Article 16 - Teachers' Retirement System Of The State Of Illinois

(40 ILCS 5/Art. 16 heading)

ARTICLE 16.
TEACHERS’ RETIREMENT SYSTEM OF THE STATE OF ILLINOIS

(40 ILCS 5/16-101) (from Ch. 108 1/2, par. 16-101)

Sec. 16-101.
Creation of system.
Effective July 1, 1939,
there is created the “Teachers’ Retirement System of the State of
Illinois” for the purpose of providing retirement annuities and other
benefits for teachers, annuitants and beneficiaries. All of its business
shall be transacted, its funds invested, and its assets held in such name.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-102) (from Ch. 108 1/2, par. 16-102)

Sec. 16-102.
Application of Article.
This Article shall not apply to cities and school districts of more than
500,000 population as shown by the last preceding Federal census.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-103) (from Ch. 108 1/2, par. 16-103)

Sec. 16-103.
Terms defined.
The terms used in this Article shall have the meanings ascribed to them
in Sections 16-104 through 16-122.1, except
when the context
otherwise requires.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-104) (from Ch. 108 1/2, par. 16-104)

Sec. 16-104.
Retirement system or system.

“Retirement system” or “system”: The Teachers’ Retirement System of the
State of Illinois.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-105) (from Ch. 108 1/2, par. 16-105)

Sec. 16-105.
Board.
“Board”: The board of trustees of the retirement system
created under this Article.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-106) (from Ch. 108 1/2, par. 16-106)

Sec. 16-106. Teacher. “Teacher”: The following individuals, provided
that, for employment prior to July 1, 1990, they are employed on a
full-time basis, or if not full-time, on a permanent and continuous basis
in a position in which services are expected to be rendered for at least
one school term:

(1) Any educational, administrative, professional or other staff employed in the public common schools included within this system in a position requiring certification under the law governing the certification of teachers;
(2) Any educational, administrative, professional or other staff employed in any facility of the Department of Children and Family Services or the Department of Human Services, in a position requiring certification under the law governing the certification of teachers, and any person who (i) works in such a position for the Department of Corrections, (ii) was a member of this System on May 31, 1987, and (iii) did not elect to become a member of the State Employees’ Retirement System pursuant to Section 14-108.2 of this Code; except that “teacher” does not include any person who (A) becomes a security employee of the Department of Human Services, as defined in Section 14-110, after June 28, 2001 (the effective date of Public Act 92-14), or (B) becomes a member of the State Employees’ Retirement System pursuant to Section 14-108.2c of this Code;
(3) Any regional superintendent of schools, assistant regional superintendent of schools, State Superintendent of Education; any person employed by the State Board of Education as an executive; any executive of the boards engaged in the service of public common school education in school districts covered under this system of which the State Superintendent of Education is an ex-officio member;
(4) Any employee of a school board association operating in compliance with Article 23 of the School Code who is certificated under the law governing the certification of teachers, provided that he or she becomes such an employee before the effective date of this amendatory Act of the 99th General Assembly;
(5) Any person employed by the retirement system
who:

(i) was an employee of and a participant in the system on August 17, 2001 (the effective date of Public Act 92-416), or
(ii) becomes an employee of the system on or after August 17, 2001;

(6) Any educational, administrative, professional or other staff employed by and under the supervision and control of a regional superintendent of schools or the chief administrative officer of the education service centers established under Section 2-3.62 of the School Code and serving that portion of a Class II county outside a city of 500,000 or more inhabitants, provided such employment position requires the person to be certificated under the law governing the certification of teachers and is in an educational program serving 2 or more districts in accordance with a joint agreement authorized by the School Code or by federal legislation;
(7) Any educational, administrative, professional or other staff employed in an educational program serving 2 or more school districts in accordance with a joint agreement authorized by the School Code or by federal legislation and in a position requiring certification under the laws governing the certification of teachers;
(8) Any officer or employee of a statewide teacher organization or officer of a national teacher organization who is certified under the law governing certification of teachers, provided: (i) the individual had previously established creditable service under this Article, (ii) the individual files with the system an irrevocable election to become a member before the effective date of this amendatory Act of the 97th General Assembly, (iii) the individual does not receive credit for such service under any other Article of this Code, and (iv) the individual first became an officer or employee of the teacher organization and becomes a member before the effective date of this amendatory Act of the 97th General Assembly;
(9) Any educational, administrative, professional, or other staff employed in a charter school operating in compliance with the Charter Schools Law who is certificated under the law governing the certification of teachers;
(10) Any person employed, on the effective date of this amendatory Act of the 94th General Assembly, by the Macon-Piatt Regional Office of Education in a birth-through-age-three pilot program receiving funds under Section 2-389 of the School Code who is required by the Macon-Piatt Regional Office of Education to hold a teaching certificate, provided that the Macon-Piatt Regional Office of Education makes an election, within 6 months after the effective date of this amendatory Act of the 94th General Assembly, to have the person participate in the system. Any service established prior to the effective date of this amendatory Act of the 94th General Assembly for service as an employee of the Macon-Piatt Regional Office of Education in a birth-through-age-three pilot program receiving funds under Section 2-389 of the School Code shall be considered service as a teacher if employee and employer contributions have been received by the system and the system has not refunded those contributions.

An annuitant receiving a retirement annuity under this Article who is employed by a board of education
or other employer as permitted under Section 16-118
or 16-150.1 is not a “teacher” for purposes of this Article. A person who
has received a single-sum retirement benefit under Section 16-136.4 of this
Article is not a “teacher” for purposes of this Article. For purposes of this Article, “teacher” does not include a person employed by an entity that provides substitute teaching services under Section 2-3.173 of the School Code and is not a school district.

(Source: P.A. 101-502, eff. 8-23-19; 102-210, eff. 1-1-22.)

(40 ILCS 5/16-106.1) (from Ch. 108 1/2, par. 16-106.1)

Sec. 16-106.1.
Full-time teacher.
“Full-time teacher”: Any teacher
employed 4 or more clock hours per day, 5 days per week.

(Source: P.A. 86-273.)

(40 ILCS 5/16-106.2) (from Ch. 108 1/2, par. 16-106.2)

Sec. 16-106.2.
Part-time teacher.
“Part-time teacher”: Any teacher
employed less than 4 clock hours per day or less than 5 days per week.

(Source: P.A. 86-273.)

(40 ILCS 5/16-106.3) (from Ch. 108 1/2, par. 16-106.3)

Sec. 16-106.3. Substitute teacher. “Substitute teacher”: Any teacher
employed on a temporary basis to replace another teacher. “Substitute teacher” does not include an individual employed by an entity that provides substitute teaching services under Section 2-3.173 of the School Code and is not a school district.

(Source: P.A. 100-813, eff. 8-13-18.)

(40 ILCS 5/16-106.4)

Sec. 16-106.4. (Repealed).

(Source: P.A. 98-599, eff. 6-1-14. Repealed by P.A. 100-587, eff. 6-4-18.)

(40 ILCS 5/16-106.6)

Sec. 16-106.6. Teacher certification. For purposes of this Article, a teacher shall be deemed to be certificated if he or she is required to be licensed by the Illinois State Board of Education.

(Source: P.A. 98-92, eff. 7-16-13.)

(40 ILCS 5/16-106.41)

Sec. 16-106.41. Tier 1 member. “Tier 1 member”: A member under this Article who first became a member or participant before January 1, 2011 under any reciprocal retirement system or pension fund established under this Code other than a retirement system or pension fund established under Article 2, 3, 4, 5, 6, or 18 of this Code.

(Source: P.A. 100-587, eff. 6-4-18.)

(40 ILCS 5/16-107) (from Ch. 108 1/2, par. 16-107)

Sec. 16-107.
Member.

“Member”: any teacher included in the membership of this system during
such membership.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-108) (from Ch. 108 1/2, par. 16-108)

Sec. 16-108.
Prior service.

“Prior service”: Service rendered prior to July 1, 1939.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-109) (from Ch. 108 1/2, par. 16-109)

Sec. 16-109.
Membership service.

“Membership service”: Service rendered on and after July 1, 1939.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-110) (from Ch. 108 1/2, par. 16-110)

Sec. 16-110.
Creditable service.

“Creditable service”: The total of prior service and membership service
for which credit is allowed under this Article.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-111) (from Ch. 108 1/2, par. 16-111)

Sec. 16-111.
Beneficiary.
“Beneficiary”: Any person, organization or other entity designated in
writing to receive or any person receiving a survivor benefit or reversionary
annuity provided by this system or granted under any superseded retirement
fund or system.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-111.1) (from Ch. 108 1/2, par. 16-111.1)

Sec. 16-111.1.
Annuitant.
“Annuitant”: Any person retired on a retirement
annuity or disability retirement annuity under this system or any superseded
retirement fund or system.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-112) (from Ch. 108 1/2, par. 16-112)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-112. Regular interest. “Regular interest”:

(a) For computations
based upon prior service credits, interest at the following rates compounded
annually: For periods prior to July 1, 1947, 4% per year; for periods from
July 1, 1947 through June 30, 1971, 3% per year; for periods from July 1,
1971 through June 30, 1977 at the rate of 4% per year; for periods from
July 1, 1977 through June 30, 1981, 5% per year; for periods after June
30, 1981 through June 30, 2014, 6% per year.

(b) For computations based upon membership service credits, interest at
the following rates, compounded annually: For periods prior to July 1,
1971, 3% per year; for periods from July 1, 1971 through June 30, 1977, 4%
per year; for periods from July 1, 1977 through June 30, 1981, 5% per year;
for periods after June 30, 1981 through June 30, 2014, 6% per year.

(c) For a fiscal year that begins on or after July 1, 2014, for all computations, the interest rate of 30-year United States Treasury bonds on July 1 of that given fiscal year, plus 75 basis points.

(Source: P.A. 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-112.
Regular interest.
“Regular interest”:

(Source: P.A. 83-1440.)

(40 ILCS 5/16-113) (from Ch. 108 1/2, par. 16-113)

Sec. 16-113.
Accumulated contributions.
“Accumulated contributions”: The sum of all contributions to this
System made by or on behalf of a member in respect to membership
service and credited to his or her account in the Benefit Trust Reserve,
together with regular interest thereon.

(Source: P.A. 93-469, eff. 8-8-03.)

(40 ILCS 5/16-114) (from Ch. 108 1/2, par. 16-114)

Sec. 16-114.
Annuity.
“Annuity”: A series of monthly payments.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-118) (from Ch. 108 1/2, par. 16-118)

Sec. 16-118. Retirement. “Retirement”: Entry upon a retirement annuity
or receipt of a single-sum retirement benefit granted under this Article
after termination of active service as a teacher.

(a) An annuitant receiving a retirement annuity other than a disability
retirement annuity may accept employment as a teacher from a school board
or other employer specified in Section 16-106 without impairing retirement
status, if that employment:

(1) is not within the school year during which service was terminated; and
(2) does not exceed the following:

(i) before July 1, 2001, 100 paid days or 500 paid hours in any school year;
(ii) during the period beginning July 1, 2001 through June 30, 2011, 120 paid days or 600 paid hours in each school year;
(iii) during the period beginning July 1, 2011 through June 30, 2018, 100 paid days or 500 paid hours in each school year;
(iv) beginning July 1, 2018 through June 30, 2023, 120 paid days or 600 paid hours in each school year, but not more than 100 paid days in the same classroom;
(v) during the period between July 1, 2021 and June 30, 2022, an additional 20 paid days or 100 paid hours shall be added to item (iv) of this paragraph (2) to assist with addressing the substitute teacher shortage that has been exacerbated by the ongoing global pandemic; and
(vi) beginning July 1, 2023, 100 paid days or 500 paid hours in each school year.

Where
such permitted employment is partly on a daily and partly on an hourly basis,
a day shall be considered as 5 hours.

(b) Subsection (a) does not apply to an annuitant who returns to teaching
under the program established in Section 16-150.1, for the duration of his or
her participation in that program.

(Source: P.A. 101-645, eff. 6-26-20; 102-537, eff. 8-20-21; 102-709, eff. 4-22-22.)

(40 ILCS 5/16-121) (from Ch. 108 1/2, par. 16-121)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-121. Salary. “Salary”: The actual compensation received by a teacher during any
school year and recognized by the system in accordance with
rules of the board. For purposes of this Section, “school year” includes
the regular school term plus any additional period for which a teacher is
compensated and such compensation is recognized by the rules of the board.

In the case of a person who first becomes a member on or after
the effective date of this amendatory Act of the 98th General
Assembly, “salary” shall not include any payment for unused
sick or vacation time.

Notwithstanding any other provision of this Code, the
annual salary of a Tier 1 member for the purposes of this Code shall
not exceed, for periods of service on or after the effective
date of this amendatory Act of the 98th General Assembly, the
greater of (i) the annual limitation determined from time to time
under subsection (b-5) of Section 1-160 of this Code, (ii) the annualized
salary of the Tier 1 member on that effective date, or (iii) the annualized salary of the Tier 1 member immediately preceding the expiration, renewal, or amendment of an employment contract or collective bargaining agreement in effect on that effective date.

(Source: P.A. 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-121.
Salary.
“Salary”: The actual compensation received by a teacher during any
school year and recognized by the system in accordance with
rules of the board. For purposes of this Section, “school year” includes
the regular school term plus any additional period for which a teacher is
compensated and such compensation is recognized by the rules of the board.

(Source: P.A. 84-1028.)

(40 ILCS 5/16-122) (from Ch. 108 1/2, par. 16-122)

Sec. 16-122.
Actuarial equivalent.
“Actuarial equivalent”: A benefit or sum of equal value to another
benefit or sum when computed on the basis of mortality tables
and interest rates adopted by the board.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-122.1) (from Ch. 108 1/2, par. 16-122.1)

Sec. 16-122.1.
School term.
“School term”: The period specified under
Section 24-1 of the School Code.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-123) (from Ch. 108 1/2, par. 16-123)

Sec. 16-123.
Membership of System.

(a) The membership of this System shall be composed of all teachers
employed after June 30, 1939 who become members as a condition of
employment on the date they become teachers. Membership shall continue
until the date a member becomes an annuitant, dies, accepts a single-sum
retirement benefit, accepts a refund, or forfeits the rights to a refund.

(b) This Article does not apply to any person first employed after June
30, 1979 as a public service employment program participant under the Federal
Comprehensive Employment and Training Act and whose wages or fringe benefits
are paid in whole or in part by funds provided under such Act.

(Source: P.A. 87-11.)

(40 ILCS 5/16-125) (from Ch. 108 1/2, par. 16-125)

Sec. 16-125.
Creditable service – statement of services.
A member claiming service credit shall file a detailed statement covering
the period for which credit is claimed. As soon as practicable after the
filing of a statement of service credits, the system shall investigate
the validity of the claims for service specified therein. Under rules of
the board, and on the basis of verified service, the board shall furnish
the member a statement of the accumulated service arising therefrom, the
required payment to be made and other conditions to be fulfilled by the
member in order to receive the creditable service. The member may, within
one year from the date of issuance of such statement, request the board
to modify or correct the statement.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-127) (from Ch. 108 1/2, par. 16-127)

Sec. 16-127. Computation of creditable service.

(a) Each member shall receive regular credit for all
service as a teacher from the date membership begins, for which
satisfactory evidence is supplied and all contributions have been paid.

(b) The following periods of service shall earn optional credit and
each member shall receive credit for all such service for which
satisfactory evidence is supplied and all contributions have been paid as
of the date specified:

(1) Prior service as a teacher.
(2) Service in a capacity essentially similar or equivalent to that of a teacher, in the public common schools in school districts in this State not included within the provisions of this System, or of any other State, territory, dependency or possession of the United States, or in schools operated by or under the auspices of the United States, or under the auspices of any agency or department of any other State, and service during any period of professional speech correction or special education experience for a public agency within this State or any other State, territory, dependency or possession of the United States, and service prior to February 1, 1951 as a recreation worker for the Illinois Department of Public Safety, for a period not exceeding the lesser of 2/5 of the total creditable service of the member or 10 years. The maximum service of 10 years which is allowable under this paragraph shall be reduced by the service credit which is validated by other retirement systems under paragraph (i) of Section 15-113 and paragraph 1 of Section 17-133. Credit granted under this paragraph may not be used in determination of a retirement annuity or disability benefits unless the member has at least 5 years of creditable service earned subsequent to this employment with one or more of the following systems: Teachers’ Retirement System of the State of Illinois, State Universities Retirement System, and the Public School Teachers’ Pension and Retirement Fund of Chicago. Whenever such service credit exceeds the maximum allowed for all purposes of this Article, the first service rendered in point of time shall be considered. The changes to this subdivision (b)(2) made by Public Act 86-272 shall apply not only to persons who on or after its effective date (August 23, 1989) are in service as a teacher under the System, but also to persons whose status as such a teacher terminated prior to such effective date, whether or not such person is an annuitant on that date.
(3) Any periods immediately following teaching service, under this System or under Article 17, (or immediately following service prior to February 1, 1951 as a recreation worker for the Illinois Department of Public Safety) spent in active service with the military forces of the United States; periods spent in educational programs that prepare for return to teaching sponsored by the federal government following such active military service; if a teacher returns to teaching service within one calendar year after discharge or after the completion of the educational program, a further period, not exceeding one calendar year, between time spent in military service or in such educational programs and the return to employment as a teacher under this System; and a period of up to 2 years of active military service not immediately following employment as a teacher.
The changes to this Section and Section 16-128 relating to military service made by P.A. 87-794 shall apply not only to persons who on or after its effective date are in service as a teacher under the System, but also to persons whose status as a teacher 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 P.A. 87-794 shall be included in the calculation of automatic annual increases accruing after the effective date of the recalculation.
Credit for military service shall be determined as follows: if entry occurs during the months of July, August, or September and the member was a teacher at the end of the immediately preceding school term, credit shall be granted from July 1 of the year in which he or she entered service; if entry occurs during the school term and the teacher was in teaching service at the beginning of the school term, credit shall be granted from July 1 of such year. In all other cases where credit for military service is allowed, credit shall be granted from the date of entry into the service.
The total period of military service for which credit is granted shall not exceed 5 years for any member unless the service: (A) is validated before July 1, 1964, and (B) does not extend beyond July 1, 1963. Credit for military service shall be granted under this Section only if not more than 5 years of the military service for which credit is granted under this Section is used by the member to qualify for a military retirement allotment from any branch of the armed forces of the United States. The changes to this subdivision (b)(3) made by Public Act 86-272 shall apply not only to persons who on or after its effective date (August 23, 1989) are in service as a teacher under the System, but also to persons whose status as such a teacher terminated prior to such effective date, whether or not such person is an annuitant on that date.
(4) Any periods served as a member of the General Assembly.
(5)(i) Any periods for which a teacher, as defined in Section 16-106, is granted a leave of absence, provided he or she returns to teaching service creditable under this System or the State Universities Retirement System following the leave; (ii) periods during which a teacher is involuntarily laid off from teaching, provided he or she returns to teaching following the lay-off; (iii) periods prior to July 1, 1983 during which a teacher ceased covered employment due to pregnancy, provided that the teacher returned to teaching service creditable under this System or the State Universities Retirement System following the pregnancy and submits evidence satisfactory to the Board documenting that the employment ceased due to pregnancy; and (iv) periods prior to July 1, 1983 during which a teacher ceased covered employment for the purpose of adopting an infant under 3 years of age or caring for a newly adopted infant under 3 years of age, provided that the teacher returned to teaching service creditable under this System or the State Universities Retirement System following the adoption and submits evidence satisfactory to the Board documenting that the employment ceased for the purpose of adopting an infant under 3 years of age or caring for a newly adopted infant under 3 years of age. However, total credit under this paragraph (5) may not exceed 3 years.
Any qualified member or annuitant may apply for credit under item (iii) or (iv) of this paragraph (5) without regard to whether service was terminated before the effective date of this amendatory Act of 1997. In the case of an annuitant who establishes credit under item (iii) or (iv), the annuity shall be recalculated to include the additional service credit. The increase in annuity shall take effect on the date the System receives written notification of the annuitant’s intent to purchase the credit, if the required evidence is submitted and the required contribution paid within 60 days of that notification, otherwise on the first annuity payment date following the System’s receipt of the required evidence and contribution. The increase in an annuity recalculated under this provision shall be included in the calculation of automatic annual increases in the annuity accruing after the effective date of the recalculation.
Optional credit may be purchased under this subsection (b)(5) for periods during which a teacher has been granted a leave of absence pursuant to Section 24-13 of the School Code. A teacher whose service under this Article terminated prior to the effective date of P.A. 86-1488 shall be eligible to purchase such optional credit. If a teacher who purchases this optional credit is already receiving a retirement annuity under this Article, the annuity shall be recalculated as if the annuitant had applied for the leave of absence credit at the time of retirement. The difference between the entitled annuity and the actual annuity shall be credited to the purchase of the optional credit. The remainder of the purchase cost of the optional credit shall be paid on or before April 1, 1992.
The change in this paragraph made by Public Act 86-273 shall be applicable to teachers who retire after June 1, 1989, as well as to teachers who are in service on that date.
(6) Any days of unused and uncompensated accumulated sick leave earned by a teacher. The service credit granted under this paragraph shall be the ratio of the number of unused and uncompensated accumulated sick leave days to 170 days, subject to a maximum of 2 years of service credit. Prior to the member’s retirement, each former employer shall certify to the System the number of unused and uncompensated accumulated sick leave days credited to the member at the time of termination of service. The period of unused sick leave shall not be considered in determining the effective date of retirement. A member is not required to make contributions in order to obtain service credit for unused sick leave.
Credit for sick leave shall, at retirement, be granted by the System for any retiring regional or assistant regional superintendent of schools at the rate of 6 days per year of creditable service or portion thereof established while serving as such superintendent or assistant superintendent.
(7) Periods prior to February 1, 1987 served as an employee of the Illinois Mathematics and Science Academy for which credit has not been terminated under Section 15-113.9 of this Code.
(8) Service as a substitute teacher for work performed prior to July 1, 1990.
(9) Service as a part-time teacher for work performed prior to July 1, 1990.
(10) Up to 2 years of employment with Southern Illinois University – Carbondale from September 1, 1959 to August 31, 1961, or with Governors State University from September 1, 1972 to August 31, 1974, for which the teacher has no credit under Article 15. To receive credit under this item (10), a teacher must apply in writing to the Board and pay the required contributions before May 1, 1993 and have at least 12 years of service credit under this Article.

(b-1) A member may establish optional credit for up to 2 years of service
as a teacher or administrator employed by a private school recognized by the
Illinois State Board of Education, provided that the teacher (i) was certified
under the law governing the certification of teachers at the time the service
was rendered, (ii) applies in writing on or before June 30, 2023, (iii) supplies satisfactory evidence of the employment, (iv)
completes at least 10 years of contributing service as a teacher as defined in
Section 16-106, and (v) pays the contribution required in subsection (d-5) of
Section 16-128. The member may apply for credit under this subsection and pay
the required contribution before completing the 10 years of contributing
service required under item (iv), but the credit may not be used until the
item (iv) contributing service requirement has been met.

(c) The service credits specified in this Section shall be granted only
if: (1) such service credits are not used for credit in any other statutory
tax-supported public employee retirement system other than the federal Social
Security program; and (2) the member makes the required contributions as
specified in Section 16-128. Except as provided in subsection (b-1) of
this Section, the service credit shall be effective as of the date the
required contributions are completed.

Any service credits granted under this Section shall terminate upon
cessation of membership for any cause.

Credit may not be granted under this Section covering any period for
which an age retirement or disability retirement allowance has been paid.

Credit may not be granted under this Section for service as an employee of an entity that provides substitute teaching services under Section 2-3.173 of the School Code and is not a school district.

(Source: P.A. 102-525, eff. 8-20-21.)

(40 ILCS 5/16-128) (from Ch. 108 1/2, par. 16-128)

Sec. 16-128. Creditable service – required contributions.

(a) In order to receive the creditable service specified under
subsection (b) of Section 16-127, a member is required to make the
following contributions: (i) an amount equal to the contributions
which would have been required had such service been rendered as a member
under this System; (ii) for military service not immediately following
employment and for service established under subdivision (b)(10) of
Section 16-127, an amount determined by the Board to be equal to the
employer’s normal cost of the benefits accrued for such service; and (iii)
interest from the date the contributions would have been due (or, in the case
of a person establishing credit for military service under subdivision (b)(3)
of Section 16-127, the date of first membership in the System, if that date
is later) to the date of payment, at the following rate of interest,
compounded annually: for periods prior to July 1, 1965, regular interest; from
July 1, 1965 to June 30, 1977, 4% per year; on and after July 1, 1977, regular
interest.

(b) In order to receive creditable service under paragraph (2) of
subsection (b) of Section 16-127 for those who were not members on June 30,
1963, the minimum required contribution shall be $420 per year of service
together with interest at 4% per year compounded annually from July 1,
preceding the date of membership until June 30, 1977 and at regular
interest compounded annually thereafter to the date of payment.

(c) In determining the contribution required in order to receive creditable
service under paragraph (3) of subsection (b) of Section 16-127, the salary
rate for the remainder of the school term in which a member enters military
service shall be assumed to be equal to the member’s salary rate at the
time of entering military service. However, for military service not
immediately following employment, the salary rate on the last date as a
participating teacher prior to such military service, or on the first date
as a participating teacher after such military service, whichever is
greater, shall be assumed to be equal to the member’s salary rate at the
time of entering military service. For each school term thereafter, the
member’s salary rate shall be assumed to be 5% higher than the salary rate
in the previous school term.

(d) In determining the contribution required in order to receive creditable
service under paragraph (5) of subsection (b) of Section 16-127, a member’s
salary rate during the period for which credit is being established shall be
assumed to be equal to the member’s last salary
rate immediately preceding that period.

(d-5) For each year of service credit to be established under subsection
(b-1) of Section 16-127, a member is required to contribute to the System (i) the employee and employer contribution that would have been required had such service been rendered as a member based on the annual salary rate during the first year of full-time employment
as a teacher under this Article following the private or parochial school service, plus
(ii) interest thereon at the actuarially assumed rate from the date of first full-time employment as a teacher
under this Article following the private or parochial school service to the date of payment,
compounded annually, at a rate determined by the Board.

(d-10) For service credit established under paragraph (6) of subsection (b) of Section 16-127 for days granted by an employer in excess of the member’s normal annual sick leave allotment, the employer is required to pay the normal cost of benefits based upon such service credit. This subsection (d-10) does not apply to sick leave granted to teachers under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005 (the effective date of Public Act 94-4).
The employer contributions required under this subsection (d-10) shall be paid in the form of a lump sum within 30 days after receipt of the bill after the teacher begins receiving benefits under this Article.

(e) Except for contributions under subsection (d-10), the contributions required under this Section may be made from the
date the statement for such creditable service is issued until retirement
date. All such required contributions must be made before any retirement
annuity is granted.

(Source: P.A. 96-546, eff. 8-17-09.)

(40 ILCS 5/16-129.1)

Sec. 16-129.1.
Optional increase in retirement annuity.

(a) A member of the System may qualify for the augmented rate under
subdivision (a)(B)(1) of Section 16-133 for all years of creditable service
earned before July 1, 1998 by making the optional contribution specified in
subsection (b). A member may not elect to qualify for the augmented rate for
only a portion of his or her creditable service earned before July 1, 1998.

(b) The contribution shall be an amount equal to 1.0% of the member’s
highest salary rate in the 4 consecutive school years immediately prior to but
not including the school year in which the application occurs, multiplied by
the number of years of creditable service earned by the member before July 1,
1998 or 20, whichever is less. This contribution shall be reduced by 1.0% of
that salary rate for every 3 full years of creditable service earned by the
member after June 30, 1998. The contribution shall be further reduced at
the rate of 25% of the contribution (as reduced for service after June 30,
1998) for each year of the member’s total creditable service in excess of 34
years. The contribution shall not in any event exceed 20% of that salary
rate.

The member shall pay to the System the amount of the contribution as
calculated at the time of application under this Section. The amount of the
contribution determined under this subsection shall be recalculated at the time
of retirement, and if the System determines that the amount paid by the member
exceeds the recalculated amount, the System shall refund the difference to the
member with regular interest from the date of payment to the date of refund.

The contribution required by this subsection shall be paid in one of the
following ways or in a combination of the following ways that does not extend
over more than 5 years:

(i) in a lump sum on or before the date of retirement;
(ii) in substantially equal installments over a period of time not to exceed 5 years, as a deduction from salary in accordance with subsection (b) of Section 16-154;
(iii) in substantially equal monthly installments over a 24-month period, by reducing the annuitant’s monthly benefit over a 24-month period by the amount of the otherwise applicable contribution. For federal and Illinois tax purposes, the monthly amount by which the annuitant’s benefit is reduced shall not be treated as a contribution by the annuitant, but rather as a reduction of the annuitant’s monthly benefit.

(c) If the member fails to make the full contribution under this Section
in a timely fashion, the payments made under this Section shall be refunded
to the member, without interest. If the member dies before making the full
contribution, the payments made under this Section, together with regular
interest thereon, shall be refunded to the member’s designated beneficiary
for benefits under Section 16-138.

(d) For purposes of this Section and subdivision (a)(B)(1) of Section
16-133, optional creditable service established by a member shall be deemed to
have been earned at the time of the employment or other qualifying event upon
which the service is based, rather than at the time the credit was established
in this System.

(e) The contributions required under this Section are the responsibility of
the teacher and not the teacher’s employer. However, an employer of teachers
may, after the effective date of this amendatory Act of 1998, specifically
agree, through collective bargaining or otherwise, to make the contributions
required by this Section on behalf of those teachers.

(f) A person who, on or after July 1, 1998 and before June 4, 1999, began
receiving a retirement annuity calculated at the augmented rate may apply in
writing to have the annuity recalculated to reflect the changes to this Section
and Section 16-133 that were enacted in Public Act 91-17. The amount of any
resulting decrease in the optional contribution shall be refunded to the
annuitant, without interest. Any resulting increase in retirement annuity
shall take effect on the next annuity payment date following the date of
application under this subsection.

(Source: P.A. 92-416, eff. 8-17-01; 93-469, eff. 8-8-03.)

(40 ILCS 5/16-130) (from Ch. 108 1/2, par. 16-130)

Sec. 16-130.
Creditable service – whole or portion of year.

(a) Except
as provided in paragraph (6) of subsection (b) of Section 16-127, only one
year of service is creditable for all service in any one school year.

(b) For employment prior to July 1, 1990, service rendered for the
regular legal school term, if creditable hereunder, is equivalent to one
year of service, and time less than a legal school term shall be counted as
a portion of a year in the ratio that the number of days paid bears to the
number of days
required at the time to constitute a legal school term; however, service of
170 or more days in any school year after June 30, 1959 shall constitute a
year of service.

For full-time, part-time, and substitute teachers, creditable service in
any school year shall be
that fraction of a year equal to the ratio of
days paid in the legal school term, or the employment agreement if longer, to
170 days.

(d) Creditable service for optional service verified after July 1, 1990
for periods of employment prior to July 1, 1990 shall be calculated as follows:

For full-time, part-time, and substitute teachers, creditable service in
any school year shall be that fraction of a year that is equal to the ratio
of days paid in the legal school term, or employment agreement if longer,
to either the number of days required at the time of service to constitute
a legal school term or the number of days in the employment agreement,
whichever is greater. However, service of 170 or more days in any school
year after June 30, 1959 shall constitute a year of service.

(Source: P.A. 86-273; 86-1028; 86-1488.)

(40 ILCS 5/16-130.1) (from Ch. 108 1/2, par. 16-130.1)

Sec. 16-130.1.

Any active member of the Judges Retirement System may
apply for transfer of his credits and creditable service accumulated under
this System to the Judges Retirement System. Such creditable
service shall be transferred forthwith. Payment by this System to the
Judges Retirement System shall be made at the same time and shall consist of:

(1) the amounts accumulated to the credit of the applicant, including
interest, on the books of the System on the date of transfer; and

(2) employer contributions in an amount equal to the amount of member
contributions as determined under item (1).

Participation in this
System as to any credits transferred under this Section shall terminate on
the date of transfer.

(Source: P.A. 85-1008.)

(40 ILCS 5/16-131.1) (from Ch. 108 1/2, par. 16-131.1)

Sec. 16-131.1.

Transfer of creditable service to the General Assembly
Retirement System.

(a) An active member of the General Assembly Retirement System, and
until May 1, 1993, any person having service credit therein, may apply
to transfer all or any part of his or her creditable service accumulated under
this system to the General Assembly Retirement System. The specified
creditable service shall be transferred upon application. Payment by this
system to the General Assembly Retirement System shall be made at the same time
and shall consist of:

(1) the amounts credited to the member through member contributions for the service to be transferred, including interest if applicable, as of the date of transfer, but excluding any additional or optional contributions, which shall be refunded to the member; and
(2) employer contributions equal in amount to the accumulated member contributions as determined in subparagraph (1).

Participation in this system with respect to the transferred credits
shall terminate on the date of transfer.

(b) An active member of the General Assembly who has creditable service
under the system may establish additional creditable service for periods
during which he or she was an elected official and could have elected to
participate but did not so elect. Creditable service may be established by
payment to the system of an amount equal to the contributions that would
have been made if the person had elected to participate, plus interest at the
rate specified under subsection (a) of Section 16-128 to the date of payment.

(c) An active member of the General Assembly, and until May 1, 1993,
any person having service credit in the General Assembly Retirement System,
may reinstate creditable service terminated upon receipt of a refund, by
payment to the system of the amount of the refund together with interest
thereon at the rate specified under subsection (a) of Section 16-128 to the
date of payment.

(Source: P.A. 87-1265.)

(40 ILCS 5/16-131.2) (from Ch. 108 1/2, par. 16-131.2)

Sec. 16-131.2.
Validation of service credits.
An active member of the
General Assembly having no creditable service in
the system, may establish creditable service for periods
during which he or she was in an elective office and could have elected
to participate in the system but did not so elect.
Creditable service
may be established by payment to the system of an amount equal to the contributions
that would have been made if the person had elected
to participate plus interest at the rate specified under subsection (a)
of Section 16-128 to the date of payment, together with an equal amount
as the applicable employer contributions, but the total period of such
creditable service that
may be validated shall not exceed 8 years.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-131.3) (from Ch. 108 1/2, par. 16-131.3)

Sec. 16-131.3.

Transfer of creditable service to Article 8, 9 or 13
fund.

(a) Any city officer as defined in Section 8-243.2
of this Code, any county officer elected by vote of the people who is
a participant in the pension fund established under Article 9 of this Code,
and any elected sanitary district commissioner who is a participant in a
pension fund established under Article 13 of this Code, may apply for
transfer of his or her contributions and creditable service accumulated
under this System to such Article 8, 9 or 13 fund. Such creditable
service shall be transferred forthwith. Payment by this System to the
Article 8, 9 or 13 fund shall be made at the same time and shall consist of:

(1) the amounts credited to the member through member contributions, including interest if applicable, as of the date of transfer, but excluding any additional or optional contributions, which shall be refunded to the member; and
(2) employer contributions equal in amount to the accumulated member contributions as determined in item (1) above.

Participation in this system shall terminate on the date of transfer.

(b) Any such elected city officer, county officer or sanitary district commissioner
who has creditable service under the System may establish additional
creditable service for periods during which he or she could have elected to
participate but did not so elect. Creditable service may be established by
payment to the System of an amount equal to the contributions that would
have been made if the person had elected to participate, plus interest at the
rate specified under subsection (a) of Section 16-128 to the date of payment.

(c) Any such elected city officer, county officer or sanitary district
commissioner
may reinstate creditable service terminated upon receipt of a refund, by
payment to the System of the amount of the refund,
together with interest at the rate specified under subsection (a) of
Section 16-128 to the date of payment.

(Source: P.A. 85-964; 86-1488.)

(40 ILCS 5/16-131.4) (from Ch. 108 1/2, par. 16-131.4)

Sec. 16-131.4.

(a) Until July 1, 1989, any county sheriff who is a
participant in the pension fund established under Article 7 of this Act may
apply for transfer of up to 102 months of his or her contributions and
creditable service accumulated under this System to such Article 7 fund.
Such creditable service shall be transferred forthwith. Payment by this
System to the Article 7 fund shall be made at the same time and shall
consist of:

(1) the amounts credited to the member through member contributions for such
service, including interest if applicable, as of the date of transfer, but
excluding any additional or optional contributions, which shall be refunded
to the member; and

(2) employer contributions equal in amount to the accumulated member
contributions as determined in item (1) above.

Participation in this System as to any credits transferred under this Section
shall terminate on the date of transfer.

(b) Any such county sheriff may reinstate creditable service
terminated upon receipt of a refund, by
payment to the System, prior to July 1, 1989, of the amount of the refund,
together with interest at the rate specified under subsection (a) of
Section 16-128 to the date of payment. This is not a limitation on the
repayment provisions of Article 20.

(Source: P.A. 85-941.)

(40 ILCS 5/16-131.5) (from Ch. 108 1/2, par. 16-131.5)

Sec. 16-131.5.

(a) Persons otherwise required or eligible to participate
in this System who elect to continue participation in the General Assembly
System under Section 2-117.1 may not participate in this System for the
duration of such continued participation under Section 2-117.1.

(b) Upon terminating such continued participation, a person may transfer
credits and creditable service accumulated under Section 2-117.1 to this System,
upon payment to this System of the amount by which (1) the employer and
employee contributions that would have been required if he had participated
in this System during the period for which credit under Section 2-117.1
is being transferred, plus interest thereon from the date of such
participation to the date of payment, exceeds (2) the amounts actually
transferred under that Section to this System.

(Source: P.A. 86-272.)

(40 ILCS 5/16-131.6) (from Ch. 108 1/2, par. 16-131.6)

Sec. 16-131.6.
Transfer to Article 14.

(a) Any active member of the State
Employees’ Retirement System of Illinois may apply for transfer to that
System of credits and creditable service accumulated under this System for
service as a teacher employed by the Department of Corrections. Such
creditable service shall be transferred forthwith. Payment by this System
to the State Employees’ Retirement System shall be made at the same time
and shall consist of:

(1) the amounts accumulated to the credit of the applicant for such service, including interest, on the books of this System on the date of transfer; and
(2) employer contributions in an amount equal to the amount of member contributions as determined under item (1).
Participation in this System as to any credits transferred under this
subsection shall terminate on the date of transfer.

(b) Any active member of the State Employees’ Retirement System of
Illinois may apply for transfer to that System of credits and creditable
service accumulated under this System for service as a security employee of
the Department of Human Services as defined (at the time of application) in
Section 14-110. That creditable service shall be transferred forthwith.
Payment by this System to the State Employees’ Retirement System 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 interest, on the books of this System on the date of transfer, but excluding any contribution paid by the member under Section 16-129.1 to upgrade that credit to the augmented rate, which shall be refunded to the member; and
(2) employer contributions in an amount equal to the amount of member contributions as determined under item (1).
Participation in this System as to any credits transferred under this
subsection shall terminate on the date of transfer.

(Source: P.A. 92-14, eff. 6-28-01.)

(40 ILCS 5/16-132) (from Ch. 108 1/2, par. 16-132)

Sec. 16-132. Retirement annuity eligibility. A member who has at least 20 years of creditable service is entitled to a
retirement annuity upon or after attainment of age 55.
A member who has at least 10 but less than 20 years of creditable service is
entitled to a retirement annuity upon or after attainment of age 60.
A member who has at least 5 but less than 10 years of creditable service is
entitled to a retirement annuity upon or after attainment of age 62.
A member who (i) has earned during the period immediately preceding the last
day of service at least one year of contributing creditable service as an
employee of a department as defined in Section 14-103.04, (ii) has earned at
least 5 years of contributing creditable service as an employee of a department
as defined in Section 14-103.04, and (iii) retires on or after January 1, 2001
is entitled to a retirement annuity upon or after attainment of an age which,
when added to the number of years of his or her total creditable service,
equals at least 85. Portions of years shall be counted as decimal equivalents.

A member who is eligible to receive a retirement annuity of at least 74.6% of
final average salary and will attain age 55 on or before December 31 during the
year which commences on July 1 shall be deemed to attain age 55 on the
preceding June 1.

A member meeting the above eligibility conditions is entitled to a retirement
annuity upon written application to the board setting forth the date the member
wishes the retirement annuity to commence. However, the effective date of the
retirement annuity shall be no earlier than the day following the last day of
creditable service, regardless of the date of official termination of
employment; except that the effective date of a retirement annuity may be after the date of official termination of employment as long as such employment is for (1) less than 10 days in length and (2) less than $2,000 in compensation.

To be eligible for a retirement annuity, a member shall not be employed
as a teacher in the schools included under this System or under Article 17,
except (i) as provided in Section 16-118 or 16-150.1, (ii) if
the member is disabled (in which event, eligibility for salary must cease),
or (iii) if the System is required by federal law to commence
payment due to the member’s age; the changes to this sentence made by this
amendatory Act of the 93rd General Assembly apply without
regard to whether the member terminated employment before or after its
effective date.

(Source: P.A. 102-871, eff. 5-13-22.)

(40 ILCS 5/16-133) (from Ch. 108 1/2, par. 16-133)

Sec. 16-133. Retirement annuity; amount.

(a) The amount of the retirement annuity shall be (i) in the case of a person who first became a teacher under this Article before July 1, 2005, the larger of the
amounts determined under paragraphs (A) and (B) below, or (ii) in the case of a person who first becomes a teacher under this Article on or after July 1, 2005, the amount determined under the applicable provisions of paragraph (B):

(A) An amount consisting of the sum of the following:

(1) An amount that can be provided on an actuarially equivalent basis by the member’s accumulated contributions at the time of retirement; and
(2) The sum of (i) the amount that can be provided on an actuarially equivalent basis by the member’s accumulated contributions representing service prior to July 1, 1947, and (ii) the amount that can be provided on an actuarially equivalent basis by the amount obtained by multiplying 1.4 times the member’s accumulated contributions covering service subsequent to June 30, 1947; and
(3) If there is prior service, 2 times the amount that would have been determined under subparagraph (2) of paragraph (A) above on account of contributions which would have been made during the period of prior service creditable to the member had the System been in operation and had the member made contributions at the contribution rate in effect prior to July 1, 1947.

This paragraph (A) does not apply to a person who first becomes a teacher under this Article on or after July 1, 2005.
(B) An amount consisting of the greater of the following:

(1) For creditable service earned before July 1, 1998 that has not been augmented under Section 16-129.1: 1.67% of final average salary for each of the first 10 years of creditable service, 1.90% of final average salary for each year in excess of 10 but not exceeding 20, 2.10% of final average salary for each year in excess of 20 but not exceeding 30, and 2.30% of final average salary for each year in excess of 30; and
For creditable service earned on or after July 1, 1998 by a member who has at least 24 years of creditable service on July 1, 1998 and who does not elect to augment service under Section 16-129.1: 2.2% of final average salary for each year of creditable service earned on or after July 1, 1998 but before the member reaches a total of 30 years of creditable service and 2.3% of final average salary for each year of creditable service earned on or after July 1, 1998 and after the member reaches a total of 30 years of creditable service; and
For all other creditable service: 2.2% of final average salary for each year of creditable service; or
(2) 1.5% of final average salary for each year of creditable service plus the sum $7.50 for each of the first 20 years of creditable service.

The amount of the retirement annuity determined under this paragraph (B) shall be reduced by 1/2 of 1% for each month that the member is less than age 60 at the time the retirement annuity begins. However, this reduction shall not apply (i) if the member has at least 35 years of creditable service, or (ii) if the member retires on account of disability under Section 16-149.2 of this Article with at least 20 years of creditable service, or (iii) if the member (1) has earned during the period immediately preceding the last day of service at least one year of contributing creditable service as an employee of a department as defined in Section 14-103.04, (2) has earned at least 5 years of contributing creditable service as an employee of a department as defined in Section 14-103.04, (3) retires on or after January 1, 2001, and (4) retires having attained an age which, when added to the number of years of his or her total creditable service, equals at least 85. Portions of years shall be counted as decimal equivalents.

(b) For purposes of this Section, except as provided in subsection (b-5), final average salary shall be the
average salary for the highest 4 consecutive years within the last 10 years
of creditable service as determined under rules of the board.

The minimum
final average salary shall be considered to be $2,400 per year.

In the determination of final average salary for members other than
elected officials and their appointees when such appointees are allowed by
statute, that part of a member’s salary for any year beginning after June
30, 1979 which exceeds the member’s annual full-time salary rate with the
same employer for the preceding year by more than 20% shall be excluded.
The exclusion shall not apply in any year in which the member’s creditable
earnings are less than 50% of the preceding year’s mean salary for downstate
teachers as determined by the survey of school district salaries provided in
Section 2-3.103 of the School Code.

(b-5) A teacher who retires on or after June 1, 2021 and for whom the 2020-2021 school year is used in the calculation of the member’s final average salary shall use the higher of the following for the purpose of determining the member’s final average salary:

(A) the amount otherwise calculated under subsection (b); or
(B) an amount calculated by the System using the average salary for the 4 highest years within the last 10 years of creditable service as determined under the rules of the board.

(c) In determining the amount of the retirement annuity under paragraph
(B) of this Section, a fractional year shall be granted proportional credit.

(d) The retirement annuity determined under paragraph (B) of this Section
shall be available only to members who render teaching service after July
1, 1947 for which member contributions are required, and to annuitants who
re-enter under the provisions of Section 16-150.

(e) The maximum retirement annuity provided under paragraph (B) of this
Section shall be 75% of final average salary.

(f) A member retiring after the effective date of this amendatory Act
of 1998 shall receive a pension equal to 75% of final average salary if the
member is qualified to receive a retirement annuity equal to at least 74.6%
of final average salary under this Article or as proportional annuities under
Article 20 of this Code.

(Source: P.A. 102-16, eff. 6-17-21.)

(40 ILCS 5/16-133.1) (from Ch. 108 1/2, par. 16-133.1)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-133.1. Automatic annual increase in annuity.

(a) This subsection (a) is subject to subsections (a-1) and (a-2). Each member with creditable service and retiring on or after August 26,
1969 is entitled to the automatic annual increases in annuity provided under
this Section while receiving a retirement annuity or disability retirement
annuity from the system.

An annuitant shall first be entitled to an initial increase under this
Section on the January 1 next following the first anniversary of retirement,
or January 1 of the year next following attainment of age 61, whichever is
later. At such time, the system shall pay an initial increase determined as
follows:

(1) 1.5% of the originally granted retirement annuity or disability retirement annuity multiplied by the number of years elapsed, if any, from the date of retirement until January 1, 1972, plus
(2) 2% of the originally granted annuity multiplied by the number of years elapsed, if any, from the date of retirement or January 1, 1972, whichever is later, until January 1, 1978, plus
(3) 3% of the originally granted annuity multiplied by the number of years elapsed from the date of retirement or January 1, 1978, whichever is later, until the effective date of the initial increase.
However, the initial annual increase calculated under this Section for the
recipient of a disability retirement annuity granted under Section 16-149.2
shall be reduced by an amount equal to the total of all increases in that
annuity received under Section 16-149.5 (but not exceeding 100% of the amount
of the initial increase otherwise provided under this Section).

Following the initial increase, automatic annual increases in annuity shall
be payable on each January 1 thereafter during the lifetime of the annuitant,
determined as a percentage of the originally granted retirement annuity
or disability retirement annuity for increases granted prior to January
1, 1990, and calculated as a percentage of the total amount of annuity,
including previous increases under this Section, for increases granted on
or after January 1, 1990, as follows: 1.5% for periods prior to January 1,
1972, 2% for periods after December 31, 1971 and prior to January 1, 1978,
and 3% for periods after December 31, 1977.

(a-1) Notwithstanding subsection (a), but subject to the provisions of subsection (a-2), all automatic increases payable under subsection (a) on or after the effective date of this amendatory Act of the 98th General Assembly shall be calculated as 3% of the lesser of (1) the total annuity
payable at the time of the increase, including previous
increases granted, or (2) $1,000 multiplied by the number of years of creditable service upon which the annuity is based; however, in the case of an initial increase under subsection (a) that is subject to this subsection:

(i) if more than one year has elapsed from the date of retirement to the effective date of the initial increase under this Section, the applicable percentage shall be the sum of the percentages for each such elapsed year; and
(ii) in the case of a disability retirement annuity granted under Section 16-149.2, the initial increase shall be subject to the reduction provided in subsection (a) for increases previously received under Section 16-149.5.

Beginning January 1, 2016, the $1,000 referred to in item (2) of this subsection (a-1) shall be increased on each January 1 by the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the preceding September; these adjustments shall be cumulative and compounded.
For the purposes of this subsection (a-1), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new dollar amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the System by November 1 of each year.

This subsection (a-1) is applicable without regard to whether the person is in service on or after the effective date of this amendatory Act of the 98th General Assembly.

(a-2) Notwithstanding subsections (a) and (a-1), for an active or inactive Tier 1 member who has not begun to receive a retirement annuity under this Article before July 1, 2014:

(1) the second automatic annual increase payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 50 on the effective date of this amendatory Act;
(2) the second, fourth, and sixth automatic annual increases payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 47 but less than age 50 on the effective date of this amendatory Act;
(3) the second, fourth, sixth, and eighth automatic annual increases payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 44 but less than age 47 on the effective date of this amendatory Act; and
(4) the second, fourth, sixth, eighth, and tenth automatic annual increases payable under subsection (a) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is less than age 44 on the effective date of this amendatory Act.

For the purposes of Section 1-103.1, this subsection (a-2) is applicable without regard to whether the person is in service on or after the effective date of this amendatory Act of the 98th General Assembly.

(b) The automatic annual increases in annuity provided under this Section
shall not be applicable unless a member has made contributions toward such
increases for a period equivalent to one full year of creditable service.
If a member contributes for service performed after August 26, 1969 but
the member becomes an annuitant before such contributions amount to one
full year’s contributions based on the salary at the date of retirement,
he or she may pay the necessary balance of the contributions to the system
and be eligible for the automatic annual increases in annuity provided under
this Section.

(c) Each member shall make contributions toward the cost of the automatic
annual increases in annuity as provided under Section 16-152.

(d) An annuitant receiving a retirement annuity or disability retirement
annuity on July 1, 1969, who subsequently re-enters service as a teacher
is eligible for the automatic annual increases in annuity provided under
this Section if he or she renders at least one year of creditable service
following the latest re-entry.

(e) In addition to the automatic annual increases in annuity provided
under this Section, an annuitant who meets the service requirements of this
Section and whose retirement annuity or disability retirement annuity began
on or before January 1, 1971 shall receive, on January 1, 1981, an increase
in the annuity then being paid of one dollar per month for each year of
creditable service. On January 1, 1982, an annuitant whose retirement
annuity or disability retirement annuity began on or before January 1, 1977
shall receive an increase in the annuity then being paid of one dollar per
month for each year of creditable service.

On January 1, 1987, any annuitant whose retirement annuity began
on or before January 1, 1977, shall receive an increase in the monthly
retirement annuity equal to 8¢ per year of creditable service times the
number of years that have elapsed since the annuity began.

(Source: P.A. 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-133.1.
Automatic annual increase in annuity.

(a) Each member with creditable service and retiring on or after August 26,
1969 is entitled to the automatic annual increases in annuity provided under
this Section while receiving a retirement annuity or disability retirement
annuity from the system.

(1) 1.5% of the originally granted retirement annuity or disability retirement annuity multiplied by the number of years elapsed, if any, from the date of retirement until January 1, 1972, plus
(2) 2% of the originally granted annuity multiplied by the number of years elapsed, if any, from the date of retirement or January 1, 1972, whichever is later, until January 1, 1978, plus
(3) 3% of the originally granted annuity multiplied by the number of years elapsed from the date of retirement or January 1, 1978, whichever is later, until the effective date of the initial increase.
However, the initial annual increase calculated under this Section for the
recipient of a disability retirement annuity granted under Section 16-149.2
shall be reduced by an amount equal to the total of all increases in that
annuity received under Section 16-149.5 (but not exceeding 100% of the amount
of the initial increase otherwise provided under this Section).

(c) Each member shall make contributions toward the cost of the automatic
annual increases in annuity as provided under Section 16-152.

(Source: P.A. 91-927, eff. 12-14-00.)

(40 ILCS 5/16-133.2) (from Ch. 108 1/2, par. 16-133.2)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-133.2. Early retirement without discount.

(a) A member
retiring after June 1, 1980 and on or before June 30, 2005 (or as provided in subsection (b) of this Section), and
applying for a retirement annuity within 6 months of the last day of
teaching for which retirement contributions were required,
may elect at the time of application for a retirement annuity, to make
a one time member contribution to the System and thereby
avoid the reduction in the retirement annuity for retirement before age
60 specified in paragraph (B) of Section 16-133. The exercise of the
election shall also obligate the last employer to make a one time
non-refundable contribution to the System. Substitute teachers wishing to
exercise this election must teach 85 or more days in one school term with
one employer, who shall be deemed the last employer for purposes of this
Section. The last day of teaching with that employer must be within 6
months of the date of application for retirement. All substitute
teaching credit applied toward the required 85 days must be earned after
June 30, 1990.

The one time member and employer contributions shall be a percentage of
the retiring member’s highest annual salary rate used in the determination
of the average salary for retirement annuity purposes. However, when
determining the one-time member and employer contributions, that part of a
member’s salary with the same employer which exceeds the annual salary rate
for the preceding year by more than 20% shall be excluded. The member
contribution shall be at the rate of 7% for the lesser of the following 2
periods: (1) for each year that the member is less than age 60; or (2) for
each year that the member’s creditable service is less than 35 years. If a
member is at least age 55 and has at least 34 years of creditable service, no
member or employer contribution for the early retirement option shall be
required. The employer contribution shall be at the rate of 20% for each year
the member is under age 60.

Upon receipt of the application and election, the System shall determine
the one time employee and employer contributions required. The member
contribution shall be credited to the individual account of the member and
the employer contribution shall be credited to the Benefit Trust Reserve. The
provisions of this subsection (a) providing for the avoidance of the reduction in retirement annuity shall
not be applicable until the member’s contribution, if any, has been received
by the System; however, the date such contributions are received shall not be
considered in determining the effective date of retirement.

The number of members working for a single employer who may
retire under this subsection or subsection (b) in any year may be limited at the option
of the employer to a specified percentage of those eligible, not less
than 30%, with the right to participate to be allocated among those
applying on the basis of seniority in the service of the employer.

(b) The provisions of subsection (a) of this Section shall remain in effect for a member retiring after June 30, 2005 and on or before July 1, 2007, provided that the member satisfies both of the following requirements:

(1) the member notified his or her employer of intent to retire under this Article on or before the effective date of this amendatory Act of the 94th General Assembly under the terms of a contract or collective bargaining agreement entered into, amended, or renewed with the employer on or before the effective date of this amendatory Act of the 94th General Assembly; and
(2) the effective date of the member’s retirement is on or before July 1, 2007.

The member’s employer must give evidence of the member’s notification by providing to the System:

(i) a copy of the member’s notification to the employer or the record of that notification;
(ii) an affidavit signed by the member and the employer, verifying the notification; and
(iii) any additional documentation that the System may require.

(c) Except as otherwise provided in subsection (b), and subject to the provisions of Section 16-176, a member retiring on or after July 1, 2005 and on or before June 30, 2013 (or January 1, 2014 in the case of a member who has filed a notice of intent to retire with his or her employer on or before June 30, 2013 and attains age 55 during the period July 1, 2013 through December 31, 2013), and applying for a retirement annuity within 6 months of the last day of teaching for which retirement contributions were required, and whose last day of teaching is on or before June 30, 2013, may elect at the time of application for a retirement annuity, to make a one-time member contribution to the System and thereby avoid the reduction in the retirement annuity for retirement before age 60 specified in paragraph (B) of Section 16-133. The exercise of the election shall also obligate the last employer to make a one-time nonrefundable contribution to the System. Substitute teachers wishing to exercise this election must teach 85 or more days in one school term with one employer, who shall be deemed the last employer for purposes of this Section. The last day of teaching with that employer must be within 6 months of the date of application for retirement. All substitute teaching credit applied toward the required 85 days must be earned after June 30, 1990.

The one-time member and employer contributions shall be a percentage of the retiring member’s highest annual salary rate used in the determination of the average salary for retirement annuity purposes. However, when determining the one-time member and employer contributions, that part of a member’s salary with the same employer which exceeds the annual salary rate for the preceding year by more than 20% shall be excluded. The member contribution shall be at the rate of 11.5% for the lesser of the following 2 periods: (1) for each year that the member is less than age 60; or (2) for each year that the member’s creditable service is less than 35 years. The employer contribution shall be at the rate of 23.5% for each year the member is under age 60.

Upon receipt of the application and election, the System shall determine the one-time employee and employer contributions required. The member contribution shall be credited to the individual account of the member and the employer contribution shall be credited to the Benefit Trust Reserve. The avoidance of the reduction in retirement annuity provided under this subsection (c) is not applicable until the member’s contribution, if any, has been received by the System; however, the date that contribution is received shall not be considered in determining the effective date of retirement.

The number of members working for a single employer who may retire under this subsection (c) in any year may be limited at the option of the employer to a specified percentage of those eligible, not less than 10%, with the right to participate to be allocated among those applying on the basis of seniority in the service of the employer.

For persons not qualifying for the early retirement without discount option under this subsection (c), the option is extended for 3 years under subsection (d), but subject to the changes in eligibility, conditions, and required contributions provided in that subsection.

(d) A member who is not eligible for the early retirement without discount option under subsection (c) may qualify for the early retirement without discount option under this subsection (d) if the member (1) retires on or after July 1, 2013 and before July 1, 2016, (2) applies for a retirement annuity within 6 months of the last day of teaching for which retirement contributions were required, and (3) receives a certification of eligibility under this subsection from the member’s last employer. Substitute teachers wishing to exercise this election must teach 85 or more days in one school term with one employer, who shall be deemed the last employer for purposes of this Section. The last day of teaching with that employer must be within 6 months of the date of application for retirement. All substitute teaching credit applied toward the required 85 days must be earned after June 30, 1990.

A qualifying member may elect at the time of application for a retirement annuity to make a one-time member contribution to the System and thereby avoid the reduction in the retirement annuity for retirement before age 60 specified in paragraph (B) of Section 16-133. The exercise of this election shall also obligate the last employer to make a one-time nonrefundable contribution to the System.

The one-time member and employer contributions shall be a percentage of the retiring member’s highest annual salary rate used in the determination of the average salary for retirement annuity purposes. However, when determining the one-time member and employer contributions, that part of a member’s salary with the same employer which exceeds the annual salary rate for the preceding year by more than 20% shall be excluded. The member contribution shall be at the rate of 14.4% for the lesser of the following 2 periods: (1) for each year that the member is less than age 60; or (2) for each year that the member’s creditable service is less than 35 years. The employer contribution shall be at the rate of 29.3% for each year the member is under age 60.

Upon receipt of the application, election, and certification of eligibility, the System shall determine the one-time employee and employer contributions required. The member contribution shall be credited to the individual account of the member and the employer contribution shall be credited to the Benefit Trust Reserve. The avoidance of the reduction in retirement annuity provided under this subsection (d) is not applicable until the member’s contribution has been received by the System; however, the date that contribution is received shall not be considered in determining the effective date of retirement.

Eligibility to retire under this subsection (d) shall require the approval of the member’s last employer under this Article, granted in accordance with criteria adopted by that employer with the mutual consent of the bargaining agent of a majority of the members employed by that employer. If the employer grants its approval for a member to retire under this subsection (d), the employer shall submit a certification of eligibility for the member in a manner prescribed by the System.

The early retirement without discount option under this subsection (d) terminates on July 1, 2016.

For participants to whom subsection (b) of Section 16-132 applies, the references to age 60 in this subsection are increased as provided in subsection (b) of Section 16-132.

(Source: P.A. 98-42, eff. 6-28-13; 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-133.2. Early retirement without discount.

(1) the member notified his or her employer of intent to retire under this Article on or before the effective date of this amendatory Act of the 94th General Assembly under the terms of a contract or collective bargaining agreement entered into, amended, or renewed with the employer on or before the effective date of this amendatory Act of the 94th General Assembly; and
(2) the effective date of the member’s retirement is on or before July 1, 2007.

The member’s employer must give evidence of the member’s notification by providing to the System:

(i) a copy of the member’s notification to the employer or the record of that notification;
(ii) an affidavit signed by the member and the employer, verifying the notification; and
(iii) any additional documentation that the System may require.

The one-time member and employer contributions shall be a percentage of the retiring member’s highest annual salary rate used in the determination of the average salary for retirement annuity purposes. However, when determining the one-time member and employer contributions, that part of a member’s salary with the same employer which exceeds the annual salary rate for the preceding year by more than 20% shall be excluded. The member contribution shall be at the rate of 14.4% for the lesser of the following 2 periods: (1) for each year that the member is less than age 60; or (2) for each year that the member’s creditable service is less than 35 years. The employer contribution shall be at the rate of 29.3% for each year the member is under age 60.

The early retirement without discount option under this subsection (d) terminates on July 1, 2016.

(Source: P.A. 98-42, eff. 6-28-13.)

(40 ILCS 5/16-133.3) (from Ch. 108 1/2, par. 16-133.3)

Sec. 16-133.3. Early retirement incentives for State employees.

(a) To be eligible for the benefits provided in this Section, a person
must:

(1) be a member of this System who, on any day during June, 2002, is (i) in active payroll status as a full-time teacher employed by a department and an active contributor to this System with respect to that employment, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) receiving a disability benefit under Section 16-149 or 16-149.1, but only if the member has not been receiving that benefit for a continuous period of more than 2 years as of the date of application;
(2) not have received any retirement annuity under this Article beginning earlier than August 1, 2002;
(3) file with the Board on or before December 31, 2002 a written application requesting the benefits provided in this Section;
(4) terminate employment under this Article no later than December 31, 2002 (or the date established under subsection (d), if applicable);
(5) by the date of termination of service, have at least 8 years of creditable service under this Article, without the use of any creditable service established under this Section;
(6) by the date of termination of service, have at least 5 years of service credit earned while participating in the System as a teacher employed by a department; and
(7) not receive any early retirement benefit under Section 14-108.3 of this Code.

For the purposes of this Section, “department” means a department as defined
in Section 14-103.04 that employs a teacher as defined in this Article.

(b) An eligible person may establish up to 5 years of creditable service
under this Article by making the contributions
specified in subsection (c). In addition, for each period of creditable
service established under this Section, a person’s age at retirement shall
be deemed to be enhanced by an equivalent period.

The creditable service established under this Section may be used for all
purposes under this Article and the Retirement Systems Reciprocal Act,
except for the computation of final average salary, the determination of salary
or compensation under this Article or any other Article of this Code, or the
determination of eligibility for or the computation of benefits under Section
16-133.2.

The age enhancement established under this Section may be used for all
purposes under this Article (including calculation of a proportionate annuity
payable by this System under the Retirement Systems Reciprocal Act), except for
purposes of a retirement annuity under Section 16-133(a)(A), a
reversionary annuity under Section 16-136, the required distributions under
Section 16-142.3, and the determination of eligibility for or the computation
of benefits under Section 16-133.2. Age enhancement established under this
Section may be used in determining benefits payable under Article 14 of this
Code under the Retirement Systems Reciprocal Act (subject to the limitations
on the use of age enhancement provided in Section 14-108.3); age enhancement
established under this Section shall not be used in determining benefits
payable under other Articles of this Code under the Retirement Systems
Reciprocal Act.

(c) For all creditable service established under this Section, a person
must pay to the System an employee contribution to be determined by the
System, equal to 9.0% of the member’s highest annual salary rate that would be
used in the determination of the average salary for retirement annuity purposes
if the member retired immediately after withdrawal, for each year of creditable
service established under this Section.

If the member receives a lump sum payment for accumulated vacation, sick
leave, and personal leave upon withdrawal from service, and the net amount of
that lump sum payment is at least as great as the amount of the contribution
required under this Section, the entire contribution must be paid by the
employee by payroll deduction. If there is no such lump sum payment, or if it
is less than the contribution required under this Section, the member shall
make an initial payment by payroll deduction, equal to the net amount of the
lump sum payment for accumulated vacation, sick leave, and personal leave,
and have the remaining amount due treated as a reduction from the retirement
annuity in 24 equal monthly installments beginning in the month in which the
retirement annuity takes effect. The required contribution may be paid as a
pre-tax deduction from earnings.

(d) In order to ensure that the efficient operation of State government
is not jeopardized by the simultaneous retirement of large numbers of key
personnel, the director or other head of a department may, for key employees
of that department, extend the December 31, 2002 deadline for terminating
employment under this Article established in subdivision (a)(4) of this
Section to a date not later than April 30, 2003 by so notifying the
System in writing by December 31, 2002.

(e) A person who has received any age enhancement or creditable service
under this Section and who reenters contributing service under this Article or
Article 14 shall thereby forfeit that age enhancement and creditable service,
and become entitled to a refund of the contributions made pursuant to this
Section.

(f) The System shall determine the amount of the increase in the present value of future benefits resulting from the granting of early retirement incentives
under this Section and shall report that amount to the Governor and the Commission on Government Forecasting and Accountability
on or after the effective date of this amendatory Act of the 93rd General Assembly and on or before November 15,
2004. Beginning with State fiscal year 2008, the increase in
liability reported under this subsection (f) shall be included in the
calculation of the required State contribution under Section 16-158.

(g)
In addition to the contributions otherwise required under this Article,
the State shall appropriate and pay to the System an amount equal to
$1,000,000 in State fiscal year 2004.

(h) The Pension Laws Commission (or its successor, the Commission on Government Forecasting and Accountability) shall determine
and report to the General
Assembly, on or before January 1, 2004 and annually thereafter through the year
2013, its estimate of (1) the annual amount of payroll savings likely to be
realized by the State as a result of the early retirement of persons receiving
early retirement incentives under this Section and (2) the net annual savings
or cost to the State from the program of early retirement incentives created
under this Section.

The System, the Department of Central Management Services, the
Governor’s Office of Management and Budget (formerly
Bureau of
the Budget), and all other departments shall provide to the Commission any
assistance that the Commission may request with respect to its reports under
this Section. The Commission may require departments to provide it with any
information that it deems necessary or useful with respect to its reports under
this Section, including without limitation information about (1) the final
earnings of former department employees who elected to receive benefits under
this Section, (2) the earnings of current department employees holding the
positions vacated by persons who elected to receive benefits under this
Section, and (3) positions vacated by persons who elected to receive benefits
under this Section that have not yet been refilled.

(i) The changes made to this Section by this amendatory Act of the 92nd
General Assembly do not apply to persons who retired under this Section on or
before May 1, 1992.

(Source: P.A. 93-632, eff. 2-1-04; 93-839, eff. 7-30-04; 93-1067, eff. 1-15-05; 94-4, eff. 6-1-05.)

(40 ILCS 5/16-133.4) (from Ch. 108 1/2, par. 16-133.4)

Sec. 16-133.4. Early retirement incentives for teachers.

(a) To be eligible for the benefits provided in this Section, a member must:

(1) be a member of this System who, on or after May 1, 1993, is (i) in active payroll status as a full-time teacher employed by an employer under this Article, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) on disability or a leave of absence from such a position, but only if the member has not been receiving benefits under Section 16-149 or 16-149.1 for a continuous period of 2 years or more as of the date of application;
(2) have never previously received a retirement annuity under this Article, except that receipt of a disability retirement annuity does not disqualify a member if the annuity has been terminated and the member has returned to full-time employment under this Article before the effective date of this Section;
(3) file with the Board before March 1, 1993, an application requesting the benefits provided in this Section;
(4) in the case of an employee of an employer that is not a State agency, be eligible to receive a retirement annuity under this Article (for which purpose any age enhancement or creditable service received under this Section may be used), and elect to receive the retirement annuity beginning not earlier than June 1, 1993 and not later than September 1, 1993 (September 1, 1994 if retirement is delayed under subsection (e) of this Section);
(5) in the case of an employee of an employer that is a State agency, be eligible to receive a retirement annuity under this Article (for which purpose any age enhancement or creditable service received under this Section may be used), and elect to receive the retirement annuity beginning not earlier than July 1, 1993 and not later than March 1, 1994 (March 1, 1995 if retirement is delayed under subsection (e) of this Section);
(6) have attained age 50 (without the use of any age enhancement received under this Section) by the effective date of the retirement annuity;
(7) have at least 5 years of creditable service under this System or any of the participating systems under the Retirement Systems Reciprocal Act (without the use of any creditable service received under this Section) by the effective date of the retirement annuity.

(b) An eligible person may establish up to 5 years of creditable service
under this Section. In addition, for each period of creditable service
established under this Section, a person shall have his or her age at
retirement deemed enhanced by an equivalent period.

The creditable service established under this Section may be used for all
purposes under this Article and the Retirement Systems Reciprocal Act,
except for the computation of final average salary, the determination of
salary or compensation under this or any other Article of the Code, or the
determination of eligibility for and the computation of benefits under
Section 16-133.2 of this Article.

The age enhancement established under this Section may be used for all
purposes under this Article (including calculation of a proportionate
annuity payable by this System under the Retirement Systems Reciprocal
Act), except for purposes of a reversionary annuity under Section 16-136,
the retirement annuity under Section 16-133(a)(A), the required
distributions under Section 16-142.3, and the determination of eligibility
for and the computation of benefits under Section 16-133.2 of this Article.
However, age enhancement established under this Section shall not be used
in determining benefits payable under other Articles of this Code under the
Retirement Systems Reciprocal Act.

(c) For all creditable service established under this Section by an
employee of an employer that is not a State agency, the employer must pay
to the System an employer contribution consisting of 20% of the member’s
highest annual salary rate used in the determination of the average salary
for retirement annuity purposes for each year of creditable service granted
under this Section. No employer contribution is required under this
Section from any employer that is a State agency.

The employer contribution shall be paid to the System in one of the
following ways: (i) in a single sum at the time of the member’s
retirement, (ii) in equal quarterly installments over a period of 5 years
from the date of retirement, or (iii) subject to the approval of the Board
of the System, in unequal installments over a period of no more than 5
years from the date of retirement, as provided in a payment plan designed
by the System to accommodate the needs of the employer. The employer’s
failure to make the required contributions in a timely manner shall not
affect the payment of the retirement annuity.

For all creditable service established under this Section, the
employee must pay to the System an employee contribution consisting of
4% of the member’s highest annual salary rate used in the determination of
the retirement annuity for each year of creditable service granted under
this Section. The employee may elect either to pay the employee contribution in
full before the retirement annuity commences, or to have it deducted from the
retirement annuity in 24 monthly installments.

(d) An annuitant who has received any age enhancement or creditable
service under this Section and who re-enters contributing service under
this Article shall thereby forfeit the age enhancement and creditable service,
and upon re-retirement the annuity shall be recomputed. The forfeiture of
creditable service under this subsection shall not entitle the employer to a
refund of the employer contribution paid under this Section, nor to forgiveness
of any part of that contribution that remains unpaid. The forfeiture of
creditable service under this subsection shall not entitle the employee to a
refund of the employee contribution paid under this Section.

(e) If the number of employees of an employer that actually apply for
early retirement under this Section exceeds 30% of those eligible, the
employer may require that, for the number of applicants in excess of that
30%, the starting date of the retirement annuity enhanced under this
Section may not be earlier than June 1, 1994. The right to have the
retirement annuity begin before that date shall be allocated among the
applicants on the basis of seniority in the service of that employer.

This delay applies only to persons who are applying for early
retirement incentives under this Section, and does not prevent a person
whose application for early retirement incentives has been withdrawn from
receiving a retirement annuity on the earliest date upon which
the person is otherwise eligible under this Article.

(f) For a member who is notified after February 15, 1993, but before
September 15, 1993, that he or she will be laid off in the 1993-1994 school
year: (1) the March 1 application deadline in subdivision (a)(3) of this
Section is extended to a date 15 days after the date of issuance of the
layoff notice, and (2) the member shall not be included in the calculation
of the 30% under subsection (e) and is not subject to delay in retirement
under that subsection.

(g) A member who receives any early retirement incentive under Section
16-133.5 may not receive any early retirement incentive under
this Section.

(Source: P.A. 98-463, eff. 8-16-13.)

(40 ILCS 5/16-133.5) (from Ch. 108 1/2, par. 16-133.5)

Sec. 16-133.5.
Early retirement incentives for teachers.

(a) To be eligible for the benefits provided in this Section, a member must:

(1) be a member of this System who, on or after May 1, 1994, is (i) in active payroll status as a full-time teacher employed by an employer under this Article, or (ii) on layoff status from such a position with a right of re-employment or recall to service, or (iii) on disability or a leave of absence from such a position, but only if the member has not been receiving benefits under Section 16-149 or 16-149.1 for a continuous period of 2 years or more as of the date of application;
(2) have never previously received a retirement annuity under this Article, except that receipt of a disability retirement annuity does not disqualify a member if the annuity has been terminated and the member has returned to full-time employment under this Article before the effective date of this Section;
(3) file with the Board before March 1, 1994, an application requesting the benefits provided in this Section;
(4) be eligible to receive a retirement annuity under this Article (for which purpose any age enhancement or creditable service received under this Section may be used), and elect to receive the retirement annuity beginning not earlier than June 1, 1994 and not later than September 1, 1994 (September 1, 1995 if retirement is delayed under subsection (e) of this Section);
(5) have attained age 50 (without the use of any age enhancement received under this Section) by the effective date of the retirement annuity;
(6) have at least 5 years of creditable service under this System or any of the participating systems under the Retirement Systems Reciprocal Act (without the use of any creditable service received under this Section) by the effective date of the retirement annuity.

The creditable service established under this Section may be used for all
purposes under this Article and the Retirement Systems Reciprocal Act,
except for the computation of final average salary, the determination of
salary or compensation under this or any other Article of the Code, or the
determination of eligibility for and the computation of benefits under
Section 16-133.2 of this Article.

The age enhancement established under this Section may be used for all
purposes under this Article (including calculation of a proportionate
annuity payable by this System under the Retirement Systems Reciprocal
Act), except for purposes of a reversionary annuity under Section 16-136,
the retirement annuity under Section 16-133(a)(A), the required
distributions under Section 16-142.3, and the determination of eligibility
for and the computation of benefits under Section 16-133.2 of this Article.
However, age enhancement established under this Section shall not be used
in determining benefits payable under other Articles of this Code under the
Retirement Systems Reciprocal Act.

(c) For all creditable service established under this Section, the
employer must pay to the System an employer contribution consisting of
20% of the member’s highest annual salary rate used in the determination of
the average salary for retirement annuity purposes for each year of creditable
service granted under this Section.

For all creditable service established under this Section, the
employee must pay to the System an employee contribution consisting of
4% of the member’s highest annual salary rate used in the determination of
the retirement annuity for each year of creditable service granted under
this Section.
The employee may elect either to pay the employee contribution in full
before the retirement annuity commences, or to have it deducted from
the retirement annuity in 24 monthly installments.

(e) If the number of employees of an employer that actually apply for
early retirement under this Section exceeds 30% of those eligible, the
employer may require that, for the number of applicants in excess of that
30%, the starting date of the retirement annuity enhanced under this
Section may not be earlier than June 1, 1995. The right to have the
retirement annuity begin before that date shall be allocated among the
applicants on the basis of seniority in the service of that employer.

(f) A member who receives any early retirement incentive under Section
16-133.4 may not receive any early retirement incentive under
this Section.

(Source: P.A. 87-1265.)

(40 ILCS 5/16-134) (from Ch. 108 1/2, par. 16-134)

Sec. 16-134.
Additional retirement annuity.

(a) An annuitant receiving a retirement annuity on June 30, 1947 who has
at least 25 years of creditable service shall upon attaining age 60 or thereafter
have his or her annual retirement annuity increased to $700 for an annuitant
who is age 60 and by an additional $30 for each year of age attained above
age 60, but not exceeding a total annual retirement annuity of $1,000.

(b) In order to be entitled to such increase in retirement annuity,
the annuitant is required to make an additional contribution of $300 together
with interest at the rate of 3% per annum from June 30, 1947 on any part
of such $300 not paid on such date.

(c) The additional retirement annuity provided under this Section shall
begin to accrue on the first of the month following receipt of the required
contributions from the annuitant.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-135) (from Ch. 108 1/2, par. 16-135)

Sec. 16-135.
Supplementary retirement annuity.

(a) An annuitant who is receiving a retirement annuity on
June 30, 1961 of less than $50 for each year of creditable service forming
the basis of the retirement annuity shall have his or her retirement annuity
increased to $50 per year for each year of such creditable service, but
not exceeding a total annual retirement annuity of $2,250.

(b) In order to be entitled to the increase in retirement annuity provided
under this Section, an annuitant is required to make an additional contribution
of $5 for each year of creditable service, not to exceed 45 years together
with interest at the rate of 3% per annum from August 25, 1961.

(c) The supplementary retirement annuity provided under this Section shall
begin to accrue on the first of the month following receipt of the required
contribution from the annuitant.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/16-136) (from Ch. 108 1/2, par. 16-136)

Sec. 16-136.
Reversionary annuity.
A member entitled to a retirement
annuity may elect at the time of retirement to receive a
reduced retirement annuity and
provide with the actuarial value of the reduction, determined on an
actuarial equivalent basis, a reversionary
annuity for any person who is dependent upon the member
at the time of
retirement, as named in a written direction filed with the system as a
part of the application for the retirement annuity, provided that the
reversionary annuity is not less than $10 per month, nor more
than the reduced retirement annuity
to which the member is
entitled. The condition of dependency must be established and proved to
the satisfaction of the system before the election becomes effective.

The reversionary annuity shall begin as of the first day of the month
following the month in which the death of the annuitant occurs, provided,
that the designated
beneficiary is then living. If the designated beneficiary predeceases
the annuitant, the reversionary annuity shall not be payable,
and beginning the first of the month following notification of the
designated beneficiary’s death, the System shall pay the annuitant the
retirement annuity he or she would have received but for the reversionary
annuity election.

(Source: P.A. 84-1028.)

(40 ILCS 5/16-136.1) (from Ch. 108 1/2, par. 16-136.1)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-136.1. Annual increase for certain annuitants.

(a) Any annuitant receiving a retirement annuity on June 30, 1969 and
any member retiring after June 30, 1969 shall be eligible for the annual
increases provided under this Section provided the annuitant is ineligible
for the automatic annual increase in annuity provided under Section
16-133.1, and provided further that (1) retirement occurred at age 55 or over
and was based on 5 or more years of creditable service or (2) if
retirement occurred prior to age 55, the retirement annuity
was based on 20 or more years of creditable service.

(b) This subsection (b) is subject to subsections (b-1) and (b-2). An annuitant entitled to increases under this Section shall be entitled
to the initial increase as of the later of: (1) January 1 following
attainment of age 65, (2) January 1 following the first anniversary
of retirement, or (3) the first day of the month following receipt of
the required qualifying contribution from the annuitant. The initial monthly
increase shall be computed on the basis of the period elapsed between
the later of the date of last retirement or attainment of age 50 and the
date of qualification for the initial increase, at the rate of 1 1/2% of
the original monthly retirement annuity per year for periods
prior to September 1, 1971, and at the rate of 2% per year for periods between
September 1, 1971 and September 1, 1978, and at the rate of 3% per year
for periods thereafter.

An annuitant who has received an initial increase under this Section,
shall be entitled, on each January 1 following the granting of the
initial increase, to an increase of 3% of the original monthly retirement
annuity for increases granted prior to January 1, 1990, and equal to 3%
of the total annuity, including previous increases under this Section, for
increases granted on or after January 1, 1990. The original monthly
retirement annuity for computations under this subsection
(b) shall be considered to be $83.34 for any annuitant entitled to benefits
under Section 16-134. The minimum original disability retirement annuity
for computations under this subsection (b) shall be considered to be
$33.34 per month for any annuitant retired on account of disability.

(b-1) Notwithstanding subsection (b), but subject to the provisions of subsection (b-2), all automatic increases payable under subsection (b) on or after the effective date of this amendatory Act of the 98th General Assembly shall be calculated as 3% of the lesser of (1) the total annuity
payable at the time of the increase, including previous
increases granted, or (2) $1,000 multiplied by the number of years of creditable service upon which the annuity is based; however, in the case of an initial increase under subsection (b) that is subject to this subsection, if more than one year has elapsed from the date of retirement to the effective date of the initial
increase under this Section, the applicable percentage shall be the sum of the percentages for each such elapsed year.

Beginning January 1, 2016, the $1,000 referred to in item (2) of this subsection (b-1) shall be increased on each January 1 by the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the preceding September; these adjustments shall be cumulative and compounded.
For the purposes of this subsection (b-1), “consumer price index-u” means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. The new dollar amount resulting from each annual adjustment shall be determined by the Public Pension Division of the Department of Insurance and made available to the System by November 1 of each year.

This subsection (b-1) is applicable without regard to whether the person is in service on or after the effective date of this amendatory Act of the 98th General Assembly.

(b-2) Notwithstanding subsections (b) and (b-1), for an active or inactive Tier 1 member who is subject to this Section and has not begun to receive a retirement annuity under this Article before July 1, 2014:

(1) the second automatic annual increase payable under subsection (b) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 50 on the effective date of this amendatory Act;
(2) the second, fourth, and sixth automatic annual increases payable under subsection (b) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 47 but less than age 50 on the effective date of this amendatory Act;
(3) the second, fourth, sixth, and eighth automatic annual increases payable under subsection (b) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is at least age 44 but less than age 47 on the effective date of this amendatory Act; and
(4) the second, fourth, sixth, eighth, and tenth automatic annual increases payable under subsection (b) shall be at the rate of 0% of the total annuity payable at the time of the increase if he or she is less than age 44 on the effective date of this amendatory Act.

For the purposes of Section 1-103.1, this subsection (b-2) is applicable without regard to whether the person is in service on or after the effective date of this amendatory Act of the 98th General Assembly.

(c) An annuitant who otherwise qualifies for annual
increases under this Section must make a one-time payment of
1% of the monthly final average salary for each full year of the creditable
service forming the basis of the retirement annuity or, if the
retirement annuity was not computed using final average salary, 1% of the
original monthly retirement annuity for each full year of service
forming the basis of the retirement annuity.

(d) In addition to other increases which may be provided by this Section,
regardless of creditable service, annuitants not meeting
the service requirements of Section 16-133.1 and whose retirement annuity
began on or before January 1, 1971 shall receive, on January
1, 1981, an increase in the retirement annuity then being paid
of one dollar per month for each year of creditable service forming
the basis of the retirement allowance. On January 1, 1982, annuitants
whose retirement annuity began on or before January 1, 1977, shall receive
an increase in the retirement annuity then being paid of one dollar per
month for each year of creditable service.

(Source: P.A. 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-136.1.
Annual increase for certain annuitants.

(b) An annuitant entitled to increases under this Section shall be entitled
to the initial increase as of the later of: (1) January 1 following
attainment of age 65, (2) January 1 following the first anniversary
of retirement, or (3) the first day of the month following receipt of
the required qualifying contribution from the annuitant. The initial monthly
increase shall be computed on the basis of the period elapsed between
the later of the date of last retirement or attainment of age 50 and the
date of qualification for the initial increase, at the rate of 1 1/2% of
the original monthly retirement annuity per year for periods
prior to September 1, 1971, and at the rate of 2% per year for periods between
September 1, 1971 and September 1, 1978, and at the rate of 3% per year
for periods thereafter.

(Source: P.A. 86-273.)

(40 ILCS 5/16-136.2) (from Ch. 108 1/2, par. 16-136.2)

Sec. 16-136.2.
Minimum retirement annuity.

(a) Any annuitant receiving a retirement annuity under this Article is
entitled to such additional amount of retirement annuity under this
Section, if necessary, that is sufficient to provide a minimum retirement
annuity of $10 per month for each year of creditable service forming the
basis of the retirement annuity, up to $300 per month for 30 or more years
of creditable service. Effective January 1, 1984, the minimum retirement
annuity under this Section is $15 per month per year of service up to $450
per month. Beginning January 1, 1996, the minimum retirement annuity
payable under this Section shall be $25 per month for each year of
creditable service, up to a maximum of $750 per month for 30 or more years
of creditable service.

An annuitant entitled to an increase in retirement annuity under this
Section shall be entitled to such increase in retirement annuity effective
the later of (1) September 1 following attainment of age 60; (2) September
1 following the first anniversary in retirement; or (3) the first of the
month following receipt of the required qualifying contribution from the
annuitant.

(b) An annuitant who qualifies for an additional amount of retirement
annuity under subsection (a) of this Section must make a one-time payment
of 1% of the monthly average salary for each full year of the creditable
service forming the basis of the retirement annuity or, if the retirement
annuity was not computed using average salary, 1% of the original monthly
retirement annuity for each full year of service forming the basis of the
retirement annuity.

(c) The minimum retirement annuity provided under this Section shall
continue to be paid only to the extent that funds are available in the
minimum retirement annuity reserve established under Section 16-186.3.

(d) The annual increase provided on and after September 1, 1977 under
Section 16-136.1 and on and after January 1, 1978 under Section 16-133.1
shall be paid in addition to the minimum retirement annuity. Where an
initial increase is first payable on or after September 1, 1977, only that
portion of the increase based on the period in retirement after August 31,
1976, under Section 16-136.1 and after December 31, 1976, under Section
16-133.1 may be added to the minimum retirement annuity.

(Source: P.A. 89-21, eff. 6-6-95; 89-25, eff. 6-21-95.)

(40 ILCS 5/16-136.3) (from Ch. 108 1/2, par. 16-136.3)

Sec. 16-136.3.
Alternate minimum retirement annuity.
(a) Any
member retiring with at least 10 years of creditable service on or before
December 31, 1983 is entitled to such additional amount of retirement
annuity under this Section, if necessary, that is sufficient to provide
a minimum retirement annuity of $200 per month. Any increase in retirement
annuity provided under this Section shall not begin to
accrue until the latest of: (1) September
1 following attainment of age 60; (2) September 1 following the first
anniversary of retirement; or (3) the first day of the month following
receipt of the required qualifying contribution from the annuitant as
specified in Section 16-136.2.

(b) The minimum retirement annuity provided under this
Section shall continue to be paid only to
the extent that funds are available in the minimum retirement annuity
reserve established under Section 16-186.3.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-136.4) (from Ch. 108 1/2, par. 16-136.4)

Sec. 16-136.4.
Single-sum retirement benefit.

(a) A member who has less than 5 years of creditable service shall be
entitled, upon written application to the board, to receive a retirement
benefit payable in a single sum upon or after the member’s attainment of
age 65. However, the benefit shall not be paid while the member is
employed as a teacher in the schools included under this Article or Article
17, unless the System is required by federal law to make payment due to the
member’s age.

(b) The retirement benefit shall consist of a single sum that is the
actuarial equivalent of a life annuity consisting of 1.67% of the member’s
final average salary for each year of creditable service. In determining
the amount of the benefit, a fractional year shall be granted proportional
credit.

For the purposes of this Section, final average salary shall be the
average salary of the member’s highest 4 consecutive years of service
as determined under rules of the board. For a member with less than 4
consecutive years of service, final average salary shall be the average
salary during the member’s entire period of service. In the determination
of final average salary for members other than elected officials and their
appointees when such appointees are allowed by statute, that part of a
member’s salary which exceeds the member’s annual full-time salary rate
with the same employer for the preceding year by more than 20% shall be
excluded.
The exclusion shall not apply in any year in which the member’s creditable
earnings are less than 50% of the preceding year’s mean salary for downstate
teachers as determined by the survey of school district salaries provided in
Section 2-3.103 of the School Code.

(c) The retirement benefit determined under this Section shall be
available to all members who render teaching service after July 1, 1947 for
which member contributions are required.

(d) Upon acceptance of the retirement benefit, all of the member’s
accrued rights and credits in the System are forfeited. Receipt of a
single-sum retirement benefit under this Section does not make a person an
“annuitant” for the purposes of this Article, nor a “benefit recipient” for
the purposes of Sections 16-153.1 through 16-153.4.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/16-138) (from Ch. 108 1/2, par. 16-138)

Sec. 16-138.
Refund of contributions upon death of member or annuitant.
Upon the death of a member or annuitant, the following amount shall be
payable (i) to a beneficiary nominated by written designation of the member
or annuitant filed with the system, or (ii) if no beneficiary is nominated,
to the surviving spouse, or (iii) if no beneficiary is nominated and there is
no surviving spouse, to the decedent’s estate, upon receipt of proper proof
of death:

(1) Upon the death of a member, an amount consisting of the sum of the
following: (A) the member’s accumulated contributions; (B) the sum of the
contributions made by the member toward the cost of the automatic increase
in annuity under Section 16-152, without interest thereon; and (C)
contributions made by the member toward prior service, without interest
thereon.

(2) Upon the death of an annuitant, unless a reversionary annuity is
payable under Section 16-136, an amount determined by subtracting the total
amount of monthly annuity payments received as a result of the deceased
annuitant’s retirement from the sum of: (A) the accumulated contributions
at retirement; (B) the sum of the contributions made by the deceased toward
the cost of the automatic increase in annuity under Section 16-152, without
interest thereon; and (C) any contributions made by the
deceased for prior service or other purposes, exclusive of contributions
toward the cost of the automatic increase in annuity, without interest
thereon.

(Source: P.A. 91-887, eff. 7-6-00; 92-16, eff. 6-28-01.)

(40 ILCS 5/16-140) (from Ch. 108 1/2, par. 16-140)

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), and (iii) 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 (age 22 if a full-time student). An unmarried natural or adopted child, regardless of age, who is dependent by reason of a physical or mental disability 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.
The changes made to this Section by Public Act 90-448, relating to benefits for certain unmarried children who are full-time students under age 22, apply without regard to whether the deceased member was in service on or after the effective date of that Act. These changes do not authorize the repayment of a refund or a re-election of benefits, and any benefit or increase in benefits resulting from these changes is not payable retroactively for any period before the effective date of that Act.
(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 Public Act 90-511 applies without
regard to whether the deceased member or annuitant was in service on or after
the effective date of that Act.

The change to this Section made by this amendatory Act of the 91st General
Assembly 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. 95-870, eff. 8-21-08.)

(40 ILCS 5/16-141) (from Ch. 108 1/2, par. 16-141)

Sec. 16-141.
Survivors’ benefits – death in service.

(a) Upon the death of a member in service occurring on or after
July 1, 1990, a beneficiary designated by the member shall be
entitled to receive, in a single sum, for each completed year of service
up to a maximum of 6 years, an amount equal to 1/6 of the member’s
highest annual salary rate within the last 4 years of service. If death occurs
prior to completion of the first year of service, the beneficiary shall be
entitled to receive, in a single sum, an amount equal to 1/6 of the most
recent annual salary rate. If no beneficiary is designated by the member or if
no designated beneficiary survives the member, the single sum benefit under
this paragraph shall be paid to the eligible dependent beneficiary or to the
trust established for such eligible dependent beneficiary, as determined under
paragraph (3) of Section 16-140, or, if there is no dependent beneficiary, to
the decedent’s estate upon receipt of proper proof of death.

(b) If the deceased member had at least 1.5 years of creditable service,
had rendered at least 60 days of creditable service within the 18 months
immediately preceding death and had not designated a non-dependent
beneficiary who survives, a dependent beneficiary may elect to receive,
instead of the benefit under subsection (a) of this Section, a single sum
payment of $1,000, divided by the number of such beneficiaries, together
with a survivor’s benefit as specified under the following paragraphs:

(1) A surviving spouse, if no eligible children exist, shall receive a survivor’s benefit of 30% of average salary, beginning at age 50 or upon the date of the member’s death, whichever is later, except that if the member’s death occurred before July 1, 1973 and the surviving spouse is less than age 55 on the effective date of this amendatory Act of 1997, the survivor’s benefit shall begin on the effective date of this amendatory Act of 1997 or upon the surviving spouse’s attainment of age 50, whichever occurs later.
(2) A surviving spouse, regardless of age, who is providing for the support of the deceased member’s eligible child, shall receive a survivor’s benefit of 30% of average salary, plus the sum of (A) 20% of average salary on account of each dependent child, and (B) 10% of average salary divided by the number of children entitled to this benefit.
(3) Each eligible child, if there is no eligible surviving spouse, shall receive upon the death of the member a survivor’s benefit equal to the sum of: (A) 20% of average salary, and (B) 10% of average salary divided by the number of children entitled to this benefit.
(4) A dependent parent shall receive upon attainment of age 55 or the date of the member’s death, whichever is later, a survivor’s benefit of 30% of average salary, unless dependency is terminated by remarriage or otherwise.

(c) No election under this Section may be made by a dependent
beneficiary if a non-dependent beneficiary designated by the member
survives such member.

(d) Notwithstanding the other provisions of this Section, if the member is
in receipt of a benefit at the time of his or her death, a dependent
beneficiary shall receive a survivor benefit beginning the first of the
month following the death of the member.

(e) In cases where the changes to this Section or Section 16-142 made
by Public Act 87-1265 increase the amount
of a single-sum death benefit that has already been paid by the System, the
System shall pay to the beneficiary the amount of the increase provided by this
amendatory Act.

(Source: P.A. 90-32, eff. 6-27-97.)

(40 ILCS 5/16-142) (from Ch. 108 1/2, par. 16-142)

Sec. 16-142.
Survivors’ benefits – death out of service.
The following
benefit shall be payable to the survivors of an annuitant or to the survivors
of a member whose death occurs after termination of service for any cause
if on the date of termination of service, the member had at least 20 years
of creditable service and if the annuitant or member had made contributions
for the purposes of this Section for at least one year of creditable service
after July 24, 1959:

(1) Where the member’s death occurs on or after July 1, 1990, a beneficiary
designated by the member shall be entitled to receive, in a single sum, an
amount equal to the member’s highest annual rate of salary within the last 4
years of service, reduced by 1/6 of that annual salary for each year or
fraction thereof that has elapsed between the date of retirement or
termination of service and the date of death, but subject to a
minimum payment equal to 1/6 of that annual salary, the actual
contributions made by the member for survivor benefits, not including
interest thereon, or $3,000, whichever is the greatest. If no beneficiary
is designated by the member or if no designated beneficiary survives the
member, the lump sum benefit under this paragraph shall be paid to the
eligible dependent beneficiary or to the trust established for such
eligible dependent beneficiary, as determined under Section 16-140 (3), or,
if there is no dependent beneficiary, to the decedent’s estate upon receipt
of proper proof of death.

(2) In lieu of the benefit under paragraph (1) of this Section, a dependent
beneficiary may receive the benefits provided under subsection (b) of Section
16-141. This paragraph (2) is inapplicable where a non-dependent beneficiary
designated by a member survives the member.

(3) Notwithstanding the creditable service limitations contained
elsewhere in this Section and under paragraph (3) of Section 16-143, a
surviving dependent beneficiary of an annuitant whose death occurs after
December 31, 1981, may receive only the benefits provided in subsection (b)
of Section 16-141, subject to a maximum benefit of $200 per month.

(Source: P.A. 87-1265.)

(40 ILCS 5/16-142.1) (from Ch. 108 1/2, par. 16-142.1)

Sec. 16-142.1.
Survivors’ benefits – minimum amounts.
(a) The minimum
survivor’s benefit for any one beneficiary shall be the lesser of (1) $30
per month, or (2) 80% of the retirement annuity for which the member would
have been eligible at age 60.

(b) When the death of a member or annuitant occurs after June 30, 1975,
the following minimum survivor’s benefit shall be payable:

(1) The minimum total survivor’s benefit payable on account of the death
of a member shall be 50% of the retirement annuity earned by the member under
paragraph (B) of Section 16-133 as of the date of death of the member and
which would have been payable upon the later of attainment of age 60 or
date of death when death occurs prior to retirement.

(2) The minimum total survivor’s benefit payable on account of the death
of an annuitant shall be 50% of the retirement annuity or disability retirement
annuity paid to the annuitant at the time of death.

(c) The minimum survivor’s benefit for the surviving spouse of a member
who died on or before December 31, 1983 after 10 or more years of creditable
service shall be $200 per month.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-142.2) (from Ch. 108 1/2, par. 16-142.2)

Sec. 16-142.2.
Survivors’ benefits – maximum amounts.
(a) When the death
of a member or annuitant occurs after August 21, 1981, the following maximum
limitations shall apply in the determination of the survivor’s benefits
payable under Section 16-141 and Section 16-142:

(1) The maximum combined survivor’s benefits for a surviving spouse and
eligible children or for more than one eligible child where no benefits
are payable to a surviving spouse shall be the lesser of: (A) $600 per
month, or (B) 80% of average salary.

(2) The maximum survivor’s benefit for a surviving spouse of a deceased
annuitant or of a deceased member who terminated service for a cause other
than retirement with at least 20 years of creditable service shall be the
lesser of: (A) 80% of the retirement annuity earned by the member and payable
upon the later of attainment of age 60 or the date of retirement, or (B)
$400 per month. The maximum survivor’s benefit for a surviving spouse of
a member who dies in service shall be $400 per month.

(3) The maximum survivor’s benefit payable for one eligible child shall
be $400 per month.

(4) The maximum combined survivor’s benefit for a parent or parents shall
be the lesser of (A) $400 per month, or (B) 50% of average salary.

(b) If the minimum survivor’s benefit provided under Section 16-142.1
exceeds the maximum survivor’s benefit specified under this Section, such
minimum survivor’s benefit shall be payable.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-142.3) (from Ch. 108 1/2, par. 16-142.3)

Sec. 16-142.3. Required distributions.

(a) A person who would be
eligible to receive a monthly survivor benefit under this Article but for
the fact that the person has not yet attained age 50, and who has not elected
to receive a lump sum distribution under subsection (a) of Section 16-141,
shall be eligible for a monthly distribution under this subsection (a),
provided that the payment of such distribution is required by federal law.

The distribution shall become payable on (i) July 1, 1987, (ii) December
1 of the calendar year immediately following the calendar year in which the
member or annuitant died, or (iii) December 1 of the calendar year in which
the deceased member or annuitant would have attained age 72, whichever
occurs latest, and shall remain payable until the first of the following to
occur: (1) the person becomes eligible to receive a monthly survivor
benefit under this Article; (2) the day following the date on which the
member ceases to be eligible to receive a monthly survivor benefit upon
attainment of age 50, due to remarriage or death; or (3) the day on which
such distribution ceases to be required by federal law.

The amount of the distribution shall be fixed at the time the
distribution first becomes payable, and shall be calculated in the same
manner as the monthly survivor benefit under Sections 16-141, 16-142,
16-142.1 and 16-142.2, but excluding any
automatic annual increases, supplemental increases, or one-time increases
that may be provided by law for monthly survivor benefits.

(b) For the purpose of this Section, a distribution shall be deemed to
be required by federal law if: (1) directly mandated by federal statute,
rule, or administrative or court decision; or (2) indirectly mandated
through imposition of substantial tax or other penalties for noncompliance.

(c) Notwithstanding Section 1-103.1 of this Code, a member need not be
in service on or after the effective date of this amendatory Act of 1989
for the member’s surviving spouse to be eligible for a distribution under this Section.

(Source: P.A. 102-210, eff. 7-30-21.)

(40 ILCS 5/16-143) (from Ch. 108 1/2, par. 16-143)

Sec. 16-143.
Survivors’ benefits – other conditions and limitations.
The benefits provided under Sections 16-141 and 16-142, shall be
subject to the following further conditions and limitations:

(1) The period during which a member was in receipt of a disability or
occupational disability benefit shall be considered as creditable service
at the annual salary rate on which the member last made contributions.

(2) All service prior to July 24, 1959, for which creditable service is
granted towards a retirement annuity shall be considered as creditable service.

(3) No benefits shall be payable unless a member, or a disabled member,
returning to service, has made contributions to the system for at least one
month after July 24, 1959, except that an annuitant must have contributed to
the system for at least 1 year of creditable service after July 24, 1959.

(4) Creditable service under the State Employees’ Retirement System
of Illinois, the State Universities Retirement System and the Public
School Teachers’ Pension and Retirement Fund of Chicago shall be
considered in determining whether the member has met the creditable
service requirement.

(5) If an eligible beneficiary qualifies for a survivors’ benefit
because of pension credits established by the participant or
annuitant in another system covered by Article 20, and the combined
survivors’ benefits exceed the highest survivors’ benefit payable by
either system based upon the combined pension credits,
the survivors’ benefit payable by this system shall be reduced to that
amount which when added to the survivors’ benefit payable by the other
system would equal this highest survivors’ benefit. If the other system
has a similar provision for adjustment of the survivors’ benefit,
the respective proportional survivors’ benefits shall be reduced
proportionately according to the ratio which the amount of each
proportional survivors’ benefit bears to the aggregate of all
proportional survivors’ benefits. If a survivors’ benefit is payable by
another system covered by Article 20, and the survivor elects to waive
the monthly survivors’ benefit and accept a lump sum payment or death benefit
in lieu of the monthly survivors’ benefit, this system shall, for the purpose
of adjusting the monthly survivors’ benefit under this paragraph, assume that
the survivor had been entitled to a monthly survivors’ benefit which, in
accordance with actuarial tables of this system, is the actuarial equivalent
of the amount of the lump sum payment or death benefit.

(6) Remarriage of a surviving spouse prior to attainment of age 55
that occurs before the effective date of this amendatory Act of the 91st
General Assembly shall terminate his or her survivors’ benefits.

The change made to this item (6) by this amendatory Act of the 91st
General Assembly applies without regard to whether the deceased member or
annuitant was in service on or after the effective date of this amendatory
Act of the 91st General Assembly.

(7) The benefits payable to an eligible child shall terminate when the
eligible child marries, dies, or attains age 18 (age 22 if a full-time
student); except that benefits payable to a dependent disabled eligible child
shall terminate only when the eligible child dies or ceases to be disabled.

(Source: P.A. 90-448, eff. 8-16-97; 91-887, eff. 7-6-00.)

(40 ILCS 5/16-143.1) (from Ch. 108 1/2, par. 16-143.1)

Sec. 16-143.1.
Increase in survivor benefits.

(a) Beginning January
1, 1990, each survivor’s benefit and each reversionary annuity payable
under Section 16-136 shall be increased by 3% of the currently
payable amount thereof
(1) on each January 1 occurring on or after the commencement of the annuity if
the deceased teacher died while receiving a retirement or disability
retirement annuity, or (2) in other cases,
on each January 1 occurring on or after the first
anniversary of the granting of the benefit, without regard to whether the
deceased teacher was in service on or after the effective date of this
amendatory Act of 1991, but such increases shall not accrue for any
period prior to January 1, 1990.

(b) On January 1, 1981, any
beneficiary who was receiving a survivor’s monthly benefit on or before
January 1, 1971, shall have the benefit then being paid increased by 1% for
each full year elapsed from the date the survivor’s benefit began. On
January 1, 1982, any beneficiary who began receiving a survivor’s monthly
benefit after January 1, 1971, but before January 1, 1981 shall have the
benefit then being paid increased by 1% for each year elapsed from the date
the survivor’s benefit began.

On January 1, 1987, any beneficiary whose monthly survivor’s benefit
began on or before January 1, 1977, shall have the monthly survivor’s
benefit increased by $1 for each full year which has elapsed since the date
the survivor’s benefit began.

(Source: P.A. 86-273; 86-1488.)

(40 ILCS 5/16-143.2) (from Ch. 108 1/2, par. 16-143.2)

Sec. 16-143.2. Refund of contributions for survivor benefits at retirement.

(a) If at the time of applying for a retirement annuity under Section
16-132, or while in receipt of such a retirement annuity, a member
does not have a dependent beneficiary as defined in paragraph (3) of
Section 16-140, such member may be granted, upon written request, a refund
of actual contributions for survivor benefits, without interest. Members
will be eligible for a refund of contributions for survivor benefits as
provided in the previous sentence notwithstanding the fact that they began
receiving retirement benefits prior to this amendatory Act of 1985.
Acceptance of the refund will forfeit all rights to survivor benefits under
Sections 16-140 through 16-143.

(b) Except as provided under subsection (c), an annuitant who reestablishes membership following acceptance of
refund of contributions for survivor benefits under subsection (a) of this
Section may reinstate eligibility for benefits provided under Sections 16-140
through 16-143 only through: (1) repayment of such refund together with
regular interest thereon from the date of the refund to the date of repayment,
and (2) completion of one year of creditable service following acceptance
of such refund. If membership is reestablished and the above conditions
(1) and (2) are not met, an additional refund, representing contributions
made following the previous refund will be provided upon the member’s death
or retirement, whichever is applicable.

(c) Notwithstanding subsection (b), an annuitant who has received a refund under subsection (a) may, during a period of one year beginning 5 months after the effective date of this amendatory Act of the 99th General Assembly, make an election to reestablish rights to survivor benefits under Sections 16-140 through 16-143 by paying to the System:

(1) the total amount of the refund received for actual contributions; and
(2) interest on the amount of the refund at the actuarially assumed rate of return for the period starting on the date of receipt of the refund and ending when the annuitant has made an election under this subsection (c).

The System may allow an individual to repay this refund through: a tax-deferred lump sum payment in full; substantially equal monthly installments over a period of at least one but not more than 24 months by reducing the annuitant’s monthly benefit over the established number of months by the amount of the otherwise applicable contribution; or a combination thereof. To the extent permitted under the Internal Revenue Code of 1986, as amended, for federal and State tax purposes, the monthly amount by which the annuitant’s benefit is reduced shall not be treated as a contribution by the annuitant, but rather as a reduction of the annuitant’s monthly benefit.

If a member makes an election under this subsection (c) and the contributions required in items (1) and (2) of this subsection (c) are not paid in full, an additional one-time lump sum refund representing contributions made following the previous refund shall be provided to the named beneficiary or beneficiaries on file with the System or, if none, to the member’s estate, when the member dies.

(Source: P.A. 99-682, eff. 7-29-16.)

(40 ILCS 5/16-149) (from Ch. 108 1/2, par. 16-149)

Sec. 16-149. Disability benefit.

(a) A disability benefit is payable to a member who was in active
service on or after June 30, 1977 and has at least 3 years of creditable
service. Part-time and substitute teachers who are in active service on or
after July 1, 1990 must have worked as a teacher for at least 340 hours in
either the school year in which the disability occurs or in the preceding
school year.

The benefit is payable upon application of a member who is not
receiving a benefit under either Section 16-133, Section 16-149.1
or Section 16-149.2. The benefit shall be granted only if the member is
found by medical examination to be incapacitated to perform the duties of
his or her position as a teacher and only if the commencement of the
incapacity occurred while the member was employed as a teacher or within
90 days of such employment.

A member shall be considered disabled only when the System has received
(1) a written certificate by at least 2 licensed and practicing physicians
designated by the System, certifying that the member is disabled and unable
to properly perform the duties of his or her position at the time of
disability, except in the case of disability due to pregnancy where a
written certificate from only one licensed and practicing physician is
required; (2) a written statement from the employer certifying that the member
is not eligible to receive a salary; and (3) a certification from the member
that he or she is not and has not been engaged in gainful employment
during the period of disability.

The benefit shall begin to accrue on the 31st day of absence from service
on account of disability, except that when an application is made more than
90 days subsequent to the later of the commencement of disability or the
date eligibility for salary ceases, it shall begin to accrue from the date
of application, and shall be payable during the time the member does not
receive a retirement annuity. The benefit is not payable to a member who
is receiving or has a right to receive any salary as a teacher, or is employed
in any capacity as a teacher by the employers included under this System or in
an equivalent capacity in any other public or private school, college or
university, except as provided in Section 16-149.6.

Service credits under the State Employees’ Retirement System of
Illinois, the State Universities Retirement System and the Illinois
Municipal Retirement Fund shall be considered in determining the member’s
eligibility for a disability benefit and the total period during which the
disability benefit is payable.

(b) The disability benefit shall be 40% of the greater of the
member’s most recent annual contract salary rate at the time the disability
benefit becomes payable or the member’s annual contract rate on the date the
disability commenced. Prior to July 1, 1990, if the most recent period of
service of any member was rendered on a less than full-time but not less
than half-time basis, the amount of the disability benefit payable to such
member shall be computed on the basis of the salary received by such member
for the member’s last year of service on a full-time basis if such salary
was greater than the member’s most recent salary. For part-time and
substitute members after June 30, 1990, the disability benefit shall be 40% of
the greater of the member’s most recent annualized salary rate at the time the
disability benefit becomes payable or the annualized salary rate or contract
salary rate at the time the disability commenced.

In addition to the above benefit, the member shall receive creditable
service and credit for contributions that the member would have made in
active employment during any period of disability for which benefits
are paid by the System on the basis of the annual salary rate used in
computing the benefit, except as provided in Section 16-149.6.

(c) Effective January 1, 1988, the disability benefit shall continue
until the time one of the following events first occurs: (1) disability
ceases; (2) the member requests termination of the benefit; (3) the
aggregate period for which disability payments made during the member’s
entire period of service equals 1/4 of the total period of creditable
service, not including the time he or she has received the disability
payments; or (4) the member is engaged or found to be able to engage in
gainful employment, other than limited employment under Section 16-149.6.
If the disability benefit is discontinued under item (4) but the member is
subsequently found to be unable to be gainfully employed due to the disability
which was the cause for his or her most recent incapacity to perform the duties
of a teacher, the disability benefit will be resumed, upon notification of the
System, as soon as the member is not eligible to receive salary.

A disabled member who receives disability benefits for the maximum period
specified above or who requests that the disability benefits be terminated
may be retired on a disability retirement annuity.

(d) The board shall prescribe rules governing the filing, investigation,
control, and supervision of disability claims. The rules shall include
specific standards to be used when requesting additional medical
examinations, hospital records or other data necessary for determining the
employment capacity and condition of the member. Costs incurred by a
claimant in connection with completing a claim for disability benefits
shall be paid by the claimant.

(Source: P.A. 94-539, eff. 8-10-05.)

(40 ILCS 5/16-149.1) (from Ch. 108 1/2, par. 16-149.1)

Sec. 16-149.1. Occupational disability benefit.

(a) A member who becomes totally and immediately incapacitated for duty
as the proximate result of bodily injuries sustained or a hazard undergone
while in the performance and within the scope of his or her duties, if such
injuries or hazard were not the consequence of the member’s willful
negligence, shall receive an occupational disability benefit upon making
proper application. If application is made more than 90 days subsequent to
the later of the commencement of disability or the date eligibility
for salary ceases, benefits shall begin to accrue from the date of
application, but service credit and credit for contributions will be earned
from the date of disability. The benefit is not payable to, and credit for
service and contributions may not be earned under this Section by, a member
who is receiving a benefit under Section 16-133, 16-149, or 16-149.2, or
who is receiving salary as a teacher, or is employed in any capacity as a
teacher by the employers included under this System or in an equivalent
capacity in any other public or private school, college or university,
except as provided in Section 16-149.6.

Proper proof of disability shall consist of: (1) a written certificate by
at least 2 licensed and practicing physicians designated by the System,
certifying that member is disabled and unable to perform assigned duties;
(2) a written statement from the employer certifying that the member is
disabled and not receiving a salary, and related information as to the cause
and commencement of disability; and (3) a written statement from the member
certifying that the member is not and has not been engaged in gainful
employment.

Occupational disability benefits under this Section shall be payable
only if (1) on the basis of a claim filed by the applicant with the
Illinois Workers’ Compensation

Commission, it is determined by the Commission
that the disability was incurred while in the performance and within the
scope of assigned duties, under the terms of the Illinois Workers’
Compensation or Occupational Diseases Act, whichever applies, and the
claim is adjudicated as compensable by the Commission under either of
the aforesaid Acts; or (2) on the basis of a claim filed by the
applicant with an insurance carrier with which the employer of the
applicant has a workers’ compensation insurance policy, it is
determined under the terms of the aforesaid policy that the disability
was incurred while in the performance and within the scope of the member’s
assigned duties and the claim is approved as compensable.

(b) The occupational disability benefit shall be the greater of 60%
of the member’s contract salary rate at the time the disability benefit
becomes payable or the member’s annual contract rate on the date the
disability commenced, and shall be payable monthly in equal installments.
For part-time and substitute teachers after June 30, 1990, the benefit
shall be the greater of the member’s most recent annualized salary rate at the
time the disability benefit becomes payable or the annualized salary rate or
annual contract rate at the time the disability commenced.

Any amounts provided for a member or a member’s dependents under the
Illinois Workers’ Compensation Act, the Illinois Occupational Diseases Act
or a workers’ compensation insurance policy provided by the employer shall
be applied as an offset to any occupational benefit provided under this
Section in such manner as may be prescribed by the board.

In addition to the above benefit, the member shall receive creditable
service and credit for contributions that the member would have made in
active employment during the period of disability,
except as provided in Section 16-149.6. Creditable service and
credit for contributions shall be calculated on the basis of the annual
salary rate used in computing the benefit; however, such credit shall not
be used in the determination of the period for which disability benefits
are payable. A member who remains disabled after the termination of benefits
due to age or the expiration of the maximum period for which benefits are
payable shall be entitled to the retirement annuity provided under Section
16-133, notwithstanding that the member may not have the required minimum
period of creditable service prescribed for such annuity.

(c) Effective January 1, 1988, the occupational disability benefit shall
continue until the time one of the following first occurs: (1) disability
ceases; (2) the member requests termination of the benefit; or (3) the
member is engaged or found to be able to engage in gainful employment,
other than limited employment under Section 16-149.6. If
the disability benefit is discontinued under item (3) but the member is
subsequently found to be unable to be gainfully employed due to the
disability which was the cause for his or her most recent incapacity to
perform the duties of a teacher, the disability benefit will be resumed,
upon notification of the System, as soon as the member is not eligible to
receive salary.

(d) The board shall prescribe rules governing the filing,
investigation, control, and supervision of disability claims. Costs
incurred by a claimant in connection with completing a claim for disability
benefits shall be paid by the claimant.

(Source: P.A. 93-721, eff. 1-1-05; 94-539, eff. 8-10-05.)

(40 ILCS 5/16-149.2) (from Ch. 108 1/2, par. 16-149.2)

Sec. 16-149.2. Disability retirement annuity.

(a) A member whose disability benefit has been terminated under the
provisions of Section 16-149 may be retired on a disability retirement
annuity payable effective the day following such termination provided the
member remains disabled under the standard of disability provided in Section
16-149.

The disability retirement annuity shall be payable upon receipt of written
certificates from at least 2 licensed physicians designated
by the System verifying the continuation of the disability condition.
A disability retirement annuity shall not be paid during any period for
which the member receives benefits under Section 16-133, Section 16-149,
or Section 16-149.1 or has a right to receive a salary as a teacher, or
is employed in any capacity as a teacher by the employers included under
this System or in an equivalent capacity in any other public or private school,
college or university, except as provided in Section 16-149.6.

(b) The disability retirement annuity shall be equal to the larger of:
(1) 35% of the most recent annual contract salary rate or for part-time
and substitute members after June 30, 1990, the most recent annualized
salary rate; or (2) if disability commences prior to the member’s
attainment of age 55, the amount computed in accordance with Section
16-133, provided the amount computed under paragraph (B) of Section 16-133
shall be reduced by 1/2 of 1% for each month that the member is less than
age 55; or (3) if disability commences after the member’s attainment of age
55, and the member is not receiving a retirement annuity under Section
16-133, the amount computed in accordance with Section 16-133.

Prior to July 1, 1990, if the most recent period of service of any
member eligible to receive a disability retirement annuity was rendered on
a less than full-time but not less than half-time basis, the amount of the
disability retirement annuity payable shall be computed on the basis of the
salary received by such member for the member’s last year of service on a
full-time basis if such salary was greater than the member’s most recent
salary.

(c) If an annuitant receiving a disability retirement annuity under this
Section is engaged in or able to engage in gainful employment (including
limited employment under Section 16-149.6) paying more
than the difference between the disability retirement annuity and the salary
rate upon which the disability benefit is based, with no salary to be
considered less than the minimum prescribed in Section 24-8 of the School
Code, the disability retirement annuity shall be reduced to
an amount which together with the amount earned by the annuitant, equals
the salary rate upon which the disability benefit is based. However, for
the purposes of this subsection (c) only, the salary rate upon which the
benefit is based shall be deemed to increase by 15% on the tenth
anniversary of the commencement of the annuity.

Once each year during the first 5 years following retirement on a disability
retirement annuity, and once in every 3-year period thereafter, the System
may require an annuitant to undergo a medical examination, by a physician
or physicians designated by the System. If the annuitant refuses to submit
to such medical examination, the annuity shall be discontinued until such
time as the annuitant consents to the examination, and if refusal continues
for one year, all the rights to the annuity shall be revoked.

(d) If an annuitant in receipt of a disability retirement annuity returns
to active service as a teacher (other than limited employment under Section
16-149.6) or is no longer disabled, such annuity shall
cease and the annuitant shall again become a member of the Retirement System
and, if in active service as a teacher, shall make regular contributions. All service
for which the annuitant had credit on the date of disability shall be properly
reestablished.

An annuitant in receipt of a disability retirement annuity who returns
to active service as a teacher and who again becomes disabled shall not
be entitled to a recomputation of the disability retirement annuity based
on amendments enacted while the annuitant was in receipt of the annuity
unless at least one year of creditable service is rendered after the latest
re-entry into service.

(e) An annuitant in receipt of a disability retirement annuity may,
upon reaching retirement age as specified in Section 16-132, apply for a
retirement annuity which is to be calculated as specified in Section
16-133. The disability retirement annuity shall be discontinued upon
commencement of the retirement annuity.

(f) The board shall prescribe rules governing the filing, investigation,
control, and supervision of disability retirement claims. The rules
shall include specific standards to be used when requesting additional
medical examinations, hospital records or other data necessary for
determining the employment capacity and condition of the annuitant. Costs
incurred by a claimant in connection with completing a claim for disability
benefits shall be paid by the claimant.

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 as a teacher under the System, but also to persons whose status as
a teacher terminated prior to that date, whether or not the person is an
annuitant on that date.

(Source: P.A. 93-469, eff. 8-8-03; 94-539, eff. 8-10-05.)

(40 ILCS 5/16-149.3) (from Ch. 108 1/2, par. 16-149.3)

Sec. 16-149.3.
Increase in disability retirement annuity.
An annuitant
who retired on account of disability prior to July 22, 1947 may have the
amount of his annual disability retirement annuity increased to $400 upon
contributing an amount equal to the lesser of: (1) one month’s current
annuity, or (2) the difference between the current annual annuity and $400.

The increase in disability retirement annuity provided under this Section
shall be effective as of the first month following receipt of the required
contribution from the annuitant.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-149.4) (from Ch. 108 1/2, par. 16-149.4)

Sec. 16-149.4.
Supplementary disability retirement annuity.

(a) An annuitant receiving a disability retirement annuity on June 30,
1961 of less than $50 for each year of creditable service forming the basis
of the disability retirement annuity shall have his or her disability
retirement annuity increased to $50 per year for each year of such creditable
service, with a minimum annuity of $1,000 per year.

(b) In order to be entitled to the increase in disability retirement annuity
provided under this Section, an annuitant is required to make an additional
contribution of $5 for each year of creditable service, together with interest
at the rate of 3% per annum from August 25, 1961.

(c) The supplementary retirement annuity provided under this Section shall
begin to accrue on the first of the month following receipt of the required
contributions from the annuitant.

(Source: P.A. 91-887, eff. 7-6-00.)

(40 ILCS 5/16-149.5) (from Ch. 108 1/2, par. 16-149.5)

Sec. 16-149.5.
Automatic increase in disability benefit.
Each
disability benefit payable under Section 16-149, 16-149.1 or 16-149.2 shall
be increased by 7% of the original fixed amount of such benefit on January
1, 1991 or January 1 following the fourth anniversary of the granting of the
benefit, whichever occurs later. On each January 1 following the 7%
increase, the disability benefit shall be increased by 3% of the current
amount of the benefit, including prior increases under this Article.
However, in the case of a disability retirement annuity granted under
Section 16-149.2, the annual increases provided by this Section shall cease
as soon as the recipient of the annuity qualifies for the automatic annual
increases provided under Section 16-133.1.

(Source: P.A. 86-1488.)

(40 ILCS 5/16-149.6)

Sec. 16-149.6. Limited employment during disability.

(a) A teacher who (i) has been receiving a disability, occupational
disability, or disability retirement benefit under Section 16-149, 16-149.1,
or 16-149.2 for at least one year and (ii) remains unable to resume regular
full-time teaching due to disability, but is able to engage in limited or
part-time employment as a teacher, may engage in such limited or part-time
employment as a teacher for an employer under either this Article or an employer under Article 15 of this Code without loss of the disability, occupational
disability, or disability retirement benefit, provided that the teacher’s
earnings for that limited or part-time employment, when added to the amount
of the benefit, do not exceed 100% of the salary rate upon which the benefit
is based.

(b) A disabled teacher who engages in limited or part-time teaching under
this Section and earns service and contribution credits for that teaching shall
not receive duplicate service or contribution credits under Section 16-149 or
16-149.1.

(Source: P.A. 94-539, eff. 8-10-05; 95-816, eff. 8-13-08.)

(40 ILCS 5/16-150) (from Ch. 108 1/2, par. 16-150)

Sec. 16-150. Re-entry.

(a) This Section does not apply to an annuitant who returns to teaching
under the program established in Section 16-150.1, for the duration of his
or her participation in that program.

(b) If an annuitant under this System is again
employed as a teacher for an aggregate period exceeding that permitted by
Section 16-118, his or her retirement annuity shall be terminated and the
annuitant shall thereupon be regarded as an active member.

Such annuitant is not entitled to a recomputation of his or her
retirement annuity unless at least one full year of creditable service is
rendered after the latest re-entry into service and the annuitant must have
rendered at least 3 years of creditable service after last re-entry into
service to qualify for a recomputation of the retirement annuity based on
amendments enacted while in receipt of a retirement annuity, except when
retirement was due to disability.

However, regardless of age, an annuitant in receipt of a retirement annuity
may be given temporary employment by a school board not exceeding that
permitted under Section 16-118 and continue to receive the retirement annuity.

(c) Unless retirement was necessitated by disability, a retirement
shall be considered cancelled and the retirement allowance must be repaid
in full if the annuitant is employed as a teacher within the school year
during which service was terminated.

(d) An annuitant’s retirement which does not include a period of at
least one full and complete school year shall be considered cancelled and
the retirement annuity must be repaid in full unless such retirement was
necessitated by disability.

(Source: P.A. 95-331, eff. 8-21-07.)

(40 ILCS 5/16-150.1)

Sec. 16-150.1. Return to teaching in subject shortage area.

(a) As used in this Section, “eligible employment” means employment
beginning on or after July 1, 2003 and ending no later than June 30, 2024,
in a subject shortage area at a qualified school, in a position requiring
certification under the law governing the certification of teachers.

As used in this Section, “qualified school” means a public elementary or
secondary school that meets all of the following requirements:

(1) At the time of hiring a retired teacher under this Section, the school is experiencing a shortage of teachers in the subject shortage area for which the teacher is hired.
(2) The school district to which the school belongs has complied with the requirements of subsection (e), and the regional superintendent has certified that compliance to the System.
(3) If the school district to which the school belongs provides group health benefits for its teachers generally, substantially similar health benefits are made available for teachers participating in the program under this Section, without any limitations based on pre-existing conditions.

(b) An annuitant receiving a retirement annuity under this Article
(other than a disability retirement annuity) may engage in eligible
employment at a qualified school without impairing his or her retirement
status or retirement annuity, subject to the following conditions:

(1) the eligible employment does not begin within the school year during which service was terminated;
(2) the annuitant has not received any early retirement incentive under Section 16-133.3, 16-133.4, or 16-133.5;
(3) if the annuitant retired before age 60 and with less than 34 years of service, the eligible employment does not begin within the year following the effective date of the retirement annuity;
(4) if the annuitant retired at age 60 or above or with 34 or more years of service, the eligible employment does not begin within the 90 days following the effective date of the retirement annuity; and
(5) before the eligible employment begins, the employer notifies the System in writing of the annuitant’s desire to participate in the program established under this Section.

(c) An annuitant engaged in eligible employment in accordance with
subsection (b) shall be deemed a participant in the program established
under this Section for so long as he or she remains employed in eligible
employment.

(d) A participant in the program established under this Section continues
to be a retirement annuitant, rather than an active teacher, for all of the
purposes of this Code, but shall be deemed an active teacher for other
purposes, such as inclusion in a collective bargaining unit, eligibility for
group health benefits, and compliance with the laws governing the employment,
regulation, certification, treatment, and conduct of teachers.

With respect to an annuitant’s eligible employment under this Section,
neither employee nor employer contributions shall be made to the System and
no additional service credit shall be earned. Eligible employment does not
affect the annuitant’s final average salary or the amount of the retirement
annuity.

(e) Before hiring a teacher under this Section, the school district
to which the school belongs must do the following:

(1) If the school district to which the school belongs has honorably dismissed, within the calendar year preceding the beginning of the school term for which it seeks to employ a retired teacher under the program established in this Section, any teachers who are legally qualified to hold positions in the subject shortage area and have not yet begun to receive their retirement annuities under this Article, the vacant positions must first be tendered to those teachers.
(2) For a period of at least 90 days during the 6 months preceding the beginning of either the fall or spring term for which it seeks to employ a retired teacher under the program established in this Section, the school district must, on an ongoing basis, (i) advertise its vacancies in the subject shortage area in employment bulletins published by college and university placement offices located near the school; (ii) search for teachers legally qualified to fill those vacancies through the Illinois Education Job Bank; and (iii) post all vacancies on the school district’s website and list the vacancy in an online job portal or database.

A school district replacing a teacher who is unable to continue employment with the school district because of documented illness, injury, or disability that occurred after being hired by a school district under this Section shall be exempt from the provisions of paragraph (2) for 90 school days. However, the school district must on an ongoing basis comply with items (i), (ii), and (iii) of paragraph (2).

The school district must submit documentation of its compliance with this
subsection to the regional superintendent. Upon receiving satisfactory
documentation from the school district, the regional superintendent shall
certify the district’s compliance with this subsection to the System.

(f) This Section applies without regard to whether the annuitant was in
service on or after the effective date of this amendatory Act of the 93rd
General Assembly.

(Source: P.A. 101-49, eff. 7-12-19; 102-440, eff. 8-20-21.)

(40 ILCS 5/16-151) (from Ch. 108 1/2, par. 16-151)

Sec. 16-151.
Refund.
Upon termination of employment as a teacher for
any cause other than death or retirement, a member shall be paid the
following amount upon demand made at least 4 months after ceasing to teach:

(1) from the Benefit Trust Reserve, the actual total contributions paid by or on behalf of the member for membership service which have not been previously refunded and which are then credited to the member’s individual account in the Benefit Trust Reserve, without interest thereon, and
(2) from the Benefit Trust Reserve, the actual contributions not previously refunded, paid by or on behalf of the member for prior service and towards the cost of the automatic annual increase in retirement annuity as provided under Section 16-152, without interest thereon.

Any such amounts may be paid to the member either in one sum or, at the
election of the board, in 4 quarterly payments.

Contributions credited to a member for periods of disability as provided in
Sections 16-149 and 16-149.1 are not refundable.

Upon acceptance of a refund, all accrued rights and credits in the
System are forfeited and may be reinstated only if the refund is repaid
together with interest from the date of the refund to the date of repayment
at the following rates compounded annually: for periods prior to July 1,
1965, regular interest; for periods from July 1, 1965 to June 30, 1977,
4% per year; for periods on and after July 1, 1977, regular interest.
Repayment shall be permitted upon return to membership; however, service
credit previously forfeited by a refund and
subsequently reinstated may not be used as a basis for the payment of
benefits, other
than a refund of contributions, prior to the completion of one year of creditable
service following the refund, except when
repayment is permitted under the provisions of the “Retirement Systems
Reciprocal Act” contained in Article 20.

(Source: P.A. 93-469, eff. 8-8-03.)

(40 ILCS 5/16-152) (from Ch. 108 1/2, par. 16-152)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-152. Contributions by members.

(a) Except as provided in subsection (a-5), each member shall make contributions for membership service to this
System as follows:

(1) Effective July 1, 1998, contributions of 7.50% of salary towards the cost of the retirement annuity. Such contributions shall be deemed “normal contributions”.
(2) Effective July 1, 1969 and, in the case of Tier 1 members, ending on June 30, 2014, contributions of 1/2 of 1% of salary toward the cost of the automatic annual increase in retirement annuity provided under Section 16-133.1.
(3) Effective July 24, 1959, contributions of 1% of salary towards the cost of survivor benefits. Such contributions shall not be credited to the individual account of the member and shall not be subject to refund except as provided under Section 16-143.2.
(4) Effective July 1, 2005, contributions of 0.40% of salary toward the cost of the early retirement without discount option provided under Section 16-133.2. This contribution shall cease upon termination of the early retirement without discount option as provided in Section 16-133.2.

(a-5) Beginning July 1, 2014, in lieu of the contribution otherwise required under paragraph (1) of subsection (a), each Tier 1 member shall contribute 7% of salary towards the cost of the retirement annuity. Contributions made pursuant to this subsection (a-5) shall be deemed “normal contributions”.

(b) The minimum required contribution for any year of full-time
teaching service shall be $192.

(c) Contributions shall not be required of any annuitant receiving
a retirement annuity who is given employment as permitted under Section 16-118 or 16-150.1.

(d) A person who (i) was a member before July 1, 1998, (ii) retires with
more than 34 years of creditable service, and (iii) does not elect to qualify
for the augmented rate under Section 16-129.1 shall be entitled, at the time
of retirement, to receive a partial refund of contributions made under this
Section for service occurring after the later of June 30, 1998 or attainment
of 34 years of creditable service, in an amount equal to 1.00% of the salary
upon which those contributions were based.

(e) A member’s contributions toward the cost of early retirement without discount made under item (a)(4) of this Section shall not be refunded if the member has elected early retirement without discount under Section 16-133.2 and has begun to receive a retirement annuity under this Article calculated in accordance with that election. Otherwise, a member’s contributions toward the cost of early retirement without discount made under item (a)(4) of this Section shall be refunded according to whichever one of the following circumstances occurs first:

(1) The contributions shall be refunded to the member, without interest, within 120 days after the member’s retirement annuity commences, if the member does not elect early retirement without discount under Section 16-133.2.
(2) The contributions shall be included, without interest, in any refund claimed by the member under Section 16-151.
(3) The contributions shall be refunded to the member’s designated beneficiary (or if there is no beneficiary, to the member’s estate), without interest, if the member dies without having begun to receive a retirement annuity under this Article.
(4) The contributions shall be refunded to the member, without interest, if the early retirement without discount option provided under subsection (d) of Section 16-133.2 is terminated. In that event, the System shall provide to the member, within 120 days after the option is terminated, an application for a refund of those contributions.(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 16-152. Contributions by members.

(a) Each member shall make contributions for membership service to this
System as follows:

(1) Effective July 1, 1998, contributions of 7.50% of salary towards the cost of the retirement annuity. Such contributions shall be deemed “normal contributions”.
(2) Effective July 1, 1969, contributions of 1/2 of 1% of salary toward the cost of the automatic annual increase in retirement annuity provided under Section 16-133.1.
(3) Effective July 24, 1959, contributions of 1% of salary towards the cost of survivor benefits. Such contributions shall not be credited to the individual account of the member and shall not be subject to refund except as provided under Section 16-143.2.
(4) Effective July 1, 2005, contributions of 0.40% of salary toward the cost of the early retirement without discount option provided under Section 16-133.2. This contribution shall cease upon termination of the early retirement without discount option as provided in Section 16-133.2.

(b) The minimum required contribution for any year of full-time
teaching service shall be $192.

(c) Contributions shall not be required of any annuitant receiving
a retirement annuity who is given employment as permitted under Section 16-118 or 16-150.1.

(1) The contributions shall be refunded to the member, without interest, within 120 days after the member’s retirement annuity commences, if the member does not elect early retirement without discount under Section 16-133.2.
(2) The contributions shall be included, without interest, in any refund claimed by the member under Section 16-151.
(3) The contributions shall be refunded to the member’s designated beneficiary (or if there is no beneficiary, to the member’s estate), without interest, if the member dies without having begun to receive a retirement annuity under this Article.
(4) The contributions shall be refunded to the member, without interest, if the early retirement without discount option provided under subsection (d) of Section 16-133.2 is terminated. In that event, the System shall provide to the member, within 120 days after the option is terminated, an application for a refund of those contributions.(Source: P.A. 98-42, eff. 6-28-13; 98-92, eff. 7-16-13; 99-642, eff. 7-28-16.)

(40 ILCS 5/16-152.1) (from Ch. 108 1/2, par. 16-152.1)

Sec. 16-152.1.
Pickup of contributions.

(a) Each employer may pick up the member contributions required under
Section 16-152 for all salary earned after December 31, 1981. If an employer
decides not to pick up the member
contributions, the amount that would have been picked up shall continue
to be deducted from salary. If contributions are picked up, they
shall be treated as employer contributions in determining tax treatment under
the United States Internal Revenue Code. The employer shall pay these member
contributions from the same source of funds which is used in paying salary to
the member. The employer may pick up these contributions by a reduction in the
cash salary of the member or by an offset against a future salary increase or
by a combination of a reduction in salary and offset against a future salary
increase. If member contributions are picked up, they shall be treated for all
purposes of this Article 16 in the same manner as member contributions made
prior to the date the pick up began.

(b) The State Board of Education shall pick up the contributions of
regional superintendents required under Section 16-152 for all salary
earned for the 1982 calendar year and thereafter.

(c) Effective July 1, 1983, each employer shall pick up the member
contributions required under Section 16-152 for all salary earned after such
date. Contributions so picked up shall be treated as employer contributions in
determining tax treatment under the United States Internal Revenue Code. The
employer shall pay these member contributions from the same source of funds
which is used in paying salary to the member. The employer may pick up these
contributions by a reduction in the cash salary of the member or by an offset
against a future salary increase or by a combination of a reduction in salary
and offset against a future salary increase. Member contributions so picked up
shall be treated for all purposes of this Article 16 in the same manner as
member contributions made prior to the date the pick up began.

(d) Subject to the requirements of federal law and the rules of the
board, beginning July 1, 1998 a member who is employed on a full-time basis
may elect to have the employer pick up optional contributions that the
member has elected to pay to the System, and the contributions so picked up
shall be treated as employer contributions for the purposes of determining
federal tax treatment. The election to have optional contributions picked
up is irrevocable. At the time of making the election, the member shall
execute a binding, irrevocable payroll deduction authorization. Upon receiving
notice of the election, the employer shall pick up the contributions by a
reduction in the cash salary of the member and shall pay the contributions from
the same source of funds that is used to pay earnings to the member.

(Source: P.A. 90-448, eff. 8-16-97.)

(40 ILCS 5/16-152.5)

(This Section was added by P.A. 98-599, which has been held unconstitutional)

Sec. 16-152.5. Use of contributions for health care subsidies. The System shall not use any contribution received by the System under this Article to provide a subsidy for the cost of participation in a retiree health care program.

(Source: P.A. 98-599, eff. 6-1-14.)

(40 ILCS 5/16-153.1) (from Ch. 108 1/2, par. 16-153.1)

Sec. 16-153.1.
(Repealed).

(Source: P.A. 89-25, eff. 6-21-95. Repealed internally, eff. 7-1-96.)

(40 ILCS 5/16-153.2) (from Ch. 108 1/2, par. 16-153.2)

Sec. 16-153.2.
(Repealed).

(Source: P.A. 89-25, eff. 6-21-95. Repealed internally, eff. 7-1-98.)

(40 ILCS 5/16-153.3) (from Ch. 108 1/2, par. 16-153.3)

Sec. 16-153.3.
(Repealed).

(Source: P.A. 89-25, eff. 6-21-95. Repealed internally, eff. 7-1-96.)

(40 ILCS 5/16-153.4) (from Ch. 108 1/2, par. 16-153.4)

Sec. 16-153.4.
(Repealed).

(Source: P.A. 89-25, eff. 6-21-95. Repealed internally, eff. 7-1-96.)

(40 ILCS 5/16-153.5)

Sec. 16-153.5.
Election of medicare coverage.

(a) The System shall conduct a divided medicare coverage referendum, open
to teachers continuously employed by the same employer since March 31, 1986.
The referendum shall be conducted in accordance with the applicable provisions
of federal law and Article 21 of this Code.

(b) As used in this Section and in compliance with federal law,
“referendum” means the process whereby teachers are granted the opportunity
to make an irrevocable individual election to participate in the medicare
program on a prospective basis.

(c) Employers shall pay the necessary employer contributions and make the
necessary deductions from salary for teachers who elect to participate in the
federal medicare program under this Section, as required by the System, Article
21 of this Code, and federal law.

(Source: P.A. 93-119, eff. 7-10-03.)

(40 ILCS 5/16-154) (from Ch. 108 1/2, par. 16-154)

Sec. 16-154.
Deductions from salary.

(a) Required contributions. The governing body of each school district
and of each employing unit coming under this System,
and the State Comptroller or other State officer certifying payroll vouchers,
including payments of salary or wages to teachers, shall pick up or retain on
every pay day the contributions required under Section 16-152 of each member.
Each governing body or officer shall furnish a statement to each member showing
the amount picked up or retained from his or her salary.

(b) Optional contributions. For the purposes of this Section and Section
16-152.1, “optional contributions” means contributions that a member elects to
make in order to establish optional service credit or to reinstate creditable
service that was terminated upon payment of a refund.

The governing body of each school district and of each employing unit coming
under this System and the State Comptroller or other State officer certifying
payroll vouchers shall take the steps necessary to comply with the requirements
of Section 414(h)(2) of the Internal Revenue Code of 1986, as amended, to
permit the pickup of optional contributions on a tax-deferred basis. Beginning
July 1, 1998, a school district or other employing unit shall not withhold
optional contributions from the salary of any member on an after-tax basis.

(Source: P.A. 90-448, eff. 8-16-97.)

(40 ILCS 5/16-155) (from Ch. 108 1/2, par. 16-155)

Sec. 16-155. Report to system and payment of deductions.

(a) The governing body of each school district shall make two deposits each
month. The deposit for member contributions for salary paid between the first
and the fifteenth of the month is due by the 25th of the month. The deposit of
member contributions for salary paid between the sixteenth and last day of the
month is due by the 10th of the following month. All required contributions
for salary earned during a school term are due by July 10 next following the
close of such school term.

The governing body of each State institution coming
under this retirement system, the State Comptroller or other State officer
certifying payroll vouchers including payments of salary or wages to
teachers, and any other employer of teachers, shall, monthly, forward to
the secretary of the retirement system the member contributions required
under this Article.

Each employer specified above shall, prior to August 15 of each year,
forward to the System a detailed statement, verified in all cases of school
districts by the secretary or clerk of the district, of the amounts so
contributed since the period covered by the last previous annual statement,
together with required contributions not yet forwarded, such payments being
payable to the System.

The board may prescribe rules governing the form, content, investigation,
control, and supervision of such statements and may establish additional interim employer reporting requirements as the Board deems necessary. If no teacher in
a school district comes under the provisions of this Article, the
governing body of the district shall so state under the oath of its
secretary to this system, and shall at the same time forward a copy of
the statement to the regional superintendent of schools.

The board may also require reporting requirements that are different than those prescribed in this Section and may require different reporting requirements for different benefits or purposes established under this Article, including, but not limited to, any optional benefit plan an employee chooses to participate in.

(b) If the governing body of an employer that is not a State agency fails to forward such
required contributions within the time permitted in subsection (a) above,
the System shall notify the employer of an additional amount
due, equal to
$50 per day for each day that elapses from the due date until the day such report and employee contributions are received by the System.

(c) If the system, on August 15, is not in receipt of the detailed
statements required under this Section of any school district or other
employing unit, such school district or other employing unit shall pay to
the system an amount equal to $250 for each day that elapses from August
15, until the day such statement is filed with the system.

(Source: P.A. 101-502, eff. 8-23-19.)

(40 ILCS 5/16-157) (from Ch. 108 1/2, par. 16-157)

Sec. 16-157.
Consent to deductions – discharge of claims.
Every member
is deemed to have consented to the contributions required under this Article.
Payment of salary or compensation less the
required contribution shall
be a complete discharge and acquittance of all salary and compensation
claims and demands for the member’s services rendered during the period
covered by such payment.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-158)
(from Ch. 108 1/2, par. 16-158)

Sec. 16-158. Contributions by State and other employing units.

(a) The State shall make contributions to the System by means of
appropriations from the Common School Fund and other State funds of amounts
which, together with other employer contributions, employee contributions,
investment income, and other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis in accordance
with actuarial recommendations.

The Board shall determine the amount of State contributions required for
each fiscal year on the basis of the actuarial tables and other assumptions
adopted by the Board and the recommendations of the actuary, using the formula
in subsection (b-3).

(a-1) Annually, on or before November 15 until November 15, 2011, the Board shall certify to the
Governor the amount of the required State contribution for the coming fiscal
year. The certification under this subsection (a-1) shall include a copy of the actuarial recommendations
upon which it is based and shall specifically identify the System’s projected State normal cost for that fiscal year.

On or before May 1, 2004, the Board shall recalculate and recertify to
the Governor the amount of the required State contribution to the System for
State fiscal year 2005, taking into account the amounts appropriated to and
received by the System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.

On or before July 1, 2005, the Board shall recalculate and recertify
to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking into account the changes in required State contributions made by Public Act 94-4.

On or before April 1, 2011, the Board shall recalculate and recertify to the Governor the amount of the required State contribution to the System for State fiscal year 2011, applying the changes made by Public Act 96-889 to the System’s assets and liabilities as of June 30, 2009 as though Public Act 96-889 was approved on that date.

(a-5) On or before November 1 of each year, beginning November 1, 2012, the Board shall submit to the State Actuary, the Governor, and the General Assembly a proposed certification of the amount of the required State contribution to the System for the next fiscal year, along with all of the actuarial assumptions, calculations, and data upon which that proposed certification is based. On or before January 1 of each year, beginning January 1, 2013, the State Actuary shall issue a preliminary report concerning the proposed certification and identifying, if necessary, recommended changes in actuarial assumptions that the Board must consider before finalizing its certification of the required State contributions. On or before January 15, 2013 and each January 15 thereafter, the Board shall certify to the Governor and the General Assembly the amount of the required State contribution for the next fiscal year. The Board’s certification must note any deviations from the State Actuary’s recommended changes, the reason or reasons for not following the State Actuary’s recommended changes, and the fiscal impact of not following the State Actuary’s recommended changes on the required State contribution.

(a-10) By November 1, 2017, the Board shall recalculate and recertify to the State Actuary, the Governor, and the General Assembly the amount of the State contribution to the System for State fiscal year 2018, taking into account the changes in required State contributions made by Public Act 100-23. The State Actuary shall review the assumptions and valuations underlying the Board’s revised certification and issue a preliminary report concerning the proposed recertification and identifying, if necessary, recommended changes in actuarial assumptions that the Board must consider before finalizing its certification of the required State contributions. The Board’s final certification must note any deviations from the State Actuary’s recommended changes, the reason or reasons for not following the State Actuary’s recommended changes, and the fiscal impact of not following the State Actuary’s recommended changes on the required State contribution.

(a-15) On or after June 15, 2019, but no later than June 30, 2019, the Board shall recalculate and recertify to the Governor and the General Assembly the amount of the State contribution to the System for State fiscal year 2019, taking into account the changes in required State contributions made by Public Act 100-587. The recalculation shall be made using assumptions adopted by the Board for the original fiscal year 2019 certification. The monthly voucher for the 12th month of fiscal year 2019 shall be paid by the Comptroller after the recertification required pursuant to this subsection is submitted to the Governor, Comptroller, and General Assembly. The recertification submitted to the General Assembly shall be filed with the Clerk of the House of Representatives and the Secretary of the Senate in electronic form only, in the manner that the Clerk and the Secretary shall direct.

(b) Through State fiscal year 1995, the State contributions shall be
paid to the System in accordance with Section 18-7 of the School Code.

(b-1) Beginning in State fiscal year 1996, on the 15th day of each month,
or as soon thereafter as may be practicable, the Board shall submit vouchers
for payment of State contributions to the System, in a total monthly amount of
one-twelfth of the required annual State contribution certified under
subsection (a-1).
From March 5, 2004 (the
effective date of Public Act 93-665)
through June 30, 2004, the Board shall not submit vouchers for the
remainder of fiscal year 2004 in excess of the fiscal year 2004
certified contribution amount determined under this Section
after taking into consideration the transfer to the System
under subsection (a) of Section 6z-61 of the State Finance Act.
These vouchers shall be paid by the State Comptroller and
Treasurer by warrants drawn on the funds appropriated to the System for that
fiscal year.

If in any month the amount remaining unexpended from all other appropriations
to the System for the applicable fiscal year (including the appropriations to
the System under Section 8.12 of the State Finance Act and Section 1 of the
State Pension Funds Continuing Appropriation Act) is less than the amount
lawfully vouchered under this subsection, the difference shall be paid from the
Common School Fund under the continuing appropriation authority provided in
Section 1.1 of the State Pension Funds Continuing Appropriation Act.

(b-2) Allocations from the Common School Fund apportioned to school
districts not coming under this System shall not be diminished or affected by
the provisions of this Article.

(b-3) For State fiscal years 2012 through 2045, the minimum contribution
to the System to be made by the State for each fiscal year shall be an amount
determined by the System to be sufficient to bring the total assets of the
System up to 90% of the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the required State
contribution shall be calculated each year as a level percentage of payroll
over the years remaining to and including fiscal year 2045 and shall be
determined under the projected unit credit actuarial cost method.

For each of State fiscal years 2018, 2019, and 2020, the State shall make an additional contribution to the System equal to 2% of the total payroll of each employee who is deemed to have elected the benefits under Section 1-161 or who has made the election under subsection (c) of Section 1-161.

A change in an actuarial or investment assumption that increases or
decreases the required State contribution and first
applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.

A change in an actuarial or investment assumption that increases or
decreases the required State contribution and first
applied to the State contribution in fiscal year 2014, 2015, 2016, or 2017 shall be
implemented:

(i) as already applied in State fiscal years before 2018; and
(ii) in the portion of the 5-year period beginning in the State fiscal year in which the actuarial change first applied that occurs in State fiscal year 2018 or thereafter, by calculating the change in equal annual amounts over that 5-year period and then implementing it at the resulting annual rate in each of the remaining fiscal years in that 5-year period.

For State fiscal years 1996 through 2005, the State contribution to the
System, as a percentage of the applicable employee payroll, shall be increased
in equal annual increments so that by State fiscal year 2011, the State is
contributing at the rate required under this Section; except that in the
following specified State fiscal years, the State contribution to the System
shall not be less than the following indicated percentages of the applicable
employee payroll, even if the indicated percentage will produce a State
contribution in excess of the amount otherwise required under this subsection
and subsection (a), and notwithstanding any contrary certification made under
subsection (a-1) before May 27, 1998 (the effective date of Public Act 90-582):
10.02% in FY 1999;
10.77% in FY 2000;
11.47% in FY 2001;
12.16% in FY 2002;
12.86% in FY 2003; and
13.56% in FY 2004.

Notwithstanding any other provision of this Article, the total required State
contribution for State fiscal year 2006 is $534,627,700.

Notwithstanding any other provision of this Article, the total required State
contribution for State fiscal year 2007 is $738,014,500.

For each of State fiscal years 2008 through 2009, the State contribution to
the System, as a percentage of the applicable employee payroll, shall be
increased in equal annual increments from the required State contribution for State fiscal year 2007, so that by State fiscal year 2011, the
State is contributing at the rate otherwise required under this Section.

Notwithstanding any other provision of this Article, the total required State contribution for State fiscal year 2010 is $2,089,268,000 and shall be made from the proceeds of bonds sold in fiscal year 2010 pursuant to Section 7.2 of the General Obligation Bond Act, less (i) the pro rata share of bond sale expenses determined by the System’s share of total bond proceeds, (ii) any amounts received from the Common School Fund in fiscal year 2010, and (iii) any reduction in bond proceeds due to the issuance of discounted bonds, if applicable.

Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011 is
the amount recertified by the System on or before April 1, 2011 pursuant to subsection (a-1) of this Section and shall be made from the proceeds of bonds
sold in fiscal year 2011 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System’s share of total bond
proceeds, (ii) any amounts received from the Common School Fund
in fiscal year 2011, and (iii) any reduction in bond proceeds
due to the issuance of discounted bonds, if applicable. This amount shall include, in addition to the amount certified by the System, an amount necessary to meet employer contributions required by the State as an employer under paragraph (e) of this Section, which may also be used by the System for contributions required by paragraph (a) of Section 16-127.

Beginning in State fiscal year 2046, the minimum State contribution for
each fiscal year shall be the amount needed to maintain the total assets of
the System at 90% of the total actuarial liabilities of the System.

Amounts received by the System pursuant to Section 25 of the Budget Stabilization Act or Section 8.12 of the State Finance Act in any fiscal year do not reduce and do not constitute payment of any portion of the minimum State contribution required under this Article in that fiscal year. Such amounts shall not reduce, and shall not be included in the calculation of, the required State contributions under this Article in any future year until the System has reached a funding ratio of at least 90%. A reference in this Article to the “required State contribution” or any substantially similar term does not include or apply to any amounts payable to the System under Section 25 of the Budget Stabilization Act.

Notwithstanding any other provision of this Section, the required State
contribution for State fiscal year 2005 and for fiscal year 2008 and each fiscal year thereafter, as
calculated under this Section and
certified under subsection (a-1), shall not exceed an amount equal to (i) the
amount of the required State contribution that would have been calculated under
this Section for that fiscal year if the System had not received any payments
under subsection (d) of Section 7.2 of the General Obligation Bond Act, minus
(ii) the portion of the State’s total debt service payments for that fiscal
year on the bonds issued in fiscal year 2003 for the purposes of that Section 7.2, as determined
and certified by the Comptroller, that is the same as the System’s portion of
the total moneys distributed under subsection (d) of Section 7.2 of the General
Obligation Bond Act. In determining this maximum for State fiscal years 2008 through 2010, however, the amount referred to in item (i) shall be increased, as a percentage of the applicable employee payroll, in equal increments calculated from the sum of the required State contribution for State fiscal year 2007 plus the applicable portion of the State’s total debt service payments for fiscal year 2007 on the bonds issued in fiscal year 2003 for the purposes of Section 7.2 of the General
Obligation Bond Act, so that, by State fiscal year 2011, the
State is contributing at the rate otherwise required under this Section.

(b-4) Beginning in fiscal year 2018, each employer under this Article shall pay to the System a required contribution determined as a percentage of projected payroll and sufficient to produce an annual amount equal to:

(i) for each of fiscal years 2018, 2019, and 2020, the defined benefit normal cost of the defined benefit plan, less the employee contribution, for each employee of that employer who has elected or who is deemed to have elected the benefits under Section 1-161 or who has made the election under subsection (b) of Section 1-161; for fiscal year 2021 and each fiscal year thereafter, the defined benefit normal cost of the defined benefit plan, less the employee contribution, plus 2%, for each employee of that employer who has elected or who is deemed to have elected the benefits under Section 1-161 or who has made the election under subsection (b) of Section 1-161; plus
(ii) the amount required for that fiscal year to amortize any unfunded actuarial accrued liability associated with the present value of liabilities attributable to the employer’s account under Section 16-158.3, determined as a level percentage of payroll over a 30-year rolling amortization period.

In determining contributions required under item (i) of this subsection, the System shall determine an aggregate rate for all employers, expressed as a percentage of projected payroll.

In determining the contributions required under item (ii) of this subsection, the amount shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation.

The contributions required under this subsection (b-4) shall be paid by an employer concurrently with that employer’s payroll payment period. The State, as the actual employer of an employee, shall make the required contributions under this subsection.

(c) Payment of the required State contributions and of all pensions,
retirement annuities, death benefits, refunds, and other benefits granted
under or assumed by this System, and all expenses in connection with the
administration and operation thereof, are obligations of the State.

If members are paid from special trust or federal funds which are
administered by the employing unit, whether school district or other
unit, the employing unit shall pay to the System from such
funds the full accruing retirement costs based upon that
service, which, beginning July 1, 2017, shall be at a rate, expressed as a percentage of salary, equal to the total employer’s normal cost, expressed as a percentage of payroll, as determined by the System. Employer contributions, based on
salary paid to members from federal funds, may be forwarded by the distributing
agency of the State of Illinois to the System prior to allocation, in an
amount determined in accordance with guidelines established by such
agency and the System. Any contribution for fiscal year 2015 collected as a result of the change made by Public Act 98-674 shall be considered a State contribution under subsection (b-3) of this Section.

(d) Effective July 1, 1986, any employer of a teacher as defined in
paragraph (8) of Section 16-106 shall pay the employer’s normal cost
of benefits based upon the teacher’s service, in addition to
employee contributions, as determined by the System. Such employer
contributions shall be forwarded monthly in accordance with guidelines
established by the System.

However, with respect to benefits granted under Section 16-133.4 or
16-133.5 to a teacher as defined in paragraph (8) of Section 16-106, the
employer’s contribution shall be 12% (rather than 20%) of the member’s
highest annual salary rate for each year of creditable service granted, and
the employer shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and 16-133.5, a teacher
as defined in paragraph (8) of Section 16-106 who is serving in that capacity
while on leave of absence from another employer under this Article shall not
be considered an employee of the employer from which the teacher is on leave.

(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as follows:

(1) Beginning July 1, 1998 through June 30, 1999, the employer contribution shall be equal to 0.3% of each teacher’s salary.
(2) Beginning July 1, 1999 and thereafter, the employer contribution shall be equal to 0.58% of each teacher’s salary.
The school district or other employing unit may pay these employer
contributions out of any source of funding available for that purpose and
shall forward the contributions to the System on the schedule established
for the payment of member contributions.

These employer contributions are intended to offset a portion of the cost
to the System of the increases in retirement benefits resulting from Public Act 90-582.

Each employer of teachers is entitled to a credit against the contributions
required under this subsection (e) with respect to salaries paid to teachers
for the period January 1, 2002 through June 30, 2003, equal to the amount paid
by that employer under subsection (a-5) of Section 6.6 of the State Employees
Group Insurance Act of 1971 with respect to salaries paid to teachers for that
period.

The additional 1% employee contribution required under Section 16-152 by Public Act 90-582
is the responsibility of the teacher and not the
teacher’s employer, unless the employer agrees, through collective bargaining
or otherwise, to make the contribution on behalf of the teacher.

If an employer is required by a contract in effect on May 1, 1998 between the
employer and an employee organization to pay, on behalf of all its full-time
employees
covered by this Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying the employer
contribution required under this subsection (e) for the balance of the term
of that contract. The employer and the employee organization shall jointly
certify to the System the existence of the contractual requirement, in such
form as the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time after May 1,
1998.

(f) If the amount of a teacher’s salary for any school year used to determine final average salary exceeds the member’s annual full-time salary rate with the same employer for the previous school year by more than 6%, the teacher’s employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, the present value of the increase in benefits resulting from the portion of the increase in salary that is in excess of 6%. This present value shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. If a teacher’s salary for the 2005-2006 school year is used to determine final average salary under this subsection (f), then the changes made to this subsection (f) by Public Act 94-1057 shall apply in calculating whether the increase in his or her salary is in excess of 6%. For the purposes of this Section, change in employment under Section 10-21.12 of the School Code on or after June 1, 2005 shall constitute a change in employer. The System may require the employer to provide any pertinent information or documentation.
The changes made to this subsection (f) by Public Act 94-1111 apply without regard to whether the teacher was in service on or after its effective date.

Whenever it determines that a payment is or may be required under this subsection, the System shall calculate the amount of the payment and bill the employer for that amount. The bill shall specify the calculations used to determine the amount due. If the employer disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the System in writing for a recalculation. The application must specify in detail the grounds of the dispute and, if the employer asserts that the calculation is subject to subsection (g), (g-5), (g-10), (g-15), or (h) of this Section, must include an affidavit setting forth and attesting to all facts within the employer’s knowledge that are pertinent to the applicability of that subsection. Upon receiving a timely application for recalculation, the System shall review the application and, if appropriate, recalculate the amount due.

The employer contributions required under this subsection (f) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System’s annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer’s receipt of the bill.

(f-1) (Blank).

(g) This subsection (g) applies only to payments made or salary increases given on or after June 1, 2005 but before July 1, 2011. The changes made by Public Act 94-1057 shall not require the System to refund any payments received before
July 31, 2006 (the effective date of Public Act 94-1057).

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to teachers under contracts or collective bargaining agreements entered into, amended, or renewed before June 1, 2005.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases paid to a teacher at a time when the teacher is 10 or more years from retirement eligibility under Section 16-132 or 16-133.2.

When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from overload work, including summer school, when the school district has certified to the System, and the System has approved the certification, that (i) the overload work is for the sole purpose of classroom instruction in excess of the standard number of classes for a full-time teacher in a school district during a school year and (ii) the salary increases are equal to or less than the rate of pay for classroom instruction computed on the teacher’s current salary and work schedule.

When assessing payment for any amount due under subsection (f), the System shall exclude a salary increase resulting from a promotion (i) for which the employee is required to hold a certificate or supervisory endorsement issued by the State Teacher Certification Board that is a different certification or supervisory endorsement than is required for the teacher’s previous position and (ii) to a position that has existed and been filled by a member for no less than one complete academic year and the salary increase from the promotion is an increase that results in an amount no greater than the lesser of the average salary paid for other similar positions in the district requiring the same certification or the amount stipulated in the collective bargaining agreement for a similar position requiring the same certification.

When assessing payment for any amount due under subsection (f), the System shall exclude any payment to the teacher from the State of Illinois or the State Board of Education over which the employer does not have discretion, notwithstanding that the payment is included in the computation of final average salary.

(g-5) When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from overload or stipend work performed in a school year subsequent to a school year in which the employer was unable to offer or allow to be conducted overload or stipend work due to an emergency declaration limiting such activities.

(g-10) When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from increased instructional time that exceeded the instructional time required during the 2019-2020 school year.

(g-15) When assessing payment for any amount due under subsection (f), the System shall exclude salary increases resulting from teaching summer school on or after May 1, 2021 and before September 15, 2022.

(h) When assessing payment for any amount due under subsection (f), the System shall exclude any salary increase described in subsection (g) of this Section given on or after July 1, 2011 but before July 1, 2014 under a contract or collective bargaining agreement entered into, amended, or renewed on or after June 1, 2005 but before July 1, 2011. Notwithstanding any other provision of this Section, any payments made or salary increases given after June 30, 2014 shall be used in assessing payment for any amount due under subsection (f) of this Section.

(i) The System shall prepare a report and file copies of the report with the Governor and the General Assembly by January 1, 2007 that contains all of the following information:

(1) The number of recalculations required by the changes made to this Section by Public Act 94-1057 for each employer.
(2) The dollar amount by which each employer’s contribution to the System was changed due to recalculations required by Public Act 94-1057.
(3) The total amount the System received from each employer as a result of the changes made to this Section by Public Act 94-4.
(4) The increase in the required State contribution resulting from the changes made to this Section by Public Act 94-1057.

(i-5) For school years beginning on or after July 1, 2017, if the amount of a participant’s salary for any school year exceeds the amount of the salary set for the Governor, the participant’s employer shall pay to the System, in addition to all other payments required under this Section and in accordance with guidelines established by the System, an amount determined by the System to be equal to the employer normal cost, as established by the System and expressed as a total percentage of payroll, multiplied by the amount of salary in excess of the amount of the salary set for the Governor. This amount shall be computed by the System on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the System that is available at the time of the computation. The System may require the employer to provide any pertinent information or documentation.

The employer contributions required under this subsection may be paid in the form of a lump sum within 90 days after receipt of the bill. If the employer contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the System’s annual actuarially assumed rate of return on investment compounded annually from the 91st day after receipt of the bill. Payments must be concluded within 3 years after the employer’s receipt of the bill.

(j) For purposes of determining the required State contribution to the System, the value of the System’s assets shall be equal to the actuarial value of the System’s assets, which shall be calculated as follows:

As of June 30, 2008, the actuarial value of the System’s assets shall be equal to the market value of the assets as of that date. In determining the actuarial value of the System’s assets for fiscal years after June 30, 2008, any actuarial gains or losses from investment return incurred in a fiscal year shall be recognized in equal annual amounts over the 5-year period following that fiscal year.

(k) For purposes of determining the required State contribution to the system for a particular year, the actuarial value of assets shall be assumed to earn a rate of return equal to the system’s actuarially assumed rate of return.

(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 102-16, eff. 6-17-21; 102-525, eff. 8-20-21; 102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)

(40 ILCS 5/16-158.1) (from Ch. 108 1/2, par. 16-158.1)

Sec. 16-158.1.

Actions to enforce payments by school districts and
other employing units. Any school district or other
employing unit failing to transmit to the System contributions required of
it under this Article or contributions required of teachers, for more
than 90 days after such contributions are due is subject to the following:
after giving notice to the district or other unit, the System may certify
to the State Comptroller or the Regional Superintendent of Schools the
amounts of such delinquent payments and the State Comptroller or the
Regional Superintendent of Schools shall deduct the amounts so certified
or any part thereof from any State funds to be remitted
to the school district or other employing unit involved and shall
pay the amount so deducted to the System. If State funds from which
such deductions may be made are not available, the System may proceed
against the school district or other employing unit to recover the
amounts of such delinquent payments in the appropriate circuit court.

The System may provide for an
audit of the records of a school district or other employing unit as
may be required to establish the amounts of required contributions.
The school district or other employing unit shall make its records
available to the System for the purpose of such audit. The cost of such
audit shall be added to the amount of the delinquent payments and shall
be recovered by the System from the school district or other employing
unit at the same time and in the same manner as the delinquent payments
are recovered.

(Source: P.A. 90-448, eff. 8-16-97.)

(40 ILCS 5/16-158.2)

(This Section was added by P.A. 98-599, which has been held unconstitutional)

Sec. 16-158.2. Obligations of State; funding guarantee.

(a) Beginning July 1, 2014, the State shall be obligated to contribute to the System in each State fiscal year an amount not less than the sum of (i) the State’s normal cost for the year and (ii) the portion of the unfunded accrued liability assigned to that year by law. Notwithstanding any other provision of law, if the State fails to pay an amount required under this subsection, it shall be the obligation of the Board to seek payment of the required amount in compliance with the provisions of this Section and, if the amount remains unpaid, to bring a mandamus action in the Supreme Court of Illinois to compel the State to make the required payment.

If the System submits a voucher for contributions required under Section 16-158 and the State fails to pay that voucher within 90 days of its receipt, the Board shall submit a written request to the Comptroller seeking payment. A copy of the request shall be filed with the Secretary of State, and the Secretary of State shall provide a copy to the Governor and General Assembly. No earlier than the 16th day after the System files the request with the Comptroller and Secretary of State, if the amount remains unpaid the Board shall commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to satisfy the voucher.

This subsection (a) constitutes an express waiver of the State’s sovereign immunity solely to the extent that it permits the Board to commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to pay a voucher for the contributions required under Section 16-158.

(b) Beginning in State fiscal year 2016, the State shall be obligated to make the transfers set forth in subsections (c-5) and (c-10) of Section 20 of the Budget Stabilization Act and to pay to the System its proportionate share of the transferred amounts in accordance with Section 25 of the Budget Stabilization Act. Notwithstanding any other provision of law, if the State fails to transfer an amount required under this subsection or to pay to the System its proportionate share of the transferred amount in accordance with Section 25 of the Budget Stabilization Act, it shall be the obligation of the Board to seek transfer or payment of the required amount in compliance with the provisions of this Section and, if the required amount remains untransferred or the required payment remains unpaid, to bring a mandamus action in the Supreme Court of Illinois to compel the State to make the required transfer or payment or both, as the case may be.

If the State fails to make a transfer required under subsection (c-5) or (c-10) of Section 20 of the Budget Stabilization Act or a payment to the System required under Section 25 of that Act, the Board shall submit a written request to the Comptroller seeking payment. A copy of the request shall be filed with the Secretary of State, and the Secretary of State shall provide a copy to the Governor and General Assembly. No earlier than the 16th day after the System files the request with the Comptroller and Secretary of State, if the required amount remains untransferred or the required payment remains unpaid, the Board shall commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to make the required transfer or payment or both, as the case may be.

This subsection (b) constitutes an express waiver of the State’s sovereign immunity solely to the extent that it permits the Board to commence a mandamus action in the Supreme Court of Illinois to compel the Comptroller to make a transfer required under subsection (c-5) or (c-10) of Section 20 of the Budget Stabilization Act and to pay to the System its proportionate share of the transferred amount in accordance with Section 25 of the Budget Stabilization Act.

The obligations created by this subsection (b) expire when all of the requirements of subsections (c-5) and (c-10) of Section 20 of the Budget Stabilization Act and Section 25 of the Budget Stabilization Act have been met.

(c) Any payments and transfers required to be made by the State pursuant to subsection (a) or (b) are expressly subordinate to the payment of the principal, interest, and premium, if any, on any bonded debt obligation of the State or any other State-created entity, either currently outstanding or to be issued, for which the source of repayment or security thereon is derived directly or indirectly from tax revenues collected by the State or any other State-created entity. Payments on such bonded obligations include any statutory fund transfers or other prefunding mechanisms or formulas set forth, now or hereafter, in State law or bond indentures, into debt service funds or accounts of the State related to such bond obligations, consistent with the payment schedules associated with such obligations.

(Source: P.A. 98-599, eff. 6-1-14.)

(40 ILCS 5/16-158.3)

Sec. 16-158.3. Individual employer accounts.

(a) The System shall create and maintain an individual account for each employer for the purposes of determining employer contributions under subsection (b-4) of Section 16-158. Each employer’s account shall be notionally charged with the liabilities attributable to that employer and credited with the assets attributable to that employer.

(b) Beginning with fiscal year 2018, the System shall assign notional liabilities to each employer’s account, equal to the amount of the employer contributions required to be made by the employer pursuant to items (i) and (ii) of subsection (b-4) of Section 16-158, plus any unfunded actuarial accrued liability associated with the defined benefits attributable to the employer’s employees who first became members on or after the implementation date and the employer’s employees who made the election under subsection (c-5) of Section 1-161.

(c) Beginning with fiscal year 2018, the System shall assign notional assets to each employer’s account equal to the amounts of employer contributions made pursuant to items (i) and (ii) of subsection (b-4) of Section 16-158.

(Source: P.A. 100-23, eff. 7-6-17.)

(40 ILCS 5/16-163) (from Ch. 108 1/2, par. 16-163)

Sec. 16-163. Board created. A board of 15 members constitutes the

board of trustees authorized to carry out the provisions of this Article and is
responsible for the general administration of the System. The board shall
be known as the Board of Trustees of the Teachers’ Retirement System
of the State of Illinois. The board shall be composed of the
Superintendent of Education, ex officio; 7 persons, not members of the System, to be appointed by the Governor,
who shall hold no elected State office; 5 persons who, at the time of their
election, are
teachers as defined in Section 16-106, elected by the
contributing members; and 2 annuitant members elected by the annuitants of the
System, as provided in Section 16-165.
The president of the board shall be appointed by the Governor from among the trustees.

(Source: P.A. 101-610, eff. 1-1-20.)

(40 ILCS 5/16-164) (from Ch. 108 1/2, par. 16-164)

Sec. 16-164. Board; appointed members; vacancies. Terms of office for
the appointed members shall begin on July 15 of an even-numbered year, except that the terms of office for members appointed pursuant to this amendatory Act of the 96th General Assembly shall begin upon being confirmed by the Senate.
The Governor shall appoint 3 members as trustees with the advice and consent of the Senate in each even-numbered year
who shall hold office for a term of 4 years, except that, of the members appointed pursuant to this amendatory Act of the 96th General Assembly, 3 members shall be appointed for a term ending July 14, 2012 and 3 members shall be appointed for a term ending July 14, 2014. The Governor shall appoint the additional member authorized under this amendatory Act of the 101st General Assembly with the advice and consent of the Senate for a term beginning on July 15, 2020 and ending July 14, 2022, and successors shall hold office for a term of 4 years. Each such appointee shall reside in and be
a taxpayer in the territory covered by this system, shall be interested
in public school welfare, and experienced and competent in financial and
business management. A vacancy in the term of an appointed
trustee shall be filled for the unexpired term by appointment of the
Governor.

Notwithstanding any provision of this Section to the contrary, the term of office of each member of the Board appointed by the Governor who is sitting on the Board on the effective date of this amendatory Act of the 96th General Assembly is terminated on that effective date. A trustee sitting on the Board on the effective date of this amendatory Act of the 96th General Assembly may not hold over in office for more than 60 days after the effective date of this amendatory Act of the 96th General Assembly. Nothing in this Section shall prevent the Governor from making a temporary appointment or nominating a trustee holding office on the day before the effective date of this amendatory Act of the 96th General Assembly.

(Source: P.A. 101-610, eff. 1-1-20.)

(40 ILCS 5/16-165) (from Ch. 108 1/2, par. 16-165)

Sec. 16-165. Board; elected members; vacancies.

(a) In each odd-numbered year, if there are 2 teachers whose terms of office will expire in that year, there shall be elected 2 teachers who
shall hold office for a term of 4 years beginning July 15 next following their
election or, if there are 3 teachers whose terms of office will expire in that year, there shall be elected 3 teachers who shall hold office for a term of 4 years beginning July 15 next following their election, in the manner provided under this Section. An elected teacher
member of the board who ceases to be a teacher as defined in Section 16-106 may
continue to serve on the board for the remainder of the term to which he or she
was elected.

(b) One elected annuitant trustee shall first be elected in
1987, and in every fourth year thereafter, for a
term of 4 years beginning July 15 next following his or her election.

(c) The elected annuitant position created by this amendatory Act of
the 91st General Assembly shall be filled as soon as possible in the manner
provided for vacancies, for an initial term ending July 15, 2001. One
elected annuitant trustee shall be elected in 2001, and in every fourth year
thereafter, for a term of 4 years beginning July 15 next following his or her
election.

The elected teacher position created by this amendatory Act of the 101st General Assembly shall be for an initial 3-year term and shall be filled in the manner provided for vacancies; except that if the teacher candidate who receives the highest number of votes and the incumbent members not up for election belong to the same statewide teacher organization, then the teacher candidate who receives the highest number of votes and is not a member of that statewide teacher organization shall be declared elected.

(d) Elections shall be held on May 1, unless May 1 falls on a Saturday
or Sunday, in which event the election shall be conducted on the
following Monday. Candidates shall be nominated by petitions in writing,
signed by not less than 500 teachers or annuitants, as the case may be, with
their addresses shown opposite their names. The petitions shall be filed with
the board’s Secretary not less than 90 nor more than 120 days prior to May 1.
The Secretary shall determine their validity not less than 75 days before the
election.

(d-5) Beginning July 15, 2020, not more than 4 of the 5 teachers elected to the Board of Trustees may be active members of the same statewide teacher organization. For the purposes of this Section, “statewide teacher organization” means a teacher organization (1) in which membership is not restricted to persons living or teaching within a limited geographical area of this State and (2) that has among its membership at least 10,000 persons who participate in this System.

Candidates for the teacher positions on the Board shall indicate, in their nomination petitions and campaign materials, which (if any) statewide teacher organizations they have belonged to during the 5 years preceding the election.

(e) If, for either teacher or annuitant members, the number of qualified
nominees exceeds the number of available positions,
the system shall prepare an appropriate ballot with the names of the candidates
in alphabetical order and shall mail one copy thereof, at least 10 days prior
to the election day, to each teacher or annuitant of this system as of the
latest date practicable, at the latest known address, together with a return
envelope addressed to the board and also a smaller envelope marked “For Ballot
Only”, and a slip for signature. Each voter, upon marking his ballot with a
cross mark in the square before the name of the person voted for, shall place
the ballot in the envelope marked “For Ballot Only”, seal the envelope, write
on the slip provided therefor his signature and address, enclose both the slip
and sealed envelope containing the marked ballot in the return envelope
addressed to the board, and mail it. Whether a person is eligible to vote for
the teacher nominees or the annuitant nominees shall be
determined from system payroll records as of March 1.

Upon receipt of the return envelopes, the system shall open them and set
aside unopened the envelopes marked “For Ballot Only”. On election day ballots
shall be publicly opened and counted by the trustees or canvassers appointed
therefor. Each vote cast for a candidate represents one vote only. No ballot
arriving after 10 o’clock a.m. on election day shall be counted.

(e-3) The 2 teacher
candidates or 3 teacher candidates, whichever is applicable for that election, and the annuitant candidate receiving the highest number of votes
shall be declared elected; except that beginning with the election in 2021, if the teacher candidate who receives the highest number of votes and the incumbent members not up for election belong to the same statewide teacher organization, then the second teacher candidate to be declared elected shall be the candidate who is not a member of the same statewide teacher organization and receives the highest number of votes, unless there is no such candidate or at least one candidate declared elected in the same election is not a member of that statewide teacher organization. The board shall declare the results of the election, keep a
record thereof, and notify the candidates of the results thereof within 30 days
after the election.

(e-5) If, for either class of members, there are only as many
qualified nominees as there are positions available, the balloting as described
in this
Section shall not be conducted for those nominees,
and the board shall declare them duly elected.

(f) A vacancy occurring in the elective membership of

the board
shall be filled for the unexpired term by a person qualified
for the vacant position, selected by the remaining elected members of the
board, if there are no more than 6 months remaining on the
term. For a term with more than 6 months remaining, the Director of the
Teachers’ Retirement System of the State of Illinois shall institute an
election in accordance with this Act to fill the unexpired term.

(Source: P.A. 101-610, eff. 1-1-20.)

(40 ILCS 5/16-166) (from Ch. 108 1/2, par. 16-166)

Sec. 16-166.
Board – oath of office.
Each trustee, prior to assuming office, shall take and subscribe to an
oath that he or she will diligently and honestly administer the affairs of the
board, and that he or she will not knowingly violate or willingly permit to be
violated any of the provisions of law applicable to the retirement system.
The oath shall be certified by the officer before whom it is taken, and
immediately filed in the office of the Secretary of State.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-167) (from Ch. 108 1/2, par. 16-167)

Sec. 16-167.
Board – compensation and expenses.
The trustees shall serve without compensation, but shall be reimbursed for
all necessary expenses.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-168) (from Ch. 108 1/2, par. 16-168)

Sec. 16-168.
Board – meeting – rules – voting.
The board shall meet
regularly at least 4 times a year at such time as it may by by-laws provide, or
at the call of the president or of a majority of the members. The board
may adopt rules for the government of its meetings and for the
administration of the system. Each trustee is entitled to
1 vote. The votes of a majority of the members are necessary for a decision by
the trustees at any meeting of the board.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-169) (from Ch. 108 1/2, par. 16-169)

Sec. 16-169. Board – secretary and other employees. The board, by a majority vote of all its members, shall appoint a
secretary who shall not be a member of the board and who shall serve as
the chief executive officer responsible for the detailed administration
of the system.

The secretary and chief executive officer of the system, known as the Executive Director, holding that position on April 1, 2009 is terminated on July 1, 2009, by operation of law, and shall thereafter no longer hold those positions or any other employment position with the system. The board is directed to take whatever action is necessary to effectuate this termination.

(Source: P.A. 96-6, eff. 4-3-09.)

(40 ILCS 5/16-169.1)

Sec. 16-169.1. 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
the determination of employer payments required under subsection (f) of Section 16-158, a disability claim, an administrative review proceeding, an attempt to obtain information to assist in the collection of sums due to the System, or a 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 Procedure.

(Source: P.A. 99-450, eff. 8-24-15.)

(40 ILCS 5/16-170) (from Ch. 108 1/2, par. 16-170)

Sec. 16-170.
Board powers and duties.
The board shall have the powers and duties stated in Sections 16-171 through
16-181.2, in addition to the other powers and
duties granted it
in this Article.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-171) (from Ch. 108 1/2, par. 16-171)

Sec. 16-171. To sue and be sued. To sue and be sued in the name of the board.
The board shall not be a corporation. The board may sue to protect any
rights of the retirement system. All actions brought by or against the
board shall be prosecuted or defended, as the case may be, by the Attorney
General. If the board pursues a mandamus action under Section 16-158.2 of this Code as amended by Senate Bill No. 1 of the 98th General Assembly in the form passed by the General Assembly, then the board may select the counsel of their choice.

(Source: P.A. 98-598, eff. 12-5-13.)

(40 ILCS 5/16-172) (from Ch. 108 1/2, par. 16-172)

Sec. 16-172.
To pay obligations and collect funds due.
To pay promptly expenses and other obligations that accrue under
this Article and to
see that all revenue, including contributions, due the system
is collected without unreasonable delay.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-173) (from Ch. 108 1/2, par. 16-173)

Sec. 16-173.
To maintain records and accounts.
To maintain a separate account for each individual member and annuitant;
to maintain adequate accounting records which shall reflect the financial
condition of the system, and such additional data as shall be necessary for
required calculations, actuarial valuations, and operation of the system;
to have the records of the system photographed, microfilmed or otherwise
reproduced, which photographs, microfilms or reproductions shall be deemed
original records for all purposes.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-174) (from Ch. 108 1/2, par. 16-174)

Sec. 16-174.
To maintain record of proceedings, etc.
To maintain a permanent record of all board
proceedings, which shall be open to public inspection.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-175) (from Ch. 108 1/2, par. 16-175)

Sec. 16-175.
To make annual report.
To make an annual financial report for each fiscal year ended June 30.

A copy of the report shall be transmitted to the State Board of
Education. The report of the retirement system shall contain a summary
of the fiscal transactions for the preceding fiscal year,
the amount of the
accumulated cash and securities, and a balance sheet indicating
the system’s financial condition by means of an actuarial
valuation.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-176) (from Ch. 108 1/2, par. 16-176)

Sec. 16-176. To adopt actuarial assumptions. At least once every 3 years, the actuary, as technical advisor,
shall make an actuarial
investigation into the mortality, service and compensation experience of the
members, annuitants, and beneficiaries of the retirement system. Based upon
the result of that investigation, the board shall adopt such
actuarial assumptions as it deems appropriate.

The actuarial investigation required under this Section shall include the System’s experience under the early retirement without discount option established in Section 16-133.2, including consideration of the sufficiency of the member and employer contributions under Section 16-133.2 and the active member contribution under Section 16-152 to adequately fund the early retirement without discount option. The Board shall promptly communicate the results of the actuarial investigation to the Commission on Government Forecasting and Accountability. Based on the actuarial investigation, the Commission on Government Forecasting and Accountability shall, no later than February 1 of the next year, recommend to the General Assembly any proportional adjustment in the amounts of the member and employer contributions under Section 16-133.2 that it deems necessary.

The early retirement without discount option under subsection (c) of Section 16-133.2 is extended as provided in subsection (d) of that Section. The early retirement without discount option under subsection (d) of Section 16-133.2 terminates on July 1, 2016.

(Source: P.A. 98-42, eff. 6-28-13; 99-232, eff. 8-3-15.)

(40 ILCS 5/16-178) (from Ch. 108 1/2, par. 16-178)

Sec. 16-178.
To receive gifts and legacies.
To receive any gifts or legacies for the benefit of the retirement
system.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-179) (from Ch. 108 1/2, par. 16-179)

Sec. 16-179.
To be trustee of reserves and to invest funds.
To
be the trustee of the reserves created under this Article,
and to invest and reinvest such reserves, subject to the requirements and
restrictions set forth in Sections 1-109, 1-109.1, 1-109.2, 1-110, 1-111,
1-114 and 1-115.

No bank or savings and loan association shall receive investment funds as
permitted by this Section, unless it has complied with the requirements
established pursuant to Section 6 of “An Act relating to certain investments of
public funds by public agencies”, approved July 23, 1943, as now or hereafter
amended. The limitations set forth in such Section 6 shall be applicable
only at the time of investment and shall not require the liquidation of
any investment at any time.

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.

All investments shall be clearly held and accounted for to indicate ownership
by the system. The board may direct the registration of securities or the
holding in interests in real property in the name of the system or in the name
of a nominee created for the express purpose of registration of securities or
holding interests in real property by a national or state bank or trust company
authorized to conduct a trust business in the State of Illinois. The board may
hold title to interests in real property in the name of the system or in the
name of a title holding corporation created for the express purpose of holding
title to interests in real property.

Investments shall be carried at cost or at a value determined in
accordance with generally accepted accounting principles.

(Source: P.A. 90-19, eff. 6-20-97; 90-448, eff. 8-16-97.)

(40 ILCS 5/16-179.1) (from Ch. 108 1/2, par. 16-179.1)

Sec. 16-179.1.

To
transfer investment functions and securities. The board may, by resolution
duly adopted by a majority
vote of its membership, transfer to the Illinois State Board of Investment
created by Article 22A, for management and administration, all
investments owned by the system of every kind and character.
Upon completion
of such transfer, the authority of the board to make investments
shall terminate. Thereafter, all investments of the assets
of the system shall be made by the Illinois State Board of
Investment in accordance with
the provisions of Article 22A.

Such transfer shall be made not later than the first day of the fourth
month next following the date of such resolution. Before such transfer an
audit of such investments shall be completed by a certified public
accountant selected by the Illinois State Board of Investment and approved
by the Auditor General of the State of Illinois. The expense of such audit
shall be defrayed by the board.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-179.2) (from Ch. 108 1/2, par. 16-179.2)

Sec. 16-179.2.
To Create and Maintain a Salary Reduction Plan.
(1) To
develop a Salary Reduction Plan for members as permitted under the relevant
Sections of the Internal Revenue Code.

(2) To contract with school districts and other employers for the
creation and maintenance of a uniform Salary Reduction Plan for system members.

(3) To adopt all rules necessary and reasonable for the implementation
of this Section.

(Source: P.A. 84-1028.)

(40 ILCS 5/16-181) (from Ch. 108 1/2, par. 16-181)

Sec. 16-181.
To make deposits.
To keep sufficient cash on deposit in one or more banks, savings and loan
associations or trust companies, organized under the laws of the State of
Illinois or of the United States, for the purpose of making disbursements
for annuities and other expenses; provided that the sum on deposit in any
one bank, savings and loan association or trust company shall not exceed
25% of the paid up capital and surplus of the depository.

No bank or savings and loan association shall receive investment funds
as permitted by this Section, unless it has complied with the requirements,
other than the maximum deposit requirement, established pursuant to Section
6 of “An Act relating to certain investments of public funds by public
agencies”, approved July 23, 1943, as now or hereafter amended.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-181.1) (from Ch. 108 1/2, par. 16-181.1)

Sec. 16-181.1.
To provide office space.
To rent, lease, or acquire
such space as may be necessary for the proper administration of the system.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-181.2) (from Ch. 108 1/2, par. 16-181.2)

Sec. 16-181.2.
To furnish statements.
To furnish annually a statement
of account to each teacher.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-181.3)

Sec. 16-181.3.
To prescribe the manner of payment.
To prescribe by rule
the manner of repaying refunds and purchasing the various optional service
credits permitted under this Article. The rules may prescribe the conditions
under which installment payments or partial payments may be accepted and may
specify the method of computing any interest due.

(Source: P.A. 90-448, eff. 8-16-97.)

(40 ILCS 5/16-181.4)

Sec. 16-181.4. To request information. To request such information from any member, annuitant, beneficiary, or employer as is necessary for the proper administration of the System.

(Source: P.A. 99-450, eff. 8-24-15.)

(40 ILCS 5/16-182) (from Ch. 108 1/2, par. 16-182)

Sec. 16-182. Members’ Contribution Reserve. On July 1, 2003, the
Members’ Contribution Reserve is abolished and the remaining balance shall be
transferred from that Reserve to the Benefit Trust Reserve.

(Source: P.A. 95-331, eff. 8-21-07.)

(40 ILCS 5/16-184) (from Ch. 108 1/2, par. 16-184)

Sec. 16-184.
Supplementary Annuity Reserve.
On July 1, 2003, the Supplemental Annuity
Reserve is abolished and any remaining balance shall be transferred from that
Reserve to the Benefit Trust Reserve.

(Source: P.A. 93-469, eff. 8-8-03.)

(40 ILCS 5/16-185) (from Ch. 108 1/2, par. 16-185)

Sec. 16-185.
Benefit Trust Reserve.

(a) On July 1, 2003, the Employer’s Contribution Reserve shall be
renamed the Benefit Trust Reserve. The Benefit Trust Reserve
shall serve as a clearing account for income and expenses of the System as
well as transfers to and from the other reserve accounts established under
this Article and adjustments thereto.

(b) This Reserve shall be credited with all contributions, investment
income, and other income received by the System, except as otherwise
required by this Article.

(c) This Reserve shall be charged with all benefits and refunds paid and
all other expenses of the System, except as otherwise required under this
Article.

(Source: P.A. 93-469, eff. 8-8-03.)

(40 ILCS 5/16-186.3) (from Ch. 108 1/2, par. 16-186.3)

Sec. 16-186.3.
Reserve for minimum retirement annuity.

(a) A Minimum Retirement Annuity Reserve is established for the purpose
of crediting funds received and charging disbursements for minimum retirement
annuity payments under Section 16-136.2 and Section 16-136.3.

This Reserve shall be credited with:

(1) The total of all contributions made by annuitants to qualify for the minimum retirement annuity.
(2) Amounts contributed to the System by the State of Illinois that are sufficient to assure payment of the minimum retirement annuity payments under Section 16-136.2 and Section 16-136.3.
(3) Regular interest computed annually on the average balance in this Reserve.

This Reserve shall be charged with all minimum retirement annuity
payments under Section 16-136.2 and Section 16-136.3.

(b) After all minimum retirement annuity payments have been completed,
any remaining funds shall be transferred from this Reserve to the Benefit
Trust Reserve.

(Source: P.A. 93-469, eff. 8-8-03.)

(40 ILCS 5/16-187) (from Ch. 108 1/2, par. 16-187)

Sec. 16-187.
Custodian of fund – warrants and vouchers – audits.

(a) The State Treasurer is ex-officio custodian of the funds of the
retirement system. He or she may process
payments from the funds of the system for
the purposes herein specified upon warrants or direct deposit transmittals
of the State Comptroller.
Commencing January 1, 1987, the State Treasurer shall credit interest, at
current rates, for any monies directly held. Such interest shall be
calculated using an average daily cash basis.
He or she shall be liable on the Treasurer’s
official bond for the proper performance of duties and be
held accountable for all cash and securities in his or her
custody. He or she shall keep books and
accounts in the manner prescribed by the board, and they shall always be
subject to the inspection of the board or any member thereof.

(b) The State Comptroller may draw warrants or prepare direct deposit
transmittals payable from the fund upon
the State Treasurer for the purposes herein provided upon the
presentation of vouchers approved by the secretary of
the board. The board shall file with the State Comptroller an attested
copy of a resolution designating such persons as his authority for making
payments upon such vouchers.

(c) At the end of each fiscal year, the board shall have the
accounts and records of the system audited by a person authorized to
practice public accounting under the laws of this state selected by the
Auditor General. Copies of all audits performed shall be filed with the
State Board of Education and the Auditor General.

(Source: P.A. 90-448, eff. 8-16-97.)

(40 ILCS 5/16-189.1) (from Ch. 108 1/2, par. 16-189.1)

Sec. 16-189.1.
Benefits payable monthly.
Retirement annuities and other
benefits, unless otherwise specified in this Article, shall be paid in 12
monthly installments as of the first day of each month and shall cover the
preceding month or proportionate part thereof then due. Provided,
however, upon the death of a member in receipt of a benefit, an annuitant
or a beneficiary, benefits shall be paid through the last day of the month
in which death occurs.

(Source: P.A. 84-1028.)

(40 ILCS 5/16-190) (from Ch. 108 1/2, par. 16-190)

Sec. 16-190.
Annuities, etc., – exempt.
The right of a person to a retirement annuity or other benefit, to the
return of contributions, the retirement annuity or
other benefit itself,
any optional benefit, any other right accrued
or accruing to any person under the provisions of this Article, and the
moneys in the fund created by this Article, shall be subject neither to
attachment, garnishment, execution, or other seizure by process, nor to
sale, pledge, mortgage or other alienation, and shall not be assignable
except as in this Article provided. A person receiving an annuity or benefit
may authorize withholding from such annuity or benefit for the purposes
enumerated in the “State Salary and Annuity Withholding Act”, approved August
21, 1961, as now or hereafter amended. The moneys in the fund are exempt from
any state or municipal tax.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-190.1) (from Ch. 108 1/2, par. 16-190.1)

Sec. 16-190.1.

Payment of benefits on account of minors, disabled persons
and others. Benefits under this Article due minors or disabled persons
as defined in Section 16-140(4) may be paid (1) to any person who has legally
qualified and is acting as guardian of the minor’s or disabled person’s person
or property in any jurisdiction; or (2) to a parent of the minor or to any
adult person with whom the minor or disabled person may be residing, provided
the board is assured that the moneys will be held in trust or used for the
support of the minor or disabled person; or (3) to the trustee of a trust
established for the benefit of the minor or disabled person. In addition, an
adult person to whom benefits under this Article may be paid, while of sound
mind and memory, may designate in writing any adult person with whom he or she
resides or who provides responsible assistance or advice to him or her in the
conduct of his or her affairs to receive benefits due or to become due to him
or her under this Article, and benefits may be paid in accordance with such
designation provided the board is assured that the same will be held in trust
or used for the support of the person making such designation. The written
receipt from the parent or other adult person shall constitute an absolute
discharge of the system’s liability in respect of the amounts paid by the
system.

(Source: P.A. 87-1265.)

(40 ILCS 5/16-190.5)

Sec. 16-190.5. Accelerated pension benefit payment in lieu of any pension benefit.

(a) As used in this Section:

“Eligible person” means a person who:

(1) has terminated service;
(2) has accrued sufficient service credit to be eligible to receive a retirement annuity under this Article;
(3) has not received any retirement annuity under this Article; and
(4) has not made the election under Section 16-190.6.

“Pension benefit” means the benefits under this Article, or Article 1 as it relates to those benefits, including any anticipated annual increases, that an eligible person is entitled to upon attainment of the applicable retirement age. “Pension benefit” also includes applicable survivor’s or disability benefits.

(b) As soon as practical after June 4, 2018 (the effective date of Public Act 100-587), the System shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the System to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. The System shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2026, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the System offers under this subsection in lieu of receiving any pension benefit. A person who elects to receive an accelerated pension benefit payment under this Section may not elect to proceed under the Retirement Systems Reciprocal Act with respect to service under this Article.

(c) A person’s creditable service under this Article shall be terminated upon the person’s receipt of an accelerated pension benefit payment under this Section, and no other benefit shall be paid under this Article based on the terminated creditable service, including any retirement, survivor, or other benefit; except that to the extent that participation, benefits, or premiums under the State Employees Group Insurance Act of 1971 are based on the amount of service credit, the terminated service credit shall be used for that purpose.

(d) If a person who has received an accelerated pension benefit payment under this Section returns to active service under this Article, then:

(1) Any benefits under the System earned as a result of that return to active service shall be based solely on the person’s creditable service arising from the return to active service.
(2) The accelerated pension benefit payment may not be repaid to the System, and the terminated creditable service may not under any circumstances be reinstated.

(e) As a condition of receiving an accelerated pension benefit payment, the accelerated pension benefit payment must be transferred into a tax qualified retirement plan or account. The accelerated pension benefit payment under this Section may be subject to withholding or payment of applicable taxes, but to the extent permitted by federal law, a person who receives an accelerated pension benefit payment under this Section must direct the System to pay all of that payment as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended.

(f) Upon receipt of a member’s irrevocable election to receive an accelerated pension benefit payment under this Section, the System shall submit a voucher to the Comptroller for payment of the member’s accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the State Pension Obligation
Acceleration Bond Fund to the System, and the System shall transfer the amount into the member’s eligible retirement plan or qualified account.

(g) The Board shall adopt any rules, including emergency rules, necessary to implement this Section.

(h) No provision of Public Act 100-587 shall be interpreted in a way that would cause the applicable System to cease to be a qualified plan under the Internal Revenue Code of 1986.

(Source: P.A. 101-10, eff. 6-5-19; 102-558, eff. 8-20-21; 102-718, eff. 5-5-22.)

(40 ILCS 5/16-190.6)

Sec. 16-190.6. Accelerated pension benefit payment for a reduction in annual retirement annuity and survivor’s annuity increases.

(a) As used in this Section:

“Accelerated pension benefit payment” means a lump sum payment equal to 70% of the difference of the present value of the automatic annual increases to a Tier 1 member’s retirement annuity and survivor’s annuity using the formula applicable to the Tier 1 member and the present value of the automatic annual increases to the Tier 1 member’s retirement annuity using the formula provided under subsection (b-5) and the survivor’s annuity using the formula provided under subsection (b-6).

“Eligible person” means a person who:

(1) is a Tier 1 member;
(2) has submitted an application for a retirement annuity under this Article;
(3) meets the age and service requirements for receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this Article; and
(5) has not made the election under Section 16-190.5.

(b) As soon as practical after June 4, 2018 the effective date of Public Act 100-587) and until June 30, 2026, the System shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the System shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity calculated in accordance with the formula provided under subsection (b-5) and any increases in survivor’s annuity payable to his or her survivor’s annuity beneficiary calculated in accordance with the formula provided under subsection (b-6) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement annuity otherwise payable under this Article.

(b-5) Notwithstanding any other provision of law, the retirement annuity of a person who made the election under subsection (b) shall be subject to annual increases on the January 1 occurring either on or after the attainment of age 67 or the first anniversary of the annuity start date, whichever is later. Each annual increase shall be calculated at 1.5% of the originally granted retirement annuity.

(b-6) Notwithstanding any other provision of law, a survivor’s annuity payable to a survivor’s annuity beneficiary of a person who made the election under subsection (b) shall be subject to annual increases on the January 1 occurring on or after the first anniversary of the commencement of the annuity. Each annual increase shall be calculated at 1.5% of the originally granted survivor’s annuity.

(c) If a person who has received an accelerated pension benefit payment returns to active service under this Article, then:

(1) the calculation of any future automatic annual increase in retirement annuity shall be calculated in accordance with the formula provided in subsection (b-5); and
(2) the accelerated pension benefit payment may not be repaid to the System.

(d) As a condition of receiving an accelerated pension benefit payment, the accelerated pension benefit payment must be transferred into a tax qualified retirement plan or account. The accelerated pension benefit payment under this Section may be subject to withholding or payment of applicable taxes, but to the extent permitted by federal law, a person who receives an accelerated pension benefit payment under this Section must direct the System to pay all of that payment as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended.

(d-5) Upon receipt of a member’s irrevocable election to receive an accelerated pension benefit payment under this Section, the System shall submit a voucher to the Comptroller for payment of the member’s accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the State Pension Obligation
Acceleration Bond Fund to the System, and the System shall transfer the amount into the member’s eligible retirement plan or qualified account.

(e) The Board shall adopt any rules, including emergency rules, necessary to implement this Section.

(f) No provision of this Section shall be interpreted in a way that would cause the applicable System to cease to be a qualified plan under the Internal Revenue Code of 1986.

(Source: P.A. 101-10, eff. 6-5-19; 102-718, eff. 5-5-22.)

(40 ILCS 5/16-191) (from Ch. 108 1/2, par. 16-191)

Sec. 16-191.
No gain or profit on investments.
No trustee or employee of the board shall have any interest in the gains
or profits of any investment made by the board, or as such receive any pay
or emolument for his or her services. No trustee or employee of the board shall,
directly or indirectly, for himself or herself or as an agent, in any
manner use such
gains or profits except to make current and necessary payments authorized
by the board. No trustee or employee of the board shall become an endorser
or surety or in any manner an obligor for moneys loaned or borrowed from
the board.

Any person violating any of the provisions of this section is guilty of
a petty offense.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-192) (from Ch. 108 1/2, par. 16-192)

Sec. 16-192.
Correction of errors.
Should any change or error in the records result in any member, annuitant
or beneficiary receiving from the system more or less than he or she would have been
entitled to receive had the records been correct, the board shall correct
such error, and, as far as practicable, shall adjust the payments in such a
manner that the actuarial equivalent of the benefit to which such
member, annuitant or beneficiary was entitled shall be paid; however, in
no event shall the system be required to change the records of any member,
annuitant or beneficiary if, at the time of discovery of the error,
more than 4 fiscal years have elapsed since the fiscal
year in which the error occurred.

(Source: P.A. 85-1008; 86-1488.)

(40 ILCS 5/16-193) (from Ch. 108 1/2, par. 16-193)

Sec. 16-193.
Retirement Systems Reciprocal Act.

The “Retirement Systems Reciprocal Act”, being Article 20 of this Code,
as now enacted and hereafter amended, is hereby adopted and made a part of
this Article.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-197) (from Ch. 108 1/2, par. 16-197)

Sec. 16-197.
Undivided interest.

All assets of the system shall be invested as one fund and no person,
group of persons or entity shall have any right other than to an undivided
interest in the whole, and all references to the reserves shall be
construed as not requiring a segregation of assets but only the maintenance
of a separate account indicating the equities in the assets as a whole.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-198) (from Ch. 108 1/2, par. 16-198)

Sec. 16-198.
Fraud.

Any person, member, trustee, or employee of the board who knowingly
makes any false statement or falsifies or permits to be falsified any
record of this retirement system in any attempt to defraud such system as a
result of such act, or intentionally or knowingly defrauds this retirement
system in any manner, is guilty of a Class A misdemeanor.

(Source: P.A. 77-2830.)

(40 ILCS 5/16-199) (from Ch. 108 1/2, par. 16-199)

Sec. 16-199. Felony conviction. None of the benefits provided for in this Article shall be paid to any
person who is convicted of any felony relating to or arising out of or in
connection with his or her service as a teacher.

None of the benefits provided for in this Article shall be paid to any person who otherwise would receive a survivor benefit who is convicted of any felony relating to or arising out of or in connection with the service of the teacher from whom the benefit results.

This Section shall not operate to impair any contract or vested right acquired
prior to July 9, 1955 under any law or laws
continued in this Article, nor to
preclude the right to a refund, and for the changes under this amendatory Act of the 100th General Assembly, shall not impair any contract or vested right acquired by a survivor prior to the effective date of this amendatory Act of the 100th General Assembly. The System may sue any such person to
collect all moneys paid in excess of refundable contributions.

All teachers entering or re-entering service after July 9, 1955 shall be
deemed to have consented to the provisions of this Section as a condition
of membership, and all participants entering service subsequent to the effective date of this amendatory Act of the 100th General Assembly shall be deemed to have consented to the provisions of this amendatory Act as a condition of participation.

(Source: P.A. 100-334, eff. 8-25-17.)

(40 ILCS 5/16-200) (from Ch. 108 1/2, par. 16-200)

Sec. 16-200.
Administrative review.
The Administrative Review Law, and
all amendments and modifications thereof, and the rules adopted pursuant
thereto, shall apply to and govern all proceedings for the judicial review
of final administrative decisions of the board provided for under this
Article. The term “administrative decision” is defined as in Section 3-101
of the Code of Civil Procedure. The venue for actions brought under the
Administrative Review Law shall be Sangamon County.

(Source: P.A. 87-794.)

(40 ILCS 5/16-201) (from Ch. 108 1/2, par. 16-201)

Sec. 16-201.
General provisions and savings clause.

The provisions of Article 1 and Article 23 of this Code apply to this
Article as though such provisions were fully set forth in this Article as a
part thereof.

(Source: Laws 1963, p. 161.)

(40 ILCS 5/16-202) (from Ch. 108 1/2, par. 16-202)

Sec. 16-202.
Savings clause.
The repeal or amendment of any Section
or provision of this Article by this amendatory Act of 1984 shall not affect
or impair any pensions, benefits, rights or credits accrued or in effect
prior thereto.

(Source: P.A. 83-1440.)

(40 ILCS 5/16-203)

(Text of Section from P.A. 102-813)

Sec. 16-203. Application and expiration of new benefit increases.

(a) As used in this Section, “new benefit increase” means an increase in the amount of any benefit provided under this Article, or an expansion of the conditions of eligibility for any benefit under this Article, that results from an amendment to this Code that takes effect after June 1, 2005 (the effective date of Public Act 94-4). “New benefit increase”, however, does not include any benefit increase resulting from the changes made to Article 1 or this Article by Public Act 95-910, Public Act 100-23, Public Act 100-587, Public Act 100-743, Public Act 100-769, Public Act 101-10, Public Act 101-49, or Public Act 102-16.

(b) Notwithstanding any other provision of this Code or any subsequent amendment to this Code, every new benefit increase is subject to this Section and shall be deemed to be granted only in conformance with and contingent upon compliance with the provisions of this Section.

(c) The Public Act enacting a new benefit increase must identify and provide for payment to the System of additional funding at least sufficient to fund the resulting annual increase in cost to the System as it accrues.

Every new benefit increase is contingent upon the General Assembly providing the additional funding required under this subsection. The Commission on Government Forecasting and Accountability shall analyze whether adequate additional funding has been provided for the new benefit increase and shall report its analysis to the Public Pension Division of the Department of Insurance. A new benefit increase created by a Public Act that does not include the additional funding required under this subsection is null and void. If the Public Pension Division determines that the additional funding provided for a new benefit increase under this subsection is or has become inadequate, it may so certify to the Governor and the State Comptroller and, in the absence of corrective action by the General Assembly, the new benefit increase shall expire at the end of the fiscal year in which the certification is made.

(d) Every new benefit increase shall expire 5 years after its effective date or on such earlier date as may be specified in the language enacting the new benefit increase or provided under subsection (c). This does not prevent the General Assembly from extending or re-creating a new benefit increase by law.

(e) Except as otherwise provided in the language creating the new benefit increase, a new benefit increase that expires under this Section continues to apply to persons who applied and qualified for the affected benefit while the new benefit increase was in effect and to the affected beneficiaries and alternate payees of such persons, but does not apply to any other person, including, without limitation, a person who continues in service after the expiration date and did not apply and qualify for the affected benefit while the new benefit increase was in effect.

(Source: P.A. 101-10, eff. 6-5-19; 101-49, eff. 7-12-19; 101-81, eff. 7-12-19; 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)

(Text of Section from P.A. 102-871)

Sec. 16-203. Application and expiration of new benefit increases.

(Source: P.A. 101-10, eff. 6-5-19; 101-49, eff. 7-12-19; 101-81, eff. 7-12-19; 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-871, eff. 5-13-22.)

(40 ILCS 5/16-204)

Sec. 16-204. Optional defined contribution benefit. As soon as practicable after the effective date of this amendatory Act of the 100th General Assembly, the System shall offer a defined contribution benefit to active members of the System. The defined contribution benefit shall be an optional benefit to any member who chooses to participate. The defined contribution benefit shall collect optional employee and optional employer contributions into an account and shall offer investment options to the participant. The benefit under this Section shall be operated in full compliance with any applicable State and federal laws, and the System shall utilize generally accepted practices in creating and maintaining the benefit for the best interest of the participants. The System may use funds from the employee and employer contributions to defray any and all costs of creating and maintaining the benefit. In addition, the System may use funds provided under Section 16-158 of this Code to defray any and all costs of creating and maintaining the benefit and then shall reimburse those costs from funds received from the employee and employer contributions under this Section. All employers must comply with the reporting and administrative functions established by the System and are required to implement the benefits established under this Section. The System shall produce an annual report on the participation in the benefit and shall make the report public.

As soon as is practicable on or after January 1, 2022, the System shall automatically enroll any employee who first becomes an active member or participant in the System. A member automatically enrolled under this Section shall have 3% of his or her pre-tax gross compensation for each compensation period deferred into his or her deferred compensation account, unless the member otherwise instructs the System on forms approved by the System. A member may elect, in a manner provided for by the System, to not participate in the defined contribution benefit or to increase or reduce the amount of pre-tax gross compensation contributed, consistent with State or federal law. A member shall be automatically enrolled in the benefit beginning the first day of the pay period following the member’s 30th day of employment. A member who has been automatically enrolled in the benefit may elect, within 90 days of enrollment, to withdraw from the benefit and receive a refund of amounts deferred, plus or minus any applicable earnings, investment fees, and administrative fees. Any refunded amount shall be included in the member’s gross income for the taxable year in which the refund is issued.

On or after January 1, 2023, the System may elect to increase the automatic annual contributions under this Section. The increase in the rate of contribution, however, shall not exceed 2% of a member’s pre-tax gross compensation per year, and at no time shall any total contribution exceed any contribution limits established by State or federal law.

(Source: P.A. 102-540, eff. 8-20-21.)

(40 ILCS 5/16-205)

Sec. 16-205. (Repealed).

(Source: P.A. 98-599, eff. 6-1-14. Repealed by P.A. 100-23, eff. 7-6-17.)

(40 ILCS 5/16-206)

Sec. 16-206. (Repealed).

(Source: P.A. 98-599, eff. 6-1-14. Repealed by P.A. 100-23, eff. 7-6-17.)

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Article 16 – Teachers’ Retirement System Of The State Of Illinois

Article 16 – Teachers’ Retirement System Of The State Of Illinois

Article 16 – Teachers’ Retirement System Of The State Of Illinois

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