HB2365 Summary

• Establishes mandatory self-managed defined contribution plans for all state-funded retirement systems (General Assembly, State Employees, State Universities, Downstate Teachers, and Judges) for compensation exceeding salary caps.

• Sets salary caps for traditional defined benefit plan calculations at the greater of the Internal Revenue Code limit under Section 1-160(b-5) or the participant's salary during the 365 days before the bill's effective date.

• Requires participants to contribute 6-8% and the State to contribute 3-7.1% to self-managed plans depending on whether participants elect to fully transfer to the new plan or participate in both systems.

• Increases state pension funding obligations with transfers of $4.6 billion in FY2014 and additional transfers of $693.5 million (FY2016), $900 million (FY2020), and $1.1 billion (FY2034) annually from the General Revenue Fund to the Pension Stabilization Fund.

• Requires pension systems to bring mandamus actions to compel state payment of required contributions and establishes these contributions as contractual obligations under the Illinois Constitution.