40 ILCS 5/7-141.1
2021 Illinois Compiled Statutes|Chapter 40 - PENSIONS|40 ILCS 5/ - Illinois Pension Code.|Article 7 - Illinois Municipal Retirement Fund

Sec. 7-141.1. Early retirement incentive.(a) The General Assembly finds and declares that:(1) Units of local government across the State have     been functioning under a financial crisis.(2) This financial crisis is expected to continue.(3) Units of local government must depend on     additional sources of revenue and, when those sources are not forthcoming, must establish cost-saving programs.(4) An early retirement incentive designed     specifically to target highly-paid senior employees could result in significant annual cost savings.(5) The early retirement incentive should be made     available only to those units of local government that determine that an early retirement incentive is in their best interest.(6) A unit of local government adopting a program of     early retirement incentives under this Section is encouraged to implement personnel procedures to prohibit, for at least 5 years, the rehiring (whether on payroll or by independent contract) of employees who receive early retirement incentives.(7) A unit of local government adopting a program of     early retirement incentives under this Section is also encouraged to replace as few of the participating employees as possible and to hire replacement employees for salaries totaling no more than 80% of the total salaries formerly paid to the employees who participate in the early retirement program.It is the primary purpose of this Section to encourage units of local  government that can realize true cost savings, or have determined that an early  retirement program is in their best interest, to implement an early retirement  program.(b) Until June 27, 1997 (the effective date of Public Act 90-32), this  Section does not apply to any employer that is a city, village, or incorporated  town, nor to the employees of any such employer.  Beginning on June 27, 1997 (the effective  date of Public Act 90-32), any employer under this Article, including  an employer that is a city, village, or incorporated town,  may establish an  early retirement incentive program for its employees under this Section.  The  decision of a city, village, or incorporated town to consider or establish an  early retirement program is at the sole discretion of that city, village, or  incorporated town, and nothing in Public Act 90-32 limits or  otherwise diminishes this discretion.  Nothing contained in this Section shall  be construed to require a city, village, or incorporated town to establish an  early retirement program and no city, village, or incorporated town may be  compelled to implement such a program.The benefits provided in this Section are available only to members  employed by a participating employer that has filed with the Board of the  Fund a resolution or ordinance expressly providing for the creation of an  early retirement incentive program under this Section for its employees and  specifying the effective date of the early retirement incentive program.  Subject to the limitation in subsection (h), an employer may adopt a resolution  or ordinance providing a program of early retirement incentives under this  Section at any time.The resolution or ordinance shall be in substantially the following form:    RESOLUTION (ORDINANCE) NO. .... A RESOLUTION (ORDINANCE) ADOPTING AN EARLY RETIREMENT INCENTIVE PROGRAM FOR EMPLOYEES IN THE ILLINOIS MUNICIPAL RETIREMENT FUNDWHEREAS, Section 7-141.1 of the Illinois Pension Code provides that a  participating employer may elect to adopt an early retirement  incentive program offered by the Illinois Municipal Retirement Fund by  adopting a resolution or ordinance; andWHEREAS, The goal of adopting an early retirement program is  to realize a substantial savings in personnel costs by offering early  retirement incentives to employees who have accumulated many years of  service credit; andWHEREAS, Implementation of the early retirement program will provide a  budgeting tool to aid in controlling payroll costs; andWHEREAS, The (name of governing body) has determined that the adoption of an  early retirement incentive program is in the best interests of the (name of  participating employer); therefore be itRESOLVED (ORDAINED) by the (name of governing body) of (name of  participating employer) that:(1) The (name of participating employer) does hereby adopt the Illinois  Municipal Retirement Fund early retirement incentive program as provided in  Section 7-141.1 of the Illinois Pension Code.  The early retirement incentive  program shall take effect on (date).(2) In order to help achieve a true cost savings, a person who retires under  the early retirement incentive program shall lose those incentives if he or she  later accepts employment with any IMRF employer in a position for which  participation in IMRF is required or is elected by the employee.(3) In order to utilize an early retirement incentive as a budgeting  tool, the (name of participating employer) will use its best efforts either  to limit the number of employees who replace the employees who retire under  the early retirement program or to limit the salaries paid to the employees who  replace the employees who retire under the early retirement program.(4) The effective date of each employee's retirement under this early  retirement program shall be set by (name of employer) and shall be no  earlier than the effective date of the program and no later than one year after  that effective date; except that the employee may require that the retirement  date set by the employer be no later than the June 30 next occurring after the  effective date of the program and no earlier than the date upon which the  employee qualifies for retirement.(5) To be eligible for the early retirement incentive under this Section,  the employee must have attained age 50 and have at least 20 years of creditable  service by his or her retirement date.(6) The (clerk or secretary) shall promptly file a certified copy of  this resolution (ordinance) with the Board of Trustees of the Illinois  Municipal Retirement Fund.    CERTIFICATIONI, (name), the (clerk or secretary) of the (name of participating  employer) of the County of (name), State of Illinois, do hereby certify  that I am the keeper of the books and records of the (name of employer)  and that the foregoing is a true and correct copy of a resolution  (ordinance) duly adopted by the (governing body) at a meeting duly convened  and held on (date).    SEAL    (Signature of clerk or secretary)(c) To be eligible for the benefits provided under an early retirement  incentive program adopted under this Section, a member must:(1) be a participating employee of this Fund who, on     the effective date of the program, (i) is in active payroll status as an employee of a participating employer that has filed the required ordinance or resolution with the Board, (ii) is on layoff status from such a position with a right of re-employment or recall to service, (iii) is on a leave of absence from such a position, or (iv) is on disability but has not been receiving benefits under Section 7-146 or 7-150 for a period of more than 2 years from the date of application;(2) have never previously received a retirement     annuity under this Article or under the Retirement Systems Reciprocal Act using service credit established under this Article;(3) (blank);(4) have at least 20 years of creditable service in     the Fund by the date of retirement, without the use of any creditable service established under this Section;(5) have attained age 50 by the date of retirement if     he or she is a Tier 1 regular employee or age 57 if he or she is a Tier 2 regular employee, without the use of any age enhancement received under this Section; and(6) be eligible to receive a retirement annuity under     this Article by the date of retirement, for which purpose the age enhancement and creditable service established under this Section may be considered.(d) The employer shall determine the retirement date for each employee  participating in the early retirement program adopted under this Section.  The  retirement date shall be no earlier than the effective date of the program and  no later than one year after that effective date, except that the employee may  require that the retirement date set by the employer be no later than the June  30 next occurring after the effective date of the program and no earlier than  the date upon which the employee qualifies for retirement.  The employer shall  give each employee participating in the early retirement program at least 30  days written notice of the employee's designated retirement date, unless the  employee waives this notice requirement.(e) 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 rate of earnings and the determination  of earnings, salary, or compensation under this or any other Article of the  Code.The age enhancement established under this Section may be used for all  purposes under this Article (including calculation of the reduction imposed  under subdivision (a)1b(iv) of Section 7-142),  except for purposes of a  reversionary annuity under Section 7-145 and any distributions required because  of age.  The age enhancement established under this Section may be used in  calculating a proportionate annuity payable by this Fund under the Retirement  Systems Reciprocal Act, but shall not be used in determining benefits payable  under other Articles of this Code under the Retirement Systems Reciprocal Act.(f) For all creditable service established under this Section, the  member must pay to the Fund an employee contribution consisting of the total employee contribution rate in effect at the time the member purchases the service for the plan in which the member was participating with the employer at that time multiplied by the member's highest annual salary rate used in the determination of the  final rate of earnings for retirement annuity purposes for each year of  creditable service granted under this Section.  Contributions for fractions of a year of service shall be prorated.  Any amounts that are disregarded in determining the final rate of earnings  under subdivision (d)(5) of Section 7-116 (the 125% rule) shall also be  disregarded in determining the required contribution under this subsection (f).The employee contribution shall be paid to the Fund as follows:  If the  member is entitled to a lump sum payment for accumulated vacation, sick leave,  or personal leave upon withdrawal from service, the employer shall deduct the  employee contribution from that lump sum and pay the deducted amount directly  to the Fund.  If there is no such lump sum payment or the required employee  contribution exceeds the net amount of the lump sum payment, then the remaining  amount due, at the option of the employee, may either be paid to the Fund  before the annuity commences or deducted from the retirement annuity in 24  equal monthly installments.(g) An annuitant who has received any age enhancement or creditable service  under this Section and thereafter accepts employment with or enters into a  personal services contract with an employer under this Article thereby forfeits  that age enhancement and creditable service; except that this restriction  does not apply to (1) service in an elective office, so long as the annuitant  does not participate in this Fund with respect to that office, (2) a person appointed as an officer under subsection (f) of Section 3-109 of this Code, and (3) a person appointed as an auxiliary police officer pursuant to Section 3.1-30-5 of the Illinois Municipal Code.  A person  forfeiting early retirement incentives under this subsection (i) must repay to  the Fund that portion of the retirement annuity already received which is  attributable to the early retirement incentives that are being forfeited, (ii)  shall not be eligible to participate in any future early retirement program  adopted under this Section, and (iii) is entitled to a refund of the employee  contribution paid under subsection (f).  The Board shall deduct the required  repayment from the refund and may impose a reasonable payment schedule for  repaying the amount, if any, by which the required repayment exceeds the refund  amount.(h) The additional unfunded liability accruing as a result of the adoption  of a program of early retirement incentives under this Section by an employer  shall be amortized over a period of 10 years beginning on January 1 of the  second calendar year following the calendar year in which the latest date for  beginning to receive a retirement annuity under the program (as determined by  the employer under subsection (d) of this Section) occurs; except that the  employer may provide for a shorter amortization period (of no less than 5  years) by adopting an ordinance or resolution specifying the length of the  amortization period and submitting a certified copy of the ordinance or  resolution to the Fund no later than 6 months after the effective date of the  program.  An employer, at its discretion, may accelerate payments to the Fund.An employer may provide more than one early retirement incentive program  for its employees under this Section.  However, an employer that has provided  an early retirement incentive program for its employees under this Section may  not provide another early retirement incentive program under this Section until the liability arising from the earlier program has been fully paid to  the Fund.    (Source: P.A. 102-210, eff. 1-1-22.)