HB 4973 — PENCD-ART 7-ADMINISTRATIVE

LRB094 15880 AMC 51102 b FISCAL NOTE ACT PENSION IMPACT STATE MANDATES MAY APPLY NOTE ACT MAY ACT MAY REQUIRE APPLY REIMBURSEMENT A BILL FOR HB4973 LRB094 15880 AMC 51102 b AN ACT concerning public employee benefits.

The Illinois Pension Code is amended by changing Sections 7-114, 7-118, 7-135, 7-139, 7-145.1, 7-170, 7-171, 7-172, 7-173, 7-173.2, 7-204, 7-205, and 7-211 and by adding Section 7-153.1 as follows:

(b) For purposes of determining benefits payable under this fund payments to a person who is engaged in an independently established trade, occupation, profession or business and who HB4973 Engrossed - 2 - LRB094 15880 AMC 51102 b is paid for his service on a basis other than a monthly or other regular salary, are not earnings.

HB4973 Engrossed - 3 - LRB094 15880 AMC 51102 b (g) Any moneys received by an elected official who has elected to establish alternative credit under Section 7-145.1 before this amendatory Act of the 94th General Assembly from the State of Illinois for service in that capacity shall be deemed earnings unless specifically excluded in this Code.

12-2-94.) (40 ILCS 5/7-118)5/7-135) (from Ch.

7-118) Sec.

7-118.

"Beneficiary".:

(a) "Beneficiary" means:

(1) Any person or persons, trust, or charity designated as a beneficiary by an employee, former employee who has not yet received a retirement annuity or separation benefit, or employee annuitant.

If no designation is on file or no beneficiary so designated survives, the estate of the employee, former employee who has not yet received a retirement annuity or separation benefit, or employee annuitant.

(2) Any person or persons, trust, or charity designated as a beneficiary by a beneficiary annuitant or, if no designation is on file or no beneficiary so designated survives, the estate of the beneficiary annuitant.

The surviving spouse of an employee or of an employee annuitant, or if no surviving spouse survives, the person or persons designated by a participating employee or employee annuitant, or if no person so designated survives, or if no designation is on file, the estate of the employee or employee annuitant.

The person or persons designated by a beneficiary annuitant, or if no person designated survives, or if no designation is on file, the estate of the beneficiary annuitant.

(3) The estate of a surviving spouse annuitant where the employee or employee annuitant filed no designation, or no person designated survives at the death of a surviving spouse annuitant.

(b) Designations of beneficiaries shall be in writing on forms prescribed by the board and effective upon filing in the fund offices.

The designation forms shall provide for HB4973 - 4 - LRB094 15880 AMC 51102 b contingent beneficiaries.

Divorce, dissolution or annulment of marriage revokes the designation of an employee’s former spouse as a beneficiary on a designation executed before entry of judgment for divorce, dissolution or annulment of marriage.

(b) Notwithstanding the foregoing, an employee, former employee who has not yet received a retirement annuity or separation benefit, or employee annuitant may elect to name any person, trust or charity to be the primary beneficiary of any death benefit payable by reason of his death.

Such election shall state specifically whether it is his intention to exclude the spouse, shall be in writing, and may be revoked at any time.

Such election or revocation shall take effect upon being filed in the fund offices.

(c) If a surviving spouse annuity is payable to a former spouse upon the death of an employee annuitant, the former spouse, unless designated by the employee annuitant after dissolution of the marriage, shall not be the beneficiary for the purposes of the $3,000 death benefit payable under subparagraph 6 of Section 7-164.

This benefit shall be paid to the designated beneficiary of the employee annuitant or, if there is no designation, then to the estate of the employee annuitant.

(Source:

P.A.

89-136, eff.

7-14-95;

90-448, eff.

8-16-97.) (40 ILCS 5/7-135) (from Ch.

108 1/2, par.

HB4973 - 5 - LRB094 15880 AMC 51102 b 1.

HB4973 Engrossed - 4 - LRB094 15880 AMC 51102 b (c) The governing body of each participating municipality and participating instrumentality may delegate any or all of the following powers and duties to its authorized agent, but only if the agent is a member of the fund:

87-740.) HB4973 - 6 - LRB094 15880 AMC 51102 b (40 ILCS 5/7-139) (from Ch.

If the effective date of participation for the participating municipality or participating instrumentality is on or before January 1, 1998, creditable HB4973 Engrossed - 5 - LRB094 15880 AMC 51102 b service shall be granted for the entire period of prior service with that employer without any employee contribution.

Application for this creditable service HB4973 - 7 - LRB094 15880 AMC 51102 b may be made at any time while the employee is still in service.

Any person who has withdrawn from the service of a participating municipality or participating instrumentality prior to the effective date, who reenters the service of the same municipality or participating instrumentality after the effective date and becomes a HB4973 Engrossed - 6 - LRB094 15880 AMC 51102 b participating employee is entitled to creditable service for prior service as otherwise provided in this subdivision (a)(1) only if he or she renders 2 years of service as a participating employee after the effective date.

Normal credits of amounts equal to each payment of normal contributions received from him, as of the date the corresponding payment of earnings is payable HB4973 - 8 - LRB094 15880 AMC 51102 b to him, and normal contributions made for the purpose of establishing out-of-state service credits as permitted under the conditions set forth in paragraph 6 of this subsection (a).

For periods of temporary and total and permanent disability benefits, each employee receiving disability HB4973 Engrossed - 7 - LRB094 15880 AMC 51102 b benefits shall be granted creditable service for the period during which disability benefits are payable.

HB4973 - 9 - LRB094 15880 AMC 51102 b c.

Benefits under the provisions of Sections 7-141, 7-146, 7-150 and 7-163 shall become payable to employees on authorized leave of absence, or their designated beneficiary, only if such leave of absence is creditable hereunder, and if the employee has at HB4973 Engrossed - 8 - LRB094 15880 AMC 51102 b least one year of creditable service other than the service granted for leave of absence.

If necessary to the computation of any benefit, the HB4973 - 10 - LRB094 15880 AMC 51102 b board shall establish municipality credits for participating employees under this paragraph on the assumption that the employee received earnings at the rate received at the time he left the employment to enter the armed forces.

Any participating employee who left his employment with a municipality or participating instrumentality to serve in the armed forces of the United States and who again became a participating employee within 90 days after completion of full time active duty by entering the service of a different municipality or participating instrumentality, which has elected to allow creditable service for periods of military service under the preceding paragraph, shall also be allowed creditable service for his HB4973 Engrossed - 9 - LRB094 15880 AMC 51102 b period of military service on the same terms that would apply if he had been employed, before entering military service, by the municipality or instrumentality which employed him after he left the military service and the employer costs arising in relation to such grant of creditable service shall be charged to and paid by that municipality or instrumentality.

In addition to any creditable service established under paragraph 5 of this subsection (a), creditable HB4973 - 11 - LRB094 15880 AMC 51102 b service may be granted for up to 24 months of service in the armed forces of the United States.

If payment is made during the 6-month period that begins 3 months after the effective date of this amendatory Act of 1997, the required interest shall be at the rate of HB4973 Engrossed - 10 - LRB094 15880 AMC 51102 b 2.5% per year, compounded annually;

the employee makes a payment of contributions, which shall be computed at 8% (normal) plus 2% (survivor) times length of service purchased times the average rate of earnings for the first 2 years of service with the municipality or participating instrumentality whose governing body authorizes the service established plus interest at the effective rate on the date such HB4973 - 12 - LRB094 15880 AMC 51102 b credits are established, payable from the date the employee completes the required 2 years of current service to date of payment.

Any employee who is a participating employee on or HB4973 Engrossed - 11 - LRB094 15880 AMC 51102 b after September 24, 1981 and who was excluded from participation by the age restrictions removed by Public Act 82-596 may receive creditable service for the period, on or after January 1, 1979, excluded by the age restriction and, in addition, if the governing body of the participating municipality or participating instrumentality elects to allow creditable service for all employees excluded by the age restriction prior to January 1, 1979, for service during the period prior to that date excluded by the age restriction.

HB4973 - 13 - LRB094 15880 AMC 51102 b 8.

If the employee was in service with more than one employer during this period only the sick leave days with the employer with which HB4973 Engrossed - 12 - LRB094 15880 AMC 51102 b the employee has the greatest number of unpaid sick leave days shall be considered.

Each participating municipality and participating instrumentality with which an employee has service within 60 days of the effective date of his retirement annuity shall certify to the board the HB4973 - 14 - LRB094 15880 AMC 51102 b number of accumulated unpaid sick leave days credited to the employee at the time of termination of service.

Such transferred HB4973 Engrossed - 13 - LRB094 15880 AMC 51102 b service shall be deemed to be service as a sheriff’s law enforcement employee for the purposes of Section 7-142.1.

HB4973 - 15 - LRB094 15880 AMC 51102 b The board shall establish by rule the manner of making the calculation required under this paragraph 10, taking into account the appropriate actuarial assumptions;

HB4973 Engrossed - 14 - LRB094 15880 AMC 51102 b 2.

A participating employee or other applicant shall not be entitled to credits or creditable service unless the required employee contributions are made in HB4973 - 16 - LRB094 15880 AMC 51102 b a lump sum or in installments made in accordance with board rule.

7-29-05.) (40 ILCS 5/7-153.15/7-145.1) new) Sec.

7-145.1.

Alternative annuity for county officers.

(a) The benefits provided in this Section and Section 7-145.2 are available only if (1) the county board has filed with the Board of the Fund a resolution or ordinance expressly HB4973 Engrossed - 15 - LRB094 15880 AMC 51102 b consenting to the availability of these benefits for its elected county officers and (2) the elected county officer has elected to establish alternative credit under this Section before the effective date of this amendatory Act of the 94th General Assembly.

The county board’s consent is irrevocable with respect to persons participating in the program, but may be revoked at any time with respect to persons who have not paid an additional optional contribution under this Section before the date of revocation.

An elected county officer may elect to establish alternative credits for an alternative annuity by electing in writing before the effective date of this amendatory Act of the 94th General Assembly to make additional optional contributions in accordance with this Section and procedures established by the board.

These alternative credits are available only for periods of service as an elected county officer.

The elected county officer may discontinue making the additional optional contributions by notifying the Fund in writing in accordance with this Section and procedures established by the board.

Additional optional contributions for the alternative annuity shall be as follows:

(1) For service as an elected county officer after the option is elected, an additional contribution of 3% of salary shall be contributed to the Fund on the same basis and under the same conditions as contributions required under Section 7-173.

(2) For service as an elected county officer before the option is elected, an additional contribution of 3% of the salary for the applicable period of service, plus interest at the effective rate from the date of service to the date of payment, plus any additional amount required by the county board under paragraph (3).

All payments for past service must be paid in full before credit is given.

(3) With respect to service as an elected county officer before the option is elected, if payment is made HB4973 Engrossed - 16 - LRB094 15880 AMC 51102 b after the county board has filed with the Board of the Fund a resolution or ordinance requiring an additional contribution under this paragraph, then the contribution required under paragraph (2) shall include an amount to be determined by the Fund, equal to the actuarial present value of the additional employer cost that would otherwise result from the alternative credits being established for that service.

A county board’s resolution or ordinance requiring additional contributions under this paragraph (3) is irrevocable.

No additional optional contributions may be made for any period of service for which credit has been previously forfeited by acceptance of a refund, unless the refund is repaid in full with interest at the effective rate from the date of refund to the date of repayment.

(b) In lieu of the retirement annuity otherwise payable under this Article, an elected county officer who (1) has elected to participate in the Fund and make additional optional contributions in accordance with this Section, (2) has held and made additional optional contributions with respect to the same elected county office for at least 8 years, and (3) has attained age 55 with at least 8 years of service credit (or has attained age 50 with at least 20 years of service as a sheriff’s law enforcement employee) may elect to have his retirement annuity computed as follows:

3% of the participant’s salary for each of the first 8 years of service credit, plus 4% of that salary for each of the next 4 years of service credit, plus 5% of that salary for each year of service credit in excess of 12 years, subject to a maximum of 80% of that salary.

This formula applies only to service in an elected county office that the officer held for at least 8 years, and only to service for which additional optional contributions have been paid under this Section.

If an elected county officer qualifies to have this formula applied to service in more than one elected county office, the qualifying service shall be accumulated for purposes of determining the applicable accrual HB4973 Engrossed - 17 - LRB094 15880 AMC 51102 b percentages, but the salary used for each office shall be the separate salary calculated for that office, as defined in subsection (g).

To the extent that the elected county officer has service credit that does not qualify for this formula, his retirement annuity will first be determined in accordance with this formula with respect to the service to which this formula applies, and then in accordance with the remaining Sections of this Article with respect to the service to which this formula does not apply.

(c) In lieu of the disability benefits otherwise payable under this Article, an elected county officer who (1) has elected to participate in the Fund, and (2) has become permanently disabled and as a consequence is unable to perform the duties of his office, and (3) was making optional contributions in accordance with this Section at the time the disability was incurred, may elect to receive a disability annuity calculated in accordance with the formula in subsection (b).

For the purposes of this subsection, an elected county officer shall be considered permanently disabled only if:

(i) disability occurs while in service as an elected county officer and is of such a nature as to prevent him from reasonably performing the duties of his office at the time;

and (ii) the board has received a written certification by at least 2 licensed physicians appointed by it stating that the officer is disabled and that the disability is likely to be permanent.

(d) Refunds of additional optional contributions shall be made on the same basis and under the same conditions as provided under Section 7-166, 7-167 and 7-168.

Interest shall be credited at the effective rate on the same basis and under the same conditions as for other contributions.

If an elected county officer fails to hold that same elected county office for at least 8 years, he or she shall be entitled after leaving office to receive a refund of the additional optional contributions made with respect to that office, plus interest at the effective rate.

HB4973 Engrossed - 18 - LRB094 15880 AMC 51102 b (e) The plan of optional alternative benefits and contributions shall be available to persons who are elected county officers and active contributors to the Fund on or after November 15, 1994 and have elected to establish alternative credit before the effective date of this amendatory Act of the 94th General Assembly.

A person who was an elected county officer and an active contributor to the Fund on November 15, 1994 but is no longer an active contributor may apply to make additional optional contributions under this Section at any time within 90 days after the effective date of this amendatory Act of 1997;

if the person is an annuitant, the resulting increase in annuity shall begin to accrue on the first day of the month following the month in which the required payment is received by the Fund.

(f) For the purposes of this Section and Section 7-145.2, the terms "elected county officer" and "elected county office" include, but are not limited to:

(1) the county clerk, recorder, treasurer, coroner, assessor (if elected), auditor, sheriff, and State’s Attorney;

members of the county board;

and the clerk of the circuit court;

and (2) a person who has been appointed to fill a vacancy in an office that is normally filled by election on a countywide basis, for the duration of his or her service in that office.

The terms "elected county officer" and "elected county office" do not include any officer or office of a county that has not consented to the availability of benefits under this Section and Section 7-145.2.

(g) For the purposes of this Section and Section 7-145.2, the term "salary" means the final rate of earnings for the elected county office held, calculated in a manner consistent with Section 7-116, but for that office only.

If an elected county officer qualifies to have the formula in subsection (b) applied to service in more than one elected county office, a separate salary shall be calculated and applied with respect to each such office.

(h) The changes to this Section made by this amendatory Act HB4973 Engrossed - 19 - LRB094 15880 AMC 51102 b of the 91st General Assembly apply to persons who first make an additional optional contribution under this Section on or after the effective date of this amendatory Act.

(Source:

P.A.

90-32, eff.

6-27-97;

91-685, eff.

1-26-00;

91-887, eff.

7-6-00.) (40 ILCS 5/7-153.1 new) Sec.

(c) Each participating municipality and each participating instrumentality shall remit payment of contributions for HB4973 - 17 - LRB094 15880 AMC 51102 b Social Security purposes on behalf of covered employees and covered municipalities and participating instrumentalities in the manner provided by law as required by the board and the State Agency established by the Social Security Enabling Act.

Contributions of covered employees to this fund for Federal Social Security purposes shall be paid to the HB4973 Engrossed - 20 - LRB094 15880 AMC 51102 b State Agency in such amounts and at such time as are designated by State laws or regulations.

(b) For the purpose of providing monies for municipality HB4973 - 18 - LRB094 15880 AMC 51102 b contributions, beginning for the year in which a municipality is included in this fund:

(2) A school district may levy a tax in an amount HB4973 Engrossed - 21 - LRB094 15880 AMC 51102 b reasonably calculated at the time of the levy to provide for the municipality contributions required under Section 7-172 of this Article for the fiscal years for which revenues from the levy will be received and all amounts due for municipal contributions for previous years.

The tax levy HB4973 - 19 - LRB094 15880 AMC 51102 b authorized by this Section may include the amount necessary to provide monies for this contribution.

(d-5) A school district participating in a special education joint agreement created under Section 10-22.31 of the School Code that is a participating instrumentality may include in the school district’s tax levy under this Section an amount HB4973 Engrossed - 22 - LRB094 15880 AMC 51102 b sufficient to provide its proportionate share of the municipality contributions for current and prior service by employees of the participating instrumentality created under the joint agreement.

Monies received by a county treasurer for use in making contributions to a regional office of education for its municipality contributions shall be held by him for that HB4973 - 20 - LRB094 15880 AMC 51102 b purpose and paid to the regional office of education in the same manner as other monies appropriated for the expense of the regional office.

7-30-98.) HB4973 Engrossed - 23 - LRB094 15880 AMC 51102 b (40 ILCS 5/7-172) (from Ch.

if it has fewer than 7 participating employees or has a negative balance in its municipality reserve, the greater of (A) an amount payable which, over a period of 20 years, will amortize at the effective rate for that year HB4973 - 21 - LRB094 15880 AMC 51102 b any unfunded obligation, computed as provided in paragraph 2 of subsection (b) or (B) the amount required by paragraph 1 of this subsection.

HB4973 Engrossed - 24 - LRB094 15880 AMC 51102 b The municipality contribution rate shall be determined for participating instrumentalities as if they were participating municipalities.

The percentage of earnings of the participating employees of all municipalities and participating instrumentalities necessary to provide the present value of all temporary and total and permanent disability HB4973 - 22 - LRB094 15880 AMC 51102 b benefits granted during the most recent year for which information is available.

The percentage of earnings of the participating employees of all participating municipalities and participating instrumentalities necessary to provide the present value of the net single sum death benefits expected HB4973 Engrossed - 25 - LRB094 15880 AMC 51102 b to become payable from the reserve established under Section 7-206 during the year for which this rate is fixed.

The Board may also provide that, in lieu of a separate municipality rate for these employees, a portion of the municipality contributions for such program participants shall be refunded or an extra charge assessed so that the amount of municipality contributions retained or received by the fund for all CETA program HB4973 - 23 - LRB094 15880 AMC 51102 b participants shall be an amount equal to that which would be provided by the separate municipality contribution rate for all such program participants.

In establishing the HB4973 Engrossed - 26 - LRB094 15880 AMC 51102 b municipality contribution rate as provided in paragraph (b) of this Section, the use of a separate municipality contribution rate for program participants or the refund of a portion of the municipality contributions, as the case may be, may be considered.

Any multiple-county or consolidated health department which receives contributions from a county under Section 11.2 of "An Act in relation to establishment and maintenance of county and multiple-county health departments", approved July 9, 1943, as amended, or distributions under Section 3 of the Department of Public Health Act, shall use these only for municipality HB4973 - 24 - LRB094 15880 AMC 51102 b contributions by the health department.

(g) Municipality contributions for the several purposes specified shall, for township treasurers and employees in the offices of the township treasurers who meet the qualifying conditions for coverage hereunder, be allocated among the several school districts and parts of school districts serviced HB4973 Engrossed - 27 - LRB094 15880 AMC 51102 b by such treasurers and employees in the proportion which the amount of school funds of each district or part of a district handled by the treasurer bears to the total amount of all school funds handled by the treasurer.

The failure to deduct any employee contributions shall not relieve the HB4973 - 25 - LRB094 15880 AMC 51102 b participating municipality or participating instrumentality of its obligation to this fund.

Municipality contributions, other than the amount necessary HB4973 Engrossed - 28 - LRB094 15880 AMC 51102 b for employee contributions and Social Security contributions, for periods of service by employees from whose earnings no deductions were made for employee contributions to the fund, may be charged to the municipality reserve for the municipality or participating instrumentality.

(k)(j) Each county with current or former elected county officers, as defined in Section 7-145.1, participating in the alternative annuity program established under that Section shall have a separate municipality contribution rate computed for those elected county officers.

an amount equal to the employee contributions provided by paragraphs (a) and (b) of Section 7-173, whether or not the employee contributions are withheld as HB4973 - 26 - LRB094 15880 AMC 51102 b permitted by that Section;

if it has no participating employees with current earnings, an amount payable which, over a period of 20 years beginning with the year following an award of HB4973 Engrossed - 29 - LRB094 15880 AMC 51102 b benefit, will amortize, at the effective rate for that year any unfunded obligation.

HB4973 - 27 - LRB094 15880 AMC 51102 b 2.

The percentage of earnings of the participating employees of each participating municipality and participating instrumentalities necessary to adjust for the difference between the present value of all benefits, excluding temporary and total and permanent disability and death benefits, to be provided for its participating HB4973 Engrossed - 30 - LRB094 15880 AMC 51102 b employees and the sum of its accumulated municipality contributions and the accumulated employee contributions and the present value of expected future employee and municipality contributions pursuant to subparagraph 1 of this paragraph (b).

HB4973 - 28 - LRB094 15880 AMC 51102 b In the event that the Board determines that there is an actuarial deficiency in the account of any municipality with respect to a person who has elected to participate in the Fund under Section 3-109.1 of this Code, the Board may adjust the municipality’s contribution rate so as to make up that deficiency over such reasonable period of time as the Board may HB4973 Engrossed - 31 - LRB094 15880 AMC 51102 b determine.

HB4973 - 29 - LRB094 15880 AMC 51102 b (f) Any municipality which is the recipient of State allocations representing that municipality’s contributions for retirement annuity purposes on behalf of its employees as provided in Section 12-21.16 of the Illinois Public Aid Code shall pay the allocations so received to the Board for such purpose.

Estimates of State allocations to be received during HB4973 Engrossed - 32 - LRB094 15880 AMC 51102 b any taxable year shall be considered in the determination of the municipality’s tax rate for that year under Section 7-171.

The municipality contribution rate for an educational service center shall initially be the same rate for each year as the regional office of education or school district which HB4973 - 30 - LRB094 15880 AMC 51102 b serves as its administrative agent.

The municipality contribution rate for a public agency, other than a vocational education cooperative, formed under the Intergovernmental Cooperation Act shall initially be the HB4973 Engrossed - 33 - LRB094 15880 AMC 51102 b average rate for the municipalities which are parties to the intergovernmental agreement.

(j) Notwithstanding the other provisions of this Section, the additional unfunded liability accruing as a result of this HB4973 - 31 - LRB094 15880 AMC 51102 b amendatory Act of the 94th General Assembly shall be amortized over a period of 30 years beginning on January 1 of the second calendar year following the calendar year in which this amendatory Act takes effect, except that the employer may provide for a longer amortization period by adopting a resolution or ordinance specifying a 35-year or 40-year period HB4973 Engrossed - 34 - LRB094 15880 AMC 51102 b and submitting a certified copy of the ordinance or resolution to the fund no later than June 1 of the calendar year following the calendar year in which this amendatory Act takes effect.

(b) Each employee shall make contributions to the fund for Federal Social Security taxes, for periods during which he is a covered employee, as required by the Social Security Enabling HB4973 - 32 - LRB094 15880 AMC 51102 b Act and federal law.

(c) Contributions shall be deducted from each corresponding payment of earnings paid to each employee and shall be remitted to the board by the participating HB4973 Engrossed - 35 - LRB094 15880 AMC 51102 b municipality or participating instrumentality making such payment.

An election under this subsection relieves the employer from making additional employer HB4973 - 33 - LRB094 15880 AMC 51102 b contributions in relation to that employee.

87-1265.) (40 ILCS 5/7-173.2)5/7-204) (from Ch.

7-173.2) Sec.

7-173.2.

Pickup of employee contributions.

(a) Until July 1, 1984, each participating municipality and each participating instrumentality may elect, for all of its employees, to pick up the employee contributions required by subparagraphs 1 and 3 of subsection (a) of Section 7-173 and, in the case of sheriff’s law enforcement employees, required by Section 7-173.1.

The pick up may be for employee contributions on earnings received by employees after December 31, 1981 and shall be applicable to the contributions on total earnings paid in any month.

The decision to pick up contributions shall be made by the governing body.

Beginning July 1, 1984, the pick up of employee contributions shall cease to be optional.

Each participating municipality and participating instrumentality shall pick up the employee contributions required by subparagraphs 1 and 3 of subsection (a) of Section 7-173 and, in the case of sheriff’s law enforcement employees, contributions required by Section 7-173.1, for all compensation earned after such date.

Each participating municipality shall also pick up any employee contributions made by its employees under the alternative program for elected county officers under Section 7-145.1.

(b) Contributions that are picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code.

The employee contribution shall be paid from the same source of funds as is used in payment of earnings to the employee and may not be paid from funds raised by the tax levy authorized by Section 7-171.

The contributions shall be picked up by a reduction in earnings payment to employees.

Employee contributions that are picked up shall be considered as earnings under Section 7-114.

If a participating municipality or participating instrumentality fails to report participating employee earnings which should HB4973 - 34 - LRB094 15880 AMC 51102 b have been reported to the fund and pays the employee the full amount of earnings including employee contributions which should have been picked up and forwarded to the fund, then the employee shall make payment of the employee contributions to the fund on behalf of employer and such contributions shall be considered as picked up contributions if paid in the year the earnings were received, or by January 31st of the following year, and are reflected as picked up on reports to the Internal Revenue Service.

If they cannot be so reflected, or if received after that date, they shall not be treated as picked up contributions.

Picked up employee contributions shall be considered as employee contributions in computing benefits paid under this Article 7.

(c) Subject to the requirements of federal law, an employee may elect to have the employer pick up optional contributions that the employee has elected to pay to the Fund, and the contributions so picked up shall be treated as employer contributions for the purposes of determining federal tax treatment.

The employer shall pick up the contributions by a reduction in the cash salary of the employee and shall pay the contributions from the same source of funds that is used to pay earnings to the employee.

The employee’s election to have the optional contributions picked up is irrevocable and the optional contributions may not thereafter be prepaid, by direct payment or otherwise.

(Source:

P.A.

90-766, eff.

8-14-98.) (40 ILCS 5/7-204) (from Ch.

108 1/2, par.

(a) Except as provided in paragraph (b) of this Section, HB4973 Engrossed - 36 - LRB094 15880 AMC 51102 b each participating municipality and its instrumentalities, and each participating instrumentality, shall be treated as an independent unit within the fund, except that if it has any sheriff’s law enforcement employees or any elected county officers (as defined in Section 7-154.1) participating in the alternative annuity program, it shall be treated as multiple 2 HB4973 - 35 - LRB094 15880 AMC 51102 b independent units, one for its sheriff’s law enforcement employees, one for its elected county officers participating in the alternative retirement program, and one the second for its other employees.

The remainder shall be allocated to the reserve for other HB4973 Engrossed - 37 - LRB094 15880 AMC 51102 b employees.

87-740.) HB4973 - 36 - LRB094 15880 AMC 51102 b (40 ILCS 5/7-205) (from Ch.

When a retirement annuity is granted to an employee with a spouse eligible for a surviving spouse annuity, there shall HB4973 Engrossed - 38 - LRB094 15880 AMC 51102 b be credited to the annuity reserve an amount to fund the cost of both the retirement and surviving spouse annuity as a joint and survivors annuity.

Beginning January 1, 1989, when a retirement annuity is awarded, an amount equal to the present value of the $3,000 death benefit payable upon the death of the annuitant shall be HB4973 - 37 - LRB094 15880 AMC 51102 b transferred to the annuity reserve from the appropriate municipality reserves in the same manner as the transfer for annuities.

Deduct all normal and additional contributions and contributions for federal Social Security taxes as required by the Social Security Enabling Act from each HB4973 Engrossed - 39 - LRB094 15880 AMC 51102 b payment of earnings payable to each participating employee who is entitled to any earnings from such municipality or instrumentality thereof or participating instrumentality, and remit all such normal and additional contributions immediately to the board and all such contributions for federal Social Security taxes in the manner provided by HB4973 - 38 - LRB094 15880 AMC 51102 b law;

HB4973 Engrossed - 40 - LRB094 15880 AMC 51102 b Section 95.

Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes HB4973 - 39 - LRB094 15880 AMC 51102 b made by this Act or (ii) provisions derived from any other Public Act.