93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB7044


 
Introduced 02/09/04, by Kevin A. McCarthy
 
SYNOPSIS AS INTRODUCED:
 		
















40 ILCS 5/16-133.4
  from Ch. 108 1/2, par. 16-133.4


40 ILCS 5/16-133.5
  from Ch. 108 1/2, par. 16-133.5







    Amends the Downstate Teachers Article of the Illinois Pension Code.  Provides a program of early retirement incentives for certain employees.  Allows purchase of up to 5 years of age enhancement and creditable service.  Effective immediately.
















LRB093 16722 LRD 42373 b

















FISCAL NOTE ACT MAY APPLY


PENSION IMPACT NOTE ACT MAY APPLY
















 


 


A BILL FOR









 











HB7044

LRB093 16722 LRD 42373 b






1
    AN ACT concerning public employee benefits.

 
2
    Be it enacted by the People of the State of Illinois,
 
3
represented in the General Assembly:


 
4
    Section 5. The Illinois Pension Code is amended  by changing 
5
Sections 16-133.4 and 16-133.5 as follows:
 



6
    (40 ILCS 5/16-133.4)  (from Ch. 108 1/2, par. 16-133.4)



7
    Sec. 16-133.4. Early retirement incentives for teachers. 

8
    (a) To be eligible for the benefits provided in this 
9
Section, a member must:


10
        (1) be a member of this System who, on or after May 1, 
11
    2005
1993, is
(i) in active payroll status as a full-time 
12
    teacher employed by an employer
under this Article, or (ii) 
13
    on layoff status from such a position with a
right of 
14
    re-employment or recall to service, or (iii) on disability 
15
    or a
leave of absence from such a position, but only if the 
16
    member has not been
receiving benefits under Section 16-149 
17
    or 16-149.1 for a continuous period
of 2 years or more as 
18
    of the date of application;


19
        (2) have never previously received a retirement 
20
    annuity under this
Article, except that receipt of a 
21
    disability retirement annuity does not
disqualify a member 
22
    if the annuity has been terminated and the member has

23
    returned to full-time employment under this Article before 
24
    the effective
date of this Section;


25
        (3) file with the Board before March 1, 2005
1993, an 
26
    application
requesting the benefits provided in this 
27
    Section;


28
        (4) in the case of an employee of an employer that is a 
29
    not State
agency, be eligible to receive a retirement 
30
    annuity under this Article
(for which purpose any age 
31
    enhancement or creditable service received under
this 
32
    Section may be used), and elect to receive the retirement 
 


 






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LRB093 16722 LRD 42373 b




1
    annuity
beginning not earlier than June 1, 2005
1993 and 
2
    not later than September 1,
2005
1993 (September 1, 2006

3
    1994 if retirement is delayed under subsection (e) of
this 
4
    Section);


5
        (5) in the case of an employee of an employer that is a 
6
    State agency,
be eligible to receive a retirement annuity 
7
    under this Article
(for which purpose any age enhancement 
8
    or creditable service received under
this Section may be 
9
    used), and elect to receive the retirement annuity

10
    beginning not earlier than July 1, 2005
1993 and not later 
11
    than March 1,
2006
1994 (March 1, 2007
1995 if retirement 
12
    is delayed under subsection (e) of
this Section);


13
        (6) have attained age 50 (without the use of any age 
14
    enhancement
received under this Section) by the effective 
15
    date of the retirement annuity;


16
        (7) have at least 5 years of creditable service under 
17
    this System or
any of the participating systems under the 
18
    Retirement Systems Reciprocal
Act (without the use of any 
19
    creditable service received under this Section)
by the 
20
    effective date of the retirement annuity.

21
    (b) An eligible person may establish up to 5 years of 
22
creditable service
under this Section.  In addition, for each 
23
period of creditable service
established under this Section, a 
24
person shall have his or her age at
retirement deemed enhanced 
25
by an equivalent period.

26
    The creditable service established under this Section may 
27
be used for all
purposes under this Article and the Retirement 
28
Systems Reciprocal Act,
except for the computation of final 
29
average salary, the determination of
salary or compensation 
30
under this or any other Article of the Code, or the

31
determination of eligibility for and the computation of 
32
benefits under
Section 16-133.2 of this Article.

33
    The age enhancement established under this Section may be 
34
used for all
purposes under this Article (including calculation 
35
of a proportionate
annuity payable by this System under the 
36
Retirement Systems Reciprocal
Act), except for purposes of a 
 


 






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1
reversionary annuity under Section 16-136,
the retirement 
2
annuity under Section 16-133(a)(A), the required
distributions 
3
under Section 16-142.3, and the determination of eligibility

4
for and the computation of benefits under Section 16-133.2 of 
5
this Article.
However, age enhancement established under this 
6
Section shall not be used
in determining benefits payable under 
7
other Articles of this Code under the
Retirement Systems 
8
Reciprocal Act.

9
    (c) For all creditable service established under this 
10
Section by an
employee of an employer that is not a State 
11
agency, the employer must pay
to the System an employer 
12
contribution consisting of 20% of the member's
highest annual 
13
salary rate used in the determination of the average salary
for 
14
retirement annuity purposes for each year of creditable service 
15
granted
under this Section.  No employer contribution is 
16
required under this
Section from any employer that is a State 
17
agency.

18
    The employer contribution shall be paid to the System in 
19
one of the
following ways:  (i) in a single sum at the time of 
20
the member's
retirement, (ii) in equal quarterly installments 
21
over a period of 5 years
from the date of retirement, or (iii) 
22
subject to the approval of the Board
of the System, in unequal 
23
installments over a period of no more than 5
years from the 
24
date of retirement, as provided in a payment plan designed
by 
25
the System to accommodate the needs of the employer.  The 
26
employer's
failure to make the required contributions in a 
27
timely manner shall not
affect the payment of the retirement 
28
annuity.

29
    For all creditable service established under this Section, 
30
the
employee must pay to the System an employee contribution 
31
consisting of
4% of the member's highest annual salary rate 
32
used in the determination of
the retirement annuity for each 
33
year of creditable service granted under
this Section. The 
34
employee may elect either to pay the employee contribution in

35
full before the retirement annuity commences, or to have it 
36
deducted from the
retirement annuity in 24 monthly 
 


 






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1
installments.

2
    (d) An annuitant who has received any age enhancement or 
3
creditable
service under this Section and who re-enters 
4
contributing service under
this Article shall thereby forfeit 
5
the age enhancement and creditable service,
and upon 
6
re-retirement the annuity shall be recomputed.  The forfeiture 
7
of
creditable service under this subsection shall not entitle 
8
the employer to a
refund of the employer contribution paid 
9
under this Section, nor to forgiveness
of any part of that 
10
contribution that remains unpaid. The forfeiture of
creditable 
11
service under this subsection shall not entitle the employee to 
12
a
refund of the employee contribution paid under this Section.

13
    (e) If the number of employees of an employer that actually 
14
apply for
early retirement under this Section exceeds 30% of 
15
those eligible, the
employer may require that, for the number 
16
of applicants in excess of that
30%, the starting date of the 
17
retirement annuity enhanced under this
Section may not be 
18
earlier than June 1, 2006
1994.  The right to have the

19
retirement annuity begin before that date shall be allocated 
20
among the
applicants on the basis of seniority in the service 
21
of that employer.

22
    This delay applies only to persons who are applying for 
23
early
retirement incentives under this Section, and does not 
24
prevent a person
whose application for early retirement 
25
incentives has been withdrawn from
receiving a retirement 
26
annuity on the earliest date upon which
the person is otherwise 
27
eligible under this Article.

28
    (f) For a member who is notified after February 15, 2005

29
1993, but before
September 15, 2005
1993, that he or she will 
30
be laid off in the 2005-2006
1993-1994 school
year: (1) the 
31
March 1 application deadline in subdivision (a)(3) of this

32
Section is extended to a date 15 days after the date of 
33
issuance of the
layoff notice, and (2) the member shall not be 
34
included in the calculation
of the 30% under subsection (e) and 
35
is not subject to delay in retirement
under that subsection.

36
    (g) A member who receives any early retirement incentive 
 


 






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1
under Section
16-133.5 may not receive any early retirement 
2
incentive under
this Section.

3
(Source: P.A. 87-1265.)

 



4
    (40 ILCS 5/16-133.5)  (from Ch. 108 1/2, par. 16-133.5)


5
    Sec. 16-133.5. Early retirement incentives for teachers. 

6
    (a) To be eligible for the benefits provided in this 
7
Section, a member must:


8
        (1) be a member of this System who, on or after May 1, 
9
    2006
1994, is
(i) in active payroll status as a full-time 
10
    teacher employed by an employer
under this Article, or (ii) 
11
    on layoff status from such a position with a
right of 
12
    re-employment or recall to service, or (iii) on disability 
13
    or a
leave of absence from such a position, but only if the 
14
    member has not been
receiving benefits under Section 16-149 
15
    or 16-149.1 for a continuous period
of 2 years or more as 
16
    of the date of application;


17
        (2) have never previously received a retirement 
18
    annuity under this
Article, except that receipt of a 
19
    disability retirement annuity does not
disqualify a member 
20
    if the annuity has been terminated and the member has

21
    returned to full-time employment under this Article before 
22
    the effective
date of this Section;


23
        (3) file with the Board before March 1, 2006
1994, an 
24
    application
requesting the benefits provided in this 
25
    Section;


26
        (4) be eligible to receive a retirement annuity under 
27
    this Article
(for which purpose any age enhancement or 
28
    creditable service received under
this Section may be 
29
    used), and elect to receive the retirement annuity

30
    beginning not earlier than June 1, 2006
1994 and not later 
31
    than September 1,
2006
1994 (September 1, 2007
1995 if 
32
    retirement is delayed under subsection (e) of
this 
33
    Section);


34
        (5) have attained age 50 (without the use of any age 
35
    enhancement
received under this Section) by the effective 
 


 






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1
    date of the retirement annuity;


2
        (6) have at least 5 years of creditable service under 
3
    this System or
any of the participating systems under the 
4
    Retirement Systems Reciprocal
Act (without the use of any 
5
    creditable service received under this Section)
by the 
6
    effective date of the retirement annuity.

7
    (b) An eligible person may establish up to 5 years of 
8
creditable service
under this Section.  In addition, for each 
9
period of creditable service
established under this Section, a 
10
person shall have his or her age at
retirement deemed enhanced 
11
by an equivalent period.

12
    The creditable service established under this Section may 
13
be used for all
purposes under this Article and the Retirement 
14
Systems Reciprocal Act,
except for the computation of final 
15
average salary, the determination of
salary or compensation 
16
under this or any other Article of the Code, or the

17
determination of eligibility for and the computation of 
18
benefits under
Section 16-133.2 of this Article.

19
    The age enhancement established under this Section may be 
20
used for all
purposes under this Article (including calculation 
21
of a proportionate
annuity payable by this System under the 
22
Retirement Systems Reciprocal
Act), except for purposes of a 
23
reversionary annuity under Section 16-136,
the retirement 
24
annuity under Section 16-133(a)(A), the required
distributions 
25
under Section 16-142.3, and the determination of eligibility

26
for and the computation of benefits under Section 16-133.2 of 
27
this Article.
However, age enhancement established under this 
28
Section shall not be used
in determining benefits payable under 
29
other Articles of this Code under the
Retirement Systems 
30
Reciprocal Act.

31
    (c) For all creditable service established under this 
32
Section, the
employer must pay to the System an employer 
33
contribution consisting of
20% of the member's highest annual 
34
salary rate used in the determination of
the average salary for 
35
retirement annuity purposes for each year of creditable
service 
36
granted under this Section.

 


 






HB7044
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1
    The employer contribution shall be paid to the System in 
2
one of the
following ways:  (i) in a single sum at the time of 
3
the member's
retirement, (ii) in equal quarterly installments 
4
over a period of 5 years
from the date of retirement, or (iii) 
5
subject to the approval of the Board
of the System, in unequal 
6
installments over a period of no more than 5
years from the 
7
date of retirement, as provided in a payment plan designed
by 
8
the System to accommodate the needs of the employer.  The 
9
employer's
failure to make the required contributions in a 
10
timely manner shall not
affect the payment of the retirement 
11
annuity.

12
    For all creditable service established under this Section, 
13
the
employee must pay to the System an employee contribution 
14
consisting of
4% of the member's highest annual salary rate 
15
used in the determination of
the retirement annuity for each 
16
year of creditable service granted under
this Section.
The 
17
employee may elect either to pay the employee contribution in 
18
full
before the retirement annuity commences, or to have it 
19
deducted from
the retirement annuity in 24 monthly 
20
installments.

21
    (d) An annuitant who has received any age enhancement or 
22
creditable
service under this Section and who re-enters 
23
contributing service under
this Article shall thereby forfeit 
24
the age enhancement and creditable service,
and upon 
25
re-retirement the annuity shall be recomputed.  The forfeiture 
26
of
creditable service under this subsection shall not entitle 
27
the employer to a
refund of the employer contribution paid 
28
under this Section, nor to forgiveness
of any part of that 
29
contribution that remains unpaid. The forfeiture of
creditable 
30
service under this subsection shall not entitle the employee to 
31
a
refund of the employee contribution paid under this Section.

32
    (e) If the number of employees of an employer that actually 
33
apply for
early retirement under this Section exceeds 30% of 
34
those eligible, the
employer may require that, for the number 
35
of applicants in excess of that
30%, the starting date of the 
36
retirement annuity enhanced under this
Section may not be 
 


 






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1
earlier than June 1, 2007
1995.  The right to have the

2
retirement annuity begin before that date shall be allocated 
3
among the
applicants on the basis of seniority in the service 
4
of that employer.

5
    This delay applies only to persons who are applying for 
6
early
retirement incentives under this Section, and does not 
7
prevent a person
whose application for early retirement 
8
incentives has been withdrawn from
receiving a retirement 
9
annuity on the earliest date upon which
the person is otherwise 
10
eligible under this Article.

11
    (f) A member who receives any early retirement incentive 
12
under Section
16-133.4 may not receive any early retirement 
13
incentive under
this Section.

14
(Source: P.A. 87-1265.)


 

15
    Section 99. Effective date. This Act takes effect upon 
16
becoming law.