text:
HB1641 Enrolled                                LRB9001767MWpc
AN ACT in relation to public  employees,  amending  named
Section 1.  The State Employees Group  Insurance  Act  of
1971 is amended by changing Section 3 as follows:
(5 ILCS 375/3) (from Ch. 127, par. 523)
(Text of Section before amendment by P.A. 89-507)
Sec.   3.  Definitions.   Unless  the  context  otherwise
requires, the following words and phrases as used in this Act
shall have the following meanings.  The Department may define
these and other words and phrases separately for the  purpose
of  implementing  specific  programs providing benefits under
(a)  "Administrative  service  organization"  means   any
person,  firm  or  corporation experienced in the handling of
claims  which  is  fully  qualified,  financially  sound  and
capable of meeting the service requirements of a contract  of
administration executed with the Department.
(b)  "Annuitant"  means  (1)  an employee who retires, or
has retired, on or after January  1,  1966  on  an  immediate
annuity under the provisions of Articles 2, 14, 15 (including
an  employee  who  has  retired and is receiving a retirement
annuity under an optional program established  under  Section
15-158.2  and  who  would  also  be eligible for a retirement
annuity had that person  been  a  participant  in  the  State
University  Retirement  System),  paragraphs  (b)  or  (c) of
Section 16-106, or Article 18 of the Illinois  Pension  Code;
(2)  any  person  who  was receiving group insurance coverage
under this Act as of March 31, 1978 by reason of  his  status
as an annuitant, even though the annuity in relation to which
such coverage was provided is a proportional annuity based on
less  than  the  minimum  period  of  service  required for a
retirement annuity in the system involved; (3) any person not
otherwise  covered  by  this  Act  who  has  retired   as   a
participating  member under Article 2 of the Illinois Pension
Code but is  ineligible  for  the  retirement  annuity  under
Section 2-119 of the Illinois Pension Code; (4) the spouse of
any  person  who  is  receiving  a  retirement  annuity under
Article 18 of the Illinois Pension Code and  who  is  covered
under  a  group  health  insurance  program  sponsored  by  a
governmental  employer  other  than the State of Illinois and
who has irrevocably elected to  waive  his  or  her  coverage
under  this  Act  and to have his or her spouse considered as
the "annuitant" under this Act and not as a  "dependent";  or
(5) an employee who retires, or has retired, from a qualified
position, as determined according to rules promulgated by the
Director,  under  a qualified local government or a qualified
rehabilitation facility  or  a  qualified  domestic  violence
shelter  or  service.  (For definition of "retired employee",
see (p) post).
(c)  "Carrier"  means  (1)  an   insurance   company,   a
corporation   organized  under  the  Limited  Health  Service
Organization Act or the Voluntary Health Services Plan Act, a
partnership, or other nongovernmental organization, which  is
authorized  to  do  group  life  or  group  health  insurance
business  in  Illinois,  or  (2)  the  State of Illinois as a
self-insurer.
(d)  "Compensation" means salary or wages  payable  on  a
regular  payroll  by  the State Treasurer on a warrant of the
State Comptroller out of any State, trust or federal fund, or
by the Governor of the State through a disbursing officer  of
the  State  out of a trust or out of federal funds, or by any
Department out of State, trust, federal or other  funds  held
by  the  State Treasurer or the Department, to any person for
personal  services  currently  performed,  and  ordinary   or
accidental  disability  benefits  under  Articles  2,  14, 15
(including ordinary or accidental disability  benefits  under
an  optional  program  established  under  Section 15-158.2),
paragraphs (b) or (c) of Section 16-106, or Article 18 of the
Illinois Pension Code, for disability incurred after  January
1,  1966, or benefits payable under the Workers' Compensation
or Occupational Diseases Act or benefits payable under a sick
pay plan established in accordance with  Section  36  of  the
State  Finance Act. "Compensation" also means salary or wages
paid to an employee of  any  qualified  local  government  or
qualified  rehabilitation  facility  or  a qualified domestic
violence shelter or service.
(e)  "Commission"  means  the   State   Employees   Group
Insurance   Advisory   Commission  authorized  by  this  Act.
Commencing July 1, 1984, "Commission" as  used  in  this  Act
means   the   Illinois  Economic  and  Fiscal  Commission  as
established by the Legislative Commission Reorganization  Act
of 1984.
(f)  "Contributory",  when  referred  to  as contributory
coverage, shall mean optional coverages or  benefits  elected
by  the  member  toward  the  cost of which such member makes
contribution, or which are funded in whole or in part through
the acceptance of a reduction in earnings or the foregoing of
an increase in earnings by an employee, as distinguished from
noncontributory coverage or benefits which are paid  entirely
by  the  State  of Illinois without reduction of the member's
salary.
(g)  "Department"  means  any  department,   institution,
board,  commission, officer, court or any agency of the State
government  receiving  appropriations  and  having  power  to
certify payrolls to the Comptroller authorizing  payments  of
salary  and  wages against such appropriations as are made by
the General Assembly from any State fund,  or  against  trust
funds  held  by  the  State  Treasurer and includes boards of
trustees of the retirement systems created by Articles 2, 14,
15, 16 and 18 of the  Illinois  Pension  Code.   "Department"
also  includes  the  Illinois  Comprehensive Health Insurance
Board, the Board of Examiners established under the  Illinois
Public Accounting Act, and the Illinois Rural Bond Bank.
(h)  "Dependent", when the term is used in the context of
the  health  and  life  plan, means a member's spouse and any
unmarried child (1) from birth to age 19 including an adopted
child, a child who lives with the member from the time of the
filing of a petition for adoption until entry of an order  of
adoption,  a stepchild or recognized child who lives with the
member in a parent-child relationship, or a child  who  lives
with  the member if such member is a court appointed guardian
of the child, or (2) age 19 to 23  enrolled  as  a  full-time
student  in any accredited school, financially dependent upon
the member, and eligible as a dependent  for  Illinois  State
income tax purposes, or (3) age 19 or over who is mentally or
physically  handicapped  as defined in the Illinois Insurance
Code. For the health plan only,  the  term  "dependent"  also
includes  any  person enrolled prior to the effective date of
this Section who is dependent upon the member to  the  extent
that  the  member  may  claim  such person as a dependent for
Illinois State income tax deduction purposes; no  other  such
person may be enrolled.
(i)  "Director"   means  the  Director  of  the  Illinois
Department of Central Management Services.
(j)  "Eligibility period" means  the  period  of  time  a
member  has  to  elect  enrollment  in  programs or to select
benefits without regard to age, sex or health.
(k)  "Employee"  means  and  includes  each  officer   or
employee  in the service of a department who (1) receives his
compensation for service rendered  to  the  department  on  a
warrant   issued   pursuant  to  a  payroll  certified  by  a
department or on a warrant or check issued  and  drawn  by  a
department  upon  a  trust,  federal  or  other  fund or on a
warrant issued pursuant to a payroll certified by an  elected
or  duly  appointed  officer  of  the  State  or who receives
payment of the performance of personal services on a  warrant
issued  pursuant  to  a payroll certified by a Department and
drawn by the Comptroller upon  the  State  Treasurer  against
appropriations  made by the General Assembly from any fund or
against trust funds held by the State Treasurer, and  (2)  is
employed  full-time  or  part-time  in  a  position  normally
requiring actual performance of duty during not less than 1/2
of  a  normal  work period, as established by the Director in
cooperation with each department, except that persons elected
by popular vote  will  be  considered  employees  during  the
entire  term  for  which they are elected regardless of hours
devoted to the service of the  State,  and  (3)  except  that
"employee" does not include any person who is not eligible by
reason  of  such person's employment to participate in one of
the State retirement systems under Articles 2, 14, 15 (either
the  regular  Article  15  system  or  an  optional   program
established under Section 15-158.2) or 18, or under paragraph
(b)  or  (c) of Section 16-106, of the Illinois Pension Code,
but such term does include persons who  are  employed  during
the  6  month  qualifying  period  under  Article  14  of the
Illinois Pension Code.  Such term also  includes  any  person
who  (1)  after  January  1,  1966,  is receiving ordinary or
accidental disability  benefits  under  Articles  2,  14,  15
(including  ordinary  or accidental disability benefits under
an optional  program  established  under  Section  15-158.2),
Illinois  Pension Code, for disability incurred after January
1, 1966, (2) receives  total  permanent  or  total  temporary
disability   under   the   Workers'   Compensation   Act   or
Occupational Disease Act as a result of injuries sustained or
illness contracted in the course of employment with the State
of  Illinois,  or (3) is not otherwise covered under this Act
and has retired as a participating member under Article 2  of
the   Illinois   Pension  Code  but  is  ineligible  for  the
retirement  annuity  under  Section  2-119  of  the  Illinois
Pension Code.  However, a person who satisfies  the  criteria
of  the  foregoing  definition of "employee" except that such
person  is  made  ineligible  to  participate  in  the  State
Universities Retirement System by clause  (4)  of  the  first
paragraph  of  Section 15-107 of the Illinois Pension Code is
also an "employee" for the purposes of this Act.   "Employee"
also  includes  any person receiving or eligible for benefits
under a sick pay plan established in accordance with  Section
36  of  the  State Finance Act. "Employee" also includes each
officer or employee in  the  service  of  a  qualified  local
government,   including  persons  appointed  as  trustees  of
sanitary districts regardless of hours devoted to the service
of the sanitary district, and each employee in the service of
a  qualified  rehabilitation  facility  and  each   full-time
employee  in  the  service  of  a qualified domestic violence
shelter  or  service,  as  determined  according   to   rules
promulgated by the Director.
(l)  "Member"   means  an  employee,  annuitant,  retired
employee or survivor.
(m)  "Optional  coverages  or   benefits"   means   those
coverages  or  benefits available to the member on his or her
voluntary election, and at his or her own expense.
(n)  "Program" means the  group  life  insurance,  health
benefits  and other employee benefits designed and contracted
for by the Director under this Act.
(o)  "Health plan" means a self-insured health  insurance
program  offered by the State of Illinois for the purposes of
benefiting employees by means  of  providing,  among  others,
wellness  programs,  utilization reviews, second opinions and
medical fee reviews, as well as for paying for  hospital  and
medical care up to the maximum coverage provided by the plan,
to its members and their dependents.
(p)  "Retired  employee" means any person who would be an
annuitant as that term is defined herein  but  for  the  fact
that such person retired prior to January 1, 1966.  Such term
also  includes any person formerly employed by the University
of Illinois in the Cooperative Extension Service who would be
an annuitant but for the  fact  that  such  person  was  made
ineligible   to   participate   in   the  State  Universities
Retirement System by clause (4) of  the  first  paragraph  of
Section 15-107 of the Illinois Pension Code.
(q)  "Survivor"  means a person receiving an annuity as a
survivor of an employee or of an annuitant.  "Survivor"  also
includes:  (1)  the  surviving  dependent  of  a  person  who
satisfies  the  definition  of  "employee"  except  that such
paragraph of Section 15-107 of the Illinois Pension Code; and
(2)  the  surviving dependent of any person formerly employed
by the University of Illinois in  the  Cooperative  Extension
Service  who  would  be an annuitant except for the fact that
such person was made ineligible to participate in  the  State
Universities  Retirement  System  by  clause (4) of the first
paragraph of Section 15-107 of the Illinois Pension Code.
(r)  "Medical  services"  means  the  services   provided
within  the  scope  of their licenses by practitioners in all
categories licensed under the Medical Practice Act of 1987.
(s)  "Unit  of  local  government"  means   any   county,
municipality,  township, school district, special district or
other unit, designated as a unit of local government by  law,
which  exercises  limited  governmental  powers  or powers in
respect to limited governmental subjects, any  not-for-profit
association   with   a  membership  that  primarily  includes
townships  and  township  officials,  that  has  duties  that
include  provision  of  research  service,  dissemination  of
information, and other acts  for  the  purpose  of  improving
township  government,  and that is funded wholly or partly in
accordance with Section  85-15  of  the  Township  Code;  any
not-for-profit  corporation or association, with a membership
consisting primarily of municipalities, that operates its own
utility   system,   and    provides    research,    training,
dissemination  of  information,  or  other  acts  to  promote
cooperation  between  and  among  municipalities that provide
utility services and for the advancement  of  the  goals  and
purposes  of  its membership; and the Illinois Association of
Park Districts.  "Qualified local government" means a unit of
local government approved by the Director  and  participating
in  a  program  created under subsection (i) of Section 10 of
(t)  "Qualified  rehabilitation   facility"   means   any
not-for-profit   organization   that  is  accredited  by  the
Commission on Accreditation of Rehabilitation  Facilities  or
certified   by   the   Department     of  Mental  Health  and
Developmental Disabilities to  provide  services  to  persons
with  disabilities and which receives funds from the State of
Illinois  for  providing  those  services,  approved  by  the
Director  and  participating  in  a  program  created   under
subsection (j) of Section 10 of this Act.
(u)  "Qualified  domestic  violence  shelter  or service"
means any Illinois domestic violence shelter or  service  and
its  administrative offices funded by the Illinois Department
of Public Aid, approved by the Director and participating  in
a program created under subsection (k) of Section 10.
(v)  "TRS benefit recipient" means a person who:
(1)  is  not  a "member" as defined in this Section;
(2)  is receiving a monthly  benefit  or  retirement
annuity  under  Article  16 of the Illinois Pension Code;
(3)  either (i) has at least 8 years  of  creditable
service under Article 16 of the Illinois Pension Code, or
(ii) was enrolled in the health insurance program offered
under  that  Article  on January 1, 1996, or (iii) is the
survivor of a benefit recipient who had at least 8  years
of  creditable  service  under Article 16 of the Illinois
Pension Code or was  enrolled  in  the  health  insurance
program  offered under that Article on the effective date
of this amendatory Act of 1995, or (iv) is a recipient or
survivor of a recipient of  a  disability  benefit  under
Article 16 of the Illinois Pension Code.
(w)  "TRS dependent beneficiary" means a person who:
(1)  is  not a "member" or "dependent" as defined in
this Section; and
(2)  is a TRS benefit recipient's: (A)  spouse,  (B)
dependent parent who is receiving at least half of his or
her  support  from  the  TRS  benefit  recipient,  or (C)
unmarried natural or adopted child who is (i)  under  age
19,  or  (ii)  enrolled  as  a  full-time  student  in an
accredited school, financially  dependent  upon  the  TRS
benefit  recipient,  eligible as a dependent for Illinois
State income tax purposes, and either is under age 24  or
was,  on  January  1,  1996, participating as a dependent
beneficiary in the health insurance program offered under
Article 16 of the Illinois Pension Code, or (iii) age  19
or  over  who  is  mentally  or physically handicapped as
defined in the Illinois Insurance Code.
(x)  "Military leave with pay  and  benefits"  refers  to
individuals  in basic training for reserves, special/advanced
training, annual training, emergency call up,  or  activation
by  the  President of the United States with approved pay and
(y)  "Military leave without pay and benefits" refers  to
individuals who enlist for active duty in a regular component
of  the  U.S.  Armed  Forces  or  other duty not specified or
authorized under military leave with pay and benefits.
(Source: P.A. 88-670,  eff.  12-2-94;  89-21,  eff.  6-21-95;
89-25,   eff.  6-21-95;  89-76,  eff.  7-1-95;  89-324,  eff.
8-13-95; 89-430, eff. 12-15-95; 89-502, eff. 7-1-96;  89-628,
eff. 8-9-96; revised 8-23-96.)
(Text of Section after amendment by P.A. 89-507)
certified  by  the Department of Human Services (as successor
to  the  Department  of  Mental  Health   and   Developmental
Disabilities)   to   provide   services   to   persons   with
disabilities  and  which  receives  funds  from  the State of
its  administrative offices funded by the Department of Human
Services (as successor to the Illinois Department  of  Public
Aid), approved by the Director and participating in a program
created under subsection (k) of Section 10.
eff. 7-1-97; 89-628, eff. 8-9-96; revised 8-23-96.)
Section  1.5.   The  Property  Tax  Code  is  amended  by
changing Section 18-185 as follows:
(35 ILCS 200/18-185)
Sec. 18-185.  Short title; definitions.  This Section and
Sections  18-190  through 18-245 may be cited as the Property
Tax Extension Limitation Law.  As  used  in  Sections  18-190
through 18-245:
"Consumer Price Index" means the Consumer Price Index for
All  Urban  Consumers  for  all items published by the United
States Department of Labor.
"Extension limitation" means (a) the lesser of 5% or  the
percentage  increase  in  the Consumer Price Index during the
12-month calendar year preceding the levy  year  or  (b)  the
rate of increase approved by voters under Section 18-205.
"Affected  county"  means  a  county of 3,000,000 or more
inhabitants or a county contiguous to a county  of  3,000,000
or more inhabitants.
"Taxing  district"  has  the  same  meaning  provided  in
Section  1-150, except as otherwise provided in this Section.
For the 1991 through 1994 levy years only, "taxing  district"
includes  only  each non-home rule taxing district having the
majority of its 1990  equalized  assessed  value  within  any
county  or  counties contiguous to a county with 3,000,000 or
more inhabitants.  Beginning with the 1995 levy year, "taxing
district" includes only each non-home  rule  taxing  district
subject  to  this  Law  before  the  1995  levy year and each
non-home rule taxing district not subject to this Law  before
the  1995 levy year having the majority of its 1994 equalized
assessed value in an affected county or counties.   Beginning
with  the levy year in which this Law becomes applicable to a
taxing  district  as  provided  in  Section  18-213,  "taxing
district" also includes those taxing districts  made  subject
to this Law as provided in Section 18-213.
"Aggregate  extension" for taxing districts to which this
Law applied before  the  1995  levy  year  means  the  annual
corporate extension for the taxing district and those special
purpose  extensions  that  are  made  annually for the taxing
district, excluding special purpose extensions: (a) made  for
the  taxing  district to pay interest or principal on general
obligation bonds that were approved by referendum;  (b)  made
for  any  taxing  district  to  pay  interest or principal on
general obligation bonds issued before October 1,  1991;  (c)
made  for any taxing district to pay interest or principal on
bonds issued to refund or  continue  to  refund  those  bonds
issued  before  October  1,  1991;  (d)  made  for any taxing
district to pay interest or  principal  on  bonds  issued  to
refund  or  continue  to refund bonds issued after October 1,
1991 that were approved  by  referendum;  (e)  made  for  any
taxing district to pay interest or principal on revenue bonds
issued before October 1, 1991 for payment of which a property
tax  levy  or  the full faith and credit of the unit of local
government is pledged; however, a  tax  for  the  payment  of
interest or principal on those bonds shall be made only after
the governing body of the unit of local government finds that
all  other sources for payment are insufficient to make those
payments; (f) made for payments under a  building  commission
lease when the lease payments are for the retirement of bonds
issued  by  the commission before October 1, 1991, to pay for
the  building  project;  (g)  made  for  payments  due  under
installment contracts entered into before  October  1,  1991;
(h)  made  for  payments  of  principal and interest on bonds
issued under the Metropolitan Water Reclamation District  Act
to  finance construction projects initiated before October 1,
1991; (i) made for payments  of  principal  and  interest  on
limited   bonds,  as  defined  in  Section  3  of  the  Local
Government Debt Reform Act, in an amount not  to  exceed  the
debt  service  extension  base  less the amount in items (b),
(c), (e), and  (h)  of  this  definition  for  non-referendum
obligations,  except obligations initially issued pursuant to
referendum; and  (j)  made  for  payments  of  principal  and
interest  on  bonds  issued  under  Section  15  of the Local
Government Debt Reform Act; and (k) made by a school district
that participates in the Special Education District  of  Lake
County,  created  by  special education joint agreement under
Section 10-22.31 of the  School  Code,  for  payment  of  the
school  district's  share  of  the  amounts  required  to  be
contributed  by the Special Education District of Lake County
to the Illinois Municipal Retirement Fund under Article 7  of
the  Illinois Pension Code; the amount of any extension under
this item (k) shall be certified by the  school  district  to
the county clerk.
"Aggregate  extension"  for the taxing districts to which
this Law did not apply before  the  1995  levy  year  (except
taxing  districts  subject  to  this  Law  in accordance with
Section 18-213) means the annual corporate extension for  the
taxing district and those special purpose extensions that are
made  annually  for  the  taxing  district, excluding special
purpose extensions: (a) made for the taxing district  to  pay
interest  or  principal on general obligation bonds that were
approved by referendum; (b) made for any taxing  district  to
pay  interest or principal on general obligation bonds issued
before March 1, 1995; (c) made for any taxing district to pay
interest or principal on bonds issued to refund  or  continue
to  refund  those bonds issued before March 1, 1995; (d) made
for any taxing district to pay interest or principal on bonds
issued to refund or continue to  refund  bonds  issued  after
March  1, 1995 that were approved by referendum; (e) made for
any taxing district to pay interest or principal  on  revenue
bonds  issued  before  March  1,  1995 for payment of which a
property tax levy or the full faith and credit of the unit of
local government is pledged; however, a tax for  the  payment
of  interest  or  principal on those bonds shall be made only
after the governing body of  the  unit  of  local  government
finds  that all other sources for payment are insufficient to
make those payments; (f) made for payments under  a  building
commission   lease  when  the  lease  payments  are  for  the
retirement of bonds issued by the commission before March  1,
1995  to  pay for the building project; (g) made for payments
due under installment contracts entered into before March  1,
1995;  (h)  made  for  payments  of principal and interest on
bonds  issued  under  the  Metropolitan   Water   Reclamation
District  Act  to  finance  construction  projects  initiated
before  October  1,  1991; (i) made for payments of principal
and interest on limited bonds, as defined in Section 3 of the
Local Government Debt Reform Act, in an amount not to  exceed
the debt service extension base less the amount in items (b),
(c),  (e),  and  (h)  of  this  definition for non-referendum
obligations, except obligations initially issued pursuant  to
referendum;  (j)  made for payments of principal and interest
on bonds issued under Section 15 of the Local Government Debt
Reform Act; (k) made for payments of principal  and  interest
on  bonds  authorized  by  Public Act 88-503 and issued under
Section 20a of the Chicago Park District Act for aquarium  or
museum  projects;  and (l) made for payments of principal and
interest on bonds authorized by Public Act 87-1191 and issued
under Section 42 of the Cook County Forest Preserve  District
Act for zoological park projects.
"Aggregate  extension"  for all taxing districts to which
this Law applies in accordance with  Section  18-213,  except
for  those  taxing  districts  subject  to  paragraph  (2) of
subsection (e) of Section 18-213, means the annual  corporate
extension  for  the taxing district and those special purpose
extensions that are made annually for  the  taxing  district,
excluding special purpose extensions: (a) made for the taxing
district  to  pay interest or principal on general obligation
bonds that were approved by  referendum;  (b)  made  for  any
taxing  district  to  pay  interest  or  principal on general
obligation  bonds  issued  before  the  date  on  which   the
referendum  making this Law applicable to the taxing district
is held; (c) made for any taxing district to pay interest  or
principal  on  bonds  issued  to refund or continue to refund
those bonds issued before the date on  which  the  referendum
making  this  Law  applicable to the taxing district is held;
(d) made for any taxing district to pay interest or principal
on bonds issued to refund or continue to refund bonds  issued
after  the  date  on  which  the  referendum  making this Law
applicable to the taxing district is held if the  bonds  were
approved by referendum after the date on which the referendum
(e) made for any taxing district to pay interest or principal
on  revenue  bonds  issued  before  the  date  on  which  the
referendum making this Law applicable to the taxing  district
is  held for payment of which a property tax levy or the full
faith and credit of the unit of local government is  pledged;
however,  a  tax  for the payment of interest or principal on
those bonds shall be made only after the  governing  body  of
the unit of local government finds that all other sources for
payment are insufficient to make those payments; (f) made for
payments  under  a  building  commission lease when the lease
payments are for  the  retirement  of  bonds  issued  by  the
commission  before  the  date  on which the referendum making
this Law applicable to the taxing district is held to pay for
installment contracts entered into before the date  on  which
the  referendum  making  this  Law  applicable  to the taxing
district is held; (h) made  for  payments  of  principal  and
interest  on  limited  bonds,  as defined in Section 3 of the
(c),   and   (e)   of   this  definition  for  non-referendum
referendum;  (i)  made for payments of principal and interest
Reform Act; and (j) made for a qualified airport authority to
pay interest or principal on general obligation bonds  issued
for the purpose of paying obligations due under, or financing
airport  facilities  required  to  be  acquired, constructed,
installed or equipped pursuant  to,  contracts  entered  into
before  March  1,  1996  (but not including any amendments to
such a contract taking effect on or after that date).
"Aggregate extension" for all taxing districts  to  which
this   Law  applies  in  accordance  with  paragraph  (2)  of
subsection (e) of Section 18-213 means the  annual  corporate
obligation bonds issued before the  effective  date  of  this
amendatory  Act  of 1997; (c) made for any taxing district to
pay interest or  principal  on  bonds  issued  to  refund  or
continue  to  refund  those bonds issued before the effective
date of this amendatory Act of 1997; (d) made for any  taxing
district  to  pay  interest  or  principal on bonds issued to
refund or continue to refund bonds issued after the effective
date of this  amendatory  Act  of  1997  if  the  bonds  were
approved  by  referendum  after  the  effective  date of this
amendatory Act of 1997; (e) made for any taxing  district  to
pay  interest or principal on revenue bonds issued before the
effective date of this amendatory Act of 1997 for payment  of
which a property tax levy or the full faith and credit of the
unit  of  local government is pledged; however, a tax for the
payment of interest or principal on those bonds shall be made
only after the governing body of the unit of local government
finds that all other sources for payment are insufficient  to
make  those  payments; (f) made for payments under a building
commission  lease  when  the  lease  payments  are  for   the
retirement  of  bonds  issued  by  the  commission before the
effective date of this amendatory Act of 1997 to pay for  the
building project; (g) made for payments due under installment
contracts  entered  into  before  the  effective date of this
amendatory Act of 1997; (h) made for  payments  of  principal
Local  Government Debt Reform Act, in an amount not to exceed
(c),  and  (e)  of   this   definition   for   non-referendum
referendum; (i) made for payments of principal  and  interest
airport facilities  required  to  be  acquired,  constructed,
installed  or  equipped  pursuant  to, contracts entered into
before March 1, 1996 (but not  including  any  amendments  to
"Debt  service  extension  base" means an amount equal to
that portion of the extension for a taxing district  for  the
1994 levy year, or for those taxing districts subject to this
Law  in  accordance  with  Section  18-213,  except for those
subject to paragraph (2) of subsection (e) of Section 18-213,
for the levy year in which the  referendum  making  this  Law
applicable  to  the  taxing  district  is  held, or for those
taxing districts subject  to  this  Law  in  accordance  with
paragraph  (2)  of  subsection  (e) of Section 18-213 for the
1996 levy year, constituting  an  extension  for  payment  of
principal and interest on bonds issued by the taxing district
without referendum, but not including (i) bonds authorized by
Public Act 88-503 and issued under Section 20a of the Chicago
Park  District  Act  for  aquarium  and museum projects; (ii)
bonds issued under Section 15 of the  Local  Government  Debt
Reform  Act;  or (iii) refunding obligations issued to refund
or  to  continue  to  refund  obligations  initially   issued
pursuant  to referendum.  The debt service extension base may
be established or increased as provided under Section 18-212.
"Special purpose extensions" include, but are not limited
to, extensions  for  levies  made  on  an  annual  basis  for
unemployment   and   workers'  compensation,  self-insurance,
contributions to pension plans, and extensions made  pursuant
to  Section  6-601  of  the  Illinois Highway Code for a road
district's permanent road fund  whether  levied  annually  or
not.   The  extension  for  a  special  service  area  is not
included in the aggregate extension.
"Aggregate extension base" means  the  taxing  district's
last preceding aggregate extension as adjusted under Sections
18-215 through 18-230.
"Levy  year" has the same meaning as "year" under Section
"New property" means (i) the assessed value, after  final
board   of   review  or  board  of  appeals  action,  of  new
improvements or additions to  existing  improvements  on  any
parcel  of  real property that increase the assessed value of
that real property during the levy  year  multiplied  by  the
equalization  factor  issued  by the Department under Section
17-30 and (ii) the  assessed  value,  after  final  board  of
review  or  board  of  appeals  action,  of real property not
exempt from real estate taxation,  which  real  property  was
exempt  from  real  estate  taxation  for  any portion of the
immediately  preceding   levy   year,   multiplied   by   the
"Qualified airport authority" means an airport  authority
organized  under the Airport Authorities Act and located in a
county bordering on the  State  of  Wisconsin  and  having  a
population in excess of 200,000 and not greater than 500,000.
"Recovered  tax  increment value" means the amount of the
current year's equalized assessed value, in  the  first  year
after a municipality terminates the designation of an area as
a redevelopment project area previously established under the
Tax  Increment  Allocation  Development  Act  in the Illinois
Municipal Code, previously established under  the  Industrial
Jobs   Recovery  Law  in  the  Illinois  Municipal  Code,  or
previously established under the  Economic  Development  Area
Tax  Increment  Allocation  Act,  of each taxable lot, block,
tract, or  parcel  of  real  property  in  the  redevelopment
project  area  over  and above the initial equalized assessed
value of each property in the redevelopment project area.
Except as otherwise provided in this  Section,  "limiting
rate"  means  a  fraction  the numerator of which is the last
preceding aggregate extension base times an amount  equal  to
one plus the extension limitation defined in this Section and
the  denominator  of  which  is  the current year's equalized
assessed value of all real property in  the  territory  under
the jurisdiction of the taxing district during the prior levy
year.    For   those  taxing  districts  that  reduced  their
aggregate extension for the last  preceding  levy  year,  the
highest  aggregate  extension  in any of the last 3 preceding
levy years shall be used for the  purpose  of  computing  the
limiting   rate.   The  denominator  shall  not  include  new
property.  The denominator shall not  include  the  recovered
tax increment value.
(Source:  P.A.  88-455;  89-1,  eff.  2-12-95;  89-138,  eff.
7-14-95;  89-385,  eff. 8-18-95; 89-436, eff. 1-1-96; 89-449,
eff. 6-1-96; 89-510, eff. 7-11-96; 89-718, eff. 3-7-97.)
Section 2.  The  Illinois  Pension  Code  is  amended  by
changing   Sections  1-113,  5-152.1,  7-132,  7-171,  8-138,
8-150.1,  8-154,  8-159,  8-226,  11-134,  11-145.1,  11-149,
11-154, 11-215, 14-103.04, 14-104, 15-106, 15-112,  15-113.2,
15-113.3,  15-113.4,  15-113.5,  15-113.7,  15-125, 15-136.2,
15-143, 15-153.2, 15-157, 15-167.2, 15-185,  15-190,  15-191,
16-140,  and  16-163  and  adding Sections 8-138.3, 9-121.15,
9-220.1,  11-133.2,  14-104.10,  14-105.7,  and  15-168.1  as
(40 ILCS 5/1-113) (from Ch. 108 1/2, par. 1-113)
Sec.  1-113.   Investment  authority.    The   investment
authority  of  a  board of trustees of a retirement system or
pension  fund  established  under  this  Code  shall,  if  so
provided in the Article establishing such  retirement  system
or pension fund, embrace the following investments:
(1)  Bonds,  notes  and  other  direct obligations of the
United States Government; bonds, notes and other  obligations
of  any  United  States Government agency or instrumentality,
whether or not guaranteed; and obligations the principal  and
interest  of  which  are  guaranteed  unconditionally  by the
United States Government or by an agency  or  instrumentality
thereof.
(2)  Obligations  of the Inter-American Development Bank,
the International Bank for  Reconstruction  and  Development,
the  African  Development  Bank,  the  International  Finance
Corporation, and the Asian Development Bank.
(3)  Obligations  of  any  state,  or  of  any  political
subdivision  in  Illinois,  or  of  any county or city in any
other state having a population as shown by the last  federal
census of not less than 30,000 inhabitants provided that such
political  subdivision  is  not  permitted  by  law to become
indebted in excess  of  10%  of  the  assessed  valuation  of
property  therein  and  has not defaulted for a period longer
than 30 days in the payment of interest and principal on  any
of its general obligations or indebtedness during a period of
10 calendar years immediately preceding such investment.
(4)  Nonconvertible  bonds,  debentures,  notes and other
corporate obligations of any corporation created or  existing
under the laws of the United States or any state, district or
territory  thereof, provided there has been no default on the
obligations of the corporation or its  predecessor(s)  during
the  5 calendar years immediately preceding the purchase.  Up
to 5% of the assets  of  a  pension  fund  established  under
Article  9  of  this  Code  may be invested in nonconvertible
bonds, debentures, notes, and other corporate obligations  of
corporations  created or existing under the laws of a foreign
country,  provided  there  has  been  no   default   on   the
obligations of the corporation or its predecessors during the
5 calendar years immediately preceding the date of purchase.
(5)  Obligations  guaranteed by the Government of Canada,
or by any Province of Canada, or by any Canadian city with  a
population of not less than 150,000 inhabitants, provided (a)
they  are  payable  in  United States currency and are exempt
from any Canadian withholding tax; (b) the investment in  any
one  issue  of  bonds  shall  not  exceed  10%  of the amount
outstanding; and (c) the total investments at book  value  in
Canadian  securities  shall  be  limited  to  5% of the total
investment account of the board at book value.
(5.1)  Direct obligations of the State of Israel for  the
payment  of  money,  or  obligations for the payment of money
which are guaranteed as  to  the  payment  of  principal  and
interest by the State of Israel, or common or preferred stock
or  notes issued by a bank owned or controlled in whole or in
part by the State of Israel, on the following conditions:
(a)  The total investments in such obligations shall
not  exceed  5%  of  the  book  value  of  the  aggregate
investments owned by the board;
(b)  The State of Israel shall not be in default  in
the payment of principal or interest on any of its direct
general obligations on the date of such investment;
(c)  The bonds, stock or notes, and interest thereon
shall be payable in currency of the United States;
(d)  The  bonds  shall (1) contain an option for the
redemption thereof after 90 days from date of purchase or
(2) either become due 5 years  from  the  date  of  their
purchase  or  be subject to redemption 120 days after the
date of notice for redemption;
(e)  The investment in these  obligations  has  been
approved in writing by investment counsel employed by the
board, which counsel shall be a national or state bank or
trust  company  authorized  to do a trust business in the
State of Illinois, or  an  investment  advisor  qualified
under  the  Federal  Investment  Advisors Act of 1940 and
registered under the Illinois Securities Act of 1953;
(f)  The fund or system making the investment  shall
have at least $5,000,000 of net present assets.
(6)  Notes  secured by mortgages under Sections 203, 207,
220 and 221 of the National Housing Act which are insured  by
the  Federal  Housing Commissioner, or his successor assigns,
or  debentures  issued  by  such  Commissioner,   which   are
guaranteed  as  to  principal  and  interest  by  the Federal
Housing  Administration,  or  agency  of  the  United  States
Government,  provided  the  aggregate  investment  shall  not
exceed 20% of the total investment account of  the  board  at
book  value, and provided further that the investment in such
notes under Sections 220 and 221 shall  in  no  event  exceed
one-half  of  the  maximum  investment  in  notes  under this
(7)  Loans to veterans guaranteed in whole or part by the
United States Government pursuant to Title III of the Act  of
Congress  known  as  the  "Servicemen's  Readjustment  Act of
1944,"  58  Stat.  284,  38  U.S.C.  693,   as   amended   or
supplemented  from  time  to  time,  provided such guaranteed
loans are liens upon real estate.
(8)  Common and preferred  stocks  and  convertible  debt
securities authorized for investment of trust funds under the
laws of the State of Illinois, provided:
(a)  the   common  stocks,  except  as  provided  in
subparagraph (h), are listed  on  a  national  securities
exchange  as  defined  in the Federal Securities Exchange
Act, or quoted in the National Association of  Securities
Dealers Automated Quotation System (NASDAQ);
(b)  the  securities are of a corporation created or
existing under the laws  of  the  United  States  or  any
state,  district  or territory thereof, except that up to
5% of the assets of  a  pension  fund  established  under
Article  9  of  this  Code  may be invested in securities
issued by corporations created or existing under the laws
of a foreign country, if those securities  are  otherwise
in conformance with this paragraph (8);
(c)  the corporation is not in arrears on payment of
dividends on its preferred stock;
(d)  the   total   book  value  of  all  stocks  and
convertible debt owned by any pension fund or  retirement
system  shall  not exceed 40% of the aggregate book value
of all investments of such  pension  fund  or  retirement
system,  except  for  a  pension  fund or retirement that
system governed by Article 9 or 17, where  the  total  of
all  stocks  and convertible debt shall not exceed 50% of
the aggregate book value of all fund investments;
(e)  the book value of stock  and  convertible  debt
investments in any one corporation shall not exceed 5% of
the  total investment account at book value in which such
securities are held, determined as of  the  date  of  the
investment,  and  the investments in the stock of any one
corporation shall not exceed 5% of the total  outstanding
stock  of  such  corporation,  and the investments in the
convertible debt of any one corporation shall not  exceed
5%  of  the  total  amount  of  such  debt  that  may  be
outstanding;
(f)  the  straight  preferred  stocks or convertible
preferred stocks  and  convertible  debt  securities  are
issued  or guaranteed by a corporation whose common stock
qualifies for investment by the board; and
(g)  that any common stocks not listed or quoted  as
provided  in  subdivision  8(a)  above  be limited to the
following types of institutions: (a) any bank which is  a
member  of  the  Federal  Deposit  Insurance  Corporation
having   capital  funds  represented  by  capital  stock,
surplus and undivided profits of  at  least  $20,000,000;
(b)  any  life  insurance  company  having  capital funds
represented by capital stock, special surplus  funds  and
unassigned  surplus  totalling  at least $50,000,000; and
(c)  any  fire  or  casualty  insurance  company,  or   a
combination  thereof, having capital funds represented by
capital stock, net surplus and voluntary reserves  of  at
least $50,000,000.
(9)  Withdrawable accounts of State chartered and federal
chartered  savings  and  loan  associations  insured  by  the
Federal  Savings  and Loan Insurance Corporation; deposits or
certificates of deposit in State and national  banks  insured
by  the  Federal  Deposit  Insurance  Corporation;  and share
accounts or share certificate accounts in a State or  federal
credit  union,  the accounts of which are insured as required
by The Illinois Credit Union Act or the Federal Credit  Union
Act, as applicable.
No  bank  or  savings  and loan association shall receive
investment funds as permitted by this subsection (9),  unless
it has complied with the requirements established pursuant to
Section 6 of the Public Funds Investment Act.
(10)  Trading,  purchase  or  sale  of  listed options on
underlying securities owned by the board.
(11)  Contracts  and  agreements   supplemental   thereto
providing  for  investments  in the general account of a life
insurance company authorized to do business in Illinois.
(12)  Conventional mortgage pass-through securities which
are  evidenced  by  interests  in   Illinois   owner-occupied
residential  mortgages,  having  not  less than an "A" rating
from at least one national securities  rating  service.  Such
mortgages  may  have loan-to-value ratios up to 95%, provided
that any amount over  80%  is  insured  by  private  mortgage
insurance.  The  pool  of  such mortgages shall be insured by
mortgage guaranty or equivalent insurance, in accordance with
industry standards.
(13)  Pooled or commingled funds managed by a national or
State bank which is authorized to do a trust business in  the
State  of Illinois, shares of registered investment companies
as defined in the federal  Investment  Company  Act  of  1940
which are registered under that Act, and separate accounts of
a  life  insurance  company  authorized  to  do  business  in
Illinois,  where  such pooled or commingled funds, shares, or
separate  accounts  are  comprised  of  common  or  preferred
stocks, bonds, or money market instruments.
State  of  Illinois,  separate  accounts  managed  by  a life
insurance company authorized to do business in Illinois,  and
commingled  group  trusts  managed  by  an investment adviser
registered under the federal Investment Advisors Act of  1940
(15  U.S.C.  80b-1 et seq.) and under the Illinois Securities
Law of 1953, where such pooled or commingled funds,  separate
accounts  or  commingled  group  trusts are comprised of real
estate or loans upon real estate secured by first  or  second
mortgages.  The total investment in such pooled or commingled
funds,  commingled  group  trusts and separate accounts shall
not exceed 10% of the aggregate book value of all investments
owned by the fund.
(15)  Investment companies which (a)  are  registered  as
such  under  the  Investment  Company  Act  of  1940, (b) are
diversified, open-end management investment companies and (c)
invest only in money market instruments.
(16)  Up to 10% of the assets of the fund may be invested
in investments not included in paragraphs (1) through (15) of
this Section, provided that such investments comply with  the
requirements  and  restrictions  set forth in Sections 1-109,
1-109.1, 1-109.2, 1-110 and 1-111 of this Code.
The board shall have the authority  to  enter  into  such
agreements  and to execute such documents as it determines to
be necessary to complete any investment transaction.
Any limitations herein set forth shall be applicable only
at the time of purchase and shall not require the liquidation
of any investment at any time.
All investments shall be clearly held and  accounted  for
to  indicate  ownership  by such board. Such board may direct
the registration of securities in its own name or in the name
of a nominee created for the express purpose of  registration
of  securities  by  a national or state bank or trust company
authorized to conduct  a  trust  business  in  the  State  of
Investments  shall  be carried at cost or at a book value
determined in accordance with generally  accepted  accounting
principles  and accounting procedures approved by such board.
No adjustments shall be made in  investment  carrying  values
for  ordinary current market price fluctuations; but reserves
may be provided to account for possible losses or  unrealized
gains as determined by such board.
The book value of investments held by any pension fund or
retirement  system  in  one  or  more  commingled  investment
accounts  shall  be the cost of its units of participation in
such commingled account or accounts as recorded on the  books
of such board.
(Source: P.A. 86-272; 87-575; 87-794; 87-895.)
(40 ILCS 5/5-152.1)
Sec. 5-152.1. Parent's annuity.
(a)  A parent's annuity shall be provided for the natural
parent  or  parents  of  a policeman who dies on or after the
effective date of this amendatory Act of 1996  while  (i)  in
active  service,  (ii)  disabled and in receipt of or pending
receipt of a disability benefit, (iii) on  leave  of  absence
with  whole or part pay, (iv) on leave of absence without pay
during a period of not more than 3 months in  the  aggregate,
(v)  in receipt of annuity granted after 20 years of service,
or (vi) out of the service after  20  years  of  service  and
pending receipt of annuity to which the policeman has a right
upon  attainment  of  age  50 or more.  However, the parent's
annuity is payable only if there is no  surviving  spouse  or
child  entitled  to an annuity as a result of the policeman's
death, and satisfactory proof is submitted to the board  that
the  policeman  was contributing to the support of the parent
or parents at the time of death.
(b)  Beginning July 1, 1997, a parent's annuity shall  be
available to the natural parent or parents of a policeman who
died  before August 9, 1996 while (i) in active service, (ii)
disabled and in receipt of or pending receipt of a disability
benefit, (iii) on leave of absence with whole  or  part  pay,
(iv)  on  leave of absence without pay during a period of not
more than 3 months  in  the  aggregate,  (v)  in  receipt  of
annuity granted after 20 years of service, or (vi) out of the
service  after  20  years  of  service and pending receipt of
annuity to which the policeman has a right upon attainment of
age 50 or more.  However, the  parent's  annuity  is  payable
only  if there is no surviving spouse or child entitled to an
annuity  as  a  result  of   the   policeman's   death,   and
satisfactory  proof  is  submitted  to  the  board  that  the
policeman  was  contributing  to the support of the parent or
parents at the time of death.   The  parent's  annuity  shall
begin  no  earlier  than the first day of the month following
the month in which the application for  parent's  annuity  is
received by the Fund.
(c)  The  parent's  annuity  shall  be 18% of the current
annual salary attached to the classified position held by the
policeman at the time of death or withdrawal from service for
each eligible surviving parent, payable on a monthly basis.
Sec.   7-132.  Municipalities,   instrumentalities    and
participating instrumentalities included and effective dates.
(A)  Municipalities and their instrumentalities.
(a)  The  following  described  municipalities,  but  not
including  any  with more than 1,000,000 inhabitants, and the
instrumentalities thereof, shall be included  within  and  be
subject  to  this  Article beginning upon the effective dates
specified by the Board:
(1)  Except   as   to   the    municipalities    and
instrumentalities  thereof  specifically  excluded  under
this  Article,  every  county  shall  be  subject to this
Article, and all cities, villages and incorporated  towns
having  a  population  in  excess of 5,000 inhabitants as
determined by the last preceding decennial or  subsequent
federal   census,   shall  be  subject  to  this  Article
following publication of the census by the Bureau of  the
Census.   Within 90 days after publication of the census,
the Board shall notify any municipality that  has  become
subject  to  this Article as a result of that census, and
shall provide information to the corporate authorities of
the municipality explaining the duties  and  consequences
of  participation.  The notification shall also include a
proposed   date   upon   which   participation   by   the
municipality will commence.
However, for any city, village or incorporated  town
that  attains  a  population over 5,000 inhabitants after
having  provided  social  security   coverage   for   its
employees   under   the  Social  Security  Enabling  Act,
participation under this Article shall not  be  mandatory
but may be elected in accordance with subparagraph (3) or
(4) of this paragraph (a), whichever is applicable.
(2)  School districts, other than those specifically
excluded  under  this  Article,  shall be subject to this
Article, without election, with respect to all  employees
(3)  Towns   and   all   other  bodies  politic  and
corporate which are formed by vote of, or are subject  to
control  by,  the  electors  in  towns and are located in
towns which are not participating municipalities  on  the
effective  date  of  this Act, may become subject to this
Article by election pursuant to Section 7-132.1.
(4)  Any  other  municipality  (together  with   its
instrumentalities),   other   than   those   specifically
excluded   from  participation  and  those  described  in
paragraph (3) above, may elect to be included  either  by
referendum  under  Section  7-134 or by the adoption of a
resolution or ordinance by its governing body.  A copy of
such  resolution  or  ordinance  duly  authenticated  and
certified by the  clerk  of  the  municipality  or  other
appropriate   official   of   its  governing  body  shall
constitute the required  notice  to  the  board  of  such
(b)  A  municipality that is about to begin participation
shall submit to the Board an application to participate, in a
form acceptable to the Board, not later than 90 days prior to
the proposed effective  date  of  participation.   The  Board
shall  act  upon  the  application  within 90 days, and if it
finds  that  the  application  is  in  conformity  with   its
requirements   and   the   requirements   of   this  Article,
participation by the  applicant  shall  commence  on  a  date
acceptable  to  the  municipality and specified by the Board,
but in  no  event  more  than  one  year  from  the  date  of
(c)  A  participating  municipality which succeeds to the
functions of a participating municipality which is  dissolved
or  terminates  its existence shall assume and be transferred
the net accumulation balance in the municipality reserve  and
the municipality account receivable balance of the terminated
municipality.
(d)  In  the  case  of  a  Veterans Assistance Commission
whose employees were being treated by the Fund on January  1,
1990 as employees of the county served by the Commission, the
Fund  may  continue  to  treat  the employees of the Veterans
Assistance Commission as county employees for the purposes of
this Article, unless the Commission becomes  a  participating
instrumentality  in  accordance  with  subsection (B) of this
(B)  Participating instrumentalities.
(a)  The participating  instrumentalities  designated  in
paragraph (b) of this subsection shall be included within and
be subject to this Article if:
(1)  an   application  to  participate,  in  a  form
acceptable to the Board and adopted by a two-thirds  vote
of  the  governing  body,  is  presented to the Board not
later than 90 days prior to the proposed effective  date;
(2)  the  Board  finds  that  the  application is in
conformity with its requirements, that the applicant  has
reasonable  expectation to continue as a political entity
for a period of at least 10 years and has the prospective
financial  capacity  to  meet  its  current  and   future
obligations to the Fund, and that the actuarial soundness
of  the  Fund may be reasonably expected to be unimpaired
by approval of participation by the applicant.
The Board shall notify  the  applicant  of  its  findings
within  90  days  after receiving the application, and if the
Board  approves  the  application,   participation   by   the
applicant  shall  commence on the effective date specified by
the Board.
(b)  The following  participating  instrumentalities,  so
long  as  they meet the requirements of Section 7-108 and the
area served by them  or  within  their  jurisdiction  is  not
located  entirely  within a municipality having more than one
million inhabitants, may be included hereunder:
i.  Township School District Trustees.
ii.  Multiple   County   and   Consolidated   Health
Departments created under Division 5-25 of  the  Counties
Code or its predecessor law.
iii.  Public  Building Commissions created under the
Public Building Commission Act, and located  in  counties
of less than 1,000,000 inhabitants.
iv.  A   multitype,   consolidated   or  cooperative
library system created under the Illinois Library  System
Act.   Any  library  system  created  under  the Illinois
Library System Act that has one or more predecessors that
participated in the Fund may participate in the Fund upon
application.  The Board shall  establish  procedures  for
implementing  the transfer of rights and obligations from
the predecessor system to the successor system.
v.  Regional  Planning  Commissions  created   under
Division  5-14  of  the  Counties Code or its predecessor
vi.  Local Public Housing Authorities created  under
the  Housing Authorities Act, located in counties of less
than 1,000,000 inhabitants.
vii.  Illinois Municipal League.
viii.  Northeastern   Illinois   Metropolitan   Area
Planning Commission.
ix.  Southwestern   Illinois    Metropolitan    Area
x.  Illinois Association of Park Districts.
xi.  Illinois  Supervisors, County Commissioners and
Superintendents of Highways Association.
xii.  Tri-City Regional Port District.
xiii.  An     association,     or     not-for-profit
corporation, membership  in  which  is  authorized  under
Section 85-15 of the Township Code.
xiv.  Drainage   Districts   operating   under   the
Illinois Drainage Code.
xv.  Local  mass transit districts created under the
Local Mass Transit District Act.
xvi.  Soil and water conservation districts  created
under the Soil and Water Conservation Districts Law.
xvii.  Commissions  created  to provide water supply
or sewer services or both under Division 135 or  Division
136 of Article 11 of the Illinois Municipal Code.
xviii.  Public  water  districts  created  under the
Public Water District Act.
xix.  Veterans  Assistance  Commissions  established
under Section 9 of the Military Veterans  Assistance  Act
that  serve  counties  with  a  population  of  less than
xx.  The governing body of an entity, other  than  a
vocational   education   cooperative,  created  under  an
intergovernmental   cooperative   agreement   established
between   participating    municipalities    under    the
Intergovernmental  Cooperation Act, which by the terms of
the agreement is the employer of the  persons  performing
services  under  the agreement under the usual common law
rules  determining  the  employer-employee  relationship.
The  governing  body   of   such   an   intergovernmental
cooperative  entity established prior to July 1, 1988 may
make participation retroactive to the effective  date  of
the   agreement   and,  if  so,  the  effective  date  of
participation shall be the date the required  application
is  filed with the fund.  If any such entity is unable to
pay the required employer contributions to the fund, then
the participating municipalities shall  make  payment  of
the  required  contributions  and  the  payments shall be
allocated as provided in the  agreement  or,  if  not  so
provided, equally among them.
xxi.  The Illinois Municipal Electric Agency.
xxii.  The Waukegan Port District.
xxiii.   The  Fox  Waterway Agency created under the
Fox Waterway Agency Act.
(c)  The governing  boards  of  special  education  joint
agreements  created under Section 10-22.31 of the School Code
without designation of an administrative district,  shall  be
included   within   and   be   subject  to  this  Article  as
participating  instrumentalities  when  the  joint  agreement
becomes effective.  However, the governing board of any  such
special  education joint agreement in effect before September
5, 1975 shall not be subject to this Article unless the joint
agreement is modified by the school districts to provide that
the governing board is subject to  this  Article,  except  as
otherwise provided by this Section.
The  governing board of the Special Education District of
Lake County  shall  become  subject  to  this  Article  as  a
participating    instrumentality    on    July    1,    1997.
Notwithstanding  subdivision  (a)1  of  Section 7-139, on the
effective date of participation, employees of  the  governing
board  of the Special Education District of Lake County shall
receive creditable service for their prior service with  that
employer,  up  to  a maximum of 5 years, without any employee
contribution.  Employees may establish creditable service for
the remainder of their prior service with that  employer,  if
any,   by   applying   in  writing  and  paying  an  employee
contribution in an amount determined by the  Fund,  based  on
the  employee  contribution  rates  in  effect at the time of
application for the creditable  service  and  the  employee's
salary  rate  on the effective date of participation for that
employer, plus interest at the effective rate from  the  date
of the prior service to the date of payment.  Application for
this creditable service must be made before July 1, 1998; the
payment  may  be made at any time while the employee is still
in service.  The employer may  elect  to  make  the  required
contribution on behalf of the employee.
The   governing   board  of  a  special  education  joint
agreement created under Section 10-22.31 of the  School  Code
for  which an administrative district has been designated, if
there are employees of the cooperative educational entity who
are not employees of the administrative district,  may  elect
to  participate  in  the  Fund  and  be  included within this
Article as a participating instrumentality, subject  to  such
application procedures and rules as the Board may prescribe.
The Boards of Control of cooperative or joint educational
programs  or  projects created and administered under Section
3-15.14 of the School Code, whether or not the Boards  act as
their own administrative district, shall be  included  within
and   be   subject   to   this   Article   as   participating
instrumentalities   when   the   agreement  establishing  the
cooperative or joint educational program or  project  becomes
agreement entered into after  June  30,  1984  and  prior  to
September  17,  1985 which provides for representation on the
governing board by less than all the participating  districts
shall  be  included  within  and subject to this Article as a
participating instrumentality.  Such participation  shall  be
effective   as  of  the  date  the  joint  agreement  becomes
The  governing  boards  of  educational  service  centers
established under Section 2-3.62 of the School Code shall  be
included  within and subject to this Article as participating
instrumentalities.   The  governing  boards   of   vocational
education    cooperative   agreements   created   under   the
Intergovernmental Cooperation Act and approved by  the  State
Board of Education shall be included within and be subject to
this Article as participating instrumentalities.  If any such
governing  boards  or boards of control are unable to pay the
required employer contributions to the fund, then the  school
districts  served  by  such  boards  shall  make  payment  of
required  contributions  as  provided  in Section 7-172.  The
payments  shall  be  allocated  among  the   several   school
districts  in proportion to the number of students in average
daily attendance for the  last  full  school  year  for  each
district  in  relation  to  the  total  number of students in
average attendance for such period for all districts  served.
If  such  educational  service  centers, vocational education
cooperatives or cooperative or joint educational programs  or
projects  created  and  administered under Section 3-15.14 of
the School Code are dissolved,  the  assets  and  obligations
shall   be  distributed  among  the  districts  in  the  same
proportions unless otherwise provided.
(d)  The governing boards  of  special  recreation  joint
agreements  created  under Section 8-10b of the Park District
Code, operating  without  designation  of  an  administrative
district  or  an  administrative  municipality  appointed  to
administer  the program operating under the authority of such
joint agreement shall be included within and  be  subject  to
this  Article  as  participating  instrumentalities  when the
joint agreement becomes effective.   However,  the  governing
board  of  any  such  special  recreation  joint agreement in
effect before January 1, 1980 shall not be  subject  to  this
Article  unless  the  joint  agreement  is  modified,  by the
districts  and  municipalities  which  are  parties  to   the
agreement,  to provide that the governing board is subject to
this Article.
If  the  Board  returns   any   employer   and   employee
contributions  to  any  employer  which erroneously submitted
such contributions on behalf of a  special  recreation  joint
agreement, the Board shall include interest computed from the
end  of  each year to the date of payment, not compounded, at
the rate of 7% per annum.
(e)  Each multi-township assessment district,  the  board
of  trustees  of  which has adopted this Article by ordinance
prior  to  April  1,   1982,   shall   be   a   participating
instrumentality  included  within and subject to this Article
effective December 1, 1981. The contributions required  under
Section  7-172 shall be included in the budget prepared under
and allocated in accordance with Section 2-30 of the Property
(f)  Beginning  January   1,   1992,   each   prospective
participating  municipality  or participating instrumentality
shall pay to the Fund the cost, as determined by  the  Board,
of a study prepared by the Fund or its actuary, detailing the
prospective costs of participation in the Fund to be expected
by the municipality or instrumentality.
(Source: P.A. 88-670, eff. 12-2-94, 89-162, eff. 7-19-95.)
Sec. 7-171. Finance; taxes.
(a)  Each municipality other than a school district shall
appropriate  an  amount sufficient to provide for the current
municipality contributions required by Section 7-172 of  this
Article,  for  the fiscal year for which the appropriation is
made and all amounts  due  for  municipal  contributions  for
previous years. Those municipalities which have been assessed
an  annual  amount  to  amortize  its unfunded obligation, as
provided in subparagraph 5 of paragraph (a) of Section  7-172
of this Article, shall include in the appropriation an amount
sufficient  to  pay  the  amount assessed.  The appropriation
shall be based upon  an  estimate  of  assets  available  for
municipality  contributions  and liabilities therefor for the
fiscal  year  for  which  appropriations  are  to  be   made,
including  funds  available  from  levies for this purpose in
prior years.
(b)  For the purpose of providing monies for municipality
contributions, beginning for the year in which a municipality
is included in this fund:
(1)  A municipality other than a school district may
levy a tax which shall not exceed the amount appropriated
for municipality contributions.
(2)  A school district may levy a tax in  an  amount
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.   Any
levy adopted before the effective date of this amendatory
Act  of  1995  by  a  school district shall be considered
valid and authorized to the extent that  the  amount  was
7-172 for the fiscal years for which  revenues  from  the
levy  will  be received and all amounts due for municipal
contributions for previous years.  In no  event  shall  a
budget  adopted by a school district limit a levy of that
school district adopted under this Section.
(c)  Any county which is a part of an educational service
region comprised of two or more counties formed under Section
3A of The School Code may include  in  its  appropriation  an
amount  sufficient  to provide its proportionate share of the
municipality  contributions  of  the  region.  The  tax  levy
authorized by this Section may include an amount necessary to
provide monies for this contribution.
(d)  Any county that  is  a  part  of  a  multiple-county
health  department or consolidated health department which is
formed under "An Act in relation  to  the  establishment  and
maintenance  of  county  and  multiple-county  public  health
departments", approved July 9, 1943, as amended, and which is
a  participating  instrumentality may include in the county's
appropriation   an   amount   sufficient   to   provide   its
proportionate share  of  municipality  contributions  of  the
department.   The  tax  levy  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 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.
(e)  Such  tax  shall  be  levied  and  collected in like
manner, with the general taxes of the municipality and  shall
be  in  addition to all other taxes which the municipality is
now or may hereafter be authorized to levy upon  all  taxable
property  therein,  and shall be exclusive of and in addition
to the amount  of  tax  levied  for  general  purposes  under
Section  8-3-1 of the "Illinois Municipal Code", approved May
29, 1961, as amended, or under any other law  or  laws  which
may  limit  the amount of tax which the municipality may levy
for general purposes.  The tax may be levied by the governing
body of the municipality without being  authorized  as  being
additional  to all other taxes by a vote of the people of the
(f)  The county clerk of the county  in  which  any  such
municipality  is  located,  in  reducing tax levies shall not
consider any such tax as a part of the general tax  levy  for
municipality  purposes, and shall not include the same in the
limitation of any other tax rate which may be extended.
(g)  The amount of the tax  to  be  levied  in  any  year
shall,  within the limits herein prescribed, be determined by
the governing body of the respective municipality.
(h)  The revenue derived from any such tax levy shall  be
used only for the purposes specified in this Article, and, as
collected, shall be paid to the treasurer of the municipality
levying  the  tax.  Monies received by a county treasurer for
use in making contributions  to  a  consolidated  educational
service  region  for  its municipality contributions shall be
held by him for that purpose and paid to the  region  in  the
same  manner  as other monies appropriated for the expense of
the region.
Sec. 8-138.  Minimum annuities - Additional provisions.
(a)  An employee who withdraws after age 65 or more  with
at  least 20 years of service, for whom the amount of age and
service and prior service annuity combined is less  than  the
amount  stated  in  this  Section,  shall  from  the  date of
withdrawal, instead of all annuities otherwise  provided,  be
entitled  to receive an annuity for life of $150 a year, plus
1 1/2% for each year of service, to and including  20  years,
and  1  2/3%  for  each year of service over 20 years, of his
highest average annual salary for  any  4  consecutive  years
within the last 10 years of service immediately preceding the
date of withdrawal.
An  employee  who  withdraws  after  20  or more years of
service, before age 65, shall be entitled to such annuity, to
begin not earlier than upon attained age of 55 years if under
such age at withdrawal, reduced by 2% for each full  year  or
fractional  part  thereof  that his attained age is less than
65, plus an additional 2% reduction for  each  full  year  or
fractional part thereof that his attained age when annuity is
to  begin  is less than 60 so that the total reduction at age
55 shall be 30%.
(b)  An employee who withdraws after July 1, 1957, at age
60 or over, with 20 or more years of service,  for  whom  the
age  and  service and prior service annuity combined, is less
than the amount stated in this  paragraph,  shall,  from  the
date of withdrawal, instead of such annuities, be entitled to
receive  an annuity for life equal to 1 2/3% for each year of
service, of the highest  average  annual  salary  for  any  5
consecutive  years  within  the  last  10  years  of  service
immediately  preceding the date of withdrawal; provided, that
in the case of any employee who withdraws on or after July 1,
1971, such employee age 60 or over with 20 or more  years  of
service, shall receive an annuity for life equal to 1.67% for
each  of the first 10 years of service; 1.90% for each of the
next 10 years of service; 2.10% for each year of  service  in
excess of 20 but not exceeding 30; and 2.30% for each year of
service  in excess of 30, based on the highest average annual
salary for any 4 consecutive years within the last  10  years
of service immediately preceding the date of withdrawal.
An  employee  who withdraws after July 1, 1957 and before
January 1, 1988, with 20 or more years of service, before age
60 years is entitled to annuity, to begin  not  earlier  than
upon  attained  age  of  55  years,  if  under  such  age  at
withdrawal,  as  computed  in  the  last preceding paragraph,
reduced 0.25% for each full month or fractional part  thereof
that  his  attained age when annuity is to begin is less than
60 if the employee was born before January 1, 1936,  or  0.5%
for  each  such  month  if  the employee was born on or after
Any employee born before January 1, 1936,  who  withdraws
with 20 or more years of service, and any employee with 20 or
more  years  of  service who withdraws on or after January 1,
1988, may elect to receive, in lieu  of  any  other  employee
annuity  provided  in this Section, an annuity for life equal
to 1.80% for each of the first 10 years of service, 2.00% for
each of the next 10 years of service, 2.20% for each year  of
service  in  excess of 20 but not exceeding 30, and 2.40% for
each year of service in excess of 30, of the highest  average
annual  salary for any 4 consecutive years within the last 10
years  of  service  immediately   preceding   the   date   of
withdrawal, to begin not earlier than upon attained age of 55
years,  if  under  such  age at withdrawal, reduced 0.25% for
each full month or fractional part thereof that his  attained
age  when annuity is to begin is less than 60; except that an
employee retiring on or after January 1, 1988, at age  55  or
over  but  less  than  age  60,  having  at least 35 years of
service, or an employee retiring on or after July 1, 1990, at
age 55 or over but less than age 60, having at least 30 years
of service, or an employee retiring on or after the effective
date of this amendatory Act of 1997, at age 55  or  over  but
less  than age 60, having at least 25 years of service, shall
not be subject to the reduction in retirement annuity because
of retirement below age 60.
However, in the case of an employee  who  retired  on  or
after  January  1, 1985 but before January 1, 1988, at age 55
or older and with at least 35 years of service, and  who  was
subject  under  this  subsection  (b)  to  the  reduction  in
retirement  annuity  because of retirement below age 60, that
reduction shall cease to be effective January  1,  1991,  and
the retirement annuity shall be recalculated accordingly.
Any employee who withdraws on or after July 1, 1990, with
20 or more years of service, may elect to receive, in lieu of
any  other  employee  annuity  provided  in  this Section, an
annuity for life equal to 2.20% for each year of  service  of
the highest average annual salary for any 4 consecutive years
date  of  withdrawal, to begin not earlier than upon attained
age of 55 years, if under such  age  at  withdrawal,  reduced
0.25% for each full month or fractional part thereof that his
attained age when annuity is to begin is less than 60; except
that an employee retiring at age 55 or over but less than age
60, having at least 30 years of service, shall not be subject
to  the reduction in retirement annuity because of retirement
below age 60.
Any employee who withdraws on or after the effective date
of this amendatory Act of 1997  with  20  or  more  years  of
service  may  elect to receive, in lieu of any other employee
annuity provided in this Section, an annuity for  life  equal
to  2.20%,  for  each year of service, of the highest average
annual salary for any 4 consecutive years within the last  10
years   of   service   immediately   preceding  the  date  of
withdrawal, to begin not earlier than upon attainment of  age
55 (age 50 if the employee has at least 30 years of service),
reduced  0.25%  for  each  full month or remaining fractional
part thereof that the employee's attained age when annuity is
to begin is less than 60; except that an employee retiring at
age 50 or over with at least 30 years of service or at age 55
or over with at least  25  years  of  service  shall  not  be
subject  to  the  reduction  in retirement annuity because of
retirement below age 60.
The maximum annuity payable under part  (a)  and  (b)  of
this  Section  shall not exceed 70% of highest average annual
salary in the case of an employee who withdraws prior to July
1, 1971, and 75% if withdrawal takes place on or  after  July
1,  1971.  For the purpose of the minimum annuity provided in
this Section $1,500 is considered the minimum  annual  salary
for   any  year;  and  the  maximum  annual  salary  for  the
computation of such annuity is $4,800  for  any  year  before
1953,  $6000  for  the years 1953 to 1956, inclusive, and the
actual annual salary, as salary is defined in  this  Article,
for any year thereafter.
To  preserve  rights  existing  on December 31, 1959, for
participants and  contributors  on  that  date  to  the  fund
created  by  the  Court and Law Department Employees' Annuity
Act, who became participants in  the  fund  provided  for  on
January  1,  1960, the maximum annual salary to be considered
for such persons for the years 1955 and 1956 is $7,500.
(c)  For an employee receiving  disability  benefit,  his
salary  for  annuity purposes under paragraphs (a) and (b) of
this  Section,  for  all  periods   of   disability   benefit
subsequent  to  the  year  1956,  is  the amount on which his
disability benefit was based.
(d)  An employee with 20 or more years of service,  whose
entire   disability  benefit  credit  period  expires  before
attainment of age 55 while still  disabled  for  service,  is
entitled  upon  withdrawal  to  the larger of (1) the minimum
annuity provided above, assuming  he  is  then  age  55,  and
reducing  such  annuity to its actuarial equivalent as of his
attained age on such date or (2) the  annuity  provided  from
his age and service and prior service annuity credits.
(e)  The  minimum  annuity provisions do not apply to any
former municipal employee receiving an annuity from the  fund
who  re-enters  service  as  a  municipal employee, unless he
renders at least 3 years of additional service after the date
of re-entry.
(f)  An employee in service  on  July  1,  1947,  or  who
became a contributor after July 1, 1947 and before attainment
of  age  70,  who  withdraws  after age 65, with less than 20
years of service for whom the annuity has  been  fixed  under
this  Article shall, instead of the annuity so fixed, receive
an annuity as follows:
Such amount as he could have received had the accumulated
amounts for  annuity  been  improved  with  interest  at  the
effective   rate  to  the  date  of  his  withdrawal,  or  to
attainment of age 70, whichever is earlier, and had the  city
contributed  to such earlier date for age and service annuity
the amount that it would have contributed had he  been  under
age  65,  after  the date his annuity was fixed in accordance
with this Article, and assuming  his  annuity  were  computed
from  such  accumulations as of his age on such earlier date.
The annuity so computed shall not exceed  the  annuity  which
would  be  payable under the other provisions of this Section
if the employee was credited with 20  years  of  service  and
would qualify for annuity thereunder.
(g)  Instead  of the annuity provided in this Article, an
employee having attained age 65 with at  least  15  years  of
service  who  withdraws from service on or after July 1, 1971
and whose annuity computed under  other  provisions  of  this
Article   is   less  than  the  amount  provided  under  this
paragraph, is entitled to a minimum annuity for life equal to
1% of the highest average annual salary, as salary is defined
and limited in this  Section  for  any  4  consecutive  years
within the last 10 years of service for each year of service,
plus  the  sum  of  $25 for each year of service. The annuity
shall not exceed 60% of such highest average annual salary.
(h)  The minimum annuities provided  under  this  Section
shall be paid in equal monthly installments.
(i)  The  amendatory  provisions  of  part (b) and (g) of
this Section shall be effective July 1, 1971 and apply in the
case of every qualifying employee  withdrawing  on  or  after
(j)  The  amendatory provisions of this amendatory Act of
1985 (P.A. 84-23) relating to the discount of annuity because
of retirement prior to attainment  of  age  60,  and  to  the
retirement  formula,  for  those born before January 1, 1936,
shall apply only to qualifying employees  withdrawing  on  or
after July 18, 1985.
(k)  Beginning  on  the effective date of this amendatory
Act of 1997 January 1, 1991, the minimum amount of employee's
annuity shall be  $550  $350  per  month  for  life  for  the
following  classes  of  employees, without regard to the fact
that withdrawal occurred prior to the effective date of  this
amendatory Act of 1997 January 1, 1991:
(1)  any  employee  annuitant  alive and receiving a
life annuity on the effective date of this amendatory Act
of 1997 January 1, 1991, except a reciprocal annuity;
(2)  any employee annuitant alive  and  receiving  a
term annuity on the effective date of this amendatory Act
reciprocal  annuity  on  the  effective  date   of   this
amendatory  Act of 1997 January 1, 1991, whose service in
this fund is at least 5 years;
(4)  any employee annuitant withdrawing after age 60
on or after the effective date of this amendatory Act  of
1997  January  1, 1991, with at least 10 years of service
in this fund.
The increases granted under items (1),  (2)  and  (3)  of
this subsection (k) shall not be limited by any other Section
(Source: P.A. 85-964; 86-1488.)
(40 ILCS 5/8-138.3 new)
Sec. 8-138.3.  Early retirement incentive.
(a)  To  be  eligible  for  the benefits provided in this
Section, an employee must:
(1)  be a current contributor to the  Fund  who,  on
November  1,  1997, is (i) in active payroll status as an
employee or (ii) receiving ordinary  or  duty  disability
benefits under Section 8-160 or 8-161;
(2)  have not previously retired under this Article;
(3)  file  with  the  Board  before  June 1, 1998, a
written application requesting the benefits  provided  in
this Section;
(4)  withdraw  from service on or after December 31,
1997 and on or before June 30, 1998; and
(5)  by the date of withdrawal:  (i)  have  attained
age  55  with  at least 10 years of creditable service in
this Fund and a total of at least 15 years of  creditable
service in one or more of the participating systems under
the  Retirement Systems Reciprocal Act, without including
any creditable service established under this Section; or
(ii) have attained age 50  with  at  least  10  years  of
creditable  service  in this Fund and a total of at least
30 years of creditable service in  one  or  more  of  the
participating   systems   under  the  Retirement  Systems
Reciprocal Act, without including any creditable  service
established under this Section.
A  person  is  not  eligible for the benefits provided in
this  Section  if  the  person  (i)  elects  to  receive  the
alternative annuity for city officers under Section  8-243.2,
or  (ii)  elects  to  receive a retirement annuity calculated
under the alternative formula formerly set forth  in  Section
(b)  An  eligible employee may establish up to 5 years of
creditable service under this Section, in increments  of  one
month,  by  making  the contributions specified in subsection
(d).  An eligible person must establish at least  the  amount
of  creditable  service  necessary  to bring his or her total
creditable service, including service in this  Fund,  service
established  under  this  Section,  and service in any of the
other participating  systems  under  the  Retirement  Systems
Reciprocal Act, to a minimum of 20 years.
The creditable service under this Section may be used for
all  purposes  under  this Article and the Retirement Systems
Reciprocal Act, except for the computation of average  annual
salary   and   the  determination  of  salary,  earnings,  or
compensation under this or any other Article of this Code.
(c)  An eligible employee shall be entitled to  have  his
or  her  retirement annuity calculated in accordance with the
formula provided in Section 8-138,  but  with  the  following
(1)  The  annuity  shall not be subject to reduction
because of withdrawal  or  commencement  of  the  annuity
before attainment of age 60.
(2)  The  annuity  shall  be subject to a maximum of
80% of the employee's highest average annual  salary  for
any  4  consecutive  years  within  the  last 10 years of
service, rather than the 75% maximum  otherwise  provided
in Section 8-138.
(d)  For  each  month  of  creditable service established
under this Section, the employee must  pay  to  the  Fund  an
employee contribution, to be calculated by the Fund, equal to
4.25%  of  the  member's  monthly  salary rate on November 1,
1997.  The employee may elect to pay the entire  contribution
before  the  retirement  annuity  commences,  or  to  have it
deducted from the annuity over a period not  longer  than  24
months.  If the retired employee dies before the contribution
has  been  paid  in  full,  the  unpaid  installments  may be
deducted from any annuity or other  benefit  payable  to  the
employee's survivors.
All  employee contributions paid under this Section shall
be  deemed  contributions  made  by  employees  for   annuity
purposes  under Section 8-173, and shall be made and credited
to  a  special   reserve,   without   interest.      Employee
contributions  paid  under this Section may be refunded under
the same terms and conditions  as  are  applicable  to  other
employee contributions for retirement annuity.
(e)  Notwithstanding  Section  8-165,  an  annuitant  who
reenters   service  under  this  Article  after  receiving  a
retirement annuity based  on  benefits  provided  under  this
Section  thereby  forfeits  the  right to continue to receive
those benefits, and shall have his or her retirement  annuity
recalculated  at  the  appropriate  time without the benefits
provided in this Section.
(40 ILCS 5/8-150.1) (from Ch. 108 1/2, par. 8-150.1)
Sec. 8-150.1.  Minimum annuities for widows.   The  widow
(otherwise  eligible for widow's annuity under other Sections
of this Article 8) of an employee hereinafter described,  who
retires  from service or dies while in the service subsequent
to the effective date of this amendatory provision,  and  for
which  widow  the amount of widow's annuity and widow's prior
service annuity combined, fixed or provided  for  such  widow
under  other  provisions  of  this  Article  is less than the
amount provided in this Section, shall, from  and  after  the
date  her  otherwise provided annuity would begin, in lieu of
such otherwise provided widow's  and  widow's  prior  service
annuity,  be  entitled  to  the following indicated amount of
annuity:
(a)  The widow of any employee who dies while in  service
on  or after the date on which he attains age 60 if the death
occurs before July 1, 1990, or on or after the date on  which
he  attains  age  55  if the death occurs on or after July 1,
1990, with at least 20 years of service, or on or  after  the
date  on  which  he  attains age 50 if the death occurs on or
after the effective date of this amendatory Act of 1997  with
at least 30 years of service, shall be entitled to an annuity
equal to one-half of the amount of annuity which her deceased
husband  would have been entitled to receive had he withdrawn
from the service on the day immediately preceding the date of
his death, conditional upon such widow  having  attained  the
age  of  60  or  more  years on such date if the death occurs
before July 1, 1990, or age 55 or more if the death occurs on
or after July 1, 1990.  Except as provided in subsection (k),
this such amount  of  widow's  annuity  shall  not,  however,
exceed  the  sum  of  $500 a month if the employee's death in
service occurs before January 23, 1987.  The widow's  annuity
shall  not  be  limited  to  a  maximum  dollar amount if the
employee's death in service occurs on or  after  January  23,
If  the employee dies in service before July 1, 1990, and
if such widow of such described employee shall not be  60  or
more  years of age on such date of death, the amount provided
in the immediately preceding paragraph for a widow 60 or more
years of age, shall, in the case of such  younger  widow,  be
reduced by 0.25% for each month that her then attained age is
less than 60 years if the employee was born before January 1,
1936  or  dies  in service on or after January 1, 1988, or by
0.5% for each month that her then attained age is  less  than
60  years  if  the employee was born on or after July 1, 1936
and dies in service before January 1, 1988.
If the employee dies in service on or after July 1, 1990,
and if the widow of the employee has not attained age  55  on
or  before the employee's date of death, the amount otherwise
provided in this subsection (a) shall be reduced by 0.25% for
each month that her then attained age is less than 55 years.
(b)  The widow of any employee who dies subsequent to the
date of his retirement on annuity, and who so retired  on  or
after  the  date  on  which he attained the age of 60 or more
years if retirement occurs before July  1,  1990,  or  on  or
after  the  date  on  which  he attained age 55 if retirement
occurs on or after July 1, 1990, with at least  20  years  of
service,  or on or after the date on which he attained age 50
if the retirement occurs on or after the  effective  date  of
this  amendatory  Act  of  1997  with  at  least  30 years of
service, shall be entitled to an annuity equal to one-half of
the amount of annuity which her deceased husband received  as
of  the  date  of his retirement on annuity, conditional upon
such widow having attained the age of 60 or more years on the
date of her husband's retirement  on  annuity  if  retirement
occurs  before  July 1, 1990, or age 55 or more if retirement
occurs on or after July 1,  1990.    Except  as  provided  in
subsection  (k),  this  such  amount of widow's annuity shall
not,  however,  exceed  the  sum  of  $500  a  month  if  the
employee's death occurs before January 23, 1987.  The widow's
annuity shall not be limited to a maximum  dollar  amount  if
the  employee's  death  occurs  on or after January 23, 1987,
regardless of the  date  of  retirement;  provided  that,  if
retirement  was  before  January  23,  1987,  the employee or
eligible spouse repays the excess spouse refund with interest
at the effective rate from the date of refund to the date  of
repayment.
If  the  date  of the employee's retirement on annuity is
before July 1, 1990, and if  such  widow  of  such  described
employee shall not have attained such age of 60 or more years
on  such  date  of  her  husband's retirement on annuity, the
amount provided in the immediately preceding paragraph for  a
widow  60  or  more years of age on the date of her husband's
retirement on annuity,  shall,  in  the  case  of  such  then
younger  widow,  be  reduced by 0.25% for each month that her
then attained age was less than 60 years if the employee  was
born  before January 1, 1936 or withdraws from  service on or
after January 1, 1988, or by 0.5% for  each  month  that  her
then  attained  age is less than 60 years if the employee was
born on or after January 1, 1936 and withdraws  from  service
before January 1, 1988.
If the date of the employee's retirement on annuity is on
or  after  July 1, 1990, and if the widow of the employee has
not attained age 55 by the date of the employee's  retirement
on  annuity, the amount otherwise provided in this subsection
(b) shall be reduced by 0.25% for each month  that  her  then
attained age is less than 55 years.
(c)  The   foregoing   provisions   relating  to  minimum
annuities for widows shall not apply  to  the  widow  of  any
former  municipal employee receiving an annuity from the fund
on August 9, 1965 or on the effective date of this amendatory
provision, who re-enters service  as  a  municipal  employee,
unless  such  employee renders at least 3 years of additional
service after the date of re-entry.
(d)  In computing the amount of annuity which the husband
specified in the foregoing paragraphs (a)  and  (b)  of  this
Section  would  have  been  entitled to receive, or received,
such amount shall be the annuity to which such husband  would
have been, or was entitled, before reduction in the amount of
his  annuity  for  the  purposes  of  the  voluntary optional
reversionary annuity provided  for  in  Sec.  8-139  of  this
Article, if such option was elected.
(e)  (Blank).  The  amendatory provisions of part (a) and
(b) of this Section (increasing the maximum from $300 to $400
a month) shall be effective as of July 1, 1971, and apply  in
the  case  of every qualifying widow whose husband dies while
in service on or after July 1, 1971 or withdraws  and  enters
on annuity on or after July 1, 1971.
(f)  (Blank).  The amendments of part (a) and (b) of this
Section by  this  amendatory  Act  of  1983  (increasing  the
maximum  from  $400 to $500 a month) shall be effective as of
January 1,  1984  and  shall  apply  in  the  case  of  every
qualifying  widow  whose husband dies while in the service on
or after January 1, 1984, or withdraws and enters on  annuity
on or after January 1, 1984.
(g)  The  amendatory provisions of this amendatory Act of
1985 relating to annuity discount because of age  for  widows
of employees born before January 1, 1936, shall apply only to
qualifying  widows  of  employees  withdrawing  or  dying  in
service on or after July 18, 1985.
(h)  Beginning  on  the effective date of this amendatory
Act of 1997 January 1, 1991, the minimum  amount  of  widow's
annuity  shall  be  $500  $300  per  month  for  life for the
following classes of widows, without regard to the fact  that
the  death  of  the  employee occurred prior to the effective
date of this amendatory Act of 1997 January 1, 1991:
(1)  any widow annuitant alive and receiving a  life
annuity  on  the effective date of this amendatory Act of
1997 January 1, 1991, except a reciprocal annuity;
(2)  any widow annuitant alive and receiving a  term
(3)  any  widow  annuitant  alive  and  receiving  a
amendatory  Act  of  1997 January 1, 1991, whose employee
spouse's service in this fund was at least 5 years;
(4)  the widow of an employee with at least 10 years
of service in this fund who dies after retirement, if the
retirement occurred prior to the effective date  of  this
amendatory Act of 1997 January 1, 1991;
of  service  in  this  fund who dies after retirement, if
withdrawal occurs on or after the effective date of  this
(6)  the  widow  of  an employee who dies in service
with at least 5 years of service in  this  fund,  if  the
death in service occurs on or after the effective date of
this amendatory Act of 1997 January 1, 1991.
The  increases  granted under items (1), (2), (3) and (4)
of this subsection (h) shall not  be  limited  by  any  other
Section of this Act.
(i)  The  widow  of  an  employee  who retired or died in
service on or after January 1, 1985 and before July 1,  1990,
at  age  55  or  older, and with at least 35 years of service
credit,  shall  be  entitled  to  have  her  widow's  annuity
increased, effective January 1, 1991, to an amount  equal  to
50%  of  the  retirement  annuity  that the deceased employee
received on the  date  of  retirement,  or  would  have  been
eligible  to  receive  if he had retired on the day preceding
the date of his death in service, provided that if the  widow
had  not  attained  age  60  by  the  date  of the employee's
retirement or death in service, the  amount  of  the  annuity
shall  be  reduced  by  0.25%  for  each  month that her then
attained  age  was  less  than  age  60  if  the   employee's
retirement  or  death in service occurred on or after January
1, 1988, or by 0.5%  for each month that her attained age  is
less  than  age  60  if the employee's retirement or death in
service occurred prior to January 1, 1988.  However, in cases
where a refund of excess contributions  for  widow's  annuity
has  been  paid by the Fund, the increase in benefit provided
by this subsection (i) shall be contingent upon repayment  of
the  refund  to  the Fund with interest at the effective rate
from the date of refund to the date of payment.
(j)  If a deceased employee  is  receiving  a  retirement
annuity  at  the  time  of  death and that death occurs on or
after the effective date of this amendatory Act of 1997,  the
widow  may  elect  to  receive,  in lieu of any other annuity
provided under this Article, 50% of the  deceased  employee's
retirement  annuity at the time of death reduced by 0.25% for
each month that the widow's age on the date of death is  less
than  55.   However,  in  cases  where  a  refund  of  excess
contributions  for widow's annuity has been paid by the Fund,
the benefit provided by this  subsection  (j)  is  contingent
upon repayment of the refund to the Fund with interest at the
effective  rate  from  the  date  of  refund  to  the date of
(k)  For widows of employees who died before January  23,
1987  after  retirement on annuity or in service, the maximum
dollar amount limitation on widow's annuity  shall  cease  to
apply,  beginning  with  the  first annuity payment after the
effective date of this amendatory Act of 1997; except that if
a refund of excess contributions for widow's annuity has been
paid by the Fund, the increase resulting from this subsection
(k) shall not begin before the refund has been repaid to  the
Fund,  together  with interest at the effective rate from the
date of the refund to the date of repayment.
Sec. 8-154.  Maximum annuities.
(1)  The annuities to an  employee  and  his  widow,  are
subject to the following limitations:
(a)  No  age  and service annuity, or age and service and
prior service annuity combined,  in  excess  of  60%  of  the
highest  salary  of  an  employee,  and no minimum annuity in
excess of the amount provided in Section 8-138 or  set  forth
as  a  maximum  in any other Section of this Code relating to
minimum annuities  for  municipal  employees  included  under
Article  8  of  this  Code shall be payable to any employee -
excepting to the extent that the annuity may exceed such  per
cent  or amount under Section 8-137 and 8-137.1 providing for
automatic increases after retirement.
(b)  No annuity in excess of 60% of such  highest  salary
shall  be  payable to a widow if death of an employee results
solely from injury incurred in the performance of an  act  of
duty; provided, the annuity for a widow, or a widow's annuity
plus compensation annuity, shall not exceed $500 per month if
the  employee's  death occurs before January 23, 1987, except
as provided in paragraph (d).   The  widow's  annuity,  or  a
widow's  annuity  plus  compensation  annuity,  shall  not be
limited to a maximum dollar amount if  the  employee's  death
occurs  on  or after January 23, 1987, regardless of the date
of injury.
(c)  No annuity in excess of 50% of such  highest  salary
shall be payable to a widow in the case of death resulting in
whole or in part from any cause other than injury incurred in
the  performance of an act of duty; provided, the annuity for
a widow, or a  widow's  annuity  plus  supplemental  annuity,
shall  not  exceed  $500  per  month  if the employee's death
occurs  before  January  23,  1987,  except  as  provided  in
paragraph (d).  The widow's annuity, or widow's annuity  plus
supplemental  annuity,  shall  not  be  limited  to a maximum
dollar amount if the employee's  death  occurs  on  or  after
(d)  For  widows of employees who died before January 23,
1987 after retirement on annuity or in service,  the  maximum
dollar  amount  limitation  on  widow's  annuity  (or widow's
annuity plus  compensation  or  supplemental  annuity)  shall
cease  to  apply,  beginning  with  the first annuity payment
after the effective date of  this  amendatory  Act  of  1997;
except  that  if a refund of excess contributions for widow's
annuity has been paid by the  Fund,  the  increase  resulting
from this paragraph (d) shall not begin before the refund has
been  repaid  to  the  Fund,  together  with  interest at the
effective rate from the date of the refund  to  the  date  of
(2)  If  when  an employee's annuity is fixed, the amount
accumulated to his credit therefor, as of  his  age  at  such
time  exceeds  the  amount  necessary  for  the  annuity, all
contributions for annuity purposes after the  date  on  which
the  accumulated  sums  to  the  credit  of such employee for
annuity purposes would first have provided such employee with
such amount of annuity as of his age at such  date  shall  be
refunded  when  he  enters upon annuity, with interest at the
effective rate.
If the aforesaid annuity so fixed is not payable,  but  a
larger  amount  is  payable as a minimum annuity, such refund
shall be reduced by 5/12 of the value of  the  difference  in
the  annuity payable and the amount theretofore fixed, as the
value of such difference may be at the date and as of the age
of the employee when his annuity is granted; provided that if
the employee was credited with  city  contributions  for  any
period  for  which he made no contribution, or a contribution
of less than 3 1/4% of salary, a  further  reduction  in  the
refund  shall be made by the equivalent of what he would have
contributed during such period less his actual contributions,
had the rate  of  employee  contributions  in  force  on  the
effective  date been in effect throughout his entire service,
prior to such effective date, with interest computed on  such
amounts at the effective rate.
(3)  If  at the time the annuity for a wife is fixed, the
employee's  credit  for  a  widow's  annuity   exceeds   that
necessary  to  provide  such  an annuity equal to the maximum
annuity provided in this section, all employee  contributions
for  such  annuity,  for  service after the date on which the
accumulated sums to the  credit  of  such  employee  for  the
purpose   of  providing  widow's  annuity  would  first  have
provided such widow with such  amount  of  annuity,  if  such
annuity  were  computed  on the basis of the Combined Annuity
Mortality Table with interest at 3% per annum  with  ages  at
date  of  determination  taken  as specified in this Article,
shall be refunded to  the  employee,  with  interest  at  the
effective  rate.  If  the  employee  was  credited  with city
contributions for widow's annuity for any  service  prior  to
the  effective  date,  any  amount  so  refundable,  shall be
reduced by the equivalent of what he would have  contributed,
had  his  contributions  for widow's annuity been made at the
rate of 1%  throughout  his  entire  service,  prior  to  the
effective   date,  with  interest  on  such  amounts  at  the
(4)  If at the death of an employee prior to age 65,  the
credit  for widow's annuity exceeds that necessary to provide
the maximum annuity prescribed in this section, all  employee
contributions  for  annuity  purposes,  for service after the
date on which the accumulated sums  to  the  credit  of  such
employee  for  the  purpose of providing such maximum annuity
for the widow would first have provided such widow with  such
amount of annuity, if such annuity were computed on the basis
of  the  Combined Annuity Mortality Table with interest at 3%
per annum  with  ages  at  date  of  determination  taken  as
specified  in  this  Article, shall be refunded to the widow,
with interest at the effective rate.
If the employee was credited with city contributions  for
any  period  of  service  during which he was not required to
make a contribution, or made a contribution of  less  than  3
1/4% of salary, the refund shall be reduced by the equivalent
of  the  contributions he would have made during such period,
less any amount he contributed,  had  the  rate  of  employee
contributions  in  effect on the effective date been in force
throughout his entire service, prior to the  effective  date,
with interest on such amounts at the effective rate; provided
that if the employee was credited with city contributions for
widow's  annuity for any service prior to the effective date,
any amount so refundable shall  be  further  reduced  by  the
equivalent  of  what  would  have  contributed  had  he  made
contributions   for   widow's  annuity  at  the  rate  of  1%
throughout his entire service; prior to such effective  date,
with interest on such amounts at the effective rate.
(d)  The  amendatory provisions of part 1, paragraphs (b)
and (c) of this Section (increasing the maximum from $300  to
$400  a  month)  shall  be  effective as of July 1, 1971, and
apply in the case of every  qualifying  widow  whose  husband
dies  while  in service on or after July 1, 1971 or withdraws
and enters on annuity on or after July 1, 1971.
(e)  The amendments of part 1, paragraphs (b) and (c)  of
this  Section  by this amendatory Act of 1983 (increasing the
maximum from $400 to $500 a month) shall be effective  as  of
January  1,  1984  and  apply in the case of every qualifying
widow whose husband dies in the service on or  after  January
1,  1984  or  withdraws  and  enters  on  annuity on or after
Sec. 8-159.  Amount of child's annuity.  Beginning on the
effective date of this amendatory  Act  of  1997  January  1,
1988,  the amount of a child's annuity shall be $220 $120 per
month for  each  child  while  the  spouse  of  the  deceased
employee  parent  survives,  and $250 $150 per month for each
child when no such spouse survives, and shall be  subject  to
the following limitations:
(1)  If the combined annuities for the widow and children
of  an  employee whose death resulted from injury incurred in
the performance of duty, or for the children  where  a  widow
does  not  exist,  exceed 70% of the employee's final monthly
salary, the annuity for each child shall be reduced pro  rata
so  that  the  combined  annuities  for  the family shall not
exceed such limitation.
(2)  For the family of an employee  whose  death  is  the
result  of  any  cause  other  than  injury  incurred  in the
performance of duty, in which the combined annuities for  the
family exceed 60% of the employee's final monthly salary, the
annuity  for each child shall be reduced pro rata so that the
combined annuities for  the  family  shall  not  exceed  such
limitation.
(3)  The  increase  in  child's  annuity provided by this
amendatory Act of  1997  1987  shall  apply  to  all  child's
annuities  being  paid on or after the effective date of this
amendatory Act of 1997. January  1,  1988,  subject  to   The
above  limitations  on the combined annuities for a family in
parts (1) and (2) of this Section do not apply to families of
employees  who  died  before  the  effective  date  of   this
(4)  The  amendments to parts (1) and (2) of this Section
made  by  Public  Act  84-1472   (eliminating   the   further
limitation  that the monthly combined family amount shall not
exceed $500 plus 10% of the employee's final monthly  salary)
shall  apply  in  the  case  of  every qualifying child whose
employee parent dies in the service or enters on  annuity  on
or after January 23, 1987.
Sec.  8-226.   Computation  of service.  In computing the
term of service of an employee prior to the  effective  date,
the  entire  period  beginning  on  the  date  he  was  first
appointed  and  ending  on the day before the effective date,
except any intervening period during which he  was  separated
by withdrawal from service, shall be counted for all purposes
of  this Article, except that for any employee who was not in
service  on  the  day  before  the  effective  date,  service
rendered prior to such date shall not be considered  for  the
purposes of Section 8-138.
For  a  person  employed  by  an  employer  for whom this
Article was in effect prior to January 1,  1950,  from  whose
salary  deductions  are  first  made under this Article after
December 31, 1949, any period of service  rendered  prior  to
the  effective  date,  unless  he  was  in service on the day
before the effective date, shall not be counted as service.
The time a  person  was  an  employee  of  any  territory
annexed  to  the  city  prior  to the effective date shall be
counted as a period of service.
In  computing  the  term  of  service  of  any   employee
subsequent   to  the  day  before  the  effective  date,  the
following periods shall be counted as periods of service  for
age and service, widow's and child's annuity purposes:
(a)  The  time  during which he performed the duties
of his position;
(b)  Vacations, leaves of absence with whole or part
pay, and leaves of absence without pay not longer than 90
days;
(c)  Leaves of absence without pay  during  which  a
participant  is  employed  full-time  by  a  local  labor
organization   that   represents   municipal   employees,
provided  that  (1)  the  participant  continues  to make
employee contributions to the Fund as though he  were  an
active   employee,  based  on  the  regular  salary  rate
received by the participant for his municipal  employment
immediately  prior  to  such leave of absence (and in the
case of such employment prior to December 9,  1987,  pays
to the Fund an amount equal to the employee contributions
for  such  employment  plus  regular  interest thereon as
calculated by the board), and based on his current salary
with such labor organization after the effective date  of
this  amendatory  Act  of 1991, (2) after January 1, 1989
the  participant,  or  the  labor  organization  on   the
participant's  behalf, makes contributions to the Fund as
though it were the employer, in the same amount and  same
manner  as  specified  under  this  Article, based on the
regular salary rate received by the participant  for  his
municipal  employment  immediately prior to such leave of
absence, and based on his current salary with such  labor
organization  after the effective date of this amendatory
Act of 1991, and (3) the  participant  does  not  receive
credit in any pension plan established by the local labor
organization based on his employment by the organization;
(d)  Any  period of disability for which he received
(i) a disability benefit under this Article,  or  (ii)  a
temporary  total  disability  benefit  under the Workers'
Compensation  Act  if  the  disability  results  from   a
condition  commonly  termed heart attack or stroke or any
other  condition  falling  within  the  broad  field   of
coronary  involvement or heart disease, or (iii) whole or
part pay;
(e)  Any period for which contributions and  service
credit   have   been   transferred  to  this  Fund  under
subsection (d) of Section 9-121.1 or  subsection  (d)  of
Section 12-127.1 of this Code.
For  a  person  employed by an employer in which the 1921
Act was in effect prior to January 1, 1950, from whose salary
deductions are first made under the 1921 Act or this  Article
after  December  31,  1949,  any  period  of service rendered
subsequent to the effective date and prior  to  the  date  he
became an employee and contributor, shall not be counted as a
period  of service under this Article, except such period for
which he made payment as provided in Section  8-230  of  this
Article,  in  which  case  such  period shall be counted as a
period of service for all annuity purposes hereunder.
In  computing  the  term  of  service  of   an   employee
subsequent  to the day before the effective date for ordinary
disability benefit purposes, all  periods  described  in  the
preceding  paragraph,  except  any  such  period for which he
receives ordinary disability benefit,  shall  be  counted  as
periods of service; provided, that for any person employed by
an  employer  in  which  this  Article was in effect prior to
January 1, 1950, from whose salary deductions are first  made
under  this  Article  after  December 31, 1949, any period of
service rendered subsequent to the effective date  and  prior
to  the date he became an employee and contributor, shall not
be counted as a period of  service  for  ordinary  disability
benefit  purposes,  unless  the  person  made payment for the
period as provided in Section 8-230 of this Article, in which
case the period shall be counted as a period of  service  for
ordinary  disability purposes for periods of disability on or
after the effective date of this amendatory Act of 1997.
Overtime or  extra  service  shall  not  be  included  in
computing  any  term  of  service.  Not  more  than 1 year of
service shall be allowed  for  service  rendered  during  any
calendar year.
(40 ILCS 5/9-121.15 new)
Sec. 9-121.15. Transfer of credit from Article 14 system.
An  employee  shall be entitled to service credit in the Fund
for any creditable service transferred to this Fund from  the
State  Employees' Retirement System under Section 14-105.7 of
this Code.  Credit under this  Fund  shall  be  granted  upon
receipt by the Fund of the amounts required to be transferred
under   Section   14-105.7;  no  additional  contribution  is
Sec. 9-220.1. Service of less than 15 days in one  month.
A  member  of the General Assembly with service credit in the
Fund may establish service credit in the Fund for  up  to  24
months,  during  each  of which he or she worked for at least
one but fewer than 15 days, by purchasing service credit  for
the  number  of days needed to bring the total of days worked
in each such month up to 15.  To establish this  credit,  the
member  must pay to the Fund before January 1, 1998 an amount
equal to (1) employee contributions based on  the  number  of
days  for  which  credit  is  being  purchased,  the  rate of
compensation received by the applicant for the time  actually
worked  during  that  month,  and the rate of contribution in
effect for the applicant  during  that  month;  plus  (2)  an
amount  representing  employer  contributions,  equal  to the
amount specified in  item  (1);  plus  (3)  interest  on  the
amounts  specified in items (1) and (2) at the rate of 6% per
annum, compounded annually, from the date of service  to  the
date  of  payment.  This Section is not limited to persons in
service under this Article on or after the effective date  of
this amendatory Act of 1997.
(40 ILCS 5/11-133.2 new)
Sec. 11-133.2.  Early retirement incentive.
benefits under Section 11-155 or 11-156;
this Section if the person elects  to  receive  a  retirement
annuity calculated under the alternative formula formerly set
forth in Section 20-122.
formula provided in Section 11-134, but  with  the  following
in Section 11-134.
purposes  under Section 11-169 and shall be made and credited
(e)  Notwithstanding  Section  11-161,  an  annuitant who
reenters  service  under  this  Article  after  receiving   a
retirement  annuity  based  on  benefits  provided under this
Section thereby forfeits the right  to  continue  to  receive
those  benefits, and shall have his or her retirement annuity
recalculated at the appropriate  time  without  the  benefits
(40 ILCS 5/11-134) (from Ch. 108 1/2, par. 11-134)
Sec. 11-134.  Minimum annuities.
(a)  An  employee  whose  withdrawal occurs after July 1,
1957 at age 60 or over, with 20 or more years of service, (as
service is defined or computed in Section 11-216),  for  whom
the  age  and  service  and prior service annuity combined is
less than the amount stated in this section, shall, from  and
after  the  date  of  withdrawal,  in  lieu  of all annuities
otherwise provided in this Article, be entitled to receive an
annuity for life of an amount equal to 1 2/3% for  each  year
of  service,  of  the highest average annual salary for any 5
immediately preceding the date of withdrawal; provided,  that
1971,  such  employee age 60 or over with 20 or more years of
service, shall be entitled to instead receive an annuity  for
life  equal  to  1.67%  for  each  of  the  first 10 years of
service; 1.90% for each of the  next  10  years  of  service;
2.10%  for  each  year  of  service  in  excess of 20 but not
exceeding 30; and 2.30% for each year of service in excess of
30, based on the highest average  annual  salary  for  any  4
immediately preceding the date of withdrawal.
60, shall be entitled to an annuity,  to  begin  not  earlier
than  age 55, if under such age at withdrawal, as computed in
the last preceding paragraph, reduced 0.25% if  the  employee
was  born before January 1, 1936, or 0.5% if the employee was
born on or after January 1, 1936,  for  each  full  month  or
fractional  part  thereof  that  his  attained  age when such
annuity is to begin is less than 60.
Any employee born before January 1,  1936  who  withdraws
service  in excess of 20, but not exceeding 30, and 2.40% for
subject  under  this  subsection  (a)  to  the  reduction  in
The maximum annuity payable under this paragraph  (a)  of
said paragraphs $1,500 shall be considered the minimum annual
salary for any year; and the  maximum  annual  salary  to  be
considered  for  the  computation  of  such  annuity shall be
$4,800 for any year prior to 1953, $6,000 for the years  1953
to  1956,  inclusive, and the actual annual salary, as salary
is defined in this Article, for any year thereafter.
(b)  For an employee receiving  disability  benefit,  his
salary for annuity purposes under this section shall, for all
periods of disability benefit subsequent to the year 1956, be
the amount on which his disability benefit was based.
(c)  An  employee with 20 or more years of service, whose
entire disability benefit  credit  period  expires  prior  to
attainment  of age 55 while still disabled for service, shall
be entitled upon withdrawal to the larger of (1) the  minimum
annuity  provided  above assuming that he is then age 55, and
reducing such annuity to  its  actuarial  equivalent  at  his
attained  age  on such date, or (2) the annuity provided from
(d)  The minimum annuity provisions  as  aforesaid  shall
not  apply  to  any former employee receiving an annuity from
the fund, and who re-enters service as an employee, unless he
(e)  An employee in service  on  July  1,  1947,  or  who
became  a contributor after July 1, 1947 and prior to July 1,
1950, or who shall become a contributor  to  the  fund  after
July  1,  1950  prior  to attainment of age 70, who withdraws
after age 65 with less than 20 years of service, for whom the
annuity has been fixed under the foregoing sections  of  this
Article  shall,  in  lieu of the annuity so fixed, receive an
annuity as follows:
the amount that would have been contributed had he been under
age 65, after the date his annuity was  fixed  in  accordance
with  this  Article,  and  assuming his annuity were computed
from such accumulations as of his age on such  earlier  date.
The  annuity  so  computed shall not exceed the annuity which
would be payable under the other provisions of  this  section
if  the  employee  was  credited with 20 years of service and
(f)  In lieu of the annuity provided in this  or  in  any
other  section  of  this Article, an employee having attained
age 65 with at least 15 years of service who  withdraws  from
service  on  or after July 1, 1971 and whose annuity computed
under other provisions of  this  Article  is  less  than  the
amount  provided  under  this  paragraph shall be entitled to
receive a minimum annual annuity for life equal to 1% of  the
highest  average  annual  salary  for any 4 consecutive years
within the last 10 years  of  service  immediately  preceding
retirement  for  each year of his service plus the sum of $25
for each year of  service.  Such  annual  annuity  shall  not
exceed  the maximum percentages stated under paragraph (a) of
this Section of such highest average annual salary.
(g)  Any annuity payable under the preceding  subsections
of  this  Section  11-134  shall  be  paid  in  equal monthly
installments.
(h)  The amendatory provisions of part  (a)  and  (f)  of
case  of  every  qualifying  employee withdrawing on or after
(i)  The amendatory provisions of this amendatory Act  of
1985   relating   to  the  discount  of  annuity  because  of
retirement prior to attainment of age 60 and  increasing  the
retirement  formula  for  those  born before January 1, 1936,
after August 16, 1985.
(j)  Beginning  on  the effective date of this amendatory
this subsection (j) shall not be limited by any other Section
(40 ILCS 5/11-145.1) (from Ch. 108 1/2, par. 11-145.1)
Sec.  11-145.1.  Minimum annuities for widows.  The widow
otherwise eligible for widow's annuity under  other  Sections
of this Article 11, of an employee hereinafter described, who
under  other  provisions  of said Article 11 is less than the
amount hereinafter provided in this section, shall, from  and
after the date her otherwise provided annuity would begin, in
lieu  of  such  otherwise  provided widow's and widow's prior
service annuity,  be  entitled  to  the  following  indicated
amount of annuity:
(a)  The  widow of any employee who dies while in service
on or after the date on which he attains age 60 if the  death
occurs  before July 1, 1990, or on or after the date on which
he attains age 55 if the death occurs on  or  after  July  1,
1990,  with  at least 20 years of service, or on or after the
date on which he attains age 50 if the  death  occurs  on  or
after  the effective date of this amendatory Act of 1997 with
husband would have been entitled to receive had he  withdrawn
his death, conditional upon such widow having attained age 60
on  or  before  such  date if the death occurs before July 1,
1990, or age 55 if the death occurs on or after July 1, 1990.
Except as provided in subsection (j),   the  widow's  annuity
shall  not,  however,  exceed  the sum of $500 a month if the
employee's death in service occurs before January  23,  1987.
The  widow's annuity shall not be limited to a maximum dollar
amount if the employee's death in service occurs on or  after
1936, or dies in service on or after January 1, 1988, or 0.5%
for  each  month  that  her then attained age is less than 60
years if the employee was born on or after  January  1,  1936
and  if  the widow of the employee has not attained age 55 on
or before the employee's date of death, the amount  otherwise
date  of  his retirement on annuity, and who so retired on or
after the date on which he  attained  age  60  if  retirement
he attained age 55 if retirement occurs on or after  July  1,
date on which he attained age 50 if the retirement occurs  on
or  after  the  effective date of this amendatory Act of 1997
with at least 30 years of service, shall be  entitled  to  an
annuity  equal to one-half of the amount of annuity which her
deceased husband received as of the date of his retirement on
annuity, conditional upon such widow having attained  age  60
on  or before the date of her husband's retirement on annuity
if retirement occurs before  July  1,  1990,  or  age  55  if
retirement  occurs  on  or  after  July  1,  1990.  Except as
provided in subsection  (j),  this  Such  amount  of  widow's
annuity shall not, however, exceed the sum of $500 a month if
the  employee's  death  occurs  before January 23, 1987.  The
widow's annuity shall not be  limited  to  a  maximum  dollar
amount if the employee's death occurs on or after January 23,
1987, regardless of the date of retirement; provided that, if
born  before January 1, 1936, or withdraws from service on or
after January 1, 1988, or 0.5% for each month that  her  then
attained  age was less than 60 years if the employee was born
on or after January 1, 1936 and withdraws from service before
or after July 1, 1990, and if the widow of the  employee  has
not  attained age 55 by the date of the employee's retirement
on annuity, the amount otherwise provided in this  subsection
(b)  shall  be  reduced by 0.25% for each month that her then
(c)  The  foregoing  provisions   relating   to   minimum
annuities  for  widows  shall  not  apply to the widow of any
former employee receiving an annuity from the fund on  August
2,   1965  or  on  the  effective  date  of  this  amendatory
provision, who re-enters service as a former employee, unless
such employee renders at least 3 years of additional  service
after the date of re-entry.
(d)  (Blank).  The  amendatory provisions of part (a) and
in service on or after July 1, 1971 and prior to  January  1,
1984,  or withdraws and enters on annuity on or after July 1,
1971 and prior to January 1, 1984.
(e)  (Blank). The changes made in parts (a)  and  (b)  of
maximum from $400 to $500 per month)  shall  apply  to  every
qualifying  widow  whose  husband  dies  in the service on or
after January 1, 1984, or withdraws and enters on annuity  on
or after January 1, 1984.
(f)  The  amendments  to  this Section by this amendatory
Act of 1985, relating to changing the discount because of age
from 1/2 of 1% to 0.25% per month  for  widows  of  employees
born  before  January 1, 1936, shall apply only to qualifying
widows whose husbands die while in the service  on  or  after
August  16, 1985 or withdraw and enter on annuity on or after
(g)  Beginning on the effective date of  this  amendatory
Act  of  1997  January 1, 1991, the minimum amount of widow's
following  classes of widows, without regard to the fact that
the death of the employee occurred  prior  to  the  effective
(1)  any  widow annuitant alive and receiving a term
annuity on the effective date of this amendatory  Act  of
(2)  any  widow annuitant alive and receiving a life
reciprocal   annuity   on  the  effective  date  of  this
amendatory Act of 1997 January 1,  1991,  whose  employee
retirement  occurred  prior to the effective date of this
of service in this fund who  dies  after  retirement,  if
withdrawal  occurs on or after the effective date of this
(6)  the widow of an employee who  dies  in  service
with  at  least  5  years of service in this fund, if the
The increases granted under items (1), (2), (3)  and  (4)
of  this  subsection  (g)  shall  not be limited by any other
(h)  The widow of an employee  who  retired  or  died  in
service  on or after January 1, 1985 and before July 1, 1990,
at age 55 or older, and with at least  35  years  of  service
increased,  effective  January 1, 1991, to an amount equal to
50% of the retirement  annuity  that  the  deceased  employee
received  on  the  date  of  retirement,  or  would have been
eligible to receive if he had retired on  the  day  preceding
the  date of his death in service, provided that if the widow
had not attained  age  60  by  the  date  of  the  employee's
retirement  or  death  in  service, the amount of the annuity
shall be reduced by  0.25%  for  each  month  that  her  then
attained   age  was  less  than  age  60  if  the  employee's
retirement or death in service occurred on or  after  January
1,  1988, or by 0.5%  for each month that her attained age is
less than age 60 if the employee's  retirement  or  death  in
where  a  refund  of excess contributions for widow's annuity
has been paid by the Fund, the increase in  benefit  provided
by this subsection (h) (i) shall be contingent upon repayment
of the refund to the Fund with interest at the effective rate
(i)  If  a  deceased  employee  is receiving a retirement
annuity at the time of death and  that  death  occurs  on  or
after  the effective date of this amendatory Act of 1997, the
widow may elect to receive, in  lieu  of  any  other  annuity
provided  under  this Article, 50% of the deceased employee's
retirement annuity at the time of death reduced by 0.25%  for
each  month that the widow's age on the date of death is less
contributions for widow's annuity has been paid by the  Fund,
the  benefit  provided  by  this subsection (i) is contingent
effective rate from  the  date  of  refund  to  the  date  of
(j)  For  widows of employees who died before January 23,
dollar  amount  limitation  on widow's annuity shall cease to
apply, beginning with the first  annuity  payment  after  the
(j)  shall not begin before the refund has been repaid to the
Fund, together with interest at the effective rate  from  the
Sec. 11-149.  Maximum annuities.
(1)  The  annuities  to  an  employee  and his widow, are
(a)  No age and service annuity or age  and  service  and
prior  service  annuity  combined in excess of 60% of highest
salary of an employee and no minimum annuity in excess of the
annuity provided in Section 11-134 or set forth as a  maximum
in  any  other  Section  of  this  Code  relating  to minimum
annuities for employees included under  Article  11  of  this
Code shall be payable to any employee excepting to the extent
that  the  annuity  may  exceed such per cent or amount under
Section  11-134.1  and  11-134.3  providing   for   automatic
increases after retirement.
(b)  No  annuity  in excess of 60% of such highest salary
shall be payable to a widow if death of an employee  resulted
from  injury  incurred  in the performance of duty; provided,
the  annuity  to  a  widow,  or  a   widow's   annuity   plus
compensation  annuity  shall not exceed $500 per month if the
employee's death occurs before January 23,  1987,  except  as
provided in paragraph (d).  The widow's annuity, or a widow's
annuity  plus compensation annuity, shall not be limited to a
maximum dollar amount if the employee's death  occurs  on  or
after January 23, 1987, regardless of the date of injury.
(c)  No  annuity  in excess of 50% of such highest salary
shall be payable to a widow  in  the  case  of  death  of  an
employee  from  any  cause  other than injury incurred in the
performance of duty; provided, the annuity to a widow,  or  a
widow's  annuity  plus supplemental annuity, shall not exceed
$500 per month if the employee's death occurs before  January
23,  1987,  except  as provided in paragraph (d). The widow's
annuity, or widow's annuity plus supplemental annuity,  shall
not  be  limited to a maximum dollar amount if the employee's
death occurs on or after January 23, 1987.
(d)  For widows of employees who died before January  23,
dollar amount  limitation  on  widow's  annuity  (or  widow's
annuity  plus  compensation  or  supplemental  annuity) shall
cease to apply, beginning  with  the  first  annuity  payment
after  the  effective  date  of  this amendatory Act of 1997;
except that if a refund of excess contributions  for  widow's
annuity  has  been  paid  by the Fund, the increase resulting
been repaid to  the  Fund,  together  with  interest  at  the
effective  rate  from  the  date of the refund to the date of
(2)  If when an employee's annuity is fixed,  the  amount
accumulated  to  his  credit  therefor, as of his age at such
time, exceeds the  amount  necessary  for  the  annuity,  all
employee  contributions  for annuity purposes, after the date
on which the accumulated sums to the credit of such  employee
for  annuity purposes would first have provided such employee
with such amount of annuity as of his age at such date  shall
be refunded when he enters upon annuity, with interest at the
If  the  aforesaid annuity so fixed is not payable, but a
larger amount is payable as a minimum  annuity,  such  refund
shall  be  reduced  by 5/12 of the value of the difference in
the annuity payable and the amount theretofore fixed  as  the
of the employee when his annuity begins; provided that if the
employee  was credited with city contributions for any period
for which he made no contribution, or a contribution of  less
than  3  1/4%  of  salary,  a further reduction in the refund
shall be made  by  the  equivalent  of  what  he  would  have
had  the  rate  of  employee  contributions  in  force on the
effective date been in effect throughout his entire  service,
prior  to such effective date, with interest computed on such
(3)  If at the time the annuity for a wife is fixed,  the
employee's   credit   for  a  widow's  annuity  exceeds  that
necessary to provide the maximum annuity prescribed  in  this
section,  all employee contributions for such widow's annuity
for service after the date on which the accumulated  sums  to
the  credit  of  the employee for such annuity purposes would
first have provided the  wife  of  such  employee  with  such
amount  of annuity if such annuity were computed on the basis
of the combined annuity mortality table with interest  at  3%
per  annum  with  ages  at  date  of  determination  taken as
specified in this article, shall be refunded to the employee,
any amount so refundable, shall be reduced by the  equivalent
of  what he would have contributed, had his contributions for
widow's annuity been made at the rate of  1%  throughout  his
entire service, prior to the effective date, with interest on
such amounts at the effective rate.
(4)  If  at the death of an employee prior to age 65, the
credit for widow's annuity, exceeds that necessary to provide
employee  for annuity purposes would first have provided such
widow with such  amount  of  annuity  if  such  annuity  were
computed on the basis of the combined annuity mortality table
with   interest  at  3%  per  annum  with  ages  at  date  of
determination taken as specified in this  article,  shall  be
refunded to the widow, with applicable interest.
If  the employee was credited with city contributions for
any period of service during which he  was  not  required  to
make  a  contribution,  or made a contribution of less than 3
of the contributions he would have made during  such  period,
less  any  amount  he  contributed,  had the rate of employee
contributions in effect on the effective date been  in  force
throughout  his  entire service, prior to the effective date,
with applicable interest; provided, that if the employee  was
credited  with city contributions for widow's annuity for any
service prior to the effective date, any amount so refundable
shall be further reduced by the equivalent of what  he  would
have  contributed  had  he  made  contributions  for  widow's
annuity  at  the  rate  of  1% throughout his entire service,
prior to such effective date, with applicable interest.
(5)  The amendatory provisions of part 1, paragraphs  (b)
and  (c) of this Section (increasing the maximum from $300 to
$400 a month) shall be effective as  of  July  1,  1971,  and
apply  in  the  case  of every qualifying widow whose husband
dies while in service on or after July 1, 1971 and  prior  to
January  1,  1984,  or  withdraws and enters on annuity on or
after July 1, 1971 and prior to January 1, 1984.
(6)  The changes in paragraphs (b) and (c) of  subsection
(1)  of  this  Section  made  by  this amendatory Act of 1983
(increasing the maximum from $400 to $500  per  month)  shall
apply  to  every  qualifying  widow whose husband dies in the
service on or after January 1, 1984, or withdraws and  enters
on annuity on or after January 1, 1984.
Sec.  11-154.   Amount  of child's annuity.  Beginning on
the effective date of this amendatory Act of 1997 January  1,
of an employee whose death resulted from injury  incurred  in
the  performance  of  duty, or for the children where a widow
does not exist, exceed 70% of the  employee's  final  monthly
salary,  the annuity for each child shall be reduced pro rata
so that the combined  annuities  for  the  family  shall  not
exceed such limitation;
(2)  For  the  family  of  an employee whose death is the
result of  any  cause  other  than  injury  incurred  in  the
performance  of duty, in which the combined annuities for the
annuity for each child shall be reduced pro rata so that  the
combined  annuities  for  the  family  shall  not exceed such
A child's annuity shall be paid  to  the  parent  who  is
providing  for  the  child,  unless  another  person has been
appointed the child's legal guardian.
The  increase  in  child's  annuity  provided   by   this
amendatory  Act  of  1997  1987  shall  apply  to all child's
annuities being paid on or after the effective date  of  this
amendatory Act of 1997. January 1, 1988, subject to The above
limitations  on  the combined annuities for a family in parts
(1) and (2) of this Section  do  not  apply  to  families  of
employees   who  died  before  the  effective  date  of  this
Sec. 11-215.  Computation of service.
(a)  In computing the term  of  service  of  an  employee
prior  to  the effective date, the entire period beginning on
the date he was first appointed and ending on the day  before
the  effective  date,  except  any  intervening period during
which he was separated by withdrawal from service,  shall  be
counted for all purposes of this Article. Only the first year
of  each  period  of lay-off or leave of absence without pay,
continuing or extending for a period in excess of  one  year,
shall be counted as such service.
(b)  For  a  person employed by an employer for whom this
Article was in effect prior to August  1,  1949,  from  whose
July 31, 1949, any period of service rendered  prior  to  the
effective  date,  unless  he was in service on the day before
the effective date, shall not be counted as service.
(c)  In computing the term  of  service  of  an  employee
following periods of time shall  be  counted  as  periods  of
service for annuity purposes:
(1)  the  time  during which he performed the duties
(2)  leaves of absence with whole or part  pay,  and
leaves of absence without pay not longer than 90 days;
(3)  leaves  of  absence  without pay during which a
provided that  (A)  the  participant  continues  to  make
employee  contributions  to the Fund as though he were an
active  employee,  based  on  the  regular  salary   rate
received  by the participant for his municipal employment
immediately prior to such leave of absence  (and  in  the
case  of  such employment prior to December 9, 1987, pays
for such employment  plus  regular  interest  thereon  as
with  such labor organization after the effective date of
this amendatory Act of 1991, (B) after  January  1,  1989
the   participant,  or  the  labor  organization  on  the
participant's behalf, makes contributions to the Fund  as
though  it were the employer, in the same amount and same
manner as specified under  this  Article,  based  on  the
regular  salary  rate received by the participant for his
municipal employment immediately prior to such  leave  of
absence, and  based on his current salary with such labor
Act of 1991, and (C) the  participant  does  not  receive
(4)  any  period of disability for which he received
part pay.
(d)  For  a  person  employed  by  an  employer,  or  the
retirement board, in which "The 1935 Act" was in effect prior
to August 1, 1949, from whose  salary  deductions  are  first
made  under  "The  1935  Act"  or this Article after July 31,
1949, any  period  of  service  rendered  subsequent  to  the
effective  date  and  prior  to  August 1, 1949, shall not be
counted as a period of service  under  this  Article,  except
such period for which he made payment, as provided in Section
11-221  of  this  Article, in which case such period shall be
counted as a period  of  service  for  all  annuity  purposes
hereunder.
(e)  In  computing  the  term  of  service of an employee
subsequent to the day before the effective date for  ordinary
disability  benefit  purposes,  the following periods of time
shall be counted as periods of service:
(1)  any period during which he performed the duties
(2)  leaves of absence with whole or part pay;
(3)  any period of disability for which he  received
(i) a duty disability benefit under this Article, or (ii)
a  temporary  total disability benefit under the Workers'
However, any period of service rendered  by  an  employee
contributor  prior to the date he became a contributor to the
fund shall not be counted as a period of service for ordinary
disability purposes, unless the person made payment  for  the
period  as  provided  in  Section  11-221 of this Article, in
which case the period shall be counted as a period of service
for ordinary disability purposes for periods of disability on
or after the effective date of this amendatory Act of 1997.
(40 ILCS 5/14-103.04) (from Ch. 108 1/2, par. 14-103.04)
Sec.    14-103.04.    Department.     "Department":   Any
department, institution, board, commission,  officer,  court,
or  any  agency of the State having power to certify payrolls
to the State Comptroller authorizing payments  of  salary  or
wages  against  State  appropriations, or against trust funds
held  by  the  State  Treasurer,  except  those   departments
included  under the term "employer" in the State Universities
Retirement  System.   "Department"  includes   the   Illinois
Development  Finance  Authority.   "Department" also includes
the Illinois Comprehensive Health  Insurance  Board  and  the
Illinois Rural Bond Bank.
Sec. 14-104.  Service for which contributions  permitted.
Contributions  provided  for  in this Section shall cover the
period of service  granted,  and  be  based  upon  employee's
compensation  and  contribution rate in effect on the date he
last became a member of the System;  provided  that  for  all
employment  prior  to  January  1, 1969 the contribution rate
shall be that in effect for a noncovered employee on the date
he  last  became  a  member  of  the  System.   Contributions
permitted under this Section shall include  regular  interest
from  the date an employee last became a member of the System
to date of payment.
These  contributions  must  be  paid   in   full   before
retirement either in a lump sum or in installment payments in
accordance with such rules as may be adopted by the board.
(a)  Any  member  may  make  contributions as required in
this Section for any period of  service,  subsequent  to  the
date of establishment, but prior to the date of membership.
(b)  Any  employee  who had been previously excluded from
membership because of age at entry  and  subsequently  became
eligible  may elect to make contributions as required in this
Section for  the  period  of  service  during  which  he  was
ineligible.
(c)  An  employee  of  the  Department  of Insurance who,
after January 1, 1944 but  prior  to  becoming  eligible  for
membership, received salary from funds of insurance companies
in  the  process of rehabilitation, liquidation, conservation
or dissolution, may elect to make contributions  as  required
in this Section for such service.
(d)  Any  employee who rendered service in a State office
to which he was elected, or rendered service in the  elective
office  of  Clerk of the Appellate Court prior to the date he
became a member, may make contributions for such  service  as
required   in   this  Section.   Any  member  who  served  by
appointment of the Governor under  the  Civil  Administrative
Code  of  Illinois and did not participate in this System may
make contributions as  required  in  this  Section  for  such
(e)  Any  person employed by the United States government
or any instrumentality or agency thereof from January 1, 1942
through November 15, 1946 as the result of  a  transfer  from
State  service  by  executive  order  of the President of the
United States shall  be  entitled  to  prior  service  credit
covering the period from January 1, 1942 through December 31,
1943  as  provided  for  in  this  Article  and to membership
service credit  for the period from January 1,  1944  through
November  15,  1946  by  making the contributions required in
this Section.  A person so employed on January  1,  1944  but
whose  employment began after January 1, 1942 may qualify for
prior service and membership service credit  under  the  same
conditions.
(f)  An  employee of the Department of Labor of the State
of  Illinois  who  performed  services  for  and  under   the
supervision  of  that Department prior to January 1, 1944 but
who was compensated for those services  directly  by  federal
funds  and not by a warrant of the Auditor of Public Accounts
paid by the State Treasurer may  establish  credit  for  such
employment  by  making  the  contributions  required  in this
Section. An employee of the Department of Agriculture of  the
State  of  Illinois, who performed services for and under the
supervision of that Department prior to June 1, 1963, but was
compensated for those services directly by federal funds  and
not  paid by a warrant of the Auditor of Public Accounts paid
by the State Treasurer, and who did  not  contribute  to  any
other public employee retirement system for such service, may
establish   credit   for   such   employment  by  making  the
contributions required in this Section.
(g)  Any employee who executed  a  waiver  of  membership
within  60  days  prior  to  January 1, 1944 may, at any time
while in the service of a department, file with the  board  a
rescission  of  such  waiver.   Upon making the contributions
required by this Section,  the member shall  be  granted  the
creditable  service  that  would  have  been  received if the
waiver had not been executed.
(h)  Until May 1, 1990, an employee who was employed on a
full-time basis by a  regional  planning  commission  for  at
least 5 continuous years may establish creditable service for
such  employment  by  making the contributions required under
this  Section,  provided  that  any  credits  earned  by  the
employee  in  the  commission's  retirement  plan  have  been
terminated.
(i)  Any  person  who  rendered  full  time   contractual
services to the General Assembly as a member of a legislative
staff  may establish service credit for up to 8 years of such
services by making  the  contributions  required  under  this
Section, provided that application therefor is made not later
than July 1, 1991.
(j)  By paying the contributions otherwise required under
this  Section,  plus  an amount determined by the Board to be
equal to the employer's  normal  cost  of  the  benefit  plus
interest,  an  employee  may  establish  service credit for a
period of up to 2 years spent in active military service  for
which  he  does  not qualify for credit under Section 14-105,
provided that (1) he was  not  dishonorably  discharged  from
such  military  service, and (2) the amount of service credit
established by a member under this subsection (j), when added
to the amount of  military  service  credit  granted  to  the
member  under  subsection  (b)  of  Section 14-105, shall not
exceed 5 years.
(k)  An employee who was employed on a full-time basis by
the  Illinois   State's   Attorneys   Association   Statewide
Appellate Assistance Service LEAA-ILEC grant project prior to
the  time that project became the State's Attorneys Appellate
Service Commission, now the Office of the  State's  Attorneys
Appellate  Prosecutor,  an  agency  of  State government, may
establish creditable service for  not  more  than  60  months
service  for such employment by making contributions required
under this Section.
(l)  Any person who rendered contractual  services  to  a
member   of  the  General  Assembly  as  a  worker  providing
constituent services to persons in the member's district  may
establish  creditable  service  for  up  to  8 years of those
contractual services by  making  the  contributions  required
under  this  Section.  The System shall determine a full-time
salary equivalent for the purpose of calculating the required
contribution.  To establish credit under this subsection, the
applicant must apply to the System by March 1, 1998.
(Source: P.A. 86-273; 86-1488; 87-794; 87-895; 87-1265.)
(40 ILCS 5/14-104.10 new)
Sec. 14-104.10. Illinois Development  Finance  Authority.
An  employee  may  establish  creditable  service for periods
prior to the date upon which the Illinois Development Finance
Authority first becomes a department (as defined  in  Section
14-103.04)  during  which  he  or  she  was  employed  by the
Illinois  Development  Finance  Authority  or  the   Illinois
Industrial  Development Authority, by applying in writing and
paying  to  the  System  an  amount  equal  to  (i)  employee
contributions for  the  period  for  which  credit  is  being
established,  based  upon the employee's compensation and the
applicable contribution rate in effect on the date he or  she
last  became a member of the System, plus (ii) the employer's
normal cost of the credit established, plus (iii) interest on
the amounts in items (i) and (ii) at the  rate  of  2.5%  per
year,  compounded  annually, from the date the applicant last
became a member of the System to the date of payment.    This
payment  must  be paid in full before retirement, either in a
lump sum or in installment payments in  accordance  with  the
rules of the Board.
Sec.  14-105.7.  Transfer  to  Article 9 fund.  (a) Until
July 1, 1998, any active or inactive member of the System who
has established creditable service  under  paragraph  (i)  of
Section  14-104  (relating  to  contractual  service  to  the
General Assembly) and is an active contributor to the pension
fund  established  under  Article 9 of this Code may apply to
the Board for transfer  of  all  of  his  or  her  creditable
service  accumulated under this System to the Article 9 fund.
The  creditable  service  shall  be  transferred   forthwith.
Payment by this System to the Article 9 fund shall be made at
the same time and shall consist of:
(1)  the  amounts  accumulated  to the credit of the
applicant for that service, including  regular  interest,
on the books of the System on the date of transfer; plus
(2)  employer  contributions  in  an amount equal to
the amount determined under item (1).
Participation in this System as to  the  credits  transferred
under this Section terminates on the date of transfer.
(b)  Any  person  transferring  credit under this Section
may reinstate credits and creditable service terminated  upon
receipt  of a refund, by paying to the System, before July 1,
1998, the amount of the refund plus regular interest from the
date of refund to the date of payment.
Sec. 15-106.  Employer.  "Employer":  The  University  of
Illinois,   Southern   Illinois   University,  Chicago  State
University,  Eastern  Illinois  University,  Governors  State
University, Illinois State University, Northeastern  Illinois
University,  Northern  Illinois  University, Western Illinois
University, the State Board of Higher Education, the Illinois
Mathematics and Science Academy, the State Geological  Survey
Division  of  the  Department of Natural Resources, the State
Natural History Survey Division of the Department of  Natural
Resources,  the State Water Survey Division of the Department
of  Natural  Resources,  the  Hazardous  Waste  Research  and
Information Center of the Department  of  Natural  Resources,
the  University  Civil  Service  Merit  Board,  the  Board of
Trustees of the State  Universities  Retirement  System,  the
Illinois  Community College Board, State Community College of
East St. Louis, community college boards, any association  of
community  college boards organized under Section 3-55 of the
Public  Community  College  Act,  the  Board   of   Examiners
established  under  the  Illinois Public Accounting Act, and,
only during  the  period  for  which  employer  contributions
required   under  Section  15-155  are  paid,  the  following
organizations: the alumni associations, the  foundations  and
the  athletic  associations  which  are  affiliated  with the
universities  and  colleges  included  in  this  Section   as
employers. A department as defined in Section 14-103.04 is an
employer  for  any person appointed by the Governor under the
Civil Administrative Code of the State who is a participating
employee as defined in Section 15-109.
(Source: P.A. 89-4, eff. 1-1-96; 89-445, eff. 2-7-96.)
Sec. 15-112.  Final rate of  earnings.   "Final  rate  of
earnings":  For an employee who is paid on an hourly basis or
who  receives  an  annual  salary  in  installments during 12
months of each academic year,  the  average  annual  earnings
during  the  48 consecutive calendar month period ending with
the last day of final termination  of  employment  or  the  4
consecutive academic years of service in which the employee's
earnings  were  the  highest,  whichever is greater.  For any
other employee, the average  annual  earnings  during  the  4
consecutive  academic  years  of  service in which his or her
earnings were the highest.  For an employee with less than 48
months or  4  consecutive  academic  years  of  service,  the
average  earnings during his or her entire period of service.
The earnings of an employee  with  more  than  36  months  of
service  prior to the date of becoming a participant are, for
such period, considered equal to the average earnings  during
the last 36 months of such service.  For an employee on leave
of  absence  with pay, or on leave of absence without pay who
makes contributions during such leave, earnings  are  assumed
to  be  equal to the basic compensation on the date the leave
began.  For an employee on  disability  leave,  earnings  are
assumed  to  be  equal  to the basic compensation on the date
disability occurs or  the  average  earnings  during  the  24
months  immediately  preceding  the month in which disability
occurs, whichever is greater.
For a participant who retires on or after  the  effective
date of this amendatory Act of 1997 with at least 20 years of
service  as  a  firefighter  or  police  officer  under  this
Article,  the final rate of earnings shall be the annual rate
of earnings received by the participant on his  or  her  last
day as a firefighter or police officer under this Article, if
that is greater than the final rate of earnings as calculated
under the other provisions of this Section.
If  a  participant  is  an employee for at least 6 months
during the academic year in which his or  her  employment  is
terminated, the annual final rate of earnings shall be 25% of
the  sum  of (1) the annual basic compensation for that year,
and (2) the amount earned during the  36  months  immediately
preceding  that  year, if this is greater than the final rate
of earnings as calculated under the other provisions of  this
In the determination of the final rate of earnings for an
employee,  that  part  of  an  employee's  earnings  for  any
academic  year  beginning  after June 30, 1997, which exceeds
the employee's earnings with that employer for the  preceding
year  by more than 20 percent shall be excluded; in the event
that an employee has more than one employer  this  limitation
shall  be  calculated  separately  for the earnings with each
employer.   In  making  such  calculation,  only  the   basic
compensation of employees shall be considered, without regard
to   vacation   or   overtime  or  to  contracts  for  summer
The  following  are  not  considered   as   earnings   in
determining   final   rate   of   earnings:  separation  pay,
retirement pay, payment in lieu  of  unused  sick  leave  and
payments  from an employer for the period used in determining
final rate of earnings for any purpose  other  than  services
rendered,  leave  of  absence or vacation granted during that
period, and vacation of up  to  56  work  days  allowed  upon
termination  of  employment  under  a  vacation  policy of an
employer which was in effect on or before January 1, 1977.
Intermittent periods of service shall  be  considered  as
consecutive in determining final rate of earnings.
Sec.  15-113.2.  Service  for leaves of absence. "Service
for leaves of absence" includes those periods  of  leaves  of
absence  at  less  than  50%  pay,  except military leave and
periods of disability leave in excess of 60 days,  for  which
the  employee  pays  the contributions required under Section
15-157 in accordance with rules prescribed by the board based
upon the employee's basic compensation on the date the  leave
begins,  or  in  the case of leave for service with a teacher
organization, based upon the actual compensation received  by
the  employee for such service after January 26, 1988, if the
employee so elects within 30 days of that date  or  the  date
the  leave  for  service  with a teacher organization begins,
whichever is later; provided that the employee (1) returns to
employment covered by this system at the  expiration  of  the
leave,   or  within  30  days  after  the  termination  of  a
disability which occurs during the leave and  continues  this
employment  at  a percentage of time equal to or greater than
the percentage of time immediately  preceding  the  leave  of
absence  for  at least 8 consecutive months or a period equal
to the period of the leave, whichever  is  less,  or  (2)  is
precluded  from  meeting  the foregoing conditions because of
disability or death.  If service credit is denied because the
employee fails to meet these  conditions,  the  contributions
covering  the  leave  of  absence  shall  be refunded without
interest.  The return to employment condition does not  apply
if  the  leave  of  absence  is  for  service  with a teacher
organization and the leave of absence is  in  effect  on  the
effective date of this amendatory Act of 1993.
Service  credit  provided  under  this  Section shall not
exceed 3 years in any period of 10 years, unless the employee
is on special leave granted by the employer for service  with
a  teacher  organization.  Commencing with the fourth year in
any period of 10 years, a participant on such  special  leave
is  also  required to pay employer contributions equal to the
normal cost as defined in  Section  15-155,  based  upon  the
employee's  basic  compensation on the date the leave begins,
or  based  upon  the  actual  compensation  received  by  the
employee for service  with  a  teacher  organization  if  the
employee has so elected.
Sec.  15-113.3.  Service for periods of military service.
"Service for periods of military  service":   Those  periods,
not  exceeding  5  years, during which a person served in the
armed forces of the United States, of which all but  2  years
must have immediately followed a period of employment with an
employer under this system or the State Employees' Retirement
System  of  Illinois;  provided  that  the  person received a
discharge  other  than  dishonorable  and  again  became   an
employee  under  this system within one year after discharge.
However, for the up  to  2  years  of  military  service  not
immediately  following  employment,  the  applicant must make
contributions to the System (1)  at  the  rates  provided  in
Section  15-157  based upon the employee's basic compensation
on the last date as a participating employee  prior  to  such
military  service,  or  on  the first date as a participating
employee after such military service, whichever  is  greater,
plus (2) an amount determined by the board to be equal to the
employer's  normal  cost  of  the  benefits  accrued for such
military service, plus (3) interest on items (1) and  (2)  at
the  effective  rate  from  the  later  of  the date of first
membership in  the  System  or  the  date  of  conclusion  of
military  service  to  the date of payment. The change in the
required contribution for purchased military credit  made  by
this  amendatory Act of 1993 does not entitle any person to a
refund of contributions already paid.
The changes to this Section made by this  amendatory  Act
of  1991  shall apply not only to persons who on or after its
effective date are in service under the System, but  also  to
persons  whose  employment  terminated  prior  to  that date,
whether or not the person is an annuitant on that  date.   In
the  case  of  an  annuitant who applies for credit allowable
under this Section for a period of military service that  did
not  immediately  follow  employment,  and  who  has made the
required contributions for such credit, the annuity shall  be
recalculated  to  include the additional service credit, with
the increase taking effect on the date  the  System  received
written  notification  of  the annuitant's intent to purchase
the credit, if payment of all the required  contributions  is
made  within  60  days  of  such notice, or else on the first
annuity payment date following the date  of  payment  of  the
required  contributions.  In calculating the automatic annual
increase for an annuity that has been recalculated under this
Section, the increase attributable to the additional  service
allowable under this amendatory Act of 1991 shall be included
in  the  calculation  of  automatic annual increases accruing
after the effective date of the recalculation.
Sec. 15-113.4.  Service for unused sick  leave.  "Service
for  unused  sick  leave":   A participant who is an employee
under this System or one of  the  other  systems  subject  to
Article  20 of this Code within 60 days immediately preceding
the date on which his or her retirement  annuity  begins,  is
entitled  to  credit  for  service for that portion of unused
sick leave  earned  in  the  course  of  employment  with  an
employer   and   credited  on  the  date  of  termination  of
employment by an employer for which payment is not  received,
in  accordance  with  the  following schedule:  30 through 90
full calendar days and 20 through 59 full work days of unused
sick leave, 1/4 of a year of service;  91  through  180  full
calendar  days  and  60  through 119 full work days, 1/2 of a
year of service; 181 through 270 full calendar days  and  120
through  179  full  work days, 3/4 of a year of service;  271
through 360 full calendar days and 180 through 240 full  work
days,  one  year of service.  Only uncompensated, unused sick
leave earned in accordance  with  an  employer's  sick  leave
accrual  policy  generally applicable to employees or a class
of employees shall  be  taken  into  account  in  calculating
service credit under this Section.  Any uncompensated, unused
sick  leave  granted by an employer to facilitate the hiring,
retirement, termination, or other special circumstances of an
employee shall not  be  taken  into  account  in  calculating
service   credit  under  this  Section.    If  a  participant
transfers from one employer to another, the unused sick leave
credited by the previous  employer  shall  be  considered  in
determining  service  to be credited under this Section, even
if the participant terminated service prior to the  effective
date  of  P.A.  86-272  (August  23, 1989); if necessary, the
retirement annuity shall be recalculated to reflect such sick
leave credit.  Each employer shall certify to the  board  the
number   of   days  of  unused  sick  leave  accrued  to  the
participant's credit  on  the  date  that  the  participant's
status as an employee terminated.  This period of unused sick
leave  shall  not  be  considered in determining the date the
retirement annuity begins.
Sec. 15-113.5.  Service for employment with other  public
agencies  in  this State.  "Service for employment with other
public  agencies  in  this  State":  includes  the  following
(a)  periods during which a person rendered services  for
the  State  of  Illinois,  prior  to  January  1, 1944, under
employment not covered by this Article, if (1)  such  periods
would have been considered creditable service under the State
Employees' Retirement System of Illinois had that system been
in  effect  at  that  time,  and  (2) service credit for such
periods has not  been  granted  under  the  State  Employees'
Retirement System of Illinois.
(b)  periods   credited   under   the   State  Employees'
Retirement System of Illinois on the date an employee  became
eligible   for   participation   in  the  State  Universities
Retirement System as a  result  of  a  transfer  of  a  State
function  from  a  department,  commission or other agency of
this State to an employer, excluding periods  as  a  "covered
employee" as defined in Article 14 of this Code, provided the
employee  has  received  a refund of his or her contributions
from the State Employees' Retirement System of  Illinois  and
pays  to this system contributions equal to the amount of the
refund together with compound interest at the  rate  required
for  repayment of a refund under Section 15-154 from the date
the refund is received to the date payment is made.
(c)  periods credited in a retirement system  covering  a
governmental unit, as defined in Section 20-107 on the date a
person  becomes  a  participant,  if  (1)  a function of this
governmental unit is transferred in whole or in  part  to  an
employer,  and  (2)  the person transfers employment from the
governmental unit to such employer within 6 months after  the
employer  begins  operation  of  this  function,  and (3) the
person cannot qualify for a proportional  retirement  annuity
from  the  retirement system covering this governmental unit,
and (4) the participant receives  a  refund  of  his  or  her
contributions   from  the  retirement  system  covering  this
governmental unit and pays to this system contributions equal
to the amount of the refund together with  compound  interest
from  the  date  the refund is made by the system to the date
payment is received by the board at the rate of 6% per  annum
through  August  31,  1982,  and at the effective rates after
that date.
(d)  periods during which a  participant  contributed  to
the  Park  Policemen's  Annuity  Fund  as  defined in Section
5-219, provided the participant and the  Chicago  Policemen's
Annuity  Fund  pay  to  this system the required employee and
employer contributions.
(e)  periods during which a person rendered services  for
an  athletic  association  affiliated  with the University of
Illinois, provided that (1) the employee was employed by that
athletic  association  on  January  1,  1960,   (2)   annuity
contracts  covering  that  employment  have been purchased by
other retirement systems covering employees of  the  athletic
association,  and  (3)  the  employee files with the board an
election to become a participant and assigns to the board his
or her right, title, and interest in those annuity contracts.
Sec.  15-113.7.  Service  for  other  public  employment.
"Service  for  other  public  employment":   Includes   those
periods  not  exceeding  the lesser of 10 years or 2/3 of the
service granted under other Sections of this Article  dealing
with  service credit, during which a person was employed full
time by the United States government, or by the government of
a state, or by a political subdivision of a state, or  by  an
agency  or  instrumentality  of  any of the foregoing, if the
person (1) cannot qualify for a retirement pension  or  other
benefit   based  upon  employer  contributions  from  another
retirement system,  exclusive  of  federal  social  security,
based  in whole or in part upon this employment, and (2) pays
the lesser of (A) an amount equal to 8% of his or her  annual
basic  compensation  on  the date of becoming a participating
employee subsequent to this service multiplied by the  number
of  years  of  such  service, together with compound interest
from the date participation begins to  the  date  payment  is
received  by  the  board  at the rate of 6% per annum through
August 31, 1982, and at the effective rates after that  date,
and  (B)  50%  of  the actuarial value of the increase in the
retirement  annuity  provided  by  this  service,   and   (3)
contributes   for   at  least  5  years  subsequent  to  this
employment to one or more  of  the  following  systems:   the
State   Universities   Retirement   System,   the   Teachers'
Retirement  System  of  the State of Illinois, and the Public
School Teachers' Pension and Retirement Fund of Chicago.   If
a  function  of  a  governmental  unit  as defined by Section
20-107 is transferred by law, in  whole  or  in  part  to  an
employer,  and  an  employee  transfers  employment from this
governmental unit to such employer within  6  months  of  the
transfer  of the function, the payment for service authorized
under this Section shall not exceed the  amount  which  would
have  been  payable for this service to the retirement system
covering the governmental unit from which  the  function  was
transferred.
The  service  granted  under  this  Section  shall not be
considered in determining whether the person has the  minimum
of  8  years  of service required to qualify for a retirement
annuity at age 55 or the  5  years  of  service  required  to
qualify  for  a  retirement annuity at age 62, as provided in
Section 15-135.  The maximum allowable service  of  10  years
for  this  governmental  employment  shall  be reduced by the
service credit which is  validated  under  paragraph  (3)  of
Section 16-127 and paragraph one of Section 17-133.
Except  as  hereinafter  provided, this Section shall not
apply to persons who become participants in the system  after
September  1,  1974.   Except as hereinafter provided, credit
for military service under this Section shall be allowed only
to persons who have applied for such credit before  September
1, 1974.  The foregoing September 1, 1974, limitations do not
apply to any person who became a participant in the system on
or  before January 15, 1977, and prior thereto, had a minimum
of 20 years of service credit granted in the General Assembly
Retirement System.
Sec. 15-125.  "Prescribed  Rate  of  Interest;  Effective
Rate of Interest":
(1)  "Prescribed  rate of interest": The rate of interest
to be used in actuarial  valuations  and  in  development  of
actuarial  tables  as determined by the board on the basis of
the probable average effective rate of  interest  on  a  long
term basis.
(2)  "Effective  rate of interest": The interest rate for
all or any part of a fiscal year that is  determined  by  the
board  based  on  factors  including  the  system's  past and
expected  investment  experience;  historical  and   expected
fluctuations   in   the  market  value  of  investments;  the
desirability of minimizing volatility in the  effective  rate
of  interest from year to year; the provision of reserves for
anticipated  losses  upon  sales,   redemptions,   or   other
disposition  of  investments  and  for variations in interest
experience.  This amendatory Act of 1997 is  a  clarification
of  existing  law.  The  interest  rate  for  any fiscal year
determined by the board from the investment experience of the
preceding  fiscal  years   and   the   estimated   investment
experience  of  the  current fiscal year.  In determining the
effective  rate  of  interest  to  be  credited   to   member
contribution  accounts  and  other  reserves,  the  board may
provide for  reserves  for  anticipated  losses  upon  sales,
redemptions  or  other  disposition  of  investments  and for
reserves for variations in interest experience.
Sec. 15-136.2.  Early  retirement  without  discount.   A
participant  whose  retirement  annuity  begins after June 1,
1981 and on or before September 1, 2002 1997 and  within  six
months  of  the  last  day of employment for which retirement
contributions  were  required,  may  elect  at  the  time  of
application to make a one time employee contribution  to  the
System  and  thereby  avoid the early retirement reduction in
retirement annuity specified under subsection (b) of  Section
15-136.  The exercise of the election shall obligate the last
employer  to also make a one time non-refundable contribution
to the System.
The one time employee and employer contributions shall be
a percentage of the retiring participant's highest full  time
annual  salary  rate  during  the  academic  years which were
considered in determining his or her final rate of  earnings,
or  if  not  full  time  then  the full time equivalent.  The
employee contribution rate shall  be  7%  multiplied  by  the
lesser  of the following 2 sums: (1) the number of years that
the participant is less than age 60; or  (2)  the  number  of
years  that the participant's creditable service is less than
35 years.  The employer contribution shall be at the rate  of
20%  for  each year the participant is less than age 60.  The
employer shall pay the employer contribution  from  the  same
source   of  funds  which  is  used  in  paying  earnings  to
Upon receipt of the application and election, the  System
shall   determine   the   one   time  employee  and  employer
contributions.  The provisions of this Section shall  not  be
applicable  until  all  the above outlined contributions have
been  received  by  the  System;  however,  the   date   such
contributions   are  received  shall  not  be  considered  in
determining the effective date of retirement.
For persons who apply to the Board  after  the  effective
date  of this amendatory Act of 1993 and before July 1, 1993,
requesting a retirement annuity to begin no earlier than July
1, 1993 and no later than June 30, 1994, the  employer  shall
pay  both  the  employee  and employer contributions required
The number of employees retiring under  this  Section  in
any  fiscal year may be limited at the option of the employer
to no less than 15% of those eligible.  The  right  to  elect
early  retirement  without  discount shall be allocated among
those applying on the basis of seniority in  the  service  of
the last employer.
Sec.  15-143.   Death  benefits - General provisions. All
death benefits  shall  be  paid  as  a  single  cash  sum  or
otherwise  as  the  beneficiary and the board mutually agree,
except where an annuity is payable under  Section  15-144.  A
death  benefit  shall  be  paid  as soon as practicable after
receipt by the board of (1)  a  written  application  by  the
beneficiary and (2) such evidence of death and identification
as the board shall require.
Sec.   15-153.2.    Disability   retirement  annuity.   A
participant whose disability benefits are discontinued  under
the  provisions  of  clause  (6)  (5)  of  Section 15-152, is
entitled to a disability retirement annuity  of  35%  of  the
basic  compensation  which  was payable to the participant at
the time that disability began, provided at least 2  licensed
and practicing physicians appointed by the board certify that
the  participant  has  a  medically  determinable physical or
mental  impairment  which  would  prevent  him  or  her  from
engaging in any substantial gainful activity, and  which  can
be  expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than  12
months.  The terms "medically determinable physical or mental
impairment" and "substantial gainful activity" shall have the
meanings  ascribed  to  them in the "Social Security Act", as
now  or  hereafter  amended,  and  the   regulations   issued
thereunder.
The  disability  retirement  annuity payment period shall
begin immediately following the expiration of the  disability
benefit  payments  under clause (6) (5) of Section 15-152 and
shall  be  discontinued  when  (1)  the  physical  or  mental
impairment no longer prevents the participant  from  engaging
in any substantial gainful activity, (2) the participant dies
or (3) the participant elects to receive a retirement annuity
under  Sections  15-135 and 15-136.  If a person's disability
retirement annuity is  discontinued  under  clause  (1),  all
rights and credits accrued in the system on the date that the
disability  retirement  annuity  began shall be restored, and
the disability retirement annuity paid shall be considered as
disability payments under clause (6) (5) of Section 15-152.
Sec. 15-157.  Employee Contributions.
(a)  Each participating employee shall make contributions
towards the retirement annuity of each  payment  of  earnings
applicable  to  employment under this system on and after the
date  of  becoming  a  participant  as  follows:   Prior   to
September 1, 1949, 3 1/2% of earnings; from September 1, 1949
to  August 31, 1955, 5%; from September 1, 1955 to August 31,
1969,  6%;  from  September  1,  1969,   6   1/2%.      These
contributions  are  to  be considered as normal contributions
for purposes of this Article.
Each participant who is a police officer  or  firefighter
shall  make  normal  contributions  of  8% of each payment of
earnings applicable to employment  as  a  police  officer  or
firefighter  under this system on or after September 1, 1981,
unless he or she files with the board within  60  days  after
the  effective date of this amendatory Act of 1991 or 60 days
after the board receives notice that he or she is employed as
a police  officer  or  firefighter,  whichever  is  later,  a
written  notice  waiving  the  retirement formula provided by
Rule 4 of Section 15-136.  This waiver shall be  irrevocable.
If  a participant had met the conditions set forth in Section
15-132.1 prior to the effective date of this  amendatory  Act
of   1991   but   failed   to   make  the  additional  normal
contributions required by this paragraph, he or she may elect
to pay the additional contributions plus compound interest at
the effective rate.  If  such  payment  is  received  by  the
board,  the  service  shall  be  considered as police officer
service in calculating the retirement annuity under Rule 4 of
Section 15-136.
(b)  Starting  September  1,  1969,  each   participating
employee  shall make additional contributions of 1/2 of 1% of
earnings to finance a portion  of  the  cost  of  the  annual
increases   in  retirement  annuity  provided  under  Section
(c)  Each participating  employee  shall  make  survivors
insurance  contributions  of  1% of earnings applicable under
this system on and after August 1,  1959.   Contributions  in
excess  of $80 during any fiscal year beginning before August
31, 1969 and  in  excess  of  $120  during  any  fiscal  year
thereafter  until  September  1,  1971 shall be considered as
additional contributions for purposes of this Article.
(d)  If the board by board rule so permits and subject to
such conditions and limitations as may be  specified  in  its
rules,  a participant may make other additional contributions
of such percentage of earnings or amounts as the  participant
shall  elect  in  a  written  notice  thereof received by the
(e)  That fraction of a participant's  total  accumulated
normal  contributions, the numerator of which is equal to the
number of years  of  service  in  excess  of  that  which  is
required  to  qualify for the maximum retirement annuity, and
the denominator of which is equal to the total service of the
participant, shall be considered  as  accumulated  additional
contributions.   The  determination of the applicable maximum
annuity and the adjustment in contributions required by  this
provision  shall  be made as of the date of the participant's
retirement.
(f)  Notwithstanding  the  foregoing,   a   participating
employee  shall  not  be required to make contributions under
this Section after the date upon which  continuance  of  such
contributions  would  otherwise  cause  his or her retirement
annuity to exceed the maximum retirement annuity as specified
in clause (1) of subsection (c) of Section 15-136.
Sec. 15-167.2.  To issue bonds.  To borrow money and,  in
evidence  of  its obligation to repay the borrowing, to issue
bonds for the purpose of financing the cost of  any  project.
The  bonds shall be authorized pursuant to a resolution to be
adopted by the board setting forth all details in  connection
with the bonds.
The  principal  amount  of  the  outstanding bonds of the
board shall not at any time exceed $20,000,000 $10,000,000.
The bonds may be issued in one or more series, bear  such
date  or  dates,  become  due at such time or times within 40
years, bear interest payable at such intervals  and  at  such
rate  or  rates,  which rates may be fixed or variable, be in
such  denominations,  be  in  such   form,   either   coupon,
registered or book-entry, carry such conversion, registration
and  exchange  privileges, be subject to defeasance upon such
terms, have such  rank  or  priority,  be  executed  in  such
manner, be payable in such medium of payment at such place or
places   within  or  without  the  State  of  Illinois,  make
provision for a corporate trustee within or without the State
of Illinois with respect to such bonds, prescribe the rights,
powers and duties thereof to be exercised for the benefit  of
the  board, the system and the protection of the bondholders,
provide for the holding  in  trust,  investment  and  use  of
moneys,  funds  and accounts held in connection therewith, be
subject to such terms of redemption with or without  premium,
and  be  sold in such manner at private or public sale and at
such price, all as the board shall determine.  Whenever bonds
are sold at a price less than par, they shall be sold at such
price and bear interest at such rate or rates that either the
true interest cost (yield) or the net interest rate,  as  may
be  selected  by  the  board,  received upon the sale of such
bonds does not exceed the maximum interest rate permitted  by
the  Bond  Authorization  Act,  as amended at the time of the
making of the contract.
Any bonds may be refunded or advance refunded  upon  such
terms  as the board may determine for such term of years, not
exceeding 40 years, and in such principal amount, as  may  be
deemed  necessary  by  the  board.   Any  redemption  premium
payable  upon the redemption of bonds may be payable from the
proceeds  of  refunding  bonds  issued  for  the  purpose  of
refunding such bonds, from any lawfully available  source  or
from both refunding bond proceeds and such other sources.
The  bonds or refunding bonds shall be obligations of the
board payable from the income, interest and dividends derived
from investments of the board, all as may  be  designated  in
the  resolution  of the board authorizing the issuance of the
bonds.  The  bonds  shall  be  secured  as  provided  in  the
authorizing resolution, which may, notwithstanding any  other
provision   of  this  Code,  include  a  specific  pledge  or
assignment of and lien on or security interest in the income,
interest and dividends derived from investments of the  board
and  a  specific  pledge  or  assignment  of  and  lien on or
security  interest  in  any  funds,  reserves   or   accounts
established  or  provided  for by the resolution of the board
authorizing the issuance of the bonds. The bonds or refunding
bonds shall not be payable  from  any  employer  or  employee
contributions   derived   from   State   appropriations   nor
constitute  obligations  or  indebtedness  of  the  State  of
Illinois  or  of  any  municipal  corporation  or  other body
politic and corporate in the State.
The holder or holders of any bonds issued  by  the  board
may bring suits at law or proceedings in equity to compel the
performance  and observance by the board or any of its agents
or employees of  any  contract  or  covenant  made  with  the
holders  of  the  bonds,  to  compel  the board or any of its
agents or employees to perform  any  duties  required  to  be
performed  for the benefit of the holders of the bonds by the
provisions of the resolution authorizing their issuance,  and
to  enjoin  the  board or any of its agents or employees from
taking any action in  conflict  with  any  such  contract  or
covenant.
Notwithstanding  the provisions of Section 15-188 of this
Code, if the board fails to pay the principal of, premium, if
any, or interest on any of the bonds as they  become  due,  a
civil  action  to  compel  payment  may  be instituted in the
appropriate circuit court by the holder  or  holders  of  the
bonds  upon  which such default exists or by a trustee acting
on behalf of the holders.
No bonds may be issued under this Section until a copy of
the resolution of the board authorizing such bonds, certified
by the secretary of  the  board,  has  been  filed  with  the
Governor of the State of Illinois.
"Bonds" means any instrument evidencing the obligation to
pay   money,   including  without  limitation  bonds,  notes,
installment or  financing  contracts,  leases,  certificates,
warrants, and any other evidences of indebtedness.
"Project" means the acquisition, construction, equipping,
improving,  expanding  and  furnishing of any office building
for the use of the  system,  including  any  real  estate  or
interest  in  real  estate  necessary or useful in connection
therewith.
"Cost of any project" includes all capital costs  of  the
project,  an  amount  for  expenses  of  issuing any bonds to
finance such project, including  underwriter's  discount  and
costs  of  bond  insurance  or  other  credit enhancement, an
amount necessary to  provide  for  a  reserve  fund  for  the
payment of the principal of and interest on such bonds and an
amount  to  pay  interest  on  such bonds for a period not to
exceed the greater of 2 years or a  period  ending  6  months
after the estimated date of completion of the project.
Sec.  15-168.1.  Testimony and the production of records.
The secretary of the Board shall  have  the  power  to  issue
subpoenas  to  compel  the  attendance  of  witnesses and the
production  of   documents   and   records,   including   law
enforcement  records  maintained by law enforcement agencies,
in conjunction with a disability claim, administrative review
proceedings, or felony forfeiture investigation.  The fees of
witnesses for attendance and travel shall be the same as  the
fees of witnesses before the circuit courts of this State and
shall  be  paid by the party seeking the subpoena.  The Board
may apply to any circuit court in  the  State  for  an  order
requiring  compliance  with  a  subpoena  issued  under  this
Section.   Subpoenas  issued  under  this  Section  shall  be
subject  to  applicable  provisions  of  the  Code  of  Civil
Sec.  15-185.   Annuities,  etc.  Exempt. The accumulated
employee and employer contributions shall be  held  in  trust
for  each  participant and annuitant, and this trust shall be
treated as a spendthrift trust. Except as  provided  in  this
Article,  all  cash,  securities  and  other property of this
system, all annuities and other benefits payable  under  this
Article  and  all  accumulated  credits  of  participants and
annuitants in this system and the  right  of  any  person  to
receive  an annuity or other benefit under this Article, or a
refund of contributions, shall not be  subject  to  judgment,
execution,  garnishment,  attachment,  or  other  seizure  by
process,  in  bankruptcy  or  otherwise, nor to sale, pledge,
mortgage or other alienation, and shall  not  be  assignable.
The board, however, may deduct from the benefits, refunds and
credits payable to the participant, annuitant or beneficiary,
amounts  owed  by the participant or annuitant to the system.
No attempted sale, transfer or  assignment  of  any  benefit,
refund or credit shall prevent the right of the board to make
the  deduction  and  offset  authorized  in this Section. Any
participant or annuitant may authorize the  board  to  deduct
from disability benefits or annuities, premiums due under any
group  hospital-surgical insurance program which is sponsored
or approved by any employer;  however,  the  deductions  from
disability benefits may not begin prior to 6 months after the
disability occurs.
A  person  receiving  an  annuity  or  benefit  may  also
authorize  withholding  from  such annuity or benefit for the
purposes  enumerated  in  the  State   Salary   and   Annuity
Withholding Act.
This  amendatory  Act  of  1989  is  a  clarification  of
existing law and shall be applicable to every participant and
annuitant  without  regard  to  whether status as an employee
terminates before the effective date of this  amendatory  Act
Sec. 15-190.  Persons under legal disability. If a person
is under legal disability when any right or privilege accrues
to him or her under this Article, a guardian may be appointed
pursuant to law, and may, on behalf of such person, claim and
exercise  any such right or privilege with the same force and
effect as if the person had not been under a legal disability
and had claimed or exercised such right or privilege.
If a person's application for benefits or  a  physician's
certificate  on  file with the board shows that the person is
under a legal disability, and no guardian has been  appointed
for  his  or  her  estate,  the  benefits  payable under this
Article may be paid (1) directly to the  person  under  legal
disability, or (2) to either parent of the person under legal
disability  or  any  adult  person with whom the person under
legal disability may at the time  be  living,  provided  only
that  such parent or adult person to whom any amount is to be
paid shall have advised the board in writing that such amount
will be held or used for the  benefit  of  the  person  under
legal  disability, or (3) to the trustee of any trust created
for the sole benefit of the  person  under  legal  disability
while  that  person is living, provided only that the trustee
of such trust to whom any amount is to  be  paid  shall  have
advised the board in writing that such amount will be held or
used  for  the  benefit of the person under legal disability.
The system shall not be required to determine the validity of
the trust or any of the terms thereof.  The representation of
the trustee that the trust meets  the  requirements  of  this
Section  shall  be  conclusive as to the system.  The written
receipt of the person under legal  disability  or  the  other
person  who  receives  such  payment  shall  be  an  absolute
discharge  of the system's liability in respect of the amount
so paid.
Sec. 15-191.  Payment  of  benefits  to  minors.  If  any
benefits  under  this  Article become payable to a minor, the
board may make payment (1) directly to the minor, (2) to  any
person who has legally qualified and is acting as guardian of
the minor's person or property in any jurisdiction, or (3) to
either  parent  of the minor or to any adult person with whom
the minor may at the time be living, provided only  that  the
parent or other person to whom any amount is to be paid shall
have  advised  the  board in writing that such amount will be
held or used for the benefit of the  minor,  or  (4)  to  the
trustee  of  any  trust  created  for the sole benefit of the
minor while that minor is  living,  provided  only  that  the
trustee  of such trust to whom any amount is to be paid shall
have advised the board in writing that such  amount  will  be
held  or used for the benefit of the minor.  The system shall
not be required to determine the validity of the trust or any
of the terms thereof.  The representation of the trustee that
the trust meets the requirements of  this  Section  shall  be
conclusive  as  to  the  system.  The  written receipt of the
minor, parent, trustee, or other  person  who  receives  such
payment  shall  be  an  absolute  discharge  of  the system's
liability in respect of the amount so paid.
Sec. 16-140.  Survivors' benefits - definitions.
(a)  For the purpose of Sections 16-138 through 16-143.2,
the following terms shall have the following meanings, unless
the context otherwise requires:
(1)  "Average salary": the average salary for the highest
4 consecutive years within the last 10  years  of  creditable
service  immediately  preceding  date of death or retirement,
whichever is applicable, or the average salary for the  total
creditable service if service is less than 4 years.
(2)  "Member":  any teacher included in the membership of
the system. However, a teacher who becomes  an  annuitant  of
the  system  or  a  teacher whose services terminate after 20
years of service from any  cause  other  than  retirement  is
considered   a   member,   subject   to  the  conditions  and
limitations stated in this Article.
(3)  "Dependent beneficiary": (A) a surviving spouse of a
member  or  annuitant  who  was  married  to  the  member  or
annuitant for the 12 month period immediately  preceding  and
on  the  date  of  death  of such member or annuitant, except
where a child is born of such marriage,  in  which  case  the
qualifying  period shall not be applicable; (A-1) a surviving
spouse of a member or annuitant who (i) was  married  to  the
member  or annuitant on the date of the member or annuitant's
death, (ii) was married to the  member  or  annuitant  for  a
period  of  at  least  12  months (but not necessarily the 12
months  immediately  preceding  the  member  or   annuitant's
death),  (iii)  first applied for a survivor's benefit before
April January 1, 1997 1994,  and  (iv)  has  not  received  a
benefit  under  subsection (a) of Section 16-141 or paragraph
(1) of Section 16-142; (B) an eligible child of a  member  or
annuitant; and (C) a dependent parent.
Unless  otherwise  designated  by the member, eligibility
for benefits shall be in  the  order  named,  except  that  a
dependent  parent shall be eligible only if there is no other
dependent beneficiary.  Any benefit to be received by or paid
to a  dependent  beneficiary  to  be  determined  under  this
paragraph  as  provided  in Sections 16-141 and 16-142 may be
received by or paid to a trust established for such dependent
beneficiary if such dependent beneficiary is  living  at  the
time such benefit would be received by or paid to such trust.
(4)  "Eligible  child":  an  unmarried natural or adopted
child of the member or annuitant under age 18.  An  unmarried
natural or adopted child, regardless of age, who is dependent
by reason of a physical or mental disability, except any such
child  receiving  benefits  under Article III of the Illinois
Public Aid Code, is eligible for so long as such physical  or
mental  disability  continues.  An adopted child, however, is
eligible only if the proceedings for adoption were  finalized
while the child was a minor.
For  purposes  of  this subsection, "disability" means an
inability to engage in any substantial  gainful  activity  by
reason  of  any  medically  determinable  physical  or mental
impairment which can be expected to result in death or  which
has lasted or can be expected to last for a continuous period
of not less than 12 months.
(5)  "Dependent  parent":  a  parent who was receiving at
least 1/2 of his or her support from a  member  or  annuitant
for the 12-month period immediately preceding and on the date
of such member's or annuitant's death, provided however, that
such  dependent  status terminates upon a member's acceptance
of a refund for survivor benefit  contributions  as  provided
under Section 16-142.
(6)  "Non-dependent     beneficiary":     any     person,
organization  or  other  entity  designated by the member who
does not qualify as a dependent beneficiary.
(7)  "In service": the condition of  a  member  being  in
receipt  of  salary as a teacher at any time within 12 months
immediately before his  or  her  death,  being  on  leave  of
absence  for which the member, upon return to teaching, would
be eligible  to  purchase  service  credit  under  subsection
(b)(5) of Section 16-127, or being in receipt of a disability
or  occupational  disability  benefit.   This  term  does not
include any annuitant or member  who  previously  accepted  a
refund  of survivor benefit contributions under paragraph (1)
of  Section  16-142  unless  the  conditions   specified   in
subsection (b) of Section 16-143.2 are met.
(b)  The  change  to this Section made by this amendatory
Act of 1997 applies without regard to  whether  the  deceased
member  or annuitant was in service on or after the effective
date of this amendatory Act.
(Source: P.A. 89-430, eff. 12-15-95.)
Sec. 16-163.  Board  created.   A  board  of  10  members
constitutes  a  board of trustees authorized to carry out the
provisions of this Article and is responsible for the general
administration of the system.  The  board  is  known  as  the
Board  of  Trustees of the Teachers' Retirement System of the
State  of  Illinois.   The   board   is   composed   of   the
Superintendent  of  Education,  ex-officio,  who shall be the
president of the board; 4 persons, not members of the system,
to be appointed by the Governor, who shall  hold  no  elected
other  State  office;  and  4 teachers, as defined in Section
16-106,  elected  by  the  contributing  members;   and   one
annuitant  member elected by the annuitants of the system, as
provided in Section 16-165.
Section 3.  The Counties  Code  is  amended  by  changing
Sections 3-7002, 3-7005, and 3-15012 as follows:
(55 ILCS 5/3-7002) (from Ch. 34, par. 3-7002)
Sec. 3-7002.  Cook County Sheriff's Merit Board. There is
created  the  Cook  County Sheriff's Merit Board, hereinafter
called the Board, consisting of 5 members  appointed  by  the
Sheriff  with  the  advice  and  consent of the county board,
except  that  on  and  after  the  effective  date  of   this
amendatory   Act   of  1997,  the  Sheriff  may  appoint  two
additional members, with the advice and consent of the county
board, at his  or  her  discretion.   Of  the  members  first
appointed,  one  shall serve until the third Monday in March,
1965 one until the third Monday in March, 1967, and one until
the third Monday in March, 1969. Of the 2 additional  members
first  appointed  under  authority  of this amendatory Act of
1991, one shall serve until the third Monday in March,  1995,
and one until the third Monday in March, 1997.
Upon the expiration of the terms of office of those first
appointed (including the 2 additional members first appointed
under  authority  of  this  amendatory  Act  of  1991), their
respective successors shall be appointed to hold office  from
the  third  Monday  in  March of the year of their respective
appointments for a term of 6 years and until their successors
are appointed and qualified for a like term.   As  additional
members  are appointed under authority of this amendatory Act
of  1997,  their  terms  shall  be  set   to   be   staggered
consistently with the terms of the existing Board members. No
more than 3 members of the Board shall be affiliated with the
same  political  party, except that as additional members are
appointed by the Sheriff under authority of  this  amendatory
Act  of 1997, the political affiliation of the Board shall be
such that no more than  one-half  of  the  members  plus  one
additional  member  may be affiliated with the same political
party.  No , nor shall any member shall  have  held  or  have
been  a  candidate  for  an elective public office within one
year preceding his or her appointment.
The Sheriff may deputize members of the Board.
(Source: P.A. 86-962; 86-1028; 87-534.)
Sec. 3-7005.  Meetings. As soon as practicable after  the
members  of  the  Board have been appointed, they shall meet,
upon the call of the Sheriff, and shall organize by selecting
a  chairman  and  a  secretary.  The  initial  chairman   and
secretary,  and  their  successors,  shall be selected by the
Board from among its members for a term of 2 years or for the
remainder of their term of office as a member of  the  Board,
whichever  is  the  shorter.  Two  members of the Board shall
constitute a quorum for the transaction of  business,  except
that  as  additional members are appointed under authority of
this amendatory Act of 1997, the number of members that  must
be  present  to  constitute  a  quorum shall be the number of
members that constitute at least 40% of the Board.  The Board
shall hold regular quarterly meetings and such other meetings
as may be called by the chairman.
(55 ILCS 5/3-15012) (from Ch. 34, par. 3-15012)
Sec.  3-15012.  Executive  Director.  The  Sheriff  shall
appoint  a  an  Executive  Director  to   act  as  the  chief
executive and administrative officer of the  Department.  The
Executive  Director  shall be appointed by the Sheriff from a
list of 3 persons nominated by the members of the  Board.  He
or  she  shall  serve  at the pleasure of the Sheriff. If the
Executive Director is removed, the  Board  shall  nominate  3
persons,  one  of  whom  shall  be selected by the Sheriff to
serve  as  Executive  Director.  The   Executive   Director's
compensation is determined by the County Board.
Section  5.   The Metropolitan Water Reclamation District
Act is amended by changing Section 5.9 as follows:
(70 ILCS 2605/5.9) (from Ch. 42, par. 324s)
Sec. 5.9. The board of trustees shall, at any time  after
March  1 the first half of each fiscal year, have power, by a
two-thirds vote of all the members of such body, to authorize
the making  of  transfers  within  a  department  or  between
departments  of  sums of money appropriated for one corporate
object or function to another corporate object  or  function.
Any  such action by the board of trustees shall be entered in
the proceedings of the board. No appropriation for any object
or function shall be reduced below an  amount  sufficient  to
cover   all   unliquidated   and   outstanding  contracts  or
obligations certified from or against the  appropriation  for
such purpose.
(Source: P.A. 86-399; 86-520; 86-1028.)
Section  95.  The State Mandates Act is amended by adding
Section 8.21 as follows:
(30 ILCS 805/8.21 new)
Sec. 8.21. Exempt mandate.   Notwithstanding  Sections  6
and  8 of this Act, no reimbursement by the State is required
for  the  implementation  of  any  mandate  created  by  this
Section 97.  No acceleration or delay.   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 made by this Act or (ii) provisions derived  from
any other Public Act.
Section  99.  Effective date.  This Act takes effect upon