HB2977 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.

• Tier 2 participants who become participants after plan establishment are automatically enrolled unless they opt out within 60 days; Tier 1 participants and earlier Tier 2 participants may voluntarily enroll.

• Contribution rates are established by each Board, with plans designed as qualified tax-deferred savings accounts under Internal Revenue Code Section 401(a).

• Plans must provide default investment options with automatic enrollment, multiple distribution options meeting IRC requirements, and maintain all assets in trust for exclusive benefit of participants and beneficiaries.

• Applies to the General Assembly, State Employee, State Universities, Downstate Teachers, and Judges pension systems; repeals a definition from Public Act 98-599 found unconstitutional; effective immediately.