Bill Text: IL SB3404 | 2025-2026 | 104th General Assembly | Engrossed

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Bill Title: Reinserts the provisions of the introduced bill with the following changes. Provides that the county board of a county of more than 3,000,000 inhabitants and a municipality may (instead of shall) establish an accelerated pension benefit program. Makes conforming changes. Provides that participants' elections to receive the accelerated pension benefit shall be processed and paid in the order in which the complete applications are received by the fund. Sets forth provisions concerning notifying the pension fund that the county or municipality has elected to establish an accelerated pension benefit program and remitting a contribution for the program. Provides that moneys remitted to the pension fund for the purpose of the accelerated pension benefit program must be kept in a separate account. Provides that, if any moneys remain in this account at the end of the fiscal year, the fund must remit those moneys back to the employer within one month after the end of the fiscal year, unless the employer notifies the pension fund at least one month before the end of the fiscal year that the funds shall remain in the account to be used for the subsequent fiscal year. Further amends the Illinois Pension Code. Authorizes accelerated pension benefit payments under the Chicago Teacher Article of the Code. Amends the Chicago Public Schools Article of the School Code to make conforming changes. Effective immediately.

Sponsorship: Slight Partisan Bill (Republican 5-3)

Status: (Engrossed - Dead) 2026-05-31 - Rule 19(a) / Re-referred to Rules Committee [SB3404 Detail]

Download: Illinois-2025-SB3404-Engrossed.html

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SB3404 Engrossed LRB104 18864 RPS 32309 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
Sections 3-144.3, 3-144.4, 4-138.15, 4-138.16, 5-218.5,
5-218.6, 6-213.5, 6-213.6, 8-244.5, 8-244.6, 9-134.6, 9-134.7,
10-104.6, 10-104.7, 11-223.5, 11-223.6, 12-133.8, 12-133.9,
17-120.5, and 17-120.6 as follows:
(40 ILCS 5/3-144.3 new)
Sec. 3-144.3. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement pension under this
Article;
(3) has not received any retirement pension under this
Article; and
(4) has not made the election under Section 3-144.4.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is

SB3404 Engrossed - 2 - LRB104 18864 RPS 32309 b
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's or
disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the fund offers under this subsection in lieu of
receiving any pension benefit.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated

SB3404 Engrossed - 3 - LRB104 18864 RPS 32309 b
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this

SB3404 Engrossed - 4 - LRB104 18864 RPS 32309 b
Section, the fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the fund for the purpose of the
accelerated pension benefit program must be kept in a separate
account. If the fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the fund shall not accept the member's irrevocable election
and shall notify the member of that fact. The member may
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the fund,
subject to the availability of funds. If the fund accepts the
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the fund
shall transfer, from the moneys remitted to the fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified
account. If any moneys remain in the account maintained by the
fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.

SB3404 Engrossed - 5 - LRB104 18864 RPS 32309 b
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable fund to cease to be a
qualified plan under the Internal Revenue Code of 1986.
(40 ILCS 5/3-144.4 new)
Sec. 3-144.4. Accelerated pension benefit payment for a
reduction in annual retirement pension increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
pension using the formula applicable to the Tier 1 member and
the present value of the automatic annual increases to the
Tier 1 member's retirement pension using the formula provided
under subsection (b-5).
"Eligible person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
pension under this Article;
(3) meets the age and service requirements for
receiving a retirement pension under this Article;
(4) has not received any retirement pension under this
Article; and
(5) has not made the election under Section 3-144.3.

SB3404 Engrossed - 6 - LRB104 18864 RPS 32309 b
"Tier 1 member" means a person who first became a police
officer under this Article before January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide
funding for an accelerated pension benefit program, the fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement pension calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement pension of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the pension start date, whichever

SB3404 Engrossed - 7 - LRB104 18864 RPS 32309 b
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement pension.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement pension shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that

SB3404 Engrossed - 8 - LRB104 18864 RPS 32309 b
purpose. Moneys remitted to the fund for the purpose of this
program must be kept in a separate account. If the fund
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the fund, subject to the
availability of funds. If the fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the fund shall transfer, from
the moneys remitted to the fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies
the fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) No provision of this Section shall be interpreted in a
way that would cause the applicable fund to cease to be a

SB3404 Engrossed - 9 - LRB104 18864 RPS 32309 b
qualified plan under the Internal Revenue Code of 1986.
(40 ILCS 5/4-138.15 new)
Sec. 4-138.15. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement pension under this
Article;
(3) has not received any retirement pension under this
Article; and
(4) has not made the election under Section 4-138.16.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's or
disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits

SB3404 Engrossed - 10 - LRB104 18864 RPS 32309 b
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the fund offers under this subsection in lieu of
receiving any pension benefit.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the fund earned as a result of
that return to active service shall be based solely on the

SB3404 Engrossed - 11 - LRB104 18864 RPS 32309 b
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the fund for the purpose of the
accelerated pension benefit program must be kept in a separate
account. If the fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the fund shall not accept the member's irrevocable election
and shall notify the member of that fact. The member may

SB3404 Engrossed - 12 - LRB104 18864 RPS 32309 b
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the fund,
subject to the availability of funds. If the fund accepts the
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the fund
shall transfer, from the moneys remitted to the fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified
account. If any moneys remain in the account maintained by the
fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the applicable fund to cease to be a
qualified plan under the Internal Revenue Code of 1986.
(40 ILCS 5/4-138.16 new)
Sec. 4-138.16. Accelerated pension benefit payment for a
reduction in annual retirement pension increases.

SB3404 Engrossed - 13 - LRB104 18864 RPS 32309 b
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
pension using the formula applicable to the Tier 1 member and
the present value of the automatic annual increases to the
Tier 1 member's retirement pension using the formula provided
under subsection (b-5).
"Eligible person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
pension under this Article;
(3) meets the age and service requirements for
receiving a retirement pension under this Article;
(4) has not received any retirement pension under this
Article; and
(5) has not made the election under Section 4-138.15.
"Tier 1 member" means a person who first became a
firefighter before January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide

SB3404 Engrossed - 14 - LRB104 18864 RPS 32309 b
funding for an accelerated pension benefit program, the fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement pension calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement pension of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the pension start date, whichever
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement pension.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement pension shall be calculated in
accordance with the formula provided under subsection
(b-5); and

SB3404 Engrossed - 15 - LRB104 18864 RPS 32309 b
(2) the accelerated pension benefit payment may not be
repaid to the fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the fund for the purpose of this
program must be kept in a separate account. If the fund
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the fund, subject to the

SB3404 Engrossed - 16 - LRB104 18864 RPS 32309 b
availability of funds. If the fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the fund shall transfer, from
the moneys remitted to the fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies
the fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) No provision of this Section shall be interpreted in a
way that would cause the applicable fund to cease to be a
qualified plan under the Internal Revenue Code of 1986.
(40 ILCS 5/5-218.5 new)
Sec. 5-218.5. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be

SB3404 Engrossed - 17 - LRB104 18864 RPS 32309 b
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 5-218.6.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's or
disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal

SB3404 Engrossed - 18 - LRB104 18864 RPS 32309 b
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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

SB3404 Engrossed - 19 - LRB104 18864 RPS 32309 b
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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of the
accelerated pension benefit program must be kept in a separate
account. If the Fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the Fund shall not accept the member's irrevocable election
and shall notify the member of that fact. The member may
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the Fund,
subject to the availability of funds. If the Fund accepts the
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the Fund
shall transfer, from the moneys remitted to the Fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified

SB3404 Engrossed - 20 - LRB104 18864 RPS 32309 b
account. If any moneys remain in the account maintained by the
Fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the Fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the Fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) 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.
(40 ILCS 5/5-218.6 new)
Sec. 5-218.6. Accelerated pension benefit payment for a
reduction in annual retirement annuity increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity and survivor's annuity using the formula applicable to
the Tier 1 member and the present value of the automatic annual
increases to the Tier 1 member's retirement annuity using the
formula provided under subsection (b-5).
"Eligible person" means a person who:

SB3404 Engrossed - 21 - LRB104 18864 RPS 32309 b
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 5-218.5.
"Tier 1 member" means a person who first became a
policeman before January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the Fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide
funding for an accelerated pension benefit program, the Fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement pension calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person

SB3404 Engrossed - 22 - LRB104 18864 RPS 32309 b
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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

SB3404 Engrossed - 23 - LRB104 18864 RPS 32309 b
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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of this
program must be kept in a separate account. If the Fund
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the Fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the Fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies

SB3404 Engrossed - 24 - LRB104 18864 RPS 32309 b
the Fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) 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.
(40 ILCS 5/6-213.5 new)
Sec. 6-213.5. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 6-213.6.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.

SB3404 Engrossed - 25 - LRB104 18864 RPS 32309 b
"Pension benefit" also includes applicable survivor's or
disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other

SB3404 Engrossed - 26 - LRB104 18864 RPS 32309 b
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount

SB3404 Engrossed - 27 - LRB104 18864 RPS 32309 b
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of the
accelerated pension benefit program must be kept in a separate
account. If the Fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the Fund shall not accept the member's irrevocable election
and shall notify the member of that fact. The member may
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the Fund,
subject to the availability of funds. If the Fund accepts the
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the Fund
shall transfer, from the moneys remitted to the Fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified
account. If any moneys remain in the account maintained by the
Fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the Fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the Fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.
(g) The Board shall adopt any rules, including emergency

SB3404 Engrossed - 28 - LRB104 18864 RPS 32309 b
rules, necessary to implement this Section.
(h) 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.
(40 ILCS 5/6-213.6 new)
Sec. 6-213.6. Accelerated pension benefit payment for a
reduction in annual retirement annuity increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity and survivor's annuity using the formula applicable to
the Tier 1 member and the present value of the automatic annual
increases to the Tier 1 member's retirement annuity using the
formula provided under subsection (b-5). "Eligible person"
means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 6-213.5.
"Tier 1 member" means a person who first became a fireman

SB3404 Engrossed - 29 - LRB104 18864 RPS 32309 b
under this Article before January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the Fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide
funding for an accelerated pension benefit program, the Fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement pension calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of

SB3404 Engrossed - 30 - LRB104 18864 RPS 32309 b
the originally granted retirement annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of this

SB3404 Engrossed - 31 - LRB104 18864 RPS 32309 b
program must be kept in a separate account. If the Fund
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the Fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the Fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies
the Fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) 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.

SB3404 Engrossed - 32 - LRB104 18864 RPS 32309 b
(40 ILCS 5/8-244.5 new)
Sec. 8-244.5. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 8-244.6.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's or
disability benefits.
(b) If the city has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the city has
made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and

SB3404 Engrossed - 33 - LRB104 18864 RPS 32309 b
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit. A person who elects to receive
an accelerated pension benefit payment under this Section may
not elect to proceed under the Retirement Systems Reciprocal
Act with respect to service under this Article.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:

SB3404 Engrossed - 34 - LRB104 18864 RPS 32309 b
(1) Any benefits under the Fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the city for that purpose.
Moneys remitted to the Fund for the purpose of the accelerated
pension benefit program must be kept in a separate account. If
the Fund determines it does not have sufficient moneys to make
the accelerated pension benefit payment, then the Fund shall

SB3404 Engrossed - 35 - LRB104 18864 RPS 32309 b
not accept the member's irrevocable election and shall notify
the member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account maintained by the Fund for the purpose of
the accelerated pension benefit program at the end of the
fiscal year, the Fund must remit those moneys back to the city
within one month after the end of the fiscal year, unless the
city notifies the Fund at least one month before the end of the
fiscal year that the funds shall remain in the account to be
used for the subsequent fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) 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.
(40 ILCS 5/8-244.6 new)
Sec. 8-244.6. Accelerated pension benefit payment for a

SB3404 Engrossed - 36 - LRB104 18864 RPS 32309 b
reduction in annual retirement annuity.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity using the formula applicable to the Tier 1 member and
the present value of the automatic annual increases to the
Tier 1 member's retirement annuity using the formula provided
under subsection (b-5).
"Eligible person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 8-244.5.
"Tier 1 member" means an employee who first became a
participant under this Article or any reciprocal retirement
system or pension fund established under this Code before
January 1, 2011.
(b) Until June 30, 2028, if the city elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the city makes that election, whichever is later, the

SB3404 Engrossed - 37 - LRB104 18864 RPS 32309 b
Fund shall implement an accelerated pension benefit payment
option for eligible persons. Upon the request of an eligible
person, if the city has elected to provide funding for an
accelerated pension benefit program, the Fund shall calculate,
using actuarial tables and other assumptions adopted by the
Board, an accelerated pension benefit payment amount and shall
offer that eligible person the opportunity to irrevocably
elect to have his or her automatic annual increases in
retirement pension calculated in accordance with the formula
provided under subsection (b-5) in exchange for the
accelerated pension benefit payment. The election under this
subsection must be made before the eligible person receives
the first payment of a retirement pension otherwise payable
under this Article. An eligible person is limited to one
calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual

SB3404 Engrossed - 38 - LRB104 18864 RPS 32309 b
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the city for that purpose.
Moneys remitted to the Fund for the purpose of this program
must be kept in a separate account. If the Fund determines it
does not have sufficient moneys to make the accelerated
pension benefit payment, then the Fund shall not accept the
member's irrevocable election and shall notify the member of
that fact. The member may reapply for the accelerated pension

SB3404 Engrossed - 39 - LRB104 18864 RPS 32309 b
benefit payment after that fiscal year. Elections shall be
processed and paid in the order in which complete applications
are received by the Fund, subject to the availability of
funds. If the Fund accepts the member's irrevocable election
to receive an accelerated pension benefit payment under this
Section, then the Fund shall transfer, from the moneys
remitted to the Fund for that purpose, the amount of the
accelerated pension benefit payment into the member's eligible
retirement plan or qualified account. If any moneys remain in
the account at the end of the fiscal year, the Fund must remit
those moneys back to the city within one month after the end of
the fiscal year, unless the city notifies the Fund at least one
month before the end of the fiscal year that the funds shall
remain in the account to be used for the accelerated pension
benefit program for the subsequent fiscal year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) 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.
(40 ILCS 5/9-134.6 new)
Sec. 9-134.6. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:

SB3404 Engrossed - 40 - LRB104 18864 RPS 32309 b
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 9-134.7.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's,
widow's, or disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a

SB3404 Engrossed - 41 - LRB104 18864 RPS 32309 b
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit. A person who elects to receive
an accelerated pension benefit payment under this Section may
not elect to proceed under the Retirement Systems Reciprocal
Act with respect to service under this Article.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service

SB3404 Engrossed - 42 - LRB104 18864 RPS 32309 b
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of the
accelerated pension benefit program must be kept in a separate
account. If the Fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the Fund shall not accept the member's irrevocable election
and shall notify the member of that fact. The member may
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the Fund,
subject to the availability of funds. If the Fund accepts the

SB3404 Engrossed - 43 - LRB104 18864 RPS 32309 b
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the Fund
shall transfer, from the moneys remitted to the Fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified
account. If any moneys remain in the account maintained by the
Fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the Fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the Fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) 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.
(40 ILCS 5/9-134.7 new)
Sec. 9-134.7. Accelerated pension benefit payment for a
reduction in annual retirement annuity and widow's annuity
increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of

SB3404 Engrossed - 44 - LRB104 18864 RPS 32309 b
the automatic annual increases to a Tier 1 member's retirement
annuity and widow's annuity using the formula applicable to
the Tier 1 member and the present value of the automatic annual
increases to the Tier 1 member's retirement annuity using the
formula provided under subsection (b-5) and widow's annuity
using the formula provided under subsection (b-6). "Eligible
person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 9-134.6.
"Tier 1 member" means a person who first became a
participant under this Article or any reciprocal retirement
system or pension fund established under this Code before
January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the Fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide

SB3404 Engrossed - 45 - LRB104 18864 RPS 32309 b
funding for an accelerated pension benefit program, the Fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement pension calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement annuity.
(b-6) Notwithstanding any other provision of law, a
widow's annuity payable to a widow's annuity beneficiary of a
person who made the election under subsection (b) shall be
subject to annual increases on the January 1 occurring on or
after the first anniversary of the commencement of the
annuity. Each annual increase shall be calculated at 1.5% of
the originally granted widow's annuity.

SB3404 Engrossed - 46 - LRB104 18864 RPS 32309 b
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of this
program must be kept in a separate account. If the Fund

SB3404 Engrossed - 47 - LRB104 18864 RPS 32309 b
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the Fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the Fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies
the Fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) 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.

SB3404 Engrossed - 48 - LRB104 18864 RPS 32309 b
(40 ILCS 5/10-104.6 new)
Sec. 10-104.6. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 10-104.7.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's,
widow's, or disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to

SB3404 Engrossed - 49 - LRB104 18864 RPS 32309 b
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit. A person who elects to receive
an accelerated pension benefit payment under this Section may
not elect to proceed under the Retirement Systems Reciprocal
Act with respect to service under this Article.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of

SB3404 Engrossed - 50 - LRB104 18864 RPS 32309 b
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of the
accelerated pension benefit program must be kept in a separate
account. If the Fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the Fund shall not accept the member's irrevocable election

SB3404 Engrossed - 51 - LRB104 18864 RPS 32309 b
and shall notify the member of that fact. The member may
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the Fund,
subject to the availability of funds. If the Fund accepts the
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the Fund
shall transfer, from the moneys remitted to the Fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified
account. If any moneys remain in the account maintained by the
Fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the Fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the Fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) 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.
(40 ILCS 5/10-104.7 new)
Sec. 10-104.7. Accelerated pension benefit payment for a

SB3404 Engrossed - 52 - LRB104 18864 RPS 32309 b
reduction in annual retirement annuity and widow's annuity
increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity and widow's annuity using the formula applicable to
the Tier 1 member and the present value of the automatic annual
increases to the Tier 1 member's retirement annuity using the
formula provided under subsection (b-5) and widow's annuity
using the formula provided under subsection (b-6). "Eligible
person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 10-104.6.
"Tier 1 member" means a person who first became a
participant under this Article or any reciprocal retirement
system or pension fund established under this Code before
January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as

SB3404 Engrossed - 53 - LRB104 18864 RPS 32309 b
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the Fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide
funding for an accelerated pension benefit program, the Fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement annuity calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement annuity.
(b-6) Notwithstanding any other provision of law, a
widow's annuity payable to a widow's annuity beneficiary of a

SB3404 Engrossed - 54 - LRB104 18864 RPS 32309 b
person who made the election under subsection (b) shall be
subject to annual increases on the January 1 occurring on or
after the first anniversary of the commencement of the
annuity. Each annual increase shall be calculated at 1.5% of
the originally granted widow's annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this

SB3404 Engrossed - 55 - LRB104 18864 RPS 32309 b
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of this
program must be kept in a separate account. If the Fund
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the Fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the Fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies
the Fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency

SB3404 Engrossed - 56 - LRB104 18864 RPS 32309 b
rules, necessary to implement this Section.
(f) 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.
(40 ILCS 5/11-223.5 new)
Sec. 11-223.5. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 11-223.6.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's,
widow's, or disability benefits.
(b) If the city has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the city has

SB3404 Engrossed - 57 - LRB104 18864 RPS 32309 b
made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit. A person who elects to receive
an accelerated pension benefit payment under this Section may
not elect to proceed under the Retirement Systems Reciprocal
Act with respect to service under this Article.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,

SB3404 Engrossed - 58 - LRB104 18864 RPS 32309 b
survivor, widow, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the city for that purpose.

SB3404 Engrossed - 59 - LRB104 18864 RPS 32309 b
Moneys remitted to the Fund for the purpose of the accelerated
pension benefit program must be kept in a separate account. If
the Fund determines it does not have sufficient moneys to make
the accelerated pension benefit payment, then the Fund shall
not accept the member's irrevocable election and shall notify
the member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account maintained by the Fund for the purpose of
the accelerated pension benefit program at the end of the
fiscal year, the Fund must remit those moneys back to the city
within one month after the end of the fiscal year, unless the
city notifies the Fund at least one month before the end of the
fiscal year that the funds shall remain in the account to be
used for the subsequent fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the Fund to cease to be a qualified plan

SB3404 Engrossed - 60 - LRB104 18864 RPS 32309 b
under the Internal Revenue Code of 1986.
(40 ILCS 5/11-223.6 new)
Sec. 11-223.6. Accelerated pension benefit payment for a
reduction in annual retirement annuity and widow's annuity
increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity and widow's annuity using the formula applicable to
the Tier 1 member and the present value of the automatic annual
increases to the Tier 1 member's retirement annuity using the
formula provided under subsection (b-5).
"Eligible person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 11-223.5.
"Tier 1 member" means a person who first became a
participant under this Article or any reciprocal retirement
system or pension fund established under this Code before

SB3404 Engrossed - 61 - LRB104 18864 RPS 32309 b
January 1, 2011.
(b) Until June 30, 2028, if the city elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the city makes that election, whichever is later, the
Fund shall implement an accelerated pension benefit payment
option for eligible persons. Upon the request of an eligible
person, if the city has elected to provide funding for an
accelerated pension benefit program, the Fund shall calculate,
using actuarial tables and other assumptions adopted by the
Board, an accelerated pension benefit payment amount and shall
offer that eligible person the opportunity to irrevocably
elect to have his or her automatic annual increases in
retirement pension calculated in accordance with the formula
provided under subsection (b-5) in exchange for the
accelerated pension benefit payment. The election under this
subsection must be made before the eligible person receives
the first payment of a retirement pension otherwise payable
under this Article. An eligible person is limited to one
calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of

SB3404 Engrossed - 62 - LRB104 18864 RPS 32309 b
the originally granted retirement annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the city for that purpose.
Moneys remitted to the Fund for the purpose of this program

SB3404 Engrossed - 63 - LRB104 18864 RPS 32309 b
must be kept in a separate account. If the Fund determines it
does not have sufficient moneys to make the accelerated
pension benefit payment, then the Fund shall not accept the
member's irrevocable election and shall notify the member of
that fact. The member may reapply for the accelerated pension
benefit payment after that fiscal year. Elections shall be
processed and paid in the order in which complete applications
are received by the Fund, subject to the availability of
funds. If the Fund accepts the member's irrevocable election
to receive an accelerated pension benefit payment under this
Section, then the Fund shall transfer, from the moneys
remitted to the Fund for that purpose, the amount of the
accelerated pension benefit payment into the member's eligible
retirement plan or qualified account. If any moneys remain in
the account at the end of the fiscal year, the Fund must remit
those moneys back to the city within one month after the end of
the fiscal year, unless the city notifies the Fund at least one
month before the end of the fiscal year that the funds shall
remain in the account to be used for the accelerated pension
benefit program for the subsequent fiscal year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) 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.

SB3404 Engrossed - 64 - LRB104 18864 RPS 32309 b
(40 ILCS 5/12-133.8 new)
Sec. 12-133.8. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 12-133.9.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's,
surviving spouse's, or disability benefits.
(b) If the city has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the city has
made that election, whichever is later, the Fund shall
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to

SB3404 Engrossed - 65 - LRB104 18864 RPS 32309 b
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit. A person who elects to receive
an accelerated pension benefit payment under this Section may
not elect to proceed under the Retirement Systems Reciprocal
Act with respect to service under this Article.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of

SB3404 Engrossed - 66 - LRB104 18864 RPS 32309 b
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the city for that purpose.
Moneys remitted to the Fund for the purpose of the accelerated
pension benefit program must be kept in a separate account. If
the Fund determines it does not have sufficient moneys to make
the accelerated pension benefit payment, then the Fund shall
not accept the member's irrevocable election and shall notify

SB3404 Engrossed - 67 - LRB104 18864 RPS 32309 b
the member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account maintained by the Fund for the purpose of
the accelerated pension benefit program at the end of the
fiscal year, the Fund must remit those moneys back to the city
within one month after the end of the fiscal year, unless the
city notifies the Fund at least one month before the end of the
fiscal year that the funds shall remain in the account to be
used for the subsequent fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) 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.
(40 ILCS 5/12-133.9 new)
Sec. 12-133.9. Accelerated pension benefit payment for a
reduction in annual retirement annuity and surviving spouse's

SB3404 Engrossed - 68 - LRB104 18864 RPS 32309 b
annuity increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity and surviving spouse's annuity using the formula
applicable to the Tier 1 member and the present value of the
automatic annual increases to the Tier 1 member's retirement
annuity using the formula provided under subsection (b-5) and
surviving spouse's annuity using the formula provided under
subsection (b-6). "Eligible person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 12-133.8.
"Tier 1 member" means a person who first became a
participant under this Article or any reciprocal retirement
system or pension fund established under this Code before
January 1, 2011.
(b) Until June 30, 2028, if the city elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical

SB3404 Engrossed - 69 - LRB104 18864 RPS 32309 b
after the city makes that election, whichever is later, the
Fund shall implement an accelerated pension benefit payment
option for eligible persons. Upon the request of an eligible
person, if the city has elected to provide funding for an
accelerated pension benefit program, the Fund shall calculate,
using actuarial tables and other assumptions adopted by the
Board, an accelerated pension benefit payment amount and shall
offer that eligible person the opportunity to irrevocably
elect to have his or her automatic annual increases in
retirement pension calculated in accordance with the formula
provided under subsection (b-5) in exchange for the
accelerated pension benefit payment. The election under this
subsection must be made before the eligible person receives
the first payment of a retirement pension otherwise payable
under this Article. An eligible person is limited to one
calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement annuity.
(b-6) Notwithstanding any other provision of law, a
surviving spouse's annuity payable to a surviving spouse's
annuity beneficiary of a person who made the election under

SB3404 Engrossed - 70 - LRB104 18864 RPS 32309 b
subsection (b) shall be subject to annual increases on the
January 1 occurring on or after the first anniversary of the
commencement of the annuity. Each annual increase shall be
calculated at 1.5% of the originally granted surviving
spouse's annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this

SB3404 Engrossed - 71 - LRB104 18864 RPS 32309 b
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the city for that purpose.
Moneys remitted to the Fund for the purpose of this program
must be kept in a separate account. If the Fund determines it
does not have sufficient moneys to make the accelerated
pension benefit payment, then the Fund shall not accept the
member's irrevocable election and shall notify the member of
that fact. The member may reapply for the accelerated pension
benefit payment after that fiscal year. Elections shall be
processed and paid in the order in which complete applications
are received by the Fund, subject to the availability of
funds. If the Fund accepts the member's irrevocable election
to receive an accelerated pension benefit payment under this
Section, then the Fund shall transfer, from the moneys
remitted to the Fund for that purpose, the amount of the
accelerated pension benefit payment into the member's eligible
retirement plan or qualified account. If any moneys remain in
the account at the end of the fiscal year, the Fund must remit
those moneys back to the city within one month after the end of
the fiscal year, unless the city notifies the Fund at least one
month before the end of the fiscal year that the funds shall
remain in the account to be used for the accelerated pension
benefit program for the subsequent fiscal year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.

SB3404 Engrossed - 72 - LRB104 18864 RPS 32309 b
(f) 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.
(40 ILCS 5/17-120.5 new)
Sec. 17-120.5. Accelerated pension benefit payment in lieu
of any pension benefit.
(a) As used in this Section:
"Eligible person" means a person who:
(1) has terminated service;
(2) has accrued sufficient service credit to be
eligible to receive a retirement annuity under this
Article;
(3) has not received any retirement annuity under this
Article; and
(4) has not made the election under Section 17-120.6.
"Pension benefit" means the benefits under this Article,
or Article 1 as it relates to those benefits, including any
anticipated annual increases, that an eligible person is
entitled to upon attainment of the applicable retirement age.
"Pension benefit" also includes applicable survivor's,
surviving spouse's, or disability benefits.
(b) If an employer has elected to provide funding for an
accelerated pension benefit program, then as soon as practical
after June 30, 2026 or as soon as practical after the employer
has made that election, whichever is later, the Fund shall

SB3404 Engrossed - 73 - LRB104 18864 RPS 32309 b
calculate, using actuarial tables and other assumptions
adopted by the Board, the present value of pension benefits
for each eligible person who requests that information and
shall offer each eligible person the opportunity to
irrevocably elect to receive an amount determined by the Fund
to be equal to 60% of the present value of his or her pension
benefits in lieu of receiving any pension benefit. The offer
shall specify the dollar amount that the eligible person will
receive if he or she so elects and shall expire when a
subsequent offer is made to an eligible person. An eligible
person is limited to one calculation and offer per fiscal
year. The Fund shall make a good faith effort to contact every
eligible person to notify him or her of the election.
Until June 30, 2028, an eligible person may irrevocably
elect to receive an accelerated pension benefit payment in the
amount that the Fund offers under this subsection in lieu of
receiving any pension benefit. A person who elects to receive
an accelerated pension benefit payment under this Section may
not elect to proceed under the Retirement Systems Reciprocal
Act with respect to service under this Article.
(c) A person's creditable service under this Article shall
be terminated upon the person's receipt of an accelerated
pension benefit payment under this Section, and no other
benefit shall be paid under this Article based on the
terminated creditable service, including any retirement,
survivor, or other benefit.

SB3404 Engrossed - 74 - LRB104 18864 RPS 32309 b
(d) If a person who has received an accelerated pension
benefit payment under this Section returns to active service
under this Article, then:
(1) Any benefits under the Fund earned as a result of
that return to active service shall be based solely on the
person's creditable service arising from the return to
active service.
(2) The accelerated pension benefit payment may not be
repaid to the Fund, and the terminated creditable service
may not under any circumstances be reinstated.
(e) 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.
(f) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of the

SB3404 Engrossed - 75 - LRB104 18864 RPS 32309 b
accelerated pension benefit program must be kept in a separate
account. If the Fund determines it does not have sufficient
moneys to make the accelerated pension benefit payment, then
the Fund shall not accept the member's irrevocable election
and shall notify the member of that fact. The member may
reapply for the accelerated pension benefit payment after that
fiscal year. Elections shall be processed and paid in the
order in which complete applications are received by the Fund,
subject to the availability of funds. If the Fund accepts the
member's irrevocable election to receive an accelerated
pension benefit payment under this Section, then the Fund
shall transfer, from the moneys remitted to the Fund for that
purpose, the amount of the accelerated pension benefit payment
into the member's eligible retirement plan or qualified
account. If any moneys remain in the account maintained by the
Fund for the purpose of the accelerated pension benefit
program at the end of the fiscal year, the Fund must remit
those moneys back to the employer within one month after the
end of the fiscal year, unless the employer notifies the Fund
at least one month before the end of the fiscal year that the
funds shall remain in the account to be used for the subsequent
fiscal year.
(g) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(h) No provision of this Section shall be interpreted in a
way that would cause the Fund to cease to be a qualified plan

SB3404 Engrossed - 76 - LRB104 18864 RPS 32309 b
under the Internal Revenue Code of 1986.
(40 ILCS 5/17-120.6 new)
Sec. 17-120.6. Accelerated pension benefit payment for a
reduction in annual retirement annuity and surviving spouse's
annuity increases.
(a) As used in this Section:
"Accelerated pension benefit payment" means a lump sum
payment equal to 70% of the difference of the present value of
the automatic annual increases to a Tier 1 member's retirement
annuity and surviving spouse's annuity using the formula
applicable to the Tier 1 member and the present value of the
automatic annual increases to the Tier 1 member's retirement
annuity using the formula provided under subsection (b-5) and
surviving spouse's annuity using the formula provided under
subsection (b-6). "Eligible person" means a person who:
(1) is a Tier 1 member;
(2) has submitted an application for a retirement
annuity under this Article;
(3) meets the age and service requirements for
receiving a retirement annuity under this Article;
(4) has not received any retirement annuity under this
Article; and
(5) has not made the election under Section 17-120.5.
"Tier 1 member" means a person who first became a
participant under this Article or any reciprocal retirement

SB3404 Engrossed - 77 - LRB104 18864 RPS 32309 b
system or pension fund established under this Code before
January 1, 2011.
(b) Until June 30, 2028, if an employer elects to provide
funding for an accelerated pension benefit program, then as
soon as practical after June 30, 2026 or as soon as practical
after the employer makes that election, whichever is later,
the Fund shall implement an accelerated pension benefit
payment option for eligible persons. Upon the request of an
eligible person, if the employer has elected to provide
funding for an accelerated pension benefit program, the Fund
shall calculate, using actuarial tables and other assumptions
adopted by the Board, an accelerated pension benefit payment
amount and shall offer that eligible person the opportunity to
irrevocably elect to have his or her automatic annual
increases in retirement pension calculated in accordance with
the formula provided under subsection (b-5) in exchange for
the accelerated pension benefit payment. The election under
this subsection must be made before the eligible person
receives the first payment of a retirement pension otherwise
payable under this Article. An eligible person is limited to
one calculation and offer per fiscal year.
(b-5) Notwithstanding any other provision of law, the
retirement annuity of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring either on or after the attainment of age 67
or the first anniversary of the annuity start date, whichever

SB3404 Engrossed - 78 - LRB104 18864 RPS 32309 b
is later. Each annual increase shall be calculated at 1.5% of
the originally granted retirement annuity.
(b-6) Notwithstanding any other provision of law, a
surviving spouse's annuity payable to a surviving spouse's
annuity beneficiary of a person who made the election under
subsection (b) shall be subject to annual increases on the
January 1 occurring on or after the first anniversary of the
commencement of the annuity. Each annual increase shall be
calculated at 1.5% of the originally granted surviving
spouse's annuity.
(c) If a person who has received an accelerated pension
benefit payment returns to active service under this Article,
then:
(1) the calculation of any future automatic annual
increase in retirement annuity shall be calculated in
accordance with the formula provided under subsection
(b-5); and
(2) the accelerated pension benefit payment may not be
repaid to the Fund.
(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

SB3404 Engrossed - 79 - LRB104 18864 RPS 32309 b
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.
(d-5) Before accepting a member's irrevocable election to
receive an accelerated pension benefit payment under this
Section, the Fund shall verify that it has a sufficient amount
of moneys to pay for the accelerated pension benefit payment
from the contribution remitted by the employer for that
purpose. Moneys remitted to the Fund for the purpose of this
program must be kept in a separate account. If the Fund
determines it does not have sufficient moneys to make the
accelerated pension benefit payment, then the Fund shall not
accept the member's irrevocable election and shall notify the
member of that fact. The member may reapply for the
accelerated pension benefit payment after that fiscal year.
Elections shall be processed and paid in the order in which
complete applications are received by the Fund, subject to the
availability of funds. If the Fund accepts the member's
irrevocable election to receive an accelerated pension benefit
payment under this Section, then the Fund shall transfer, from
the moneys remitted to the Fund for that purpose, the amount of
the accelerated pension benefit payment into the member's
eligible retirement plan or qualified account. If any moneys
remain in the account at the end of the fiscal year, the Fund
must remit those moneys back to the employer within one month
after the end of the fiscal year, unless the employer notifies

SB3404 Engrossed - 80 - LRB104 18864 RPS 32309 b
the Fund at least one month before the end of the fiscal year
that the funds shall remain in the account to be used for the
accelerated pension benefit program for the subsequent fiscal
year.
(e) The Board shall adopt any rules, including emergency
rules, necessary to implement this Section.
(f) 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 10. The Counties Code is amended by adding Section
3-14050 as follows:
(55 ILCS 5/3-14050 new)
Sec. 3-14050. Accelerated pension benefit program;
counties with more than 3,000,000 inhabitants.
(a) The county board of a county of more than 3,000,000
inhabitants may establish an accelerated pension benefit
program for the pension funds established under Articles 9 and
10 of the Illinois Pension Code. The accelerated pension
benefit program shall provide eligible participants the option
to elect an accelerated pension benefit payment in accordance
with the applicable provisions of Articles 9 and 10 of the
Illinois Pension Code authorizing accelerated pension benefit
payments.
(b) If the county elects to establish the accelerated

SB3404 Engrossed - 81 - LRB104 18864 RPS 32309 b
pension benefit program for a fiscal year beginning in 2026,
the county must notify the pension fund and remit a
contribution to the pension fund in an amount determined by
the county at least 30 days before the program is to be
implemented. If the county elects to establish the accelerated
pension benefit program for a fiscal year beginning in 2027,
the county shall remit to the pension fund, not later than 30
days prior to the beginning of the fiscal year for which the
accelerated pension benefit program is to be made available, a
contribution to the pension fund in an amount determined by
the county. The contribution shall constitute the total
funding available to that pension fund for accelerated pension
benefit payments for that fiscal year, and accelerated pension
benefit payments shall be issued by the applicable pension
fund in accordance with the provisions concerning accelerated
pension benefit payment until the contributed amount is
exhausted. The contribution for the accelerated pension
benefit payments may be made using any lawful funding
mechanism authorized under this Code, including, but not
limited to:
(1) the issuance of bonds authorized under this Code;
(2) lawful appropriations from available county
revenues;
(3) transfers from lawfully available funds; or
(4) any combination thereof.
Nothing in this Section shall be construed to expand or

SB3404 Engrossed - 82 - LRB104 18864 RPS 32309 b
limit the county's authority to issue bonds beyond those
otherwise provided in this Code.
At least one month prior to the end of the fiscal year, the
county must notify the pension fund if the county would desire
any remaining moneys to be rolled over into the next fiscal
year for the accelerated pension benefit program. If the
county does not notify the pension fund, the moneys shall be
remitted back to the county. If an accelerated pension benefit
program is not authorized under the applicable Article of the
Illinois Pension Code for the following fiscal year, then the
pension fund shall remit the moneys back to the county.
(c) This Section shall be construed as supplemental to
existing county powers and shall not be interpreted to impair
any existing contractual obligation or pension benefit
protected under the Illinois Constitution.
Section 15. The Illinois Municipal Code is amended by
adding Section 10-4-13 as follows:
(65 ILCS 5/10-4-13 new)
Sec. 10-4-13. Accelerated pension benefit program.
(a) The corporate authorities of a municipality may
establish an accelerated pension benefit program for the
pension funds established under Article 3, 4, 5, 6, 8, 11, or
12 of the Illinois Pension Code to which the municipality
contributes. The accelerated pension benefit program shall

SB3404 Engrossed - 83 - LRB104 18864 RPS 32309 b
provide eligible participants the option to elect an
accelerated pension benefit payment with regard to employees
of that municipality who participate in a pension fund
established under Article 3, 4, 5, 6, 8, 11, or 12 of the
Illinois Pension Code in accordance with the applicable
provisions of the Illinois Pension Code authorizing
accelerated pension benefit payments.
(b) If the municipality elects to establish the
accelerated pension benefit program for a fiscal year
beginning in 2026, the municipality must notify the pension
fund and remit a contribution to the pension fund in an amount
determined by the municipality at least 30 days before the
program is to be implemented. If the municipality elects to
establish the accelerated pension benefit program for a fiscal
year beginning in 2027, the municipality shall remit to the
pension fund, not later than 30 days prior to the beginning of
the fiscal year for which the accelerated pension benefit
program is to be made available, a contribution to the pension
fund in an amount determined by the municipality. The
contribution shall constitute the total funding available to
that pension fund for accelerated pension benefit payments for
that fiscal year, and accelerated pension benefit payments
shall be issued by the applicable pension fund in accordance
with the provisions concerning accelerated pension benefit
payment until the contributed amount is exhausted. The
contribution for the accelerated pension benefit payments may

SB3404 Engrossed - 84 - LRB104 18864 RPS 32309 b
be made using any lawful funding mechanism authorized under
this Code, including, but not limited to:
(1) the issuance of bonds authorized under this Code;
(2) lawful appropriations from available municipal
revenues;
(3) transfers from lawfully available funds; or
(4) any combination thereof.
Nothing in this Section shall be construed to expand or
limit the municipality's authority to issue bonds beyond those
otherwise provided in this Code.
At least one month prior to the end of the fiscal year, the
municipality must notify the pension fund if it would desire
any remaining moneys to be rolled over into the next fiscal
year for the accelerated pension benefit program. If the
municipality does not notify the pension fund, the moneys
shall be remitted back to the municipality. If an accelerated
pension benefit program is not authorized under the applicable
Article of the Illinois Pension Code for the following fiscal
year, then the pension fund shall remit the moneys back to the
municipality.
(c) This Section shall be construed as supplemental to
existing municipal powers and shall not be interpreted to
impair any existing contractual obligation or pension benefit
protected under the Illinois Constitution.
Section 20. The School Code is amended by adding Section

SB3404 Engrossed - 85 - LRB104 18864 RPS 32309 b
34-89 as follows:
(105 ILCS 5/34-89 new)
Sec. 34-89. Accelerated pension benefit program.
(a) The board may establish an accelerated pension benefit
program for the pension fund established under Article 17 of
the Illinois Pension Code. The accelerated pension benefit
program shall provide eligible participants the option to
elect an accelerated pension benefit payment with regard to
teachers who participate under Article 17 of the Illinois
Pension Code in accordance with the applicable provisions of
Article 17 of the Illinois Pension Code authorizing
accelerated pension benefit payments.
(b) If the board elects to establish the accelerated
pension benefit program for a fiscal year beginning in 2026,
the board must notify the pension fund and remit a
contribution to the pension fund in an amount determined by
the board at least 30 days before the program is to be
implemented. If the board elects to establish the accelerated
pension benefit program for a fiscal year beginning in 2027,
the board shall remit to the pension fund, not later than 30
days prior to the beginning of the fiscal year for which the
accelerated pension benefit program is to be made available, a
contribution to the pension fund in an amount determined by
the board. The contribution shall constitute the total funding
available to that pension fund for accelerated pension benefit

SB3404 Engrossed - 86 - LRB104 18864 RPS 32309 b
payments for that fiscal year, and accelerated pension benefit
payments shall be issued by the applicable pension fund in
accordance with the provisions concerning accelerated pension
benefit payment until the contributed amount is exhausted. The
contribution for the accelerated pension benefit payments may
be made using any lawful funding mechanism authorized under
this Code, including, but not limited to:
(1) the issuance of bonds authorized under this Code;
(2) lawful appropriations from available municipal
revenues;
(3) transfers from lawfully available funds; or
(4) any combination thereof.
Nothing in this Section shall be construed to expand or
limit the board's authority to issue bonds beyond those
otherwise provided in this Code.
At least one month prior to the end of the fiscal year, the
board must notify the pension fund if it would like any
remaining moneys rolled over into the next fiscal year for the
accelerated pension benefit program. If the board does not
notify the pension fund, the moneys shall be remitted back to
the board. If an accelerated pension benefit program is not
authorized under Article 17 of the Illinois Pension Code for
the following fiscal year, then the pension fund shall remit
the moneys back to the board.
(c) This Section shall be construed as supplemental to
existing board powers and shall not be interpreted to impair

SB3404 Engrossed - 87 - LRB104 18864 RPS 32309 b
any existing contractual obligation or pension benefit
protected under the Illinois Constitution.
Section 90. The State Mandates Act is amended by adding
Section 8.50 as follows:
(30 ILCS 805/8.50 new)
Sec. 8.50. 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.
Section 99. Effective date. This Act takes effect upon
becoming law.