PEN CD-ACCELERATED BENEFIT

Illinois General Assembly - Full Text of HB5196

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HB5196 - 104th General Assembly

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HB5196 Enrolled
LRB104 20278 RPS 33729 b
1

AN ACT concerning public employee benefits.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The General Obligation Bond Act is amended by
5
changing Sections 2, 2.5, and 7.7 as follows:

6

(30 ILCS 330/2)

(from Ch. 127, par. 652)
7

Sec. 2.
Authorization for Bonds.
The State of Illinois is
8
authorized to issue, sell and provide for the retirement of
9
General Obligation Bonds of the State of Illinois for the
10
categories and specific purposes expressed in Sections 2
11
through 8 of this Act, in the total amount of
$83,664,839,969

12
$82,664,839,969
.
13

The bonds authorized in this Section 2 and in Section 16 of
14
this Act are herein called "Bonds".
15

Of the total amount of Bonds authorized in this Act, up to
16
$2,200,000,000 in aggregate original principal amount may be
17
issued and sold in accordance with the Baccalaureate Savings
18
Act in the form of General Obligation College Savings Bonds.
19

Of the total amount of Bonds authorized in this Act, up to
20
$300,000,000 in aggregate original principal amount may be
21
issued and sold in accordance with the Retirement Savings Act
22
in the form of General Obligation Retirement Savings Bonds.
23

Of the total amount of Bonds authorized in this Act, the

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
additional $10,000,000,000 authorized by Public Act 93-2, the
2
$3,466,000,000 authorized by Public Act 96-43, and the
3
$4,096,348,300 authorized by Public Act 96-1497 shall be used
4
solely as provided in Section 7.2.
5

Of the total amount of Bonds authorized in this Act, the
6
additional $6,000,000,000 authorized by Public Act 100-23
7
shall be used solely as provided in Section 7.6 and shall be
8
issued by December 31, 2017.
9

Of the total amount of Bonds authorized in this Act,
10
$3,200,000,000

$2,200,000,000
of the additional amount
11
authorized by Public Act 100-587, Public Act 102-718,
Public
12
Act 104-8, and this amendatory Act of the 104th General
13
Assembly

and this amendatory Act of the 104th General Assembly

14
shall be used solely as provided in Section 7.7.
15

The issuance and sale of Bonds pursuant to the General
16
Obligation Bond Act is an economical and efficient method of
17
financing the long-term capital needs of the State. This Act
18
will permit the issuance of a multi-purpose General Obligation
19
Bond with uniform terms and features. This will not only lower
20
the cost of registration but also reduce the overall cost of
21
issuing debt by improving the marketability of Illinois
22
General Obligation Bonds.
23
(Source: P.A. 103-7, eff. 7-1-23; 103-591, eff. 7-1-24; 104-8,
24
eff. 1-1-26
.)

25

(30 ILCS 330/2.5)

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1

Sec. 2.5.
Limitation on issuance of Bonds.
2

(a) Except as provided in subsection (b), no Bonds may be
3
issued if, after the issuance, in the next State fiscal year
4
after the issuance of the Bonds, the amount of debt service
5
(including principal, whether payable at maturity or pursuant
6
to mandatory sinking fund installments, and interest) on all
7
then-outstanding Bonds, other than (i) Bonds authorized by
8
Public Act 100-23, (ii) Bonds
authorized

issued
by Public Act
9
96-43, (iii) Bonds authorized by Public Act 96-1497, (iv)
10
Bonds authorized by Public Act 100-587,
and
(v) Bonds
11
authorized by
Public Act 102-718

this amendatory Act of the
12
102nd General Assembly
,
(vi) Bonds authorized by the changes
13
made to Section 7.7 by Public Act 104-8, and (vii) Bonds
14
authorized by this amendatory Act of the 104th General
15
Assembly,
would exceed 7% of the aggregate appropriations from
16
the general funds, the State Construction Account Fund, and
17
the Road Fund for the fiscal year immediately prior to the
18
fiscal year of the issuance. For the purposes of this
19
subsection (a), "general funds" has the same meaning as
20
ascribed to that term under Section 50-40 of the State Budget
21
Law of the Civil Administrative Code of Illinois.
22

(b) If the Comptroller and Treasurer each consent in
23
writing, Bonds may be issued even if the issuance does not
24
comply with subsection (a). In addition, $2,000,000,000 in
25
Bonds for the purposes set forth in Sections 3, 4, 5, 6, and 7,
26
and $2,000,000,000 in Refunding Bonds under Section 16, may be

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
issued during State fiscal year 2017 without complying with
2
subsection (a). In addition, $2,000,000,000 in Bonds for the
3
purposes set forth in Sections 3, 4, 5, 6, and 7, and
4
$2,000,000,000 in Refunding Bonds under Section 16, may be
5
issued during State fiscal year 2018 without complying with
6
subsection (a).
7
(Source: P.A. 101-30, eff. 6-28-19; 102-718, eff. 5-5-22.)

8

(30 ILCS 330/7.7)
9

Sec. 7.7.
State Pension Obligation Acceleration Bonds.
10

(a) As used in this Act, "State Pension Obligation
11
Acceleration Bonds" means Bonds authorized by Public Act
12
100-587, Public Act 102-718,
Public Act 104-8, and this
13
amendatory Act of the 104th General Assembly

and this
14
amendatory Act of the 104th General Assembly
and used for the
15
purpose of making accelerated pension benefit payments under
16
Articles 14, 15, and 16 of the Illinois Pension Code.
17

(b) State Pension Obligation Acceleration Bonds in the
18
amount of
$3,200,000,000

$2,200,000,000
are hereby authorized
19
to be used for the purpose of making accelerated pension
20
benefit payments under Articles 14, 15, and 16 of the Illinois
21
Pension Code.
22

(c) The proceeds of State Pension Obligation Acceleration
23
Bonds authorized in subsection (b) of this Section, less the
24
amounts authorized in the Bond Sale Order to be directly paid
25
out for bond sale expenses under Section 8, shall be deposited

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
directly into the State Pension Obligation Acceleration Bond
2
Fund, and the Comptroller and the Treasurer shall, as soon as
3
practical, make accelerated pension benefit payments under
4
Articles 14, 15, and 16 of the Illinois Pension Code.
5

(d) There is created the State Pension Obligation
6
Acceleration Bond Fund as a special fund in the State
7
Treasury. Funds deposited in the State Pension Obligation
8
Acceleration Bond Fund may only be used for the purpose of
9
making accelerated pension benefit payments under Articles 14,
10
15, and 16 of the Illinois Pension Code or for the payment of
11
principal and interest due on State Pension Obligation
12
Acceleration Bonds. This subsection shall constitute an
13
irrevocable and continuing appropriation of all amounts
14
necessary for such purposes.
15
(Source: P.A. 104-8, eff. 1-1-26
.)

16

Section 10.
The Illinois Pension Code is amended by
17
changing Sections 14-147.5, 14-147.6, 15-185.5, 15-185.6,
18
16-190.5, and 16-190.6 as follows:

19

(40 ILCS 5/14-147.5)
20

Sec. 14-147.5.
Accelerated pension benefit payment in lieu
21
of any pension benefit.
22

(a) As used in this Section:
23

"Eligible person" means a person who:
24

(1) has terminated service;

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1

(2) has accrued sufficient service credit to be
2

eligible to receive a retirement annuity under this
3

Article;
4

(3) has not received any retirement annuity under this
5

Article; and
6

(4) has not made the election under Section 14-147.6.
7

"Pension benefit" means the benefits under this Article,
8
or Article 1 as it relates to those benefits, including any
9
anticipated annual increases, that an eligible person is
10
entitled to upon attainment of the applicable retirement age.
11
"Pension benefit" also includes applicable survivor's or
12
disability benefits.
13

(b) As soon as practical after June 4, 2018 (the effective
14
date of Public Act 100-587), the System shall calculate, using
15
actuarial tables and other assumptions adopted by the Board,
16
the present value of pension benefits for each eligible person
17
who requests that information and shall offer each eligible
18
person the opportunity to irrevocably elect to receive an
19
amount determined by the System to be equal to 60% of the
20
present value of his or her pension benefits in lieu of
21
receiving any pension benefit. The offer shall specify the
22
dollar amount that the eligible person will receive if he or
23
she so elects and shall expire when a subsequent offer is made
24
to an eligible person. An eligible person is limited to one
25
calculation and offer per calendar year. The System shall make
26
a good faith effort to contact every eligible person to notify

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
him or her of the election.
2

Until June 30,
2028

2026
, an eligible person may
3
irrevocably elect to receive an accelerated pension benefit
4
payment in the amount that the System offers under this
5
subsection in lieu of receiving any pension benefit. A person
6
who elects to receive an accelerated pension benefit payment
7
under this Section may not elect to proceed under the
8
Retirement Systems Reciprocal Act with respect to service
9
under this Article.
10

(c) A person's creditable service under this Article shall
11
be terminated upon the person's receipt of an accelerated
12
pension benefit payment under this Section, and no other
13
benefit shall be paid under this Article based on the
14
terminated creditable service, including any retirement,
15
survivor, or other benefit; except that to the extent that
16
participation, benefits, or premiums under the State Employees
17
Group Insurance Act of 1971 are based on the amount of service
18
credit, the terminated service credit shall be used for that
19
purpose.
20

(d) If a person who has received an accelerated pension
21
benefit payment under this Section returns to active service
22
under this Article, then:
23

(1) Any benefits under the System earned as a result
24

of that return to active service shall be based solely on
25

the person's creditable service arising from the return to
26

active service.

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1

(2) The accelerated pension benefit payment may not be
2

repaid to the System, and the terminated creditable
3

service may not under any circumstances be reinstated.
4

(e) As a condition of receiving an accelerated pension
5
benefit payment, the accelerated pension benefit payment must
6
be transferred into a tax qualified retirement plan or
7
account. The accelerated pension benefit payment under this
8
Section may be subject to withholding or payment of applicable
9
taxes, but to the extent permitted by federal law, a person who
10
receives an accelerated pension benefit payment under this
11
Section must direct the System to pay all of that payment as a
12
rollover into another retirement plan or account qualified
13
under the Internal Revenue Code of 1986, as amended.
14

(f) Upon receipt of a member's irrevocable election to
15
receive an accelerated pension benefit payment under this
16
Section, the System shall submit a voucher to the Comptroller
17
for payment of the member's accelerated pension benefit
18
payment. The Comptroller shall transfer the amount of the
19
voucher from the State Pension Obligation Acceleration Bond
20
Fund to the System, and the System shall transfer the amount
21
into the member's eligible retirement plan or qualified
22
account.
23

(g) The Board shall adopt any rules, including emergency
24
rules, necessary to implement this Section.
25

(h) No provision of this Section shall be interpreted in a
26
way that would cause the applicable System to cease to be a

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
qualified plan under the Internal Revenue Code of 1986.
2
(Source: P.A. 101-10, eff. 6-5-19; 102-718, eff. 5-5-22.)

3

(40 ILCS 5/14-147.6)
4

Sec. 14-147.6.
Accelerated pension benefit payment for a
5
reduction in annual retirement annuity and survivor's annuity
6
increases.
7

(a) As used in this Section:
8

"Accelerated pension benefit payment" means a lump sum
9
payment equal to 70% of the difference of the present value of
10
the automatic annual increases to a Tier 1 member's retirement
11
annuity and survivor's annuity using the formula applicable to
12
the Tier 1 member and the present value of the automatic annual
13
increases to the Tier 1 member's retirement annuity using the
14
formula provided under subsection (b-5) and survivor's annuity
15
using the formula provided under subsection (b-6).
16

"Eligible person" means a person who:
17

(1) is a Tier 1 member;
18

(2) has submitted an application for a retirement
19

annuity under this Article;
20

(3) meets the age and service requirements for
21

receiving a retirement annuity under this Article;
22

(4) has not received any retirement annuity under this
23

Article; and
24

(5) has not made the election under Section 14-147.5.
25

(b) As soon as practical after June 4, 2018 (the effective

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
date of Public Act 100-587) and until June 30,
2028

2026
, the
2
System shall implement an accelerated pension benefit payment
3
option for eligible persons. Upon the request of an eligible
4
person, the System shall calculate, using actuarial tables and
5
other assumptions adopted by the Board, an accelerated pension
6
benefit payment amount and shall offer that eligible person
7
the opportunity to irrevocably elect to have his or her
8
automatic annual increases in retirement annuity calculated in
9
accordance with the formula provided under subsection (b-5)
10
and any increases in survivor's annuity payable to his or her
11
survivor's annuity beneficiary calculated in accordance with
12
the formula provided under subsection (b-6) in exchange for
13
the accelerated pension benefit payment. The election under
14
this subsection must be made before the eligible person
15
receives the first payment of a retirement annuity otherwise
16
payable under this Article.
17

(b-5) Notwithstanding any other provision of law, the
18
retirement annuity of a person who made the election under
19
subsection (b) shall be subject to annual increases on the
20
January 1 occurring either on or after the attainment of age 67
21
or the first anniversary of the annuity start date, whichever
22
is later. Each annual increase shall be calculated at 1.5% of
23
the originally granted retirement annuity.
24

(b-6) Notwithstanding any other provision of law, a
25
survivor's annuity payable to a survivor's annuity beneficiary
26
of a person who made the election under subsection (b) shall be

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
subject to annual increases on the January 1 occurring on or
2
after the first anniversary of the commencement of the
3
annuity. Each annual increase shall be calculated at 1.5% of
4
the originally granted survivor's annuity.
5

(c) If a person who has received an accelerated pension
6
benefit payment returns to active service under this Article,
7
then:
8

(1) the calculation of any future automatic annual
9

increase in retirement annuity shall be calculated in
10

accordance with the formula provided under subsection
11

(b-5); and
12

(2) the accelerated pension benefit payment may not be
13

repaid to the System.
14

(d) As a condition of receiving an accelerated pension
15
benefit payment, the accelerated pension benefit payment must
16
be transferred into a tax qualified retirement plan or
17
account. The accelerated pension benefit payment under this
18
Section may be subject to withholding or payment of applicable
19
taxes, but to the extent permitted by federal law, a person who
20
receives an accelerated pension benefit payment under this
21
Section must direct the System to pay all of that payment as a
22
rollover into another retirement plan or account qualified
23
under the Internal Revenue Code of 1986, as amended.
24

(d-5) Upon receipt of a member's irrevocable election to
25
receive an accelerated pension benefit payment under this
26
Section, the System shall submit a voucher to the Comptroller

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
for payment of the member's accelerated pension benefit
2
payment. The Comptroller shall transfer the amount of the
3
voucher to the System, and the System shall transfer the
4
amount into a member's eligible retirement plan or qualified
5
account.
6

(e) The Board shall adopt any rules, including emergency
7
rules, necessary to implement this Section.
8

(f) No provision of this Section shall be interpreted in a
9
way that would cause the applicable System to cease to be a
10
qualified plan under the Internal Revenue Code of 1986.
11
(Source: P.A. 101-10, eff. 6-5-19; 102-718, eff. 5-5-22.)

12

(40 ILCS 5/15-185.5)
13

Sec. 15-185.5.
Accelerated pension benefit payment in lieu
14
of any pension benefit.
15

(a) As used in this Section:
16

"Eligible person" means a person who:
17

(1) has terminated service;
18

(2) has accrued sufficient service credit to be
19

eligible to receive a retirement annuity under this
20

Article;
21

(3) has not received any retirement annuity under this
22

Article;
23

(4) has not made the election under Section 15-185.6;
24

and
25

(5) is not a participant in the self-managed plan

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1

under Section 15-158.2.
2

"Implementation date" means the earliest date upon which
3
the Board authorizes eligible persons to begin irrevocably
4
electing the accelerated pension benefit payment option under
5
this Section. The Board shall endeavor to make such
6
participation available as soon as possible after June 4, 2018
7
(the effective date of Public Act 100-587) and shall establish
8
an implementation date by Board resolution.
9

"Pension benefit" means the benefits under this Article,
10
or Article 1 as it relates to those benefits, including any
11
anticipated annual increases, that an eligible person is
12
entitled to upon attainment of the applicable retirement age.
13
"Pension benefit" also includes applicable survivors benefits,
14
disability benefits, or disability retirement annuity
15
benefits.
16

(b) Beginning on the implementation date, the System shall
17
offer each eligible person the opportunity to irrevocably
18
elect to receive an amount determined by the System to be equal
19
to 60% of the present value of his or her pension benefits in
20
lieu of receiving any pension benefit. The System shall
21
calculate, using actuarial tables and other assumptions
22
adopted by the Board, the present value of pension benefits
23
for each eligible person upon his or her request in writing to
24
the System. The System shall not perform more than one
25
calculation per eligible member in a State fiscal year. The
26
offer shall specify the dollar amount that the eligible person

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
will receive if he or she so elects and shall expire when a
2
subsequent offer is made to an eligible person. The System
3
shall make a good faith effort to contact every eligible
4
person to notify him or her of the election.
5

Beginning on the implementation date and until June 30,
6
2028

2026
, an eligible person may irrevocably elect to receive
7
an accelerated pension benefit payment in the amount that the
8
System offers under this subsection in lieu of receiving any
9
pension benefit. A person who elects to receive an accelerated
10
pension benefit payment under this Section may not elect to
11
proceed under the Retirement Systems Reciprocal Act with
12
respect to service under this Article.
13

(c) Upon payment of an accelerated pension benefit payment
14
under this Section, the person forfeits all accrued rights and
15
credits in the System and no other benefit shall be paid under
16
this Article based on those forfeited rights and credits,
17
including any retirement, survivor, or other benefit; except
18
that to the extent that participation, benefits, or premiums
19
under the State Employees Group Insurance Act of 1971 are
20
based on the amount of service credit, the terminated service
21
credit shall be used for that purpose.
22

(d) If a person who has received an accelerated pension
23
benefit payment under this Section returns to participation
24
under this Article, any benefits under the System earned as a
25
result of that return to participation shall be based solely
26
on the person's credits and creditable service arising from

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
the return to participation. Upon return to participation, the
2
person shall be considered a new employee subject to all the
3
qualifying conditions for participation and eligibility for
4
benefits applicable to new employees.
5

(d-5) The accelerated pension benefit payment may not be
6
repaid to the System, and the forfeited rights and credits may
7
not under any circumstances be reinstated.
8

(e) As a condition of receiving an accelerated pension
9
benefit payment, the accelerated pension benefit payment must
10
be deposited into a tax qualified retirement plan or account
11
identified by the eligible person at the time of the election.
12
The accelerated pension benefit payment under this Section may
13
be subject to withholding or payment of applicable taxes, but
14
to the extent permitted by federal law, a person who receives
15
an accelerated pension benefit payment under this Section must
16
direct the System to pay all of that payment as a rollover into
17
another retirement plan or account qualified under the
18
Internal Revenue Code of 1986, as amended.
19

(f) The System shall submit vouchers to the State
20
Comptroller for the payment of accelerated pension benefit
21
payments under this Section. The State Comptroller shall pay
22
the amounts of the vouchers from the State Pension Obligation
23
Acceleration Bond Fund to the System, and the System shall
24
deposit the amounts into the applicable tax qualified plans or
25
accounts.
26

(g) The Board shall adopt any rules, including emergency

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
rules, necessary to implement this Section.
2

(h) No provision of this Section shall be interpreted in a
3
way that would cause the System to cease to be a qualified plan
4
under the Internal Revenue Code of 1986.
5
(Source: P.A. 101-10, eff. 6-5-19; 102-718, eff. 5-5-22.)

6

(40 ILCS 5/15-185.6)
7

Sec. 15-185.6.
Accelerated pension benefit payment for a
8
reduction in an annual increase to a retirement annuity and an
9
annuity benefit payable as a result of death.
10

(a) As used in this Section:
11

"Accelerated pension benefit payment" means a lump sum
12
payment equal to 70% of the difference of: (i) the present
13
value of the automatic annual increases to a Tier 1 member's
14
retirement annuity, including any increases to any annuity
15
benefit payable as a result of his or her death, using the
16
formula applicable to the Tier 1 member; and (ii) the present
17
value of the automatic annual increases to the Tier 1 member's
18
retirement annuity, including any increases to any annuity
19
benefit payable as a result of his or her death, using the
20
formula provided under subsection (b-5).
21

"Eligible person" means a person who:
22

(1) is a Tier 1 member;
23

(2) has submitted an application for a retirement
24

annuity under this Article;
25

(3) meets the age and service requirements for

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1

receiving a retirement annuity under this Article;
2

(4) has not received any retirement annuity under this
3

Article;
4

(5) has not made the election under Section 15-185.5;
5

and
6

(6) is not a participant in the self-managed plan
7

under Section 15-158.2.
8

"Implementation date" means the earliest date upon which
9
the Board authorizes eligible persons to begin irrevocably
10
electing the accelerated pension benefit payment option under
11
this Section. The Board shall endeavor to make such
12
participation available as soon as possible after June 4, 2018
13
(the effective date of Public Act 100-587) and shall establish
14
an implementation date by Board resolution.
15

(b) Beginning on the implementation date and until June
16
30,
2028

2026
, the System shall implement an accelerated
17
pension benefit payment option for eligible persons. The
18
System shall calculate, using actuarial tables and other
19
assumptions adopted by the Board, an accelerated pension
20
benefit payment amount for an eligible person upon his or her
21
request in writing to the System and shall offer that eligible
22
person the opportunity to irrevocably elect to have his or her
23
automatic annual increases in retirement annuity and any
24
annuity benefit payable as a result of his or her death
25
calculated in accordance with the formula provided in
26
subsection (b-5) in exchange for the accelerated pension

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1
benefit payment. The System shall not perform more than one
2
calculation under this Section per eligible person in a State
3
fiscal year. The election under this subsection must be made
4
before any retirement annuity is paid to the eligible person,
5
and the eligible survivor, spouse, or contingent annuitant, as
6
applicable, must consent to the election under this
7
subsection.
8

(b-5) Notwithstanding any other provision of law, the
9
retirement annuity of a person who made the election under
10
subsection (b) shall be increased annually beginning on the
11
January 1 occurring either on or after the attainment of age 67
12
or the first anniversary of the annuity start date, whichever
13
is later, and any annuity benefit payable as a result of his or
14
her death shall be increased annually beginning on: (1) the
15
January 1 occurring on or after the commencement of the
16
annuity if the deceased Tier 1 member died while receiving a
17
retirement annuity; or (2) the January 1 occurring after the
18
first anniversary of the commencement of the benefit. Each
19
annual increase shall be calculated at 1.5% of the originally
20
granted retirement annuity or annuity benefit payable as a
21
result of the Tier 1 member's death.
22

(c) If an annuitant who has received an accelerated
23
pension benefit payment returns to participation under this
24
Article, the calculation of any future automatic annual
25
increase in retirement annuity under subsection (c) of Section
26
15-139 shall be calculated in accordance with the formula

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1
provided in subsection (b-5).
2

(c-5) The accelerated pension benefit payment may not be
3
repaid to the System.
4

(d) As a condition of receiving an accelerated pension
5
benefit payment, the accelerated pension benefit payment must
6
be deposited into a tax qualified retirement plan or account
7
identified by the eligible person at the time of election. The
8
accelerated pension benefit payment under this Section may be
9
subject to withholding or payment of applicable taxes, but to
10
the extent permitted by federal law, a person who receives an
11
accelerated pension benefit payment under this Section must
12
direct the System to pay all of that payment as a rollover into
13
another retirement plan or account qualified under the
14
Internal Revenue Code of 1986, as amended.
15

(d-5) The System shall submit vouchers to the State
16
Comptroller for the payment of accelerated pension benefit
17
payments under this Section. The State Comptroller shall pay
18
the amounts of the vouchers from the State Pension Obligation
19
Acceleration Bond Fund to the System, and the System shall
20
deposit the amounts into the applicable tax qualified plans or
21
accounts.
22

(e) The Board shall adopt any rules, including emergency
23
rules, necessary to implement this Section.
24

(f) No provision of this Section shall be interpreted in a
25
way that would cause the System to cease to be a qualified plan
26
under the Internal Revenue Code of 1986.

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1
(Source: P.A. 101-10, eff. 6-5-19; 102-718, eff. 5-5-22.)

2

(40 ILCS 5/16-190.5)
3

Sec. 16-190.5.
Accelerated pension benefit payment in lieu
4
of any pension benefit.
5

(a) As used in this Section:
6

"Eligible person" means a person who:
7

(1) has terminated service;
8

(2) has accrued sufficient service credit to be
9

eligible to receive a retirement annuity under this
10

Article;
11

(3) has not received any retirement annuity under this
12

Article; and
13

(4) has not made the election under Section 16-190.6.
14

"Pension benefit" means the benefits under this Article,
15
or Article 1 as it relates to those benefits, including any
16
anticipated annual increases, that an eligible person is
17
entitled to upon attainment of the applicable retirement age.
18
"Pension benefit" also includes applicable survivor's or
19
disability benefits.
20

(b) As soon as practical after June 4, 2018 (the effective
21
date of Public Act 100-587), the System shall calculate, using
22
actuarial tables and other assumptions adopted by the Board,
23
the present value of pension benefits for each eligible person
24
who requests that information and shall offer each eligible
25
person the opportunity to irrevocably elect to receive an

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1
amount determined by the System to be equal to 60% of the
2
present value of his or her pension benefits in lieu of
3
receiving any pension benefit. The offer shall specify the
4
dollar amount that the eligible person will receive if he or
5
she so elects and shall expire when a subsequent offer is made
6
to an eligible person. The System shall make a good faith
7
effort to contact every eligible person to notify him or her of
8
the election.
9

Until June 30,
2028

2026
, an eligible person may
10
irrevocably elect to receive an accelerated pension benefit
11
payment in the amount that the System offers under this
12
subsection in lieu of receiving any pension benefit. A person
13
who elects to receive an accelerated pension benefit payment
14
under this Section may not elect to proceed under the
15
Retirement Systems Reciprocal Act with respect to service
16
under this Article.
17

(c) A person's creditable service under this Article shall
18
be terminated upon the person's receipt of an accelerated
19
pension benefit payment under this Section, and no other
20
benefit shall be paid under this Article based on the
21
terminated creditable service, including any retirement,
22
survivor, or other benefit; except that to the extent that
23
participation, benefits, or premiums under the State Employees
24
Group Insurance Act of 1971 are based on the amount of service
25
credit, the terminated service credit shall be used for that
26
purpose.

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LRB104 20278 RPS 33729 b
1

(d) If a person who has received an accelerated pension
2
benefit payment under this Section returns to active service
3
under this Article, then:
4

(1) Any benefits under the System earned as a result
5

of that return to active service shall be based solely on
6

the person's creditable service arising from the return to
7

active service.
8

(2) The accelerated pension benefit payment may not be
9

repaid to the System, and the terminated creditable
10

service may not under any circumstances be reinstated.
11

(e) As a condition of receiving an accelerated pension
12
benefit payment, the accelerated pension benefit payment must
13
be transferred into a tax qualified retirement plan or
14
account. The accelerated pension benefit payment under this
15
Section may be subject to withholding or payment of applicable
16
taxes, but to the extent permitted by federal law, a person who
17
receives an accelerated pension benefit payment under this
18
Section must direct the System to pay all of that payment as a
19
rollover into another retirement plan or account qualified
20
under the Internal Revenue Code of 1986, as amended.
21

(f) Upon receipt of a member's irrevocable election to
22
receive an accelerated pension benefit payment under this
23
Section, the System shall submit a voucher to the Comptroller
24
for payment of the member's accelerated pension benefit
25
payment. The Comptroller shall transfer the amount of the
26
voucher from the State Pension Obligation Acceleration Bond

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1
Fund to the System, and the System shall transfer the amount
2
into the member's eligible retirement plan or qualified
3
account.
4

(g) The Board shall adopt any rules, including emergency
5
rules, necessary to implement this Section.
6

(h) No provision of Public Act 100-587 shall be
7
interpreted in a way that would cause the applicable System to
8
cease to be a qualified plan under the Internal Revenue Code of
9
1986.
10
(Source: P.A. 101-10, eff. 6-5-19; 102-558, eff. 8-20-21;
11
102-718, eff. 5-5-22.)

12

(40 ILCS 5/16-190.6)
13

Sec. 16-190.6.
Accelerated pension benefit payment for a
14
reduction in annual retirement annuity and survivor's annuity
15
increases.
16

(a) As used in this Section:
17

"Accelerated pension benefit payment" means a lump sum
18
payment equal to 70% of the difference of the present value of
19
the automatic annual increases to a Tier 1 member's retirement
20
annuity and survivor's annuity using the formula applicable to
21
the Tier 1 member and the present value of the automatic annual
22
increases to the Tier 1 member's retirement annuity using the
23
formula provided under subsection (b-5) and the survivor's
24
annuity using the formula provided under subsection (b-6).
25

"Eligible person" means a person who:

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1

(1) is a Tier 1 member;
2

(2) has submitted an application for a retirement
3

annuity under this Article;
4

(3) meets the age and service requirements for
5

receiving a retirement annuity under this Article;
6

(4) has not received any retirement annuity under this
7

Article; and
8

(5) has not made the election under Section 16-190.5.
9

(b) As soon as practical after June 4, 2018
(
the effective
10
date of Public Act 100-587) and until June 30,
2028

2026
, the
11
System shall implement an accelerated pension benefit payment
12
option for eligible persons. Upon the request of an eligible
13
person, the System shall calculate, using actuarial tables and
14
other assumptions adopted by the Board, an accelerated pension
15
benefit payment amount and shall offer that eligible person
16
the opportunity to irrevocably elect to have his or her
17
automatic annual increases in retirement annuity calculated in
18
accordance with the formula provided under subsection (b-5)
19
and any increases in survivor's annuity payable to his or her
20
survivor's annuity beneficiary calculated in accordance with
21
the formula provided under subsection (b-6) in exchange for
22
the accelerated pension benefit payment. The election under
23
this subsection must be made before the eligible person
24
receives the first payment of a retirement annuity otherwise
25
payable under this Article.
26

(b-5) Notwithstanding any other provision of law, the

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LRB104 20278 RPS 33729 b
1
retirement annuity of a person who made the election under
2
subsection (b) shall be subject to annual increases on the
3
January 1 occurring either on or after the attainment of age 67
4
or the first anniversary of the annuity start date, whichever
5
is later. Each annual increase shall be calculated at 1.5% of
6
the originally granted retirement annuity.
7

(b-6) Notwithstanding any other provision of law, a
8
survivor's annuity payable to a survivor's annuity beneficiary
9
of a person who made the election under subsection (b) shall be
10
subject to annual increases on the January 1 occurring on or
11
after the first anniversary of the commencement of the
12
annuity. Each annual increase shall be calculated at 1.5% of
13
the originally granted survivor's annuity.
14

(c) If a person who has received an accelerated pension
15
benefit payment returns to active service under this Article,
16
then:
17

(1) the calculation of any future automatic annual
18

increase in retirement annuity shall be calculated in
19

accordance with the formula provided in subsection (b-5);
20

and
21

(2) the accelerated pension benefit payment may not be
22

repaid to the System.
23

(d) As a condition of receiving an accelerated pension
24
benefit payment, the accelerated pension benefit payment must
25
be transferred into a tax qualified retirement plan or
26
account. The accelerated pension benefit payment under this

HB5196 Enrolled
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LRB104 20278 RPS 33729 b
1
Section may be subject to withholding or payment of applicable
2
taxes, but to the extent permitted by federal law, a person who
3
receives an accelerated pension benefit payment under this
4
Section must direct the System to pay all of that payment as a
5
rollover into another retirement plan or account qualified
6
under the Internal Revenue Code of 1986, as amended.
7

(d-5) Upon receipt of a member's irrevocable election to
8
receive an accelerated pension benefit payment under this
9
Section, the System shall submit a voucher to the Comptroller
10
for payment of the member's accelerated pension benefit
11
payment. The Comptroller shall transfer the amount of the
12
voucher from the State Pension Obligation Acceleration Bond
13
Fund to the System, and the System shall transfer the amount
14
into the member's eligible retirement plan or qualified
15
account.
16

(e) The Board shall adopt any rules, including emergency
17
rules, necessary to implement this Section.
18

(f) No provision of this Section shall be interpreted in a
19
way that would cause the applicable System to cease to be a
20
qualified plan under the Internal Revenue Code of 1986.
21
(Source: P.A. 101-10, eff. 6-5-19; 102-718, eff. 5-5-22;
22
revised 6-26-25.)

23

Section 99.
Effective date.
This Act takes effect upon
24
becoming law.

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