104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1725 Introduced 2/5/2025, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.140 ILCS 5/5-23840 ILCS 5/6-164 from Ch. 108 1/2, par. 6-16440 ILCS 5/6-22930 ILCS 805/8.49 new Amends the Chicago Police and Chicago Firefighter Articles of the Illinois Pension Code. Provides that the Tier 2 monthly retirement annuity shall be increased on the January 1 occurring either on or after (i) the attainment of age 55 (instead of age 60) or (ii) the first anniversary of the annuity start date, whichever is later. Provides that each annual increase shall be calculated at 3% (instead of 3% or one-half the annual unadjusted percentage increase in the consumer price index-u, whichever is less) of the originally granted retirement annuity. In a provision specifying an annuity reduction factor for each year a retiring Tier 2 policeman or fireman is under the age of 55, provides that the retirement annuity of a policeman or fireman who is retiring after attaining age 50 with 20 or more years of service shall not be reduced. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. LRB104 10677 RPS 20756 b STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1725 Introduced 2/5/2025, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.140 ILCS 5/5-23840 ILCS 5/6-164 from Ch. 108 1/2, par. 6-16440 ILCS 5/6-22930 ILCS 805/8.49 new 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.1 40 ILCS 5/5-238 40 ILCS 5/6-164 from Ch. 108 1/2, par. 6-164 40 ILCS 5/6-229 30 ILCS 805/8.49 new Amends the Chicago Police and Chicago Firefighter Articles of the Illinois Pension Code. Provides that the Tier 2 monthly retirement annuity shall be increased on the January 1 occurring either on or after (i) the attainment of age 55 (instead of age 60) or (ii) the first anniversary of the annuity start date, whichever is later. Provides that each annual increase shall be calculated at 3% (instead of 3% or one-half the annual unadjusted percentage increase in the consumer price index-u, whichever is less) of the originally granted retirement annuity. In a provision specifying an annuity reduction factor for each year a retiring Tier 2 policeman or fireman is under the age of 55, provides that the retirement annuity of a policeman or fireman who is retiring after attaining age 50 with 20 or more years of service shall not be reduced. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. LRB104 10677 RPS 20756 b LRB104 10677 RPS 20756 b STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1725 Introduced 2/5/2025, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.140 ILCS 5/5-23840 ILCS 5/6-164 from Ch. 108 1/2, par. 6-16440 ILCS 5/6-22930 ILCS 805/8.49 new 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.1 40 ILCS 5/5-238 40 ILCS 5/6-164 from Ch. 108 1/2, par. 6-164 40 ILCS 5/6-229 30 ILCS 805/8.49 new 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.1 40 ILCS 5/5-238 40 ILCS 5/6-164 from Ch. 108 1/2, par. 6-164 40 ILCS 5/6-229 30 ILCS 805/8.49 new Amends the Chicago Police and Chicago Firefighter Articles of the Illinois Pension Code. Provides that the Tier 2 monthly retirement annuity shall be increased on the January 1 occurring either on or after (i) the attainment of age 55 (instead of age 60) or (ii) the first anniversary of the annuity start date, whichever is later. Provides that each annual increase shall be calculated at 3% (instead of 3% or one-half the annual unadjusted percentage increase in the consumer price index-u, whichever is less) of the originally granted retirement annuity. In a provision specifying an annuity reduction factor for each year a retiring Tier 2 policeman or fireman is under the age of 55, provides that the retirement annuity of a policeman or fireman who is retiring after attaining age 50 with 20 or more years of service shall not be reduced. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. LRB104 10677 RPS 20756 b LRB104 10677 RPS 20756 b LRB104 10677 RPS 20756 b STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY A BILL FOR SB1725LRB104 10677 RPS 20756 b SB1725 LRB104 10677 RPS 20756 b SB1725 LRB104 10677 RPS 20756 b 1 AN ACT concerning public employee benefits. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Pension Code is amended by 5 changing Sections 5-167.1, 5-238, 6-164, and 6-229 as follows: 6 (40 ILCS 5/5-167.1) (from Ch. 108 1/2, par. 5-167.1) 7 Sec. 5-167.1. Automatic increase in annuity; retirement 8 from service after September 1, 1967. 9 (a) A policeman who retires from service after September 10 1, 1967 with at least 20 years of service credit shall, upon 11 either the first of the month following the first anniversary 12 of his date of retirement if he is age 55 or over on that 13 anniversary date, or upon the first of the month following his 14 attainment of age 55 if it occurs after the first anniversary 15 of his retirement date, have his then fixed and payable 16 monthly annuity increased by 3% and such first fixed annuity 17 as granted at retirement increased by an additional 3% in 18 January of each year thereafter. 19 Any policeman born before January 1, 1945 who qualifies 20 for a minimum annuity and retires after September 1, 1967 but 21 has not received the initial increase under this subsection 22 before January 1, 1996 is entitled to receive the initial 23 increase under this subsection on (1) January 1, 1996, (2) the 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1725 Introduced 2/5/2025, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED: 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.140 ILCS 5/5-23840 ILCS 5/6-164 from Ch. 108 1/2, par. 6-16440 ILCS 5/6-22930 ILCS 805/8.49 new 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.1 40 ILCS 5/5-238 40 ILCS 5/6-164 from Ch. 108 1/2, par. 6-164 40 ILCS 5/6-229 30 ILCS 805/8.49 new 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.1 40 ILCS 5/5-238 40 ILCS 5/6-164 from Ch. 108 1/2, par. 6-164 40 ILCS 5/6-229 30 ILCS 805/8.49 new Amends the Chicago Police and Chicago Firefighter Articles of the Illinois Pension Code. Provides that the Tier 2 monthly retirement annuity shall be increased on the January 1 occurring either on or after (i) the attainment of age 55 (instead of age 60) or (ii) the first anniversary of the annuity start date, whichever is later. Provides that each annual increase shall be calculated at 3% (instead of 3% or one-half the annual unadjusted percentage increase in the consumer price index-u, whichever is less) of the originally granted retirement annuity. In a provision specifying an annuity reduction factor for each year a retiring Tier 2 policeman or fireman is under the age of 55, provides that the retirement annuity of a policeman or fireman who is retiring after attaining age 50 with 20 or more years of service shall not be reduced. Makes a conforming change. Amends the State Mandates Act to require implementation without reimbursement. LRB104 10677 RPS 20756 b LRB104 10677 RPS 20756 b LRB104 10677 RPS 20756 b STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY A BILL FOR 40 ILCS 5/5-167.1 from Ch. 108 1/2, par. 5-167.1 40 ILCS 5/5-238 40 ILCS 5/6-164 from Ch. 108 1/2, par. 6-164 40 ILCS 5/6-229 30 ILCS 805/8.49 new LRB104 10677 RPS 20756 b STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY SB1725 LRB104 10677 RPS 20756 b SB1725- 2 -LRB104 10677 RPS 20756 b SB1725 - 2 - LRB104 10677 RPS 20756 b SB1725 - 2 - LRB104 10677 RPS 20756 b 1 first anniversary of the date of retirement, or (3) attainment 2 of age 55, whichever occurs last. The changes to this Section 3 made by Public Act 89-12 apply beginning January 1, 1996 and 4 without regard to whether the policeman or annuitant 5 terminated service before the effective date of that Act. 6 Any policeman born before January 1, 1950 who qualifies 7 for a minimum annuity and retires after September 1, 1967 but 8 has not received the initial increase under this subsection 9 before January 1, 2000 is entitled to receive the initial 10 increase under this subsection on (1) January 1, 2000, (2) the 11 first anniversary of the date of retirement, or (3) attainment 12 of age 55, whichever occurs last. The changes to this Section 13 made by this amendatory Act of the 92nd General Assembly apply 14 without regard to whether the policeman or annuitant 15 terminated service before the effective date of this 16 amendatory Act. 17 Any policeman born before January 1, 1955 who qualifies 18 for a minimum annuity and retires after September 1, 1967 but 19 has not received the initial increase under this subsection 20 before January 1, 2005 is entitled to receive the initial 21 increase under this subsection on (1) January 1, 2005, (2) the 22 first anniversary of the date of retirement, or (3) attainment 23 of age 55, whichever occurs last. The changes to this Section 24 made by this amendatory Act of the 94th General Assembly apply 25 without regard to whether the policeman or annuitant 26 terminated service before the effective date of this SB1725 - 2 - LRB104 10677 RPS 20756 b SB1725- 3 -LRB104 10677 RPS 20756 b SB1725 - 3 - LRB104 10677 RPS 20756 b SB1725 - 3 - LRB104 10677 RPS 20756 b 1 amendatory Act. 2 Any policeman born before January 1, 1966 who qualifies 3 for a minimum annuity and retires after September 1, 1967 but 4 has not received the initial increase under this subsection 5 before January 1, 2017 is entitled to receive an initial 6 increase under this subsection on (1) January 1, 2017, (2) the 7 first anniversary of the date of retirement, or (3) attainment 8 of age 55, whichever occurs last, in an amount equal to 3% for 9 each complete year following the date of retirement or 10 attainment of age 55, whichever occurs later. The changes to 11 this subsection made by this amendatory Act of the 99th 12 General Assembly apply without regard to whether the policeman 13 or annuitant terminated service before the effective date of 14 this amendatory Act. 15 Any policeman born on or after January 1, 1966 who 16 qualifies for a minimum annuity and retires after September 1, 17 1967 but has not received the initial increase under this 18 subsection before January 1, 2023 is entitled to receive the 19 initial increase under this subsection on (1) January 1, 2023, 20 (2) the first anniversary of the date of retirement, or (3) 21 attainment of age 55, whichever occurs last. The changes to 22 this Section made by this amendatory Act of the 103rd General 23 Assembly apply without regard to whether the policeman or 24 annuitant terminated service before the effective date of this 25 amendatory Act of the 103rd General Assembly. 26 (b) Subsection (a) of this Section is not applicable to an SB1725 - 3 - LRB104 10677 RPS 20756 b SB1725- 4 -LRB104 10677 RPS 20756 b SB1725 - 4 - LRB104 10677 RPS 20756 b SB1725 - 4 - LRB104 10677 RPS 20756 b 1 employee receiving a term annuity. 2 (c) To help defray the cost of such increases in annuity, 3 there shall be deducted, beginning September 1, 1967, from 4 each payment of salary to a policeman, 1/2 of 1% of each salary 5 payment concurrently with and in addition to the salary 6 deductions otherwise made for annuity purposes. 7 The city, in addition to the contributions otherwise made 8 by it for annuity purposes under other provisions of this 9 Article, shall make matching contributions concurrently with 10 such salary deductions. 11 Each such 1/2 of 1% deduction from salary and each such 12 contribution by the city of 1/2 of 1% of salary shall be 13 credited to the Automatic Increase Reserve, to be used to 14 defray the cost of the annuity increase provided by this 15 Section. Any balance in such reserve as of the beginning of 16 each calendar year shall be credited with interest at the rate 17 of 3% per annum. 18 Such deductions from salary and city contributions shall 19 continue while the policeman is in service. 20 The salary deductions provided in this Section are not 21 subject to refund, except to the policeman himself, in any 22 case in which: (i) the policeman withdraws prior to 23 qualification for minimum annuity or Tier 2 monthly retirement 24 annuity and applies for refund, (ii) the policeman applies for 25 an annuity of a type that is not subject to annual increases 26 under this Section, or (iii) a term annuity becomes payable. SB1725 - 4 - LRB104 10677 RPS 20756 b SB1725- 5 -LRB104 10677 RPS 20756 b SB1725 - 5 - LRB104 10677 RPS 20756 b SB1725 - 5 - LRB104 10677 RPS 20756 b 1 In such cases, the total of such salary deductions shall be 2 refunded to the policeman, without interest, and charged to 3 the Automatic Increase Reserve. 4 (d) Notwithstanding any other provision of this Article, 5 the Tier 2 monthly retirement annuity of a person who first 6 becomes a policeman under this Article on or after the 7 effective date of this amendatory Act of the 97th General 8 Assembly shall be increased on the January 1 occurring either 9 on or after (i) the attainment of age 55 60 or (ii) the first 10 anniversary of the annuity start date, whichever is later. 11 Each annual increase shall be calculated at 3% or one-half the 12 annual unadjusted percentage increase (but not less than zero) 13 in the consumer price index-u for the 12 months ending with the 14 September preceding each November 1, whichever is less, of the 15 originally granted retirement annuity. If the annual 16 unadjusted percentage change in the consumer price index-u for 17 a 12-month period ending in September is zero or, when 18 compared with the preceding period, decreases, then the 19 annuity shall not be increased. 20 For the purposes of this subsection (d), "consumer price 21 index-u" means the index published by the Bureau of Labor 22 Statistics of the United States Department of Labor that 23 measures the average change in prices of goods and services 24 purchased by all urban consumers, United States city average, 25 all items, 1982-84 = 100. The new amount resulting from each 26 annual adjustment shall be determined by the Public Pension SB1725 - 5 - LRB104 10677 RPS 20756 b SB1725- 6 -LRB104 10677 RPS 20756 b SB1725 - 6 - LRB104 10677 RPS 20756 b SB1725 - 6 - LRB104 10677 RPS 20756 b 1 Division of the Department of Insurance and made available to 2 the boards of the pension funds by November 1 of each year. 3 (Source: P.A. 103-582, eff. 12-8-23.) 4 (40 ILCS 5/5-238) 5 Sec. 5-238. Provisions applicable to new hires; Tier 2. 6 (a) Notwithstanding any other provision of this Article, 7 the provisions of this Section apply to a person who first 8 becomes a policeman under this Article on or after January 1, 9 2011, and to certain qualified survivors of such a policeman. 10 Such persons, and the benefits and restrictions that apply 11 specifically to them under this Article, may be referred to as 12 "Tier 2". 13 (b) A policeman who has withdrawn from service, has 14 attained age 50 or more, and has 10 or more years, but less 15 than 20 years, of service in that capacity shall be entitled, 16 upon proper application being received by the Fund, to receive 17 a Tier 2 monthly retirement annuity for his service as a police 18 officer. The Tier 2 monthly retirement annuity shall be 19 computed by multiplying 2.5% for each year of such service by 20 his or her final average salary, subject to an annuity 21 reduction factor of one-half of 1% for each month that the 22 police officer's age at retirement is under age 55. The Tier 2 23 monthly retirement annuity of a policeman who is retiring 24 after attaining age 50 with 20 or more years of creditable 25 service shall not be reduced. The Tier 2 monthly retirement SB1725 - 6 - LRB104 10677 RPS 20756 b SB1725- 7 -LRB104 10677 RPS 20756 b SB1725 - 7 - LRB104 10677 RPS 20756 b SB1725 - 7 - LRB104 10677 RPS 20756 b 1 annuity is in lieu of any age and service annuity or other form 2 of retirement annuity under this Article. 3 The maximum retirement annuity under this subsection (b) 4 shall be 75% of final average salary. 5 For the purposes of this subsection (b), "final average 6 salary" means the average monthly salary obtained by dividing 7 the total salary of the policeman during the 96 consecutive 8 months of service within the last 120 months of service in 9 which the total salary was the highest by the number of months 10 of service in that period. 11 Beginning on January 1, 2011, for all purposes under this 12 Code (including without limitation the calculation of benefits 13 and employee contributions), the annual salary based on the 14 plan year of a member or participant to whom this Section 15 applies shall not exceed $106,800; however, that amount shall 16 annually thereafter be increased by the lesser of (i) 3% of 17 that amount, including all previous adjustments, or (ii) 18 one-half the annual unadjusted percentage increase (but not 19 less than zero) in the consumer price index-u for the 12 months 20 ending with the September preceding each November 1, including 21 all previous adjustments. 22 (c) Notwithstanding any other provision of this Article, 23 for a person who first becomes a policeman under this Article 24 on or after January 1, 2011, eligibility for and the amount of 25 the annuity to which the qualified surviving spouse, children, 26 and parents are entitled under this subsection (c) shall be SB1725 - 7 - LRB104 10677 RPS 20756 b SB1725- 8 -LRB104 10677 RPS 20756 b SB1725 - 8 - LRB104 10677 RPS 20756 b SB1725 - 8 - LRB104 10677 RPS 20756 b 1 determined as follows: 2 (1) The surviving spouse of a deceased policeman to 3 whom this Section applies shall be deemed qualified to 4 receive a Tier 2 surviving spouse's annuity under this 5 paragraph (1) if: (i) the deceased policeman meets the 6 requirements specified under subdivision (A), (B), (C), or 7 (D) of this paragraph (1); and (ii) the surviving spouse 8 would not otherwise be excluded from receiving a widow's 9 annuity under the eligibility requirements for a widow's 10 annuity set forth in Section 5-146. The Tier 2 surviving 11 spouse's annuity is in lieu of the widow's annuity 12 determined under any other Section of this Article and is 13 subject to the requirements of Section 5-147.1. 14 As used in this subsection (c), "earned annuity" means 15 a Tier 2 monthly retirement annuity determined under 16 subsection (b) of this Section, including any increases 17 the policeman had received pursuant to Section 5-167.1. 18 (A) If the deceased policeman was receiving an 19 earned annuity at the date of his or her death, the 20 Tier 2 surviving spouse's annuity under this paragraph 21 (1) shall be in the amount of 66 2/3% of the 22 policeman's earned annuity at the date of death. 23 (B) If the deceased policeman was not receiving an 24 earned annuity but had at least 10 years of service at 25 the time of death, the Tier 2 surviving spouse's 26 annuity under this paragraph (1) shall be the greater SB1725 - 8 - LRB104 10677 RPS 20756 b SB1725- 9 -LRB104 10677 RPS 20756 b SB1725 - 9 - LRB104 10677 RPS 20756 b SB1725 - 9 - LRB104 10677 RPS 20756 b 1 of: (i) 30% of the annual maximum salary attached to 2 the classified civil service position of a first class 3 patrolman at the time of his death; or (ii) 66 2/3% of 4 the Tier 2 monthly retirement annuity that the 5 deceased policeman would have been eligible to receive 6 under subsection (b) of this Section, based upon the 7 actual service accrued through the day before the 8 policeman's death, but determined as though the 9 policeman was at least age 55 on the day before his or 10 her death and retired on that day. 11 (C) If the deceased policeman was an active 12 policeman with at least 1 1/2 but less than 10 years of 13 service at the time of death, the Tier 2 surviving 14 spouse's annuity under this paragraph (1) shall be in 15 the amount of 30% of the annual maximum salary 16 attached to the classified civil service position of a 17 first class patrolman at the time of his death. 18 (D) If the performance of an act or acts of duty 19 results directly in the death of a policeman subject 20 to this Section, or prevents him from subsequently 21 resuming active service in the police department, and 22 if the policeman's Tier 2 surviving spouse would 23 otherwise meet the eligibility requirements for a 24 compensation annuity or supplemental annuity granted 25 under Section 5-144, then in addition to the Tier 2 26 surviving spouse's annuity provided under subdivision SB1725 - 9 - LRB104 10677 RPS 20756 b SB1725- 10 -LRB104 10677 RPS 20756 b SB1725 - 10 - LRB104 10677 RPS 20756 b SB1725 - 10 - LRB104 10677 RPS 20756 b 1 (A), (B), or (C) of this paragraph (1), whichever 2 applies, the Tier 2 surviving spouse shall be 3 qualified to receive compensation annuity or 4 supplemental annuity, as would be provided under 5 Section 5-144, in order to bring the total benefit up 6 to the applicable 75% salary limitation provided in 7 that Section, but subject to the Tier 2 salary cap 8 provided under subsection (b) of this Section; except 9 that no such annuity shall be paid to the surviving 10 spouse of a policeman who dies while in receipt of 11 disability benefits when the policeman's death was 12 caused by an intervening illness or injury unrelated 13 to the illness or injury that had prevented him from 14 subsequently resuming active service in the police 15 department. 16 (E) Notwithstanding any other provision of this 17 Article, the monthly Tier 2 surviving spouse's annuity 18 under subdivision (A) or (B) of this paragraph (1) 19 shall be increased on the January 1 next occurring 20 after (i) attainment of age 60 by the recipient of the 21 Tier 2 surviving spouse's annuity or (ii) the first 22 anniversary of the Tier 2 surviving spouse's annuity 23 start date, whichever is later, and on each January 1 24 thereafter, by 3% or one-half the annual unadjusted 25 percentage increase (but not less than zero) in the 26 consumer price index-u for the 12 months ending with SB1725 - 10 - LRB104 10677 RPS 20756 b SB1725- 11 -LRB104 10677 RPS 20756 b SB1725 - 11 - LRB104 10677 RPS 20756 b SB1725 - 11 - LRB104 10677 RPS 20756 b 1 the September preceding each November 1, whichever is 2 less, of the originally granted Tier 2 surviving 3 spouse's annuity. If the unadjusted percentage change 4 in the consumer price index-u for a 12-month period 5 ending in September is zero or, when compared with the 6 preceding period, decreases, then the annuity shall 7 not be increased. 8 For the purposes of this Section, "consumer price 9 index-u" means the index published by the Bureau of 10 Labor Statistics of the United States Department of 11 Labor that measures the average change in prices of 12 goods and services purchased by all urban consumers, 13 United States city average, all items, 1982-84 = 100. 14 The new amount resulting from each annual adjustment 15 shall be determined by the Public Pension Division of 16 the Department of Insurance and made available to the 17 boards of the pension funds. 18 (F) Notwithstanding the other provisions of this 19 paragraph (1), for a qualified surviving spouse who is 20 entitled to a Tier 2 surviving spouse's annuity under 21 subdivision (A), (B), (C), or (D) of this paragraph 22 (1), that Tier 2 surviving spouse's annuity shall not 23 be less than the amount of the minimum widow's annuity 24 established from time to time under Section 5-167.4. 25 (2) Surviving children of a deceased policeman subject 26 to this Section who would otherwise meet the eligibility SB1725 - 11 - LRB104 10677 RPS 20756 b SB1725- 12 -LRB104 10677 RPS 20756 b SB1725 - 12 - LRB104 10677 RPS 20756 b SB1725 - 12 - LRB104 10677 RPS 20756 b 1 requirements for a child's annuity set forth in Sections 2 5-151 and 5-152 shall be deemed qualified to receive a 3 Tier 2 child's annuity under this subsection (c), which 4 shall be in lieu of, but in the same amount and paid in the 5 same manner as, the child's annuity provided under those 6 Sections; except that any salary used for computing a Tier 7 2 child's annuity shall be subject to the Tier 2 salary cap 8 provided under subsection (b) of this Section. For 9 purposes of determining any pro rata reduction in child's 10 annuities under this subsection (c), references in Section 11 5-152 to the combined annuities of the family shall be 12 deemed to refer to the combined Tier 2 surviving spouse's 13 annuity, if any, and the Tier 2 child's annuities payable 14 under this subsection (c). 15 (3) Surviving parents of a deceased policeman subject 16 to this Section who would otherwise meet the eligibility 17 requirements for a parent's annuity set forth in Section 18 5-152 shall be deemed qualified to receive a Tier 2 19 parent's annuity under this subsection (c), which shall be 20 in lieu of, but in the same amount and paid in the same 21 manner as, the parent's annuity provided under Section 22 5-152.1; except that any salary used for computing a Tier 23 2 parent's annuity shall be subject to the Tier 2 salary 24 cap provided under subsection (b) of this Section. For the 25 purposes of this Section, a reference to "annuity" in 26 Section 5-152.1 includes: (i) in the context of a widow, a SB1725 - 12 - LRB104 10677 RPS 20756 b SB1725- 13 -LRB104 10677 RPS 20756 b SB1725 - 13 - LRB104 10677 RPS 20756 b SB1725 - 13 - LRB104 10677 RPS 20756 b 1 Tier 2 surviving spouse's annuity and (ii) in the context 2 of a child, a Tier 2 child's annuity. 3 (d) The General Assembly finds and declares that the 4 provisions of this Section, as enacted by Public Act 96-1495, 5 require clarification relating to necessary eligibility 6 standards and the manner of determining and paying the 7 intended Tier 2 benefits and contributions in order to enable 8 the Fund to unambiguously implement and administer benefits 9 for Tier 2 members. The changes to this Section and the 10 conforming changes to Sections 5-153, 5-155, 5-163, 5-167.1 11 (except for the changes to subsection (a) of that Section), 12 5-169, and 5-170 made by this amendatory Act of the 99th 13 General Assembly are enacted to clarify the provisions of this 14 Section as enacted by Public Act 96-1495, and are hereby 15 declared to represent and be consistent with the original and 16 continuing intent of this Section and Public Act 96-1495. 17 (e) The changes to Sections 5-153, 5-155, 5-163, 5-167.1 18 (except for the changes to subsection (a) of that Section), 19 5-169, and 5-170 made by this amendatory Act of the 99th 20 General Assembly are intended to be retroactive to January 1, 21 2011 (the effective date of Public Act 96-1495) and, for the 22 purposes of Section 1-103.1 of this Code, they apply without 23 regard to whether the relevant policeman was in service on or 24 after the effective date of this amendatory Act of the 99th 25 General Assembly. 26 (Source: P.A. 99-905, eff. 11-29-16.) SB1725 - 13 - LRB104 10677 RPS 20756 b SB1725- 14 -LRB104 10677 RPS 20756 b SB1725 - 14 - LRB104 10677 RPS 20756 b SB1725 - 14 - LRB104 10677 RPS 20756 b 1 (40 ILCS 5/6-164) (from Ch. 108 1/2, par. 6-164) 2 Sec. 6-164. Automatic annual increase; retirement after 3 September 1, 1959. 4 (a) A fireman qualifying for a minimum annuity who retires 5 from service after September 1, 1959 shall, upon either the 6 first of the month following the first anniversary of his date 7 of retirement if he is age 55 or over on that anniversary date, 8 or upon the first of the month following his attainment of age 9 55 if that occurs after the first anniversary of his 10 retirement date, have his then fixed and payable monthly 11 annuity increased by 1 1/2%, and such first fixed annuity as 12 granted at retirement increased by an additional 1 1/2% in 13 January of each year thereafter up to a maximum increase of 14 30%. Beginning July 1, 1982 for firemen born before January 1, 15 1930, and beginning January 1, 1990 for firemen born after 16 December 31, 1929 and before January 1, 1940, and beginning 17 January 1, 1996 for firemen born after December 31, 1939 but 18 before January 1, 1945, and beginning January 1, 2004, for 19 firemen born after December 31, 1944 but before January 1, 20 1955, and beginning January 1, 2017, for firemen born after 21 December 31, 1954, such increases shall be 3% and such firemen 22 shall not be subject to the 30% maximum increase. 23 Any fireman born before January 1, 1945 who qualifies for 24 a minimum annuity and retires after September 1, 1967 but has 25 not received the initial increase under this subsection before SB1725 - 14 - LRB104 10677 RPS 20756 b SB1725- 15 -LRB104 10677 RPS 20756 b SB1725 - 15 - LRB104 10677 RPS 20756 b SB1725 - 15 - LRB104 10677 RPS 20756 b 1 January 1, 1996 is entitled to receive the initial increase 2 under this subsection on (1) January 1, 1996, (2) the first 3 anniversary of the date of retirement, or (3) attainment of 4 age 55, whichever occurs last. The changes to this Section 5 made by this amendatory Act of 1995 apply beginning January 1, 6 1996 and apply without regard to whether the fireman or 7 annuitant terminated service before the effective date of this 8 amendatory Act of 1995. 9 Any fireman born before January 1, 1955 who qualifies for 10 a minimum annuity and retires after September 1, 1967 but has 11 not received the initial increase under this subsection before 12 January 1, 2004 is entitled to receive the initial increase 13 under this subsection on (1) January 1, 2004, (2) the first 14 anniversary of the date of retirement, or (3) attainment of 15 age 55, whichever occurs last. The changes to this Section 16 made by this amendatory Act of the 93rd General Assembly apply 17 without regard to whether the fireman or annuitant terminated 18 service before the effective date of this amendatory Act. 19 Any fireman born after December 31, 1954 but before 20 January 1, 1966 who qualifies for a minimum annuity and 21 retires after September 1, 1967 is entitled to receive an 22 increase under this subsection on (1) January 1, 2017, (2) the 23 first anniversary of the date of retirement, or (3) attainment 24 of age 55, whichever occurs last, in an amount equal to an 25 increase of 3% of his then fixed and payable monthly annuity 26 upon the first of the month following the first anniversary of SB1725 - 15 - LRB104 10677 RPS 20756 b SB1725- 16 -LRB104 10677 RPS 20756 b SB1725 - 16 - LRB104 10677 RPS 20756 b SB1725 - 16 - LRB104 10677 RPS 20756 b 1 his date of retirement if he is age 55 or over on that 2 anniversary date or upon the first of the month following his 3 attainment of age 55 if that date occurs after the first 4 anniversary of his retirement date and such first fixed 5 annuity as granted at retirement shall be increased by an 6 additional 3% in January of each year thereafter. In the case 7 of a fireman born after December 31, 1954 but before January 1, 8 1966 who received an increase in any year of 1.5%, that fireman 9 shall receive an increase for any such year so that the total 10 increase is equal to 3% for each year the fireman would have 11 been otherwise eligible had the fireman not received any 12 increase. The changes to this subsection made by this 13 amendatory Act of the 99th General Assembly apply without 14 regard to whether the fireman or annuitant terminated service 15 before the effective date of this amendatory Act. The changes 16 to this subsection made by this amendatory Act of the 100th 17 General Assembly are a declaration of existing law and shall 18 not be construed as a new enactment. 19 Any fireman who qualifies for a minimum annuity and 20 retires after September 1, 1967 is entitled to receive an 21 increase under this subsection on (1) January 1, 2020, (2) the 22 first anniversary of the date of retirement, or (3) attainment 23 of age 55, whichever occurs last, in an amount equal to an 24 increase of 3% of his or her then fixed and payable monthly 25 annuity upon the first of the month following the first 26 anniversary of his or her date of retirement if he or she is SB1725 - 16 - LRB104 10677 RPS 20756 b SB1725- 17 -LRB104 10677 RPS 20756 b SB1725 - 17 - LRB104 10677 RPS 20756 b SB1725 - 17 - LRB104 10677 RPS 20756 b 1 age 55 or over on that anniversary date or upon the first of 2 the month following his or her attainment of age 55 if that 3 date occurs after the first anniversary of his or her 4 retirement date and such first fixed annuity as granted at 5 retirement shall be increased by an additional 3% in January 6 of each year thereafter. In the case of a fireman who received 7 an increase in any year of 1.5%, that fireman shall receive an 8 increase for any such year so that the total increase is equal 9 to 3% for each year the fireman would have been otherwise 10 eligible had the fireman not received any increase. The 11 changes to this subsection made by this amendatory Act of the 12 101st General Assembly apply without regard to whether the 13 fireman or annuitant terminated service before the effective 14 date of this amendatory Act of the 101st General Assembly. 15 (b) Subsection (a) of this Section is not applicable to an 16 employee receiving a term annuity. 17 (c) To help defray the cost of such increases in annuity, 18 there shall be deducted, beginning September 1, 1959, from 19 each payment of salary to a fireman, 1/8 of 1% of each such 20 salary payment and an additional 1/8 of 1% beginning on 21 September 1, 1961, and September 1, 1963, respectively, 22 concurrently with and in addition to the salary deductions 23 otherwise made for annuity purposes. 24 Each such additional 1/8 of 1% deduction from salary which 25 shall, on September 1, 1963, result in a total increase of 3/8 26 of 1% of salary, shall be credited to the Automatic Increase SB1725 - 17 - LRB104 10677 RPS 20756 b SB1725- 18 -LRB104 10677 RPS 20756 b SB1725 - 18 - LRB104 10677 RPS 20756 b SB1725 - 18 - LRB104 10677 RPS 20756 b 1 Reserve, to be used, together with city contributions as 2 provided in this Article, to defray the cost of the annuity 3 increments specified in this Section. Any balance in such 4 reserve as of the beginning of each calendar year shall be 5 credited with interest at the rate of 3% per annum. 6 The salary deductions provided in this Section are not 7 subject to refund, except to the fireman himself in any case in 8 which: (i) the fireman withdraws prior to qualification for 9 minimum annuity or Tier 2 monthly retirement annuity and 10 applies for refund, (ii) the fireman applies for an annuity of 11 a type that is not subject to annual increases under this 12 Section, or (iii) a term annuity becomes payable. In such 13 cases, the total of such salary deductions shall be refunded 14 to the fireman, without interest, and charged to the 15 aforementioned reserve. 16 (d) Notwithstanding any other provision of this Article, 17 the Tier 2 monthly retirement annuity of a person who first 18 becomes a fireman under this Article on or after January 1, 19 2011 shall be increased on the January 1 occurring either on or 20 after (i) the attainment of age 55 60 or (ii) the first 21 anniversary of the annuity start date, whichever is later. 22 Each annual increase shall be calculated at 3% or one-half the 23 annual unadjusted percentage increase (but not less than zero) 24 in the consumer price index-u for the 12 months ending with the 25 September preceding each November 1, whichever is less, of the 26 originally granted retirement annuity. If the annual SB1725 - 18 - LRB104 10677 RPS 20756 b SB1725- 19 -LRB104 10677 RPS 20756 b SB1725 - 19 - LRB104 10677 RPS 20756 b SB1725 - 19 - LRB104 10677 RPS 20756 b 1 unadjusted percentage change in the consumer price index-u for 2 a 12-month period ending in September is zero or, when 3 compared with the preceding period, decreases, then the 4 annuity shall not be increased. 5 For the purposes of this subsection (d), "consumer price 6 index-u" means the index published by the Bureau of Labor 7 Statistics of the United States Department of Labor that 8 measures the average change in prices of goods and services 9 purchased by all urban consumers, United States city average, 10 all items, 1982-84 = 100. The new amount resulting from each 11 annual adjustment shall be determined by the Public Pension 12 Division of the Department of Insurance and made available to 13 the boards of the pension funds by November 1 of each year. 14 (Source: P.A. 100-23, eff. 7-6-17; 100-539, eff. 11-7-17; 15 101-673, eff. 4-5-21.) 16 (40 ILCS 5/6-229) 17 Sec. 6-229. Provisions applicable to new hires; Tier 2. 18 (a) Notwithstanding any other provision of this Article, 19 the provisions of this Section apply to a person who first 20 becomes a fireman under this Article on or after January 1, 21 2011, and to certain qualified survivors of such a fireman. 22 Such persons, and the benefits and restrictions that apply 23 specifically to them under this Article, may be referred to as 24 "Tier 2". 25 (b) A fireman who has withdrawn from service, has attained SB1725 - 19 - LRB104 10677 RPS 20756 b SB1725- 20 -LRB104 10677 RPS 20756 b SB1725 - 20 - LRB104 10677 RPS 20756 b SB1725 - 20 - LRB104 10677 RPS 20756 b 1 age 50 or more, and has 10 or more years, but less than 20 2 years, of service in that capacity shall be entitled, upon 3 proper application being received by the Fund, to receive a 4 Tier 2 monthly retirement annuity for his service as a 5 fireman. The Tier 2 monthly retirement annuity shall be 6 computed by multiplying 2.5% for each year of such service by 7 his or her final average salary, subject to an annuity 8 reduction factor of one-half of 1% for each month that the 9 fireman's age at retirement is under age 55. The Tier 2 monthly 10 retirement annuity of a fireman who is retiring after 11 attaining age 50 with 20 or more years of creditable service 12 shall not be reduced. The Tier 2 monthly retirement annuity is 13 in lieu of any age and service annuity or other form of 14 retirement annuity under this Article. 15 The maximum retirement annuity under this subsection (b) 16 shall be 75% of final average salary. 17 For the purposes of this subsection (b), "final average 18 salary" means the greater of (1) the average monthly salary 19 obtained by dividing the total salary of the fireman during 20 the 96 consecutive months of service within the last 120 21 months of service in which the total salary was the highest by 22 the number of months of service in that period or (2) the 23 average monthly salary obtained by dividing the total salary 24 of the fireman during the 48 consecutive months of service 25 within the last 60 months of service in which the total salary 26 was the highest by the number of months of service in that SB1725 - 20 - LRB104 10677 RPS 20756 b SB1725- 21 -LRB104 10677 RPS 20756 b SB1725 - 21 - LRB104 10677 RPS 20756 b SB1725 - 21 - LRB104 10677 RPS 20756 b 1 period. 2 Beginning on January 1, 2011, for all purposes under this 3 Code (including without limitation the calculation of benefits 4 and employee contributions), the annual salary based on the 5 plan year of a member or participant to whom this Section 6 applies shall not exceed $106,800; however, that amount shall 7 annually thereafter be increased by the lesser of (i) 3% of 8 that amount, including all previous adjustments, or (ii) 9 one-half the annual unadjusted percentage increase (but not 10 less than zero) in the consumer price index-u for the 12 months 11 ending with the September preceding each November 1, including 12 all previous adjustments. 13 (b-5) For the purposes of this Section, "consumer price 14 index-u" means the index published by the Bureau of Labor 15 Statistics of the United States Department of Labor that 16 measures the average change in prices of goods and services 17 purchased by all urban consumers, United States city average, 18 all items, 1982-84 = 100. The new amount resulting from each 19 annual adjustment shall be determined by the Public Pension 20 Division of the Department of Insurance and made available to 21 the boards of the retirement systems and pension funds by 22 November 1 of each year. 23 (c) Notwithstanding any other provision of this Article, 24 for a person who first becomes a fireman under this Article on 25 or after January 1, 2011, eligibility for and the amount of the 26 annuity to which the qualified surviving spouse, children, and SB1725 - 21 - LRB104 10677 RPS 20756 b SB1725- 22 -LRB104 10677 RPS 20756 b SB1725 - 22 - LRB104 10677 RPS 20756 b SB1725 - 22 - LRB104 10677 RPS 20756 b 1 parents of the fireman are entitled under this subsection (c) 2 shall be determined as follows: 3 (1) The surviving spouse of a deceased fireman to whom 4 this Section applies shall be deemed qualified to receive 5 a Tier 2 surviving spouse's annuity under this paragraph 6 (1) if: (i) the deceased fireman meets the requirements 7 specified under subdivision (A), (B), (C), or (D) of this 8 paragraph (1); and (ii) the surviving spouse would not 9 otherwise be excluded from receiving a widow's annuity 10 under the eligibility requirements for a widow's annuity 11 set forth in Section 6-142. The Tier 2 surviving spouse's 12 annuity is in lieu of the widow's annuity determined under 13 any other Section of this Article and is subject to the 14 requirements of Section 6-143.2. 15 As used in this subsection (c), "earned pension" means 16 a Tier 2 monthly retirement annuity determined under 17 subsection (b) of this Section, including any increases 18 the fireman had received pursuant to Section 6-164. 19 (A) If the deceased fireman was receiving an 20 earned pension at the date of his or her death, the 21 Tier 2 surviving spouse's annuity under this paragraph 22 (1) shall be in the amount of 66 2/3% of the fireman's 23 earned pension at the date of death. 24 (B) If the deceased fireman was not receiving an 25 earned pension but had at least 10 years of service at 26 the time of death, the Tier 2 surviving spouse's SB1725 - 22 - LRB104 10677 RPS 20756 b SB1725- 23 -LRB104 10677 RPS 20756 b SB1725 - 23 - LRB104 10677 RPS 20756 b SB1725 - 23 - LRB104 10677 RPS 20756 b 1 annuity under this paragraph (1) shall be the greater 2 of: (i) 30% of the salary attached to the rank of first 3 class firefighter in the classified career service at 4 the time of the fireman's death; or (ii) 66 2/3% of the 5 Tier 2 monthly retirement annuity that the deceased 6 fireman would have been eligible to receive under 7 subsection (b) of this Section, based upon the actual 8 service accrued through the day before the fireman's 9 death, but determined as though the fireman was at 10 least age 55 on the day before his or her death and 11 retired on that day. 12 (C) If the deceased fireman was an active fireman 13 with at least 1 1/2 but less than 10 years of service 14 at the time of death, the Tier 2 surviving spouse's 15 annuity under this paragraph (1) shall be in the 16 amount of 30% of the salary attached to the rank of 17 first class firefighter in the classified career 18 service at the time of the fireman's death. 19 (D) Notwithstanding subdivisions (A), (B), and (C) 20 of this paragraph (1), if the performance of an act or 21 acts of duty results directly in the death of a fireman 22 subject to this Section, or prevents him from 23 subsequently resuming active service in the fire 24 department, then a surviving spouse who would 25 otherwise meet the eligibility requirements for a 26 death in the line of duty widow's annuity granted SB1725 - 23 - LRB104 10677 RPS 20756 b SB1725- 24 -LRB104 10677 RPS 20756 b SB1725 - 24 - LRB104 10677 RPS 20756 b SB1725 - 24 - LRB104 10677 RPS 20756 b 1 under Section 6-140 shall be deemed to be qualified 2 for a Tier 2 surviving spouse's annuity under this 3 subdivision (D); except that no such annuity shall be 4 paid to the surviving spouse of a fireman who dies 5 while in receipt of disability benefits when the 6 fireman's death was caused by an intervening illness 7 or injury unrelated to the illness or injury that had 8 prevented him from subsequently resuming active 9 service in the fire department. The Tier 2 surviving 10 spouse's annuity calculated under this subdivision (D) 11 shall be in lieu of, but in the same amount and paid in 12 the same manner as, the widow's annuity provided under 13 Section 6-140; except that the salary used for 14 computing a Tier 2 surviving spouse's annuity under 15 this subdivision (D) shall be subject to the Tier 2 16 salary cap provided under subsection (b) of this 17 Section. 18 (E) Notwithstanding any other provision of this 19 Article, the monthly Tier 2 surviving spouse's annuity 20 under subdivision (A) or (B) of this paragraph (1) 21 shall be increased on the January 1 next occurring 22 after (i) attainment of age 60 by the recipient of the 23 Tier 2 surviving spouse's annuity or (ii) the first 24 anniversary of the Tier 2 surviving spouse's annuity 25 start date, whichever is later, and on each January 1 26 thereafter, by 3% or one-half the annual unadjusted SB1725 - 24 - LRB104 10677 RPS 20756 b SB1725- 25 -LRB104 10677 RPS 20756 b SB1725 - 25 - LRB104 10677 RPS 20756 b SB1725 - 25 - LRB104 10677 RPS 20756 b 1 percentage increase in the consumer price index-u for 2 the 12 months ending with September preceding each 3 November 1, whichever is less, of the originally 4 granted Tier 2 surviving spouse's annuity. If the 5 annual unadjusted percentage change in the consumer 6 price index-u for a 12-month period ending in 7 September is zero or, when compared with the preceding 8 period, decreases, then the annuity shall not be 9 increased. 10 (F) Notwithstanding the other provisions of this 11 paragraph (1), for a qualified surviving spouse who is 12 entitled to a Tier 2 surviving spouse's annuity under 13 subdivision (A), (B), (C), or (D) of this paragraph 14 (1), that Tier 2 surviving spouse's annuity shall not 15 be less than the amount of the minimum widow's annuity 16 established from time to time under Section 6-128.4. 17 (2) Surviving children of a deceased fireman subject 18 to this Section who would otherwise meet the eligibility 19 requirements for a child's annuity set forth in Sections 20 6-147 and 6-148 shall be deemed qualified to receive a 21 Tier 2 child's annuity under this subsection (c), which 22 shall be in lieu of, but in the same amount and paid in the 23 same manner as, the child's annuity provided under those 24 Sections; except that any salary used for computing a Tier 25 2 child's annuity shall be subject to the Tier 2 salary cap 26 provided under subsection (b) of this Section. For SB1725 - 25 - LRB104 10677 RPS 20756 b SB1725- 26 -LRB104 10677 RPS 20756 b SB1725 - 26 - LRB104 10677 RPS 20756 b SB1725 - 26 - LRB104 10677 RPS 20756 b 1 purposes of determining any pro rata reduction in child's 2 annuities under this subsection (c), references in Section 3 6-148 to the combined annuities of the family shall be 4 deemed to refer to the combined Tier 2 surviving spouse's 5 annuity, if any, and the Tier 2 child's annuities payable 6 under this subsection (c). 7 (3) Surviving parents of a deceased fireman subject to 8 this Section who would otherwise meet the eligibility 9 requirements for a parent's annuity set forth in Section 10 6-149 shall be deemed qualified to receive a Tier 2 11 parent's annuity under this subsection (c), which shall be 12 in lieu of, but in the same amount and paid in the same 13 manner as, the parent's annuity provided under Section 14 6-149; except that any salary used for computing a Tier 2 15 parent's annuity shall be subject to the Tier 2 salary cap 16 provided under subsection (b) of this Section. For the 17 purposes of this Section, a reference to "annuity" in 18 Section 6-149 includes: (i) in the context of a widow, a 19 Tier 2 surviving spouse's annuity and (ii) in the context 20 of a child, a Tier 2 child's annuity. 21 (d) The General Assembly finds and declares that the 22 provisions of this Section, as enacted by Public Act 96-1495, 23 require clarification relating to necessary eligibility 24 standards and the manner of determining and paying the 25 intended Tier 2 benefits and contributions in order to enable 26 the Fund to unambiguously implement and administer benefits SB1725 - 26 - LRB104 10677 RPS 20756 b SB1725- 27 -LRB104 10677 RPS 20756 b SB1725 - 27 - LRB104 10677 RPS 20756 b SB1725 - 27 - LRB104 10677 RPS 20756 b 1 for Tier 2 members. The changes to this Section and the 2 conforming changes to Sections 6-150, 6-158, 6-164 (except for 3 the changes to subsection (a) of that Section), 6-166, and 4 6-167 made by this amendatory Act of the 99th General Assembly 5 are enacted to clarify the provisions of this Section as 6 enacted by Public Act 96-1495, and are hereby declared to 7 represent and be consistent with the original and continuing 8 intent of this Section and Public Act 96-1495. 9 (e) The changes to Sections 6-150, 6-158, 6-164 (except 10 for the changes to subsection (a) of that Section), 6-166, and 11 6-167 made by this amendatory Act of the 99th General Assembly 12 are intended to be retroactive to January 1, 2011 (the 13 effective date of Public Act 96-1495) and, for the purposes of 14 Section 1-103.1 of this Code, they apply without regard to 15 whether the relevant fireman was in service on or after the 16 effective date of this amendatory Act of the 99th General 17 Assembly. 18 (Source: P.A. 103-579, eff. 12-8-23.) 19 Section 90. The State Mandates Act is amended by adding 20 Section 8.49 as follows: 21 (30 ILCS 805/8.49 new) 22 Sec. 8.49. Exempt mandate. Notwithstanding Sections 6 and 23 8 of this Act, no reimbursement by the State is required for 24 the implementation of any mandate created by this amendatory SB1725 - 27 - LRB104 10677 RPS 20756 b SB1725- 28 -LRB104 10677 RPS 20756 b SB1725 - 28 - LRB104 10677 RPS 20756 b SB1725 - 28 - LRB104 10677 RPS 20756 b SB1725 - 28 - LRB104 10677 RPS 20756 b