Springfield, IL – State Representative Morgan today advanced House Bill 5196 out of the House, to extend Illinois’ highly successful and bipartisan Accelerated Pension Benefit Program, commonly known as the “COLA Buyout Program”, for an additional two years, through June 30, 2028.
“Extending the COLA Buyout Program is a fiscally responsible step that continues to deliver real savings for taxpayers while strengthening our state’s long-term financial outlook,” said State Representative Bob Morgan. “This program gives retirees a voluntary option while helping Illinois meaningfully reduce its pension obligations and ease pressure on our annual budget.”
The voluntary program allows retirees in Illinois’ four statewide retirement systems to receive a lump-sum payment in exchange for forgoing future 3% compounded cost-of-living adjustments (COLAs). Participation remains strong across systems, reflecting both the program’s flexibility for retirees and its effectiveness as a financial tool for the state.
To date, the program has delivered substantial results. According to the State Employees’ Retirement System (SERS), State Universities Retirement System (SURS), and Teachers’ Retirement System (TRS), the initiative has reduced Illinois’ pension liabilities by an estimated $2.6 billion to $2.9 billion.
These reductions are already translating into near-term budget relief. For Fiscal Year 2027, state contributions are projected to be approximately $49 million lower for SERS and $125 million lower for TRS than they would have been without the program, freeing up critical resources while maintaining progress on long-term pension obligations.
Credit rating agencies have recognized the program as a responsible and constitutional approach to addressing Illinois’ pension challenges, and it has consistently earned bipartisan support in the General Assembly.
House Bill 5196 now advances to the Illinois Senate, where it will be carried by State Senator Rob Martwick.