SURS Logo

Tier I Automatic Annual Increase Calculation

Printer-friendly versionPDF version

HB 3518 allows Tier I participants in retirement systems and pension funds (other than police and firefighter pension funds) to irrevocably elect to have automatic annual increases on retirement or supplemental annuities calculated as the annual unadjusted percentage increase in the consumer price index-u, except that no increase can be less than one percent or more than five percent.

Specifically, HB 3518 amends the General Provisions article of the Illinois Pension Code to allow a Tier I participant to irrevocably elect to have increases on his or her retirement annuity or supplemental annuity calculated based on the annual unadjusted percentage increase in the consumer price index-u. The retirement annuity or supplemental annuity for a Tier I participant who makes this election must be subject to annual increases equal to the annual unadjusted percentage increase in the consumer price index-u, except that: (1) if the annual unadjusted percentage increase in the consumer price index-u is one percent or less, then the annual increase must be one percent; and (2) if the annual unadjusted percentage increase in the consumer price index-u is five percent or more, then the annual increase must be five percent.

HB 3518 defines a “Tier I participant” as a person who first became a participant or member under a pension fund or retirement system established under the Illinois Pension Code before January 1, 2011, except for a police or firefighter pension fund.

HB 3518 requires a pension fund or retirement system established under the Illinois Pension Code, except for a police or firefighter pension fund, to inform Tier I participants that they have the option to elect this automatic annual increase calculation.

HB 3518 takes effect immediately upon becoming law.

Sponsor: 
Representative Mark Batinick