summary
Introduced
02/04/2025
02/04/2025
In Committee
03/21/2025
03/21/2025
Crossed Over
Passed
Dead
Introduced Session
104th General Assembly
Bill Summary
Amends the Budget Stabilization Act. Provides a transfer of specified amounts from the General Revenue Fund to the Pension Stabilization Fund for fiscal years 2031 through 2041. Amends the Illinois Pension Code. With regard to each of the 5 State-funded retirement systems, provides that for State fiscal years 2027 through 2035, the minimum contribution to the System to be made by the State for each State fiscal year shall be an amount determined by the System to be sufficient to bring the total assets of the System up to 100% of the total actuarial liabilities of the System by the end of State fiscal year 2049. Makes conforming and other changes to the funding formulas. Provides that any person who earned service as a Tier 1 member or participant in any retirement system or pension fund established under this Code shall continue to earn service as a Tier 1 member and shall remain a Tier 1 member in any other retirement system or pension fund. Makes changes to the Tier 2 calculation of final average salary; the Tier 2 retirement age; and the amount of the automatic annual increases to Tier 2 annuities. Provides that, for a person who has reached the maximum percentage of salary allowed under the applicable system and who is within 5 years of the normal retirement age applicable for that member or participant, the reduction under provisions that reduce the retirement annuity due to age shall be 0%. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Provides that the Act takes effect January 1, 2028, except that certain provisions take effect upon becoming law.
AI Summary
This bill introduces several significant changes to Illinois' pension systems across various state employees' retirement systems. Here's a comprehensive summary:
This bill amends multiple pension systems and provides mechanisms for optional accelerated pension benefit payments with reduced future increases. Key provisions include:
1. Pension Stabilization Fund Transfers:
- Establishes new transfer amounts from the General Revenue Fund to the Pension Stabilization Fund for fiscal years 2031-2041
- Transfers range from $175 million to $750 million annually
2. Funding and Contribution Changes:
- Modifies state contribution calculations to aim for 100% system funding by fiscal year 2049
- Adjusts calculation methods for determining required state contributions
- Provides mechanisms for annual adjustments based on actuarial valuations
3. Accelerated Pension Benefit Payment Options:
- Allows eligible Tier 1 members in various state retirement systems to elect a lump sum payment of 60-70% of their pension's present value
- In exchange, recipients would receive reduced annual increases (from current rates to 1.5%)
- Option available until January 1, 2031
- Payments must be rolled into qualified retirement accounts
4. Retirement Age and Benefit Calculations:
- Modifies retirement age calculations for different pension systems
- Adjusts final average salary calculations, generally reducing the calculation period from 8 to 6 years
- Provides more flexible reduction percentages for members near retirement
5. Maximum Salary Calculations:
- Updates maximum annual earnings calculations to align with Social Security contribution base
- Ensures no retroactive adjustments to contributions or benefits
The bill aims to provide financial flexibility for pension systems, offer members alternative benefit options, and create a pathway to fuller system funding over time. It affects multiple state employee retirement systems, including state universities, judges, police, firefighters, and other public employees.
Committee Categories
Budget and Finance
Sponsors (1)
Last Action
Rule 19(a) / Re-referred to Rules Committee (on 03/21/2025)
bill text
bill summary
Loading...
bill summary
Loading...
bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.ilga.gov/legislation/BillStatus.asp?DocNum=2540&GAID=18&DocTypeID=HB&SessionID=114&GA=104 |
| BillText | https://www.ilga.gov/legislation/104/HB/10400HB2540.htm |
Loading...