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91_HB0399
LRB9101166EGfgA
1 AN ACT to amend the Illinois Pension Code by adding
2 Sections 4-105e and 4-109.3 and changing Sections 4-109 and
3 4-109.1 and to amend the State Mandates Act.
4 Be it enacted by the People of the State of Illinois,
5 represented in the General Assembly:
6 Section 5. The Illinois Pension Code is amended by
7 adding Sections 4-105e and 4-109.3 and changing Sections
8 4-109 and 4-109.1 as follows:
9 (40 ILCS 5/4-105e new)
10 Sec. 4-105e. Deferred Retirement Option Plan. "Deferred
11 Retirement Option Plan" or "DROP plan" means the Deferred
12 Retirement Option Plan established under Section 4-109.3.
13 (40 ILCS 5/4-109) (from Ch. 108 1/2, par. 4-109)
14 Sec. 4-109. Pension.
15 (a) A firefighter age 50 or more with 20 or more years
16 of creditable service, who is no longer in service as a
17 firefighter, shall receive a monthly pension of 1/2 the
18 monthly salary attached to the rank held by him or her in the
19 fire service at the date of retirement.
20 The monthly pension shall be increased by 1/12 of 2% of
21 such monthly salary for each additional month over 20 years
22 of service through 30 years of service and 1/12 of 1% of such
23 monthly salary for each additional month over 30 years of
24 service, to a maximum of 75% of such monthly salary.
25 For a firefighter who retires at the conclusion of
26 participation in the DROP plan, calculation of the amount of
27 the retirement pension shall be based on the firefighter's
28 salary and accumulated service on the date he or she began
29 participation in the DROP plan and shall include any annual
30 increases that would have accrued under Section 4-109.1 if
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1 the firefighter had retired on that date.
2 (b) A firefighter who retires or is separated from
3 service having at least 10 but less than 20 years of
4 creditable service, who is not entitled to receive a
5 disability pension, and who did not apply for a refund of
6 contributions at his or her last separation from service
7 shall receive a monthly pension upon attainment of age 60
8 based on the monthly salary attached to his or her rank in
9 the fire service on the date of retirement or separation from
10 service according to the following schedule:
11 For 10 years of service, 15% of salary;
12 For 11 years of service, 17.6% of salary;
13 For 12 years of service, 20.4% of salary;
14 For 13 years of service, 23.4% of salary;
15 For 14 years of service, 26.6% of salary;
16 For 15 years of service, 30% of salary;
17 For 16 years of service, 33.6% of salary;
18 For 17 years of service, 37.4% of salary;
19 For 18 years of service, 41.4% of salary;
20 For 19 years of service, 45.6% of salary.
21 (Source: P.A. 83-1440.)
22 (40 ILCS 5/4-109.1) (from Ch. 108 1/2, par. 4-109.1)
23 Sec. 4-109.1. Increase in pension.
24 (a) Except as provided in subsection (e), the monthly
25 pension of a firefighter who retires after July 1, 1971 and
26 prior to January 1, 1986, shall, upon either the first of the
27 month following the first anniversary of the date of
28 retirement if 60 years of age or over at retirement date, or
29 upon the first day of the month following attainment of age
30 60 if it occurs after the first anniversary of retirement, be
31 increased by 2% of the originally granted monthly pension and
32 by an additional 2% in each January thereafter. Effective
33 January 1976, the rate of the annual increase shall be 3% of
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1 the originally granted monthly pension.
2 (b) The monthly pension of a firefighter who retired
3 from service with 20 or more years of service, on or before
4 July 1, 1971, shall be increased, in January of the year
5 following the year of attaining age 65 or in January 1972, if
6 then over age 65, by 2% of the originally granted monthly
7 pension, for each year the firefighter received pension
8 payments. In each January thereafter, he or she shall
9 receive an additional increase of 2% of the original monthly
10 pension. Effective January 1976, the rate of the annual
11 increase shall be 3%.
12 (c) The monthly pension of a firefighter who is
13 receiving a disability pension under this Article shall be
14 increased, in January of the year following the year the
15 firefighter attains age 60, or in January 1974, if then over
16 age 60, by 2% of the originally granted monthly pension for
17 each year he or she received pension payments. In each
18 January thereafter, the firefighter shall receive an
19 additional increase of 2% of the original monthly pension.
20 Effective January 1976, the rate of the annual increase shall
21 be 3%.
22 (c-1) On January 1, 1998, every child's disability
23 benefit payable on that date under Section 4-110 or 4-110.1
24 shall be increased by an amount equal to 1/12 of 3% of the
25 amount of the benefit, multiplied by the number of months for
26 which the benefit has been payable. On each January 1
27 thereafter, every child's disability benefit payable under
28 Section 4-110 or 4-110.1 shall be increased by 3% of the
29 amount of the benefit then being paid, including any previous
30 increases received under this Article. These increases are
31 not subject to any limitation on the maximum benefit amount
32 included in Section 4-110 or 4-110.1.
33 (d) The monthly pension of a firefighter who retires
34 after January 1, 1986, shall, upon either the first of the
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1 month following the first anniversary of the date of
2 retirement if 55 years of age or over at retirement date, or
3 upon the first day of the month following attainment of age
4 55 if it occurs after the first anniversary of retirement, be
5 increased by 3% of the originally granted monthly pension for
6 each full year that has elapsed since the pension began, and
7 by an additional 3% in each January thereafter.
8 For the purpose of calculating eligibility for increases
9 under this Section, the date of retirement of a firefighter
10 who retires at the conclusion of participation in the DROP
11 plan shall be deemed to be the date he or she began
12 participation in the DROP plan.
13 (e) Notwithstanding the provisions of subsection (a),
14 upon the first day of the month following (1) the first
15 anniversary of the date of retirement, or (2) the attainment
16 of age 55, or (3) July 1, 1987, whichever occurs latest, the
17 monthly pension of a firefighter who retired on or after
18 January 1, 1977 and on or before January 1, 1986 and did not
19 receive an increase under subsection (a) before July 1, 1987,
20 shall be increased by 3% of the originally granted monthly
21 pension for each full year that has elapsed since the pension
22 began, and by an additional 3% in each January thereafter.
23 The increases provided under this subsection are in lieu of
24 the increases provided in subsection (a).
25 (Source: P.A. 90-32, eff. 6-27-97.)
26 (40 ILCS 5/4-109.3 new)
27 Sec. 4-109.3. Deferred Retirement Option Plan.
28 (a) The Deferred Retirement Option Plan created by this
29 Section shall first become available to eligible firefighters
30 on January 1, 2000.
31 (b) To be eligible to participate in the DROP plan, a
32 firefighter must (i) be in active service, (ii) have attained
33 age 50, and (iii) have at least 20 years of creditable
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1 service in the Fund. A firefighter may participate in the
2 DROP plan only once.
3 (c) An election to participate in the DROP plan must be
4 made within 3 years after becoming eligible under subsection
5 (b) or by January 1, 2002, whichever is later. The election,
6 once made, is irrevocable.
7 The election to participate in the DROP plan shall be
8 made in writing on forms provided for that purpose by the
9 Board and shall be filed with the Board. The application
10 must indicate the date upon which participation in the DROP
11 plan is to begin, which shall be the first day of a calendar
12 month and not less than 30 days nor more than 90 days after
13 the date of filing the application.
14 As a part of the application, the firefighter must file
15 with the Board and with his or her employer an irrevocable
16 letter of resignation from employment, effective on the date
17 of termination of the firefighter's participation in the DROP
18 plan (unless that termination results from acceptance of a
19 disability benefit).
20 (d) A firefighter's participation in the DROP plan shall
21 commence on the date specified in the application and shall
22 end upon (i) termination of service, (ii) death of the
23 firefighter, (iii) disability for which the firefighter
24 receives a benefit under Section 4-110, 4-110.1, or 4-111, or
25 (iv) expiration of 3 years from the date the firefighter's
26 participation in the DROP plan began, whichever occurs first.
27 (e) A firefighter who is participating in the DROP plan
28 shall be considered an active firefighter for the purposes of
29 this Article, including Section 4-121, but shall be subject
30 to the special conditions of the DROP plan.
31 A firefighter shall continue to make the contributions
32 that are required for active firefighters during his or her
33 participation in the DROP plan. These contributions shall be
34 accumulated in the firefighter's DROP account and shall be
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1 treated as being "picked up" within the meaning of Section
2 4-118.2 of this Code and Section 414(h)(2) of the Internal
3 Revenue Code of 1986, as amended.
4 A firefighter who is participating in the DROP plan shall
5 not receive service credit for the period of that
6 participation, and the salary earned during that period shall
7 be disregarded in calculating the firefighter's benefits
8 under this Article.
9 (f) A firefighter who participates in the DROP plan may
10 terminate service at any time during participation in the
11 DROP plan. A firefighter who participates in the DROP plan
12 must terminate service on the last day of participation in
13 the DROP plan, unless participation in the DROP plan is ended
14 due to acceptance of a disability benefit.
15 (g) A firefighter who is participating in the DROP plan
16 remains eligible to apply for a disability benefit under
17 Section 4-110, 4-110.1, or 4-111, but participation in the
18 DROP plan ceases upon acceptance of the disability benefit.
19 If participation in the DROP plan is ended due to acceptance
20 of a disability benefit, (1) the disabled firefighter shall
21 be credited with employee contributions and creditable
22 service for the period of participation in the DROP plan, (2)
23 the firefighter's letter of resignation from service that is
24 required to be filed at the time of application to
25 participate in the DROP plan is void, and (3) the amounts in
26 the disabled firefighter's DROP account are forfeited to the
27 Fund.
28 (h) The Fund shall maintain a separate DROP account for
29 the benefit of each firefighter who becomes a participant in
30 the DROP plan. The Fund shall pay into the firefighter's
31 DROP account:
32 (1) for each month of the firefighter's
33 participation in the DROP plan, an amount equal to the
34 monthly retirement pension that the firefighter would
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1 have been eligible to receive if the firefighter had
2 terminated service and taken a retirement pension on the
3 date his or her participation in the DROP plan began,
4 including any increases in pension for which the
5 firefighter would have been eligible under Section
6 4-109.1;
7 (2) the employee contributions paid by the
8 firefighter during the period of participation in the
9 DROP plan; and
10 (3) interest on the balance in the DROP account, at
11 the rate of 7% per annum, paid and compounded monthly,
12 throughout the period of participation in the DROP plan.
13 The DROP account shall cease earning interest when the
14 firefighter's participation in the DROP plan ends.
15 (i) In addition to the retirement pension under Section
16 4-109, a firefighter who terminates service and retires at
17 the conclusion of his or her participation in the DROP plan
18 shall receive, upon retirement, a DROP benefit equal to the
19 balance in the firefighter's DROP account at the time of
20 retirement.
21 At the time of application for a retirement pension, the
22 firefighter shall elect to receive the DROP benefit in the
23 form of either a lump sum or an actuarially equivalent
24 annuity for life. If a lump sum payment is elected, it may
25 be rolled over into an individual retirement account (IRA) or
26 a qualified retirement plan. A DROP benefit payable in the
27 form of an annuity shall be in a fixed amount not subject to
28 annual or other increases. A DROP benefit shall be treated
29 as a retirement benefit for the purposes of Section 1-119
30 (QILDROs).
31 (j) If a firefighter receiving a DROP benefit in the
32 form of an annuity re-enters service, the DROP benefit
33 annuity payments shall be suspended until the firefighter's
34 subsequent retirement.
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1 (k) If a firefighter dies while participating in the
2 DROP plan, the DROP benefit shall be paid as a lump sum to
3 the surviving spouse or other survivor of the firefighter
4 entitled to a pension under Section 14-114 or, if there is no
5 such survivor, then to the deceased firefighter's estate.
6 (l) If a retired firefighter dies while receiving a DROP
7 benefit in the form of an annuity, and the DROP account
8 balance at the time of retirement exceeds the total amount of
9 DROP benefit annuity payments received, the excess shall be
10 refunded to the surviving spouse or other survivor of the
11 firefighter entitled to a pension under Section 14-114 or, if
12 there is no such survivor, then to the deceased firefighter's
13 estate.
14 Section 90. The State Mandates Act is amended by adding
15 Section 8.23 as follows:
16 (30 ILCS 805/8.23 new)
17 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
18 and 8 of this Act, no reimbursement by the State is required
19 for the implementation of any mandate created by this
20 amendatory Act of the 91st General Assembly.
21 Section 99. Effective date. This Act takes effect upon
22 becoming law.