HB1277 Summary

• Changes the actuarial cost method used to calculate required State pension contributions from "projected unit credit" to "entry age normal" method for five Illinois pension systems (Sections 2-124, 14-131, 15-155, 16-158, and 18-131 of the Illinois Pension Code).

• The "entry age normal" method applies to State fiscal years 2012 through 2045 for determining minimum contributions needed to bring pension systems to 90% funding by fiscal year 2045.

• Maintains existing contribution schedules and amounts for fiscal years 2006-2011, including specified dollar amounts for FY 2006-2007 and bond-funded contributions for FY 2010-2011.

• Preserves the 90% funding target and continues level percentage of payroll calculation methodology while changing only the underlying actuarial cost method used in the calculation.

• Takes effect upon becoming law with application to State fiscal years 2012 and beyond.