HB 3520

Abstract

Amends the Illinois Pension Code. Provides that a security employee of the Department of Corrections or the Department of Juvenile Justice under the Tier 2 provisions is entitled to an annuity calculated under the alternative retirement formula, in lieu of the regular or minimum retirement annuity, only if the person has withdrawn from service with not less than 20 years of eligible creditable service and has attained age 55 (instead of age 60). With regard to Tier 2 members and participants under the Illinois Municipal Retirement Fund (IMRF), Chicago Municipal, Cook County, State Employees, and State Universities Article: changes the retirement age to age 60 with 20 years of service or age 67 with 10 years of service; rescinds an election for certain benefits for persons under the Chicago Municipal Article; provides that any retirement annuity or supplemental annuity shall be subject to annual increases on January 1 in the manner and with the same eligibility requirements provided for members or participants under the applicable Article who first became members or participants in that Article before January 1, 2011; and makes other changes. Provides that the changes made by the amendatory Act are intended to be retroactive to January 1, 2011 and are applicable without regard to whether a member or participant was in active service on or after the effective date. Authorizes SLEP status under IMRF for a person who is a county correctional officer or probation officer. Amends the State Mandates Act to require implementation without reimbursement. Pension Note (Government Forecasting & Accountability) According to the State Employees Retirement System (SERS), reducing the Tier 2 alternative formula retirement age from 60 to 55 for security employees of the Departments of Corrections and Juvenile Justice would cause the overall accrued liability to increase by $1.9 billion, with a corresponding increase to the State’s annual contribution of $84 million/year. A comprehensive actuarial study would be needed to assess the impact of the other components of the bill: granting the Tier 2 COLA after one year of retirement, regardless of age; lowering the normal (non-police) Tier 2 retirement age; and adding Tier 1 and 2 county correctional officers and probation officers to the IMRF SLEP program.