SB1820 Summary: Accelerated Pension Benefit Payments

• Allows eligible participants in Illinois state-funded retirement systems (Articles 2, 14, 15, 16, 18 of the Pension Code) to receive lump sum accelerated pension benefit payments equal to 70% of their net present value starting January 1, 2018, in lieu of receiving traditional annuities.

• Permits partial accelerated pension benefit payments where retirees can receive a lump sum equal to 70% of a selected percentage of their pension value in exchange for a permanent reduction in their monthly pension benefits (minimum payment $50,000).

• Requires persons electing accelerated payments to have another qualified retirement plan to roll funds into and mandates financial counseling before acceptance; terminates service credits upon receipt of payment.

• Authorizes $250,000,000 in State Pension Obligation Acceleration Bonds to fund payments exceeding amounts appropriated to retirement systems, with bond payments covered by continuing appropriation.

• Makes conforming changes to the State Employees Group Insurance Act to allow terminated service credit to count for health insurance eligibility purposes even after receiving accelerated payments.