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HB 2855

PEN CD-CHI POLICE&FIRE-TIER 2

104th Regular Session Introduced by Stephanie Kifowit

HB 2855 fixes Tier 2 Chicago police/fire annuity increases to a fixed 3% annually, starting at age 55 (or first anniversary), expanding costs for the city and funds.

Rule 19(a) / Re-referred to Rules Committee
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Bill Summary · HB 2855

Summary — HB 2855 (PEN CD‑CHI POLICE & FIRE — Tier 2 annuity changes)

Status: Introduced (IL House) — Introduced 02/06/2025 by Rep. Stephanie A. Kifowit

Note: the supplied document contains unrelated text from an Arizona bill also numbered HB 2855. The summary below addresses the Illinois pension bill (Chicago Police and Chicago Fire Tier 2 provisions) identified by the title.

Main purpose / intent

HB 2855 amends the Illinois Pension Code to change the rules for automatic annual increases to Tier 2 retirement annuities for Chicago police officers and Chicago firefighters. It moves the initial eligibility for the first annual increase to an earlier age and fixes the annual increase rate at 3%. The bill also changes the reduction rules for early retirement in certain cases and includes a State Mandates Act provision about reimbursement.

Key provisions

  • Alters statutes: amends 40 ILCS 5/5-167.1, 5-238, 6-164, 6-229 and adds 30 ILCS 805/8.49.
  • Initial annual increase timing (Tier 2): the Tier 2 monthly retirement annuity is increased on the January 1 occurring either on or after:
    • attainment of age 55 (changed from age 60), or
    • the first anniversary of the annuity start date, whichever is later.
  • Annual increase amount: each annual increase for Tier 2 annuities is set at a flat 3% of the originally granted retirement annuity (replacing the prior formula that was 3% or one‑half of the annual unadjusted CPI‑U increase, whichever was less).
  • Early retirement reduction: for retiring Tier 2 police or fire members who are under age 55, a reduction factor applies for each year under 55; however, a member retiring after attaining age 50 with 20 or more years of service shall not have their annuity reduced.
  • State Mandates Act: the bill includes a provision that requires implementation without reimbursement (i.e., local governments to absorb costs), per the synopsis.

Who is affected

  • Primary: Tier 2 members of the Chicago Police and Chicago Fire pension systems who retire on or after the bill’s effective date.
  • Secondary: City of Chicago and related municipal pension funds — these changes likely increase long‑term pension liabilities and annual benefit payouts.
  • Fiscal actors: municipal budgets (potentially higher employer costs) and the pension funds’ funding needs.

Potential impact

  • Beneficiaries: Tier 2 retirees will generally receive their first automatic increase earlier (at 55 vs. 60) and thereafter will receive predictable annual 3% compounded increases, improving retirement income compared to a CPI‑tied smaller adjustment.
  • Pension systems / City finances: earlier and fixed 3% increases are likely to raise actuarial liabilities and near‑term contributions; magnitude depends on number of Tier 2 members and timing of retirements.
  • Local fiscal burden: the bill’s State Mandates Act language indicates implementation without state reimbursement, meaning Chicago may bear additional costs.

Procedural / timeline notes

  • Introduced in Illinois House 02/06/2025 (filed 02/05/2025). Further committee referrals and readings will determine progress; consult the Illinois General Assembly docket for current status and any amendments.

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

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