Illinois 2023 2023-2024 Regular Session

Illinois House Bill HB3504 Introduced / Bill

Filed 02/17/2023

                    103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3504 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:   5 ILCS 375/6.5  5 ILCS 375/6.6   Amends the State Employees Group Insurance Act of 1971. Provides that, at least 120 days prior to making any changes to the health benefits for TRS benefit recipients, the Department of Central Management Services shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability. Provides that at least 120 days prior to making any changes to funding for the Teacher Health Insurance Security Fund, the Department shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability.   LRB103 30649 DTM 57107 b   A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3504 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:  5 ILCS 375/6.5  5 ILCS 375/6.6 5 ILCS 375/6.5  5 ILCS 375/6.6  Amends the State Employees Group Insurance Act of 1971. Provides that, at least 120 days prior to making any changes to the health benefits for TRS benefit recipients, the Department of Central Management Services shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability. Provides that at least 120 days prior to making any changes to funding for the Teacher Health Insurance Security Fund, the Department shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability.  LRB103 30649 DTM 57107 b     LRB103 30649 DTM 57107 b   A BILL FOR
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3504 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:
5 ILCS 375/6.5  5 ILCS 375/6.6 5 ILCS 375/6.5  5 ILCS 375/6.6
5 ILCS 375/6.5
5 ILCS 375/6.6
Amends the State Employees Group Insurance Act of 1971. Provides that, at least 120 days prior to making any changes to the health benefits for TRS benefit recipients, the Department of Central Management Services shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability. Provides that at least 120 days prior to making any changes to funding for the Teacher Health Insurance Security Fund, the Department shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability.
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A BILL FOR
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1  AN ACT concerning State government.
2  Be it enacted by the People of the State of Illinois,
3  represented in the General Assembly:
4  Section 5. The State Employees Group Insurance Act of 1971
5  is amended by changing Sections 6.5 and 6.6 as follows:
6  (5 ILCS 375/6.5)
7  Sec. 6.5. Health benefits for TRS benefit recipients and
8  TRS dependent beneficiaries.
9  (a) Purpose. It is the purpose of this amendatory Act of
10  1995 to transfer the administration of the program of health
11  benefits established for benefit recipients and their
12  dependent beneficiaries under Article 16 of the Illinois
13  Pension Code to the Department of Central Management Services.
14  (b) Transition provisions. The Board of Trustees of the
15  Teachers' Retirement System shall continue to administer the
16  health benefit program established under Article 16 of the
17  Illinois Pension Code through December 31, 1995. Beginning
18  January 1, 1996, the Department of Central Management Services
19  shall be responsible for administering a program of health
20  benefits for TRS benefit recipients and TRS dependent
21  beneficiaries under this Section. The Department of Central
22  Management Services and the Teachers' Retirement System shall
23  cooperate in this endeavor and shall coordinate their

 

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3504 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:
5 ILCS 375/6.5  5 ILCS 375/6.6 5 ILCS 375/6.5  5 ILCS 375/6.6
5 ILCS 375/6.5
5 ILCS 375/6.6
Amends the State Employees Group Insurance Act of 1971. Provides that, at least 120 days prior to making any changes to the health benefits for TRS benefit recipients, the Department of Central Management Services shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability. Provides that at least 120 days prior to making any changes to funding for the Teacher Health Insurance Security Fund, the Department shall post those changes on its website and shall submit the planned changes to the Commission on Government Forecasting and Accountability.
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A BILL FOR

 

 

5 ILCS 375/6.5
5 ILCS 375/6.6



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1  activities so as to ensure a smooth transition and
2  uninterrupted health benefit coverage.
3  (c) Eligibility. All persons who were enrolled in the
4  Article 16 program at the time of the transfer shall be
5  eligible to participate in the program established under this
6  Section without any interruption or delay in coverage or
7  limitation as to pre-existing medical conditions. Eligibility
8  to participate shall be determined by the Teachers' Retirement
9  System. Eligibility information shall be communicated to the
10  Department of Central Management Services in a format
11  acceptable to the Department.
12  Eligible TRS benefit recipients may enroll or re-enroll in
13  the program of health benefits established under this Section
14  during any applicable annual open enrollment period and as
15  otherwise permitted by the Department of Central Management
16  Services. A TRS benefit recipient shall not be deemed
17  ineligible to participate solely by reason of the TRS benefit
18  recipient having made a previous election to disenroll or
19  otherwise not participate in the program of health benefits.
20  A TRS dependent beneficiary who is a child age 19 or over
21  and mentally or physically disabled does not become ineligible
22  to participate by reason of (i) becoming ineligible to be
23  claimed as a dependent for Illinois or federal income tax
24  purposes or (ii) receiving earned income, so long as those
25  earnings are insufficient for the child to be fully
26  self-sufficient.

 

 

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1  (d) Coverage. The level of health benefits provided under
2  this Section shall be similar to the level of benefits
3  provided by the program previously established under Article
4  16 of the Illinois Pension Code.
5  Group life insurance benefits are not included in the
6  benefits to be provided to TRS benefit recipients and TRS
7  dependent beneficiaries under this Act.
8  The program of health benefits under this Section may
9  include any or all of the benefit limitations, including but
10  not limited to a reduction in benefits based on eligibility
11  for federal Medicare benefits, that are provided under
12  subsection (a) of Section 6 of this Act for other health
13  benefit programs under this Act.
14  (e) Insurance rates and premiums. The Director shall
15  determine the insurance rates and premiums for TRS benefit
16  recipients and TRS dependent beneficiaries, and shall present
17  to the Teachers' Retirement System of the State of Illinois,
18  by April 15 of each calendar year, the rate-setting
19  methodology (including but not limited to utilization levels
20  and costs) used to determine the amount of the health care
21  premiums.
22  For Fiscal Year 1996, the premium shall be equal to
23  the premium actually charged in Fiscal Year 1995; in
24  subsequent years, the premium shall never be lower than
25  the premium charged in Fiscal Year 1995.
26  For Fiscal Year 2003, the premium shall not exceed

 

 

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1  110% of the premium actually charged in Fiscal Year 2002.
2  For Fiscal Year 2004, the premium shall not exceed
3  112% of the premium actually charged in Fiscal Year 2003.
4  For Fiscal Year 2005, the premium shall not exceed a
5  weighted average of 106.6% of the premium actually charged
6  in Fiscal Year 2004.
7  For Fiscal Year 2006, the premium shall not exceed a
8  weighted average of 109.1% of the premium actually charged
9  in Fiscal Year 2005.
10  For Fiscal Year 2007, the premium shall not exceed a
11  weighted average of 103.9% of the premium actually charged
12  in Fiscal Year 2006.
13  For Fiscal Year 2008 and thereafter, the premium in
14  each fiscal year shall not exceed 105% of the premium
15  actually charged in the previous fiscal year.
16  Rates and premiums may be based in part on age and
17  eligibility for federal medicare coverage. However, the cost
18  of participation for a TRS dependent beneficiary who is an
19  unmarried child age 19 or over and mentally or physically
20  disabled shall not exceed the cost for a TRS dependent
21  beneficiary who is an unmarried child under age 19 and
22  participates in the same major medical or managed care
23  program.
24  The cost of health benefits under the program shall be
25  paid as follows:
26  (1) For a TRS benefit recipient selecting a managed

 

 

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1  care program, up to 75% of the total insurance rate shall
2  be paid from the Teacher Health Insurance Security Fund.
3  Effective with Fiscal Year 2007 and thereafter, for a TRS
4  benefit recipient selecting a managed care program, 75% of
5  the total insurance rate shall be paid from the Teacher
6  Health Insurance Security Fund.
7  (2) For a TRS benefit recipient selecting the major
8  medical coverage program, up to 50% of the total insurance
9  rate shall be paid from the Teacher Health Insurance
10  Security Fund if a managed care program is accessible, as
11  determined by the Teachers' Retirement System. Effective
12  with Fiscal Year 2007 and thereafter, for a TRS benefit
13  recipient selecting the major medical coverage program,
14  50% of the total insurance rate shall be paid from the
15  Teacher Health Insurance Security Fund if a managed care
16  program is accessible, as determined by the Department of
17  Central Management Services.
18  (3) For a TRS benefit recipient selecting the major
19  medical coverage program, up to 75% of the total insurance
20  rate shall be paid from the Teacher Health Insurance
21  Security Fund if a managed care program is not accessible,
22  as determined by the Teachers' Retirement System.
23  Effective with Fiscal Year 2007 and thereafter, for a TRS
24  benefit recipient selecting the major medical coverage
25  program, 75% of the total insurance rate shall be paid
26  from the Teacher Health Insurance Security Fund if a

 

 

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1  managed care program is not accessible, as determined by
2  the Department of Central Management Services.
3  (3.1) For a TRS dependent beneficiary who is Medicare
4  primary and enrolled in a managed care plan, or the major
5  medical coverage program if a managed care plan is not
6  available, 25% of the total insurance rate shall be paid
7  from the Teacher Health Security Fund as determined by the
8  Department of Central Management Services. For the purpose
9  of this item (3.1), the term "TRS dependent beneficiary
10  who is Medicare primary" means a TRS dependent beneficiary
11  who is participating in Medicare Parts A and B.
12  (4) Except as otherwise provided in item (3.1), the
13  balance of the rate of insurance, including the entire
14  premium of any coverage for TRS dependent beneficiaries
15  that has been elected, shall be paid by deductions
16  authorized by the TRS benefit recipient to be withheld
17  from his or her monthly annuity or benefit payment from
18  the Teachers' Retirement System; except that (i) if the
19  balance of the cost of coverage exceeds the amount of the
20  monthly annuity or benefit payment, the difference shall
21  be paid directly to the Teachers' Retirement System by the
22  TRS benefit recipient, and (ii) all or part of the balance
23  of the cost of coverage may, at the school board's option,
24  be paid to the Teachers' Retirement System by the school
25  board of the school district from which the TRS benefit
26  recipient retired, in accordance with Section 10-22.3b of

 

 

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1  the School Code. The Teachers' Retirement System shall
2  promptly deposit all moneys withheld by or paid to it
3  under this subdivision (e)(4) into the Teacher Health
4  Insurance Security Fund. These moneys shall not be
5  considered assets of the Retirement System.
6  (5) If, for any month beginning on or after January 1,
7  2013, a TRS benefit recipient or TRS dependent beneficiary
8  was enrolled in Medicare Parts A and B and such Medicare
9  coverage was primary to coverage under this Section but
10  payment for coverage under this Section was made at a rate
11  greater than the Medicare primary rate published by the
12  Department of Central Management Services, the TRS benefit
13  recipient or TRS dependent beneficiary shall be eligible
14  for a refund equal to the difference between the amount
15  paid by the TRS benefit recipient or TRS dependent
16  beneficiary and the published Medicare primary rate. To
17  receive a refund pursuant to this subsection, the TRS
18  benefit recipient or TRS dependent beneficiary must
19  provide documentation to the Department of Central
20  Management Services evidencing the TRS benefit recipient's
21  or TRS dependent beneficiary's Medicare coverage and the
22  amount paid by the TRS benefit recipient or TRS dependent
23  beneficiary during the applicable time period.
24  (f) Financing. Beginning July 1, 1995, all revenues
25  arising from the administration of the health benefit programs
26  established under Article 16 of the Illinois Pension Code or

 

 

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1  this Section shall be deposited into the Teacher Health
2  Insurance Security Fund, which is hereby created as a
3  nonappropriated trust fund to be held outside the State
4  Treasury, with the State Treasurer as custodian. Any interest
5  earned on moneys in the Teacher Health Insurance Security Fund
6  shall be deposited into the Fund.
7  Moneys in the Teacher Health Insurance Security Fund shall
8  be used only to pay the costs of the health benefit program
9  established under this Section, including associated
10  administrative costs, and the costs associated with the health
11  benefit program established under Article 16 of the Illinois
12  Pension Code, as authorized in this Section. Beginning July 1,
13  1995, the Department of Central Management Services may make
14  expenditures from the Teacher Health Insurance Security Fund
15  for those costs.
16  After other funds authorized for the payment of the costs
17  of the health benefit program established under Article 16 of
18  the Illinois Pension Code are exhausted and until January 1,
19  1996 (or such later date as may be agreed upon by the Director
20  of Central Management Services and the Secretary of the
21  Teachers' Retirement System), the Secretary of the Teachers'
22  Retirement System may make expenditures from the Teacher
23  Health Insurance Security Fund as necessary to pay up to 75% of
24  the cost of providing health coverage to eligible benefit
25  recipients (as defined in Sections 16-153.1 and 16-153.3 of
26  the Illinois Pension Code) who are enrolled in the Article 16

 

 

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1  health benefit program and to facilitate the transfer of
2  administration of the health benefit program to the Department
3  of Central Management Services.
4  The Department of Central Management Services, or any
5  successor agency designated to procure healthcare contracts
6  pursuant to this Act, is authorized to establish funds,
7  separate accounts provided by any bank or banks as defined by
8  the Illinois Banking Act, or separate accounts provided by any
9  savings and loan association or associations as defined by the
10  Illinois Savings and Loan Act of 1985 to be held by the
11  Director, outside the State treasury, for the purpose of
12  receiving the transfer of moneys from the Teacher Health
13  Insurance Security Fund. The Department may promulgate rules
14  further defining the methodology for the transfers. Any
15  interest earned by moneys in the funds or accounts shall inure
16  to the Teacher Health Insurance Security Fund. The transferred
17  moneys, and interest accrued thereon, shall be used
18  exclusively for transfers to administrative service
19  organizations or their financial institutions for payments of
20  claims to claimants and providers under the self-insurance
21  health plan. The transferred moneys, and interest accrued
22  thereon, shall not be used for any other purpose including,
23  but not limited to, reimbursement of administration fees due
24  the administrative service organization pursuant to its
25  contract or contracts with the Department.
26  (g) Contract for benefits. The Director shall by contract,

 

 

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1  self-insurance, or otherwise make available the program of
2  health benefits for TRS benefit recipients and their TRS
3  dependent beneficiaries that is provided for in this Section.
4  The contract or other arrangement for the provision of these
5  health benefits shall be on terms deemed by the Director to be
6  in the best interest of the State of Illinois and the TRS
7  benefit recipients based on, but not limited to, such criteria
8  as administrative cost, service capabilities of the carrier or
9  other contractor, and the costs of the benefits.
10  (g-5) Committee. A Teacher Retirement Insurance Program
11  Committee shall be established, to consist of 10 persons
12  appointed by the Governor.
13  The Committee shall convene at least 4 times each year,
14  and shall consider and make recommendations on issues
15  affecting the program of health benefits provided under this
16  Section. Recommendations of the Committee shall be based on a
17  consensus of the members of the Committee.
18  If the Teacher Health Insurance Security Fund experiences
19  a deficit balance based upon the contribution and subsidy
20  rates established in this Section and Section 6.6 for Fiscal
21  Year 2008 or thereafter, the Committee shall make
22  recommendations for adjustments to the funding sources
23  established under these Sections.
24  In addition, the Committee shall identify proposed
25  solutions to the funding shortfalls that are affecting the
26  Teacher Health Insurance Security Fund, and it shall report

 

 

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1  those solutions to the Governor and the General Assembly
2  within 6 months after August 15, 2011 (the effective date of
3  Public Act 97-386).
4  (h) Continuation of program. It is the intention of the
5  General Assembly that the program of health benefits provided
6  under this Section be maintained on an ongoing, affordable
7  basis.
8  The program of health benefits provided under this Section
9  may be amended by the State and is not intended to be a pension
10  or retirement benefit subject to protection under Article
11  XIII, Section 5 of the Illinois Constitution.
12  (i) Repeal. (Blank).
13  (j) At least 120 days prior to making any changes to the
14  benefits allowed under this Section the Department shall post
15  those changes on its website and shall submit the planned
16  changes to the Commission on Government Forecasting and
17  Accountability.
18  (Source: P.A. 101-483, eff. 1-1-20; 102-210, eff. 7-30-21.)
19  (5 ILCS 375/6.6)
20  Sec. 6.6. Contributions to the Teacher Health Insurance
21  Security Fund.
22  (a) Beginning July 1, 1995, all active contributors of the
23  Teachers' Retirement System (established under Article 16 of
24  the Illinois Pension Code) who are not employees of a
25  department as defined in Section 3 of this Act shall make

 

 

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1  contributions toward the cost of annuitant and survivor health
2  benefits. These contributions shall be at the following rates:
3  until January 1, 2002, 0.5% of salary; beginning January 1,
4  2002, 0.65% of salary; beginning July 1, 2003, 0.75% of
5  salary; beginning July 1, 2005, 0.80% of salary; beginning
6  July 1, 2007, a percentage of salary to be determined by the
7  Department of Central Management Services by rule, which in
8  each fiscal year shall not exceed 105% of the percentage of
9  salary actually required to be paid in the previous fiscal
10  year.
11  These contributions shall be deducted by the employer and
12  paid to the System as service agent for the Department of
13  Central Management Services. The System may use the same
14  processes for collecting the contributions required by this
15  subsection that it uses to collect contributions received from
16  school districts and other covered employers under Sections
17  16-154 and 16-155 of the Illinois Pension Code.
18  An employer may agree to pick up or pay the contributions
19  required under this subsection on behalf of the teacher; such
20  contributions shall be deemed to have to have been paid by the
21  teacher. Beginning January 1, 2002, if the employer does not
22  directly pay the required member contribution, then the
23  employer shall reduce the member's salary by an amount equal
24  to the required contribution and shall then pay the
25  contribution on behalf of the member. This reduction shall not
26  change the amounts reported as creditable earnings to the

 

 

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1  Teachers' Retirement System.
2  A person who purchases optional service credit under
3  Article 16 of the Illinois Pension Code for a period after June
4  30, 1995 must also make a contribution under this subsection
5  for that optional credit, at the rate provided in subsection
6  (a), based on the salary used in computing the optional
7  service credit, plus interest on this employee contribution.
8  This contribution shall be collected by the System as service
9  agent for the Department of Central Management Services. The
10  contribution required under this subsection for the optional
11  service credit must be paid in full before any annuity based on
12  that credit begins.
13  (a-5) Beginning January 1, 2002, every employer of a
14  teacher (other than an employer that is a department as
15  defined in Section 3 of this Act) shall pay an employer
16  contribution toward the cost of annuitant and survivor health
17  benefits. These contributions shall be computed as follows:
18  (1) Beginning January 1, 2002 through June 30, 2003,
19  the employer contribution shall be equal to 0.4% of each
20  teacher's salary.
21  (2) Beginning July 1, 2003, the employer contribution
22  shall be equal to 0.5% of each teacher's salary.
23  (3) Beginning July 1, 2005, the employer contribution
24  shall be equal to 0.6% of each teacher's salary.
25  (4) Beginning July 1, 2007, the employer contribution
26  shall be a percentage of each teacher's salary to be

 

 

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1  determined by the Department of Central Management
2  Services by rule, which in each fiscal year shall not
3  exceed 105% of the percentage of each teacher's salary
4  actually required to be paid in the previous fiscal year.
5  These contributions shall be paid by the employer to the
6  System as service agent for the Department of Central
7  Management Services. The System may use the same processes for
8  collecting the contributions required by this subsection that
9  it uses to collect contributions received from school
10  districts and other covered employers under the Illinois
11  Pension Code.
12  The school district or other employing unit may pay these
13  employer contributions out of any source of funding available
14  for that purpose and shall forward the contributions to the
15  System on the schedule established for the payment of member
16  contributions.
17  (b) The Teachers' Retirement System shall promptly deposit
18  all moneys collected under subsections (a) and (a-5) of this
19  Section into the Teacher Health Insurance Security Fund
20  created in Section 6.5 of this Act. The moneys collected under
21  this Section shall be used only for the purposes authorized in
22  Section 6.5 of this Act and shall not be considered to be
23  assets of the Teachers' Retirement System. Contributions made
24  under this Section are not transferable to other pension funds
25  or retirement systems and are not refundable upon termination
26  of service.

 

 

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1  (c) On or before November 15 of each year, the Board of
2  Trustees of the Teachers' Retirement System shall certify to
3  the Governor, the Director of Central Management Services, and
4  the State Comptroller its estimate of the total amount of
5  contributions to be paid under subsection (a) of this Section
6  6.6 for the next fiscal year. The amount certified shall be
7  decreased or increased each year by the amount that the actual
8  active teacher contributions either fell short of or exceeded
9  the estimate used by the Board in making the certification for
10  the previous fiscal year. The certification shall include a
11  detailed explanation of the methods and information that the
12  Board relied upon in preparing its estimate. As soon as
13  possible after the effective date of this amendatory Act of
14  the 92nd General Assembly, the Board shall recalculate and
15  recertify its certifications for fiscal years 2002 and 2003.
16  (d) Beginning in fiscal year 1996, on the first day of each
17  month, or as soon thereafter as may be practical, the State
18  Treasurer and the State Comptroller shall transfer from the
19  General Revenue Fund to the Teacher Health Insurance Security
20  Fund 1/12 of the annual amount appropriated for that fiscal
21  year to the State Comptroller for deposit into the Teacher
22  Health Insurance Security Fund under Section 1.3 of the State
23  Pension Funds Continuing Appropriation Act.
24  (e) Except where otherwise specified in this Section, the
25  definitions that apply to Article 16 of the Illinois Pension
26  Code apply to this Section.

 

 

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1  (f) (Blank).
2  (g) At least 120 days prior to making any changes to the
3  funding under this Section the Department shall make those
4  changes available on its website and shall submit the planned
5  changes to the Commission on Government Forecasting and
6  Accountability.
7  (Source: P.A. 92-505, eff. 12-20-01; 93-679, eff. 6-30-04.)

 

 

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