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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1451

Introduced 1/31/2025, by Sen. Robert F. Martwick

SYNOPSIS AS INTRODUCED:

40 ILCS 5/2-124

from Ch. 108 1/2, par. 2-124

Amends the General Assembly Article of the Illinois Pension Code.
Provides that, in any fiscal year in which the total assets of the System
are at least 90% of the total actuarial liabilities of the System, the
minimum contribution by the State for that fiscal year shall be the
System's normal cost for the fiscal year, plus a supplemental payment in
any year in which the total assets of the System are less than 120% of the
total actuarial liabilities. Provides that the supplemental payment is to
be calculated by using a 30-year rolling amortization to target a ratio of
the System's total assets to the System's total actuarial liabilities of
120%. Provides that, if the ratio of the System's total assets to the
System's total actuarial liabilities is 120% or greater, but 130% or less,
the State is only obligated to make a payment of the normal cost for the
fiscal year. Provides that, in any fiscal year in which the ratio of the
System's total assets to the System's total actuarial liabilities exceeds
130%, no payment, either for the normal cost or a supplemental payment,
shall be paid to the System. Makes conforming changes.
LRB104 08657 RPS 18711 b

A BILL FOR

SB1451
LRB104 08657 RPS 18711 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 Illinois Pension Code is amended by
5
changing Section 2-124 as follows:

6

(40 ILCS 5/2-124)

(from Ch. 108 1/2, par. 2-124)
7

Sec. 2-124.
Contributions by State.
8

(a) The State shall make contributions to the System by
9
appropriations of amounts which, together with the
10
contributions of participants, interest earned on investments,
11
and other income will meet the cost of maintaining and
12
administering the System on a 90% funded basis in accordance
13
with actuarial recommendations.
14

(b) The Board shall determine the amount of State
15
contributions required for each fiscal year on the basis of
16
the actuarial tables and other assumptions adopted by the
17
Board and the prescribed rate of interest, using the formula
18
in subsection (c).
19

(c) For State fiscal years 2012 through 2045,
except as
20
otherwise provided in this Section,
the minimum contribution
21
to the System to be made by the State for each fiscal year
22
shall be an amount determined by the System to be sufficient to
23
bring the total assets of the System up to 90% of the total

SB1451
- 2 -
LRB104 08657 RPS 18711 b
1
actuarial liabilities of the System by the end of State fiscal
2
year 2045. In making these determinations, the required State
3
contribution shall be calculated each year as a level
4
percentage of payroll over the years remaining to and
5
including fiscal year 2045 and shall be determined under the
6
projected unit credit actuarial cost method.
7

In any fiscal year in which the total assets of the System
8
are at least 90% of the total actuarial liabilities of the
9
System, the minimum contribution by the State for that fiscal
10
year shall be the System's normal cost for the fiscal year,
11
plus a supplemental payment in any year in which the total
12
assets of the System are less than 120% of the total actuarial
13
liabilities.

14

(i) The supplemental payment is to be calculated by
15

using a 30-year rolling amortization to target a ratio of
16

the System's total assets to the System's total actuarial
17

liabilities of 120%.
18

(ii) If the ratio of the System's total assets to the
19

System's total actuarial liabilities is 120% or greater,
20

but 130% or less, the State is only obligated to make a
21

payment of the normal cost for the fiscal year.
22

(iii) In any fiscal year in which the ratio of the
23

System's total assets to the System's total actuarial
24

liabilities exceeds 130%, no payment, either for the
25

normal cost or a supplemental payment, shall to be paid to
26

the System.

SB1451
- 3 -
LRB104 08657 RPS 18711 b
1

A change in an actuarial or investment assumption that
2
increases or decreases the required State contribution and
3
first applies in State fiscal year 2018 or thereafter shall be
4
implemented in equal annual amounts over a 5-year period
5
beginning in the State fiscal year in which the actuarial
6
change first applies to the required State contribution.
7

A change in an actuarial or investment assumption that
8
increases or decreases the required State contribution and
9
first applied to the State contribution in fiscal year 2014,
10
2015, 2016, or 2017 shall be implemented:
11

(i) as already applied in State fiscal years before
12

2018; and
13

(ii) in the portion of the 5-year period beginning in
14

the State fiscal year in which the actuarial change first
15

applied that occurs in State fiscal year 2018 or
16

thereafter, by calculating the change in equal annual
17

amounts over that 5-year period and then implementing it
18

at the resulting annual rate in each of the remaining
19

fiscal years in that 5-year period.
20

For State fiscal years 1996 through 2005, the State
21
contribution to the System, as a percentage of the applicable
22
employee payroll, shall be increased in equal annual
23
increments so that by State fiscal year 2011, the State is
24
contributing at the rate required under this Section.
25

Notwithstanding any other provision of this Article, the
26
total required State contribution for State fiscal year 2006

SB1451
- 4 -
LRB104 08657 RPS 18711 b
1
is $4,157,000.
2

Notwithstanding any other provision of this Article, the
3
total required State contribution for State fiscal year 2007
4
is $5,220,300.
5

For each of State fiscal years 2008 through 2009, the
6
State contribution to the System, as a percentage of the
7
applicable employee payroll, shall be increased in equal
8
annual increments from the required State contribution for
9
State fiscal year 2007, so that by State fiscal year 2011, the
10
State is contributing at the rate otherwise required under
11
this Section.
12

Notwithstanding any other provision of this Article, the
13
total required State contribution for State fiscal year 2010
14
is $10,454,000 and shall be made from the proceeds of bonds
15
sold in fiscal year 2010 pursuant to Section 7.2 of the General
16
Obligation Bond Act, less (i) the pro rata share of bond sale
17
expenses determined by the System's share of total bond
18
proceeds, (ii) any amounts received from the General Revenue
19
Fund in fiscal year 2010, and (iii) any reduction in bond
20
proceeds due to the issuance of discounted bonds, if
21
applicable.
22

Notwithstanding any other provision of this Article, the
23
total required State contribution for State fiscal year 2011
24
is the amount recertified by the System on or before April 1,
25
2011 pursuant to Section 2-134 and shall be made from the
26
proceeds of bonds sold in fiscal year 2011 pursuant to Section

SB1451
- 5 -
LRB104 08657 RPS 18711 b
1
7.2 of the General Obligation Bond Act, less (i) the pro rata
2
share of bond sale expenses determined by the System's share
3
of total bond proceeds, (ii) any amounts received from the
4
General Revenue Fund in fiscal year 2011, and (iii) any
5
reduction in bond proceeds due to the issuance of discounted
6
bonds, if applicable.
7

Beginning in State fiscal year 2046
and except as
8
otherwise provided in this Section
, the minimum State
9
contribution for each fiscal year shall be the amount needed
10
to maintain the total assets of the System at 90% of the total
11
actuarial liabilities of the System.
12

Amounts received by the System pursuant to Section 25 of
13
the Budget Stabilization Act or Section 8.12 of the State
14
Finance Act in any fiscal year do not reduce and do not
15
constitute payment of any portion of the minimum State
16
contribution required under this Article in that fiscal year.
17
Such amounts shall not reduce, and shall not be included in the
18
calculation of, the required State contributions under this
19
Article in any future year until the System has reached a
20
funding ratio of at least 90%. A reference in this Article to
21
the "required State contribution" or any substantially similar
22
term does not include or apply to any amounts payable to the
23
System under Section 25 of the Budget Stabilization Act.
24

Notwithstanding any other provision of this Section, the
25
required State contribution for State fiscal year 2005 and for
26
fiscal year 2008 and each fiscal year thereafter, as

SB1451
- 6 -
LRB104 08657 RPS 18711 b
1
calculated under this Section and certified under Section
2
2-134, shall not exceed an amount equal to (i) the amount of
3
the required State contribution that would have been
4
calculated under this Section for that fiscal year if the
5
System had not received any payments under subsection (d) of
6
Section 7.2 of the General Obligation Bond Act, minus (ii) the
7
portion of the State's total debt service payments for that
8
fiscal year on the bonds issued in fiscal year 2003 for the
9
purposes of that Section 7.2, as determined and certified by
10
the Comptroller, that is the same as the System's portion of
11
the total moneys distributed under subsection (d) of Section
12
7.2 of the General Obligation Bond Act. In determining this
13
maximum for State fiscal years 2008 through 2010, however, the
14
amount referred to in item (i) shall be increased, as a
15
percentage of the applicable employee payroll, in equal
16
increments calculated from the sum of the required State
17
contribution for State fiscal year 2007 plus the applicable
18
portion of the State's total debt service payments for fiscal
19
year 2007 on the bonds issued in fiscal year 2003 for the
20
purposes of Section 7.2 of the General Obligation Bond Act, so
21
that, by State fiscal year 2011, the State is contributing at
22
the rate otherwise required under this Section.
23

(d) For purposes of determining the required State
24
contribution to the System, the value of the System's assets
25
shall be equal to the actuarial value of the System's assets,
26
which shall be calculated as follows:

SB1451
- 7 -
LRB104 08657 RPS 18711 b
1

As of June 30, 2008, the actuarial value of the System's
2
assets shall be equal to the market value of the assets as of
3
that date. In determining the actuarial value of the System's
4
assets for fiscal years after June 30, 2008, any actuarial
5
gains or losses from investment return incurred in a fiscal
6
year shall be recognized in equal annual amounts over the
7
5-year period following that fiscal year.
8

(e) For purposes of determining the required State
9
contribution to the system for a particular year, the
10
actuarial value of assets shall be assumed to earn a rate of
11
return equal to the system's actuarially assumed rate of
12
return.
13
(Source: P.A. 100-23, eff. 7-6-17.)

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