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| [ Introduced ] | [ Engrossed ] | [ House Amendment 001 ] |
91_SB0055enr SB55 Enrolled LRB9100709EGfg 1 AN ACT to amend the Illinois Pension Code by changing 2 Sections 16-129.1, 16-133, 16-133.2, 17-116.1, and 17-119.1 3 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 changing Sections 16-129.1, 16-133, 16-133.2, 17-116.1, and 8 17-119.1 as follows: 9 (40 ILCS 5/16-129.1) 10 Sec. 16-129.1. Optional increase in retirement annuity. 11 (a) A member of the System may qualify for the augmented 12 rate under subdivision (a)(B)(1) of Section 16-133 for all 13 years of creditable service earned before July 1, 1998 by 14 making the optional contribution specified in subsection (b). 15 A member may not elect to qualify for the augmented rate for 16 only a portion of his or her creditable service earned before 17 July 1, 1998. 18 (b) The contribution shall be an amount equal to 1.0% of 19 the member's highest salary rate in the 4 consecutive school 20 years immediately prior to but not including the school year 21 in which the application occurs, multiplied by the number of 22 years of creditable service earned by the member before July 23 1, 1998 or 20, whichever is less. This contribution shall be 24 reduced by 1.0% of that salary rate for every 3 full years of 25 creditable service earned by the member after June 30, 1998. 26 The contribution shall be further reduced at the rate of 25% 27 of the contribution (as reduced for service after June 30, 28 1998) for each year of the member's total creditable service 29 in excess of 34 years. The contribution shall not in any 30 event exceed 20% of that salary rate. 31 The member shall pay to the System the amount of the SB55 Enrolled -2- LRB9100709EGfg 1 contribution as calculated at the time of application under 2 this Section. The amount of the contribution determined 3 under this subsection shall be recalculated at the time of 4 retirement, and if the System determines that the amount paid 5 by the member exceeds the recalculated amount, the System 6 shall refund the difference to the member with regular 7 interest from the date of payment to the date of refund. 8 The contribution required by this subsection shall be 9 paid in one of the following ways or in a combination of the 10 following ways that does not extend over more than 5 years: 11 (i) in a lump sum on or before the date of 12 retirement; 13 (ii) in substantially equal installments over a 14 period of time not to exceed 5 years, as a deduction from 15 salary in accordance with subsection (b) of Section 16 16-154; 17 (iii) if the member becomes an annuitant before 18 June 30, 2003, in substantially equal monthly 19 installments over a 24-month period, by reducing the 20 annuitant's monthly benefit over a 24-month period by the 21 amount of the otherwise applicable contribution. For 22 federal and Illinois tax purposes, the monthly amount by 23 which the annuitant's benefit is reduced shall not be 24 treated as a contribution by the annuitant, but rather as 25 a reduction of the annuitant's monthly benefit. 26 (c) If the member fails to make the full contribution 27 under this Section in a timely fashion, the payments made 28 under this Section shall be refunded to the member, without 29 interest. If the member dies before making the full 30 contribution, the payments made under this Section, together 31 with regular interest thereon, shall be refunded to the 32 member's designated beneficiary for benefits under Section 33 16-138. 34 (d) For purposes of this Section and subdivision SB55 Enrolled -3- LRB9100709EGfg 1 (a)(B)(1) of Section 16-133, optional creditable service 2 established by a member shall be deemed to have been earned 3 at the time of the employment or other qualifying event upon 4 which the service is based, rather than at the time the 5 credit was established in this System. 6 (e) The contributions required under this Section are 7 the responsibility of the teacher and not the teacher's 8 employer. However, an employer of teachers may, after the 9 effective date of this amendatory Act of 1998, specifically 10 agree, through collective bargaining or otherwise, to make 11 the contributions required by this Section on behalf of those 12 teachers. 13 (Source: P.A. 90-582, eff. 5-27-98.) 14 (40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133) 15 Sec. 16-133. Retirement annuity; amount. 16 (a) The amount of the retirement annuity shall be the 17 larger of the amounts determined under paragraphs (A) and (B) 18 below: 19 (A) An amount consisting of the sum of the 20 following: 21 (1) An amount that can be provided on an 22 actuarially equivalent basis by the member's 23 accumulated contributions at the time of retirement; 24 and 25 (2) The sum of (i) the amount that can be 26 provided on an actuarially equivalent basis by the 27 member's accumulated contributions representing 28 service prior to July 1, 1947, and (ii) the amount 29 that can be provided on an actuarially equivalent 30 basis by the amount obtained by multiplying 1.4 31 times the member's accumulated contributions 32 covering service subsequent to June 30, 1947; and 33 (3) If there is prior service, 2 times the SB55 Enrolled -4- LRB9100709EGfg 1 amount that would have been determined under 2 subparagraph (2) of paragraph (A) above on account 3 of contributions which would have been made during 4 the period of prior service creditable to the member 5 had the System been in operation and had the member 6 made contributions at the contribution rate in 7 effect prior to July 1, 1947. 8 (B) An amount consisting of the greater of the 9 following: 10 (1) For creditable service earned before July 11 1, 1998 that has not been augmented under Section 12 16-129.1: 1.67% of final average salary for each of 13 the first 10 years of creditable service, 1.90% of 14 final average salary for each year in excess of 10 15 but not exceeding 20, 2.10% of final average salary 16 for each year in excess of 20 but not exceeding 30, 17 and 2.30% of final average salary for each year in 18 excess of 30; and 19 For creditable service earned on or after July 20 1, 1998 by a member who has at least 2430years of 21 creditable service on July 1, 1998 and who does not 22 elect to augment service under Section 16-129.1: 23 2.2% of final average salary for each year of 24 creditable service earned on or after July 1, 1998 25 but before the member reaches a total of 30 years of 26 creditable service and 2.3% of final average salary 27 for each year of creditable service earned on or 28 after July 1, 1998 and after the member reaches a 29 total of 30 years of creditable service; and 30 For all other creditable service: 2.2% of 31 final average salary for each year of creditable 32 service; or 33 (2) 1.5% of final average salary for each year 34 of creditable service plus the sum $7.50 for each of SB55 Enrolled -5- LRB9100709EGfg 1 the first 20 years of creditable service. 2 The amount of the retirement annuity determined under 3 this paragraph (B) shall be reduced by 1/2 of 1% for each 4 month that the member is less than age 60 at the time the 5 retirement annuity begins. However, this reduction shall 6 not apply (i) if the member has at least 35 years of 7 creditable service, or (ii) if the member retires on 8 account of disability under Section 16-149.2 of this 9 Article with at least 20 years of creditable service. 10 (b) For purposes of this Section, final average salary 11 shall be the average salary for the highest 4 consecutive 12 years within the last 10 years of creditable service as 13 determined under rules of the board. The minimum final 14 average salary shall be considered to be $2,400 per year. 15 In the determination of final average salary for members 16 other than elected officials and their appointees when such 17 appointees are allowed by statute, that part of a member's 18 salary for any year beginning after June 30, 1979 which 19 exceeds the member's annual full-time salary rate with the 20 same employer for the preceding year by more than 20% shall 21 be excluded. 22 (c) In determining the amount of the retirement annuity 23 under paragraph (B) of this Section, a fractional year shall 24 be granted proportional credit. 25 (d) The retirement annuity determined under paragraph 26 (B) of this Section shall be available only to members who 27 render teaching service after July 1, 1947 for which member 28 contributions are required, and to annuitants who re-enter 29 under the provisions of Section 16-150. 30 (e) The maximum retirement annuity provided under 31 paragraph (B) of this Section shall be 75% of final average 32 salary. 33 (f) A member retiring after the effective date of this 34 amendatory Act of 1998 shall receive a pension equal to 75% SB55 Enrolled -6- LRB9100709EGfg 1 of final average salary if the member is qualified to receive 2 a retirement annuity equal to at least 74.6% of final average 3 salary under this Article or as proportional annuities under 4 Article 20 of this Code. 5 (Source: P.A. 90-582, eff. 5-27-98.) 6 (40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2) 7 Sec. 16-133.2. Early retirement without discount. A 8 member retiring after June 1, 1980 and on or before June 30, 9 20052000, and applying for a retirement annuity within 6 10 months of the last day of teaching for which retirement 11 contributions were required, may elect at the time of 12 application for a retirement annuity, to make a one time 13 member contribution to the System and thereby avoid the 14 reduction in the retirement annuity for retirement before age 15 60 specified in paragraph (B) of Section 16-133. The 16 exercise of the election shall also obligate the last 17 employer to make a one time non-refundable contribution to 18 the System. Substitute teachers wishing to exercise this 19 election must teach 85 or more days in one school term with 20 one employer, who shall be deemed the last employer for 21 purposes of this Section. The last day of teaching with that 22 employer must be within 6 months of the date of application 23 for retirement. All substitute teaching credit applied 24 toward the required 85 days must be earned after June 30, 25 1990. 26 The one time member and employer contributions shall be a 27 percentage of the retiring member's highest annual salary 28 rate used in the determination of the average salary for 29 retirement annuity purposes. However, when determining the 30 one-time member and employer contributions, that part of a 31 member's salary with the same employer which exceeds the 32 annual salary rate for the preceding year by more than 20% 33 shall be excluded. The member contribution shall be at the SB55 Enrolled -7- LRB9100709EGfg 1 rate of 7% for the lesser of the following 2 periods: (1) 2 for each year that the member is less than age 60; or (2) for 3 each year that the member's creditable service is less than 4 35 years. If a member is at least age 55 and has at least 34 5 years of creditable service, no member or employer 6 contribution for the early retirement option shall be 7 required. The employer contribution shall be at the rate of 8 20% for each year the member is under age 60. 9 Upon receipt of the application and election, the System 10 shall determine the one time employee and employer 11 contributions required. The member contribution shall be 12 credited to the individual account of the member and the 13 employer contribution shall be credited to the Employer's 14 Contribution Reserve. The provisions of this Section shall 15 not be applicable until the member's contribution, if any, 16 hasall the above outlined contributions havebeen received 17 by the System; however, the date such contributions are 18 received shall not be considered in determining the effective 19 date of retirement. 20 The number of members working for a single employer who 21 may retire under this Section in any year may be limited at 22 the option of the employer to a specified percentage of those 23 eligible, not less than 30%, with the right to participate to 24 be allocated among those applying on the basis of seniority 25 in the service of the employer. 26 (Source: P.A. 89-10, eff. 3-31-95; 90-582, eff. 5-27-98.) 27 (40 ILCS 5/17-116.1) (from Ch. 108 1/2, par. 17-116.1) 28 Sec. 17-116.1. Early retirement without discount. 29 (a) A member retiring after June 1, 1980 and before June 30 30, 1995 and within 6 months of the last day of teaching for 31 which retirement contributions were required, may elect at 32 the time of application to make a one time employee 33 contribution to the system and thereby avoid the early SB55 Enrolled -8- LRB9100709EGfg 1 retirement reduction in allowance specified in paragraph (4) 2 of Section 17-116 of this Article. The exercise of the 3 election shall obligate the last Employer to also make a one 4 time non-refundable contribution to the Fund. 5 (b) Subject to authorization by the Employer as provided 6 in subsection (c), a member retiring on or after June 30, 7 1995 and on or before June 30, 20052000and within 6 months 8 of the last day of teaching for which retirement 9 contributions were required may elect at the time of 10 application to make a one-time employee contribution to the 11 Fund and thereby avoid the early retirement reduction in 12 allowance specified in paragraph (4) of Section 17-116. The 13 exercise of the election shall obligate the last Employer to 14 also make a one-time nonrefundable contribution to the Fund. 15 (c) The benefits provided in subsection (b) are 16 available only to members who retire, during a specified 17 period, from employment with an Employer that has adopted and 18 filed with the Board a resolution expressly providing for the 19 creation of an early retirement without discount program 20 under this Section for that period. 21 The Employer has the full discretion and authority to 22 determine whether an early retirement without discount 23 program is in its best interest and to provide such a program 24 to its eligible employees in accordance with this Section. 25 The Employer may decide to authorize such a program for one 26 or more of the following periods: for the period beginning 27 July 1, 1997 and ending June 30, 1998, in which case the 28 resolution must be adopted by January 1, 1998; for the period 29 beginning July 1, 1998 and ending June 30, 1999, in which 30 case the resolution must be adopted by March 31, 1998;and31 for the period beginning July 1, 1999 and ending June 30, 32 2000, in which case the resolution must be adopted by March 33 31, 1999; for the period beginning July 1, 2000 and ending 34 June 30, 2001, in which case the resolution must be adopted SB55 Enrolled -9- LRB9100709EGfg 1 by March 31, 2000; for the period beginning July 1, 2001 and 2 ending June 30, 2002, in which case the resolution must be 3 adopted by March 31, 2001; for the period beginning July 1, 4 2002 and ending June 30, 2003, in which case the resolution 5 must be adopted by March 31, 2002; for the period beginning 6 July 1, 2003 and ending June 30, 2004, in which case the 7 resolution must be adopted by March 31, 2003; and for the 8 period beginning July 1, 2004 and ending June 30, 2005, in 9 which case the resolution must be adopted by March 31, 2004. 10 The resolution must be filed with the Board within 10 days 11 after it is adopted. A single resolution may authorize an 12 early retirement without discount program as provided in this 13 Section for more than one period. 14 Notwithstanding Section 17-157, the Employer shall also 15 have full discretion and authority to determine whether to 16 allow its employees who withdrew from service on or after 17 June 30, 1995 and before June 27, 1997 to participate in an 18 early retirement without discount program under subsection 19 (b). An early retirement without discount program for those 20 who withdrew from service on or after June 30, 1995 and 21 before June 27, 1997 may be authorized only by a resolution 22 of the Employer that is adopted by January 1, 1998 and filed 23 with the Board within 10 days after its adoption. If such a 24 resolution is duly adopted and filed, a person who (i) 25 withdrew from service with the Employer on or after June 30, 26 1995 and before June 27, 1997, (ii) qualifies for early 27 retirement without discount under subsection (b), (iii) 28 applies to the Fund within 90 days after the authorizing 29 resolution is adopted, and (iv) pays the required employee 30 contribution shall have his or her retirement pension 31 recalculated in accordance with subsection (b). The 32 resulting increase shall be effective retroactively to the 33 starting date of the retirement pension. 34 (d) The one-time employee contribution shall be equal to SB55 Enrolled -10- LRB9100709EGfg 1 7% of the retiring member's highest full-time annual salary 2 rate used in the determination of the average salary rate for 3 retirement pension, or if not full-time then the full-time 4 equivalent, multiplied by (1) the number of years the teacher 5 is under age 60, or (2) the number of years the employee's 6 creditable service is less than 3435years, whichever is 7 less. 8 The Employer contribution shall be 20% of such salary 9 multiplied by such number of years. 10 (e) Upon receipt of the application and election, the 11 Board shall determine the one time employee and Employer 12 contributions. The provisions of this Section shall not be 13 applicable until the employee contribution, if any, hasall14the above outlined contributions havebeen received by the 15 Fund; however, the date that contribution issuch16contributions arereceived shall not be considered in 17 determining the effective date of retirement. 18 (f) The number of employees who may retire under this 19 Section in any year may be limited at the option of the 20 Employer to a specified percentage of those eligible, not 21 lower than 30%, with the right to participate to be allocated 22 among those applying on the basis of seniority in the service 23 of the Employer. 24 (Source: P.A. 90-32, eff. 6-27-97; 90-448, eff. 8-16-97; 25 90-566, eff. 1-2-98.) 26 (40 ILCS 5/17-119.1) 27 Sec. 17-119.1. Optional increase in retirement annuity. 28 (a) A member of the Fund may qualify for the augmented 29 rate under subdivision (b)(3) of Section 17-116 for all years 30 of creditable service earned before July 1, 1998 by making 31 the optional contribution specified in subsection (b). A 32 member may not elect to qualify for the augmented rate for 33 only a portion of his or her creditable service earned before SB55 Enrolled -11- LRB9100709EGfg 1 July 1, 1998. 2 (b) The contribution shall be an amount equal to 1.0% of 3 the member's highest salary rate in the 4 consecutive school 4 years immediately prior to but not including the school year 5 in which the application occurs, multiplied by the number of 6 years of creditable service earned by the member before July 7 1, 1998 or 20, whichever is less. This contribution shall be 8 reduced by 1.0% of that salary rate for every 3 full years of 9 creditable service earned by the member after June 30, 1998. 10 The contribution shall be further reduced at the rate of 25% 11 of the contribution (as reduced for service after June 30, 12 1998) for each year of the member's total creditable service 13 in excess of 34 years. The contribution shall not in any 14 event exceed 20% of that salary rate. 15 The member shall pay to the Fund the amount of the 16 contribution as calculated at the time of application under 17 this Section. The amount of the contribution determined 18 under this subsection shall be recalculated at the time of 19 retirement, and if the Fund determines that the amount paid 20 by the member exceeds the recalculated amount, the Fund shall 21 refund the difference to the member with regular interest 22 from the date of payment to the date of refund. 23 The contribution required by this subsection shall be 24 paid in one of the following ways or in a combination of the 25 following ways that does not extend over more than 5 years: 26 (i) in a lump sum on or before the date of 27 retirement; 28 (ii) in substantially equal installments over a 29 period of time not to exceed 5 years, as a deduction from 30 salary in accordance with Section 17-130.2; 31 (iii) if the member becomes an annuitant before 32 June 30, 2003, in substantially equal monthly 33 installments over a 24-month period, by a deduction from 34 the annuitant's monthly benefit. SB55 Enrolled -12- LRB9100709EGfg 1 (c) If the member fails to make the full contribution 2 under this Section in a timely fashion, the payments made 3 under this Section shall be refunded to the member, without 4 interest. If the member dies before making the full 5 contribution, the payments made under this Section shall be 6 refunded to the member's designated beneficiary. 7 (d) For purposes of this Section and subsection (b) of 8 Section 17-116, optional creditable service established by a 9 member shall be deemed to have been earned at the time of the 10 employment or other qualifying event upon which the service 11 is based, rather than at the time the credit was established 12 in this Fund. 13 (e) The contributions required under this Section are 14 the responsibility of the teacher and not the teacher's 15 employer. However, an employer of teachers may, after the 16 effective date of this amendatory Act of 1998, specifically 17 agree, through collective bargaining or otherwise, to make 18 the contributions required by this Section on behalf of those 19 teachers. 20 (Source: P.A. 90-582, eff. 5-27-98.) 21 Section 90. The State Mandates Act is amended by adding 22 Section 8.23 as follows: 23 (30 ILCS 805/8.23 new) 24 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6 25 and 8 of this Act, no reimbursement by the State is required 26 for the implementation of any mandate created by this 27 amendatory Act of the 91st General Assembly. SB55 Enrolled -13- LRB9100709EGfg 1 Section 99. Effective date. This Act takes effect upon 2 becoming law.