House Sponsors: HARTKE-KLINGLER AND FOWLER. Short description: PEN CD-ART 14 & 16-EARLY RETMT Synopsis of Bill as introduced: Amends the State Employee and Downstate Teacher Articles of the Pension Code. Provides an early retirement incentive program for certain State employees who retire between January 1, 2001 and July 1, 2001 (in certain cases, as late as January 1, 2002). Requires the Pension Laws Commission to report on the net savings or cost of the program. Requires the State to fund the program through separate contributions made in fiscal years 2002 through 2008. Amends the State Pension Funds Continuing Appropriation Act to guarantee those contributions through continuing appropriations. Amends the State Finance Act to restrict personal service contracts with these early retirees. Requires the lump sum payment for unused vacation and sick leave to be separate from the final payment of salary and requires the use of specified withholding rates. Provides that a lump sum payment payable to a person who terminates State service during June of 2001 may be paid during July or August of 2001 from either a fiscal year 2001 or fiscal year 2002 appropriation. Provides that in fiscal year 2003 the General Assembly shall not fund the vacated positions at more than 85% of the rate of compensation payable at the time of retirement. Effective immediately. PENSION NOTE (Pension Laws Commission) There are approximately 17,800 members eligible to participate in the ERI. Assuming 6,200 (35%) retire early, it is estimated the accrued liability of SERS would increase by approximatley $537.2 million. Employee contributions are expected to total $33.2 million, and therefore the increase in accrued liability the State would be required to amortize is estimated to be $503.9 million. PENSION NOTE, REVISED (Pension Laws Commission) According to the Commission's actuary, there are approximately 20,275 members of SERS who would be eligible to participate in the ERI. Assuming 7,100 (approximately 35%) members retire early, it is estimated the accrued liability of SERS would in- crease by $620.3 million. Required employee contributions are expected to total $36.1 million. Therefore the increase in accrued liability the State would be required to amortize is estimated to be $584.2 million. HB 3101 requires the State to contribute $90 million to SERS and $1 million to TRS in FY 2002 to amortize the increase in accrued liability. The bill requires the remainder of the accrued liability to be amortized in 6 equal annual install- ments, beginning in FY 2003. The Commission's actuary estimates the annual payments to be $108.5 million. Last action on Bill: SESSION SINE DIE Last action date: 01-01-09 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 0 SENATE - 0 END OF INQUIRY Full Text Bill Status