HB2978 101ST GENERAL ASSEMBLY

LRB101 09106 RPS 54199 b

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.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

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 5. The Illinois Pension Code is amended by adding Section 6-235 as follows:

(40 ILCS 5/6-235 new)

Sec. 6-235. Accelerated pension benefit payment.

(a) If the city issues bonds to be used for the purposes of this 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. To be eligible for the accelerated pension benefit payment, a fireman must:

(1) have submitted an application for a retirement annuity;

(2) meet the age and service requirements for receiving a retirement annuity;

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

(4) not have a Qualified Illinois Domestic Relations Order against him or her.

(b) Upon the request of an eligible fireman, the Fund shall calculate, using actuarial tables and other assumptions adopted by the Board, an accelerated pension benefit payment amount equal to 75% of the present value of a 25% reduction in the fireman's retirement annuity and shall offer that eligible fireman the opportunity to irrevocably elect to have his or her retirement annuity reduced by 25% in exchange for the accelerated pension benefit payment.

(c) Notwithstanding any other provision of this Article, including any minimum annuity amount, the retirement annuity of a fireman who elects to receive an accelerated pension benefit payment under subsection (b) shall be reduced by 25%.

(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.

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

(f) If a person who receives an accelerated pension benefit payment under this Section re-enters service, his or her retirement annuity shall continue to be subject to subsection (c).

(g) The accelerated pension benefit payments may only be made using the proceeds of bonds that are issued by the city for the purposes of this Article, and the total amount of the accelerated pension benefit payments shall not exceed $500,000,000.

(h) The Board shall adopt any rules necessary to implement this Section.

(i) No provision of this Section shall be interpreted in a way that would cause the 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 8.43 as follows:

(30 ILCS 805/8.43 new)

Sec. 8.43. 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 101st General Assembly.

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