House Sponsors: HARTKE. Short description: PEN CD-ART 14 & 16-EARLY RETMT Synopsis of Bill as introduced: Amends the State Employee and Downstate Teacher Articles of the Pension Code. Provides an early retirement incentive program for certain State employees who retire between January 1, 2002 and July 1, 2002 (in certain cases, as late as January 1, 2003). Requires the Pension Laws Commission to report on the net savings or cost of the program. Requires the State to fund the program through separate contributions made in fiscal years 2003 through 2009. Amends the State Pension Funds Continuing Appropriation Act to guarantee those contributions through continuing appropriations. Amends the State Finance Act to restrict personal service contracts with these early retirees. Requires the lump sum payment for unused vacation and sick leave to be separate from the final payment of salary and requires the use of specified withholding rates. Provides that a lump sum payment payable to a person who terminates State service during June of 2002 may be paid during July or August of 2002 from either a fiscal year 2002 or fiscal year 2003 appropriation. Provides that in fiscal year 2004 the General Assembly shall not fund the vacated positions at more than 85% of the rate of compensation payable at the time of retirement. Effective immediately. PENSION NOTE (Pension Laws Commission) Assuming 7,392 members (approximately 35% of those eligible) retire early, it is estimated the accrued liability of SERS would increase by $611.5 million. Required employee contribu- tions are expected to total $41.6 million. Therefore, the in- crease in accrued liability the State would be required to amortize is estimated to be $569.9 million. HB 432 requires the State to contribute $90 million to SERS and $1 million to TRS in FY03 to amortize the increase in accrued liability, and requires the remainder of the accrued liability to be amortized in 6 equal installments, beginning in FY04. The Commission's actuary estimates annual payments to be $105.4 million. Last action on Bill: SESSION SINE DIE Last action date: JAN-07-2003 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 0 SENATE - 0 END OF INQUIRY Full Text Bill Status