102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4925
 
Introduced , by Rep. Jay Hoffman
 
SYNOPSIS AS INTRODUCED:



40 ILCS 5/14-160 new

 Amends the State Employee Article of the Illinois Pension Code. Creates a deferred retirement option plan (DROP) for a member who is otherwise eligible to retire under the Article; is a State policeman; holds the rank of trooper, special agent, or sergeant; and makes an election to participate in the DROP on or before January 1, 2027. Provides that a participant in the DROP may elect to participate for a period of time not to exceed 5 years. Provides that the System shall process the election and shall begin to make payments into an account on behalf of the member equal to the monthly amount of retirement annuity the member would otherwise be eligible to receive had the member retired on the date of the election to participate in the DROP. Provides that any automatic annual increases that would have otherwise been applied to the member's benefit had the member elected to retire instead of participate in the DROP shall accrue to the member's monthly payment placed into the account prior to the expiration of the DROP and shall otherwise apply to the member's annuity upon expiration of the DROP. Provides that after expiration of the DROP, control of the account shall transfer to the member. Provides that an expiration of a DROP may not occur after January 1, 2032. Contains provisions concerning financial service providers; selections governing the interest or investments; management of the account; and transfer of the account.



LRB102 24937 RPS 34192 b


 
 
A BILL FOR
 


HB4925LRB102 24937 RPS 34192 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 14-160 as follows:

6 (40 ILCS 5/14-160 new)
7 Sec. 14-160. Deferred retirement option plan.
8 (a) In this Section, "deferred retirement option plan" or 
9"DROP" means the deferred retirement option plan created under 
10this Section.
11 (b) There is created a deferred retirement option plan. A 
12member who (1) is otherwise eligible to retire under this 
13Article; (2) is a State policeman; (3) holds the rank of 
14trooper, special agent, or sergeant; and (4) makes an election 
15to participate in the DROP on or before January 1, 2027 may 
16participate in the DROP. A participant in the DROP shall make 
17an election with the System on forms provided by the System. A 
18participant may elect to participate for a period of time not 
19to exceed 5 years from the date of election. As soon as is 
20practicable, the System shall process the election and shall 
21begin to make payments into an account on behalf of the member 
22equal to the monthly amount of retirement annuity the member 
23would otherwise be eligible to receive had the member retired 
 
 
HB4925- 2 -LRB102 24937 RPS 34192 b


1on the date of the election under this Section. The account 
2shall be held on behalf of the member. The System may contract 
3with a financial service provider or other entity capable of 
4holding an account for the member and consistent with any 
5fiduciary requirements. The account shall be an interest 
6bearing or investment account and any interest or return on 
7investment shall accrue to the account. The System may 
8authorize the member to make selections governing the interest 
9or investment of the member's account balance and shall 
10establish the processes for making such selections. Any direct 
11costs associated with managing the account or the costs of 
12investments shall be paid from the account. Employee 
13contributions that would otherwise be required if the member 
14were an active participant of the System shall be placed into 
15the account. If otherwise allowable, the account may be held 
16or managed by the Illinois State Board of Investment pursuant 
17to the deferred compensation plan. Any automatic annual 
18increases that would have otherwise been applied to the 
19member's benefit had the member elected to retire instead of 
20participate in the DROP shall accrue to the member's monthly 
21payment placed into the account prior to the expiration of the 
22DROP and shall otherwise apply to the member's annuity upon 
23expiration of the DROP. Upon expiration of the DROP, control 
24of the account shall transfer to the member. The System shall 
25provide options for the transfer of the account consistent 
26with its fiduciary duty and any applicable State or federal 
 
 
HB4925- 3 -LRB102 24937 RPS 34192 b


1law. An expiration of a DROP may not occur after January 1, 
22032. For any purpose not directly covered under this Section, 
3the member shall be considered in active service as a trooper, 
4special agent, or sergeant for all other purposes under State 
5law.