Legislation 97th General Assembly (2011-2012)

House

HB3969
- GARS Pensionable Salary
Sponsor(s): Rep. Tom Cross (Sen. Matt Murphy)

HB 3969 as amended, makes two changes to the Pension Code. First, where a member of the General Assembly Retirement System receives a reciprocal pension and his or her Final Rate of Earnings, based on the service with another system, is higher than the Final Rate of Earnings that would have been used by GARS if there had been no reciprocity, then the increased cost of the proportional benefit paid by GARS would be charged to employer. HB 3969 also allows GARS members who first participated in the System prior to 8/22/1994 to voluntarily elect to subject themselves to the GARS earnings limitations that all GARS members that begin service after 8/22/1994 are subject to.

Status:

Public Act 97-0967

HB4622
- Technical Clean-up to SURS article
Sponsor(s): Rep. Elaine Nekritz (Sen. Iris Martinez)

HB 4622 performs technical clean-up to the SURS article and are as follows:

  • Correct Section 15-153.2 and Section 15-135 so that a recipient of a disability retirement annuity can elect to switch to and apply for a retirement annuity. The language of this Section is worded so that “participants” receiving a disability annuity elect to switch from a disability retirement annuity to a retirement annuity, but technically, once a participant begins receiving a disability retirement annuity they are no longer considered to be a participant. This language will technically achieve the intent, which allows those receiving a disability retirement annuity to apply for a retirement annuity when eligible to do so.
  • Reference Section 15-113.11 to Section 15-113 so that service includes periods for voluntary or involuntary furlough.
  • Change Section 15-136, strike out “prescribed” replace with “effective”. This is a technical change in that the “effective” rate of interest is used when determining benefits under money purchase, not the “prescribed” rate of interest. Section 15-125 clearly states that the effective rate of interest is to be used when determining benefits under money purchase formula (as a result of Public Act 94-4) but Section 15-136 was never amended to reflect this change.
  • Correction to Section 15-139(c) so that the Section uses the correct terminology when referencing an annuitant that elects to forgo his annuity and again becomes a participating employee. Currently reads, “if the annuitant’s employment is terminated.” Given the context and the defined terms in the statute, it might be best if this paragraph began “If the participant’s employment is terminated.”
  • Technical change to Section 15-136.4 regarding the time when a member in the Portable Plan must make an election to receive an optional form of benefit within 90 days before the annuity starting date. SURS would like to change the 90-day window to a 180-day window to coincide with the election rules for private sector plans under the Internal Revenue Code. The election described in this Section is to elect whether or not the participant will choose to receive their portable plan benefit as an annuity or as a lump sum.
Status:

Public Act 97-0933

HB4996
- SURS Return to Work
Sponsor(s): Daniel Biss

HB 4996 adopts new return to work restrictions for SURS-covered employers and SURS annuitants. Please note that these restrictions do not override the current SURS return to work restrictions and only apply to an SURS-covered employer that employs a SURS annuitant. There is no penalty to an annuitant that becomes an “affected annuitant” only a penalty to an SURS-covered employer that employs an affected annuitant. Note: This bill has yet to be signed by the Governor and shall only become law once it has been signed by the Governor.

Definition of Affected Annuitant

An employee becomes an affected annuitant the 1st day of an academic year following the academic year in which the annuitant first meets both of the following conditions:

  • works more than 18 paid weeks that occur after August 1, 2013. This limitation is cumulative and not particular to any single academic year; and
  • receive compensation during an academic year that begins after August 1, 2013 that is in excess of 40% of highest annual rate of earnings.

An annuitant must meet both of the following conditions and then be employed by an SURS-covered employer for an additional academic year after meeting the two conditions to become an “affected annuitant”. An employer is only required to make a payment to SURS when it employs a SURS annuitant for an additional academic year subsequent to the two conditions being met by the annuitant. It should also be mentioned that if an SURS-covered employer employs an affected annuitant for multiple academic years, that employer is required to make the payment for each academic it employs the affected annuitant. Finally, these conditions cannot be met until after August 1, 2013.

Employer payment to SURS for employing an affected annuitant

An employer who employs an affected annuitant for any additional academic years subsequent to the academic year in which the annuitant first becomes an affected annuitant, shall make payment to SURS in an amount equal to the affected annuitant’s annual retirement annuity. If SURS determines that an employer has failed to identify an affected annuitant, or has failed to notify SURS of any required information, the employer shall make payment to SURS in an amount equal to double the annual retirement annuity of the affected annuitant.

Status:

Public Act 97-0968.

HJR0093
- Explanation of HJRCA 49
Sponsor(s): Rep. Barbara Flynn Currie (Sen. Don Harmon)

With respect to HJRCA 49 (which provides that no benefit increase under any public pension or retirement system may become law without a three-fifths majority vote), sets forth a brief explanation of the proposed amendment, a brief argument in favor of the amendment, a brief argument against the amendment, and the form in which the amendment will appear on the ballot.

Status:

Adopted Both Houses

HJRCA49
- Limitation on Benefit Increases
Sponsor(s): Rep. Michael J. Madigan (Sen. John J. Cullerton)

HJRCA 49 provides that a bill shall not become a law without the concurrence of 3/5ths of members elected to each house of the General Assembly if that bill increases a benefit under any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof. The amendment provides if the Governor vetoes such a bill, then it shall not become law unless it is passed, upon its return, by a record vote of two-thirds of the members elected to each house of the General Assembly.

Status:

Adopted Both Houses

Appropriations

HR0706
- House Recommended Spending Limits for the FY 13 budget
Sponsor(s): Michael J. Madigan

HR 706 as amended establishes the House recommended spending limits for the FY 13 State budget. The resolution establishes that there is $33,719,000,000 available in general revenue funds for the FY 13 budget. This limit accounts for an allowance of an overall appropriation lapse of $650M. HR 706 also identifies the following items and the corresponding dollar amounts as “non–discretionary items” and states that such appropriations are to be made in full and will be treated with priority over the portion of the allocated budget deemed “discretionary”.

Non–discretionary budget items include:

  • Pension Contribution – $5.1B (this amount only includes appropriations to the State Retirement Systems from General Revenue funds. It must be mentioned that SURS will receive $160M from the State Pensions Fund and SERS will receive approximately $550M from the Other State/Federal Funds).
  • Group Insurance – $1,171,185,400
  • Debt Service – $2,218,000,000
  • Statutory Transfers Out – $2,142,000,000
  • Medicaid – $6,638,953,200
  • For backlog of unpaid State obligations from the Medicaid Program – $1B (but 50% will be provided by Federal reimbursements).
  • For backlog of unpaid State obligations not related to Medicaid – $300M

Discretionary Budget Items

After such non–discretionary items are budgeted for and appropriated, the following House Committees will be allocated the remainder of the budget in the following manner:

  • Appropriations – Elementary and Secondary Education – $6,491,836,800 (39.83%)
  • Appropriations – Higher Education – $1,978,809,900 (12.14%)
  • Appropriations – General Services – $1,165,014,700 (7.14%)
  • Appropriations – Human Services – $5,087,296,500 (31.21%)
  • Appropriations – Public Safety – $1,576,088,900 (9.67%)

The amount allocated to each House Appropriations Committee under HR 706 is contingent upon the legislature to reduce Medicaid obligations by $2.7B, and if the legislature fails to reduce Medicaid obligations by this amount, then such allocations to each appropriation committee shall be adjusted accordingly.

Status:

Resolution Adopted as Amended (91-16-3)

SB2348
- SURS FY 13 Appropriation
Sponsor(s): Sen. Heather A. Steans (Rep. Michael J. Madigan)

SB 2348 appropriates the full Fiscal Year 2013 certified contribution to SURS. The contribution is $1,402,800,000. $1,252,800,000 is appropriated from the Education Assistance Fund and $150,000,000 is appropriated from the State Pensions Fund.

The bill does not appropriate College Insurance Program’s Fiscal Year 2013 certified contribution of $4,175,820; however, the bill does appropriate $36 million to the College Insurance Program for payment of claims made prior to June 30, 2012.

Status:

Public Act 97-0685

Senate

SB0179
- Creation of the State Actuary
Sponsor(s): Sen. James F. Clayborne, Jr. (Rep Michael J. Madigan)

SB 179 provides that a State Actuary is created under the Office of the Auditor General. The State Actuary will review actuarial assumptions utilized by the State Retirement Systems. Each November 1st, the Systems shall submit their proposed certified contributions for the next fiscal year to the State Actuary. By January 1st of each year, the State Actuary may make recommendations concerning System assumptions used to determine the proposed certified contribution.

If the State Actuary makes recommendations concerning System assumptions, the System must consider the recommendations before finalizing its certified contribution on January 15th. Each System must note any deviation between its assumptions and the assumptions recommended by the State Actuary, the reason for any deviation, and the fiscal impact of any deviation.

Status:

Public Act 97-0694

SB1313
- State Retiree Health Insurance Reform
Sponsor(s): Sen. Jeffrey M. Schoenberg (Rep. Michael J. Madigan)

SB 1313 reforms state retiree health insurance. The bill does not reform CIP or TRIP. The bill provides that CMS shall determine the state's contribution to the program and removes the current law formula that determines annuitant premiums. Current law allows members to earn a 5% premium reimbursement per year of service up to a maximum of 100%.

The CMS determination will influence the level of annuitant premium reimbursement. Premium reimbursement rates shall be the same for all annuitants, but rates may differ depending on whether or not an annuitant is eligible for Medicare and rates may differ for SURS annuitants who made an election under Section 15-135.1. (Annuitants who make an election under Section 15-135.1 forfeit their flat 2.2% multiplier in exchange for a graduated multiplier and State paid premiums for retiree health insurance.)

It is unclear as to how CMS will determine the annuitant premium reimbursements, but CMS has said that several factors will be used to make that determination, including pension income and years of service.

Status:

Public Act 97-0695