Bill
SB 2342
SB 2342 would create a new defined-contribution retirement option for SERS, letting Tier 1/2 employees swap from the DB plan to a DC account, to be implemented by July 1, 2027.
Status and sponsors
- Bill number: SB 2342
- Primary sponsor: Sen. Chris Balkema; cosponsors: Sen. Lakesia Collins, Sen. Neil Anderson, Sen. Jil Tracy
- Introduced: Feb. 7 / Received by Secretary Mar. 12, 2025
- Classification/Subject: Judiciary, Division B; also amends Illinois Pension Code and State Employees Group Insurance Act
- Provided status: Died in Committee (per bill metadata) — procedural history in the record includes committee hearings and calendaring activity
Purpose / intent
- Authorizes and requires the State Employees’ Retirement System of Illinois (SERS) to create and implement a new defined contribution (DC) plan option for state employees, and to make related changes to the State Employees Group Insurance Act. The intent is to offer an alternative to the existing defined benefit (DB) retirement structure and to clarify eligibility/participation rules.
Key provisions
- Plan creation deadline: SERS must prepare and implement a DC plan by July 1, 2027. The plan aggregates State and employee contributions in individual participant accounts for payouts after retirement.
- Participant elections:
- Tier 1 and Tier 2 participants may elect to participate in the DC plan instead of remaining in the DB plan.
- A participant may elect to terminate all participation in the DB plan and have a specified amount credited to their DC account.
- Employees who first become state employees after the effective date are not required to participate in SERS as a condition of employment.
- If a DC-electing employee terminates service and later returns, they may elect whether or not the subsequent service is covered by the DC plan.
- An employee may opt out of the System entirely by written notice in the manner specified by SERS.
- Definitions and benefits: Amendments update the State Employees Group Insurance Act definitions (e.g., “annuitant”) to reflect the DC plan and make conforming changes across statutes (including creation of a new Section 14‑155.5 in the Pension Code).
- Benefit increase language: Any benefit increase that results from the amendatory Act is excluded from the statutory definition of “new benefit increase.”
- Effective date: Provisions are stated to take effect immediately upon enactment.
Who would be affected
- Current state employees covered under SERS (Tier 1 and Tier 2) — they would gain an option to switch from DB to DC or to redirect DB participation to a DC account.
- New state hires after the act’s effective date — not required to participate in SERS as a condition of employment.
- SERS administration and related state human resources and benefits offices — required to design, implement and administer the DC plan and update procedures and forms.
- Retirees and annuitants — statutory definitions and insurance coverage rules would be adjusted to account for DC participants and payouts.
Potential impact and considerations
- Fiscal/actuarial effects are not specified in the text; offering and allowing switches to a DC plan can change long‑term state pension liabilities and cash‑flow needs (potentially reducing long‑term DB obligations but increasing near‑term transition costs).
- Administrative implementation obligations for SERS, including plan design, recordkeeping, employee communications, and regulatory compliance.
- The bill makes broad structural changes that would require additional rulemaking and policy detail (contribution rates, vesting, portability, employer matches, distribution rules are not spelled out in the summary text provided).
Procedural notes
- The record shows multiple committee hearings and actions (committee reports, calendaring), but the bill metadata lists the final status as “Died In Committee.”
Compiled from official sources — confirm details with the bill’s official record.
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