PEN CD-SURS-RETURN TO SERVICE

104th Regular Session Introduced by Chapin Rose

SB 1374 cuts employer contributions for rehiring retired SURS annuitants from 12x the monthly annuity (or $100k) to 3x the annuity (or $100k), retroactive to 1/1/2021.

Referred to Assignments

Purpose / Intent

SB 1374 changes employer contribution requirements when a retired SURS annuitant (an “affected annuitant”) is re‑employed during an academic year. The bill reduces the additional employer contribution that public higher‑education employers must pay to the retirement system when they hire or rehire retired annuitants.

Key provisions

Employer contribution formula revised: For employment of an affected annuitant in an academic year, the required employer contribution is changed from the lesser of

(current law) 12 times the annuitant’s gross monthly retirement annuity for the month that includes the first paid day of employment, or
$100,000 to
(as amended by this bill) 3 times that gross monthly annuity, or
$100,000, whichever is less. (I.e., multiplier reduced from 12 to 3; the $100,000 cap remains.)

Retroactive application: The change to the required employer contribution applies to employer contributions required on or after January 1, 2021.

Other employer obligations remain: Employers must still notify the System within 60 days of employing an annuitant, provide employment/compensation details, and determine whether a rehired person is an “affected annuitant.”

Existing exclusions preserved: Compensation paid solely from federal, corporate, foundation, trust funds or certain state grant funds that identify a principal investigator by name remains excluded from the affected‑annuitant determination and contribution requirement.

Allocation among multiple employers: If an affected annuitant works for more than one employer in an academic year, the required contribution is divided among employers in proportion to their share of total compensation (existing rule preserved).

Who is affected

Employers covered by SURS (public universities and other System employers) that hire or rehire retired annuitants.

Retired SURS members who return to work as annuitants (the change affects employer cost, not the annuitant’s benefit).

The State Universities Retirement System (administrative processing of notices and contributions).

Potential impact

Fiscal: Lowers the additional employer contribution obligation where the multiplier would have produced a higher required payment; likely reduces employer costs for rehiring annuitants and could reduce inflows to SURS that otherwise would have been collected under the higher multiplier. The bill’s retroactive application to contributions due on or after Jan 1, 2021 could affect contribution reconciliation for past periods.

Administrative: Employers and the System must continue existing notification and certification processes; the System may need to adjust contribution calculations and retroactive accounting.

Procedural / Timeline notes

Introduced by Sen. Chapin Rose (filed Jan 29, 2025).

Referred to Assignments (per bill header/status). Companion bill: HB 1055.

Effective date provision in the draft indicates immediate effect (and explicit application to employer contributions on/after Jan 1, 2021).

For the amended statutory provision, see 40 ILCS 5/15‑139.5 (proposed changes reduce the multiplier used to compute the employer contribution).

Bill