94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4692


 
Introduced 1/12/2006, by Rep. Calvin L. Giles
 
SYNOPSIS AS INTRODUCED:
 		














40 ILCS 5/17-116.7 new






40 ILCS 5/17-116.8 new






30 ILCS 805/8.30 new









    Amends the Chicago Teacher Article of the Illinois Pension Code. Provides an early retirement incentive program for certain teachers who terminate service on or after February 1, 2007 and on or before June 30, 2007 or on or after February 1, 2008 and on or before June 30, 2008.  Allows the purchase of up to 5 years of age enhancement and creditable service.   Amends the State Mandates Act to require
 implementation without reimbursement.
Effective immediately.
















LRB094 16354 AMC 51605 b

















FISCAL NOTE ACT MAY APPLY


PENSION IMPACT NOTE ACT MAY APPLY


STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
















 


 


A BILL FOR









 











HB4692

LRB094 16354 AMC 51605 b






1
    AN ACT in relation to 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 adding 
5
Sections 17-116.7 and 17-116.8 as follows:
 
6
    (40 ILCS 5/17-116.7  new)
7
    Sec. 17-116.7. Early retirement incentives.

8
    (a)To be eligible for the benefits provided in this 
9
Section, a person must:
10
        (1) be a member of this Fund who, on November 1,
     2006, 
11
    is (i) in active payroll status as a teacher, or (ii) on 
12
    layoff status from such a position with a right of 
13
    re-employment or recall to service, or (iii) on leave of 
14
    absence from such a position, but only if the member on 
15
    leave has not been receiving a disability benefit under 
16
    this Article for a continuous period of 2 years or more as 
17
    of the date of application;
18
        (2) be a member of this Fund who, on or after May 1,
     
19
    2006, is (i) in active payroll status as a teacher, or (ii) 
20
    on layoff status from such a position with a right of 
21
    re-employment or recall to service, or (iii) on leave of 
22
    absence from such a position, but only if the member on 
23
    leave has not been receiving a disability benefit under 
24
    this Article for a continuous period of 2 years or more as 
25
    of the date of application;
26
        (3) have not previously received a retirement
     pension 
27
    under this Article;
28
        (4) file with the Board and the Board of Education,
     
29
    before March 1, 2007, a written application requesting the 
30
    benefits provided in this Section and a notice of 
31
    resignation from employment, which resignation must take 
32
    effect no earlier than February 1, 2007 and no later than 
 


 






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1
    June 30, 2007, unless the applicant's retirement is delayed 
2
    under subsection (e) or (f) of this Section;
3
        (5) be eligible to receive a retirement pension
     under 
4
    this Article (for which purpose any age enhancement or 
5
    creditable service received under this Section may be used) 
6
    and elect to receive the retirement pension beginning no 
7
    earlier than February 1, 2007 and no later than June 30, 
8
    2007 or the date established under subsection (e) or (f) of 
9
    this Section, if applicable;
10
        (6) have attained age 50 (without the use of any age
     
11
    enhancement or creditable service received under this 
12
    Section) by the effective date of the retirement pension;
13
        (7) have at least 5 years of creditable service
     under 
14
    this Fund or any of the participating systems under the 
15
    Retirement Systems Reciprocal Act (without the use of any 
16
    creditable service received under this Section) by the 
17
    effective date of the retirement pension.

18
    (b) An eligible person may establish up to 5 years of 
19
creditable service under this Section. In addition, for each 
20
period of creditable service established under this Section, a 
21
person's age at retirement shall be deemed to be increased by 
22
an equal period.
23
    The creditable service established under this Section may 
24
be used for all purposes under this Article and the Retirement 
25
Systems Reciprocal Act, except for the purposes of Section 
26
17-116.1, and the determination of average salary or 
27
compensation under this or any other Article of this Code.
28
    The age enhancement established under this Section may be 
29
used for all purposes under this Article (including calculation 
30
of a proportionate pension payable by this Fund under the 
31
Retirement Systems Reciprocal Act), except for purposes of the 
32
reversionary pension under Section 17-120, and distributions 
33
required by federal law on account of age. However, age 
34
enhancement established under this Section shall not be used in 
35
determining benefits payable under other Articles of this Code 
36
under the Retirement Systems Reciprocal Act.

 


 






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1
    (c) For all creditable service established under this 
2
Section, the employer must pay to the Fund an employer 
3
contribution consisting of 12% of the member's highest annual 
4
full-time rate of compensation for each year of creditable 
5
service granted under this Section.
6
    The employer contribution shall be paid to the Fund in one 
7
of the following ways: (i) in a single sum at the time of the 
8
member's retirement, (ii) in equal quarterly installments over 
9
a period of 5 years from the date of retirement, or (iii) 
10
subject to the approval of the Board of the Fund, in unequal 
11
installments over a period of no more than 5 years from the 
12
date of retirement, as provided in a payment plan designed by 
13
the Fund to accommodate the needs of the employer. The 
14
employer's failure to make the required contributions in a 
15
timely manner shall not affect the payment of the retirement 
16
pension.
17
    For all creditable service established under this Section, 
18
the employee must pay to the Fund an employee contribution 
19
consisting of 4% of the member's highest annual salary rate 
20
used in the determination of the retirement pension for each 
21
year of creditable service granted under this Section. The 
22
employee contribution shall be deducted from the retirement 
23
annuity in 24 monthly installments.
24
    (d) An annuitant who has received any age enhancement or 
25
creditable service under this Section and whose pension is 
26
suspended or cancelled under Section 17-149 or 17-150 shall 
27
thereby forfeit the age enhancement and creditable service. The 
28
forfeiture of creditable service under this subsection shall 
29
not entitle the employer to a refund of the employer 
30
contribution paid under this Section, nor to forgiveness of any 
31
part of that contribution that remains unpaid. The forfeiture 
32
of creditable service under this subsection shall not entitle 
33
the employee to a refund of the employee contribution paid 
34
under this Section.
35
    (e) If the number of employees of an employer that apply 
36
for early retirement under this Section exceeds 30% of those 
 


 






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1
eligible, the employer may require that, for any or all of the 
2
number of applicants in excess of that 30%, the starting date 
3
of the retirement pension enhanced under this Section be no 
4
earlier than June 1, 2007 and no later than September 1, 2007. 
5
The right to have the retirement pension begin before June 1, 
6
2007 shall be allocated among the applicants on the basis of 
7
seniority in the service of that employer.
    This delay applies 
8
only to persons who are applying for early retirement 
9
incentives under this Section, and does not prevent a person 
10
whose application for early retirement incentives has been 
11
withdrawn from beginning to receive a retirement pension on the 
12
earliest date upon which the person is otherwise eligible under 
13
this Article.
14
    (f) For a member who receives notice that he or she has 
15
been declared a reserve teacher pursuant to a collective 
16
bargaining agreement after January 15, 2007, but before 
17
September 15, 2007: (1) the March 1, 2007 application deadline 
18
in subdivision (a)(4) of this Section is extended to a date 15 
19
days after the date of notification of the reserve teacher 
20
declaration, (2) the June 30, 2007 deadline in subdivision 
21
(a)(5) of this Section is extended to October 1, 2007, and (3) 
22
the member shall not be included in the calculation of the 30% 
23
under subsection (e) and is not subject to delay in retirement 
24
under that subsection.
25
    (g) A member who receives any early retirement incentive 
26
under Section 17-116.3, 17-116.4,  17-116.5, 17-116.6, or 
27
17-116.8 may not receive any early retirement incentive under 
28
this Section.

 
29
    (40 ILCS 5/17-116.8 new)

30
    Sec. 17-116.8. Early retirement incentives.

31
    (a) To be eligible for the benefits provided in this 
32
Section, a person must:
33
        (1) be a member of this Fund who, on November 1,
     2007, 
34
    is (i) in active payroll status as a teacher, or (ii) on 
35
    layoff status from such a position with a right of 
 


 






HB4692
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1
    re-employment or recall to service, or (iii) on leave of 
2
    absence from such a position, but only if the member on 
3
    leave has not been receiving a disability benefit under 
4
    this Article for a continuous period of 2 years or more as 
5
    of the date of application;
6
        (2) be a member of this Fund who, on or after May 1,
     
7
    2007, is (i) in active payroll status as a teacher, or (ii) 
8
    on layoff status from such a position with a right of 
9
    re-employment or recall to service, or (iii) on leave of 
10
    absence from such a position, but only if the member on 
11
    leave has not been receiving a disability benefit under 
12
    this Article for a continuous period of 2 years or more as 
13
    of the date of application;
14
        (3) have not previously received a retirement
     pension 
15
    under this Article;
16
        (4) file with the Board and the Board of Education,
     
17
    before March 1, 2008, a written application requesting the 
18
    benefits provided in this Section and a notice of 
19
    resignation from employment, which resignation must take 
20
    effect no earlier than February 1, 2008 and no later than 
21
    June 30, 2008, unless the applicant's retirement is delayed 
22
    under subsection (e) or (f) of this Section;
23
        (5) be eligible to receive a retirement pension
     under 
24
    this Article (for which purpose any age enhancement or 
25
    creditable service received under this Section may be used) 
26
    and elect to receive the retirement pension beginning no 
27
    earlier than February 1, 2008 and no later than June 30, 
28
    2008 or the date established under subsection (e) or (f) of 
29
    this Section, if applicable;
30
        (6) have attained age 50 (without the use of any age
     
31
    enhancement or creditable service received under this 
32
    Section) by the effective date of the retirement pension;
33
        (7) have at least 5 years of creditable service
     under 
34
    this Fund or any of the participating systems under the 
35
    Retirement Systems Reciprocal Act (without the use of any 
36
    creditable service received under this Section) by the 
 


 






HB4692
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1
    effective date of the retirement pension.

2
    (b) An eligible person may establish up to 5 years of 
3
creditable service under this Section. In addition, for each 
4
period of creditable service established under this Section, a 
5
person's age at retirement shall be deemed to be increased by 
6
an equal period.
7
    (c) For all creditable service established under this 
8
Section, the employer must pay to the Fund an employer 
9
contribution consisting of 12% of the member's highest annual 
10
full-time rate of compensation for each year of creditable 
11
service granted under this Section.
12
    The employer contribution shall be paid to the Fund in one 
13
of the following ways: (i) in a single sum at the time of the 
14
member's retirement, (ii) in equal quarterly installments over 
15
a period of 5 years from the date of retirement, or (iii) 
16
subject to the approval of the Board of the Fund, in unequal 
17
installments over a period of no more than 5 years from the 
18
date of retirement, as provided in a payment plan designed by 
19
the Fund to accommodate the needs of the employer. The 
20
employer's failure to make the required contributions in a 
21
timely manner shall not affect the payment of the retirement 
22
pension.
23
    For all creditable service established under this Section, 
24
the employee must pay to the Fund an employee contribution 
25
consisting of 4% of the member's highest annual salary rate 
26
used in the determination of the retirement pension for each 
27
year of creditable service granted under this Section. The 
28
employee contribution shall be deducted from the retirement 
29
annuity in 24 monthly installments.
30
    (d) An annuitant who has received any age enhancement or 
31
creditable service under this Section and whose pension is 
32
suspended or cancelled under Section 17-149 or 17-150 shall 
33
thereby forfeit the age enhancement and creditable service. The 
34
forfeiture of creditable service under this subsection shall 
35
not entitle the employer to a refund of the employer 
36
contribution paid under this Section, nor to forgiveness of any 
 


 






HB4692
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1
part of that contribution that remains unpaid. The forfeiture 
2
of creditable service under this subsection shall not entitle 
3
the employee to a refund of the employee contribution paid 
4
under this Section.
5
    (e) If the number of employees of an employer that apply 
6
for early retirement under this Section exceeds 30% of those 
7
eligible, the employer may require that, for any or all of the 
8
number of applicants in excess of that 30%, the starting date 
9
of the retirement pension enhanced under this Section be no 
10
earlier than June 1, 2008 and no later than September 1, 2008. 
11
The right to have the retirement pension begin before June 1, 
12
2008 shall be allocated among the applicants on the basis of 
13
seniority in the service of that employer.
    This delay applies 
14
only to persons who are applying for early retirement 
15
incentives under this Section, and does not prevent a person 
16
whose application for early retirement incentives has been 
17
withdrawn from beginning to receive a retirement pension on the 
18
earliest date upon which the person is otherwise eligible under 
19
this Article.
20
    (f) For a member who receives notice that he or she has 
21
been declared a reserve teacher pursuant to a collective 
22
bargaining agreement after January 15, 2008, but before 
23
September 15, 2008: (1) the March 1, 2008 application deadline 
24
in subdivision (a)(4) of this Section is extended to a date 15 
25
days after the date of notification of the reserve teacher 
26
declaration, (2) the June 30, 2008 deadline in subdivision 
27
(a)(5) of this Section is extended to October 1, 2008, and (3) 
28
the member shall not be included in the calculation of the 30% 
29
under subsection (e) and is not subject to delay in retirement 
30
under that subsection.
31
    (g) A member who receives any early retirement incentive 
32
under Section 17-116.3, 17-116.4,  17-116.5, 17-116.6, or 
33
17-116.7 may not receive any early retirement incentive under 
34
this Section.


 
35
    Section 90. The State Mandates Act is amended by adding 
 


 






HB4692
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1
Section 8.30 as
follows:


 
2
    (30 ILCS 805/8.30 new)

3
    Sec. 8.30. Exempt mandate. Notwithstanding Sections 6 and 8 
4
of this
Act, no reimbursement by the State is required for the 
5
implementation of
any mandate created by this amendatory Act of 
6
the 94th General Assembly.

 

7
    Section 99. Effective date. This Act takes effect upon 
8
becoming law.