HB2725 Summary

• Amends Illinois Pension Code to reduce automatic annual increases in retirement, survivor, and disability annuities for Tier 1 employees and their survivors in the General Assembly, State Employee, State Universities, Downstate Teacher, and Judges Retirement Systems, effective immediately.

• Changes annual increase calculation from a fixed 3% to the lesser of 3% or one-half the annual unadjusted percentage increase in the Consumer Price Index-U (CPI-U) for the 12 months ending with the preceding September, with no increase if CPI-U is zero or negative.

• Applies new cost-of-living adjustment (COLA) reduction to all future, current, and former Tier 1 participants, including annuitants and persons not in service on or after the bill's effective date.

• Defines Tier 1 participants as those who became members before January 1, 2011, and Tier 2 participants as those who became members on or after January 1, 2011.

• Modifies increase provisions for retirement annuities, survivor annuities, and disability benefits across multiple articles of the pension code using the new CPI-U methodology.