Illinois Compiled Statutes
40 ILCS 5/7-116 (2026)
"Final rate of earnings": (a) For retirement and survivor annuities, the monthly earnings obtained by dividing the total earnings received by the employee during the period of either (1) for Tier 1 regular employees, the 48 consecutive months of service within the last 120 months of service in which his total earnings were the highest, (2) for Tier 2 regular employees, the 96 consecutive months of service within the last 120 months of service in which his total earnings were the highest, or (3) the employee's total period of service, by the number of months of service in such period
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(40 ILCS 5/7-116)
(from Ch. 108 1/2, par. 7-116)
Sec. 7-116. "Final rate of earnings":
(a) For retirement and survivor annuities, the monthly earnings obtained
by dividing the total earnings received by the employee during the period of
either (1) for Tier 1 regular employees, the 48 consecutive months of service within the last 120 months of
service in which his total earnings were the highest, (2) for Tier 2 regular employees, the 96 consecutive
months of service within the last 120 months of service in
which his total earnings were the highest, or (3) the
employee's total period of service, by the number of months
of service in such period.
(b) For death benefits, the higher of the rate determined under
paragraph (a) of this Section or total earnings received in the last 12 months
of service divided by twelve. If the deceased employee has less than 12 months
of service, the monthly final rate shall be the monthly rate of pay the
employee was receiving when he began service.
(c) For disability benefits, the total earnings of a participating
employee in the last 12 calendar months of service prior to the date he
becomes disabled divided by 12.
(d) In computing the final rate of earnings: (1) the earnings rate for
all periods of prior service shall be considered equal to the average
earnings rate for the last 3 calendar years of prior service for
which creditable service is received under Section 7-139 or, if there is less than 3 years of
creditable prior service, the average for the total prior service period
for which creditable service is received under Section 7-139; (2) for out
of state service and authorized
leave, the earnings rate shall be the rate upon which service credits are
granted; (3) periods of military leave shall not be considered; (4) the
earnings rate for all periods of disability shall be considered equal to
the rate of earnings upon which the employee's disability benefits are
computed for such periods; (5) the earnings to be considered for each of
the final three months of the final earnings period for persons who first became participants before January 1, 2012 and the earnings to be considered for each of the final 24 months for participants who first become participants on or after January 1, 2012 shall not exceed 125%
of the highest earnings of any other month in the final earnings period;
and (6) the annual amount of final rate of earnings shall be the monthly
amount multiplied by the number of months of service normally required by
the position in a year.
(Source: P.A. 102-210, eff. 1-1-22.)
Notes of Decisions
Cited in 3
cases, 2015–2017 · leading case: Pisani v. City of Springfield, 2017 IL App (4th) 160417 (Ill. App. Ct. 2017).
Pisani v. City of Springfield, 2017 IL App (4th) 160417 (Ill. App. Ct. 2017). “40 ILCS 5/7-116(a), (b), (c) (West 2012).”
In re Pension Reform Litig., 2015 IL 118585 (Ill. 2015). “2013)) and prohibits new hires from using accumulated sick or vacation time to boost their pension benefits (40 ILCS 5/7-116, 7-139, 9-219, 9-220, 14-104.”
Pisani v. City of Springfield, 2017 IL App (4th) 160417 (Ill. App. Ct. 2017). “” 40 ILCS 5/7-116(a) (West 2012). ¶ 11 This definition of the “ ‘[f]inal rate of earnings’ ” opens the door to a strategy known as “pension spiking.”
— 40 ILCS 5/7-116(a) — 2 cases
Pisani v. City of Springfield, 2017 IL App (4th) 160417 (Ill. App. Ct. 2017). “40 ILCS 5/7-116(a), (b), (c) (West 2012).”
Pisani v. City of Springfield, 2017 IL App (4th) 160417 (Ill. App. Ct. 2017). “” 40 ILCS 5/7-116(a) (West 2012). ¶ 11 This definition of the “ ‘[f]inal rate of earnings’ ” opens the door to a strategy known as “pension spiking.”
— 40 ILCS 5/7-116(d)(5) — 1 case
Pisani v. City of Springfield, 2017 IL App (4th) 160417 (Ill. App. Ct. 2017). “” 40 ILCS 5/7-116(a) (West 2012). ¶ 11 This definition of the “ ‘[f]inal rate of earnings’ ” opens the door to a strategy known as “pension spiking.”
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