Bill Text: IL HB4925 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-02-18 - Rule 19(a) / Re-referred to Rules Committee [HB4925 Detail]

Download: Illinois-2021-HB4925-Introduced.html

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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
HB4925 LRB102 24937 RPS 34192 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 adding
Section 14-160 as follows:
(40 ILCS 5/14-160 new)
Sec. 14-160. Deferred retirement option plan.
(a) In this Section, "deferred retirement option plan" or
"DROP" means the deferred retirement option plan created under
this Section.
(b) There is created a deferred retirement option plan. A
member who (1) is otherwise eligible to retire under this
Article; (2) is a State policeman; (3) holds the rank of
trooper, special agent, or sergeant; and (4) makes an election
to participate in the DROP on or before January 1, 2027 may
participate in the DROP. A participant in the DROP shall make
an election with the System on forms provided by the System. A
participant may elect to participate for a period of time not
to exceed 5 years from the date of election. As soon as is
practicable, 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

HB4925 - 2 - LRB102 24937 RPS 34192 b
on the date of the election under this Section. The account
shall be held on behalf of the member. The System may contract
with a financial service provider or other entity capable of
holding an account for the member and consistent with any
fiduciary requirements. The account shall be an interest
bearing or investment account and any interest or return on
investment shall accrue to the account. The System may
authorize the member to make selections governing the interest
or investment of the member's account balance and shall
establish the processes for making such selections. Any direct
costs associated with managing the account or the costs of
investments shall be paid from the account. Employee
contributions that would otherwise be required if the member
were an active participant of the System shall be placed into
the account. If otherwise allowable, the account may be held
or managed by the Illinois State Board of Investment pursuant
to the deferred compensation plan. 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. Upon expiration of the DROP, control
of the account shall transfer to the member. The System shall
provide options for the transfer of the account consistent
with its fiduciary duty and any applicable State or federal

HB4925 - 3 - LRB102 24937 RPS 34192 b
law. An expiration of a DROP may not occur after January 1,
2032. For any purpose not directly covered under this Section,
the member shall be considered in active service as a trooper,
special agent, or sergeant for all other purposes under State
law.