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Illinois Senate Bill SB1925

Illinois 2025-2026 Regular Session

Illinois Senate Bill SB1925 Compare Versions

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11 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1925 Introduced 2/6/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED: 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172 Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. In a provision requiring a participating municipality or participating instrumentality to pay an additional contribution to the Fund for certain earnings increases above 6% or 1.5 times the annual increase in the consumer price index-u, whichever is greater, provides that the payments must be concluded within 7 years (instead of 3 years) after receipt of the bill by the participating municipality or participating instrumentality. Effective immediately. LRB104 10694 RPS 20773 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1925 Introduced 2/6/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED: 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172 Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. In a provision requiring a participating municipality or participating instrumentality to pay an additional contribution to the Fund for certain earnings increases above 6% or 1.5 times the annual increase in the consumer price index-u, whichever is greater, provides that the payments must be concluded within 7 years (instead of 3 years) after receipt of the bill by the participating municipality or participating instrumentality. Effective immediately. LRB104 10694 RPS 20773 b LRB104 10694 RPS 20773 b A BILL FOR
22 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1925 Introduced 2/6/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED:
33 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172
44 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172
55 Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. In a provision requiring a participating municipality or participating instrumentality to pay an additional contribution to the Fund for certain earnings increases above 6% or 1.5 times the annual increase in the consumer price index-u, whichever is greater, provides that the payments must be concluded within 7 years (instead of 3 years) after receipt of the bill by the participating municipality or participating instrumentality. Effective immediately.
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1111 1 AN ACT concerning public employee benefits.
1212 2 Be it enacted by the People of the State of Illinois,
1313 3 represented in the General Assembly:
1414 4 Section 5. The Illinois Pension Code is amended by
1515 5 changing Section 7-172 as follows:
1616 6 (40 ILCS 5/7-172) (from Ch. 108 1/2, par. 7-172)
1717 7 Sec. 7-172. Contributions by participating municipalities
1818 8 and participating instrumentalities.
1919 9 (a) Each participating municipality and each participating
2020 10 instrumentality shall make payment to the fund as follows:
2121 11 1. municipality contributions in an amount determined
2222 12 by applying the municipality contribution rate to each
2323 13 payment of earnings paid to each of its participating
2424 14 employees;
2525 15 2. an amount equal to the employee contributions
2626 16 provided by paragraph (a) of Section 7-173, whether or not
2727 17 the employee contributions are withheld as permitted by
2828 18 that Section;
2929 19 3. all accounts receivable, together with interest
3030 20 charged thereon, as provided in Section 7-209, and any
3131 21 amounts due under subsection (a-5) of Section 7-144;
3232 22 4. if it has no participating employees with current
3333 23 earnings, an amount payable which, over a closed period of
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3737 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1925 Introduced 2/6/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED:
3838 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172
3939 40 ILCS 5/7-172 from Ch. 108 1/2, par. 7-172
4040 Amends the Illinois Municipal Retirement Fund (IMRF) Article of the Illinois Pension Code. In a provision requiring a participating municipality or participating instrumentality to pay an additional contribution to the Fund for certain earnings increases above 6% or 1.5 times the annual increase in the consumer price index-u, whichever is greater, provides that the payments must be concluded within 7 years (instead of 3 years) after receipt of the bill by the participating municipality or participating instrumentality. Effective immediately.
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6868 1 20 years for participating municipalities and 10 years for
6969 2 participating instrumentalities, will amortize, at the
7070 3 effective rate for that year, any unfunded obligation. The
7171 4 unfunded obligation shall be computed as provided in
7272 5 paragraph 2 of subsection (b);
7373 6 5. if it has fewer than 7 participating employees or a
7474 7 negative balance in its municipality reserve, the greater
7575 8 of (A) an amount payable that, over a period of 20 years,
7676 9 will amortize at the effective rate for that year any
7777 10 unfunded obligation, computed as provided in paragraph 2
7878 11 of subsection (b) or (B) the amount required by paragraph
7979 12 1 of this subsection (a).
8080 13 (b) A separate municipality contribution rate shall be
8181 14 determined for each calendar year for all participating
8282 15 municipalities together with all instrumentalities thereof.
8383 16 The municipality contribution rate shall be determined for
8484 17 participating instrumentalities as if they were participating
8585 18 municipalities. The municipality contribution rate shall be
8686 19 the sum of the following percentages:
8787 20 1. The percentage of earnings of all the participating
8888 21 employees of all participating municipalities and
8989 22 participating instrumentalities which, if paid over the
9090 23 entire period of their service, will be sufficient when
9191 24 combined with all employee contributions available for the
9292 25 payment of benefits, to provide all annuities for
9393 26 participating employees, and the $3,000 death benefit
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104104 1 payable under Sections 7-158 and 7-164, such percentage to
105105 2 be known as the normal cost rate.
106106 3 2. The percentage of earnings of the participating
107107 4 employees of each participating municipality and
108108 5 participating instrumentalities necessary to adjust for
109109 6 the difference between the present value of all benefits,
110110 7 excluding temporary and total and permanent disability and
111111 8 death benefits, to be provided for its participating
112112 9 employees and the sum of its accumulated municipality
113113 10 contributions and the accumulated employee contributions
114114 11 and the present value of expected future employee and
115115 12 municipality contributions pursuant to subparagraph 1 of
116116 13 this paragraph (b). This adjustment shall be spread over a
117117 14 period determined by the Board, not to exceed 30 years for
118118 15 participating municipalities or 10 years for participating
119119 16 instrumentalities.
120120 17 3. The percentage of earnings of the participating
121121 18 employees of all municipalities and participating
122122 19 instrumentalities necessary to provide the present value
123123 20 of all temporary and total and permanent disability
124124 21 benefits granted during the most recent year for which
125125 22 information is available.
126126 23 4. The percentage of earnings of the participating
127127 24 employees of all participating municipalities and
128128 25 participating instrumentalities necessary to provide the
129129 26 present value of the net single sum death benefits
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140140 1 expected to become payable from the reserve established
141141 2 under Section 7-206 during the year for which this rate is
142142 3 fixed.
143143 4 5. The percentage of earnings necessary to meet any
144144 5 deficiency arising in the Terminated Municipality Reserve.
145145 6 (c) A separate municipality contribution rate shall be
146146 7 computed for each participating municipality or participating
147147 8 instrumentality for its sheriff's law enforcement employees.
148148 9 A separate municipality contribution rate shall be
149149 10 computed for the sheriff's law enforcement employees of each
150150 11 forest preserve district that elects to have such employees.
151151 12 For the period from January 1, 1986 to December 31, 1986, such
152152 13 rate shall be the forest preserve district's regular rate plus
153153 14 2%.
154154 15 In the event that the Board determines that there is an
155155 16 actuarial deficiency in the account of any municipality with
156156 17 respect to a person who has elected to participate in the Fund
157157 18 under Section 3-109.1 of this Code, the Board may adjust the
158158 19 municipality's contribution rate so as to make up that
159159 20 deficiency over such reasonable period of time as the Board
160160 21 may determine.
161161 22 (d) The Board may establish a separate municipality
162162 23 contribution rate for all employees who are program
163163 24 participants employed under the federal Comprehensive
164164 25 Employment Training Act by all of the participating
165165 26 municipalities and instrumentalities. The Board may also
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176176 1 provide that, in lieu of a separate municipality rate for
177177 2 these employees, a portion of the municipality contributions
178178 3 for such program participants shall be refunded or an extra
179179 4 charge assessed so that the amount of municipality
180180 5 contributions retained or received by the fund for all CETA
181181 6 program participants shall be an amount equal to that which
182182 7 would be provided by the separate municipality contribution
183183 8 rate for all such program participants. Refunds shall be made
184184 9 to prime sponsors of programs upon submission of a claim
185185 10 therefor and extra charges shall be assessed to participating
186186 11 municipalities and instrumentalities. In establishing the
187187 12 municipality contribution rate as provided in paragraph (b) of
188188 13 this Section, the use of a separate municipality contribution
189189 14 rate for program participants or the refund of a portion of the
190190 15 municipality contributions, as the case may be, may be
191191 16 considered.
192192 17 (e) Computations of municipality contribution rates for
193193 18 the following calendar year shall be made prior to the
194194 19 beginning of each year, from the information available at the
195195 20 time the computations are made, and on the assumption that the
196196 21 employees in each participating municipality or participating
197197 22 instrumentality at such time will continue in service until
198198 23 the end of such calendar year at their respective rates of
199199 24 earnings at such time.
200200 25 (f) Any municipality which is the recipient of State
201201 26 allocations representing that municipality's contributions for
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212212 1 retirement annuity purposes on behalf of its employees as
213213 2 provided in Section 12-21.16 of the Illinois Public Aid Code
214214 3 shall pay the allocations so received to the Board for such
215215 4 purpose. Estimates of State allocations to be received during
216216 5 any taxable year shall be considered in the determination of
217217 6 the municipality's tax rate for that year under Section 7-171.
218218 7 If a special tax is levied under Section 7-171, none of the
219219 8 proceeds may be used to reimburse the municipality for the
220220 9 amount of State allocations received and paid to the Board.
221221 10 Any multiple-county or consolidated health department which
222222 11 receives contributions from a county under Section 11.2 of "An
223223 12 Act in relation to establishment and maintenance of county and
224224 13 multiple-county health departments", approved July 9, 1943, as
225225 14 amended, or distributions under Section 3 of the Department of
226226 15 Public Health Act, shall use these only for municipality
227227 16 contributions by the health department.
228228 17 (g) Municipality contributions for the several purposes
229229 18 specified shall, for township treasurers and employees in the
230230 19 offices of the township treasurers who meet the qualifying
231231 20 conditions for coverage hereunder, be allocated among the
232232 21 several school districts and parts of school districts
233233 22 serviced by such treasurers and employees in the proportion
234234 23 which the amount of school funds of each district or part of a
235235 24 district handled by the treasurer bears to the total amount of
236236 25 all school funds handled by the treasurer.
237237 26 From the funds subject to allocation among districts and
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248248 1 parts of districts pursuant to the School Code, the trustees
249249 2 shall withhold the proportionate share of the liability for
250250 3 municipality contributions imposed upon such districts by this
251251 4 Section, in respect to such township treasurers and employees
252252 5 and remit the same to the Board.
253253 6 The municipality contribution rate for an educational
254254 7 service center shall initially be the same rate for each year
255255 8 as the regional office of education or school district which
256256 9 serves as its administrative agent. When actuarial data become
257257 10 available, a separate rate shall be established as provided in
258258 11 subparagraph (i) of this Section.
259259 12 The municipality contribution rate for a public agency,
260260 13 other than a vocational education cooperative, formed under
261261 14 the Intergovernmental Cooperation Act shall initially be the
262262 15 average rate for the municipalities which are parties to the
263263 16 intergovernmental agreement. When actuarial data become
264264 17 available, a separate rate shall be established as provided in
265265 18 subparagraph (i) of this Section.
266266 19 (h) Each participating municipality and participating
267267 20 instrumentality shall make the contributions in the amounts
268268 21 provided in this Section in the manner prescribed from time to
269269 22 time by the Board and all such contributions shall be
270270 23 obligations of the respective participating municipalities and
271271 24 participating instrumentalities to this fund. The failure to
272272 25 deduct any employee contributions shall not relieve the
273273 26 participating municipality or participating instrumentality of
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284284 1 its obligation to this fund. Delinquent payments of
285285 2 contributions due under this Section may, with interest, be
286286 3 recovered by civil action against the participating
287287 4 municipalities or participating instrumentalities.
288288 5 Municipality contributions, other than the amount necessary
289289 6 for employee contributions, for periods of service by
290290 7 employees from whose earnings no deductions were made for
291291 8 employee contributions to the fund, may be charged to the
292292 9 municipality reserve for the municipality or participating
293293 10 instrumentality.
294294 11 (i) Contributions by participating instrumentalities shall
295295 12 be determined as provided herein except that the percentage
296296 13 derived under subparagraph 2 of paragraph (b) of this Section,
297297 14 and the amount payable under subparagraph 4 of paragraph (a)
298298 15 of this Section, shall be based on an amortization period of 10
299299 16 years.
300300 17 (j) Notwithstanding the other provisions of this Section,
301301 18 the additional unfunded liability accruing as a result of
302302 19 Public Act 94-712 shall be amortized over a period of 30 years
303303 20 beginning on January 1 of the second calendar year following
304304 21 the calendar year in which Public Act 94-712 takes effect,
305305 22 except that the employer may provide for a longer amortization
306306 23 period by adopting a resolution or ordinance specifying a
307307 24 35-year or 40-year period and submitting a certified copy of
308308 25 the ordinance or resolution to the fund no later than June 1 of
309309 26 the calendar year following the calendar year in which Public
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320320 1 Act 94-712 takes effect.
321321 2 (k) If the amount of a participating employee's reported
322322 3 earnings for any of the 12-month periods used to determine the
323323 4 final rate of earnings exceeds the employee's 12-month
324324 5 reported earnings with the same employer for the previous year
325325 6 by the greater of 6% or 1.5 times the annual increase in the
326326 7 Consumer Price Index-U, as established by the United States
327327 8 Department of Labor for the preceding September, the
328328 9 participating municipality or participating instrumentality
329329 10 that paid those earnings shall pay to the Fund, in addition to
330330 11 any other contributions required under this Article, the
331331 12 present value of the increase in the pension resulting from
332332 13 the portion of the increase in reported earnings that is in
333333 14 excess of the greater of 6% or 1.5 times the annual increase in
334334 15 the Consumer Price Index-U, as determined by the Fund. This
335335 16 present value shall be computed on the basis of the actuarial
336336 17 assumptions and tables used in the most recent actuarial
337337 18 valuation of the Fund that is available at the time of the
338338 19 computation.
339339 20 Whenever it determines that a payment is or may be
340340 21 required under this subsection (k), the fund shall calculate
341341 22 the amount of the payment and bill the participating
342342 23 municipality or participating instrumentality for that amount.
343343 24 The bill shall specify the calculations used to determine the
344344 25 amount due. If the participating municipality or participating
345345 26 instrumentality disputes the amount of the bill, it may,
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356356 1 within 30 days after receipt of the bill, apply to the fund in
357357 2 writing for a recalculation. The application must specify in
358358 3 detail the grounds of the dispute. Upon receiving a timely
359359 4 application for recalculation, the fund shall review the
360360 5 application and, if appropriate, recalculate the amount due.
361361 6 The participating municipality and participating
362362 7 instrumentality contributions required under this subsection
363363 8 (k) may be paid in the form of a lump sum within 90 days after
364364 9 receipt of the bill. If the participating municipality and
365365 10 participating instrumentality contributions are not paid
366366 11 within 90 days after receipt of the bill, then interest will be
367367 12 charged at a rate equal to the fund's annual actuarially
368368 13 assumed rate of return on investment compounded annually from
369369 14 the 91st day after receipt of the bill. Payments must be
370370 15 concluded within 7 3 years after receipt of the bill by the
371371 16 participating municipality or participating instrumentality.
372372 17 When assessing payment for any amount due under this
373373 18 subsection (k), the fund shall exclude earnings increases
374374 19 resulting from overload or overtime earnings.
375375 20 When assessing payment for any amount due under this
376376 21 subsection (k), the fund shall exclude earnings increases
377377 22 resulting from payments for unused vacation time, but only for
378378 23 payments for unused vacation time made in the final 3 months of
379379 24 the final rate of earnings period.
380380 25 When assessing payment for any amount due under this
381381 26 subsection (k), the fund shall also exclude earnings increases
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392392 1 attributable to standard employment promotions resulting in
393393 2 increased responsibility and workload.
394394 3 When assessing payment for any amount due under this
395395 4 subsection (k), the fund shall exclude reportable earnings
396396 5 increases resulting from periods where the member was paid
397397 6 through workers' compensation.
398398 7 This subsection (k) does not apply to earnings increases
399399 8 due to amounts paid as required by federal or State law or
400400 9 court mandate or to earnings increases due to the
401401 10 participating employee returning to the regular number of
402402 11 hours worked after having a temporary reduction in the number
403403 12 of hours worked.
404404 13 This subsection (k) does not apply to earnings increases
405405 14 paid to individuals under contracts or collective bargaining
406406 15 agreements entered into, amended, or renewed before January 1,
407407 16 2012 (the effective date of Public Act 97-609), earnings
408408 17 increases paid to members who are 10 years or more from
409409 18 retirement eligibility, or earnings increases resulting from
410410 19 an increase in the number of hours required to be worked.
411411 20 When assessing payment for any amount due under this
412412 21 subsection (k), the fund shall also exclude earnings
413413 22 attributable to personnel policies adopted before January 1,
414414 23 2012 (the effective date of Public Act 97-609) as long as those
415415 24 policies are not applicable to employees who begin service on
416416 25 or after January 1, 2012 (the effective date of Public Act
417417 26 97-609).
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428428 1 The change made to this Section by Public Act 100-139 is a
429429 2 clarification of existing law and is intended to be
430430 3 retroactive to January 1, 2012 (the effective date of Public
431431 4 Act 97-609).
432432 5 (Source: P.A. 102-849, eff. 5-13-22; 103-464, eff. 8-4-23.)
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