Series of November 2019 Capital Bonds
BEAL
THE STATE
AUG 9 1818
Review of Recent Pension Developments
2017
Smoothing of Changes in Actuarial Assumptions
•
2018
Beginning with FY 2018, changes in actuarial assumptions were smoothed over a 5-year period. Changes in actuarial
assumptions that first applied in FY 2014-2017 are being retroactively smoothed over a 5-year period beginning
with the year the change first applied
• Accelerated Pension Benefit Programs (P.A. 100-587)
⚫ The Pension Buyout Program: Eligible members of SERS, TRS and SURS who have terminated service may forfeit all
rights to future benefit payments in exchange for an accelerated pension benefit payment equal to 60% of the
present value of the pension benefit to which the member is entitled
• The AAI Reduction Program: At the time of retirement, eligible Tier 1 members of SERS, TRS and SURS may forfeit
the 3%, compounded automatic annual increase ("AAI") in exchange for (i) a 1.5% non-compounded AAI and (ii) an
accelerated pension benefit payment from the State equal to 70% of the difference in the present value of such AAls
⚫ The accelerated pension benefit payments will be funded using proceeds from the issuance of State Pension
Obligation Acceleration Bonds. There is remaining authorization for $700 million of such bonds
•
•
Public Act 101-0010 (enacted June 5, 2019) extended the end date of the programs from June 30, 2021 to June 30,
2024
As of October 1, 2019, the balance in the Pension Obligation Acceleration Bond Fund was approximately $184
million, meaning approximately $115 million of the April 2019A proceeds have been spent out of the fund
OF ILLINOIS
25View entire presentation