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Pritzker signs law extending pension buyout option for state employees

Formerly known as House Bill 4292, the newly signed law authorizes $1 billion in additional general obligation bond funding to extend the bipartisan program.

SPRINGFIELD, Ill. — A bill extending the pension buyout option for Illinois state employees to 2026 is now law.  

Formerly known as House Bill 4292, the newly signed law authorizes $1 billion in additional general obligation bond funding to extend the bipartisan program.

Under this law, state employees can opt for a pension buyout through June 2026. It was supposed to end in 2024. Pritzker's FY2023 budget authorized an extra $500 million payment to the state pension fund beyond the required annual contribution to reduce overall pension liabilities, according to his office. 

The governor's office says that additional payment will save taxpayers an estimated $1.8 billion.

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Pritzker said the move will help save taxpayers money in the future by paying down pension debt in advance. 

"I believe in fiscal responsibility and in responsible fiscal management," the governor said. "That means taking every action possible to address our pension obligation while honoring promises made to current and retired workers. Promises made by governors and legislators on both sides of the aisle."

More good news for Illinois finances — Fitch Ratings gave the state a two-notch bond rating upgrade on Thursday. That's the state's fifth notch upwards in less than a year, according to Pritzker's office. 

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The Fitch upgrade is also a first for Illinois' GO bonds since June 2000.

"Balanced budgets four years in a row, paying the state's bills on time, early repayment of pandemic-related borrowing, clearing out debts left by previous administrations, making higher-than-required pension payments, setting aside $1 billion in savings for a rainy day -- this is what responsible fiscal management looks like," said Pritzker. "Working with the General Assembly and my fellow constitutional officers, with dedication and determination we have turned Illinois from a deadbeat state into a fiscally responsible state that is attracting business from around the globe."

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