98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 SB1687

Introduced 2/15/2013, by Sen. Daniel Biss

SYNOPSIS AS INTRODUCED:

`40 ILCS 5/15-139.5`
`40 ILCS 5/15-168.2`

Amends the State Universities Article of the Illinois Pension Code. Delays by one year the implementation of the return to service provisions added by Public Act 97-968. Authorizes an employer to notify the System that an annuitant is returning to service by providing the annuitant's rate of compensation and anticipated length of employment (now, an employer may give notice in that manner only if there is not a written employment contract). Effective immediately.

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FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning public employee benefits.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Pension Code is amended by changing

5 Sections 15-139.5 and 15-168.2 as follows:

6 (40 ILCS 5/15-139.5)

7 Sec. 15-139.5. Return to work by affected annuitant; notice

8 and contribution by employer.

9 (a) An employer who employs or re-employs a person

10 receiving a retirement annuity from the System in an academic

11 year beginning on or after August 1, 2014 ~~2013~~ must notify the

12 System of that employment within 60 days after employing the

13 annuitant. The notice must include a copy of the contract of

14 employment, or it ~~; if no written contract of employment~~

15 ~~exists, then the notice~~ must specify the rate of compensation

16 and the anticipated length of employment of that annuitant. The

17 notice must specify whether the annuitant will be compensated

18 from federal, corporate, foundation, or trust funds or grants

19 of State funds that identify the principal investigator by

20 name. The notice must include the employer's determination of

21 whether or not the annuitant is an "affected annuitant" as

22 defined in subsection (b).

23 The employer must also record, document, and certify to the

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1 System (i) the number of paid days and paid weeks worked by the

2 annuitant in the academic year, (ii) the amount of compensation

3 paid to the annuitant for employment during the academic year,

4 and (iii) the amount of that compensation, if any, that comes

5 from either federal, corporate, foundation, or trust funds or

6 grants of State funds that identify the principal investigator

7 by name.

8 As used in this Section, "academic year" has the meaning

9 ascribed to that term in Section 15-126.1; "paid day" means a

10 day on which a person performs personal services for an

11 employer and for which the person is compensated by the

12 employer; and "paid week" means a calendar week in which a

13 person has at least one paid day.

14 For the purposes of this Section, an annuitant whose

15 employment by an employer extends over more than one academic

16 year shall be deemed to be re-employed by that employer in each

17 of those academic years.

18 The System may specify the time, form, and manner of

19 providing the determinations, notifications, certifications,

20 and documentation required under this Section.

21 (b) A person receiving a retirement annuity from the System

22 becomes an "affected annuitant" on the first day of the

23 academic year following the academic year in which the

24 annuitant first meets both of the following conditions:

25 (1) While receiving a retirement annuity under this

26 Article, the annuitant has been employed on or after August

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1 1, 2014 ~~2013~~ by one or more employers under this Article

2 for a total of more than 18 paid weeks (which need not have

3 been with the same employer or in the same academic year);

4 except that any periods of employment for which the

5 annuitant was compensated solely from federal, corporate,

6 foundation, or trust funds or grants of State funds that

7 identify the principal investigator by name are excluded.

8 (2) While receiving a retirement annuity under this

9 Article, the annuitant was employed on or after August 1,

10 2014 ~~2013~~ by one or more employers under this Article and

11 received or became entitled to receive during an academic

12 year compensation for that employment in excess of 40% of

13 his or her highest annual earnings prior to retirement;

14 except that compensation paid from federal, corporate,

15 foundation, or trust funds or grants of State funds that

16 identify the principal investigator by name is excluded.

17 A person who becomes an affected annuitant remains an

18 affected annuitant, except for any period during which the

19 person returns to active service and does not receive a

20 retirement annuity from the System.

21 (c) It is the obligation of the employer to determine

22 whether an annuitant is an affected annuitant before employing

23 the annuitant. For that purpose the employer may require the

24 annuitant to disclose and document his or her relevant prior

25 employment and earnings history. Failure of the employer to

26 make this determination correctly and in a timely manner or to

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1 include this determination with the notification required

2 under subsection (a) does not excuse the employer from making

3 the contribution required under subsection (e).

4 The System may assist the employer in determining whether a

5 person is an affected annuitant. The System shall inform the

6 employer if it discovers that the employer's determination is

7 inconsistent with the employment and earnings information in

8 the System's records.

9 (d) Upon the request of an annuitant, the System shall

10 certify to the annuitant the following information as reported

11 by the employers, as that information is indicated in the

12 records of the System: (i) the annuitant's highest annual

13 earnings prior to retirement, (ii) the number of paid weeks

14 worked by the annuitant for an employer on or after August 1,

15 2014 ~~2013~~, (iii) the compensation paid for that employment in

16 each academic year, and (iv) whether any of that employment or

17 compensation has been certified to the System as being paid

18 from federal, corporate, foundation, or trust funds or grants

19 of State funds that identify the principal investigator by

20 name. The System shall only be required to certify information

21 that is received from the employers.

22 (e) In addition to the requirements of subsection (a), an

23 employer who employs an affected annuitant must pay to the

24 System an employer contribution in the amount and manner

25 provided in this Section, unless the annuitant is compensated

26 by that employer solely from federal, corporate, foundation, or

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1 trust funds or grants of State funds that identify the

2 principal investigator by name.

3 The employer contribution required under this Section for

4 employment of an affected annuitant in an academic year shall

5 be equal to 12 times the amount of the gross monthly retirement

6 annuity payable to the annuitant for the month in which the

7 first paid day of that employment in that academic year occurs,

8 after any reduction in that annuity that may be imposed under

9 subsection (b) of Section 15-139.

10 If an affected annuitant is employed by more than one

11 employer in an academic year, the employer contribution

12 required under this Section shall be divided among those

13 employers in proportion to their respective portions of the

14 total compensation paid to the affected annuitant for that

15 employment during that academic year.

16 If the System determines that an employer, without

17 reasonable justification, has failed to make the determination

18 of affected annuitant status correctly and in a timely manner,

19 or has failed to notify the System or to correctly document or

20 certify to the System any of the information required by this

21 Section, and that failure results in a delayed determination by

22 the System that a contribution is payable under this Section,

23 then the amount of that employer's contribution otherwise

24 determined under this Section shall be doubled.

25 The System shall deem a failure to correctly determine the

26 annuitant's status to be justified if the employer establishes

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1 to the System's satisfaction that the employer, after due

2 diligence, made an erroneous determination that the annuitant

3 was not an affected annuitant due to reasonable reliance on

4 false or misleading information provided by the annuitant or

5 another employer, or an error in the annuitant's official

6 employment or earnings records.

7 (f) Whenever the System determines that an employer is

8 liable for a contribution under this Section, it shall so

9 notify the employer and certify the amount of the contribution.

10 The employer may pay the required contribution without interest

11 at any time within one year after receipt of the certification.

12 If the employer fails to pay within that year, then interest

13 shall be charged at a rate equal to the System's prescribed

14 rate of interest, compounded annually from the 366th day after

15 receipt of the certification from the System. Payment must be

16 concluded within 2 years after receipt of the certification by

17 the employer. If the employer fails to make complete payment,

18 including applicable interest, within 2 years, then the System

19 may, after giving notice to the employer, certify the

20 delinquent amount to the State Comptroller, and the Comptroller

21 shall thereupon deduct the certified delinquent amount from

22 State funds payable to the employer and pay them instead to the

23 System.

24 (g) If an employer is required to make a contribution to

25 the System as a result of employing an affected annuitant and

26 the annuitant later elects to forgo his or her annuity in that

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1 same academic year pursuant to subsection (c) of Section

2 15-139, then the required contribution by the employer shall be

3 waived, and if the contribution has already been paid, it shall

4 be refunded to the employer without interest.

5 (h) Notwithstanding any other provision of this Article,

6 the employer contribution required under this Section shall not

7 be included in the determination of any benefit under this

8 Article or any other Article of this Code, regardless of

9 whether the annuitant returns to active service, and is in

10 addition to any other State or employer contribution required

11 under this Article.

12 (i) Notwithstanding any other provision of this Section to

13 the contrary, if an employer employs an affected annuitant in

14 order to continue critical operations in the event of either an

15 employee's unforeseen illness, accident, or death or a

16 catastrophic incident or disaster, then, for one and only one

17 academic year, the employer is not required to pay the

18 contribution set forth in this Section for that annuitant. The

19 employer shall, however, immediately notify the System upon

20 employing a person subject to this subsection (i). For the

21 purposes of this subsection (i), "critical operations" means

22 teaching services, medical services, student welfare services,

23 and any other services that are critical to the mission of the

24 employer.

25 (Source: P.A. 97-968, eff. 8-16-12.)

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1 (40 ILCS 5/15-168.2)

2 Sec. 15-168.2. Audit of employers. Beginning August 1, 2014

3 ~~2013~~, the System may audit the employment records and payroll

4 records of all employers. When the System audits an employer,

5 it shall specify the exact information it requires, which may

6 include but need not be limited to the names, titles, and

7 earnings history of every individual receiving compensation

8 from the employer. If an employer is audited by the System,

9 then the employer must provide to the System all necessary

10 documents and records within 60 calendar days after receiving

11 notification from the System. When the System audits an

12 employer, it shall send related correspondence by certified

13 mail.

14 (Source: P.A. 97-968, eff. 8-16-12.)

15 Section 99. Effective date. This Act takes effect upon

16 becoming law.