Public Act 103-0464
SB1824 EnrolledLRB103 24922 RPS 51256 b SB1824 Enrolled LRB103 24922 RPS 51256 b
SB1824 Enrolled LRB103 24922 RPS 51256 b
AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by
changing Sections 1-109, 7-105, 7-135, 7-172, and 7-174 as
follows:
(40 ILCS 5/1-109) (from Ch. 108 1/2, par. 1-109)
Sec. 1-109. Duties of fiduciaries. A fiduciary with
respect to a retirement system or pension fund established
under this Code shall discharge his or her duties with respect
to the retirement system or pension fund solely in the
interest of the participants and beneficiaries and:
(a) for the exclusive purpose of:
(1) providing benefits to participants and their
beneficiaries; and
(2) defraying reasonable expenses of administering
the retirement system or pension fund;
(b) with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person
man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character with like aims;
(c) by diversifying the investments of the retirement
SB1824 Enrolled LRB103 24922 RPS 51256 b
system or pension fund so as to minimize the risk of large
losses, unless under the circumstances it is clearly
prudent not to do so; and
(d) in accordance with the provisions of the Article
of this Code governing the retirement system or pension
fund.
(Source: P.A. 102-558, eff. 8-20-21.)
(40 ILCS 5/7-105) (from Ch. 108 1/2, par. 7-105)
Sec. 7-105. "Municipality": A city, village, incorporated
town, county, township; a Financial Oversight Panel
established pursuant to Article 1H of the School Code; and any
school, park, sanitary, road, forest preserve, water, fire
protection, public health, river conservancy, mosquito
abatement, tuberculosis sanitarium, public community college
district, or other local district with general continuous
power to levy taxes on the property within such district; now
existing or hereafter created within the State; and, for the
purposes of providing annuities and benefits to its employees,
the fund itself.
(Source: P.A. 97-429, eff. 8-16-11.)
(40 ILCS 5/7-135) (from Ch. 108 1/2, par. 7-135)
Sec. 7-135. Authorized agents.
(a) Each participating municipality and participating
instrumentality shall appoint an authorized agent who shall
have the powers and duties set forth in this section. In
absence of such appointment, the duties of the authorized
agent shall devolve upon the clerk or secretary of the
municipality or instrumentality, the township supervisor in
the case of a township, and in the case of township school
trustees upon the township school treasurer.
(b) The authorized agent shall have the following powers
and duties:
1. To certify to the fund whether or not a given person
is authorized to participate in the fund;
2. To certify to the fund when a participating
employee is on a leave of absence authorized by the
municipality;
3. To request the proper officer to cause employee
contributions to be withheld from earnings and transmitted
to the fund;
4. To request the proper officer to cause municipality
contributions to be forwarded to the fund promptly;
5. To forward promptly to all participating employees
any communications from the fund for such employees;
6. To forward promptly to the fund all applications,
claims, reports and other communications delivered to him
by participating employees;
7. To perform all duties related to the administration
of this retirement system as requested by the fund and the
governing body of his municipality.
(c) The governing body of each participating municipality
and participating instrumentality may delegate any or all of
the following powers and duties to its authorized agent:
1. To file a petition for nomination of an executive
trustee of the fund.
2. To cast the ballot for election of an executive
trustee of the fund.
If a governing body does not authorize its agent to
perform the powers and duties set forth in this paragraph (c),
they shall be performed by the governing body itself, unless
the governing body by resolution duly certified to the fund
delegates them to some other officer or employee.
(d) The delivery of any communication or document by an
employee or a participating municipality or participating
instrumentality to its authorized agent shall not constitute
delivery to the fund.
(e) All authorized agents appointed on or after the
effective date of this amendatory Act of the 103rd General
Assembly must complete a course of training regarding the
duties and responsibilities of being an authorized agent no
less than 3 months after his or her initial appointment. Such
training must be provided by the Fund and made available
online to all authorized agents no less than quarterly at no
cost to the authorized agent or his or her employer.
(Source: P.A. 97-328, eff. 8-12-11; 97-609, eff. 1-1-12;
98-218, eff. 8-9-13.)
(40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
Sec. 7-172. Contributions by participating municipalities
and participating instrumentalities.
(a) Each participating municipality and each participating
instrumentality shall make payment to the fund as follows:
1. municipality contributions in an amount determined
by applying the municipality contribution rate to each
payment of earnings paid to each of its participating
employees;
2. an amount equal to the employee contributions
provided by paragraph (a) of Section 7-173, whether or not
the employee contributions are withheld as permitted by
that Section;
3. all accounts receivable, together with interest
charged thereon, as provided in Section 7-209, and any
amounts due under subsection (a-5) of Section 7-144;
4. if it has no participating employees with current
earnings, an amount payable which, over a closed period of
20 years for participating municipalities and 10 years for
participating instrumentalities, will amortize, at the
effective rate for that year, any unfunded obligation. The
unfunded obligation shall be computed as provided in
paragraph 2 of subsection (b);
5. if it has fewer than 7 participating employees or a
negative balance in its municipality reserve, the greater
of (A) an amount payable that, over a period of 20 years,
will amortize at the effective rate for that year any
unfunded obligation, computed as provided in paragraph 2
of subsection (b) or (B) the amount required by paragraph
1 of this subsection (a).
(b) A separate municipality contribution rate shall be
determined for each calendar year for all participating
municipalities together with all instrumentalities thereof.
The municipality contribution rate shall be determined for
participating instrumentalities as if they were participating
municipalities. The municipality contribution rate shall be
the sum of the following percentages:
1. The percentage of earnings of all the participating
employees of all participating municipalities and
participating instrumentalities which, if paid over the
entire period of their service, will be sufficient when
combined with all employee contributions available for the
payment of benefits, to provide all annuities for
participating employees, and the $3,000 death benefit
payable under Sections 7-158 and 7-164, such percentage to
be known as the normal cost rate.
2. The percentage of earnings of the participating
employees of each participating municipality and
participating instrumentalities necessary to adjust for
the difference between the present value of all benefits,
excluding temporary and total and permanent disability and
death benefits, to be provided for its participating
employees and the sum of its accumulated municipality
contributions and the accumulated employee contributions
and the present value of expected future employee and
municipality contributions pursuant to subparagraph 1 of
this paragraph (b). This adjustment shall be spread over a
period determined by the Board, not to exceed 30 years for
participating municipalities or 10 years for participating
instrumentalities.
3. The percentage of earnings of the participating
employees of all municipalities and participating
instrumentalities necessary to provide the present value
of all temporary and total and permanent disability
benefits granted during the most recent year for which
information is available.
4. The percentage of earnings of the participating
employees of all participating municipalities and
participating instrumentalities necessary to provide the
present value of the net single sum death benefits
expected to become payable from the reserve established
under Section 7-206 during the year for which this rate is
fixed.
5. The percentage of earnings necessary to meet any
deficiency arising in the Terminated Municipality Reserve.
(c) A separate municipality contribution rate shall be
computed for each participating municipality or participating
instrumentality for its sheriff's law enforcement employees.
A separate municipality contribution rate shall be
computed for the sheriff's law enforcement employees of each
forest preserve district that elects to have such employees.
For the period from January 1, 1986 to December 31, 1986, such
rate shall be the forest preserve district's regular rate plus
2%.
In the event that the Board determines that there is an
actuarial deficiency in the account of any municipality with
respect to a person who has elected to participate in the Fund
under Section 3-109.1 of this Code, the Board may adjust the
municipality's contribution rate so as to make up that
deficiency over such reasonable period of time as the Board
may determine.
(d) The Board may establish a separate municipality
contribution rate for all employees who are program
participants employed under the federal Comprehensive
Employment Training Act by all of the participating
municipalities and instrumentalities. The Board may also
provide that, in lieu of a separate municipality rate for
these employees, a portion of the municipality contributions
for such program participants shall be refunded or an extra
charge assessed so that the amount of municipality
contributions retained or received by the fund for all CETA
program participants shall be an amount equal to that which
would be provided by the separate municipality contribution
rate for all such program participants. Refunds shall be made
to prime sponsors of programs upon submission of a claim
therefor and extra charges shall be assessed to participating
municipalities and instrumentalities. In establishing the
municipality contribution rate as provided in paragraph (b) of
this Section, the use of a separate municipality contribution
rate for program participants or the refund of a portion of the
municipality contributions, as the case may be, may be
considered.
(e) Computations of municipality contribution rates for
the following calendar year shall be made prior to the
beginning of each year, from the information available at the
time the computations are made, and on the assumption that the
employees in each participating municipality or participating
instrumentality at such time will continue in service until
the end of such calendar year at their respective rates of
earnings at such time.
(f) Any municipality which is the recipient of State
allocations representing that municipality's contributions for
retirement annuity purposes on behalf of its employees as
provided in Section 12-21.16 of the Illinois Public Aid Code
shall pay the allocations so received to the Board for such
purpose. Estimates of State allocations to be received during
any taxable year shall be considered in the determination of
the municipality's tax rate for that year under Section 7-171.
If a special tax is levied under Section 7-171, none of the
proceeds may be used to reimburse the municipality for the
amount of State allocations received and paid to the Board.
Any multiple-county or consolidated health department which
receives contributions from a county under Section 11.2 of "An
Act in relation to establishment and maintenance of county and
multiple-county health departments", approved July 9, 1943, as
amended, or distributions under Section 3 of the Department of
Public Health Act, shall use these only for municipality
contributions by the health department.
(g) Municipality contributions for the several purposes
specified shall, for township treasurers and employees in the
offices of the township treasurers who meet the qualifying
conditions for coverage hereunder, be allocated among the
several school districts and parts of school districts
serviced by such treasurers and employees in the proportion
which the amount of school funds of each district or part of a
district handled by the treasurer bears to the total amount of
all school funds handled by the treasurer.
From the funds subject to allocation among districts and
parts of districts pursuant to the School Code, the trustees
shall withhold the proportionate share of the liability for
municipality contributions imposed upon such districts by this
Section, in respect to such township treasurers and employees
and remit the same to the Board.
The municipality contribution rate for an educational
service center shall initially be the same rate for each year
as the regional office of education or school district which
serves as its administrative agent. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
The municipality contribution rate for a public agency,
other than a vocational education cooperative, formed under
the Intergovernmental Cooperation Act shall initially be the
average rate for the municipalities which are parties to the
intergovernmental agreement. When actuarial data become
available, a separate rate shall be established as provided in
subparagraph (i) of this Section.
(h) Each participating municipality and participating
instrumentality shall make the contributions in the amounts
provided in this Section in the manner prescribed from time to
time by the Board and all such contributions shall be
obligations of the respective participating municipalities and
participating instrumentalities to this fund. The failure to
deduct any employee contributions shall not relieve the
participating municipality or participating instrumentality of
its obligation to this fund. Delinquent payments of
contributions due under this Section may, with interest, be
recovered by civil action against the participating
municipalities or participating instrumentalities.
Municipality contributions, other than the amount necessary
for employee contributions, for periods of service by
employees from whose earnings no deductions were made for
employee contributions to the fund, may be charged to the
municipality reserve for the municipality or participating
instrumentality.
(i) Contributions by participating instrumentalities shall
be determined as provided herein except that the percentage
derived under subparagraph 2 of paragraph (b) of this Section,
and the amount payable under subparagraph 4 of paragraph (a)
of this Section, shall be based on an amortization period of 10
years.
(j) Notwithstanding the other provisions of this Section,
the additional unfunded liability accruing as a result of
Public Act 94-712 shall be amortized over a period of 30 years
beginning on January 1 of the second calendar year following
the calendar year in which Public Act 94-712 takes effect,
except that the employer may provide for a longer amortization
period by adopting a resolution or ordinance specifying a
35-year or 40-year period and submitting a certified copy of
the ordinance or resolution to the fund no later than June 1 of
the calendar year following the calendar year in which Public
Act 94-712 takes effect.
(k) If the amount of a participating employee's reported
earnings for any of the 12-month periods used to determine the
final rate of earnings exceeds the employee's 12-month
reported earnings with the same employer for the previous year
by the greater of 6% or 1.5 times the annual increase in the
Consumer Price Index-U, as established by the United States
Department of Labor for the preceding September, the
participating municipality or participating instrumentality
that paid those earnings shall pay to the Fund, in addition to
any other contributions required under this Article, the
present value of the increase in the pension resulting from
the portion of the increase in reported earnings that is in
excess of the greater of 6% or 1.5 times the annual increase in
the Consumer Price Index-U, as determined by the Fund. This
present value shall be computed on the basis of the actuarial
assumptions and tables used in the most recent actuarial
valuation of the Fund that is available at the time of the
computation.
Whenever it determines that a payment is or may be
required under this subsection (k), the fund shall calculate
the amount of the payment and bill the participating
municipality or participating instrumentality for that amount.
The bill shall specify the calculations used to determine the
amount due. If the participating municipality or participating
instrumentality disputes the amount of the bill, it may,
within 30 days after receipt of the bill, apply to the fund in
writing for a recalculation. The application must specify in
detail the grounds of the dispute. Upon receiving a timely
application for recalculation, the fund shall review the
application and, if appropriate, recalculate the amount due.
The participating municipality and participating
instrumentality contributions required under this subsection
(k) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the participating municipality and
participating instrumentality contributions are not paid
within 90 days after receipt of the bill, then interest will be
charged at a rate equal to the fund's annual actuarially
assumed rate of return on investment compounded annually from
the 91st day after receipt of the bill. Payments must be
concluded within 3 years after receipt of the bill by the
participating municipality or participating instrumentality.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from overload or overtime earnings.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude earnings increases
resulting from payments for unused vacation time, but only for
payments for unused vacation time made in the final 3 months of
the final rate of earnings period.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings increases
attributable to standard employment promotions resulting in
increased responsibility and workload.
When assessing payment for any amount due under this
subsection (k), the fund shall exclude reportable earnings
increases resulting from periods where the member was paid
through workers' compensation.
This subsection (k) does not apply to earnings increases
due to amounts paid as required by federal or State law or
court mandate or to earnings increases due to the
participating employee returning to the regular number of
hours worked after having a temporary reduction in the number
of hours worked.
This subsection (k) does not apply to earnings increases
paid to individuals under contracts or collective bargaining
agreements entered into, amended, or renewed before January 1,
2012 (the effective date of Public Act 97-609), earnings
increases paid to members who are 10 years or more from
retirement eligibility, or earnings increases resulting from
an increase in the number of hours required to be worked.
When assessing payment for any amount due under this
subsection (k), the fund shall also exclude earnings
attributable to personnel policies adopted before January 1,
2012 (the effective date of Public Act 97-609) as long as those
policies are not applicable to employees who begin service on
or after January 1, 2012 (the effective date of Public Act
97-609).
The change made to this Section by Public Act 100-139 is a
clarification of existing law and is intended to be
retroactive to January 1, 2012 (the effective date of Public
Act 97-609).
(Source: P.A. 102-849, eff. 5-13-22.)
(40 ILCS 5/7-174) (from Ch. 108 1/2, par. 7-174)
Sec. 7-174. Board created.
(a) A board of 8 members shall constitute a board of
trustees authorized to carry out the provisions of this
Article. Each trustee shall be a participating employee of a
participating municipality or participating instrumentality or
an annuitant of the Fund and no person shall be eligible to
become a trustee after January 1, 1979 who does not have the
minimum service credit in this Fund to qualify for a pension.
(b) The board shall consist of representatives of various
groups as follows:
1. 4 trustees shall be a chief executive officer,
chief finance officer, or other officer, executive or
department head of a participating municipality or
participating instrumentality, and each such trustee shall
be designated as an executive trustee.
2. 3 trustees shall be employees of a participating
municipality or participating instrumentality and each
such trustee shall be designated as an employee trustee. A
person who meets the criteria to be an executive trustee
may not serve as an employee trustee.
3. One trustee shall be an annuitant of the Fund, who
shall be designated the annuitant trustee.
(c) A person elected as a trustee shall qualify as a
trustee, after declaration by the board that he has been duly
elected, upon taking and subscribing to the constitutional
oath of office and filing same in the office of the Fund.
(d) The term of office of each trustee shall begin upon
January 1 of the year following the year in which he is elected
and shall continue for a period of 5 years and until a
successor has been elected and qualified, or until prior
resignation, death, incapacity or disqualification.
(e) Any elected trustee (other than the annuitant trustee)
shall be disqualified immediately upon termination of
employment with all participating municipalities and
instrumentalities thereof or upon any change in status which
removes any such trustee from all employments within the group
he represents. The annuitant trustee shall be disqualified
upon termination of his or her annuity.
(e-5) Notwithstanding any other provision, an elected
trustee shall not be considered disqualified due to
termination of participation under subsection (e) if:
(1) he or she thereafter begins participation with a
different participating employer;
(2) there is no gap in service credit established
under this Article; and
(3) the trustee continues to meet all eligibility
requirements under subsection (b) for the same type of
trustee position.
(f) The trustees shall fill any vacancy in the board by
appointment, for the period until the next election of
trustees, or, if the remaining term is less than 2 years, for
the remainder of the term, and until his successor has been
elected and qualified.
(g) Trustees shall serve without compensation, but shall
be reimbursed for any reasonable expenses incurred in
attending meetings of the board and in performing duties on
behalf of the Fund and for the amount of any earnings withheld
by any employing municipality or participating instrumentality
because of attendance at any board meeting.
(h) Each trustee shall be entitled to one vote on any and
all actions before the board. At least 5 concurring votes
shall be necessary for every decision or action by the board at
any of its meetings. No decision or action shall become
effective unless presented and so approved at a regular or
duly called special meeting of the board.
(Source: P.A. 102-479, eff. 8-20-21.)
Section 99. Effective date. This Act takes effect upon
becoming law, except that the changes to Section 7-135 of the
Illinois Pension Code take effect January 1, 2024.