Illinois Senate Bill SB1516 Introduced / Bill

                    103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1516 Introduced 2/8/2023, by Sen. Dan McConchie SYNOPSIS AS INTRODUCED:  5 ILCS 375/3 from Ch. 127, par. 523  5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160 40 ILCS 5/1-161 40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.4140 ILCS 5/14-152.140 ILCS 5/14-155.5 new 40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121  40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123  40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124  40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125   Amends the Illinois Pension Code. Requires the State Employees' Retirement System of Illinois to prepare and implement a defined contribution plan by July 1, 2025 that aggregates State and employee contributions in individual participant accounts that are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the defined contribution plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the defined contribution plan. Provides that a person who first becomes an employee after the effective date of the amendatory Act is not required to participate in the System as a condition of employment. Provides that an employee may elect not to participate in the System by notifying the System in writing in a manner specified by the System. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming and other changes. Makes related changes in the State Employees Group Insurance Act of 1971. Effective immediately.  LRB103 25722 RPS 52071 b   A BILL FOR 103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1516 Introduced 2/8/2023, by Sen. Dan McConchie SYNOPSIS AS INTRODUCED:  5 ILCS 375/3 from Ch. 127, par. 523  5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160 40 ILCS 5/1-161 40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.4140 ILCS 5/14-152.140 ILCS 5/14-155.5 new 40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121  40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123  40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124  40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125 5 ILCS 375/3 from Ch. 127, par. 523 5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160  40 ILCS 5/1-161  40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.41  40 ILCS 5/14-152.1  40 ILCS 5/14-155.5 new  40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121 40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123 40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124 40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125 Amends the Illinois Pension Code. Requires the State Employees' Retirement System of Illinois to prepare and implement a defined contribution plan by July 1, 2025 that aggregates State and employee contributions in individual participant accounts that are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the defined contribution plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the defined contribution plan. Provides that a person who first becomes an employee after the effective date of the amendatory Act is not required to participate in the System as a condition of employment. Provides that an employee may elect not to participate in the System by notifying the System in writing in a manner specified by the System. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming and other changes. Makes related changes in the State Employees Group Insurance Act of 1971. Effective immediately.  LRB103 25722 RPS 52071 b     LRB103 25722 RPS 52071 b   A BILL FOR
103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1516 Introduced 2/8/2023, by Sen. Dan McConchie SYNOPSIS AS INTRODUCED:
5 ILCS 375/3 from Ch. 127, par. 523  5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160 40 ILCS 5/1-161 40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.4140 ILCS 5/14-152.140 ILCS 5/14-155.5 new 40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121  40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123  40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124  40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125 5 ILCS 375/3 from Ch. 127, par. 523 5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160  40 ILCS 5/1-161  40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.41  40 ILCS 5/14-152.1  40 ILCS 5/14-155.5 new  40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121 40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123 40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124 40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125
5 ILCS 375/3 from Ch. 127, par. 523
5 ILCS 375/10 from Ch. 127, par. 530
40 ILCS 5/1-160
40 ILCS 5/1-161
40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05
40 ILCS 5/14-103.41
40 ILCS 5/14-152.1
40 ILCS 5/14-155.5 new
40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121
40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123
40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124
40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125
Amends the Illinois Pension Code. Requires the State Employees' Retirement System of Illinois to prepare and implement a defined contribution plan by July 1, 2025 that aggregates State and employee contributions in individual participant accounts that are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the defined contribution plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the defined contribution plan. Provides that a person who first becomes an employee after the effective date of the amendatory Act is not required to participate in the System as a condition of employment. Provides that an employee may elect not to participate in the System by notifying the System in writing in a manner specified by the System. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming and other changes. Makes related changes in the State Employees Group Insurance Act of 1971. Effective immediately.
LRB103 25722 RPS 52071 b     LRB103 25722 RPS 52071 b
    LRB103 25722 RPS 52071 b
A BILL FOR
SB1516LRB103 25722 RPS 52071 b   SB1516  LRB103 25722 RPS 52071 b
  SB1516  LRB103 25722 RPS 52071 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 State Employees Group Insurance Act of 1971
5  is amended by changing Sections 3 and 10 as follows:
6  (5 ILCS 375/3) (from Ch. 127, par. 523)
7  Sec. 3. Definitions. Unless the context otherwise
8  requires, the following words and phrases as used in this Act
9  shall have the following meanings. The Department may define
10  these and other words and phrases separately for the purpose
11  of implementing specific programs providing benefits under
12  this Act.
13  (a) "Administrative service organization" means any
14  person, firm or corporation experienced in the handling of
15  claims which is fully qualified, financially sound and capable
16  of meeting the service requirements of a contract of
17  administration executed with the Department.
18  (b) "Annuitant" means (1) an employee who retires, or has
19  retired, on or after January 1, 1966 on an immediate annuity
20  under the provisions of Article Articles 2, 14 (including an
21  employee who has elected to receive an alternative retirement
22  cancellation payment under Section 14-108.5 of the Illinois
23  Pension Code in lieu of an annuity; an employee who, in lieu of

 

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1516 Introduced 2/8/2023, by Sen. Dan McConchie SYNOPSIS AS INTRODUCED:
5 ILCS 375/3 from Ch. 127, par. 523  5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160 40 ILCS 5/1-161 40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.4140 ILCS 5/14-152.140 ILCS 5/14-155.5 new 40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121  40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123  40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124  40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125 5 ILCS 375/3 from Ch. 127, par. 523 5 ILCS 375/10 from Ch. 127, par. 530 40 ILCS 5/1-160  40 ILCS 5/1-161  40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05 40 ILCS 5/14-103.41  40 ILCS 5/14-152.1  40 ILCS 5/14-155.5 new  40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121 40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123 40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124 40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125
5 ILCS 375/3 from Ch. 127, par. 523
5 ILCS 375/10 from Ch. 127, par. 530
40 ILCS 5/1-160
40 ILCS 5/1-161
40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05
40 ILCS 5/14-103.41
40 ILCS 5/14-152.1
40 ILCS 5/14-155.5 new
40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121
40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123
40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124
40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125
Amends the Illinois Pension Code. Requires the State Employees' Retirement System of Illinois to prepare and implement a defined contribution plan by July 1, 2025 that aggregates State and employee contributions in individual participant accounts that are used for payouts after retirement. Provides that a Tier 1 or Tier 2 participant may irrevocably elect to participate in the defined contribution plan instead of the defined benefit plan and may also elect to terminate all participation in the defined benefit plan and to have a specified amount credited to his or her account under the defined contribution plan. Provides that a person who first becomes an employee after the effective date of the amendatory Act is not required to participate in the System as a condition of employment. Provides that an employee may elect not to participate in the System by notifying the System in writing in a manner specified by the System. Provides that any benefit increase that results from the amendatory Act is excluded from the definition of "new benefit increase". Makes conforming and other changes. Makes related changes in the State Employees Group Insurance Act of 1971. Effective immediately.
LRB103 25722 RPS 52071 b     LRB103 25722 RPS 52071 b
    LRB103 25722 RPS 52071 b
A BILL FOR

 

 

5 ILCS 375/3 from Ch. 127, par. 523
5 ILCS 375/10 from Ch. 127, par. 530
40 ILCS 5/1-160
40 ILCS 5/1-161
40 ILCS 5/14-103.05 from Ch. 108 1/2, par. 14-103.05
40 ILCS 5/14-103.41
40 ILCS 5/14-152.1
40 ILCS 5/14-155.5 new
40 ILCS 5/20-121 from Ch. 108 1/2, par. 20-121
40 ILCS 5/20-123 from Ch. 108 1/2, par. 20-123
40 ILCS 5/20-124 from Ch. 108 1/2, par. 20-124
40 ILCS 5/20-125 from Ch. 108 1/2, par. 20-125



    LRB103 25722 RPS 52071 b

 

 



 

  SB1516  LRB103 25722 RPS 52071 b


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1  receiving an annuity under that Article, has retired under the
2  defined contribution plan established under Section 14-155.5
3  of that Article; or an employee who meets the criteria for
4  retirement, but in lieu of receiving an annuity under that
5  Article has elected to receive an accelerated pension benefit
6  payment under Section 14-147.5 of that Article), or 15
7  (including an employee who has retired under the optional
8  retirement program established under Section 15-158.2 or who
9  meets the criteria for retirement but in lieu of receiving an
10  annuity under that Article has elected to receive an
11  accelerated pension benefit payment under Section 15-185.5 of
12  the Article), paragraph (2), (3), or (5) of Section 16-106
13  (including an employee who meets the criteria for retirement,
14  but in lieu of receiving an annuity under that Article has
15  elected to receive an accelerated pension benefit payment
16  under Section 16-190.5 of the Illinois Pension Code), or
17  Article 18 of the Illinois Pension Code; (2) any person who was
18  receiving group insurance coverage under this Act as of March
19  31, 1978 by reason of his status as an annuitant, even though
20  the annuity in relation to which such coverage was provided is
21  a proportional annuity based on less than the minimum period
22  of service required for a retirement annuity in the system
23  involved; (3) any person not otherwise covered by this Act who
24  has retired as a participating member under Article 2 of the
25  Illinois Pension Code but is ineligible for the retirement
26  annuity under Section 2-119 of the Illinois Pension Code; (4)

 

 

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1  the spouse of any person who is receiving a retirement annuity
2  under Article 18 of the Illinois Pension Code and who is
3  covered under a group health insurance program sponsored by a
4  governmental employer other than the State of Illinois and who
5  has irrevocably elected to waive his or her coverage under
6  this Act and to have his or her spouse considered as the
7  "annuitant" under this Act and not as a "dependent"; or (5) an
8  employee who retires, or has retired, from a qualified
9  position, as determined according to rules promulgated by the
10  Director, under a qualified local government, a qualified
11  rehabilitation facility, a qualified domestic violence shelter
12  or service, or a qualified child advocacy center. (For
13  definition of "retired employee", see (p) post).
14  (b-5) (Blank).
15  (b-6) (Blank).
16  (b-7) (Blank).
17  (c) "Carrier" means (1) an insurance company, a
18  corporation organized under the Limited Health Service
19  Organization Act or the Voluntary Health Services Plans Act, a
20  partnership, or other nongovernmental organization, which is
21  authorized to do group life or group health insurance business
22  in Illinois, or (2) the State of Illinois as a self-insurer.
23  (d) "Compensation" means salary or wages payable on a
24  regular payroll by the State Treasurer on a warrant of the
25  State Comptroller out of any State, trust or federal fund, or
26  by the Governor of the State through a disbursing officer of

 

 

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1  the State out of a trust or out of federal funds, or by any
2  Department out of State, trust, federal or other funds held by
3  the State Treasurer or the Department, to any person for
4  personal services currently performed, and ordinary or
5  accidental disability benefits under Articles 2, 14, or 15
6  (including ordinary or accidental disability benefits under
7  the optional retirement program established under Section
8  15-158.2), paragraph (2), (3), or (5) of Section 16-106, or
9  Article 18 of the Illinois Pension Code, for disability
10  incurred after January 1, 1966, or benefits payable under the
11  Workers' Compensation or Occupational Diseases Act or benefits
12  payable under a sick pay plan established in accordance with
13  Section 36 of the State Finance Act. "Compensation" also means
14  salary or wages paid to an employee of any qualified local
15  government, qualified rehabilitation facility, qualified
16  domestic violence shelter or service, or qualified child
17  advocacy center.
18  (e) "Commission" means the State Employees Group Insurance
19  Advisory Commission authorized by this Act. Commencing July 1,
20  1984, "Commission" as used in this Act means the Commission on
21  Government Forecasting and Accountability as established by
22  the Legislative Commission Reorganization Act of 1984.
23  (f) "Contributory", when referred to as contributory
24  coverage, shall mean optional coverages or benefits elected by
25  the member toward the cost of which such member makes
26  contribution, or which are funded in whole or in part through

 

 

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1  the acceptance of a reduction in earnings or the foregoing of
2  an increase in earnings by an employee, as distinguished from
3  noncontributory coverage or benefits which are paid entirely
4  by the State of Illinois without reduction of the member's
5  salary.
6  (g) "Department" means any department, institution, board,
7  commission, officer, court or any agency of the State
8  government receiving appropriations and having power to
9  certify payrolls to the Comptroller authorizing payments of
10  salary and wages against such appropriations as are made by
11  the General Assembly from any State fund, or against trust
12  funds held by the State Treasurer and includes boards of
13  trustees of the retirement systems created by Articles 2, 14,
14  15, 16, and 18 of the Illinois Pension Code. "Department" also
15  includes the Illinois Comprehensive Health Insurance Board,
16  the Board of Examiners established under the Illinois Public
17  Accounting Act, and the Illinois Finance Authority.
18  (h) "Dependent", when the term is used in the context of
19  the health and life plan, means a member's spouse and any child
20  (1) from birth to age 26 including an adopted child, a child
21  who lives with the member from the time of the placement for
22  adoption until entry of an order of adoption, a stepchild or
23  adjudicated child, or a child who lives with the member if such
24  member is a court appointed guardian of the child or (2) age 19
25  or over who has a mental or physical disability from a cause
26  originating prior to the age of 19 (age 26 if enrolled as an

 

 

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1  adult child dependent). For the health plan only, the term
2  "dependent" also includes (1) any person enrolled prior to the
3  effective date of this Section who is dependent upon the
4  member to the extent that the member may claim such person as a
5  dependent for income tax deduction purposes and (2) any person
6  who has received after June 30, 2000 an organ transplant and
7  who is financially dependent upon the member and eligible to
8  be claimed as a dependent for income tax purposes. A member
9  requesting to cover any dependent must provide documentation
10  as requested by the Department of Central Management Services
11  and file with the Department any and all forms required by the
12  Department.
13  (i) "Director" means the Director of the Illinois
14  Department of Central Management Services.
15  (j) "Eligibility period" means the period of time a member
16  has to elect enrollment in programs or to select benefits
17  without regard to age, sex or health.
18  (k) "Employee" means and includes each officer or employee
19  in the service of a department who (1) receives his
20  compensation for service rendered to the department on a
21  warrant issued pursuant to a payroll certified by a department
22  or on a warrant or check issued and drawn by a department upon
23  a trust, federal or other fund or on a warrant issued pursuant
24  to a payroll certified by an elected or duly appointed officer
25  of the State or who receives payment of the performance of
26  personal services on a warrant issued pursuant to a payroll

 

 

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1  certified by a Department and drawn by the Comptroller upon
2  the State Treasurer against appropriations made by the General
3  Assembly from any fund or against trust funds held by the State
4  Treasurer, and (2) is employed full-time or part-time in a
5  position normally requiring actual performance of duty during
6  not less than 1/2 of a normal work period, as established by
7  the Director in cooperation with each department, except that
8  persons elected by popular vote will be considered employees
9  during the entire term for which they are elected regardless
10  of hours devoted to the service of the State, and (3) except
11  that "employee" does not include any person who is not
12  eligible by reason of such person's employment to participate
13  in one of the State retirement systems under Articles 2, 14, 15
14  (either the regular Article 15 system or the optional
15  retirement program established under Section 15-158.2), or 18,
16  or under paragraph (2), (3), or (5) of Section 16-106, of the
17  Illinois Pension Code, but such term does include persons who
18  are employed during the 6-month qualifying period under
19  Article 14 of the Illinois Pension Code. Such term also
20  includes any person who (1) after January 1, 1966, is
21  receiving ordinary or accidental disability benefits under
22  Articles 2, 14, or 15 (including ordinary or accidental
23  disability benefits under the optional retirement program
24  established under Section 15-158.2), paragraph (2), (3), or
25  (5) of Section 16-106, or Article 18 of the Illinois Pension
26  Code, for disability incurred after January 1, 1966, (2)

 

 

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1  receives total permanent or total temporary disability under
2  the Workers' Compensation Act or Occupational Disease Act as a
3  result of injuries sustained or illness contracted in the
4  course of employment with the State of Illinois, or (3) is not
5  otherwise covered under this Act and has retired as a
6  participating member under Article 2 of the Illinois Pension
7  Code but is ineligible for the retirement annuity under
8  Section 2-119 of the Illinois Pension Code. However, a person
9  who satisfies the criteria of the foregoing definition of
10  "employee" except that such person is made ineligible to
11  participate in the State Universities Retirement System by
12  clause (4) of subsection (a) of Section 15-107 of the Illinois
13  Pension Code is also an "employee" for the purposes of this
14  Act. "Employee" also includes any person receiving or eligible
15  for benefits under a sick pay plan established in accordance
16  with Section 36 of the State Finance Act. "Employee" also
17  includes (i) each officer or employee in the service of a
18  qualified local government, including persons appointed as
19  trustees of sanitary districts regardless of hours devoted to
20  the service of the sanitary district, (ii) each employee in
21  the service of a qualified rehabilitation facility, (iii) each
22  full-time employee in the service of a qualified domestic
23  violence shelter or service, and (iv) each full-time employee
24  in the service of a qualified child advocacy center, as
25  determined according to rules promulgated by the Director.
26  (l) "Member" means an employee, annuitant, retired

 

 

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1  employee, or survivor. In the case of an annuitant or retired
2  employee who first becomes an annuitant or retired employee on
3  or after January 13, 2012 (the effective date of Public Act
4  97-668), the individual must meet the minimum vesting
5  requirements of the applicable retirement system in order to
6  be eligible for group insurance benefits under that system. In
7  the case of a survivor who is not entitled to occupational
8  death benefits pursuant to an applicable retirement system or
9  death benefits pursuant to the Illinois Workers' Compensation
10  Act, and who first becomes a survivor on or after January 13,
11  2012 (the effective date of Public Act 97-668), the deceased
12  employee, annuitant, or retired employee upon whom the annuity
13  is based must have been eligible to participate in the group
14  insurance system under the applicable retirement system in
15  order for the survivor to be eligible for group insurance
16  benefits under that system.
17  In the case of a survivor who is entitled to occupational
18  death benefits pursuant to the deceased employee's applicable
19  retirement system or death benefits pursuant to the Illinois
20  Workers' Compensation Act, and first becomes a survivor on or
21  after January 1, 2022, the survivor is eligible for group
22  health insurance benefits regardless of the deceased
23  employee's minimum vesting requirements under the applicable
24  retirement system, with a State contribution rate of 100%,
25  until an unmarried child dependent reaches the age of 18, or
26  the age of 22 if the dependent child is a full-time student, or

 

 

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1  until the adult survivor becomes eligible for benefits under
2  the federal Medicare health insurance program (Title XVIII of
3  the Social Security Act, as added by Public Law 89-97). In the
4  case of a survivor currently receiving occupational death
5  benefits pursuant to the deceased employee's applicable
6  retirement system or has received death benefits pursuant to
7  the Illinois Workers' Compensation Act, who first became a
8  survivor prior to January 1, 2022, the survivor is eligible
9  for group health insurance benefits regardless of the deceased
10  employee's minimum vesting requirements under the applicable
11  retirement system, with a State contribution rate of 100%,
12  until an unmarried child dependent reaches the age of 18, or
13  the age of 22 if the dependent child is a full-time student, or
14  until the adult survivor becomes eligible for benefits under
15  the federal Medicare health insurance program (Title XVIII of
16  the Social Security Act, as added by Public Law 89-97). The
17  changes made by this amendatory Act of the 102nd General
18  Assembly with respect to survivors who first became survivors
19  prior to January 1, 2022 shall apply upon request of the
20  survivor on or after the effective date of this amendatory Act
21  of the 102nd General Assembly.
22  (m) "Optional coverages or benefits" means those coverages
23  or benefits available to the member on his or her voluntary
24  election, and at his or her own expense.
25  (n) "Program" means the group life insurance, health
26  benefits and other employee benefits designed and contracted

 

 

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1  for by the Director under this Act.
2  (o) "Health plan" means a health benefits program offered
3  by the State of Illinois for persons eligible for the plan.
4  (p) "Retired employee" means any person who would be an
5  annuitant as that term is defined herein but for the fact that
6  such person retired prior to January 1, 1966. Such term also
7  includes any person formerly employed by the University of
8  Illinois in the Cooperative Extension Service who would be an
9  annuitant but for the fact that such person was made
10  ineligible to participate in the State Universities Retirement
11  System by clause (4) of subsection (a) of Section 15-107 of the
12  Illinois Pension Code.
13  (q) "Survivor" means a person receiving an annuity as a
14  survivor of an employee or of an annuitant. "Survivor" also
15  includes: (1) the surviving dependent of a person who
16  satisfies the definition of "employee" except that such person
17  is made ineligible to participate in the State Universities
18  Retirement System by clause (4) of subsection (a) of Section
19  15-107 of the Illinois Pension Code; (2) the surviving
20  dependent of any person formerly employed by the University of
21  Illinois in the Cooperative Extension Service who would be an
22  annuitant except for the fact that such person was made
23  ineligible to participate in the State Universities Retirement
24  System by clause (4) of subsection (a) of Section 15-107 of the
25  Illinois Pension Code; (3) the surviving dependent of a person
26  who was an annuitant under this Act by virtue of receiving an

 

 

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1  alternative retirement cancellation payment under Section
2  14-108.5 of the Illinois Pension Code; and (4) a person who
3  would be receiving an annuity as a survivor of an annuitant
4  except that the annuitant elected on or after June 4, 2018 to
5  receive an accelerated pension benefit payment under Section
6  14-147.5, 15-185.5, or 16-190.5 of the Illinois Pension Code
7  in lieu of receiving an annuity.
8  (q-2) "SERS" means the State Employees' Retirement System
9  of Illinois, created under Article 14 of the Illinois Pension
10  Code.
11  (q-3) "SURS" means the State Universities Retirement
12  System, created under Article 15 of the Illinois Pension Code.
13  (q-4) "TRS" means the Teachers' Retirement System of the
14  State of Illinois, created under Article 16 of the Illinois
15  Pension Code.
16  (q-5) (Blank).
17  (q-6) (Blank).
18  (q-7) (Blank).
19  (r) "Medical services" means the services provided within
20  the scope of their licenses by practitioners in all categories
21  licensed under the Medical Practice Act of 1987.
22  (s) "Unit of local government" means any county,
23  municipality, township, school district (including a
24  combination of school districts under the Intergovernmental
25  Cooperation Act), special district or other unit, designated
26  as a unit of local government by law, which exercises limited

 

 

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1  governmental powers or powers in respect to limited
2  governmental subjects, any not-for-profit association with a
3  membership that primarily includes townships and township
4  officials, that has duties that include provision of research
5  service, dissemination of information, and other acts for the
6  purpose of improving township government, and that is funded
7  wholly or partly in accordance with Section 85-15 of the
8  Township Code; any not-for-profit corporation or association,
9  with a membership consisting primarily of municipalities, that
10  operates its own utility system, and provides research,
11  training, dissemination of information, or other acts to
12  promote cooperation between and among municipalities that
13  provide utility services and for the advancement of the goals
14  and purposes of its membership; the Southern Illinois
15  Collegiate Common Market, which is a consortium of higher
16  education institutions in Southern Illinois; the Illinois
17  Association of Park Districts; and any hospital provider that
18  is owned by a county that has 100 or fewer hospital beds and
19  has not already joined the program. "Qualified local
20  government" means a unit of local government approved by the
21  Director and participating in a program created under
22  subsection (i) of Section 10 of this Act.
23  (t) "Qualified rehabilitation facility" means any
24  not-for-profit organization that is accredited by the
25  Commission on Accreditation of Rehabilitation Facilities or
26  certified by the Department of Human Services (as successor to

 

 

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1  the Department of Mental Health and Developmental
2  Disabilities) to provide services to persons with disabilities
3  and which receives funds from the State of Illinois for
4  providing those services, approved by the Director and
5  participating in a program created under subsection (j) of
6  Section 10 of this Act.
7  (u) "Qualified domestic violence shelter or service" means
8  any Illinois domestic violence shelter or service and its
9  administrative offices funded by the Department of Human
10  Services (as successor to the Illinois Department of Public
11  Aid), approved by the Director and participating in a program
12  created under subsection (k) of Section 10.
13  (v) "TRS benefit recipient" means a person who:
14  (1) is not a "member" as defined in this Section; and
15  (2) is receiving a monthly benefit or retirement
16  annuity under Article 16 of the Illinois Pension Code or
17  would be receiving such monthly benefit or retirement
18  annuity except that the benefit recipient elected on or
19  after June 4, 2018 to receive an accelerated pension
20  benefit payment under Section 16-190.5 of the Illinois
21  Pension Code in lieu of receiving an annuity; and
22  (3) either (i) has at least 8 years of creditable
23  service under Article 16 of the Illinois Pension Code, or
24  (ii) was enrolled in the health insurance program offered
25  under that Article on January 1, 1996, or (iii) is the
26  survivor of a benefit recipient who had at least 8 years of

 

 

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1  creditable service under Article 16 of the Illinois
2  Pension Code or was enrolled in the health insurance
3  program offered under that Article on June 21, 1995 (the
4  effective date of Public Act 89-25), or (iv) is a
5  recipient or survivor of a recipient of a disability
6  benefit under Article 16 of the Illinois Pension Code.
7  (w) "TRS dependent beneficiary" means a person who:
8  (1) is not a "member" or "dependent" as defined in
9  this Section; and
10  (2) is a TRS benefit recipient's: (A) spouse, (B)
11  dependent parent who is receiving at least half of his or
12  her support from the TRS benefit recipient, or (C)
13  natural, step, adjudicated, or adopted child who is (i)
14  under age 26, (ii) was, on January 1, 1996, participating
15  as a dependent beneficiary in the health insurance program
16  offered under Article 16 of the Illinois Pension Code, or
17  (iii) age 19 or over who has a mental or physical
18  disability from a cause originating prior to the age of 19
19  (age 26 if enrolled as an adult child).
20  "TRS dependent beneficiary" does not include, as indicated
21  under paragraph (2) of this subsection (w), a dependent of the
22  survivor of a TRS benefit recipient who first becomes a
23  dependent of a survivor of a TRS benefit recipient on or after
24  January 13, 2012 (the effective date of Public Act 97-668)
25  unless that dependent would have been eligible for coverage as
26  a dependent of the deceased TRS benefit recipient upon whom

 

 

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1  the survivor benefit is based.
2  (x) "Military leave" refers to individuals in basic
3  training for reserves, special/advanced training, annual
4  training, emergency call up, activation by the President of
5  the United States, or any other training or duty in service to
6  the United States Armed Forces.
7  (y) (Blank).
8  (z) "Community college benefit recipient" means a person
9  who:
10  (1) is not a "member" as defined in this Section; and
11  (2) is receiving a monthly survivor's annuity or
12  retirement annuity under Article 15 of the Illinois
13  Pension Code or would be receiving such monthly survivor's
14  annuity or retirement annuity except that the benefit
15  recipient elected on or after June 4, 2018 to receive an
16  accelerated pension benefit payment under Section 15-185.5
17  of the Illinois Pension Code in lieu of receiving an
18  annuity; and
19  (3) either (i) was a full-time employee of a community
20  college district or an association of community college
21  boards created under the Public Community College Act
22  (other than an employee whose last employer under Article
23  15 of the Illinois Pension Code was a community college
24  district subject to Article VII of the Public Community
25  College Act) and was eligible to participate in a group
26  health benefit plan as an employee during the time of

 

 

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1  employment with a community college district (other than a
2  community college district subject to Article VII of the
3  Public Community College Act) or an association of
4  community college boards, or (ii) is the survivor of a
5  person described in item (i).
6  (aa) "Community college dependent beneficiary" means a
7  person who:
8  (1) is not a "member" or "dependent" as defined in
9  this Section; and
10  (2) is a community college benefit recipient's: (A)
11  spouse, (B) dependent parent who is receiving at least
12  half of his or her support from the community college
13  benefit recipient, or (C) natural, step, adjudicated, or
14  adopted child who is (i) under age 26, or (ii) age 19 or
15  over and has a mental or physical disability from a cause
16  originating prior to the age of 19 (age 26 if enrolled as
17  an adult child).
18  "Community college dependent beneficiary" does not
19  include, as indicated under paragraph (2) of this subsection
20  (aa), a dependent of the survivor of a community college
21  benefit recipient who first becomes a dependent of a survivor
22  of a community college benefit recipient on or after January
23  13, 2012 (the effective date of Public Act 97-668) unless that
24  dependent would have been eligible for coverage as a dependent
25  of the deceased community college benefit recipient upon whom
26  the survivor annuity is based.

 

 

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1  (bb) "Qualified child advocacy center" means any Illinois
2  child advocacy center and its administrative offices funded by
3  the Department of Children and Family Services, as defined by
4  the Children's Advocacy Center Act (55 ILCS 80/), approved by
5  the Director and participating in a program created under
6  subsection (n) of Section 10.
7  (cc) "Placement for adoption" means the assumption and
8  retention by a member of a legal obligation for total or
9  partial support of a child in anticipation of adoption of the
10  child. The child's placement with the member terminates upon
11  the termination of such legal obligation.
12  (Source: P.A. 101-242, eff. 8-9-19; 102-558, eff. 8-20-21;
13  102-714, eff. 4-29-22; 102-813, eff 5-13-22.)
14  (5 ILCS 375/10) (from Ch. 127, par. 530)
15  Sec. 10. Contributions by the State and members.
16  (a) The State shall pay the cost of basic non-contributory
17  group life insurance and, subject to member paid contributions
18  set by the Department or required by this Section and except as
19  provided in this Section, the basic program of group health
20  benefits on each eligible member, except a member, not
21  otherwise covered by this Act, who has retired as a
22  participating member under Article 2 of the Illinois Pension
23  Code but is ineligible for the retirement annuity under
24  Section 2-119 of the Illinois Pension Code, and part of each
25  eligible member's and retired member's premiums for health

 

 

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1  insurance coverage for enrolled dependents as provided by
2  Section 9. The State shall pay the cost of the basic program of
3  group health benefits only after benefits are reduced by the
4  amount of benefits covered by Medicare for all members and
5  dependents who are eligible for benefits under Social Security
6  or the Railroad Retirement system or who had sufficient
7  Medicare-covered government employment, except that such
8  reduction in benefits shall apply only to those members and
9  dependents who (1) first become eligible for such Medicare
10  coverage on or after July 1, 1992; or (2) are
11  Medicare-eligible members or dependents of a local government
12  unit which began participation in the program on or after July
13  1, 1992; or (3) remain eligible for, but no longer receive
14  Medicare coverage which they had been receiving on or after
15  July 1, 1992. The Department may determine the aggregate level
16  of the State's contribution on the basis of actual cost of
17  medical services adjusted for age, sex or geographic or other
18  demographic characteristics which affect the costs of such
19  programs.
20  The cost of participation in the basic program of group
21  health benefits for the dependent or survivor of a living or
22  deceased retired employee who was formerly employed by the
23  University of Illinois in the Cooperative Extension Service
24  and would be an annuitant but for the fact that he or she was
25  made ineligible to participate in the State Universities
26  Retirement System by clause (4) of subsection (a) of Section

 

 

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1  15-107 of the Illinois Pension Code shall not be greater than
2  the cost of participation that would otherwise apply to that
3  dependent or survivor if he or she were the dependent or
4  survivor of an annuitant under the State Universities
5  Retirement System.
6  (a-1) (Blank).
7  (a-2) (Blank).
8  (a-3) (Blank).
9  (a-4) (Blank).
10  (a-5) (Blank).
11  (a-6) (Blank).
12  (a-7) (Blank).
13  (a-8) Any annuitant, survivor, or retired employee may
14  waive or terminate coverage in the program of group health
15  benefits. Any such annuitant, survivor, or retired employee
16  who has waived or terminated coverage may enroll or re-enroll
17  in the program of group health benefits only during the annual
18  benefit choice period, as determined by the Director; except
19  that in the event of termination of coverage due to nonpayment
20  of premiums, the annuitant, survivor, or retired employee may
21  not re-enroll in the program.
22  (a-8.5) Beginning on the effective date of this amendatory
23  Act of the 97th General Assembly, the Director of Central
24  Management Services shall, on an annual basis, determine the
25  amount that the State shall contribute toward the basic
26  program of group health benefits on behalf of annuitants

 

 

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1  (including individuals who (i) participated in the General
2  Assembly Retirement System, the State Employees' Retirement
3  System of Illinois, the State Universities Retirement System,
4  the Teachers' Retirement System of the State of Illinois, or
5  the Judges Retirement System of Illinois and (ii) qualify as
6  annuitants under subsection (b) of Section 3 of this Act),
7  survivors (including individuals who (i) receive an annuity as
8  a survivor of an individual who participated in the General
9  Assembly Retirement System, the State Employees' Retirement
10  System of Illinois, the State Universities Retirement System,
11  the Teachers' Retirement System of the State of Illinois, or
12  the Judges Retirement System of Illinois and (ii) qualify as
13  survivors under subsection (q) of Section 3 of this Act), and
14  retired employees (as defined in subsection (p) of Section 3
15  of this Act). The remainder of the cost of coverage for each
16  annuitant, survivor, or retired employee, as determined by the
17  Director of Central Management Services, shall be the
18  responsibility of that annuitant, survivor, or retired
19  employee.
20  Contributions required of annuitants, survivors, and
21  retired employees shall be the same for all retirement systems
22  and shall also be based on whether an individual has made an
23  election under Section 15-135.1 of the Illinois Pension Code.
24  Contributions may be based on annuitants', survivors', or
25  retired employees' Medicare eligibility, but may not be based
26  on Social Security eligibility.

 

 

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1  (a-9) No later than May 1 of each calendar year, the
2  Director of Central Management Services shall certify in
3  writing to the Executive Secretary of the State Employees'
4  Retirement System of Illinois the amounts of the Medicare
5  supplement health care premiums and the amounts of the health
6  care premiums for all other retirees who are not Medicare
7  eligible.
8  A separate calculation of the premiums based upon the
9  actual cost of each health care plan shall be so certified.
10  The Director of Central Management Services shall provide
11  to the Executive Secretary of the State Employees' Retirement
12  System of Illinois such information, statistics, and other
13  data as he or she may require to review the premium amounts
14  certified by the Director of Central Management Services.
15  The Department of Central Management Services, or any
16  successor agency designated to procure healthcare contracts
17  pursuant to this Act, is authorized to establish funds,
18  separate accounts provided by any bank or banks as defined by
19  the Illinois Banking Act, or separate accounts provided by any
20  savings and loan association or associations as defined by the
21  Illinois Savings and Loan Act of 1985 to be held by the
22  Director, outside the State treasury, for the purpose of
23  receiving the transfer of moneys from the Local Government
24  Health Insurance Reserve Fund. The Department may promulgate
25  rules further defining the methodology for the transfers. Any
26  interest earned by moneys in the funds or accounts shall inure

 

 

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1  to the Local Government Health Insurance Reserve Fund. The
2  transferred moneys, and interest accrued thereon, shall be
3  used exclusively for transfers to administrative service
4  organizations or their financial institutions for payments of
5  claims to claimants and providers under the self-insurance
6  health plan. The transferred moneys, and interest accrued
7  thereon, shall not be used for any other purpose including,
8  but not limited to, reimbursement of administration fees due
9  the administrative service organization pursuant to its
10  contract or contracts with the Department.
11  (a-10) To the extent that participation, benefits, or
12  premiums under this Act are based on a person's service credit
13  under an Article of the Illinois Pension Code, service credit
14  terminated in exchange for an accelerated pension benefit
15  payment under Section 14-147.5, 15-185.5, or 16-190.5 of that
16  Code shall be included in determining a person's service
17  credit for the purposes of this Act.
18  (a-15) For purposes of determining State contributions
19  under this Section, service established under a defined
20  contribution plan under Section 14-155.5 of the Illinois
21  Pension Code shall be included in determining an employee's
22  creditable service. Any credit terminated as part of a
23  transfer of contributions to a defined contribution plan under
24  Section 14-155.5 of the Illinois Pension Code shall also be
25  included in determining an employee's creditable service.
26  (b) State employees who become eligible for this program

 

 

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1  on or after January 1, 1980 in positions normally requiring
2  actual performance of duty not less than 1/2 of a normal work
3  period but not equal to that of a normal work period, shall be
4  given the option of participating in the available program. If
5  the employee elects coverage, the State shall contribute on
6  behalf of such employee to the cost of the employee's benefit
7  and any applicable dependent supplement, that sum which bears
8  the same percentage as that percentage of time the employee
9  regularly works when compared to normal work period.
10  (c) The basic non-contributory coverage from the basic
11  program of group health benefits shall be continued for each
12  employee not in pay status or on active service by reason of
13  (1) leave of absence due to illness or injury, (2) authorized
14  educational leave of absence or sabbatical leave, or (3)
15  military leave. This coverage shall continue until expiration
16  of authorized leave and return to active service, but not to
17  exceed 24 months for leaves under item (1) or (2). This
18  24-month limitation and the requirement of returning to active
19  service shall not apply to persons receiving ordinary or
20  accidental disability benefits or retirement benefits through
21  the appropriate State retirement system or benefits under the
22  Workers' Compensation or Occupational Disease Act.
23  (d) The basic group life insurance coverage shall
24  continue, with full State contribution, where such person is
25  (1) absent from active service by reason of disability arising
26  from any cause other than self-inflicted, (2) on authorized

 

 

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1  educational leave of absence or sabbatical leave, or (3) on
2  military leave.
3  (e) Where the person is in non-pay status for a period in
4  excess of 30 days or on leave of absence, other than by reason
5  of disability, educational or sabbatical leave, or military
6  leave, such person may continue coverage only by making
7  personal payment equal to the amount normally contributed by
8  the State on such person's behalf. Such payments and coverage
9  may be continued: (1) until such time as the person returns to
10  a status eligible for coverage at State expense, but not to
11  exceed 24 months or (2) until such person's employment or
12  annuitant status with the State is terminated (exclusive of
13  any additional service imposed pursuant to law).
14  (f) The Department shall establish by rule the extent to
15  which other employee benefits will continue for persons in
16  non-pay status or who are not in active service.
17  (g) The State shall not pay the cost of the basic
18  non-contributory group life insurance, program of health
19  benefits and other employee benefits for members who are
20  survivors as defined by paragraphs (1) and (2) of subsection
21  (q) of Section 3 of this Act. The costs of benefits for these
22  survivors shall be paid by the survivors or by the University
23  of Illinois Cooperative Extension Service, or any combination
24  thereof. However, the State shall pay the amount of the
25  reduction in the cost of participation, if any, resulting from
26  the amendment to subsection (a) made by this amendatory Act of

 

 

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1  the 91st General Assembly.
2  (h) Those persons occupying positions with any department
3  as a result of emergency appointments pursuant to Section 8b.8
4  of the Personnel Code who are not considered employees under
5  this Act shall be given the option of participating in the
6  programs of group life insurance, health benefits and other
7  employee benefits. Such persons electing coverage may
8  participate only by making payment equal to the amount
9  normally contributed by the State for similarly situated
10  employees. Such amounts shall be determined by the Director.
11  Such payments and coverage may be continued until such time as
12  the person becomes an employee pursuant to this Act or such
13  person's appointment is terminated.
14  (i) Any unit of local government within the State of
15  Illinois may apply to the Director to have its employees,
16  annuitants, and their dependents provided group health
17  coverage under this Act on a non-insured basis. To
18  participate, a unit of local government must agree to enroll
19  all of its employees, who may select coverage under any group
20  health benefits plan made available by the Department under
21  the health benefits program established under this Section or
22  a health maintenance organization that has contracted with the
23  State to be available as a health care provider for employees
24  as defined in this Act. A unit of local government must remit
25  the entire cost of providing coverage under the health
26  benefits program established under this Section or, for

 

 

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1  coverage under a health maintenance organization, an amount
2  determined by the Director based on an analysis of the sex,
3  age, geographic location, or other relevant demographic
4  variables for its employees, except that the unit of local
5  government shall not be required to enroll those of its
6  employees who are covered spouses or dependents under the
7  State group health benefits plan or another group policy or
8  plan providing health benefits as long as (1) an appropriate
9  official from the unit of local government attests that each
10  employee not enrolled is a covered spouse or dependent under
11  this plan or another group policy or plan, and (2) at least 50%
12  of the employees are enrolled and the unit of local government
13  remits the entire cost of providing coverage to those
14  employees, except that a participating school district must
15  have enrolled at least 50% of its full-time employees who have
16  not waived coverage under the district's group health plan by
17  participating in a component of the district's cafeteria plan.
18  A participating school district is not required to enroll a
19  full-time employee who has waived coverage under the
20  district's health plan, provided that an appropriate official
21  from the participating school district attests that the
22  full-time employee has waived coverage by participating in a
23  component of the district's cafeteria plan. For the purposes
24  of this subsection, "participating school district" includes a
25  unit of local government whose primary purpose is education as
26  defined by the Department's rules.

 

 

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1  Employees of a participating unit of local government who
2  are not enrolled due to coverage under another group health
3  policy or plan may enroll in the event of a qualifying change
4  in status, special enrollment, special circumstance as defined
5  by the Director, or during the annual Benefit Choice Period. A
6  participating unit of local government may also elect to cover
7  its annuitants. Dependent coverage shall be offered on an
8  optional basis, with the costs paid by the unit of local
9  government, its employees, or some combination of the two as
10  determined by the unit of local government. The unit of local
11  government shall be responsible for timely collection and
12  transmission of dependent premiums.
13  The Director shall annually determine monthly rates of
14  payment, subject to the following constraints:
15  (1) In the first year of coverage, the rates shall be
16  equal to the amount normally charged to State employees
17  for elected optional coverages or for enrolled dependents
18  coverages or other contributory coverages, or contributed
19  by the State for basic insurance coverages on behalf of
20  its employees, adjusted for differences between State
21  employees and employees of the local government in age,
22  sex, geographic location or other relevant demographic
23  variables, plus an amount sufficient to pay for the
24  additional administrative costs of providing coverage to
25  employees of the unit of local government and their
26  dependents.

 

 

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1  (2) In subsequent years, a further adjustment shall be
2  made to reflect the actual prior years' claims experience
3  of the employees of the unit of local government.
4  In the case of coverage of local government employees
5  under a health maintenance organization, the Director shall
6  annually determine for each participating unit of local
7  government the maximum monthly amount the unit may contribute
8  toward that coverage, based on an analysis of (i) the age, sex,
9  geographic location, and other relevant demographic variables
10  of the unit's employees and (ii) the cost to cover those
11  employees under the State group health benefits plan. The
12  Director may similarly determine the maximum monthly amount
13  each unit of local government may contribute toward coverage
14  of its employees' dependents under a health maintenance
15  organization.
16  Monthly payments by the unit of local government or its
17  employees for group health benefits plan or health maintenance
18  organization coverage shall be deposited in the Local
19  Government Health Insurance Reserve Fund.
20  The Local Government Health Insurance Reserve Fund is
21  hereby created as a nonappropriated trust fund to be held
22  outside the State Treasury, with the State Treasurer as
23  custodian. The Local Government Health Insurance Reserve Fund
24  shall be a continuing fund not subject to fiscal year
25  limitations. The Local Government Health Insurance Reserve
26  Fund is not subject to administrative charges or charge-backs,

 

 

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1  including but not limited to those authorized under Section 8h
2  of the State Finance Act. All revenues arising from the
3  administration of the health benefits program established
4  under this Section shall be deposited into the Local
5  Government Health Insurance Reserve Fund. Any interest earned
6  on moneys in the Local Government Health Insurance Reserve
7  Fund shall be deposited into the Fund. All expenditures from
8  this Fund shall be used for payments for health care benefits
9  for local government and rehabilitation facility employees,
10  annuitants, and dependents, and to reimburse the Department or
11  its administrative service organization for all expenses
12  incurred in the administration of benefits. No other State
13  funds may be used for these purposes.
14  A local government employer's participation or desire to
15  participate in a program created under this subsection shall
16  not limit that employer's duty to bargain with the
17  representative of any collective bargaining unit of its
18  employees.
19  (j) Any rehabilitation facility within the State of
20  Illinois may apply to the Director to have its employees,
21  annuitants, and their eligible dependents provided group
22  health coverage under this Act on a non-insured basis. To
23  participate, a rehabilitation facility must agree to enroll
24  all of its employees and remit the entire cost of providing
25  such coverage for its employees, except that the
26  rehabilitation facility shall not be required to enroll those

 

 

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1  of its employees who are covered spouses or dependents under
2  this plan or another group policy or plan providing health
3  benefits as long as (1) an appropriate official from the
4  rehabilitation facility attests that each employee not
5  enrolled is a covered spouse or dependent under this plan or
6  another group policy or plan, and (2) at least 50% of the
7  employees are enrolled and the rehabilitation facility remits
8  the entire cost of providing coverage to those employees.
9  Employees of a participating rehabilitation facility who are
10  not enrolled due to coverage under another group health policy
11  or plan may enroll in the event of a qualifying change in
12  status, special enrollment, special circumstance as defined by
13  the Director, or during the annual Benefit Choice Period. A
14  participating rehabilitation facility may also elect to cover
15  its annuitants. Dependent coverage shall be offered on an
16  optional basis, with the costs paid by the rehabilitation
17  facility, its employees, or some combination of the 2 as
18  determined by the rehabilitation facility. The rehabilitation
19  facility shall be responsible for timely collection and
20  transmission of dependent premiums.
21  The Director shall annually determine quarterly rates of
22  payment, subject to the following constraints:
23  (1) In the first year of coverage, the rates shall be
24  equal to the amount normally charged to State employees
25  for elected optional coverages or for enrolled dependents
26  coverages or other contributory coverages on behalf of its

 

 

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1  employees, adjusted for differences between State
2  employees and employees of the rehabilitation facility in
3  age, sex, geographic location or other relevant
4  demographic variables, plus an amount sufficient to pay
5  for the additional administrative costs of providing
6  coverage to employees of the rehabilitation facility and
7  their dependents.
8  (2) In subsequent years, a further adjustment shall be
9  made to reflect the actual prior years' claims experience
10  of the employees of the rehabilitation facility.
11  Monthly payments by the rehabilitation facility or its
12  employees for group health benefits shall be deposited in the
13  Local Government Health Insurance Reserve Fund.
14  (k) Any domestic violence shelter or service within the
15  State of Illinois may apply to the Director to have its
16  employees, annuitants, and their dependents provided group
17  health coverage under this Act on a non-insured basis. To
18  participate, a domestic violence shelter or service must agree
19  to enroll all of its employees and pay the entire cost of
20  providing such coverage for its employees. The domestic
21  violence shelter shall not be required to enroll those of its
22  employees who are covered spouses or dependents under this
23  plan or another group policy or plan providing health benefits
24  as long as (1) an appropriate official from the domestic
25  violence shelter attests that each employee not enrolled is a
26  covered spouse or dependent under this plan or another group

 

 

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1  policy or plan and (2) at least 50% of the employees are
2  enrolled and the domestic violence shelter remits the entire
3  cost of providing coverage to those employees. Employees of a
4  participating domestic violence shelter who are not enrolled
5  due to coverage under another group health policy or plan may
6  enroll in the event of a qualifying change in status, special
7  enrollment, or special circumstance as defined by the Director
8  or during the annual Benefit Choice Period. A participating
9  domestic violence shelter may also elect to cover its
10  annuitants. Dependent coverage shall be offered on an optional
11  basis, with employees, or some combination of the 2 as
12  determined by the domestic violence shelter or service. The
13  domestic violence shelter or service shall be responsible for
14  timely collection and transmission of dependent premiums.
15  The Director shall annually determine rates of payment,
16  subject to the following constraints:
17  (1) In the first year of coverage, the rates shall be
18  equal to the amount normally charged to State employees
19  for elected optional coverages or for enrolled dependents
20  coverages or other contributory coverages on behalf of its
21  employees, adjusted for differences between State
22  employees and employees of the domestic violence shelter
23  or service in age, sex, geographic location or other
24  relevant demographic variables, plus an amount sufficient
25  to pay for the additional administrative costs of
26  providing coverage to employees of the domestic violence

 

 

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1  shelter or service and their dependents.
2  (2) In subsequent years, a further adjustment shall be
3  made to reflect the actual prior years' claims experience
4  of the employees of the domestic violence shelter or
5  service.
6  Monthly payments by the domestic violence shelter or
7  service or its employees for group health insurance shall be
8  deposited in the Local Government Health Insurance Reserve
9  Fund.
10  (l) A public community college or entity organized
11  pursuant to the Public Community College Act may apply to the
12  Director initially to have only annuitants not covered prior
13  to July 1, 1992 by the district's health plan provided health
14  coverage under this Act on a non-insured basis. The community
15  college must execute a 2-year contract to participate in the
16  Local Government Health Plan. Any annuitant may enroll in the
17  event of a qualifying change in status, special enrollment,
18  special circumstance as defined by the Director, or during the
19  annual Benefit Choice Period.
20  The Director shall annually determine monthly rates of
21  payment subject to the following constraints: for those
22  community colleges with annuitants only enrolled, first year
23  rates shall be equal to the average cost to cover claims for a
24  State member adjusted for demographics, Medicare
25  participation, and other factors; and in the second year, a
26  further adjustment of rates shall be made to reflect the

 

 

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1  actual first year's claims experience of the covered
2  annuitants.
3  (l-5) The provisions of subsection (l) become inoperative
4  on July 1, 1999.
5  (m) The Director shall adopt any rules deemed necessary
6  for implementation of this amendatory Act of 1989 (Public Act
7  86-978).
8  (n) Any child advocacy center within the State of Illinois
9  may apply to the Director to have its employees, annuitants,
10  and their dependents provided group health coverage under this
11  Act on a non-insured basis. To participate, a child advocacy
12  center must agree to enroll all of its employees and pay the
13  entire cost of providing coverage for its employees. The child
14  advocacy center shall not be required to enroll those of its
15  employees who are covered spouses or dependents under this
16  plan or another group policy or plan providing health benefits
17  as long as (1) an appropriate official from the child advocacy
18  center attests that each employee not enrolled is a covered
19  spouse or dependent under this plan or another group policy or
20  plan and (2) at least 50% of the employees are enrolled and the
21  child advocacy center remits the entire cost of providing
22  coverage to those employees. Employees of a participating
23  child advocacy center who are not enrolled due to coverage
24  under another group health policy or plan may enroll in the
25  event of a qualifying change in status, special enrollment, or
26  special circumstance as defined by the Director or during the

 

 

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1  annual Benefit Choice Period. A participating child advocacy
2  center may also elect to cover its annuitants. Dependent
3  coverage shall be offered on an optional basis, with the costs
4  paid by the child advocacy center, its employees, or some
5  combination of the 2 as determined by the child advocacy
6  center. The child advocacy center shall be responsible for
7  timely collection and transmission of dependent premiums.
8  The Director shall annually determine rates of payment,
9  subject to the following constraints:
10  (1) In the first year of coverage, the rates shall be
11  equal to the amount normally charged to State employees
12  for elected optional coverages or for enrolled dependents
13  coverages or other contributory coverages on behalf of its
14  employees, adjusted for differences between State
15  employees and employees of the child advocacy center in
16  age, sex, geographic location, or other relevant
17  demographic variables, plus an amount sufficient to pay
18  for the additional administrative costs of providing
19  coverage to employees of the child advocacy center and
20  their dependents.
21  (2) In subsequent years, a further adjustment shall be
22  made to reflect the actual prior years' claims experience
23  of the employees of the child advocacy center.
24  Monthly payments by the child advocacy center or its
25  employees for group health insurance shall be deposited into
26  the Local Government Health Insurance Reserve Fund.

 

 

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1  (Source: P.A. 102-19, eff. 7-1-21.)
2  Section 10. The Illinois Pension Code is amended by
3  changing Sections 1-160, 1-161, 14-103.05, 14-103.41,
4  14-152.1, 20-121, 20-123, 20-124, and 20-125 and by adding
5  Section 14-155.5 as follows:
6  (40 ILCS 5/1-160)
7  (Text of Section from P.A. 102-719)
8  Sec. 1-160. Provisions applicable to new hires.
9  (a) The provisions of this Section apply to a person who,
10  on or after January 1, 2011, first becomes a member or a
11  participant under any reciprocal retirement system or pension
12  fund established under this Code, other than a retirement
13  system or pension fund established under Article 2, 3, 4, 5, 6,
14  7, 15, or 18 of this Code, notwithstanding any other provision
15  of this Code to the contrary, but do not apply to any
16  self-managed plan established under this Code or to any
17  participant of the retirement plan established under Section
18  22-101; except that this Section applies to a person who
19  elected to establish alternative credits by electing in
20  writing after January 1, 2011, but before August 8, 2011,
21  under Section 7-145.1 of this Code. Notwithstanding anything
22  to the contrary in this Section, for purposes of this Section,
23  a person who is a Tier 1 regular employee as defined in Section
24  7-109.4 of this Code or who participated in a retirement

 

 

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1  system under Article 15 prior to January 1, 2011 shall be
2  deemed a person who first became a member or participant prior
3  to January 1, 2011 under any retirement system or pension fund
4  subject to this Section. The changes made to this Section by
5  Public Act 98-596 are a clarification of existing law and are
6  intended to be retroactive to January 1, 2011 (the effective
7  date of Public Act 96-889), notwithstanding the provisions of
8  Section 1-103.1 of this Code.
9  This Section does not apply to a person who first becomes a
10  noncovered employee under Article 14 on or after the
11  implementation date of the plan created under Section 1-161
12  for that Article, unless that person elects under subsection
13  (b) of Section 1-161 to instead receive the benefits provided
14  under this Section and the applicable provisions of that
15  Article.
16  This Section does not apply to a person who first becomes a
17  member or participant under Article 16 on or after the
18  implementation date of the plan created under Section 1-161
19  for that Article, unless that person elects under subsection
20  (b) of Section 1-161 to instead receive the benefits provided
21  under this Section and the applicable provisions of that
22  Article.
23  This Section does not apply to a person who elects under
24  subsection (c-5) of Section 1-161 to receive the benefits
25  under Section 1-161.
26  This Section does not apply to a person who first becomes a

 

 

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1  member or participant of an affected pension fund on or after 6
2  months after the resolution or ordinance date, as defined in
3  Section 1-162, unless that person elects under subsection (c)
4  of Section 1-162 to receive the benefits provided under this
5  Section and the applicable provisions of the Article under
6  which he or she is a member or participant.
7  This Section does not apply to a person who participates
8  in a defined contribution plan established under Section
9  14-155.5.
10  (b) "Final average salary" means, except as otherwise
11  provided in this subsection, the average monthly (or annual)
12  salary obtained by dividing the total salary or earnings
13  calculated under the Article applicable to the member or
14  participant during the 96 consecutive months (or 8 consecutive
15  years) of service within the last 120 months (or 10 years) of
16  service in which the total salary or earnings calculated under
17  the applicable Article was the highest by the number of months
18  (or years) of service in that period. For the purposes of a
19  person who first becomes a member or participant of any
20  retirement system or pension fund to which this Section
21  applies on or after January 1, 2011, in this Code, "final
22  average salary" shall be substituted for the following:
23  (1) (Blank).
24  (2) In Articles 8, 9, 10, 11, and 12, "highest average
25  annual salary for any 4 consecutive years within the last
26  10 years of service immediately preceding the date of

 

 

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1  withdrawal".
2  (3) In Article 13, "average final salary".
3  (4) In Article 14, "final average compensation".
4  (5) In Article 17, "average salary".
5  (6) In Section 22-207, "wages or salary received by
6  him at the date of retirement or discharge".
7  A member of the Teachers' Retirement System of the State
8  of Illinois who retires on or after June 1, 2021 and for whom
9  the 2020-2021 school year is used in the calculation of the
10  member's final average salary shall use the higher of the
11  following for the purpose of determining the member's final
12  average salary:
13  (A) the amount otherwise calculated under the first
14  paragraph of this subsection; or
15  (B) an amount calculated by the Teachers' Retirement
16  System of the State of Illinois using the average of the
17  monthly (or annual) salary obtained by dividing the total
18  salary or earnings calculated under Article 16 applicable
19  to the member or participant during the 96 months (or 8
20  years) of service within the last 120 months (or 10 years)
21  of service in which the total salary or earnings
22  calculated under the Article was the highest by the number
23  of months (or years) of service in that period.
24  (b-5) Beginning on January 1, 2011, for all purposes under
25  this Code (including without limitation the calculation of
26  benefits and employee contributions), the annual earnings,

 

 

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1  salary, or wages (based on the plan year) of a member or
2  participant to whom this Section applies shall not exceed
3  $106,800; however, that amount shall annually thereafter be
4  increased by the lesser of (i) 3% of that amount, including all
5  previous adjustments, or (ii) one-half the annual unadjusted
6  percentage increase (but not less than zero) in the consumer
7  price index-u for the 12 months ending with the September
8  preceding each November 1, including all previous adjustments.
9  For the purposes of this Section, "consumer price index-u"
10  means the index published by the Bureau of Labor Statistics of
11  the United States Department of Labor that measures the
12  average change in prices of goods and services purchased by
13  all urban consumers, United States city average, all items,
14  1982-84 = 100. The new amount resulting from each annual
15  adjustment shall be determined by the Public Pension Division
16  of the Department of Insurance and made available to the
17  boards of the retirement systems and pension funds by November
18  1 of each year.
19  (c) A member or participant is entitled to a retirement
20  annuity upon written application if he or she has attained age
21  67 (age 65, with respect to service under Article 12 that is
22  subject to this Section, for a member or participant under
23  Article 12 who first becomes a member or participant under
24  Article 12 on or after January 1, 2022 or who makes the
25  election under item (i) of subsection (d-15) of this Section)
26  and has at least 10 years of service credit and is otherwise

 

 

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1  eligible under the requirements of the applicable Article.
2  A member or participant who has attained age 62 (age 60,
3  with respect to service under Article 12 that is subject to
4  this Section, for a member or participant under Article 12 who
5  first becomes a member or participant under Article 12 on or
6  after January 1, 2022 or who makes the election under item (i)
7  of subsection (d-15) of this Section) and has at least 10 years
8  of service credit and is otherwise eligible under the
9  requirements of the applicable Article may elect to receive
10  the lower retirement annuity provided in subsection (d) of
11  this Section.
12  (c-5) A person who first becomes a member or a participant
13  subject to this Section on or after July 6, 2017 (the effective
14  date of Public Act 100-23), notwithstanding any other
15  provision of this Code to the contrary, is entitled to a
16  retirement annuity under Article 8 or Article 11 upon written
17  application if he or she has attained age 65 and has at least
18  10 years of service credit and is otherwise eligible under the
19  requirements of Article 8 or Article 11 of this Code,
20  whichever is applicable.
21  (d) The retirement annuity of a member or participant who
22  is retiring after attaining age 62 (age 60, with respect to
23  service under Article 12 that is subject to this Section, for a
24  member or participant under Article 12 who first becomes a
25  member or participant under Article 12 on or after January 1,
26  2022 or who makes the election under item (i) of subsection

 

 

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1  (d-15) of this Section) with at least 10 years of service
2  credit shall be reduced by one-half of 1% for each full month
3  that the member's age is under age 67 (age 65, with respect to
4  service under Article 12 that is subject to this Section, for a
5  member or participant under Article 12 who first becomes a
6  member or participant under Article 12 on or after January 1,
7  2022 or who makes the election under item (i) of subsection
8  (d-15) of this Section).
9  (d-5) The retirement annuity payable under Article 8 or
10  Article 11 to an eligible person subject to subsection (c-5)
11  of this Section who is retiring at age 60 with at least 10
12  years of service credit shall be reduced by one-half of 1% for
13  each full month that the member's age is under age 65.
14  (d-10) Each person who first became a member or
15  participant under Article 8 or Article 11 of this Code on or
16  after January 1, 2011 and prior to July 6, 2017 (the effective
17  date of Public Act 100-23) shall make an irrevocable election
18  either:
19  (i) to be eligible for the reduced retirement age
20  provided in subsections (c-5) and (d-5) of this Section,
21  the eligibility for which is conditioned upon the member
22  or participant agreeing to the increases in employee
23  contributions for age and service annuities provided in
24  subsection (a-5) of Section 8-174 of this Code (for
25  service under Article 8) or subsection (a-5) of Section
26  11-170 of this Code (for service under Article 11); or

 

 

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1  (ii) to not agree to item (i) of this subsection
2  (d-10), in which case the member or participant shall
3  continue to be subject to the retirement age provisions in
4  subsections (c) and (d) of this Section and the employee
5  contributions for age and service annuity as provided in
6  subsection (a) of Section 8-174 of this Code (for service
7  under Article 8) or subsection (a) of Section 11-170 of
8  this Code (for service under Article 11).
9  The election provided for in this subsection shall be made
10  between October 1, 2017 and November 15, 2017. A person
11  subject to this subsection who makes the required election
12  shall remain bound by that election. A person subject to this
13  subsection who fails for any reason to make the required
14  election within the time specified in this subsection shall be
15  deemed to have made the election under item (ii).
16  (d-15) Each person who first becomes a member or
17  participant under Article 12 on or after January 1, 2011 and
18  prior to January 1, 2022 shall make an irrevocable election
19  either:
20  (i) to be eligible for the reduced retirement age
21  specified in subsections (c) and (d) of this Section, the
22  eligibility for which is conditioned upon the member or
23  participant agreeing to the increase in employee
24  contributions for service annuities specified in
25  subsection (b) of Section 12-150; or
26  (ii) to not agree to item (i) of this subsection

 

 

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1  (d-15), in which case the member or participant shall not
2  be eligible for the reduced retirement age specified in
3  subsections (c) and (d) of this Section and shall not be
4  subject to the increase in employee contributions for
5  service annuities specified in subsection (b) of Section
6  12-150.
7  The election provided for in this subsection shall be made
8  between January 1, 2022 and April 1, 2022. A person subject to
9  this subsection who makes the required election shall remain
10  bound by that election. A person subject to this subsection
11  who fails for any reason to make the required election within
12  the time specified in this subsection shall be deemed to have
13  made the election under item (ii).
14  (e) Any retirement annuity or supplemental annuity shall
15  be subject to annual increases on the January 1 occurring
16  either on or after the attainment of age 67 (age 65, with
17  respect to service under Article 12 that is subject to this
18  Section, for a member or participant under Article 12 who
19  first becomes a member or participant under Article 12 on or
20  after January 1, 2022 or who makes the election under item (i)
21  of subsection (d-15); and beginning on July 6, 2017 (the
22  effective date of Public Act 100-23), age 65 with respect to
23  service under Article 8 or Article 11 for eligible persons
24  who: (i) are subject to subsection (c-5) of this Section; or
25  (ii) made the election under item (i) of subsection (d-10) of
26  this Section) or the first anniversary of the annuity start

 

 

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1  date, whichever is later. Each annual increase shall be
2  calculated at 3% or one-half the annual unadjusted percentage
3  increase (but not less than zero) in the consumer price
4  index-u for the 12 months ending with the September preceding
5  each November 1, whichever is less, of the originally granted
6  retirement annuity. If the annual unadjusted percentage change
7  in the consumer price index-u for the 12 months ending with the
8  September preceding each November 1 is zero or there is a
9  decrease, then the annuity shall not be increased.
10  For the purposes of Section 1-103.1 of this Code, the
11  changes made to this Section by Public Act 102-263 are
12  applicable without regard to whether the employee was in
13  active service on or after August 6, 2021 (the effective date
14  of Public Act 102-263).
15  For the purposes of Section 1-103.1 of this Code, the
16  changes made to this Section by Public Act 100-23 are
17  applicable without regard to whether the employee was in
18  active service on or after July 6, 2017 (the effective date of
19  Public Act 100-23).
20  (f) The initial survivor's or widow's annuity of an
21  otherwise eligible survivor or widow of a retired member or
22  participant who first became a member or participant on or
23  after January 1, 2011 shall be in the amount of 66 2/3% of the
24  retired member's or participant's retirement annuity at the
25  date of death. In the case of the death of a member or
26  participant who has not retired and who first became a member

 

 

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1  or participant on or after January 1, 2011, eligibility for a
2  survivor's or widow's annuity shall be determined by the
3  applicable Article of this Code. The initial benefit shall be
4  66 2/3% of the earned annuity without a reduction due to age. A
5  child's annuity of an otherwise eligible child shall be in the
6  amount prescribed under each Article if applicable. Any
7  survivor's or widow's annuity shall be increased (1) on each
8  January 1 occurring on or after the commencement of the
9  annuity if the deceased member died while receiving a
10  retirement annuity or (2) in other cases, on each January 1
11  occurring after the first anniversary of the commencement of
12  the annuity. Each annual increase shall be calculated at 3% or
13  one-half the annual unadjusted percentage increase (but not
14  less than zero) in the consumer price index-u for the 12 months
15  ending with the September preceding each November 1, whichever
16  is less, of the originally granted survivor's annuity. If the
17  annual unadjusted percentage change in the consumer price
18  index-u for the 12 months ending with the September preceding
19  each November 1 is zero or there is a decrease, then the
20  annuity shall not be increased.
21  (g) The benefits in Section 14-110 apply if the person is a
22  fire fighter in the fire protection service of a department, a
23  security employee of the Department of Corrections or the
24  Department of Juvenile Justice, or a security employee of the
25  Department of Innovation and Technology, as those terms are
26  defined in subsection (b) and subsection (c) of Section

 

 

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1  14-110. A person who meets the requirements of this Section is
2  entitled to an annuity calculated under the provisions of
3  Section 14-110, in lieu of the regular or minimum retirement
4  annuity, only if the person has withdrawn from service with
5  not less than 20 years of eligible creditable service and has
6  attained age 60, regardless of whether the attainment of age
7  60 occurs while the person is still in service.
8  (g-5) The benefits in Section 14-110 apply if the person
9  is a State policeman, investigator for the Secretary of State,
10  conservation police officer, investigator for the Department
11  of Revenue or the Illinois Gaming Board, investigator for the
12  Office of the Attorney General, Commerce Commission police
13  officer, or arson investigator, as those terms are defined in
14  subsection (b) and subsection (c) of Section 14-110. A person
15  who meets the requirements of this Section is entitled to an
16  annuity calculated under the provisions of Section 14-110, in
17  lieu of the regular or minimum retirement annuity, only if the
18  person has withdrawn from service with not less than 20 years
19  of eligible creditable service and has attained age 55,
20  regardless of whether the attainment of age 55 occurs while
21  the person is still in service.
22  (h) If a person who first becomes a member or a participant
23  of a retirement system or pension fund subject to this Section
24  on or after January 1, 2011 is receiving a retirement annuity
25  or retirement pension under that system or fund and becomes a
26  member or participant under any other system or fund created

 

 

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1  by this Code and is employed on a full-time basis, except for
2  those members or participants exempted from the provisions of
3  this Section under subsection (a) of this Section, then the
4  person's retirement annuity or retirement pension under that
5  system or fund shall be suspended during that employment. Upon
6  termination of that employment, the person's retirement
7  annuity or retirement pension payments shall resume and be
8  recalculated if recalculation is provided for under the
9  applicable Article of this Code.
10  If a person who first becomes a member of a retirement
11  system or pension fund subject to this Section on or after
12  January 1, 2012 and is receiving a retirement annuity or
13  retirement pension under that system or fund and accepts on a
14  contractual basis a position to provide services to a
15  governmental entity from which he or she has retired, then
16  that person's annuity or retirement pension earned as an
17  active employee of the employer shall be suspended during that
18  contractual service. A person receiving an annuity or
19  retirement pension under this Code shall notify the pension
20  fund or retirement system from which he or she is receiving an
21  annuity or retirement pension, as well as his or her
22  contractual employer, of his or her retirement status before
23  accepting contractual employment. A person who fails to submit
24  such notification shall be guilty of a Class A misdemeanor and
25  required to pay a fine of $1,000. Upon termination of that
26  contractual employment, the person's retirement annuity or

 

 

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1  retirement pension payments shall resume and, if appropriate,
2  be recalculated under the applicable provisions of this Code.
3  (i) (Blank).
4  (j) In the case of a conflict between the provisions of
5  this Section and any other provision of this Code, the
6  provisions of this Section shall control.
7  (Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;
8  102-210, eff. 1-1-22; 102-263, eff. 8-6-21; 102-719, eff.
9  5-6-22.)
10  (Text of Section from P.A. 102-813)
11  Sec. 1-160. Provisions applicable to new hires.
12  (a) The provisions of this Section apply to a person who,
13  on or after January 1, 2011, first becomes a member or a
14  participant under any reciprocal retirement system or pension
15  fund established under this Code, other than a retirement
16  system or pension fund established under Article 2, 3, 4, 5, 6,
17  7, 15, or 18 of this Code, notwithstanding any other provision
18  of this Code to the contrary, but do not apply to any
19  self-managed plan established under this Code or to any
20  participant of the retirement plan established under Section
21  22-101; except that this Section applies to a person who
22  elected to establish alternative credits by electing in
23  writing after January 1, 2011, but before August 8, 2011,
24  under Section 7-145.1 of this Code. Notwithstanding anything
25  to the contrary in this Section, for purposes of this Section,

 

 

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1  a person who is a Tier 1 regular employee as defined in Section
2  7-109.4 of this Code or who participated in a retirement
3  system under Article 15 prior to January 1, 2011 shall be
4  deemed a person who first became a member or participant prior
5  to January 1, 2011 under any retirement system or pension fund
6  subject to this Section. The changes made to this Section by
7  Public Act 98-596 are a clarification of existing law and are
8  intended to be retroactive to January 1, 2011 (the effective
9  date of Public Act 96-889), notwithstanding the provisions of
10  Section 1-103.1 of this Code.
11  This Section does not apply to a person who first becomes a
12  noncovered employee under Article 14 on or after the
13  implementation date of the plan created under Section 1-161
14  for that Article, unless that person elects under subsection
15  (b) of Section 1-161 to instead receive the benefits provided
16  under this Section and the applicable provisions of that
17  Article.
18  This Section does not apply to a person who first becomes a
19  member or participant under Article 16 on or after the
20  implementation date of the plan created under Section 1-161
21  for that Article, unless that person elects under subsection
22  (b) of Section 1-161 to instead receive the benefits provided
23  under this Section and the applicable provisions of that
24  Article.
25  This Section does not apply to a person who elects under
26  subsection (c-5) of Section 1-161 to receive the benefits

 

 

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1  under Section 1-161.
2  This Section does not apply to a person who first becomes a
3  member or participant of an affected pension fund on or after 6
4  months after the resolution or ordinance date, as defined in
5  Section 1-162, unless that person elects under subsection (c)
6  of Section 1-162 to receive the benefits provided under this
7  Section and the applicable provisions of the Article under
8  which he or she is a member or participant.
9  This Section does not apply to a person who participates
10  in a defined contribution plan established under Section
11  14-155.5.
12  (b) "Final average salary" means, except as otherwise
13  provided in this subsection, the average monthly (or annual)
14  salary obtained by dividing the total salary or earnings
15  calculated under the Article applicable to the member or
16  participant during the 96 consecutive months (or 8 consecutive
17  years) of service within the last 120 months (or 10 years) of
18  service in which the total salary or earnings calculated under
19  the applicable Article was the highest by the number of months
20  (or years) of service in that period. For the purposes of a
21  person who first becomes a member or participant of any
22  retirement system or pension fund to which this Section
23  applies on or after January 1, 2011, in this Code, "final
24  average salary" shall be substituted for the following:
25  (1) (Blank).
26  (2) In Articles 8, 9, 10, 11, and 12, "highest average

 

 

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1  annual salary for any 4 consecutive years within the last
2  10 years of service immediately preceding the date of
3  withdrawal".
4  (3) In Article 13, "average final salary".
5  (4) In Article 14, "final average compensation".
6  (5) In Article 17, "average salary".
7  (6) In Section 22-207, "wages or salary received by
8  him at the date of retirement or discharge".
9  A member of the Teachers' Retirement System of the State
10  of Illinois who retires on or after June 1, 2021 and for whom
11  the 2020-2021 school year is used in the calculation of the
12  member's final average salary shall use the higher of the
13  following for the purpose of determining the member's final
14  average salary:
15  (A) the amount otherwise calculated under the first
16  paragraph of this subsection; or
17  (B) an amount calculated by the Teachers' Retirement
18  System of the State of Illinois using the average of the
19  monthly (or annual) salary obtained by dividing the total
20  salary or earnings calculated under Article 16 applicable
21  to the member or participant during the 96 months (or 8
22  years) of service within the last 120 months (or 10 years)
23  of service in which the total salary or earnings
24  calculated under the Article was the highest by the number
25  of months (or years) of service in that period.
26  (b-5) Beginning on January 1, 2011, for all purposes under

 

 

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1  this Code (including without limitation the calculation of
2  benefits and employee contributions), the annual earnings,
3  salary, or wages (based on the plan year) of a member or
4  participant to whom this Section applies shall not exceed
5  $106,800; however, that amount shall annually thereafter be
6  increased by the lesser of (i) 3% of that amount, including all
7  previous adjustments, or (ii) one-half the annual unadjusted
8  percentage increase (but not less than zero) in the consumer
9  price index-u for the 12 months ending with the September
10  preceding each November 1, including all previous adjustments.
11  For the purposes of this Section, "consumer price index-u"
12  means the index published by the Bureau of Labor Statistics of
13  the United States Department of Labor that measures the
14  average change in prices of goods and services purchased by
15  all urban consumers, United States city average, all items,
16  1982-84 = 100. The new amount resulting from each annual
17  adjustment shall be determined by the Public Pension Division
18  of the Department of Insurance and made available to the
19  boards of the retirement systems and pension funds by November
20  1 of each year.
21  (c) A member or participant is entitled to a retirement
22  annuity upon written application if he or she has attained age
23  67 (age 65, with respect to service under Article 12 that is
24  subject to this Section, for a member or participant under
25  Article 12 who first becomes a member or participant under
26  Article 12 on or after January 1, 2022 or who makes the

 

 

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1  election under item (i) of subsection (d-15) of this Section)
2  and has at least 10 years of service credit and is otherwise
3  eligible under the requirements of the applicable Article.
4  A member or participant who has attained age 62 (age 60,
5  with respect to service under Article 12 that is subject to
6  this Section, for a member or participant under Article 12 who
7  first becomes a member or participant under Article 12 on or
8  after January 1, 2022 or who makes the election under item (i)
9  of subsection (d-15) of this Section) and has at least 10 years
10  of service credit and is otherwise eligible under the
11  requirements of the applicable Article may elect to receive
12  the lower retirement annuity provided in subsection (d) of
13  this Section.
14  (c-5) A person who first becomes a member or a participant
15  subject to this Section on or after July 6, 2017 (the effective
16  date of Public Act 100-23), notwithstanding any other
17  provision of this Code to the contrary, is entitled to a
18  retirement annuity under Article 8 or Article 11 upon written
19  application if he or she has attained age 65 and has at least
20  10 years of service credit and is otherwise eligible under the
21  requirements of Article 8 or Article 11 of this Code,
22  whichever is applicable.
23  (d) The retirement annuity of a member or participant who
24  is retiring after attaining age 62 (age 60, with respect to
25  service under Article 12 that is subject to this Section, for a
26  member or participant under Article 12 who first becomes a

 

 

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1  member or participant under Article 12 on or after January 1,
2  2022 or who makes the election under item (i) of subsection
3  (d-15) of this Section) with at least 10 years of service
4  credit shall be reduced by one-half of 1% for each full month
5  that the member's age is under age 67 (age 65, with respect to
6  service under Article 12 that is subject to this Section, for a
7  member or participant under Article 12 who first becomes a
8  member or participant under Article 12 on or after January 1,
9  2022 or who makes the election under item (i) of subsection
10  (d-15) of this Section).
11  (d-5) The retirement annuity payable under Article 8 or
12  Article 11 to an eligible person subject to subsection (c-5)
13  of this Section who is retiring at age 60 with at least 10
14  years of service credit shall be reduced by one-half of 1% for
15  each full month that the member's age is under age 65.
16  (d-10) Each person who first became a member or
17  participant under Article 8 or Article 11 of this Code on or
18  after January 1, 2011 and prior to July 6, 2017 (the effective
19  date of Public Act 100-23) shall make an irrevocable election
20  either:
21  (i) to be eligible for the reduced retirement age
22  provided in subsections (c-5) and (d-5) of this Section,
23  the eligibility for which is conditioned upon the member
24  or participant agreeing to the increases in employee
25  contributions for age and service annuities provided in
26  subsection (a-5) of Section 8-174 of this Code (for

 

 

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1  service under Article 8) or subsection (a-5) of Section
2  11-170 of this Code (for service under Article 11); or
3  (ii) to not agree to item (i) of this subsection
4  (d-10), in which case the member or participant shall
5  continue to be subject to the retirement age provisions in
6  subsections (c) and (d) of this Section and the employee
7  contributions for age and service annuity as provided in
8  subsection (a) of Section 8-174 of this Code (for service
9  under Article 8) or subsection (a) of Section 11-170 of
10  this Code (for service under Article 11).
11  The election provided for in this subsection shall be made
12  between October 1, 2017 and November 15, 2017. A person
13  subject to this subsection who makes the required election
14  shall remain bound by that election. A person subject to this
15  subsection who fails for any reason to make the required
16  election within the time specified in this subsection shall be
17  deemed to have made the election under item (ii).
18  (d-15) Each person who first becomes a member or
19  participant under Article 12 on or after January 1, 2011 and
20  prior to January 1, 2022 shall make an irrevocable election
21  either:
22  (i) to be eligible for the reduced retirement age
23  specified in subsections (c) and (d) of this Section, the
24  eligibility for which is conditioned upon the member or
25  participant agreeing to the increase in employee
26  contributions for service annuities specified in

 

 

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1  subsection (b) of Section 12-150; or
2  (ii) to not agree to item (i) of this subsection
3  (d-15), in which case the member or participant shall not
4  be eligible for the reduced retirement age specified in
5  subsections (c) and (d) of this Section and shall not be
6  subject to the increase in employee contributions for
7  service annuities specified in subsection (b) of Section
8  12-150.
9  The election provided for in this subsection shall be made
10  between January 1, 2022 and April 1, 2022. A person subject to
11  this subsection who makes the required election shall remain
12  bound by that election. A person subject to this subsection
13  who fails for any reason to make the required election within
14  the time specified in this subsection shall be deemed to have
15  made the election under item (ii).
16  (e) Any retirement annuity or supplemental annuity shall
17  be subject to annual increases on the January 1 occurring
18  either on or after the attainment of age 67 (age 65, with
19  respect to service under Article 12 that is subject to this
20  Section, for a member or participant under Article 12 who
21  first becomes a member or participant under Article 12 on or
22  after January 1, 2022 or who makes the election under item (i)
23  of subsection (d-15); and beginning on July 6, 2017 (the
24  effective date of Public Act 100-23), age 65 with respect to
25  service under Article 8 or Article 11 for eligible persons
26  who: (i) are subject to subsection (c-5) of this Section; or

 

 

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1  (ii) made the election under item (i) of subsection (d-10) of
2  this Section) or the first anniversary of the annuity start
3  date, whichever is later. Each annual increase shall be
4  calculated at 3% or one-half the annual unadjusted percentage
5  increase (but not less than zero) in the consumer price
6  index-u for the 12 months ending with the September preceding
7  each November 1, whichever is less, of the originally granted
8  retirement annuity. If the annual unadjusted percentage change
9  in the consumer price index-u for the 12 months ending with the
10  September preceding each November 1 is zero or there is a
11  decrease, then the annuity shall not be increased.
12  For the purposes of Section 1-103.1 of this Code, the
13  changes made to this Section by Public Act 102-263 are
14  applicable without regard to whether the employee was in
15  active service on or after August 6, 2021 (the effective date
16  of Public Act 102-263).
17  For the purposes of Section 1-103.1 of this Code, the
18  changes made to this Section by Public Act 100-23 are
19  applicable without regard to whether the employee was in
20  active service on or after July 6, 2017 (the effective date of
21  Public Act 100-23).
22  (f) The initial survivor's or widow's annuity of an
23  otherwise eligible survivor or widow of a retired member or
24  participant who first became a member or participant on or
25  after January 1, 2011 shall be in the amount of 66 2/3% of the
26  retired member's or participant's retirement annuity at the

 

 

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1  date of death. In the case of the death of a member or
2  participant who has not retired and who first became a member
3  or participant on or after January 1, 2011, eligibility for a
4  survivor's or widow's annuity shall be determined by the
5  applicable Article of this Code. The initial benefit shall be
6  66 2/3% of the earned annuity without a reduction due to age. A
7  child's annuity of an otherwise eligible child shall be in the
8  amount prescribed under each Article if applicable. Any
9  survivor's or widow's annuity shall be increased (1) on each
10  January 1 occurring on or after the commencement of the
11  annuity if the deceased member died while receiving a
12  retirement annuity or (2) in other cases, on each January 1
13  occurring after the first anniversary of the commencement of
14  the annuity. Each annual increase shall be calculated at 3% or
15  one-half the annual unadjusted percentage increase (but not
16  less than zero) in the consumer price index-u for the 12 months
17  ending with the September preceding each November 1, whichever
18  is less, of the originally granted survivor's annuity. If the
19  annual unadjusted percentage change in the consumer price
20  index-u for the 12 months ending with the September preceding
21  each November 1 is zero or there is a decrease, then the
22  annuity shall not be increased.
23  (g) The benefits in Section 14-110 apply only if the
24  person is a State policeman, a fire fighter in the fire
25  protection service of a department, a conservation police
26  officer, an investigator for the Secretary of State, an arson

 

 

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1  investigator, a Commerce Commission police officer,
2  investigator for the Department of Revenue or the Illinois
3  Gaming Board, a security employee of the Department of
4  Corrections or the Department of Juvenile Justice, or a
5  security employee of the Department of Innovation and
6  Technology, as those terms are defined in subsection (b) and
7  subsection (c) of Section 14-110. A person who meets the
8  requirements of this Section is entitled to an annuity
9  calculated under the provisions of Section 14-110, in lieu of
10  the regular or minimum retirement annuity, only if the person
11  has withdrawn from service with not less than 20 years of
12  eligible creditable service and has attained age 60,
13  regardless of whether the attainment of age 60 occurs while
14  the person is still in service.
15  (h) If a person who first becomes a member or a participant
16  of a retirement system or pension fund subject to this Section
17  on or after January 1, 2011 is receiving a retirement annuity
18  or retirement pension under that system or fund and becomes a
19  member or participant under any other system or fund created
20  by this Code and is employed on a full-time basis, except for
21  those members or participants exempted from the provisions of
22  this Section under subsection (a) of this Section, then the
23  person's retirement annuity or retirement pension under that
24  system or fund shall be suspended during that employment. Upon
25  termination of that employment, the person's retirement
26  annuity or retirement pension payments shall resume and be

 

 

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1  recalculated if recalculation is provided for under the
2  applicable Article of this Code.
3  If a person who first becomes a member of a retirement
4  system or pension fund subject to this Section on or after
5  January 1, 2012 and is receiving a retirement annuity or
6  retirement pension under that system or fund and accepts on a
7  contractual basis a position to provide services to a
8  governmental entity from which he or she has retired, then
9  that person's annuity or retirement pension earned as an
10  active employee of the employer shall be suspended during that
11  contractual service. A person receiving an annuity or
12  retirement pension under this Code shall notify the pension
13  fund or retirement system from which he or she is receiving an
14  annuity or retirement pension, as well as his or her
15  contractual employer, of his or her retirement status before
16  accepting contractual employment. A person who fails to submit
17  such notification shall be guilty of a Class A misdemeanor and
18  required to pay a fine of $1,000. Upon termination of that
19  contractual employment, the person's retirement annuity or
20  retirement pension payments shall resume and, if appropriate,
21  be recalculated under the applicable provisions of this Code.
22  (i) (Blank).
23  (j) In the case of a conflict between the provisions of
24  this Section and any other provision of this Code, the
25  provisions of this Section shall control.
26  (Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;

 

 

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1  102-210, eff. 1-1-22; 102-263, eff. 8-6-21; 102-813, eff.
2  5-13-22.)
3  (Text of Section from P.A. 102-956)
4  Sec. 1-160. Provisions applicable to new hires.
5  (a) The provisions of this Section apply to a person who,
6  on or after January 1, 2011, first becomes a member or a
7  participant under any reciprocal retirement system or pension
8  fund established under this Code, other than a retirement
9  system or pension fund established under Article 2, 3, 4, 5, 6,
10  7, 15, or 18 of this Code, notwithstanding any other provision
11  of this Code to the contrary, but do not apply to any
12  self-managed plan established under this Code or to any
13  participant of the retirement plan established under Section
14  22-101; except that this Section applies to a person who
15  elected to establish alternative credits by electing in
16  writing after January 1, 2011, but before August 8, 2011,
17  under Section 7-145.1 of this Code. Notwithstanding anything
18  to the contrary in this Section, for purposes of this Section,
19  a person who is a Tier 1 regular employee as defined in Section
20  7-109.4 of this Code or who participated in a retirement
21  system under Article 15 prior to January 1, 2011 shall be
22  deemed a person who first became a member or participant prior
23  to January 1, 2011 under any retirement system or pension fund
24  subject to this Section. The changes made to this Section by
25  Public Act 98-596 are a clarification of existing law and are

 

 

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1  intended to be retroactive to January 1, 2011 (the effective
2  date of Public Act 96-889), notwithstanding the provisions of
3  Section 1-103.1 of this Code.
4  This Section does not apply to a person who first becomes a
5  noncovered employee under Article 14 on or after the
6  implementation date of the plan created under Section 1-161
7  for that Article, unless that person elects under subsection
8  (b) of Section 1-161 to instead receive the benefits provided
9  under this Section and the applicable provisions of that
10  Article.
11  This Section does not apply to a person who first becomes a
12  member or participant under Article 16 on or after the
13  implementation date of the plan created under Section 1-161
14  for that Article, unless that person elects under subsection
15  (b) of Section 1-161 to instead receive the benefits provided
16  under this Section and the applicable provisions of that
17  Article.
18  This Section does not apply to a person who elects under
19  subsection (c-5) of Section 1-161 to receive the benefits
20  under Section 1-161.
21  This Section does not apply to a person who first becomes a
22  member or participant of an affected pension fund on or after 6
23  months after the resolution or ordinance date, as defined in
24  Section 1-162, unless that person elects under subsection (c)
25  of Section 1-162 to receive the benefits provided under this
26  Section and the applicable provisions of the Article under

 

 

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1  which he or she is a member or participant.
2  This Section does not apply to a person who participates
3  in a defined contribution plan established under Section
4  14-155.5.
5  (b) "Final average salary" means, except as otherwise
6  provided in this subsection, the average monthly (or annual)
7  salary obtained by dividing the total salary or earnings
8  calculated under the Article applicable to the member or
9  participant during the 96 consecutive months (or 8 consecutive
10  years) of service within the last 120 months (or 10 years) of
11  service in which the total salary or earnings calculated under
12  the applicable Article was the highest by the number of months
13  (or years) of service in that period. For the purposes of a
14  person who first becomes a member or participant of any
15  retirement system or pension fund to which this Section
16  applies on or after January 1, 2011, in this Code, "final
17  average salary" shall be substituted for the following:
18  (1) (Blank).
19  (2) In Articles 8, 9, 10, 11, and 12, "highest average
20  annual salary for any 4 consecutive years within the last
21  10 years of service immediately preceding the date of
22  withdrawal".
23  (3) In Article 13, "average final salary".
24  (4) In Article 14, "final average compensation".
25  (5) In Article 17, "average salary".
26  (6) In Section 22-207, "wages or salary received by

 

 

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1  him at the date of retirement or discharge".
2  A member of the Teachers' Retirement System of the State
3  of Illinois who retires on or after June 1, 2021 and for whom
4  the 2020-2021 school year is used in the calculation of the
5  member's final average salary shall use the higher of the
6  following for the purpose of determining the member's final
7  average salary:
8  (A) the amount otherwise calculated under the first
9  paragraph of this subsection; or
10  (B) an amount calculated by the Teachers' Retirement
11  System of the State of Illinois using the average of the
12  monthly (or annual) salary obtained by dividing the total
13  salary or earnings calculated under Article 16 applicable
14  to the member or participant during the 96 months (or 8
15  years) of service within the last 120 months (or 10 years)
16  of service in which the total salary or earnings
17  calculated under the Article was the highest by the number
18  of months (or years) of service in that period.
19  (b-5) Beginning on January 1, 2011, for all purposes under
20  this Code (including without limitation the calculation of
21  benefits and employee contributions), the annual earnings,
22  salary, or wages (based on the plan year) of a member or
23  participant to whom this Section applies shall not exceed
24  $106,800; however, that amount shall annually thereafter be
25  increased by the lesser of (i) 3% of that amount, including all
26  previous adjustments, or (ii) one-half the annual unadjusted

 

 

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1  percentage increase (but not less than zero) in the consumer
2  price index-u for the 12 months ending with the September
3  preceding each November 1, including all previous adjustments.
4  For the purposes of this Section, "consumer price index-u"
5  means the index published by the Bureau of Labor Statistics of
6  the United States Department of Labor that measures the
7  average change in prices of goods and services purchased by
8  all urban consumers, United States city average, all items,
9  1982-84 = 100. The new amount resulting from each annual
10  adjustment shall be determined by the Public Pension Division
11  of the Department of Insurance and made available to the
12  boards of the retirement systems and pension funds by November
13  1 of each year.
14  (c) A member or participant is entitled to a retirement
15  annuity upon written application if he or she has attained age
16  67 (age 65, with respect to service under Article 12 that is
17  subject to this Section, for a member or participant under
18  Article 12 who first becomes a member or participant under
19  Article 12 on or after January 1, 2022 or who makes the
20  election under item (i) of subsection (d-15) of this Section)
21  and has at least 10 years of service credit and is otherwise
22  eligible under the requirements of the applicable Article.
23  A member or participant who has attained age 62 (age 60,
24  with respect to service under Article 12 that is subject to
25  this Section, for a member or participant under Article 12 who
26  first becomes a member or participant under Article 12 on or

 

 

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1  after January 1, 2022 or who makes the election under item (i)
2  of subsection (d-15) of this Section) and has at least 10 years
3  of service credit and is otherwise eligible under the
4  requirements of the applicable Article may elect to receive
5  the lower retirement annuity provided in subsection (d) of
6  this Section.
7  (c-5) A person who first becomes a member or a participant
8  subject to this Section on or after July 6, 2017 (the effective
9  date of Public Act 100-23), notwithstanding any other
10  provision of this Code to the contrary, is entitled to a
11  retirement annuity under Article 8 or Article 11 upon written
12  application if he or she has attained age 65 and has at least
13  10 years of service credit and is otherwise eligible under the
14  requirements of Article 8 or Article 11 of this Code,
15  whichever is applicable.
16  (d) The retirement annuity of a member or participant who
17  is retiring after attaining age 62 (age 60, with respect to
18  service under Article 12 that is subject to this Section, for a
19  member or participant under Article 12 who first becomes a
20  member or participant under Article 12 on or after January 1,
21  2022 or who makes the election under item (i) of subsection
22  (d-15) of this Section) with at least 10 years of service
23  credit shall be reduced by one-half of 1% for each full month
24  that the member's age is under age 67 (age 65, with respect to
25  service under Article 12 that is subject to this Section, for a
26  member or participant under Article 12 who first becomes a

 

 

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1  member or participant under Article 12 on or after January 1,
2  2022 or who makes the election under item (i) of subsection
3  (d-15) of this Section).
4  (d-5) The retirement annuity payable under Article 8 or
5  Article 11 to an eligible person subject to subsection (c-5)
6  of this Section who is retiring at age 60 with at least 10
7  years of service credit shall be reduced by one-half of 1% for
8  each full month that the member's age is under age 65.
9  (d-10) Each person who first became a member or
10  participant under Article 8 or Article 11 of this Code on or
11  after January 1, 2011 and prior to July 6, 2017 (the effective
12  date of Public Act 100-23) shall make an irrevocable election
13  either:
14  (i) to be eligible for the reduced retirement age
15  provided in subsections (c-5) and (d-5) of this Section,
16  the eligibility for which is conditioned upon the member
17  or participant agreeing to the increases in employee
18  contributions for age and service annuities provided in
19  subsection (a-5) of Section 8-174 of this Code (for
20  service under Article 8) or subsection (a-5) of Section
21  11-170 of this Code (for service under Article 11); or
22  (ii) to not agree to item (i) of this subsection
23  (d-10), in which case the member or participant shall
24  continue to be subject to the retirement age provisions in
25  subsections (c) and (d) of this Section and the employee
26  contributions for age and service annuity as provided in

 

 

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1  subsection (a) of Section 8-174 of this Code (for service
2  under Article 8) or subsection (a) of Section 11-170 of
3  this Code (for service under Article 11).
4  The election provided for in this subsection shall be made
5  between October 1, 2017 and November 15, 2017. A person
6  subject to this subsection who makes the required election
7  shall remain bound by that election. A person subject to this
8  subsection who fails for any reason to make the required
9  election within the time specified in this subsection shall be
10  deemed to have made the election under item (ii).
11  (d-15) Each person who first becomes a member or
12  participant under Article 12 on or after January 1, 2011 and
13  prior to January 1, 2022 shall make an irrevocable election
14  either:
15  (i) to be eligible for the reduced retirement age
16  specified in subsections (c) and (d) of this Section, the
17  eligibility for which is conditioned upon the member or
18  participant agreeing to the increase in employee
19  contributions for service annuities specified in
20  subsection (b) of Section 12-150; or
21  (ii) to not agree to item (i) of this subsection
22  (d-15), in which case the member or participant shall not
23  be eligible for the reduced retirement age specified in
24  subsections (c) and (d) of this Section and shall not be
25  subject to the increase in employee contributions for
26  service annuities specified in subsection (b) of Section

 

 

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1  12-150.
2  The election provided for in this subsection shall be made
3  between January 1, 2022 and April 1, 2022. A person subject to
4  this subsection who makes the required election shall remain
5  bound by that election. A person subject to this subsection
6  who fails for any reason to make the required election within
7  the time specified in this subsection shall be deemed to have
8  made the election under item (ii).
9  (e) Any retirement annuity or supplemental annuity shall
10  be subject to annual increases on the January 1 occurring
11  either on or after the attainment of age 67 (age 65, with
12  respect to service under Article 12 that is subject to this
13  Section, for a member or participant under Article 12 who
14  first becomes a member or participant under Article 12 on or
15  after January 1, 2022 or who makes the election under item (i)
16  of subsection (d-15); and beginning on July 6, 2017 (the
17  effective date of Public Act 100-23), age 65 with respect to
18  service under Article 8 or Article 11 for eligible persons
19  who: (i) are subject to subsection (c-5) of this Section; or
20  (ii) made the election under item (i) of subsection (d-10) of
21  this Section) or the first anniversary of the annuity start
22  date, whichever is later. Each annual increase shall be
23  calculated at 3% or one-half the annual unadjusted percentage
24  increase (but not less than zero) in the consumer price
25  index-u for the 12 months ending with the September preceding
26  each November 1, whichever is less, of the originally granted

 

 

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1  retirement annuity. If the annual unadjusted percentage change
2  in the consumer price index-u for the 12 months ending with the
3  September preceding each November 1 is zero or there is a
4  decrease, then the annuity shall not be increased.
5  For the purposes of Section 1-103.1 of this Code, the
6  changes made to this Section by Public Act 102-263 are
7  applicable without regard to whether the employee was in
8  active service on or after August 6, 2021 (the effective date
9  of Public Act 102-263).
10  For the purposes of Section 1-103.1 of this Code, the
11  changes made to this Section by Public Act 100-23 are
12  applicable without regard to whether the employee was in
13  active service on or after July 6, 2017 (the effective date of
14  Public Act 100-23).
15  (f) The initial survivor's or widow's annuity of an
16  otherwise eligible survivor or widow of a retired member or
17  participant who first became a member or participant on or
18  after January 1, 2011 shall be in the amount of 66 2/3% of the
19  retired member's or participant's retirement annuity at the
20  date of death. In the case of the death of a member or
21  participant who has not retired and who first became a member
22  or participant on or after January 1, 2011, eligibility for a
23  survivor's or widow's annuity shall be determined by the
24  applicable Article of this Code. The initial benefit shall be
25  66 2/3% of the earned annuity without a reduction due to age. A
26  child's annuity of an otherwise eligible child shall be in the

 

 

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1  amount prescribed under each Article if applicable. Any
2  survivor's or widow's annuity shall be increased (1) on each
3  January 1 occurring on or after the commencement of the
4  annuity if the deceased member died while receiving a
5  retirement annuity or (2) in other cases, on each January 1
6  occurring after the first anniversary of the commencement of
7  the annuity. Each annual increase shall be calculated at 3% or
8  one-half the annual unadjusted percentage increase (but not
9  less than zero) in the consumer price index-u for the 12 months
10  ending with the September preceding each November 1, whichever
11  is less, of the originally granted survivor's annuity. If the
12  annual unadjusted percentage change in the consumer price
13  index-u for the 12 months ending with the September preceding
14  each November 1 is zero or there is a decrease, then the
15  annuity shall not be increased.
16  (g) The benefits in Section 14-110 apply only if the
17  person is a State policeman, a fire fighter in the fire
18  protection service of a department, a conservation police
19  officer, an investigator for the Secretary of State, an
20  investigator for the Office of the Attorney General, an arson
21  investigator, a Commerce Commission police officer,
22  investigator for the Department of Revenue or the Illinois
23  Gaming Board, a security employee of the Department of
24  Corrections or the Department of Juvenile Justice, or a
25  security employee of the Department of Innovation and
26  Technology, as those terms are defined in subsection (b) and

 

 

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1  subsection (c) of Section 14-110. A person who meets the
2  requirements of this Section is entitled to an annuity
3  calculated under the provisions of Section 14-110, in lieu of
4  the regular or minimum retirement annuity, only if the person
5  has withdrawn from service with not less than 20 years of
6  eligible creditable service and has attained age 60,
7  regardless of whether the attainment of age 60 occurs while
8  the person is still in service.
9  (h) If a person who first becomes a member or a participant
10  of a retirement system or pension fund subject to this Section
11  on or after January 1, 2011 is receiving a retirement annuity
12  or retirement pension under that system or fund and becomes a
13  member or participant under any other system or fund created
14  by this Code and is employed on a full-time basis, except for
15  those members or participants exempted from the provisions of
16  this Section under subsection (a) of this Section, then the
17  person's retirement annuity or retirement pension under that
18  system or fund shall be suspended during that employment. Upon
19  termination of that employment, the person's retirement
20  annuity or retirement pension payments shall resume and be
21  recalculated if recalculation is provided for under the
22  applicable Article of this Code.
23  If a person who first becomes a member of a retirement
24  system or pension fund subject to this Section on or after
25  January 1, 2012 and is receiving a retirement annuity or
26  retirement pension under that system or fund and accepts on a

 

 

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1  contractual basis a position to provide services to a
2  governmental entity from which he or she has retired, then
3  that person's annuity or retirement pension earned as an
4  active employee of the employer shall be suspended during that
5  contractual service. A person receiving an annuity or
6  retirement pension under this Code shall notify the pension
7  fund or retirement system from which he or she is receiving an
8  annuity or retirement pension, as well as his or her
9  contractual employer, of his or her retirement status before
10  accepting contractual employment. A person who fails to submit
11  such notification shall be guilty of a Class A misdemeanor and
12  required to pay a fine of $1,000. Upon termination of that
13  contractual employment, the person's retirement annuity or
14  retirement pension payments shall resume and, if appropriate,
15  be recalculated under the applicable provisions of this Code.
16  (i) (Blank).
17  (j) In the case of a conflict between the provisions of
18  this Section and any other provision of this Code, the
19  provisions of this Section shall control.
20  (Source: P.A. 101-610, eff. 1-1-20; 102-16, eff. 6-17-21;
21  102-210, eff. 1-1-22; 102-263, eff. 8-6-21; 102-956, eff.
22  5-27-22.)
23  (40 ILCS 5/1-161)
24  Sec. 1-161. Optional benefits for certain Tier 2 members
25  under Articles 14, 15, and 16.

 

 

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1  (a) Notwithstanding any other provision of this Code to
2  the contrary, the provisions of this Section apply to a person
3  who first becomes a member or a participant under Article 14,
4  15, or 16 on or after the implementation date under this
5  Section for the applicable Article and who does not make the
6  election under subsection (b) or (c), whichever applies. The
7  provisions of this Section also apply to a person who makes the
8  election under subsection (c-5). However, the provisions of
9  this Section do not apply to any participant in a self-managed
10  plan or a defined contribution plan established under Section
11  14-155.5, nor to a covered employee under Article 14.
12  As used in this Section and Section 1-160, the
13  "implementation date" under this Section means the earliest
14  date upon which the board of a retirement system authorizes
15  members of that system to begin participating in accordance
16  with this Section, as determined by the board of that
17  retirement system. Each of the retirement systems subject to
18  this Section shall endeavor to make such participation
19  available as soon as possible after the effective date of this
20  Section and shall establish an implementation date by board
21  resolution.
22  (b) In lieu of the benefits provided under this Section, a
23  member or participant, except for a participant under Article
24  15, may irrevocably elect the benefits under Section 1-160 and
25  the benefits otherwise applicable to that member or
26  participant. The election must be made within 30 days after

 

 

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1  becoming a member or participant. Each retirement system shall
2  establish procedures for making this election.
3  (c) A participant under Article 15 may irrevocably elect
4  the benefits otherwise provided to a Tier 2 member under
5  Article 15. The election must be made within 30 days after
6  becoming a member. The retirement system under Article 15
7  shall establish procedures for making this election.
8  (c-5) A non-covered participant under Article 14 to whom
9  Section 1-160 applies, a Tier 2 member under Article 15, or a
10  participant under Article 16 to whom Section 1-160 applies may
11  irrevocably elect to receive the benefits under this Section
12  in lieu of the benefits under Section 1-160 or the benefits
13  otherwise available to a Tier 2 member under Article 15,
14  whichever is applicable. Each retirement System shall
15  establish procedures for making this election.
16  (d) "Final average salary" means the average monthly (or
17  annual) salary obtained by dividing the total salary or
18  earnings calculated under the Article applicable to the member
19  or participant during the last 120 months (or 10 years) of
20  service in which the total salary or earnings calculated under
21  the applicable Article was the highest by the number of months
22  (or years) of service in that period. For the purposes of a
23  person to whom this Section applies, in this Code, "final
24  average salary" shall be substituted for "final average
25  compensation" in Article 14.
26  (e) Beginning on the implementation date, for all purposes

 

 

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1  under this Code (including without limitation the calculation
2  of benefits and employee contributions), the annual earnings,
3  salary, compensation, or wages (based on the plan year) of a
4  member or participant to whom this Section applies shall not
5  at any time exceed the federal Social Security Wage Base then
6  in effect.
7  (f) A member or participant is entitled to a retirement
8  annuity upon written application if he or she has attained the
9  normal retirement age determined by the Social Security
10  Administration for that member or participant's year of birth,
11  but no earlier than 67 years of age, and has at least 10 years
12  of service credit and is otherwise eligible under the
13  requirements of the applicable Article.
14  (g) The amount of the retirement annuity to which a member
15  or participant is entitled shall be computed by multiplying
16  1.25% for each year of service credit by his or her final
17  average salary.
18  (h) Any retirement annuity or supplemental annuity shall
19  be subject to annual increases on the first anniversary of the
20  annuity start date. Each annual increase shall be one-half the
21  annual unadjusted percentage increase (but not less than zero)
22  in the consumer price index-w for the 12 months ending with the
23  September preceding each November 1 of the originally granted
24  retirement annuity. If the annual unadjusted percentage change
25  in the consumer price index-w for the 12 months ending with the
26  September preceding each November 1 is zero or there is a

 

 

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1  decrease, then the annuity shall not be increased.
2  For the purposes of this Section, "consumer price index-w"
3  means the index published by the Bureau of Labor Statistics of
4  the United States Department of Labor that measures the
5  average change in prices of goods and services purchased by
6  Urban Wage Earners and Clerical Workers, United States city
7  average, all items, 1982-84 = 100. The new amount resulting
8  from each annual adjustment shall be determined by the Public
9  Pension Division of the Department of Insurance and made
10  available to the boards of the retirement systems and pension
11  funds by November 1 of each year.
12  (i) The initial survivor's or widow's annuity of an
13  otherwise eligible survivor or widow of a retired member or
14  participant to whom this Section applies shall be in the
15  amount of 66 2/3% of the retired member's or participant's
16  retirement annuity at the date of death. In the case of the
17  death of a member or participant who has not retired and to
18  whom this Section applies, eligibility for a survivor's or
19  widow's annuity shall be determined by the applicable Article
20  of this Code. The benefit shall be 66 2/3% of the earned
21  annuity without a reduction due to age. A child's annuity of an
22  otherwise eligible child shall be in the amount prescribed
23  under each Article if applicable.
24  (j) In lieu of any other employee contributions, except
25  for the contribution to the defined contribution plan under
26  subsection (k) of this Section, each employee shall contribute

 

 

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1  6.2% of his her or salary to the retirement system. However,
2  the employee contribution under this subsection shall not
3  exceed the amount of the total normal cost of the benefits for
4  all members making contributions under this Section (except
5  for the defined contribution plan under subsection (k) of this
6  Section), expressed as a percentage of payroll and certified
7  on or before January 15 of each year by the board of trustees
8  of the retirement system. If the board of trustees of the
9  retirement system certifies that the 6.2% employee
10  contribution rate exceeds the normal cost of the benefits
11  under this Section (except for the defined contribution plan
12  under subsection (k) of this Section), then on or before
13  December 1 of that year, the board of trustees shall certify
14  the amount of the normal cost of the benefits under this
15  Section (except for the defined contribution plan under
16  subsection (k) of this Section), expressed as a percentage of
17  payroll, to the State Actuary and the Commission on Government
18  Forecasting and Accountability, and the employee contribution
19  under this subsection shall be reduced to that amount
20  beginning July 1 of that year. Thereafter, if the normal cost
21  of the benefits under this Section (except for the defined
22  contribution plan under subsection (k) of this Section),
23  expressed as a percentage of payroll and certified on or
24  before January 1 of each year by the board of trustees of the
25  retirement system, exceeds 6.2% of salary, then on or before
26  January 15 of that year, the board of trustees shall certify

 

 

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1  the normal cost to the State Actuary and the Commission on
2  Government Forecasting and Accountability, and the employee
3  contributions shall revert back to 6.2% of salary beginning
4  January 1 of the following year.
5  (k) In accordance with each retirement system's
6  implementation date, each retirement system under Article 14,
7  15, or 16 shall prepare and implement a defined contribution
8  plan for members or participants who are subject to this
9  Section. The defined contribution plan developed under this
10  subsection shall be a plan that aggregates employer and
11  employee contributions in individual participant accounts
12  which, after meeting any other requirements, are used for
13  payouts after retirement in accordance with this subsection
14  and any other applicable laws.
15  (1) Each member or participant shall contribute a
16  minimum of 4% of his or her salary to the defined
17  contribution plan.
18  (2) For each participant in the defined contribution
19  plan who has been employed with the same employer for at
20  least one year, employer contributions shall be paid into
21  that participant's accounts at a rate expressed as a
22  percentage of salary. This rate may be set for individual
23  employees, but shall be no higher than 6% of salary and
24  shall be no lower than 2% of salary.
25  (3) Employer contributions shall vest when those
26  contributions are paid into a member's or participant's

 

 

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1  account.
2  (4) The defined contribution plan shall provide a
3  variety of options for investments. These options shall
4  include investments handled by the Illinois State Board of
5  Investment as well as private sector investment options.
6  (5) The defined contribution plan shall provide a
7  variety of options for payouts to retirees and their
8  survivors.
9  (6) To the extent authorized under federal law and as
10  authorized by the retirement system, the defined
11  contribution plan shall allow former participants in the
12  plan to transfer or roll over employee and employer
13  contributions, and the earnings thereon, into other
14  qualified retirement plans.
15  (7) Each retirement system shall reduce the employee
16  contributions credited to the member's defined
17  contribution plan account by an amount determined by that
18  retirement system to cover the cost of offering the
19  benefits under this subsection and any applicable
20  administrative fees.
21  (8) No person shall begin participating in the defined
22  contribution plan until it has attained qualified plan
23  status and received all necessary approvals from the U.S.
24  Internal Revenue Service.
25  (l) In the case of a conflict between the provisions of
26  this Section and any other provision of this Code, the

 

 

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1  provisions of this Section shall control.
2  (Source: P.A. 100-23, eff. 7-6-17.)
3  (40 ILCS 5/14-103.05) (from Ch. 108 1/2, par. 14-103.05)
4  Sec. 14-103.05. Employee.
5  (a) Except as provided in subsection (e), any Any person
6  employed by a Department who receives salary for personal
7  services rendered to the Department on a warrant issued
8  pursuant to a payroll voucher certified by a Department and
9  drawn by the State Comptroller upon the State Treasurer,
10  including an elected official described in subparagraph (d) of
11  Section 14-104, shall become an employee for purpose of
12  membership in the Retirement System on the first day of such
13  employment.
14  A person entering service on or after January 1, 1972 and
15  prior to January 1, 1984 shall become a member as a condition
16  of employment and shall begin making contributions as of the
17  first day of employment.
18  A person entering service on or after January 1, 1984
19  shall, upon completion of 6 months of continuous service which
20  is not interrupted by a break of more than 2 months, become a
21  member as a condition of employment. Contributions shall begin
22  the first of the month after completion of the qualifying
23  period.
24  A person employed by the Chicago Metropolitan Agency for
25  Planning on the effective date of this amendatory Act of the

 

 

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1  95th General Assembly who was a member of this System as an
2  employee of the Chicago Area Transportation Study and makes an
3  election under Section 14-104.13 to participate in this System
4  for his or her employment with the Chicago Metropolitan Agency
5  for Planning.
6  The qualifying period of 6 months of service is not
7  applicable to: (1) a person who has been granted credit for
8  service in a position covered by the State Universities
9  Retirement System, the Teachers' Retirement System of the
10  State of Illinois, the General Assembly Retirement System, or
11  the Judges Retirement System of Illinois unless that service
12  has been forfeited under the laws of those systems; (2) a
13  person entering service on or after July 1, 1991 in a
14  noncovered position; (3) a person to whom Section 14-108.2a or
15  14-108.2b applies; or (4) a person to whom subsection (a-5) of
16  this Section applies.
17  (a-5) Except as provided in subsection (e), a A person
18  entering service on or after December 1, 2010 and before the
19  effective date of this amendatory Act of the 103rd General
20  Assembly shall become a member as a condition of employment
21  and shall begin making contributions as of the first day of
22  employment. A person serving in the qualifying period on
23  December 1, 2010 will become a member on December 1, 2010 and
24  shall begin making contributions as of December 1, 2010.
25  (b) The term "employee" does not include the following:
26  (1) members of the State Legislature, and persons

 

 

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1  electing to become members of the General Assembly
2  Retirement System pursuant to Section 2-105;
3  (2) incumbents of offices normally filled by vote of
4  the people;
5  (3) except as otherwise provided in this Section, any
6  person appointed by the Governor with the advice and
7  consent of the Senate unless that person elects to
8  participate in this system;
9  (3.1) any person serving as a commissioner of an
10  ethics commission created under the State Officials and
11  Employees Ethics Act unless that person elects to
12  participate in this system with respect to that service as
13  a commissioner;
14  (3.2) any person serving as a part-time employee in
15  any of the following positions: Legislative Inspector
16  General, Special Legislative Inspector General, employee
17  of the Office of the Legislative Inspector General,
18  Executive Director of the Legislative Ethics Commission,
19  or staff of the Legislative Ethics Commission, regardless
20  of whether he or she is in active service on or after July
21  8, 2004 (the effective date of Public Act 93-685), unless
22  that person elects to participate in this System with
23  respect to that service; in this item (3.2), a "part-time
24  employee" is a person who is not required to work at least
25  35 hours per week;
26  (3.3) any person who has made an election under

 

 

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1  Section 1-123 and who is serving either as legal counsel
2  in the Office of the Governor or as Chief Deputy Attorney
3  General;
4  (4) except as provided in Section 14-108.2 or
5  14-108.2c, any person who is covered or eligible to be
6  covered by the Teachers' Retirement System of the State of
7  Illinois, the State Universities Retirement System, or the
8  Judges Retirement System of Illinois;
9  (5) an employee of a municipality or any other
10  political subdivision of the State;
11  (6) any person who becomes an employee after June 30,
12  1979 as a public service employment program participant
13  under the Federal Comprehensive Employment and Training
14  Act and whose wages or fringe benefits are paid in whole or
15  in part by funds provided under such Act;
16  (7) enrollees of the Illinois Young Adult Conservation
17  Corps program, administered by the Department of Natural
18  Resources, authorized grantee pursuant to Title VIII of
19  the "Comprehensive Employment and Training Act of 1973",
20  29 USC 993, as now or hereafter amended;
21  (8) enrollees and temporary staff of programs
22  administered by the Department of Natural Resources under
23  the Youth Conservation Corps Act of 1970;
24  (9) any person who is a member of any professional
25  licensing or disciplinary board created under an Act
26  administered by the Department of Professional Regulation

 

 

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1  or a successor agency or created or re-created after the
2  effective date of this amendatory Act of 1997, and who
3  receives per diem compensation rather than a salary,
4  notwithstanding that such per diem compensation is paid by
5  warrant issued pursuant to a payroll voucher; such persons
6  have never been included in the membership of this System,
7  and this amendatory Act of 1987 (P.A. 84-1472) is not
8  intended to effect any change in the status of such
9  persons;
10  (10) any person who is a member of the Illinois Health
11  Care Cost Containment Council, and receives per diem
12  compensation rather than a salary, notwithstanding that
13  such per diem compensation is paid by warrant issued
14  pursuant to a payroll voucher; such persons have never
15  been included in the membership of this System, and this
16  amendatory Act of 1987 is not intended to effect any
17  change in the status of such persons;
18  (11) any person who is a member of the Oil and Gas
19  Board created by Section 1.2 of the Illinois Oil and Gas
20  Act, and receives per diem compensation rather than a
21  salary, notwithstanding that such per diem compensation is
22  paid by warrant issued pursuant to a payroll voucher;
23  (12) a person employed by the State Board of Higher
24  Education in a position with the Illinois Century Network
25  as of June 30, 2004, who remains continuously employed
26  after that date by the Department of Central Management

 

 

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1  Services in a position with the Illinois Century Network
2  and participates in the Article 15 system with respect to
3  that employment;
4  (13) any person who first becomes a member of the
5  Civil Service Commission on or after January 1, 2012;
6  (14) any person, other than the Director of Employment
7  Security, who first becomes a member of the Board of
8  Review of the Department of Employment Security on or
9  after January 1, 2012;
10  (15) any person who first becomes a member of the
11  Civil Service Commission on or after January 1, 2012;
12  (16) any person who first becomes a member of the
13  Illinois Liquor Control Commission on or after January 1,
14  2012;
15  (17) any person who first becomes a member of the
16  Secretary of State Merit Commission on or after January 1,
17  2012;
18  (18) any person who first becomes a member of the
19  Human Rights Commission on or after January 1, 2012 unless
20  he or she is eligible to participate in accordance with
21  subsection (d) of this Section;
22  (19) any person who first becomes a member of the
23  State Mining Board on or after January 1, 2012;
24  (20) any person who first becomes a member of the
25  Property Tax Appeal Board on or after January 1, 2012;
26  (21) any person who first becomes a member of the

 

 

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1  Illinois Racing Board on or after January 1, 2012;
2  (22) any person who first becomes a member of the
3  Illinois State Police Merit Board on or after January 1,
4  2012;
5  (23) any person who first becomes a member of the
6  Illinois State Toll Highway Authority on or after January
7  1, 2012; or
8  (24) any person who first becomes a member of the
9  Illinois State Board of Elections on or after January 1,
10  2012.
11  (c) An individual who represents or is employed as an
12  officer or employee of a statewide labor organization that
13  represents members of this System may participate in the
14  System and shall be deemed an employee, provided that (1) the
15  individual has previously earned creditable service under this
16  Article, (2) the individual files with the System an
17  irrevocable election to become a participant within 6 months
18  after the effective date of this amendatory Act of the 94th
19  General Assembly, and (3) the individual does not receive
20  credit for that employment under any other provisions of this
21  Code. An employee under this subsection (c) is responsible for
22  paying to the System both (i) employee contributions based on
23  the actual compensation received for service with the labor
24  organization and (ii) employer contributions based on the
25  percentage of payroll certified by the board; all or any part
26  of these contributions may be paid on the employee's behalf or

 

 

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1  picked up for tax purposes (if authorized under federal law)
2  by the labor organization.
3  A person who is an employee as defined in this subsection
4  (c) may establish service credit for similar employment prior
5  to becoming an employee under this subsection by paying to the
6  System for that employment the contributions specified in this
7  subsection, plus interest at the effective rate from the date
8  of service to the date of payment. However, credit shall not be
9  granted under this subsection (c) for any such prior
10  employment for which the applicant received credit under any
11  other provision of this Code or during which the applicant was
12  on a leave of absence.
13  (d) A person appointed as a member of the Human Rights
14  Commission on or after June 1, 2019 may elect to participate in
15  the System and shall be deemed an employee. Service and
16  contributions shall begin on the first payroll period
17  immediately following the employee's election to participate
18  in the System.
19  A person who is an employee as described in this
20  subsection (d) may establish service credit for employment as
21  a Human Rights Commissioner that occurred on or after June 1,
22  2019 and before establishing service under this subsection by
23  paying to the System for that employment the contributions
24  specified in paragraph (1) of subsection (a) of Section
25  14-133, plus regular interest from the date of service to the
26  date of payment.

 

 

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1  (e) Notwithstanding any other provision of this Article, a
2  person who first becomes an employee after the effective date
3  of this amendatory Act of the 103rd General Assembly is not
4  required, as a condition of employment or otherwise, to
5  participate in this System. An employee may elect not to
6  participate in this System by notifying the System in a manner
7  specified by the System.
8  (Source: P.A. 101-10, eff. 6-5-19; 102-538, eff. 8-20-21.)
9  (40 ILCS 5/14-103.41)
10  Sec. 14-103.41. Tier 1 member; Tier 2 member; defined
11  contribution plan member. "Tier 1 member": A member of this
12  System who first became a member or participant before January
13  1, 2011 under any reciprocal retirement system or pension fund
14  established under this Code other than a retirement system or
15  pension fund established under Article 2, 3, 4, 5, 6, or 18 of
16  this Code.
17  In the case of a Tier 1 member who elects to participate in
18  the defined contribution plan under Section 14-155.5 of this
19  Code, that Tier 1 member shall be deemed a Tier 1 member only
20  with respect to service performed or established before the
21  effective date of that election.
22  "Tier 2 member": A member of this System who first becomes
23  a member under this Article on or after January 1, 2011 and who
24  is not a Tier 1 member.
25  In the case of a Tier 2 member who elects to participate in

 

 

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1  the defined contribution plan under Section 14-155.5 of this
2  Code, that Tier 2 member shall be deemed a Tier 2 member only
3  with respect to service performed or established before the
4  effective date of that election.
5  "Defined contribution plan member": A Tier 1 or Tier 2
6  member who elects to participate in the defined contribution
7  plan under Section 14-155.5 of this Code, but only with
8  respect to service performed on or after the effective date of
9  that election.
10  (Source: P.A. 100-587, eff. 6-4-18.)
11  (40 ILCS 5/14-152.1)
12  Sec. 14-152.1. Application and expiration of new benefit
13  increases.
14  (a) As used in this Section, "new benefit increase" means
15  an increase in the amount of any benefit provided under this
16  Article, or an expansion of the conditions of eligibility for
17  any benefit under this Article, that results from an amendment
18  to this Code that takes effect after June 1, 2005 (the
19  effective date of Public Act 94-4). "New benefit increase",
20  however, does not include any benefit increase resulting from
21  the changes made to Article 1 or this Article by Public Act
22  96-37, Public Act 100-23, Public Act 100-587, Public Act
23  100-611, Public Act 101-10, Public Act 101-610, Public Act
24  102-210, Public Act 102-856, Public Act 102-956, or this
25  amendatory Act of the 103rd General Assembly or this

 

 

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1  amendatory Act of the 102nd General Assembly.
2  (b) Notwithstanding any other provision of this Code or
3  any subsequent amendment to this Code, every new benefit
4  increase is subject to this Section and shall be deemed to be
5  granted only in conformance with and contingent upon
6  compliance with the provisions of this Section.
7  (c) The Public Act enacting a new benefit increase must
8  identify and provide for payment to the System of additional
9  funding at least sufficient to fund the resulting annual
10  increase in cost to the System as it accrues.
11  Every new benefit increase is contingent upon the General
12  Assembly providing the additional funding required under this
13  subsection. The Commission on Government Forecasting and
14  Accountability shall analyze whether adequate additional
15  funding has been provided for the new benefit increase and
16  shall report its analysis to the Public Pension Division of
17  the Department of Insurance. A new benefit increase created by
18  a Public Act that does not include the additional funding
19  required under this subsection is null and void. If the Public
20  Pension Division determines that the additional funding
21  provided for a new benefit increase under this subsection is
22  or has become inadequate, it may so certify to the Governor and
23  the State Comptroller and, in the absence of corrective action
24  by the General Assembly, the new benefit increase shall expire
25  at the end of the fiscal year in which the certification is
26  made.

 

 

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1  (d) Every new benefit increase shall expire 5 years after
2  its effective date or on such earlier date as may be specified
3  in the language enacting the new benefit increase or provided
4  under subsection (c). This does not prevent the General
5  Assembly from extending or re-creating a new benefit increase
6  by law.
7  (e) Except as otherwise provided in the language creating
8  the new benefit increase, a new benefit increase that expires
9  under this Section continues to apply to persons who applied
10  and qualified for the affected benefit while the new benefit
11  increase was in effect and to the affected beneficiaries and
12  alternate payees of such persons, but does not apply to any
13  other person, including, without limitation, a person who
14  continues in service after the expiration date and did not
15  apply and qualify for the affected benefit while the new
16  benefit increase was in effect.
17  (Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
18  101-610, eff. 1-1-20; 102-210, eff. 7-30-21; 102-856, eff.
19  1-1-23; 102-956, eff. 5-27-22.)
20  (40 ILCS 5/14-155.5 new)
21  Sec. 14-155.5. Defined contribution plan.
22  (a) As used in this Section, "defined benefit plan" means
23  the retirement plan available under this Article to Tier 1 or
24  Tier 2 members who have not made the election authorized under
25  this Section.

 

 

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1  (b) By July 1, 2025, the System shall prepare and
2  implement a defined contribution plan. The defined
3  contribution plan developed under this Section shall be a plan
4  that aggregates State and employee contributions in individual
5  participant accounts that, after meeting any other
6  requirements, are used for payouts after retirement in
7  accordance with this Section and any other applicable laws.
8  (1) Participation in the defined contribution plan for
9  persons who elect to participate shall begin on July 1,
10  2025.
11  (2) A participant in the defined contribution plan
12  shall pay employee contributions at a rate determined by
13  the participant, but not less than 3% of compensation and
14  not more than a percentage of compensation determined by
15  the board in accordance with the requirements of State and
16  federal law.
17  (3) State contributions shall be paid into the
18  accounts of all participants in the defined contribution
19  plan at a uniform rate, expressed as a percentage of
20  compensation and determined for each year. This rate shall
21  be no higher than 7.6% of compensation and shall be no
22  lower than 3% of compensation. The State shall adjust this
23  rate annually.
24  (4) The defined contribution plan shall require 5
25  years of participation in the defined contribution plan
26  before vesting in State contributions. If the participant

 

 

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1  fails to vest in them, the State contributions, and the
2  earnings thereon, shall be forfeited.
3  (5) The defined contribution plan may provide for
4  participants in the plan to be eligible for the defined
5  disability benefits available to other participants under
6  this Article. If it does, the System shall reduce the
7  employee contributions credited to the member's defined
8  contribution plan account by an amount determined by the
9  System to cover the cost of offering such benefits.
10  (6) The defined contribution plan shall provide a
11  variety of options for investments. These options shall
12  include investments handled by the Illinois State Board of
13  Investment as well as private sector investment options.
14  (7) The defined contribution plan shall provide a
15  variety of options for payouts to participants in the
16  defined contribution plan who are no longer active in the
17  System and their survivors.
18  (8) To the extent authorized under federal law and as
19  authorized by the System, the plan shall allow former
20  participants in the plan to transfer or roll over employee
21  and vested State contributions, and the earnings thereon,
22  from the defined contribution plan into other qualified
23  retirement plans.
24  (9) The System shall reduce the employee contributions
25  credited to the member's defined contribution plan account
26  by an amount determined by the System to cover the cost of

 

 

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1  offering these benefits and any applicable administrative
2  fees.
3  (b) Under the defined contribution plan, an active Tier 1
4  or Tier 2 member of this System may elect, in writing, to cease
5  accruing benefits in the defined benefit plan and begin
6  accruing benefits for future service in the defined
7  contribution plan. The election to participate in the defined
8  contribution plan is voluntary and irrevocable and must be
9  made on or before December 31, 2024.
10  (1) Service credit under the defined contribution plan
11  may be used for determining retirement eligibility under
12  the defined benefit plan.
13  (2) On or before December 31, 2023, the System shall
14  notify all active Tier 1 and Tier 2 members who are
15  eligible to participate in the defined contribution plan.
16  The System shall mail information describing the option to
17  join the defined contribution plan to each of these
18  employees to his or her last known address on file with the
19  System. If the employee is not responsive to other means
20  of contact, it is sufficient for the System to publish the
21  details of the option on its website.
22  (3) If a person becomes an active participant of this
23  System on or after January 1, 2024, the System shall
24  notify the participant within one month after he or she
25  became an active participant that he or she is eligible to
26  participate in the defined contribution plan. The notice

 

 

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1  shall be provided in the manner specified in paragraph (2)
2  of this subsection.
3  (4) Upon request for further information describing
4  the option, the System shall provide employees with
5  information from the System before exercising the option
6  to join the plan, including information on the impact to
7  their benefits and service. The individual consultation
8  shall include projections of the member's defined benefits
9  at retirement or earlier termination of service and the
10  value of the member's account at retirement or earlier
11  termination of service. The System shall not provide
12  advice or counseling with respect to whether the employee
13  should exercise the option. The System shall inform Tier 1
14  and Tier 2 members who are eligible to participate in the
15  defined contribution plan that they may also wish to
16  obtain information and counsel relating to their option
17  from any other available source, including but not limited
18  to labor organizations, private counsel, and financial
19  advisors.
20  (c) A Tier 1 or Tier 2 member who elects to participate in
21  the defined contribution plan may irrevocably elect to
22  terminate all participation in the defined benefit plan. Upon
23  that election, the System shall transfer to the member's
24  individual account an amount equal to the amount of
25  contribution refund that the member would be eligible to
26  receive if the member terminated employment on that date and

 

 

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1  elected a refund of contributions, including regular interest
2  for the respective years. The System shall make the transfer
3  as a tax-free transfer in accordance with Internal Revenue
4  Service guidelines, for purposes of funding the amount
5  credited to the member's individual account.
6  (d) In no event shall the System, its staff, its
7  authorized representatives, or the Board be liable for any
8  information given to an employee under this Section. The
9  System may coordinate with the Department of Central
10  Management Services in accordance with this amendatory Act of
11  the 103rd General Assembly to provide information concerning
12  the impact of the defined contribution plan set forth in this
13  Section.
14  (e) Notwithstanding any other provision of this Section,
15  no person shall begin participating in the defined
16  contribution plan until it has attained qualified plan status
17  and received all necessary approvals from the U.S. Internal
18  Revenue Service.
19  (f) The System shall report on its progress under this
20  Section, including the available details of the defined
21  contribution plan and the System's plans for informing
22  eligible Tier 1 and Tier 2 members about the plan, to the
23  Governor and the General Assembly on or before January 15,
24  2025.
25  (g) The Illinois State Board of Investment shall be the
26  plan sponsor for the defined contribution plan established

 

 

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  SB1516 - 100 - LRB103 25722 RPS 52071 b
1  under this Section.
2  (h) The intent of this amendatory Act of the 103rd General
3  Assembly is to ensure that the State's normal cost of
4  participation in the defined contribution plan is similar, and
5  if possible equal, to the State's normal cost of participation
6  in the defined benefit plan, unless a lower State's normal
7  cost is necessary to ensure cost neutrality.
8  (40 ILCS 5/20-121) (from Ch. 108 1/2, par. 20-121)
9  (Text of Section WITHOUT the changes made by P.A. 98-599,
10  which has been held unconstitutional)
11  Sec. 20-121. Calculation of proportional retirement
12  annuities.
13  (a) Upon retirement of the employee, a proportional
14  retirement annuity shall be computed by each participating
15  system in which pension credit has been established on the
16  basis of pension credits under each system. The computation
17  shall be in accordance with the formula or method prescribed
18  by each participating system which is in effect at the date of
19  the employee's latest withdrawal from service covered by any
20  of the systems in which he has pension credits which he elects
21  to have considered under this Article. However, the amount of
22  any retirement annuity payable under the self-managed plan
23  established under Section 15-158.2 of this Code depends solely
24  on the value of the participant's vested account balances and
25  is not subject to any proportional adjustment under this

 

 

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1  Section.
2  (a-5) For persons who participate in a defined
3  contribution plan established under Article 14 of this Code to
4  whom the provisions of this Article apply, the pension credits
5  established under the defined contribution plan may be
6  considered in determining eligibility for or the amount of the
7  defined benefit retirement annuity that is payable by any
8  other participating system.
9  (b) Combined pension credit under all retirement systems
10  subject to this Article shall be considered in determining
11  whether the minimum qualification has been met and the formula
12  or method of computation which shall be applied, except as may
13  be otherwise provided with respect to vesting in State or
14  employer contributions in a defined contribution plan. If a
15  system has a step-rate formula for calculation of the
16  retirement annuity, pension credits covering previous service
17  which have been established under another system shall be
18  considered in determining which range or ranges of the
19  step-rate formula are to be applicable to the employee.
20  (c) Interest on pension credit shall continue to
21  accumulate in accordance with the provisions of the law
22  governing the retirement system in which the same has been
23  established during the time an employee is in the service of
24  another employer, on the assumption such employee, for
25  interest purposes for pension credit, is continuing in the
26  service covered by such retirement system.

 

 

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1  (Source: P.A. 91-887, eff. 7-6-00.)
2  (40 ILCS 5/20-123) (from Ch. 108 1/2, par. 20-123)
3  (Text of Section WITHOUT the changes made by P.A. 98-599,
4  which has been held unconstitutional)
5  Sec. 20-123. Survivor's annuity. The provisions governing
6  a retirement annuity shall be applicable to a survivor's
7  annuity. Appropriate credits shall be established for
8  survivor's annuity purposes in those participating systems
9  which provide survivor's annuities, according to the same
10  conditions and subject to the same limitations and
11  restrictions herein prescribed for a retirement annuity. If a
12  participating system has no survivor's annuity benefit, or if
13  the survivor's annuity benefit under that system is waived,
14  pension credit established in that system shall not be
15  considered in determining eligibility for or the amount of the
16  survivor's annuity which may be payable by any other
17  participating system.
18  For persons who participate in the self-managed plan
19  established under Section 15-158.2 or the portable benefit
20  package established under Section 15-136.4, pension credit
21  established under Article 15 may be considered in determining
22  eligibility for or the amount of the survivor's annuity that
23  is payable by any other participating system, but pension
24  credit established in any other system shall not result in any
25  right to a survivor's annuity under the Article 15 system.

 

 

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  SB1516 - 103 - LRB103 25722 RPS 52071 b
1  For persons who participate in a defined contribution plan
2  established under Article 14 of this Code to whom the
3  provisions of this Article apply, the pension credits
4  established under the defined contribution plan may be
5  considered in determining eligibility for or the amount of the
6  defined benefit survivor's annuity that is payable by any
7  other participating system, but pension credits established in
8  any other system shall not result in any right to or increase
9  in the value of a survivor's annuity under the defined
10  contribution plan, which depends solely on the options chosen
11  and the value of the participant's vested account balances and
12  is not subject to any proportional adjustment under this
13  Section.
14  (Source: P.A. 91-887, eff. 7-6-00.)
15  (40 ILCS 5/20-124) (from Ch. 108 1/2, par. 20-124)
16  (Text of Section WITHOUT the changes made by P.A. 98-599,
17  which has been held unconstitutional)
18  Sec. 20-124. Maximum benefits.
19  (a) In no event shall the combined retirement or survivors
20  annuities exceed the highest annuity which would have been
21  payable by any participating system in which the employee has
22  pension credits, if all of his pension credits had been
23  validated in that system.
24  If the combined annuities should exceed the highest
25  maximum as determined in accordance with this Section, the

 

 

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  SB1516 - 104 - LRB103 25722 RPS 52071 b
1  respective annuities shall be reduced proportionately
2  according to the ratio which the amount of each proportional
3  annuity bears to the aggregate of all such annuities.
4  (b) In the case of a participant in the self-managed plan
5  established under Section 15-158.2 of this Code to whom the
6  provisions of this Article apply:
7  (i) For purposes of calculating the combined
8  retirement annuity and the proportionate reduction, if
9  any, in a retirement annuity other than one payable under
10  the self-managed plan, the amount of the Article 15
11  retirement annuity shall be deemed to be the highest
12  annuity to which the annuitant would have been entitled if
13  he or she had participated in the traditional benefit
14  package as defined in Section 15-103.1 rather than the
15  self-managed plan.
16  (ii) For purposes of calculating the combined
17  survivor's annuity and the proportionate reduction, if
18  any, in a survivor's annuity other than one payable under
19  the self-managed plan, the amount of the Article 15
20  survivor's annuity shall be deemed to be the highest
21  survivor's annuity to which the survivor would have been
22  entitled if the deceased employee had participated in the
23  traditional benefit package as defined in Section 15-103.1
24  rather than the self-managed plan.
25  (iii) Benefits payable under the self-managed plan are
26  not subject to proportionate reduction under this Section.

 

 

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1  (c) In the case of a participant in a defined contribution
2  plan established under Article 14 of this Code to whom the
3  provisions of this Article apply:
4  (i) For purposes of calculating the combined
5  retirement annuity and the proportionate reduction, if
6  any, in a defined benefit retirement annuity, any benefit
7  payable under the defined contribution plan shall not be
8  considered.
9  (ii) For purposes of calculating the combined
10  survivor's annuity and the proportionate reduction, if
11  any, in a defined benefit survivor's annuity, any benefit
12  payable under the defined contribution plan shall not be
13  considered.
14  (iii) Benefits payable under a defined contribution
15  plan established under Article 14 of this Code are not
16  subject to proportionate reduction under this Section.
17  (Source: P.A. 91-887, eff. 7-6-00.)
18  (40 ILCS 5/20-125) (from Ch. 108 1/2, par. 20-125)
19  (Text of Section WITHOUT the changes made by P.A. 98-599,
20  which has been held unconstitutional)
21  Sec. 20-125. Return to employment - suspension of
22  benefits. If a retired employee returns to employment which is
23  covered by a system from which he is receiving a proportional
24  annuity under this Article, his proportional annuity from all
25  participating systems shall be suspended during the period of

 

 

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1  re-employment, except that this suspension does not apply to
2  any distributions payable under the self-managed plan
3  established under Section 15-158.2 of this Code or under a
4  defined contribution plan established under Article 14 of this
5  Code.
6  The provisions of the Article under which such employment
7  would be covered shall govern the determination of whether the
8  employee has returned to employment, and if applicable the
9  exemption of temporary employment or employment not exceeding
10  a specified duration or frequency, for all participating
11  systems from which the retired employee is receiving a
12  proportional annuity under this Article, notwithstanding any
13  contrary provisions in the other Articles governing such
14  systems.
15  (Source: P.A. 91-887, eff. 7-6-00.)
16  Section 99. Effective date. This Act takes effect upon
17  becoming law.

 

 

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