HB6150 97TH GENERAL ASSEMBLY

LRB097 21046 JDS 68366 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB6150

Introduced , by Rep. Daniel Biss

SYNOPSIS AS INTRODUCED:

40 ILCS 5/2-117.4 new
40 ILCS 5/3-111.5 new
40 ILCS 5/4-109.5 new
40 ILCS 5/5-129.5 new
40 ILCS 5/6-124.5 new
40 ILCS 5/7-140.5 new
40 ILCS 5/8-137.5 new
40 ILCS 5/9-133.5 new
40 ILCS 5/10-104.6 new
40 ILCS 5/11-133.7 new
40 ILCS 5/12-129.5 new
40 ILCS 5/13-316 new
40 ILCS 5/14-108.7 new
40 ILCS 5/15-135.5 new
40 ILCS 5/16-133.8 new
40 ILCS 5/17-115.5 new
40 ILCS 5/18-123.5 new

Amends the Illinois Pension Code. Establishes a program under which certain retirement system participants may elect to receive a cash payment in exchange for agreeing to an increase in the required retirement age or agreeing to give up future automatic annual benefit increases. Effective immediately.

FISCAL NOTE ACT MAY APPLY

PENSION IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning public employee benefits.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Pension Code is amended by adding Sections 2-117.4, 3-111.5, 4-109.5, 5-129.5, 6-124.5, 7-140.5, 8-137.5, 9-133.5, 10-104.6, 11-133.7, 12-129.5, 13-316, 14-108.7, 15-135.5, 16-133.8, 17-115.5, and 18-123.5 as follows:

(40 ILCS 5/2-117.4 new)

Sec. 2-117.4. Benefit buyout program.

(a) The System shall administer a benefit buyout program in accordance with this Section. Under the program, the System will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The System shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the System may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The System shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the System, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the System prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person who first became a participant of this System before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person who first became a participant of this System before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article, including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivor's annuity subject to automatic annual increases under this Article may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in survivor's annuity that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the System shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the System to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The System shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the System. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the System.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the System, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the System before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the System in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the System and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The System shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the System, and the anticipated savings to the System resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/3-111.5 new)

Sec. 3-111.5. Benefit buyout program.

(a) The Public Pension Division of the Department of Insurance shall administer a benefit buyout program in accordance with this Section for all police pension funds under this Article. Each fund shall cooperate with the Division in the administration of the program. Under the program, the fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

In accordance with the recommendations of the Division, the fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on the fund's available administrative and financial resources, the Division may adopt for each fund reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Division, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person who (i) is not a participant in the self-managed plan under Section 3-109.3, (ii) first became a police officer under this Article before January 1, 2011, and (iii) is vested in the right to receive a retirement pension under this Article but has not yet begun to receive that pension may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement pension under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person who (i) is not a participant in the self-managed plan under Section 3-109.3, (ii) first became a police officer under this Article before January 1, 2011, and (iii) is vested in the right to receive a retirement pension under this Article but has not yet begun to receive that pension may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement pension under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement pension under this Article may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article, including but not limited to automatic annual increases in retirement pension and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivor's pension subject to automatic annual increases under this Article may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to give up all future automatic annual increases that are provided for that pension under this Article.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in survivor's pension that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person with respect to that survivor's pension.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated in a manner determined by the Division in accordance with this Section. The Division may, but need not, provide assistance to one or more funds under this Article in calculating benefit buyout payments under the program.

The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables approved by the Division. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. The method of calculating the present value of affected benefits shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that are used in determining the funding requirements or actuarial liabilities of the fund.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Division, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the fund, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) Each fund shall report on the benefit buyout program to the Division by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Division for the fund, and the anticipated savings to the fund resulting from the program. The report shall not include any personally identifiable information. The Division shall supervise the reporting required under this Section and shall compile information from all of the funds under this Article into a single report to the Governor and the General Assembly by May 1, 2015.

(40 ILCS 5/4-109.5 new)

Sec. 4-109.5. Benefit buyout program.

(a) The Public Pension Division of the Department of Insurance shall administer a benefit buyout program in accordance with this Section for all firefighters' pension funds under this Article. Each fund shall cooperate with the Division in the administration of the program. Under the program, the fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

In accordance with the recommendations of the Division, the fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on the fund's available administrative and financial resources, the Division may adopt for each fund reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Division, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person who first became a firefighter under this Article before January 1, 2011 and who is vested in the right to receive a retirement pension under this Article but has not yet begun to receive that pension may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement pension under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person who first became a firefighter under this Article before January 1, 2011 and who is vested in the right to receive a retirement pension under this Article but has not yet begun to receive that pension may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement pension under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement pension under this Article may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article, including but not limited to automatic annual increases in retirement pension and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivor's pension subject to automatic annual increases under this Article may voluntarily elect to receive a benefit buyout payment from the fund in exchange for agreeing to give up all future automatic annual increases that are provided for that pension under this Article.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in survivor's pension that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person with respect to that survivor's pension.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated in a manner determined by the Division in accordance with this Section. The Division may, but need not, provide assistance to one or more funds under this Article in calculating benefit buyout payments under the program.

The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables approved by the Division. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. The method of calculating the present value of affected benefits shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that are used in determining the funding requirements or actuarial liabilities of the fund.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Division, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the fund, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) Each fund shall report on the benefit buyout program to the Division by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Division for the fund, and the anticipated savings to the fund resulting from the program. The report shall not include any personally identifiable information. The Division shall supervise the reporting required under this Section and shall compile information from all of the funds under this Article into a single report to the Governor and the General Assembly by May 1, 2015.

(40 ILCS 5/5-129.5 new)

Sec. 5-129.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person who first became a participant of this Fund before January 1, 2011 and who is vested in the right to receive a retirement retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person who first became a participant of this Fund before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article, including but not limited to automatic annual increases in age and service or minimum annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's annuity subject to automatic annual increases under this Article may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in widow's annuity that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/6-124.5 new)

Sec. 6-124.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person who first became a participant of this Fund before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person who first became a participant of this Fund before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article, including but not limited to automatic annual increases in age and service or minimum annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's annuity subject to automatic annual increases under this Article may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in widow's annuity that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/7-140.5 new)

Sec. 7-140.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a surviving spouse annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160) with respect to that annuity.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a surviving spouse annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/8-137.5 new)

Sec. 8-137.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/9-133.5 new)

Sec. 9-133.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/10-104.6 new)

Sec. 10-104.6. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/11-133.7 new)

Sec. 11-133.7. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a widow's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/12-129.5 new)

Sec. 12-129.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's or surviving spouse's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a widow's or surviving spouse's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/13-316 new)

Sec. 13-316. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a surviving spouse's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a surviving spouse's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/14-108.7 new)

Sec. 14-108.7. Benefit buyout program.

(a) The System shall administer a benefit buyout program in accordance with this Section. Under the program, the System will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The System shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the System may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The System shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the System, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the System prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under the Rule of 85 or any set of retirement criteria that does not include a minimum retirement age (including retirement at any age with 35 years of service), other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under the Rule of 85 or any set of retirement criteria that does not include a minimum retirement age (including retirement at any age with 35 years of service), other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a widow's or survivor's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160) with respect to that annuity.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election (i) all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election and (ii) all provisions concerning the Rule of 85 or retirement at any age with 35 years of service shall cease to apply.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a widow's or survivor's annuity under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that annuity.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and to any other persons who may be entitled to all or a portion of that annuity upon the survivor's death or remarriage.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the System shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the System to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The System shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the System. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the System.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the System, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the System before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the System in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the System and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The System shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the System, and the anticipated savings to the System resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/15-135.5 new)

Sec. 15-135.5. Benefit buyout program.

(a) The System shall administer a benefit buyout program in accordance with this Section. Under the program, the System will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The System shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the System may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The System shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the System, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person who participates in the self-managed plan under Section 15-158.2 is ineligible to make an election under this Section.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the System prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age (including retirement at any age with 30 years of service), other than a retirement benefit based on disability, and is not eligible to avoid any reduction in retirement annuity due to age by having at least 30 years of service or meeting the Rule of 85. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age (including retirement at any age with 30 years of service), other than a retirement benefit based on disability, and is not eligible to avoid any reduction in retirement annuity due to age by having at least 30 years of service or meeting the Rule of 85. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivors insurance benefit under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160) with respect to that benefit or annuity.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election (i) all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election and (ii) all provisions concerning retirement at any age with 30 years of service and avoidance of the reduction in retirement annuity because of age provided for certain persons who have at least 30 years of service shall cease to apply.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a survivors insurance benefit under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that benefit or annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the System shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the System to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The System shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the System. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the System.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the System, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the System before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the System in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the System and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The System shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the System, and the anticipated savings to the System resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/16-133.8 new)

Sec. 16-133.8. Benefit buyout program.

(a) The System shall administer a benefit buyout program in accordance with this Section. Under the program, the System will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The System shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the System may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The System shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the System, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the System prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability, and is not eligible to avoid any reduction in retirement annuity due to age by having at least 35 years of service or meeting the Rule of 85. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability, and is not eligible to avoid any reduction in retirement annuity due to age by having at least 35 years of service or meeting the Rule of 85. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article (or under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivors' benefit under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160) with respect to that benefit or annuity.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election (i) all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election and (ii) all provisions concerning avoidance of the reduction in retirement annuity because of age provided for certain persons who have 35 years of service or meet the Rule of 85 shall cease to apply.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a survivors' benefit under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that benefit or annuity.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the System shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the System to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The System shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the System. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the System.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the System, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the System before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the System in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the System and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The System shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the System, and the anticipated savings to the System resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/17-115.5 new)

Sec. 17-115.5. Benefit buyout program.

(a) The Fund shall administer a benefit buyout program in accordance with this Section. Under the program, the Fund will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The Fund shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the Fund may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The Fund shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the Fund, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the Fund prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person not subject to Section 1-160 who is vested in the right to receive a service retirement pension under this Article but has not yet begun to receive that pension may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement pension under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person not subject to Section 1-160 who is vested in the right to receive a service retirement pension under this Article but has not yet begun to receive that pension may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement pension under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a service retirement pension under this Article (or a retirement annuity under Section 1-160 with respect to service under this Article) may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article (or under Section 1-160 with respect to service under this Article), including but not limited to automatic annual increases in service retirement pension or retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivor's pension under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article) that is subject to automatic annual increases may voluntarily elect to receive a benefit buyout payment from the Fund in exchange for agreeing to give up all future automatic annual increases that are provided for that pension or annuity under this Article (or under Section 1-160).

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article (or under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160 with respect to service under this Article) shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in a survivor's pension under this Article (or a survivor's annuity under Section 1-160 with respect to service under this Article), beginning on the date of the election all references to such increases in this Article (or under Section 1-160) shall cease to apply to that person with respect to that pension or annuity.

The provisions of this Section control over any contrary provision of this Article or Section 1-160 that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the Fund shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the Fund to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The Fund shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the Fund. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the Fund.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the Fund, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the Fund before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the Fund in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the Fund and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The Fund shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the Fund, and the anticipated savings to the Fund resulting from the program. The report shall not include any personally identifiable information.

(40 ILCS 5/18-123.5 new)

Sec. 18-123.5. Benefit buyout program.

(a) The System shall administer a benefit buyout program in accordance with this Section. Under the program, the System will pay a benefit buyout payment to certain persons in exchange for voluntarily making an irrevocable election to accept an increase in the required retirement age or to give up certain automatic annual increases. The benefit buyout payment is a cash payment payable to the person who makes an election under this Section. A person shall not be required to participate in the program or to make any election under this Section.

The System shall take any actions necessary to ensure that it (i) has in place the necessary administrative and data processing ability to make the calculations and actuarial determinations and to provide the counseling required under this Section and (ii) has available the liquid assets anticipated to be necessary to make the benefit buyout payments promptly when elections are made. To avoid unreasonable strains on its available administrative and financial resources, the System may adopt reasonable restrictions on the number of persons who may participate in the program or the total amount of money available for making benefit buyout payments. If such restrictions are adopted, the right of an eligible person to participate in the program shall be determined by the order in which his or her election is made.

The System shall inform potentially eligible persons about the availability and operation of the program and any restrictions on participation in the program in a factual and objective manner that does not attempt to influence individual decisions.

(b) Subject to any restrictions adopted by the System, elections under this Section may be made at any time during calendar year 2014. All elections made under this Section must be in writing and are irrevocable.

A person against whom there is a QILDRO in effect is ineligible to make an election under this Section, unless all alternate payees under the QILDRO have irrevocably consented in writing to the election and that consent has been filed with the System prior to making the election. Benefits payable in whole or in part to an alternate payee under a QILDRO are subject to any applicable election under this Section that (i) the alternate payee has consented to or (ii) occurred before the QILDRO took effect.

A person shall not make an election under both subsection (b-1) and subsection (b-2), but a person who makes an election under either of those subsections may also make an election under subsection (b-3). Those elections need not be made at the same time. An eligible person may make an election under subsection (b-3) without making an election under subsection (b-1) or (b-2).

(b-1) An eligible person who first became a participant of this System before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 2 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-2) An eligible person who first became a participant of this System before January 1, 2011 and who is vested in the right to receive a retirement annuity under this Article but has not yet begun to receive that annuity may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to accept an increase of 7 years in whichever of the retirement ages required under this Article applies at the time of retirement. A person who makes this election to increase the required retirement age is not eligible to qualify for a retirement annuity under any set of retirement criteria that does not include a minimum retirement age, other than a retirement benefit based on disability. A person who already meets the lowest applicable increased age requirement is not eligible to make an election under this subsection.

(b-3) An eligible person who receives or is vested in the right to receive a retirement annuity under this Article may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for under this Article, including but not limited to automatic annual increases in retirement annuity and in any survivor and disability benefits that may become payable.

(b-4) An eligible person who receives a survivor's annuity subject to automatic annual increases under this Article may voluntarily elect to receive a benefit buyout payment from the System in exchange for agreeing to give up all future automatic annual increases that are provided for that annuity under this Article.

(c) With respect to a person who makes an election under subsection (b-1) or subsection (b-2) to increase the required retirement age, beginning on the date of the election all provisions in this Article (and Article 20 with respect to service under this Article) concerning a retirement age requirement shall be deemed to mean the retirement age requirement as increased by the election.

With respect to a person who makes an election under subsection (b-3) to give up all future automatic annual increases that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person and that person's eligible survivors.

With respect to a person who makes an election under subsection (b-4) to give up all future automatic annual increases in survivor's annuity that are provided under this Article, beginning on the date of the election all references to such increases in this Article shall cease to apply to that person with respect to that annuity.

The provisions of this Section control over any contrary provision of this Article that exists on the effective date of this Section.

(d) The benefit buyout payment shall be calculated individually for each person making an election under this Section, as of the time of the election, using actuarial assumptions and tables adopted by the Board. The benefit buyout payment shall be equal to 1/3 of the amount by which the present value of all of the unreduced benefits to be affected by the election exceeds the present value of those benefits as reduced by the election. In calculating the present value of affected benefits, the System shall consider anticipated future benefit accruals, not just benefit amounts already earned at the time of the election, and where appropriate shall use the same actuarially assumed rates of salary increase, continued employment, and other relevant factors that it uses in determining its funding requirements or actuarial liabilities.

(e) To the extent permitted by federal law, a person entitled to receive a benefit buyout payment under this Section may direct the System to pay all or a portion of that payment (i) as an immediate cash payment, (ii) in a series of annual payments over a period of up to 5 years, without interest, or (iii) as a rollover into another retirement plan or account qualified under the Internal Revenue Code of 1986, as amended. The System shall withhold from the benefit buyout payment any amounts required by law to be withheld for tax purposes.

(f) If a person terminates employment and applies for a refund of employee contributions within 5 years after receiving a benefit buyout payment under this Section, the amount of the benefit buyout payment shall be deducted from the refund of employee contributions and retained by the System. If the benefit buyout payment was more than the amount of the refund, the excess need not be repaid to the System.

(g) Upon request, a person shall be provided with written information prepared or prescribed by the System, describing the consequences of making an election under this Section. The person shall be offered an opportunity to receive counseling from the System before making the election. This counseling may consist of video materials, group presentations, individual consultation with an employee or authorized representative of the System in person or by telephone or other electronic means, or any combination of those methods.

The information and counseling shall specifically identify the anticipated effects of an election on benefits under the System and the Retirement Systems Reciprocal Act, describe benefit buyout payment options, and provide general information about tax withholding, but shall not include specific tax advice.

(h) The System shall report on the benefit buyout program to the Governor and the General Assembly by March 1, 2015. The report shall indicate the number and percentage of eligible persons who made an election, the types of elections made, the total amount of benefit buyout payments paid, any restrictions on the number of participants or total amount of benefit buyout payments adopted by the System, and the anticipated savings to the System resulting from the program. The report shall not include any personally identifiable information.

Section 99. Effective date. This Act takes effect upon becoming law.