CHICAGO -- Governor George H. Ryan today signed House Bill 2671, allowing eligible state employees to purchase up to five years of service in order to qualify for early retirement.
“Creating this opportunity for early retirement was just one of the components that helped us put together a balanced budget for Fiscal Year 2003,” said Governor Ryan. “We estimate that in the next fiscal year alone, this provision could save the General Revenue Fund approximately $64.5 million.”
For early retirement, state employees must be active in payroll status in June 2002, on layoff status with the right to reemployment/recall, or on disability leave for not more than two years. They must have eight years of participation in the State Employees Retirement System. Members may not have received any retirement annuity beginning earlier than August 1, 2002.
Before December 31, 2002, eligible employees must submit a written application requesting early retirement effective no later than December 31, 2002. Eight years of State Employees Retirement Service must be accumulated without the use of the five-year benefit provided by HB 2671.
The eligibility requirements of the early retirement incentive enhancement are:
- 13 years of service (including five years of early retirement incentive service) at age 60;
- 25 years of service at age 55 (reduction in benefits between ages 55 and 60 is waived under the early retirement incentive);
- Rule of 85 (age plus years of service credit equals 85 years).
The State Finance Act has also been amended by HB 2671 to prohibit state employees who take advantage of the early retirement incentive from being hired back on a contractual basis.
According to the State Employees Retirement System, over 20,000 State employees will be eligible for early retirement and an estimated 7,365 employees will participate. One-half of the vacated positions will not be filled, providing an estimated savings of $64.5 million in the General Revenue Fund during FY 2003 and $184.3 million for FY 2004.