Bill Text: IL HB1636 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the State Employees and Downstate Teacher Articles of the Illinois Pension Code. Requires the System to develop and offer a defined contribution plan for active members of the System. Provides that the defined contribution plan shall collect optional employee contributions, employer contributions, and State contributions into individual accounts and shall offer investment options to participants. Provides that there shall be no maximum or minimum contribution requirements. Provides that on an annual basis, the employer of a participant in the defined contribution plan shall deposit in the participant's defined contribution plan account an amount equal to the amount contributed by the participant during the preceding year and the State shall deposit in the participant's defined contribution plan account an amount equal to the amount contributed by the participant during the preceding year. Provides that, if the State is the actual employer of the participant, then the State shall contribute an additional amount equal to the employer's contribution. Provides that a participant in the defined contribution plan may not withdraw moneys from the participant's account while the participant is an active member of the System. Requires the defined contribution plan to be operated in full compliance with any applicable State and federal laws, and requires the System to use generally accepted practices in creating and maintaining the benefit for the best interest of the participants. Makes conforming changes. Provides that any benefit increase resulting from the amendatory Act is excluded from the definition of "new benefit increase". Amends the State Mandates Act to require implementation without reimbursement.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2025-01-28 - Referred to Rules Committee [HB1636 Detail]

Download: Illinois-2025-HB1636-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1636 Introduced , by Rep. Travis Weaver SYNOPSIS AS INTRODUCED:
See Index
Amends the State Employees and Downstate Teacher Articles of the Illinois Pension Code. Requires the System to develop and offer a defined contribution plan for active members of the System. Provides that the defined contribution plan shall collect optional employee contributions, employer contributions, and State contributions into individual accounts and shall offer investment options to participants. Provides that there shall be no maximum or minimum contribution requirements. Provides that on an annual basis, the employer of a participant in the defined contribution plan shall deposit in the participant's defined contribution plan account an amount equal to the amount contributed by the participant during the preceding year and the State shall deposit in the participant's defined contribution plan account an amount equal to the amount contributed by the participant during the preceding year. Provides that, if the State is the actual employer of the participant, then the State shall contribute an additional amount equal to the employer's contribution. Provides that a participant in the defined contribution plan may not withdraw moneys from the participant's account while the participant is an active member of the System. Requires the defined contribution plan to be operated in full compliance with any applicable State and federal laws, and requires the System to use generally accepted practices in creating and maintaining the benefit for the best interest of the participants. Makes conforming changes. Provides that any benefit increase resulting from the amendatory Act is excluded from the definition of "new benefit increase". Amends the State Mandates Act to require implementation without reimbursement.
LRB104 07705 RPS 17749 b
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT MAY APPLY
A BILL FOR
HB1636 LRB104 07705 RPS 17749 b
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
changing Sections 14-131, 14-152.1, 16-158, and 16-203 and by
adding Sections 14-157 and 16-207 as follows:
(40 ILCS 5/14-131)
Sec. 14-131. Contributions by State.
(a) The State shall make contributions to the System by
appropriations of amounts which, together with other employer
contributions from trust, federal, and other funds, employee
contributions, investment income, and other income, will be
sufficient to meet the cost of maintaining and administering
the System on a 90% funded basis in accordance with actuarial
recommendations.
For the purposes of this Section and Section 14-135.08,
references to State contributions refer only to employer
contributions and do not include employee contributions that
are picked up or otherwise paid by the State or a department on
behalf of the employee.
(b) The Board shall determine the total amount of State
contributions required for each fiscal year on the basis of
the actuarial tables and other assumptions adopted by the

HB1636 - 2 - LRB104 07705 RPS 17749 b
Board, using the formula in subsection (e).
The Board shall also determine a State contribution rate
for each fiscal year, expressed as a percentage of payroll,
based on the total required State contribution for that fiscal
year (less the amount received by the System from
appropriations under Section 8.12 of the State Finance Act and
Section 1 of the State Pension Funds Continuing Appropriation
Act, if any, for the fiscal year ending on the June 30
immediately preceding the applicable November 15 certification
deadline), the estimated payroll (including all forms of
compensation) for personal services rendered by eligible
employees, and the recommendations of the actuary.
For the purposes of this Section and Section 14.1 of the
State Finance Act, the term "eligible employees" includes
employees who participate in the System, persons who may elect
to participate in the System but have not so elected, persons
who are serving a qualifying period that is required for
participation, and annuitants employed by a department as
described in subdivision (a)(1) or (a)(2) of Section 14-111.
(c) Contributions shall be made by the several departments
for each pay period by warrants drawn by the State Comptroller
against their respective funds or appropriations based upon
vouchers stating the amount to be so contributed. These
amounts shall be based on the full rate certified by the Board
under Section 14-135.08 for that fiscal year. From March 5,
2004 (the effective date of Public Act 93-665) through the

HB1636 - 3 - LRB104 07705 RPS 17749 b
payment of the final payroll from fiscal year 2004
appropriations, the several departments shall not make
contributions for the remainder of fiscal year 2004 but shall
instead make payments as required under subsection (a-1) of
Section 14.1 of the State Finance Act. The several departments
shall resume those contributions at the commencement of fiscal
year 2005.
(c-1) Notwithstanding subsection (c) of this Section, for
fiscal years 2010, 2012, and each fiscal year thereafter,
contributions by the several departments are not required to
be made for General Revenue Funds payrolls processed by the
Comptroller. Payrolls paid by the several departments from all
other State funds must continue to be processed pursuant to
subsection (c) of this Section.
(c-2) Unless otherwise directed by the Comptroller under
subsection (c-3), the Board shall submit vouchers for payment
of State contributions to the System for the applicable month
on the 15th day of each month, or as soon thereafter as may be
practicable. The amount vouchered for a monthly payment shall
total one-twelfth of the fiscal year General Revenue Fund
contribution as certified by the System pursuant to Section
14-135.08 of this Code.
(c-3) Beginning in State fiscal year 2025, if the
Comptroller requests that the Board submit, during a State
fiscal year, vouchers for multiple monthly payments for
advance payment of State contributions due to the System for

HB1636 - 4 - LRB104 07705 RPS 17749 b
that State fiscal year, then the Board shall submit those
additional vouchers as directed by the Comptroller,
notwithstanding subsection (c-2). Unless an act of
appropriations provides otherwise, nothing in this Section
authorizes the Board to submit, in a State fiscal year,
vouchers for the payment of State contributions to the System
in an amount that exceeds the rate of payroll that is certified
by the System under Section 14-135.08 for that State fiscal
year.
(d) If an employee is paid from trust funds or federal
funds, the department or other employer shall pay employer
contributions from those funds to the System at the certified
rate, unless the terms of the trust or the federal-State
agreement preclude the use of the funds for that purpose, in
which case the required employer contributions shall be paid
by the State.
(e) For State fiscal years 2012 through 2045, the minimum
contribution to the System to be made by the State for each
fiscal year shall be an amount determined by the System to be
sufficient to bring the total assets of the System up to 90% of
the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.

HB1636 - 5 - LRB104 07705 RPS 17749 b
For State fiscal years in which the State is required to
contribute to participants' individual accounts in the defined
contribution plan under Section 14-157, the minimum
contribution to the System shall also include the amounts
required under Section 14-157.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it
at the resulting annual rate in each of the remaining
fiscal years in that 5-year period.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable

HB1636 - 6 - LRB104 07705 RPS 17749 b
employee payroll, shall be increased in equal annual
increments so that by State fiscal year 2011, the State is
contributing at the rate required under this Section; except
that (i) for State fiscal year 1998, for all purposes of this
Code and any other law of this State, the certified percentage
of the applicable employee payroll shall be 5.052% for
employees earning eligible creditable service under Section
14-110 and 6.500% for all other employees, notwithstanding any
contrary certification made under Section 14-135.08 before
July 7, 1997 (the effective date of Public Act 90-65), and (ii)
in the following specified State fiscal years, the State
contribution to the System shall not be less than the
following indicated percentages of the applicable employee
payroll, even if the indicated percentage will produce a State
contribution in excess of the amount otherwise required under
this subsection and subsection (a): 9.8% in FY 1999; 10.0% in
FY 2000; 10.2% in FY 2001; 10.4% in FY 2002; 10.6% in FY 2003;
and 10.8% in FY 2004.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed
to maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State

HB1636 - 7 - LRB104 07705 RPS 17749 b
contribution required under this Article in that fiscal year.
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as
calculated under this Section and certified under Section
14-135.08, shall not exceed an amount equal to (i) the amount
of the required State contribution that would have been
calculated under this Section for that fiscal year if the
System had not received any payments under subsection (d) of
Section 7.2 of the General Obligation Bond Act, minus (ii) the
portion of the State's total debt service payments for that
fiscal year on the bonds issued in fiscal year 2003 for the
purposes of that Section 7.2, as determined and certified by
the Comptroller, that is the same as the System's portion of
the total moneys distributed under subsection (d) of Section
7.2 of the General Obligation Bond Act.
(f) (Blank).
(g) For purposes of determining the required State
contribution to the System, the value of the System's assets

HB1636 - 8 - LRB104 07705 RPS 17749 b
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(h) For purposes of determining the required State
contribution to the System for a particular year, the
actuarial value of assets shall be assumed to earn a rate of
return equal to the System's actuarially assumed rate of
return.
(i) (Blank).
(j) (Blank).
(k) For fiscal year 2012 and each fiscal year thereafter,
after the submission of all payments for eligible employees
from personal services line items paid from the General
Revenue Fund in the fiscal year have been made, the
Comptroller shall provide to the System a certification of the
sum of all expenditures in the fiscal year for personal
services. Upon receipt of the certification, the System shall
determine the amount due to the System based on the full rate
certified by the Board under Section 14-135.08 for the fiscal
year in order to meet the State's obligation under this

HB1636 - 9 - LRB104 07705 RPS 17749 b
Section. The System shall compare this amount due to the
amount received by the System for the fiscal year. If the
amount due is more than the amount received, the difference
shall be termed the "Prior Fiscal Year Shortfall" for purposes
of this Section, and the Prior Fiscal Year Shortfall shall be
satisfied under Section 1.2 of the State Pension Funds
Continuing Appropriation Act. If the amount due is less than
the amount received, the difference shall be termed the "Prior
Fiscal Year Overpayment" for purposes of this Section, and the
Prior Fiscal Year Overpayment shall be repaid by the System to
the General Revenue Fund as soon as practicable after the
certification.
(Source: P.A. 103-588, eff. 6-5-24.)
(40 ILCS 5/14-152.1)
Sec. 14-152.1. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
96-37, Public Act 100-23, Public Act 100-587, Public Act

HB1636 - 10 - LRB104 07705 RPS 17749 b
100-611, Public Act 101-10, Public Act 101-610, Public Act
102-210, Public Act 102-856, Public Act 102-956, or this
amendatory Act of the 104th General Assembly this amendatory
Act of the 102nd General Assembly.
(b) Notwithstanding any other provision of this Code or
any subsequent amendment to this Code, every new benefit
increase is subject to this Section and shall be deemed to be
granted only in conformance with and contingent upon
compliance with the provisions of this Section.
(c) The Public Act enacting a new benefit increase must
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of
the Department of Insurance. A new benefit increase created by
a Public Act that does not include the additional funding
required under this subsection is null and void. If the Public
Pension Division determines that the additional funding
provided for a new benefit increase under this subsection is
or has become inadequate, it may so certify to the Governor and
the State Comptroller and, in the absence of corrective action

HB1636 - 11 - LRB104 07705 RPS 17749 b
by the General Assembly, the new benefit increase shall expire
at the end of the fiscal year in which the certification is
made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including, without limitation, a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
101-610, eff. 1-1-20; 102-210, eff. 7-30-21; 102-856, eff.
1-1-23; 102-956, eff. 5-27-22.)
(40 ILCS 5/14-157 new)
Sec. 14-157. Voluntary defined contribution plan.
(a) As soon as practicable after the effective date of

HB1636 - 12 - LRB104 07705 RPS 17749 b
this amendatory Act of the 104th General Assembly, the System
shall develop and offer a defined contribution plan for active
members of the System. The defined contribution plan shall
collect optional employee contributions, employer
contributions, and State contributions into individual
accounts and shall offer investment options to participants.
There shall be no maximum or minimum contribution requirements
for participation in the defined contribution plan.
(b) On an annual basis, the employer of a participant in
the defined contribution plan shall deposit in the
participant's defined contribution plan account an amount
equal to the amount contributed by the participant during the
preceding year and the State shall deposit in the
participant's defined contribution plan account an amount
equal to the amount contributed by the participant during the
preceding year. If the State is the actual employer of the
participant, then the State shall contribute an additional
amount equal to the employer's contribution required under
this subsection.
(c) A participant in the defined contribution plan may not
withdraw moneys from the defined contribution plan account
while the participant is an active member of the System.
(d) The defined contribution plan under this Section shall
be operated in full compliance with any applicable State and
federal laws, and the System shall use generally accepted
practices in creating and maintaining the benefit for the best

HB1636 - 13 - LRB104 07705 RPS 17749 b
interest of the participants.
(40 ILCS 5/16-158) (from Ch. 108 1/2, par. 16-158)
Sec. 16-158. Contributions by State and other employing
units.
(a) The State shall make contributions to the System by
means of appropriations from the Common School Fund and other
State funds of amounts which, together with other employer
contributions, employee contributions, investment income, and
other income, will be sufficient to meet the cost of
maintaining and administering the System on a 90% funded basis
in accordance with actuarial recommendations.
The Board shall determine the amount of State
contributions required for each fiscal year on the basis of
the actuarial tables and other assumptions adopted by the
Board and the recommendations of the actuary, using the
formula in subsection (b-3).
(a-1) Annually, on or before November 15 until November
15, 2011, the Board shall certify to the Governor the amount of
the required State contribution for the coming fiscal year.
The certification under this subsection (a-1) shall include a
copy of the actuarial recommendations upon which it is based
and shall specifically identify the System's projected State
normal cost for that fiscal year.
On or before May 1, 2004, the Board shall recalculate and
recertify to the Governor the amount of the required State

HB1636 - 14 - LRB104 07705 RPS 17749 b
contribution to the System for State fiscal year 2005, taking
into account the amounts appropriated to and received by the
System under subsection (d) of Section 7.2 of the General
Obligation Bond Act.
On or before July 1, 2005, the Board shall recalculate and
recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2006, taking
into account the changes in required State contributions made
by Public Act 94-4.
On or before April 1, 2011, the Board shall recalculate
and recertify to the Governor the amount of the required State
contribution to the System for State fiscal year 2011,
applying the changes made by Public Act 96-889 to the System's
assets and liabilities as of June 30, 2009 as though Public Act
96-889 was approved on that date.
(a-5) On or before November 1 of each year, beginning
November 1, 2012, the Board shall submit to the State Actuary,
the Governor, and the General Assembly a proposed
certification of the amount of the required State contribution
to the System for the next fiscal year, along with all of the
actuarial assumptions, calculations, and data upon which that
proposed certification is based. On or before January 1 of
each year, beginning January 1, 2013, the State Actuary shall
issue a preliminary report concerning the proposed
certification and identifying, if necessary, recommended
changes in actuarial assumptions that the Board must consider

HB1636 - 15 - LRB104 07705 RPS 17749 b
before finalizing its certification of the required State
contributions. On or before January 15, 2013 and each January
15 thereafter, the Board shall certify to the Governor and the
General Assembly the amount of the required State contribution
for the next fiscal year. The Board's certification must note
any deviations from the State Actuary's recommended changes,
the reason or reasons for not following the State Actuary's
recommended changes, and the fiscal impact of not following
the State Actuary's recommended changes on the required State
contribution.
(a-10) By November 1, 2017, the Board shall recalculate
and recertify to the State Actuary, the Governor, and the
General Assembly the amount of the State contribution to the
System for State fiscal year 2018, taking into account the
changes in required State contributions made by Public Act
100-23. The State Actuary shall review the assumptions and
valuations underlying the Board's revised certification and
issue a preliminary report concerning the proposed
recertification and identifying, if necessary, recommended
changes in actuarial assumptions that the Board must consider
before finalizing its certification of the required State
contributions. The Board's final certification must note any
deviations from the State Actuary's recommended changes, the
reason or reasons for not following the State Actuary's
recommended changes, and the fiscal impact of not following
the State Actuary's recommended changes on the required State

HB1636 - 16 - LRB104 07705 RPS 17749 b
contribution.
(a-15) On or after June 15, 2019, but no later than June
30, 2019, the Board shall recalculate and recertify to the
Governor and the General Assembly the amount of the State
contribution to the System for State fiscal year 2019, taking
into account the changes in required State contributions made
by Public Act 100-587. The recalculation shall be made using
assumptions adopted by the Board for the original fiscal year
2019 certification. The monthly voucher for the 12th month of
fiscal year 2019 shall be paid by the Comptroller after the
recertification required pursuant to this subsection is
submitted to the Governor, Comptroller, and General Assembly.
The recertification submitted to the General Assembly shall be
filed with the Clerk of the House of Representatives and the
Secretary of the Senate in electronic form only, in the manner
that the Clerk and the Secretary shall direct.
(b) Through State fiscal year 1995, the State
contributions shall be paid to the System in accordance with
Section 18-7 of the School Code.
(b-1) Unless otherwise directed by the Comptroller under
subsection (b-1.1), the Board shall submit vouchers for
payment of State contributions to the System for the
applicable month on the 15th day of each month, or as soon
thereafter as may be practicable. The amount vouchered for a
monthly payment shall total one-twelfth of the required annual
State contribution certified under subsection (a-1).

HB1636 - 17 - LRB104 07705 RPS 17749 b
(b-1.1) Beginning in State fiscal year 2025, if the
Comptroller requests that the Board submit, during a State
fiscal year, vouchers for multiple monthly payments for the
advance payment of State contributions due to the System for
that State fiscal year, then the Board shall submit those
additional vouchers as directed by the Comptroller,
notwithstanding subsection (b-1). Unless an act of
appropriations provides otherwise, nothing in this Section
authorizes the Board to submit, in a State fiscal year,
vouchers for the payment of State contributions to the System
in an amount that exceeds the rate of payroll that is certified
by the System under this Section for that State fiscal year.
(b-1.2) The vouchers described in subsections (b-1) and
(b-1.1) shall be paid by the State Comptroller and Treasurer
by warrants drawn on the funds appropriated to the System for
that fiscal year.
If in any month the amount remaining unexpended from all
other appropriations to the System for the applicable fiscal
year (including the appropriations to the System under Section
8.12 of the State Finance Act and Section 1 of the State
Pension Funds Continuing Appropriation Act) is less than the
amount lawfully vouchered under this subsection, the
difference shall be paid from the Common School Fund under the
continuing appropriation authority provided in Section 1.1 of
the State Pension Funds Continuing Appropriation Act.
(b-2) Allocations from the Common School Fund apportioned

HB1636 - 18 - LRB104 07705 RPS 17749 b
to school districts not coming under this System shall not be
diminished or affected by the provisions of this Article.
(b-3) For State fiscal years 2012 through 2045, the
minimum contribution to the System to be made by the State for
each fiscal year shall be an amount determined by the System to
be sufficient to bring the total assets of the System up to 90%
of the total actuarial liabilities of the System by the end of
State fiscal year 2045. In making these determinations, the
required State contribution shall be calculated each year as a
level percentage of payroll over the years remaining to and
including fiscal year 2045 and shall be determined under the
projected unit credit actuarial cost method.
For State fiscal years in which the State is required to
contribute to participants' individual accounts in the defined
contribution plan under Section 16-207, the minimum
contribution to the System shall also include the amounts
required under Section 16-207.
For each of State fiscal years 2018, 2019, and 2020, the
State shall make an additional contribution to the System
equal to 2% of the total payroll of each employee who is deemed
to have elected the benefits under Section 1-161 or who has
made the election under subsection (c) of Section 1-161.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applies in State fiscal year 2018 or thereafter shall be
implemented in equal annual amounts over a 5-year period

HB1636 - 19 - LRB104 07705 RPS 17749 b
beginning in the State fiscal year in which the actuarial
change first applies to the required State contribution.
A change in an actuarial or investment assumption that
increases or decreases the required State contribution and
first applied to the State contribution in fiscal year 2014,
2015, 2016, or 2017 shall be implemented:
(i) as already applied in State fiscal years before
2018; and
(ii) in the portion of the 5-year period beginning in
the State fiscal year in which the actuarial change first
applied that occurs in State fiscal year 2018 or
thereafter, by calculating the change in equal annual
amounts over that 5-year period and then implementing it
at the resulting annual rate in each of the remaining
fiscal years in that 5-year period.
For State fiscal years 1996 through 2005, the State
contribution to the System, as a percentage of the applicable
employee payroll, shall be increased in equal annual
increments so that by State fiscal year 2011, the State is
contributing at the rate required under this Section; except
that in the following specified State fiscal years, the State
contribution to the System shall not be less than the
following indicated percentages of the applicable employee
payroll, even if the indicated percentage will produce a State
contribution in excess of the amount otherwise required under
this subsection and subsection (a), and notwithstanding any

HB1636 - 20 - LRB104 07705 RPS 17749 b
contrary certification made under subsection (a-1) before May
27, 1998 (the effective date of Public Act 90-582): 10.02% in
FY 1999; 10.77% in FY 2000; 11.47% in FY 2001; 12.16% in FY
2002; 12.86% in FY 2003; and 13.56% in FY 2004.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2006
is $534,627,700.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2007
is $738,014,500.
For each of State fiscal years 2008 through 2009, the
State contribution to the System, as a percentage of the
applicable employee payroll, shall be increased in equal
annual increments from the required State contribution for
State fiscal year 2007, so that by State fiscal year 2011, the
State is contributing at the rate otherwise required under
this Section.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2010
is $2,089,268,000 and shall be made from the proceeds of bonds
sold in fiscal year 2010 pursuant to Section 7.2 of the General
Obligation Bond Act, less (i) the pro rata share of bond sale
expenses determined by the System's share of total bond
proceeds, (ii) any amounts received from the Common School
Fund in fiscal year 2010, and (iii) any reduction in bond
proceeds due to the issuance of discounted bonds, if

HB1636 - 21 - LRB104 07705 RPS 17749 b
applicable.
Notwithstanding any other provision of this Article, the
total required State contribution for State fiscal year 2011
is the amount recertified by the System on or before April 1,
2011 pursuant to subsection (a-1) of this Section and shall be
made from the proceeds of bonds sold in fiscal year 2011
pursuant to Section 7.2 of the General Obligation Bond Act,
less (i) the pro rata share of bond sale expenses determined by
the System's share of total bond proceeds, (ii) any amounts
received from the Common School Fund in fiscal year 2011, and
(iii) any reduction in bond proceeds due to the issuance of
discounted bonds, if applicable. This amount shall include, in
addition to the amount certified by the System, an amount
necessary to meet employer contributions required by the State
as an employer under paragraph (e) of this Section, which may
also be used by the System for contributions required by
paragraph (a) of Section 16-127.
Beginning in State fiscal year 2046, the minimum State
contribution for each fiscal year shall be the amount needed
to maintain the total assets of the System at 90% of the total
actuarial liabilities of the System.
Amounts received by the System pursuant to Section 25 of
the Budget Stabilization Act or Section 8.12 of the State
Finance Act in any fiscal year do not reduce and do not
constitute payment of any portion of the minimum State
contribution required under this Article in that fiscal year.

HB1636 - 22 - LRB104 07705 RPS 17749 b
Such amounts shall not reduce, and shall not be included in the
calculation of, the required State contributions under this
Article in any future year until the System has reached a
funding ratio of at least 90%. A reference in this Article to
the "required State contribution" or any substantially similar
term does not include or apply to any amounts payable to the
System under Section 25 of the Budget Stabilization Act.
Notwithstanding any other provision of this Section, the
required State contribution for State fiscal year 2005 and for
fiscal year 2008 and each fiscal year thereafter, as
calculated under this Section and certified under subsection
(a-1), shall not exceed an amount equal to (i) the amount of
the required State contribution that would have been
calculated under this Section for that fiscal year if the
System had not received any payments under subsection (d) of
Section 7.2 of the General Obligation Bond Act, minus (ii) the
portion of the State's total debt service payments for that
fiscal year on the bonds issued in fiscal year 2003 for the
purposes of that Section 7.2, as determined and certified by
the Comptroller, that is the same as the System's portion of
the total moneys distributed under subsection (d) of Section
7.2 of the General Obligation Bond Act. In determining this
maximum for State fiscal years 2008 through 2010, however, the
amount referred to in item (i) shall be increased, as a
percentage of the applicable employee payroll, in equal
increments calculated from the sum of the required State

HB1636 - 23 - LRB104 07705 RPS 17749 b
contribution for State fiscal year 2007 plus the applicable
portion of the State's total debt service payments for fiscal
year 2007 on the bonds issued in fiscal year 2003 for the
purposes of Section 7.2 of the General Obligation Bond Act, so
that, by State fiscal year 2011, the State is contributing at
the rate otherwise required under this Section.
(b-4) Beginning in fiscal year 2018, each employer under
this Article shall pay to the System a required contribution
determined as a percentage of projected payroll and sufficient
to produce an annual amount equal to:
(i) for each of fiscal years 2018, 2019, and 2020, the
defined benefit normal cost of the defined benefit plan,
less the employee contribution, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (b) of Section 1-161; for fiscal
year 2021 and each fiscal year thereafter, the defined
benefit normal cost of the defined benefit plan, less the
employee contribution, plus 2%, for each employee of that
employer who has elected or who is deemed to have elected
the benefits under Section 1-161 or who has made the
election under subsection (b) of Section 1-161; plus
(ii) the amount required for that fiscal year to
amortize any unfunded actuarial accrued liability
associated with the present value of liabilities
attributable to the employer's account under Section

HB1636 - 24 - LRB104 07705 RPS 17749 b
16-158.3, determined as a level percentage of payroll over
a 30-year rolling amortization period.
In determining contributions required under item (i) of
this subsection, the System shall determine an aggregate rate
for all employers, expressed as a percentage of projected
payroll.
In determining the contributions required under item (ii)
of this subsection, the amount shall be computed by the System
on the basis of the actuarial assumptions and tables used in
the most recent actuarial valuation of the System that is
available at the time of the computation.
The contributions required under this subsection (b-4)
shall be paid by an employer concurrently with that employer's
payroll payment period. The State, as the actual employer of
an employee, shall make the required contributions under this
subsection.
(c) Payment of the required State contributions and of all
pensions, retirement annuities, death benefits, refunds, and
other benefits granted under or assumed by this System, and
all expenses in connection with the administration and
operation thereof, are obligations of the State.
If members are paid from special trust or federal funds
which are administered by the employing unit, whether school
district or other unit, the employing unit shall pay to the
System from such funds the full accruing retirement costs
based upon that service, which, beginning July 1, 2017, shall

HB1636 - 25 - LRB104 07705 RPS 17749 b
be at a rate, expressed as a percentage of salary, equal to the
total employer's normal cost, expressed as a percentage of
payroll, as determined by the System. Employer contributions,
based on salary paid to members from federal funds, may be
forwarded by the distributing agency of the State of Illinois
to the System prior to allocation, in an amount determined in
accordance with guidelines established by such agency and the
System. Any contribution for fiscal year 2015 collected as a
result of the change made by Public Act 98-674 shall be
considered a State contribution under subsection (b-3) of this
Section.
(d) Effective July 1, 1986, any employer of a teacher as
defined in paragraph (8) of Section 16-106 shall pay the
employer's normal cost of benefits based upon the teacher's
service, in addition to employee contributions, as determined
by the System. Such employer contributions shall be forwarded
monthly in accordance with guidelines established by the
System.
However, with respect to benefits granted under Section
16-133.4 or 16-133.5 to a teacher as defined in paragraph (8)
of Section 16-106, the employer's contribution shall be 12%
(rather than 20%) of the member's highest annual salary rate
for each year of creditable service granted, and the employer
shall also pay the required employee contribution on behalf of
the teacher. For the purposes of Sections 16-133.4 and
16-133.5, a teacher as defined in paragraph (8) of Section

HB1636 - 26 - LRB104 07705 RPS 17749 b
16-106 who is serving in that capacity while on leave of
absence from another employer under this Article shall not be
considered an employee of the employer from which the teacher
is on leave.
(e) Beginning July 1, 1998, every employer of a teacher
shall pay to the System an employer contribution computed as
follows:
(1) Beginning July 1, 1998 through June 30, 1999, the
employer contribution shall be equal to 0.3% of each
teacher's salary.
(2) Beginning July 1, 1999 and thereafter, the
employer contribution shall be equal to 0.58% of each
teacher's salary.
The school district or other employing unit may pay these
employer contributions out of any source of funding available
for that purpose and shall forward the contributions to the
System on the schedule established for the payment of member
contributions.
These employer contributions are intended to offset a
portion of the cost to the System of the increases in
retirement benefits resulting from Public Act 90-582.
Each employer of teachers is entitled to a credit against
the contributions required under this subsection (e) with
respect to salaries paid to teachers for the period January 1,
2002 through June 30, 2003, equal to the amount paid by that
employer under subsection (a-5) of Section 6.6 of the State

HB1636 - 27 - LRB104 07705 RPS 17749 b
Employees Group Insurance Act of 1971 with respect to salaries
paid to teachers for that period.
The additional 1% employee contribution required under
Section 16-152 by Public Act 90-582 is the responsibility of
the teacher and not the teacher's employer, unless the
employer agrees, through collective bargaining or otherwise,
to make the contribution on behalf of the teacher.
If an employer is required by a contract in effect on May
1, 1998 between the employer and an employee organization to
pay, on behalf of all its full-time employees covered by this
Article, all mandatory employee contributions required under
this Article, then the employer shall be excused from paying
the employer contribution required under this subsection (e)
for the balance of the term of that contract. The employer and
the employee organization shall jointly certify to the System
the existence of the contractual requirement, in such form as
the System may prescribe. This exclusion shall cease upon the
termination, extension, or renewal of the contract at any time
after May 1, 1998.
(f) If the amount of a teacher's salary for any school year
used to determine final average salary exceeds the member's
annual full-time salary rate with the same employer for the
previous school year by more than 6%, the teacher's employer
shall pay to the System, in addition to all other payments
required under this Section and in accordance with guidelines
established by the System, the present value of the increase

HB1636 - 28 - LRB104 07705 RPS 17749 b
in benefits resulting from the portion of the increase in
salary that is in excess of 6%. This present value shall be
computed by the System on the basis of the actuarial
assumptions and tables used in the most recent actuarial
valuation of the System that is available at the time of the
computation. If a teacher's salary for the 2005-2006 school
year is used to determine final average salary under this
subsection (f), then the changes made to this subsection (f)
by Public Act 94-1057 shall apply in calculating whether the
increase in his or her salary is in excess of 6%. For the
purposes of this Section, change in employment under Section
10-21.12 of the School Code on or after June 1, 2005 shall
constitute a change in employer. The System may require the
employer to provide any pertinent information or
documentation. The changes made to this subsection (f) by
Public Act 94-1111 apply without regard to whether the teacher
was in service on or after its effective date.
Whenever it determines that a payment is or may be
required under this subsection, the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute and, if the
employer asserts that the calculation is subject to subsection

HB1636 - 29 - LRB104 07705 RPS 17749 b
(g), (g-5), (g-10), (g-15), (g-20), or (h) of this Section,
must include an affidavit setting forth and attesting to all
facts within the employer's knowledge that are pertinent to
the applicability of that subsection. Upon receiving a timely
application for recalculation, the System shall review the
application and, if appropriate, recalculate the amount due.
The employer contributions required under this subsection
(f) may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not
paid within 90 days after receipt of the bill, then interest
will be charged at a rate equal to the System's annual
actuarially assumed rate of return on investment compounded
annually from the 91st day after receipt of the bill. Payments
must be concluded within 3 years after the employer's receipt
of the bill.
(f-1) (Blank).
(g) This subsection (g) applies only to payments made or
salary increases given on or after June 1, 2005 but before July
1, 2011. The changes made by Public Act 94-1057 shall not
require the System to refund any payments received before July
31, 2006 (the effective date of Public Act 94-1057).
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases paid to
teachers under contracts or collective bargaining agreements
entered into, amended, or renewed before June 1, 2005.
When assessing payment for any amount due under subsection

HB1636 - 30 - LRB104 07705 RPS 17749 b
(f), the System shall exclude salary increases paid to a
teacher at a time when the teacher is 10 or more years from
retirement eligibility under Section 16-132 or 16-133.2.
When assessing payment for any amount due under subsection
(f), the System shall exclude salary increases resulting from
overload work, including summer school, when the school
district has certified to the System, and the System has
approved the certification, that (i) the overload work is for
the sole purpose of classroom instruction in excess of the
standard number of classes for a full-time teacher in a school
district during a school year and (ii) the salary increases
are equal to or less than the rate of pay for classroom
instruction computed on the teacher's current salary and work
schedule.
When assessing payment for any amount due under subsection
(f), the System shall exclude a salary increase resulting from
a promotion (i) for which the employee is required to hold a
certificate or supervisory endorsement issued by the State
Teacher Certification Board that is a different certification
or supervisory endorsement than is required for the teacher's
previous position and (ii) to a position that has existed and
been filled by a member for no less than one complete academic
year and the salary increase from the promotion is an increase
that results in an amount no greater than the lesser of the
average salary paid for other similar positions in the
district requiring the same certification or the amount

HB1636 - 31 - LRB104 07705 RPS 17749 b
stipulated in the collective bargaining agreement for a
similar position requiring the same certification.
When assessing payment for any amount due under subsection
(f), the System shall exclude any payment to the teacher from
the State of Illinois or the State Board of Education over
which the employer does not have discretion, notwithstanding
that the payment is included in the computation of final
average salary.
(g-5) When assessing payment for any amount due under
subsection (f), the System shall exclude salary increases
resulting from overload or stipend work performed in a school
year subsequent to a school year in which the employer was
unable to offer or allow to be conducted overload or stipend
work due to an emergency declaration limiting such activities.
(g-10) When assessing payment for any amount due under
subsection (f), the System shall exclude salary increases
resulting from increased instructional time that exceeded the
instructional time required during the 2019-2020 school year.
(g-15) When assessing payment for any amount due under
subsection (f), the System shall exclude salary increases
resulting from teaching summer school on or after May 1, 2021
and before September 15, 2022.
(g-20) When assessing payment for any amount due under
subsection (f), the System shall exclude salary increases
necessary to bring a school board in compliance with Public
Act 101-443 or this amendatory Act of the 103rd General

HB1636 - 32 - LRB104 07705 RPS 17749 b
Assembly.
(h) When assessing payment for any amount due under
subsection (f), the System shall exclude any salary increase
described in subsection (g) of this Section given on or after
July 1, 2011 but before July 1, 2014 under a contract or
collective bargaining agreement entered into, amended, or
renewed on or after June 1, 2005 but before July 1, 2011.
Notwithstanding any other provision of this Section, any
payments made or salary increases given after June 30, 2014
shall be used in assessing payment for any amount due under
subsection (f) of this Section.
(i) The System shall prepare a report and file copies of
the report with the Governor and the General Assembly by
January 1, 2007 that contains all of the following
information:
(1) The number of recalculations required by the
changes made to this Section by Public Act 94-1057 for
each employer.
(2) The dollar amount by which each employer's
contribution to the System was changed due to
recalculations required by Public Act 94-1057.
(3) The total amount the System received from each
employer as a result of the changes made to this Section by
Public Act 94-4.
(4) The increase in the required State contribution
resulting from the changes made to this Section by Public

HB1636 - 33 - LRB104 07705 RPS 17749 b
Act 94-1057.
(i-5) For school years beginning on or after July 1, 2017,
if the amount of a participant's salary for any school year
exceeds the amount of the salary set for the Governor, the
participant's employer shall pay to the System, in addition to
all other payments required under this Section and in
accordance with guidelines established by the System, an
amount determined by the System to be equal to the employer
normal cost, as established by the System and expressed as a
total percentage of payroll, multiplied by the amount of
salary in excess of the amount of the salary set for the
Governor. This amount shall be computed by the System on the
basis of the actuarial assumptions and tables used in the most
recent actuarial valuation of the System that is available at
the time of the computation. The System may require the
employer to provide any pertinent information or
documentation.
Whenever it determines that a payment is or may be
required under this subsection, the System shall calculate the
amount of the payment and bill the employer for that amount.
The bill shall specify the calculations used to determine the
amount due. If the employer disputes the amount of the bill, it
may, within 30 days after receipt of the bill, apply to the
System in writing for a recalculation. The application must
specify in detail the grounds of the dispute. Upon receiving a
timely application for recalculation, the System shall review

HB1636 - 34 - LRB104 07705 RPS 17749 b
the application and, if appropriate, recalculate the amount
due.
The employer contributions required under this subsection
may be paid in the form of a lump sum within 90 days after
receipt of the bill. If the employer contributions are not
paid within 90 days after receipt of the bill, then interest
will be charged at a rate equal to the System's annual
actuarially assumed rate of return on investment compounded
annually from the 91st day after receipt of the bill. Payments
must be concluded within 3 years after the employer's receipt
of the bill.
(j) For purposes of determining the required State
contribution to the System, the value of the System's assets
shall be equal to the actuarial value of the System's assets,
which shall be calculated as follows:
As of June 30, 2008, the actuarial value of the System's
assets shall be equal to the market value of the assets as of
that date. In determining the actuarial value of the System's
assets for fiscal years after June 30, 2008, any actuarial
gains or losses from investment return incurred in a fiscal
year shall be recognized in equal annual amounts over the
5-year period following that fiscal year.
(k) For purposes of determining the required State
contribution to the system for a particular year, the
actuarial value of assets shall be assumed to earn a rate of
return equal to the system's actuarially assumed rate of

HB1636 - 35 - LRB104 07705 RPS 17749 b
return.
(Source: P.A. 102-16, eff. 6-17-21; 102-525, eff. 8-20-21;
102-558, eff. 8-20-21; 102-813, eff. 5-13-22; 103-515, eff.
8-11-23; 103-588, eff. 6-5-24.)
(40 ILCS 5/16-203)
Sec. 16-203. Application and expiration of new benefit
increases.
(a) As used in this Section, "new benefit increase" means
an increase in the amount of any benefit provided under this
Article, or an expansion of the conditions of eligibility for
any benefit under this Article, that results from an amendment
to this Code that takes effect after June 1, 2005 (the
effective date of Public Act 94-4). "New benefit increase",
however, does not include any benefit increase resulting from
the changes made to Article 1 or this Article by Public Act
95-910, Public Act 100-23, Public Act 100-587, Public Act
100-743, Public Act 100-769, Public Act 101-10, Public Act
101-49, Public Act 102-16, or Public Act 102-871, or this
amendatory Act of the 104th General Assembly.
(b) Notwithstanding any other provision of this Code or
any subsequent amendment to this Code, every new benefit
increase is subject to this Section and shall be deemed to be
granted only in conformance with and contingent upon
compliance with the provisions of this Section.
(c) The Public Act enacting a new benefit increase must

HB1636 - 36 - LRB104 07705 RPS 17749 b
identify and provide for payment to the System of additional
funding at least sufficient to fund the resulting annual
increase in cost to the System as it accrues.
Every new benefit increase is contingent upon the General
Assembly providing the additional funding required under this
subsection. The Commission on Government Forecasting and
Accountability shall analyze whether adequate additional
funding has been provided for the new benefit increase and
shall report its analysis to the Public Pension Division of
the Department of Insurance. A new benefit increase created by
a Public Act that does not include the additional funding
required under this subsection is null and void. If the Public
Pension Division determines that the additional funding
provided for a new benefit increase under this subsection is
or has become inadequate, it may so certify to the Governor and
the State Comptroller and, in the absence of corrective action
by the General Assembly, the new benefit increase shall expire
at the end of the fiscal year in which the certification is
made.
(d) Every new benefit increase shall expire 5 years after
its effective date or on such earlier date as may be specified
in the language enacting the new benefit increase or provided
under subsection (c). This does not prevent the General
Assembly from extending or re-creating a new benefit increase
by law.
(e) Except as otherwise provided in the language creating

HB1636 - 37 - LRB104 07705 RPS 17749 b
the new benefit increase, a new benefit increase that expires
under this Section continues to apply to persons who applied
and qualified for the affected benefit while the new benefit
increase was in effect and to the affected beneficiaries and
alternate payees of such persons, but does not apply to any
other person, including, without limitation, a person who
continues in service after the expiration date and did not
apply and qualify for the affected benefit while the new
benefit increase was in effect.
(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
102-813, eff. 5-13-22; 102-871, eff. 5-13-22; 103-154, eff.
6-30-23.)
(40 ILCS 5/16-207 new)
Sec. 16-207. Voluntary defined contribution plan.
(a) As soon as practicable after the effective date of
this amendatory Act of the 104th General Assembly, the System
shall develop and offer a defined contribution plan for active
members of the System. The defined contribution plan shall
collect optional employee contributions, employer
contributions, and State contributions into individual
accounts and shall offer investment options to participants.
There shall be no maximum or minimum contribution requirements
for participation in the defined contribution plan.
(b) On an annual basis, the employer of a participant in
the defined contribution plan shall deposit in the

HB1636 - 38 - LRB104 07705 RPS 17749 b
participant's defined contribution plan account an amount
equal to the amount contributed by the participant during the
preceding year and the State shall deposit in the
participant's defined contribution plan account an amount
equal to the amount contributed by the participant during the
preceding year. If the State is the actual employer of the
participant, then the State shall contribute an additional
amount equal to the employer's contribution required under
this subsection.
(c) A participant in the defined contribution plan may not
withdraw moneys from the defined contribution plan account
while the participant is an active member of the System.
(d) The defined contribution plan under this Section shall
be operated in full compliance with any applicable State and
federal laws, and the System shall use generally accepted
practices in creating and maintaining the benefit for the best
interest of the participants.
Section 90. The State Mandates Act is amended by adding
Section 8.49 as follows:
(30 ILCS 805/8.49 new)
Sec. 8.49. 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.
HB1636 - 39 - LRB104 07705 RPS 17749 b
INDEX
Statutes amended in order of appearance