101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB2978

 

Introduced , by Rep. Robert Martwick

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/6-235 new
30 ILCS 805/8.43 new

    Amends the Chicago Firefighter Article of the Illinois Pension Code. Provides that if the City of Chicago issues bonds to be used for the purposes of the Article, the Board shall implement an accelerated pension benefit payment option that allows eligible firemen to elect to reduce their retirement annuity by 25% in exchange for an accelerated pension benefit payment equal to 75% of the present value of the reduction in the retirement annuity, as calculated by the Fund. Provides that the retirement annuity of a fireman who elects to receive an accelerated pension benefit payment shall be reduced by 25%. Provides that the accelerated pension benefit payments may only be made using the proceeds of bonds issued by the city and the total amount of the accelerated pension benefit payments shall not exceed $500,000,000. Requires the accelerated pension benefit payment to be transferred into a tax-qualified retirement plan or account. Contains provisions concerning return to service, rulemaking, and qualified plan status. Amends the State Mandates Act to require implementation without reimbursement by the State. Effective immediately.


LRB101 09106 RPS 54199 b

FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

HB2978LRB101 09106 RPS 54199 b

1    AN ACT concerning public employee benefits.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Pension Code is amended by adding
5Section 6-235 as follows:
 
6    (40 ILCS 5/6-235 new)
7    Sec. 6-235. Accelerated pension benefit payment.
8    (a) If the city issues bonds to be used for the purposes of
9this Article, the Board shall implement an accelerated pension
10benefit payment option that allows eligible firemen to elect to
11reduce their retirement annuity by 25% in exchange for an
12accelerated pension benefit payment equal to 75% of the present
13value of the reduction in the retirement annuity, as calculated
14by the Fund. To be eligible for the accelerated pension benefit
15payment, a fireman must:
16        (1) have submitted an application for a retirement
17    annuity;
18        (2) meet the age and service requirements for receiving
19    a retirement annuity;
20        (3) have not received any retirement annuity under this
21    Article; and
22        (4) not have a Qualified Illinois Domestic Relations
23    Order against him or her.

 

 

HB2978- 2 -LRB101 09106 RPS 54199 b

1    (b) Upon the request of an eligible fireman, the Fund shall
2calculate, using actuarial tables and other assumptions
3adopted by the Board, an accelerated pension benefit payment
4amount equal to 75% of the present value of a 25% reduction in
5the fireman's retirement annuity and shall offer that eligible
6fireman the opportunity to irrevocably elect to have his or her
7retirement annuity reduced by 25% in exchange for the
8accelerated pension benefit payment.
9    (c) Notwithstanding any other provision of this Article,
10including any minimum annuity amount, the retirement annuity of
11a fireman who elects to receive an accelerated pension benefit
12payment under subsection (b) shall be reduced by 25%.
13    (d) As a condition of receiving an accelerated pension
14benefit payment, the accelerated pension benefit payment must
15be transferred into a tax-qualified retirement plan or account.
16The accelerated pension benefit payment under this Section may
17be subject to withholding or payment of applicable taxes, but
18to the extent permitted by federal law, a person who receives
19an accelerated pension benefit payment under this Section must
20direct the Fund to pay all of that payment as a rollover into
21another retirement plan or account qualified under the Internal
22Revenue Code of 1986, as amended.
23    (e) An accelerated pension benefit payment may not be
24repaid to the Fund.
25    (f) If a person who receives an accelerated pension benefit
26payment under this Section re-enters service, his or her

 

 

HB2978- 3 -LRB101 09106 RPS 54199 b

1retirement annuity shall continue to be subject to subsection
2(c).
3    (g) The accelerated pension benefit payments may only be
4made using the proceeds of bonds that are issued by the city
5for the purposes of this Article, and the total amount of the
6accelerated pension benefit payments shall not exceed
7$500,000,000.
8    (h) The Board shall adopt any rules necessary to implement
9this Section.
10    (i) No provision of this Section shall be interpreted in a
11way that would cause the Fund to cease to be a qualified plan
12under the Internal Revenue Code of 1986.
 
13    Section 90. The State Mandates Act is amended by adding
14Section 8.43 as follows:
 
15    (30 ILCS 805/8.43 new)
16    Sec. 8.43. Exempt mandate. Notwithstanding Sections 6 and 8
17of this Act, no reimbursement by the State is required for the
18implementation of any mandate created by this amendatory Act of
19the 101st General Assembly.
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.