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Pension Omnibus Bill

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House Amendment #4 to SB 1300 removes the effective date of the bill, making the bill effective in accordance with the Effective Date of Laws Act.  HA #4 also requires the report on the accelerated pension benefit payment options to be due on or before December 1, 2020 (instead of December 1, 2019).

House Amendment #3 to SB 1300 contains several provisions amending the Illinois Pension Code.  As it relates to SURS, HA #1 makes four changes: (1) extends the existing accelerated pension benefit payment options for three years (from June 30, 2021 to June 30, 2024); (2) allows Tier II police officers and firefighters to retire at age 60 (instead of age 67) without a reduced retirement annuity; (3) requires SURS to publish a report on accelerated pension benefit payments by December 1, 2019; and (4) makes a technical change related to the accelerated pension benefit payment option for Tier I and Tier II vested, inactive members.

Extension of Accelerated Pension Benefit Payment Options

The accelerated pension benefit payment options created by Public Act 100-587 are scheduled to expire on June 30, 2021.  These voluntary options allow Tier I and Tier II vested, inactive members to receive an accelerated pension benefit payment in lieu of any pension benefit from SURS and Tier I members to receive an accelerated pension benefit payment in exchange for reduced and delayed automatic annual increases in retirement and survivor benefits.  HA #3 extends these accelerated pension benefit payment options until June 30, 2024, and makes similar changes to the accelerated pension benefit payment options under the State Employees’ Retirement System and Teachers’ Retirement System.

Retirement Age for Tier II Police Officers and Firefighters 

HA #3 allows a Tier II member with at least 20 years of service as a police officer or firefighter to retire at age 60 with an unreduced retirement annuity under the special formula for police officers and firefighters.  Currently, a Tier II member can retire under the special formula for police officers and firefighters at age 67 with an unreduced retirement annuity or at age 62 with a reduced retirement annuity whereby his or her retirement annuity is reduced by 0.5% for each full month that his or her age is less than 67.   This change provides parity between the retirement ages of Tier II members under the alternative retirement formula under the State Employees’ Retirement System and Tier II members under the special formula for police officers and firefighters under SURS.

Report on Accelerated Pension Benefit Payment Options

HA #3 requires the SURS Board of Trustees to create a report concerning accelerated pension benefit payment options and submit that report to the governor and the General Assembly on or before December 1, 2019.  SURS must survey its Tier I members to determine whether such members are interested in the existing accelerated pension benefit payment options or different accelerated pension benefit payment options.  The report must include: (1) data related to member participation in the existing accelerated pension benefit payment options; (2) data related to the results of the member surveys; and (3) an examination of existing accelerated pension benefit options offered in other states in the public sector.   HA #3 also requires the boards of trustees of the State Employees’ Retirement System and the Teachers’ Retirement System to create and submit similar reports.

Technical Change for Accelerated Pension Benefit Payment Options for Vested Inactive Members

HA #3 establishes that, upon acceptance of an accelerated pension benefit payment under the accelerated pension benefit payment option for Tier I and Tier II vested, inactive members, all beneficiary designations previously filed with SURS will be canceled.  This change ensures that a member who receives an accelerated pension benefit payment as a vested, inactive member will be treated as a new employee upon any subsequent re-participation in SURS.

Effective Date

HA #3 to SB1300 takes effect immediately upon becoming law.

Sponsor: 
Senator John G. Mulroe and Representative Robert Martwick