IL HB2765

Creates a Deferred Retirement Option Plan (DROP) for downstate teachers eligible to retire with an unreduced annuity, allowing them to continue working for up to 5 years while their monthly retirement benefits accumulate in a notional account

DROP must be available to eligible members by July 1, 2028, with elections to participate accepted through January 1, 2030, and all participation ending by January 1, 2033

Accumulated DROP account balances earn interest annually at the 10-year Treasury rate and are paid as a lump sum upon termination or expiration of DROP participation

DROP members remain in active service for health care benefits and collective bargaining purposes but do not accrue additional pension service credit, benefit from future pay increases, or receive promotions affecting their pension calculation

Retirement system boards may transfer DROP administrative responsibility to the State Treasurer, who would chair a DROP Advisory Board with executive directors from participating pension systems