HB1757 Summary: Pension Code - Tier 3 Plan

• Creates a new "Tier 3" defined contribution plan for all five state-funded retirement systems (Articles 2, 14, 15, 16, and 18 of Illinois Pension Code) to be implemented by July 1, 2022.

• All new employees hired on or after July 1, 2022 must automatically participate in the Tier 3 plan with individual participant accounts aggregating state and employee contributions used for retirement payouts.

• Current Tier 1 and Tier 2 participants may voluntarily elect to switch to the Tier 3 plan and may irrevocably terminate their defined benefit plan participation by transferring a refund of contributions to their Tier 3 account.

• Tier 3 plan provides 8% employee contribution rate and 7.6% state contribution rate, with 5-year vesting requirement for state contributions and variable investment and payout options.

• Makes conforming changes to the State Employees Group Insurance Act of 1971 to recognize retirees under the Tier 3 plan as eligible for group health insurance coverage.