SB3430 104TH GENERAL ASSEMBLY

LRB104 19288 RPS 32734 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3430

Introduced 2/4/2026, by Sen. Chris Balkema

SYNOPSIS AS INTRODUCED:

See Index

Amends the Downstate Police, Downstate Firefighter, Chicago Police, Chicago Firefighter, Illinois Municipal Retirement Fund (IMRF), Chicago Municipal, and Chicago Laborers Articles of the Illinois Pension Code. Establishes an accelerated pension benefit payment in lieu of any pension benefit under which an eligible person may elect to receive an amount determined by the Fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. Establishes an accelerated pension benefit payment for a reduction in annual retirement annuity and survivor's annuity increases, as applicable, under which a Tier 1 member may elect to receive an accelerated pension benefit payment equal to 70% of the difference of the present value of the automatic annual increases to a Tier 1 member's retirement annuity and survivor's annuity using the formula applicable to the Tier 1 member and the present value of the automatic annual increases to the Tier 1 member's retirement annuity using a specified formula and survivor's annuity using a specified formula. Amends the General Obligation Bond Act to authorize $700,000,000 to be sold to pay for the accelerated pension benefit payments. Provides that the Comptroller shall deduct the amount for the payment of principal and interest due on Local Pension Obligation Acceleration Bonds from any payment out of the Local Government Distributive Fund to the employer and shall pay the amount so deducted toward the principal and interest due on Local Pension Obligation Bonds. Amends the State Finance Act to make a conforming change. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY

A BILL FOR

AN ACT concerning public employee benefits.

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

Section 1. The State Finance Act is amended by adding Section 5.1038 as follows:

(30 ILCS 105/5.1038 new)

Sec. 5.1038. The Local Pension Obligation Acceleration Bond Fund.

Section 5. The General Obligation Bond Act is amended by changing Sections 2 and 2.5 and by adding Section 7.8 as follows:

(30 ILCS 330/2) (from Ch. 127, par. 652)

Sec. 2. Authorization for Bonds. The State of Illinois is authorized to issue, sell and provide for the retirement of General Obligation Bonds of the State of Illinois for the categories and specific purposes expressed in Sections 2 through 8 of this Act, in the total amount of $83,364,839,969 $82,664,839,969.

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

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

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

Of the total amount of Bonds authorized in this Act, the additional $10,000,000,000 authorized by Public Act 93-2, the $3,466,000,000 authorized by Public Act 96-43, and the $4,096,348,300 authorized by Public Act 96-1497 shall be used solely as provided in Section 7.2.

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

Of the total amount of Bonds authorized in this Act, $2,200,000,000 of the additional amount authorized by Public Act 100-587, Public Act 102-718, and this amendatory Act of the 104th General Assembly shall be used solely as provided in Section 7.7.

Of the total amount of Bonds authorized in this Act, $700,000,000 of the additional amount authorized by this amendatory Act of the 104th General Assembly shall be used solely as provided in Section 7.8.

The issuance and sale of Bonds pursuant to the General Obligation Bond Act is an economical and efficient method of financing the long-term capital needs of the State. This Act will permit the issuance of a multi-purpose General Obligation Bond with uniform terms and features. This will not only lower the cost of registration but also reduce the overall cost of issuing debt by improving the marketability of Illinois General Obligation Bonds.

(Source: P.A. 103-7, eff. 7-1-23; 103-591, eff. 7-1-24; 104-8, eff. 1-1-26.)

(30 ILCS 330/2.5)

Sec. 2.5. Limitation on issuance of Bonds.

(a) Except as provided in subsection (b), no Bonds may be issued if, after the issuance, in the next State fiscal year after the issuance of the Bonds, the amount of debt service (including principal, whether payable at maturity or pursuant to mandatory sinking fund installments, and interest) on all then-outstanding Bonds, other than (i) Bonds authorized by Public Act 100-23, (ii) Bonds issued by Public Act 96-43, (iii) Bonds authorized by Public Act 96-1497, (iv) Bonds authorized by Public Act 100-587, and (v) Bonds authorized by Public Act 102-718 this amendatory Act of the 102nd General Assembly, and (vi) Bonds authorized by this amendatory Act of the 104th General Assembly, would exceed 7% of the aggregate appropriations from the general funds, the State Construction Account Fund, and the Road Fund for the fiscal year immediately prior to the fiscal year of the issuance. For the purposes of this subsection (a), "general funds" has the same meaning as ascribed to that term under Section 50-40 of the State Budget Law of the Civil Administrative Code of Illinois.

(b) If the Comptroller and Treasurer each consent in writing, Bonds may be issued even if the issuance does not comply with subsection (a). In addition, $2,000,000,000 in Bonds for the purposes set forth in Sections 3, 4, 5, 6, and 7, and $2,000,000,000 in Refunding Bonds under Section 16, may be issued during State fiscal year 2017 without complying with subsection (a). In addition, $2,000,000,000 in Bonds for the purposes set forth in Sections 3, 4, 5, 6, and 7, and $2,000,000,000 in Refunding Bonds under Section 16, may be issued during State fiscal year 2018 without complying with subsection (a).

(Source: P.A. 101-30, eff. 6-28-19; 102-718, eff. 5-5-22.)

(30 ILCS 330/7.8 new)

Sec. 7.8. Local Pension Obligation Acceleration Bonds.

(a) As used in this Section, "Local Pension Obligation Acceleration Bonds" means Bonds authorized by this amendatory Act of the 104th General Assembly and used for the purpose of making accelerated pension benefit payments under Articles 3, 4, 5, 6, 7, 8, and 11 of the Illinois Pension Code.

(b) Local Pension Obligation Acceleration Bonds in the amount of $700,000,000 are hereby authorized to be used for the purpose of making accelerated pension benefit payments under Articles 3, 4, 5, 6, 7, 8, and 11 of the Illinois Pension Code.

(c) The proceeds of Local Pension Obligation Acceleration Bonds authorized in subsection (b) of this Section, less the amounts authorized in the Bond Sale Order to be directly paid out for bond sale expenses under Section 8, shall be deposited directly into the Local Pension Obligation Acceleration Bond Fund, and the Comptroller and the Treasurer shall, as soon as practical, make accelerated pension benefit payments under Articles 3, 4, 5, 6, 7, 8, and 11 of the Illinois Pension Code.

(d) There is created the Local Pension Obligation Acceleration Bond Fund as a special fund in the State treasury. Funds deposited into the Local Pension Obligation Acceleration Bond Fund may only be used for the purpose of making accelerated pension benefit payments under Articles 3, 4, 5, 6, 7, 8, and 11 of the Illinois Pension Code. This subsection shall constitute an irrevocable and continuing appropriation of all amounts necessary for such purposes.

(e) The Comptroller shall deduct the amount for the payment of principal and interest due on Local Pension Obligation Acceleration Bonds from any payment out of the Local Government Distributive Fund to the employer and shall pay the amount so deducted toward the principal and interest due on Local Pension Obligation Bonds.

Section 10. The Illinois Pension Code is amended by adding Sections 3-144.3, 3-144.4, 4-138.15, 4-138.16, 5-218.5, 5-218.6, 6-213.5, 6-213.6, 7-217.5, 7-217.6, 8-244.5, 8-244.6, 11-223.5, and 11-223.6 as follows:

(40 ILCS 5/3-144.3 new)

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

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement pension under this Article;

(3) has not received any retirement pension under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the fund offers under this subsection in lieu of receiving any pension benefit.

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

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

(1) Any benefits under the fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the fund, and the fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/3-144.4 new)

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

(a) As used in this Section:

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

"Eligible person" means a person who:

(1) is a Tier 1 member;

(2) has submitted an application for a retirement pension under this Article;

(3) meets the age and service requirements for receiving a retirement pension under this Article;

(4) has not received any retirement pension under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement pension calculated in accordance with the formula provided under subsection (b-5) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement pension otherwise payable under this Article.

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

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

(1) the calculation of any future automatic annual increase in retirement pension shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the fund, and the fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/4-138.15 new)

Sec. 4-138.15. Accelerated pension benefit payment in lieu of any pension benefit.

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement pension under this Article;

(3) has not received any retirement pension under this Article;

(4) has not made the election under Section 4-138.16; and

(5) is the employee of a unit of local government that receives payments out of the Local Government Distributive Fund.

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the fund offers under this subsection in lieu of receiving any pension benefit.

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

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

(1) Any benefits under the fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the fund, and the fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/4-138.16 new)

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

(a) As used in this Section:

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

"Eligible person" means a person who:

(1) is a Tier 1 member;

(2) has submitted an application for a retirement pension under this Article;

(3) meets the age and service requirements for receiving a retirement pension under this Article;

(4) has not received any retirement pension under this Article;

(5) has not made the election under Section 4-138.15; and

(6) is the employee of a unit of local government that receives payments out of the Local Government Distributive Fund.

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement pension calculated in accordance with the formula provided under subsection (b-5) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement pension otherwise payable under this Article.

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

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

(1) the calculation of any future automatic annual increase in retirement pension shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the fund, and the fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/5-218.5 new)

Sec. 5-218.5. Accelerated pension benefit payment in lieu of any pension benefit.

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement annuity under this Article;

(3) has not received any retirement annuity under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the fund offers under this subsection in lieu of receiving any pension benefit.

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

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

(1) Any benefits under the fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the fund, and the fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/5-218.6 new)

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

(a) As used in this Section:

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

"Eligible person" means a person who:

(1) is a Tier 1 member;

(2) has submitted an application for a retirement annuity under this Article;

(3) meets the age and service requirements for receiving a retirement annuity under this Article;

(4) has not received any retirement annuity under this Article; and

(5) has not made the election under Section 5-218.5.

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the Fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity calculated in accordance with the formula provided under subsection (b-5) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement annuity otherwise payable under this Article.

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

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

(1) the calculation of any future automatic annual increase in retirement annuity shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the Fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the Fund, and the Fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/6-213.5 new)

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

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement annuity under this Article;

(3) has not received any retirement annuity under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the Fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The Fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the Fund offers under this subsection in lieu of receiving any pension benefit.

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

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

(1) Any benefits under the Fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the Fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the Fund, and the Fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/6-213.6 new)

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

(a) As used in this Section:

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

(1) is a Tier 1 member;

(2) has submitted an application for a retirement annuity under this Article;

(3) meets the age and service requirements for receiving a retirement annuity under this Article;

(4) has not received any retirement annuity under this Article; and

(5) has not made the election under Section 6-213.5.

"Tier 1 member" means a person who first became a fireman under this Article before January 1, 2011.

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the Fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity calculated in accordance with the formula provided under subsection (b-5) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement annuity otherwise payable under this Article.

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

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

(1) the calculation of any future automatic annual increase in retirement annuity shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the Fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the Fund, and the Fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/7-217.5 new)

Sec. 7-217.5. Accelerated pension benefit payment in lieu of any pension benefit.

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement annuity under this Article;

(3) has not received any retirement annuity under this Article; and

(4) has not made the election under Section 7-217.6.

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the Fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The Fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the Fund offers under this subsection in lieu of receiving any pension benefit. A person who elects to receive an accelerated pension benefit payment under this Section may not elect to proceed under the Retirement Systems Reciprocal Act with respect to service under this Article.

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

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

(1) Any benefits under the Fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the Fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the Fund, and the Fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/7-217.6 new)

Sec. 7-217.6. Accelerated pension benefit payment for a reduction in annual retirement annuity and survivor's annuity increases.

(a) As used in this Section:

"Accelerated pension benefit payment" means a lump-sum payment equal to 70% of the difference of the present value of the automatic annual increases to a Tier 1 regular employee's retirement annuity and survivor's annuity using the formula applicable to the Tier 1 regular employee and the present value of the automatic annual increases to the Tier 1 regular employee's retirement annuity using the formula provided under subsection (b-5) and survivor's annuity using the formula provided under subsection (b-6). "Eligible person" means a person who:

(1) is a Tier 1 regular employee;

(2) has submitted an application for a retirement annuity under this Article;

(3) meets the age and service requirements for receiving a retirement annuity under this Article;

(4) has not received any retirement annuity under this Article; and

(5) has not made the election under Section 7-217.5.

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the Fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity calculated in accordance with the formula provided under subsection (b-5) and any increases in survivor's annuity payable to his or her survivor's annuity beneficiary calculated in accordance with the formula provided under subsection (b-6) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement annuity otherwise payable under this Article.

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

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

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

(1) the calculation of any future automatic annual increase in retirement annuity shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the Fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the Fund, and the Fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/8-244.5 new)

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

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement annuity under this Article;

(3) has not received any retirement annuity under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the Fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The Fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the Fund offers under this subsection in lieu of receiving any pension benefit. A person who elects to receive an accelerated pension benefit payment under this Section may not elect to proceed under the Retirement Systems Reciprocal Act with respect to service under this Article.

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

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

(1) Any benefits under the Fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the Fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the Fund, and the Fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/8-244.6 new)

Sec. 8-244.6. Accelerated pension benefit payment for a reduction in annual retirement annuity.

(a) As used in this Section:

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

"Eligible person" means a person who:

(1) is a Tier 1 member;

(2) has submitted an application for a retirement annuity under this Article;

(3) meets the age and service requirements for receiving a retirement annuity under this Article;

(4) has not received any retirement annuity under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the Fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity calculated in accordance with the formula provided under subsection (b-5) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement annuity otherwise payable under this Article.

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

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

(1) the calculation of any future automatic annual increase in retirement annuity shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the Fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the Fund, and the Fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/11-223.5 new)

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

(a) As used in this Section:

"Eligible person" means a person who:

(1) has terminated service;

(2) has accrued sufficient service credit to be eligible to receive a retirement annuity under this Article;

(3) has not received any retirement annuity under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, the present value of pension benefits for each eligible person who requests that information and shall offer each eligible person the opportunity to irrevocably elect to receive an amount determined by the Fund to be equal to 60% of the present value of his or her pension benefits in lieu of receiving any pension benefit. The offer shall specify the dollar amount that the eligible person will receive if he or she so elects and shall expire when a subsequent offer is made to an eligible person. An eligible person is limited to one calculation and offer per calendar year. The Fund shall make a good faith effort to contact every eligible person to notify him or her of the election.

Until June 30, 2030, an eligible person may irrevocably elect to receive an accelerated pension benefit payment in the amount that the Fund offers under this subsection in lieu of receiving any pension benefit. A person who elects to receive an accelerated pension benefit payment under this Section may not elect to proceed under the Retirement Systems Reciprocal Act with respect to service under this Article.

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

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

(1) Any benefits under the Fund earned as a result of that return to active service shall be based solely on the person's creditable service arising from the return to active service.

(2) The accelerated pension benefit payment may not be repaid to the Fund, and the terminated creditable service may not under any circumstances be reinstated.

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

(f) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher from the Local Pension Obligation Acceleration Bond Fund to the Fund, and the Fund shall transfer the amount into the member's eligible retirement plan or qualified account.

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

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

(40 ILCS 5/11-223.6 new)

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

(a) As used in this Section:

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

"Eligible person" means a person who:

(1) is a Tier 1 member;

(2) has submitted an application for a retirement annuity under this Article;

(3) meets the age and service requirements for receiving a retirement annuity under this Article;

(4) has not received any retirement annuity under this Article; and

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

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

(b) As soon as practical after the effective date of this amendatory Act of the 104th General Assembly and until June 30, 2030, the Fund shall implement an accelerated pension benefit payment option for eligible persons. Upon the request of an eligible person, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount and shall offer that eligible person the opportunity to irrevocably elect to have his or her automatic annual increases in retirement annuity calculated in accordance with the formula provided under subsection (b-5) in exchange for the accelerated pension benefit payment. The election under this subsection must be made before the eligible person receives the first payment of a retirement annuity otherwise payable under this Article.

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

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

(1) the calculation of any future automatic annual increase in retirement annuity shall be calculated in accordance with the formula provided under subsection (b-5); and

(2) the accelerated pension benefit payment may not be repaid to the Fund.

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

(d-5) Upon receipt of a member's irrevocable election to receive an accelerated pension benefit payment under this Section, the Fund shall submit a voucher to the Comptroller for payment of the member's accelerated pension benefit payment. The Comptroller shall transfer the amount of the voucher to the Fund, and the Fund shall transfer the amount into a member's eligible retirement plan or qualified account.

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

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

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

(30 ILCS 805/8.50 new)

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

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