SB3538 Summary

• Amends the Illinois Pension Code to expand permitted investments for Article 3 and 4 pension funds, including corporate bonds and mutual funds, with asset caps of 50% effective July 1, 2011 and 55% effective July 1, 2012.

• Establishes new pension provisions for police officers, firefighters, and sheriff's law enforcement employees hired on or after January 1, 2011, including reduced benefits (2.5% per year with 10+ years service, maximum 75% of final average salary) and restricted cost-of-living adjustments.

• Modifies employer contribution calculations for police and firefighter pension funds to reach 90% funding by fiscal year 2040 using level percentage of payroll method, with asset valuation beginning March 30, 2011 spread over 5-year periods.

• Requires the Commission on Government Forecasting and Accountability to study investment pools and contribution cost-sharing for municipal pension funds, reporting findings by January 1, 2013.

• Adds enforcement provisions allowing the State Comptroller to deduct delinquent pension contributions from state grants to municipalities beginning in fiscal year 2016, with survivor benefit reductions to 66 2/3% of earned pension for new hires.