IL SB3404

Eligible members of nine Illinois public pension funds (Downstate Police, Downstate Firefighter, Chicago Police, Chicago Firefighter, Chicago Municipal, Cook County, Cook County Forest Preserve, Chicago Laborers, and Chicago Park District) may irrevocably elect to receive a lump-sum payment equal to 60% of the present value of their pension benefits in lieu of all future pension benefits.

Tier 1 members (those who joined before January 1, 2011) may alternatively elect to receive 70% of the difference in present value between their current annual increase formula and a reduced formula (1.5% annual increases starting at age 67) in exchange for accepting the reduced increases.

The election window runs from after June 30, 2026 until June 30, 2028, and all accelerated payments must be rolled over into a tax-qualified retirement account.

Municipalities and counties with more than 3,000,000 inhabitants (Chicago and Cook County) must establish accelerated pension benefit programs and remit contributions to pension funds for this purpose, which may be zero dollars.

Elections are irrevocable, creditable service is terminated upon receiving payment, and members who return to service cannot reinstate prior service credit or repay the accelerated benefit.