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91_HB2165
LRB9103372EGfgA
1 AN ACT to amend the Illinois Pension Code by adding
2 Section 1-120.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Pension Code is amended by
6 adding Section 1-120 as follows:
7 (40 ILCS 5/1-120 new)
8 Sec. 1-120. Pickup of optional contributions to another
9 retirement system.
10 (a) This Section provides a mechanism for employer
11 pickup of optional employee contributions to a retirement
12 system other than the one in which the employee is
13 participating with respect to that employment.
14 The provisions of this Section are subject to the
15 requirements of federal law and any specific requirements of
16 the applicable Articles of this Code.
17 (b) For the purposes of this Section:
18 "Retirement system" or "system" means any pension fund or
19 retirement system established under this Code.
20 "Participating retirement system" means a retirement
21 system that has in effect a rule making the benefits of this
22 Section available to employees who participate in the system.
23 "Employee" means any active contributing member of a
24 retirement system, whether or not so called in the specific
25 Article governing that system.
26 "Employer" means the employer providing the employment
27 with respect to which the employee participates in a
28 retirement system, whether or not so called in the specific
29 Article governing that system.
30 (c) This Section applies only to retirement systems in
31 which employer pickup of optional employee contributions is
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1 authorized by the specific Article governing the system.
2 (d) If the Article governing a retirement system
3 authorizes employer pickup of optional employee contributions
4 to that system, then the board of trustees of the system may,
5 by rule, allow employees to elect to have the employer pick
6 up optional employee contributions to the other participating
7 retirement systems. Rules adopted under this subsection
8 shall not take effect until at least one retirement system
9 has received an affirmative compliance ruling on its
10 participation from the U.S. Internal Revenue Service.
11 (e) An employee in a participating retirement system may
12 elect to have the employer pick up optional contributions
13 that the employee has elected to pay to any other
14 participating system. The optional contributions so picked
15 up shall be treated as employer contributions for the
16 purposes of determining federal tax treatment. The employer
17 shall pick up the contributions by a reduction in the cash
18 salary of the employee and shall pay the contributions from
19 the same source of funds that is used to pay earnings to the
20 employee. The employee's election to have the optional
21 contributions picked up is irrevocable, and the optional
22 contributions may not thereafter be prepaid, by direct
23 payment or otherwise.
24 (f) Contributions picked up under this Section shall be
25 paid by the employer to the retirement system in which the
26 employee participates with respect to that employment. That
27 retirement system shall hold the contributions in trust for
28 the benefit of the employee until the full amount of the
29 contribution has been received; it shall then transfer the
30 accumulated contribution to the other participating
31 retirement system. No interest shall accrue on the
32 contributions while they are held in trust by the collecting
33 system.
34 (g) This Section does not limit pickup procedures
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1 currently in place under which (1) 2 or more retirement
2 systems that share a common employer allow employer pickup
3 between systems or (2) a retirement system with more than one
4 employer allows employer pickup among those employers.
5 Section 99. Effective date. This Act takes effect upon
6 becoming law.