House Bill No. 5609 mandates that municipalities or special taxing districts with defined benefit pension systems must consider, when calculating an employee's pension benefits, the greater of either the wages used to determine the employee's final average salary (FAS) or the temporary total and partial disability benefits received by the employee during the FAS calculation period. This means that if the disability benefits exceed the wages, the pension calculation will utilize the higher amount, potentially increasing the pension benefits paid out. The bill explicitly states that it does not impair or alter any existing collective bargaining agreements that were in effect prior to July 1, 2025.

The bill is set to take effect on July 1, 2025, and is expected to increase costs for municipalities that offer defined benefit pensions, as it may lead to higher pension liabilities. The financial impact will vary based on the frequency of instances where disability benefits are included in the pension calculations, which could result in increased benefits and associated costs for the retirement systems.