IL HB3867

Amends the Illinois Pension Code to require each pension system board to establish a voluntary defined contribution plan within one year to address retirement preparedness gaps for participants not on track to maintain their standard of living in retirement.

Tier 1 participants (those who became participants before January 1, 2011) and existing Tier 2 participants may voluntarily enroll in the plan, while all new Tier 2 participants are automatically enrolled unless they opt out within 60 days.

The Board establishes the contribution rate and must create a default investment option with reasonable notice to participants, who may select alternative investments.

The plan is designed as a qualified tax-deferred savings plan under the Internal Revenue Code and exists in addition to other retirement and pension plans, with assets held in trust for participants and beneficiaries.

Distributions must comply with Internal Revenue Code requirements, including Section 401(a)(9) for timing and Section 401(a)(37) for death benefits, and repeals certain unconstitutional provisions from Public Act 98-599.