HB3375 Summary

• Requires each pension system board (General Assembly, State Employees, State Universities, Downstate Teachers, and Judges) to establish and maintain a voluntary defined contribution plan within one year to address retirement preparedness gaps for defined benefit participants not on track to maintain their standard of living in retirement.

• Automatically enrolls all Tier 2 participants (those first becoming participants on or after January 1, 2011) in the plan at a board-established contribution rate unless they opt out within 60 days; allows Tier 1 participants and earlier Tier 2 participants to voluntarily elect enrollment.

• Requires the plan to be designed as a qualified tax-deferred savings plan under the Internal Revenue Code, with assets held in trust for participants and beneficiaries, and to exist alongside other retirement and pension plans.

• Establishes a default investment option with automatic enrollment of employees unless they select different options, and requires distribution options that comply with Internal Revenue Code sections 401(a)(9) and 401(a)(37).

• Repeals Section 2-105.1 of the Illinois Pension Code and takes effect immediately upon becoming law.