40 ILCS 5/7-172
2021 Illinois Compiled Statutes|Chapter 40 - PENSIONS|40 ILCS 5/ - Illinois Pension Code.|Article 7 - Illinois Municipal Retirement Fund

 (from Ch. 108 1/2, par. 7-172)Sec. 7-172. Contributions by participating municipalities and  participating instrumentalities.(a) Each participating municipality and each participating  instrumentality shall make payment to the fund as follows:1. municipality contributions in an amount determined     by applying the municipality contribution rate to each payment of earnings paid to each of its participating employees;2. an amount equal to the employee contributions     provided by paragraph (a) of Section 7-173, whether or not the employee contributions are withheld as permitted by that Section;3. all accounts receivable, together with interest     charged thereon, as provided in Section 7-209, and any amounts due under subsection (a-5) of Section 7-144;4. if it has no participating employees with current     earnings, an amount payable which, over a closed period of 20 years for participating municipalities and 10 years for participating instrumentalities, will amortize, at the effective rate for that year, any unfunded obligation. The unfunded obligation shall be computed as provided in paragraph 2 of subsection (b);5. if it has fewer than 7 participating employees or     a negative balance in its municipality reserve, the greater of (A) an amount payable that, over a period of 20 years, will amortize at the effective rate for that year any unfunded obligation, computed as provided in paragraph 2 of subsection (b) or (B) the amount required by paragraph 1 of this subsection (a).(b) A separate municipality contribution rate shall be determined  for each calendar year for all participating municipalities together  with all instrumentalities thereof.  The municipality contribution rate  shall be determined for participating instrumentalities as if they were  participating municipalities.  The municipality contribution rate shall  be the sum of the following percentages:1. The percentage of earnings of all the     participating employees of all participating municipalities and participating instrumentalities which, if paid over the entire period of their service, will be sufficient when combined with all employee contributions available for the payment of benefits, to provide all annuities for participating employees, and the $3,000 death benefit payable under Sections 7-158 and 7-164, such percentage to be known as the normal cost rate.2. The percentage of earnings of the participating     employees of each participating municipality and participating instrumentalities necessary to adjust for the difference between the present value of all benefits, excluding temporary and total and permanent disability and death benefits, to be provided for its participating employees and the sum of its accumulated municipality contributions and the accumulated employee contributions and the present value of expected future employee and municipality contributions pursuant to subparagraph 1 of this paragraph (b).  This adjustment shall be spread over a period determined by the Board, not to exceed 30 years for participating municipalities or 10 years for participating instrumentalities.3. The percentage of earnings of the participating     employees of all municipalities and participating instrumentalities necessary to provide the present value of all temporary and total and permanent disability benefits granted during the most recent year for which information is available.4. The percentage of earnings of the participating     employees of all participating municipalities and participating instrumentalities necessary to provide the present value of the net single sum death benefits expected to become payable from the reserve established under Section 7-206 during the year for which this rate is fixed.5. The percentage of earnings necessary to meet any     deficiency arising in the Terminated Municipality Reserve.(c) A separate municipality contribution rate shall be computed for  each participating municipality or participating instrumentality  for its sheriff's law enforcement employees.A separate municipality contribution rate shall be computed for the  sheriff's law enforcement employees of each forest preserve district that  elects to have such employees.  For the period from January 1, 1986 to  December 31, 1986, such rate shall be the forest preserve district's regular  rate plus 2%.In the event that the Board determines that there is an actuarial  deficiency in the account of any municipality with respect to a person who  has elected to participate in the Fund under Section 3-109.1 of this Code,  the Board may adjust the municipality's contribution rate so as to make up  that deficiency over such reasonable period of time as the Board may determine.(d) The Board may establish a separate municipality contribution  rate for all employees who are program participants employed under the  federal Comprehensive Employment Training Act by all of the  participating municipalities and instrumentalities.  The Board may also  provide that, in lieu of a separate municipality rate for these  employees, a portion of the municipality contributions for such program  participants shall be refunded or an extra charge assessed so that the  amount of municipality contributions retained or received by the fund  for all CETA program participants shall be an amount equal to that which  would be provided by the separate municipality contribution rate for all  such program participants.  Refunds shall be made to prime sponsors of  programs upon submission of a claim therefor and extra charges shall be  assessed to participating municipalities and instrumentalities.  In  establishing the municipality contribution rate as provided in paragraph  (b) of this Section, the use of a separate municipality contribution  rate for program participants or the refund of a portion of the  municipality contributions, as the case may be, may be considered.(e) Computations of municipality contribution rates for the  following calendar year shall be made prior to the beginning of each  year, from the information available at the time the computations are  made, and on the assumption that the employees in each participating  municipality or participating instrumentality at such time will continue  in service until the end of such calendar year at their respective rates  of earnings at such time.(f) Any municipality which is the recipient of State allocations  representing that municipality's contributions for retirement annuity  purposes on behalf of its employees as provided in Section 12-21.16 of  the Illinois Public Aid Code shall pay the allocations so  received to the Board for such purpose.  Estimates of State allocations to  be received during any taxable year shall be considered in the  determination of the municipality's tax rate for that year under Section  7-171.  If a special tax is levied under Section 7-171, none of the  proceeds may be used to reimburse the municipality for the amount of State  allocations received and paid to the Board.  Any multiple-county or  consolidated health department which receives contributions from a county  under Section 11.2 of "An Act in relation to establishment and maintenance  of county and multiple-county health departments", approved July 9, 1943,  as amended, or distributions under Section 3 of the Department of Public  Health Act, shall use these only for municipality contributions by the  health department.(g) Municipality contributions for the several purposes specified  shall, for township treasurers and employees in the offices of the  township treasurers who meet the qualifying conditions for coverage  hereunder, be allocated among the several school districts and parts of  school districts serviced by such treasurers and employees in the  proportion which the amount of school funds of each district or part of  a district handled by the treasurer bears to the total amount of all  school funds handled by the treasurer.From the funds subject to allocation among districts and parts of  districts pursuant to the School Code, the trustees shall withhold the  proportionate share of the liability for municipality contributions imposed  upon such districts by this Section, in respect to such township treasurers  and employees and remit the same to the Board.The municipality contribution rate for an educational service center shall  initially be the same rate for each year as the regional office of  education or school district  which serves as its administrative agent.  When actuarial data become  available, a separate rate shall be established as provided in subparagraph  (i) of this Section.The municipality contribution rate for a public agency, other than a  vocational education cooperative, formed under the Intergovernmental  Cooperation Act shall initially be the average rate for the municipalities  which are parties to the intergovernmental agreement.  When actuarial data  become available, a separate rate shall be established as provided in  subparagraph (i) of this Section.(h) Each participating municipality and participating  instrumentality shall make the contributions in the amounts provided in  this Section in the manner prescribed from time to time by the Board and  all such contributions shall be obligations of the respective  participating municipalities and participating instrumentalities to this  fund.  The failure to deduct any employee contributions shall not  relieve the participating municipality or participating instrumentality  of its obligation to this fund.  Delinquent payments of contributions  due under this Section may, with interest, be recovered by civil action  against the participating municipalities or participating  instrumentalities.  Municipality contributions, other than the amount  necessary for employee contributions, for  periods of service by employees from whose earnings no deductions were made  for employee contributions to the fund, may be charged to the municipality  reserve for the municipality or participating instrumentality.(i) Contributions by participating instrumentalities shall be  determined as provided herein except that the percentage derived under  subparagraph 2 of paragraph (b) of this Section, and the amount payable  under subparagraph 4 of paragraph (a) of this Section, shall be based on  an amortization period of 10 years.(j) Notwithstanding the other provisions of this Section, the additional unfunded liability accruing as a result of Public Act 94-712   shall be amortized over a period of 30 years beginning on January 1 of the  second calendar year following the calendar year in which Public Act 94-712 takes effect, except that the employer may provide for a longer amortization period by adopting a resolution or ordinance specifying a 35-year or 40-year period and submitting a certified copy of the ordinance or resolution to the fund no later than June 1 of the calendar year following the calendar year in which Public Act 94-712 takes effect.(k) If the amount of a participating employee's reported earnings for any of the 12-month periods used to determine the final rate of earnings exceeds the employee's 12-month reported earnings with the same employer for the previous year by the greater of 6% or 1.5 times the annual increase in the Consumer Price Index-U, as established by the United States Department of Labor for the preceding September, the participating municipality or participating instrumentality that paid those earnings shall pay to the Fund, in addition to any other contributions required under this Article, the present value of the increase in the pension resulting from the portion of the increase in reported earnings that is in excess of the greater of 6% or 1.5 times the annual increase in the Consumer Price Index-U, as determined by the Fund. This present value shall be computed on the basis of the actuarial assumptions and tables used in the most recent actuarial valuation of the Fund that is available at the time of the computation.Whenever it determines that a payment is or may be required under this subsection (k), the fund shall calculate the amount of the payment and bill the participating municipality or participating instrumentality for that amount. The bill shall specify the calculations used to determine the amount due. If the participating municipality or participating instrumentality disputes the amount of the bill, it may, within 30 days after receipt of the bill, apply to the fund in writing for a recalculation. The application must specify in detail the grounds of the dispute. Upon receiving a timely application for recalculation, the fund shall review the application and, if appropriate, recalculate the amount due.      The participating municipality and participating instrumentality contributions required under this subsection (k) may be paid in the form of a lump sum within 90 days after receipt of the bill. If the participating municipality and participating instrumentality contributions are not paid within 90 days after receipt of the bill, then interest will be charged at a rate equal to the fund'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 receipt of the bill by the participating municipality or participating instrumentality.When assessing payment for any amount due under this subsection (k), the fund shall exclude earnings increases resulting from overload or overtime earnings.When assessing payment for any amount due under this subsection (k), the fund shall exclude earnings increases resulting from payments for unused vacation time, but only for payments for unused vacation time made in the final 3 months of the final rate of earnings period.When assessing payment for any amount due under this subsection (k), the fund shall also exclude earnings increases attributable to  standard employment promotions resulting in increased responsibility and workload.This subsection (k) does not apply to earnings increases paid to individuals under contracts or collective bargaining agreements entered into, amended, or renewed before January 1, 2012 (the effective date of Public Act 97-609), earnings increases paid to members who are 10 years or more from retirement eligibility, or earnings increases resulting from an increase in the number of  hours required to be worked.When assessing payment for any amount due under this subsection (k), the fund shall also exclude earnings attributable to personnel policies adopted before January 1, 2012 (the effective date of Public Act 97-609) as long as those policies are not applicable to employees who begin service on or after January 1, 2012 (the effective date of Public Act 97-609).The change made to this Section by Public Act 100-139 is a clarification of existing law and is intended to be retroactive to January 1, 2012 (the effective date of Public Act 97-609). (Source: P.A. 99-745, eff. 8-5-16; 100-139, eff. 8-18-17; 100-411, eff. 8-25-17; 100-863, eff. 8-14-18.)