Bills Before Illinois House Committee Address State and Local Retirement Plans
More than 50 bills will be heard for the first time in the Illinois House Personnel and Pensions Committee on March 30
. The bills include measures that would affect state and local retirement plans.
The retirement-related bills that would affect teachers include the following:
- HB 3867, which would require each of the state’s retirement systems, including the Teachers’ system, to establish and maintain a voluntary defined contribution plan in addition to the other plans they have. It also automatically enrolls new Tier 2 participants (those hired after Jan. 1, 2011) with a 60-day opt-out window in the new voluntary DC plan. Contribution rates and other plan details would be established by the respective Boards.
- HB 436, similar to HB 2405, is a bit more detailed, and would require each system to establish a Tier 3 plan for new hires to participate in instead of the defined benefit plan. Tier 3 participants would be those hired after July 1, 2018. Employees would contribute a minimum of 3% of salary, and employer contributions would be no lower than 3% and no higher than 7.6% of salary. Vesting would be on a five-year schedule.
Ray Harmon is Government Affairs Counsel to the American Retirement Association.
- HB 669 would broadly allow local governments to provide alternative retirement plans in lieu of the state plans, which could be DB, DC or both. It would require no minimum level of benefits and could shed the state’s obligations.
NTSA will continue to monitor these bills and report on major developments.