HB2903 Summary: Pension Buyout Act

• Creates the Pension Buyout Act authorizing the Department of Central Management Services to contract with approved vendors to provide lump sum payments to eligible employees in the State Universities Retirement System (SURS) and Teachers' Retirement System (TRS) in exchange for relinquishing all pension rights.

• Establishes Tier 3 and Tier 4 defined contribution plans allowing active Tier 1 and Tier 2 members in SURS and TRS to voluntarily shift future service accruals from traditional defined benefit plans to account-based plans with employee and employer contributions.

• Authorizes the Illinois Finance Authority to issue up to $500 million in bonds if annual appropriations fall short of amounts needed to pay approved vendors for pension buyout lump sum payments.

• Requires approved vendors to provide certified financial planning services at no cost to eligible persons, with standardized contracts approved by each retirement system.

• Participants in the pension buyout option or defined contribution plans retain eligibility for health insurance benefits under the State Employees Group Insurance Act of 1971 as annuitants.