SB 3404

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Full Text of SB3404
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	SB3404 - 104th General Assembly
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		Senate Amendment 001
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		SB3404 Engrossed		LRB104 18864 RPS 32309 b
1    AN ACT concerning public employee benefits.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Pension Code is amended by adding
5Sections 3-144.3, 3-144.4, 4-138.15, 4-138.16, 5-218.5,
65-218.6, 6-213.5, 6-213.6, 8-244.5, 8-244.6, 9-134.6, 9-134.7,
710-104.6, 10-104.7, 11-223.5, 11-223.6, 12-133.8, 12-133.9,
817-120.5, and 17-120.6 as follows:
9    (40 ILCS 5/3-144.3 new)
10    Sec. 3-144.3. Accelerated pension benefit payment in lieu 
11of any pension benefit.
12    (a) As used in this Section:
13    "Eligible person" means a person who:
14        (1) has terminated service;
15        (2) has accrued sufficient service credit to be 
16    eligible to receive a retirement pension under this 
17    Article;
18        (3) has not received any retirement pension under this 
19    Article; and
20        (4) has not made the election under Section 3-144.4.
21    "Pension benefit" means the benefits under this Article, 
22or Article 1 as it relates to those benefits, including any 
23anticipated annual increases, that an eligible person is 
		SB3404 Engrossed	- 2 -	LRB104 18864 RPS 32309 b
1entitled to upon attainment of the applicable retirement age. 
2"Pension benefit" also includes applicable survivor's or 
3disability benefits.
4    (b) If an employer has elected to provide funding for an 
5accelerated pension benefit program, then as soon as practical 
6after June 30, 2026 or as soon as practical after the employer 
7has made that election, whichever is later, the fund shall 
8calculate, using actuarial tables and other assumptions 
9adopted by the Board, the present value of pension benefits 
10for each eligible person who requests that information and 
11shall offer each eligible person the opportunity to 
12irrevocably elect to receive an amount determined by the fund 
13to be equal to 60% of the present value of his or her pension 
14benefits in lieu of receiving any pension benefit. The offer 
15shall specify the dollar amount that the eligible person will 
16receive if he or she so elects and shall expire when a 
17subsequent offer is made to an eligible person. An eligible 
18person is limited to one calculation and offer per fiscal 
19year. The fund shall make a good faith effort to contact every 
20eligible person to notify him or her of the election.
21    Until June 30, 2028, an eligible person may irrevocably 
22elect to receive an accelerated pension benefit payment in the 
23amount that the fund offers under this subsection in lieu of 
24receiving any pension benefit.
25    (c) A person's creditable service under this Article shall 
26be terminated upon the person's receipt of an accelerated 
		SB3404 Engrossed	- 3 -	LRB104 18864 RPS 32309 b
1pension benefit payment under this Section, and no other 
2benefit shall be paid under this Article based on the 
3terminated creditable service, including any retirement, 
4survivor, or other benefit.
5    (d) If a person who has received an accelerated pension 
6benefit payment under this Section returns to active service 
7under this Article, then:
8        (1) Any benefits under the fund earned as a result of 
9    that return to active service shall be based solely on the 
10    person's creditable service arising from the return to 
11    active service.
12        (2) The accelerated pension benefit payment may not be 
13    repaid to the fund, and the terminated creditable service 
14    may not under any circumstances be reinstated.
15    (e) As a condition of receiving an accelerated pension 
16benefit payment, the accelerated pension benefit payment must 
17be transferred into a tax qualified retirement plan or 
18account. The accelerated pension benefit payment under this 
19Section may be subject to withholding or payment of applicable 
20taxes, but to the extent permitted by federal law, a person who 
21receives an accelerated pension benefit payment under this 
22Section must direct the fund to pay all of that payment as a 
23rollover into another retirement plan or account qualified 
24under the Internal Revenue Code of 1986, as amended.
25    (f) Before accepting a member's irrevocable election to 
26receive an accelerated pension benefit payment under this 
		SB3404 Engrossed	- 4 -	LRB104 18864 RPS 32309 b
1Section, the fund shall verify that it has a sufficient amount 
2of moneys to pay for the accelerated pension benefit payment 
3from the contribution remitted by the employer for that 
4purpose. Moneys remitted to the fund for the purpose of the 
5accelerated pension benefit program must be kept in a separate 
6account. If the fund determines it does not have sufficient 
7moneys to make the accelerated pension benefit payment, then 
8the fund shall not accept the member's irrevocable election 
9and shall notify the member of that fact. The member may 
10reapply for the accelerated pension benefit payment after that 
11fiscal year. Elections shall be processed and paid in the 
12order in which complete applications are received by the fund, 
13subject to the availability of funds. If the fund accepts the 
14member's irrevocable election to receive an accelerated 
15pension benefit payment under this Section, then the fund 
16shall transfer, from the moneys remitted to the fund for that 
17purpose, the amount of the accelerated pension benefit payment 
18into the member's eligible retirement plan or qualified 
19account. If any moneys remain in the account maintained by the 
20fund for the purpose of the accelerated pension benefit 
21program at the end of the fiscal year, the fund must remit 
22those moneys back to the employer within one month after the 
23end of the fiscal year, unless the employer notifies the fund 
24at least one month before the end of the fiscal year that the 
25funds shall remain in the account to be used for the subsequent 
26fiscal year.
		SB3404 Engrossed	- 5 -	LRB104 18864 RPS 32309 b
1    (g) The Board shall adopt any rules, including emergency 
2rules, necessary to implement this Section.
3    (h) No provision of this Section shall be interpreted in a 
4way that would cause the applicable fund to cease to be a 
5qualified plan under the Internal Revenue Code of 1986.
6    (40 ILCS 5/3-144.4 new)
7    Sec. 3-144.4. Accelerated pension benefit payment for a 
8reduction in annual retirement pension increases.
9    (a) As used in this Section:
10    "Accelerated pension benefit payment" means a lump sum 
11payment equal to 70% of the difference of the present value of 
12the automatic annual increases to a Tier 1 member's retirement 
13pension using the formula applicable to the Tier 1 member and 
14the present value of the automatic annual increases to the 
15Tier 1 member's retirement pension using the formula provided 
16under subsection (b-5).
17    "Eligible person" means a person who:
18        (1) is a Tier 1 member;
19        (2) has submitted an application for a retirement 
20    pension under this Article;
21        (3) meets the age and service requirements for 
22    receiving a retirement pension under this Article;
23        (4) has not received any retirement pension under this 
24    Article; and
25        (5) has not made the election under Section 3-144.3.
		SB3404 Engrossed	- 6 -	LRB104 18864 RPS 32309 b
1    "Tier 1 member" means a person who first became a police 
2officer under this Article before January 1, 2011.
3    (b) Until June 30, 2028, if an employer elects to provide 
4funding for an accelerated pension benefit program, then as 
5soon as practical after June 30, 2026 or as soon as practical 
6after the employer makes that election, whichever is later, 
7the fund shall implement an accelerated pension benefit 
8payment option for eligible persons. Upon the request of an 
9eligible person, if the employer has elected to provide 
10funding for an accelerated pension benefit program, the fund 
11shall calculate, using actuarial tables and other assumptions 
12adopted by the Board, an accelerated pension benefit payment 
13amount and shall offer that eligible person the opportunity to 
14irrevocably elect to have his or her automatic annual 
15increases in retirement pension calculated in accordance with 
16the formula provided under subsection (b-5) in exchange for 
17the accelerated pension benefit payment. The election under 
18this subsection must be made before the eligible person 
19receives the first payment of a retirement pension otherwise 
20payable under this Article. An eligible person is limited to 
21one calculation and offer per fiscal year.
22    (b-5) Notwithstanding any other provision of law, the 
23retirement pension of a person who made the election under 
24subsection (b) shall be subject to annual increases on the 
25January 1 occurring either on or after the attainment of age 67 
26or the first anniversary of the pension start date, whichever 
		SB3404 Engrossed	- 7 -	LRB104 18864 RPS 32309 b
1is later. Each annual increase shall be calculated at 1.5% of 
2the originally granted retirement pension.
3    (c) If a person who has received an accelerated pension 
4benefit payment returns to active service under this Article, 
5then:
6        (1) the calculation of any future automatic annual 
7    increase in retirement pension shall be calculated in 
8    accordance with the formula provided under subsection 
9    (b-5); and
10        (2) the accelerated pension benefit payment may not be 
11    repaid to the fund.
12    (d) As a condition of receiving an accelerated pension 
13benefit payment, the accelerated pension benefit payment must 
14be transferred into a tax qualified retirement plan or 
15account. The accelerated pension benefit payment under this 
16Section may be subject to withholding or payment of applicable 
17taxes, but to the extent permitted by federal law, a person who 
18receives an accelerated pension benefit payment under this 
19Section must direct the fund to pay all of that payment as a 
20rollover into another retirement plan or account qualified 
21under the Internal Revenue Code of 1986, as amended.
22    (d-5) Before accepting a member's irrevocable election to 
23receive an accelerated pension benefit payment under this 
24Section, the fund shall verify that it has a sufficient amount 
25of moneys to pay for the accelerated pension benefit payment 
26from the contribution remitted by the employer for that 
		SB3404 Engrossed	- 8 -	LRB104 18864 RPS 32309 b
1purpose. Moneys remitted to the fund for the purpose of this 
2program must be kept in a separate account. If the fund 
3determines it does not have sufficient moneys to make the 
4accelerated pension benefit payment, then the fund shall not 
5accept the member's irrevocable election and shall notify the 
6member of that fact. The member may reapply for the 
7accelerated pension benefit payment after that fiscal year. 
8Elections shall be processed and paid in the order in which 
9complete applications are received by the fund, subject to the 
10availability of funds. If the fund accepts the member's 
11irrevocable election to receive an accelerated pension benefit 
12payment under this Section, then the fund shall transfer, from 
13the moneys remitted to the fund for that purpose, the amount of 
14the accelerated pension benefit payment into the member's 
15eligible retirement plan or qualified account. If any moneys 
16remain in the account at the end of the fiscal year, the fund 
17must remit those moneys back to the employer within one month 
18after the end of the fiscal year, unless the employer notifies 
19the fund at least one month before the end of the fiscal year 
20that the funds shall remain in the account to be used for the 
21accelerated pension benefit program for the subsequent fiscal 
22year.
23    (e) The Board shall adopt any rules, including emergency 
24rules, necessary to implement this Section.
25    (f) No provision of this Section shall be interpreted in a 
26way that would cause the applicable fund to cease to be a 
		SB3404 Engrossed	- 9 -	LRB104 18864 RPS 32309 b
1qualified plan under the Internal Revenue Code of 1986.
2    (40 ILCS 5/4-138.15 new)
3    Sec. 4-138.15. Accelerated pension benefit payment in lieu 
4of any pension benefit.
5    (a) As used in this Section:
6    "Eligible person" means a person who:
7        (1) has terminated service;
8        (2) has accrued sufficient service credit to be 
9    eligible to receive a retirement pension under this 
10    Article;
11        (3) has not received any retirement pension under this 
12    Article; and
13        (4) has not made the election under Section 4-138.16.
14    "Pension benefit" means the benefits under this Article, 
15or Article 1 as it relates to those benefits, including any 
16anticipated annual increases, that an eligible person is 
17entitled to upon attainment of the applicable retirement age. 
18"Pension benefit" also includes applicable survivor's or 
19disability benefits.
20    (b) If an employer has elected to provide funding for an 
21accelerated pension benefit program, then as soon as practical 
22after June 30, 2026 or as soon as practical after the employer 
23has made that election, whichever is later, the fund shall 
24calculate, using actuarial tables and other assumptions 
25adopted by the Board, the present value of pension benefits 
		SB3404 Engrossed	- 10 -	LRB104 18864 RPS 32309 b
1for each eligible person who requests that information and 
2shall offer each eligible person the opportunity to 
3irrevocably elect to receive an amount determined by the fund 
4to be equal to 60% of the present value of his or her pension 
5benefits in lieu of receiving any pension benefit. The offer 
6shall specify the dollar amount that the eligible person will 
7receive if he or she so elects and shall expire when a 
8subsequent offer is made to an eligible person. An eligible 
9person is limited to one calculation and offer per fiscal 
10year. The fund shall make a good faith effort to contact every 
11eligible person to notify him or her of the election.
12    Until June 30, 2028, an eligible person may irrevocably 
13elect to receive an accelerated pension benefit payment in the 
14amount that the fund offers under this subsection in lieu of 
15receiving any pension benefit.
16    (c) A person's creditable service under this Article shall 
17be terminated upon the person's receipt of an accelerated 
18pension benefit payment under this Section, and no other 
19benefit shall be paid under this Article based on the 
20terminated creditable service, including any retirement, 
21survivor, or other benefit.
22    (d) If a person who has received an accelerated pension 
23benefit payment under this Section returns to active service 
24under this Article, then:
25        (1) Any benefits under the fund earned as a result of 
26    that return to active service shall be based solely on the 
		SB3404 Engrossed	- 11 -	LRB104 18864 RPS 32309 b
1    person's creditable service arising from the return to 
2    active service.
3        (2) The accelerated pension benefit payment may not be 
4    repaid to the fund, and the terminated creditable service 
5    may not under any circumstances be reinstated.
6    (e) As a condition of receiving an accelerated pension 
7benefit payment, the accelerated pension benefit payment must 
8be transferred into a tax qualified retirement plan or 
9account. The accelerated pension benefit payment under this 
10Section may be subject to withholding or payment of applicable 
11taxes, but to the extent permitted by federal law, a person who 
12receives an accelerated pension benefit payment under this 
13Section must direct the fund to pay all of that payment as a 
14rollover into another retirement plan or account qualified 
15under the Internal Revenue Code of 1986, as amended.
16    (f) Before accepting a member's irrevocable election to 
17receive an accelerated pension benefit payment under this 
18Section, the fund shall verify that it has a sufficient amount 
19of moneys to pay for the accelerated pension benefit payment 
20from the contribution remitted by the employer for that 
21purpose. Moneys remitted to the fund for the purpose of the 
22accelerated pension benefit program must be kept in a separate 
23account. If the fund determines it does not have sufficient 
24moneys to make the accelerated pension benefit payment, then 
25the fund shall not accept the member's irrevocable election 
26and shall notify the member of that fact. The member may 
		SB3404 Engrossed	- 12 -	LRB104 18864 RPS 32309 b
1reapply for the accelerated pension benefit payment after that 
2fiscal year. Elections shall be processed and paid in the 
3order in which complete applications are received by the fund, 
4subject to the availability of funds. If the fund accepts the 
5member's irrevocable election to receive an accelerated 
6pension benefit payment under this Section, then the fund 
7shall transfer, from the moneys remitted to the fund for that 
8purpose, the amount of the accelerated pension benefit payment 
9into the member's eligible retirement plan or qualified 
10account. If any moneys remain in the account maintained by the 
11fund for the purpose of the accelerated pension benefit 
12program at the end of the fiscal year, the fund must remit 
13those moneys back to the employer within one month after the 
14end of the fiscal year, unless the employer notifies the fund 
15at least one month before the end of the fiscal year that the 
16funds shall remain in the account to be used for the subsequent 
17fiscal year.
18    (g) The Board shall adopt any rules, including emergency 
19rules, necessary to implement this Section.
20    (h) No provision of this Section shall be interpreted in a 
21way that would cause the applicable fund to cease to be a 
22qualified plan under the Internal Revenue Code of 1986.
23    (40 ILCS 5/4-138.16 new)
24    Sec. 4-138.16. Accelerated pension benefit payment for a 
25reduction in annual retirement pension increases.
		SB3404 Engrossed	- 13 -	LRB104 18864 RPS 32309 b
1    (a) As used in this Section:
2    "Accelerated pension benefit payment" means a lump sum 
3payment equal to 70% of the difference of the present value of 
4the automatic annual increases to a Tier 1 member's retirement 
5pension using the formula applicable to the Tier 1 member and 
6the present value of the automatic annual increases to the 
7Tier 1 member's retirement pension using the formula provided 
8under subsection (b-5).
9    "Eligible person" means a person who:
10        (1) is a Tier 1 member;
11        (2) has submitted an application for a retirement 
12    pension under this Article;
13        (3) meets the age and service requirements for 
14    receiving a retirement pension under this Article;
15        (4) has not received any retirement pension under this 
16    Article; and
17        (5) has not made the election under Section 4-138.15.
18    "Tier 1 member" means a person who first became a 
19firefighter before January 1, 2011.
20    (b) Until June 30, 2028, if an employer elects to provide 
21funding for an accelerated pension benefit program, then as 
22soon as practical after June 30, 2026 or as soon as practical 
23after the employer makes that election, whichever is later, 
24the fund shall implement an accelerated pension benefit 
25payment option for eligible persons. Upon the request of an 
26eligible person, if the employer has elected to provide 
		SB3404 Engrossed	- 14 -	LRB104 18864 RPS 32309 b
1funding for an accelerated pension benefit program, the fund 
2shall calculate, using actuarial tables and other assumptions 
3adopted by the Board, an accelerated pension benefit payment 
4amount and shall offer that eligible person the opportunity to 
5irrevocably elect to have his or her automatic annual 
6increases in retirement pension calculated in accordance with 
7the formula provided under subsection (b-5) in exchange for 
8the accelerated pension benefit payment. The election under 
9this subsection must be made before the eligible person 
10receives the first payment of a retirement pension otherwise 
11payable under this Article. An eligible person is limited to 
12one calculation and offer per fiscal year.
13    (b-5) Notwithstanding any other provision of law, the 
14retirement pension of a person who made the election under 
15subsection (b) shall be subject to annual increases on the 
16January 1 occurring either on or after the attainment of age 67 
17or the first anniversary of the pension start date, whichever 
18is later. Each annual increase shall be calculated at 1.5% of 
19the originally granted retirement pension.
20    (c) If a person who has received an accelerated pension 
21benefit payment returns to active service under this Article, 
22then:
23        (1) the calculation of any future automatic annual 
24    increase in retirement pension shall be calculated in 
25    accordance with the formula provided under subsection 
26    (b-5); and
		SB3404 Engrossed	- 15 -	LRB104 18864 RPS 32309 b
1        (2) the accelerated pension benefit payment may not be 
2    repaid to the fund.
3    (d) As a condition of receiving an accelerated pension 
4benefit payment, the accelerated pension benefit payment must 
5be transferred into a tax qualified retirement plan or 
6account. The accelerated pension benefit payment under this 
7Section may be subject to withholding or payment of applicable 
8taxes, but to the extent permitted by federal law, a person who 
9receives an accelerated pension benefit payment under this 
10Section must direct the fund to pay all of that payment as a 
11rollover into another retirement plan or account qualified 
12under the Internal Revenue Code of 1986, as amended.
13    (d-5) Before accepting a member's irrevocable election to 
14receive an accelerated pension benefit payment under this 
15Section, the fund shall verify that it has a sufficient amount 
16of moneys to pay for the accelerated pension benefit payment 
17from the contribution remitted by the employer for that 
18purpose. Moneys remitted to the fund for the purpose of this 
19program must be kept in a separate account. If the fund 
20determines it does not have sufficient moneys to make the 
21accelerated pension benefit payment, then the fund shall not 
22accept the member's irrevocable election and shall notify the 
23member of that fact. The member may reapply for the 
24accelerated pension benefit payment after that fiscal year. 
25Elections shall be processed and paid in the order in which 
26complete applications are received by the fund, subject to the 
		SB3404 Engrossed	- 16 -	LRB104 18864 RPS 32309 b
1availability of funds. If the fund accepts the member's 
2irrevocable election to receive an accelerated pension benefit 
3payment under this Section, then the fund shall transfer, from 
4the moneys remitted to the fund for that purpose, the amount of 
5the accelerated pension benefit payment into the member's 
6eligible retirement plan or qualified account. If any moneys 
7remain in the account at the end of the fiscal year, the fund 
8must remit those moneys back to the employer within one month 
9after the end of the fiscal year, unless the employer notifies 
10the fund at least one month before the end of the fiscal year 
11that the funds shall remain in the account to be used for the 
12accelerated pension benefit program for the subsequent fiscal 
13year.
14    (e) The Board shall adopt any rules, including emergency 
15rules, necessary to implement this Section.
16    (f) No provision of this Section shall be interpreted in a 
17way that would cause the applicable fund to cease to be a 
18qualified plan under the Internal Revenue Code of 1986.
19    (40 ILCS 5/5-218.5 new)
20    Sec. 5-218.5. Accelerated pension benefit payment in lieu 
21of any pension benefit.
22    (a) As used in this Section:
23    "Eligible person" means a person who:
24        (1) has terminated service;
25        (2) has accrued sufficient service credit to be 
		SB3404 Engrossed	- 17 -	LRB104 18864 RPS 32309 b
1    eligible to receive a retirement annuity under this 
2    Article;
3        (3) has not received any retirement annuity under this 
4    Article; and
5        (4) has not made the election under Section 5-218.6.
6    "Pension benefit" means the benefits under this Article, 
7or Article 1 as it relates to those benefits, including any 
8anticipated annual increases, that an eligible person is 
9entitled to upon attainment of the applicable retirement age. 
10"Pension benefit" also includes applicable survivor's or 
11disability benefits.
12    (b) If an employer has elected to provide funding for an 
13accelerated pension benefit program, then as soon as practical 
14after June 30, 2026 or as soon as practical after the employer 
15has made that election, whichever is later, the Fund shall 
16calculate, using actuarial tables and other assumptions 
17adopted by the Board, the present value of pension benefits 
18for each eligible person who requests that information and 
19shall offer each eligible person the opportunity to 
20irrevocably elect to receive an amount determined by the Fund 
21to be equal to 60% of the present value of his or her pension 
22benefits in lieu of receiving any pension benefit. The offer 
23shall specify the dollar amount that the eligible person will 
24receive if he or she so elects and shall expire when a 
25subsequent offer is made to an eligible person. An eligible 
26person is limited to one calculation and offer per fiscal 
		SB3404 Engrossed	- 18 -	LRB104 18864 RPS 32309 b
1year. The Fund shall make a good faith effort to contact every 
2eligible person to notify him or her of the election.
3    Until June 30, 2028, an eligible person may irrevocably 
4elect to receive an accelerated pension benefit payment in the 
5amount that the Fund offers under this subsection in lieu of 
6receiving any pension benefit.
7    (c) A person's creditable service under this Article shall 
8be terminated upon the person's receipt of an accelerated 
9pension benefit payment under this Section, and no other 
10benefit shall be paid under this Article based on the 
11terminated creditable service, including any retirement, 
12survivor, or other benefit.
13    (d) If a person who has received an accelerated pension 
14benefit payment under this Section returns to active service 
15under this Article, then:
16        (1) Any benefits under the Fund earned as a result of 
17    that return to active service shall be based solely on the 
18    person's creditable service arising from the return to 
19    active service.
20        (2) The accelerated pension benefit payment may not be 
21    repaid to the Fund, and the terminated creditable service 
22    may not under any circumstances be reinstated.
23    (e) As a condition of receiving an accelerated pension 
24benefit payment, the accelerated pension benefit payment must 
25be transferred into a tax qualified retirement plan or 
26account. The accelerated pension benefit payment under this 
		SB3404 Engrossed	- 19 -	LRB104 18864 RPS 32309 b
1Section may be subject to withholding or payment of applicable 
2taxes, but to the extent permitted by federal law, a person who 
3receives an accelerated pension benefit payment under this 
4Section must direct the Fund to pay all of that payment as a 
5rollover into another retirement plan or account qualified 
6under the Internal Revenue Code of 1986, as amended.
7    (f) Before accepting a member's irrevocable election to 
8receive an accelerated pension benefit payment under this 
9Section, the Fund shall verify that it has a sufficient amount 
10of moneys to pay for the accelerated pension benefit payment 
11from the contribution remitted by the employer for that 
12purpose. Moneys remitted to the Fund for the purpose of the 
13accelerated pension benefit program must be kept in a separate 
14account. If the Fund determines it does not have sufficient 
15moneys to make the accelerated pension benefit payment, then 
16the Fund shall not accept the member's irrevocable election 
17and shall notify the member of that fact. The member may 
18reapply for the accelerated pension benefit payment after that 
19fiscal year. Elections shall be processed and paid in the 
20order in which complete applications are received by the Fund, 
21subject to the availability of funds. If the Fund accepts the 
22member's irrevocable election to receive an accelerated 
23pension benefit payment under this Section, then the Fund 
24shall transfer, from the moneys remitted to the Fund for that 
25purpose, the amount of the accelerated pension benefit payment 
26into the member's eligible retirement plan or qualified 
		SB3404 Engrossed	- 20 -	LRB104 18864 RPS 32309 b
1account. If any moneys remain in the account maintained by the 
2Fund for the purpose of the accelerated pension benefit 
3program at the end of the fiscal year, the Fund must remit 
4those moneys back to the employer within one month after the 
5end of the fiscal year, unless the employer notifies the Fund 
6at least one month before the end of the fiscal year that the 
7funds shall remain in the account to be used for the subsequent 
8fiscal year.
9    (g) The Board shall adopt any rules, including emergency 
10rules, necessary to implement this Section.
11    (h) No provision of this Section shall be interpreted in a 
12way that would cause the Fund to cease to be a qualified plan 
13under the Internal Revenue Code of 1986.
14    (40 ILCS 5/5-218.6 new)
15    Sec. 5-218.6. Accelerated pension benefit payment for a 
16reduction in annual retirement annuity increases.
17    (a) As used in this Section:
18    "Accelerated pension benefit payment" means a lump sum 
19payment equal to 70% of the difference of the present value of 
20the automatic annual increases to a Tier 1 member's retirement 
21annuity and survivor's annuity using the formula applicable to 
22the Tier 1 member and the present value of the automatic annual 
23increases to the Tier 1 member's retirement annuity using the 
24formula provided under subsection (b-5).
25    "Eligible person" means a person who:
		SB3404 Engrossed	- 21 -	LRB104 18864 RPS 32309 b
1        (1) is a Tier 1 member;
2        (2) has submitted an application for a retirement 
3    annuity under this Article;
4        (3) meets the age and service requirements for 
5    receiving a retirement annuity under this Article;
6        (4) has not received any retirement annuity under this 
7    Article; and
8        (5) has not made the election under Section 5-218.5.
9    "Tier 1 member" means a person who first became a 
10policeman before January 1, 2011.
11    (b) Until June 30, 2028, if an employer elects to provide 
12funding for an accelerated pension benefit program, then as 
13soon as practical after June 30, 2026 or as soon as practical 
14after the employer makes that election, whichever is later, 
15the Fund shall implement an accelerated pension benefit 
16payment option for eligible persons. Upon the request of an 
17eligible person, if the employer has elected to provide 
18funding for an accelerated pension benefit program, the Fund 
19shall calculate, using actuarial tables and other assumptions 
20adopted by the Board, an accelerated pension benefit payment 
21amount and shall offer that eligible person the opportunity to 
22irrevocably elect to have his or her automatic annual 
23increases in retirement pension calculated in accordance with 
24the formula provided under subsection (b-5) in exchange for 
25the accelerated pension benefit payment. The election under 
26this subsection must be made before the eligible person 
		SB3404 Engrossed	- 22 -	LRB104 18864 RPS 32309 b
1receives the first payment of a retirement pension otherwise 
2payable under this Article. An eligible person is limited to 
3one calculation and offer per fiscal year.
4    (b-5) Notwithstanding any other provision of law, the 
5retirement annuity of a person who made the election under 
6subsection (b) shall be subject to annual increases on the 
7January 1 occurring either on or after the attainment of age 67 
8or the first anniversary of the annuity start date, whichever 
9is later. Each annual increase shall be calculated at 1.5% of 
10the originally granted retirement annuity.
11    (c) If a person who has received an accelerated pension 
12benefit payment returns to active service under this Article, 
13then:
14        (1) the calculation of any future automatic annual 
15    increase in retirement annuity shall be calculated in 
16    accordance with the formula provided under subsection 
17    (b-5); and
18        (2) the accelerated pension benefit payment may not be 
19    repaid to the Fund.
20    (d) As a condition of receiving an accelerated pension 
21benefit payment, the accelerated pension benefit payment must 
22be transferred into a tax qualified retirement plan or 
23account. The accelerated pension benefit payment under this 
24Section may be subject to withholding or payment of applicable 
25taxes, but to the extent permitted by federal law, a person who 
26receives an accelerated pension benefit payment under this 
		SB3404 Engrossed	- 23 -	LRB104 18864 RPS 32309 b
1Section must direct the Fund to pay all of that payment as a 
2rollover into another retirement plan or account qualified 
3under the Internal Revenue Code of 1986, as amended.
4    (d-5) Before accepting a member's irrevocable election to 
5receive an accelerated pension benefit payment under this 
6Section, the Fund shall verify that it has a sufficient amount 
7of moneys to pay for the accelerated pension benefit payment 
8from the contribution remitted by the employer for that 
9purpose. Moneys remitted to the Fund for the purpose of this 
10program must be kept in a separate account. If the Fund 
11determines it does not have sufficient moneys to make the 
12accelerated pension benefit payment, then the Fund shall not 
13accept the member's irrevocable election and shall notify the 
14member of that fact. The member may reapply for the 
15accelerated pension benefit payment after that fiscal year. 
16Elections shall be processed and paid in the order in which 
17complete applications are received by the Fund, subject to the 
18availability of funds. If the Fund accepts the member's 
19irrevocable election to receive an accelerated pension benefit 
20payment under this Section, then the Fund shall transfer, from 
21the moneys remitted to the Fund for that purpose, the amount of 
22the accelerated pension benefit payment into the member's 
23eligible retirement plan or qualified account. If any moneys 
24remain in the account at the end of the fiscal year, the Fund 
25must remit those moneys back to the employer within one month 
26after the end of the fiscal year, unless the employer notifies 
		SB3404 Engrossed	- 24 -	LRB104 18864 RPS 32309 b
1the Fund at least one month before the end of the fiscal year 
2that the funds shall remain in the account to be used for the 
3accelerated pension benefit program for the subsequent fiscal 
4year.
5    (e) The Board shall adopt any rules, including emergency 
6rules, necessary to implement this Section.
7    (f) No provision of this Section shall be interpreted in a 
8way that would cause the Fund to cease to be a qualified plan 
9under the Internal Revenue Code of 1986.
10    (40 ILCS 5/6-213.5 new)
11    Sec. 6-213.5. Accelerated pension benefit payment in lieu 
12of any pension benefit.
13    (a) As used in this Section:
14    "Eligible person" means a person who:
15        (1) has terminated service;
16        (2) has accrued sufficient service credit to be 
17    eligible to receive a retirement annuity under this 
18    Article;
19        (3) has not received any retirement annuity under this 
20    Article; and
21        (4) has not made the election under Section 6-213.6.
22    "Pension benefit" means the benefits under this Article, 
23or Article 1 as it relates to those benefits, including any 
24anticipated annual increases, that an eligible person is 
25entitled to upon attainment of the applicable retirement age. 
		SB3404 Engrossed	- 25 -	LRB104 18864 RPS 32309 b
1"Pension benefit" also includes applicable survivor's or 
2disability benefits.
3    (b) If an employer has elected to provide funding for an 
4accelerated pension benefit program, then as soon as practical 
5after June 30, 2026 or as soon as practical after the employer 
6has made that election, whichever is later, the Fund shall 
7calculate, using actuarial tables and other assumptions 
8adopted by the Board, the present value of pension benefits 
9for each eligible person who requests that information and 
10shall offer each eligible person the opportunity to 
11irrevocably elect to receive an amount determined by the Fund 
12to be equal to 60% of the present value of his or her pension 
13benefits in lieu of receiving any pension benefit. The offer 
14shall specify the dollar amount that the eligible person will 
15receive if he or she so elects and shall expire when a 
16subsequent offer is made to an eligible person. An eligible 
17person is limited to one calculation and offer per fiscal 
18year. The Fund shall make a good faith effort to contact every 
19eligible person to notify him or her of the election.
20    Until June 30, 2028, an eligible person may irrevocably 
21elect to receive an accelerated pension benefit payment in the 
22amount that the Fund offers under this subsection in lieu of 
23receiving any pension benefit.
24    (c) A person's creditable service under this Article shall 
25be terminated upon the person's receipt of an accelerated 
26pension benefit payment under this Section, and no other 
		SB3404 Engrossed	- 26 -	LRB104 18864 RPS 32309 b
1benefit shall be paid under this Article based on the 
2terminated creditable service, including any retirement, 
3survivor, or other benefit.
4    (d) If a person who has received an accelerated pension 
5benefit payment under this Section returns to active service 
6under this Article, then:
7        (1) Any benefits under the Fund earned as a result of 
8    that return to active service shall be based solely on the 
9    person's creditable service arising from the return to 
10    active service.
11        (2) The accelerated pension benefit payment may not be 
12    repaid to the Fund, and the terminated creditable service 
13    may not under any circumstances be reinstated.
14    (e) As a condition of receiving an accelerated pension 
15benefit payment, the accelerated pension benefit payment must 
16be transferred into a tax qualified retirement plan or 
17account. The accelerated pension benefit payment under this 
18Section may be subject to withholding or payment of applicable 
19taxes, but to the extent permitted by federal law, a person who 
20receives an accelerated pension benefit payment under this 
21Section must direct the Fund to pay all of that payment as a 
22rollover into another retirement plan or account qualified 
23under the Internal Revenue Code of 1986, as amended.
24    (f) Before accepting a member's irrevocable election to 
25receive an accelerated pension benefit payment under this 
26Section, the Fund shall verify that it has a sufficient amount 
		SB3404 Engrossed	- 27 -	LRB104 18864 RPS 32309 b
1of moneys to pay for the accelerated pension benefit payment 
2from the contribution remitted by the employer for that 
3purpose. Moneys remitted to the Fund for the purpose of the 
4accelerated pension benefit program must be kept in a separate 
5account. If the Fund determines it does not have sufficient 
6moneys to make the accelerated pension benefit payment, then 
7the Fund shall not accept the member's irrevocable election 
8and shall notify the member of that fact. The member may 
9reapply for the accelerated pension benefit payment after that 
10fiscal year. Elections shall be processed and paid in the 
11order in which complete applications are received by the Fund, 
12subject to the availability of funds. If the Fund accepts the 
13member's irrevocable election to receive an accelerated 
14pension benefit payment under this Section, then the Fund 
15shall transfer, from the moneys remitted to the Fund for that 
16purpose, the amount of the accelerated pension benefit payment 
17into the member's eligible retirement plan or qualified 
18account. If any moneys remain in the account maintained by the 
19Fund for the purpose of the accelerated pension benefit 
20program at the end of the fiscal year, the Fund must remit 
21those moneys back to the employer within one month after the 
22end of the fiscal year, unless the employer notifies the Fund 
23at least one month before the end of the fiscal year that the 
24funds shall remain in the account to be used for the subsequent 
25fiscal year.
26    (g) The Board shall adopt any rules, including emergency 
		SB3404 Engrossed	- 28 -	LRB104 18864 RPS 32309 b
1rules, necessary to implement this Section.
2    (h) No provision of this Section shall be interpreted in a 
3way that would cause the Fund to cease to be a qualified plan 
4under the Internal Revenue Code of 1986.
5    (40 ILCS 5/6-213.6 new)
6    Sec. 6-213.6. Accelerated pension benefit payment for a 
7reduction in annual retirement annuity increases.
8    (a) As used in this Section:
9    "Accelerated pension benefit payment" means a lump sum 
10payment equal to 70% of the difference of the present value of 
11the automatic annual increases to a Tier 1 member's retirement 
12annuity and survivor's annuity using the formula applicable to 
13the Tier 1 member and the present value of the automatic annual 
14increases to the Tier 1 member's retirement annuity using the 
15formula provided under subsection (b-5). "Eligible person" 
16means a person who:
17        (1) is a Tier 1 member;
18        (2) has submitted an application for a retirement 
19    annuity under this Article;
20        (3) meets the age and service requirements for 
21    receiving a retirement annuity under this Article;
22        (4) has not received any retirement annuity under this 
23    Article; and
24        (5) has not made the election under Section 6-213.5.
25    "Tier 1 member" means a person who first became a fireman 
		SB3404 Engrossed	- 29 -	LRB104 18864 RPS 32309 b
1under this Article before January 1, 2011.
2    (b) Until June 30, 2028, if an employer elects to provide 
3funding for an accelerated pension benefit program, then as 
4soon as practical after June 30, 2026 or as soon as practical 
5after the employer makes that election, whichever is later, 
6the Fund shall implement an accelerated pension benefit 
7payment option for eligible persons. Upon the request of an 
8eligible person, if the employer has elected to provide 
9funding for an accelerated pension benefit program, the Fund 
10shall calculate, using actuarial tables and other assumptions 
11adopted by the Board, an accelerated pension benefit payment 
12amount and shall offer that eligible person the opportunity to 
13irrevocably elect to have his or her automatic annual 
14increases in retirement pension calculated in accordance with 
15the formula provided under subsection (b-5) in exchange for 
16the accelerated pension benefit payment. The election under 
17this subsection must be made before the eligible person 
18receives the first payment of a retirement pension otherwise 
19payable under this Article. An eligible person is limited to 
20one calculation and offer per fiscal year.
21    (b-5) Notwithstanding any other provision of law, the 
22retirement annuity of a person who made the election under 
23subsection (b) shall be subject to annual increases on the 
24January 1 occurring either on or after the attainment of age 67 
25or the first anniversary of the annuity start date, whichever 
26is later. Each annual increase shall be calculated at 1.5% of 
		SB3404 Engrossed	- 30 -	LRB104 18864 RPS 32309 b
1the originally granted retirement annuity.
2    (c) If a person who has received an accelerated pension 
3benefit payment returns to active service under this Article, 
4then:
5        (1) the calculation of any future automatic annual 
6    increase in retirement annuity shall be calculated in 
7    accordance with the formula provided under subsection 
8    (b-5); and
9        (2) the accelerated pension benefit payment may not be 
10    repaid to the Fund.
11    (d) As a condition of receiving an accelerated pension 
12benefit payment, the accelerated pension benefit payment must 
13be transferred into a tax qualified retirement plan or 
14account. The accelerated pension benefit payment under this 
15Section may be subject to withholding or payment of applicable 
16taxes, but to the extent permitted by federal law, a person who 
17receives an accelerated pension benefit payment under this 
18Section must direct the Fund to pay all of that payment as a 
19rollover into another retirement plan or account qualified 
20under the Internal Revenue Code of 1986, as amended.
21    (d-5) Before accepting a member's irrevocable election to 
22receive an accelerated pension benefit payment under this 
23Section, the Fund shall verify that it has a sufficient amount 
24of moneys to pay for the accelerated pension benefit payment 
25from the contribution remitted by the employer for that 
26purpose. Moneys remitted to the Fund for the purpose of this 
		SB3404 Engrossed	- 31 -	LRB104 18864 RPS 32309 b
1program must be kept in a separate account. If the Fund 
2determines it does not have sufficient moneys to make the 
3accelerated pension benefit payment, then the Fund shall not 
4accept the member's irrevocable election and shall notify the 
5member of that fact. The member may reapply for the 
6accelerated pension benefit payment after that fiscal year. 
7Elections shall be processed and paid in the order in which 
8complete applications are received by the Fund, subject to the 
9availability of funds. If the Fund accepts the member's 
10irrevocable election to receive an accelerated pension benefit 
11payment under this Section, then the Fund shall transfer, from 
12the moneys remitted to the Fund for that purpose, the amount of 
13the accelerated pension benefit payment into the member's 
14eligible retirement plan or qualified account. If any moneys 
15remain in the account at the end of the fiscal year, the Fund 
16must remit those moneys back to the employer within one month 
17after the end of the fiscal year, unless the employer notifies 
18the Fund at least one month before the end of the fiscal year 
19that the funds shall remain in the account to be used for the 
20accelerated pension benefit program for the subsequent fiscal 
21year.
22    (e) The Board shall adopt any rules, including emergency 
23rules, necessary to implement this Section.
24    (f) No provision of this Section shall be interpreted in a 
25way that would cause the Fund to cease to be a qualified plan 
26under the Internal Revenue Code of 1986.
		SB3404 Engrossed	- 32 -	LRB104 18864 RPS 32309 b
1    (40 ILCS 5/8-244.5 new)
2    Sec. 8-244.5. Accelerated pension benefit payment in lieu 
3of any pension benefit.
4    (a) As used in this Section:
5    "Eligible person" means a person who:
6        (1) has terminated service;
7        (2) has accrued sufficient service credit to be 
8    eligible to receive a retirement annuity under this 
9    Article;
10        (3) has not received any retirement annuity under this 
11    Article; and
12        (4) has not made the election under Section 8-244.6.
13    "Pension benefit" means the benefits under this Article, 
14or Article 1 as it relates to those benefits, including any 
15anticipated annual increases, that an eligible person is 
16entitled to upon attainment of the applicable retirement age. 
17"Pension benefit" also includes applicable survivor's or 
18disability benefits.
19    (b) If the city has elected to provide funding for an 
20accelerated pension benefit program, then as soon as practical 
21after June 30, 2026 or as soon as practical after the city has 
22made that election, whichever is later, the Fund shall 
23calculate, using actuarial tables and other assumptions 
24adopted by the Board, the present value of pension benefits 
25for each eligible person who requests that information and 
		SB3404 Engrossed	- 33 -	LRB104 18864 RPS 32309 b
1shall offer each eligible person the opportunity to 
2irrevocably elect to receive an amount determined by the Fund 
3to be equal to 60% of the present value of his or her pension 
4benefits in lieu of receiving any pension benefit. The offer 
5shall specify the dollar amount that the eligible person will 
6receive if he or she so elects and shall expire when a 
7subsequent offer is made to an eligible person. An eligible 
8person is limited to one calculation and offer per fiscal 
9year. The Fund shall make a good faith effort to contact every 
10eligible person to notify him or her of the election.
11    Until June 30, 2028, an eligible person may irrevocably 
12elect to receive an accelerated pension benefit payment in the 
13amount that the Fund offers under this subsection in lieu of 
14receiving any pension benefit. A person who elects to receive 
15an accelerated pension benefit payment under this Section may 
16not elect to proceed under the Retirement Systems Reciprocal 
17Act with respect to service under this Article.
18    (c) A person's creditable service under this Article shall 
19be terminated upon the person's receipt of an accelerated 
20pension benefit payment under this Section, and no other 
21benefit shall be paid under this Article based on the 
22terminated creditable service, including any retirement, 
23survivor, or other benefit.
24    (d) If a person who has received an accelerated pension 
25benefit payment under this Section returns to active service 
26under this Article, then:
		SB3404 Engrossed	- 34 -	LRB104 18864 RPS 32309 b
1        (1) Any benefits under the Fund earned as a result of 
2    that return to active service shall be based solely on the 
3    person's creditable service arising from the return to 
4    active service.
5        (2) The accelerated pension benefit payment may not be 
6    repaid to the Fund, and the terminated creditable service 
7    may not under any circumstances be reinstated.
8    (e) As a condition of receiving an accelerated pension 
9benefit payment, the accelerated pension benefit payment must 
10be transferred into a tax qualified retirement plan or 
11account. The accelerated pension benefit payment under this 
12Section may be subject to withholding or payment of applicable 
13taxes, but to the extent permitted by federal law, a person who 
14receives an accelerated pension benefit payment under this 
15Section must direct the Fund to pay all of that payment as a 
16rollover into another retirement plan or account qualified 
17under the Internal Revenue Code of 1986, as amended.
18    (f) Before accepting a member's irrevocable election to 
19receive an accelerated pension benefit payment under this 
20Section, the Fund shall verify that it has a sufficient amount 
21of moneys to pay for the accelerated pension benefit payment 
22from the contribution remitted by the city for that purpose. 
23Moneys remitted to the Fund for the purpose of the accelerated 
24pension benefit program must be kept in a separate account. If 
25the Fund determines it does not have sufficient moneys to make 
26the accelerated pension benefit payment, then the Fund shall 
		SB3404 Engrossed	- 35 -	LRB104 18864 RPS 32309 b
1not accept the member's irrevocable election and shall notify 
2the member of that fact. The member may reapply for the 
3accelerated pension benefit payment after that fiscal year. 
4Elections shall be processed and paid in the order in which 
5complete applications are received by the Fund, subject to the 
6availability of funds. If the Fund accepts the member's 
7irrevocable election to receive an accelerated pension benefit 
8payment under this Section, then the Fund shall transfer, from 
9the moneys remitted to the Fund for that purpose, the amount of 
10the accelerated pension benefit payment into the member's 
11eligible retirement plan or qualified account. If any moneys 
12remain in the account maintained by the Fund for the purpose of 
13the accelerated pension benefit program at the end of the 
14fiscal year, the Fund must remit those moneys back to the city 
15within one month after the end of the fiscal year, unless the 
16city notifies the Fund at least one month before the end of the 
17fiscal year that the funds shall remain in the account to be 
18used for the subsequent fiscal year.
19    (g) The Board shall adopt any rules, including emergency 
20rules, necessary to implement this Section.
21    (h) No provision of this Section shall be interpreted in a 
22way that would cause the Fund to cease to be a qualified plan 
23under the Internal Revenue Code of 1986.
24    (40 ILCS 5/8-244.6 new)
25    Sec. 8-244.6. Accelerated pension benefit payment for a 
		SB3404 Engrossed	- 36 -	LRB104 18864 RPS 32309 b
1reduction in annual retirement annuity.
2    (a) As used in this Section:
3    "Accelerated pension benefit payment" means a lump sum 
4payment equal to 70% of the difference of the present value of 
5the automatic annual increases to a Tier 1 member's retirement 
6annuity using the formula applicable to the Tier 1 member and 
7the present value of the automatic annual increases to the 
8Tier 1 member's retirement annuity using the formula provided 
9under subsection (b-5).
10    "Eligible person" means a person who:
11        (1) is a Tier 1 member;
12        (2) has submitted an application for a retirement 
13    annuity under this Article;
14        (3) meets the age and service requirements for 
15    receiving a retirement annuity under this Article;
16        (4) has not received any retirement annuity under this 
17    Article; and
18        (5) has not made the election under Section 8-244.5.
19    "Tier 1 member" means an employee who first became a 
20participant under this Article or any reciprocal retirement 
21system or pension fund established under this Code before 
22January 1, 2011.
23    (b) Until June 30, 2028, if the city elects to provide 
24funding for an accelerated pension benefit program, then as 
25soon as practical after June 30, 2026 or as soon as practical 
26after the city makes that election, whichever is later, the 
		SB3404 Engrossed	- 37 -	LRB104 18864 RPS 32309 b
1Fund shall implement an accelerated pension benefit payment 
2option for eligible persons. Upon the request of an eligible 
3person, if the city has elected to provide funding for an 
4accelerated pension benefit program, the Fund shall calculate, 
5using actuarial tables and other assumptions adopted by the 
6Board, an accelerated pension benefit payment amount and shall 
7offer that eligible person the opportunity to irrevocably 
8elect to have his or her automatic annual increases in 
9retirement pension calculated in accordance with the formula 
10provided under subsection (b-5) in exchange for the 
11accelerated pension benefit payment. The election under this 
12subsection must be made before the eligible person receives 
13the first payment of a retirement pension otherwise payable 
14under this Article. An eligible person is limited to one 
15calculation and offer per fiscal year.
16    (b-5) Notwithstanding any other provision of law, the 
17retirement annuity of a person who made the election under 
18subsection (b) shall be subject to annual increases on the 
19January 1 occurring either on or after the attainment of age 67 
20or the first anniversary of the annuity start date, whichever 
21is later. Each annual increase shall be calculated at 1.5% of 
22the originally granted retirement annuity.
23    (c) If a person who has received an accelerated pension 
24benefit payment returns to active service under this Article, 
25then:
26        (1) the calculation of any future automatic annual 
		SB3404 Engrossed	- 38 -	LRB104 18864 RPS 32309 b
1    increase in retirement annuity shall be calculated in 
2    accordance with the formula provided under subsection 
3    (b-5); and
4        (2) the accelerated pension benefit payment may not be 
5    repaid to the Fund.
6    (d) As a condition of receiving an accelerated pension 
7benefit payment, the accelerated pension benefit payment must 
8be transferred into a tax qualified retirement plan or 
9account. The accelerated pension benefit payment under this 
10Section may be subject to withholding or payment of applicable 
11taxes, but to the extent permitted by federal law, a person who 
12receives an accelerated pension benefit payment under this 
13Section must direct the Fund to pay all of that payment as a 
14rollover into another retirement plan or account qualified 
15under the Internal Revenue Code of 1986, as amended.
16    (d-5) Before accepting a member's irrevocable election to 
17receive an accelerated pension benefit payment under this 
18Section, the Fund shall verify that it has a sufficient amount 
19of moneys to pay for the accelerated pension benefit payment 
20from the contribution remitted by the city for that purpose. 
21Moneys remitted to the Fund for the purpose of this program 
22must be kept in a separate account. If the Fund determines it 
23does not have sufficient moneys to make the accelerated 
24pension benefit payment, then the Fund shall not accept the 
25member's irrevocable election and shall notify the member of 
26that fact. The member may reapply for the accelerated pension 
		SB3404 Engrossed	- 39 -	LRB104 18864 RPS 32309 b
1benefit payment after that fiscal year. Elections shall be 
2processed and paid in the order in which complete applications 
3are received by the Fund, subject to the availability of 
4funds. If the Fund accepts the member's irrevocable election 
5to receive an accelerated pension benefit payment under this 
6Section, then the Fund shall transfer, from the moneys 
7remitted to the Fund for that purpose, the amount of the 
8accelerated pension benefit payment into the member's eligible 
9retirement plan or qualified account. If any moneys remain in 
10the account at the end of the fiscal year, the Fund must remit 
11those moneys back to the city within one month after the end of 
12the fiscal year, unless the city notifies the Fund at least one 
13month before the end of the fiscal year that the funds shall 
14remain in the account to be used for the accelerated pension 
15benefit program for the subsequent fiscal year.
16    (e) The Board shall adopt any rules, including emergency 
17rules, necessary to implement this Section.
18    (f) No provision of this Section shall be interpreted in a 
19way that would cause the Fund to cease to be a qualified plan 
20under the Internal Revenue Code of 1986.
21    (40 ILCS 5/9-134.6 new)
22    Sec. 9-134.6. Accelerated pension benefit payment in lieu 
23of any pension benefit.
24    (a) As used in this Section:
25    "Eligible person" means a person who:
		SB3404 Engrossed	- 40 -	LRB104 18864 RPS 32309 b
1        (1) has terminated service;
2        (2) has accrued sufficient service credit to be 
3    eligible to receive a retirement annuity under this 
4    Article;
5        (3) has not received any retirement annuity under this 
6    Article; and
7        (4) has not made the election under Section 9-134.7.
8    "Pension benefit" means the benefits under this Article, 
9or Article 1 as it relates to those benefits, including any 
10anticipated annual increases, that an eligible person is 
11entitled to upon attainment of the applicable retirement age. 
12"Pension benefit" also includes applicable survivor's, 
13widow's, or disability benefits.
14    (b) If an employer has elected to provide funding for an 
15accelerated pension benefit program, then as soon as practical 
16after June 30, 2026 or as soon as practical after the employer 
17has made that election, whichever is later, the Fund shall 
18calculate, using actuarial tables and other assumptions 
19adopted by the Board, the present value of pension benefits 
20for each eligible person who requests that information and 
21shall offer each eligible person the opportunity to 
22irrevocably elect to receive an amount determined by the Fund 
23to be equal to 60% of the present value of his or her pension 
24benefits in lieu of receiving any pension benefit. The offer 
25shall specify the dollar amount that the eligible person will 
26receive if he or she so elects and shall expire when a 
		SB3404 Engrossed	- 41 -	LRB104 18864 RPS 32309 b
1subsequent offer is made to an eligible person. An eligible 
2person is limited to one calculation and offer per fiscal 
3year. The Fund shall make a good faith effort to contact every 
4eligible person to notify him or her of the election.
5    Until June 30, 2028, an eligible person may irrevocably 
6elect to receive an accelerated pension benefit payment in the 
7amount that the Fund offers under this subsection in lieu of 
8receiving any pension benefit. A person who elects to receive 
9an accelerated pension benefit payment under this Section may 
10not elect to proceed under the Retirement Systems Reciprocal 
11Act with respect to service under this Article.
12    (c) A person's creditable service under this Article shall 
13be terminated upon the person's receipt of an accelerated 
14pension benefit payment under this Section, and no other 
15benefit shall be paid under this Article based on the 
16terminated creditable service, including any retirement, 
17survivor, or other benefit.
18    (d) If a person who has received an accelerated pension 
19benefit payment under this Section returns to active service 
20under this Article, then:
21        (1) Any benefits under the Fund earned as a result of 
22    that return to active service shall be based solely on the 
23    person's creditable service arising from the return to 
24    active service.
25        (2) The accelerated pension benefit payment may not be 
26    repaid to the Fund, and the terminated creditable service 
		SB3404 Engrossed	- 42 -	LRB104 18864 RPS 32309 b
1    may not under any circumstances be reinstated.
2    (e) As a condition of receiving an accelerated pension 
3benefit payment, the accelerated pension benefit payment must 
4be transferred into a tax qualified retirement plan or 
5account. The accelerated pension benefit payment under this 
6Section may be subject to withholding or payment of applicable 
7taxes, but to the extent permitted by federal law, a person who 
8receives an accelerated pension benefit payment under this 
9Section must direct the Fund to pay all of that payment as a 
10rollover into another retirement plan or account qualified 
11under the Internal Revenue Code of 1986, as amended.
12    (f) Before accepting a member's irrevocable election to 
13receive an accelerated pension benefit payment under this 
14Section, the Fund shall verify that it has a sufficient amount 
15of moneys to pay for the accelerated pension benefit payment 
16from the contribution remitted by the employer for that 
17purpose. Moneys remitted to the Fund for the purpose of the 
18accelerated pension benefit program must be kept in a separate 
19account. If the Fund determines it does not have sufficient 
20moneys to make the accelerated pension benefit payment, then 
21the Fund shall not accept the member's irrevocable election 
22and shall notify the member of that fact. The member may 
23reapply for the accelerated pension benefit payment after that 
24fiscal year. Elections shall be processed and paid in the 
25order in which complete applications are received by the Fund, 
26subject to the availability of funds. If the Fund accepts the 
		SB3404 Engrossed	- 43 -	LRB104 18864 RPS 32309 b
1member's irrevocable election to receive an accelerated 
2pension benefit payment under this Section, then the Fund 
3shall transfer, from the moneys remitted to the Fund for that 
4purpose, the amount of the accelerated pension benefit payment 
5into the member's eligible retirement plan or qualified 
6account. If any moneys remain in the account maintained by the 
7Fund for the purpose of the accelerated pension benefit 
8program at the end of the fiscal year, the Fund must remit 
9those moneys back to the employer within one month after the 
10end of the fiscal year, unless the employer notifies the Fund 
11at least one month before the end of the fiscal year that the 
12funds shall remain in the account to be used for the subsequent 
13fiscal year.
14    (g) The Board shall adopt any rules, including emergency 
15rules, necessary to implement this Section.
16    (h) No provision of this Section shall be interpreted in a 
17way that would cause the Fund to cease to be a qualified plan 
18under the Internal Revenue Code of 1986.
19    (40 ILCS 5/9-134.7 new)
20    Sec. 9-134.7. Accelerated pension benefit payment for a 
21reduction in annual retirement annuity and widow's annuity 
22increases.
23    (a) As used in this Section:
24    "Accelerated pension benefit payment" means a lump sum 
25payment equal to 70% of the difference of the present value of 
		SB3404 Engrossed	- 44 -	LRB104 18864 RPS 32309 b
1the automatic annual increases to a Tier 1 member's retirement 
2annuity and widow's annuity using the formula applicable to 
3the Tier 1 member and the present value of the automatic annual 
4increases to the Tier 1 member's retirement annuity using the 
5formula provided under subsection (b-5) and widow's annuity 
6using the formula provided under subsection (b-6). "Eligible 
7person" means a person who:
8        (1) is a Tier 1 member;
9        (2) has submitted an application for a retirement 
10    annuity under this Article;
11        (3) meets the age and service requirements for 
12    receiving a retirement annuity under this Article;
13        (4) has not received any retirement annuity under this 
14    Article; and
15        (5) has not made the election under Section 9-134.6.
16    "Tier 1 member" means a person who first became a 
17participant under this Article or any reciprocal retirement 
18system or pension fund established under this Code before 
19January 1, 2011.
20    (b) Until June 30, 2028, if an employer elects to provide 
21funding for an accelerated pension benefit program, then as 
22soon as practical after June 30, 2026 or as soon as practical 
23after the employer makes that election, whichever is later, 
24the Fund shall implement an accelerated pension benefit 
25payment option for eligible persons. Upon the request of an 
26eligible person, if the employer has elected to provide 
		SB3404 Engrossed	- 45 -	LRB104 18864 RPS 32309 b
1funding for an accelerated pension benefit program, the Fund 
2shall calculate, using actuarial tables and other assumptions 
3adopted by the Board, an accelerated pension benefit payment 
4amount and shall offer that eligible person the opportunity to 
5irrevocably elect to have his or her automatic annual 
6increases in retirement pension calculated in accordance with 
7the formula provided under subsection (b-5) in exchange for 
8the accelerated pension benefit payment. The election under 
9this subsection must be made before the eligible person 
10receives the first payment of a retirement pension otherwise 
11payable under this Article. An eligible person is limited to 
12one calculation and offer per fiscal year.
13    (b-5) Notwithstanding any other provision of law, the 
14retirement annuity of a person who made the election under 
15subsection (b) shall be subject to annual increases on the 
16January 1 occurring either on or after the attainment of age 67 
17or the first anniversary of the annuity start date, whichever 
18is later. Each annual increase shall be calculated at 1.5% of 
19the originally granted retirement annuity.
20    (b-6) Notwithstanding any other provision of law, a 
21widow's annuity payable to a widow's annuity beneficiary of a 
22person who made the election under subsection (b) shall be 
23subject to annual increases on the January 1 occurring on or 
24after the first anniversary of the commencement of the 
25annuity. Each annual increase shall be calculated at 1.5% of 
26the originally granted widow's annuity.
		SB3404 Engrossed	- 46 -	LRB104 18864 RPS 32309 b
1    (c) If a person who has received an accelerated pension 
2benefit payment returns to active service under this Article, 
3then:
4        (1) the calculation of any future automatic annual 
5    increase in retirement annuity shall be calculated in 
6    accordance with the formula provided under subsection 
7    (b-5); and
8        (2) the accelerated pension benefit payment may not be 
9    repaid to the Fund.
10    (d) As a condition of receiving an accelerated pension 
11benefit payment, the accelerated pension benefit payment must 
12be transferred into a tax qualified retirement plan or 
13account. The accelerated pension benefit payment under this 
14Section may be subject to withholding or payment of applicable 
15taxes, but to the extent permitted by federal law, a person who 
16receives an accelerated pension benefit payment under this 
17Section must direct the Fund to pay all of that payment as a 
18rollover into another retirement plan or account qualified 
19under the Internal Revenue Code of 1986, as amended.
20    (d-5) Before accepting a member's irrevocable election to 
21receive an accelerated pension benefit payment under this 
22Section, the Fund shall verify that it has a sufficient amount 
23of moneys to pay for the accelerated pension benefit payment 
24from the contribution remitted by the employer for that 
25purpose. Moneys remitted to the Fund for the purpose of this 
26program must be kept in a separate account. If the Fund 
		SB3404 Engrossed	- 47 -	LRB104 18864 RPS 32309 b
1determines it does not have sufficient moneys to make the 
2accelerated pension benefit payment, then the Fund shall not 
3accept the member's irrevocable election and shall notify the 
4member of that fact. The member may reapply for the 
5accelerated pension benefit payment after that fiscal year. 
6Elections shall be processed and paid in the order in which 
7complete applications are received by the Fund, subject to the 
8availability of funds. If the Fund accepts the member's 
9irrevocable election to receive an accelerated pension benefit 
10payment under this Section, then the Fund shall transfer, from 
11the moneys remitted to the Fund for that purpose, the amount of 
12the accelerated pension benefit payment into the member's 
13eligible retirement plan or qualified account. If any moneys 
14remain in the account at the end of the fiscal year, the Fund 
15must remit those moneys back to the employer within one month 
16after the end of the fiscal year, unless the employer notifies 
17the Fund at least one month before the end of the fiscal year 
18that the funds shall remain in the account to be used for the 
19accelerated pension benefit program for the subsequent fiscal 
20year.
21    (e) The Board shall adopt any rules, including emergency 
22rules, necessary to implement this Section.
23    (f) No provision of this Section shall be interpreted in a 
24way that would cause the Fund to cease to be a qualified plan 
25under the Internal Revenue Code of 1986.
		SB3404 Engrossed	- 48 -	LRB104 18864 RPS 32309 b
1    (40 ILCS 5/10-104.6 new)
2    Sec. 10-104.6. Accelerated pension benefit payment in lieu 
3of any pension benefit.
4    (a) As used in this Section:
5    "Eligible person" means a person who:
6        (1) has terminated service;
7        (2) has accrued sufficient service credit to be 
8    eligible to receive a retirement annuity under this 
9    Article;
10        (3) has not received any retirement annuity under this 
11    Article; and
12        (4) has not made the election under Section 10-104.7.
13    "Pension benefit" means the benefits under this Article, 
14or Article 1 as it relates to those benefits, including any 
15anticipated annual increases, that an eligible person is 
16entitled to upon attainment of the applicable retirement age. 
17"Pension benefit" also includes applicable survivor's, 
18widow's, or disability benefits.
19    (b) If an employer has elected to provide funding for an 
20accelerated pension benefit program, then as soon as practical 
21after June 30, 2026 or as soon as practical after the employer 
22has made that election, whichever is later, the Fund shall 
23calculate, using actuarial tables and other assumptions 
24adopted by the Board, the present value of pension benefits 
25for each eligible person who requests that information and 
26shall offer each eligible person the opportunity to 
		SB3404 Engrossed	- 49 -	LRB104 18864 RPS 32309 b
1irrevocably elect to receive an amount determined by the Fund 
2to be equal to 60% of the present value of his or her pension 
3benefits in lieu of receiving any pension benefit. The offer 
4shall specify the dollar amount that the eligible person will 
5receive if he or she so elects and shall expire when a 
6subsequent offer is made to an eligible person. An eligible 
7person is limited to one calculation and offer per fiscal 
8year. The Fund shall make a good faith effort to contact every 
9eligible person to notify him or her of the election.
10    Until June 30, 2028, an eligible person may irrevocably 
11elect to receive an accelerated pension benefit payment in the 
12amount that the Fund offers under this subsection in lieu of 
13receiving any pension benefit. A person who elects to receive 
14an accelerated pension benefit payment under this Section may 
15not elect to proceed under the Retirement Systems Reciprocal 
16Act with respect to service under this Article.
17    (c) A person's creditable service under this Article shall 
18be terminated upon the person's receipt of an accelerated 
19pension benefit payment under this Section, and no other 
20benefit shall be paid under this Article based on the 
21terminated creditable service, including any retirement, 
22survivor, or other benefit.
23    (d) If a person who has received an accelerated pension 
24benefit payment under this Section returns to active service 
25under this Article, then:
26        (1) Any benefits under the Fund earned as a result of 
		SB3404 Engrossed	- 50 -	LRB104 18864 RPS 32309 b
1    that return to active service shall be based solely on the 
2    person's creditable service arising from the return to 
3    active service.
4        (2) The accelerated pension benefit payment may not be 
5    repaid to the Fund, and the terminated creditable service 
6    may not under any circumstances be reinstated.
7    (e) As a condition of receiving an accelerated pension 
8benefit payment, the accelerated pension benefit payment must 
9be transferred into a tax qualified retirement plan or 
10account. The accelerated pension benefit payment under this 
11Section may be subject to withholding or payment of applicable 
12taxes, but to the extent permitted by federal law, a person who 
13receives an accelerated pension benefit payment under this 
14Section must direct the Fund to pay all of that payment as a 
15rollover into another retirement plan or account qualified 
16under the Internal Revenue Code of 1986, as amended.
17    (f) Before accepting a member's irrevocable election to 
18receive an accelerated pension benefit payment under this 
19Section, the Fund shall verify that it has a sufficient amount 
20of moneys to pay for the accelerated pension benefit payment 
21from the contribution remitted by the employer for that 
22purpose. Moneys remitted to the Fund for the purpose of the 
23accelerated pension benefit program must be kept in a separate 
24account. If the Fund determines it does not have sufficient 
25moneys to make the accelerated pension benefit payment, then 
26the Fund shall not accept the member's irrevocable election 
		SB3404 Engrossed	- 51 -	LRB104 18864 RPS 32309 b
1and shall notify the member of that fact. The member may 
2reapply for the accelerated pension benefit payment after that 
3fiscal year. Elections shall be processed and paid in the 
4order in which complete applications are received by the Fund, 
5subject to the availability of funds. If the Fund accepts the 
6member's irrevocable election to receive an accelerated 
7pension benefit payment under this Section, then the Fund 
8shall transfer, from the moneys remitted to the Fund for that 
9purpose, the amount of the accelerated pension benefit payment 
10into the member's eligible retirement plan or qualified 
11account. If any moneys remain in the account maintained by the 
12Fund for the purpose of the accelerated pension benefit 
13program at the end of the fiscal year, the Fund must remit 
14those moneys back to the employer within one month after the 
15end of the fiscal year, unless the employer notifies the Fund 
16at least one month before the end of the fiscal year that the 
17funds shall remain in the account to be used for the subsequent 
18fiscal year.
19    (g) The Board shall adopt any rules, including emergency 
20rules, necessary to implement this Section.
21    (h) No provision of this Section shall be interpreted in a 
22way that would cause the Fund to cease to be a qualified plan 
23under the Internal Revenue Code of 1986.
24    (40 ILCS 5/10-104.7 new)
25    Sec. 10-104.7. Accelerated pension benefit payment for a 
		SB3404 Engrossed	- 52 -	LRB104 18864 RPS 32309 b
1reduction in annual retirement annuity and widow's annuity 
2increases.
3    (a) As used in this Section:
4    "Accelerated pension benefit payment" means a lump sum 
5payment equal to 70% of the difference of the present value of 
6the automatic annual increases to a Tier 1 member's retirement 
7annuity and widow's annuity using the formula applicable to 
8the Tier 1 member and the present value of the automatic annual 
9increases to the Tier 1 member's retirement annuity using the 
10formula provided under subsection (b-5) and widow's annuity 
11using the formula provided under subsection (b-6). "Eligible 
12person" means a person who:
13        (1) is a Tier 1 member;
14        (2) has submitted an application for a retirement 
15    annuity under this Article;
16        (3) meets the age and service requirements for 
17    receiving a retirement annuity under this Article;
18        (4) has not received any retirement annuity under this 
19    Article; and
20        (5) has not made the election under Section 10-104.6.
21    "Tier 1 member" means a person who first became a 
22participant under this Article or any reciprocal retirement 
23system or pension fund established under this Code before 
24January 1, 2011.
25    (b) Until June 30, 2028, if an employer elects to provide 
26funding for an accelerated pension benefit program, then as 
		SB3404 Engrossed	- 53 -	LRB104 18864 RPS 32309 b
1soon as practical after June 30, 2026 or as soon as practical 
2after the employer makes that election, whichever is later, 
3the Fund shall implement an accelerated pension benefit 
4payment option for eligible persons. Upon the request of an 
5eligible person, if the employer has elected to provide 
6funding for an accelerated pension benefit program, the Fund 
7shall calculate, using actuarial tables and other assumptions 
8adopted by the Board, an accelerated pension benefit payment 
9amount and shall offer that eligible person the opportunity to 
10irrevocably elect to have his or her automatic annual 
11increases in retirement annuity calculated in accordance with 
12the formula provided under subsection (b-5) in exchange for 
13the accelerated pension benefit payment. The election under 
14this subsection must be made before the eligible person 
15receives the first payment of a retirement pension otherwise 
16payable under this Article. An eligible person is limited to 
17one calculation and offer per fiscal year.
18    (b-5) Notwithstanding any other provision of law, the 
19retirement annuity of a person who made the election under 
20subsection (b) shall be subject to annual increases on the 
21January 1 occurring either on or after the attainment of age 67 
22or the first anniversary of the annuity start date, whichever 
23is later. Each annual increase shall be calculated at 1.5% of 
24the originally granted retirement annuity.
25    (b-6) Notwithstanding any other provision of law, a 
26widow's annuity payable to a widow's annuity beneficiary of a 
		SB3404 Engrossed	- 54 -	LRB104 18864 RPS 32309 b
1person who made the election under subsection (b) shall be 
2subject to annual increases on the January 1 occurring on or 
3after the first anniversary of the commencement of the 
4annuity. Each annual increase shall be calculated at 1.5% of 
5the originally granted widow's annuity.
6    (c) If a person who has received an accelerated pension 
7benefit payment returns to active service under this Article, 
8then:
9        (1) the calculation of any future automatic annual 
10    increase in retirement annuity shall be calculated in 
11    accordance with the formula provided under subsection 
12    (b-5); and
13        (2) the accelerated pension benefit payment may not be 
14    repaid to the Fund.
15    (d) As a condition of receiving an accelerated pension 
16benefit payment, the accelerated pension benefit payment must 
17be transferred into a tax qualified retirement plan or 
18account. The accelerated pension benefit payment under this 
19Section may be subject to withholding or payment of applicable 
20taxes, but to the extent permitted by federal law, a person who 
21receives an accelerated pension benefit payment under this 
22Section must direct the Fund to pay all of that payment as a 
23rollover into another retirement plan or account qualified 
24under the Internal Revenue Code of 1986, as amended.
25    (d-5) Before accepting a member's irrevocable election to 
26receive an accelerated pension benefit payment under this 
		SB3404 Engrossed	- 55 -	LRB104 18864 RPS 32309 b
1Section, the Fund shall verify that it has a sufficient amount 
2of moneys to pay for the accelerated pension benefit payment 
3from the contribution remitted by the employer for that 
4purpose. Moneys remitted to the Fund for the purpose of this 
5program must be kept in a separate account. If the Fund 
6determines it does not have sufficient moneys to make the 
7accelerated pension benefit payment, then the Fund shall not 
8accept the member's irrevocable election and shall notify the 
9member of that fact. The member may reapply for the 
10accelerated pension benefit payment after that fiscal year. 
11Elections shall be processed and paid in the order in which 
12complete applications are received by the Fund, subject to the 
13availability of funds. If the Fund accepts the member's 
14irrevocable election to receive an accelerated pension benefit 
15payment under this Section, then the Fund shall transfer, from 
16the moneys remitted to the Fund for that purpose, the amount of 
17the accelerated pension benefit payment into the member's 
18eligible retirement plan or qualified account. If any moneys 
19remain in the account at the end of the fiscal year, the Fund 
20must remit those moneys back to the employer within one month 
21after the end of the fiscal year, unless the employer notifies 
22the Fund at least one month before the end of the fiscal year 
23that the funds shall remain in the account to be used for the 
24accelerated pension benefit program for the subsequent fiscal 
25year.
26    (e) The Board shall adopt any rules, including emergency 
		SB3404 Engrossed	- 56 -	LRB104 18864 RPS 32309 b
1rules, necessary to implement this Section.
2    (f) No provision of this Section shall be interpreted in a 
3way that would cause the Fund to cease to be a qualified plan 
4under the Internal Revenue Code of 1986.
5    (40 ILCS 5/11-223.5 new)
6    Sec. 11-223.5. Accelerated pension benefit payment in lieu 
7of any pension benefit.
8    (a) As used in this Section:
9    "Eligible person" means a person who:
10        (1) has terminated service;
11        (2) has accrued sufficient service credit to be 
12    eligible to receive a retirement annuity under this 
13    Article;
14        (3) has not received any retirement annuity under this 
15    Article; and
16        (4) has not made the election under Section 11-223.6.
17    "Pension benefit" means the benefits under this Article, 
18or Article 1 as it relates to those benefits, including any 
19anticipated annual increases, that an eligible person is 
20entitled to upon attainment of the applicable retirement age. 
21"Pension benefit" also includes applicable survivor's, 
22widow's, or disability benefits.
23    (b) If the city has elected to provide funding for an 
24accelerated pension benefit program, then as soon as practical 
25after June 30, 2026 or as soon as practical after the city has 
		SB3404 Engrossed	- 57 -	LRB104 18864 RPS 32309 b
1made that election, whichever is later, the Fund shall 
2calculate, using actuarial tables and other assumptions 
3adopted by the Board, the present value of pension benefits 
4for each eligible person who requests that information and 
5shall offer each eligible person the opportunity to 
6irrevocably elect to receive an amount determined by the Fund 
7to be equal to 60% of the present value of his or her pension 
8benefits in lieu of receiving any pension benefit. The offer 
9shall specify the dollar amount that the eligible person will 
10receive if he or she so elects and shall expire when a 
11subsequent offer is made to an eligible person. An eligible 
12person is limited to one calculation and offer per fiscal 
13year. The Fund shall make a good faith effort to contact every 
14eligible person to notify him or her of the election.
15    Until June 30, 2028, an eligible person may irrevocably 
16elect to receive an accelerated pension benefit payment in the 
17amount that the Fund offers under this subsection in lieu of 
18receiving any pension benefit. A person who elects to receive 
19an accelerated pension benefit payment under this Section may 
20not elect to proceed under the Retirement Systems Reciprocal 
21Act with respect to service under this Article.
22    (c) A person's creditable service under this Article shall 
23be terminated upon the person's receipt of an accelerated 
24pension benefit payment under this Section, and no other 
25benefit shall be paid under this Article based on the 
26terminated creditable service, including any retirement, 
		SB3404 Engrossed	- 58 -	LRB104 18864 RPS 32309 b
1survivor, widow, or other benefit.
2    (d) If a person who has received an accelerated pension 
3benefit payment under this Section returns to active service 
4under this Article, then:
5        (1) Any benefits under the Fund earned as a result of 
6    that return to active service shall be based solely on the 
7    person's creditable service arising from the return to 
8    active service.
9        (2) The accelerated pension benefit payment may not be 
10    repaid to the Fund, and the terminated creditable service 
11    may not under any circumstances be reinstated.
12    (e) As a condition of receiving an accelerated pension 
13benefit payment, the accelerated pension benefit payment must 
14be transferred into a tax qualified retirement plan or 
15account. The accelerated pension benefit payment under this 
16Section may be subject to withholding or payment of applicable 
17taxes, but to the extent permitted by federal law, a person who 
18receives an accelerated pension benefit payment under this 
19Section must direct the Fund to pay all of that payment as a 
20rollover into another retirement plan or account qualified 
21under the Internal Revenue Code of 1986, as amended.
22    (f) Before accepting a member's irrevocable election to 
23receive an accelerated pension benefit payment under this 
24Section, the Fund shall verify that it has a sufficient amount 
25of moneys to pay for the accelerated pension benefit payment 
26from the contribution remitted by the city for that purpose. 
		SB3404 Engrossed	- 59 -	LRB104 18864 RPS 32309 b
1Moneys remitted to the Fund for the purpose of the accelerated 
2pension benefit program must be kept in a separate account. If 
3the Fund determines it does not have sufficient moneys to make 
4the accelerated pension benefit payment, then the Fund shall 
5not accept the member's irrevocable election and shall notify 
6the member of that fact. The member may reapply for the 
7accelerated pension benefit payment after that fiscal year. 
8Elections shall be processed and paid in the order in which 
9complete applications are received by the Fund, subject to the 
10availability of funds. If the Fund accepts the member's 
11irrevocable election to receive an accelerated pension benefit 
12payment under this Section, then the Fund shall transfer, from 
13the moneys remitted to the Fund for that purpose, the amount of 
14the accelerated pension benefit payment into the member's 
15eligible retirement plan or qualified account. If any moneys 
16remain in the account maintained by the Fund for the purpose of 
17the accelerated pension benefit program at the end of the 
18fiscal year, the Fund must remit those moneys back to the city 
19within one month after the end of the fiscal year, unless the 
20city notifies the Fund at least one month before the end of the 
21fiscal year that the funds shall remain in the account to be 
22used for the subsequent fiscal year.
23    (g) The Board shall adopt any rules, including emergency 
24rules, necessary to implement this Section.
25    (h) No provision of this Section shall be interpreted in a 
26way that would cause the Fund to cease to be a qualified plan 
		SB3404 Engrossed	- 60 -	LRB104 18864 RPS 32309 b
1under the Internal Revenue Code of 1986.
2    (40 ILCS 5/11-223.6 new)
3    Sec. 11-223.6. Accelerated pension benefit payment for a 
4reduction in annual retirement annuity and widow's annuity 
5increases.
6    (a) As used in this Section:
7    "Accelerated pension benefit payment" means a lump sum 
8payment equal to 70% of the difference of the present value of 
9the automatic annual increases to a Tier 1 member's retirement 
10annuity and widow's annuity using the formula applicable to 
11the Tier 1 member and the present value of the automatic annual 
12increases to the Tier 1 member's retirement annuity using the 
13formula provided under subsection (b-5).
14    "Eligible person" means a person who:
15        (1) is a Tier 1 member;
16        (2) has submitted an application for a retirement 
17    annuity under this Article;
18        (3) meets the age and service requirements for 
19    receiving a retirement annuity under this Article;
20        (4) has not received any retirement annuity under this 
21    Article; and
22        (5) has not made the election under Section 11-223.5.
23    "Tier 1 member" means a person who first became a 
24participant under this Article or any reciprocal retirement 
25system or pension fund established under this Code before 
		SB3404 Engrossed	- 61 -	LRB104 18864 RPS 32309 b
1January 1, 2011.
2    (b) Until June 30, 2028, if the city elects to provide 
3funding for an accelerated pension benefit program, then as 
4soon as practical after June 30, 2026 or as soon as practical 
5after the city makes that election, whichever is later, the 
6Fund shall implement an accelerated pension benefit payment 
7option for eligible persons. Upon the request of an eligible 
8person, if the city has elected to provide funding for an 
9accelerated pension benefit program, the Fund shall calculate, 
10using actuarial tables and other assumptions adopted by the 
11Board, an accelerated pension benefit payment amount and shall 
12offer that eligible person the opportunity to irrevocably 
13elect to have his or her automatic annual increases in 
14retirement pension calculated in accordance with the formula 
15provided under subsection (b-5) in exchange for the 
16accelerated pension benefit payment. The election under this 
17subsection must be made before the eligible person receives 
18the first payment of a retirement pension otherwise payable 
19under this Article. An eligible person is limited to one 
20calculation and offer per fiscal year.
21    (b-5) Notwithstanding any other provision of law, the 
22retirement annuity of a person who made the election under 
23subsection (b) shall be subject to annual increases on the 
24January 1 occurring either on or after the attainment of age 67 
25or the first anniversary of the annuity start date, whichever 
26is later. Each annual increase shall be calculated at 1.5% of 
		SB3404 Engrossed	- 62 -	LRB104 18864 RPS 32309 b
1the originally granted retirement annuity.
2    (c) If a person who has received an accelerated pension 
3benefit payment returns to active service under this Article, 
4then:
5        (1) the calculation of any future automatic annual 
6    increase in retirement annuity shall be calculated in 
7    accordance with the formula provided under subsection 
8    (b-5); and
9        (2) the accelerated pension benefit payment may not be 
10    repaid to the Fund.
11    (d) As a condition of receiving an accelerated pension 
12benefit payment, the accelerated pension benefit payment must 
13be transferred into a tax qualified retirement plan or 
14account. The accelerated pension benefit payment under this 
15Section may be subject to withholding or payment of applicable 
16taxes, but to the extent permitted by federal law, a person who 
17receives an accelerated pension benefit payment under this 
18Section must direct the Fund to pay all of that payment as a 
19rollover into another retirement plan or account qualified 
20under the Internal Revenue Code of 1986, as amended.
21    (d-5) Before accepting a member's irrevocable election to 
22receive an accelerated pension benefit payment under this 
23Section, the Fund shall verify that it has a sufficient amount 
24of moneys to pay for the accelerated pension benefit payment 
25from the contribution remitted by the city for that purpose. 
26Moneys remitted to the Fund for the purpose of this program 
		SB3404 Engrossed	- 63 -	LRB104 18864 RPS 32309 b
1must be kept in a separate account. If the Fund determines it 
2does not have sufficient moneys to make the accelerated 
3pension benefit payment, then the Fund shall not accept the 
4member's irrevocable election and shall notify the member of 
5that fact. The member may reapply for the accelerated pension 
6benefit payment after that fiscal year. Elections shall be 
7processed and paid in the order in which complete applications 
8are received by the Fund, subject to the availability of 
9funds. If the Fund accepts the member's irrevocable election 
10to receive an accelerated pension benefit payment under this 
11Section, then the Fund shall transfer, from the moneys 
12remitted to the Fund for that purpose, the amount of the 
13accelerated pension benefit payment into the member's eligible 
14retirement plan or qualified account. If any moneys remain in 
15the account at the end of the fiscal year, the Fund must remit 
16those moneys back to the city within one month after the end of 
17the fiscal year, unless the city notifies the Fund at least one 
18month before the end of the fiscal year that the funds shall 
19remain in the account to be used for the accelerated pension 
20benefit program for the subsequent fiscal year.
21    (e) The Board shall adopt any rules, including emergency 
22rules, necessary to implement this Section.
23    (f) No provision of this Section shall be interpreted in a 
24way that would cause the Fund to cease to be a qualified plan 
25under the Internal Revenue Code of 1986.
		SB3404 Engrossed	- 64 -	LRB104 18864 RPS 32309 b
1    (40 ILCS 5/12-133.8 new)
2    Sec. 12-133.8. Accelerated pension benefit payment in lieu 
3of any pension benefit.
4    (a) As used in this Section:
5    "Eligible person" means a person who:
6        (1) has terminated service;
7        (2) has accrued sufficient service credit to be 
8    eligible to receive a retirement annuity under this 
9    Article;
10        (3) has not received any retirement annuity under this 
11    Article; and
12        (4) has not made the election under Section 12-133.9.
13    "Pension benefit" means the benefits under this Article, 
14or Article 1 as it relates to those benefits, including any 
15anticipated annual increases, that an eligible person is 
16entitled to upon attainment of the applicable retirement age. 
17"Pension benefit" also includes applicable survivor's, 
18surviving spouse's, or disability benefits.
19    (b) If the city has elected to provide funding for an 
20accelerated pension benefit program, then as soon as practical 
21after June 30, 2026 or as soon as practical after the city has 
22made that election, whichever is later, the Fund shall 
23calculate, using actuarial tables and other assumptions 
24adopted by the Board, the present value of pension benefits 
25for each eligible person who requests that information and 
26shall offer each eligible person the opportunity to 
		SB3404 Engrossed	- 65 -	LRB104 18864 RPS 32309 b
1irrevocably elect to receive an amount determined by the Fund 
2to be equal to 60% of the present value of his or her pension 
3benefits in lieu of receiving any pension benefit. The offer 
4shall specify the dollar amount that the eligible person will 
5receive if he or she so elects and shall expire when a 
6subsequent offer is made to an eligible person. An eligible 
7person is limited to one calculation and offer per fiscal 
8year. The Fund shall make a good faith effort to contact every 
9eligible person to notify him or her of the election.
10    Until June 30, 2028, an eligible person may irrevocably 
11elect to receive an accelerated pension benefit payment in the 
12amount that the Fund offers under this subsection in lieu of 
13receiving any pension benefit. A person who elects to receive 
14an accelerated pension benefit payment under this Section may 
15not elect to proceed under the Retirement Systems Reciprocal 
16Act with respect to service under this Article.
17    (c) A person's creditable service under this Article shall 
18be terminated upon the person's receipt of an accelerated 
19pension benefit payment under this Section, and no other 
20benefit shall be paid under this Article based on the 
21terminated creditable service, including any retirement, 
22survivor, or other benefit.
23    (d) If a person who has received an accelerated pension 
24benefit payment under this Section returns to active service 
25under this Article, then:
26        (1) Any benefits under the Fund earned as a result of 
		SB3404 Engrossed	- 66 -	LRB104 18864 RPS 32309 b
1    that return to active service shall be based solely on the 
2    person's creditable service arising from the return to 
3    active service.
4        (2) The accelerated pension benefit payment may not be 
5    repaid to the Fund, and the terminated creditable service 
6    may not under any circumstances be reinstated.
7    (e) As a condition of receiving an accelerated pension 
8benefit payment, the accelerated pension benefit payment must 
9be transferred into a tax qualified retirement plan or 
10account. The accelerated pension benefit payment under this 
11Section may be subject to withholding or payment of applicable 
12taxes, but to the extent permitted by federal law, a person who 
13receives an accelerated pension benefit payment under this 
14Section must direct the Fund to pay all of that payment as a 
15rollover into another retirement plan or account qualified 
16under the Internal Revenue Code of 1986, as amended.
17    (f) Before accepting a member's irrevocable election to 
18receive an accelerated pension benefit payment under this 
19Section, the Fund shall verify that it has a sufficient amount 
20of moneys to pay for the accelerated pension benefit payment 
21from the contribution remitted by the city for that purpose. 
22Moneys remitted to the Fund for the purpose of the accelerated 
23pension benefit program must be kept in a separate account. If 
24the Fund determines it does not have sufficient moneys to make 
25the accelerated pension benefit payment, then the Fund shall 
26not accept the member's irrevocable election and shall notify 
		SB3404 Engrossed	- 67 -	LRB104 18864 RPS 32309 b
1the member of that fact. The member may reapply for the 
2accelerated pension benefit payment after that fiscal year. 
3Elections shall be processed and paid in the order in which 
4complete applications are received by the Fund, subject to the 
5availability of funds. If the Fund accepts the member's 
6irrevocable election to receive an accelerated pension benefit 
7payment under this Section, then the Fund shall transfer, from 
8the moneys remitted to the Fund for that purpose, the amount of 
9the accelerated pension benefit payment into the member's 
10eligible retirement plan or qualified account. If any moneys 
11remain in the account maintained by the Fund for the purpose of 
12the accelerated pension benefit program at the end of the 
13fiscal year, the Fund must remit those moneys back to the city 
14within one month after the end of the fiscal year, unless the 
15city notifies the Fund at least one month before the end of the 
16fiscal year that the funds shall remain in the account to be 
17used for the subsequent fiscal year.
18    (g) The Board shall adopt any rules, including emergency 
19rules, necessary to implement this Section.
20    (h) No provision of this Section shall be interpreted in a 
21way that would cause the Fund to cease to be a qualified plan 
22under the Internal Revenue Code of 1986.
23    (40 ILCS 5/12-133.9 new)
24    Sec. 12-133.9. Accelerated pension benefit payment for a 
25reduction in annual retirement annuity and surviving spouse's 
		SB3404 Engrossed	- 68 -	LRB104 18864 RPS 32309 b
1annuity increases.
2    (a) As used in this Section:
3    "Accelerated pension benefit payment" means a lump sum 
4payment equal to 70% of the difference of the present value of 
5the automatic annual increases to a Tier 1 member's retirement 
6annuity and surviving spouse's annuity using the formula 
7applicable to the Tier 1 member and the present value of the 
8automatic annual increases to the Tier 1 member's retirement 
9annuity using the formula provided under subsection (b-5) and 
10surviving spouse's annuity using the formula provided under 
11subsection (b-6). "Eligible person" means a person who:
12        (1) is a Tier 1 member;
13        (2) has submitted an application for a retirement 
14    annuity under this Article;
15        (3) meets the age and service requirements for 
16    receiving a retirement annuity under this Article;
17        (4) has not received any retirement annuity under this 
18    Article; and
19        (5) has not made the election under Section 12-133.8.
20    "Tier 1 member" means a person who first became a 
21participant under this Article or any reciprocal retirement 
22system or pension fund established under this Code before 
23January 1, 2011.
24    (b) Until June 30, 2028, if the city elects to provide 
25funding for an accelerated pension benefit program, then as 
26soon as practical after June 30, 2026 or as soon as practical 
		SB3404 Engrossed	- 69 -	LRB104 18864 RPS 32309 b
1after the city makes that election, whichever is later, the 
2Fund shall implement an accelerated pension benefit payment 
3option for eligible persons. Upon the request of an eligible 
4person, if the city has elected to provide funding for an 
5accelerated pension benefit program, the Fund shall calculate, 
6using actuarial tables and other assumptions adopted by the 
7Board, an accelerated pension benefit payment amount and shall 
8offer that eligible person the opportunity to irrevocably 
9elect to have his or her automatic annual increases in 
10retirement pension calculated in accordance with the formula 
11provided under subsection (b-5) in exchange for the 
12accelerated pension benefit payment. The election under this 
13subsection must be made before the eligible person receives 
14the first payment of a retirement pension otherwise payable 
15under this Article. An eligible person is limited to one 
16calculation and offer per fiscal year.
17    (b-5) Notwithstanding any other provision of law, the 
18retirement annuity of a person who made the election under 
19subsection (b) shall be subject to annual increases on the 
20January 1 occurring either on or after the attainment of age 67 
21or the first anniversary of the annuity start date, whichever 
22is later. Each annual increase shall be calculated at 1.5% of 
23the originally granted retirement annuity.
24    (b-6) Notwithstanding any other provision of law, a 
25surviving spouse's annuity payable to a surviving spouse's 
26annuity beneficiary of a person who made the election under 
		SB3404 Engrossed	- 70 -	LRB104 18864 RPS 32309 b
1subsection (b) shall be subject to annual increases on the 
2January 1 occurring on or after the first anniversary of the 
3commencement of the annuity. Each annual increase shall be 
4calculated at 1.5% of the originally granted surviving 
5spouse's annuity.
6    (c) If a person who has received an accelerated pension 
7benefit payment returns to active service under this Article, 
8then:
9        (1) the calculation of any future automatic annual 
10    increase in retirement annuity shall be calculated in 
11    accordance with the formula provided under subsection 
12    (b-5); and
13        (2) the accelerated pension benefit payment may not be 
14    repaid to the Fund.
15    (d) As a condition of receiving an accelerated pension 
16benefit payment, the accelerated pension benefit payment must 
17be transferred into a tax qualified retirement plan or 
18account. The accelerated pension benefit payment under this 
19Section may be subject to withholding or payment of applicable 
20taxes, but to the extent permitted by federal law, a person who 
21receives an accelerated pension benefit payment under this 
22Section must direct the Fund to pay all of that payment as a 
23rollover into another retirement plan or account qualified 
24under the Internal Revenue Code of 1986, as amended.
25    (d-5) Before accepting a member's irrevocable election to 
26receive an accelerated pension benefit payment under this 
		SB3404 Engrossed	- 71 -	LRB104 18864 RPS 32309 b
1Section, the Fund shall verify that it has a sufficient amount 
2of moneys to pay for the accelerated pension benefit payment 
3from the contribution remitted by the city for that purpose. 
4Moneys remitted to the Fund for the purpose of this program 
5must be kept in a separate account. If the Fund determines it 
6does not have sufficient moneys to make the accelerated 
7pension benefit payment, then the Fund shall not accept the 
8member's irrevocable election and shall notify the member of 
9that fact. The member may reapply for the accelerated pension 
10benefit payment after that fiscal year. Elections shall be 
11processed and paid in the order in which complete applications 
12are received by the Fund, subject to the availability of 
13funds. If the Fund accepts the member's irrevocable election 
14to receive an accelerated pension benefit payment under this 
15Section, then the Fund shall transfer, from the moneys 
16remitted to the Fund for that purpose, the amount of the 
17accelerated pension benefit payment into the member's eligible 
18retirement plan or qualified account. If any moneys remain in 
19the account at the end of the fiscal year, the Fund must remit 
20those moneys back to the city within one month after the end of 
21the fiscal year, unless the city notifies the Fund at least one 
22month before the end of the fiscal year that the funds shall 
23remain in the account to be used for the accelerated pension 
24benefit program for the subsequent fiscal year.
25    (e) The Board shall adopt any rules, including emergency 
26rules, necessary to implement this Section.
		SB3404 Engrossed	- 72 -	LRB104 18864 RPS 32309 b
1    (f) No provision of this Section shall be interpreted in a 
2way that would cause the Fund to cease to be a qualified plan 
3under the Internal Revenue Code of 1986.
4    (40 ILCS 5/17-120.5 new)
5    Sec. 17-120.5. Accelerated pension benefit payment in lieu 
6of any pension benefit.
7    (a) As used in this Section:
8    "Eligible person" means a person who:
9        (1) has terminated service;
10        (2) has accrued sufficient service credit to be 
11    eligible to receive a retirement annuity under this 
12    Article;
13        (3) has not received any retirement annuity under this 
14    Article; and
15        (4) has not made the election under Section 17-120.6.
16    "Pension benefit" means the benefits under this Article, 
17or Article 1 as it relates to those benefits, including any 
18anticipated annual increases, that an eligible person is 
19entitled to upon attainment of the applicable retirement age. 
20"Pension benefit" also includes applicable survivor's, 
21surviving spouse's, or disability benefits.
22    (b) If an employer has elected to provide funding for an 
23accelerated pension benefit program, then as soon as practical 
24after June 30, 2026 or as soon as practical after the employer 
25has made that election, whichever is later, the Fund shall 
		SB3404 Engrossed	- 73 -	LRB104 18864 RPS 32309 b
1calculate, using actuarial tables and other assumptions 
2adopted by the Board, the present value of pension benefits 
3for each eligible person who requests that information and 
4shall offer each eligible person the opportunity to 
5irrevocably elect to receive an amount determined by the Fund 
6to be equal to 60% of the present value of his or her pension 
7benefits in lieu of receiving any pension benefit. The offer 
8shall specify the dollar amount that the eligible person will 
9receive if he or she so elects and shall expire when a 
10subsequent offer is made to an eligible person. An eligible 
11person is limited to one calculation and offer per fiscal 
12year. The Fund shall make a good faith effort to contact every 
13eligible person to notify him or her of the election.
14    Until June 30, 2028, an eligible person may irrevocably 
15elect to receive an accelerated pension benefit payment in the 
16amount that the Fund offers under this subsection in lieu of 
17receiving any pension benefit. A person who elects to receive 
18an accelerated pension benefit payment under this Section may 
19not elect to proceed under the Retirement Systems Reciprocal 
20Act with respect to service under this Article.
21    (c) A person's creditable service under this Article shall 
22be terminated upon the person's receipt of an accelerated 
23pension benefit payment under this Section, and no other 
24benefit shall be paid under this Article based on the 
25terminated creditable service, including any retirement, 
26survivor, or other benefit.
		SB3404 Engrossed	- 74 -	LRB104 18864 RPS 32309 b
1    (d) If a person who has received an accelerated pension 
2benefit payment under this Section returns to active service 
3under this Article, then:
4        (1) Any benefits under the Fund earned as a result of 
5    that return to active service shall be based solely on the 
6    person's creditable service arising from the return to 
7    active service.
8        (2) The accelerated pension benefit payment may not be 
9    repaid to the Fund, and the terminated creditable service 
10    may not under any circumstances be reinstated.
11    (e) As a condition of receiving an accelerated pension 
12benefit payment, the accelerated pension benefit payment must 
13be transferred into a tax qualified retirement plan or 
14account. The accelerated pension benefit payment under this 
15Section may be subject to withholding or payment of applicable 
16taxes, but to the extent permitted by federal law, a person who 
17receives an accelerated pension benefit payment under this 
18Section must direct the Fund to pay all of that payment as a 
19rollover into another retirement plan or account qualified 
20under the Internal Revenue Code of 1986, as amended.
21    (f) Before accepting a member's irrevocable election to 
22receive an accelerated pension benefit payment under this 
23Section, the Fund shall verify that it has a sufficient amount 
24of moneys to pay for the accelerated pension benefit payment 
25from the contribution remitted by the employer for that 
26purpose. Moneys remitted to the Fund for the purpose of the 
		SB3404 Engrossed	- 75 -	LRB104 18864 RPS 32309 b
1accelerated pension benefit program must be kept in a separate 
2account. If the Fund determines it does not have sufficient 
3moneys to make the accelerated pension benefit payment, then 
4the Fund shall not accept the member's irrevocable election 
5and shall notify the member of that fact. The member may 
6reapply for the accelerated pension benefit payment after that 
7fiscal year. Elections shall be processed and paid in the 
8order in which complete applications are received by the Fund, 
9subject to the availability of funds. If the Fund accepts the 
10member's irrevocable election to receive an accelerated 
11pension benefit payment under this Section, then the Fund 
12shall transfer, from the moneys remitted to the Fund for that 
13purpose, the amount of the accelerated pension benefit payment 
14into the member's eligible retirement plan or qualified 
15account. If any moneys remain in the account maintained by the 
16Fund for the purpose of the accelerated pension benefit 
17program at the end of the fiscal year, the Fund must remit 
18those moneys back to the employer within one month after the 
19end of the fiscal year, unless the employer notifies the Fund 
20at least one month before the end of the fiscal year that the 
21funds shall remain in the account to be used for the subsequent 
22fiscal year.
23    (g) The Board shall adopt any rules, including emergency 
24rules, necessary to implement this Section.
25    (h) No provision of this Section shall be interpreted in a 
26way that would cause the Fund to cease to be a qualified plan 
		SB3404 Engrossed	- 76 -	LRB104 18864 RPS 32309 b
1under the Internal Revenue Code of 1986.
2    (40 ILCS 5/17-120.6 new)
3    Sec. 17-120.6. Accelerated pension benefit payment for a 
4reduction in annual retirement annuity and surviving spouse's 
5annuity increases.
6    (a) As used in this Section:
7    "Accelerated pension benefit payment" means a lump sum 
8payment equal to 70% of the difference of the present value of 
9the automatic annual increases to a Tier 1 member's retirement 
10annuity and surviving spouse's annuity using the formula 
11applicable to the Tier 1 member and the present value of the 
12automatic annual increases to the Tier 1 member's retirement 
13annuity using the formula provided under subsection (b-5) and 
14surviving spouse's annuity using the formula provided under 
15subsection (b-6). "Eligible person" means a person who:
16        (1) is a Tier 1 member;
17        (2) has submitted an application for a retirement 
18    annuity under this Article;
19        (3) meets the age and service requirements for 
20    receiving a retirement annuity under this Article;
21        (4) has not received any retirement annuity under this 
22    Article; and
23        (5) has not made the election under Section 17-120.5.
24    "Tier 1 member" means a person who first became a 
25participant under this Article or any reciprocal retirement 
		SB3404 Engrossed	- 77 -	LRB104 18864 RPS 32309 b
1system or pension fund established under this Code before 
2January 1, 2011.
3    (b) Until June 30, 2028, if an employer elects to provide 
4funding for an accelerated pension benefit program, then as 
5soon as practical after June 30, 2026 or as soon as practical 
6after the employer makes that election, whichever is later, 
7the Fund shall implement an accelerated pension benefit 
8payment option for eligible persons. Upon the request of an 
9eligible person, if the employer has elected to provide 
10funding for an accelerated pension benefit program, the Fund 
11shall calculate, using actuarial tables and other assumptions 
12adopted by the Board, an accelerated pension benefit payment 
13amount and shall offer that eligible person the opportunity to 
14irrevocably elect to have his or her automatic annual 
15increases in retirement pension calculated in accordance with 
16the formula provided under subsection (b-5) in exchange for 
17the accelerated pension benefit payment. The election under 
18this subsection must be made before the eligible person 
19receives the first payment of a retirement pension otherwise 
20payable under this Article. An eligible person is limited to 
21one calculation and offer per fiscal year.
22    (b-5) Notwithstanding any other provision of law, the 
23retirement annuity of a person who made the election under 
24subsection (b) shall be subject to annual increases on the 
25January 1 occurring either on or after the attainment of age 67 
26or the first anniversary of the annuity start date, whichever 
		SB3404 Engrossed	- 78 -	LRB104 18864 RPS 32309 b
1is later. Each annual increase shall be calculated at 1.5% of 
2the originally granted retirement annuity.
3    (b-6) Notwithstanding any other provision of law, a 
4surviving spouse's annuity payable to a surviving spouse's 
5annuity beneficiary of a person who made the election under 
6subsection (b) shall be subject to annual increases on the 
7January 1 occurring on or after the first anniversary of the 
8commencement of the annuity. Each annual increase shall be 
9calculated at 1.5% of the originally granted surviving 
10spouse's annuity.
11    (c) If a person who has received an accelerated pension 
12benefit payment returns to active service under this Article, 
13then:
14        (1) the calculation of any future automatic annual 
15    increase in retirement annuity shall be calculated in 
16    accordance with the formula provided under subsection 
17    (b-5); and
18        (2) the accelerated pension benefit payment may not be 
19    repaid to the Fund.
20    (d) As a condition of receiving an accelerated pension 
21benefit payment, the accelerated pension benefit payment must 
22be transferred into a tax qualified retirement plan or 
23account. The accelerated pension benefit payment under this 
24Section may be subject to withholding or payment of applicable 
25taxes, but to the extent permitted by federal law, a person who 
26receives an accelerated pension benefit payment under this 
		SB3404 Engrossed	- 79 -	LRB104 18864 RPS 32309 b
1Section must direct the Fund to pay all of that payment as a 
2rollover into another retirement plan or account qualified 
3under the Internal Revenue Code of 1986, as amended.
4    (d-5) Before accepting a member's irrevocable election to 
5receive an accelerated pension benefit payment under this 
6Section, the Fund shall verify that it has a sufficient amount 
7of moneys to pay for the accelerated pension benefit payment 
8from the contribution remitted by the employer for that 
9purpose. Moneys remitted to the Fund for the purpose of this 
10program must be kept in a separate account. If the Fund 
11determines it does not have sufficient moneys to make the 
12accelerated pension benefit payment, then the Fund shall not 
13accept the member's irrevocable election and shall notify the 
14member of that fact. The member may reapply for the 
15accelerated pension benefit payment after that fiscal year. 
16Elections shall be processed and paid in the order in which 
17complete applications are received by the Fund, subject to the 
18availability of funds. If the Fund accepts the member's 
19irrevocable election to receive an accelerated pension benefit 
20payment under this Section, then the Fund shall transfer, from 
21the moneys remitted to the Fund for that purpose, the amount of 
22the accelerated pension benefit payment into the member's 
23eligible retirement plan or qualified account. If any moneys 
24remain in the account at the end of the fiscal year, the Fund 
25must remit those moneys back to the employer within one month 
26after the end of the fiscal year, unless the employer notifies 
		SB3404 Engrossed	- 80 -	LRB104 18864 RPS 32309 b
1the Fund at least one month before the end of the fiscal year 
2that the funds shall remain in the account to be used for the 
3accelerated pension benefit program for the subsequent fiscal 
4year.
5    (e) The Board shall adopt any rules, including emergency 
6rules, necessary to implement this Section.
7    (f) No provision of this Section shall be interpreted in a 
8way that would cause the Fund to cease to be a qualified plan 
9under the Internal Revenue Code of 1986.
10    Section 10. The Counties Code is amended by adding Section
113-14050 as follows:
12    (55 ILCS 5/3-14050 new)
13    Sec. 3-14050. Accelerated pension benefit program; 
14counties with more than 3,000,000 inhabitants.
15    (a) The county board of a county of more than 3,000,000 
16inhabitants may establish an accelerated pension benefit 
17program for the pension funds established under Articles 9 and 
1810 of the Illinois Pension Code. The accelerated pension 
19benefit program shall provide eligible participants the option 
20to elect an accelerated pension benefit payment in accordance 
21with the applicable provisions of Articles 9 and 10 of the 
22Illinois Pension Code authorizing accelerated pension benefit 
23payments.
24    (b) If the county elects to establish the accelerated 
		SB3404 Engrossed	- 81 -	LRB104 18864 RPS 32309 b
1pension benefit program for a fiscal year beginning in 2026, 
2the county must notify the pension fund and remit a 
3contribution to the pension fund in an amount determined by 
4the county at least 30 days before the program is to be 
5implemented. If the county elects to establish the accelerated 
6pension benefit program for a fiscal year beginning in 2027, 
7the county shall remit to the pension fund, not later than 30 
8days prior to the beginning of the fiscal year for which the 
9accelerated pension benefit program is to be made available, a 
10contribution to the pension fund in an amount determined by 
11the county. The contribution shall constitute the total 
12funding available to that pension fund for accelerated pension 
13benefit payments for that fiscal year, and accelerated pension 
14benefit payments shall be issued by the applicable pension 
15fund in accordance with the provisions concerning accelerated 
16pension benefit payment until the contributed amount is 
17exhausted. The contribution for the accelerated pension 
18benefit payments may be made using any lawful funding 
19mechanism authorized under this Code, including, but not 
20limited to:
21        (1) the issuance of bonds authorized under this Code;
22        (2) lawful appropriations from available county 
23    revenues;
24        (3) transfers from lawfully available funds; or
25        (4) any combination thereof.
26    Nothing in this Section shall be construed to expand or 
		SB3404 Engrossed	- 82 -	LRB104 18864 RPS 32309 b
1limit the county's authority to issue bonds beyond those 
2otherwise provided in this Code.
3    At least one month prior to the end of the fiscal year, the 
4county must notify the pension fund if the county would desire 
5any remaining moneys to be rolled over into the next fiscal 
6year for the accelerated pension benefit program. If the 
7county does not notify the pension fund, the moneys shall be 
8remitted back to the county. If an accelerated pension benefit 
9program is not authorized under the applicable Article of the 
10Illinois Pension Code for the following fiscal year, then the 
11pension fund shall remit the moneys back to the county.
12    (c) This Section shall be construed as supplemental to 
13existing county powers and shall not be interpreted to impair 
14any existing contractual obligation or pension benefit 
15protected under the Illinois Constitution.
16    Section 15. The Illinois Municipal Code is amended by
17adding Section 10-4-13 as follows:
18    (65 ILCS 5/10-4-13 new)
19    Sec. 10-4-13. Accelerated pension benefit program.
20    (a) The corporate authorities of a municipality may 
21establish an accelerated pension benefit program for the 
22pension funds established under Article 3, 4, 5, 6, 8, 11, or 
2312 of the Illinois Pension Code to which the municipality 
24contributes. The accelerated pension benefit program shall 
		SB3404 Engrossed	- 83 -	LRB104 18864 RPS 32309 b
1provide eligible participants the option to elect an 
2accelerated pension benefit payment with regard to employees 
3of that municipality who participate in a pension fund 
4established under Article 3, 4, 5, 6, 8, 11, or 12 of the 
5Illinois Pension Code in accordance with the applicable 
6provisions of the Illinois Pension Code authorizing 
7accelerated pension benefit payments.
8    (b) If the municipality elects to establish the 
9accelerated pension benefit program for a fiscal year 
10beginning in 2026, the municipality must notify the pension 
11fund and remit a contribution to the pension fund in an amount 
12determined by the municipality at least 30 days before the 
13program is to be implemented. If the municipality elects to 
14establish the accelerated pension benefit program for a fiscal 
15year beginning in 2027, the municipality shall remit to the 
16pension fund, not later than 30 days prior to the beginning of 
17the fiscal year for which the accelerated pension benefit 
18program is to be made available, a contribution to the pension 
19fund in an amount determined by the municipality. The 
20contribution shall constitute the total funding available to 
21that pension fund for accelerated pension benefit payments for 
22that fiscal year, and accelerated pension benefit payments 
23shall be issued by the applicable pension fund in accordance 
24with the provisions concerning accelerated pension benefit 
25payment until the contributed amount is exhausted. The 
26contribution for the accelerated pension benefit payments may 
		SB3404 Engrossed	- 84 -	LRB104 18864 RPS 32309 b
1be made using any lawful funding mechanism authorized under 
2this Code, including, but not limited to:
3        (1) the issuance of bonds authorized under this Code;
4        (2) lawful appropriations from available municipal 
5    revenues;
6        (3) transfers from lawfully available funds; or
7        (4) any combination thereof.
8    Nothing in this Section shall be construed to expand or 
9limit the municipality's authority to issue bonds beyond those 
10otherwise provided in this Code.
11    At least one month prior to the end of the fiscal year, the 
12municipality must notify the pension fund if it would desire 
13any remaining moneys to be rolled over into the next fiscal 
14year for the accelerated pension benefit program. If the 
15municipality does not notify the pension fund, the moneys 
16shall be remitted back to the municipality. If an accelerated 
17pension benefit program is not authorized under the applicable 
18Article of the Illinois Pension Code for the following fiscal 
19year, then the pension fund shall remit the moneys back to the 
20municipality.
21    (c) This Section shall be construed as supplemental to 
22existing municipal powers and shall not be interpreted to 
23impair any existing contractual obligation or pension benefit 
24protected under the Illinois Constitution.
25    Section 20. The School Code is amended by adding Section
		SB3404 Engrossed	- 85 -	LRB104 18864 RPS 32309 b
134-89 as follows:
2    (105 ILCS 5/34-89 new)
3    Sec. 34-89. Accelerated pension benefit program.
4    (a) The board may establish an accelerated pension benefit 
5program for the pension fund established under Article 17 of 
6the Illinois Pension Code. The accelerated pension benefit 
7program shall provide eligible participants the option to 
8elect an accelerated pension benefit payment with regard to 
9teachers who participate under Article 17 of the Illinois 
10Pension Code in accordance with the applicable provisions of 
11Article 17 of the Illinois Pension Code authorizing 
12accelerated pension benefit payments.
13    (b) If the board elects to establish the accelerated 
14pension benefit program for a fiscal year beginning in 2026, 
15the board must notify the pension fund and remit a 
16contribution to the pension fund in an amount determined by 
17the board at least 30 days before the program is to be 
18implemented. If the board elects to establish the accelerated 
19pension benefit program for a fiscal year beginning in 2027, 
20the board shall remit to the pension fund, not later than 30 
21days prior to the beginning of the fiscal year for which the 
22accelerated pension benefit program is to be made available, a 
23contribution to the pension fund in an amount determined by 
24the board. The contribution shall constitute the total funding 
25available to that pension fund for accelerated pension benefit 
		SB3404 Engrossed	- 86 -	LRB104 18864 RPS 32309 b
1payments for that fiscal year, and accelerated pension benefit 
2payments shall be issued by the applicable pension fund in 
3accordance with the provisions concerning accelerated pension 
4benefit payment until the contributed amount is exhausted. The 
5contribution for the accelerated pension benefit payments may 
6be made using any lawful funding mechanism authorized under 
7this Code, including, but not limited to:
8        (1) the issuance of bonds authorized under this Code;
9        (2) lawful appropriations from available municipal 
10    revenues;
11        (3) transfers from lawfully available funds; or
12        (4) any combination thereof.
13    Nothing in this Section shall be construed to expand or 
14limit the board's authority to issue bonds beyond those 
15otherwise provided in this Code.
16    At least one month prior to the end of the fiscal year, the 
17board must notify the pension fund if it would like any 
18remaining moneys rolled over into the next fiscal year for the 
19accelerated pension benefit program. If the board does not 
20notify the pension fund, the moneys shall be remitted back to 
21the board. If an accelerated pension benefit program is not 
22authorized under Article 17 of the Illinois Pension Code for 
23the following fiscal year, then the pension fund shall remit 
24the moneys back to the board.
25    (c) This Section shall be construed as supplemental to 
26existing board powers and shall not be interpreted to impair 
		SB3404 Engrossed	- 87 -	LRB104 18864 RPS 32309 b
1any existing contractual obligation or pension benefit 
2protected under the Illinois Constitution.
3    Section 90. The State Mandates Act is amended by adding
4Section 8.50 as follows:
5    (30 ILCS 805/8.50 new)
6    Sec. 8.50. Exempt mandate. Notwithstanding Sections 6 and 
78 of this Act, no reimbursement by the State is required for 
8the implementation of any mandate created by this amendatory 
9Act of the 104th General Assembly.
10    Section 99. Effective date. This Act takes effect upon
11becoming law.