IL HB5498

Creates a Deferred Retirement Option Plan (DROP) for eligible participants under the Downstate Teachers Article who are eligible to retire with an unreduced annuity.

Allows eligible members to participate in the DROP for up to 5 years, with elections to participate required by January 1, 2027, and the program made available by July 1, 2024.

Requires the retirement system to credit a notional account monthly with the amount of retirement annuity the member would have received if they had retired on the election date, plus automatic annual increases that would have applied.

DROP members remain considered in active service for death and disability benefits and health care benefits, but do not accrue additional service credit or become eligible to purchase service credit during DROP participation.

Allows retirement systems to transfer administrative responsibility for the DROP to the State Treasurer, which would establish a DROP Advisory Board meeting quarterly with executive directors from participating pension funds.