Legislation

Legislation

Please note: SURS does not endorse specific pension reform legislation. Our goal is to update and educate SURS members concerning legislation that may affect their retirement benefits.

House

HJRCA 18
- Repeal Pension Rights
Sponsor(s): Representative Joe Sosnowski

HJRCA 18 repeals Article 13, Section 5 of the Illinois Constitution (commonly referred to as the Pension Protection Clause). Article 13, Section 5 of the Illinois Constitution states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

HJRCA 18 takes effect upon being declared adopted in accordance with Section 7 of the Illinois Constitutional Amendment Act.

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HR 0027
- Oppose Pension Cost Shift to Local Employers
Sponsor(s): Representative David McSweeney

HR 27 resolves that the Illinois House of Representatives believes that an educational pension cost shift is financially wrong and would only serve to shift pension burdens from the state to the status of an unfunded mandate.

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HR 0029
- Oppose Tax on Retirement Income
Sponsor(s): Representative David McSweeney

HR 29 resolves that the Illinois House of Representatives believes that the Illinois Income Tax Act should not be amended to permit taxing retirement income.

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HR 0038
- Oppose Pension Cost Shift to Local Employers
Sponsor(s): Representative Allen Skillicorn

House Amendment #1 to HR 38 resolves that the normal cost of pensions for Illinois educators is the responsibility of the State and that the current budget crisis should not be used as a reason to shift the financial responsibility for State pension costs to local taxpayers.

HR 38 resolves that the normal cost of pensions for Illinois educators is the responsibility of the state and the General Assembly should not use the current budget crisis as a reason to shift its financial responsibility for state pension costs to local taxpayers.

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HR 0076
- Urge Repeal of Federal Government Pension Offset and Windfall Elimination Provision
Sponsor(s): Representative Mary E. Flowers

HR 76 resolves that the Illinois House of Representatives urges the U.S. Congress to introduce and pass legislation that eliminates both the Government Pension Offset and the Windfall Elimination Provision.

HR 76 further resolves that suitable copies of the resolution be delivered to President Donald Trump, U.S. Senate Majority Leader Mitch McConnell, U.S. Senate Minority Leader Chuck Schumer, U.S. Speaker of the House Paul Ryan, U.S. House of Representatives Minority Leader Nancy Pelosi, and all members of the Illinois Congressional Delegation.

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Appropriations

SB 0004
- State Pension Obligation Acceleration Bonds
Sponsor(s): Senator Donne E. Trotter

***As it passed the Senate, SB 4 amends the General Obligation Bond Act to authorize the State to issue $7 billion worth of State General Obligation Restructuring Bonds for the purpose of paying vouchers (bills) incurred by the State prior to July 1, 2017. As it passed the Senate, SB 4 does NOT include any language authorizing the issuance of State Pension Obligation Acceleration Bonds.***

Senate Amendment #1 to SB 4 adds language amending the Illinois State Finance Authority Act. It authorizes the Illinois Finance Authority to issue up to $250 million in State Pension Obligation Acceleration Bonds if the amount appropriated for accelerated pension benefit payments is less than the amount required for those payments. It further creates a continuing appropriation for the payment of principal and interest due on State Pension Obligation Acceleration Bonds. Senate Amendment #2 to SB 4 is identical to Senate Amendment #1 to SB 4. Senate Amendment #3 to SB 4 makes a technical change. Senate Amendment #4 removes Senate Bill 11 of the 100th General Assembly and adds Senate Bill 16 of the 100th General Assembly to the list of bills that must become law in order for the legislation to take effect. Senate Amendment #5 to SB 4 adds an immediate effective date that is not contingent upon the enactment of any other legislation.

As introduced, SB 4 amends the General Obligation Bond Act to authorize the State to issue $7 billion worth of State General Obligation Restructuring Bonds for the purpose of paying vouchers (bills) incurred by the State prior to July 1, 2017.

As introduced, SB 4 takes effect immediately upon becoming law, but does not take effect at all unless Senate Bills 1-3 and 5-13 of the 100th General Assembly also become law.

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SB 0006
- Fiscal Year 2017 and Fiscal Year 2018 Budget
Sponsor(s): Senator Heather A. Steans

SB 6 appropriates $1,461,685,000 for the FY 2018 state contribution to SURS. Of this amount, $1,306,685,000 comes from the General Revenue Fund and $155,000,000 comes from the State Pensions Fund. The certified state contribution to SURS for FY 2018 is $1,753,685,000. Under current law, the remainder of the FY 2018 state contribution to SURS ($292,000,000) will come from the General Revenue Fund under the State Pension Funds Continuing Appropriation Act.

SB 6 also appropriates $1,433,336 for the FY 2018 state contribution to the College Insurance Program (CIP), which provides health insurance to community college retirees. This amount is equal to the certified contribution for FY 2018.

SB 6 takes effect immediately upon becoming law.

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SB 0042
- Fiscal Year 2017 and Fiscal Year 2018 Budget Implementation Act
Sponsor(s): Senator Andy Manar

SB 42 creates the FY 2018 Budget Implementation Act. As it relates to SURS, SB 42 authorizes the use of money in the State Pensions Fund as part of the FY 2018 state contribution to SURS. As it passed the Senate, SB 42 does NOT contain language that eliminates the continuing appropriation for the College Insurance Program upon the conclusion of FY 2017.

SB 42 authorizes the governor to designate a reserve of not more than 5 percent from the amounts appropriated from funds held by the treasurer for fiscal year 2018 to any state agency. (A state agency includes all boards, commissions, agencies, institutions, authorities, colleges, universities and bodies politic and corporate of the state, except for other constitutional officers, the legislative or judicial branch, the office of the Executive Inspector General or the Executive Ethics Commission.) However, the governor cannot designate amounts to be set aside as a reserve from amounts that: (1) have been appropriated for payment of debt service, (2) have been appropriated under a statutory continuing appropriation, (3) are state general funds, (4) are in the Supplemental Low-Income Energy Assistance Fund, or (5) are funds received from federal sources.

SB 42 establishes a state spending limitation for fiscal year 2018 of $37,316,000,000, except for: (1) increases over amounts appropriated in FY 2018 as required by certifications of the state-funded retirement systems; (2) increases over amounts transferred in FY 2018 for principal, interest and premium on bonds issued under the General Obligation Bond Act; or (3) increases over payments made in FY 2018 to cover obligations of the State Employee Group Insurance Act of 1971. If the auditor general reports that state spending has exceeded the limitation for the fiscal year, and if the governor has not been presented with a bill or bills passed by the General Assembly to reduce state spending to a level that does not exceed the state spending limitation for the fiscal year, then the governor may reduce state spending by designating amounts to be set aside as a reserve from the amounts appropriated from the state general funds for all boards, commissions, agencies, institutions, authorities, colleges, universities and bodies politic and corporate of the state (except for other constitutional officers, the legislative and judicial branch, the Office of the Executive Inspector General or the Executive Ethics Commission). Amounts placed in reserves cannot be transferred, obligated, encumbered, expended or otherwise committed unless so authorized by law. Any public act authorizing the use of amounts placed in reserve by the governor is considered state spending, unless such public act authorizes the use of amounts placed in reserves in response to a fiscal emergency declared by the governor.

SB 42 takes effect immediately upon becoming law.

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Senate

SB 0011
- Pension Reform
Sponsor(s): Senator John J. Cullerton

***Senate Bill 11 was called for a vote on Feb. 8, 2017.  It received 18 “yes” votes, 29 “no” votes and 10 “present” votes.  It needed 30 “yes” votes to pass the Senate.***

SB 11 amends the General Assembly Retirement System, State Employees Retirement System, State Universities Retirement System, Teachers Retirement System, Chicago Teachers Retirement System and Judges Retirement System Articles of the Illinois Pension Code.  (The changes to the State Employees Retirement System pertain to state funding and an accelerated pension benefit payment option, and the changes to the Judges Retirement System Article only pertain to state funding.)

Benefit Changes

SB 11 requires each Tier I employee (i.e., each employee who first became a participant of SURS before Jan. 1, 2011, and who is not in the Self-Managed Plan) to elect one of two options:

(1)  To accept a reduced and delayed automatic annual increase in retirement (the lesser of 3 percent or ½ of the increase in CPI-U, non-compounded, beginning the January on or after the earlier of age 67 or five years after retirement); or

(2)  To keep the current Tier I automatic annual increase in retirement (3 percent compounded, beginning the January after retirement).

Each Tier I employee who elects to accept the reduced and delayed automatic annual increase in retirement will: receive a payment of 10 percent of his or her employee contributions made before the effective date of the election (which will not count towards his or her pension); pay reduced employee contributions moving forward (7.2 percent for regular employees and 8.55 percent for public safety employees); and have his or her future earnings increases count towards his or her pension.

Each Tier I employee who elects to keep the current Tier I automatic annual increase in retirement will not have his or her future earnings increases count towards his or her pension.

Generally, the election for Tier I employees will occur between Jan. 1, 2018, and March 31, 2018, and will become effective on July 1, 2018.  A Tier I employee who fails to make an election within the required time period is deemed to have chosen to keep the current Tier I automatic annual increase in retirement.

Retirees, Tier II employees (i.e., employees who first became participants of SURS on or after Jan. 1, 2011), and employees in the Self-Managed Plan are not required to make an election.

SB 11 creates an accelerated pension benefit payment option for the first 10 percent of eligible SURS members each year.  An eligible SURS member is a person who has terminated service; has accrued the necessary service credit for retirement; has not received a retirement annuity from SURS; does not have a QILDRO in effect against him or her under SURS; and is not a participant in the Self-Managed Plan.  By January 1, 2018, and annually thereafter, SURS must calculate the net present value of pension benefits for each eligible person.  SURS must offer each eligible person the opportunity to irrevocably elect to receive an accelerated pension benefit payment equal to 70 percent of the net present value of his or her pension benefits in lieu of receiving any pension benefit from SURS.   The accelerated pension benefit payment must be rolled into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended.  Upon receipt of an accelerated pension benefit payment, credits and creditable service under SURS are terminated.  If the member subsequently returns to active service under SURS, then any subsequent pension benefits are based on the credits and creditable service accrued after the return to active service.  The accelerated pension benefit payment cannot be repaid to SURS and previously terminated credits and creditable service cannot be reinstated under SURS.  A SURS member who receives an accelerated pension benefit payment will still receive any applicable retiree health insurance benefits.

SB 11 requires SURS to provide a voluntary defined contribution plan for up to 5 percent of Tier I employees by July 1, 2018.  Under the defined contribution plan, a Tier 1 employee could elect to stop accruing benefits in the defined benefit plan and start accruing benefits for future service in the defined contribution plan.  Participants in the defined contribution plan pay employee contributions at the same rate as other participants in SURS.  State contributions to the defined contribution plan are made at a uniform rate, no higher than the employer’s normal cost for Tier 1 employees in the defined benefit plan for that year and no lower than 3 percent of earnings. The rate of state contributions to the defined contribution plan is adjusted annually.  The defined contribution plan requires five years of service in order for the participant to vest in state contributions.  Failure to vest in state contributions results in the forfeiture of state contributions and any earnings on the state contributions. The defined contribution plan must provide a variety of options for investments and a variety of options for payouts to retirees and their survivors.

State Funding Changes

SB 11 makes three changes to the funding formula for SURS:  First, it requires the state contribution for fiscal year 2018 through fiscal year 2045 to be based on total payroll (which includes payroll that is not pensionable), but excluding payroll attributable to participants in the voluntary defined contribution plan.  Second, beginning in fiscal year 2018, it requires any increases or decreases attributable to changes in the System’s actuarial and investment assumptions to be phased-in over a five-year period.  Third, it requires the fiscal year 2018 and fiscal year 2019 state contributions to be recertified based on changes made by the legislation.

Employer Funding Changes
 
SB 11 provides that, for academic years beginning on or after July 1, 2018, if a participant’s earnings exceed the amount of his or her earnings with the same employer for the previous academic year by more than the increase in CPI-U for any year during the final rate of earnings period, then the employer must pay the present value of the resulting increase in benefits to SURS.  Earnings increases under contracts or collective bargaining agreements entered into, amended or renewed before the effective date of the legislation are excluded from this provision.  (Current law provides that if a participant’s earnings exceed the amount of his or her earnings with the same employer for the previous academic year by more than 6 percent during the final rate of earnings period, then the employer must pay the present value of the resulting increase in benefits to SURS.)

Additionally, for academic years beginning on or after July 1, 2018, if a participant’s earnings exceed $140,000, then the employer must pay a contribution to SURS for the portion of earnings in excess of that amount. The employer contribution equals the amount of earnings in excess of $140,000 multiplied by the level percentage of payroll needed for SURS to become 90 percent funded by fiscal year 2045.

SB 11 takes effect immediately upon becoming law, but it does not take effect unless Senate Bills 1-10 and 12-13 of the 100th General Assembly also become law.

Status:

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SB 0016
- Pension Reform
Sponsor(s): Senator John J. Cullerton

SB 16 amends the General Provisions, General Assembly Retirement System, State Employees Retirement System, State Universities Retirement System, Teachers Retirement System, Chicago Teachers Pension Fund, and Judges Retirement System articles of the Illinois Pension Code.   

Tier III Hybrid Plan

SB 16 creates a Tier III hybrid plan for individuals who first become participants of SURS on or after six months after the effective date of the legislation (and who are not participants in the Self-Managed Plan).   Individuals who first become participants of SURS on or after six months after the effective date of the legislation (and who are not participants in the Self-Managed Plan) can irrevocably elect to participate in Tier II within 30 days after becoming a participant.

For the defined benefit portion of the Tier III hybrid plan:

  • Final average salary (“FAS”) equals the average monthly (or annual) salary during the period of service in which earnings were the highest during the last 120 months (or 10 years) of service.
  • Pensionable earnings are capped at the federal Social Security Wage Base.
  • Age and service credits for retirement are the normal Social Security retirement age applicable to that member, but no earlier than age 67, with 10 years of service credit.
  • Retirement annuities are calculated using the following formula: 1.25 percent x each year of service credit x FAS.
  • Automatic annual increases are applied beginning one year after retirement, calculated at ½ of the percentage increase in the CPI-W.
  • Survivor benefits are equal to 66 2/3 percent of the member’s retirement annuity on the date of death, or 66 2/3 percent of the member’s earned annuity without an age reduction if the member was not retired on the date of death.
  • Employee contributions are equal to the lower of 6.2 percent of salary or the normal cost of benefits under the defined benefit portion of the plan.

For the defined contribution portion of the Tier III hybrid plan:

  • Employee contributions are equal to a minimum of 4 percent of salary.
  • Employer contributions for employees with at least one year of service with the same employer are equal to a rate set for individual employees, but no higher than 6 percent of salary and no lower than 2 percent of salary.
  • The participant vests in employer contributions when they are paid into his or her account.
  • The plan must provide a variety of investment options (including investments handled by the Illinois State Board of Investment) and a variety of options for payouts to retirees and their survivors.

Future benefits under the Tier III hybrid plan can be modified.  Benefit increases under the Tier III hybrid plan cannot take effect unless they are approved by a resolution or ordinance of the governing body of the unit of local government responsible for those employees.  

The actual employer (university or community college) must contribute an amount equal to the normal cost of the defined benefit portion of the Tier III hybrid plan, minus the employee contributions, plus 2 percent.  SURS must annually certify the amount of unfunded liability accrued in each employer’s account to be paid by the employer so that SURS becomes 90 percent funded by fiscal year 2045.  The actual employer must also contribute an amount equal to the employer portion of the defined contribution portion of the Tier III hybrid plan, as set on an individual employee basis.

Beginning November 1, 2019, SURS must annually determine the amount of the state contribution that would have been required for the next fiscal year if the Tier III hybrid plan had not taken effect, based on the law in effect on May 31, 2019.  Beginning in fiscal year 2021, the an amount equal to the annual savings of the Tier III hybrid plan must be transferred from the General Revenue Fund to the Pension Stabilization Fund for distribution to the state-funded retirement systems until the earlier of fiscal year 2045 or until each system becomes 100 percent funded.

Tier I Offer and Consideration Pension Reform

SB 16 requires each Tier I employee (i.e., each employee who first became a participant of SURS before Jan. 1, 2011, and who is not in the Self-Managed Plan) to elect one of two options:

(1) To accept a reduced and delayed automatic annual increase in retirement (the lesser of 3 percent or ½ of the increase in CPI-U, non-compounded, beginning the January on or after the earlier of age 67 or five years after retirement); or

(2) To keep the current Tier I automatic annual increase in retirement (3 percent compounded, beginning the January after retirement).

Each Tier I employee who elects to accept the reduced and delayed automatic annual increase in retirement will: receive a payment equal to 10 percent of his or her employee contributions made before the effective date of the election (which will not count towards his or her pension); pay reduced employee contributions moving forward (7.2 percent for regular employees and 8.55 percent for public safety employees); and have his or her future earnings increases count towards his or her pension.

Each Tier I employee who elects to keep the current Tier I automatic annual increase in retirement will not have his or her future earnings increases count towards his or her pension.

Generally, the election for Tier I employees will occur between Jan. 1, 2018 and March 31, 2018, and will become effective on July 1, 2018.  A Tier I employee who fails to make an election within the required time period is deemed to have chosen to keep the current Tier I automatic annual increase in retirement.

Retirees, Tier II employees (i.e., employees who first became participants of SURS on or after Jan. 1, 2011), and employees in the Self-Managed Plan are not required to make an election.

Accelerated Pension Benefit Payment Option

SB 16 creates an accelerated pension benefit payment option for the first 10 percent of eligible SURS members each year.  An eligible SURS member is a person who has terminated service; has accrued the necessary service credit for retirement; has not received a retirement annuity from SURS; does not have a QILDRO in effect against him or her under SURS; and is not a participant in the Self-Managed Plan.  By January 1, 2018, and annually thereafter, SURS must calculate the net present value of pension benefits for each eligible person.  SURS must offer each eligible person the opportunity to irrevocably elect to receive an accelerated pension benefit payment equal to 70 percent of the net present value of his or her pension benefits in lieu of receiving any pension benefit from SURS.   The accelerated pension benefit payment must be rolled into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended.  Upon receipt of an accelerated pension benefit payment, credits and creditable service under SURS are terminated.  If the member subsequently returns to active service under SURS, then any subsequent pension benefits are based on the credits and creditable service accrued after the return to active service.  The accelerated pension benefit payment cannot be repaid to SURS and previously terminated credits and creditable service cannot be reinstated under SURS.  A SURS member who receives an accelerated pension benefit payment will still receive any applicable retiree health insurance benefits.

Voluntary Defined Contribution Plan

SB 16 requires SURS to provide a voluntary defined contribution plan for up to 5 percent of Tier I employees by July 1, 2018.  Under the defined contribution plan, a Tier 1 employee could elect to stop accruing benefits in the defined benefit plan and start accruing benefits for future service in the defined contribution plan.  Participants in the defined contribution plan pay employee contributions at the same rate as other participants in SURS.  State contributions to the defined contribution plan are made at a uniform rate, no higher than the employer’s normal cost for Tier 1 employees in the defined benefit plan for that year and no lower than 3 percent of earnings. The rate of state contributions to the defined contribution plan is adjusted annually.  The defined contribution plan requires five years of service in order for the participant to vest in state contributions.  Failure to vest in state contributions results in the forfeiture of state contributions and any earnings on the state contributions. The defined contribution plan must provide a variety of options for investments and a variety of options for payouts to retirees and their survivors.  

State Funding Changes

SB 16 makes three changes to the funding formula for SURS:  First, it requires the state contribution for fiscal year 2018 through fiscal year 2045 to be based on total payroll (which includes payroll that is not pensionable), but excluding payroll attributable to participants in the voluntary defined contribution plan.  Second, beginning in fiscal year 2018, it requires any increases or decreases attributable to changes in the System’s actuarial and investment assumptions to be phased-in over a five-year period.  Third, it requires the fiscal year 2018 and fiscal year 2019 state contributions to be recertified based on changes made by the legislation.

Employer Funding Changes

SB 16 provides that, for academic years beginning on or after July 1, 2018, if a participant’s earnings exceed the amount of his or her earnings with the same employer for the previous academic year by more than the increase in CPI-U for any year during the final rate of earnings period, then the employer must pay the present value of the resulting increase in benefits to SURS.  Earnings increases under contracts or collective bargaining agreements entered into, amended or renewed before the effective date of the legislation are excluded from this provision.  (Current law provides that if a participant’s earnings exceed the amount of his or her earnings with the same employer for the previous academic year by more than 6 percent during the final rate of earnings period, then the employer must pay the present value of the resulting increase in benefits to SURS.)

Additionally, for academic years beginning on or after July 1, 2018, if a participant’s earnings exceed $140,000, then the employer must pay a contribution to SURS for the portion of earnings in excess of that amount.  The employer contribution equals the amount of earnings in excess of $140,000 multiplied by the level percentage of payroll needed for SURS to become 90 percent funded by fiscal year 2045.

Effective Date

SB 16 takes effect immediately upon becoming law.

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SB 0363
- No Pensions for Private Employment
Sponsor(s): Senator Julie Morrison

Senate Amendment #1 to SB 363 amends the General Provisions Article of the Illinois Pension Code. It establishes that, beginning on and after the effective date of the legislation, a person is not eligible to become a member or participant in any pension fund or retirement system with respect to private employment. A person who first becomes a participant or member of any of the following pension funds or retirement systems on or after the effective date of the legislation cannot establish service credit under that fund or system with respect to private employment: the General Assembly Retirement System; Downstate Policemen’s Pension Funds; Downstate Firefighters’ Pension Funds; the Chicago Policemen’s Pension Fund; the Chicago Firefighters’ Pension Fund; the Illinois Municipal Retirement Fund; the Chicago Municipal Pension Fund; the Cook County Pension Fund; the Cook County Forest Preserve District Pension Fund; the Chicago Laborers’ Pension Fund; the Chicago Park District Pension Fund; the Metropolitan Water Reclamation District Pension Fund; the State Employees Retirement System; the State Universities Retirement System; the Teachers Retirement System; the Chicago Teachers Pension Fund and the Judges Retirement System.

SA #1 to SB 363 defines “private employment” as including any employment that is not compensated with funds under the control of a state agency, school district, public institution of higher education, unit of local government, municipal government, or county government or a body politic established under such government and also includes employment by a labor union or an organization representing governments, regardless of whether the organization receives dues from units of government.

SA #1 to SB 363 takes effect in accordance with the Effective Date of Laws Act.

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SB 0654
- SURS Administrative and Technical Changes
Sponsor(s): Senator Daniel Biss

SB 654 amends the State Universities Retirement System Article of the Illinois Pension Code to enhance the efficient administration of SURS.  It has no impact to member benefits.  It makes one substantive change and five technical changes.

Substantive Change:

SB 654 authorizes the System to issue subpoenas in connection with an attempt to obtain information to assist in the collection of sums due to the System, all personal identifying information necessary for the administration of benefits and the determination of the death of a benefit recipient or a potential benefit recipient.  

Technical Changes:

SB 654 codifies the long-standing practice of SURS in which a disability retirement annuity recipient is prevented from backdating his or her retirement annuity prior to the termination of the disability retirement annuity.  

SB 654 codifies the long-standing practice of SURS in which a participant’s disability benefits are discontinued upon failure to provide an earnings verification necessary to determine continued eligibility for disability benefits.

SB 654 codifies the long-standing practice of SURS in which a disability retirement annuity is discontinued upon a recipient’s refusal to submit to a reasonable physical examination or failure to provide an earnings verification necessary to determine continued eligibility for the disability retirement annuity.

SB 654 codifies the long-standing practice of SURS in which the costs incurred in a claim for a disability retirement annuity are allocated in a similar way as the costs incurred in a claim for disability benefits.

SB 654 corrects the definition of “service” to reflect the enactment of Public Act 99-0897.  

SB 654 takes effect immediately upon becoming law.

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SB 0662
- Pension Buyout Act
Sponsor(s): Senator Michael E. Hastings

SB 662 creates the Pension Buyout Act. It applies to eligible retirees of the General Assembly Retirement System, State Employees Retirement System, State Universities Retirement System, Teachers Retirement System and Judges Retirement System.

SB 662 authorizes the Illinois Department of Central Management Services to enter into contracts with approved vendors to provide lump-sum payments to eligible retirees pursuant to a pension buyout option. Approved vendors must provide, at no cost to the eligible retiree, a minimum amount of certified financial planning services before the eligible retiree makes an election pursuant to a pension buyout option.

To be eligible to elect a pension buyout option, a SURS retiree must (1) have elected to receive a retirement annuity; (2) be eligible to receive a retirement annuity; (3) have terminated service; (4) not be subject to a QILDRO under SURS; (4) not be a participant in the Self-Managed Plan; (5) have received at least the minimum amount of financial planning services provided by the approved vendor; and (6) not retire reciprocally with another retirement system or pension fund under the Illinois Pension Code.

An eligible SURS retiree who elects a pension buyout option relinquishes all rights and benefits under the Illinois Pension Code in exchange for a lump-sum payment equal to the present value of his or her retirement annuity under SURS. An eligible SURS retiree may elect a pension buyout option at any time after he or she has elected to retire and has terminated service. SURS retirees who elect to participate in a pension buyout option will still receive any applicable retiree health insurance benefits.

SB 662 takes effect on July 1, 2018.

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SB 0778
- FOIA - No Exemption for Alternative Investment Contracts
Sponsor(s): Senator Daniel Biss

SB 778 amends the Freedom of Information Act (the Act) to establish that the texts of new agreements entered into by a public pension fund or retirement system after January 1, 2018, to invest in a private equity fund, hedge fund, or absolute return fund are not exempt from disclosure under the Act. However, trade secrets contained in the text of such new agreements remain exempt under the Act.

SB 778 takes effect immediately upon becoming law.

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SB 0779
- Alternative Investment Contract and Fee Transparency
Sponsor(s): Senator Daniel Biss

SB 779 amends the General Provisions article of the Illinois Pension Code to require the disclosure of certain information related to the investments of public pension funds, retirement systems, and investment boards in alternative investment funds.

SB 779 defines an “alternative investment fund” as a private equity fund, hedge fund, or absolute return fund.

SB 779 requires all pension funds, retirement systems, and investment boards under the Illinois Pension Code to disclose the following information within 90 days after entering into an agreement to invest in an alternative investment fund: (1) all management fee waiver provisions; (2) all indemnification provisions; (3) all clawback provisions; and (4) the cover page and signature block of the agreement. These disclosures must be filed with the Public Pension Division of the Illinois Department of Insurance and the Illinois Secretary of State. They must also be posted and maintained on the website of the pension fund, retirement system, or investment board.

SB 779 further requires all pension funds, retirement systems, and investment boards under the Illinois Pension Code to require their alternative investment fund external managers and general partners to disclose the following information annually for each alternative investment fund: (1) direct fees and expenses; (2) all other fees and expenses, including carried interest; (3) the amount of all management fee waivers; and (4) the total amount of portfolio holding fees. The disclosure of this information may be satisfied by the completion of the Institutional Limited Partners Association (“ILPA”) template for the relevant category of investment for the applicable year. These disclosures must be filed with the Public Pension Division of the Illinois Department of Insurance and posted and maintained on the website of the public pension fund, retirement system, or investment board.

SB 779 applies to agreements after January 1, 2018.

SB 779 takes effect immediately upon becoming law.

SB 779 is similar to House Amendment #1 to House Bill 163 of the 100th General Assembly.

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