Illinois House Bill HB1636

Illinois 2025-2026 Regular Session

• Introduced: 1/23/25
• Refer: 1/28/25

Caption

PEN CD-SERS & TRS-DC PLAN

Summary

HB1636 would amend the Illinois Pension Code to require the State Employees’ Retirement System (SERS) and the Downstate Teachers’ Retirement System (TRS) to create and offer a voluntary defined contribution plan for active members. Under the plan, participating employees could make optional contributions into individual accounts, and the employer and the State would each deposit an amount equal to the employee’s prior-year contributions, with an additional State contribution when the State is the actual employer. The bill also allows investment options within the accounts, bars withdrawals while a member remains active in the system, and directs the systems to operate the plan in compliance with applicable state and federal law using generally accepted practices. The bill also makes conforming changes to the contribution provisions in both pension articles so that, in years when the new defined contribution plan is funded, the required State contribution to the existing defined benefit systems includes the amounts needed for the new accounts. It further states that any benefit increase resulting from the act is not treated as a “new benefit increase” under the pension code’s funding rules, and it adds a State Mandates Act provision saying implementation is required without reimbursement. In practical terms, the measure would expand the pension framework for SERS and TRS by adding a new retirement savings option alongside the existing defined benefit structure and by shifting some additional contribution obligations to the State and participating employers. Because there were no committee transcripts or recorded votes provided, the overall sentiment cannot be measured from debate or roll call history. Based on the bill text alone, the measure appears to be introduced as a structural pension reform proposal rather than a negotiated compromise, and it is framed in neutral administrative terms. The absence of recorded discussion means there is no documented support or opposition in the supplied materials. The main point of potential contention is fiscal: the bill requires employer and State matching-style deposits into individual accounts, which could increase public pension costs and create new ongoing obligations for the State and affected employers. Another likely issue is policy direction, since the bill would add a defined contribution option to systems that currently operate primarily as defined benefit plans, which may raise concerns among stakeholders who prefer preserving the existing pension structure. The mandate-without-reimbursement language may also be controversial for school districts or other public employers that would bear implementation costs.

Impact

HB1636 would amend Sections 14-131, 14-152.1, 16-158, and 16-203 of the Illinois Pension Code and add new Sections 14-157 and 16-207, creating voluntary defined contribution plans for active members of SERS and TRS. It would also revise the contribution formulas so that State contribution requirements account for the new plan deposits, and it would exempt any resulting benefit increase from the pension code’s “new benefit increase” definition. The bill further amends the State Mandates Act to provide that no State reimbursement is required for implementation, shifting any administrative or fiscal burden to the affected systems and employers.

Sentiment

No committee testimony or voting record was provided, so there is no documented legislative sentiment to summarize from debate or roll calls. From the bill text, the proposal is presented as a pension design change with a clear administrative structure, but it also carries significant fiscal implications that would likely draw scrutiny. Overall, the available record shows introduction only, with no recorded support or opposition in the supplied materials.

Contention

The most notable contention is likely over cost and funding: the bill requires optional employee contributions to be matched by employer and State deposits, which could increase liabilities or annual appropriations. A second likely dispute is policy-based, because the measure introduces a defined contribution option into SERS and TRS, potentially raising concerns from those who favor traditional defined benefit pensions or who worry about retirement security and investment risk shifting to participants. The no-reimbursement mandate may also be controversial for school districts and other public employers that would have to implement the new plan without State reimbursement.