HB2740 Summary

• 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 defined benefit plan participants not on track to maintain their standard of living in retirement.

• Tier 2 participants (those becoming participants on or after January 1, 2011) who join after plan establishment are automatically enrolled at a board-determined contribution rate, with a 60-day opt-out period available.

• Tier 1 participants (those who joined before January 1, 2011) and existing Tier 2 participants may voluntarily elect to enroll in the plan.

• Plans are designed as qualified tax-deferred savings vehicles under Internal Revenue Code Section 401, with board-established default investment options and multiple distribution options complying with federal requirements.

• Repeals Section 2-105.1 of the Illinois Pension Code, which was previously held unconstitutional; takes effect immediately upon becoming law.