Bill
SB 1725
The bill makes Tier 2 Chicago police/firefighter pensions start automatic increases at age 55 and fixes them at 3% annually, regardless of CPI.
Status: Passed both chambers; Vetoed by Governor on 2025-05-12
Primary sponsor: Sen. Robert F. Martwick
Statutory changes: Amends provisions in the Illinois Pension Code (notably 40 ILCS 5/5-167.1, 5-238, 6-164, 6-229) and amends the State Mandates Act.
Note: the provided document also includes unrelated Arizona statutory text (a fentanyl-related amendment). This summary focuses on the Illinois pension measure titled “PEN CD‑CHI POLICE & FIRE — TIER 2.”
Purpose / intent
- Modify Tier 2 retirement benefit rules for Chicago police officers and firefighters to (1) make automatic annual annuity increases start earlier and (2) fix the annual increase at a 3% rate, rather than indexing to the Consumer Price Index (CPI) or using a lower CPI-derived adjustment.
Key provisions
- Start of automatic increases: The Tier 2 monthly retirement annuity will be increased on the January 1 that occurs either on or after (i) attainment of age 55 (previously age 60) or (ii) the first anniversary of the annuity start date, whichever is later.
- Annual increase rate: Each subsequent annual increase will be calculated at a fixed 3% of the originally granted retirement annuity. (Previously the increase was 3% or one-half the annual unadjusted percentage increase in the CPI‑U, whichever was less.)
- Early-retirement reduction factor: The bill clarifies/conforms the reduction-factor rules so that a Tier 2 policeman or fireman retiring after attaining age 50 with 20 or more years of service shall not have the retirement annuity reduced for being under age 55.
- Conforming and technical amendments: Adjusts other statutory language in the Chicago Police and Firefighter articles to reflect the new rules.
- State Mandates Act: Amends the Act to specify that implementation is required without state reimbursement (i.e., local/city costs are not reimbursed by the State under the Mandates Act).
Who is affected
- Primary: Tier 2 members of the Chicago Police Pension Fund and Chicago Firefighters’ Pension Fund (current and future retirees eligible for Tier 2).
- Secondary: City of Chicago (employer contributions and fund liabilities) and potentially State/local fiscal schedules if the mandate language influences cost allocation.
Potential impacts
- Benefit levels: Members will generally receive earlier and predictably larger automatic increases (beginning at age 55 instead of 60, fixed at 3% annually), which increases lifetime benefit payouts compared with the prior CPI-linked approach in many years.
- Fiscal effect: Likely increases actuarial liabilities for the Chicago pension funds and could raise required city contribution levels over time; magnitude depends on demographics, timing of retirements, and future CPI behavior. The bill’s State Mandates language removes a statutory requirement for state reimbursement, placing cost responsibility on the city/local actors.
- Administrative: Pension administrators must apply the earlier start date, fixed 3% calculation, and the clarified reduction-factor rule.
Legislative history (selected)
- Introduced: 2025-02-05 (Sen. Robert F. Martwick). Referred to Assignments.
- Passed both chambers and transmitted to Governor. Transmitted to Senate: 2025-05-01.
- Vetoed by Governor: 2025-05-12.
Companion: HB 230.
Compiled from official sources — confirm details with the bill’s official record.
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