Governor Signs Breen Bill that Addresses Pension Spiking within Illinois Municipal Retirement Fund

Legislation sponsored by State Representative Peter Breen (R-Lombard) that shines a light of transparency on efforts to saddle taxpayers with additional public pension liabilities was signed into law this past week by Governor Bruce Rauner.

HB 5684, signed into law as PA 99-0646 addresses the practice of pension spiking, which occurs when public employees in the Illinois Municipal Retirement Fund (IMRF) who have accrued large balances of unused sick and vacation time are allowed to convert those days into early pre-retirement cash payments. The payments artificially raise the employee’s pensionable income, which can lead to much higher pension payments than expected upon retirement.

“Pension spiking hurts everyone, taxpayers and public employees alike,” said Breen. “These pensions are paid for entirely by local residents, often through their property taxes. Our pension liabilities are already at unsustainable levels across the state, and every abuse of the system must be rooted out, exposed, and stopped.”

Through the new law, local government boards will now be required to hold an open meeting and take a public vote, after full disclosure of exactly how a retiring employee’s pension would be affected before any potential pension spiking payment can even be considered. “The provisions of this law will shine a bright light for taxpayers and should curb or end this budget-busting practice at the local government level,” Breen said. “This is a taxpayer protection initiative that received wide bipartisan support in both chambers of the General Assembly.”

The new law takes effect immediately.