I would have thought that they would have asked to see your ID when you purchased your Annual Pass. I've always to show my ID when purchasing an AP. Once you've used it, your photo comes up whenever you swipe it to enter the parks, so the CMs don't need to see a second form of ID because they're matching your photo to you.
As
Geemo said, there have been indications that
Disney is getting stricter with their rules regarding tickets. So,
I would expect them to ask to see your sister's ID when she uses the ticket. It might not happen, but it would be within the rules if the CMs required her to show an eligible ID and then deny her entry if she cannot do so.
The fine print on the offer says that proof of eligibility is required for purchase and admission.