Substitute 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 disability and temporary partial disability benefits received by the employee during the FAS calculation period. This means that if the disability benefits exceed the wages, the pension system must use the higher amount for the FAS calculation, potentially increasing the pension benefits paid out to employees.

The bill explicitly states that it does not impair or alter any existing collective bargaining agreements that are in effect before July 1, 2025. The new provisions will take effect on that date, and the fiscal impact on municipalities is expected to be significant, as it may increase their costs due to the inclusion of disability benefits in pension calculations. The financial implications will vary based on the frequency of instances where disability benefits are higher than the wages typically used in these calculations.