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SB 1585

PEN CD-ARTS 4 & 6-TRANSFER

104th Regular Session Introduced by Willie Preston

Six-month window to mutually transfer creditable service between Article 4 firefighter funds and Chicago's Article 6 fund, with required payments and actuarial safeguards.

Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 1585

Summary — SB 1585 (PEN CD‑ARTS 4 & 6 — Transfer of Creditable Service)

Note: Multiple draft texts were provided from different states. This summary focuses on the Illinois measure titled “PEN CD‑ARTS 4 & 6‑TRANSFER” (amendments to the Illinois Pension Code) — the provisions that address transfers of firefighter pension service between Article 4 (municipal firefighter pension funds) and Article 6 (Firemen’s Annuity and Benefit Fund of Chicago).

Main purpose

To permit, for a limited window, transfers of creditable service between municipal firefighters’ pension funds (Article 4) and the Firemen’s Annuity and Benefit Fund of Chicago (Article 6), revise related payment rules, and authorize transfers in both directions while protecting pension fund actuarial status.

Key provisions

  • Adds new sections (40 ILCS 5/4‑108.9 and 40 ILCS 5/6‑227.2) and amends existing sections (40 ILCS 5/4‑108.6 and 40 ILCS 5/6‑227).
  • Temporary transfer window: authorizes transfers only until 6 months after the amendatory Act’s effective date.
  • Mutual transfers: permits active members of either Article 4 funds or the Article 6 (Chicago) fund to apply to transfer previously accumulated creditable service to the other fund.
  • Payment requirement for transfer: transfer occurs only upon payment to the receiving fund of an amount equal to
    • accumulated employee contributions on the fund’s books for that service,
    • an equivalent employer contribution amount, and
    • any interest required to reinstate service (payment schedule may be allowed within five years).
  • Receiving fund’s cost determination: the receiving fund must calculate the firefighter’s required payment using individual factors (service, age, salary history) and fund-level actuarial factors, ensuring the transfer does not cause a “significant increase” in the fund’s unfunded actuarial accrued liability (UAAL) as measured in the most recent valuation.
  • Reinstatement: members who previously left a fund and took refunds may reinstate by repaying refunds plus interest at the actuarially assumed rate (compounded annually).
  • Removes a prior statutory restriction on the amount of creditable service that could be transferred (per the draft).
  • State Mandates Act: amended to provide for implementation without reimbursement.
  • Effective timing: the bill indicates immediate effect (or effective upon enactment, per statutory language).

Who is affected

  • Active municipal firefighters (Article 4) and active members of the Firemen’s Annuity and Benefit Fund of Chicago (Article 6) who wish to consolidate or move creditable service.
  • Local pension funds, the Chicago fund, employers (municipalities), and actuaries responsible for valuations and payment calculations.
  • Potentially municipal budgets and pension fund liabilities depending on transfers and payments.

Fiscal/administrative impact

  • Designed to be actuarially neutral — receiving funds must set transfer payments to avoid materially increasing UAAL. Nevertheless, administrative burden on funds to calculate individualized transfer costs and process payments.
  • Potential short‑term cash flows between funds as payments are remitted.
  • State Mandates Act language removes state reimbursement obligation for local costs.

Procedural/status (select)

  • Introduced in the 104th General Assembly (Illinois) and referred to Assignments / Pensions (LRB draft indicates introduction 2/4/2025).
  • Draft text and committee language establish the six‑month transfer window and new statutory sections.

If you want, I can:
- Draft a plain‑language FAQ for affected firefighters and employers.
- Extract the exact statutory language changes for each Illinois Pension Code section referenced.

Compiled from official sources — confirm details with the bill’s official record.

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