SB 455 — PEN CD-MWRD-ADMINISTRATIVE PKG

Provides that certain early retirement discounts apply to the calculation of a surviving spouse’s annuity.

Provides that an employee may establish service credit for voluntary military service that commences after commencement of service with the Metropolitan Water Reclamation District.

Adds to the powers and duties of the Board, the power to assess and collect interest on amounts due to the Fund using the annual rate as shall from time to time be determined by the Board, compounded annually from the date of notification to the date of payment.

Makes other changes.

Amends the State Mandates Act to require implementation without reimbursement.

Effective immediately.

LRB094 09941 AMC 40199 b FISCAL NOTE ACT PENSION IMPACT STATE MANDATES MAY APPLY NOTE ACT MAY ACT MAY REQUIRE APPLY REIMBURSEMENT A BILL FOR SB0455 LRB094 09941 AMC 40199 b AN ACT in relation to public employee benefits.

(3) Any employee who withdraws from service on or after SB0455 Engrossed - 2 - LRB094 09941 AMC 40199 b attainment of age 50 but prior to age 60 and is eligible for early retirement without discount under the Rule of 80 as provided in subsection (c) of Section 13-302 is entitled to a retirement annuity at the time of withdrawal.

SB0455 Engrossed - 3 - LRB094 09941 AMC 40199 b (Source:

An employee who has terminated employment with the employer under this Article prior to the effective date of this SB0455 Engrossed - 4 - LRB094 09941 AMC 40199 b amendatory Act of the 92nd General Assembly and subsequently re-enters service must remain in service with the employer under this Article for at least 2 years after re-entry during the period beginning on January 1, 2003 and ending on December 31, 2007 to be entitled to early retirement without discount under this subsection (c).

SB0455 Engrossed - 5 - LRB094 09941 AMC 40199 b Upon receipt of the application, the Board shall determine the corresponding employee and employer contributions.

Any employee who (i) retired before July 1, 1985 with at least 10 years of creditable service, (ii) is receiving a SB0455 Engrossed - 6 - LRB094 09941 AMC 40199 b retirement annuity under this Article, other than a term annuity, and (iii) has not received any annual increase under this subsection, shall begin receiving the annual increases provided under this subsection (d) beginning on the next annuity payment date following June 13, 1997.

SB0455 Engrossed - 7 - LRB094 09941 AMC 40199 b Notwithstanding any other provision of this subsection, beginning on the first annuity payment date following July 12, 2001, an employee who retired before August 23, 1989 with at least 10 years of service under this Article but before attaining age 60 (regardless of whether the retirement annuity was subject to an early retirement discount) shall be entitled to the same minimum monthly retirement annuity under this subsection as an employee who retired with at least 10 years of service under this Article and after attaining age 60.

However, the annuity shall not be payable to the surviving spouse of (1) an employee who withdraws from service before attaining the minimum retirement age unless the deceased employee had at least 55 with less than 10 years of service, or at least less than 5 years of service if the employee was SB0455 Engrossed - 8 - LRB094 09941 AMC 40199 b eligible for an annuity upon attainment of age 62 pursuant to Section 13-301(b) or had been receiving a retirement annuity pursuant to Section 13-301(d), or (2) an employee not described in item (1) who first enters service on or after the effective date of this amendatory Act of 1997 and who has been employed as an employee for (i) less than 36 months from the date of the employee’s original entry into service or (ii) less than 12 months from the employee’s date of latest re-entry into service;

For any death in service the early retirement discount required under Section 13-302(b) shall not be applied in computing the retirement annuity upon which is based the SB0455 Engrossed - 9 - LRB094 09941 AMC 40199 b surviving spouse’s annuity.

The discount shall be reduced by 10% for each full year the SB0455 Engrossed - 10 - LRB094 09941 AMC 40199 b marriage has been in continuous effect as of the date of withdrawal or death in service.

Beginning January 1, 1993, the minimum monthly surviving spouse’s annuity shall be $250 for any annuitant (other than a term or reciprocal annuitant or an annuitant survivor under subsection (d) of Section 13-301) whose deceased spouse had less than 10 years of service under this Article, and for any annuitant (other than a term SB0455 Engrossed - 11 - LRB094 09941 AMC 40199 b annuitant) whose deceased spouse had at least 10 years of service under this Article and began receiving a retirement annuity under this Article before attainment of age 60.

SB0455 Engrossed - 12 - LRB094 09941 AMC 40199 b In the case of a reciprocal annuity, the minimum annuity calculated under this subdivision (e)(2) shall apply only if the deceased spouse of the annuitant had at least 10 years of service under this Article, and the amount of the minimum annuity shall be reduced by the sum of all the reciprocal annuities payable to the annuitant by other participating systems under Article 20 of this Code.

Further notwithstanding any other provision of this subsection, beginning on the first day of the month following the month in which this amendatory Act of the 94th General Assembly takes effect, an annuitant whose deceased spouse retired on SB0455 Engrossed - 13 - LRB094 09941 AMC 40199 b or after August 23, 1989 with at least 10 years of service under this Article but before attaining age 60 (regardless of whether the retirement annuity was subject to an early retirement discount) shall be entitled to the same minimum monthly surviving spouse’s annuity under this subsection as an annuitant whose deceased spouse retired with at least 10 years of service under this Article and after attaining age 60.

The annuity shall not be payable unless the employee has been employed as an employee for at least 36 months from the date of the employee’s original entry into service (at least 24 months in the case of an SB0455 Engrossed - 14 - LRB094 09941 AMC 40199 b employee who first entered service before June 13, the effective date of this amendatory Act of 1997) and at least 12 months from the date of the employee’s latest re-entry into service;

(a) Any employee who becomes disabled, which disability is the result of an injury or illness compensable under the Illinois Workers’ Compensation Act or the Illinois Workers’ Occupational Diseases Act, is entitled to a duty disability benefit during the period of disability for which the employee SB0455 Engrossed - 15 - LRB094 09941 AMC 40199 b does not receive any part of salary, or any part of a retirement annuity under this Article;

SB0455 Engrossed - 16 - LRB094 09941 AMC 40199 b (2) A medical report is submitted by at least one licensed and practicing physician as part of the employee’s application;

However this provision does not apply to an employee who relies in good faith on treatment by prayer through spiritual means alone in accordance with the tenets SB0455 Engrossed - 17 - LRB094 09941 AMC 40199 b and practice of a recognized church or religious denomination, by a duly accredited practitioner thereof.

An employee whose disability begins during any such ineligible period of absence from service may not receive benefits until the employee SB0455 Engrossed - 18 - LRB094 09941 AMC 40199 b recovers from the disability and is in service for at least 15 consecutive working days after such recovery.

(4) The employee (i) refuses to submit to a reasonable physical examination within 30 days of application by a physician appointed by the Board, (ii) in the case of chronic alcoholism, the employee refuses to join a rehabilitation program licensed by the Department of Public Health of the State of Illinois and certified by the Joint Commission on the Accreditation of Hospitals, (iii) fails or refuses to consent to and sign an authorization allowing the Board to receive copies of or to examine the SB0455 Engrossed - 19 - LRB094 09941 AMC 40199 b employee’s medical and hospital records, or (iv) fails or refuses to provide complete information regarding any other employment for compensation he or she has received since becoming disabled;

Internal Revenue Service or the federal courts provide a favorable ruling as described in Section 13-502(f), a such commissioner may discontinue making the additional optional contributions by notifying the Fund in writing in accordance SB0455 Engrossed - 20 - LRB094 09941 AMC 40199 b with this Section and procedures established by the Board.

To the extent such commissioner has made additional optional contributions with respect to only SB0455 Engrossed - 21 - LRB094 09941 AMC 40199 b a portion of years of service credit, the retirement annuity will first be determined in accordance with this Section to the extent such additional optional contributions were made, and then in accordance with the remaining Sections of this Article to the extent of years of service credit with respect to which additional optional contributions were not made.

In lieu of the survivor’s benefits otherwise payable under this Article, the spouse or eligible child of any deceased commissioner who (1) had elected to participate in the Fund, and (2) was either making (or had already made) additional optional contributions on the date of death, or was receiving an annuity calculated under this Section at the time of death, may elect to receive an annuity beginning on the date of the commissioner’s death, provided that the spouse and commissioner must have been SB0455 Engrossed - 22 - LRB094 09941 AMC 40199 b married on the date of the last termination of a service as commissioner and for a continuous period of at least one year immediately preceding death.

The salary to be used in the calculation of these SB0455 Engrossed - 23 - LRB094 09941 AMC 40199 b benefits shall be the same as that prescribed for determining a retirement annuity as provided in subsection (b) of this Section.

Internal SB0455 Engrossed - 24 - LRB094 09941 AMC 40199 b Revenue Service.

(a) Any employee who, after commencement of service with the Employer, enlisted, was inducted or was otherwise ordered to serve in the military forces of the United States pursuant to any law, shall receive full service credit for the various purposes of this Article as though the employee were in the active service of the Employer during the period of military SB0455 Engrossed - 25 - LRB094 09941 AMC 40199 b service provided that:

In order to establish military service credit under this subsection (b), the applicant must submit a written application to the Fund, including the applicant’s discharge papers from SB0455 Engrossed - 26 - LRB094 09941 AMC 40199 b military service, and pay to the Fund (i) employee contributions at the rates provided in this Article, based upon the person’s salary on the last date as a participating employee prior to the military service or on the first date as a participating employee after the military service, whichever is greater, plus (ii) the current amount determined by the board to be equal to the employer’s normal cost of the benefits accrued for such military service, plus (iii) regular interest of 3% compounded annually on items (i) and (ii) from the date of entry or re-entry as a participating employee following the military service to the date of payment.

If contributions are picked up they shall SB0455 Engrossed - 27 - LRB094 09941 AMC 40199 b be treated as Employer contributions in determining tax treatment under the United States Internal Revenue Code, and shall not be included as gross income of the employee until such time as they are distributed.

(f) Subject to the requirements of federal law, the Employer shall pick up contributions that a commissioner has elected to pay to the Fund under Section 13-314, and the contributions so picked up shall be treated as employer SB0455 Engrossed - 28 - LRB094 09941 AMC 40199 b contributions for the purposes of determining federal tax treatment.

The refund shall include interest on SB0455 Engrossed - 29 - LRB094 09941 AMC 40199 b each contribution at the rate of 3% per annum compounded annually from the date of the contribution to the date of the refund.

Notwithstanding the provisions set forth in subsection (a) of this section, whenever an employee’s or surviving spouse’s annuity will be less than $200 per month, SB0455 Engrossed - 30 - LRB094 09941 AMC 40199 b the employee or surviving spouse, as the case may be, may elect to receive a refund of accumulated employee contributions;

SB0455 Engrossed - 31 - LRB094 09941 AMC 40199 b (Source:

No trustee of the Board shall vote upon that trustee’s own personal claim for annuity, benefit or refund, or participate in the deliberations of the SB0455 Engrossed - 32 - LRB094 09941 AMC 40199 b Board as to the validity of any such claim.

To waive the requirement of legal guardianship of any minor unmarried beneficiary of the Fund living with a parent or grandparent, and legal guardianship of any beneficiary under legal disability whose husband, wife, or parent is managing such beneficiary’s affairs, whenever the Board deems such waiver to be in the best SB0455 Engrossed - 33 - LRB094 09941 AMC 40199 b interest of the beneficiary.