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91_SB0660
LRB9102928EGpr
1 AN ACT to amend the Illinois Pension Code by changing
2 Sections 7-139, 7-141, 7-141.1, 7-166, 7-167, and 7-211 and
3 adding Section 7-224.
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 7-139, 7-141, 7-141.1, 7-166, 7-167, and
8 7-211 and adding Section 7-224 as follows:
9 (40 ILCS 5/7-139) (from Ch. 108 1/2, par. 7-139)
10 Sec. 7-139. Credits and creditable service to employees.
11 (a) Each participating employee shall be granted credits
12 and creditable service, for purposes of determining the
13 amount of any annuity or benefit to which he or a beneficiary
14 is entitled, as follows:
15 1. For prior service: Each participating employee
16 who is an employee of a participating municipality or
17 participating instrumentality on the effective date shall
18 be granted creditable service, but no credits under
19 paragraph 2 of this subsection (a), for periods of prior
20 service for which credit has not been received under any
21 other pension fund or retirement system established under
22 this Code, as follows:
23 If the effective date of participation for the
24 participating municipality or participating
25 instrumentality is on or before January 1, 1998,
26 creditable service shall be granted for the entire period
27 of prior service with that employer without any employee
28 contribution.
29 If the effective date of participation for the
30 participating municipality or participating
31 instrumentality is after January 1, 1998, creditable
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1 service shall be granted for the last 20% of the period
2 of prior service with that employer, but no more than 5
3 years, without any employee contribution. A
4 participating employee may establish creditable service
5 for the remainder of the period of prior service with
6 that employer by making an application in writing,
7 accompanied by payment of an employee contribution in an
8 amount determined by the Fund, based on the employee
9 contribution rates in effect at the time of application
10 for the creditable service and the employee's salary rate
11 on the effective date of participation for that employer,
12 plus interest at the effective rate from the date of the
13 prior service to the date of payment. Application for
14 this creditable service may be made at any time while the
15 employee is still in service.
16 Any person who has withdrawn from the service of a
17 participating municipality or participating
18 instrumentality prior to the effective date, who reenters
19 the service of the same municipality or participating
20 instrumentality after the effective date and becomes a
21 participating employee is entitled to creditable service
22 for prior service as otherwise provided in this
23 subdivision (a)(1) only if he or she renders 2 years of
24 service as a participating employee after the effective
25 date. Application for such service must be made while in
26 a participating status. The salary rate to be used in
27 the calculation of the required employee contribution, if
28 any, shall be the employee's salary rate at the time of
29 first reentering service with the employer after the
30 employer's effective date of participation.
31 2. For current service, each participating employee
32 shall be credited with:
33 a. Additional credits of amounts equal to each
34 payment of additional contributions received from
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1 him under Section 7-173, as of the date the
2 corresponding payment of earnings is payable to him.
3 b. Normal credits of amounts equal to each
4 payment of normal contributions received from him,
5 as of the date the corresponding payment of earnings
6 is payable to him, and normal contributions made for
7 the purpose of establishing out-of-state service
8 credits as permitted under the conditions set forth
9 in paragraph 6 of this subsection (a).
10 c. Municipality credits in an amount equal to
11 1.4 times the normal credits, except those
12 established by out-of-state service credits, as of
13 the date of computation of any benefit if these
14 credits would increase the benefit.
15 d. Survivor credits equal to each payment of
16 survivor contributions received from the
17 participating employee as of the date the
18 corresponding payment of earnings is payable, and
19 survivor contributions made for the purpose of
20 establishing out-of-state service credits.
21 3. For periods of temporary and total and permanent
22 disability benefits, each employee receiving disability
23 benefits shall be granted creditable service for the
24 period during which disability benefits are payable.
25 Normal and survivor credits, based upon the rate of
26 earnings applied for disability benefits, shall also be
27 granted if such credits would result in a higher benefit
28 to any such employee or his beneficiary.
29 4. For authorized leave of absence without pay: A
30 participating employee shall be granted credits and
31 creditable service for periods of authorized leave of
32 absence without pay under the following conditions:
33 a. An application for credits and creditable
34 service is submitted to the board while the employee
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1 is in a status of active employment, and within 2
2 years after termination of the leave of absence
3 period for which credits and creditable service are
4 sought.
5 b. Not more than 12 complete months of
6 creditable service for authorized leave of absence
7 without pay shall be counted for purposes of
8 determining any benefits payable under this Article.
9 c. Credits and creditable service shall be
10 granted for leave of absence only if such leave is
11 approved by the governing body of the municipality,
12 including approval of the estimated cost thereof to
13 the municipality as determined by the fund, and
14 employee contributions, plus interest at the
15 effective rate applicable for each year from the end
16 of the period of leave to date of payment, have been
17 paid to the fund in accordance with Section 7-173.
18 The contributions shall be computed upon the
19 assumption earnings continued during the period of
20 leave at the rate in effect when the leave began.
21 d. Benefits under the provisions of Sections
22 7-141, 7-146, 7-150 and 7-163 shall become payable
23 to employees on authorized leave of absence, or
24 their designated beneficiary, only if such leave of
25 absence is creditable hereunder, and if the employee
26 has at least one year of creditable service other
27 than the service granted for leave of absence. Any
28 employee contributions due may be deducted from any
29 benefits payable.
30 e. No credits or creditable service shall be
31 allowed for leave of absence without pay during any
32 period of prior service.
33 5. For military service: The governing body of a
34 municipality or participating instrumentality may elect
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1 to allow creditable service to participating employees
2 who leave their employment to serve in the armed forces
3 of the United States for all periods of such service,
4 provided that the person returns to active employment
5 within 90 days after completion of full time active duty,
6 but no creditable service shall be allowed such person
7 for any period that can be used in the computation of a
8 pension or any other pay or benefit, other than pay for
9 active duty, for service in any branch of the armed
10 forces of the United States. If necessary to the
11 computation of any benefit, the board shall establish
12 municipality credits for participating employees under
13 this paragraph on the assumption that the employee
14 received earnings at the rate received at the time he
15 left the employment to enter the armed forces. A
16 participating employee in the armed forces shall not be
17 considered an employee during such period of service and
18 no additional death and no disability benefits are
19 payable for death or disability during such period.
20 Any participating employee who left his employment
21 with a municipality or participating instrumentality to
22 serve in the armed forces of the United States and who
23 again became a participating employee within 90 days
24 after completion of full time active duty by entering the
25 service of a different municipality or participating
26 instrumentality, which has elected to allow creditable
27 service for periods of military service under the
28 preceding paragraph, shall also be allowed creditable
29 service for his period of military service on the same
30 terms that would apply if he had been employed, before
31 entering military service, by the municipality or
32 instrumentality which employed him after he left the
33 military service and the employer costs arising in
34 relation to such grant of creditable service shall be
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1 charged to and paid by that municipality or
2 instrumentality.
3 Notwithstanding the foregoing, any participating
4 employee shall be entitled to creditable service as
5 required by any federal law relating to re-employment
6 rights of persons who served in the United States Armed
7 Services. Such creditable service shall be granted upon
8 payment by the member of an amount equal to the employee
9 contributions which would have been required had the
10 employee continued in service at the same rate of
11 earnings during the military leave period, plus interest
12 at the effective rate.
13 5.1. In addition to any creditable service
14 established under paragraph 5 of this subsection (a),
15 creditable service may be granted for up to 24 months of
16 service in the armed forces of the United States.
17 In order to receive creditable service for military
18 service under this paragraph 5.1, a participating
19 employee must (1) apply to the Fund in writing and
20 provide evidence of the military service that is
21 satisfactory to the Board; (2) obtain the written
22 approval of the current employer; and (3) make
23 contributions to the Fund equal to (i) the employee
24 contributions that would have been required had the
25 service been rendered as a member, plus (ii) an amount
26 determined by the board to be equal to the employer's
27 normal cost of the benefits accrued for that military
28 service, plus (iii) interest on items (i) and (ii) from
29 the date of first membership in the Fund to the date of
30 payment. If payment is made during the 6-month period
31 that begins 3 months after the effective date of this
32 amendatory Act of 1997, the required interest shall be at
33 the rate of 2.5% per year, compounded annually;
34 otherwise, the required interest shall be calculated at
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1 the regular interest rate.
2 6. For out-of-state service: Creditable service
3 shall be granted for service rendered to an out-of-state
4 local governmental body under the following conditions:
5 The employee had participated and has irrevocably
6 forfeited all rights to benefits in the out-of-state
7 public employees pension system; the governing body of
8 his participating municipality or instrumentality
9 authorizes the employee to establish such service; the
10 employee has 2 years current service with this
11 municipality or participating instrumentality; the
12 employee makes a payment of contributions, which shall be
13 computed at 8% (normal) plus 2% (survivor) times length
14 of service purchased times the average rate of earnings
15 for the first 2 years of service with the municipality or
16 participating instrumentality whose governing body
17 authorizes the service established plus interest at the
18 effective rate on the date such credits are established,
19 payable from the date the employee completes the required
20 2 years of current service to date of payment. In no
21 case shall more than 120 months of creditable service be
22 granted under this provision.
23 7. For retroactive service: Any employee who could
24 have but did not elect to become a participating
25 employee, or who should have been a participant in the
26 Municipal Public Utilities Annuity and Benefit Fund
27 before that fund was superseded, may receive creditable
28 service for the period of service not to exceed 50
29 months; however, a current or former county board member
30 may establish credit under this paragraph 7 for more than
31 50 months of service as a member of the county board if
32 the excess over 50 months is approved by resolution of
33 the affected county board filed with the Fund before
34 January 1, 1999.
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1 Any employee who is a participating employee on or
2 after September 24, 1981 and who was excluded from
3 participation by the age restrictions removed by Public
4 Act 82-596 may receive creditable service for the period,
5 on or after January 1, 1979, excluded by the age
6 restriction and, in addition, if the governing body of
7 the participating municipality or participating
8 instrumentality elects to allow creditable service for
9 all employees excluded by the age restriction prior to
10 January 1, 1979, for service during the period prior to
11 that date excluded by the age restriction. Any employee
12 who was excluded from participation by the age
13 restriction removed by Public Act 82-596 and who is not a
14 participating employee on or after September 24, 1981 may
15 receive creditable service for service after January 1,
16 1979. Creditable service under this paragraph shall be
17 granted upon payment of the employee contributions which
18 would have been required had he participated, with
19 interest at the effective rate for each year from the end
20 of the period of service established to date of payment.
21 8. For accumulated unused sick leave: A
22 participating employee who is applying for a retirement
23 annuity shall be entitled to creditable service for that
24 portion of the employee's accumulated unused sick leave
25 for which payment is not received, as follows:
26 a. Sick leave days shall be limited to those
27 accumulated under a sick leave plan established by a
28 participating municipality or participating
29 instrumentality which is available to all employees
30 or a class of employees.
31 b. Only sick leave days accumulated with a
32 participating municipality or participating
33 instrumentality with which the employee was in
34 service within 60 days of the effective date of his
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1 retirement annuity shall be credited; If the
2 employee was in service with more than one employer
3 during this period only the sick leave days with the
4 employer with which the employee has the greatest
5 number of unpaid sick leave days shall be
6 considered.
7 c. The creditable service granted shall be
8 considered solely for the purpose of computing the
9 amount of the retirement annuity and shall not be
10 used to establish any minimum service period
11 required by any provision of the Illinois Pension
12 Code, the effective date of the retirement annuity,
13 or the final rate of earnings.
14 d. The creditable service shall be at the rate
15 of 1/20 of a month for each full sick day, provided
16 that no more than 12 months may be credited under
17 this subdivision 8.
18 e. Employee contributions shall not be
19 required for creditable service under this
20 subdivision 8.
21 f. Each participating municipality and
22 participating instrumentality with which an employee
23 has service within 60 days of the effective date of
24 his retirement annuity shall certify to the board
25 the number of accumulated unpaid sick leave days
26 credited to the employee at the time of termination
27 of service.
28 9. For service transferred from another system:
29 Credits and creditable service shall be granted for
30 service under Article 3, 4, 5, 14 or 16 of this Act, to
31 any active member of this Fund, and to any inactive
32 member who has been a county sheriff, upon transfer of
33 such credits pursuant to Section 3-110.3, 4-108.3, 5-235,
34 14-105.6 or 16-131.4, and payment by the member of the
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1 amount by which (1) the employer and employee
2 contributions that would have been required if he had
3 participated in this Fund as a sheriff's law enforcement
4 employee during the period for which credit is being
5 transferred, plus interest thereon at the effective rate
6 for each year, compounded annually, from the date of
7 termination of the service for which credit is being
8 transferred to the date of payment, exceeds (2) the
9 amount actually transferred to the Fund. Such transferred
10 service shall be deemed to be service as a sheriff's law
11 enforcement employee for the purposes of Section 7-142.1.
12 (b) Creditable service - amount:
13 1. One month of creditable service shall be allowed
14 for each month for which a participating employee made
15 contributions as required under Section 7-173, or for
16 which creditable service is otherwise granted hereunder.
17 Not more than 1 month of service shall be credited and
18 counted for 1 calendar month, and not more than 1 year of
19 service shall be credited and counted for any calendar
20 year. A calendar month means a nominal month beginning
21 on the first day thereof, and a calendar year means a
22 year beginning January 1 and ending December 31.
23 2. A seasonal employee shall be given 12 months of
24 creditable service if he renders the number of months of
25 service normally required by the position in a 12-month
26 period and he remains in service for the entire 12-month
27 period. Otherwise a fractional year of service in the
28 number of months of service rendered shall be credited.
29 3. An intermittent employee shall be given
30 creditable service for only those months in which a
31 contribution is made under Section 7-173.
32 (c) No application for correction of credits or
33 creditable service shall be considered unless the board
34 receives an application for correction while (1) the
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1 applicant is a participating employee and in active
2 employment with a participating municipality or
3 instrumentality, or (2) while the applicant is actively
4 participating in a pension fund or retirement system which is
5 a participating system under the Retirement Systems
6 Reciprocal Act. A participating employee or other applicant
7 shall not be entitled to credits or creditable service unless
8 the required employee contributions are made in a lump sum or
9 in installments made in accordance with board rule.
10 (d) Upon the granting of a retirement, surviving spouse
11 or child annuity, a death benefit or a separation benefit, on
12 account of any employee, all individual accumulated credits
13 shall thereupon terminate. Upon the withdrawal of additional
14 contributions, the credits applicable thereto shall thereupon
15 terminate. Terminated credits shall not be applied to
16 increase the benefits any remaining employee would otherwise
17 receive under this Article.
18 (Source: P.A. 90-448, eff. 8-16-97.)
19 (40 ILCS 5/7-141) (from Ch. 108 1/2, par. 7-141)
20 Sec. 7-141. Retirement annuities - Conditions.
21 Retirement annuities shall be payable as hereinafter set
22 forth:
23 (a) A participating employee who, regardless of cause,
24 is separated from the service of all participating
25 municipalities and instrumentalities thereof and
26 participating instrumentalities shall be entitled to a
27 retirement annuity provided:
28 1. He is at least age 55, or in the case of a person who
29 is eligible to have his annuity calculated under Section
30 7-142.1, he is at least age 50;
31 2. He is (i) an employee who was employed by any
32 participating municipality or participating instrumentality
33 which had not elected to exclude persons employed in
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1 positions normally requiring performance of duty for less
2 than 1000 hours per year or was employed in a position
3 normally requiring performance of duty for 600 hours or more
4 per year prior to such election by any participating
5 municipality or participating instrumentality included in and
6 subject to this Article on or before the effective date of
7 this amendatory Act of 1981 which made such election and is
8 not entitled to receive earnings for employment in a position
9 normally requiring performance of duty for 600 hours or more
10 per year for any participating municipality and
11 instrumentalities thereof and participating instrumentality;
12 or (ii) an employee who was employed only by a participating
13 municipality or participating instrumentality, or
14 participating municipalities or participating
15 instrumentalities, which have elected to exclude persons in
16 positions normally requiring performance of duty for less
17 than 1000 hours per year after the effective date of such
18 exclusion or which are included under and subject to the
19 Article after the effective date of this amendatory Act of
20 1981 and elects to exclude persons in such positions, and is
21 not entitled to receive earnings for employment in a position
22 normally requiring performance of duty for 1000 hours or more
23 per year by such a participating municipality or
24 participating instrumentality;
25 3. The amount of his annuity, before the application of
26 paragraph (b) of Section 7-142 is at least $10 per month;
27 4. If he first became a participating employee after
28 December 31, 1961, he has at least 8 years of service. This
29 service requirement shall not apply to any participating
30 employee, regardless of participation date, if the General
31 Assembly terminates the Fund.
32 (b) Retirement annuities shall be payable:
33 1. As provided in Section 7-119;
34 2. Except as provided in item 3, upon receipt by the
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1 fund of a written application by the board. The effective
2 date may be not more than one year prior to the date of the
3 receipt by the fund of the application;
4 3. Upon attainment of age 70 1/2 if (i) the member (i)
5 has not submitted an application for the annuity, (ii) the
6 member has at least 8 years of service credit and is no
7 longer in service, and (ii) is otherwise entitled to an
8 annuity under this Article (iii) the pension amount is at
9 least $30 per month, and (iv) the Fund is able to locate the
10 member;
11 4. To the beneficiary of the deceased annuitant for the
12 unpaid amount accrued to date of death, if any.
13 (Source: P.A. 87-740.)
14 (40 ILCS 5/7-141.1)
15 Sec. 7-141.1. Early retirement incentive.
16 (a) The General Assembly finds and declares that:
17 (1) Units of local government across the State have
18 been functioning under a financial crisis.
19 (2) This financial crisis is expected to continue.
20 (3) Units of local government must depend on
21 additional sources of revenue and, when those sources are
22 not forthcoming, must establish cost-saving programs.
23 (4) An early retirement incentive designed
24 specifically to target highly-paid senior employees could
25 result in significant annual cost savings.
26 (5) The early retirement incentive should be made
27 available only to those units of local government that
28 determine that an early retirement incentive is in their
29 best interest.
30 (6) A unit of local government adopting a program
31 of early retirement incentives under this Section is
32 encouraged to implement personnel procedures to prohibit,
33 for at least 5 years, the rehiring (whether on payroll or
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1 by independent contract) of employees who receive early
2 retirement incentives.
3 (7) A unit of local government adopting a program
4 of early retirement incentives under this Section is also
5 encouraged to replace as few of the participating
6 employees as possible and to hire replacement employees
7 for salaries totaling no more than 80% of the total
8 salaries formerly paid to the employees who participate
9 in the early retirement program.
10 It is the primary purpose of this Section to encourage
11 units of local government that can realize true cost savings,
12 or have determined that an early retirement program is in
13 their best interest, to implement an early retirement
14 program.
15 (b) Until the effective date of this amendatory Act of
16 1997, this Section does not apply to any employer that is a
17 city, village, or incorporated town, nor to the employees of
18 any such employer. Beginning on the effective date of this
19 amendatory Act of 1997, any employer under this Article,
20 including an employer that is a city, village, or
21 incorporated town, may establish an early retirement
22 incentive program for its employees under this Section. The
23 decision of a city, village, or incorporated town to consider
24 or establish an early retirement program is at the sole
25 discretion of that city, village, or incorporated town, and
26 nothing in this amendatory Act of 1997 limits or otherwise
27 diminishes this discretion. Nothing contained in this
28 Section shall be construed to require a city, village, or
29 incorporated town to establish an early retirement program
30 and no city, village, or incorporated town may be compelled
31 to implement such a program.
32 The benefits provided in this Section are available only
33 to members employed by a participating employer that has
34 filed with the Board of the Fund a resolution or ordinance
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1 expressly providing for the creation of an early retirement
2 incentive program under this Section for its employees and
3 specifying the effective date of the early retirement
4 incentive program. Subject to the limitation in subsection
5 (h), an employer may adopt a resolution or ordinance
6 providing a program of early retirement incentives under this
7 Section at any time.
8 The resolution or ordinance shall be in substantially the
9 following form:
10 RESOLUTION (ORDINANCE) NO. ....
11 A RESOLUTION (ORDINANCE) ADOPTING AN EARLY
12 RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES
13 IN THE ILLINOIS MUNICIPAL RETIREMENT FUND
14 WHEREAS, Section 7-141.1 of the Illinois Pension Code
15 provides that a participating employer may elect to adopt an
16 early retirement incentive program offered by the Illinois
17 Municipal Retirement Fund by adopting a resolution or
18 ordinance; and
19 WHEREAS, The goal of adopting an early retirement program
20 is to realize a substantial savings in personnel costs by
21 offering early retirement incentives to employees who have
22 accumulated many years of service credit; and
23 WHEREAS, Implementation of the early retirement program
24 will provide a budgeting tool to aid in controlling payroll
25 costs; and
26 WHEREAS, The (name of governing body) has determined that
27 the adoption of an early retirement incentive program is in
28 the best interests of the (name of participating employer);
29 therefore be it
30 RESOLVED (ORDAINED) by the (name of governing body) of
31 (name of participating employer) that:
32 (1) The (name of participating employer) does hereby
33 adopt the Illinois Municipal Retirement Fund early retirement
34 incentive program as provided in Section 7-141.1 of the
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1 Illinois Pension Code. The early retirement incentive
2 program shall take effect on (date).
3 (2) In order to help achieve a true cost savings, a
4 person who retires under the early retirement incentive
5 program shall lose those incentives if he or she later
6 accepts employment with any IMRF employer in a position for
7 which participation in IMRF is required or is elected by the
8 employee.
9 (3) In order to utilize an early retirement incentive as
10 a budgeting tool, the (name of participating employer) will
11 use its best efforts either to limit the number of employees
12 who replace the employees who retire under the early
13 retirement program or to limit the salaries paid to the
14 employees who replace the employees who retire under the
15 early retirement program.
16 (4) The effective date of each employee's retirement
17 under this early retirement program shall be set by (name of
18 employer) and shall be no earlier than the effective date of
19 the program and no later than one year after that effective
20 date; except that the employee may require that the
21 retirement date set by the employer be no later than the June
22 30 next occurring after the effective date of the program and
23 no earlier than the date upon which the employee qualifies
24 for retirement.
25 (5) To be eligible for the early retirement incentive
26 under this Section, the employee must have attained age 50
27 and have at least 20 years of creditable service by his or
28 her retirement date.
29 (6) The (clerk or secretary) shall promptly file a
30 certified copy of this resolution (ordinance) with the Board
31 of Trustees of the Illinois Municipal Retirement Fund.
32 CERTIFICATION
33 I, (name), the (clerk or secretary) of the (name of
34 participating employer) of the County of (name), State of
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1 Illinois, do hereby certify that I am the keeper of the books
2 and records of the (name of employer) and that the foregoing
3 is a true and correct copy of a resolution (ordinance) duly
4 adopted by the (governing body) at a meeting duly convened
5 and held on (date).
6 SEAL
7 (Signature of clerk or secretary)
8 (c) To be eligible for the benefits provided under an
9 early retirement incentive program adopted under this
10 Section, a member must:
11 (1) be a participating employee of this Fund who,
12 on the effective date of the program, (i) is in active
13 payroll status as an employee of a participating employer
14 that has filed the required ordinance or resolution with
15 the Board, (ii) is on layoff status from such a position
16 with a right of re-employment or recall to service, (iii)
17 is on a leave of absence from such a position, or (iv) is
18 on disability but has not been receiving benefits under
19 Section 7-146 or 7-150 for a period of more than 2 years
20 from the date of application;
21 (2) have never previously received a retirement
22 annuity under this Article or under the Retirement
23 Systems Reciprocal Act using service credit established
24 under this Article;
25 (3) (blank); file with the Board within 60 days of
26 the effective date of the program an application
27 requesting the benefits provided in this Section;
28 (4) have at least 20 years of creditable service in
29 the Fund by the date of retirement, without the use of
30 any creditable service established under this Section;
31 (5) have attained age 50 by the date of retirement,
32 without the use of any age enhancement received under
33 this Section; and
34 (6) be eligible to receive a retirement annuity
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1 under this Article by the date of retirement, for which
2 purpose the age enhancement and creditable service
3 established under this Section may be considered.
4 (d) The employer shall determine the retirement date for
5 each employee participating in the early retirement program
6 adopted under this Section. The retirement date shall be no
7 earlier than the effective date of the program and no later
8 than one year after that effective date, except that the
9 employee may require that the retirement date set by the
10 employer be no later than the June 30 next occurring after
11 the effective date of the program and no earlier than the
12 date upon which the employee qualifies for retirement. The
13 employer shall give each employee participating in the early
14 retirement program at least 30 days written notice of the
15 employee's designated retirement date, unless the employee
16 waives this notice requirement.
17 (e) An eligible person may establish up to 5 years of
18 creditable service under this Section. In addition, for each
19 period of creditable service established under this Section,
20 a person shall have his or her age at retirement deemed
21 enhanced by an equivalent period.
22 The creditable service established under this Section may
23 be used for all purposes under this Article and the
24 Retirement Systems Reciprocal Act, except for the computation
25 of final rate of earnings and the determination of earnings,
26 salary, or compensation under this or any other Article of
27 the Code.
28 The age enhancement established under this Section may be
29 used for all purposes under this Article (including
30 calculation of the reduction imposed under subdivision
31 (a)1b(iv) of Section 7-142), except for purposes of a
32 reversionary annuity under Section 7-145 and any
33 distributions required because of age. The age enhancement
34 established under this Section may be used in calculating a
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1 proportionate annuity payable by this Fund under the
2 Retirement Systems Reciprocal Act, but shall not be used in
3 determining benefits payable under other Articles of this
4 Code under the Retirement Systems Reciprocal Act.
5 (f) For all creditable service established under this
6 Section, the member must pay to the Fund an employee
7 contribution consisting of 4.5% of the member's highest
8 annual salary rate used in the determination of the final
9 rate of earnings for retirement annuity purposes for each
10 year of creditable service granted under this Section. For
11 creditable service established under this Section by a person
12 who is a sheriff's law enforcement employee to be deemed
13 service as a sheriff's law enforcement employee, the employee
14 contribution shall be at the rate of 6.5% of highest annual
15 salary per year of creditable service granted. Contributions
16 for fractions of a year of service shall be prorated. Any
17 amounts that are disregarded in determining the final rate of
18 earnings under subdivision (d)(5) of Section 7-116 (the 125%
19 rule) shall also be disregarded in determining the required
20 contribution under this subsection (f).
21 The employee contribution shall be paid to the Fund as
22 follows: If the member is entitled to a lump sum payment for
23 accumulated vacation, sick leave, or personal leave upon
24 withdrawal from service, the employer shall deduct the
25 employee contribution from that lump sum and pay the deducted
26 amount directly to the Fund. If there is no such lump sum
27 payment or the required employee contribution exceeds the net
28 amount of the lump sum payment, then the remaining amount
29 due, at the option of the employee, may either be paid to the
30 Fund before the annuity commences or deducted from the
31 retirement annuity in 24 equal monthly installments.
32 (g) An annuitant who has received any age enhancement or
33 creditable service under this Section and thereafter accepts
34 employment with or enters into a personal services contract
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1 with an employer under this Article thereby forfeits that age
2 enhancement and creditable service. A person forfeiting
3 early retirement incentives under this subsection (i) must
4 repay to the Fund that portion of the retirement annuity
5 already received which is attributable to the early
6 retirement incentives that are being forfeited, (ii) shall
7 not be eligible to participate in any future early retirement
8 program adopted under this Section, and (iii) is entitled to
9 a refund of the employee contribution paid under subsection
10 (f). The Board shall deduct the required repayment from the
11 refund and may impose a reasonable payment schedule for
12 repaying the amount, if any, by which the required repayment
13 exceeds the refund amount.
14 (h) The additional unfunded liability accruing as a
15 result of the adoption of a program of early retirement
16 incentives under this Section by an employer shall be
17 amortized over a period of 10 years beginning on January 1 of
18 the second calendar year following the calendar year in which
19 the latest date for beginning to receive a retirement annuity
20 under the program (as determined by the employer under
21 subsection (d) of this Section) occurs; except that the
22 employer may provide for a shorter amortization period (of no
23 less than 5 years) by adopting an ordinance or resolution
24 specifying the length of the amortization period and
25 submitting a certified copy of the ordinance or resolution to
26 the Fund no later than 6 months after the effective date of
27 the program. An employer, at its discretion, may accelerate
28 payments to the Fund.
29 An employer may provide more than one early retirement
30 incentive program for its employees under this Section.
31 However, an employer that has provided an early retirement
32 incentive program for its employees under this Section may
33 not provide another early retirement incentive program under
34 this Section until the liability arising from the earlier
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1 program has been fully paid to the Fund.
2 (Source: P.A. 89-329, eff. 8-17-95; 90-32, eff. 6-27-97.)
3 (40 ILCS 5/7-166) (from Ch. 108 1/2, par. 7-166)
4 Sec. 7-166. Separation benefits - Eligibility.
5 Separation benefits shall be payable as hereinafter set
6 forth:
7 1. Upon separation from the service of all participating
8 municipalities and instrumentalities thereof and
9 participating instrumentalities, any participating employee
10 upon the termination of his participation as a participating
11 employee who, on the date of application for such benefit, is
12 not entitled to a retirement annuity shall be entitled to a
13 separation benefit;
14 2. Upon separation from the service of all participating
15 municipalities and instrumentalities thereof and
16 participating instrumentalities, any participating employee
17 upon the termination of his participation as a participating
18 employee who, on the date of application for such benefit, is
19 entitled to a retirement annuity of less than $30 per month
20 for life may elect to take a separation benefit in lieu of
21 the retirement annuity.
22 (Source: Laws 1963, p. 161.)
23 (40 ILCS 5/7-167) (from Ch. 108 1/2, par. 7-167)
24 Sec. 7-167. Separation benefits - Payment. Separation
25 benefits shall be paid in the form of a single cash sum as
26 soon as practicable after receipt by the board of:
27 1. a written application by the employee for such
28 benefits; and
29 2. written notice from the last employing
30 participating municipality or instrumentality thereof or
31 participating instrumentality, certifying that such
32 participating employee has separated from service
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1 terminated his participation.
2 (Source: Laws 1963, p. 161.)
3 (40 ILCS 5/7-211) (from Ch. 108 1/2, par. 7-211)
4 Sec. 7-211. Authorizations.
5 (a) Each participating municipality and instrumentality
6 thereof and each participating instrumentality shall:
7 1. Deduct all normal and additional contributions
8 and contributions for federal Social Security taxes as
9 required by the Social Security Enabling Act from each
10 payment of earnings payable to each participating
11 employee who is entitled to any earnings from such
12 municipality or instrumentality thereof or participating
13 instrumentality, and to remit all such contributions
14 immediately to the board; and
15 2. Pay to the board contributions required by this
16 Article.
17 (b) Each participating employee shall, by virtue of the
18 payment of contributions to this fund, receive a vested
19 interest in the annuities and benefits provided in this
20 Article and in consideration of such vested interest shall be
21 deemed to have agreed and authorized the deduction from
22 earnings of all contributions payable to this fund in
23 accordance with this Article.
24 (c) Payment of earnings less the amounts of
25 contributions provided in this Article and in the Social
26 Security Enabling Act shall be a full and complete discharge
27 of all claims for payment for services rendered by any
28 employee during the period covered by any such payment.
29 (d) Any covered annuitant may authorize the withholding
30 of all or a portion of his or her annuity, for the payment of
31 premiums on group accident and health insurance provided
32 pursuant to Section 7-199.1. The annuitant may revoke this
33 authorization at any time.
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1 (Source: P.A. 84-812.)
2 (40 ILCS 5/7-224 new)
3 Section 7-224. Section 415 limitations. Notwithstanding
4 any other provisions of this Article, the combined benefits
5 and contributions provided to any participating employee by
6 all plans of any participating municipality and its
7 instrumentalities and any participating instrumentality shall
8 not exceed the limitations specified in Section 415(b), (c),
9 and (e) of the Internal Revenue Code of 1986. If a
10 participating employee's benefits or contributions under this
11 Article, combined with those under any other plan of the
12 participating municipality and its instrumentalities or
13 participating instrumentality, would otherwise violate those
14 limitations, the benefits and contributions under the other
15 plan shall be reduced, rather than the benefits and
16 contributions provided under this Article. To the extent
17 that the other plan fails to limit such benefits and
18 contributions, that plan shall be disqualified.
19 Section 99. Effective date. This Act takes effect
20 January 1, 2001.