SB2497 97TH GENERAL ASSEMBLY

LRB097 13629 AMC 58165 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2497

Introduced 10/12/2011, by Sen. Ron Sandack

SYNOPSIS AS INTRODUCED:

40 ILCS 5/8-226	from Ch. 108 1/2, par. 8-226
40 ILCS 5/11-215	from Ch. 108 1/2, par. 11-215
40 ILCS 5/17-134	from Ch. 108 1/2, par. 17-134
40 ILCS 5/17-134.1

Amends the Chicago Municipal, Chicago Laborers, and Chicago Teachers Articles of the Illinois Pension Code to provide that, for certain leaves of absence during which a participant is employed by a labor organization, contributions shall be based upon the participant's regular salary (rather than the salary received from the organization). Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

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 8-226, 11-215, 17-134, and 17-134.1 as follows:

(40 ILCS 5/8-226) (from Ch. 108 1/2, par. 8-226)

Sec. 8-226. Computation of service. In computing the term of service of an employee prior to the effective date, the entire period beginning on the date he was first appointed and ending on the day before the effective date, except any intervening period during which he was separated by withdrawal from service, shall be counted for all purposes of this Article, except that for any employee who was not in service on the day before the effective date, service rendered prior to such date shall not be considered for the purposes of Section 8-138.

For a person employed by an employer for whom this Article was in effect prior to January 1, 1950, from whose salary deductions are first made under this Article after December 31, 1949, any period of service rendered prior to the effective date, unless he was in service on the day before the effective date, shall not be counted as service.

The time a person was an employee of any territory annexed to the city prior to the effective date shall be counted as a period of service.

In computing the term of service of any employee subsequent to the day before the effective date, the following periods shall be counted as periods of service for age and service, widow's and child's annuity purposes:

(a) The time during which he performed the duties of his position;

(b) Vacations, leaves of absence with whole or part pay, and leaves of absence without pay not longer than 90 days;

(c) Leaves of absence without pay during which a participant is employed full-time by a local labor organization that represents municipal employees, provided that (1) the participant continues to make employee contributions to the Fund as though he were an active employee, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence (and in the case of such employment prior to December 9, 1987, pays to the Fund an amount equal to the employee contributions for such employment plus regular interest thereon as calculated by the board), and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 and until the effective date of this amendatory Act of the 97th General Assembly, and, after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, (2) after January 1, 1989 the participant, or the labor organization on the participant's behalf, makes contributions to the Fund as though it were the employer, in the same amount and same manner as specified under this Article, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 and until the effective date of this amendatory Act of the 97th General Assembly, and, after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and (3) the participant does not receive credit in any pension plan established by the local labor organization based on his employment by the organization;

(d) Any period of disability for which he received (i) a disability benefit under this Article, or (ii) a temporary total disability benefit under the Workers' Compensation Act if the disability results from a condition commonly termed heart attack or stroke or any other condition falling within the broad field of coronary involvement or heart disease, or (iii) whole or part pay;

(e) Any period for which contributions and service credit have been transferred to this Fund under subsection (d) of Section 9-121.1 or subsection (d) of Section 12-127.1 of this Code.

For a person employed by an employer in which the 1921 Act was in effect prior to January 1, 1950, from whose salary deductions are first made under the 1921 Act or this Article after December 31, 1949, any period of service rendered subsequent to the effective date and prior to the date he became an employee and contributor, shall not be counted as a period of service under this Article, except such period for which he made payment as provided in Section 8-230 of this Article, in which case such period shall be counted as a period of service for all annuity purposes hereunder.

In computing the term of service of an employee subsequent to the day before the effective date for ordinary disability benefit purposes, all periods described in the preceding paragraph, except any such period for which he receives ordinary disability benefit, shall be counted as periods of service; provided, that for any person employed by an employer in which this Article was in effect prior to January 1, 1950, from whose salary deductions are first made under this Article after December 31, 1949, any period of service rendered subsequent to the effective date and prior to the date he became an employee and contributor, shall not be counted as a period of service for ordinary disability benefit purposes, unless the person made payment for the period as provided in Section 8-230 of this Article, in which case the period shall be counted as a period of service for ordinary disability purposes for periods of disability on or after the effective date of this amendatory Act of 1997.

Overtime or extra service shall not be included in computing any term of service. Not more than 1 year of service shall be allowed for service rendered during any calendar year.

(Source: P.A. 90-511, eff. 8-22-97.)

(40 ILCS 5/11-215) (from Ch. 108 1/2, par. 11-215)

Sec. 11-215. Computation of service.

(a) In computing the term of service of an employee prior to the effective date, the entire period beginning on the date he was first appointed and ending on the day before the effective date, except any intervening period during which he was separated by withdrawal from service, shall be counted for all purposes of this Article. Only the first year of each period of lay-off or leave of absence without pay, continuing or extending for a period in excess of one year, shall be counted as such service.

(b) For a person employed by an employer for whom this Article was in effect prior to August 1, 1949, from whose salary deductions are first made under this Article after July 31, 1949, any period of service rendered prior to the effective date, unless he was in service on the day before the effective date, shall not be counted as service.

(c) In computing the term of service of an employee subsequent to the day before the effective date, the following periods of time shall be counted as periods of service for annuity purposes:

(1) the time during which he performed the duties of his position;

(2) leaves of absence with whole or part pay, and leaves of absence without pay not longer than 90 days;

(3) leaves of absence without pay during which a participant is employed full-time by a local labor organization that represents municipal employees, provided that (A) the participant continues to make employee contributions to the Fund as though he were an active employee, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence (and in the case of such employment prior to December 9, 1987, pays to the Fund an amount equal to the employee contributions for such employment plus regular interest thereon as calculated by the board), and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 and until the effective date of this amendatory Act of the 97th General Assembly, and, after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, (B) after January 1, 1989 the participant, or the labor organization on the participant's behalf, makes contributions to the Fund as though it were the employer, in the same amount and same manner as specified under this Article, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and based on his current salary with such labor organization after the effective date of this amendatory Act of 1991 and until the effective date of this amendatory Act of the 97th General Assembly, and, after the effective date of this amendatory Act of the 97th General Assembly, based on the regular salary rate received by the participant for his municipal employment immediately prior to such leave of absence, and (C) the participant does not receive credit in any pension plan established by the local labor organization based on his employment by the organization;

(4) any period of disability for which he received (i) a disability benefit under this Article, or (ii) a temporary total disability benefit under the Workers' Compensation Act if the disability results from a condition commonly termed heart attack or stroke or any other condition falling within the broad field of coronary involvement or heart disease, or (iii) whole or part pay.

(d) For a person employed by an employer, or the retirement board, in which "The 1935 Act" was in effect prior to August 1, 1949, from whose salary deductions are first made under "The 1935 Act" or this Article after July 31, 1949, any period of service rendered subsequent to the effective date and prior to August 1, 1949, shall not be counted as a period of service under this Article, except such period for which he made payment, as provided in Section 11-221 of this Article, in which case such period shall be counted as a period of service for all annuity purposes hereunder.

(e) In computing the term of service of an employee subsequent to the day before the effective date for ordinary disability benefit purposes, the following periods of time shall be counted as periods of service:

(1) any period during which he performed the duties of his position;

(2) leaves of absence with whole or part pay;

(3) any period of disability for which he received (i) a duty disability benefit under this Article, or (ii) a temporary total disability benefit under the Workers' Compensation Act if the disability results from a condition commonly termed heart attack or stroke or any other condition falling within the broad field of coronary involvement or heart disease, or (iii) whole or part pay.

However, any period of service rendered by an employee contributor prior to the date he became a contributor to the fund shall not be counted as a period of service for ordinary disability purposes, unless the person made payment for the period as provided in Section 11-221 of this Article, in which case the period shall be counted as a period of service for ordinary disability purposes for periods of disability on or after the effective date of this amendatory Act of 1997.

Overtime or extra service shall not be included in computing any term of service. Not more than 1 year of service shall be allowed for service rendered during any calendar year.

(Source: P.A. 90-511, eff. 8-22-97.)

(40 ILCS 5/17-134) (from Ch. 108 1/2, par. 17-134)

Sec. 17-134. Contributions for leaves of absence; military service; computing service. In computing service for pension purposes the following periods of service shall stand in lieu of a like number of years of teaching service upon payment therefor in the manner hereinafter provided: (a) time spent on a leave of absence granted by the employer; (b) service with teacher or labor organizations based upon special leaves of absence therefor granted by an Employer; (c) a maximum of 5 years spent in the military service of the United States, of which up to 2 years may have been served outside the pension period; (d) unused sick days at termination of service to a maximum of 244 days; (e) time lost due to layoff and curtailment of the school term from June 6 through June 21, 1976; and (f) time spent after June 30, 1982 as a member of the Board of Education, if required to resign from an administrative or teaching position in order to qualify as a member of the Board of Education.

(1) For time spent on or after September 6, 1948 on sabbatical leaves of absence or sick leaves, for which salaries are paid, an Employer shall make payroll deductions at the applicable rates in effect during such periods.

(2) For time spent on a leave of absence granted by the employer for which no salaries are paid, teachers desiring credit therefor shall pay the required contributions at the rates in effect during such periods as though they were in teaching service. If an Employer pays salary for vacations which occur during a teacher's sick leave or maternity or paternity leave without salary, vacation pay for which the teacher would have qualified while in active service shall be considered part of the teacher's total salary for pension purposes. No more than 36 months of leave credit may be allowed any person during the entire term of service. Sabbatical leave credit shall be limited to the time the person on leave without salary under an Employer's rules is allowed to engage in an activity for which he receives salary or compensation.

(3) For time spent prior to September 6, 1948, on sabbatical leaves of absence or sick leaves for which salaries were paid, teachers desiring service credit therefor shall pay the required contributions at the maximum applicable rates in effect during such periods.

(4) For service with teacher or labor organizations authorized by special leaves of absence, for which no payroll deductions are made by an Employer, teachers desiring service credit therefor shall contribute to the Fund upon the basis of the actual salary received from such organizations at the percentage rates in effect during such periods for certified positions with such Employer. To the extent the actual salary exceeds the regular salary, which shall be defined as the salary rate, as calculated by the Board, in effect for the teacher's regular position in teaching service on September 1, 1983 or on the effective date of the leave with the organization, whichever is later, the organization shall pay to the Fund the employer's normal cost as set by the Board on the increment. After the effective date of this amendatory Act of the 97th General Assembly, contributions to the Fund under this subdivision (4) shall be based upon the teacher's regular salary as defined in this subdivision (4).

(5) For time spent in the military service, teachers entitled to and desiring credit therefor shall contribute the amount required for each year of service or fraction thereof at the rates in force (a) at the date of appointment, or (b) on return to teaching service as a regularly certified teacher, as the case may be; provided such rates shall not be less than $450 per year of service. These conditions shall apply unless an Employer elects to and does pay into the Fund the amount which would have been due from such person had he been employed as a teacher during such time. In the case of credit for military service not during the pension period, the teacher must also pay to the Fund an amount determined by the Board to be equal to the employer's normal cost of the benefits accrued from such service, plus interest thereon at 5% per year, compounded annually, from the date of appointment to the date of payment.

The changes to this Section made by Public Act 87-795 shall apply not only to persons who on or after its effective date are in service under the Fund, but also to persons whose status as a teacher terminated prior to that date, whether or not the person is an annuitant on that date. In the case of an annuitant who applies for credit allowable under this Section for a period of military service that did not immediately follow employment, and who has made the required contributions for such credit, the annuity shall be recalculated to include the additional service credit, with the increase taking effect on the date the Fund received written notification of the annuitant's intent to purchase the credit, if payment of all the required contributions is made within 60 days of such notice, or else on the first annuity payment date following the date of payment of the required contributions. In calculating the automatic annual increase for an annuity that has been recalculated under this Section, the increase attributable to the additional service allowable under this amendatory Act of 1991 shall be included in the calculation of automatic annual increases accruing after the effective date of the recalculation.

The total credit for military service shall not exceed 5 years, except that any teacher who on July 1, 1963, had validated credit for more than 5 years of military service shall be entitled to the total amount of such credit.

(6) A maximum of 244 unused sick days credited to his account by an Employer on the date of termination of employment. Members, upon verification of unused sick days, may add this service time to total creditable service.

(7) In all cases where time spent on leave is creditable and no payroll deductions therefor are made by an Employer, persons desiring service credit shall make the required contributions directly to the Fund.

(8) For time lost without pay due to layoff and curtailment of the school term from June 6 through June 21, 1976, as provided in item (e) of the first paragraph of this Section, persons who were contributors on the days immediately preceding such layoff shall receive credit upon paying to the Fund a contribution based on the rates of compensation and employee contributions in effect at the time of such layoff, together with an additional amount equal to 12.2% of the compensation computed for such period of layoff, plus interest on the entire amount at 5% per annum from January 1, 1978 to the date of payment. If such contribution is paid, salary for pension purposes for any year in which such a layoff occurred shall include the compensation recognized for purposes of computing that contribution.

(9) For time spent after June 30, 1982, as a nonsalaried member of the Board of Education, if required to resign from an administrative or teaching position in order to qualify as a member of the Board of Education, an administrator or teacher desiring credit therefor shall pay the required contributions at the rates and salaries in effect during such periods as though the member were in service.

Effective September 1, 1974, the interest charged for validation of service described in paragraphs (2) through (5) of this Section shall be compounded annually at a rate of 5% commencing one year after the termination of the leave or return to service.

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

(40 ILCS 5/17-134.1)

Sec. 17-134.1. Labor organization employees.

(a) A former teacher who is employed by a teacher or labor organization and is not eligible to participate under subdivision (4) of Section 17-134 because he or she is not on a special leave of absence may elect to participate in the Fund for the duration of that employment by so notifying the Fund in writing. Participation shall be subject to the same conditions as are applicable to persons participating under that subdivision (4), and service credit shall be contingent upon the required contributions being received by the Fund.

(b) A person who participates in the Fund under subsection (a) may establish service credit for periods of such employment that took place before beginning participation under this Section by submitting a written application to the Fund. Credit shall be granted upon payment to the Fund of an amount to be determined by the Fund, equal to (i) the employee contributions that would have been paid if the person had participated under subdivision (4) of Section 17-134 during the period for which service credit is to be established, based on the actual salary received, plus (ii) the employer's normal cost associated with that service credit, plus (iii) interest on items (i) and (ii) at the rate of 6% per year, compounded annually, from the date of the service established to the date of payment. Service credit under this subsection shall not be granted until the required contribution has been paid in full; the contribution may be paid at any time before retirement. After the effective date of this amendatory Act of the 97th General Assembly, contributions to the Fund under item (i) of this subsection (b) shall be based upon the teacher's regular salary as defined in subdivision (4) of Section 17-134.

(c) A person who participates in the Fund under subsection (a) may reestablish any service credits previously forfeited by acceptance of a refund by paying to the Fund the amount of the refund plus interest thereon at the rate of 5% per annum, compounded annually, from the date of the refund to the date of payment.

(d) Rollover contributions from other retirement plans qualified under the Internal Revenue Code of 1986 may be used to make the payments required under subsections (b) and (c).

(e) No service credit may be established under this Section for any period of employment for which the person receives service credit under any other provision of this Code.

(Source: P.A. 90-448, eff. 8-16-97.)

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