HB5872 Summary

• Amends the Illinois Pension Code to establish self-managed defined contribution retirement plans for four state pension systems: General Assembly, State Employees', Downstate Teachers', and Judges Retirement Systems.

• Self-managed plans allow participants to invest contributions in mutual funds, collective investment funds, or other investment products and purchase fixed or variable annuity contracts, with the State providing matching employer contributions.

• Applies to members first hired after January 1, 2011, and existing members who transition to specified new positions, with contributions on salary exceeding the annual Social Security Covered Wage Base directed to the self-managed plan.

• Requires each pension system to solicit and contract with 2-7 private companies (insurance, mutual fund, banking, or financial institutions) to administer the plans and offer investment vehicles, with an optional investment fund managed by the Illinois State Board of Investment.

• Takes effect immediately upon becoming law.