treasurer no later than March 1 of that year for the benefit of the fund, to be held in accordance with this Article, an amount that, together with the taxes levied under this Section for that year, is not less than the amount of the city contributions for that year as certified by the board to the city council. The deposit may be derived from any source legally available for that purpose, including, but not limited to, the proceeds of city borrowings. The making of a deposit shall satisfy fully the requirements of this Section for that year to the extent of the amounts so deposited. Amounts deposited under this subsection may be used by the fund for any of the purposes for which the proceeds of the tax levied by the city under this Section may be used, including the payment of any amount that is otherwise required by this Article to be paid from the proceeds of that tax.

(Source: P.A. 90-31, eff. 6-27-97; 90-655, eff. 7-30-98; 90-766, eff. 8-14-98.)

(40 ILCS 5/8-174) (from Ch. 108 1/2, par. 8-174)

(Text of Section WITHOUT the changes made by P.A. 98-641, which has been held unconstitutional)

Sec. 8-174. Contributions for age and service annuities for present employees and future entrants. (a) Beginning on the effective date and prior to July 1, 1947, 3 1/4%; and beginning on July 1, 1947 and prior to July 1, 1953, 5%; and beginning July 1, 1953, and prior to January 1, 1972, 6%; and beginning January 1, 1972, 6-1/2% of each payment of the salary of each present employee and future entrant, except as provided in subsection (a-5) and (a-10), shall be contributed to the fund as a deduction from salary for age and service annuity.

(a-5) Except as provided in subsection (a-10), for an employee who on or after January 1, 2011 and prior to the effective date of this amendatory Act of the 100th General Assembly first became a member or participant under this Article and made the election under item (i) of subsection (d-10) of Section 1-160: prior to the effective date of this amendatory Act of the 100th General Assembly, 6.5%; and beginning on the effective date of this amendatory Act of the 100th General Assembly and prior to January 1, 2018, 7.5%; and beginning January 1, 2018 and prior to January 1, 2019, 8.5%; and beginning January 1, 2019 and thereafter, employee contributions for those employees who made the election under item (i) of subsection (d-10) of Section 1-160 shall be the lesser of: (i) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first became members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and Section 8-182 of this Article; or (ii) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and 8-182 of this Article.

Beginning with the first pay period on or after the date when the funded ratio of the fund is first determined to have reached the 90% funding goal, and each pay period thereafter for as long as the fund maintains a funding ratio of 75% or more, employee contributions for age and service annuity for those employees who made the election under item (i) of subsection (d-10) of Section 1-160 shall be 5.5% of each payment of salary. If the funding ratio falls below 75%, then employee contributions for age and service annuity for those employees who made the election under item (i) of subsection (d-10) shall revert to the lesser of: (A) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first became members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and Section 8-182 of this Article; or (B) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and 8-182 of this Article. If the fund once again is determined to have reached a funding ratio of 75%, the 5.5% of salary contribution for age and service annuity shall resume. An employee who made the election under item (ii) of subsection (d-10) of Section 1-160 shall continue to have the contributions for age and service annuity determined under subsection (a) of this Section.

If contributions are reduced to less than the aggregate employee contribution described in item (ii) or item (B) of this subsection due to application of the normal cost criterion, the employee contribution amount shall be consistent from July 1 of the fiscal year through June 30 of that fiscal year.

The normal cost, for the purposes of this subsection (a-5) and subsection (a-10), shall be calculated by an independent enrolled actuary mutually agreed upon by the fund and the City. The fees and expenses of the independent actuary shall be the responsibility of the City. For purposes of this subsection (a-5), the fund and the City shall both be considered to be the clients of the actuary, and the actuary shall utilize participant data and actuarial standards to calculate the normal cost. The fund shall provide information that the actuary requests in order to calculate the applicable normal cost.

(a-10) For each employee who on or after the effective date of this amendatory Act of the 100th General Assembly first becomes a member or participant under this Article, 9.5% of each payment of salary shall be contributed to the fund as a deduction from salary for age and service annuity. Beginning January 1, 2018 and each year thereafter, employee contributions for each employee subject to this subsection (a-10) shall be the lesser of: (i) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first become members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and Section 8-182 of this Article; or (ii) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and Section 8-182 of this Article.

Beginning with the first pay period on or after the date when the funded ratio of the fund is first determined to have reached the 90% funding goal, and each pay period thereafter for as long as the fund maintains a funding ratio of 75% or more, employee contributions for age and service annuity for each employee subject to this subsection (a-10) shall be 5.5% of each payment of salary. If the funding ratio falls below 75%, then employee contributions for age and service annuity for each employee subject to this subsection (a-10) shall revert to the lesser of: (A) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first become members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and Section 8-182 of this Article; or (B) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 8-137 and Section 8-182 of this Article. If the fund once again is determined to have reached a funding ratio of 75%, the 5.5% of salary contribution for age and service annuity shall resume.

If contributions are reduced to less than the aggregate employee contribution described in item (ii) or item (B) of this subsection (a-10) due to application of the normal cost criterion, the employee contribution amount shall be consistent from July 1 of the fiscal year through June 30 of that fiscal year.

Such deductions beginning on the effective date and prior to July 1, 1947 shall be made for a future entrant while he is in the service until he attains age 65 and for a present employee while he is in the service until the amount so deducted from his salary with the amount deducted from his salary or paid by him according to law to any municipal pension fund in force on the effective date with interest on both such amounts at 4% per annum equals the sum that would have been to his credit from sums deducted from his salary if deductions at the rate herein stated had been made during his entire service until he attained age 65 with interest at 4% per annum for the period subsequent to his attainment of age 65. Such deductions beginning July 1, 1947 shall be made and continued for employees while in the service.

(b) (Blank). Concurrently with each employee contribution beginning on the effective date and prior to July 1, 1947 the city shall contribute 5 3/4%; and beginning on July 1, 1947 and prior to July 1, 1953, 7%; and beginning July 1, 1953, 6% of each payment of such salary until the employee attains age 65.

(c) Each employee contribution made prior to the date the age and service annuity for an employee is fixed and each corresponding city contribution shall be credited to the employee and allocated to the account of the employee for whose benefit it is made.

(d) Notwithstanding Section 1-103.1, the changes to this Section made by this amendatory Act of the 100th General Assembly apply regardless of whether the employee was in active service on or after the effective date of this amendatory Act of the 100th General Assembly.

(Source: P.A. 93-654, eff. 1-16-04.)

(40 ILCS 5/8-228.5 new)

Sec. 8-228.5. Action by Fund against third party; subrogation. In those cases where the injury or death for which a disability or death benefit is payable under this Article was caused under circumstances creating a legal liability on the part of some person or entity (hereinafter "third party") to pay damages to the employee, legal proceedings may be taken against such third party to recover damages notwithstanding the Fund's payment of or liability to pay disability or death benefits under this Article. In such case, however, if the action against such third party is brought by the injured employee or his or her personal representative and judgment is obtained and paid, or settlement is made with such third party, either with or without suit, from the amount received by such employee or personal representative, then there shall be paid to the Fund the amount of money representing the death or disability benefits paid or to be paid to the disabled employee pursuant to the provisions of this Article. In all circumstances where the action against a third party is brought by the disabled employee or his or her personal representative, the Fund shall have a claim or lien upon any recovery, by judgment or settlement, out of which the disabled employee or his or her personal representative might be compensated from such third party. The Fund may satisfy or enforce any such claim or lien only from that portion of a recovery that has been, or can be, allocated or attributed to past and future lost salary, which recovery is by judgment or settlement. The Fund's claim or lien shall not be satisfied or enforced from that portion of a recovery that has been, or can be, allocated or attributed to medical care and treatment, pain and suffering, loss of consortium, and attorney's fees and costs.

Where action is brought by the disabled employee or his or her personal representative he or she shall forthwith notify the Fund, by personal service or registered mail, of such fact and of the name of the court where such suit is brought, filing proof of such notice in such action. The Fund may, at any time thereafter, intervene in such action upon its own motion. Therefore, no release or settlement of claim for damages by reason of injury to the disabled employee, and no satisfaction of judgment in such proceedings, shall be valid without the written consent of the Board of Trustees authorized by this Code to administer the Fund created under this Article, except that such consent shall be provided expeditiously following a settlement or judgment.

In the event the disabled employee or his or her personal representative has not instituted an action against a third party at a time when only 3 months remain before such action would thereafter be barred by law, the Fund may, in its own name or in the name of the personal representative, commence a proceeding against such third party seeking the recovery of all damages on account of injuries caused to the employee. From any amount so recovered, the Fund shall pay to the personal representative of such disabled employee all sums collected from such third party by judgment or otherwise in excess of the amount of disability or death benefits paid or to be paid under this Article to the disabled employee or his or her personal representative, and such costs, attorney's fees, and reasonable expenses as may be incurred by the Fund in making the collection or in enforcing such liability. The Fund's recovery shall be satisfied only from that portion of a recovery that has been, or can be, allocated or attributed to past and future lost salary, which recovery is by judgment or settlement. The Fund's recovery shall not be satisfied from that portion of the recovery that has been or can be allocated or attributed to medical care and treatment, pain and suffering, loss of consortium, and attorney's fees and costs.

Additionally, with respect to any right of subrogation asserted by the Fund under this Section, the Fund, in the exercise of discretion, may determine what amount from past or future salary shall be appropriate under the circumstances to collect from the recovery obtained on behalf of the disabled employee.

This Section applies only to persons who first become members or participants under this Article on or after the effective date of this amendatory Act of 100th General Assembly.

(40 ILCS 5/8-243.2) (from Ch. 108 1/2, par. 8-243.2)

Sec. 8-243.2. Alternative annuity for city officers.

(a) For the purposes of this Section and Sections 8-243.1 and 8-243.3, "city officer" means the city clerk, the city treasurer, or an alderman of the city elected by vote of the people, while serving in that capacity or as provided in subsection (f), who has elected to participate in the Fund.

(b) Any elected city officer, while serving in that capacity or as provided in subsection (f), may elect to establish alternative credits for an alternative annuity by electing in writing to make additional optional contributions in accordance with this Section and the procedures established by the board. Such elected city officer may discontinue making the additional optional contributions by notifying the Fund in writing in accordance with this Section and procedures established by the board.

Additional optional contributions for the alternative annuity shall be as follows:

(1) For service after the option is elected, an additional contribution of 3% of salary shall be contributed to the Fund on the same basis and under the same conditions as contributions required under Sections 8-174 and 8-182.

(2) For service before the option is elected, an additional contribution of 3% of the salary for the applicable period of service, plus interest at the effective rate from the date of service to the date of payment. All payments for past service must be paid in full before credit is given. No additional optional contributions may be made for any period of service for which credit has been previously forfeited by acceptance of a refund, unless the refund is repaid in full with interest at the effective rate from the date of refund to the date of repayment.

(c) In lieu of the retirement annuity otherwise payable under this Article, any city officer elected by vote of the people who (1) has elected to participate in the Fund and make additional optional contributions in accordance with this Section, and (2) has attained age 55 with at least 10 years of service credit, or has attained age 60 with at least 8 years of service credit, may elect to have his retirement annuity computed as follows: 3% of the participant's salary at the time of termination of service for each of the first 8 years of service credit, plus 4% of such salary for each of the next 4 years of service credit, plus 5% of such salary for each year of service credit in excess of 12 years, subject to a maximum of 80% of such salary. To the extent such elected city officer has made additional optional contributions with respect to only a portion of his years of service credit, his retirement annuity will first be determined in accordance with this Section to the extent such additional optional contributions were made, and then in accordance with the remaining Sections of this Article to the extent of years of service credit with respect to which additional optional contributions were not made.

(d) In lieu of the disability benefits otherwise payable under this Article, any city officer elected by vote of the people who (1) has elected to participate in the Fund, and (2) has become permanently disabled and as a consequence is unable to perform the duties of his office, and (3) was making optional contributions in accordance with this Section at the time the disability was incurred, may elect to receive a disability annuity calculated in accordance with the formula in subsection (c). For the purposes of this subsection, such elected city officer shall be considered permanently disabled only if: (i) disability occurs while in service as an elected city officer and is of such a nature as to prevent him from reasonably performing the duties of his office at the time; and (ii) the board has received a written certification by at least 2 licensed physicians appointed by it stating that such officer is disabled and that the disability is likely to be permanent.

(e) Refunds of additional optional contributions shall be made on the same basis and under the same conditions as provided under Sections 8-168, 8-170 and 8-171. Interest shall be credited at the effective rate on the same basis and under the same conditions as for other contributions. Optional contributions shall be accounted for in a separate Elected City Officer Optional Contribution Reserve. Optional contributions under this Section shall be included in the amount of employee contributions used to compute the tax levy under Section 8-173.

(f) The effective date of this plan of optional alternative benefits and contributions shall be July 1, 1990, or the date upon which approval is received from the U.S. Internal Revenue Service, whichever is later.

The plan of optional alternative benefits and contributions shall not be available to any former city officer or employee receiving an annuity from the Fund on the effective date of the plan, unless he re-enters service as an elected city officer and renders at least 3 years of additional service after the date of re-entry. However, a person who holds office as a city officer on June 1, 1995 may elect to participate in the plan, to transfer credits into the Fund from other Articles of this Code, and to make the contributions required for prior service, until 30 days after the effective date of this amendatory Act of the 92nd General Assembly, notwithstanding the ending of his term of office prior to that effective date; in the event that the person is already receiving an annuity from this Fund or any other Article of this Code at the time of making this election, the annuity shall be recalculated to include any increase resulting from participation in the plan, with such increase taking effect on the effective date of the election.

(g) Notwithstanding any other provision in this Section or in this Code to the contrary, any person who first becomes a city officer, as defined in this Section, on or after the effective date of this amendatory Act of the 100th General Assembly, shall not be eligible for the alternative annuity or alternative disability benefits as provided in subsections (a), (b), (c), and (d) of this Section or for the alternative survivor's benefits as provided in Section 8-243.3. Such person shall not be eligible, or be required, to make any additional contributions beyond those required of other participants under Sections 8-137, 8-174, and 8-182. The retirement annuity, disability benefits, and survivor's benefits for a person who first becomes a city officer on or after the effective date of this amendatory Act of the 100th General Assembly shall be determined pursuant to the provisions otherwise provided in this Article.

(Source: P.A. 92-599, eff. 6-28-02.)

(40 ILCS 5/8-244) (from Ch. 108 1/2, par. 8-244)

Sec. 8-244. Annuities, etc., exempt.

(a) All annuities, refunds, pensions, and disability benefits granted under this Article, shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court in this State, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any annuitant, pensioner, participant, refund applicant, or other beneficiary hereunder.

(b) No annuitant, pensioner, refund applicant, or other beneficiary shall have any right to transfer or assign his annuity, refund, or disability benefit or any part thereof by way of mortgage or otherwise, except that:

(1) an annuitant or pensioner who elects or has elected to participate in a non-profit group hospital care plan or group medical surgical plan may with the approval of the board and in conformity with its regulations authorize the board to withhold from the pension or annuity the current premium for such coverage and pay such premium to the organization underwriting such plan;

(2) in the case of refunds, a participant may pledge by assignment, power of attorney, or otherwise, as security for a loan from a legally operating credit union making loans only to participants in certain public employee pension funds described in the Illinois Pension Code, all or part of any refund which may become payable to him in the event of his separation from service; and

(3) the board, in its discretion, may pay to the wife of any annuitant, pensioner, refund applicant, or disability beneficiary, such an amount out of her husband's annuity pension, refund, or disability benefit as any court of competent jurisdiction may order, or such an amount as the board may consider necessary for the support of his wife or children, or both in the event of his disappearance or unexplained absence or of his failure to support such wife or children.

(c) The board may retain out of any future annuity, pension, refund or disability benefit payments, such amount, or amounts, as it may require for the repayment of any moneys paid to any annuitant, pensioner, refund applicant, or disability beneficiary through misrepresentation, fraud or error. Any such action of the board shall relieve and release the board and the fund from any liability for any moneys so withheld.

(d) Whenever an annuity or disability benefit is payable to a minor or to a person certified by a medical doctor to be under legal disability, the board, in its discretion and when it is in the best interest of the person concerned, may waive guardianship proceedings and pay the annuity or benefit to the person providing or caring for the minor or person under legal disability.

In the event that a person certified by a medical doctor to be under legal disability (i) has no spouse, blood relative, or other person providing or caring for him or her, (ii) has no guardian of his or her estate, and (iii) is confined to a Medicare approved, State certified nursing home or to a publicly owned and operated nursing home, hospital, or mental institution, the Board may pay any benefit due that person to the nursing home, hospital, or mental institution, to be used for the sole benefit of the person under legal disability.

Payment in accordance with this subsection to a person, nursing home, hospital, or mental institution for the benefit of a minor or person under legal disability shall be an absolute discharge of the Fund's liability with respect to the amount so paid. Any person, nursing home, hospital, or mental institution accepting payment under this subsection shall notify the Fund of the death or any other relevant change in the status of the minor or person under legal disability.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/8-244.1) (from Ch. 108 1/2, par. 8-244.1)

Sec. 8-244.1. Payment of annuity other than direct.

(a) The board, at the written direction and request of any annuitant, may, solely as an accommodation to such annuitant, pay the annuity due him to a bank, savings and loan association or any other financial institution insured by an agency of the federal government, for deposit to his account, or to a bank or trust company for deposit in a trust established by him for his benefit with such bank, savings and loan association or trust company, and such annuitant may withdraw such direction at any time. The board may also, in the case of any disability beneficiary or annuitant for whom no estate guardian has been appointed and who is confined in a publicly owned and operated mental institution, pay such disability benefit or annuity due such person to the superintendent or other head of such institution or hospital for deposit to such person's trust fund account maintained for him by such institution or hospital, if by law such trust fund accounts are authorized or recognized.

(b) An annuitant formerly employed by the City of Chicago may authorize the withholding of a portion of his or her annuity for payment of dues to the labor organization which formerly represented the annuitant when the annuitant was an active employee; however, no withholding shall be required under this subsection for payment to one labor organization unless a minimum of 25 annuitants authorize such withholding. The Board shall prescribe a form for the authorization of withholding of dues, release of name, social security number and address and shall provide such forms to employees, annuitants and labor organizations upon request. Amounts withheld by the Board under this subsection shall be promptly paid over to the designated organizations, indicating the names, social security numbers and addresses of annuitants on whose behalf dues were withheld.

At the request and at the expense of the labor organization that formerly represented the annuitant, the City of Chicago shall coordinate mailings no more than twice in any twelve-month period to such annuitants and the Board shall supply current annuitant addresses to the City of Chicago upon request. These mailings shall be limited to informing the annuitants of their rights under this subsection (b), the form authorizing the withholding of dues from their annuity and information supplied by the labor organization pertinent to the decision of whether to exercise the rights of this subsection. To meet this obligation, the City of Chicago shall, upon request, create and update records of all retirees for each labor organization as far back in time as records permit, including their names, addresses, phone numbers and social security numbers.

(Source: P.A. 90-766, eff. 8-14-98.)

(40 ILCS 5/8-251) (from Ch. 108 1/2, par. 8-251)

Sec. 8-251. Felony conviction.

None of the benefits provided for in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as a municipal employee.

This section shall not operate to impair any contract or vested right heretofore acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

Any refund required under this Article shall be calculated based on that person's contributions to the Fund, less the amount of any annuity benefit previously received by the person or his or her beneficiaries. The changes made to this Section by this amendatory Act of the 100th General Assembly apply only to persons who first become participants under this Article on or after the effective date of this amendatory Act of the 100th General Assembly.

All future entrants entering service subsequent to July 11, 1955 shall be deemed to have consented to the provisions of this section as a condition of coverage.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/11-125.9 new)

Sec. 11-125.9 Action by Fund against third party; subrogation. In those cases where the injury or death for which a disability or death benefit is payable under this Article was caused under circumstances creating a legal liability on the part of some person or entity (hereinafter "third party") to pay damages to the employee, legal proceedings may be taken against such third party to recover damages notwithstanding the Fund's payment of or liability to pay disability or death benefits under this Article. In such case, however, if the action against such third party is brought by the injured employee or his or her personal representative and judgment is obtained and paid, or settlement is made with such third party, either with or without suit, from the amount received by such employee or personal representative, then there shall be paid to the Fund the amount of money representing the death or disability benefits paid or to be paid to the disabled employee pursuant to the provisions of this Article. In all circumstances where the action against a third party is brought by the disabled employee or his or her personal representative, the Fund shall have a claim or lien upon any recovery, by judgment or settlement, out of which the disabled employee or his or her personal representative might be compensated from such third party. The Fund may satisfy or enforce any such claim or lien only from that portion of a recovery that has been, or can be, allocated or attributed to past and future lost salary, which recovery is by judgment or settlement. The Fund's claim or lien shall not be satisfied or enforced from that portion of a recovery that has been, or can be, allocated or attributed to medical care and treatment, pain and suffering, loss of consortium, and attorney's fees and costs. Where action is brought by the disabled employee or his or her personal representative he or she shall forthwith notify the Fund, by personal service or registered mail, of such fact and of the name of the court where such suit is brought, filing proof of such notice in such action. The Fund may, at any time thereafter, intervene in such action upon its own motion. Therefore, no release or settlement of claim for damages by reason of injury to the disabled employee, and no satisfaction of judgment in such proceedings, shall be valid without the written consent of the Board of Trustees authorized by this Code to administer the Fund created under this Article, except that such consent shall be provided expeditiously following a settlement or judgment.

In the event the disabled employee or his or her personal representative has not instituted an action against a third party at a time when only 3 months remain before such action would thereafter be barred by law, the Fund may, in its own name or in the name of the personal representative, commence a proceeding against such third party seeking the recovery of all damages on account of injuries caused to the employee. From any amount so recovered, the Fund shall pay to the personal representative of such disabled employee all sums collected from such third party by judgment or otherwise in excess of the amount of disability or death benefits paid or to be paid under this Article to the disabled employee or his or her personal representative, and such costs, attorney's fees, and reasonable expenses as may be incurred by the Fund in making the collection or in enforcing such liability. The Fund's recovery shall be satisfied only from that portion of a recovery that has been, or can be, allocated or attributed to past and future lost salary, which recovery is by judgment or settlement. The Fund's recovery shall not be satisfied from that portion of the recovery that has been or can be allocated or attributed to medical care and treatment, pain and suffering, loss of consortium, and attorney's fees and costs. Additionally, with respect to any right of subrogation asserted by the Fund under this Section, the Fund, in the exercise of discretion, may determine what amount from past or future salary shall be appropriate under the circumstances to collect from the recovery obtained on behalf of the disabled employee.

This Section applies only to persons who first become members or participants under this Article on or after the effective date of this amendatory Act of 100th General Assembly.

(40 ILCS 5/11-169) (from Ch. 108 1/2, par. 11-169)

(Text of Section WITHOUT the changes made by P.A. 98-641, which has been held unconstitutional)

Sec. 11-169. Financing; tax levy.

(a) Except as provided in subsection (f) of this Section, the city council of the city shall levy a tax annually upon all taxable property in the city at the rate that will produce a sum which, when added to the amounts deducted from the salaries of the employees or otherwise contributed by them and the amounts deposited under subsection (f), will be sufficient for the requirements of this Article. For the years prior to the year 1950 the tax rate shall be as provided for under "The 1935 Act". Beginning with the year 1950 to and including the year 1969 such tax shall be not more than .036% annually of the value, as equalized or assessed by the Department of Revenue, of all taxable property within such city. Beginning with the year 1970 and each year thereafter through levy year 2016, the city shall levy a tax annually at a rate on the dollar of the value, as equalized or assessed by the Department of Revenue of all taxable property within such city that will produce, when extended, not to exceed an amount equal to the total amount of contributions by the employees to the fund made in the calendar year 2 years prior to the year for which the annual applicable tax is levied, multiplied by 1.1 for the years 1970, 1971 and 1972; 1.145 for the year 1973; 1.19 for the year 1974; 1.235 for the year 1975; 1.280 for the year 1976; 1.325 for the year 1977; 1.370 for the years 1978 through 1998; and 1.000 for the year 1999 and for each year thereafter through levy year 2016. Beginning in levy year 2017, and in each year thereafter, the levy shall not exceed the amount of the city's total required contribution to the Fund for the next payment year, as determined under subsection (a-5). For the purposes of this Section, the payment year is the year immediately following the levy year.

The tax shall be levied and collected in like manner with the general taxes of the city, and shall be exclusive of and in addition to the amount of tax the city is now or may hereafter be authorized to levy for general purposes under any laws which may limit the amount of tax which the city may levy for general purposes. The county clerk of the county in which the city is located, in reducing tax levies under the provisions of any Act concerning the levy and extension of taxes, shall not consider the tax herein provided for as a part of the general tax levy for city purposes, and shall not include the same within any limitation of the per cent of the assessed valuation upon which taxes are required to be extended for such city.

Revenues derived from such tax shall be paid to the city treasurer of the city as collected and held by the city treasurer him for the benefit of the fund.

If the payments on account of taxes are insufficient during any year to meet the requirements of this Article, the city may issue tax anticipation warrants against the current tax levy.

The city may continue to use other lawfully available funds in lieu of all or part of the levy, as provided under subsection (f) of this Section.

(a-5) (1) Beginning in payment year 2018, the city's required annual contribution to the Fund for payment years 2018 through 2022 shall be: for 2018, $36,000,000; for 2019, $48,000,000; for 2020, $60,000,000; for 2021, $72,000,000; and for 2022, $84,000,000.

(2) For payment years 2023 through 2058, the city's required annual contribution to the Fund shall be the amount determined by the Fund to be equal to the sum of (i) the city's portion of projected normal cost for that fiscal year, plus (ii) an amount determined on a level percentage of applicable employee payroll basis that is sufficient to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund by the end of 2058.

(3) For payment years after 2058, the city's required annual contribution to the Fund shall be equal to the amount, if any, needed to bring the total actuarial assets of the Fund up to 90% of the total actuarial liabilities of the Fund as of the end of the year. In making the determinations under paragraphs (2) and (3) of this subsection, the actuarial calculations shall be determined under the entry age normal actuarial cost method, and 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 the fiscal year.

To the extent that the city's contribution for any of the payment years referenced in this subsection is made with property taxes, those property taxes shall be levied, collected, and paid to the Fund in a like manner with the general taxes of the city.

(a-10) If the city fails to transmit to the Fund contributions required of it under this Article by December 31 of the year in which such contributions are due, the Fund may, after giving notice to the city, certify to the State Comptroller the amounts of the delinquent payments, and the Comptroller must, beginning in payment year 2018, deduct and deposit into the Fund the certified amounts or a portion of those amounts from the following proportions of grants of State funds to the city:

(1) in payment year 2018, one-third of the total amount of any grants of State funds to the city;

(2) in payment year 2019, two-thirds of the total amount of any grants of State funds to the city; and

(3) in payment year 2020 and each payment year thereafter, the total amount of any grants of State funds to the city.

The State Comptroller may not deduct from any grants of State funds to the city more than the amount of delinquent payments certified to the State Comptroller by the Fund.

(b) On or before July 1, 2017, and each July 1 thereafter January 10, annually, the board shall certify to notify the city council the annual amounts required under of the requirement of this Article, for which that the tax herein provided shall be levied for the following that current year. The board shall compute the amounts necessary for the purposes of this fund to be credited to the reserves established and maintained as herein provided, and shall make an annual determination of the amount of the required city contributions; and certify the results thereof to the city council.

(c) In respect to employees of the city who are transferred to the employment of a park district by virtue of "Exchange of Functions Act of 1957" the corporate authorities of the park district shall annually levy a tax upon all the taxable property in the park district at such rate per cent of the value of such property, as equalized or assessed by the Department of Revenue, as shall be sufficient, when added to the amounts deducted from their salaries and otherwise contributed by them, to provide the benefits to which they and their dependents and beneficiaries are entitled under this Article. The city shall not levy a tax hereunder in respect to such employees.

The tax so levied by the park district shall be in addition to and exclusive of all other taxes authorized to be levied by the park district for corporate, annuity fund, or other purposes. The county clerk of the county in which the park district is located, in reducing any tax levied under the provisions of any Act concerning the levy and extension of taxes shall not consider such tax as part of the general tax levy for park purposes, and shall not include the same in any limitation of the per cent of the assessed valuation upon which taxes are required to be extended for the park district. The proceeds of the tax levied by the park district, upon receipt by the district, shall be immediately paid over to the city treasurer of the city for the uses and purposes of the fund.

The various sums to be contributed by the city and allocated for the purposes of this Article, and any interest to be contributed by the city, shall be taken from the revenue derived from the taxes authorized in this Section, and no money of such city derived from any source other than the levy and collection of those taxes or the sale of tax anticipation warrants in accordance with the provisions of this Article shall be used to provide revenue for this Article, except as expressly provided in this Section.

If it is not possible for the city to make contributions for age and service annuity and widow's annuity concurrently with the employee's contributions made for such purposes, such city shall make such contributions as soon as possible and practicable thereafter with interest thereon at the effective rate to the time they shall be made.

(d) With respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as amended (P.L. 93-203, 87 Stat. 839, P.L. 93-567, 88 Stat. 1845), hereinafter referred to as CETA, subsequent to October 1, 1978, and in instances where the board has elected to establish a manpower program reserve, the board shall compute the amounts necessary to be credited to the manpower program reserves established and maintained as herein provided, and shall make a periodic determination of the amount of required contributions from the City to the reserve to be reimbursed by the federal government in accordance with rules and regulations established by the Secretary of the United States Department of Labor or his designee, and certify the results thereof to the City Council. Any such amounts shall become a credit to the City and will be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(e) In lieu of establishing a manpower program reserve with respect to employees whose wages are funded as participants under the Comprehensive Employment and Training Act of 1973, as authorized by subsection (d), the board may elect to establish a special municipality contribution rate for all such employees. If this option is elected, the City shall contribute to the Fund from federal funds provided under the Comprehensive Employment and Training Act program at the special rate so established and such contributions shall become a credit to the City and be used to reduce the amount which the City would otherwise contribute during succeeding years for all employees.

(f) In lieu of levying all or a portion of the tax required under this Section in any year, the city may deposit with the city treasurer no later than March 1 of that year for the benefit of the fund, to be held in accordance with this Article, an amount that, together with the taxes levied under this Section for that year, is not less than the amount of the city contributions for that year as certified by the board to the city council. The deposit may be derived from any source legally available for that purpose, including, but not limited to, the proceeds of city borrowings. The making of a deposit shall satisfy fully the requirements of this Section for that year to the extent of the amounts so deposited. Amounts deposited under this subsection may be used by the fund for any of the purposes for which the proceeds of the tax levied by the city under this Section may be used, including the payment of any amount that is otherwise required by this Article to be paid from the proceeds of that tax.

(Source: P.A. 90-31, eff. 6-27-97; 90-766, eff. 8-14-98.)

(40 ILCS 5/11-170) (from Ch. 108 1/2, par. 11-170)

(Text of Section WITHOUT the changes made by P.A. 98-641, which has been held unconstitutional)

Sec. 11-170. Contributions for age and service annuities for present employees, future entrants and re-entrants.

(a) Beginning on the effective date and prior to July 1, 1947, 3 1/4%; and beginning on July 1, 1947 and prior to July 1, 1953, 5%; and beginning July 1, 1953 and prior to January 1, 1972, 6%; and beginning January 1, 1972, 6 1/2% of each payment of the salary of each present employee, future entrant and re-entrant, except as provided in subsection (a-5) and (a-10), shall be contributed to the fund as a deduction from salary for age and service annuity.

(a-5) Except as provided in subsection (a-10), for an employee who on or after January 1, 2011 and prior to the effective date of this amendatory Act of the 100th General Assembly first became a member or participant under this Article and made the election under item (i) of subsection (d-10) of Section 1-160: prior to the effective date of this amendatory Act of the 100th General Assembly, 6.5%; and beginning on the effective date of this amendatory Act of the 100th General Assembly and prior to January 1, 2018, 7.5%; and beginning January 1, 2018 and prior to January 1, 2019, 8.5%; and beginning January 1, 2019 and thereafter, employee contributions for those employees who made the election under item (i) of subsection (d-10) of Section 1-160 shall be the lesser of: (i) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first became members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and Section 11-174 of this Article; or (ii) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and 11-174 of this Article.

Beginning with the first pay period on or after the date when the funded ratio of the fund is first determined to have reached the 90% funding goal, and each pay period thereafter for as long as the fund maintains a funding ratio of 75% or more, employee contributions for age and service annuity for those employees who made the election under item (i) of subsection (d-10) of Section 1-160 shall be 5.5% of each payment of salary. If the funding ratio falls below 75%, then employee contributions for age and service annuity for those employees who made the election under item (i) of subsection (d-10) shall revert to the lesser of: (A) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first became members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and Section 11-174 of this Article; or (B) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and 11-174 of this Article. If the fund once again is determined to have reached a funding ratio of 75%, the 5.5% of salary contribution for age and service annuity shall resume. An employee who made the election under item (ii) of subsection (d-10) of Section 1-160 shall continue to have the contributions for age and service annuity determined under subsection (a) of this Section.

If contributions are reduced to less than the aggregate employee contribution described in item (ii) or item (B) of this subsection due to application of the normal cost criterion, the employee contribution amount shall be consistent from July 1 of the fiscal year through June 30 of that fiscal year.

The normal cost, for the purposes of this subsection (a-5) and subsection (a-10), shall be calculated by an independent enrolled actuary mutually agreed upon by the fund and the City. The fees and expenses of the independent actuary shall be the responsibility of the City. For purposes of this subsection (a-5), the fund and the City shall both be considered to be the clients of the actuary, and the actuary shall utilize participant data and actuarial standards to calculate the normal cost. The fund shall provide information that the actuary requests in order to calculate the applicable normal cost.

(a-10) For each employee who on or after the effective date of this amendatory Act of the 100th General Assembly first becomes a member or participant under this Article, 9.5% of each payment of salary shall be contributed to the fund as a deduction from salary for age and service annuity. Beginning January 1, 2018 and each year thereafter, employee contributions for each employee subject to this subsection (a-10) shall be the lesser of: (i) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first become members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and Section 11-174 of this Article; or (ii) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and Section 11-174 of this Article.

Beginning with the first pay period on or after the date when the funded ratio of the fund is first determined to have reached the 90% funding goal, and each pay period thereafter for as long as the fund maintains a funding ratio of 75% or more, employee contributions for age and service annuity for each employee subject to this subsection (a-10) shall be 5.5% of each payment of salary. If the funding ratio falls below 75%, then employee contributions for age and service annuity for each employee subject to this subsection (a-10) shall revert to the lesser of: (A) the total normal cost, calculated using the entry age normal actuarial method, projected for that fiscal year for the benefits and expenses of the plan of benefits applicable to those members and participants who first become members or participants on or after the effective date of this amendatory Act of the 100th General Assembly and to those employees who made the election under item (i) of subsection (d-10) of Section 1-160, but not less than 6.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and Section 11-174 of this Article; or (B) the aggregate employee contribution consisting of 9.5% of each payment of salary combined with the employee contributions provided for in subsection (b) of Section 11-134.1 and Section 11-174 of this Article. If the fund once again is determined to have reached a funding ratio of 75%, the 5.5% of salary contribution for age and service annuity shall resume.

If contributions are reduced to less than the aggregate employee contribution described in item (ii) or item (B) of this subsection (a-10) due to application of the normal cost criterion, the employee contribution amount shall be consistent from July 1 of the fiscal year through June 30 of that fiscal year.

Such deductions beginning on the effective date and prior to June 30, 1947, inclusive shall be made for a future entrant while he is in service until he attains age 65, and for a present employee while he is in service until the amount so deducted from his salary with interest at the rate of 4% per annum shall be equal to the sum which would have accumulated to his credit from sums deducted from his salary if deductions at the rate herein stated had been made during his entire service until he attained age 65 with interest at 4% per annum for the period subsequent to his attainment of age 65. Such deductions beginning July 1, 1947 shall be made and continued for employees while in the service.

(b) (Blank). Concurrently with each employee contribution, the city shall contribute beginning on the effective date and prior to July 1, 1947, 5 3/4%; and beginning July 1, 1947 and prior to July 1, 1953, 7%; and beginning July 1, 1953, 6% of each payment of such salary until the employee attains age 65.

(c) Each employee contribution made prior to the date age and service annuity for an employee is fixed and each corresponding city contribution shall be allocated to the account of and credited to the employee for whose benefit it is made.

(d) Notwithstanding Section 1-103.1, the changes to this Section made by this amendatory Act of the 100th General Assembly apply regardless of whether the employee was in active service on or after the effective date of this amendatory Act.

(Source: P.A. 81-1536.)

(40 ILCS 5/11-197.7 new)

Sec. 11-197.7. Payment of annuity other than direct. The board, at the written direction and request of any annuitant, may, solely as an accommodation to such annuitant, pay the annuity due him or her to a bank, savings and loan association, or any other financial institution insured by an agency of the federal government, for deposit to his or her account, or to a bank or trust company for deposit in a trust established by him or her for his benefit with such bank, savings and loan association, or trust company, and such annuitant may withdraw such direction at any time. The board may also, in the case of any disability beneficiary or annuitant for whom no estate guardian has been appointed and who is confined in a publicly owned and operated mental institution, pay such disability benefit or annuity due such person to the superintendent or other head of such institution or hospital for deposit to such person's trust fund account maintained for him or her by such institution or hospital, if by law such trust fund accounts are authorized or recognized.

(40 ILCS 5/11-223.1) (from Ch. 108 1/2, par. 11-223.1)

Sec. 11-223.1. Assignment for health, hospital and medical insurance.

The board may provide, by regulation, that any annuitant or pensioner, may assign his annuity or disability benefit, or any part thereof, for the purpose of premium payment for a membership for the annuitant, and his or her spouse and children, in a non-profit group hospital care plan or group medical surgical plan, provided, however, that the board may, in its discretion, terminate the right of assignment. Any such hospital or medical insurance plan may include provision for the beneficiaries thereof who rely on treatment by spiritual means alone through prayer for healing in accordance with the tenets and practice of a well recognized religious denomination.

Upon the adoption of a regulation permitting such assignment, the board shall establish and administer a plan for the maintenance of the insurance plan membership by the annuitant or pensioner.

(Source: Laws 1965, p. 2290.)

(40 ILCS 5/11-230) (from Ch. 108 1/2, par. 11-230)

Sec. 11-230. Felony conviction.

None of the benefits provided in this Article shall be paid to any person who is convicted of any felony relating to or arising out of or in connection with his service as employee.

This section shall not operate to impair any contract or vested right heretofore acquired under any law or laws continued in this Article, nor to preclude the right to a refund.

Any refund required under this Article shall be calculated based on that person's contributions to the Fund, less the amount of any annuity benefit previously received by the person or his or beneficiaries. The changes made to this Section by this amendatory Act of the 100th General Assembly apply only to persons who first become members or participants under this Article on or after the effective date of this amendatory Act of the 100th General Assembly.

All future entrants entering service after July 11, 1955, shall be deemed to have consented to the provisions of this section as a condition of coverage.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/8-173.1 rep.)

(40 ILCS 5/11-169.1 rep.)

Section 10. The Illinois Pension Code is amended by repealing Sections 8-173.1 and 11-169.1.

Section 90. The State Mandates Act is amended by adding Section 8.41 as follows:

(30 ILCS 805/8.41 new)

Sec. 8.41. 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 100th General Assembly.

Section 97. Inseverability and severability. The changes made by this Act are inseverable, except that the changes made to Sections 8-228.5 and 11-125.9 of the Illinois Pension Code are severable under Section 1.31 of the Statute on Statutes.

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