PEN CD-ACCEL BENEFIT PAYMENT

Illinois General Assembly - Full Text of SB3404

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SB3404 - 104th General Assembly

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SB3404 Engrossed
LRB104 18864 RPS 32309 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 adding
5
Sections 3-144.3, 3-144.4, 4-138.15, 4-138.16, 5-218.5,
6
5-218.6, 6-213.5, 6-213.6, 8-244.5, 8-244.6, 9-134.6, 9-134.7,
7
10-104.6, 10-104.7, 11-223.5, 11-223.6, 12-133.8, 12-133.9,
8
17-120.5, and 17-120.6 as follows:

9

(40 ILCS 5/3-144.3 new)
10

Sec. 3-144.3.
Accelerated pension benefit payment in lieu
11
of any pension benefit.
12

(a) As used in this Section:
13

"Eligible person" means a person who:
14

(1) has terminated service;
15

(2) has accrued sufficient service credit to be
16

eligible to receive a retirement pension under this
17

Article;
18

(3) has not received any retirement pension under this
19

Article; and
20

(4) has not made the election under Section 3-144.4.
21

"Pension benefit" means the benefits under this Article,
22
or Article 1 as it relates to those benefits, including any
23
anticipated annual increases, that an eligible person is

SB3404 Engrossed
- 2 -
LRB104 18864 RPS 32309 b
1
entitled to upon attainment of the applicable retirement age.
2
"Pension benefit" also includes applicable survivor's or
3
disability benefits.
4

(b) If an employer has elected to provide funding for an
5
accelerated pension benefit program, then as soon as practical
6
after June 30, 2026 or as soon as practical after the employer
7
has made that election, whichever is later, the fund shall
8
calculate, using actuarial tables and other assumptions
9
adopted by the Board, the present value of pension benefits
10
for each eligible person who requests that information and
11
shall offer each eligible person the opportunity to
12
irrevocably elect to receive an amount determined by the fund
13
to be equal to 60% of the present value of his or her pension
14
benefits in lieu of receiving any pension benefit. The offer
15
shall specify the dollar amount that the eligible person will
16
receive if he or she so elects and shall expire when a
17
subsequent offer is made to an eligible person. An eligible
18
person is limited to one calculation and offer per fiscal
19
year. The fund shall make a good faith effort to contact every
20
eligible person to notify him or her of the election.
21

Until June 30, 2028, an eligible person may irrevocably
22
elect to receive an accelerated pension benefit payment in the
23
amount that the fund offers under this subsection in lieu of
24
receiving any pension benefit.
25

(c) A person's creditable service under this Article shall
26
be terminated upon the person's receipt of an accelerated

SB3404 Engrossed
- 3 -
LRB104 18864 RPS 32309 b
1
pension benefit payment under this Section, and no other
2
benefit shall be paid under this Article based on the
3
terminated creditable service, including any retirement,
4
survivor, or other benefit.
5

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

(1) Any benefits under the fund earned as a result of
9

that return to active service shall be based solely on the
10

person's creditable service arising from the return to
11

active service.
12

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

repaid to the fund, and the terminated creditable service
14

may not under any circumstances be reinstated.
15

(e) As a condition of receiving an accelerated pension
16
benefit payment, the accelerated pension benefit payment must
17
be transferred into a tax qualified retirement plan or
18
account. The accelerated pension benefit payment under this
19
Section may be subject to withholding or payment of applicable
20
taxes, but to the extent permitted by federal law, a person who
21
receives an accelerated pension benefit payment under this
22
Section must direct the fund to pay all of that payment as a
23
rollover into another retirement plan or account qualified
24
under the Internal Revenue Code of 1986, as amended.
25

(f) Before accepting a member's irrevocable election to
26
receive an accelerated pension benefit payment under this

SB3404 Engrossed
- 4 -
LRB104 18864 RPS 32309 b
1
Section, the fund shall verify that it has a sufficient amount
2
of moneys to pay for the accelerated pension benefit payment
3
from the contribution remitted by the employer for that
4
purpose. Moneys remitted to the fund for the purpose of the
5
accelerated pension benefit program must be kept in a separate
6
account. If the fund determines it does not have sufficient
7
moneys to make the accelerated pension benefit payment, then
8
the fund shall not accept the member's irrevocable election
9
and shall notify the member of that fact. The member may
10
reapply for the accelerated pension benefit payment after that
11
fiscal year. Elections shall be processed and paid in the
12
order in which complete applications are received by the fund,
13
subject to the availability of funds. If the fund accepts the
14
member's irrevocable election to receive an accelerated
15
pension benefit payment under this Section, then the fund
16
shall transfer, from the moneys remitted to the fund for that
17
purpose, the amount of the accelerated pension benefit payment
18
into the member's eligible retirement plan or qualified
19
account. If any moneys remain in the account maintained by the
20
fund for the purpose of the accelerated pension benefit
21
program at the end of the fiscal year, the fund must remit
22
those moneys back to the employer within one month after the
23
end of the fiscal year, unless the employer notifies the fund
24
at least one month before the end of the fiscal year that the
25
funds shall remain in the account to be used for the subsequent
26
fiscal year.

SB3404 Engrossed
- 5 -
LRB104 18864 RPS 32309 b
1

(g) The Board shall adopt any rules, including emergency
2
rules, necessary to implement this Section.
3

(h) No provision of this Section shall be interpreted in a
4
way that would cause the applicable fund to cease to be a
5
qualified plan under the Internal Revenue Code of 1986.

6

(40 ILCS 5/3-144.4 new)
7

Sec. 3-144.4.
Accelerated pension benefit payment for a
8
reduction in annual retirement pension increases.
9

(a) As used in this Section:
10

"Accelerated pension benefit payment" means a lump sum
11
payment equal to 70% of the difference of the present value of
12
the automatic annual increases to a Tier 1 member's retirement
13
pension using the formula applicable to the Tier 1 member and
14
the present value of the automatic annual increases to the
15
Tier 1 member's retirement pension using the formula provided
16
under subsection (b-5).
17

"Eligible person" means a person who:
18

(1) is a Tier 1 member;
19

(2) has submitted an application for a retirement
20

pension under this Article;
21

(3) meets the age and service requirements for
22

receiving a retirement pension under this Article;
23

(4) has not received any retirement pension under this
24

Article; and
25

(5) has not made the election under Section 3-144.3.

SB3404 Engrossed
- 6 -
LRB104 18864 RPS 32309 b
1

"Tier 1 member" means a person who first became a police
2
officer under this Article before January 1, 2011.
3

(b) Until June 30, 2028, if an employer elects to provide
4
funding for an accelerated pension benefit program, then as
5
soon as practical after June 30, 2026 or as soon as practical
6
after the employer makes that election, whichever is later,
7
the fund shall implement an accelerated pension benefit
8
payment option for eligible persons. Upon the request of an
9
eligible person, if the employer has elected to provide
10
funding for an accelerated pension benefit program, the fund
11
shall calculate, using actuarial tables and other assumptions
12
adopted by the Board, an accelerated pension benefit payment
13
amount and shall offer that eligible person the opportunity to
14
irrevocably elect to have his or her automatic annual
15
increases in retirement pension calculated in accordance with
16
the formula provided under subsection (b-5) in exchange for
17
the accelerated pension benefit payment. The election under
18
this subsection must be made before the eligible person
19
receives the first payment of a retirement pension otherwise
20
payable under this Article. An eligible person is limited to
21
one calculation and offer per fiscal year.
22

(b-5) Notwithstanding any other provision of law, the
23
retirement pension of a person who made the election under
24
subsection (b) shall be subject to annual increases on the
25
January 1 occurring either on or after the attainment of age 67
26
or the first anniversary of the pension start date, whichever

SB3404 Engrossed
- 7 -
LRB104 18864 RPS 32309 b
1
is later. Each annual increase shall be calculated at 1.5% of
2
the originally granted retirement pension.
3

(c) If a person who has received an accelerated pension
4
benefit payment returns to active service under this Article,
5
then:
6

(1) the calculation of any future automatic annual
7

increase in retirement pension shall be calculated in
8

accordance with the formula provided under subsection
9

(b-5); and
10

(2) the accelerated pension benefit payment may not be
11

repaid to the fund.
12

(d) As a condition of receiving an accelerated pension
13
benefit payment, the accelerated pension benefit payment must
14
be transferred into a tax qualified retirement plan or
15
account. The accelerated pension benefit payment under this
16
Section may be subject to withholding or payment of applicable
17
taxes, but to the extent permitted by federal law, a person who
18
receives an accelerated pension benefit payment under this
19
Section must direct the fund to pay all of that payment as a
20
rollover into another retirement plan or account qualified
21
under the Internal Revenue Code of 1986, as amended.
22

(d-5) Before accepting a member's irrevocable election to
23
receive an accelerated pension benefit payment under this
24
Section, the fund shall verify that it has a sufficient amount
25
of moneys to pay for the accelerated pension benefit payment
26
from the contribution remitted by the employer for that

SB3404 Engrossed
- 8 -
LRB104 18864 RPS 32309 b
1
purpose. Moneys remitted to the fund for the purpose of this
2
program must be kept in a separate account. If the fund
3
determines it does not have sufficient moneys to make the
4
accelerated pension benefit payment, then the fund shall not
5
accept the member's irrevocable election and shall notify the
6
member of that fact. The member may reapply for the
7
accelerated pension benefit payment after that fiscal year.
8
Elections shall be processed and paid in the order in which
9
complete applications are received by the fund, subject to the
10
availability of funds. If the fund accepts the member's
11
irrevocable election to receive an accelerated pension benefit
12
payment under this Section, then the fund shall transfer, from
13
the moneys remitted to the fund for that purpose, the amount of
14
the accelerated pension benefit payment into the member's
15
eligible retirement plan or qualified account. If any moneys
16
remain in the account at the end of the fiscal year, the fund
17
must remit those moneys back to the employer within one month
18
after the end of the fiscal year, unless the employer notifies
19
the fund at least one month before the end of the fiscal year
20
that the funds shall remain in the account to be used for the
21
accelerated pension benefit program for the subsequent fiscal
22
year.
23

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

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

SB3404 Engrossed
- 9 -
LRB104 18864 RPS 32309 b
1
qualified plan under the Internal Revenue Code of 1986.

2

(40 ILCS 5/4-138.15 new)
3

Sec. 4-138.15.
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 pension under this
10

Article;
11

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

Article; and
13

(4) has not made the election under Section 4-138.16.
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) If an employer has elected to provide funding for an
21
accelerated pension benefit program, then as soon as practical
22
after June 30, 2026 or as soon as practical after the employer
23
has made that election, whichever is later, the fund shall
24
calculate, using actuarial tables and other assumptions
25
adopted by the Board, the present value of pension benefits

SB3404 Engrossed
- 10 -
LRB104 18864 RPS 32309 b
1
for each eligible person who requests that information and
2
shall offer each eligible person the opportunity to
3
irrevocably elect to receive an amount determined by the fund
4
to be equal to 60% of the present value of his or her pension
5
benefits in lieu of receiving any pension benefit. The offer
6
shall specify the dollar amount that the eligible person will
7
receive if he or she so elects and shall expire when a
8
subsequent offer is made to an eligible person. An eligible
9
person is limited to one calculation and offer per fiscal
10
year. The fund shall make a good faith effort to contact every
11
eligible person to notify him or her of the election.
12

Until June 30, 2028, an eligible person may irrevocably
13
elect to receive an accelerated pension benefit payment in the
14
amount that the fund offers under this subsection in lieu of
15
receiving any pension benefit.
16

(c) A person's creditable service under this Article shall
17
be terminated upon the person's receipt of an accelerated
18
pension benefit payment under this Section, and no other
19
benefit shall be paid under this Article based on the
20
terminated creditable service, including any retirement,
21
survivor, or other benefit.
22

(d) If a person who has received an accelerated pension
23
benefit payment under this Section returns to active service
24
under this Article, then:
25

(1) Any benefits under the fund earned as a result of
26

that return to active service shall be based solely on the

SB3404 Engrossed
- 11 -
LRB104 18864 RPS 32309 b
1

person's creditable service arising from the return to
2

active service.
3

(2) The accelerated pension benefit payment may not be
4

repaid to the fund, and the terminated creditable service
5

may not under any circumstances be reinstated.
6

(e) As a condition of receiving an accelerated pension
7
benefit payment, the accelerated pension benefit payment must
8
be transferred into a tax qualified retirement plan or
9
account. The accelerated pension benefit payment under this
10
Section may be subject to withholding or payment of applicable
11
taxes, but to the extent permitted by federal law, a person who
12
receives an accelerated pension benefit payment under this
13
Section must direct the fund to pay all of that payment as a
14
rollover into another retirement plan or account qualified
15
under the Internal Revenue Code of 1986, as amended.
16

(f) Before accepting a member's irrevocable election to
17
receive an accelerated pension benefit payment under this
18
Section, the fund shall verify that it has a sufficient amount
19
of moneys to pay for the accelerated pension benefit payment
20
from the contribution remitted by the employer for that
21
purpose. Moneys remitted to the fund for the purpose of the
22
accelerated pension benefit program must be kept in a separate
23
account. If the fund determines it does not have sufficient
24
moneys to make the accelerated pension benefit payment, then
25
the fund shall not accept the member's irrevocable election
26
and shall notify the member of that fact. The member may

SB3404 Engrossed
- 12 -
LRB104 18864 RPS 32309 b
1
reapply for the accelerated pension benefit payment after that
2
fiscal year. Elections shall be processed and paid in the
3
order in which complete applications are received by the fund,
4
subject to the availability of funds. If the fund accepts the
5
member's irrevocable election to receive an accelerated
6
pension benefit payment under this Section, then the fund
7
shall transfer, from the moneys remitted to the fund for that
8
purpose, the amount of the accelerated pension benefit payment
9
into the member's eligible retirement plan or qualified
10
account. If any moneys remain in the account maintained by the
11
fund for the purpose of the accelerated pension benefit
12
program at the end of the fiscal year, the fund must remit
13
those moneys back to the employer within one month after the
14
end of the fiscal year, unless the employer notifies the fund
15
at least one month before the end of the fiscal year that the
16
funds shall remain in the account to be used for the subsequent
17
fiscal year.
18

(g) The Board shall adopt any rules, including emergency
19
rules, necessary to implement this Section.
20

(h) No provision of this Section shall be interpreted in a
21
way that would cause the applicable fund to cease to be a
22
qualified plan under the Internal Revenue Code of 1986.

23

(40 ILCS 5/4-138.16 new)
24

Sec. 4-138.16.
Accelerated pension benefit payment for a
25
reduction in annual retirement pension increases.

SB3404 Engrossed
- 13 -
LRB104 18864 RPS 32309 b
1

(a) As used in this Section:
2

"Accelerated pension benefit payment" means a lump sum
3
payment equal to 70% of the difference of the present value of
4
the automatic annual increases to a Tier 1 member's retirement
5
pension using the formula applicable to the Tier 1 member and
6
the present value of the automatic annual increases to the
7
Tier 1 member's retirement pension using the formula provided
8
under subsection (b-5).
9

"Eligible person" means a person who:
10

(1) is a Tier 1 member;
11

(2) has submitted an application for a retirement
12

pension under this Article;
13

(3) meets the age and service requirements for
14

receiving a retirement pension under this Article;
15

(4) has not received any retirement pension under this
16

Article; and
17

(5) has not made the election under Section 4-138.15.
18

"Tier 1 member" means a person who first became a
19
firefighter before January 1, 2011.
20

(b) Until June 30, 2028, if an employer elects to provide
21
funding for an accelerated pension benefit program, then as
22
soon as practical after June 30, 2026 or as soon as practical
23
after the employer makes that election, whichever is later,
24
the fund shall implement an accelerated pension benefit
25
payment option for eligible persons. Upon the request of an
26
eligible person, if the employer has elected to provide

SB3404 Engrossed
- 14 -
LRB104 18864 RPS 32309 b
1
funding for an accelerated pension benefit program, the fund
2
shall calculate, using actuarial tables and other assumptions
3
adopted by the Board, an accelerated pension benefit payment
4
amount and shall offer that eligible person the opportunity to
5
irrevocably elect to have his or her automatic annual
6
increases in retirement pension calculated in accordance with
7
the formula provided under subsection (b-5) in exchange for
8
the accelerated pension benefit payment. The election under
9
this subsection must be made before the eligible person
10
receives the first payment of a retirement pension otherwise
11
payable under this Article. An eligible person is limited to
12
one calculation and offer per fiscal year.
13

(b-5) Notwithstanding any other provision of law, the
14
retirement pension of a person who made the election under
15
subsection (b) shall be subject to annual increases on the
16
January 1 occurring either on or after the attainment of age 67
17
or the first anniversary of the pension start date, whichever
18
is later. Each annual increase shall be calculated at 1.5% of
19
the originally granted retirement pension.
20

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

(1) the calculation of any future automatic annual
24

increase in retirement pension shall be calculated in
25

accordance with the formula provided under subsection
26

(b-5); and

SB3404 Engrossed
- 15 -
LRB104 18864 RPS 32309 b
1

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

repaid to the fund.
3

(d) As a condition of receiving an accelerated pension
4
benefit payment, the accelerated pension benefit payment must
5
be transferred into a tax qualified retirement plan or
6
account. The accelerated pension benefit payment under this
7
Section may be subject to withholding or payment of applicable
8
taxes, but to the extent permitted by federal law, a person who
9
receives an accelerated pension benefit payment under this
10
Section must direct the fund to pay all of that payment as a
11
rollover into another retirement plan or account qualified
12
under the Internal Revenue Code of 1986, as amended.
13

(d-5) Before accepting a member's irrevocable election to
14
receive an accelerated pension benefit payment under this
15
Section, the fund shall verify that it has a sufficient amount
16
of moneys to pay for the accelerated pension benefit payment
17
from the contribution remitted by the employer for that
18
purpose. Moneys remitted to the fund for the purpose of this
19
program must be kept in a separate account. If the fund
20
determines it does not have sufficient moneys to make the
21
accelerated pension benefit payment, then the fund shall not
22
accept the member's irrevocable election and shall notify the
23
member of that fact. The member may reapply for the
24
accelerated pension benefit payment after that fiscal year.
25
Elections shall be processed and paid in the order in which
26
complete applications are received by the fund, subject to the

SB3404 Engrossed
- 16 -
LRB104 18864 RPS 32309 b
1
availability of funds. If the fund accepts the member's
2
irrevocable election to receive an accelerated pension benefit
3
payment under this Section, then the fund shall transfer, from
4
the moneys remitted to the fund for that purpose, the amount of
5
the accelerated pension benefit payment into the member's
6
eligible retirement plan or qualified account. If any moneys
7
remain in the account at the end of the fiscal year, the fund
8
must remit those moneys back to the employer within one month
9
after the end of the fiscal year, unless the employer notifies
10
the fund at least one month before the end of the fiscal year
11
that the funds shall remain in the account to be used for the
12
accelerated pension benefit program for the subsequent fiscal
13
year.
14

(e) The Board shall adopt any rules, including emergency
15
rules, necessary to implement this Section.
16

(f) No provision of this Section shall be interpreted in a
17
way that would cause the applicable fund to cease to be a
18
qualified plan under the Internal Revenue Code of 1986.

19

(40 ILCS 5/5-218.5 new)
20

Sec. 5-218.5.
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;
25

(2) has accrued sufficient service credit to be

SB3404 Engrossed
- 17 -
LRB104 18864 RPS 32309 b
1

eligible to receive a retirement annuity under this
2

Article;
3

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

Article; and
5

(4) has not made the election under Section 5-218.6.
6

"Pension benefit" means the benefits under this Article,
7
or Article 1 as it relates to those benefits, including any
8
anticipated annual increases, that an eligible person is
9
entitled to upon attainment of the applicable retirement age.
10
"Pension benefit" also includes applicable survivor's or
11
disability benefits.
12

(b) If an employer has elected to provide funding for an
13
accelerated pension benefit program, then as soon as practical
14
after June 30, 2026 or as soon as practical after the employer
15
has made that election, whichever is later, the Fund shall
16
calculate, using actuarial tables and other assumptions
17
adopted by the Board, the present value of pension benefits
18
for each eligible person who requests that information and
19
shall offer each eligible person the opportunity to
20
irrevocably elect to receive an amount determined by the Fund
21
to be equal to 60% of the present value of his or her pension
22
benefits in lieu of receiving any pension benefit. The offer
23
shall specify the dollar amount that the eligible person will
24
receive if he or she so elects and shall expire when a
25
subsequent offer is made to an eligible person. An eligible
26
person is limited to one calculation and offer per fiscal

SB3404 Engrossed
- 18 -
LRB104 18864 RPS 32309 b
1
year. The Fund shall make a good faith effort to contact every
2
eligible person to notify him or her of the election.
3

Until June 30, 2028, an eligible person may irrevocably
4
elect to receive an accelerated pension benefit payment in the
5
amount that the Fund offers under this subsection in lieu of
6
receiving any pension benefit.
7

(c) A person's creditable service under this Article shall
8
be terminated upon the person's receipt of an accelerated
9
pension benefit payment under this Section, and no other
10
benefit shall be paid under this Article based on the
11
terminated creditable service, including any retirement,
12
survivor, or other benefit.
13

(d) If a person who has received an accelerated pension
14
benefit payment under this Section returns to active service
15
under this Article, then:
16

(1) Any benefits under the Fund earned as a result of
17

that return to active service shall be based solely on the
18

person's creditable service arising from the return to
19

active service.
20

(2) The accelerated pension benefit payment may not be
21

repaid to the Fund, and the terminated creditable service
22

may not under any circumstances be reinstated.
23

(e) 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

SB3404 Engrossed
- 19 -
LRB104 18864 RPS 32309 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 Fund 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

(f) Before accepting a member's irrevocable election to
8
receive an accelerated pension benefit payment under this
9
Section, the Fund shall verify that it has a sufficient amount
10
of moneys to pay for the accelerated pension benefit payment
11
from the contribution remitted by the employer for that
12
purpose. Moneys remitted to the Fund for the purpose of the
13
accelerated pension benefit program must be kept in a separate
14
account. If the Fund determines it does not have sufficient
15
moneys to make the accelerated pension benefit payment, then
16
the Fund shall not accept the member's irrevocable election
17
and shall notify the member of that fact. The member may
18
reapply for the accelerated pension benefit payment after that
19
fiscal year. Elections shall be processed and paid in the
20
order in which complete applications are received by the Fund,
21
subject to the availability of funds. If the Fund accepts the
22
member's irrevocable election to receive an accelerated
23
pension benefit payment under this Section, then the Fund
24
shall transfer, from the moneys remitted to the Fund for that
25
purpose, the amount of the accelerated pension benefit payment
26
into the member's eligible retirement plan or qualified

SB3404 Engrossed
- 20 -
LRB104 18864 RPS 32309 b
1
account. If any moneys remain in the account maintained by the
2
Fund for the purpose of the accelerated pension benefit
3
program at the end of the fiscal year, the Fund must remit
4
those moneys back to the employer within one month after the
5
end of the fiscal year, unless the employer notifies the Fund
6
at least one month before the end of the fiscal year that the
7
funds shall remain in the account to be used for the subsequent
8
fiscal year.
9

(g) The Board shall adopt any rules, including emergency
10
rules, necessary to implement this Section.
11

(h) No provision of this Section shall be interpreted in a
12
way that would cause the Fund to cease to be a qualified plan
13
under the Internal Revenue Code of 1986.

14

(40 ILCS 5/5-218.6 new)
15

Sec. 5-218.6.
Accelerated pension benefit payment for a
16
reduction in annual retirement annuity increases.
17

(a) As used in this Section:
18

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

"Eligible person" means a person who:

SB3404 Engrossed
- 21 -
LRB104 18864 RPS 32309 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 5-218.5.
9

"Tier 1 member" means a person who first became a
10
policeman before January 1, 2011.
11

(b) Until June 30, 2028, if an employer elects to provide
12
funding for an accelerated pension benefit program, then as
13
soon as practical after June 30, 2026 or as soon as practical
14
after the employer makes that election, whichever is later,
15
the Fund shall implement an accelerated pension benefit
16
payment option for eligible persons. Upon the request of an
17
eligible person, if the employer has elected to provide
18
funding for an accelerated pension benefit program, the Fund
19
shall calculate, using actuarial tables and other assumptions
20
adopted by the Board, an accelerated pension benefit payment
21
amount and shall offer that eligible person the opportunity to
22
irrevocably elect to have his or her automatic annual
23
increases in retirement pension calculated in accordance with
24
the formula provided under subsection (b-5) in exchange for
25
the accelerated pension benefit payment. The election under
26
this subsection must be made before the eligible person

SB3404 Engrossed
- 22 -
LRB104 18864 RPS 32309 b
1
receives the first payment of a retirement pension otherwise
2
payable under this Article. An eligible person is limited to
3
one calculation and offer per fiscal year.
4

(b-5) Notwithstanding any other provision of law, the
5
retirement annuity of a person who made the election under
6
subsection (b) shall be subject to annual increases on the
7
January 1 occurring either on or after the attainment of age 67
8
or the first anniversary of the annuity start date, whichever
9
is later. Each annual increase shall be calculated at 1.5% of
10
the originally granted retirement annuity.
11

(c) If a person who has received an accelerated pension
12
benefit payment returns to active service under this Article,
13
then:
14

(1) the calculation of any future automatic annual
15

increase in retirement annuity shall be calculated in
16

accordance with the formula provided under subsection
17

(b-5); and
18

(2) the accelerated pension benefit payment may not be
19

repaid to the Fund.
20

(d) As a condition of receiving an accelerated pension
21
benefit payment, the accelerated pension benefit payment must
22
be transferred into a tax qualified retirement plan or
23
account. The accelerated pension benefit payment under this
24
Section may be subject to withholding or payment of applicable
25
taxes, but to the extent permitted by federal law, a person who
26
receives an accelerated pension benefit payment under this

SB3404 Engrossed
- 23 -
LRB104 18864 RPS 32309 b
1
Section must direct the Fund to pay all of that payment as a
2
rollover into another retirement plan or account qualified
3
under the Internal Revenue Code of 1986, as amended.
4

(d-5) Before accepting a member's irrevocable election to
5
receive an accelerated pension benefit payment under this
6
Section, the Fund shall verify that it has a sufficient amount
7
of moneys to pay for the accelerated pension benefit payment
8
from the contribution remitted by the employer for that
9
purpose. Moneys remitted to the Fund for the purpose of this
10
program must be kept in a separate account. If the Fund
11
determines it does not have sufficient moneys to make the
12
accelerated pension benefit payment, then the Fund shall not
13
accept the member's irrevocable election and shall notify the
14
member of that fact. The member may reapply for the
15
accelerated pension benefit payment after that fiscal year.
16
Elections shall be processed and paid in the order in which
17
complete applications are received by the Fund, subject to the
18
availability of funds. If the Fund accepts the member's
19
irrevocable election to receive an accelerated pension benefit
20
payment under this Section, then the Fund shall transfer, from
21
the moneys remitted to the Fund for that purpose, the amount of
22
the accelerated pension benefit payment into the member's
23
eligible retirement plan or qualified account. If any moneys
24
remain in the account at the end of the fiscal year, the Fund
25
must remit those moneys back to the employer within one month
26
after the end of the fiscal year, unless the employer notifies

SB3404 Engrossed
- 24 -
LRB104 18864 RPS 32309 b
1
the Fund at least one month before the end of the fiscal year
2
that the funds shall remain in the account to be used for the
3
accelerated pension benefit program for the subsequent fiscal
4
year.
5

(e) The Board shall adopt any rules, including emergency
6
rules, necessary to implement this Section.
7

(f) No provision of this Section shall be interpreted in a
8
way that would cause the Fund to cease to be a qualified plan
9
under the Internal Revenue Code of 1986.

10

(40 ILCS 5/6-213.5 new)
11

Sec. 6-213.5.
Accelerated pension benefit payment in lieu
12
of any pension benefit.
13

(a) As used in this Section:
14

"Eligible person" means a person who:
15

(1) has terminated service;
16

(2) has accrued sufficient service credit to be
17

eligible to receive a retirement annuity under this
18

Article;
19

(3) has not received any retirement annuity under this
20

Article; and
21

(4) has not made the election under Section 6-213.6.
22

"Pension benefit" means the benefits under this Article,
23
or Article 1 as it relates to those benefits, including any
24
anticipated annual increases, that an eligible person is
25
entitled to upon attainment of the applicable retirement age.

SB3404 Engrossed
- 25 -
LRB104 18864 RPS 32309 b
1
"Pension benefit" also includes applicable survivor's or
2
disability benefits.
3

(b) If an employer has elected to provide funding for an
4
accelerated pension benefit program, then as soon as practical
5
after June 30, 2026 or as soon as practical after the employer
6
has made that election, whichever is later, the Fund shall
7
calculate, using actuarial tables and other assumptions
8
adopted by the Board, the present value of pension benefits
9
for each eligible person who requests that information and
10
shall offer each eligible person the opportunity to
11
irrevocably elect to receive an amount determined by the Fund
12
to be equal to 60% of the present value of his or her pension
13
benefits in lieu of receiving any pension benefit. The offer
14
shall specify the dollar amount that the eligible person will
15
receive if he or she so elects and shall expire when a
16
subsequent offer is made to an eligible person. An eligible
17
person is limited to one calculation and offer per fiscal
18
year. The Fund shall make a good faith effort to contact every
19
eligible person to notify him or her of the election.
20

Until June 30, 2028, an eligible person may irrevocably
21
elect to receive an accelerated pension benefit payment in the
22
amount that the Fund offers under this subsection in lieu of
23
receiving any pension benefit.
24

(c) A person's creditable service under this Article shall
25
be terminated upon the person's receipt of an accelerated
26
pension benefit payment under this Section, and no other

SB3404 Engrossed
- 26 -
LRB104 18864 RPS 32309 b
1
benefit shall be paid under this Article based on the
2
terminated creditable service, including any retirement,
3
survivor, or other benefit.
4

(d) If a person who has received an accelerated pension
5
benefit payment under this Section returns to active service
6
under this Article, then:
7

(1) Any benefits under the Fund earned as a result of
8

that return to active service shall be based solely on the
9

person's creditable service arising from the return to
10

active service.
11

(2) The accelerated pension benefit payment may not be
12

repaid to the Fund, and the terminated creditable service
13

may not under any circumstances be reinstated.
14

(e) 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 Fund 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

(f) Before accepting a member's irrevocable election to
25
receive an accelerated pension benefit payment under this
26
Section, the Fund shall verify that it has a sufficient amount

SB3404 Engrossed
- 27 -
LRB104 18864 RPS 32309 b
1
of moneys to pay for the accelerated pension benefit payment
2
from the contribution remitted by the employer for that
3
purpose. Moneys remitted to the Fund for the purpose of the
4
accelerated pension benefit program must be kept in a separate
5
account. If the Fund determines it does not have sufficient
6
moneys to make the accelerated pension benefit payment, then
7
the Fund shall not accept the member's irrevocable election
8
and shall notify the member of that fact. The member may
9
reapply for the accelerated pension benefit payment after that
10
fiscal year. Elections shall be processed and paid in the
11
order in which complete applications are received by the Fund,
12
subject to the availability of funds. If the Fund accepts the
13
member's irrevocable election to receive an accelerated
14
pension benefit payment under this Section, then the Fund
15
shall transfer, from the moneys remitted to the Fund for that
16
purpose, the amount of the accelerated pension benefit payment
17
into the member's eligible retirement plan or qualified
18
account. If any moneys remain in the account maintained by the
19
Fund for the purpose of the accelerated pension benefit
20
program at the end of the fiscal year, the Fund must remit
21
those moneys back to the employer within one month after the
22
end of the fiscal year, unless the employer notifies the Fund
23
at least one month before the end of the fiscal year that the
24
funds shall remain in the account to be used for the subsequent
25
fiscal year.
26

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

SB3404 Engrossed
- 28 -
LRB104 18864 RPS 32309 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 Fund to cease to be a qualified plan
4
under the Internal Revenue Code of 1986.

5

(40 ILCS 5/6-213.6 new)
6

Sec. 6-213.6.
Accelerated pension benefit payment for a
7
reduction in annual retirement annuity increases.
8

(a) As used in this Section:
9

"Accelerated pension benefit payment" means a lump sum
10
payment equal to 70% of the difference of the present value of
11
the automatic annual increases to a Tier 1 member's retirement
12
annuity and survivor's annuity using the formula applicable to
13
the Tier 1 member and the present value of the automatic annual
14
increases to the Tier 1 member's retirement annuity using the
15
formula provided under subsection (b-5). "Eligible person"
16
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 6-213.5.
25

"Tier 1 member" means a person who first became a fireman

SB3404 Engrossed
- 29 -
LRB104 18864 RPS 32309 b
1
under this Article before January 1, 2011.
2

(b) Until June 30, 2028, if an employer elects to provide
3
funding for an accelerated pension benefit program, then as
4
soon as practical after June 30, 2026 or as soon as practical
5
after the employer makes that election, whichever is later,
6
the Fund shall implement an accelerated pension benefit
7
payment option for eligible persons. Upon the request of an
8
eligible person, if the employer has elected to provide
9
funding for an accelerated pension benefit program, the Fund
10
shall calculate, using actuarial tables and other assumptions
11
adopted by the Board, an accelerated pension benefit payment
12
amount and shall offer that eligible person the opportunity to
13
irrevocably elect to have his or her automatic annual
14
increases in retirement pension calculated in accordance with
15
the formula provided under subsection (b-5) in exchange for
16
the accelerated pension benefit payment. The election under
17
this subsection must be made before the eligible person
18
receives the first payment of a retirement pension otherwise
19
payable under this Article. An eligible person is limited to
20
one calculation and offer per fiscal year.
21

(b-5) Notwithstanding any other provision of law, the
22
retirement annuity of a person who made the election under
23
subsection (b) shall be subject to annual increases on the
24
January 1 occurring either on or after the attainment of age 67
25
or the first anniversary of the annuity start date, whichever
26
is later. Each annual increase shall be calculated at 1.5% of

SB3404 Engrossed
- 30 -
LRB104 18864 RPS 32309 b
1
the originally granted retirement annuity.
2

(c) If a person who has received an accelerated pension
3
benefit payment returns to active service under this Article,
4
then:
5

(1) the calculation of any future automatic annual
6

increase in retirement annuity shall be calculated in
7

accordance with the formula provided under subsection
8

(b-5); and
9

(2) the accelerated pension benefit payment may not be
10

repaid to the Fund.
11

(d) 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 Fund 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

(d-5) Before accepting a member's irrevocable election to
22
receive an accelerated pension benefit payment under this
23
Section, the Fund shall verify that it has a sufficient amount
24
of moneys to pay for the accelerated pension benefit payment
25
from the contribution remitted by the employer for that
26
purpose. Moneys remitted to the Fund for the purpose of this

SB3404 Engrossed
- 31 -
LRB104 18864 RPS 32309 b
1
program must be kept in a separate account. If the Fund
2
determines it does not have sufficient moneys to make the
3
accelerated pension benefit payment, then the Fund shall not
4
accept the member's irrevocable election and shall notify the
5
member of that fact. The member may reapply for the
6
accelerated pension benefit payment after that fiscal year.
7
Elections shall be processed and paid in the order in which
8
complete applications are received by the Fund, subject to the
9
availability of funds. If the Fund accepts the member's
10
irrevocable election to receive an accelerated pension benefit
11
payment under this Section, then the Fund shall transfer, from
12
the moneys remitted to the Fund for that purpose, the amount of
13
the accelerated pension benefit payment into the member's
14
eligible retirement plan or qualified account. If any moneys
15
remain in the account at the end of the fiscal year, the Fund
16
must remit those moneys back to the employer within one month
17
after the end of the fiscal year, unless the employer notifies
18
the Fund at least one month before the end of the fiscal year
19
that the funds shall remain in the account to be used for the
20
accelerated pension benefit program for the subsequent fiscal
21
year.
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 Fund to cease to be a qualified plan
26
under the Internal Revenue Code of 1986.

SB3404 Engrossed
- 32 -
LRB104 18864 RPS 32309 b
1

(40 ILCS 5/8-244.5 new)
2

Sec. 8-244.5.
Accelerated pension benefit payment in lieu
3
of any pension benefit.
4

(a) As used in this Section:
5

"Eligible person" means a person who:
6

(1) has terminated service;
7

(2) has accrued sufficient service credit to be
8

eligible to receive a retirement annuity under this
9

Article;
10

(3) has not received any retirement annuity under this
11

Article; and
12

(4) has not made the election under Section 8-244.6.
13

"Pension benefit" means the benefits under this Article,
14
or Article 1 as it relates to those benefits, including any
15
anticipated annual increases, that an eligible person is
16
entitled to upon attainment of the applicable retirement age.
17
"Pension benefit" also includes applicable survivor's or
18
disability benefits.
19

(b) If the city has elected to provide funding for an
20
accelerated pension benefit program, then as soon as practical
21
after June 30, 2026 or as soon as practical after the city has
22
made that election, whichever is later, the Fund shall
23
calculate, using actuarial tables and other assumptions
24
adopted by the Board, the present value of pension benefits
25
for each eligible person who requests that information and

SB3404 Engrossed
- 33 -
LRB104 18864 RPS 32309 b
1
shall offer each eligible person the opportunity to
2
irrevocably elect to receive an amount determined by the Fund
3
to be equal to 60% of the present value of his or her pension
4
benefits in lieu of receiving any pension benefit. The offer
5
shall specify the dollar amount that the eligible person will
6
receive if he or she so elects and shall expire when a
7
subsequent offer is made to an eligible person. An eligible
8
person is limited to one calculation and offer per fiscal
9
year. The Fund shall make a good faith effort to contact every
10
eligible person to notify him or her of the election.
11

Until June 30, 2028, an eligible person may irrevocably
12
elect to receive an accelerated pension benefit payment in the
13
amount that the Fund offers under this subsection in lieu of
14
receiving any pension benefit. A person who elects to receive
15
an accelerated pension benefit payment under this Section may
16
not elect to proceed under the Retirement Systems Reciprocal
17
Act with respect to service under this Article.
18

(c) A person's creditable service under this Article shall
19
be terminated upon the person's receipt of an accelerated
20
pension benefit payment under this Section, and no other
21
benefit shall be paid under this Article based on the
22
terminated creditable service, including any retirement,
23
survivor, or other benefit.
24

(d) If a person who has received an accelerated pension
25
benefit payment under this Section returns to active service
26
under this Article, then:

SB3404 Engrossed
- 34 -
LRB104 18864 RPS 32309 b
1

(1) Any benefits under the Fund earned as a result of
2

that return to active service shall be based solely on the
3

person's creditable service arising from the return to
4

active service.
5

(2) The accelerated pension benefit payment may not be
6

repaid to the Fund, and the terminated creditable service
7

may 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 transferred into a tax qualified retirement plan or
11
account. The accelerated pension benefit payment under this
12
Section may be subject to withholding or payment of applicable
13
taxes, but to the extent permitted by federal law, a person who
14
receives an accelerated pension benefit payment under this
15
Section must direct the Fund to pay all of that payment as a
16
rollover into another retirement plan or account qualified
17
under the Internal Revenue Code of 1986, as amended.
18

(f) Before accepting a member's irrevocable election to
19
receive an accelerated pension benefit payment under this
20
Section, the Fund shall verify that it has a sufficient amount
21
of moneys to pay for the accelerated pension benefit payment
22
from the contribution remitted by the city for that purpose.
23
Moneys remitted to the Fund for the purpose of the accelerated
24
pension benefit program must be kept in a separate account. If
25
the Fund determines it does not have sufficient moneys to make
26
the accelerated pension benefit payment, then the Fund shall

SB3404 Engrossed
- 35 -
LRB104 18864 RPS 32309 b
1
not accept the member's irrevocable election and shall notify
2
the member of that fact. The member may reapply for the
3
accelerated pension benefit payment after that fiscal year.
4
Elections shall be processed and paid in the order in which
5
complete applications are received by the Fund, subject to the
6
availability of funds. If the Fund accepts the member's
7
irrevocable election to receive an accelerated pension benefit
8
payment under this Section, then the Fund shall transfer, from
9
the moneys remitted to the Fund for that purpose, the amount of
10
the accelerated pension benefit payment into the member's
11
eligible retirement plan or qualified account. If any moneys
12
remain in the account maintained by the Fund for the purpose of
13
the accelerated pension benefit program at the end of the
14
fiscal year, the Fund must remit those moneys back to the city
15
within one month after the end of the fiscal year, unless the
16
city notifies the Fund at least one month before the end of the
17
fiscal year that the funds shall remain in the account to be
18
used for the subsequent fiscal year.
19

(g) The Board shall adopt any rules, including emergency
20
rules, necessary to implement this Section.
21

(h) No provision of this Section shall be interpreted in a
22
way that would cause the Fund to cease to be a qualified plan
23
under the Internal Revenue Code of 1986.

24

(40 ILCS 5/8-244.6 new)
25

Sec. 8-244.6.
Accelerated pension benefit payment for a

SB3404 Engrossed
- 36 -
LRB104 18864 RPS 32309 b
1
reduction in annual retirement annuity.
2

(a) As used in this Section:
3

"Accelerated pension benefit payment" means a lump sum
4
payment equal to 70% of the difference of the present value of
5
the automatic annual increases to a Tier 1 member's retirement
6
annuity using the formula applicable to the Tier 1 member and
7
the present value of the automatic annual increases to the
8
Tier 1 member's retirement annuity using the formula provided
9
under subsection (b-5).
10

"Eligible person" means a person who:
11

(1) is a Tier 1 member;
12

(2) has submitted an application for a retirement
13

annuity under this Article;
14

(3) meets the age and service requirements for
15

receiving a retirement annuity under this Article;
16

(4) has not received any retirement annuity under this
17

Article; and
18

(5) has not made the election under Section 8-244.5.
19

"Tier 1 member" means an employee who first became a
20
participant under this Article or any reciprocal retirement
21
system or pension fund established under this Code before
22
January 1, 2011.
23

(b) Until June 30, 2028, if the city elects to provide
24
funding for an accelerated pension benefit program, then as
25
soon as practical after June 30, 2026 or as soon as practical
26
after the city makes that election, whichever is later, the

SB3404 Engrossed
- 37 -
LRB104 18864 RPS 32309 b
1
Fund shall implement an accelerated pension benefit payment
2
option for eligible persons. Upon the request of an eligible
3
person, if the city has elected to provide funding for an
4
accelerated pension benefit program, the Fund shall calculate,
5
using actuarial tables and other assumptions adopted by the
6
Board, an accelerated pension benefit payment amount and shall
7
offer that eligible person the opportunity to irrevocably
8
elect to have his or her automatic annual increases in
9
retirement pension calculated in accordance with the formula
10
provided under subsection (b-5) in exchange for the
11
accelerated pension benefit payment. The election under this
12
subsection must be made before the eligible person receives
13
the first payment of a retirement pension otherwise payable
14
under this Article. An eligible person is limited to one
15
calculation and offer per fiscal year.
16

(b-5) Notwithstanding any other provision of law, the
17
retirement annuity of a person who made the election under
18
subsection (b) shall be subject to annual increases on the
19
January 1 occurring either on or after the attainment of age 67
20
or the first anniversary of the annuity start date, whichever
21
is later. Each annual increase shall be calculated at 1.5% of
22
the originally granted retirement annuity.
23

(c) If a person who has received an accelerated pension
24
benefit payment returns to active service under this Article,
25
then:
26

(1) the calculation of any future automatic annual

SB3404 Engrossed
- 38 -
LRB104 18864 RPS 32309 b
1

increase in retirement annuity shall be calculated in
2

accordance with the formula provided under subsection
3

(b-5); and
4

(2) the accelerated pension benefit payment may not be
5

repaid to the Fund.
6

(d) As a condition of receiving an accelerated pension
7
benefit payment, the accelerated pension benefit payment must
8
be transferred into a tax qualified retirement plan or
9
account. The accelerated pension benefit payment under this
10
Section may be subject to withholding or payment of applicable
11
taxes, but to the extent permitted by federal law, a person who
12
receives an accelerated pension benefit payment under this
13
Section must direct the Fund to pay all of that payment as a
14
rollover into another retirement plan or account qualified
15
under the Internal Revenue Code of 1986, as amended.
16

(d-5) Before accepting a member's irrevocable election to
17
receive an accelerated pension benefit payment under this
18
Section, the Fund shall verify that it has a sufficient amount
19
of moneys to pay for the accelerated pension benefit payment
20
from the contribution remitted by the city for that purpose.
21
Moneys remitted to the Fund for the purpose of this program
22
must be kept in a separate account. If the Fund determines it
23
does not have sufficient moneys to make the accelerated
24
pension benefit payment, then the Fund shall not accept the
25
member's irrevocable election and shall notify the member of
26
that fact. The member may reapply for the accelerated pension

SB3404 Engrossed
- 39 -
LRB104 18864 RPS 32309 b
1
benefit payment after that fiscal year. Elections shall be
2
processed and paid in the order in which complete applications
3
are received by the Fund, subject to the availability of
4
funds. If the Fund accepts the member's irrevocable election
5
to receive an accelerated pension benefit payment under this
6
Section, then the Fund shall transfer, from the moneys
7
remitted to the Fund for that purpose, the amount of the
8
accelerated pension benefit payment into the member's eligible
9
retirement plan or qualified account. If any moneys remain in
10
the account at the end of the fiscal year, the Fund must remit
11
those moneys back to the city within one month after the end of
12
the fiscal year, unless the city notifies the Fund at least one
13
month before the end of the fiscal year that the funds shall
14
remain in the account to be used for the accelerated pension
15
benefit program for the subsequent fiscal year.
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 Fund to cease to be a qualified plan
20
under the Internal Revenue Code of 1986.

21

(40 ILCS 5/9-134.6 new)
22

Sec. 9-134.6.
Accelerated pension benefit payment in lieu
23
of any pension benefit.
24

(a) As used in this Section:
25

"Eligible person" means a person who:

SB3404 Engrossed
- 40 -
LRB104 18864 RPS 32309 b
1

(1) has terminated service;
2

(2) has accrued sufficient service credit to be
3

eligible to receive a retirement annuity under this
4

Article;
5

(3) has not received any retirement annuity under this
6

Article; and
7

(4) has not made the election under Section 9-134.7.
8

"Pension benefit" means the benefits under this Article,
9
or Article 1 as it relates to those benefits, including any
10
anticipated annual increases, that an eligible person is
11
entitled to upon attainment of the applicable retirement age.
12
"Pension benefit" also includes applicable survivor's,
13
widow's, or disability benefits.
14

(b) If an employer has elected to provide funding for an
15
accelerated pension benefit program, then as soon as practical
16
after June 30, 2026 or as soon as practical after the employer
17
has made that election, whichever is later, the Fund shall
18
calculate, using actuarial tables and other assumptions
19
adopted by the Board, the present value of pension benefits
20
for each eligible person who requests that information and
21
shall offer each eligible person the opportunity to
22
irrevocably elect to receive an amount determined by the Fund
23
to be equal to 60% of the present value of his or her pension
24
benefits in lieu of receiving any pension benefit. The offer
25
shall specify the dollar amount that the eligible person will
26
receive if he or she so elects and shall expire when a

SB3404 Engrossed
- 41 -
LRB104 18864 RPS 32309 b
1
subsequent offer is made to an eligible person. An eligible
2
person is limited to one calculation and offer per fiscal
3
year. The Fund shall make a good faith effort to contact every
4
eligible person to notify him or her of the election.
5

Until June 30, 2028, an eligible person may irrevocably
6
elect to receive an accelerated pension benefit payment in the
7
amount that the Fund offers under this subsection in lieu of
8
receiving any pension benefit. A person who elects to receive
9
an accelerated pension benefit payment under this Section may
10
not elect to proceed under the Retirement Systems Reciprocal
11
Act with respect to service under this Article.
12

(c) A person's creditable service under this Article shall
13
be terminated upon the person's receipt of an accelerated
14
pension benefit payment under this Section, and no other
15
benefit shall be paid under this Article based on the
16
terminated creditable service, including any retirement,
17
survivor, or other benefit.
18

(d) If a person who has received an accelerated pension
19
benefit payment under this Section returns to active service
20
under this Article, then:
21

(1) Any benefits under the Fund earned as a result of
22

that return to active service shall be based solely on the
23

person's creditable service arising from the return to
24

active service.
25

(2) The accelerated pension benefit payment may not be
26

repaid to the Fund, and the terminated creditable service

SB3404 Engrossed
- 42 -
LRB104 18864 RPS 32309 b
1

may not under any circumstances be reinstated.
2

(e) As a condition of receiving an accelerated pension
3
benefit payment, the accelerated pension benefit payment must
4
be transferred into a tax qualified retirement plan or
5
account. The accelerated pension benefit payment under this
6
Section may be subject to withholding or payment of applicable
7
taxes, but to the extent permitted by federal law, a person who
8
receives an accelerated pension benefit payment under this
9
Section must direct the Fund to pay all of that payment as a
10
rollover into another retirement plan or account qualified
11
under the Internal Revenue Code of 1986, as amended.
12

(f) Before accepting a member's irrevocable election to
13
receive an accelerated pension benefit payment under this
14
Section, the Fund shall verify that it has a sufficient amount
15
of moneys to pay for the accelerated pension benefit payment
16
from the contribution remitted by the employer for that
17
purpose. Moneys remitted to the Fund for the purpose of the
18
accelerated pension benefit program must be kept in a separate
19
account. If the Fund determines it does not have sufficient
20
moneys to make the accelerated pension benefit payment, then
21
the Fund shall not accept the member's irrevocable election
22
and shall notify the member of that fact. The member may
23
reapply for the accelerated pension benefit payment after that
24
fiscal year. Elections shall be processed and paid in the
25
order in which complete applications are received by the Fund,
26
subject to the availability of funds. If the Fund accepts the

SB3404 Engrossed
- 43 -
LRB104 18864 RPS 32309 b
1
member's irrevocable election to receive an accelerated
2
pension benefit payment under this Section, then the Fund
3
shall transfer, from the moneys remitted to the Fund for that
4
purpose, the amount of the accelerated pension benefit payment
5
into the member's eligible retirement plan or qualified
6
account. If any moneys remain in the account maintained by the
7
Fund for the purpose of the accelerated pension benefit
8
program at the end of the fiscal year, the Fund must remit
9
those moneys back to the employer within one month after the
10
end of the fiscal year, unless the employer notifies the Fund
11
at least one month before the end of the fiscal year that the
12
funds shall remain in the account to be used for the subsequent
13
fiscal year.
14

(g) The Board shall adopt any rules, including emergency
15
rules, necessary to implement this Section.
16

(h) No provision of this Section shall be interpreted in a
17
way that would cause the Fund to cease to be a qualified plan
18
under the Internal Revenue Code of 1986.

19

(40 ILCS 5/9-134.7 new)
20

Sec. 9-134.7.
Accelerated pension benefit payment for a
21
reduction in annual retirement annuity and widow's annuity
22
increases.
23

(a) As used in this Section:
24

"Accelerated pension benefit payment" means a lump sum
25
payment equal to 70% of the difference of the present value of

SB3404 Engrossed
- 44 -
LRB104 18864 RPS 32309 b
1
the automatic annual increases to a Tier 1 member's retirement
2
annuity and widow's annuity using the formula applicable to
3
the Tier 1 member and the present value of the automatic annual
4
increases to the Tier 1 member's retirement annuity using the
5
formula provided under subsection (b-5) and widow's annuity
6
using the formula provided under subsection (b-6). "Eligible
7
person" means a person who:
8

(1) is a Tier 1 member;
9

(2) has submitted an application for a retirement
10

annuity under this Article;
11

(3) meets the age and service requirements for
12

receiving a retirement annuity under this Article;
13

(4) has not received any retirement annuity under this
14

Article; and
15

(5) has not made the election under Section 9-134.6.
16

"Tier 1 member" means a person who first became a
17
participant under this Article or any reciprocal retirement
18
system or pension fund established under this Code before
19
January 1, 2011.
20

(b) Until June 30, 2028, if an employer elects to provide
21
funding for an accelerated pension benefit program, then as
22
soon as practical after June 30, 2026 or as soon as practical
23
after the employer makes that election, whichever is later,
24
the Fund shall implement an accelerated pension benefit
25
payment option for eligible persons. Upon the request of an
26
eligible person, if the employer has elected to provide

SB3404 Engrossed
- 45 -
LRB104 18864 RPS 32309 b
1
funding for an accelerated pension benefit program, the Fund
2
shall calculate, using actuarial tables and other assumptions
3
adopted by the Board, an accelerated pension benefit payment
4
amount and shall offer that eligible person the opportunity to
5
irrevocably elect to have his or her automatic annual
6
increases in retirement pension calculated in accordance with
7
the formula provided under subsection (b-5) in exchange for
8
the accelerated pension benefit payment. The election under
9
this subsection must be made before the eligible person
10
receives the first payment of a retirement pension otherwise
11
payable under this Article. An eligible person is limited to
12
one calculation and offer per fiscal year.
13

(b-5) Notwithstanding any other provision of law, the
14
retirement annuity of a person who made the election under
15
subsection (b) shall be subject to annual increases on the
16
January 1 occurring either on or after the attainment of age 67
17
or the first anniversary of the annuity start date, whichever
18
is later. Each annual increase shall be calculated at 1.5% of
19
the originally granted retirement annuity.
20

(b-6) Notwithstanding any other provision of law, a
21
widow's annuity payable to a widow's annuity beneficiary of a
22
person who made the election under subsection (b) shall be
23
subject to annual increases on the January 1 occurring on or
24
after the first anniversary of the commencement of the
25
annuity. Each annual increase shall be calculated at 1.5% of
26
the originally granted widow's annuity.

SB3404 Engrossed
- 46 -
LRB104 18864 RPS 32309 b
1

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

(1) the calculation of any future automatic annual
5

increase in retirement annuity shall be calculated in
6

accordance with the formula provided under subsection
7

(b-5); and
8

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

repaid to the Fund.
10

(d) As a condition of receiving an accelerated pension
11
benefit payment, the accelerated pension benefit payment must
12
be transferred into a tax qualified retirement plan or
13
account. The accelerated pension benefit payment under this
14
Section may be subject to withholding or payment of applicable
15
taxes, but to the extent permitted by federal law, a person who
16
receives an accelerated pension benefit payment under this
17
Section must direct the Fund to pay all of that payment as a
18
rollover into another retirement plan or account qualified
19
under the Internal Revenue Code of 1986, as amended.
20

(d-5) Before accepting a member's irrevocable election to
21
receive an accelerated pension benefit payment under this
22
Section, the Fund shall verify that it has a sufficient amount
23
of moneys to pay for the accelerated pension benefit payment
24
from the contribution remitted by the employer for that
25
purpose. Moneys remitted to the Fund for the purpose of this
26
program must be kept in a separate account. If the Fund

SB3404 Engrossed
- 47 -
LRB104 18864 RPS 32309 b
1
determines it does not have sufficient moneys to make the
2
accelerated pension benefit payment, then the Fund shall not
3
accept the member's irrevocable election and shall notify the
4
member of that fact. The member may reapply for the
5
accelerated pension benefit payment after that fiscal year.
6
Elections shall be processed and paid in the order in which
7
complete applications are received by the Fund, subject to the
8
availability of funds. If the Fund accepts the member's
9
irrevocable election to receive an accelerated pension benefit
10
payment under this Section, then the Fund shall transfer, from
11
the moneys remitted to the Fund for that purpose, the amount of
12
the accelerated pension benefit payment into the member's
13
eligible retirement plan or qualified account. If any moneys
14
remain in the account at the end of the fiscal year, the Fund
15
must remit those moneys back to the employer within one month
16
after the end of the fiscal year, unless the employer notifies
17
the Fund at least one month before the end of the fiscal year
18
that the funds shall remain in the account to be used for the
19
accelerated pension benefit program for the subsequent fiscal
20
year.
21

(e) The Board shall adopt any rules, including emergency
22
rules, necessary to implement this Section.
23

(f) No provision of this Section shall be interpreted in a
24
way that would cause the Fund to cease to be a qualified plan
25
under the Internal Revenue Code of 1986.

SB3404 Engrossed
- 48 -
LRB104 18864 RPS 32309 b
1

(40 ILCS 5/10-104.6 new)
2

Sec. 10-104.6.
Accelerated pension benefit payment in lieu
3
of any pension benefit.
4

(a) As used in this Section:
5

"Eligible person" means a person who:
6

(1) has terminated service;
7

(2) has accrued sufficient service credit to be
8

eligible to receive a retirement annuity under this
9

Article;
10

(3) has not received any retirement annuity under this
11

Article; and
12

(4) has not made the election under Section 10-104.7.
13

"Pension benefit" means the benefits under this Article,
14
or Article 1 as it relates to those benefits, including any
15
anticipated annual increases, that an eligible person is
16
entitled to upon attainment of the applicable retirement age.
17
"Pension benefit" also includes applicable survivor's,
18
widow's, or disability benefits.
19

(b) If an employer has elected to provide funding for an
20
accelerated pension benefit program, then as soon as practical
21
after June 30, 2026 or as soon as practical after the employer
22
has made that election, whichever is later, the Fund shall
23
calculate, using actuarial tables and other assumptions
24
adopted by the Board, the present value of pension benefits
25
for each eligible person who requests that information and
26
shall offer each eligible person the opportunity to

SB3404 Engrossed
- 49 -
LRB104 18864 RPS 32309 b
1
irrevocably elect to receive an amount determined by the Fund
2
to be equal to 60% of the present value of his or her pension
3
benefits in lieu of receiving any pension benefit. The offer
4
shall specify the dollar amount that the eligible person will
5
receive if he or she so elects and shall expire when a
6
subsequent offer is made to an eligible person. An eligible
7
person is limited to one calculation and offer per fiscal
8
year. The Fund shall make a good faith effort to contact every
9
eligible person to notify him or her of the election.
10

Until June 30, 2028, an eligible person may irrevocably
11
elect to receive an accelerated pension benefit payment in the
12
amount that the Fund offers under this subsection in lieu of
13
receiving any pension benefit. A person who elects to receive
14
an accelerated pension benefit payment under this Section may
15
not elect to proceed under the Retirement Systems Reciprocal
16
Act with respect to service 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.
23

(d) If a person who has received an accelerated pension
24
benefit payment under this Section returns to active service
25
under this Article, then:
26

(1) Any benefits under the Fund earned as a result of

SB3404 Engrossed
- 50 -
LRB104 18864 RPS 32309 b
1

that return to active service shall be based solely on the
2

person's creditable service arising from the return to
3

active service.
4

(2) The accelerated pension benefit payment may not be
5

repaid to the Fund, and the terminated creditable service
6

may not under any circumstances be reinstated.
7

(e) As a condition of receiving an accelerated pension
8
benefit payment, the accelerated pension benefit payment must
9
be transferred into a tax qualified retirement plan or
10
account. The accelerated pension benefit payment under this
11
Section may be subject to withholding or payment of applicable
12
taxes, but to the extent permitted by federal law, a person who
13
receives an accelerated pension benefit payment under this
14
Section must direct the Fund to pay all of that payment as a
15
rollover into another retirement plan or account qualified
16
under the Internal Revenue Code of 1986, as amended.
17

(f) Before accepting a member's irrevocable election to
18
receive an accelerated pension benefit payment under this
19
Section, the Fund shall verify that it has a sufficient amount
20
of moneys to pay for the accelerated pension benefit payment
21
from the contribution remitted by the employer for that
22
purpose. Moneys remitted to the Fund for the purpose of the
23
accelerated pension benefit program must be kept in a separate
24
account. If the Fund determines it does not have sufficient
25
moneys to make the accelerated pension benefit payment, then
26
the Fund shall not accept the member's irrevocable election

SB3404 Engrossed
- 51 -
LRB104 18864 RPS 32309 b
1
and shall notify the member of that fact. The member may
2
reapply for the accelerated pension benefit payment after that
3
fiscal year. Elections shall be processed and paid in the
4
order in which complete applications are received by the Fund,
5
subject to the availability of funds. If the Fund accepts the
6
member's irrevocable election to receive an accelerated
7
pension benefit payment under this Section, then the Fund
8
shall transfer, from the moneys remitted to the Fund for that
9
purpose, the amount of the accelerated pension benefit payment
10
into the member's eligible retirement plan or qualified
11
account. If any moneys remain in the account maintained by the
12
Fund for the purpose of the accelerated pension benefit
13
program at the end of the fiscal year, the Fund must remit
14
those moneys back to the employer within one month after the
15
end of the fiscal year, unless the employer notifies the Fund
16
at least one month before the end of the fiscal year that the
17
funds shall remain in the account to be used for the subsequent
18
fiscal year.
19

(g) The Board shall adopt any rules, including emergency
20
rules, necessary to implement this Section.
21

(h) No provision of this Section shall be interpreted in a
22
way that would cause the Fund to cease to be a qualified plan
23
under the Internal Revenue Code of 1986.

24

(40 ILCS 5/10-104.7 new)
25

Sec. 10-104.7.
Accelerated pension benefit payment for a

SB3404 Engrossed
- 52 -
LRB104 18864 RPS 32309 b
1
reduction in annual retirement annuity and widow's annuity
2
increases.
3

(a) As used in this Section:
4

"Accelerated pension benefit payment" means a lump sum
5
payment equal to 70% of the difference of the present value of
6
the automatic annual increases to a Tier 1 member's retirement
7
annuity and widow's annuity using the formula applicable to
8
the Tier 1 member and the present value of the automatic annual
9
increases to the Tier 1 member's retirement annuity using the
10
formula provided under subsection (b-5) and widow's annuity
11
using the formula provided under subsection (b-6). "Eligible
12
person" means a person who:
13

(1) is a Tier 1 member;
14

(2) has submitted an application for a retirement
15

annuity under this Article;
16

(3) meets the age and service requirements for
17

receiving a retirement annuity under this Article;
18

(4) has not received any retirement annuity under this
19

Article; and
20

(5) has not made the election under Section 10-104.6.
21

"Tier 1 member" means a person who first became a
22
participant under this Article or any reciprocal retirement
23
system or pension fund established under this Code before
24
January 1, 2011.
25

(b) Until June 30, 2028, if an employer elects to provide
26
funding for an accelerated pension benefit program, then as

SB3404 Engrossed
- 53 -
LRB104 18864 RPS 32309 b
1
soon as practical after June 30, 2026 or as soon as practical
2
after the employer makes that election, whichever is later,
3
the Fund shall implement an accelerated pension benefit
4
payment option for eligible persons. Upon the request of an
5
eligible person, if the employer has elected to provide
6
funding for an accelerated pension benefit program, the Fund
7
shall calculate, using actuarial tables and other assumptions
8
adopted by the Board, an accelerated pension benefit payment
9
amount and shall offer that eligible person the opportunity to
10
irrevocably elect to have his or her automatic annual
11
increases in retirement annuity calculated in accordance with
12
the formula provided under subsection (b-5) 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 pension otherwise
16
payable under this Article. An eligible person is limited to
17
one calculation and offer per fiscal year.
18

(b-5) Notwithstanding any other provision of law, the
19
retirement annuity of a person who made the election under
20
subsection (b) shall be subject to annual increases on the
21
January 1 occurring either on or after the attainment of age 67
22
or the first anniversary of the annuity start date, whichever
23
is later. Each annual increase shall be calculated at 1.5% of
24
the originally granted retirement annuity.
25

(b-6) Notwithstanding any other provision of law, a
26
widow's annuity payable to a widow's annuity beneficiary of a

SB3404 Engrossed
- 54 -
LRB104 18864 RPS 32309 b
1
person who made the election under subsection (b) shall be
2
subject to annual increases on the January 1 occurring on or
3
after the first anniversary of the commencement of the
4
annuity. Each annual increase shall be calculated at 1.5% of
5
the originally granted widow's annuity.
6

(c) If a person who has received an accelerated pension
7
benefit payment returns to active service under this Article,
8
then:
9

(1) the calculation of any future automatic annual
10

increase in retirement annuity shall be calculated in
11

accordance with the formula provided under subsection
12

(b-5); and
13

(2) the accelerated pension benefit payment may not be
14

repaid to the Fund.
15

(d) As a condition of receiving an accelerated pension
16
benefit payment, the accelerated pension benefit payment must
17
be transferred into a tax qualified retirement plan or
18
account. The accelerated pension benefit payment under this
19
Section may be subject to withholding or payment of applicable
20
taxes, but to the extent permitted by federal law, a person who
21
receives an accelerated pension benefit payment under this
22
Section must direct the Fund to pay all of that payment as a
23
rollover into another retirement plan or account qualified
24
under the Internal Revenue Code of 1986, as amended.
25

(d-5) Before accepting a member's irrevocable election to
26
receive an accelerated pension benefit payment under this

SB3404 Engrossed
- 55 -
LRB104 18864 RPS 32309 b
1
Section, the Fund shall verify that it has a sufficient amount
2
of moneys to pay for the accelerated pension benefit payment
3
from the contribution remitted by the employer for that
4
purpose. Moneys remitted to the Fund for the purpose of this
5
program must be kept in a separate account. If the Fund
6
determines it does not have sufficient moneys to make the
7
accelerated pension benefit payment, then the Fund shall not
8
accept the member's irrevocable election and shall notify the
9
member of that fact. The member may reapply for the
10
accelerated pension benefit payment after that fiscal year.
11
Elections shall be processed and paid in the order in which
12
complete applications are received by the Fund, subject to the
13
availability of funds. If the Fund accepts the member's
14
irrevocable election to receive an accelerated pension benefit
15
payment under this Section, then the Fund shall transfer, from
16
the moneys remitted to the Fund for that purpose, the amount of
17
the accelerated pension benefit payment into the member's
18
eligible retirement plan or qualified account. If any moneys
19
remain in the account at the end of the fiscal year, the Fund
20
must remit those moneys back to the employer within one month
21
after the end of the fiscal year, unless the employer notifies
22
the Fund at least one month before the end of the fiscal year
23
that the funds shall remain in the account to be used for the
24
accelerated pension benefit program for the subsequent fiscal
25
year.
26

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

SB3404 Engrossed
- 56 -
LRB104 18864 RPS 32309 b
1
rules, necessary to implement this Section.
2

(f) No provision of this Section shall be interpreted in a
3
way that would cause the Fund to cease to be a qualified plan
4
under the Internal Revenue Code of 1986.

5

(40 ILCS 5/11-223.5 new)
6

Sec. 11-223.5.
Accelerated pension benefit payment in lieu
7
of any pension benefit.
8

(a) As used in this Section:
9

"Eligible person" means a person who:
10

(1) has terminated service;
11

(2) has accrued sufficient service credit to be
12

eligible to receive a retirement annuity under this
13

Article;
14

(3) has not received any retirement annuity under this
15

Article; and
16

(4) has not made the election under Section 11-223.6.
17

"Pension benefit" means the benefits under this Article,
18
or Article 1 as it relates to those benefits, including any
19
anticipated annual increases, that an eligible person is
20
entitled to upon attainment of the applicable retirement age.
21
"Pension benefit" also includes applicable survivor's,
22
widow's, or disability benefits.
23

(b) If the city has elected to provide funding for an
24
accelerated pension benefit program, then as soon as practical
25
after June 30, 2026 or as soon as practical after the city has

SB3404 Engrossed
- 57 -
LRB104 18864 RPS 32309 b
1
made that election, whichever is later, the Fund shall
2
calculate, using actuarial tables and other assumptions
3
adopted by the Board, the present value of pension benefits
4
for each eligible person who requests that information and
5
shall offer each eligible person the opportunity to
6
irrevocably elect to receive an amount determined by the Fund
7
to be equal to 60% of the present value of his or her pension
8
benefits in lieu of receiving any pension benefit. The offer
9
shall specify the dollar amount that the eligible person will
10
receive if he or she so elects and shall expire when a
11
subsequent offer is made to an eligible person. An eligible
12
person is limited to one calculation and offer per fiscal
13
year. The Fund shall make a good faith effort to contact every
14
eligible person to notify him or her of the election.
15

Until June 30, 2028, an eligible person may irrevocably
16
elect to receive an accelerated pension benefit payment in the
17
amount that the Fund offers under this subsection in lieu of
18
receiving any pension benefit. A person who elects to receive
19
an accelerated pension benefit payment under this Section may
20
not elect to proceed under the Retirement Systems Reciprocal
21
Act with respect to service under this Article.
22

(c) A person's creditable service under this Article shall
23
be terminated upon the person's receipt of an accelerated
24
pension benefit payment under this Section, and no other
25
benefit shall be paid under this Article based on the
26
terminated creditable service, including any retirement,

SB3404 Engrossed
- 58 -
LRB104 18864 RPS 32309 b
1
survivor, widow, or other benefit.
2

(d) If a person who has received an accelerated pension
3
benefit payment under this Section returns to active service
4
under this Article, then:
5

(1) Any benefits under the Fund earned as a result of
6

that return to active service shall be based solely on the
7

person's creditable service arising from the return to
8

active service.
9

(2) The accelerated pension benefit payment may not be
10

repaid to the Fund, and the terminated creditable service
11

may not under any circumstances be reinstated.
12

(e) As a condition of receiving an accelerated pension
13
benefit payment, the accelerated pension benefit payment must
14
be transferred into a tax qualified retirement plan or
15
account. The accelerated pension benefit payment under this
16
Section may be subject to withholding or payment of applicable
17
taxes, but to the extent permitted by federal law, a person who
18
receives an accelerated pension benefit payment under this
19
Section must direct the Fund to pay all of that payment as a
20
rollover into another retirement plan or account qualified
21
under the Internal Revenue Code of 1986, as amended.
22

(f) Before accepting a member's irrevocable election to
23
receive an accelerated pension benefit payment under this
24
Section, the Fund shall verify that it has a sufficient amount
25
of moneys to pay for the accelerated pension benefit payment
26
from the contribution remitted by the city for that purpose.

SB3404 Engrossed
- 59 -
LRB104 18864 RPS 32309 b
1
Moneys remitted to the Fund for the purpose of the accelerated
2
pension benefit program must be kept in a separate account. If
3
the Fund determines it does not have sufficient moneys to make
4
the accelerated pension benefit payment, then the Fund shall
5
not accept the member's irrevocable election and shall notify
6
the member of that fact. The member may reapply for the
7
accelerated pension benefit payment after that fiscal year.
8
Elections shall be processed and paid in the order in which
9
complete applications are received by the Fund, subject to the
10
availability of funds. If the Fund accepts the member's
11
irrevocable election to receive an accelerated pension benefit
12
payment under this Section, then the Fund shall transfer, from
13
the moneys remitted to the Fund for that purpose, the amount of
14
the accelerated pension benefit payment into the member's
15
eligible retirement plan or qualified account. If any moneys
16
remain in the account maintained by the Fund for the purpose of
17
the accelerated pension benefit program at the end of the
18
fiscal year, the Fund must remit those moneys back to the city
19
within one month after the end of the fiscal year, unless the
20
city notifies the Fund at least one month before the end of the
21
fiscal year that the funds shall remain in the account to be
22
used for the subsequent fiscal year.
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 Fund to cease to be a qualified plan

SB3404 Engrossed
- 60 -
LRB104 18864 RPS 32309 b
1
under the Internal Revenue Code of 1986.

2

(40 ILCS 5/11-223.6 new)
3

Sec. 11-223.6.
Accelerated pension benefit payment for a
4
reduction in annual retirement annuity and widow's annuity
5
increases.
6

(a) As used in this Section:
7

"Accelerated pension benefit payment" means a lump sum
8
payment equal to 70% of the difference of the present value of
9
the automatic annual increases to a Tier 1 member's retirement
10
annuity and widow's annuity using the formula applicable to
11
the Tier 1 member and the present value of the automatic annual
12
increases to the Tier 1 member's retirement annuity using the
13
formula provided under subsection (b-5).
14

"Eligible person" means a person who:
15

(1) is a Tier 1 member;
16

(2) has submitted an application for a retirement
17

annuity under this Article;
18

(3) meets the age and service requirements for
19

receiving a retirement annuity under this Article;
20

(4) has not received any retirement annuity under this
21

Article; and
22

(5) has not made the election under Section 11-223.5.
23

"Tier 1 member" means a person who first became a
24
participant under this Article or any reciprocal retirement
25
system or pension fund established under this Code before

SB3404 Engrossed
- 61 -
LRB104 18864 RPS 32309 b
1
January 1, 2011.
2

(b) Until June 30, 2028, if the city elects to provide
3
funding for an accelerated pension benefit program, then as
4
soon as practical after June 30, 2026 or as soon as practical
5
after the city makes that election, whichever is later, the
6
Fund shall implement an accelerated pension benefit payment
7
option for eligible persons. Upon the request of an eligible
8
person, if the city has elected to provide funding for an
9
accelerated pension benefit program, the Fund shall calculate,
10
using actuarial tables and other assumptions adopted by the
11
Board, an accelerated pension benefit payment amount and shall
12
offer that eligible person the opportunity to irrevocably
13
elect to have his or her automatic annual increases in
14
retirement pension calculated in accordance with the formula
15
provided under subsection (b-5) in exchange for the
16
accelerated pension benefit payment. The election under this
17
subsection must be made before the eligible person receives
18
the first payment of a retirement pension otherwise payable
19
under this Article. An eligible person is limited to one
20
calculation and offer per fiscal year.
21

(b-5) Notwithstanding any other provision of law, the
22
retirement annuity of a person who made the election under
23
subsection (b) shall be subject to annual increases on the
24
January 1 occurring either on or after the attainment of age 67
25
or the first anniversary of the annuity start date, whichever
26
is later. Each annual increase shall be calculated at 1.5% of

SB3404 Engrossed
- 62 -
LRB104 18864 RPS 32309 b
1
the originally granted retirement annuity.
2

(c) If a person who has received an accelerated pension
3
benefit payment returns to active service under this Article,
4
then:
5

(1) the calculation of any future automatic annual
6

increase in retirement annuity shall be calculated in
7

accordance with the formula provided under subsection
8

(b-5); and
9

(2) the accelerated pension benefit payment may not be
10

repaid to the Fund.
11

(d) 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 Fund 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

(d-5) Before accepting a member's irrevocable election to
22
receive an accelerated pension benefit payment under this
23
Section, the Fund shall verify that it has a sufficient amount
24
of moneys to pay for the accelerated pension benefit payment
25
from the contribution remitted by the city for that purpose.
26
Moneys remitted to the Fund for the purpose of this program

SB3404 Engrossed
- 63 -
LRB104 18864 RPS 32309 b
1
must be kept in a separate account. If the Fund determines it
2
does not have sufficient moneys to make the accelerated
3
pension benefit payment, then the Fund shall not accept the
4
member's irrevocable election and shall notify the member of
5
that fact. The member may reapply for the accelerated pension
6
benefit payment after that fiscal year. Elections shall be
7
processed and paid in the order in which complete applications
8
are received by the Fund, subject to the availability of
9
funds. If the Fund accepts the member's irrevocable election
10
to receive an accelerated pension benefit payment under this
11
Section, then the Fund shall transfer, from the moneys
12
remitted to the Fund for that purpose, the amount of the
13
accelerated pension benefit payment into the member's eligible
14
retirement plan or qualified account. If any moneys remain in
15
the account at the end of the fiscal year, the Fund must remit
16
those moneys back to the city within one month after the end of
17
the fiscal year, unless the city notifies the Fund at least one
18
month before the end of the fiscal year that the funds shall
19
remain in the account to be used for the accelerated pension
20
benefit program for the subsequent fiscal year.
21

(e) The Board shall adopt any rules, including emergency
22
rules, necessary to implement this Section.
23

(f) No provision of this Section shall be interpreted in a
24
way that would cause the Fund to cease to be a qualified plan
25
under the Internal Revenue Code of 1986.

SB3404 Engrossed
- 64 -
LRB104 18864 RPS 32309 b
1

(40 ILCS 5/12-133.8 new)
2

Sec. 12-133.8.
Accelerated pension benefit payment in lieu
3
of any pension benefit.
4

(a) As used in this Section:
5

"Eligible person" means a person who:
6

(1) has terminated service;
7

(2) has accrued sufficient service credit to be
8

eligible to receive a retirement annuity under this
9

Article;
10

(3) has not received any retirement annuity under this
11

Article; and
12

(4) has not made the election under Section 12-133.9.
13

"Pension benefit" means the benefits under this Article,
14
or Article 1 as it relates to those benefits, including any
15
anticipated annual increases, that an eligible person is
16
entitled to upon attainment of the applicable retirement age.
17
"Pension benefit" also includes applicable survivor's,
18
surviving spouse's, or disability benefits.
19

(b) If the city has elected to provide funding for an
20
accelerated pension benefit program, then as soon as practical
21
after June 30, 2026 or as soon as practical after the city has
22
made that election, whichever is later, the Fund shall
23
calculate, using actuarial tables and other assumptions
24
adopted by the Board, the present value of pension benefits
25
for each eligible person who requests that information and
26
shall offer each eligible person the opportunity to

SB3404 Engrossed
- 65 -
LRB104 18864 RPS 32309 b
1
irrevocably elect to receive an amount determined by the Fund
2
to be equal to 60% of the present value of his or her pension
3
benefits in lieu of receiving any pension benefit. The offer
4
shall specify the dollar amount that the eligible person will
5
receive if he or she so elects and shall expire when a
6
subsequent offer is made to an eligible person. An eligible
7
person is limited to one calculation and offer per fiscal
8
year. The Fund shall make a good faith effort to contact every
9
eligible person to notify him or her of the election.
10

Until June 30, 2028, an eligible person may irrevocably
11
elect to receive an accelerated pension benefit payment in the
12
amount that the Fund offers under this subsection in lieu of
13
receiving any pension benefit. A person who elects to receive
14
an accelerated pension benefit payment under this Section may
15
not elect to proceed under the Retirement Systems Reciprocal
16
Act with respect to service 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.
23

(d) If a person who has received an accelerated pension
24
benefit payment under this Section returns to active service
25
under this Article, then:
26

(1) Any benefits under the Fund earned as a result of

SB3404 Engrossed
- 66 -
LRB104 18864 RPS 32309 b
1

that return to active service shall be based solely on the
2

person's creditable service arising from the return to
3

active service.
4

(2) The accelerated pension benefit payment may not be
5

repaid to the Fund, and the terminated creditable service
6

may not under any circumstances be reinstated.
7

(e) As a condition of receiving an accelerated pension
8
benefit payment, the accelerated pension benefit payment must
9
be transferred into a tax qualified retirement plan or
10
account. The accelerated pension benefit payment under this
11
Section may be subject to withholding or payment of applicable
12
taxes, but to the extent permitted by federal law, a person who
13
receives an accelerated pension benefit payment under this
14
Section must direct the Fund to pay all of that payment as a
15
rollover into another retirement plan or account qualified
16
under the Internal Revenue Code of 1986, as amended.
17

(f) Before accepting a member's irrevocable election to
18
receive an accelerated pension benefit payment under this
19
Section, the Fund shall verify that it has a sufficient amount
20
of moneys to pay for the accelerated pension benefit payment
21
from the contribution remitted by the city for that purpose.
22
Moneys remitted to the Fund for the purpose of the accelerated
23
pension benefit program must be kept in a separate account. If
24
the Fund determines it does not have sufficient moneys to make
25
the accelerated pension benefit payment, then the Fund shall
26
not accept the member's irrevocable election and shall notify

SB3404 Engrossed
- 67 -
LRB104 18864 RPS 32309 b
1
the member of that fact. The member may reapply for the
2
accelerated pension benefit payment after that fiscal year.
3
Elections shall be processed and paid in the order in which
4
complete applications are received by the Fund, subject to the
5
availability of funds. If the Fund accepts the member's
6
irrevocable election to receive an accelerated pension benefit
7
payment under this Section, then the Fund shall transfer, from
8
the moneys remitted to the Fund for that purpose, the amount of
9
the accelerated pension benefit payment into the member's
10
eligible retirement plan or qualified account. If any moneys
11
remain in the account maintained by the Fund for the purpose of
12
the accelerated pension benefit program at the end of the
13
fiscal year, the Fund must remit those moneys back to the city
14
within one month after the end of the fiscal year, unless the
15
city notifies the Fund at least one month before the end of the
16
fiscal year that the funds shall remain in the account to be
17
used for the subsequent fiscal year.
18

(g) The Board shall adopt any rules, including emergency
19
rules, necessary to implement this Section.
20

(h) No provision of this Section shall be interpreted in a
21
way that would cause the Fund to cease to be a qualified plan
22
under the Internal Revenue Code of 1986.

23

(40 ILCS 5/12-133.9 new)
24

Sec. 12-133.9.
Accelerated pension benefit payment for a
25
reduction in annual retirement annuity and surviving spouse's

SB3404 Engrossed
- 68 -
LRB104 18864 RPS 32309 b
1
annuity increases.
2

(a) As used in this Section:
3

"Accelerated pension benefit payment" means a lump sum
4
payment equal to 70% of the difference of the present value of
5
the automatic annual increases to a Tier 1 member's retirement
6
annuity and surviving spouse's annuity using the formula
7
applicable to the Tier 1 member and the present value of the
8
automatic annual increases to the Tier 1 member's retirement
9
annuity using the formula provided under subsection (b-5) and
10
surviving spouse's annuity using the formula provided under
11
subsection (b-6). "Eligible person" means a person who:
12

(1) is a Tier 1 member;
13

(2) has submitted an application for a retirement
14

annuity under this Article;
15

(3) meets the age and service requirements for
16

receiving a retirement annuity under this Article;
17

(4) has not received any retirement annuity under this
18

Article; and
19

(5) has not made the election under Section 12-133.8.
20

"Tier 1 member" means a person who first became a
21
participant under this Article or any reciprocal retirement
22
system or pension fund established under this Code before
23
January 1, 2011.
24

(b) Until June 30, 2028, if the city elects to provide
25
funding for an accelerated pension benefit program, then as
26
soon as practical after June 30, 2026 or as soon as practical

SB3404 Engrossed
- 69 -
LRB104 18864 RPS 32309 b
1
after the city makes that election, whichever is later, the
2
Fund shall implement an accelerated pension benefit payment
3
option for eligible persons. Upon the request of an eligible
4
person, if the city has elected to provide funding for an
5
accelerated pension benefit program, the Fund shall calculate,
6
using actuarial tables and other assumptions adopted by the
7
Board, an accelerated pension benefit payment amount and shall
8
offer that eligible person the opportunity to irrevocably
9
elect to have his or her automatic annual increases in
10
retirement pension calculated in accordance with the formula
11
provided under subsection (b-5) in exchange for the
12
accelerated pension benefit payment. The election under this
13
subsection must be made before the eligible person receives
14
the first payment of a retirement pension otherwise payable
15
under this Article. An eligible person is limited to one
16
calculation and offer per fiscal year.
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
surviving spouse's annuity payable to a surviving spouse's
26
annuity beneficiary of a person who made the election under

SB3404 Engrossed
- 70 -
LRB104 18864 RPS 32309 b
1
subsection (b) shall be subject to annual increases on the
2
January 1 occurring on or after the first anniversary of the
3
commencement of the annuity. Each annual increase shall be
4
calculated at 1.5% of the originally granted surviving
5
spouse's annuity.
6

(c) If a person who has received an accelerated pension
7
benefit payment returns to active service under this Article,
8
then:
9

(1) the calculation of any future automatic annual
10

increase in retirement annuity shall be calculated in
11

accordance with the formula provided under subsection
12

(b-5); and
13

(2) the accelerated pension benefit payment may not be
14

repaid to the Fund.
15

(d) As a condition of receiving an accelerated pension
16
benefit payment, the accelerated pension benefit payment must
17
be transferred into a tax qualified retirement plan or
18
account. The accelerated pension benefit payment under this
19
Section may be subject to withholding or payment of applicable
20
taxes, but to the extent permitted by federal law, a person who
21
receives an accelerated pension benefit payment under this
22
Section must direct the Fund to pay all of that payment as a
23
rollover into another retirement plan or account qualified
24
under the Internal Revenue Code of 1986, as amended.
25

(d-5) Before accepting a member's irrevocable election to
26
receive an accelerated pension benefit payment under this

SB3404 Engrossed
- 71 -
LRB104 18864 RPS 32309 b
1
Section, the Fund shall verify that it has a sufficient amount
2
of moneys to pay for the accelerated pension benefit payment
3
from the contribution remitted by the city for that purpose.
4
Moneys remitted to the Fund for the purpose of this program
5
must be kept in a separate account. If the Fund determines it
6
does not have sufficient moneys to make the accelerated
7
pension benefit payment, then the Fund shall not accept the
8
member's irrevocable election and shall notify the member of
9
that fact. The member may reapply for the accelerated pension
10
benefit payment after that fiscal year. Elections shall be
11
processed and paid in the order in which complete applications
12
are received by the Fund, subject to the availability of
13
funds. If the Fund accepts the member's irrevocable election
14
to receive an accelerated pension benefit payment under this
15
Section, then the Fund shall transfer, from the moneys
16
remitted to the Fund for that purpose, the amount of the
17
accelerated pension benefit payment into the member's eligible
18
retirement plan or qualified account. If any moneys remain in
19
the account at the end of the fiscal year, the Fund must remit
20
those moneys back to the city within one month after the end of
21
the fiscal year, unless the city notifies the Fund at least one
22
month before the end of the fiscal year that the funds shall
23
remain in the account to be used for the accelerated pension
24
benefit program for the subsequent fiscal year.
25

(e) The Board shall adopt any rules, including emergency
26
rules, necessary to implement this Section.

SB3404 Engrossed
- 72 -
LRB104 18864 RPS 32309 b
1

(f) No provision of this Section shall be interpreted in a
2
way that would cause the Fund to cease to be a qualified plan
3
under the Internal Revenue Code of 1986.

4

(40 ILCS 5/17-120.5 new)
5

Sec. 17-120.5.
Accelerated pension benefit payment in lieu
6
of any pension benefit.

7

(a) As used in this Section:
8

"Eligible person" means a person who:
9

(1) has terminated service;
10

(2) has accrued sufficient service credit to be
11

eligible to receive a retirement annuity under this
12

Article;
13

(3) has not received any retirement annuity under this
14

Article; and
15

(4) has not made the election under Section 17-120.6.
16

"Pension benefit" means the benefits under this Article,
17
or Article 1 as it relates to those benefits, including any
18
anticipated annual increases, that an eligible person is
19
entitled to upon attainment of the applicable retirement age.
20
"Pension benefit" also includes applicable survivor's,
21
surviving spouse's, or disability benefits.
22

(b) If an employer has elected to provide funding for an
23
accelerated pension benefit program, then as soon as practical
24
after June 30, 2026 or as soon as practical after the employer
25
has made that election, whichever is later, the Fund shall

SB3404 Engrossed
- 73 -
LRB104 18864 RPS 32309 b
1
calculate, using actuarial tables and other assumptions
2
adopted by the Board, the present value of pension benefits
3
for each eligible person who requests that information and
4
shall offer each eligible person the opportunity to
5
irrevocably elect to receive an amount determined by the Fund
6
to be equal to 60% of the present value of his or her pension
7
benefits in lieu of receiving any pension benefit. The offer
8
shall specify the dollar amount that the eligible person will
9
receive if he or she so elects and shall expire when a
10
subsequent offer is made to an eligible person. An eligible
11
person is limited to one calculation and offer per fiscal
12
year. The Fund shall make a good faith effort to contact every
13
eligible person to notify him or her of the election.
14

Until June 30, 2028, an eligible person may irrevocably
15
elect to receive an accelerated pension benefit payment in the
16
amount that the Fund offers under this subsection in lieu of
17
receiving any pension benefit. A person who elects to receive
18
an accelerated pension benefit payment under this Section may
19
not elect to proceed under the Retirement Systems Reciprocal
20
Act with respect to service under this Article.
21

(c) A person's creditable service under this Article shall
22
be terminated upon the person's receipt of an accelerated
23
pension benefit payment under this Section, and no other
24
benefit shall be paid under this Article based on the
25
terminated creditable service, including any retirement,
26
survivor, or other benefit.

SB3404 Engrossed
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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 Fund earned as a result of
5

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

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 Fund, and the terminated creditable service
10

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 Fund 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) Before accepting a member's irrevocable election to
22
receive an accelerated pension benefit payment under this
23
Section, the Fund shall verify that it has a sufficient amount
24
of moneys to pay for the accelerated pension benefit payment
25
from the contribution remitted by the employer for that
26
purpose. Moneys remitted to the Fund for the purpose of the

SB3404 Engrossed
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1
accelerated pension benefit program must be kept in a separate
2
account. If the Fund determines it does not have sufficient
3
moneys to make the accelerated pension benefit payment, then
4
the Fund shall not accept the member's irrevocable election
5
and shall notify the member of that fact. The member may
6
reapply for the accelerated pension benefit payment after that
7
fiscal year. Elections shall be processed and paid in the
8
order in which complete applications are received by the Fund,
9
subject to the availability of funds. If the Fund accepts the
10
member's irrevocable election to receive an accelerated
11
pension benefit payment under this Section, then the Fund
12
shall transfer, from the moneys remitted to the Fund for that
13
purpose, the amount of the accelerated pension benefit payment
14
into the member's eligible retirement plan or qualified
15
account. If any moneys remain in the account maintained by the
16
Fund for the purpose of the accelerated pension benefit
17
program at the end of the fiscal year, the Fund must remit
18
those moneys back to the employer within one month after the
19
end of the fiscal year, unless the employer notifies the Fund
20
at least one month before the end of the fiscal year that the
21
funds shall remain in the account to be used for the subsequent
22
fiscal year.
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 Fund to cease to be a qualified plan

SB3404 Engrossed
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1
under the Internal Revenue Code of 1986.

2

(40 ILCS 5/17-120.6 new)
3

Sec. 17-120.6.
Accelerated pension benefit payment for a
4
reduction in annual retirement annuity and surviving spouse's
5
annuity increases.

6

(a) As used in this Section:
7

"Accelerated pension benefit payment" means a lump sum
8
payment equal to 70% of the difference of the present value of
9
the automatic annual increases to a Tier 1 member's retirement
10
annuity and surviving spouse's annuity using the formula
11
applicable to the Tier 1 member and the present value of the
12
automatic annual increases to the Tier 1 member's retirement
13
annuity using the formula provided under subsection (b-5) and
14
surviving spouse's annuity using the formula provided under
15
subsection (b-6). "Eligible person" means a person who:
16

(1) is a Tier 1 member;
17

(2) has submitted an application for a retirement
18

annuity under this Article;
19

(3) meets the age and service requirements for
20

receiving a retirement annuity under this Article;
21

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

Article; and
23

(5) has not made the election under Section 17-120.5.
24

"Tier 1 member" means a person who first became a
25
participant under this Article or any reciprocal retirement

SB3404 Engrossed
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1
system or pension fund established under this Code before
2
January 1, 2011.
3

(b) Until June 30, 2028, if an employer elects to provide
4
funding for an accelerated pension benefit program, then as
5
soon as practical after June 30, 2026 or as soon as practical
6
after the employer makes that election, whichever is later,
7
the Fund shall implement an accelerated pension benefit
8
payment option for eligible persons. Upon the request of an
9
eligible person, if the employer has elected to provide
10
funding for an accelerated pension benefit program, the Fund
11
shall calculate, using actuarial tables and other assumptions
12
adopted by the Board, an accelerated pension benefit payment
13
amount and shall offer that eligible person the opportunity to
14
irrevocably elect to have his or her automatic annual
15
increases in retirement pension calculated in accordance with
16
the formula provided under subsection (b-5) in exchange for
17
the accelerated pension benefit payment. The election under
18
this subsection must be made before the eligible person
19
receives the first payment of a retirement pension otherwise
20
payable under this Article. An eligible person is limited to
21
one calculation and offer per fiscal year.
22

(b-5) Notwithstanding any other provision of law, the
23
retirement annuity of a person who made the election under
24
subsection (b) shall be subject to annual increases on the
25
January 1 occurring either on or after the attainment of age 67
26
or the first anniversary of the annuity start date, whichever

SB3404 Engrossed
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1
is later. Each annual increase shall be calculated at 1.5% of
2
the originally granted retirement annuity.
3

(b-6) Notwithstanding any other provision of law, a
4
surviving spouse's annuity payable to a surviving spouse's
5
annuity beneficiary of a person who made the election under
6
subsection (b) shall be subject to annual increases on the
7
January 1 occurring on or after the first anniversary of the
8
commencement of the annuity. Each annual increase shall be
9
calculated at 1.5% of the originally granted surviving
10
spouse's annuity.
11

(c) If a person who has received an accelerated pension
12
benefit payment returns to active service under this Article,
13
then:
14

(1) the calculation of any future automatic annual
15

increase in retirement annuity shall be calculated in
16

accordance with the formula provided under subsection
17

(b-5); and
18

(2) the accelerated pension benefit payment may not be
19

repaid to the Fund.
20

(d) As a condition of receiving an accelerated pension
21
benefit payment, the accelerated pension benefit payment must
22
be transferred into a tax qualified retirement plan or
23
account. The accelerated pension benefit payment under this
24
Section may be subject to withholding or payment of applicable
25
taxes, but to the extent permitted by federal law, a person who
26
receives an accelerated pension benefit payment under this

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
Section must direct the Fund to pay all of that payment as a
2
rollover into another retirement plan or account qualified
3
under the Internal Revenue Code of 1986, as amended.
4

(d-5) Before accepting a member's irrevocable election to
5
receive an accelerated pension benefit payment under this
6
Section, the Fund shall verify that it has a sufficient amount
7
of moneys to pay for the accelerated pension benefit payment
8
from the contribution remitted by the employer for that
9
purpose. Moneys remitted to the Fund for the purpose of this
10
program must be kept in a separate account. If the Fund
11
determines it does not have sufficient moneys to make the
12
accelerated pension benefit payment, then the Fund shall not
13
accept the member's irrevocable election and shall notify the
14
member of that fact. The member may reapply for the
15
accelerated pension benefit payment after that fiscal year.
16
Elections shall be processed and paid in the order in which
17
complete applications are received by the Fund, subject to the
18
availability of funds. If the Fund accepts the member's
19
irrevocable election to receive an accelerated pension benefit
20
payment under this Section, then the Fund shall transfer, from
21
the moneys remitted to the Fund for that purpose, the amount of
22
the accelerated pension benefit payment into the member's
23
eligible retirement plan or qualified account. If any moneys
24
remain in the account at the end of the fiscal year, the Fund
25
must remit those moneys back to the employer within one month
26
after the end of the fiscal year, unless the employer notifies

SB3404 Engrossed
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1
the Fund at least one month before the end of the fiscal year
2
that the funds shall remain in the account to be used for the
3
accelerated pension benefit program for the subsequent fiscal
4
year.
5

(e) The Board shall adopt any rules, including emergency
6
rules, necessary to implement this Section.
7

(f) No provision of this Section shall be interpreted in a
8
way that would cause the Fund to cease to be a qualified plan
9
under the Internal Revenue Code of 1986.

10

Section 10.
The Counties Code is amended by adding Section
11
3-14050 as follows:

12

(55 ILCS 5/3-14050 new)
13

Sec. 3-14050.
Accelerated pension benefit program;
14
counties with more than 3,000,000 inhabitants.
15

(a) The county board of a county of more than 3,000,000
16
inhabitants may establish an accelerated pension benefit
17
program for the pension funds established under Articles 9 and
18
10 of the Illinois Pension Code. The accelerated pension
19
benefit program shall provide eligible participants the option
20
to elect an accelerated pension benefit payment in accordance
21
with the applicable provisions of Articles 9 and 10 of the
22
Illinois Pension Code authorizing accelerated pension benefit
23
payments.
24

(b) If the county elects to establish the accelerated

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
pension benefit program for a fiscal year beginning in 2026,
2
the county must notify the pension fund and remit a
3
contribution to the pension fund in an amount determined by
4
the county at least 30 days before the program is to be
5
implemented. If the county elects to establish the accelerated
6
pension benefit program for a fiscal year beginning in 2027,
7
the county shall remit to the pension fund, not later than 30
8
days prior to the beginning of the fiscal year for which the
9
accelerated pension benefit program is to be made available, a
10
contribution to the pension fund in an amount determined by
11
the county. The contribution shall constitute the total
12
funding available to that pension fund for accelerated pension
13
benefit payments for that fiscal year, and accelerated pension
14
benefit payments shall be issued by the applicable pension
15
fund in accordance with the provisions concerning accelerated
16
pension benefit payment until the contributed amount is
17
exhausted. The contribution for the accelerated pension
18
benefit payments may be made using any lawful funding
19
mechanism authorized under this Code, including, but not
20
limited to:

21

(1) the issuance of bonds authorized under this Code;

22

(2) lawful appropriations from available county
23

revenues;

24

(3) transfers from lawfully available funds; or

25

(4) any combination thereof.

26

Nothing in this Section shall be construed to expand or

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
limit the county's authority to issue bonds beyond those
2
otherwise provided in this Code.

3

At least one month prior to the end of the fiscal year, the
4
county must notify the pension fund if the county would desire
5
any remaining moneys to be rolled over into the next fiscal
6
year for the accelerated pension benefit program. If the
7
county does not notify the pension fund, the moneys shall be
8
remitted back to the county. If an accelerated pension benefit
9
program is not authorized under the applicable Article of the
10
Illinois Pension Code for the following fiscal year, then the
11
pension fund shall remit the moneys back to the county.
12

(c) This Section shall be construed as supplemental to
13
existing county powers and shall not be interpreted to impair
14
any existing contractual obligation or pension benefit
15
protected under the Illinois Constitution.

16

Section 15.
The Illinois Municipal Code is amended by
17
adding Section 10-4-13 as follows:

18

(65 ILCS 5/10-4-13 new)
19

Sec. 10-4-13.
Accelerated pension benefit program.

20

(a) The corporate authorities of a municipality may
21
establish an accelerated pension benefit program for the
22
pension funds established under Article 3, 4, 5, 6, 8, 11, or
23
12 of the Illinois Pension Code to which the municipality
24
contributes. The accelerated pension benefit program shall

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
provide eligible participants the option to elect an
2
accelerated pension benefit payment with regard to employees
3
of that municipality who participate in a pension fund
4
established under Article 3, 4, 5, 6, 8, 11, or 12 of the
5
Illinois Pension Code in accordance with the applicable
6
provisions of the Illinois Pension Code authorizing
7
accelerated pension benefit payments.
8

(b) If the municipality elects to establish the
9
accelerated pension benefit program for a fiscal year
10
beginning in 2026, the municipality must notify the pension
11
fund and remit a contribution to the pension fund in an amount
12
determined by the municipality at least 30 days before the
13
program is to be implemented. If the municipality elects to
14
establish the accelerated pension benefit program for a fiscal
15
year beginning in 2027, the municipality shall remit to the
16
pension fund, not later than 30 days prior to the beginning of
17
the fiscal year for which the accelerated pension benefit
18
program is to be made available, a contribution to the pension
19
fund in an amount determined by the municipality. The
20
contribution shall constitute the total funding available to
21
that pension fund for accelerated pension benefit payments for
22
that fiscal year, and accelerated pension benefit payments
23
shall be issued by the applicable pension fund in accordance
24
with the provisions concerning accelerated pension benefit
25
payment until the contributed amount is exhausted. The
26
contribution for the accelerated pension benefit payments may

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
be made using any lawful funding mechanism authorized under
2
this Code, including, but not limited to:

3

(1) the issuance of bonds authorized under this Code;

4

(2) lawful appropriations from available municipal
5

revenues;

6

(3) transfers from lawfully available funds; or

7

(4) any combination thereof.

8

Nothing in this Section shall be construed to expand or
9
limit the municipality's authority to issue bonds beyond those
10
otherwise provided in this Code.

11

At least one month prior to the end of the fiscal year, the
12
municipality must notify the pension fund if it would desire
13
any remaining moneys to be rolled over into the next fiscal
14
year for the accelerated pension benefit program. If the
15
municipality does not notify the pension fund, the moneys
16
shall be remitted back to the municipality. If an accelerated
17
pension benefit program is not authorized under the applicable
18
Article of the Illinois Pension Code for the following fiscal
19
year, then the pension fund shall remit the moneys back to the
20
municipality.
21

(c) This Section shall be construed as supplemental to
22
existing municipal powers and shall not be interpreted to
23
impair any existing contractual obligation or pension benefit
24
protected under the Illinois Constitution.

25

Section 20.
The School Code is amended by adding Section

SB3404 Engrossed
- 85 -
LRB104 18864 RPS 32309 b
1
34-89 as follows:

2

(105 ILCS 5/34-89 new)
3

Sec. 34-89.
Accelerated pension benefit program.

4

(a) The board may establish an accelerated pension benefit
5
program for the pension fund established under Article 17 of
6
the Illinois Pension Code. The accelerated pension benefit
7
program shall provide eligible participants the option to
8
elect an accelerated pension benefit payment with regard to
9
teachers who participate under Article 17 of the Illinois
10
Pension Code in accordance with the applicable provisions of
11
Article 17 of the Illinois Pension Code authorizing
12
accelerated pension benefit payments.
13

(b) If the board elects to establish the accelerated
14
pension benefit program for a fiscal year beginning in 2026,
15
the board must notify the pension fund and remit a
16
contribution to the pension fund in an amount determined by
17
the board at least 30 days before the program is to be
18
implemented. If the board elects to establish the accelerated
19
pension benefit program for a fiscal year beginning in 2027,
20
the board shall remit to the pension fund, not later than 30
21
days prior to the beginning of the fiscal year for which the
22
accelerated pension benefit program is to be made available, a
23
contribution to the pension fund in an amount determined by
24
the board. The contribution shall constitute the total funding
25
available to that pension fund for accelerated pension benefit

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
payments for that fiscal year, and accelerated pension benefit
2
payments shall be issued by the applicable pension fund in
3
accordance with the provisions concerning accelerated pension
4
benefit payment until the contributed amount is exhausted. The
5
contribution for the accelerated pension benefit payments may
6
be made using any lawful funding mechanism authorized under
7
this Code, including, but not limited to:

8

(1) the issuance of bonds authorized under this Code;

9

(2) lawful appropriations from available municipal
10

revenues;

11

(3) transfers from lawfully available funds; or

12

(4) any combination thereof.

13

Nothing in this Section shall be construed to expand or
14
limit the board's authority to issue bonds beyond those
15
otherwise provided in this Code.

16

At least one month prior to the end of the fiscal year, the
17
board must notify the pension fund if it would like any
18
remaining moneys rolled over into the next fiscal year for the
19
accelerated pension benefit program. If the board does not
20
notify the pension fund, the moneys shall be remitted back to
21
the board. If an accelerated pension benefit program is not
22
authorized under Article 17 of the Illinois Pension Code for
23
the following fiscal year, then the pension fund shall remit
24
the moneys back to the board.
25

(c) This Section shall be construed as supplemental to
26
existing board powers and shall not be interpreted to impair

SB3404 Engrossed
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LRB104 18864 RPS 32309 b
1
any existing contractual obligation or pension benefit
2
protected under the Illinois Constitution.

3

Section 90.
The State Mandates Act is amended by adding
4
Section 8.50 as follows:

5

(30 ILCS 805/8.50 new)
6

Sec. 8.50.
Exempt mandate.
Notwithstanding Sections 6 and
7
8 of this Act, no reimbursement by the State is required for
8
the implementation of any mandate created by this amendatory
9
Act of the 104th General Assembly.

10

Section 99.
Effective date.
This Act takes effect upon
11
becoming law.

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