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Illinois House Bill HB3270

Illinois 2023-2024 Regular Session

Illinois House Bill HB3270 Compare Versions

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11 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3270 Introduced , by Rep. Travis Weaver SYNOPSIS AS INTRODUCED: 40 ILCS 5/1-161 Amends the General Provisions Article of the Illinois Pension Code. Provides that the State Employees' Retirement System of Illinois, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois shall establish an implementation date of no later than July 1, 2025 for specified benefits for Tier 2 members who elect to receive those benefits and persons who first become members on or after the implementation date and meet other criteria. LRB103 29561 RPS 55956 b A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3270 Introduced , by Rep. Travis Weaver SYNOPSIS AS INTRODUCED: 40 ILCS 5/1-161 40 ILCS 5/1-161 Amends the General Provisions Article of the Illinois Pension Code. Provides that the State Employees' Retirement System of Illinois, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois shall establish an implementation date of no later than July 1, 2025 for specified benefits for Tier 2 members who elect to receive those benefits and persons who first become members on or after the implementation date and meet other criteria. LRB103 29561 RPS 55956 b LRB103 29561 RPS 55956 b A BILL FOR
22 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3270 Introduced , by Rep. Travis Weaver SYNOPSIS AS INTRODUCED:
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55 Amends the General Provisions Article of the Illinois Pension Code. Provides that the State Employees' Retirement System of Illinois, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois shall establish an implementation date of no later than July 1, 2025 for specified benefits for Tier 2 members who elect to receive those benefits and persons who first become members on or after the implementation date and meet other criteria.
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1111 1 AN ACT concerning public employee benefits.
1212 2 Be it enacted by the People of the State of Illinois,
1313 3 represented in the General Assembly:
1414 4 Section 5. The Illinois Pension Code is amended by
1515 5 changing Section 1-161 as follows:
1616 6 (40 ILCS 5/1-161)
1717 7 Sec. 1-161. Optional benefits for certain Tier 2 members
1818 8 under Articles 14, 15, and 16.
1919 9 (a) Notwithstanding any other provision of this Code to
2020 10 the contrary, the provisions of this Section apply to a person
2121 11 who first becomes a member or a participant under Article 14,
2222 12 15, or 16 on or after the implementation date under this
2323 13 Section for the applicable Article and who does not make the
2424 14 election under subsection (b) or (c), whichever applies. The
2525 15 provisions of this Section also apply to a person who makes the
2626 16 election under subsection (c-5). However, the provisions of
2727 17 this Section do not apply to any participant in a self-managed
2828 18 plan, nor to a covered employee under Article 14.
2929 19 As used in this Section and Section 1-160, the
3030 20 "implementation date" under this Section means the earliest
3131 21 date upon which the board of a retirement system authorizes
3232 22 members of that system to begin participating in accordance
3333 23 with this Section, as determined by the board of that
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4040 Amends the General Provisions Article of the Illinois Pension Code. Provides that the State Employees' Retirement System of Illinois, the State Universities Retirement System, and the Teachers' Retirement System of the State of Illinois shall establish an implementation date of no later than July 1, 2025 for specified benefits for Tier 2 members who elect to receive those benefits and persons who first become members on or after the implementation date and meet other criteria.
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6868 1 retirement system. Each of the retirement systems subject to
6969 2 this Section shall endeavor to make such participation
7070 3 available as soon as possible after the effective date of this
7171 4 Section and shall establish an implementation date by board
7272 5 resolution, but all retirement systems subject to this Section
7373 6 shall establish an implementation date that is no later than
7474 7 July 1, 2025.
7575 8 (b) In lieu of the benefits provided under this Section, a
7676 9 member or participant, except for a participant under Article
7777 10 15, may irrevocably elect the benefits under Section 1-160 and
7878 11 the benefits otherwise applicable to that member or
7979 12 participant. The election must be made within 30 days after
8080 13 becoming a member or participant. Each retirement system shall
8181 14 establish procedures for making this election.
8282 15 (c) A participant under Article 15 may irrevocably elect
8383 16 the benefits otherwise provided to a Tier 2 member under
8484 17 Article 15. The election must be made within 30 days after
8585 18 becoming a member. The retirement system under Article 15
8686 19 shall establish procedures for making this election.
8787 20 (c-5) A non-covered participant under Article 14 to whom
8888 21 Section 1-160 applies, a Tier 2 member under Article 15, or a
8989 22 participant under Article 16 to whom Section 1-160 applies may
9090 23 irrevocably elect to receive the benefits under this Section
9191 24 in lieu of the benefits under Section 1-160 or the benefits
9292 25 otherwise available to a Tier 2 member under Article 15,
9393 26 whichever is applicable. Each retirement System shall
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104104 1 establish procedures for making this election.
105105 2 (d) "Final average salary" means the average monthly (or
106106 3 annual) salary obtained by dividing the total salary or
107107 4 earnings calculated under the Article applicable to the member
108108 5 or participant during the last 120 months (or 10 years) of
109109 6 service in which the total salary or earnings calculated under
110110 7 the applicable Article was the highest by the number of months
111111 8 (or years) of service in that period. For the purposes of a
112112 9 person to whom this Section applies, in this Code, "final
113113 10 average salary" shall be substituted for "final average
114114 11 compensation" in Article 14.
115115 12 (e) Beginning on the implementation date, for all purposes
116116 13 under this Code (including without limitation the calculation
117117 14 of benefits and employee contributions), the annual earnings,
118118 15 salary, compensation, or wages (based on the plan year) of a
119119 16 member or participant to whom this Section applies shall not
120120 17 at any time exceed the federal Social Security Wage Base then
121121 18 in effect.
122122 19 (f) A member or participant is entitled to a retirement
123123 20 annuity upon written application if he or she has attained the
124124 21 normal retirement age determined by the Social Security
125125 22 Administration for that member or participant's year of birth,
126126 23 but no earlier than 67 years of age, and has at least 10 years
127127 24 of service credit and is otherwise eligible under the
128128 25 requirements of the applicable Article.
129129 26 (g) The amount of the retirement annuity to which a member
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140140 1 or participant is entitled shall be computed by multiplying
141141 2 1.25% for each year of service credit by his or her final
142142 3 average salary.
143143 4 (h) Any retirement annuity or supplemental annuity shall
144144 5 be subject to annual increases on the first anniversary of the
145145 6 annuity start date. Each annual increase shall be one-half the
146146 7 annual unadjusted percentage increase (but not less than zero)
147147 8 in the consumer price index-w for the 12 months ending with the
148148 9 September preceding each November 1 of the originally granted
149149 10 retirement annuity. If the annual unadjusted percentage change
150150 11 in the consumer price index-w for the 12 months ending with the
151151 12 September preceding each November 1 is zero or there is a
152152 13 decrease, then the annuity shall not be increased.
153153 14 For the purposes of this Section, "consumer price index-w"
154154 15 means the index published by the Bureau of Labor Statistics of
155155 16 the United States Department of Labor that measures the
156156 17 average change in prices of goods and services purchased by
157157 18 Urban Wage Earners and Clerical Workers, United States city
158158 19 average, all items, 1982-84 = 100. The new amount resulting
159159 20 from each annual adjustment shall be determined by the Public
160160 21 Pension Division of the Department of Insurance and made
161161 22 available to the boards of the retirement systems and pension
162162 23 funds by November 1 of each year.
163163 24 (i) The initial survivor's or widow's annuity of an
164164 25 otherwise eligible survivor or widow of a retired member or
165165 26 participant to whom this Section applies shall be in the
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176176 1 amount of 66 2/3% of the retired member's or participant's
177177 2 retirement annuity at the date of death. In the case of the
178178 3 death of a member or participant who has not retired and to
179179 4 whom this Section applies, eligibility for a survivor's or
180180 5 widow's annuity shall be determined by the applicable Article
181181 6 of this Code. The benefit shall be 66 2/3% of the earned
182182 7 annuity without a reduction due to age. A child's annuity of an
183183 8 otherwise eligible child shall be in the amount prescribed
184184 9 under each Article if applicable.
185185 10 (j) In lieu of any other employee contributions, except
186186 11 for the contribution to the defined contribution plan under
187187 12 subsection (k) of this Section, each employee shall contribute
188188 13 6.2% of his her or salary to the retirement system. However,
189189 14 the employee contribution under this subsection shall not
190190 15 exceed the amount of the total normal cost of the benefits for
191191 16 all members making contributions under this Section (except
192192 17 for the defined contribution plan under subsection (k) of this
193193 18 Section), expressed as a percentage of payroll and certified
194194 19 on or before January 15 of each year by the board of trustees
195195 20 of the retirement system. If the board of trustees of the
196196 21 retirement system certifies that the 6.2% employee
197197 22 contribution rate exceeds the normal cost of the benefits
198198 23 under this Section (except for the defined contribution plan
199199 24 under subsection (k) of this Section), then on or before
200200 25 December 1 of that year, the board of trustees shall certify
201201 26 the amount of the normal cost of the benefits under this
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212212 1 Section (except for the defined contribution plan under
213213 2 subsection (k) of this Section), expressed as a percentage of
214214 3 payroll, to the State Actuary and the Commission on Government
215215 4 Forecasting and Accountability, and the employee contribution
216216 5 under this subsection shall be reduced to that amount
217217 6 beginning July 1 of that year. Thereafter, if the normal cost
218218 7 of the benefits under this Section (except for the defined
219219 8 contribution plan under subsection (k) of this Section),
220220 9 expressed as a percentage of payroll and certified on or
221221 10 before January 1 of each year by the board of trustees of the
222222 11 retirement system, exceeds 6.2% of salary, then on or before
223223 12 January 15 of that year, the board of trustees shall certify
224224 13 the normal cost to the State Actuary and the Commission on
225225 14 Government Forecasting and Accountability, and the employee
226226 15 contributions shall revert back to 6.2% of salary beginning
227227 16 January 1 of the following year.
228228 17 (k) In accordance with each retirement system's
229229 18 implementation date, each retirement system under Article 14,
230230 19 15, or 16 shall prepare and implement a defined contribution
231231 20 plan for members or participants who are subject to this
232232 21 Section. The defined contribution plan developed under this
233233 22 subsection shall be a plan that aggregates employer and
234234 23 employee contributions in individual participant accounts
235235 24 which, after meeting any other requirements, are used for
236236 25 payouts after retirement in accordance with this subsection
237237 26 and any other applicable laws.
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248248 1 (1) Each member or participant shall contribute a
249249 2 minimum of 4% of his or her salary to the defined
250250 3 contribution plan.
251251 4 (2) For each participant in the defined contribution
252252 5 plan who has been employed with the same employer for at
253253 6 least one year, employer contributions shall be paid into
254254 7 that participant's accounts at a rate expressed as a
255255 8 percentage of salary. This rate may be set for individual
256256 9 employees, but shall be no higher than 6% of salary and
257257 10 shall be no lower than 2% of salary.
258258 11 (3) Employer contributions shall vest when those
259259 12 contributions are paid into a member's or participant's
260260 13 account.
261261 14 (4) The defined contribution plan shall provide a
262262 15 variety of options for investments. These options shall
263263 16 include investments handled by the Illinois State Board of
264264 17 Investment as well as private sector investment options.
265265 18 (5) The defined contribution plan shall provide a
266266 19 variety of options for payouts to retirees and their
267267 20 survivors.
268268 21 (6) To the extent authorized under federal law and as
269269 22 authorized by the retirement system, the defined
270270 23 contribution plan shall allow former participants in the
271271 24 plan to transfer or roll over employee and employer
272272 25 contributions, and the earnings thereon, into other
273273 26 qualified retirement plans.
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284284 1 (7) Each retirement system shall reduce the employee
285285 2 contributions credited to the member's defined
286286 3 contribution plan account by an amount determined by that
287287 4 retirement system to cover the cost of offering the
288288 5 benefits under this subsection and any applicable
289289 6 administrative fees.
290290 7 (8) No person shall begin participating in the defined
291291 8 contribution plan until it has attained qualified plan
292292 9 status and received all necessary approvals from the U.S.
293293 10 Internal Revenue Service.
294294 11 (l) In the case of a conflict between the provisions of
295295 12 this Section and any other provision of this Code, the
296296 13 provisions of this Section shall control.
297297 14 (Source: P.A. 100-23, eff. 7-6-17.)
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