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| [ Introduced ] | [ Enrolled ] | [ House Amendment 001 ] |
91_SB0055eng SB55 Engrossed LRB9100709EGfg 1 AN ACT to amend the Illinois Pension Code by changing 2 Sections 16-129.1, 16-133, and 16-133.2. 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 changing Sections 16-129.1, 16-133, and 16-133.2 as follows: 7 (40 ILCS 5/16-129.1) 8 Sec. 16-129.1. Optional increase in retirement annuity. 9 (a) A member of the System may qualify for the augmented 10 rate under subdivision (a)(B)(1) of Section 16-133 for all 11 years of creditable service earned before July 1, 1998 by 12 making the optional contribution specified in subsection (b). 13 A member may not elect to qualify for the augmented rate for 14 only a portion of his or her creditable service earned before 15 July 1, 1998. 16 (b) The contribution shall be an amount equal to 1.0% of 17 the member's highest salary rate in the 4 consecutive school 18 years immediately prior to but not including the school year 19 in which the application occurs, multiplied by the number of 20 years of creditable service earned by the member before July 21 1, 1998 or 20, whichever is less. This contribution shall be 22 reduced by 1.0% of that salary rate for every 3 full years of 23 creditable service earned by the member after June 30, 1998. 24 The contribution shall be further reduced at the rate of 25% 25 of the contribution (as reduced for service after June 30, 26 1998) for each year of the member's total creditable service 27 in excess of 34 years. The contribution shall not in any 28 event exceed 20% of that salary rate. 29 The member shall pay to the System the amount of the 30 contribution as calculated at the time of application under 31 this Section. The amount of the contribution determined SB55 Engrossed -2- LRB9100709EGfg 1 under this subsection shall be recalculated at the time of 2 retirement, and if the System determines that the amount paid 3 by the member exceeds the recalculated amount, the System 4 shall refund the difference to the member with regular 5 interest from the date of payment to the date of refund. 6 The contribution required by this subsection shall be 7 paid in one of the following ways or in a combination of the 8 following ways that does not extend over more than 5 years: 9 (i) in a lump sum on or before the date of 10 retirement; 11 (ii) in substantially equal installments over a 12 period of time not to exceed 5 years, as a deduction from 13 salary in accordance with subsection (b) of Section 14 16-154; 15 (iii) if the member becomes an annuitant before 16 June 30, 2003, in substantially equal monthly 17 installments over a 24-month period, by reducing the 18 annuitant's monthly benefit over a 24-month period by the 19 amount of the otherwise applicable contribution. For 20 federal and Illinois tax purposes, the monthly amount by 21 which the annuitant's benefit is reduced shall not be 22 treated as a contribution by the annuitant, but rather as 23 a reduction of the annuitant's monthly benefit. 24 (c) If the member fails to make the full contribution 25 under this Section in a timely fashion, the payments made 26 under this Section shall be refunded to the member, without 27 interest. If the member dies before making the full 28 contribution, the payments made under this Section, together 29 with regular interest thereon, shall be refunded to the 30 member's designated beneficiary for benefits under Section 31 16-138. 32 (d) For purposes of this Section and subdivision 33 (a)(B)(1) of Section 16-133, optional creditable service 34 established by a member shall be deemed to have been earned SB55 Engrossed -3- LRB9100709EGfg 1 at the time of the employment or other qualifying event upon 2 which the service is based, rather than at the time the 3 credit was established in this System. 4 (e) The contributions required under this Section are 5 the responsibility of the teacher and not the teacher's 6 employer. However, an employer of teachers may, after the 7 effective date of this amendatory Act of 1998, specifically 8 agree, through collective bargaining or otherwise, to make 9 the contributions required by this Section on behalf of those 10 teachers. 11 (Source: P.A. 90-582, eff. 5-27-98.) 12 (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133) 13 Sec. 16-133. Retirement annuity; amount. 14 (a) The amount of the retirement annuity shall be the 15 larger of the amounts determined under paragraphs (A) and (B) 16 below: 17 (A) An amount consisting of the sum of the 18 following: 19 (1) An amount that can be provided on an 20 actuarially equivalent basis by the member's 21 accumulated contributions at the time of retirement; 22 and 23 (2) The sum of (i) the amount that can be 24 provided on an actuarially equivalent basis by the 25 member's accumulated contributions representing 26 service prior to July 1, 1947, and (ii) the amount 27 that can be provided on an actuarially equivalent 28 basis by the amount obtained by multiplying 1.4 29 times the member's accumulated contributions 30 covering service subsequent to June 30, 1947; and 31 (3) If there is prior service, 2 times the 32 amount that would have been determined under 33 subparagraph (2) of paragraph (A) above on account SB55 Engrossed -4- LRB9100709EGfg 1 of contributions which would have been made during 2 the period of prior service creditable to the member 3 had the System been in operation and had the member 4 made contributions at the contribution rate in 5 effect prior to July 1, 1947. 6 (B) An amount consisting of the greater of the 7 following: 8 (1) For creditable service earned before July 9 1, 1998 that has not been augmented under Section 10 16-129.1: 1.67% of final average salary for each of 11 the first 10 years of creditable service, 1.90% of 12 final average salary for each year in excess of 10 13 but not exceeding 20, 2.10% of final average salary 14 for each year in excess of 20 but not exceeding 30, 15 and 2.30% of final average salary for each year in 16 excess of 30; and 17 For creditable service earned on or after July 18 1, 1998 by a member who has at least 2430years of 19 creditable service on July 1, 1998 and who does not 20 elect to augment service under Section 16-129.1: 21 2.2% of final average salary for each year of 22 creditable service earned on or after July 1, 1998 23 but before the member reaches a total of 30 years of 24 creditable service and 2.3% of final average salary 25 for each year of creditable service earned on or 26 after July 1, 1998 and after the member reaches a 27 total of 30 years of creditable service; and 28 For all other creditable service: 2.2% of 29 final average salary for each year of creditable 30 service; or 31 (2) 1.5% of final average salary for each year 32 of creditable service plus the sum $7.50 for each of 33 the first 20 years of creditable service. 34 The amount of the retirement annuity determined under SB55 Engrossed -5- LRB9100709EGfg 1 this paragraph (B) shall be reduced by 1/2 of 1% for each 2 month that the member is less than age 60 at the time the 3 retirement annuity begins. However, this reduction shall 4 not apply (i) if the member has at least 35 years of 5 creditable service, or (ii) if the member retires on 6 account of disability under Section 16-149.2 of this 7 Article with at least 20 years of creditable service. 8 (b) For purposes of this Section, final average salary 9 shall be the average salary for the highest 4 consecutive 10 years within the last 10 years of creditable service as 11 determined under rules of the board. The minimum final 12 average salary shall be considered to be $2,400 per year. 13 In the determination of final average salary for members 14 other than elected officials and their appointees when such 15 appointees are allowed by statute, that part of a member's 16 salary for any year beginning after June 30, 1979 which 17 exceeds the member's annual full-time salary rate with the 18 same employer for the preceding year by more than 20% shall 19 be excluded. 20 (c) In determining the amount of the retirement annuity 21 under paragraph (B) of this Section, a fractional year shall 22 be granted proportional credit. 23 (d) The retirement annuity determined under paragraph 24 (B) of this Section shall be available only to members who 25 render teaching service after July 1, 1947 for which member 26 contributions are required, and to annuitants who re-enter 27 under the provisions of Section 16-150. 28 (e) The maximum retirement annuity provided under 29 paragraph (B) of this Section shall be 75% of final average 30 salary. 31 (f) A member retiring after the effective date of this 32 amendatory Act of 1998 shall receive a pension equal to 75% 33 of final average salary if the member is qualified to receive 34 a retirement annuity equal to at least 74.6% of final average SB55 Engrossed -6- LRB9100709EGfg 1 salary under this Article or as proportional annuities under 2 Article 20 of this Code. 3 (Source: P.A. 90-582, eff. 5-27-98.) 4 (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2) 5 Sec. 16-133.2. Early retirement without discount. A 6 member retiring after June 1, 1980 and on or before June 30, 7 20052000, and applying for a retirement annuity within 6 8 months of the last day of teaching for which retirement 9 contributions were required, may elect at the time of 10 application for a retirement annuity, to make a one time 11 member contribution to the System and thereby avoid the 12 reduction in the retirement annuity for retirement before age 13 60 specified in paragraph (B) of Section 16-133. The 14 exercise of the election shall also obligate the last 15 employer to make a one time non-refundable contribution to 16 the System. Substitute teachers wishing to exercise this 17 election must teach 85 or more days in one school term with 18 one employer, who shall be deemed the last employer for 19 purposes of this Section. The last day of teaching with that 20 employer must be within 6 months of the date of application 21 for retirement. All substitute teaching credit applied 22 toward the required 85 days must be earned after June 30, 23 1990. 24 The one time member and employer contributions shall be a 25 percentage of the retiring member's highest annual salary 26 rate used in the determination of the average salary for 27 retirement annuity purposes. However, when determining the 28 one-time member and employer contributions, that part of a 29 member's salary with the same employer which exceeds the 30 annual salary rate for the preceding year by more than 20% 31 shall be excluded. The member contribution shall be at the 32 rate of 7% for the lesser of the following 2 periods: (1) 33 for each year that the member is less than age 60; or (2) for SB55 Engrossed -7- LRB9100709EGfg 1 each year that the member's creditable service is less than 2 35 years. If a member is at least age 55 and has at least 34 3 years of creditable service, no member or employer 4 contribution for the early retirement option shall be 5 required. The employer contribution shall be at the rate of 6 20% for each year the member is under age 60. 7 Upon receipt of the application and election, the System 8 shall determine the one time employee and employer 9 contributions required. The member contribution shall be 10 credited to the individual account of the member and the 11 employer contribution shall be credited to the Employer's 12 Contribution Reserve. The provisions of this Section shall 13 not be applicable until the member's contribution, if any, 14 hasall the above outlined contributions havebeen received 15 by the System; however, the date such contributions are 16 received shall not be considered in determining the effective 17 date of retirement. 18 The number of members working for a single employer who 19 may retire under this Section in any year may be limited at 20 the option of the employer to a specified percentage of those 21 eligible, not less than 30%, with the right to participate to 22 be allocated among those applying on the basis of seniority 23 in the service of the employer. 24 (Source: P.A. 89-10, eff. 3-31-95; 90-582, eff. 5-27-98.) 25 Section 99. Effective date. This Act takes effect upon 26 becoming law.