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Bill > SB0002

IL SB0002

IL SB0002
PEN CD-TIER 2 BENEFITS

summary

Introduced
01/13/2025
In Committee
01/13/2025
Crossed Over
Passed
Dead

Introduced Session

104th General Assembly

Bill Summary

Amends the Illinois Pension Code. Makes changes to Tier 2 benefits, including changing the amount of the automatic annual increase to 3% of the originally granted retirement annuity or 3% of the retirement annuity then being paid for the General Assembly and Judges Articles, changing the limit on the amount of salary for annuity purposes to the Social Security wage base, changing the calculation of final average salary to the Tier 1 calculation for persons who are active members on or after January 1, 2026, and changing the retirement age. Establishes an accelerated pension benefit payment option for the General Assembly, Chicago Teachers, and Judges Articles of the Code. Provides that, with regard to persons subject to the Tier 2 provisions, a security employee of the Department of Human Services, a security employee of the Department of Corrections or the Department of Juvenile Justice, an investigator for the Department of the Lottery, or a State highway worker is entitled to an annuity calculated under the alternative retirement annuity provisions of the State Employee Article of the Code. Authorizes the conversion of service to eligible creditable service. Provides that the Retirement Systems Reciprocal Act (Article 20 of the Code) is adopted and made a part of the Downstate Police, Downstate Firefighter, Chicago Police, and Chicago Firefighter Articles. Authorizes SLEP status under the Illinois Municipal Retirement Fund for a person who is a county correctional officer or probation officer and for a person who participates in IMRF and qualifies as a firefighter under the Public Safety Employee Benefits Act. In the Downstate Firefighter Article, includes a de facto firefighter in the definition of "firefighter". Defines "de facto firefighter". Provides that the monthly pension of a firefighter who is receiving a disability pension shall be increased at the rate of 3% of the original monthly pension. Makes changes to the minimum retirement annuity payable to a firefighter with 20 or more years of creditable service, the minimum disability pension, and the minimum surviving spouse's pension. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement by the State. Effective immediately.

AI Summary

This bill makes several significant changes to the Illinois Pension Code, focusing on Tier 2 benefits and providing new options for pension benefit payments. Here's a summary: This bill creates an accelerated pension benefit payment option for members of certain pension systems, specifically the General Assembly, Chicago Teachers, and Judges Articles. The bill introduces two primary options for eligible participants. First, participants can elect to receive a lump sum payment equal to 60% of the present value of their potential pension benefits in lieu of receiving any future pension benefits. Second, Tier 1 participants can choose a lump sum payment equal to 70% of the difference between their current automatic annual increase formula and a new, reduced increase formula. The bill significantly modifies Tier 2 pension benefits for members who are in service on or after January 1, 2026. For these members, the age and service eligibility requirements will revert to those applicable to Tier 1 members who first became participants on December 31, 2010. Additionally, the bill changes how final average salary is calculated for these members, using the Tier 1 calculation method. The bill also adjusts the annual earnings cap for pension calculations, aligning it with the Social Security wage base starting January 1, 2026. For retirement annuity increases, the bill establishes a flat 3% annual increase for affected members instead of the previous variable consumer price index-based calculation. Other notable changes include expanding eligible creditable service for certain job classifications, such as security employees, investigators, and state highway maintenance workers, and providing options for these employees to convert previous service credit to eligible creditable service. The bill is designed to provide more flexible pension benefit options while also standardizing certain calculation methods across different pension systems.

Sponsors (9)

Last Action

Added as Co-Sponsor Sen. Doris Turner (on 10/01/2025)

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