Public Act 90-0582 of the 90th General Assembly
Public Act 90-0582
SB3 Re-enrolled SRS90S0002PDbm
AN ACT concerning public employees' pensions.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Employees Group Insurance Act of
1971 is amended by changing Sections 3 and 10 as follows:
(5 ILCS 375/3) (from Ch. 127, par. 523)
Sec. 3. Definitions. Unless the context otherwise
requires, the following words and phrases as used in this Act
shall have the following meanings. The Department may define
these and other words and phrases separately for the purpose
of implementing specific programs providing benefits under
this Act.
(a) "Administrative service organization" means any
person, firm or corporation experienced in the handling of
claims which is fully qualified, financially sound and
capable of meeting the service requirements of a contract of
administration executed with the Department.
(b) "Annuitant" means (1) an employee who retires, or
has retired, on or after January 1, 1966 on an immediate
annuity under the provisions of Articles 2, 14, 15 (including
an employee who has retired under the optional retirement
program established under Section 15-158.2), paragraphs (2),
(3), or (5) (b) or (c) of Section 16-106, or Article 18 of
the Illinois Pension Code; (2) any person who was receiving
group insurance coverage under this Act as of March 31, 1978
by reason of his status as an annuitant, even though the
annuity in relation to which such coverage was provided is a
proportional annuity based on less than the minimum period of
service required for a retirement annuity in the system
involved; (3) any person not otherwise covered by this Act
who has retired as a participating member under Article 2 of
the Illinois Pension Code but is ineligible for the
retirement annuity under Section 2-119 of the Illinois
Pension Code; (4) the spouse of any person who is receiving a
retirement annuity under Article 18 of the Illinois Pension
Code and who is covered under a group health insurance
program sponsored by a governmental employer other than the
State of Illinois and who has irrevocably elected to waive
his or her coverage under this Act and to have his or her
spouse considered as the "annuitant" under this Act and not
as a "dependent"; or (5) an employee who retires, or has
retired, from a qualified position, as determined according
to rules promulgated by the Director, under a qualified local
government or a qualified rehabilitation facility or a
qualified domestic violence shelter or service. (For
definition of "retired employee", see (p) post).
(b-5) "New SERS annuitant" means a person who, on or
after January 1, 1998, becomes an annuitant, as defined in
subsection (b), by virtue of beginning to receive a
retirement annuity under Article 14 of the Illinois Pension
Code, and is eligible to participate in the basic program of
group health benefits provided for annuitants under this Act.
(b-6) "New SURS annuitant" means a person who, on or
after January 1, 1998, becomes an annuitant, as defined in
subsection (b), by virtue of beginning to receive a
retirement annuity under Article 15 of the Illinois Pension
Code, and is eligible to participate in the basic program of
group health benefits provided for annuitants under this Act.
(b-7) "New TRS State annuitant" means a person who, on
or after July 1, 1998, becomes an annuitant, as defined in
subsection (b), by virtue of beginning to receive a
retirement annuity under Article 16 of the Illinois Pension
Code based on service as a teacher as defined in paragraph
(2), (3), or (5) of Section 16-106 of that Code, and is
eligible to participate in the basic program of group health
benefits provided for annuitants under this Act.
(c) "Carrier" means (1) an insurance company, a
corporation organized under the Limited Health Service
Organization Act or the Voluntary Health Services Plan Act, a
partnership, or other nongovernmental organization, which is
authorized to do group life or group health insurance
business in Illinois, or (2) the State of Illinois as a
self-insurer.
(d) "Compensation" means salary or wages payable on a
regular payroll by the State Treasurer on a warrant of the
State Comptroller out of any State, trust or federal fund, or
by the Governor of the State through a disbursing officer of
the State out of a trust or out of federal funds, or by any
Department out of State, trust, federal or other funds held
by the State Treasurer or the Department, to any person for
personal services currently performed, and ordinary or
accidental disability benefits under Articles 2, 14, 15
(including ordinary or accidental disability benefits under
the optional retirement program established under Section
15-158.2), paragraphs (2), (3), or (5) (b) or (c) of Section
16-106, or Article 18 of the Illinois Pension Code, for
disability incurred after January 1, 1966, or benefits
payable under the Workers' Compensation or Occupational
Diseases Act or benefits payable under a sick pay plan
established in accordance with Section 36 of the State
Finance Act. "Compensation" also means salary or wages paid
to an employee of any qualified local government or qualified
rehabilitation facility or a qualified domestic violence
shelter or service.
(e) "Commission" means the State Employees Group
Insurance Advisory Commission authorized by this Act.
Commencing July 1, 1984, "Commission" as used in this Act
means the Illinois Economic and Fiscal Commission as
established by the Legislative Commission Reorganization Act
of 1984.
(f) "Contributory", when referred to as contributory
coverage, shall mean optional coverages or benefits elected
by the member toward the cost of which such member makes
contribution, or which are funded in whole or in part through
the acceptance of a reduction in earnings or the foregoing of
an increase in earnings by an employee, as distinguished from
noncontributory coverage or benefits which are paid entirely
by the State of Illinois without reduction of the member's
salary.
(g) "Department" means any department, institution,
board, commission, officer, court or any agency of the State
government receiving appropriations and having power to
certify payrolls to the Comptroller authorizing payments of
salary and wages against such appropriations as are made by
the General Assembly from any State fund, or against trust
funds held by the State Treasurer and includes boards of
trustees of the retirement systems created by Articles 2, 14,
15, 16 and 18 of the Illinois Pension Code. "Department"
also includes the Illinois Comprehensive Health Insurance
Board, the Board of Examiners established under the Illinois
Public Accounting Act, and the Illinois Rural Bond Bank.
(h) "Dependent", when the term is used in the context of
the health and life plan, means a member's spouse and any
unmarried child (1) from birth to age 19 including an adopted
child, a child who lives with the member from the time of the
filing of a petition for adoption until entry of an order of
adoption, a stepchild or recognized child who lives with the
member in a parent-child relationship, or a child who lives
with the member if such member is a court appointed guardian
of the child, or (2) age 19 to 23 enrolled as a full-time
student in any accredited school, financially dependent upon
the member, and eligible as a dependent for Illinois State
income tax purposes, or (3) age 19 or over who is mentally or
physically handicapped as defined in the Illinois Insurance
Code. For the health plan only, the term "dependent" also
includes any person enrolled prior to the effective date of
this Section who is dependent upon the member to the extent
that the member may claim such person as a dependent for
Illinois State income tax deduction purposes; no other such
person may be enrolled.
(i) "Director" means the Director of the Illinois
Department of Central Management Services.
(j) "Eligibility period" means the period of time a
member has to elect enrollment in programs or to select
benefits without regard to age, sex or health.
(k) "Employee" means and includes each officer or
employee in the service of a department who (1) receives his
compensation for service rendered to the department on a
warrant issued pursuant to a payroll certified by a
department or on a warrant or check issued and drawn by a
department upon a trust, federal or other fund or on a
warrant issued pursuant to a payroll certified by an elected
or duly appointed officer of the State or who receives
payment of the performance of personal services on a warrant
issued pursuant to a payroll certified by a Department and
drawn by the Comptroller upon the State Treasurer against
appropriations made by the General Assembly from any fund or
against trust funds held by the State Treasurer, and (2) is
employed full-time or part-time in a position normally
requiring actual performance of duty during not less than 1/2
of a normal work period, as established by the Director in
cooperation with each department, except that persons elected
by popular vote will be considered employees during the
entire term for which they are elected regardless of hours
devoted to the service of the State, and (3) except that
"employee" does not include any person who is not eligible by
reason of such person's employment to participate in one of
the State retirement systems under Articles 2, 14, 15 (either
the regular Article 15 system or the optional retirement
program established under Section 15-158.2) or 18, or under
paragraph (2), (3), or (5) (b) or (c) of Section 16-106, of
the Illinois Pension Code, but such term does include persons
who are employed during the 6 month qualifying period under
Article 14 of the Illinois Pension Code. Such term also
includes any person who (1) after January 1, 1966, is
receiving ordinary or accidental disability benefits under
Articles 2, 14, 15 (including ordinary or accidental
disability benefits under the optional retirement program
established under Section 15-158.2), paragraphs (2), (3), or
(5) (b) or (c) of Section 16-106, or Article 18 of the
Illinois Pension Code, for disability incurred after January
1, 1966, (2) receives total permanent or total temporary
disability under the Workers' Compensation Act or
Occupational Disease Act as a result of injuries sustained or
illness contracted in the course of employment with the State
of Illinois, or (3) is not otherwise covered under this Act
and has retired as a participating member under Article 2 of
the Illinois Pension Code but is ineligible for the
retirement annuity under Section 2-119 of the Illinois
Pension Code. However, a person who satisfies the criteria
of the foregoing definition of "employee" except that such
person is made ineligible to participate in the State
Universities Retirement System by clause (4) of subsection
(a) of Section 15-107 of the Illinois Pension Code is also an
"employee" for the purposes of this Act. "Employee" also
includes any person receiving or eligible for benefits under
a sick pay plan established in accordance with Section 36 of
the State Finance Act. "Employee" also includes each officer
or employee in the service of a qualified local government,
including persons appointed as trustees of sanitary districts
regardless of hours devoted to the service of the sanitary
district, and each employee in the service of a qualified
rehabilitation facility and each full-time employee in the
service of a qualified domestic violence shelter or service,
as determined according to rules promulgated by the Director.
(l) "Member" means an employee, annuitant, retired
employee or survivor.
(m) "Optional coverages or benefits" means those
coverages or benefits available to the member on his or her
voluntary election, and at his or her own expense.
(n) "Program" means the group life insurance, health
benefits and other employee benefits designed and contracted
for by the Director under this Act.
(o) "Health plan" means a self-insured health insurance
program offered by the State of Illinois for the purposes of
benefiting employees by means of providing, among others,
wellness programs, utilization reviews, second opinions and
medical fee reviews, as well as for paying for hospital and
medical care up to the maximum coverage provided by the plan,
to its members and their dependents.
(p) "Retired employee" means any person who would be an
annuitant as that term is defined herein but for the fact
that such person retired prior to January 1, 1966. Such term
also includes any person formerly employed by the University
of Illinois in the Cooperative Extension Service who would be
an annuitant but for the fact that such person was made
ineligible to participate in the State Universities
Retirement System by clause (4) of subsection (a) of Section
15-107 of the Illinois Pension Code.
(p-6) "New SURS retired employee" means a person who, on
or after January 1, 1998, becomes a retired employee, as
defined in subsection (p), by virtue of being a person
formerly employed by the University of Illinois in the
Cooperative Extension Service who would be an annuitant but
for the fact that he or she was made ineligible to
participate in the State Universities Retirement System by
clause (4) of subsection (a) of Section 15-107 of the
Illinois Pension Code, and who is eligible to participate in
the basic program of group health benefits provided for
retired employees under this Act.
(q) "Survivor" means a person receiving an annuity as a
survivor of an employee or of an annuitant. "Survivor" also
includes: (1) the surviving dependent of a person who
satisfies the definition of "employee" except that such
person is made ineligible to participate in the State
Universities Retirement System by clause (4) of subsection
(a) of Section 15-107 of the Illinois Pension Code; and (2)
the surviving dependent of any person formerly employed by
the University of Illinois in the Cooperative Extension
Service who would be an annuitant except for the fact that
such person was made ineligible to participate in the State
Universities Retirement System by clause (4) of subsection
(a) of Section 15-107 of the Illinois Pension Code.
(q-5) "New SERS survivor" means a survivor, as defined
in subsection (q), whose annuity is paid under Article 14 of
the Illinois Pension Code and is based on the death of (i) an
employee whose death occurs on or after January 1, 1998, or
(ii) a new SERS annuitant as defined in subsection (b-5).
(q-6) "New SURS survivor" means a survivor, as defined
in subsection (q), whose annuity is paid under Article 15 of
the Illinois Pension Code and is based on the death of (i) an
employee whose death occurs on or after January 1, 1998, (ii)
a new SURS annuitant as defined in subsection (b-6), or (iii)
a new SURS retired employee as defined in subsection (p-6).
(q-7) "New TRS State survivor" means a survivor, as
defined in subsection (q), whose annuity is paid under
Article 16 of the Illinois Pension Code and is based on the
death of (i) an employee who is a teacher as defined in
paragraph (2), (3), or (5) of Section 16-106 of that Code and
whose death occurs on or after July 1, 1998, or (ii) a new
TRS State annuitant as defined in subsection (b-7).
(r) "Medical services" means the services provided
within the scope of their licenses by practitioners in all
categories licensed under the Medical Practice Act of 1987.
(s) "Unit of local government" means any county,
municipality, township, school district, special district or
other unit, designated as a unit of local government by law,
which exercises limited governmental powers or powers in
respect to limited governmental subjects, any not-for-profit
association with a membership that primarily includes
townships and township officials, that has duties that
include provision of research service, dissemination of
information, and other acts for the purpose of improving
township government, and that is funded wholly or partly in
accordance with Section 85-15 of the Township Code; any
not-for-profit corporation or association, with a membership
consisting primarily of municipalities, that operates its own
utility system, and provides research, training,
dissemination of information, or other acts to promote
cooperation between and among municipalities that provide
utility services and for the advancement of the goals and
purposes of its membership; and the Illinois Association of
Park Districts. "Qualified local government" means a unit of
local government approved by the Director and participating
in a program created under subsection (i) of Section 10 of
this Act.
(t) "Qualified rehabilitation facility" means any
not-for-profit organization that is accredited by the
Commission on Accreditation of Rehabilitation Facilities or
certified by the Department of Human Services (as successor
to the Department of Mental Health and Developmental
Disabilities) to provide services to persons with
disabilities and which receives funds from the State of
Illinois for providing those services, approved by the
Director and participating in a program created under
subsection (j) of Section 10 of this Act.
(u) "Qualified domestic violence shelter or service"
means any Illinois domestic violence shelter or service and
its administrative offices funded by the Department of Human
Services (as successor to the Illinois Department of Public
Aid), approved by the Director and participating in a program
created under subsection (k) of Section 10.
(v) "TRS benefit recipient" means a person who:
(1) is not a "member" as defined in this Section;
and
(2) is receiving a monthly benefit or retirement
annuity under Article 16 of the Illinois Pension Code;
and
(3) either (i) has at least 8 years of creditable
service under Article 16 of the Illinois Pension Code, or
(ii) was enrolled in the health insurance program offered
under that Article on January 1, 1996, or (iii) is the
survivor of a benefit recipient who had at least 8 years
of creditable service under Article 16 of the Illinois
Pension Code or was enrolled in the health insurance
program offered under that Article on the effective date
of this amendatory Act of 1995, or (iv) is a recipient or
survivor of a recipient of a disability benefit under
Article 16 of the Illinois Pension Code.
(w) "TRS dependent beneficiary" means a person who:
(1) is not a "member" or "dependent" as defined in
this Section; and
(2) is a TRS benefit recipient's: (A) spouse, (B)
dependent parent who is receiving at least half of his or
her support from the TRS benefit recipient, or (C)
unmarried natural or adopted child who is (i) under age
19, or (ii) enrolled as a full-time student in an
accredited school, financially dependent upon the TRS
benefit recipient, eligible as a dependent for Illinois
State income tax purposes, and either is under age 24 or
was, on January 1, 1996, participating as a dependent
beneficiary in the health insurance program offered under
Article 16 of the Illinois Pension Code, or (iii) age 19
or over who is mentally or physically handicapped as
defined in the Illinois Insurance Code.
(x) "Military leave with pay and benefits" refers to
individuals in basic training for reserves, special/advanced
training, annual training, emergency call up, or activation
by the President of the United States with approved pay and
benefits.
(y) "Military leave without pay and benefits" refers to
individuals who enlist for active duty in a regular component
of the U.S. Armed Forces or other duty not specified or
authorized under military leave with pay and benefits.
(z) "Community college benefit recipient" means a person
who:
(1) is not a "member" as defined in this Section;
and
(2) is receiving a monthly survivor's annuity or
retirement annuity under Article 15 of the Illinois
Pension Code; and
(3) either (i) was a full-time employee of a
community college district or an association of community
college boards created under the Public Community College
Act (other than an employee whose last employer under
Article 15 of the Illinois Pension Code was a community
college district subject to Article VII of the Public
Community College Act) and was eligible to participate in
a group health benefit plan as an employee during the
time of employment with a community college district
(other than a community college district subject to
Article VII of the Public Community College Act) or an
association of community college boards, or (ii) is the
survivor of a person described in item (i).
(aa) "Community college dependent beneficiary" means a
person who:
(1) is not a "member" or "dependent" as defined in
this Section; and
(2) is a community college benefit recipient's: (A)
spouse, (B) dependent parent who is receiving at least
half of his or her support from the community college
benefit recipient, or (C) unmarried natural or adopted
child who is (i) under age 19, or (ii) enrolled as a
full-time student in an accredited school, financially
dependent upon the community college benefit recipient,
eligible as a dependent for Illinois State income tax
purposes and under age 23, or (iii) age 19 or over and
mentally or physically handicapped as defined in the
Illinois Insurance Code.
(Source: P.A. 89-21, eff. 6-21-95; 89-25, eff. 6-21-95;
89-76, eff. 7-1-95; 89-324, eff. 8-13-95; 89-430, eff.
12-15-95; 89-502, eff. 7-1-96; 89-507, eff. 7-1-97; 89-628,
eff. 8-9-96; 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-497, eff. 8-18-97; 90-511, eff. 8-22-97;
revised 10-13-97.)
(5 ILCS 375/10) (from Ch. 127, par. 530)
Sec. 10. Payments by State; premiums.
(a) The State shall pay the cost of basic
non-contributory group life insurance and, subject to member
paid contributions set by the Department or required by this
Section, the basic program of group health benefits on each
eligible member, except a member, not otherwise covered by
this Act, who has retired as a participating member under
Article 2 of the Illinois Pension Code but is ineligible for
the retirement annuity under Section 2-119 of the Illinois
Pension Code, and part of each eligible member's and retired
member's premiums for health insurance coverage for enrolled
dependents as provided by Section 9. The State shall pay the
cost of the basic program of group health benefits only after
benefits are reduced by the amount of benefits covered by
Medicare for all retired members and retired dependents aged
65 years or older who are entitled to benefits under Social
Security or the Railroad Retirement system or who had
sufficient Medicare-covered government employment except that
such reduction in benefits shall apply only to those retired
members or retired dependents who (1) first become eligible
for such Medicare coverage on or after July 1, 1992; or (2)
remain eligible for, but no longer receive Medicare coverage
which they had been receiving on or after July 1, 1992. The
Department may determine the aggregate level of the State's
contribution on the basis of actual cost of medical services
adjusted for age, sex or geographic or other demographic
characteristics which affect the costs of such programs.
(a-1) Beginning January 1, 1998, for each person who
becomes a new SERS annuitant and participates in the basic
program of group health benefits, the State shall contribute
toward the cost of the annuitant's coverage under the basic
program of group health benefits an amount equal to 5% of
that cost for each full year of creditable service upon which
the annuitant's retirement annuity is based, up to a maximum
of 100% for an annuitant with 20 or more years of creditable
service. The remainder of the cost of a new SERS annuitant's
coverage under the basic program of group health benefits
shall be the responsibility of the annuitant.
(a-2) Beginning January 1, 1998, for each person who
becomes a new SERS survivor and participates in the basic
program of group health benefits, the State shall contribute
toward the cost of the survivor's coverage under the basic
program of group health benefits an amount equal to 5% of
that cost for each full year of the deceased employee's or
deceased annuitant's creditable service in the State
Employees' Retirement System of Illinois on the date of
death, up to a maximum of 100% for a survivor of an employee
or annuitant with 20 or more years of creditable service.
The remainder of the cost of the new SERS survivor's coverage
under the basic program of group health benefits shall be the
responsibility of the survivor.
(a-3) Beginning January 1, 1998, for each person who
becomes a new SURS annuitant and participates in the basic
program of group health benefits, the State shall contribute
toward the cost of the annuitant's coverage under the basic
program of group health benefits an amount equal to 5% of
that cost for each full year of creditable service upon which
the annuitant's retirement annuity is based, up to a maximum
of 100% for an annuitant with 20 or more years of creditable
service. The remainder of the cost of a new SURS annuitant's
coverage under the basic program of group health benefits
shall be the responsibility of the annuitant.
(a-4) Beginning January 1, 1998, for each person who
becomes a new SURS retired employee and participates in the
basic program of group health benefits, the State shall
contribute toward the cost of the retired employee's coverage
under the basic program of group health benefits an amount
equal to 5% of that cost for each full year that the retired
employee was an employee as defined in Section 3, up to a
maximum of 100% for a retired employee who was an employee
for 20 or more years. The remainder of the cost of a new
SURS retired employee's coverage under the basic program of
group health benefits shall be the responsibility of the
retired employee.
(a-5) Beginning January 1, 1998, for each person who
becomes a new SURS survivor and participates in the basic
program of group health benefits, the State shall contribute
toward the cost of the survivor's coverage under the basic
program of group health benefits an amount equal to 5% of
that cost for each full year of the deceased employee's or
deceased annuitant's creditable service in the State
Universities Employees' Retirement System of Illinois on the
date of death, up to a maximum of 100% for a survivor of an
employee or annuitant with 20 or more years of creditable
service. The remainder of the cost of the new SURS
survivor's coverage under the basic program of group health
benefits shall be the responsibility of the survivor.
(a-6) Beginning July 1, 1998, for each person who
becomes a new TRS State annuitant and participates in the
basic program of group health benefits, the State shall
contribute toward the cost of the annuitant's coverage under
the basic program of group health benefits an amount equal to
5% of that cost for each full year of creditable service as a
teacher as defined in paragraph (2), (3), or (5) of Section
16-106 of the Illinois Pension Code upon which the
annuitant's retirement annuity is based, up to a maximum of
100% for an annuitant with 20 or more years of such
creditable service. The remainder of the cost of a new TRS
State annuitant's coverage under the basic program of group
health benefits shall be the responsibility of the annuitant.
(a-7) Beginning July 1, 1998, for each person who
becomes a new TRS State survivor and participates in the
basic program of group health benefits, the State shall
contribute toward the cost of the survivor's coverage under
the basic program of group health benefits an amount equal to
5% of that cost for each full year of the deceased employee's
or deceased annuitant's creditable service as a teacher as
defined in paragraph (2), (3), or (5) of Section 16-106 of
the Illinois Pension Code on the date of death, up to a
maximum of 100% for a survivor of an employee or annuitant
with 20 or more years of such creditable service. The
remainder of the cost of the new TRS State survivor's
coverage under the basic program of group health benefits
shall be the responsibility of the survivor.
(a-8) (a-6) A new SERS annuitant, new SERS survivor, new
SURS annuitant, new SURS retired employee, or new SURS
survivor, new TRS State annuitant, or new TRS State survivor
may waive or terminate coverage in the program of group
health benefits. Any such annuitant, survivor, or retired
employee who has waived or terminated coverage may enroll or
re-enroll in the program of group health benefits only during
the annual benefit choice period, as determined by the
Director; except that in the event of termination of coverage
due to nonpayment of premiums, the annuitant, survivor, or
retired employee may not re-enroll in the program.
(a-9) (a-7) No later than May 1 of each calendar year,
the Director of Central Management Services shall certify in
writing to the Executive Secretary of the State Employee's
Retirement System the amounts of the Medicare supplement
health care premiums and the amounts of the health care
premiums for all other retirees who are not Medicare
eligible.
A separate calculation of the premiums based upon the
actual cost of each health care plan shall be so certified.
The Director of Central Management Services shall provide
to the Executive Secretary of the State Employee's Retirement
System such information, statistics, and other data as he or
she he/she may require to review the premium amounts
certified by the Director of Central Management Services.
(b) State employees who become eligible for this program
on or after January 1, 1980 in positions, normally requiring
actual performance of duty not less than 1/2 of a normal work
period but not equal to that of a normal work period, shall
be given the option of participating in the available
program. If the employee elects coverage, the State shall
contribute on behalf of such employee to the cost of the
employee's benefit and any applicable dependent supplement,
that sum which bears the same percentage as that percentage
of time the employee regularly works when compared to normal
work period.
(c) The basic non-contributory coverage from the basic
program of group health benefits shall be continued for each
employee not in pay status or on active service by reason of
(1) leave of absence due to illness or injury, (2) authorized
educational leave of absence or sabbatical leave, or (3)
military leave with pay and benefits. This coverage shall
continue until expiration of authorized leave and return to
active service, but not to exceed 24 months for leaves under
item (1) or (2). This 24-month limitation and the requirement
of returning to active service shall not apply to persons
receiving ordinary or accidental disability benefits or
retirement benefits through the appropriate State retirement
system or benefits under the Workers' Compensation or
Occupational Disease Act.
(d) The basic group life insurance coverage shall
continue, with full State contribution, where such person is
(1) absent from active service by reason of disability
arising from any cause other than self-inflicted, (2) on
authorized educational leave of absence or sabbatical leave,
or (3) on military leave with pay and benefits.
(e) Where the person is in non-pay status for a period
in excess of 30 days or on leave of absence, other than by
reason of disability, educational or sabbatical leave, or
military leave with pay and benefits, such person may
continue coverage only by making personal payment equal to
the amount normally contributed by the State on such person's
behalf. Such payments and coverage may be continued: (1)
until such time as the person returns to a status eligible
for coverage at State expense, but not to exceed 24 months,
(2) until such person's employment or annuitant status with
the State is terminated, or (3) for a maximum period of 4
years for members on military leave with pay and benefits and
military leave without pay and benefits (exclusive of any
additional service imposed pursuant to law).
(f) The Department shall establish by rule the extent
to which other employee benefits will continue for persons in
non-pay status or who are not in active service.
(g) The State shall not pay the cost of the basic
non-contributory group life insurance, program of health
benefits and other employee benefits for members who are
survivors as defined by paragraphs (1) and (2) of subsection
(q) of Section 3 of this Act. The costs of benefits for
these survivors shall be paid by the survivors or by the
University of Illinois Cooperative Extension Service, or any
combination thereof.
(h) Those persons occupying positions with any
department as a result of emergency appointments pursuant to
Section 8b.8 of the Personnel Code who are not considered
employees under this Act shall be given the option of
participating in the programs of group life insurance, health
benefits and other employee benefits. Such persons electing
coverage may participate only by making payment equal to the
amount normally contributed by the State for similarly
situated employees. Such amounts shall be determined by the
Director. Such payments and coverage may be continued until
such time as the person becomes an employee pursuant to this
Act or such person's appointment is terminated.
(i) Any unit of local government within the State of
Illinois may apply to the Director to have its employees,
annuitants, and their dependents provided group health
coverage under this Act on a non-insured basis. To
participate, a unit of local government must agree to enroll
all of its employees, who may select coverage under either
the State group health insurance plan or a health maintenance
organization that has contracted with the State to be
available as a health care provider for employees as defined
in this Act. A unit of local government must remit the
entire cost of providing coverage under the State group
health insurance plan or, for coverage under a health
maintenance organization, an amount determined by the
Director based on an analysis of the sex, age, geographic
location, or other relevant demographic variables for its
employees, except that the unit of local government shall not
be required to enroll those of its employees who are covered
spouses or dependents under this plan or another group policy
or plan providing health benefits as long as (1) an
appropriate official from the unit of local government
attests that each employee not enrolled is a covered spouse
or dependent under this plan or another group policy or plan,
and (2) at least 85% of the employees are enrolled and the
unit of local government remits the entire cost of providing
coverage to those employees. Employees of a participating
unit of local government who are not enrolled due to coverage
under another group health policy or plan may enroll at a
later date subject to submission of satisfactory evidence of
insurability and provided that no benefits shall be payable
for services incurred during the first 6 months of coverage
to the extent the services are in connection with any
pre-existing condition. A participating unit of local
government may also elect to cover its annuitants. Dependent
coverage shall be offered on an optional basis, with the
costs paid by the unit of local government, its employees, or
some combination of the two as determined by the unit of
local government. The unit of local government shall be
responsible for timely collection and transmission of
dependent premiums.
The Director shall annually determine monthly rates of
payment, subject to the following constraints:
(1) In the first year of coverage, the rates shall
be equal to the amount normally charged to State
employees for elected optional coverages or for enrolled
dependents coverages or other contributory coverages, or
contributed by the State for basic insurance coverages on
behalf of its employees, adjusted for differences between
State employees and employees of the local government in
age, sex, geographic location or other relevant
demographic variables, plus an amount sufficient to pay
for the additional administrative costs of providing
coverage to employees of the unit of local government and
their dependents.
(2) In subsequent years, a further adjustment shall
be made to reflect the actual prior years' claims
experience of the employees of the unit of local
government.
In the case of coverage of local government employees
under a health maintenance organization, the Director shall
annually determine for each participating unit of local
government the maximum monthly amount the unit may contribute
toward that coverage, based on an analysis of (i) the age,
sex, geographic location, and other relevant demographic
variables of the unit's employees and (ii) the cost to cover
those employees under the State group health insurance plan.
The Director may similarly determine the maximum monthly
amount each unit of local government may contribute toward
coverage of its employees' dependents under a health
maintenance organization.
Monthly payments by the unit of local government or its
employees for group health insurance or health maintenance
organization coverage shall be deposited in the Local
Government Health Insurance Reserve Fund. The Local
Government Health Insurance Reserve Fund shall be a
continuing fund not subject to fiscal year limitations. All
expenditures from this fund shall be used for payments for
health care benefits for local government and rehabilitation
facility employees, annuitants, and dependents, and to
reimburse the Department or its administrative service
organization for all expenses incurred in the administration
of benefits. No other State funds may be used for these
purposes.
A local government employer's participation or desire to
participate in a program created under this subsection shall
not limit that employer's duty to bargain with the
representative of any collective bargaining unit of its
employees.
(j) Any rehabilitation facility within the State of
Illinois may apply to the Director to have its employees,
annuitants, and their dependents provided group health
coverage under this Act on a non-insured basis. To
participate, a rehabilitation facility must agree to enroll
all of its employees and remit the entire cost of providing
such coverage for its employees, except that the
rehabilitation facility shall not be required to enroll those
of its employees who are covered spouses or dependents under
this plan or another group policy or plan providing health
benefits as long as (1) an appropriate official from the
rehabilitation facility attests that each employee not
enrolled is a covered spouse or dependent under this plan or
another group policy or plan, and (2) at least 85% of the
employees are enrolled and the rehabilitation facility remits
the entire cost of providing coverage to those employees.
Employees of a participating rehabilitation facility who are
not enrolled due to coverage under another group health
policy or plan may enroll at a later date subject to
submission of satisfactory evidence of insurability and
provided that no benefits shall be payable for services
incurred during the first 6 months of coverage to the extent
the services are in connection with any pre-existing
condition. A participating rehabilitation facility may also
elect to cover its annuitants. Dependent coverage shall be
offered on an optional basis, with the costs paid by the
rehabilitation facility, its employees, or some combination
of the 2 as determined by the rehabilitation facility. The
rehabilitation facility shall be responsible for timely
collection and transmission of dependent premiums.
The Director shall annually determine quarterly rates of
payment, subject to the following constraints:
(1) In the first year of coverage, the rates shall
be equal to the amount normally charged to State
employees for elected optional coverages or for enrolled
dependents coverages or other contributory coverages on
behalf of its employees, adjusted for differences between
State employees and employees of the rehabilitation
facility in age, sex, geographic location or other
relevant demographic variables, plus an amount sufficient
to pay for the additional administrative costs of
providing coverage to employees of the rehabilitation
facility and their dependents.
(2) In subsequent years, a further adjustment shall
be made to reflect the actual prior years' claims
experience of the employees of the rehabilitation
facility.
Monthly payments by the rehabilitation facility or its
employees for group health insurance shall be deposited in
the Local Government Health Insurance Reserve Fund.
(k) Any domestic violence shelter or service within the
State of Illinois may apply to the Director to have its
employees, annuitants, and their dependents provided group
health coverage under this Act on a non-insured basis. To
participate, a domestic violence shelter or service must
agree to enroll all of its employees and pay the entire cost
of providing such coverage for its employees. A
participating domestic violence shelter may also elect to
cover its annuitants. Dependent coverage shall be offered on
an optional basis, with employees, or some combination of the
2 as determined by the domestic violence shelter or service.
The domestic violence shelter or service shall be responsible
for timely collection and transmission of dependent premiums.
The Director shall annually determine quarterly rates of
payment, subject to the following constraints:
(1) In the first year of coverage, the rates shall
be equal to the amount normally charged to State
employees for elected optional coverages or for enrolled
dependents coverages or other contributory coverages on
behalf of its employees, adjusted for differences between
State employees and employees of the domestic violence
shelter or service in age, sex, geographic location or
other relevant demographic variables, plus an amount
sufficient to pay for the additional administrative costs
of providing coverage to employees of the domestic
violence shelter or service and their dependents.
(2) In subsequent years, a further adjustment shall
be made to reflect the actual prior years' claims
experience of the employees of the domestic violence
shelter or service.
(3) In no case shall the rate be less than the
amount normally charged to State employees or contributed
by the State on behalf of its employees.
Monthly payments by the domestic violence shelter or
service or its employees for group health insurance shall be
deposited in the Local Government Health Insurance Reserve
Fund.
(l) A public community college or entity organized
pursuant to the Public Community College Act may apply to the
Director initially to have only annuitants not covered prior
to July 1, 1992 by the district's health plan provided health
coverage under this Act on a non-insured basis. The
community college must execute a 2-year contract to
participate in the Local Government Health Plan. Those
annuitants enrolled initially under this contract shall have
no benefits payable for services incurred during the first 6
months of coverage to the extent the services are in
connection with any pre-existing condition. Any annuitant
who may enroll after this initial enrollment period shall be
subject to submission of satisfactory evidence of
insurability and to the pre-existing conditions limitation.
The Director shall annually determine monthly rates of
payment subject to the following constraints: for those
community colleges with annuitants only enrolled, first year
rates shall be equal to the average cost to cover claims for
a State member adjusted for demographics, Medicare
participation, and other factors; and in the second year, a
further adjustment of rates shall be made to reflect the
actual first year's claims experience of the covered
annuitants.
(m) The Director shall adopt any rules deemed necessary
for implementation of this amendatory Act of 1989 (Public Act
86-978).
(Source: P.A. 89-53, eff. 7-1-95; 89-236, eff. 8-4-95;
89-324, eff. 8-13-95; 89-626, eff. 8-9-96; 90-65, eff.
7-7-97.)
Section 10. The Illinois Pension Code is amended by
changing Sections 16-132, 16-133, 16-133.2, 16-152, and
16-158 and adding Section 16-129.1 as follows:
(40 ILCS 5/16-129.1 new)
Sec. 16-129.1. Optional increase in retirement annuity.
(a) A member of the System may qualify for the augmented
rate under subdivision (a)(B)(1) of Section 16-133 for all
years of creditable service earned before July 1, 1998 by
making the optional contribution specified in subsection (b).
A member may not elect to qualify for the augmented rate for
only a portion of his or her creditable service earned before
July 1, 1998.
(b) The contribution shall be an amount equal to 1.0% of
the member's highest salary rate in the 4 consecutive school
years immediately prior to but not including the school year
in which the application occurs, multiplied by the number of
years of creditable service earned by the member before July
1, 1998 or 20, whichever is less. This contribution shall be
reduced by 1.0% of that salary rate for every 3 full years of
creditable service earned by the member after June 30, 1998.
The contribution shall not in any event exceed 20% of that
salary rate.
The member shall pay to the System the amount of the
contribution as calculated at the time of application under
this Section. The amount of the contribution determined
under this subsection shall be recalculated at the time of
retirement, and if the System determines that the amount paid
by the member exceeds the recalculated amount, the System
shall refund the difference to the member with regular
interest from the date of payment to the date of refund.
The contribution required by this subsection shall be
paid in one of the following ways or in a combination of the
following ways that does not extend over more than 5 years:
(i) in a lump sum on or before the date of
retirement;
(ii) in substantially equal installments over a
period of time not to exceed 5 years, as a deduction from
salary in accordance with subsection (b) of Section
16-154;
(iii) if the member becomes an annuitant before
June 30, 2003, in substantially equal monthly
installments over a 24-month period, by reducing the
annuitant's monthly benefit over a 24-month period by the
amount of the otherwise applicable contribution. For
federal and Illinois tax purposes, the monthly amount by
which the annuitant's benefit is reduced shall not be
treated as a contribution by the annuitant, but rather as
a reduction of the annuitant's monthly benefit.
(c) If the member fails to make the full contribution
under this Section in a timely fashion, the payments made
under this Section shall be refunded to the member, without
interest. If the member dies before making the full
contribution, the payments made under this Section, together
with regular interest thereon, shall be refunded to the
member's designated beneficiary for benefits under Section
16-138.
(d) For purposes of this Section and subdivision
(a)(B)(1) of Section 16-133, optional creditable service
established by a member shall be deemed to have been earned
at the time of the employment or other qualifying event upon
which the service is based, rather than at the time the
credit was established in this System.
(e) The contributions required under this Section are
the responsibility of the teacher and not the teacher's
employer. However, an employer of teachers may, after the
effective date of this amendatory Act of 1998, specifically
agree, through collective bargaining or otherwise, to make
the contributions required by this Section on behalf of those
teachers.
(40 ILCS 5/16-132) (from Ch. 108 1/2, par. 16-132)
Sec. 16-132. Retirement annuity eligibility. A member
who has at least 20 years of creditable service is entitled
to a retirement annuity upon or after attainment of age 55.
A member who has at least 10 but less than 20 years of
creditable service is entitled to a retirement annuity upon
or after attainment of age 60. A member who has at least 5
but less than 10 years of creditable service is entitled to a
retirement annuity upon or after attainment of age 62. A
member who is eligible to receive a retirement annuity of at
least 74.6% of final average salary and will attain age 55 on
or before December 31 during the year which commences on July
1 shall be deemed to attain age 55 on the preceding June 1.
A member meeting the above eligibility conditions is
entitled to a retirement annuity upon written application to
the board setting forth the date the member wishes the
retirement annuity to commence. However, the effective date
of the retirement annuity shall be no earlier than the day
following the last day of creditable service, regardless of
the date of official termination of employment. To be
eligible for a retirement annuity, a member shall not be
employed as a teacher in the schools included under this
System or under Article 17, unless the member is disabled (in
which event, eligibility for salary must cease), or unless
the System is required by federal law to commence payment due
to the member's age; the changes to this sentence made by
this amendatory Act of 1991 shall apply without regard to
whether the member terminated employment before or after its
effective date.
(Source: P.A. 85-1008; 86-1488.)
(40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)
Sec. 16-133. Retirement annuity; amount.
(a) The amount of the retirement annuity shall be the
larger of the amounts determined under paragraphs (A) and (B)
below:
(A) An amount consisting of the sum of the
following:
(1) An amount that can be provided on an
actuarially equivalent basis by the member's
accumulated contributions at the time of retirement;
and
(2) The sum of (i) the amount that can be
provided on an actuarially equivalent basis by the
member's accumulated contributions representing
service prior to July 1, 1947, and (ii) the amount
that can be provided on an actuarially equivalent
basis by the amount obtained by multiplying 1.4
times the member's accumulated contributions
covering service subsequent to June 30, 1947; and
(3) If there is prior service, 2 times the
amount that would have been determined under
subparagraph (2) of paragraph (A) above on account
of contributions which would have been made during
the period of prior service creditable to the member
had the System been in operation and had the member
made contributions at the contribution rate in
effect prior to July 1, 1947.
(B) An amount consisting of the greater of the
following:
(1) For creditable service earned before July
1, 1998 that has not been augmented under Section
16-129.1: 1.67% of final average salary for each of
the first 10 years of creditable service, 1.90% of
final average salary for each year in excess of 10
but not exceeding 20, 2.10% of final average salary
for each year in excess of 20 but not exceeding 30,
and 2.30% of final average salary for each year in
excess of 30; and
For creditable service earned on or after July
1, 1998 by a member who has at least 30 years of
creditable service on July 1, 1998 and who does not
elect to augment service under Section 16-129.1:
2.3% of final average salary for each year of
creditable service earned on or after July 1, 1998;
and
For all other creditable service: 2.2% of
final average salary for each year of creditable
service; or
(2) 1.5% 1 1/2% of final average salary for
each year of creditable service plus the sum $7.50
for each of the first 20 years of creditable
service.
The amount of the retirement annuity determined under
this paragraph (B) shall be reduced by 1/2 of 1% for each
month that the member is less than age 60 at the time the
retirement annuity begins. However, this reduction shall
not apply (i) if the member has at least 35 years of
creditable service, or (ii) if the member retires on
account of disability under Section 16-149.2 of this
Article with at least 20 years of creditable service.
(b) For purposes of this Section, final average salary
shall be the average salary for the highest 4 consecutive
years within the last 10 years of creditable service as
determined under rules of the board. The minimum final
average salary shall be considered to be $2,400 per year.
In the determination of final average salary for members
other than elected officials and their appointees when such
appointees are allowed by statute, that part of a member's
salary for any year beginning after June 30, 1979 which
exceeds the member's annual full-time salary rate with the
same employer for the preceding year by more than 20% shall
be excluded.
(c) In determining the amount of the retirement annuity
under paragraph (B) of this Section, a fractional year shall
be granted proportional credit.
(d) The retirement annuity determined under paragraph
(B) of this Section shall be available only to members who
render teaching service after July 1, 1947 for which member
contributions are required, and to annuitants who re-enter
under the provisions of Section 16-150.
(e) The maximum retirement annuity provided under
paragraph (B) of this Section shall be 75% of final average
salary.
(f) A member retiring after the effective date of this
amendatory Act of 1998 shall receive a pension equal to 75%
of final average salary if the member is qualified to receive
a retirement annuity equal to at least 74.6% of final average
salary under this Article or as proportional annuities under
Article 20 of this Code.
(Source: P.A. 86-273; 87-794; 87-1265.)
(40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)
Sec. 16-133.2. Early retirement without discount. A
member retiring after June 1, 1980 and on or before June 30,
2000, and applying for a retirement annuity within 6 months
of the last day of teaching for which retirement
contributions were required, may elect at the time of
application for a retirement annuity, to make a one time
member contribution to the System and thereby avoid the
reduction in the retirement annuity for retirement before age
60 specified in paragraph (B) of Section 16-133. The
exercise of the election shall also obligate the last
employer to make a one time non-refundable contribution to
the System. Substitute teachers wishing to exercise this
election must teach 85 or more days in one school term with
one employer, who shall be deemed the last employer for
purposes of this Section. The last day of teaching with that
employer must be within 6 months of the date of application
for retirement. All substitute teaching credit applied
toward the required 85 days must be earned after June 30,
1990.
The one time member and employer contributions shall be a
percentage of the retiring member's highest annual salary
rate used in the determination of the average salary for
retirement annuity purposes. However, when determining the
one-time member and employer contributions, that part of a
member's salary with the same employer which exceeds the
annual salary rate for the preceding year by more than 20%
shall be excluded. The member contribution shall be at the
rate of 7% for the lesser of the following 2 periods: (1)
for each year that the member is less than age 60; or (2) for
each year that the member's creditable service is less than
35 years. If a member is at least age 55 and has at least 34
years of creditable service, no member contribution for the
early retirement option shall be required. The employer
contribution shall be at the rate of 20% for each year the
member is under age 60.
Upon receipt of the application and election, the System
shall determine the one time employee and employer
contributions required. The member contribution shall be
credited to the individual account of the member and the
employer contribution shall be credited to the Employer's
Contribution Reserve. The provisions of this Section shall
not be applicable until all the above outlined contributions
have been received by the System; however, the date such
contributions are received shall not be considered in
determining the effective date of retirement.
The number of members working for a single employer who
may retire under this Section in any year may be limited at
the option of the employer to a specified percentage of those
eligible, not less than 30%, with the right to participate to
be allocated among those applying on the basis of seniority
in the service of the employer.
(Source: P.A. 89-10, eff. 3-31-95.)
(40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)
Sec. 16-152. Contributions by members.
(a) Each member shall make contributions for membership
service to this System as follows:
(1) Effective July 1, 1998 1971, contributions of 7.50%
6 1/2% of salary towards the cost of the retirement annuity.
Such contributions shall be deemed "normal contributions".
(2) Effective July 1, 1969, contributions of 1/2 of 1%
of salary toward the cost of the automatic annual increase in
retirement annuity provided under Section 16-133.1.
(3) Effective July 24, 1959, contributions of 1% of
salary towards the cost of survivor benefits. Such
contributions shall not be credited to the individual account
of the member and shall not be subject to refund except as
provided under Section 16-143.2.
(b) The minimum required contribution for any year of
full-time teaching service shall be $192.
(c) Contributions shall not be required of any annuitant
receiving a retirement annuity who is given temporary
employment not exceeding that permitted under Section 16-118.
(d) A person who (i) was a member before July 1, 1998,
(ii) retires with more than 34 years of creditable service,
and (iii) does not elect to qualify for the augmented rate
under Section 16-129.1 shall be entitled, at the time of
retirement, to receive a partial refund of contributions made
under this Section for service occurring after the later of
June 30, 1998 or attainment of 34 years of creditable
service, in an amount equal to 1.00% of the salary upon which
those contributions were based.
(Source: P.A. 83-1440.)
(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
Sec. 16-158. Contributions by State and other employing
units.
(a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded
basis in accordance with actuarial recommendations.
The Board shall determine the amount of State
contributions required for each fiscal year on the basis of
the actuarial tables and other assumptions adopted by the
Board and the recommendations of the actuary, using the
formula in subsection (b-3).
(a-1) Annually, on or before November 15, the board
shall certify to the Governor the amount of the required
State contribution for the coming fiscal year. The
certification shall include a copy of the actuarial
recommendations upon which it is based.
(b) Through State fiscal year 1995, the State
contributions shall be paid to the System in accordance with
Section 18-7 of the School Code.
(b-1) Beginning in State fiscal year 1996, on the 15th
day of each month, or as soon thereafter as may be
practicable, the Board shall submit vouchers for payment of
State contributions to the System, in a total monthly amount
of one-twelfth of the required annual State contribution
certified under subsection (a-1). These vouchers shall be
paid by the State Comptroller and Treasurer by warrants drawn
on the funds appropriated to the System for that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under
Section 8.12 of the State Finance Act and Section 1 of the
State Pension Funds Continuing Appropriation Act) is less
than the amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under
the continuing appropriation authority provided in Section
1.1 of the State Pension Funds Continuing Appropriation Act.
(b-2) Allocations from the Common School Fund
apportioned to school districts not coming under this System
shall not be diminished or affected by the provisions of this
Article.
(b-3) For State fiscal years 2011 through 2045, the
minimum contribution to the System to be made by the State
for each fiscal year shall be an amount determined by the
System to be sufficient to bring the total assets of the
System up to 90% of the total actuarial liabilities of the
System by the end of State fiscal year 2045. In making these
determinations, the required State contribution shall be
calculated each year as a level percentage of payroll over
the years remaining to and including fiscal year 2045 and
shall be determined under the projected unit credit actuarial
cost method.
For State fiscal years 1996 through 2010, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual
increments so that by State fiscal year 2011, the State is
contributing at the rate required under this Section; except
that in the following specified State fiscal years, the State
contribution to the System shall not be less than the
following indicated percentages of the applicable employee
payroll, even if the indicated percentage will produce a
State contribution in excess of the amount otherwise required
under this subsection and subsection (a), and notwithstanding
any contrary certification made under subsection (a-1) before
the effective date of this amendatory Act of 1998: 10.02% in
FY 1999; 10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY
2002; 12.86% in FY 2003; 13.56% in FY 2004; 14.25% in FY
2005; 14.95% in FY 2006; 15.65% in FY 2007; 16.34% in FY
2008; 17.04% in FY 2009; and 17.74% in FY 2010.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed
to maintain the total assets of the System at 90% of the
total actuarial liabilities of the System.
(c) Payment of the required State contributions and of
all pensions, retirement annuities, death benefits, refunds,
and other benefits granted under or assumed by this System,
and all expenses in connection with the administration and
operation thereof, are obligations of the State.
If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs
based upon that service, as determined by the System.
Employer contributions, based on salary paid to members from
federal funds, may be forwarded by the distributing agency of
the State of Illinois to the System prior to allocation, in
an amount determined in accordance with guidelines
established by such agency and the System.
(d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be
forwarded monthly in accordance with guidelines established
by the System.
However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf
of the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
(1) Beginning July 1, 1998 through June 30, 1999,
the employer contribution shall be equal to 0.3% of each
teacher's salary.
(2) Beginning July 1, 1999 and thereafter, the
employer contribution shall be equal to 0.58% of each
teacher's salary.
The school district or other employing unit may pay these
employer contributions out of any source of funding available
for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
These employer contributions are intended to offset a
portion of the cost to the System of the increases in
retirement benefits resulting from this amendatory Act of
1998.
The additional 1% employee contribution required under
Section 16-152 by this amendatory Act of 1998 is the
responsibility of the teacher and not the teacher's employer,
unless the employer agrees, through collective bargaining or
otherwise, to make the contribution on behalf of the teacher.
If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)
for the balance of the term of that contract. The employer
and the employee organization shall jointly certify to the
System the existence of the contractual requirement, in such
form as the System may prescribe. This exclusion shall cease
upon the termination, extension, or renewal of the contract
at any time after May 1, 1998.
(Source: P.A. 87-1265; 88-593, eff. 8-22-94.)
Section 15. The Illinois Pension Code is amended by
changing Sections 17-116, 17-127, and 17-130 and adding
Sections 17-119.1, 17-127.2, and 17-130.2 as follows:
(40 ILCS 5/17-116) (from Ch. 108 1/2, par. 17-116)
Sec. 17-116. Service retirement pension.
(a) Each teacher having 20 years of service upon
attainment of age 55, or who thereafter attains age 55 shall
be entitled to a service retirement pension upon or after
attainment of age 55; and each teacher in service on or after
July 1, 1971, with 5 or more but less than 20 years of
service shall be entitled to receive a service retirement
pension upon or after attainment of age 62. Such pension is
to be calculated as follows:
(b) Beginning as of June 25, 1971, The service
retirement pension for a teacher who retires on or after June
25, 1971 such date, at age 60 or over, shall be calculated as
follows:
(1) For creditable service earned before July 1,
1998 that has not been augmented under Section 17-119.1:
1.67% for each of the first 10 years of service; 1.90%
for each of the next 10 years of service; 2.10% for each
year of service in excess of 20 but not exceeding 30; and
2.30% for each year of service in excess of 30, based
upon average salary as herein defined.
(2) For creditable service earned on or after July
1, 1998 by a member who has at least 30 years of
creditable service on July 1, 1998 and who does not elect
to augment service under Section 17-119.1: 2.3% of
average salary for each year of creditable service earned
on or after July 1, 1998.
(3) For all other creditable service: 2.2% of
average salary for each year of creditable service.
(c) When computing such service retirement pensions, the
following conditions shall apply:
1. Average salary shall consist of the average annual
rate of salary for the 4 consecutive years of validated
service within the last 10 years of service when such average
annual rate was highest. In the determination of average
salary for retirement allowance purposes, for members who
commenced employment after August 31, 1979, that part of the
salary for any year shall be excluded which exceeds the
annual full-time salary rate for the preceding year by more
than 20%. In the case of a member who commenced employment
before August 31, 1979 and who receives salary during any
year after September 1, 1983 which exceeds the annual full
time salary rate for the preceding year by more than 20%, an
Employer and other employers of eligible contributors as
defined in Section 17-106 shall pay to the Fund an amount
equal to the present value of the additional service
retirement pension resulting from such excess salary. The
present value of the additional service retirement pension
shall be computed by the Board on the basis of actuarial
tables adopted by the Board. If a member elects to receive a
pension from this Fund provided by Section 20-121, his salary
under the State Universities Retirement System and the
Teachers' Retirement System of the State of Illinois shall be
considered in determining such average salary. Amounts paid
after the effective date of this amendatory Act of 1991 for
unused vacation time earned after that effective date shall
not under any circumstances be included in the calculation of
average salary or the annual rate of salary for the purposes
of this Article.
2. Proportionate credit shall be given for validated
service of less than one year.
3. For retirement at age 60 or over the pension shall be
payable at the full rate.
4. For separation from service below age 60 to a minimum
age of 55, the pension shall be discounted at the rate of 1/2
of one per cent for each month that the age of the
contributor is less than 60, but a teacher may elect to defer
the effective date of pension in order to eliminate or reduce
this discount. This discount shall not be applicable to any
participant who has at least 34 35 years of service or a
retirement pension of at least 74.6% of average salary on the
date the retirement annuity begins.
5. No additional pension shall be granted for service
exceeding 45 years. Beginning June 26, 1971 no pension shall
exceed the greater of $1,500 per month or 75% of average
salary as herein defined.
6. Service retirement pensions shall begin on the
effective date of resignation, retirement, the day following
the close of the payroll period for which service credit was
validated, or the time the person resigning or retiring
attains age 55, or on a date elected by the teacher,
whichever shall be latest.
7. A member who is eligible to receive a retirement
pension of at least 74.6% of average salary and will attain
age 55 on or before December 31 during the year which
commences on July 1 shall be deemed to attain age 55 on the
preceding June 1.
8. A member retiring after the effective date of this
amendatory Act of 1998 shall receive a pension equal to 75%
of average salary if the member is qualified to receive a
retirement pension equal to at least 74.6% of average salary
under this Article or as proportional annuities under Article
20 of this Code.
(Source: P.A. 90-566, eff. 1-2-98.)
(40 ILCS 5/17-119.1 new)
Sec. 17-119.1. Optional increase in retirement annuity.
(a) A member of the Fund may qualify for the augmented
rate under subdivision (b)(3) of Section 17-116 for all years
of creditable service earned before July 1, 1998 by making
the optional contribution specified in subsection (b). A
member may not elect to qualify for the augmented rate for
only a portion of his or her creditable service earned before
July 1, 1998.
(b) The contribution shall be an amount equal to 1.0% of
the member's highest salary rate in the 4 consecutive school
years immediately prior to but not including the school year
in which the application occurs, multiplied by the number of
years of creditable service earned by the member before July
1, 1998 or 20, whichever is less. This contribution shall be
reduced by 1.0% of that salary rate for every 3 full years of
creditable service earned by the member after June 30, 1998.
The contribution shall not in any event exceed 20% of that
salary rate.
The member shall pay to the Fund the amount of the
contribution as calculated at the time of application under
this Section. The amount of the contribution determined
under this subsection shall be recalculated at the time of
retirement, and if the Fund determines that the amount paid
by the member exceeds the recalculated amount, the Fund shall
refund the difference to the member with regular interest
from the date of payment to the date of refund.
The contribution required by this subsection shall be
paid in one of the following ways or in a combination of the
following ways that does not extend over more than 5 years:
(i) in a lump sum on or before the date of
retirement;
(ii) in substantially equal installments over a
period of time not to exceed 5 years, as a deduction from
salary in accordance with Section 17-130.2;
(iii) if the member becomes an annuitant before
June 30, 2003, in substantially equal monthly
installments over a 24-month period, by a deduction from
the annuitant's monthly benefit.
(c) If the member fails to make the full contribution
under this Section in a timely fashion, the payments made
under this Section shall be refunded to the member, without
interest. If the member dies before making the full
contribution, the payments made under this Section shall be
refunded to the member's designated beneficiary.
(d) For purposes of this Section and subsection (b) of
Section 17-116, optional creditable service established by a
member shall be deemed to have been earned at the time of the
employment or other qualifying event upon which the service
is based, rather than at the time the credit was established
in this Fund.
(e) The contributions required under this Section are
the responsibility of the teacher and not the teacher's
employer. However, an employer of teachers may, after the
effective date of this amendatory Act of 1998, specifically
agree, through collective bargaining or otherwise, to make
the contributions required by this Section on behalf of those
teachers.
(40 ILCS 5/17-127) (from Ch. 108 1/2, par. 17-127)
Sec. 17-127. Financing; revenues for the Fund.
(a) The revenues for the Fund shall consist of: (1)
amounts paid into the Fund by contributors thereto and from
employer contributions and State appropriations in accordance
with this Article; (2) amounts contributed to the Fund by an
Employer; (3) amounts contributed to the Fund pursuant to any
law now in force or hereafter to be enacted; (4)
contributions from any other source; and (5) the earnings on
investments.
(b) The General Assembly finds that for many years the
State has contributed to the Fund an annual amount that is
between 20% and 30% of the amount of the annual State
contribution to the Article 16 retirement system, and the
General Assembly declares that it is its goal and intention
to continue this level of contribution to the Fund in the
future.
Beginning in State fiscal year 1999, the State shall
include in its annual contribution to the Fund an additional
amount equal to 0.544% of the Fund's total teacher payroll;
except that this additional contribution need not be made in
a fiscal year if the Board has certified in the previous
fiscal year that the Fund is at least 90% funded, based on
actuarial determinations. These additional State
contributions are intended to offset a portion of the cost to
the Fund of the increases in retirement benefits resulting
from this amendatory Act of 1998.
(Source: P.A. 90-548, eff. 12-4-97; 90-566, eff. 1-2-98;
revised 1-8-98.)
(40 ILCS 5/17-127.2 new)
Sec. 17-127.2. Additional contributions by employer of
teachers.
(a) Beginning July 1, 1998, the employer of a teacher
shall pay to the Fund an employer contribution computed as
follows:
(1) Beginning July 1, 1998 through June 30, 1999,
the employer contribution shall be equal to 0.3% of each
teacher's salary.
(2) Beginning July 1, 1999 and thereafter, the
employer contribution shall be equal to 0.58% of each
teacher's salary.
The employer may pay these employer contributions out of any
source of funding available for that purpose and shall
forward the contributions to the Fund on the schedule
established for the payment of member contributions.
These employer contributions need not be made in a fiscal
year if the Board has certified in the previous fiscal year
that the Fund is at least 90% funded, based on actuarial
determinations.
These employer contributions are intended to offset a
portion of the cost to the Fund of the increases in
retirement benefits resulting from this amendatory Act of
1998.
(40 ILCS 5/17-130) (from Ch. 108 1/2, par. 17-130)
Sec. 17-130. Participants' contributions by payroll
deductions.
(a) There shall be deducted from the salary of each
teacher 7.50% 6 1/2% of his salary for service or disability
retirement pension and 0.5% 1/2 of 1% of salary for the
annual increase in base pension.
In addition, there shall be deducted from the salary of
each teacher 1% of his salary for survivors' and children's
pensions.
(b) An Employer and any employer of eligible
contributors as defined in Section 17-106 is authorized to
make the necessary deductions from the salaries of its
teachers. Such amounts shall be included as a part of the
Fund. An Employer and any employer of eligible contributors
as defined in Section 17-106 shall formulate such rules and
regulations as may be necessary to give effect to the
provisions of this Section.
(c) All persons employed as teachers shall, by such
employment, accept the provisions of this Article and of
Sections 34-83 to 34-87, inclusive, of "The School Code",
approved March 18, 1961, as amended, and thereupon become
contributors to the Fund in accordance with the terms
thereof. The provisions of this Article and of those
Sections shall become a part of the contract of employment.
(d) A person who (i) was a member before July 1, 1998,
(ii) retires with more than 34 years of creditable service,
and (iii) does not elect to qualify for the augmented rate
under Section 17-119.1 shall be entitled, at the time of
retirement, to receive a partial refund of contributions made
under this Section for service occurring after the later of
June 30, 1998 or attainment of 34 years of creditable
service, in an amount equal to 1.00% of the salary upon which
those contributions were based.
(Source: P.A. 90-566, eff. 1-2-98.)
(40 ILCS 5/17-130.2 new)
Sec. 17-130.2. Pickup of optional contributions.
(a) For the purposes of this Section, "optional
contributions" means contributions that a member elects to
make in order to qualify for the augmented service retirement
pension rate under Section 17-119.1.
(b) Subject to the requirements of federal law and the
rules of the Board, beginning July 1, 1998 a member who is
employed on a full-time basis may elect to have the Employer
pick up optional contributions that the member has elected to
pay to the Fund, and the contributions so picked up shall be
treated as employer contributions for the purposes of
determining federal tax treatment. The election to have
optional contributions picked up is irrevocable. At the time
of making the election, the member shall execute a binding,
irrevocable payroll deduction authorization. Upon receiving
notice of the election, the Employer shall pick up the
contributions by a reduction in the cash salary of the member
and shall pay the contributions from the same source of funds
that is used to pay earnings to the member.
(c) Each Employer under this Fund shall take the steps
necessary to comply with the requirements of Section 414(h)
of the Internal Revenue Code of 1986, as amended, to permit
the pickup of optional contributions on a tax-deferred basis.
Section 90. The State Mandates Act is amended by adding
Section 8.22 as follows:
(30 ILCS 805/8.22 new)
Sec. 8.22. Exempt mandate. Notwithstanding Sections 6
and 8 of this Act, no reimbursement by the State is required
for the implementation of any mandate created by this
amendatory Act of 1998.
Section 99. Effective date. This Act takes effect upon
becoming law.