IL HB3707

Establishes a self-directed retirement plan for the General Assembly Retirement System allowing participants to invest in mutual funds, collective investment funds, and annuity contracts instead of the traditional defined benefit plan.

Tier 3 participants (those hired on or after the effective date) must participate exclusively in the self-directed plan, while existing Tier 1 and Tier 2 participants may voluntarily elect to switch to it with an irrevocable election.

Participants in the self-directed plan contribute 8% of salary with employer contributing 7% of salary, and become fully vested immediately upon first day of participation in all contributions and investment returns.

Sets pensionable salary cap at $106,800 for new participants, with annual adjustments equal to the lesser of 3% or the consumer price index increase, determined by the Public Pension Division of the Department of Insurance.

Allows existing Tier 1 and Tier 2 participants who switch plans to receive an account balance equal to their hypothetical contribution refund with interest, transferred tax-free in accordance with IRS guidelines.